The Board of Directors of Gulf Oil Lubricants India Limited (“the Company” or “your Company”) is pleased to present their 14th Annual Report on the business and operations of the Company along with the Audited Financial Statements of the Company for the financial year ended March 31st, 2022 (“financial year under review” or “financial year 2021-22”).
1. FINANCIAL SUMMARY AND OPERATIONAL HIGHLIGHTS
(Rs in Lakhs)
|Particulars||For the year ended March 31, 2022||For the year ended March 31, 2021||For the year ended March 31, 2022|
|Revenue from Operations||2,19,163.88||1,65,220.51||2,19,163.88|
|Profit before finance cost, depreciation & tax||32,967.56||31,724.61||32,967.56|
|Less: Finance Costs||961.86||1,463.63||961.86|
|Profit before depreciation & tax||32,005.70||30,260.98||32,005.70|
|Profit before share of net profit/(loss) in associate accounted using equity method||28,433.77||26,874.05||28,433.77|
|Share of net loss of associate accounted using equity method||-||-||(1.96)|
|Profit Before Taxation||28,433.77||26,874.05||28,431.81|
|Profit After Taxation||21,107.60||20,008.58||21,105.64|
|Balance brought forward from previous year||60,515.32||51,964.86||60,515.32|
|Interim Dividend declared and paid on Equity Shares for FY-19-20||-||(3,507.40)||-|
|Interim Dividend paid on Equity Shares for FY-20-21||-||(3,521.68)||-|
|Final Dividend paid on Equity Shares||(4,538.46)||(3,512.40)||(4,538.46)|
|Other Comprehensive Income (OCI)||32.91||13.97||32.91|
|Transfer to General Reserve||(1,000.00)||(1,000.00)||(1,000.00)|
|Balance Carried to Balance Sheet||76,117.37||60,515.32||76,115.41|
2. OPERATIONAL PERFORMANCE / STATE OF AFFAIRS
The Company has demonstrated strong resilience during yet another challenging year impacted by 2nd and 3rd wave of Covid 19 and Russia Ukraine crisis during different parts of the year by delivering growth in Revenues, PBT and PAT over the previous year. This has been achieved in spite of significant market and cost challenges as well as major global supply chain disturbances all through the year.
Net revenues for the year 2021-22 was Rs 2,19,163.88 lakhs (Rs 1,65,220.51 lakhs in the previous year),
Profit before tax for the financial year 2021-22 was Rs 28,433.77 lakhs (Rs 26,874.05 lakhs in the previous year). Profit after tax for the financial year 2021-22 was Rs 21,107.60 lakhs (Previous year Rs 20,008.58 lakhs) resulting in an Earnings Per Share (Basic) of Rs 41.89 (Previous year Rs 39.86).
Management Discussion and Analysis
The Management Discussion and Analysis for the financial year under review, as stipulated under Regulation 34(2)(e) read with Part B of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”), is presented in a separate section and forms part of this Annual Report. It provides mandatory disclosures required under the SEBI Listing Regulations comprising of inter-alia details about the overall industry structure, economic scenarios, operational and financial performance of the Company, business strategy, internal controls and their adequacy, risk and concerns and other material developments during the financial year 2021-22.
Impact of COVID -19 and Russia Ukraine crisis
The COVID-19 pandemic continued to be a global challenge creating disruption across the world. While the global economy showed early signs of recovery in the beginning of 2021, the repeated waves of COVID infection overwhelmed the CountryRss health infrastructure and resulted in restrictive movement of goods and people in the Country during some part of the financial year under review. This led to rise in inflation impacting recovery across all major economies and dented the pace of economic activity globally.
The pandemic impacted the Lubricant Industry in both positive and negative ways. On one hand, it has increased financial pressure on a lot of companies in the industry. On the other hand, it has accelerated some key transformations within the Lubricant Industry viz. technology integration to drive efficiencies etc. Digital solutions and usage of technology has become essential for making supply chains more robust, driving end-to-end visibility, ensuring data security and real-time product traceability, and improving government industry collaboration as we are preparing for the future.
Thus Russia Ukraine crisis in last quarter of the financial year under review further impacted supply chain globally and most critically Oil and Gas sector forcing crude oil prices to multi year high.
Despite these challenges, we also saw many tailwinds in our business. Opening of the economy spurred growth in most of our end markets. Leveraging on the trends emerging from the external environment, we continue to enhance our focus on delivering value through customised integrated solutions, new customer acqusitions and operational excellence and drive technology investments to maintain profitable growth and improve scalability of our businesses in the prevalent economic scenario.
3. DIVIDEND FOR FINANCIAL YEAR 2021-22
The Board of Directors are pleased to recommend dividend of Rs 5/- (Gross) per equity share of the face value of Rs 2/- per share (being 250 % on face value) for the financial year 2021-22, payable to those Members whose names appear in the register of members and list of beneficial owners at the close of business hours on Friday, September 9th, 2022.
The dividend on Equity Shares is subject to the approval of the Shareholders at the 14th Annual General Meeting (“AGM”) scheduled to be held on Friday, September 16th, 2022. The dividend once approved by the Shareholders will be paid on or after Saturday, September 17th, 2022.
The Register of Members and Share Transfer Books of the Company will remain closed from Saturday, September 10th, 2022 to Friday, September 16th,
2022 (both days inclusive) for payment of the dividend for the Financial Year 2021 - 22.
The Dividend payout is as per the Dividend Distribution Policy of the Company.
Taxation on Dividend
As per the provisions of the Income Tax Act, 1961 as amended by and read with the provisions of the Finance Act, 2020, with effect from April 01st, 2020, dividend declared and paid by the Company is taxable in the hands of shareholders. The Company shall, therefore, be required to calculate deduction of tax at source (TDS) at the time of payment of dividend at the applicable rates.
Transfer to Reserves
During the year, Board has approved the appropriation of Rs 1,000 lakhs to General Reserves. (Previous year Rs 1,000 lakhs).
Dividend Distribution Policy
The Company has adopted a Dividend Distribution Policy in compliance with Regulation 43A of the SEBI Listing Regulations. The Policy is enclosed herewith as Annexure-I and forms part of this Annual Report. The Dividend Distribution Policy is also placed on the CompanyRss website and can be accessed from the weblink: https://www.gulfoilindia.com/investors/ investor-information/policies/.
During the financial year under review, there were no amendments in the Dividend Distribution Policy of the Company.
Transfer of unpaid dividend/unclaimed shares to Investor Education and Protection Fund (“IEPF”):
Pursuant to applicable provisions of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules”), all unpaid or unclaimed dividends are required to be transferred
by the Company to the Investor Education and Protection Fund (“IEPF” or “Fund”) established by the Central Government, after completion of seven years from the date the dividend is transferred to unpaid/ unclaimed account maintained by the Company. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the members for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority.
The Company had during the year under review sent individual notices and also advertised in the newspapers seeking action from the members who have not claimed their dividends for seven consecutive years or more. Thereafter, the Company had transferred the interim dividend declared for the financial year ended March 31st, 2015 and shares in respect of which dividend declared for the financial year 2014-15 and onwards had remained unpaid or unclaimed for seven consecutive years to Investors Education and Protection Fund established under sub-section (2) of section 125 of the Companies Act, 2013 (“Act”) read with IEPF (Accounting,
Audit, Transfer and Refund) Rules, 2016, within statutory timelines.
Members/claimants whose shares or unclaimed dividend, have been transferred to the IEPF demat Account or the Fund, as the case may be, may claim the shares or apply for refund by making an application to the IEPF Authority in Form IEPF - 5 (available on http://www.iepf.gov.in) along with requisite fee as decided by the IEPF Authority from time to time.
Further, the Company shall transfer the final dividend declared for the financial year ended March 31st, 2015 and shares in respect of which dividend declared for the financial year 2014-15 and onwards which remains unpaid or unclaimed for seven consecutive years to Investors Education and Protection Fund established under sub-section (2) of section 125 of the Act read with IEPF Rules, 2016, within statutory timelines, if not claimed by the concerned shareholders in time. Members are requested to ensure that they claim the dividends before they are transferred to the said Fund. The due dates for the transfer of unclaimed dividends to IEPF are provided in the report on Corporate Governance.
Details of shares/shareholders in respect of which dividend has not been claimed, are provided on the website of the Company at https://www.gulfoilindia. com/investors/investor-information/unpaid-dividend/.
The shareholders are encouraged to verify their records and approach KFin Technologies Limited (Formerly known as “KFin Technologies Private Limited”), the CompanyRss Registrar and Share Transfer Agent (“RTA” or “KFin”) for claiming their dividends of all the earlier seven years, if not claimed.
4. SHARE CAPITAL
During the financial year 2021 - 22 there has been a change in the paid-up equity share capital due to equity shares being allotted to eligible employees under Gulf Oil Lubricants India Limited - Employee Stock Option Scheme- 2015. The equity shares issued and allotted during the financial year under review rank pari-passu with the existing equity shares of the Company in all respects.
There was no change in the authorized capital of the Company during the financial year under review. As of March 31st, 2022, the Authorized Share Capital and the Issued, Paid-up and Subscribed Capital of the Company stood as:
i. Authorized Share Capital:
Rs 10,46,27,228/- (Rupees Ten Crores Forty-Six Lakhs Twenty Seven Thousand Two Hundred and Twenty Eight Only) divided into 5,23,13,614 (Five Crores Twenty Three Lakhs Thirteen Thousand Six Hundred and Fourteen) Equity shares of Rs 2/- each.
ii. Issued, Paid-up and Subscribed Capital:
Rs 10,08,54,546/- (Rupees Ten Crores Eight Lakhs Fifty-Four Thousand and Five Hundred and Forty-Six Only) divided into 5,04,27,273 (Five Crores Four Lakhs Twenty-Seven Thousand Two Hundred and Seventy-Three Only) Equity shares of Rs 2/- each.
BUY BACK OF EQUITY SHARES
During the year under review, the Company announced buy back of 14,16,667 fully paid-up equity shares of face value of Rs 2/- each, constituting up to 2.8% of the issued, subscribed and paid-up equity share capital of the Company as on March 31st, 2021. The Buy Back was undertaken on a proportionate basis, from the fully paid-up Equity Shareholder(s)
/ beneficial owner(s) of the Equity Shares of the Company as on February 21st, 2022, by way of a Tender Offer for cash at a price of Rs 600/- (Rupees Six Hundred only) per Equity Share for an aggregate amount up to Rs 85,00,00,200/- excluding transaction
cost(s), pursuant to Board of Directors approval accorded at their Meeting on February 09th, 2022. The Buyback Size was 9.8% of the aggregate paid- up equity share capital and free reserves (including securities premium account) as per the last audited financial statements of the Company as on March 31st, 2021 and was within the statutory limits of 10% of the total paid-up equity share capital and free reserves (including securities premium account) as per the last audited financial statements of the Company for financial year ended March 31st, 2021. Settlement of buyback bids were completed on April 20th, 2022. The buy-back process was completed and the 14,16,667 shares were extinguished on April 25th, 2022. Post buyback paid-up equity share capital of the Company stood at Rs 9,80,21,212/- consisting of 4,90,10,606 equity shares of the face value of Rs 2/- each.
5. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Vigil Mechanism as envisaged in the Act, the Rules framed thereunder and the SEBI Listing Regulations, is implemented through the CompanyRss Whistle Blower and Vigil Mechanism Policy. The CompanyRss vigil mechanism provides for adequate safeguards against victimisation of the Employees and Directors of the Company to report genuine concerns regarding unethical behaviour, actual or suspected fraud or violation of the CompanyRss Codes and Policies, instances of leak/suspected leak of unpublished price sensitive information, accounting or auditing irregularities or misrepresentations, fraud, theft, bribery and other corrupt business practices, etc.
All protected disclosures concerning financial or accounting matters should be addressed, in writing, to the Chairperson of the Audit Committee of the Company for investigation. In respect of all other protected disclosures, those concerning the Ombudsman and employees at the levels of Senior Vice Presidents and above should be addressed to the Chairperson of the Audit Committee of the Company and those concerning other employees should be addressed to the Ombudsman of the Company. The Ombudsman may refer the matter to the Chairperson of the Audit Committee depending upon the importance of the matter.
During the financial year under review, no personnel was denied access to the Chairperson of the Audit Committee of the Board. An update on whistle blower complaints is provided to the Audit Committee of the
Company on a quarterly basis. No whistle blower complaints were received during the financial year under review.
The Whistle Blower and Vigil Mechanism Policy of the Company is available on the website of the Company and can be accessed at the web link: https://www. gulfoilindia.com/investors/investor-information/ policies/.
6. RESEARCH & DEVELOPMENT
Automobile sector recovery was marred by supply side challenges. In this difficult period, our R&D Centre is working hard on technology solutions addressing market needs, futuristic lubricants and assist OEM businesses. Cost effective product range across the segment are need of the hour given overall market scenario. Keeping this in mind Gulf Oil ensured that the product range introduced comes with strong performance claims and yet is cost competitive meeting the required specification for respective segments.
The Company has been at the forefront in launching longer drain products in the Indian lubricant market and such longer drain products in addition to providing more value to the customers also help in reducing carbon footprint and protection of environment by prolonging the usage of lubricating oils.
The company is now geared towards the next level which demands for fuel economy lubricant and also working to adopt the evolution of e-mobility. We are ready with EV fluids such as transmission lubricants, coolants, greases and brake fluids with possible product differentiation attributes for the future electric vehicle models.
The Company continues to introduce the lubricants with latest specifications for commercial vehicles, passenger cars, motorcycles and scooters year after year. It adopts its new global products by testing & validating the formulations suiting to local operating conditions based on locally available raw materials. The top tier products aimed at fuel economy benefit, ensures improved fuel economy vs industry standards while protecting the durability of engines/equipment to reduce the carbon footprint.
We are working closely with various B2B customers and OEMs in Automotive and Industrial segment.
We have established various customised products for varied applications. This includes Engine oil, Transmission oil, Greases, Hydraulic oils, Industrial lubricants, Metal working fluids etc.
7. SUBSIDIARIES/JOINT VENTURE/ASSOCIATES
The Company has no subsidiary companies within the meaning of Section 2(87) of the Companies Act, 2013.
During the financial year 2021-22, TechPerspect Software Private Limited (“TSPL”) became as associate of the Company.
With an objective to enhance the CompanyRss presence and capabilities in the e-mobility, the Company has acquired 26% of the paid-up share capital (on a fully diluted basis) of TSPL during the financial year 2021-22. The acquisition has been completed on March 10th, 2022, making TSPL an Associate of the Company with effect from the said date.
TSPL is engaged in the business of SaaS & backend software development kit and API integration apps for charging management software platform for EV charging, battery swapping, EV fleet management, smart charging with load management, park and charge, V2G including a backend platform and frontend mobile apps.
In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared the consolidated financial statement which is a part of the Annual Report. The performance and financial position of the Associate company for the financial year ended March 31st, 2022 in the prescribed format AOC-1 is attached as Annexure-II to the BoardRss Report.
In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements, has been placed on the website, https://www.gulfoilindia.com/investors/ financials/annual-reports/.
8. HUMAN RESOURCES / INDUSTRIAL RELATIONS AND ESOP SCHEME
We take care of people & people take care of the Business.
FY 2021-22 was yet another challenging year for our people. All of us were affected by the pandemic in different ways. The year was a mix of getting back to normal operations as well as part of the year under lockdown. We have quickly adopted the new ways of working - rethinking and reshaping our business.
As we worked with speed and agility to respond to the unexpected events during the year, we continued to nurture a culture in which our people can thrive and to prepare our people for the future of work. The company drives itRss all human capital interventions based on the Group guiding principles & Brand values. The protocols set during the COVID period for safe working were continued & the organisation extended all the necessary support to the employees to facilitate the remote working. The various guidelines were issued from time to time to facilitate the process of smooth operations of our sales teams, plant teams, depot teams including the travel guidelines & operating procedures during market visits, thereby reducing the risk to our employees.
We have best in class medical cover as part of the medical benefit programme covering the employees, their immediate families as well as the parents. The on-site vaccination programmes for the employees, their families & the business associates has helped to accelerate the coverage of the national vaccination programme. The company provided the medical cover for the business associates (DSRs- Distributor Sales Representatives) with the necessary medical support during pandemic. The organisation continues its journey of becoming more agile by transforming more flexible ways of working. The continuous communication & engagement with the employees was ensured on various related topics.
As we continued to work remotely given the surge in Covid-19 cases during the second and third wave, the safety and health of our team members were of paramount importance. Even in these trying times, we ensured seamless operations and timely deliveries, while maintaining high-quality standards.
Preparing for the future
Keeping employees informed, connected and engaged has always been crucial to our people strategy. We remain focused on building trust through a culture of openness, conversations and opportunities to speak up. We have extensive online learning programmes (GOLD Academy) not only to enable our people to upskill and reskill for their roles but also to help them prepare for the changing landscape of work. We continue to build organisational capabilities with clear focus on functional learning priorities to make our people future-fit and purpose-led. We have been able to engage employees, ensure their wellbeing and cater to diverse learner needs through Web based Trainings (WBT), self-paced modules, virtual learning journeys,
social learning in addition to Live on Class Room (LOC) & Class Room Training (CRT) programmes.
We continued investing in our touchless & remote Hiring and Onboarding to make it more seamless and automated experience. These initiatives helped us navigate the pandemic effectively. Post selection, the offer roll-out process, document collection and verification as well as onboarding were done remotely. New employees were onboarded via virtual sessions. They were enabled to be productive from the first day as we provided them with the necessary infrastructure in a work from home situation.
Our half yearly & annual ASPIRE (Align, Strive,
Perform, Inspire, Reward, Enable) review process of performance management enables the employees to achieve superior performance.
We continually strive to provide a range of options for better financial and social security, including efficient tax-management options through flexi compensation structure, Medical and personal Accident insurance, Group Term Insurance Programme. We have organized periodic webinars on importance of insurance and investment awareness. We provide long-term incentives (LTI) by granting ESOP (Employee Stock Option) and Cash based LTI (Long Term Incentive) plans. Our LTI plans are aimed at motivating and retaining key talent. We continue to drive a high-performance and growth-oriented culture through our variable pay & incentive programs. Our management compensation is closely aligned with organizational objectives and priorities and rewards higher performance.
During the financial year under review, the Company has also initiated Cash Based Long Term Incentive Plan (LTIP) for few selected key employees at various levels, those who are not covered by ESOP plan.
Employees Stock Option Scheme:
Employee Stock Options have been recognised as an effective instrument to attract and retain talent and align the interest of employees with that of the Company, thereby providing an opportunity to the employees to participate in the growth of the Company and to create long-term wealth in the hands of employees. Grant of share-based benefits to employees is a mechanism to align the interest of the employees with those of the Company, to provide them with an opportunity to share the growth of
The Company has in force Gulf Oil Lubricants India Limited- Employees Stock Option Scheme-2015 (GOLIL-ESOP Scheme). The scheme was approved by shareholders vide a special resolution passed through postal ballot on May 13th, 2015. During the financial year 2021-22 the Stakeholder Relationship Committee, upon exercise of Options by the employees, allotted 1,17,746 equity shares to the eligible employees of the Company, as per the terms and conditions of GOLIL-ESOP Scheme. The total Stock Options outstanding as of March 31st, 2022, are 9,67,618.
The Company has received a certificate from M/s BS & Company, Company Secretaries LLP, Practising Company Secretaries that GOLIL-ESOP Scheme have been implemented in accordance with SEBI Regulations and the resolution passed by members through postal ballot. The certificate will be placed at the 14th AGM for inspection by members.
The GOLIL-ESOP scheme is in compliance with SEBI regulations. As per Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, read with Securities and Exchange Board of India circular no. CIR/CFD/POLICY CELL/2/2015 dated June 16th, 2015, the details of the ESOS are uploaded on the CompanyRss website https://www.gulfoilindia.com/ investors/investor-information/investor-disclosures/.
During the financial year under review, the company has granted options to selected key employees covering below senior management as well. The options granted under the scheme shall be based on the satisfaction of vesting conditions, which can thereafter be exercised, resulting in the allotment or issue of our equity shares.
9. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a policy on Prevention of Sexual Harassment at Workplace, which is in line with requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”). The objective of this policy is to provide an effective complaint redressal mechanism if there is an occurrence of sexual harassment. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment.
During the year under review, no cases were filed under the POSH Act.
10. REMUNERATION POLICY FOR THE BOARD AND SENIOR MANAGEMENT
The Board on the recommendation of the Nomination and Remuneration Committee (“NRC”), adopted a Remuneration policy entailing Executive Remuneration Philosophy, which covers the remuneration philosophy of the Directors, KMP and Senior Management of the Company.
The salient features of the policy are provided in the “Report on Corporate Governance” Annexure-III to this Report. During the financial year under review, there has been no change to the Policy. The Remuneration policy has been uploaded on the website of the Company and can be accessed at the weblink: https://www.gulfoilindia.com/investors/ investor-information/policies/.
11. CORPORATE SOCIAL RESPONSIBILITY (“CSR”) AND RELATED MATTERS
Your Company is at the forefront of CSR and sustainability initiatives and practices. Your Company believes in making lasting impact towards creating a just, equitable, humane and sustainable society. Your Company has been involved with social initiatives in various activities in the field of ecology & environment, skill development, & education, healthcare and road safety initiatives etc. The CSR policy of the Company sets out our commitment & overall approach towards the CSR activities. The Company is instilled and guided by the values of our Group Founder, Shri. Parmanand Deepchand HindujaRss belief, “My dharma (duty) is to work so that I can give”.
The Company has continued its multi year Programmes under CSR initiatives in the area of water conservation, vocational training & education, road safety and promoting healthcare in and around its area of operations and local area at Silvassa, DNH and Ennore, Chennai as detailed below. In addition, a significant part of its CSR budget for the financial year 2021 - 22 have been diverted towards Covid-19 related CSR measures to provide much needed resources to society at large in the fight against ongoing pandemic. These projects are in accordance with Schedule VII of the Companies Act, 2013 and CompanyRss CSR policy:-
Lake Restoration: The Company has taken up the Lake Restoration project in Chennai. The first project taken up was “Sathankadu Lake Rejuvenation and Restoration Project” with help from Chennai municipal Corporation which is located 10 Kms from our Ennore
Plant. The project scope consists of cleaning the lake from non degradable trash, bund fencing, lake recharge wells and developing the percolation trench, plantation & aesthetic development. The project is completed & handed over to the community.
During the FY 2021-22, the Company has taken up one more lake restoration project “Ariyalur Tank Rejuvenation and Restoration Project” with help from Chennai Municipal Corporation. The lake is located 10.5 Kms from our Ennore Plant. The work is in full swing & the project is expected to be completed by OctoberRs 2022.
Safe Drinking Water ATM: The Company has established two Safe Drinking Water ATMs at Ennore, Chennai with technical support from Sarvajal Piramal and Hinduja Foundation. The water ATMs are equipped with Watershed building, purification equipment and borewell. Water ATMs will have a recharge bore to recharge groundwater using backsplash water and rooftop harvesting. The Company aims these ATMs to be net Water Positive. Both the plants are operational at break even & handed over to the community.
Mobile Medical Unit: The Company continued its support for the mobile medical unit during the current year in the remote villages near Silvassa,
DNH. This CSR project provides much needed free medical support to the tribal population residing in the villages near Silvassa. The programme is administered through “Rogi Kalyan Samiti” constituted under the direct supervision of Medical Officer Silvassa & Vinobha Bhave Hospital, Silvassa. The state-of-the- art medical facilities available to the villagers free of cost, in the mobile van which includes the diagnostic facility, laboratory test and medicine dispensing. During the Covid period, the MMU has been converted into a Mobile Covid Care Centre.
Kushal Mechanic Program: To make a positive impact on the Mechanics, the CompanyRss initiative on vocational training known as “Kushal Mechanic Program” for two-wheeler mechanics who are lacking in formal education and training has continued although changed to an Online program due to social distancing norms during the pandemic. The Company has changed the training mode delivery to online training. The company also aims to start the similar programme covering four wheeler mechanics in near future with all India coverage.
Other Programs: During the pandemic crisis, a few more community support programmes were undertaken such as COVID Kavach- medical
insurance support, vaccination camps etc. Some more initiatives includes - Rural Development Progrmame.
During the financial year under review, the Company has spent Rs 539 lacs towards CSR activities as stipulated under Schedule VII of the Act. There is no unspent CSR expenditure as on March 31st, 2022.
The Board has, pursuant to the recommendation of the CSR Committee, adopted a CSR Policy. The CSR policy can be accessed through the weblink: https:// www.gulfoilindia.com/investors/investor-information/ policies/.
The scope of the CSR Policy is as under:
i. Planning Project or programmes which the Company plans to undertake, falling within the purview of Schedule VII of the Act;
ii. Monitoring process of such project or programmes.
Further, in terms of the amended CSR Rules, the Chief Financial Officer has certified that the funds disbursed for CSR have been used, for the purpose and in the manner approved by the Board for financial year 2021-22.
Annual Report on CSR
The CompanyRss CSR Policy statement and annual report on the CSR activities undertaken during the financial year ended March 31st, 2022, in accordance with Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules,
2014 (“CSR Rules”) is set out in Annexure-IV to this Report.
12. MEETINGS OF THE BOARD AND COMMITTEES OF THE BOARD
During the financial year under review, six (6) Board Meetings were convened and held and the details of which are given in the Report on Corporate Governance, which forms part of this Report. The intervening gap between the meetings was within the period prescribed under the Act and the SEBI Listing Regulations. The Committees of the Board usually meets the day before or on the day of the formal Board meeting, or whenever the need arises for transacting business.
13. COMMITTEES OF THE BOARD
The Company has six Board Committees as of March 31st, 2022:
1) Audit Committee
2) Nomination and Remuneration Committee
3) StakeholdersRs Relationship Committee
4) Risk Management Committee
5) Corporate Social Responsibility Committee
6) Buyback Committee
Details of all the Committees along with their main terms, composition and meetings held during the financial year under review are provided in the Report on Corporate Governance, forming part of this Report.
14. DIRECTORS & KEY MANAGERIAL PERSONNEL
As of March 31st, 2022, the Board of your company consists of six (6) Directors comprising of a Managing Director (Executive Director), two (2) Non-Executive Non-Independent Directors, and three (3) (i.e. 50%) Non-Executive Independent Directors.
Director Retiring by Rotation
During the year under review, as per the provisions of the Act and the Articles of Association of the Company, Mr. Shom Ashok Hinduja (DIN: 07128441) Non-Executive Director retires by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers his candidature for reappointment as a Director.
The Board of Directors at their Meeting held on May 21st, 2022 based on the recommendation of Nomination and Remuneration Committee, has proposed the re-appointment of Mr. Shom Ashok Hinduja for approval of the shareholders at the ensuing AGM of the Company.
The Board is of the opinion that Mr. Shom Ashok Hinduja possess the requisite knowledge, skills, expertise and experience to contribute to the growth of the Company.
Profile and other information of Mr. Shom Ashok Hinduja as required under Regulation 36 of SEBI Listing Regulations, 2015 and Secretarial Standard - 2 are given in the Notice of the 14th AGM of the Company. The above proposal for re-appointment form part of the Notice of the 14th AGM and the relevant Resolution is recommended for approval of the Members of the Company.
The Managing Director & CEO and Independent Directors of the Company are not liable to retire by rotation.
Declaration by Independent Directors
Our definition of RsindependenceRs of Directors is derived from Regulation 16(1 )(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and Section 149(6) of the Companies Act, 2013. In the opinion of the Board, the Independent Directors fulfil the conditions specified under the Companies Act, 2013, the Rules made thereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, are independent of the management, and are persons of high integrity, expertise and experience.
The Company has received the following declarations from all the Independent Directors confirming that:
1. They meet the criteria of independence as provided in Section 149(6) of the said Act and Regulation 16(1)(b) of the SEBI Listing Regulations and that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence; and
2. They have registered themselves with the Independent DirectorRss Database maintained by the Indian Institute of Corporate Affairs (RsIICARs) and have passed the proficiency test, if applicable to them.
None of the Directors of the Company are disqualified for being appointed as Directors as specified under Section 164(2) of the Act read with Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.
Key Managerial Personnel
Mr. Ravi Shamlal Chawla, Managing Director & CEO, Mr. Manish Kumar Gangwal, CFO and Ms. Shweta Gupta, Company Secretary are the Key Managerial Personnel of the Company.
During the year under review, there were no changes in the Key Managerial Personnel of the Company according to the provisions of Sections 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
15. CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES AND INDEPENDENCE OF A DIRECTOR
In terms of the provisions of Section 178(3) of Act and Regulation 19 of the SEBI Listing Regulations, the NRC has formulated the criteria for determining qualifications, positive attributes and independence of Directors, the key features of which are as follows:
• Qualifications - The Board nomination process encourages diversity of thought, experience, knowledge, age and gender. It also ensures that the Board has an appropriate blend of functional and industry expertise.
• Positive Attributes - Apart from the duties of Directors as prescribed in the Act, the Directors are expected to demonstrate high standards of ethical behavior, communication skills and independent judgment. The Directors are also expected to abide by the respective Code of Conduct as applicable to them.
• Independence - A Director will be considered independent if he/she meets the criteria laid down in Section 149(6) of the Act, the Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations.
16. ANNUAL PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS
According to the provisions of the Act and SEBI Listing Regulations, annual performance evaluation of the Board, the Directors individually as well as the evaluation of the working of its Committees was carried out. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
17. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to the energy conservation, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are provided in Annexure-V and form part of this report.
18. BUSINESS RESPONSIBILITY REPORT
As stipulated in Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility Report of your Company, highlighting the initiatives taken by the Company in the areas of social, environmental, governance and economic responsibilities of business for the financial year 2021-22, in the prescribed format is provided separately in the Annexure-VI and forms an integral part of this Report.
19. COPY OF ANNUAL RETURN
Pursuant to Section 92(3) read with section 134(3)
(a) of the Act, a copy of the Annual Return of the Company for the financial year under review prepared under Section 92(1) of the Act read with Rule 11 of Companies (Management and Administration) Rules, 2014 in prescribed Form No. MGT-7 is placed on the website of the Company and can be accessed at the weblink: https://www.gulfoilindia.com/investors/ investor-information/investor-disclosures/.
20. CORPORATE GOVERNANCE
Your Company is committed to maintaining the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set out by SEBI. The report on Corporate Governance as stipulated under the SEBI Listing Regulations forms part of this Report.
Your Company has duly complied with the Corporate Governance requirements as set out under Chapter IV of the SEBI Listing Regulations and M/s. Shreyans Jain & Co, Practicing Company Secretaries, vide their certificate dated May 14th, 2022, have confirmed that the Company is and has been compliant with the conditions stipulated in chapter IV of the SEBI Listing Regulations. The said certificate forms part as the annexures to the Report of Corporate Governance.
21. AUDIT COMMITTEE
The details including the composition of the Audit Committee and terms of reference of the Committee are included in the Corporate Governance Report, which is a part of this report.
22. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
Details of loans, guarantees and investments outstanding as on March 31st, 2022 under the provisions of Section 186 of the Act read with the
Companies (Meetings of Board and its Powers) Rules, 2014, are set out in Notes 4,5 & 12 to the Financial Statements of the Company.
23. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN MARCH 31st, 2022 AND THE DATE OF THIS REPORT
There were no material changes or commitments affecting the financial position of the Company between the end of the financial year under review and the date of this Report. Further, there was no change in the business of the Company during the Financial Year 2021-22.
24. RISK MANAGEMENT
Risk management is integral to the CompanyRss strategy and for the achievement of the long-term goals. Our success as an organisation depends on our ability to identify and leverage the opportunities while managing the risks. With the continuation of the COVID-19 pandemic and further aggravated by Russia Ukraine crisis, the challenges of uncertain lockdowns, unlock phases, health hazards and supply chain disruptions across the globe continued to impact the businesses.
The Company has a well-defined risk management framework in place which inter-alia includes identification of elements of risk, if any, which in the opinion of the Management and the Board may impact the performance outcome of the Company and their possible mitigation plans.
The Risk Management Committee of the Company has been entrusted by the Board with the responsibility of reviewing the risk management process in the Company and ensuring that the risks are brought within acceptable limits.
The Board of Directors of the Company on the recommendation of the Risk Management Committee has developed Risk Management Policy for the Company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company and which articulates the CompanyRss approach to address the uncertainties in its endeavour to achieve its stated and implicit objectives. During the year under review, the Board on recommendation of Risk Management Committee amended the Risk Management policy in line with the SEBI Listing Regulations.
The Risk Management Committee has implemented an integrated risk management approach and monitors the risk management process and assesses significant risks on regular basis to ensure that a robust system of risk controls and mitigation is in place. Senior management periodically reviews this risk management framework to keep updated and addresses emerging challenges.
In addition to key strategic and operational risks, data security, cyber security, business continuity, and employee health and well-being were of primary focus during the year under review. The Risk Management framework followed by the Company is elaborately detailed in the Management Discussion and Analysis section, forming an integral part of the Annual Report.
25. INTERNAL FINANCIAL CONTROLS
The Company has well defined and adequate internal control system, commensurate with size, scale and complexity of its operations. The internal financial controls are adequate and are operating effectively to ensure orderly and efficient conduct of business operations. During the financial year, Internal Financial Controls (IFC) testing process was done to review the adequacy and strength of IFC followed by the Company. As per the assessment, no major concerns and no reportable material weaknesses in the design or operation were observed. The Board has also put in place a requisite legal compliance framework to ensure compliance with all the applicable laws and that such systems were adequate and operating effectively.
Further there were no letters of internal control weaknesses issued by the Internal Auditor or the Statutory Auditors during the financial year under review. The CompanyRss Financial Statements are prepared on the basis of the Significant Accounting Policies that are carefully selected by Management and approved by the Audit Committee and the Board. These Accounting Policies are reviewed and updated from time to time.
The details of the internal control system and adequacy are mentioned in the Management Discussion and Analysis section, forming an integral part of the Annual Report.
26. TRANSACTIONS WITH RELATED PARTIES
All related party transactions (RPT) that were entered during the financial year under review were on armRss length basis and in the ordinary course of business.
In line with the requirements of the Act and the SEBI Listing Regulations, the Company has formulated a Policy on dealing with Related Party Transactions.
SEBI has carried out amendments in the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”) vide the SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 wherein certain amendments came into force from April 01st, 2022 while remaining would come into force from April 01st, 2023.
During the financial year under review, the said policy was revised to incorporate the amendment to the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The updated Policy is uploaded on the CompanyRss website and the same can be accessed at the weblink: https://www.gulfoilindia.com/ investors/investor-information/policies/.
The policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. This policy specifically deals with the review and approval of RPTs, keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. All RPTs are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for RPTs that are of repetitive nature and / or entered in the ordinary course of business and are at armRss length.
A statement on Related Party Transactions specifying the details of the transactions entered, under each omnibus approval granted, is placed for review at the meeting of the Audit Committee held in the succeeding quarter.
All transactions with related parties are as per the policy on related party transactions formulated by the Company.
Further, in terms of the provisions of Section 188(1) of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 23 of the SEBI Listing Regulations, all contracts/ arrangements/
transactions entered into by the Company with its related parties, during the year under review, were
• in “ordinary course of business” of the Company,
• on “an armRss length basis” and
• not “material”
The details of the related party transactions as per Indian Accounting Standards (IND AS) - 24 are set out in Note 46 to the Financial Statements of the Company.
27. DIRECTORSRs RESPONSIBILITY STATEMENT
In accordance with Section 134(5) of the Companies Act, 2013 (including any statutory modification(s) and/ or re-enactment(s) thereof for the time being in force), the Directors of the Company state that:
a) in the preparation of the annual accounts for the year ended March 31st, 2022, the applicable accounting standards have been followed and there are no material departures from the same;
b) accounting policies selected have been applied consistently and reasonable & prudent judgments and in the preparation of the annual accounts for the year ended March 31st, 2022, the applicable accounting standards have been followed and there are no material departures from the same;
c) they 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 as at March 31st, 2022 and of the profit of the Company for year ended on that date;
d) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
e) they have prepared the annual accounts on a going concern basis;
f) they have laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and are operating effectively; and
g) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Compliance with Secretarial Standards
Your directors confirm that during the financial year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (“ICSI”).
28. AUDITORS & AUDIT REPORT:
M/s Price Waterhouse LLP, Chartered Accountants (FRN: 301112E/E300264) were re-appointed as statutory auditors of the Company at the 11th AGM, for a term of 5 years to hold office until the conclusion of the 16th AGM of the Company.
Further, the AuditorsRs Report “with an unmodified opinion”, given by the Statutory Auditors on the financial statements (both standalone and consolidated) of the Company for the financial year 2021-22, is disclosed in the financial statements forming part of this Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Statutory Auditor in their Report for the financial year under review.
The notes to the financial statements are selfexplanatory and do not call for any further comments.
Pursuant to section 204 of the Act and Rules made thereunder, the Company had re-appointed M/s BS & Company, Company Secretaries LLP (Firm Registration No AAE-0638) to carry out Secretarial Audit of the Company for the financial year 2021-22.
The Secretarial Audit Report in Form No. MR-3 given by the Secretarial Auditor of the Company is annexed as Annexure-VII to this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Secretarial Auditor in his Report for the financial year under review.
Reporting of frauds by Auditors
During the year under review, the Statutory Auditor or Secretarial Auditor of the Company have not reported any frauds to the Audit Committee or the Board of Directors under Section 143(12) of the Act, including rules made thereunder.
Cost Records & Cost Auditor:
As per the requirements under Section 148(1) of the Act read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company is required to maintain the cost records and accordingly such accounts and records are made and maintained by the Company.
In terms of the provisions of Section 148(2) of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Board, on the recommendation of Audit Committee, has re-appointed M/s Dhananjay V. Joshi & Associates, Cost Accountants (Firm Registration No.000030), as Cost Auditors of the Company to audit the cost records of the Company for the financial year 2022-23 for a remuneration of Rs 3,50,000/- (Rupees Three Lakhs Fifty thousand only) plus applicable taxes and reimbursement of out-ofpocket expenses.
The remuneration payable to the Cost Auditor is subject to ratification by the Members at the Annual General Meeting. Accordingly, the necessary Resolution for ratification of the remuneration payable to M/s Dhananjay V. Joshi & Associates, Cost Accountants, to conduct the audit of cost records of the Company for the Financial Year 2022-23 has been included in the Notice of the forthcoming 14th AGM of the Company. The Directors recommend the same for approval by the Members.
29. INTERNAL AUDIT
Your Company has in place an adequate internal audit framework to monitor the efficacy of the internal controls to provide to the Audit Committee an independent, objective and reasonable assurance on the adequacy and effectiveness of the CompanyRss processes. The Internal Auditor of your company reports directly to the Audit Committee. The Internal Audit function develops an extensive audit plan for the Company, which covers, inter-alia, corporate, core business operations, factories, regional offices, warehouses as well as support functions. The internal audit approach verifies compliance with the operational and system-related procedures and controls. The Audit Committee reviews the annual internal audit plan. Significant audit observations are presented to the Audit Committee, together with the status of the management actions and the progress of the implementation of the recommendations.
30. REMUNERATION OF DIRECTORS AND EMPLOYEES
Disclosures about remuneration and other details, as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure-VIII to the BoardRss Report.
Further, a statement containing names of top ten employees in terms of remuneration drawn as required under section 197(12) of the Act read with rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of the Annual Report. However, in line with the provisions of the first proviso to section 136(1) of the Act, the reports and accounts, as set out therein, are being sent to all shareholders of the Company, excluding the aforesaid information and the same is open for inspection at the registered office of the Company during working hours up to the date of the ensuing Annual General Meeting. Any Member desirous of obtaining a copy of the said annexure may write to the Company Secretary at secretarial@gulfoil. co.in.
31. CEO AND CFO CERTIFICATION
As required under Regulation 17(8) read with Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the CEO and CFO certificate was placed before the Board of Directors of the Company at its meeting held on May 21st, 2022 and is attached with the annual report as Annexure-IX.
32. OTHER DISCLOSURES
In terms of the applicable provisions of the Act and SEBI Listing Regulations, your Company additionally discloses that during the financial year under review:
• there was no change in the nature of business of your Company;
• your Company has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as of March 31st, 2022, there were no deposits that were unpaid or unclaimed and due for repayment, hence, there has been no default in repayment of deposits or payment of interest thereon;
• your Company has not issued any shares with differential voting rights;
• your Company has not issued any sweat equity shares;
• no significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status operations of your Company in the future.
• your Company has not raised any funds through preferential allotment or qualified institutional placement as per Regulation 32(7A) of SEBI Listing Regulations.
• no application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year along with their status as at the end of the financial year is not applicable.
• the requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Bank or financial Institutions along with the reasons thereof, is not applicable.
It is further disclosed that:
• There is no plan to revise the financial statements or directorsRs reports in respect of any previous financial year.
The Directors take this opportunity to express their appreciation for the support and co-operation extended by the Members, Customers, Banks and other Business Associates. The Directors gratefully acknowledge the on-going co-operation and support provided by the Government, Regulatory and Statutory bodies.
The Directors place on record their deep appreciation for the exemplary contribution made by the employees of the Company at all levels. Their dedicated efforts and enthusiasm have been pivotal to the CompanyRss growth.
|For and on behalf of the Board of Directors|
|Sanjay G. Hinduja|
|Date: August 3rd, 2022||(DIN: 00291692)|