Your Directors have pleasure in presenting their 60th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2022.
1. Financial highlights of the Company
(Rs in Crores)
|1 Gross Sales||7499.61||8995.63||7634.06||9082.64|
|2 Other Income||183.34||182.50||183.17||183.26|
|3 Total Revenue||7682.95||9178.13||7817.24||9265.90|
|4 Less : Operating Expenses||6950.46||7685.44||7062.76||7763.73|
|5 Operating Profit||732.49||1492.69||754.48||1502.17|
|6 Less : Finance Cost||42.74||9.63||43.00||9.77|
|7 Gross Profit||689.76||1483.07||711.48||1,492.40|
|8 Less : Depreciation||176.45||178.18||177.20||178.80|
|9 Exceptional Item||0.00||0.00||0.00||0.00|
|10 Profit before Taxes||513.32||1304.89||534.28||1313.61|
|11 Shares in Profit/ (Loss) of Associates||0.00||0.00||0.65||1.60|
|12 Profit before taxes after Associates||513.31||1304.89||534.94||1315.21|
|Deferred Tax (net)||78.08||79.57||63.49||79.45|
|Mat Credit recognized||-32.62||0.00||-32.62||0.00|
|Earlier year tax||-20.66||5.48||-20.66||5.48|
|14 Profit after taxes||417.67||890.90||450.11||898.58|
|15 Non-controlling Interest||0.00||0.00||-0.02||-0.03|
|16 Other comprehensive income arising from|
|re-measurement of defined benefit plan||-6.06||13.31||-6.07||13.07|
|17 Balance brought forward from last year||223.51||357.30||275.11||441.35|
|18 Amount available for appropriations||635.12||1261.52||719.17||1,353.04|
|19 Payment of Dividend|
|20 Transfer to General Reserve||230.00||490.00||230.00||490.00|
|21 Leaving a balance in the Profit & Loss Account||357.30||683.85||441.35||775.38|
Your Directors are happy to recommend a dividend @ 2.50 per Equity Share (Face value of Rs. 2/- each) on 39,84,77,530 shares (Previous Year - 110%, i.e. Rs. 2.20 per share on 39,84,77,530 Equity Shares of Rs.2/-each) for the financial year ended 31st March, 2022. The net outgo on account of Dividend shall be Rs. 99.62 Crores including Corporate Dividend Tax. The Dividend shall be paid to those members, whose names shall appear on the Register of Members of the Company on the Book Closure Date i.e. on 13/09/2022.
3. Brief description of the Companys working during the year/ State of Companys affair:
Your directors wish to report that your Company has achieved turnover of Rs. 8996 Crores for the year ended March 31, 2022 as against Rs. 7500 Crores (FY 20-21) on standalone basis, which is higher by Rs.1496 crores when compared to the previous financial year.
Similarly, for the year under review (FY 21-22), Profit before Tax (PBT) was Rs.1305 Crores and Net Profit (Profit after Tax) was Rs.891 Crores as against PBT of Rs.513 Crores and PAT of Rs.418 Crores for the previous financial year.
4. Material changes and commitments:
The Company has not made any material changes or commitments which affect the financial position of the Company during the financial year of the Company to which the financial statements relate and as on the date of signing of this report.
5. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future:
There are no such orders except those which have been appropriately challenged before the judiciary and no impact on going concern status and Companys operation in future of such matters are expected or visualized at the current stage at which they are.
6. Details in respect of adequacy of internal financial controls with reference to the Financial Statements:
Your Company has an internal Control System which commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function lies with the Audit Committee of Directors. The Audit Committee monitors and evaluates the efficacy and adequacy of internal control systems, accounting procedures and policies. Based on the report of Internal Auditors, significant audit observations and actions taken on such observations are presented to the Audit Committee of the Board.
7. Details of Subsidiary/Joint Ventures/Associate Companies:
During the year under review, Companies listed below are the Subsidiary Company or Associate Companies:
|? Subsidiary Companies -||GSFC Agrotech Limited.|
|Gujarat Port and Logistics Company Limited*|
|Vadodara Jal Sanchay Private Limited*|
|? Associate Companies -||Vadodara Enviro Channel Limited|
|Gujarat Green Revolution Company Limited|
|Gujarat Data Electronics Limited|
|Karnalyte Resources INC|
|? Subsidiary of Subsidiary -||Gujarat Arogya Seva Private Limited**|
*Gujarat Port and Logistics Company Limited was incorporated on 03/02/2020 as a Joint Venture Company by Gujarat State Fertilizers & Chemicals Limited and Gujarat Maritime Board with proposed investment in the ration of 60:40 respectively. A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided at Annexure - A to the Consolidated Financial Statement and hence not reproduced here for the sake of brevity. The Company does not have any material subsidiary in terms of Companys Act, 2013 read with SEBI (Listing Obligation & Disclosure Requirement) Regulations.
*Vadodara Jal Sanchay Private Limited was incorporated on 22/07/2020 as a joint venture company by Gujarat State Fertilizers & Chemicals Limited, Gujarat Alkalies and Chemicals Limited, Gujarat Industries Power Company Limited and Vadodara Municipal Corporation with investment in the ratio of 60:15:15:10 respectively. A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided at Annexure - A to the Consolidated Financial Statement and hence not reproduced here for the sake of brevity. The Company does not have any material subsidiary in terms of Companys Act, 2013 read with SEBI (Listing Obligation & Disclosure Requirement) Regulations, 2015.
** Gujarat Arogya Seva Private Limited (GASPL) was incorporated on 28th March 2017 with the primary object to retail generic medicines. The said Company was jointly promoted by Gujarat Medical Services Corporation Ltd (GMSCL) and GSFC Agrotech Limited (a wholly owned subsidiary of GSFC Limited) with equity participation of 49% (Rs.1.30 Crore) and 51% (Rs. 1.35 Crore) respectively.
GASPL has remained dormant ever since its incorporation except for statutory compliances with ROC and book keeping activities to avoid defaults and penalties. GASPL is inoperative company and since last 2 years has neither carried out any commercial activity nor there remain any possibility to carry out such activities. As such now there is no plan for commencing the business in view of the Government Resolutions dated 05-07-18 and
18-07-18 issued by the Additional Chief Secretary, Health & Family welfare Department, GOG. As per the said
GR, it has been decided to transfer the work of Generic Drug Stores to M/s. H.L.L. Life Care Limited. Hence, it was decided to dissolve the company.
The process for voluntary liquidation of the company was carried out by M/s Ravi Kapoor and Associates, who was appointed as liquidator for the company. The National Company Law Tribunal (NCLT) allowed the application for voluntary liquidation of the Company and the Company got dissolved accordingly vide Order dated 16.03.2022 issued by NCLT, Ahmedabad.
. Listing of Shares & Depositories:
The Equity Shares of your Company are listed on the BSE Limited (BSE) and National Stock Exchange of India Ltd. (NSE). As approved by the shareholders, an application for voluntary delisting of Equity Shares from Calcutta Stock Exchange Association Ltd., Kolkata, was made, however, the approval for delisting is still not received. The listing fee for the FY 22-23 has been paid timely to both the BSE and NSE.
Your Directors wish to state that the Equity Shares of your Company are compulsorily traded in dematerialized form w.e.f. 26/06/2000. Presently, 98.12% of shares are held in electronic/ dematerialized form.
. Report on Corporate Governance And Management Discussion And Analysis Report To Shareholders:
Your Company has complied with all the mandatory requirements of Corporate Governance norms as mandated by SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
A separate report on Corporate Governance together with the Certificate of M/s. Samdani Kabra & Associates, Company Secretaries, Vadodara forms part of this Annual Report. The Management Discussion & Analysis report also forms part of this Annual Report.
10. Business Responsibility Reporting
Business Responsibility Report forms part of this Annual Report as required under Regulation 34(2) (f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
11. Fixed Deposits
During the year 2021-22, your Company has not accepted/ renewed any Fixed Deposit. Your Directors wish to report that there are NIL Fixed Deposits aggregating Rs. NIL which have remained unclaimed by Depositors, as on 31st March, 2022. Letters reminding them to seek repayment have been sent. Upto and including the date of this report, Nil deposits have been repaid.
During the year, the Company has transferred a sum of Rs. NIL Lacs being the unclaimed deposits and interest amount thereon to the Investors Education and Protection Fund (IEPF) as required in terms of Section 125 of the Companies Act, 2013. The Company has discontinued accepting new deposits since 15.11.2005, and renewing the deposits since 31.03.2009.
All the properties and insurable interests of the Company, including the buildings, plant & machinery and stocks have been adequately insured. Also, as required under the Public Liability Insurance Act, 1991, your Company has taken the appropriate insurance cover.
13. Expansion & Diversification
Your Directors are happy to share the status of various projects that are under execution/ executed as below:
PA & APS Plants Refurbishment:-
To improve productivity, efficiency and reliability of the old PA and APS Plants established in the year 1967, your
Company has taken up refurbishment of these plants. The Project is successfully completed well within the allocated budget.
Nylon- 6 Compounding Project:-
Considering growing demand of Nylon-6 Compounded chips and as a value added product, your company has successfully commissioned 2 numbers of 24 MTPD capacity Nylon-6 compounding lines in the month of December, 2021.
400 MTPD Ammonium Sulphate Plant at Vadodara Unit:-
To capture growing market of Ammonium Sulphate, your company is setting up 400 MTPD Ammonium Sulphate
Plant at Vadodara Unit. Based on experience of Ammonium Sulphate production over the years, your company will execute the Project without involving technology supplier and by utilising In-house expertise and available resources. Engineering activities are completed and Procurement & Construction activities are under progress.
20 MTPD HX Crystal Project:-
Considering present demand-supply gap and as an import substitute, your company is expanding production capacity of HX crystals plant at Vadodara unit for further value addition. Your company will execute the Project based on In-house technology and by utilising available resources. Engineering and Procurement activities for the Project are under progress.
100 MTPD Gypsum Granulation Plant:-
Considering increased use of Gypsum granules as a soil conditioner and the cost advantage over Gypsum powder, your company is setting up 100 MTPD Gypsum Granulation Plant at Vadodara unit on LSTK basis. Your company has awarded the work to LSTK contractor and Project activities are under progress.
15 MW Solar Power Project at Charanka:-
To make use of green energy & meet Renewable Purchase Obligation (RPO) requirement, your company is setting up 15 MW ground mounted solar power plant at Charanka, Gujarat. Your company has awarded the work to EPC contractor and Project activities are under progress.
Urea Plant Revamping Project:-
To reduce the energy consumption of existing Urea Plants and improve the plant reliability considering vintage plant, your company is considering to carry out revamping of Urea-II Plant. M/s Casale SA, Switzerland is selected as Technology supplier and accordingly, Basic Engineering Package is received from M/s Casale. Company has received commercial offers & the same are under evaluation.
600 MTPD Sulphuric Acid Plant at Vadodara Unit:-
Based on Sulphuric Acid & Steam balance of the complex, your Company is considering to set up 600 MTPD
Sulphuric Acid Plant on LSTK basis at Vadodara Unit. Company has received commercial offers & the same are under evaluation.
600 MTPD Phosphoric Acid Plant and 1800 MTPD Sulphuric Acid Plant at Sikka Unit:-
As a part of backward integration, your Company is considering to install 600 MTPD Phosphoric Acid Plant and 1800 MTPD Sulphuric Acid Plant at Sikka Unit. Discussions are in progress with Phosphoric Acid and Sulphuric Acid technology suppliers for contract finalisation.
Roof top Solar Power Project at Vadodara Unit:-
To enhance green energy portfolio, your Company is considering to set up roof top solar plant at various identified locations & a floating roof solar power plant at Vadodara Unit. Company has invited Expression of Interest from EPC contractors & based on responses, the techno-commercial offers will be invited.
Green Hydrogen Project at Vadodara Unit:-
As a part of green initiative of Government of India, your company is evaluating various options to set up a Green Hydrogen Project at Vadodara Unit.
Phosphate Rich Organic Manure (PROM), Project at Polymer Unit:-
With a view to expand GSFCs Agro-product portfolio, your company is considering to enter into organic fertilizers by setting up 2x200 MTPD PROM plant at Polymer unit by using available existing infrastructure.
14. Information regarding conservation of energy, technology absorption, foreign exchange earnings and outgo and particulars of employees etc.
Information as required under Section 134 (3) (m) of Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are enclosed in Annexure D forming part of this report.
The details relating to Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have been disclosed in point # 5 of Corporate Governance Report.
15. Corporate Social Responsibility (CSR)
The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. As a part of its initiatives under "Corporate Social Responsibility", the Company has undertaken projects in the areas of education, livelihood, health, water and sanitation. The Annual Report on CSR activities is enclosed as Annexure A. CSR Policy adopted by the Company is placed on the Companys website at https://www.gsfclimited.com/companys-act-listing-agreement
A) Changes in Directors and Key Managerial Personnel:
Shri Pankaj Kumar, IAS has been appointed as Chairman w. e. f. 07.09.2021 in place of Shri Anil Mukim, IAS (till 31.08.2021).
Further, the members may kindly note that Smt. Jayaben Thakkar, Independent Director (Woman) of the Company has tendered her resignation with effective from 09/02/2022 due to personal commitments and other pre-occupations.
Government of Gujarat had nominated Shri Mukesh Puri as Managing Director of the Company with effective from 06/12/2020. As per the Government of Gujarat Order dated 05/12/2020, he was the Additional Chief Secretary, Urban Development & Urban Housing Department, Government of Gujarat and was holding additional charge as Managing Director–GSFC Limited for the period effective from 06/12/2020. Accordingly the members at 59th Annual General Meeting approved the appointment of Shri Mukesh Puri, IAS as Managing Director of the Company. The members at the said 59th AGM further authorized the Board of Director to approve the remuneration, perquisites or terms and conditions for his appointment, as per the communication that may be received from the Government from time to time.
Thereafter, Shri Mukesh Puri, IAS was relieved from the charge as Additional Chief Secretary, Urban Development & Urban Housing Department and his services were placed by the Government to hold full time charge as Managing Director – GSFC Limited vide GoG Notification dated 24/12/2021. Hence, he was appointed as Managing Director in the category of Executive Director with effect from 24/12/2021.
Government of Gujarat, vide its resolution # GSF/1098/1620/ E dated 20/01/2022 advised the terms and conditions for his appointment holding full time charge as Managing Director – GSFC Limited during his tenure for holding full charge as Managing Director – GSFC Limited.
Thereafter, vide GoG Notification dated 03/03/2022; he was again given charge as Additional Chief Secretary to Agriculture, Farmers Welfare and Co-operation Department, Government of Gujarat and was appointed to hold the additional charge as Managing Director – GSFC Limited. Hence, the category again was changed from executive director to non-executive director.
The terms and conditions issued by the Government of Gujarat for the period of his appointment in the category of Executive Director from 24/12/2021 to 03/03/2022 is placed for information and approval by the members in the notice convening 60th Annual General Meeting.
Smt. Mamta Verma, IAS has been appointed w.e.f.01.07.2021as a rotational director in place of Smt. Sunaina Tomer, IAS (till 14.06.2021) and Shri J. P. Gupta, IAS has been appointed w.e.f. 14.12.2021 as rotational director in place of Shri Pankaj Joshi, IAS, (till 01.11.2021). Smt. Mamta Verma, IAS shall be liable to retire by rotational at the ensuing 60th Annual General meeting, has offered herself for re-appointment.
Shri Tapan Ray, Smt. Gauri Kumar, Prof. Ravindra Dholakia and Dr. Sudhir Kumar Jain, independent directors have submitted declarations that they meet the criteria of Independence as provided under section 149 (6) of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, the names of all the Independent Directors of the Company have been included in the data bank maintained by the Indian Institute of Corporate Affairs.
The brief resume of Directors with regard to appointment/ re-appointment at 60th Annual General Meeting is annexed to the Notice convening the 60th Annual General Meeting, which forms the integral part of this Annual Report.
A Certificate has been obtained from the Company Secretary in practice, confirming that none of the directors on the Board of Directors of the Company have been debarred or disqualified from being appointed or continuing as director of Companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs or any such other statutory authorities. The Certificate of Shri Niraj Trivedi forms part of this report.
B) Board Evaluation:
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation & Disclosure Requirement) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of its committees. The manner in which the evaluation has been carried out is explained in the Corporate Governance Report which forms the part of this Annual Report.
C) Appointment and Remuneration Policy:
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, senior management and their remuneration. The details of Remuneration Policy and its web link are contained in the Corporate Governance Report.
During the year, five Meetings of the Board of Directors and five meetings of the Audit Committee were held. The composition of Board and Committees along with details of attendance is contained in Corporate Governance Report.
Dividend Distribution Policy: The Board of Directors of the Company at its Meeting held on 26th May, 2017 has adopted "Dividend Distribution Policy" effective from 26th May, 2017, which is available on the Companys Website at the link https://www.gsfclimited.com/companys-act-listing-agreement.
As per the SEBI Listing Regulations, the said "Dividend Distribution Policy" is also required to be disclosed in the Annual Report of the Company, which is annexed herewith as Annexure E. The dividend recommended by the Board for the year ended 31st March, 2022 is in accordance with the said Dividend Distribution Policy.
17. Details of establishment of vigil mechanism for Directors and Employees:
The Company has a Vigil Mechanism Policy in place to deal with instances, if any, of the fraud, mismanagement, misappropriations, if any and the same is placed on the Companys website. The details of the policy as well as its web link are contained in the Corporate Governance Report.
Reporting of fraud by Auditors
During the year under review, the Statutory Auditors of the Company have not reported any instance of fraud to the Board of Directors under Section 143 (12) of the Companies Act, 2013, including rules made thereunder.
Disclosure as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
Your Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (as amended from time to time).
Secretarial Standards of ICSI
Your Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India and approved by the Central Government
18. Particulars of loans, guarantees or investments under section 186:
Particulars of loans given, investments made, guarantee given and securities provided (if any) along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement.
19. Particulars of contracts or arrangements with related parties:
All related party transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel and other Designated Persons which may have a potential conflict with the interest of the Company at large.
All Related party transactions were placed before the Audit Committee and also the Board of Directors for approval. Prior omnibus approval of the Audit Committee is obtained and a statement giving details of transactions, if any, shall be continued to be placed before the Audit Committee meeting as mandated. The Company has developed a mechanism for identification of related party transactions and the Company is also having the system of monitoring of such transactions. The appropriate resolution regarding related parties is placed for the approval of members and forms the part of the notice convening the 60th Annual General Meeting.
The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto have been disclosed in Annexure C to this report.
20. Managerial Remuneration:
Details as required pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are contained in Corporate Governance Report.
21. Risk management policy:
The details of such Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Boards Report.
22. Directors Responsibility Statement:
Pursuant to Section 134 (3) (c) of the Companies Act, 2013, your Directors confirm that: a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period; c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. The Directors had prepared the annual accounts on a going concern basis; e. The Directors, in the case of a listed Company, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
(a) Statutory Auditors
On the recommendation of Audit Committee, the Board of Directors has recommended for the appointment of M/s. Parkih Mehta & Associates, Vadodara, Chartered Accountants (Firm Registration No. 112832W) as the Statutory Auditors for the first term of two consecutive years i.e. to hold the office from the conclusion of 60th Annual General Meeting till the conclusion of 62nd Annual General Meeting of the Company to be held in the year 2024. Your Directors wish to inform that the outgoing Statutory Auditors viz. TR Chaddha & Co., LLP have completed their term of five years and the proposed appointment is in their place.
(b) Cost Auditors:
In terms of the Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost accounting records and get them audited every year. The Board of Directors of your Company, on the recommendations made by the Audit Committee, has approved appointment of M/s Diwanji & Company, Cost Accountants, Vadodara (Firm Registration Number 000339) as the Cost Auditors of your Company to conduct the audit of cost records for the Financial Year 2022-23. The remuneration proposed to be paid to the Cost Auditor is placed for your ratification at the ensuing 60th Annual General Meeting. The Cost Audit report for the F.Y. 2021-22 was filed within stipulated time.
(c) Internal Auditors:
Your Company has appointed M/s K C Mehta & Co, Chartered Accountants, Vadodara, as Internal Auditors of Baroda & Sikka Unit for Financial Year i.e. 2022-23.
(d) Secretarial Auditors & Secretarial Audit Report:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Niraj Trivedi, Practicing Company Secretary to undertake the secretarial audit of the Company. The Report of the Secretarial Auditor is enclosed as Annexure B.
24. Auditors Report:
There are no comments/ observations, reservations or adverse remarks in the Auditors Report and Secretarial Audit Report and hence no clarifications need to be given on the clean report.
25. Extract of the annual return:
Link of annual report as per the Companies Amendment Act, 2017 is as below; https://www.gsfclimited.com/companys-act-listing-agreement
26. Human Resources:
Your Directors are happy to acknowledge that the well positioned human resource of the Company have been key drivers in implementing ideas, polices, cultural and behavioral aspects of the organization and ultimately with their outstanding performance has helped the Company to realize its objectives. Your Directors are happy to place on record their appreciation for highly potential, consistent and ethical employees for their remarkable contribution to the Company.
Industrial Relations have remained cordial during the period under report.
Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from the Government of Gujarat, Government of India, Bank of Baroda and other Banks and agencies. Your Directors also wish to express their gratitude to the investors for their continued support and faith reposed in the Company.
|For and on behalf of the Board|
|Place : Fertilizernagar||Pankaj Kumar, IAS|
|Date : 22/08/2022||Chairman|