To the Members of Gulshan Polyols Limited
Your Board of Directors takes pleasure in presenting the 22nd (Twenty Second) Annual Report on the business and operations of the Company together with the Audited Financial Statements for the financial year ended March 31, 2022.
I. FINANCIAL AND OPERATIONAL PERFORMANCE
1. FINANCIAL RESULTS
|Particulars||Year Ended 31.03.2022||Year Ended 31.03.2021|
|Revenue from Operations||1,10,072.64||76,603.44|
|TOTAL INCOME (I)||1,10,277.39||76,864.42|
|TOTAL EXPENSE OTHER THAN INTEREST AND DEPRECIATION (II)||95,060.87||63,560.28|
|Earnings before Interest, Tax , and Depreciation (EBITDA) (I –II)||15,216.52||13,304.14|
|Less: Finance Cost (Interest)||495.97||679.31|
|PROFIT BEFORE TAX (PBT) (III)||11,479.65||9,367.82|
|Less - Current Tax||3,079.67||1,843.89|
|- MAT Credit utilized||-||1,305.68|
|- Deferred Tax||(124.91)||6.59|
|TOTAL TAX EXPENSES||2,954.76||3,156.16|
|PROFIT AFTER TAX (PAT) (IV)||8,524.89||6,211.66|
|OTHER COMPREHENSIVE (INCOME)/LOSS (V)||(5.84)||(66.95)|
|TOTAL COMPREHENSIVE INCOME FOR THE YEAR (VI) (IV - V)||8,530.73||6,278.61|
|RETAINED EARNINGS-OPENING BALANCE||31,964.29||21,211.77|
|Profit for the year||8,524.89||6,211.66|
|Dividend (including Dividend Distribution Tax) (Interim and Final)||(274.08)||(117.46)|
|Transfer to Capital Redemption Reserve||(975.00)||-|
|Transfer to General Reserve||(2.00)||-|
|Acquisition of GHPL*||4061.29|
|Acquisition of EDPL*||597.04|
|RETAINED EARNINGS-CLOSING BALANCE||39,238.10||31,964.29|
|Earnings per Share – Basic (Rs.)||16.40||12.53|
|– Diluted (Rs.)||16.40||12.53|
*Refer note 46 of the financials.
2. STATE OF COMPANY?S AFFAIRS & OPERATIONAL PERFORMANCE HIGHLIGHTS
Gulshan Polyols Limited (‘GPL? or ‘the Company?) is a multi-location and multi-product manufacturing company with global presence in 42 countries across 3 continents. GPL is a diversified Company engaged in manufacturing/ trading of Sorbitol, Fructose & Sweetener, Ethanol (Bio-fuel)/ Distillery, Calcium Carbonate, Starch & Derivatives, by products thereof and Onsite PCC Plants. GPL is an industrial house, older, more than four decades operating from multiple facilities set up across India. GPL is engaged in manufacturing of chemicals from grain and minerals, from toothpaste to alcohol, from sweeteners to paints, from paper to medicines, from plastics to personal care items. GPL is touching and an integral part of everyones? everyday life, across the world. We seek to develop and justify the reason of our existence through value creation in management and processes. Our approach to managing the Company stands on the core values of – Respect, Trust, Ownership and Integrated Teamwork. We are working to strengthen our moves to achieve goals with the principles of being decisive, innovative, inspiring, empowering, dynamic and process driven to take our integrated approach forward. This is a fitting approach for an organization such as ours, where we interact and have intense relationships with a broad and diverse set of stakeholders.
The Financial Year 2021-22 was a robust year for the Company on multiple fronts, your Company has delivered a remarkable performance as the Company has achieved a highest ever yearly revenue of +INR 1000 Crore..
The earnings in the FY22 vs FY21 reflect a robust performance. The demand in Company?s products surpassed all previous records and resulted into registering a growth in Revenue by ~ 44% and in Net Profit by ~ 37%.
During the financial year ended March 31, 2022, Company has achieved Revenue from Operations of Rs. 1,10,072.64 Lakhs (Previous Year: Rs. 76,603.44 Lakhs). The EBIDTA for the year stood at Rs. 15,216.52 Lakhs against Rs. 13,304.14 Lakhs reported in the previous year. The Net Profit for the year stood at Rs. 8,524.89 Lakhs (Previous year Rs. 6,211.66 Lakhs).
The company has three manufacturing segments viz Mineral Processing, Grain Processing and Ethanol (Bio-Fuel)/Distillery. The products processed under these segments, are having end use in multiple industries.
Business Operations-Segment wise for the year ended March 31, 2022
Revenue for the year ended 31st March
Profits before Interest and Tax for the year ended 31st March
|Ethanol (Bio-Fuel)/ Distillery||19,729.30||13,269.60||2,453.27||1579.25|
During the year under review, our earnings per share is Rs.16.40 as compared to Rs.12.53 in the previous year. As far as liquidity is concerned, we are adequately funded to navigate through these challenging times and we do not foresee any major impact on our operations except disruptions in supply chain and increase in raw material prices which may impact on profit margins amid global tensions and fast inflation. We remain motivated and committed to consistently create value for our stakeholders while maintaining our strong leadership position in key business segments. A detailed analysis of the overall performance is given in the Management Discussion and Analysis Report, forming part of this Report.
3. TRANSFER TO RESERVES
During the year under review, an amount of Rs. 2,00,000 is transferred to the general reserve.
According to Regulation 43A of the Listing Regulations, the Board has adopted a Dividend Distribution Policy, which had been placed on the website of the Company and can be accessed at the link: https://www.gulshanindia.com/pdf/policy/Dividend%20 Distribution%20Policy.pdf
During the year under review, the Board of Directors of your Company has also paid the Final dividend, declared for FY 2020-21 of 40% on 46,917,020 equity shares of face value Rs. 1/- each amounting to Rs. 0.40 per share at 21st AGM had declared and paid an interim dividend of 100% on 46,917,020 equity shares of face value Rs. 1/- each amounting to Rs. 1 per share. Further, the Board of Directors has recommended the Final Dividend of 100% on 5,19,75,489 equity shares of face value Rs. 1/- each amounting to Rs. 1 per share in their meeting dated May 20, 2022 subject to the approval of the shareholders in the 22nd Annual General Meeting (AGM) of the Company as stipulated in the Notice of 22nd AGM.
The Final Dividend after including an interim dividend will make a total dividend of Rs. 2 /- per equity share of face value of Rs. 1/- each, for the FY 2021-22.
The Board recommended/declared dividends based on the parameters laid down in the Dividend Distribution Policy.
Further, the Company has declared and paid the Preference Shares Dividend of 8% on 9,75,000 8% Redeemable Preference Shares of face value Rs. 100/- each in the meeting of the Board of Directors held on August 17, 2021 for FY 2020-21.
Furthermore, the Board in its meeting held on February 04, 2022 has accorded their consent for early redemption of 9,75,000 8% preference Shares of Rs. 100 each fully paid up upon alteration in the date of redemption from March 31, 2023 to February 05, 2022, consequent to written requisition and unanimous consent of preference shareholder and has paid accrued/accumulated dividend amounting Rs. 66,24,658 and entire redemption money to the preference shareholder of the Company in due compliance.
5. TRANSFER OF AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND
During the Financial Year 2021-22 and in pursuance to the provisions of Section 124(5) read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has transferred the unclaimed dividend pertaining to Financial Year 2013-14 amounting to Rs. 5,84,430/- (Rupees Five Lakhs Eighty Four Thousand Four Hundred and Thirty only) to the Investors Education and Protection Fund ("IEPF") Account established by the Central Government. The details of dividend amount transferred to IEPF are available on the Company?s website at web link https://www.gulshanindia.com/iepf.html.
Further, pursuant to the provisions of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, the shares on which dividend remains unclaimed for seven consecutive years or more shall be transferred to IEPF account after giving due notices to the concerned shareholders. Accordingly, the Company has transferred 1,09,235 (One Lakh Nine Thousand Two Hundred and Thirty Five) equity shares to the IEPF account during the financial year 2021-22. The details of equity shares transferred are also available on the Company?s website at web link https://www.gulshanindia.com/transferred-iepf.html
The Nodal officer of the Company is Ms. Asha Mittal. The details of the nodal officer are also available on the Company?s website https://www.gulshanindia.com/.
6. CAPITAL STRUCTURE & STOCK OPTIONS Authorised Share Capital
The Authorised Share Capital of the Company as at March 31, 2022 was Rs. 42,81,00,000/- (Rupees Forty Two Crore and Eighty One Lakh only) divided into 28,06,00,000 (Twenty Eight Crore and Six Lakh) Equity Shares of Rs. 1/- (Rupees One only) each; 2,50,000 (Two Lakh and Fifty Thousand) 0% (Zero Percent) Redeemable Preference Shares of Rs. 10/- (Rupees Ten only) each and 14,50,000 (Fourteen Lakh and Fifty Thousand) 0%-10% (Zero Percent to Ten Percent) Redeemable Preference Shares of Rs. 100/- (Rupees One Hundred only) each.
During the year under review, the authorised equity share Capital of the Company was increased to 28,06,00,000 (Twenty Eight Crore and Six Lakh) Equity Shares of Rs. 1/- (Rupees One only) each from 22,50,00,000 (Twenty Two Crore and Fifty Lakh only) Equity Shares of Rs. 1/- (Rupee One only) each pursuant to the Scheme of Amalgamation of Gulshan Holdings Private Limited ("Transferor Company No. 1") and East Delhi Importers & Exporters Private Limited ("Transferor Company No. 2") with Gulshan Polyols Limited ("Transferee Company") and their respective shareholders and creditors ("Scheme") sanctioned by the Hon?ble National Company Law Tribunal, Allahabad Bench vide Order pronounced on March 09, 2022.
Paid-up Share Capital
As on date, the paid-up equity share capital stands at Rs. 5,19,75,489 (Rupees Five Crore Nineteen Lakh Seventy Five Thousand Four Hundred and Eighty Nine only) consisting of 5,19,75,489 (Five Crore Nineteen Lakh Seventy Five Thousand Four Hundred and Eighty Nine) equity shares of Rs. 1/- (Rupee One only) each.
As at March 31, 2022, the paid-up equity share capital stands at Rs. 4,93,33,020 (Rupees Four Crore Ninety Three Lakh Thirty Three Thousand and Twenty only) consisting of 4,93,33,020 (Four Crore Ninety Three Lakh Thirty Three Thousand and Twenty) equity shares of Rs. 1/- (Rupee One only) each.
Qualified Institutions Placement
The Board of Directors of the Company at its meeting held on March 24, 2022 has approved the allotment of 24,16,000 (Twenty Four Lakh and Sixteen Thousand) Equity shares to eligible qualified institutional buyers at the issue price of Rs. 326.48 per Equity Share (including a premium of Rs. 325.48 to the face value of Rs. 1 per Equity Share) which is at a discount of 5 % (i.e., Rs. 17.18 per Equity Share), to the Floor Price of Rs. 343.66 aggregating to Rs. 78,87,75,680 (Rupees Seventy Eight Crore Eighty Seven Lakhs Seventy Five Thousand Six Hundred Eighty Only), pursuant to the issue and allotment of Equity Shares under Qualified Institutions Placement ("QIP") under Chapter VI of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended. Accordingly, the paid – up equity share capital of the Company stands increased to Rs. 4,93,33,020 (Rupees Four Crore Ninety Three Lakh Thirty Three Thousand and Twenty only) from Rs. 4,69,17,020 (Rupees Four Crore Sixty Nine Lakh Seventeen Thousand and Twenty).
Scheme of Amalgamation
The Board of Directors of the Company in its meeting held on August 06, 2020 had approved a Scheme of Amalgamation amongst the Company, Gulshan Holdings Private Limited (Holding Company or Transferror Company 1), East Delhi Importers & Exporters Private Limited (Group Company or Transferror Company 2) and their respective Shareholders and Creditors ("the Scheme"), under section 230 to 232 and other applicable provisions of the Companies Act 2013 and the provisions of other applicable laws. The Scheme provides for the amalgamation of Transferor Company 1 and Transferor Company 2 into the Transferee Company (Gulshan Polyols Limited). The Scheme has been approved by the Hon?ble National Company Law Tribunal, Allahabad Bench (‘?NCLT") vide its order pronounced on March 09, 2022. The certified copy of the order has been filed with "The Registrar of Companies, Kanpur, Uttar Pradesh," (the ROC) on March 30, 2022.
Consequent to the said NCLT Order, the Board of Directors of the Company at its meeting held on April 18, 2022 has approved the allotment of 2,99,82,536 (Two Crore Ninety Nine Lakh Eighty Two Thousand Five Hundred and Thirty Six) Equity Shares to the shareholders of Transferor Companies as on record date April 14, 2022, fixed for the purpose, in the ratio of 39,848 Equity Shares of Rs. 1/- each fully paid up of the Company for every 1 (one) Equity Share of Rs. 1000/- each fully paid up of Transferor Company No. 1 and 181 Equity Shares of Rs.1/- each fully paid up of the Company for every 1 (one) Equity Share of Rs.10/- each fully paid up of the Transferor Company No. 2 and out of which 27,340,067 equity shares at Rs. 1 were cancelled & extinguished with respect to investments made by transferor companies in the Transferee Company. Consequently, there was a net increase in the Equity Share Capital by 26,42,469 Equity Shares at Rs. 1/- per share. Thereby, the paid – up equity share capital of the Company stands increased to Rs. 5,19,75,489 (Five Crore Nineteen Lakh Seventy Five Thousand Four Hundred and Eighty Nine) from Rs. 4,93,33,020 (Rupees Four Crore Ninety Three Lakh Thirty Three Thousand and Twenty only), pursuant to the Scheme. Being the order filed with the ROC on March 30, 2022, the scheme becomes operative from March 30, 2022 (Effective Date). As per Note No. 46 to the Financials regarding ‘?Business combination on Merger?? read with requirements of Ind AS 103, the Company has accounted merger by using pooling of interest method in the financial results in line with the Scheme. Accordingly, the financial information presented for the prior periods has been restated as per Ind AS-103 and to this effect and as the Scheme got operative from March 30, 2022, the paid equity share capital as on March 31, 2022 stands at Rs. 5,19,75,489 (Rupees Five Crore Nineteen Lakh Seventy Five Thousand Four Hundred and Eighty Nine only) comprising of Rs. 5,19,75,489 ( Five Crore Nineteen Lakh Seventy Five Thousand Four Hundred and Eighty Nine) equity shares of Rs. 1/- (Rupee One only) each. Further, the Company has applied for listing of 2,99,82,536 Equity Shares and extinguishment of 2,73,40,067 Equity Shares and the BSE Limited and National Stock Exchange of India Limited granted its listing and trading approval vide letters dated May 24, 2022 (NSE Listing Letter); May 26, 2022 (BSE Listing Letter) and June 22, 2022 (BSE and NSE Trading Letters) respectively.
Preference Shares Capital
The Board of Directors of the Company at its meeting held on February 4, 2022 has redeemed the entire paid-up preference share capital of Rs. 9,75,00,000 (Rupees Nine Crore and Seventy Five Lakh only) consisting of 9,75,000 (Nine Lakh and Seventy Five Thousand) preference shares of Rs. 100/- (Rupees Hundred only) each, accordingly, as at March 31, 2022, preference share capital stands NIL.
EMPLOYEES STOCK OPTION PLAN
The members of the Company had approved the Gulshan Polyols Limited Employees Stock Option Scheme, 2018 ("ESOP 2018") for grant of stock options exercisable into not more than 23,45,851 (Twenty Three Lakh Forty Five Thousand Eight Hundred and Fifty One) equity shares of face value of Rs. 1/- (Rupee One Only) each to eligible employees of the Company as defined in the Scheme.
During the year, the Company has granted 39,152 (Thirty Nine Thousand One Hundred and Fifty Two) stock options to eligible employees. The granted stock options can be exercised between April 1, 2024 to May 31, 2024 at Rs. 137/- (One Hundred and Thirty Seven only). The details under SEBI (Share Based Employee Benefits) Regulations, 2014 read with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (‘SEBI SBEB Regulations?), has been placed on the website of the Company and weblink of the same are https://www.gulshanindia.com/annonuncement.html. GPL ESOP Scheme, 2018 is in compliance with SEBI SBEB Regulations and other applicable laws and implemented through Employees Welfare Trust ("Trust"). For implementing and operating of ESOP 2018, the Trust holds 1,18,312 (One Lakh Eighteen Thousand Three Hundred and Twelve) equity shares of the Company as on March 31, 2022, being 0.24% of the paid-up share capital of the Company. The ownership of these shares cannot be attributed to any particular employee till he / she exercises the stock options granted to him / her and the concerned shares are transferred to him / her. Hence, the eligible employees to whom the stock options were granted under ESOP 2018 cannot exercise voting rights in respect of aforesaid shares held by the Trust as these eligible employees are not holders of such shares. The Trustee/Trust has not exercised the voting rights in respect of the aforesaid shares during the financial year 2021-22.
The details in respect of ESOP 2018 and movements during the year are as under:
|Number of options outstanding at the beginning of the period:||2,89,040|
|Number of options granted during the year:||39,152|
|Number of options forfeited / lapsed during the year:||15,282|
|Number of options vested during the year:||2,34,598|
|Number of options exercised during the year:||2,34,598|
|Number of shares arising as a result of exercise of options:||Not applicable as ESOP granted through Secondary Market|
|Number of options outstanding at the end of the year:||78,312|
Further, the Nomination, Remuneration and Compensation Committee in its meeting held on September 17, 2019 had granted 20,400 (Twenty Thousand and Four Hundred) Options under GPL Employees Stock Option Schemes 2018 to eligible employees, which due for vesting during the period from April 01, 2022 to May 31, 2022 at the exercise rate of Rs. 47.00 per share (based on the Average Buying cost of the Company from the BSE/NSE market) and among them 3,970 options are forfeited/lapsed and balance 16,430 has been exercised.
The disclosures required to be made under ESOP Regulations for FY 2021-22 given on the website https://www.gulshanindia.com/. The Company has received the certificate from the Secretarial Auditor of the Company certifying that the GPL ESOP Scheme 2018 has been implemented in accordance with the SEBI SBEB Regulations and shareholders? resolution. The certificate will be placed at the Annual General Meeting for inspection by members. A copy of the same will also be available for inspection at the Company?s registered office and corporate office.
7. ENVIRONMENT, HEALTH AND SAFETY
Environment, Health and Safety are among the core values of your Company. In order to promote zero accident culture, your Company has conducted various training & awareness programs.
Employees are encouraged to report all incidents so that preventive actions can be taken to avoid any mishap. Environment sustainability is paramount to any industry and your Company is conscious of its responsibility towards the impact of its operations on the environment.
Your Company believes that healthy and hygienic work environment not only benefits the workforce but it also increases the productivity and works as a retention tool.
8. HOLDING, SUBSIDIARIES, ASSOCIATES & JOINT VENTURES
During the period under review, pursuant to the Scheme of Amalgamation executed between the Company, Gulshan Holdings Private Limited (Holding Company), East Delhi Importers & Exporters Private Limited (Group Company) and their respective Shareholders and Creditors, the holding Company has been merged into the Company w.e.f. March 30, 2022.
Further, the Company has been incorporated a wholly-owned Subsidiary namely "GULSHAN OVERSEAS – FZCO" on September 8, 2021 under Dubai Silicon Oasis Authority. However, the Company has not infused any capital into the said company yet.
Furthermore, there are no Associates and Joint Ventures of the Company.
9. CREDIT RATINGS
During the period under review, the CRISIL Ratings Limited has reafirmed and granted ‘CRISIL A+/Stable? rating to Long-Term Facilities and ‘CRISIL A1? rating to Short-Term Facilities, to your Company.
10. DISCLOSURE ON SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE
The Company offers an excellent workplace environment where employees can perform to the best of their abilities. The work culture is shaped by self-motivated and committed professionals, aligned with our business objectives and working together to deliver topnotch and tailored solutions. Your Company laid down a Policy on Prevention of Sexual Harassment at work place and has an Internal Complaints Committee ("IC"). The Company has zero tolerance on Sexual Harassment at workplace. All employees - permanent, contractual, temporary and trainees are covered under this Policy. During the year under review there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act") and no complaint was pending at the beginning and at the end of Financial Year 2022. The Company carried out focused campaign on POSH and Awareness drives.
II. CORPORATE SOCIAL RESPONSIBILITY
During the year under review, your Company has spent eligible and budgeted amount towards Corporate Social Responsibility ("CSR") activities in accordance with Schedule VII of the Companies Act, 2013. However, an amount of Rs. 60 Lakhs from CSR?s amount, accounted and budgeted for FY 2021-22, has been transferred to a separate account i.e. Unspent CSR Account for the purpose of an Ongoing Project.
During the FY 2021-22, the Company has contributed a significant amount towards COVID-19 relief efforts and promoting education.
Annual Report on CSR activities for the Financial Year 2021-22 as required under Sections 134 and 135 of the Act read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules, 2014, as approved by the CSR Committee on August 9, 2022, is attached as Annexure ‘A? to the Board?s Report.
COMPOSITION OF CORPORATE SOCIAL RESPONSIBILITY (‘CSR?) COMMITTEE
In compliance with the guidelines prescribed under Section 135 of the Companies Act, 2013, your Company has constituted a Corporate Social Responsibility (CSR) Committee of the Board. The CSR policy, covering the Objectives, Focus Areas, Governance Structure Monitoring and Reporting Framework interalia others are approved by the Board of Directors. During the year, the Company has revised the CSR Policy pursuant to the Companies (Corporate Social Responsibility) Amendment Rules, 2021. The revised CSR Policy is available on the website of the Company at https://www.gulshanindia.com/pdf/policy/CorporateSocial-Responsibility-CSR-Policy.pdf.
As on date, the CSR Committee comprises of Ms. Archana Jain (Chairperson), Ms. Arushi Jain and Ms. Aditi Pasari. Mr. Jeewan Jyoti Bhagat has discontinued / ceased as a chairman of the Committee with effect from August 5, 2022 and thereafter Ms. Archana Jain inducted as a Chairperson effective from August 9, 2022. Other details of the Committee including meetings held and attendance are provided in the Corporate Governance Report, forms part of this Report.
III. OTHER STATUTORY DISCLOSURES
1. Deposits: The Company did not invite/accept any deposits covered under Chapter V of the Companies Act, 2013. Accordingly, no disclosure or reporting is required in respect of details relating to deposits covered under this Chapter.
2. Loans, Guarantees and Investments: Details of loans, guarantees/ securities and investments covered under the provisions of Section 186 of the Companies Act, 2013 read with the rules made thereunder along with the purpose for which the loan, guarantee or security, if any, is proposed to be utilised by the recipient have been disclosed in Notes of the Financial Statements.
3. Particulars of Contracts or Arrangements with the Related Parties: Your Company has adopted the revised Policy on materiality of Related Party Transactions and on dealing with Related Party Transactions (‘RPTs?) in accordance with the amendments made in Listing Regulations. Prior omnibus approval is obtained for RPTs on an annual basis for the transactions which are planned / repetitive in nature. Related party transactions entered pursuant to the omnibus approval so granted are placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions which are of repetitive nature. All RPTs are placed before the Audit Committee for review and approval.
All RPTs entered into during FY 2021-22 were in the ordinary course of business and on arm?s length basis. No material RPTs were entered into during FY 2021-22 by the Company as defined in the Policy on dealing with Related Party Transactions. Accordingly, the disclosure of RPTs as required under Section 134(3)(h) of the Act in Form AOC 2 is not applicable to the Company and hence the same is not provided. The Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions as approved by the Board is put up on the Company?s website at https://www.gulshanindia.com/pdf/policy/policy-on-materiality-of-related-party-transactions-and-dealing-with-related-party-transactions.pdf.
There were no material significant related party transactions which could have potential conflict with interest of the Company at large. In accordance with IND AS-24, your Directors draw attention of the members to Note no. 44 to the Financial Statements which sets out the Related Party disclosures.
4. Material Changes in Financial Position: No material change or commitment has occurred after the close of the Financial Year 2021-22 till the date of this Report, which affects the financial position of your Company. Your Company maintains appropriate internal control systems, which also provide reasonable assurance of recording the transactions of all material aspects of our operations and of providing protection against significant misuse or loss of the Company?s assets.
5. Significant or Material orders:
During the year under review, the Hon?ble National Company Law Tribunal, Allahabad Bench has issued and granted a certified true copy of order in respect of Scheme of Amalgamation of Gulshan Holdings Private Limited and East Delhi Importers & Exporters Private Limited with Gulshan Polyols Limited and their respective creditors and shareholders ("Scheme"), which was received by the Company on March 25, 2022 and the same has been filed with the "The Registrar of Companies", Kanpur, Uttar Pradesh on March 30, 2022.
Accordingly, the Scheme has become operative from March 30, 2022 (‘Effective Date").
However, no significant or material orders passed by the Regulators or Courts or Tribunal impacting the going concern status of the Company and its future operations.
6. Conservation of Energy, Research and Development, Technology Absorption and Foreign Exchange Earnings and Outgo: The Information on energy conservation, technology absorption, foreign exchange earnings and outgo in accordance with the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are given in Annexure ‘B?, annexed to this Report.
7. Particular of Employees: Your Company believes that human resource is vital to the growth and sustainability of an organization. Your Company maintains healthy work environment at all levels in the organization and encourages the employees to contribute their best. Particulars as required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure ‘C?, forms part of this Report.
8. Composition of Audit Committee: As on date, the Audit Committee comprises of Mr. Rakesh Kumar Gupta (Chairman), Mr. Akhilesh Kumar Maheshwari, Dr. Chandra Kumar Jain and Ms. Archana Jain. Ms. Archana Jain, inducted as a member in the Committee w.e.f. August 9, 2022. Other details of the Committee including meetings held and attendance are provided in the Corporate Governance Report, forms part of this Report.
All the recommendations made by Audit Committee were accepted by the Board of Directors.
9. Compliance with Secretarial Standards of ICSI: The Company has complied with the Secretarial Standard-1 on ‘Meetings of the Board of Directors? and Secretarial Standard-2 on ‘General Meetings? prescribed under the Section 118(10) of the Companies Act, 2013 as issued by ‘The Institute of Company Secretaries of India?.
10. Industrial Relations: During the year under review, industrial relations remained harmonious at all our offices and establishments.
IV. DIRECTORS AND KEY MANAGERIAL PERSONNEL
1. APPOINTMENT / REAPPOINTMENT/ RESIGNATION/ OTHER CHANGES
Ms. Arushi Jain (DIN: 00764520) will retire at the ensuing Annual General Meeting (AGM) and being eligible, has offered herself for reappointment. The Board recommends her reappointment to the members in the ensuing 22nd AGM.
During the year under review, Mr. Kailash Chandra Gupta (DIN: 01649210) and Mr. Jeewan Jyoti Bhagat (DIN: 00007743), discontinued / ceased as a Non-Executive & Independent Director of the Company with effect from April 2, 2021 and August 5, 2022 respectively. Ms. Archana Jain (DIN: 09171307) was appointed as an additional director in the category of Non-Executive & Woman Independent Director with effect from May 22, 2021.
Further, the Board of Directors, on the recommendation of Nomination, Remuneration and Compensation Committee (‘NRC?) accorded its approval for appointment of Mr. Rakesh Kapoor (DIN: 00015358) as an Additional Director in the category of Non-Executive & Independent Director with effect from August 9, 2022 to hold office till the conclusion of the 22nd Annual General Meeting. Moreover, Mr. Rakesh Kapoor has afirmed that he was not debarred from holding the office of Independent Director by virtue of any SEBI order or any other regulating Authority.
Additionally, on the recommendation of NRC, the Board has proposed and recommended the following, for the approval of Members of the Company in the 22nd AGM:
- Appointment of Mr. Kapoor as a Non-Executive & Independent Director to hold office for a term effective from August 9, 2022 upto September 30, 2024, shall not be liable to retire by rotation.
- Reappointment of Ms. Archana Jain (DIN: 09171307) as a Non-Executive & Woman Independent Director to hold office for a term effective from April 1, 2023 upto September 30, 2027, shall not be liable to retire by rotation. Ms. Archana Jain has afirmed that she was not debarred from holding the office of Independent Director by virtue of any SEBI order or any other regulating Authority.
- Reappointment of Dr. Chandra Kumar Jain, Chairman and Managing Director of the Company, shall be effective from April 1, 2023 to hold the office for a term upto September 30, 2027, shall not be liable to retire by rotation.
- Redesignation Ms. Arushi Jain (DIN: 00764520) and Ms. Aditi Pasari (DIN: 00120753) as Joint Managing Directors of the Company with effect from November 9, 2021 until their existing remaining tenure upto March 31, 2024.
Brief resumes and other details of the Director(s) being appointed, reappointed, redesignated at the ensuing AGM as stipulated under Secretarial Standard-2 issued by "The Institute of Company Secretaries of India" and Regulation 36 of the Listing Regulations is separately disclosed in the Notice of the 22nd AGM. Further, in the opinion of the Board, Mr. Rakesh Kapoor and Ms. Archana Jain has relevant integrity, expertise, balance of skill, knowledge and experience, required for the said appointments. The Company has received declarations from the Independent Directors confirming that they meet the criteria of Independence as prescribed under the Act and Listing Regulations.
During the year, the Members had at the 21st AGM of the Company held on September 18, 2021, approved the appointment/ reappointment of;
• Mr. Ashwani Kumar Vats (DIN: 00062413) who liable to retire by rotation and had offered himself for reappointment; and
• Ms. Archana Jain (DIN: 09171307) as a Non-Executive & Woman Independent Director to hold office for a term, effective from May 22, 2021 upto March 31, 2023.
Pecuniary relationship or transactions with the Company
During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committee(s) of the Company.
KEY MANAGERIAL PERSONNEL
In pursuance of the provisions of Section 2(51) and Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Dr. Chandra Kumar Jain, Chairman & Managing Director; Ms. Arushi Jain, Joint Managing Director; Ms. Aditi Pasari, Joint Managing Director; Mr. Ashwani Kumar Vats, Whole Time Director & CEO; Mr. Rajiv Gupta, Chief Financial Officer and Ms. Asha Mittal, Company Secretary are the Key Managerial Personnel of your Company as on date.
During the period under review, Ms. Arushi Jain (DIN:00764520) and Ms. Aditi Pasari (DIN:00120753) are redesignated from Whole Time Directors to Joint Managing Directors of the Company with effect from November 9, 2021 subject to the approval of members of the Company in the ensuing AGM.
Note: Detailed changes pertaining to KMPs falls in director?s category given above.
2. MEETINGS OF THE BOARD
During the year, 9 (Nine) meetings of the Board of Directors were convened and held during the financial year 2021-22. The maximum intervening gap between the meetings was within the period prescribed under the provisions of Section 173 of the Act and Listing
Regulations. For further details of Board/Committee Meetings including composition and attendance, please refer to the Corporate Governance Report, forms part of this Report.
3. ANNUAL PERFORMANCE EVALUATION OF THE BOARD
Pursuant to the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, an Annual Performance Evaluation of the Board, its Committees and the individual Directors is to be carried out either by the Board or by the Nomination, Remuneration and Compensation Committee or by an independent external agency and the Board is required to review its implementation and compliance. In view of the above, the Annual Performance Evaluation was undertaken by the Board. The framework and criteria of evaluation has been approved by the Nomination, Remuneration and Compensation Committee of the Company. In a separate meeting of Independent Directors, the performance of Non-Independent Directors and the Board as a whole, and the Chairperson of the Company was evaluated taking into account the views of Executive Directors and Non-Executive Directors. A statement on annual evaluation by the Board of its performance and performance of its Committees as well as Individual Directors including Chairperson of the Board is detailed in the Corporate Governance Report attached to this report.
4. DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors have given declaration that they meet the criteria of independence with relevant integrity, expertise, experience and proRs.ciency as provided under Section 149(6) read with Schedule IV of the Act and Regulation 16 (1)(b) of the Listing Regulations including given declaration for inclusion of name in the data bank, being maintained with‘The Indian Institute of Corporate Affairs? in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014, as amended and have also complied with the Code of conduct for all Board Members and Senior Management.
Further, Independent Directors confirmed that none of among them has been debarred or disqualified from being appointed or continuing as a Director of the Company by the Securities and Exchange Board of India /Ministry of Corporate Affairs or any such statutory authority and declared that they have stayed in India for a total period of not less than one hundred and eighty-two days during the financial year.
5. DIRECTORS? RESPONSIBILITY STATEMENT
In compliance of Section 134(3)(c) read with section 134(5) of the Companies Act, 2013, your Directors, based on representation received from management, confirms that:
• in the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
• the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2022 and of the profit and loss of the Company for the year ended March 31, 2022;
• the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
• the Directors have prepared the annual accounts on a going concern basis;
• the Directors have laid down adequate internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.
Based on the framework of internal financial controls (including the Control checks) for financial reporting and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditor and the reviews performed by the management and the relevant Board committees, including the Audit Committee, the Board is of the opinion that the Company?s internal financial controls were adequate and effective during the Financial Year 2021-22; and
• the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
1. STATUTORY AUDITORS
M/s Rajeev Singal & Co., Chartered Accountants (Firm Registration No. 008692C), were appointed as Statutory Auditors of the Company by members of the Company for a first term of five years to hold office till conclusion of the ensuing 22nd AGM.
Pursuant to the provisions of Section 139 (2) of the Act, an audit firm can be appointed as an Auditor of the Company for maximum two terms, each term of maximum five consecutive years. The Board is of the opinion that continuation of M/s Rajeev Singal & Co.,
Chartered Accountant, as Statutory Auditors will be best suited to handle the scale, diversity and complexity associated with the audit of the financial statements of the Company and therefore, the members are requested to consider their reappointment as Statutory Auditors of the Company, for a second term of consecutive five years, from the conclusion of this 22nd Annual General Meeting, till the conclusion of 27th Annual General Meeting to be held in the calendar year 2027, at such remuneration mutually agreed and approved by the Board in their meeting held on May 20, 2022. The Company has received a confirmation from the Statutory Auditors to the effect that their reappointment, if made, will be in accordance with the limits specified under the Companies Act, 2013 and the firm satisfies the criteria specified in Section 141 of the Companies Act, 2013 read with Rule 4 of Companies (Audit & Auditors) Rules 2014.
The Auditors? Report on the financial statements of the Company for the financial year ended March 31, 2022 is unmodified i.e. it does not contain any qualification, reservation or adverse remark or disclaimer. The Statutory Auditors have not reported any fraud under Section 143(12) of the Companies Act, 2013. Hence, no detail is required to be disclosed under Section 134(3)(ca) of the Companies Act, 2013. The Auditors? Report is enclosed with the financial statements forming part of the annual report.
2. INTERNAL AUDITORS i) M/s Svaraj & Associates, Chartered Accountants (Firm Registration No. 014203N) have been appointed as Internal Auditors for the financial year 2022-23 for all the Units except Bharuch Unit of the Company. ii) M/s Pankaj K. Goyal & Co., Chartered Accountants (Firm Registration No.006885C) have been appointed as Internal Auditors for the financial year 2022-23 for audit of Bharuch Unit of the Company.
They will perform the duties of Internal Auditors of the Company and their report will be placed before the Audit Committee and Board of Directors on a time to time basis.
3. COST AUDITORS
The Company is required to maintain cost records as specified by the Central Government as per Section 148(1) of the Companies Act, 2013 ("the Act") and the rules framed thereunder, and accordingly, the Company has made and maintained such cost accounts and records.
The Board on recommendation of the Audit Committee has appointed M/s MM & Associates, Cost Accountants (Firm Registration No. 000454), as the Cost Auditors for auditing the cost accounts of your Company, being eligible, to conduct Cost Audits for the products covered under section 148 of Companies Act, 2013 read with Companies (Cost records and Audit) Rules, 2014 for the financial year 2022-23. The Company has received their written consent and confirmation that the appointment will be in accordance with the applicable provisions of the Act and rules framed thereunder.
The remuneration payable to Cost Auditors has been approved by the Board of Directors on the recommendation of the Audit Committee and in terms of the Act and Rules therein. The Members are therefore requested to ratify the remuneration payable to M/s MM & Associates as set out in the Notice of the 22nd AGM of the Company.
During the year, the Cost Audit Report from M/s Rahul Jain & Associates, ex-Cost Accountants (Firm Registration No.101515), of your Company was filed with the Central Government for the financial year ended March 31, 2021. There has been no qualification, reservations, adverse remark or disclaimer in the Cost Audit?s Report submitted for FY 2021-22. The Cost Audit Report for FY 2021-22 will be filed with the Central Government in due course.
4. SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. RMG & Associates, Company Secretaries, (Firm Registration Number: P2001DE16100), to undertake the Secretarial Audit of the Company for FY 2021-2022. Further, the Board has appointed M/s. DMK Associates, Company Secretaries, (Firm Registration Number: P2006DE003100) as Secretarial Auditors of the Company for FY 2022-23.
The Secretarial Audit Report issued by the aforesaid Secretarial Auditors is attached as Annexure ‘D? to this Report and contains the following qualification, reservation, observation, disclaimer or adverse remark as follows:
• There was an accidental delay by two days in submitting the disclosure with respect to Related Party Transactions for the Half Year ended 31st March, 2021 with the Stock Exchanges and consequently the Rs.ne was levied by SEBI as per the SEBI SOP Circular no. SEBI/HO /CFD/CMD/CIR/P/2020/12 dated January 22, 2020 and the same was paid by Company.
• The Company has identified certain violations of the code of conduct ("Code"), inadvertently done by the designated persons under SEBI PIT Regulations, and the matter was placed before the Audit Committee and the Board for taking disciplinary actions against such designated persons. In this regard, necessary actions were taken, fines were imposed and reporting has been made to the stock exchanges, pursuant to SEBI circular no. SEBI/HO/ISD/ISD/CIR/ P/2020/135 dated July 23, 2020.
• Further, the Company has identified some inadvertent entries at System Driven Disclosures for Designated Persons on Stock Exchange, for which Company is taking necessary action for its exposition.
• The Company has clarified and elucidated to the concerned Stock Exchanges that the inadvertent delay caused at the time of COVID19 outbreak and due to COVID restrictions. However, with intent to make submission on time, company tried hard to comply this on time and achieved to file it on last day on which its ought to be filed as per us as the company has gain understanding and interpreted the law differently and filed the disclosure accordingly on time as per the Company?s interpretation of law i.e. the disclosure under Regulation 23(9) shall be filed with in 30 days of publication means newspaper publication and the Company has published its Extract of Audited Financial Results in newspapers on May 24, 2021 and consequently filed the Disclosure under Regulation 23(9) on June 23, 2021. The Company?s intention is never to disregard law. However, your Company has deposited the amount of Rs.ne imposed in context of delay in compliance of Disclosure under Regulation 23(9) of Listing Regulations to the concerned stock exchanges.
• The Company has observed few inadvertent violations done by the designated persons under Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 ("SEBI PIT Regulations") and the matter was placed before the Audit Committee and the Board for taking disciplinary actions against such designated persons. In this regard, necessary actions were taken, fines were imposed and reporting has been made to the stock exchanges adequately in pursuant to the SEBI circular no. SEBI/HO/ISD/ISD/CIR/ P/2020/135 dated July 23, 2020.
• The Management of the Company submits that with respect to the inadvertent entries at System Driven Disclosures for Designated Persons on Stock Exchanges, the Company understand those entries majorly reflecting information which were intimated or either not applicable to intimate. However, the Company has taken necessary action for its exposition.
The management of the Company assures you to comply with all the provisions of the applicable laws in true spirit in future.
1. CORPORATE GOVERNANCE AND CODE OF CONDUCT
As a responsible corporate citizen, the Company is committed to maintain the highest standards of Corporate Governance and believes in adhering to the best corporate practices prevalent globally.
The declaration of Chief Executive Officer (CEO) confirming compliance with the ‘Code of Conduct? by the members of the Board of Directors and Senior Management Personnel of the Company is forming part of the Corporate Governance Report.
A detailed Report on Corporate Governance pursuant to the requirements of Regulation 34 read with Schedule V of the Listing Regulations is attached as Annexure-‘E? to the Board?s Reportand forms part of this Report. A certificate from the Statutory Auditor confirming compliance with the conditions of Corporate Governance, as stipulated in Clause E of Schedule V to the Listing Regulations is attached to the Corporate Governance Report.
2. ANNUAL RETURN
Pursuant to the provisions of Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return (MGT-7) of the Company as on March 31, 2022 is available on Company?s website and can be accessed at https://www.gulshanindia.com/pdf/22annualmeeting/ Annual-Return.pdf.
3. WHISTLE BLOWER POLICY-VIGIL MECHANISM
Pursuant to the provisions of Section 177 of the Act and Regulation 22 of Listing Regulations, the Company has adopted a Vigil Mechanism / Whistle Blower Policy to provide a platform to the Directors and Employees of the Company to raise concerns regarding any irregularity, misconduct or unethical matters / dealings within the Company. The details of Vigil Mechanism / Whistle Blower Policy adopted by the Company have been explained in the Corporate Governance Report, forming integral part of this report. The Company has amended the policy to insert the email id created for purpose of raising and reporting genuine concern through the designated email id. The revised policy is available on website of the Company at https://www.gulshanindia.com/pdf/policy/whistle-blower-policy-vigil-mechanism.pdf.
4. COMMITTEE RECOMMENDATIONS
During the year under review, the Board of Directors has accepted all recommendations of the Committees of the Board of Directors, which were mandatorily required to be made.
5. NOMINATION AND REMUNERATION POLICY
The Company has revised its Nomination and Remuneration Policy for the Directors, KMPs and other employees, pursuant to the provisions of Section 178 of the Act and Regulation 19 read with Schedule II, Part D of the Listing Regulations. The revised policy is available on website of the Company at https://www.gulshanindia.com/pdf/policy/nNomination-and-Remuneration-Policy.pdf and the salient features of policy is elaborated in the Corporate Governance Report.
6. RISK MANAGEMENT
Your Company has a well-defined risk management framework in place to ensure appropriate identification, measurement, mitigation and monitoring of business risks and challenges across the Company, GPL has a robust organizational structure for managing and reporting risks. The Company?s success as an organisation largely depends on its ability to identify opportunities and leverage them while mitigating the risks that arise while conducting its business. During the year, Company has also adopted a policy on Risk Management which outlines the program implemented by the Company to ensure appropriate risk management within its systems and culture.
7. BOARD AND COMMITTEES
As required under the Act, and the Listing Regulations, the Company has constituted these statutory committees of the board: the Audit Committee, the Corporate Social Responsibility Committee, the Nomination, Remuneration and Compensation Committee, the Stakeholders Relationship Committee, the Risk Management Committee. The Other board committees are: Allotment of Share Committee and the Finance Committee.
A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report.
VII. MANAGEMENT DISCUSSION & ANALYSIS
Management Discussion and Analysis Report, as stipulated under Regulation 34(2)(e) of the Listing Regulations, is presented in a separate Section and forming part of this Annual Report.
VIII. INTERNAL FINANCIAL CONTROLS
The Company has internal financial controls commensurate to the size and nature of its business. The Company has policies and procedures in place for ensuring orderly and efficient conduct of its business and operations including adherence to the Company?s policies, the safeguarding of its Assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The details of internal control systems are given in the Management Discussion and Analysis Report attached as Annexure ‘F? to this Report.
An independent internal audit function is an important element of the Company?s internal control systems. This is executed through an internal audit programme and periodic review by the management and the Audit Committee.
During the year under review, two external firms viz. M/s Pankaj K. Goyal & Co., & M/s Svaraj & Associates, Chartered Accountants, are engaged as Internal Auditors of the Company, with the audit processes and procedures.
The Audit Committee has satisfied itself on the adequacy and effectiveness of the internal financial control systems laid down by the management. The Statutory Auditors have confirmed the adequacy of the internal financial control systems over financial reporting.
IX. BUSINESS RESPONSIBILITY REPORT
Your Company is committed to grow the business responsibly with a long term perspective as well as to the nine principles enshrined in the National Voluntary Guidelines (NVGs) on social, environmental and economic responsibilities of business, as notified by the Ministry of Corporate Affairs, Government of India, in July, 2011.
The Business Responsibility Report ("BRR") of the Company as per the requirements of Regulation 34(2)(f ) of the Listing Regulations describing the initiatives taken by the Company from an environmental, social and governance perspective, is attached as Annexure-‘G? to Board?s Reportand forms part of this Report.
X. CAUTIONARY STATEMENT
Statements in the Board?s Report and the Management Discussion & Analysis Report describing the Company?s objectives, expectations or future outlook may be forward looking within the meaning of applicable laws and regulations. Actual results may differ from those expressed in the statements.
Your Company?s organizational culture upholds professionalism, integrity and continuous improvement across all functions, as well as efficient utilization of the Company?s resources for sustainable and profitable growth.
Your Directors hereby acknowledge the dedication, loyalty, hard work, solidarity and commitment rendered by the employees of the Company during the year. They would also like to place on record their appreciation for the continued co-operation and support received by the Company during the year from bankers, financial institutions, government authorities, business partners, shareholders, vendors, customers and other stakeholders without whom the overall satisfactory performance would not have been possible and for the confidence reposed in the Company and its management and look forward to their continued support.
|For and on behalf of the Board of Directors|
|Dr. Chandra Kumar Jain|
|Delhi, August 9, 2022||Chairman and Managing Director|
Gold/NCD/NBFC/Insurance and NPS
Gold/NCD/NBFC/Insurance and NPS