DIRECTORS' REPORT TO THE MEMBERS, Your Directors are pleased to present the 33rd Annual Report of the Company together with the Audited Statements of the Accounts for the year ended 31st March, 2014 and 31st March, 2015. 2. BUSINESS PERFORMANCE The financial year 2014-15 has been a very successful and important year for the Company. The Company's business shows impressive earnings in a year. The Company was able to capitalize on the market conditions through its operational excellence, higher efficiency and well executed strategies. Your Company has been able to achieve excellence and efficiency due to the philosophy of hard work predominantly coupled with other strategic endeavor taken by it, which has increased Company's product line and profits. Your company is continuously extending its business into export markets as well as developing perspective customers in India and abroad. Further the Company's units situated in SEZ in Noida & Kandla commence its business and play an important role to achieve the target and goal. The Company has implemented ISO-14001 and OHSAS-18001 in its plants which will further open overseas markets for the Company and also improve Health and Safety of the employees. No material changes and commitments have occurred after the close of the financial year till the date of this Report, which affect the financial position of the Company. 3. DIVIDEND Your Directors deems it appropriate to conserve its resources and disburse at appropriate time, instead of distributing same. This way your Company will be able to conserve its resources and further consolidate the funds position for your Company. The Board may consider remunerating suitably to its members at appropriate time. The decision has been formulated in accordance with the Company's policy to pay/not to pay sustainable dividend linked to long term growth objectives of the Company to be met by internal cash accruals. 4. FUTURE OUTLOOK The future outlook of the Company seems very promising because of the increase in sales of the products within and outside the country. As demand of Oil and Gas is increasing day-by-day in our country as well as overseas, the requirement of Company's products, which are directly related with Oil sector, is also increasing considerably. The Company has also implemented various quality systems which have improved quality of product and therefore acceptability of Company's product in domestic and international market has also increased considerably. This may eventually leads higher growth, turnover and profit of the company. 5. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the concerned Stock Exchanges in India, is elaborated in a separate section forming part of the Annual Report. 6. LISTING Your Company's Equity Shares are presently listed on The Bombay Stock Exchange and Delhi Stock Exchange. It is worth mentioning here that UP Stock Exchange Ltd had applied for its exist as Stock Exchange as per Clause 2.2 of the Securities and Exchange Board of India (SEBI) Circular No. CIR/MRD/DSA/14/2012 dated May 30, 2012 and the SEBI vide its Exist Order Dt. June 9th, 2015 allowed the exit of UP Stock Exchange Limited as a stock exchange. Moreover, the Delhi Stock Exchange have been de-recognized by the Securities and Exchange Board of India w.e.f. 19th November, 2014. The Company has paid the listing fees for the year 2015-2016 to Bombay Stock Exchange, where the securities of the Company are listed and stopped paying listing fee to other two stock exchanges and continue to do so in future. 7. MAJOR EVENT Amalgamation During the period under review your company has presented a Scheme of Amalgamation seeking concurrence to same from Hon'ble High Court for amalgamation of Macro Steel Engineers Pvt. Ltd. Into it. Hon'ble High Court of Delhi vide its order dated 01/05/2014 for which effective date was 25/07/2014 has sanctioned such a scheme and accordingly the transferor Company stands amalgamated. Non placing of Audited Financial Accounts for FY ended 31.03.2014, Change in Statutory Auditors and certain defaults M/s Agarwal Dhruv & Co., Chartered Accountants, ICAI Firm Registration No.: 008900N were acting as Statutory Auditors of the Company. On account of dereliction of duty on their part, a special notice for not re-appointing them was received which was duly considered by Audit Committee, read with relevant provision of Companies Act, 2013 whereupon office of Auditor was supposed to be changed in given timeframe, considering tenure of specified period, whereupon existing term too was supposed to be considered. On account of same the financials of year ended 31.03.2014 could not be placed before the members and AGM was concluded without adoption of Annual Accounts. Members had approved the appointment of M/s R S Dani & Co., Chartered Accountants to act as Statutory Auditors of the Company and said firm had accordingly completed the Audit of the affairs of your Company for FY ended 31.03.2014 besides FY ended 31.03.2015, which was task left unattended by M/s Agarwal Dhruv & Co., the erstwhile Auditors of your Company. Your management perceive same to be a material event, yet same is not repeated for the sake of brevity, as members were fully apprised as to same in Annual Report for FY ended 31.03.2014. 8. CONSOLIDATED FINANCIAL STATEMENT Your company has no joint Venture, subsidiaries and Associate companies, hence in accordance with the of Companies Act, 2013 and Accounting standard (AS) -21 no need of consolidated financial statement. 9. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES As stated above, your company has no subsidiaries, Joint Venture and Associates Companies. 10. DIRECTORS & COMMITTEE Your Board comprises of eminent, experienced and reputed Individuals from their respective fields. At the 32nd Annual General Meeting held on 11th November, 2014 the company had appointed the existing independent directors Shri S S Bhagat (DIN 00841981), Shri K.D. Aggarwal (DIN; 00861164) and Shri V.B. Mishra (DIN 00619543) as independent directors under The Companies Act, 2013 for 5 consecutive years for a term upto the conclusion of the 37th Annual General Meeting. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and as per the Clause 49 of the Listing Agreement with the concerned Stock Exchanges. At board meeting held on 28.02.2015 the board had appointed Mr. Kanal Gupta (DIN 01050505) as Additional Director and in another Board meeting held on 30.03.2015, Ms. Shruti Synghal was appointed as Additional cum women Director of the Company. In accordance with the provisions of Companies Act, 2013 Shri U S Pandey (DIN: 02877691), Non- Executive Director retires by rotation and being eligible offers himself for re-appointment. 8. CONSOLIDATED FINANCIAL STATEMENT Your company has no joint Venture, subsidiaries and Associate companies, hence in accordance with the of Companies Act, 2013 and Accounting standard (AS) -21 no need of consolidated financial statement. 9. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES As stated above, your company has no subsidiaries, Joint Venture and Associates Companies. 10. DIRECTORS & COMMITTEE Your Board comprises of eminent, experienced and reputed Individuals from their respective fields. At the 32nd Annual General Meeting held on 11th November, 2014 the company had appointed the existing independent directors Shri S S Bhagat (DIN 00841981), Shri K.D. Aggarwal (DIN; 00861164) and Shri V.B. Mishra (DIN 00619543) as independent directors under The Companies Act, 2013 for 5 consecutive years for a term upto the conclusion of the 37th Annual General Meeting. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and as per the Clause 49 of the Listing Agreement with the concerned Stock Exchanges. At board meeting held on 28.02.2015 the board had appointed Mr. Kanal Gupta (DIN 01050505) as Additional Director and in another Board meeting held on 30.03.2015, Ms. Shruti Synghal was appointed as Additional cum women Director of the Company. In accordance with the provisions of Companies Act, 2013 Shri U S Pandey (DIN: 02877691), Non- Executive Director retires by rotation and being eligible offers himself for re-appointment. voluntary secretarial standards issued by ICSI. Date of the Board Meeting held during the year are mentioned herewith. 11. CORPORATE SOCIAL RESPONSIBILITY Even though the provisions of Companies Act, 2013 regarding Corporate Social Responsibility are not attracted to the Company yet the Company has been, over the years, pursuing as part of its corporate philosophy, the key philosophy of all CSR initiatives of the Company is guided by three core commitments of Scale, Impact and Sustainability, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the Company itself in an environment of partnership for inclusive development. The Company would also undertake other need based initiatives in compliance with Schedule VII to the Act. During the year, the Company has spent Rs.2, 39, 501 (Two Lac Thirty Nine Thousand Five hundred One (around 1.77 % of the average net profits of last three financial years) on CSR activities even though the provision of section 135 of the Companies Act 2013 were not applicable to the Company during the financial year ended 31st March, 2015. 12. VIGIL MECHANISM / WHISTLE BLOWER POLICY The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes an Ethics & Compliance Task Force comprising senior executives of the Company. In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Chairman of the Audit Committee. This policy is uploaded on the website of company. 13. DIRECTORS' RESPONSIBILITY STATEMENT For Financial Year ended 31.03.2014 and 30.03.2015, your Directors' state that: Pursuant to Section 134 of the Companies Act, 2013, the Directors confirm that: a. In the preparation of the accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; b. Appropriate accounting policies have been selected and applied consistently and have made judgement and estimates that are reasonable and prudent so as to give a true and fiar view of the state of affairs of the Company as at 31st March, 2014 and 31st March, 2015 and of the profit of the Company for the financial year ended 31st March, 2014 and 31 March 2015. c. Proper ad sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provision of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. d. The Annual Accounts have been prepared on a going concern basis; e. Internal financial controls have been laid down to be followed by the Company and such internal financial controls are adequate and were operating effectively; f. Proper system has been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 14. BUSINESS RESPONSIBILITY REPORT As stipulated under the Listing Agreement, the Business Responsibility report describing the initiatives taken by the Company from environmental, social and governance perspective is to be attached as part of the Annual Report. It is not mandatory for your company. 15. RELATED PARTY TRANSACTIONS There were no contracts or arrangements entered into by the company requiring compliance as enshrined in section 188 of the Companies Act, 2013 during the financial year 2014-15. However, during the financial year 2013-14, there was a related party transaction with Macro Steel Engineers Ltd for which your company had aleady obtained approval form Regional Director northern region under section 297 of Companies Act, 1956. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons during financial year 2014-15 which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Your Directors draw attention of the members to Note 11(B) to the financial statement which sets out related party disclosures. 16. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. The Management is satisfied that the company has complied with all legal requirements as applicable to the Company for the Financial Year ended 31st March, 2015. 17. INTERNAL FINANCIAL CONTROLS The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed. 18. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Shri U.S. Pandey, Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible have offered himself for re-appointment. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges. The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of the non-executive directors and executive directors. The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are uploaded on the website of the Company. Furthermore, pursuant to provisions of Section 203 of the Companies act, 2013 the board had nominated below stated persons as KMP Mr. Pramod Kumar Gupta - CMD Mr. Pramod Kumar Ojha - Company Secretary 19. AUDITORS 19.1 STATUTORY AUDITORS M/s R S Dani & Co., Chartered Accountants were appointed to act as such by members in 32nd AGM consequent upon M/s Agrawal Dhruv & Company, the erstwhile Chartered Accountants and the Statutory Auditors of the Company, retiring and not been re-appointed at the conclusion of 32nd AGM basing on the basis of Special Notice received under Section 140 (4) read with Section 115 of the Companies Act, 2013 recommending appointment of M/s R S Dani & Co., Chartered Accountants, stating that M/s Agarwal Dhruv & Company shall not be re-appointed as Statutory Auditors of the Company, which was complied as per applicable procedures. The Board has accordingly recommended appointment of R S Dani & Co., Chartered Accountants as Statutory Auditors for a period of five consecutive years which was approved by members in last AGM. Consequent upon non placing of financials for FY ended 31.03.2014 within scheduled time, the Company ran into defaults of various nature, which would be addressed separately, the Financials for year ended 31.03.2014 were placed before Statutory Auditor M/s R S Dani & Co., and audit for said period was completed by them, besides Audit of Financials for FY ended 31.03.2015. Accordingly a audit report alongwith financials as on 31.03.2014 & 31.03.2015 are being placed before the members for their consideration and adoption. Furthermore as the appointment was done for a period of five years, as stipulated under provisions of Chapter X of The Companies Act, 2013 read with applicable rules, subject to ratification by members at every consequent Annual General Meeting, hence ratification of appointment of Statutory Auditors is being sought from the members of the Company at the ensuing AGM. M/s. R S Dani & Co., Chartered Accountants, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. The Notes on financial statement referred to in the Auditors' Report for either of the years are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. 19.2 SECRETARIAL AUDITORS Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s Balraj Sharma & Assicuates, Company Secretaries, New Delhi to undertake the secretarial audit of the Company, which was approved by members in 32nd AGM. The Secretarial Audit Report is annexed herewith as 'Annexure 1'. The Notes referred in the Secretarial Auditors' Report for the year ended 31st March, 2015 are self-explanatory and the not call for any further comments. The Auditors' Report does not contain any qualifications, reservations or adverse remarks. 19.3 INTERNAL AUDITORS Consequent upon existence of provisions of Section 138 of the Companies Act, 2013, Mr. Vishnu Singh who is having vast experience in finance and Accounts was appointed to perform the duties of internal auditor of the company and their report is reviewed by the audit committee from time to time. The Report of Internal Auditors does not contain any qualification, reservation or adverse remark. 20. CORPORATE GOVERNANCE The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI for statutory and non statutory clauses as well. The Company duly comply with the various provisions under different clauses of listing agreement of the stock exchange(s). In pursuabce if Clause 49 of the listing agreement in respect to Corporate Governance the company duly complies and submitted a quarterly report to the stock exchanges on each occasion. The company has also followed the Corporate Governance practices, which enables to maintain transparency and serve the long-term interest of the Shareholders. The Consolidated Management Discussion and Analysis Report as well as report on Corporate Governance as of 31.03.2014 & 31.03.2015 are attached hereto as a part of this Annual Report as Annexure-A. 20.1 DETAILS PERTAINING TO EMPLOYEES AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 STATEMENT OF PARTICULARS OF EMPLOYEES PURSUANT TO PROVISIONS OF SECTION 197(12) OF THE COMPANIES ACT 2013 READ WITH COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 The key parameters for the variable component of remuneration availed by the directors are considered by the Board of Directors based on the recommendations of the Nomination and Remuneration Committee as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year - Not Applicable; and It is hereby affirmed that the remuneration paid is as per the as per the Renumeration Policy for Directors, Key Managerial Personnel and other Employees. 21. DEMATERIALISATION OF EQUITY SHARES Your company is registered with CDSL & NSDL for dematerialization and Company's ISIN Number is INE961D01019. M/s Alankit Assignments Ltd. Is acting as its agent for demat and other related requests for its equity shares. 22. HUMAN RESOURCES DEVELOPMENT The Company continues to enjoy cordial and warm relations with the employees and executives at all levels. Special training programme, workshop, seminar etc. were continued during the year with a focus towards infusion of technical skills and quality consciousness in order to improve productivity, efficiency and quality and latest technology of the Company. 23. INDUSTRIAL RELATIONS The industrial relation among all the employees within the organization was cordial. The employees maintained highest level of discipline, decency for the growth of the organization. 24. ECOLOGY & SAFETY CERTIFICATE Company has taken adequate provisions for ecology and safety of plant, building and manpower's welfare activities. 25. EXTRACT OF ANNUAL RETURN In pursuant to provision of section 92(3) of the companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014 the Extract of Annual Return as on the Financial year ended 31st March, 2015 in Form No. MGT-9 is given below: I. REGISTRATION AND OTHER DETAILS i) CIN:- L29199DL1985PLC015796 ii) Registration Date: 24.05.1985 iii) Name of the Company: United Drilling Tools Limited iv) Category/Sub-Category of the Company: Company having Share Capital v) Address of the Registered Office and Contact Details: B-94, Shashi Garden, Patparganj, Delhi-110090, Telephone No. 0120-4842400 vi) Whether listed Company: Yes vii) Name, Address and Contact Details of Registrar and Transfer Agent, if any: Alankit Assignments Limited, 1E/13, Alankit Heights, Jhandewalan Extension, New Delhi-110055 Tel. No. 011-42541956 26. CONSERVATION OF ENERGY Your company does not fall under the list of industries which are required to furnish information in respect of conservation of energy yet the company has taken due measures to control the wastages of energy and lights power as energy conservation dictates how efficiently a company can conduct its operations. The other particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided elsewhere in this Report. 27. RESEARCH AND DEVELOPMENT (a) Specific area on which R&D is carried out by the company: The Company carried out R&D for the purpose of new product development. Import substitution as well as for development and evaluation of alternate processes and raw materials. (b) Benefit derived as a result of the above R&D: R&D provides valuable support to the business through innovation of new products and processes, many of which have been transferred to the plant, R&D results in improvement of quality and reduction in cost. (c) Future plan of action: New R&D is being established for developing & improving existing as well as new products. (d) Expenditure on R&D: Expenditure on R&D has been charged under primary heads of account. 28. TECHNOLOGY ABSORPTION, ADAPTION & INNOVATION Your Company continuously keep on adapting new technology relating to manufacturing of oil drilling equipments and tools attending seminars, conferences and interactions with foreign suppliers and collaborators. This helps the Company in absorbing, adapting and innovating new technology. 30. GENERAL Your Board state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Details relating to deposits covered under Chapter V of the Act. 2. Issue of equity shares with differential rights as to dividend, voting or otherwise. 3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme. 4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries. 5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION PROHIBITION & REDRESSAL) ACT, 2013 The Company has in place an Anti Sexual Harassment Policy in the line with the requirement of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding Sexual Harassment. All employees (permanent, contractual, temporary, trainees) are covered under his policy. The following is a summary of Sexual Harassment complaints received and disposed off during the year 2014-15. No. of complaints received : NIL No. of complaints disposed off: NIL 31. ACKNOWLEDGEMENT Your directors wish to place on record their appreciation for the continued support of the customers, financial institutions and suppliers. Your directors also wish to record the appreciation for the valuable contribution made by employees at all levels and the continued support of various other associates. On behalf of the Board, I would like to convey to our Hon'ble members that over the years your deep and abiding trust and invaluable support has unable us to continuously improve our performance despite extremely challenging time in the recent past where in sourcing Raw materials /components at competitive prices have became an arduous task and further hope they will continue to give their support in full spirit in the years to come. By Order of the Board of Directors sd/- (PRAMOD KUMAR GUPTA) CHAIRMAN & MANAGING DIRECTOR DIN:00619482 Regd. Office: B-94, Shashi Garden Patparganj, Delhi-110091 Dated: 08.08.2015 |