Notes to Accounts of Aban Offshore Ltd.
Mar 31, 2018
1. Corporate Information
Aban Offshore Limited (AOL) (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two 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 financial statements have been prepared in accordance with IFRS converged Indian Accounting Standards (Ind AS) as issued by the Ministry of Corporate Affairs (MCA).
All the assets and liabilities have been classified as current and non-current as per the Companyâs normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. 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 classification of assets and liabilities.
3.1 Recent accounting pronouncements
In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) Amendment, Rules, 2018, notifying Indian Accounting Standards (Ind AS) 115 âRevenue from Contracts with Customersâ, notifying amendments to Ind AS 12 âIncome Taxesâ and Ind AS 21 âThe Effect of Changes in Foreign Exchange Ratesâ.Ind As 115 and amendments to the Ind AS 21 are applicable to the Company w.e.f. 1st April 2018. The impact of the above amendments on the financial statements has not been evaluated.
(a) 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 2018, the amount of per share dividend recognized as distributions to equity shareholders is Nil (31st March 2017: Nil).
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 2017:1.84 million equity shares of Rs.2 each) out of which 0.16 million equity shares of Rs.2 each have been already allotted up to the balance sheet date under the scheme and included under the paid up capital (31st March 2017: 0.16 million equity shares of Rs.2 each).
As per the records of the company, including its register of shareholders/members and other declarations received from the shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.
* Includes penal interest @ 2% p.a.
Loans under (a) above are secured by second pari-passu charge on specific offshore drilling rigs owned by foreign subsidiaries & first mortgage on windmill lands owned by Indian Parent company.
Loans under (b) above are secured by first charge on specific offshore drilling rigs owned by foreign subsidiaries.
Loans under (c) were Secured by hypothecation of vehicles.
Loans under (d) were Secured by charge on properties owned by Promoter/Promoter group company.
Loans under (e) is Unsecured.
As per Ind AS, the Preference Share capital is grouped under borrowings.
Since all term loans have been recalled by the lenders, the entire term loans are presented as current liabilities as at 31.03.2018.
(i) All the secured lenders of term loans (banks) have issued recall notices during the year. Also one of the secured lenders has issued notice dated 7th May 2018 under section 13(2) of Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act , 2002 (SARFAESI Act) through the security trustee calling upon the company to pay the outstanding amount with interest in 60 days from the date of notice, failing which the bank would exercise the powers under section 13(4) of SARFAESI Act.
(ii) The Company has not redeemed its Non-Convertible Cumulative Redeemable Preference Shares on due dates. One of the preference shareholders of the company has filed a commercial suit before the Honorable High Court of Judicature at Bombay and two of the preference shareholders have filed petitions under section 55 of the Companies Act, 2013/under section 80 of the Companies Act, 1956 before the Honorable National Company Law Tribunal, Chennai Bench for non-redemption of Non-Convertible Cumulative Redeemable Preference Shares.These cases are pending before the said Honorable High Court and Tribunal respectively.
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 @13 p.a. % to 17.10 % p.a.
4. Fair value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The group categorizes assets and liabilities measured at fair value into one of three levels depending on the ability to observe inputs employed in their measurement. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are inputs that are observable, either directly or indirectly, other than quoted prices included within level 1 for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability reflecting significant modifications to observable related market data or companyâs assumptions about pricing by market participants.
5. Financial risk factors
The Companyâs activities expose it to market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. The Companyâs overall risk management strategy seeks to minimize adverse effect from the unpredictability of financial markets on the Companyâs financial performance.
The Board of Directors is responsible for setting the objectives and underlying principles of financial risk management for the Company. They review and agree on the policies for managing each of these risks and are summarized as follows:
Foreign exchange risk
The Company is exposed to foreign exchange risk principally via:
- transactional exposure that arises from the sales / receivables denominated in a currency other than the functional currency of the company
- Transactional exposure that arises from the cost of goods sold / payables denominated in a currency other than the functional currency of the Company.
- Foreign currency exposure that arises from foreign currency term loans / Working Capital loans (including interest payable) denominated in a currency other than the functional currency of the Company.
- Cash and cash equivalents held in foreign currency.
All these unhedged exposures are naturally hedged by future foreign currency earnings.
The impact on the Company financial statements from foreign currency volatility is shown in the sensitivity analysis.
Sensitivity analysis
The sensitivity analysis reflects the impact on income and equity due to financial instruments held at the balance sheet date. It does not reflect any change in sales or costs that may result from changing interest or exchange rates.
The following table shows the illustrative effect on the Income Statement and equity that would result, at the balance sheet date, from changes in currency exchange rates that are reasonably possible for major currencies where there have recently been significant movements:
The following table shows the illustrative effect on the Income Statement and equity that would result, at the balance sheet date, from changes in interest rates that are reasonably possible for term loans with floating interest where there have recently been significant movements:
A decrease in interest rates and a depreciation of foreign currencies would have the opposite effect to the impact in the table above. Credit risk
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The major classes of financial assets of the Company are bank deposits, trade receivables, amount due from associated company and amounts due from subsidiary corporations. For bank deposits, the Company maintains its cash deposits if any primarily with lenders of the Company or financial institutions with high credit quality to minimise their exposure to the banks.
Due to the nature of the Companyâs operations, revenue and receivable are typically concentrated amongst a relatively small customer base of oil and gas companies. Customers are government linked based oil and gas corporations. TheCompany has policies in place to ensure that drilling contracts are with customers of adequate financial standing and appropriate credit history, and where necessary, certain guarantees in form of bank. The maximum exposure to credit risk for each class of financial assets is the carrying amount of that class of financial assets on the balance sheet.
(i) Financial assets that are neither past due nor impaired
Bank deposits that are neither past due nor impaired are mainly deposits with banks with high credit-ratings assigned by international credit-rating agencies. Trade receivables that are neither past due nor impaired are substantially receivables from companies with a good collection track record with the Group. Amounts due from subsidiary corporations are neither past due nor impaired.
(ii) Financial assets that are past due and/or impaired
There is no other class of financial assets that is past due and/or impaired except for trade receivables. The age analysis of trade receivables that are past due but not impaired is as follows:
Allowance for impairment of trade receivables arise from customers that are either in financial difficulties and/or have history at default or significant delay in payments which management is of the opinion that payments are not forthcoming as at the end of financial year. In the event that payment is doubtful, the receivables will be recommended for write off.
(c) Liquidity risk
The drilling operations of the Company require substantial investment and are dependent on its ability to finance its rig construction and acquisitions and service its bank borrowings as well as other capital and operating requirements and commitments. The Company ensures that arrangements have been made to obtain adequate funds to meet all its operating and capital obligations in the form of continuing committed credit facilities with financial institutions as well as continuing financial support from the immediate and ultimate holding corporation to enable the Group to meet its debts and liabilities as and when they fall due for at least 12 months from the balance sheet date.
The table below analyses the maturity profile of the Companyâs and the Companyâs financial liabilities based on contractual undiscounted cash flows at the balance sheet date.
The above analysis table does not include loans to be settled on demand.
Capital management
( a ) The Companyâs objectives when managing capital are to ensure the Companyâs ability to continue as a going concern and to maintain an optimal capital structure by issuing or redeeming additional equity, borrowings and other instruments when necessary.
As the Company is mainly funded through external borrowings, the objectives of the Board of Directors when managing capital is to ensure that the Group and the Company continue to enjoy the use of funds from borrowings by ensuring that the Company continue to service its debt obligations in the form of interests and principal repayments on due dates in accordance with the borrowing agreements, and to ensure that they remain in compliance with the financial and non-financial covenants in relation to their borrowings.
The Company considers capital to comprise of its equity and borrowings, as follows:
(b ) Fair value measurements
The carrying amounts less impairment provision of trade receivables and payables are assumed to approximate their fair values. The carrying amounts of current borrowings approximate their fair values.
6. Deferred tax liabilities
The balance comprises of temporary differences attributable to:
*Since diluted earnings per share shows higher value as compared to basic earnings when taking the options/warrants into account, the options/warrants are anti-dilutive as at the year ended 31.03.2018 and are ignored in the calculation of diluted earnings per share as required under the Accounting Standard.
7. Gratuity and other defined benefit plans
The company operates a gratuity benefit 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 benefit expense recognized in the statement of profit and loss, the funded status and the amounts recognized in the balance sheet for such plans.
8. Employee stock option scheme
The 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 specified period subject to fulfillment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of companyâs 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 defined by SEBI) of the underlying equity shares on the grant date.
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 2017: 1.84 Million equity shares of Rs.2 each)-Options lapsed during the year 0.461 million(up to 31st March 2017: 0.286 million equity shares of Rs.2 each)-Options exercised during the year- Nil (up to 31st March 2017: 0.160 million equity shares of Rs.2 each)-Options outstanding at the end of year :0.935 million equity shares of Rs.2 each (up to 31st March 2017: 1.396 million equity shares of Rs.2 each)-Options yet to be granted under the scheme: 0.749 million (31st March 2017: 0.288 million equity shares of Rs.2 each).
9. Interest in joint venture/associate
(a) The companyâs interest,in joint venture entity/associate is as follows:
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.
(b) The companyâs share of the assets, liabilities, Revenue and Profit in the associate company -Aban Drilling Services Private Limited, based on the audited financial statements are as follows:
10. Segment information
The Company is engaged primarily in the business of offshore drilling services. The wind energy division of the Company does not meet the quantitative threshold as per Ind AS 108.Accordingly there is no requirement of segment reporting as per the said Accounting Standard.
11. Related Party Disclosures
Names of related parties and related party relationship Related parties where control exists
A. Subsidiary companies
Aban Energies Limited, India (wholly owned subsidiary)
Aban Holdings Pte Limited, Singapore (wholly owned foreign subsidiary)
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 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 Aban Labuan Pvt Ltd, Labuan,Malaysia
C. Associate of Aban Offshore Limited
Aban Drilling Services Private Limited
D. Related parties with whom transactions have taken place during the year
a. Key Management personnel
(i) Mr. Reji Abraham Managing Director
(ii) Mr. P. Venkateswaran Dy. Managing Director
(iii) Mr. C. P. Gopalkrishnan Dy. Managing Director and Chief Financial Officer
b. Relative of Key Management Personnel â Mrs. Deepa Reji Abraham - Director
(c ) Claims against the company not acknowledged as debt:
As at 31st March 2018:
(i) In respect of civil suits against the company - Rs 95.50 million
(ii) In respect of Income Tax matters :
Income Tax demand relating to the period 2002 â 2006 amounting to INR 556.40 million pending before High Court of Madras;
Income Tax demand relating to the period 2008 â 2009 amounting to INR 97.48 million pending before Commissioner of Income Tax (Appeals);
Income Tax demand relating to the period 2006â2008 amounting to INR 396.17 million pending before Income Tax Appellate Tribunal;
Income Tax demand relating to the period 2008 â 2009 amounting to INR 418.38 million pending before the Income Tax Appellate Tribunal.
Income Tax demand relating to the period 2009 â 2010 amounting to INR 812 million pending before Income Tax Appellate Tribunal. Income tax demand relating to the period 2010-2011 amounting to INR 1907.90 Million pending before Income Tax Appellate Tribunal. Income tax demand relating to the period 2011-2012 amounting to INR 854.33 Million pending before Income Tax Appellate Tribunal. Income tax demand relating to the period 2012-2013 amounting to INR 1,490.36 Million pending before Income Tax Appellate Tribunal.
(iii) In respect of Service Tax matters:
Service Tax demand relating to the year 2007 amounting to INR 17.36 million pending before Supreme Court.
Service Tax demand relating to the year 2011 amounting to INR 78.72 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2011 â 2012 amounting to INR 18.94 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2012 â 2014 amounting to INR 36.78 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2014 â 2015 amounting to INR 79.80 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2005 â 2011 amounting to INR 37.31 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2012 â 2014 amounting to INR 236.49 million pending before the CESTAT ,Chennai. Service Tax demand relating to the period 2008 â 2010 amounting to INR 605.75 million pending before the CESTAT ,Mumbai. Service Tax demand relating to the period 2009 â 2012 amounting to INR 166.89 million pending before the CESTAT ,Mumbai. Service Tax demand relating to the period 2015 â 2016 amounting to INR .46 million pending before the CESTAT ,Mumbai.
Service Tax demand relating to the period 2015 â 2017 amounting to INR 46.01 million pending before the CESTAT ,Mumbai.
(iv) In respect of Customs duty matter:
Customs Duty demand relating to the period 2015 - 2016 amounting to INR 107.90 million pending before CESTAT Mumbai.
Customs Duty demand relating to the period 2016 - 2017 amounting to INR 916.00 million pending before Honâble High Court of Bam bay.
(v) In respect of Sales Tax matter:
Sales Tax demand for the period 2010-11 amounting to INR 984.90 million pending before Joint Commissioner of Sales Tax Appeals.
Sales Tax demand for the period 2012-13 amounting to INR 459.75 million pending before Joint Commissioner of Sales Tax Appeals.
Sales Tax dues for the period 2013-14 amounting to INR 580 million for which the company is intending preferring an appeal with Appellate Authority.
As at 31st March 2017:
(i) In respect of civil suits against the company - Rs 95.50 million
(ii) In respect of Income Tax matters :
Income Tax demand relating to the period 2002 â 2006 amounting to INR 556.40 million pending before High Court of Madras;
Income Tax demand relating to the period 2008 â 2009 amounting to INR 103.10 million pending before Commissioner of Income Tax (Appeals);
Income Tax demand relating to the period 2006â2008 amounting to INR 396.17 million pending before Income Tax Appellate Tribunal;
Income Tax demand relating to the period 2008 â 2009 amounting to INR 418.38 million pending before the Income Tax Appellate Tribunal.
Income Tax demand relating to the period 2009 â 2010 amounting to INR 812 million pending before Income Tax Appellate Tribunal. Income tax demand relating to the period 2010-2011 amounting to INR 1907.90 Million pending before Income Tax Appellate Tribunal. Income tax demand relating to the period 2011-2012 amounting to INR 854.33 Million pending before Income Tax Appellate Tribunal.
(iii) In respect of Service Tax matters:
Service Tax demand relating to the year 2007 amounting to INR 17.36 million pending before Supreme Court.
Service Tax demand relating to the year 2011 amounting to INR 78.72 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the year 2010 amounting to INR 16.32 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2011 â 2012 amounting to INR 18.94 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2012 â 2014 amounting to INR 36.78 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2014 â 2015 amounting to INR 79.80 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2005 â 2011 amounting to INR 37.31 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2012 â 2014 amounting to INR 236.49 million pending before the CESTAT ,Chennai. Service Tax demand relating to the period 2008 â 2010 amounting to INR 605.75 million pending before the CESTAT ,Mumbai. Service Tax demand relating to the period 2009 â 2012 amounting to INR 166.89 million pending before the CESTAT ,Mumbai.
(iv) In respect of Customs duty matter:
Customs Duty demand relating to the period 2015 - 2016 amounting to INR 107.90 million pending before CESTAT Mumbai.
Customs Duty demand relating to the period 2016 - 2017 amounting to INR 916.00 million pending before Honâble High Court of Bambay
(v) In respect of Sales Tax matter:
Sales Tax demand for the period 2010-11 amounting to INR 984.90 million pending before Joint Commissioner of Sales Tax Appeals.
Sales Tax demand for the period 2012-13 amounting to INR 459.75 million for which company is in the process of preferring an appeal with Appellate Authority.
Sales Tax demand for the period 2013-14 amounting to INR 580 million for which the Comapny is intending preferring an appeal with appellate authority.
12. Due to micro and small enterprises
The company has no demand to suppliers registered under the Micro, Small and Medium Enterprises Development Act, 2006 (31st March 2017: Nil)
13. Details of loan given, Investments made and guarantees given covered u/s 186(4) of the Companies Act, 2013
(i) Loans given to related parties and investments made in them are disclosed under the respective heads in the financial statements.
(ii) Corporate guarantees given by the Company to:
(a) banks in respect of loans availed by the wholly owned foreign subsidiary and its step down subsidiaries as at 31st March 2018: Rs 612.84 million (31st March 2017: Rs 614.41 million)
(b) customers of wholly owned foreign subsidiary and its step down subsidiaries in respect of contractual performance of such subsidiaries as at 31st March 2018: Rs 8056.25 million (31st March 2017:Nil)
14. Previous year figures
The Company has reclassified previous year figures to conform to this yearâs classification.
Mar 31, 2017
1. Corporate Information
Aban Offshore Limited (AOL) (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two 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 financial statements have been prepared in accordance with IFRS converged Indian Accounting Standards (IndAS) as issued by the Ministry of Corporate Affairs (MCA). These financial statements are in compliance with IndAS 101, âFirst Time Adoption of Indian Accounting Standardsâ, as these are the Companyâs first IndAS financial statements for the year ended March 31, 2017.
All the assets and liabilities have been classified as current and non-current as per the Companyâs normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. 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 classification of assets and liabilities.
(a) 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 2017, the amount of per share dividend recognized as distributions to equity shareholders is Nil (31st March 2016: Nil).
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 2015:1.84 million equity shares of Rs.2 each ) out of which 0.16 million equity shares of Rs.2 each have been already allotted up to the balance sheet date under the scheme and included under the paid up capital (31st March 2016: 0.16 million equity shares of Rs.2 each).
(b ) Share Warrants:
During 2013-14, the Company had allotted 4.00 million share warrants on a preference basis to the Promoter/ Promoter Company entitling them to apply for and obtain allotment of one equity share of Rs 2/- each fully paid at a price of Rs 391/- per share against each such share warrant at any time after the date of allotment but on or before the expiry of 18 months from the date of allotment in one or more tranches. The Company has received the allotment money and allotted the shares against warrants in earlier years and no warrants are pending for conversion as at 31st March 2017.
* Includes penal interest @ 2% p.a
Loans under (a) above are secured by first and second charge on specific offshore drilling rigsflloating production units and first and second charge on drilling rigs owned by foreign subsidiaries. Amount overdue as on the balance sheet date on account of interest and principal is Rs 85.07 million and Rs 249.58 million.
Loans under (b) above are secured by first charge on specific offshore drilling rigs owned by foreign subsidiaries. Amount overdue as on the balance sheet date on account of interest and principal is Rs 8.30 million and Rs 44.80 million.
Loans under (d) are Seucred by hypothecation of vehicles.
Loans under (e) are Seucred by charge on properties owned by Promoter/Promoter group company.
As per IND AS, the Preference Share capital is grouped under borrowings.
3. Fair value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The group categorizes assets and liabilities measured at fair value into one of three levels depending on the ability to observe inputs employed in their measurement. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are inputs that are observable, either directly or indirectly, other than quoted prices included within level 1 for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability reflecting significant modifications to observable related market data or companyâs assumptions about pricing by market participants.
4. Financial risk factors
The Companyâs activities expose it to market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. The Companyâs overall risk management strategy seeks to minimize adverse effect from the unpredictability of financial markets on the Companyâs financial performance.
The Board of Directors is responsible for setting the objectives and underlying principles of financial risk management for the Company. They review and agree on the policies for managing each of these risks and are summarised as follows:
Foreign exchange risk
The Company is exposed to foreign exchange risk principally via:
- transactional exposure that arises from the sales / receivables denominated in a currency other than the functional currency of the company
- Transactional exposure that arises from the cost of goods sold / payables denominated in a currency other than the functional currency of the Company.
- Foreign currency exposure that arises from foreign currency term loans / Working Capital loans (including interest payable) denominated in a currency other than the functional currency of the Company.
- Cash and cash equivalents held in foreign currency.
All these unhedged exposures are naturally hedged by future foreign currency earnings.
The impact on the Company financial statements from foreign currency volatility is shown in the sensitivity analysis.
Sensitivity analysis
The sensitivity analysis reflects the impact on income and equity due to financial instruments held at the balance sheet date. It does not reflect any change in sales or costs that may result from changing interest or exchange rates.
The following table shows the illustrative effect on the Income Statement and equity that would result, at the balance sheet date, from changes in currency exchange rates that are reasonably possible for major currencies where there have recently been significant movements:
The following table shows the illustrative effect on the Income Statement and equity that would result, at the balance sheet date, from changes in interest rates that are reasonably possible for term loans with floating interest where there have recently been significant movements:
A decrease in interest rates and a depreciation of foreign currencies would have the opposite effect to the impact in the table above.
Credit risk
Credit risk refers to the risk that counter party will default on its contractual obligations resulting in financial loss to the Company. The major classes of financial assets of the Company are bank deposits, trade receivables, amount due from associated company and amounts due from subsidiary corporations. For bank deposits, the Company maintains its cash deposits if any primarily with lenders of the Company or financial institutions with high credit quality to minimise their exposure to the banks.
Due to the nature of the Companyâs operations, revenue and receivable are typically concentrated amongst a relatively small customer base of oil and gas companies. Customers are government linked based oil and gas corporations. The Company has policies in place to ensure that drilling contracts are with customers of adequate financial standing and appropriate credit history, and where necessary, certain guarantees in form of bank. The maximum exposure to credit risk for each class of financial assets is the carrying amount of that class of financial assets on the balance sheet.
(i) Financial assets that are neither past due nor impaired
Bank deposits that are neither past due nor impaired are mainly deposits with banks with high credit-ratings assigned by international credit-rating agencies. Trade receivables that are neither past due nor impaired are substantially receivables from companies with a good collection track record with the Group. Amounts due from subsidiary corporations are neither past due nor impaired.
(ii) Financial assets that are past due and/or impaired
There is no other class of financial assets that is past due and/or impaired except for trade receivables. The age analysis of trade receivables that are past due but not impaired is as follows:
Allowance for impairment of trade receivables arise from customers that are either in financial difficulties and/or have history at default or significant delay in payments which management is of the opinion that payments are not forthcoming as at the end of financial year. In the event that payment is doubtful, the receivables will be recommended for write off.
(c) Liquidity risk
The drilling operations of the Company require substantial investment and are dependent on its ability to finance its rig construction and acquisitions and service its bank borrowings as well as other capital and operating requirements and commitments. The Company ensures that arrangements have been made to obtain adequate funds to meet all its operating and capital obligations in the form of continuing committed credit facilities with financial institutions as well as continuing financial support from the immediate and ultimate holding corporation to enable the Group to meet its debts and liabilities as and when they fall due for at least 12 months from the balance sheet date.
The table below analyses the maturity profile of the Companyâs and the Companyâs financial liabilities based on contractual undiscounted cash flows (including interest payable in the future) at the balance sheet date.
The above analysis table does not include loans to be settled on demand.
Capital management
( a ) The Companyâs objectives when managing capital are to ensure the Companyâs ability to continue as a going concern and to maintain an optimal capital structure by issuing or redeeming additional equity, borrowings and other instruments when necessary.
As the Company is mainly funded through external borrowings, the objectives of the Board of Directors when managing capital is to ensure that the Group and the Company continue to enjoy the use of funds from borrowings by ensuring that the Company continue to service its debt obligations in the form of interests and principal repayments on due dates in accordance with the borrowing agreements, and to ensure that they remain in compliance with the financial and non-financial covenants in relation to their borrowings.
The Company considers capital to compromise of its equity and borrowings, as follows:
(b ) Fair value measurements
The carrying amounts less impairment provision of trade receivables and payables are assumed to approximate their fair values. The carrying amounts of current borrowings approximate their fair values.
5. Transition to IndAS
The transition to IndAS has been carried out from the accounting principles generally accepted in India (Indian GAAP), which is considered as the âPrevious GAAPâ, for purposes of IndAS 101(First time adoption of Indian accounting standards).
The preparation of these financial statements resulted in changes to the Companyâs accounting policies as compared to most recent annual financial statements prepared under Previous GAAP. Accounting policies have been applied consistently to the preparation of the IndAS opening statement of financial position as at April 1, 2015 (âTransition Dateâ) for the purpose of the transition to IndAS and as required by IndAS 101 (First time adoption of Indian accounting standards).
The Companyâs financial statements for the year ended March 31, 2017 are the first annual financial statements prepared in compliance with IndAS. The adoption of IndAS was carried out in accordance with IndAS 101(First time adoption of Indian accounting standards), using April 1, 2015 as the transition date. IndAS 101(First time adoption of Indian accounting standards) requires that all IndAS standards and interpretations that are effective for the first IndAS Financial Statements for the year ended March 31, 2017, be applied consistently and retrospectively for all fiscal years presented. All applicable IndAS have been applied consistently and retrospectively wherever required. The resulting difference between the carrying amounts of the assets and liabilities in the financial statements under both IndAS and Previous GAAP as of the Transition Date have been recognized directly in equity on transition.
Reconciliations:
The following reconciliations provide a quantification of the effect of significant differences arising from the transition from Previous GAAP to IndAS in accordance with IndAS 101(First time adoption of Indian accounting standards).:
- Equity as at April 1, 2015
- Equity as at March 31, 2016
- Profit for the year ended March 31, 2016 and
- Explanation of material adjustments to cash flow statements.
In the reconciliations mentioned above, certain reclassifications have been made to Previous GAAP financial information to align with the IndAS presentation.
Notes: A. Property, plant and equipment:
As per âthe deemed costâ exception given in paragraphs D5 and D6 (Appendix D) to IndAS 101(First time adoption of Indian accounting standards), any item of property, plant and equipment can be measured at the date of transition to Ind AS at its fair value or at revalued amount. The Previous GAAP revalued amount can be considered as deemed cost if the revaluation was, at the date of the revaluation, broadly comparable to either the fair value or cost or depreciated cost in accordance with IndAS.
In accordance with above, upon transition to IndAS, the various items of Property, plant and equipment have been valued as follows:
- Offshore Rigs of the company have been fair valued based on an independent technical evaluation at Rs19,904.00 million;which has been considered to be the âdeemed costâ of these assets. This gave rise to a fair value gain of Rs 10,671.54 million which was recognized in equity on transition.
- All the other assets were considered at cost with appropriate application of depreciation in accordance with Ind AS requirements retrospectively.
B. Non-Current Investments:
As per Indian GAAP, Non-Current investments are carried at cost. However the same need to be fair valued as per IndAS 101(First time adoption of Indian accounting standards). As per Appendix D paragraph D19B of IndAS 101(First time adoption of Indian accounting standards),â an entity may designate an investment in an equity instrument as at fair value through other comprehensive income in accordance with paragraph 5.7.5 of IndAS 109(Financial instruments) on the basis of the facts and circumstances that exist at the date of transition to IndAS.â
The Aggregate carrying value of quoted non-current investments as per Indian GAAP as on April 1, 2015 was Rs.10.21 million. However the Fair Market value of these investments as on the same date was Rs.24.05 million. Hence, the value of non-current investments has increased as per IndAS to the extent of this difference of Rs.13.84 million which has been recognized in equity on transition.
C. Other current Financial Assets:
As per Indian Accounting Standard (IndAS) 109 Financial Instruments, âThe amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount and, for financial assets, adjusted for any loss allowance.
The effective interest rate is a rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of a financial asset or to the amortized cost of a financial liability. When calculating the effective interest rate, an entity shall estimate the expected cash flows by considering all the contractual terms of the financial instrument but shall not consider the expected credit losses. The calculation includes all fees paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs, and all other premiums or discounts.
As per Indian GAAP, the transaction costs or issue / processing costs incurred for various loans / advances were charged off as expense at the time of incurrence. However, as per IndAS109 (quoted above), these transaction costs need to be amortized over the period of the loan.
As on April 1, 2015, the prepaid upfront processing charges amounting to Rs.21.23 million were included in Long Term Loans and Advances as per Indian GAAP.
However, as per IndAS, since the same has already been included in the workings for amortization of loan issue costs, this prepaid amount of Rs.21.23 million has been reversed.
The above difference of Rs.21.23 million has been deducted from equity on transition.
D. Share Capital
IndAS 32 (Financial Instruments: Presentation) requires the issuer of a financial instrument to classify the instrument as a liability or equity on initial recognition, in accordance with its substance and the definitions of these terms. The application of this principle requires certain instruments that have the form of equity to be classified as liability. For example, under IndAS 32(Financial Instruments: Presentation), mandatorily redeemable preference shares on which a fixed dividend is payable are treated as a liability. Under Indian GAAP, classification is normally based on form rather than substance.
As on April 1, 2015, the Redeemable Preference Share Capital was Rs.2,810 Million. This was classified under Equity Share Capital as per Indian GAAP. However, as per IndAS, the same has been classified as Debt Liability.
Hence the amount of Rs.2,810 million has been reduced from the total Share Capital of Rs.2,925.51 million. This leaves only the Equity Share Capital of Rs.115.51 million as on April 1, 2015.
E. Reserves and Surplus
As on April 1, 2015, the âReserves & Surplusâ amount as per Indian GAAP was Rs.28,501.51 million. With the adoption of various In-dAS as on the Transition date, the amounts of Various Assets and Liabilities have undergone adjustments resulting in increase by Rs 7263.36 million on transition.
These adjustments have been detailed in the various explanatory notes forming part of this report. All these adjustments have cumulatively impacted the âReserves and Surplusâ .
F. Long Term Borrowings
i) As per IndAS 32 (quoted under Note No.D above), mandatorily redeemable preference shares on which a fixed dividend is payable are treated as a liability / debt.
As on April 1, 2015, the Redeemable Preference Share Capital was Rs.2,810.00 Million. This was classified under Equity Share Capital as per Indian GAAP. However, as per IndAS, the same needs to be classified as Debt Liability. Accordingly, the preference shares redeemable after one year have been reclassified under Long Term Borrowings. The details are as follows:
ii) As per Indian GAAP, the transaction costs or issue / processing costs incurred for Term Loans have been charged off as expense at the time of incurrence. However, as per IndAS109 (refer the text extract of this IndAS in Note no.C above), these transaction costs need to be amortized over the period of the loan. Also, for calculating these amortized amounts, the effective interest rate has been worked out for every Term Loan.
The long term component of these processing costs which have been adjusted from Long Term Borrowings as on April 1, 2015 are Rs. 1.28 million.
Since the adjustment number (i) above is merely a reclassification of Liability, the same will not affect the Reserve. The remaining amount of Rs. 1.28 million has been recognized in Equity on transition.
G. Deferred Tax Liabilities (net)
Deferred tax is provided in full for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date.
As on April 1, 2015 the deferred tax liability already calculated on timing differences between depreciation as per Companies Act compared to Depreciation allowable as per Income Tax Act was Rs.745.81 million.
With the adoption of IndAS, there are various adjustments to the amounts of assets and liabilities (which have been identified under various notes in this document). These adjustments will also have an impact on the tax of the Company as per Indian Income Tax laws. The identified tax on timing difference between the IndAS balance sheet amounts as compared to the Income Tax Balance Sheet amounts as on April 1, 2015 is Rs.4,409.21 million. This would impact the deferred tax liability to the extent of Rs.3,663.40 million.
The above difference of Rs.3,663.40 million has been deducted from equity on transition.
H. Other financial liabilities
(i) As per IndAS 32 (quoted under Note No. 5 above), mandatorily redeemable preference shares on which a fixed dividend is payable are treated as a debt liability.
As on April 1, 2015, the Redeemable Preference Share Capital was Rs. 2,810 Million. This was classified under Equity Share Capital as per Indian GAAP. However, as per IndAS, the same needs to be classified as Debt Liability.
Accordingly, the preference shares redeemable in the next one year have been reclassified under Short Term Borrowings. The details are as follows:
(ii) As per Indian GAAP, the transaction costs or issue / processing costs incurred for Term Loans have been charged off as expense at the time of incurrence. However, as per IndAS109 (refer the text extract of this IndAS in Note no.3 above), these transaction costs need to be amortised over the period of the loan. Also, for calculating these amortised amounts, the effective interest rate has been worked out for every Term Loan.
The short term component of these processing costs which have been adjusted from Other Current Liabilities as on April 1, 2015 are Rs. 10.84 millions.
(iii) As per IndAS 10, if an entity declares dividends to holders of equity instruments (as defined in IndAS 32, Financial Instruments: Presentation), after the reporting period, the entity shall not recognize those dividends as a liability at the end of the reporting period. The dividends, declared after the reporting period but before the financial statements are approved for issue, are not recognized as a liability at the end of the reporting period because no obligation exists at that time.
Such dividends are however, disclosed in the notes in accordance with IndAS 1, Presentation of Financial Statements.
Currently, dividend proposed after the date of the financial statements but prior to the approval of financial statements is considered as an adjusting event, and a provision for dividend payment is recognized in the financial statements of the period to which the dividend relates. Under IndAS, dividend declaration is considered as a non-adjusting subsequent event and provision for dividend is recognized only in the period when the dividend is declared and approved.
As on April 1, 2015, the Proposed Equity dividend was Rs.207.92 million and the tax on proposed equity dividend was Rs.42.56 million. This was provided for under the heading âshort term provisionsâ as per Indian GAAP. However, since the same cannot be recognized as per IndAS, the total amount of Rs.250.48 million has been reduced from Short Term Provisions.
The above difference of Rs.250.48 million has been recognized in equity on transition.
*Since diluted earnings per share shows higher value as compared to basic earnings when taking the options/warrants into account, the options/warrants are anti-dilutive as at the year ended 31.03.2017 and are ignored in the calculation of diluted earnings per share as required under the Accounting Standard.
6. Gratuity and other defined benefit plans
The company operates a gratuity benefit 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 benefit expense recognized in the statement of profit and loss, the funded status and the amounts recognized in the balance sheet for such plans.
7. Employee stock option scheme
The 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 specified period subject to fulfillment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of companyâs 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 defined by SEBI) of the underlying equity shares on the grant date.
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 2016: 1.84 Million equity shares of Rs.2 each)-Options lapsed during the year Nil(up to 31st March 2016: 0.286 million equity shares of Rs.2 each)-Options exercised during the year- Nil (up to 31st March 2016: 0.160 million equity shares of Rs.2 each)-Options outstanding at the end of year :1.396 million equity shares of Rs.2 each (up to 31st March 2016: 1.396 million equity shares of Rs.2 each)-Options yet to be granted under the scheme: 0.288 million (31st March 2016: 0.288 million equity shares of Rs.2 each).
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.
8. Segment information
A. The Companyâs identifiable segments are offshore oil drilling and production services and wind power generation (Wind energy).
The said business segments have been identified considering the nature of services rendered and the internal financial reporting system. Income and expenses have been accounted for based on their relationship to the operating activities of the segment.
Revenue from operation of Rs 7748.42 million (31st March 2016: Rs 8432.59 million) is derived from a single customer. This revenue is attributed to the drilling segment.
9. Related Party Disclosures Names of related parties and related party relationship Related parties where control exists
A. Subsidiary companies
Aban Energies Limited, India (wholly owned subsidiary)
Aban Holdings Pte Limited, Singapore (wholly owned foreign subsidiary)
RadhapuramWintech Private Limited (Until 26th December 2016)
Aban Green Power Private Limited (Until 26th December 2016)
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
DDI Holding AS, Norway (Merged with Aban International Norway AS during the year 2015-16) 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 Aban Labuan Pvt Ltd, Labuan,Malaysia
C. Related parties with whom transactions have taken place during the year
a. Key Management personnel
(i) Mr. Reji Abraham -Managing Director
(ii) Mr. P. Venkateswaran- Dy. Managing Director
(iii) Mr. C. P. Gopalkrishnan-Dy. Managing Director and Chief Financial Officer
b. Relative of Key Management Personnel â
Mrs. Deepa Reji Abraham - Director
Related party transactions during the year
As at 31st March 2017:
(i) In respect of civil suits against the company - Rs 95.50 million
(ii) In respect of Income Tax matters :
Income Tax demand relating to the period 2002 â 2006 amounting to INR 556.40 million pending before High Court of Madras;
Income Tax demand relating to the period 2008 â 2009 amounting to INR 103.10 million pending before Commissioner of Income Tax (Appeals);
Income Tax demand relating to the period 2006 â 2008 amounting to INR 396.17 million pending before Income Tax Appellate Tribunal;
Income Tax demand relating to the period 2008 â 2009 amounting to INR 418.38 million pending before the Income Tax Appellate Tribunal.
Income Tax demand relating to the period 2009 â 2010 amounting to INR 812 million pending before Income Tax Appellate Tribunal.
Income tax demand relating to the period 2010-2011 amounting to INR 1907.90 Million pending before Income Tax Appellate Tribunal.
Income tax demand relating to the period 2011-2012 amounting to INR 854.33 Million pending before Income Tax Appellate Tribunal.
(iii) In respect of Service Tax matters:
Service Tax demand relating to the year 2007 amounting to INR 17.36 million pending before Supreme Court.
Service Tax demand relating to the year 2011 amounting to INR 78.72 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the year 2010 amounting to INR 16.32 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2011 â 2012 amounting to INR 18.94 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2012 â 2014 amounting to INR 36.78 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2014 â 2015 amounting to INR 79.80 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2005 â 2011 amounting to INR 37.31 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2012 â 2014 amounting to INR 236.49 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2008 â 2010 amounting to INR 605.75 million pending before the CESTAT ,Mumbai.
Service Tax demand relating to the period 2009 â 2012 amounting to INR 166.89 million pending before the CESTAT ,Mumbai.
(iv) In respect of Customs duty matter:
Customs Duty demand relating to the period 2015 - 2016 amounting to INR 107.90 million pending before CESTAT Mumbai.
Customs Duty demand relating to the period 2016 - 2017 amounting to INR 916.00 million pending before Bombay high court.
(v) In respect of Sales Tax matter:
Sales Tax demand for the period 2010-11 amounting to INR 984.90 million pending before Joint Commissioner of Sales Tax Appeals.
Sales Tax demand for the period 2012-13 amounting to INR 459.75 million for which company is in the process of preferring an appeal with Appellate Authority.
As at 31st March 2016:
(i) In respect of civil suits against the company - Rs 95.50 million
(ii) In respect of Income Tax matters :
Income Tax demand relating to the period 2002 â 2006 amounting to INR 556.40 million pending before High Court of Madras;
Income Tax demand relating to the period 2006 â 2008 amounting to INR 396.17 million pending before Income Tax Appellate
Tribunal; Income Tax demand relating to the period 2008â2009 amounting to INR 418. 38 million pending before the Commissioner of Income Tax (Appeals); and the Income Tax demand relating to the period 2009 â 2010 amounting to INR 812 million pending before Income Tax Appellate Tribunal.
Income tax demand relating to the period 2010-2011 amounting to INR 1907.90 Million pending before Income Tax Appellate Tribunal.
(iii) In respect of Service Tax matters:
Service Tax demand relating to the year 2007 amounting to INR 17.36 million pending before Supreme Court.
Service Tax demand relating to the year 2011 amounting to INR 78.72 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the year 2010 amounting to INR 16.32 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2011 â 2012 amounting to INR 18.94 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2012 â 2014 amounting to INR 236.49 million pending before the CESTAT ,Chennai.
Service Tax demand relating to the period 2008 â 2010 amounting to INR 605.75 million pending before the CESTAT ,Mumbai.
(iv) In respect of Customs duty matter:
Customs Duty demand relating to the period 2003 - 2004 amounting to INR 279.13 million pending before Supreme Court.
10. (i) Loans and advances in the nature of loans given to subsidiaries (disclosures pursuant to Regulation 34(3) and 53(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure requirements ) Regulations,2015
* The loanee company ceased to be subsidiaries effective from 26th December 2016 on account of sale of equity shares held in the company thereby losing controlling interest.
(ii) Investment by the Loanee in the shares of the Company
The loanees have not made any investments in the shares of the Company
11. Due to micro and small enterprises
The company has no demand to suppliers registered under the Micro, Small and Medium Enterprises Development Act,2006 (31st March 2016:Nil)
12. Details of loan given, Investments made and guarantees given covered u/s 186(4) of the Companies Act, 2013
(i) Loans given to related parties and investments made in them are disclosed under the respective heads in the financial statements.
(ii) Corporate guarantees given by the Company in respect of the bank loans availed by the wholly owned foreign subsidiary and its step down subsidiaries as at 31st March 2017: Rs. 614.41 million (31st March 2016:Rs. 642.63 million)
13. Details of Specified Bank Notes held and transacted during the period from 8th November, 2016 to 30th December, 2016:
14. Previous year figures
The Company has reclassified previous year figures to conform to this yearâs classification.
Mar 31, 2016
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.
c. During the year ended 31st March 2016, the amount of per share dividend recognized as distributions to equity shareholders is Nil (31st March 2015: Rs.3.60).
d. Terms of Non-convertible Cumulative Redeemable Preference shares issued by Parent company The terms and conditions of the Non-Convertible Cumulative redeemable preference shares are as under:
- 55 million 10% non-convertible cumulative redeemable preference shares were due for redemption on 29-12-2014 (Not redeemed and Dividend not recommended).
- 40 million 10 % non-convertible cumulative redeemable preference shares were due for redemption on 28-02-2015 (Not redeemed and Dividend not recommended).
- 61million 10 % non-convertible cumulative redeemable preference shares were due for redemption on 30-03-2015 (Not redeemed and Dividend not recommended).
- 45 million 10% non- convertible cumulative redeemable preference shares were due for redemption redeemed at par on 16-06-2015(Not redeemed and Dividend not recommended).
- 60 million 10% non-convertible cumulative redeemable preference shares will be redeemed at par on 16-06-2016
- 20 million 10 % non-convertible cumulative redeemable preference shares will be redeemed at par on 03-08-2016
c. During the year ended 31st March 2016, the amount of per share dividend recognized as distributions to preference shareholders is Nil (31st March 2015: Re 1).
d. The parent 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 2015:1.84 million equity shares of Rs.2 each ) out of which 0.16 million equity shares of Rs.2 each have been already allotted up to the balance sheet date under the scheme and included under the paid up capital (31st March 2015: 0.16 million equity shares of Rs.2 each) (Refer note 28 for details)
e. During the previous year 2014-15, the Parent Company has allotted 10.78 million equity shares of Rs.2/- each to eligible Qualified Institutional Buyers at a price of Rs.695.60 per equity share including premium of Rs.693.50 per share aggregating to Rs.750.00 million in accordance with the applicable provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009 and Companies Act, 2013.
f. During the previous year 2014-15, the Parent Company has allotted 0.06 million and 0.004 million equity shares of Rs.2/- each on exercise of stock options by employees/whole-time directors/independent director at a price of Rs.649.75 per equity share (including premium of Rs.647.75 per equity share) and Rs.416.55 per equity share (including premium of Rs.414.55 per equity share respectively aggregating to Rs 41.43 million (Refer note 28 for details)
g. During the year 2015-16, the Parent Company has allotted 0.61 million equity shares of Rs.2/- each fully paid to Promoter/Promoter group at a price of Rs.391/- per equity share (including premium of Rs.389/- per equity
* Relates to the Equity Shares issued to Qualified Institutional Buyers ,promoter/promoter group against conversion of share warrants and employees under stock option scheme(2014-2015)
* Relates to the Equity Shares issued to promoter/promoter group against conversion of share warrants (2015-2016)
1. Money received against Share Warrants:
During 2013-14, the Parent Company had allotted 4.00 million share warrants on a preference basis to the Promoter/ Promoter Group entitling them to apply for and obtain allotment of one equity share of Rs 2/- each fully paid at a price of Rs 391/- per share against each such share warrant at any time after the date of allotment but on or before the expiry of 18 months from the date of allotment in one or more tranches. The Parent Company has received Rs.391 million being 25% of the total value of share warrants issued. During the year 2014-15, The Parent Company received Rs.994.12 million against share warrants issued. The Parent Company issued 3.39 million equity shares of Rs.2 /- each to the Promoter/Promoter group aggregating to Rs. 1325.49 million during the year. As at 31st March, 2015, 0.61 million share warrants are pending conversion into equity shares against which The Parent Company has received Rs. 59.63 million being 25% of the outstanding 0.61 million share warrants.
1. The rupee term loans from banks include the following:
Indian Rupee Loan of Rs. 199.99 million (31st March 2015 - Rs.283.19 million) from a bank carries interest @ 15.00 % p.a. (31st March 2015 - 15.00 % p.a.). The loan is repayable in 19 unequal quarterly installments along with interest from 30th June 2013. The loan is secured by First charge on the specific offshore drill rig owned by foreign subsidiaries. Amount overdue as on the balance sheet date on account of interest and principal is Rs.2.40 million and Rs 25.00 million for a period of 1 day. Amount since paid is Rs.20.00 million.
2. Rupee term loan from a financial institution:
Rupee term loan from a Financial institution of Rs. Nil (31st March 2015 - Rs.225.00 million) carries interest @ Nil (31st March 2015 -13.00% p.a.). The loan is repayable in 11 quarterly installments of Rs.50 million each along with interest from June 2013. The loan was secured by paripassu first charge on drill ship and drilling rig. The loan has been repaid in full during the year.
3. The Foreign currency term loans from banks include the following:
i. Foreign currency term loan of Rs.3868.95 million [USD 58.40 million] (31st March 2015- 4,344.67 million [USD 69.52 million]) from a bank carries interest @ 6 Months LIBOR 6% p.a. (31st March 2015 -6 Months LIBOR 6% p.a.).The Loan is repayable in 32 quarterly installments of USD 2.78 million each along with interest from 30th April 2013. The loan is secured by second charge on the specific offshore drill rigs, Floating Production Unit and Second charge on drilling rig owned by foreign subsidiaries. Amount overdue on account of interest and principal as on balance sheet date is Rs.65.12 million and Rs.184.24 million for a period of 2 months. Amount since paid is Rs. 206.91 million.
ii. Foreign currency term loan of Rs.1,599.90 million [USD 24.15 million] (31st March 2015 - Rs. 1,776.46 million [USD 28.43 million]) from a bank carries interest @ 6 Months LIBOR 7.00% p.a. (31st March 2015 - 6 Months LIBOR 7.00% p.a.).The Loan is repayable in 96 monthly installments of USD 0.36 Million each along with interest from 30th September 2013. The loan is secured by first charge on the specific offshore drill rig owned by foreign subsidiaries. Amount overdue as on the balance sheet date on account of interest and principal is Rs.32.60 million and Rs. 70.74 million for a period of 2 months.
iii. Foreign currency term loan of Rs.642.63 million [USD 9.70 million] (31st March 2015: Rs.615.57 million [USD 9.85 million) is secured by a standby letter of credit issued by a bank, which is secured by a first pari-passu charge on a drill ship and a rig owned by the Parent Company. The borrowings mature on 30th June 2022 and have an interest rate of 6.00% p.a.-6.50% p.a.(31st March 2015: 6.00% p.a.-
6.50% p.a.). Amount overdue as on the balance sheet date on account of principal and interest is Rs. 14.90 million and Rs.39.82 million respectively for a period of 5-93 days.
iv. Foreign currency term loan of Rs. Nil [USD Nil] (31st March 2015: Rs.910.11 million [USD14.56 million]) is secured by a standby letter of credit issued by a bank, which is secured by a first pari-passu charge on a drill ship owned by the Parent Company, a first pari-passu charge on a rig owned by the Parent Company. The borrowings had an interest rate of 6.25-6.75% p.a.(31st March 2015: 6.25% p.a.-
6.75% p.a.). This loan carried a moratorium in respect of repayment of principal for a period of 15 months ending 31st December 2014. The loan has been paid in full during the year 2015-16.
v. Foreign currency term loan aggregating to Rs.124,647.00 million [USD1,881.46 million] (31st March 2015 :Rs. 115,460.97 million [USD 1,847.52 million] are secured by stand- by letters of credit issued by banks. These stand-by letters of credit are secured by a first / second priority mortgages over the rigs / drill ships owned by the company / foreign subsidiaries, a first charge on the receivables of the rigs owned by the foreign subsidiaries and pledge of shares of the foreign subsidiaries. The borrowings mature between on 31st March 2028 and have an interest rate of 5.00% p.a.-6.00% p.a. (31st March 2015: 5.00% p.a.-6.00 % p.a.) . These loans carry a moratorium in respect of repayment of principal ranging up to a period of 35 months ending 30th June 2016. An amount of Rs 16,251.125 million [USD 245.30 million] (31st March 2015-Rs 15,330.00 million (USD 245.30 million of the stand-by letters of credit is guaranteed by a Managing Director of the Parent Company. Amount overdue as on the balance sheet date on account of principal and interest is Rs.13.25 million [USD 0.200 million] and Rs 3,457.06 million [USD 52.182 million] for a period of 3 months and 0-13 months respectively. Amount since paid Rs 2385.00 million.
vi. Foreign currency term loan of Rs. 838.59 million [USD 12.658 million] (31st March 2015: Rs. 791.08 million [USD 12.66 million]) is secured by a first priority mortgage on a drill ship and first 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 1st February 2019 and have an interest rate of 6.00% p.a-.6.50% p.a. (31st March 2015: 6.00% p.a.-6.50% p.a.).Amount overdue at the balance sheet date on account of interest is Rs.37.365 million for a period of 30- 243 days. Amount since paid is Rs 37.365 million.
vii. Foreign currency term loan of Rs.4,446.50 million [USD 67.117 million] (31st March 2015: Rs.4,696.23 million [USD75.15 million]) is secured by a pari-passu pledge over 100% of the shares in a step down subsidiary of the wholly owned foreign subsidiary of the company, 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 3rd January 2019 and have an interest rate of 6.00% p.a.-6.50% p.a. (31st March 2015: 6.00% p.a.-6.50% p.a.). Amount overdue at the balance sheet date on account of interest is Rs.197.425 million for a period of 30 - 243 days that has since been paid.
viii. Foreign currency term loan of Rs.3,180.60 million [USD 48.009 million] (31st March 2015: Rs.3,000.29 million [USD 48.01 million]) is secured a first priority mortgage over a rig of a step-down subsidiary of the wholly-owned foreign subsidiary, a first 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 Aban Singapore Pte Ltd. The borrowings mature on 24th March 2019 and have an interest rate of 6.00% p.a.-6.50% p.a. (31st March 2015: 6.00% p.a-6.50% p.a.). Amount overdue at the balance sheet date on account of interest is Rs.198.22 million for a period of 7-373 days. Amount since paid Rs 79.17 million.
4. Bonds
Bond of Rs.3767.97 million [USD 56.875 million] (31st March 2015: Rs.5,468.31 million [USD87.50 million]) is secured by a first 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 Bond matures on 21st December 2017 and have an interest rate 15.00% p.a. (31st March 2015: 12.00% p.a.)
5. Term loan facility of Rs.150.00 million (31st March 2015-Rs. 350.00 million) from a NBFC carries interest @14.50% p.a. (31st March 2015-14.50% p.a.). The loan is repayable in 30 equated monthly installments from 5th July 2014 and is secured by mortgage of land and pledge of shares owned by a promoter group company and by second charge of current assets of the Company.
6. Term Loan facility of Rs.212.45 million (31st March 2015-Rs.250.00 million) from a NBFC carries interest @ 13.50% p.a. (31st March 2015: 13.50% p.a.). The loan is repayable in 60 equated monthly installments from 5th April 2015 and is secured by a charge on properties owned by Promoter/Promoter Group Company.
7. Short term facility of Rs.80.00 million (31st March 2015-Rs.100 million) from a NBFC carries interest @12.00 % p.a. (31st March 201512.00% p.a.). The loan is repayable in full on 2nd February 2018 and is secured by shares of the Company held by a promoter group company.
8. Hire purchase loans for Vehicles amount to Rs 3.74 million (31st March 2015:Rs.5.95 million) availed from a NBFC carries interest @ 9.72% p.a. (31st March 2015: 9.72% p.a.) and is secured by hypothecation of Vehicles.
*Since diluted earnings per share shows higher value as compared to basic earnings when taking the options/warrants into account, the options/warrants are anti-dilutive as at the year ended 31.03.2016 and are ignored in the calculation of diluted earnings per share as required under the Accounting Standard.
9. 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 specified period subject to fulfillment 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 (SEBl) 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 defined 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 41.30 million (31st March 2015: Rs. 41.30 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 2015: 1.84 Million equity shares of Rs.2 each)-Options lapsed during the year 0.028 million equity shares of Rs.2 each (up to 31st March 2015: 0.259 million equity shares of Rs.2 each)-Options exercised during the year- Nil (up to 31st March 2015: 0.160 million equity shares of Rs.2 each)-Options outstanding at the end of year :1.396 million equity shares of Rs.2 each (up to 31st March 2015: 1.424 million equity shares of Rs.2 each)-Options yet to be granted under the scheme: 0.288 million (31st March 2015: 0.26 million equity shares of Rs.2 each).
10. 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 and with effect from 27th June 2006 for some of its subsidiaries 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.
11. Leases
Operating lease: Company as lessee
The wholly owned foreign subsidiary leases, office 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.
12. Segment information
A. Primary Segment-The Group''s primary segments are offshore oil drilling and production services and wind power generation (Wind energy). The said business segments have been identified considering the nature of services rendered and the internal financial 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 Group are offshore rigs, relating to the drilling and production services that are operating in India and Rest of Asia. The assets relating to the wind energy are operating in India only.
Mar 31, 2015
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 two 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 financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP) under the historical cost convention on accrual basis.
Indian GAAP comprises Accounting Standards notified by the Central
Government of India under section 133 of the Companies Act, 2013, read
together with Rule 7 of the Companies (Accounts) Rules, 2014 and other
pronouncements of the Institute of Chartered Accountants of India.
All the assets and liabilities have been classified as current and
non-current as per the Company's normal operating cycle and other
criteria set out in Schedule III to the Companies Act, 2013. 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
classification of assets and liabilities.
3. Share Capital
a. 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.
b. During the year ended 3151 March 2015, the amount of per share
dividend recognized as distributions to equity shareholders is Rs.3.60
(31st March 2014: Rs.3.60).
c. Terms of Non-convertible Cumulative redeemable preference shares
The terms and conditions of the Non-Convertible Cumulative redeemable
preference shares are as under:
* 55 million 10% non-convertible cumulative redeemable preference
shares due for redemption at par on 29-12-2014 (Not redeemed). Dividend
provided upto the due date for redemption.
* 40 million 10 % non-convertible cumulative redeemable preference
shares due for redemption at par on 28-02-2015 (Not redeemed). Dividend
provided upto the due date for redemption.
* 61million 10 % non-convertible cumulative redeemable preference
shares due for redemption at par on 30-03-2015 (Not redeemed). Dividend
provided upto the due date for redemption.
* 45 million 10% non- convertible cumulative redeemable preference
shares will be redeemed at par on 16-06-2015
* 60 million 10% non-convertible cumulative redeemable preference
shares will be redeemed at par on 16-06-2016
* 20 million 10 % non-convertible cumulative redeemable preference
shares will be redeemed at par on 03-08-2016
d. During the year ended 31st March 2015, the amount of per share
dividend recognized as distributions to preference shareholders is Re 1
(31st March 2014: Re 1).
e. 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 2014:1.84 million equity shares of Rs.2 each) out of which
0.16 million equity shares of Rs.2 each have been already allotted up
to the balance sheet date under the scheme and included under the paid
up capital (31st March 2014: 0.095 million equity shares of Rs.2 each)
(Refer note 26 for details)
f. During the year 2014-15, the Company has allotted 10.78 million
equity shares of Rs.2/- each to eligible Qualified Institutional Buyers
at a price of Rs.695.60 per equity share including premium of Rs.693.50
per share aggregating to Rs.750.00 million in accordance with the
applicable provisions of SEBI (Issue of Capital and Disclosure
Requirements) Regulations 2009 and Companies Act, 2013.
g. During the year 2014-15, the Company has allotted 0.06 million and
0.004 million equity shares of Rs.2/- each on exercise of stock options
by employees/whole-time directors/independent director at a price of
Rs.649.75 per equity share (including premium of Rs.647.75 per equity
share) and Rs.416.55 per equity share (including premium of Rs.414.55
per equity share respectively aggregating to Rs. 41.43 million (Refer
note 26 for details)
h. During the year 2014-15, the Company has allotted 3.39 million
equity shares of Rs.2/- each fully paid to Promoter/Promoter group at a
price of Rs.391/- per equity share (including premium of Rs.389/- per
equity share) aggregating to Rs. 1325.49 million against conversion of
share warrants allotted to them on a preferential basis
4. Money received against Share Warrants:
During 2013-14, the Company had allotted 4.00 million share warrants on
a preference basis to the Promoter/ Promoter Group entitling them to
apply for and obtain allotment of one equity share of Rs 2/- each fully
paid at a price of Rs 391/- per share against each such share warrant
at any time after the date of allotment but on or before the expiry of
18 months from the date of allotment in one or more tranches. The
Company has received Rs.391 million being 25% of the total value of
share warrants issued. During the year 2014-15, the Company received
Rs.994.12 million against share warrants issued. The Company issued
3.39 million equity shares of Rs. 2/- each to the Promoter/Promoter
group aggregating to Rs. 1325.49 million during the year. As at 31st
March, 2015, 0.61 million share warrants are pending conversion into
equity shares against which the Company has received Rs. 59.63 million
being 25% of the outstanding 0.61 million share warrants.
5. Long term borrowings
a. Foreign currency term loan of Rs.4,344.67 million [USD 69.52
million] (31st March 2014 - Rs.4,829.58 million [USD 80.65 million])
from a bank carries interest@ 6 Months LIBOR 6% p.a. (31st March 2014
-6 Months LIBOR 6%p.a.).The Loan is repayable in 32 quarterly
installments of USD 2.78 million each along with interest from 30th
April 2013. The loan is secured by second charge on the specific
offshore drill rigs, Floating Production Unit and Second charge on
drilling rig owned by foreign subsidiaries. Amount overdue on account
of interest and principal as on balance sheet date is Rs.21.03 million
and Rs.173.24 million respectively for a period of 1 month and 2
months. Amount since paid is Rs.168.73 million.
b. Foreign currency term loan of Rs.1,776.46 million [USD 28.43
million] (31st March 2014 - Rs.1,915.24 million [USD 31.99 million])
from a bank carries interest@ 6 Months LIBOR 7.00% p.a. (31st
March2014- 6 Months LIBOR 7.25% p.a.).The Loan is repayable in 96
monthly installments of USD 0.36 Million each along with interest from
30th September 2013. The loan is secured by first charge on the
specific offshore drill rig owned by foreign subsidiaries. Amount
overdue as on the balance sheet date on account of interest and
principal is Rs.11.25 million and Rs. 66.74 million for a period of 1
month and 2 months respectively.
2. The rupee term loans from banks include the following:
a. Indian Rupee Loan of Rs. 283.19 million (31st March 2014 - Rs.362.40
million) from a bank carries interest@ 15% p.a. (31st March 2014- 15%
p.a.). The loan is repayable in 19 unequal quarterly installments along
with interest from 30th June 2013. The loan is secured by First charge
on the specific offshore drill rig owned by foreign subsidiaries.
Amount overdue as on the balance sheet date on account of principal is
Rs.20.80 million for a period of 1 day. Amount since paid is Rs.7.18
million.
3. Rupee term loan from a Financial institution:
Rupee term loan from a Financial institution of Rs.225.00 million (31st
March 2014 - Rs.450.00 million) carries interest @ 13.00% p.a. (31st
March 2014- 13.00% p.a.). The loan is repayable in 11 quarterly
installments of Rs.50 million each along with interest from June 2013.
The loan is secured by paripassu first charge on drill ship and
drilling rig. Amount overdue as on the balance sheet date on account of
principal is Rs.75.00 million for a period 23 to 113 days. Amount since
paid is Rs 25 Million.
4. Term loan facility of Rs.350.00 million (31st March 2014-Nil) from
NBFC carries interest @14.50% p.a. (31st March 2014-Nil). The loan is
repayable in 30 equated monthly installments from 5th July 2014 and is
secured by mortgage of land and pledge of shares owned by a promoter
group company and by second charge of current assets ofthe Company.
5. Term Loan facility of Rs.250.00 million (31st March 2014-Nil) from
a NBFC carries interest@ 13.50% p.a. (31st March 2014: Nil). The loan
is repayable in 60 equated monthly installments from 5th April 2015 and
is secured by a charge on properties owned by Promoter/Promoter Group
Company.
6. Short term facility of Rs.100.00 million (31st March 2014-Nil) from
a NBFC carries interest @12.00 % p.a. (31st March 2014-Nil). The loan
is repayable in full on 2nd February 2018 and is secured by shares of
the Company held by a promoter group company.
7. Hire purchase loans for Vehicles amount to Rs 5.95 million (31st
March 2014: Nil) availed from a NBFC carries interest @ 9.72% p.a.
(31st March 2014: Nil) and is secured by hypothecation of Vehicles.
8. Unsecured loan from a company amounting to Rs.Nil (31st March 2014:
Rs.79.00 million) carries interest Nil (31st March 2014: 16.50% p.a.).
6. Short term borrowings
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 @14.75% p.a. to 16.75% p.a.
2. Short term borrowings (secured) from banks represent buyer's credit
availed against letters of credit / packing 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% p.a. to 5.35% p.a.
3. Short term borrowings (unsecured) represent overdrawn bank balances
from banks that are repayable on demand.
4. Unsecured loan from a company amounting to Rs.145.00 million (31st
March 2014: Nil) carries interest at 16.75% p.a. (31st March 2014:
Nil). The loan is repayable over 12 months.
5. Unsecured loan from a Director of Company amounting to Rs.180.00
million (31st March 2014: Nil) carries interest @ 16.75% p.a. (31st
March 2014: Nil). The loan is repayable over 12 months.
7. Depreciation and amortization expense
*Pursuant to Companies Act, 2013 ("the Act") becoming effective 1st
April 2014, the Company has provided depreciation based on the useful
life of the assets as prescribed In Schedule II of the Act. This has
resulted In additional depreciation and amortization expense of Rs.
296.39 million for the year ended 31st March 2015.
8. Gratuity and other defined benefit plans
The company operates a gratuity benefit 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 benefit expense
recognized in the statement of profit and loss, the funded status and
the amounts recognized in the balance sheet for such plans.
9. Employee Stock Option Scheme
The 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 specified period subject to fulfillment 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 defined 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 41.30 million (31st March 2014: Rs. Nil)
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 ofRs.2 each. Options granted during the year-Nil
(up to 31st March 2014: 1.84 Million equity shares of Rs.2
each)-Options lapsed during the year 0.009 million equity shares of
Rs.2 each (up to 31st March 2014: 0.250 million equity shares of Rs.2
each)-Options exercised during the year- 0.065 million shares equity
shares of Rs2 each (up to 31st March 2014: 0.095 million equity shares
ofRs.2 each)-Options outstanding at the end of year :1.424 million
equity shares of Rs.2 each (up to 31st March 2014: 1.432 million equity
shares of Rs.2 each)-Options yet to be granted under the scheme:0.26
million (31st March 2014:0.251 million equity shares of Rs.2 each)
9. 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 identified considering
the nature of services rendered and the internal financial 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, relating to the drilling and production services that are
operating in India and Rest of Asia. The assets relating to the wind
power generation are operating in India only.
10. Related party disclosures
Names of related parties and related party relationship Related parties
where control exists
A. Subsidiary companies
Aban Energies Limited, India-Wholly owned subsidiary, India
Aban Holdings Pte Limited, Singapore-Wholly owned subsidiary, Singapore
Radhapuram Wintech Private Limited-Subsidiary, India
Aban Green Power Private Limited-Subsidiary, India
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
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
Aban Labuan Pvt. Ltd, Labuan, Malaysia
C. Associate Company of Foreign subsidiary
Belati Oilfield SdnBhd, Malaysia
D. Related parties with whom transactions have taken place during the
year
a. Key Management personnel
(i) Mr. Reji Abraham - Managing Director
(ii) Mr. P.Venkateswaran - Deputy Managing Director
(iii) Mr.C.P.Gopalkrishnan - Deputy Managing Director &
Chief Financial Officer
b. Relative of Key Management personnel - Ms. Deepa Reji Abraham
11. Contingent liabilities
As at As at
31st March 2015 31st March 2014
Rs. millions Rs. millions
(a) Guarantees given by
banks on behalf of the
company 1,796.59 1,893.91
(b) Corporate guarantees
given by the company to
banks on behalf of
subsidiaries of 1,525.75 20,696.93
company's wholly owned
foreign subsidiary
(c) Claims against the company not acknowledged as debt:
(i) In respect of civil suits against the company- Rs 95.50 million
(ii) In respect of Income Tax matters:
Income Tax dues relating to the period 2002 - 2006 amounting to INR
556.40 million pending before High Court of Madras; Income Tax dues
relating to the period 2006 - 2008 amounting to INR 396.17 million
pending before Income Tax Appellate Tribunal; Income Tax dues relating
to the period 2008-2009 amounting to INR 418. 38 million pending before
the Commissioner of Income Tax (Appeals); and the Income Tax dues
relating to the period 2009-2010 amounting to INR 812 million pending
before Income Tax Appellate Tribunal.
(iii) In respect of Service Tax matters:
Service Tax dues relating to the period 2006- 2007 amounting to INR
17.36 million pending before Supreme Court.
(iv) In respect of Customs duty matter:
Customs Duty dues relating to the period 2003 - 2004 amounting to INR
279.13 million pending before Supreme Court.
The management does not reasonably expect that the aforesaid legal and
tax matters when ultimately concluded and determined will have a
material and adverse effect on the Company 's results of operation or
financial condition.
12. 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 2014: Nil)
13. The Board of Directors of the Company is of the opinion that, all
assets other than fixed assets and non-current Investments have value
on realization in the ordinary course of business at least equal to the
amount at which they are stated in the financial statement.
14. Details of Loans given, Investments made and guarantees given
covered u/s 186(4) of the companies Act, 2013
(i) Loans given to related parties and Investments made in them are
disclosed under the respective heads in the Financial statements.
(ii) Corporate Guarantees given by the Company in respect of the bank
loans availed by the wholly owned foreign subsidiary and its step down
subsidiaries as at 31st March 2015: Rs 1,525.75 million (31st March
2014: Rs 20,696.93 million).Security provided for loan are also
disclosed under respective head in the Financial Statements.
15. Previous year figures
The Company has reclassified previous year figures to comform to this
year's classification.
Mar 31, 2014
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 fnancial statements of the Company have been prepared in accordance
with generally accepted accounting principles in India (Indian GAAP).
The company has prepared these fnancial statements to comply in all
material respects with the Accounting Standards notifed under the
Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act,1956. The fnancial statements
have been prepared on an accrual basis and under the historical cost
convention.
All the assets and liabilities have been classifed as current and
non-current as per the Company''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 Company has ascertained
its operating cycle as 12 months for the purpose of current and non-
current classification of assets and liabilities.
The accounting policies adopted in the preparation of financial
statements are consistent with those of the previous year.
3. Gratuity and other Defined benefit plans
The company operates a gratuity benefit 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 benefit expense
recognized in the statement of Profit and loss, the funded status and
the amounts recognized in the balance sheet for such plans.
4. Employee Stock Option Scheme
The 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 specified period subject to fulfllment 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 Defined 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 2013: Rs.Nil)
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-1.40 million (up to 31st March 2013: 0.443 Million equity shares
of Rs.2 each)-Options lapsed during the year 0.082 million shares
equity shares of Rs2 each (up to 31st March 2013: 0.169 million equity
shares of Rs.2 each)-Options exercised during the year- Nil (up to 31st
March 2013: 0.095 million equity shares of Rs.2 each)-Options
outstanding at the end of year :1.498 million equity shares of Rs.2
each (up to 31st March 2013: 0.179 million equity shares of Rs.2
each)-Options yet to be granted under the scheme: 0.251 million equity
shares of Rs.2 each (31st March 2013: 1.57 million equity shares of
Rs.2 each)
5. 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 identified considering the
nature of services rendered and the internal fnancial 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, relating to the drilling and production services that are
operating in India and Rest of Asia. The assets relating to the wind
power generation are operating in India only.
6. Related party disclosures
Names of related parties and related party relationship Related parties
where control exists
A. Subsidiary companies
Aban Energies Limited, India-Wholly owned subsidiary
Aban Holdings Pte Limited, Singapore-Wholly owned subsidiary
Radhapuram Wintech Private Limited- India Subsidiary
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
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
Aban Labuan Pvt. Ltd, Labuan, Malaysia
C. Associate Company
Belati Oilfeld SdnBhd, Malaysia
D. Related parties with whom transactions have taken place during the
year
a. Key Management personnel
(i) Mr. Reji Abraham - Managing Director
(ii) Mr. P.Venkateswaran - Deputy Managing Director
(iii) Mr.C.P.Gopalkrishnan - Deputy Managing Director, Chief Financial
officer and Secretary
7. Contingent liabilities
As at As at
31st March 2014 31st March 2013
Rs. millions Rs. millions
(a) Guarantees given by banks
on behalf of the company 1,893.91 957.15
(b) Corporate guarantees given
by the company to banks on behalf of
subsidiaries of company''s wholly
owned foreign subsidiary 20,696.93 25,706.03
(c) Claims against the company not acknowledged as debt :
- Following demands are disputed by the company and not provided for
(i) Demand raised by the Deputy Commissioner of Income Tax, Chennai in
respect of fnancial year 2007-2008 for Rs 339.13 Million.
Commissioner of Income Tax (Appeals) has ruled the appeal in favour of
the Company against which Income Tax Department has preferred an appeal
before Income Tax Appellate Tribunal, Chennai. Matter is pending before
Income Tax Appellate Tribunal, Chennai (ii) Demand raised by the Deputy
Commissioner of Income Tax, Chennai in respect of fnancial year
2008-2009 for Rs 418.38 Million.
The Company has preferred an appeal against this demand that is pending
before the Commissioner of Income Tax (Appeals), Chennai.
8. 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 2013: Nil)
9. Previous year figures
The Company has reclassified previous year figures to conform to this
year''s classification.
Mar 31, 2013
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 financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The company has prepared these financial statements to
comply in all material respects with the Accounting Standards notified
under the Companies (Accounting Standards) Rules, 2006 (as amended) and
the relevant provisions of the Companies Act,1956. The financial
statements have been prepared on an accrual basis and under the
historical cost convention.
All the assets and liabilities have been classified as current and
non-current as per the Company''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 Company has ascertained
its operating cycle as 12 months for the purpose of current and non-
current classification of assets and liabilities.
The accounting policies adopted in the preparation of financial
statements are consistent with those of the previous year.
3. The Foreign currency term loans from banks include the following:
a. Foreign currency term loan of Rs.4,830.58 million [USD 88.99
million] (31st March 2012 - Rs.4,859.61 million) from a bank carries
interest @ 6 Months LIBOR 6% p.a. (31st March 2012 -16.25% p.a.).
This loan which was originally a Rupee term loan was converted into
FCNR(B) loan during the year 2012-2013. The Loan is repayable in 32
quarterly installments of USD 2.7811 million each along with interest
from 30th June 2013. The loan is secured by second charge on the
specific offshore drill rigs, Floating Production Unit and Second
charge on drilling rig owned by foreign subsidiaries. Amount overdue on
account of interest as on balance sheet date is USD 1.456 million for a
period of 1 to 2 months. Amount since paid is USD 0.499 million.
b. Foreign currency term loan of Rs.1,852.06 million [USD 34.12
million] (31st March 2012 - Rs.1,849.31 million) from a bank carries
interest @ 6 Months LIBOR 7% p.a. (31st March2012 -15.00% p.a.). This
loan which was originally a Rupee term loan was converted into FCNR (B)
loan during the year 2012-2013. The Loan is repayable in 96 monthly
installments of USD 0.356 Million each along with interest from 30th
September 2013. The loan is secured by first charge on the specific
offshore drill rig owned by foreign subsidiaries. Amount overdue as on
the balance sheet date on account of interest on rupee term loan
liability is Rs.43.29 million and interest overdues on FCNR (B) loan
liability is USD 0.240 million for a period of 1 to 2 months. Amount
since paid is Rs.43.29 million and USD 0.021 million respectively.
4. The rupee term loans from banks include the following:
a. Indian Rupee Loan of Rs.63.00 million (31st March 2012 -Rs.63.00
million) from a bank carries interest @ 12.50% p.a. (31st March 2012-
13.00% p.a.). The loan is secured by paripassu first charge on the
specific offshore drilling rigs. Amount overdue on account of interest
as on balance sheet date is Rs.1.28 million for a period of 1 month.
Amount since paid is Rs.0.62 million.
b. Indian Rupee Loan of NIL outstanding (31st March 2012 -Rs.2554.20
million) from a bank that carried interest @ 14.00% p.a. (31st March
2012- 14.50% p.a.) The loan has been completely repaid before March
2013. The loan was secured by paripassu first charge on the specific
offshore drilling rigs. Amount overdue on account of interest as on
balance sheet date is Rs.46.28 million for a period of 1 to 2 months.
Amount since paid is Rs.15.96 million.
c. I ndian Rupee Loan of NIL outstanding (31st March 2012 -Rs.2761.73
million) from a bank that carried interest @ 13.00% p.a. (31st March
2012- 13.50% p.a.) The loan has been completely repaid before March
2013. The loan was secured by paripassu first charge on the specific
offshore drilling rigs. Amount overdue on account of interest as on
balance sheet date is Rs.7.82 million for a period of 1 day. Amount
since paid is Rs.7.82 million.
d. Indian Rupee Loan of Rs.2707.30 million (31st March 2012 -
Rs.2707.30 million) from a bank carries interest @ 13.50% p.a. (31st
March 2012 - 13.50% p.a.). The Loan is repayable in 96 equal Monthly
installments of Rs.28.20 million each along with interest from 30th
April 2013. The loan is secured by paripassu first charge on the
specific offshore drill ship and drilling rigs. Amount overdue on
account of interest as on balance sheet date is Rs.31.04 million for a
period of 1 day. Amount since paid is Rs.31.04 million.
e. Indian Rupee Loan of Rs.900.10 million (31st March 2012 - Rs.900.10
million) from a bank carries interest @ 13.00% p.a. (31st March 2012
-13.40% p.a.). The Loan is repayable in 32 equal quarterly installments
of Rs.28.125 Million each along with interest from 30th June 2013. The
loan is secured by paripassu first charge on the specific offshore
drill ship and drilling rigs. Amount overdue on account of interest as
on balance sheet date is Rs.30.51 million for a period of 1 to 3
months. Amount since paid is Rs.10.29 million.
f. Indian Rupee Loan of Rs.200.00 million (31st March 2012 - Rs. 200
million) from a bank carries interest @ 15.75 % pa (31st March 2012 -
16.00% pa). The Loan has been since repaid completely during April
2013. The loan is secured by paripassu first charge on the specific
offshore drilling rig and drill ship. Amount overdue on account of
interest as on balance sheet date is Rs.0.32 million for a period of 1
day.
g. Indian Rupee Loan of Rs.351.12 million (31st March 2012 - Rs.350.00
million) from a bank carries interest @ 15.75 % p.a. (31st March 2012 -
16.00% p.a.). The Loan has been since repaid completely during April
2013. The loan is secured by paripassu First charge on the specific
offshore drilling rig and drill ship. Amount overdue on account of
interest as on balance sheet date is Rs.0.57 million for a period of 1
day.
h. Indian Rupee Loan of Rs.424.62 million (31st March 2012 - Rs.474.91
million) from a bank carries interest @ 14.75 % p.a. (31st March 2012 -
14.75% p.a.). The loan is repayable in 19 unequal quarterly
installments along with interest from 30th June 2013. The loan is
secured by First charge on the specific offshore drill rig owned by
foreign subsidiaries. Amount overdue as on the balance sheet date on
account of principal and interest is Rs.15.60 million and Rs.5.32
million respectively for a period of 1 day. Amount since paid is
Rs.15.60 million and Rs.5.32 million in respect of principal and
interest respectively.
5. Rupee term loan from an institution:
Rupee term loan from an institution of Rs.700 million (31st March 2012
- Rs.819.74 million) carries interest @ 13.00% p.a. (31st March 2012 -
13.00% p.a.). The loan is repayable in 11 quarterly installments of
Rs.50 million each along with interest from June 2013. The loan is
secured by paripassu first charge on drill ship and drilling rig.
Amount overdue as on the balance sheet date on account of principal and
interest is Rs.150.00 million and Rs.60.88 million respectively for a
period of 1 to 7 months. Amount since paid is Rs.20 million and
Rs.60.88 million in respect of principal and interest respectively.
6. Hire purchase loan for vehicles availed from a non-banking finance
company of Rs.0.43 million (31st March 2012: Rs.4.32 million) secured
by hypothecation of vehicles.
7. The Company has an outstanding unsecured loan from a company
amounting to Rs.100.00 million (31st March 2012: Rs.1,050.20 million)
at 15.60% p.a. (31st March 2012 : 14.50% p.a.). The loan is repayable
in 12 monthly instalments along with interest.
8. Gratuity and other defined benefit plans
The company operates a gratuity benefit 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 benefit expense
recognized in the statement of profit and loss, the funded status and
the amounts recognized in the balance sheet for such plans
9. Employee Stock Option Scheme
The 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 specified period subject to fulfillment 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 defined 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 2012: Rs. Nil)
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 2012: 0.44 Million equity shares of Rs.2
each)-Options lapsed during the year 0.05 million shares equity shares
of Rs.2 each (up to 31st March 2012: 0.12 million equity shares of Rs.2
each)-Options exercised during the year- NIL (up to 31st March 2012:
0.095 million equity shares of Rs.2 each)-Options outstanding at the
end of year :0.18 million equity shares of Rs.2 each (up to 31st March
2012: 0.23 million equity shares of Rs.2 each)-Options yet to be
granted under the scheme: 1.57 million equity shares of Rs.2 each (31st
March 2012: 1.52 million equity shares of Rs.2 each)
10. 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 identified considering
the nature of services rendered and the internal financial 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, relating to the drilling and production services that are
operating in India and Rest of Asia. The assets relating to the wind
power generation are operating in India only.
11. Related party disclosures
Names of related parties and related party relationship Related parties
where control exists
A. Subsidiary companies
Aban Energies Limited, India-Wholly owned subsidiary Aban Holdings Pte
Limited, Singapore-Wholly owned subsidiary Radhapuram Wintech Private
Limited- India Subsidiary
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
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
Aban Labuan Pvt. Ltd, Labuan, Malaysia
C. Related parties with whom transactions have taken place during the
year
a. Key Management personnel
(i) Reji Abraham - Managing Director
(ii) Mr. P.Venkateswaran - Deputy Managing Director
(iii) Mr.C.P.Gopalkrishnan - Deputy Managing Director and Secretary
12. Contingent liabilities
As at As at
31st March 2013 31st March 2012
Rs. millions Rs. millions
Guarantees given by banks on behalf
of the company 957.15 510.65
Corporate guarantees given by the
company to banks on behalf of
subsidiaries of company''s wholly
owned foreign subsidiary 25,706.03 20,749.95
13. 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 2012: Nil)
14. Previous year figures
The Company has reclassified previous year figures to conform to this
year''s classification.
Mar 31, 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 financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The company has prepared these financial statements to
comply in all material respects with the Accounting Standards notified
under the Companies (Accounting Standards) Rules, 2006 (as amended) and
the relevant provisions of the Companies Act,1956. The financial
statements have been prepared on an accrual basis and under the
historical cost convention.
All the assets and liabilities have been classified as current and
non-current as per the Company'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 Company has ascertained
its operating cycle as 12 months for the purpose of current and non-
current classification of assets and liabilities.
The accounting policies adopted in the preparation of financial
statements are consistent with those of the previous year.
a. 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).
b. 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
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
- 61 Million 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
c. 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)
1. The rupee term loans from banks include the following:
a. 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 first charge on
the specific offshore drilling rigs.
b. 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 first charge on the specific offshore drilling
rigs.
c. 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 first charge on the specific 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.
d. 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 first charge on the specific 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.
e. 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 first charge on the specific 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.
f. 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 first 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.
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 first charge on the specific 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.
h. 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
first charge on the specific 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.
i. 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 specific 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.
j. 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 specific 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.
k. 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 specific 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.
1. 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 specific offshore drilling rig and drill ship.
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 specific 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 specific 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.
2. Rupee Term Loan from a Financial Institution
Rupee Term loan from a financial 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
first 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.
3. Hire purchase loan for vehicles availed from a non-banking finance
company of Rs.4.32 Million (31st March 2011:Rs.9.41 Million) secured by
hypothecation of vehicles.
4. 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.
5. 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.
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.
2. 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.
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.
b. 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)
3. Gratuity and other defined benefit plans
The company operates a gratuity benefit plan which is funded with an
insurance company in the form of a qualifying insur- ance policy. The
company operates a leave encashment plan which is not funded
The following table summarizes the components of net benefit expense
recognized in the statement of profit and loss and the funded status
and the amounts recognized in the balance sheet for such plans
The estimate of future salary increases, considered in actuarial
valuation takes into account inflation, 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
certified by the Actuary
4. Employee stock option scheme
The 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 specified period subject to fulfillment 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 defined 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 :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)
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
5. 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 identified considering
the nature of services rendered and the internal financial 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.
6. 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. Others related parties with whom the company had transactions a.
Key Management personnel
(i) Reji Abraham - Managing Director
(ii) Mr. P.Venkateswaran - Dy. Managing Director
(iii) Mr.C.P.Gopalkrishnan - Dy. Managing Director and Secretary
7. 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 510.65 1,008.94
Corporate guarantees given by the
company to banks on behalf of
subsidiaries of company's wholly
owned foreign subsidiary 20,749.95 20,232.27
8. 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)
9. Previous year figures
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 financial statements. During the year ended 31st
March 2012, the Revised Schedule VI notified under the Companies
Act,1956 has become applicable to the Company. The Company has
reclassified previous year figures to conform to this year's
classification.
Mar 31, 2011
As at As at
31st March, 2011 31st March,
Rupees 2010
Rupees
1. Contingent liabilities not provided for
a. Guarantees given by banks on behalf of
the Company 100,89,36,378 132,92,82,799
b. Corporate Guarantee given by the
Company to Banks on behalf of subsidiaries
of Company's foreign subsidiary: 2023,22,66,600 2166,78,53,600
c. Capital commitments not provided
for 6,32,39,655 8,18,32,091
d. Indemnity obligation relating to a
Novation Agreement - 75,00,000
e. Letter of Credit - 1,62,56,392
12. Related Party disclosure:
Enterprise where control exists
A. Subsidiary Companies (Wholly owned subsidiaries)
Aban Energies Limited, India Aban Holdings Pte Ltd, Singapore
B. Subsidiaries of Aban Holdings Pte Ltd
Aban Singapore Pte Ltd, Singapore Aban 7 Pte Ltd, Singapore Aban 8 Pte
Ltd, Singapore Aban Abraham Pte Ltd, Singpore Aban Pearl Pte
Ltd,Singapore Aban International Norway AS 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 Beta Drilling Pte
Ltd , Singapore Venture Drilling Pte. Ltd, Singapore
C. Other related parties with whom the company had transactions
a. Key Management personnel
(i) Mr. Reji Abraham - Managing Director
(ii) Mr. P Venkateswaran - Deputy Managing Director
(iii) Mr. C P Gopalkrishnan - Deputy Managing Director and Secretary
13. SEGMENT REPORTING
A. Primary Segment
The Company's primary segments are Offshore Oil Drilling and Production
services ('Drilling') and Wind Power generation ('Wind Energy') The
above business segments have been identified considering the nature of
services rendered and the internal financial 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 Rigs/Drillship, which are mobile
assets and can operate across the world, in view of which geographical
segment is not considered.
15. Loans and Advances include loan to a Deputy Managing Director of
the Company who was an officer at the time of taking the loan NIL
(Previous year Rs.3,75,000/-). Maximum amount outstanding during the
the year Rs. 3,75,000/- (Previous Year Rs.9,15,000/-).
17. The Company has instituted Employees Stock Option Scheme - 2005
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 specified period subject to fulfillment of
certain conditions. Upon vesting, employees are eligible to apply and
secure allotment of Company's share at the prevailing market price on
the date of grant of option.
The Securities Exchange Board of India (SEBI) issued the Employees
Stock Option Scheme and Employees Stock purchase scheme Guidelines in
1999, applicable to stock option schemes established 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
excercise price of the option is to be recognised and amortised on a
straight-line basis over the vesting period.
The Company has not recorded any Deferred Compensation Expenses, as the
exercise price was equal to the market value as defined 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 has been credited to securities premium account Rs.82,10,731/-
(Previous year Rs.74,32,967/-)
The details of option granted 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 Equity Shares of Rs.2/- each (upto Previous Year: 4,43,200
Equity Shares of Rs.2/- each) - Options lapsed during the year 16,320
Equity Shares of Rs.2/- each (Upto Previous Year: 23,890 Equity Shares
of Rs.2/- each) - Options exercised during the year: 13,740 Equity
Shares of Rs.2/- each (upto Previous Year: 81,390 Equity Shares of
Rs.2/- each) Outstanding at the end of the year: 3,07,860 Equity Shares
of Rs.2/- each (upto Previous Year: 3,37,920 Equity Shares of Rs.2/-
each), Options yet to be granted under the scheme: 14,41,010 Equity
Shares of Rs.2/- each (Previous year: 14,24,690/- Equity Shares of of
Rs.2/- each).
18. The Company had issued 1161 un secured unrated zero coupon Foreign
currency convertible bonds (FCCB) of Japanese Yen 10,000,000 each
aggregating to Japanese Yen 11,610,000,000 (Rs.428,49,22,220/-) in
April 2006. The Bondholder has an option to convert these bonds into
Equity shares of Rs.2/- each of the Company at a conversion price on or
after 19th April 2007 and upto the close of the business on the 8th
April 2011. The conversion price has been fixed as Rs.2,789.04 per
Equity shares of Rs.2/- each. Untill 31st March 2011, 620 Bonds
aggregating to Japanese Yen 6200 million have been converted into
8,51,055 Equity shares of Rs.2/- each at a conversion price of
Rs.2,789.04. After conversion, 541 Bonds are outstanding as at 31st
March, 2011 aggregating to 5410 Million Japanese Yen
(Rs.290,10,98,865). The Company has an option to redeem the bonds at
their accredited principal amount in whole and not in part at any time
on or after 14th April 2009 and on or prior to 8th April 2011 subject
to certain terms and conditions. No interest accrues or is payable on
the bonds unless willful default is made in respect of any payment in
which case the overdue sum shall bear interest at the rate of 4% per
annum from the due date. Unless previously redeemed, converted or
repurchased and cancelled, the Company will redeem each bond at
121.811% of its principal amount on 15th April 2011, being the Maturity
date of the Bond.
The Company has since redeemed the outstanding 541 Bonds on 15th April
2011 at 121.811% of the principal amount.
2. There are no Micro, Small and Medium Enterprises to whom the
Company owes dues, which are outstanding for more than 45 days at the
balance sheet date. The information regarding Micro, Small and Medium
Enterprises has been determined to the extent such parties have been
identified on the basis of data available with the Company.
3. Audit fees include Rs. NIL for special purpose Audit carried out
towards investments in shares/loans to foreign subsidiaries. (Previous
year Rs.8,00,000/-)
4. Previous year's figures are re-grouped/re-arranged wherever
necessary to conform to the current year's presentation.
Mar 31, 2010
1. SEGMENT REPORTING
A. Primary Segment
The Companys primary segments are Offshore Oil Drilling and Production
services (Drilling) and Wind Power generation (Wind Energy) The
above business segments have been identified considering the nature of
services rendered and the internal financial 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 Rigs/Drillship, which are mobile
assets and can operate across the world, in view of which geographical
segment is not considered.
2. Loans and Advances include loan to a Deputy Managing Director of
the Company who was an officer at the time of taking the loan
Rs.3,75,000/- (previous year Rs.9,15,000/-). Maximum amount outstanding
during the the year Rs. 9,15,000/- (Previous Year Rs.14,55,000/-).
3. The Company has instituted Employees Stock Option Scheme - 2005
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 specified period subject to fulfillment of
certain conditions. Upon vesting, employees are eligible to apply and
secure allotment of Companys share at the prevailing market price on
the date of grant of option.
The Securities Exchange Board of India (SEBI) issued the Employees
Stock Option Scheme and Employees Stock purchase scheme Guidelines in
1999, applicable to stock option schemes established 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
excercise price of the option is to be recognised and amortised on a
straight-line basis over the vesting period.
The Company has not recorded any Deferred Compensation Expenses, as the
exercise price was equal to the market value as defined 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 has been credited to securities premium account Rs.74,32,967/-
(Previous year Rs.30,98,805/-)
The details of option granted 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 - 1,75,000 Equity Shares of Rs.2/- each (upto previous year:
2,68,200 Equity Shares of Rs.2/- each) - Options lapsed during the year
16,800 Equity Shares of Rs.2/- each (Upto previous year: 7,090 Equity
Shares of Rs.2/- each) - Options exercised during the year: 16,740
Equity Shares of Rs.2/- each (Upto previous year: 64650 Equity Shares
of Rs.2/- each) Outstanding at the end of the year: 3,37,920 Equity
Shares of Rs.2/- each (upto previous year: 1,96,460 Equity Shares of
Rs.2/- each), Options yet to be granted under the scheme: 14,24,690
Equity Shares of Rs.2/- each (Previous year: 15,82,890/- Equity Shares
of of Rs.2/- each).
4. The Company had issued 1161 un secured unrated zero coupon Foreign
currency convertible bonds (FCCB) of Japanese Yen 10,000,000 each
aggregating to Japanese Yen 11,610,000,000 (Rs.428,49,22,220/-) in
April 2006. The Bondholder has an option to convert these bonds into
Equity shares of Rs.2/- each of the Company at a conversion price on or
after 19th April 2007 and upto the close of the business on the 8th
April 2011. The conversion price has been fixed as Rs.2,789.04 per
Equity shares of Rs.2/- each. Untill 31st March 2010, 620 Bonds
aggregating to Japanese Yen 6200 million have been converted into
8,51,055 Equity shares of Rs.2/- each at a conversion price of
Rs.2,789.04. After conversion, 541 Bonds are outstanding as at 31st
March, 2010 aggregating to 5410 Million Japanese Yen
(Rs.259,84,90,263). The Company has an option to redeem the bonds at
their accredited principal amount in whole and not in part at any time
on or after 14th April 2009 and on or prior to 8th April 2011 subject
to certain terms and conditions. No interest accrues or is payable on
the bonds unless willful default is made in respect of any payment in
which case the overdue sum shall bear interest at the rate of 4% per
annum from the due date. Unless previously redeemed, converted or
repurchased and cancelled, the Company will redeem each bond at
121.811% of its principal amount on 15th April 2011, being the Maturity
date of the Bond.
5. The Company has entered into foreign currency and interest rate
contracts for hedging currency and interest related risks. The
outstanding value of hedged forward covers / derivatives as at 31st
March 2010 are Rs.733.35 crores (previous year Rs. 1,151.49 crores) the
details of which are given below:
Note a. The Company has ceased to have joint control over Frontier
Offshore Exploration (India) Limited (Formerly known as Frontier Aban
Drilling (India) Ltd) However the Company has provided for Dimunition
in value of this long term investment considering the state of affairs
of the Venture Company.
Note b: The Company has completed the formalities for termination of
agreement with Prize Petroleum Ltd. Consequent to this, the company has
debited an amount of Rs.3.47 crores to the Profit and Loss account
under the head Loss on transfer of interest in Joint Venture
IX. Basis used to determine the expected rate of return on plan assets
The expected rate of return on plan assets is based on the current
investments strategy and market scenario. The above information is
certified by the Actuary.
6. There are no Micro, Small and Medium Enterprises to whom the
Company owes dues, which are outstanding for more than 45 days at the
balance sheet date. The information regarding Micro, Small and Medium
Enterprises has been determined to the extent such parties have been
identified on the basis of data available with the Company.
7. Audit fees include Rs. 8,00,000/- for special purpose Audit
carried out towards investments in shares/loans to foreign
subsidiaries. (Previous year Rs.8,82,400/-)
8. During the year , the company has allotted 56,97,135 equity shares
of Rs.2/- each at a share premium of Rs.1222.30 per share to the
Qualified Institutional Buyers based on the pricing formula as
prescribed under SEBI Guidelines.
9. Previous years figures are re-grouped/re-arranged wherever
necessary, to confirm to the current years presentation.
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