FORWARD-LOOKING STATEMENTS
The report contains forward-looking statements, identified by words like plans,
expects, will, anticipates, believes, intends, projects, estimates,
envisages/ envisaged and so on. All statements that address expectations or projections
about the future, but not limited to the Companys strategy for expenditures, and
financial results, are forward-looking statements. Since these are based on certain
assumptions and expectations of future events, the Company cannot guarantee that these are
accurate or will be realized. The Companys actual results, performance or achievements
could thus differ from any forward looking statements. The Company assumes no
responsibility to publicly amend, modify or revise any such statements on the basis of
subsequent developments, information or events.
INDUSTRY STRUCTURE AND DEVELOPEMENTS
The oil and gas sector is among the six core industries in India and plays a major role
in influencing decision making for all the other important sections of the economy.
Indias economic growth is closely related to energy demand; therefore the need for oil
and gas is projected to grow more, thereby making the sector quite conducive for
investment.
The Government of India has adopted several policies to fulfil the increasing demand.
The government has allowed 100 per cent Foreign Direct Investment (FDI) in many segments
of the sector, including natural gas, petroleum products, and refineries, among others.
Today, it attracts both domestic and foreign investment.
GLOBAL
With dramatically falling oil prices, reductions in headcount and uncertainty regarding
the industrys future, the global oil and gas industry is currently facing challenging
times. Due to a decline in global crude oil prices, imports declined by 7.4 per cent in
2016-17 in value (till January, 2017). The Current Account Deficit (CAD) of India narrowed
to 0.3 per cent of GDP during April-September 2016. The trend of negative export growth
reversed a bit with exports registering a growth of 0.7 per cent during 2016-17 (till
January, 2017).
Petroleum, Oil and Lubricants (POL) imports declined by 10.8 per cent in 2016-17 (till
January, 2017) whereas non-POL imports declined by 2 per cent.
In the near future, the recent oil price gains, which are due to a rebalancing of
supply and demand fundamentals, partly accelerated by OPECs recent decision to cut
production, are expected to remain in place. A great deal of the activity in the oil and
gas sector is focused on OPEC countries and the U.S., but other regions may also play a
key role in the coming years.
DOMESTIC
Indias oil demand is expected to grow at a CAGR of 3.6 per cent to 458 Million Tonnes
of Oil Equivalent (MTOE) by 2040, while demand for energy will be more than double by 2040
as economy will grow to more than five times its current size, as stated by The Ministry
of Petroleum and Natural Gas.
Also, the countrys gas production will likely touch 90 Billion Cubic Metres (BCM) by
2040, subject to adjustment to the current formula that determines the price paid to
domestic producers, while demand for natural gas will grow at a CAGR of 4.6 per cent to
touch 149 MTOE.
India is expected to be one of the largest contributors to non-OECD petroleum
consumption growth globally. Total oil imports declined by 10 per cent year-on-year in
February 2017. Fuel consumption in India increased by 10.7 per cent to a 16-year high of
196.48 million tonnes (MT) in 2016. India is the fourth-largest Liquefied Natural Gas
(LNG) importer after Japan, South Korea and China, and accounts for 5.8 per cent of the
total global trade. Domestic LNG demand is expected to grow at a CAGR of 16.89 per cent to
306.54 MMSCMD by 2021 from 64 MMSCMD in 2015.
RISKS AND CONCERNS
Price volatility and decreases in oil or natural gas prices leading to worsened
operating results and future prospects.The modelled risks w.r.t the Oil and Gas industry
are, Oil and Gas Price Movement, Regulatory and legislative changes and increased cost of
compliance, Inability to expand reserves or find replacement, Operational hazards
including blowouts, spills and personal injury, Natural disasters, General industry
competition whether globally or domestically etc.
Though the Company is not in operation mode and it had not commenced business
activities, the Risk Mechanism is limited to financial and regulatory compliances. The
Audit committee of the Company is entrusted with the responsibility to look after towards
the proper implementation of Risk Management Mechanism for mitigation of Risk so occurred
during the course of the business. Also, your Company has formulated the policies to
efficiently handle the Risk Management process, which are adequately taken care of.
FINANCIAL PERFORMANCE AND REVIEW
We have been reporting since so long, and in this report also, that the Company is
still standing in the same position as earlier, with non-inclusion of operational income
and profit and also due to non-availability of financial sources in due course of time,
the implementation of project could not take place.
At earlier stage, the funds raised through GDRs in the year 2007, were invested in the
pre-operative set-up expenses, when the company was supposed to process its implementation
schedule, SEBI started investigation in to modalities of GDRs in the year 2011, with a
restrictive orders on the Company from entering into the capital market and issuing any
securities and altering its capital structure, SEBI finally vide order dated 23rd
October, 2013, prohibited the company for approx. 8 years from the date of the order to
access the capital market, or issuance of any kind of securities and alteration in capital
structure of the Company.
However, the company has filed an appeal before Honble SAT against the restrictive
orders of the SEBI, which is still in motion and the management is hoping to receive a
favourable order from the SAT proceedings, soon. The order of the SAT will have
considerable impact on the future of the Company.
Further, non-availability of surplus funds and equity, which was a major source of
initial funding, prohibition on issue/allotment of received share application money from
foreign investors had material adverse effect. The company defaulted in its obligations to
vendors and the vendors cancelled their agreements. The SEBIs adverse order, resulted
into many other unnecessary and unwarranted connected investigations from ED, SFIO &
Income Tax Department etc. Thus at present the company has no business operations and the
likely hood of starting the proposed project is found unfeasible in the year of reporting.
During the year turnover of the Company has remained Nil, the Company did not have any
operational profit, therefore the net worth of the Company has further eroded to
(224.80) million from (206.40) million in the previous year and the Net Loss for the
year was 18.40 Million as compared to 12.64 million of the previous year. The increase
in the loss and negative balance in the Reserve and Surplus has caused the net worth
erosion in the Company.
In furtherance of above, during the period under review M/s Nyra Holdings Private a
Company belonging to the promoter Group, which was extending loan to the Company has
assigned the Loan arrangements with our Company to its parent cum holding Company M/s
Spice Energy Private Limited (an another promoter group Company). A tri-partite agreement
was executed between our Company (as borrower), Nyra Holdings Pvt. Ltd. (as assignor) and
Spice Energy Pvt. Ltd. (as assignee) to effect the aforesaid transaction, i.e., assignment
of loan from Nyra Holdings to Spice Energy Pvt. Ltd. and also that the Spice Energy
Private Limited to carry with the loan arrangements with us in future as per the
assignment agreement. The Audit Committee and Board of Directors have considered and
approved/ Ratified the aforesaid matter in their respective meeting held on 26th
May, 2017.
The Board has further proposed the aforsaid agreement/ arrangement to the Shareholders
of the Company for their ratification/ approval in the ensuing Annual General Meeting. The
factual points in relation to above, have been included and explained in detail in the
Notice of Annual General Meeting and explanatory statement annexed with it.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequately adopted the procedures, criteria and mechanism to ensure the
proper internal control, suitable policies and guidelines as required under various
provisions of the Companies Act, 2013 and the Listing Agreement are in place. The
following policies adopted by the Company, which focuses on comprehensive management,
control and compliance with different rules and regulations as prescribed under various
laws applicable to the Companies.
1. Vigil Mechanism Policies/Whistle Blower Policies,
2. Risk Management Policy
The said policies ensures reduction of possible threats of fraud, the orderly and
efficient conduct of the business of the Company. These policies and guidelines are
adequately monitored by the designated Committees of the Board.
The Company in addition to the above, has also in place a proper system of internal
audit that is adequate in respect to the size and operations of the Company. M/s AmarJeet
Singh & Associates, Chartered accountants had been appointed as the Internal Auditor
of the Company for the financial year 2016-17. They had adequately conducted the Quarterly
Internal Audit exercise with in the terms of regulatory requirements.During the Audit
Process, no material discrepancies have been reported by them. The Company prepare the
financial information/reporting as per the requisite requirements of the Companies Act,
2013 and the Listing Agreement, and place it to the Audit Committee and Board for the
approval, once approved the said financial results are submitted to the stock exchange and
also placed on the website of the Company. The Internal Auditors are empowered with the
facility to directly report to the Audit Committee of the Board of Directors of the
Company.
HUMAN RESOURCE DEVELOPMENT
Despite challenges and adverse circumstance the human resource of the Company stand
along with it to deal with any critical situation. The Company is having no operations and
comprises of limited staff. During the financial year under review the relation with the
human resources have been dispute free and cordial. The company has an adequate
remuneration policy relating to the Whole time Director/ Executive/Managing Director, Key
Managerial Personnel (KMP) and Senior Management Personnel, as required under the
Companies, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015. The same has been regularly reviewed and adopted by the board.
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