aban offshore (repaired)

7/30/2019 Aban Offshore (Repaired)

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RAJIV GANDHI INSTITUTE OF PETROLEUM

TECHNOLOGY, MBA DEPARTMENT

Analysis of Account Statements ofABAN OFFSHORE LTD

Submitted To: Ms. Monica Singhania

By

Puneet Bhardwaj

MBA 1stYear


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Analysis of Account Statements of Aban Offshore

2Puneet Bhardwaj

MBA 1st Year

ABAN OFFSHORE LTD

Breif Introduction:

Aban Offshore Limited (the Company) is a public company domiciled in India and

incorporated under the provisions of the Companies Act,1956. Its shares are listed on

three stock exchanges in India. The Company is engaged in the business of providing

offshore drilling and production services to companies engaged in exploration,

development and production of oil and gas both in domestic and international

markets. The Company is also engaged in the ownership and operation of wind

turbines for generation of wind power in India.


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Analysis of Balance Sheet(As on March 31st

2012)

1.)Equity & Liablities: The owners equity section of the balance sheet shows theamount the owners have invested in the entity. The owners equity section of balance

sheet is usually labelled as Shareholders equity or stockholders equity. On the other

hand liablities are obligations which exist as a result of past transactions or events.

Liablities are claims against the entities assets. Liablities that are expected to be

satisfied or extenguished during the normal operating cycle or within one year,

whichever is longer, are called current liablities.

Owners Equity:

a.)Considering the owners equity section of the balance sheet of Aban Offshre Ltd

it is found that total share capital in the year ended March 31st

2012 is Rs. 2,897.04

million which is 13.5% less as compared to previous year of Rs.3347.04 million. This

implies that the company has reduced the number of shares available in the market.

b.)In the Reserve & Surplus section of the balance sheet it is seen that reserve &

surplus in the year ended March 31st 2012 is Rs. 17,849.59 million which is a 11.78%

decrease over its previous value of Rs. 20,223.59 million. Decrease in reserve &

surplus is one of the sign of bad financial condition of the company.

c.) The Total owners equity amount to Rs. 20,746.63 million (Share Capital +

Reserve & surplus). Total owners equity has gone down by 11.98% compared to

previous year of Rs. 23,570.63 million. Decrease in owners equity signifies that

company has made loss in the current financial year.

Current Liablities:

a.) In the Current Liablities section of the balance sheet of Aban Offshre Ltd it isfound that the short-term borrowing liablities amount to Rs. 5570.69 million up

by 47.65% from the previous years value of Rs. 3772.83 million

b.)Trade payables have increased by 22.83% to Rs. 3,308.25 million from Rs.2,693.18 million


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c.) Other current liablities amount to Rs. 2,438.25 million, a fall of 54.77% fromits previous years value of Rs. 5,391.94 million

d.)Short term provision amounts to Rs. 480.72 million, a fall of 52.75% from itsprevious years value of Rs. 1,016.43 million.

e.) Total Current liabilities amount to Rs. 11,797.91 million, down by 8.36% fromits previous years value of Rs. 12,874.38 million.

Non-Current Liablities:

a.)Long-term borrowings stood at Rs. 19,086.27 million, an increase of 4.43%from the previous year value of Rs. 19,973.40 million. This implies that long term

debt of company has increase in the current financial year.

b.)Deffered tax liablities amount to Rs. 268.56 million, down by 8.22% from theprevious year value of Rs. 291.93 million.

c.)Long-term provisions stood at Rs. 18.18 million, an increase of 44.76% from theprevious year value of Rs. 12.70 million.

d.)Total Non-current liabilities amount to Rs. 19,373.06 million, up by 14.66%from the previous year value of Rs. 20,278.08 million.

Total Liablities & Owners equity for Aban Offshore Ltd for the financial

year ending March 31st 2012 amount to Rs. 51,917.60 million

2.)Assets: Assets are economic resources that are controlled by an entity & whose costat the time of acquisition can be objectively measured. Assests can broadly be current

or non-current assets. Current assets are those which can be realized in cash or sold or

consumed during the normal operating cycle or within one year, whichever is longer.

Current Assets:

a.)Total value of inventories available as on March 31st 2012 is worth Rs. 814.92million. Inventory are the aggregate of those items that are either held for sale in

the ordinary course of business or soon to be consumed in the production of goods

or services that will be available for sale.

b.)Trade receivables amount to Rs. 2,209.62 million.


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c.)Total cash & bank balance amounts to Rs. 279.28, down by 65.55% from theprevious year value of Rs. 810.04 million. Reduction of Cash & Bank balance

signifies that the company either has occoured losses or has made asset purchase.

d.)Total value ofShort - term loans and advances stood at Rs. 3,116.24 million,down by 60.5% from the previous year value of Rs. 7,890.22 million.

e.)Other current assests amounts to Rs. 10.22 million.f.)Total Current Assets stood at Rs. 6,430.28 million, down by 46.96% from the

previous year value of Rs.12123.14 million

Non-current asset:

a.)Tangible assets stood at Rs. 5,738.65 million, up by 19.51% from their previousvalue of Rs. 4,798.83 million. Tangible assets are those who havea physical form.Tangible assets include assets such as machinery, buildings, land etc. An increase

in vale of tangible assets implies that the company has purchased assets in the

financial year.

b.)Capital work-in-progress increased from Rs. 175.09 million by 40% to Rs.245.11 million. Capital work-in progress for Aban Offshore can be drilling

activites, oil extraction, pipline commisioning etc.

c.) Non - current investments amount to Rs.39,471.29 million, down marginally by0.3% from their previous value of Rs. 39590.69 million

d.)Long - term loans and advances stood at Rs. 32.27 million.e.)Total Non-Current Assets amount to Rs. 45,487.32million.Total Assets(Current + Non-Current) for Aban Offshore Ltd for the financial

year ending March 31st

2012 amount to Rs. 51,917.60 million


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Analysis of P&L(Profit & Loss) Statement For the year ended 31st

March 2012

1.)Revenue/Income: The inflows of assetscash or account receivable that resultsfrom the sale of goods & services to customers; these amounts are called

revenues.

a.)Revenue from operations stood at Rs. 6,385.28 million, down by 46.37% fromtheir previous value of Rs. 11,907.43. a reduction of revenue from operations

directly signifes the reduction in business of Aban offshore in the financial year

ending March 31st

2012

b.)Other income stood at Rs. 758.85 million

Total Revenue for Aban Offshore Ltd for the financial year ending March 31st

2012 amount to Rs. 7,144.13 million

2.)Expenses: The consumption of of resources that were required in order togenerate the revenues are expenses. Following is the description of expenses ofAban offshore for the financial year ending March 31st 2012.

a.)Consumption of stores, spares, power and fuel = Rs. 474.33 millionb.)Employee benefits expense = Rs. 739.18 millionc.)Finance costs = Rs. 3,662.53 milliond.)Depreciation and amortization expense = Rs. 986.10 millione.)Other Expenses = Rs. 2,512.68 million

Total Expenditure for Aban Offshore Ltd for the financial year ending March

31st

2012 is Rs. 8,374.82

3.)Profit/Loss before tax (PBT):


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Profit / (loss) before tax = IncomeExpenses = 7,144.13 - 8,374.82 = (1,230.69)

PBT of Aban Offshore = Rs. (1230.69) million

4.)Profit/Loss for the year:Profit/(loss) for the year = PBTTax expenses

In the P&L statement of Aban Offshore Ltd there are no current taxes paid in

financial year ending March 31st

2012. Although, there are Deferred taxes amounting

Rs. 23.38 million. Therefore,

Profit/(loss) for the year = (1230.69) + 23.38 = Rs. (1,207.31) million

For the financial year ending March 31st

2012, Aban Offshore Ltd has incurreda loss of Rs. 1,207.31 million


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Analysis of Cash Flow Statement For the year ended 31st

March 2012

1.)Cash Flow: As per the data available in annual report of Aban Offshore Ltd forthe financial year 2011-12 ended March 31

st2012, the componets of Cash flow

statement are as follows:

a.)Net cash flow from / (used in) operating activities(A) = Rs.2,583.93 millionb.)Net cash flow from / (used in) Investing activities(B) = Rs. (1,575.93) millionc.)Net cash flow from (used in) financing activities(C) = Rs. (1539.77) million

Net Increase/Decrease in Cash = A + B + C = Rs. (531.77) million

Cash and cash equivalents at the end of the year = Net increase / decrease in

cash + Effect of exchange differences on cash and cash equivalents held in foreign

currency + Cash and cash equivalents at the beginning of the year

Net increase / decrease in cash = Rs. (531.77) million

Effect of exchange differences on cash and cash equivalents held in foreign

currency = Rs.1.01 million

Cash and cash equivalents at the beginning of the year = Rs. 810.04 million

Cash and cash equivalents of Aban Offshore Ltd at the end of the year =

(531.77) + 1.01 + 810.04 = Rs.279.28 million


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Inference

Following Infrences can be made about the financial condition of Aban Offshore Ltd

from the analysis of the account statements:

From the profit & loss statement, it is clear that Aban Offshore has incurred anet loss of Rs. 1207.31 million in the financial year ending March 31

st2012.

Losses incurred this year has negatively impacted the cash and cash equivalentsof Aban Offshore Ltd at the end of the year. Total cash & bank balance at the

end of year amounts to Rs. 279.28, down by 65.55% from the previous year

value of Rs. 810.04 million.

Effect of losses can also be observed in Reserve & Surplus section of thebalance sheet. It is seen that reserve & surplus in the year ended March 31st2012 is Rs. 17,849.59 million which is a 11.78% decrease over its previous

value of Rs. 20,223.59 million.

Total owners equity has gone down by 11.98% compared to previous year ofRs. 23,570.63 million & it now stands at Rs.20,746.63 million. Decrease in

owners equity can be attributed to the financial losses that company incurred in

the financial year ending March 31st

2012.

Current Ratio for the financial year ending March 31

st

2012 = Currentassets/Current Liablity = 6,430.28/ 11,797.91 = 0.54 . The current ratio shows

poor financial condition of the Aban Offshore Ltd. They must take measure for

a prompt recovery from the current finacial status.

aban offshore (repaired)

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