gujarat gas financial services ltd Management discussions

GUJARAT GAS FINANCIAL SERVICES LIMITED ANNUAL REPORT 2004 MANAGEMENT DISCUSSION AND ANALYSIS DISCUSSION ON OPERATIONS: Management: With a view to continue the focus on day to day management of the company, your company has re-appointed Mr. M.I. Vakharwala as the Chief Operating Officer for a further period of two years. Mr.Vakharwala shall continue to be responsible for the day to day management of GFSL. Business: Your company continues to adopt a selective and cautious approach in financing and is focussing on domestic leasing business for gas connections. During the year, as part of initiatives aimed at customer satisfaction and offering innovative products, the `Fixed Cost connection policy, Monsoon Dhamaka and a new finance scheme were launched. The response from customers was quite encouraging resulting in the company able to register 12,157 nos. bookings during year 2004. The company installed 8,186 nos. of domestic and commercial natural gas connections at a cost of Rs. 83.53 million as against 4.925 nos. done at a cost of Rs. 49.13 million last year. Recovery: The recovery of its outstanding debts has been a focus area for the company in year 2004. The total outstanding under the retail finance (consumer durables and vehicle finance) was Rs. 2.83 million as on December 2003 which has come down to Rs. 0.30 million in December 2004. The overdue outstanding has come down from Rs. 1.75 million as on December 2003 to Rs. 1.09 million in December 2004. During the year, the company was also able to recover Rs. 6.41 million out of bad debts written off in previous years through One Time Settlement with defaulting customers. Legal cases for recovery from defaulters including those written off in earlier years are also being pursued vigorously. Investments: During the year, the company remained invested in bank deposits and certain government securities. At the end of 2004, the total invested portfolio is Rs. 69.90 million. HEALTH, SAFETY, SECURITY & ENVIRONMENT (HSS & E): With a view to ensure safety of its employees and assets, the HSS&E policies are being strictly implemented and progress is monitored on a continual basis. HSSE audits/inspections were carried out at Contractors sites. The employees were encouraged to report hazards and near misses. The Contractor employees of Domestic connection and riser maintenance contractors were briefed on lessons of the fatal incidents occurred at other companies. FINANCE AND INSURANCE: * Your company remains a zero debt company. * During 2004, company paid maturing deposits amounting to Rs. 0.17 million out of the special escrow account (in compliance with RBI directions) being maintained with State Bank of India. As on December 31, 2004, the unclaimed deposit amount is Rs. 0.23 million of 32 depositors. The Company has been regularly sending reminders to deposit holders about maturity of their deposits. * The companys office assets, stocks, risks are adequately insured. HUMAN RESOURCES: The number of employees as on December 31, 2004 was five. In the year 2002, eight employees were retrenched, out of which two opted for settlement. These employees raised a dispute under the Industrial Disputes Act, 1947, which has been referred by the Labour Commissioner to the Labour Court, Surat. The proceedings continue to be stayed in the Labour Court, since the Gujarat High Court is yet to dispose off the petition of Gujarat Gas Company Ltd (GGCL.) who are contesting their being made a party to this dispute.