You are here » Home » Companies » Company Overview » Oil Country Tubular Ltd

Oil Country Tubular Ltd.

BSE: 500313 Sector: Metals & Mining
NSE: OILCOUNTUB ISIN Code: INE591A01010
BSE 11:13 | 18 Jan 9.82 0.05
(0.51%)
OPEN

9.80

HIGH

9.82

LOW

9.58

NSE 11:09 | 18 Jan 9.80 0.10
(1.03%)
OPEN

9.70

HIGH

9.90

LOW

9.60

OPEN 9.80
PREVIOUS CLOSE 9.77
VOLUME 6130
52-Week high 12.92
52-Week low 3.81
P/E
Mkt Cap.(Rs cr) 43
Buy Price 9.77
Buy Qty 178.00
Sell Price 9.82
Sell Qty 1769.00
OPEN 9.80
CLOSE 9.77
VOLUME 6130
52-Week high 12.92
52-Week low 3.81
P/E
Mkt Cap.(Rs cr) 43
Buy Price 9.77
Buy Qty 178.00
Sell Price 9.82
Sell Qty 1769.00

Oil Country Tubular Ltd. (OILCOUNTUB) - Auditors Report

Company auditors report

To the Members of

OIL COUNTRY TUBULAR LIMITED

Report on the Audit of the Financial Statements

Qualified Opinion

We have audited the Ind AS financial statements of OIL COUNTRY TUBULAR LIMITED("theCompany") which comprise the Balance Sheet as at 31st March 2021 the Statement ofProfit and Loss (including Other Comprehensive Income) the Statement of Changes in Equityand statement of Cash Flows for the year then ended and Notes to the FinancialStatements including a summary of significant accounting policies and other explanatoryinformation.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion section of our report the aforesaid financial statements give the informationrequired by the Companies Act 2013 in the manner so required and give a true and fairview in conformity with the Indian Accounting Standards prescribed under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 and its loss and other comprehensiveloss changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our qualified opinion on thefinancial statements.

1. Qualified Opinion

Impairment of Assets: As per Indian Accounting Standard 36 on impairment of Assets theCompany is required to determine impairment in respect of fixed assets as per themethodology prescribed under the said Standard. However the management of the Company hasnot done impairment testing for the reasons explained in the note No.34 and 35of the IndAS financial statement. In the absence of any working for impairment of the fixed assetsas per Ind AS 36 the impact of impairment if any on the Ind AS financial statement isnot ascertainable. (Refer to note No.34 and 35notes to financial Statements)

2. Emphasis of Matter

Material Uncertainty Related to Going Concern

The Company has incurred losses of Rs.50.48crores during the year under audit and thelosses for the year together with accumulated losses have fully eroded the net worth ofthe Company and as of that date the total liabilities of the Company exceeded its totalassets by Rs.119.08 crores. A Material uncertainty exists that may cast significant doubtson the Company's ability to continue as a going concern in the event of no resolution planbeing accepted by the lenders in the CIRP process. Refer Note.34 in the Notes to Accounts.

Our opinion is not qualified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

Except for the matters discussed in the Basis of Qualified Opinion Paragraph andEmphasis of Matter there are no Key audit matters to be discussed in the Auditor'sreport.

Other Information

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Director's Report including Annexures to Director's Report andShareholder's Information but does not include the financial statements and our auditor'sreport thereon. The board reports including Management Discussion and Analysis report isexpected to be made available to us after the date of this auditor's report.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the standalone financial statements or our knowledge obtainedin the audit or otherwise appears to be materially misstated.

When we read the Director's reports including Management Discussion and Analysisreport if we conclude that there is a material misstatement therein we are required tocommunicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance total comprehensive income changes in equityand cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Ind AS specified under section 133 of the Act. This responsibilityalso includes maintenanceof adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of theCompany and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates thatare reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy andcompleteness of the accounting recordsrelevant to the preparation and presentation of the financial statements that give a trueand fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements the management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the goingconcern basis of accounting unless themanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand toissue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of subsection (11) of Section 143 of the Act (hereinafterreferred to the "Order") and on the basis of such checks of the books andrecords of the Company as we considered appropriate and according to the information andexplanations given to us we give in the Annexure-1 a statement on the matters specifiedin paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act based on our audit we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the statement of cash flows and the statement of changes in equity dealt with bythis Report are in agreement with the books of account.

d) In our opinion the aforesaid said financial statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.

e) The Honorable National Law Tribunal Hyderabad Bench ("NCLT") Vide orderdated No. CP (IB) No.220/ 07/ HDB /2019 dated 28.01.2020 initiation Corporate InsolvencyResolution Process ("CIRP") in respect of Oil Country Tubular Limited as per theprovisions of the Insolvency and Bankruptcy Code 2016 (IBC) and as per section 17 of thecode the powers of the Board of Directors of Oil Country Tubular Limited (CorporateDebtor) stands suspended and such powers shall be vested with Mr. Sisir Kumar AppikatlaResolution Professional.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure -2".

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended we report thatthe remuneration paid by the Company to its directors during the year in our opinion andto the best of our information and according to the explanations given to us is inaccordance with the provisions of section 197 of the Act."

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) 2014 in our opinion and tothe best of our information and according to the explanations given to us;

i. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements.

ii. In our opinion and as per the information and explanations provides to us theCompany has not entered into any long-term contracts including derivative contractsrequiring provision under applicable laws or accounting standards for materialforeseeable losses and

iii. There has been no delay in transferring the amounts required to be transferredto the Investor Education and Protection Fund by the Company.

TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in Paragraph 1 under section 'Report on Other Legal and RegulatoryRequirements' of our report of even date)

1.1. According to the information and explanations given to us the Company ismaintaining proper records showing full particulars including quantitative details andsituation of fixed assets.

1.2. According to the information and explanations given to us all the fixed assetshave not been physically verified by the management at reasonable intervals and as such weare unable to comment on the discrepancies if any.

1.3. All the title deeds of the immovable properties are held in the name of theCompany.

2. According to the information and explanations given to us the inventories have notbeen physically verified at reasonable intervals by the management.

3. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under Section 189 of theCompanies Act 2013. Accordingly the sub-clauses (a) (b) and (c) are not applicable tothe company.

4. According to the information and explanations given to us the Company has notgranted any loans nor has it made any investments or given any guarantee or security whichare covered under the provisions of Section 185 and 186 of the Companies Act 2013.

5. According to the information and explanations given to us the Company has notaccepted any deposits in terms of the directives issued by Reserve Bank of India and theprovisions of Sections 73 to 76 or any other relevant provisions of the Companies Act2013 and the rules framed there under.

6. We have broadly reviewed the cost records maintained by the Company pursuantsub-section (1) of Section 148 of the Companies Act 2013 and are of the opinion thatprima facie the prescribed accounts and records have been made and maintained.

7.1 According to the information and explanations given to us the company is generallyregular in depositing undisputed statutory dues including provident fund employees stateinsurance income tax sales tax service tax duty of customs duty of excise valueadded tax goods and service tax cess and other statutory dues as are applicable withthe appropriate authorities.

According to the information and explanations given to me there are no arrears ofoutstanding statutory dues except as mentioned below as at the last day of the financialyear under audit for a period of more than six months from the date they became payable.

Particulars Amount (Rs)
1. Tax Deducted at Source 1216951
2. Employee State Insurance 64426
3. Provident Fund 177881
4. Professional Tax 100
Total 1459358

7.2 According to the information and explanations given to us there are no dues ofincome tax or sales tax or service tax or duty of customs or duty of excise or value addedtax which have not been deposited on account of dispute except the following:

Nature of the Statute & Nature of due Amount Rs Period Forum where litigation is pending
Central Excise - Demand raised by the Central Excise Department in respect of process amounting to 'manufacture' and applicability of duty thereon in respect of certain products against which an appeal has been made before CESTAT Hyderabad. 72245173 From 01.04.2007 to 31.03.2016 CESTAT Hyderabad

8. According to the information and explanations given to us the outstanding to banksincluding interest recognized on accrual basis and details of out standings as per Companybooks are as under:

Name of the Bank Amount Outstanding (Rs)
1 State Bank of India 605023894
2 Allahabad Bank 567554118
3 Indian Overseas Bank 559353254
Total 1731931266

9. According to the information and explanations given to us during the year underreview the Company has not raised any money by way of initial public offer furtherpublic offer or term loans and hence the reporting requirement on the purpose ofapplication of the same is not warranted.

10. According to the information and explanations given to us and based upon the auditprocedures performed by us no fraud by the Company or on the Company committed by itsofficers or employees has been noticed or reported during the year.

11. According to the information and explanations given to us as the company is inInterim Resolution Processthe provisions of Section 197 read with Schedule V of theCompanies Act 2013 are not applicable.

12. As the Company is not a Nidhi Company in terms of the provisions of the CompaniesAct 2013 read with Nidhi Rules 2014 the matters to be reported under clause (xii) arenot applicable.

13. According to the information and explanations given to us in respect of thetransactions with the related parties the Company has complied with the provisions ofSection 177 and 188 of the Companies Act. 2013 wherever applicable. In our opinion thedetails as required by the applicable accounting standards have been disclosed in thefinancial statements for the year under review.

14. According to the information and explanations given to us the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year under review. Hence reporting requirement on compliance withSection 42 of the Companies Act 2013 and purpose of application of the funds so raised isnot applicable.

15. According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with him andhence reporting requirement on compliance with the provisions of Section 192 of theCompanies Act 2013 is not applicable.

16. According to the information and explanations given to us and in our opinion thecompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

TO THE INDEPENDENT AUDITOR'S REPORT:

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act"):

We have audited the internal financial controls over financial reporting of OILCOUNTRY TUBULAR LIMITED ("the Company") as of March 312021 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit.

We conducted our audit in accordance with the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting (the "Guidance Note") and theStandards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols both applicable to an audit of Internal Financial Controls and both issued bythe Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that

1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

3) Provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Basis for Qualified Opinion

According to the information and explanations given to us and based on our audit thefollowing material weakness has been identified as at March 31 2021.

The Company's internal financial controls over obtaining certain confirmation ofbalances particularly confirmations of balances from Banks were not operatingeffectively which could potentially affect the expenses -Interest bank charges etc. -and resultant closing bank balances shown in the books of account of the Company.

A material weakness is a deficiency or a combination of deficiencies in internalfinancial control overfinancial reporting such that there is a reasonable possibilitythat a material misstatement of the company's annual or interim financial statements willnot be prevented or detected on a timely basis.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matters described in the basis forqualified opinion paragraph above the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2021 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the Institute ofChartered Accountants of India.

.