Mar 31, 2018
Dear Shareholders,
The Directors take pleasure in presenting their Ninety Fifth Annual Report on the operations of the Company together with audited accounts for the year ended 31st March, 2018.
Amount (Rs. in Crores)
Year ended 31s1 March, 2018 |
Year ended 31s1 March, 2017 |
|||
The Accounts before charging depreciation show a profit of |
|
154.17 |
158.40 |
|
From which has been deducted Depreciation (Net) Provision for Taxation Other Comprehensive Income(OCI) |
7.62 50.53 (2.61) |
55.54 98.63 |
7.37 48.83 2.11 |
58.31 100.09 |
To which is added the balance brought forward from the last accounts of |
|
545.99
644.62 |
508.11 608.20 |
|
The Directors have transferred to General Reserve |
|
- |
- |
|
Leaving a balance of |
|
644.62 |
608.20 |
|
The Directors have paid Interim Dividend @ 1500% for 2017-18 (p.y. 1000%) on the Ordinary Shares amounting to |
|
26.13 |
17.43 |
|
The Directors have paid final dividend @ 2000% for 2016-17 (p.y. 1750%) on the Ordinary Shares amounting to |
|
34.85 |
30.49 |
|
Tax on Dividend |
|
11.59 572.05 |
9.75 550.53 |
|
To which is added OCI adjustment and Tax thereon |
|
1.70 |
(2.84) |
|
Leaving a balance to be carried forward |
|
573.75 |
547.69 |
PERFORMANCE AND STATE OF COMPANYâS AFFAIRS
Your Company has completed another year of satisfactory performance by achieving a turnover of Rs. 1291.64 crores (net of discount and rebates Rs. 1112.12 crores), compared to Rs. 1317.29 crores (net of discount and rebates Rs. 1132.02 crores) in the previous year, a decrease of 1.95%. Notwithstanding the sluggishness in the lubricant industry, due to continuing advancement of engine design and presence of long-drain lubes, the volume of sales recorded a satisfactory growth primarily due to continuing focus on the bazaar segment, specially in the premium and emerging product categories. Notwithstanding fierce competition from multinationals and other new entrants in the lube market your Company could forge ahead with drive and initiative to consolidate its position. However, cost of inputs continued to rise during the year which led to greater pressure on the margins.
Despite the above, it is indeed a matter of pride that the Profit before Tax (PBT) was Rs. 146.55 crores in comparison to a PBT of Rs. 151.03 crores in the preceding year.
The brand equity of the Companyâs products built up painstakingly over the years has been further strengthened with higher thrust on promotional activities in the face of growing competition. The effort of brand building has helped the Company create a ânicheâ for its products even in a difficult business environment. Your Company had been able to continue its tie-up with few Original Equipment Manufacturers (OEMs) with a view to reinforce its value proposition.
The Companyâs Plants at Silvassa, T urbhe, Oragadam, Ramkristopur and Faridabad are accredited under ISO 9001:2015 for quality standards. The Silvassa and Oragadam Plants had obtained accreditation under ISO 14001:2015 for environmental standards. The support provided by the Companyâs accredited R&D Centers have helped in improving the quality of products and upgrading product formulation.
Your Companyâs products primarily marketed under the âVEEDOLâ brand name are well established and accepted in the industry for their quality and range. The Joint Venture Company (JVC) viz. JX Nippon TWO Lubricants India Private Limited (JXTL), wherein your Company and JXTG Nippon Oil & Energy Corporation (formerly JX Nippon Oil & Energy Corporation), Japan, have 50:50 stake, continues to undertake marketing of the âENEOSâ brand of products in India. The production facilities, warehousing, logistic and other ancillary support continue to be extended by your Company to the JVC. Details of performance of this joint venture are stated in the later part of the report.
BRAND âVEEDOLâ
With the acquisition of Veedol International Limited, the Company got the global rights to a wide portfolio of registered trademarks for the master brand âVEEDOLâ as well as its associate product sub-brands and iconic logos. The Company has exploited this opportunity for marketing lubricants under the âVEEDOLâ brand to various geographies around the world.
INTERNATIONAL OPERATIONS
During 2016-17 your Company has invested in 100% shares of Price Thomas Holdings Limited (PTHL), having a wholly owned subsidiary viz. Granville Oil & Chemicals Limited (GOCL), which is engaged in manufacturing and selling of lubricants and automotive after care products. Since GOCL has its own manufacturing facility, it has resulted in competitive product pricing internationally. Also, the range of products and its sales distribution network have been beneficial for the Companyâs international operations. GOCL mainly operates in United Kingdom and key brands marketed inter alia include Granville, Gunk, Nova, Autosol and Turtle Wax.
Other than as stated above and besides holding 100% shares of Veedol International Limited the Company has three wholly owned subsidiaries viz. Veedol International DMCC (VID), Dubai, Veedol Deutschland GmbH (VDG), Germany and Veedol International BV (VIBV), Netherlands to cater to the Middle East Asian Region, DACH Region and rest of Europe, respectively.
During 2017-18, the Company has purchased entire share capital of VDG from VIBV and accordingly VDG has now become a direct wholly owned subsidiary of your Company.
Further Veedol International Americas Inc. has also been floated as a wholly owned subsidiary of Veedol International Limited, UK. This has relaunched Veedol in Andean region of South America.
Veedol International Limited has also licensed the Veedol brand to a licensee in Canada and Mexico and other licensees in Bangladesh, Ecuador, Republic of South Africa and France for sales thereat.
WIND ENERGY BUSINESS
During the year 2017-18, the revenue generated from the Wind Energy Project amounted to Rs. 2.10 crores.
The Company produces enough clean energy to offset its electricity consumption from fossil fuel sources. The sector is poised to provide adequate returns over the years.
DIVIDEND
In view of present financial results, your Directors have the pleasure in recommending a final Dividend of 2000% (Rs. 100 per ordinary share) on the Ordinary Shares of Rs. 5/- each for the financial year 2017-18 as against 2000% (Rs. 100.00 per ordinary share) for the previous year to the equity shareholders of the Company. The Directors at its 315th Meeting held on 13th November, 2017 declared interim dividend of 1500% (Rs.75.00 per ordinary share) involving a total dividend outflow of Rs. 26.13 crores. The same was distributed to the Shareholders on 28th November, 2017. The final dividend is in addition to the interim dividend, as already distributed.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review, as stipulated under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of the Annual Report as Annexure I.
CORPORATE GOVERNANCE
Your Directors affirm their commitment to good Corporate Governance practices. The report on Corporate Governance as per the requirement of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 together with a certificate from the Statutory Auditors of the Company and declaration by the Managing Director forms part of this report.
SUBSIDIARY COMPANIES
On acquisition of 100% shares, Veedol International Limited had become a wholly owned subsidiary of the Company with effect from October, 2011. Further to explore possibilities of marketing the products under âVeedolâ brand in the Middle East Asian Markets, your Company had floated another wholly owned subsidiary under the name Veedol International DMCC at Dubai, UAE. With a view to cater to the European Markets (excepting the DACH region), the Company had set up another wholly owned subsidiary viz. Veedol International BV, having its office at Amsterdam, the Netherlands.
As the âVeedolâ brand enjoys considerable brand equity in the DACH region, Veedol Deutschland GMBH (VDG) had been initially set up as a 100% subsidiary of Veedol International BV (VIBV). During 2017-18, the Company has acquired 100% shareholding of VDG from VIBV. VDG had initiated its marketing operations for the DACH region and the same operates from Langenfeld, Germany.
Veedol International Americas Inc. has been incorporated as a 100% subsidiary of Veedol International Limited. Veedol International Americas Inc. markets Veedol products in the Andean region of South America. This Company operates from Ontario, Canada.
During 2016-17, your Company has also acquired 100% shares of Price Thomas Holdings Limited (PTHL), having a wholly owned subsidiary viz. Granville Oil & Chemicals Limited, which has its own manufacturing facility and is engaged in manufacturing and selling of lubricants and automotive after care products throughout United Kingdom (UK). GOCL operates from Rotherham, UK.
The Statement of Accounts along with the Report of the Board of Directors and Auditors relating to your Companyâs Overseas Subsidiaries viz. Veedol International Limited, Veedol International DMCC, Veedol International BV, Veedol Deutschland GmbH and Price Thomas Holdings Limited for the financial year 2017-18 are not annexed. Shareholders, who wish to have a copy of the full Report and Accounts of the aforesaid subsidiary companies, will be provided the same, on receipt of a written request. These documents will also be available for inspection by any shareholder at the Registered Office of the Company and the concerned subsidiary companies during business hours on all working days till 14th August 2018.
PERFORMANCE OF SUBSIDIARIES AND JOINT VENTURE COMPANIES AS PER RULE 8(4) OF THE COMPANIES (ACCOUNTS) RULES, 2014
A report on the performance and the financial position of each of the Subsidiaries and Joint Venture Companies as per the Companies Act, 2013 is annexed to the Consolidated Financial Statement and hence not repeated here for the sake of brevity.
The policy for determining material subsidiaries, as approved may be referred to at the official website of the Company at the weblink www.tidewaterindia.com/ wp-content/uploads/2017/02/Material-Subsidiary-Policy.pdf.
CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements have been prepared in accordance with the principles and procedures for the preparation and presentation of Consolidated Accounts as set out in the Indian Accounting Standards (IndAS) on Consolidated Financial Statements notified by the Companies (Indian Accounting Standards) Rules, 2015. The Audited Consolidated Financial Statement together with Auditorsâ Report forms part of the Annual Report.
The group recorded a Consolidated Profit before Tax of Rs. 159.35 crores for the financial year 2017-18 as compared to Rs. 158.93 crores, as achieved in the preceding year.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to Directorsâ Responsibility Statement, it is hereby confirmed that:
i. In the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable accounting standards had been followed along with the proper explanation relating to material departures, if any;
ii. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. The Directors had prepared the annual accounts on a going concern basis;
v. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and operating effectively; and
vi. The Directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Particulars of loan given, investment made and guarantee given alongwith the purpose for which the loan or guarantee is proposed to be utilized by the recipient is provided in the financial statements (Please refer Note 4, 5, 33 and 34 to the Standalone Financial Statement). No loan/advance is outstanding to any subsidiary, associate or any firm/company in which the Directors are interested. This may be regarded as a disclosure as required under Schedule V of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 also.
TRANSFER OF AMOUNTS AND SHARES TO INVESTOR EDUCATION & PROTECTION FUND
Pursuant to the provisions of Section 124 of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017, read with all relevant notifications as issued by the Ministry of Corporate Affairs from time to time all shares in respect of which dividend has remained unpaid or unclaimed for a period of seven years have been transferred by the Company, within the stipulated due date, to the Investor Education and Protection Fund (IEPF).
A list of shareholders alongwith their folio number or DP. ID. & Client ID., who have not claimed their dividends for the last seven consecutive years i.e. 2010-11 to 2016-17 and whose shares are therefore liable for transfer to the IEPF Demat account, has been displayed on the website of the Company at www.tidewaterindia.com/wp-content/uploads/2017/05/ Shareholders-List.pdf besides sending individual communication to the concerned shareholders and issuance of public notice.
The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 26th July, 2017 (date of last AGM) on the Companyâs website (www.tidewaterindia.com) and also on the Ministry of Corporate Affairs website.
CORPORATE WEBSITE
Thewebsites of your company, www.tidewaterindia.com and www.veedolindia.com carry comprehensive database of information of interest to the stakeholders including the corporate profile, information with regard to products, plants and various depots, financial performance of your Company, corporate policies and others.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business, during the period under review.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
During the year, there were no material changes and commitments, affecting the financial position of the Company which have occurred between 1st April, 2018 and the date of this report.
REPORTABLE FRAUDS
No fraud has been reported by the Auditors under Section 143(12) of the Companies Act, 2013, during the period under review.
DIRECTORS
Shri Debasis Jana has been appointed as Additional Director with effect from 13th November, 2017. He will hold office upto the date of the ensuing Annual General Meeting and is eligible for re-appointment. The Company has received notice under Section 160 of the Companies Act, 2013 proposing his appointment as Director.
In accordance with the provisions of Section 152(6)(c) of the Companies Act, 2013 and your Companyâs Articles of Association, Shri Vinod S. Vyas, Director retires by rotation and is eligible for re-appointment.
On recommendation of the Nomination and Remuneration Committee, the Board on 13th November, 2017 appointed Shri P.Y. Gurav and Shri P.S. Bhattacharyya as Independent Directors designated as Additional Directors for a period of 3 years with effect from their date of appointment. However, being Additional Directors, they will hold office upto the date of the ensuing Annual General Meeting and are eligible for appointment for specified period(s), on approval of the shareholders.
Appropriate resolutions seeking appointment of Shri Debasis Jana, Shri P.Y. Gurav and Shri P.S. Bhattacharyya as Directors are appearing in the Notice convening the 95th Annual General Meeting of the Company. Brief resume/details relating to Shri Debasis Jana, Shri Vinod S. Vyas, Shri P.Y. Gurav and Shri P.S. Bhattacharyya are furnished in the said notice.
Shri Sunil Munshi has resigned from the Board of Directors of the Company with effect from 1 st September, 2017, in view of envisaged paucity of adequate time, as deemed necessary for effective discharge of his duties as Director of the Company. The resignation of Shri Munshi has been noted by the Board of Directors at its 315th meeting held on 13th November, 2017. The Board of Directors also placed on record the valued guidance received from him during his tenure of directorship in the Company.
Pursuant to Regulation 36(3)(c) of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 it is disclosed that no Directors share any relationship inter-se.
DECLARATIONS BY THE INDEPENDENT DIRECTORS
All Independent Directors have given declarations to the Company stating their independence pursuant to Section 149 of the Companies Act, 2013 and the same have been noted by the Board.
POLICY ON DIRECTORSâ APPOINTMENT & REMUNERATION
Section 178 of the Companies Act, 2013 is applicable to the Company. The Company appoints Independent Directors, being persons having rich experience and domain knowledge, to serve on the Board. Independent Directors are initially appointed by the Board on recommendation of the Nomination & Remuneration Committee. Non-Executive Directors are appointed by the Board from time to time, subject to the approval of the shareholders. Executive Director(s) are appointed based on their performance and their contribution towards the Company. Appointment(s) of all Directors are formalized on approval of the shareholders.
The Company has framed a Remuneration Policy, in relation to remuneration of Directors, Key Managerial Personnel and Senior Management, as recommended by the Nomination & Remuneration Committee of the Board of Directors. The same, inter-alia contains matters stated under Section 178 of the Companies Act, 2013 read with Securities & Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015. The criteria of making payment to Non-Executive Directors are also stated in the aforesaid policy. The details of such policy i.e. summary, weblink, etc. have been furnished in the Corporate Governance Report forming part of this Annual Report.
The Nomination & Remuneration Policy, as framed and enclosed with the Directorsâ Report as Annexure II, inter alia includes its objective, applicability, matters relating to the remuneration, perquisites for the Whole-time/ Executive/Managing Director, matters relating to remuneration for Non-Executive/Independent Director(s), Stock Options, matters relating to remuneration for KMP, Senior Management Personnel and Other Employees and interpretation provision. This may be deemed to be disclosure as required under proviso of Section 178(4) of the Companies (Amendment) Act, 2017 relating to salient features of Nomination and Remuneration Policy. The entire policy is available on the Companyâs website at the weblink www.tidewaterindia.com/wp-content/uploads/2017/02/ REMUNERATION-POLICY-1 .pdf.
Shri R. N. Ghosal, Managing Director does not receive any remuneration from any other subsidiary company. This may be deemed to be a disclosure as required under Section 197(14) of the Companies Act, 2013.
A statement indicating manner in which annual evaluation of the Board (including Committees) and individual Directors is carried out has been provided separately in this report.
Necessary disclosure as required under Schedule V of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been provided under Corporate Governance Report in relation to remuneration of Shri R. N. Ghosal, Managing Director.
ANNUAL EVALUATION OF BOARDâS PERFORMANCE
In compliance with the Companies Act, 2013 and applicable regulations, the performance evaluation of the Board was carried out during the year under review. The Board Evaluation and Diversity Policy which had been framed by the Company for the purpose of establishing, inter-alia, qualifications, positive attributes, independence of Directors and determination of criteria based on which such evaluation is required to be carried out includes matters stated in guidance notes issued by the Securities & Exchange Board of India (SEBI) vide its Circular No.SEBI/HO/CFD/CMD/CIR/P/2017/ 004 dated 5th January, 2017 thereby modifying the evaluation process.
Separate meeting of Independent Directors was held on 12th February, 2018, wherein the required evaluation was carried out in terms of the modified policy thereof. More details on the same are given in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY
The Company recognizes that its operations impact a wide community of stakeholders, including investors, employees, customers, business associates and local communities and that appropriate attention to the fulfillment of these social responsibilities can enhance overall performance.
The Board of Directors of the Company, in this regard, has devised a Corporate Social Responsibility (CSR) Policy which, inter-alia states mode of constitution of CSR Committee, activities which can be undertaken, mode of implementation, quantum of investment, etc. The same is available on the Companyâs website at the weblink www.tidewaterindia.com/wp-content/ uploads/2017/02/CSR-Policy.pdf. The said policy is also enclosed with the Directorsâ Report as Annexure III. Imparting of training to mechanics/garage owners for skill development by way of setting up an auto-mechanic school had been identified as a CSR activity being covered under Schedule VII of the Companies Act, 2013.
Further during 2017-18, the Company has donated an ambulance for use in Dibrugarh, Assam towards its CSR initiative. Also during the year the Company has identified a project involving building of sanitation facilities in Dhemaji district of Assam as a part of its CSR activities.
The CSR Committee has been constituted by the Board, which as on 31st March, 2018 comprises of Smt. N. Palchoudhuri, as Chairperson, Shri R. N. Ghosal and Shri S. Das. The Committee met three times during the year on 30th May, 2017, 14th August, 2017 and 12th February, 2018 to monitor CSR activities undertaken, review scope of CSR activities, approval of proposed CSR projects, etc. The Company has set up automechanic schools at Kolkata, Silvassa and Faridabad. Utkarsh continued to provide consultancy service for CSR activities, during the year under review.
The details in relation to CSR reporting as required under Rule 8 of Companies (CSR Policy) Rules, 2014 is enclosed with this report as Annexure IV.
Other relevant details in relation to CSR Committee, such as terms of reference of the CSR Committee, number and dates of meetings held and attendance of the Directors are given separately in the attached Corporate Governance Report.
VIGIL MECHANISM
Fraud-free and corruption-free work culture has been core to the Company. In view of the potential risk of fraud and corruption due to rapid growth and geographical spread of operations, the Company has put even greater emphasis to address this risk.
To meet this objective, a Vigil Mechanism Policy akin to Whistle Blower Policy has been laid down. More details about the policy are given in the Corporate Governance Report.
RISK MANAGEMENT
The Company has identified various risks faced by it from different areas. As required under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has adopted a Risk Management Plan for the Company which includes inter-alia identification of elements of risks which may threaten the existence of the Company. Structures are present so that risks are inherently monitored and controlled.
Relevant details of the Risk Management Plan including implementation thereof and the Risk Management Committee have been furnished under the Corporate Governance Report.
EMPLOYEE BENEFIT SCHEME & TRUST
In terms of the approval of the shareholders dated 2nd March, 2011, your Company implemented Tide Water Oil Co. (India) Ltd. Employee Welfare Scheme for granting/allotting options to the eligible employees of the Company through Tide Water Oil Co. (India) Ltd. Employee Welfare Trust. With the promulgation of Securities & Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SBEB Regulations) the existing scheme and the provisions of the existing Trust had been aligned with that of the provisions contained in the said Regulation. Subsequent to the sanction of the shareholders, the scheme and the trust had been rechristened as Tide Water Oil Company (India) Limited Employee Benefit Scheme and Tide Water Oil Company (India) Limited Employee Benefit Trust respectively.
Pursuant to Rule 12 of Companies (Share Capital and Debentures) Rules, 2014, the required details, for the year 2017-18, are stated as under:
a. Options granted Nil
b. Options vested Not Applicable
c. Options exercised Not Applicable
d. The total number of shares arising as a result of exercise of option Not Applicable
e. Options lapsed Not Applicable
f. The exercise price Not Applicable
g. Variation of terms of options Not Applicable
h. Money realized by exercise of options Not Applicable
i. Total number of options in force Nil
j. Employee wise details of options granted to
i. Key managerial personnel(s) Nil
ii. Any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during the year Nil
iii. Identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant Nil
There has been no material change in the concerned scheme during the year under review. The provisions of aligned scheme are in compliance with the SBEB Regulations. Necessary detail as referred in Regulation 14 of SBEB Regulations read with Circular number CIR/ CFD/POLICY CELL/2/2015 dated 16th June, 2015 as issued by SEBI, is uploaded on the Companyâs website at the weblink www.tidewaterindia.com/wp-content/ uploads/2017/03/SEBI-SBEB-Regulation-14-2017-18.pdf
A Certificate from the Auditors of the Company as required under Regulation 13 of SBEB Regulations is enclosed as Annexure V.
FURTHER DISCLOSURES UNDER THE COMPANIES ACT, 2013
i. Extract of the Annual Return
The details forming part of the extract of the Annual Return is enclosed as Annexure VI.
ii. Number of Board Meetings
There were 5 (Five) meetings of the Board of Directors held during the year 2017-18 on 30th May, 2017, 20th July, 2017, 14th August, 2017, 13th November, 2017 and 12th February, 2018. The details of attendance of the Directors in the said Board Meetings have been furnished in the Corporate Governance Report. Details of Committee Meetings held during 2017-18 and attendance thereof by each Director is also furnished in the said Corporate Governance Report.
iii. Changes in Share Capital
There has been no change in the share capital of the Company during the year. Your Company has not issued any ordinary share or share with differential voting rights nor granted stock option nor sweat equity, during the year. As on 31st March, 2018 none of the Directors of the Company hold share or convertible instrument of the Company.
iv. Composition of Audit Committee
The Board has constituted the Audit Committee which comprises of Shri S. Roy Choudhury as the Chairman, Shri S. Sundareshan, Shri P.Y. Gurav and Shri Subir Das. All recommendations of the Audit Committee have been accepted by the Board of Directors.
More details on the Committee are given in the Corporate Governance Report.
v. Related Party Transactions
During the year 2017-18, the Company entered into transactions, cumulative value whereof amounts to Rs. 161.25 crores with Standard Greases & Specialities Pvt. Ltd. (SGSPL), Joint Promoter of the Company which exceeds the threshold limit stated under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and also the threshold limit stated under Rule 15 of the Companies (Meetings of Board & its Powers) Second Amendment Rules, 2015 as further amended by Notification No. GSR 309(E) dated 30th March, 2017 issued by the Ministry of Corporate Affairs. SGSPL is one of the largest grease producers in Asia and they process grease on behalf of the Company to meet the needs of Western Region as there is no grease plant thereat. Further the Company also procures lubricating oil and other chemicals from SGSPL. All these products are offered on competitive rates and the same is in ordinary course of business.
During the year 2017-18, the Company also entered into transactions, cumulative value whereof amounts to Rs. 184.23 crores with JX Nippon TWO Lubricants India Pvt. Ltd. (JXTL), Associate Company which exceeds the threshold limit stated under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and also the threshold limit stated under Rule 15 of the Companies (Meetings of Board & its Powers) Second Amendment Rules, 2015 as further amended by Notification No. GSR 309(E) dated 30th March, 2017 issued by the Ministry of Corporate Affairs. Pursuant to the Joint Venture Agreement, as executed between JXTL, JXTG Nippon Oil & Energy Corporation (formerly JX Nippon Oil & Energy Corporation) and the Company, Tide Water Oil Co. (I) Ltd. pays franchise fees to JXTL, in connection with manufacturing and selling of âENEOSâ range of products. This is on arms length and in ordinary course of business.
The details in Form AOC-2 of material transaction(s) entered into by the Company with its related parties is enclosed as Annexure VII. There were no other materially significant related party transactions with Promoters, Directors or the Management, their Subsidiaries or relatives, etc. during the year that may have potential conflict with the interest of the Company at large. Other than as stated above there were no related party transaction during 2017-18, which were material in nature in terms of provisions of the Companies Act, 2013 and rules made thereunder, requiring disclosure as prescribed under Section 188(2) of the Companies Act, 2013.
All related party transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. While granting omnibus approval, the Company complied with the provisions of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Shareholdersâ sanction is also obtained for material related party transactions proposed to be entered into during the year.
The related party transaction policy for determining materiality of related party transaction and also on dealing with related parties is uploaded on the Companyâs website at the weblink www.tidewaterindia.com/wp-content/uploads/2017/02/RELATED-PARTY-TRANSACTION-POLICY-1 .pdf. The details of the transactions with related party are provided in the accompanying financial statement. The details of the said policy and other relevant details have also been furnished in the Corporate Governance Report.
DISCLOSURES UNDER RULE 8(5) OF COMPANIES
(ACCOUNTS) RULES, 2014
i. Financial summary or highlights: As detailed under the heading âPerformance and State of Companyâs Affairsâ
ii. Change in the nature of business, if any: None
iii. Details of Directors or Key Managerial Personnel (KMP), who were appointed or resigned during the year:
a. Directors appointed : Shri Debasis Jana
Shri P.Y. Gurav
Shri P.S. Bhattacharyya
b. Directors resigned : Shri Sunil Munshi
Shri Praveen P. Kadle
c. Change in KMPs : None
iv. Names of Companies which have become or ceased to be Subsidiaries, Joint Venture Companies or Associate Companies during the year
a. Subsidiaries: During the year your Company has acquired 100% shares of Veedol Deutschland GmbH (VDG). As such VDG is now considered to be a wholly owned subsidiary.
Other than above, there has been no change in the subsidiaries during the year 2017-18.
b. Joint Venture Company (JVC): There has been no change in JVC during the year 2017-18.
c. Associate Companies: There are no Associate Companies other than the JVC viz., JX Nippon TWO Lubricants India Pvt. Ltd., in terms of provisions of the Companies Act, 2013.
v. Details relating to deposits: There were no fixed deposits of the Company from the public outstanding at the end of the financial year.
No fixed deposit has been accepted during the year and as such, there is no default in repayment of the said deposits.
vi. There has not been any deposit, which is not in compliance with the requirements of Chapter V of the Companies Act, 2013.
vii. No significant and material orders have been passed by any regulator(s) or Court(s) or Tribunal(s) impacting the going concern status and Companyâs operations in future.
viii. Adequacy of Internal Financial Control: Your Company has an adequate system of internal financial control as commensurate with the size and nature of business, which ensures that all assets are safeguarded and protected against loss and all transactions are recorded and reported correctly.
The internal control system of the Company is monitored and evaluated by internal auditors and their audit reports are periodically reviewed by the Audit Committee of the Board of Directors. The observations and comments of the Audit Committee are placed before the Board for reference.
The scope of Internal Audit includes audit of Purchase Policy, Sales Promotion Expenditure and Incentive Scheme, Debtors and Creditors Policy, Inventory Policy, Taxation matters and others, which are also considered by the Statutory Auditors while conducting audit of the Annual Financial Statements.
DISCLOSURE AS PER RULE 5(1) OF COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) AMENDMENT RULES, 2016
The disclosure as required under Rule 5(1) of Companies (Appointment & Remuneration of Managerial Personnel) Amendment Rules, 2016 is enclosed with this report as Annexure VIII.
Your company has not paid any remuneration attracting the provisions of Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Amendment Rules, 2016. Necessary information as required under the said Rule has been appended to this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
No cases were filed / reported to the Company pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 during the year under review. Prevention of Sexual Harassment Committee(ies) have been formed at the corporate and regional levels to monitor compliance with the provisions of the said Act and complaints thereof, if any.
AUDITOR & AUDITORâS REPORT
Messrs. Price Waterhouse Chartered Accountants LLP (PW) was appointed as Auditors of the Company at the 94th Annual General Meeting. Since eligible, members are requested to consider their appointment till the conclusion of the Ninety Ninth Annual General Meeting and authorize the Board of Directors to decide on their remuneration.
There are no qualifications made by the statutory auditors in their report.
A statement detailing significant Accounting Policies of the Company is annexed to the Accounts.
SECRETARIAL AUDIT
A Secretarial Audit was conducted during the year 201718 by the Secretarial Auditor, Shri Manoj Prasad Shaw of Messrs. Manoj Shaw & Co., Practising Company Secretaries, in accordance with the provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditorâs Report is attached as Annexure IX and forms a part of this report of Directors. There are no qualifications made by the Secretarial Auditor in his Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO A. CONSERVATION OF ENERGY
1. Steps taken or impact on conservation of energy.
Energy conservation during the financial year has accrued as a result of the following steps taken at various locations of the Company.
SILVASSA
i. Old florescent tubelights were relaced with 36 watts and 18 watts EELED lights, saving power consumption to the extent of 6048 units per year.
ii. 5.5 KW water pump was replaced with 3.5 KW water pump which resulted in decrease of power consumption upto approx. 5000 units per year.
iii. Old EPBAX System was replaced with new EPBAX System which resulted in reduction of power consumption upto 3820 units per year.
TURBHE
i. Old florescent tube lights were replaced with 36 watts electrical fittings thereby reducing power consumption to the extent of 5050 units per year.
ii. Old traditional copper blast choke was replaced with electronic blast saving power consumption upto 1200 units per year.
iii. Modification in the unscrambler belt to feed the bottles directly on the rotating disc resulted in decrease of power consumption upto 900 units per year.
ORAGADAM
i. New warehouse roof designed and constructed to have solar panels in future.
ii. All tube light fittings in Main Block shop floor were replaced with LED fittings.
iii. Multi Function Meter provided in new electrical panel of each feeder to monitor energy consumption.
iv. Existing air conditioners were replaced with energy efficient air conditioners.
2. Steps taken by the Company for utilising alternate sources of energy.
None in particular
3. Capital investment on energy conservation equipments.
None in particular
B. TECHNOLOGY ABSORPTION
1. Efforts made towards technology absorption
New products are developed by the R&D centers of the Company incorporating latest technology.
2. Benefits derived
The Company is able to produce quality products in view of the above.
3. Information regarding imported technology Not applicable.
4. Expenditure incurred on Research and Development
C. FOREIGN EXCHAGE EARNINGS AND OUTGO
Foreign Exchange earnings during the year under review was Rs. 4.60 crores (last year Rs. 2.41 crores) while Foreign Exchange outgo was Rs. 179.73 crores (last year Rs. 150.15 crores).
ACKNOWLEDGEMENT
The Board of Directors would like to place on record their appreciation of the support and assistance received from the Government of India and the State Government. The Directors are thankful to the Companyâs Bankers / Shareholders / all other Stakeholders and the esteemed customers for their continued support.
The Board deeply appreciates the commitment and the invaluable contribution of all the employees towards the satisfactory performance of your Company.
On behalf of the Board
Kolkata Debasis Jana
30th May, 2018 Chairman
Mar 31, 2017
Dear Shareholders,
The Directors take pleasure in presenting their Ninety Fourth Annual Report on the operations of the Company together with audited accounts for the year ended 31st March, 2017.
Amount
(Rs. in Crores)
Year ended |
Year ended |
|
31st March, 2017 |
31st March, 2016 |
|
The Accounts before charging |
||
depreciation show a profit of |
158.40 |
140.38 |
From which has been deducted |
||
Depreciation (Net) |
7.37 |
7.11 |
Provision for Taxation |
48.83 |
50.88 |
Other Comprehensive Income(OCI) |
2.11 58.31 |
2.27 60.26 |
100.09 |
80.12 |
|
To which is added the balance brought |
||
forward from the last accounts of |
508.33 |
467.09 |
608.42 |
547.21 |
|
The Directors have transferred to |
||
General Reserve |
- |
- |
Leaving a balance of |
608.42 |
547.21 |
The Directors have paid Interim Dividend @ 1000% (p.y. 750%) on the Ordinary Shares amounting to |
17.43 |
13.07 |
The Directors have paid final dividend @ 1750% (p.y. 1250%) on the Ordinary Shares amounting to |
30.49 |
21.78 |
Tax on Dividend |
9.75 |
7.09 |
550.75 |
505.27 |
|
To which is added OCI adjustment and |
||
Tax theron |
2.84 |
3.06 |
Leaving a balance to be carried forward |
553.59 |
508.33 |
Note: Percentages of Interim Dividend for the Financial Year 2015-16 and Final Dividend For the Financial year 2014-15 have been adjusted to factor in the effect of issue of sub divided and bonus shares in 2015-16.
PERFORMANCE AND STATE OF COMPANYâS AFFAIRS
The performance of your Company during the year under review was commendable. The turnover recorded significant increase to reach Rs. 1317.29 crores (net of discount and rebates Rs. 1132.02 crores), the highest in the history of the Company, compared to Rs.1275.34 crores (net of discount and rebates Rs. 1098.30 crores) in the previous year, an increase of 3.29%. The volume of sales also recorded a satisfactory increase partially due to the Company''s continued focus on building its brand equity and bazaar sales. However, the overall lubricant industry remained depressed due to constant upgradation of engine design and presence of long drain lubes. As a result of the negligible generic growth the market witnessed intensified competition among the existing market players for a greater share. On the other hand, the rising input costs and volatility in the market led to greater pressure on margins. Notwithstanding the adverse factors, the Company achieved a Profit before Tax (PBT) of Rs. 151.03 crores as compared to a PBT of Rs. 133.27 crores (Rs. 157.76 crores before adjustment of exceptional item) in the preceding year.
Premium segment remained a major focus area during the year. Your Company has adopted more customer-centric approach, executing campaigns on the electronic media and undertaking elaborate field level activities. Realignment of the distribution network, efforts in maintaining direct contacts with the customers and various strategic alliances with the leading Original Equipment Manufacturers (OEMs), helped your Company to achieve improved results and increase its presence in new markets.
The Company''s Plants at Silvassa, Turbhe, Oragadam and Faridabad continue to be accredited under ISO 9001:2008 for quality standards. Plant at Ramkristopur has obtained accreditation under ISO 9001:2015 for quality standards. The Silvassa and Oragadam Plants had obtained accreditation under ISO 14001:2004 for environmental standards. The support provided by the Company''s accredited R&D Centers have helped in improving the quality of products and upgrading product formulation.
Your Company''s products primarily marketed under the ''VEEDOL'' brand name are well established and accepted in the industry for their quality and range. The Joint Venture Company (JVC) viz. JX Nippon TWO Lubricants India Private Limited (JXTL), wherein your Company and JXTG Nippon Oil & Energy Corporation (formerly JX Nippon Oil & Energy Corporation), Japan, have 50:50 stake, continues to undertake marketing of the ''ENEOS'' brand of products in India. The production facilities, warehousing, logistic and other ancillary support continue to be extended by your Company to the JVC. Details of performance of this joint venture are stated in the later part of the report.
CHANGE IN SHAREHOLDING STATUS
Subsequent to the open offer for acquisition of further shares of the Company, Standard Greases & Specialties Private Limited (SGSPL) emerged as a single largest shareholder of this Company. Post completion of the offer SGSPL requested for reclassification of their status from âpublic shareholderâ to âjoint promoterâ along with Andrew Yule & Company Limited and re-classification of status of Janus Consolidated Finance Private Limited, Person Acting in Concert in the concerned open offer, from âpublic shareholderâ to âpart of promoter groupâ.
The matter was considered by the Board of Directors at its 309th meeting held on 11th August, 2016. On meeting the requisite eligibility criteria, the Board pursuant to the provisions of Regulation 31A(2) and 31A(8) of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 approved the said re-classification and necessary disclosure thereof was made to the Stock Exchanges and required effect was given in the shareholding pattern of the Company.
BRAND âVEEDOLâ
With the acquisition of Veedol International Limited, the Company got the global rights to a wide portfolio of registered trademarks for the master brand ''VEEDOL'' as well as its associate product sub-brands and iconic logos. The Company has exploited this opportunity for marketing lubricants under the ''VEEDOL'' brand to various geographies around the world.
INTERNATIONAL OPERATIONS
During the year your Company has invested in 100% shares of Price Thomas Holdings Limited (PTHL), having a wholly owned subsidiary viz. Granville Oil & Chemicals Limited (GOCL), which is engaged in manufacturing and selling of lubricants and automotive after care products. Since GOCL has its own manufacturing facility, it has resulted in competitive product pricing internationally. Also, the range of products and its sales distribution network have been beneficial for the Company''s international operations. GOCL mainly operates in United Kingdom and key brands marketed inter alia include Granville, Gunk, Nova, Autosol and Turtle Wax.
Other than as stated above and besides holding 100% shares of Veedol International Limited the Company has two wholly owned subsidiaries viz. Veedol International DMCC (VID), Dubai and Veedol International BV (VIBV), Netherlands to cater to the Middle East Asian Region and Europe, respectively.
Veedol Deutschland GMBH (VDG) has been incorporated as a 100% subsidiary of Veedol International BV to relaunch the brand in Germany, Austria and Switzerland.
Further Veedol International Americas Inc. has also been floated as a wholly owned subsidiary of Veedol International Limited, UK. This has relaunched Veedol in Andean region of South America.
Veedol International Limited has also licensed the Veedol brand to a licensee in North America and Mexico and other licensees in Bangladesh, Ecuador and Republic of South Africa for sales thereat.
WIND ENERGY BUSINESS
During the year 2016-17, the revenue generated from the Wind Energy Project amounted to Rs.1.70 crores. The Company produces enough clean energy to offset its electricity consumption from fossil fuel sources. The sector is poised to provide adequate returns over the years.
DIVIDEND
In view of present financial results, your Directors have the pleasure in recommending a final Dividend of 2000% (Rs.100.00 per ordinary share) on the Ordinary Shares of Rs. 5/- each for the financial year 2016-17 as against 1750% (Rs.87.50 per ordinary share) for the previous year to the equity shareholders of the Company. The Directors at its 310th Meeting held on 25th November, 2016 declared interim dividend of 1000% (Rs.50.00 per ordinary share) involving a total dividend outflow of Rs.17.42 crores. The same was distributed to the Shareholders on 12th December, 2016. The final dividend is in addition to the interim dividend, as already distributed. The Dividend Distribution Policy is enclosed with this report. The same is also available at the official website of the Company at the weblink www.tidewaterindia.com/wp-content/uploads/2017/02/ DIVIDEND%20DISTRIBUTION%20 POLICY.pdf
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review, as stipulated under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of the Annual Report as Annexure I.
CORPORATE GOVERNANCE
Your Directors affirm their commitment to good Corporate Governance practices. The report on Corporate Governance as per the requirement of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 together with a certificate from the Statutory Auditors of the Company and declaration by the Managing Director forms part of this report.
SUBSIDIARY COMPANIES
On acquisition of 100% shares, Veedol International Limited had become a wholly owned subsidiary of the company with effect from October, 2011. Further to explore possibilities of marketing the products under âVeedolâ brand in the Middle East Asian Markets, your Company had floated another wholly owned subsidiary under the name Veedol International DMCC at Dubai, UAE. With a view to cater to the European Markets (excepting the DACH region), the company had set up another wholly owned subsidiary viz. Veedol International BV, having its office at Amsterdam, the Netherlands.
As the âVeedolâ brand enjoys considerable brand equity in the DACH region, Veedol Deutschland GMBH had been set up as a 100% subsidiary of Veedol International BV. Veedol Deutschland GMBH had initiated its marketing operations for the DACH region and the same operates from Langenfeld, Germany.
Veedol International Americas Inc. has been incorporated as a 100% subsidiary of Veedol International Limited. Veedol International Americas Inc. markets Veedol products in the Andean region of South America. This Company operates from Ontario, Canada.
During the year your Company has also acquired 100% shares of Price Thomas Holdings Limited (PTHL), having a wholly owned subsidiary viz. Granville Oil & Chemicals Limited, which has its own manufacturing facility and is engaged in manufacturing and selling of lubricants and automotive after care products throughout United Kingdom (UK). GOCL operates from Rotherham, UK.
The Statement of Accounts along with the Report of the Board of Directors and Auditors relating to your Company''s Overseas Subsidiaries viz. Veedol International Limited, Veedol International DMCC, Veedol International BV and Price Thomas Holdings Limited for the financial year 2016-17 are not annexed. Shareholders, who wish to have a copy of the full Report and Accounts of the aforesaid subsidiary companies, will be provided the same, on receipt of a written request. These documents will also be available for inspection by any shareholder at the Registered Office of the Company and the concerned subsidiary companies during business hours on all working days till 26th July, 2017.
PERFORMANCE OF SUBSIDIARIES AND JOINT VENTURE COMPANIES AS PER RULE 8(4) OF THE COMPANIES (ACCOUNTS) RULES, 2014
A report on the performance and the financial position of each of the Subsidiaries and Joint Ventures Companies as per the Companies Act, 2013 is annexed to the Consolidated Financial Statement and hence not repeated here for the sake of brevity.
The policy for determining material subsidiaries, as approved may be referred to at the official website of the Company at the weblink www.tidewaterindia.com/ wp-content/uploads/2017/02/Material-Subsidiary-Policy.pdf
CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements have been prepared in accordance with the principles and procedures for the preparation and presentation of Consolidated Accounts as set out in the Indian Accounting Standards (IndAS) on Consolidated Financial Statements notified by the Companies (Indian Accounting Standards) Rules, 2015. The Audited Consolidated Financial Statement together with Auditors'' Report forms part of the Annual Report.
The group recorded a Consolidated Profit before Tax of Rs. 159.31 crores for the financial year 2016-17 as compared to Rs. 128.83 crores, as achieved in the preceding year.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:
i. In the preparation of the annual accounts for the financial year ended 31st March, 2017, the applicable accounting standards had been followed along with the proper explanation relating to material departures, if any;
ii. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;
iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. The Directors had prepared the annual accounts on a going concern basis;
v. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and operating effectively; and
vi. The Directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Particulars of loan given, investment made and guarantee given along with the purpose for which the loan or guarantee is proposed to be utilized by the recipient is provided in the financial statements (Please refer Note 4,5 and 27.1 to the Standalone Financial Statement). No loan / advance is outstanding to any subsidiary, associate or any firm / company in which the Directors are interested. This may be regarded as a disclosure as required under Schedule V of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 also.
TRANSFER OF AMOUNTS AND SHARES TO INVESTOR EDUCATION & PROTECTION FUND
Pursuant to the provisions of Section 124 of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, read with Notification No. G.S.R. 178(E) dated 28th February, 2017 as issued by the Ministry of Corporate Affairs all shares in respect of which dividend has remained unpaid or unclaimed for a period of seven years are being transferred by the Company, within the stipulated due dates, to the Investor Education and Protection Fund (IEPF). A list of such shareholders along with their folio number or DP. ID.-Client ID., who have not claimed their dividends for the last seven consecutive years i.e. 2009-10 to 2015-16 (2008-09 being the base year) and whose shares are therefore liable for transfer to the IEPF Demat account, has been displayed on the website of the Company at www.tidewaterindia.com/wp-content/ uploads/2017/05/Shareholders-details.pdf besides sending individual communication to the concerned shareholders and issuance of public notice.
The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 28th September, 2016 (date of last AGM) on the Company''s website (www.tidewaterindia.com) and also on the Ministry of Corporate Affairs'' website.
CORPORATE WEBSITE
The websites of your company, www.tidewaterindia.com and www.veedolindia.com carry comprehensive database of information of interest to the stakeholders including the corporate profile, information with regard to products, plants and various depots, financial performance of your Company, corporate policies and others.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business, during the period under review.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
During the year, there were no material changes and commitments, affecting the financial position of the Company which have occurred between 1st April, 2017 and the date of this report.
REPORTABLE FRAUDS
No fraud has been reported by the Auditors under Section 143(12) of the Companies Act, 2013, during the period under review.
DIRECTORS
Shri D. S. Chandavarkar has been appointed as Additional Director with effect from 30th May, 2017. He will hold office up to the date of the ensuing Annual General Meeting and is eligible for re-appointment. The Company has received notice under Section 160 of the Companies Act, 2013 proposing his appointment as Director.
In accordance with the provisions of Section 152(6)(c) of the Companies Act, 2013 and your Company''s Articles of Association, Shri Subir Das and Shri Vinod S. Vyas, Directors retire by rotation and are eligible for re-appointment.
The Board on recommendation of the Nomination and Remuneration Committee has recommended reappointment of Shri S.Sundareshan and Smt. N. Palchoudhuri, Independent Directors till 2nd November, 2020 and 6th April, 2021, respectively. Special Resolutions in connection with the said re-appointments are appearing in the Notice convening the 94th Annual General Meeting of the Company.
Appropriate resolution seeking appointment of Shri D.S. Chandavarkar as Director is also appearing in the Notice convening the 94th Annual General Meeting of the Company.
The Notice convening the 94th Annual General Meeting of the Company also contains an Ordinary Resolution with respect to extension of term of appointment of Shri R. N. Ghosal, Managing Director of the Company. Considering his extra-ordinary performance and valuable guidance provided to the Company, the Board of Directors (the Board) on recommendation of the Nomination & Remuneration Committee of the Board decided to extend the term of appointment of Shri Ghosal till the close of business on 28th February, 2019.
Brief resume/details relating to Shri R.N. Ghosal, Shri D. S. Chandavarkar, Shri S. Sundareshan, Shri Subir Das, Shri Vinod S. Vyas and Smt. N. Palchoudhuri are furnished in the said notice.
Shri Praveen P. Kadle resigned from the Board of Directors of the Company with effect from 15th May, 2017 in view of re-organisation of capital structure of nominating entity. The same have been noted by the Board at its 312th meeting held on 30th May 2017. The Board of Directors also placed on record the valued guidance received from him during his tenure of directorship in the Company.
Pursuant to Regulation 36(3)(c) of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 it is disclosed that no Directors share any relationship inter-se.
DECLARATIONS BY THE INDEPENDENT DIRECTORS
All Independent Directors have given declarations to the Company stating their independence pursuant to Section 149 of the Companies Act, 2013 and the same have been noted by the Board.
POLICY ON DIRECTORS'' APPOINTMENT & REMUNERATION
Section 178 of the Companies Act, 2013 is applicable to the Company. The Company appoints Independent Directors, being persons having rich experience and domain knowledge, to serve on the Board. Independent Directors are initially appointed by the Board on recommendation of the Nomination & Remuneration Committee. Non-Executive Directors are appointed by the Board from time to time, subject to the approval of the shareholders. Executive Director(s) are appointed based on their performance and their contribution towards the Company. Appointment(s) of all Directors are formalized on approval of the shareholders.
The Company has framed a Remuneration Policy, in relation to remuneration of Directors, Key Managerial Personnel and Senior Management, as recommended by the Nomination & Remuneration Committee of the Board of Directors. The same, inter-alia contains matters stated under Section 178 of the Companies Act, 2013 read with Securities & Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015. The criteria of making payment to Non-Executive Directors are also stated in the aforesaid policy. The details of such policy i.e. summary, weblink, etc. have been furnished in the Corporate Governance Report forming part of this Annual Report.
The Nomination & Remuneration Policy, as framed, is enclosed with the Directors'' Report as Annexure II.
Shri R. N. Ghosal, Managing Director does not receive any remuneration from any other subsidiary company. This may be deemed to be a disclosure as required under Section 197(14) of the Companies Act, 2013.
A statement indicating manner in which annual evaluation of the Board (including Committees) and individual Directors is carried out has been provided separately in this report.
Necessary disclosure as required under Schedule V of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been provided under Corporate Governance report in relation to remuneration of Shri R. N. Ghosal, Managing Director.
ANNUAL EVALUATION OF BOARD''S PERFORMANCE
In compliance with the Companies Act, 2013 and applicable regulations, the performance evaluation of the Board was carried out during the year under review. The Board Evaluation and Diversity Policy which had been framed by the Company for the purpose of establishing, inter-alia, qualifications, positive attributes, independence of Directors and determination of criteria based on which such evaluation is required to be carried out has been amended during the year in terms of guidance notes issued by the Securities & Exchange Board of India (SEBI) vide its Circular No.SEBI/HO/CFD/ CMD/CIR/P/2017/004 dated 5th January, 2017 thereby modifying the evaluation process.
Separate meeting of Independent Directors was held on 10th February, 2017, wherein the required evaluation was carried out in terms of the modified policy thereof. More details on the same are given in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY
The Company recognizes that its operations impact a wide community of stakeholders, including investors, employees, customers, business associates and local communities and that appropriate attention to the fulfillment of these social responsibilities can enhance overall performance.
The Board of Directors of the Company, in this regard, has devised a Corporate Social Responsibility (CSR) Policy which, inter-alia states mode of constitution of CSR Committee, activities which can be undertaken, mode of implementation, quantum of investment, etc. The same is available on the Company''s website at the weblink www.tidewaterindia.com/wp-content/ uploads/2017/02/CSR-Policy.pdf. The said policy is also enclosed with the Directors'' Report as Annexure III. Imparting of training to mechanics/garage owners for skill development by way of setting up an auto-mechanic school had been identified as a CSR activity being covered under Schedule VII of the Companies Act, 2013.
The CSR Committee has also been constituted by the Board, which as on 31st March, 2017 comprises of Shri A. Mukherjee, as Chairman, Shri R. N. Ghosal and Shri S. Das. The Committee met twice during the year on 13th May, 2016 and 30th May, 2016 to monitor CSR activities undertaken, review scope of CSR activities, etc. The Company has set up auto-mechanic schools at Kolkata, Silvassa and Faridabad. Utkarsh continued to provide consultancy service for CSR activities, during the year under review.
The details in relation to CSR reporting as required under Rule 8 of Companies (CSR Policy) Rules, 2014 is enclosed with this report as Annexure IV.
Other relevant details in relation to CSR Committee, such as terms of reference of the CSR Committee, number and dates of meetings held and attendance of the Directors are given separately in the attached Corporate Governance Report.
VIGIL MECHANISM
Fraud-free and corruption-free work culture has been core to the Company. In view of the potential risk of fraud and corruption due to rapid growth and geographical spread of operations, the Company has put even greater emphasis to address this risk.
To meet this objective, a Vigil Mechanism Policy akin to Whistle Blower Policy has been laid down. More details about the policy are given in the Corporate Governance Report.
RISK MANAGEMENT
The Company has identified various risks faced by it from different areas. As required under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has adopted a Risk Management Plan for the Company which includes inter-alia identification of elements of risks which may threaten the existence of the Company. Structures are present so that risks are inherently monitored and controlled.
Relevant details of the Risk Management Plan including implementation thereof and the Risk Management Committee have been furnished under the Corporate Governance Report.
EMPLOYEE WELFARE SCHEME & TRUST
In terms of the approval of the shareholders dated 2nd March, 2011, your Company implemented Tide Water Oil Co. (India) Ltd. Employee Welfare Scheme for granting/allotting options to the eligible employees of the Company through Tide Water Oil Co. (India) Ltd. Employee Welfare Trust. With the promulgation of Securities & Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SBEB Regulations) the existing scheme and the provisions of the existing Trust had been aligned with that of the provisions contained in the said Regulation. Subsequent to the sanction of the shareholders, the scheme and the trust had been rechristened as Tide Water Oil Company (India) Limited Employee Benefit Scheme and Tide Water Oil Company (India) Limited Employee Benefit Trust respectively.
Pursuant to Rule 12 of Companies (Share Capital and Debentures) Rules, 2014, the required details, for the year 2016-17, are stated as under:
a. |
Options granted |
Nil |
b. |
Options vested |
Not Applicable |
c. |
Options exercised |
Not Applicable |
d. |
The total number of shares |
|
|
arising as a result of exercise of |
|
|
option |
Not Applicable |
e. |
Options lapsed |
Not Applicable |
f. |
The exercise price |
Not Applicable |
g. |
Variation of terms of options |
Not Applicable |
h. |
Money realized by exercise of |
|
|
options |
Not Applicable |
i. |
Total number of options in force |
Nil |
j. |
Employee wise details of options granted to |
|
|
i. Key managerial personnel (s) ii. Any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during the year |
Nil |
|
iii. Identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant. |
Nil |
|
|
Nil |
There has been no material change in the concerned scheme during the year under review. The provisions of aligned scheme are in compliance with the SBEB Regulations. Necessary detail as referred in Regulation 14 of SBEB Regulations read with Circular number CIR/ CFD/POLICY CELL/2/2015 dated 16th June, 2015 as issued by SEBI, is uploaded on the Company''s website at the weblink www.tidewaterindia.com/wp-content/ uploads/2017/03/SEBI-SBEB-Regulation14.pdf
A Certificate from the Auditors of the Company as required under Regulation 13 of SBEB Regulations is enclosed as Annexure V.
FURTHER DISCLOSURES UNDER THE COMPANIES ACT, 2013
i. Extract of the Annual Return
The details forming part of the extract of the Annual Return is enclosed as Annexure - VI.
ii. Number of Board Meetings
There were 5 (Five) meetings of the Board of Directors held during the year 2016-17 on 13th May, 2016, 30th May, 2016, 11th August, 2016, 25th November, 2016 and 10th February, 2017. The details of attendance of the Directors in the said Board Meetings have been furnished in the Corporate Governance Report. Details of Committee Meetings held during 2016-17 and attendance thereof by each Director is also furnished in the said Corporate Governance Report.
iii. Changes in Share Capital
There has been no change in the share capital of the Company during the year. Your Company has not issued any ordinary shares or shares with differential voting rights nor granted stock options nor sweat equity, during the year. As on 31st March, 2017 none of the Directors of the Company hold shares or convertible instruments of the Company.
iv. Composition of Audit Committee
The Board has constituted the Audit Committee which comprises of Shri A. Mukherjee as the Chairman, Shri S. Sundareshan, Shri S. Roy Choudhury and Shri Subir Das. All recommendations of the Audit Committee have been accepted by the Board of Directors.
More details on the Committee are given in the Corporate Governance Report.
v. Related Party Transactions
During the year 2016-17, the Company entered into transactions, cumulative value whereof amounts to Rs. 108.33 crores with Standard Greases & Specialties Pvt. Ltd. (SGSPL), Joint Promoter of the Company which is close to the threshold limit stated under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 but exceeds the limit stated under Rule 15 of the Companies (Meetings of Board & its Powers) Second Amendment Rules, 2015 as further amended by Notification No. GSR 309(E) dated 30th March, 2017 issued by the Ministry of Corporate Affairs. SGSPL is one of the largest grease producers in Asia and they process grease on behalf of the Company to meet the needs of Western Region as there is no grease plant thereat. Further the Company also procures lubricating oil and other chemicals from SGSPL. All these products are offered on competitive rates and the same is in ordinary course of business.
During the year 2016-17, the Company also entered into transactions, cumulative value whereof amounts to Rs. 114.15 crores with JX Nippon TWO Lubricants India Pvt. Ltd. (JXTL), Associate Company which is close to the threshold limit stated under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 but exceeds the limit stated under Rule 15 of the Companies (Meetings of Board & its Powers) Second Amendment Rules, 2015 as further amended by Notification No. GSR 309(E) dated 30th March, 2017 issued by the Ministry of Corporate Affairs. Pursuant to the Joint Venture Agreement, as executed between JXTL, JXTG Nippon Oil & Energy Corporation (formerly JX Nippon Oil & Energy Corporation) and the Company, Tide Water Oil Co. (I) Ltd. pays franchise fees to JXTL, in connection with manufacturing and selling of ''ENEOS'' range of products. This is on arms length and in ordinary course of business.
The details in Form AOC-2 of material transaction(s) entered into by the Company with its related parties are enclosed as Annexure VII. There were no other materially significant related party transactions with Promoters, Directors or the Management, their Subsidiaries or relatives, etc. during the year that may have potential conflict with the interest of the Company at large. Other than as stated above there were no related party transaction during 2016-17, which were material in nature in terms of provisions of the Companies Act, 2013 and rules made there under, requiring disclosure as prescribed under Section 188(2) of the Companies Act, 2013.
All related party transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. While granting omnibus approval, the Company complied with the provisions of Securities & Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015. Shareholders'' sanction is also obtained for material related party transactions proposed to be entered into during the year.
The related party transaction policy for determining materiality of related party transaction and also on dealing with related parties is uploaded on the Company''s website at the weblink www.tidewaterindia.com/wp-content/uploads/ 2017/02/RELATED-PARTY-TRANSACTION-POLICY-1.pdf. The details of the transactions with related party are provided in the accompanying financial statement. The details of the said policy and other relevant details have also been furnished in the Corporate Governance Report.
DISCLOSURES UNDER RULE 8(5) OF COMPANIES (ACCOUNTS) RULES, 2014
i. Financial summary or highlights: As detailed under the heading âPerformance and State of Companyâs Affairsâ
ii. Change in the nature of business, if any: None
iii. Details of Directors or Key Managerial Personnel (KMP), who were appointed or resigned during the year:
a. |
Directors appointed |
: Shri B.J.Mahanta Shri D. S. Chandavarkar |
b. |
Directors resigned |
: Shri Kallol Datta Shri R.K.Singh Shri Praveen P. Kadle |
c. |
Change in KMPs |
: None (term of appointment of Shri R. N. Ghosal, Managing Director has been proposed to be extended till the close of business on 28th February, 2019) |
iv. Names of Companies which have become or ceased to be Subsidiaries, Joint Venture Companies or Associate Companies during the year
a. Subsidiaries: During the year your Company has acquired 100% shares of Price Thomas Holdings Limited (PTHL), having a wholly owned subsidiary viz. Granville Oil & Chemicals Limited. As such PTHL is now considered to be a wholly owned subsidiary and GOCL is considered to be a step down subsidiary.
Other than above, there has been no change in the subsidiaries during the year 2016-17.
b. Joint Venture Company (JVC): There has been no change in JVC during the year 201617.
c. Associate Companies: There are no Associate Companies, in terms of provisions of the Companies Act, 2013.
v. Details relating to deposits: There were no fixed deposits of the Company from the public outstanding at the end of the financial year.
No fixed deposit has been accepted during the year and as such, there is no default in repayment of the said deposits.
vi. There has not been any deposit, which is not in compliance with the requirements of Chapter V of the Companies Act, 2013.
vii. No significant and material orders have been passed by any regulator(s) or Court(s) or Tribunal(s) impacting the going concern status and Company''s operations in future.
viii. Adequacy of Internal Financial Control: Your Company has an adequate system of internal financial control as commensurate with the size and nature of business, which ensures that all assets are safeguarded and protected against loss and all transactions are recorded and reported correctly.
The internal control system of the Company is monitored and evaluated by internal auditors and their audit reports are periodically reviewed by the Audit Committee of the Board of Directors. The observations and comments of the Audit Committee are placed before the Board for reference.
The scope of Internal Audit includes audit of Purchase Policy, Sales Promotion Expenditure and Incentive Scheme, Debtors and Creditors Policy, Inventory Policy, Taxation matters and others, which are also considered by the Statutory Auditors while conducting audit of the Annual Financial Statements.
DISCLOSURE AS PER RULE 5(1) OF COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) AMENDMENT RULES, 2016
The disclosure as required under Rule 5(1) of Companies (Appointment & Remuneration of Managerial Personnel) Amendment Rules, 2016 is enclosed with this report as Annexure VIII.
Your company has not paid any remuneration attracting the provisions of Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Amendment Rules, 2016. Necessary information as required under the said Rule has been appended to this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
No cases were filed / reported to the Company pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 during the year under review. Prevention of Sexual Harassment Committee(ies) have been formed at the corporate and regional levels to monitor compliance with the provisions of the said Act and complaints thereof, if any.
AUDITOR & AUDITORâS REPORT
Since the present term of appointment of Messrs. Ray & Ray, Chartered Accountants will conclude at the closure of this 94th Annual General Meeting, the Board of Directors of the Company, vide its resolution dated 30th May, 2017, subject to the approval of the shareholders, appointed Messrs. Price Waterhouse Chartered Accountants LLP, who have expressed their willingness and eligibility, as Auditors to conduct the statutory audit of the company for the year ended 31st March, 2018 and accordingly their name has been proposed for appointment. Members are requested to consider the appointment of M/s Price Waterhouse Chartered Accountants LLP as the Statutory Auditors of the Company for the financial year ending on 31st March, 2018 and authorize the Board of Directors to decide on their remuneration.
There are on qualifications made by the statutory auditors in their report
A statement detailing significant Accounting Policies of the Company is annexed to the Accounts.
SECRETARIAL AUDIT
A Secretarial Audit was conducted during the year 201617 by the Secretarial Auditor, Shri Manoj Prasad Shaw of M/s. Manoj Prasad Shaw & Co., Practicing Company Secretaries, in accordance with the provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditor''s Report is attached as Annexure IX and forms a part of this report of Directors. There are no qualifications made by the Secretarial Auditor in his Report.
BUSINESS RESPONSIBILITY REPORT
As stipulated under Regulation 34(2)(f) of the Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report describing the initiatives taken by the Company from environmental, social and governance perspective forms a part of the Annual Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO A. CONSERVATION OF ENERGY
1. Steps taken or impact on conservation of energy.
Energy conservation during the financial year has accrued as a result of the following steps taken at various locations of the Company.
SILVASSA
i. Centralised air conditioner in some parts of the plant were replaced with split air conditioners which resulted in reduction of power consumption upto 18000 units per year.
ii. 36 watt electrical fittings were replaced with18 watt EELED lights, saving power consumption to the extent of 4500 units per year.
iii. Re-orientation of on/off switch in 1 litre line conveyor resulted in decrease of power consumption up to 500 units per year.
iv. Existing pump of additive tank was replaced with energy efficient pump which resulted in decrease of power consumption by 672 units for 2016-17.
TURBHE
Capping machine and filling machine were replaced with a monoblock filling machine along with single belt conveyor and other accessories saving electricity consumption to the extent of 1500 units per year.
ORAGADAM
i. Detuning of Harmonics was introduced in the electrical supply to avoid distribution loss and to protect electrical equipments.
ii. Existing luminaries were replaced with LED systems.
2. Steps taken by the Company for utilizing alternate sources of energy
None in particular
3. Capital investment on energy conservation equipments
None in particular
B. TECHNOLOGY ABSORPTION
1. Efforts made towards technology absorption
New products are developed by the R&D centers of the Company incorporating latest technology.
2. Benefits derived
The Company is able to produce quality products in view of the above.
3. Information regarding imported technology Not applicable.
4. Expenditure incurred on Research and Development
a. Capital : |
Rs. 0.40 crores |
|
(last year Rs. 0.07 crores) |
b. Recurring : |
Rs. 1.44 crores |
|
(last year Rs. 1.47 crores) |
c. Total : |
Rs. 1.84 crores |
|
(last year Rs. 1.54 crores) |
d. Total R&D : |
0.16 % |
Expenditure |
(last year 0.14 %) |
as percentage |
|
of total |
|
turnover |
|
C. FOREIGN EXCHAGE EARNINGS AND OUTGO
Foreign Exchange earnings during the year under review was Rs. 2.41 crores (last year Rs. 3.09 crores) while Foreign Exchange outgo was Rs. 150.15 crores (last year Rs. 155.56 crores).
ACKNOWLEDGEMENT
The Board of Directors would like to place on record their appreciation of the support and assistance received from the Government of India and the State Government. The Directors are thankful to the Company''s Bankers / Shareholders / all other Stakeholders and the esteemed customers for their continued support.
The Board deeply appreciates the commitment and the invaluable contribution of all the employees towards the satisfactory performance of your Company.
On behalf of the Board Kolkata
Sunil Munshi
30th May, 2017 Chairman
Mar 31, 2016
Dear Shareholders,
The Directors take pleasure in presenting their Ninety Third Annual Report on the operations of the Company together with audited accounts for the year ended 31st March, 2016.
Amount (Rupees in crores)
Year ended 31st March, 2016 |
Year ended 31st March, 2015 |
|||
The Accounts before charging depreciation show a profit of |
138.10 |
250.86 |
||
From which has been deducted : |
||||
Depreciation (Net) |
7.24 |
7.45 |
||
Provision for Taxation 53.17 |
60.41 77.69 |
72.25 |
79.70 171.16 |
|
To which is added the balance brought forward from the last accounts of |
438.05 |
304.61 |
||
The Directors have transferred to General Reserve |
515.74 |
475.77 |
||
Leaving a balance of |
515.74 |
475.77 |
||
The Directors have paid Interim Dividend @750% (p.y. 500%) on the Ordinary Shares amounting to |
13.07 |
8.71 |
||
And the Directors now recommend a final dividend @1750% (p.y. 1250%) on the Ordinary Shares amounting to |
30.49 |
21.78 |
||
Tax on Dividend |
7.86 |
7.23 |
||
Leaving a balance to be carried forward |
464.32 |
438.05 |
Note : Percentages of Interim Dividend for the financial year 2015-16 & Interim Dividend and Final Dividend for the financial year 2014-15 have been adjusted to factor in the effect of issue of sub-divided and bonus shares.
PERFORMANCE AND STATE OF COMPANYâS AFFAIRS
The performance of your Company during the year under review was commendable. The turnover recorded a significant increase to reach Rs. 1274.05 crores (net of discount and rebates Rs. 1148.29 Crores), the highest in the history of the Company, compared to Rs.1207.28 Crores (net of discount and rebates Rs. 1111.28 Crores) in the previous year, an increase of 5.53%. Notwithstanding the sluggishness in lubricant industry, volatility in input costs, challenging economic environment and intense competition from major oil companies including multinational corporations, the increase in turnover could be possible through continued focus on strategy of boosting its brand equity through extensive campaigns on the electronic media for its offerings in diesel and petrol segments, rationalization of operations in tune with market conditions, elaborate activity at field level and implementation of growth strategies. The Company achieved an Profit before Tax (PBT) of Rs. 155.35 crores as compared to an operating PBT of Rs. 93.07 crores, in the preceding year. The PBT as recorded during 2014-15 was Rs. 243.41 crores, which included adjustment of exceptional items to the tune of Rs. 150.34 crores, representing profit on transfer of business as Slump Sale to Joint Venture Company (JVC) promoted with JX Nippon Oil & Energy Corporation, Japan (JXNOE), profit on sale of property at Royapuram, Chennai and depreciation written back in view of change of depreciation method. During the year 2015-16, an amount of Rs. 24.49 crores, being exceptional item on account of provision for loss on investment in overseas subsidiaries since inception has been adjusted from the operating profit stated above, resulting in a PBT of Rs. 130.86 crores. Continued focus on the premium segment supported by innovative brand building measures and efficient procurement strategy has helped the Company to post such result. However, declining demand growth of automotive lubricants, lower sump size and increasing marketing expenditure continue to put pressure on the margins and volumes in the lubricant industry.
Nonetheless, the present brand equity of the Companyâs products has enabled the Company to stay in good stead even in such a turbulent market thus effectively combating the stagnating demand. Greater emphasis has been put on marketing and promotion of the core products to sustain growth and consolidate position in the market. The volume of sales also recorded a corresponding increase due to mix of higher âbazaarâ sales and procurement of bulk industrial orders. With the plethora of lubricant options for customers, your Company has been able to differentiate its products by entering into tie up with few leading Original Equipment Manufacturers due to its superior R&D capabilities.
The Companyâs Plants at Silvassa, Turbhe, Oragadam, Faridabad and Ramkristopur continue to be accredited under ISO 9001:2008 quality standards. The Silvassa and Oragadam Plants had obtained accreditation under ISO 14001:2004 for environmental standards. The support provided by the Companyâs accredited R&D Centers has immensely helped in improving the quality of products and upgrading product formulation.
The Companyâs products primarily marketed under the âVEEDOLâ brand name are well established and accepted in the industry for their quality and range.
Subsequent to formation of the Joint Venture Company (JVC) viz. JX Nippon TWO Lubricants India Private Limited (JXTL), wherein your Company and JXNOE have 50:50 stake, marketing of the âENEOSâ brand of products continue to be undertaken by JXTL. The production facilities, warehousing, logistic and other ancillary support continue to be extended by your Company to the JVC. Details of performance of this joint venture are stated in the later part of the report.
ISSUE OF SUB-DIVIDED AND BONUS SHARES
Considering the prolonged demand of the shareholders, the Board at its 305th Board Meeting held on 28th January, 2016, subject to approval of the shareholders:
1. resolved to sub-divide every existing fully paid equity share of Company having face value of Rs. 10/- each to two equity shares having face value of Rs. 5/- each, fully paid up; and
2. recommended issue of bonus shares in the ratio 1:1, to the existing equity shareholders of Company.
Resolutions with regard to aforesaid matters, were duly sanctioned by the shareholders vide resolution dated 7th March, 2016. As such, 17th March, 2016, was determined as the record date, for reckoning the members who would be:
1. entitled to receive new shares in lieu of their existing shareholding in the Company; and
2. eligible to receive the bonus shares with respect to their existing shareholding in the Company.
A new ISIN (INE484C01022) for the shares bearing face value of Rs. 5/- each, had been generated. The old ISIN (INE484C01014) issued in relation to the existing shares, stood de-activated upon issue of the new ISIN. On 18th March, 2016 and 21st March, 2016, each of the beneficiariesâ account maintained with the Depositories had been credited with the sub-divided shares and bonus shares, respectively. On 21st March, 2016, share certificates had also been dispatched to the shareholders, holding shares in physical mode.
The new shares continue to be listed in the same Stock Exchanges (viz. National Stock Exchange, Calcutta Stock Exchange and Bombay Stock Exchange-permitted category), are freely tradable and similar to the existing shares in all respects, save and except its face value, distinctive number and ISIN. Listing and trading approval, in relation to the said shares had been obtained on 18th March, 2016 and 22nd March, 2016, respectively.
Consequential modifications have also been carried out in the authorized share capital of the Company, to factor in both the effect of the said sub-division of shares and sanction of the shareholders for increase thereof to Rs. 20 crores.
The overall capital structure of the Company pre and post issue of sub-divided and bonus shares are stated below :
Particulars |
Pre sub-division and bonus issue |
Post sub-division and bonus issue |
Authorized Capital |
Rs. 3,00,00,000 consisting of 30,00,000 equity shares of Rs. 10/each fully paid up. |
Rs. 20,00,00,000 consisting of 4,00,00,000 equity shares of Rs. 5/each fully paid up |
No. of shares |
8,71,200 |
34,84,800 |
Face Value |
Rs. 10/- each fully paid up. |
Rs. 5/- each fully paid up |
Issued and Paid Up Capital |
Rs. 87,12,000 |
Rs. 1,74,24,000 |
Distinctive Number |
From 1 to 871200 |
From 1 to 3484800 |
ISIN |
INE484C01014 |
INE484C01022 |
BRAND VEEDOLâ
With the acquisition of Veedol International Limited, the Company got the global rights to a wide portfolio of registered trademarks for the master brand âVEEDOLâ as well as its associate product sub-brands and iconic logos. The Company has exploited this opportunity for marketing lubricants under the âVEEDOLâ brand to various geographies around the world.
INTERNATIONAL OPERATIONS
The Company has floated two wholly owned subsidiaries viz. Veedol International DMCC, Dubai and Veedol International BV, Netherlands to cater to the Middle East Asian Region and Europe, respectively.
Veedol Deutschland GMBH has been incorporated as a 100% subsidiary of Veedol International BV to relaunch the brand in Germany, Austria and Switzerland.
Further Veedol International Americas Inc. has also been floated as a wholly owned subsidiary of Veedol International Limited, UK. This has relaunched Veedol in Andean region of South America.
Veedol International Limited has also licensed the Veedol brand to a licensee in North America and another licensee at Bangladesh for sales thereat.
The international operations are beginning to gain traction and expected to start giving returns in the next few years.
INTERNATIONAL ACQUISITION
Your Directors take great pleasure in informing that during the year under review the Company explored the possibility to invest in 100% shares of Price Thomas Holdings Limited (PTHL), having a wholly owned subsidiary, viz. Granville Oils & Chemicals Limited (GOCL), United Kingdom (UK), which is engaged in manufacturing and selling of lubricants and automotive after care products. Since GOCL has its own manufacturing facility, it is envisaged to result in competitive product pricing. Also, the range of products and its sales distribution network is expected to add synergy to the proposed transaction.
Subsequent to necessary due diligences and valuation, the Share Purchase Agreement had been finally executed and exchanged on 19th April, 2016. GBP 9.59 million was paid as consideration for the said investment. Completion formalities had concluded on 28th April, 2016.
GOCL mainly operates in UK and key brands marketed inter alia include Granville, Gunk, Nova, Autosol and Turtle Wax. The Consolidated Turnover and Profit before Tax of PTHL for the year ended 31st December, 2015 amounted to GBP 11.30 million (previous year GBP 10.92 million) and GBP 1.54 million (previous year GBP 0.87 million), respectively. As PTHL and GOCL have become subsidiary and sub-subsidiary company of your Company, post 31st March, 2016, no specific information, as applicable for subsidiary companies under any relevant statute, in force, has been provided in this Annual Report.
WIND ENERGY BUSINESS
During the year 2015-16, the revenue generated from the Wind Energy Project amounted to Rs.1.29 Crores. The Company produces enough clean energy to offset its electricity consumption from fossil fuel sources. The sector is poised to provide adequate returns over the years.
DIVIDEND
In view of improved financial results, your Directors have the pleasure in recommending a final Dividend of 1750% (Rs.87.50 per ordinary share) on the Ordinary Shares of Rs. 5/- each for the financial year 2015-16 as against 1250%* (Rs.250.00 per ordinary share of Rs. 10/- each) for the previous year to the equity shareholders of the Company. In view of improved operations, the Directors at its 304th Meeting held on 2nd November, 2015 declared interim dividend of 750%* (Rs.150.00 per ordinary share of Rs. 10/- each) involving a total dividend outflow of Rs.13.07 Crores. The same was distributed to the Shareholders on 30th November, 2015. The final dividend is in addition to the interim dividend, as already distributed.
* Please refer note in Page 16.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review, as stipulated under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of the Annual Report as Annexure I.
CORPORATE GOVERNANCE
Your Directors affirm their commitment to good Corporate Governance practices. The report on Corporate Governance as per the requirement of the Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 together with a certificate from the Statutory Auditors of the Company and declaration by the Managing Director forms part of this report.
SUBSIDIARY COMPANIES
On acquisition of 100% shares, Veedol International Limited had become a wholly owned subsidiary of the Company with effect from October, 2011. Further to explore possibilities of marketing the products under âVeedolâ brand in the Middle East Asian markets, your Company had floated another wholly owned subsidiary under the name Veedol International DMCC at Dubai, UAE.
With a view to cater to the European markets (excepting the DACH region), the company had set up another wholly owned subsidiary viz. Veedol International BV, having its office at Amsterdam, Netherlands.
As the âVeedolâ brand enjoys considerable brand equity in the DACH region, Veedol Deutschland GMBH had been set up as a 100% subsidiary of Veedol International BV. Veedol Deutschland GMBH had initiated its marketing operations for the DACH region and the same operates from Lancefield, Germany.
Veedol International Americas Inc. has been incorporated during the year as a 100% subsidiary of Veedol International Limited. Veedol International Americas Inc. markets Veedol products in the Andean region of South America. This Company operates from Ontario, Canada.
The Statement of Accounts along with the Report of the Board of Directors and Auditors relating to your Companyâs overseas subsidiaries viz., Veedol International Limited, Veedol International DMCC and Veedol International BV for the financial year 2015-16 are not annexed. Shareholders, who wish to have a copy of the full Report and Accounts of the aforesaid subsidiary companies, will be provided the same, on receipt of a written request. These documents will also be available for inspection by any shareholder at the Registered Office of the Company and the concerned subsidiary companies during business hours on all working days till 28th September, 2016.
PERFORMANCE OF SUBSIDIARIES AND JOINT VENTURE COMPANIES AS PER RULE 8(4) OF THE COMPANIES (ACCOUNTS) RULES, 2014
A report on the performance and the financial position of each of the Subsidiaries and Joint Ventures Companies as per the Companies Act, 2013 is annexed to the Consolidated Financial Statement and hence not repeated here for the sake of brevity.
The policy for determining material subsidiaries, as approved may be referred to at the official website of the Company at the we blink www.tidewaterindia.com/ pdf/Material-Subsidiary-Policy.pdf.
CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements have been prepared in accordance with the principles and procedures for the preparation and presentation of Consolidated Accounts as set out in the Accounting Standards (AS21) on Consolidated Financial Statements notified by the Companiesâ Accounting Standard Rules, 2006, (as amended). The Audited Consolidated Financial Statements together with Auditorsâ Report form part of the Annual Report.
The group recorded a Consolidated Profit before Tax of Rs. 145.94 Crores for the financial year 2015-16 as compared to Rs. 232.12 Crores, as achieved in the preceding year. As stated under âPerformance and State of Companyâs Affairsâ, Consolidated Profit before Tax of 2014-15, included adjustment to the extent of Rs. 150.34 Crores towards exceptional items.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to Directorsâ Responsibility Statement, it is hereby confirmed that:
i. In the preparation of the annual accounts for the financial year ended 31st March, 2016, the applicable accounting standards had been followed along with the proper explanation relating to material departures, if any;
ii. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;
iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. The Directors had prepared the annual accounts on a going concern basis;
v. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and operating effectively; and
vi. The Directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Particulars of loan given, investment made and guarantee given along with the purpose for which the loan or guarantee is proposed to be utilized by the recipient is provided in the financial statements (Please refer Note 10, 11, 23.1 and 23.5 to the standalone financial statement). No loan / advance is outstanding to any subsidiary, associate or any firm / company in which the Directors are interested. This may be regarded as a disclosure as required under Schedule V of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 also.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION & PROTECTION FUND
Relevant amounts which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from time to time on due dates, to the Investor Education and Protection Fund.
The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 22nd July, 2015 (date of last AGM) on the Companyâs website (www.tidewaterindia.com), as also on the Ministry of Corporate Affairsâ website.
CORPORATE WEBSITE
The website of your company, www.tidewaterindia.com carries a comprehensive database of information of interest to the stakeholders including the corporate profile, information with regard to products, plants and various depots, financial performance of your Company and other matters.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business, during the period under review.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
Save and except as stated under âInternational Acquisitionâ there were no other material changes and commitments, affecting the financial position of the Company which have occurred between 1st April, 2016 and the date of this report.
REPORTABLE FRAUDS
No fraud has been reported by the Auditors under Section 143(12) of the Companies Act, 2013, during the period under review.
DIRECTORS
Shri Praveen P. Kadle and Shri Vinod S. Vyas have been appointed as Additional Directors with effect from 14th March, 2016. Shri B.J. Mahanta has been appointed as Additional Director with effect from 13th May, 2016. They will hold office upto the date of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received notices under Section 160 of the Companies Act, 2013 proposing their appointment as Directors.
In accordance with the provisions of Section 152(6)(c) of the Companies Act, 2013 and your Companyâs Articles of Association, Shri Sunil Munshi, Director retires by rotation and is eligible for re-appointment.
The Board on recommendation of the Nomination and Remuneration Committee has recommended reappointment of Shri Subir Roy Choudhury and Shri A. Mukherjee, Independent Directors till 28th August, 2020 and 31st March, 2020, respectively. Special Resolutions in connection with the said re-appointments are appearing in the Notice convening the 93rd Annual General Meeting of the Company.
Appropriate resolutions seeking appointment of Shri Praveen P. Kadle, Shri B.J. Mahanta and Shri Vinod S. Vyas as Directors are also appearing in the Notice convening the 93rd Annual General Meeting of the Company. Brief resume/details relating to Shri Subir Roy Choudhury, Shri Praveen P. Kadle, Shri B.J.Mahanta, Shri Sunil Munshi, Shri A. Mukherjee and Shri Vinod S. Vyas are furnished in the said notice.
Shri Kallol Datta and Shri R.K.Singh resigned from the Board of Directors of the Company with effect from 11th
August, 2016 and 22nd April, 2016, respectively in view of envisaged paucity of adequate time as deemed necessary for effective discharge of their duties as Directors of the Company. The same have been noted by the Board at its 309th and 307th meetings held on 11th August, 2016 and 13th May, 2016, respectively. The Board of Directors also placed on record the valued guidance received from them during their tenure of directorship in the Company.
Pursuant to Regulation 36(3)(c) of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 it is disclosed that no Directors share any relationship inter-se.
DECLARATIONS BY THE INDEPENDENT DIRECTORS
All Independent Directors have given declarations to the Company stating their independence pursuant to Section 149 of the Companies Act, 2013 and the same have been noted by the Board.
POLICY ON DIRECTORSâ APPOINTMENT & REMUNERATION
Section 178 of the Companies Act, 2013, is applicable to the Company. The Company appoints Independent Directors, being persons having rich experience and domain knowledge, to serve on the Board. Independent Directors are initially appointed by the Board on recommendation of the Nomination & Remuneration Committee. Non-Executive Directors are appointed by the Board from time to time, subject to the approval of the shareholders. Executive Director(s) are appointed based on their performance and their contribution towards the Company. Appointment(s) of all Directors are formalized on approval of the shareholders.
The Company has framed a Remuneration Policy, in relation to remuneration of Directors, Key Managerial Personnel and Senior Management, as recommended by the Nomination & Remuneration Committee of the Board of Directors. The same, inter-alia contains matters stated under Section 178 of the Companies Act, 2013 read with Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The criteria of making payment to Non-Executive Directors are also stated in the aforesaid policy. The details of such policy i.e. summary, web link, etc. have been furnished in the Corporate Governance Report forming part of this Annual Report.
The Nomination & Remuneration Policy, as framed, is enclosed with the Directorsâ Report as Annexure II.
Shri R. N. Ghosal, Managing Director does not receive any remuneration from any other subsidiary company. This may be deemed to be a disclosure as required under Section 197(14) of the Companies Act, 2013.
A statement indicating manner in which annual evaluation of the Board (including Committees) and individual Directors is carried out has been provided separately in this report.
Necessary disclosure as required under Schedule V of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been provided under Corporate Governance report in relation to remuneration of Shri R. N. Ghosal, Managing Director.
ANNUAL EVALUATION OF BOARDâS PERFORMANCE
In compliance with the Companies Act, 2013 and applicable regulations, the performance evaluation of the Board was carried out during the year under review. The Board Evaluation and Diversity Policy has been framed by the Company for this purpose establishing, inter-alia, qualifications, positive attributes, independence of Directors and determination of criteria based on which such evaluation is required to be carried out. Separate meetings of Independent Directors were held on 7th April, 2015 and 14th March, 2016 wherein the said policy was approved and required evaluation was carried out in terms of the approved policy thereof. More details on the same is given in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY
The Company recognizes that its operations impact a wide community of stakeholders, including investors, employees, customers, business associates and local communities and that appropriate attention to the fulfillment of these social responsibilities can enhance overall performance.
The Board of Directors of the Company, in this regard, has devised a Corporate Social Responsibility (CSR) Policy which, inter-alia states mode of constitution of CSR Committee, activities which can be undertaken, mode of implementation, quantum of investment, etc. The same is available on the Companyâs website at the we blink www.tidewaterindia.com/pdf/CSR-Policy.pdf. The said policy is also enclosed with the Directorsâ Report as Annexure III. Imparting of training to mechanics/garage owners for skill development by way of setting up an auto-mechanic school had been identified as a CSR activity being covered under Schedule VII of the Companies Act, 2013.
The CSR Committee has also been constituted by the Board, which as on 31st March, 2016 comprises of Shri A. Mukherjee, as Chairman, Shri R. N. Ghosal, and Shri S. Das. The Committee met twice during the year on 30th May, 2015 and 18th November, 2015 to monitor CSR activities undertaken, review scope of CSR activities, etc. The Company has set up auto-mechanic schools at Kolkata, Silvassa and Faridabad. Utkarsh continued to provide consultancy service for CSR activities, during the year under review.
The details in relation to CSR reporting as required under Rule 8 of Companies (CSR Policy) Rules, 2014 is enclosed with this report as Annexure IV.
Other relevant details in relation to CSR Committee, such as terms of reference of the CSR Committee, number and dates of meetings held and attendance of the Directors are given separately in the attached Corporate Governance Report.
VIGIL MECHANISM
Fraud-free and corruption-free work culture has been core to the Company. In view of the potential risk of fraud and corruption due to rapid growth and geographical spread of operations, the Company has put even greater emphasis to address this risk.
To meet this objective, a Vigil Mechanism Policy akin to Whistle Blower Policy has been laid down. More details about the policy are given in the Corporate Governance Report.
RISK MANAGEMENT
The Company has identified various risks faced by it from different areas. As required under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has adopted a Risk Management Plan for the Company which includes inter-alia identification of elements of risks which may threaten the existence of the Company.
Structures are present so that risks are inherently monitored and controlled.
Relevant details of the Risk Management Plan including implementation thereof and the Risk Management Committee have been furnished under the Corporate Governance Report.
EMPLOYEE WELFARE SCHEME & TRUST
In terms of the approval of the shareholders dated 2nd March, 2011, your Company implemented Tide Water Oil Co. (India) Ltd. Employee Welfare Scheme for granting/allotting options to the eligible employees of the company through Tide Water Oil Co. (India) Ltd. Employee Welfare Trust. With the promulgation of Securities & Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SBEB Regulations), the Board of Directors of the Company vide their resolution dated 7th April, 2015, proposed to align the existing scheme and the provisions of the existing Trust, with that of the said Regulation. Shareholders vide their postal ballot resolution dated 14th January, 2016, sanctioned the said alignment. In line with the said sanction, the scheme and the trust have been rechristened as Tide Water Oil Company (India) Limited Employee Benefit Scheme and Tide Water Oil Company (India) Limited Employee Benefit Trust. Further consequential modifications, as detailed in the postal ballot notice dated 2nd November, 2015, have been carried out, for aligning the provisions of the Scheme and Trust with the said newly promulgated regulations and the Companies Act, 2013.
Pursuant to Rule 12 of Companies (Share Capital and Debentures) Rules, 2014, the required details, for the year 2015-16, are stated as under:
a. Options granted Nil
b. Options vested Not Applicable
c. Options exercised Not Applicable
d. Total number of shares arising as Not Applicable a result of exercise of option
e. Options lapsed Not Applicable
f. Exercise price Not Applicable
g. Variation of terms of options Not Applicable
h. Money realized by exercise of Not Applicable options
i. Total number of options in force
j. Employee wise details of options granted to
i. Key managerial personnel(s) Nil
ii. Any other employee who Nil receives a grant of options in any one year of option amounting to five percent or more of options granted during the year
iii. Identified employees who Nil were granted option(s), during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant Save and except, as stated hereinabove, there has been no material change in the concerned Scheme. The provisions of aligned scheme are in compliance with the SBEB Regulations. Necessary detail as referred in Regulation 14 of SBEB Regulations read with Circular number CIR/CFD/POLICY CELL/2/2015 dated 16th June, 2015 as issued by SEBI, is uploaded on the Companyâs website at the we blink www.tidewaterindia.com/pdf/SEBI-SBEB-Regulation 14.pdf
A Certificate from the Auditors of the Company as required under Regulation 13 of SBEB Regulations is enclosed as Annexure V.
FURTHER DISCLOSURES UNDER THE COMPANIES ACT, 2013
i. Extract of the Annual Return
The details forming part of the extract of the Annual Return is enclosed as Annexure - VI.
ii. Number of Board Meetings
There were 7 (Seven) meetings of the Board of Directors held during the year 2015-16 on 7th April, 2015, 30th May, 2015, 13th August, 2015, 26th September, 2015, 2nd November, 2015, 28th January, 2016 and 14th March, 2016. The details of attendance of the Directors in the said Board Meetings have been furnished in the Corporate Governance Report. Details of Committee meetings held during 2015-16 and attendance thereof by each Director is also furnished in the said Corporate Governance Report.
iii. Changes in Share Capital
The paid up share capital as at the beginning of the year was Rs. 0.87 Crores divided into 8,71,200 ordinary shares of Rs. 10/- each, fully paid up. Subsequently, in line with the shareholders resolution dated 7th March, 2016, the Committee of the Board of Directors of the Company vide their resolutions dated 7th March, 2016 and 18th March, 2016, issued 17,42,400 sub-divided shares of Rs. 5/- each fully paid up in lieu of 8,71,200 equity shares of Rs. 10/- each and further 17,42,400 bonus shares in the ratio 1:1 bearing face value of Rs. 5/- each, fully paid up, respectively. Necessary details relating to the issue of sub-divided and bonus shares are provided earlier under âIssue of Sub-Divided and Bonus Sharesâ and hence not repeated here for the sake of brevity. As such, the paid up equity share capital as on 31st March 2016 was Rs. 1.74 Crores divided into 34,84,800 ordinary shares of Rs. 5/- each, fully paid up.
Save and except, as stated above, the Company has not issued any ordinary shares nor shares with differential voting rights nor granted stock options nor sweat equity, during the year. As on 31st March,
2016 none of the Directors of the Company hold shares or convertible instruments of the Company.
iv. Composition of Audit Committee
The Board has constituted the Audit Committee which comprises of Shri A. Mukherjee as the Chairman, Shri S. Sundareshan, Shri S. Roy Choudhury and Shri S. Das. All recommendations of the Audit Committee have been accepted by the Board of Directors.
More details on the Committee are given in the Corporate Governance Report.
v. Related Party Transactions
During the year 2015-16, the Company entered into transactions, cumulative value whereof amounts to Rs. 132.86 Crores with Standard Greases & Specialties Pvt. Ltd. (SGSPL) which exceeds the threshold limit stated under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulation, 2015 read with Rule 15 of the Companies (Meetings of Board & its Powers) Second Amendment Rules, 2014. SGSPL is one of the largest grease producers in Asia and they process grease on behalf of the
Company to meet the needs of Western Region as there is no grease plant thereat. Further the Company also procures lubricating oil and other chemicals from SGSPL. All these products are offered on competitive rates and the same is in ordinary course of business. The details in Form AOC-2 for material transaction(s) entered into by the Company with its related party is enclosed as Annexure VII. There were no other materially significant related party transactions with Promoters, Directors or the Management, their Subsidiaries or relatives, etc. during the year that may have potential conflict with the interest of the Company at large. Except as stated above as there were no other related party transaction during 2015-16, which were material in nature in terms of provisions of the Companies Act, 2013 and rules made there under, no disclosure is provided as prescribed under Section 188(2) of the Companies Act, 2013, for other related party transactions.
All related party transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. While granting omnibus approval, the Company complied with the provisions of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Shareholdersâ sanction is also obtained for material related party transaction proposed to be entered into during the year.
The related party transaction policy for determining materiality of related party transaction and also on dealing with related parties is uploaded on the Companyâs website at the we blink www.tidewaterindia.com/pdf/RELATED-PARTY-TRANSACTION-POLICY.pdf. The details of the transactions with related party are provided in the accompanying financial statements. The details of the said policy and other relevant details have also been furnished in the Corporate Governance Report.
DISCLOSURES UNDER RULE 8(5) OF COMPANIES
(ACCOUNTS) RULES, 2014
i. Financial summary or highlights: As detailed under the heading âPerformance and State of Companyâs Affairsâ
ii. Change in the nature of business, if any: None
iii. Details of Directors or Key Managerial Personnel (KMP), who were appointed or resigned during the year :
a. Directors appointed : Shri Praveen P. Kadle Shri B.J. Mahanta (w.e.f. 13th May, 2016) Shri Vinod S. Vyas
b. Directors resigned : Shri Kallol Datta (w.e.f. 11th August, 2016) Shri R.K. Singh (w.e.f. 22nd April, 2016)
c. Change in KMPs : None
iv. Names of Companies which have become or ceased to be Subsidiaries, Joint Venture Companies or Associate Companies during the year
a. Subsidiaries : There has been no change in the subsidiaries during the year 2015-16.
b. Joint Venture Company (JVC): There has been no change in JVC during the year 201516.
c. Associate Companies: There are no Associate Companies, in terms of provisions of the Companies Act, 2013.
v. Details relating to deposits: There were no fixed deposits of the Company from the public outstanding at the end of the financial year.
No fixed deposit has been accepted during the year and as such, there is no default in repayment of the said deposits.
vi. There has not been any deposit, which is not in compliance with the requirements of Chapter V of the Companies Act, 2013.
vii. No significant and material orders have been passed by any regulator(s) or Court(s) or Tribunal(s) impacting the going concern status and Companyâs operations in future.
viii. Adequacy of Internal Financial Control: Your Company has an adequate system of internal financial control as commensurate with the size and nature of business, which ensures that all assets are safeguarded and protected against loss and all transactions are recorded and reported correctly.
The internal control system of the Company is monitored and evaluated by internal auditors and their audit reports are periodically reviewed by the Audit Committee of the Board of Directors. The observations and comments of the Audit Committee are placed before the Board for reference.
The scope of Internal Audit includes audit of Purchase Facilities, Sales Promotion Expenditure and Incentive Scheme, Debtors and Creditors Policy, Inventory Policy, VAT and Cenvat matters and others, which are also considered by the Statutory Auditors while conducting audit of the Annual Financial Statements.
DISCLOSURE AS PER RULE 5(1) OF COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) AMENDMENT RULES, 2016
The disclosure as required under Rule 5(1) of Companies (Appointment & Remuneration of Managerial Personnel) Amendment Rules, 2016 is enclosed with this report as Annexure VIII.
Your company has not paid any remuneration attracting the provisions of Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Amendment Rules, 2016. Necessary information as required under the said Rule has been appended to this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
No cases were filed / reported to the Company pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 during the year under review.
AUDITOR & AUDITORâS REPORT
M/s. Ray & Ray, Chartered Accountants, retire as Auditors of your Company at the conclusion of the 93rd Annual General Meeting and being eligible, offer themselves for re-appointment. Members are requested to consider their re-appointment for financial year ending 31st March, 2017 and authorize the Board of Directors to decide on their remuneration.
The Auditors vide their report dated 30th May, 2016 have qualified with regard to diminution, if any, in the value of quoted investment of Rs.41 lakhs, held by the Company in Woeful Limited. Your Board of Directors do not consider this diminution as permanent hence the same has not been provided in the accounts for year 2015-16.
The Statement on Impact of Audit Qualifications as stipulated under Regulation 33(3)(d) of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed as Annexure IX.
A statement detailing significant Accounting Policies of the Company is annexed to the Accounts.
SECRETARIAL AUDIT
A Secretarial Audit was conducted during the year 201516 by the Secretarial Auditor, Shri Manoj Prasad Shaw of M/s. Manoj Prasad Shaw & Co., Practicing Company Secretaries, in accordance with the provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditorâs Report is attached as Annexure X and forms a part of this report of Directors. There are no qualifications made by the Secretarial Auditor in his Report.
BUSINESS RESPONSIBILITY REPORT
As stipulated under Regulation 34(2)(f) of the Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report describing the initiatives taken by the Company from environmental, social and governance perspective forms a part of the Annual Report
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO
A. CONSERVATION OF ENERGY
1. Steps taken or impact on conservation of energy
Energy conservation during the financial year has accrued as a result of the following steps taken at various locations of the Company.
SILVASSA
i. Centralized air conditioner in some parts of the plant were replaced with split air conditioners which resulted in reduction of power consumption up to 7000 units per year.
ii. 36 watt electrical fittings were replaced with 18 watt EELED lights, saving power consumption to the extent of 5000 units per year.
iii. Re-orientation of on/off switch in 1 litre line conveyor resulted in decrease of power consumption upto 500 units per year.
TURBHE
Copping machine and filling machine were replaced with a monoblock filling machine along with single belt conveyor saving electricity consumption to the extent of 2715 units per year.
ORAGADAM
i. Detuning of Harmonics was introduced in the electrical supply to avoid distribution loss and to protect electrical equipments.
ii. Grease agitator in one of the cooling kettles was modified to reduce mixing duration.
2. Steps taken by the Company for utilizing alternate sources of energy
None in particular
3. Capital investment on energy conservation equipments
None in particular
B. TECHNOLOGY ABSORPTION
1. Efforts made towards technology absorption
New products are developed by the R&D centers of the Company incorporating latest technology.
2. Benefits derived
The Company is able to produce quality products in view of the above.
3. Information regarding imported technology Not applicable.
4. Expenditure incurred on Research and Development
a. Capital Rs. 0.07 Crores
(last year Rs.0.56 Crores)
b. Recurring Rs.1.47 Crores
(last year Rs. 1.36 Crores)
c. Total Rs. 1.54 Crores
(last year Rs. 1.92 Crores)
d. Total R&D 0.12%
Expenditure as (last year 0.16 %)
percentage of
total turnover
C. FOREIGN EXCHAGE EARNINGS AND OUTGO
Foreign Exchange earnings during the year under review was Rs. 3.09 Crores (last year Rs. 1.01 Crores) while Foreign Exchange outgo was Rs. 155.56 Crores (last year Rs. 199.66 Crores).
ACKNOWLEDGEMENT
The Board of Directors would like to place on record their appreciation of the support and assistance received from the Government of India and the State Government. The Directors are thankful to the Companyâs Bankers / Shareholders / all other Stakeholders and the esteemed customers for their continued support.
The Board deeply appreciates the commitment and the invaluable contribution of all the employees towards the satisfactory performance of your Company.
On behalf of the Board Kolkata
Subir Roy Choudhury
11th August, 2016 Chairman
Mar 31, 2015
Dear Shareholders,
The Directors take pleasure in presenting their Ninety Second Annual
Report on the operations of the Company together with audited accounts
for the year ended 31st March, 2015.
Amount
(Rupees in crores)
Year ended Year ended
31st March, 2015 31st March,2014
The Accounts before charging
depreciation show a profit of 250.86 112.58
From which has been deducted :
Depreciation (Net) 7.45 8.82
Provision for Taxation 72.25 79.70 35.42 44.24
171.16 68.34
To which is added the balance
brought forward from the last
accounts of 304.61 263.48
475.77 331.82
The Directors have transferred
to General Reserve - 6.83
Leaving a balance of 475.77 324.99
The Directors have paid Interim
Dividend @1000% on the
Ordinary Shares amounting to 8.71 -
And the Directors now recommend
a final dividend @ 2500% (p.y.2000%)
on the Ordinary Shares amounting to 21.78 17.42
Tax on Dividend 7.23 2.96
Leaving a balance to be carried
forward 438.05 304.61
PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
Your Company has completed another year of excellent performance by
achieving an impressive turnover of Rs.1207.28 Crores (net of discount
and rebates Rs. 1111.28 Crores) as compared to Rs.1154.91 Crores (net
of discount and rebates Rs. 1065.90 Crores) in the previous year, an
increase of 4.53%. Notwithstanding the slowdown in the economy and
continued fierce competition from various players in the industry, the
increase in sales could be possible through adoption of aggressive
marketing strategies and continued focus on the premium segment. The
Profit before Tax at Rs. 243.41 Crores was substantially higher than
that recorded in the previous year of Rs.103.76 Crores primarily on
account of adjustment of the following exceptional items:
i. Rs.107.39 Crores representing profit on transfer of business as
Slump Sale to Joint Venture Company (JVC) promoted with JX Nippon Oil&
Energy Corporation, Japan (JXNOE);
ii. Rs.12.75 Crores representing profit on sale of property at
Royapuram, Chennai;
iii. Rs. 30.20 Crores representing depreciation written back in view of
change of depreciation method.
As such, during 2014-15, the Company achieved an operating Profit
before Tax of Rs. 93.07 Crores, even though the business relating to
''ENEOS'' range of products had been transferred to the newly formed JVC
viz. JX Nippon TWO Lubricants India Pvt. Ltd. (JXTL) during the year
under review. This profit could be achieved through rationalization of
pricing structure, adoption of austerity measures and optimum
procurement of raw materials. Nonetheless, the overall lubricant
industry sales volume remained stagnant due to use of better quality
fuels, advanced engine design, long drain lubes and lower sump
capacity.
Good brand equity of the Company''s products has helped the Company in
achieving brand loyalty in niche market segments even in such a
competitive market. Brand building effort remained a major focus area
during the year which your company addressed by adopting a more
customer-oriented approach, executing extensive campaigns on the
electronic media and undertaking elaborate field level activities. The
''baazar'' segment also remained one of the main focal points during the
year and tie-up with the leading Original Equipment Manufacturers
(OEMs) also helped in extending the product line of the Company and
increase its presence in new markets.
The Company''s Plants at Silvassa, Turbhe, Oragadam, Faridabad and
Ramkristopur continue to be accredited under ISO 9001:2008 quality
standards. The Silvassa and Oragadam Plants had obtained accreditation
under ISO 14001:2004 for environmental standards. The support provided
by the Company''s accredited R&D Centers has immensely helped in
improving the quality of products and upgrading product formulation.
The Company''s products primarily marketed under the ''VEEDOL'' brand name
are well established and accepted in the industry for their quality and
range.
On 21st July, 2014, the Company signed an agreement with JXNOE to form
a JVC viz. JXTL, wherein your Company and JXNOE have 50:50 stake. On
and from commencement of operations of JXTL, marketing of the ''ENEOS''
brand of products has been undertaken by the new JVC. The production
facilities, warehousing, logistic and other ancillary support are
extended by your Company to the JVC. Details of performance of this
joint venture are stated in the later part of the report.
BRAND ''VEEDOL''
With the acquisition of Veedol International Limited, the Company got
the global rights to a wide portfolio of registered trademarks for the
master brand ''VEEDOL'' as well as its associate product sub-brands and
iconic logos. The Company has exploited this opportunity for marketing
lubricants under the ''VEEDOL'' brand in various geographies around the
world.
INTERNATIONAL OPERATIONS
The Company has floated two wholly owned subsidiaries viz. Veedol
International DMCC, Dubai and Veedol International BV, Netherlands to
cater to the Middle East Asian Region and Europe, respectively.
Veedol Deutschland GmbH has been incorporated as a 100% subsidiary of
Veedol International BV to relaunch the brand in Germany, Austria and
Switzerland.
Further during the year, Veedol International Americas Inc has also
been floated as a wholly owned subsidiary of Veedol International
Limited, UK. This shall relaunch Veedol in Andean region of South
America.
Veedol International Limited has also licensed the Veedol brand to a
licensee in North America and another licensee in Bangladesh for sales
thereat.
WIND ENERGY BUSINESS
During the year 2014-15, the revenue generated from the Wind Energy
Project amounted to Rs.1.60 Crores. The Company produces enough clean
energy to offset its electricity consumption from fossil fuel sources.
The sector is poised to provide adequate returns and continue to
generate cash profits over the years.
DIVIDEND
In view of improved financial results, your Directors have the pleasure
in recommending a final Dividend of 2500% (Rs. 250.00 per ordinary
share) on the Ordinary Shares for the financial year 2014-15 as against
2000% (Rs. 200.00 per ordinary share) for the previous year to the
equity shareholders of the Company. In view of improved operations, the
Directors at its 298th Meeting held on 3rd November 2014 declared
interim dividend of 1000% (Rs.100.00 per ordinary share) involving a
total dividend outflow of Rs.8.71 Crores. The same was distributed to
the Shareholders on 1 st December, 2014. The final dividend is in
addition to the interim dividend, as already distributed.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review, as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchange(s) in India is presented in a separate section forming part of
the Annual Report as Annexure I.
CORPORATE GOVERNANCE
Your Directors affirm their commitment to good Corporate Governance
practices. The report on Corporate Governance as per the requirement of
the Listing Agreement with the Stock Exchange(s) together with a
certificate from the Statutory Auditors of the Company and declaration
by the Managing Director forms part of this report.
SUBSIDIARY COMPANIES
On acquisition of 100% shares, Veedol International Limited had become
a wholly owned subsidiary of the Company with effect from October,
2011. Further to explore possibilities of marketing the products under
''Veedol'' brand in the Middle East Asian markets, your Company had
floated another wholly owned subsidiary under the name Veedol
International DMCC at Dubai, UAE.
With a view to cater to the European markets (excepting the DACH
region), the Company had set up another wholly owned subsidiary viz.
Veedol International BV, having its office at Amsterdam, Netherlands.
As the ''Veedol'' brand enjoys considerable brand equity in the DACH
region, Veedol Deutschland GmbH had been set up as a 100% subsidiary of
Veedol
International BV. Veedol Deutschland GmbH had initiated its marketing
operations for the DACH region and the same operates from Hamburg,
Germany.
Veedol International Americas Inc. has been incorporated during the
year as a 100% subsidiary of Veedol International Limited. Veedol
International Americas Inc. will market Veedol products in the Andean
region of South America. This Company operates from Ontario, Canada.
The Statement of Accounts along with the Report of the Board of
Directors and Auditors relating to your Company''s Overseas Subsidiaries
viz., Veedol International Limited, Veedol International DMCC and
Veedol International BV for the financial year 2014-15 are not annexed.
Shareholders, who wish to have a copy of the full Report and Accounts
of the aforesaid subsidiary companies, will be provided the same, on
receipt of a written request. These documents will also be available
for inspection by any shareholder at the Registered Office of the
Company and the concerned subsidiary companies during business hours on
all working days.
PERFORMANCE OF SUBSIDIARIES AND JOINT VENTURE COMPANIES AS PER RULE
8(1) OF THE COMPANIES (ACCOUNTS) RULES, 2014
A report on the performance and the financial position of each of the
Subsidiaries and Joint Venture Companies as per the Companies Act, 2013
is annexed to the Consolidated Financial Statement and hence not
repeated here for the sake of brevity.
The policy for determining material subsidiaries, as approved may be
referred to, at the official website of the Company at the weblink
www.tidewaterindia.com/ pdf/Material-Subsidiary-Policy.pdf.
CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements have been prepared in accordance
with the principles and procedures for the preparation and presentation
of Consolidated Accounts as set out in the Accounting Standards (AS 21)
on Consolidated Financial Statements notified by the Companies''
Accounting Standard Rules, 2006, (as amended). The Audited Consolidated
Financial Statement together with Auditors'' Report forms part of the
Annual Report.
The group recorded a Consolidated Profit before Tax of Rs. 232.12
Crores for the financial year 2014-15 as
compared to Rs. 100.22 Crores, as achieved in the preceding year.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(5) of the Companies Act,
2013, with respect to Directors'' Responsibility Statement, it is hereby
confirmed that:
i. In the preparation of the annual accounts for the financial year
ended 31st March, 2015, the applicable accounting standards had been
followed along with the proper explanation relating to material
departures, if any;
ii. The Directors had selected such accounting policies and applied
them consistently and made judgements and estimates that were
reasonable and prudent so as to give a true and fair view of the state
of affairs of the company at the end of the financial year and of the
profit and loss of the company for that period;
iii. The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
iv. The Directors had prepared the annual accounts on a going concern
basis;
v. The Directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls were
adequate and operating effectively; and
vi. The Directors had devised proper system to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Particulars of loan given, investment made and guarantee given
alongwith the purpose for which the loan or guarantee is proposed to be
utilized by the recipient is provided in the financial statement
(Please refer Note No. 10, 11,22.1 and 22.8 to the standalone financial
statement).
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION & PROTECTION FUND
Pursuant to the provisions of Section 205A(5) and 205C of the Companies
Act, 1956, relevant amounts which remained unpaid or unclaimed for a
period of seven years have been transferred by the Company, from time
to time on due dates, to the Investor Education and Protection Fund.
Pursuant to the provisions of Investor Education and Protection Fund
(Uploading of information regarding unpaid and unclaimed amounts lying
with Companies) Rules, 2012, the Company has uploaded the details of
unpaid and unclaimed amounts lying with the Company as on 29th August,
2014 (date of last AGM) on the Company''s website
(www.tidewaterindia.com), as also on the Ministry of Corporate Affairs''
website.
CORPORATE WEBSITE
The website of your company, www.tidewaterindia.com carries a
comprehensive database of information of interest to the stakeholders
including the corporate profile, information with regard to products,
plants and various depots, financial performance of your Company and
others.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business, during the period
under review.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF
THE COMPANY
There has been no material change(s) and commitment(s) affecting the
financial position of the Company, during the period under review.
REPORTABLE FRAUDS
No fraud has been reported by the auditors under Section 143(12) of the
Companies Act, 2013, during the period under review.
DIRECTORS
Shri Sunil Munshi has been appointed as Additional Director with effect
from 3rd November, 2014. He will hold office upto the date of the
ensuing Annual General Meeting and is eligible for re-appointment. The
Company has received notice under Section 160 of the Companies Act,
2013 proposing his appointment as Director.
In accordance with the provisions of Section 152(6)(c) of the Companies
Act, 2013 and your Company''s Articles of Association, Shri S. Das,
Director retires by rotation and is eligible for re-appointment.
On recommendation of the Nomination and Remuneration Committee, the
Board on 3rd November, 2014 and 7th April, 2015 appointed Shri S.
Sundareshan and Ms. Nayantara Palchoudhuri, respectively as Independent
Directors designated as Additional Directors for a period of 3 years
with effect from their respective date of appointment. However, being
Additional Directors, they will hold office upto the date of the
ensuing Annual General Meeting and are eligible for appointment for
specified period(s), on approval of the shareholders. The Company has
received notices under Section 160 of the Companies Act, 2013 proposing
their appointment as Directors.
Appropriate resolutions seeking appointment of Shri S.Sundareshan, Shri
Sunil Munshi and Ms Nayantara Palchoudhuri as Directors are appearing
in the Notice convening the 92nd Annual General Meeting of the Company.
Brief resume / details relating to Shri S. Das, Shri S.Sundareshan,
Shri Sunil Munshi and Ms. Nayantara Palchoudhuri are furnished in the
said notice.
Shri S. Swaminathan resigned from the Board of Directors of the Company
with effect from 3rd November, 2014 in view of envisaged paucity of
adequate time as deemed necessary for effective discharge of his duties
as a Director of the Company. The same has been noted by the Board at
its 298th meeting held on 3rd November, 2014. The Board of Directors
also placed on record the valued guidance received from him during his
tenure of directorship in the Company.
Pursuant to Clause 49 it is disclosed that no Directors share any
relationship inter-se.
DECLARATIONS BY THE INDEPENDENT DIRECTORS
All Independent Directors have given declarations to the Company
stating their independence pursuant to Section 149 of the Companies
Act, 2013 and the same have been noted by the Board as and when such
Directors were appointed.
POLICY ON DIRECTORS'' APPOINTMENT & REMUNERATION
Section 178 of the Companies Act, 2013, is applicable to the Company.
The Company appoints Independent Directors, being persons having rich
experience and domain knowledge, to serve on the Board. Independent
Directors are initially appointed by the Board on recommendation of the
Nomination & Remuneration Committee. Non-Executive Directors are
appointed by the Board from time to time, subject to approval of the
shareholders. Executive Director(s) are appointed based on their
performance and their contribution towards the Company. Appointment(s)
of all Directors are formalized on approval of the shareholders.
The Company has framed a Remuneration Policy, in relation to
remuneration of Directors, Key Managerial Personnel, Senior Management
and other employees, as recommended by the Nomination & Remuneration
Committee of the Board of Directors. The same, inter- alia contains
matters stated under Section 178 of the Companies Act, 2013 read with
Clause 49 of the Listing Agreement, as revised. The details of such
policy i.e. summary, web link, etc. have been furnished in the
Corporate Governance Report forming part of this Annual Report.
The Remuneration Policy, as framed, is enclosed with the Directors''
Report as Annexure II.
Shri R. N. Ghosal, Managing Director does not receive any remuneration
from any other subsidiary company. This may be deemed to be a
disclosure as required under Section 197(14) of the Companies Act,
2013.
A statement indicating manner in which annual evaluation of the Board
(including Committees) and individual Directors is carried out has been
provided separately in this report.
Necessary disclosure as required under Schedule V has been provided
under Corporate Governance report in relation to remuneration of Shri
R. N. Ghosal, Managing Director.
ANNUAL EVALUATION OF BOARD''S PERFORMANCE
In compliance with the Companies Act, 2013 and Clause 49 of the Listing
Agreement, the performance evaluation of the Board was carried out
during the year under review. The Board Evaluation and Diversity Policy
has been framed by the Company for this purpose
establishing, inter-alia, qualifications, positive attributes,
independence of Directors and determination of criteria based on which
such evaluation is required to be carried out. Separate meetings of
Independent Directors were held on 4th February, 2015 and 7th April,
2015 wherein the said policy was approved and required evaluation was
carried out in terms thereof. More details on the same are given in the
Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY
The Company recognizes that its operations impact a wide community of
stakeholders, including investors, employees, customers, business
associates and local communities and that appropriate attention to the
fulfillment of these social responsibilities can enhance overall
performance.
The Board of Directors of the Company, in this regard, has devised a
Corporate Social Responsibility (CSR) Policy which, inter-alia states
mode of constitution of CSR Committee, activities which can be
undertaken, mode of implementation, quantum of investment, etc. The
same is available on the Company''s website at the weblink
www.tidewaterindia.com/pdf/CSR-Policy.pdf. The said policy is also
enclosed with the Directors'' Report as Annexure III. Imparting of
training to mechanics / garage owners for skill development by way of
setting up an auto-mechanic school had been identified as a CSR
activity being covered under Schedule VII of the Companies Act, 2013.
The CSR Committee has also been constituted by the Board, which as on
31st March, 2015 comprises of Shri
A. Mukherjee, as Chairman, Shri R. N. Ghosal and Shri S. Das. The
Committee met twice during the year on 4th April, 2014 and 27th May,
2014 to finalize the CSR Policy, identify CSR activities, etc. During
the year the Company has appointed an organization viz. Utkarsh for
setting up the school, referred above.
The details in relation to CSR reporting as required under Rule 8 of
Companies (CSR Policy) Rules, 2014 is enclosed with this report as
Annexure IV.
Other relevant details in relation to CSR Committee, such as terms of
reference of the CSR Committee, number and dates of meetings held and
attendance of the Directors are given separately in the attached
Corporate Governance Report.
VIGIL MECHANISM
Fraud-free and corruption-free work culture has been core to the
Company. In view of the potential risk of
fraud and corruption due to rapid growth and geographical spread of
operations, the Company has put even greater emphasis to address this
risk.
To meet this objective, a Vigil Mechanism Policy akin to Whistle Blower
Policy has been laid down. More details about the policy are given in
the Corporate Governance Report.
RISK MANAGEMENT
The Company has identified various risks faced by it from different
areas. As required under Clause 49 of the Standard Listing Agreement
with the Stock Exchange(s), the Board has adopted a Risk Management
Plan for the Company which includes inter-alia identification of
elements of risks which may threaten the existence of the Company.
Structures are present so that risks are inherently monitored and
controlled.
Relevant details of the Risk Management Plan including implementation
thereof and the Risk Management Committee have been furnished under the
Corporate Governance Report.
FIRE AT AHMEDABAD DEPOT
On 9th April, 2015 a fire occurred at the third party consignment depot
of the Company at Ahmedabad, Gujarat. Stock of lubricants worth Rs.
1.35 Crores, approximately had been damaged. The entire stock was
covered by insurance and process of claim recovery is underway. To
restore normalcy of operations, the Company initiated steps for making
interim supply of goods from other depots in Gujarat.
Other than above, there were no other material changes and commitments,
affecting the financial positions of the Company which have occurred
between 1st April, 2015 and the date of this report.
EMPLOYEE WELFARE SCHEME & TRUST
In terms of the approval of the shareholders dated 2nd March, 2011,
your Company implemented Tide Water Oil Co. (India) Ltd. Employee
Welfare Scheme for granting / allotting options to the eligible
employees of the company through Tide Water Oil Co. (India) Ltd.
Employee Welfare Trust. With the promulgation of Securities & Exchange
Board of India (Share Based Employee Benefit) Regulations, 2014, the
Board of Directors of the Company vide their resolution dated
7th April, 2015, proposed to align the existing scheme and the
provisions of the existing Trust, with that of the said Regulation. As
the amended scheme will come into effect on and from the date of
approval by the shareholders, to be obtained later, no disclosure is
made in this report and in accompanying financial statements, which are
specifically, required for Employee Stock Option Schemes, framed under
Guidelines / Regulations as promulgated by Securities Exchange Board of
India, in this regard.
FURTHER DISCLOSURES UNDER THE COMPANIES ACT, 2013
i. Extract of the Annual Return
The extract of the Annual Return is enclosed as Annexure - V.
ii. Number of Board Meetings
There were 5 (Five) meetings of the Board of Directors held during the
year 2014-15 on 4th April, 2014, 27th May, 2014, 11th August, 2014, 3rd
November, 2014 and 4th February, 2015. The details of attendance of the
Directors in the said Board Meetings have been furnished in the
Corporate Governance Report. Details of Committee meetings held during
2014-15 and attendance thereof by each Director is also furnished in
the said Corporate Governance Report.
iii. Changes in Share Capital
The paid up equity share capital as on 31st March, 2015 was Rs. 0.87
Crores divided into 8,71,200 ordinary shares of Rs. 10/- each, fully
paid up. During the year the Company has not issued any ordinary
shares nor shares with differential voting rights nor granted stock
options nor sweat equity. As on 31st March, 2015 none of the Directors
of the Company hold shares or convertible instruments of the Company.
iv. Composition of Audit Committee
The Board has constituted the Audit Committee which comprises of Shri
A. Mukherjee as the Chairman, Shri S. Sundareshan, Shri S. Roy
Choudhury, Shri R. K. Singh and Shri S. Das. All recommendations of the
Audit Committee have been accepted by the Board of Directors.
More details on the Committee are given in the Corporate Governance
Report.
v. Related Party Transactions
During the year 2014-15, the Company entered into transactions,
cumulative value whereof amounts to Rs. 101.58 Crores with Standard
Greases and Specialities Private Limited which exceeds the threshold
limit stated under Clause 49 of the revised Listing Agreement. However,
the same is within the threshold limit as stated under Rule 15 of the
Companies (Meetings of Board & its Powers) Rules, 2014. There were no
other materially significant related party transactions with Promoters,
Directors or the Management, their Subsidiaries or relatives, etc.
during the year that may have potential conflict with the interest of
the Company at large. As such, all related party transactions are
entered on arm''s length basis, in ordinary course of business and in
compliance with the applicable provisions of the Companies Act, 2013
read with relevant provisions of the revised Listing Agreement. As
there were no related party transactions during 2014-15, which were
material in nature in terms of provisions of the Companies Act, 2013
and rules made thereunder, no disclosure is provided as required under
Section 188(2) of the Companies Act, 2013.
All related party transactions are presented to the Audit Committee and
the Board. Omnibus approval is obtained for the transactions which are
foreseen and repetitive in nature. While granting omnibus approval, the
Company complied with the provisions of Clause 49 of the revised
Listing Agreement with the Stock Exchange(s). Shareholders'' sanction
is also obtained for material related party transaction proposed to be
entered into during the year.
The related party transaction policy for determining materiality of
related party transaction and also on dealing with related parties is
uploaded on the Company''s website at the weblink
www.tidewaterindia.com/pdf/RELATED-PARTY- TRANSACTION-POLICY.pdf. The
details of the transactions with related party are provided in the
accompanying financial statement. The details of the said policy and
other relevant details have also been furnished in the Corporate
Governance Report.
DISCLOSURES UNDER RULE 8(5) OF COMPANIES (ACCOUNTS) RULES, 2014
i. Financial summary or highlights : As detailed under the heading
''Performance and State of Company''s Affairs''
ii. Change in the nature of business, if any : None
iii. Details of Directors or Key Managerial Personnel (KMP), who were
appointed or resigned during the year:
a. Director(s) appointed : Shri S. Sundareshan
Shri S. Roy Choudhury
Shri Sunil Munshi
Ms. N. Palchoudhuri
b. Director(s) resigned : Shri S. Swaminathan
c. Change in KMPs : None
iv. Names of Companies which have become or ceased to be Subsidiaries,
Joint Venture Companies or Associate Companies during the year
a. Subsidiaries : Veedol International Americas Inc. (VIA) has been
floated as a step-down subsidiary of the Company. All shares of VIA are
held by Veedol International Limited, UK.
Other than above, there has been no change in the subsidiaries during
the year 2014-15.
b. Joint Venture Company (JVC) : JX Nippon TWO Lubricants India Pvt.
Ltd. (JXTL) has been incorporated on 8th August, 2014. 50% of the
shares of JXTL are held by Tide Water Oil Co. (India) Ltd.
Other than this, there has been no change in JVC during the year
2014-15.
c. Associate Companies: There are no Associate Companies, in terms of
the provisions of the Companies Act, 2013.
v. Details relating to deposits: There were no fixed deposits of the
Company from the public, outstanding at the end of the financial year.
No fixed deposit has been accepted during the year and as such, there
is no default in repayment of the said deposits.
vi. There has not been any deposit, which is not in compliance with the
requirements of Chapter V of the Companies Act, 2013.
vii. No significant and material orders have been passed by any
regulator(s) or Court(s) or Tribunal(s) impacting the going concern
status and Company''s operations in future.
viii. Adequacy of Internal Financial Control: Your Company has an
adequate system of internal control procedure as commensurate with the
size and nature of business, which ensures that all assets are
safeguarded and protected against loss and all transactions are
recorded and reported correctly.
The internal control system of the Company is monitored and evaluated
by Internal Auditors and their audit reports are periodically reviewed
by the Audit Committee of the Board of Directors. The observations and
comments of the Audit Committee are placed before the Board for
reference.
The scope of Internal Audit includes audit of Purchase Policy, Sales
Promotion Expenditure and Incentive Scheme, Debtors and Creditors
Policy, Inventory Policy, VAT and Cenvat matters and others, which are
also considered by the Statutory Auditors while conducting audit of the
Annual Financial Statements.
DISCLOSURE AS PER RULE 5(1) OF COMPANIES (APPOINTMENT & REMUNERATION OF
MANAGERIAL PERSONNEL) RULES, 2014
The disclosure as required under Rule 5(1) of Companies (Appointment &
Remuneration of Managerial Personnel) Rules, 2014 is enclosed with this
report as Annexure VI.
Your company has not paid any remuneration attracting the provisions of
Rule 5(2) of the Companies (Appointment & Remuneration of Managerial
Personnel) Rules, 2014. Hence, no information is required to be
appended to this report, in this regard.
AUDITOR & AUDITOR''S REPORT
M/s. Ray & Ray, Chartered Accountants, retire as Auditors of your
Company at the conclusion of the 92nd Annual General Meeting and being
eligible, offer themselves for re-appointment. Members are requested to
consider their re-appointment for financial year ending 31st March,
2016 and authorize the Board of Directors to decide on their
remuneration.
The Auditors vide their report dated 30th May, 2015 have qualified with
regard to diminution, if any, in the value of quoted investment of
Rs.0.41 Crores, held by
the Company in Webfil Limited. Your Board of Directors do not consider
this diminution as permanent, hence the same has not been provided for
in the accounts for the year 2014-15.
A statement detailing significant Accounting Policies of the Company is
annexed to the Accounts.
SECRETARIAL AUDIT
A Secretarial Audit was conducted during the year 2014- 15 by the
Secretarial Auditor, Shri Manoj Prasad Shaw of M/s. Manoj Prasad Shaw &
Co., Practising Company Secretaries, in accordance with the provisions
of Section 204 of the Companies Act, 2013. The Secretarial Auditor''s
Report is attached as Annexure VII and forms a part of this report of
Directors. There are no qualifications made by the Secretarial Auditor
in his Report. However, in terms of the said report it has been
observed that the Company has not appointed ''Woman Director'' pursuant
to Section 149(1) of the Companies Act, 2013 and Clause 49(II)(A)(1) of
the Listing Agreement, during the year.
Your Directors state that, the Company took all reasonable steps, as
deemed necessary, for effecting the said appointment before expiry of
the prescribed time. However, in view of involvement of procedural
intricacies, the concerned appointment could be formalized only on 7th
April, 2015.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
A. CONSERVATION OF ENERGY
1. Steps taken or impact on conservation of energy
Energy conservation during the financial year has accrued as a result
of the following steps taken at various locations of the Company.
Silvassa
i) Old traditional copper blast chokes were replaced with electronic
blast chokes which resulted in reduction of power consumption upto 900
units per year.
ii) Traditional fluorescent 72 watt and 36 watt tube lights in office
area were replaced with 36 watt and 18 watt EELED lights, respectively
saving electric consumption to the extent of 5508 units per year.
Turbhe
Modification made in the unscrambler belt to feed bottles directly on
rotating disc resulted in decrease of power consumption upto 900 units
per year.
Oragadam
i) VFD was installed for Filling Machine-FM-103 Conveyor motor to
control the speed drive, according to requirement, leading to energy
saving.
ii) Four new Air-Conditioner were procured with 4-star rating for
energy saving
iii) One old street light was replaced with LED Light, for energy
saving.
2. Steps taken by the Company for utilising alternate sources of energy
None in particular
3. Capital investment on energy conservation equipments
None in particular
B. TECHNOLOGY ABSORPTION
1. Efforts made towards technology absorption
The Company had a technical collaboration agreement with JX Nippon Oil
& Energy Corporation (formerly Nippon Oil Corporation), Japan, for
manufacturing hi - tech lubricants. The product formulations received
from collaborator have been utilized for manufacture of such products
during part of the year.
After formation of the Joint Venture Company (JVC) viz. JX Nippon TWO
Lubricants India Private Limited (JXTL), the technical collaboration
has ceased to have effect. Now product formulations are provided by
JXTL to your Company, which is utilized to manufacture products for the
JVC.
2. Benefits derived
With the absorption and adoption of above technical know - how, the
Company has been able to produce quality products in India, specially
for the Japanese OEM Segment.
3. Information regarding imported technology
i. Technology imported for part of the year from JX Nippon Oil & Energy
Corporation (formerly Nippon Oil Corporation), Japan for manufacture of
hi-tech lubricants.
ii. Year of import: 1993 - 94 (agreement renewed last in 2013-14 for 1
year)
iii. Technology has been partially absorbed.
iv. Reasons for partial absorption: Manufacturing process followed does
not require full absorption of imported technology.
4. Expenditure incurred on Research and Development
a. Capital Rs. 0.56 Crores
(last year Rs. 0.14 Crores)
b. Recurring Rs.1.36 Crores
(last year Rs. 1.28 Crores)
c. Total Rs. 1.92 Crores
(last year Rs. 1.42 Crores)
d. Total R&D 0.16%
Expenditure as (last year 0.12 %) percentage of
total turnover
C. FOREIGN EXCHAGE EARNINGS AND OUTGO
Foreign Exchange earnings during the year under review was Rs.1.01
Crores (last year Rs. 0.53 Crores) while Foreign Exchange outgo was Rs.
199.65 Crores (last year Rs. 176.34 Crores).
ACKNOWLEDGEMENT
The Board of Directors would like to place on record their appreciation
of the support and assistance received from the Government of India and
the State Government. The Directors are thankful to the Company''s
Bankers / Shareholders / all other Stakeholders and the esteemed
customers for their continued support.
The Board deeply appreciates the commitment and the invaluable
contribution of all the employees towards the satisfactory performance
of your Company.
On behalf of the Board
Kolkata Kallol Datta
30th May, 2015 Chairman
Mar 31, 2013
Dear Shareholders,
The Directors take pleasure in presenting their Annual Report on the
operations of the Company together with audited accounts for the year
ended 31st March, 2013
Amount
(Rupees in crores)
Year ended Year ended
31st March, 2013 31st March, 2012
The Accounts before charging
depreciation show a profit of 103.29 95.45
From which has been deducted :
Depreciation (Net) 9.09 9.26
Provision for Taxation 31.27 40.36 27.11 36.37
62.93 59.08
To which is added the balance
brought forward from the
last accounts of 222.13 181.12
285.06 240.20
The Directors have transferred to
General Reserve 6.29 5.91
Leaving a balance of 278.77 234.29
And the Directors now recommend
a dividend @ 1500% (p.y. 1200%)
on the Ordinary Shares amounting to 13.07 10.46
Tax on Dividend 2.22 1.70
Leaving a balance to be carried forward of 263.48 222.13
PERFORMANCE
Your Company has completed another successful year of operation. During
the year under review the turnover recorded was the highest-ever in the
history of the Company at Rs. 1084.24 crores as compared to Rs.1004.47
crores in the previous year, an increase of 7.94%. This performance is
even more satisfying as it has been achieved despite difficult market
conditions arising out of slowdown in the economy. Moreover, in spite
of sharp rise in input costs including base oil prices internationally,
the Company achieved a Profit Before Tax of Rs 94.20 crores as compared
to Rs. 86.19 crores in the preceding year. The higher profit achieved
was primarily on account of the rationalization of the pricing
structure, adoption of austerity measures and optimum procurement of
raw materials.
The brand equity of the Company''s products has helped the Company to
remain in good stead even in such a turbulent business environment and
enabled it to maintain brand loyalty in its niche markets. The
lubricant market remained largely sluggish due to ongoing upgradation
of engine design and increased usage of long drain lubes. However, your
Company has been able to maintain its performance due to its continued
focus on the bazaar segment. Enhancement of brand awareness also
remained a major focus area during the year which your Company
addressed by adopting more customer-centric approach, executing
campaigns on the electronic media and undertaking elaborate field level
activities. Realignment of the distribution network, efforts in
maintaining direct contacts with the customers and various strategic
alliances with the leading Original Equipment Manufacturers (OEM),
helped your Company to achieve improved results and increase its
presence in new markets.
The Company''s Plants at Silvassa, Turbhe, Oragadam and Ramkristopur
continue to be accredited under ISO 9001:2008 quality standards. The
Silvassa and Oragadam Plants had also obtained accreditation under ISO
14001:2004 for environmental standards. The activities carried out by
the Company''s accredited R&D Centers have been successful in
upgrading product formulation and the process of absorption of latest
technology in the industry.
The Company''s products primarily marketed under the "VEEDOL"
brand name are well established and accepted in the industry for their
quality and range. The products manufactured under the technical
collaboration agreement with JX Nippon Oil & Energy Corporation
(formerly Nippon Oil Corporation) and marketed under the "ENEOS"
brand name have established themselves in select segments.
BRAND ''VEEDOL''
During the year 2011-12, your Company acquired 100% shares of Veedol
International Limited from Castrol Limited and Lubricants UK Limited,
wholly owned subsidiaries of BP Plc. Through this acquisition the
Company got the global rights to a wide portfolio of registered trade
marks for the master brand "VEEDOL" as well as its associated
product sub- brands and iconic logos. The acquisition of Veedol
International Limited by your Company opened up opportunities for
export and sale of lubricants under the "VEEDOL" brand to various
geographies around the world. To leverage the salience of the Veedol
brand in international markets, the Company has initiated steps for
marketing its products in Middle East, Asia and Europe.
INTERNATIONAL OPERATIONS
The Company has established a 100% subsidiary in the United Arab
Emirates, namely, Veedol International DMCC to cater to the Middle East
region. Country distributors have been appointed in various countries
of the GCC and Levant and the Brand relaunched. Initial response is
encouraging. During the year the Company has also set up Veedol
International BV in the Netherlands, as a wholly owned subsidiary. This
is expected to relaunch Veedol in Europe in 2013-14.
WIND ENERGY PROJECT
During the year 2012-13, the revenue generated from the Wind Energy
Project amounted to Rs. 2.48 crores. The sector is poised to provide
adequate returns and continue to generate cash profits over the years.
EMPLOYEE WELFARE SCHEME AND TRUST
In terms of the approval of the shareholders dated 2nd March, 2011,
your Company implemented Tide Water Oil Company (India) Limited
Employee Welfare Scheme, for granting / allotting options upto 3% of
the paid - up share capital of the Company, to the eligible employees
of the Company through Tide Water Oil Company (India) Limited Employee
Welfare Trust. This Trust has been constituted for the purpose of
acquisition of ordinary shares of the Company from the secondary
market, holding the ordinary shares and allocation / transfer of these
shares from time to time in line with the terms and conditions
specified under the Scheme. For the purpose of the said acquisition a
loan of Rs. 17 crores has been obtained by the T rust from the Company.
At the outset, the Trust has purchased 22,425 Ordinary Shares and the
Scheme is being administered by Compensation Committee of the Board of
Directors.
During the year under review the Trust has granted options of 2811 nos.
underlying Ordinary Shares of the Company to the eligible employees.
However, in terms of new clarifications announced vide Circular no.
CIR/CFD/DIL/3/2013 dated 17th January, 2013 and Circular no.
CIR/CFD/DIL/7/2013 dated 13th May, 2013, issued by Securities Exchange
Board of India (SEBI), the Scheme will be aligned with SEBI (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999, within stipulated time.
DIVIDEND
In view of improved financial results, your Directors have the pleasure
in recommending a dividend of 1500% (Rs.150/- per ordinary share) on
the Ordinary Shares for the financial year 2012-13 as against a
cumulative dividend of 1200% (Rs.120/- per ordinary share) for the
previous year to the equity shareholders of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review, as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchange(s) in India is presented in a separate section forming part of
the Annual Report as Annexure I.
CORPORATE GOVERNANCE
Your Directors affirm their commitment to good Corporate Governance
practices. The report on Corporate Governance as per the requirement of
the Listing Agreement with the Stock Exchange together with a
certificate from the Statutory Auditors of the Company and declaration
by the Managing Director forms part of this report.
FIXED DEPOSITS
There were no Fixed Deposits from the public outstanding with the
Company at the end of the financial year.
SUBSIDIARY
On acquisition of 100% shares, Veedol International Limited had become
a subsidiary of the Company with effect from October, 2011. Moreover,
to explore the possibilities of marketing the products under
"Veedol" brand in Middle East, Asian and European markets, your
Company has floated 100% subsidiaries under the name Veedol
International DMCC in Dubai, UAE and Veedol International BV, in the
Netherlands, respectively.
The statement pursuant to Section 212 of the Companies Act, 1956,
containing details of the Company''s overseas subsidiaries forms part
of the Annual Report.
In view of General Circular No. 2/2011 dated 8th February, 2011 issued
by the Ministry of Corporate Affairs, the Audited Statement of Accounts
alongwith the Report of the Board of Directors and Auditors relating to
your Company''s Overseas Subsidiaries viz., Veedol International
Limited, Veedol International DMCC and Veedol International BV for the
financial year 2012-13 are not annexed as required under Section 212(1)
of the Companies Act, 1956. Shareholders who wish to have a copy of
the full Report and Accounts of the aforesaid subsidiary companies,
will be provided the same, on receipt of a written request. These
documents will also be available for inspection by any shareholder at
the Registered Office of the Company and the concerned subsidiary
companies during business hours on all working days. However, as
directed by the Ministry of Corporate Affairs, Govt. of India vide the
aforesaid Circular, relevant particulars of the subsidiaries have been
included in the Report.
CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements have been prepared in accordance
with the principles and procedures for the preparation and presentation
of Consolidated Accounts as set out in the Accounting Standards (AS21)
on Consolidated Financial Statements notified by the Companies''
Accounting Standard Rules, 2006 (as amended). The Audited Consolidated
Financial Statement together with Auditors'' Report forms part of the
Annual Report.
The group recorded a Consolidated Profit Before Tax of Rs. 94.18 crores
for the financial year 2012-13 as compared to Rs.85.03 crores, as
achieved in the preceding year.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors'' Responsibility Statement, it is
hereby confirmed that :
i. in preparation of the accounts for the financial year ended 31st
March, 2013, the applicable accounting standards have been followed
along with proper explanation relating to material departures;
ii. that the directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit or loss of the Company for the year;
iii. that the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
iv. that the directors have prepared the Annual Accounts for the
financial year ended 31st March, 2013 on a going concern basis.
PARTICULARS OF EMPLOYEES
Your Company has not paid any remuneration attracting the provisions of
the Companies (Particulars of Employees) Rules, 1975 read with Section
217(2A) of the Companies Act, 1956. Hence, no information is required
to be appended to this report in this regard.
CORPORATE WEBSITE
The website of your company, www.tidewaterindia.com carries a
comprehensive database of information of interest to the stakeholders
including the corporate profile, information with regard to products,
plants and various depots, financial performance of your Company and
others.
DIRECTORS
Shri H. Singh has been appointed as Additional Director with effect
from 31st October, 2012. He will hold office upto the date of the
ensuing Annual General Meeting and is eligible for re-appointment. The
Company has received notice under Section 257 of the Companies Act,
1956 proposing his appointment as Director.
In accordance with the provisions of the Companies Act, 1956 and your
Company''s Articles of Association, Shri K. Datta retires by rotation
at the ensuing Annual General Meeting and is eligible for
re-appointment.
The brief resume / details relating to Shri K. Datta and Shri H.Singh
are furnished in the Notice of the ensuing Annual General Meeting.
Shri I. Sengupta and Dr. G. Venkatesh resigned from the Board of
Directors of the Company with effect from 30th June, 2012 and 31 st
October, 2012, respectively. The Board of Directors place on record
the valued guidance received from them during their tenure of
directorship in the Company.
Pursuant to clause 49(IV)(G)(ia) it is disclosed that no Directors
share any relationship inter-se.
AUDITOR AND AUDITORS'' REPORT
Messrs. Ray & Ray, Chartered Accountants, retire as Auditors of your
Company at the conclusion of the ensuing Annual General Meeting and
being eligible, offer themselves for re-appointment. Members are
requested to consider their re-appointment for financial year ending
31st March, 2014 and authorize the Chairman to decide on their
remuneration.
The observations made in the Auditors'' Report read with the Notes on
Accounts are self-explanatory and do not require any further
clarification.
A statement detailing significant Accounting Policies of the Company is
annexed to the Accounts.
COST AUDITOR
Pursuant to Order No.F.NO.52/26/CAB-2010 dated 2nd May, 2011 read with
provisions as contained under Cost Accounting Records (Petroleum
Industry) Rules, 2002 and General Circular No.15/2011 dated 11th April,
2011, as issued by Cost Audit Branch of the Ministry of Corporate
Affairs, your Company has appointed DGM & Associates, Cost Accountants
for conducting audit of the Cost Accounting Records of the Company for
the year 2012-13, with regard to the lubricants business. The said
appointment, as made pursuant to Section 233B of the Companies Act,
1956, has been approved by the Ministry of Corporate Affairs. The audit
is underway and the Report will be submitted to the Central Government
within 180 days from the close of the financial year 2012-13 as
mandated under Rule 5 of the Companies (Cost Audit Report) Rules, 2011.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUT-GO
A. Conservation of Energy :
(a) Energy conservation measures taken :
Energy conservation during the financial year has accrued as a result
of the following steps taken at various locations of the Company.
Silvassa :
1. Air compressors were switched off during recess which resulted in
reduction of electrical power consumption upto 6240 units per year.
2. Sodium Vapour street lights are being replaced with energy
efficient LED lights which are expected to reduce power consumption by
7380 units per year.
3. Tube lights with normal ballasts were replaced with electronic
ballasts which resulted in reducing the electrical power consumption
upto 864 units per year.
Turbhe :
For ensuring decrease in electrical energy wastage, Harmonic Filter in
out HT Supply has been installed.
Oragadam :
1. Installation of low cost "Sprinkler" for watering the garden
with reduction in power and water consumption.
2. Auto timer ON / OFF system introduced for street lights resulting
in increase in life of the instruments and energy saving.
3. VFD introduced in 20 KL blending kettle to control the drive
thereby leading to energy saving.
4. Auto level controller introduced for Bore well pump which is
intended for reduction of power consumption.
(b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy :
None in particular.
(c) Impact of measures taken for conservation of energy as well as
impact on cost of production :
The measures undertaken in ''A'' above have led to reduction in fuel
and electricity consumption.
B1. RESEARCH & DEVELOPMENT (R&D)
i) Government of India, Ministry of Science & Technology, Dept. of
Scientific and Industrial Research has accorded recognition to the
Company''s in-house R&D Unit at Oragadam, Chennai and R&D Unit at
Turbhe, Mumbai. Both these units are equipped with modern testing
facilities essential for lubricant industry.
ii) The R&D Units have developed a number of new products, which are
required for high- tech industries and upgraded the formulations to
suit the requirement of industry.
iii) The R&D Units have plans to develop new products in future.
iv) Expenditure on R&D :
a) Capital Rs. 0.04 crores
(last year Rs. 0.94 crores)
b) Recurring Rs. 1.07 crores
(last year Rs. 0.93 crores)
c) Total Rs. 1.11 crores
(last year Rs. 1.87 crores)
d) Total R & D Expenditure as percentage oftotal turnover 0.10 %
(last year 0.19%)
B2. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
i) The Company had entered into a technical collaboration agreement
with JX Nippon Oil & Energy Corporation (formerly Nippon Oil
Corporation), Japan, for manufacture of hi-tech lubricants. The product
formulations received from collaborator have been utilized for
manufacture of such products.
ii) With the absorption and adoption of above technical know-how
through collaboration, the Company has been able to produce quality
products in India, specially for the Japanese OEM Segment.
iii) Information regarding imported technology :
a. Technology imported from JX Nippon Oil & Energy Corporation
(formerly Nippon Oil Corporation), Japan for manufacture of high- tech
lubricants.
b. Year of import: 1993 - 94 (agreement renewed last in 2011-12 for 2
years)
c. Technology has been partially absorbed.
d. Absorption of technology is continuing in respect of all grades of
lubricants and is expected to be completed over the period of
agreement.
C. FOREIGN EXCHANGE EARNINGS:
Foreign Exchange earnings during the year under review was Rs. 0.65
crores (last year Rs. 0.60 crores) while Foreign Exchange outgo was Rs
167.07 crores (last year Rs. 136.90 crores).
ACKNOWLEDGEMENT
The Board of Directors would like to place on record their appreciation
of the support and assistance received from the Government of India and
the State Government. The Directors are thankful to the Company''s
Bankers / Shareholders / all other Stakeholders and the esteemed
customers for their continued support.
The Board deeply appreciates the commitment and the invaluable
contribution of all the employees towards the satisfactory performance
of your Company.
On behalf of the Board
Kolkata Kallol Datta
30th May, 2013 Chairman
Mar 31, 2012
The Directors take pleasure in presenting their Annual Report on the
operations of the Company together with audited accounts for the year
ended 31st 2012.
Amount
(Rupees in crores)
Year ended Year ended
31st March, 2012 31st March, 2011
The Accounts before charging
depreciation show a profit of 95.45 104.17
From which has been deducted :
Depreciation (Net) 9.26 9.71
Provision for Taxation 27.11 36.37 30.30 40.01
59.08 64.16
To which is added the
balance brought
forward from the last
accounts of 181.12 129.46
240.20 193.62
The Directors have
transferred to
General Reserve 5.91 6.42
Leaving a balance of 234.29 187.20
And the Directors now
recommend a dividend @
1200% (p.y. 600%)
on the Ordinary Shares
amounting to 10.46 5.23
Tax on Dividend 1.70 0.85
Leaving a balance to be
carried forward of 222.13 181.12
PERFORMANCE
The performance of your Company during the year under review was
satisfactory considering the slowdown in the economy. The turnover
recorded was the highest-ever in the history of the Company at Rs.
1006.45 crores as compared to Rs.861.42 crores in the previous year, an
increase of 16.84 %. However, the increase in crude oil price in the
international markets had an adverse effect on the Profit Before Tax
achieved during the year, which amounted to Rs. 86.19 crores as
against Rs.94.46 crores in the preceding year. There has also been a
modest rise in the volume of sales, which during the year under review
was largely affected due to depressed market conditions, introduction
of long-drain lubes and keen competition.
Nonetheless, during the year your Company continued to focus on the
premium segment, rationalize operations in tune with market condition
and adopt appropriate raw-material procurement strategies.
The Company carried on its policy of building brand equity through
sustained campaigns in the media for its Veedol Brand in both diesel
and petrol segments. The "Bazaar" segment remained the main focal
point during the year and tie-up with the leading Original Equipment
Manufacturers (OEM) also helped in extending the product line of the
Company and increase its presence in new markets.
The Company's plants at Silvassa, Turbhe, Oragadam and Ramkristopur
continue to be accredited under ISO 9001:2008 quality standards. The
Silvassa and Oragadam Plants had also obtained accreditation under ISO
14001:2004 for environmental standards.
The Company's products primarily marketed under the "VEEDOL" brand
name are well established and accepted in the industry for their
quality and variety. The products manufactured under the technical
collaboration agreement with JX Nippon Oil & Energy Corporation
(formerly Nippon Oil Corporation) and marketed under the "ENEOS"
brand name have carved out a niche for themselves in select markets.
ACQUISITION OF VEEDOL INTERNATIONAL LIMITED
During the year, your Company acquired 100% shares of Veedol
International Limited from Castrol Limited and Lubricants UK Limited,
wholly owned subsidiaries of BP Plc. Through this acquisition the
Company got the global rights to a wide portfolio of registered trade
marks for the master brand "VEEDOL" as well as its associated
product sub-brands and iconic logos. The acquisition of Veedol
International Limited by your Company is envisaged to open up
opportunities for export and sale of lubricants under the "VEEDOL"
brand in various geographies around the world.
WIND ENERGY PROJECT
During the year 2011-12, the revenue generated from the Wind Energy
Project amounted to Rs. 1.98 crores. Considering the continued
governmental support, the sector is poised to provide adequate returns
and continue to generate cash profits over the years. The expected
savings in tax of Rs. 0.45 crores due to accelerated depreciation has
also been accounted for.
DIVIDEND
With a view to commemorate the highest-ever turnover achieved and the
sesquicentennial year of the Andrew Yule group, your Directors
recommend a special dividend of 400% in addition to the normal dividend
of 800%, thereby recommending an aggregate dividend of 1200% (Rs.120/-
per Ordinary Share) on the Ordinary Shares for the financial year
2011-12 as against 600% (Rs.60/- per Ordinary Share) for the previous
year to the equity shareholders of the Company.
EMPLOYEE WELFARE SCHEME AND TRUST
In terms of the approval of the shareholders dated 2nd March, 2011,
your Company implemented Tide Water Oil Company (India) Limited
Employee Welfare Scheme, 2010-11, for granting / allotting options upto
3% of the paid - up share capital of the Company, to the eligible
employees of the Company through Tide Water Oil Company (India) Limited
Employee Welfare Trust. This Trust has been constituted for the purpose
of acquisition of Ordinary Shares of the Company from the secondary
market, holding the Ordinary Shares and allocation / transfer of these
shares from time to time in line with the terms and conditions
specified under the Scheme. For the purpose of the said acquisition a
loan of Rs. 17 crores has been obtained by the Trust from the Company.
Till date, the Trust has purchased 22,425 Ordinary Shares and the
Scheme is being administered by Compensation Committee of the Board of
Directors.
During the year under review the trust has granted options of 3924 nos.
underlying Ordinary Shares of the Company to the eligible employees.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review, as
stipulated under Clause 49 of
the Listing Agreement with the Stock Exchange(s) in India is presented
in a separate section forming part of the Annual Report as Annexure I.
CORPORATE GOVERNANCE
Your Directors affirm their commitment to good Corporate Governance
practices. The report on Corporate Governance as per the requirement of
the Listing Agreement with the Stock Exchange together with a
certificate from the Statutory Auditors of the Company and declaration
by the Managing Director forms part of this report.
FIXED DEPOSITS
There were no Fixed Deposits from the public outstanding with the
Company at the end of the financial year.
SUBSIDIARY
On acquisition of 100% shares, Veedol International Limited had become
a subsidiary of the Company with effect from October, 2011. Moreover,
to explore the possibilities of marketing the products under
"Veedol" brand in the Middle East markets, your Company has floated
another 100% subsidiary under the name Veedol International DMCC in
Dubai, UAE.
The statement pursuant to Section 212 of the Companies Act, 1956,
containing details of the Company's overseas subsidiaries forms part of
the Annual Report.
In view of General Circular No. 2/2011 dated 8th February, 2011 issued
by the Ministry of Corporate Affairs, the Audited Statement of Accounts
along with the Report of the Board of Directors and Auditors relating to
your Company's Overseas Subsidiaries viz., Veedol International Limited
and Veedol International DMCC for the financial year ended 31st
December, 2011 are not annexed as required under Section 212(8) of the
Companies Act, 1956. Shareholders who wish to have a copy of the full
Report and Accounts of the aforesaid subsidiary companies, will be
provided the same, on receipt of a written request. These documents
will also be available for inspection by any shareholder at the
Registered Office of the Company and the concerned subsidiary companies
during business hours on all working days. However, as
directed by the Ministry of Corporate Affairs, Govt. of India vide the
aforesaid Circular relevant particulars of the subsidiaries have been
included in the Report.
CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements have been prepared in accordance
with the principles and procedures for the preparation and presentation
of Consolidated Accounts as set out in the Accounting Standards (AS21)
on Consolidated Financial Statements notified by the Companies'
Accounting Standard Rules, 2006, (as amended). The Audited Consolidated
Financial Statement together with Auditors' Report forms part of the
Annual Report.
The group recorded a Consolidated Profit Before Tax of Rs. 85.03 crores
for the financial year 2011-12.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors' Responsibility Statement, it is
hereby confirmed that:
i. in preparation of the accounts for the financial year ended 31st
March, 2012, the applicable accounting standards have been followed
along with proper explanation relating to material departures;
ii. that the directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit or loss of the Company for the year;
iii. that the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
iv. that the directors have prepared the Annual Accounts for the
financial year ended 31st March, 2012 on a going concern basis.
PARTICULARS OF EMPLOYEES
Your Company has not paid any remuneration attracting the provisions of
the Companies (Particulars of Employees) Rules, 1975 read with Section
217(2A) of the Companies Act, 1956. Hence, no information is required
to be appended to this report in this regard.
CORPORATE WEBSITE
The website of your company, www.tidewaterindia.com carries a
comprehensive database of information of interest to the stakeholders
including the corporate profile, information with regard to products,
plants and various depots, financial performance of your Company and
others.
DIRECTORS
Dr. G. Venkatesh and Shri Swaminathan have been appointed as Additional
Directors with effect from 21st September, 2011 and 30th May, 2012,
respectively. They will hold office upto the date of the ensuing
Annual General Meeting and are eligible for re-appointment. The
Company has received notices under Section 257 of the Companies Act,
1956 proposing their appointment as Directors.
In accordance with the provisions of the Companies Act, 1956 and your
Company's Articles of Association, Shri S. Das and Shri A. Mukherjee
retires by rotation at the ensuing Annual General Meeting and are
eligible for re - appointment.
The brief resume / details relating to Shri S. Das, Shri A. Mukherjee,
Dr. G. Venkatesh and Shri S. Swaminathan are furnished in the Notice
of the ensuing Annual General Meeting.
Shri S. S. Mahlawat resigned from the Board of Directors of the Company
with effect from 21st September, 2011. The Board of Directors place on
record the valued guidance received from him during his tenure of
directorship in the Company.
Pursuant to clause 49(IV)(G)(ia) it is disclosed that no Directors
share any relationship inter-se.
AUDITOR AND AUDITOR'S REPORT
Messrs. Ray & Ray, Chartered Accountants, retire as Auditors of your
Company at the conclusion of the ensuing Annual General Meeting and
being eligible, offer themselves for re-appointment. Members are
requested to consider their re-appointment for financial year ending
31st March, 2013 and authorize the Chairman to decide on their
remuneration.
The observations made in the Auditors' Report read with the Notes on
Accounts are self - explanatory and do not require any further
clarification.
A statement detailing significant Accounting Policies of the Company is
annexed to the Accounts.
COST AUDITOR
Pursuant to Order No.F. NO.52/26/CAB-2010 dated 2nd May, 2011 read with
provisions as contained under Cost Accounting Records (Petroleum
Industry) Rules, 2002 and General Circular No.15/2011 dated 11th April,
2011, as issued by Cost Audit Branch of the Ministry of Corporate
Affairs, your Company has appointed DGM & Associates, Cost Accountants
for conducting audit of the Cost Accounting Records of the Company for
the year 2011-12, with regard to the lubricants business. The said
appointment, as made pursuant to Section 233B of the Companies Act,
1956, has been approved by the Ministry of Corporate Affairs. The Audit
is underway and the Report will be submitted to the Central Government
within 180 days from the close of the financial year 2011-12 as
mandated under Rule 5 of the Companies (Cost Audit Report) Rules, 2011.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUT-GO A. Conservation of Energy : (a) Energy conservation
measures taken :
Energy conservation during the financial year has accrued as a result
of the following steps taken at various locations of the Company.
Silvassa :
1. Tube lights with normal ballasts were replaced with electronic
choke/ballasts which resulted in reducing the electrical
power consumption upto 1,000 units per year.
2. Former Conveyer was replaced by Integrated Conveyer in 5 litre
capping machine resulting in power saving of approximately 5,000 units
per year.
Turbhe:
Harmonic Filter in out HT Supply has been installed, ensuring decrease
in electrical energy wastage.
Oragadam :
1. Installation of low cost "Sprinkler" for watering the garden
with reduction in power and water consumption.
2. Conveyor system modified in 3 No. of filling lines by eliminating
one set of powered conveyor, while maintaining the throughput.
3. Capacitor bank modified to suit load pattern & to achieve optimum
power factor.
(b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy :
None in particular.
(c) Impact of measures taken for conservation of energy as well as
impact on cost of production :
The measures undertaken in 'A' above have led to reduction in fuel
and electricity consumption.
B1. Research and Development (R&D) :
i) Government of India, Ministry of Science & Technology, Dept. of
Scientific and Industrial Research has accorded recognition to the
Company's in-house R&D Unit at Oragadam, Chennai and R&D Unit at
Turbhe, Mumbai. Both these units are equipped with modern testing
facilities essential for lubricant industry.
ii) The R&D Units have developed a number of new products, which are
required for high-
tech industries and upgraded the formulations to suit the requirement
of industry.
iii) The R&D Units have plans to develop new products in future.
iv) Expenditure on R&D :
a) Capital Rs. 0.94 crores
(last year NIL)
b) Recurring Rs. 0.93 crores
(last year Rs. 0.91 crores)
c) Total Rs. 1.87 crores
(last year Rs. 0.91 crores)
d) Total R & D
Expenditure as
percentage of
total
turnover 0.19 %
(last year 0.11%)
B2. Technology Absorption, Adaptation and Innovation :
i) The Company had entered into a technical collaboration agreement
with JX Nippon Oil & Energy Corporation (formerly Nippon Oil
Corporation), Japan, for manufacture of hi - tech lubricants. The
product formulations received from collaborator have been utilized for
manufacture of such products.
ii) With the absorption and adoption of above technical know - how
through collaboration, the Company has been able to produce quality
products in India, specially for the Japanese OEM Segment.
iii) Information regarding imported technology:
a. Technology imported from JX Nippon Oil & Energy Corporation
(formerly Nippon Oil Corporation), Japan for manufacture of high - tech
lubricants.
b. Year of import: 1993 - 94 (agreement renewed last in 2011-12 for 2
years)
c. Technology has been partially absorbed.
d. Absorption of technology is continuing in respect of all grades of
lubricants and is expected to be completed over the period of
agreement.
C. Foreign Exchange Earnings :
Foreign Exchange earnings during the year under review was Rs. 0.60
crores (last year Rs. 0.65 crores) while Foreign Exchange outgo was Rs.
146.91 crores (last year Rs. 35.09 crores).
ACKNOWLEDGEMENT
The Board of Directors would like to place on record their appreciation
of the support and assistance received from the Government of India and
the State Government. The Directors are thankful to the Company's
Bankers / Shareholders / all other Stakeholders and the esteemed
customers for their continued support.
The Board deeply appreciates the commitment and the invaluable
contribution of all the employees towards the satisfactory performance
of your Company.
On behalf of the Board
Kolkata Kallol Datta
30th May, 2012 Chairman
Mar 31, 2011
The Directors are pleased to present their Annual Report on the
operations of the Company together with audited accounts for the year
ended 31st March, 2011.
Amount
(Rupees in crores)
Year ended Year ended
31st March, 2011 31st March, 2010
The Accounts before charging
depreciation show a profit of 104,17 95.51
From which has been deducted:
Depreciation (Net) 9.71 6.18
Provision for Taxation 30.30 40.01 31.54 37.72
64.16 57.79
To which is added the balance brought
forward from the last accounts of 129.46 82.53
193.62 140.32
The Directors have transferred to
General Reserve 6.42 5.78
Leaving a balance of 187.20 134.54
And the Directors now recommend
a dividend @ 600% (p.y. 500%) on the
Ordinary Shares amounting to 5.23 4.36
Tax on Dividend 0.85 0.72
Leaving a balance to be carried forward of 181.12 129.46
PERFORMANCE
Your Company posted another year of satisfactory performance. The
turnover recorded was the highest-ever in the history of the Company at
Rs. 861.42 crores as compared to Rs. 75.1.58 crores in the previous
year, an increase of 14.61 %
The incessant rise in the crude oil prices during the year resulted in
escalation of raw material prices, thereby putting the margins under
pressure, but your Company partially hedged its needs with timely
procurement of base oil both from domestic and international sources,
keeping the cost pressures within manageable limits. Despite the above,
your Company achieved a Profit Before Tax of Rs. 94.46 crores as
compared to Rs. 89.33 crores in the previous year primarily due to
continued focus on niche segments and efficiency in procurement of raw
material.
The lubricants market remained largely sluggish due to increased usage
of long - drain lubes. However, your Company has been able to maintain
its performance due to its continued focus on the bazaar segment.
Enhancement of brand equity also remained a major focus area during the
year which your Company addressed by adopting a more customer -
oriented approach, executing extensive campaigns on the electronic
media and undertaking elaborate field level activities. With the
plethora of lubricant options for customers, your Company has been able
to differentiate its products by entering into a tie up with a few
leading Original Equipment Manufacturers (OEM) due to its superior R&D
capabilities.
The Companys plants at Silvassa, Oragadam and Ramkristopur continue to
be accredited under ISO 9001:2008 quality standards. The Silvassa and
Oragadam Plants had also obtained accreditation under IS014001:2004 for
environmental standards.
The Companys products primarily marketed under the "VEEDOL" brand name
are well established and recognized in the industry for their quality
and range. The products manufactured under the technical collaboration
agreement with JX Nippon Oil & Energy Corporation (formerly Nippon Oil
Corporation) and marketed under the "ENEOS" brand name have carved out
a niche for themselves in select markets.
WIND ENERGY PROJECT
During the year 2010-11, the revenue generated from the wind energy
project amounted to Rs. 2.01 crores. With the on-going Governmental
support this sector is expected to display improving performance. Cash
profits are being generated from the first year. The expected saving in
tax of Rs. 0.88 crores due to accelarated depreciation has been
accounted for.
DIVIDEND
In view of the satisfactory financial results, your Directors have the
pleasure in recommending a Dividend of 600% (Rs.60.00 per Ordinary
Share) on the Ordinary Shares for the financial year 2010-11 as against
500% (Rs. 50.00 per Ordinary Share) for the
previous year to the equity shareholders of the Company.
EMPLOYEE WELFARE SCHEME
In terms of the approval of the shareholders dated 2nd March, 2011,
your Company implemented Tide Water Oil Company (India) Limited
Employee Welfare Scheme, 2010-11, for granting/allotting options upto
3% of the paid-up share capital of the Company, to the eligible
employees of the Company through Tide Water Oil Company (India) Limited
Employee Welfare Trust. This Trust has been constituted for the purpose
of acquisition of Ordinary Shares of the Company from the secondary
market, holding the Ordinary Shares and allocation / transfer of these
shares from time to time in line, with the terms and conditions
specified under the Scheme. Till date, the Trust has purchased 22,425
Ordinary Shares and the Scheme is being administered by Compensation
Committee of the Board of Directors.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review, as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchange(s) in India is presented in a separate section forming part of
the Annual Report as Annexure I.
CORPORATE GOVERNANCE
Your Directors affirm their commitment to good Corporate Governance
practices. The report on Corporate Governance as per the requirement of
the Listing Agreement with the Stock Exchange(s) together with a
certificate from the Statutory Auditors of the Company and declaration
by the Executive Director forms part of this report.
FIXED DEPOSITS
There were no Fixed Deposits from the Public outstanding with the
Company at the end of the financial year.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217 (2AA) of the Companies
Act, 1956, with respect to Directors Responsibility Statement, it is
hereby confirmed that:
(i) in preparation of the accounts for the financial year ended 31st
March, 2011, the applicable accounting standards have been followed
along with proper explanation relating to material departures;
(ii) that the directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit or loss of the Company for the year;
(iii) that the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
(iv) that the directors have prepared the Annual Accounts for the
financial year ended 31 st March, 2011 on a going concern basis.
PARTICULARS OF EMPLOYEES
Your Company has not paid any remuneration attracting the provisions of
the Companies (Particulars of Employees) Rules, 1975 read with Section
217(2A) of the Companies Act, 1956. Hence no information is required
to be appended to this report in this regard.
CORPORATE WEBSITE
The website of your company, www.tidewaterindia.com carries a
comprehensive database of information of interest to the stakeholders
including the corporate profile, information with regard to products,
plants and various depots, financial performance of your Company and
others.
DIRECTORS
Shri Arun Kumar Datta and Shri S. S. Mahlawat have been appointed as
Additional Directors with effect from 20th April, 2011 and 30th May,
2011 respectively. They will hold office upto the date of the ensuing
Annual General Meeting and are eligible for re-appointment. The
Company has received notices under Section 257 of the Companies Act,
1956 proposing their appointment as Director.
In accordance with the provisions of the Companies Act, 1956 and your
Companys Articles of Association, Shri K. Datta retires by rotation at
the ensuing Annual General Meeting and is eligible for re- appointment.
The brief resume / details relating to Shri K. Datta, Shri A. K. Datta
and Shri S. S. Mahlawat, are furnished in the Notice of the ensuing
Annual General Meeting.
Shri Ved Prakash and Dr. Gulshan Raj resigned from the Board of
Directors of the Company with effect from 29th October, 2010 and 20th
April, 2011 respectively. The Board of Directors place on record the
valued guidance received from them during their tenure of directorship
in the Company.
AUDITOR AND AUDITORS REPORT
Messrs. Deloitte Haskins & Sells, Chartered Accountants, the retiring
Auditors expressed their unwillingness to be re-appointed as Auditors
of the Company for the financial year 2011 -12. The Company has
received an approach from Messrs. Ray & Ray, Chartered Accountants, who
have expressed their willingness and eligibility to conduct the
statutory audit of the Company for the year ending 31 st March, 2012.
Members are requested to consider the appointment of Messrs. Ray & Ray,
Chartered Accountants, as the Statutory Auditors of the Company for
financial year ending 31st March, 2012 and authorise the Chairman to
decide on their remuneration.
The observations made in the Auditors Report read with the Notes on
Accounts are self-explanatory and. do not require any further
clarification.
A statement detailing significant Accounting Policies of the Company is
annexed to the Accounts.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUT-GO
A. Conservation of Energy:
(a) Energy conservation measures taken :
Energy conservation during the financial year has accrued as a result
of the following steps taken at various locations of the Company.
Silvassa:
1. Conventional Screw and Gear pumps for handling chemical additives
were replaced by Energy Efficient Vane pumps (3 Nos.) resulting in
energy savings, reducing the batch cycle time & maintenance.
2. Tube lights with normal ballasts were replaced with electronic
ballasts (30 Nos.) to reduce electrical power consumption.
Turbhe:
1. Bulk handling of major chemical additives supplied in ISO tanks was
introduced æ during the year to reduce batch cycle time and losses.
2. In 1 Ltr filling machine, the motor conveyor has been replaced by
inclined path which allow the empty containers to reach under the
filling point using gravitational force which saves electrical energy.
Oragadam :
1. Provision of VFD for Grease Dosing Pump Motor for improving process
efficiency, optimizing batch time as well as power consumption.
2. Modified grease processing sequence and reduced batch cycle time.
This in turn resulted in energy saving.
3. Capacitor banks modified to monitor & achieve a PF above 0.95.
(b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy :
None in particular
(c) Impact of measures taken for conservation of energy as well as
impact on cost of production :
The measures undertaken in A above have led to reduction in fuel and
electricity consumption.
B1. Research and Development (R&D):
i) Government of India, Ministry of Science & Technology, Dept. of
Scientific and Industrial Research has accorded recognition to the
Companys in-house R&D Unit at Oragadam, Chennai and R&D Unit at
Turbhe, Mumbai. Both these units are equipped with modern testing,
facilities essential for lubricant industry.
ii) The R&D Units have developed a number of new products, which are
required for high- tech industries and upgraded the formulations to
suit the requirement of industry.
iii) The R&D Units have plans to develop new products in future.
iv) Expenditure on R&D :
a) Capital Rs. NIL
(last year Rs. 1.44 crores)
b) Recurring Rs. 0.91 crores
(last year Rs. 0.83 crores)
c) Total Rs. 0.91 crores
(last year Rs. 2.27 crores)
d) TotalR&D
Expenditure
as percentage
of total
turnover 0.11 %
(last year 0.30%)
B2. Technology Absorption, Adaptation and Innovation:
i) The Company had entered into a technical collaboration agreement
with JX Nippon Oil & Energy Corporation (formerly Nippon Oil
Corporation), Japan, for manufacture of hi- tech lubricants. The
product formulations received from collaborator have been utilised for
manufacture of such products.
ii) With the absorption and adoption of above technical know-how
through collaboration, the Company has been able to produce quality
products in India, specially for the Japanese OEM Segment.
iii) Information regarding imported technology:
a) Technology imported from JX Nippon Oil & Energy Corporation
(formerly Nippon Oil Corporation), Japan, for manufacture of high-tech
lubricants.
b) Year of import : 1993-94 (agreement renewed last in 2005-06 for 5
years)
(c) Technology has been partially absorbed.
(d) Absorption of technology is continuing in respect of all grades of
lubricants and is expected to be completed over the period of
agreement.
ACKNOWLEDGEMENT
The Board of Directors would like to place on record their appreciation
of the support and assistance received from the Government of India
arid the State Government. The Directors are thankful to the Companys
Bankers / Shareholders / all other Stakeholders and the esteemed
customers for their continued support.
The Board deeply appreciates the commitment and the invaluable
contribution of all the employees towards the satisfactory performance
of your Company.
On behalf of the Board
Kolkata Kallol Datta
30th May, 2011 Chairman
Mar 31, 2010
The Directors are pleased to present their Annual Report on the
operations of the Company together with audited accounts for the year
ended 31st March, 2010.
Amount
(Rupees in crores)
Year ended Year ended
31st March, 2010 31st March, 2009
The Accounts before charging
depreciation show a profit of 95.51 49.17
From which has been deducted :
Depreciation (Net) 6.18 3.39
Provision for Taxation 31.54 37.72 18.23 21.62
57.79 27.55
To which is added the balance
brought
forward from the last accounts of 82.53 60.78
140.32 88.33
The Directors have transferred to
General Reserve 5.78 2.75
Leaving a balance of 134.54 85.58
And the Directors now recommend a
dividend @ 500% (P.Y. 300%) on the
Ordinary Shares amounting to 4.36 2.61
Ta x on Dividend 0.72 0.44
Leaving a balance to be carried
forward of 129.46 82.53
PERFORMANCE
Your Company delivered another year of stellar performance and improved
its operating margins through continued focus on building its brand
equity and presence in bazaar segment. The turnover achieved during
the year 2009-10 even surpassed the record turnover as achieved during
the previous year by 23.11% to Rs. 751.58 crores as compared to Rs.
610.48 crores in the previous year.
In spite of the financial downturn witnessed by the Indian economy
during the first half of 2009, which though had shown indications of
some stability in the second half, your Company had been able to notch
up an impressive performance throughout the year achieving a year end
Profit Before Tax of Rs. 89.33 crores during 2009 -10 as compared to
45.78 crores during the previous year,an increase of around 95.13%.
Notwithstanding the competition in industry, your Company adopted a
more customer-oriented approach focusing on creating brand awareness.
The bazaar segment had been the major marketing focus during the year
which your Company addressed through specially designed campaigns. Your
Company had been able to tie-up with a few Original Equipment
Manufactures (OEM) with a view to reinforce its value proposition. All
these coupled with an unstinted effort to achieve further growth helped
your Company to not only accomplish but even surpass the goals set
during the year under review.
The Companys plants at Silvassa, Turbhe, Oragadam and Ramkristopur
continue to be accredited under ISO9001:2000 quality standards. The
Silvassa Plant has also obtained accreditation under ISO 14001 for
environmental standards. Oragadam plant, wherein the operations of the
Royapuram plant was shifted, became operational during the year under
review.
The Companys products primarily marketed under the ÃVEEDOLÃ brand name
are well established and accepted in the industry for their quality and
variety. The products manufactured under the technical collaboration
agreement with Nippon Oil Corporation (formerly Mitsubishi Oil Co.
Ltd.) and marketed under the ÃENEOSÃ brand name have carved out a niche
for themselves in select markets.
WIND ENERGY PROJECT
During the year under review your Company invested in two windmills
with a total capacity of 3 MW for generation of renewable energy at
Tamil Nadu. With the Governmental support, the wind energy sector is
poised to grow further in future. In view of the same, the investment
made by your Company in this sun - rise sector, is envisaged to provide
adequate returns in the times to come.
DIVIDEND
In view of the improved financial results, your Directors have the
pleasure in recommending a Dividend of 500% (Rs.50.00 per ordinary
share) on the Ordinary Shares for the financial year 2009-10 as against
300%
(Rs.30.00 per ordinary share) for the previous year to the equity
shareholders of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review, as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchange(s) in India is presented in a separate section forming part of
the Annual Report as Annexure I.
CORPORATE GOVERNANCE
Your Directors affirm their commitment to good Corporate Governance
practices. The report on Corporate Governance as per the requirement of
the Listing Agreement with the Stock Exchange(s) together with a
certificate from the Statutory Auditors of the Company and declaration
by the Executive Director forms part of this report as Annexure II.
FIXED DEPOSITS
There were no Fixed Deposits from the Public outstanding with the
Company at the end of the financial year.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217 (2AA) of the Companies
Act, 1956, with respect to Directors Responsibility Statement, it is
hereby confirmed that :
(i) in preparation of the accounts for the financial year ended 31st
March, 2010, the applicable accounting standards have been followed
along with proper explanation relating to material departures;
(ii) that the directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit or loss of the Company for the year;
(iii) that the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
(iv) that the Directors have prepared the Annual Accounts for the
financial year ended 31st March, 2010 on a going concern basis.
PARTICULARS OF EMPLOYEES
Your company has not paid any remuneration attracting the provisions of
the Companies (Particulars of Employees) Rules, 1975 read with Section
217(2A) of the Companies Act, 1956. Hence, no information is required
to be appended to this report in this regard.
CORPORATE WEBSITE
The website of your company, www.tidewaterindia.com carries a
comprehensive database of information of interest to the stakeholders
including the corporate profile, information with regard to products,
plants and various depots, financial performance of your Company and
others.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and your
Companys Articles of Association, Shri S. Das and Shri A.Mukherjee
retire by rotation at the ensuing Annual General Meeting and are
eligible for re-appointment.
The brief resume / details relating to Shri Das and Shri Mukherjee, are
furnished in the Notice of the ensuing Annual General Meeting.
AUDITOR AND AUDITORS REPORT
Messrs. Deloitte Haskins & Sells, Chartered Accountants retire as
Auditors of your Company at the conclusion of the ensuing Annual
General Meeting and being eligible, offer themselves for
re-appointment. Members are requested to consider their re-
appointment for financial year ending 31st March, 2011
and authorize the Chairman to decide on their remuneration.
The observations made in the Auditors Report read with the Notes on
Accounts are self-explanatory and do not require any further
clarification.
A Statement detailing significant Accounting Policies of the Company is
annexed to the Accounts.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUT-GO
A. Conservation of Energy :
(a) Energy conservation measures taken :
Energy conservation during the financial year has accrued as a result
of the following steps taken at various locations of the Company.
Silvassa :
1. Installation of wind driven turbo ventilators.
2. Installation of jet mixtures in blending kettle to improve the
product quality and save electrical energy.
3. Installation of Stabinger viscometer to reduce testing time and
save electrical energy.
Turbhe :
1. Installation of 32 nos. five star rated split air - conditioners to
save on consumption of electrical energy.
Oragadam :
1. Installation of Variable Frequency Drive in blending kettle to save
power.
2. Installation of capacitors for improving Ãpfà factor and
conservation of energy.
(b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy :
None in particular
(c) Impact of measures taken for conservation of energy as well as
impact on cost of production :
The measures undertaken in A above have led to reduction in fuel and
electricity consumption.
B1. Research and Development (R&D) :
i) Government of India, Ministry of Science & Technology, Dept. of
Scientific and Industrial Research has accorded recognition to the
Companys in-house R&D Unit at Royapuram, Chennai and R&D Unit at
Deonar, Mumbai. Both these units are equipped with modern testing
facilities essential for petroleum industry.
ii) The R&D Units have developed a number of new products, which are
required for high- tech industries and upgraded the formulations to
suit the requirement of industry.
iii) The R&D Units have plans to develop new products in future.
iv) Expenditure on R&D :
a) Capital Rs. 1.44 crores
(last year Rs. 0.04 crores)
b) Recurring Rs. 0.83 crores
(last year Rs. 0.65 crores)
c) Total Rs. 2.27 crores
(last year Rs. 0.69 crores)
d) Total R & D
Expenditure
as percentage
of total
turnover 0.30%
(last year 0.11%)
B2. Technology Absorption, Adaptation and Innovation :
i) The Company had entered into a technical collaboration agreement
with Nippon Oil Corporation (formerly Mitsubishi Oil Co. Ltd.), Japan,
for manufacture of hi-tech lubricants. The product formulations
received from collaborator have been utilised for manufacture of such
products.
ii) With the absorption and adoption of above technical know-how
through collaboration, the Company has been able to produce quality
products in India.
iii) Information regarding imported technology :
a) Technology imported from Nippon Oil Corporation (formerly Mitsubishi
Oil Co. Ltd.), Japan for manufacture of high-tech lubricants.
b) Year of import : 1993-94 (agreement renewed last in 2005-06 for 5
years)
(c) Technology has been partially absorbed.
(d) Absorption of technology is continuing in respect of all grades of
lubricants and is expected to be completed over the period of
agreement.
C. Foreign Exchange Earnings :
Foreign Exchange Earnings during the year under review was Rs. 0.40
crores (last year Rs. 0.49 crores) while Foreign Exchange Out-go was
Rs. 51.56 crores (last year Rs. 55.61 crores).
ACKNOWLEDGEMENT
The Board of Directors would like to place on record their appreciation
of the support and assistance received from the Government of India and
the State Government. The Directors are thankful to the Companys
Bankers/Shareholders/ all other Stakeholders and the esteemed customers
for their continued support.
The Board deeply appreciates the commitment and the invaluable
contribution of all the employees towards the satisfactory performance
of your Company.
On behalf of the Board
Kolkata Kallol Datta
26th May, 2010 Chairman
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