(i) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company.
The credit risk for trade receivables (net of loss allowance) based on the information provided to key management is as follows:
The Company uses a provision matrix to measure the lifetime expected credit loss allowance for trade receivables.
In measuring the expected credit losses, trade receivables are grouped based on shared credit risk characteristics and days past due.
In calculating the expected credit loss rates, the Company purely considers historical loss rates which management is of the view that the historical conditions are representative of the conditions prevailing at the balance sheet date.
Trade receivables are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company.
Terms/ rights attached to equity shares
The Company has only one class of equity shares having a face value of Rs.2 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
During the period of 5 years immediately preceding the balance sheet date:
- The Company issued no shares without payment being realized in cash.
- Allotted no Bonus Shares
- No Shares have been bought back
Shares reserved for issue under Options
Maximum number of options that may be granted under the scheme is 1.843 million equity shares of INR 2/- each. Options granted during the year - Nil (upto 31st March 2024: 1.843 million equity shares of INR 2/- each). Options lapsed during the year - 0.0876 million equity shares of INR 2/- each (upto 31st March 2024: 1.200 million equity shares of INR 2/-each). Options exercised during the year: Nil (upto 31st March 2024: 0.160 million equity shares of INR 2/- each). Options outstanding at the end of the year: 0.395 million equity shares of INR 2/- each (upto 31st March 2024: 0.483 million equity shares of INR 2/- each). Options yet to be granted under the scheme: Nil equity shares of INR 2/- each (31st March 2024: Nil equity shares of INR 2/- each).
1. Loans under (a) above are secured by first mortgage on lands owned by the Company. The Loan is under default for a period of 8 years.
2. Loans under (b) is Unsecured and is under default for a period of 8 years.
3. As per IND AS, the Preference Share capital is grouped under borrowings and is under default for a period of 8 to 10 years.
4. Since all term loans have been recalled by the lenders, the entire term loans are presented as current liabilities.
i. All the secured lenders of term loans (banks) have issued recall notices in the earlier years. Also one of the secured lenders has issued notice dated 7th May, 2018 under section 13(2) of Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act , 2002 (SARFAESI Act) through the security trustee calling upon the company to pay the outstanding amount with interest in 60 days from the date of notice, failing which the bank would exercise the powers under section 13(4) of SARFAESI Act. The lender has filed an application under Sec 7 of IBC (Insolvency and Bankruptcy Code) in NCLT (National Company Law Tribunal), Chennai and its pending.
ii. The Company has not redeemed its Non-Convertible Cumulative Redeemable Preference Shares on due dates. Two of the preference shareholders of the Company has filed a commercial suit before the Honourable High Court of Judicature at Bombay and these cases are pending before the Honourable High Court. One of the preference shareholder had filed petitions under section 55 of the Companies Act, 2013 / under section 80 of the Companies Act, 1956 before the Honourable National Company Law Appellate Tribunal (“NCLAT”), Delhi for non-redemption of Non-Convertible Cumulative Redeemable Preference Shares. NCLAT remitted the case back to National Company Law Tribunal (“NCLT”), Chennai for fresh consideration. The outcome is awaited.
iii. One of the Preference shareholders has filed a class action suit against the Company for Non-redemption of preference shares before National Company Law Tribunal New Delhi and the next hearing is on 12th June, 2025.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The group categorizes assets and liabilities measured at fair value into one of three levels depending on the ability to observe input employed in their measurement. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are inputs that are observable, either directly or indirectly, other than quoted prices included within level 1 for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability reflecting significant modifications to observable related market data or the company's assumptions about pricing by market participants.
The Company's activities expose it to market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. The Company's overall risk management strategy seeks to minimize adverse effect from the unpredictability of financial markets on the Company's financial performance.
The Board of Directors is responsible for setting the objectives and underlying principles of financial risk management for the Company. They review and agree on the policies for managing each of these risks and are summarized as follows:
Foreign exchange risk
The Company is exposed to foreign exchange risk principally via:
• Transactional exposure that arises from the sales / receivables denominated in a currency other than the functional currency of the Company.
The impact on the Company financial statements from foreign currency volatility is shown in the sensitivity analysis. Sensitivity analysis
The sensitivity analysis reflects the impact on income and equity due to financial instruments held at the balance sheet date. It does not reflect any change in sales or costs that may result from changing interest or exchange rates.
The following table shows the illustrative effect on the Income Statement and equity that would result, at the balance sheet date, from changes in currency exchange rates that are reasonably possible for major currencies where there have recently been significant movements:
A decrease in interest rates and a depreciation of foreign currencies would have the opposite effect to the impact in the table above.
Credit risk
a) Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The major classes of financial assets of the Company are bank deposits, trade receivables, amounts due from associated company and amounts due from subsidiary corporations. For bank deposits, the Company maintains its cash deposits if any primarily with lenders of the Company or financial institutions with high credit quality to minimize their exposure to the banks.
b) Due to the nature of the Company's operations, revenue and receivable are typically concentrated amongst a relatively small customer base of oil and gas companies. Customers are government linked based oil and gas corporations. The Company has policies in place to ensure that drilling contracts are with customers of adequate financial standing and appropriate credit history, and where necessary, certain guarantees are in the form of bank. The maximum exposure to credit risk for each class of financial assets is the carrying amount of that class of financial assets on the balance sheet.
(i) Financial assets that are neither past due nor impaired
Bank deposits that are neither past due nor impaired are mainly deposits with banks with high credit-ratings assigned by international credit-rating agencies. Trade receivables that are neither past due nor impaired are substantially receivables from companies with a good collection track record with the Company. Amounts due from subsidiary corporations are neither past due nor impaired.
(ii) Financial assets that are past due and/or impaired
There is no other class of financial assets that is past due and/or impaired except for trade receivables. The age analysis of trade receivables that are past due but not impaired is as follows:
Allowance for impairment of trade receivables arise from customers that are either in financial difficulties and/or have history at default or significant delay in payments which management is of the opinion that payments are not forthcoming as at the end of the financial year.
In the event that payment is doubtful, the receivables will be recommended for writing off.
Liquidity risk
The drilling operations of the Company require substantial investment and are dependent on its ability to finance its rig construction and acquisitions and service its bank borrowings as well as other capital and operating requirements and commitments. The Company ensures that arrangements have been made to obtain adequate funds to meet all its operating and capital obligations in the form of continuing committed credit facilities with financial institutions to enable them to meet its debts and liabilities as and when they fall due for at least 12 months from the balance sheet date.
The table below analyses the maturity profile of the Company's and the Company's financial liabilities based on contractual undiscounted cash flows at the balance sheet date.
The above amounts of Bank and other borrowings and Non-Convertible Cumulative Redeemable Preference Shares are overdue for payments.
Capital Management
The Company's objectives when managing capital are to ensure the Company's ability to continue as a going concern and to maintain an optimal capital structure by issuing or redeeming additional equity, borrowings and other instruments when necessary.
As the Company is mainly funded through external borrowings, the objectives of the Board of Directors when managing capital is to ensure that the Company continues to enjoy the use of funds from borrowings by ensuring that the Company continue to service its debt obligations in the form of interests and principal repayments on due dates in accordance with the borrowing agreements, and to ensure that they remain in compliance with the financial and non-financial covenants in relation to their borrowings.
Fair value measurements
The carrying amounts less impairment provision of trade receivables if any and payables are assumed to approximate their fair values. The carrying amounts of current borrowings approximate their fair value.
*Since diluted earnings per share shows higher value as compared to basic earnings when taking the options/warrants into account, the options/warrants are anti-dilutive as at the year ended 31.03.2025 and are ignored in the calculation of diluted earnings per share as required under the Accounting Standard.
21. Gratuity and other defined benefit plans
The company operates a gratuity benefit plan which is funded with an insurance company in the form of a qualifying insurance policy.
The following table summarizes the components of net benefit expense recognized in the statement of profit and loss, the funded status and the amounts recognized in the balance sheet for such plans.
(i) Post-employment obligations-Gratuity
The amount recognized in the balance sheet and the movement in the defined benefit obligation over the year is as follows:
22. Employee stock option scheme
The Company has instituted Employee Stock Option Scheme-2005 (ESOS) duly approved by the shareholders in the extra-ordinary general meeting of the company held on 23rd April 2005. As per the scheme, the compensation committee of the board evaluates the performance and other criteria of employees and approves the grant of option. These options vest with employees over a specified period subject to fulfillment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of company's equity share at the prevailing market price on the date of the grant of option.
The Securities Exchange Board of India (SEBI) issued the Employee Stock Option Scheme and Employees Stock Purchase Scheme guidelines in 1999, applicable to stock option schemes on or after 19th June, 1999. Under these guidelines, the excess of the market price of the underlying equity shares as of the date of the grant over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period.
The Company has not recognized any deferred compensation expenses, as the exercise price was equal to the market value (as defined by SEBI) of the underlying equity shares on the grant date.
The details of option granted are given below:
Maximum number of options that may be granted under the scheme is 1.843 million equity shares of INR 2/- each. Options granted during the year - Nil (upto 31st March 2024: 1.843 million equity shares of INR 2/- each). Options lapsed during the year - 0.0876 million equity shares of INR 2/- each (upto 31st March 2024: 1.200 million equity shares of INR 2/- each). Options exercised during the year: Nil (upto 31st March 2024: 0.160 million equity shares of INR 2/-each). Options outstanding at the end of the year: 0.395 million equity shares of INR 2/- each (upto 31st March 2024: 0.483 million equity shares of INR 2/- each). Options yet to be granted under the scheme: Nil equity shares of INR 2/- each (31st March 2024: Nil equity shares of INR 2/- each).
26. Contingent Liabilities
Claims against the company not acknowledged as debt:
As at 31st March 2025:
(i) In respect of civil suits against the Company — Rs. 94.50 million (Previous Year Rs. 94.50 million)
(ii) In respect of Income Tax Matters:
Income Tax dues relating to the period 2002 - 2006 amounting to Rs. 628.25 million (Previous Year - Rs.628.25 million) pending before the Hon'ble High Court of Madras.
Income Tax dues relating to the period 2006 - 2008 amounting to Rs. 719.68 million (Previous Year - Rs.719.68 million) pending before the Hon'ble High Court of Madras.
Income Tax dues relating to the period 2008 - 2009 amounting to Rs.447.72 million (Previous Year - Rs.447.72 million) pending before the Hon'ble High Court of Madras.
Income Tax dues relating to the period 2009 - 2010 amounting to Rs. 688.70 million (Previous Year - Rs.688.70 million) pending before the Hon'ble High Court of Madras.
Income Tax dues relating to the period 2009 - 2010 amounting to Rs. 702.40 million (Previous Year - Rs.702.40 million) pending before the Income tax Appellate Tribunal, Chennai.
Income tax dues relating to the period 2010-2011 amounting to Rs. 1,907.94 million (Previous Year - Rs.1,907.94 million) pending before the Hon'ble High Court of Madras.
Income tax dues relating to the period 2010-2011 amounting to Rs. 297.73 million (Previous Year - Rs.298.88 million) pending before the Commissioner of Income-tax Appeals, Chennai.
Income tax dues relating to the period 2011-2012 amounting to Rs. 854.33 million (Previous Year - Rs.854.33 million) pending before the Hon'ble High Court of Madras.
Income tax dues relating to the period 2012-2013 amounting to Rs. 1490.36 million (Previous Year - Rs. 1490.36 million) was remitted back to the Dy. Commissioner of Income tax, Chennai by the Income Tax Appellate Tribunal, Chennai for verification. The Dy. Commissioner of Income tax after due verification has passed the consequential order thereby deleting the demand. However, the Income tax department has preferred an appeal against the order of
the Income Tax Appellate Tribunal before the Hon'ble High Court of Madras. The appeal is pending before the Hon'ble High Court of Madras.
Income tax dues relating to the period 2013-2014 amounting to Rs. 1081.23 million (Previous Year - Rs. 1081.23 million) pending before the Income Tax Appellate Tribunal, Chennai. The appeal was heard, and the file has been remitted back to the Dy. Commissioner of Income Tax, Chennai for verification. The consequential order is awaited.
Income tax dues relating to the period 2013-2014 amounting to Rs. Nil (Previous Year - Rs. 52.22 million) was pending before the Income Tax Appellate Tribunal, Chennai. The appeal was heard, and the demand was deleted.
Income tax dues relating to the period 2014-15 amounting to Rs. 335.50 million (Previous Year - Rs.335.50) pending before the Hon'ble High Court of Madras.
Income tax dues relating to the period 2014-2015 amounting to Rs. 309.57 million (Previous Year - Rs. 309.57 million) pending before the Income Tax Appellate Tribunal, Chennai.
Income tax dues relating to the period 2014-2015 amounting to Rs. 2.59 million (Previous Year - Rs. 2.59 million) pending before the Commissioner of Income Tax (Appeals), Chennai.
Income tax dues relating to the period 2015-16 amounting to Rs.541.92 million (Previous Year - Rs. 541.92 million). Remitted back to the Deputy Commissioner by the Income tax Appellate Tribunal, Chennai for verification.
Income tax dues relating to the period 2016-2017 amounting to Rs. 50.87 million (Previous Year - Rs. 50.87 million). The Company preferred an appeal before the Income Tax Appellate Tribunal, Chennai.
Income tax dues relating to the period 2017-18 amounting to Rs.14.13 million (Previous year: Nil). The Company preferred an appeal to the Commissioner of Income tax (Appeals), Chennai.
Income tax dues relating to the period 2018-19 amounting to Rs 1.20 million (Previous Year - Rs 1.20 million) pending before the Deputy Commissioner of Income-tax, Chennai.
(iii) In respect of Service Tax and Goods and Service Tax Matters:
Service Tax dues relating to the year 2006-2011 amounting to Rs. 78.73 million (Previous Year Rs. 78.73 million) was pending before the CESTAT Chennai. The order was passed against the Company. The Company has preferred an appeal against this order before the Hon'ble Supreme Court of India. The appeal is yet to be heard by the Hon'ble Supreme Court.
Service Tax dues relating to the period 2011 - 2012 amounting to Rs. 18.94 million (Previous Year -Rs.18.94 million) pending before the CESTAT, Chennai.
Service Tax Dues relating to the period 2006-07 amounting to Rs.46.76 million (Previous Year -Rs. 46.76 million) was pending before the Hon'ble Supreme Court of India. The appeal has been disposed of by the Hon'ble Supreme Court in view of the low tax effect. Consequent with this order there are no dues outstanding relating to this appeal file by the Service tax department.
Service Tax dues relating to the period 2012 - 2014 amounting to Rs. 36.78 million (Previous Year - Rs. 36.78 million) pending before the CESTAT, Chennai.
Service Tax dues relating to the period 2014 - 2015 amounting to Rs. 79.80 million (Previous Year - Rs. 79.80 million) pending before the CESTAT, Chennai.
Service Tax dues relating to the period 2005 - 2011 amounting to Rs. 37.31 million (Previous Year - Rs. 37.31 million) pending before the CESTAT, Chennai.
Service Tax dues relating to the period 2012 - 2014 amounting to Rs. 236.49 million (Previous Year - Rs. 236.49 million) pending before the CESTAT Chennai.
Service Tax dues relating to the period 2015 - 2016 amounting to Rs. 0.60 million (Previous Year - Rs. 0.60 million) pending before the CESTAT, Chennai
Service Tax dues relating to the period 2015 - 2017 amounting to Rs. 223.02 million (Previous Year - Rs. 223.02 million) pending before the CESTAT Chennai
Service Tax dues relating to the period 2008 - 2010 amounting to Rs.605.75 million (Previous Year - Rs. 605.75 million). The CESTAT Mumbai disposed of the matter deleting the demand. However, the Department has filed an appeal before the Supreme Court and is pending to be heard.
Service Tax dues relating to the period 2009 - 2012 amounting to Rs. 166.89 million (Previous Year - Rs. 166.89 million) pending before the CESTAT Mumbai.
Service Tax dues relating to the period 2013-2015 amounting to Rs. 6.31 million (Previous Year Rs. 6.31 million) pending before the CESTAT, Mumbai
Service Tax dues relating to the period 2017-2018 amounting to Rs. 49.96 million (Previous Year - Rs. 49.96 million) pending before the CESTAT, Chennai
Goods and services tax dues relating to the period 2017-2018 amounting to Rs.13.92 million (Previous Year - Rs. 13.92 million) pending before the Appellate Authority.
Goods and services tax dues relating to the period 2017-2018 to 2021-22 amounting to Rs.5.53 million (Previous Year - Rs. 18.20 million) pending before the Goods and Services Appellate Tribunal.
Goods and services tax dues relating to the period 2017-2018 amounting to Rs.5.5 million (Previous Year - Rs. 5.5 million) pending before the Appellate Authority
(iv) In Respect of Sales Tax/Value Added Tax:
Sales Tax dues for the period 2010-11 amounting to Rs. 984.91 million (Previous Year - Rs. 984.91 million) pending before the Tribunal
Sales Tax dues for the period 2012-13 amounting to Rs. 459.75 million (Previous Year - Rs. 459.75 million) pending before the Tribunal.
Sales Tax dues for the period 2013-14 amounting to Rs. 587.29 million (Previous Year Rs.587.29 million) pending before the Appellate Authority.
Sales Tax dues for the period 2014-15 amounting to Rs. 667.03 million (Previous Year - Rs. 667.03 million). Writ Petition has been filed before the Hon'ble High Court of Bombay and is pending to be heard.
Sales Tax dues for the period 2015-16 amounting to Rs. 949.23 million (Previous Year - Rs. 949.23 million). Writ Petition has been filed before the Hon'ble High Court of Bombay and is pending to be heard.
Sales Tax dues for the period 2016-17 amounting to Rs. 846.00 million (Previous Year - Rs. 846.00 million) Writ Petition has been filed before the Hon'ble High Court of Bombay and is pending to be heard.
Sales Tax dues for the period 2017-18 amounting to Rs. 155.68 million (Previous Year - Rs.155.68 million) pending before the Hon'ble High Court of Bombay and pending to be heard.
(v) In respect of Customs duty Matters:
Customs Duty dues relating to the period 2015-16 amounting to Rs. 107.90 million (Previous Year - Rs. 107.90 million) pending before CESTAT, Mumbai
28. (i) Loans and advances in the nature of loans given to subsidiaries (disclosures pursuant to Regulation 34(3) and 53(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure requirements ) Regulations,2015. The Company granted no loans and advances in the nature of loans to its subsidiaries.
30. Details of loan given, Investments made and guarantees given covered u/s 186(4) of the Companies Act, 2013
(i) Loans given to related parties and investments made in them are disclosed under the respective heads in the financial statements.
31. Going Concern:
In preparing the financial statements, the Board of Directors have considered the operations of the Company as going concern notwithstanding that as at 31st March 2025, the Company is in net current liabilities position of Rs. 12,341.62 Million (Previous Year: Rs.14,005.80 Million). The Company is also in net liabilities position of Rs.9,943.59 Million (Previous Year: Rs.11,636.35 Million) as at 31st March 2025..
In addition, as disclosed in Note 8(a) to the financial statements, the Company has defaulted on payment of their borrowings, which have fallen due and have breached the covenants of their borrowings which give the lenders the right to demand the related borrowings be due and payable immediately. The lenders have issued recall notices to the Company and all such borrowings with original repayment terms beyond 12 months from the balance sheet date have been reclassified as current liabilities. As of the date of this report, the Company is in discussions with its lenders to obtain approval for and implementation of an appropriate debt resolution plan. However, the Company will continue to be in operation in the foreseeable future.
The Management believes that the use of the going concern assumption on the preparation of the financial statements of the Company for the financial year ended 31st March 2025 is still appropriate after taking into consideration of the above actions and measures.
32. The Company do not have any fund flow from or to the ultimate beneficiary (if any) through any intermediaries during the year.
34. The Company has not traded or invested in Crypto / Virtual Currencies during the year.
35. The Company is not obligated to contribute under Social Corporate Responsibility (CSR) under section 135 of the Companies Act, 2013, during the year.
36. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
37. The Company does not have any charges or satisfaction of charges which are pending to be registered with Registrar Of Companies as at the year end.
38. The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.
39. The Company is not declared as willful defaulter by any bank or financial institution (as defined under the Companies Act, 2013) or consortium thereof or other lender in accordance with the guidelines on willful defaulters issued by the Reserve Bank of India.
40. The Company has complied with the number of layers for its holding in downstream companies prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.
41. The Company has not revalued any of its Property, Plant and Equipment during the year.
42. The Company has no transactions with any Company whose name is struck off under Section 248 of The Companies Act, 2013 or Section 560 of the Companies Act, 1956 during the year.
43. The Company does not have any capital work in progress as at the year end.
44. New or Revised Accounting Standards:
Ministry of Corporate Affairs (MCA) notifies new Standards of amendments to the existing Standards under Companies (Indian Accounting Standards) Rules as issued from time to time.
During the year ended 31st March, 2025, MCA has not notified any new standards or amendments to the existing standards which are applicable for the accounting period beginning on or after 1st April, 2025.
The accompanying notes 1 to 44 are an integral part of the financial statements
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