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The Directors take pleasure in presenting their Ninety Fifth Annual Report on the operations of the Company together with audited accounts for the year ended 31st March, 2018.
Amount (Rs. in Crores)
Year ended 31s1 March, 2018
Year ended 31s1 March, 2017
The Accounts before charging depreciation show a profit of
From which has been deducted
Provision for Taxation
Other Comprehensive Income(OCI)
To which is added the balance brought forward from the last accounts of
The Directors have transferred to General Reserve
Leaving a balance of
The Directors have paid Interim Dividend @ 1500% for 2017-18 (p.y. 1000%) on the Ordinary Shares amounting to
The Directors have paid final dividend @ 2000% for 2016-17 (p.y. 1750%) on the Ordinary Shares amounting to
Tax on Dividend
To which is added OCI adjustment and Tax thereon
Leaving a balance to be carried forward
PERFORMANCE AND STATE OF COMPANY’S AFFAIRS
Your Company has completed another year of satisfactory performance by achieving a turnover of Rs. 1291.64 crores (net of discount and rebates Rs. 1112.12 crores), compared to Rs. 1317.29 crores (net of discount and rebates Rs. 1132.02 crores) in the previous year, a decrease of 1.95%. Notwithstanding the sluggishness in the lubricant industry, due to continuing advancement of engine design and presence of long-drain lubes, the volume of sales recorded a satisfactory growth primarily due to continuing focus on the bazaar segment, specially in the premium and emerging product categories. Notwithstanding fierce competition from multinationals and other new entrants in the lube market your Company could forge ahead with drive and initiative to consolidate its position. However, cost of inputs continued to rise during the year which led to greater pressure on the margins.
Despite the above, it is indeed a matter of pride that the Profit before Tax (PBT) was Rs. 146.55 crores in comparison to a PBT of Rs. 151.03 crores in the preceding year.
The brand equity of the Company’s products built up painstakingly over the years has been further strengthened with higher thrust on promotional activities in the face of growing competition. The effort of brand building has helped the Company create a ‘niche’ for its products even in a difficult business environment. Your Company had been able to continue its tie-up with few Original Equipment Manufacturers (OEMs) with a view to reinforce its value proposition.
The Company’s Plants at Silvassa, T urbhe, Oragadam, Ramkristopur and Faridabad are accredited under ISO 9001:2015 for quality standards. The Silvassa and Oragadam Plants had obtained accreditation under ISO 14001:2015 for environmental standards. The support provided by the Company’s accredited R&D Centers have helped in improving the quality of products and upgrading product formulation.
Your Company’s products primarily marketed under the ‘VEEDOL’ brand name are well established and accepted in the industry for their quality and range. The Joint Venture Company (JVC) viz. JX Nippon TWO Lubricants India Private Limited (JXTL), wherein your Company and JXTG Nippon Oil & Energy Corporation (formerly JX Nippon Oil & Energy Corporation), Japan, have 50:50 stake, continues to undertake marketing of the ‘ENEOS’ brand of products in India. The production facilities, warehousing, logistic and other ancillary support continue to be extended by your Company to the JVC. Details of performance of this joint venture are stated in the later part of the report.
With the acquisition of Veedol International Limited, the Company got the global rights to a wide portfolio of registered trademarks for the master brand ‘VEEDOL’ as well as its associate product sub-brands and iconic logos. The Company has exploited this opportunity for marketing lubricants under the ‘VEEDOL’ brand to various geographies around the world.
During 2016-17 your Company has invested in 100% shares of Price Thomas Holdings Limited (PTHL), having a wholly owned subsidiary viz. Granville Oil & Chemicals Limited (GOCL), which is engaged in manufacturing and selling of lubricants and automotive after care products. Since GOCL has its own manufacturing facility, it has resulted in competitive product pricing internationally. Also, the range of products and its sales distribution network have been beneficial for the Company’s international operations. GOCL mainly operates in United Kingdom and key brands marketed inter alia include Granville, Gunk, Nova, Autosol and Turtle Wax.
Other than as stated above and besides holding 100% shares of Veedol International Limited the Company has three wholly owned subsidiaries viz. Veedol International DMCC (VID), Dubai, Veedol Deutschland GmbH (VDG), Germany and Veedol International BV (VIBV), Netherlands to cater to the Middle East Asian Region, DACH Region and rest of Europe, respectively.
During 2017-18, the Company has purchased entire share capital of VDG from VIBV and accordingly VDG has now become a direct wholly owned subsidiary of your Company.
Further Veedol International Americas Inc. has also been floated as a wholly owned subsidiary of Veedol International Limited, UK. This has relaunched Veedol in Andean region of South America.
Veedol International Limited has also licensed the Veedol brand to a licensee in Canada and Mexico and other licensees in Bangladesh, Ecuador, Republic of South Africa and France for sales thereat.
WIND ENERGY BUSINESS
During the year 2017-18, the revenue generated from the Wind Energy Project amounted to Rs. 2.10 crores.
The Company produces enough clean energy to offset its electricity consumption from fossil fuel sources. The sector is poised to provide adequate returns over the years.
In view of present financial results, your Directors have the pleasure in recommending a final Dividend of 2000% (Rs. 100 per ordinary share) on the Ordinary Shares of Rs. 5/- each for the financial year 2017-18 as against 2000% (Rs. 100.00 per ordinary share) for the previous year to the equity shareholders of the Company. The Directors at its 315th Meeting held on 13th November, 2017 declared interim dividend of 1500% (Rs.75.00 per ordinary share) involving a total dividend outflow of Rs. 26.13 crores. The same was distributed to the Shareholders on 28th November, 2017. The final dividend is in addition to the interim dividend, as already distributed.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review, as stipulated under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of the Annual Report as Annexure I.
Your Directors affirm their commitment to good Corporate Governance practices. The report on Corporate Governance as per the requirement of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 together with a certificate from the Statutory Auditors of the Company and declaration by the Managing Director forms part of this report.
On acquisition of 100% shares, Veedol International Limited had become a wholly owned subsidiary of the Company with effect from October, 2011. Further to explore possibilities of marketing the products under ‘Veedol’ brand in the Middle East Asian Markets, your Company had floated another wholly owned subsidiary under the name Veedol International DMCC at Dubai, UAE. With a view to cater to the European Markets (excepting the DACH region), the Company had set up another wholly owned subsidiary viz. Veedol International BV, having its office at Amsterdam, the Netherlands.
As the ‘Veedol’ brand enjoys considerable brand equity in the DACH region, Veedol Deutschland GMBH (VDG) had been initially set up as a 100% subsidiary of Veedol International BV (VIBV). During 2017-18, the Company has acquired 100% shareholding of VDG from VIBV. VDG had initiated its marketing operations for the DACH region and the same operates from Langenfeld, Germany.
Veedol International Americas Inc. has been incorporated as a 100% subsidiary of Veedol International Limited. Veedol International Americas Inc. markets Veedol products in the Andean region of South America. This Company operates from Ontario, Canada.
During 2016-17, your Company has also acquired 100% shares of Price Thomas Holdings Limited (PTHL), having a wholly owned subsidiary viz. Granville Oil & Chemicals Limited, which has its own manufacturing facility and is engaged in manufacturing and selling of lubricants and automotive after care products throughout United Kingdom (UK). GOCL operates from Rotherham, UK.
The Statement of Accounts along with the Report of the Board of Directors and Auditors relating to your Company’s Overseas Subsidiaries viz. Veedol International Limited, Veedol International DMCC, Veedol International BV, Veedol Deutschland GmbH and Price Thomas Holdings Limited for the financial year 2017-18 are not annexed. Shareholders, who wish to have a copy of the full Report and Accounts of the aforesaid subsidiary companies, will be provided the same, on receipt of a written request. These documents will also be available for inspection by any shareholder at the Registered Office of the Company and the concerned subsidiary companies during business hours on all working days till 14th August 2018.
PERFORMANCE OF SUBSIDIARIES AND JOINT VENTURE COMPANIES AS PER RULE 8(4) OF THE COMPANIES (ACCOUNTS) RULES, 2014
A report on the performance and the financial position of each of the Subsidiaries and Joint Venture Companies as per the Companies Act, 2013 is annexed to the Consolidated Financial Statement and hence not repeated here for the sake of brevity.
The policy for determining material subsidiaries, as approved may be referred to at the official website of the Company at the weblink www.tidewaterindia.com/ wp-content/uploads/2017/02/Material-Subsidiary-Policy.pdf.
CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements have been prepared in accordance with the principles and procedures for the preparation and presentation of Consolidated Accounts as set out in the Indian Accounting Standards (IndAS) on Consolidated Financial Statements notified by the Companies (Indian Accounting Standards) Rules, 2015. The Audited Consolidated Financial Statement together with Auditors’ Report forms part of the Annual Report.
The group recorded a Consolidated Profit before Tax of Rs. 159.35 crores for the financial year 2017-18 as compared to Rs. 158.93 crores, as achieved in the preceding year.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to Directors’ Responsibility Statement, it is hereby confirmed that:
i. In the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable accounting standards had been followed along with the proper explanation relating to material departures, if any;
ii. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. The Directors had prepared the annual accounts on a going concern basis;
v. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and operating effectively; and
vi. The Directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Particulars of loan given, investment made and guarantee given alongwith the purpose for which the loan or guarantee is proposed to be utilized by the recipient is provided in the financial statements (Please refer Note 4, 5, 33 and 34 to the Standalone Financial Statement). No loan/advance is outstanding to any subsidiary, associate or any firm/company in which the Directors are interested. This may be regarded as a disclosure as required under Schedule V of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 also.
TRANSFER OF AMOUNTS AND SHARES TO INVESTOR EDUCATION & PROTECTION FUND
Pursuant to the provisions of Section 124 of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017, read with all relevant notifications as issued by the Ministry of Corporate Affairs from time to time all shares in respect of which dividend has remained unpaid or unclaimed for a period of seven years have been transferred by the Company, within the stipulated due date, to the Investor Education and Protection Fund (IEPF).
A list of shareholders alongwith their folio number or DP. ID. & Client ID., who have not claimed their dividends for the last seven consecutive years i.e. 2010-11 to 2016-17 and whose shares are therefore liable for transfer to the IEPF Demat account, has been displayed on the website of the Company at www.tidewaterindia.com/wp-content/uploads/2017/05/ Shareholders-List.pdf besides sending individual communication to the concerned shareholders and issuance of public notice.
The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 26th July, 2017 (date of last AGM) on the Company’s website (www.tidewaterindia.com) and also on the Ministry of Corporate Affairs website.
Thewebsites of your company, www.tidewaterindia.com and www.veedolindia.com carry comprehensive database of information of interest to the stakeholders including the corporate profile, information with regard to products, plants and various depots, financial performance of your Company, corporate policies and others.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business, during the period under review.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
During the year, there were no material changes and commitments, affecting the financial position of the Company which have occurred between 1st April, 2018 and the date of this report.
No fraud has been reported by the Auditors under Section 143(12) of the Companies Act, 2013, during the period under review.
Shri Debasis Jana has been appointed as Additional Director with effect from 13th November, 2017. He will hold office upto the date of the ensuing Annual General Meeting and is eligible for re-appointment. The Company has received notice under Section 160 of the Companies Act, 2013 proposing his appointment as Director.
In accordance with the provisions of Section 152(6)(c) of the Companies Act, 2013 and your Company’s Articles of Association, Shri Vinod S. Vyas, Director retires by rotation and is eligible for re-appointment.
On recommendation of the Nomination and Remuneration Committee, the Board on 13th November, 2017 appointed Shri P.Y. Gurav and Shri P.S. Bhattacharyya as Independent Directors designated as Additional Directors for a period of 3 years with effect from their date of appointment. However, being Additional Directors, they will hold office upto the date of the ensuing Annual General Meeting and are eligible for appointment for specified period(s), on approval of the shareholders.
Appropriate resolutions seeking appointment of Shri Debasis Jana, Shri P.Y. Gurav and Shri P.S. Bhattacharyya as Directors are appearing in the Notice convening the 95th Annual General Meeting of the Company. Brief resume/details relating to Shri Debasis Jana, Shri Vinod S. Vyas, Shri P.Y. Gurav and Shri P.S. Bhattacharyya are furnished in the said notice.
Shri Sunil Munshi has resigned from the Board of Directors of the Company with effect from 1 st September, 2017, in view of envisaged paucity of adequate time, as deemed necessary for effective discharge of his duties as Director of the Company. The resignation of Shri Munshi has been noted by the Board of Directors at its 315th meeting held on 13th November, 2017. The Board of Directors also placed on record the valued guidance received from him during his tenure of directorship in the Company.
Pursuant to Regulation 36(3)(c) of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 it is disclosed that no Directors share any relationship inter-se.
DECLARATIONS BY THE INDEPENDENT DIRECTORS
All Independent Directors have given declarations to the Company stating their independence pursuant to Section 149 of the Companies Act, 2013 and the same have been noted by the Board.
POLICY ON DIRECTORS’ APPOINTMENT & REMUNERATION
Section 178 of the Companies Act, 2013 is applicable to the Company. The Company appoints Independent Directors, being persons having rich experience and domain knowledge, to serve on the Board. Independent Directors are initially appointed by the Board on recommendation of the Nomination & Remuneration Committee. Non-Executive Directors are appointed by the Board from time to time, subject to the approval of the shareholders. Executive Director(s) are appointed based on their performance and their contribution towards the Company. Appointment(s) of all Directors are formalized on approval of the shareholders.
The Company has framed a Remuneration Policy, in relation to remuneration of Directors, Key Managerial Personnel and Senior Management, as recommended by the Nomination & Remuneration Committee of the Board of Directors. The same, inter-alia contains matters stated under Section 178 of the Companies Act, 2013 read with Securities & Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015. The criteria of making payment to Non-Executive Directors are also stated in the aforesaid policy. The details of such policy i.e. summary, weblink, etc. have been furnished in the Corporate Governance Report forming part of this Annual Report.
The Nomination & Remuneration Policy, as framed and enclosed with the Directors’ Report as Annexure II, inter alia includes its objective, applicability, matters relating to the remuneration, perquisites for the Whole-time/ Executive/Managing Director, matters relating to remuneration for Non-Executive/Independent Director(s), Stock Options, matters relating to remuneration for KMP, Senior Management Personnel and Other Employees and interpretation provision. This may be deemed to be disclosure as required under proviso of Section 178(4) of the Companies (Amendment) Act, 2017 relating to salient features of Nomination and Remuneration Policy. The entire policy is available on the Company’s website at the weblink www.tidewaterindia.com/wp-content/uploads/2017/02/ REMUNERATION-POLICY-1 .pdf.
Shri R. N. Ghosal, Managing Director does not receive any remuneration from any other subsidiary company. This may be deemed to be a disclosure as required under Section 197(14) of the Companies Act, 2013.
A statement indicating manner in which annual evaluation of the Board (including Committees) and individual Directors is carried out has been provided separately in this report.
Necessary disclosure as required under Schedule V of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been provided under Corporate Governance Report in relation to remuneration of Shri R. N. Ghosal, Managing Director.
ANNUAL EVALUATION OF BOARD’S PERFORMANCE
In compliance with the Companies Act, 2013 and applicable regulations, the performance evaluation of the Board was carried out during the year under review. The Board Evaluation and Diversity Policy which had been framed by the Company for the purpose of establishing, inter-alia, qualifications, positive attributes, independence of Directors and determination of criteria based on which such evaluation is required to be carried out includes matters stated in guidance notes issued by the Securities & Exchange Board of India (SEBI) vide its Circular No.SEBI/HO/CFD/CMD/CIR/P/2017/ 004 dated 5th January, 2017 thereby modifying the evaluation process.
Separate meeting of Independent Directors was held on 12th February, 2018, wherein the required evaluation was carried out in terms of the modified policy thereof. More details on the same are given in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY
The Company recognizes that its operations impact a wide community of stakeholders, including investors, employees, customers, business associates and local communities and that appropriate attention to the fulfillment of these social responsibilities can enhance overall performance.
The Board of Directors of the Company, in this regard, has devised a Corporate Social Responsibility (CSR) Policy which, inter-alia states mode of constitution of CSR Committee, activities which can be undertaken, mode of implementation, quantum of investment, etc. The same is available on the Company’s website at the weblink www.tidewaterindia.com/wp-content/ uploads/2017/02/CSR-Policy.pdf. The said policy is also enclosed with the Directors’ Report as Annexure III. Imparting of training to mechanics/garage owners for skill development by way of setting up an auto-mechanic school had been identified as a CSR activity being covered under Schedule VII of the Companies Act, 2013.
Further during 2017-18, the Company has donated an ambulance for use in Dibrugarh, Assam towards its CSR initiative. Also during the year the Company has identified a project involving building of sanitation facilities in Dhemaji district of Assam as a part of its CSR activities.
The CSR Committee has been constituted by the Board, which as on 31st March, 2018 comprises of Smt. N. Palchoudhuri, as Chairperson, Shri R. N. Ghosal and Shri S. Das. The Committee met three times during the year on 30th May, 2017, 14th August, 2017 and 12th February, 2018 to monitor CSR activities undertaken, review scope of CSR activities, approval of proposed CSR projects, etc. The Company has set up automechanic schools at Kolkata, Silvassa and Faridabad. Utkarsh continued to provide consultancy service for CSR activities, during the year under review.
The details in relation to CSR reporting as required under Rule 8 of Companies (CSR Policy) Rules, 2014 is enclosed with this report as Annexure IV.
Other relevant details in relation to CSR Committee, such as terms of reference of the CSR Committee, number and dates of meetings held and attendance of the Directors are given separately in the attached Corporate Governance Report.
Fraud-free and corruption-free work culture has been core to the Company. In view of the potential risk of fraud and corruption due to rapid growth and geographical spread of operations, the Company has put even greater emphasis to address this risk.
To meet this objective, a Vigil Mechanism Policy akin to Whistle Blower Policy has been laid down. More details about the policy are given in the Corporate Governance Report.
The Company has identified various risks faced by it from different areas. As required under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has adopted a Risk Management Plan for the Company which includes inter-alia identification of elements of risks which may threaten the existence of the Company. Structures are present so that risks are inherently monitored and controlled.
Relevant details of the Risk Management Plan including implementation thereof and the Risk Management Committee have been furnished under the Corporate Governance Report.
EMPLOYEE BENEFIT SCHEME & TRUST
In terms of the approval of the shareholders dated 2nd March, 2011, your Company implemented Tide Water Oil Co. (India) Ltd. Employee Welfare Scheme for granting/allotting options to the eligible employees of the Company through Tide Water Oil Co. (India) Ltd. Employee Welfare Trust. With the promulgation of Securities & Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SBEB Regulations) the existing scheme and the provisions of the existing Trust had been aligned with that of the provisions contained in the said Regulation. Subsequent to the sanction of the shareholders, the scheme and the trust had been rechristened as Tide Water Oil Company (India) Limited Employee Benefit Scheme and Tide Water Oil Company (India) Limited Employee Benefit Trust respectively.
Pursuant to Rule 12 of Companies (Share Capital and Debentures) Rules, 2014, the required details, for the year 2017-18, are stated as under:
a. Options granted Nil
b. Options vested Not Applicable
c. Options exercised Not Applicable
d. The total number of shares arising as a result of exercise of option Not Applicable
e. Options lapsed Not Applicable
f. The exercise price Not Applicable
g. Variation of terms of options Not Applicable
h. Money realized by exercise of options Not Applicable
i. Total number of options in force Nil
j. Employee wise details of options granted to
i. Key managerial personnel(s) Nil
ii. Any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during the year Nil
iii. Identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant Nil
There has been no material change in the concerned scheme during the year under review. The provisions of aligned scheme are in compliance with the SBEB Regulations. Necessary detail as referred in Regulation 14 of SBEB Regulations read with Circular number CIR/ CFD/POLICY CELL/2/2015 dated 16th June, 2015 as issued by SEBI, is uploaded on the Company’s website at the weblink www.tidewaterindia.com/wp-content/ uploads/2017/03/SEBI-SBEB-Regulation-14-2017-18.pdf
A Certificate from the Auditors of the Company as required under Regulation 13 of SBEB Regulations is enclosed as Annexure V.
FURTHER DISCLOSURES UNDER THE COMPANIES ACT, 2013
i. Extract of the Annual Return
The details forming part of the extract of the Annual Return is enclosed as Annexure VI.
ii. Number of Board Meetings
There were 5 (Five) meetings of the Board of Directors held during the year 2017-18 on 30th May, 2017, 20th July, 2017, 14th August, 2017, 13th November, 2017 and 12th February, 2018. The details of attendance of the Directors in the said Board Meetings have been furnished in the Corporate Governance Report. Details of Committee Meetings held during 2017-18 and attendance thereof by each Director is also furnished in the said Corporate Governance Report.
iii. Changes in Share Capital
There has been no change in the share capital of the Company during the year. Your Company has not issued any ordinary share or share with differential voting rights nor granted stock option nor sweat equity, during the year. As on 31st March, 2018 none of the Directors of the Company hold share or convertible instrument of the Company.
iv. Composition of Audit Committee
The Board has constituted the Audit Committee which comprises of Shri S. Roy Choudhury as the Chairman, Shri S. Sundareshan, Shri P.Y. Gurav and Shri Subir Das. All recommendations of the Audit Committee have been accepted by the Board of Directors.
More details on the Committee are given in the Corporate Governance Report.
v. Related Party Transactions
During the year 2017-18, the Company entered into transactions, cumulative value whereof amounts to Rs. 161.25 crores with Standard Greases & Specialities Pvt. Ltd. (SGSPL), Joint Promoter of the Company which exceeds the threshold limit stated under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and also the threshold limit stated under Rule 15 of the Companies (Meetings of Board & its Powers) Second Amendment Rules, 2015 as further amended by Notification No. GSR 309(E) dated 30th March, 2017 issued by the Ministry of Corporate Affairs. SGSPL is one of the largest grease producers in Asia and they process grease on behalf of the Company to meet the needs of Western Region as there is no grease plant thereat. Further the Company also procures lubricating oil and other chemicals from SGSPL. All these products are offered on competitive rates and the same is in ordinary course of business.
During the year 2017-18, the Company also entered into transactions, cumulative value whereof amounts to Rs. 184.23 crores with JX Nippon TWO Lubricants India Pvt. Ltd. (JXTL), Associate Company which exceeds the threshold limit stated under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and also the threshold limit stated under Rule 15 of the Companies (Meetings of Board & its Powers) Second Amendment Rules, 2015 as further amended by Notification No. GSR 309(E) dated 30th March, 2017 issued by the Ministry of Corporate Affairs. Pursuant to the Joint Venture Agreement, as executed between JXTL, JXTG Nippon Oil & Energy Corporation (formerly JX Nippon Oil & Energy Corporation) and the Company, Tide Water Oil Co. (I) Ltd. pays franchise fees to JXTL, in connection with manufacturing and selling of ‘ENEOS’ range of products. This is on arms length and in ordinary course of business.
The details in Form AOC-2 of material transaction(s) entered into by the Company with its related parties is enclosed as Annexure VII. There were no other materially significant related party transactions with Promoters, Directors or the Management, their Subsidiaries or relatives, etc. during the year that may have potential conflict with the interest of the Company at large. Other than as stated above there were no related party transaction during 2017-18, which were material in nature in terms of provisions of the Companies Act, 2013 and rules made thereunder, requiring disclosure as prescribed under Section 188(2) of the Companies Act, 2013.
All related party transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. While granting omnibus approval, the Company complied with the provisions of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Shareholders’ sanction is also obtained for material related party transactions proposed to be entered into during the year.
The related party transaction policy for determining materiality of related party transaction and also on dealing with related parties is uploaded on the Company’s website at the weblink www.tidewaterindia.com/wp-content/uploads/2017/02/RELATED-PARTY-TRANSACTION-POLICY-1 .pdf. The details of the transactions with related party are provided in the accompanying financial statement. The details of the said policy and other relevant details have also been furnished in the Corporate Governance Report.
DISCLOSURES UNDER RULE 8(5) OF COMPANIES
(ACCOUNTS) RULES, 2014
i. Financial summary or highlights: As detailed under the heading ‘Performance and State of Company’s Affairs’
ii. Change in the nature of business, if any: None
iii. Details of Directors or Key Managerial Personnel (KMP), who were appointed or resigned during the year:
a. Directors appointed : Shri Debasis Jana
Shri P.Y. Gurav
Shri P.S. Bhattacharyya
b. Directors resigned : Shri Sunil Munshi
Shri Praveen P. Kadle
c. Change in KMPs : None
iv. Names of Companies which have become or ceased to be Subsidiaries, Joint Venture Companies or Associate Companies during the year
a. Subsidiaries: During the year your Company has acquired 100% shares of Veedol Deutschland GmbH (VDG). As such VDG is now considered to be a wholly owned subsidiary.
Other than above, there has been no change in the subsidiaries during the year 2017-18.
b. Joint Venture Company (JVC): There has been no change in JVC during the year 2017-18.
c. Associate Companies: There are no Associate Companies other than the JVC viz., JX Nippon TWO Lubricants India Pvt. Ltd., in terms of provisions of the Companies Act, 2013.
v. Details relating to deposits: There were no fixed deposits of the Company from the public outstanding at the end of the financial year.
No fixed deposit has been accepted during the year and as such, there is no default in repayment of the said deposits.
vi. There has not been any deposit, which is not in compliance with the requirements of Chapter V of the Companies Act, 2013.
vii. No significant and material orders have been passed by any regulator(s) or Court(s) or Tribunal(s) impacting the going concern status and Company’s operations in future.
viii. Adequacy of Internal Financial Control: Your Company has an adequate system of internal financial control as commensurate with the size and nature of business, which ensures that all assets are safeguarded and protected against loss and all transactions are recorded and reported correctly.
The internal control system of the Company is monitored and evaluated by internal auditors and their audit reports are periodically reviewed by the Audit Committee of the Board of Directors. The observations and comments of the Audit Committee are placed before the Board for reference.
The scope of Internal Audit includes audit of Purchase Policy, Sales Promotion Expenditure and Incentive Scheme, Debtors and Creditors Policy, Inventory Policy, Taxation matters and others, which are also considered by the Statutory Auditors while conducting audit of the Annual Financial Statements.
DISCLOSURE AS PER RULE 5(1) OF COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) AMENDMENT RULES, 2016
The disclosure as required under Rule 5(1) of Companies (Appointment & Remuneration of Managerial Personnel) Amendment Rules, 2016 is enclosed with this report as Annexure VIII.
Your company has not paid any remuneration attracting the provisions of Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Amendment Rules, 2016. Necessary information as required under the said Rule has been appended to this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
No cases were filed / reported to the Company pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 during the year under review. Prevention of Sexual Harassment Committee(ies) have been formed at the corporate and regional levels to monitor compliance with the provisions of the said Act and complaints thereof, if any.
AUDITOR & AUDITOR’S REPORT
Messrs. Price Waterhouse Chartered Accountants LLP (PW) was appointed as Auditors of the Company at the 94th Annual General Meeting. Since eligible, members are requested to consider their appointment till the conclusion of the Ninety Ninth Annual General Meeting and authorize the Board of Directors to decide on their remuneration.
There are no qualifications made by the statutory auditors in their report.
A statement detailing significant Accounting Policies of the Company is annexed to the Accounts.
A Secretarial Audit was conducted during the year 201718 by the Secretarial Auditor, Shri Manoj Prasad Shaw of Messrs. Manoj Shaw & Co., Practising Company Secretaries, in accordance with the provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditor’s Report is attached as Annexure IX and forms a part of this report of Directors. There are no qualifications made by the Secretarial Auditor in his Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO A. CONSERVATION OF ENERGY
1. Steps taken or impact on conservation of energy.
Energy conservation during the financial year has accrued as a result of the following steps taken at various locations of the Company.
i. Old florescent tubelights were relaced with 36 watts and 18 watts EELED lights, saving power consumption to the extent of 6048 units per year.
ii. 5.5 KW water pump was replaced with 3.5 KW water pump which resulted in decrease of power consumption upto approx. 5000 units per year.
iii. Old EPBAX System was replaced with new EPBAX System which resulted in reduction of power consumption upto 3820 units per year.
i. Old florescent tube lights were replaced with 36 watts electrical fittings thereby reducing power consumption to the extent of 5050 units per year.
ii. Old traditional copper blast choke was replaced with electronic blast saving power consumption upto 1200 units per year.
iii. Modification in the unscrambler belt to feed the bottles directly on the rotating disc resulted in decrease of power consumption upto 900 units per year.
i. New warehouse roof designed and constructed to have solar panels in future.
ii. All tube light fittings in Main Block shop floor were replaced with LED fittings.
iii. Multi Function Meter provided in new electrical panel of each feeder to monitor energy consumption.
iv. Existing air conditioners were replaced with energy efficient air conditioners.
2. Steps taken by the Company for utilising alternate sources of energy.
None in particular
3. Capital investment on energy conservation equipments.
None in particular
B. TECHNOLOGY ABSORPTION
1. Efforts made towards technology absorption
New products are developed by the R&D centers of the Company incorporating latest technology.
2. Benefits derived
The Company is able to produce quality products in view of the above.
3. Information regarding imported technology Not applicable.
4. Expenditure incurred on Research and Development
C. FOREIGN EXCHAGE EARNINGS AND OUTGO
Foreign Exchange earnings during the year under review was Rs. 4.60 crores (last year Rs. 2.41 crores) while Foreign Exchange outgo was Rs. 179.73 crores (last year Rs. 150.15 crores).
The Board of Directors would like to place on record their appreciation of the support and assistance received from the Government of India and the State Government. The Directors are thankful to the Company’s Bankers / Shareholders / all other Stakeholders and the esteemed customers for their continued support.
The Board deeply appreciates the commitment and the invaluable contribution of all the employees towards the satisfactory performance of your Company.
On behalf of the Board
Kolkata Debasis Jana
30th May, 2018 Chairman