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Gujarat Alkalies & Chemicals Ltd.

BSE: 530001 Sector: Industrials
NSE: GUJALKALI ISIN Code: INE186A01019
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OPEN 643.00
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VOLUME 13038
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P/E 22.39
Mkt Cap.(Rs cr) 4,636
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OPEN 643.00
CLOSE 623.55
VOLUME 13038
52-Week high 845.50
52-Week low 304.35
P/E 22.39
Mkt Cap.(Rs cr) 4,636
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Gujarat Alkalies & Chemicals Ltd. (GUJALKALI) - Director Report

Company director report

To

The Members

Your Directors present this 48th 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 March2021 and the report of the Auditors thereon.

PERFORMANCE AND FINANCIAL RESULTS

The financial performance of the Company for the year ended 31st March 2021is summarized below:

FINANCIAL RESULTS - SUMMARY AND HIGHLIGHTS

(Rs. in Lakhs)

Particulars

Standalone

Consolidated

2020-21 2019-20 2020-21 2019-20
Revenue from Operations 242948 272459 242948 272459
Other Income 6746 8978 6746 8978
Profit / (Loss) before Depreciation Finance Cost and Tax Expense 42562 66749 42562 66749
Less: Depreciation / Amortisation / Impairment 17436 16183 17436 16183
Profit / (Loss) before Finance Cost and Tax Expense 25126 50566 25126 50566
Less: Finance Cost 1546 1404 1546 1404
Share of Profit / (Loss) of Joint Venture - - (111) (75)
Profit / (Loss) Before Tax Expense 23580 49162 23469 49087
Less: Tax Expense (Current & Deferred) 6895 15878 6895 15878
Profit / (Loss) for the year (1) 16685 33284 16574 33209
Total Comprehensive Income / (Loss) (2) 67198 3879 67198 3879
Total (1 + 2) 83883 37163 83772 37088
Balance of Profit / (Loss) for earlier years 146157 137055 145975 136947
Amount available for Appropriation 162679 169882 162385 169700
Less: Transfer to Reserves 8343 16642 8343 16642
Less: Dividend paid on Equity Shares 5875 5875 5875 5875
Less: Dividend Distribution Tax - 1208 - 1208
Balance carried forward 148461 146157 148167 145975
Earning per Share Rs.22.72 Rs.45.32 Rs.22.57 Rs.45.22
Dividend per Share Rs.08.00 Rs.08.00 Rs.08.00 Rs.08.00
Book Value per Share Rs.556.54 Rs.541.31 Rs.556.14 Rs.541.06

RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS

The highlights of the Company's performance for the year ended 31st March2021 are as under:

At Standalone Level

• The Company has achieved Net External Sales of Rs.2344.49 Crores during theyear 2020-21 as against Rs.2654.20 Crores in the previous year.

• Total production of all products has decreased by 3.33% to 1607469 MT duringthe year 2020-21 from 1662843 MT in previous year.

• Other Operating income has increased by 20.74% to Rs.84.99 Crores during theyear 2020-21 from Rs.70.39 Crores in previous year.

• Other income has decreased by 24.87% to Rs.67.45 Crores during the year 2020-21from Rs.89.78 Crores in previous year.

• EBITDA has decreased by 36.24% to Rs.425.62 Crores during the year 2020-21 fromRs.667.49 Crores in previous year.

• Profit Before Tax has decreased by 52.04% to Rs.235.80 Crores during the year2020-21 from Rs.491.62 Crores in previous year.

• Profit After Tax has decreased by 49.87% to Rs.166.85 Crores during the year2020-21 from Rs.332.84 Crores in previous year.

At Consolidated Level

• EBITDA has decreased by 36.33% to Rs.424.51 Crores during the year 2020-21 fromRs.666.74 Crores in previous year.

• Profit Before Tax has decreased by 52.19% to Rs.234.69 Crores during the year2020-21 from Rs.490.87 Crores in previous year.

• Profit After Tax has decreased by 50.09% to Rs.165.74 Crores during the year2020-21 from Rs.332.09 Crores in previous year.

In spite of the stiff competition and unstable market conditions during the year theCompany had achieved the Sales Turnover of Rs.2344.49 Crores Profit Before Tax ofRs.235.80 Crores and Profit After Tax of Rs.166.85 Crores. The Company has beenconsistently striving towards the cost reduction. The Company has been able to maintainthe production levels and sell its quality products at very competitive rates.

TRANSFER TO RESERVES

The Company has transferred Rs.8342.54 Lakhs to the General Reserve Account subject toapproval of Annual Accounts by the Shareholders at this Annual General Meeting(hereinafter referred to as "AGM").

DIVIDEND

Your Directors are glad to recommend a Dividend @ Rs.8.00 per share (i.e. 80%) on73436928 Equity Shares of Rs.10/- each fully paid up for the year ended 31stMarch 2021 (Previous Year - Dividend @ Rs.8.00 per share). Dividend is subject toapproval of members at this Annual General Meeting and shall be subject to deduction ofTDS as per Income Tax Act.

The dividend recommended is in accordance with the Company's "DividendDistribution Policy".

MATERIAL CHANGES AND COMMITMENTS Global Pandemic COVID-19

Due to COVID-19 Pandemic initially from 3rd April 2020 onwards theCompany resumed partial operation of its various plants at Vadodara and Dahej Complexes inphased manner considering the requirements of various Municipal Corporation and otheressential industries after obtaining necessary permissions from the concerned Authorities.The Company continued with plant operations with minimum manpower exercising precautionsof social distancing in compliance with Central and State Government Authorities'Guidelines. Effective from 1st May 2020 all plants at Vadodara Complex hadstarted operating at full capacity whereas plants at Dahej Complex had started operatingat full capacity effective from 15th July 2020.

Due to the ongoing disruption in manufacturing operations and supply chain theCompany's business has been impacted. The Management does not see any risk to Company'sability to continue as a going concern and expects that the Company will be able to meetits liabilities in the foreseeable future as and when the same would become due.

The Company has undertaken various expansion projects which includes 105000 TPAChloromethanes Plant 10000 TPA Hydrazine Hydrate Plant 33870 TPA Phosphoric AcidPlant Caustic Soda expansion with 65 MW Coal based Power Plant at Dahej Complex and 800TPD Caustic Soda Plant with 130 MW Coal based Power Plant by its subsidiary and jointventure Company viz. GACL-NALCO Alkalies & Chemicals Private Limited. After the endof Financial Year 2020-21 Covid-19 pandemic continued affecting adversely theimplementation of ongoing projects posing huge challenges. The Company took severalproactive steps to mitigate the impact. Overcoming the hurdles this would howeverresult into delay in completion of these projects by about 3 months. All efforts are beingmade to minimize the delay in completion of these projects. There has been no othermaterial changes and commitments which affect the financial position of the company whichhave occurred between the end of the Financial Year 2020-21 and the date of this Report.There has been no change in the nature of business of the Company.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under Section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is given in the Annexure - 1to this report.

SUBSIDIARY JOINT VENTURE OR ASSOCIATE COMPANY

GACL-NALCO Alkalies & Chemicals Pvt. Ltd.

The Company and National Aluminium Company Limited (NALCO) a Government of IndiaEnterprise (a Navratna Company) have jointly incorporated a Joint Venture Company viz.GACL-NALCO Alkalies & Chemicals Pvt. Ltd. (GNAL) (CIN U24100GJ2015PTC085247) on 4thDecember 2015 for setting up 266667 MTPA (100%) Caustic Soda Plant and 130 MWCoal based Power Plant at Dahej Gujarat.

The Company holds 60% and NALCO holds 40% in GNAL. Accordingly GNAL is a subsidiary ofthe Company. Effective from 1st April 2020 GNAL has become material subsidiarycompany of the Company.

The Managing Director of GACL is the Chairman of GNAL. The Managing Director of GACLdoes not draw any commission or any remuneration from GNAL except incidental expenses ofRs.2500/- per day of meeting(s) for attending the meetings of the Board of Directors orCommittees thereof.

As per Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 a separate statement containing the salient features of financialstatement of the Joint Venture / Subsidiary Company in Form AOC-1 forms part of the AnnualReport.

In accordance with the provisions of Section 136 of the Companies Act 2013 the AnnualReport of the Company containing Standalone and Consolidated Financial Statements hasbeen placed on the Website of the Company at www.gacl.com. Further the Audited FinancialStatements of GNAL for the year ended 31st March 2021 are also placed on theWebsite of the Company at www. gacl.com and also at Website of GNAL at www.gnal.co.in

Interested Shareholders may obtain a physical copy of the audited financial statementsof the Subsidiary Company by sending a request to the Company Secretary at the Company'sRegistered Office.

Vadodara Jal Sanchay Pvt. Ltd.

The Government of Gujarat vide Gazette Notification dated 28.05.2018 notified the"Policy for Reuse of Treated Waste Water" (TWW). As per the said Policy Reuseof TWW was mandatory for industries consuming minimum 1 lakh liter per day (100 M3/day) offresh water for Non-Potable purpose and which are situated within 50 km distance from STPor city limits. Reuse of Treated Waste Water should be minimum 25% of the total freshwater consumption within 1 year 70% by 2025 and 100% by 2030.

In compliance of the said Policy the Board of Directors of the Company at its Meetingheld on 6th February 2020 had approved formation of Special Purpose Vehicle /Joint Venture Company comprising of Gujarat State Fertilizers & ChemicalsLimited(GSFC) Gujarat Alkalies and Chemicals Limited(GACL) Gujarat Industries PowerCompany Limited(GIPCL) and Vadodara Municipal Corporation(VMC) as its joint venturepartners for establishment of a new secondary treated waste water plant (STP) of 50 MLDcapacity in the state of Gujarat. Accordingly a Special Purpose Vehicle / Joint VentureCompany in the name of Vadodara Jal Sanchay Private Limited(VJSPL) was incorporated on22.07.2020 for establishment of new secondary treated waste water plant (STP) of 50 MLD atVadodara Gujarat. The Company (GACL) had subscribed 300000 equity shares of Rs.10/-each (i.e. Rs.30 lakhs) (15%) to the Memorandum of Association (MoA) of VJSPL on 15thJuly 2020. VJSPL is yet to commence its business operations.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has in place adequate internal financial controls commensurate with thesize and nature of its business. The Company periodically reviews the internal financialcontrols in the light of new statutes changes in business models adoption of newtechnology solutions and suggestions for improvements received from employees. During theyear such controls were tested and no reportable material weakness in the design oroperation was observed.

For all amendments to Accounting Standards and the new standards notified the Companycarries out a detailed analysis and presents the impact on accounting policies financialresults including revised disclosures to the Audit Committee. The approach and changes inpolicies are also validated with the Statutory Auditors.

The Company has a stated process and periodicity for physical verification of itsinventory and fixed assets. All variances are analysed and accounted post necessaryapprovals.

The Company gets its financial statements reviewed every quarter by its StatutoryAuditors. The accounts of GNAL are audited and certified by their Statutory Auditors forconsolidation.

None of the auditors of the Company has reported any fraud as specified under secondproviso of section 143(12) of the Companies Act 2013 including any statutorymodifications or re-enactments thereof for the time being in force.

CREDIT RATING

Your Company's financial discipline and prudence are reflected in the strong creditrating described by rating agency as per the following particulars :

Instrument Rating Agency Rating Date of Rating
Long Term Bank Facilities CARE Ratings Limited (CARE) CARE AA+ (Double A Plus) CARE Letter No. CARE/ARO/ RL/2020-21/1887 dated 30lh September 2020
Short Term Bank Facilities CARE Ratings Limited (CARE) CARE A1 + (A One Plus)
Commercial Paper Issue aggregating to Rs.100 Crore CARE Ratings Limited (CARE) CARE A1 + (A One Plus) CARE Letter No. CARE/ARO/ RL/2020-21/1889 dated 30lh September 2020

During the year under review CARE reaffirmed the above credit ratings and the same hasbeen informed to the Stock Exchanges (BSE & NSE) vide letter dated 1st October2020 and also placed on the Company's Website at www.gacl.com.

RISK MANAGEMENT

The Company has constituted the Risk Management Committee of Directors w.e.f. 11thFebruary 2016. Shri Rajiv Lochan Jain had been appointed as the Chairman of the saidCommittee w.e.f. 28th September 2018. As on 31st March 2021 beloware the Members of the Risk Management Committee :

1. Shri Rajiv Lochan Jain Chairman;

2. Shri S B Dangayach; and

3. Shri Milind Torawane IAS.

The Company has also constituted Internal Risk Management Committee comprising ofSenior Executives of the Company who are heading respective departments viz. FinanceManufacturing Marketing Purchase Project Safety Information Technology HRSecretarial and Legal functions. The Managing Director is the Chairman of the InternalRisk Management Committee. The Internal Risk Management Committee reports to the ManagingDirector and the risks identified by the said Committee along with proposed mitigationactions are discussed periodically on quarterly basis with the Managing Director.

The Risk Management Committee of Directors was renamed as "RiskManagement-cum-Safety Committee" w.e.f. 10th November 2016 by the Board.The existing Internal Risk Management Committee of Senior Executives of the Companycontinues to function. Out of the various risks identified by the Internal Risk ManagementCommittee the Audit Committee has identified certain critical risks which are reviewedby the Risk Management-cum-Safety Committee the Audit Committee and by the Board ofDirectors periodically. A Report on the steps taken to mitigate those critical risks isalso submitted to the Risk Management-cum-Safety Committee Audit Committee and the Boardof Directors.

Pursuant to provisions of Regulations 17 & 21 of SEBI Listing Regulations andSections 134 & 177 of the Companies Act 2013 ("the Act") and otherapplicable provisions if any of the SEBI Listing Regulations and the Act the Board ofDirectors of the Company have also approved and framed "Risk Management Policy"of the Company.

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 SEBI Listing Regulations. The Policy is applicable to all Directorsand Employees of the Company.

As per the Policy a whistle blower can make protected disclosures to the Chairman ofthe Audit Committee. During the Financial Year 2020-21 no unethical and/or improperpractice or any other wrongful conduct in the Company by any person was reported under thesaid Policy. The Vigil Mechanism-cum-Whistle Blower Policy may be accessed on theCompany's Website at the weblink :https://gad.com/upload_files/cb476_VIGIL_MECHANISM_CUM_WHISTLE_BLOWER_POLICY.pdf CORPORATESOCIAL RESPONSIBILITY

As per the provision of Section 135 read with Schedule VII of the Companies Act 2013and the Companies (Corporate Social Responsibility Policy) Rules 2014 the Company hasconstituted Corporate Social Responsibility (CSR) Committee and formulated CorporateSocial Responsibility Policy (CSR Policy). The composition of CSR Committee is given inthe Corporate Governance Report.

The CSR Committee has formulated and recommended to the Board a CSR Policy identifyingthe activities to be carried out by the Company and the said CSR Policy was approved bythe Board of Directors at their Meeting held on 23.07.2014. The Board of Directors attheir Meeting held on 26.05.2015 has approved some modifications in the CSR Policyincluding to undertake CSR activities through GACL Education Society (GES). GES is aSociety registered under the Societies Registration Act 1860 and also under the BombayPublic Trust Act 1950. GES has also recently filed Form CSR-1 and got the requiredregistration number from MCA in pursuance of recent amendments in the Companies (CSR)Rules 2014. Further the Board of Directors at their Meeting held on 09.02.2021 approvedthe modifications/changes in CSR Policy of the Company pursuant to the amendments madeunder the Companies (Corporate Social Responsibility Policy) Amendment Rules 2021 theCompanies (Amendment) Act 2019 and the Companies (Amendment) Act 2020 with effect from22nd January 2021. Further the Board of Directors at their Meeting held on18.05.2021 modified the said CSR Policy requiring contribution by theentity/institution/individuals or group as the case may be up to certain percentage oftotal CSR Project cost in order to bring ownership and discipline to such identified CSRprojects.

The details about various activities carried out by the Company under CSR through GESas well as directly by the Company are given in the Management Discussion and Analysiswhich forms part of Annual Report.

The CSR Policy may be accessed on the Company's Website at the weblink:https://www.gacl.com/upload_files/987b0_CSR_POLICY.pdf MCA had issued clarification dated23.03.2020 on spending of CSR funds for COVID-19. The Company had obtained approval of CSRCommittee and of the Board and contributed Rs. 5 Crores on 30.03.2020 and Rs. 5 Crores on01.04.2020 for "Disaster Management due to Covid-19 Pandemic across the India toChief Minister's Relief Fund" with special objective in the situation of DisasterRelief for helping COVlD-19 affected areas and considered the same as part of CSR.Subsequently on 10.04.2020 MCA had issued COVID-19 related Frequently Asked Questions(FAQs) on Corporate Social Responsibility (CSR) wherein it was clarified that "ChiefMinister's Relief Fund" or "State Relief Fund" for COVID-19 is not includedin Schedule-VII of the Companies Act 2013 and therefore any contribution to such fundsshall not qualify as admissible CSR expenditure.

The CSR Committee and the Board at their Meetings held on 11.08.2020 and 18.05.2021noted and approved that the contributions of Rs.5 Crores on 30.03.2020 and Rs.5 Crores on01.04.2020 made by the Company for Disaster Management of COVID-19 Pandemic to the ChiefMinister's Relief Fund were in compliance with the provisions of Section 135 of theCompanies Act 2013 & Rules made thereunder read with Schedule VII of the CompaniesAct 2013 and therefore admissible as CSR expenditure.

Accordingly the contribution of Rs.5 Crore on 01.04.2020 for Disaster Management ofCOVID-19 Pandemic to the Chief Minister's Relief fund had been considered as a part oftotal CSR Expenditure of Rs.15.02 Crore made during the Financial Year. The Company hadtaken necessary legal opinion on the above.

As per the provisions of Section 135 of the Companies

Act 2013 the statutory amount (i.e.2% of the average net profits of the last threeFinancial Years) that was required to be spent by the Company for various CSR activitiesduring the Financial Year 2020-21 was Rs.1475.72 Lakhs. The Company has spent Rs.1501.79Lakhs towards various CSR activities during the Financial Year 2020-21. In this manneryour Company has met its obligation under Section 135 of the Companies Act 2013.

The Annual Report on CSR activities for the Financial Year 2020-21 is annexed herewithas Annexure-2.

As per the provisions of Section 135 of the Companies Act 2013 read with Companies(Corporate Social Responsibility Policy) Rules 2014 (as amended) the amount of Rs.99.43 lakhs being the unspent amount towards various ongoing projects was transferred byGES to special account i.e. Unspent CSR Account within 30 days from the close of thefinancial year 2020-21 i.e. upto 30.04.2021. The Board at its Meeting held on 18.05.2021noted that GES had transferred amount of Rs.99.43 lakhs to "GES Unspent CorporateSocial Responsibility Account 2020-21" opened with State Bank of India GACL ProjectSite Ranoli. The unspent amount of Rs.99.43 lakhs transferred to such account would beutilized for the ongoing projects in next three Financial Years i.e. Financial Years2021-22 to 202324 by GES. The Company/GES would transfer unspent amount if any lying inthis account at the end of third Financial Year to a Fund specified in Schedule VIIwithin 30 days from the completion of third Financial Year.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Appointment / Reappointment / Cessation of Directors & Key Managerial Personnel

The Board of Directors of the Company at its Meeting held on 08.12.2020 noted the saddemise of Shri Rohitbhai J Patel (DIN 00088482) Non-Executive Independent Director of theCompany on 10.11.2020 and expressed their deepest condolences on the untimely sad demiseof Shri Rohitbhai J Patel NonExecutive Independent Director of the Company. The Boardplaced on record a deep appreciation for the valuable services rendered by Shri RohitbhaiJ Patel as Non-Executive Independent Director of the Company during his tenure andconveyed deep sympathy sorrow and condolences to his family members. The ManagingDirector of the Company had conveyed the condolences on behalf of the Board of Directorsto the family members of Shri Rohitbhai J Patel.

Further Shri P K Gera IAS (DIN 05323992) who was appointed as the Managing Directorof the Company w.e.f. 19.02.2016 had retired from Indian Administrative Services on30.11.2019. The Shareholders of the Company at its 47th Annual General Meetingheld on 25th September 2020 approved the continuation of appointment of Shri PK Gera IAS (Retd.) as Managing Director of the Company by Government of Gujarat for oneyear i.e. 01.12.2019 to 30.11.2020. The term of Shri P K Gera IAS (Retd.) had gotcompleted on 30.11.2020. He had served the Company as Managing Director for more than 4years since 19th February 2016. The Board placed on record its sincereappreciations and paid rich tributes for the valuable services rendered and contributionmade by Shri P K Gera IAS (Retd.) for the growth and development of the Company.

Shri Milind Torawane IAS (DIN No. 03632394) Secretary to Government FinanceDepartment (Economic Affairs) GoG was appointed as Managing Director of the Company viceShri P K Gera IAS (Retd.) w.e.f. 1st December 2020 until further ordersvide General Administration Department Government of Gujarat Notification No.AIS/45.2020/505913/G dated 1st December 2020.

As recommended by Nomination-cum-Remuneration Committee of Directors the Board ofDirectors of the Company had approved the appointment of Shri Milind Torawane IAS (Din :03632394) as a Non Rotational Government Director and Managing Director of the Companywith effect from 1st December 2020 (i.e. the date on which he took over thecharge) until further orders subject to the approval of Shareholders at this AnnualGeneral Meeting. Your Directors recommend appointment of Shri Milind Torawane IAS as aNon Rotational Government Director and Managing Director of the Company w.e.f. 01.12.2020pursuant to the provisions of the Companies Act 2013 for your approval.

The Board of Directors of the Company as recommended by theNomination-cum-Remuneration Committee of Directors approved the appointment of Shri TapanRay IAS (Retd.) (DIN 00728682) as Non Executive Independent Director on the Board ofDirectors of the Company w.e.f. 30.12.2020 not liable to retire by rotation for a term offive consecutive years i.e. upto 29.12.2025 subject to approval of the Shareholders atthis Annual General Meeting. Your Directors recommend appointment of Shri Tapan Ray IAS(Retd.) Independent Director on the Board of Directors of the Company w.e.f. 30.12.2020for a term of five consecutive years i.e. upto 29.12.2025 pursuant to the provisions ofthe Companies Act 2013 for your approval.

Shri Pankaj Joshi IAS (DIN 01532892) will retire by rotation at this Annual GeneralMeeting and being eligible has offered himself for re-appointment. Your Directorsrecommend his re-appointment as Director for your approval.

Brief profiles of Shri Pankaj Joshi IAS Shri Tapan Ray IAS (Retd.) and Shri MilindTorawane IAS form part of the Notice of this Annual General Meeting.

Pursuant to provisions of Section 203 of the Companies Act 2013 Shri Milind TorawaneIAS on his appointment as Managing Director was also appointed as Key Managerial Personnelof the Company effective from 1st December 2020. Shri Vinayak Kudtarkar ChiefFinancial Officer and Shri Sanjay S Bhatt Company Secretary are the Key ManagerialPersonnel of the Company effective from 1st June 2019 and 14th May201 4 respectively.

B. Independent Directors

Attributes Qualifications & Independence of Directors and their Appointment

The Nomination-cum-Remuneration Committee adopted the criteria for determiningqualifications positive attributes and independence of Directors including IndependentDirectors pursuant to the Act and the Rules made thereunder and the SEBI ListingRegulations. The brief particulars of the Directors are provided in the 'Report onCorporate Governance' forming part of this Annual Report.

The Company has received declarations from the Independent Directors confirming that(a) they meet the criteria of Independence as prescribed under Section 149 of the Act andRegulation 16 of the SEBI Listing Regulations; (b) they are not aware of any circumstanceor situation which could impair or impact their ability to discharge duties with anobjective independent judgement and without any external influence; and (c) they haveregistered their names in the Independent Directors' Databank pursuant to the provisionsof the Companies Act 2013 and Rules made thereunder. Further in the opinion of theBoard the Independent Directors fulfill the conditions prescribed under the SEBI ListingRegulations and are independent of the management of the Company.

C. Board Evaluation

Pursuant to applicable provisions of the Companies Act 2013 and the SEBI ListingRegulations the Board carried out an annual performance evaluation of the Board itsCommittees Individual Directors Managing Director and Chairperson. The manner in whichthe evaluation has been carried out has been explained in the Corporate Governance Report.

D. Nomination and Remuneration Policy

The Board has on the recommendation of the Nomination-cum-Remuneration Committeeformulated a Nomination & Remuneration-cum-Board Diversity Policy for selectionappointment of Directors and Senior Management and their remuneration.

Information about the Policy is provided in the Corporate Governance Report and thesaid Policy may be accessed on the Company's Website at the weblink:

https://gacl.com/upload_files/7e74a_nrbd_policy.pdf

E. Meetings

During the year six (06) Board Meetings and four (04) Audit Committee Meetings wereheld. The details of which are given in the Corporate Governance Report. Pursuant to theSEBI Circular No. SEBI/HO/CHD/TMB1/ TIR/P/2020/38 dated March 19 2020 on relaxation fromcompliance with certain provisions of the SEBI Listing Regulations due to COVID-19pandemic there is a relaxation in time gap between two Board / Audit Committee Meetingsheld during the Quarter ended on 30th June 2020. The intervening gap betweenthe Meetings held thereafter was within the period prescribed under the Companies Act2013 and SEBI Listing Regulations. Further the composition and terms of reference ofAudit Committee and other Committees are given in the Corporate Governance Report.

During the year under review all recommendations of Audit Committee were accepted bythe Board.

AUDITORS

A. Internal Auditors

As per the recommendation of the Audit Committee the Board of Directors of the Companyat its Meeting held on 18th June 2020 appointed M/s. Parikh Mehta &Associates Chartered Accountants Vadodara as Internal Auditors for conducting InternalAudit of the Company for the period from 1st July 2020 to 30th June2025.

The Internal Auditors independently evaluate the internal controls adherence to andcompliance with the procedures guidelines and statutory requirements. The Audit Committeeof Directors periodically reviews the reports of the Internal Auditors and the correctiveactions if any are taken by the Management.

B. Statutory Auditors

M/s. K C Mehta & Co Chartered Accountants Vadodara (Firm Regn No. 106237W) wereappointed as the Statutory Auditors of the Company for a period of five years i.e. fromthe conclusion of 46th Annual General Meeting till the conclusion of 51 stAnnual General Meeting.

As per Companies Amendment Act 2017 the provision of Section 139(1) of the CompaniesAct 2013 with respect to ratification of the appointment of Statutory Auditors by themembers at every Annual General Meeting is omitted.

The Auditor's Report to the Members for the year under review does not contain anyqualification reservation or adverse remark or disclaimer.

C. Cost Auditors

The Board of Directors of the Company at its Meeting held on 18th May 2021has reappointed M/s. R K Patel & Co. Cost Accountant in practice Vadodara (FirmRegistration No. 14115) as Cost Auditors for the Financial Year 2021-22 as per theprovisions of the Companies Act 2013 to conduct the audit of Cost Records maintained bythe Company at a remuneration of Rs.495000/- plus applicable GST.

As per the provisions of the Companies Act 2013 your Directors propose the Resolutionin the Notice in respect of remuneration payable to the Cost Auditors for the FinancialYear 2021-22 for your ratification and approval.

The Company maintains necessary cost records as specified by the Central Governmentunder sub-section (1) of Section 148 of the Companies Act 2013 read with the Companies(Cost Records and Audit) Rules2014.

D. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshave appointed M/s. Samdani Shah & Kabra Practicing Company Secretaries to undertakethe Secretarial Audit of the Company for the Financial Year 2020-21. The Report of theSecretarial Auditors is annexed herewith as Annexure - 3. The Report does not contain anyqualification reservation or adverse remark or disclaimer.

The Company has complied with Regulation 24A of the SEBI Listing Regulations. GNAL hasgot Secretarial Audit carried out by Practicing Company Secretary. Copy of SecretarialAudit Report of GNAL is annexed at Annexure- 4 and is also available on the website of theCompany. The Secretarial Audit Report of GNAL does not contain any qualificationreservation adverse remark or disclaimer.

As per SEBI Circular No. CIR/CFD/CMD1/27/2019 dated 8th February 2019 readwith Regulation 24A Annual Secretarial Compliance Report for the year ended on 31stMarch 2021 given by M/s. Samdani Shah & Kabra Practicing Company SecretariesSecretarial Auditors was submitted to Stock Exchanges (BSE & NSE) within prescribedtime limit.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Transfer of Dividend and corresponding Equity Shares to the Investor Education andProtection Fund

During the Financial Year 2020-21 unclaimed dividend for the Financial Year 2012-13aggregating Rs.1393315/- had been transferred to Investor Education and Protection Fund(IEPF).

The Company has also transferred Rs.1747170/- (Net of Tax) to the bank account of theIEPF towards dividend declared by the Company for the Financial Year 2019-20 for suchshares which were transferred to the IEPF earlier. During the Financial Year 2020-21 theCompany has also transferred 17920 Equity Shares to the IEPF in respect of whichdividends remained unclaimed for seven consecutive years pursuant to the provisions ofSection 124 of the Companies Act 2013 read with the Investor Education and ProtectionFund Authority (Accounting Audit Transfer and Refund) Rules 2016 as amended.

Shareholders may claim their unclaimed dividend for the years prior to and includingthe Financial Year 2012-13 and the corresponding shares if any from the IEPF Authorityby applying in the prescribed Form No. IEPF-5.

This form can be downloaded from the Website of the IEPF Authority at www.iepf.gov.inthe access link of which is also available on the Company's Website at www.gacl.com underthe section 'Investors'.

Attention of the Members is drawn that the unclaimed dividend for the Financial Year2013-14 and the corresponding shares will be due for transfer to the IEPF on 21stSeptember 2021 for which purpose communication has been sent to all the concernedShareholders advising them to claim their dividends failing which the said shares will betransferred to IEPF Authority within 30 days from the said due date. Notices in thisregard have also been published in newspapers. Details of such shares are available on theCompany's Website under the section 'Investors'.

Details of Nodal Officer

In accordance with Rule 7(2A) of Investor Education and Protection Fund Authority(Accounting Audit Transfer and Refund) Rules 2016 the details of Nodal Officer of theCompany for the purpose of coordination with Investor Education and Protection FundAuthority are as under:

Name: Shri Sanjay S Bhatt
Designation: Company Secretary & CGM (Legal & CC)
Postal Address: PO : Ranoli : 391 350 Dist.: Vadodara (Gujarat)
Telephone No.: 0265-6111453
Mobile No.: 7069053850
E-mail ID: cosec@gacl.co.in

The Company has also displayed the above details of Nodal Officer at its Website atwww.gacl.com

CORPORATE GOVERNANCE

The Company has been following the principles and practices of good CorporateGovernance and has ensured compliance of all the requirements stipulated under the SEBIListing Regulations.

A detailed report on Corporate Governance for the year under review along withCertificate issued by Practicing Company Secretary in terms of provisions of the SEBIListing Regulations is attached herewith forming part of this Annual Report.

BUSINESS RESPONSIBILITY REPORT

As per the provisions of the SEBI Listing Regulations the Business ResponsibilityReport (BRR) containing initiatives taken by the Company from environmental social andgovernance perspective is annexed herewith as Annexure

- 5 as part of this Annual Report.

PARTICULARS OF EMPLOYEES

The information pertaining to remuneration and other details of employees as requiredpursuant to Section 197 of the Companies Act 2013 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended areprovided in the Annexure

- 6. Further there was no employee holding 2% or more of the Equity Shares of theCompany during the Financial Year 2020-21.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Audit Committee of Directors at its Meeting held on 5th February 2020has accorded omnibus approval to execute transactions with related parties up to the valueof Rs.1 Crore. During the Financial Year the transactions entered into by the Companywith Related Parties were in the ordinary course of business at arm's length price and/orwithin the omnibus approval granted by the Audit Committee. The Company has not enteredinto 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 Related Parties during theyear were in the ordinary course of business and/or the same were at arm's length as wellas under the special omnibus approval route and not being material transaction as definedunder the Act / Rules disclosure in Form AOC-2 under Section 134(3)(h) of the Act readwith Rule 8(2) of the Companies (Accounts) Rules 2014 is not required.

The Policy on Related Party Transactions and Material Subsidiaries Policy as approvedby the Board of Directors may be accessed on the Company's Website at the weblinks:

https://gad.com/upload_files/AMENDED_RELATED_PARTY_TRANSACTION_POLICY.pdf andhttps://gad.com/upload_tiles/25c45_policy_on_material_subsidiaries.pdf Your Directors drawattention of the Members to Note No. 37 to the Financial Statements which sets out RelatedParty disclosures.

LOANS GUARANTEES AND INVESTMENTS

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act

2013 are given in the Note No. 5671721 & 42(i)(g) of the Notes to the FinancialStatements.

INSURANCE

The Company has taken adequate insurance for all its properties. The Company has alsotaken necessary insurance cover as required under the Public Liability Insurance Act1991.

The Company has D & O Liability Insurance Policy which is reviewed in terms of thequantum and risk coverage as per the Regulation 25(10) of the SEBI Listing Regulations.

LISTING REGULATIONS COMPLIANCE

Your Company's Equity Shares are listed on BSE Ltd. (BSE) and National Stock Exchangeof India Ltd. (NSE) and their listing fees for the Financial Years 2020-21 and 2021-22have been paid and the provisions of the SEBI Listing Regulations have been complied with.

ANNUAL RETURN

The Draft Annual Return of the Company as on March 31 2021 is available on theCompany's Website and can be accessed at Weblink :

https://gad.com/upload_tiles/e8a61_DRAFT%20Form_MGT_7.pdf

The Annual Return of 2019-20 in prescribed Form No. MGT-7 as required under Section92(1) of the Companies Act 2013 read with Rule 11 of the Companies (Management andAdministration) Rules

2014 is placed on the Company's Website at weblink:https://gacl.com/upload_tiles/aec92_MGT-7%20Website%20Upload.pdf

The same was tiled with the Registrar of Companies Gujarat (ROC) on Ministry ofCorporate Affairs (MCA) portal within prescribed time limit.

DIVIDEND DISTRIBUTION POLICY

The Board of Directors of the Company at its Meeting held on 26th May 2017has adopted "Dividend Distribution Policy" effective from 26th May2017 which is available on the Company's Website at the linkhttps://www.gacl.com/upload_tiles/a7fec_Dividend_Distribution_Policy.pdf As per the SEBIListing Regulations the said "Dividend Distribution Policy" is also required tobe disclosed in the Annual Report of the Company which is annexed herewith as Annexure -7. The dividend recommended by the Board for the year ended 31st March 2021 isin accordance with the said Dividend Distribution Policy.

CHANGE IN POSTAL ADDRESS OF THE REGISTERED OFFICE OF THE COMPANY

Pursuant to communication received from Ministry of Communications Department ofPosts O/o Suprintendent of Post Offices Vadodara West Division Vadodara the Board ofDirectors of the Company approved change in postal address of the Registered Office of theCompany from "P.O. Petrochemicals-391 346 Dist. Vadodara Gujarat India" to"P.O. Ranoli - 391 350 Dist. Vadodara Gujarat India.

GENERAL INFORMATION

Your Directors state that no disclosure or reporting is required in respect of thefollowing items since there were no transactions in these matters and/or they are notapplicable 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 dividend voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company underESOS.

4. Issue of shares Issue of debentures warrants bonds other convertible securitiesor any non-convertible securities.

5. No significant or material orders were passed by the Regulators / Courts orTribunals which would impact the going concern status of the Company and its futureoperations.

6. No fraud has been reported by the Auditors to the Audit Committee or the Board.

7. There has been no change in the nature of business of the Company.

8. There was no instance of one-time settlement with any Bank or Financial Institution.

Your Directors further state that your Company has constituted a Committee forprevention of Sexual Harassment of Women at Workplace named as "Internal ComplaintCommittee-cum-Gender Equality Committee" under the provisions of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013(hereinafter referred as "the said Act") to enquire into complaints andrecommend appropriate action wherever required. During the year under review theCommittee had not received any complaint of sexual harassment.

The details of application made by one Operational Creditor under Insolvency andBankruptcy Code 2016 is given under the Management Discussion and Analysis Sectionforming part of this Report.

SECRETARIAL STANDARDS

During the year under review the Company has complied with the applicable SecretarialStandards issued by the Institute of Company Secretaries of India and approved by theCentral Government under Section 118(10) of the Act.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors state that:

a) in the preparation of the Annual Accounts for the Financial Year ended 31stMarch 2021 the applicable accounting standards have been followed;

b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2021 and ofthe profit of the Company for the year ended on that date;

c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on Management Discussion and Analysis forms part of the Board's Report and itdeals inter-alia with the Business Operations & Financial Performance Research &Development Expansion & Diversification Risk Management Outlook Safety &Environment Corporate Social Responsibility Material Development in Human Resources etc.as stipulated under the SEBI Listing Regulations.

ACKNOWLEDGEMENTS

The Board expresses its gratitude and appreciation to the Government of IndiaGovernment of Gujarat Financial Institutions Insurance Companies Banks other businessassociates Promoters Shareholders and employees of the Company for their continuedsupport. The Directors also gratefully acknowledge all stakeholders of the Company viz.:customers members dealers vendors banks and other business partners for the excellentsupport received from them during the year.

The Directors place on record their sincere appreciation to all employees of theCompany for their unstinted commitments and continued contribution to the Company.

For and on behalf of the Board
Sd/-
(ANIL MUKIM IAS)
CHAIRMAN
Gandhinagar 10th August 2021

.