MIRA INFORM REPORT

 

 

Report Date :

31.03.2012

 

IDENTIFICATION DETAILS

 

Name :

GLOBAL OFFSHORE SERVICES LIMITED (w.e.f. 11.01.2011)

 

 

Formerly Known As :

GARWARE OFFSHORE SERVICES LIMITED

 

 

Registered Office :

Chander Mukhi, Nariman Point, Mumbai - 400 021, Maharashtra

 

 

Country :

India

 

 

Financials (as on) :

31.03.2011

 

 

Date of Incorporation :

20.09.1976

 

 

Com. Reg. No.:

11-019229

 

 

Capital Investment / Paid-up Capital :

Rs.238.191 millions

 

 

CIN No.:

[Company Identification No.]

L61100MH1976PLC019229

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUMG08393A

 

 

PAN No.:

[Permanent Account No.]

AAACG2204K

 

 

Legal Form :

Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.

 

 

Line of Business :

Providing Offshore Services.

 

 

No. of Employees :

Not Available

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba (52)

 

RATING

STATUS

 

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

USD 11911000

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Correct

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well established company having satisfactory track. Trade relations are reported as fair. Business is active. Payments are reported to be correct 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.

 

ECGC Country Risk Classification List – September 30, 2011

 

Country Name

Previous Rating

(30.06.2011)

Current Rating

(30.09.2011)

India

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

LOCATIONS

 

Registered Office :

Chander Mukhi, Nariman Point, Mumbai - 400 021, Maharashtra, India

Tel. No.:

91-22-22020745/ 22028398

Fax No.:

91-22-22029964/ 22834610

E-Mail :

Company Related: secretarial@globaloffshore.in

Chartering: chartering@globaloffshore.in

Fleet Personnel: fleetpersonnel@globaloffshore.in

Technical/ Operations: techops@globaloffshore.in

Materials (Stores/ Spares): materials@globaloffshore.in

Investor Related: investorredressal@globaloffshore.i

General Information: info@globaloffshore.in

Website :

http://www.globaloffshore.in

 

 

Branch Office 1 :

2nd Floor, A Wing, Swapnabhoomi, S.K. Bole Road, Near Portuguese Church, Dadar (West), Mumbai - 400 023, Maharashtra, India 

Tel. No.:

91-22-24234000

 

 

Branch Office :

Also located at:

 

v      Goa

v      Pondicherry

v      Chennai

 

 

DIRECTORS

 

As on 31.03.2011

 

Name :

Mr. Ashok Garware

Designation :

(Executive Chairman)

Date of Birth/Age :

72 Years

Qualification :

M.A.(Cantab)

Experience :

49 Years

Date of Appointment :

01.07.2007

 

 

Name :

Mr. Aditya Garware

Designation :

Vice Chairman and Managing Director

Date of Birth/Age :

40 Years

Qualification :

M.B.A.(U.S.A.)

Experience :

15 Years

Date of Appointment :

01.02.2009

 

 

Name :

Ms. Maneesha Shah

Designation :

Director

Qualification :

B.Com, L.L.B.

 

 

Name :

S.S. Aggarwal

Designation :

Director

Date of Birth/Age :

30.06.1937

Qualification :

B.Sc. (New York University)

Expertise in Functional Area :

Businessman

Date of Appointment :

19.02.1994

List of Directorships held in other Companies :

v      DBS Corporate Services Private Limited

v      DBS Financial Services Private Limited

v      DBS Internet Services Private Limited

v      Vanvik Leasing Private Limited

v      DBS World Travel Private Limited

v      Coopers Rolers Private Limited

v      J. L. Morison (India) Limited

 

 

Name :

Dr. B.S. Cooper

Designation :

Director

Qualification :

Ph.d. (Engineering) London

 

 

Name :

A.K. Thanavala

Designation :

Director

Qualification :

B.Com. (Hons), L.L.B., A.C.S.

 

 

Name :

J.C. Chopra

Designation :

Director

Date of Birth/Age :

04.03.1931

Qualification :

M.A.

Expertise in Functional Area :

Professional

Date of Appointment :

20.11.2006

List of Directorships held in other Companies :

v      Infogain India Private Limited

v      Eureka Forbes Limited

v      Aditya Birla Chemicals Limited

v      Indian Society of Advertisers

 

 

KEY EXECUTIVES

 

Name :

A.C. Chandarana

Designation :

Company Secretary

Qualification :

B.Com., L.L.B., F.C.S.

 

 

Name :

K.S. Dave

Designation :

President — Commercial

Qualification :

B.Com. L.L.B.

 

 

Name :

S.P. Akolkar

Designation :

President — Finance

Qualification :

M.M.S. (Finance)

 

 

Name :

Capt. D.L. Mathur

Designation :

President — Marketing

Qualification :

Master Foreign Going Shipping Management

 

 

Name :

Capt. S. Sarkango

Designation :

President — Operations

Qualification :

Master Mariner

 

 

Name :

K.K. Aggarwal

Designation :

President — Technical

Qualification :

Marine Engineer

 

 

Name :

Capt. Vipin Baijal

Designation :

Head — (HSSE and Training)

Qualification :

Extra master, M.Sc., WMU, Malmo Sweden

 

 

Name :

P.S. Shah

Designation :

General Manager — Finance and Accounts

Qualification :

B.Com.

 

 

Name :

Z.R. Mehta

Designation :

General Manager — Technical

Qualification :

First Class Engineer (Motor)

 

 

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

 

 

(1) Indian

 

 

Individuals / Hindu Undivided Family

2,189,356

8.94

Bodies Corporate

3,233,723

13.21

Sub Total

5,423,079

22.15

(2) Foreign

 

 

Bodies Corporate

2,564,500

10.47

Sub Total

2,564,500

10.47

Total shareholding of Promoter and Promoter Group (A)

7,987,579

32.62

(B) Public Shareholding

 

 

(1) Institutions

 

 

Mutual Funds / UTI

32,900

0.13

Financial Institutions / Banks

1,576,975

6.44

Central Government / State Government(s)

160

-

Foreign Institutional Investors

60,927

0.25

Sub Total

1,670,962

6.82

(2) Non-Institutions

 

 

Bodies Corporate

1,882,750

7.69

Individuals

 

 

Individual shareholders holding nominal share capital up to Rs.0.100 million

3,606,278

14.73

Individual shareholders holding nominal share capital in excess of Rs.0.100 million

1,391,200

5.68

Any Others (Specify)

7,948,324

32.46

Non Resident Indians

212,499

0.87

Trusts

474,897

1.94

Foreign Corporate Bodies

7,260,928

29.65

Sub Total

14,828,552

60.56

Total Public shareholding (B)

16,499,514

67.38

Total (A)+(B)

24,487,093

100.00

(C) Shares held by Custodians and against which Depository Receipts have been issued

-

-

(1) Promoter and Promoter Group

-

-

(2) Public

-

-

Sub Total

-

-

Total (A)+(B)+(C)

24,487,093

-

 

 

BUSINESS DETAILS

 

Line of Business :

Providing Offshore Services.

 

 

 

GENERAL INFORMATION

 

No. of Employees :

Not Available

 

 

Bankers :

v      State Bank of India

v      DVB Group Merchant Bank (Asia) Limited

v      DnB Nor Bank Asa

v      State Bank of Travancore

v      United Bank of India

 

 

Facilities :

Secured Loans

31.03.2011

Rs. In Millions

31.03.2010

Rs. In Millions

Loans from Banks

 

 

A. Term Loans for Acquisition of Vessels

3185.973

4388.342

B. Other Term Loans

571.244

547.195

C. Car Finance Loans

1.167

2.661

D. Working Capital Facilities

174.232

89.839

Total

3932.616

5028.037

 

Assets offered as securities to banks and financial institution :

A) Term loans for acquisition of vessels

(1) Outstanding loan of US$ 13.47 million from State Bank of India is secured by way of first charge of the vessel acquired.

Amount repayable within a year US$ 1.47 million.

(2) Outstanding loan of US$ 14.06 million from State Bank of India is secured by way of first charge of the vessel acquired.

Amount repayable within a year US$ 1.52 million.

(3) Outstanding loan of US$ 8.17 million from DVB Group Merchant Bank is secured by way of first charge of the vessel acquired.

Amount repayable within a year US$ 0.92 million.

(4) Outstanding loan of US$ 7.71 million from DVB Group Merchant Bank is secured by way of first charge of the vessel acquired.

Amount repayable within a year US$ 0.83 million.

(5) Outstanding loan of US$ 11.46 million from State Bank of India is secured by way of first charge of the vessel acquired.

Amount repayable within a year US$ 0.96 million.

(6) Outstanding loan of US$ 16.39 million from DNB NOR Bank is secured by way of first charge of the vessel acquired.

Amount repayable within a year US$ 1.64 million.

 

B) Other Term Loans

(1) Outstanding Corporate loan of US$ 1.69 million from State Bank of Travancore, is secured by way of second charge on one of the Company’s AHTSV.

Amount repayable within a year US$ 0.93 million.

(2) Outstanding Corporate loan of US$ 1.10 million from State Bank of Travancore, is secured by way of first charge on one of the Company’s AHTSV.

Amount repayable within a year US$ 1.10 million.

(3) Outstanding Corporate loan of US$ 3.87 million from State Bank of Travancore, is secured by way of extension of first charge on one of the Company’s AHTSV, extension of second charge on one of the Company’s AHTSV and extension of second charge on Office premises.

Amount repayable within a year US$ 0.73 million.

(4) Outstanding Corporate loan of US$ 2.22 million from State Bank of Travancore, is secured by way of extension of first charge on one of the Company’s AHTSV, extension of second charge on one of the Company’s AHTSV, extension of second charge on Office premises and exclusive charge on receivables from the operation of one of the Company’s AHTSV.

Amount repayable within a year US$ 0.52 million.

(5) Outstanding Corporate loan of US$ 0.38 million from United Bank of India, which is secured by way of receivables from the operation of one of the Company’s PSV and extension of charge on one of Company’s AHTSV.

Amount repayable within a year US$ 0.38 million.

(6) Outstanding Corporate loan of US$ 1.62 million from United Bank of India, which is secured by way of receivables from the operation of one of the Company’s PSV and extension of charge on one of Company’s AHTSV.

Amount repayable within a year US$ 1.38 million.

(7) Outstanding loan of Rs.53.913 millions from United Bank of India, which is secured by way of charge on the property / office premises acquired as also charge on one of the AHTSV of the Company.

Amount repayable within a year Rs.16.038 millions.

(8) Outstanding loan of Rs.31.253 millions from Ratnakar Bank, which is secured by way of charge on one of the AHTSV of the Company.

Amount repayable within a year Rs.12.500 millions.

 

C) Car Finance Loans

Car loans availed by the Company from ICICI Bank are secured against respective motor cars against which the finances are availed.

Amount repayable within a year Rs.0.903 million.

 

D) Working Capital Facilities

(1) Working Capital Facility from United Bank of India is secured by hypothecation of Book Debts and Tangible Assets such as stocks, stores and spares on board the vessel as also against collateral security by way of first mortgage on one AHTSV of the Company. Part of this facility is now denominated in US$.

(2) Working Capital Facility from State Bank of Travancore is secured by pari passu first charge on all current assets including stores and spares, fuel, oil and book debts (Excluding receivables from two of the Company’s PSV). Part of this facility is now denominated in US$.

 

 

 

Banking Relations :

--

 

 

Auditors :

 

Name :

Raman S. Shah and Associates

Chartered Accountants

Address :

Mumbai, Maharashtra, India

 

 

Subsidiary Companies :

v      Garware Offshore International Services Pte. Limited, Singapore

v      Global Offshore Services B.V., Netherlands

 

 

CAPITAL STRUCTURE

 

As on 27.09.2011

 

Authorised Capital : Rs.350.000 millions

 

Issued, Subscribed & Paid-up Capital : Rs.244.871 millions

 

As on 31.03.2011

 

Authorised Capital :

No. of Shares

Type

Value

Amount

32000000

Equity Shares

Rs.10/- each

Rs.320.000 millions

150000

Cumulative Redeemable Preference Shares

Rs.100/- each

Rs.15.000 millions

150000

Cumulative Convertible Preference Shares

Rs.100/- each

Rs.15.000 millions

 

Total

 

Rs.350.000 millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

23819093

Equity Shares

Rs.10/- each

Rs.238.191 millions

 

 

 

 

 

 

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

238.191

238.191

238.191

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

2739.472

2405.492

2062.354

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

2977.663

2643.683

2300.545

LOAN FUNDS

 

 

 

1] Secured Loans

3932.616

5028.037

6540.974

2] Unsecured Loans

0.000

0.000

0.000

TOTAL BORROWING

3932.616

5028.037

6540.974

DEFERRED TAX LIABILITIES

0.000

0.000

0.000

 

 

 

 

TOTAL

6910.279

7671.720

8841.519

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

5481.514

6822.288

7632.457

Capital work-in-progress / Vessel Under Construction

0.000

176.328

191.681

 

 

 

 

INVESTMENT

157.179

28.902

13.269

Foreign Exchange Hedge Reserve

38.170

37.264

823.161

DEFERRED TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
222.904

191.229

164.996

 

Sundry Debtors
235.888

299.178

328.901

 

Cash & Bank Balances
193.038

82.390

117.982

 

Other Current Assets
0.000

0.000

0.000

 

Loans & Advances
789.335

216.935

105.154

Total Current Assets
1441.165

789.732

717.033

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Sundry Creditors
60.623

54.747

109.407

 

Other Current Liabilities
107.556

98.193

372.449

 

Provisions
39.570

29.854

54.226

Total Current Liabilities
207.749

182.794

536.082

Net Current Assets
1233.416

606.938

180.951

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

6910.279

7671.720

8841.519

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

31.03.2011

31.03.2010

31.03.2009

 

SALES

 

 

 

 

 

Income from operations

 

 

 

 

 

- Charter Hire

1664.926

1814.785

1622.400

 

 

- Other Operating Income

36.757

0.000

10.736

 

 

Other Income

25.181

71.886

22.234

 

 

TOTAL                                     (A)

1726.864

1886.671

1655.370

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Fleet Operating Charges

559.204

586.346

512.499

 

 

Establishment & Other Expenses

184.502

217.621

250.915

 

 

TOTAL                                     (B)

743.706

803.967

763.414

 

 

 

 

 

Less

PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)      (C)

983.158

1082.704

891.956

 

 

 

 

 

Less

INTEREST & FINANCIAL EXPENSES                 (D)

245.644

308.855

254.901

 

 

 

 

 

 

PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                                       (E)

737.514

773.849

637.055

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

343.320

340.917

228.975

 

 

 

 

 

 

PROFIT BEFORE TAX (E-F)                               (G)

394.194

432.932

408.080

 

 

 

 

 

Less

TAX                                                                  (H)

(6.363)

23.043

4.409

 

 

 

 

 

 

PROFIT AFTER TAX (G-H)                                (I)

400.557

409.889

403.671

 

 

 

 

 

 

Less : Prior period Depreciation

0.000

2.721

0.000

 

Less : Transfer to Tonnage Tax Reserve

81.000

100.000

100.000

 

 

 

 

 

Add

PREVIOUS YEARS’ BALANCE BROUGHT FORWARD

646.782

453.644

258.496

 

 

 

 

 

Less

APPROPRIATIONS

 

 

 

 

 

Transfer to General Reserve

50.000

50.000

50.000

 

 

Interim Dividend

45.261

38.111

40.493

 

 

Tax on Interim Dividend

7.472

6.477

6.883

 

 

Proposed Dividend

11.912

16.673

9.528

 

 

Tax on Proposed Dividend

1.932

2.769

1.619

 

BALANCE CARRIED TO THE B/S

849.762

646.782

453.644

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

 

 

 

 

 

Sale of vessel

1176.761

786.916

122.838

 

 

Royalty, Know-how, Professional and Consultation fees

0.000

0.000

1.018

 

 

Other income, indicating the nature thereof [Charter Hire & Freight Earnings]

1576.947

1660.416

1368.305

 

TOTAL EARNINGS

2753.708

2447.332

1492.161

 

 

 

 

 

 

IMPORTS

 

 

 

 

 

Raw Material

N.A.

N.A.

N.A.

 

 

Components & Spare Parts

22.120

40.905

35.367

 

 

Capital Goods (Purchase of Vessels) and advances

0.000

93.315

4348.603

 

 

 

 

 

 

Earnings Per Share (Rs.)

16.82

17.21

16.95

 

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2011

30.09.2011

31.12.2011

Type

1st Quarter

2nd Quarter

3rd Quarter

Net Sales

339.370

321.750

440.980

Total Expenditure

161.160

131.410

202.130

PBIDT (Excl OI)

178.210

190.340

238.850

Other Income

0.710

3.560

7.540

Operating Profit

178.920

193.900

246.390

Interest

44.410

47.080

62.250

Exceptional Items

0.000

0.000

0.000

PBDT

134.510

146.820

184.140

Depreciation

78.600

73.300

82.330

Profit Before Tax

55.910

73.520

101.810

Tax

0.460

1.300

1.080

Provisions and contingencies

0.000

0.000

0.000

Profit After Tax

55.450

72.220

100.730

Extraordinary Items

0.000

0.000

0.000

Prior Period Expenses

0.000

0.000

0.000

Other Adjustments

0.000

0.000

0.000

Net Profit

55.450

72.220

100.730

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2011

31.03.2010

31.03.2009

PAT / Total Income

(%)
23.20

21.73

24.39

 

 
 

 

 

Net Profit Margin

(PBT/Sales)

(%)
23.16

23.86

24.99

 

 
 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)
5.69

5.69

4.89

 

 
 

 

 

Return on Investment (ROI)

(PBT/Networth)

 
0.13

0.16

0.18

 

 
 

 

 

Debt Equity Ratio

(Total Liability/Networth)

 
1.39

1.97

3.08

 

 
 

 

 

Current Ratio

(Current Asset/Current Liability)

 
6.94

4.32

1.34

 

 

LOCAL AGENCY FURTHER INFORMATION

 

FINANCIAL HIGHLIGHTS:

 

Income from Operation (including other operating income) for the year ended on 31.03.2011 stood at Rs.1701.700 millions, as against Rs.1814.800 millions for the previous year. The other Income for the year stood at Rs.25.200 millions aggregating the total income to Rs.1726.900 millions. The reduced operational income was on account of sale of vessel, M.V. Everest in the last quarter of the previous year. Hence, there were no earnings from her for the entire year.

 

The Net Profit for the year ended 31.03.2011 stood at Rs.400.600 millions as against Rs.409.900 millions for the previous year in spite of a reduction of operating income of approx. 5%.

 

The Company continues its efforts to reduce its interest burden by replacing high cost debt with lower cost debt. As a result of this and the regular pay back of debt, interest and finance charges have reduced by approx. 20%.

 

The Company continues to follow Accounting Standard 30 ‘AS-30 Financial Instrument: (Recognition and Measurement)’.

 

OPERATIONS:

 

During the year, the Company sold its second hand Platform Supply Vessel ‘M.V. Mana’. Further the Board of Directors have resolved to sell two of the Company’s AHTSVs., viz., ‘M.V. Garware-I’ and ‘M.V. Garware-V’, in view of their age and since employment prospects for these vessels are reducing.

 

The Company’s wholly owned subsidiary in The Netherlands took delivery of one Large Platform Supply Vessel,

‘M.V. Beaucephalus’ in December, 2010. The vessel has been awarded a contract for 4 year + 4 year (option) in Brazil in May, 2011.

 

The Company’s Platform Supply Vessel, ‘M.V. Kailash’ has recently been awarded a 4 year contract by Petrobras (Brazil).

 

The vessel should commence contract in the latter part of August/early September, 2011, after the required modification as per needs of Petrobras and mobilization is completed.

 

FUTURE OUTLOOK:

 

Price of oil has increased and stabilized during the year. This has led to an increase in E and P activities (with oil at around $85 - $100) and the outlook appears bright on a global basis – in spite of economic problems in Europe and USA. Presently most of the Company’s new vessels (owned and Bareboat) are on long term contracts and they hope that those vessels come off contract in the next 12 months will be redeployed on long term jobs. The Company is actively looking to expanding its fleet in India as well as in The Netherlands subsidiary.

 

CHANGE OF NAME OF THE COMPANY:

 

Pursuant to the Shareholders approval and approval by the Registrar of Companies, Maharashtra, the Company’s name was changed from ‘Garware Offshore Services Limited’ to ‘Global Offshore Services Limited’ w.e.f. 11.01.2011. However, duly signed and sealed fresh incorporation of Certificate upon change of name of the Company was received by the Company on 3rd March, 2011.

 

WHOLLY OWNED SUBSIDIARIES (WOS):

 

During the year, the Company established a Wholly Owned Subsidiary in The Netherlands, viz., Global Offshore Services B.V., (GOSBV). GOSBV has taken delivery of ‘M.V. Beaucephalus’. The vessel is presently working in Brazil with Petrobras, on a 4 year firm contract. Since the vessel commenced this contract only in June, 2011, its performance will only be reflected in the current year.

 

The Company’s subsidiary, viz., Garware Offshore International Services Pte Limited, (GOISPL) in Singapore made a loss during the year, in view of the fact that the Accommodation Work Barge remained unemployed for several months. However, in November, 2010, the Barge has gone on a 5 year contract with Singapore based charterers and is presently located in Nigeria.

 

GOISPL added a Platform Supply Vessel on a Bare Boat basis to its fleet. This Platform Supply Vessel is presently working on a long term contract in the North Sea.

 

MANAGEMENT DISCUSSION AND ANALYSIS ON SELECT FINANCIAL DATA

 

In order to better reflect the truly global presence of the Company – with assets in India, the North Sea, the Far East, West Africa, etc. – the Company’s name was changed from Garware Offshore Services Limited to Global Offshore Services Limited, during the year.

 

During the year, on stand-alone basis, the Operating Income stood at Rs.1701.700 millions as against Rs.1814.800 millions for the previous year ended 2010. This was due to the fact that one old PSV was sold in Jan-10. The Net Profit during the same period was Rs.400.600 millions as against Rs.409.900 millions for the previous year. This was marginally less compared to the reduction in the operating income. Interest expense fell by approximately 20% in view of the regular repayment of debt as also because of the Company’s constant efforts to replace high cost debt with a lower one.

 

The Company owns and operates two types of vessels viz., Platform Supply Vessels (PSV) and Anchor Handling Tug Cum Supply Vessels (AHTSV). During the year, approximately 60% of the operating income was attributed to the PSVs and the balance to the AHTSVs.

 

Presently, 4 AHTSVs and 3 PSVs are on long term contracts.

 

During the year, the Company set up a wholly owned subsidiary in The Netherlands viz., Global Offshore Services B. V. and took delivery of a large Platform Supply Vessel (PSV), named “MV Beaucephalus”. The vessel has commenced work with Petrobras, Brazil on a 4 year + 4 year (option) contract.

 

The Company’s wholly owned subsidiary in Singapore now has 3 vessels on Bareboat Charter. These vessels are – 1 Accommodation Work Barge (AWB) which is on a long term contract in West Africa, 1 PSV which is on a long term contract in the North Sea and 1 AHTSV which is on a short term contract in the Far East.

 

Future Outlook

 

The Indian economy “bounced back” with remarkable rapidity from the slow down caused by the global crises in the past couple of years with growth rates of 8.6 % in 2010 – 11 and 9% expected in 2011 – 12. Since growth is firmly in place, fiscal consolidation is progressing rapidly and monetary policy has reverted focus on moderating inflationary pressures. Efficient and reliable energy supplies are a precondition for accelerated growth of the Indian economy. While the energy needs of the country, especially oil and gas, are going to increase at a rapid rate in the coming decades, the indigenous energy resources are limited. Oil and gas constitute around 45 per cent of total energy consumption. At the same time, the dependence on imports of petroleum and petroleum products continues to be around 80 per cent of total oil consumption in the country.

 

During 2010-11, production of crude oil is estimated at 37.96 million metric tonne (MMT), which is about 12.67% higher than the crude oil production of 33.69 MMT during 2009-10. The projected production for natural gas, including coal bed methane (CBM), for 2010-11 is 53.59 billion cubic metres (BCM) which is 12.80% higher than the production of 47.51 BCM in 2009-10. The increase in natural gas production is primarily from deep water blocks.

 

India has an estimated sedimentary area of 3.14 million sq. km, comprising 26 sedimentary basins. Prior to the adoption of the New Exploration Licensing Policy (NELP), only 11 per cent of India’s sedimentary basin was under exploration. Since operationalization of the NELP in 1999, the Government of India has awarded 47.3% of it for exploration. So far 87 oil and gas discoveries have been made by private/joint venture (JV) companies in 26 blocks and more than 640 MMT of oilequivalent hydrocarbon reserves have been added. As on 1 October 2010, investment made by Indian and foreign companies was of the order of US $ 14.8 billion, of which, US $ 7.5 billion was in hydrocarbon exploration and US$ 7.3 billion in development of discoveries.

 

The ninth round of NELP (NELPIX) was launched on 15 October 2010 and 34 exploration blocks including 8 deep water, 7 shallow water and the rest on shore, were offered.

 

Concerted efforts have been made to put new and marginal fields in production through in house resources as well as through service contracts. ONGC has an inventory of 165 marginal fields and 131 have either been monetized or are under various stages of development through in-house efforts. So far, 10 fields have been awarded on service contract.

 

In view of unfavourable demand-supply balance of hydrocarbons in India, acquiring equity oil and gas assets overseas is one of the important components of enhancing energy security. The Government is encouraging national oil companies to aggressively pursue equity oil and gas opportunities overseas.

 

It is estimated that India’s primary commercial energy consumption will increase at an average annual rate of at least 5.8% for the next few decades, and per-capita primary energy consumption will exceed 1toe by 2030. As a result, concerted effort on oil and gas exploration and production is expected to grow. In addition, India’s reliance on energy imports will also increase.

 

It is expected that crude oil price will not drop below USD 85/bbl over the next two years on account of the following factors–

 

a) Revival in global economy.

b) Increasing demand from developing economies to more than makeup for fall in demand from OECD, (the traditional demand centre for oil).

c) Falling non-OPEC supply of oil to further strengthen OPEC’s position with the latter being called upon to supply the additional barrel of oil to satiate incremental demand and

d) Increasing use of oil in transportation sector and shift of demand from OECD countries to developing economies where oil is subsidised, is expected to make demand for oil more inelastic with respect to its price.

 

There is also structural shift in key drivers of the global economic growth and global oil demand from the OECD countries to the developing countries.

 

According to OPEC estimates, global demand for oil is expected to grow to 90.5mnbpd by 2014e mainly on account of demand growth from the developing countries driven by China and India while demand from OECD countries is expected to average around 45.5mnbpd

 

Although there is strong opposition to deep water drilling after the BP operated - Deepwater Horizon drilling rig explosion brought to fore the dangers of drilling in deep water, the moratorium imposed by US was subsequently lifted due to the fact that around 5mnbpd comes from deep water fields. In the last decade deep water activities have gained momentum with global oil supplies from deep water increasing from 1.5mnbpd in 2000 to 5mnbpd by 2009. There is a significant potential for deep water production in Brazil and West Africa where 40% of discovered reserves in the last decade are in deep water. This they believe would lead to increasing share of deep water fields in the overall oil supplies.

 

Gas sector – to benefit from huge gas supplies and massive capex spends

 

Energy deficient India’s natural gas sector has undergone a dramatic change with the discovery of prolific KG basin gas and increasing LNG imports. Supply of natural gas which stood at 156mmscmd in FY10 is expected to increase to 256mmscmd by FY14e. Riding on a strong economic growth, India’s insatiable demand for gas continues to outpace supply. Domestic demand for gas is expected to increase from 169mmscmd in FY10 to 298mmscmd by FY14e resulting in increase in shortfall from 13mmscmd to 42mmscmd.

 

Conclusion

 

From the above discussion, they can conclude that the consumption of oil and gas is on increasing trend, resulting in increased exploration and production activities thereby creating a demand for offshore support vessels. According to certain reports, Global E and P spending is expected to increase 15% year – on – year in 2012.

 

However, with addition of new fleet in the market, they also expect some correction in the day rates and this is likely to put pressure on margins. Additionally, there will continue to be “competition” between old and new tonnage which will also put some pressure on charter rates.

 

As per various available reports, currently there are about 1,670 AHTSVs of varying capacities with an average age of about 15 years and more than 200 AHTSV of various sizes are scheduled for delivery in the coming 2 – 3 years. The average utilization of AHTSVs has been more than 67%. The number of larger AHTSVs is increasing over a period of time.

 

As regards PSVs, currently there are about 1,310 PSVs of various sizes with an average age of about 14 years and more than 220 PSVs of various sizes are under construction with delivery scheduled from 2011 to 2014. The average utilization of PSVs is more than 62% and is increasing.

 

However, there will be a time when older tonnage will not be acceptable by major Exploration and Production Companies, which in turn will increase demand for newer and more modern vessels.

 

The increase in utilization rates / increase in fleet of offshore support vessels can further be justified by the fact that almost 306 offshore fields are under development and development in another 240 – 244 offshore fields will be starting by 2011–2014. Out of these, development of almost 12 – 15 offshore fields will be in India alone.

 

The Company is exploring the possibility of acquiring modern tonnage as a policy of growth. Older tonnage will progressively be removed from the Company’s fleet.

 

The Company will continue to strive to improve the value of all its shareholders.

 

CONTINGENT LIABILITIES:

 

Particulars

As on 31st March, 2011

(Rs. in millions)

Guarantees given by the Banks

[Counter Guarantees given by the Company]

212.689

Total

212.689

 

The Company has given a guarantee on behalf of its wholly owned subsidiary for the difference, if any, between the Bareboat Charter payable to the owner of one Accommodation barge and one Anchor Handling Tug-cum Supply Vessel, and the market value of the said assets. The company does not expect any liability on this account.

 

The Company has given a guarantee on behalf of its Wholly Owned Subsidiary based in Singapore for USD 75 million in favour of Northern Star Shipping Pte. Limited, for the bareboat charter of one Platform Supply Vessel. This guarantee covers the difference between market value and the charter obligations of the Company’s Wholly Owned Subsidiary. The Company does not expect any liability whatsoever on this account.

 

The Company has given a guarantee of USD 55 million to Axis Bank, Singapore on behalf of Wholly Owned

Subsidiary based in Netherlands. This amount relates to the debt raised by the Company’s Wholly Owned Subsidiary in order to acquire the vessel, M.V. Beaucephalus. Since the market value of the vessel is substantially higher than the total debt outstanding and since the vessel is on long term contract with Petrobras, Brazil, the Company does not expect any liability whatsoever on this account.

 

UNAUDITED FINANCIAL RESULTS (PROVISIONAL) FOR THE QUARTER ENDED DECEMBER 31, 2011

(Rs. in millions)

 

 

Particulars

Stand Alone

Quarter Ended

Nine Months Ended

31.12.2011

(Unaudited)

31.12.2011

(Unaudited)

Income from Operations

 

 

Fleet Chartering Earnings (Net of Service Tax)

440.976

1102.099

Other Operating Income

--

--

 

440.976

1102.099

Total Expenditure

284.452

728.912

(Increase) / Decrease in Stock in Trade

5.475

(51.892)

Consumption of Raw Material

N. A.

N.A.

Staff Expenditure

85.971

237.128

Depreciation

82.326

234.226

Other Expenditure

110.680

309.450

Profit Before Other Income, Interest and Exceptional Items

156.524

373.187

Other Income

7.535

11.800

Profit Before Interest and Exceptional Items

164.059

384.987

Interest and Finance Charges

62.247

153.742

Profit / (Loss) After Interest but Before Exceptional Items

101.812

231.245

Exceptional Items

-

-

Profit / (Loss) from Ordinary Activities Before Tax

101.812

231.245

Provision for Tax

 

 

Current Tax

1.078

2.842

Net Profit / (Loss) from Ordinary Activities After Tax

100.734

228.403

Provision for Tax for earlier year

-

-

Profit / (Loss) After Tax

100.734

228.403

Extraordinary Item

 

 

Provision for Depreciation for earlier years

-

-

Net Profit / ( Loss ) for the period

100.734

228.403

Cash Profit

183.060

462.629

Paid up Equity Share Capital (Face Value of INR 10/-)

244.871

244.871

Reserves Excluding Revaluation Reserves

--

--

Earning Per Share (In INR) (Before extraordinary item)

4.11

9.33

Earning Per Share (In INR) (After extraordinary item)

4.11

9.33

Public Shareholding

 

 

- Number of Shares

1 6,499,514

1 6,499,514

- Percentage of Shareholding

67.38%

67.38%

Promoters and Promoter Group Shareholding

 

 

a) Pledged / Encumbered

 

 

- Number of Shares

NIL

NIL

- Percentage of Shares

(as a % of the total shareholding of promoter and promoter group)

NIL

NIL

- Percentage of Shares

(as a % of the total share capital of the Company)

NIL

NIL

b) Non-encumbered

 

 

- Number of Shares

7,987,579

7,987,579

- Percentage of Shares

(as a % of the total shareholding of promoter and promoter group)

100.00%

100.00%

- Percentage of Shares

(as a % of the total share capital of the Company)

32.62%

32.62%

 

Notes:

1. The above unaudited financial results for the quarter ended December 31, 2011 were taken on record at the Board meeting of the Company held on February 1, 2012.

2. During the quarter –

a) The Company’s vessel MV Garware V was sold.

b) The paid-up share capital of the Company has increased from Rs.243.561 millions to Rs.244.871 millions presently, due to allotment of equity shares and conversion of warrants on preferential basis in Nov-11.

c) The net unrealized exchange loss on foreign currency borrowings aggregating to Rs.344.823 millions has been recognized directly in Hedge Reserve as per AS 30 – Financial Instruments; Recognition and Measurement.

d) The Company has received 19 grievances from the shareholders during the quarter ended December 31, 2011 and all of them have been resolved and there are no pending grievances.

e) Two of the Company’s vessels underwent dry-dock as per statutory requirement.

3. The Company does not have any foreign exchange derivatives exposure.

4. The Company is engaged in only one type of business i.e. charter of offshore support vessels. Hence there are no separate reportable segments as per Accounting Standard 17.

5. The figures for the corresponding quarter of the previous year are regrouped / reclassified wherever necessary to make them comparable with that of the quarter.

 

FIXED ASSETS:

 

v      Fleet

v      Office Premises

v      Furniture and Fixtures

v      Office Equipments

v      Motor Vehicles

v      Computers

 

 

CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

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.51.15

UK Pound

1

Rs.81.80

Euro

1

Rs.68.34

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

7

PAID-UP CAPITAL

1~10

6

OPERATING SCALE

1~10

6

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

6

--PROFITABILIRY

1~10

5

--LIQUIDITY

1~10

5

--LEVERAGE

1~10

5

--RESERVES

1~10

6

--CREDIT LINES

1~10

6

--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

 

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

-

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.