BOARD'S REPORT TO THE MEMBERS, Your Directors are pleased to present the 22nd Annual Report and the Company's audited financial statement for the financial year ended 31st March, 2015. DIVIDEND : In view of loss incurred, the Board regrets its inability to recommend payment of dividend to the shareholders. TRANSFER TO RESERVES : The Company does not propose to transfer any sum to the General Reserve in view of loss. COMPANY'S PERFORMANCE : On consolidated basis, total revenue from operations for the financial year 2014-15 stood at Rs. 14,083.30 Lacs which was higher by 15.60% over last year (Rs. 12,182.94 Lacs in 2013-14). However, Overall operational expenses for the year rose to Rs. 16,445.17 Lacs, against Rs. 13,845.60 Lacs in the previous year resulting Operating Loss of Rs. 2,361.87 Lacs, against Rs. 1,662.66 Lacs in the previous year. Net Loss (excluding exceptional item) for the year stood at Rs. 2,701.08 Lacs was higher by 15.29 % over Rs. 2,342.78 Lacs of loss, in the previous year. On standalone basis, revenue from operations for the financial year 2014-15 stood at Rs. 136.93 Lacs was lower by 92.39 % over last year (Rs. 1,799.34 Lacs in 2013-14) whereas Overall operational expenses for the year rose to Rs. 1,868.83 Lacs, against Rs. 4,361.76 Lacs in the previous year resulting Operating Loss was Rs. 1,731.90 Lacs, against Rs. 2,562.41 Lacs in the previous year. Net Loss (excluding exceptional item) for the year at Rs. 1,676.11 Lacs which was lower by 32.96 % over Rs. 2,500.13 Lacs, of loss, in the previous year. During the year the Company has been active in Tendering activity followed the course the oil companies were taking with regards to new exploration activities. The Company continued to show an active interest in possible work in India, Africa, Myanmar and Malaysia. In the coming year, the focus will continue to remain on delivering excellence to its Clients, through its projects in the Indian subcontinent as well as in Africa, Middle East and S.E. Asia. In line with the vision of becoming a technology solutions leader in the MENA region, Company has signed a MOU with Geokinetics, this will allow your Company to provide technologically differentiated offerings to the customer, while addressing his needs. (Denomination conversion disclaimer: Rs. 10 Lacs is equal to 1 million) CONSOLIDATED FINANCIAL STATEMENT AND SUBSIDIARY COMPANIES : In accordance with the Companies Act, 2013 ("the Act") and Accounting Standard (AS) - 21, the audited consolidated financial statement is provided in the Annual Report. Subsidiary Companies : The Company has 2 subsidiaries as on 31st March, 2015. There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of business of the subsidiaries. The Consolidated Financial Results reflect the operations of the two subsidiaries viz. Asian Oilfield & Energy Services DMCC and AOSL Petroleum Pte.Ltd. The process of closure of Asian Offshore Pvt. Ltd., the wholly-owned subsidiary, which was not in operation, was completed during the year under review. PERFORMANCE OF SUBSIDIARIES : Asian OilField & Energy Services DMCC, Dubai During the year, net sales of Asian Oilfield & Energy Services DMCC increased from Rs. 85 Crores in the previous year to Rs. 139.46 Crores during the year 2014-15. However, it generated Net Loss of Rs. 9.23 Crores, against Net Profit of Rs. 6.31 Crores in the previous year. Asian Oilfield & Energy Services DMCC has been exploring opportunities in select countries in the MEA Region, which would have huge opportunities in the Held of Oil and Gas exploration. AOSL Petroleum Pte.Ltd. During the year AOSL Petroleum Pte. Ltd. registered no income against income of Rs. 19.10 Crores in the previous year causing Net Loss of Rs.1.17 Crores, against net Loss of Rs. 2.24 Crores in the previous year. Pursuant to provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company's subsidiaries in Form AOC- 1 is annexed as Annexure A. Pursuant to the provisions of section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are kept at the Registered Office of the Company and are available on the website of the Company. DIRECTORS' RESPONSIBILITY STATEMENT : Your Directors state that: a. in the preparation of annual accounts for the year ended 31st March, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same; b. the Directors 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 31st March, 2015 and of the loss of the Company for the year ended on that date c. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. the Directors have prepared the annual accounts on a 'going concern' basis ; e. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. DIRECTORS AND KEY MANAGERIAL PERSONNEL : During the year under review, following changes occurred in the position of Directors/ KMPs of the Company: • Mr. Rahul Talwarceasedtobea Wholetime Director with effect from 12th August, 2014, however he continues to function as a Director of the Company & Croup CEO. • Mr. Ashwin Madhav Khandke, who was appointed as an Additional Director with effect from 12th August, 2014 and was appointed as Whole time Director for a period of 3 (three) years from 12th August, 2014, subject to the approval of the Shareholders and Central Government. • Ms. Sapna Kalantri was appointed as an Additional Director with effect from 23rd March, 2015 and pursuant to the provisions of Section 161 of the Companies Act, 2013, she holds office upto the ensuing Annual General Meeting. The Company has received a notice along with the requisite deposit from a member of the Company proposing the candidature of Ms. Sapna Kalantri for her appointment as Director of the Company, liable to retire by rotation. • Pursuant to the provisions of Section 149 of the Act, which came into effect from 1st April, 2014, Mr. Naresh Chandra Sharma, Mr. Ajit Kapadia, Mr. Rabi Narayan Bastia were appointed as Independent Directors at the Annual General Meeting of the Company held on 18th September, 2014. The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act. They have submitted a declaration that each of them, meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as Independent Directors during the year. • Mr. Gautam Gode and Mr. Vikram Agarwal retire by rotation and being eligible have offered themselves for re-appointment. During the year, the Non-executive Directors of the Company had no pecuniary relationship or transactions with the Company. • During the year, Mr. Tarun Pal resigned on 15th January, 2015, as the Chief Financial Officer (CFO) and in his place, Mr. Sandeep Bhatia, has been appointed as CFO of the Company, effective from 21st May, 2015. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS : The Company's policy on Directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which forms part of the Directors' report. BOARD EVALUATION : The Board of Directors has carried out an annual evaluation of its own performance, Board committees and Individual Directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49"). The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the Individual Directors on the basis of the criteria such as the contribution of the Individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role. In a separate meeting of independent Directors, performance of Non-independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of Executive Directors and Non-executive Directors. The same was discussed in the Board Meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and Individual Directors was also discussed. NUMBER OF MEETINGS OF THE BOARD : Five meetings of the Board were held during the year on 26th May, 2014, 12th August, 2014, 18th September, 2014, 12th November, 2014 and 13th February, 2015. For details of the meetings of the Board, please refer to the Corporate Governance Report, which forms part of this report. AUDIT COMMITTEE : The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY : The Company has adequate internal control systems including suitable monitoring procedures commensurate with its size and the nature of the business. The internal control systems provide for all documented policies, guidelines, authorization and approval procedures. The Company has M/s. S.P. Chopra & Co. the Firm of Chartered Accountants as an Internal Auditor which carries out audits throughout the year. The Statutory Auditors while conducting the statutory audit, review and evaluate the internal controls and their observations are discussed with the Audit committee of the Board. MANAGEMENT DISCUSSION AND ANALYSIS : The management discussion and analysis report on the operations of the Company as required under the listing agreement with stock exchange (BSE Ltd.) has been given separately and forms part of this report. RISK MANAGEMENT : The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Clause 49 of the Listing Agreement. It establishes various levels of accountability and overview within the Company, while vesting identified managers with responsibility for each significant risk. The Internal Audit Department facilitates the execution of Risk Management Practices in the Company, in the areas of risk identification, assessment, monitoring, mitigation and reporting. Through this program, each Functional Unit addresses opportunities and risks through a comprehensive approach aligned to the Company's objectives. The Company has laid down procedures to inform the Audit Committee as well as the Board of Directors about risk assessment and management procedures and status. This risk management process, which is facilitated by internal audit, covers risk identification, assessment, analysis and mitigation. Incorporating sustainability in the process also helps to align potential exposures with the risk appetite and highlights risks associated with chosen strategies. The major risks forming part Risk Management process are linked to the audit. The Audit Committee of the Board of the Company has been entrusted with the task to frame, implement and monitor the risk management plan for the Company and it is responsible for reviewing the risk management plan and ensuring its effectiveness with an additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS : Loans, guarantees and investments covered under Section 186oftheCompaniesAct, 2013 form part of the notes to the financial statements provided in this Annual Report. Please refer to Note 23 to the standalone financial statement. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES : All Related Party Transactions that were entered into during the financial year were on an arm's length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 ('the Act') and the Listing Agreement. There were no materially significant Related Party Transactions made by the Company during the year that would have required Shareholder approval under Clause 49 of the Listing Agreement. All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company's website at the web link: http://www. asianoiineld.com Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure B to the Board's report. CORPORATE SOCIAL RESPONSIBILITY (CSR): The Company has constituted a Corporate Social Responsibility (CSR) Committee by the Board of Directors of the Company at its meeting held on 12th August, 2014 in accordance with Section 135 of the Companies Act, 2013. For the Company, Social Responsibility is a key element of accountability and it will continue to strive in its behaviour and actions to surpass the levels of minimum statutory compliance. The Company believes in the sustainable growth and prosperity of its stake holders and views its responsibilities not only as business responsibilities but as Ethical and Social as well. The Company's commitment to excellence in Health and Safety is embedded in the Company's core values. The Company has a stringent policy of 'safety for all', which drives all employees to continuously break new ground in safety management for the benefit of people, property, environment and the communities where we operate on sites. The Company respects human rights, values its employees and the communities that it interfaces with. The Company is aware of the environmental impact of its operations and it continually strives to reduce such impact by investing in technologies and solutions for economic growth. The CSR policy of the Company is placed on the website of the Company www.asianoiineld.com (web link: http://asianoiineld.com/ pdfs/Corporate%20Social%20Responsibility%20Policy.pdf). In view of its non applicability’s the Company has not taken any initiative on CSR. SAFETY, ENVIRONMENT AND HEALTH : The Company considers safety, environment and health as the management responsibility. Regular employee training programmes are in place throughout the Company on Safety, Environment and Health. POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE : The Company has zero tolerance for sexual harassment at the workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassmentand for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has not received any complaint of sexual harassment during the financial year 2014-15. VIGIL MECHANISM/ WHISTLE BLOWER POLICY : The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS : No significant material orders have been passed by the Regulators or Courts or Tribunals during the year under review which would impact the going concern status of the Company and its future operations. DISCLOSURE REQUIREMENTS: As per Clause 49 of the listing agreement entered into with the stock exchange, corporate governance report with Practicing Company Secretary's certificate thereon and management discussion and analysis are attached, which form part of this report. Details of the familiarization program of the Independent Directors are available on the website of the Company (URL:http://asianoilfield.com/pdfs/Familiarisation%20 Program%20for%20lndependent%20Directors.pdf). Policy for determining material subsidiaries of the Company is available on the website of the Company (URL: http:// asianoiineld.com/investor-relations/corporate-governance. html). Policy on dealing with related party transactions is available on the website of the Company (URL:http://asianoilfield.com/pdfs/Related%20Party%20 Transaction%20Policy.pdf) The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including Directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and the revised Clause 49 of the Listing Agreement with stock exchange (URL: http:// asianoiineld.com/pdfs/Whistleblower_policy.pdf). HUMAN RESOURCES : The human resource plays a vital role in the growth and success of an organization. The Company has maintained cordial and harmonious relations with employees across various locations. Your Company continuously invest in attraction, retention and development of talent on an ongoing basis. Anumber of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement. DEPOSITS FROM PUBLIC : The Company has not accepted any deposits neither from public nor from member and as such, no amount on account of principal or interest on deposits from public, was outstanding as on the date of the balance sheet. There was no unpaid/ unclaimed deposits as at 31st March, 2015 PARTICULARS OF EMPLOYEES AND REMUNERATION : The information required under Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure-C forming part of the Report. In terms of the first proviso to Section 136 of the Act, the Report and Accounts are being sent to the Shareholders including the aforesaid Annexure. None of the employees listed in the said Annexure is related to any Director of the Company. AUDITORS AND AUDITORS' REPORT : (1) Statutory Auditors: Pursuant to the provisions of Section 139 of the Act and the rules framed there under, Deloitte Haskins & Sells, Chartered Accountants, who were appointed as statutory auditors of the Company from the conclusion of the 21st Annual General Meeting (AGM) of the Company held on 18th September, 2014 till the conclusion of the 25th AGM to be held in the year 2018, subject to ratification of their appointment at every AGM, showed their unwillingness to be reappointed as the Auditors of the Company. The Company has received a Special Notice under the provisions of Section 140(4)(i) read with Section 115 of the Companies Act, 2013 from a Member proposing the appointment of M/s. Walker Chandiok & Co LLP, Chartered Accountants, as the Statutory Auditors in place of M/s. Deloitte Haskins & Sells, the retiring Auditors. The Company has received a letter from M/s. Walker Chandiok & Co LLP, the Chartered Accountants to the effect that their appointment, if made, would be within the prescribed limits underSection 141(3)(g) of the Companies Act, 2013 and that they are not disqualified from appointment. The Board recommends the resolution, for your approval. A) The existing Auditors in their Report to the members, have given one qualified opinion in their Report reading as under; "The Company's trade receivables, short term loans & advances and long term loans & advances as at 31st March, 2015 include Rs. 313.53 Lacs, Rs. 993.99 Lacs and Rs. 95.70 Lacs respectively, which are due for a period exceeding one year. Based on the information and explanations given to us, we are of the opinion that these are doubtful of recovery whereas the management is of the view that these are recoverable. We are unable to comment on the recoverability of these trade receivables, short term loans & advances and long term loans & advances as at 31st March, 2015 and on their consequent impact on the loss for the year ended 31st March, 2015, on the balances of the trade receivables, short term loans & advances, long term loans & advances and shareholder's funds as at 31st March, 2015". In response thereto, your Board of Directors wishes to state that the Management of your Company is doing regular efforts to recover the money and in view of the response being received, these amount of dues appear to be recoverable. (2) Secretarial Auditors : Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. Jayesh Vyas & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended 31st March, 2015. The Secretarial Audit Report is annexed as Annexure D. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditors. SHARE CAPITAL : The paid up Equity Share Capital as on 31st March, 2015 was Rs. 22.32 Crores. During the year under review, the Company has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company. As on 31st March, 2015, none of the Directors of the Company hold shares of the Company. EXTRACT OF ANNUAL RETURN : As provided under Section 92(3) of the Act, the extract of Annual Return is given in Annexure E in the prescribed Form MGT-9, which forms part of this report. ACKNOWLEDGEMENT : The Board places on record its deep appreciation for the continued support received from various clients, vendors and suppliers and technical partners, Bankers, Government Authorities, Employees at all levels and Stakeholders, in furthering the interest of the Company. On behalf of the Board of Directors Naresh Chandra Sharma Chairman Place : Gurgaon, date : August 11, 2015 |