Your Directors present this 44th Annual Report of the Company on thebusiness and operations of the Company together with Standalone and Consolidated AuditedFinancial Statements (Ind AS based) for the Financial Year ended 31st March 2017 and thereport of the Auditors thereon.
PERFORMANCE AND FINANCIAL RESULTS
The performance of the Company during the Financial Year 2016-17 was asfollows:
|FINANCIAL RESULTS || || || || |
| || || || |
(Rs. in Lakhs)
|Particulars || |
| || |
|Sales (excluding Excise Duty) and Other Income || |
|Profit Before Interest Depreciation and Taxation (PBIDT) || |
|Profit Before Taxation (PBT) || |
|Less: Provision for Taxation || |
|Profit After Taxation (PAT) || |
|Other Comprehensive Income || |
|Total Comprehensive Income || |
|Proposed Dividend || |
|Tax on Proposed Dividend || |
|Transferred to General Reserve || |
|Earning Per Share || |
|Dividend Per Share || |
|Book Value Per Share || |
RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS
The highlights of the Company s performance are as under:
At Standalone Level
The Company has achieved highest ever sales (inclusiveExcise Duty) of Rs.2255.34 crores during the year 2016-17 as against Rs.2178.62 croresin the Previous Year.
The Company has achieved highest ever Profit Before Tax ofRs.381.78 crores and Profit After Tax of Rs.308.10 crores during the year 2016-17.
Total production of all the products has increased by 5.47% to1550572 MT during the year 2016-17 as against 1470197 MT in Previous Year.
Other Operating income has increased by Rs.7.39 crores toRs.47.17 crores during the year 2016-17 as against Rs.39.78 crores in Previous Year.
Other income has increased by Rs.9.70 crores to Rs.55.92 croresduring the year 2016-17 as against Rs.46.22 crores in Previous Year.
Gross Profit has increased by 33% to Rs.505.54 crores during theyear 2016-17 from Rs.380.07 crores in Previous Year.
Profit Before Tax has increased by 45% to Rs.381.78 croresduring the year 2016-17 from Rs.262.70 crores in Previous Year.
Profit After Tax has increased by 40% to Rs.308.10 crores duringthe year 2016-17 from Rs.219.89 crores in Previous Year.
At Consolidated Level
The Financial Year 2016-17 is a first year in which consolidation ofthe Financial Statements of the Subsidiary Company viz. GACL-NALCO Alkalies &Chemicals Pvt. Ltd. has been done. Therefore the figures are not comparable this year.From next year this issue will not be arise there. Following comparison is based onaudited details :
The Consolidated Gross Profit has increased by 33% to Rs.504.33crores during the year 2016-17 from Rs.379.78 crores in Previous Year.
The Consolidated Profit Before Tax has increased by 45% toRs.380.57 crores during the year 2016-17 from Rs.262.41 crores in Previous Year.
The Consolidated Profit After Tax has increased by 40% toRs.307.30 crores during the year 2016-17 from Rs.219.60 crores in Previous Year.
Your Directors are glad to inform you that during the Financial Year2016-17 the Company has achieved highest ever sales in spite of the stiff competition andadverse market conditions of Chlorine during the year. The Company has initiated variouscost control measures due to which the Profit Before Tax for the Financial Year hasincreased to Rs.381.78 crores from Rs.262.70 crores in the Previous Year registering agrowth of 45%.
ADOPTION OF IND AS
The Company has adopted the Indian Accounting Standards (Ind AS) from1st April 2016. The financial statements have been prepared in accordance with IndianAccounting Standards (Ind AS) as notified under the Companies (Indian AccountingStandards) Rules 2015. The Company has presented a reconciliation from the presentationof financial statements under previous GAAP to Ind AS of Shareholders equity as at 31stMarch 2016 and 1st April 2015 and of the comprehensive net income for the year ended31st March 2016 and 1st April 2015.
Your Directors are glad to recommend a Dividend @ Rs.5.00 per share(i.e. 50%) on 73436928 Equity Shares of Rs.10/- each fully paid up for the year ended31st March 2017.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGSAND OUTGO
Information pertaining to conservation of energy technologyabsorption foreign exchange earnings and outgo as required under Section 134(3)(m) of theCompanies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is givenin the Annexure - 1 to this report.
SUBSIDIARY JOINT VENTURE OR ASSOCIATE COMPANY
The Company and National Aluminium Company Limited (NALCO) aGovernment of India Enterprise (a Navratna company) have jointly incorporated a JVCompany viz. GACL-NALCO Alkalies & Chemicals Pvt. Ltd. (GNAL) (CINU24100GJ2015PTC085247) on 4th December 2015 for setting up 266667 MTPA (100%) CausticSoda Plant and 130 MW Coal based Power Plant at Dahej Gujarat. The Company holds 60% andNALCO holds 40% in JV Company. Accordingly GNAL is a subsidiary of the Company.
The Managing Director of the GACL is the Chairman of the JV Company.The Managing Director of the GACL does not draw any commission or any remuneration fromGNAL except the Sitting Fees of Rs.2500/- and incidental expenses of Rs.2500/- permeeting for attending the meetings of the Board of Directors or Committees thereof. TheSitting Fees are paid by GNAL directly to GACL.
As per Section 129(3) of the Companies Act 2013 read with Rule 5 ofthe Companies (Accounts) Rules 2014 a separate statement containing the salient featuresof financial statement of the Joint Venture / Subsidiary Company in Form AOC-1 forms partof the Annual Report.
In accordance with the provisions of Section 136 of the Companies Act2013 the Annual Report of the Company containing therein its standalone and consolidatedfinancial statements have been placed on the website of the Company at www.gacl.comFurther the Audited Annual Accounts of the GNAL are also placed on the website of theCompany at www.gacl.com The Interested Shareholders may obtain a physical copy of theaudited financial statements of the Subsidiary Company by sending a request to the CompanySecretary at the Company s Registered Office.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has in place adequate internal financial controls withreference to financial statements. During the year such controls were tested and noreportable material weakness in the design or operation of Internal Control System wasobserved. As per the relevant provisions of the Companies Act 2013 the StatutoryAuditors have expressed their views on the adequacy of Internal Financial Control in theirAudit Report.
Your Company s financial discipline and prudence is reflected in thestrong credit rating described by rating agency as per the following particulars:
|Instrument ||Rating ||Rating ||Outlook Remarks |
| ||Agency || || |
|Long Term ||Credit ||CARE ||Stable outlook This rating is |
|Bank ||Analysis & ||AA+ ||for Caustic considered to have |
|Facilities ||Research Ltd. (CARE) ||(Double A Plus) ||Soda industry high degree of safety & GACL being regarding timely industry leader servicing of financial in domestic obligations. Such market is instruments carry likely to benefit low credit risk. |
|Short Term Bank Facilities ||Credit Analysis & Research Ltd. (CARE) ||CARE A1+ (A One Plus) ||from various This rating is factors. considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk. |
The Company has constituted Internal Risk Management Committeecomprising of Senior Executives of the Company who are heading respective departments viz.Finance Manufacturing Marketing Purchase Project Safety Information Technology HRSecretarial and Legal functions. The Executive Director (Finance) & CFO is theChairman of the Internal Risk Management Committee. The Internal Risk Management Committeereports to the Managing Director and the risks identified by the said Committee along withproposed mitigation actions are discussed periodically with the Managing Director.
As per the Regulation 21 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 ( Listing Regulations ) every Company (top 100listed companies by market capitalization) is required to constitute a Risk ManagementCommittee of Directors which may also include the Senior Executives of the Companyhowever the majority should be the Directors. The Chairperson of the Risk ManagementCommittee shall be Member of the Board of Directors of the Company.
As a part of good Corporate Governance practice the Board of Directorsat its 353rd Meeting held on 11th February 2016 has constituted the Risk ManagementCommittee of Directors comprising of :
1. Shri J N Godbole Chairman;
2. Shri Rajiv Lochan Jain; and
3. Shri P K Gera IAS.
The said Risk Management Committee has been renamed as RiskManagement-cum-Safety Committee w.e.f. 10th November 2016 by the Board. The existingInternal Risk Management Committee of Senior Executives of the Company continues tofunction. Out of the various risks identified by the Internal Risk Management Committeethe Audit Committee has identified certain critical risks which are reviewed by the RiskManagement-cum-Safety Committee Audit Committee and by the Board of Directors onquarterly basis. A Report on the steps taken to mitigate those critical risks is alsosubmitted to the Risk Management-cum-Safety Committee Audit Committee and the Board ofDirectors.
VIGIL MECHANISM / WHISTLE BLOWER MECHANISM
The Company has formulated a Vigil Mechanism-cum-Whistle Blower Policy( Policy ) as per the requirements of Section 177 of the Companies Act 2013 andRegulation 22 of the Listing Regulations. The Policy is applicable to all Directors andEmployees of the Company.
As per the Policy protected disclosures can be made by whistle blowerto the Chairman of the Audit Committee. During the Financial Year 2016-17 no unethicaland improper practice or any other wrongful conduct in the Company by any person wasreported under the said Policy.
The Vigil Mechanism-cum-Whistle Blower Policy may be accessed on theCompany s website at the link :http://www.gacl.com/public_html/new/policy/VGIL_MECHANISM_CUM_WHISTLE_BLOWER_POLICY.pdf
CORPORATE SOCIAL RESPONSIBILITY
As per the provisions of Section 135 read with Schedule VII of theCompanies Act 2013 and the Companies (Corporate Social Responsibility Policy) Rules2014 the Company has constituted Corporate Social Responsibility (CSR) Committee andformulated Corporate Social Responsibility Policy (CSR Policy). The composition of CSRCommittee is given in the Corporate Governance Report.
The CSR Committee has formulated and recommended to the Board a CSRPolicy identifying the activities to be carried out by the Company and the said CSR Policyhas been approved by the Board of Directors at their Meeting held on 23.07.2014. The Boardof Directors at their Meeting held on 26.05.2015 have approved some modifications in theCSR Policy including to undertake CSR activities through GACL Education Society (GES). GESis a Society registered under the Societies Registration Act 1860 and also under theBombay Public Trust Act 1950. It was formed with an objective for promotion anddevelopment of Education in various fields and branches of Engineering ManagementTechnology Information & Communication etc. and carry out such other projects havingsimilar objects.
GES has altered its object clause so as to carry out various CSRactivities of the Company (GACL) for charitable purpose. The details about variousactivities carried out by the Company under CSR directly and through GES are given in theManagement Discussion and Analysis which forms part of this Annual Report.
The CSR Policy may be accessed on the Company s website at the link:http://www.gacl.com/public_html/new/ pdf/CSR_POLICY.pdf As per the provisions of Section135 of the Companies Act 2013 the 2% of the average net profits of the last threefinancial years was Rs.4.58 crores. Accordingly the Company was required to spend Rs.4.58crores towards carrying out various CSR activities during the Financial Year 2016-17. TheCompany had spent Rs.3.46 crores towards various CSR activities during the Financial Year2016-17. The Company has paid Rs.1.37 crores to GACL Education Society for carrying outvarious CSR activities. Thus the Company has spent total Rs.4.83 crores against thestatutory requirement of Rs.4.58 crores towards CSR activities during the Financial Year2016-17.
The Annual Report on CSR activities for the Financial Year 2016-17 isannexed herewith as Annexure 2.
DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Appointment / Reappointment /Cessation of Directors & Key Managerial Personnel
Shri G R Aloria IAS (Retd.) has resigned as Chairman of the Companyvide letter dated 11.08.2016 due to his superannuation from the services as ChiefSecretary to the Government of Gujarat.
Shri Arvind Agarwal IAS and Shri P K Taneja IAS (Retd.)Non-Executive Directors have also resigned w.e.f. 29.08.2016.and 25.07.2017 respectively.The Board placed on record its deep appreciation of the valuable services rendered to theCompany by Shri G R Aloria IAS (Retd.) as Chairman and Shri Arvind Agarwal IAS and ShriP K Taneja IAS (Retd.) as Directors of the Company.
The Government of Gujarat vide Resolution No. GAC/ 11-2006/4253/E dated31.08.2016 appointed Dr. J N Singh IAS Chief Secretary to Government of Gujarat asChairman of the Company as per the Articles of Association of the Company.
Pursuant to Section 161(1) of the Companies Act 2013 Shri Anil MukimIAS and Shri M K Das IAS have been appointed by the Board as Additional Directorseffective from 15.10.2016 and 03.08.2017 respectively who shall hold office up to thedate of this Annual General Meeting and their appointment as Directors liable to retire byrotation are proposed at this Annual General Meeting.
Shri P K Gera IAS Managing Director of the Company is not liable toretire by rotation as per the provisions of the Articles of Association of the Companysince he is appointed by the Government of Gujarat. However this year no other Directoris retiring by rotation and to comply with the provisions of Section 152 of the CompaniesAct 2013 it is proposed that Shri P K Gera IAS may retire as Director and may bereappointed at this Annual General Meeting as a Director. His terms and conditions forappointment as Managing Director does not change.
Thus as on the date of this Report there are eight (8) Directors onthe Board of the Company. The Chairman and four (4) Independent Directors areNon-Rotational Directors two (2) Directors viz. Shri Anil Mukim IAS and Shri M K DasIAS are Rotational Directors who will be first time appointed / regularized at this AnnualGeneral Meeting by shareholders and Shri P K Gera IAS as Director will retire by rotationat this Annual General Meeting and being eligible has offered himself for re-appointmentas Director.
A brief resume of these three Directors viz. Shri P K Gera IAS ShriAnil Mukim IAS and Shri M K Das IAS forms part of the Notice of this Annual GeneralMeeting.
Pursuant to provisions of Section 203 of the Companies Act 2013 ShriP K Gera IAS Managing Director was also appointed by the Board as Key ManagerialPersonnel of the Company effective from 19.02.2016. Dr. H B Patel Chief Financial Officerand Shri Sanjay S Bhatt Company Secretary are the Key Managerial Personnel of the Companyeffective from 14.05.2014.
The Company has received necessary declarations from the IndependentDirectors under Section 149(7) of the Companies Act 2013 that he / she meets thecriteria of independence laid down in Section 149(6) of the Companies Act 2013 andRegulation 25 of the Listing Regulations.
B. Board Evaluation
Pursuant to relevant provisions of the Companies Act 2013 and ListingRegulations the Board has carried out an annual performance evaluation of its ownperformance the Directors individually as well as the evaluation of the working of itsCommittees. The manner in which the evaluation has been carried out has been explained inthe Corporate Governance Report.
C. Nomination and Remuneration Policy
The Board has on the recommendation of the Nomination-cum-RemunerationCommittee formulated a Nomination & Remuneration-cum-Board Diversity
Policy for selection appointment of Directors and Senior Managementand their remuneration.
Information about the Policy is provided in the Corporate GovernanceReport.
During the year Five (5) Board Meetings and Four (4) Audit CommitteeMeetings were convened and held. The details of which are given in the CorporateGovernance Report. The intervening gap between the Meetings was within the periodprescribed under the Companies Act 2013 and Listing Regulations. Further the compositionand terms of reference of Audit Committee and other Committees are given in the CorporateGovernance Report.
A. Internal Auditors
M/s. Talati & Talati Chartered Accountants Vadodara wereappointed as Internal Auditors for conducting Internal Audit of the Company for the periodfrom 1st July 2016 to 30th June 2017.
The Board of Directors of the Company at its Meeting held on 26th May2017 re-appointed M/s. Talati & Talati Chartered Accountants Vadodara as InternalAuditors for conducting Internal Audit of the Company for the period from 1st July 2017to 30th June 2018. The Internal Auditors independently evaluate the internal controlsadherence to and compliance with the procedures guidelines and statutory requirements.The Audit Committee of Directors periodically reviews the reports of the Internal Auditorsand the corrective actions if any are taken by the Management.
B. Statutory Auditors
M/s. Deloitte Haskins & Sells Chartered Accountants Vadodara(Firm Regn. No. 117364W) were appointed as the Statutory Auditors of the Company from theconclusion of 41st Annual General Meeting till the conclusion of 46th Annual GeneralMeeting i.e. for a period of five years (subject to ratification of the appointment by themembers at every AGM). You are requested to ratify the appointment of M/s. DeloitteHaskins & Sells Chartered Accountants Vadodara as Statutory Auditors from theconclusion of 44th Annual General Meeting till conclusion of 45th Annual General Meetingas per the provisions of Section 139 of the Companies Act 2013.
The Board of Directors of the Company at its Meeting held on 26th May2017 have approved the reappointment of M/s. Deloitte Haskins & Sells CharteredAccountants Vadodara as Statutory Auditors of the Company for the Financial Year 2017-18.
Accordingly a Resolution for ratification of appointment of theStatutory Auditors for the Financial Year 2017-18 is placed at relevant item of theNotice.
Your Directors recommend the same for your ratification and approval.
The Auditor s Report to the Members for the year under review does notcontain any qualification.
C. Cost Auditors
The Board of Directors of the Company at its Meeting held on 26th May2017 has appointed M/s. R.K. Patel & Co. Cost Accountants Vadodara (Firm Regn. No.14115) as Cost Auditors for Financial Year 2017-18 as per the provisions of the CompaniesAct 2013 to conduct the Audit of Cost Records maintained by the Company at theremuneration of Rs.495000/- plus taxes as applicable.
As per the provisions of the Companies Act 2013 your Directorspropose the relevant item of the Notice in respect of remuneration to the Cost Auditorsfor the Financial Year 2017-18 for your ratification and approval.
D. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed M/s. Samdani Kabra & Associates Practicing Company Secretariesto undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditorsis annexed herewith as Annexure - 3. The Report does not contain any qualification.
The Company has been following the principles and practices of goodCorporate Governance and has ensured compliance of the requirements stipulated under theListing Regulations.
A detailed report on Corporate Governance along with Certificate issuedby Practicing Company Secretary in terms of provisions of the Listing Regulations isattached herewith.
BUSINESS RESPONSIBILITY REPORT
As per the provisions of the Listing Regulations BusinessResponsibility Report (BRR) containing initiatives taken by the Company fromenvironmental social economic responsibilities of business and governance perspective isannexed herewith as Annexure - 4 as part of this Annual Report. The Company hasvoluntarily published BRR for the F.Y. 2016-17 which has been approved by the Board ofDirectors at its 362nd Meeting held on 03.08.2017.
PARTICULARS OF EMPLOYEES
The information pertaining to remuneration and other details ofemployees as required pursuant to Section 197 of the Companies Act 2013 read with Rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended are provided in the Annexure - 5. Further there was no employee holding 2% ormore of the Equity Shares of the Company during the Financial Year 2016-17.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Audit Committee of Directors at its Meeting held on 29th March2016 has accorded omnibus approval to execute transactions with related parties up to thevalue of Rs.1 Crore. During the Financial Year the transactions entered into by theCompany with Related Parties were in the ordinary course of business at arm s length priceand within the omnibus approval granted by the Audit Committee. The Company has notentered into contracts / arrangements / transactions with Related Parties which could beconsidered material in accordance with Section 188 of the Act read with the Companies(Meetings of Board and its Powers) Rules 2014 and the Policy of the Company on RelatedParty Transactions.
Since all the contracts / arrangements / transactions with RelatedParties during the year were in the ordinary course of business and the same were at arm slength as well as under the special omnibus approval route and not being materialtransaction as defined under the Act / Rules disclosure in Form AOC-2 under Section134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 is notrequired.
The Policy on Related Party Transactions and Material Related PartyTransactions as approved by the Board of Directors may be accessed on the Company swebsite at the link : h t t p : / / w w w . g a c l . c o m / p u b l i c _ h t m l / n ew / p o l i c y / related_party_tran_policy-1.pdf Your Directors draw attention of theMembers to Note No. 37 to the Financial Statement which sets out Related Partydisclosures.
LOANS GUARANTEES AND INVESTMENTS
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the Note No. 5 6 717 21 & 42 (i)(e)(ii) of the Notes to the Financial Statements.
The Company has taken adequate insurance for all its properties. TheCompany has also taken necessary insurance cover as required under the Public LiabilityInsurance Act 1991.
LISTING REGULATIONS COMPLIANCE
Your Company s Equity Shares are listed on BSE Ltd. and National StockExchange of India Ltd. (NSE) and their listing fees for the Financial Years 2016-17 and2017-18 have been paid and the provisions of the Listing Regulations have been compliedwith.
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return as required under Section 134(3)(a)of the Companies Act 2013 read with Rule 12(1) of the Companies (Management andAdministration) Rule 2014 is annexed herewith as Annexure - 6.
DIVIDEND DISTRIBUTION POLICY
The Board of Directors of the Company at its Meeting held on 26th May2017 has adopted Dividend Distribution Policy effective from 26th May 2017 which isavailable on the Company s website at the link http://www.gacl.com/public_html/new/policy/Dividend_Distribution_Policy.pdf As per the Regulation the saidDividend Distribution Policy should also required to be disclosed in the Annual Report ofthe Company which is annexed herewith as Annexure 7.
Your Directors state that no disclosure or reporting is required inrespect of the following items since there were no transactions in these matters and/orthey are not applicable to the Company during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividendvoting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of theCompany under ESOS.
4. No significant or material orders were passed by the Regulators /Courts or Tribunals which would impact the going concern status of the Company and itsfuture operations.
Your Directors further state that your Company has constitutedprevention of Sexual Harassment Committee named as Internal Complaint Committee-cum-GenderEquality Committee and during the year under review no complaint was received. There wasno case pending under the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors state that: i) in the preparation of the Annual Accountsfor the Financial Year ended 31st March 2017 the applicable accounting standards havebeen followed; ii) the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31st March 2017and of the profit of the Company for the year ended on that date; iii) the Directors hadtaken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; iv) the Directors haveprepared the annual accounts on a going concern basis; v) the Directors have laid downinternal financial controls to be followed by the Company and that such internal financialcontrols are adequate and are operating effectively; and vi) the Directors have devisedproper systems to ensure compliance with the provisions of all applicable laws and thatsuch systems are adequate and operating effectively.
MANAGEMENT DISCUSSION AND ANALYSIS
A report on Management Discussion and Analysis forms part of the Boards Report and it deals inter-alia with the Business Operations & FinancialPerformance Research
& Development Expansion & Diversification Risk ManagementMarketing Strategy Safety & Environment Corporate Social Responsibility MaterialDevelopment in Human Resources etc.
The Board expresses its gratitude and appreciation to the Government ofIndia Government of Gujarat Financial Institutions Insurance Companies Banks otherbusiness associates Promoters Shareholders and employees of the Company for theircontinued support. The Directors also gratefully acknowledge all stakeholders of theCompany viz. customers members dealers vendors banks and other business partners forthe excellent support received from them during the year. The Directors place on recordtheir sincere appreciation to all employees of the Company for their unstinted commitmentsand continued contribution to the Company.
For and on behalf of the Board
Sd/-(Dr. J N SINGH IAS) CHAIRMAN
Place: Gandhinagar Date : 03.08.2017
ANNEXURE 1 to Board's Report
Particulars of Energy Conservation Technology Absorption and ForeignExchange Earnings and Outgo required under Section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 :
A. CONSERVATION OF ENERGY:
(i) Steps taken or impact on conservation of energy:
1. Replacement of old 2nd generation elements with new energy efficient6th generation elements and 5B+ generation elements at Vadodara and Dahej Complexes.
2. recuperator in Replacement of H2 cooler with new H2 KOH Plant.
3. Installation of new PHE of MC I drying tower and hence stoppage ofone 78% circulation pump.
4. Hydrogen Compressor.
Revamping of H2O2
5. Replacement of two cooling tower pumps of higher capacity with samerating motor.
6. Replacement of existing NaCl CDU pump in MC I with lower ratingmotor.
7. pump with PFA lined Replacement of old 98% H2SO4 pump.
8. HPMV fittings have been replaced with LED light fittings at variouslocations.
9. Utilization of vapor condensate of CEU for preparation of SBSsolution instead of DM water.
10. Replacement of 2 x 36W and 1 x 36W Tube light fittings by 18W LEDtype Tube light fittings in CSL
Plant 80W x 125W HPMV well glass fittings with 40W LED type well glassfittings and 250W street light fittings by 56W LED type street light fittings in Plants.
CSL CLM and H2O2
11. Installation of new energy efficient 30 TPH Boiler at CLM plant.
12. Replacement of CEU day tank pumps motors with IE2 type highefficient motor.
13. Replacement of 110 kVAR Capacitor in substation 2 switchyard andaddition of 168 kVAR Capacitor by replacing 180 kVAR series reactor with 303 kVAR seriesreactor in capacitor bank.
14. KVX installed in Boiler No. 3 for steam generation. 15.Installation of Waste Heat Boiler in CLM plant.
(ii) Steps taken by the Company for utilizing alternate sources ofenergy:
The Company had taken up Wind Farm Projects of 14.7 MW capacity atKuchhadi Dist. Porbandar Gujarat which was commissioned in March 2017. The totalinstalled Wind Energy Generation capacity of the Company has increased to 171.45 MW afterthis installation.
The Company has also taken up 15 MW Solar Power Project for captive useand to meet the Solar Renewable Purchase Obligations. The Project is expected to becommissioned during the Financial Year 2017-18.
(iii) The Capital Investment on Energy Conservation equipments:
During the Financial Year 2016-17 the Company has invested Rs.134.73crores as Capital Investment on Energy Conservation equipments and saving of Rs.31.78crores have been achieved.
B. TECHNOLOGY ABSORPTION
(i) Major efforts made towards technology absorption:
For the production of Caustic Soda in electrolysis process the Companyuses electrolyser elements (anodes and cathodes) imported from Thyssenkrupp Germany. Inan effort to modernize the electrolysis operation the Company has taken up activities forthe replacement of old generation electrolyser elements (Generation I & II) with thelatest new generation VB+ elements both at Vadodara and Dahej Complexes. In its firstphase of such replacement the Company has installed 915 new energy efficient VB+ elementsat Vadodara Complex and 440 such elements at Dahej Complex and the same were successfullycommissioned in a phased manner by February 2017.
The other activities like in depth studies on raw materialintermediate process stages monitoring of liquid & solid discharges and efforts ontheir reduction / value addition continued during the Financial Year. The efforts resultedto absorb the different technologies already in operation.
(ii) The benefits derived like product improvement cost reductionproduct development or import substitute: a. The Company was able to reduce the power costper MT of Caustic Soda by about 10% during the Financial Year. b. The R&D efforts oncaptive consumption of in house developed cooling water treatment formulations cleaningformulations defoamer technical support to other functions re-fabrication of spentcatalyst have resulted into appreciable savings. c. The efforts made on the stabilisationof Sodium Chlorate process have resulted in to the optimum utilisation of plant capacity.
(iii) Information regarding imported technology (imported during lastthree years):
|Details of Technology imported ||Technology Imported from ||Year of Import ||Status |
|Sodium Chlorate ||German technology through their Indian subsidiary M/s. Thyssenkrupp Industrial Solutions Pvt. Ltd. ||September ||Commercial production started since March 2014. |
| || ||2011 || |
|Replacement of 1355 ||German technology ||September ||Commissioned by February 2017 in phase wise manner. |
|(915 + 440) Old ||through their Indian ||2015 || |
|generation elements with ||subsidiary || || |
|Energy Efficient New Generation VB+ Elements at Caustic Soda Plant ||M/s. Thyssenkrupp Industrial Solutions Pvt. Ltd. || || |
(iv) Expenditure incurred on Research and Development:
|Particulars || |
| || |
[Rs. in Lakhs]
|a) Capital || |
|b) Revenue || |
|Total (a + b) || |
C. FOREIGN EXCHANGE EARNINGS AND OUTGO :
1. Activities relating to export initiatives to increase exportsDevelopment of New export markets for Products and Services and Export Plan.
The Company has continued to maintain focus and avail of exportopportunities based on market conditions. During the year under review the Company hasexported goods worth Rs.24138.86 lakhs (FOB Value).
2. Total Foreign Exchange Earned and Used [Rs. in Lakhs]
|Foreign Exchange earned in terms of Actual Inflows || |
|Foreign Exchange outgo in terms of Actual Outflows || |
ANNEXURE 2 to Board's Report ANNUAL REPORT ON CSRACTIVITIES FOR THE FINANCIAL YEAR 2016-17
1. A brief outline of the Company s CSR policy including an overviewof projects or programs proposed to be undertaken and a reference to the web-link to theCSR Policy and projects or programs:
Ever since its inception GACL has been as a conscious corporatecitizen serving the community around its business locations and much before the conceptof CSR got clad into legal framework through Companies Act 2013. GACL took up varioussocio developmental activities in benefit to the community at large in a systematic way.
The present CSR Policy is being documented with a candid objective offormalizing as a document of what is being done by the Company and what would it proposesto do in the time to come. Section 135 read with Schedule VII to the Companies Act 2013and the Companies (Corporate Social Responsibility Policy) Rules 2014 (CSR Rules) hasprescribed the requirements as to what should be the legal and structured framework fordoing the CSR activities.
This Policy which encompasses the Company s philosophy for delineatingits responsibility as a corporate citizen and lays down the guidelines and mechanism forundertaking socially relevant programs for welfare & sustainable development of thecommunity at large is titled as the GACL CSR Policy . The CSR Policy may be accessed onthe Company s website at the link : http://www.gacl.com/public_html/new/pdf/CSR_POLICY.pdf
This Policy shall apply to all CSR initiatives and activities taken upat the various Plant / Business locations of GACL for the benefit of different segments ofthe society.
2. The Composition of the CSR Committee:
The CSR Committee of the Company comprise of :
1. Dr. J N Singh IAS (w.e.f. 10.11.2016) - Chairman of the Committee
2. Shri Anil Mukim IAS (w.e.f. 10.11.2016)
3. Shri J N Godbole
4. Shri P K Gera IAS
5. Shri Arvind Agarwal IAS (Chairman - upto 29.08.2016).
3. Average Net Profit of the Company for last three Financial Years forthe purpose of CSR Expenditure: Computation of profit u/s. 135 read with Section 198 ofthe Companies Act 2013 for the last three Financial Years is as under:
| || || |
[Rs. in Lakhs]
|Particulars || |
|1 Profit u/s. 135 read with Section 198 || |
|2 Average of three years Net Profit || || |
4. Prescribed CSR Expenditure (2% of the amount as in item 3 above):Details of 2% of Average three years Net Profit is as under:
| || |
|Particulars || |
| || |
(Rs. in Lakhs)
|1 Average of three years Net Profit || |
|2 2% of Average three years Net Profit || |
5. Details of amount spent on CSR during the Financial Year: (a) Totalamount to be spent for the Financial Year: Rs.457.70 Lakhs.
(b) Manner in which the amount spent during the Financial Year isdetailed below:
|CSR project or activity identified ||Sector in which the project is covered ||Projects or programs (1) Local area or other (2) Specify the State and district where Projects or Programs were undertaken || |
Amount outlay (budget) project or program wise
Amount spent on the projects or programs Subheads: (1) Direct Expenditure on projects or programs (2) Overheads:
Cumulative expenditure up to to the reporting period
|Amount spent: Direct or through implementing agency |
|A: Education Special Children Interventions || || || || || || |
|1. Uday Shala Project Chhotaudepur and project areas ||in Cl.(ii) Promoting district education including special education and employment enhancing vocation skills specially among children women elderly and differently abled and livelihood enhancement projects. ||Contribution towards Uday Shaala Project at Chhotaudepur by adopting 5 Government schools. || |
|GACL Education Society |
|2. Education and health of Cl.(ii) Promoting Special Children ||education including special education and employment enhancing vocation skills specially among children women elderly and differently abled and livelihood enhancement projects. ||Contribution to Govt. run || |
|GACL Education |
| || ||Home for Mentally || || || ||Society (GES) |
| || ||Deficient Children (HMDC) || || || ||Spandan Medical |
| || ||Spandan Medical Care || || || ||Care Centre Trust |
| || ||Center Trust (Kashiba Children Hospital) Akshar Trust Osmosis Play Centre and Educational Games Library Trust NGOs dealing with learning difficulties such as Dyslexia Cerebral Palsy Autism Down Syndrome Hearing Impairment and other special needs at Vadodara and Bharuch || || || ||(Kashiba Children Hospital) Akshar Trust and Osmosis Play Centre and Educational Games Library Trust |
|3. SEEDS Programme Vocational Development || Cl.(ii) Promoting Skill education including special education and employment enhancing vocation skills specially among children women elderly and differently abled and livelihood enhancement projects. ||Contribution to promote quality vocational education and also to promote entrepreneurship among the youth students from the families of rural and tribal area. || |
|GACL Education Society & Shroff's Foundation Trust |
| || || || || || |
|4. Kanya Kelvani & Shaala Cl.(ii) Promoting Praveshotsav ||education including special education and employment enhancing vocation skills specially among children women elderly and differently abled and livelihood enhancement projects. ||Providing school bag kits during Kanya Kelvani & Shaala Praveshotsav Chhotaudepur. || |
|GACL Education Society |
|5 Grass root Research mapping on various CSR practices ||Cl.(ii) Promoting education including special education and employment enhancing vocation skills specially among children women elderly and differently abled and livelihood enhancement projects. ||For conducting phase wise research in mapping Good CSR practices and publishing a book for same & organizing a CEO Conclave on CSR || |
|GACL Education Society & Centre for Excellence in CSR Faculty of Social Work of The M. S. University of Baroda |
|B: Health Nutrition and Sanitation Interventions || || || || || || |
|1 Sewage Treatment Plant and other related activities in Dahej (Phase II) ||Cl.(i) Eradicating hunger poverty and malnutrition promoting preventive health care and sanitation and making available safe drinking water ||Contribution towards construction of Sewage Treatment Plant at Dahej village of Vagra Taluka || |
|GACL Education Society / Direct |
|C: Support to Local areas / Government Authorities || || || || || || |
|1 Other one-time support to local area and other agencies ||Cl.(i) Eradicating hunger poverty and malnutrition and sanitation and making available safe drinking water. Cl.(ii) Promoting education including special education and employment enhancing vocation skills specially among children women elderly and differently abled and livelihood enhancement projects. ||Contribution to various agencies like Little Kingdom School of Nadiad organized a smart camp at Ranoli and nearby villages of GACL Baroda Complex construction of roads construction of drinking water facility contribution towards procurement of 2 invasive ventilators at Premdas Jalaram Hospital development of CCU and NICU at Ramkrishna Paramhans Hospital and for project "Science on Wheels" || |
|GACL Education Society |
|2 Vadodara By Foot ||Cl. (v) Protection of National heritage art and culture including restoration of building and sites of historical importance and works of art. ||Contribution towards organizing a Heritage Walk and Support for website development of Vadodara By Foot || |
|GACL Education Society |
|D: Management and Administration || || || || || || |
|1 Manpower required at Head quarter ||Cl. (iv) Salaries paid by the companies to regular CSR staff as well as to volunteers of the Company (in proportion to company's time/hours spent specifically on CSR) can be factored into CSR project cost as part of the CSR expenditure. ||Contribution towards salaries || |
|GACL Education Society |
|2 Provide motivated manpower to district administration ||Salaries paid by the companies to regular CSR staff as well as to volunteers of the Company (in proportion to company's time/hours spent specifically on CSR) can be factored into CSR project cost as part of the CSR expenditure. ||Contribution towards salaries of GES Employees deputed at district collector offices at Vadodara and Narmada || |
|GACL Education Society |
|3 Developing Dediapada Taluka ||Cl. (x) Rural Development Projects. ||Contribution towards website Development of Vikassheel Taluka. || |
|GACL Education Society |
|4 Research evaluation IT support and Documentation ||Building CSR capacities of CSR staff and implementing agencies. ||Contribution towards procurement of IT support apparatus for conducting need based assessment surveys and research || |
|GACL Education Society |
|E: Unallocated || || || || || || |
|1 Other Human Development Activities ||Various heads eligible under CSR ||Contribution to various agencies like The M.S. University of Baroda Rotary Club United Way of Baroda Baroda District Basketball association Darshak itihas nidhi Blood donation society Bal Bhavan Society Vadodara Municipal Corporation Yogi Divine Society etc. and towards various social welfare of community || |
|Direct / GACL Education Society |
|2 GACL Education Society ||Various heads eligible under CSR ||Payment to corpus of GACL Education Society for undertaking various CSR activities || |
|GACL Education Society |
|Total : || || || |
6. In case the Company has failed to spend the two percent (2%) of theaverage net profit of the last three Financial Years or any part thereof the Companyshall provide the reasons for not spending the amount in its Board's Report.
Out of the Budget approved by the Board the Company has spent anamount of Rs.4.83 crores towards the CSR activities during the Financial Year 2016-17.Whereas 2% of the Average Net Profits for last three Financial Years as per theprovisions of Section 135 of the Companies Act 2013 comes to Rs.4.58 crores for theFinancial Year 2016-17. Therefore during the Financial Year 2016-17 the Company exceededits CSR spent over the statutory limit.
7. A responsibility statement of the CSR Committee that theimplementation and monitoring of CSR Policy is in compliance with CSR objectives andPolicy of the Company.
The responsibility statement of Corporate Social ResponsibilityCommittee of the Board of Directors of the Company is reproduced below: The implementationand monitoring of Corporate Social Responsibility (CSR) Policy is in compliance with CSRObjectives and Policy of the Company.
|Sd/- || |
|(P. K. Gera IAS) || |
(Dr. J N Singh IAS)
|Managing Director || |
Chairman CSR Committee