In December 2012, HGHL Holdings Limited, UK [''''HGHL'''' (obligor)] wholly owned subsidiary of GOCL Corporation Limited [(''''GOCL''''(obligor)] acquired Houghton International Inc. in USA and took a loan of USD 300 million (Outstanding as at March 31, 2017: USD 126.60 million: Rs, 82,100 Lakhs; March 31, 2016: USD 153 million: Rs, 101,370 Lakhs) from lenders to part finance the acquisition. The said loan was extended on the basis of Letter of Comfort/Stand-By-Letter of Credit Facility Agreement between GOCL Corporation Limited (GOCL), HGHL and lenders on the strength of guarantee of Gulf Oil International Limited, Cayman and cash deficit undertaking from its specified subsidiaries and also from GOCL, wherein they were obligated to make contribution to HGHL in case of deficiencies in resources for servicing the said facilities. The said facility was also secured by specified assets of GOCL.
Pursuant to the Scheme of arrangement between GOCL, the Company and their respective shareholders and creditors, the "Lubricants Undertaking" of GOCL was demerged and transferred into the Company w.e.f. April 1, 2014 (the Appointed Date under the Scheme). Pursuant to the above scheme the Company has issued a Deed of Undertaking to make contributions to HGHL for meeting any deficiency in the event of obligors'''' inability to service the said facility. However, the Company has received back to back corporate guarantee from Gulf Oil International Limited, Cayman to secure its entire obligations, if any, arising out of the said Deed of Undertaking.
Note 1 Related Party Disclosures
(A) Name of the related parties and nature of relationship:
(i) Where control exists:
Ultimate Holding Company Amas Holdings SPF
(Holding Company of Gulf Oil International Limited)
Holding Company Gulf Oil International (Mauritius) Inc.
Gulf Oil Middle East Limited (Cayman)
[Holding Company of Gulf Oil International (Mauritius) Inc.] Gulf Oil International Limited (Cayman)
[Holding Company of Gulf Oil Middle East Limited (Cayman)]
(ii )_Other related parties with whom transactions have taken place during the year:_
_Fellow subsidiaries:_Ashok Leyland Limited_
_D.A.Stuart India Private Limited_
_Gulf Ashley Motor Limited_
_Gulf Oil Bangladesh Limited_
_Gulf Oil China Limited_
_GOCL Corporation Limited_
_Gulf Oil Marine Limited_
_Gulf Oil Philippines Inc._
_HGHL Holdings Limited_
_Gulf Oil Supply Company Limited_
_Houghton Deutschland Gmbh_
_IDL Explosives Limited_
_PT. Gulf Oil Lubricants Indonesia_
(iii )_Key Managerial personnel: _Ravi Chawla - Managing Director_
III Other Employee Benefits
The liability for Compensated absences as at March 31, 2017 is Rs, 310.74 Lakhs (March 31, 2016 : Rs, 292.54 Lakhs).
Note 33 Segment Information for the year ended March 31, 2017
(a) Information about Primary Business Segment
The Company is engaged primarily in the business of manufacturing, marketing and trading in Lubricants and Greases, which in the context of Accounting Standard 17 on Segment Reporting is considered to constitute a single primary segment. Thus, the segment revenue, segment results, total carrying amount of segment assets, total carrying amount of segment liabilities, total cost incurred to acquire segment assets, total amount of charge for depreciation during the year are all as reflected in the financial statements for the year ended March 31, 2017 and as on that date.
Operating Lease: Where the Company is a Lessee
The Company''''s significant leasing arrangements are in respect of operating leases for premises. The leasing arrangements, range generally between 11 months to 5 years and are usually renewable by mutual consent on agreed terms. All the lease agreements can be terminated as per termination clause of each individual lease agreement. The lease rents paid/payable charged to the Statement of Profit and Loss aggregate to Rs, 65913 Lakhs (March 31, 2016 : Rs, 563.99 Lakhs).
Note 3. Employee Stock Option Plan (ESOP)
In respect of Options granted under the Gulf Oil Lubricants India Limited-Employees Stock Option Scheme-2015, in accordance with the guidelines issued by Securities and Exchange Board of India [(Share Based Employee Benefits) Regulations, 2014] , the intrinsic value of options is accounted as deferred employee compensation, which is amortized on a straight line basis over the vesting period. Employee benefits expenses include Rs, 290.02 lakhs charged during the year on this account.
The compensation cost of stock options granted to employees are accounted by the Company using the intrinsic value method as permitted by the SEBI Guidelines and the Guidance Note on Accounting for Employee Share Based Payments issued by the Institute of Chartered Accountants of India in respect of stock options granted.
Had the compensation cost of employee stock options been recognized based on the fair value at the date of grant in accordance with Black Scholes model, the Company''''s earnings per share would have been as under:
Note 4. Expenditure towards Corporate Social Responsibility
Gross amount required to be spent by the Company during the year ended March 31, 2017 under section 135 of the Companies Act, 2013 is Rs, 250.36 Lakhs (March 31, 2016 Rs, 221.64 Lakhs) against which Company has actually spent Rs, 103.83 Lakhs during the year (March 31, 2016 Rs, 96.20 Lakhs) for purposes other than the construction/acquisition of any asset.
*Specified Bank Notes (SBNs) mean the bank notes of denominations of the existing series of the value of five hundred rupees and one thousand rupees as defined under the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs No.S.O.3407(E), dated the 8th November, 2016.
Prior year comparatives have been reclassified to conform with the current year''''s presentation, wherever applicable.