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Geologging Industries Ltd.

BSE: 526630 Sector: Oil & Gas
NSE: N.A. ISIN Code: N.A.
BSE 05:30 | 01 Jan Geologging Industries Ltd
NSE 05:30 | 01 Jan Geologging Industries Ltd

Geologging Industries Ltd. (GEOLOGGINGINDS) - Director Report

Company director report

GEOLOGGING INDUSTRIES LIMITED ANNUAL REPORT 2011-2012 DIRECTOR'S REPORT The Directors have pleasure in presenting the 26th Annual Report of GEOLOGGING INDUSTRIES LIMITED (the Company), with the audited Statement of Accounts for the year ended March 31, 2012. Company Overview: Even though the company's operations not to the level of expectations, it showed an upward trend in its business activities and made profit during the year and the accumulated deficit carried to the Balance sheet is reduced to that extent. Financial Highlights: (Rupees in Lacs) PARTICULARS Year Ended Year Ended Year Ended 31.03.2012 31.03.2011 31.03.2010 INCOME 772.74 541.47 502.79 Profit before Interest and Depreciation 27.08 151.38 131.72 Less: Interest 36.43 36.51 37.80 Depreciation 49.38 51.32 40.47 Profit before Taxation 45.13 63.54 53.44 Net Profit after Taxation 27.08 39.16 28.44 add: Surplus Brought Forward (338.53) (377.69) (406.13) Add: Transfer 26.27 Deficit Carried to Balance Sheet 312.26 338.53 377.69 Dividend: The company has not declared any dividend for F.Y 2011-12. Operational Review: Your Company has slowly and steadily shown revenue increases every year for the last 5 years and this is so in 2012 too. The Management of the Company has worked towards maintaining revenue generation and profit increase in sliding Indian economy and global economy. The continuing economic recession is forcing companies in India and overseas to cut costs and save more. This is in turn affecting your Company's business adversely. Keeping the economic environment, stiffening competition and low contract prices, your Company is exploring for projects with state companies and contracts that are of long term duration. Your Company was enjoying a very good relationship with the Indian private oil companies and was constantly being awarded with their exploration drilling contracts; unfortunately business from this segment is under stress due to the adverse economic conditions that is making private companies postpone investment. Risk Management: As a mudlogging service company, the Company is committed to ensure that effective risk management policies and practices are incorporated as fundamental aspects of all its business operations. The Corporate Risk Management Group of the Company has a comprehensive risk management policy in place, addressing primarily areas such as market, credit and operation risks. This policy seeks to minimise the risks generated by the activities of the Company. The group continuously develops and enhances its risk management and control procedures in order to better identify and monitor risks and to proactively take appropriate actions to mitigate the same. Future Outlook: The financial year 2012-13 will be challenging for the Indian Industry as a whole and more so for the oil and gas segment. Foreign and private companies will still not invest in the oil and gas segment reasons being: * High crude oil prices sustaining high inflation * High commodity prices * Tight monetary policy * Continuous downward trend in the value of Indian currency * Uncertainty in the Eurozone Keeping in view such an economic scenario your Company plans to bid for projects with state oil companies that will continue to offer assured business and also engage us in longer term contracts. Of course the downside of this is that contractual prices tend to be low. To address this issue, your Company is planning review of operations to cut costs and identify activities that will lead to saving of resources. Public Deposits: During the year, the Company has not accepted any deposit under Section 58 A of the Companies Act, 1956. Directors: During the year, Mr. Sreedhar Tripathy will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re-appointment. Auditors: The Statutory Auditors, M/s. HEMANT MHAMBREY ASSOCIATES. Chartered Accountants have to be re-appointed in ensuing AGM hence the members of the company are requested to consider their re-appointment. FOREIGN EXCHANGE EARNING AND EXPENDITURE: During the year under review company had spent Rs.52,72,792/-on import of components, sensors and assemblies. An amount of Rs. 1,44,57,285/- is incurred as expenditure. PERSONNEL AND OTHER MATTERS: As required by the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are not given as no employee was coming under the provisions set of section 217(2A). Company is adopting latest technology in its operations and updation thereof is an ongoing process. Conservation of energy is given paramount importance and introduced energy efficient equipments and instruments for its activities. AUDIT COMMITTEE: The Company has formed an Audit Committee comprising of 3 directors. The terms of the reference of the committee are in line with the requirements as stipulated u/s 292A of the Co. Act, 1956 and Corporate Governance as stated in Clause 49 of the Listing Agreement. DIRECTORS' RESPONSIBILITY STATEMENT: The Directors confirm that in preparation of the annual accounts for the year ended March 31, 2012:- 1. The applicable accounting standards had been followed along with proper explanation relating to material departures; 2. They had selected such accounting policies and applied them consistently and made; 3. Judgments and estimates that are reasonable and prudent had been taken so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; 4. They had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and 5. They had prepared the annual accounts on a going concern basis. CORPORATE GOVERNANCE AND COMPLIANCE: A report on corporate governance is annexed to this report. A certificate from Practicing Company Secretary with regards to the compliance of the corporate governance by the company is annexed to this report. The company has fully complied with all mandatory requirements prescribed under clause 49 of the listing agreement. In addition, the company has also implemented some of the non mandatory provisions of clause 49. ACKNOWLEDGMENTS: The Directors thank the clients for the confidence reposed, which has enabled the Company in successfully achieving the satisfactory performance. The Directors also thank the Company's bankers, lenders, the Government of India, the Securities and Exchange Board of India, the Reserve Bank of India and other statutory authorities for their continued support to the Company. The Directors express their gratitude for the support and guidance received from its shareholders. The Directors also express their sincere thanks and appreciation to all the employees for their commendable teamwork, professionalism and contribution during the year. For and on behalf of the Board For GEOLOGGING INDUSTRIES LTD. Place: Mumbai Sreedhar Tripathy Date : 31/08/2012 Executive Director MANAGEMENT DISCUSSION AND ANALYSIS The Company is in the business of oil field service and mainly focused on Mudlogging Services, Drilling Data Monitoring Services. The key issues of the Management Discussion and Analysis are given below. (a) Industry structure and developments: The size of the oil and gas industry in terms of turnover stands at USD 160 bn. The value of crude oil and LNG imports into India in 2010/11 were around US$98 billion. About 78 per cent of India's petroleum consumption is met from imports (mostly of crude oil), while about 25% of natural gas (including LNG) consumption comes from imports. The growing oil and Natural Gas exploration world over and specifically in India given great opportunity for the company. (b) Strength: The strength of a company is known from the profit it earns during the last years and sound advances. It also depends on the Government policies of taxation. All round economic reforms and consequent growth in the sector will give boost to the company's business. (c) Comment on Current year's performance: Receipts: The Receipt has been phenomenal for the first year of its operations. Operating Expenses : The operating Expenses are well under control. Operating Profits : The Operating Profits are up to industry mark. Indirect Expenses : The Indirect Expenses are under control. Depreciation : Reasonable amount of Depreciation is provided. Profit before tax : Profit before tax is also an improving trend. Taxation : Taxation is Provided as per Income Tax Act. Debtor/Sales : Debtors are reasonable. Creditors/Purchase : The Company has an established credit. d) Opportunities and threats: Over the next decade, global demand for oil & gas is set to rapidly increase as rising populations and economic growth help to drive the industry. This will create a need for additional oil & gas infrastructure to be constructed. At the same time, many countries around the world are currently facing a number of security challenges stemming from civil unrest, terrorist activities, and a competitive global market. Together, these factors will create substantial opportunities for companies involved in the oil & gas infrastructure. (e) Segment wise performance: The business of the Company falls under a single segment i.e. Mudlogging activity related to exploration of oil and natural gas for the purpose of Accounting Standard AS-17. (f) Outlook: The continual increase in demand of oil and other limited resources in india and other countries is expected to give the necessary support to the oil industry. The Company is making all efforts to accelerate growth of its business. It expects to improve its position in the market by focusing on technological advancement and by working aggressively in the areas of productivity, efficiency and cost reductions. (g) Risk and concerns: The main risk factors are internal to the company. The Company is expecting some big contracts from Indian and Non-Indian corporate in the Current year. The materialization of the same may effects the future operations of the company. (h) Internal control system: Internal audit and other controls have been found to be adequate. These are reviewed periodically by the Audit Committee and found the performance satisfactory. (i) Developments in human resources and industrial relations: Information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particular of Employees) Rules, 1975 is not required to be given as no employee falls under it. The Company continued to have cordial relations with all the employees.