Tide Water Oil Co (I) Ltd.
|BSE: 590005||Sector: Industrials|
|NSE: TIDEWATER||ISIN Code: INE484C01022|
|BSE 00:00 | 15 Jun||12166.25||
|NSE 00:00 | 15 Jun||12124.90||
|Mkt Cap.(Rs cr)||4,234|
|Mkt Cap.(Rs cr)||4233.86|
Tide Water Oil Co (I) Ltd. (TIDEWATER) - Director Report
Company director report
Your Directors take pleasure in presenting their Ninety Seventh Annual Report on theoperations of the Company together with audited accounts for the year ended 31s'March 2020.
Amount (Rs. in Crores)
PERFORMANCE AND STATE OF COMPANY'S AFFAIRS
Your Company has completed another successful year of operation by achieving a turnoverof Rs. 1322.74 crores (net of discount and rebates Rs. 1127.28 crores) compared to Rs.1383.62 crores (net of discount and rebates Rs. 1193.34 crores) in the previous year adecrease of 4.40%. This performance is even more satisfying as it has been achieveddespite difficult market conditions arising out of slowdown in the economy particularlyduring the end of the financial year owing to the outbreak of the pandemic. In spite ofsevere headwinds from various quarters the Company achieved a Profit before Tax (PBT) ofRs. 142.63 crores as compared to Rs. 146.96 crores in the preceding year. The profitachieved was primarily on account of rationalization of the pricing structure adoption ofausterity measures and optimum procurement of raw materials.
The Consolidated turnover (net of discount and rebates) was Rs. 1316.57 crores ascompared to Rs. 1377.00 crores for previous year. The Consolidated Profit before Tax washigher at Rs. 160.44 crores as compared to Rs. 151.63 crores for the preceding year.
The brand equity of the Company's products in the industry has withstood the test oftime and is expected to aid the Company in performing better in the coming years. Theefforts of brand building primarily through promotional activities targeted at mechanicsand fieet owners have helped the Company to create a 'niche' for its products even in aturbulent business environment. Further continued focus on the premium segment andefficient procurement strategies have also helped the Company to post such results.
Your Company continued to pursue its campaigns in electronic media for both DieselEngine Oil and Petrol Engine Oil segments. The 'bazaar' segment also remained one of themain focal points during the year. Further realignment of the distribution networkefforts in maintaining direct contacts with the customers and various strategic allianceswith the leading Original Equipment Manufacturers (OEMs) have helped your Company toachieve these results and increase its presence in new markets.
The Company's Plants at Silvassa Turbhe Oragadam Ramkristopur and Faridabad areaccredited under ISO 9001:2015 for quality standards. The Turbhe Silvassa and OragadamPlants had obtained accreditation under ISO 14001:2015 for environmental standards. TheSilvassa Plant has also obtained OHSAS 18001:2007 accreditation for occupational healthand safety standards. The activities carried out by the Company's accredited R&DCenters have been successful in upgrading product formulation by way of absorption oflatest technology prevailing in the industry.
Your Company's products primarily marketed under the 'VEEDOL' brand name are wellestablished and accepted in the industry for their quality and range. The Joint VentureCompany (JVC) viz. JX Nippon TWO Lubricants India Private Limited (JXTL) wherein yourCompany and JXTG Nippon Oil & Energy Corporation (formerly JX Nippon Oil & EnergyCorporation) Japan have 50:50 stake continues to undertake marketing of the 'ENEOS'brand of products in India. The production facilities warehousing logistic and otherancillary support continue to be extended by your Company to the JVC. Details ofperformance 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 rightsto a wide portfolio of registered trademarks for the master brand 'VEEDOL' as well as itsassociate product sub-brands and iconic logos. The Company has exploited this opportunityfor marketing lubricants under the 'VEEDOL' brand in various geographies around the world.
Your Company had invested in 100% shares of Veedol UK Limited (formerly Price ThomasHoldings Limited) having a wholly owned subsidiary viz. Granville Oil & ChemicalsLimited (GOCL) which is engaged in manufacturing and selling of lubricants and automotiveafter care products. Since GOCL has its own manufacturing facility it has resulted incompetitive product pricing internationally. Also the range of products and its salesdistribution network have been beneficial for the Company's international operations. GOCLmainly operates in United Kingdom and key brands marketed inter alia include GranvilleGunk Nova and Autosol.
Other than as stated above and besides holding 100% shares of Veedol InternationalLimited the Company presently has two wholly owned subsidiaries viz. Veedol InternationalDMCC (VID) Dubai and Veedol Deutschland GmbH (VDG) Germany to cater to the Middle EastAsian Region and Europe respectively. The Company's another subsidiary VeedolInternational BV (VIBV) Netherlands has been closed down on 31st December2019 on account of restructuring of European business of the Company. In order to achieveeconomies of scale VDG and GOCL are now exporting Veedol products to the territories whichwere being serviced through VIBV in addition to their own assigned geographies.
Further Veedol International Americas Inc. had also been fioated as a wholly ownedsubsidiary of Veedol
International Limited UK. This has relaunched Veedol in Andean Region of SouthAmerica.
Veedol International Limited has also licensed the Veedol brand inter alia to alicensee in Canada Mexico and other licensees in France Germany Bangladesh and Republicof South Africa for sales thereat.
WIND ENERGY BUSINESS
During the year 2019-20 the revenue generated from the Wind Energy Project amounted toRs. 1.84 crores. The Company produces enough clean energy to offset its electricityconsumption from fossil fuel sources. The sector is poised to provide adequate returnsover the years.
In view of present financial results your Directors have the pleasure in recommendinga final Dividend of 2800% (Rs. 140.00 per ordinary share) on the Ordinary Shares of Rs. 5each for the financial year 2019-20 as against 1500% (Rs. 75.00 per ordinary share) forthe previous year to the equity shareholders of the Company. The Board of Directors at its324'h Meeting held on 14'h November 2019 declared 1s'interim dividend of 1000% (Rs. 50.00 per ordinary share) for financial year 201920involving a total dividend outfiow of Rs. 17.42 crores. The same was distributed to theShareholders on 28h November 2019. The Board of Directors again at its325h Meeting held on 14h February 2020 declared 2ndinterim dividend of 1200% (Rs. 60.00 per ordinary share) for the financial year2019-20 involving a total dividend outfiow of Rs. 20.91 crores. The same was distributedto the Shareholders on 2nd March 2020. The final dividend is in addition tothe two interim dividends as already distributed. The Dividend Distribution Policy isenclosed with this report as Annexure I. The same is also available at the officialwebsite of the Company at the weblink https://www.tidewaterindia.com/wp-content/uploads/2017/02/DIVIDEND%20DISTRIBUTION%20 POLICY pdf. Dividend(s) declared / to bedeclared were / is in line with the policy referred above.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulatedunder Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 as amended is presented in a separate section formingpart of the Annual Report as Annexure II.
Your Directors affirm their commitment to good Corporate Governance practices. Thereport on Corporate Governance as per the requirement of Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 as amendedtogether with a certificate from a Practicing Company Secretary and declaration by theManaging Director forms part of this report.
On acquisition of 100% shares Veedol International Limited had become a wholly ownedsubsidiary of the Company with effect from October 2011. Further to explore possibilitiesof marketing the products under 'Veedol' brand in the Middle East Asian Markets yourCompany had fioated another wholly owned subsidiary under the name Veedol InternationalDMCC at Dubai UAE. With a view to cater to the European Markets (excepting the DACHregion) the company had set up another wholly owned subsidiary viz. Veedol InternationalBV having its office at Amsterdam the Netherlands. The said company has been closed downduring the year on 31s' December 2019 due to reorganization of Europeanoperations.
As the 'Veedol' brand enjoys considerable brand equity in the DACH region VeedolDeutschland GMBH (VDG) had been initially set up as a 100% subsidiary of VeedolInternational BV (VIBV). During 2017-18 the Company had acquired 100% shareholding of VDGfrom VIBV. VDG continues to carry out its marketing operations for the DACH region and thesame operates from Langenfeld Germany.
However post-restructuring of European business VDG is currently exporting Veedolproducts to territories which were being serviced through VIBV in addition to its ownassigned geographies.
Veedol International Americas Inc. had been incorporated as a 100% subsidiary of VeedolInternational Limited. Veedol International Americas Inc. markets Veedol products in theAndean Region of South America. This Company operates from Ontario Canada.
During 2016-17 your Company had also acquired 100% shares of Veedol UK Limited (VUK)(formerly Price Thomas Holdings Limited) having a wholly owned subsidiary viz. GranvilleOil & Chemicals Limited which has its own manufacturing facility and is engaged inmanufacturing and selling of lubricants and automotive after care products throughoutUnited Kingdom (UK). GOCL operates from Rotherham UK.
The Statement of Accounts along with the Report of the Board of Directors and Auditorsrelating to your Company's Overseas Subsidiaries viz. Veedol International Limited VeedolInternational DMCC Veedol Deutschland GmbH and Veedol UK Limited (formerly Price ThomasHoldings Limited) for the financial year 2019-20 are not annexed.
Shareholders who wish to have a copy of the full Report and Accounts of the aforesaidsubsidiary companies will be provided the same on receipt of a written request. Thesedocuments will also be available for inspection by any shareholder at the RegisteredOffice of the Company and the concerned subsidiary companies during business hours on allworking days till 28'h August 2020 subject to available relaxations if anygranted by local authorities in view of restrictions imposed due to outbreak of thepandemic. However for the purpose of inspection the documents shall also be available atthe website of the Company at www.tidewaterindia.comunder 'Financials of Subsidiary Companies'.
PERFORMANCE OF SUBSIDIARIES AND JOINT VENTURE COMPANIES AS PER RULE 8(4) OF THECOMPANIES (ACCOUNTS) RULES 2014
A report on the performance and the financial position of each of the Subsidiaries andJoint Venture Companies as per the Companies Act 2013 is annexed to the ConsolidatedFinancial Statements and hence not repeated here for the sake of brevity.
The policy for determining material subsidiaries as approved may be referred to at theofficial website of the Company at the weblink https://www.tidewaterindia. com/wp-content/uploads/2017/02/Material-Subsidiary- Policy-2.pdf.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements have been prepared in accordance with theprinciples and procedures for the preparation and presentation of Consolidated Accounts asset out in the Indian Accounting Standards (IndAS) on Consolidated Financial Statementsnotified by the Companies (Indian Accounting Standards) Rules 2015. The AuditedConsolidated Financial Statement together with Auditors' Report forms part of the AnnualReport.
The group recorded a Consolidated Profit before Tax of Rs. 160.44 crores for thefinancial year 2019-20 as compared to Rs. 151.63 crores as achieved in the precedingyear.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(5) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that:
i. In the preparation of the annual accounts for the financial year ended 31s'March 2020 the applicable accounting standards had been followed along with the properexplanation relating to material departures if any;
ii. The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
iii. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 theCompany 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 ofall 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 purposefor which the loan or guarantee is proposed to be utilized by the recipient is provided inthe financial statements (Please refer Note 4 5 34 and 35 to the Standalone FinancialStatements). 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 asrequired under Schedule V of Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 as amended.
TRANSFER OF AMOUNTS AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 124 of the Companies Act 2013 and InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) AmendmentRules 2017 read with all relevant notifications as issued by the Ministry of CorporateAffairs from time to time all shares in respect of which dividend has remained unpaid orunclaimed for a period of seven consecutive years have been transferred by the Companywithin the stipulated due date to the Investor Education and Protection Fund (IEPF).
A list of shareholders alongwith their folio number or DP ID. and Client ID. who havenot claimed their dividends for the last seven consecutive years i.e. 2012-13 to 2018-19and whose shares are therefore liable for transfer to the lEPF Demat account has beendisplayed on the website of the Company at
The websites of your Company www.tidewaterindia.com and
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
With the global outbreak of Covid-19 the manufacturing plants of the Company had to beshut down temporarily in compliance with the directives of the Central Government andvarious State Governments. The Registered Office alongwith the Regional Offices were alsoclosed as per directives applicable to them. The Company had to adopt Work from HomePolicy for all its office employees and other staff to minimize the risk and containspread of Covid-19. However with the implementation of gradual relaxations the plants ofthe Company had resumed their operations in a limited way as reported to the StockExchanges vide disclosures dated 5th May 2020 and 25th May 2020. The major RegionalOffices had also resumed their operations with due compliance of guidelines permitting thesame. From the end of April 2020 though the Company managed to get only very marginalsales but the distribution / delivery of the products has been affected due toclassification of the products as nonessential.
Disruption of normal operations will have its adverse consequential effects on theoperations and results for the financial year 2020-21. These are early days and theCompany is not in a position to gauge with certainty the future impact on operations butexpects normalcy to be achieved in times to come. Further drop in sales is expected toimpact profitability which will be assessed once more clarity emerges. As suchquantitative impact of the same will be reported in due course alongwith the annual andquarterly results after proper estimation.
No fraud has been reported by the Auditors under Section 143(12) of the Companies Act2013 during the period under review.
Shri Amit Varadan has been appointed as Additional Director with effect from 14'hNovember 2019. He will hold office upto the date of the ensuing Annual General Meetingand is eligible for re-appointment. The Company has received notice under Section 160 ofthe Companies Act 2013 proposing his appointment as Director. Appropriate resolutionseeking appointment of Shri Amit Varadan as Director is appearing in the Notice conveningthe 97'h Annual General Meeting of the Company.
In accordance with the provisions of Section 152(6)(c) of the Companies Act 2013 andyour Company's Articles of Association Shri D.S.Chandavarkar Director retires byrotation and is eligible for re-appointment.
On recommendation of the Nomination and Remuneration Committee the Board on 24'hJune 2020 appointed Shri Subir Das Non-Executive Director as an Independent Director fora period of 3 years with effect from 1s' April 2020. However as suchappointment is subject to the approval of the shareholders a resolution in connection withthe same has been included in the notice of the 97h Annual GeneralMeeting of the Company.
Appropriate resolutions seeking appointment / reappointment of Shri D. S. ChadavarkarShri Amit Varadan and Shri Subir Das as Directors / Independent Director are appearing inthe Notice convening the 97h Annual General Meeting of the Company. Briefresume / details relating to Shri D. S. Chandavarkar Shri Amit Varadan and Shri Subir Dasare furnished in the said notice.
Shri Pravin Agrawal resigned from the Board of Directors of the Company with effectfrom 19h July 2019 in view of envisaged paucity of adequate time asdeemed necessary for effective discharge of his duties as a Director of the Company. Thesame has been noted by the Board at its 323rd meeting held on 13hAugust 2019 (adjourned to 14h August 2019). The Board of Directors alsoplaced on record the valued guidance received from him during his tenure of directorshipin the Company. Further the tenure of Shri A. Mukherjee Independent Director hasconcluded at the close of business on 31s' March 2020 on successfulcompletion of 2 (two) consecutive terms. Since this is not deemed to be a resignationtherefore various disclosures / confirmations as stipulated under the Companies Act 2013read with various rules and regulations thereto and further read with the provisions ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 as amended have not been provided.
Pursuant to Regulation 36(3)(c) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 as amended it is disclosedthat no Directors share any relationship inter-se.
DECLARATIONS BY THE INDEPENDENT DIRECTORS
All Independent Directors have given declarations to the Company stating theirindependence pursuant to Section 149 of the Companies Act 2013 and the same have beennoted by the Board. All the Independent Directors have also complied with the provisionsof sub-rule (1) and subrule (2) of Rule 6 of the Companies (Appointment and Qualificationof Directors) Fifth Amendment Rules 2019.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
Section 178 of the Companies Act 2013 is applicable to the Company. The Companyappoints Independent Directors being persons having rich experience and domain knowledgeto serve on the Board. Independent Directors are initially appointed by the Board onrecommendation of the Nomination and Remuneration Committee. Non-Executive Directors areappointed 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 contributiontowards the Company. Appointment(s) of all Directors are formalized on approval of theshareholders.
The Company has framed a Remuneration Policy in relation to remuneration of DirectorsKey Managerial Personnel (KMP) and Senior Management as recommended by the Nomination andRemuneration Committee of the Board of Directors. The same inter alia contains mattersstated under Section 178 of the Companies Act 2013 read with Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 asamended. The criteria of making payment to Non-Executive Directors are also stated in theaforesaid policy. The details of such policy i.e. summary weblink etc. have beenfurnished in the Corporate Governance Report forming part of this Annual Report.
The Nomination and Remuneration Policy as framed inter alia includes its objectiveapplicability matters relating to the remuneration perquisites for the Whole-time/Executive/Managing Director matters relating to remuneration forNon-Executive/Independent Director(s)
Stock Options matters relating to remuneration for KMP Senior Management Personneland Other Employees and interpretation provision. This may be deemed to be disclosure asrequired under proviso of Section 178(4) read with Section 134 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
The Board of Directors on the recommendation of the Nomination and RemunerationCommittee subject to the approval of the members of the Company decided to grant aSpecial Compensation to Shri R.N.Ghosal Managing Director with effect from 1stJanuary 2020 till his remaining term in addition to the remuneration sanctioned by theshareholders. This is in line with the norm adopted by the Board for the existing SeniorManagement of the Company. Suitable resolution to this effect has been included in theNotice convening the 97th Annual General Meeting of the Company.
Shri R. N. Ghosal Managing Director does not receive any remuneration from any othersubsidiary company. This may be deemed to be a disclosure as required under Section197(14) of the Companies Act 2013.
A statement indicating manner in which annual evaluation of the Board (includingCommittees) and individual Directors is carried out has been provided separately in thisreport.
Necessary disclosure as required under Schedule V of Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 as amended hasbeen 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 performanceevaluation of the Board was carried out during the year under review. The Board Evaluationand Diversity Policy which had been framed by the Company for the purpose of establishinginter-alia qualifications positive attributes independence of Directors anddetermination of criteria based on which such evaluation is required to be carried outincludes matters stated in guidance notes issued by the Securities and Exchange Board ofIndia (SEBI) vide its Circular No. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5'hJanuary 2017 thereby modifying the evaluation process.
Separate meeting of Independent Directors was held on 14th February 2020wherein 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.
The performance evaluation of the Board was carried out considering its compositioncompetency experience mix of qualification of directors regularity and frequency of itsmeetings its functions based on inter alia role and responsibility strategy evaluationof risks and its independence of management access to management etc. The performance ofthe Board Committees was evaluated based on its respective mandate and compositioneffectiveness structure and meetings independence from the Board and contribution todecisions of the Board. The performance of Chairman Managing Director IndependentDirectors and NonExecutive Directors were evaluated based on inter alia leadership &stewardship abilities qualification and experience knowledge and competency attendancerecord intensity of participation at meetings quality of interventions and specialcontributions during the Board Meeting identification monitoring & mitigation ofsignificant corporate risks etc. The Independent Directors were additionally evaluatedbased on independence ability of expressing independent views and judgement etc.Additional criteria for evaluation of Chairman were based on effectiveness of leadershipand ability to steer meetings impartiality commitment and ability to keep shareholders'interests in mind. Performance evaluation of the Board and its Committees were carried outby the Independent Directors and each individual director at the meeting of the Board ofDirectors held on 14'h February 2020. Independent Directors also evaluatedperformance of the Chairman each Non-Executive Directors and the Managing Director. Theperformance evaluation of each of the Independent Directors was carried out by the entireBoard excluding the Director being evaluated. This may be deemed to be a disclosure asrequired under Section 134(3)(p) of the Companies (Amendment) Act 2017.
CORPORATE SOCIAL RESPONSIBILITY
The Company recognizes that its operations impact a wide community of stakeholdersincluding investors employees customers business associates and local communities andthat appropriate attention to the fulfillment of these social responsibilities can enhanceoverall performance.
The Board of Directors of the Company in this regard has devised a Corporate SocialResponsibility (CSR) Policy which inter-alia states mode of constitution of CSRCommittee activities which can be undertaken mode of implementation quantum ofinvestment etc. As per the terms of the CSR Policy the Board of Directors hasconstituted a CSR Committee. The Policy has empowered the Committee to inter aliarecommend the amount of expenditure to be incurred on approved activities. The policy alsocontains provisions relating to scope functioning and meetings of the CSR Committee. Thescope of the policy extends to activities as stated under Schedule VII of the CompaniesAct 2013 including but not limited to imparting of training to identified persons forskill development promotion of health care contribution towards projects for ruraldevelopment sustainable development etc. As per the policy the CSR Committee shallrecommend to the Board on matters relating to minimum eligibility criteria quantum ofproposed expenditure modalities of execution engagement of implementing agencyincidental and ancillary matters etc. in connection with any identified project. This maybe deemed to be a disclosure as required under Section 134 of the Companies (Amendment)Act 2017 in relation to providing of salient features of CSR Policy. The entire policy isavailable on the Company's website at the weblink
Towards this during 2019-20 the Company has donated to various organizations viz.Chittaranjan National Cancer Institute Kolkata Antara Baruipur Ramkrishna AshramNimpith Ramkrishna Vivekananda Mission Barrackpore Vivekananda Mission Ashram HaldiaIIT Madras and IIT Bombay as a part of its CSR initiatives.
In addition to the above during the year the Company has also sponsored training ofeconomically weaker and socially disadvantaged youths in the age group of 18-35 years inthe courses in "Earth Moving Equipment" space like Junior Excavator Operator andJunior Backhoe Operator with a view to empower them through acquisition of skills relevantto industry leading to employment or entrepreneurship. This initiative has beenundertaken in collaboration with Tata Hitachi Construction Machinery Company PrivateLimited (Tata Hitachi). Presently trainings are conducted at the plant of Tata Hitachilocated at Kharagpur West Bengal.
The CSR Committee has been constituted by the Board which as on 31s' March2020 comprises of Smt. N. Palchoudhuri as Chairperson Shri R. N. Ghosal and Shri SubirDas. The Committee met thrice during the year on 30th May 2019 14thAugust 2019 and 14th November 2019 to monitor CSR activities undertakenreview scope of CSR activities approve CSR Report etc. The Company has set up anauto-mechanic school at Kolkata. Utkarsh continued to provide consultancy service for CSRactivities during the year under review. The details in relation to CSR reporting asrequired under Rule 8 of Companies (CSR Policy) Rules 2014 is enclosed with this reportas Annexure III.
Other relevant details in relation to CSR Committee such as terms of reference of theCSR Committee number and dates of meetings held and attendance of the Directors are givenseparately in the attached Corporate Governance Report.
Fraud-free and corruption-free work culture has been core to the Company. In view ofthe potential risk of fraud and corruption due to rapid growth and geographical spread ofoperations 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 beenlaid 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 requiredunder Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 as amended the Board has adopted a Risk Management Planfor the Company which includes inter-alia identification of elements of risks which maythreaten the existence of the Company and specifically covers cyber security. Structuresare present so that risks are inherently monitored and controlled. Relevant details of theRisk Management Committee and the Risk Management Plan including implementation thereofhave been furnished under the Corporate Governance Report.
EMPLOYEE BENEFIT SCHEME AND TRUST
In terms of the approval of the shareholders dated 2nd March 2011 yourCompany had implemented Tide Water Oil Co. (India) Ltd. Employee Welfare Scheme forgranting/allotting options to the eligible employees of the Company through Tide Water OilCo. (India) Ltd. Employee Welfare Trust. With the promulgation of Securities and ExchangeBoard of India (Share Based Employee Benefits) Regulations 2014 (SBEB Regulations) theexisting scheme and the provisions of the existing Trust had been aligned with that of theprovisions contained in the said Regulation. Subsequent to the sanction of theshareholders the scheme and the trust had been rechristened as Tide Water Oil Company(India) Limited Employee Benefit Scheme and Tide Water Oil Company (India) LimitedEmployee Benefit Trust respectively. During the year under review the Board of Directorsof your Company decided to include the provisions of General Employee Benefits Scheme(GEBS) and Retirement Benefit Scheme (RBS) as a part of Tide Water Oil Company (India)Limited Employee Benefit Scheme which are in line with the provisions of SBEB Regulations.The Board also decided to implement the same through Tide Water Oil Company (India)Limited Employee Benefit Trust so that certain employee welfare benefits includinghealthcare benefits hospital care or benefits in the event of sickness accidentdisability death or scholarship funds etc. and retirement benefits respectively canalso be provided under the aforesaid Scheme. As such the Company vide Special Resolutionscontained in Postal Ballot Notice dated 14'h November 2019 obtained necessaryshareholders' sanction for inclusion of provisions relating to GEBS and RBS in theexisting Employee Benefit Scheme and Trust.
Pursuant to Rule 12 of Companies (Share Capital and Debentures) Rules 2014 therequired details for the year 2019-20 are stated as under:
Save and except as stated hereinabove there has been no material change in theconcerned Scheme.
The provisions of aligned scheme are in compliance with the SBEB Regulations. Necessarydetails as referred in Regulation 14 of SBEB Regulations read with Circular numberCIR/CFD/POLICY CELL/2/2015 dated 16'h June 2015 as issued by SEBI is uploadedon the Company's website at the weblink https://www .tidewaterindia.com/wp-content/uploads/2017/03/SEBI- SBEB-Regulation-14-2019-20.pdfACertificate from the Auditors of the Company as required under Regulation 13 of SBEBRegulations is enclosed as Annexure IV.
FURTHER DISCLOSURES UNDER THE COMPANIES ACT 2013
i. Annual Return
The Annual Return(s) are available at the website of the Company at
ii. Number of Board Meetings
There were 4(Four) meetings of the Board of Directors held during the year 2019-20 on30'h May
2019 13'h August 2019 (adjourned to 14'h August 2019) 14'hNovember 2019 and 14'h February
2020. The details of attendance of the Directors in the said Board Meetings have beenfurnished in the Corporate Governance Report. Details of Committee Meetings held during2019-20 and attendance thereof by each Director is also furnished in the said CorporateGovernance Report.
iii. Changes in Share Capital
There has been no change in the share capital of the Company during the year. YourCompany has not issued any ordinary shares or shares with differential voting rights norgranted stock options nor sweat equity during the year. As on 31s' March 2020none of the Directors of the Company hold shares or convertible instruments of theCompany.
iv. Composition of Audit Committee
The Board has constituted the Audit Committee which comprises of Shri S. Roy Choudhuryas the Chairman Shri S. Sundareshan Shri P Y. Gurav and Shri Subir Das. Allrecommendations 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 2019-20 the Company entered into transactions cumulative valuewhereof amounts to Rs. 146.41 crores with Standard Greases & Specialities Pvt. Ltd.(SGSPL) Joint Promoter of
the Company which exceeds the threshold limit stated under Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 asamended and also the threshold limit stated under Rule 15 of the Companies (Meetings ofBoard and its Powers) Rules 2014 as amended. SGSPL is one of the largest greaseproducers in Asia and they supply grease to the Company to meet the needs of WesternRegion and Northern Region as there are no grease plants thereat. Further the Company alsoprocures lubricating oil and other chemicals from SGSPL. All these products are offered oncompetitive rates and the same is in ordinary course of business.
During the year 2019-20 the Company also entered into transactions cumulative valuewhereof amounts to Rs. 245.64 crores with JX Nippon TWO Lubricants India Pvt. Ltd. (JXTL)Associate Company which exceeds the threshold limit stated under Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 asamended and also the threshold limit stated under Rule 15 of the Companies (Meetings ofBoard and its Powers) Rules 2014 as amended. Pursuant to the Joint Venture Agreement asexecuted between JXTL JXTG Nippon Oil & Energy Corporation (formerly JX Nippon Oil& Energy Corporation) and the Company Tide Water Oil Co. (I) Ltd. pays franchise feesto JXTL in connection with manufacturing and selling of 'ENEOS' range of products. Thisis on arms length and in ordinary course of business. The details in Form AOC-2 ofmaterial transaction(s) entered into by the Company with its related parties are enclosedas Annexure V. There were no other materially significant related partytransactions with Promoters Directors or the Management their Subsidiaries or relativesetc. during the year that may have potential confiict with the interest of the Company atlarge. Other than as stated above there was no related party transaction during 2019-20which was material in nature in terms of provisions of the Companies Act 2013 and rulesmade thereunder requiring disclosure as prescribed under Section 188(2) of the CompaniesAct 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 innature. While granting omnibus approval the Company complied with the provisions ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 as amended. Shareholders' sanction is also obtained for materialrelated party transactions proposed to be entered into during the year.
The related party transaction policy for determining materiality of related partytransaction and also on dealing with related parties is uploaded on the Company's websiteat the weblink https://www .tidewaterindia.com/wp-content/uploads/2017/02/ RELATED-PARTY-TRANSACTION-POLICY-3. pdf.The details of the transactions with related parties are provided in the accompanyingfinancial statement. The details of the said policy and other relevant details have alsobeen 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 andState 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 hadresigned during the year:
a. Directors appointed : Shri Amit Varadan
b. Directors resigned : Shri Pravin Agrawal
c. Change in KMPs : None
1. The Board of Directors approved appointment of Shri S.Das Non-Executive Director ofthe Company as an Independent Director with effect from 1s' April 2020 for aperiod of 3(three) years necessary resolution whereof has been included in the noticeconvening the 97h Annual General Meeting of the Company.
2. Tenure of Shri A. Mukherjee Independent Director has concluded at the close ofbusiness on 31st March 2020 on successful completion of 2 (two) consecutiveterms.
iv. Names of Companies which have become or ceased to be Subsidiaries Joint VentureCompanies or Associate Companies during the year
a. One of the wholly owned subsidiaries of the Company viz. Veedol International BVincorporated in the Netherlands has been closed down during the year 2019-20.
b. Joint Venture Company (JVC): There has been no change in JVC during the year2019-20.
c. Associate Companies: There are no Associate Companies other than the JVC viz. JXNippon
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 thepublic outstanding at the end of the financial year.
No fixed deposit has been accepted during the year and as such there is no default inrepayment of the said deposits.
vi. There has not been any deposit which is not in compliance with the requirements ofChapter V of the Companies Act 2013.
vii. No significant and material orders have been passed by any regulator(s) orCourt(s) or Tribunal(s) impacting the going concern status and Company's operations infuture.
viii. Adequacy of Internal Financial Control: Your Company has an adequate system ofinternal financial control as commensurate with the size and nature of business whichensures that all assets are safeguarded and protected against loss and all transactionsare recorded and reported correctly. The internal control system of the Company ismonitored and evaluated by internal auditors and their audit reports are periodicallyreviewed by the Audit Committee of the Board of Directors. The observations and commentsof the Audit Committee are placed before the Board of Directors for reference.
The scope of Internal Audit includes audit of Purchase Policy Sales PromotionExpenditure and Incentive Scheme Debtors and Creditors Policy Inventory Policy Taxationmatters and others which are also considered by the Statutory Auditors while conductingaudit of the Annual Financial Statements.
DISCLOSURE AS PER RULE 5(1) OF COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) AMENDMENT RULES 2016
The disclosure as required under Rule 5(1) of Companies (Appointment and Remunerationof Managerial Personnel) Amendment Rules 2016 is enclosed with this report as AnnexureVI.
Your Company has not paid any remuneration attracting the provisions of Rule 5(2) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules2016.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
No cases were filed / reported to the Company pursuant to the Sexual Harassment ofWomen 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 andRegional levels to monitor compliance with the provisions of the said Act and complaintsthereof if any.
AUDITOR AND AUDITOR'S REPORT
M/s. Price Waterhouse Chartered Accountants LLP (PWC) was appointed as Auditors of theCompany at the 94'h Annual General Meeting. Since eligible members hadsanctioned continuation of their appointment till the conclusion of the 99'hAnnual General Meeting. In view of notification dated 7'h May 2018 issued byMinistry of Corporate Affairs read with Companies (Audit and Auditors) Amendment Rules2018 ratification of such appointment has not been proposed.
The Auditors vide their report dated 24th June 2020 have expressed anunmodified opinion on the Standalone Financial Statements for the year ended 31stMarch 2020. However vide their report of even date they have expressed a modified opinionon the Consolidated Financial Statements for the year ended 31st March 2020regarding non-conducting of audit of the Joint Venture Company viz. JX Nippon TWOLubricants India Private Limited (JXTL) for 2019-20 the financial results of which hasbeen consolidated with the annual accounts of the Company. They have also stated that theimpact of adjustments if any had an audit been carried out of the financial statements /financial information / financial results of JXTL as at and for the year ended 31stMarch 2020 is unascertainable. Your Directors state that the audit of JXTL which is anunlisted entity could not be carried out prior to completion of audit of financialresults of your Company in view of the lockdown prevailing in the country. Further theBoard of Directors of JXTL had certified the financial statements which had beenconsidered for the purpose of preparation of Consolidated Financial Statements for2019-20. The Statement on Impact of Audit Qualifications as stipulated under Regulation33(3) (d) of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 as amended is enclosed as Annexure VII.
A statement detailing significant Accounting Policies of the Company is annexed to theAccounts. SECRETARIAL AUDIT AND COMPLIANCE REPORT A Secretarial Audit was conductedduring the year 2019-20 by the Secretarial Auditor Shri Manoj Prasad Shaw of M/s. ManojShaw & Co. Practicing Company Secretaries in accordance with the provisions ofSection 204 of the Companies Act 2013 read with Regulation 24A of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment)
Regulations 2018. The Secretarial Auditor's Report is attached as Annexure VIII andforms part of this report of Directors. There are no qualifications made by theSecretarial Auditor in his Report.
Further pursuant to Securities and Exchange Board of India circular noCIR/CFD/CMD1/27/2019 dated 8th February 2019 Shri Manoj Prasad Shaw of M/s. Manoj Shaw& Co. Practicing Company Secretaries has issued Annual Secretarial Compliance Reportto the Company with respect to compliance of all applicable regulations circulars andguidelines issued by Securities and Exchange Board of India. The said report has been dulysubmitted to the National Stock Exchange and Bombay Stock Exchange. Further a copy of thereport is available at the Company's website at
BUSINESS RESPONSIBILITY REPORT As stipulated under Regulation 34(2)(f) of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 as amended vide the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) (Fifth Amendment) Regulations 2019 the BusinessResponsibility Report describing the initiatives taken by the Company from environmentalsocial and governance perspective forms a part of the Annual 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 thefinancial year has accrued as a result of the following steps taken at various locationsof the Company.
i. 3 Nozzle pail filling machines had been replaced with 5 Nozzle pail fillingmachines thereby saving 3456 Kwh/ Year.
ii. 30 nos. of tube lights of 36 Watts each were replaced with 20W LED light fittingsthereby saving 1497 Kwh/Year.
Replaced 72W CFL conventional lamps at administration building with 40W LED panellamps. Total 75 numbers of panels had been installed which will annually save energy upto6700 Kwh approx. ORAGADAM
18 Nos. of Variable Frequency Drives were procured for installation in new Base OilUnloading & Transfer Pump Motors for reduction in power consumption.
2. Steps taken by the Company for utilising alternate
sources of energy - None in particular 3. Capital investment on energy conservationequipments - 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 latesttechnology.
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 EXCHANGE EARNINGS AND OUTGO
Foreign Exchange Earnings during the year under review was Rs. 15.46 crores (last yearRs. 6.90 crores) while Foreign Exchange Outgo was Rs. 172.28 crores (last year Rs. 224.31crores). ACKNOWLEDGEMENT
The Board of Directors would like to place on record their appreciation of the supportand assistance received from the Government of India and the State Government. TheDirectors are thankful to the Company's Bankers / Shareholders / all other Stakeholdersand the esteemed customers for their continued support.
The Board deeply appreciates the commitment and the invaluable contribution of all theemployees towards the satisfactory performance of your Company.