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Notes to Accounts of United Drilling Tools Ltd.

Mar 31, 2015

1) Contingent Liabilities not provided for :

i. Counter guarantees against Bank guarantees given by banks Rs.6,95,59,178/- (Pr. Yr. Rs.3,06,01,470/-).

ii. Bill discounted by bank Rs.NIL (Pr. Yr. Nil) .

2) (i) In the opinion of the Board the Current Assets, Loans and Advances are approximately of the value as stated in Financial Statements, if realized in the ordinary course of business.

(ii) The provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.

(iii) Balances of Debtors, Creditors and Loan and Advances are subject to confirmation.

(iv) Previous Year's figures has been regrouped and rearranged wherever necessary.

3) In note 18 purchases include Rs.9,67,90,835/- (previous years Rs.102,923,234/-) purchases of trading materials.

The deferred tax liability required at the year end is Rs.1,08,35,043/-, the difference between opening liability and closing liability is charged to Profit & Loss a/c (liability) Rs.75,39,693/- after adjustment of the effect of merger of MSEPL.

5) Preferential Share holders in their meeting held on 09-11-2013 has waived their right to claim the dividend on preferential share for the period from 1.4.2013 to 31.3.2014, i.e. for financial Year 2013-14. Therefore provision for dividend on preferential shares for the year has not been made and dividend not declared.

6) Scheme of Amalgamation

I. A Scheme of Amalgamation was framed under the provisions of sections 391 and 394 of the Companies Act, 1956, and other applicable provisions, if any, for amalgamation of Macro Steel Engineers Pvt. Ltd. (MSEPL) (the Transferor Company) with United Drilling Tools Ltd (the Transferee Company).

II. Salient features of the Scheme of Amalgamation are as follows:

a. All assets and liabilities including Income Tax and all other statutory liabilities, if any, of the Transferor Company will be transferred to and vest in the Transferee Company.

b. All the employees of the Transferor Company in service on the Effective Date, if any, shall become the employees of the Transferee Company on and from such date without any break or interruption in service and upon terms and conditions not less favorable than those subsisting in the Transferor Company on the said date.

c. Appointed Date for amalgamation is 1st Oct. 2013.

d. The Transferee Company will issue 2 (Two) Equity Shares of Rs.10 each, credited as fully paid-up, of the Transferee Company - United Drilling Tools Ltd. for every 9 (nine) Equity Shares of Rs.10 each held in the Transferor Company- Macro Steel Engineers Pvt. Ltd.

e. Any fraction of share arising out of the aforesaid share exchange process, if any, will be rounded off to nearest whole number.

III. The aforesaid Scheme of Amalgamation was approved by the Hon'ble High Court of Delhi vide its order dated 1st May, 2014 and revised 25th Day of November 2014. The Scheme became effective on 25th July, 2014, being the date of filing of the High Court Order with the ROC. Since the Scheme is operative from the Appointed Date, 1st Oct., 2013, effect of the scheme of merger has been given in the present audited accounts of financial year 2013-14. Accordingly, the present audited accounts has been made incorporating the year end balance i.e. balances as on 31.3.2014 of transferor company MSEPL in the Balance Sheet of the Transferee Company including the balances of profit & loss a/c and reserves.

IV. The Transferee Company is engaged in manufacturing of drilling tools and equipments for oil drilling & exploration industry and other related activities. Whereas, prior to the Scheme of Amalgamation, the Transferor Company was engaged in manufacturing and Research & Development of Slickline and electricline units, wire line winches and components of high tech equipments for oil drilling & exploration and production industry .

V. In terms of the Scheme of Amalgamation, the Transferee Company will issue 48,22,222 Equity Shares of Rs.10 each, credited as fully paid-up, to the Shareholders of the Transferor Company, in exchange of 100% Equity Share Capital of the Transferor Company after cancellation of cross holding, if any, which is Nil.

The aforesaid Shares to be issued by the Transferee Company have been disclosed under the head "Shares to be issued pursuant to the Scheme of Amalgamation" in the Balance Sheet.

VI. Amalgamation of Transferor Company with the Transferee Company has been accounted for under the Pooling of Interests Method as per Accounting Standard-14 (AS-14) as prescribed under the Companies (Accounting Standards) Rules, 2006. Accordingly, all the assets, liabilities and reserves of each of the Transferor Company have been recorded in the Company's books at their existing carrying amounts and in the same form. Inter-company balances, if any, stand cancelled.

VII. The following accounting treatment has been given to some of the issues pertaining to the Scheme:

Deficit of Rs.16,87,77,780 arising out of amalgamation being difference between pre-merger paid up Share Capital of the Transferor Company and paid-up value of new Equity to be issued by the Transferee Company on amalgamation, has been adjusted in the Capital Reserve Account in the books of the Transferee Company.

7) Employee Benefit Obligations

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans. The contribution of PF is Rs.11,03,820/- (Pre. Yr. Rs.5,87,326/-)

b) Defined Benefit Plan

The Company make payment to vested employees at retirement, death while in employment or on termination of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months as per provisions of Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of service. The Gratuity liability is provided in the books amounting to Rs.11,09,917/- (Previous Year Rs.8,14,657/-) on actuarial liability basis as on the date of balance sheet. It is non funded.

c) Other Long Term Employee Benefits

Liability of Leave Encashment is provided in the books of account amounting to Rs.1,45,736/- (Previous Year Rs.1,54,630/-) on actual calculation basis as on balance sheet date. It is non funded.

8) The figures for the previous year have been regrouped and rearranged wherever found necessary to make them comparable with those of current year.

9) (i) The company has not provided depreciation on Intangible Assets acquired on amalgamation of MSEPL for which company is doing further research to adapt the technology in enhanced recovery of oil from low performing oil well globally.

(ii) The provision for taxation has been made after considering the benefits available to EOU and SEZ units under Income Tax Act.

10. DISCLOSURES UNDER ACCOUNTING STANDARDS (A) SEGMENT REPORTING

(a) Primary Segment Reporting

(i) The Company is engaged in only one business segment hence no segment reporting required.


Mar 31, 2013

1) Contingent Liabilities not provided for:

i. Counter guarantees against Bank guarantees given by banks Rs. 3,06,01,470/- ( Pr. Yr. Rs. 2,59,31,062/-)

2) In the opinion of the Board the Current Assets, Loans and Advances are approximately of the value as stated in Financial Statements, if realized in the ordinary course of business. The provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.

3) Balances of Debtors, Creditors and Loan and Advances are subject to confirmation.

4) Preferential Share holders in their meeting held on 18.03.2013 has waived their right to claim the dividend on preferential share for the period from date of issue to 31.3.2013, i.e. for financial Year 2012-13. Therefore provision for dividend on preferential shares has not been made and dividend not declared.

5) Employee Benefit Obligations

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and- Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans. The contribution of PF is Rs. 5,87,326/- ( Pre. Yr. Rs. 6,68,405/-)

b) Defined Benefit Plan

The Company make payment to vested employees at retirement, death while in employment or on termination of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months as per provisions of Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of service. The Gratuity liability is provided in the books amounting to Rs. 8,14,657/- ( Previous Year Rs. 9,14,872/-) on actual liability basis as on the date of balance sheet. It is non funded.

c) Other Long Term Employee Benefits

Liability of Leave Encashment is provided in the books of account amounting to Rs. 1,54,630/- (Previous Year Rs. 1,90,685/-) on actual calculation basis as on balance sheet date. It is non funded.

6) The figures for the previous year have been regrouped and rearranged wherever found necessary to make them comparable with those of current year.

6A) The company has not provided depreciation on Intangible Assets acquired on amalgamation as the company is doing further research to adapt the technology in enhanced recovery of oil from low performing oil well globally.

7) Financial Derivative Instruments

8. DISCLOSURES UNDER ACCOUNTING STANDARDS

(A) SEGMENT REPORTING

(a) Primary Segment Reporting (By Business Segments)

(i) The Company is engaged in engineering segments only.


Mar 31, 2012

1) Contingent Liabilities not provided for :

i. Counter guarantees against Bank guarantees given by banks Rs. 2,59,31,062/- ( Pr. Yr. Rs. 62,36,515/-)

2) In the opinion of the Board the Current Assets, Loans and Advances are approximately of the value as stated in Financial Statements, if realized in the ordinary course of business. The provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.

3) Balances of Debtors, Creditors and Loan and Advances are subject to confirmation.

4) Scheme of Amalgamation

I. A Scheme of Amalgamation was framed under the provisions of sections 391 and 394 of the Companies Act, 1956, and other applicable provisions, if any, for amalgamation of P & K Hightech Systems Pvt Ltd (the Transferor Company) with United Drilling Tools Ltd (the Transferee Company).

A. Salient features of the Scheme of Amalgamation are as follows:

a. All assets and liabilities including Income Tax and ail other statutory liabilities, if any, of the Transferor Company will be transferred to and vest in the Transferee Company.

b. All the employees of the Transferor Company in service on the Effective Date, if any, shall become the employees of the Transferee Company on and from such date without any break or interruption in service and upon terms and conditions not less favorable than those subsisting in the Transferor Company on the said date.

c. Appointed Date for amalgamation will be 1st April, 2011.

d. The Transferee Company will issue 79 (seventy nine) Equity Shares of Rs. 10 each, credited as fully paid-up, of the Transferee Company for every 200 (two hundred) Equity Shares of Rs. 10 each held in the Transferor Company- P & K Hightech Systems Pvt Ltd.

e. The Transferee Company will issue 115 (one hundred fifteen) 12% Cumulative Compulsory Redeemable Preference Shares of Rs. 100 each, credited as fully paid-up, of the Transferee Company, for every 1,000 (one thousand) Equity Shares of Rs. 10 each held in the Transferor Company- P & K Hightech Systems Pvt Ltd.

f. Any fraction of share arising out of the aforesaid share exchange process, if any, will be rounded off to nearest whole number.

III. The aforesaid Scheme of Amalgamation was approved by the Hon'ble High Court of Delhi vide its order dated 6th March, 2012. The Scheme became effective on 6th June, 2012, being the date of filing of the High Court Order with the ROC. Since the Scheme is operative from the Appointed Date, 1sl April, 2011, it has been given effect to in the present audited accounts.

Accordingly, the present audited accounts are consisting of financial figures of the Transferee Company as well as financial figures of the Transferor Company.

IV. The Transferee Company is engaged in manufacturing of drilling tools and equipments for oil drilling & exploration industry and other related activities. Whereas, prior to the Scheme of Amalgamation, the Transferor Company was engaged in manufacturing of gas lift systems and other high tech equipments for oil drilling & exploration industry and other related activities.

V. In terms of the Scheme of Amalgamation, the Transferee Company will issue 34,38,791 Equity Shares of Rs. 10 each, credited as fully pafd up, and 10,01,167 12% Cumulative Compulsory Redeemable Preference Shares of Rs. 100 each, credited as fully paid-up, to the Shareholders of the Transferor Company, in exchange of 100% Equity Share Capital of the Transferor Company after cancellation of cross holding, if any.

The aforesaid Shares to be issued by the Transferee Company have been disclosed under the head "Shares to be issued pursuant to the Scheme of Amalgamation" in the Balance Sheet.

VI. Amalgamation of Transferor Company with the Transferee Company has been accounted for undar the Pooling of Interests Method as per Accounting Standard-14 (AS-14) as prescribed under the Companies (Accounting Standards) Rules, 2006. Accordingly, all the assets, liabilities and reserves of each of the Transferor Company have been recorded in the Company's books at their existing carrying amounts and in the same form. Inter-company balances, if any, stand cancelled.

VII. The following accounting treatment has been given to some of the issues pertaining to the Scheme:

Deficit of Rs. 4,74,46,610 arising out of amalgamation being difference between pre-merger paid up Share Capital of the Transferor Company and paid-up value of new Equity and Preference Shares to be issued by the Transferee Company on amalgamation, has been adjusted in the Securities Premium Account in the books of the Transferee Company.

5) Employee Benefit Obligations

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans. The contribution of PF is Rs. 6,68,405/- ( Pre.Yr. Rs. 4,08,155/-)

b) Defined Benefit Plan

The Company make payment to vested employees at retirement, death while in employment or on termination of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months as per provisions of Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of service. The Gratuity liability is provided in the books amounting to Rs. 9,14,872/- ( Previous Year Rs 9,18,373/- ) on actual liability basis as on the date of balance sheet. It is non funded.

c) Other Long Term Employee Benefits

Liability of Leave Encashment is provided in the books of account amounting to Rs. 1,90,685/ - (Previous Year Rs. 1,88,154/-) on actual calculation basis as on balance sheet date. It is non funded.

6) Since the Scheme of Amalgamation has been given effect to in the current year accounts, the current year's figures are not comparable with that of previous year.The figures for the previous year have been regrouped and rearranged wherever found necessary to make them comparable with those of current year.

6A) The company has not provided depreciation on Intangible Assets acquired on amalgamation as the company is doing further research to adapt the technology in enhanced recovery of oil from low performing oil well globally.


Mar 31, 2010

1) Contingent Liabilities not provided for :

i. Counter guarantees against Bank guarantees given by banks Rs. 1,41,94,482/- ( Pr. Yr. Rs. 1,07,06,295/- )

2) In the opinion of the Board the Current Assets, Loans and Advances are approximately of the value as stated in Financial Statements, if realized in the ordinary course of business. The provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.

3) Balances of Debtors, Creditors and Loan and Advances are subject to confirmation.

4) Employee Benefit Obligations

a) Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans.

b) Defined Benefit Plan

The Company make payment to vested employees at retirement, death while in employment or on termination of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months as per provisions of Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of service. The Gratuity liability is provided in the books amounting to Rs. 10,33,752/- ( Previous Year Nil) on actual liability basis as on the date of balance sheet. It is non funded.

c) Other Long Term Employee Benefits

Liability of Leave Encashment is provided in the books of account amounting to Rs. 1,21,000/- (Previous Year - Nil) on actual calculation basis as on balance sheet date. It is non funded.

5) The figures for the previous year have been regrouped and rearranged wherever found necessary to make them comparable with those of current year.

6. DISCLOSURES UNDER ACCOUNTING STANDARDS (A) SEGMENT REPORTING

(a) Primary Segment Reporting (By Business Segments)

(i)The Company is engaged in engineering segments only.

 
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