2014 Annual Report

Transcription

2014 Annual Report

Sepahan Oil Company
Report of Board of Directors' Activities to General Assembly of Stakeholders
Financial Year Ending March 20, 2014
SEPAHAN OIL COMPANY
Report of Board of Directors' Activities to General Assembly of
Stakeholders
Sepahan Oil Company (P.J.S)
Sepahan Oil Company
Table of Contents
1.
2.
3.
4.
5.
6.
7.
8.
-
No. of Chapter
Selected information
Message of Board of Directors
Generalities
A Brief Review on Financial and Operational Performance of Company in Current Year
Company’s Strategic System
Report on Analysis of Risk of Company
Social Performance of Company
Activities of Development of Human Resources
Measures Related to the Assignments of the General Assembly in Previous Year
Other Subjects
Last Remarks
No. of Page
3
4
7
13
24
29
33
37
46
54
59
Sepahan Oil Company
Ordinary Annual General Assembly of Shareholders
Sepahan Oil Company (P.J.S)
In line with enforcement of provisions of Article 232 of amendment of Commercial Law, approved in 1969 and
Article 45 of Stock Market Law, hereby, report on the activity and general situation of Sepahan Oil Company
(P.J.S)has been provided for the fiscal year closing on March 20, 2014 based on backgrounds, history, documents
and information, details of which are submitted to your dear attention.
The present report is considered as one of the annual reports of Board of Directors which has been submitted to the
General Assembly of Shareholders of the company based on information and data presented in financial statements.
It should be noted that the report, as submitted by the Board of Directors to the General Assembly, provides
information with regard to the general situation of the company and performance of the Board of Directors.
To the undersigned, the information mentioned in this report on the general situation and operations of the company
has been provided with special emphasis on presenting results of performance of Board of Directors justly and
impartially. In general, all information has been provided and presented in line with safeguarding interests of the
company, observing legal rules and regulations and articles of association of the company. This information is in
coordination with the available realities and their effects can be predicted in future to some extent in the current
situation. Generally speaking, information and data has been presented in this report accurately and sufficiently and
any subject has not been omitted from the report. It should be noted that the report has been approved by the Board
of Directors on 15.4.1393 (July 6, 2014).
Members of Board of Directors
Nasser Khaleqi
Position
Chairman of Board of Directors
Non- commissioned member
Mohammad-Reza Movasaqinia
Vice Chairman of the Board of Directors
Managing Director
Mohammad- Kazem Hosseinkhani
Member of Board
Commissioned member
Mehdi Riyahipour
Member of Board of Directors
Amir- Hossein Bahreini
Sepahan Oil Company
Selected Information
Revision Presented
March 20, 2014
March 20, 2013
A) Information on financial performance in the
report year (amounts in million rials):
Net sales
17,561,291
11,364,064
Operational profit
3,934,137
1,585,660
Other non-operational costs and incomes
251,605
36,240
Net profit – after tax deduction
3,530,016
1,164,466
yearly adjustments
(81,278)
(223,852)
Cash funds as a result of operational activities
55,832
544,245
B) Information of financial statement at the end of fiscal year period (amounts in million rials):
Total assets
10,942,236
8,794,759
Total liabilities
6,133,496
6,116,035
Registered capital
1,050,000
1,050,000
Total owner’s equity
4,808,740
2,678,724
C) Rate of return (percentage):
Rate of return of assets (1)
35.7%
14.5%
Rate of return of owner’s equity (special value (2)
94%
49%
D) Information related to each share:
No. of stocks at organizing general assembly
1050000000
1050000000
First prediction of dividend per share (DPS) – rials 3,073
1,109
Last prediction of dividend per share – rials (*)
3,073
1,109
Real dividend of each share, rials (*)
3,362
1,110
Cash dividend of each share – rials
-----888
Latest price of each share in reported fiscal year 18,158
--------rials
Office value of each share – rials
4,580
- - - - - - -- - - - - - - - ratio of price to actual income of ach share - grade
5.90
---------------E) Other information:
No. of staff and personnel / man (yearend)
362
361
March 20, 2012
6,927,112
1,000,108
8,486
838,591
(217,803)
278,154
7,202,363
5,213,827
1,050,000
1,988,536
13.7%
52%
1050000000
750
750
798
639
-----------------------------------------365
1)
Net Profit
Average Total of Assets in Beginning and End Period = Rate of return of assets
2)
Net Profit
Average owner’s equity in the beginning and end period = Rate of return of owner’s equity
3) July 6, 2014 is the written confirmation of the report which has been approved by the Board of Directors.
4) Price of each share in the reported fiscal year period
Latest prediction of dividend of ach share
= P/E
Sepahan Oil Company
Message of Board of Directors:
In line with materializing recommendations and wishes of Supreme Leader of the Islamic Revolution in naming the
year 1392 after “Political Valor, Economic Valor”, Sepahan Oil Company managed to stand at the first rank despite
existing obstacles with compilation of main and sub- main strategies based on predefined mission and perspective
with total sales of 17,561 billion rials in lubricating industry. Benefiting from local and native technical know-how
and expert manpower, the company managed to win the first rank in lubricating industry with high sales volume.
Hereunder are regarded as highlights of the activities which have been conducted in materializing objective of this
important effect. In the beginning, a summary of this report is presented in the following six topics:
1- General Review on Situation and Developments of Lubricating Industry in 1392
Increasing demand level for using new vehicles and using these vehicles with world most modern technology led to
the movement of market towards using engine oil with high grade. This issue has caused considerable increase in
consumption of base engine oil Groups 2 and 3.
Once refineries of base oil (Group 2 and 3) in the Persian Gulf littoral states are put into operation, considerable
changes will be created in trend of supply and demand of regional market. The said issue will cause considerable
change in price level of engine oil (Group 1). For this purpose, feasibility studies have been put atop agenda for the
construction operation of refinery for producing base oil (Group 2 and 3). Price of lube cut increased from 10,147
rials/kilo in 1391 (ended March 20, 2013) to 17,416 rials/kilo in 1392 (ended March 20, 2014) averagely. It should
be noted that more than 80% of volume of consumables is from lube cut for producing lubricants.
2- A General Review on Status of Company in Industry and Its Competitive Status in 1392
The general status of the company in industry and also its competitive situation in 1392 (ended March 20, 2014) was
reviewed.
Despite all bottlenecks existing in industrial sector of the country and especially in the field of exports due to
sanctions, Sepahan Oil Company managed win first rank in terms of selling all its lubricants among four other major
producers of these products in previous Iranian calendar year in 1392 (ended March 20, 2014). Given the above
issue, the company owes its achievements to the logical and wise management bureau, experienced Board of
Directors and industrious staff and personnel. In general, the company’s sales volume stood at over 17,561 billion
rials in the same period. Under the auspicious of tis wise management, the profitability of the company is yet
continuing.
3- Statement of Strategy of Sepahan Oil Company in 1392
Hereunder are regarded as the most important strategies taken by the company in previous Iranian calendar year in
1392 (ended March 20, 2014):
Sepahan Oil Company
-
Reducing damages and losses appeared as a result of environmental threats,
Turning treats into opportunity,
Taking advantage of market opportunities, etc.
Given the above issues, the company managed to overcome the aforementioned threats successfully.
4- A General Overview on Performance of Company and Attaining Predefined Objectives in 1392
In the reported fiscal year closing on March 20, 2014, objectives and predetermined plan with relation to Equity per
Share (EPS) and 9.4 percent profit has been actualized more than the projected plan. Likewise, 107% of production
budget and 105% of rials sales budget has been materialized at the unflinching effort of the industrious staff and
personnel of the company. The financial performance of the company indicates that SEPAHAN Oil Company
managed, despite extant bottlenecks and shortcoming, to register new records in production, sales and net profit in
1392 (ended March 20, 2014).
5- Statement of Programs and Perspective of Situation of Company for Upcoming Fiscal Year
Considering the subject that Isfahan Oil Refinery was sidelined for a period of over 30 days for basic repair and
maintenance services (Overhaul) in previous Iranian calendar year 1393 (ended March 20, 2015) and since major
part of feedstock of Sepahan Oil Company is supplied from Isfahan Oil Refinery, necessary planning has been put
atop agenda for supplying feedstock from other refinery units.
It is predicted that next year would be a very tight competition of main players in the field of producing various
types of lubricants. Therefore, the most important programs of Sepahan Oil Company are as follows: - safeguarding
extant share at the market as the largest producer of lubricants in Iran and then, increasing and getting lion’s market
share of lubricants.
6- Statement of Major Risks of Sepahan Oil Company
Hereunder are considered as the most important risks facing Sepahan Oil Company: risk for supplying feedstock,
risk of fluctuations of interest rate, risk of fluctuations of currency rate, risk of increasing price of feedstock and
other production raw materials, risk of international factors and governmental rules and regulations, risk of liquidity,
so that the said issue have been spelled out in the present report comprehensively.
The Board of Directors of the company seizes this opportunity to express its special thanks to all shareholders for
their unsparing and unflinching support from objectives of Sepahan Oil Company. In addition, the Board members
also thank those who offered their constructive viewpoints for better management of the company. It should be
noted that Board of Directors of Sepahan Oil Company considers consecutive support of shareholders to attain
objectives as “vital”.
Board of Directors of Sepahan Oil Company
Sepahan Oil Company
1st Chapter:
Generalities
1 – 1 – History and Subject of Activity
1 – 2 – Capital and Combination of Shareholders
1 – 3 – Sepahan Oil Company from Stock Exchange Perspective
1 – 4 – Status of Sepahan Oil Company in Industry
1 – 5 – Legal Environment of Sepahan Oil Company
Sepahan Oil Company
1 – 1 – History
Sepahan Oil Refinery started its activity in 1992 as one of units affiliated to Isfahan Refinery. The refinery unit was
established in early Oct. 1999 in the form of a private joint stock company entitled “Isfahan Oil Refining Company”
and was registered under Reg. No. 155078 on Sept. 23, 1999 at Tehran Industrial Ownership and Companies’
Registration Department. Also, according to Paragraph “C” of Note 10 of 2000 Budget Bill and in line with the
decisions of Committee to Pay Demands of Fund, it was decided that this company should be transferred to Oil
Industry Pension Fund as Oil Refining Factory affiliated to Isfahan Refinery. Accordingly, this company has not had
any trade and operational activity before termination of 2001 practically, while all its activities have been conducted
within the framework of legal entity of Isfahan Refinery.
Upon transferring this company, its activity started since the beginning of 2002. By virtue of the bylaw ratified by
the Extraordinary General Assembly of Shareholders on May 18, 2002, Isfahan Oil Refining Company (Pvt.J.S) was
renamed into Sepahan Oil Company (Pvt.J.S). According to the adopted decisions on turning the entity of the
company from private joint stock into public joint stock, necessary and initial measures were conducted as of early
2013 and finally, the entity of the company was turned into public joint stock company on Sept. 12, 2013.
The subject of activity of the company is as follows according to the Article 2 of new articles of association
approved by the Extraordinary General Assembly on May 27, 2013:
-
-
-
Setting up, constructing and establishing factories,
Providing and collecting goods and raw and intermediate materials for production,
Packaging various types of base oils for producing different types of engine oils required for various
vehicles and cars,
Producing various types of engine oil required for industrial and agricultural machinery, sea, air and rail
parts and equipment, and accessories and derivatives obtained from them such as grease, slack wax, solid
wax paraffin, industrial liquid paraffin, extract, chemicals, glue and resin, fuel and oil supplements,
insecticide, brake oil, various types of additives, anti- freeze and anti- boiling, glass cleaner and various
types of additives, fat- eradicating compounds, and all industrial oils for supplying and selling inside and
outside the country, etc.
Providing and supplying control and electronic spare parts, equipment and machinery,
Inspecting and monitoring manufactured products and required raw and intermediate materials from inside
and outside the country for repair and maintenance services, producing, merging, mixing together,
processing, packaging, supplying and distributing them inside and outside the country
Conducting feasibility studies and also necessary research activity for better recognition of requirement of
domestic and foreign markets,
Promoting qualitative and quantitative level of productions,
Attaining top and superior methods as well as producing new products with high quality, etc.
Fulfilling any type of investment and participating with real and legal entities in stocks of other investment,
production, industrial trade, commercial, engineering, service and research companies, etc. through
Sepahan Oil Company
-
-
-
-
supplying or undertaking stocks of new companies and/or purchasing and undertaking stocks of existing
companies (domestic and foreign),
Exporting, importing, buying, selling, and transacting any type of authorized materials and equipment
especially oil, gas, petrochemical and chemical byproducts and additives as well as conducting all related
activities for materialization of objective of this subject,
Designing, supervising, monitoring and implementing of engineering operations,
Constructing and developing refineries,
Presentation of contracting services and management of contract of projects related to oil, gas,
petrochemical and chemical industries
Conducting any type of authorized business and commercial operations for supplying raw materials, tolls,
equipment and machinery from both inside and outside the country in line with materialization of
objectives of the company,
Setting up company, branch office, and agencies for the company
Granting agency to both real and legal entities both inside and outside the country in order to fulfill affairs
related to the subject of company and/or merging with other companies
Merging with other companies and/or dissolving affiliated companies as well as accepting agency from
local and foreign institutes and companies,
Buying, renting, technical and operational management, business administration, marketing and selling any
type of vessel and ship,
Bunkering and conveying fuel and undertaking activity of shipping as well as other activities related to
marine and sea transport,
Presenting all logistic and transport services (land, air and sea) as well as other activities related to the
subject of activity of company,
Accepting and granting agency of air, land and sea transport,
Fulfilling all operations, financial and commercial transactions,
Conducting all financial, economic, insurance, logistics, industrial contracting, engineering, consulting,
laboratory, training and researching services,
Conducting any type of research and test which is related to the subject of the company directly and
indirectly,
Fulfillment of any type of activity within the framework of current rules and regulations of the country
using all common economic tools, etc.
Conducting laboratory, quality control (QC), industrial, technical, engineering, repair and maintenance
services,
Fulfilling economic, commercial business, consultation and research services according to the order
observing current rules and regulations of the country,
Sepahan Oil Company
-
Collecting and using any type of loan and credit, receiving financial facilities from both domestic and
foreign resources as well as fulfilling other methods for supplying financial resources,
Receiving license from legal channels as well as fulfilling all relevant activities,
Fulfillment of any type of online activity which will improve financial capability and affordability of the
company.
Generally speaking, Sepahan Oil Company is authorized to carry out all financial, trade, business,
commercial and industrial activities inside and outside the country which is related to the subject of the
company directly and indirectly within the framework of stipulated rules and regulations.
1 – 2 – Capital and Shareholders of Sepahan Oil Company
In the beginning of its establishment, the capital of Spahan Oil Company stood at 10 million rials (including 10,000
shares, with nominal value of each share at 1,000 rials). The company increased its capital in two stages, amounting
to 1,050,000 million rials at the end of fiscal year closing on March 20, 2014 as follows:
Changes of Capital of Company
Capital Increase Date
Sept. 23, 1999
Dec. 4, 2006
Sept. 6, 2011
Capital Increase
Percentage
- --------5999900
75
New Capital (million
rials)
10
600,000
1050000
Capital Increase Source
- ----------cumulative dividend
demands or claims
Sepahan Oil Company
1 – 3 – Company from Tehran Stock Exchange Perspective (Situation of Transactions and Stocks’ Price)
Sepahan Oil Company was listed and registered at Tehran Stock Exchange (TSE) on Jan. 6, 2014 in group o oil,
coke and nuclear fuel products with symbol of “SHASPA”. In the same direction, its stocks were traded for the firs
time at TSE on May 26, 2014.
1 – 4 – Status of Sepahan Oil Company in Industry
Sepahan Oil Company is busy active in the field of lubricating. The mentioned industry experienced a considerable
75 percent increase in its sales volume in the current Iranian calendar year 1394 (started March 21, 2015) as
compared to the same period last year. Hereunder are regarded as the most important reasons for considerable hike
of the industry’s sales volume:
-
Increasing sales price of products licensed by the Organization to Support Rights of Consumers and
Producers,
Increasing sales volume of products,
It should be noted that Sepahan Oil Company stands at the first rank among other companies active in this
industry with total sales volume amounting to 17,561,291 million rials.
1 – 5 – Legal Environment of Sepahan Oil Company
The most important rules and regulations governing the activity of the company are as follows:
-
Capital Market Law
Commercial or Trade Law
Oil Ministry (contracts for purchasing raw materials and industrial services)
Labor Act
Rules and regulations of Social Security Organization (SSO),
Chamber of Commerce (issuance and extension of Business Card),
Ministry of Commerce (registering order of raw materials)
I.R. of Customs Administration (exporting bulk and containerized products and importing raw materials)
Ministry of Economic Affairs and Finance (MEAF) (Direct Taxation Act)
Ministry of Health and Medical Education (importing raw materials such as M.E.K)
Ministry of Industry, Mine and Trade (importing raw materials such as M.E.K and production license)
Department of Environment (DoE) (rules of controlling pollutants)
Organization to Support Rights of Producers and Consumers
2nd Chapter:
Sepahan Oil Company
An Overview on Financial and Operational Performance of Company in Current Year
2 – 1 – Items of profit and loss statement of main company
2 – 2 – Comparative statistics of Production
2 – 2 – 1 – Information on quantity of productions of company / type of product
2 – 2 – 2 – Comparing actual monthly production volume with the production volume budgeted in 2013
2 – 3 – Products’ sales statistics
2 – 3 – 1 – Performance of total sales volume to type of products in recent two years separately,
2 – 3 – 2 – Performance of exports sales volume to the type of products in recent two years separately,
2 – 3 – 3 – Performance of domestic sales volume to the type of products in recent two years separately,
2 – 4 – Statistics of purchasing and consuming raw materials,
2 – 5 – Changes in investments (including fixed assets, investments and other assets)
2 – 6 – Changes in structure of capital and policies for financing,
2 – 7 – Changes in structure of liquidity,
2 – 8 – Statement of policies of financing and credit-based policies of companies,
2 – 9 – Changes in working capital,
2 – 10 – Financial ratios
2 – 11 – Transactions with affiliated or subsidiary entities
2 – 13 – Financial undertakings and commitments
Sepahan Oil Company
2 – 1 – Items of Profit and Loss Statement of Main Company
Description
March 20, 2014
(million rials)
Decrease or
Increase
Percentage
March 20, 2013
(million rials)
Reasons of
Changes
Net sales
17,561,291
11,364,064
55
Final cost for sold
goods
(12,938,503)
(7,631,339)
69
Gross profit
Administrative and
general sales costs
Net of other incomes
and operational costs
4,622,788
(943,294)
3,732,725
(2,468,009)
24
(62)
254,643
320,944
(21)
Operational profit
Financial costs
3,934,137
(443,414)
1,585,660
(158,309)
148
180
Net of other incomes
and non-operational
costs
251,605
36,240
594
Profit before
taxation
Net profit
Ratio of net profit to
sales volume
(percent)
No. of stocks of
company
3,742,328
1,463,591
156
Increasing
production volume,
increasing sales rate,
entering new
materials, foreign
exchange rate
evaluation
Increasing sales
volume, increasing
price of feedstock
-------Reducing doubtful
receivable costs
Loss as a result of
price evaluation of
currency
-------------Increasing ceiling of
banking facilities to
be received
Increasing profit as a
result of selling short
-term investment s
tocks
-------------
3,530,016
20%
1,164,466
10.2%
203
-------------
1,050,000,000
1,050,000,000
Sepahan Oil Company
2 – 2 – Comparative Statistics of Production
Information related to the productions of company is according to the following tables comparatively:
2 – 2 – 1 – Information on productions of the company according to the type of product
No.
Type of Product
1
2
3
4
Total
Base oil
Wax
Extract
Final Oil
Unit
Ton
Ton
Ton
Ton
Prediction
in 2014
305,600
81,000
203,400
80,000
670,000
March 20, 2014
Actual
Budget
Production
272,500
325,474
68,150
74,970
185,850
207,470
112,400
68,420
638,900
676,334
March 20, 2013
Actual
Budget
Production
230,080
247,070
51,680
65,900
155,040
181,600
90,000
80,030
526,800
574,600
Comparative Statistics of Production of Products in 2013 and 2014 and Prediction of 2014 Budget (Ton)
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Base oil (247, 070 – 325,474 – 305,600)
Wax (65,900 – 74,970 – 81,000)
Extract (181,600 – 207,470 – 203,400)
Final oil (80,030 – 68,420 – 80,000)
Grand Total (574,600 – 676,334 – 670,000)
2014 Budget Production in 2014
Production in 2013
Sepahan Oil Company
2 – 2 – 2 – Comparing Actual Monthly Production Volume with Budgeted Production in 2014
No.
Months of
Year
0
1
2
Total
Farvardin
Ordibehesht
Khordad
Tir
Mordad
Shahrivar
Mehr
Aban
Azar
Day
Bahman
Esfand
325.47
Comparing Actual Monthly Production Volume with Budget Production in 2014 (Unit: 1,000 tons)
Base oil
Extract
Wax
Final Oil
Actual
Budget Increase
Actual
Budget Increase
Actual
Budget Increase
Actual
Budget
Production
(Decrease) Production
28,908
22,708 6.20
15.116
15.488 (0.37)
7.144
5.679
1.46
5.742
9.367
26,858
22,708 4.15
16.165
15.488 0.68
6.933
5.679
1.25
9.595
9.367
28,206
22,708 5.50
18.567
15.488 3.08
6.764
5.679
1.08
4.932
9.367
29,916
22,708 7.21
18.741
15.488 3.25
6.983
5.679
1.30
4.339
9.367
28,654
22,708 5.95
19.929
15.488 4.44
6.347
5.679
0.67
5.114
9.367
26,879
22,708 4.17
14.651
15.488 (0.84)
5.921
5.679
0.24
7.782
9.367
28,593
22,708 5.88
17.542
15.488 2.05
6.555
5.679
0.88
7.809
9.367
24,663
22,708 1.95
15.647
15.488 0.16
4.814
5.679
(0.87)
1.708
9.367
23,468
22,708 0.76
15.906
15.488 0.42
5.268
5.679
(0.41)
8.318
9.367
24,330
22,708 1.62
17.313
15.488 1.83
5.755
5.679
0.08
5.446
9.367
26,863
22,708 4.15
19.256
15.488 3.77
6.412
5.679
0.73
4.456
9.367
28,137
22,708 5.43
18.641
15.488 3.15
6.074
5.679
0.39
3.177
9.367
272.50 52.97
207.47
185.85 21.62
74.97
68.15
6.82
68.42
112.40
Increase
(Decrease
(3.62)
0.23
(4.43)
(5.03)
(4.25)
(1.58)
(1.56)
(7.66)
(1.05)
(3.92)
(4.91)
(6.19)
(43.98)
Sepahan Oil Company
2 – 3 – Sales Statistics of Products
2 – 3 – 1 – Total sales performance according to the type of products in recent two years
Comparative Statistics of Sales
Sales Performance According to the Type of Products in Recent Two Years
March 20, 2014
March 20, 2013
Type of Product
Unit
Amount
Unit
Amount
(cubic meter)
(million rials)
(cubic meter)
(million rials)
368,218
9,656,215
289,679
6,588,674
Base oil
206,340
3,222,533
184,179
1,796,179
Extract
89,737
1,708,314
56,082
844,448
Slack Wax
74,014
3,080,486
92,855
2,020,948
Engine oil
88
3,347
131
2,904
Grease
201
12,068
610
14,733
Anti- Freeze
------------------------1734
123,396
Others
738,598
17,682,963
625,270
11,391,282
Total
------------(121,672)
------------(27,218)
Deduced: sales
discounts
738,598
17,561,291
625,270
11,364,064
Grand total after
deduction of
discounts
2 – 3 – 2 –Performance of Export Sales According to the Type of Products in Recent Two Years
Table of Company’s Export Sales According to the Type of Products in Recent Two Years
March 20, 2014
March 20, 2013
Type of Product
Unit
Amount
Unit
Amount
(cubic meter)
(million rials)
(cubic meter)
(million rials)
Base oil
353,191
9,223,313
281,581
6,446,668
Extract
168,567
2,616,531
124,166
1,256,985
Heavy Wax
71,178
1,386,408
19,152
371,270
Engine Oil
10,627
328,934
24,661
507,992
Anti- Freeze
0
0
166
3685
Total
603,563
13,555,186
449,726
8,586,600
Sepahan Oil Company
2 – 3 – 3 – Performance of Domestic Sales According to the Type of Products in Recent Two Years
Table of Domestic Sales According to Type of Products in Recent Two Years
March 20, 2014
March 20, 2013
Type of Product
Unit
Amount
Unit
Amount
(cubic meter)
(million rials)
(cubic meter)
(million rials)
Gasoline oil
35,340
1,481,550
42,392
901,614
Diesel oil
19,810
831,993
14,310
347,942
Other engines’ oil
207
16,152
647
17,174
Extract
37,773
606,002
60,013
539,194
Slack Wax
18,559
321,906
36,930
473,178
industrial Oil
5,399
247,372
10,750
243,581
Base oil
15,027
432,902
8,098
142,006
Anti- Freeze
201
12,068
444
11,048
Grease
88
3,347
131
2,904
Sea lubricants
2631
174,485
95
2,645
others
------------------------1734
123,396
total
135,035
4,127,777
175,544
2,804,682
deduced: (sales
------------(121,672)
------------(27,218)
discounts)
Grand total after
135,035
4,006,105
175,544
2,777,464
deduction of
discounts
Sepahan Oil Company
2 – 4 –Statistics of Purchasing and Consuming Raw Materials
Purchasing statistics of major raw materials has been presented completely as follows. Total raw materials purchases
by the company in 2013 stood at 12,445,205 million rials, in a way that its major portion is related to the purchase of
lube cut and ISO- recycle. Of total 12,445,205 million rials, 11,284,269 million rials of which was spent for
purchasing lube cut and ISO- recycle. Other purchases are related to additive, sheet, containers, etc.
Type of Raw
Materials
Country
Lube cut and ISOrecycle
Iran
Lube cut and ISOrecycle
Additives
Iran
Additives
Additives
Additives
others
United Arab
Emirates
United Arab
Emirates
United Arab
Emirates
United Arab
Emirates
Name of Supplier
March 20, 2014
March 20, 2013
million rials
1,393,893
million rials
621,062
9,890,376
6,325,574
---- ---------
76,314
Lubchem Company
180,993
50,230
Basic Company
102,933
66,464
Lubrex Company
87,886
169,580
789,124
12,445,205
183,734
7,492,958
National Iranian Oil
Products Distribution
Company (NIOPDC)
(other refineries)
Isfahan Oil Refining
Company
ISOMR Company
Sepahan Oil Company
2 – 5 – Changes in Investments
March 20,
2014
Assets
Current assets:
Cash balance
Short- term investments
trade receivable accounts
other accounts and receivable documents
balance of goods and materials
orders and down payments
total current assets
Non-current assets:
Long- term receivable accounts
fixed tangible assets
Intangible assets
Long- term investments
other assets
total non- current assets
total assets
March 20,
2013
Increase
(decrease) in 2014
as compared to
2013
Percent of increase
(decrease) in 2014 as
compared to 2013
million rials
million rials
655,037
14,937
1,881,710
2,371,225
3,063,280
1,010,759
8,996,948
1,121,153
26,854
1,179,948
1,066,456
2,436,441
972,731
6,803,583
(466,116)
(11,917)
701,762
1,304,769
626,839
38,028
2,193,365
(42)
(44)
59
122
26
4
32
685,601
729,058
18,209
507,920
4,500
1,945,288
10,942,236
955,303
754,439
17,854
259,080
4,500
1,991,176
8,794,759
(269,702)
(25,381)
355
248,840
(28)
(3)
2
96
------------(2)
24
(45,888)
2,147,477
2 – 6 – Changes in Structure of Capital and Policies of Financing
A) Major change has not been taken after in recent two years in owner’s equity while the latest capital increase
is related to 2011.
B) Changes in long- term liabilities of the company is according to the following table:
Description
End- service reserves
Balance in the beginning
period
million rials
22,032
changes
balance in yearend
million rials
14,722
million rials
36,754
C) Dividing profit in recent two years will be according to below table:
Description
March 20, 2014
March 20, 2013
Dividable dividend
3,530,016
1,164,466
(million rials)
Dividend per share (rials)
3,370
1,109
2 – 7 – Changes in Situation of Liquidity
Situation of cash operational flows has been presented completely as follows:
Percent of Changes
203%
203%
Sepahan Oil Company
million rials
million rials
Increase (decrease)
in 2014 as
compared to 2013
million rials
55,832
544,245
(488,413)
(90)
135,012
27,030
107,982
399
(377,846)
(113,120)
(264,726)
234
227
-------------(242,607)
73
(393,000)
(479,017)
154
236,410
211
-------------(49)
(299,125)
(77,877)
(221,248)
284
(64,317)
(36,281)
(28,036)
77
33
122
(89)
(73)
5,412
2,756
(206,000)
(9,000)
(197,000)
2,189
March 20, 2014
Operational
activities:
Net flow of entrance
of cash funds as a
result of operational
activities
Return of
investments and
payable dividend
on financing:
Received dividend
on banking deposits
Paid dividend on
financial facilities
Received dividend
Paid dividend
net flow of exit of
cash fund as a result
of return of
investments and paid
dividend on
financing
Income tax:
Paid income tax
Investment
activities:
Paid funds as a
result of purchasing
fixed tangible assets
Funds as a result of
selling fixed tangible
asset
funds as a result of
selling short- term
investments
Paid funds as a
result of collecting
long- term
investments
Paid funds as a
March 20, 2013
--------------
Percent of increase
(decrease) in 2014
as compared to 2013
Sepahan Oil Company
March 20, 2014
short- term
investments
Funds paid as a
intangible assets
Net flow of exit of
cash fund as a result
of investment
activities
of cash fund before
financing activities
Financing
Activities:
Receiving financial
facilities
Repaying original of
received financial
facilities
(exit) of cash fund as
a result of financing
activities
net of increase in
cash fund
Balance of cash fund
in the beginning of
year
Balance of cash fund
in the yearend
Noncash exchanges
and transactions
March 20, 2013
Increase (decrease)
in 2014 as
compared to 2013
Percent of increase
(decrease) in 2014
as compared to 2013
(355)
(20,275)
19,920
(98)
(265,227)
(62,678)
(202,549)
323
(751,127)
(75,327)
(675,800)
897
2,977,974
1,983,756
994,218
50
(2,692,963)
(1,075,426)
(1,617,537)
150
285,011
908,330
(623,319)
(69)
(466,116)
833,003
(1,299,119)
(156)
1,121,153
288,150
833,003
289
655,037
1,121,153
(466,116)
(42)
1,247,782
163,475
1,084,307
663
Sepahan Oil Company
2 – 8 – Statement of Financing Policies and Credit- Based Policies of Company
Restrictions of financial resources and ever increasing requirement to the liquidity required for enforcement of
development programs, the company has focused on new investments, financing and investments as one of the most
important strategic pivots of the company.
Therefore, making plan for optimal use of new and available resources, financing with acceptable cost and attaining
predefined objectives have been compiled and formulated in comprehensive program of Sepahan Oil Company.
2 – 9 –Changes of Working Capital
Changes of working capital in recent two years comparatively are according to the following table:
Description
Current assets
current liabilities
working capital
March 20, 2014
8,996,948
6,096,742
2,900,206
March 20, 2013
6,803,583
6,094,003
709,580
Percent of Changes
32%
0.04%
409%
With due observance to the abovementioned table, it is specified that trend of working capital has experienced
considerable increase with the optimal management of liquidity in the current year.
2 – 10 – Financial Ratios
Financial ratios of the main company are as follows:
Financial Ratio
Liquidity ratios
current ratio
Instant ratio
Ratio of current asset
Fiscal Year (2014)
1.48
0.92
0.82
Fiscal Year (2013)
1.12
0.78
0.77
Percent of Changes
24%
15%
6%
Sepahan Oil Company
Financial Ratio
Ratios of Activity
Ratio of total working
assets
Working period of balance
of goods (day)
Period of turnover of
operation
ratio of turnover of
receivable accounts
Ratio of payable accounts
Period of payable accounts
Ratio of Liability
Ratio of total liability
Ratio of current liability to
special value
Ratio of non-current asset
to special value
Ownership ratio
Ratios of Profitability
Ratio of gross profit
ratio of operational profit
Ratio of net profit
Return of Investment
(ROI)
Fiscal Year (2014)
Fiscal Year (2013)
Percent of Changes
1.78
1.42
20%
76.51
91.26
-19%
107.89
125.54
-16%
11.47
10.50
8%
6.68
53.93
3.42
105.37
49%
-95%
0.56
1.28
0.70
2.28
-24%
-79%
0.40
0.74
-84%
0.44
0.30
31%
26%
22%
20%
32%
33%
14%
10%
13%
-25%
38%
49%
59%
2 – 11 – Activities Related to After- Scales Services
-
Manual guide of consumers for accurate selection of lubricants
Training courses special of sales agents and major customers
Providing and publishing brochures (in the form of notebook of products, products’ equivalent booklets,
etc.) for optimal use of products of company and selection of suitable product due to the condition of the
device,
Sepahan Oil Company
2 – 12 – Transacting with Special Entities
Transacting with special persons and entities, subject of Article 129 of amendment of Trade Law in the current
year have been disclosed completely in Note 39 of financial statements in the reported fiscal year period.
2 – 13 – Policies and General Procedures of Company with Regard to Studying Transactions with Special
Entities
Based on bylaw of transactions of company and with observing provisions of Article 129 of amendment of
Trade Law and lack of partnership of beneficiary manager in voting procedure
2 – 14 – Information of Upcoming Financial Commitments
The financial commitments of the company according to the Note No.s 19 and 37 along with financial
statements have been disclosed.
Largest Exporter of Base Oil in the Middle East

We Link the World with 300- 500 Base Oil
Central Office Add.:
Sepahan Oil Company’s Bldg., No. 92, Baharan Sq., Argentine Sq., Tehran
Tel: 8347
Fax: 88783918
SMS: 10008347
Sepahan Oil Company
3rd Chapter:
Strategic System of Sepahan Oil Company
3 – 1 – Combination of members of Board of Directors
3 – 2 – No. of sessions of Board of Directors
3 – 3 – Salary, fringe benefits and reward of managing director and members of the Board of Directors
3 – 4 – Information related to the Board of Directors
3 – 5 – Information related to the executive managers of company
3 – 6 – Independent auditor and legal inspector of company
Sepahan Oil Company
3 – 1 – Structure of Board of Directors
Members of the Board of Directors of the company are as follows:
Legal Members of
Board of Directors and
Managing Director
Naser Khaleqi
Mohammad-Reza
Movasaghinia
Mohammad- Kazem
Hosseinkhani
Mehdi Riyahipour
Amir Hossein Bahreini
Membership Start
Date
Dc. 17, 2013
Sept. 28, 2012
Nov. 27, 2013
Oct. 3, 2013
April 20, 2014
Position
Chairman of Board of
Directors
Vice Chairman of Board of
Directors and managing
Director
Commissioned member of
Board of Directors
member of Board of Directors
Type of Membership
(Commissioned / Noncommissioned)
Non-Commissioned
Commissioned
Commissioned
Non- commissioned
Non – commissioned
3 – 2 – No. of Meetings of Board of Directors
A number of 29 meetings of the Board of Directors were held in 2013 and necessary decisions have been
adopted with regard to the issues of the company within the framework of articles of association of the
company.
3 – 3 – Salary, Fringe Benefits, Reward of managing Directors and Members of Board of Directors
According to the provisions envisioned in Article 38 of articles of association of company, a certain ratio of
special profit of the company is provided available to the Board of Directors as reward every year based on the
decision of the General Assembly. This ratio should not exceed 5% of the profit which is paid to the
shareholders in the same year. Determination and way of distribution of bonus of the Board of Directors is
made after being approved by the General Assembly.
Determination of salary of managing directors and relevant terms and conditions shall be borne by the Board of
Directors.
Sepahan Oil Company
3 – 4 – Information Related to the Board of Directors
Name and
surname
(representative
of legal entity)
Position
Academic or
professional
education
Membership
date in the
Board of
Directors
Naser Khaleqi
Chairman of the
Board of
Directors
BA Degree in
Mechanics
Engineering
Dec. 17, 2013
MohammadReza
Movasaghinia
Vice Chairman
of Board of
Directors and
Managing
Director
Ma Degree in
Industrial
Engineering
Sept. 28, 2012
Commissioned
member of
Board of
Directors
BA degree in
Accounting
MohammadKazem
Hosseinkhani
Nov. 27, 2013
Working
Experience
- Senior advisor
to the oil
minister,
-Minister of
Labor and
Social Affairs
-Majlis
representative
in 5th and 6th
period from
Isfahan
jurisdiction
-Managing
director of
Sanam Trade –
Industrial
Company
-Managing
Director of
Samen alA’emeh Group
-Manager of
Fajr Industrial
Group
-Financial and
Logistics
Deputy of Oil
Industry
Pension Funds
-Financial
manager of Oil
Industry
Pension Funds
-Main legal
inspector of
Previous
membership at
the Board of
Directors of
other
companies in
recent five
years
---------
-Shemsh Omran
Company
-Iran Aerospace
Industries
Organization
-Saba Naft
Logistics
Services
Company
-Amin Parsian
Company
-Khebregan
Saham
company
Sepahan Oil Company
Name and
surname
(representative
of legal entity)
Position
Academic or
professional
education
Membership
date in the
Board of
Directors
Mehdi
Riyahipour
Member of
Board of
Directors
BA degree in
Chemical
Engineering
Oct. 3, 2013
Amir- Hossein
Bahreini
Member of
Board of
Directors
MA Degree in
Chemical
Engineering
April 20, 2014
Working
Experience
Tehran Hariq
Company, a
subsidiary to
Oil Industry
Pension Funds
-Main inspector
of Nanshir
company,
subsidiary to
Oil Industry
Pension Funds
-Managing
director of Petro
Arman Ghadir
Kish Company
-managing
director of Iran
Automobile
Parts company
-Deputy
Managing
director of Iran
Khodro
Industrial
Group (IKCO)
-Managing
director of
Pasargad Oil
company
-Managing
director of
Petronad Asia
Industries
Company
-Manager of
Factories of
Kimiagaran
Previous
membership at
the Board of
Directors of
other
companies in
recent five
years
-Petro Arman
Ghadir Kish
company
-Iran
Automobile
Parts Company
-PEDCO
Company
-Aryasasol
Petrochemical
Company
-Tose’eh Negin
Makran
Company
- Kimiagaran
Emruz
Company
Sepahan Oil Company
Name and
surname
(representative
of legal entity)
Position
Academic or
professional
education
Membership
date in the
Board of
Directors
Working
Experience
Previous
membership at
the Board of
Directors of
other
companies in
recent five
years
Emruz
Chemical
Industries
Company
3 – 5 – Information Related to the Executive Managers of Company
The table related to the specifications and experiences of executive managers of the company is as follows:
Name and
surname
Position
Education
Mohammad Jalal
Shahrizi
Deputy managing
director
MA degree in
Industrial
Management
Abdollah
Commercial
MA degree in
Executive
experience in
company from
Dec. 24, 2012
Oct. 7, 2012
Important executive
experiences
-Financial and
economic deputy of
Sepahan Oil
Company
-Managing director
of Raman Energy
and Technology
Development
company
-Deputy chancellor
of Malek Ashtar
University of
Technology in
Commercialization
and technical
transfer Affairs,
-Financial and
economic deputy in
the field of advanced
technological
development
-Managing director
Sepahan Oil Company
Name and
surname
Position
Education
Executive
experience in
company from
Asgharzadeh
Affairs Deputy
Energy Economy
and Marketing
Alireza Moghimi
Hanji
Deputy Systems
and Human
Resources Affairs
MA degree in
Executive
Management
April 26, 2014
Fazlollah Naseri
Manager of
Refinery and
Deputy Operations
Affair
BA degree in
Physics
Jan. 5, 1989
Important executive
experiences
of Setareh Shargh
Samin Company
-Commercial Deputy
of Fajr Group
-Advisor to Refah
chain Stores
Company
-Adviser of
Commercial
Research and
Studies Institute
Logistics and
Planning Deputy of
End-Service Reserve
of Municipality of
Tehran
-Deputy Logistics
and Human
Resources Affairs in
IPMI (management
of Iran Industrial
Projects)
Advisor to the
managing director in
investment and
Logistics Affairs of
Bank Shahr (City
Bank)
Human Resources’
Affairs Deputy in
Shahid Mahalati
Industrial Group
-Operations Dept.
manager of Sepahan
Oil Company
-Head of Repair and
maintenance
Department of
Sepahan Oil
Refinery
-Head of Container
Making and Filling
Sepahan Oil Company
Name and
surname
Position
Education
Executive
experience in
company from
Mohammad Hassan
Vafaii
Engineering
Deputy
BA degree
Chemical –
Petrochemical
Engineering
Jan. 5, 1989
Masoud Kashiha
Sales and
Marketing Deputy
BA degree in
Chemical – Gas
Industries
Engineering
March 10, 2013
Mohammad-Reza
Pousti
Plan and Budget
Deputy
MA degree in
business
Oct. 19, 2013
Important executive
experiences
Department of
Sepahan Oil
company
-Head of Repair and
Maintenance
Department of
container making
and Filling unit in
Sepahan Oil
Refinery
-Manager of
Processing Dept. of
Sepahan Oil
Company
-Head of Laboratory
and Quality Control
(QC) unit of
Sepahan Oil
Refinery
-Head of repair and
maintenance
department of oily
byproducts of
Isfahan Oil Refining
Company
-Deputy managing
director of Moshkat
Jam Engineering
Company
-Manager of
Planning and
Warehouse of
DAMDARAN
Company, Manager of group
companies of Pak
company
-Manager of Factory
of Pakshoo
Company
-Mmber of Board of
Directors of Bana
Sepahan Oil Company
Name and
surname
Position
Education
Executive
experience in
company from
administration
Legal Manager
Ph.D. degree in
International Trade
Feb. 28, 2013
Financial Manager
BA in Accounting
BA in Accounting
August 6, 2013
Seyed Mohammad
Fasih Marnani
Hamid- Reza
Mosaedi
Important executive
experiences
Naqsh Kowsar
Company
-Managing director
of Mehr Asan Sanat
Company
-Managing director
of Mehr Asan Sanat
Company
-Managing director
of Arman Avan
Company
-Assembling Deputy
of Fajr industrial
Group
-Legal advisor of
Iran National Flag
Carrier
- Legal advisor to
RighTel Company
-Professor of Islamic
Azad University,
Science and
Research Branch
-financial and
Administrative
Deputy of National
Housing company
-financial and office
deputy of Pars
Machine making
Company
- Financial and
administrative
manager of Iran
Glass Wool
Company
-Deputy managing
director of Ajorsa
Industrial and
Production company
Sepahan Oil Company
-
It should be noted that salary and fringe benefits of executive managers, staff and personnel of the company
in all levels are determined based on bylaw of salary and wage. The salary and fringe benefits are paid if
details are approved by the managing director.
3 – 6 – Independent Auditor and Legal Inspector
According to Article 45 of articles of association of the company, Ordinary General Assembly determines and
specifies a main legal inspector and an alternative (substitute) inspector every year for a period of one year. It should
be noted that legal inspector should be a professional auditor as trusted and authenticated by TSE.
In the session of Ordinary Annual General Assembly of Shareholders held on July 17, 2013, the Assembly selected
Iran Mashhoud Auditing Institute as legal inspector and auditor of the company for a period of one year. The Board
of Directors was given full power to determine fee of legal inspector of the company.
It should be noted that Behmand Auditing Institute had been selected as alternate or substitute legal inspector in the
reported fiscal year period.
Golden Trophy of Top and Exemplary Company in 2013
(2nd Iran Top Companies’ Festival)
Sepahan Oil Company
4th Chapter:
Report on Risk Analysis of Sepahan Oil Company
4 – 1 – Feedstock Provision Risk
4 – 2 – Risk of fluctuations of interest rate
4 – 3 – Risk of fluctuations of currency rate
4 – 4 – Risk of increased feedstock price and other production raw materials,
4 – 5 – Risk of international factors and governmental rules and regulations,
4 – 6 – Liquidity risk
Sepahan Oil Company
4 – 1 – Feedstock Provision Risk
Since a major part of main feedstock of the company (Lube Cut) is provided from Isfahan Oil Refining Company,
and considering that existence of main monopolized supplier is followed with the increased risk for provision of
feedstock, necessary measures have been considered for supplying lube cut from other resources (such as other
refineries producing lube cuts) in order to minimize feedstock provision risk. Meanwhile, production activity of the
company ceased for a period of 40 days in 2014 due to the basic repair and maintenance services of Isfahan Oil
Refinery. Since production activity of the company ceased for a period of 40 days in 2014, purchasing lube cut from
Bandar Abbas Oil Refining Company and Shahid Tondgouyan Oil Refining Company was put atop agenda.
However, with due observance to the abovementioned cases, providing feedstock with high risk is evaluated.
4 – 2 – Risk of Fluctuations of Interest Rate
Risk as a result of changes of interest rate is related to the receivable financial facilities of the company. Major
receivable financial facilities of the company is of short- term facilities type received from domestic banks with
fixed commission rate between 20% to 22% at large. It should be noted that receiving rials and currency-based
facilities is inevitable in order to company’s operational turnover.
Since only 27% of total assets of the company has been financed from short- term financial facilities according to
the financial statements in 2013, and since proportion of financial costs to total income of the company stands at
2.52%, financial cost of company has been conducted for the subsequent fiscal year based on latest rates approved
by private and state-owned banks. Moreover, since financial costs to operational profit stands at 11% and
considering the commission rate of partnership and non- partnership contracts, prediction of financial cost has been
made for the next fiscal year based on the latest rate approved by public and private banks. If monetary and banking
policies of the country in 2014 are not changed, risk of fluctuations of interest rate for the company will be
considered “low” in a way that income of each share of the company will not be affected by the interest risk
considerably.
4 – 3 – Risk of Fluctuations of Currency Rate
Since Sepahan Oil Company focuses on exporting its products, paying due attention to the fluctuations of rate of
currency is necessary as an influential risk. In other words, the company is considered as export-based company.
Analyses indicate that raw materials comprise 92% of final cost of company’s products, so that rate of raw materials
purchased from Isfahan Oil Refining Company is determined based on FOB (Free on Board) of furnace (fuel) oil
180 in Persian Gulf. On the other hand, most additives used in process of producing final oils of the company are
imported. Therefore, major part of raw materials will subject to fluctuation due to the change in prices of FOB
Persian Gulf and/or fluctuations of rate of currency.
Sepahan Oil Company
Considerable fluctuations of currency rate over previous two years and its rapid reduction after June 2013 as well as
uncertain situation of foreign exchange market in future, etc. cause skyrocketing risk of currency rate. It is obvious
that pricing some products of the company for selling in domestic markets are carried out by the Organization to
Support Rights of Producers and Consumers. If price changes of raw materials and currency rate are exceeded the
price as accepted by the Organization to Support rights of Producers and Consumers, the company’s risk will be
increased. Generally speaking, risk of fluctuation of currency rate will remain averagely.
4 – 4 - Risk of increased feedstock price and other production raw materials
Continuous change of lube cut rate as main raw material for producing products of the company is considered as one
of the most important factors due to its dependency on world oil price. Therefore, to reduce the said risk, the
company followed up world oil price continually and also studied its trend and economic factors affecting it with the
aim of predicting and preparing for increase or decrease of price of lube cut. It is obvious that Sepahan Oil Company
is not facing serious threat currently with relation to supplying its main raw materials due to neighboring with
Isfahan Oil Refinery and receiving lube cut directly through pipe and also receiving other raw materials as needed
from the mentioned refinery. Given the above issue, increased “Utility” costs and price of final cost of additives for
production of final oil have strengthened price risk of basic raw materials due to imports of these products from
overseas.
4 – 5 – Risk of international factors and governmental rules and regulations,
Hereunder are considered as factors constituting this risk:
-
Fluctuations of oil price,
Sanctions pertinent to the banking operations,
Sanctions related to transport (sea, land, etc.),
Sanctions pertinent to technical know- how and knowledge,
Changing governmental rules and regulations,
It is tried to minimize the risk as much as possible with substituting domestic suppliers and safe and reliable agents.
Sepahan Oil Company
4 – 6 – Liquidity risk
Liquidity and financing risk which is also called as “risk of cash fund flow” is attributed to inability in paying
commitments. There are several methods for management of this risk, the most important of which can be referred
to: prediction of commitments in lengthier six-month to two-year distances, suitable planning of cash fund flow,
limiting cash fund flow gap, diversifying and considering new financial resources for filling liquidity gap.
With the calculation of liquidity ratios, ability and power of company can be measured in repayment of short-term
debts. Given the presented financial statements, current ratio obtained in the fiscal year closing on March 20, 2013
stood at 1.23 percent, the figure of which has reached to 1.39 percent in the fiscal year closing on March 20, 2014.
The more size of current ratio is found larger, the more liquidity situation of the company will be improved.
Accordingly, repayment of current debts will face with partial and meager problems. As a matter of fact, the said
issue is meant reduction of risk of liquidity in the report fiscal year period in 2014.
Sepahan Oil Company
5th Chapter:
Report of Social Performance of Sepahan Oil Company
5 – 1 – Report on situation of consumption of energy in the company,
5 – 2 – Report on environmental performance of the company,
5 – 3 – Measured conducted with regard to observing rules and regulations governing environmental effects,
5 – 4 – Report on performance of company with relation to increasing sanitary, hygienic and welfare level of staff
and personnel
Sepahan Oil Company
5 – 1 – Report on situation of consumption of energy in the company,
Comparative statistics of energy consumption and conservation of the company in recent four years is according to
below table:
Description
Water
consumption
(cubic
meter)
electricity
(kW/hour)
gas (cubic
meter)
gas oil (liter)
Comparative Statistics of Energy Conservation
March 20, 2014
March 20, 2013
March 20, 2012
million
million
million
QTY
QTY
QTY
rials
rials
rials
146,950
1,197,495
135,080
1,058,392
103,207
253,932
March 20, 2011
million
QTY
rials
105,168
258,448
34,396,188
48,429,832
29,568,168
42,658,245
30,512,612
7,909,470
30,404,768
6,296,354
22,989,113
27,609,924
22,991,441
23,175,372
27,640,087
23,217,673
28,505,874
3,912,274
144,000
360,000
237,000
794,898
141,000
352,500
140,000
350,000
* The company conducted major repair and maintenance services in 2012 and in some cases; the company increased
or reduced energy conservation.
Hereunder are considered as measures conducted by the company in 2013 in the field of conservation of energy:
Activities Conducted by the Company for Optimizing Conservation of Energy in 1392 (Mar. 20, 2014)
Conservation
Project for
Saving
Saving gas
Training
Name of Unit
and Saving
implemented
Electricity
consumption
activities
(division)
Water (cubic
optimization
(kW/hour)
9cubic meter)
(man/hour)
meter)
(QTY)
Waxing unit
30,000
2,800,000
8,450,000
5
2300
furfural unit
48,000
2,000,000
4,550,000
4
1950
tanks’ unit
10,000
1,200,000
0
3
1600
oil merging unit
18,000
1,200,000
0
3
1200
containerizing
14,000
800,000
0
2
1100
unit
-
Considering the optimization and increasing capacity of operational units, the company has shown
considerable achievement in the field of consumption of water, power and gas as compared to the increased
amount of feedstock needed for units and also increased amount of target product (base oil) as much as
threefold.
Sepahan Oil Company
5 – 2 – Report on environmental performance of the company,
In compilation of three-year strategy of energy and environment, Sepahan Oil Company has focused on
observing necessary rules and regulations related to pollution and conservation of energy on one hand and
meeting expectations of society on the other hand.
Accordingly, the company carried out various measures in order to attain the mentioned objectives, some of
which are as follows:
Measures Carried Out by Company in Order to Safeguard and Preserve Environment in 2014
Physical Progress
Scope of activity
Name of Plan
Project Start Date
Project End Date
(%)
Safeguarding,
in the beginning of before auditing
100%
keeping and
year
operation
promoting
environmental
management
system (EMS)
based on ISO
In the Field of
14001 standard
Product
Consecutive use of Continuous
Continuous
100%
fuel gas in
treatment and
refining operation
and lack of use of
pollutant fuels
Promoting quality
100%
of containers of
products in order
to lack of seepage
after loading or
warehousing in
storage
Installing online
Sept. 8, 2013
100%
analyzer with antiIn the field of
explosion sensor
production and
logistics activities of oxygen in
furfural unit
Conclusion of self- Jan. 2013
Jan. 2014
100%
assessment
contract in
monitoring
environment in
cooperation with
accredited
Sepahan Oil Company
Physical Progress
Scope of activity
Name of Plan
Project Start Date
Project End Date
(%)
laboratory of
environment
Participating in
in the course of
In whole year
100%
environmental
year
exhibitions and
seminars as
sponsor
concrete mixing
Sept. 11, 2013
Dec. 16, 2013
100%
operation and
flooring of extract
campuses and
selvedge
Testing all forkIn the long run of a In the long run of a 100%
lift trucks and
year
year
cranes in order to
assuring lack of
environmental
pollutants
Compiling initial
March 2014
March 2014
100%
program of waste
management
according to
Article 5 of Waste
management Law
Regular washing
in the course of
in the course of
100%
of spaces related to year
year
the production and
also discharging,
loading and
unloading
operations by
water steam
Using energy100%
saving lamps for
saving in energy
conservation
Construction of
July 6, 2013
-----------40%
wastewater
treatment house for
sanitary and
industrial wastes
of company
Sepahan Oil Company
Physical Progress
Scope of activity
Name of Plan
Project Start Date
Project End Date
(%)
Repair and
100%
Within the
maintenance
framework of
services of green
social
area of company
responsibilities
and creation of
diversified herbal
species in it
(irrigation and
pesticide spray)
Controlling and
in the course of a
in the course of a
100%
inspecting
year
year
transport services
in order to lack of
environmental
pollutants
5 – 3 – Measured conducted with regard to observing rules and regulations governing environmental impacts,
The company has conducted the following steps in line with observing rules and regulations governing the
environmental impacts:
-
Self –assessment in monitoring environment by accredited laboratory of environment (four stages),
Buying and installing online analyzer devices and equipment as well as possibility of viewing performance
of analyzer instantly and continually for provincial Department of Environment
Start construction operation of sanitary, hygienic and industrial wastewater treatment houses at the
company,
Optimization of conservation of electrical energy and substituting old lamps with energy- saving lamps,
Start construction operation of sanitary, hygienic and industrial wastewater treatment houses at the
company,
Updating all environmental aspects and consequences of the organization and contractors employed at the
site
5 – 4 – Report on performance of company with relation to increasing sanitary, hygienic and welfare level of staff
and personnel
1- Fulfilling industrial – clinical examinations for all contract-based and crew members and also
contractors (100%)
Sepahan Oil Company
2- Benefitting from psychology experts in trend of medical examinations in the current year (started
March 21, 2015)
3- Evaluating and measuring ergonomic postures special of staff and contractors using Rolla method,
4- Buying one new ambulance car, brand new, Benz model (high ceiling)
5- Launching preliminary measures for buying specialized HSE (health, safety and environment) software
6- Completing workshop ID forms for all workshops of the company
7- Completing job IDs for all employed staff and personnel at the organization,
8- Measuring factors of occupational health for all workshops such as sound, light, vibration, etc.
Sepahan Oil Company
6th Chapter:
Activities of Development of Human Resources
6 – 1 – Information related to organizing specialized training courses special of staff and personnel,
6 – 2 – Measures related to the improvement of quality of human resources,
6 – 3 – Measures conducted by the company in line with focusing on systems for development of human resources,
6 – 4 – Information related to combination of manpower of company
-
Table of combination of manpower according to the type of work and also type of job,
Table showing experience of staff and personnel in 1392 9ended March 20, 2014),
Table showing classification of staff and personnel in 1392 (ended March 20, 2014),
Comparative statistics of educational level of staff and personnel
Sepahan Oil Company
6 – 1 – Information on Organizing Specialized Training Courses (Special of Staff and Personnel)
No.
1
2
3
4
5
6
7
8
9
10
11
12
Information Related to the Training Performance of Company in 1392 (Ended March 20, 2014)
No. of
Course Period /
Name of Course
Venue
Date
Participants
Hour
Principles of repair and
2
16
Tehran –
April 22
maintenance services of
Havayar
screw atlas kopek
Company
compressors
Benefiting from the best
1
16
Tehran –
April 22
experiences in management
Academy Hotel
of repair and maintenance
services
Process of successful
1
0
IntraApril 22
employment (distance
organizational
learning)
New solution for
3
6
Tehran,
April 22
automation system and
Conferences
industrial networks
Center
Practical strategies to reduce 1
16
Academy Hotel, May 24
dilapidation of parts and
Tehran
equipment
Key indexes of performance 2
16
Academy Hotel, May 24
control in repair and
Tehran
maintenance services
Training senior of industrial 3
6
Naqsh-e Jahan
June 25
wastewater treatment
Sugar company,
houses, challenges and
Isfahan
strategies
R&D (preparatory)
1
20
Ministry of
June 25
Industry, Mine
and Trade,
Tehran
Familiarity with steam traps 1
7
Saman
June 25
and general condense
PayaIdeh
Company,
Tehran
principles of entertaining
18
8
IntraJuly 27
and ceremonies
organization
Jon classification
2
8
Soroush
July 27
Institute,
Tehran
Various types of base
17
4
IntraJuly 27
lubricants and technology of
organization
manufacturing and their
Sepahan Oil Company
No.
13
14
15
16
17
18
19
20
21
22
23
24
25
26
No. of
Course Period /
Name of Course
Venue
Date
Participants
Hour
standard
Setting up system for
1
8
Isfahan
July 27
employing human resources
Welding inspection
8
16
interAugust 28
(preparatory)
organization,
technical and
vocational
Preparatory safety
1
2
intraMarch 21
organization
Training workshop for
40
3
intraApril 22
compiling and streamlining
organization
strategies based on
Balanced Scorecards (BSC
Familiarity with ARANG
6
1
IntraApril 22
software
organization
Fire extinguishing (Bushehr 19
2
Bushehr site
May 24
site)
Familiarity with safety rules 19
4
Bushehr site
May 24
and regulations (Bushehr
site)
Elementary safety
1
2
IntraJune 25
organization
Principles of writing, office
9
12
IntraAugust 28
and administrative
organization,
correspondences, and report
technical and
writing (applied)
vocational
Issuance of work permit
15
4
IntraSept. 29
organization
Seminar on Automation
2
7
Barg Company, Sept. 29
Equipment and
Tehran
Instrumentation in Oil
Industry
Effective communications
20
4
Research Center Sept. 29
(effective communications
- Isfahan
with environment and
others)
Protective Relay Training
6
3
IntraSept. 29
Seminar
organization,
Parto Danesh
8
12
IntraSept. 29
and administrative
organization,
technical and
Sepahan Oil Company
No.
27
28
29
30
31
32
33
34
35
36
37
38
39
40
No. of
Course Period /
Name of Course
Venue
Date
Participants
Hour
writing (applied)
vocational
10
24
IntraSept. 29
organization,
Toof Academy
Safety of hoists and cranes
2
7
Research and
Oct. 30
Education
Center - Isfahan
Principles and techniques of 20
8
Research
Oct. 30
management and
Center, Isfahan
supervision
Principles of safety and
22
8
IntraOct. 30
occupational health
organization,
Atash Maharan
Sanat
9
12
IntraOct. 30
and administrative
organization,
technical and
writing (applied)
vocational
s5 (reorganizing work
12
8
intraOct. 30
environment) – applied
organization
Principles of treatment of
10
8
IntraOct. 30
industrial and sanitary
organization –
wastes
Kashefan Nil
Fam company
Crisis management
22
8
IntraOct. 30
organization,
Atash Maharan
Sanat Company
Safety of process
22
8
intraOct. 30
organization,
Atash Maharan
Sanat Company
Nutrition based on blood
16
3
IntraNov. 30
group
organization
Healthy nutrition and
12
2
IntraNov. 30
chronic diseases
organization
ISO 9001 : 2008 standard
22
8
intraNov. 30
necessities
organization
6
2
intraNov. 30
chronic diseases
organization
Metering seminar
3
16
InterNov. 30
organization
Sepahan Oil Company
No.
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
No. of
Course Period /
Name of Course
Venue
Date
Participants
Hour
Effective communications
12
8
InterNov. 30
(effective communications
organization
with environment and
others)
Ultrasonic inspection of
2
64
InterNov. 30
welding, levels 1 and 2 (II
organization
& Level IU.T ASNT)
Familiarity with various
13
2
IntraNov. 30
types of engine oils and
organization
their standards
PM preventive Repair and
11
16
InterDec. 31
maintenance services
organization
12
2
IntraDec. 31
chronic diseases
organization
Planning and controlling
1
24
InterDec. 31
professional project
organization
Mikrotik MTCNA Camp
1
40
InterDec. 31
organization
Basics, description of IMS
1
24
InterDec. 31
auditing necessaries
organization
10
2
inside
Dec. 31
chronic diseases
organization
Seminar on keynotes in
1
8
outside
Jan. 31
establishment of laboratory
organization
management system
Analysis with stress
1
24
outside
Jan. 31
CAESAR II
organization
Principles and techniques of 1
16
outside
Jan. 31
management and
organization
supervision
Labor and Social Security
1
8
outside
Jan. 31
Act
organization
Point milk
1
31
outside
Jan. 31
organization
II & ASNT PT LEVEL I
1
40
outside
March 3
organization
PLC
4
8
outside
March 3
organization
Project management
10
32
outside
March 3
organization
5
2
inside
March 3
chronic diseases
organization
Sepahan Oil Company
No.
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
No. of
Course Period /
Name of Course
Venue
Date
Participants
Hour
8
2
inside
March 3
chronic diseases
organization
General course (AEC3)
7
30
Sepahan Oil
April 7
Company
Specialized course (BRPI2) 2
28
Sepahan Oil
April 6
Company
Specialized course (BRPI4) 7
28
Sepahan Oil
April 8
Company
Measurement of
20
4
Sepahan Oil
May 11
performance based on
Company
Balanced Scorecard (BSC)
2nd Conference and ICT
2
16
Shahid Beheshti Nov. 26
Exhibition in Oil, Gas,
Intl.
Refining and Petrochemical
Conferences
Industries
Center, Tehran
9th Human Resources
7
16
IRIB Intl.
Nov. 19
Conference
Conferences
Center
Training Farzin 1
13
3
Sepahan Oil
Nov. 2
Company
Training Farzin 2
6
3
Sepahan Oil
Nov. 29
Company
Claim Management
3
8
Soroush Study
Jan. 6
Training Seminar
and Technology
Institute
Training Jam
2
4
Industrial
Jan. 15
management
organization
General course (CKS1)
14
40
Sepahan Oil
Oct. 24
Company
CFA Program (financial
1
192
ARYANA
Oct. 29
analysis)
Institute
11
28
Sepahan Oil
Nov. 10
Company
Specialized course (PI5)
7
34
Sepahan Oil
Nov. 10
Company
1
28
Sepahan Oil
Nov. 27
Company
specialized course (AEC1)
8
28
Sepahan Oil
Dec. 21
Company
Specialized course (UI1)
6
28
Sepahan Oil
Dec. 24
Company
Sepahan Oil Company
No.
77
78
79
80
81
82
83
No. of
Course Period /
Name of Course
Venue
Date
Participants
Hour
Bylaw of SSO and
1
8
Soroush Study
Jan. 29
exemptions of insurance
and Technology
premium in contracting
Institute
contracts and new penalty
write off law
Law on holding tenders and 2
16
Noavaran
March 20
executive bylaws
Danesh Pooyan
Institute
Empowering officials of
1
8
Soroush Study
Feb. 20
offices
and Technology
Institute
5
28
Sepahan Oil
Jan. 12
Company
Specialized course (BRI1)
4
28
Sepahan Oil
Dec. 30
Company
Specialized course (BRI
4
24
Sepahan Oil
Feb. 8
(REMEDY COURSE)
Company
1
28
Sepahan Oil
Feb. 1
Company
Sepahan Oil Company
6 – 2– Measures related to the improvement of quality of human resources,
Sepahan Oil Company has considered strategy of its manpower according to the following cases with the aim of
providing, developing and managing human resources with required motivation for attaining success in international
class:




Development of technical know-how and capability of personnel based on organization’s strategic
requirements,
Promotion of level of staff services retrieval system for boosting motivation and efficiency of personnel
and staff,
Promotion of processes of human resources,
Establishing balance between work and life of staff
Sepahan Oil Company
6 – 3 – Measures conducted by the company in line with focusing on systems for development of human
resources,
No.
1
1–12–13–14–12
2–22–32–4–
3
3–13–24
4–1–
5
5–15–25–35–4–
5–5–
5–6–
Measured Conducted by the Company in Line with focusing on systems of Development of Human Resources
Title
Not started
Partial Progress
Considerable
Fully Materialized
Progress
Strategic manpower planning
system
Strategic human resources
*
development planning system
Manpower employing and
*
planning system
Job progress system
*
staff promotion and alternative*
fostering system
Modern management system
*
Proposals’ system
*
Partnership teams’ system
*
Environment reorganizing
*
system (S5
Staff reorganizing training
*
system
staff training system
*
Training efficiency and
*
efficacy system
Human resources information
system
Mechanized human resources
*
system
Human resources preserving
*
system
Staff services retrieval system
*
Performance management and
*
assessment system (staff –
managers - whole company),
Health and safety system
*
Staff satisfaction measurement
*
system
Efficiency measurement system
*
Motivational and welfare
*
services system
Sepahan Oil Company
6 – 4 – Information related to manpower based on type of work and type of job
No.
A
B
C
Information Related to manpower based on type of work and type of job
Gender
Classification of personnel by 2014
Employee
Worker
Man Woman Permanent Contractual Permanent Contractual
135
1
31
100
2
0
Direct production
1-Production
69
1
20
50
0
0
2-Production logistics 66
0
11
50
2
0
67
4
13
58
0
0
Indirect production
1- Quality
17
1
2
16
0
0
control
2-Engineering
21
1
6
16
0
0
3-Research
1
0
0
1
0
0
4-Training
0
0
0
0
0
0
5-Others
28
2
5
25
0
0
122
33
4
150
0
0
Logistics Services:
1-Administrative
33
8
0
40
0
0
2-Financial
17
11
1
27
0
0
3-Commercial
40
5
3
42
0
0
4-Others
32
9
0
41
0
0
Total
324
38
48
308
2
0
Description
others
Temporary
0
0
0
0
0
3
0
3
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
1
0
0
0
4
Information Related to the Manpower Based on Type of Work and Type of Job
Classification of personnel by 2013
increase
(decrease)
Employee
Worker
in a year
Permanent Contractual Permanent Contractual Temporary Others
32
95
2
5
0
2
0
22
49
0
0
0
1
-2
10
46
2
5
0
1
2
12
51
0
0
0
1
7
2
13
0
0
0
1
3
5
14
0
0
0
0
3
0
0
0
0
0
0
1
0
0
0
0
0
0
0
5
24
0
0
0
0
0
4
148
0
9
0
1
-6
0
31
0
9
0
0
1
1
25
0
0
0
0
2
3
39
0
0
0
0
3
0
53
0
0
0
0
-12
48
294
2
14
0
3
1
QTY
by
by
2014 2013
136
70
66
71
18
22
1
0
30
155
41
28
45
41
362
136
72
64
64
15
19
0
0
30
161
40
26
42
53
361
Sepahan Oil Company
6 – 4 – Table of Experience of Staff and Personnel in 2014
Table of Working Experience of Staff in 2014
No.
1
2
3
4
5
6
7
Total
Description
Direct
production
indirect
production
administrative
Financial and
economic
Commercial
Sales and
marketing
Others
Less than 5
years
man woman
36
0
5 to 10 years
10 to 20 years
20 to 30 years
woman
0
above 30
years
man woman
10
0
man
29
woman
1
man
39
woman
0
man
21
man
135
woman
1
15
1
14
3
25
0
7
0
6
0
67
4
13
1
6
8
9
3
2
3
10
7
0
0
1
3
0
0
0
3
0
0
33
17
8
11
14
9
4
4
6
4
0
2
11
0
1
0
4
4
0
0
5
3
0
0
40
20
5
6
4
92
2
25
1
66
0
11
1
93
1
2
0
40
0
0
6
33
0
0
12
324
3
38
Total
6 – 4 – Table of age classification of Staff in 2014
Table of age classification of Staff in 2014
No.
1
2
3
4
5
6
7
Total
Description
Direct
production
indirect
production
administrative
Financial and
economic
Commercial
Sales and
marketing
Others
Less than 25
years
man woman
0
0
25 to 35 years
35 to 45 years
45 to 55 years
woman
0
above 55
years
man woman
14
0
man
43
woman
1
man
52
woman
0
man
26
man
135
woman
1
0
0
28
3
25
1
8
0
6
0
67
4
2
0
0
0
19
3
6
11
9
5
2
0
2
6
0
0
1
3
0
0
33
17
8
11
2
0
0
1
15
13
3
3
11
2
2
2
11
4
0
0
1
1
0
0
40
20
5
6
0
4
0
1
4
125
2
29
2
106
1
8
4
61
0
0
2
28
0
0
12
324
3
38
Total
Sepahan Oil Company
6 – 4 – Comparative Statistics of Educational Level of Staff and Personnel
Educational Level
Blow diploma
Diploma
Above Diploma
Bachelor’s Degree
Master’s degree and above
March 20, 2012
40
96
52
149
28
March 20, 2013
36
103
50
149
23
March 20, 2014
30
105
44
153
30
Sepahan Oil Company
7th Chapter: Measures Related to the Assignments of Assembly in Previous Year
7 – 1 – Measures conducted on assignments of General Assembly
The assignments of the General Assembly of shareholders on July 17, 2013 and also measured conducted with
related to the mentioned assignments are as follows;
No.
1
2
No. of
Paragraph
A-1
A- 2
subject of assignment
Based on Paragraph 4 of report of legal auditor, the
General Assembly stipulated that considering the
significance of subject, the company should embarked on
receiving written confirmation of auditing with regard to
the trade receivable accounts and documents, other
receivable accounts, advance payments and payable
accounts immediately. Moreover, the company is obliged
to report the result to the General Assembly and should
reflect financial effects in accounts, provided that sixmonth financial statements of the company should be
spelled out clearly and transparently.
Paragraph 5 of the auditor’s report, considering the claim
of 485 billion rials from National Tax Administration as a
result of additional payment of value added tax (VAT),
stipulates that the abovementioned tax validity has been
obtained before termination of the current fiscal year with
safeguarding interest of the company. It was also
stipulated that the necessary written confirmation should
be received and the result should be reported to the
attention of Annual General Assembly.
Measures Conducted
A major part of written confirmation of
auditing should be conducted with regard to
the receivable accounts and documents as well
as other payable accounts and documents.
Finally, amended letter should be received
from auditor.
Claims of the company from National Tax
Administration stated as of late 2010 and
consequently, necessary measures were taken
with regard to collecting these claims as of
mid 2011. Since this company has requested
refunding of surplus payable funds during
sending value added tax return, the mentioned
organization has embarked on studying and
investigating into all tax periods from the
beginning of implementation of this law. In
this line, refunding the amount of 41.7 billion
rials in April 2013 has been approved by the
National Tax Administration with regard to
the tax periods in spring, summer and autumn
2010. In the same direction, refunding the
amount of 50.5 billion rials has been
actualized with regard to the tax periods in
spring and summer 2012, so that 23 billion
rials of which has been deposited into the
account of the company in March 2013 and
the rest amount i.e. 27.5 billion rials will be
deposited in the very near future. Other tax
periods includes two periods in 2008, four
periods in 2009, one period in 2010 and four
periods in 2011 (totally 11 tax periods). It
Sepahan Oil Company
No.
3
No. of
Paragraph
A- 3
Considering the significance of subject of the General
Assembly, Paragraph 7 of report of auditor postponed
determination of final decision with regard to the subject
to receiving report of legal inspector and auditor of
Speedy Ship Company and it was stipulated that report of
legal inspector and auditor of Speedy Ship Company
should be submitted to the General Assembly by the end
of Spt.
Also, considering the claims from Petro Golf Company
(subject of Paragraph 4 of auditor of the company in the
fiscal year in 2011) AND GIVEN THE DEMANDS OF
Speedy Ship Company from National Iranian Oil
Company (NIOC), NIKOO Company and ATTK
Company with regard to the mission delegated on buying
and selling and transporting (subject of Paragraph 2 – 3
of report of auditor in 2011), it was stipulated that
follows up should be put atop agenda of Board of
Directors continually, results of which should be
informed to the attention of the General Assembly in a
three-month period.
Measures Conducted
should be note that the total tax periods are
under investigation in the court of first
instance, so that tax periods in autumn and
winter in 2012 and also tax periods in spring
and summer 2013 are under investigation in
Isfahan Province National Tax
Administration.
Preventive steps have thus far been taken with
regard to following up of receiving claims
from the Oil Ministry and NIKOO Company.
In this line, a letter was sent to the respected
Oil Minister in July 2015. In all parts of letter,
Mr. Mohammadzadeh senior advisor to the
minister addressed Eng. Nikzad Director
General of Ministerial Bureau that all
statements of Sepahan Oil Company are
authentic and accurate. In his response, Eng.
Nikzad addressed Eng. Vahid to take effective
steps in setting up a coordinating council in
the presence of Eng. Qaleh Bani and Eng.
Vahid and Eng. Mohammadzadeh and the
respected Oil Minister for settling the issue.
Despite repeated follows up, the session did
not organize. Meanwhile, in another letter on
Sept. 22, 2013 and also on August 14, 2013
addressed to the respected management of the
National Iranian Oil Company (NIOC), the
attached demanding cases of Sepahan Oil
Company have been stated separately and
orders have been issued with regard to paying
claims of the company in the shortest time
possible.
Following a letter addressed to Dr. MirKazemi former oil minister and member of
Majlis Energy Commission, the cases were
reflected exactly and it was requested to take
effective steps in order to collect the claims.
Regarding demands of Golden Crown and
ATTK companies, two joint sessions have
thus far been held in the presence of these
companies and documents of their sent cost
amounting to 31 million dirham has been
refunded and returned to the company. Given
Sepahan Oil Company
No.
4
No. of
Paragraph
A- 4
Considering the tolerating loss amounting to 29.5 million
dirham to the company as a result of agreement of two
vessels with Speedy Ship Company along with four
vessels belonging to the subsidiary ISOC company,
Paragraph 8 of auditor report stipulates that the company
should submit a written report which include the
following cases:
- Has mutual contact or its extension been taken after
based on transactions bylaw? Have provisions of the
company’s transactions bylaw been observed in this
respect?
- Is the abovementioned contract approved by the Board
of Directors?
- What is the main reason behind lack of submitting
performance of each vessel and opening separate control
account for each vessel and auditing their performance?
How is the strategy of the company in order to control
and monitor these cases?
- What is the main reason behind lack of depositing the
income obtained from operation of vessels and its barter
with the costs that led to incurring the abovementioned
loss. It was decided that relevant documents should be
provided and also should be provided to the legal
inspector of the company.
- considering the significance of the subject, which is
mentioned repeatedly in this minute,, the Assembly
emphasizes on following up the subject by the Board of
Directors of the company as long as suitable result is
provided.
Measures Conducted
the issue that subject of documents has been
presented with enough supporting documents
and since registration of accounting has been
conducted, therefore, the abovementioned
amount has reduced to four million dirham.
This case is also related to the demands of
Sepahan Oil Company from the National
Iranian Oil Company (NIOC) which their
collecting have been requested from the
National Iranian Oil Company in the abovementioned letters. Other measures are at the
agenda of the company in line with settling
the subject.
Considering the Paragraph 8 of the auditor
report, loss amounting to 29.5 million dirham
is related to the vessels “Betelgeuse and
Spica” (related to SPD Company) and vessel
“White fang Georgia”, related to ISOC
Company, in 2012. The mutual contract
between Royal Oyster Company was first
concluded on June 7, 2010 between ISOC
company (on four vessels) and the recently
mentioned company. According to Rider in
the mentioned contract, moreover ISOC
Company, “SPD Ship Company” was
introduced as contract party to Royal Oyster
Company. According to the provisions of
contract, regular accounting services and
disciplined sending of reports and experiences
and all costs spent by Royal Oyster Company
have been fully observed. With regard to
opening separate control account for each
vessel, profit belonging to them has not been
observed by the mentioned company.
Therefore, payable funds as a result of costs
and received funds as a result of incomes have
been bartered with each other. Also,
presenting financial estimation has been made
with regard to the budget of performance of
each vessel. Meanwhile, it should be noted
that auditing performance of 12 vessels at the
venue of registration of the company in
United Arab Emirates have been investigated
Sepahan Oil Company
No.
No. of
Paragraph
Measures Conducted
and studied by Aljeroudy Accounting and
Auditory and a copy of the auditing report of
the company has been received.
5
6
A- 5
A- 6
According to Paragraph 9 of report of auditor, it was
stipulated that the Board of Directors of the company
should take necessary measures latest by the end of
September 2015 with regard to creation of infrastructures
of human resources and data systems. Accounting and
management units, domestic auditing and also
comprehensive management of sales to reduce
operational risk. In addition, the Board of Directors of the
company was tasked with improving rotating cycle of
information and observing necessities of Stock Exchange
and finally, the Board of Directors should report the
results to the attention of the General Assembly.
According to the Paragraph 11 of auditor report, the
Assembly emphasizes that assignments envisioned in the
Annual Ordinary General Assembly dated July 12, 2012
failed to produce positive results, details of which were
put atop agenda again. In the same direction, the auditor
was tasked with providing a comprehensive and compiled
report by the end of Dec., report of which should be
submitted to the Assembly. Hereunder are regarded as the
list of cases emphasized by the Assembly according to
the report of auditor:
1- Collecting dormant, stagnant and yearly demands,
2-Collecting demands and claims from the National
Iranian Oil Company and NIKOO Company.
3-Receiving necessary guarantee from shareholders of
companies set up and established in overseas.
4-Pricing and valuating a vessel with ISOC Company at
the time of purchasing
5- Presenting three-month report to main shareholder
with relation to the complaint of others lodged against the
company and/or vice versa,
6- Presenting three- month performance of company in
comparison with the budget
7- Receiving title deeds of ownership of factory’s land
areas,
8-Presenting report on feasibility studies and executive
situation of White Oil which has not thus far been
finalized.
These affairs are under investigating with
setting up management – accounting units and
also domestic auditing.
1- Collecting dormant / stagnant yearly claims
is underway and this affair is following up
through legal affairs continuously.
2- It is underway.
3- Necessary guarantee letters or bid bonds
from shareholders of the companies set up in
overseas has been conducted inside the
country in Notary Public Office.
4-Following request from National Iranian
Tanker Company (NITC), it was requested
that pricinga vessel should be done at the time
of purchasing. In response to the said
question, it was said that this act is impossible
technically. (pricing in purchase day)
With due observance to the said issue, pricing
vessel has been conducted in March 2012 and
if required, pricing and evaluating vessel is
also possible at the present situation.
5- Pricing in underway.
6- To date, reports on performance of the
company have been presented in a three-, sixand nine-month periods and yearend report is
presented in appropriate date.
7- Attorney of the company and Legal
Department are after following up to transfer
title deeds of land area of the factory as well
as registration of title deeds in name of
Sepahan Oil Company
No.
No. of
Paragraph
7
A- 7
8
B- 9
Paragraph 23 of the report on other legal responsibilities
of auditor, in line with implementation of law to promote
Administrative Health and Article 33 of Executive Bylaw
of Campaign against Money Laundering, the General
Assembly stipulated that necessary condition should be
provided by the Board of Directors in line with observing
provisions of the mentioned law and executive bylaws
and instructions, so that necessary background should be
provided in the field of full controlling of the cases of the
mentioned law for independent auditor and legal
inspector of the company.
With regard to purchasing an apartment unit from
Universal Company, it was envisioned that the Board of
Directors should submit a comprehensive report to the
General Assembly on final determination of its
ownership by the end of Sept.
9
B- 10
- Any kind of development plan for increasing production
capacity, investment and setting up news companies
should be submitted to the Holding Company within the
framework of strategic program and comprehensive plan
of the company after being approved by the Board of
Directors for final approval.
10
C) 1
The Board of Directors was committed to embark on
presenting periodical reports and information as follows:
-Three- and 9-month financial statements along with
reporting details
-6-month performance which is audited.
- Reporting adaptation of budget and 3-, 6- and 9- month
performance annually along with report of activity of
Board of Directors
- Minute of Board of Directors monthly
- Report of measures with regard to the assignments of
the Assembly: for a period of three months
Measures Conducted
Sepahan Oil Company.
8-It is underway and recently, it is approved
after continuous follows up and after months
of implementation of project. Therefore,
ratified bill has not thus far been notified.
Effective steps should be provided with regard
to introducing representative to the Financial
Affairs Department of ministry of Economic
Affairs and Finance (MEAF). Also, training
pamphlets have been compiled and formulated
based on Article 33 of Executive instruction
of Campaign against Money Laundering.
Meanwhile, the sales bylaw was corrected
based on the abovementioned instruction.
Universal Company claims that all demands
of Sepahan Company have been liquidated
and settled, amounting to 300,000,000 dirham
pursuant to the minute on Jan. 2,
2013.Therefore, the said issue is not approved
by Sepahan Oil Company. Given the above
issue, negotiations and correspondences with
Universal Company are underway with the
aim of settling the problem.
- necessary measures have been taken in this
respect and from now onward, if new
companies are established, it should be
submitted to the Holding Company, details of
which should be approved by the Board of
Directors.
- It is underway.
- 3-, 6- and 9- month financial statements have
been provided and sent and report of auditor
has been provided with regard to 6- month
financial statements.
- To date, in 3-, 6- and 9-month time intervals,
reports related to the activity and performance
of the company have been presented and
yearend report will also be submitted at the
end of reported fiscal year period in due date.
- Effective measures have been taken in this
regard.
Sepahan Oil Company
No.
11
12
No. of
Paragraph
C) 2
C) 3
- Report of measures conducted with regard to the letter
of management: for a period of 6 months
- Reporting rials-based and physical progress of current
project and (if necessary): for a period of three months
- Letter of management in 2012 (August 6, 2013)
Establishing synergy and cooperation in affiliated
companies and avoiding inappropriate competitive
environment, it was stipulated that interest of the
company should be observed strictly as much as possible.
In the same direction, it was stipulated that available
capacities and potentials of company should be used in
group companies especially in the field of limited tender
such as the following subsidiary companies:
-Saba Kish Oil Company (FAVA) in the fields of
information technology (IT) and ICT,
- Oil Industry Pension Funds Insurance Brokerage
Company in the field of consultation to receive insurance
services,
- Saba Veteran Commercial Company in the field of
import, export of authorized commercial products
- Saba Naft Financial and Commercial Services
Development Company in the field of foreign currency
exchange services,
- Saba Naft Logistics and Services Company and Saba
Naft Construction and Engineering Company in the field
of supplying manpower and engineering services
- Stock Brokerage Company in the field of transactions of
stocks at TSE, Farabourse (Over the Counter), Iran
Mercantile Company and Energy Stock Market
The Board of Directors was obliged to provide and
implement necessary steps for observing law on
campaign against money laundering and relevant criteria
as well as rules and regulations on anti- corruption law as
well as enhancing and boosting administrative health.
Measures Conducted
- It is underway.
- It has been performed.
Necessary measures will be conducted
according to the field of activity observing
interest of the company.
Effective steps were taken on introducing
representative to the Information Data Unit of
the Ministry of Economic Affairs and Finance
(MEAF). Also, training pamphlets have been
compiled and formulated based on Article 33
of executive bylaw of Anti-money Laundering
Law.
Meanwhile, the sales bylaw was corrected
based on the abovementioned instruction.
8th Chapter
Sepahan Oil Company
Other Subjects and Miscellaneous
8 – 1 – Proposal of the Board of Directors for dividing profit,
8 – 2 – Information related to Sepahan Oil Company’s development projects,
8 – 3 – Upcoming programs of the company,
8 – 4 –More information on Sepahan Oil Company (Contract Us),
8 – 1 – Proposal of the Board of Directors for dividing profit,
Sepahan Oil Company
Given the profitability of the company, the Board of Directors of Sepahan Oil Company proposed dividing 50%
of net profit in the reported fiscal year period.
8 – 2 – Information related to Sepahan Oil Company’s development projects,
There was not any new development plan in Sepahan Oil Company in 2013. Therefore, technical and economic
feasibility studies of the projects such as PDA plan, plan for production of grease and also construction of
Group 2 oil Refinery in Bandar Abbas, etc. were put atop agenda. It should be noted that projects’ financial
effects have been reported in Note No.s 12 and 12 – 1 along with upcoming financial information for the fiscal
year closing on March 11, 2015.
8 – 3 – Upcoming and Future Programs of the Company,
Sepahan Oil Company
Field
Financial
Human
Resources and
Systems
Engineering
Commercial
and Business
1.
2.
3.
4.
1.
Important Activity
Creating transparency in financial reports and statements
Dissemination of information on reports of Stock Exchange Market in due date
Receiving facilities from banks
Setting up a unit to deal with Stocks Affairs
Revising and reviewing organizational chart
Commissioning and launching proposals’ system
Deploying and launching comprehensive human resources system
Commissioning appraisal and assessment club
Launching programs to balance work and life
Revising strategies
Compiling and monitoring strategic programs
Launching data security management standard with the aim of increasing security
coefficient and standardizing infrastructures and substructures,
9. Safeguarding and preserving quality management systems based on ISO 9001 :
2008 standards, ISO 16949: 2009 standard / TS, ISO 29001: 2010 standards/TS,
ISO 18001: 2007 Occupational Health and Safety Assurance System (OHSAS)
standard, ISO 14001: 2004 environmental standard and also monitoring and
controlling accurate implementation of the mentioned systems through local and
foreign auditing measures
10. Continuation of revising measures and streamlining and updating executive
methods, instructions, and current bylaws remained in the Organization
1. Construction of sanitary and industrial wastewater treatment plant
2. Construction of grease production unit
3. Designing and providing parts and equipment for implementation of 4 thfiltration
stage
4. Implementation of capacity measurement project for Sepahan Oil Refinery
5. Implementation of initial and preliminary measures for substitution of 2 nd stage
filters in repair and maintenance services of 1st stage
6. Following up necessary measures for the construction operation of PDA Unit
7. Conducting feasibility studies and construction project in Bandar Abbas in the
field of production of oils and lubricants Group II and III
8. Corresponding and establishing relationship with prestigious international
companies owning technical know- how and expertise
9. Supervising and monitoring performance of operations units consecutively in line
with increasing productivity
10. Supervising and monitoring management and optimization of conservation of
energy in operational units
1. Activating branch office of the company in United Arab Emirates (UAE)
2. Taking maximum advantage of sea transport flee
3. Purchasing barge equipped with hater for exporting extract
4. Fulfilling periodical repair and maintenance services special of two vessels and
taking necessary measures on 3rd vessel
5. Promotion of exports to new target markets
2.
3.
4.
5.
6.
7.
8.
Sepahan Oil Company
Field
6.
7.
8.
9.
10.
11.
1.
2.
Sales and
Marketing
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
1.
2.
3.
Planning and
Budget
4.
5.
6.
7.
8.
9.
10.
Important Activity
Receiving necessary written confirmations for final oil from reliable centers
Fulfilling publicity and advertisement in target countries
Implementation of agreement for the construction of some additives in Iran
Removal of agents and intermediates for the production of additives
Providing and supplying “lube cut” from other refineries
Minimizing demurrage costs at customs offices
Conducting feasibility studies on setting up sales engineering and marketing
offices in province
Improving sales progress to agencies and agents (studying their performance,
studying advertising gifts, accelerating service process to agents, setting up
seminars and conferences, etc.)
Conducting feasibility studies on market research
Compiling and formulating processes of attaining predefined sales objectives in
2014
Improving organizational chart
Studying sales personnel’s proposals
Developing and promoting sales of malt grade oils
Entering parent and holding industries (cement, steel, etc.)
Conducting feasibility studies for creating new products
Increasing market share of industrial products in the country
Organizing specialized industries’ seminars and conferences
Safeguarding market share of company and increasing share of car and industrial
market in the country and getting lion’s share of domestic market in related field
Measuring capacity of the refinery
Determination of order point of additives
Correcting and revising oil refining production and containerizing program
according to the 2014 Budget Act
Extracting base oil production program based on 2014 Budget Act
Day- count Dashboard of feedstock
Following up necessary measures for implementing barcode system, for
containerized products (carton)
Focusing on cleaning criteria of workplace (s5) at storages
Defining project for covering selvage storage due to the crisis in shortage of
warehousing space in refinery
Increasing loading arms due to the increasing of loading as compared to the
previous years
Following up necessary measures for installing balance and barcode ready devices
in wax and extract filling containers
Sepahan Oil Company
8 – 4 – More information on Sepahan Oil Company, Contract Us
For more details, interested individuals are cordially requested to contact the following address:
Sepahan Oil Company’s Central Office Add.:
No. 92, Corner of 28th Alley, Khaled Eslamboli (Vozara) St., Tehran
Sepahan Oil Refinery’s Address:
Km 6 of Tehran Road, Isfahan
P.O. Box: 15119 – 15513
Tel: 021 – 8347
Fax: 021 – 88783918
Website Address: www.sepahanoil.ir
E-mail Address: [email protected]
Stocks Affairs Unit Tel: 021 – 8347 (Extension: 618)
SEPAHAN OIL COMPANY (P.J.S)
Report on Activity and General Situation of Company
For Fiscal Year Closing on March 20, 2014
Last Remarks
Sepahan Oil Company
While expressing special thanks to the unflinching cooperation and collaboration of respected shareholders of
the company and their constructive viewpoints in materialization of most objectives of the company, the Board
of Directors of Sepahan Oil Company request stockholders of the company to approve financial statements of
the company. In addition, the Board of Directors request them [shareholders] to take effective steps in order to
select legal inspectors of the company for 1393 (ended March 20, 2015) and also determine their fee.
The esteemed shareholders of the company are requested to take necessary measures in order to determine a
widely circulated paper for publishing upcoming advertisements of the company.
It is hoped that the Board of Directors of Sepahan Oil Company will attain its predefined objectives relying
upon the assistance of the Almighty God, cooperation and collaboration of respected shareholders of the
company and unflinching effort of industrious staff and personnel. Generally speaking, it is hoped that Sepahan
Oil Company will take giant strides towards growth, progress, development and prosperity in every field.
The company owns its success to its wise management, industrious staff and personnel.
In the end, the Board of Directors of the Company intends to express its special thanks to all individuals who
took effective steps in line with materialization of most objectives of the company.
With Regards,
True translation certified.
Sepahan Oil Company
8th Chapter:
Measures Related to Assignments of the General Assembly in Previous Year
8 – 1 – Measures Conducted Related to Assignments of General Assembly
The assignments of the General Assembly of Shareholders on July 12, 2012 and also moves taken on the mentioned
assignments are as follows:
1
No. of
Paragraph
1
2
2
No.
Subject of Assignments
Measures Conducted
Based on Paragraph 4 of report of
respected legal inspector and
auditor, it is assigned that
necessary measures have been
taken for receiving the amounts of
309 billion rials yearly
adjustments and 54.1 million
dirham as claims from Petro Golf
Company. While receiving
uncollected written confirmations,
it is cordially requested to take
effective steps in order to settle
contradictions of mutual accounts.
Necessary follows up were taken in 1391 (ended March
20, 2013) with relation to receiving stagnant yearly
demands and totally the amount of 34 billion rials of
these demands has been received up to the present time.
With regard to Petro Golf Company, totally the amount
of 102 billion rials equal to 13,594,694 dirham
(according to day-price of foreign currency in the date of
settling funds) was received in 1391 (ended March 20,
2013) and presently, the remaining demand stands at
40.6 million dirham (UAE). In the same direction, legal
measures have been taken in judicial bodies of the
United Arab Emirates (UAE) and written verdict has
sentenced signatories of the check to three years in
prison. International Police dubbed “Interpol” has been
requested by lawyer and legal petition against head of
company and also other partners of the company is
underway. Considering the written confirmation,
effective steps have been taken with the aim of removal
of contradictions.
With regard to the briefing plan of investment in Kenya,
financial statements from 2009 to 2012 have been
received, details of which have been submitted to legal
inspector and auditor of the company. Considering the
stoppage of operations and executive activities of
“ELSE Oil” and “UNISEP” companies, necessary steps
were taken in order to dissolving them, based on which,
“UNISEP” Company was dissolved and equivalent
investment amount was refunded as well. With relation
to “ELSE Oil” Company, financial statements audited
in 2012 have been received which indicates investment
of Sepahan Oil Company amounting to 490,000 dollars.
It should be noted that balance of bank account confirms
Based on Paragraph 5 – 1 of legal
inspector and auditor, it was
stipulated, while presenting the
briefing plan of investment in
SEPYANA Company, to specify
situation of accounts of company
and its financial statements.
Moreover, it is cordially requested
to take effective steps with regard
to continuation of activity of
“ELSE OIL” and “UNISEP”
companies after provision of their
financial statements in cooperation
Sepahan Oil Company
No.
3
4
No. of
Paragraph
3–1-
3–2-
and consultation with shareholders
and interest of the Group.
Based on Paragraph 5 – 2 of report
submitted by legal inspector and
auditor, it was stipulated:
- The company should receive
necessary guarantees and bid
bonds from shareholders of the
companies set up in overseas
(Speedy Ship, IST and PEDU
companies) using legal advisors.
After hearing the report of the
Board of Directors of the company
concerning mission of the Oil
Ministry, the General Assembly
obliged and mandated Sepahan Oil
Company to take effective steps
for receiving demands of Speedy
Ship Company, Nikoo Company,
Golden Crown Company and
ATTK Company with regard to
importing oil products in specific
situation of the country. Given the
above issue, the Assembly
mandated the Sepahan Oil
Company to follow up necessary
measures on receiving eight
vessels, purchasing and selling
relevant byproducts seriously.
Sepahan Oil Company was
mandated by the General
Assembly to submit pertinent
report to the attention of
shareholders once every two week.
Meanwhile, Sepahan Oil Company
was committed to submit report
the main reasons of creating
deposit- free claims from Golden
Crown and ATTK companies.
Measures Conducted
this amount as well.
Necessary guarantees and bid bonds have been received
from shareholders of the mentioned companies inside
the country. If such move is conducted outside the
country, it contradicts with the objective of
establishment of companies. (not disclosing their
relationship with Sepahan Oil Company in relevant
countries)
Necessary follows up have thus far been taken with
regard to receiving claims from the Oil Ministry and
Nikoo Company. For this purpose, a letter was sent to
the respected oil ministry in July 2015. In response to
the sent letter, Mr. Mohammadzadeh senior advisor to
the oil minister addressed Eng. Nikzad, director general
of the ministerial bureau, that all statements raised by
Sepahan Oil Company were correct and valid. Given the
above issue, Eng. Nikzad addressed Eng. Vahid to take
effective steps in order to set up a coordinating session
with the participation of Eng. QalehBani and Eng. Vahid
and also Eng. Mohammadzadeh and respected oil
minister for settling the case. Despite measures taken in
this regard, this session has not thus far been organized.
Meanwhile, in another letter sent to the respected
managing director of National Iranian Oil Company
(NIOC) on Nov. 11, 2012, claims of Sepahan Oil
Company were reflected separately wit details and
attached calculations. The company urged the senior
official of the National Iranian Company to issue order
with regard to pay demands of the company.
Re letter addressed to the former Oil Minister and also
Majlis Energy commission member Dr. Mir-Kazemi, all
the aforementioned cases were reflected. Sepahan Oil
Company requested senior official of the ministry to
take effective steps in this regard and issue order for
receiving demands of the company. Two joint sessions
have thus far been held with relation to the demands of
Sepahan Oil Company
No.
5
No. of
Paragraph
3–3–
3–4-
6
3–5-
It was stipulated that Sepahan Oil
Company should take necessary
measures to carry out costs spent
for activity o companies in
overseas such as IST and PEDU in
the form of percentage of obtained
income.
With prioritizing its main
activities, it was obliged that the
company should take effective
step with regard to its justified
investment outside the country in
order to increase capital and
wealth of shareholders. Also,
Sepahan Oil Company should take
effective step to submit justified
investment plan in PEDU and IST
companies to shareholders.
While submitting investment
briefing plan in ISOC company,
the General Assembly emphasized
to take necessary step for the
evaluation of four vessels as
provided to this company. In
general, the General Assembly
stipulated that four vessels should
be evaluated properly in order to
provide capability of comparing
with final cost of purchase in
initial collection date and also
balance sheet date for the decision
Measures Conducted
Sepahan Oil Company from Golden Crown Company
and Attack Company. Transport cost of their documents
amounting to 31 million dirham (UAE) has been
refunded. If these documents are presented with enough
supporting documents, the case will belong to the
demands of Sepahan Oil Company from National
Iranian Oil Company (NIOC). In the abovementioned
letter, NIOC has been requested to pay the claims related
to Sepahan Oil Company. Complete report of this issue
has been submitted by the Board of Directors to the
Ordinary General Assembly meeting held in
extraordinary form.
Necessary measures have been taken for transferring IST
Company to Rahbaran-e Javan Arman Holding
Company.
PEDU Company is tantamount to the Central Official of
Sepahan Oil Company in Malaysia. In other words,
PEDU Company acts similar to Sepahan Oil Company
in Malaysia and this company was dissolved in 1391
(ended March 20, 2013). In addition to receiving
demands and funds obtained from selling oil, balance of
accounts of this company was transferred to the profit
and loss account of the company, so that company’s
performance report has been disclosed and explained in
the attached notes of financial statements.
These vessels were evaluated in March 2013 and reports
related to the legal inspector, auditor and main
shareholder of the company have been presented in the
same date.
Sepahan Oil Company
No.
No. of
Paragraph
7
4
8
5
9
6
10
7
of shareholder.
auditor, it was stipulated that
necessary follows up were
conducted with regard to the
protest lodged against tax
assessment from 2006 to 2009.
auditor, it was stipulated that the
Board of Directors has followed
up situation of probable debts as a
result of complaints of others
against the company based on
Briefing Note 32 – 2. It should be
noted that any actual verdict on the
said issue has not thus far been
issued. As long as the issue has not
been settled, the Board of
Directors is duty bound to submit
relevant report to the attention of
shareholder once every three
months.
auditor, the Board of Directors
was obliged, while revising
balance of materials and goods and
capital- oriented goods, to take
necessary and optimal planning in
order to use or sell the mentioned
items. In general, the Board of
Directors was mandated to submit
financial statements, subject of
Briefing Note 7 and 10.
Measures Conducted
In this respect, a protest bill has been submitted to the
Higher Council of Tax and the mentioned Council did
not accept the request of company. Consequently,
protest of the company has read in the council of Article
251 of Direct Taxation Act. It should be noted that
protest of the company in the mentioned council was
turned down.
It should be noted that measures have been reported in
financial statements of the fiscal year according to Note
30 -2.
Concerning balance of materials and goods, value of
balance of these stocks which has been comprised of raw
materials (lube cut amount to 38,000 tons) and
manufactured product and during production of base oil,
please be informed that balance of lube cut as feedstock
is sufficed for 20 days and such storage seems
necessary. It should be noted that manufactured products
are managed and controlled due to the market situation
and supply and demand rate.
With regard to capital- oriented items, Operation,
Technical and Engineering Unit of the company studied
the case meticulously. Since these materials have been
purchased from manufacturing companies with fair and
reasonable price in previous years, preserving them was
emphasized in a minute. If needed, provision of them at
the current situation will be a very difficult task. It
should be noted that mentioned minute has been
submitted to legal inspector and auditor of the company.
According to the request of investment company, it
Sepahan Oil Company
No.
No. of
Paragraph
auditor, the Board of Directors,
while receiving guarantees and bid
bonds on managing two vessels
belonging to Speedy Ship
Company and also four vessels
belonging to ISOC Company, was
obliged to supervise and monitor
affairs using expert advisors and
also observe provisions of mutual
contract concluded between Royal
Oyster Company. In general, the
Board of Directors was obliged to
provide and present budget of
performance of each vessel, open
separate account for performance
of each vessel and also audit
performance of each vessel in
order to prevent imposition of
additional costs.
Measures Conducted
should be noted that management and guidance of
vessels is on the verge of being delegated to the
company desired by Rahbaran Holding Company.
The Bill ratified and approved by the Board of Directors
on Jan. 30, 2012 has not been observed with regard to
the substitution of a newly- established company inside
the company and/or one of existing companies with
Royal Oyster Company for managing and guiding
activities of vessels.
Meanwhile, Royal Oyster Company has not observed
criteria envisioned in Paragraph 7 – 1 and 7 – 2 of the
mutual contract with regard to the income obtained from
performance of vessels despite repeated follows up.
Despite necessary follows up made in this regard, Royal
Oyster Company has not observed criteria envisioned in
Paragraph 7 – 1 and 7 – 2 of the mutual contract
concluded in this respect.
Not only Royal Oyster Company has not observed the
criteria as mentioned in Paragraph 7 – 1 and 7 – 2, but
also it has spent the obtained income for administration
of vessels directly.
11
12
8
9
necessity of partnership in wave
breaker of FARASAKOO
Company should be specified
transparently in accounts in line
with subject of activity of articles
of association.
In other words, the necessity of
participating in Wave Breaker
project of FARASAKOO
Company was requested to be
specified in accounts in line with
subject of activity of articles of
association.
The contract has been concluded with the mentioned
subject, so that relevant accounts have been specified
transparently. In general, whole operations have been
transferred to FARASAKOO Assaluyeh Company.
Considering the capability of fulfilling and observing
Sepahan Oil Company
No.
No. of
Paragraph
10
13
14
11
Measures Conducted
assignments of the Ordinary
General Assembly, held on June
14, 2011, which has not been
finalized, should be followed up
based on interest of the company
and its result should be announced
to the shareholder. It should be
noted that transactions envisioned
in Briefing Note 35 were
confirmed as transactions subject
to Article 129 of amendment of
Trade Law without interference of
representative of beneficiary
shareholder.
Possibly, effective steps should be
taken to pay fund of insurance in
cooperation and consultation with
Insurance Brokerage Company of
Oil Industry Pension Funds. In
other words, any payment in the
field of insurance should be
approved and confirmed by
Insurance Brokerage Company
affiliated to Oil Industry Pension
Fund.
It was agreed that the Board of
Directors should submit
performance report of the
company to shareholders once
every three months.
interest of the company, the measures conducted in this
regard were executed according to the Briefing Note 33
of financial statements in 1390 (ended March 20, 2013).
it should be noted that some of these measures are
following up.
Necessary steps should be taken in this regard, observing
interest of the company.
It is underway.
Sepahan Oil Company
9th Chapter:
Activities of Sepahan Oil Company in the field of Indigenization
Activities of Sepahan Oil Company in Line with Indigenization / Localization
designing, monitoring and supervising construction operation, installing and commissioning auxiliary Recovery
system for Waxing Unit (M. P. Tower, heat exchangers, converters, and relevant pumps)
Designing, manufacturing, installing and commissioning two 1,000- square feet filters (Vacuum Rotary Filter)
which have been conducted in cooperation with industrialists and engineers of the workshops based in city of the
province. Increasing feedstock and reducing oil in wax are salient achievements of the mentioned project.
Designing and manufacturing lube cut discharge system for discharging lube cut as purchased from other refineries.
Designing, pipe laying and installing five pumps in order to increase applicability of 10- category tanks in
Processing Unit
With due observance to the environmental necessities, following up and preparing proposal of project for submitting
to consultants in order to settlement of wastewater of Sepahan Oil Refinery and separating it from Isfahan Refinery
Implementing project for optimizing and strengthening Cooling Unit (C) for reducing temperature of cooling water
in refinery system
Increasing multiple applicability of four 14- category tanks of the refinery with the aim of storing more wax and
extract in emergency periods
Designing and implementing projects of ARYA Solar Company in order to empowering the unit to a final oil
manufacturing company and required packaging
Fulfilling basic repair and maintenance services as well as implementation of projects simultaneously in May and
June 2012
Sepahan Oil Company
10th Chapter:
Activities of Company in the Field of Quality Management Standard
-
Activities in the Field of Quality Management Standard
Receiving and extending ISO 9001 standard since 2003
Obtaining and extending ISO 14001 standard since 2003
Receiving and extending ISO 18001 (OHSAS, Occupational Health and Safety Assurance System)
standard since 2003
Receiving and extending ISO / TS 16949 standard since 2010
Obtaining and extending ISO / TS 29001 standard since 2009
Developing the mentioned standards to the Headquarters Offices in Tehran in 2013
Developing ISO 9001 standard to the affiliated companies in 2013
Obtaining and extending ISO 17025 standard as of 2004 and making plan for renewing it in 2013
Obtaining and extending energy management system’s certificate based on ISO 16001 standard in 2013
Obtaining and extending certificate of European Foundation for Quality Management (EFQM) in 2011 and
making plan to receive appreciation letter in 2013
Establishing Cleaning System (S5) as of 2012 and development and expansion of the system in 2013
Streamlining strategies compiled with Balanced Scorecard (BSC) model in two FS & BS levels in 2013
Sepahan Oil Company
11th Chapter:
Other Subjects and Miscellaneous
11- Management measures affecting future performance and activity of company
11 – 2 – Domestic and Foreign Claims and Complaints Lodged against Company
11 – 3 – Services received from Certified Public Accounts (CPA) in 2012
11 – 4 – Public Relations
Sepahan Oil Company
11 – 1 – Management Measures Affecting Future Performance of Company
Hereunder are regarded as the most important measures conducted in 2012 which will have considerable effects on
future yearly performance of the company:
Field
Financial
Production
1.
2.
3.
1.
2.
1.
Human Resources
2.
1.
Sales and Marketing
Research and Development
Others
2.
3.
1.
1.
2.
3.
4.
5.
Highlight of Activity
Taking advantage of resources of financial institutes and banks
Creating financial transparency
Setting up internal auditing
Increasing production (production growth)
Regulating types of feedstock for taking maximum advantage in
proportion to the existing refinery unit
Creating motivational systems for effective presence in implementation
of duties
Upgrading and improving pyramid of manpower
Removing some parts of fake intermediates and approaching final
wholesalers
Setting up monopolized service centers
Optimal management of distribution network
Setting up research and development (R&D) unit for creating integrity
in this field
Commissioning new filters
Upgrading and improving transport fleet
Setting up Plan and Budget Unit
Commissioning company’s unit in Kenya
Optimizing situation of affiliated companies (dissolving or establishing)
11 – 2 – Domestic and Foreign Complaints Lodged against Company
No.
Name
1
Complains and claims
lodged by Messrs PourAmin and ILIA Sanat
Sepehr Company and
Parham Sanat Alborz
Company (It should be
mentioned that the two
mentioned companies
belong to Mr. PourAmin.) against the
company
Subject
A) Necessity to pay fund as a
result of discounts, B) Necessity
to pay compensation as a result
of annulment of drafts, C)
Cancelling or annulling actual
title deeds No. 15874 located in
Karaj, D) Temporary order for
prohibition of transfer of title
deeds of the property ad
demanded by seller
File
Underway in
Latest Situation
Karaj Legal
Court, Branch
No. 5 (PourAmin) and
Tehran Legal
Court Branch
No. 29
(pertinent
companies)
Concerning the mentioned
companies, the verdict for
convicting the company
on the delivery of the
goods, subject of drafts,
has been issued and
lawyer of the case has
requested “appeal” in due
date. Concerning the
claims lodged by Mr.
Pour-Amin against the
company, major part of
his demand in name of
Sepahan Oil Company
No.
Name
2
Complaints and claims
lodged by Namasazeh
Company against
Sepahan Oil Company
(legal petition)
3
4
Subject
File
Underway in
Demanding 1,924,644,374 rials
as bid bond guarantee and
incurred damages
Legal Court,
Branch No. 14
Claims and complaints
lodged by Sepahan Oil
Company against Petro
Golf Company based in
UAE
Demanding approx. 50 million
dirham
File is
underway in
Judicial bodies
in the United
Arab Emirates
(UAE)
Claim of the company
lodged against Dezendis
and mutual claim of
Dezendis against the
company
Demanding 83,785,406,250 rials
as outstanding and deferred
claims and also 20,005,922,358
rials as on- account funds as well
as 3,358,237,800 rials for
releasing Agatha Ship + mutual
claim of Dezendis lodged against
the company valued at
23,501,835 rials
Arbitration
Center of Iran
Chamber of
Commerce
Latest Situation
Sepahan Oil Company
and delivery of goods,
subject of drafts, has been
cancelled and abnegated.
The verdict of court of
first instance has been
issued against the
company and lawyer of
the petition has requested
it to be reconsidered.
The court of first instance
has condemned the
company to pay
8,511,248,056 rials.
Therefore, the issued
verdict has been requested
to be reconsidered.
Written Judgment
Signatories of the check
have been sentenced to
three years in prison and
file is requested by the
lawyer to be reported to
the Interpol for following
up the case meticulously.
In addition, lawsuit
lodged against acting and
also other partners of
Petrol Golf Company of
UA is under investigation.
The file was reported to
the financial and marine
expert and their
viewpoints were received.
Since their viewpoints
were found “baseless” and
“unfounded” and failed to
meet interest of the
company, lawyer of the
file set up a session in
Financial Department of
the company and studied
the case meticulously. In
Sepahan Oil Company
No.
Name
Subject
5
Claims and complaints
of Sepahan Oil
Company lodged against
Karachi Customs Office,
Pakistan
Returning or giving back 2,063
tons of base oil
6
Claim of Monjasa
Company lodged against
Sepahan Oil Company
Confiscation of Agatha Vessel
and releasing the amount of
1,540,000 rupee
File
Underway in
Karachi Court,
Pakistan
Latest Situation
general, lawyer of the case
provided a protest bill and
submitted it to the
Arbitration chamber with
adding viewpoints of the
private arbitrator (Ms.
Tabatabaei). The final
verdict will be issued by
the Arbitration Chamber.
Presently, there are files
on this case: 1- Sepahan
Oil Company, 2- Karachi
customs Office, 3- AlRahim Company and 4Alf International
Company. The only
verdict issued by the court
up to the present time is to
prevent the confiscated
properties from bidding at
the Customs Office. In
other words, the court has
prevented from bidding
the properties confiscated
at the Customs Office. It
should be noted that AlRahim Company has
proposed purchasing the
consignment and also
ceding all rights of the
company. Presently,
investigation is underway
concerning determination
of local lawyer to study
situation of the case.
With the proxy of Mitra &
Bose Company for
liberating and releasing
Agatha Vesse, which had
been confiscated by
Monjasa Company due to
selling fuel to Dezendis
Company on Lumbardia
Sepahan Oil Company
No.
7
8
Name
Claim and complaint
lodged by Paraffin
Producers’ Guild
Association (Heidar
Zolfaqari)against
Sepahan Oil Company
Claim and complaint
lodged by Paraffin
Producers’ Guild
Association (Heidar
Zolfaqari) against
Sepahan Oil Company
on overcharging and
profiteering
Subject
File
Underway in
Demanding the amount of 20
billion rials as a result of
cancelling and revoking drafts
and lack of delivery of goods
Branch 39 of
Court of First
Instance and
Tehran Court
of Appeal
Payment of 16,528,078,423
tomans cash penalty in favor of
government and also the amount
of 8,264,039,211 tomans in favor
of the Association
Branch 29 of
Discretionary
Punishment
Organization
(Court of First
Instance) and
Branch 3 of
Court of
Appeal and
also Branch 2
of Supreme
Court
Latest Situation
Vessel, the amount of
1,540,000 rupee was
deposited. Consequently,
the power of attorney was
granted and delegated to
Neolegal Company and it
is expected that the
company will take back
its claim lodged against
Agatha Company and will
lodge its complaint
against Lumpardia
Company in return.
Meanwhile, defensive bill
of lawyer was recorded
and final verdict will be
issued by the court.
The court of first instance
issued verdict in favor of
the Sepahan Oil Company
and claim lodged by
plaintiff i.e. Paraffin
Producers’ Guild Union
was turned down and
plaintiff has requested
reconsideration of the case
in the Court of Appeal. It
should be noted that the
lawsuit is under
investigation at the Court
of Appeal.
The verdict of court of
first instance was issued
which convicted the
company. The issued
verdict was protested by
the company in due date.
Therefore, letter of protest
of the company was
rejected. The verdict was
reconsidered in the court
of appeal and finally, the
company i.e. Sepahan Oil
Sepahan Oil Company
No.
9
Name
Claim and complain of
Sepahan Oil Company
lodged against Heidar
Zolfaqari
Subject
Demanding funds of a Check No.
936149, amounting to
22,400,000,000 rials and also
Check No. 936126 amounting to
22,400,000,000 rials
File
Underway in
Branch No. 39
of Sadr Judicial
Complex
Latest Situation
Company was acquitted.
Then, Paraffin Producers’
Guild Association
protested on the issued
verdict again. Therefore,
the case was reconsidered
by the 2nd Supreme Audit
Court and for further
investigation; the case was
reported to Branch 29 of
the Court of first Instance.
At first, the court
determined 20 billion
tomans bond. Therefore,
the case is under
investigating by
Mollasadra Legal
Institute.
Concerning Check No.
936126, the court
convicted issuer of the
check i.e. Heidar
Zolfaqari to pay the
amount of check in favor
of Sepahan Oil Company.
The said verdict has been
approved and confirmed
at Branch 15 of the
provincial Court of
Appeal. Writ of execution
(enforcement) was issued
and notified immediately.
Losing party introduced
other shareholders of
Khavar Chimie Company
as “property”. Concerning
Check No. 936149,
issuance of writ of
execution (enforcement)
was requested and
securing of evidence has
been made from the
mentioned properties.
Sepahan Oil Company
11 – 3 – Services received from Certified Public Accounts (CPA) in 2012
Name of Company
Iran Mashhoud Management
Services and Auditing
Institute
Saman Pendar Auditing
Institute
Local auditor of National
Iranian Oil Company
(NIOC)
Services Presented
-Auditing financial statements in the first six months of
1391 (ended March 20, 2013)
-Auditing tax affairs in 1390 (ended March 20, 2012)
-Implicit auditing in 1391 (ended March 20, 2013)
Special auditing procedure on behalf of OPIC
Case auditing with relation to the discussion of oil
byproducts and issue of vessels
Date
In 1391 (ended March
20, 2013)
From Nov. to Jan.
2013
As case study
11 – 4 – Public Relations
Advertising campaign of Sepahan Oil Company has been inspired by general outline and program of the company,
objectives of Sales and Marketing Deputy Office in particular. To compile campaign, the company has taken the
following parameters into considerations such as budget of advertisements, market situation, and situation of rivals
and objectives of advertisements. It should be noted that implementation of this campaign has led the company to
materialize most of tis objectives successfully considering the budget appropriated in this respect. The program
executed in 1391 (ended March 20, 2013) in line with objectives of the campaign based on its predefined objectives
and strategies is comprised of four main groups as follows:
Main Groups
Subgroups
Environmental
Printing
Environmental, printing and
sports
Sports
Regional offices
Sales agents
Capillary and Widespread
Distribution Network
Lubricants’ supplying
centers
end users
Media and Desired Methods
Billboard, pedestrian bridge (footbridge), lamp poster, fuel
station owners, etc.
newspapers, dailies, periodicals, special reports, monthlies,
quarterlies, catalogues, brochures, stands and compact disc
(CD)
Special competitions such as Iran Pro League, IPL
(football) and basketball
- Samples (overalls, tool, sunshades, towel, wallmounted clock, other gifts)
- Training seminars and conferences (raining,
visiting, issuance of certificate, etc.)
- Tableau for lubricants’ supply centers and gas
stations
- Encouraging and motivational rewards (discounts,
trips, etc.)
- Samples special of end users
Sepahan Oil Company
Main Groups
Subgroups
Backing centers
financially and
spiritually
Sponsorship
Exhibitions, Media and
Foreign Publicities and
Advertisements
Exhibitions, media
and foreign
publicities and
advertisements
Media and Desired Methods
Supporting sport teams such as Ping-Pong,
mountaineering, motorcycling, motoring, touring,
etc.
- Supporting seminars, conferences, exhibitions,
etc. financially
- Supporting public services and utilities, charity
centers financially
Exhibitions, mass media, multilingual catalogues,
environmental advertisements and publicities, radio and
TV if needed, CD, stand, active presence in virtual and
online environment, internet, etc.
-
Degree of Effectiveness of Advertisements and Increasing Sales volume:
Considering the field studies made in this regard form sales agencies of the company across the country about
effectiveness of advertisement on sales volume and also observation of advertisements conducted in this respect, it
should be noted that advertisement and publicity played significant role in boosting sales volume of the company. In
general, advertisements had a positive effect in a way that it increased sales volume of the company considerably.
It is obvious that results of these studies will help company to compile its program in the next year efficiently.
Diagram Compiled by Sales Agencies on Degree of Observation of Advertisements of Sepahan Oil Company in
1391 (ended March 20, 2013)
31%: No
69%: Yes
Sepahan Oil Company
12th Chapter: Comparison of Budget and Performance
12 – 1 – Presenting Comparative Table of Profit and Loss with Approved Budget
12 – 2 – Highlights of Future Programs of the Board of Directors in Line with Materialization of Approved Budget
12 – 1 – Presenting Comparative Table of Profit and Loss with Approved Budget (Million Rials)
Comparing Performance between Profit and Loss and Budget
2013 Budget
1391 (March 20, 2013)
2012 Budget
Actual
Deviation
Description
million rials
million rials
million rials
million rials
increase
(decrease)
percentage
Net sale
16,485,500
7,521,362
11,364,064
3,842,702
51%
Final cost of sold goods
(11,714,215)
(6,167,520)
(7,631,339)
(1,463,819)
24%
Gross profit
4,771,245
1,353,842
3,732,725
2,378,883
176%
Administrative – financial
(786,952)
(468,380)
(2,466,369)
(1,997,989)
427%
and distribution and sales
costs
Net of other incomes and
98,000
2,216
320,944
318,728
14383%
operational costs
Operational profit
4,082,320
887,679
1,587,300
699,621
79%
Financial costs
170,000
170,000
158,309
-11,691
-7%
20,000
20,000
36,240
16,240
81%
non- operational costs
Profit before tax deduction 3,932,320
737,679
1,465,231
727,552
99%
Income tax
(884,770)
(92,210)
(299,125)
(206,915)
224%
Net profit
3,047,550
645,469
1,166,106
520,637
81%
Cumulative dividend in the 1,516,055
347,626
982,942
635,316
183%
beginning of year
Yearly adjustments (profit) (387,000)
(280,000)
(142,574)
-137,426
-49%
Profit appropriation
4,176,605
713,096
2,006,474
1,293,378
181%
Sepahan Oil Company
In line with the budget approved in 1392 (ended March 20, 2014), implementation of the following programs was
put atop agenda by the Board of Directors of the company:








Following up necessary measures to provide feedstock required for refinery units,
Formulating and notifying instructions for accelerating fulfillment of current affairs and increasing
efficiency,
Providing financial resources for promoting maneuvering power of the company in line with strong
presence in domestic and foreign markets,
Development of export products of the company
Following up necessary measures to attract foreign participations,
Trading various types of oil,
Setting up module in operational units of the company for clarification of performance and activity
Last Remarks
of Directors of Sepahan Oil Company requests stockholders of the company to approve financial statements of
The esteemed shareholders of the company are requested to take necessary measures in order to determine a widely
circulated paper for publishing upcoming advertisements of the company.
It is hoped that the Board of Directors of Sepahan Oil Company will attain its predefined objectives relying upon the
assistance of the Almighty God, cooperation and collaboration of respected shareholders of the company and
unflinching effort of industrious staff and personnel. Generally speaking, it is hoped that the company will take giant
strides towards growth, progress, development and prosperity in every field.
Once again, the Board of Directors of the Company intends to express its special thanks to all individuals who took
effective steps in line with materialization of most objectives of the company.
With Regards,
Sepahan Oil Company
12th Chapter: Comparison of Budget and Performance
12 – 1 – Presenting Comparative Table of Profit and Loss with Approved Budget
12 – 1 – Presenting Comparative Table of Profit and Loss with Approved Budget (Million Rials)
Comparing Performance between Profit and Loss and Budget
2013 Budget
1391 (March 20, 2013)
2012 Budget
Actual
Deviation
Description
million rials
million rials
million rials
million rials
increase
(decrease)
percentage
Net sale
16,485,500
7,521,362
11,364,064
3,842,702
51%
Final cost of sold goods
(11,714,215)
(6,167,520)
(7,631,339)
(1,463,819)
24%
Gross profit
4,771,245
1,353,842
3,732,725
2,378,883
176%
Administrative – financial
(786,952)
(468,380)
(2,466,369)
(1,997,989)
427%
and distribution and sales
costs
98,000
2,216
320,944
318,728
14383%
operational costs
Operational profit
4,082,320
887,679
1,587,300
699,621
79%
Financial costs
170,000
170,000
158,309
-11,691
-7%
20,000
20,000
36,240
16,240
81%
non- operational costs
Profit before tax deduction 3,932,320
737,679
1,465,231
727,552
99%
Income tax
(884,770)
(92,210)
(299,125)
(206,915)
224%
Net profit
3,047,550
645,469
1,166,106
520,637
81%
Cumulative dividend in the 1,516,055
347,626
982,942
635,316
183%
beginning of year
Yearly adjustments (profit) (387,000)
(280,000)
(142,574)
-137,426
-49%
Profit appropriation
4,176,605
713,096
2,006,474
1,293,378
181%
Sepahan Oil Company
In line with the budget approved in 1392 (ended March 20, 2014), implementation of the following programs was
put atop agenda by the Board of Directors of the company:








Following up necessary measures to provide feedstock required for refinery units,
Formulating and notifying instructions for accelerating fulfillment of current affairs and increasing
efficiency,
Providing financial resources for promoting maneuvering power of the company in line with strong
presence in domestic and foreign markets,
Development of export products of the company
Following up necessary measures to attract foreign participations,
Trading various types of oil,
Setting up module in operational units of the company for clarification of performance and activity
Last Remarks
of Directors of Sepahan Oil Company requests stockholders of the company to approve financial statements of
The esteemed shareholders of the company are requested to take necessary measures in order to determine a widely
circulated paper for publishing upcoming advertisements of the company.
It is hoped that the Board of Directors of Sepahan Oil Company will attain its predefined objectives relying upon the
assistance of the Almighty God, cooperation and collaboration of respected shareholders of the company and
unflinching effort of industrious staff and personnel. Generally speaking, it is hoped that the company will take giant
strides towards growth, progress, development and prosperity in every field.
Once again, the Board of Directors of the Company intends to express its special thanks to all individuals who took
effective steps in line with materialization of most objectives of the company.
With Regards,

2014 Annual Report

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