MIRA
INFORM REPORT
REVISED REPORT
|
Report Date : |
12.04.2012 |
IDENTIFICATION DETAILS
|
Name : |
GREAT OFFSHORE LIMITED |
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Registered
Office : |
Energy House, 81, |
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Country : |
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Financials (as
on) : |
31.03.2011 |
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Date of
Incorporation : |
14.07.2005 |
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Com. Reg. No.: |
11-154793 |
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Capital
Investment / Paid-up Capital : |
Rs.372.300 millions
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CIN No.: [Company Identification
No.] |
L11200MH2005PLC154793 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
MUMG11095A |
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Legal Form : |
Public Limited Liability Company. The Company’s Share are Listed on Stock
Exchanges. |
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Line of Business
: |
Providing Offshore Support Solutions to the Exploration and Production
Industry. |
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No. of Employees
: |
Around 1900 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
B (29) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
||
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Maximum Credit Limit : |
USD 45484000 |
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Status : |
Moderate |
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Payment Behaviour : |
Unknown |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having moderate track. Trade
relations are reported as fair. Business is active. Payments are Unknown. The company can be considered for business dealings with some
caution. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
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|
A1 |
A1 |
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Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
|
Registered Office : |
Energy House, 81, |
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Tel. No.: |
91-22-66352222/ 22677373/ 7474 |
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Fax No.: |
91-22-22673993/ 22673639 |
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E-Mail : |
For business development queries: bdmoff@greatoffshore.com For careers: jobs@greatoffshore.com |
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Website : |
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International Office 1 : |
United Arab Emirate Representative Office, P.O. Box 2756, Al Khaleej Centre, Office No.613, Mankhool Road, Bur Dubai, Dubai, U.A.E. |
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E-Mail : |
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International Office 2 : |
Malaysia Level 36, Menara Citibank, 165, Jalan Ampang, 50450 Kuala Lumpur, Malaysia |
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Tel. No.: |
+603 2169 6256 |
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Fax No.: |
+603 2169 6258 |
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E-Mail : |
DIRECTORS
As on 31.03.2011
|
Name : |
Mr. Keki M. Elavia |
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Designation : |
Chairman |
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Name : |
Mr. Kaushal Raj Sachar |
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Designation : |
Deputy Chairman |
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Name : |
Mr. Vijay Kumar |
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Designation : |
Executive Director |
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Name : |
Mr. Prakash Chandra Kapoor |
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Designation : |
Executive Director |
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Name : |
Mr. Soli C. Engineer |
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Designation : |
Executive Director |
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Name : |
Dr. Ram Nath Sharma |
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Designation : |
Director |
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Name : |
Mr. Vinesh Davda |
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Designation : |
Director |
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Name : |
Mr. Chandan Bhattacharya |
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Designation : |
Director |
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Name : |
Lt. Gen. Deepak Summanwar |
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Designation : |
Director |
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Name : |
Mr. Kaiwan Kalyaniwalla |
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Designation : |
Director |
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Name : |
Mr. Chetan D. Mehra |
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Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Suresh Savaliya |
|
Designation : |
Company Secretary and Chief Compliance
Officer |
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|
|
|
Name : |
Shrirang V. Khadilkar |
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Designation : |
General Manager - Corporate Accounts, Taxation and Information
Technology |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.12.2011
|
Category of Shareholders |
No. of Shares |
Percentage of Holding |
|
(A) Shareholding of Promoter and Promoter Group |
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18,514,352 |
49.74 |
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18,514,352 |
49.74 |
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Total shareholding of Promoter and Promoter Group (A) |
18,514,352 |
49.74 |
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(B) Public Shareholding |
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|
300,721 |
0.81 |
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|
59,461 |
0.16 |
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|
531,296 |
1.43 |
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3,206,364 |
8.61 |
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4,097,842 |
11.01 |
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3,154,603 |
8.48 |
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9,858,067 |
26.48 |
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1,587,824 |
4.27 |
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|
9,283 |
0.02 |
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8,977 |
0.02 |
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|
306 |
- |
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14,609,777 |
39.25 |
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Total Public shareholding (B) |
18,707,619 |
50.26 |
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Total (A)+(B) |
37,221,971 |
100.00 |
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(C) Shares held by Custodians and against which Depository Receipts have
been issued |
- |
- |
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|
- |
- |
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|
9,990 |
- |
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|
9,990 |
- |
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Total (A)+(B)+(C) |
37,231,961 |
- |
BUSINESS DETAILS
|
Line of Business : |
Providing Offshore Support Solutions to the Exploration and Production
Industry. |
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Products/ Services : |
Offshore |
GENERAL INFORMATION
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No. of Employees : |
Around 1900 (Approximately) |
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Bankers : |
v
ABN AMRO Bank, v
Bank of v
State Bank of v
ABN AMRO Bank, v
ABN AMRO Bank, |
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Facilities : |
Notes: The Company has
7.25% Unsecured Foreign Currency Convertible Bonds (FCCB) (due 2012) of US$
100,000 each aggregating to US $ 40,000,000, listed on the Singapore Exchange
Securities Trading Limited (SGX-ST). The Bondholders may, as per the terms,
convert the Bonds in whole or in part from time to time, at their option,
during the period commencing 11th October, 2007 to 28th
September, 2012. The Company had
revised pricing of Foreign Currency Convertible Bonds (FCCB’s) in accordance
with the new pricing norms such that each FCCB of face value USD 100,000 will
convert to 7964 equity shares of the company as against the original proposal
of each FCCB converting into 4550.86 equity shares. This will imply a
conversion price of Rs.565 per equity share as against the original
conversion price of Rs.875 per share. (USD 1 = Rs.45, Original Rate USD 1 = 39.82).
The necessary approvals from the bondholders and Reserve Bank of As per the
Mandatory Conversion Right embedded in the offer document, the Company has
the option to convert the entire outstanding bonds on the terms and
conditions agreed upon. In the event, the Bonds are not repurchased and
cancelled; or converted; the Company will redeem the Bonds on the Maturity
Date. |
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Banking
Relations : |
-- |
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Statutory
Auditors : |
Kalyaniwalla and Mistry Chartered Accountants |
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Internal
Auditors : |
Ashok Kapadia and Company Chartered Accountants |
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Subsidiary Companies : |
v
Great Offshore v
Deep Water Services ( v
KEI – RSOS Maritime Limited v
Rajamahendri Shipping and Oil Field Services
Limited v
Great Offshore (International) Limited v
Great Offshore Ship Repairs Limited v
Glory Shipping Private Limited v
Great Offshore v
SGB EMSSUN Gmbh and Company v
SGB EMSSKY Gmbh and Company |
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Joint Venture : |
v
United Helicharters Private Limited |
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Enterprises over
which Key Management Personnel Exercise Significant Influence : |
v
Allcargo Global Logistic Limited v
Bharati Shipyard Limited v
Indian National Shipowners Association v
Indian Register of Shipping v
Weizmann Forex Limited |
CAPITAL STRUCTURE
As on 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
100000000 |
Equity Shares |
Rs.10/- each |
Rs.1000.000 millions |
|
1000000 |
Preference
Shares |
Rs.1000/- each |
Rs.1000.000 millions |
|
|
Total |
|
Rs.2000.000
millions |
Issued Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
37313594 |
Equity Shares |
Rs.10/- each |
Rs.373.100 millions
|
|
|
|
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|
Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
37231961 |
Equity Shares |
Rs.10/- each |
Rs.372.300
millions |
|
|
|
|
|
Notes:
1. 38,068,481 Equity
Shares are allotted as fully paid up pursuant to a scheme of arrangement
without payment being received in cash.
2. Paid-up Equity
Share Capital is net of Calls in Arrears Rs.0.008 million.
3. The company has
on October 31, 2009 allotted 91017 Equity shares of Rs.10/- each at a premium
of Rs.865/- per share on part conversion of FCCBs aggregating to USD 2,000,000.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
372.300 |
372.300 |
371.400 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
10998.700 |
9922.800 |
6554.900 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
11371.000 |
10295.100 |
6926.300 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
26404.400 |
20238.000 |
17195.200 |
|
|
2] Unsecured Loans |
2734.000 |
2916.700 |
2238.300 |
|
|
TOTAL BORROWING |
29138.400 |
23154.700 |
19433.500 |
|
|
DEFERRED TAX LIABILITIES |
90.500 |
24.900 |
0.000 |
|
|
|
|
|
|
|
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TOTAL |
40599.900 |
33474.700 |
26359.800 |
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APPLICATION OF FUNDS |
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|
|
|
|
|
|
|
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FIXED ASSETS [Net Block] |
17643.400 |
17834.600 |
13756.900 |
|
|
Capital work-in-progress |
12187.300 |
11629.900 |
8182.800 |
|
|
|
|
|
|
|
|
INVESTMENT |
1465.200 |
1464.700 |
1464.700 |
|
|
DEFERRED TAX ASSETS |
0.000 |
0.000 |
69.100 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
642.100
|
96.100 |
53.000 |
|
|
Sundry Debtors |
2287.000
|
2502.100 |
2472.900 |
|
|
Cash & Bank Balances |
1526.000
|
461.900 |
2200.400 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
9085.600
|
1622.400 |
744.100 |
|
Total
Current Assets |
13540.700
|
4682.500 |
5470.400 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
1064.700 |
1455.900 |
1914.000 |
|
|
Other Current Liabilities |
3078.900
|
588.000 |
509.900 |
|
|
Provisions |
93.100
|
93.100 |
160.200 |
|
Total
Current Liabilities |
4236.700
|
2137.000 |
2584.100 |
|
|
Net Current Assets |
9304.000
|
2545.500 |
2886.300 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
40599.900 |
33474.700 |
26359.800 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income from Operations |
8455.300 |
10074.000 |
8951.600 |
|
|
|
Other Income |
171.400 |
60.900 |
576.600 |
|
|
|
TOTAL (A) |
8626.700 |
10134.900 |
9528.200 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Operating Expenses |
4155.100 |
4766.000 |
4494.100 |
|
|
|
Administration and Other Expenses |
794.600 |
1036.100 |
786.900 |
|
|
|
Exceptional Item |
(558.000) |
0.000 |
0.000 |
|
|
|
TOTAL (B) |
4391.700 |
5802.100 |
5281.000 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
4235.000 |
4332.800 |
4247.200 |
|
|
|
|
|
|
|
|
|
Less |
INTEREST &
FINANCIAL EXPENSES (D) |
1308.100 |
1087.900 |
885.600 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
2926.900 |
3244.900 |
3361.600 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
1834.800 |
1322.700 |
1002.600 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
1092.100 |
1922.200 |
2359.000 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
75.100 |
176.000 |
248.000 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
1017.000 |
1746.200 |
2111.000 |
|
|
|
|
|
|
|
|
|
Less |
Transfer to
Tonnage Tax Reserve Account under section 115VT of the Income-tax Act,1961 |
250.000 |
400.000 |
400.000 |
|
|
Add |
Write back of
Proposed dividend on shares bought back |
-- |
-- |
4.400 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS YEARS’
BALANCE BROUGHT FORWARD |
2429.100 |
1376.000 |
1686.800 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
110.000 |
200.000 |
250.000 |
|
|
|
Proposed Final Dividend on Equity Shares |
93.100 |
93.100 |
92.800 |
|
|
|
Transfer to Capital Redemption Reserve |
-- |
-- |
1509.800 |
|
|
|
Preference Shares Dividend |
-- |
-- |
134.900 |
|
|
|
Tax on Dividends |
-- |
-- |
38.700 |
|
|
BALANCE CARRIED
TO THE B/S |
2993.000 |
2429.100 |
1376.000 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
|
|
|
|
|
|
- Basic earnings per share before
exceptional items (in Rs.) |
12.33 |
46.97 |
52.20 |
|
|
|
- Basic earnings per share after exceptional
items (in Rs.) |
27.32 |
46.97 |
52.20 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2011 |
30.09.2011 |
31.12.2011 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Net Sales |
2338.100 |
2006.300 |
2109.600 |
|
Total Expenditure |
1127.500 |
1132.300 |
1232.900 |
|
PBIDT (Excl OI) |
1210.600 |
874.000 |
876.700 |
|
Other Income |
480.900 |
96.100 |
195.500 |
|
Operating Profit |
1691.500 |
970.100 |
1072.200 |
|
Interest |
337.200 |
446.100 |
481.200 |
|
PBDT |
1354.300 |
524.000 |
591.000 |
|
Depreciation |
425.300 |
428.0000 |
433.500 |
|
Profit Before Tax |
929.000 |
96.000 |
157.500 |
|
Tax |
380.000 |
31.100 |
74.600 |
|
Profit After Tax |
549.000 |
64.900 |
82.900 |
|
Net Profit |
549.000 |
64.900 |
82.900 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
11.79
|
17.23 |
22.16 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
12.92
|
19.08 |
26.35 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
3.50
|
8.54 |
12.27 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.10
|
0.19 |
0.34 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
2.94
|
2.46 |
3.18 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
3.20
|
2.19 |
2.12 |
LOCAL AGENCY FURTHER INFORMATION
IMPORTANT NOTE:
Prabhudas Lilladher
has come out with its earning estimates on Offshore, Ports and Shipbuilding
sector for the quarter ended September 2011. According to the research
firm, Great
Offshore September quarter net sales are expected to go up by
4.6% at Rs 2105.000 Millions, year-on-year, (YoY) basis.
The company's net profit is expected to go down 51.9% at Rs 1350.000 Millions
on YoY basis.
MUMBAI: Indian lenders are set to restructure loans close to Rs 3,9000.000
Millions of Bharati Shipyard, the country's second-largest private shipyard
which has been weighed down by mounting debt after its acquisition of Great
Offshore two years ago and a dismal order book position.
Banks led by the State Bank of India referred
the company to the corporate debt restructuring forum where lenders and
borrowers agree to restructure the terms of a loan to prevent the loan from
being classified as a bad loan. Bharati's balance sheet shows that the company had
outstanding loans of Rs 3,8840.000 Millions at the end of March 2011.
Bharati
Shipyard or BSL, set up by PC Kapoor and Vijay
Kumar in 1976, was engaged in a bitter corporate battle with
the country's biggest private shipyard, ABG shipyard, over a controlling stake
in Great Offshore promoted by Vijay Sheth.
In 2009, BSL expressed
its interest in acquiring a controlling stake in Great Offshore through an open
offer after Vijay
Sheth pledged his stake of 14.89% with BSL. ABG made a counter
offer to acquire 33% at a higher price which prompted BSL to mount a counter
offer. The company finally bought a controlling stake in Great Offshore by
paying over Rs 1,0000.000 Millions.
For BSL, the acquisition of Great Offshore led to an escalation of its debt by
Rs 1,3000.000 Millions, according to analysts tracking the company. The
promoters have pledged 20 % of their stake with lenders.
"The acquisition of Great Offshore was the sole reason for the mounting
debt of BSL. This is a case of a small fish trying to eat a bigger fish",
said an analyst with a leading brokerage. According to a recent report of ICICI
securities, BSL has orders which can last for just a quarter.
In November this year, the Foreign Investment Promotion Board or FIPB had
rejected BSL's proposal for infusion of foreign equity to bid for defence
contracts, which may have come as a big blow.
"BSL's core business is under pressure... Given the high debts on their
books and lower cash flow, we are worried that it could lead to a debt
trap," said a Mumbai-based analyst, requesting anonymity.
In January 2011, rating agency Care had downgraded the outstanding long term
loans of BSL, saying it took into account deterioration in BSL's capital
structure due to substantial debt-funded expansion which also led to higher
interest expense and consequent pressure on profitability and interest coverage
parameters.
FINANCIAL RESULTS
During the
financial year 2010-11, the Company (on a standalone basis) recorded a total
income of Rs.8626.700 millions, and earned a PBIDT of Rs.4235.000 millions.
The financial year
has been extremely challenging with two major assets - the rigs being non
operational for part of the financial year. Apart from this few older vessels
in the offshore logistic fleet suffered reduced utilisation coupled with soft
freight rates of the spot markets.
While Kedarnath
was under refurbishment prior to its commencement of the new charter, Badrinath
worked for a part of Q3 FY 2010-11 on completion of its earlier charter. Few of
the offshore logistics fleet witnessed a soft spot market due to global
overhang in vessel supply. However, though there was a comparative increase in
revenues from execution of Engineering Projects, it was unable to supplement
the drop in charter revenues from asset deployments.
This lead to a
decline in total income of around 15% apart from a decline in Profit After Tax
by around 42%. While the Operating Profit at Rs.3505.600 millions showed a
decline of around 18% from the earlier levels of Rs.4271.900 millions, the
operating margin declined partially from around 42% in previous year to around
41% in the year.
With increase in
fleet size, in the year employee cost increased around 10% but subdued charter
rates did not reflect in rise in earnings. This has also reflected in increase
in depreciation by around 39% and also rise in interest costs due to increase
in the outstanding loans availed for financing capex, investments as well as
drydocking expenses and for routine capex.
SUBSIDIARIES’ OPERATIONS
The financial performance highlights of major subsidiaries of the
Company are enumerated.
Domestic
Subsidiaries
Deep Water
Services (
During the financial year 2010-11, Rig ‘Badrinath’ owned by the company
was chartered out to ONGC and is under completion of its earlier 3 year charter
operating on the west coast of
KEI-RSOS Maritime
Limited
The Company owns
diverse assets and has been serving customers primarily on the East coast of
Rajamahendri
Shipping and Oil Field Services Limited
Tug Josh operated
for RIL FPSO operations assisting the pull back Tug. During the financial year
2010-11, the Company earned a total revenue of Rs.7.904 millions (previous
year: Rs.23.561 millions) and incurred a loss of Rs.13.525 millions (previous
year profit: Rs.5.882 millions).
Great Offshore
Ship Repairs Limited
The Company was
incorporated on June 10, 2010 with the objective of carrying out in–house
repairs and to support the operations of subject. This being the first
financial year since incorporation, it has incurred a loss of Rs.7.357 millions
for the period ended March 31, 2011.
Foreign
Subsidiaries
Great Offshore
(International) Limited
During the year,
Great Offshore (International) Limited, a wholly owned subsidiary of the
Company, acquired 100% equity interest in Glory Shipping Private Limited , UAE
through a cash out deal at par. This company was acquired with the purpose of
carrying out business operations in the
Glory Shipping
Private Limited, UAE incorporated a wholly owned subsidiary, Great Offshore
Germany GmbH,
The Company has
been evaluating various business opportunities in the
During the
financial year 2010-11, the Company incurred a loss of USD 1,959,706 against
loss of USD 2,691,148 of previous year. The loss was mainly due to the
administration and other expenses.
Great Offshore
During the financial
year 2010-11, the Company incurred a loss of USD 14,123 against loss of USD
13,440 of previous year. The loss was mainly due to the administration and
other expenses.
MANAGEMENT
DISCUSSION AND ANALYSIS
In CY 2010 global
oil demand grew by 3.4% registering highest growth over 3 decades. Of this,
around 40% was attributable to Asian economies of
Global Hydrocarbon
Scenario
Oil and Gas being
fossil fuels with finite source; consistency of future supply depends on the
level of exploitation and future replenishment of potential reserves. Reserve
accretion is an intrinsic business objective of every sovereign which gets
translated to the level of individual exploration and production (E and P)
Companies. With demand for twin hydrocarbon on the rise, search for hydrocarbon
in unexplored areas and tapping of unconventional energy has taken centre
stage.
World is
reconciled to the fact that new hydrocarbon discoveries will not be easily
accessible, as they would be further from shore and deeper as well, thereby
challenging. This would result in huge costs of exploration and hence
production. Thus use of sophisticated technology, high end vessels and more
capital commitment is imperative for the sector.
High commodity
prices and a perpetually increasing global demand for energy have created
conducive environment for oil and gas exploration and production sector to
consider capital expenditure followed by spending on operations. Though,
historically, the E and P market has experienced relative underinvestment,
comparative to momentum in oil price and demand, growing global energy demand
continues to exert pressure on hydrocarbon supply. New capital is expected to
fund newer oil and gas finds, and hence is expected to boost production.
Exploration and
Production (E and P) Sector
The economic
debacle of 2008 coupled with Global political developments have resulted in
continuing rise in oil prices exerting pressure on economic growth.
Academically, consistent rise in oil prices and increasing demand reflects a
mismatch situation of supply over demand; hence conducive for E and P
activities – budgets, revamping up of activity etc. However, in October 2010,
ban on certain drilling activities in the GOM by the US Government called for
the need to institutionalize safety requirements relating to work place safety
and safety of environment. Adherence of the same by OEMs, yards, suppliers,
contractors , asset operators and all other stakeholders under regulatory
supervision will pose additional challenges in future both operationally for
existing assets as well as for future new builds.
However with geo
political uncertainties still around there has been restrictive declaration of
E and P budgets and hence comparative subdued activity witnessed by the
offshore sector. While on one hand non declaration of E and P budget / plans by
exploration companies globally have failed to provide market for vessel
deployment, increase in supply from yard deliveries together with presence of
existing assets have created a situation of supply overhang thereby resulting
in soft spot charter rates.
Cost of extracting
hydrocarbon in the offshore segment is getting expensive as oil exploration and
extraction is moving to deeper oceans and in harsher environment, OIL SECURITY
is getting crucial for every sovereign and a burning issue for energy intensive
economies of the eastern hemisphere. Shift in oil consumption pattern, future
trade requirements from demand growth areas viz. Non OECD countries have been
few of the main factors influencing the supply demand dynamics. These
developments triggered the oil price increase and its volatility and sustenance
over a longer period of time.
As per World Bank
Report, global economy is on a growth track albeit slower but certainly
sustainable. Global GDP growth which was around 3.9% in CY 2010 is expected to
be around 3.3% in CY 2011 and expected to rise to around 3.6% in CY 2012.
Global energy
consumption is expected to grow at around 1.7% per annum over the next few
decades. Though the growth percentage has tapered down in absolute terms the
consumption is expected to rise with Non OECD economies expected to grow at
around 2.5% per annum accounting for over 90% of global energy growth.
According to the
Energy Information Administration (EIA), oil supplies have been higher during
the early part of CY 2011 than the corresponding period in the previous year.
The demand scenario too, has been more or less imitating the supply curve. The
rise in demand during CY 2010 was driven mostly by the Non-OECD countries;
increasing by 5.8% from 39.5 mbpd in the CY 2009 to 41.8 mbpd. Among the
non-OECD regions,
OECD demand, despite
contributing close to 52% to the total oil demand, rose to 46.1 mbpd during CY
2010 from 45.4 mbpd the year earlier; a marginal increase of 1.5%. The OECD
demand contributed more than half to the global oil demand during CY 2010, with
a share of 46.1 mbpd against the non-OECD demand of 41.6 mbpd.
Sustained demand
is likely to keep oil prices high in the longer term, which could facilitate
investment commitments in the offshore E and P sector and thereby generate
opportunities to service providers.
IEA estimates upstream spending at around USD 450 billion with global
offshore capex expected to be around US $ 150 billion.
Oil and Natural
Gas Commission (ONGC) the state owned Company and other private sector
companies both domestic and international are participants in the offshore
exploration and production business. ONGC has projected a 15% increase in its
oil production to 29 million tones by 2012-13 (from 25.4 million tones in
2008-09). ONGC has also announced an investment of around US$30 billion over
the period of next decade and plans of accumulating oil and gas to the tune of
20 MMT only through overseas assets. ONCG is envisaging an investment of around
Rs.68000.000 millions in northern part of the Mumbai High by September 2012 for
an additional 17.35 MMT of oil and around Rs.31000.000 millions by 2012 in the
development of C-Series fields off the Mumbai coast. Other private sector
players have their distinct strategy of investments to be made in the future in
the exploration and production opportunities that they are pursuing under the
NELP allocations.
Business Overview
The Company is
While the primary
focus of the Company has been servicing the needs of a growing Indian offshore
E and P sector, few of its assets have been deployed in international waters as
well. This has helped not only enhance global visibility but also mitigate the
risks of single market exposure. The primary driver of the Company’s business
is E and P activity as the same translates into business opportunities for
service providers in the offshore sector hence asset deployment. The current
fleet of the Company enables to undertake following business activities:
v Offshore Drilling
v Offshore logistics
v Support Offshore
Engineering and Marine Construction
v Provide Port and
Terminal support
v Repair and
maintenance of vessels
The Company’s
earnings depend on the level of offshore activity in the oil and gas
exploration, development and production areas. Thus demand for assets is a
function of activity in the oil and gas industry and expenditure levels that
are directly reflected by the oil prices. Demand for vessels is further
dependent on the level of exploration, development and production activity and
corresponding capex by oil and gas companies both national oil companies and
companies in the private sector. Sustenance of hydrocarbon prices and concern
over oil security also plays a vital role in determining the charter earnings.
Fleet Profile
As on March 31,
2011 the Company’s fleet of 47 assets comprised 3 drilling units, 29 Offshore
Support Vessels, 12 Harbour Tugs, 2 Construction and Accomodation Barges and 1
Floating Dry Dock.
During Q1 FY 2011-12,
the Company sold its Jack Up Drilling Rig Amaranth and hence the current fleet
comprises 46 diverse assets.
Competition
The Company
operates in a globally competitive environment wherein aggregate Indian owned
fleet is inadequate to meet the requirements of E and P activity in
Fleet Acquisition
The Company has on
order two new buildings - a 350 feet 116 Super E Le Tourneau (V351) Jackup Rig
and a Multi Support Vessel (V339). These are being built by Bharati Shipyard
Limited and are due for delivery during December 2011 and December 2012
respectively. As on March 31, 2011 the work in progress amounted to
Rs.12088.200 millions which has been shown towards capitalized cost of the
assets under construction.
Company
Performance
Drilling
The Company owned
3 drilling units – 2 Jack Ups - Kedarnath and Amarnath while a drill barge –
Badrinath. Kedarnath post completion of its earlier charter with ONGC underwent
dry docking, special survey and refurbishment to meet charterers requirements.
The rig commenced its 5 year charter with ONGC on the west coast of
Globally, the
market has currently seen a rise in demand for high-specification Jack-up rigs,
and its demand is expected to increase further. Production of oil through
Enhanced Oil Recovery and Increased Oil Recovery enables exploitation of the
hydrocarbons more cost effectively. The drive for intensifying exploration of
Offshore logistics
The offshore
logistics fleet is relatively old. Further soft spot markets have impacted the
earnings and utilisations were as low as 70% in some cases as compared to 76%
in the previous year. The Company’s dry dock facility, Floating dry dock Great
Offshore FD-1 enabled in shortenening the dry dock slot waiting period as also
in cost reduction which had been an impediment in the earlier years.
The offshore
sector has a long activity life span commencing from seismic activity to
exploration, marine construction, development, production and maintenance and
finally upgradation thereby providing opportunities for asset employment
throughout the activity chain. The assets used for each of these distinctive
activities vary and hence there lies ample opportunities with asset deployment
potential. Moreover with oil getting further from the shore the increased
turnaround time enables in absorbing excess tonnage.
Inspection,
Maintenance and Repairs
The Company’s
designated assets work tirelessly recording utilisation as high as 85% to meet
the requirements of their clients. The two Fire Fighting Support Vessel as well
as the Multi Support Vessel continued to work under their respective charters
with ONGC.
Repair and
Maintenance is an ongoing activity and is far beyond preventive maintenance of
well head platform, process platforms and production platforms. The activity involves
carrying out inspection, repairs and maintenance at regular intervals ensuring
total upkeep with the objective of virtual zero downtime. The assets which
cater to ONGC’s requirements are tuned to work 24x7 on a 365 day services
module.
Engineering
Services
The Company
completed the Barge Bumper Riser Protector–II Project ahead of schedule and was
further awarded the job of fabrication and installation of 4 Riser Protectors.
The Company also bagged the Topside Modification on Wellheads Platforms contract
which entailed carrying out structural modification on 13 well head platforms.
The project completion, spread over two financial years and has been completed
ahead of the schedule during Q1 FY 2011-12. During the year, the Condensate
Spiking System Project at Neelam Complex was also awarded to the Company. The
project spread over 15 months has also been completed within the stipulated
time during Q1 FY 2011-12.
In
The Company
undertakes lump sum turnkey contracts with the scope of work including
pre-engineering survey, detailed design and engineering, procurement, onshore
fabrication, transportation and offshore installation. This is expected to be a
growth area with high potential.
Port and Terminal
Support
Great Offshore’s
current fleet of 12 harbour tugs cater to the requirements of private sector
and public sector ports in
Insurance
The Company has
continuously evaluated the asset market value and taken corrective actions, if
any, on an ongoing basis in maintaining adequate insurance coverage at
commensurate premium ensuring safety of the asset and people on board. The
Company follows a process of operational risk analysis and secures a
comprehensive range of insurances to protect against such risks.
CONTINGENT LIABILITIES:
|
Particulars |
31.03.2011 (Rs. in
millions) |
|
(i) Guarantees
given by banks including performance and bid bonds, counter guaranteed by the
Company. |
916.400 |
|
(ii) Guarantees by bank given on behalf of a subsidiary company. |
-- |
|
(iii) Corporate guarantee given to bank on behalf of a subsidiary |
3951.100 |
|
(iv) Corporate guarantee given to Customs |
58.300 |
|
(v) Claims not acknowledged by Company in respect of: |
|
|
- Customs Duty |
7.000 |
|
- Income Tax matter in appeal |
-- |
|
- Sales tax and Service tax demands on charter hire payments |
27.100 |
|
- Possible obligation in respect of matters under arbitration |
270.000 |
|
(vi) Letters of Credit outstanding |
-- |
UNAUDITED FINANCIAL RESULTS
FOR THE QUARTER ENDED AND NINE MONTHS ENDED DECEMBER, 2011
Rs. In Millions
|
Particulars |
Quarter Ended |
Nine Months
Ended |
|
|
|
30.09.2011 |
31.12.2011 |
31.12.2011 |
|
|
|
|
|
|
1. Income from Operations |
1871.800 |
2013.800 |
6071.500 |
|
2. Profit on sale of Vessels |
0.000 |
191.600 |
670.100 |
|
3. Other Operating Income |
134.500 |
95.800 |
382.500 |
|
4. Total Income (1+2+3) |
2006.300 |
2301.200 |
7124.100 |
|
5. Expenditure |
|
|
|
|
(a) (Increase) in Stock of Spares &
Stores |
139.200 |
41.300 |
142.500 |
|
(b) Employees Cost (shore & floating) |
438.700 |
491.600 |
1444.300 |
|
(c)Repairs & Maintenance Fleet - Rigs |
160.100 |
160.000 |
420.200 |
|
(d) Engineering project Expenses |
21.500 |
0.000 |
93.800 |
|
(e) Depreciation |
428.000 |
433.500 |
1286.800 |
|
(f) Other Expenses |
372.800 |
540.000 |
1391.900 |
|
(g)Total |
1560.300 |
1666.400 |
4779.500 |
|
6. Profit before Other Income, Interest
& Exceptional Items (4-5) |
446.000 |
634.800 |
2344.600 |
|
7. Other Income |
96.100 |
3.900 |
102.400 |
|
8. Profit before Interest & Exceptional
Items (6+7) |
542.100 |
638.700 |
2447.000 |
|
9. Interest (net) |
446.100 |
481.200 |
1264.500 |
|
10. Profit after Interest but before
Exceptional Items (8-9) |
96.000 |
157.500 |
1182.500 |
|
11. Exceptional Item |
0.000 |
0.000 |
0.000 |
|
12. Profit from Ordinary Activities before
Tax |
96.000 |
157.500 |
1182.500 |
|
13. Tax Expenses |
|
|
|
|
- current |
39.100 |
86.600 |
295.700 |
|
- deferred |
(8.000) |
(12.000) |
190.000 |
|
14. Profit from Ordinary Activities after
Tax |
64.900 |
82.900 |
696.800 |
|
15. Extraordinary Items |
0.000 |
0.000 |
0.000 |
|
16. Net Profit for the period |
64.900 |
82.900 |
696.800 |
|
17. Paid up equity share capital (face value
Rs. 10 per share) |
372.300 |
372.300 |
372.300 |
|
18 Reserve excluding revaluation reserve as
per balance sheet of previous accounting year |
|
|
|
|
19. (A) Earning Per Share (EPS) before
Extraordinary Items (not annualized) Basic (Rs.) |
1.74 |
2.23 |
18.72 |
|
19. (B) Earning Per Share (EPS) after
Extraordinary items (not annualized) Basic (Rs.) |
1.74 |
2.23 |
18.72 |
|
20. Public shareholding |
|
|
|
|
- Number of shares |
18717609 |
18717609 |
18717609 |
|
- Percentage of shareholding |
50.27 |
50.27 |
50.27 |
|
21. Promoters and promoter group
Shareholding |
|
|
|
|
(a) Pledged I Encumbered |
|
|
|
|
- Number of shares |
Nil |
Nil |
Nil |
|
- Percentage of shares (as a % Of the total
shareholding of promoter and promoter group) |
Nil |
Nil |
Nil |
|
- Percentage of shares (as a % of the total
share capital of the company) |
Nil |
Nil |
Nil |
|
(b) Non-encumbered |
|
|
|
|
- Number of shares |
18514352 |
18514352 |
18514352 |
|
- Percentage of shares (as a % of the total
shareholding of promoter and promoter group) |
100.00 |
100.00 |
100.00 |
|
- Percentage of shares (as a % of the total
share capital of the company) |
49.73 |
49.73 |
49.73 |
Notes:
1. The above results for the quarter ended 31st
December, 2011 have been reviewed by the Audit Committee and approved by the
Board of Directors at Its meeting held on 14th February 2012.
2. With effect from 1st April 2011,
the company has changed its accounting policy for recognition and measurement
of Mark to Market (MTM) gains / losses in respect of derivatives instruments like
interest rate swaps as per the principals enunciated in Accounting Standard
(AS) 30 “Financial Instruments: Recognition and Measurement” and in accordance
with the recommendation of the Institute of Chartered Accountants of India.
Accordingly Mark to market (MTM) gains /losses in respect of derivatives
instruments like Interest rate swaps have been accounted in accordance with
principal of hedge accounting and the MTM losses on such derivative instruments
is recorded in the Hedge reserve account instead of recognizing the same to
profit and loss account. Accordingly as at 31st December 2011 MTM
loss on outstanding interest rates swaps amounting to Rs.1279.600 millions has
been recognized in hedge reserves instead of debiting the same to profit and
loss account. Accordingly the profit for the quarter is higher by Rs.1215.700
millions.
3. The Company has adopted principles set out
in Accounting Standard (AS) 30 - “Financial Instruments: Recognition and
Measurement” issued by ICAI in respect of Hedge Accounting Policy. Accordingly,
the unrealised exchange gain / loss on revaluation of its foreign currency
borrowings have been designated in the Hedge Reserve Account.
During the current quarter, the net unrealised
exchange loss on foreign currency borrowings aggregating to Rs.860.500 millions
and Mark to Market (MTM) losses of Rs.1279.600 millions has been debited to
Hedge Reserve Account and the total realised exchange gain credited to Profit
& Loss Account amounts to Rs.3.600 millions. The debit balance in Hedge
Reserve Account as on 31st December, 2011 is Rs.3455.300 millions.
4. Earnings per share (Diluted) is ignored,
since the effect of potential equity shares is anti-dilutive.
5. The Company is mainly engaged in offshore
business and there is no separate reportable segment as per Accounting Standard
(AS) 17.
6. The above results of the Company are on a
stand-alone basis.
7. Number of Investor Complaints outstanding
at the beginning of the quarter: Nil, received: 10, resolved: 4 and unresolved
at the end of the quarter: 6.
8. Previous period figures have been
regrouped! recast, wherever necessary to conform to current period
classification.
FIXED ASSETS:
Tangible Assets
v
v
Fleet
v
Plant and Machinery
-
Rigs and Barge
-
Others
v
Ownership Flats and Office Premises
v
Furniture, Fixtures and Office Equipments
v
Vehicles
Intangible Assets
v 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.51.54 |
|
|
1 |
Rs.81.94 |
|
Euro |
1 |
Rs.67.56 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
3 |
|
PAID-UP CAPITAL |
1~10 |
4 |
|
OPERATING SCALE |
1~10 |
3 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
3 |
|
--PROFITABILIRY |
1~10 |
3 |
|
--LIQUIDITY |
1~10 |
3 |
|
--LEVERAGE |
1~10 |
3 |
|
--RESERVES |
1~10 |
4 |
|
--CREDIT LINES |
1~10 |
3 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--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 |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
29 |
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.