Gulf Oil Report

Gulf Oil Corporation Limited

FORTY NINTH ANNUAL REPORT 2009-2010
Board of Directors
(As on 14th May, 2010)
S. G. Hinduja, Chairman R. P. Hinduja, Vice Chairman K. N. Venkatasubramanian P. N. Ghatalia (till 13.8.2009) H. C. Asher M. S. Ramachandran Ashok Kini Prakash Shah Kanchan Chitale (w.e.f. 5.10.2009) Vinoo S Hinduja V. Ramesh Rao Vinod K Dasari S. Pramanik, Managing Director A. K. Das, Alternate to S. G. Hinduja A. V. Dujean, Alternate to R. P. Hinduja Prabal Banerjee, Alternate to Vinoo S Hinduja Committees of the Board: Audit Share Transfer & Investors' Grievance Remuneration Safety Review Investment Appraisal & Project Review
Executive Team: Corporate Lubricants Division
Kanchan Chitale, Chairperson Ashok Kini, Chairman Prakash Shah, Chairman Vinod K. Dasari, Chairman M. S. Ramachandran, Chairman
H. C. Asher S. Pramanik H. C. Asher Ashok Kini Vinoo S Hinduja
Ashok Kini Vinod K. Dasari M. S. Ramachandran K.N. Venkatasubramanian Vinod K. Dasari
Vinoo S Hinduja
S. Subramanian
Ravi Chawla Y.P. Rao R. Varadarajan Raman Gopal S. Chakrabarti T.T. Das
CFO & Company Secretary President (Lubricants) Sr. V.P. (Technical) Sr. V.P. (Sales & Business Development) President (IDL Divisions) Chief Operating Officer (Explosives) General Manager - Consult
Y.V. Siva Reddy Amrish Kathane Manish Gangwal Alok Mahajan Dr. Mohan Kidambi A. D. Sao A.M. Kazmi
G.M. (Internal Audit) Sr. GM (Supply Chain) G.M. (Finance & Accounts) G.M. (Marketing) Sr. GM (Explosives Operations) Sr. GM (Marketing & Explosives) GM (Exports)
Explosives & Contracts Divisions
Company Secretary Deputy Company Secretary

Bankers
S. Subramanian A. Satyanarayana
State Bank of India State Bank of Hyderabad Oriental Bank of Commerce ICICI Bank Limited Andhra Bank IDBI Bank Ltd Bank of Bahrain & Kuwait B.S.C. HSBC Bank
Auditors Registered/ Corporate Ofce
Deloitte Haskins & Sells, Chartered Accountants, Secunderabad, Shah & Co., Chartered Accountants, Mumbai. (Branch Auditors) Kukatpally, Hyderabad - 500 072 Andhra Pradesh
CONTENTS
Ten Year Review ................................................................2
Chairman's Letter ...............................................................4 Notice .................................................................................6 Directors Report...............................................................10 Corporate Governance Report .........................................22 Shareholders Information ................................................27 Auditors Report ................................................................32 Balance Sheet ..................................................................36 Prot and Loss Account....................................................37 Balance Sheet Abstract ....................................................64 Consolidated Balance Sheet ............................................66 Consolidated Prot and Loss Account..............................67
A TEN YEAR REVIEW

(Rs. lakhs) Year INCOME & DIVIDENDS Turnover Prot Before Tax Prot After Tax Prot After Tax as percentage of Sales Earnings Per Share (Rs.) Dividend per fully paid Equity Share (Rs.) Dividend 106565.94 5430.23 4507.23 4.23% 99588.84 3875.41 2904.38 2.92% 3.91# 1.70# 1264.10 83321.52 2970.60 2513.17 3.02% 3.42 # 1.50 # 1115.38 66865.64 3183.37 2300.59 3.44% 16.58 7.50 1115.38 50724.65 47340.47 2543.43 2278.6 4.49% 16.43 7.00 971.02 2215.07 2003.07 4.23% 14.44 6.50 901.66 41551.04 2798.39 2290.80 5.51% 16.51 6.00 832.30 40534.71 1132.93 1531.52 3.78% 11.04 5.00 693.59 25250.68 978.55 769.55 3.05% 8.12 3.00 416.15 19569.69 6084.32 5464.32 27.92% 68.29 5.00 400.09 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01
6.06# 1.80#
1338.46
(Rs. lakhs) Year CAPITAL EMPLOYED Net Fixed Assets Net Working Capital Other Assets Total Capital Employed 58103.87 11456.40 3204.01 72764.28 60676.59 200424.32 17835.12 3595.94 22592.43 6992.93 15647.14 14451.81 7980.24 38079.19 11367.26 10560.95 9597.43 5278.71 8130.11 4839.49 8215.47 9837.19 2394.70 20447.36 7943.98 12593.26 984.10 21521.34 8024.33 17173.69 2211.82 27409.84 4196.39 10046.86 1404.98 15648.23 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01
82107.65 230009.68
26243.4 23530.55
(Rs. lakhs) Year NETWORTH & LOANS Shareholders Funds: Capital Reserves Tangible Networth Secured Loans No.of Shareholders at year end
Note: Sales figure includes Excise Duty # Equity Shares of face value of Rs. 2 each. Previous years face value Rs. 10 each.
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
2003-04
2002-03
2001-02
2000-01
1487.17 40789.77 42276.94 17074.51 61276
1487.17
1487.17
1387.17 14388.71 15237.06 15547.27 43790
1387.17
1387.17
1387.17 11246.72 12045.21 6224.07 47605
1387.17 10454.43 11841.60 7593.02 48945
1387.17 12943.00 14330.17 11206.99 46969
800.17 9317.35 10117.52 3965.37 47393
39794.17 203901.39 41281.34 204717.18 17122.63 59476 13457.72 56218
13393.06 12221.67 14284.78 12827.12 8147.69 43840 8243.71 45893
Turnover
( ` Crores )
1200 1000 800 600 400 200 0
2005-06 2006-07 2007-08 2008-09 2009-10
Segment-wise Turnover
( ` Crores )
563 507 420
996 833 669 507
1066
600 500 400
214 287 277 148 72 64 169 141 211 396
308
300 200 100 0

2005-06
194
2006-07
2007-08
2008-09
2009-10
Lubricants
Explosives
Mining & Infrastructure
PAT, PBT and Dividend Payout
( ` Crores )
54
Dividend per share and EPS
(`)
6.06
60.00 50.00 40.00 30.00 20.00 10.00 0.00

25 23 10
2005-06
39 32 23 11 30 25 11 29
45
6.00 3.29 4.00 3.32
3.42
3.91
`
13 13
2.00 0.00
1.40
1.50
1.50
1.70
1.80
2006-07
2007-08
2008-09
2009-10
2005-06
2006-07
2007-08
2008-09
2009-10
PBT
PAT
Dividend Payout
Dividend per Share
EPS
Disposal Of Revenue - F 2010

Cost of Material 46% Employee Cost 8% Expenses on Operation Contract 15%
Number of Shareholders
80000 60000 40000 43840 43790
56218
59476
61276
Other Expenses Net of Exceptional item 20% Retained Earnings 3% Dividend & Dividend Tax 2% Provision Depreciation 2% for Taxation 1%
20000 0
2005-06 2006-07 2007-08 2008-09 2009-10
Interest 3%
Chairman's Letter
Dear Shareholders, The Indian economy continues to surge ahead registering a growth of 7.5% in 2009-10 with an 8.6% Y-o-Y growth in the 4th quarter. The growth has been driven by robust performance of the manufacturing sector on the back of Government and consumer spending and, incidentally, exceeded the Governments own forecast for the year. Such a performance is conducive to business as a whole Thanks to this, your Company has crossed the Rs. 1000 crores turnover mark a signicant milestone for the Company. The Automobile industry reported a 26% growth in sales in 2009-10 whilst mining and quarrying grew by over 10% and electricity supply by 6.6%. Backed by this strong demand, all the three Divisions namely Lubricants, Industrial Explosives and Mining and Infrastructure Contracts of the Company showed growth in business. The Lubricants business the largest Division, performed well. Sales grew by 11% to Rs. 563 crores. Industrial Explosives performed well this year and also achieved a turnover of Rs. 308 crores, a growth of 11%. The Mining and Infrastructure Division was roughly at the same level as last year at Rs. 194 crores of service income, due to a major project having been completed in Q2 of the previous year.
NEW INITIATIVES Lubricants Our endeavour to continuously provide the best projects and applications to our customers has given us the impetus to develop several new initiatives during the year. In the Lubricants Division, we have taken further initiatives to continue with our brand building exercise which we started a few years ago and we have been able to increase our market share by breaking into new eets, construction equipment users, medium sized industries and OEMs. New product promotions aimed at 3-wheeler commercial segments and their commercial vehicles yielded encouraging results. Aggressive positioning in the bazaar markets in Northern and Western Regions achieved for the Division one of the highest growth rate as per the AC Nielson Retail Audit Report. Industrial Explosives Business The Explosives business had developed cartridged emulsion products which were being toll manufactured. With the growing requirement of the product and its specialised applications, the Division commissioned a packaged emulsion explosives facility at Rourkela which would be fully operative in the current year. The special quality explosives have found good acceptance in the civil infrastructure tunneling and trade sectors.
4
At the same time new packaged explosives for underground coal mining were developed in collaboration with the Central Institute of Mining and Fuel Research, Dhanbad, and commercialised during the year. A new product range of fully eld programmable electronic detonators have been developed through the Divisions R&D efforts as part of the electronic detonator project started 3 years ago. These new eld programmable detonators are required for specialised applications by our customers especially for critical environmental requirements at their sites. Contracts Business The Mining and Infrastructure Contracts Division has been awarded a prestigious contract by the Uranium Corporation of India. This will be a major milestone for the business and will enhance its experience and capabilities further.
CONCERN AREAS Overall input prices will remain a cause for concern. The high ination and uctuating global prices for crude could affect raw material prices and impact margins. Whilst our businesses are taking action to neutralise these likely increases by proactive steps, planned purchases and cost optimization in all areas, the rising input prices could impact margins in the current year.
EXPORTS The exports by the Company increased to Rs. 68 crores from Rs. 51 crores. Our exports from Lubricants and Industrial Explosives Divisions are mainly to South East Asia, Middle East, Africa and Southern Europe. The Explosives Division has received the prestigious CAPEXIL Award for their efforts.
PROPERTY DEVELOPMENT Property Development at Bangalore has now started as the demand for properties has revived. The development of 5.05 mn sq.ft. is being taken up and will cover hotel, retail outlets, commercial malls and serviced apartments. The construction work at Bangalore will commence in the current year. Further work on the Hyderabad property was held up due to the 100 ft. connector road being nalised by the GHMC. This issue has recently been resolved and architectural work and development has been commenced.
RIGHTS ISSUE The formalities connected with Rights Issue announced last year have been completed and offer letters are being sent to all eligible shareholders shortly. The Board has as an appreciative gesture decided to price the Rights to recognize the co-operation and support received from the shareholders over the years. As the Company enters its 50th year our outlook to the future continues to be optimistic and is driven by the growth story of India Inc. We will remain committed to growth, good governance and consistently enhancing shareholder value. I am sure with your support and commitment and energy of our employees, Gulf Oil will scale newer heights in the years ahead.
S. G. Hinduja August 2, 2010. CHAIRMAN
NOTICE OF THE FORTY NINTH ANNUAL GENERAL MEETING

NOTICE is hereby given that the Forty Ninth Annual General Meeting of the Company will be held at 2.30 p.m. on Thursday, the 23rd day of September, 2010 at Emerald-1, Hotel Taj Krishna, Banjara Hills, Hyderabad - 500034 to transact the following: ORDINARY BUSINESS 1. To consider and adopt the Directors Report, the Auditors Report, the Balance Sheet as at 31st March 2010 and the Prot and Loss Account for the year ended 31st March 2010. To declare dividend for the nancial year ended 31st March 2010. To appoint a Director in place of Mr. Ashok Kini, who retires by rotation under Article 122 of the Articles of Association of the Company and is eligible for re-appointment. To appoint a Director in place of Mr. Vinod K Dasari, who retires by rotation under Article 122 of the Articles of Association of the Company and is eligible for re-appointment. To appoint a Director in place of Ms. Vinoo S Hinduja, who retires by rotation under Article 122 of the Articles of Association of the Company and is eligible for re-appointment. To appoint a Director in place of Mr. Ramesh V Rao, who retires by rotation under Article 122 of the Articles of Association of the Company and is eligible for re-appointment. To consider, and if thought t, to pass, with or without modication, the following Resolution as an Ordinary Resolution: RESOLVED that M/s Deloitte Haskins & Sells, Chartered Accountants, Secunderabad be and are hereby appointed Auditors of the Company from the conclusion of this meeting until the conclusion of the next Annual General Meeting on a remuneration to be negotiated and xed by the Audit Committee/Board of Directors of the Company in addition to actual out-of-pocket expenses incurred by them for the purpose of audit. 8. To consider, and if thought t, to pass, with or without modication, the following resolution as an Ordinary Resolution: RESOLVED that M/s. Shah & Co., Chartered Accountants, Mumbai be and are hereby appointed as Branch Auditors of the Company for its Lubricants Division at Mumbai from the conclusion of this meeting until the conclusion of the next Annual General Meeting on a remuneration to be negotiated and xed by the Audit Committee/Board of Directors of the Company in addition to actual out-of-pocket expenses incurred by them for the purpose of audit. SPECIAL BUSINESS: 9. To consider, and if thought t, to pass, with or without modications, the following resolution as a Special Resolution: RESOLVED that in supersession of previous resolution passed by the Members of the Company at their Meeting held on 31st July 2009 and pursuant to the provisions of Section 81(1A) and all other applicable provisions, if any, of the Companies Act, 1956, the Foreign Exchange Management Act, 1999 (including any statutory modication(s) or re-enactment thereof for the time being in force), and the applicable laws, Rules, Guidelines, Regulations, Notications and Circulars, if any, issued by the Securities and Exchange Board of India (SEBI), Reserve Bank of India (RBI), the Government of India (GOI), the Foreign Investment Promotion Board (FIPB), and other concerned and relevant authorities, and other applicable Indian laws, rules and regulations, if any, and relevant provisions of Memorandum and Articles of Association of the Company and the Listing Agreement(s) entered into by the Company with the Stock Exchanges where the Shares of the Company are listed and subject to such approval(s), consent(s) permission(s) and/ or sanctions(s) as may be required from GOI, FIPB, RBI, SEBI and any other appropriate authorities, institutions or bodies, as may be necessary and subject to such conditions as may be prescribed by any of them while granting any such approval, consent, permission or sanction which may be agreed by the Board of Directors of the Company (the Board) (which term shall be deemed to include Offering Committee or any other Committee constituted or hereafter be constituted for the time being exercising the powers conferred on the Board by this Resolution), which the Board be and is hereby authorized to accept, if it thinks t in the interest of the Company, the consent and approval of the Company be and is hereby accorded to the Board to create, issue, offer and allot, from time to time,
2. 3.
4.
5.
6.
7.
Securities (as dened below) in the form of Equity or other Shares, Warrants, Bonds or Debentures, Depository Receipts, (whether Global Depository Receipts (GDRs), American Depository Receipts (ADRs), Indian Depository Receipts (IDRs) or any other form of Depository Receipts), or any other debt instrument either convertible or non-convertible into Equity or any other Shares whether optionally or otherwise, including Foreign Currency Convertible Bonds representing any type of securities (FCCBs), whether expressed in Foreign Currency or Indian Rupees (all or any of which are hereinafter referred to as Securities) whether secured or unsecured, and further the Board be and is hereby authorized, subject to applicable laws and regulations, to issue the Securities to investors (including but not limited to Foreign Banks, Financial Institutions, Foreign Institutional Investors, Qualied Institutional Buyers, Mutual Funds, Companies, other Corporate Bodies, Non- Resident Indians, Foreign Nationals and other eligible investors as may be decided by the Board (hereinafter referred to as Investors) whether or not such Investors are members, promoters or directors of the company or their relatives or associates, by way of one or more private and/ or public offerings (and whether in any domestic and/ or international market(s), through a public issue(s), private placement(s), Qualied Institutional Placement(s), preferential issue(s) or a combination thereof in such manner and on such terms and conditions as the Board deems appropriate at its absolute discretion provided that the issue size shall not exceed US$100 million or Rs.450 crores inclusive of such premium as may be payable on the Equity Shares or any other Security, at such time or times and at such price or prices and in such tranche or tranches as the Board in its absolute discretion deems t. RESOLVED FURTHER THAT in the event the Company proposes to issue Securities through Preferential Issue, the Relevant Date in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2009 shall be 23rd August, 2010, being the date 30 days prior to the date of this Annual General Meeting or such other date as may be prescribed. RESOLVED FURTHER THAT without prejudice to the generality of the above, the aforesaid issuance of the Securities shall be subject to such terms or conditions as are in accordance with prevalent market practices and applicable Laws and Regulations, including but not limited to, the terms and conditions relating to payment of interest, dividend, premium on redemption, the terms for issue of additional Shares or variations in the price or period of conversion of Securities into Equity Shares or terms pertaining to voting rights or options for redemption of Securities. RESOLVED FURTHER that the Board be and is hereby authorised to seek, at its absolute discretion, listing of Securities issued and allotted in pursuance of this resolution, on any Stock Exchanges in India, and/or Luxembourg/ London/Nasdaq/New York Stock Exchanges and/or any other Overseas Stock Exchanges. RESOLVED FURTHER that the Board be and is hereby authorised to issue and allot such number of Equity Shares as may be required to be issued and allotted upon conversion of any Securities referred above as may be necessary in accordance with the terms of offering, and that the Equity Shares so allotted shall rank in all respects pari passu with the existing Equity Shares of the Company. RESOLVED FURTHER that subject to the approval(s), consent(s), permission(s) and/ or sanctions(s) stated above, the Company be and is hereby authorized to retain oversubscription/ green-shoe issue option up to 25% of the amount issued and the Board be and is hereby authorised to decide the quantum of oversubscription to be retained as also any other matter relating to or arising therefrom. RESOLVED FURTHER that the Board be and is hereby authorised to do all such acts, deeds, matters and things as it may at its discretion deem necessary or desirable for such purpose including, if necessary, creation of such mortgages and/or charges in respect of the Securities on the whole or any part of the undertaking of the Company under Section 293(1)(a) of the Companies Act, 1956 or otherwise and to execute such documents or writings as it may consider necessary or proper and incidental to this Resolution. RESOLVED FURTHER that the Board be and is hereby authorised to do all such acts, deeds, matters and things and to decide upon, as it may at its discretion deem necessary, expedient or desirable in relation to all or any of aforesaid purpose including without limitation to the utilization of issue proceeds, nalizing the pricing, terms and conditions relating to the issue of aforesaid Securities including amendments or modications thereto as may be deemed t by them, to sign, execute and issue consolidated receipt/s for the Securities, listing application, various agreements such as Subscription Agreement, Depository Agreement, Trustee Agreement, undertakings, deeds, declarations, Letters and all other documents or papers and to do all such acts, deeds, matters and things, and to comply with all formalities as may be required in connection with and incidental to the aforesaid offering of Securities or anything in relation thereto, including but not limited to the post issue formalities and with power on behalf of the Company to settle any question, difculties or doubts that may arise in regard to any such creation, issuance, offer or allotment of the Securities as it may in its absolute discretion deem t.
RESOLVED FURTHER that the Board be and is hereby authorized to enter into and execute all such arrangements/ agreements as may be required for appointing Managers (including lead managers), merchant bankers, underwriters, nancial and/or legal advisors, tax advisors, consultants, depositories, custodians, principal paying/transfer/ conversion agents, listing agents, registrars, trustees and/ or all such agencies as may be involved or concerned in such offerings of Securities, whether in India or abroad, and to remunerate all such agencies including the payment of commissions, brokerage, fees or the likes, and also to seek the listing of such Securities or Securities representing the same in one or more stock exchanges whether in India or outside India, as it may be deem t. 14th May 2010 Registered Ofce: Kukatpally, Post Bag No.1 Sanathnagar (IE) PO Hyderabad - 500018 By Order of the Board S. SUBRAMANIAN Chief Financial Ofcer & Company Secretary
Notes: 1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER. Proxies, in order to be effective, should be duly stamped, completed, signed and deposited at the Registered Ofce of the Company not less than 48 hours before the meeting. 2. 3. 4. An Explanatory Statement pursuant to Section 173 of the Companies Act 1956, relating to the Special Business to be transacted at the meeting is annexed hereto. The Register of Members and Share Transfer Books will be closed on 29th July, 2010 in connection with the ensuing Annual General Meeting and the payment of Dividend. Dividend recommended by the Board and approved by the Members at the AGM, will be paid on or before 22nd October, 2010. In respect of shares held in physical form, the dividend will be payable to those members whose names appear on the Register of Members on 29th July, 2010. In respect of shares held in electronic form, dividend will be payable to benecial owners of the shares as on 29th July, 2010 as per details furnished by the Depositories for this purpose. In terms of Sections 205A and 205C of the Companies Act, 1956, the amount of dividend remaining unpaid or unclaimed for a period of seven years from the date of transfer to the unpaid dividend account, is required to be transferred to the Investor Education and Protection Fund. Accordingly, in the year 2010-11, the Company would be transferring the unclaimed dividend for the year 2002-03 to the Investor Education and Protection Fund. Members who have not encashed their dividend warrant for the year ended March 31, 2003 or thereafter are requested to write to the Company/Registrars and Share Transfer Agents. Members holding shares in dematerialized mode are requested to instruct their respective Depository Participants regarding Bank Accounts in which they wish to receive the dividend. However, the Bank details as furnished by the respective Depositories to your Company will be used for the purpose of distribution of dividend through Electronic Clearing Service (ECS) as directed by the Stock Exchanges. Your Company/Registrar and Share Transfer Agents will not act on any direct request from Members holding shares in dematerialized form for change/deletion of such Bank details. Members holding shares in physical form are requested to inform the Company/ Registrars and Share Transfer Agents of any change in their addresses immediately for future communication at their correct addresses and Members holding shares in demat form are requested to notify to their Depository Participants. Members holding shares in identical order of names in more than one folio are requested to write to the Companys Share Transfer Agents to enable them to consolidate their holdings into one folio. As required under Clause 49 of the Listing Agreement, brief information of Directors, being appointed/reappointed, is given in the Directors Report.
5.
6.
7.
8. 9.
10. Members requiring any clarication/information on any report/statements, are requested to send their queries to the Registered Ofce of the Company, at least 10 days before the date of the AGM. 11. Members are requested to quote their folio numbers/ DP ID and Client ID numbers in all correspondence with the Company and the Registrar and the Share Transfer Agent.
ANNEXURE TO THE NOTICE

Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956.
Item No.9 The global economy has been undergoing weakness in many parts of the developed world, though the Indian economy appears to be promising. In this background, conditions for raising of nancial resources from overseas markets have not been conducive. Hence, the Company could not raise any amounts based on the similar resolution approved by the shareholders at the last Annual General Meeting. The validity period of the shareholders resolution is one year and hence the need to pass the resolution once again. With a view to augment long term nancial resources of the Company and to meet costs in connection with the expansion, diversication projects and other permissible uses, it is proposed to raise an amount not exceeding US$ 100 millions or Rs.450crores through issue of Foreign Currency Convertible Bonds (FCCBs) and / or American Depository Receipts (ADRs) or Global Depository Receipts (GDRs) and/or Qualied Institutional Placement and/or any other suitable nancial instruments as contained in the Resolution. The FCCBs/ADRs/GDRs/any other nancial instruments including Qualied Institutions Placement, would be listed on the London and/or any other Stock Exchange within or outside India. The Special Resolution gives adequate exibility and discretion to the Board to nalise the terms of the issue at the relevant time in consultation with the lead managers, underwriters, legal advisers and experts or such other authorities as need to be consulted including in relation to the pricing of the issue. The consent of the shareholders, is therefore, sought to authorise the Board to issue the securities in the manner mentioned in this Resolution. The Directors may be deemed to be concerned or interested in the resolution to the extent any securities are issued, held or transferred to the Directors or any company in which any Director is directly or indirectly concerned or interested as a director or shareholder or to any rm in which he/she may be a partner or to any of his/her relatives or entities in which he/she or such relative is directly or indirectly concerned or interested.
14th May 2010 Registered Ofce: Kukatpally, Post Bag No.1 Sanathnagar (IE) PO Hyderabad - 500018
By Order of the Board S. SUBRAMANIAN Chief Financial Ofcer & Company Secretary
REPORT OF THE BOARD OF DIRECTORS AND MANAGEMENT DISCUSSION AND ANALYSIS TO SHAREHOLDERS FOR THE YEAR ENDED 31ST MARCH, 2010
Your Directors have pleasure in presenting their Forty Ninth Annual Report and Audited Accounts for the year ended 31st March 2010. 1. FINANCIAL RESULTS 2009-10 Rupees Lakhs Prot after providing for Depreciation of Rs.1700.79 lakhs (Rs. 1537.24 lakhs) and before extraordinary items and taxation Exceptional Income Prot Before Taxation Taxation: Current Deferred FBT MAT Credit Prot After Taxation Balance brought forward from previous year Balance available for appropriation Appropriations: Proposed Dividend Provision for tax on proposed dividend Transfer to General Reserve Balance carried to Balance Sheet EPS 2. DIVIDEND The Directors recommend the payment of Dividend of Rs. 1.80 per share (Rs.1.70 per share) on the paid up capital of the Company. The dividend of Rs. 13.38 crores (Rs.12.64 crores), if approved by the Shareholders at the FortyNinth Annual General Meeting, will be paid out of the prots for the current year to all Shareholders of the Company whose names appear on the Register of Members as on date of Book Closure. 1338.46 222.30 500.00 8303.87 6.06 1264.10 214.83 370.00 5857.40 3.91 541.00 382.00 4507.23 5857.40 10364.63 509.00 387.01 116.02 (41.00) 2904.38 4801.95 7706.33 2008-09 Rupees Lakhs
3845.62 1584.61 5430.23
3875.41 3875.41
10
3.
OPERATIONS The total turnover of the Company increased to Rs.1065.66 crores (Rs.995.89 crores). The prot before extraordinary items and taxation was Rs.38.46 crores (Rs.38.75 crores). The prot before tax and exceptional income was Rs.54.30 crores (Rs.38.75 crores). The prot after provision for tax of Rs. 5.41 crores and deferred tax of Rs.3.82 crores, was Rs.45.07 crores (Rs. 29.04 crores) resulting in an EPS of Rs.6.06 for the year (Rs.3.91).
DIVISIONAL PERFORMANCE 3.1 Business Operations
53%
29%
51% 28%
21%
18%
3.2 Industrial Explosives The Explosives Division has three main business groups namely : Industrial (Commercial) Explosives and Blast Initiation Systems Group manufactures and markets the full range of packaged & bulk explosive products and blasting accessories including cast boosters for the mining, civil infrastructure and oil exploration sectors. Metal Cladding Group manufactures explosively bonded metals used in a number of industries such as ship building, electrical and chemicals. It has also developed deep surface hardening processes utilised by the mining equipment and railway sectors. Explosives Revenue
350 300 250 200 150 100 50 0
2005-06 2006-07 2007-08 2008-09 2009-10 CAGR 20%
(In ` Crores)
308 277 214
148
169
Special Products Group manufactures high energy materials, specialised products for defence, space and other specialized applications. All operations of commercial explosives, blasting accessories and metal cladding are covered under ISO 9001-2000 quality systems. The Division has embarked on an ambitious plan to bring its activities under the Integrated Management System (IMS) comprising of ISO 9001-2008 Quality Management System, ISO 14001-2004 Environmental Management System and ISO 18001-2007 Occupation Health & Safety Management System over two years. The Division achieved an overall turnover of Rs. 308 crores as against last year's turnover of Rs. 277 crores, representing a growth of 11%. Export turnover increased by 13% this year. Availability of Ammonium Nitrate, a major ingredient in explosives, continued to be critical, warranting import to supplement purchases from domestic sources. Coal Production in India continued on a growth trajectory of around 9% per annum. The Division has achieved the growth of 15% with CIL business during the nancial year and to ensure this growth rate the Division secured conrmed order from Coal India Limited valued at approximately Rs. 150 crores to be executed over the next year. Focus was also given to consolidate the Divisions position in the non-coal sector. This resulted in the increase of value added products turnover by 14%. The Division has added a packaged emulsion explosives manufacturing facility to meet the growing requirement of this kind of product at Rourkela. The small diameter general purpose emulsion explosive has found good acceptance in the civil infrastructure, tunnelling and trade sectors. The product is being used for blasting in tunnels in the North and North-Eastern sectors of India and Bhutan. It has made a mark in the Southern Sector in the civil infrastructure segment.
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The Divisions indigenously designed electronic detonator e-DET has been the choice of many surface coal mines for carrying out cautious blasts to reduce ground vibrations. Taking a technical step, a Fully Field Programmable electronic detonator was designed by the R&D laboratory of the Division to meet customer specic requirements. A new P5 Permitted category explosive product developed for a Coal S&T project mooted by the Explosives & Explosion Laboratory of Central Institute of Mining & Fuel Research (CIMFR), a CSIR laboratory based in Dhanbad, has been commercialized during the year after successful trials in mines of Singareni Collieries Company Ltd, Monnet Ispat & Energy Ltd. and Coal India Limited. Metal Cladding Group Technology using explosives has been adopted for metallurgical bonding of dissimilar metals, like Nickel & Nickel alloys, various grades of HASTELLOY, Copper & Copper alloys, Titanium, Stainless steel, Niobium, Aluminum on carbon steel / alloy steel and other ductile metals. The economic slowdown that led to postponement / reduced capital investments during F 2010 adversely affected this business segment. The Metal Cladding Group posted a turnover of Rs. 585.72 lakhs (Rs. 1014.53 lakhs). Special Products Group (SPG) SPG was created to cater to the use of pyrotechnic and high energy materials for special applications mainly in the Space and Defense sectors. Development and production of new products within time-bound and cost effective parameters were carried out under strict condentially and under controlled environment. The Group executed orders of Rs. 136 lakhs (Rs. 290 lakhs). 3.3 Mining and Infrastructure (IDLconsult) The Division ended the year with a turnover of Rs. 194 crores as against Rs. 211 crores in F 09. The reduction in business for the year was mainly on account of the completion of one large contract at Dudhichua Project of Coal India Limited in the middle of F10. The 36 months contract at Dudhichua was completed in 32 months. The project handled 30 million cubic meters of rock as per the contract successfully. The other large ongoing contract in F10 was at Nigahi Project under Coal India. 11 million cubic meters of rock has been handled during the year.
Mining & Infrastructure Service Revenue
250 200
(In ` Crores)
CAGR 20%
141
211
194
150 100 50 0
72
64
2005-06
2006-07
2007-08
2008-09
2009-10
Mining services were successfully continued in the cluster of iron ore mines in the Barbil, Orissa region and two iron ore mines in Karnataka (NMDC). Manganese Mining is being carried out in the Koira sector of Orissa. The Division started operating its rst Uranium Ore Mining in Jharkhand under Uranium Corporation of India Limited from February 2010. However, strict check on implementation of environmental rules and licensing affected the operations in the iron ore mining areas in Orissa for a major part of the year. Further progress was made in the large infrastructure Project under Aditya Birla Group for their Alumina Plant in Rayagada, Orissa, during the year. The Division is equipped to handle large complex projects. The 3D Laser Scanning Survey equipment for mine planning and control along with VSAT network across the sites, online MIS and SAP linkages have helped improve operational efciency and scheduling. 3.4 Lubricants The overall performance of the Lubricants Division has been positive for the nancial year 2009-10 in terms of volume growth and protability. The turnover of the Division was Rs. 563 crores, 11% over previous year. The automobile industry started off on a sedate note in the beginning of the year, which saw decline or slow growth in sales of heavy commercial vehicles in the rst 2 quarters. The commercial vehicles market witnessed strong growth from Q3 onwards and was back on track from October 2009. Other vehicles (cars, 2-wheelers, tractors) grew well across the year and overall the automobile industry grew by over 25 %. Accordingly, demand conditions in the lube industry picked up from Q3 across automotive and industrial segments.
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The Lubricants Division had aimed to achieve higher volume growth than the industry and grew faster than competition. The key strategies, with a focus on segment wise approach backed by brand building initiatives, were successfully executed across core segments of New Generation Diesel Engine Oils, Motorcycle Oils (4T) and Passenger Car Motor Oils.
Lubricants Revenue
600 500 400 300 200
CAGR 18%
(In ` Crores)
563 507
396 287
420
As part of brand building, in addition to signage and 100 wall painting programs and the Gulf Cup covering 0 the Dirt Track Championship for Motorbikes, which 2005-06 2006-07 2007-08 2008-09 2009-10 are held annually across India, another key initiative was the sponsorship of the Kings XI Punjab Cricket franchise for the Indian Premier League (IPL - 3). The association helped to build brand awareness/recall amongst the cricket loving as well as youth audiences across India. The various related activation programs have enabled the Division to increase market share in the North, especially in Punjab and the Hindi speaking belt. Innovative media campaigns on TV, airports and outdoor launched in December 2009 have further helped to increase the brand visibility and communicate the product benets amongst retail and user industry target groups. The Division continued its ground level initiatives in terms of retailer, mechanic loyalty programs as well as consumer promotions in key product semi knocked-down units (SKUs). The Division also increased sales and market share by breaking into new eet operators and construction customers, medium sized industries and OEMs. New products and promotions aimed at the 3-wheeler commercial segments, tractors and other commercial vehicles recorded increased sales volumes. The Divisions market share in the PCMO segment grew by 1 % with the launch of Gulf Max range of engine oils in the second half of the year. The Division increased market share also in the bazaar market by aggressively growing volumes in North and West regions. Overall the growth in this important segment as per AC Nielsen Retail Audit Report has been one of the highest in the industry. The focus on secondary and tertiary sales with below-the-line initiatives in key geographies helped to achieve faster growth for the Gulf brand in India in 2009-10. Prices of major raw materials like base oils started rming up from May 2009 onwards although at a slower pace after hitting lows in Quarter IV of 2008-09. However, the increasing trend rmed up in Q4. Costs of additives increased sharply due to global supply constraints for chemicals and pricing policy of additive majors. In spite of increased competition, the Division continued to protect and grow its market share in the important segment of New Generation Diesel Engine Oils to retain the overall No. 2 position across India, in the bazaar market, a key segment. Gulf Filters product line recorded excellent growth as the products gained better customer acceptance thanks to the increased distribution network. 3.5 Other Business Groups The 4 Wind Mills (1 MW) located at Ramagiri in Andhra Pradesh generated 4,00,900 units (2,54,414 units). The Hyderabad factory received the benet of the generation through the APTRANSCO grid. 3.6 Exports Explosives Division achieved a turnover of Rs. 46 crores from exports during the nancial year. The Company was also awarded the prestigious CAPEXIL Award for excellence in exports. The Company has an edge in the overseas market through its compre gious CE Marking accorded for products manufactured at Hyderabad and Rourkela Works has established the Companys quality assurance and manufacturing practices. During the year, the exports of the Lubricants Division increased to 3547 KL from 1593 KL in 2008-09, an increase of 122% over previous year. Exports turnover of Lubricant products was Rs. 22.26 crores against Rs.6.48 crores in 2008-09. The Division is exporting its products mainly to Africa and highly competitive Middle-East markets and exploring other regions such as South East Asia for further growth in exports.
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3.7 Property Development Development work at the Bangalore property progressed at a slow pace during the year as the advantages of setting up of SEZ for IT and ITES was found difcult in view of the economic scenario. The Company had earlier obtained approval for setting up of the SEZ at 30 acres out of 40 acres proposed to be developed. The work related to development of land, clearing of old structures and setting up of a large site ofce has been completed. The development of 5.05 milion sq.ft. will also cover hotel, retail outlets, commercial malls and service apartments. Construction work is likely to be commenced during the current year. With regard to the Hyderabad property, GHMC has advised the Company that it proposes to lay a 100 ft. connector road to decongest NH9 (Hyderabad Mumbai) Highway. In addition, the GHMC also wants to widen the existing road on the west side of the property to link Hi-tech City and Balanagar. For the development of the property, the Company is in discussion with GHMC for nalizing the alignment of the 2 roads and also the compensation for such acquisition. The Architects have made draft lay-outs which will be nalised on receipt of nal clearance from GHMC. 4. INTERNAL CONTROL SYSTEMS AND RISK MANAGEMENT Internal Control System: The Company has a well dened control environment and the internal control system provides reasonable assurance to the Company with regard to accomplishment of its business objectives through policies, procedures and guidelines. As part of Companys governance process, the Internal Audit Department provides facilitative and advisory role, on a continuous basis in developing and revising the policies and procedures for all signicant processes such as procurement, inventory management, sales and distribution, nance and accounting, HR, IT etc; in order to support business and operational needs. The Internal Audit Department in consultation with senior executives develops and documents annual audit plan and coverage for signicant areas of operations in order to conduct the audit in an efcient and timely manner. The Company, through its Internal Audit Department, carries out process reviews for critical functions at all locations in accordance with annual audit plan. The observations arising out of audits are periodically reviewed and compliance is ensured by the process owners. The internal audit reports with relevant process owner clarications are submitted to Audit Committee for their review and suggestions. The implementation status of Action Taken Reports (ATR) is reviewed by the Committee on a regular basis and concerns, if any, are reported to the Board. The Internal Audit Department provides facilitative and supportive role on a regular basis in implementing the risk management process and policies in the Company with emphasis to manage risks under changing business and operating conditions. Further, risks identied during the course of internal audits at any process level are properly addressed and reported to the management and steps are taken by the process owners for rectication / mitigation as the case may be. 5. FIXED DEPOSITS Fixed Deposits from the public and the shareholders as on 31st March 2010 amounted to Rs.510.69 lakhs (Rs.140.83 lakhs). At the end of 31st March 2010, 10 deposits amounting to Rs.7.70 lakhs (Rs.38.21 lakhs), which had matured, remained unclaimed. 6. TAXATION Orissa Sales Tax The Writ Petitions led in the Orissa High Court, impleading the other State Governments, Coal India Limited and its subsidiary Companies for grant of stay against the demand notices of the Orissa Sales Tax Authorities relating to 1976-77 to 1989-90 & 1990-91, were dismissed. The Review Petition against the aforesaid Order was also dismissed. The Company is taking necessary steps in consultation with legal counsels. 7. RESEARCH and DEVELOPMENT A new plant for production of cartridged emulsion explosive was commissioned at Rourkela to service the tunneling sector, especially in North / North East sectors of the country. Trials of eld programmable e DET were successful. A new explosive for underground coal mining applications has been commercialized. New products for explosive deep hardening and boostering application have been developed and undergone successful trials. Signicant savings were achieved by cost optimization in bulk emulsion explosives. Several new products were developed for defence and metal cladding markets.
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The Research and Development Centre of the Lubricants Division at Silvassa developed formulations for high performance Passenger Car Motor Oils, Gear and Transmission Oils, and Motor Cycle Oil to meet current and future market requirements. High performance diesel engine oils were validated in commercial vehicles with different after treatment technologies meeting the latest BS IV emission norms. To strengthen the existing product portfolio of the fast growing Construction and Mining segment, tailor made hydraulic and transmission uids were developed. The Industrial portfolio was also expanded by developing metal working uids and rust preventives. R&D activities also continued in developing alternate formulations to improve the exibility in overall operations or to reduce costs. Major achievements for the year include development of high performance Passenger Car Diesel Engine Oil, Gulf MAX TD 15W-40 meeting API CI-4/SL specications and various hydraulic and transmission uids for Construction and Mining Segment, upgradation of Ashok Leyland-Gulf Oil co-branded Gear Oil, Gulf Gear XP Max 90 for extended drain interval and validation of high performance diesel engine oils in BS IV vehicles. 8. SUBSIDIARIES Gulf Oil Bangladesh Limited reported a prot of Rs. 97.51 lakhs (Rs.155.84 lakhs). PT. Gulf Oil Lubricants Indonesia reported a prot of Rs. 55.52 lakhs (45.26 lakhs). Gulf Oil (Yantai) Co. Ltd. reported a prot of Rs. 84.58 lakhs (Rs.151.96 lakhs). Hinduja Infrastructure Limited reported a prot of Rs. 0.07 lakhs (loss of Rs.0.54 lakhs). IDL Buildware Limited incurred a loss of Rs. 180.74 lakhs (loss of Rs.136.10 lakhs) on closure of the factory at Vizag. Gulf Carosserie India Limited reported a loss of Rs. 0.24 lakhs ( prot of Rs.0.61 lakhs ). During the year under review, the Company has fully disinvested the shareholding in IDL Speciality Chemicals Limited which was a 100% subsidiary of the Company, after transfer of the API and formulations businesses to two pharma companies. 9. HUMAN RESOURCES / INDUSTRIAL RELATIONS Divisional HR Departments focused on conducting internal programmes for management personnel as well as workmen. The training programmes were related to areas of advanced product knowledge, creating a selling edge, leadership / competency development, safety and understanding of business process using SAP. The HR focus has been to facilitate and start a number of key initiatives that provide enabling environment to enrich employee experience and enhance performance. To this end, during the year, improvement in the performance management process through sharper KRA / goal setting with long term goals and key strategies have been achieved for monitoring of performance. During the year, 71 workmen availed VRS from Explosives Division at Hyderabad. However, the production levels were maintained by operations streamlining and manpower deployment, process improvement and outsourcing of certain activities. A Wage Settlement was signed for regular workmen of Hyderabad Explosives Division, for a period of 3 years 4 months effective 1.1.2009. Major improvement in productivity is expected with the implementation of this Settlement. During the year under review the employer-employee relations were cordial at all locations. Safety Accident-free man hours achieved by Hyderabad Works was 1.18 m (Previous Year : 1.33 m), Rourkela 1.55 m (Previous Year 1.23 m), Bulk Explosives locations 0.20 m (Previous Year 0.11 m). In Hyderabad factory, Safety, HAZID AND HAZOP training was imparted to around 50 ofcers by DNV Energy (an associate of Norsk Veritas) for safe operations in the factories in the Explosives Division. Also several measures were undertaken by the Hyderabad factory to improve safety in operations through introduction of interlocking systems, trip relay system in automatic coil cutting machines and measures to reduce press res. A campaign was initiated to upgrade safety in Bulk Emulsion manufacture and delivery by introducing further safety measures in pump operations. In this connection, audit of bulk manufacturing facilities at Singrauli and Rourkela was carried out by an expert from UK and his observations actioned.
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11. OUTLOOK FOR THE CURRENT YEAR, OPPORTUNITIES AND THREATS The global economy which witnessed very high degree of uncertainty and volatility during 2008-09 recovered to a great extent in 2009-10. However, vestiges of some of the issues which led to the scal meltdown is still seen in many parts of Europe. Although, our exports during the year declined, domestic markets have been steady if not buoyant in many sectors. The six infrastructure sectors crude, petroleum renery products, coal, electricity, cement and nished steel that constitute 26.68 per cent in IIP, recorded a growth of 5.3 per cent in the period April-February 2009-10, as against 2.9 per cent in the same period last year. Overall the economy is expected to grow at 8 8.5% over the current year (2010 11). In the automotive sector, the growth was 26.4% in sales riding on the Governments stimulus packages. Sales in the domestic market were driven mainly by the car and 2-wheeler segment that posted 25.1% and 26% increases respectively. Ernst and Young forecast for the passenger car market in India is 12% CAGR over the next 5 years from the present gure of 1.89 m units to reach 3.75 m units by 2014. The overall trend of mineral production indicates a growth of 7.9% for the year. The value of mineral production (excluding atomic minerals) during 2009-10 is estimated at Rs.1.28 lakh crores, an increase of 4.6% over the previous year. The total production comprised of fuel minerals 02.2%. Metallic minerals 21.6% and other minerals 16.2%. Minerals play a very important role in the growth of Indian economy. India produces more than 80 minerals, which include fuels, metallic ores, non-metallic minerals, atomic minerals and other minor minerals. Mining and Quarry industry has a share of 1.9% of GDP and contributed signicantly in driving the economic and social growth in India. India at its current place in the development path, requires coal for energy; metal ores, limestone and other minor minerals for infrastructure. The growth is reected in the Index for Industrial production data for Mining industry. The year 2009-10 show a 8% growth over the previous year. As against a 4% CAGR over the last 16 years, we expect the growth rate to be in the range of 8-10% over the next few years. In this background, the outlook of the activities of our Divisions is expected to be as follows: 11.1 Explosives India is estimated to have around 2700 mines (570 : Coal, Metallic Minerals : 640, Non-metallic : 1500) with 90% of them concentrated in 11 states. The Companys 50 years of long relationship, close geographical proximity with its multiple manufacturing locations and through active application support gives the Division a unique position as the Supplier of Choice with its customers. The Division has envisaged a good growth in the coming year based on the ambitious targets set by Planning Commission. The huge requirement of coal, iron ore, limestone ( for cement and steel sectors ) and other strategic minerals, coupled with increased thrust in infrastructure sector will result in increased demand for explosives and blasting accessories as blasting with explosives continues to be the most economic method for excavating coal, minerals and overburden rock encountered in mining industry. A Strategic review of the Explosives business with inputs from an external consultant was carried out. This study covered the size and composition of the market and identied the high growth and high value areas of focus for growth of the business. During the year 2010-11, the Explosives Division will focus on the fast growing Bulk explosives, specialized packaged explosives for niche segments, technologically advanced accessories to provide high value to our customers. The new products developed during 2009-10 will address the needs of increased productivity and safety besides customised blasting solutions to signicantly reduce ground vibrations in the tunneling segment for hydro electric projects and underground coal mines. These have already enhanced our technological leadership and we have started to commercialize these products. The Special Products Group of Explosives Division designs and manufactures initiators and pyrotechnic devices for specialized applications in Defense, Space and other industries. A number of new niche products which have been recently developed are expected to be commercially manufactured after appropriate approvals and qualications.
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11.2 Mining and Infrastructure (IDLconsult) The Mining and Infrastructure Division (IDL Consult) engaged in contract mining and mining related infrastructure projects has segmented the market space and identied several strategic initiatives. A number of large mining opportunities are expected in the coal sector, with the private sector opening up the captive coal blocks as well as new PSU owned coal blocks coming for exploitation. The Divisions experience in handling large mines and the related qualications positions it favourably for undertaking these projects. The current stress levels in the Iron ore mining segment is expected to ease in the rst half of the year leading to opening up of new mines which have been long delayed. The Divisions offer of cost effective end to end mining solution covering mining and mineral processing is expected to get new customers from new mines in the metal segment. The new mines which will open in the near future will require infrastructure such as roads, bridges, rail lines, buildings etc. The Divisions position as a One Stop Solution provider will give it a unique position in providing mining related infrastructure. The Division has Rs. 322 crores of orders booked as at the end of F 10 to be executed in the next two to four years period comprising of coal mining, iron, manganese and uranium ore mining and mine related construction business. With rising demand for coal, especially for thermal power generation, the Division foresees good opportunities in the coal sector for mining contracts with the coal majors like Singareni Collieries and Coal India who are planning more ofoading of their operations. Many coal mines in the private and joint venture sectors are also to start in the next two to three years. All these developments of new mines are expected to increase the demand for contract mining and the Division is working closely with the mine owners / lessees for undertaking these large projects in the coal sector. The Division looks forward to becoming a major 'Mine Developer cum Operator' (MDO). Allocation of a large outlay for infrastructure development by the Government of India has directed the Division's attention to the opportunity in projects relating to the Road sector and other infrastructure Projects. The Division's expertise gained over the last eight years would be a major strength in increasing the business in these areas. The Division has already started a mining related infrastructure contract with the Aditya Birla Group for their new Alumina Project in Orissa. 11.3 Lubricants With the growth trends in the automobile sector and steady demand for lubricants in the domestic market, the Division is looking at achieving double digit growth in volumes and consequent increase in market shares in the core segments. With increasing use of long drain lubricants, major volume growth prospects in the Lubes industry is likely to be limited. It is estimated that the overall volume growth for lubricants will be 2-3% in 2010-11. The Division's strategy is aimed at growing faster than industry and competition, to gain market share. As mentioned above, the growth in longer drain interval products is expected to be higher and in line with the growing preference for products with superior benets, the Division is planning to launch a number of products that deliver longer life to strengthen its position in this area. These introductions will be backed by increased investments in the brand and further upgrading of its bottom line. It is expected that competition levels will increase but opportunities to take market share will also be available. The Division plans to leverage its strengths and build on the recent successes in the core segments to increase market share with continuation of segment wise approach. . The Division will also focus on prospecting more Automobile OEMs (Original Equipment Manufacturers) for factory and service-ll related opportunities. As the industrial and infrastructure sectors are expected to witness growth, opportunities in the B2B segment with industries, eet/construction companies and marine will also be a focus area for the Division in 2010-11. The industrial segment is expected to grow well. The Division is planning to increase its presence with additional manpower and products to cater to this demand. The Lubricants Division will continue to strengthen its position with Ashok Leyland network and customers, with innovative programs and differentiated product offerings, which add value to the customers.
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Base oil and additive prices and other costs are expected to increase given the current trend in base commodity prices, which may necessitate price increases during the year. 12. RISKS AND CONCERNS 12.1 Environmental Risks Regular safety audits are carried out by internal safety audit teams and at regular intervals by external teams. General Safety Directions (GSDs) are strictly enforced in all factories and plants within the factories to ensure minimisation of risk. During the year, a special safety audit has been carried out by a consultant specialising in Explosives at the Rourkela factory and some bulk explosives manufacturing units. All recommendations have been implemented and conrmed by the Consultants. In addition, strict compliance of the requirements of the Explosives Act and Rules are ensured to protect the exposure of adjacent neighbourhoods to the explosives and accessories factories from undue risk. Operations are carried out to comply with emission, waste water and waste disposal norms of the local authorities of the respective factories. 12.2 Operational Risk Licensing The Explosives Division operates in a highly regulated and licensed industry and amendment / revision in licenses are required based on expiry of the licenses and change in production capacity and process. Amended / revised licenses for increase in license capacity for any of the explosives products may get delayed temporarily or for long periods thereby limiting our ability to cater to any increase in demand for these products from our customers. Non availability of licenses / approvals for expansion of new products could affect our future growth and expansion plans. The Division, therefore, ensures that approvals are applied for well in advance to avoid launch dates / export of products. Location Risks Manufacturing facilities, for our Industrial Explosives Division, are spread across six states. The optimum locations for packed explosives unit is determined by the customer location and the source of raw material. The advantage of the location of bulk explosives units is optimized to be close to the customer location. With changes in sources of raw material our location may not continue to be optimal in comparison with the competition. Moreover, if there is a consolidation in the industry, and the size of each manufacturing units go up, we may be disadvantaged by being sub-optimal. Further since the lubricants are manufactured at one location and distributed throughout India, the cost of transportation and storage are higher in comparison to some of our competitors operations. Raw Materials Many of the inputs of the three major Divisions are imported, availability of which is affected by global market situations. Also, prices of such items are volatile. Increases in Base Oils due to increases in crude oil rates. Timely availability of raw materials is critical for continuous plant operations. The Company seeks to mitigate the risk by entering into long-term relationship with global raw material suppliers, with suitable escalation clauses to ensure regular supplies. 12.3 Market Risks: Markets All the Divisions of the Company operate in highly competitive markets where competition from all India players as well as regional players is high. Of which, two major divisions, namely Industrial Explosives and IDLconsult Divisions operate in tender-driven markets, sometimes with onerous and unreasonable performance clauses. In the Lubes Division, increased competition and entry level pricing by new entrants leading to price undercutting could affect revenues substantially. Therefore, there is a risk of cost increases, especially of petro product inputs, not possible to be passed on to ultimate consumers. The Company is in direct contact with the industry associations to ensure that there is a suitable consensus on pricing policies by the majority of the producers. Any reversal in growth trend in the economy in general and weak monsoons in particular, could affect demand in the automobile industry and consequent deceleration in manufacturing industry. This is likely to have an adverse impact on the lube industry. In order to minimise such adverse impact, the Lubes Division is taking various product and marketing initiatives. Since the Q4 of the previous year, the base oil prices have again seen signicant increases on account of high international rates. Given this trend of increasing base oils cost, if the cost increases cannot be passed on fully or recovered from the consumer, we may see an erosion of margins across the industry. Increased competition levels from the market leader to retain volumes and new entrants may lead to aggressive pricing and discounts.
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Concentration of Customers The IDLconsult Division which currently undertakes mining services in coal, iron ore and limestone sectors, is exposed to business risks on account of non-availability of environmental clearances in time and lack of adequate infrastructure for dispatch of ores from the mine, especially during the rainy seasons. In view of this, detailed review of approvals and quality of infrastructure is carried out before undertaking mining service contracts. Both the Explosives and Contract Divisions are operating in the mining and infrastructure sectors, dominated by the PSUs, where the tendering system is in vogue, with the attendant risks. Missing L1 status in these tenders might result in loss of business opportunities for extended periods for the relevant tender(s). 12.4 Financial Risks: Currency Value and Interest Rate Fluctuations Financial risk management is done by the Finance Department at the various business Divisions and at Corporate Ofce under policies approved by the Board of Directors. Policies for overall foreign exchange loss risks and liquidity are regularly reviewed based on emerging trends. Interests risks arising out of nancial debt, are normally done at xed rates or linked to LIBOR and appropriate Bank lending rates. Adverse movement of Rupee from current levels may further impact base oil and ammonium nitrate rates. Credit Risk The Company sells its products through the customary trade channels, with the attendant risk of payment delays and defaults. To mitigate the risk, a credit risk policy is also in place to ensure that sale of products are made to customers after evaluation of their ability to meet nancial commitments through allotment of specic credit limits to respective customers. Credit availability and Exposure (with the trade channels) is another area of risk. Liquidity Risk Liquidity conditions in the money market and the commercial interest rates may impact the capability of distribution channel of the Lubes Division to support growth in business. Steps are being taken up for tieup with nancing partners to support distributors. All the three major Divisions operate in working capital intensive industries. The Company realizes that its ability to meet its obligations to its suppliers and others is linked to timely collection of receivables and maintaining a healthy credit rating. Review of working capital constituents like inventory of raw materials, nished goods and receivables are done regularly by the respective Divisions and Corporate Finance. 12.5 Legal and Statutory Risks: Contractual Liability All major contracts are reviewed / vetted by the in-house Legal Department before the same are executed. In addition, the Company engages the services of reputed independent legal counsels, on need basis. In matters of tax law and other statutory obligations the outcome of litigation cannot always be predicted. Hence, appropriate nancial provisions, insurance policies and credit lines are taken to limit the risk for the Company. 12.6 IT Risks The Company is dependent on intra-ofce and inter-ofce networks, as well as several business softwares operated from the Corporate Ofce and the business Divisions. Failure of system networks and consequential loss of business is attempted to be minimised by critical systems being operated on secured servers with regular maintenance, regular back up and off-site storage of data, selection of suitable rewall and virus protection systems / software. 12.7 Other Risks Various assets of the Company including plant and machinery, stocks, buildings, furniture, ofce equipment and computer systems could suffer damages / loss owing to occurrences like re, accidental mishaps, etc. The Company has taken insurance covers to protect these assets from possible damage / loss. While the Company undertakes regular review of remuneration structures, threat of poaching by competitors, especially, new entrants in the industry of key persons is possible. Such actions could lead to temporary drop in efciency and performance in the specic areas. 13. DIRECTORS During the year, Mr. P. N. Ghatalia, Chiarman of the Audit Committee passed away on August 13, 2009. Your Board of Directors wishes to place on record its appreciation for the contributions made by late Mr. P. N. Ghatalia during his over 8 years tenure as Director and Chairman of the Audit Committee of the Board of the Company.
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The Board has during the year, appointed Ms. Kanchan Chitale w.e.f. 5th October, 2009, in the casual vacancy caused by the sad demise of Mr. P. N. Ghatalia. Ms. Kanchan Chitale has also been appointed as the Chairperson of the Audit Committee. Ms. Chitale is a Fellow Member of the Institute of Chartered Accountants of India ( ICAI ). She has experience of 20 years in internal and management audits of corporate enterprises and specialized / concurrent audits and other assignments of commercial banks and nancial institutions. She has been a governing body member of IIM-Ahmedabad Alumni Association ( 1990-95 ), Ex-Vice President of Association of Women Industrialists of Maharashtra ( 1992-93 ) and is a member of Bombay Chartered Accountants Society and Institute of Internal Auditors. Mr. Ashok Kini, Mr. Vinod K. Dasari, Ms. Vinoo S. Hinduja and Mr. V. Ramesh Rao in accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company, retire by rotation at the 49th Annual General Meeting of the Company and are eligible for reappointment. Prole of members of the Board of Directors being appointed / reappointed : Ashok Kini Mr. Ashok Kini graduated from Mysore University in 1965 majoring in Science and obtained a Masters degree in English Literature from Madras Christian College, Chennai before joining State Bank of India ( SBI ) as Probationary Ofcer in 1967 and reached the position of Managing Director (National Banking) of SBI. During his career, Mr. Ashok Kini was responsible for the Banks IT plans, from concept and RFP to execution and vendor management, domestic distribution, retail business, consumer banking, marketing/brand management, etc. Vinod K Dasari Mr. Vinod K Dasari is Wholetime Director of Ashok Leyland Ltd., heading manufacturing, domestic marketing, strategic sourcing and corporate quality engineering divisions. Mr. Vinod K. Dasari commenced his career with General Electric Company, USA in 1986 and worked for companies such as Timken USA, Timken India, Cummins India Limited and is credited with bringing about signicant changes in these organizations and leading them into protability after a period of sustained losses. Vinoo S Hinduja Vinoo S Hinduja is a degreeholder in Business Administration from UK and a Diploma holder in Health Policy Management from USA. She has completed her internship and training in Finance and Banking at the Credit Suissee Bank, Geneva and Chase Manhattan Bank, London and in Hospital Administration and Management from Cromwell Hospital, London. She is also a member of the National Health and Education Society, Hinduja National Hospital in Mumbai. V. Ramesh Rao Mr.V.Ramesh Rao is a postgraduate in Mechanical Engineering with specialization in Industrial Tribology from IIT, Madras and is a Presidents Gold Medalist. He has been working in the lubricants industry since 1984 in various companies such as Lubrizol India Limited, Gulf Lubricants Systems and in Gulf Oil International companies in China, Korea, Taiwan and Philippines. He is a member of the Gulf Oil Core Technical Team and assisted Gulf Oils international operations and handles the operations in the Asia Pacic Region. Names of companies in which the Directors, proposed to be appointed / reappointed at the ensuing AGM, hold positions of directorship and the membership/chairmanship of committees of the Board, are as per the Annexure to the Report on Corporate Governance. 14. STATUTORY INFORMATION Information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and the Statement under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees ) Rules, 1975 as amended, are annexed to this full Report. However, as per the provisions of Sec.219 (1) (b) (iv) of the Companies Act, 1956, the Report and Accounts are being sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Company. 15. INFORMATION ON STOCK EXCHANGES The Equity shares of the Company are listed on Bombay Stock Exchange Limited and the National Stock Exchange of India Limited and the Listing Fees have been paid to them uptodate.
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16. CORPORATE GOVERNANCE A detailed report on the subject forms part of this report. The Statutory Auditors of the Company have examined the Company's compliance and have certied the same as required under the SEBI Guidelines. Such certicate is reproduced in this Annual Report. 17. DIRECTORS' RESPONSIBILITY STATEMENT The Directors, on the basis of information and documents made available to them, conrm that: a. b. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures. They have selected such accounting policies and applied them consistently and made judgments and estimates that are 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 nancial year and of the prot or loss of the Company for that period. They have taken proper and sufcient care for the maintenance of the adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. They have prepared the annual accounts on a going concern basis.
c.
d.
18. SUBSIDIARY COMPANIES The Report and Accounts of the Subsidiary Companies are annexed to this Report along with the statement pursuant to Section 212 of the Companies Act, 1956. However, in the context of mandatory requirement to present consolidated position of the Company including subsidiaries, at the rst instance, members are being provided with the Report and Accounts of the Company treating these as abridged accounts as contemplated by Section 219 of the Companies Act, 1956. Members desirous of receiving the full Report and Accounts of the subsidiaries will be provided the same on receipt of a written request from them. 19. AUDITORS M/s Deloitte Haskins and Sells and M/s Shah and Co., Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received conrmation that their appointment will be within the limits prescribed under Section 224(1B) of the Companies Act, 1956. ACKNOWLEDGEMENTS Your Directors would like to express their appreciation for the assistance and co-operation received from the nancial institutions, banks, Government of India and various State Government authorities and agencies, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services of all employees of the Company.
For and on behalf of the Board of Directors
Place : Mumbai Date : 14th May 2010
S. G. HINDUJA Chairman
CAUTIONARY STATEMENT
Statement in this Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company's operations include global and Indian demand supply conditions, nished goods prices, raw material availability and prices, cyclical demand and pricing in the Company's principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the Company conducts businesses and other factors such as litigation and labour negotiations. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent development, information or events or otherwise.
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REPORT ON CORPORATE GOVERNANCE

1. COMPANYS PHILOSOPHY ON CORPORATE GOVERNANCE The Company will continue to be in the forefront of its diverse interests and sustain growth activities through emphasis on TQM, adoption of emerging technologies, innovation through research, good corporate governance, adherence to fair business practices and effective use of physical, technological, R & D, information and nancial resources, thus fullling the aspirations of customers, shareholders, employees and nanciers. 2. BOARD OF DIRECTORS (A) Composition: The Board of Directors of the company headed by a Non-executive Chairman consists of the following Directors as on 31st March, 2010 categorised as indicated below : (i) Chairman (Non-executive) Mr. Sanjay G Hinduja (a) Promoter Group: Mr. Sanjay G Hinduja Mr. Ramkrishan P Hinduja Ms. Vinoo S Hinduja Mr. V.Ramesh Rao Mr. Vinod K Dasari Mr. Abin K.Das Alternate Director to Mr. Sanjay G Hinduja Mr. Alain V Dujean Alternate Director to Mr. Ramkrishan P Hinduja Mr. Prabal Banerjee Alternate Director to Ms. Vinoo S Hinduja Mr. K N Venkatasubramanian Mr. H C Asher Mr. M.S.Ramachandran Mr. Ashok Kini Mr. Prakash Shah Ms. Kanchan Chitale * Mr. Subhas Pramanik
(ii) Non-Executive Directors:
(b) Independent :
(iii) Managing Director:
* Appointed by the Board of Directors on 5th October 2009 in the casual vacancy caused by the sad demise of Mr.Pravin N Ghatalia, Independent Director and Chairman of the Audit Committee.
(B) Attendance of each director at the Board Meetings and the last AGM and details of membership of Directors in other Boards and Board Committees: Name of the Director No. of Board Meetings Attended 6 3 7 4 4 8 7 8 8 4 4 Whether attended last AGM Yes Yes Yes Yes NA Yes Yes Yes Yes No Yes No. of Memberships of other Boards as on 31/03/10@ 10 6 7 NA 1 19 6 3 5 3 6 No. of Memberships of other Committees* 2 3 NA 5 1 3 No. of Chairmanships in other Committees* 2 NA 3 1 -
Sanjay G Hinduja Ramkrishan P Hinduja K N Venkatasubramanian Pravin N Ghatalia (upto 13.8.2009) Kanchan Chitale (since 5.10.2009) Hemraj C Asher M.S.Ramachandran Ashok Kini Prakash Shah Vinoo S Hinduja Vinod K Dasari
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Name of the Director
No. of Board Meetings Attended 5 8 2 3 4
Whether attended last AGM Yes Yes NA NA Yes
No. of Memberships of other Boards as on 31/03/10@ 3 4 23 11 8
No. of Memberships of other Committees* 3 2
No. of Chairmanships in other Committees* 2
V Ramesh Rao S Pramanik A K Das Alain Vincent Dujean Prabal Banerjee
@includes private limited companies and companies registered outside India. *As per explanation to Clause 49.I(C), only Audit Committee and Shareholders Grievance Committee have been considered for the purpose.
Board Agenda Meetings are governed by a structured agenda. The Board members, in consultation with the Chairman, may bring up any matter for consideration of the Board. All major agenda items are backed by comprehensive background information to enable the Board to take informed decisions. Agenda papers are generally circulated seven days prior to the Board Meeting. Information placed before the Board Apart from the items that are required to be placed before the Board for its approval, the following are also tabled for the Boards periodic review / information: Quarterly performance against plan, including business-wise nancials in respect of revenue, prots, cash ow, balance sheet, investments and capital expenditure. Periodic summary of all long term borrowings and applications thereof. Internal Audit ndings (through the Audit Committee). Status of safety, security and legal compliance. Status of business risk exposures, its management and related action plans. Show Cause, demand and adjudication notices, if any, from revenue authorities, which are considered materially important. Information on strikes, lockouts, retrenchment, fatal accidents, etc., if any Write offs / disposals (xed assets, inventories, receivables, advances, etc.) (C) Brief proles of the Directors being appointed/reappointed have been given in the Directors Report. (D) Details of Board Meetings held during the Year 2009-10: Date of the Meeting 17.04.2009 18.05.2009 25.06.2009 31.07.2009 05.10.2009 29.10.2009 28-29.1.2010 08.02.2010 (E) Code of Conduct The Board of Directors has laid down Code of Conduct for all Board Members and Senior Management of the Company. The text of the Code of Conduct is uploaded on the website of the Company www.gulfoilcorp.com. The Directors and Senior Management personnel have afrmed compliance with the Code applicable to them during the year ended March 31, 2010. The Annual Report of the Company contains a Certicate duly signed by the Managing Director in this regard. Board Strength 12 12 12 12 12 12 12 12 No. of Directors Present 11 10 11 12 11 11 11 8
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(F) CEO & CFO Certication The Managing Director and the Chief Financial Ofcer have certied to the Board of Directors of the Company that: (a) They have reviewed the nancial statements and the cash ow statement for the year ended 31st March 2010 and that to the best of their knowledge and belief: (i) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading.
(ii) These statements together present a true and fair view of the Companys affairs, and are in compliance with the existing accounting standards, applicable laws and regulations. (b) There are, to the best of their knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Companys Code of Conduct. (c) They accept responsibility for establishing and maintaining internal controls for nancial reporting and that they have evaluated the effectiveness of internal control systems of the Company pertaining to nancial reporting; and that they have disclosed to the Auditors and the Audit Committee, deciencies in the design or operation of internal controls, if any, of which they are aware and the steps they have taken or propose to take to rectify these deciencies. (d) They have indicated to the Auditors and the Audit Committee: (i) signicant changes in internal control over nancial reporting during the year;
(ii) signicant changes in accounting policies during the year and that the same have been disclosed in the notes to the nancial statements: and (iii) instances of signicant fraud of which they have become aware and the involvement therein, if any, of the management or an employee having a signicant role in the companys internal control system over nancial reporting. (G) Shares held by non- executive Directors Mr. H C Asher held 3750 (of Rs. 2/- each) equity shares of the Company as on 31.03.2010 and none of the other non-executive Directors holds any shares in the Company. 3. AUDIT COMMITTEE The Audit Committee was constituted in February 1987. The current terms of reference are in full conformity with the requirements of Section 292A of the Companies Act, 1956. Composition Chairperson : Ms. Kanchan Chitale (since 5th October 2009) Members : Mr. Hemraj C Asher Mr. Ashok Kini
Meetings and Attendance: Audit Committee Meetings held during the year 2009-10 and attendance details: Date of the Meeting 17.04.2009 18.05.2009 25.06.2009 10.07.2009 31.07.2009 29.10.2009 29.01.2010 08.02.2010 Committee Strength 3 3 3 3 3 3 3 3 No. of Directors present 3 3 3 3 3 3 3 3
Company Secretary / Deputy Company Secretary / Assistant Company Secretary of the Company is the Secretary to the Committee. Mr. S Pramanik, Managing Director was invitee for all the Audit Committee Meetings. Chief Financial Ofcer and Deputy General Manager (Internal Audit) attended all the meetings.
24
The Statutory Auditors of the Company were invited to join the Audit Committee in all the meetings for discussing the quarterly unaudited nancial results and the Annual Audited Accounts before placing it to the Board of Directors. The Audit Committee held discussions with the Statutory Auditors on the yearly Audit Plan, matters relating to compliance of Accounting Standards, their observations arising from the annual audit of the Companys Accounts and other related matters. 4. 5. SUBSIDIARIES There are no material non-listed Indian subsidiaries of the Company. REMUNERATION COMMITTEE The terms of reference are review of the compensation policy for the Executive Directors. Accordingly, they are authorised to negotiate, nalise and approve the remuneration for Managing Director/ Whole-time Directors on behalf of the Company. CompositionChairman : Member : Mr.Prakash Shah* (effective from 29th October 2009) Mr.H C Asher Mr. M S Ramachandran Ms.Vinoo S Hinduja
*Appointed by the Board of Directors consequent to the sad demise of Mr.Pravin N Ghatalia, Chairman of the Remuneration Committee.
Meetings and Attendance Date of the Meeting
25.06.2009
Remuneration policy i) For Managing Director
Committee Strength 4
No. of Directors present 4
The total remuneration subject to shareholders approval consists of: ii) a xed component consisting of salary and perquisites a variable component by way commission as determined by the Board within the limits approved by the shareholders. An amount of Rs. 20,000/- for each Board Meeting, Audit Committee Meeting and Meeting of the Committee of Directors, Rs.5,000/- for each Remuneration Committee, Rs. 2,000/- for each Share Transfer Committee Meeting and Rs.12,000/- for each meeting of the Safety Review Committee and Investment Appraisal & Project Review Committee, Rights Issue Committee and Committee of Directors-Legal Issue, plus reimbursement of actual travel and incidental expenditure not exceeding Rs.1,500 for Share Transfer Committee Meetings and Rs.5,000/- for Meetings of the Board and other Committees, is paid (as per the provisions of Section 309, 310 of the Companies Act, 1956). Non-executive Directors (Sitting Fees only) Mr. Sanjay G. Hinduja Mr. Ramkrishan P. Hinduja Mr. K. N. Venkatasubramanian Mr. Pravin N. Ghatalia (upto 13th August, 2009) Ms. Kanchan Chitale (since 5th October, 2009) Mr. H C Asher Mr. M.S.Ramachandran Mr. Ashok Kini Mr. Prakash Shah Ms. Vinoo S. Hinduja Mr. Vinod K. Dasari Mr. V.Ramesh Rao Mr. Abin K. Das Mr. Alain V. Dujean Mr. Prabal Banerjee Total Rs. in lakhs 1.32 0.60 1.40 1.85 1.40 3.61 1.81 3.28 1.60 0.92 0.94 1.00 0.40 0.60 1.09 21.82
(a) For Non executive Directors
25
(b) For Executive Directors (Rs. in Lakhs) Managing Director Salaries Commission Contribution to Provident Fund and Superannuation Fund Benets Total 56.63 9.84 9.56 3.47 79.50
Having regard to the fact that there is a global contribution to Gratuity Fund, the amount applicable to an individual employee is not ascertainable and accordingly, contribution to Gratuity Fund has not been considered in the above computation. Managing Director is under contract of employment with the company with 6 months notice period from either side. There is no severance fee payable to the Executive Directors. The Company does not have any stock option scheme. 6. SHAREHOLDERS / INVESTORS GRIEVANCE COMMITTEE Composition : 3 Directors Chairman Members : Mr. Ashok Kini : Mr. S Pramanik Mr. Vinod K Dasari
The Shareholders / Investors Grievance Committee specically looks into redressing of shareholders/ investors complaints in matters such as transfer of shares, non-receipt of declared dividends and ensure expeditious share transfer process. Number of Shareholders Complaints received so far: 79 Not solved to the satisfaction of the shareholders: NIL 7. GENERAL BODY MEETINGS Location, time and venue where last three AGMs held : Financial Year 2008-09 2007 - 08 2006 - 07 Special Resolutions Special resolutions were passed at the annual general meetings as under: i) ii) iii) AGM held on 28th September 2007 5 Special resolutions AGM held on 25th September 2008 2 Special resolutions AGM held on 31st July 2009 2 Special Resolutions Location of AGM Kohinoor, Hotel Taj Krishna, Banjara Hills, Hyderabad Grand Ball Room, Hotel Taj Krishna, Banjara Hills, Hyderabad The Emerald, Hotel Taj Krishna, Banjara Hills, Hyderabad Date & Time of AGM 31.07.2009, 3.30 p.m. 25.09.2008, 2.30 p. m. 28.09.2007, 2.30 p. m.
No Special resolution that requires approval through postal ballot was passed in the previous year. No Special resolution which requires approval through postal ballot is proposed to be conducted at the ensuing AGM. 8. DISCLOSURES Related Parties There were no materially signicant related party transactions which may have potential conict with the interests of the Company at large. Conrmation has been placed before the Audit Committee and the Board that all related party transactions during the year under reference were in the ordinary course of business and on arms length basis. Transactions with related parties are disclosed in Note. 22 of the Schedule 18 to the Accounts in the Annual Report. BOARD DISCLOSURES - Risk Management The Company has laid down procedures to inform the Board of the Directors about the Risk Management and its minimization procedures. The Audit Committee and the Board of Directors review these procedures periodically.
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9.
STRICTURES AND PENALTIES There were no strictures or penalties imposed on the Company by either Stock Exchanges or SEBI or any Statutory Authority for non-compliance on any matter related to Capital Market during the last three years.
10. MEANS OF COMMUNICATION The quarterly and half yearly reports, are normally published in Business Standard and in the local newspaper Andhra Prabha and are displayed on the Website of the Company www.gulfoilcorp.com. During the year no presentations were made to institutional investors or to the analysts. The Management Discussion and Analysis Report forms part of the Directors Report. 11. GENERAL SHAREHOLDERS INFORMATION Annual General Meeting : Date Venue Time 23rd September, 2010 Emerald-1, Hotel Taj Krishna, Banjara Hills, Hyderabad - 500034. 2.30 P.M.
Financial Calendar : Unaudited results for 1st quarter of next Financial Year by 14.08.2010 Unaudited results for 2nd quarter of next Financial Year by 15.11.2010 Unaudited results for 3rd quarter of next Financial Year by 15.02.2011 Audited results for next Financial Year by 30.05.2011 29th July, 2010 By 22nd October, 2010 Bombay Stock Exchange Limited Code 506480
Date of Book Closure Date of Dividend Payment Listing of Equity Shares
National Stock Exchange of India Ltd Code GULFOILCOR Market Price Data (in Rupees): in respect of the Companys shares on BSE, monthly high and low during the last Financial Year Month & Year April, 2009 May, 2009 June, 2009 July, 2009 August, 2009 September, 2009 October, 2009 November, 2009 December, 2009 January, 2010 February, 2010 March, 2010 High (Rs.) 44.90 60.95 77.30 62.95 78.15 88.80 89.05 122.30 114.50 112.75 101.00 97.00 Low (Rs.) 27.40 36.85 50.55 45.75 58.95 73.00 71.15 71.05 93.65 86.00 84.00 82.20
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MONTHLY CLOSING OF GOCL SHARE PRICE
BSE SENSEX vs SHARE PRICE OF GOCL

200 180 160 140 120 100 80 60 40 20 0
Ap ril M ay Ju ne Ju ly t Se pt em be r O ct ob er N ov em be r D ec em be r Ja nu ar y Fe br ua ry Au gu s M ar ch
18000 15000 12000 9000 6000 3000 0
GOCL
2009-10
BSE
BSE SENSEX Vs GOCL SHARE PRICE

RATE OF GROWTH OF MONTHLY CLOSING PRICES OF GOCL & SENSEX
(assuming base as on 1st April 2009 as 100)
450 400 350 300 250 200 150 100

ril ay ly ne st r er y y r r be be be ar Ap Ju gu ob M ar Ju nu em em Au em ru ct Fe b pt ov ec Ja O M ar ch
GOCL BSE
Se
2009-10
Distribution of Shareholding as on 31.03.2010 Paid up Share Capital Up to 5000 5001 10000 10001 20000 20001 30000 30001 40000 40001 50000 50001 100000 100001 and above Total Shareholders No. 60351 483 207 69 33 32 48 53 61276 % 98.49 0.79 0.34 0.11 0.05 0.05 0.08 0.09 100.00 No. 7593742 1757716 1499162 861697 593448 714263 1825152 59513555 74358735 No. of Shares
% 10.21 2.36 2.02 1.16 0.80 0.96 2.45 80.04 100.00
28
MONTHLY CLOSING OF BSE SENSEX
Pattern of Shareholding as on 31.03.2010 Category Promoters 1 Public : Institutional Investors: Mutual Funds & UTI, Banks, Financial Institutions & Others Private Corporate Bodies Indian Public NRIs/ OCBs FIIs GRAND TOTAL 8 871 60141 249 6 61276 4398590 15282701 15525082 2422151 269796 74358735 5.92 20.55 20.88 3.26 0.36 100.00 No. of Holders No. of Shares 36460415 % of Share-holding 49.03
Dematerialisation of shares and liquidity 71837247 shares were dematerialized amounting to 96.60% of the total paid up capital. Shares of the Company are listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited and frequently traded on both the Exchanges. Details of Share Transfer System: The authority relating to approval of share transfers has been delegated to the Share Transfer Committee consisting of Mr. Ashok Kini, Chairman, Mr. S Pramanik and Mr. Vinod K Dasari. The Committee has met four times during the year for approving transfers, transmissions, etc. Operations with regard to dematerialization are being complied with, in conformity with the regulations prescribed. The name and designation of Compliance Ofcer : Mr. S Subramanian, CFO & Company Secretary The Registrar and Share Transfer Agents are handling all the share transfers and related transactions. As on March 31, 2010 there were no requests pending for demats / overdue beyond the due dates. Plant Locations: A. Explosives : Explosives Division, Hyderabad, AP. Explosives Division, Rourkela, Orissa. Bulk Plants at Singrauli, Korba, Rajrappa, Ramagundam Dhanbad and Udaipur. Lubes Division, Silvassa
B.
Lubricants
Details of Addresses for Correspondence: Registered Ofce : Gulf Oil Corporation Limited Kukatpally, Sanathnagar (IE) PO HYDERABAD 500 018 Ph 91 40 2381 0671 79 Fax 91 40 2381 3860 E-mail : secretarial@gulfoilcorp.com www.gulfoilcorp.com Sathguru Management Consultants Private Limited Plot No. 15, Hindi Nagar, Behind Saibaba Temple Panjagutta, Hyderabad 500 034 Ph 91 40 2335 6507/ 6975 Fax 91 40 2335 4042 sta@sathguru.com IN E 077F01027 2009-10: 90% 2008-09: 85% 2007-08: 75%
Registrar and Share Transfer Agents
ISIN for the Equity Shares Dividend for the last three years
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12. NON MANDATORY REQUIREMENTS The Board has constituted a Remuneration Committee and the terms of reference of this Committee are given in para 5 above. Whistle Blower Policy The Company is in the process of establishing a structured mechanism for employees to report to the management, concerns about unethical behaviour or violation of the Code of Conduct.
ANNEXURE
DIRECTORSHIPS IN OTHER COMPANIES

List of outside Company Directorships: Ashok Kini 1. UTI Trustee Company Pvt. Ltd. 2. IndusInd Bank Limited 3. Financial Information Network & Operations Limited Vinod K Dasari 1. Ashok Leyland Limited 2. Automotive Coaches & Components Ltd. 3. Gulf Ashley Motor Ltd. 4. Irizar TVS Ltd 5. Lanka Leyland Limited 6. Ashok Leyland UAE LLC. Chairman of the Board of Directors of other Indian Companies 1) Automotive Coaches & Components Ltd. 2) Gulf Ashley Motor Ltd. Vinoo S Hinduja 1. Hinduja Ventures Ltd. 2. Hinduja Group India Ltd. 3. Hinduja Global Solutions Ltd. V. Ramesh Rao 1. Jaykamal Coco Care Pvt. Ltd. 2. Jaykamal Consultancy Services Pvt. Ltd. 3. Gulf Ashley Motor Ltd.
Chairman/Member of the Committees of Directors of other Companies in which he/she is a Director* Audit Committee: 1) IndusInd Bank Ltd. 2) UTI Trustee Company Pvt. Ltd. 3) Financial Information Network & Operations Limited * As per explanation to Clause 49.I(C), only Audit Committee and Shareholders Grievance Committee have been considered for the purpose. -
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DECLARATION ON CODE OF CONDUCT
This is to conrm that the Board has laid down a Code of Conduct for all Board Members and senior management personnel of the Company. The code of conduct has also been posted on the website of the Company. It is further conrmed that all Directors and Senior Management personnel of the company have afrmed compliance with the Code of Conduct of the Company for the nancial year ended on March 31, 2010, as envisaged in Clause 49 of the Listing Agreement with stock exchanges.
Place : Hyderabad Date : May 14, 2010
S. PRAMANIK Managing Director
AUDITORS CERTIFICATE
To the Members of Gulf Oil Corporation Limited
1.
We have examined the compliance of conditions of Corporate Governance by Gulf Oil Corporation Limited for the year ended 31st March, 2010 as stipulated in Clause 49 of the Listing Agreement of the said Company with the stock exchanges. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring compliance of the conditions of the Certicate of Corporate Governance as stipulated in the said Clause. It is neither an audit nor an expression of opinion on the nancial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with conditions of the Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement. We state that such compliance is neither an assurance as to the future viability of the Company nor the efciency or effectiveness with which the management has conducted the affairs of the Company.
2.
3.
4.
For Deloitte Haskins & Sells, Chartered Accountants (Registration No.008072S)
Place : Hyderabad. Date : May 14, 2010
K. RAJASEKHAR Partner M.No. 23341
31
AUDITORS REPORT
To the members of Gulf Oil Corporation Limited 1. We have audited the attached Balance Sheet of Gulf Oil Corporation Limited (the Company) as at 31st March, 2010, the Prot and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto, in which are incorporated the Returns from the Lubricants Branch audited by other auditors. These nancial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these nancial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the nancial statements. An audit also includes assessing the accounting principles used and the signicant estimates made by the Management, as well as evaluating the overall nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specied in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: (i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
2.
3.
4.
(ii) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the Lubricants Branch audited by other auditors; (iii) the reports on the accounts of the Lubricants Branch audited by other auditors have been forwarded to us and have been dealt with by us in preparing this report; (iv) the Balance Sheet, the Prot and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and the audited Branch Returns; (v) in our opinion, the Balance Sheet, the Prot and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956; (vi) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; (b) in the case of the Prot and Loss Account, of the prot of the Company for the year ended on that date and (c) in the case of the Cash Flow Statement, of the cash ows of the Company for the year ended on that date. 5. On the basis of the written representations received from the Directors as on 31st March, 2010 taken on record by the Board of Directors, we report that none of the Directors is disqualied as on 31st March, 2010 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956. For Deloitte Haskins & Sells Chartered Accountants (Registration No.008072S) K. RAJASEKHAR Partner (Membership No.23341)
Place: Hyderabad Date: 14th May 2010
32
ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 3 of our report of even date) (i) Having regard to the nature of Companys business/activities/result, clauses (x), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of CARO are not applicable.
(ii) In respect of its xed assets: (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the xed assets. (b) The xed assets were physically veried during the year by the Management in accordance with a regular programme of verication which, in our opinion, provides for physical verication of all the xed assets at reasonable intervals. In respect of assets physically veried during the year we are informed that the management is in the process of reconciling the same with book records. (c) The xed assets disposed off during the year, in our opinion, do not constitute a substantial part of the xed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company. (iii) In respect of its inventories: (a) As explained to us, inventories were physically veried during the year by the management at reasonable intervals. (b) In our opinion and according to the information and explanations given to us, the procedures of physical verication of inventories followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business. (c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verication. (iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, rms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. (v) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and xed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system. (vi) As explained to us and according to the information and explanations given to us, there are no transactions that need to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956. Accordingly paragraph 4(v)(b) of the CARO is not applicable. (vii) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal. (viii) In our opinion the Company has an adequate internal audit system commensurate with the size and nature of its business. (ix) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 in respect of manufacture of lubricants and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the Company. (x) According to the information and explanations given to us in respect of statutory dues: (a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.
33
(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2010 for a period of more than six months from the date they became payable. (c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited as on 31st March, 2010 on account of disputes are given below: Name of the Statute Central Excise Act, 1944 Nature of dues Excise Duty Period to which the amount relates 1980-87 1992-96 2003-04 2006-07 Sales Tax Act Sales Tax 1992-93, 1994-95, 1995-96, 1998-99 & 2003-04 1977-78 to 1983-84, 1984-85, 1985-86, 1986-87, 1987-88, 1989-90 & 1990-91 1976-77 to 1983-84 1976-77 to 1983-84 & 1997-98 2001-02, 2003-04 & 2004-05 2002-03, 2003-04, 2004-05, 2005-06 & 2006-07 2005-06 & 2006-07 2004-06 2001-02 2005-06 Wealth Tax, 1957 Lubricants Central Excise Act,1944 Wealth Tax Excise Duty 2002-03 Amount (Rs lakhs) 6.12 1.11 4.61 1658.90 1369.49 1463.16 Forum where dispute is Pending Asst. Commissioner Central Excise & Customs Commissioner Appeals, Central Excise & Customs High Court Central Excise and Service Tax Appellate Tribunal Sales Tax Tribunal, Orissa High Court, Orissa
927.37 233.32 9.26 256.95 24.79 2.25 10.27 719.27 51.97
Additional Commissioner Commercial Taxes Commissioner Commercial Taxes Assistant Commissioner Commercial Taxes Joint Commissioner Deputy Commissioner Central Excise and Service Tax Appellate Tribunal Income tax Appellate Tribunal Commissioner of Income Tax (Appeals) Commissioner of Income Tax (Appeals) Central Excise and Service Tax Appellate Tribunal , Mumbai Commissioner Appeals High Court Appellate Tribunal Deputy Commissioner Joint Commissioner Sales Tax Appeals II Joint Commissioner Sales Tax Appeals II Commissioner Appeals Central Excise and Service Tax Appellate Tribunal, Mumbai
Service Tax Act, 1994 Income Tax Act, 1961
Service Tax IncomeTax
2007-08
16.04
Sales Tax Act
Sales Tax
2009-10 1994-95 & 1999-2000 1995-96 & 1999-2000 1999-2000, 2001-02 & 2003-04 2003-04 2004-05
22.09 318.21 8.54 89.52 816.52 1186.84 32.97 15.41
Income Tax Act,1961 Customs Act,1962
Income Tax Customs Duty
1998-99,1999-2000 & 2000-01 2006-07
34
(xi)
In our opinion and according to the information and explanations given to us having regard to roll over of buyers credit by bank, the Company has not defaulted in repayment of its dues to banks or nancial institutions during the year. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and nancial institutions are not prima facie prejudicial to the interests of the Company.
(xii)
(xiii) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained. (xiv) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment. (xv) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year. For Deloitte Haskins & Sells Chartered Accountants (Registration No.008072S) K. RAJASEKHAR Partner Membership No. 23341
Place: Hyderabad Date: 14th May 2010
35
BALANCE SHEET AS AT 31ST MARCH, 2010

Schedule I. SOURCES OF FUNDS 1. Shareholders Funds (a) Capital (b) Reserves & Surplus 2. Loan Funds (a) Secured Loans (b) Unsecured Loans 3 4 17074.51 13412.83 30487.34 TOTAL II. APPLICATION OF FUNDS 1. Fixed Assets (a) Gross Block (b) Less : Depreciation (c) Net Block (d) Capital Work-in-Progress and advances on Capital Account 2. 3. 4. Investments Deferred Tax Asset (Net) Current Assets, Loans and Advances (a) Inventories (b) Sundry Debtors (c) Cash and Bank Balances (d) Loans and Advances Less: Current Liabilities and Provisions (a) Current Liabilities (b) Provisions Net Current Assets TOTAL Notes 18 11 12 14492.20 12600.72 27092.92 11456.40 72764.28 18728.78 12195.62 30924.40 17835.12 82107.65 7 8 9 10 12130.34 11808.41 8181.69 6428.88 38549.32 16399.40 16546.89 8580.61 7232.62 48759.52 6 5 68689.33 11818.98 56870.35 1233.52 58103.87 3057.74 146.27 69504.59 10312.36 59192.23 1484.36 60676.59 3067.67 528.27 72764.28 17122.63 23703.68 40826.31 82107.65 1 2 1487.17 40789.77 42276.94 1487.17 39794.17 41281.34 As at 31st March 2010 Rupees Lakhs As at 31st March 2009 Rupees Lakhs
Schedules 1 to 18 annexed hereto form part of these nancial statements Per our report attached For Deloitte Haskins & Sells Chartered Accountants K. RAJASEKHAR Partner Place : Hyderabad Date : 14th May 2010 S. SUBRAMANIAN Chief Financial Ofcer & Company Secretary For and behalf of the Board of Directors
36
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010
Schedule INCOME Income from sales and other operations Less: Excise duty Income from Property Development Other Income EXPENDITURE Cost of Materials Other Operating Expenses Interest Expenses Depreciation PROFIT BEFORE EXCEPTIONAL ITEMS AND TAXATION Exceptional Item (Net) (Note 24 of Schedule 18) PROFIT BEFORE TAXATION Provision for Taxation Current Tax MAT Credit Deferred Tax Fringe Benet Tax PROFIT AFTER TAXATION Balance Brought forward from Previous Year BALANCE AVAILABLE FOR APPROPRIATION APPROPRIATIONS Proposed Dividend Dividend Tax Transfer to General Reserve Balance Carried to Balance Sheet Earnings per share in Rs. (Note 20 of Schedule 18) - Basic - Diluted Notes on Accounts 18 Rs. 6.06 Rs. 6.06 Rs. 3.91 Rs. 3.91 1338.46 222.30 500.00 8303.87 1264.10 214.83 370.00 5857.40 541.00 382.00 4507.23 5857.40 10364.63 509.00 (41.00) 387.01 116.02 2904.38 4801.95 7706.33 14 15 16 47049.18 45108.89 2551.07 1700.79 96409.93 3845.62 (1584.61) 5430.23 44916.03 42065.64 2430.36 1537.24 90949.27 3875.41 3875.41 13 106565.94 8959.69 97606.25 2649.30 100255.55 99588.84 8358.68 91230.16 1050.00 2544.52 94824.68 Year ended 31st March 2010 Rupees Lakhs Year ended 31st March 2009 Rupees Lakhs
Schedules 1 to 18 annexed hereto form part of these nancial statements Per our report attached For Deloitte Haskins & Sells Chartered Accountants K. RAJASEKHAR Partner Place : Hyderabad Date : 14th May 2010 S. SUBRAMANIAN Chief Financial Ofcer & Company Secretary
For and behalf of the Board of Directors
37
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
2009-2010 Rupees Rupees Lakhs Lakhs (A) CASH FLOW FROM OPERATING ACTIVITIES Net Prot before tax and after exceptional items Adjustments for: Depreciation Dividend received Prot on sale of Fixed Assets Sale of Development Rights in Property Amount received against advances made and adjusted to Revaluation Reserve in earlier year Prot on sale of long term Investments Compensation under voluntary retirement Scheme adjusted to Revaluation Reserve Campsite Expenses adjusted to revaluation reserve Interest Income Unrealised (Gain)/Loss on Exchange - Net Interest expense Operating Prot before working Capital changes Adjustments for: Trade and other Receivables - Increase/ (Decrease) Inventories - Increase/ (Decrease) Trade Payables - (Increase)/Decrease Cash generated from Operations Direct Taxes paid (net of refunds) Fringe Benet Tax Paid (773.12) (773.12) NET CASH FROM / (USED IN) OPERATING ACTIVITIES (B) CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets Sale of Fixed Assets (including land) Sale of Development Rights in Property Purchase of Investments in Subsidiary Company Sale of investments in subsidiary Sale of long term investment Advance to subsidiary Companies Advances to subsidiary company realised Interest Received Dividend received NET CASH FROM / (USED IN) INVESTING ACTIVITIES (1182.70) 2405.43 50.00 6.85 (0.09) 1973.25 312.88 1.42 3567.04 (6720.30) 2391.06 1050.00 (5.00) (3228.37) 486.93 1.97 (6023.71) 10658.08 5531.28 4176.78 (3493.42) 6214.64 11431.20 (735.16) (97.43) (832.59) (538.48) (4518.62) (7277.58) 6417.48 (5378.72) 294.11 1700.79 (1.42) (2246.65) (1973.25) (46.92) (200.28) (197.29) 2751.35 (213.67) 5216.56 1537.24 (1.97) (2291.31) (1050.00) (703.01) (101.04) (486.93) 1977.15 2917.29 1797.42 5672.83 5430.23 3875.41 2008-2009 Rupees Rupees Lakhs Lakhs
38
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
2009-2010 Rupees Rupees Lakhs Lakhs (C) CASH FLOW FROM FINANCING ACTIVITIES Proceeds from borrowings Proceeds from Fixed Deposits Repayment of borrowings Loans from Companies Repayment of Loans to Companies Interest paid Dividend paid Dividend tax paid NET CASH (USED IN) / FROM FINANCIAL ACTIVITIES Net increase/(decrease) in cash and cash equivalents Cash and Cash Equivalents as at the commencement of the year - Cash and Bank Balances Add: Cash and Cash Equivalents taken over from IDL Speciality Chemicals Limited (Note 2 of Schedule 18) Less: Cash and Cash Equivalents transferred to IDL Speciality Chemicals Limited (Note 2 of Schedule 18) Cash and Cash Equivalents as at the end of the year Cash and Bank Balances * 30331.89 (158.96) (38902.80) 11506.39 (13248.46) (2683.02) (1254.25) (214.83) (14624.04) (398.92) 8580.61 8580.61 8181.69 2008-2009 Rupees Rupees Lakhs Lakhs 18221.07 (131.23) (4458.73) 4699.86 (2594.32) (2964.94) (1097.81) (189.56) 11484.34 4922.15 3778.80 0.47 120.81 3658.46 8580.61
* includes Rs.79.94 Lakhs (31.03.2009 Rs. 51.04 Lakhs) being the deposit made under Rule 3A of the Companies (Acceptance of Deposits) Rules, 1975
Per our report attached For Deloitte Haskins & Sells Chartered Accountants K. RAJASEKHAR Partner Place : Hyderabad Date : 14th May 2010 S. SUBRAMANIAN Chief Financial Ofcer & Company Secretary
For and behalf of the Board of Directors
39
SCHEDULES TO THE FINANCIAL STATEMENTS

As at 31st March 2010 Rupees Lakhs Schedule 1 SHARE CAPITAL AUTHORISED 12,50,00,000 Equity Shares of Rs.2 each ISSUED AND SUBSCRIBED 7,43,58,735 Equity Shares of Rs.2 each fully paid Of the above (a) 4,65,025 shares represent 93,005 shares after sub-division of shares of Rs.10 to Rs.2 each allotted as fully paid pursuant to contract without payment being received in cash (b) 2,60,75,125 shares represent 52,15,025 shares after sub-division of shares of Rs.10 to Rs.2 each allotted as fully paid up bonus shares by capitalisation of Reserves. (c) Pursuant to the merger scheme as approved by Board for Industrial and Financial Reconstruction, 15,18,735 shares represent 3,03,747 shares after sub-division of shares from Rs.10 to Rs.2 each, allotted effective 31st March, 1999 to the shareholders of erstwhile IDL Salzbau (India) Limited. (d) 2,93,50,000 represent 58,70,000 after sub-division of shares from Rs.10 to Rs.2 each, allotted effective 1st January, 2002, consequent to the amalgamation of erstwhile Gulf Oil India Limited, to the shareholders of erstwhile Gulf Oil India Limited Schedule 2 RESERVES AND SURPLUS a) SECURITIES PREMIUM ACCOUNT b) CAPITAL RESERVE c) EXPORT ALLOWANCE RESERVE d) REVALUATION RESERVE Per last Balance Sheet Less: Adjustment on account of revaluation (Refer note 27 of Schedule 18) Less: Withdrawal of Reserve (Refer note 27 of Schedule 18) Less: Debit balance in the Prot & Loss accounts of IDL Speciality Chemicals Limited in accordance with Scheme of Arrangement (Refer note 2.2 of Schedule 18) Less: Adjustments as detailed in note 2.4 of Schedule 18 GENERAL RESERVE Per last Balance Sheet Add : Transfer from Prot & Loss Account Less: Adjustment on account of exchange difference capitalised f) PROFIT & LOSS ACCOUNT Per Account Annexed 8303.87 40789.77 5857.40 39794.17 4852.45 0.75 10.50 18429.06 1950.87 16478.19 183896.69 140096.87 43799.82 4852.45 0.75 10.50 1487.17 1487.17 2500.00 2500.00 As at 31st March 2009 Rupees Lakhs
16478.19 10644.01 500.00 11144.01
87.04 43712.78 16478.19 25283.72 10339.05 370.00 65.04 10644.01 18429.06
e)
40

As at 31st March 2010 Rupees Lakhs Schedule 3 SECURED LOANS A. From Banks (i) Cash Credit (includes Working Capital Demand Loan) (ii) Foreign Currency Working Capital Loan [USD 2.25 million (31.03.2009 USD 2.25 million)] (iii) Term Loans (a) State Bank of India (b) State Bank of Hyderabad (c) ABN Amro Bank (d) Oriental Bank of Commerce (e) Andhra Bank (f) Kotak Mahindra Bank Limited (g) State Bank of Mauritius Limited B. From Others SREI Infrastructure Finance Limited Hinduja Ventures Limited 404.12 625.29 17074.51 781.80 2367.36 17122.63 769.14 4754.49 215.46 35.58 103.63 264.27 1960.00 1478.36 2865.03 815.93 124.49 187.64 366.25 6926.88 1015.65 6994.57 1141.20 As at 31st March 2009 Rupees Lakhs
Schedule 4 UNSECURED LOANS Fixed Deposits [See note 14(f) of Schedule 18] Deferred Hire Purchase Credits ICICI Bank Limited Short Term Loan from IDBI Bank Limited SREI Infrastructure Finance Limited Dealers deposits Buyers Credit - Long term - Short term Inter Corporate Loans - Short term 510.69 422.47 2000.00 104.48 68.25 10306.94 13412.83 140.83 291.58 283.73 1550.00 152.20 69.50 675.04 20510.06 30.74 23703.68
41

Schedule 5 FIXED ASSETS:
COST ASSETS
Additions on Transfer to Additions on Cost/ transfer of Agro IDL Speciality Cost/ transfer of Agro Adjustment on Impairment Revaluation Undertaking Chemicals Additions Deductions Revaluation 31.03.2009 Undertaking revaluation of Assets 31.03.2009 (note 2 on Ltd (Note 2 on 31.03.2010 (note 2 on Schedule 18) Schedule 18) Schedule 18)
Rupees Lakhs
DEPRECIATION
Transfer to IDL Speciality On Impairment Chemicals For the year Deductions of Assets Ltd (Note 2 on Schedule 18)
NET BOOK VALUE

Cost/ Revaluation 31.03.2010 Cost/ Revaluation 31.03.2009
31.03.2010
Land-Freehold Land-Leasehold Buildings Leasehold Improvements Plant & Machinery Equipments etc. Furniture, Fixtures & Ofce appliances Vehicles Technical Knowhow
47,399.44 19.10 2,248.31 6.80 17,681.53 1,421.10 728.31 69,504.59
11.72
4.92 -
1,952.50 25.58 199.48 5.89 28.09 2,211.54 203.26
- 45,446.94 19.10 2,227.65 6.80
4.78 873.44 6.80 8,235.78 784.39 407.17 -
1.38
588.63
0.22 58.42 1,450.93 126.28 64.94 1,700.79 1,537.24
1.15 174.94 2.78 15.30 194.17 103.51
- 45,446.94 5.00 930.71 6.80 9,511.77 907.89 456.81 14.10 1,296.94 9,145.82 584.94 381.61 -
47,399.44 14.32 1,374.87 9,445.75 636.71 321.14 59,192.23
- 1,175.54 77.62 138.20 -
- 18,657.59 1,492.83 838.42 -
- 1,396.28
- 68,689.33 10,312.36 516.63 69,504.59 9,930.55
- 11,818.98 56,870.35 464.67 10,312.36
31.03.2009
2,08,902.53
5,285.54 1,40,096.87 6,692.64
Notes:1) Assets costing Rs. 948.57 lakhs (previous year Rs.270.70 lakhs) have been acquired on hire purchase, the legal ownership of which will be transferred to the Company after the nal payment. (Refer note 22(b) of schedule 18) 2) Additions to Plant & Machinery include Rs. 52.24 Lakhs (previous year Rs. 105.15 Lakhs) being difference in foreign exchane loan obtained for acquisition of xed assets (Refer note 19(b) of schedule 18) 3) Deduction under land includes Rs. 1950.87 Lakhs withdrawn from Revaluation Reserve. (Refer note 27 of schedule 18)
As at 31st March 2010 Rupees Lakhs Schedule 6 INVESTMENTS At cost, unless otherwise stated UNQUOTED- LONG TERM TRADE Shares in subsidiary companies IDL Speciality Chemicals Limited (formerly IDL Agro Chemicals Limited ) 2,40,000 Equity Shares of Rs.10 each Less: Diminution in value (Sold during the year) IDL Buildware Limited (formerly IDL Finance Limited) 19,70,000 Equity Shares of Rs. 10 each Less: Diminution in value 2,00,000 8% Redeemable Cumulative Preference Shares of Rs. 100 each Less: Diminution in value Gulf Oil Bangladesh Limited 1,77,939 Equity Shares of Bangladesh Taka 50 each fully paid PT Gulf Oil Lubricants Indonesia 15,000 Shares of Indonesia Rp.8,61,900 each fully paid equivalent to US $ 1,500,000 Gulf Carosserie India Limited 3,80,001 Equity Shares of Rs. 10 each fully paid Less: Diminution in value Hinduja Infrastucture Limited 50,000 Equity Shares of Rs. 10 each fully paid 38.00 38.00
As at 31st March 2009 Rupees Lakhs
203.41 203.41 200.00 200.00
24.00 24.00 203.41
203.41 200.00
71.91
200.00
71.91
680.70
680.70
5.00
38.00 38.00
5.00
42

As at 31st March 2010 Rupees Lakhs Schedule 6 (Contd.) Gulf Oil (Yantai) Co., Limited 41,32,540 Equity Shares of US $ 1 each fully paid IDL Speciality Chemicals Limited (formerly IDL Agro Chemicals Limited ) 97,60,000 Equity Shares of Rs.10 each to be allotted (Refer Note 2 of Schedule 18) Less: Diminution in value (Sold during the year) OTHERS 500 Shares of Rs.10 each in IDL Chemicals Employees Co-operative Credit Society Limited, Hyderabad 500 Shares of Rs.10 each in IDL Chemicals Employees Co-operative Credit Society Limited, Rourkela 27,978 units of Rs.10 each in UTI Bond Fund of Unit Trust of India Pachora Peoples Co-operative Bank Limited 2 shares of Rs. 100 each Gulf Ashley Motors Limited 1,14,000 Equity Shares of Rs 100 each Patancheru Enviro-Tech Limited 58,460 Equity Shares of Rs 10 each APDL Estate Limited (formerly IDL Arom International Limited) 23,62,000 10% Redeemable Cumulative Preference Shares of Rs. 100 each Less: Diminution in value QUOTED-LONG TERM OTHERS Ashok Leyland Limited 1,00,000 Equity Shares of Rs. 1 each Hinduja TMT Limited 96 Equity Shares of Rs. 10 each Jammu & Kashmir Bank Ltd. 2,400 Equity Shares of Rs. 10 each IndusInd Bank Limited 14,623 Equity Shares of Rs. 10 each fully paid (Sold during the year) Notes: 1. Aggregate cost of quoted investments 2. Aggregate Market Value of quoted investments 3. Aggregate cost of unquoted investments As at 31st March 2009 Rupees Lakhs
2157.86
2157.86
6374.14 6374.14
0.05
0.05
0.05
0.05
2.97 -
2.97 -
114.00 -
114.00 3.00
2362.00 2362.00 -
2362.00 2362.00 -
24.23 0.06 0.91 -
24.23 0.06 0.91 6.93
3057.74 25.20 55.56 3032.54
3067.67 32.13 30.34 3035.54
43

As at 31st March 2010 Rupees Lakhs Schedule 7 INVENTORIES (At lower of cost and net realisable value) Land / Building for Property development, at cost Contract work - in - progress Stores & Spares Packing Materials and Fuel Raw Materials Work-in-Process Finished Goods 25.63 499.70 504.04 6456.45 805.97 3838.55 12130.34 117.91 382.17 512.89 360.48 9035.97 828.14 5161.84 16399.40 As at 31st March 2009 Rupees Lakhs
Schedule 8 SUNDRY DEBTORS - UNSECURED a) Debts outstanding for a period exceeding six months: Considered good Considered doubtful b) Other Debts : Considered good * 10603.71 15404.11 Less : Provision for doubtful debts 3595.70 11808.41 * Includes dues from subsidiaries - Rs. 43.75 Lakhs (31.03.09 - Rs. 41.71 Lakhs) 15156.41 20501.71 3954.82 16546.89 1204.70 3595.70 1390.48 3954.82
Schedule 9 CASH AND BANK BALANCES Cash / Cheques on hand # With Scheduled Banks : Current Account Fixed Deposits/Margin account * 1294.76 5605.37 8181.69 # includes cheques on hand Rs.1254.40 lakhs (31.03.2009 Rs.389.82 lakhs) * includes Rs.79.94 Lakhs (31.03.2009 Rs. 51.04 Lakhs) being the deposit made under Rule 3A of the Companies (Acceptance of Deposits) Rules, 1975 1730.82 6437.66 8580.61 1281.56 412.13
44

As at 31st March 2010 Rupees Lakhs Schedule 10 LOANS AND ADVANCES (Unsecured, considered good unless otherwise specied) Advances to Subsidiary Companies (interest free) * IDL Speciality Chemicals Ltd (IDL Agro Chemicals Limited) Less : Provision for doubtful advances Gulf Carosserie India Ltd., Less : Provision for doubtful advances IDL Buildware Limited Less : Provision for doubtful advances Advances to Other Companies IDL Speciality Chemicals Ltd (IDL Agro Chemicals Limited) Less : Provision for doubtful advances Advance tax (net of provision) Advances recoverable in cash or in kind or for value to be received: Considered good Considered doubtful Less : Provision for doubtful advances Balance with Excise Authorities ** Refer Note 2.4 of Schedule 18 * Maximum amount outstanding during the year IDL Speciality Chemicals Limited(formerly IDL Agro Chemicals Ltd) - Rs. 3103.97 Lakhs (31-03-2009 Rs.3103.97 lakhs) Gulf Carosserie India Limited-Rs. 5.38 lakhs (31-03-2009 Rs.5.29 lakhs) IDL Buildware Limited- Rs. 447.26 Lakhs (31-03-2009 Rs. 447.26 lakhs) Schedule 11 CURRENT LIABILITIES Acceptances Sundry Creditors : Due to Micro and Small Enterprises Others Advance from Customers Interest accrued but not due on Loans Liability towards Investors Education and Protection Fund under Section 205C of the Companies Act, 1956 Due (i) Unpaid Dividends (ii) Unclaimed Matured Deposits (iii) Interest accrued on (ii) above Not due (i) Unpaid Dividends (ii) Unclaimed Matured Deposits (iii) Interest accrued on (ii) above As at 31st March 2009 Rupees Lakhs
5.38 5.29 440.89 440.89 1137.09 1137.09
0.09 -
3103.97 3103.97 ** 5.29 5.29 ** 447.26 447.26 **
557.17 5314.86 84.76 5399.62 84.76
325.05
4391.36 174.76 4566.12 174.76
4391.36 1480.26 6428.88
5314.86 1592.71 7232.62
404.21 12982.50 917.21 104.49
3179.86 13122.79 2285.20 34.88
75.29 7.77 0.73 14492.20
0.04 65.40 38.21 2.40 18728.78
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As at 31st March 2010 Rupees Lakhs Schedule 12 PROVISIONS Employee benets - Gratuity - Compensated Absence Indirect Taxes * Others * Fringe Benet Tax Proposed dividend Tax on dividend * Refer Note 2.4 of Schedule 18 Year ended 31st March 2010 Rupees Lakhs Schedule 13 OTHER INCOME Dividend from Long Term Investment Prot on Sale of Property / Fixed Assets Insurance Claims Export Incentives (DEPB) Provision no longer required written back Miscellaneous 1.42 2246.65 10.57 174.60 216.06 2649.30 Schedule 14 COST OF MATERIALS Raw Materials Consumed : Opening Stock Add : Purchase Less : Closing Stock Purchase of Finished Goods (Increase)/Decrease in Finished Goods, Work-in-Process and Contracts-in-Progress: Closing Stock Finished Goods Work-in-Process Contracts-in-Progress 3838.55 805.97 4644.52 5161.84 828.14 382.17 6372.15 9035.97 36209.66 45245.63 6456.45 38789.18 3143.03 *4183.81 44146.42 48330.23 9035.97 39294.26 4661.60 1.97 2291.31 45.28 84.74 41.00 80.22 2544.52 Year ended 31st March 2009 Rupees Lakhs 1400.10 304.10 8394.10 893.55 48.11 1338.46 222.30 12600.72 1134.37 246.56 8394.10 893.55 48.11 1264.10 214.83 12195.62 As at 31st March 2009 Rupees Lakhs
46

Year ended 31st March 2010 Rupees Lakhs Schedule 14 (Contd.) Opening Stock : Finished Goods Work-in-Process Contracts-in-Progress Add: Stocks taken over from IDL Speciality Chemicals Ltd Less: Stocks transferred to IDL Speciality Chemicals Ltd in terms of scheme of arrangement (Refer note 2 of Schedule 18) Less: Adjusted against Revaluation Reserve (Refer note 2 of Schedule 18) Packing Materials Consumed Less: Scrap realisation Excise duties etc. on Increase/(Decrease) of Finished Goods 5161.84 828.14 382.17 4530.37 1484.11 16.16 Year ended 31st March 2009 Rupees Lakhs
6372.15 6372.15 1727.63 3612.16 47272.00 211.77 47060.23 (11.05) 47049.18
(1833.38) 4197.26 16.16 4181.10 (2191.05) 3293.83 45058.64 188.89 44869.75 46.28 44916.03
* Excludes Rs. 534.50 Lakhs stocks transferred to IDL Speciality Chemicals Limited in terms of the Scheme of Arrangement (Refer Note 2 of Schedule 18) Schedule 15 OTHER OPERATING EXPENSES Payments to and provisions for Employees : Salaries, Wages and Bonus Contribution to Provident Fund, Gratuity Fund and other Funds Workmen and Staff Welfare Expenses Stores, Spare Parts and Loose Tools consumed Processing Charges Power, Fuel and Water Rent Rates and Taxes Expenses on Operation Contracts Insurance Advertising Distribution Expenses 6560.02 1007.41 641.02 8208.45 299.92 1192.35 762.73 1514.04 410.35 15515.58 284.09 2344.39 4029.12 5772.61 871.65 607.87 7252.13 235.14 826.99 609.40 1415.46 381.01 15500.37 251.77 1298.29 3182.25
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Year ended 31st March 2010 Rupees Lakhs Schedule 15 (Contd.) Commission on sales Discount on sales Repairs to Buildings Repairs to Machinery Travelling and Conveyance Bank charges and other Financial charges Directors Fees Commission to non-wholetime Directors Postage, Telephone and Telex Legal & Professional charges Provision for doubtful debts/advances Bad Debts, advances etc written off Less: Provision for doubtful debts written-back Royalty (Gain) / Loss on Exchange Fluctuation Miscellaneous 743.15 743.15 498.91 (168.42) 948.65 45108.89 Schedule 16 INTEREST EXPENSES Interest On Term Loans Others Less: Interest on deposits with banks etc. (Tax deducted at source Rs. 41.05 Lakhs; Previous year Rs.9.34 Lakhs) Interest on advance payment of taxes 1700.90 1050.45 2751.35 1311.15 1606.14 2917.29 467.26 2579.61 865.27 42065.64 285.04 6154.56 88.14 372.82 687.21 496.42 21.82 9.84 204.14 474.71 474.03 202.28 5078.80 38.35 233.55 572.57 410.48 16.40 16.70 199.78 431.78 Year ended 31st March 2009 Rupees Lakhs
193.56 6.72 200.28 2551.07
373.67 113.26 486.93 2430.36
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Schedule 17 CAPACITY, PRODUCTION, STOCKS, SALES AND CONSUMPTION: (a) Quantitative information in respect of goods produced / purchased: CAPACITY PER ANNUM Item Unit Licensed 2009-10 Detonators Detonating Fuse Safety Fuse Industrial ExplosivesCartridged, Bulk, Emulsion and ANFO Boosters Millon Nos Millon Metres Millon Metres Tonnes 192.00 45.00 87.78 # 2008-09 192.00 45.00 87.78 # Installed * 2009-10 192.00 22.50 2008-09 192.00 22.50 Production 2009-10 115.81 25.51 73727.34 2008-09 110.99 21.53 62036.97
138000.00 138000.00 138000.00 138000.00
Tonnes
190.00 1440.00
190.00 1440.00
125.00 -
125.00 -
42.25 -
76.05 -
Penta Erythritol Tonnes Tetra Nitrate (PETN) @ Exploders Numbers
500.00
500.00
1122.11 70.96
2374.00 101.35
Single or double or Sq.Metres Multilayer clad plates $ Corresponding to Tonnes Lubricating Oils KL
!!
!!
NA
NA
75000.00
75000.00
47298.00
40844.00
* Installed Capacity is as certied by the Managing Director and not veried by the auditors, being a technical matter Notes: 1. # @ ! !! $ Licenced capacity includes letter of intent issued by Government of India and includes application for renewals As given in the licence, 12 million coils per annum which is equivalent to 87.78 million metres Only Bhiwandi Plant for which a separate licence has been obtained, however, the plant has since been closed. 1,00,000 Sq metres corresponding to maximum tonnage of 25,000 tonnes of cladding plates Installed Capacity is not estimatable as production can be increased substantially with the facilities available merely by increasing the size/weight of clad plates Excludes product meant for development production of intermediate products captively consumed and products for which no separate licence was required, has not been included above.
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(b) Stock of Finished Goods / Sales, including income from other Operations:
Stock of Finished Goods Item Unit 31.03.2010 Qty Detonators Detonating Fuse Safety Fuse - Purchased Cartridged ANFO & NCN (High Explosives) Boosters Single or double or Multilayer clad plates Lubricating Oils Filters Car Care Products GRACO Bulk Drugs Formulations- Tablets Income from Operation Contracts Income from PropertyRent Others Millon Nos Millon Metres Millon Metres Tonnes Tonnes Sq.Metres Corresponding to Tonnes KL Nos KL Nos Tonnes Thousand Nos 4140.00 72972.00 2420.60 3838.55 3793.00 54885.00 122.00 3379.05 66.59 13.86 5161.84 2901.00 43230.00 166.00 9.16 461.00 1645.03 57.87 17.09 1220.56 13.35 4530.37 12.60 1.70 0.02 1144.62 19.17 Rupees Lakhs 855.25 64.49 0.07 403.29 44.41 31.03.2009 Qty 13.13 1.62 0.13 1465.59 29.24 Rupees Lakhs 1076.05 65.44 0.06 402.85 66.23 31.03.2008 Qty 17.41 3.37 612.91 11.81 Rupees Lakhs 1136.10 121.75 204.13 20.00 2009-10 Qty 113.83 26.46 0.79 73736.54 52.16 1122.11 70.96 49306.00 15888.00 307.00 0.30 Rupees Lakhs 7398.51 1384.07 32.42 20968.96 137.50 565.57 55685.75 31.70 25.12 29.81 19368.96 102.06 327.27 106565.94 Sales 2008-09 Qty 114.93 23.22 1.36 Rupees Lakhs 7499.50 1303.92 65.25
61314.16 17282.16 59.48 2374.00 101.35 150.18 1014.55 -
45407.00 50123.65 434.13 62.95 64.35 33633.00 400.00 -
50.44 191593.00
91.71 192279.00
94.49 932471.00
508.24 795672.00
- 21093.38 138.95 355.87 99588.84
(c) Purchase of Finished Goods: Item Safety Fuse Grease/Unprocessed Oils Filters Car Care Products GRACO D Cord Formulations Unit M.Metres MT Nos KL Nos M.Metres KGs 2009-10 Qty 0.48 2587.00 929046.00 3594.00 185.00 1.12 300.00 Rupees Lakhs 14.34 2702.01 342.70 6.30 15.76 32.90 29.02 3143.03 (d) Raw Materials Consumed: Item Coating Materials Chemicals : Explosives/ Detonators/ Acids Metals Yarn & Paper Base Oil Additives Miscellaneous Tonnes Tonnes Tonnes Tonnes Tonnes 59523.93 1223.86 91.74 39352.27 3060.61 10375.69 1699.20 103.98 20160.43 4630.65 1266.05 38789.18 53048.61 1122.05 69.21 36662.98 2404.86 11217.59 1907.69 82.82 21383.52 3131.98 1037.36 39294.26 Unit Tonnes 2009-10 Qty 825.83 Rupees Lakhs 553.18 Qty 925.41 2008-09 Rupees Lakhs 533.30 Qty 1.04 5660.00 800908.00 45288.00 356.00 2008-09 Rupees Lakhs 20.90 4267.45 299.97 44.28 29.00 4661.60
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18. NOTES ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 1. ACCOUNTING POLICIES The accounts have been prepared primarily on the historical cost convention and in accordance with the relevant provisions of the Companies Act, 1956 and the accounting standards notied by the Companies (Accounting Standards) Rules, 2006. The signicant accounting policies followed by the company are stated below: I. FIXED ASSETS: Fixed assets are shown at cost / revalued amount less depreciation. Cost comprises the purchase price and other attributable expenses. II. DEPRECIATION ON FIXED ASSETS: (i) The Company follows the straight-line method of charging depreciation on all its xed assets. The Depreciation has been provided in the manner and at the rates prescribed in Schedule XIV to the Companies Act, 1956 on all the assets except certain equipments which are depreciated over their estimated useful life.
(ii) Leasehold land is being amortised in equal instalments over the lease period. (iii) Technical Know-how is amortised over a period of ve to seven years. III. INVESTMENTS: Current Investments are valued at lower of cost and fair value. Long Term Investments are valued at cost. Where applicable, provision is made if there is a permanent fall in valuation of long term Investments. IV. INVENTORIES: Inventories are valued at lower of cost and net realisable value. The method of arriving at cost of various categories of inventories is as below: (a) (b) Stores and Spares, Raw and Packing material Finished goods and work-In-process Weighted Average method Weighted average cost of production, which comprises direct material costs, and appropriate overheads. Represents expenses incurred on execution of contracts till balance sheet date
(c) V.
Contracts-in-progress
FOREIGN CURRENCY TRANSACTIONS: Transactions made during the year in foreign currency are recorded at the exchange rate prevailing at the time of transaction. Assets and Liabilities related to foreign currency transactions remaining unsettled at the year end are translated at the contract rates when covered by forward cover contracts and at year-end rates in other cases. Realised gains and losses on foreign exchange transactions other than those relating to xed assets are recognised in the prot and loss account except gain/loss on transaction of long term liabilities incurred to acquire xed assets is treated as an adjustment to the carrying cost of xed assets.
VI. REVENUE RECOGNITION: a) Sale of goods is recognised at the point of despatch of nished goods to customers. Sales include amount recovered towards excise duty but exclude sales tax. Export incentive under the Duty Entitlement Pass Book scheme has been recognized on the basis of credits afforded in the passbook. Income from services is recognized at the time of rendering the services. Income from Property Development is recognised as soon as contract is entered with the Party and the consideration is received. Contract revenue is recognised on percentage completion method as required under revised Accounting Standard -7 - Construction Contracts. The stage of completion is determined as a proportion that contract costs bear to the estimated total costs. When it is probable that any stage of the contract that the total cost will exceed the total contract revenue, the expected loss is recognised immediately.
b) c) d)
VII. RESEARCH AND DEVELOPMENT EXPENSES: Research and Development expenditure of revenue nature is written off in the year in which it is incurred and expenditure of a capital nature is added to xed assets.
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VIII. EMPLOYEE RETIREMENT BENEFITS: Retirement benets to employees are provided for by means of gratuity, superannuation and provident fund. The gratuity liability is determined based on the actuarial valuation as at the year end. Payments in respect of superannuation are made to the fund administered by LIC. Provision in respect of compensated absences is made based on actuarial valuation as at year end. Contribution to Provident fund is based on dened contribution and expensed as incurred. IX. TAXES ON INCOME: Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognised subject to the consideration of prudence in respect of deferred tax assets on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or subsequent periods. X. SEGMENT REPORTING: The accounting policy adopted for Segment Reporting is in line with the accounting policy of the Company with the following additional policy for Segment Reporting:Revenue and expenses have been identied to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to the segments on a reasonable basis, have been included under Unallocated Expenses. Inter Segment transfers are at cost. 2. Demerger of Speciality Chemicals Division of the Company and merger of Agro Division of IDL Speciality Chemicals Limited with the Company. (the Scheme) in 2008-09.
2.1 Pursuant to a Scheme of Arrangement between the Company and IDL Speciality Chemicals Limited (IDL SC) and their respective shareholders, which was sanctioned by the Honourable High Court of Andhra Pradesh by its Order dated 24th March, 2009, the assets and liabilities of the Speciality Chemicals Division of the Company were transferred to and vested with IDL SC with effect from 1st April 2008 and the assets and liabilities of Agro Division of IDL SC were transferred and vested with the Company with effect from 1st April, 2008. 2.2 As provided in the Scheme, the debit balance of Rs.87.04 Lakhs in the Prot & Loss Account as at 1st April, 2008 of Agro Division of IDL SC was adjusted against the Revaluation Reserve. 2.3 (a) Pursuant to the Scheme, 97,60,000 equity shares of Rs. 10 each of IDL SC were issued to the Company towards Rs. 6374.14 Lakhs, representing the excess of assets over liabilities of the Speciality Chemicals Division transferred to IDL SC. The shares were issued during the year. (b) In accordance with the Scheme, the Company was required to discharge the obligations of IDL SC and IDL SC in turn would re-imburse the Company. Accordingly, the liabilities of IDL SC discharged/ to be discharged by the Company aggregating to Rs. 2699.59 Lakhs were included as part of Loans and Advances (Schedule 10). Such liability was discharged during the year. 2.4 The Board of Directors of the Company had, in pursuance of the scheme restated and / or revised certain assets and liabilities including intangibles as at 31st March 2009 and the net effect thereof was adjusted against Revaluation Reserve as detailed below :Adjustments to Revaluation Reserves Receivables which are subject matter of dispute Write down of Inventories taken over from IDL SC Miscellaneous Expenditure Obsolete Fixed Assets Doubtful Advances Diminution in value of long term investment Provision for Indirect Taxes Others Total Rs. Lakhs 1679.12 16.16 1475.45 84.21 3577.58 9163.55 8394.10 893.55 25283.72
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2.5 The adjustment to Revaluation Reserve of (a) the debit balance in the prot and loss account of IDL SC as at 1st April 2008, amounting to Rs.87.04 Lakhs (Refer Note 2.2 above) and (b) the effect of valuation / restatement / revision of certain assets and liabilities of the Company is Rs. 25283.72 Lakhs (Refer Note 2.4 above) which was in pursuance of the Scheme approved by the Honble High Court of Andhra Pradesh, at Hyderabad in the previous year. 3. Managerial Remuneration under Section 198 of the Companies Act, 1956 2009-10 Rs. Lakhs 56.63 9.84 9.56 3.47 9.84 89.34 2008-09 Rs. Lakhs 42.49 16.70 7.17 2.86 16.70 85.92
Salaries Commission Contribution to Provident Fund and Superannuation Fund Benets Commission to non-wholetime Directors Note:
Having regard to the fact that there is a global contribution to Gratuity Fund, the amount applicable to an individual employee is not ascertainable and accordingly, contribution to Gratuity Fund has not been considered in the above computation. 4. Computation of Net Prot and Directors Commission 2009-10 Rs. Lakhs 5430.23 1700.79 89.34 474.03 2008-09 Rs. Lakhs 3875.41 1537.24 85.92 -
Prot before Taxation Add: Depreciation Directors Remuneration Provision for doubtful debts Less: Depreciation under Section 350 of the Companies Act, 1956 Write off of Bad debts Prot on sale of Fixed Assets Amounts received towards advance made and provided against Revaluation Reserve Net Prot on sale of investment (long term) Commission (a) Managing Director @ 1% (b) Non-Wholetime Directors @1% Note:
2264.16 7694.39
1623.16 5498.57
1700.79 743.15 2246.65 1973.25 46.92
1537.24 2291.31 -
6710.76 983.63 9.84 9.84
3828.55 1670.02 16.70 16.70
The Company had been legally advised that the adjustments made to Revaluation Reserve in 2008-09, in accordance with the Scheme of Arrangement approved by the Honourable High Court of Andhra Pradesh, at Hyderabad, will not have any effect on the prots as determined under Section 349 of the Companies Act, 1956. 5. Payment to Auditors (Excluding Service Tax) 2009-10 Rs. Lakhs 14.50 3.00 9.20 1.89 2008-09 Rs. Lakhs 14.50 2.50 8.35 2.21
Audit Fees Tax Audit Other Services Reimbursement of Expenses
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6. Payments to Branch Auditors (Excluding Service Tax) Audit Fees Tax Audit Other Services Reimbursement of Expenses 7. Expenditure in Foreign Currency Interest Commission on Exports Other- travelling expenses, books & periodicals etc., Royalty (inclusive of Tax Deducted at Source) 8. Earnings in Foreign Exchange Export on F O B Basis 9. 6029.34 4139.37 475.60 86.84 112.76 498.91 1104.88 110.61 233.20 467.26 7.50 2.50 5.25 1.60 7.50 2.50 4.50 1.02
Amount remitted during the year in foreign currency on account of dividend Number of non-resident Shareholders Number of Shares held Dividend remitted (Rupees Lakhs) Dividend on account of year 1 36460415 619.83 2008-09 1 6800980 510.07 2007-08
10. Value of Imports of C I F Basis Raw Materials Capital Goods Traded Goods 11. Capital Commitments Estimated amount of contracts remaining to be executed on capital account 12. Consumption of raw materials (a) Raw material 2009-10 Rs. Lakhs Imported Indigenous 16587.26 22201.92 38789.18 (b) Components and Spare Parts Percentage 42.76 57.24 100.00 2008-09 Rs. Lakhs 19407.64 19886.62 39294.26 Percentage 49.21 50.79 100.00 29.57 42.21 11005.90 36.85 147.98 20982.94 1199.24 1581.82
Note: Components and Spare Parts referred to in para 4 D (c) of Part II of Schedule VI to the Companies Act, 1956 are assumed to be those incorporated in goods produced and not those used for maintenance of Plant and Machinery.
54

13. Contingent Liabilities As at 31-03-2010 Rs. Lakhs 397.80 923.10 51.97 2115.53 1305.65 4.49 3.81 75.50 108.67 178.02 As at 31-03-2009 Rs. Lakhs 441.00 311.46 875.31 86.02 20.66 4.49 3.81 83.99 87.82 171.72
(a) Corporate Guarantees * (b) Bills discounted (c) Claims against the Company not acknowledged as debts (i) Income Tax Demands (ii) Wealth Tax (iii) Sales Tax Demands (iv) Excise Demands (v) Service Tax (vi) Additional Demands towards cost of land (vii) Claims of workmen/ex-employees (viii) Other Matters (ix) Performance and Other Guarantees
(d) In terms of the agreement between IDL Speciality Chemicals Limited, Biocon Limited, and the Company for the sale of Active Pharma Ingredients (API) business to Biocon Limited, the Company would be responsible for guaranteeing to Biocon Limited claims upto a period of one year after the closing date i.e., 30th November, 2009 to the extent of purchase price of Rs.2200 Lakhs. As at 31st March, 2010, the Company has not received any such claims. * The Company has given Corporate Guarantee of 60 Million Taka to South East Bank Ltd., on behalf of Gulf Oil Bangladesh Ltd., a subsidiary of Gulf Oil Corporation Ltd. The amount outstanding as on 31st March 2010 is 21.51 Million Taka (31st March 2009, 10.09 Million Taka) 14. SECURED LOANS: (a) Cash Credit facilities including foreign currency demand loan from Bank of Bahrain & Kuwait B.S.C and working capital loan & corporate loan from consortium banks is secured by (i) hypothecation of all current assets of the Company including raw materials, nished goods, stocks-in-process, stores and spares (not relating to plant & machinery) and present and future book debts of the Company ranking pari-passu and collateral security by (i) rst pari passu charge by way of equitable mortgage on land owned by the Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, (ii) second pari passu charge on manufacturing buildings, plant and machinery charged to other term lenders. (b) (i) Term loan for Capital Expenditure from State Bank of India is secured by rst charge on the xed assets created out of the loan, ranking pari-passu with other term lenders and collateral security by (i) rst pari passu charge by way of equitable mortgage on land owned by the Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, (ii) second pari passu charge on manufacturing buildings, plant and machinery charged to other term lenders.
(ii) Term Loan for Overseas Investment from State Bank of India is secured by collateral security (i) pari passu rst charge by way of equitable mortgage on land owned by the Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, and (ii) second pari passu charge on manufacturing buildings, plant and machinery charged to other term lenders. (c) (i) Term loan for Capital Expenditure from State Bank of Hyderabad is secured by rst charge on the xed assets created out of the loan, ranking pari-passu with the other term lenders and collateral security by (i) rst pari passu charge by way of equitable mortgage on land owned by the Company admeasuring Acres 115.25 situated at Kukatpally, Hyderabad, (ii) second pari passu charge on manufacturing buildings, plant and machinery charged to other term lenders.
(ii) Term Loan for Overseas Investment from State Bank of Hyderabad is secured by collateral security (i) pari passu rst charge by way of equitable mortgage on land owned by the Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, and (ii) second pari passu charge on manufacturing buildings, plant and machinery charged to other term lenders. (d) The Term loan for Capital Expenditure from Oriental Bank of Commerce is secured by rst charge on the xed assets created out of the term loan, ranking pari-passu with the other term lenders and collateral security by (i) rst pari passu charge by way of Equitable Mortgage on land owned by the Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, (ii) second pari passu charge on manufacturing buildings, plant and machinery charged to the other term lenders.
55

(e) The Term loan for Capital Expenditure from Andhra Bank is secured by rst charge on the xed assets created out of the loan, ranking pari-passu with other term lenders and collateral security by (i) rst pari passu charge by way of Equitable Mortgage on land owned by the Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, (ii) second pari passu charge on manufacturing buildings, plant and machinery charged to the other term lenders. (f) Fixed Deposits to the extent of Rs 375.86 Lakhs were secured by a residual charge on all tangible movable property and xed assets including all movable machinery and plant & machinery, spares and stores, tools and accessories and other movables both present and future as approved by the Controller of Capital Issues vide his letter dated 1st November,1980.
(g) Term Loans from ABN Amro Bank NV, SREI Infrastructure Finance Limited, Kotak Mahindra Bank Limited are secured by way of rst charge on specic mining equipment of the Company (h) Loan received from Hinduja Ventures Limited is secured by an exclusive charge on the Companys land at Yelahanka, Bengaluru. 15. FIXED ASSETS Buildings include: (i) Rs. 7.09 Lakhs, which represents the cost of ownership ats Rs. 7.08 Lakhs and Rs. 0.01 Lakhs being the value of Share money in Sett Minar Co-operative Housing Society Limited.
(ii) Rs. 4.70 Lakhs, which, represents the cost of ownership ats Rs. 4.43 Lakhs and Rs. 0.27 Lakhs being the value of 270 ordinary shares of Rs. 100 each, fully paid up in Shree Nirmal Commercial Limited. 16. TAXATION (i) Deferred tax 31st March 2010 Rs. Lakhs (a) Deferred tax assets arising on account of timing differences: Unabsorbed business loss/ depreciation Provision for doubtful debts/advances Other timing differences 687.17 575.15 1262.32 31st March 2009 Rs. Lakhs 512.34 794.62 468.94 1775.90
(b) Deferred tax liabilities arising on account of timing differences: Depreciation 1116.05 1247.63 146.27 528.27 Net Deferred tax asset (ii) Management has been advised that Rs.1973.25 Lakhs received against advances adjusted to Revaluation Reserve in the previous year, is not required to be considered in computing Minimum Alternate Tax (MAT). (iii) By way of abundant caution, no deferred tax asset has been created in respect of the adjustments made to Revaluation Reserve as detailed in Note 2 of Schedule 18. 17. Disclosure in respect of Gratuity as required under Accounting Standard 15 Employee Benets Rs. Lakhs Projected benet obligation at the beginning of the year Current service cost Transfer to IDL Speciality Chemicals Limited under Scheme of Arrangement (Note 2 of Schedule 18) Interest cost Actuarial (Gain) / Loss Benets paid Projected benet obligation at the end of the year Fair value of plan assets Beginning of the period Expected return on plan assets Contributions Benets paid Actuarial Gain/(Loss) plan assets 31 March 2010 1418.86 124.20 101.40 252.82 (302.71) 1594.57 291.96 19.46 201.48 (302.71) (15.71)
st st
31 March 2009 1327.95 90.39 (9.76) 94.50 209.11 (293.33) 1418.86 356.75 25.95 207.69 (293.33) (12.57)
56

Fair value of plan assets at the end of the period Total Actuarial Gain/(Loss) to be recognized Amounts recognised in the balance sheet Projected benet obligation at the end of the year Fair value on plan assets at the end of the year Liability recognised in the balance sheet Cost of the Retirement and Other Benets for the year Current service cost Interest cost Expected return on plan assets Net Actuarial (Gain) / Loss recognised in the year Net cost recognised in the Prot and Loss Account Assumptions Discount Rate (%) Long term rate of compensation increase (%) Mortality table Attrition rate The major categories of plan assets as a percentage of total plan funded with LIC 31st March 2010 194.47 (268.53) 31st March 2009 284.49 (214.20)
1594.57 (194.47) 1400.10
1418.86 (284.49) 1134.37
124.20 101.40 (19.46) 268.53 474.68
87.48 94.50 (25.95) 214.20 370.23
8% 4% L.I.C 1994-96 Ultimate 3% 100%
8% 4% L.I.C 1994-96 Ultimate 3% 100%
18. MISCELLANEOUS: (a) The net exchange gain / (loss), (i.e., difference between the spot rate on the dates of the transactions and the actual rate at which the transactions are settled/appropriate rates applicable at the year end) credited to Prot and Loss Account is Rs. 168.42 Lakhs (Previous year debit of Rs.2579.61 Lakhs). (b) Exchange difference in respect of forward exchange contracts to be recognised in the Prot and Loss Account in the subsequent accounting period is Rs. 35.39 Lakhs (Credit) (Previous year debit of Rs. 3.59 Lakhs). (c) (i) The Company has entered into the following derivative instruments: The following are the outstanding Forward Exchange Contracts entered into by the Company as on 31st March, 2010: Currency US Dollar US Dollar ii) As on 31st March, 2010 Amount Buy/Sell 16688970 310206 Buy Sell Cross Currency Indian Rupees Indian Rupees Currency 750000 22438022 As on 31st March, 2009 Amount Buy/Sell Sell Buy Indian Rupees Indian Rupees Cross Currency Indian Rupees Indian Rupees
The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below: Amounts receivable/(payable) in foreign currency on account of the following: Amt. in Rs. Lakhs 31st March 2010 31st March 2009 Export of Goods 1614.12 2112.80 Export of Goods 162.19 Import of Goods 2754.82 9505.01 Import of Goods 33.52 FCNRB Loan 1015.65 1141.20 Currency USD Euro USD Euro USD Amount in foreign currency 31st March 2010 31st March 2009 3575792 4165121 267820 6185200 18740184 55345 2250000 2250000
(d) Sundry creditors (Schedule 11- Current Liabilities) include Rs nil due to Micro Enterprises and Small Enterprises as dened under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act 2006). The Company has not received any memorandum (as required to be led by the supplier with the notied authority under the MSMED Act 2006) claiming their status as Micro or Small or Medium Enterprises.
57

19. (a) Revenue Recognition Disclosures required to be made under the Accounting Standard (AS-7) Construction Contracts: Rs. Lakhs Contract revenue recognized as revenue during the year Aggregate amount of contract costs incurred in respect of on going contracts net of recognized prots (less recognized losses) up to 31st March 2010 Advance payments received (net of recoveries from progressive bills) Retention Amount Gross amount due from customers for contract work For the Method used to determine the contract revenue and the stage of completion of contract in progress, Refer Note: 1 (vi) (d) above 2009-10 870.86 1174.67 572.22 76.74 447.10 2008-09 Nil 382.17 581.11 Nil Nil -
(b) In the previous year pursuant to the notication GSR 225(E) issued by Ministry of Corporate Affairs relating to Accounting Standard 11 Effect of changes in Foreign Exchange Rates, the Company has exercised the option to capitalize exchange differences on translation of long term foreign currency monetary items on depreciable capital assets. Accordingly, the foreign exchange difference of Rs. 52.24 Lakhs (31.03.2009 Rs.105.15 Lakhs including foreign exchange gain of Rs. 65.04 Lakhs relating to the earlier year and adjusted to General Reserve as on 1st April, 2008) on translation of long term foreign currency monetary items relating to acquisition of xed assets has been capitalized and depreciated over the remaining useful life of the xed assets. 20. EARNINGS PER SHARE Year ended 31st March 2010 4507.23 74358735 74358735 2 6.06 6.06 Year ended 31st March 2009 2904.38 74358735 74358735 2 3.91 3.91
a. b. c. d. e.
Prot after Tax (Rs. Lakhs) Weighted average number of Equity Shares outstanding during the year Weighted Average number of Equity Shares in computing diluted Earnings Per Share Face value of each Equity Share (Rs.) Earnings Per Share - Basic (Rs.) - Diluted (Rs.)
21. RELATED PARTY DISCLOSURES: (A) Information relating to Related Party transactions as per Accounting Standard 18 notied by the Companies (Accounting Standards) Rules, 2006. Name of the Related Party IDL Buildware Limited Gulf Carosserie India Limited Gulf Oil Bangladesh Limited PT Gulf Oil Lubricants Indonesia Gulf Oil (Yantai) Limited, China Hinduja Infrastructure Limited IDL Speciality Chemicals Limited (formerly IDL Agro Chemicals Limited) Gulf Oil International (Mauritius) Inc Mr. S.Pramanik, Managing Director Upto 28th March, 2010 Entity holding more than 20% of the shareholding in the Company Key Management Personnel Subsidiary Relationship
58

(B) Details of transactions between the Company and Related Parties and the status of Outstanding balances at the year end: Rs. Lakhs Entity holding more than 20% of the shareholding in the Company 2009-10 2008-09 498.91 619.83 467.26 510.07 Key Management Personnel 2009-10 0.06 79.50 2008-09 0.05 69.22
Particulars
Subsidiaries 2009-10 2008-09 0.36 0.85 10.59 3103.97 123.31 6374.14 87.04 6374.14 5.00 6398.14 203.41 3103.97 447.26 5.29 -
Sales PT Gulf Oil Lubricants Indonesia IDL Speciality Chemicals Limited Gulf Oil (Yantai) Limited, China Royalty Gulf Oil International (Mauritius) Inc. Purchase & Other Services IDL Speciality Chemicals Limited Advances given /(Received) IDL Speciality Chemicals Limited IDL Buildware Ltd., Gulf Carosserie India Limited Advances Received towards sale of land IDL Speciality Chemicals Limited Transfer of Undertaking Transfer of Speciality Chemicals Division Transfer of Agro Undertaking Investment in Equity Shares IDL Speciality Chemicals Limited Hinduja Infrastructure Limited Dividend paid Gulf Oil International (Mauritius) Inc. S.Pramanik Provision for Diminution in value of Investments IDL Speciality Chemicals Limited IDL Buildware Limited Provisions made for Advances IDL Speciality Chemicals Limited IDL Buildware Ltd., Gulf Carosserie India limited Directors Remuneration Outstanding balances: (a) Receivables IDL Speciality Chemicals Limited PT Gulf Oil Lubricants Indonesia (b) Payables Gulf Oil International (Mauritius) Inc. (c) Corporate Guarantee (given) Gulf Oil Bangladesh Limited 397.80 441.00 424.07 397.17 43.75 15.38 26.33 160.00 (1966.88) (6.37) 0.09 41.66 17.06 0.57
59

22. Disclosure as required by Accounting Standard 19, Leases notied by the Companies (Accounting Standards) Rules, 2006 are given below: (a) Operating Lease: (i) Where the Company is a Lessee: The Companys signicant leasing arrangements are in respect of operating leases for premises (residences, ofce, storage godowns for nished goods etc.). The leasing arrangements, which are not non-cancellable range generally between 11 months to 5 years and are usually renewable by mutual consent on agreed terms. The aggregate lease rents payable are charged as rent in the Prot and Loss Account. The Company has taken certain Plant and Machinery under non-cancellable leases Rs. Lakhs 31 March 2010 Payments later Payments than one year not later but not later than than one ve years year
st
Total Total of future minimum payments at the balance sheet date
Total
31 March 2009 Payments Payments later than one year not later but not later than one than ve years year
st
3056.01
1225.53
1830.48
4211.43
1225.82
2985.61
Lease Rent on the aforesaid plant and machinery amounting to Rs. 1229.53 Lakhs. (Previous year Rs.1195.29 Lakhs) has been charged to Prot and Loss Account under rent. (ii) Where the Company is Lessor: Details in respect of assets given on operating lease: Gross Block 31st March 2010 71.09 80.32 31st March 2009 71.09 80.32 Accumulated Depreciation as on 31st March 2010 7.14 54.46 31st March 2009 5.86 50.64 Rs.Lakhs Depreciation for the year 2009-10 1.28 3.82 2008-09 1.28 3.82
Building Plant & Machinery
The assets given on lease are not non-cancellable and range generally between 11 months to 5 years and are usually renewable by mutual consent, on agreeable terms. The aggregate lease rentals are recognised as income from property in the Prot and Loss account. Initial direct costs are recognised as an expense in the year in which these are incurred. b) Hire Purchase: (i) The Company has taken plant and machinery, motor vehicles under hire purchase arrangements for which the ownership will be transferred to the Company at the end of the hire purchase term.
(ii) Reconciliation between the total of minimum hire purchase payments at the balance sheet date and the present value: Rs. Lakhs 31st March 2010 Total Payments Payments not later later than than one one year year but not later than ve years Total of minimum hire purchase payments at the balance sheet date 468.33 Less: Future Finance Charges 45.86 Present value of minimum hire purchase payments at the balance sheet date 422.47 259.29 32.60 209.04 13.26 Total 31st March 2009 Payments Payments not later later than than one one year but year not later than ve years
322.14 30.56
211.44 22.11
110.70 8.45
226.69
195.78
291.58
189.33
102.25
60

23. SEGMENT INFORMATION FOR THE YEAR ENDED 31st MARCH 2010 (i) Primary Business Segments
Explosives 2010 REVENUE External Inter-segment Total Revenue RESULT Segment result Unallocated Corporate Income net of unallocated Expenses Interest Expense Interest Income Dividend Income Prot before Taxation & Exceptional Expenditure Exceptional Item Net Prot OTHER INFORMATION Segment Assets Segment Liabilities Capital Expenditure Depreciation 15646.64 16012.24 11672.55 13905.31 46840.14@ 47819.92 19600.60 27361.92 9212.86 507.49 271.16 9395.77 311.18 254.26 3966.19 471.96 1161.72 5425.05 1938.79 1009.90 12301.63 21224.99 4328.82 167.57 202.59 272.06 204.07 8.40 6.01 10.02 6088.87 7922.65 99857.20 113032.06 57580.26 71750.72 1158.42 1700.79 6850.85 1537.24 2676.51 495.69 (1042.07) 1179.52 1050.00 3606.55 2333.97 0.80 (2.75) 5241.79 1153.48 5056.43 1247.37 28739.14 25102.67 19565.12 21114.54 1050.00 49569.19 45100.07 140.56 143.03 29.82 29.82 11.41 11.41 2352.28 2352.28 2445.99 2445.99 (140.56) (140.56) 100255.55 94824.68 (143.03) 2009 Mining & Infrastructure Contracts 2010 2009 Property Development 2010 2009 Lubricating Oils 2010 2009 2010 Others 2009 Unallocated 2010 2009 Eliminations 2010 2009 2010
Rs. Lakhs
Total 2009
28739.14 25102.67 19565.12 21114.54
1050.00 49709.75 45243.10
(143.03) 100255.55 94824.68
(2751.35) (2917.29) 200.28 1.42 3845.62 (1584.61) 5430.23 486.93 1.97 3875.41 3875.41
13.01 32093.57 35691.90 11.40 65.32 69.01
@ includes Rs.41848.95 Lakhs (31.03.2009 Rs. 43799.82 Lakhs) arising on revaluation of xed assets (refer note 27 of Schedule 18). (ii) Information about Secondary Business Segments India 2010 Revenue by Geographical market on FOB basis Inter Segment Total Carrying amount of segment assets Additions to Fixed Assets (iii) Notes: (a) Business Segment: The Company has considered business segment as the primary segment for disclosure Segments have been identied and reported taking into account the Organisation structure, the nature of products and services, the deferring risks and returns of the segments The business segments of the Company are (i) Explosives, (ii) Consult dealing in Mining & Infrastructure Contracts, (iii) Property Development (iv) Lubricating Oils, (v) Others (b) Geographical Segment: The Geographical segments considered for disclousure are as follows: Revenue within India includes sales to customers located within India and earnings in India Revenue outside India includes sales to customers located outside India and earnings outside India 94226.21 94226.21 1158.42 2009 90685.31 90685.31 6850.85 Outside India 2010 6029.34 6029.34 1916.34 2009 Total 2010 2009 94824.68 94824.68 6850.85 Rs. Lakhs
4139.37 100255.55 2877.03 4139.37 100255.55 1158.42
97940.86 110155.03
99857.20 113032.06
61

24. Exceptional items comprise: (a) (b) Compensation under Voluntary Retirement Scheme Amounts received from Subsidiaries against advances made and adjusted to Revaluation Reserve in pursuance of Scheme of Arrangement approved by the Honourable High Court of Andhra Pradesh, Hyderabad in 2008-09 Prot on sale of long term investment (Net) Total Rs. Lakhs (435.56) 1973.25
(c)
46.92 1584.61
25. The Honourable Supreme Court vide its order dated 16.11.2007, held that the stock transfers constituted inter sale in respect of 10 years assessment year viz. 1976-77 to 1983-84,1989-90 & 1990-91 and also directed the authorities to examine the factual aspects and assess tax on the supplies made by the Company to the subsidiaries of Coal India Limited as inter state sale. The Company has led writ petitions in the High Court of Orissa in August 2009 impleading other State Governments, CIL and its subsidiary Companies seeking directions for issue of C forms and transfer of local sales tax to the State of Orissa. The Company has been directed by the Honourable High Court of Orissa to approach the appropriate forum for redressal. The Company has been legally advised that as per the settled cases, the Company is entitled for concessional sales tax rates as per Central Sales Tax and interest should be charged from recomputation order. However, necessary provision has been made and is included as Provision Indirect Taxes and no further liability is expected on this account. 26. INCOME FROM PROPERTY DEVELOPMENT: The Company in an earlier year entered into Option for Development Rights with Hinduja Reality Ventures Ltd., (HRVL), wherein HRVL has only the right to decide whether or not to exercise the option to acquire the development rights in respect of certain properties of the Company located at Hyderabad and Bengaluru. The offer of grant of the development rights in respect of the Bengaluru / Hyderabad properties was extended upto 30th June, 2009 and 31st December 2009 respectively. In consideration of the Company agreeing to keep such offer open, HRVL paid an amount of Rs. 1050 Lakhs in the previous year on a non refundable commitment amount, which has been included under Income from Property Development in the Prot and Loss Account of nancial year 2008-09. If the option for development is exercised by HRVL, Development Agreement for the respective properties would be entered with the Company, wherein the Company shall be entitled to share of gross sale proceeds (as determined in the agreement) realised from sale of buildings constructed on the said properties. During the year, the option for development rights had expired and revised proposals are under consideration. 27. Land meant for property development situated at Bengaluru and Hyderabad had been revalued as at 31st March, 2008, based on a valuation by an approved valuer. The resultant surplus on such revaluation amounting to Rs. 183,896.69 Lakhs had been credited to Revaluation Reserve in the previous years. In view of steep recession in the realty sector, management has reassessed the valuation of the aforesaid properties as on 31st March, 2009 and based on the guidelines issued by the Registration and Stamps Department of Karnataka & Andhra Pradesh, the value of the subject lands has been reassessed and, the resultant surplus on revaluation amounted to Rs. 43799.82 Lakhs. The resultant write down aggregating to Rs. 140096.87 Lakhs has, in accordance with the requirement of Accounting Standard-10 Accounting for Fixed assets been debited to Revaluation Reserve in the previous year. During the year, the Company has entered into Agreement to Sell 4.75 acres of land to IDL Speciality Chemicals Limited. Since the aforesaid parcel of land is no longer meant for Property development, an amount of Rs. 1950.87 Lakhs has been withdrawn from Revaluation Reserve. 28. Loans and Advances, considered good include Rs. 813.89 Lakhs (31.03.2009 Rs. 813.89 Lakhs) in respect of Cenvat credit claimed on tippers and subsequently reversed on receipt of a show cause notice from the Excise Authorities. Management is of the view that the Company is entitled to avail such credits and the matter is being currently contested before the appropriate authorities. 29. Previous years gures have been regrouped / recast wherever necessary. For and on behalf of the Board of Directors Place : Mumbai Date : 14th May 2010 S. SUBRAMANIAN Chief Financial Ofcer & Company Secretary S. PRAMANIK Managing Director S. G. HINDUJA Chairman
62
STATEMENT UNDER SECTION 212 OF THE COMPANIES ACT, 1956

Rs. Lakhs
Name of the Subsidiary Financial Year ending of the Subsidiary Number of shares Extent of Holding For the Financial years of the Subsidiary For the previous Financial Years since it became a Subsidiary
Prots/(Losses) Prot/(Losses) Prots/(Losses) Prot/(Losses) dealt with in the not dealt with in the dealt with in the not dealt with in the Books of Accounts Books of Accounts Books of Accounts Books of Accounts of the Holding of the Holding of the Holding of the Holding Company (Except Company Company (Except Company to the extent dealt to the extent dealt with in Col.6) with in Col.8) (1) IDL BUILDWARE LIMITED GULF CARROSSERIE INDIA LIMITED GULF OIL BANGLADESH LIMITED PT GULF OIL LUBRICANTS INDONESIA GULF OIL (YANTAI) COMPANY LTD. HINDUJA INFRASTRUCTURE LIMITED (2) 31.03.2010 31.03.2010 31.03.2010 31.03.2010 31.03.2010 31.03.2010 (3) 1970000 380001 177939 15000 4132540 50000 (4) 100% 95% 51% 75% 51% 100% (5) (180.74) (0.23) 49.73 41.64 43.15 0.07 (6) Nil Nil Nil Nil Nil Nil (7) (348.86) (109.36) (69.91) (232.64) (21.46) (0.54) (8) Nil Nil Nil Nil Nil Nil
Place: Mumbai Date : 14th May 2010
S.SUBRAMANIAN Chief Financial Ofcer & Company Secretary
S.PRAMANIK Managing Director
S.G.HINDUJA Chairman
63
SCHEDULE 1 Information pursuant to Part IV of Schedule VI of the Companies Act, 1956 BALANCE SHEET ABSTRACT & COMPANYS GENERAL BUSINESS PROFILE I. Registration Details Registration No. State Code 8 7 6 Balance Sheet Date 3 1 . 0 3 . 1 0 II. Capital raised during the year: (Amount in Rs. thousands) Public Issue N Bonus Issue III. I L Private placement N I L Rights Issue N I L
N I L Position of Mobilization and Deployment of Funds: (Amount in Rs. thousands) Total Liabilities 9 9 8 Sources of funds Paid up Capital 1 4 Convertible Warrants Secured Loans 1 7 0 Application of funds Fixed Assets 5 8 1 Current Assets 3 8 5 Accumulated Losses 5 7 2 0 Total Assets 9 9 8 5
7 N
1 I 5
7 L 1
Reserves & Surplus 4 0 7 Unsecured Loans 1 3 4 Current Liabilities 2 7 0 Investments
8 1 9
9 2 2
7 8 9
7 3 2
0 4
3 9
8 3
7 2
3 0 5 Deferred Tax Asset (Net) 1 4 Misc. Expenditure
7 6 N
7 2 I
4 7 L
IV.
N I L Performance of Company: (Amount in Rs. thousands) Turnover 1 1 0 7 9 9 8 5 Prot /Loss before Tax 5 4 3 0 2 3 Earning per Share (Rs.) 6 . 0 6 IDL DIVISIONS 1. Ind Explosives Permitted Types 2. 3. 4. 5. 6. 7. 8. 9. 10. Other Detonating Fuse Detonators Containing and Explosives Electrically Ignited, Not-ordinance Detonators, Plain Not-ordinance Fresh (Cut Flowers) Lubricating Oils Brake Fluids Coolant 2T Oils S. SUBRAMANIAN Chief Financial Ofcer & Company Secretary
Total Expenditure 1 0 5 3 Prot /Loss after Tax 4 5 Dividend Rate %
6 0
9 7
6 2 9
2 3 0
V.
General Name of principal products/ services of Company (As per monetary terms) 3 3 3 3 3 0 6 6 6 6 6 6 0 0 0 0 0 0 2 3 3 3 2 2 3 3 3 3 7 8 8 8 0 0 0 0 0 1 1 1 1 2 0 0 0 0 0 3 0 1 9 4 . . . . . . . . . . 0 0 0 1 1 1 9 0 0 9 1 9 1 1 2 1 5 0 0 0
LUBRICANTS DIVISIONS
64
AUDITORS REPORT TO THE BOARD OF DIRECTORS OF GULF OIL CORPORATION LIMITED

1. We have audited the attached Consolidated Balance Sheet of Gulf Oil Corporation Limited (the Company) and its subsidiaries (the Company and its subsidiaries constitute the Group) as at 31st March, 2010, the Consolidated Prot and Loss Account and the Consolidated Cash Flow Statement of the Group for the year ended on that date, both annexed thereto. These nancial statements are the responsibility of the Companys Management and have been prepared on the basis of the separate nancial statements and other nancial information regarding components. Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the nancial statements. An audit also includes assessing the accounting principles used and the signicant estimates made by the Management, as well as evaluating the overall nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We did not audit the nancial statements of the subsidiaries whose nancial statements reect total assets of Rs.5944.90 lakhs as at 31st March, 2010, total revenues of Rs. 6743.28 lakhs and net cash ows amounting to Rs. 271.57 lakhs for the year ended on that date as considered in the Consolidated Financial Statements. These nancial statements have been audited by other auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts included in respect of these subsidiaries is based solely on the reports of the other auditors. We report that the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard 21 (Consolidated Financial Statements), as notied under the Companies (Accounting Standards) Rules, 2006. Based on our audit and on consideration of the separate audit reports on individual nancial statements of the Company and its aforesaid subsidiaries and to the best of our information and according to the explanations given to us, in our opinion, the Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31st March, 2010;
2.
3.
4.
5.
(ii) in the case of the Consolidated Prot and Loss Account, of the loss of the Group for the year ended on that date and (iii) in the case of the Consolidated Cash Flow Statement, of the cash ows of the Group for the year ended on that date. For Deloitte Haskins & Sells Chartered Accountants (Registration No. 008072S) K. RAJASEKHAR Partner (Membership No.23341) Place: Hyderabad Date: 14th May 2010
65
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2010

Schedule I. SOURCES OF FUNDS 1. Shareholders Funds (a) Capital (b) Reserves & Surplus 2. Minority Interests 3. Loan Funds (a) Secured Loans (b) Unsecured Loans 3 4 17217.17 13465.69 30682.86 TOTAL II. APPLICATION OF FUNDS 1. Goodwill on Consolidation 2. Fixed Assets (a) Gross Block (b) Less : Depreciation (c) Net Block (d) Capital Work-in-Progress and advances on Capital Account 2. Investments 3. Deferred Tax Asset (Net) 4. Current Assets, Loans and Advances (a) Inventories (b) Sundry Debtors (c) Cash and Bank Balances (d) Loans and Advances Less: Current Liabilities and Provisions (a) Current Liabilities (b) Provisions Net Current Assets TOTAL Notes on the Accounts 17 Schedules 1 to 17 annexed hereto form part of these anancial statements Per our report attached For Deloitte Haskins & Sells Chartered Accountants K. RAJASEKHAR Partner Place : Hyderabad Date : 14th May 2010 S. SUBRAMANIAN Chief Financial Ofcer & Company Secretary 11 12 15784.58 12610.16 28394.74 14023.32 74921.73 19842.23 12225.94 32068.17 22731.60 91756.42 7 8 9 10 13513.27 12877.27 9474.25 6553.27 42418.06 18308.00 18254.41 10144.74 8092.62 54799.77 6 5 72469.05 13630.98 58838.07 1233.04 60071.11 142.45 211.57 78934.11 12970.00 65964.11 1489.07 67453.18 152.38 1188.78 473.28 230.48 74921.73 17196.85 23767.91 40964.76 91756.42 1 2 1487.17 40899.20 42386.37 1852.50 1487.17 47390.56 48877.73 1913.93 As at 31st March 2010 Rupees Lakhs As at 31st March 2009 Rupees Lakhs
For and behalf of the Board of Directors S. PRAMANIK Managing Director S. G. HINDUJA Chairman
66
CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010
Schedule
1. INCOME Income from sales and other operations Less: Excise Duty Net Income from sales and other operations Income from Property Development Other Income 13 2. EXPENDITURE Cost of Materials Other Operating Expenses Interest Expenses Depreciation
Year ended 31st March 2010 Rupees Lakhs

113302.57 9032.56 104270.01 2669.53 106939.54 52939.33 47021.03 2625.94 1983.29 104569.59 2369.95 3988.36 573.23 1009.04 2406.09 (1618.41) 2047.00 562.32 (4227.73) (1821.64) (103.09) (1924.73) 3092.69 1167.96 1338.46 222.30 500.00 (892.80) (Rs. 2.45) (Rs. 2.45) 107840.91 8763.35
Year ended 31st March 2009 Rupees Lakhs
99077.56 1050.00 2565.85 102693.41 52246.65 44564.62 2620.41 2099.14 101530.82 1162.59 4128.57 1007.14 3121.43 (2965.98) (1006.56) (1959.42) 1162.01 (112.13) 1049.88 3804.70 87.04 4941.62 1264.10 214.83 370.00 3092.69 Rs. 1.56 Rs. 1.56
14 15 15A
3. PROFIT BEFORE EXCEPTIONAL ITEMS AND TAXATION 4. PROFIT FROM CONTINUING OPERATIONS BEFORE EXCEPTIONAL ITEMS AND TAXATION Less: Exceptional items 16 Less: Taxation 16A PROFIT FROM CONTINUING OPERATIONS AFTER TAXATION 5. LOSS FROM DISCONTINUED OPERATIONS BEFORE LOSS ON SALE OF API UNDERTAKING AND TAXATION Less: Loss on sale of API undertaking Less: Taxation 16B LOSS FROM DISCONTINUED OPERATIONS AFTER TAXATION 6. (LOSS)/PROFIT AFTER TAXATION BEFORE MINORITY INTEREST Share of Minority Interest 7. (LOSS)/PROFIT FOR THE YEAR Balance Prot brought forward from previous year Adjustment of debit balance in respect of Agro undertaking in terms of Scheme of Arrangement (Refer note 3.2 of Sch 17) 8. BALANCE AVAILABLE FOR APPROPRIATION Proposed Dividend Dividend Tax Transfer to General Reserve Balance Carried to Balance Sheet Earnings per share (Note 12) - Basic - Diluted Notes on the Accounts 17 Schedules 1 to 17 annexed hereto form part of these nancial statements
Per our report attached For Deloitte Haskins & Sells Chartered Accountants K. RAJASEKHAR Partner Place : Hyderabad Date : 14th May 2010 S. SUBRAMANIAN Chief Financial Ofcer & Company Secretary
For and behalf of the Board of Directors S. PRAMANIK Managing Director S. G. HINDUJA Chairman
67
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
2009-2010 Rupees Rupees Lakhs Lakhs (A) CASH FLOW FROM OPERATING ACTIVITIES Net Prot/(Loss) before tax and after exceptional Items Adjustments for: Depreciation Dividend received Miscellaneous Expenditure written off Interest income Prot on sale of Fixed Assets (Net) Loss on sale of Active Pharma Ingredients undertaking Sale of Development Rights in Property Loss on disposal of subsidiary company Loss on sale of long term investment Compensation under Voluntary Retirement Scheme adjusting to Revaluation Reserve Campsite Expenses adjusted to revaluation reserve Interest expenses Lease Equalisation Charge Unrealised (Gain)/Loss on Exchange - Net Operating Prot before Working Capital changes Adjustments for: Trade and other Receivables - (Increase)/ Decrease Inventories - (Increase)/Decrease Trade Payables - Increase /(Decrease) Cash generated from/(used in) Operations Direct Taxes paid (net of refunds) NET CASH FROM / (USED IN) OPERATING ACTIVITIES (B) CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets Sale of Fixed Assets (including land) Sale of Development Rights in Property Proceeds from sale of Active Pharma Ingredients undertaking Sale proceeds on disposal of investment in subsidiary Sale of Investment- Long term Interest Received Dividend Received NET CASH FROM/(USED IN) INVESTING ACTIVITIES (1259.18) 2433.42 2200.00 50.00 6.85 343.63 1.42 3776.14 (6815.60) 2435.16 1050.00 529.90 1.97 (2798.57) 5943.27 4702.45 (3313.42) 7332.30 11486.27 (838.38) 10647.89 (3393.70) (6080.97) 5152.53 (4322.14) (378.07) (853.32) (1231.39) 1983.29 (1.42) (231.03) (2190.94) 2047.00 134.59 3.08 2856.97 (197.29) 4404.25 4153.97 2099.14 (1.97) 21.47 (529.90) (2294.75) (1050.00) (703.01) (101.04) 3150.31 (0.33) 2191.56 2781.48 3944.07 (250.28) 1162.59 2008-2009 Rupees Rupees Lakhs Lakhs

68
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
2009-2010 Rupees Rupees Lakhs Lakhs (C) CASH FLOW FROM FINANCING ACTIVITIES Proceeds from borrowings Proceeds from Fixed Deposits Repayment of borrowing Loans from Companies Repayment of Loans to Companies Interest paid Dividend paid Dividend tax paid NET CASH (USED IN)/ FROM FINANCING ACTIVITIES Net increase/(decrease) in cash and cash equivalents Cash and Cash Equivalents as at the commencement of the year- Cash and Bank Balances Cash and Bank balance on disposal of subsidiary 30393.63 (158.95) (38903.14) 11506.39 (13252.79) (2788.64) (1254.25) (214.83) (14672.58) (248.55) 10144.74 (421.94) 9722.80 Cash and Cash Equivalents as at the end of the year Cash and Bank Balances * 9474.25 16154.56 (131.23) (4478.95) 4741.66 (2594.32) (3197.96) 2008-2009 Rupees Rupees Lakhs Lakhs
(189.56) 9206.39 5176.43 4968.31 4968.31 10144.74
* includes Rs.79.94 Lakhs (31.03.2009 Rs. 51.04 Lakhs) being the deposit made under Rule 3A of the Companies (Acceptance of Deposits) Rules, 1975
Per our report attached For Deloitte Haskins & Sells Chartered Accountants K. RAJASEKHAR Partner Place : Hyderabad Date : 14th May 2010 S. SUBRAMANIAN Chief Financial Ofcer & Company Secretary S. PRAMANIK Managing Director S. G. HINDUJA Chairman For and behalf of the Board of Directors
69
(1097.81)
SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As at 31st March 2010 Rupees Lakhs 1. SHARE CAPITAL AUTHORISED 12,50,00,000 Equity shares of Rs.2 each ISSUED AND SUBSCRIBED 7,43,58,735 Equity shares of Rs.2 each fully paid Of the above (a) 4,65,025 shares represent 93,005 shares after sub-division of shares from Rs.10 to Rs.2 each are allotted as fully paid pursuant to a contract without payment being received in cash (b) 2,60,75,125 shares represent 52,15,025 shares after subdivision of shares from Rs.10 to Rs.2 each are allotted as fully paid up bonus shares by capitalisation of Reserves. (c) Pursuant to the merger scheme as approved by Board for Industrial and Financial Reconstruction, 15,18,735 shares represent 3,03,747 shares after sub-division of shares from Rs.10 to Rs.2 each, allotted effective 31st March, 1999 to the shareholders of erstwhile IDL Salzbau (India) Limited. (d) 2,93,50,000 represent 58,70,000 after sub-division of shares from Rs.10 to Rs.2 each allotted effective 1st January, 2002, consequent to the amalgamation of erstwhile Gulf Oil India Limited, to the shareholders of erstwhile Gulf Oil India Limited 2. RESERVES AND SURPLUS CAPITAL RESERVE ON CONSOLIDATION RESERVE ON CONSOLIDATION (Refer Note 3 of Schedule 17) Less: transfer to General Reserve on sale of Investment in Subsidiary (Refer note 15(a) of Schedule 17) Less: transfer to provision for doubtful advance (Schedule 10) CAPITAL RESERVE SECURITIES PREMIUM ACCOUNT EXPORT ALLOWANCE RESERVE REVALUATION RESERVE Per last Balance Sheet Less: Adjustment on reassesment of revaluation (Refer Note 19 of Schedule 17) Less: Withdrawal from Revaluation Reserve (Refer Note 19 of Schedule 17) Less: Debit balance in the Prot & Loss accounts of Agro undertaking in terms of the Scheme of arrangement (Refer Note 3.2 of Schedule 17) Less: Adjustments as detailed in note 3.4 of Schedule 17 18429.06 1950.87 16478.19 16478.19 16478.19 183896.69 140096.87 43799.82 87.04 43712.78 25283.72 18429.06 10358.07 8365.02 1137.09 855.96 0.75 4852.45 10.50 0.03 10358.07 10358.07 8.25 4852.45 10.50 0.03 1487.17 1487.17 2500.00 2500.00 As at 31st March 2009 Rupees Lakhs
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As at 31st March 2010 Rupees Lakhs 2. RESERVES AND SURPLUS (CONTD.) GENERAL RESERVE At commencement of the year Add: Transfer from Prot and Loss Account Add: Transfer from Reserve on consolidation on disposal of subsidiary (Refer note 15(a) of Schedule 17) Less: Adjustment on account of exchange difference capitalised FOREIGN CURRENCY TRANSACTION RESERVE PROFIT AND LOSS ACCOUNT 19509.50 84.62 (892.80) 40899.20 3. SECURED LOANS A. From Banks (i) Cash Credit (includes Working Capital Demand Loan) (ii) Bank Overdraft (iii) Foreign Currency Working Capital Loan [USD 2.25 million (31.03.2009 USD 2.25 million)] (iv) Term Loans (a) State Bank of India (b) State Bank of Hyderabad (c) Oriental Bank of Commerce (d) ABN Amro Bank (e) Andhra Bank (f) Kotak Mahindra Bank Limited (g) Southeast Bank Limited (h) State Bank of Mauritius Limited B. From Others SREI Infrastructure Finance Limited Hinduja Ventures Limited 4. UNSECURED LOANS Fixed Deposits [ See note 7(f) of Schedule 17] Deferred Hire Purchase Credits ICICI Bank Limited Short Term Loan from IDBI Bank Limited SREI Infrastructure Finance Limited Buyers credit - Long term - Short term Dealers deposits Inter Corporate Loans - Short term 510.69 429.66 2000.00 104.48 10306.94 76.45 37.47 13465.69 140.83 304.81 283.73 1550.00 152.20 675.04 20510.06 78.70 72.54 23767.91 404.12 625.29 17217.17 781.80 2367.36 17196.85 769.14 4754.49 35.58 215.46 103.63 264.27 61.74 1960.00 1478.36 2865.03 124.49 815.93 187.64 366.25 35.20 6926.88 80.92 1015.65 6994.57 39.02 1141.20 65.04 10644.48 (4.97) 3092.69 47390.56 10644.48 500.00 8365.02 10339.52 370.00 As at 31st March 2009 Rupees Lakhs
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5. FIXED ASSETS
Gross Block 31.03.2009 Adjustment on Additions Deductions Impairment Currency 31.03.2010 31.03.2009 Revaluation Realignment Assets on Own Use: Land-Freehold Land-Leasehold Buildings Leasehold Improvements Plant & Machinery Equipments etc. Furniture, Fixtures & Ofce appliances Vehicles Technical Knowhow 47550.02 530.07 4469.42 6.80 23622.88 1732.29 822.65 144.08 7.62 78885.83 Assets given on Lease Vehicles Furniture & Fixtures 14.68 33.60 48.28 78934.11 31-03-2009 212364.43 140096.87 1471.44 6843.29 7610.26 282.53 516.63 (1.06) (1.06) (326.24) 622.42 13.62 33.60 47.22 72469.05 78934.11 4.98 32.28 37.26 12970.00 11370.88 2.07 0.13 2.20 1983.29 2099.14 1254.57 142.14 464.67 (0.22) (0.22) (67.74) 106.79 6.83 32.41 39.24 13630.98 12970.00 6.79 1.19 7.98 58838.07 9.70 1.32 11.02 65964.11 1471.44 4.92 1231.10 79.89 154.86 0.67 7.62 7610.26 2070.15 1145.36 4258.83 70.55 57.75 (117.68) (18.28) (8.67) (1.36) (325.18) (66.75) (112.44) 45479.87 463.32 3216.54 6.80 20477.47 1723.35 911.09 143.39 72421.83 28.28 1171.50 6.80 10185.61 953.44 445.70 141.41 12932.74 2.60 127.63 1635.57 140.44 74.28 0.57 1981.09 103.87 1105.25 21.92 23.53 1254.57 (3.10) (14.76) (33.72) (11.18) (4.39) (0.37) (67.52) 27.78 1180.50 6.80 10682.21 1060.78 492.06 141.61 13591.74 45479.87 435.54 2036.04 9795.26 662.57 419.03 1.78 58830.09 47550.02 501.79 3297.92 13437.27 778.85 376.95 2.67 7.62 65953.09 For the year Depreciation On Impairment Currency Deduction Realignment 31.03.2010
Rupees Lakhs
Net Book Value 31.03.2010 31.03.2009
Live Stock
Notes:(1) Assets costing Rs. 948.57 lakhs (previous year Rs.300.36 lakhs) have been acquired on hire purchase, the legal ownership of which will be transferred to the Company after the nal payment. (Refer Note 14 (b) of Schedule 17) (2) Additions to Plant & Machinery include Rs. 52.24 Lakhs (previous year Rs. 105.15 Lakhs) being difference in foreign exchange loan obtained for acquisition of xed assets. (Refer Note 11 (b) of Schedule 17) (3) Deduction under land includes Rs. 1950.87 Lakhs withdrawn from Revaluation Reserve. (Refer Note 19 of Schedule 17)
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As at 31st March 2010 Rupees Lakhs 6. INVESTMENTS At cost, unless otherwise stated LONG TERM QUOTED OTHERS Ashok Leyland Limited 1,00,000 Equity Shares of Re.1 each Hinduja TMT Limited 96 Equity Shares of Rs. 10 each Jammu & Kashmir Bank Ltd. 2,400 Equity Shares of Rs.10 each IndusInd Bank Limited 400 (31.03.2009 15,023 shares) Equity Shares of Rs. 10 each fully paid UNQUOTED OTHERS 500 Shares of Rs.10 each in IDL Chemicals Employees Co-operative Credit Society Limited, Hyderabad 500 Shares of Rs.10 each in IDL Chemicals Employees Co-operative Credit Society Limited, Rourkela 27,978 units of Rs.10 each in UTI Bond Fund of Unit Trust of India Pachora Peoples Co-operative Bank Limited 2 shares of Rs.100 each APDL Estate Limited (formerly IDL Arom International Limited) Preference Shares of Rs. 100 each Less: Diminution in value (Refer note 3.4 of Schedule 17) Gulf Ashley Motors Limited 1,14,000 Equity Shares of Rs.100 each Patancheru Enviro-Tech Limited 58,460 Equity Shares of Rs. 10 each Notes: 1. Aggregate Carrying cost of quoted investments 2. Aggregate Market Value of quoted investments 3. Aggregate cost of unquoted investments 25.38 56.24 117.07 32.31 30.47 120.07 2362.00 2362.00 114.00 142.45 2362.00 2362.00 114.00 3.00 152.38 0.05 0.05 24.23 0.06 0.91 0.18 24.23 0.06 0.91 7.11 As at 31st March 2009 Rupees Lakhs
0.05
0.05
2.97 -
2.97 -
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As at 31st March 2010 Rupees Lakhs 7. INVENTORIES (At lower of cost and net realisable value) Land / Building for Property development, at cost Contract Work-in-progress Stores & Spares Packing Materials and Fuel Raw Materials Work-in-Process Finished Goods 25.63 524.88 564.00 7113.98 897.00 4387.78 13513.27 8. SUNDRY DEBTORS - UNSECURED (a) Debts outstanding for a period exceeding six months: Considered good Considered doubtful (b) Other Debts : Considered good Less : Provision for doubtful debts 9. CASH AND BANK BALANCES Cash / Cheques on hand # With Scheduled Banks : Current Account Fixed Deposits/Margin account * # includes cheques on hand Rs. 1254.40 lakhs (31.03.2009 Rs. 389.82 lakhs) * includes Rs. 79.94 Lakhs (Previous year : Rs. 51.04 Lakhs) being the deposit made under Rule 3A of the Companies (Acceptance of Deposits) Rules, 1975 10. LOANS AND ADVANCES (Unsecured, considered good unless otherwise specied) Advance to Companies IDL Speciality Chemicals Limited (formerly IDL Agro chemicals Limited) Less: Provision for doubtful advances (refer note 15(a) of Schedule 17) Advance Tax (net of Provisions) Advances recoverable in cash or in kind or for value to be received: Considered good Considered doubtful Less : Provision for doubtful advances Balance with Excise Authorities 4512.85 176.84 4689.69 176.84 4512.85 1480.39 6553.27 5543.29 86.84 5630.13 86.84 5543.29 2233.29 8092.62 1137.09 1137.09 560.03 316.04 1814.40 6376.85 9474.25 2775.75 6952.81 10144.74 11457.03 16609.04 3731.77 12877.27 1283.00 16312.42 22314.96 4060.55 18254.41 416.18 1420.24 3731.77 1941.99 4060.55 117.91 382.17 534.55 428.09 9645.52 1040.24 6159.52 18308.00 As at 31st March 2009 Rupees Lakhs
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As at 31st March 2010 Rupees Lakhs 11. CURRENT LIABILITIES Acceptances Sundry Creditors Due to Micro and Small Enterprises Others Advance from Customers Interest accrued but not due on Loans Liability towards Investors Education and Protection Fund under Due (i) Unpaid Dividends 75.29 7.77 0.73 15784.58 12. PROVISIONS Employee benets - Gratuity - Compensated Absences Indirect Taxes * Others * Fringe Benet Tax Proposed dividend Tax on dividend * Refer Note 3.4 of Schedule 17 1400.10 313.54 8394.10 893.55 48.11 1338.46 222.30 12610.16 1162.40 248.61 8394.10 893.55 48.35 1264.10 214.83 12225.94 0.04 65.40 38.21 2.40 19842.23 (ii) Unclaimed Matured Deposits (iii) Interest accrued on (ii) above Not due (i) Unpaid Dividends (ii) Unclaimed Matured Deposits (iii) Interest accrued on (ii) above Section 205C of the Companies Act, 1956 13969.69 1222.40 104.49 14199.73 2285.20 34.88 404.21 3216.37 As at 31st March 2009 Rupees Lakhs
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Year ended 31st March 2010 Rupees Lakhs 13. OTHER INCOME Dividend from Long Term Investment Prot on Sale of Property / Fixed Assets Insurance Claims Export Incentives (DEPB) Provision no longer required written back Miscellaneous 1.42 2246.84 10.57 174.60 236.10 2669.53 1.97 2294.75 45.88 86.73 41.00 95.52 2565.85 Year ended 31st March 2009 Rupees Lakhs
14. COST OF MATERIALS Raw Materials Consumed : Opening Stock On acquisition of subsidiary during the year Add : Purchase Less : Closing Stock Less : Stock transfer to Biocon Limited Purchase of Finished Goods (Increase)/Decrease in Finished Goods, Work-in-Process and Contracts-in-progress: Closing Stock : Finished Goods Work-in-Process Contracts-in-Progress Opening Stock : Finished Goods Work-in-Process Contracts-in-Progress Less: (i) Stock transfer to Biocon Limited (refer note 15(b) of Schedule 17) (ii) Adjusted against Revaluation Reserve (Refer note 3 of Schedule 17) Packing Materials Consumed Less: Scrap realisation Excise duties etc. on Increase/(Decrease) of Finished Goods 6159.51 1040.24 382.17 7581.92 77.24 7504.68 4911.74 1526.88 6438.62 16.16 6422.46 4387.78 897.00 5284.78 6159.51 1040.24 382.17 7581.92 9645.53 38715.81 48361.34 7113.98 0.70 41246.66 6054.56 4998.38 47938.13 52936.51 9645.52 43290.99 6880.81
2219.90 3674.32 53195.44 211.77 52983.67 (44.34) 52939.33
(1159.46) 3518.42 52530.76 208.73 52322.03 (75.38) 52246.65
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Year ended 31st March 2010 Rupees Lakhs 15. EXPENSES Payments to and provisions for Employees : Salaries, Wages and Bonus Contribution to Provident Fund, Gratuity Fund and other Funds Workmen and Staff Welfare Expenses Stores, Spare Parts and Loose Tools consumed Processing Charges Power, Fuel and Water Rent Rates and Taxes Expenses on Operation Contracts Insurance Advertising Distribution Expenses Commission on Sales Discount on Sales Repairs to Buildings Repairs to Machinery Travelling & Conveyance Bank charges and other Financial charges Directors Fees Commission to non- wholetime Directors Postage, Telephone and Telex Legal & Professional charges Loss on sale of xed assets Provision for doubtful debts/advances Bad Debts, advances etc written off Less: Provision for doubtful debts written-back Miscellaneous expenditure written off : Deferred Revenue expenses Software expenditure Royalty (Gain) / Loss on Exchange Fluctuation Miscellaneous 593.66 (193.59) 1234.98 47021.03 18.13 3.34 560.90 2978.47 1016.62 44564.62 812.16 743.15 69.01 7045.05 1048.66 649.68 8743.39 319.50 1192.35 815.82 1578.35 473.75 15532.41 298.57 2430.64 4253.00 300.09 6154.56 91.87 382.12 742.24 512.14 21.95 9.84 227.78 508.19 55.90 672.51 6.07 6.07 6406.97 898.98 630.45 7936.40 325.69 862.74 880.71 1480.22 413.24 15500.99 279.14 1377.67 3271.28 275.96 5084.24 54.77 271.28 671.19 487.27 17.64 16.70 230.46 476.21 67.29 Year ended 31st March 2009 Rupees Lakhs
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Year ended 31st March 2010 Rupees Lakhs 15A. INTEREST EXPENSES Interest On Term Loans Others Less: Interest on deposits with banks etc. (Tax deducted at source Rs. 41.21 Lakhs; Previous year Rs. 9.34 Lakhs) Interest on advance payment of taxes 1712.20 1144.77 224.31 2856.97 1324.96 1825.35 416.64 3150.31 Year ended 31st March 2009 Rupees Lakhs
6.72
231.03 2625.94
113.26
529.90 2620.41
16. EXCEPTIONAL ITEMS Compensation under Voluntary Retirement Scheme Loss on sale of investment in subsidiary Loss on sale of Long term Investments 435.56 134.59 3.08 573.23 16A. TAXATION Current Tax MAT Credit Deferred Tax Fringe Benet Tax 594.15 414.89 1009.04 16B. TAXATION IN RESPECT OF DISCONTINUED OPERATIONS Deferred Tax Fringe Benet Tax 562.32 562.32 (1008.13) 1.57 (1006.56) 516.23 (41.00) 415.65 116.26 1007.14 -
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17. NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2010 1 (a) The Consolidated Financial Statements have been prepared in accordance with Accounting Standard 21 (AS 21) - Consolidated Financial Statements notied by the Companies (Accounting Standards) Rules, 2006. The Consolidated Financial Statements have been prepared under historical cost convention and in an accrual basis. The accounting policies have been consistently applied by the Company and are in consistent with those used in the previous year. (b) The subsidiaries (which along with Gulf Oil Corporation Limited, the Parent, constitute the Group) considered in the preparation of these consolidated nancial statements are: Name Country of Incorporation India India India India Bangladesh Indonesia China Percentage of ownership interest as at 31st March 2010 100.00 100.00 (Upto 28th March, 2010) 95.00 100.00 51.00 75.00 51.02 Percentage of ownership interest as at 31st March 2009 100.00 100.00 95.00 100.00 51.00 75.00 51.02
IDL Buildware Limited IDL Speciality Chemicals Limited (formerly IDL Agro Chemicals Ltd.,) Gulf Carosserie India Limited Hinduja Infrastructure Limited Gulf Oil Bangladesh Limited PT Gulf Oil Lubricants Indonesia Gulf Oil (Yantai) Co. Limited
The nancial statements of all the subsidiaries considered in the Consolidated accounts are drawn upto 31st March, 2010, except for IDL Speciality Chemicals Ltd., as disclosed above. 2. ACCOUNTING POLICIES I. FIXED ASSETS: Fixed assets are shown at cost / revalued amount less depreciation. Cost comprises the purchase price and other attributable expenses. II. DEPRECIATION ON FIXED ASSETS: (i) The Group, except Gulf Oil Bangladesh Limited and P.T.Gulf Oil Lubricants, Indonesia and Gulf Oil (Yantai) Co. Limited follows the straight line method of charging depreciation on all its xed assets. Depreciation has been provided in the manner and at the rates prescribed in Schedule XIV to the Companies Act, 1956 on all the assets except certain equipments which are depreciated over their estimated useful life. In respect of Gulf Oil Bangladesh Limited, depreciation on other than leased assets has been provided using straight line method over the estimated useful lives of the assets as summarized below: Ofce equipment 20% Computer/Computer software 25% Vehicles 20% Furniture and Fixtures 10% In respect of leased assets: Ofce equipment Vehicles Furniture and Fixtures 20% 50% 20%
In respect of P.T.Gulf Oil Lubricants, Indonesia, depreciation on furniture and equipment have been computed on a straight-line method, based on the estimated useful life of the related assets, for 4 years or at the rates of 25% p.a. In respect of Gulf Oil (Yantai) Co., Limited, depreciation of xed assets is calculated to write off the cost of xed assets less 10% residual value on a straight-line basis over their anticipated useful lives. The respective anticipated useful lives of xed assets are as follows: Building Machinery and equipment Ofce and other equipment Motor vehicles 20 Years 10 years 5 years 5 years
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(ii) Leasehold land is being amortized in equal installments over the lease period. (iii) Technical Know-how is being amortized over a period of ve to seven years. III. INVESTMENTS: Current Investments are valued at lower of cost and fair value, Long Term Investments are valued at cost. Where applicable, provision is made if there is a permanent fall in valuation of Long Term Investments. IV. INVENTORIES: Inventories are valued at lower of cost and net realisable value. The method of arriving at cost of various categories of inventories is as below: (a) (b) Stores and Spares, Raw and Packing material. Finished goods and work- in-process Manufactured Traded (c) Contracts-in-progress First in First out method / Weighted average method. Weighted average cost of production, which comprises direct material costs, direct wages and appropriate overheads. First in First out method / Weighted average method. Represents expenses incurred on execution of contracts till balance sheet date
V.
FOREIGN CURRENCY TRANSACTIONS: Transactions made during the year in foreign currency are recorded at the exchange rate prevailing at the time of transaction. Assets and Liabilities related to foreign currency transactions remaining unsettled at the year end are translated at the contract rates when covered by forward cover contracts and at year-end rate in other cases. Realised gains and losses on foreign exchange transactions other than those relating to xed assets are recognised in the prot and loss account except gain/loss on transaction of long term liabilities incurred to acquire xed assets is treated as an adjustment to the carrying cost of xed assets. Exchange differences arising on account of the assets or liabilities and income or expenditure of non-integral foreign operations are recorded in foreign currency translation reserve.
VI. REVENUE RECOGNITION: (a) Sale of goods is recognised at the point of dispatch of nished goods to customers. Sales include amount recovered towards excise duty but exclude sales tax. Export incentive under the Duty Entitlement Pass Book scheme has been recognized on the basis of credits afforded in the passbook. (b) Income from services is recognised at the time of rendering the services. (c) Dividend income from investment is recognised when the owners right to receive payment is established. (d) Income from property development is recognised as soon as the contract is entered with the party and the consideration is received. (e) Contract revenue is recognised on percentage completion method as required under revised Accounting Standard -7 - Construction Contracts. The stage of completion is determined as a proportion that contract costs been to the estimated total costs. When it is probable that any stage of the contract that the total cost will exceed the total contract revenue, the expected loss is recognised immediately. VII. RESEARCH AND DEVELOPMENT EXPENSES: Research and Development expenditure of revenue nature is written off in the year in which it is incurred and expenditure of a capital nature is added to xed assets. VIII. EMPLOYEE RETIREMENT BENEFITS: Retirement benets to employees are provided for by means of gratuity, superannuation and provident fund. The gratuity liability is determined based on the actuarial valuation as at the year end. Payments in respect of superannuation are made to the fund administered by LIC. Provision in respect of compensated absences is made based on actuarial valuation as at year end. Contribution to Provident fund is based on dened contribution and expensed as incurred.
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IX. TAXES ON INCOME: Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognised subject to the consideration of prudence in respect of deferred tax assets on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or subsequent periods. X. SEGMENT REPORTING: The accounting policy adopted for Segment Reporting is in line with the accounting policy of the group with the following additional policy for Segment Reporting:Revenue and expenses have been identied to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to the segments on a reasonable basis, have been included under Unallocated Expenses. Inter Segment transfers are at cost. 3. Demerger of Speciality Chemicals Division of the Parent Company and merger of Agro Division of IDL Speciality Chemicals Limited with the Parent Company (the Scheme) in 2008-09.
3.1 Pursuant to a Scheme of Arrangement between the Parent Company and its Subsidiary IDL Speciality Chemicals Limited (IDL SC) and their respective shareholders, which was sanctioned by the Honourable High Court of Andhra Pradesh by its Order dated 24th March, 2009, the assets and liabilities of the Speciality Chemicals Division of the Parent Company were transferred to and vested with IDL SC with effect from 1st April 2008 and the assets and liabilities of Agro Division of IDL SC were transferred and vested with the Parent Company with effect from 1st April, 2008. 3.2 As provided in the Scheme, the debit balance of Rs.87.04 Lakhs in the Prot & Loss Account as at 1st April, 2008 of Agro Division of IDL SC has been adjusted against the Revaluation Reserve of the Parent Company. 3.3 (a) Pursuant to the Scheme, 97,60,000 equity shares of Rs. 10/- each of IDL SC are to be issued to the Parent Company towards Rs. 6374.14 Lakhs, representing the excess of assets over liabilities of the Speciality Chemicals Division (Subsidiary) transferred to IDL SC. The shares were issued during the year. (b) In accordance with the Scheme, the Parent Company was required to discharge the obligations of IDL SC and IDL SC in turn would re-imburse the Parent Company. Accordingly, the liabilities of IDL SC discharged/ to be discharged by the Parent Company aggregating to Rs. 2699.59 Lakhs were included as part of Loans and Advances (Schedule 10). Such liability was discharged during the year. 3.4 The Board of Directors of the Parent Company have, in pursuance of the scheme restated and / or revised certain assets and liabilities including intangibles as at 31st March 2009 and the net effect thereof has been adjusted against Revaluation reserve as detailed below:Adjustments to Revaluation Reserve Receivables which are subject matter of dispute Write down of Inventories taken over from IDL SC Miscellaneous Expenditure Obsolete Fixed Assets Doubtful Advances Diminution in value of long term investment Provision for Indirect Taxes Others Total Rs. Lakhs 1679.12 16.16 1475.45 84.21 3577.58 9163.55 8394.10 893.55 25283.72
3.5 The adjustment to Revaluation Reserve of (a) the debit balance in the prot and loss account of IDL SC as at 1st April 2008, amounting to Rs.87.04 Lakhs (refer Note 3.2 above) and (b) the effect of valuation / restatement / revision of certain assets and liabilities of the Parent Company is Rs. 25283.72 Lakhs (refer note 3.4 above) which was in pursuance of the Scheme approved by the Honble High Court of Andhra Pradesh, at Hyderabad in the previous year. 3.6 The excess of the net asset value over carrying cost of investment in the subsidiary companies viz., IDL Buildware Ltd., and Gulf Oil Carosserie India Ltd., amounting to Rs. 850.67 Lakhs and Rs. 5.29 Lakhs respectively has been treated as Reserve on Consolidation.
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4. MANAGERIAL REMUNERATION 2009-10 Rs. Lakhs 56.63 9.84 9.56 3.47 9.84 89.34 2008-09 Rs. Lakhs 42.49 16.70 7.17 2.86 16.70 85.92
Salaries Commission Contribution to Provident Fund and Superannuation Fund Benets Commission to non-whole time Directors Note:
Having regard to the fact that there is a global contribution to Gratuity Fund, the amount applicable to an individual employee is not ascertainable and accordingly, contribution to Gratuity Fund has not been considered in the above computation.
5.
CONTINGENT LIABILITIES As at 31st March 2010 Rs. Lakhs 397.80 923.10 51.97 2119.85 1305.65 4.49 3.81 75.50 190.39 178.02 As at 31st March 2009 Rs. Lakhs 441.00 330.74 875.31 90.34 20.66 4.49 3.81 83.99 182.76 171.72
(a) Corporate Guarantees * (b) Bills Discounted (c) Claims against the Company not acknowledged as debts (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) Income Tax Demands Wealth Tax Sales Tax Demands Excise Demands Service Tax Additional Demands towards cost of land Claims of workmen/ex-employees Other Matters Performance and Other Guarantees
(d) In terms of the agreement between IDL Speciality Chemicals Limited, Biocon Limited, and the Parent Company for the sale of Active Pharma Ingredients (API) business to Biocon Limited, the Parent Company would be responsible for guaranteeing to Biocon Limited claims upto a period of one year after the closing date i.e., 30th November, 2009 to the extent of purchase price of Rs. 2200 Lakhs. As at 31st March, 2010 the Parent Company has not received any such claims. * The Parent Company has given Corporate Guarantee of 60 Million Taka to South East Bank Limited on behalf of Gulf Oil Bangladesh Limited. The amount outstanding as on 31st March 2010 is 21.51 Million Taka (31st March 2009, 10.09 Million Taka) 6. CAPITAL COMMITMENTS 2009-10 Rs. Lakhs Estimated amount of contracts remaining to be executed on capital account 7. SECURED LOANS: (a) Cash Credit facilities including foreign currency demand loan from Bank of Bahrain & Kuwait B.S.C and working capital & corporate loan from consortium banks is secured by (i) hypothecation of all current assets of the Parent Company including raw materials, nished goods, stocks-in-process, stores and spares (not relating to plant & machinery) and present and future book debts of the Parent Company ranking pari-passu and collateral security by (i) rst pari-passu charge by way of equitable mortgage on land owned by the Parent Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, (ii) second pari-passu charge on manufacturing buildings, plant and machinery charged to term lenders. 29.57 2008-09 Rs. Lakhs 42.21
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(b) (i) Term loan for Capital Expenditure from State Bank of India is secured by rst charge on the xed assets created out of the loan, ranking pari-passu with other term lenders and collateral security by (i) rst paripassu charge by way of equitable mortgage on land owned by the Parent Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad (ii) second pari-passu charge on manufacturing buildings, plant and machinery charged to other term lenders.
(ii) Term Loan for Overseas Investment from State Bank of India is secured by collateral security (i) pari-passu rst charge by way of equitable mortgage on land owned by the Parent Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad and second pari passu charge on manufacturing buildings, plant and machinery charged to the other term lenders. (c) (i) Term loan for Capital Expenditure from State Bank of Hyderabad is secured by rst charge on the xed assets created out of the loan, ranking pari-passu with other term lenders and collateral security by (i) rst pari-passu charge by way of equitable mortgage on land owned by the Parent Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, (ii) second pari-passu charge on manufacturing buildings, plant and machinery charged to other term lenders.
(ii) Term Loan for Overseas Investment from State Bank of Hyderabad is secured by collateral security (i) paripassu rst charge by way of equitable mortgage on land owned by the Parent Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad and (ii) second pari-passu charge on manufacturing buildings, plant and machinery charged to other term lenders. (d) The Term loan for Capital Expenditure from Oriental Bank of Commerce is secured by rst charge on the xed assets created out of the term loan ranking pari-passu with other term lenders and collateral security by (i) rst pari-passu charge by way of equitable mortgage on land owned by the Parent Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad (ii) second pari-passu charge on manufacturing buildings, plant and machinery charged to other term lenders. (e) The Term loan for Capital Expenditure from Andhra Bank is secured by rst charge on the xed assets created out of the loan, ranking pari-passu with other term lenders and collateral security by (i) rst pari passu charge by way of Equitable Mortgage on land owned by the Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, (ii) second pari passu charge on manufacturing buildings, plant and machinery charged to the other term lenders. (f) Fixed Deposits to the extent of Rs. 375.86 Lakhs were secured by a residual charge on all tangible movable property and xed assets including all movable machinery and plant & machinery, spares and stores, tools and accessories and other movables both present and future as approved by the Controller of Capital Issues vide his letter dated 1st November,1980.
(g) Term Loans from ABN Amro Bank NV, SREI Infrastructure Finance Limited, Kotak Mahindra Bank Limited are secured by way of rst charge on specic mining equipment of the Parent Company. (h) Loan received from Hinduja Ventures Limited is secured by an exclusive charge on the Parent Companys land at Yelahanka, Bengaluru. (i) The short term loan taken by Gulf Oil Bangladesh Limited represents the letter of trust facility received from Southeast Bank Limited against the following securities: (i) Primary Security: Hypothecation of imported goods and stocks of nished lube oil/grease/related products. (ii) Collateral Security: First charge on xed and oating assets of the company Lien on duly discharged xed deposit receipt of Rs. 110.97 Lakhs (iii) Additional Comfort: Insurance coverage on stock for re, ood, theft and pilferage 8. FIXED ASSETS Buildings include: (i) Rs.7.09 Lakhs, which represents the cost of ownership ats Rs.7.08 Lakhs and Rs.0.01 Lakhs being the value of Share money in Sett Minar Co-operative Housing Society Limited.
(ii) Rs.4.70 Lakhs, which, represents the cost of ownership ats Rs. 4.43 Lakhs and Rs.0.27 Lakhs being the value of 270 ordinary shares of Rs.100 each, fully paid up in Shree Nirmal Commercial Limited.
83

9. TAXATION (i) Deferred Tax: 31 March 2010
st st
Rs. Lakhs 31 March 2009 1629.43 796.91 468.94 2895.08 1720.73 (14.43) 1706.30 1188.78
(a) Deferred tax assets arising on account of timing differences: Unabsorbed business loss/depreciation Provision for doubtful debts/advances Other timing differences (b) Deferred tax liabilities arising on account of timing differences: Depreciation Other timing differences Deferred tax asset (Net)
55.89 690.11 576.70 1322.70 1116.05 (4.92) 1111.13 211.57
(ii) Management has been advised that Rs.1973.25 Lakhs received against advances adjusted to Revaluation Reserve in the previous year, is not required to be considered in computing Minimum Alternate Tax (MAT). (iii) By way of abundant caution, no deferred tax asset has been created in respect of the adjustments made to Revaluation Reserve as detailed in note 3 of Schedule 17 (iv) In view of losses incurred by IDL Buildware Limited one of the subsidiaries and no taxable income in the current year, the aforesaid Company has not recorded the deferred tax liability as at 31st March 2009 arising on account of timing differences as stipulated in Accounting Standard-22 Accounting for Taxes on Income. Deferred tax liability/asset shall be provided in the books in the year the aforesaid Company starts making prots and is liable to tax. 10. MISCELLANEOUS: a) Loans and Advances of IDL Buildware Limited one of the subsidiaries include Rs. 30.79 Lakhs (previous year Rs. 31.12 Lakhs) due from certain parties, which are outstanding from earlier years. The aforesaid Company is hopeful of recovering the dues in full and no provision has been considered necessary for this amount. The net exchange gain / (loss), (i.e., difference between the spot rate on the dates of the transactions and the actual rate at which the transactions are settled/appropriate rates applicable at the year end) credited to Prot & Loss Account is Rs. 193.59 Lakhs (Previous year exchange loss of Rs. 2978.47 Lakhs). Exchange difference in respect of forward exchange contracts to be recognised in the Prot and Loss Account in the subsequent accounting period is Rs. 35.39 Lakhs (credit) (Previous year Rs. 3.59 Lakhs (loss) ). Gulf Carosserie India Limited one of the subsidiaries had entered into collaboration agreement with SIPAL, Arexons Spa, Italy, in terms of which it was agreed by the said collaborator to subscribe to 20% of the Capital of the Company for which a sum of Rs.10,00,000 had been received as share application money pending the nal approval of the Reserve Bank of India. As the nal approval of the Reserve Bank of India has not been forthcoming, the Company has decided to repay/remit the said amount with required approvals and till that time to consider the said share application money as current liability. The nancial statements of IDL Buildware Ltd., one of the subsidiaries have been prepared on a going concern basis notwithstanding substantial erosion in the networth of the Company.
b)
c) d)
e)
11. REVENUE RECOGNITION (a) Disclosures required to be made under the Accounting Standard (AS-7) Construction Contracts Rs. Lakhs Contract revenue recognized as revenue during the year Aggregate amount of contract costs incurred in respect of on going contracts net of recognized prots (less recognized losses) up to 31st March 2010 Advance payments received (net of recoveries from progressive bills) Retention Amount Gross amount due from customers for contract work For the Method used to determine the contract revenue and the stage of completion of contract in progress, Refer Note: 2 (vi) (e) above 2009-10 870.86 1174.67 572.22 76.74 447.10 2008-09 Nil 382.17 581.11 Nil Nil -
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(b) In the previous year pursuant to the notication GSR 225(E) issued by Ministry of Corporate Affairs relating to Accounting Standard 11 Effect of changes in Foreign Exchange Rates, the Parent Company has exercised the option to capitalize exchange differences on translation of long term foreign currency monetary items on depreciable capital assets. Accordingly, the foreign exchange difference of Rs. 52.24 Lakhs (31.03.2009 Rs.105.15 Lakhs including foreign exchange gain of Rs. 65.04 Lakhs relating to the earlier year and adjusted to General Reserve as on 1st April, 2008) on translation of long term foreign currency monetary items relating to acquisition of xed assets has been capitalized and depreciated over the remaining useful life of the xed assets. 12. EARNINGS PER SHARE Year ended 31st March, 2010 (1924.73) 74358735 74358735 2.00 (2.45) (2.45) Year ended 31st March, 2009 1049.88 74358735 74358735 2.00 1.56 1.56
a. b. c. d. e.
13. RELATED PARTY DISCLOSURES: a) Information relating to Related Party Transactions as per Accounting Standard 18 notied by Companies (Accounting Standards) Rules, 2006. Name of the Related Party Gulf Oil International (Mauritius) Inc. Mr. S. Pramanik, Managing Director b) Relationship Entity holding more than 20% shareholding in the Company Key Management Personnel
Details of transactions between the Company and Related Parties and the status of outstanding balance at the year end : Rs. Lakhs Particulars Entity holding more than 20% of the shareholding in the company 2009-10 2008-09 498.91 619.83 467.26 510.07 Key Management Personnel 2009-10 0.06 79.50 2008-09 0.05 69.22
Royalty Gulf Oil International (Mauritius) Inc. Dividend paid Gulf Oil International (Mauritius) Inc. Mr. S. Pramanik Directors' Remuneration Outstanding Balances : Payables Gulf Oil International (Mauritius) inc.
424.07
397.17
14. DISCLOSURE AS REQUIRED BY ACCOUNTING STANDARD 19, LEASES NOTIFIED BY THE COMPANIES (ACCOUNTING STANDARDS) RULES, 2006 ARE GIVEN BELOW: a) Operating Lease: (i) Where the Company is a Lessee: The Parent Companys signicant leasing arrangements are in respect of operating leases for premises (residences, ofce, storage godowns for nished goods etc.). The leasing arrangements, which are not non-cancellable range generally between 11 months to 5 years and are usually renewable by mutual consent on agreed terms. The aggregate lease rents payable are charged as rent in the Prot and Loss Account.
85
Prot / (Loss) for the year (Rs. Lakhs) Weighted average number of Equity shares outstanding during the year Weighted Average number of equity shares in computing diluted earnings per share Face value of each Equity Share (Rs.) Earnings per Share - Basic (Rs.) - Diluted (Rs.)

The Parent Company has taken certain Plant and Machinery under non-cancellable leases. Rs. Lakhs 31 March 2010
st
31 March 2009
st
Total
Payments not later than one year
Payments later than one year but not later than ve years
Total
Payments not later than one year
Payments later than one year but not later than ve years
Total of future minimum payments at the balance sheet date
3056.01
1225.53
1830.48
4211.43
1225.82
2985.61
Lease Rent on the aforesaid Plant and Machinery amounting to Rs. 1229.53 Lakhs. (Previous year Rs.1195.29 Lakhs) has been charged to Prot and Loss Account under rent. (ii) Where the Parent Company is Lessor: Details in respect of assets given on operating lease: Gross Block 31st March 2010 Building Plant & Machinery 71.09 80.32 31st March 2009 71.09 80.32 Accumulated Depreciation as on 31st March 2010 7.14 54.46 31st March 2009 5.86 50.64 Rs. Lakhs Depreciation for the year 2009-10 1.28 3.82 2008-09 1.28 3.82
The assets given on lease are not non-cancellable and range between 11 months to 5 years generally and are usually renewable by mutual consent, on mutually agreeable terms. The aggregate lease rentals are recognised as income from property in the Prot & Loss account. Initial direct costs are recognised as an expense in the year in which these are incurred. b) Hire Purchase: (i) The Company has taken plant and machinery, motor vehicles under hire purchase arrangements for which the ownership will be transferred to the Company at the end of the hire purchase term.
(ii) Reconciliation between the total of minimum hire purchase payments at the balance sheet date and the present value: Rs. Lakhs 31st March 2010 Total Payments not later than one year Payments later than one year but not later than ve years Total 31st March 2009 Payments not later than one year Payments later than one year but not later than five years
Total of minimum hire purchase payments at the balance sheet date Less: Future Finance Charges Present value of minimum hire purchase payments at the balance sheet date
477.36 47.70
262.67 33.66
214.69 14.04
339.24 34.43
217.51 23.91
121.73 10.52
429.66
229.01
200.65
304.81
193.60
111.21
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15. (a) As stated in note 3 of Schedule 17, in 2008-09 in pursuance of Scheme of Arrangement sanctioned by the Honourable High Court of Andhra Pradesh, the diminution in value of investment in IDL Speciality Chemicals Ltd (IDL SC) amounting to Rs.6398.14 Lakhs and advance given to IDL SC amounting to Rs. 3103.97 Lakhs was adjusted to Revaluation Reserve in the nancial statements of the Parent Company (refer note 3.4 of Schedule17). However in the consolidated nancial statements for the year 31st March, 2009 the said adjustments were reected as Reserve on Consolidation (refer Schedule 2). During the year an amount of Rs. 1966.88 Lakhs has been realized against the aforesaid advance. On 29th March 2010, the Parent Company sold entire investment in IDL SC. Accordingly Rs. 9502.11 Lakhs has been withdrawn from Reserve on Consolidation. The cost of investment in IDL SC and the advances realised aggregating to Rs. 8365.02 has been transferred to General Reserve being the excess of net asset value over carrying cost of investment and the unrealized advance amounting to Rs. 1137.09 Lakhs has been adjusted against advance given to IDL SC (refer Schedule 10).
(b) Effective 30th November, 2009, IDL Speciality Chemicals Limited, one of the subsidiaries, sold its Active Pharmaceuticals Ingredients (API) business including xed assets, current assets and current liabilities to Biocon Limited (Biocon) on a going concern slump sale basis for a consideration of Rs. 2200.00 Lakhs. In terms of the agreement in addition to the aforesaid consideration Biocon would pay the amount realised out of current assets after adjusting for the current liabilities within the agreed period. The Company has incurred a loss of Rs.2047.00 lakhs on selling the API Undertaking. (c) Disclosures as required under Accounting Standard 24 Discontinuing Operations are given as under: (i) revenue, expenses, pre-tax prot/(Loss) and Income tax expenses attributable to Continuing and Discontinued Operations : Rs. Lakhs Continuing Operations 2010 Total Income Less : Operating Expenses Loss on sale of API undertaking Pre-tax prot from operating activities Less: Interest expense Prot /(Loss) before Tax Less : Taxation Prot /(loss) from operating activities 2009 Discontinued Operations in respect of IDL SC 2010 302.73 1837.36 2047.00 2009 2010 Total
Particulars
2009
106636.81 99914.47 100679.52 93382.71 5957.29 2542.16 3415.13 1009.04 2406.09 -
2778.94 106939.54 102693.41 5527.70 102516.88 98910.41 2047.00 2375.66 2625.94 (250.28) 1571.36 3783.00 2620.41 1162.59 0.58 1162.01
6531.76 (3581.63) (2748.76) 2403.19 83.78 217.22
4128.57 (3665.41) (2965.98) 1007.14 562.32 (1006.56)
3121.43 (4227.73) (1959.42) (1821.64)
87
The loss on disposal of investment in IDL SC amounting to Rs. 134.59 Lakhs being the difference between the proceeds from disposal of investment in IDL SC and the carrying amount of its assets over liabilities as on date of disposal, has been recognised in the Prot and Loss account and does not include the amount of Rs. 9502.11 Lakhs adjusted to Revaluation Reserve.

ii) Cash ow attributable to Discontinued Operations i.e. IDL SC Rs. Lakhs Discontinued Operations Particulars 2010 Cash used in Operating activities Cash from/(used in) Investing Activities Cash (used in)/from Finance Activities (125.81) 2184.19 (1969.97) 2009 (3807.55) (5277.51) 9418.20
16. The Honourable Supreme Court vide its order dated 16.11.2007, held that the stock transfers constituted inter sale in respect of 10 years assessment year viz. 1976-77 to 1983-84, 1989-90 & 1990-91 and also directed the authorities to examine the factual aspects and assess tax on the supplies made by the Parent Company to the subsidiaries of Coal India Limited as inter state sale. The Parent Company had led writ petitions in the High Court of Orissa in August 2009 impleading other State Governments, CIL and its subsidiary companies seeking directions for issue of C forms and transfer of local sales tax to the State of Orissa. The Parent Company has been directed by the Honourable High Court of Orissa to approach the appropriate forum for redressal. The Parent Company has been legally advised that as per the settled cases, the Parent Company is entitled for concessional sales tax rates as per Central Sales Tax and interest should be charged from recomputation order. However, necessary provision has been made and is included as Provision Indirect Taxes and no further liability is expected on this account. 17. INCOME FROM PROPERTY DEVELOPMENT: The Parent Company in an earlier year entered into Option for Development Rights with Hinduja Reality Ventures Ltd., (HRVL), wherein HRVL has only the right to decide whether or not to exercise the option to acquire the development rights in respect of certain properties of the Company located at Hyderabad and Bengaluru. The offer of grant of the development rights in respect of the Bengaluru / Hyderabad properties was extended upto 30th June, 2009 and 31st December 2009 respectively. In consideration of the Parent Company agreeing to keep such offer open, HRVL paid an amount of Rs. 1050 Lakhs in the previous year on a non refundable commitment amount, which has been included under Income from Property Development in the Prot and Loss Account of nancial year 2008-09. If the option for development is exercised by HRVL, Development Agreement for the respective properties would be entered with the Parent Company, wherein the Parent Company shall be entitled to share of gross sale proceeds (as determined in the agreement) realised from sale of buildings contracted on the said properties. During the year, the option for development rights had expired and revised proposals are under consideration.
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18. SEGMENT INFORMATION FOR THE YEAR ENDED 31ST MARCH, 2010 (i) Primary Business Segment
Explosives 2010 REVENUE External Inter-segment Total Revenue RESULT Segment result Unallocated Corporate Income net of unallocated Expenses Interest Expense Interest Income Dividend Income Prot before Taxation & Exceptional Items Exceptional Item Net Prot OTHER INFORMATION Segment Assets Segment Liabilities Capital Expenditure Depreciation 15646.64 16012.24 11672.55 13905.31 9212.86 9395.77 3966.19 5425.05 507.49 271.16 311.18 471.96 1938.79 7257.79 46.31 93.44 286.58 377.25 397.23 82.95 1.33 58.37 591.56 25067.48 32347.49 26.06 35.98 46840.14 @47819.92 3666.37 5854.30 90.17 13688.42 22099.54 33.61 43.84 58.30 196.42 333.28 367.34 330.41 32093.57 35691.98 4328.82 11.40 65.32 69.02 103316.47 123824.59 59077.60 73032.93 1234.91 1983.29 6946.13 2099.14 2676.51 495.69 (1042.07) 1179.52 (3576.07) (2736.20) (182.08) (136.95) 3922.54 2697.01 (4.83) (15.43) 1050.00 1794.00 1153.47 2533.64 1247.39 28739.14 25102.67 19565.12 21114.54 288.90 2767.35 20.23 20.23 57.21 55942.40 50142.65 31.47 13.00 46.65 143.03 12.64 10.59 1050.00 2352.28 2445.99 106939.54 102693.41 2009 Consult 2010 2009 Speciality Chemicals Building Products 2010 2009 2010 2009 Lubricating Oils 2010 2009 Others 2010 2009 Property 2010 2009 Unallocated 2010 2009 Eliminations 2010 2009 2010
Rs. Lakhs
Total 2009
(59.29) (153.62)
28739.14 25102.67 19565.12 21114.54
288.90 2767.35
57.21 55989.05 50285.68 44.11 23.59
1050.00 2352.28 2445.99 (59.29) (153.62) 106939.54 102693.41
(2856.97) (3150.31) 231.03 1.42 322.95 573.23 (250.28) 529.90 1.97 1162.59 1162.59
254.26 1161.72 1009.90
@ includes Rs. 41848.95 Lakhs (Previous year Rs.43799.82 Lakhs) arising on revaluation of xed assets (refer note 19 of Schedule 17).
(ii) Information about Secondary Business Segments

India Paticulars 2010 Revenue by Geographical market on FOB basis Inter Segment Total Carrying amount of segment assets Additions to Fixed Assets 94490.35 94490.35 95933.26 1205.69 2009 93446.74 93446.74 116217.39 6850.55 2010 12449.19 12449.19 7383.21 29.22 2009 9246.67 9246.67 7607.20 95.58 2010 106939.54 106939.54 103316.47 1234.91 Outside India Total
Rs. Lakhs
2009 102693.41 102693.41 123824.59 6946.13
(iii) Notes: (a) Business Segment: The Company has considered business segment as the primary segment for disclosure Segments have been identied and reported taking into account the organisation structure, the nature of products and services, the deferring risks and returns of the segments
89
The business segments of the Company are (i) Explosives, (ii) Consult dealing in Mining & Infrastructure Contracts, (iii) Speciality Chemicals dealing in Bulk Drugs & Pharma, (iv) Building Products (v) Property Development, (vi) Lubricating Oils, (vii) Others, Others include Agro. (b) Geographical Segment: The Geographical segments considered for disclousure are as follows: - Revenue within India includes sales to customers located within India and earnings in India - Revenue outside India includes sales to customers located outside India and earnings outside India 19. Land meant for property development situated at Bengaluru and Hyderabad had been revalued as at 31st March, 2008, based on a valuation by an approved valuer. The resultant surplus on such revaluation amounting to Rs. 183896.69 Lakhs had been credited to Revaluation Reserve in the previous years. In view of steep recession in the realty sector, management has reassessed the valuation of the aforesaid properties as on 31st March, 2009 and based on the guidelines issued by the Registration and Stamps Department of Karnataka & Andhra Pradesh, the value of the subject lands has been reassessed and, the resultant surplus on revaluation amounted to Rs. 43799.82 Lakhs. The resultant write down aggregating to Rs. 140096.87 Lakhs has, in accordance with the requirement of Accounting Standard-10 Accounting for Fixed assets been debited to Revaluation Reserve in the previous year. During the year, the Parent Company has entered into Agreement to Sell 4.75 acres of land to IDL Speciality Chemicals Limited. Since the aforesaid parcel of land is no longer meant for Property development, an amount of Rs. 1950.87 Lakhs has been withdrawn from Revaluation Reserve. 20. Loans and Advances, considered good include Rs. 813.89 Lakhs (31.03.2009 Rs. 813.89 Lakhs) in respect of Cenvat credit claimed on tippers and subsequently reversed on receipt of a show cause notice from the Excise Authorities. Management is of the view that the Parent Company is entitled to avail such credits and the matter is being currently contested before the appropriate authorities. 21. Previous years gures have been regrouped / recast wherever necessary.
S. SUBRAMANIAN Chief Financial Ofcer & Company Secretary
90
ELECTRONIC CLEARING SERVICES (ECS) MANDATE FORM

(For Shares held in physical form)
From :
Date :
To :
Dear Sirs, Please ll-in the information in CAPITAL LETTERS in ENGLISH ONLY. Please TICK wherever is applicable. Folio No. I/we_________________________________________________ do hereby authorise Gulf Oil Corporation Limited to * Print the following details on my/our Dividend Warrant * Credit my dividend amount directly to my Bank account by ECS (* strike out whichever is not applicable) Name of First Holder _______________________________________________________________________________________________ Bank Name _______________________________________________________________________________________________ Branch Name (Address with pincode) _______________________________________________________________________________________________ Bank & Branch Code : (9 Digits Code Number appearing on the MICR Band of the cheque supplied by the Bank. Please attach a Xerox copy of a cheque of your bank duly cancelled for ensuring accuracy of the bank name, branch name and code number)
Account Type
Savings
Current
Cash Credit
A/c No. (as appearing in the cheque leaf) I, hereby declare that the particulars given above are correct and complete. If any transaction is delayed or not effected at all for reasons of incompleteness or incorrectness of information supplied as above, the Company /Registrar will not be held responsible. I agree to avail ECS facility provided by Reserve Bank of India as and when implemented by the Company. I further undertake to inform the Company / Registrar any changes in Bank /Branch and Account number.
Signature of the rst holder
91
92
Shareholding Pattern
Promoters Mutual Funds, UTI, Banks, FI & Others Private Corporate Bodies Indian Public NRIs/OCBs FIIs
Share Price Movement

20000 18000 16000 14000
Share Value in INR
12000 10000 8000 6000 4000 2000 0

09 10
10774 9933 9361 8474

Share Value in INR
9986 10383 10100
7795
5282
6000 5000 4000 3000 2000 1000

0
09
10
94
S&P CNX Nifty Jr.
7474
8542
9162
12000 11000 10000 9000 8000 7000
94
BSE SENSEX

Regd. Ofce: Kukatpally, Sanathnagar (IE) PO, Hyderabad 500 018
ATTENDANCE SLIP
Folio No: .............................. DP ID: .................................. L F/ Client ID No. ........................................
Shareholders Names: Mr./ Mrs./Miss. ............................................................................................................................................ (in block letters) E-mail*: ........................................................................................................................................................................................... IN CASE OF PROXY Name of the Proxy: Mr./Mrs./Miss. ................................................................................................................................................. (in block letters)
No. of shares held: ............................................... I certify that I am a registered Shareholder/ proxy for the registered Shareholder of the Company. I hereby record my presence at the 49th Annual General Meeting of the Company held on Thursday, the 23rd day of September, 2010. Signature of the Shareholder/ Proxy Notes: 1. Please bring this Attendance Slip when coming to the Meeting. 2. Please do not bring with you any person who is not a member of the Company. *For the purpose of updates by the Company, if any.

Regd. Ofce: Kukatpally, Sanathnagar (IE) PO, Hyderabad 500 018
PROXY
I/ We .................................................................... of .....................................in the district of ...................................... being a member(s) of GULF OIL Corporation Limited hereby appoint ............................................................. ofin the district of or failing him ofin the district of as my/ our Proxy to vote for me/ us on my/ our behalf at the Forty-nineth Annual General Meeting of the Company to be held on Thursday, the 23rd day of September, 2010 and at any adjournment there of. As witness my/ our hand(s), this..day of ..2010.
Afx Revenue Stamp
Folio No. ............................... DP ID ..........................................
Signature of the Shareholder(s) Client ID No. ..........................................
Note : Proxies, in order to be effective, should be duly stamped, completed, signed and deposited at the Registered Ofce of the Company not less than 48 hours before the meeting.
95
96
Gulf Oil Corporation Limited Gulf Oil Corporation Limited
96

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Gulf Oil Corporation Limited

Gulf Oil Corporation Limited

H. C. Asher S. Pramanik H. C. Asher Ashok Kini Vinoo S Hinduja

Ashok Kini Vinod K. Dasari M. S. Ramachandran K.N. Venkatasubramanian Vinod K. Dasari

Explosives & Contracts Divisions

Company Secretary Deputy Company Secretary

Auditors Registered/ Corporate Ofce

Gulf Oil Corporation Limited

A TEN YEAR REVIEW

1487.17 40789.77 42276.94 17074.51 61276

1387.17 14388.71 15237.06 15547.27 43790

1387.17 11246.72 12045.21 6224.07 47605

1387.17 10454.43 11841.60 7593.02 48945

1387.17 12943.00 14330.17 11206.99 46969

800.17 9317.35 10117.52 3965.37 47393

39794.17 203901.39 41281.34 204717.18 17122.63 59476 13457.72 56218

13393.06 12221.67 14284.78 12827.12 8147.69 43840 8243.71 45893

Gulf Oil Corporation Limited

996 833 669 507

300 200 100 0

Mining & Infrastructure

PAT, PBT and Dividend Payout

Dividend per share and EPS

60.00 50.00 40.00 30.00 20.00 10.00 0.00

6.00 3.29 4.00 3.32

Dividend per Share

Disposal Of Revenue - F 2010

80000 60000 40000 43840 43790

Gulf Oil Corporation Limited

S. G. Hinduja August 2, 2010. CHAIRMAN

Gulf Oil Corporation Limited

NOTICE OF THE FORTY NINTH ANNUAL GENERAL MEETING

Gulf Oil Corporation Limited

Gulf Oil Corporation Limited

Gulf Oil Corporation Limited

ANNEXURE TO THE NOTICE

Gulf Oil Corporation Limited

3845.62 1584.61 5430.23

Gulf Oil Corporation Limited

DIVISIONAL PERFORMANCE 3.1 Business Operations

Gulf Oil Corporation Limited

Gulf Oil Corporation Limited

Gulf Oil Corporation Limited

Gulf Oil Corporation Limited

Gulf Oil Corporation Limited

Gulf Oil Corporation Limited

Gulf Oil Corporation Limited

Gulf Oil Corporation Limited

Gulf Oil Corporation Limited

Gulf Oil Corporation Limited

For and on behalf of the Board of Directors

Place : Mumbai Date : 14th May 2010

Gulf Oil Corporation Limited

REPORT ON CORPORATE GOVERNANCE

(ii) Non-Executive Directors:

(iii) Managing Director:

Gulf Oil Corporation Limited

Name of the Director

No. of Board Meetings Attended 5 8 2 3 4

Whether attended last AGM Yes Yes NA NA Yes

No. of Memberships of other Boards as on 31/03/10@ 3 4 23 11 8

No. of Memberships of other Committees* 3 2

No. of Chairmanships in other Committees* 2