The Board of Directors of Gulf Oil Lubricants India Limited ("the Company" or "your Company") is pleased to present the 15th 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 31, 2023 ("financial year under review" or "financial year" or "FY 2022-23").
1. FINANCIAL SUMMARY AND OPERATIONAL HIGHLIGHTS
(H in Lakhs)
|For the year ended March 31,2023
|For the year ended March 31,2022
|For the year ended March 31,2023
|For the year ended March 31,2022
|Revenue from Operations
|Profit before finance cost, depreciation & tax
|Less: Finance Costs
|Profit before depreciation and tax
|Profit before share of net profit/(loss) in associate accounted using equity method
|Share of net profit/(loss) of associate accounted using equity method
|Profit Before Taxation
|Profit After Taxation
|Balance brought forward from previous year
|Final Dividend paid on Equity Shares
|Transfer to securities premium reserve from share options outstanding account
|Other Comprehensive Income (OCI)
|Transfer to General Reserve
|Buy Back of equity shares
|Balance Carried to Balance Sheet
2. OPERATIONAL PERFORMANCE / STATE OF AFFAIRS
The Company has continued to achieve an all round growth in terms of Volume, Revenues, Profit Before Tax (PBT) and Profit After Tax (PAT) over the previous years and has demonstrated strong resilience during yet another challenging year. The performance has been achieved by the Company in spite of the environment of global uncertainty, volatile economic conditions and high cost pressures. Your Company recorded a market leading 15% volume growth during the financial year, which is more than 3x the industry.
Net revenues for the year 2022-23 was up 36.8% at H2,99,910.02 lakhs (H2,19,163.88 lakhs in the previous year), PBT for the FY 2022-23 was up 10.0% H31,270.40 lakhs (H28,433.77 lakhs in the previous year). PAT for the FY 2022-23 was up 10.1% H23,229.99 lakhs (Previous year H21,107.60 lakhs) resulting in an Earnings Per Share (Basic) of H47.30 (Previous year H41.89), up 12.9%.
With its consistent strategies and razor-sharp execution, the Company is today one of the leading player in the Lubricant industry. It is expanding its play in existing categories and venturing into new spaces. It evaluates both organic and inorganic routes to capitalise on industry trends and tap into new consumers or markets. This includes piloting launches into new categories by leveraging a differentiated offering and a ‘right-to-win strategy and realigning capital allocations to markets or businesses that are emerging.
During the year, the Company also launched a complete range of Electric Vehicle (EV) fluids suitable for both Pure and Hybrid EVs.
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.
3. DIVIDEND FOR FY 2022-23
The Board of Directors are pleased to recommend dividend of H25/- (Gross) per equity share of the face value of H2/- per share (being 1250% on face value of H2/- ) for the FY 2022-23, involving a cash flow of H12,254.27 lacs 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, August 25, 2023 after deduction of tax at source.
The dividend on Equity Shares is subject to the approval of the Shareholders at the 15th Annual General Meeting ("AGM") scheduled to be held on Friday, September 1, 2023. The dividend once approved by the Shareholders will be paid on or after September 6, 2023.
The Dividend payout is as per the Dividend Distribution Policy of the Company.
Taxation on Dividend
Dividends paid or distributed by a Company after April 1, 2020 are taxable in the hands of the Shareholders. Accordingly, the Company is required to deduct tax at source ("TDS") at rates (plus surcharge and cess) as applicable, at the time of making the payment of the dividend, if approved and declared at the ensuing AGM.
Transfer to Reserves
During the year, Board has approved appropriation of H1,000 lakhs to General Reserves. (Previous year H1,000 lakhs).
Dividend Distribution Policy
The Company has adopted a Dividend Distribution Policy in compliance with Regulation 43A of the SEBI Listing Regulations. The Dividend Distribution Policy is also placed on the Companys website and can be accessed at 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.
4. CHANGES IN SHARE CAPITAL
|No. of shares
|Amount in Rupees
|Issued, subscribed and Paid-up Capital as on April 1,2022
|Add: Number of shares allotted during the year FY 2022-23 on account of ESOP Allotment
|Less: Shares bought back via "Tender Offer" Route during the year FY 2022-23
|Issued, subscribed and Paid-up Capital as on March 31, 2023
5. BUYBACK OF EQUITY SHARES
During the FY 2023, your Company completed its maiden and successful buyback via tender offer, maintaining the tradition of returning excess capital to investors, whilst ensuring sufficient capital to fund strategic growth objectives.
During the financial year under review, the Company bought back 14,16,667 fully paid-up equity shares of face value of H2/- each, constituting up to 2.8% of the issued, subscribed and paid-up equity share capital of the Company as on March 31, 2021. The fully paid- up equity shares were bought back from the equity
Shareholder(s)/ beneficial owner(s) of the shares of the Company as on February 21, 2022 (record date), by way of a tender offer for cash at a price of H600/- (Rupees Six Hundred only) per Equity Share for an aggregate amount up to H85,00,00,200/- excluding transaction cost(s), pursuant to the approval of Board of Directors of the Company accorded at their Meeting on February 9, 2022.
The Buyback Size was 9.8% of the aggregate paid-up equity share capital and free reserves (including securities premium account) 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 31, 2021.
The Equity Shares accepted under the Buyback were transferred to the Companys demat account and the unaccepted dematerialised Equity Shares were returned to respective Seller Members / custodians by the Indian Clearing Corporation Limited / BSE. There were six physical shares tendered in the Buyback. Settlement of buyback bids were completed on April 20, 2022. The shares accepted under the buyback were extinguished on April 25, 2022. Post buyback paid-up equity share capital of the Company stood at H9,80,21,212/- consisting of 4,90,10,606 equity shares of the face value of H2/- each.
6. VIGIL MECHANISM & WHISTLE BLOWER POLICY
The Vigil Mechanism as envisaged in the Companies Act, 2013 ("the Act"), the Rules framed thereunder and the SEBI Listing Regulations, is implemented through the Companys Whistle Blower & Vigil Mechanism Policy. The Companys 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 Companys 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 (as appointed under the Whistle Blower & Vigil Mechanism Policy of the Company) 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 & 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/.
7. RESEARCH & DEVELOPMENT
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 R&D Centre of the Company is working hard on technology solutions addressing market needs for futuristic lubricants and assisting Original Equipment Manufacturer ("OEM") businesses. Cost effective product range across the segment are need of the hour given overall market scenario. Keeping this in mind your Company ensured that the product range introduced comes with strong performance claims and review is cost competitive, meeting the required specification for respective segments.
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. The Company is ready with EV fluids such as transmission lubricants, coolants, greases and brake fluids with possible product differentiation attributes for the future EV 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.
8. SUBSIDIARIES/JOINT VENTURE/ ASSOCIATES
The Company has no subsidiary companies within the meaning of Section 2(87) of the Act.
The Company has one associate Company viz. Techperspect Software Private Limited, in which the Company holds 26% stake on a fully diluted basis as on March 31, 2023.
PERFORMANCE AND FINANCIAL POSITION OF THE ASSOCIATE COMPANY INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS
There has been no material change in the nature of business of Associate Company, during the year under review.
Pursuant to Section 136 of the Act, the Financial Statements including Consolidated Financial Statements, along with relevant documents are available on the Companys website www.gulfoilindia. com. The same are also open for inspection at the Registered Office of the Company on all working days (Monday to Friday) between 11.00 a.m. to 6.00 p.m. up to the date of AGM as well as at the venue of AGM during AGM.
A statement containing salient features of performance and financial position of associate Company included in the financial statements is attached as Annexure-I to this report in Form AOC-1.
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 consolidated financial statements, has been placed on the website, https://www.gulfoilindia.com/investors/ financials/annual-reports/.
9. HUMAN RESOURCE DEVELOPMENT
Our culture and people are key enablers to continue creating value for our stakeholders. The objective of Human Resource Development is to meet dynamic business requirements towards building a high performing and caring organisation. The Company drives its all human capital interventions based on the Group guiding principles & Brand values.
The key pillars of the Human Resources Development Programme are as follows:-
Employee Wellness & Safety
The integrated wellness programme for your Company aims at the overall well-being of the employees for last many years. The objective of the programme is to support employees on the various aspects of well-being and create awareness about it. The programme consists of physical well-being, emotional well-being, financial well-being and employee safety.
We provide a safe work environment and promote healthy lifestyles and behaviour. We have implemented safety excellence by identifying the near misses, eliminating serious injury, impact, or fatality events across all our facilities. There are regular awareness programmes conducted about well-being & safety.
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. There are periodic webinars on importance of insurance and investment awareness topics.
Digital Map of Employee experience
We have integrated digitisation in our systems to improve employee experience and efficiency. We have developed an in-house portal called Employee Self Service (ESS) that allows our employees to manage employee onboarding. The GOLD Academy assists in Learning & Development initiatives, Hi Net is a social networking platform used for better employee connect and communication. ASPIRE portal helps in smooth operations of performance management system for the organisation. RMS portal helps in streamlining the recruitment of best talents. There are other digital initiatives such as Smart Service Desk, Digitised Talent Management Process, etc., progressing as planned.
The skill upgradation of the employees is one of the key pillars of Human Resource Development. 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 future. 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 building the skills 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. On the Job Training (OJT) is adopted for the plant environment to upgrade the skills. In addition, Gulf India teams are also participating in Gulf Internationals initiatives, webinars and skill upgradation Programmes like Rising Star Programme (RSP), etc.
We continue focusing on the high growth fast-paced culture & making the organisation more customer centric. The new ways of working & redefined business processes are co-created & implemented keeping in mind employee context and flexibility. The new businesses and step-up changes in the existing business processes drive the transformation agenda across the organisation. Digital transformation is also an important focus area for us.
We have made concentrated efforts in bringing the talent on board & retaining it. The Campus engagement programme helps to strengthen & build the brand as well to attract the best talent for the organisation. The culture of openness, experimenting & performance has provided an edge to attract & retain the right talent within the organisation. The total employee strength has gone up to 592 during the financial year.
We are in the process of institutionalising a structured, well documented Leadership Competency Framework in view of the future long term business needs, functional capabilities which defines key competencies and forms the bedrock for various talent processes.
Succession Planning in the organisation is a continuous process that aligns with the other talent management interventions and endeavours to mitigate critical people risks.
Contract employee engagement
We engage contract employees for supporting our operations for short-term assignments. The duration of such engagements varies depending on the nature of job. We ensured adequate measures for insurance coverage for these employees during the COVID-19 pandemic. We have also ensured complete compliance on processes like internal mandatory trainings (i.e. Information Security, Data Privacy, and Prevention of Sexual Harassment, etc.) as well as background verification. The resignation portal for contract employees has been modified to include asset declaration. Processes like reimbursement and invoicing have been digitalised to provide contract employees with a faster and more seamless experience.
Employees Stock Option Scheme
Employee Stock Options have been recognised as an effective instrument to attract and retain talent and align the interests of the employees with those of the Companys, 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. The grant of share-based benefits to employees is a mechanism to align the interests of the employees with those of the Company and to provide them with an opportunity to share in the growth of the Company.
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 13, 2015. During the FY 2022-23, the Stakeholders Relationship Committee, upon exercise of Options by the employees, allotted 6,480 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 31, 2023, are 9,08,486.
The Company has received a certificate from M/s BS & Company, Company Secretaries LLP, Practising Company Secretaries that GOLIL-ESOP Scheme has been implemented in accordance with SEBI Regulations and the resolution passed by Members through postal ballot. The certificate will be placed at the 15th 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 16, 2015, the details of the ESOP are uploaded on the Companys website https://www.gulfoilindia.com/ investors/investor-information/investor-disclosures/.
During the financial year under review, the Company has not granted any new options under the GOLIL- ESOP Scheme.
10. 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, which also has an external subject matter expert.
During the year under review, one case was reported & settled under the said Act.
11. 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,b Key Managerial Personnel ("KMP") and Senior Management of the Company.
The salient features of the policy are provided in the "Report on Corporate Governance" Annexure-II 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/.
12. CORPORATE SOCIAL RESPONSIBILITY ("CSR") AND RELATED MATTERS
The Company believes in creating social value & has been involved with various social initiatives in the fields of ecology & environment, skill development & education, healthcare, road safety initiatives etc. The CSR policy of the Company sets out our commitment, our objectives & overall approach towards CSR activities.
The Company is instilled with and guided by the values of our Group Founder, Shri. Parmanand Deepchand Hindujas belief that, "My dharma (duty) is to work so that I can give".
Our approach to social responsibility rests on three important pillars:
1. Strategic Projects : The key domains under CSR are identified based on the large scale multiplier effect of social change and sustainable development. Corporate Social Responsibility is the process of helping to build a sustainable organisation along with external initiatives. Therefore, the initiatives taken provides a convergence of business goals and social purpose.
2. Systemic Change: With the specific domains identified, we choose to engage in systemic issues that require deep, meaningful and challenging work. Given the nature of the social change involved, this implies commitment over the long term, typically for multiple years.
3. Collaborative: The project execution process involves the Company, implementation partner & the community. Our emphasis is to have a collaborative approach in implementing all the initiatives under CSR.
The Company has continued its multiyear Programmes under CSR initiatives in the areas of water conservation, Skill development, Road safety, Community welfare and promoting Healthcare in and around its area of operations as detailed below.
These projects are in accordance with Schedule VII of the Act and Companys CSR policy:-
Road to School (RTS) & Road to Livelihood (RTL) Project:
The Company has taken up the Road to School & Road to Livelihood project in Chennai under the guidance of the Hinduja Foundation. The Road to School project covers 24 schools under the programme. The objectives of the programme are:-
a. To implement learning enhancement & remedial and improve foundational literacy & numeracy for grades I to VIII.
b. To create awareness & provide support for community development initiatives through awareness programme on health, hygiene & sanitation.
c. To promote physical well-being through structured sports programme for grades I to VIII.
The Company has also taken up the RTL project in Chennai. The RTL project covers 27 schools under the programme. The objectives of the programme are:-
a. Provide awareness on well being, social & emotional development of the students.
b. Improve the fluency & confidence of communicating in English.
c. Improve the financial literacy & apply tools for decision making.
d. Improve the Information & Communication skills (ICT).
Integrated Rural Development Project (IRDP) :
For FY 2022-23, the Company has participated in the Integrated Rural Development Project under the guidance of the Hinduja Foundation. The project is being implemented at Jawahar (Dist. Palghar, Maharashtra). The project is implemented with BAIF Institute. The objectives of the project include upliftment of the landless families, women empowerment and providing support for overall community development through various initiatives such as - Livelihood interventions, tree based farming, supporting the landless families through various programmes, water resource management, training to community and women empowerment initiatives.
Water Conservation/ Lake Restoration: The Company has taken up the Lake Restoration project in Chennai. There are three projects completed so far - Thamarikulum Lake Restoration Project, Sathan kadu Lake Rejuvenation and Restoration Project & Ariyalur Tank Rejuvenation and Restoration Project with help from Chennai Municipal Corporation.
For all the projects, 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 projects are completed & handed over to the community.
Mobile Medical Unit (MMU): 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 Center.
Kushal Mechanic Programme: The Company has continued its support for vocational training known as "Kushal Mechanic Program" for two-wheeler mechanics who are lacking in formal education and training. The Company conducted 5 batches covering 188 two-wheeler mechanics in FY 2022-23. Cumulatively, this Programme by the Company has trained around 1,475 mechanics The Company also aims to start a similar programme covering tractors & truck mechanics in near future with all India coverage.
Suraksha Bandhan Programme: The Company has extended the medical insurance support to the truck drivers across the country.
During the financial year under review, the Company has spent H558 lacs towards CSR activities as stipulated under Schedule VII of the Act. There is no unspent CSR expenditure as of March 31, 2023.
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 intends 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 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 the FY 2022-23.
Annual Report on CSR
The Companys CSR Policy statement and annual report on the CSR activities undertaken during the financial year ended March 31, 2023, in accordance with Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules") are set out in Annexure-III to this Report.
13. MEETINGS OF THE BOARD AND COMMITTEES OF THE BOARD
During the financial year under review, five (5) Board Meetings were convened and held and the details of the same 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 meet on the day before or on the day of the formal Board meeting, or whenever the need arises for transacting business, as per the charter of the respective Committees.
14. COMMITTEES OF THE BOARD
The Company has five Board Committees as of March 31, 2023:
1) Audit Committee
2) Nomination and Remuneration Committee
3) Stakeholders Relationship Committee
4) Risk Management Committee
5) Corporate Social Responsibility Committee
Details of all the Committees along with their terms of reference, composition and meetings held during the financial year are provided in the Report on Corporate Governance, forming part of this Report.
15. DIRECTORS & KEY MANAGERIAL PERSONNEL
As of March 31, 2023, 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. Sanjay G. Hinduja (DIN: 00291692) Chairman & Non-Executive Director retires by rotation at the ensuing AGM of the Company and being eligible, offers his candidature for re-appointment as a Director.
The Board of Directors at their Meeting held on May 18, 2023 based on the recommendation of Nomination and Remuneration Committee, has proposed the reappointment of Mr. Sanjay G. Hinduja for approval of the Shareholders at the ensuing AGM of the Company.
The Board is of the opinion that Mr. Sanjay G. Hinduja possesses the requisite knowledge, skills, expertise and experience to contribute to the growth of the Company.
Mr. Sanjay G. Hinduja has consented to and is not disqualified from being re-appointed as Director in terms of Section 164 of the Act read with applicable rules made thereunder. He is not debarred from holding the office of Director by virtue of any order issued by SEBI or any other such authority.
Profile and other information of Mr. Sanjay G. Hinduja as required under Regulation 36 of the SEBI Listing Regulations, 2015 and Secretarial Standard-2 are given in the Notice of the 15th AGM of the Company. The above proposal for re-appointment forms part of the Notice of the 15th AGM and the relevant resolution is recommended for approval of the Members of the Company.
The Managing Director & Chief Executive Officer ("MD & CEO") and Independent Directors of the Company are not liable to retire by rotation.
Board of your Company in its meeting held on May 18, 2023, re-appointed Mr. Ravi Shamlal Chawla (DIN: 02808474) as the MD & CEO for a period of further three (3) years w.e.f. June 6, 2023 upto June 5, 2026 based on the recommendation of the Nomination & Remuneration Committee, subject to approval of Members at the ensuing 15th AGM.
Declaration by Independent Directors
Our definition of ‘independence of Directors is derived from Regulation 16(1)(b) of SEBI Listing Regulations and Section 149(6) of the Act. In the opinion of the Board, the Independent Directors fulfil the criteria for independence specified under Section
149(6) of the Act, the Rules made thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations, they 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. In terms of Regulation 25(8) of the SEBI Listing Regulations, they meet the criteria of independence as provided in Section 149(6) of the 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 Directors Database maintained by the Indian Institute of Corporate Affairs (‘IICA) 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, MD & CEO, Mr. Manish Kumar Gangwal, Chief Financial Officer ("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.
16. 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 judgement. 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.
17. 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.
18. 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-IV and forms part of this report.
19. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
The Company is committed to pursuing its business objectives ethically, transparently and with accountability to all its stakeholders. It believes in demonstrating responsible behaviour while adding value to the society and the community, as well as ensuring environmental well-being from a longterm perspective.
SEBI vide its Notification dated December 26, 2019 and consequent amendments carried out to the SEBI Listing Regulations, has made the Business Responsibility and Sustainability Report (BRSR) applicable to the top 1,000 listed entities (by market capitalisation) for reporting on a voluntary basis for FY 2021-22 and on a mandatory basis from FY 202223. The Company is presenting its maiden BRSR to the stakeholders of the Company as part of this Annual Report and it is provided as Annexure-V of this report.
20. 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/
21. CORPORATE GOVERNANCE
Your Company is committed to maintaining the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set out by the 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. JMJA & Associates LLP, Practicing Company Secretaries, vide their certificate dated April 5, 2023, 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.
22. 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.
During the financial year, all recommendations made by the Audit Committee, if any were approved by the Board.
23. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
Details of loans, guarantees and investments outstanding as on March 31, 2023 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 & 49 to the Financial Statements of the Company.
24. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN MARCH 31, 2023 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 FY 2022-23.
25. BUSINESS RISK MANAGEMENT
Risk management is integral to the Companys 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.
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, the Risk Management Committee 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 identified, measured and the appropriate mitigation plans are in place.
We have created a comprehensive, robust, and continuously evolving risk-management policy, considering our industrys dynamics, emerging trends, and best-in-class risk-mitigation measures.
The Risk Management Committee in line with the Risk Management Policy, has implemented an integrated risk management approach, 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. Chief Risk Officers periodically review this risk management framework to keep it updated and address the emerging challenges.
The business risks and their mitigation have been dealt with in the Management Discussion and Analysis Section of this Annual Report.
26. INTERNAL FINANCIAL CONTROLS
The Company has a well defined and adequate internal control system, commensurate with the size, scale and complexity of its operations. The internal financial controls are adequate and are operating effectively to ensure the orderly and efficient conduct of business operations. During the financial year, the Internal Financial Controls ("IFC") testing process was done to review the adequacy and strength of the 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 are 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 Companys 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 its adequacy are mentioned in the Management Discussion and Analysis section, which forms an integral part of the Annual Report.
27. TRANSACTIONS WITH RELATED PARTIES
In line with the requirements of the Act and the SEBI Listing Regulations, the Company has formulated a Policy on dealing with RPT. The RPT Policy is uploaded on the Companys 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 a repetitive nature and/or entered in the ordinary course of business and are at arms length.
A statement on RPTs 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 although no such transactions attracted the provisions of Section 188 of the Act. As such, there are no particulars to be disclosed in the prescribed Form AOC-2.
All transactions with related parties are as per the policy on RPTs 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 arms length basis" and
• not "material"
The details of the RPTs as per Indian Accounting Standards (IND AS) - 24 are set out in Note 46 to the Financial Statements of the Company.
28. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with Section 134(5) of the Act (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 31, 2023, the applicable accounting standards have been followed and there are no material departures from the same;
b) 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 31, 2023 and of the profit of the Company for year ended on that date;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) 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
f) 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").
29. 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 Auditors Report "with an unmodified opinion", given by the Statutory Auditors on the financial statements (both standalone and consolidated) of the Company for the FY 2022-23, 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 FY 2022-23.
The Secretarial Audit Report in Form No. MR-3 given by the Secretarial Auditor of the Company is annexed as Annexure-VI 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.
Annual Secretarial Compliance Report
The Company has obtained an Annual Secretarial Compliance Report for the financial year ended March 31, 2023 from M/s. JMJA & Associates LLP, Practicing Company Secretaries in compliance with Regulation 24A of the SEBI Listing Regulations and the SEBI circular CIR/ CFD/CMD1/27/2019 dated February 8, 2019. The said Report is submitted to the Stock Exchanges within the prescribed statutory timelines and uploaded on the website of the Company at the weblink: https://www.gulfoilindia.com/wp-content/ uploads/2023/05/ASCR.pdf.
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 FY 2023-24 for a remuneration of H4,00,000/- (Rupees Four Lakhs only) plus applicable taxes and reimbursement of out-of-pocket expenses.
The remuneration payable to the Cost Auditor is subject to ratification by the Members at the AGM. 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 FY 2023-24 has been included in the Notice of the forthcoming 15th AGM of the Company. The Directors recommend the same for approval by the Members.
30. 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 Companys processes and internal controls. 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 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.
31. 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-VII to the Boards 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 AGM. Any Member desirous of obtaining a copy of the said annexure may write to the Company Secretary at firstname.lastname@example.org.
32. CEO AND CFO CERTIFICATION
As required under Regulation 17(8) read with Schedule II of the SEBI Listing Regulations, the CEO and CFO certificate was placed before the Board of Directors of the Company at its meeting held on May 18, 2023 and is attached with the annual report as Annexure-VIII.
33. 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 31, 2023, 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 any 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 the amount of the valuation done at time of one-time settlement and the valuation done while taking a 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 Directors 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 Companys growth.
|For and on behalf of the Board of Directors
|Sanjay G. Hinduja
|Date: August 3, 2023