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Notes to Accounts of Aban Offshore Ltd.

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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