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.