To the Members
OIL COUNTRY TUBULAR LIMITED
The Resolution Professional takes pleasure In presenting the 34th Annual Report of theCompany together with the Audited Statements of Accounts for the year ended 31 st March2020.
The financial performance during the period ended 31 st March 2020 is as under:
(Rs in Lakhs)
|Particulars ||2019-20 ||2018-19 |
|1. Gross Income ||1315.33 ||2810.53 |
|2. Loss Before Finance Charges and Depreciation ||2226.02 ||4802.67 |
|3. Finance Charges ||1860.96 ||1528.60 |
|4. Gross Loss ||4086.98 ||6331.27 |
|5. Provision for Depreciation ||2104.50 ||2136.61 |
|6. Net Loss Before Tax ||6191.48 ||8467.88 |
|7. Provision for Tax ||21.54 ||(-) 167.58 |
|8. Net Loss After Tax ||6213.02 ||8300.30 |
The Gross Income of the Company is Rs. 1315.33 lakhs during current financial year asagainst Rs.2810.53 lakhs during previous financial year. Though the Company had an orderbook position of Rs.53.64 crores in the year an order worth Rs.31.81 Crores was cancelledby the customer due to non-execution of the order due to non-funding by the Banks whichhad an adverse impact on the operations and led to low turnover. The Promoters of theCompany are working with the Banks for a Compromise Proposal under Section 12Aof IBC andexpect resolution during financial year 2020-21. The Company incurred liquidated damagesof Rs.425.40 lakhs due to late delivery.
The Company has orders on hand to the tune of Rs.21.10 crores. The Company expects tohave the raw material in place once the Resolution Plan submitted by the Promoters isapproved by the Committee of Creditors and by the Hon'ble NCLT latest by third quarter of2020-21.
The Company is in the business of producing casing tubing and drill pipes that areprimarily used in the Oil and Gas Sector for drilling and exploration of oil and gas. Thedemand for oil and gas is increasing every year leading to more exploration and drillingfor oil and gas reserves. The crude oil prices have been fluctuating during the year. Withthe Brent crude oil prices being volatile and in view of the Pandemic the deployment ofrigs worldwide has been decreased from 2213 to 1964 during the Financial Year. Also thenumber of rigs in operation in India are decreased from 121 to 101. The active rigs are adirect indication of low demand for the casing tubing and drill pipes used in drillingcompleting producing and processing hydrocarbons.
Further the Government of India has issued the revised Steel Policy for providingpreference to domestically manufactured iron and steel products which includes seamlesspipes covering casing tubing and drill pipes in government procurement agencies therebystrengthening the manufacturing sector. The Government has notified amendments to theGeneral Financial Rules (GFR) to ensure that goods and services valued less than Rs.200crores are being procured from domestic firms only which further strengthens domesticlocal manufacturing which is positive step for the Company since public sectorundertakings are forced to procure locally instead of global tenders.
The Company will be in a position to actively participate in the growing market for theProducts once the Resolution Plan is approved by the Hon'ble NCLT by fourth quarter of2020-21.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
As required under SEBILODR 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 CIRP. A report on theCorporate Governance is included as a part of this Annual Report. A Certificate from theStatutory Auditors of the Company M/s. G. Nagendrasundaram & Co. CharteredAccountants confirming compliance with the conditions of the Corporate Governance asstipulated under above 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 2020-21 toNSE and BSE where the Company's shares are listed.
DEMATERIALISATION OF SHARES:
96.82% of the Company's paid-up equity share capital is in demateriaiized form as on31st March 2020 and balance 3.18% is in physical form. The Company's Registrars are XLSoftech Systems Limited having their Registered Office at 3 Sagar Society Road No.2Banjara Hills Hyderabad-500034.
Number of Board Meetings held:
The Board of Directors duly met 5 (five) times during the period from 1 st April 2019till commencement of CIRR The Meetings were held on 23rd May 20198th August 201920thAugust 201911 th November 2019 and 10th January 2020.
Independent Directors Declaration:
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Act till commencement of CIRP.
RESOLUTION PROFESSIONAL'S RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 20131 hereby state and confirm thatthe Company:
a. in the preparation of the annual accounts for the year ended 31st March 2020 hasfollowed the applicable accounting standards along with proper explanation relating tomaterial 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.
The observations given by the Auditors are suitably explained in the Notes to Accountsand are self-explanatory.
i) Statutory Auditors:
M/s. G. Nagendrasundaram & Co. Chartered Accountants Hyderabad have beenappointed as the Statutory Auditors for a period of 5 years at 31st Annual General Meetinguntil conclusion of 36th Annual General Meeting subject to ratification every year atAGM.
ii) Secretarial Audit:
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 2019-20. The Secretarial Audit Report for the year ended 31st March2020 (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 and Schedule VII of the Act the Board of Directors of theCompany have constituted a CSR Committee with appropriate Directors. CSR Committee hasdeveloped a CSR Policy for healthcare and education activities which is enclosed to thisReport as Annexure-C. Additionally CSR Policy has been uploaded on the Website of theCompany at www.octlindia.com under Investors > Policy Documents > CSR Policy link.
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. The transactions with related parties entered into by the Company in the normalcourse of business were periodically placed before the Audit Committee for its omnibusapproval and the particulars of such contracts entered during the year as per Form AOC-2is enclosed to this Report as Annexure-D.
The Board of Directors of the Company has on the recommendation of the AuditCommittee adopted a policy to regulate transactions between the Company and its RelatedParties in compliance with the applicable provisions of the Act the Rules madethereunder and the Listing Agreement. This Policy which was considered and approved by theBoard has been uploaded on the Website of the Companyatwww.octlindia.com under Investors> 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.
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:
1) Details of percentage increase in the remuneration paid to Key Managerial Personnel(KMP)
|Name ||Designation ||Remuneration paid during FY 2019-20 ||Remuneration paid during FY 2018-19 ||Increase / Dec in |
| || ||(Rs Lakhs) ||(Rs Lakhs) ||(%) |
|1. Mr. K. Suryanarayana ||Executive Chairman (upto 28/01/2020) ||29.71 ||39.12 ||(-) 24.05 |
|2. Mr. Sridhar Kamineni ||Managing Director (KMP) (upto 28/01/2020) ||29.71 ||49.44 ||(-) 39.91 |
|3. Ms. Priyanka Garg* ||CS (KMP) (upto 29/02/2020) ||2.20 ||1.92 || |
|4. Mr. J. Ramamuni Reddy** ||CFO (KMP) (from 11/02/2019) ||8.40 ||1.17 || |
* Ms. Priyanka Garg was in employment of the Company during FY 2018-19 from 13/06/2018to 31/03/2019 and during FY 2019-20 from 01/04/2019 to 29/02/2020.
**Mr. J. Ramamuni Reddy is in employment of the Company during FY 2018-19 from11/02/2019 to 31/03/2019 and during FY2019- 20 from 01/04/2019 to 31/03/2020.
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. DEVELOPMENTAND IMPLEMENTATION OF ARISK MANAGEMENT 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.
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.
| ||For OIL COUNTRY TUBULAR LIMITED |
| ||Sd/- |
| ||Sisir Kumar Appikatla |
| ||Resolution Professional |
|Place: Hyderabad ||IP Registration No.lBBI/IPA-001/ |
|Date : 03.09.2020 ||IP-P00751/2017-18/11283 |