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Asian Oilfield Services Ltd.

BSE: 530355 Sector: Oil & Gas
NSE: N.A. ISIN Code: INE276G01015
BSE 00:00 | 24 Apr 2020 Asian Oilfield Services Ltd
NSE 05:30 | 01 Jan 1970 Asian Oilfield Services Ltd

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OPEN 79.20
PREVIOUS CLOSE 77.35
VOLUME 14081
52-Week high 143.40
52-Week low 63.80
P/E
Mkt Cap.(Rs cr) 293
Buy Price 76.65
Buy Qty 45.00
Sell Price 79.95
Sell Qty 300.00
OPEN 79.20
CLOSE 77.35
VOLUME 14081
52-Week high 143.40
52-Week low 63.80
P/E
Mkt Cap.(Rs cr) 293
Buy Price 76.65
Buy Qty 45.00
Sell Price 79.95
Sell Qty 300.00

Asian Oilfield Services Ltd. (ASIANOILFIELD) - Director Report


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Company director report

To the Members

Your Directors are pleased to present the 26th Annual Report and the Company's auditedfinancial statement for the financial year ended March 31 2019. The consolidatedperformance of the Company and its subsidiaries has been referred to wherever required.

FINANCIAL RESULTS:

The Company's financial performance for the year ended March 31 2019 is summarisedbelow:

(All amounts in Lacs unless otherwise stated)

Particulars Consolidated * Standalone *
2018_19 2017-18 2018_19 2017-18
Revenue from operations 19385.52 22222.29 15682.44 9566.28
Other Income 397.72 352.40 573.90 661.48
Total Revenue 19783.24 22574.69 16256.34 10227.76
Profit / (Loss) before Finance Cost Depreciation and Tax 3685.25 4421.42 1702.46 239.53
Finance Cost (572.06) (634.07) (544.66) (573.72)
Depreciation (1944.27) (1702.68) (909.31) (748.30)
Exceptional items (250.77) (1034.11) (85.20) (985.22)
Profit/(Loss) before tax 918.15 1050.33 163.29 (2067.71)
Tax expenses (8.08) (20.17) - -
Net Profit/(Loss) after tax 910.07 1030.16 163.29 (2067.71)

* As per Ind-AS adopted by the Company during the financial year 2017-18

DIVIDEND:

In view of inadequate profits for the financial year the Board regrets its inabilityto recommend payment of dividend to the shareholders.

TRANSFER TO RESERVES:

The Company does not propose to transfer any sum to the General Reserve in view ofinadequate profit.

COMPANY'S PERFORMANCE:

On consolidated basis revenue from operations for the financial year 2018-19 stood atRs 19385.52 Lacs which was lesser by 12.78% over last year (Rs 22222.29 Lacs in2017-18). Net Profit for the year stood at Rs 910.07 Lacs as against net profit of Rs1030.16 Lacs in the previous year.

On standalone basis revenue from operations for the financial year 2018-19 is Rs15682.44 Lacs which has increased by approx. 64% over last year (Rs 9566.28 Lacs in2017-18) whereas net profit for the year is Rs 163.29 Lacs as against net profit of Rs82.12 Lacs in the previous year.

CONSOLIDATED FINANCIAL STATEMENTS:

The Consolidated Financial Statements for the year under review are in accordance withthe Indian Accounting Standard (IND-AS) notified by the Ministry of Corporate Affairswhich are applicable to the group for the accounting periods beginning on or after April1 2017.

SUBSIDIARY COMPANIES:

The Company has 3 (three) subsidiaries 1 (one) step down subsidiary and 1 (one) jointventure company as on March 31 2019. During the year under review the Company hasincorporated a wholly owned subsidiary AOSL Energy Services Limited (WOS). There has beenno material change in the nature of business of the subsidiaries and the JV.

The consolidated financial results reflect the operations of all the subsidiaries(including step down subsidiary) viz. Asian Oilfield & Energy Services DMCC AOSLPetroleum Pte. Limited. AOSL Energy Services Limited and Ivorene Oil Services NigeriaLimited (step down subsidiary) and a Joint Venture Company viz. Optimum Oil & GasPrivate Limited.

Pursuant to provisions of Section 129(3) of the Act a statement containing salientfeatures of the financial statements of the Company's subsidiaries and JV in Form AOC-1 isannexed as Annexure A. Pursuant to the provisions of section 136 of the Act the financialstatements of the Company consolidated financial statements along with relevant documentsand separate audited accounts in respect of subsidiaries and JV are also kept at theRegistered office of the Company and are available on the website of the Company.

PERFORMANCE OF SUBSIDIARIES:

Asian Oilfield & Energy Services DMCC Dubai:

The net sales of Asian Oilfield & Energy Services DMCC for the current financialyear is Rs 5087.87 Lacs compared to Rs 13545.05 Lacs during the previous year. Itgenerated a net profit of Rs 994.94 Lacs compared to profit of Rs 3200.81 Lacs in theprevious year.

Asian Oilfield & Energy Services DMCC has been exploring opportunities in selectcountries in the MEA Region which would have huge opportunities in the field of oil andgas.

AOSL Petroleum Pte. Limited:

During the year AOSL Petroleum Pte. Limited has not registered any income but hasincurred a net loss of Rs 301.42 Lacs in the current year against net loss of Rs 112.98Lacs in the previous year.

AOSL Energy Services Limited:

AOSL Energy Services Limited (AESL) was incorporated during the financial year 2018-19on September 29 2018. AESL is a 100% subsidiary of the Company. During the year AESL didnot have any income and has incurred a net loss of Rs 0.80 Lacs in the current year.

Ivorene Oil Services Nigeria Limited:

Ivorene Oil Services Nigeria Limited (Ivorene) is step down subsidiary of the Companyin view of purchase of 99.99% shares in F.Y. 2016-17 by Asian Oilfield & EnergyServices DMCC subsidiary of the Company.

During the year Ivorene registered an income of Rs 14.23 Lacs as against Rs 58.43 Lacsduring the previous year and has generated a net profit of Rs 18.74 Lacs in the currentyear against net profit of Rs 38.16 Lacs in the previous year.

PERFORMANCE OF JOINT VENTURE COMPANY:

Optimum Oil & Gas Private Limited:

During the year Optimum Oil & Gas Private Limited had total revenue (other income)of Rs 41.99 Lacs and incurred a loss of Rs 17.02 Lacs against a net loss of Rs 17.39 Lacsin the previous year.

PARTICULARS OF LOANS AND GUARANTEES GIVEN SECURITIES PROVIDED AND INVESTMENTS MADE:

The Company has complied with the provisions of Section 186 of the Act in respect ofloans or guarantees given securities provided and investments made during the year underreview. The details of loans and guarantees given and investments made by the Companyduring the financial year 2018-19 are provided in the notes to the financial statements.

RELATED PARTY TRANSACTIONS:

All related party transactions that were entered in to during the financial year wereon arm's length basis and were in the ordinary course of Company's business. The Companyhas not entered into any contract arrangement or transaction with any related partyduring the financial year which could be considered as material as defined under SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The Company has apolicy for related party transactions which is also available on the website of theCompany (www. asianOilfield.com).

All the related party transactions are placed before the Audit Committee as well as theBoard for approval on a quarterly basis. Omnibus approval was also obtained from the AuditCommittee and the Board on an annual basis for repetitive transactions.

Related party transactions under Accounting Standard – AS18 are disclosed in thenotes to the financial statements.

Prescribed Form No. AOC-2 pursuant to clause (h) of subsection (3) of Section 134 ofthe Act and Rule 8(2) of the Companies (Accounts) Rules 2014 is furnished as Annexure Bto this report.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:

a. In the preparation of annual accounts for the year ended March 31 2019 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

b. They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year March 31 2019 andof the profit of the Company for that period;

c. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d. They have prepared the annual accounts on a ‘going concern' basis;

e. They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively; and

f. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

COMPLAINTS COMMITTEE:

The Company has constituted a Complaints Committee under the Policy on prevention ofsexual harassment at the workplace to consider and resolve all sexual harassmentcomplaints reported. The Complaints Committee consist of a Presiding Officer being a womanemployed at a senior level amongst the employees at least 2 members from employeescommitted to the cause or having legal knowledge and 1 external member familiar withissues relating to sexual harassment. At least one half of the total members of theCommittee shall be women. A quorum of 3 members is required to be present for theproceedings to take place. The quorum shall include the Chairperson at least two membersone of whom shall be a lady.

The Company did not receive any complaints during the financial year 2018-19.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the year under review following changes occurred in the position of Directors/KMPs of the Company:

DIRECTORS:

During the year under review Mr. Naresh Chandra Sharma Chairman and IndependentDirector ceased to be the Director of the Company from end of business hours on March 312019 due to the applicability of Regulation 17(1A) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 as amended from time to time pertaining to theappointment/ continuation of Non-executive Director(s) above the age of 75 years. TheBoard appreciated the valuable guidance and contribution made by Mr. Naresh ChandraSharma during his tenure as an Independent Director of the Company and Chairman of theBoard. Mr. Rohit Agarwal resigned from the Company as Whole-time Director with effect fromclose of business hours on July 31 2018. The Board appreciated the contribution andguidance provided by Mr. Rohit Agarwal during his tenure as Whole-time Director of theCompany.

Mr. Ashutosh Kumar who was associated with the Company as CEO and Director wasappointed as the Whole-time Director and CEO of the Company w.e.f. August 1 2018.

Mr. Nayan Mani Borah was appointed as an Additional (Independent) Director of theCompany with effect from March 19 2019. The Company has received a notice in writing froma member proposing his candidature and being eligible has offered himself to be appointedas an Independent Director not liable to retire by rotation.

Dr. Rabi Narayan Bastia retires by rotation and being eligible offers himself forre-appointment.

Mr. Kadayam Ramanathan Bharat and Ms. Anusha Mehta continue as Directors of theCompany.

KEY MANAGERIAL PERSONNEL:

During the year under report the following persons were Key Managerial Personnel ofthe Company:

1. Mr. Rohit Agarwal Whole-time Director (up to July 31 2018)

2. Mr. Ashutosh Kumar Whole-time Director & CEO (w.e.f. August 1 2018)

3. Mr. Sumit Maheshwari Chief Financial Officer (w.e.f. August 1 2018)

5. Ms. Shweta Jain Company Secretary and Compliance Officer (from February 13 2018 upto June 20 2018).

6. Ms. Archana Nadgouda Company Secretary and Compliance Officer (w.e.f. August 12018)

Changes in the composition of the Board and Key Managerial Personnel between the end offinancial year of the Company to which the financial statements relate and the date of thereport:

Mr. Gaurav Gupta (DIN 01189690) Non-executive Director has resigned from the Board ofDirectors w.e.f. May 1 2019. The Board appreciated the valuable guidance and contributionprovided by Mr. Gaurav Gupta during his tenure as a Director of the Company.

Mr. Devesh Bhargava was appointed as an Additional (Independent) Director of theCompany with effect from May 23 2019. The Company has received a notice in writing from amember proposing his candidature and being eligible has offered himself to be appointed asan Independent Director not liable to retire by rotation.

Mr. Mukesh Jain was appointed as a Director with effect from May 29 2019 in the casualvacancy created by resignation of Mr. Gaurav Gupta who shall hold office till the dateMr. Gaurav Gupta would have held office if it had not been vacated liable to retire byrotation. As per the provisions of Section 161(4) his appointment is subject toconfirmation of the shareholders at the ensuing Annual General Meeting of the Company.

There is no change in the key managerial personnel of the Company between the end ofthe financial year 2018-19 and the date of the report.

DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received necessary declaration from all Independent Directors of theCompany confirming that they meet the criteria of independence laid down in Section 149(6)of the Companies Act 2013 as well as under Regulation 16(1) (b) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. There has been no change inthe circumstances which may affect their status as Independent Director during the year.

BOARD EVALUATION:

The Board of Directors has carried out an annual evaluation of its own performanceBoard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of criteria such as the board composition and structureeffectiveness of Board processes information and functioning etc. as provided by theGuidance Note on Board Evaluation issued by the Securities and Exchange Board of India onJanuary 5 2017. The performance of the committees was evaluated by the Board afterseeking inputs from the committee members on the basis of criteria such as the compositionof committees effectiveness of committee meetings etc.

The Board and the Nomination and Remuneration Committee reviewed the performance ofindividual directors on the basis of criteria such as the contribution of the individualdirector to the board and committee meetings like preparedness on the issues to bediscussed meaningful and constructive contribution and inputs in meetings etc.

In a separate meeting of independent directors performance of non-independentdirectors and the Board as a whole was evaluated taking into account the views ofexecutive directors and non-executive directors. The same was discussed in the boardmeeting that followed the meeting of the independent directors at which the performanceof the board its committees and individual directors was also discussed. Performanceevaluation of independent directors was done by the entire Board excluding theindependent director being evaluated.

FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS:

In compliance with the requirements of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has put in place a familiarisation programmefor the Independent Directors to familiarise them with their role rights andresponsibilities as Directors the working of the Company nature of the industry in whichthe Company operates business model etc. The details of the familiarisation programme areexplained in Corporate Governance Report. The Familiarisation Programme for theIndependent Directors is placed on the website of the Company www.asianOilfield. com.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS:

The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which forms part of the Board's report. The Nomination and Remuneration policy ofthe Company is placed on the website of the Company www.asianOilfield.com.

NUMBER OF MEETINGS OF THE BOARD:

5 (five) meetings of the Board were held during the year on May 30 2018 August 1 2018August 14 2018 November 2 2018 and February 6 2019. For details of the meetings of theBoard please refer to the Corporate Governance Report which forms part of this report.

AUDIT COMMITTEE:

The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of this report.

Material changes and commitments if any affecting the financial position of theCompany which have occurred between the end of financial year of the Company to which thefinancial statement relate and the date of the report:

There were no material changes and commitments that have affected the financialposition of the Company which have occurred between the financial year ended on March 312019 and this report.

MANAGEMENT DISCUSSION AND ANALYSIS:

In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 the Management Discussion and Analysis hasbeen given separately and forms part of this report.

RISK MANAGEMENT:

The Company has in place a Risk Management Policy pursuant to Section 134 of theCompanies Act and Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. It establishes various levels of accountability and overview within theCompany while vesting identified managers with responsibility for each significant risk.

The Internal Audit facilitates the execution of risk management practices in theCompany in the areas of risk identification assessment monitoring mitigation andreporting. Through this program each function carried on project sites addressesopportunities and risks through a comprehensive approach aligned to the Company'sobjectives. The Company has laid down procedures to inform the Audit Committee as well asthe Board of Directors about risk assessment and management procedures and status.

This risk management process which is facilitated by internal audit covers riskidentification assessment analysis and mitigation. Incorporating sustainability in theprocess also helps to align potential exposures with the risk appetite and highlightsrisks associated with chosen strategies. The major risks forming part of risk managementprocess are linked to the audit.

The Audit Committee of the Board of the Company has been entrusted with the task toframe implement and monitor the risk management plan for the Company and it isresponsible for reviewing the risk management plan and ensuring its effectiveness with anadditional oversight in the area of financial risks and controls. Major risks identifiedby the businesses and functions are systematically addressed through mitigating actions ona continuing basis. The Risk Management Policy of the Company is placed on the website ofthe Company www.asianOilfield.com.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate internal control systems including suitable monitoringprocedures commensurate with its size and the nature of the business. The internal controlsystems provide for all documented policies guidelines authorisation and approvalprocedures. The Company has appointed M/s. S.P. Chopra & Co. the firm of CharteredAccountants as an Internal Auditor who carries out audits throughout the year. Thestatutory auditors while conducting the statutory audit review and evaluate the internalcontrols and their observations are discussed with the Audit Committee of the Board.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company has already constituted a Corporate Social Responsibility (CSR) Committeein accordance with Section 135 of the Companies Act 2013. For the Company socialresponsibility is a key element of accountability and it will continue to strive in itsbehaviour and actions to surpass the levels of minimum statutory compliance. The Companybelieves in the sustainable growth and prosperity of its stakeholders and views itsresponsibilities not only as business responsibilities but as ethical and social as well.

The CSR policy of the Company is placed on the website of the Companywww.asianOilfield.com. However in view of the inadequate profits for the financial yearand losses during previous years the Company has not pursued any initiative on CSRactivities.

SAFETY ENVIRONMENT AND HEALTH:

The Company's commitment to excellence in Health and Safety is embedded in theCompany's core values. The Company has a stringent policy of ‘safety for all' whichdrives all employees to continuously break new ground in safety management for the benefitof people property environment and the communities where we operate on sites.

The Company respects human rights values its employees and the communities that itinterfaces with. The Company is aware of the environmental impact of its operations and itcontinually strives to reduce such impact by investing in technologies and solutions foreconomic growth.

The Company considers safety environment and health as the management responsibility.Regular employee training programmes are in place throughout the Company on SafetyEnvironment and Health and has well identified and widely covered safety management systemin place for ensuring not only the safety of employees but surrounding population of theproject sites as well.

Policy on prevention prohibition and redressal of sexual harassment at workplace:

The Company has zero tolerance for sexual harassment at the workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under. The Policy aims to provideprotection to employees at the workplace and prevent and redress complaints of sexualharassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure.

The Company has not received any complaint of sexual harassment during the financialyear 2018-19.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

There is a Whistle Blower Policy in the Company and that no personnel has been deniedaccess to the Chairman of the Audit Committee. The policy provides for adequate safeguardsagainst victimisation of persons who use vigil mechanism. The Whistle Blower Policy isposted on the website of the Company www.asianOilfield.com.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

No significant material orders have been passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.

DISCLOSURE REQUIREMENTS:

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015Corporate Governance Report with Practicing Company Secretaries Certificate thereon andManagement Discussion and Analysis are attached which form part of this report.

HUMAN RESOURCES:

The human resource plays a vital role in the growth and success of an organisation. TheCompany has maintained cordial and harmonious relations with employees across variouslocations. The Company continuously invest in attraction retention and development oftalent on an ongoing basis. A number of programs that provide focused people attention arecurrently underway. Your Company thrust is on the promotion of talent internally throughjob rotation and job enlargement.

DEPOSITS FROM PUBLIC:

The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding or unpaid as on the dateof the balance sheet.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars as prescribed under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 are

a. Conversation of Energy Not Applicable
b. Technology Absorption NIL

c. Foreign exchange earning & outgo :

Particulars 2018-19 2017-18
a. Foreign Exchange earnings
Seismic Survey and other related charges 107585058 367765564
Interest on loan to 22833942 33323769
Subsidiary
b. Foreign Exchange outgo towards
Travelling expenses 2139344 1520345
Capital goods 179169425 133782690
Revenue payment 135491864 70378751

PARTICULARS OF EMPLOYEES AND REMUNERATION:

The information required under Section 197 (12) of the Act read with Rule 5 (2) and (3)of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isprovided in the Annexure C forming part of the Report. In terms of the second proviso toSection 136 of the Act the Report and Accounts are being sent to the Shareholdersexcluding the aforesaid Annexure. Any Shareholder interested in obtaining the same maywrite to the Whole-time Director or Company Secretary at the Registered office of theCompany. None of the employees listed in the said Annexure is related to any Director ofthe Company.

AUDITORS AND AUDITORS' REPORT

(1) Statutory Auditors:

Walker Chandiok & Co. LLP (WCC) Chartered Accountants were appointed as thestatutory auditors of the Company for a period of five years at the Annual General Meeting(AGM) of the Company held on September 28 2015 to hold office from the conclusion of 22ndAGM till the conclusion of 27th AGM to be held in 2020. As per the provisions of Section139(1) of the Act their appointment for the above tenure is subject to ratification bymembers at every AGM. However in accordance with the Companies (Amendment) Act 2017enforced on May 7 2018 by Ministry of Corporate Affairs the appointment of StatutoryAuditors is not required to be ratified at every AGM. Accordingly no such item has beenconsidered in notice of the ensuing 26th AGM.

AUDITORS' REPORT:

a) The auditors in their Report on Standalone Audited Financial Results of the Companyfor the financial year ended March 31 2019 have given a qualified opinion in their Reportreading as under:

i) As stated in Note 41 to the standalone financial statements the Company hasnon-current investments of Rs 0.31 Lacs in and loans including accrued interest(classified under non-current loans and other non-current financial assets respectively)of Rs 333.58 Lacs and Rs 17.74 Lacs respectively recoverable from a subsidiary companyAOSL Petroleum Pte. Limited (APPL) as at March 31 2019. The net worth of the subsidiarycompany has been fully eroded and it has been incurring losses. The accumulated losses inthe subsidiary company amounts to Rs 1443.39 Lacs as at March 31 2019 and the auditorof the subsidiary company has determined that a material uncertainty exists as at March31 2019 that may cast significant doubt about the subsidiary company's ability tocontinue as a going concern. However based on the factors described in the aforementionednote management has considered these balances as fully recoverable which is not inaccordance with the requirements of Ind AS 36 Impairment of Assets and Ind AS 109Financial Instruments. In the absence of sufficient appropriate audit evidence to supportmanagement's assessment as above or any other relevant alternate evidence we are unableto comment upon adjustments if any that may be required to carrying values of theaforesaid balances and the consequential impact if any on the standalone financialstatements.

IN RESPONSE THERETO THE MANAGEMENT IS OF THE VIEW THAT:

Based on the evaluation of the business prospects and plans formulated management isconfident of revival of operations of APPL. Thus management is of the view that there isno impairment in the carrying value of the non-current investments non-current loansother non-current financial assets. b) The auditors in their Report on ConsolidatedAudited Financial Results of the Company for the financial year ended March 31 2019 havegiven a qualified opinion in their Report reading as under:

i) As described in Note 42(a) to the consolidated financial statements the Group'sother current assets as at March 31 2019 include advances made to suppliers amounting toRs 397.38 Lacs (US$ 574500) in the books of Asian Oilfield & Energy Service DMCC("ADMCC") a subsidiary of the Holding Company which are considered as fullyrecoverable by the management. However such balance is subject to confirmation from theconcerned parties and has also not been tested for impairment as stated in the Basis ofQualified Opinion paragraph in the audit report on the subsidiary's financial statementsissued by an independent firm of Chartered Accountants registered in Dubai vide itsreport dated 22 May 2019 which is relevant to our opinion on the consolidated financialstatements and reproduced by us as under:

"OUR BASIS OF QUALIFIED OPINION IS MENTIONED BELOW:

Advance to suppliers are subject to confirmation and impairment testing."

IN RESPONSE THERETO THE MANAGEMENT IS OF THE VIEW THAT:

These advances are on account of upcoming project which has been executed in May 2019.Such amount shall be realised/ recovered in near future on performance of project. Hencethe consequential adjustments if any arising out of confirmation/ impairment assessmentare not expected to be material. The auditors have not reported any frauds under theprovisions of Section 143(12) of the Companies Act 2013 to the Audit Committee of theCompany.

(2) Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyhas appointed Mr. Hemanshu Kapadia of Hemanshu Kapadia & Associates PracticingCompany Secretaries to undertake the Secretarial Audit of the Company for the year endedMarch 31 2019. The Secretarial Audit Report is annexed as Annexure D. The SecretarialAudit Report does not contain any qualification reservation or adverse remark.

COST RECORDS AND COST AUDIT:

Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section 148(1) of the Companies Act 2013 are not applicable for thebusiness activities carried out by the Company.

SHARE CAPITAL:

The paid up equity share capital as on March 31 2019 was Rs 38.07 Crores. There was nochange in the paid up equity share capital of the Company during the year under review.

The Company has not issued shares with differential voting rights. Although the Companyin the Extraordinary General Meeting of its shareholders held on March 27 2017 hasobtained the approval for issuing ESOP to it Employees but it has not made allotment ofequity shares under ESOP scheme during the financial year.

EMPLOYEE STOCK OPTION PLAN 2017:

Details of the shares issued under Employee Stock Option Plan (ESOP) as also thedisclosures in compliance with SEBI (Share Based Employee Benefits) Regulations 2014 areuploaded on the website of the Company www.asianOilfield.com. During the financial year2017-18 ESOP Compensation Committee Meeting has granted 174302 stock options toEmployees of the Company its Subsidiaries and Holding Company under the Asian OilfieldServices Limited – Employee Stock Option Plan 2017 ("AOSL ESOP 2017") at anexercise price of Rs 165/- and that each of the stock option entitles the holder to applyfor one equity share of the Company of Rs 10/- each. A Certificate from the StatutoryAuditors of the Company regarding proper implementation of ESOP Scheme shall be placedbefore the members at the 26th Annual General Meeting.

SHIFTING OF REGISTERED OFFICE FROM STATE OF HARYANA TO THE STATE OF MAHARASHTRAMUMBAI:

Pursuant to the special resolution passed by the Company at its 24th Annual GeneralMeeting held on September 8 2017 during the year under review the Company had made anapplication to the Regional Director Northern Region for shifting of its registeredoffice from State of Haryana to the State of Maharashtra Mumbai. The Regional Directorvide his Order dated September 24 2018 approved the application and the Registrar ofCompanies issued a Certificate of Shifting of Registered office dated December 17 2018.

EXTRACT OF ANNUAL RETURN:

As provided under Section 92(3) of the Act the extract of Annual Return is given inAnnexure E in the prescribed Form MGT-9 which forms part of this report. The AnnualReturn is also place on the website of the Company www.asianOilfield. com.

ACKNOWLEDGEMENT:

The Board places on record its deep appreciation for the continued support receivedfrom various clients vendors and suppliers and technical partners bankers GovernmentAuthorities employees at all levels and stakeholders in furthering the interest of theCompany.

On behalf of the Board of Directors of
Asian Oilfield Services Limited
Nayan Mani Borah
Place: Mumbai Chairman
Date: 7 August 2019 DIN 00489006


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