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Gujarat Narmada Valley Fertilizers & Chemicals Ltd.

BSE: 500670 Sector: Agri and agri inputs
NSE: GNFC ISIN Code: INE113A01013
BSE 00:00 | 24 Sep 405.65 18.60






NSE 00:00 | 24 Sep 405.45 17.75






OPEN 393.80
VOLUME 239880
52-Week high 425.00
52-Week low 183.25
P/E 6.80
Mkt Cap.(Rs cr) 6,305
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 393.80
CLOSE 387.05
VOLUME 239880
52-Week high 425.00
52-Week low 183.25
P/E 6.80
Mkt Cap.(Rs cr) 6,305
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Gujarat Narmada Valley Fertilizers & Chemicals Ltd. (GNFC) - Director Report

Company director report


The Members

Your Directors have immense pleasure in presenting this 44th Annual Report on theCompany's business and operations together with Audited Financial Statements (Standaloneand Consolidated) for the Financial Year (FY) ended on 31st March 2020.


During the year under review the Company achieved satisfactory performance onoperational and financial fronts. The Company established total 123 new Records during FY2019-20 out of which 98 and 25 Records were established in Production and Sale / Dispatchrespectively.

The Financial Highlights on Standalone basis are summarized below:

(Rs. in Crore)
Particulars 2019-20 2018-19
Income from operations 5162 5896
Other Income 153 221
Total Income 5315 6117
Total Expenditure 4621 5028
Profit before Depreciation Finance Cost and Tax 694 1089
Depreciation 264 263
Finance Cost 5 6
Profit Before Tax 425 819
Tax Expense (74) 78
Net Profit for the year A 499 741
Re-measurement of Losses on defined employee benefit plans (Net of tax) B (14) (48)
Balance brought forward from previous year C 1566 1189
Amount available for Appropriation A+B+C 2051 1882
Appropriations :
Dividend paid 109 117
Tax on Dividend 22 24
Transferred to General Reserve - 175
Surplus carried to Balance Sheet 1920 1566

Emergence of Covid-19

Towards the end of the financial year the World Health Organization (WHO) declaredCovid-19 a pandemic and the outbreak which infected millions has resulted in deaths of asignificant number of people globally. Covid-19 is seen having an unprecedented severeimpact on people and economies worldwide.

The Company is taking all required measures in terms of mitigating the impact of thechallenges being faced in its business. The Company is working towards being resilient inorder to sail through the current situation. It has focused on controlling the fixedcosts maintaining liquidity and closely monitoring the supply chain to ensure that themanufacturing facilities operate smoothly.

In order to support the State Governments and the community at large the Company hassupplied hand sanitizers food kits etc. as a part of CSR activities. In addition tothis the Company also contributed Rs.10.00 Crores to the “Chief Minister's ReliefFund” Gujarat to fight against outbreak of Covid-19 Pandemic in Gujarat. TheEmployees have also contributed their one-day Salary for this noble cause.


1.0 Operational Performance:

Your Company has achieved excellent operational performance during the year underreview and in the process achieved ever highest yearly production in major Plants viz.Ammonia (688567 MTs i.e. 154.56%) Formic Acid (22547 MTs i.e. 225.47%) Acetic Acid(166665 MTs i.e. 166.67%) Urea including Technical Grade (829656 MTs i.e. 130.27%)Weak Nitric Acid I&II (441125 MTs i.e. 126.94%) TDI-I (19519 MTs i.e. 139.42%).Most Plants performed at over 100% capacity utilization level and special focus was givenon energy conservation and cost saving measures across all operational aspects. During theFY 2019-20 TDI-II Plant at Dahej also achieved production of 40712 MTs with capacityutilization of 81%. Lower capacity utilization is mainly attributable to poor marketsentiments during the Q3 of FY 2019-20 resulting in to Plant stoppage due to highinventory followed by Annual Planned shutdown of about one and half months and the adverseimpact of Covid-19 pandemic. The operational reliability of TDI-II Plant has improved onaccount of implementation of various ongoing reliability measures / schemes by yourCompany.

2.0 Financial Performance:

Your Directors are happy to share with you the highlights of Annual Financial Results(AFRs) achieved by your Company for the FY 2019-2020 on Standalone basis. While theperformance of Chemical Segment remained satisfactory with segment profit of Rs. 166Crore the Fertilizer Segment also performed better with segment profit of Rs. 216 Croreduring FY

2019-20. The continued emphasis on higher productivity efficiency improvement energysaving cost control / saving measures and concerted efforts at all levels have resultedinto achieving satisfactory Financial Results for FY 2019-20. However Financials havebeen adversely impacted mainly due to (i) increase in the prices of Key Raw Materials vizOil Benzene Toluene Natural Gas etc. (ii) reduction in sale prices of major industrialproducts namely TDI Aniline Acetic Acid Formic Acid Ethyl Acetate resulting intosubstantial reduction in both Revenue and Operating Profit.

During the year 2019-20 the Company achieved total turnover of Rs. 5162 Crore comparedto Rs. 5896 Crore during FY 2018-19. Profit Before Tax (PBT) and Profit After Tax(PAT) stood at Rs. 425 Crore and Rs. 499 Crore against Rs. 819 Crore and Rs. 741Crore in the FY 2018-19 respectively. The Company has achieved export turnover of Rs.302Crore during the FY 2019-20. Net Profit on Consolidated basis was Rs. 508 Crore for the FY2019-20 compared to Rs. 750 Crore in FY 2018-19.


1.0 Industrial Products:

The year 2019-20 was challenging year for Chemical business in the Country due tosubstantial increase in cost of key inputs coupled with increased competition due tocheaper imports from International Markets. Moreover COVID-19 pandemic will havecascading adverse effects on all the business worldwide with no exception to the ChemicalIndustry wherein prices of Chemicals were already seeing a downward pressure since2018-19. Under this competitive scenario Chemical business has positively contributed tothe profitability of the Company despite majority of chemicals witnessing a downwardpricing trend in International as well as domestic market. The performance of Chemicalsbusiness was satisfactory and substantially contributed in the profitability of yourCompany. During FY 2019-20 the Company sold in aggregate 776176 MTs of IndustrialProducts against 747718 MTs during FY 2018-19 and achieved total sales turnover of Rs.2836 Crore as compared to Rs. 3781 Crore during FY 2018-19. The satisfactory performanceof Chemical Segment was mainly attributed to planned marketing strategy and dynamicpricing of the Company's products. Ever highest sales was recorded in AN Melt.

The Company is one of the largest producers of Industrial Chemicals in India with TDIAcetic Acid and Formic Acid being its core products. The Company is the onlymanufacturer of Toluene Di Isocyanate (TDI) in South-East Asia. The Company has so farexported its products to more than 80 countries worldwide. The satisfactory performance ofChemical Segment was mainly attributed to planned marketing strategy and dynamic pricingof Company's products.

2.0 Fertilizer Business:

Your Company performed reasonably well in fertilizers business during FY 2019-20. TheCompany achieved total sale of 6.78 lacs MTs of Urea which was ever highest as comparedto 6.48 lacs MTs in FY 2018-19. The sale of Nitro phosphate was marginally lower at 1.85lacs MTs compared to 2.01 lacs MTs in FY 2018-19. Lower sales volume of Ammonium Nitrophosphate (ANP) was due to effect of Covid-19 pandemic in the last month of FY 2019-20.The Company sold around 67000 MTs fertilizers through Company's own 57 Narmada KhedutSahay Kendras out of the total 879323 MTs of fertilizers sold by the Company in FY2019-20.

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 CityCompost. Total 16107 MTs of Fertilizers were sold as a part of trading activities.

3.0 (n)Code Solutions – IT Division:

During the year under review (n)Code Solutions - IT Division of the Company has alsorealigning itself to better service the needs of its customer base and creating newerbenchmarks by achieving CMMiSVC level 5 which is highest level of order in servicedomain. This division has registered sales turnover of Rs. 75 Crore and Profit of Rs. 20Crore across its all business segments. (n)Code services have delivered recognition to itscustomers at national level and has started to leave its foot print in Smart City / SystemIntegration domain. It has been recognized in domestic market for its excellence in DataCenter set-up and maintenance and on international level for Data Security. While (n)Codehas been delivering services it has carved a niche and is now known to be the mostcompliance organization due to IT services in areas of Digital Signature Certificate ande-Procurement with high level of transparency. (n)Code has been instrumental in supportingGOI's “Ease of doing Business” initiative by extending Software / Applicationdevelopment and support Smart City / System Integration Data Centre Operations ProjectManagement Quality and Audit Consultancy etc.

The challenges on Manpower iterations and increased compliances have made (n)Code agilein its execution methodology. There is good progress on on-going smart city projects.(n)Code has now set a vision to spread its wings pan India to deliver convenience tobusiness using its suit of software products.

An analysis of Company's operational sales and financial performance is presentedunder a separate section on “Management Discussion & Analysis” forming partof this report.


Keeping in view the Company's performance for FY 2019-20 long term growth strategy andto ensure that the shareholders get sustained return on their investment your Directorshave recommended a dividend of Rs.5/- per share (@50%) on 155418783 equity shares ofRs.10/- each fully paid up subject to approval of shareholders at the Annual GeneralMeeting. On its approval the dividend payout will work out to Rs.77.71 Crore. Thisamounts to 15.58% of the Net Profit of the Company.


Your Company has registered a Net Profit of Rs.498.85 Crore for FY 2019-20. Afterdeducting therefrom Rs.14.42 Crore being the re-measurement losses on defined employeebenefit plans and adding thereto Rs.1566.66 Crore being the balance of Statement of Profit& Loss brought forward from previous year an amount of Rs.2051.09 Crore is availablefor appropriation. Out of this Rs.131.15 Crore (inclusive of Tax on Dividend) isappropriated towards payment of dividend for FY 2018-19. The balance amount of Rs.1919.94Crore is proposed to be carried to Balance Sheet.


The Government of India announced Nutrient Based Subsidy (NBS) rates for FY 2020-21 atthe rate of Rs.6735/- per MT for ANP. There is a marginal reduction in the rates ofsubsidy per MT compared to previous year. The Fertilizer Industry remains vital toagriculture productivity but continues to operate under a rigid control regime.

The Direct Benefit Transfer (DBT) Scheme for fertilizers was implemented through-outthe Country from March 2018. Though the Scheme is called DBT subsidy continues to berouted through the Industry. This Scheme has changed the business model for FertilizersCompanies. Under this Scheme the Subsidy becomes due only on sale of fertilizers by theRetailers to the farmers through POS (Point of Sales) machines. Earlier 95% and 90% of thesubsidy amount of Urea and Nitro Phosphate respectively were paid on receipt offertilizers at the field warehouses/retailers.

As a pro-active measure your Company has adopted Retailers oriented marketingstrategies in such a way that the flow of Subsidy has not been affected much. Sales ofCompany's fertilizers to farmers through POS machines almost matched with dispatch offertilizers by the Company.


Your Company is continuously looking for the growth opportunities and has initiatedactions for implementation of various projects / Revamp Schemes as under:

1. Formic Acid Capacity Enhancement:

Your Company is implementing Formic Acid (FA) capacity enhancement Project to increasethe capacity by 20 MTPD (6800 MT per annum). The Project will be completed by secondQuarter of F.Y. 2021-22 and total capacity of FA would be 85 MTPD.

2. Concentrated Nitric Acid (CNA) – IV Plant:

With the increase in captive consumption of CNA for TDI market share of the Company isreducing. Hence the Company is implementing CNA-IV Project with a capacity of 150 MTPD.The Project will be completed by second Quarter of F.Y. 2021-22.

3. Solar Power Generation Project:

To fulfill Renewable Purchase Obligation 10 MW Solar Power Project at Charanka SolarPark P.O: Charanka Dist.: Patan is under implementation. The Project will be completed bysecond Quarter of F.Y. 2021-22.

4. Ammonia Plant revamp:

It is possible to increase the Ammonia production capacity from 1900 MTPD to 2050MTPD by installation of Ammonia Make-up Gas Convertor Loop in existing Ammonia SynthesisLoop. This will increase Ammonia production by 50000 MT per annum. Actions have beeninitiated for implementation of this revamp and it is expected to be completed by thirdQuarter of F.Y. 2023-24.

5. The Neem Project:

A large scale Neem Seed expelling / extraction unit is under implementation to produceabout 2900 MT Neem oil and about 22000 MT per annum Neem cake and it is expected to becompleted by second Quarter of F.Y. 2021-22.

6. Coal based Captive Co-generation Power Plant (CCPP) at Dahej:

The Company has set up 100 MT/Hr capacity Gas Based Boiler at TDI-II Complex Dahej tomeet captive steam requirement while power is being sourced from DGVCL Grid. There islarge variation in gas prices. In order to reduce cost of steam and power and to improvetheir reliability a coal based Captive Co-generation Power Plant with a capacity toproduce 18 MW power and 150 MT/hr steam is actively being considered.

The above mentioned new Projects / Revamp Schemes would be implemented with estimatedinvestment between Rs.1000 ~ Rs. 1200 Crore.


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

1) 4th Rank in Environmental Green rating of Indian Fertilizer Industry under its GreenRating Project (GRP).

2) Participated in_ 16th_ National Awards for Excellence in Cost Management 2018_arranged by_ the Institute of Cost Accountants of India and the Company got Third Positionin the Category of Manufacturing - Public Sector - Mega Unit.


Pursuant to the provisions of Sections 134(3)(c) read with 134(5) of the Companies Act2013 your Directors confirm that–

(i) in the preparation of Annual Accounts for the financial year ended 31st March2020 the applicable Accounting Standards had been followed along with proper explanationrelating to material departures if any;

(ii) they had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at end of the financial year on 31st March 2020and of the profit of the Company for that period;

(iii) they had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities 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 andthat such internal financial controls are adequate and were operating effectively; and

(vi) they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.


In terms of the approval accorded by the Board of Directors in its Meeting held on11-02-2020 the Securities held by GNFC Employees' Fund Trust were transferred at fairvalue to the Company amounting to Rs.730.71 Crores due to surrendering of exemption ofGNFC Employees' Provident Fund Trust to the Employees' Provident Fund Organization (EPFO)Government of India w.e.f. 31st March 2020.


The Company has Associate Company namely Gujarat Green Revolution Co. Ltd. (GGRCL). TheStatements containing salient features of Financial Statements are given in Form AOC-1 asAnnexures to the Consolidated Financial Statements and the same have not been repeatedhere for the sake of brevity.

The Company had incorporated Wholly Owned Subsidiary Company namely Gujarat NcodeSolutions Limited (GNSL) in the year 2017. As the Company has not commenced its businessoperations the Company filed an application to the Registrar of Companies for removal ofits name from the Register of Companies in terms of Section 248(1) of the Act and the sameis under process. Ecophos GNFC India Pvt. Ltd. (EGIL) a Joint Venture Company was promotedwith EcoPhos S.A. Belgium (EcoPhos). EGIL has not been able to commence its business sofar due to financial and administrative limitations. Hence the Operational and Financialperformance are not furnished in this Report. As informed by the Trustee / Curatorappointed by the Belgian Court EcoPhos is declared Bankrupt under the Laws of Belgium.The Trustee has begun Liquidation proceedings for EcoPhos under the Bankruptcy Laws ofBelgium.


Pursuant to Section 129(3) of the Act read with Regulation 33 of the SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 [SEBI (LODR) Regulations2015] as amended the Company has prepared Consolidated Financial Statements in respectof Associate Company viz. Gujarat Green Revolution Co. Ltd. for the FY 2019-20 and formspart of this Annual Report. As per the Indian Accounting Standards (Ind AS) the Accountsof the Joint Venture Company viz. EcoPhos GNFC Pvt. Ltd. (EGIL) are not required to beconsolidated. Therefore the same are not included in the Consolidated FinancialStatements.


The Company has not made any investment in other bodies corporate or given any Loan orGuarantee or provided any Security in connection with loan to any other body corporate orperson during the F.Y. 2019-2020.


The Policy for Related Party Transactions (RPTs) deals with review and approval of RPTsand the same is available on the Company's website at web link The Audit Committee has granted Omnibusapproval for RPTs which are routine and repetitive in nature based on the criteriaapproved by the Board of Directors within the overall framework of the said Policy. AllRPTs under the Omnibus approval are placed before the Audit Committee periodically for itsreview and approval. The Company has not entered into any contract or arrangement withrelated parties as referred to in Section 188(1) of the Act during the FY 2019-20. Hencethe disclosure of RPTs in Form AOC-2 as required under Section 134(3)(h) of the Act is notapplicable to your Company. Details of Related Party as per Ind AS-24 are given in NoteNo. 37 to the Standalone Financial Statements. Requisite details on RPTs have also beenfurnished in the ‘Report on Corporate Governance' forming part of this Report.


(i) Board Meeting:

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

(ii) Committees of the Board:

Presently there are seven Committees of the Board as follows:

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 the Board and its Committees which are mandatorily requiredto be constituted Major Terms of Reference of these Committees Meetings held during theyear and Attendance of Directors at such Meetings are furnished in the ‘Report onCorporate 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 asrequired under Section 178 of the Act and SEBI (LODR)Regulations 2015. The details ofremuneration paid to Directors / Key Managerial Personnel / Senior Management and otheremployees are furnished in the Report on Corporate Governance forming part of thisReport.


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


Chairman of the Company:

Dr. J. N. Singh IAS (Retd.) has tendered his resignation as Director and Chairman onthe Board effective from 06th December 2019. Shri Anil Mukim IAS Chief Secretary toGovernment of Gujarat (GoG) was nominated by GoG as Government Nominee Director on theBoard vice Dr. J. N. Singh IAS (Retd). Accordingly Shri Anil Mukim IAS has beenappointed as Nominee Director and Chairman of the Company w.e.f. 13th December 2019.

Retirement of Director(s) by Rotation:

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

Declaration by Independent Directors:

In terms of Section 149(7) of the Act and SEBI (LODR)Regulations 2015 the Company hasreceived necessary declarations from all Independent Directors to the effect that theymeet with the criteria of independence as laid down in Section 149(6) of the Act andRegulation 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 onrecord their deep sense of appreciation for the valuable services rendered by the outgoingDirector(s) and take this opportunity to welcome the incoming Director(s).

Key Managerial Personnel:

During the year under review Shri A C Shah (ACS No. 07564) has been appointed as“Company Secretary Compliance Officer and Key Managerial Personnel” of theCompany w.e.f. 11th February 2020 in place of Shri T. J. Lakhmapurkar resigned.


Pursuant to the applicable provisions of the Act read with the IEPF Authority(Accounting Audit Transfer and Refund) Rules 2016 (‘the Rules') as amended allunpaid or unclaimed dividends which were required to be transferred by the Company to theIEPF were transferred to IEPF Authority. The Company has also transferred 265553 sharesheld by 4403 Shareholders in respect of which dividend amount remained unpaid / unclaimedfor 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 Authorityare available on the Company's website at web links- and respectively.


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 riskspertaining to Operations & Maintenance of Plants financial and other organizationalrisks are assessed evaluated and continuously monitored for taking effective steps forits mitigation.

In compliance with Regulation 21 of SEBI (LODR) (Amendment) Regulations 2018 theBoard of Directors has constituted a Risk Management Committee (RMC) defining its Terms ofReference (ToR) in its Meeting held on 11th February 2019. The details as to theconstitution of RMC and its major ToR are included in the Report on Corporate Governanceforming part of this Report. The Risk Management Report inter-alia containing majoranxiety areas of risks and action plan for its mitigation and noteworthy risk managementactivities carried out by the Company is put-up before the Meetings of the AuditCommittee RMC and the Board of Directors for its review. The Company has adequateinternal controls commensurate with the nature of business size and complexity of itsoperations. 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 Act read with Rule 12 (1) of theCompanies (Management and Administration) Rules 2014 the Extract of the Annual return inthe Form MGT-9 is given in Annexure - A to this Report. The same is available on theCompany's Website at web-link -


In accordance with the requirements of Section 135 of the Act read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the Company has constituted aCorporate Social Responsibility Committee and formulated a CSR Policy. As a responsiblecorporate the Company has been undertaking societal activities directly as well asthrough its CSR arm – Narmadanagar Rural Development Society (NARDES) in the majorareas which are covered in CSR Policy and Schedule-VII to the Act. Company's CSR Policyis available on the website of the Company at web link html Annual Report on CSR activitiesas required under Rule 9 of the Companies (Accounts) Rules 2014 read with Rule 8 ofCompanies (Corporate Social Responsibility Policy) Rules 2014 is enclosed as Annexure - Bto this Report. The said Report on CSR activities inter-alia includes the reasons for notspending the amount of 2% of average net profits of last three financial years by theCompany as required under Section 135(5) of the Act.


The Company has formulated a “Vigil Mechanism-cum-Whistle Blower Policy” forits Directors and Employees to report their genuine concerns details of which have beenfurnished in the “Report on Corporate Governance” forming part of this Report.


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


“Management Discussion & Analysis” on the business and operations of theCompany and the Report on Corporate Governance together with the followings are attachedherewith and form part of this Annual Report.

Declaration by Managing Director regarding compliance of the Company's Code of Conductby the 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 frombeing appointed or continuing as Directors of Companies by the Securities and ExchangeBoard 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 longterm stakeholders' value and benefit Society under the approach of “Creating SharedValue”. As required under Regulation 34 of the SEBI (LODR) Regulations 2015 BusinessResponsibility Report is enclosed at 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 TechnologyAbsorption and Foreign Exchange Earnings and Outgo is furnished in the enclosed Annexure -D to this Report.


The required information under Section 197(12) of the Act read with Rule5(1)(2)&(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is furnished in the enclosed Annexures - E & F to this Report.


Pursuant to the provisions of Section 139 and other applicable provisions of the Actand relevant Rules made there under the Members of the Company had at their 40th AGM heldon 30th September 2016 appointed M/s SRBC & Co. LLP Chartered Accountants a MemberFirm of E&Y India as Statutory Auditors of the Company for a term of five consecutiveyears until the conclusion of 45th AGM to be held in the year 2021 on such remunerationas may be determined by the Board of Directors based on the recommendation of AuditCommittee plus applicable taxes and reasonable out of pocket expenses actually incurred bythem during the course of Audit and subject to ratification of their appointment at everyAGM held thereafter. However in view of the amendment in Section 139(1) vide theCompanies Amendment Act 2017 ratification for appointment of Statutory Auditors is notrequired at every AGM when the Auditors have been appointed for a term of five years.Hence resolution for the same is not included in the Notice of this AGM. Notes toFinancial Statements (Standalone and Consolidated) forming part of Audited FinancialStatements for FY 2019-20 are self-explanatory and need no further explanation. TheAuditors' Reports on Audited Financial Statements (Standalone and Consolidated) do notcontain any Modified Opinions.


The Board of Directors in its Meeting held on 10-07-2020 based on the recommendationsof Audit Committee has appointed M/s Dalwadi & Associates Cost AccountantsAhmedabad as the Cost Auditor of the Company for the F.Y. 2020-21 at a remuneration ofRs.4.60 Lakhs per annum plus out of pocket expenses and statutory levies. In accordancewith Section 148 of the Act read with Rule 14 of the Companies (Audit & Auditors)Rules 2014 the remuneration of Rs.4.60 Lakhs per annum payable to Cost Auditors for theFY 2020-21 is subject to ratification by the Shareholders at the AGM. Therefore asuitable Resolution in this regard has been proposed in the Notice of this AGM for yourapproval. The Company had e-filed the Cost Audit Report for the FY 2018-19 with theMinistry of Corporate Affairs (Cost Audit Branch) on 11th September 2019. The due date offiling the said Report was 30th September 2019.


In pursuance of Section 204 of the Act and the Rules made thereunder the Board ofDirectors in its Meeting held on 11-02-2020 re-appointed M/s J.J.Gandhi & Co.Practicing Company Secretaries Vadodara as Secretarial Auditor for FY 2019-20. TheSecretarial Audit Report in Form MR-3 in respect of Secretarial Audit work carried out bythem for FY 2019-20 is enclosed at Annexure – G to this Report. The said Report doesnot contain any qualification reservation or adverse remark.


As per Regulation 43A of SEBI (LODR) Regulations 2015 Dividend Distribution Policy ofthe Company inter-alia set-out the various parameters and circumstances that are to betaken into account while determining the distribution of dividend to the Shareholders and/ or retaining profits by the Company. The said Policy is enclosed at Annexure – H tothis Report and the same is also available on the Company's website at web link


The Company has complied with the applicable Secretarial Standards issued by theInstitute 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) ofthe 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 underPublic Liability Insurance Act 1991 the Company has also taken necessary insurancecover.


The Industrial Relations within the Company remained cordial and harmonious throughoutthe year. Cordial Industrial Relations have been a forte at the Company. It has helped theCompany to achieve satisfactory performance on Operational and Financial front and inachieving targets without any difficulties.

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


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

For and on behalf of the Board of Directors
Shri Anil Mukim IAS
Place : Gandhinagar
Date: 14th July 2020