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GOCL Corporation Ltd

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BSE Code : 506480 | NSE Symbol : GOCLCORP | ISIN : INE077F01035 | Industry : Chemicals |


Chairman's Speech

Dear Shareholders,

On behalf of the Board of Directors and myself, I would like to thank Mr Ajay P Hinduja, for his able leadership of your Company and setting its governance standards over the last 9 years.

Owing to his overwhelming preoccupation with the Group's several new initiatives which consume his management focus & bandwidth, Ajay Hinduja desired to step off the Board of your Company' as Chairman during the year under review.

I am happy to report that your Company has reported the highest-ever revenue in FY 2022-23. This performance is a testament to your company's commitment to customer-centricity and successful metamorphosis into an innovation-focused Solutions Company.

This must be viewed against the backdrop of the prolonged Russia-Ukraine war which continues to pose economic challenges for countries as well as businesses globally, with surging raw material prices and multi-decade-high inflation levels. However, India remains the brightest spot in this challenging macroeconomic environment, and your company continues to maintain its revenue growth momentum both in export and domestic markets.

Financial performance

Your Company has recorded a 126% increase in consolidated income, up from Rs.623 crores last year to Rs.1410 crores in FY23, including profit on sale of land. A 20% growth in profit at Rs.211 crores was reported, against Rs.176 crores in the previous year. Growing exports and increased capacity utilisation largely contributed to the income growth.

The Board has recommended a dividend of Rs 5 per share (250%) for the financial year 2022-23, in line with your company's commitment to ensure consistent shareholder returns.

Let's now take a look at your company's division-wise performance and highlights in this fiscal:

Energetics and Explosives

The annual income of Energetics grew 41% to Rs.171 crores in FY23 against Rs.121 crores in FY22. During the fiscal, the Energetics Division continued to grow in value-added products, nonelectric detonators and boosters.

GOCL's wholly-owned subsidiary, IDL Explosives Limited (IDLEL) also reported a substantial growth of 96% in annual income, standing at Rs.785 crores in FY23 against Rs.400 crores in FY22, while continue facing raw material cost pressures.

Real Estate

Your Company has land banks in Bengaluru, Hyderabad (Kukatpally), and Bhiwandi. It is exploring monetisation strategies of these assets to generate sustainable income streams. At Kukatpally, 44 acres of land were sold for a consideration of Rs. 451 crores and the sale proceeds were deployed profitably. A special dividend of Rs 5 per share (250%) has been recommended by the Board on this occasion. Your company has a commercial project, Ecopolis in Bengaluru, spread over 14.54 lakh square feet area which would be another revenue source in the future.

With the increasing transport infrastructure in the country, there's a growing demand for warehouses around Mumbai and Bhiwandi is fast developing into one such logistic hub. Your company is actively exploring opportunities for the development of a warehousing project at its land in Bhiwandi to capitalise on emerging business opportunities.

Special Projects

Your company's product solutions have applications in the growing Indian Defence and Space sectors. This business has demonstrated improved performance over the last few years. It would please you to know that your company has designed, developed and supplied trial lots for booster initiating system PJ-10 for the Brahmos missile. Flight tests have been completed successfully, and the first production order has since been received.

Metal Cladding Division (MCD) caters to specialised niche requirements of the engineering industry for new metals.

Overseas Investments

Through its overseas subsidiary HGHL, your Company has made an investment of USD 24 million in the restoration and development of the historical and marquee Old War Office (OWO) project located in Central London, to convert it into a super luxury hotel and luxurious residential apartments. To be operated and managed by the iconic Raffles Hotels, which ranks among the top 10 hotel brands in the world. This project is expected to be completed in the second quarter of FY24. The Residences have already received a tremendous response achieving the highest sale price per sq. ft. for residential projects in Central London.

At this juncture, it is also important to share with you some of the robust management practices that have been instituted in your company.

Corporate Governance:

Your Company's Governance and Ethics frameworks, both at the corporate and the Board levels, through various codes of conduct and standard operating procedures, encourage transparent and professional decision-making. The Board of Directors provides guidance and inputs to the executive management; reviews plans and performance; advises best management practices and offers suggestions for improvement. With its inclusive management and collaborative culture, where honesty, integrity, innovation, and focus on quality and safety are at the core, resulting in employees being empowered, the Company strives to achieve protection and value-maximisation of the long-term interests of all stakeholders.

Safety

At GOCL, Occupational Health & Safety Management is an article of faith. Participating in and updating the latest safety protocols and their adherence are considered paramount. Your company's Board has a Safety Review Committee which provides very involved oversight to the company's adherence to safety standards and issues.

In recognition of this commitment to excellence, your company has received the Integrated Management System (IMS) certification. Besides, the Initiating Products and Explosives are certified for European markets. Complete transparency in explosives manufacturing, transportation and storage has been implemented and achieved.

CSR commitments

Your company is committed to operating its business in a responsible and conscientious manner. The primary focus areas have been rural development, education and water in line with the Group Founder's ethos. Renovation of schools, providing essential furniture and facilities, and arranging nutritious mid-day meals for the IDL Primary School in Rourkela are some of the steps undertaken positively impacting the area. Recognising the necessity of clean and safe drinking water, an RO drinking water facility in Rourkela has been installed which provides filtered water to nearby residents.

Optimism in Outlook

Despite the recent fluctuations in the price of major raw materials and the increasing competition in the market, your Company has a good order book for the next 2 years. This offers a solid foundation for continued growth and success. Additionally, emphasis on safety, innovative products, process automation and cost reduction will continue to add impetus to operations. Diversifying the product portfolio and increasing our market share in established business lines will continue. Your company will explore new opportunities in diverse domains to generate new revenue streams and strengthen its balance sheet further.

Gratitude

As your company undertakes this aspirational journey, I extend my heartfelt gratitude to all our Shareholders, clients, the Board of Directors, Management, Banks and Regulatory Authorities for their unwavering support and trust in your Company. Your belief in the company's vision inspires the Board and the Management to achieve greater heights of success.

I also want to express my sincere appreciation to our dedicated colleagues. Their hard work and commitment have been crucial in helping us achieve a tremendous year of growth. It shall keep us steadfast in our pursuit of excellence and empower us to adapt to evolving market dynamics and seize new opportunities in maximising the interest of shareholders.

Best regards,

Sudhanshu Tripathi

Chairman.