DIRECTORS’ REPORT Dear Shareholders, Your Directors take pleasure in presenting their Ninety Second Annual Report on the operations of the Company together with audited accounts for the year ended 31st March, 2015. PERFORMANCE AND STATE OF COMPANY'S AFFAIRS Your Company has completed another year of excellent performance by achieving an impressive turnover of Rs.1207.28 Crores (net of discount and rebates Rs. 1111.28 Crores) as compared to Rs.1154.91 Crores (net of discount and rebates Rs. 1065.90 Crores) in the previous year, an increase of 4.53%. Notwithstanding the slowdown in the economy and continued fierce competition from various players in the industry, the increase in sales could be possible through adoption of aggressive marketing strategies and continued focus on the premium segment. The Profit before Tax at Rs. 243.41 Crores was substantially higher than that recorded in the previous year of Rs.103.76 Crores primarily on account of adjustment of the following exceptional items: i. Rs.107.39 Crores representing profit on transfer of business as Slump Sale to Joint Venture Company (JVC) promoted with JX Nippon Oil & Energy Corporation, Japan (JXNOE); ii. Rs.12.75 Crores representing profit on sale of property at Royapuram, Chennai; iii. Rs. 30.20 Crores representing depreciation written back in view of change of depreciation method. As such, during 2014-15, the Company achieved an operating Profit before Tax of Rs. 93.07 Crores, even though the business relating to 'ENEOS' range of products had been transferred to the newly formed JVC viz. JX Nippon TWO Lubricants India Pvt. Ltd. (JXTL) during the year under review. This profit could be achieved through rationalization of pricing structure, adoption of austerity measures and optimum procurement of raw materials. Nonetheless, the overall lubricant industry sales volume remained stagnant due to use of better quality fuels, advanced engine design, long drain lubes and lower sump capacity. Good brand equity of the Company's products has helped the Company in achieving brand loyalty in niche market segments even in such a competitive market. Brand building effort remained a major focus area during the year which your company addressed by adopting a more customer-oriented approach, executing extensive campaigns on the electronic media and undertaking elaborate field level activities. The 'baazar' segment also remained one of the main focal points during the year and tie-up with the leading Original Equipment Manufacturers (OEMs) also helped in extending the product line of the Company and increase its presence in new markets. The Company's Plants at Silvassa, Turbhe, Oragadam, Faridabad and Ramkristopur continue to be accredited under ISO 9001:2008 quality standards. The Silvassa and Oragadam Plants had obtained accreditation under ISO 14001:2004 for environmental standards. The support provided by the Company's accredited R&D Centers has immensely helped in improving the quality of products and upgrading product formulation. The Company's products primarily marketed under the 'VEEDOL' brand name are well established and accepted in the industry for their quality and range. On 21st July, 2014, the Company signed an agreement with JXNOE to form a JVC viz. JXTL, wherein your Company and JXNOE have 50:50 stake. On and from commencement of operations of JXTL, marketing of the 'ENEOS' brand of products has been undertaken by the new JVC. The production facilities, warehousing, logistic and other ancillary support are extended by your Company to the JVC. Details of performance of this joint venture are stated in the later part of the report. BRAND 'VEEDOL 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 in various geographies around the world. INTERNATIONAL OPERATIONS The Company has floated two wholly owned subsidiaries viz. Veedol International DMCC, Dubai and Veedol International BV, Netherlands to cater to the Middle East Asian Region and Europe, respectively. Veedol Deutschland GmbH has been incorporated as a 100% subsidiary of Veedol International BV to relaunch the brand in Germany, Austria and Switzerland. Further during the year, Veedol International Americas Inc has also been floated as a wholly owned subsidiary of Veedol International Limited, UK. This shall relaunch Veedol in Andean region of South America. Veedol International Limited has also licensed the Veedol brand to a licensee in North America and another licensee in Bangladesh for sales thereat. WIND ENERGY BUSINESS During the year 2014-15, the revenue generated from the Wind Energy Project amounted to Rs.1.60 Crores. The Company produces enough clean energy to offset its electricity consumption from fossil fuel sources. The sector is poised to provide adequate returns and continue to generate cash profits over the years. DIVIDEND In view of improved financial results, your Directors have the pleasure in recommending a final Dividend of 2500% (Rs. 250.00 per ordinary share) on the Ordinary Shares for the financial year 2014-15 as against 2000% (Rs. 200.00 per ordinary share) for the previous year to the equity shareholders of the Company. In view of improved operations, the Directors at its 298th Meeting held on 3rd November 2014 declared interim dividend of 1000% (Rs.100.00 per ordinary share) involving a total dividend outflow of Rs.8.71 Crores. The same was distributed to the Shareholders on 1st December, 2014. 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 Clause 49 of the Listing Agreement with the Stock Exchange(s) in India is presented in a separate section forming part of the Annual Report as Annexure I. CORPORATE GOVERNANCE Your Directors affirm their commitment to good Corporate Governance practices. The report on Corporate Governance as per the requirement of the Listing Agreement with the Stock Exchange(s) together with a certificate from the Statutory Auditors of the Company and declaration by the Managing Director forms part of this report. SUBSIDIARY COMPANIES 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, Netherlands. As the 'Veedol' brand enjoys considerable brand equity in the DACH region, Veedol Deutschland GmbH had been set up as a 100% subsidiary of Veedol International BV. Veedol Deutschland GmbH had initiated its marketing operations for the DACH region and the same operates from Hamburg, Germany. Veedol International Americas Inc. has been incorporated during the year as a 100% subsidiary of Veedol International Limited. Veedol International Americas Inc. will market Veedol products in the Andean region of South America. This Company operates from Ontario, Canada. 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 and Veedol International BV for the financial year 2014-15 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. PERFORMANCE OF SUBSIDIARIES AND JOINT VENTURE COMPANIES AS PER RULE 8(1) 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/ pdf/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 Accounting Standards (AS 21) on Consolidated Financial Statements notified by the Companies' Accounting Standard Rules, 2006, (as amended). 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. 232.12 Crores for the financial year 2014-15 as compared to Rs. 100.22 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, 2015, 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 judgements 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 statement (Please refer Note No. 10, 11, 22.1 and 22.8 to the standalone financial statement). TRANSFER OF AMOUNTS TO INVESTOR EDUCATION & PROTECTION FUND Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from time to time on due dates, to the Investor Education and Protection Fund. Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with Companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 29th August, 2014 (date of last AGM) on the Company's website (www.tidewaterindia.com ), as also on the Ministry of Corporate Affairs' website. CORPORATE WEBSITE The website of your company, www.tidewaterindia.com carries a 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 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 There has been no material change(s) and commitment(s) affecting the financial position of the Company, during the period under review. REPORTABLE FRAUDS No fraud has been reported by the auditors under Section 143(12) of the Companies Act, 2013, during the period under review. DIRECTORS Shri Sunil Munshi has been appointed as Additional Director with effect from 3rd November, 2014. 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 S. Das, Director retires by rotation and is eligible for re-appointment. On recommendation of the Nomination and Remuneration Committee, the Board on 3rd November, 2014 and 7th April, 2015 appointed Shri S. Sundareshan and Ms. Nayantara Palchoudhuri, respectively as Independent Directors designated as Additional Directors for a period of 3 years with effect from their respective 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. The Company has received notices under Section 160 of the Companies Act, 2013 proposing their appointment as Directors. Appropriate resolutions seeking appointment of Shri S.Sundareshan, Shri Sunil Munshi and Ms Nayantara Palchoudhuri as Directors are appearing in the Notice convening the 92nd Annual General Meeting of the Company. Brief resume / details relating to Shri S. Das, Shri S.Sundareshan, Shri Sunil Munshi and Ms. Nayantara Palchoudhuri are furnished in the said notice. Shri S. Swaminathan resigned from the Board of Directors of the Company with effect from 3rd November, 2014 in view of envisaged paucity of adequate time as deemed necessary for effective discharge of his duties as a Director of the Company. The same has been noted by the Board at its 298th meeting held on 3rd November, 2014. The Board of Directors also placed on record the valued guidance received from him during his tenure of directorship in the Company. Pursuant to Clause 49 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 as and when such Directors were appointed. 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 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, Senior Management and other employees, 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 Clause 49 of the Listing Agreement, as revised. The details of such policy i.e. summary, web link, etc. have been furnished in the Corporate Governance Report forming part of this Annual Report. The Remuneration Policy, as framed, is enclosed with the Directors' Report as Annexure II. 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 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 Clause 49 of the Listing Agreement, the performance evaluation of the Board was carried out during the year under review. The Board Evaluation and Diversity Policy has been framed by the Company for this purpose establishing, inter-alia, qualifications, positive attributes, independence of Directors and determination of criteria based on which such evaluation is required to be carried out. Separate meetings of Independent Directors were held on 4th February, 2015 and 7th April, 2015 wherein the said policy was approved and required evaluation was carried out in terms 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/pdf/CSR-Policy.pdf <http://www.tidewaterindia.com/pdf/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. The CSR Committee has also been constituted by the Board, which as on 31st March, 2015 comprises of Shri A. Mukherjee, as Chairman, Shri R. N. Ghosal and Shri S. Das. The Committee met twice during the year on 4th April, 2014 and 27th May, 2014 to finalize the CSR Policy, identify CSR activities, etc. During the year the Company has appointed an organization viz. Utkarsh for setting up the school, referred above. 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. VIGIL MECHANISM 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. RISK MANAGEMENT The Company has identified various risks faced by it from different areas. As required under Clause 49 of the Standard Listing Agreement with the Stock Exchange(s), 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. FIRE AT AHMEDABAD DEPOT On 9th April, 2015 a fire occurred at the third party consignment depot of the Company at Ahmedabad, Gujarat. Stock of lubricants worth Rs. 1.35 Crores, approximately had been damaged. The entire stock was covered by insurance and process of claim recovery is underway. To restore normalcy of operations, the Company initiated steps for making interim supply of goods from other depots in Gujarat. Other than above, there were no other material changes and commitments, affecting the financial positions of the Company which have occurred between 1st April, 2015 and the date of this report. EMPLOYEE WELFARE 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 Benefit) Regulations, 2014, the Board of Directors of the Company vide their resolution dated 7th April, 2015, proposed to align the existing scheme and the provisions of the existing Trust, with that of the said Regulation. As the amended scheme will come into effect on and from the date of approval by the shareholders, to be obtained later, no disclosure is made in this report and in accompanying financial statements, which are specifically, required for Employee Stock Option Schemes, framed under Guidelines / Regulations as promulgated by Securities Exchange Board of India, in this regard. FURTHER DISCLOSURES UNDER THE COMPANIES ACT, 2013 i. Extract of the Annual Return The extract of the Annual Return is enclosed as Annexure - V. ii. Number of Board Meetings There were 5 (Five) meetings of the Board of Directors held during the year 2014-15 on 4th April, 2014, 27th May, 2014, 11th August, 2014, 3rd November, 2014 and 4th February, 2015. 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 2014-15 and attendance thereof by each Director is also furnished in the said Corporate Governance Report. iii. Changes in Share Capital The paid up equity share capital as on 31st March, 2015 was Rs. 0.87 Crores divided into 8,71,200 ordinary shares of Rs. 10/- each, fully paid up. During the year the Company has not issued any ordinary shares nor shares with differential voting rights nor granted stock options nor sweat equity. As on 31st March, 2015 none of the Directors of the Company hold shares or convertible instruments of the Company. iv. Composition of Audit Committee The Board has constituted the Audit Committee which comprises of Shri A. Mukherjee as the Chairman, Shri S. Sundareshan, Shri S. Roy Choudhury, Shri R. K. Singh and Shri S. 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 2014-15, the Company entered into transactions, cumulative value whereof amounts to Rs. 101.58 Crores with Standard Greases and Specialities Private Limited which exceeds the threshold limit stated under Clause 49 of the revised Listing Agreement. However, the same is within the threshold limit as stated under Rule 15 of the Companies (Meetings of Board & its Powers) Rules, 2014. 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. As such, all related party transactions are entered on arm's length basis, in ordinary course of business and in compliance with the applicable provisions of the Companies Act, 2013 read with relevant provisions of the revised Listing Agreement. As there were no related party transactions during 2014-15, which were material in nature in terms of provisions of the Companies Act, 2013 and rules made thereunder, no disclosure is provided as required 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 Clause 49 of the revised Listing Agreement with the Stock Exchange(s). Shareholders' sanction is also obtained for material related party transaction 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/pdf/RELATED-PARTY- <http://www.tidewaterindia.com/pdf/RELATED-PARTY->TRANSACTION-POLICY.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. Director(s) appointed : Shri S. Sundareshan Shri S. Roy Choudhury Shri Sunil Munshi Ms. N. Palchoudhuri b. Director(s) resigned : Shri S. Swaminathan 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 : Veedol International Americas Inc. (VIA) has been floated as a step-down subsidiary of the Company. All shares of VIA are held by Veedol International Limited, UK. Other than above, there has been no change in the subsidiaries during the year 2014-15. b. Joint Venture Company (JVC) : JX Nippon TWO Lubricants India Pvt. Ltd. (JXTL) has been incorporated on 8th August, 2014. 50% of the shares of JXTL are held by Tide Water Oil Co. (India) Ltd. Other than this, there has been no change in JVC during the year 2014-15. c. Associate Companies: There are no Associate Companies, in terms of the 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 control procedure 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, VAT and Cenvat 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) RULES, 2014 The disclosure as required under Rule 5(1) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is enclosed with this report as Annexure VI. Your company has not paid any remuneration attracting the provisions of Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014. Hence, no information is required to be appended to this report, in this regard. AUDITOR & AUDITOR'S REPORT M/s. Ray & Ray, Chartered Accountants, retire as Auditors of your Company at the conclusion of the 92nd Annual General Meeting and being eligible, offer themselves for re-appointment. Members are requested to consider their re-appointment for financial year ending 31st March, 2016 and authorize the Board of Directors to decide on their remuneration. The Auditors vide their report dated 30th May, 2015 have qualified with regard to diminution, if any, in the value of quoted investment of Rs.0.41 Crores, held by the Company in Webfil Limited. Your Board of Directors do not consider this diminution as permanent, hence the same has not been provided for in the accounts for the year 2014-15. A statement detailing significant Accounting Policies of the Company is annexed to the Accounts. SECRETARIAL AUDIT A Secretarial Audit was conducted during the year 201415 by the Secretarial Auditor, Shri Manoj Prasad Shaw of M/s. Manoj Prasad 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 VII and forms a part of this report of Directors. There are no qualifications made by the Secretarial Auditor in his Report. However, in terms of the said report it has been observed that the Company has not appointed 'Woman Director' pursuant to Section 149(1) of the Companies Act, 2013 and Clause 49(II)(A)(1) of the Listing Agreement, during the year. Your Directors state that, the Company took all reasonable steps, as deemed necessary, for effecting the said appointment before expiry of the prescribed time. However, in view of involvement of procedural intricacies, the concerned appointment could be formalized only on 7th April, 2015. 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. Silvassa i) Old traditional copper blast chokes were replaced with electronic blast chokes which resulted in reduction of power consumption upto 900 units per year. ii) Traditional fluorescent 72 watt and 36 watt tube lights in office area were replaced with 36 watt and 18 watt EELED lights, respectively saving electric consumption to the extent of 5508 units per year. Turbhe Modification made in the unscrambler belt to feed bottles directly on rotating disc resulted in decrease of power consumption upto 900 units per year. Oragadam i) VFD was installed for Filling Machine-FM-103 Conveyor motor to control the speed drive, according to requirement, leading to energy saving. ii) Four new Air-Conditioner were procured with 4-star rating for energy saving 4. iii) One old street light was replaced with LED Light, for energy saving. 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 Modification made in the unscrambler belt to feed bottles directly on rotating disc resulted in decrease of power consumption upto 900 units per year. B. TECHNOLOGY ABSORPTION 1. Efforts made towards technology absorption The Company had a technical collaboration agreement with JX Nippon Oil & Energy Corporation (formerly Nippon Oil Corporation), Japan, for manufacturing hi - tech lubricants. The product formulations received from collaborator have been utilized for manufacture of such products during part of the year. After formation of the Joint Venture Company (JVC) viz. JX Nippon TWO Lubricants India Private Limited (JXTL), the technical collaboration has ceased to have effect. Now product formulations are provided by JXTL to your Company, which is utilized to manufacture products for the JVC. 2. Benefits derived With the absorption and adoption of above technical know - how, the Company has been able to produce quality products in India, specially for the Japanese OEM Segment. Information regarding imported technology i. Technology imported for part of the year from JX Nippon Oil & Energy Corporation (formerly Nippon Oil Corporation), Japan for manufacture of hi-tech lubricants. ii. Year of import: 1993 - 94 (agreement renewed last in 2013-14 for 1 year) iii. Technology has been partially absorbed. iv. Reasons for partial absorption: Manufacturing process followed does not require full absorption of imported technology. 4. Expenditure incurred on Research and Development a. Capital Rs. 0.56 Crores (last year Rs. 0.14 Crores) b. Recurring Rs.1.36 Crores (last year Rs. 1.28 Crores) c. Total Rs. 1.92 Crores (last year Rs. 1.42 Crores) d. Total R&D Expenditure as percentage of total turnover :0.16% (last year 0.12 %) C. FOREIGN EXCHAGE EARNINGS AND OUTGO Foreign Exchange earnings during the year under review was Rs.1.01 Crores (last year Rs. 0.53 Crores) while Foreign Exchange outgo was Rs. 199.65 Crores (last year Rs. 176.34 Crores). ACKNOWLEDGEMENT 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 Kallol Datta Chairman Kolkata 30th May, 2015 |