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Your Directors are pleased to present the 10th Annual Report and Audited Accounts for the financial year ended March 31,2018.
1. Financial Results:
( In lakhs)
|Particulars||For the Year ended 31.03.2018||For the Year ended 31.03.2017|
|Revenue from Operations (Net of Indirect Taxes)||1,33,225.95||1,08,679.27|
|Profit before finance cost, depreciation & tax||26,182.05||19,815.72|
|Less: Finance Costs||853.13||982.48|
|Profit before depreciation & tax||25,328.92||18,833.24|
|Profit Before Taxation||24,285.61||18,108.20|
|Profit After Taxation||15,855.70||11,755.52|
|Balance brought forward from previous year||17,490.33||11,136.05|
|Interim Dividend paid on Equity Shares for the year||(1,988.00)||(1,736.81)|
|Dividend distribution Tax on Interim Dividend||(404.71)||(353.57)|
|Final Dividend paid on Equity Shares for the year||(2,484.44)||(1,984.37)|
|Dividend distribution Tax on Final Dividend||(505.77)||(403.97)|
|Other Comprehensive Income (OCI)||14.34||(22.52)|
|Transfer to General Reserve||(1,000.00)||(900.00)|
|Balance Carried to Balance Sheet||26,977.45||17,490.33|
The Company has continued its growth trajectory by outperforming the industry and has delivered a Net Revenue growth of 22.6%, EBITDA growth of 32.6%, PBT growth of 34.1% and PAT growth of 34.9% for the year over the last financial year.
Net revenues for the year2017-18 was 1,33,225.95 lakhs ( 1,08,679.27 lakhs in the previous year), Profit before tax for the year 2017-18 was Rs. 24,285.61 lakhs ( 18,108.20 lakhs in the previous year). EBITDA has shown healthy growth of 32.6% YOY.
Profit after tax for the year was Rs. 15,855.70 lakhs (Previous year Rs. 11,755.52 lakhs) resulting in an Earnings Per Share (Basic) of Rs. 31.92 (Previous year Rs. 23.70).
Performance highlights are discussed in detail in the Management Discussion and Analysis and forming an integral part of this Report.
The Board of Directors of the Company had approved the Dividend Distribution Policy in line with Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The policy is separately provided as Annexure E forming an integral part of this Report and is also uploaded on the website of the Company at http://www.gulfoilindia.com
In line with the Policy, the Board has recommended a final dividend of Rs. 6.50 per equity share (325% on the Face Value of Rs. 2/- per share) for the year 201718. The final dividend of Rs. 3,236.37 lakhs, if approved by the Shareholders at the ensuing Annual General Meeting, will be paid to all the Shareholders of the Company whose names appear on the Register of Members as on the date of the Book Closure. Earlier the Board at their meeting held on February 6, 2018, had declared an Interim Dividend of Rs. 4/- per share i.e. 200% of the Face Value of Rs. 2/- per share. The said Interim Dividend was paid to all eligible shareholders on February 26, 2018.
With this, the total dividend for the full year 2017-18 shall stand at Rs. 10.50 per share (525% on Face Value of Rs. 2/- per share).
3. Transfer to Reserve:
During the year, Board has appropriated Rs. 1,000 lakhs to General Reserves. (Previous year Rs. 900 lakhs)
4. Share Capital:
During the year there has been an increase 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 paid-up equity share capital of the Company as on March 31, 2018 was Rs. 994.00 lakhs (previous year Rs. 992.68 lakhs). The authorized capital of the Company as on March 31,2018 was Rs. 10,46,27,228 divided into 5,23,13,614 equity shares of Rs. 2/- each. There was no change in the authorized capital of the Company during the year.
5. Management Discussion and Analysis:
Management discussion and Analysis is provided separately, forming an integral part of this Report.
6. Vigil Mechanism / Whistle Blower Policy:
The Company has adopted Whistle Blower and Vigil Mechanism policy for Directors and Employees of the Company. The Company has established a secured system to enable Directors and Employees to report their genuine concerns, generally impacting / affecting business of our Company, including but not limited to improper or unethical behavior / misconduct/ actual or suspected frauds / violation of Companys code of conduct. 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 President 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. Your Company hereby affirms that no Director or employee has been denied access to the Chairperson of the Audit Committee. During the year no complaints were received under vigil mechanism.
7. Public Deposits:
The Company has not accepted any deposits during the year from the Public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
8. Research & Development:
The Company has recently set up a global standard R&D Centre at Chennai, which is fast emerging as a major automobile hub.
This R&D facility has five laboratories, viz. Rheology Lab, Performance Testing Lab, Tribology Lab, Analytical Lab and Chemical Lab, which are designed as per international Laboratory and HSE Standards and equipped with the state-of-the art testing equipment for development of lubricants and specialties. This facility provides an excellent ambience for scientists and technologists to pursue innovative and high quality research & development work.
Government of India had decided to leapfrog from BS IV to BS VI (Euro VI equivalent) emission norms pan India effective 1st April 2020 to improve the air quality by reducing the noxious vehicular pollution. Further, Government of India implemented the fuel economy norms for both passenger and commercial vehicles and initiated steps to encourage deployment of electric vehicles and generation of power based on renewable energy sources to reduce the carbon dioxide emissions and thereby global warming.
To meet these new challenges, the new R&D Centre is ready for designing futuristic lubricants and specialties for both conventional and electric vehicles and industrial applications by focussing on fuel economy, equipment life and environment protection.
The Company is well prepared to not only retain and further improve on the long drain oil trend set by it for over a decade in the commercial vehicle and motorcycle segments but also to adopt the new global products by optimising the formulations suiting to local engines and operating conditions based on local raw materials to ensure improved fuel economy while protecting the durability of engines/equipment to reduce the carbon footprint.
Though the Company receives global product formulations from Gulf Oil International under the license agreement, the R&D Centre has adopted the global formulations required for future BS VI vehicles fitted with after treatment devices and initiated evaluation in local vehicles and operating conditions to ensure their suitability not only for future BS VI vehicles but also backward compatibility in existing vehicles. It is staffed with well qualified and experience scientists and technologists for development of product formulations. The Company recovers cost spent on R&D from Gulf Oil International under the agreement.
9. Subsidiaries/Joint Venture/Associates:
The Company does not have any subsidiary/Joint Venture/ Associates as on March 31,2018.
10. Human Resources / Industrial Relations, ESOP Scheme:
The Company believes in creating the supporting environment for its biggest asset - Human Capital. The employee wellbeing & safety is critical along with the achievement of the business objectives. We have a large diversified workforce spread across the locations.
The Company has put "Safety First" programme to promote safety practises across plant & non plant locations.
The Company has put in place the Human Capital strategy in line with its vision & overall business plan. The important pillars of the strategy includes, Leadership development, Culture building, Talent Development & Organisation alignment.
The focus on employee development and efforts to enhance competency levels through training programs continued. Detailed information on this section has been provided in the Management Discussion and Analysis, which is forming an integral part of this Report.
Employees Stock Option Scheme:
During the year under review, your Company has allotted 66,115 equity shares under "Gulf Oil Lubricants India Limited- Employees Stock Option Scheme-2015" to eligible employees of the Company. The total Stock Options outstanding as of March 31,2018 are 6,63,329. The information as required under Regulation 14 of the SEBI(Share Based Employee Benefits) Regulations, 2014 are disclosed on the website of the Company at weblink http://www.gulfoilindia.com/investors/ investor-information/investor-disclosures/
11. Prevention of Sexual Harassment Policy:
Your Company has adopted Prevention of Sexual Harassment (POSH) policy. A separate internal Committee has been constituted under the policy. No complaints were received under POSH during the year ended March 31,2018.
12. Remuneration Policy:
The Board has adopted a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The policy also lays down the criteria for selection and appointment of Board members. The details of the policy are provided in the "Report on Corporate Governance" Annexure F to this Report.
13. Corporate Social Responsibility (CSR) Initiatives and Programs:
The Company has continued its programs under CSR initiatives in the area of vocational training, road safety awareness, education and promoting healthcare in and around its area of operations and local area at Silvassa, DNH. These projects are in accordance with schedule VII of the Companies Act, 2013 and Companys CSR policy. A report on CSR activities as required under Companies (Corporate social responsibilities Policy) Rules, 2014 is set out in Annexure A, forming part of this Report.
The Company instilled and guided by the values of our Group Founder, Shri. Parmanand Deepchand Hindujas belief, "My dharma (duty) is to work, so that I can give". The Company actively engaged in various programs under CSR during the year. The brief summary of the same are given below:
a) Mobile Medical Unit: Being a multi-year program, the Company continued its support for 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 program is administered through Hinduja Foundation and Hinduja Hospital. The state of the art medical facilities available to the villagers free of cost, in the mobile van which includes diagnostic facility, laboratory test, medicine dispensing.
b) Road Safety Drive: The Company supported road safety campaign to promote education and awareness on road safety amongst bike riders. During the campaign, safety helmets were distributed to traffic police at various cities in Maharashtra like Mumbai and Ahmednagar. The Company also supported a road safety rally and awareness programs initiated by Mukul Madhav Foundation at Ahmednagar jointly with Ahmednagar city police and other corporates and distributed 500 helmets to Ahmednagar city police.
During the year, the Company initiated road safety awareness rally in association with K.P.B. Hinduja College (during Panaah fest) which was inaugurated by Shri Diwakar Raote, Hon. Minister of Transport, Government of Maharashtra and in the presence of film actor Mr. Abhinav Shukla. More than 250 helmets were distributed to the students of various colleges who participated in the awareness rally. Flash mob on road safety competition was also organised wherein 16 colleges had participated and award was distributed to the winner in the
presence of Mr. Ravi Chawla, Managing Director of the Company. Employees from various functions were participated in the initiative.
c) Kushal Mechanic Program: The Companys initiative on vocational training known as "Kushal Mechanic Program" for two wheeler mechanics who are lacking in formal education and training has gained momentum. During the year, the Company added one more training centre with the help of M/s TVS Training Institute for imparting training for the benefit of mechanics based in southern part of India. Our association with MITCON Centre for CSR and Skill Development continued during the year. During the financial year more than 492 mechanics were benefited with this program. This being a multi-year program, which will be further implemented in other regions in future.
d) Other Programs: Few other programs were undertaken during the year in the area of Community development (through Gift of Life Adventure, Night run for Woman safety (through U Active) and Computer Education support for children.
14. Directors & Key Managerial Personnel:
During the year under review, in accordance with the provisions of the Companies Act, 2013 ("Act") and the Articles of Association of the Company, Mr. Shom A. Hinduja (DIN: 07128441) retires by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers his candidature for re-appointment as a Director.
The resolutions seeking approval of the members of the Company for the re-appointment of Mr. Shom A. Hinduja, Non-Executive Director have been incorporated in the Notice of the Annual General Meeting of the Company alongwith his brief profile.
I n accordance with section 149(7) of the Companies Act, 2013, each Independent Director has given a written declaration to the Company confirming that he/ she meets the criteria of independence as mentioned under section 149(6) of the Act.
The Company had issued formal letter of appointment to all Independent Directors and the terms and conditions of their appointment have been disclosed on the website of the Company.
Your Company follows a structured orientation and familiarization program through various reports/ codes/ internal policies for all the Directors with a view to update them on the Companys policies and procedures on a regular basis. The details of
familiarization program have been posted on the website of the Company under the web link http:// www.gulfoilindia.com/investors/investor-information/ corporate-governance/
Key Managerial Personnel:
The following persons have been continued as Key Managerial Personnel of the Company pursuant to section 2(51) and section 203 of the Act, read with rules framed thereunder: 1) Mr. Ravi Chawla, Managing Director 2) Mr. Manish Kumar Gangwal, Chief Financial Officer and 3) Mr. Vinayak Joshi, Company Secretary and Compliance Officer. None of the Key Managerial Personnel have resigned during the year under review.
15. Board Evaluation:
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 a Board evaluation process was completed through a process of structured questionnaire and taking into consideration various aspects of the Boards functioning, composition, culture, obligation and governance. The criteria for performance evaluation have been detailed in Corporate Governance Report, Annexure F to this Report and is also uploaded on the website of the Company at http://www.gulfoilindia.com. The Board of Directors expressed their satisfaction with the evaluation process.
16. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as required pursuant to section 134(3) of the Companies Act, 2013 read with rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure B and forming an integral part of this Report.
17. Business Responsibility Report:
Pursuant to Regulation 34 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report is provided separately in the Annexure- C and forms an integral part of this Report.
18. Information on Stock Exchanges:
The Companys equity shares are listed on BSE Limited (Designated Exchange) and The National Stock Exchange of India Limited.
19. Extract of Annual Return:
The details of extracts of Annual Return in Form MGT-9, as required under section 92 of the Companies Act, 2013 are enclosed as Annexure D and forming an integral part of this Report. The same is also available on Companys website http://www.gulfoilindia.com.
20. Corporate Governance:
As per SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, a Report on Corporate Governance is given separately in Annexure F forming an integral part of this Report, together with compliance certificate issued by Practicing Company Secretary.
21. Particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013:
The details of Loan, Guarantees and Investments outstanding as on March 31,2018 under Section 186(4) of the Companies Act, 2013 are provided in Note 4, 5, 12 and 39 to the Financial Statements.
22. Material Changes and Commitments affecting the financial position of the Company which have occurred between March 31, 2018 and the date of this Report:
There were no material changes and commitments affecting the financial position of the Company between the end of financial year (March 31,2018) and the date of this Report. Further, there was no change in the business of the Company during the Financial Year 2017-18.
23. Risk Management Policy:
The Company has implemented an integrated risk management approach through which it reviews 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. Risk Management framework followed by the Company is elaborately detailed in the Management Discussion and Analysis section, forming an integral part of this Report.
24. Internal Control Systems and their Adequacy:
The Company has well defined and adequate internal control system, commensurate with size, scale and complexity of its operations. The internal financials controls are adequate and are operating effectively so as to ensure orderly and efficient conduct of business operations. During the year, Internal Financial Controls (IFC) testing process was done in order to review 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 requisite legal compliance framework to ensure compliance of all the applicable laws and that such systems were adequate and operating effectively. The details of internal control system and adequacy are mentioned in the Management Discussion and Analysis section, forming an integral part of this Report.
Five meetings of the Board of Directors were held during the year. The details of number of meetings of the Board held during the financial year 2017-18 are provided in Corporate Governance Report Annexure F which forms an integral part of this Report.
26. Transactions With Related Parties:
The policy on Related party transactions as approved by the Audit Committee and Board of Directors has been uploaded on the website of the Company, http:// www.gulfoilindia.com. The transactions entered into pursuant to omnibus approval were placed before the Audit Committee and Board on quarterly basis. Pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 there were no new material transactions, contracts or arrangements entered with Related Party as on March 31,2018. None of the Independent Directors have any pecuniary relationship or transactions vis-a-vis the Company except sitting fees, commission as per Companies Act, 2013. A statement showing Related Party Transactions entered during the year is given under Note 46 to the Financial Statements.
27. Significant and Material Orders passed by the Regulators or Courts or Tribunals:
There were no significant and material orders passed by the Regulators/Courts/Tribunals that would impact the going concern status of the Company and its future operations.
28. Directors Responsibility Statement:
Pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability confirm that:
a) in the preparation of the annual financial statements for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;
b) the Board have selected such accounting policies and applied them consistently and made judgments 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 and loss of the Company for the financial year ended March 31,2018;
c) 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;
d) the annual financial statement for the year ended March 31, 2018 have been prepared on a going concern basis; and
e) the Board have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and
f) The Board have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
M/s Price Waterhouse, Chartered Accountants (Firm registration No.: 301112E) were appointed as statutory auditors of the Company to hold office till the conclusion of the 11th Annual General Meeting of the Company. As required under Section 139 of Companies Act, 2013, the Company has obtained a written consent from the statutory auditor to their continuous appointment and a certificate from them to the extent that their existing appointment is in accordance with the conditions prescribed under the Companies Act, 2013 and the rules made thereunder. The Auditors Report to the shareholders on standalone financials for the year ended March 31, 2018 does not contain any qualification, observation or adverse comments. During the year under review, the Auditors of the Company have not reported any fraud under Section 143(12) of the Companies Act, 2013.
As per the requirements of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to Lubricants business and accordingly such accounts and records are made and maintained by the Company.
The Board, on recommendation of Audit Committee, has 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 2018-19 for a remuneration of Rs. 2,75,000/- (Rupees Two lakhs seventy five thousands only) plus taxes as applicable and reimbursement of out of pocket expenses . As required, under the Companies Act, 2013, a resolution seeking Members approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the 10th Annual General Meeting of the Company. There are no audit qualifications or reservations or adverse comments for the year under review.
Pursuant to section 204 of the Companies Act, 2013 and Rules made thereunder, the Company has appointed M/s BS & Company, Company Secretaries LLP (Firm Registration No AAE-0638.) to carry out secretarial Audit of the Company. The secretarial audit Report is enclosed as Annexure H and forming an integral part of this Report. There are no audit qualifications or reservations or adverse comments for the year under review.
30. Particulars of Employees and Related Disclosures:
Pursuant to section 197(12) of the Companies Act, 2013 read with Rules 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the separate Annexure-G forming part of the Boards Report.
Having regard to the provisions of Section 136(1), the Annual Report excluding the statement of top ten employees in terms of remuneration drawn and particulars of employees (under section 197(12 of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee and free of cost.
Your Directors would like to acknowledge and place on record their sincere appreciation to all stakeholders of the Company viz. various Government and other statutory bodies, customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year and also the valuable assistance and advice received from all the stakeholders including Hinduja Group. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.
|For and on behalf of the Board|
|Sanjay G. Hinduja|
|Date: August 7, 2018||(DIN: 00291692)|