The Directors have immense pleasure in submitting the 26th Annual
Report of the Company together with the audited annual accounts showing
the financial position of the Company for the year ended 31st March,
2015. Consolidated results include the results of (a) Petroleum
Specialities Pte. Ltd., Singapore (PSPL), a Wholly-Owned Subsidiary of
the Company (WOS) (b) Apar Lubricants Limited, a WOS (c) Quantum Apar
Speciality Oils Pty. Ltd., Subsidiary of PSPL and (d) Petroleum
Specilities FZE, Sharjah, a WOS of PSPL.
1. Financial results
(Rs in crore)
Sales turnover 5,010.97 4,481.90
(after deduction of excise duty )
Other income 8.37 4.47
Profit for the year before finance cost,
depreciation / amortisation, tax expenses
and 249.62 279.90
- Depreciation / amortisation 31.04 26.89
Finance Costs 150.09 145.81
Profit before adjustment of exceptional
items, transfer to capital assets, 68.49 107.20
taxation and minority interest
Exceptional items 0.25 0.86
Transfer to Capital Assets 0.01 3.51
Profit before taxation for the year 68.23 102.83
- Tax expenses 20.37 34.04
Net profit for the year after taxation and
before minority interest 47.86 68.79
- Minority Interest (profit)/loss .. ..
Net profit after taxation and above
adjustments 47.86 68.79
Add: Profit brought forward from previous
year 183.71 158.55
Amount available for appropriations 231.57 227.34
Appropriation made by the Board of
- Transitional provisions for depreciation
net of deferred tax - 2.84
- General reserve 5.00 20.00
- Tax on Dividend paid by Subsidiary company
Dividends on Equity shares:
- Proposed dividend at Rs. 3.50 (35.00%) per
share (previous year Rs.5.25 (52.50%) 13.47 20.20
- Income tax on dividends 1.42 3.43
- Leaving balance of profit carried to
balance sheet 208.84 183.71
Earnings per equity share (EPS)
- Basic & Diluted before & after
extraordinary items 12.44 17.88
(after deduction of excise duty 5,121.86 4,631.63
Other income 1.75 4.47
Profit for the year before
finance cost, depreciation /
amortisation, tax expenses
and exceptional items 253.79 305.40
-Depreciation / amortisation 31.21 27.02
Finance Costs 149.85 145.48
Profit before adjustment of 72.73 132.90
exceptional items, transfer to
capital assets, taxation
and minority interest
Exceptional item s 0.25 0.86
Transfer to Capital Asset 0.01 3.51
Profit before taxation for the year 72.47 128.53
-Tax expenses 23.06 38.62
Net profit for the year after taxation
and before minority interest
Adjustment of: 49.41 89.91
-Minority Interest (profit)/loss 0.1 -0.26
Net profit after taxation and above 49.51 89.65
Add: Profit brought forward from previous 272.72 227.70
Amount available for appropriations 322.23 317.35
Appropriation made by the Board of
-Transitional provisions for depreciation 2.83 -
net of deferred tax
-General reserve 5.00 21.00
-Tax on Dividend paid by Subsidiary 0.11 -
Dividends on Equity shares :
-Proposed dividend at Rs. 3.50
(35.00%) per share (previous
year Rs. 5.25 (52.50%) 13.47 20.20
-Income tax on dividends 1.42 3.43
-Leaving balance of profit
carried to balance sheet
Earnings per equity share (EPS) 299.40 272.72
-Basic & Diluted before & after 12.87 23.30
Despite unforeseen circumstances in terms of sudden reduction in base
oil prices as explained in the following paras, the Board of Directors
have maintained its policy on dividend payout ratio of 25 to 30% and
recommended the dividend for FY 2014-15 on the capital of 38,496,769
Equity Shares of the face value of Rs. 10/- each fully paid @ Rs. 3.50
(35 %) per share [(previous year Rs. 5.25 (52.50 %) per share.)]
This dividend amounting to Rs. 14.89 Crores (including dividend tax) is
payable after declaration by shareholders at the ensuing Annual General
Meeting (AGM) and you are requested to declare the same.
3. Share Capital:
During the year under review, the Company has issued and allotted
26,072 Equity Shares of Rs. 10/- each at the premium of Rs.197.05 per
share to the Employees of the Company under Apar Industries Limited
Stock Option Plan - 2007 at an exercise price of Rs. 207.05 per share.
Thereafter, on 14th May, 2015, the Company has further issued and
allotted 266 Equity shares to the Employees under the said Plan.
Consequently, the Issued, Subscribed and Paid-up Equity Share Capital
of the Company have increased to Rs. 38.50 Crores divided into
38,496,769 Equity Shares of Rs. 10/- each.
4. Amalgamation of Apar Lubricants Limited with the Company :
The Company''s Wholly-owned Subsidiary, Apar Lubricants Limited (ALL)
(formerly Apar ChemateK Lubricants Limited) is in the business of
distribution and marketing of ENI brand, and its erstwhile AGIP
brand auto lubricants, manufactured by the Company. In order to combine
the said business with the existing Oil business of the Company, the
Board of Directors of the Company have decided to amalgamate the said
Wholly-Owned Subsidiary (WOS), ALL with the Company with effect from
the Appointed Date of 1st January, 2015 subject to the approval of the
Hon''ble High Court of Gujarat and other regulatory authorities. The
Company has made necessary application to both NSE (designated Stock
Exchange) and BSE under Clause 24(f) of the Listing Agreement for
approval of the Scheme of Amalgamation.
6. Directors and Key Managerial Personnel :
Mr. Kushal N. Desai, Director shall retire by rotation at the ensuing
annual general meeting of the Company and he, being eligible, offers
himself for re-appointment.
At the Annual General Meeting held on 1st August, 2014, the
shareholders of the Company-
a. re-appointed the existing Independent Directors, Dr.
N. K. Thingalaya and Mr. F. B. Virani as Independent
Directors of the Company under the Companies Act, 2013 each to hold
office for five consecutive years upto the conclusion of 30th Annual
General Meeting of the Company in the calendar year 2019.
b. appointed Mr. Suyash Saraogi and Mrs. Nina Kapasi as Independent
Directors under the Act for a period of five consecutive years upto the
conclusion of 30th Annual General Meeting of the Company in the
calendar year 2019.
All Independent Directors have given declarations that they meet the
criteria of independence as laid down under Section 149(6) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement.
The Board of Directors had on the recommendation of Nomination and
Compensation-cum-Remuneration Committee re-appointed -
a. Mr. Kushal N. Desai as Managing Director and Chief Executive Officer
of the Company for a further period of three years from 1st January,
2015 to 31st December, 2017.
b. Mr. Chaitanya N. Desai as Managing Director of the Company for a
further period of three years i.e. from 1st January, 2015 to 31st
January, 2015 as Joint Managing Director and from 1st February, 2015 to
31st December, 2017 as Managing Director.
Details of the proposal for re-appointment of Mr. Kushal N. Desai and
Mr. Chaitanya N. Desai are mentioned in the Explanatory Statement under
Section 102 of the Companies Act, 2013 and Statement pursuant to Clause
49 of the Listing Agreement with the Stock Exchanges as annexed to the
Notice of the 26th Annual General Meeting.
The Board recommends re-appointments / appointments of all the above
Pursuant to the provisions of Section 203 of the Companies Act 2013,
appointments of Mr. Kushal N. Desai, Managing Director and Chief
Executive Officer, Mr. V.C. Diwadkar, Chief Financial Officer and Mr.
Sanjaya Kunder, Company Secretary as Key Managerial Personnel (KMPs) of
the Company were formalized.
Board Evaluation :
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an annual performance
evaluation of its own performance, the directors individually as well
as the evaluation of the working of its Audit Committee, Nomination and
Compensation-cum-Remuneration Committee, Corporate Social
Responsibility (CSR) Committee and Share Transfer and Shareholders
Grievance-cum-Stakeholders Relationship Committee. The manner in which
the evaluation has been carried out has been explained in the Corporate
Remuneration Policy :
The Board has, on the recommendation of Nomination and
Compensation-cum-Remuneration Committee framed a policy for selection
and appointment of Directors, Senior Management and their remuneration.
The Remuneration Policy is stated in the Corporate Governance Report.
A calendar of Meetings is prepared and circulated in advance to the
During the year, four Board Meetings and four Audit Committee Meetings
were convened and held, the details of which are given in the Corporate
Governance Report. The intervening gap between the Meetings was within
the period prescribed under the Companies Act, 2013.
7. Deposits :
In view of the new Companies Act, 2013, the Company has decided not to
accept any further deposits and repaid all the deposits prematurely.
There were no outstanding deposits and no amount remaining unclaimed
with the Company as on 31st March, 2015.
8. Particulars of Loans, Guarantees or Investments :
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the
notes to the Financial Statements.
9. Directors'' Responsibility Statement :
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make the
following statements in terms of Section 134(3)(c) of the Companies
i. that in the preparation of the annual accounts for the financial
year ended March 31, 2015, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any.
ii. that such accounting policies as mentioned in Note 1 of the Notes
to the Financial Statements have been selected and applied consistently
and judgments and estimates have been made that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at 31st March, 2015 and of the profit of the Company for
the financial year ended on that date.
iii. that proper and sufficient care has been taken 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.
iv. The annual accounts have been prepared on a going concern basis.
v. that proper internal financial controls were in place and that the
financial controls were adequate and were operating effectively.
vi. that systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating
10. Related Party Transactions :
All related party transactions that were entered into during the
financial year were on an arm''s length basis and were in the ordinary
course of business. There are no materially significant related party
transactions made by the Company
with Promoters, Directors, Key Managerial Personnel or other designated
persons which may have a potential conflict with the interest of the
Company at large.
All Related Party Transactions are placed before the Audit Committee as
also the Board for approval. Prior omnibus approval of the Audit
Committee is obtained on a quarterly basis for the transactions which
are of a foreseen and repetitive nature. A statement giving details of
all related party transactions is placed before the Audit Committee and
the Board of Directors for their approval on a quarterly basis.
The policy on Related Party Transactions as approved by the Board is
uploaded on the Company''s website.
None of the Directors has any pecuniary relationships or transactions
vis-a-vis the Company.
11. Auditors :
In terms of Section 139 of the Companies Act, 2013, the first term of
appointment of M/s. Sharp & Tannan, the Statutory Auditors of the
Company shall expire on the conclusion of ensuing 26th AGM. In terms of
the said Section read with The Companies (Audit and Auditors] Rules,
2014, they can be appointed for another term of 5 years subject to
ratification by the Members at every Annual General Meeting.
M/s. Sharp & Tannan, have confirmed their eligibility under Section 141
of the Companies Act, 2013 and the Rules framed thereunder for
re-appointment as Auditors of the Company.
The Audit Committee at its meeting held on 14th May, 2015 has
recommended their appointment as Statutory Auditors of the Company for
the 2nd term of 5 years to end on conclusion of 31st Annual General
Meeting to be held in the year 2020. You are requested to approve their
Cost Auditors :
Pursuant to Section 148 of the Companies Act, 2013, read with The
Companies (Cost Records and Audit] Amendment Rules, 2014, the cost
audit records maintained by the Company in respect of Conductors, Oils
and Cables Divisions of the Company are required to be audited by a
Cost Accountant. Your Directors, on the recommendation of the Audit
Committee, appointed Mr. T.M.Rathi to audit the cost accounts of the
Company for the financial year 2015 on a remuneration of Rs.
1,20,000/-. A Resolution seeking members'' ratification for the
appointment and remuneration payable to Mr. T. M. Rathi, Cost Auditor
is included at Item No. 7 of the Notice convening the Annual General
Secretarial Auditors :
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and The Companies (Appointment and Remuneration of Managerial
Personnel] Rules, 2014, the Company has appointed Mr. Hemang M. Mehta
of H. M. Mehta & Associates, Company Secretary in Practice to undertake
the Secretarial Audit of the Company. The Secretarial Audit Report is
annexed herewith as Annexure I.
12. Other Information : a. Green Initiative
To support the Green Initiative taken by the Ministry of Corporate
Affairs (MCA], to contribute towards
a greener environment, the Company has already initiated / implemented
the same from the year 2010- 11. As permitted by Circular Nos. 17/2011
dated April 21, 2011 and 18/2011 dated April 29, 2011 issued by the
MCA, delivery of notices / documents and annual reports etc. are being
sent to the shareholders by electronic mode wherever possible.
Further, the Company has started using recyclable steel drums in place
of wooden pallets in its Conductors Divisions in order to protect the
environment and reduce costs for the Company.
b. Corporate Social Responsibility (CSR)
The Board of Directors constituted a Corporate Social Responsibility
(CSR] Committee in terms of the provisions of Section 135(1] of the
Companies Act, 2013 on 30th May, 2014. This CSR Committee reviews and
restates the Company''s CSR policy in order to make it more
comprehensive and aligned with the activities specified in Schedule VII
of the Companies Act, 2013.
With the strong belief in the principle of Trusteeship, Apar Group
continues to serve the community through a focus on healthcare,
education, Food and mid-day meal for children, Environmental
sustainability and Health and Welfare of Senior Citizens initiatives.
The Annual Report on CSR activities is annexed herewith as Annexure
c. Attached to and forming part of this report are the following inter
i] Particulars relating to Employee Stock Option Scheme
- Annexure - III
ii] Particulars of Information as per Section 197 of the
Companies Act, 2013 read with Rule 5 of the Companies (Appointment and
Remuneration of Managerial
Personnel] Rules, 2014 - a Statement showing the names and other
particulars of the Employees drawing remuneration in excess of the
limits set in the Rules
- Annexure - IV (a) and Disclosures pertaining to
remuneration and other details as required under Section 197(12] of the
Act read with Rule 5(1] of the Companies (Appointment and Remuneration
Personnel] Rules, 2014 - Annexure - IV(b).
iii] Particulars relating to conservation of energy, technology
absorption, research & development and foreign exchange earnings and
outgo - Annexure - V.
iv] Report on Corporate Governance and auditors'' certificate regarding
compliance of conditions of corporate governance.
v] Statement containing brief financial details of the subsidiaries.
d. Extract of Annual Return :
The details forming part of the extract of the Annual Return in Form
MGT-9 is annexed herewith as Annexure - VI.
e. The Company has not attached the Balance Sheet, Profit & Loss
Accounts and other documents of its
wholly-owned foreign subsidiaries viz. Petroleum Specialities Pte.
Ltd., Singapore as well as its subsidiaries, Quantum Apar Speciality
Oils Pty. Ltd., Australia and Petroleum Specialities FZE, Sharjah, WOS
of PSPL and Apar Lubricants Limited, a WOS of the Company. As per the
provisions of Section 129(3) read with Section 136 of the Companies
Act, 2013, a statement containing brief financial details of the said
subsidiaries for the year ended March 31, 2015 are included in the
annual report and shall form part of this report. The annual accounts
of the said subsidiaries and the related information will be made
available to any member of the Company seeking such information at any
point of time and are also available for inspection by any member of
the Company at the registered office of the Company.
13. General :
No disclosure or reporting is required in respect of the following
items as there were no transactions on these items during the year
1. Issue of equity shares with differential rights as to dividend,
voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of the
Company under any scheme save and except ESOP referred to in this
3. No Managing Director of the Company receive any remuneration or
commission from any of its subsidiaries.
4. No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company''s
operations in future.
There were no cases filed pursuant to the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
14. Acknowledgement :
Your Directors wish to place on record their sincere appreciation for
continuous cooperation, support and assistance provided by
stakeholders, financial institutions, banks, government bodies,
technical collaborators, customers, dealers and suppliers of the
Company. Your Directors also wish to place on record their appreciation
for the dedicated services rendered by the loyal employees of the