annual report - Jindal Group of Companies

Unlike other parts of the world where demand for jack up rigs have fallen, there is continuous demand for jack up rigs in Indiadue to accelerated scale of operations for redevelopment plans of our major customer, ONGC. We believe that local market wouldcontinue to give us business opportunities and growth.SEGMENT WISE PERFORMANCEThe Company has only one segment i.e. Drilling Division and related services.FUTURE OUTLOOKDespite all the financial market turmoil and global slowdown, investor sentiment in India remains bullish even though countryis experiencing inflationary pressure. Periodic interest rate hikes by RBI had negative impact on borrowings. Thus inflationarypressure coupled with rising borrowing costs had a tendency of increasing operating costs. However, with focus on improvingoperating efficiency and productivity such negative impact have been mitigated to a large extent with marginal impact on thebottom-line performance.Our primary focus will be on Drilling Services business, enabling continued value creation and growth. We will pursue strategiesthat benefit our customers and stakeholders through greater operating efficiency including new and superior technologicallyoperating assets, competitive price offerings and more productive usage of our assets.RISKS AND CONCERNSVolatility in the Crude is affecting the Charter rates. The charter rates are showing downward trends from the last year while theoperating costs haven’t, due to inflationary trend.INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACYYour company maintains adequate and effective internal control system commensurate with its size. We believe that internalcontrol system provides, among other things a reasonable assurance that transactions are executed with management authorizationand that they are recorded in all material aspects to permit preparation of financial statements in conformity with establishedaccounting principles. The Company has independent Internal Auditors who constantly evaluate Internal Controls and suggestimprovements whenever required.As highlighted in the previous year, application of ERP processes across the Organization has strengthened our decision makingprocess and to better utilization of available resources.FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCEThe Revenue of the Company during the year was Rs. 1063.53 crore as against Rs. 1200.81 crore in the previous year. The profitbefore tax was Rs. 150.19 crore during the year as against Rs. 128.10 crore in the previous year. The profit after tax was Rs. 100.84crore as against Rs. 84.14 crore in the previous year.MATERIAL DEVELOPMENTS IN HUMAN RESOURCES AND INDUSTRIAL RELATIONSDuring the year under reporting, the Company maintained excellent industry relations without any lost time due to workstoppages. During the year, the Company imparted many trainings, including safety training, to employees for upgradation ofknowledge and skills. Keeping in view the future prospects and high turnover of field crew and technicians, your Company hasrecruited fresh and experienced hands for field operations and back office support so as to ensure continuous availability ofskilled manpower. In JDIL, we take a long term view and continuously develop human resources by encouraging them to beentrepreneur so as to achieve higher performance and improved productivity.We have 602 employees and are fortunate to havea team of well qualified and dedicated professionals which is our main asset for sustaining our operational excellence in yearsto come.27