FOR THE YEAR ENDED 31ST MARCH, 2023. TO,
THE MEMBERS,
Your Directors present their report as under:
1] FINANCIAL RESULTS :
PARTICULARS |
Rs. in Crores |
|
Year ended March 31,2023 |
Year ended March 31.2022 |
Income from operations. |
29.61 |
47.35 |
Other Income. |
0.09 |
0.42 |
Gross Income. |
29.70 |
47.77 |
Expenses for the period. |
46.35 |
46.46 |
Earnings Before Interest,
Taxes, Depreciation and Amortization (EBITDA). |
(16.65) |
1.31 |
Finance cost. |
3.15 |
18.67 |
Depreciation. |
24.14 |
28.24 |
Profit / (Loss) Before
Exceptional Items and Tax. |
(43.94) |
(45.60) |
Exceptional Items. |
217.28 |
(16.16) |
Profit / (Loss) Before Tax. |
173.34 |
(61.76) |
Provision for Taxation: |
|
|
Current Tax. |
0.27 |
0.37 |
Reversal of MAT Credit. |
0.89 |
· |
Tax for earlier years. |
0.19 |
(0.09) |
Net Profit / (Loss) After
Tax. |
171.99 |
(62.04) |
Add : Balance of Profit /
(loss) brought forward from previous year. |
(224.32) |
(162.28) |
Balance carried forward. |
(52.33) |
(224.32) |
2] The Annual Accounts of the Company have been prepared in accordance
with the requirements of the Indian Accounting Standard (IND AS). The impact of the IND AS
is stated in the Notes to the Accounts.
Income from Operations for the year ended 31.03.2023 stood at Rs.29.61
crores, as against Rs.47.35 crores for the previous year (a reduction of approximately
37.5%). The decrease in the revenue was mainly as a result of three of the Companys
vessels not earning for a substantial period of the year. Other Income for the year stood
at Rs.0.09 crore as against Rs.0.42 crore in the previous year, comprising of interest
earned.
The Expenses for the year stood at Rs.46.35 crores as against Rs.46.46
crores for the previous year since, manly because even though 3 vessels did not earn,
their operating expenses had to be defrayed. As a result, EBIDTA for the year was
(Rs.16.65 crores) as against Rs.1.31 crores for the previous year. Finance charges for the
year stood at Rs.3.15 crores as against Rs.18.67 crores for the previous year in view of
assignment of outstanding Loan of State Bank of India (SBI) in favour of Phoenix ARC
Private Limited and the subsequent settlement with the new lender. Depreciation for the
year stood at Rs.24.14 crores as against Rs.28.24 crores for previous year. The Loss
before Exceptional items and Tax stood at (Rs.43.94 crores) as opposed to (Rs.45.60
crores) (a decrease of Rs.1.66 crores) in spite of a substantial reduction in finance
costs, mainly as a result of the decline in Revenue to the tune of Rs.18 crores.
Exceptional item (Gain) of Rs.217.28 crores for the year comprised of mainly Reversal of
Loan and interest liability on account of settlement with Phoenix ARC Private Limited (the
Companys new lender) and Profit on sale of Office Premises and loss on sale of vessels.
There was also a reversal of MAT Credit of Rs.89.09 Lakhs (previous year NIL) during the
year. As a result, Net Profit for the year stood at Rs.171.99 crores as opposed to a loss
of Rs.62.04 crores.
3] OPERATIONS:
During the year under review :
i] The Vessels M.V. Mahananda and M.V. Kamet continued to work on East
Coast of India and West Coast of India respectively.
ii] The Vessel M.V. Meghna was sold in November 2022.
iii] The Vessel M.V. Lachung laid idle for most of the year and was
also sold in November 2022.
iv] The Vessel M.V. Mana worked till August 2022 and was sold in
December 2022.
v] The Vessel M.V. Poorna laid idle during the year under review,
barring on a short term contract for couple of months. After the year
under review, in May 2023 the said Vessel was sold.
With regard to the Working Capital Cash Credit Limits sanctioned by
Punjab National Bank (PNB) (the erstwhile United Bank of India), the entire
“reduced" outstanding facilities of Rs.5.25 crores were repaid in February 2023.
In the case of Bank Guarantee (BG) facility, the Company has placed 100% deposit against
the said BGs issued.
4] TRANSFER OF STRESSED LOANS EXPOSURE BY STATE BANK OF INDIA TO
PHOENIX ARC PRIVATE LIMITED :
Vide its letter dated 26.08.2022, Phoenix ARC Private Ltd. (Phoenix)
informed the Company that pursuant to an Assignment Agreement dtd.22/08/2022, State Bank
of India (SBI) has absolutely assigned and transferred the Debt due and payable by the
Company to SBI together with all underlying securities interest thereto and all their
right, title and interests in all agreements, deeds, and documents in relation to or about
the said debt to Phoenix.
Consequent to the above, the Company had to deal directly with Phoenix
for any issues related to the said debt.
5] SETTLEMENT WITH PHOENIX ARC PRIVATE LIMITED :
Further to the above assignment, the Company after protracted
discussions with Phoenix arrived at a settlement of the total debt for an amount of
Rs.86.51 Crores. However, as per the settlement, in the event of any default, the entire
assigned debt would be restated as payable. Therefore, the settlement will be in place
once the entire debt as agreed upon is repaid with no occurrence of any default. The
Company had during the later half of the year, sold three of the vessels and along with
the help of contributions from Promoters and other Associates had reduced the outstanding
settlement amount as at 31 st March, 2023 to circa Rs. 13.20 crores and furthermore
thereafter.
6] DIVIDEND:
In view of the operating losses incurred for the year, your Directors
regret their inability to recommend any Dividend.
7] FUTURE EXPANSION AND OUTLOOK ::
The supply disruption and Price Validity are not new to Oil & Gas
Industry (O&G), the situation today is unique. A confluence of economic, geopolitical,
trade, policy, and financial factors have exacerbated the issue of underinvestment and
triggered a readjustment in the broader energy market. As a result, all three components
of a balanced energy equation - energy security, supply diversification, and low-carbon
transition - are now facing a trilemma" of concerns.
Although the immediate impact of this imbalance is high energy prices
and record cash flows for O&G companies, how and where the industry will invest in the
future remains uncertain.
In the event, the world enters a recession in 2023, depending on the
duration and depth, it is possible that oil demand growth could remain below trend in the
next couple of years, potentially extending the post-pandemic demand stall to five years.
Once economic activity recovers, it will likely be less oil demand-intensive than it would
have been due to fuel switching, EV penetration, efficiency improvements, and accelerated
climate policies. The near-term uncertainty of demand and the potential
medium-to-long-term consequences add to investment hurdles and deterrents. However, it
also provides a valuable opportunity for upstream investments to catch supply up with
demand.
Considering the aforesaid factors and the recent turmoil, the Company
has “extricated" itself from, as is now a time for consolidation before
expansion plans are put in place.
8] SUBSIDIARY / WHOLLY OWNED SUBSIDIARY:
During the year under review there was no Company which became or
ceased to be subsidiary / joint venture or associate Company. The Company has two
Subsidiaries as detailed below:
a) Global Offshore Services B.V. - The Netherlands (GOSBV):
GOSBV continued to go through a difficult phase in F.Y. 2022-23 in view
of lower charter rates which were secured unfortunately just prior to oil prices
increasing dramatically.
The revenue from operations for the year was USD 2.65 mn (Previous Year
USD 2.37 mn). Other Income during the year was USD 0.03 mn (Previous Year 0.44 mn). EBIDTA
for the year stood at USD 0.42 mn as against USD (0.34 mn) for the previous year.
Exceptional item stood at USD 27.06 mn as opposed to USD 2.23 mn for the previous year.
The exceptional items consisted of write back of debt and interest already provided, which
in the view of the Management of GOSBV will not be recovered. The Profit recorded for the
year ended 31st March, 2023 was USD 25.95 mn as against loss of USD 3.7 mn for the
previous year.
b) Garware Offshore International Services Pte. Ltd. - Singapore
(GOISPL):
The Companys Wholly Owned Subsidiary GOISPL based in Singapore
had no operating income. Other income during the year was USD 0.24 mn as against 0.089 mn
for the previous year. The Company has made a net profit of USD 0.187 mn as against a loss
of USD 0.04 mn in the previous year.
Though, there was no activity in GOISPL during the year, the Company is
seeking opportunities of revenue generation and aggressively pursuing for recovery of
outstanding debts, while at the same time trying to minimize costs.
AUDITORS REPORT:
No qualifications have been made by the Auditors in the Consolidated
Auditors Report to the Shareholders. However, the Auditors have laid Emphasis of
Matter on the following :
a. Restructuring of Debt
During the financial year 2022-23, State Bank of India had assigned its
total debt outstanding in the books of accounts of the Holding Company in favour of
Phoenix ARC Private Limited via Assignment Agreement dated August 22, 2022. The Holding
Company has formalized the Term Sheet (“Assigned Security Documents”) of
Restructuring of Debt with Phoenix ARC Private Limited. As per the term sheet of
Restructuring of Debt, the total debt is restructured at Rs. 8,651 Lakhs. Accordingly, all
underlying securities and security rights pertaining to the debts also stood assigned in
favour of Phoenix ARC Private Limited. Accordingly loan outstanding of Rs. 32,196 Lakhs
and interest outstanding of Rs. 9,300.04 lakhs has been write back during the financial
year, (also Refer Note 2)
Management View :
The Company has arrived at an agreement of settlement of assigned debt
with Phoenix ARC Private Limited for an amount of Rs 86.51 crores. The Settlement will be
in place once the entire amount is fully repaid. Any event of default will lead to the
reinstatement of the entire Assigned amount in the Books. In view of the said agreement,
Company has effected necessary write back of liabilities.
b. The Management of Global Offshore Services B.V., has written back
debt of Rs.21,800.82 lakhs in view of settlement proposals and based on discussions held
with the Lenders (also Refer Note 4).
Management View:
The Management of GOSBV, has written back debt of Rs.21,800.82 lakhs in
view of settlement proposals and based on discussions held/ being held with the Lenders
and also in view of the fact that one of the Lenders, who have not laid any claim to the
Debt outstanding since the date of default, had intimated to the Company that it has no
intention of filing any claim against the Company in the future, since this would entail a
“waste of time and resources".
c. We draw attention that the net worth in the financial statements of
Garware Offshore International Services Pte. Limited has been eroded and is negative Rs.
2,091.28 lakhs, that may cast significant doubt on the companys ability to continue as a
going concern.
Management View:
While the networth of Garware Offshore International Services Pte. Ltd.
(GOISPL), had eroded presently the Company had limited activity and no recurring costs. In
fact for the year under review, the Company has declared a total comprehensive income of
USD 187,216.
d. The Auditors of the subsidiary Garware Offshore International
Services Pte. Limited have given a qualified opinion on the following points due to lack
of sufficient audit evidence -
• Income Tax Refundable from Rio De Janeiro State of Brazil
Rs.128.64 Lakhs.
• Loan payable to third parties Rs. 768.46 Lakhs.
Management View :
(GOISPL), has already won the case against State of Brazil for tax
refund for Rs.128.64 Lakhs. However, as per the rules of the Brazil Government, this
amount can be paid over a period. In the case of loans payable, confirmations of balances
have not been received from the said party by the Auditor. In any case Garware Offshore
International Services Pte. Ltd. (GOISPL), will attempt to arrive at a settlement with
these parties at a later stage.
e. We draw attention to Note 5 of the consolidated financial results,
which describe the extent of coverage of consolidated revenue, assets and profits pursuant
to the requirement of Regulation 33(3)(h) of Listing Regulations.
Management View:
The Authorities in The Netherlands do not require statutory Audit of
Global Offshore Services BV (GOSBV) and therefore the same has not been carried out
(kindly refer to Note No.5)
As per Regulation 33 (3)(h) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, 80% of each of the consolidated revenue,
assets, and profits, respectively needs to be covered under audit. However, in the absence
of a requirement of audit under Dutch Law for the Companys partly owned subsidiary,
Global Offshore Services B.V. there is a shortfall in the threshold percentage to be
covered in case of the consolidated revenue and profit/loss.
10] LISTING FEES TO STOCK EXCHANGE:
The Company has paid the Listing Fees for the year 2023-24 to BSE
Limited.
11] FIXED DEPOSITS:
During the year under review, no Deposits were accepted under Chapter V
of the Companies Act, 2013 and hence the details relating to deposits and details which
are not in compliance under Chapter V of the Act are “NOT APPLICABLE".
12] CHANGE OF REGISTERED OFFICE OF THE COMPANY ; :
Consequent to sale of part of the Office premises, the Registered
Office of the Company was moved from 101, Swapnabhoomi, “A" Wing, 1st
floor, S. K. Bole Road, Dadar (W), Mumbai - 400028 to 3rd Floor, Prospect
Chambers, D. N. Road, Fort, Mumbai-400 001 w.e.f. 26.06.2023.
13] RESPONSIBILITY STATEMENT:
The Directors confirm:
a) That in the preparation of the Annual Accounts, the applicable
accounting standards have been followed and that no material departures (save and except
as stated in the Directors Report) have been made from the same.
b) That they have selected such Accounting Policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the State of Affairs of the Company at the end of the year
and the Profit of the Company for the year ended on 31.03.2023.
c) That they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with provisions of the Companies Act, 2013,
for safe-guarding the assets of the Company and for preventing and detecting fraud and
other irregularities.
d) That they have prepared the Annual Accounts on a going concern
basis.
e) That they have laid down internal financial controls to be followed
and that such financial controls are adequate and were operating effectively.
f) That they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
14] INSURANCE :
All the Vessels owned and operated by the Company and its subsidiary
have been insured for Hull & Machinery and Protection & Indemnity (P & I)
claims.
15] DIRECTORATE :
Mrs. Maneesha S. Shah retires by rotation and being eligible, offers
herself for re-appointment. Members are requested to re-elect her as a Director.
The Company has formulated a Code of Conduct for Directors and Senior
Management Personnel and the same has been complied with. The Code of Conduct for
Directors and Senior Management is available on the Companys website
www.globaloffshore.in.
16] AUDITORS:
There are no Qualifications in the Auditors Report. However, the
Auditors have enumerated “Emphasis of Matter” for the attention of the
Shareholders which have been dealt with by the Management.
As regards observation of the Auditors in the Annexure A to the
Auditors Report, the Board of Directors clarify as follows :
1] Clause ii(a) of Annexure A to the Auditors Report regarding
verification of the physical Inventory: The Board clarifies that Management
representatives on the Vessels have carried out the physical verification of the
inventories and the same have been confirmed by them. The Auditors have relied on the
report of Management since it is impractical for them to carry out physical verification
of the inventory as this would lead to a substantial loss of charter hire, which is
something the Company cannot afford.
17] PERSONNEL:
The relations with Employees of the Company, have been cordial. Your
Directors wish to express their appreciation of the services rendered by the devoted
employees, which has helped the Company to continue operations during these extremely
difficult times.
18] DEMATERIALISATION OF SHARES:
The Companys shares continue to be traded in Electronic Form. As per
Securities and Exchange Board of India (SEBI) requirement, 100% of the shares held by the
Promoters / Persons Acting in Concert category are in Electronic Form.
19] ANNUAL RETURN :
Pursuant to the provisions of Section 134(3)(a) of the Companies Act,
2013, the Annual Return has been uploaded on the Companys website: www.alobaloffshore.in
.
20] STATEMENT OF DECLARATION GIVEN BY INDEPENDENT DIRECTORS:
The Independent Directors of the Company viz. Mr. A.K. Thanavala, Mr.
S. Y. Mulani and Mrs. Faisy Viju have given a declaration that they meet the criteria of
independence as provided in Sub-section (6) of Section 149 of the Companies Act, 2013.
Further all Independent Directors have complied with the Code for
Independent Directors prescribed in Schedule IV to the Companies Act, 2013.
21] NUMBER OF BOARD MEETINGS:
During the year under review, Seven (7) Board Meetings were held as
detailed below:
(i) 30" May. 2022, (ii) 07“ June, 2022, (iii) 09th
August,, 2022 (iv) 02nd September, 2022 (v) 11" November, 2022 (vi)
13th February, 2023 and (vii) 28" March, 2023.
22] BOARD EVALUATION:
Pursuant to the provisions of Section 178 of the Companies Act, 2013
and provision of SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015,
the Company has put in place a framework for the evaluation of the Board, its Directors,
the Chairman and all the Committees, with the approval of the Nomination and Remuneration
Committee.
The evaluations for the Directors, the Board and the Committees is
carried out through circulation of questionnaires to the Directors, the Board, the
Chairman of the Board and the Committees, respectively. The performance of the Board is
assessed on select parameters related to roles, responsibilities and obligations of the
Board, relevance of Board discussions, attention to strategic issues, performance on key
areas, providing feedback to Executive Management and assessing the quality, quantity and
timeliness of flow of information between the Company Management and the Board. The
evaluation criteria for the Directors is based on their participation, contribution,
offering guidance to and understanding of the areas which were relevant to them in their
capacity as Members of the Board. The evaluation criteria for the Chairman of the Board,
besides the general criteria adopted for assessment of all Directors, focuses on
leadership abilities, effective management of meetings and preservation of the interest of
stakeholders. The evaluation of the Committees is based on the assessment of the clarity
with which the mandate of the Committee is defined, effective discharge of the terms and
reference of the Committees and assessment of effectiveness of contribution of the
Committees deliberation / recommendations to the functioning / decisions of the Board.
The overall performance evaluation process was completed to the satisfaction of the Board.
23] FAMILARISATION PROGRAMME FOR DIRECTORS :
At the time of appointment on the Board, each Independent Director is
issued a formal letter of appointment, which inter alia explains the role, function,
duties and responsibilities expected of him/her as a Director of the Company. All the
Directors have been provided with a deep insight into the business of the Company
including the working of the subsidiaries. Vessel-wise details have also been furnished to
them. The Directors have also received a detailed explanation on the Compliances required
from him/ her under the Companies Act, 2013, SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015 and other relevant regulations and affirmation taken with
respect to the same.
24] DETAILS OF LOANS GRANTED / INVESTMENTS MADE / GUARANTEES PROVIDED
UNDER SECTION 186 OF COMPANIES ACT 2013 :
The details of the Loans/Investment/Guarantees, during the year under
review is enclosed asAnnexure A.
25] PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES:
The details of contracts/arrangement with related parties is enclosed
asAnnexure B.
26] STATEMENT ON DEVELOPMENT AND IMPLEMENTATION OF RISKS MANAGEMENT
POLICY:
Risk Management is a key aspect of the “Corporate Governance
Principles and Code of Conduct” which aims to improve the governance practices across
all Company activities. Risk Management Policy and processes will enable the Company to
proactively manage uncertainty and changes in both internal and external environments in
an attempt to capitalize on opportunities and limit negative impacts.
The Risk Management Policy of the Company identifies, evaluates,
monitors and minimises identifiable risks.
27] CORPORATE SOCIAL RESPONSIBILITY (CSR):
During the year under review, the Company did not undertake any CSR
activity. Kindly refer to Annexure C.
28] SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:
There was no significant and material order passed by Regulators or
Courts or Tribunals impacting the future operations or the “going concern"
status of the Company.
29] INTERNAL FINANCIAL CONTROL:
In the opinion of Board of Directors, there is adequate Internal
Financial Control with respect to the preparation and presentation of the Financial
statements which form a part of this Annual Report.
30] SECRETARIAL AUDITOR:
The Board has appointed Mr. Rajkumar R. Tiwari, FCS as Secretarial
Auditor.
The Secretarial Auditor carried out Secretarial Audit and submitted his
Report pursuant to Section 204(1) of the Companies Act, 2013 and rule 9 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 enclosed asAnnexure D
to the Directors Report.
There are no adverse remarks made by them in their Report.
31] DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:
The Company has in place an Anti Sexual Harassment Policy in line with
the requirements of The Sexual Harassment of Women at the Workplace (Prevention,
Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been
set up to redress complaints received regarding sexual harassment. All employees
(permanent, contractual, temporary) are covered under the policy.
No sexual harassment complaint was received during the year.
32] CORPORATE GOVERNANCE:
A separate report on Corporate Governance along with the Auditors
Certificate on its compliance is given separately in the Annual Report.
33] CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO :
The required details are enclosed as Annexure E.
34] SUBSIDIARIES. JOINT VENTURE OR ASSOCIATE COMPANIES :
During the year under review, there were no Companies which became or
ceased to be a subsidiary, joint venture or an associate Company.
35] DETAILS RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL
PERSONNEL AND EMPLOYEES:
The information required under Section 197 read with Rule 5 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of
employees of the Company and Directors is furnished as Annexure - F.
36] DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL / SR. MANAGEMENT
APPOINTED OR RESIGNED DURING THE YEAR:
There was no change in Directors and Key Managerial Personnel during
the year.
37] ACKNOWLEDGEMENT:
The Board wishes to thank the Office of Directorate General of
Shipping, Mercantile Marine Department, Shipping Master, Indian Register of Shipping,
State Bank of India and Phoenix ARC Private Limited for their continued support and
co-operation during the year.
|
By Order of the Board |
|
Sd/- |
Place : Mumbai |
Aditya A. Garware |
Dated : 10"August, 2023. |
Chairman |
|
Din: 00019816 |
+91-9892691696
