1

1

NOTICE TO MEMBERS

NOTICE is hereby given that the SEVENTEENTH Annual General Meeting

of the members of Aban Loyd Chiles Offshore Ltd. will be held on

Friday, the 26th September 2003 at 11.00 A.M. at the Auditorium of Madras

School of Social Work, 32 Casa Major Road, Egmore, Chennai 600 008 to

transact the following business:

Ordinary Business1. To consider and adopt the Balance Sheet as at 31st March 2003 and

the Profit and Loss Account for the year ended on that date and the

report of the Directors’ and Auditors’ thereon.

2. To declare a Dividend for the year ended 31st March 2003.

3. To appoint a Director in place of Mr. P. Murari who retires by rotation

and being eligible offers himself for re-appointment.

4. To appoint a Director in place of Mr.V. S. Rao who retires by rotation

and being eligible offers himself for re-appointment.

5. To appoint a Director in place of Mr. Reji Abraham who retires by

rotation and being eligible offers himself for re-appointment.

6. To appoint Auditors and fix their remuneration.

Special Business7. To consider and if thought fit, to pass, with or without modification(s)

the following Resolution as a Special Resolution:

"RESOLVED THAT subject to necessary approvals as may be

necessary and pursuant to Section 198, 269, 309, 311 and all other

applicable provisions of the Companies Act, 1956 read with Schedule

XIII to the Act, the Company hereby approves the revision in

remuneration payable to Mr. M.A.Abraham, the Managing Director of

the Company for a period with effect from 1st February 2003 to

23rd October 2004 on the terms and conditions as to remuneration

as set out below.

A. Remuneration:a) Salary

In the range of Rs.1,00,000/- to Rs.2,00,000/- per month.

b) PerquisitesI) Housing

Expenditure by the Company on hiring furnished accommodation

shall be subject to a ceiling of 60 per cent of salary.

If the Company does not provide accommodation to the

Managing Director the HRA will be paid to him @ 60 per cent of

Salary.

Gas, electricity, water or reimbursement of expenses in lieu

thereof shall be in accordance with the schemes and rules of the

Company.

II) Medical Reimbursement:

Reimbursement of expenses incurred for self and family subject

to a ceiling of one month’s salary in a year or three months salary

over a period of three years and Medical Insurance premium be

paid up to Rs.50,000/- p.a.

III) Leave Travel Concession

Reimbursement of expenditure incurred for the Director and his

family once in a year subject to a maximum of one month’s salary.

IV) Club Fees

Actual fees for a maximum of two clubs. No admission and / or

life membership fees will be paid.

V) Personal Accident Insurance

The premium shall be paid as per the rules of the Company.

VI) a. Company’s contribution towards Provident Fund as per the

Rules of the Company but not exceeding 12 per cent of the

salary.

b. Company’s contribution towards Superannuation Fund as per

the rules of the Company, but it should not together with the

Company’s contribution to Provident Fund exceed 27 per cent of

the salary.

Contribution to Provident Fund and Superannuation Fund shall

not be included in the computation of ceiling on perquisites to the

extent these either singly or put together are not taxable under

the Income Tax Act.

VII) Gratuity shall not exceed half a month’s salary for each completed

year of service.

VIII) Car for use on Company’s business and telephone at residence

will not be considered as perquisites. Personal long distance calls

on telephone and use of car for private purpose shall be billed by

the Company.

IX) Leave :

Privilege Leave:

On full pay and allowance as per the Rules of the Company.

Encashment of leave at the end of the tenure will not be included

in the computation of ceiling on perquisites. He will also be

entitled to Casual Leave and Sick Leave as per the Leave Rules of

the Company.

Retirement Benefits:

The Managing Director is eligible for retirement benefits by way

of pension of Rs.1,50,000/- (Rupees One lakh fifty thousand only)

per month with an annual increase in benefits @ 5% during his

lifetime and then to his spouse during her lifetime.

The Managing Director is also eligible for reimbursement of

Medical Expenses incurred by him and his spouse after his

retirement during their lifetime subject to a ceiling of

Rs. 5,00,000/- (Rupees five lakhs only) per year which can be

accumulated upto a maximum period of 5 (five) years.

Aban Loyd Chiles Offshore Ltd.Regd. Off: Janpriya Crest, 113, Pantheon Road, Egmore, Chennai - 600 008

2

c) Commission

1 (one) per cent of the net profits of the Company subject to the

overall ceiling laid down under Sections 198 and 309 of the

Companies Act, 1956.

The Board or any Committee thereof, be and is hereby

authorised in its absolute discretion and from time to time to fix

within the range stated above the salary payable to

Mr. M.A.Abraham.

B. Minimum RemunerationNotwithstanding anything stated herein, where in any financialyear during the currency of tenure of the Managing Director, theCompany has no profit or its profits are inadequate, the Companyshall pay the remuneration in accordance with the provisions ofSection II of Part II of Schedule XIII of the Companies Act, 1956as amended from time to time.

8. To consider and if thought fit to pass with or without modification(s)the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 163 of theCompanies Act, 1956 the consent of the Company be and is herebyaccorded for keeping the Register of Members and Index of Membersof the Company at the office of the Company’s Registrar and ShareTransfer Agent, M/s Cameo Corporate Services Limited atSubramanian Building, No.1 Club House Road, Chennai – 600 002”.

“RESOLVED FURTHER THAT the Company be and is hereby ratifyand approve the acts, if any, done by the Board of Directors in thisregard”.

9. To consider and if thought fit to pass with or without modification(s)the following Resolution as a Special Resolution:

“RESOLVED THAT subject to the applicable provisions of theCompanies Act, 1956 (including any statutory modification(s) orre-enactment thereof for the time being in force and as may beenacted hereinafter), the Securities and Exchange Board of India(Delisting of Securities) Guidelines, 2003 and subject to suchapprovals, permissions and sanctions, as may be necessary and subjectto such conditions and modifications as may be prescribed or imposedwhile granting such approvals, permissions and sanctions, which maybe agreed to, by the Board of Directors of the Company (hereinafterreferred to as ‘the Board’, which term shall be deemed to include anyCommittee thereof for the time being, exercising the powersconferred on the Board by this Resolution) the consent of theCompany be and is hereby accorded to the Board to delist theCompany’s Equity Shares from The Delhi Stock Exchange AssociationLtd.”

“RESOLVED FURTHER THAT the Board be and is hereby authorisedto take all necessary steps in this regard in order to comply with thelegal and / or procedural formalities, including authorising anyCommittee of Directors or any of the Directors /Officers/Executivesof the Company to do all such acts, deeds or things to give effect tothe above.”

By Order of the Board

Chennai C.P. Gopalkrishnan

14th July, 2003 Director (Finance) & Secretary

Notes:1. A member entitled to attend and vote at the Meeting is entitled to

appoint a proxy who need not be a Member of the Company.

2. The instrument appointing proxy, in order to be effective should be

lodged at the Registered Office of the Company not less than

48 hours before the Meeting.A blank proxy form is attached.

3. Explanatory Statement pursuant to Section 173(2) of the Companies

Act,1956 relating to the Special Business to be transacted at the

Meeting is annexed hereto.

4. The Register of Members and Share Transfer Book will remain closed

from 19th September 2003 to 26th September 2003 (both days

inclusive).

5. Members are requested to intimate the Company regarding any

change in their address immediately to Company’s Registrar and Share

Transfer Agent.

6. As on austerity measure, copies of the Annual Report will not be

distributed at Annual General Meeting. Members are requested to

bring their Copies to the Meeting.

7. Members who hold shares in dematerialised form are requested to

bring their client ID and DP ID numbers for easy identification of

attendance at the Meeting.

8. Members are requested to send the Bank Account details to ensure

safe and prompt receipt of dividend warrants and to avoid any

fraudulent encashment of such warrants.

9. Members and Proxies should bring the attendance slips duly filled in

for attending the Meeting.

10. The Dividend will be paid on or after 30th September 2003 to

members whose names appear in the Register of Members as on 26th

September 2003, however subject to the provisions of the Companies

Act, 1956.

11. Members holding shares in Electronic Forms are advised that their

address and Bank details as furnished to the Company by the

respective Depositories viz. NSDL & CDSL will be printed on the

dividend warrants. Shareholders holding shares in the Physical form

who wish to avail ECS facility may authorise the Company with their

ECS Mandate in the prescribed form which can be downloaded from

the Website : www.abanindia.com or can be obtained from the

Company’s Registrar and Share Transfer Agent M/s. Cameo Corporate

Services Ltd Request for payment of Dividend through ECS for the

year 2002-2003 should be lodged with M/s. Cameo Corporate

Services Ltd, "Subramanian Building" No.1 Club House Road,

Chennai 600 002 on or before 19th September 2003.

12. With respect to payment of Dividend the Company provides the

facility of ECS to all Shareholders holding in Electronic and Physical

Forms residing in the following Cities: Ahmedabad, Bangalore,

Bhubaneshwar, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur,

Kanpur, Kolkata, Mumbai, Nagpur, New Delhi, Patna,Trivandrum.

13. The Company has already transferred all unclaimed dividends declared

up to the financial year ended 31st March 1995 to the General

Revenue Account of the Central Government as required by the

Companies Unpaid Dividend (Transfer to the General Revenue

Account of the Central Government) Rules 1978. Shareholders who

have so far not claimed or collected their dividends up to the aforesaid

3

financial year are requested to claim their Dividend from Registrar of

Companies, Shastri Bhawan, 26 Haddows Road, Chennai 600 006 in

the prescribed form which will be furnished on receipt of request by

the Registrar and Share Transfer Agents, M/s. Cameo Corporate

Services Ltd.

14. Pursuant to the provisions of Section 205A(5) of the Companies Act,

1956 dividend for the financial year ended 31st March 1996 and

thereafter which remain unclaimed for a period of seven years will be

transferred by the Company to the Investor Education and Protection

Fund (IEPF) established by the Central Government pursuant to

Section 205C of the Companies Act, 1956.

15. Shareholders who have not so far encashed the Dividend Warrant(s)

are requested to seek issue of Duplicate Warrant(s) by writing to the

Company’s Registrar and Transfer Agents, M/s. Cameo Corporate

Services Ltd immediately.

Shareholders are requested to note that no claims shall lie against the

Company or the said fund in respect of any amount which were

unclaimed and unpaid for a period of Seven years from the dates that

they first become due for payment and no payment shall be made in

respect of such claims.

16. The Members who are holding shares in identical order of names in

more than one folio are requested to intimate to the Company’s

Registrar and Share Transfer Agents the folio nos. of such accounts and

to send their share certificates to enable the consolidation of the

folios under one account.The share certificate will be returned to the

Members after making the necessary endorsement.

17. Members desirous of getting any information on the accounts or

operations of the Company are requested to forward queries to the

Company at least 7 working days prior to the Meeting, so that the

required information can be made available at the Meeting.

18. Reappointment of Directors

a. Mr P Murari aged 69 years was appointed as an independent Director

in 1996. He is a Member of the Audit Committee.

b. Mr V S Rao aged 74 years was appointed as a Director in 1991. He is

the Chairman of Audit Committee and Vice Chairman in the Board.

c. Mr Reji Abraham aged 37 years was appointed as Director in1994. He

is one of the Promoters of the Company. He is the Whole-time

Director of the Company since 1997.

19. Members holding shares in physical form and desirous of making the

nomination in respect of their shareholding in the Company as

permitted under Section 109A of the Companies Act, 1956 are

requested to submit to the Company the prescribed form 2B which

can be obtained from the Company’s Registrar and Share Transfer

Agent, M/s. Cameo Corporate Services Ltd.

Item No.7The remuneration payable to Managing Director Mr. M. A. Abraham, was

revised effective for a period from 01-02-2003 to 23-10-2004. Revision in

remuneration requires the approval of the Shareholders in General

Meeting. Hence the item is placed before the Meeting for approval.

The Director Mr. M. A. Abraham and his relatives Mr. Reji Abraham and

Mr. Renny Abraham are concerned or interested in the item of business.

Item No.8Cameo Corporate Services Limited had been appointed as Registrar for

Electronic Connectivity. In terms of Circular No. D & CC /FITTC/CIR-

15/2002 dated 27th December 2002 of the Securities Exchange Board of

India, M/s Cameo Corporate Services Limited have been appointed as

Registrar for Physical Shares also for administrative and economical

reasons.

In view of the above the Register of Members and Index of Members of

the Company shall be kept with M/s Cameo Corporate Services Limited,

the Company’s Registrar’s Office at Subramanian Building, No.1, Club

House Road, Chennai – 600 002.

As per the provisions of Section 163 of the Companies Act, 1956 the

Register of Members and Index of Members may be kept at any place

other than the Registered Office of the Company, if the Company by a

Special Resolution approves the same.

Accordingly the Resolution set out in Item No. 8 of the notice is being

placed before the Meeting for approval. An advance copy of the Special

Resolution will be forwarded to the Registrar of Companies as per the

provisions of the Act.

None of the Directors of the Company are interested or concerned in the

item of business.

Item No.9The Equity Shares of the Company are listed in Madras Stock Exchange

Ltd,The Stock Exchange, Mumbai,National Stock Exchange of India Ltd and

The Delhi Stock Exchange Association Ltd. But the shares are mainly

traded only in The Stock Exchange, Mumbai and The National Stock

Exchange of India Ltd.

The Securities and Exchange Board of India (Delisting of Securities)

Guidelines 2003 allows Companies to seek Voluntary delisting of

Securities, subject to fulfilment of certain conditions. However, the

approval of the Board of Directors and the Members of the Company is

required for delisting of Equity Shares from any Stock Exchange. In view of

the above Board of Directors of the Company recommend the passing of

Resolution under Item No. 9 of the notice.

None of the Directors of the Company are interested or concerned in the

item of business.

By Order of the Board

Chennai C.P. Gopalkrishnan

14th July 2003 Director (Finance) & Secretary

Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of specialbusiness contained in the notice dated 14th July 2003.

4

Name of Director Mr. P. Murari Mr.V. S. Rao Mr. Reji Abraham

Date of Birth 19.08.1934 18.07.1929 23.06.1966

Date of Appointment 18.09.1996 22.08.1991 09.02.1994

as Director

Date of Appointment as

Wholetime Director - - 26.09.1997

Qualification M.A., (Economics) B.E., (Honours) B.E., MBA

Madras University Pune University

Experience in specific Retired Civil Servant, I.A.S., Retired Company In Business for last 12 years

functional areas Major Positions held in Government both at Executive

the Centre and in Tamil Nadu 47 Years of Experience

in Managerial Position in

Leading Engineering

Companies.

List of Public Limited Companies Bhoruka Power Corporation Limited Aban Energies Ltd. Aban Energies Limited

in India in which Directorship held Credit Capital Asset Management Co., Ltd Saipem Aban Ratan Plantations Limited

Daurala Organics Limited Drilling Co. Ltd Perunad Plantations Limited

HEG Limited Frontier Aban Drilling (India) Ltd

Indian Rayon and Industries Limited Aban Power Company Limited

Moving Picture Company (India) Ltd. Asian Techs Limited

Mukand Limited

Glaxo SmithKline Consumer Health Care Ltd.

South Asian Petrochem Ltd.,

Xpro India Limited.

Memberships of Committees Audit Committee Chairman –

in the Company - Audit Committee

Membership of Committees Audit Committee –

in other Companies Glaxo SmithKline Consumer Health Care Ltd. –

Indian Rayon and Industries Ltd.

Moving Picture Company (India) Ltd.

Mukand Ltd.

Xpro India Ltd.

Chairmanship of Committees Shareholder’s Grievance Committee – _

in other Companies Indian Rayon and Industries Ltd.

Remuneration Committee

Xpro India Ltd.

Aban Loyd Chiles Offshore Ltd.Details of the Directors seeking re-appointment in Annual General Meeting to be held on 26th September 2003.

5

Of India’s total Oil requirement, 69 per cent isimported. The annual cost of this import isestimated at Rs 84,000 cr. The gap between thesupply and demand of crude oil is likely to increaseover the years, raising this bill further, whichjustifies the existence of companies like Aban intheir respective businesses.

6

Only 16 per cent of India’s

sedimentary area has been

comprehensively explored.

A large 60 per cent lies

completely unexplored.

A comprehensive mapping of

this unexplored area will

inevitably result in the

aggressive hire of offshore

drilling service providers like

Aban.

1

India’s oil consumption,

currently placed at 100

million MT, is expected to

grow to 173 million MT by

2006 and 364 million MT by

2025. India’s present-day

domestic production meets

only 30 per cent of its

existing demand.This makes

it imperative for India to

explore for oil more

aggressively than it has done

in the past. As this

transpires, there will be

greater income opportunities

for offshore drilling service

providers like Aban.

2

7

8

The Government’s

Hydrocarbon Vision 2025

envisages a programme for a

comprehensive appraisal of all

of India’s basins by 2025.This is

expected to lead to significant

offshore oil and gas discoveries.

This could also result in

sustainable income

opportunities for companies

like Aban who have established

dedicated long-term presence

in the sector.

3 India has invited domestic and

foreign companies to explore

for oil and natural gas under

the New Exploration

Licensing Policy (NELP). NELP

offers attractive exploration

incentives. As a result,

internationally reputed oil

companies like Cairn Energy,

Hardy Oil as well as Indian

giants like Reliance have

invested for the first time in

this sector.Their entry has

already begun to translate into

the aggressive hiring of new

rigs and robust day rates,

benefitting offshore drilling

service providers like Aban.

4

India’s oil exploration and production sector is likely to see investments of the

order of US $ 50 billion over the next 15 years. Most of the investments will be

in the offshore sector where the possibility of striking oil and gas is higher.A part

of this large investment will be made in the hire of rigs from operators with an

impeccable track record, benefiting companies like Aban the most.59

10

Aban Loyd Chiles Offshore.Creating strengths.

Capitalising on opportunities.

11

BackgroundAban Loyd Chiles Offshore Limited, an Indo-US joint venture, was set up in 1986 to

provide offshore oil field services in offshore exploration and the production of

hydro-carbons for the oil industry.

Rich ExperienceThe Company now possesses a decade-and-a-half of experience in offshore oil

exploration services, resulting in cost-efficient operations and minimal downtime. As a

result, it enjoys strong and loyal customers, including ONGC Ltd., the Indian oil major.

AllianceOver the years, the Company has strengthened its deep-sea focus through a business-

enhancing alliance: it has entered into a joint venture with Frontier Drilling ASA of

Norway in the area of deep-sea offshore oil exploration.

ProspectsA strong day rate and ongoing cost control are expected to translate into strong

revenues, profits and enhanced shareholder value. With oil exploration emerging as a

priority area, the Company is poised to play a leading role in the sector over the

foreseeable future.

12

SECTORAL OVERVIEWThe contract rates for Aban were partly influenced by the

developments in the energy market in 2002.

The fact that natural gas and oil continued to be the

preferred energy sources the world over contributed to a

firm trend in the hire rates for oil drilling service providers

like Aban.

Besides, the firm rates were also influenced by a growing

evolution in the geographical trade in oil and gas as a

proportion of the total energy consumption: the

geographical pattern of that trade was increasingly skewed

towards China, which led the increase in energy imports.

Besides, the continuing development of Russian energy

resources and the development of energy resources in the

Caspian region steadily increased production leading to the

potential for new trading links.

The fact that natural gas emerged as the fastest growing

segment sustained the sentiment for offshore drilling as

well. It encouraged a shift to a lower carbon fuel mix and

provided an important element of security in an energy

supply market that became more diversely spread more

than at any time over the last century.

Energy DevelopmentsInterestingly, the developments of

2002 indicated the increasing shift of

the global energy market towards

Asia, strengthening the rationale for

the Company’s sustained presence in

the industry.

For instance, even though the world

consumption of primary energy

increased by 2.6 per cent in 2002, it

actually grew by less than 1 per cent

during the year if one deducts the role

of China.With a growth of around 20

per cent, more than made up for the

weak global trend China accounted

for a rebound in the international

market.

Natural gas consumption recovered

strongly to grow by 2.8 per cent in

2002, while oil consumption was

broadly flat for the second year

running, a fallout of the volatile pricing

during the year under review.

Regional ConsumptionThere is ample evidence to suggest

that Asia is where the global action in

energy is being centred, vindicating the

Company’s decision to invest in the

region. For instance, energy demand

was weak in Europe and Japan where

consumption declined by 1 per cent

and in South and Central America,

where consumption remained flat. But

energy consumption growth in the

non-OECD parts of Asia Pacific

(excluding Japan, South Korea and

Australasia) was almost 11.5 per cent.

China was the single most powerful

driver as it grew 19.7 per cent.

Oil: Brent oil prices increased from an

average $24.77 per barrel in 2001 to

an average $25.19 per barrel in 2002,

peaking at almost $32 just before the

end of the year.The steep 6.4 per cent

drop in OPEC output was the result

of an output restraint and a number of

unplanned production disruptions.

Natural gas: The global consumption

of natural gas grew by a relatively

strong 2.8 per cent in 2002, driven by

a 7 per cent growth emerging out of

non-OECD Asia Pacific.

13

14

OutlookThe following features are expected

to emerge:

■ Demand growth to be met by non-

OPEC supply growth: The

International Energy Agency (IEA)

expects oil demand to grow by 1.0 mn

barrels per day (b/d) (1.3 per cent

year on year [yoy]) in 2003. It also

expects non-OPEC supply to grow by

1.2 mn b/d.

■ Rising production from the Former

Soviet Union (FSU): The IEA forecasts

an FSU production of 10.2 mn b/d in

2003, up from 7.9 mn b/d in 2000.

■ Resumption of Iraqi exports: Iraq

can produce between 2.5-3.0 mn b/d

of crude oil without large-scale

investments as provisional authorities

ramp up production over the next few

months from the current depressed

levels.

■ Higher Asian inventories/weaker

Asian demand than expected: Recent

data from the IEA indicates OECD

Asian inventories are high as opposed

to low levels throughout 2002.

Drilling Market Focus There is an indication that the demand

for jack up rigs may rise from the

current levels, partly influenced by

action in Russia, where massive

volumes of offshore oil and gas in

water depths suited to jackups are

estimated. According to a report by

ODS-Petrodata, many more new

jackups will need to be built to

prevent the age profile of the

worldwide fleet becoming dominated

by old equipment. According to ODS-

Petrodata, only 14 new competitive

rigs have been delivered in the last five

years, and even after the current rigs

that are being manufactured are

factored in, rig replenishment between

1998 and 2006 will amount to just 6

15

per cent of the fleet. New rigs are also

necessary because drilling

requirements are becoming more

sophisticated and will include a

greater use of automation to prevent

accidents and improve tripping times.

The fleet has basically stayed the same

for the last ten years while it has aged

considerably. At the same time, the

demand for jackups has followed a

continuous upward trend.

It is also expected that only about 60

per cent of the industry’s cash flow

will be spent on exploration and

development in 2003, compared with

87 per cent in the past few years.This

is expected to increase rig count.

Drilling activity is expected to be up

another 15 per cent in 2004.

Despite price uncertainty and the

general agreement that high prices will

not hold over the life of most wells,

drilling in the US continued to be

attractive.

Indian Scenario

Of India’s oil requirement, 69 per cent

was imported, taking the country’s

annual import bill to Rs.84,000 cr. The

gap between supply and the availability

of crude oil is likely to increase over

the years. The growing demand and

supply gap will require an increasing

emphasis on the exploration and

production sector. As per the India

Hydrocarbons Vision 2025 the

Government has already given out 94

blocks for exploration in the last four

years under NELP. These initiatives

will lead to an increase in demand for

jackups in India and initiatives may

have to be taken to build these rigs in

India, any delay in which could

strengthen hire rates in the region. As

a result, the medium-term outlook for

the oil drilling industry appears

positive.

16

Industry Structure and DevelopmentsDrillingOil is a non-renewable energy source. Along with gas, itconstitutes a significant 63 per cent of the world’s total energyconsumption. Even though alternative energy sources are undervarious stages of development and exploitation, oil and gascontinue to play a pre-eminent role in meeting the energyrequirements of the world.

India is the eighth largest oil consumer in the world. However, thecurrent levels of per capita energy consumption in India areextremely low compared to the rest of the world. India’s percapita consumption of petroleum products is a mere 113 kgcompared to the global average of 927 kg. Indian consumption isexpected to grow rapidly from this point onwards, due to the

sustained increase in demand from the industrial andtransportation sectors.

One estimate indicates that the consumption of petroleumproducts is likely to grow from the prevailing 110 MMTPA to 173MMTPA by 2006-07 and 364 MMTPA by 2024-25.

Indigenous Indian production meets only about 30 per cent of itsdemand.The gap is covered by imports, the largest drain on India’s

MANAGEMENT DISCUSSION

AND ANALYSIS

Year Estimated Crude Requirement

(Figures in MMTPA)2006-07 173

2011-12 190

2024-25 364

17

exchequer. This is obviously a matter of serious concern to theGovernment and the present focus is on increasing productionthrough the expansion of exploration initiatives.

To meet the future needs of the country, a long-termhydrocarbons Exploration and Production (E&P) policy has beenprepared by the Government of India. The HydrocarbonsPetroleum Vision 2025 lays down the framework that will guidethe policies relating to the oil and gas sector for the next twodecades. The objective of this policy is to undertake a totalappraisal of Indian sedimentary basins to leverage theirhydrocarbons potential with the use of the latest technologies aswell as optimising the production of crude oil and natural gas inthe most efficient manner possible.

Among its various initiatives, the Government opened up thepetroleum sector to private participation through the NewExploration Licensing Policy (NELP). This has already attracted anumber of private operators, with the fourth round of NELPbidding being currently in progress.

In India, a major part of the exploration will be undertaken in theoffshore blocks for which offshore rigs will have to be deployed.Due to a large number of blocks being simultaneously taken up foroffshore exploration by different operators, a sharp increase in thedemand for offshore rigs is forecast. Already, the demand for theserigs in Indian waters has exceeded supply and translated into firmday rates (paid by operators to rig providers). With oil prices likelyto remain stable after the Iraq war, E&P activity is expected togather momentum during 2003-04.

There is another reason why the outlook appears optimistic foroffshore services providers like your Company. Oilfields, whichhave been in production for a number of years, are showing adeclining output. ONGC, the largest operator in India, iscountering this phenomenon through the application of state-of-the-art technology. For instance, ONGC has already initiated re-development plans for Mumbai High, India’s largest and mostprolific oil field, which is expected to yield the equivalent of 45.58million tonnes of additional hydrocarbons with a capitalinvestment of Rs. 5,000 crores.

Deepwater exploration is another area fast gaining ground. It isestimated that large quantities of hydrocarbons are locked indeepwater deposits. Operators who have already begun to

explore these depths have reported encouraging results.There areenormous opportunities for drill ship providers who possess thetechnical competence to address the challenge.

Energy DivisionEnergy is a basic input for economic growth. The promotion ofrenewable energy technologies is one of the importantcomponents of India’s development objectives. India is one of thefive leading nations, in harnessing wind energy for powergeneration. Renewable energy is expected to create additionalflexibility in augmenting the production of electricity. TheGovernment of India has estimated wind power growth in India atabout 750 to 900 MW per year.

There has been a phenomenal growth in the size of the windenergy generators installed in India: from 225 KW in 1995 to 1250KW in 2003. The unit sizes have increased beyond 2000 KWabroad. Wind energy has vast potential and the country standsevery chance of being able to realise the vast scope for thisdevelopment. With the increase in the cost of conventionalelectricity, it may soon be cost competitive to generate and supplyelectricity using wind energy. Also, the Government of Indiaattaches great importance to minimising the effect of the green-house gas and related climate change caused by the use ofhydrocarbons in power generation.

OutlookDrillingAban Loyd Chiles Offshore Limited (Aban) is the largest and oneof the most respected private offshore drilling service providers inIndia. It provides service to the offshore oil exploration andproduction industry and has played a significant role in

Segment-wise Performance

The present focus of theGovernment is on increasing

production through expansion of exploration efforts.

Rs. in lakhsRevenue 2002-2003

Drilling 22,910

Wind energy 2,246

Profit / (Loss)

Drilling 5,554

Wind energy (1,956)

18

development of the energy sector in India. Aban service includesdrilling of wells for the extraction of oil from the seabed and theperiodic workover of the wells to remove blockages due to thepresence of mud, wax and other impurities coming up with the oilfrom the seabed (as per the requirements of the operator).

Aban provides operators with equipment like rigs or FloatingProduction System Unit (FPSU) for the exploration andproduction of oil from marginal oil fields as well as rigs for theworkover of the wells. Aban’s revenue is earned from the day ratepaid by these operators.

The Company has deployed its rigs in the operations ofinternationally reputed oil exploration companies like ONGC,Cairn Energy and Hardy Oil.

During 2002-03, the Company deployed the following assets:

In the opinion of the management, Aban is poised to play a majorsectoral role as deepwater exploration is expected to remain asthe most important area of activity. To strengthen its capability, theCompany entered into a joint venture with M/s Frontier DrillingASA of Norway for deepwater drilling. It is operating the drill shipFrontier Ice on behalf of ONGC at Mumbai offshore, an initiative

that is expected to yield significant rewards.

EnergyThe Company has focused on the indigenisation of critical systemsto reduce the downtime and costs to increase the availability ofwind energy generators.

Review of Operational and FinancialPerformanceThe Company has taken advantage of prevailing low interest rate

regime, retiring high cost debts and borowings at low cost.

DrillingOffshore drilling, the core activity of the Company, accounted for

91 per cent of the Company’s revenue in 2002-03. All rigs were

operated on a charter hire basis and earned attractive rentals.The

Company controlled its operational cost through a careful

supervision, close monitoring of expenditure (including the

replacement of inefficient equipment) and through innovative

maintenance techniques.

For instance, the repair of ABAN-III was a significant cost-cutting

achievement. This rig underwent major refitting and modification

in an Indian shipyard. The job was planned meticulously and

executed professionally without any time or cost overruns. In the

opinion of the management, this was a remarkable achievement,

considering that such rigs are normally repaired or modified

abroad. In doing so, Aban saved considerable expense.

Major repairs and modifications, as recommended by the

American Bureau of Shipping, were carried out on FPSU TAHARA

in situ, thereby avoiding the need for dry-docking and related

expenditure.

Besides, the Company strengthened its profitability by minimising

the idling of its assets through a meticulous long-term and short-

term asset utilisation programme. American Bureau of Shipping as

well as Bureau Veritas, two leading international inspection

agencies, approved the quality standards practised by the

Company.

Rig name Type Used in areas

ABAN-II Mat supported Can work in water jack-up rig depth of 20-250 ft.

Highly suitable wherethe seabed is soft.

ABAN-III Independent leg Can operate in water depths of 30-300 ft.

HITDRILL-1 Cantilever type Suitable for drilling wellson platforms.

Production Type Used for

FPSU TAHARA Semi-submersible Can operate in 100-800floating and feet of water depth as aproduction floating and processing

unit. Very good formarginal fields.

ONGC has already initiated re-development plans for

Mumbai High, India’s largest and most prolific oil field.

19

The day rates earned by the Company from its charter contractswere in line with the international trend. Other highlights duringthe year under review are listed below.

• During the first quarter of 2002-03, ABAN-II’s deployment withCairn Energy generated a day rate higher than the industryaverage. From July 2002, this rig was deployed with ONGC in theKG offshore oilfield.

• ABAN-III and HITDRILL were deployed with ONGC at theMumbai High oilfield from July 2002 onwards and both earned thehighest-ever day rates by the Company.These rigs will continue tobe deployed under the existing contract until the second quarterof 2003-04.

• The performance of FPSU-TAHARA was satisfactory. It workedunder contract with Hardy Oil at Pondicherry offshore during theyear under review and has been contracted to work with the sameoperator until July 2004.

Prospects appear bright, considering that all of Aban’s rigs havebeen booked until the end of the second quarter of 2003-04.TwoRigs earned the highest-ever rates in the Company’s history in2002-03, translating into higher income and profitability. Once theexisting contracts are over, freshly negotiated day rates areexpected to remain firm on account of the continuing importanceof offshore oil exploration and production and requirement ofrigs.As a result, the Company has already begun to receive queriesfrom operators to deploy rigs with them beyond the secondquarter of 2003-04.

EnergyWind Energy Division generated 809 lakh units of power, during2002-03, yielding a revenue of Rs. 2203 lakh.

Opportunities and ThreatsDrillingArising out of the increase in the demand for petroleum productsin the backdrop of depleting oil reserves, there is a greater thruston offshore and deepwater oil exploration activities. Aban expectsto exploit this opportunity by strengthening its resources fordeep-water exploration.This investment will be made only after adetailed technical and financial feasibility study. The Company isalso considering the option of deploying rigs in international

waters, where day rates are higher, thereby transforming itself intoan international player as well.

The Company does not see any threat in the near future from itsoperations, as oil exploration is bound to increase substantiallywith a corresponding increase in the demand for drilling services.

EnergyAgainst India’s gross wind power potential of 45,000 MW, a totalof about 1870 MW capacity has been installed in India until March2003.Tamil Nadu has the largest wind power installed capacity of990 MW against its gross potential of 30,450 MW.This division ofthe Company has acquired rich experience in the development ofwind energy projects in India, and the delivery of O&M services.

Risks and ConcernsDrillingThe Company faces normal market risks: a downturn in oil prices,leading to a reduction in day rates. The Company manages theserisks by maintaining lower costs and following other prudentbusiness practices.

EnergyThe production depends on wind.The Company manages risks bymaintaining its windmills in a good working condition leading to ahigh machine availability time.

Internal Control Systems and AdequacyThe Company has a system of Internal Controls commensuratewith the structure of the Company.The Audit Committee is at theapex of this control system.

Material developments in the humanresources / Industrial relations frontincluding number of people employedAban has a team of committed and competent employees whose

expertise has added value to the operator clients, and to the

Company in turn. The total number of employees as on

31st March 2003 was 369.

India is one of the five leading nations in the world,in harnessing wind energy

for power generation.

20

DIRECTORS’ REPORTThe Directors of your Company are pleased to present the Seventeenth Annual Report along with the accounts for the year ended31st March 2003.

(Rupees in Lakhs)

1. Financial Results

2. Management Discussion and AnalysisIn this Annual Report, we have attached Management’sDiscussion and Analysis section that highlights theCompany’s Industry and Market overview, opportunities/threats, a segmentwise performance outlook, risk andconcerns, adequacy of internal control systems financial andoperational performance as well as issues of humanresource and development.

3. PerformanceDuring 2002-2003, the performance of the Company wassatisfactory.The ABAN II rig was deployed under contractwith ONGC at the Raava field in Rajamundry while theABAN III and HITDRILL–1 rigs were deployed under

contract with ONGC at Mumbai High. The FloatingProduction unit worked offshore under contract withHardy Exploration & Production (India) Inc. at Pondicherry.

The windmills had generated 809 lakh Units during the yearunder review.

4. Subsidiary CompanyAban Energies Limited: The lease / sub lease agreementwith Aban Energies was terminated from 1st April 2002.Asrequired under Section 212 of the Companies Act, 1956,the audited 2002-2003 statement of accounts as well as thereport of the Board of Directors and Auditors Report ofAban Energies Limited are annexed.

5. DividendThe Directors are pleased to recommend a Dvidend of50 per cent on the paid up equity capital of the Company.

6. DirectorsDirectors Mr. P. Murari, Mr.V. S. Rao and Mr. Reji Abrahamretire by rotation and, being eligible, offer themselves forreappointment. It is also proposed to revise the terms ofremuneration payable to the Managing DirectorMr. M. A. Abraham with effect from 1st February 2003 to23rd October 2004.

Mr. V. S. Rao has been appointed as Vice Chairman of theBoard with effect from 26th April 2003.

7. Directors’ Responsibility StatementPursuant to the requirement under Section 217(2AA) ofthe Companies Act, 1956, with respect to the Directors’Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for thefinancial year ended on 31st March 2003, the applicableaccounting standards were followed along with a properexplanation relating to material departures.

(ii) that the Directors have selected such accounting policiesand applied them consistently and made judgements andestimates that were reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company atthe end of the financial year and of the profit of theCompany for the year under review.

(iii) that the Directors took proper and sufficient care for themaintenance of adequate accounting records in accordancewith the provisions of the Companies Act, 1956 tosafeguard the assets of the Company as well as prevent anddetect fraud and other irregularities.

Year ended Year ended31st March 31st March

2003 2002Income from operations 24,384 20,049

Other income 772 915

Less: Expenditure 13,953 11,914

Profit before interest 11,203 9,050and depreciation

Less: Interest 3,684 3,206

Less: Depreciation 3,292 3,598

Goodwill amortised 629 629

Profit for the year before tax 3,598 1,617

Provision for taxation 284 130

Provision for deferred tax 2,406 182

Profit after tax & amortisation 908 1,305of goodwill

Profit brought forward from 10,248 9,938the previous year

Available for appropriation 11,156 11,243

Proposed dividend 369 295

Tax on dividend 47 –

Transfer to General Reserve 100 700

Balance carried forward 10,640 10248

11,156 11,243

21

iv) that the Directors have prepared the accounts for thefinancial year ended on 31 March 2003 on a going concernbasis.

8. Stock ExchangesYour Company’s shares were listed in the following stock exchanges:

Madras Stock Exchange Ltd.,The Stock Exchange,Mumbai,NationalStock Exchange of India Ltd. and The Delhi Stock ExchangeAssociation Ltd.

The listing fees were paid in full to all these stock exchanges for2003-2004.

The Board have proposed to delist, at the appropriate time, theequity shares listed with "The Delhi Stock Exchange AssociationLtd”.subject to necessary approvals.

9. AuditorsM/s Ford, Rhodes, Parks & Co., Chartered Accountants, Chennai,hold office until the conclusion of the ensuing Annual GeneralMeeting and,being eligible,are recommended for re-appointment.

10. Particulars of EmployeesAs required by the provisions of Section 217 (2A) of the CompaniesAct, 1956, read with the Companies (Particulars of Employees)Rules, 1975, the names and relevant particulars of the employeeswho were employed throughout the financial year / part of thefinancial year under review and were in receipt of remuneration forthe Financial Year in aggregate of not less than Rs.24,00,000 perannum (Rs.2,00,000 per month or part thereof),are annexed.

11. In terms of Section 217(1) of the Companies Act,1956 (as amended)

and the Companies (Disclosure of Particulars in Report of the

Board of Directors) Rules, 1988. Your Directors furnish

hereunder the additional information as required.

A. Conservation of EnergyThe Company took appropriate measures to conserveEnergy wherever necessary, even though the activities ofthe Company are not particularly energy-intensive.

B. Research and DevelopmentResearch was carried out essentially to indigenise the use ofvarious imported equipment used in the operation of rigs.

C.Technology Absorption,Adoption and InnovationThe Company embarked on initiatives to reduce the dependenceon imported equipment used in the operation of rigs.

D. Foreign Exchange Earnings and Outgo

12. Compliance CertificateA Certificate from the Auditors of the Company regardingcompliance of conditions of Corporate Governanceprocess, as stipulated under Clause 49 of the ListingAgreement is attached in this report.

13. AcknowledgementsYour Directors wish to place on record their sincere

appreciation for the contribution made by the employees

at all levels. The Directors also record their sincere

appreciation of the support and co-operation received

from the bankers, financial institutions, relevant Central and

State government ministries, valued clients (particularly the

ONGC and Hardy Exploration & Production India Inc.) and

Members of the Company.

For and on behalf of the Board

Place: Chennai M.A.Abraham Reji Abraham

Date: 14th July 2003 Managing Director Wholetime Director

Notes (a) The Managing Director Mr. M.A.Abraham and the Wholetime Director Mr. Reji Abraham are related to each other and also related to Director Mr. Renny Abraham(b) Remuneration includes salary and value of perquisites (c) Nature of employment is contractual

Information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Amendment Rules1988 and forming part of the Directors Report for the year ended 31st March 2003Employed throughout the Financial Year under review and were in receipt of remuneration for the Financial Year in aggregate of not lessthat Rs.24,00,000/- (Rupees twenty four lakhs only) per annum or Rs.2,00,000/- (Rupees two lakhs only) per month where employed forthe part of the year.

S. Name Age Remune- Nature of Qualifi- Date of Experience Details ofNo Years ration Duties/ cations Commen- in years Previous

Rs. Designation cement of EmploymentEmployment

1 M.A.Abraham 63 77,93,352/- Managing Director MBA 24.10.1986 42 Business

2 Reji Abraham 37 46,33,304/- Wholetime Director BE 26.09.1997 12 BusinessMBA

Particulars 2002-2003 2001-2002

Foreign exchange earned 22,181 18,454 during the year

Foreign exchange outflow 4,029 6,671during the year

(Rupees in Lakhs)

22

At Aban Loyd Chiles Offshore Ltd., we believe that a soundgovernance process is imperative for two reasons: to protectshareholder interests and to also ensure that no one stakeholderbenefits at the expense of the others.

In the following paragraphs, the Company has submitted a reporton its governance practices in compliance with Clause 49 of thelisting agreement with the stock exchanges.

Abans' Governance PhilosophyThe Company’s governance philosophy revolves aroundtransparency and accountability in all its interactions with theGovernment, shareholders and employees.

Board of DirectorsAban Loyd Chiles' Board have nine Directors (three promoter-

Directors of whom two are Whole-time Directors, one Non-executive Director, two independent Non-Executive Directors,two Executive Directors, one Director representing thecollaborators and one Nominee Director representing ICICI BankLtd). The Board functioned directly or through various focusedcommittees (Audit Committee and Shareholders’ GrievanceCommittee). The Board and its Committees met at regularintervals. The Board is vested with functions related to goal-setting, performance evaluation and control.

Board of Directors meetings were held 7 times in 2002-2003 onthe following dates: 30/04/2002, 20/05/2002, 22/07/2002,14/08/2002, 27/09/2002, 26/10/2002, 31/01/2003.

The names of the Directors on the Board, their attendance at themeetings and the other Directorships that they held as on31st March 2003 are set out below:

The required information (as enumerated in Annexure I inClause 49 relating to Corporate Governance) was made availableto the Board of Directors.

The Directors who will retire by rotation and offer themselves forreappointment are:

Mr. P. Murari, Mr.V. S. Rao and Mr. Reji Abraham

Disclosures regarding re-appointment of Directors

Mr. P. Murari , IAS (Retd.) (69) was holding senior positions in

Government as well as he is a Director in many leading Public

Limited Companies. He has joined the Board as independent

Director in the year 1996.

* Represented Memberships / Chairmanships of Audit Committee, Shareholders Grievance Committee and Remuneration Committee.

CORPORATE GOVERNANCE

Name of Category FY 2002-2003 As on 31st March 2003 CommitteeDirector (s) Attendance at No. of Other Positions of other

Board Last Directorships Companies*Meetings AGM Public Private Member Chairman

M.A.Abraham Executive- Promoter 4 Yes 5 5 Nil Nil

Reji Abraham Executive – Promoter 6 Yes 7 6 Nil Nil

Renny Abraham Non-Executive Promoter 5 Yes 2 4 1 1

V. S. Rao Non-Executive independent 5 Yes 2 2 Nil 1

P. Murari Non-Executive Independent 2 No 10 Nil 5 2

S. Srinivasan Nominee –ICICI Bank Ltd. 4 No 6 Nil 6 Nil

Frank A Wojtek Non- Executive – Promoter Nil No Nil Nil Nil Nil

P.Venkateswaran Executive Director 7 Yes 4 2 1 Nil

C.P. Gopalkrishnan Executive Director 7 Yes 3 Nil 1 Nil

Mr. V. S. Rao (74) is a qualified Engineer and was working as aGeneral Manager in Larsen & Toubro Limited. He has joined theBoard in the year 1991

Mr. Reji Abraham (37) is a qualified Engineer and MBA. He hasjoined the Board in the year 1994. Presently he is designated asWholetime Director of the Company.

Mr. V. S. Rao has been appointed as Vice Chairman of the Boardwith effect from 26th April 2003

Remuneration to Non-executive DirectorsNo remuneration, other than sitting fees and other expenses(travelling, boarding and lodging incurred for attending the Board/Committee meetings) were paid to the non-executive Directorsin 2002-03.

Audit CommitteeTerms of ReferenceThe Audit Committee provided a direction to the audit and riskmanagement function of the Company and monitored the qualityof its internal audit. The responsibilities of the Audit Committeeincluded the following responsibilities: overseeing the financialreporting process to ensure a proper disclosure of financialstatements, recommending the appointment or removal ofexternal auditors and fixing their remuneration and reviewing theannual financial statements before they were submitted to theBoard. Its scope also included a review of the adequacy of internalcontrols, the adequate structure and staffing of the internal auditfunction, the review of internal investigation, the discussion of thescope of audit with external auditors and investigating the reasonsbehind the substantial defaults in the event of non-payment tostakeholders.

The Committee met three times during the year on 30.04.2002,22.07.2002 and 17.10.2002.

Name and Designation of Compliance Officer:Mr. C.P. Gopalkrishnan, Director (Finance) & Company Secretary

Shareholder’s Grievance CommitteeThe Company’s Shareholders / Investor Grievance Committeemonitored and redressed shareholder complaints relating to sharetransfer, the non-receipt of Annual Report or Dividend.

The Committee met 27 times during the year on the followingdates:

01.04.2002, 16.04.2002, 30.04.2002, 16.05.2002, 31.05.2002,10.06.2002, 25.06.2002, 15.07.2002, 31.07.2002, 14.08.2002,30.08.2002, 16.09.2002, 30.09.2002, 12.10.2002, 24.10.2002,5.11.2002, 18.11.2002, 30.11.2002, 13.12.2002, 26.12.2002,08.01.2003, 22.01.2003, 30.01.2003, 14.02.2003, 01.03.2003,19.03.2003 and 29.03.2003.

23

Name Category No. of MeetingsAttended

Mr.V. S. Rao Chairman 3

Mr. P. Murari Member 2

Mr. Renny Abraham Member 2

Name Category No. of MeetingsAttended

Mr. Renny Abraham Chairman 27

Mr. P.Venkateswaran Member 24

Mr. C.P. Gopalkrishnan Member 25

During the year the Company has received 305 complaints fromshareholders which were answered and resolved.

* One Special Resolution was passed. No postal ballots were used / invited for voting

** Four special resolutions were passed and postal ballets were used / invited for voting for the following business.

*** One Special Resolution was passed. No Postal ballots were used / invited for voting.

Annual General Meeting Day and Date Time Venue

14th Annual General Meeting * Wednesday 11.00 am Auditorium of Madras School of Social Work27.09.2000 32, Casa Major Road, Egmore, Chennai - 600 008

Extra Ordinary General Meeting Wednesday 11.00 am Auditorium of Madras School of Social Work18.04.2001 32, Casa Major Road, Egmore, Chennai - 600 008

Court Convened Meeting of Saturday 10.15 am Auditorium of Madras School of Social WorkEquity Shareholders 15.09.2001 32, Casa Major Road, Egmore, Chennai - 600 008

15th Annual General Meeting ** Friday 10.15 am Auditorium of Madras School of Social Work21.09.2001 32, Casa Major Road, Egmore, Chennai - 600 008

16th Annual General Meeting *** Friday 11.00 am Auditorium of Madras School of Social Work27.09.2002 32, casa Major Road, Egmore, Chennai - 600 008

General Body MeetingsThe details of the date and location of the Annual General Meetings held in the last three years are given below:

24

List of Resolutions for which Postal Ballotswere used.1) Special Resolution pursuant to Section 372A of the

Companies Act, 1956 in respect of Corporate Guarantee infavour of ICICI Bank Ltd for working capital facilities of Rs.250lakhs sanctioned to Hitech Drilling Services India Limited.

2) Special Resolution pursuant to Section 372A of theCompanies Act, 1956 in respect of Corporate Guarantee infavour of UTI Bank Ltd. for the Term Loan of Rs.1,250 lakhssanctioned to Hitech Drilling Services India Limited.

3) Special Resolution pursuant to Section 372A of theCompanies Act, 1956 with respect to the investment in equityshares of Frontier Aban Drilling (India) Private Limited uptoRs.2,00,00,000/-

4) Special Resolution pursuant to Section 372A of theCompanies Act, 1956 with respect to providing one or more

corporate guarantees for an amount not exceeding Rs.6,00,00,000/- with relation to the contract between ONGCand Frontier Aban Drilling (India) Private Limited.

Means of CommunicationThe quarterly and half-yearly unaudited financial results werepublished in Business Standard (English) and Makkal Kural in Tamil(Regional Language). The results were also displayed on theCompany’s web site at www.abanindia.com

DisclosuresWith regard to disclosures on materially significant related partytransactions of the Company of material nature with itsPromoters, the Directors or the Management, their subsidiaries orrelatives etc. that may have potential conflict with the interest ofthe Company at large. Please refer Balance Sheet Notes onAccounts.

Financial Year 1st April 2003 to 31st March 2004

Board meeting for considering the Accounts and Dividend 14/07/2003

Posting of Annual Report on or before 02/09/2003

Bookclosure dates 19/9/2003 to 26/09/2003 both days inclusive

Last date for the receipt of proxy forms 24/09/2003

Seventeenth AGM 26/09/2003

AGM Venue Madras School of Social Work 32 Casa Major Road, Egmore, Chennai - 600 008.

Dividend payment date on or after 30/09/2003

Probable date of despatch of dividend warrants on or after 10/10/2003

Board Meeting to consider Unaudited results for thefirst 3 quarters of the financial year 2003-2004

Results of the quarter ended on 30th June 2003 14/07/2003

Results of the quarter ended on 30th September 2003 End of October 2003

Results of the quarter ended on 31st December 2003 End of January 2004

FINANCIAL CALENDAR

Listing on Stock ExchangesThe shares of the Company are listed on the following StockExchanges

Madras Stock Exchange Limited : Exchange Building,Post Box No.183, 11 Second Line Beach, Chennai – 600 001

The Stock Exchange Mumbai, Phiroze Jeejeebhoy Towers,21st Floor, Dalal Street, Mumbai – 400 001.

National Stock Exchange of India Limited, Exchange Plaza, 5thFloor, Plot No: C/1 G Block, Bandra – Kurla Complex, Bandra (E),Mumbai 400 051

The Delhi Stock Exchange Association Limited, 3 & 4 /4B,Asaf AliRoad, New Delhi 110 002.

The listing fees for the Financial Year 2003-2004 were paid to theStock Exchanges where the Company’s Equity Shares are listed.

Stock Code in Madras Stock Exchange Limited

ABANLLOYD

Stock Code in The Stock Exchange Mumbai

523204

Stock Code in the National Stock Exchange Ltd

ABANLLOYD

Stock Code in "The Delhi Stock Exchange Association Ltd."

101355

Details of Non-compliance by the Company, Penalties, Strictures imposed on the Company by the Stock Exchange or SEBI or anyStatutory Authority or any matter related to Capital Markets during the last three years - Nil

25

Non-mandatory RequirementsRemuneration Committee:The company has not set up a Remuneration Committee.

Shareholders’ Rights:It is expected that the half-yearly declaration of the financial

performance (including a summary of the significant events in thelast six months) should be sent to each household of each shareholder. As the Company’s half-yearly results were published inEnglish and Tamil newspapers, the same was not sent to thehouseholds of the shareholders.

Categories of Shareholders as on 31 March 2003

ISIN No. for Dematerialised SharesFully PaidINE421A01010

Partly PaidIN9421A01018

Investors’ Help DeskRegistrars and Share Transfer Agents both Physical and Demat

M/s Cameo Corporate Services Ltd.,

Unit:Aban Loyd Chiles Offshore Ltd.,

Subramanian Building, 1Club House Road, Chennai - 600 002.

Category Number of Folio(s) Number of Shares Per cent

Promoter 8 22,07,792 29.93

Collaborator 1 16,65,850 22.58

FIIs, NRIs/OCB 145 67,607 0.92

Mutual Funds, FIs, Banks 24 1,02,962 1.39

Bodies Corporate 336 5,40,308 7.32

Public 15,034 27,92,800 37.86

Total 15,548 73,77,319 100.00

Share Price VolumeThe monthly high and low quotation and the volume of shares traded on BSE & NSE are as under:

Particulars BSE NSE

High Low Volume High Low Volume

April 2002 81.90 58.30 1,02,788 82.30 60.25 2,59,181

May 2002 102.00 70.00 2,04,604 102.00 69.00 7,21,864

June 2002 108.00 72.50 1,46,951 108.00 75.00 5,23,951

July 2002 144.35 101.00 3,66,511 144.00 101.00 9,34,180

August 2002 138.90 97.00 3,44,207 137.40 98.50 14,30,984

September 2002 119.75 104.00 1,21,702 123.00 104.40 2,07,133

October 2002 118.80 102.00 1,11,259 121.75 102.00 1,56,386

November 2002 140.95 116.00 1,11,698 141.30 116.15 3,38,485

December 2002 155.00 128.50 90,193 154.00 128.00 4,67,560

January 2003 185.90 143.00 1,31,851 186.80 142.50 4,50,803

February 2003 173.00 149.00 56,011 172.00 147.50 1,70,533

March 2003 150.00 126.10 48,199 152.00 127.15 2,78,632

26

Distribution of Shareholdings as on 31 March 2003:

Number of Equity Shares held Folio Share Amount

Nos. Per cent Rs. Per cent

Upto 500 14,922 95.97 1,57,97,500 21.43

501-1000 340 2.19 25,98,970 3.53

1001-2000 132 0.85 19,49,280 2.64

2001-3000 46 0.30 11,98,860 1.63

3001-4000 21 0.13 7,49,860 1.02

4001-5000 18 0.12 9,58,100 1.30

5001-10000 31 0.20 21,89,800 2.97

10001 and above 38 0.24 4,82,64,380 65.48

Total 15,548 100.00 7,37,06,750 100.00

27

To the Members of Aban Loyd Chiles Offshore LimitedWe have examined the compliance of conditions of Corporate Governance by Aban Loyd Chiles Offshore

Limited for the year ended 31st March, 2003, as stipulated in Clause 49 of the Listing Agreement of the said

Company with Stock Exchanges in India.

The compliance of condition of Corporate Governance is the responsibility of the Management. Our

examination was limited to procedures and implementation thereof, adopted by the Company for ensuring

the compliance of the conditions of Corporate Governance. It ias neither an audit nor an expression of

opinion on the financial statements of the Company. In our opinion and to the best of our information and

according to the explanations given to us, we certify that the Company has complied with the conditions of

Corporate Governance as stipulated in the above mentioned Listing Agreement.

We state that in respect of investor grievances received during the year ended 31st March, 2003, no investor

grievances are pending against the Company as per the records maintained by the Company.We further state

that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or

effectiveness with which the management has conducted the affairs of the Company.

for FORD, RHODES, PARKS & CO.,

Chartered Accountants

Place: Chennai R.SUBRAMANIAN

Date : 14th July 2003. Partner.

AUDITORS’ REPORTON CORPORATE GOVERNANCE

28

AUDITORS’ REPORT

We have audited the attached Balance Sheet of M/s. Aban Loyd

Chiles Offshore Limited as at 31st March, 2003, the Profit and Loss

Account and the Cash Flow Statement of the Company for the

year ended on that date, annexed thereto. These financial

statements are the responsibility of the Company’s Management.

Our responsibility is to express an opinion on these financial

statements based on our audit.

We conducted our audit in accordance with the auditing standards

generally accepted in India.Those standards require that we plan

and perform the audit to obtain reasonable assurance about

whether the financial statements are free of material

misstatements. An audit includes examining, on a test basis,

evidence supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the accounting

principles used and significant estimates made by management, as

well as evaluating the overall financial statement presentation.We

believe that our audit provides a reasonable basis for our opinion.

We report as follows:

1. As required by the Manufacturing and Other Companies

(Auditor ’s Report) Order, 1988 issued by the Company Law

Board in terms of Section 227 (4A) of the Companies Act, 1956,

as prescribed by the Central Government and on the basis of such

checks as we considered appropriate, we give in the Annexure a

statement on the matters specified in paragraphs 4 and 5 of the

said Order.

2. Further to our comments in the Annexure referred to in

paragraph 1 above, we report that:

a. We have obtained all the information and explanations

which to the best of our knowledge and belief were necessary

for the purposes of our audit.

b. In our opinion, proper books of account as required by

law have been kept by the Company so far as appears from

our examination of the books.

c. The Balance Sheet and Profit and Loss Account dealt

with by this report are in agreement with the books of

accounts maintained by the Company.

d. In our opinion, the Balance Sheet and Profit and Loss

Account dealt with by this report are in compliance with the

Accounting Standards referred to in Section 211 (3C) of the

Companies Act, 1956.

e. In our opinion and based on the information and

explanations given to us, the Directors of the Company do not

prima facie have any disqualification as on 31st March, 2003 in

terms of Clause (g) of sub-section (1) of Section 274 of the

Companies Act, 1956.

f. In our opinion and to the best of our information and

according to the explanations given to us, the accounts read

together with the Notes thereon give the information

required by the Companies Act, 1956, in the manner so

required for the Company and give a true and fair view in

conformity with the accounting principles generally accepted

in India.

(i) in the case of the Balance Sheet, of the state of affairs

of the Company as at 31st March, 2003;

(ii) in the case of the Profit and Loss Account, of the profit

for the year ended on that date; and

(iii) in case of the Cash flow statement, of the cash flows

for the year ended on that date.

for FORD, RHODES, PARKS & CO.,

Chartered Accountants

Chennai: R SUBRAMANIAN

14th July 2003 Partner

TO THE SHAREHOLDERS

29

1. The Company has maintained proper records to show fullparticulars including quantitative details and situation of itsFixed Assets.The Fixed Assets have been physically verifiedby the Management wherever possible at the close of theyear as confirmed by the Management.As explained to usno material discrepancies have come to the notice on suchphysical verification.

2. None of the Fixed Assets have been re-valued during theyear.

3. The stock of stores and spares of the Company have beenphysically verified by the Management at the close of theyear.

4. The procedures of physical verification of stock followedby the Management are reasonable and adequate inrelation to the size of the Company and nature of itsbusiness.

5. The discrepancies between the physical stock and bookstock, which have been properly dealt with in the Books ofaccount were not material.

6. The valuation of stock of materials/components andstores and spares has been fair and proper in accordancewith the normally accepted accounting principles and is onthe same basis as in earlier years.

7. The Company has not taken any loan from companies,firms or other parties as listed in the Register maintainedunder Section 301 of the Companies Act, 1956. Theprovisions of Section 370 of the Companies Act, 1956. arenot applicable to a Company on or after 31st October,1998.

8. The Company has not granted any loan to companies,firms or other parties as listed in the Register maintainedunder Section 301 of the Companies Act.The provisions ofSection 370 of the Companies Act, 1956, are not applicableto a Company on or after 31st October, 1998.

9. Loans/Advances free of interest have been given to theemployees and they are repaying the amount as stipulated.

10. On the basis of checks carried out during the course ofour audit and as per explanations given to us, there areadequate internal control procedures commensurate withthe size of the Company and the nature of its business forthe purchase of stores and spares, plant and machinery,equipment and other assets.

11. There were no purchase during the year of goods andmaterials aggregating to Rs.50,000/- or more in respect ofeach party in which Directors are interested as listed inthe Register maintained under Section 301 of theCompanies Act, 1956. There were no sale of goods,materials and services aggregating to Rs.50,000/- or morein respect of each party made in pursuance of contracts orarrangements entered in the Register maintained underSection 301 of the Companies Act, 1956.

12. As informed to us, there were no unserviceable anddamaged stores and spares held by the Company at theclose of the year. Hence, no provision is required to bemade for the same.

13. The Company has not accepted any deposit from thepublic to which the provisions of Section 58A of theCompanies Act, 1956 and the rules made thereunderapply.

14. The Company’s activities do not generate any scrap or by– product.

15. The Company has an adequate internal audit systemcommensurate with the size and nature of the business ofthe Company.

16. The Central government has not prescribed maintenanceof cost records under Section 209 (1) (d) of theCompanies Act, 1956.

17. The Company is regular in depositing the Provident Funddues.We are informed that the Employees’ State InsuranceScheme is not applicable to the Company.

18. According to the information and explanations given to us,there are no undisputed amount payable in respect ofIncome Tax, Wealth Tax, Sales Tax, Customs Duty andExcise Duty as at 31st March, 2003 which are outstandingfor a period of more than six months from the date theybecame payable.

19. According to the information and explanations given to usand the records of the Company examined by us, nopersonal expenses have been charged to revenue accountother than those payable under contractual obligations orin accordance with generally accepted business practice.

20. The Company is not a Sick Industrial Company within themeaning of clause (O) of sub section (1) of Section 3 of theSick Industrial Companies (Special Provisions) Act, 1985.

21. The Company has a reasonable system for recordingreceipts, issues and consumption of stores commensuratewith its size and nature of its business, and such systemprovides for reasonable allocation of materials andmanhours to the relative contract.

22. In our opinion, the Company has a reasonable system ofinternal control and of authorisation at proper levels onthe issue of stores and allocation of stores and labour tocontracts commensurate with the size of the Companyand the nature of its business.

for FORD, RHODES, PARKS & CO.,

Chartered AccountantsChennai R SUBRAMANIAN Date: 14th July 2003 Partner

AUDITORS’ REPORTANNEXURE TO THE

(Referred to in Paragraph 1 of our Report of even date)

30

Aban Loyd Chiles Offshore Ltd.

Balance Sheet as at 31st March, 2003

Schedule 2003 2002Rupees Rupees Rupees

I. Sources of Funds

1. Shareholders' Funds

(a) Share Capital 1 7,37,06,750 6,27,87,600

(b) Share Capital Suspense 2 – 1,09,19,150

(c) Reserves and Surplus 3 129,42,44,575 124,50,44,253

2. Loan Funds

Secured 4 307,98,93,451 242,79,96,198

Unsecured Loan -Bank – 10,00,00,000

Total Funds Employed 444,78,44,776 384,67,47,201

II. Application of Funds

1. Fixed Assets 5

Gross Block 577,44,34,209 460,34,03,114

Less: Depreciation 251,72,50,209 218,82,31,353

Net Block 325,71,84,000 241,51,71,761

Add: Capital Work in Progress 2,24,80,332 87,51,804

327,96,64,332 242,39,23,565

2. Investments 6 23,03,77,569 6,54,11,414

3. Current Assets, Loans and Advances

(a) Inventory of Stores & Spares (at cost) 22,96,93,534 20,64,07,534

(As certified by the Management)

(b) Sundry Debtors 7 28,18,49,450 41,37,71,566

(c) Cash and Bank Balances 8 28,14,91,311 18,42,57,861

(d) Loans and Advances 9 49,53,15,454 56,56,25,315

128,83,49,749 137,00,62,276

Less: Current Liabilities and Provisions 10

(a) Current Liabilities 12,49,08,266 12,20,60,440

(b) Provisions 4,15,75,214 2,94,82,700

16,64,83,480 15,15,43,140

Net Current Assets 112,18,66,269 121,85,19,136

Deferred Tax-Net 11 (34,39,48,703) (10,33,48,703)

Miscellaneous Expenditure (to the

extent not written off or adjusted) 12 15,98,85,309 24,22,41,789

Total Assets 444,78,44,776 384,67,47,201

Notes to Accounts 17

Per our Report attached On behalf of the Board

For Ford, Rhodes, Parks & Co.

Chartered Accountants M. A. Abraham Reji Abraham Renny Abraham V. S. Rao

Managing Director Wholetime Director Director Vice Chairman

R. Subramanian P. Murari S. Srinivasan P. Venkateswaran C. P. Gopalkrishnan

Partner Director Director Director (Operations) Director (Finance) &

Chennai, 14th July, 2003 Secretary

As at 31st March

30

31

Aban Loyd Chiles Offshore Ltd.

Profit and Loss Account for the Year ended 31st March, 2003

For the Year ended 31st March

Schedule 2003 2002Rupees Rupees

I. Income

Income from Operations 13 243,84,35,447 200,48,64,081

Other Income 14 7,72,33,000 9,14,73,970

251,56,68,447 209,63,38,051

II. Expenditure

Operating, Administrative and Other Expenses 15 139,47,41,112 119,07,23,334

Interest 16 36,84,55,256 32,05,95,729

Depreciation 32,91,90,286 35,98,32,656

Goodwill Amortised 6,29,32,557 6,29,32,554

Deferred Revenue Expenses Written off 5,73,700 5,73,700

215,58,92,911 193,46,57,973

Profit for the year before taxation 35,97,75,536 16,16,80,078

Less: Provision for taxation

- Current Tax 2,84,00,000 1,30,00,000

- Deferred Tax 24,06,00,000 1,81,78,702

Profit for the year after taxation 9,07,75,536 13,05,01,376

Add: Profit brought forward from Previous Year 102,48,44,768 99,38,26,092

Profit available for Appropriation 111,56,20,304 112,43,27,468

Transfer to General Reserve 1,00,00,000 7,00,00,000

Proposed Dividend 3,68,53,375 2,94,82,700

Tax on Dividend 47,21,839 –

Balance Carried to Balance Sheet 106,40,45,090 102,48,44,768

Notes to Accounts 17

Earnings per Equity Share of Rs. 10/- each 12.32 17.71

Per our Report attached On behalf of the Board

For Ford, Rhodes, Parks & Co.

Chartered Accountants M. A. Abraham Reji Abraham Renny Abraham V. S. Rao

Managing Director Wholetime Director Director Vice Chairman

R. Subramanian P. Murari S. Srinivasan P. Venkateswaran C. P. Gopalkrishnan

Partner Director Director Director (Operations) Director (Finance) &

Chennai, 14th July, 2003 Secretary

31

32

Schedules annexed to and forming part of Accounts

As at 31st March2003 2002

Rupees Rupees

Authorised

18,00,00,000 Equity Shares of Rs.10 each 180,00,00,000 180,00,00,000

2,00,00,000 Cumulative Redeemable Preference Shares of Rs.10 each 20,00,00,000 20,00,00,000

200,00,00,000 200,00,00,000

Issued

62,78,760 Equity Shares of Rs.10 each.

(Previous Year: 62,78,760 Equity Shares of Rs. 10 each) 6,27,87,600 6,27,87,600

10,85,271 Equity Shares of Rs. 10 each fully paid up and 13,288 Equity

Shares of Rs. 10 each partly paid upto Rs.5 issued pursuant to

Scheme of Amalgamation of Hitech Drilling Services India Ltd

with the Company. (Previous Year: NIL) 1,09,19,150 –

7,37,06,750 6,27,87,600

Subscribed and Paid-up

73,64,031 Equity Shares of Rs.10 each fully paid.

(Previous Year: 62,78,760 Equity Shares of Rs. 10 each) 7,36,40,310 6,27,87,600

13,288 Equity Shares of Rs. 10 each,partly paid upto Rs. 5

(Previous Year : NIL) 66,440 –

Total 7,37,06,750 6,27,87,600

NIL Equity Shares of Rs. 10 each fully paid up and NIL Equity

Shares of Rs. 10 each partly paid upto Rs. 5 to be issued pursuant to

Scheme of Amalgamation of Hitech Drilling Services India Ltd with the

Company. (Previous Year: 10,85,271 Equity Shares of Rs. 10 each fully

paid up and 13,288 Equity Shares of Rs.10 each partly paid upto Rs. 5) – 1,09,19,150

Total – 1,09,19,150

1 SHARE CAPITAL

2 SHARE CAPITAL SUSPENSE

(a) Capital Reserve 33,500 33,500

(b) Share Premium Account

- As per last Balance Sheet 12,84,03,600 12,84,03,600

(c ) Investment Allowance Reserve-Utilised 5,24,00,000 5,24,00,000

(d) General Reserve

- At the beginning of the year 3,93,62,385 10,69,00,000

Less: Accumulated initial Deferred Tax Liability – 8,51,70,001

Add: Reserves taken over on Amalgamation – 92,57,53,602

Add: Transfer from Profit and Loss Account 1,00,00,000 7,00,00,000

Less: Adjustments on Amalgamation – 97,81,21,216

4,93,62,385 3,93,62,385

(e) Profit and Loss Account 106,40,45,090 102,48,44,768

Total 129,42,44,575 124,50,44,253

3 RESERVES AND SURPLUS

32

Aban Loyd Chiles Offshore Ltd.

33

As at 31st March

Schedules annexed to and forming part of Accounts

2003 2002Rupees Rupees

a. Rupee Loan from Financial Institutions – 165,95,60,649

b. Term Loan from Banks 307,36,17,808 60,92,33,332

c. Cash Credit from Banks 24,21,253 14,68,42,541

d. Others 38,54,390 1,23,59,676

Total 307,98,93,451 242,79,96,198

Notes:

1. Term Loan from Banks are secured by first charge on the offshore drilling rigs and accessories, floating production unit,

windmills and all movable assets, both present and future. Further the term loan from banks are secured by a mortgage

of a certain portion of land and equitable mortgage of office property of the Company.

2. Cash Credit from Banks are secured by way of hypothecation of inventory of stores and spares , book debts and by way

of second charge on the Rigs of the Company.

3. Other loans represent hire purchase liability secured by hypothecation of certain vehicles of the Company.

4 SECURED LOANS

5 FIXED ASSETSGROSS BLOCK DEPRECIATION NET BLOCK

Description As at 1st Additions Deductions As at 31st As at 1st Additions On Deductions As at 31st As at 31st As at 31stof the asset April, 2002 during during March, 2003 April, 2002 during during March, 2003 March, 2003 March, 2002

the year the year the year the year

Goodwill 37,75,95,325 – 6,29,32,557 31,46,62,768 – – – – 31,46,62,768 37,75,95,325

Land-Freehold 15,61,88,112 3,33,668 59,60,684 15,05,61,096 – – – – 15,05,61,096 15,61,88,112

Building 15,49,33,491 – – 15,49,33,491 1,27,80,003 25,59,251 – 1,53,39,254 13,95,94,237 14,21,53,488

Offshore Jackup Drilling Rigs, Floating Production unit and connected machineries 257,47,92,121 4,94,35,978 – 262,42,28,099 194,02,59,487 14,86,46,073 – 208,89,05,560 53,53,22,539 63,45,32,634

Other Machineries 8,08,24,706 – – 8,08,24,706 7,67,35,196 – – 7,67,35,196 40,89,510 40,89,510

Wind Mills 119,71,54,470 118,32,53,548 – 238,04,08,018 13,10,52,616 17,11,41,832 – 30,21,94,448 207,82,13,570 106,61,01,854

Office Equipment 2,79,06,449 22,16,548 1,75,000 2,99,47,997 1,82,37,026 40,87,112 1,05,877 2,22,18,261 77,29,736 96,69,423

Furniture and Fixtures 1,71,79,248 – 25,000 1,71,54,248 39,51,264 10,68,202 5,540 50,13,926 1,21,40,322 1,32,27,984

Vehicles 1,68,29,192 53,05,740 4,21,146 2,17,13,786 52,15,761 16,87,816 60,013 68,43,564 1,48,70,222 1,16,13,431

Total 460,34,03,114 124,05,45,482 6,95,14,387 577,44,34,209 218,82,31,353 32,91,90,286 1,71,430 251,72,50,209 325,71,84,000 241,51,71,761Capital Work- in-progress 2,24,80,332 87,51,804

Total 460,34,03,114 124,05,45,482 6,95,14,387 577,44,34,209 218,82,31,353 32,91,90,286 1,71,430 251,72,50,209 327,96,64,332 242,39,23,565Previous Year 197,09,48,611 270,83,04,135 7,58,49,632 460,34,03,114 183,23,54,167 35,98,32,656 39,55,470 218,82,31,353 242,39,23,565 101,07,55,344

Note: Additions to fixed assets in the previous year includes additions made on account of amalgamation of Hitech Drilling Services India Limited with the Company.

Amount in Rupees

As at 31st MarchNo. of Shares / Face Value 2003 2002

Units Rupees Rupees Rupees

Long Term InvestmentsA. Trade Investments

Fully Paid Equity Shares- Unquoted (a) Aban Energies Limited

(A wholly owned Subsidiary Company) 2,00,070 10.00 20,00,700 20,00,700(b) Aban Informatics Private Ltd 3,00,750 10.00 1,98,49,500 1,98,49,500(c) Frontier Aban Drilling India Ltd 49,993 100.00 49,99,300 49,99,300

33

6 INVESTMENTS (At cost)

Aban Loyd Chiles Offshore Ltd.

34

Schedules annexed to and forming part of Accounts

No. of Shares / Face Value 2003 2002Units Rupees Rupees Rupees

B. Others (Non Trade)Equity Shares Quoted -Fully paidAgri Marine Exports Ltd 5,400 10.00 67,500 67,500Arihant Threads Ltd 13,600 10.00 1,70,000 1,70,000Corporate Couriers Ltd 10,400 10.00 4,16,000 4,16,000GIC Housing Finance Ltd 1,700 10.00 – 85,000Himalaya Granites Ltd 1,400 10.00 42,000 42,000Indo Germa Products Ltd 8,800 10.00 88,000 88,000Industrial Development Bank of India 16,800 10.00 13,65,000 13,65,000Jindal Polyesters Ltd 200 10.00 – 19,500Kongarar Integrated Fibres Ltd 200 10.00 2,000 2,000Kongarar Textiles Ltd 500 10.00 22,500 22,500Mardia Steel Ltd 8,100 10.00 4,05,000 4,05,000Metrochem Industries Ltd 200 10.00 22,000 22,000Mirza Tanners Ltd 2,800 10.00 68,600 68,600Jayaswal Neco Ltd 1,000 10.00 – 80,000Orient Organic Ltd 1,500 10.00 15,000 15,000Punjab Woolcombers Ltd 300 10.00 27,000 27,000Ram Kaashyap Investments Ltd 500 10.00 5,000 5,000Ram Ratna Wires Ltd 300 10.00 3,000 3,000Wintac Ltd 700 10.00 70,000 70,000Samrat Ashoka Exports Ltd 200 10.00 12,000 12,000Shri Karthik Papers Ltd 3,100 10.00 31,000 31,000Shreyas Shipping Ltd 1,400 10.00 28,000 28,000Southern Fuels Ltd 1,100 10.00 11,000 11,000State Bank of Travancore 245 100.00 1,47,000 1,47,000Stiefel Und Schuh (India) Ltd 300 10.00 3,000 3,000Thambbi Modern Spinning Mills Ltd 1,300 10.00 65,000 65,000The ICICI Bank Ltd 2,100 10.00 7,86,374 7,86,374The Waterbase Ltd 10,500 10.00 5,04,000 5,04,000Partly Paid Equity Shares Nutech Financial Services Ltd 17,700 10.00 1,03,828 1,03,828Current Investments (At lower of cost and fair value)(See note: 3)Standard Chartered Grindlays Mutual Fund 35,05,131.000 10.00 – 3,52,43,684HDFC Income Fund (G) 2,50,000.000 10.00 25,00,000 25,00,000Kotak Mahindra Liquid Institutional Plan -Dividend 11,01,026.900 10.00 1,10,36,251 –Chola Mutual Fund -Liquid Institutional Plan 5,02,274.600 10.00 50,22,746 –DSP Merrill Lynch Liquidity Fund -Dividend 10,79,837.758 10.00 1,33,96,359 –Deutsche Premier Bond Fund Inst. Plan-Dividend 10,18,246.986 10.00 1,00,00,000 –HDFC Floating Rate Income Fund -Dividend 39,72,915.400 10.00 4,02,04,315 –Prudential ICICI Liquid Plan-Dividend 16,97,592.804 10.00 2,01,02,724 –IL & FS Liquid Fund-Dividend 9,86,020.218 10.00 1,00,47,349 –JM Mutual Fund-Short term-Dividend 4,90,881.812 10.00 50,58,292 –Birla Bond Plus Plan-B Growth 18,12,476.842 10.00 2,01,19,580 –HSBC Equity Fund-Dividend 9,86,319.745 10.00 1,00,47,245 –Grindlays Floating Rate-Dividend 20,05,431.087 10.00 2,01,79,249 –Templeton Mutual Fund-Growth Plan 2,62,421.169 10.00 50,00,000 –Templeton India Liquid Fund-Weekly Plan 30,17,449.581 10.00 3,01,80,229 –K Bond Wholesale Plan-Bonus option 47,476.468 10.00 – –Sundaram Bond Saver -Bonus Option 92,077.734 10.00 – –Sub Total 23,42,23,641 6,92,57,486

Less: Provision for Dimunition in Value of Investments 38,46,072 38,46,072Total 23,03,77,569 6,54,11,414Aggregate Value of Quoted Investments 20,73,74,141 4,24,07,986Aggregate Market Value of Quoted Investments 20,52,30,199 4,16,57,062

6 INVESTMENTS (At cost) Contd.

As at 31st March

34

Aban Loyd Chiles Offshore Ltd.

35

As at 31st March

Schedules annexed to and forming part of Accounts

2003 2002Rupees Rupees

Considered Good-Unsecured

(a) Outstanding for more than six months 5,04,48,711 1,49,19,279

(b) Others 23,14,00,739 39,88,52,287

Total 28,18,49,450 41,37,71,566

Cash on Hand 2,88,149 2,54,800

Balances with Scheduled Banks

- In Current Accounts 15,20,34,886 14,16,24,792

- In Deposit Accounts 12,91,68,276 4,23,78,269

Total 28,14,91,311 18,42,57,861

7 SUNDRY DEBTORS

8 CASH AND BANK BALANCES

(Recoverable in cash or in kind or for value to be received,unsecured,considered good)

Loans and Advances 35,76,92,531 44,98,61,515

Sundry Deposits 3,62,05,983 3,77,57,505

Advance payment of taxes (Net of provision for taxation Rs. 83,18,64,519/-)

(Previous Year: Rs. 80,34,64,519) 10,14,16,940 7,80,06,295

Total 49,53,15,454 56,56,25,315

9 LOANS AND ADVANCES

(A) Current Liabilities

(a) Sundry Creditors (See Note: 14) 11,60,91,631 10,20,51,771

(b) Interest accrued but not due on secured loans 88,16,635 2,00,08,669

12,49,08,266 12,20,60,440

(B) Provisions

(a) Proposed Dividend 3,68,53,375 2,94,82,700

(b) Tax on Dividend 47,21,839 –

4,15,75,214 2,94,82,700

Total 16,64,83,480 15,15,43,140

10 CURRENT LIABILITIES AND PROVISIONS

Deferred tax Asset on Timing differences

Provision for dimunition in the value of investments (13,79,778) (3,02,878)

Deferred Tax Liability on timing differences

On deferred dry docking charges and deferred expenses (1,54,71,519) 3,11,13,389

On depreciation 36,08,00,000 7,25,38,192

Total 34,39,48,703 10,33,48,703

11 DEFERRED TAX (NET)

35

Aban Loyd Chiles Offshore Ltd.

36

For the Year ended 31st March

As at 31st March

Schedules annexed to and forming part of Accounts

2003 2003 2002Rupees Rupees Rupees

2003 2002Rupees Rupees

(To the extent not written off or adjusted)

(a) Deferred Expenditure 11,47,400 17,21,100

Less: Written off 5,73,700 5,73,700 5,73,700

(b) Dry Docking Expenditure at the beginning of the year 24,10,94,389 8,77,45,850

Deferred expenditure taken over on Amalgamation – 9,97,47,083

Expenditure incurred during the year – 13,48,59,793

Less: Write off during the year and included under

Repairs to Machinery in the Profit and Loss Account 8,17,82,780 15,93,11,609 8,12,58,337

Total 15,98,85,309 24,22,41,789

12 MISCELLANEOUS EXPENDITURE

Drilling Revenue 221,81,33,573 180,98,64,081

Income from Wind Power Operations 22,03,01,874 –

Income from Machinery Let – 19,50,00,000

Total 243,84,35,447 200,48,64,081

13 INCOME FROM OPERATIONS

(a) Rental Income(Gross) 13,00,000 –

(b) Dividend Income (Gross) 52,411 73,36,010

(c) Interest on Bank Deposits (Gross) 34,11,963 49,79,587

(d) Interest-Others (Gross) 25,00,881 40,34,621

(e) Interest on Income-tax refund 1,71,00,645 –

(f) Provision no longer required – 2,39,54,668

(g) Service Charges (Gross) 42,62,000 87,84,607

(h) Others (Gross) 4,76,35,397 2,58,253

(i) Profit on Sale of Investments (Net) 9,69,703 64,48,440

(j) Claims – 3,56,77,784

Total 7,72,33,000 9,14,73,970

14 OTHER INCOME

Note : Tax deducted at source on a, b, c, d, g, h Rs. 20,59,781/- (Previous year - Rs. 15,01,628/-)

36

Aban Loyd Chiles Offshore Ltd.

37

For the Year ended 31st March

Schedules annexed to and forming part of Accounts

2003 2002Rupees Rupees

Consumption - Stores and Spares 25,65,61,939 15,01,56,482

Salaries and Bonus 13,96,18,987 12,34,53,515

Contribution to Provident funds and Other funds 66,40,199 97,89,544

Staff Welfare 89,17,633 1,11,50,684

Rent, Rates and Taxes 34,30,880 76,29,945

Rental Charges for Machinery 45,36,38,016 47,18,32,047

Repairs to Machinery 14,68,28,537 8,12,58,337

Insurance 16,45,25,154 13,02,88,744

Drilling Services and Management Fees 6,50,26,676 2,73,25,976

Consultancy and Professional Fees 7,39,54,844 10,66,64,904

Catering Expenses 96,69,273 94,31,207

Postage, Telegram and Telex 52,30,857 80,77,227

Printing and Stationery 19,41,281 22,86,885

Travelling Expenses 2,97,26,503 2,07,72,375

Guarantee Commission, Bank and Other Charges 1,29,65,186 93,34,045

Loss on Sale of Assets 41,43,000 58,81,788

Auditors' Remuneration :

Audit Fees 2,62,500 2,70,000

Tax Audit Fees 1,62,000 52,500

For Other Services 2,61,604 1,87,989

Other Expenses reimbursed 57,000 7,43,104 54,000

Other Expenses 1,11,79,043 1,48,25,140

Total 139,47,41,112 119,07,23,334

1. SIGNIFICANT ACCOUNTING POLICIESACCOUNTING CONVENTIONS AND CONCEPTSA. Financial statements are based on historical cost convention and on the basis of a going concern and comply with

the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956. The Company followsmercantile system of accounting and recognises income and expenditure on an accrual basis.

B. Fixed AssetsFixed Assets are capitalised at cost inclusive of installation expenses and interest upto the date the asset is put to use.The original cost of Fixed Assets acquired through foreign currency loans are adjusted for any exchange differencebetween actual payment of principal and the original cost booked and by revaluation of closing foreign currency loan

15 OPERATING, ADMINISTRATIVE AND OTHER EXPENSES

On Long Term Loans 35,70,23,394 28,90,46,021

Others 1,14,31,862 3,15,49,708

Total 36,84,55,256 32,05,95,729

16 INTEREST

17 NOTES ATTACHED TO AND FORMING PART OF ACCOUNTS

37

Aban Loyd Chiles Offshore Ltd.

38

Schedules annexed to and forming part of Accounts

at the rate prevailing on the closing day.C. Depreciation

Depreciation on Fixed Assets is provided on the Straight Line basis at rates prescribed in Schedule XIV of theCompanies Act, 1956 on a pro-rata basis. Depreciation on certain Downhole Equipments included in Plant andMachinery is provided at a higher rate on straight line method based on technical evaluation of the expected usefullife. Depreciation on windmills is provided at a higher rate on straight line method based on technical evaluation ofthe expected useful life.

D. Inventory ValuationInventory of Stores and Spares are valued at cost based on First-in-First-out Cost formula.

E. Foreign Currency TransactionsTransactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Currentassets and Current liabilities are translated at year end exchange rates and the realised exchange gains or losses arerecognised in the Profit and Loss Account.

F. Investments(a). Long Term Quoted Investments are valued at cost unless there is a permanent fall in the value. A provision for

dimunition is made to recognise a decline other than temporary,in the value of long term Investments.(b) Long Term Unquoted Investments in Subsidiary Company being of long term nature are valued at cost and no loss

is recognised in the fall in their networth unless there is a permanent fall in their networth.(c) Current Investments are valued at lower of cost and fair value of the category of such investments.

G. Proposed DividendThe Dividend as proposed by the Directors is provided in the books of account pending approval at the AnnualGeneral Meeting.

H. Retirement BenefitsContribution to Provident Fund is made monthly at a predetermined rate to the Provident Fund authorities and debitedto the Profit and Loss Account on accrual basis. The Company has an arrangement with Life Insurance Corporationof India (LIC) to administer its Gratuity schemes. The premium advised by LIC is debited to the Profit and Loss Accounton an accrual basis. The provision for leave encashment has been made on the basis of actuarial valuation.

I. Borrowing CostBorrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part ofthe cost of such assets.A qualifying asset is one that necessarily takes substantial period of time to get ready forintended use.All other borrowing costs are charged to revenue.

J. Amortisation of ExpenditureExpenditure incurred in connection with dry docking of rig is amortised over a beneficial period of five years fromthe year of completion of dry docking and such amortised amount is included under the head Repairs to Machineryin Profit and Loss Account. The balance unamortised amount is carried forward under the head MiscellaneousExpenditure in the Balance Sheet.

K. Taxes on IncomeThe Income tax provision comprises of current tax and deferred tax. Current tax is the amount of tax payable inrespect of income for the period.In accordance with the Accounting Standard 22 - Accounting for Taxes on Incomeissued by the Institute of Chartered Accountants of India, the deferred tax for timing difference between book profitand tax profit for the year is accounted based on the rates and laws that have been enacted or substantially enactedas on the Balance Sheet date. However deferred tax assets arising from timing difference are recognised to the extentof their actual realisability in future years.

38

Aban Loyd Chiles Offshore Ltd.

39

Schedules annexed to and forming part of Accounts

(Amount in Rupees)

31.3.2003 31.3.2002

a. Guarantees given by banks on behalf of the Company 33,58,71,510 20,04,60,636

b. Liability in respect of partly paid shares held as Investment 73,172 73,172

c. Corporate Guarantee given by the Company 5,32,66,731 5,32,66,731

Purchased Units Sold Units

Kotak Mahindra Liquid Scheme - Growth 8,30,861.520 8,30,861.520

Kotak Mahindra Liquid Institutional Plan- Dividend 11,01,026.900 –

Kotak Bond - Whole sale Plan 1,42,429.403 94,952.935

Chola Mutual Fund - Liquid Plan 4,12,065.271 4,12,065.271

Chola Mutual Fund - Liquid Institutional plan - Dividend 5,02,274.600 –

DSP Merrill Lynch - Short Term Growth Plan 38,96,432.816 38,96,432.816

DSP Merrill Lynch - Liquid Fund Growth Plan 20,68,539.232 20,68,539.232

DSP Merrill Lynch - Liquid Fund - Dividend 10,79,837.758 –

Deutsche Premier Bond Fund Institutional Plan - Dividend 10,18,246.986 –

HDFC Short Term Plan - Growth 36,91,126.530 36,91,126.530

HDFC Floating Interest Rate Income Fund 39,72,915.400 39,72,915.400

HDFC Liquid Fund - Growth Plan 16,65,140.290 16,65,140.290

HDFC Liquid Fund - Growth Plan 16,63,450.660 16,63,450.660

HDFC Floating Interest Rate Income Fund - Dividend 39,72,915.400 –

Prudential ICICI - Liquid Plan 13,51,634.460 13,51,634.460

Prudential ICICI - Liquid Plan - Dividend 16,97,592.804 –

IL & FS Liquid Account - Growth Plan 8,95,062.830 8,95,062.830

IL & FS Liquid Account - Dividend plan 9,86,020.218 –

JM Mutual Fund - Growth Plan 4,73,915.681 4,73,915.681

JM Mutual Fund - Dividend Plan 4,90,881.812 –

Sundaram Bond Saver 1,94,386.324 1,02,308.590

Birla Bond Plus Plan B - Growth 18,12,316.500 18,12,316.500

Birla Cash Plus Plan B - Growth 12,35,209.132 12,35,209.132

Birla Bond Plus Plan B - Growth 18,12,476.842 –

HSBC Cash Fund 9,86,319.745 9,86,319.745

HSBC Cash Fund - Dividend 9,86,319.745 –

Standard Chartered Mutual Fund 36,24,337.425 36,24,337.425

Grindlays Short Term Plan - Growth 16,75,364.601 16,75,364.601

Grindlays Floating Rate - Growth 20,05,371.299 20,05,371.299

Grindlays Floating Rate - Dividend 20,05,431.087 –

Templeton India - Growth Plan 2,62,421.169 –

Templeton India - Income Plan Growth 18,342.704 18,342.704

Templeton India Treasury Management A/c 13,374.200 13,374.200

Templeton India Treasury Fund A/c 6,671.668 6,671.668

Templeton India Liquid Fund 30,17,449.581 –

Standard Chartered Grindlays Mutual Fund – 35,05,531.000

3. During the year the Company acquired and sold the following investments:

2. Contingent liabilities not provided for

39

Aban Loyd Chiles Offshore Ltd.

40

Schedules annexed to and forming part of Accounts

(Amount in Rupees)

31.3.2003 31.3.2002

4. a. Managerial RemunerationSalary & Allowances 68,32,000 56,06,000Monetary Value of Perquisites 20,49,966 69,32,761Sitting fees 66,000 74,500Commission 66,30,503 36,12,684

1,55,78,469 1,62,25,945b. Computation of Net Profit in accordance with Section 309(5)

of the Companies Act, 1956 and calculation of Managing Director and Wholetime Director's Commission.Net Profit as per Profit & Loss Account 35,97,75,536 16,16,80,078Add : Directors' Remuneration 1,55,12,469 1,61,51,445

Directors' Sitting Fees 66,000 74,500Depreciation as per Books 32,91,90,286 35,98,32,656Loss on sale of Assets 41,43,000 58,81,788Deferred Expenses Written off 5,73,700 5,73,700Goodwill Amortised 6,29,32,557 6,29,32,554

77,21,93,548 60,71,26,721Less: Depreciation as per Section 350 of the Companies Act, 1956 32,91,90,286 35,98,32,656

Profit on Sale of Investments 9,69,703 64,48,44033,01,59,989 36,62,81,096

Profit as per Section 309(5) of the Companies Act, 1956 44,20,33,559 24,08,45,625Commission to Managing Director @ 1% 44,20,336 24,08,456Commission to Wholetime Director @ 0.5% 22,10,167 12,04,228

66,30,503 36,12,684

Units

5. Licensed/Installed capacities Not Applicable Not Applicable6. Generation of Power (Net) 8,09,70,504 22,03,01,874 NIL7. Value of Imports by the Company on CIF basis

a. Capital items 4,78,00,035 8,69,33,678b. Stores & Spare Parts 6,22,10,395 7,96,47,254

8. Expenditure in Foreign Currency (Cash Basis)a. Interest on Foreign Currency Loans 1,37,907 1,22,92,989b. Drilling Services & Management Fees 2,13,98,180 2,37,36,052c. Travel and Others 27,70,080 91,41,006d. Consultancy fees 94,81,640 54,44,608e. Dry docking expenses – 15,57,23,272f. Storage Tanker hire charges 25,05,79,268 26,37,40,993

9. Income Earned in Foreign Exchangea. Drilling Revenue 221,81,33,573 180,98,64,081b. Others – 3,56,77,784

10. a. Value of Imported Stores & Spares Consumed 5,70,33,901 7,96,47,254% of above to total consumption 22.23% 53.04%

b. Value of Indigenous Stores & Spares consumed 19,95,28,038 7,05,09,228% of above to total consumption 77.77% 46.96%

40

Aban Loyd Chiles Offshore Ltd.

41

(Amount in Rupees)

Schedules annexed to and forming part of Accounts

No. of Non-Resident No. of Equity Net DividendShareholders Shares held remitted (Rs.)

11. Dividend remitted in Foreign Currencyfor Financial Year 2001 - 02 1 16,65,850 56,13,914Previous year 1 16,65,850 49,97,500

12. Related Party disclosure:Enterprise where control exists

1. Subsidiary CompanyAban Energies Limited

Other related parties with whom the company had transactions1. Joint Venture

(a) Frontier Aban Drilling (India) Limited

2. Key Management personnel(a) Mr. M A Abraham – Managing Director(b) Mr. Reji Abraham – Wholetime Director(c) Mr. Renny Abraham – Non-Executive Director(d) Mr. P Venkateswaran – Director-Operations(e) Mr. C P Gopalkrishnan – Director(Finance) & Secretary(f) Mr. V S Rao – Non-Executive Director(g) Mr. P Murari – Non-Executive Director(h) Mr. S. Srinivasan – Non-Executive Director (Nominee of ICICI Bank Limited)(i) Mr. Frank A Wojtek – Non-Executive Director

Transaction with Related Parties During the Year

Nature of Transaction

2003 2002 2003 2002 2003 2002

i) Machinery maintenance charges paid 3,59,05,711 – – – – –

ii) Machinery rental charges received – 19,50,00,000 – – – –

iii) Investment in Share Capital – – 49,99,300 49,99,300 – –iv) Services Charges Received – – 3,39,25,098 68,98,143 – –v) Remuneration – – – – 1,55,78,469 1,62,25,945vi) Purchase of Assets 11,51,18,729 – – – –vii) Amount Advanced – – 1,26,60,000 20,00,000 – 30,00,000viii)Amount Outstanding as at

31.3.2003 receivable/(payable) 2,02,11,331 7,15,83,431 1,12,00,364 20,00,000 29,86,000 31,28,000ix) Amount written off or written on NIL NIL NIL NIL NIL NIL

13. Segment ReportingA. Primary segment as per the Accounting Standard 17-segment reporting issued by the Institute of Chartered

Accountants of India

The Company's primary segments are Offshore Oil Drilling services and Wind Energy Services.

The above business segments have been identified considering the nature of services rendered and the internalfinancial reporting system. Income and Expenses have been accounted for based on their relationship to theoperating activities of the segment

B. Secondary SegmentSince the the Company does not have any Overseas Operations there are no reportable geographical segments.

41

Key Management PersonnelJoint Venture EnterpriseSubsidiary Company

Aban Loyd Chiles Offshore Ltd.

42

Schedules annexed to and forming part of Accounts

(Amount in Rupees)Primary Segment Information

2003 2002

1. Segment Revenue

- Drilling 229,10,24,573 186,56,92,999

- Wind Energy 22,46,43,874 251,56,68,447 23,06,77,784 209,63,70,783

2. Segment Result

- Drilling 55,54,21,549 23,30,55,425

- Wind Energy (19,56,46,013) 35,97,75,536 (7,13,75,348) 16,16,80,077

3. Segment Assets

- Drilling 220,44,45,105 264,34,49,243

- Wind Energy 226,21,52,036 446,65,97,141 107,01,91,364 371,36,40,607

4. Segment Liabilities

- Drilling 206,85,51,717 235,50,14,629

- Wind Energy 113,62,50,000 320,48,01,717 32,45,24,709 267,95,39,338

5. Depreciation

- Drilling 15,80,48,453 29,81,19,886

- Wind Energy 17,11,41,833 32,91,90,286 6,17,12,770 35,98,32,656

6. Capital Expenditure

- Drilling 5,07,10,104 187,17,07,777

- Wind Energy 118,32,53,548 123,39,63,652 76,07,46,729 263,24,54,506

14. Sundry Creditors Include Rs. 1,33,221/- (Previous Year Rs. 44,538/-) due to Small Scale Industrial Undertakings.

15. Sundry Debtors include Rs. 2,02,11,331/- (Previous Year Rs. 7,15,83,431/-) due from the Subsidiary Company, AbanEnergies Ltd. Maximum amount outstanding at any time during the year Rs. 7,15,83,431/- (Previous YearRs. 22,08,83,338/-)

16. Loans and Advances include loan to wholetime Directors of the Company who were officers at the time of taking theloan Rs. 29,86,000/- (Previous year Rs. 31,28,000/-). Maximum amount outstanding at any time during the yearRs. 31,28,000/- (Previous Year Rs. 31,28,000/-).

2002-03 2001-02

No. of shares No. of shares

(a) Share Capital

Fully paid 73,64,031 62,78,760

Partly paid calculated as fully paid 6,644 –

(b) Share Capital Suspense

Fully paid – 10,85,271

Partly paid calculated as fully paid – 6,644

73,70,675 73,70,675

Profit after Tax Rs. 9,07,75,536 13,05,01,376

Earning per Share Rs. 12.32 17.71

17. Earning per share is calculated as shown below: (Equity shares of Rs.10/- each)

42

Aban Loyd Chiles Offshore Ltd.

43

Schedules annexed to and forming part of Accounts

18. Disclosure under Accounting Standard 27-Financial Reporting of interests in joint ventures. The Company's interests,

as a venturer, in jointly controlled entity is :

For the year ended31st March, 2003

Rs. In lacsunaudited

3. IncomeIncome from operations 2456.51Other Income 26.36

4. Expensesa) Stores and Spares consumed 404.35b) Employee costs 46.49c) Other Expenses 1888.72d) Interest 16.56e) Depreciation 1.91f) Deferred revenue expenses written off 61.46

As this is the first year of adoption of Accounting Standard 27, figures for the previous year have not been presented.

19. Previous year's figures are re-grouped/re-arranged wherever necessary.

Per our Report attached On behalf of the BoardFor Ford, Rhodes, Parks & Co.Chartered Accountants M. A. Abraham Reji Abraham Renny Abraham V. S. Rao

Managing Director Wholetime Director Director Vice Chairman

R. Subramanian P. Murari S. Srinivasan P. Venkateswaran C. P. GopalkrishnanPartner Director Director Director (Operations) Director (Finance) &Chennai, 14th July, 2003 Secretary

43

Name of the Company Country of Incorporation Proportion of ownership interest

Frontier Aban Drilling (India) Limited India 33.33%

The Company's interests in this joint venture is reported as Long Term investments (Schedule-6) and stated at cost.However, the Company's share of each assets, liabilities, income and expenses (each without elimination of the effect oftransactions between the Company and the joint venture) related to its interest in the joint venture are :

The following are the aggregate amounts of each of the assets, liabilities,income and expenses relating to the Company'sinterests in the joint venture:

As at 31st March, 2003Rs. In lacsunaudited

1. Assets1. Fixed Assets (Net) 17.312. Current Assets, Loans and Advances

a) Inventories 133.75b) Sundry Debtors 534.85c) Cash and Bank Balances 55.78d) Loans and Advances 312.75

2. Liabilities1. Secured Loans 161.432. Current Liabilities and Provisions 843.68

Aban Loyd Chiles Offshore Ltd.

44

N I LPublic Issue

N I LBonus Issue

N I LRight Issue

N I LPrivate Placement

4 4 4 7 8 4 5 4 4 4 7 8 4 5Total Assets Total Liabilities

7 3 7 0 7 3 0 7 9 8 9 3Paid-up Capital

Sources of FundsSecured Loans

N I L N I LShare Capital Suspense Unsecured Loans

1 2 9 4 2 4 5Reserves & Surplus

3 2 7 9 6 6 4 1 5 9 8 8 5Net Fixed Assets

Application of FundsMiscellaneous Expenditure

2 3 0 3 7 8 ( 3 4 3 9 4 8 )Investments Deferred Tax-Net

1 1 2 1 8 6 6Net Current Assets

1 3 4 7 3

3Date Month Year

1 0 3 0 3

1 8Registration No. State Code No.

Balance Sheet Date

Item Code No. (ITC Code) Product Description

1. Registration Details

2. Capital raised during the year

3. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)

2 4 3 8 4 3 6 9 0 7 7 6Turnover Profit after Tax

7 7 2 3 3 1 2 . 3 2Other Income Earnings per Share in Rs.

2 1 5 5 8 9 3 5 0Total Expenditure Dividend Rate %

3 5 9 7 7 6Profit before Tax

8 4 2 8 3 1 . 0 2 Oil Well Drilling

4. Performance of the Company (Amount in Rs. Thousands)

5. Generic Names of Principal Products/Services of Company

Balance Sheet AbstractInformation pursuant to Part IV of Schedule VI to the Companies Act, 1956

Balance Sheet Abstract and Company’s General Business Profile

8 9 0 5 2 0 . 0 0 Oil / Gas Production

Power GenerationNA

44

Aban Loyd Chiles Offshore Ltd.

45

Cash Flow StatementFor the Year ended 31st March, 2003

(Rupees in Lacs)

2002-2003 2001-2002

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit Before Tax 3,597.76 1,616.80

Adjustments for:

Miscellaneous Expenditure 5.74 5.74

Amortised Dry Docking expenses 817.83 812.58

Depreciation 3,291.90 3,598.33

Goodwill written off 629.33 629.33

Interest 3,684.55 3,205.96

Income from Non -Trade Investments (230.66) (73.36)

Profit on sale of Investments (9.70) (64.81)

Loss on sale of Investments – 0.33

Provision no longer required – (239.54)

Loss on sale of Fixed Assets 41.43 58.82

Operating Profit before Working Capital Changes 11,828.18 9,550.18

Adjustments for:

Inventories (232.86) (676.09)

Trade and other receivables 2,418.18 (1,514.20)

Trade and other payables 140.40 (570.92)

Cash Generated from Operations 14,153.89 6,788.97

Interest paid (3,796.47) (3,017.87)

Direct taxes paid (518.11) (703.10)

Deferred Revenue Expenditure paid – (2,316.62)

Net Cash from Operating Activities 9,839.31 751.38

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets (12,542.74) (22,704.21)

Sale of fixed assets 22.67 70.35

Interest and dividend received 68.91 73.36

Purchase of Investments (6,244.28) (15,626.07)

Sale of Investments 4,604.32 20,597.99

Net Cash used in Investing Activities (14,091.12) (17,588.58)

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds/(Repayment) of Long Term Borrowings 5,518.97 17,732.09

Dividend paid (294.83) (188.36)

Net Cash from Financing Activities 5,224.15 17,543.73

Net Increase /(Decrease) in Cash and Cash Equivalents 972.33 706.53

Cash and Cash Equivalents as at the beginning of the year 1,842.58 1,136.05

Cash and Cash Equivalents as at the end of the year 2,814.91 1,842.58

Per our Report attached On behalf of the Board

For Ford, Rhodes, Parks & Co.

Chartered Accountants M. A. Abraham Reji Abraham Renny Abraham V. S. Rao

Managing Director Wholetime Director Director Director

R. Subramanian P. Murari S. Srinivasan P. Venkateswaran C. P. Gopalkrishnan

Partner Director Director Director (Operations) Director (Finance) &

Chennai, 14th July, 2003 Secretary

45

Aban Loyd Chiles Offshore Ltd.

46

Per our Report attached On behalf of the Board

For Ford, Rhodes, Parks & Co.

Chartered Accountants M. A. Abraham Reji Abraham Renny Abraham V. S. Rao

Managing Director Wholetime Director Director Vice Chairman

R. Subramanian P. Murari S. Srinivasan P. Venkateswaran C. P. Gopalkrishnan

Partner Director Director Director (Operations) Director (Finance) &

Chennai, 14th July, 2003 Secretary

1 Name of the Subsidiary Company Aban Energies Limited

2 Financial Year of the Subsidiary Company Year Ended 31.03.2003

3 Shares of the Subsidiary Company held by Aban Loyd Chiles Offshore Limited.

(a) Number of Shares 2,00,070

(b) Face value Rs. 10

(c) Paid up value Rs. 10

(d) Extent of Holding 100%

4 Net aggregate amount of Profit/(Loss) of the Subsidiary Company

so far as they concern the members of Aban Loyd Chiles Offshore

Limited not dealt with in the accounts of Aban Loyd Chiles Offshore

Limited amount to :

(a) For the Subsidiary Company's financial year ended on 31.03.2003. Rs. 11,19,481

(b) for the previous financial year of the subsidiary since it

became the Holding Company's subsidiary. Rs. (1,42,67,109)

5 Net aggregate amount of Profit/(Loss) of the Subsidiary Company,

dealt with in the Accounts of Aban Loyd Chiles Offshore Limited

amount to:

(a) For Subsidiary Company's financial year ended 31.03.2003 NIL

(b) for the previous financial year of the Subsidiary since it

became the Holding Company's subsidiary. NIL

6 As the financial year of the Subsidiary Company coincides with the

financial year of the Holding Company,Section 212(5) of the

Companies Act is not applicable.

Statement Pursuant to Section 212 of the Companies Act, 1956

46

Aban Loyd Chiles Offshore Ltd.

47

Aban Energies Limited

Directors’ Report

Your Directors have pleasure in presenting the Sixth AnnualReport of your Company for the year ended 31st March 2003.

1. Financial Results (Rupees in Lacs)

Year ended Year ended31st March 31st March

2003 2002Income from Operations 362.08 2206.38Other Income 22.65 83.33Less : Expenditure 369.16 2348.12Profit/(loss) before Interest &Depreciation 15.56 (58.41)Less : Interest 1.87 –Less : Depreciation 2.09 1.28Profit /(Loss) for the year 11.61 (59.69)Provision for Deferred tax 0.42 0.56Profit after Tax 11.19 (60.25)

2. PerformanceThe Company has earned an income from operations ofRs.362.08 Lacs and other Income of Rs.22.65 Lacs. TheCompany has earned a net profit of Rs.11.19 Lacs afterTax. The Company is looking at various opportunitiesavailable for growth and development of business. Theturnover has been reduced as lease agreement with AbanLoyd Chiles Offshore Limited has been discontinuedwith effect from 1.4.2002.

3. DividendIn view of accumulated loss incurred the directors didnot recommend any dividend for the year ended 31stMarch 2003.

4. DirectorsThe Directors Mr.Renny Abraham and Mr. V. S. Rao retireby rotation and being eligible offer themselves forreappointment.

5. Directors’ Responsibility StatementPursuant to the requirement under section 217(2AA) ofthe Companies Act, 1956 with respect to DirectorsResponsibility Statement it is hereby confirmed:

(i) that in the preparation of the annual accounts for thefinancial year ended 31st March 2003 the applicableaccounting standards had been followed along withproper explanation relating to material departures:

(ii) that the Directors had selected such accountingpolicies and applied them consistently and madejudgements and estimates that were reasonable andprudent so as to give a true and fair view of the stateof affairs of the Company at the end of the financialyear and of the Profit of the Company for the yearunder review.

(iii) that the directors had taken proper and sufficient carefor the maintenance of adequate accounting recordsin accordance with the provisions of the Act, forsafeguarding the assets of the Company and forpreventing and detecting fraud and otherirregularities.

(iv) that the Directors had prepared the accounts for thefinancial year ended 31st March 2003 on a goingconcern basis

6. AuditorsM/s. Ford, Rhodes, Parks & Co., Chartered Accountants,Chennai hold office until conclusion of the ensuingAnnual General Meeting and being eligible arerecommended for reappointment.

7. Secretarial Compliance CertificateThe Secretarial Compliance Certificate pursuant tosection 383 A of the Companies Act, 1956 issued byMr. G. Ramachandran, Company Secretary in practice isannexed.

8. Particulars of EmployeesNone of the employees of the Company were drawingremuneration exceeding Rs.24,00,000/- (Rupees twentyfour lac only) per annum or Rs.2,00,000/- (Rupees twolac only) per month or part thereof. Hence no particularsof employees U/S 217(2A) of the Companies Act, 1956need to be furnished.

In terms of section 217(1) of the Companies Act 1956 (asamended) and the Companies (Disclosure of particularsin Report of Board of Directors) Rules 1988, yourDirectors furnish hereunder the additional information asrequired.

A. Conservation of EnergyThe Company’s activities are not energy intensive

B. Research & development :

The Company’s research activities are directedtowards upgrading skills of the personnel. Efforts arebeing taken to maximise indigenisation.

C. Technology Absorption, Adoption and Innovation:The Company has absorbed the technology.

2002-2003 2001-2002

D. Foreign ExchangeEarnings : Nil Nil

Outgo : Nil Rs.44,03,585

For and on behalf of the Board

Reji Abraham V.S. RaoChennai, 12th July, 2003 Director Director

47

48

Aban Energies Limited

Secretarial Compliance Certificate

I have examined the registers, records, books and papers of

Aban Energies Limited, No.113 (Old No.96) Pantheon Road,

Egmore, Chennai 600 008 as required to be maintained

under the Companies Act, 1956, (the Act) and the rules

made thereunder and also the provisions contained in the

Memorandum and Articles of Association of the Company

for the financial year ended on 31st March 2003. In my

opinion and to the best of my information and according to

the examinations carried out by me and explanations

furnished to me by the Company, its officers and agents, I

certify that in respect of the aforesaid financial year:

1. The Company has kept and maintained all registers as

stated in Annexure `A’ to this certificate, as per the

provisions and the rules made thereunder and all entries

therein have been duly recorded.

2. The Company has duly filed the forms and returns as

stated in Annexure `B’ to this certificate with the Registrar

of Companies, Regional Director, Central Government,

Company Law Board or other authorities, wherever

applicable, under the Act and the rules made thereunder.

3. The Company is a public limited company having a

Paid-up Capital of Rs.20,00,700.

4. The Board of Directors duly met 5 (Five) times on

30.04.2002, 19.07.2002, 19.09.2002, 26.10.2002 and

30.01.2003 in respect of which meetings proper notices

were given and the proceedings were properly recorded

and signed in the Minutes Book maintained for the

purpose. No circular resolutions were reported to be

passed during the period under scrutiny.

5. The Company has not closed its Register of Members,

and/or Debentureholders during the financial year under

review.

6. The Annual General Meeting for the financial year ended

on 31st March 2002 was held on 19th September 2002

after giving due notice to the members of the Company

and the Resolutions passed thereat were duly recorded in

Minutes Book maintained for the purpose.

7. No Extraordinary General Meeting was held during the

year under scrutiny.

8. The Company has not advanced loan amount to its

Directors and/or persons or firms or companies referred

in the Section 295 of the Act, 1956.

9. The Company has not entered into any contracts falling

within the purview of Section 297 of the Act, 1956.

10. The Company has made necessary entries in the register

maintained under the Section 301 of the Act.

11. As there were no instances falling within the purview of

Section 314 of the Act, the Company is not required to

obtain any approvals from the Board of Directors,

Members or Central Government.

12. The Company has not issued any duplicate share

certificates during the period under review.

13. The Company has:

(i) not made any allotment of shares and there were no

transfer or transmission of securities during the

financial year.

(ii) not declared any dividend for the year under review.

(iii) not declared any dividend for the year under review

and therefore, the question of paying /posting

warrants to the members or transferring any unpaid

dividend to a separate account does not arise.

(iv) no amounts in unpaid dividend account, application

money due for refund, matured deposits, matured

debentures and any interest accrued thereon, for a

period of seven years and therefore the question of

transfer of such amounts to the Investors Education

and Protection Fund does not arise.

(v) duly complied with the requirements of Section 217

of the Act, 1956.

Registration No 18-38108

Authorised Capital Rs.25,00,000

Paid – up Capital Rs.20,00,700

To

The Members

Aban Energies Limited

Chennai.

48

49

Aban Energies Limited

Secretarial Compliance Certificate

14. The Board of Directors of the Company is duly

constituted. The appointment of Additional Director and

their regularisation at the Annual General Meetings were

duly made. There were no appointment of Alternate

Directors and Directors to fill casual vacancy during the

financial year.

15. The Company has not appointed any Managing Director

/ Whole-time Director / Manager during the financial

year.

16. The Company has not appointed any sole-selling agents

during the period under review.

17. The Company was not required to obtain any approvals

of the Central Government, Company Law Board,

Regional Director, Registrar of Companies and/or such

authorities prescribed under the various provisions of the

Act.

18. The Directors have disclosed their interest in other

firms/companies to the Board of Directors pursuant to

the provisions of the Act and the rules made thereunder.

19. The Company has not issued any

shares/debentures/other securities during the financial

year under review.

20. The Company has not bought back any shares during the

financial year under review.

21. The Company has not redeemed any preference

shares/debentures during the year under review.

22. The Company has not declared any Dividend / Rights

Shares and Bonus Shares during the year under review

and hence the question of keeping in abeyance rights to

dividend, rights shares and bonus shares pending

registration of transfer of shares does not arise.

23. The Company has neither invited nor accepted Fixed

deposits including unsecured loans falling within the

purview of sections 58A and 58AA read with Companies

(Acceptance of Deposit) Rules, 1975.

24. The Company has not made any borrowings during the

financial year ended 31st March 2003.

25. The Company has not made loans and investments, or

given guarantees or provided securities to other bodies

corporate during the financial year under review.

26. The Company has not altered the provisions of the

memorandum with respect to situation of the Company’s

registered office from one state to another during the year

under scrutiny.

27. The Company has not altered the provisions of the

memorandum with respect to the objects of the

Company during the year under scrutiny.

28. The Company has not altered the provisions of the

memorandum with respect to name of the Company

during the year under scrutiny.

29. The Company has not altered the provisions of the

memorandum with respect to share capital of the

Company during the year under scrutiny.

30. The Company has not altered its articles of association

during the year under scrutiny.

31. I was informed that there was no prosecution initiated

against or show cause notices received by the Company

during the period under scrutiny for offences under the

Act.

32. The Company has not received any money as security

from its employees during the period under scrutiny and

hence the provisions of Section 417 of the Companies

Act, 1956, are also not applicable.

33. The Employees of the Company are covered under the

Employees Provident Funds Miscellaneous Provisions

Act, 1952 and hence the provisions of Section 418 of the

Companies Act is not applicable to the Company.

G Ramachandran

Company Secretary in Practice

Chennai, 12th July, 2003 C.P. NO.3056

49

50

Aban Energies Limited

Annexure BDocuments filed with Registrar of Companies

1. Consent to act as Directorby Mr. V.S. Rao 29 264 03.07.2002 No Yes

2. Consent to act as Directorby Mr. P. Venkateswaran 29 264 03.07.2002 No Yes

3. Appointment of Additional Director 32 303(2) 03.07.2002 No Yes

4. Regularisation of Additional Directors at Annual Genaral Meeting 23 260 / 303(2) 11.10.2002 Yes N.A.

5. Balance Sheet, Profit & Loss Account along with Notice and Directors Report for the year ended 31.03.2002 Sch VI 220 11.10.2002 Yes N.A.

6. Compliance Certificate for the year ended 31.03.2002 383A 11.10.2002 Yes N.A.

7. Annual Return as on 19.09.2002 Sch V 159 14.11.2002 Yes N.A.

Annexure A

Registers as maintained by the Company :

1. Register and Index of Shareholders.

2.. Register of Transfers.

3. Register of Directors.

4. Register of Directors’ Share holding.

5. Minutes if the Meeting of Board of Directors.

6. Minutes if the Meeting of the Annual General Meetings.

7. Minutes if the Meeting of the Extraordinary General Meetings.

8. Register of Contracts, Companies and firms in which Directors of the Company are interested u/s. 301.

9. Books of Accounts u/s. 209.

G. RamachandranCompany Secretary in Practice

C.P. No. 3056Chennai, 12th July 2003

Sl. No. Nature of Event Form No.Pursuant to

SectionDate filed with

ROC

Whetherfiled within

the time limit

If delay infiling, whether

requisiteAdditional fees

paid

51

Aban Energies Limited

Auditors’ Report

To the Shareholders

We have audited the attached Balance Sheet of M/s. Aban

Energies Limited as at 31st March, 2003 and also the Profit

and Loss Account of the Company for the year ended on that

date, annexed thereto. These financial statements are the

responsibility of the Company’s management. Our

responsibility is to express an opinion on these financial

statements based on our audit.

We conducted our audit in accordance with auditing

standards generally accepted in India. Those standards

require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements

are free of material misstatements. An audit includes

examining, on a test basis, evidence supporting the amounts

and disclosures in the financial statements. An audit also

includes assessing the accounting principles used and

significant estimates made by management, as well as

evaluating the overall financial statement presentation. We

believe that our audit provides a reasonable basis for our

opinion.

We report as follows:

1. As required by the Manufacturing and Other Companies

(Auditor’s Report) Order, 1988 issued by the Company

Law Board in terms of Section 227 (4A) of the

Companies Act, 1956, as prescribed by the Central

Government and on the basis of such checks as we

considered appropriate, we give in the Annexure a

statement on the matter specified in paragraphs 4 and 5

of the said Order.

2. Further to our comments in the Annexure referred to in

paragraph 1 above, we report that:

a. We have obtained all the information and

explanations which to the best of our knowledge and

belief were necessary for the purposes of our audit.

b. In our opinion, proper books of account as required

by law have been kept by the Company so far as

appears from our examination of the books.

c. The Balance Sheet and Profit and Loss Account dealt

with by this report are in agreement with the books

of accounts maintained by the Company.

d. In our opinion, the Balance Sheet and Profit and Loss

Account dealt with by this report are in compliance

with the Accounting Standards referred to in Section

211 (3C) of the Companies Act, 1956.

e. In our opinion and based on the information and

explanations given to us, the Directors of the

Company do not prima facie have any

disqualification as on 31st March, 2003 in terms of

Clause (g) of sub-section (1) of Section 274 of the

Companies Act, 1956.

f. In our opinion and to the best of our information and

according to the explanations given to us, the

accounts read together with the Notes thereon give

the information required by the Companies Act,

1956, in the manner so required for the Company

and give a true and fair view in confirmity with the

accounting principles generally accepted in India.

(i) in the case of the Balance Sheet, of the state of

affairs of the Company as at 31st March 2003;

and

(ii) in the case of the Profit and Loss Account, of the

Profit for the year ended on that date.

for Ford, Rhodes, Parks & Co.,

Chartered Accountants

R SubramanianChennai, 12th July, 2003 Partner

52

Aban Energies Limited

Annexure to the Auditors’ Report(Referred to in Paragraph 1 of our Report of even date)

1. The Company has maintained proper records to show fullparticulars including quantitative details and situation of itsFixed Assets. The Fixed Assets have been physically verifiedby the Management wherever possible at the close of theyear as confirmed by the Management. As explained to usno material discrepancies have come to the notice on suchphysical verification.

2. None of the Fixed Assets have been re-valued during theyear.

3. The stock of stores and spares of the Company have beenphysically verified by the Management at the close of theyear.

4. The procedures of physical verification of stock followed bythe Management are reasonable and adequate in relation tothe size of the Company and nature of its business.

5. The discrepancies between the physical stock and bookstock, which have been properly dealt with in the Books ofaccount were not material.

6. The valuation of stock of materials/components and storesand spares has been fair and proper in accordance with thenormally accepted accounting principles and is on the samebasis as in earlier years.

7. The Company has not taken any loan from companies, firmsor other parties as listed in the Register maintained underSection 301 of the Companies Act. The provisions ofSection 370 of the Companies Act, 1956, are not applicableto a Company on or after 31st October, 1998.

8. The Company has not granted any loan to companies, firmsor other parties as listed in the Register maintained underSection 301 of the Companies Act. The provisions ofSection 370 of the Companies Act, 1956, are not applicableto a Company on or after 31st October, 1998.

9. Loans/Advances free of interest have been given to theemployees and they are repaying the amount as stipulated.

10. On the basis of checks carried out during the course of ouraudit and as per explanations given to us, there areadequate internal control procedures commensurate withthe size of the Company and the nature of its business forthe purchase of stores and spares, plant and machinery,equipment and other assets.

11. There were no purchase during the year of goods andmaterials aggregating to Rs.50,000/- or more in respect ofeach party in which Directors are interested as listed in theRegister maintained under Section 301 of the CompaniesAct, 1956. There were no sale of goods, materials andservices aggregating to Rs.50,000/- or more in respect ofeach party made in pursuance of contracts or arrangementsentered in the Register maintained under Section 301 of the

Companies Act, 1956 except sale of service to HoldingCompany at reasonable price.

12. As informed to us, there were no unserviceable anddamaged stores and spares held by the Company at theclose of the year. Hence, no provision is required to bemade for the same.

13. The Company has not accepted any deposit from the publicto which the provisions of Section 58A of the Companies Act,1956 and the rules made thereunder apply.

14. The Company’s activities do not generate any scrap or by –product.

15. The Company has an adequate internal audit systemcommensurate with the size and nature of the business ofthe Company.

16. The Central Government has not prescribed maintenance ofcost records under Section 209 (1) (d) of the Companies Act,1956.

17. The Company is regular in depositing the Provident Fundand Employees’ State Insurance Scheme dues to appropriateauthorities.

18. According to the information and explanations given to us,there are no undisputed amount payable in respect ofIncome Tax, Wealth Tax, Sales Tax, Customs Duty andExcise Duty as at 31st March, 2003 which are outstandingfor a period of more than six months from the date theybecame payable.

19. According to the information and explanations given to usand the records of the Company examined by us, nopersonal expenses have been charged to revenue accountother than those payable under contractual obligations or inaccordance with generally accepted business practice.

20. The Company is not a Sick Industrial Company within themeaning of clause (O) of sub section (1) of Section 3 of theSick Industrial Companies (Special Provisions) Act, 1985.

21. The Company has a reasonable system for recordingreceipts, issues and consumption of stores commensuratewith its size and nature of its business, and such systemprovides for reasonable allocation of materials andmanhours to the relative contract.

22. In our opinion, the Company has a reasonable system ofinternal control and of authorisation at proper levels on theissue of stores and allocation of stores and labour tocontracts commensurate with the size of the Company andthe nature of its business.

for Ford, Rhodes, Parks & Co.,Chartered Accountants

R SubramanianChennai, 12th July, 2003 Partner

53

Aban Energies Limited

Balance Sheet As at 31st March, 2003

As at 31st March

Schedule 2003 2002Rupees Rupees Rupees

I. Sources of Funds

1. Shareholders' Funds

Share Capital 1 20,00,700 20,00,700

Total Funds Employed 20,00,700 20,00,700

II Application of Funds

1. Fixed Assets 2

Gross Block 21,50,772 21,18,470

Less: Depreciation 4,55,107 2,46,059

Net Block 16,95,665 18,72,411

2. Current Assets, Loans and Advances

(a) Inventory of Stores & Spares (at cost) 45,27,092 47,34,212

(As certified by the Management)

(b) Sundry Debtors 3 21,99,604 5,65,57,749

(c) Cash and Bank Balances 4 28,90,777 27,939

(d) Loans and Advances 5 40,92,363 36,45,029

1,37,09,836 6,49,64,929

Less: Current Liabilities and Provisions 6

(a) Current Liabilities 2,50,39,645 7,76,37,997

(b) Provisions 13,49,000 13,49,000

2,63,88,645 7,89,86,997

Net Current Assets (1,26,78,809) (1,40,22,068)

Deferred Tax- Liability (1,69,023) (1,27,230)

Miscellaneous Expenditure

(to the extent not written off or adjusted) 7 5,239 10,478

Profit and Loss Account 1,31,47,628 1,42,67,109

Total Assets 20,00,700 20,00,700

Per our Report attached

For Ford, Rhodes, Parks & Co.Chartered Accountants

R. Subramanian Reji Abraham V. S. RaoPartner Director Director

Chennai, 12th July, 2003

On behalf of the Board

54

Aban Energies Limited

For the Year ended 31st MarchSchedule 2003 2002

Rupees Rupees

I. Income

Income from Wind Power Generation – 22,06,37,793

Income from Service rendered 3,62,08,133 83,33,390

Other Income 22,65,131 –

3,84,73,264 22,89,71,183

II Expenditure

Operating, Administrative and Other Expenses 8 3,70,97,703 23,48,06,692

Depreciation 2,09,048 1,27,850

Preliminary Expenses written off 5,239 5,239

3,73,11,990 23,49,39,781

Profit/(Loss) for the year before taxation 11,61,274 (59,68,598)

Less: Provision for taxation

– Deferred Tax 41,793 56,788

Profit/(Loss) for the year after taxation 11,19,481 (60,25,386)

Add: Profit brought forward from Previous Year (1,42,67,109) (81,71,281)

Less: Accumulated deferred tax at the beginning of the year – (70,442)

Balance Carried to Balance Sheet (1,31,47,628) (1,42,67,109)

Notes to Accounts 9

Earnings per Equity Share of Rs.10/- each 5.60 (30.12)

Profit and Loss Account For the Year ended 31st March, 2003

Per our Report attached

For Ford, Rhodes, Parks & Co.Chartered Accountants

R. Subramanian Reji Abraham V. S. RaoPartner Director Director

Chennai, 12th July, 2003

On behalf of the Board

55

Aban Energies Limited

Schedules Annexed to and forming part of Accounts

As at 31st March

As at 31st March

2003 2002Rupees Rupees

Authorised 2,50,000 Equity Shares of Rs.10 each 25,00,000 25,00,000

25,00,000 25,00,000Issued 2,00,070 Equity Shares of Rs.10 each. (Previous Year: 2,00,070

Equity Shares of Rs.10 each) 20,00,700 20,00,70020,00,700 20,00,700

Subscribed and Paid-up2,00,070 Equity Shares of Rs.10 each fully paid. (Previous Year: 2,00,070

Equity Shares of Rs.10 each) 20,00,700 20,00,700(The shares are held by the Holding Company Aban Loyd Chiles Offshore Ltd and their Nominees)

20,00,700 20,00,700

1 SHARE CAPITAL

2003 2002Rupees Rupees

Considered Good-Unsecured a) Outstanding for more than six months 1,25,000 1,53,85,438b) Others 20,74,604 4,11,72,311

21,99,604 5,65,57,749

3 SUNDRY DEBTORS

Cash on Hand 2,92,349 22,989Balances with Scheduled Banks on Current Accounts 25,98,428 4,950

28,90,777 27,939

4 CASH AND BANK BALANCES

GROSS BLOCK DEPRECIATION NET BLOCK

Description As at 1st Additions Deductions As at 31st As at 1st Additions On Deductions As at 31st As at 31st As at 31stof the asset April, 2002 during during March, 2003 April, 2002 during during March, 2003 March, 2003 March, 2002

the year the year the year the year

Office Equipment 2,07,770 32,302 – 2,40,072 41,990 32,212 – 74,202 1,65,870 1,65,780

Vehicles 19,10,700 – – 19,10,700 2,04,069 1,76,836 – 3,80,905 15,29,795 17,06,631

Total 21,18,470 32,302 – 21,50,772 2,46,059 2,09,048 – 4,55,107 16,95,665 18,72,411

Previous Year 12,62,80,530 8,68,100 12,50,30,160 21,18,470 1,00,29,640 1,27,850 99,11,431 2,46,059 18,72,411 11,62,50,890

Note: After adjustment of Rs. NIL Depreciation Reserve pertaining to Asset deleted during the year. (Previous year: Rs. 99,11,431/-)

2 FIXED ASSETS

(Recoverable in cash or in kind or for value to be received, unsecured, considered good)Loans and Advances 22,51,384 2,14,601Sundry Deposits 15,500 20,05,500Advance payment of taxes 18,25,479 14,24,928

40,92,363 36,45,029

5 LOANS AND ADVANCES

Amount in Rupees

56

Aban Energies Limited

As at 31st March2003 2002

Rupees Rupees

Schedules Annexed to and forming part of Accounts

2003 2002Rupees Rupees

2003 2002Rupees Rupees

(A) Current Liabilities Sundry Creditors (See Note: 7) 2,50,39,645 7,76,37,997

(B) ProvisionsTaxation 13,49,000 13,49,000

2,63,88,645 7,89,86,997

6 CURRENT LIABILITIES AND PROVISIONS

(To the extent not written off or adjusted)Preliminary Expenditure 10,478 15,717Less: Written off 5,239 5,239

5,239 10,478

7 MISCELLANEOUS EXPENDITURE

Consumption - Stores and Spares 1,52,30,737 1,83,34,753Salaries and Bonus 36,62,855 38,68,643Contribution to Provident fund and Other funds 4,56,031 3,37,078Staff Welfare 5,21,186 6,07,704Rent, Rates and Taxes 5,83,598 3,66,112Rental Charges for Machinery 1,67,476 19,50,00,000Repairs to Machinery 57,86,306 55,01,367Insurance 5,44,437 44,84,643Consultancy and Professional Fees 43,75,329 28,09,539Freight and Forwarding Expenses 7,06,004 8,21,113Postage, Telegram and Telex 1,16,560 1,64,697Printing and Stationery 69,159 61,726Travelling Expenses 21,81,396 19,84,154Interest 1,86,591 – Hire finance charges 57,964 73,641Auditors' Remuneration :

As Auditors 25,000 25,000Taxation Matters 15,575 15,575Other Services 20,375 60,950 23,050

Other Expenses 23,91,124 3,27,8973,70,97,703 23,48,06,692

8 OPERATING, ADMINISTRATIVE AND OTHER EXPENSES

1. SIGNIFICANT ACCOUNTING POLICIES

ACCOUNTING CONVENTIONS AND CONCEPTSA. Financial statements are based on historical cost convention and on the basis of a going concern and comply with the

Accounting Standards referred to in section 211(3C) of the Companies Act, 1956. The Company follows mercantilesystem of accounting and recognises income and expenditure on an accrual basis.

B. Fixed AssetsFixed Assets are capitalised at cost inclusive of installation expenses .

9 NOTES ATTACHED TO AND FORMING PART OF ACCOUNTS

for the year ended 31st March

57

Aban Energies Limited

Schedules annexed to and forming part of Accounts

(Amount in Rupees)

Units 2003 Units 2002

2. Licensed/Installed capacities Not Applicable Not Applicable3. Details of Income

Generation of Wind Power (Net) – – 8,19,20,375 22,06,37,793Operating and Maintenance Services 3,62,08,133 83,33,390

4. Value of Imports by the Company on CIF basisStores & Spare Parts – 44,03,585

5. a. Value of Imported Stores & Spares Consumed – 53,84,267% of above to total consumption - 29.37%

b. Value of Indigenous Stores & Spares consumed 1,52,30,737 1,29,50,486% of above to total consumption 100% 70.63%

6. The Company has consumed: NIL (Previous year 9,26,156) units of power amounting to Rs. -NIL- (Previous yearRs. 25,00,621/-) which has been adjusted against the value of Generation of Power in the Profit and Loss Account.

7. Sundry Creditors Include Rs. 47,124/- (Previous year Rs.13,240/-) due to Small Scale Industrial Undertakings.

8. Sundry Creditors include Rs. 2,02,11,331/- due to Holding Company M/s. Aban Loyd Chiles Offshore Ltd. (Previous YearRs.7,15,83,431/-).

9. Previous year’s figures are re-grouped/re-arranged wherever necessary.

C. DepreciationDepreciation on Fixed Assets is provided on the Straight Line basis at rates prescribed in Schedule XIV of the CompaniesAct, 1956 on a pro-rata basis.

D. Inventory valuationInventory of Stores and Spares are valued at cost based on First-in-First out Cost formula.

E. Foreign Currency TransactionsTransactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Current assetsand Current liabilities are translated at year end exchange rates and the realised exchange gains or losses arerecognised in the Profit and Loss Account.

F. Retirement BenefitsContribution to Provident Fund is made monthly at a predetermined rate to the Provident Fund authorities and debitedto the Profit and Loss Account on accrual basis. The Company has an arrangement with Life Insurance Corporation ofIndia (LIC) to administer its Gratuity schemes. The premium advised by LIC is debited to the Profit and Loss Account onan accrual basis.

G. Taxes on IncomeTaxes on Income will comprise of current tax and deferred tax.Deferred tax is calculated in accordance with theAccounting Standard 22 issued by the Institute of Chartered Accountants of India. Deferred tax asset is recognised subjectto consideration of prudence.

Per our Report attached

For Ford, Rhodes, Parks & Co.Chartered Accountants

R. Subramanian Reji Abraham V. S. RaoPartner Director Director

Chennai, 12th July, 2003

On behalf of the Board

58

Aban Energies Limited

N I LPublic Issue

N I LBonus Issue

N I LRight Issue

N I LPrivate Placement

2 0 0 1 2 0 0 1Total Assets Total Liabilities

2 0 0 1 N I LPaid-up Capital

Sources of FundsSecured Loans

N I LUnsecured Loans

N I LReserves & Surplus

1 6 9 6

5

Net Fixed AssetsApplication of Funds (Amount in Rs. 000)

Miscellaneous ExpenditureN I L

(1 6 9)Investments

Deferred Tax-Net

1 3 1 4 8Profit & Loss Account

(1 2 6 7 9)Net Current Assets

3 8 1 0 8

3Date Month Year

1 0 3 0 3

1 8Registration No. State Code No.

Balance Sheet Date

Item Code No. (ITC Code) Product Description

1. Registration Details

2. Capital raised during the year (Amount in Rs. 000)

3. Position of Mobilisation and Deployment of Funds (Amount in Rs. 000)

3 6 2 0 8 1 1 1 9Turnover Profit after Tax

2 2 6 5 5 . 6 0Other Income Earnings per Share in Rs.

3 7 3 1 2 N I LTotal Expenditure Dividend Rate %

1 1 6 1Profit before Tax

N A Maintenance of Wind Mills

4. Performance of the Company (Amount in Rs. 000)

5. Generic Names of Three Principal Products/Services of the Company (as per monetary terms)

Balance Sheet AbstractInformation pursuant to Part IV of Schedule VI to the Companies Act, 1956

Balance Sheet Abstract and Company’s General Business Profile

59

Aban Energies Limited

Cash Flow StatementFor the Year ended 31st March, 2003 (Rupees in Lacs)

2002-2003 2001-2002

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit Before tax 11.61 (59.68)

Adjustments for:

Miscellaneous Expenditure 0.05 0.05

Depreciation 2.09 1.27

Operating profit before working capital changes 13.76 (58.36)

Adjustments for:

Trade and other receivables 543.11 402.62

Inventories 2.07 (32.07)

Trade and other payables (525.98) (1,457.29)

Cash generated from operations 32.96 (1,145.10)

Direct taxes paid (4.01) (13.96)

Net Cash From Operating Activities 28.95 (1,159.06)

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets (0.32) (8.68)

Sale of fixed assets – 1,151.19

Net Cash Used in Investing Activities (0.32) 1,142.51

Net Increase /(decrease) in Cash and Cash Equivalents 28.63 (16.55)

Cash and Cash Equivalents as at the beginning of the year 0.28 16.83

Cash and Cash Equivalents as at the end of the year 28.91 0.28

For Ford, Rhodes, Parks & Co. On behalf of the BoardChartered Accountants

R.Subramanian Reji AbrahamPartner Director

Chennai, 12th July, 2003

60

Aban Loyd Chiles Offshore Ltd.

Auditors’ Report

TO THE BOARD OF DIRECTORS OF ABAN LOYD CHILES OFFSHORE LIMITED ON THE CONSOLIDATED FINANCIAL

STATEMENT.

We have examined the attached Consolidated Balance Sheet

of Aban Loyd Chiles Offshore Limited and its Subsidiary

Company, Aban Energies Limited, as at 31st March, 2003,

and also the related Profit and Loss Account and the Cash

Flow Statement for the year then ended. The unaudited

financial statement of the Joint Venture Company Frontier

Aban Drilling India Limited as at 31st March, 2003, to the

extent of the interest in the joint venture have also been

considered in preparation of the consolidated accounts. We

have been informed that there will not be any material

change in the unaudited financial statements of the Joint

Venture Company.

These financial statements are the responsibility of the

Company’s Management. Our responsibility is to express an

opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally

accepted Auditing Standards in India. These standards

require that we plan and perform the audit to obtain

reasonable assurance whether the financial statements are

prepared, in all material respects, in accordance with an

identified financial reporting framework and are free of

material misstatements. An audit includes, examining on

test basis, evidence supporting the amounts and disclosures

in the financial statements. An audit also includes assessing

the accounting principles used and significant estimates

made by management, as well as evaluating the overall

financial statements. We believe that our audit provides a

reasonable basis for our opinion.

We report that the consolidated financial statements have

been prepared by the Company in accordance with the

requirements of Accounting Standards issued by the Institute

of Chartered Accountants of India and on the basis of the

separate audited financial statements of Aban Loyd Chiles

Offshore Limited, its Subsidiary, Aban Energies Limited, and

unaudited financial statement of its Joint Venture Company,

Frontier Aban Drilling (India) Limited.

On the basis of the information and explanation given to us

and on the consideration of the separate audit reports on

individual audited financial statements of Aban Loyd Chiles

Offshore Limited, its aforesaid subsidiary, Aban Energies

Limited, and Unaudited Financial Statements of Joint

Venture Company, Frontier Aban Drilling India Limited, we

are of the opinion that:

(a) The Consolidated Balance Sheet gives a true and fair

view of the consolidated state of affairs of Aban Loyd

Chiles Offshore Limited, its subsidiary and its share of

Assets and Liabilities in the Joint Venture Company as at

31st March, 2003.

(b) The Consolidated Profit and Loss Account gives a true

and fair view of the consolidated results of operations of

Aban Loyd Chiles Offshore Limited, its subsidiary and its

share of result from the Joint Venture Company, for the

year then ended.

(c) The Consolidated Cash Flow Statement gives a true and

fair view of the consolidated cash flows of Aban Loyd

Chiles Offshore Limited ,its subsidiary and its share of

Cash Flow from Joint Venture Company for the year then

ended.

for Ford, Rhodes, Parks & Co.,

Chartered Accountants

R. Subramanian

Chennai, 14th July, 2003 Partner.

61

Aban Loyd Chiles Offshore Ltd.

Consolidated Balance Sheet As at 31st March, 2003

As at 31st March

Schedule 2003 2002Rupees Rupees Rupees

I. Sources of Funds

1. Shareholders' Funds

(a) Share Capital 1 7,37,06,750 6,27,87,600

(b) Share Capital Suspense 2 – 1,09,19,150

(c) Reserves and Surplus 3 128,66,73,199 123,07,77,144

2. Loan Funds

Secured 4 309,60,36,586 242,79,96,198

Unsecured Loan -Bank – 10,00,00,000

Total Funds Employed 445,64,16,535 383,24,80,092

II. Application of Funds

1. Fixed Assets 5

Gross Block 577,85,07,334 460,55,21,584

Less: Depreciation 251,78,96,087 218,84,77,412

Net Block 326,06,11,247 241,70,44,172

Add: Capital Work in Progress 2,24,80,332 87,51,804

328,30,91,579 242,57,95,976

2. Investments 6 22,33,77,569 6,34,10,714

3. Current Assets, Loans and Advances

(a) Inventory of Stores & Spares (at cost) 24,75,96,101 21,11,41,746

(As certified by the Management)

including share in joint venture

(b) Sundry Debtors 7 31,73,22,427 39,87,45,884

(c) Cash and Bank Balances 8 28,99,60,753 18,42,85,800

(d) Loans and Advances 9 52,93,34,562 56,79,21,344

138,42,13,843 136,20,94,774

Less: Current Liabilities and Provisions 10

(a) Current Liabilities 21,41,04,542 12,81,15,006

(b) Provisions 4,15,75,214 2,94,82,700

25,56,79,756 15,75,97,706

Net Current Assets 112,85,34,087 120,44,97,068

Deferred Tax-Net 11 (34,41,17,726) (10,34,75,933)

Miscellaneous Expenditure

(to the extent not written off or adjusted) 12 16,55,31,026 24,22,52,267

Total Assets 445,64,16,535 383,24,80,092

Notes to Accounts 17

Per our Report attachedFor Ford, Rhodes, Parks & Co.Chartered Accountants

R.Subramanian M. A. Abraham Reji AbrahamPartner Managing Director Wholetime Director

Chennai, 14th July, 2003

On behalf of the Board

62

Aban Loyd Chiles Offshore Ltd.

Consolidated Profit and Loss Account For the Year ended 31st March, 2003

For the Year ended 31st March

Schedule 2003 2002Rupees Rupees

I. Income

Income from Operations 13 268,40,86,190 203,05,01,874

Other Income 14 8,24,36,768 9,98,07,360

276,65,22,958 213,03,09,234

II. Expenditure

Operating, Administrative and Other Expenses 15 163,57,91,211 123,04,56,385

Interest 16 37,03,56,223 32,06,69,370

Depreciation 32,95,90,105 35,99,60,506

Goodwill Amortised 6,29,32,557 6,29,32,554

Deferred Revenue Expenses Written off 5,78,939 5,78,939

239,92,49,035 197,45,97,754

Profit for the year before taxation 36,72,73,923 15,57,11,480

Less: Provision for taxation

- Current Tax 2,84,00,000 1,30,00,000

- Deferred Tax 24,06,41,793 1,82,35,490

Profit for the year after taxation 9,82,32,130 12,44,75,990

Add: Profit brought forward from Previous Year 101,06,48,101 98,56,54,811

Profit available for Appropriation 110,88,80,231 111,01,30,801

Transfer to General Reserve 1,00,00,000 7,00,00,000

Proposed Dividend 3,68,53,375 2,94,82,700

Tax on Dividend 47,21,839 –

Balance Carried to Balance Sheet 105,73,05,017 101,06,48,101

Notes to Accounts 17

Earnings per Equity Share of Rs. 10/- each 13.33 16.89

Per our Report attachedFor Ford, Rhodes, Parks & Co.Chartered Accountants

R.Subramanian M. A. Abraham Reji AbrahamPartner Managing Director Wholetime Director

Chennai, 14th July, 2003

On behalf of the Board

63

Aban Loyd Chiles Offshore Ltd.

Schedules annexed to and forming part of Consolidated AccountsAs at 31st March2003 2002

Rupees Rupees

Authorised

18,00,00,000 Equity Shares of Rs.10/- each 180,00,00,000 180,00,00,000

2,00,00,000 Cumulative Redeemable Preference Shares of Rs.10/- each 20,00,00,000 20,00,00,000

200,00,00,000 200,00,00,000

Issued

62,78,760 Equity Shares of Rs.10/- each.

(Previous Year: 62,78,760 Equity Shares of Rs. 10/- each) 6,27,87,600 6,27,87,600

10,85,271 Equity Shares of Rs. 10/- each fully paid up and 13,288 Equity

Shares of Rs. 10/- each partly paid upto Rs.5/- issued pursuant to

Scheme of Amalgamation of Hitech Drilling Services India Ltd

with the Company. (Previous Year: NIL) 1,09,19,150 –

7,37,06,750 6,27,87,600

Subscribed and Paid-up

73,64,031 Equity Shares of Rs.10/- each fully paid.

(Previous Year: 62,78,760 Equity Shares of Rs. 10/- each) 7,36,40,310 6,27,87,600

13,288 Equity Shares of Rs. 10/- each,partly paid upto Rs. 5/-

(Previous Year : NIL) 66,440 –

Total 7,37,06,750 6,27,87,600

NIL Equity Shares of Rs. 10/- each fully paid up and NIL Equity

Shares of Rs. 10/- each partly paid upto Rs. 5/- to be issued pursuant to

Scheme of Amalgamation of Hitech Drilling Services India Ltd with the

Company. (Previous Year: 10,85,271 Equity Shares of Rs. 10/- each fully

paid up and 13,288 Equity Shares of Rs.10/- each partly paid upto Rs. 5/-) – 1,09,19,150

Total – 1,09,19,150

1 SHARE CAPITAL

2 SHARE CAPITAL SUSPENSE

(a) Capital Reserve 33,500 33,500

(b) Share Premium Account

- As per last Balance Sheet 12,84,03,600 12,84,03,600

(c) Investment Allowance Reserve-Utilised 5,24,00,000 5,24,00,000

(d) General Reserve

- At the beginning of the year 3,92,91,943 10,69,00,000

Less: Accumulated initial Deferred Tax Liability – 8,52,40,443

Add: Reserves taken over on Amalgamation – 92,57,53,602

Add: Transfer from Profit and Loss Account 1,00,00,000 7,00,00,000

Less: Adjustments on Amalgamation – 97,81,21,216

4,92,91,943 3,92,91,943

(e) Share in joint venture (7,60,861) –

(f) Profit and Loss Account 105,73,05,017 101,06,48,101

Total 128,66,73,199 123,07,77,144

3 RESERVES AND SURPLUS Rs.

64

Aban Loyd Chiles Offshore Ltd.

Schedules annexed to and forming part of Consolidated Accounts

6 INVESTMENTS (At cost)

5 FIXED ASSETS

As at 31st March

As at 31st March2003 2002

Rupees Rupees

a. Rupee Loan from Financial Institutions – 165,95,60,649b. Term Loan from Banks 307,36,17,808 60,92,33,332c. Cash Credit from Banks 24,21,253 14,68,42,541d. Others 38,54,390 1,23,59,676

307,98,93,451 242,79,96,198Share in joint venture 1,61,43,135 –Total 309,60,36,586 242,79,96,198Notes: 1. Term Loans from Banks are secured by first charge on the offshore drilling rigs and accessories, floating production unit,

windmills and all movable assets, both present and future. Further the term loan from banks are secured by a mortgageof a certain portion of land and equitable mortgage of office property of the Company.

2. Cash Credit from Banks are secured by way of hypothecation of inventory of stores and spares, Book debts and by wayof second charge on the Rigs of the Company.

3. Other loans represent hire purchase liability secured by hypothecation of certain vehicles of the Company.

4 SECURED LOANS

GROSS BLOCK DEPRECIATION NET BLOCK

Description As at 1st Additions Deductions As at 31st As at 1st Additions On Deductions As at 31st As at 31st As at 31stof the asset April, 2002 during during March, 2003 April, 2002 during during March, 2003 March, 2003 March, 2002

the year the year the year the year

Goodwill 37,75,95,325 – 6,29,32,557 31,46,62,768 – – – –- 31,46,62,768 37,75,95,325

Land-Freehold 15,61,88,112 3,33,668 59,60,684 15,05,61,096 – – – – 15,05,61,096 15,61,88,112

Building 15,49,33,491 – – 15,49,33,491 1,27,80,003 25,59,251 – 1,53,39,254 13,95,94,237 14,21,53,488

Offshore Jackup Drilling Rigs, Floating Production unit andconnected machineries 257,47,92,121 4,94,35,978 – 262,42,28,099 194,02,59,487 14,86,46,073 – 208,89,05,560 53,53,22,539 63,45,32,634

Other Machineries 8,08,24,706 – – 8,08,24,706 7,67,35,196 – – 7,67,35,196 40,89,510 40,89,510

Wind Mills 119,71,54,470 118,32,53,548 – 238,04,08,018 13,10,52,616 17,11,41,832 – 30,21,94,448 207,82,13,570 106,61,01,854

Office Equipment 2,81,14,219 22,48,850 1,75,000 3,01,88,069 1,82,79,016 41,19,324 1,05,877 2,22,92,463 78,95,606 98,35,203

Furniture and Fixtures 1,71,79,248 – 25,000 1,71,54,248 39,51,264 10,68,202 5,540 50,13,926 1,21,40,322 1,32,27,984

Vehicles 1,87,39,892 53,05,740 4,21,146 2,36,24,486 54,19,830 18,64,652 60,013 72,24,469 1,64,00,017 1,33,20,062

Total 460,55,21,584 124,05,77,784 6,95,14,387 577,65,84,981 218,84,77,412 32,93,99,334 1,71,430 251,77,05,316 325,88,79,665 241,70,44,172

Capital Work- in-progress 2,24,80,332 87,51,804

Share in joint venture – 19,22,353 – 19,22,353 – 1,90,771 – 1,90,771 17,31,582 –

Total 460,55,21,584 124,25,00,137 6,95,14,387 577,85,07,334 218,84,77,412 32,95,90,105 1,71,430 251,78,96,087 328,30,91,579 242,57,95,976

Previous Year 209,72,29,141 270,91,72,235 20,08,79,792 460,55,21,584 184,23,83,807 35,99,60,506 1,38,66,901 218,84,77,412 242,57,95,976 112,70,06,234

Note: Additions to fixed assets in the previous year includes additions made on account of amalgamation of Hitech Drilling Services India Limited with the Company.

No. of Shares Face Value 2003 2002Rupees Rupees Rupees

Long Term Investments

A. Trade Investments

Fully Paid Equity Shares- Unquoted

(a) Aban Informatics Private Ltd 3,00,750 10.00 1,98,49,500 1,98,49,500

(b) Frontier Aban Drilling India Ltd 49,993 100.00 – 49,99,300Note: For consolidation purposes, value of

investment amounting to Rs.49,99,300 in the joint venture company Frontier Aban Drilling India Ltd has been adjusted.

Amount in Rupees

65

Aban Loyd Chiles Offshore Ltd.

Schedules annexed to and forming part of Consolidated Accounts

No. of Shares / Face Value 2003 2002Units Rupees Rupees Rupees

B. Others (Non Trade)Equity Shares Quoted -Fully paidAgri Marine Exports Ltd 5,400 10.00 67,500 67,500Arihant Threads Ltd 13,600 10.00 1,70,000 1,70,000Corporate Couriers Ltd 10,400 10.00 4,16,000 4,16,000GIC Housing Finance Ltd 1,700 10.00 – 85,000Himalaya Granites Ltd 1,400 10.00 42,000 42,000Indo Germa Products Ltd 8,800 10.00 88,000 88,000Industrial Development Bank of India 16,800 10.00 13,65,000 13,65,000Jindal Polyesters Ltd 200 10.00 – 19,500Kongarar Integrated Fibres Ltd 200 10.00 2,000 2,000Kongarar Textiles Ltd 500 10.00 22,500 22,500Mardia Steel Ltd 8,100 10.00 4,05,000 4,05,000Metrochem Industries Ltd 200 10.00 22,000 22,000Mirza Tanners Ltd 2,800 10.00 68,600 68,600Jayaswal Neco Ltd 1,000 10.00 – 80,000Orient Organic Ltd 1,500 10.00 15,000 15,000Punjab Woolcombers Ltd 300 10.00 27,000 27,000Ram Kaashyap Investments Ltd 500 10.00 5,000 5,000Ram Ratna Wires Ltd 300 10.00 3,000 3,000Wintac Ltd 700 10.00 70,000 70,000Samrat Ashoka Exports Ltd 200 10.00 12,000 12,000Shri Karthik Papers Ltd 3,100 10.00 31,000 31,000Shreyas Shipping Ltd 1,400 10.00 28,000 28,000Southern Fuels Ltd 1,100 10.00 11,000 11,000State Bank of Travancore 245 100.00 1,47,000 1,47,000Stiefel Und Schuh (India) Ltd 300 10.00 3,000 3,000Thambbi Modern Spinning Mills Ltd 1,300 10.00 65,000 65,000The ICICI Bank Ltd 2,100 10.00 7,86,374 7,86,374The Waterbase Ltd 10,500 10.00 5,04,000 5,04,000Partly Paid Equity Shares Nutech Financial Services Ltd 17,700 10.00 1,03,828 1,03,828Current Investments (At lower of cost and fair value) (See note: 3)Standard Chartered Grindlays Mutual Fund 35,05,531.000 10.00 – 3,52,43,684HDFC Income Fund (G) 2,50,000.000 10.00 25,00,000 25,00,000Kotak Mahindra Liquid Institutional Plan -Dividend 11,01,026.900 10.00 1,10,36,251 – Chola Mutual Fund -Liquid Institutional Plan 5,02,274.600 10.00 50,22,746 – DSP Merrill Lynch Liquidity Fund -Div 10,79,837.758 10.00 1,33,96,359 – Deutsche Premier Bond Fund Inst. Plan-Dividend 10,18,246.986 10.00 1,00,00,000 – HDFC Floating Rate Income Fund -Dividend 39,72,915.400 10.00 4,02,04,315 – Prudential ICICI Liquid Plan-Dividend 16,97,592.804 10.00 2,01,02,724 – IL & FS Liquid Fund-Dividend 9,86,020.218 10.00 1,00,47,349 – JM Mutual Fund-Short term-Dividend 4,90,881.812 10.00 50,58,292 – Birla Bond Plus Plan-B Growth 18,12,476.842 10.00 2,01,19,580 – HSBC Equity Fund-Dividend 9,86,319.745 10.00 1,00,47,245 – Grindlays Floating Rate-Dividend 20,05,431.087 10.00 2,01,79,249 – Templeton Mutual Fund-Growth Plan 2,62,421.169 10.00 50,00,000 – Templeton India Liquid Fund-Weekly Plan 30,17,449.581 10.00 3,01,80,229 – K Bond Wholesale Plan-Bonus option 47,476.468 10.00 – – Sundaram Bond Saver -Bonus Option 92,077.734 10.00 – – Sub Total 22,72,23,641 6,72,56,786Less: Provision for Dimunition in Value of Investments 38,46,072 38,46,072Total 22,33,77,569 6,34,10,714Aggregate Value of Quoted Investments 20,73,74,141Aggregate Market Value of Quoted Investments 20,52,30,199

6 INVESTMENTS (At cost)

As at 31st March

66

Aban Loyd Chiles Offshore Ltd.

Schedules annexed to and forming part of Consolidated AccountsAs at 31st March2003 2002

Rupees Rupees

Considered Good-Unsecured(a) Outstanding for more than six months 5,05,73,711 3,03,04,717(b) Others 21,32,64,012 36,84,41,167

26,38,37,723 39,87,45,884Share in joint venture 5,34,84,704 –

Total 31,73,22,427 39,87,45,884

Cash on Hand 5,80,498 2,77,789Balances with Scheduled Banks- In Current Accounts 15,46,33,314 14,16,29,742- In Deposit Accounts 12,91,68,276 4,23,78,269

28,43,82,088 18,42,85,800Share in joint venture 55,78,665 –Total 28,99,60,753 18,42,85,800

7 SUNDRY DEBTORS

8 CASH AND BANK BALANCES

(Recoverable in cash or in kind or for value to be received,unsecured,considered good)

Loans and Advances 35,99,43,915 45,00,76,116Sundry Deposits 3,62,21,483 3,97,63,005Advance payment of taxes (Net of provision for taxation Rs. 83,32,13,519)(Previous Year: Rs. 80,48,13,519) 10,18,93,419 7,80,82,223

49,80,58,817 56,79,21,344Share in joint venture 3,12,75,745 –Total 52,93,34,562 56,79,21,344

9 LOANS AND ADVANCES

(A) Current Liabilities(a) Sundry Creditors (See Note: 7) 12,09,19,945 10,81,06,337(b) Interest accrued but not due on secured loans 88,16,635 2,00,08,669

12,97,36,580 12,81,15,006Share in joint venture 8,43,67,962 –

21,41,04,542 12,81,15,006(B) Provisions

(a) Proposed Dividend 3,68,53,375 2,94,82,700(b) Tax on Dividend 47,21,839 –

4,15,75,214 2,94,82,700Total 25,56,79,756 15,75,97,706

10 CURRENT LIABILITIES AND PROVISIONS

Deferred tax Asset on Timing differencesProvision for dimunition in the value of investments (13,79,778) (3,02,878)Deferred Tax Liability on timing differencesOn deferred dry docking charges and deferred expenses (1,54,71,519) 3,11,13,389On depreciation 36,09,69,023 7,26,65,422Total 34,41,17,726 10,34,75,933

11 DEFERRED TAX (NET)

67

As at 31st March

For the Year ended 31st March

Aban Loyd Chiles Offshore Ltd.

Schedules annexed to and forming part of Consolidated Accounts

2003 2002Rupees Rupees

2003 2002Rupees Rupees

(To the extent not written off or adjusted)

(a) Deferred Expenditure 11,57,878 17,36,817

Less: Written off 5,78,939 5,78,939 5,78,939

(b) Dry Docking Expenditure at the beginning of the year 24,10,94,389 8,77,45,850

Deferred expenditure taken over on Amalgamation – 9,97,47,083

Expenditure incurred during the year – 13,48,59,793

Less: Write off during the year and included under

Repairs to Machinery in the Profit and Loss Account 8,17,82,780 15,93,11,609 8,12,58,337

15,98,90,548 24,22,52,267

Share in joint venture 56,40,478 –

Total 16,55,31,026 24,22,52,267

12 MISCELLANEOUS EXPENDITURE

Drilling Revenue 221,81,33,573 180,98,64,081

Income from Wind Power Generation 22,03,01,874 22,06,37,793

243,84,35,447 203,05,01,874

Share in joint venture 24,56,50,743 –

Total 268,40,86,190 203,05,01,874

13 INCOME FROM OPERATIONS

(a) Rental Income (Gross) 13,00,000 –(b) Dividend Income (Gross) 52,411 73,36,010(c) Interest on Bank Deposits (Gross) 34,11,963 49,79,587(d) Interest-Others (Gross) 25,00,881 40,34,621(e) Interest on Income-tax refund 1,71,00,645 –(f) Provision no longer required – 2,39,54,668(g) Service Charges (Gross) 45,64,422 1,71,17,997(h) Others (Gross) 4,99,00,528 2,58,253(i) Profit on Sale of Investments (Net) 9,69,703 64,48,440(j) Claims – 3,56,77,784

7,98,00,553 9,98,07,360Share in joint venture 26,36,215 –Total 8,24,36,768 9,98,07,360

Note : Tax Deducted at source on a, b, c, d, g, h Rs. 20,59,781/- (Previous year : Rs. 15,01,628/-)

14 OTHER INCOME

68

For the Year ended 31st March

Aban Loyd Chiles Offshore Ltd.

Schedules annexed to and forming part of Consolidated Accounts

Schedules annexed to and forming part of the Consolidated Accounts

2003 2002Rupees Rupees

Consumption - Stores and Spares 27,24,98,680 16,93,12,348Salaries and Bonus 14,32,81,842 12,73,22,158Contribution to Provident fund and Other funds 70,96,230 1,01,26,622Staff Welfare 94,38,819 1,17,58,388Rent, Rates and Taxes 40,14,478 79,96,057Rental Charges for Machinery 41,78,99,781 47,18,32,047Repairs to Machinery 15,26,14,843 8,67,59,704Insurance 16,50,69,591 13,47,73,387Drilling Services and Management Fees 6,50,26,676 2,73,25,976Consultancy and Professional Fees 7,83,30,173 10,94,74,443Catering Expenses 96,69,273 94,31,207Postage, Telegram and Telex 53,47,417 82,41,924Printing and Stationery 20,10,440 23,48,611Travelling Expenses 3,19,07,899 2,27,56,529Guarantee Commission, Bank and Other Charges 1,29,65,186 93,34,045Loss on Sale of Assets 41,43,000 58,81,788Auditors' Remuneration :

Audit Fees 2,87,500 2,95,000Tax Audit Fees 1,74,500 68,075For Other Services 2,85,054 2,11,039Other Expenses reimbursed 57,000 8,04,054 54,000

Other Expenses 1,35,70,167 1,51,53,037139,56,88,549 123,04,56,385

Share in joint venture 24,01,02,662 –Total 163,57,91,211 123,04,56,385

15 OPERATING, ADMINISTRATIVE AND OTHER EXPENSES

On Long Term Loans 35,70,23,394 28,90,46,021Others 1,16,76,417 3,16,23,349

36,86,99,811 32,06,69,370Share in joint venture 16,56,412 –Total 37,03,56,223 32,06,69,370

1. The Consolidated Financial Statements have been prepared in accordance with the Accounting Standard-21 andAccounting Standard-27 issued by the Institute of Chartered Accountants of India. Since this is the first year of adoptionof the Accounting Standard - 27 , figures for the previous year have not been presented.

2. The Audited Annual Accounts of the wholly owned subsidiary M/s. Aban Energies Ltd, and Unaudited Financial Statementsof joint venture company Frontier Aban Drilling (India) Ltd have been considered in the preparation of these ConsolidatedFinancial Statements.

16 INTEREST

17 NOTES TO ACCOUNTS

69

Aban Loyd Chiles Offshore Ltd.

3. The details of the related entities are given below:

Name of the Company Nature of Relation Percentage of holding Accounts considered

1. Aban Energies Ltd Subsidiary 100% 31.03.2003 (audited)

2. Frontier Aban Drilling (India) Limited Joint Venture 33.33% 31.03.2003 (unaudited)

Schedules annexed to and forming part of Consolidated Accounts

1. Significant Accounting PoliciesAccounting Conventions and Concepts

A. Financial statements are based on historical cost convention and on the basis of a going concern and comply with theAccounting Standards referred to in Section 211(3C) of the Companies Act, 1956. The Company follows mercantilesystem of accounting and recognises income and expenditure on an accrual basis.

B. Fixed AssetsFixed Assets are capitalised at cost inclusive of installation expenses and interest upto the date the asset is put to use.The original cost of Fixed Assets acquired through foreign currency loans are adjusted for any exchange differencebetween actual payment of principal and the original cost booked and by revaluation of closing foreign currency loanat the rate prevailing on the closing day.

C. DepreciationDepreciation on Fixed Assets is provided on the Straight Line basis at rates prescribed in Schedule XIV of theCompanies Act, 1956 on a pro-rata basis. Depreciation on certain Downhole Equipments included in Plant andMachinery is provided at a higher rate on straight line method based on technical evaluation of the expected usefullife. Depreciation on windmills is provided at a higher rate on straight line method based on technical evaluation ofthe expected useful life.

D. Inventory ValuationInventory of Stores and Spares are valued at cost based on First-in-First out Cost formula.

E. Foreign Currency TransactionsTransactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Currentassets and Current liabilities are translated at year end exchange rates and the realised exchange gains or losses arerecognised in the Profit and Loss Account.

F. Investments(a) Long Term Quoted Investments are valued at cost unless there is a permanent fall in the value. A provision for

dimunition is made to recognise a decline other than temporary, in the value of long term Investments.

(b) Long Term Unquoted Investments in Subsidiary Company being of long term nature are valued at cost and no lossis recognised in the fall in their networth unless there is a permanent fall in their networth.

(c) Current Investments are valued at lower of cost and fair value of the category of such current investments.

G. Proposed DividendThe Dividend as proposed by the Directors is provided in the books of account pending approval at the AnnualGeneral Meeting.

H. Retirement Benefits

Contribution to Provident Fund is made monthly at a predetermined rate to the Provident Fund authorities and debitedto the Profit and Loss Account on accrual basis. The Company has an arrangement with Life Insurance Corporation ofIndia (LIC) to administer its Gratuity schemes. The premium advised by LIC is debited to the Profit and Loss Accounton an accrual basis. The provision for leave encashment has been made on basis of actuarial valuation.

70

Aban Loyd Chiles Offshore Ltd.

Schedules annexed to and forming part of Consolidated Accounts

I. Borrowing CostBorrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of thecost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intendeduse. All other borrowing costs are charged to revenue.

J. Amortisation of ExpenditureExpenditure incurred in connection with dry docking of rig is amortised over a beneficial period of five years from theyear of completion of dry docking and such amortised amount is included under the head Repairs to Machinery inProfit and Loss Account. The balance unamortised amount is carried forward under the head MiscellaneousExpenditure in the Balance Sheet.

K. Taxes on Income

The Income tax provision comprises of current tax and deferred tax. Current tax is the amount of tax payable in respectof income for the period. In accordance with the Accounting Standard-22 - Accounting for Taxes on Income issued bythe Institute of Chartered Accountants of India, the deferred tax for timing difference between book profit and tax profitfor the year is accounted based on the rates and laws that have been enacted or substantially enacted as on theBalance Sheet date. However deferred tax assets arising from timing difference are recognised to the extent of theiractual realisability in future years.

(Amount in Rupees)

31.3.2003 31.3.2002

a. Guarantees given by banks on behalf of the Company 33,58,71,510 20,04,60,636

b. Liability in respect of partly paid shares held as Investment 73,172 73,172

c. Corporate Guarantee given by the Company 5,32,66,731 5,32,66,731

2. Contingent liabilities not provided for

Purchased Units Sold Units

Kotak Mahindra Liquid Scheme - Growth 8,30,861.520 8,30,861.520

Kotak Mahindra Liquid Institutional Plan- Dividend 11,01,026.900 –

Kotak Bond - Whole sale Plan 1,42,429.403 94,952.935

Chola Mutual Fund - Liquid Plan 4,12,065.271 4,12,065.271

Chola Mutual Fund - Liquid Institutional plan - Dividend 5,02,274.600 –

DSP Merrill Lynch - Short Term Growth Plan 38,96,432.816 38,96,432.816

DSP Merrill Lynch - Liquid Fund Growth Plan 20,68,539.232 20,68,539.232

DSP Merrill Lynch - Liquid Fund - Dividend 10,79,837.758 –

Deutsche Premier Bond Fund Institutional Plan - Dividend 10,18,246.986 –

HDFC Short Term Plan - Growth 36,91,126.530 36,91,126.530

HDFC Floating Interest Rate Income Fund 39,72,915.400 39,72,915.400

HDFC Liquid Fund - Growth Plan 16,65,140.290 16,65,140.290

HDFC Liquid Fund - Growth Plan 16,63,450.660 16,63,450.660

HDFC Floating Interest Rate Income Fund - Dividend 39,72,915.400 –

Prudential ICICI - Liquid Plan 13,51,634.460 13,51,634.460

Prudential ICICI - Liquid Plan - Dividend 16,97,592.804 –

IL & FS Liquid Account - Growth Plan 8,95,062.830 8,95,062.830

IL & FS Liquid Account - Dividend plan 9,86,020.218 –

JM Mutual Fund - Growth Plan 4,73,915.681 4,73,915.681

JM Mutual Fund - Dividend Plan 4,90,881.812 –

3. During the year the Company acquired and sold the following investments:

71

Aban Loyd Chiles Offshore Ltd.

Purchased Units Sold Units

Sundaram Bond Saver 1,94,386.324 1,02,308.590Birla Bond Plus Plan B - Growth 18,12,316.500 18,12,316.500Birla Cash Plus Plan B - Growth 12,35,209.132 12,35,209.132Birla Bond Plus Plan B - Growth 18,12,476.842 –HSBC Cash Fund 9,86,319.745 9,86,319.745HSBC Cash Fund - Dividend 9,86,319.745 –Standard Chartered Mutual Fund 36,24,337.425 36,24,337.425Grindlays Short Term Plan - Growth 16,75,364.601 16,75,364.601Grindlays Floating Rate - Growth 20,05,371.299 20,05,371.299Grindlays Floating Rate - Dividend 20,05,431.087 –Templeton India - Growth Plan 2,62,421.169 –Templeton India - Income Plan Growth 18,342.704 18,342.704Templeton India Treasury Management A/c 13,374.200 13,374.200Templeton India Treasury Fund A/c 6,671.668 6,671.668Templeton India Liquid Fund 30,17,449.581 –Standard Chartered Grindlays Mutual Fund – 35,05,531.000

Schedules annexed to and forming part of Consolidated Accounts

5. Related Party disclosure:Enterprise where control exists

1. Subsidiary CompanyAban Energies Limited

Other related parties with whom the Company had transactions1. Joint Venture

(a) Frontier Aban Drilling (India) Limited

2. Key Management personnel(a) Mr. M A Abraham – Managing Director(b) Mr. Reji Abraham – Wholetime Director(c) Mr. Renny Abraham – Non-Executive Director(d) Mr. P Venkateswaran – Director-Operations(e) Mr. C P Gopalkrishnan – Director (Finance) & Secretary(f) Mr. V S Rao – Non-Executive Director(g) Mr. P Murari – Non-Executive Director(h) Mr. S. Srinivasan – Non-Executive Director (Nominee of ICICI Bank Limited)(i) Mr. Frank A Wojtek – Non-Executive Director

(Amount in Rupees)

31.03.2003 31.03.2002Salary & Allowances 68,32,000 56,06,000Monetary Value of Perquisites 20,49,966 69,32,761Sitting fees 66,000 74,500 Commission 66,30,503 36,12,684

1,55,78,469 1,62,25,945

4. Managerial Remuneration

72

Aban Loyd Chiles Offshore Ltd.

Schedules annexed to and forming part of Consolidated Accounts

Primary Segment Information

2003 2002

1. Segment Revenue- Drilling 229,10,24,573 186,56,92,999- Wind Energy 22,72,11,427 26,46,48,967- Share in joint venture 24,82,86,958 276,65,22,958 – 213,03,41,966

2. Segment Result- Drilling 55,54,21,549 23,30,55,425- Wind Energy (19,44,84,739) (4,58,43,946)-Share in joint venture 63,37,113 36,72,73,923 – 18,72,11,479

3. Segment Assets- Drilling 220,44,45,105 264,34,49,243- Wind Energy 226,87,05,430 113,70,29,203- Share in joint venture 9,22,61,467 456,54,12,002 – 378,04,78,446

4. Segment Liabilities- Drilling 206,85,51,717 235,50,14,629- Wind Energy 114,10,78,313 33,18,39,547- Share in joint venture 10,05,11,097 331,01,41,127 – 268,68,54,176

5. Depreciation- Drilling 15,80,48,453 29,81,19,886- Wind Energy 17,13,50,881 6,18,40,620- Share in joint venture 1,90,771 32,95,90,105 – 35,99,60,506

6. Capital Expenditure- Drilling 5,07,10,104 187,17,07,777- Wind Energy 118,32,85,850 76,07,46,729- Share in joint venture 19,22,353 123,59,18,307 – 263,24,54,506

6. Segment Reporting

A. Primary segment as per the Accounting Standard 17-segment reporting issued by the Institute of CharteredAccountants of India. The group's primary segments are Offshore Oil Drilling services ,Wind Energy services andWind Power generation. The above business segments have been identified considering the nature of servicesrendered and the internal financial reporting system. Income and Expenses have been accounted for based on theirrelationship to the operating activities of the segment

B. Secondary SegmentSince the the Group does not have any Overseas Operations there are no reportable geographical segments.

Amount in RupeesTransaction with Related Parties During the Year

Nature of Transaction

2003 2002 2003 2002

i) Investment in Share Capital 49,99,300 49,99,300 – –ii) Services Charges Received 3,39,25,098 68,98,143 – –iii) Remuneration – – 1,55,78,469 1,62,25,945iv) Amount Advanced 1,26,60,000 20,00,000 – 30,00,000v) Amount Outstanding as at 31.3.2003

receivable/(payable) 1,12,00,364 20,00,000 29,86,000 31,28,000

7. Sundry Creditors include Rs. 1,80,345/- (Previous Year Rs. 57,778/-) due to Small Scale Industrial Undertakings.

8. Loans and Advances include loan to wholetime Directors of the Company who were officers at the time of taking the loanRs. 29,86,000/- (previous year Rs. 31,28,000/-). Maximum amount outstanding during the the year Rs. 31,28,000/-(Previous Year Rs. 31,28,000/-).

9. Interests in joint venturesThe Company's interest in joint venture is reported as Long Term Investments at at 31st March, 2003 ( Schedule -6) andstated at cost. On adoption of Accounting Standard 27 during the year, the Company's interest in this joint ventureaccounted for proportionate consolidation are:

Amount in Rupees

Key Management PersonnelJoint Venture Enterprise

73

Aban Loyd Chiles Offshore Ltd.

As at 31st March, 2003Rs. in Lacs

I. Assets1. Fixed Assets (Net) 17.32 2. Current Assets, Loans and Advances

a) Inventories 133.75 b) Sundry Debtors 534.85 c) Cash and Bank Balances 55.78 d) Loans and Advances 312.75 e) Miscellaneous Expenditure ( to the extent not written off or adjusted) 56.41

II. Liabilities1. Shareholders' funds - Reserves and Surplus 55.762. Secured Loans 161.433. Current Liabilities 843.68

For the year ended31st March, 2003

Rs. in LacsIII. Income

Income from operations 2,456.51Other Income 26.36

IV. Expensesa) Stores and Spares consumed 404.56b) Employee Cost 46.49c) Other expenses 1,888.72d) Interest 16.56e) Depreciation 1.91f) Deferred Revenue expenses written off 61.46

Profit After Taxation 63.38

2002-03 2001-02No. of shares No. of shares

(a) Share CapitalFully paid 73,64,031 62,78,760Partly paid Calculated as fully paid 6,644 –

(b) Share Capital SuspenseFully paid 10,85,271Partly paid Calculated as fully paid 6,644

73,70,675 73,70,675Profit after tax Rs. 9,82,32,130 12,44,75,990Earning per Share Rs. 13.33 16.89

10. Earning per share is calculated as shown below: (Equity shares of Rs.10/- each)

11. Previous Year’s figures are re-grouped / re-arranged wherever necessary.

Per our Report attachedFor Ford, Rhodes, Parks & Co.Chartered Accountants

R.Subramanian M. A. Abraham Reji AbrahamPartner Managing Director Wholetime Director

Chennai, 14th July, 2003

On behalf of the Board

74

Aban Loyd Chiles Offshore Ltd.

Consolidated Cash Flow StatementFor the Year ended 31st March, 2003

(Rupees in Lacs)

2002-2003 2001-2002

A. CASH FLOW FROM OPERATING ACTIVITIESNet Profit Before Tax 3,672.74 1,557.12Adjustments for:Miscellaneous Expenditure 5.79 5.79Amortised Dry Docking expenses 817.83 812.58Depreciation 3,295.90 3,599.60Goodwill written off 629.33 629.33Interest 3,703.56 3,205.96Income from Non -Trade Investments (230.66) (73.36)Profit on sale of Investments (9.70) (64.81)Loss on sale of Investments – 0.33 Provision no longer required – (239.54)Loss on sale of Fixed Assets 41.43 58.82Operating Profit before Working Capital Changes 11,926.22 9,491.82Adjustments for:Inventories (364.54) (708.16)Trade and other receivables 1,599.96 (1,111.58)Trade and other payables 958.41 (2,028.21)Cash Generated from Operations 14,120.05 5,643.87Interest paid (3,815.48) (3,017.87)Direct taxes paid (522.11) (717.06)Deferred Revenue Expenditure paid (56.40) (2,316.62)Net Cash from Operating Activities 9,726.05 (407.68)

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of fixed assets (12,562.29) (22,712.89)Sale of fixed assets 22.67 1,221.54Interest and dividend received 68.91 73.36Purchase of Investments (6,244.28) (15,626.07)Sale of Investments 4,604.32 20,597.99Net Cash used in Investing Activities (14,110.67) (16,446.07)

C. CASH FLOW FROM FINANCING ACTIVITIESProceeds/(Repayment) of Long Term Borrowings 5,680.40 17,732.09Dividend paid (294.83) (188.36)Net Cash from Financing Activities 5,385.58 17,543.73Net Increase/(Decrease) in Cash and Cash Equivalents 1,000.96 689.98Cash and Cash Equivalents as at the beginning of the year 1,842.86 1,152.88Cash and Cash Equivalents on initial adoption - joint venture 55.79 –Cash and Cash Equivalents as at the end of the year 2,899.61 1,842.86

Per our Report attachedFor Ford, Rhodes, Parks & Co.Chartered Accountants

R.Subramanian M. A. Abraham Reji AbrahamPartner Managing Director Wholetime Director

Chennai, 14th July, 2003

On behalf of the Board

75

Aban Loyd Chiles Offshore Ltd.Regd. Off: Janpriya Crest, 113, Pantheon Road, Egmore, Chennai - 600 008

PROXY FORM

Folio No. / DP I D & Client I D

I/We ______________________________ of __________________________________ in the district of ___________________

being members of Aban Loyd Chiles Offshore Ltd hereby appoint ____________ of ____________ in the district of

___________ failing him ___________ of ___________ in the district of ________ as my / our proxy to vote for me / us on my

/ our behalf at the 17th Annual General Meeting of the Company to be held at the Auditorium of Madras School of Social

Work, 32 Casa major Road, Egmore, Chennai - 600 008, on Friday the 26th September 2003 or any adjournment thereof.

Signed this ___________________ day of ________________ 2003

Affix Re.1Revenue Stamp

Note(s) :1. The form should be signed across the stamp as per the specimen signature registered with the Company.2. The Proxy form duly completed must reach the Registered Office of the Company at Janpriya Crest, 113, Pantheon

Road, Egmore, Chennai - 600 008 not less than 48 hours before the meeting3. Proxy need not be a Member

Aban Loyd Chiles Offshore Ltd.Regd. Off: Janpriya Crest, 113 Pantheon Road, Egmore, Chennai - 600 008

17th Annual General Meeting

Folio No. / DP ID & Client ID No of Shares

Name of Member / Joint Holder Please tick whether

Member

Joint Holder 1.

Joint Holder 2.

Proxy

I / We hereby record my presence at the 17th Annual General Meeting of Aban Loyd Chiles Offshore Ltd. held on Friday, the26th September, 2003 at the Auditorium of Madras School of Social Work, 32 Casa Major Road, Egmore, Chennai - 600 008.

Member(s) or Proxy(s) SignatureNote:1. Shareholder / Proxy must bring admission slip to the meeting duly completed and signed and hand over at the entrance2. Shareholders intending to require information about accounts to be explained at the meeting are requested to inform the

Company at least a week in advance of their intention to do so, so that the papers relating thereto may be made available,if permissible.✃