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Oil Country Tubular Ltd.

BSE: 500313 Sector: Metals & Mining
BSE 00:00 | 25 Jun 19.05 -0.95






NSE 00:00 | 25 Jun 19.10 -0.95






OPEN 20.30
52-Week high 66.85
52-Week low 16.90
Mkt Cap.(Rs cr) 84
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 20.30
CLOSE 20.00
52-Week high 66.85
52-Week low 16.90
Mkt Cap.(Rs cr) 84
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

The Directors have pleasure in presenting before you the 31st Annual Report of theCompany together with the Audited Statements of Accounts for the year ended 31st March2017.


The performance during the period ended 31st March 2017 has been as under:

(Rs. in lakhs)
S.No. Particulars 2016-17 2015-16
1 Gross Income 1268.04 16412.03
2 Profit/ (Loss) Before Interest and Depreciation (5899.66) 2804.76
3 Finance Charges 1829.25 1731.00
4 Gross Profit/(Loss) (7728.91) 1073.76
5 Provision for Depreciation 2239.67 2323.46
6 Net Loss Before Tax (9968.58) (1249.70)
7 Provision for Tax (1572.69) (589.93)
8 Net Loss After Tax (8395.89) (659.77)
9 Balance of Profit brought forward - -
10 Balance available for appropriation (8395.89) (659.77)
11 Transfer to General Reserve 8395.89 659.77


The Company achieved a turnover of Rs. 12.68 Crores only as againstrs. 164.12 Croresduring the previous year. The very low turnover was due to the lockout of the Works for aperiod of two quarters. The lockout declared on Feb 22 2016 was lifted on August 29 2016with improvement in the workmen situation. The Company lost major orders for Drill PipeCasing and Tubing during the period for which the Tenders are floated in the previousyear.

The Company was not able to effectively participate in the Tenders as the delivery iscritical and time bound with provision of liquidated damages for default on deliveries.

With the commencement of the Operations from September 2016 the Company submitted itsbids for the Tenders floated which normally take four to six months for thetechno-commercial evaluation and placement of Orders. The Company expects placement ofOrders against these Tenders during the year 2017-18.


Considering the evaluation process of the Tenders submitted the Company expects toreceive Orders during the current year and is hopeful of achieving a turnover of Rs. 100Crores in the remaining period and gradually increase its turnovers in the coming years.

Much of the Oil and Gas Industry has survived an especially tough few years with weakdemand and low prices. The Worldwide Rig Count as of March 312017 stood at 1985 ascompared to 1551 as of March 312016. Rig Count in the US is on the rise since the middleof 2016. With the increase in the deployment of Rigs for both Oil and Gas and the increasein the crude oil prices averaging at 50 USD/ barrel the requirement of Drill PipesCasing and Tubing have started to gradually increase.

The Exploration and Drilling activities in India continue to remain at steady levelsirrespective of the Crude Oil prices and the number of Rigs deployed is around 115. Moredrilling and exploration activities are expected with the rise in the Crude Oil pricesthereby leading to an increase in the requirement of the Tubula.

The Government of India issued Notification No.7/2017-Customs (ADD) dated 17thFebruary 2017 imposing Anti-Dumping Duty on the tubular products originating from China.Minimum Import Prices have been imposed on the Casing Tubing and Drill Pipe and othertubular products to protect the Domestic Industry from injury. The ADD is applicable forfive years which will help the Domestic Industry in the International Competitive Bidsfloated by Oil And Natural Gas Corporation Limited and Oil India Limited.

Further Government of India under its Make in India Policy is formulating rules andprocedures to give a push to the domestic industry. Government of India is expected toannounce major policy changes involving compulsory value addition - mandating andincentivizing use of local components in every industry and every procurement area whichincludes Oil and Gas Sector.

Both proposals viz. price preference and value addition are part of the larger plan ofGovernment of India to boost production in India by Indian companies. These policydecisions are being taken by the Government to further accelerate ‘Make in India'mission. The proposals will prepare the ground for bringing in an ‘India First' or‘Buy Indian' thus giving a tremendous push to the domestic industry includingOil and Gas.


As required under Regulations of the SEBI (Listing Obligations & DisclosureRequirements) Regulations2015 the Management Discussion and Analysis Report is enclosedas a part of this report.


Your Company has taken adequate steps to adhere to all the stipulations laid down inReg. 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.A report on Corporate Governance is included as a part of this Annual Report. Certificatefrom the Statutory Auditors of the company M/s. C K S Associates Chartered Accountantsconfirming the compliance with the conditions of Corporate Governance as stipulated underabove regulation is included as a part of this report.


The Company confirms that it has paid the Annual Listing Fees for the year 2017-18 toNSE and BSE where the Company's Shares are listed.


91.09% of the company's paid up Equity Share Capital is in dematerialized form ason 31st March 2017 and balance 8.91% is in physical form. The Company's Registrarsare M/s XL Softech Systems Ltd. having their registered office at 3 Sagar Society RoadNo.2 Banjara Hills Hyderabad-500 034.

Number of Board Meetings held:

The Board of Directors duly met 5 times during the financial year from 1st April 2016to 315t March 2017. The dates on which the meetings were held are as follows: 26th May2016 28th July 2016 1st September 2016 10th November 2016 and 9th February 2017.


Appointment by rotation:

In accordance with the provisions of the Companies Act 2013 read with the Articles ofAssociation of the Company Mrs. K Indira Director of the Company will retire by rotationat this meeting and being eligible has offered herself for re-appointment.

Independent Directors Declaration:

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013.


Pursuant to Section 134(5) of the Companies Act 2013 Directors of your Company herebystate and confirm that:

a) in the preparation of the annual accounts for the year ended 31st March 2017 theapplicable accounting standards have been followed along with proper explanation relatingto material departures;

b) they have 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 theProfit/(Loss) of the company for the same period;

c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls in the company that are adequate andwere operating effectively.

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


Auditors' observations are suitably explained in notes to the Accounts and areself-explanatory.


i) Statutory Auditors:

The Auditors M/s. C K S Associates Chartered Accountants Hyderabad will be completingtheir tenure of ten years upon conclusion of 31st Annual General Meeting. In accordance toSection 139 (2) (b) of the Companies Act 2013 no listed company shall appoint orreappoint an audit firm as auditor for more than two terms of five consecutive years.

The Board of Directors in their 186"1 meeting held on 25lh May 2017 have approvedthe appointment of M/s.G.Nagendra Sundaram & Co. Firm Registration No.005355S andMembership No.050283 having office at Flat No.B-502 Pasha Court 6-3-680 SomajigudaHyderabad-500 082 as Auditors for a period of five years subject to approval of theshareholders.

ii) Cost Auditors:

M/s. Sagar & Associates Cost Accountants were appointed as Cost Auditors forauditing the cost accounts of your Company for the year ended 31st March 2017 by theBoard of Directors. The Cost Audit Report for the year 2015-16 has been filed under XBRLmode within the due date of filing.

iii) Secretarial Audit:

Ms. Manjula Aleti Practicing Company Secretary in practice was appointed asSecretarial Auditor to conduct the Secretarial Audit of the Company for the year 31stMarch 2017 as per the section 204 of the Companies Act 2013 read with Rule 9 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theSecretarial Audit Report for the year ended 31st March 2017 (in Form MR-3) submitted byCompany Secretary in Practice is enclosed as a part of this report Annexure-A.


Information required under section 134(3)(m) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014 is given in the Annexure-B to this report.


In terms of section 135 and Schedule VII of the Companies Act 2013 the Board ofDirectors of your Company have constituted a CSR Committee. The Committee comprises of allIndependent Directors. CSR Committee of the Board has developed a CSR Policy under Healthcare and Education activities which are enclosed as part of this report Annexure-C.Additionally the CSR Policy has been uploaded on the website of the Company under investors/ policy documents/CSR Policy link.


In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of under investors/policy documents/Vigil Mechanism Policy link.


Related party transactions that were entered during the financial year were on an arm'slength 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 before the Audit Committee for its omnibus approval andthe particulars of contracts entered during the year as per Form AOC-2 is enclosed asAnnexure-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 Companies Act 2013 theRules thereunder and the Listing Agreement. This Policy was considered and approved by theBoard has been uploaded on the website of the Company under investors/policy documents/Related Party Policy link.


The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as Annexure-E.


Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.


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

1) Details of percentage increase in the remuneration paid to Key ManagerialPersonnel (KMP)

S. No Name Designation Remuneration paid FY 2016-17 Remuneration paid FY 2015-16 Increase in (%)
(Rs. in lakhs) (Rs. in lakhs)
1 Mr. K. Suryanarayana Executive Chairman 39.12 39.12 0
2 Mr. Sridhar Kamineni Managing Director (KMP) 49.44 49.44 0
3 Mr. Ch. Venkata Sastry CFO (KMP) 8.46 8.46 0
4 Ms. Ramya Inala CS (KMP) (Resigned on 31-03-2017) 1.76 - 0

2) Particulars of Employees:

As required under the provisions of Companies Act 2013 and Rule 5(2) and 5 (3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 there are noemployees falling under the category thus no information is required to be given in thereport.


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.


Directors take this opportunity to express their thanks to various departments of theCentral and State Government ONGC Oil India Limited Multinational Companies operatingin India and Abroad for Oil and Gas Exploration and Drilling Bankers Material SuppliersCustomers and Shareholders for their continued support and guidance.

The Directors wish to place on record their appreciation for the dedicated efforts putin by the Engineers and Employees of the Company at all levels.

By Order of the Board of Directors
For Oil Country Tubular Limited
Place: Hyderabad K SURYANARAYANA
Date : 25.05.2017 Chairman