The directors present the 21st Annual Report together with audited
accounts of your Company for the year ended 31st March, 2012.
Consolidated Financial Highlights:
( Rs. in Millions)
Particulars 2011-12 2010-11
Operating Income 14,840.32 14,619.48
Other Income 322.53 123.37
Total Income 15,162.85 14,742.86
Profit Before Interest,
Depreciation and Taxation 7,211.56 6,946.04
Finance Cost 3,066.20 2,600.24
Depreciation 1,670.46 1,627.85
Profit Before Taxation 2,474.89 2,717.95
Add: Prior Period Adjustments 0.08 8.59
Add: Minority Share in Loss 0.01 0.01
Profit for the Year 2,474.98 2,726.55
Provision for Tax
- Income Tax Relating to
Earlier Years 0.46 0.15
-Income Tax 236.52 191.78
-MAT Credit (193.61) (92.38)
-Deferred 338.65 363.56
Net Profit after tax 2,092.97 2,263.45
Add : Surplus as per Last
Balance Sheet 8,026.55 5,971
Surplus available for
appropriation 10,119.52 8,234.33
Transferred to General Reserve 50.00 100.00
Transferred to Debenture
Redemption Reserve 2,500.00 -
Proposed Dividend on Equity Shares 46.36 92.72
Dividend Distribution Tax on
Proposed Dividend 7.52 15.04
Surplus Carried Forward to
The Next Year 7,515.64 8,026.57
Total 10,119.52 8,234.33
The consolidated operating income for the financial year 2011-12 has
grown slightly by 1.5% at Rs. 14,840 millions against ‘ 14,619 millions
in the previous year. Due to increase in the finance cost during the
year the profit after tax has declined by 7.5% from Rs. 2,263 millions in
2010-11 to Rs. 2,093 millions in 2011-12. However, the EBIDTA margin has
been improved at Rs. 7,212 million (48.59%) in 2011-12 as compared to Rs.
6,946 millions (47.51%) during the last year 2010-11.
The consolidated net worth of the Company has increased from Rs. 13,752
millions to Rs. 15,233 millions while standalone net worth has also grown
by Rs. 490 millions and reached at Rs. 9,846 millions as on 31st March
The comparison of the Company''s performance for last 3 years is shown
in following graphs:
For the financial year under review your Directors have recommended a
dividend of Rs.1.00 per equity share of Rs.10.00 each i.e. 10% on paid up
share capital of the Company, amounting Rs. 46.36 millions. The dividend,
if approved at the ensuing annual general meeting, will be paid to
those members whose names appear in the Register of Members as on the
close of working hours on 28th September 2012 and in respect of shares
held in dematerialized form it will be paid to the members whose names
are furnished by National Securities Depositories Limited and Central
Depository Services (India) Limited as beneficial owners.
The dividend would be tax free in the hands of shareholders.
Review of Operations
Recently your company has started its foray into the area of offshore
drilling by obtaining its maiden contract from Gulf of Suez Petroleum
Company (GUPCO) for deployment of an offshore jack up drilling rig in
Gulf of Suez, Egypt for an initial period of 2 1 year. GUPCO is a 50
-50 joint venture owned by British Petroleum (BP) and The Egyptian
General Petroleum Company (EGPC). This contract will be executed
under our Singapore based 100% subsidiary viz. Shiv-Vani Singapore Pte
Limited. We have acquired offshore jack up drilling rig Ocean
Heritage now renamed as Shiv-Vani Heritage from Diamond Offshore
LLC, an offshore drilling company, of Delaware, USA.
Shiv-Vani Heritage is a self elevating drilling unit registered and
flagged in the Marshall Islands. Shiv-Vani Heritage has an outfitted
maximum water depth capability of 300ft and a drilling depth capability
of 20,000ft. The rig is acquired with all certification including the
It is a new beginning for your company and has set a strong offshore
drilling platform for Shiv-Vani. Acquisition of offshore rig should be
considered as an addition to the gamut of services provided by
Shiv-Vani currently owns and operates 40 on-land rigs and 8 seismic
crews. We provide onshore E&P services ranging from seismic services,
well drilling, work over operations, extraction of methane gas out of
coal beds (CBM) to integrated well services with projects all over the
While continuing with the contracts of the last year with respect to E
& P Services ranging from seismic to well drilling related integrated
services, extraction of Methane from coal beds (CBM) we also got the
EPC contract for the erection of Coal Handling Plant (CHP) and setting
of Solar Power project as per the following:
Other Business Activities
We provide services in the collection and interpretation of seismic
data. We are capable of acquiring both two-dimensional and
three-dimensional seismic data, and have entered into a collaborative
agreement with a third-party which gives us the capability to provide
shallow water transit zone data services. Seismic data is collected by
causing an explosion in the area beneath a shot-hole and then capturing
the resulting resonance by a geophone and a telemetry system.
Interpretation of the seismic data collected helps in identifying the
precise points for well drilling.
During the year we have added two new clients for 3-D Seismic data
acquisition for an area of 144 square KM in Gujrat for Sintax Oil and
Gas Limited and we are continuing with our services with SNG Russia for
GAIL (India) Limited for an area of 605 square KM.
Deep drilling services consist generally of well drilling, well
workover and directional drilling services. Your company on
consolidated basis has fleet of 40 onshore rigs with drilling capacity
up to a maximum depth of 8,000 metres. Out of 40 rigs 80% are brand new
in terms of drilling capacity and value with an average age of 3-4
years and residual life of about 35 years.
Your company is successfully running all the contracts with our
esteemed clients viz. ONGC, OIL India Limited etc and also obtaining
repeat contracts from existing employers.
Coal bed methane development exploration and exploitation is gradually
gaining importance as it reduces the greenhouse effect and earns carbon
credits by further preventing the direct emission of methane gas from
operating mines to the atmosphere. India has 247 Billions tonnes of
Coal Reserves – 3rd largest in the world. Total Sedimentary area for
CBM Exploration in India is 26,000 Sq Km, 36% of which is still
unexplored. The DGH expects CBM production to grow to more than 7mmscmd
over the next few years from present production of over 2mmscmd. Out of
this exploration has been initiated in about 60% area by way of CBM
rounds Following are the CBM bidding states:
CBM I : 7 Offered and 5 awarded
CBM II : 9 Offered and 8 awarded
CBM III : 10 offered and 10 awarded
CBM IV : 10 offered and 7 awarded
Shiv-Vani is pioneer and leading provider of integrated CBM development
services in India with ability to provide multilateral inseam,
horizontal directional drilling, resulting in significant increase in
flow rates and optimises CBM production. Your Company has got an
integrated contract of CBM for development, drilling and production
testing of 14 horizontal Wells and putting them under production with
requisite surface facilities for delivering the Gas at delivery point
and Drilling, Completion and Testing of Pilot Wells in four CBM Blocks
We have drilled a total of 20 numbers of wells for CBM Project at
Bokaro as 3 Horizontal and 17 Vertical with the deployment of five no.
of rigs of different capacities as per the requirement of the project.
Apart from the existing contracts from ONGC for engineering,
construction and pre / post installation of gas gathering station, we
have got 2 contracts of Coal handling Plant of about Rs. 200 Cr. each
from Mahanadi Coalfileds Limited (MCL), a subsidiary of Coal India
Limited for Ananta siding V&VI, Jgannath Area of Talcher Coalfields
Near Talcher, Orissa. The project is a pre-engineered turnkey
assignment for design, supply, construction, erection, commissioning,
trial run and handing over of all the structures, equipment and other
sub-systems of the proposed coal transportation and silo loading
arrangement at Ananta OCP siding , Talcher coalfields of MCL. The first
contract for Rs.198.50 is executable over a period of 2 years and
another LOI of about Rs.200 Cr. (executable over a period of 2 years)
is expected shortly.
This is an E.P.C. contract. This does not need any capital expenditure.
Working capital limits plus mobilization advance from Coal India will
be sufficient to execute the project.
During the period under review, your Company has not accepted any fixed
deposit under Section 58A of the Companies Act, 1956 read with
Companies (Acceptance of Deposits) Rules, 1975 and as such no amount of
principal or interest was outstanding on 31st March, 2012.
Change in Capital Structure
During the year under review there was no change in the capital
structure of the Company.
The Company has redeemed 6% Redeemable Secured Optionally Convertible
Debentures (OCD) amounting to Rs. 2,500 millions on its maturity.
The equity shares continue to be listed on the Bombay Stock Exchange
Ltd. (BSE) and The National Stock Exchange of India Ltd. (NSE). The
annual listing fee for the next financial year 2012-13 has been paid to
both the Stock Exchanges. The FCCBs are listed with Singapore Exchange.
During the year, there was no change among the Directors except Mr
Sachikanta Mishra has been inducted by IFCI Limited as Nominee Director
on the Board of the Company on 13th February, 2012.
In accordance with the provisions of Section 255 and Section 256 of the
Companies Act, 1956 and Articles of Association of the Company, Mr Om
Prakash Garg and Capt. Hiteshi Chander Malik, Directors of the Company,
who retires by rotation, at the ensuing Annual General Meeting, and
being eligible, offer themselves for re-appointment. The Board
recommends their re-appointment.
Brief resume of the Directors proposed to be re-appointed, nature of
their expertise in specific functional areas and names of the companies
in which they hold directorship and membership/ Chairmanship of
Committees of the Board, as stipulated under Clause 49 of the Listing
Agreement are provided in the Notice for ensuing Annual General
Human Resource Development
Your company believes that human resources are the main assets of the
Company and hence continues to be committed to the skill development
and upgradation of its human resources through various training
programmes, welfare activities and creating an environment which is
conducive for optimum performance.
Corporate Social Responsibility
Shiv-Vani upholds a deep conviction in Corporate Social Responsibility
(CSR) while translating of operations and business in reality at ground
level. The Initiative and social efforts has fortified the organization
in the direction of social responsibilities while working in the
remotest corner of the country. In fact it is a unique opportunity in
reaching to the far flung areas of our country to meet the business
In the process we thought of utilizing this opportunity in the benefit
of local people, by taking of some proven initiatives so as, atleast
they could see the light of development. Our nature of business is such
that we have to remain at one place for at least couple of months to
meet the contractual requirements.
The following initiatives have been taken up at our working sites under
Strengthen the villagers: Under this programme we take up the
responsibility of educating our young and old people from the nearby
villages along with our crewmembers about the importance of Yoga and
Meditation in building up a strong and healthy village population. We
know that these people are very close to nature, so if the natural
method of strengthening their physical and mental faculties are
utilized, then it will bring wonder to our village population. Our
ancient Rishis and Saints had been teaching throughout their lives a
way of living to safeguard and to provide awakened civilization moving
in forward direction in their time. As it has been a proven method and
the time tested in centuries, We have taken this initiative to
regenerate a strong and resurgence village with a meaningful social
Blood Donation Camp: We have also organized at times with the help of
local health agencies / Red Cross. The blood donation camp, so as our
crew and local people could be encouraged to donate the blood for the
needy persons. It is a greediness services and this must be cultured
and developed as habit with our local villagers. We know that there is
no harm in donating blood atleast twice in a year.
Social Forestry: We have taken up this initiative to educate people for
maintaining for ecological balance by planting trees wherever it is
mercilessly destroyed. The deteriorating areas of Jungles and the
denuded mountains are example of environmental and ecological mess
committed by our generation. This is the greatest challenge before the
modern civilisation, while maintaining its march to development and
We have noted the importance of plantation around our working areas. We
goes for plantation in large scale and we also encourage the villagers
to go for it. We provide saplings of those plants which could be useful
in those areas.
All the above efforts strengthen the organization in establishing the
relationship with remote villagers and a dialogue for possible social
development gets established.
Internal Control System
Your company believes that internal controls are vital element of
management and freedom should be exercised with suitable controls and
limitations. Your company left no stone unturned in ensuring an
effective internal control environment that provides operational
efficiency and appropriate security of its assets. This can be achieved
by continuously following the well established and robust processes of
internal audit. As such we have adequate internal control systems for
business processes across various profit and cost centers with regard
to efficiency of operations, financial reporting, compliance with
applicable laws and regulations etc.
Directors'' Responsibility Statement
Pursuant to the requirement under Section 217 (2AA) of the Companies
Act, 1956, your Directors confirm that:
(i) In preparation of the annual accounts for the financial year
2011-12, the applicable accounting standards have been followed and no
material departures have been made from the same;
(ii) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit of
the Company for that year;
(iii) The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company, and for preventing and detecting fraud and other
(iv) The Directors have prepared the annual accounts on a going concern
CEO / CFO Certification
Pursuant to the requirement of clause 49 of the Listing Agreement CEO
and CFO certification is attached with Annual Report. CEO and CFO also
submits their certificates while placing the financial results before
Code of conduct for Directors and senior management personnel
The code of conducts has been placed on the web site of the Company.
All the directors and senior management personnel have affirmed the
compliances with these codes during the financial year 2011-12.
Auditors and their Report
M/s Vijay Prakash Gupta & Associates, Chartered Accountants, Statutory
Auditors of the Company will retire at the conclusion of the ensuing
Annual General Meeting and are eligible for reappointment.
The Company has received from M/s Vijay Prakash Gupta & Associates,
Chartered Accountants the consent letter for appointment as Statutory
Auditors of the Company for the financial year 2012-13, declaration
under Section 224(1B) of the Companies Act, 1956 and Peer Review
Certificate issued by the Institute of Chartered Accountants of India.
They have further declared that they are not disqualified for such
appointment/ re-appointment within the meaning of Section 226 of the
Companies Act, 1956.
The Audit Committee and the Board of Directors recommend appointment of
M/s Vijay Prakash Gupta & Associates, Chartered Accountants as the
Statutory Auditors of the Company for the financial year 2012-13 for
The observations made in the Auditors'' Report are self explanatory and
does not call for any further clarifications under Section 217(3) of
the Companies act, 1956.
Subsidiary Companies & Consolidated Financial Results
During the year under review Shiv-Vani Infra Limited has been
incorporated as wholly owned subsidiary of the Company.
Consolidated Financial Statements pursuant to Clause 41 of the Listing
Agreement entered into with the Stock Exchanges and prepared in
accordance with the Accounting Standards prescribed by the Institute of
Chartered Accountants of India, are attached for your reference.
In line with the general exemption granted by the Ministry of Corporate
Affairs vide Circular No 2/2011 dated 8th February, 2011, the report
and accounts of the subsidiary companies are not required to be
attached to the company''s accounts. Any shareholder of the Company, who
wishes to obtain the report and account of subsidiaries, may send a
request in writing to the Company Secretary at the registered office of
The Annual Accounts of the subsidiary companies are kept open for
inspection by any shareholders at the registered office of the Company
and of the concerned subsidiary company.
In compliance with the terms of the exemption, summary of financial
information for each subsidiary which includes Capital, Reserves, Total
Assets, Total Liabilities, Details of Investment, Turnover, Profit
before taxation, Provision for taxation, Profit after taxation and
proposed dividend has been attached with this annual report.
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, a detailed report on the Corporate Governance system and
practices of the company is given in a separate section in this annual
report. Additional information for the shareholders is given in
Additional Shareholders'' Information section.
The requisite Certificate from the Auditors of the Company confirming
compliance with the conditions of Corporate Governance as stipulated
under the aforesaid Clause 49, is attached to this report.
Management Discussion and Analysis
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, Management Discussion and Analysis Report is presented
separately forming part of this report.
Particulars as per Section 217 of the Companies Act, 1956.
The information relating to the Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo required under
Section 217(1)(e) of the Companies Act, 1956, is set out in a separate
statement attached to this Report and forms part of it.
In accordance with the provisions of Section 217(2A) read with the
Companies (Particulars of Employees) Rules, 1975, the names and other
particulars of employees are provided in Annexure-2 attached with this
Investor Relations have been cordial during the year. As a part of
compliance, the Company has an Investor Grievance Committee to redress
the issues relating to investors. The details of the Committee are
provided in the Corporate Governance Report forming part of the Annual
Your Directors take this opportunity to express their sincere
appreciation for the excellent support and cooperation extended by the
stakeholders, customers, suppliers, bankers and other business
associates including financial institutions, banks, Central & State
Government authorities during the year under review.
Your Directors place on record their deep appreciation for the
exemplary contribution made by employees at all levels. Their dedicated
efforts and enthusiasm have been pivotal to your Company''s growth.
For and on behalf of the Board
Shiv-Vani Oil & Gas Exploration Services Limited
New Delhi (Prem Singhee)
September 3, 2012 Chairman & Managing Director