MIRA
INFORM REPORT
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Report Date : |
01.06.2011 |
IDENTIFICATION DETAILS
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Name : |
BG EXPLORATION AND PRODUCTION INDIA LIMITED (w.e.f. 15.02.2002) |
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Formerly Know: |
ENRON OIL AND GAS
INDIA LIMITED |
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Liasion Office
: |
B G House, |
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Country : |
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Financials (as on) : |
31.03.2010 |
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Date of
Incorporation : |
02.05.1994 |
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Capital Investment / Paid-up Capital : |
Rs. 25833.855 Millions |
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FCRN: |
F01316 |
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TAN No.: (Tax
Deduction & Collection Account No.) |
MUMB12758E |
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PAN No.: (Permanent
Account No.) |
AAACE4569K |
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Legal Form : |
Foreign Registered
Company |
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Line of
Business : |
The company is in
Exploration, Production, Development and Supply of existing and emerging gas
markets around the world. |
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No. of Employees : |
Not divulged by
the management |
RATING & COMMENTS
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MIRA’s Rating : |
Ba (52) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
Large |
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Status : |
Satisfactory |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a foreign registered company having satisfactory track. Trade
relations are reported as fair. Business is active. Payments are reported to
be regular and as per commitments. The company can be considered normal for business dealings at usual
trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
INFORMATION DECLINED BY
|
Name : |
Mr. Kala Shetty |
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Designation : |
Accounts Department |
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Date : |
30.05.2011 |
LOCATIONS
DIRECTORS
AS ON 31.03.2010
|
Name : |
Mr. Matthew Tan |
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Designation : |
Director |
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Address: |
7 One North Gateway #08-13, Singapore 138642 |
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Date of Appointment: |
05.07.2010 |
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Name : |
Mr. David Bishopp |
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Designation : |
Director |
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Address: |
80 Grange Road, #09-01, Singapore 658835 |
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Date of Appointment: |
05.07.2010 |
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Name : |
Mr. Sandeep Mahawar |
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Designation : |
Director |
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Address: |
35 Burgundy Drive Singapore - 658835 |
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Date of Appointment : |
05.07.2010 |
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Name : |
Mr. Walter Simpson |
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Designation : |
Director |
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Address: |
Flat No. 2801 Evita, Hirananadai Garden, Powai, Mumbai – 400076,
Maharashtra, India |
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Date of Appointment : |
05.07.2010 |
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Name : |
Ms. Christine McNamara |
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Designation : |
Director |
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Address: |
6 St Martin’s Drive #02-12 St Martin Residence Singapore - 439572 |
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Date of Appointment : |
02.08.2010 |
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Name : |
Mr. Alan Derek Fisher |
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Designation : |
Director |
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Address: |
BG House, |
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Date of Appointment : |
21.11.2008 |
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Name : |
Mr. Peter Thompson |
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Designation : |
Managing Director |
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Address: |
2901, Evita (29th Floor), Hiranandani Gardens, Powai,
Mumbai – 400076, Maharashtra, India |
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Date of Appointment : |
27.04.2009 |
BUSINESS DETAILS
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Line of Business : |
The company is in
Exploration, Production, Development and Supply of existing and emerging gas
markets around the world. |
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Product: |
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PRODUCTION STATUS AS ON 31.03.2010
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Particulars |
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Unit |
Actual
Production |
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Crude Oil |
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Metic Tons (MT) |
1756359 |
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Associated Natural Gas (ANG) |
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MMBtu* |
79240319 |
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Mid and South Tapti Field |
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MMBtu* |
114072941 |
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Condensate |
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Metic Tons (MT) |
186860 |
GENERAL INFORMATION
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Suppliers : |
v
Ankleshwar v
Bharuch
v
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Customers : |
v
Domestic v
Commercial
v
Industrial
Customers |
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No. of Employees: |
Not divulged by the management |
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Bankers : |
·
·
JP Morgan Chase Bank of |
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Facilities : |
-- |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
Price Waterhouse Chartered Accountants |
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Associates/Subsidiaries : |
·
BG International Limited ·
British Gas India Private Limited ·
BG India Energy Private Limited ·
BG India Energy Solutions Private Limited ·
BG India Energy Services Private Limited ·
BG LNG Regas India Private Limited ·
Gujarat Gas Company Limited ·
Mahanagar Gas Limited ·
BG Asia Pacific Holding Private Limited,
Singapore |
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Ultimate Holding Company: |
BG Group Pic-England |
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Holding Company: |
BG Mumbai Holdings Limited- |
CAPITAL STRUCTURE
Head Office
Account:
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Particulars |
31.03.2010 (Rs.
In millions) |
31.03.2009
(Rs.
In millions) |
|
As per last Balance Sheet |
28348.970 |
23777.574 |
|
Remittances Received from Head o0ffice towards cash call |
15212.825 |
25881.697 |
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Payment made to head office |
(23115.801) |
(32634.512) |
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Exchange (Gain) / Loss (net) |
(2875.585) |
3457.790 |
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Total |
17570.409 |
20482.550 |
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Profit for the year |
8263.446 |
7866.420 |
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|
25833.855 |
28348.970 |
FINANCIAL DATA
[all figures are
in Rupees Millions]
Indian Operations
of BG Exploration and Production India Limited (a Company Incorporated in Cayman
Islands with Limited Liability) - *the company*
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
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|
SHAREHOLDERS FUNDS |
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1] Head Office Account |
25833.855 |
28348.971 |
23777.574 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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|
3] Reserves & Surplus |
0.000 |
0.000 |
0.000 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
25833.855 |
28348.971 |
23777.574 |
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|
LOAN FUNDS |
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1] Secured Loans |
0.000 |
0.000 |
0.000 |
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING |
0.000 |
0.000 |
0.000 |
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DEFERRED TAX LIABILITIES |
7336.883 |
6618.849 |
6817.267 |
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TOTAL |
33170.738 |
34967.820 |
30594.841 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
799.404 |
289.915 |
421.212 |
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Capital work-in-progress |
3299.521 |
3831.874 |
1623.796 |
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Producing properties |
31833.057 |
27362.477 |
25635.954 |
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INVESTMENT |
0.000 |
0.000 |
0.000 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
746.405
|
634.390
|
523.101
|
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Sundry Debtors |
1511.842
|
1469.382
|
3696.718
|
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Cash & Bank Balances |
3140.275
|
3244.201
|
202.596
|
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Other Current Assets |
0.000
|
0.000
|
0.011
|
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Loans & Advances |
8865.024
|
11348.872
|
16147.684
|
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Total
Current Assets |
14263.546
|
16696.845
|
20570.110
|
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Less : CURRENT
LIABILITIES & PROVISIONS |
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|
|
|
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Sundry Creditors |
10423.452
|
12330.855
|
6395.077
|
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Other Current Liabilities |
1343.507
|
767.079
|
489.194
|
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Provisions |
5257.831
|
115.357
|
10771.960
|
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Total
Current Liabilities |
17024.790
|
13213.291
|
17656.231
|
|
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Net Current Assets |
(2761.244)
|
3483.554
|
2913.879
|
|
|
|
|
|
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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|
|
|
|
|
|
|
TOTAL |
33170.738 |
34967.820 |
30594.841 |
|
Indian Operations
of BG Exploration and Production India Limited (a Company Incorporated in
Cayman Islands with Limited Liability) - *the company*
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
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SALES |
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Sales Turnover |
28826.423 |
31634.042 |
27279.686 |
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Other Income |
144.158 |
413.786 |
106.591 |
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Exchange Gain |
2850.214 |
0.000 |
437.368 |
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Total Income (A) |
31820.795 |
32047.828 |
27823.645 |
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Less |
EXPENSES |
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Operating Expenses |
2950.203 |
2316.150 |
1577.179 |
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Exploration Expenses |
931.819 |
1077.649 |
525.418 |
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|
|
General and Administrative Expenses |
2113.026 |
1946.429 |
996.676 |
|
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Profit Petroleum to Government of |
3510.131 |
4014.531 |
2839.445 |
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|
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Royalty |
1615.995 |
1788.334 |
1323.013 |
|
|
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Production Cess |
520.964 |
530.312 |
595.537 |
|
|
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Exchange Loss |
0.000 |
3359.912 |
0.000 |
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|
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TOTAL (B) |
11642.138 |
15033.317 |
7857.268 |
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|
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Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
20178.657 |
17014.511 |
19966.377 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
1061.574 |
850.345 |
968.112 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
19117.083 |
16164.166 |
18998.265 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
4622.615 |
3511.171 |
2843.577 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
14494.468 |
12652.995 |
16154.688 |
|
|
|
|
|
|
|
|
|
Less |
TAX (I) |
6231.023 |
4786.575 |
6585.738 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-I) (J) |
8263.445 |
7866.420 |
9568.950 |
|
KEY RATIOS
|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
PAT / Total Income |
(%) |
25.97
|
24.54
|
34.39 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
50.28
|
39.99
|
59.22 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
96.22
|
74.49
|
76.96 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.56
|
0.45
|
0.68 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
0.66
|
0.47
|
0.74 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
0.84
|
1.26
|
1.16 |
LOCAL AGENCY FURTHER INFORMATION
DETAILS OF SUNDRY
CREDITORS
(Rs.
In Millions)
|
Particulars |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
Sundry Creditors |
|
|
|
|
Micro, Small and Medium Enterprises |
0.000
|
0.000
|
0.000
|
|
Others |
10423.452
|
12330.855
|
6395.077
|
Background
regarding Indian operations
BG Exploration and
Production India Limited (formerly known as Enron Oil and Gas India Limited) (EOGIL)
incorporated in the Cayman Islands with limited liability, is primarily engaged
in the business of prospecting, exploring and producing oil and gas from the
contracted areas. On 14' February 2002, ail the shares of EOGIL were acquired
by BG Mumbai Holdings Limited, subsequent to which, with effect from 15'
February 2002, the name of EOGIL was changed to BG Exploration and Production
India Limited ('the Company'/ SUBJECT ).
Subject had established a Project Office ('PO') with the approval of the
Reserve Bank of India (‘RBI') [Letter No.EC.BY.PRT 328/7(FC0)/93-94 dated April
22, 19941 for the purpose of carrying out petroleum operations pursuant to the
production sharing contracts for Panna-Mukta and Mid and South Tapti fields. In
continuation of the above approval, subject was granted an extension to
continue the existing
Subject uses Its
existing
Subject has also
entered into Farm in agreement in respect of Contract Area MN-DWN-200212 and
Contract Area KG-DWN-9814. The Government of India (GOI, MOP and NG) approved
the assignment of the Participating interest. subject has met the requirements
under the GO1 approval document and has submitted to the Directorate General of
Hydrocarbons (DGH) the PSC Addendum and the Bank Guarantee required for the
Financial Year 2009-10. GO1 endorsement of the PSC Addendum is still awaited.
These together
referred to as 'Subject Indian
Operation", a Foreign Company as defined under section 591 of the
Companies Act, 1956. The financials statements of Subject Indian operations are
prepared under Companies Act includes only those Indian Rupee and foreign
currency (converted into Indian Rupee) assets, liabilities, income and
expenditure which relate to the Company's participating Interests in the
contracts agreements and other transactions related to the Indian operations of
the Company mentioned below.
In
Ø PSC dated 22nd
December 1994, amended on January 10, 2005 and the JOAs dated December 22nd,
1994 for Panna/Mukta and Mid and South Tapti oil and gas fields (PIM and T).
Ø PSC dated 2th
March 2007 for Contract Area KG-OSN-200411.
Ø Farm in agreement
dated 18th February 2008 for Contract Area MN-DWN-200212, approved
by MoPNG on 21th November 2008
Ø Farm in agreement
dated 18th February 2008 for Contract Area KG-DWN-199814, approved
by MoPNG on 13th May 2008)
Ø PSC dated 30th
June 2010 for contact Area KG-DWN-2009/1.
The participating
interests of BGEPIL in each of these are as follows:
For Contract Area
Panna-Mukta, Mid and South Tapti
|
Partners |
Participating Interest (%) |
|
Oil and Natural Gas Corporation Limited
(ONGCL) |
40 |
|
Reliance Industries Limited (RIL) |
30 |
|
BGEPIL ( |
30 |
For Contract Area KG-OSN-2004/1
|
Partners |
Participating Interest (%) |
|
Oil and Natural Gas Corporation Limited
(ONGCL) |
55 |
|
BGEPIL ( |
45 |
For Contract Area MN-DWN-2002/2
|
Parties to the Farm In Agreement |
Participating Interest (%) |
|
Oil and Natural Gas Corporation Limited
(ONGCL) |
75 |
|
BGEPIL ( |
25 |
For Contract Area KG-DWN-98/4
|
Parties to the Farm In Agreement |
Participating Interest (%) |
|
Oil and Natural Gas Corporation Limited
(ONGCL) |
55 |
|
Oil India Limited (Oil) |
15 |
|
BGEPIL ( |
30 |
For Contact area
KG-DWN-2009/1
|
Partners |
Participating Interest (%) |
|
BGEPIL (Cayman Island) |
30 |
|
Oil and Natural Gas Corporation Limited
(ONGCL) |
45 |
|
Oil India Limited (Oil) |
15 |
|
Andhra Pradesh Gas Infrastructure
Corporation Private Limited |
10 |
Government of
Contract Area
Panna-Mukta, Mid and South Tapti:
I. The calculation of profit petroleum based on actual costs,
quantities, prices and income (excluding marketing margin charged by the Joint
Venture to recoup costs incurred by the Joint Venture after the delivery point)
for the financial year ended 31% March 2009 has been computed and necessary
adjustment to the profit petroleum has been made, which is not yet agreed between the GO1 and the contractor as
mentioned In Article 14 of the PSC's.
II. Agreement between the Contractor and GO1 regarding adjustments to be
made for sharing of profit petroleum in respect of Panna and Mukta and Tapti
Contract Areas:
Panna-Mukta
1994-1998
Based on audit conducted by the GO1 auditors for Panna-Mukta contract
area and in continuation of earlier communications to and as responded by the
Joint Venture. DGH vide its letter dated Dec 6.2004 instructed the JV to
resolve the audit exceptions raised for the period from December 22, 1994 to
march 31, 1998. The JV by its letter dated June 16, 2005 agreed to three of the
seven exceptions aggregating INR 28,373,748 raised by DGH and adjustments for
the same were made to the cost and profit petroleum calculations in the year
2005-06. During the current year, DGH vide its letter dated May 12, 2009
instructed the JV to incorporate all the audit adjustments from December 22,
1994 to March 31, 1998 and send compliance report to DGH. The JV is in the
process of responding this letter, pending which no further adjustments have
been made to the final cost and profit petroleum calculations. Adjustments, if
any, will be made in the year of resolution of the exceptions.
Panna-Mukta 1998-2002:
Based on audit
conducted by the GO1 auditors for Panna-Mukta contract area for the period
April 1998 to March 2002 , DGH vide its letter dated May 14, 2009 instructed
the JV to incorporate all the audit adjustments from April 1, 1998 to March 31,
2002 and send a compliance report to DGH. The 3V is on the process of
responding this letter, pending which no further adjustments have been made to
the final cost and profit petroleum calculations. Adjustments, if any, will be
made in the year of resolution of the exceptions.
Panna-Mukta 2002-2005:
In accordance with
the provision of PSC, GO1 has carried out the audit for the period April 2002
to March 2005 for Panna-Mukta Contract Area in 2005-06. Details and
explanations have been provided for the observations made in the audit report.
Adjustments, if any, will be made in the year of resolution of the exceptions.
Tapti 1998-2002:
Based on audit
conducted by the GO1 auditors for Tapti contract area, Ministry of Petroleum
and Natural Gas ('MOPNG') vide its letter dated June 14, 2004 communicated
various exceptions for the period from April 1, 1998 to March 31, 2002. The
matter continues to be under further discussion ending which no adjustments
have been made to the final cost and profit petroleum calculations.
Tapti 1998-2002:
In accordance with
the provision of PSC, GOI
has carried out the audit for the period April 2002 to March 2005 for Tapti
Contract Area in 2005-06. Details and explanations have been provided for the
observations made in the audit report. Adjustments, if any, will be made in the
year of resolution of the exceptions.
Panna-Mukta-Tapti cost recovery exceptions upto
2000:
In continuation of earlier communications to and as responded by the
Joint Venture, DGH vide its letter dated May 1, 2006 have requested the IV to
provide suitable explanations and proof of expenditure for items aggregating
Rupees 143.031 millions for Panna-Mukta and Rupees 120.907 millions, for Tapti
in respect of period prior to March 2000. DGH vide its letter dated May 12,
2009 disallowed the above expenses aggregating Rupees 143,031,000 for
Panna-Mukta and instructed the 3V to make necessary adjustments and send a
compliance report to DGH. The JV is in the process of responding this letter,
pending which no adjustments have been made to the final cost and profit
petroleum calculations. Adjustments, if any, will be made in the year of
resolution of the exceptions.
Panna-Mukta-Tapti
2005-2007:
In
accordance with the provision of PSC, GOI has carried out the audit for the
period April 2005 to March 2007 for Panna-Mukta and Tapti Contract Areas in
2008-09. MOPNG had issued the final audit exceptions for the year 2005-06 to
the Contractor In January 2010. JV has responded to the above letter stating
that the audit exceptions have been communicated to the JV after the period of
120 days as stipulated under the PSC hence, these are not in accordance with the
PSC. JV has also provided details and explanations for all the observations
made in the audit report. Response from MOPNG is awaited, pending which no
further adjustments have been made to the final cost and profit petroleum
calculations. Adjustments, if any, will be made in the year of resolution of
the exceptions.
The
Comptroller and Auditor General of India (CAG) of India commenced audit of the
books of account of the PMT JV for the years 2006-07 and 2007-08. As a result
of the audit, an Initial set of observations from the CAG have been received by
the JV. The Management is reviewing the same and an appropriate response to the
same will be provided.
Contingent Liability
Contract Area Panna-Mukta, Mid and South Tapti:
(To the extent of 30%, being the Company's participating interest in the
joint venture - P/M and T)
I. Re-export bonds executed in favor of customs authorities Rupees
Rupees 703.404 Millions (previous year Rupees 643.554, Millions). A liability
for payment of customs duty would arise, if the subject equipment and materials
are not re-exported.
II. Claims against the Company not acknowledged as debt Rupees 178.675
Millions (previous year-Rupees 178.675 Millions). This claim has been raised by
Indian Oil Corporation Limited (‘IOCL’)
vide letter dated 9th August, 2005 on account of additional freight
incurred due to the use of small tankers. The Company vide letter reference
PMT-lV/40/2005 dated 6m September, 2005 has disputed the dam by IOCL as being
not consistent with tine PSC and commercial expediency.
iii. Show cause cum demand notice (DCSCN) dated 21st April 2006 for the period January 1,2005 to
March 31,2005 was received from Service Tax Department for Rupees 79,955
(Previous year Rupees 0.079 Millions) rejecting the claim of abatement at 75%
on service tax on transportation costs, which was hitherto considered. The JV
has filed its response citing notification 32/2005 and 1/2006 of the department
in support of its claim.
iv. The Company has received show cause notice reference, F. No. VIII/
10-O2ICOMMW2002 dated March 2002 under Section 28(1) and 124 of the Customs
Act, 1962 of India, from the commissioner of customs, Ahmedabad, Gujarat
demanding Rupees Rupees 1631.008 Millions (previous year- Rupees 1631.008
Millions) towards custom duty, along with interest and penalty as applicable
under Section2 8 AB and Section 114A respectively, of the Customs Act, 1962, of
India, on associated natural gas extracted
from Panna and Mukta fields during the period 8m February 1998 to 31"
October 2001 and natural gas and condensate extracted from Mid and South Tapti
fields during the period 26th June 1997 to 31st October 2001.
The Company has also received a show cause notice reference F. No.
VIII/10-30/COMMR/2002 dated 10th April 2002 under Section 28(1) and 124 of the
Customs Act, 1962 of India, from the Commissioner of Customs, Ahmedabad,
Gujarat in continuation of show cause notice reference F. No. VIII/ 10-
02/COMMR/ZOOZ dated 8th March 2002 demanding Rupees 112.642 Millions (previous
year Rupees 112.642 Millions) towards custom duty, along with interest and
penalty, as applicable, under Section 28AB and Section 114A respectively, of
the Customs Act, 1962, of India, on associated natural gas extracted from Panna
and Mukta fields and natural gas and condensate extracted from Mid and South
Tapti fields during the period 1st November 2001 to 10th February 2002.
As communicated by DGH by their letter dated
October 25, 2002, Institutions have been issued to the Central Board of Excise
and Customs not to take any precipitous action until a final view is taken in
this regard by the Board.
v. Disputed Income Tax Matters aggregating Rupees 567,717,585 (Previous
year- Rupees 909,266,219).
VI. Sales tax authorities raised a claim of Rupees 608.103 Millions
(Previous year Rupees 608.103 Millions) including interest and penalty on
BGEPIL in respect Government of India Profit Petroleum and Transportation and
Processing charges paid to ONGC for financial year 2002-03. subject filed a
writ petition in Ahmedabad High Court. Ad-interim relief was granted by the
high court subject to subject making an Interim payment of Rupees 69.945
Millions (Previous year Rupees 69.945 Millions) before July 6, 2007. Pursuant
to an application made by subject, the Gujarat High Court extended the period
required to make the payment by a further period of 4 weeks. Subsequently,
Subject filed a special leave petition at the Supreme Court against the order
with first hearing on August 3, 2007 and another on August 27, 2007. On April
28, 2008, the Supreme Court dismissed the special leave petition on the ground
that the impugned order was merely an interim order of the High Court of
Gujarat and indicating that subject should
exercise alternative remedies available to it prior to a petition in the
Supreme Court. In June 2008, subject deposited requested amount with the sales
tax authorities.
A further assessment order
was received by BGEPIL on 3rd July 2008 for financial year 2003-04
for Rupees 222,415,115 (Previous Year Rupees 222,415,115). On 4th
September 2008, the High Court granted ad-interim relief to BGEPIL by staying
the recovery of demanded amount under the assessment pending a final decision
and disposal of the petition. The matter on merits will be considered alongside
that of financial year 2002-03.
On 3rd April
2009 an initial assessment order was received by BGEPIL for the financial year
2004-05 which includes sales tax liability of Rupees 896,807,677 (Previous Year
Rupees 896,807,677). As with 2003-04, BGEPIL applied for ad-interlm relief,
which was granted by High Court on 15lh May 2009 by staying recovery
on demanded amount under the assessment, pending a final decision and disposal
of petition. The matter on merits will be considered alongside that of
Financial Years 2002-03 and 200304.
On March 29, 2010 an
initial assessment order was received by BGEPIL for financial year 2005-06
which includes sales tax liability along with interest and penalty of Rupees
157,218,633 (Previous Year Rupees Nil) for GOI Profit Petroleum Invoicing.
BGEPIL has filed a special civil application with the Ahmedabad High Court
against the said order on April 23, 2010. On April 27, 2010, the High Court
granted stay on the demand of the sales tax authorities up to June 14, 2010.
Accordingly, the matter for admission of special civil application is scheduled
to come up for hearing in near future.
vii. On 27 January 2009, the DGH issued a letter to the Joint Venture
demanding additional profit petroleum payments of Rupees 95.697 Millions on the
basis that Panna-Mukta cost recovery limit ("CRL") had been exceeded.
The Joint Venture responded in a letter dated 18 February requesting the DGH to
withdraw their demand as it is not in line with the PSC provisions. The Joint
Venture is in ongoing discussion with DGH on this issue.
Viii. Show cause notices Issued to subject by sales tax department
(Bhavnagar) as a constituent of - P/M and T.
The Company had received re -assessment order dated 10th January 2004
for the financial year 1997-1998 and re-assessment orders dated 3rd January
2004 for the financial years 1998-1999, 1999- 2000, 2000-2001 and 2001-2002. As
per the reassessment order for the financial year 1997-98 passed by Sales Tax Officer,
Bhavnagar, the total amount demanded including interest and penalty is Rupees
74.094 Millions (Previous year Rupees 74.094 Millions). As per the
re-assessment order for the financial years 1998-99, 1999-2000, 2000-2001 and
2001-2002 passed by Assistant Sales tax Commissioner,
Bhavnagar, the total amount demanded including interest and penalty is
Rupees 6951.573 Millions (Previous year Rupees 6951.573 Millions).
Government of Gujarat sales tax department (Bhavnagar) Issued a show
cause notice and reassessment order (including penalty and interest) on the
basis that the PM gas delivery point is onshore and liable for sales tax on
sales value. PMT Joint Venture contends that gas delivery point is offshore at
the T junction on the platform and thus not applicable sales tax.
The Company filed an appeal /stay application dated 20th January 2004
with Assistant Commissioner of Sales Tax, Bhavnagar for financial year 1997-98
and with Deputy Commissioner of Sales Tax, Rajkot for Financial years 1998-99
to 2001-02. The Sales Tax Department, Bhavnagar vide its order dated 10th
February 2004 attached the Company's bank account with SBI, Bhavnagar and
issued a Garnishee Order to GAIL, Delhi for sales tax recovery.
The Company has filed a writ petition no. 2084 of 2004 dated 17th
February 2004 with High Court, Ahmedabad. High Court, Ahmedabad while hearing
on the petition issued an Ad-interim order dated 24th February 2004 instructing
GAIL to pay Rupees 174,500,000 (Previous year Rupees 174,500,000) to Sales Tax
Department towards sales tax liability of the Company. GAIL paid the said
amount to sales tax department and deducted it out of the sale proceeds of the
Company. The entire amount of Rupees 174,500,000 (Previous year Rupees
174,500,000) is disclosed as receivable from GAIL Further, the Company, by an
affidavit dated 24th February, 2004 to Ahmedabad High Court, has under taken
not to dispose any portion of producing properties until the petition on the
sales tax matter is resolved.
The High Court, Ahmedabad vide its order dated 29th April 2004
instructed the Company to pay deference of arrears of sales tax at the rate of
4% for the period 1997-98 to 2001-02 and arrears of sales tax at the rate of 4%
for the period 2002-03 to 2003-04 along with interest thereon at the rate of
18% aggregating Rupees 292.457 Millions (Previous year Rupees 292.457 Millions)
(including interest aggregating Rupees 138.895 Millions (Previous year Rupees
138.895 Millions) by 319 May 2004. The Company has paid the said amount of Rupees
466.957 Millions (Rupees 174.500 Millions and Rupees 292.457 Millions) for the
period 1998 - 2004 and Rupees 75.805 Millions (Previous year Rupees 75.805
Millions) for 2004-05 to sales tax department in accordance with the order of
the High Court, Ahmedabad.
The High Court, Ahmedabad further directed that the Company shall pay
current sales tax as and when the same falls due under the provisions of
Gujarat Sales tax Act, 1969 and the Central Sales tax Act, 1956. Final decision
of the High Court, Ahmedabad on the petition is still pending. Hearing on the
said petition based on merits of the case will take place in near future.
Based on the legal opinion dated May 25, 2004, obtained from the
solicitors and advocates of the Company, no provision for doubtful debts
aggregating Rupees 542.763 Millions (including interest aggregating Rupees
138.895 Millions) has been made in the books of accounts as the same is
recoverable from GOI's nominee (GAIL) or Gujarat sales tax department.
Contract Area KG-OSN-2004/1:
The Company has provided
Bank Guarantee in favor of Secretary of Government of India, Ministry of
Petroleum and Natural Gas, New Delhi amounting to Rupees 507.350 Millions
{Previous Year – Rupees 965.089 Millions being the Company's participating
interest share of Total estimated annual expenditure in respect of minimum work
program to be undertaken by the Contractor for Financial Year 2010-11.
Contract Area
MN-DWN-2002/2:
The Company has provided
Bank Guarantee in favor of Secretary of Government of India, Ministry of
Petroleum and Natural Gas, New Delhi amounting to Rupees 206.021 Millions
(Previous Year – Rupees 156-146 Millions being the Company's participating
interest share of Total estimated annual expenditure In respect of minimum work
program to be undertaken by the Contractor for Financial Year 2010-11
Contract Area KG-DWN-98/4:
xl. The Company has
provided Bank Guarantee in favor of Secretary of Government of India, Ministry
of Petroleum and Natural Gas, New Delhi amounting to Rupees 176.063 Millions
valid up to 31* March 2010 (Previous Year - Rupees 198.737 Millions) being the
Company's participating interest share of Total estimated annual expenditure in
respect of minimum work program to be undertaken by the Contractor for
Financial Year 2009-10.
The Production Sharing
Contract (PSC) for Block KG DWN 98/4 was executed by the Government of India
(GOI) and ONGC on 12th April 2000. In order to carry out the exploration
programme, a petroleum exploration license ("PEL") was issued on 19m
May 2000 for a period of 8 years. The term of this exploration period expired
without any commercial discovery on 18th May 2008. At the time,
there was no further extension of the term of the PEL or the PSC by the GOI.
ONGC met all minimum work programme commitments including two Wells but found
no hydrocarbons. Thereafter, an additional work programme of one exploration
well was also approved by GOI to be drilled in Phase III of the exploration
period.
BG executed the Farm-Out
Agreement (FOA) on 18th February 2008. Under the FOA, ONGC agreed to assign to
BG EPIL 30% of its PI share in the Block. The GOI of India approved the
assignment to BG EPIL on 13th May 2008, five days before the expiry of the PSC.
The PSC amendment has however not been executed. While time remaining on the
licence was recognised to be short, the FOA was predicated on the PSC being
extended under the extant New Extension Policy (until 18* May 2009) and further
if required under the then Imminent Rig Moratorium Policy (RMP). Under the FOA,
BG EPIL has agreed to:-
Pay its PI share of costs
and expenses In relation to the Block with effect from the date of the FOA;
and
Carry ONGC for its
Participating Interest share of forward exploration cost, up to a maximum of
Rupees 688,799,482.
ONGC spudded the well under
the additional work programme on 25th January 2010. BG was not party to the
decision to drill and as it believed the Production Sharing Contract (PSC) to
have terminated in the absence of the Rig Moratorium Policy (RMP). Under the
FOA, BG was exposed to both its share of the cost of the proposed well (Rupees
688.799 Millions based on actual) and carry cost of up to Rupees 688.799
Millions. BGEPIL notified ONGC, OIL and GOI that in February 2010 that as a
consequence of the PSC termination on 18th May 2008, tt has no remaining
obligations in respect of the Block and that it considers Its Involvement in
the Block to be at an end.
Subsequently, the RMP was
approved by the GOI in July 2010 and notified in August 2010 retrospectively,
effective January 01, 2008 for a period of three years.
Under the RMP, the PSC for
block KG DWN 98/4 is extended retrospectively until March 2010, to cover the
period when the additional committed well was drilled. Therefore, irrespective
of BG's intention to not participate in the well, there may be a potential
contingent liability to the extent of Rupees 688.799 Millions cany of ONGC PI
costs (comprised Rupees 89,220,743 on pre-existing work accrued up to September
2009, which has been accrued by BGEPIL and Rupees 599,578,739 associated with
the well drilled from January to March 2010).
Contract Areas
KG-DWN-2009/1:
xii. After the balance
sheet date, the Company has provided Bank Guarantee in favor of Secretary of
Government of India, Ministry of Petroleum and Natural Gas, New Delhi amounting
to Rupees 1.025 Millions (Previous Year - Rupees Nil) being the BGEPIL's
participating interest share of Total estimated annual expenditure in respect
of minimum work program to be undertaken by the Contractor for initial or subsequent
exploration period of four years.
(The exchange rate used for
conversion, based on the State Bank of India selling rate as at 31st March 2010 is 1$=INR 45.58 (Previous Year -
1$=INR 51.45))
FIXED ASSETS:
Tangible Assets:
Ø Unproved Property acquisition cost
Ø Leasehold Improvements
Ø Furniture and Fixtures
Ø Office Equipments
Ø Computer Equipments
Ø Motor Vehicles
Intangible Assets:
Ø Computer Software (SAP)
Ø Documentum Software
Ø Support Computer Software
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals have
been formally charged or convicted by a competent governmental authority for
any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.45.03 |
|
|
1 |
Rs.74.43 |
|
Euro |
1 |
Rs.64.75 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
5 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
NO |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
52 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.