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Corporate Information
Gujarat Narmada Valley Fertilizers & Chemicals Ltd
Industry : Fertilizers
BSE Code:500670NSE Symbol:GNFCP/E(TTM):5.74
ISIN Demat:INE113A01013Div & Yield %:5.36EPS(TTM):22.76
Book Value (Rupee ):321.3061382Market Cap (Rupee Cr.):2030.56Face Value(Rupee):10
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The Members,

Your Directors have immense pleasure in presenting this 43rd Annual Report on Company's business and operations together with Audited Financial Statements (Standalone and Consolidated) for the Financial Year ended on 31st March, 2019.


During the year under review, the Company has achieved reasonably well progress in the areas of production, marketing and finance. The Company has established total 148 new records on production and marketing fronts.

The financial highlights for FY 2018-19 are summarized below on standalone basis:

(Rs. in Crores)

Particulars Standalone
2018-19 2017-18
Income from operations 5,896 5,917
Other Income 221 141
Total Income 6,117 6,058
Total Expenditure 5,028 4,526
Profit before Depreciation, Finance Cost and Tax 1,089 1,532
Depreciation 263 270
Finance Cost 6 100
Profit Before Tax 819 1,162
Tax Expense 78 372
Net Profit for the year 741 790
Re-measurement of Losses on defined employee benefit plans (Net of tax) 48 27
Balance brought forward from previous year 1,189 635
Amount available for Appropriation 1,882 1,398
Appropriations :
Dividend paid 117 78
Tax on Dividend 24 16
Transferred to General Reserve 175 115
Surplus carried to Balance Sheet 1,566 1,189


The year 2018-19 was one of the challenging years for Chemical business for the country as well as for your Company mainly on account of overall increase in the cost of inputs coupled with increased competition due to free flow of material from international markets. As such the Company has to sale its industrial products keeping parity in prices with imports.

1. Financial Performance :

Your Directors are happy to share with you the highlights of Annual Financial Results (AFRs) achieved by your Company for FY 2018-19 on standalone basis. The overall Financial Performance of your Company have been impacted mainly due to (i) substantial increase in the prices of key raw materials namely, Oil, Benzene, Toluene, Natural Gas, precious metals; (ii) sharp fall in the sale prices of major industrial products of late particularly, TDI, Aniline, Acetic Acid etc. resulting into substantial reduction in the sales realization from these products especially in last two quarters of the year under review and (iii) annual plant shut-down of 27 days which was longest in the last five years affecting the production and sales.

During the year 2018-19, the total turnover was marginally lower to Rs.5896 Crore compared to Rs.5917 Crore achieved during previous year. Profit Before Tax (PBT) and Profit After Tax (PAT) were Rs.819 Crore and Rs.741 crore against Rs.1,162 Crore and Rs.790 Crore in the previous year respectively. The Company has achieved export turnover of Rs.437 Crore during FY 2018-19.

The Net Profit for FY 2018-19 on consolidated basis was Rs.749.74 Crore compared to Rs.794.94 Crore in the previous year.

2. Operational performance :

The Company's operational performance remained satisfactory for FY 2018-19 despite annual plants shutdown of 27 days resulting into lower production to that extent. Most plants have performed at over 100% capacity utilization level and special focus was given on energy conservation and cost saving measures in all operational aspects. Ever highest yearly production was achieved in TDI-I (18,270 MTs - 130.5%) and TDI-II (42,920 MTs - 85.84%) plants. The details of production performance of various plants are furnished in 'Management Discussions and Analysis' forming part of this report.

Currently, TDI-II Plant, Dahej is running smoothly on a consistent basis. Continuous efforts are being made for improving its operations and reliability in terms of consistency, safety and capacity utilization. The Company is implementing various modifications / revamps under 'TDI-II Reliability Phase-II Scheme'. This will help in decreasing downtime and achieving sustainable production.


1. Industrial Products :

The year 2018-19 was challenging year for chemical business in the country due to substantial increase in cost of key inputs and moderate industrial growth coupled with increased competition due to cheaper imports from international markets. Under this competitive scenario, the performance of your Company in chemicals business was satisfactory. During FY 2018-19, the Company sold in aggregate 7,47,718 MTs. of Industrial Products against 7,95,247 MTs. in the previous year and achieved total sales turnover of Rs.3,781 Crore compared to Rs.3,987 Crore in the previous year. The Company has so far exported its major Industrial Products to around 82 Countries across the Globe and is one of the leading suppliers of TDI in the markets of Middle East and Africa. The satisfactory performance of Chemical Segment was mainly attributed to planned marketing strategy and dynamic pricing of Company's products.

2. Fertilizer Business:

The Company performed reasonably well in fertilizers business during FY 2018-19 in spite of poor monsoon in the country. The Company achieved total sale of 6.48 lacs MTs of Urea compared to 6.47 lacs MTs in previous year. The sale of Nitro-phosphate was marginally lower at 2.01 lacs MTs compared to 2.23 lacs MTs in the previous year. Lower sales volume of Nitro-phosphate was due to lower production on account of annual plants shut down of 27 days during October, 2018.

Out of the total sale of fertilizers, around 0.82 Lac MTs of fertilizers were sold through Company's own 68 Narmada Khedut Sahay Kendras.

During the year, trading activities were also continued in Muriate of Potash (MoP), Di-Ammonium Phosphate (DAP), Ammonium Sulphate (AS), Single Super Phosphate (SSP) and City Compost. Total 17,869 MTs of Fertilizers were sold as a part of trading activities.

3. (n)Code Solutions – IT Division:

During the year under review, (n)Code Solutions - IT Division of the Company has also performed reasonably well despite competitive environment scenario in IT business. This division has registered sales turnover of Rs.96 Crore and Profit of Rs.30 Crore across its all business segments. (n)Code provides various IT services in the areas of Digital Signature Certificate and e-Procurement, IT-Infrastructure, Software / Application development and support, Smart City / System Integration, Data Center Operations, Project Management, Quality and Audit Consultancy etc.

In spite of challenges on Manpower iterations, increased compliances and changes in Aadhaar Act, there is a good progress on on-going smart city projects. (n)Code has successfully conducted e-Auctions for various Government Departments and efforts are being made to explore similar market PAN India including for non-government sector. With the increased emphasis on e-governance and data security challenges faced by Government, it will offer good business opportunities for (n) Code solutions in the areas of e-governance, Managed Services and Smart city services projects. To achieve sustained growth in IT business, (n)Code has undertaken several new initiatives in the areas of developing capacity building for projects outside Gujarat, get CMMi-5 certification, Tie-ups with large Original Equipment Manufacturers (OEMs) and developing skills on new technologies viz; ERP with Business Intelligence, Cloud and Managed Services, IT Security Services, Mobile Technologies, Block chain and Artificial Intelligence.

A detailed analysis of Company's operational, sales and financial performance is presented under a separate section on 'Management Discussion & Analysis' forming part of this report.


Keeping in view the Company's performance for FY 2018-19 and to ensure that the shareholders get sustained return on their investment, your Directors have recommended a dividend of Rs.7/- per share (70%) on 15,54,18,783 equity shares of Rs.10/-each, subject to the approval of shareholders at the Annual General Meeting. On its approval, the dividend payout will work out to Rs.131.15 Crore including tax on dividend. This amounts to 17.70% of the Net Profit of the Company.


Your Company has registered a Net Profit of Rs.741.17 Crore for FY 2018-19. After deducting therefrom Rs.48.45 Crore being the re-measurement losses on defined employee benefit plans and adding thereto Rs.1189.46 Crore being the balance of Statement of Profit & Loss brought forward from previous year, an amount of Rs.1882.18 Crore is available for appropriation. Out of this, Rs.140.52 Crore (inclusive of Tax on Dividend) is appropriated towards payment of dividend for FY 2017-18 and Rs.175 Crore is transferred to General Reserve. The balance amount of Rs.1566.66 Crore is proposed to be carried to Balance Sheet.


The Government of India (GoI) has announced continuation of Nutrient Based Subsidy (NBS) rates of FY 2018-19, provisionally also for FY 2019-20 on the same terms and conditions. The fertilizers industry remains vital to agriculture productivity but continues to operate under a rigid control regime.

The Direct Benefit Transfer (DBT) scheme for sale of fertilizers has been implemented throughout the country from March, 2018. Though this scheme is called DBT, the subsidy continues to be routed through the industry. This scheme has changed the 8 business model for fertilizers companies. Subsidy under this scheme become due only on sale of fertilizers by the retailers to farmers through POS (Point of Sales) machines. As a pro-active measures, your Company has adopted retailers oriented marketing strategies in such a manner that the flow of subsidy to the Company has not been affected much.


1. Neem Project :

Your Company's Neem Project is a success story for creating shared value among rural and urban poor people empowering communities with targeted focus on women empowerment through income generation and improved livelihood. During the year under review, 17,467 MTs of Neem seeds were collected from which 932 MTs of Neem Oil and 6972 MTs of De-oiled Neem Cake were produced. With a view to encourage organic farming, your Company produced 152 MTs of Oiled Neem Cakes during FY 2018-19. Neem based products such as Neem soap of different variant, shampoo, Hand wash, Mosquito repellent, Hair oil, Facewash etc. have received good response from the consumers. During FY 2018-19, the sale of Neem products through Company's Neem outlets and parlors was satisfactory.

A large scale Neem oil extraction unit to produce about 2900 MTPA of Neem oil and about 22000 MTPA Neem cake is under implementation.

2. Di-Calcium Phosphate Project :

The Company, through its joint venture Company namely, Ecophos GNFC India Pvt. Ltd. (EGIL) is implementing 2 Lac MTPA Di-Calcium Phosphate (DCP) project at Dahej. It was reported last year that the total estimated project cost would be Rs.538 crores and the same is expected to be completed by September, 2019. However, due to unforeseen circumstances, the project cost is revised and the same is estimated at Rs.565 crore. The project is now expected to be completed by end of 2020. The Company is concentrating on speedy implementation of the said project as downstream integration of TDI-II Plant.


(1) Formic Acid Capacity Enhancement :

Your Company being the only producer of Formic Acid (FA) in India, is implementing Formic Acid Capacity enhancement project from existing 22,000 MTPA to 28,800 MTPA through FA Plant Revamp.The proposed capacity enhancement will help in meeting with country's demand of Formic Acid and will reduce the dependency on import to that extent. The project is expected to be completed by 2021.

(2) Acetic Acid Capacity Enhancement :

The Company being the only producer of Acetic Acid (AA) in India, is actively considering to set up Acetic Acid expansion project to meet with the domestic demand of Acetic Acid. The Company has initiated actions for sourcing the technology for the said capacity enhancement. The level of capacity will be finalized, once the technology supplier is identified.

(3) Concentrated Nitric Acid (CNA) - IV Plant :

With a view to increase the market share of CNA in domestic market, the Company is implementing 150 MTPD CNA-IV project and actions have been initiated for setting up of the said plant. Necessary agreements have been executed with M/s Plinke, Germany for supply of engineering, license, imported critical items, providing expatriate services etc. The said project is likely to be completed by mid 2021.

(4) Ammonia Plant Revamp :

As reported last year, the revamp of Syngas loop which was under implementation was completed in November, 2018. With the completion of this revamp, the production of Ammonia has increased from 1,850 MTPD to 1,900 MTPD.

With a view to further increase Ammonia production capacity from 1,900 MTPD to 2,050 MTPD (50,000 MT per annum), actions have been initiated for installation of make-up gas converter loop in existing ammonia synthesis loop which is expected to be completed by year 2022.

(5) Solar Power Generation Project:

In order to fulfil the Renewable Purchase Obligations (RPO) in terms of Notification issued by Gujarat Electricity Regulatory Commission, the Company is setting up 10 MW Solar Power generation project at Gujarat Solar Park, PO : Charanka, Dist. Patan. Letter of Intent has been issued to M/s Bharat Heavy Electricals Ltd. (BHEL) for implementation of the said project on Engineering, Procurement and Construction (EPC) basis. This project is likely to be completed by mid-2020.

(6) Coal based Captive Co-generation Power Plant :

Presently, the requirement of captive steam and electrical power at TDI-II complex, Dahej is met through 100 MT/hr capacity gas based boiler and sourcing the power from Dakhshin Gujarat Vij Company Ltd. respectively. The annual cost of steam and power is substantially high and the same is on an increasing trend on long term basis. Therefore, with a view to reduce the cost of both the key inputs and to improve their reliability, the Company has initiated actions for setting up Coal based Captive Co-generation Power Plant (CCPP) with a capacity to produce 150 MT/hr steam and 18 MW power with an estimated investment of Rs.432 crore.

The above mentioned new projects / revamp schemes would be implemented with estimated investment between Rs.1500 ~ Rs.2000 Crore.


Your Directors are delighted to inform that the Company's overall performance has been recognized and honored through several prestigious Awards for its best practices, business excellence etc. as follows :

• Porter Prize supported by the Harvard Group for Company's Outstanding performance in the industry.

• CNBC-AWAAZ CEO Award for 'Outstanding Business Growth' from Government of Chhattisgarh in association with CNBC-Awaaz.

• Best Technical Innovation Award by Fertilizer Association of India, New Delhi for reduction in down time and increase operational efficiency in ANP plant.


Pursuant to the provisions of Sections 134(3)(c) read with 134(5) of the Companies Act, 2013, your Directors confirm that-(i) in the preparation of Annual Accounts for the financial year ended 31st March, 2019, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any; (ii) they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at end of the financial year on 31st March, 2019 and of the profit of the Company for that period; (iii) they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, if any; (iv) they had prepared Annual Accounts on a going concern basis; (v) they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and (vi) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of financial year of the Company to which the financial statements relate and the date of the Report.


The Company has Wholly Owned Subsidiary Company and Associate Company namely - Gujarat NCode Solutions Limited (GNSL) and Gujarat Green Revolution Co. Ltd. (GGRCL) respectively. Statements containing salient features of Financial Statements of GNSL and GGRCL are given in Form AOC-1 as Annexures to the Consolidated Financial Statements and the same have not been repeated here for the sake of brevity.

GNSL has not commenced its business operations during FY 2018-19 and therefore, report on its performance and financial position has not been furnished in this Report.

As GNSL has not commenced its business since its incorporation, your Board of Directors had in its meeting held on 29th May, 2019 accorded its approval for removal of the name of GNSL from the records of Register of Companies as permissible under the provisions of Section 248 of the Companies Act, 2013 which inter-alia stipulate that the Company may after complying with necessary formalities, may file an application to the Registrar of Companies for removal of its name on all or any of the grounds specified in Section 248(1) of the Act.

Accordingly, necessary formalities are being made for removal of name of GNSL, the Wholly Owned Subsidiary of the Company, from the records of Registrar of Companies under Section 248(2) of the Companies Act, 2013 and the Rules made thereunder. EcoPhos GNFC India Pvt. Ltd. (EGIL) is a Joint Venture Company and the project execution activities for setting-up of 2 Lac MTPA Di-Calcium Phosphate Project by EGIL are underway. Therefore, report on its operational performance and financial position for FY 2018-19 has not been furnished in this Report.


Pursuant to Section 129(3) of the Act, read with Regulation 33 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, as amended, the Company has prepared Consolidated Financial Statement in respect of its wholly owned subsidiary and Associate Companies viz. Gujarat Ncode Solutions Ltd. and Gujarat Green Revolution Co. Ltd. respectively for FY 2018-19 and forms part of this Annual Report.

As per Indian Accounting Standards, the accounts of Joint Venture Company viz. EcoPhos GNFC India Pvt. Ltd. are not required to be consolidated. Hence, the same are not included in the consolidated financial statements.


As reported last year, your Company had made additional investment of Rs.12 crores in the equity of Bhavnagar Energy Company Ltd. during FY 2018-19. Except this investment, the Company has not made any investment in other bodies corporate or given any Loan or Guarantee or provided any Security in connection with loan to any other body corporate or person.


The Policy for Related Party Transactions (RPTs) deals with review and approval of RPTs and the same is available on the Company's website at web link http://www.gnfc.in/aboutus/corporate-policies.html. The Audit Committee has granted Omnibus approval for RPTs, which are routine and repetitive in nature, based on the criteria approved by the Board of Directors within the overall framework of the said policy. All RPTs under omnibus approval are placed before the Audit Committee periodically for its review and approval.

The Company has not entered into any contract or arrangement with related parties, as referred to in Section 188(1) of the Companies Act, 2013 during FY 2018-19. Hence, the disclosure of RPTs in Form AOC-2 as required under Section 134(3)(h) of the Act is not applicable to your Company. Details of Related Party disclosure as per Ind AS-24 have been given in Note No. 37 to the Standalone Financial Statement.

Requisite details on RPTs have also been furnished in the 'Report on Corporate Governance' forming part of this Report.


Four (4) meetings of the Board were held during the year.

(ii) Committees of the Board :

Currently, there are Seven Committees of the Board as under:
1. Audit Committee;
2. Stakeholders' Relationship Committee;
3. Nomination and Remuneration Committee;
4. Corporate Social Responsibility Committee
5. Risk Management Committee;
6. Project Committee; and;
7. Human Resource Development Committee.

Details of composition of Board and its Committees, which are mandatorily required to be constituted, major terms of reference of these Committees, meetings held during the year and attendance of Directors at such meetings are furnished in 'Report on Corporate Governance' forming part of this Report.

All the recommendations made by the Audit Committee were accepted by the Board.


The Company has formulated a Nomination, Remuneration & Evaluation Policy as required under Section 178 of the Act and SEBI (Listing Obligations & Disclosure Requirements), Regulations, 2015. The details of remuneration paid to Directors / Key Managerial Personnel / Senior Management and other employees are furnished in the 'Report on Corporate Governance', forming part of this Report.


The Company has carried out annual performance evaluation of the Board, its Committees and Individual Directors in line with the provisions of the Act and SEBI (LODR) Regulations, 2015 as amended from time to time.


During the year, Shri V.D.Nanavaty ceased to be the Director of the Company effective 3rd October, 2018. Shri C.S.Mani, Independent Director of the Company tendered resignation as Director from the Board of the Company effective 23rd July, 2019 due to his old age and ill-health.

In terms of Section 161 of the Companies Act, 2013, Shri Sujit Gulati, IAS, Managing Director, Gujarat State Fertilizers and Chemicals Ltd. was appointed as an Additional Director on the Board of the Company effective 9th October, 2018. He will hold office of Director up to the date of this AGM whereat he will be appointed as Rotational Director. A suitable resolution proposing his appointment as Rotational Director is included in the Notice of this AGM for your kind approval.

Retirement of Director(s) by Rotation:

In terms of Section 152 of the Act, Smt. Mamta Verma, IAS will retire by rotation at this AGM and is proposed to be re-appointed thereat.

Declaration by Independent Directors:

In terms of Section 149(7) of the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has received necessary declarations from all Independent Directors to the effect that they meet with the criteria of independence as laid down in Section 149(6) of the Act and Regulation 16(1)(b) of Listing Regulations, 2015 as amended.

Change in Directorate :

The information relating to change in Directorate during the year is furnished in the 'Report on Corporate Governance' forming part of this Report.

Your Directors place on record their deep sense of appreciation for the valuable services rendered by the outgoing Director(s) and take this opportunity to welcome the incoming Director(s).

Key Managerial Personnel :

During the year under review, there is no change in the Key Managerial Personnel of the Company.


Pursuant to the applicable provisions of the Act, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('the Rules') as amended, all unpaid or unclaimed dividends which were required to be transferred by the Company to the IEPF were transferred to IEPF Authority. The Company has also transferred 2,33,203 shares held by 3,708 Shareholders in respect of which dividend amount remained unpaid / unclaimed for a consecutive period of seven years or more to IEPF Authority within stipulated time.

The details of unpaid / unclaimed dividend and the shares transferred to IEPF Authority are available on Company's website at web link- https://www.gnfc.in/transfer-of-shares-to-iepf-authority.html.


Requisite details have been furnished in 'Report on Corporate Governance' forming part of this Report.


The Company has in place a Risk Management Policy. Under this Policy, various risks pertaining to operations & maintenance of plants, financial and other organizational risks are assessed, evaluated and continuously monitored for taking effective steps for its mitigation.

In compliance with Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the Board has constituted a Risk Management Committee (RMC) defining its terms of reference in its meeting held on 11th February, 2019. The details as to the constitution of RMC and its major terms of reference is included in the 'Report on Corporate Governance' forming part of this report.

The Risk Management Report, inter-alia, containing major anxiety areas of risks and action plan for its mitigation and noteworthy risk management activities carried out by the Company is put-up before the Meetings of the Audit Committee, RMC and Board of Directors for its review.

The Company has adequate internal controls commensurate with the nature of business, size and complexity of its operations. Details of internal control system and its adequacy are furnished in 'Management Discussion & Analysis Report', forming part of this Report.


As per the requirement of Section 92(3) of the Companies Act, 2013 read with Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, the extract of the Annual return in Form No. MGT-9 is given in Annexure - A to this Report. The same is available on Company's Website at web-link - https://www.gnfc.in/PDFandWORD/GNFC_MGT-9_2019.pdf.


In accordance with the requirement of Section 135 of the Act, read with the Companies (CSR Policy) Rules, 2014, the Company has constituted a Corporate Social Responsibility Committee and formulated a CSR Policy. As a responsible corporate, the Company has been undertaking societal activities directly as well as through its CSR arm - Narmadanagar Rural Development Society (NARDES) in the areas which are covered in CSR Policy and Schedule-VII to the Act.

Company's CSR Policy is available on the website of the Company at web link http://www.gnfc.in/corporate-social-responsibility.html Annual Report on CSR activities as required under Rule 9 of Companies (Accounts) Rules, 2014 read with Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed as Annexure - B to this Report. The said Report on CSR activities inter-alia includes the reasons for not spending the amount of 2% of average net profits of last three financial year by the Company as required under section 135(5) of the Companies Act, 2013.


The Company has formulated a 'Vigil Mechanism-cum-Whistle Blower Policy' for its Directors and Employees to report their genuine concerns, details of which have been furnished in the 'Report on Corporate Governance', forming part of this Report.


There are no significant or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in future.


'Management Discussion & Analysis' on the business and operations of the Company and the Report on Corporate Governance together with the following are attached herewith and form part of this Annual Report.

• Declaration by Managing Director regarding compliance of Company's Code of Conducts by Board Members and Senior Management Personnel.
• Certificate by Practicing Company Secretary certifying :

(i) compliance of the conditions of Corporate Governance by the Company and

(ii) that none of the Directors of the Company have been debarred or disqualified from being appointed or continuing as Directors of Companies by the Securities and Exchange Board of India / Ministry of Corporate Affairs or any such statutory authority.


The Company has been conducting its business in such a way that it delivers both long term stakeholders value and benefit society under the approach of 'Creating Shared Value'. As required under Regulation 34 of SEBI (LODR) Regulations, 2015, Business Responsibility Report is enclosed as Annexure-C to this Report.


As required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, requisite information on conservation of energy, technology absorption and foreign exchange earnings and outgo is furnished in enclosed Annexure - D to this Report.


The required information under Section 197(12) of the Act read with Rule 5(1)(2)&(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in enclosed Annexures - E & F to this Report.


Pursuant to the provisions of Section 139 and other applicable provisions of the Companies Act, 2013 and relevant rules made their under, the members had at their 40th AGM held on 30th September,2016 appointed M/s SRBC & Co. LLP, Chartered Accountants, a Member Firm of E&Y India as Statutory Auditors of the Company for a term of five consecutive years, until the conclusion of 45th AGM to be held in the year 2021, on such remuneration as may be determined by the Board of Directors based on the recommendation of Audit Committee plus Applicable taxes and reasonable out of pocket expenses actually incurred by them during the course of Audit and subject to ratification of their appointment at every AGM held thereafter.

In view of amendment in Section 139(1) vide the Companies Amendment Act, 2017, ratification for appointment of Statutory Auditors is not required at every AGM when Auditors have been appointed for a term of five years. Hence, suitable resolution therefore, is not included in the Notice of this AGM.

Notes to Financial Statements (Standalone and Consolidated) forming part of Audited Financial Statements for FY 2018-19 are self-explanatory and need no further explanation. The Auditors' Reports on Audited Financial Statements (Standalone and Consolidated) do not contain any modified opinions.


The Board of Directors had on the recommendations of Audit Committee, appointed M/s Dalwadi & Associates, Cost Accountant, Ahmedabad, as the Cost Auditor of the Company for a period of three years from FY 2017-18 to 2019-20 at a remuneration of Rs.3.80 Lac per annum for FY 2017-18 and thereafter increase of 10% every year up to FY 2019-20 plus out of pocket expenses and statutory levies.

In accordance with Section 148 of the Act read with Rule 14 of the Companies (Audit & Auditors) Rules, 2014, the remuneration of Rs.4.60 Lac per annum payable to Cost Auditor for FY 2019-20 is subject to ratification by the Shareholders at the AGM. Therefore, a suitable Resolution in this regard has been proposed in the Notice of this AGM for your kind approval.

The Company had e-filed the Cost Audit Report for FY 2017-18 with the Ministry of Corporate Affairs (Cost Audit Branch) on 18th August, 2018. The due date of filing the said Report was 30th September, 2018.


In pursuance of Section 204 of the Act and the Rules made thereunder, the Board of Directors in its meeting held on 11th February, 2019 had re-appointed M/s J.J.Gandhi & Co., Practicing Company Secretaries, Vadodara as Secretarial Auditor for FY 2018-19. The Secretarial Audit Report in Form MR-3 in respect of Secretarial Audit work carried out by them for FY 2018-19 is enclosed as Annexure - G to this report. The said Report does not contain any qualification, reservation or adverse remark.


As per Regulation 43A of SEBI (LODR) Regulations, 2015, Dividend Distribution Policy of the Company inter-alia, set-out the various parameters and circumstances that are to be taken into account while determining the distribution of dividend to the shareholders and / or retaining profits by the Company. The said policy is enclosed as Annexure - H to this Report and the same is also available on the Company's website at web link http://www.gnfc.in/PDFandWORD/Dividend-Distribution-Policy.pdf


The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government.


During the year, there was no fraud to be reported by Auditors under Section 143(12) of the Act.


The Company has not accepted any Fixed Deposit during the year.


The properties, insurable assets and interest of the Company such as buildings, plants & machineries and stocks amongst others, are adequately insured. As required under Public Liability Insurance Act, 1991, the Company has also taken necessary insurance cover.


The Industrial Relations within the Company remained cordial and harmonious throughout the year. Cordial Industrial Relations have been a forte at the Company. It has helped the Company to achieve satisfactory performance on operational and financial front and in achieving targets without any difficulties.

Your Directors put on record their sincere appreciation for the dedicated and committed contributions made by all employees at all levels for the sustainable growth of the Company.


The Board of Directors wish to place on record their deep sense of gratitude for the kind support and guidance received from Government of India and Government of Gujarat. Your Directors also take this opportunity of extending their wholehearted thanks to all our Consumers, Dealers, Customers, Banks, Business Associates, SEBI, NSDL, CDSL, Stock Exchanges and other Agencies for their continued support and co-operation and valued Investors for strengthening their bond with the Company.

For and on behalf of the Board of Directors,
Dr. J.N. Singh
Dated : 14th August, 2019 Chairman