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Oil Country Tubular Ltd.

BSE: 500313 Sector: Metals & Mining
NSE: OILCOUNTUB ISIN Code: INE591A01010
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OPEN 8.26
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VOLUME 3161
52-Week high 12.92
52-Week low 6.27
P/E
Mkt Cap.(Rs cr) 38
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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OPEN 8.26
CLOSE 8.65
VOLUME 3161
52-Week high 12.92
52-Week low 6.27
P/E
Mkt Cap.(Rs cr) 38
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Oil Country Tubular Ltd. (OILCOUNTUB) - Director Report

Company director report

To the Members

OIL COUNTRY TUBULAR LIMITED

The Resolution Professional takes pleasure in presenting the 35th AnnualReport of the Company together with the Audited Statements of Accounts for the year ended31st March 2021.

FINANCIAL RESULTS:

The financial performance during the period ended 31st March 2021 is asunder:

(Rs in Lakhs)

Particulars 2020-21 2019-20
Gross Income 499.07 1315.33
Loss Before Finance Chargesand Depreciation 876.80 2226.02
Finance Charges 2164.64 1860.96
Gross Loss 3041.44 4086.98
Provision for Depreciation 2046.14 2104.50
Net Loss BeforeTax 5087.58 6191.48
Provisionfor Tax 0.00 21.54
Net Loss After Tax 5087.58 6213.02

OPERATIONS:

The Gross Income of the Company is Rs 499.07 lakhs during the current financial year2020-21 as against Rs 1315.33 lakhs during the previous financial year. The Company isundergoing CIRP and this has caused an adverse impact on the operations of the Company asone of the main reasons for low turnover.

The company is following accrual basis of accounting as per the provisions of theCompanies Act 2013. Accordingly interest accrued on the loans outstanding amounting toRs 4485.65 lakhs are recognized in the books of account for accounting purpose only.However interest recognized after commencement of CIRP shall not form part of CIRP cost.The reason being the amount admitted by the IRP/RP are crystallised as on the date ofcommencement of the CIRP Hence no further interest is considered during the CIRP periodfor the purpose of arriving at the CIRP cost.

STATUS OF CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP):

The present situation is summarized as follows:

The Hon'ble NCLAT vide its order dated 07.12.2020 held that the CIRP has to beconducted and carried on in accordance with the provisions of the Code which prescribestimelines and that withdrawal of the application (under Section 12A) based onconsideration by Committee of Creditors and settlement are part of the same process.

Form-G was published on 26.03.2021 calling for an EOI. As per the published form-Gthe deadline for the submission of the resolution plans by the prospective resolutionapplicants was fixed as 25.05.2021 keeping in view the time line of 90 days fixed byHonorable NCLT for the completion of CIRP vide its orders dated 25.03.2021.

In view of the pandemic situation and Lock down the COC in its 11th meeting held on17.05.2021 extend the deadline for the submission of resolution plans by the prospectiveresolution applicants until 6 PM on 30.06.2021 in lieu of the dead line of 25.05.2021 asper the form-G published on 26.03.2021.

During the 11th meeting of the COC held on 17.05.2021 The RP informed the members thathe had received mails from IOB and Indian Bank informing the receipt of funds by themunder their earlier compromise proposal. The RP sought oral confirmation in front of allthe members of the COC from the above lenders. In response Mr. Koustav Majumderrepresenting the IOB and Mr. Santanu Bal representing the Indian Bank re-confirmed thereceipt of the funds into their respective No lien accounts. Mr. G.V. Sastry DGMrepresenting SBI confirmed that they have received the funds into their No lien Account.The RP clarified to the floor that such No lien accounts are not under the control of theRP and hence the receipts are outside the CIRP

During the 12th meeting of the COC held on 30.06.2021 the RP informed themembers that he has received 3 resolution plans in sealed covers physically between5.30P.M to 6 P.M on 30.06.2021 under due acknowledgement with time and date stamp. Thesealed covers have been received from the following resolution applicants

1. M/s Maharashtra Seamless Limited

2. M/s Vibhor Steel Tubes Private Ltd and

3. M/s One Developers Private Limited

As informed by SBI during the 12th meeting of the COC that the Bank has been restrainedfrom exercising any rights as a creditor of the Corporate Debtor by the Hon'ble High Courtof Telangana vide its order dated 27.05.2021 in I.A No. 1 of 2021 in W.P No. 12451 of2021.

At the 12th CoC meeting held on 30.06.2021 all the members of the CoCexcept SBI resolved not to open the resolution plans received by the ResolutionProfessional and also authorized the Resolution Professional to file an application underSection 12A and seek necessary directions from the Hon'ble Adjudicating Authority.Further SBI stated that it will reserve its decision on Section 12A till the opening ofthe bids (resolution plans).

As per Regulation 30A of the CIRP Regulations a withdrawal application under Section12A of the Code is to be made in form FA which needs to be filed by the Applicant throughthe Resolution Professional. In the instant case the Applicant under Section 7 is SBI.However SBI is restrained from exercising any rights as a creditor of the CorporateDebtor.

The other members of the CoC of the Corporate Debtor other than SBI have authorizedthe Resolution Professional through a properly voted resolution to file an applicationunder Section 12A of the Code before this Hon'ble Adjudicating Authority.

The Hon'ble High Court of Telangana during the hearing on 05.07.2021 has directedthat the CIRP shall be continued till the disposal of the Writ Petition WPno 12451 in animplead petition filed by M/s Vibhor Steel tubes Pvt Ltd one of the prospectiveresolution applicants.

The RP has filed an IA seeking the indulgence of the Hon'ble Tribunal to giveappropriate directions for carrying out the CIRP of the Corporate Debtor and to issueappropriate directions to the resolution professional with regard to the withdrawal ofApplication under Section 12A of the Code.

PROSPECTS:

The Company expects to have the raw material in place if it is resoled under the IBCcode 2016 during the year 2021-2022.

The Company is in the business of producing Casing Tubing and Drill Pipe that areprimarily used in the Oil and Gas sector for the drilling and exploration of Oil and Gas.Demand for Oil & Gas is increasing every year leading to more exploration and drillingfor Oil & Gas reserves. The crude oil prices have been fluctuating during the year andthe Brent Crude Oil price on an average is at 63.16USD/ barrel. Brent crude oil serves asthe benchmark price for purchase of oil worldwide.

The Government of India has issued revised Steel Policy for providing preference todomestically manufactured Iron and Steel Products which includes seamless pipes coveringcasing tubing and drill pipes in Government procurement agencies thereby strengtheningthe manufacturing sector.

The government has notified amendments to General Financial Rules (GFR) to ensure thatgoods and services valued less than Rs 200 crore are being procured from domestic firmsonly which further strengthen the Domestic Local manufacturing which is positive step forOCTL since public sector undertakings are forced to procure locally instead of globaltenders.

The Company will be in a position to actively participate in the growing market for theProducts once it is resolved under the provisions of the IBC 2016 during the year2021-2022

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As required under SEBI LODR Regulations the Management Discussion and Analysis Reportis enclosed as a part of this Report.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

The Company has taken adequate steps to adhere to all the stipulations laid down inRegulation 34 of SEBI LODR Regulations till commencement of CIRPA report on the CorporateGovernance is included as a part of this Annual Report. A Certificate from the StatutoryAuditors of the Company M/s. G.Nagendrasundaram& Co. Chartered Accountantsconfirming compliance with the conditions of the Corporate Governance as stipulated underabove regulation is included as a part of this Report.

LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2021-22 toNSE and BSE where the Company's shares are listed.

DEMATERIALISATION OF SHARES:

96.84% of the Company's paid-up equity share capital is in dematerialized form as on 31stMarch 2021 and balance 3.16% is in physical form.The Company's Registrars are XL SoftechSystems Limited having their Registered Office at 3 Sagar Society Road No.2 BanjaraHills Hyderabad - 500034.

NUMBER OF BOARD MEETINGS HELD:

Consequent to the Commencement of CIR Process the powers of the Board of Directorsstands suspended and as per Regulation 15(2A) and (2B) of the Listing Regulations theprovisions specified in Regulations 17 of the Listing Regulations relating to Board ofDirectors are not applicable to the Company. The roles and responsibilities of the Boardof Directors are being fulfilled by the RP in accordance with the provisions of Section 17and 23 of the Insolvency Code w.e.f. January 28 2020. RP held meetings with themanagement of the Company for consideration and approval of quarterly/yearly financialresults in terms of Section 134 of the Act and Regulation 33 of the Listing Regulations.

INDEPENDENT DIRECTORS DECLARATION:

Independent Directors declaration is Not Applicable to the Company as the independentdirectors resigned from the Company. Also the powers of the board stood suspended afterinitiation of CIRP

RESOLUTION PROFESSIONAL'S RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act 2013 I hereby state and confirm thatthe Company:

a. in the preparation of the annual accounts for the year ended 31st March2021 has followed the applicable accounting standards along with proper explanationrelating to material departures;

b. has selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the Profit/ Loss of the Company for the same period;

c. has taken proper and sufficient care for maintenance of adequate accounting recordsin accordance with the provisions of the Companies Act 2013 for safeguarding the assetsof the Company and for preventing and detecting fraud and other irregularities;

d. has prepared the annual accounts on a going concern basis;

e. has laid down internal financial controls and these are adequate and are operatingeffectively.

f. has devised proper systems to ensure compliance with the provisions of allapplicable laws and these are adequate and are operating effectively.

AUDIT OBSERVATIONS:

The observations given by the Auditors are suitably explained in the Notes to Accountsand are self-explanatory.

AUDITORS:

Statutory Auditors:

M/s.G.Nagendrasundaram & Co. Chartered Accountants Hyderabad have been appointedas the Statutory Auditors for a period of 5 years at 31stAnnual General Meeting untilconclusion of 36thAnnual General Meeting subject to ratification every year at AGM.

Secretarial Auditors:

M/s. Manjula Aleti& Associates Practicing Company Secretaries Hyderabad havebeen appointed as the Secretarial Auditors to conduct the Secretarial Audit of the Companyfor the Financial Year 2020-21. The Secretarial Audit Report for theyear ended 31stMarch 2021 (in Form MR-3) submitted by them is enclosed to this Report as Annexure-A.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information on Conservation of Energy Technology Absorption Foreign Exchange Earnings& Outgo as required under Section 134 of the Act read with the Companies (Accounts)Rules 2014 is enclosed to this Report as Annexure-B.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

In terms of Section 135 of the Act the Board of Directors of the Company haveconstituted a CSR Committee. Consequent to the Commencement of CIRP the powers of theBoard of Directors and its Committees stands suspended and as per Regulation 15(2A) and(2B) of the Listing Regulations the provisions specified in Regulations 17 18 19 and 20of the Listing Regulations relating to Board of Directors and its Committees are notapplicable to the Company. The roles and responsibilities of the Board of Directors andits Committees are being fulfilled by the RP in accordance with the provisions of Section17 and 23 of the Insolvency Code w.e.f. January 28 2020. However the details with respectto CSR are given in Annexure-C and policy has been uploaded on the website of the Companyat www.octlindia.com under Investors>Policy Documents>CSR Policy Link.

VIGIL MECHANISM:

In terms of Section 177(9) & (10) of the Act a Vigil Mechanism for directors andemployees to report genuine concerns has been established.The Vigil Mechanism Policy hasbeen uploaded on the Website of the Company at www.octlindia.com under Investors >Policy Documents> Vigil Mechanism Policy link.

RELATED PARTY TRANSACTIONS:

The related party transactions that were entered during the financial year were on anarm's length basis and were in the ordinary course of business. There were no materiallysignificant related party transactions with the Company's Promoters Directors Managementor their relatives which could have had a potential conflict with the interests of theCompany. Transactions with related parties entered by the Company in the normal course ofbusiness are periodically placed for its omnibus approval and the particulars of contractsentered during the year as per Form AOC-2 is enclosed as Annexure-D.

The Company has adopted a policy to regulate transactions between the Company and itsRelated Parties in compliance with the applicable provisions of the Companies Act 2013and the Rules made thereunder and the Listing Agreement. This Policy was considered andapproved and has been uploaded on the website of the Company at www.octlindia.com underinvestors/ policy documents/Related Party Policy link.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9 is annexedhereto and also placed on the website of the Company at www.octlindia.com

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The details of loans guarantees and investments covered under Section 186 of the Actare given in the Notes to the Financial Statements.

REMUNERATION RATIO OF THE DIRECTORS/KEY MANAGERIAL PERSONNEL (KMP)/ EMPLOYEES:

The information required pursuant to Section 197 of the Act read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 andCompanies (Particulars of Employees) Rules 1975 in respect of employees of the Companyand Directors is furnished hereunder:

Details of the remuneration paid to Key Managerial Personnel (KMP)

Name Designation Remuneration paid during FY 2020-21 (Rs in Lakhs) Remuneration paid during FY 2019-20 (Rs in Lakhs)
1. Mr. K. Suryanarayana Executive Chairman NIL 29.71
2. Mr. Sridhar Kamineni Managing Director (KMP) NIL 29.71
3. Mr. Pudipeddi Sitaramalinga Swamy* CS (KMP) 3.15* 2.2**
4. Mr. J.Ramamuni Reddy CFO (KMP) 2.50 8.40

* Mr. Pudipeddi Sitaramalinga Swamy was appointed on 01/09/2020 as Company Secretaryand Compliance Officer.

** Ms. Priyanka Garg resigned as a Company Secretary and Compliance Officer on29/02/2020.

Particulars of Employees:

As required under the Act and Rule 5(2) & (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 there are no employees falling underthe category and thus no information is required to be given in the Report.

DEVELOPMENT AND IMPLEMENTATION OF A RISKMANAGEMENT POLICY:

The Company has been addressing various risks impacting the Company and the Policy ofthe Company on Risk Management is provided elsewhere in this Annual Report in ManagementDiscussion and Analysis.

ACKNOWLEDGEMENT:

I take this opportunity to express thanks to various departments of the Central andState Governments ONGC Oil India Limited multinational companies operating in India andabroad for oil and gas exploration and drilling the Bankers the Material Suppliers theCustomers and the Shareholders for their continued support and guidance. I wish to placeon record my appreciation for the dedicated efforts put in by the Engineers and theEmployees of the Company at all levels.

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