GFL L Director Report

To the Members of

GUJARAT FLUOROCHEMICALS LIMITED

The Directors take pleasure in presenting to you their Thirty First Annual Report for the Financial Year ended on 31^st March, 2018.

1. Financial Results

Following are the working results for the Financial Year 2017-18:

Sr. No.	Particulars	Consolidated		Standalone
		Rs.in Lakhs		Rs.in Lakhs
		2017-18	2016-17	2017-18	2016-17
I Revenue from Operations		3,92,129	6,39,295	2,08,431	1,53,206
II	Other income	13,279	11,373	10,302	7,112
III	Total Revenue Income (I II)	4,05,408	6,50,668	2,18,733	1,60,318
IV	Less : Total Expenses	3,76,500	5,86,270	1,70,506	1,41,606
V	Share of profit / (loss) of joint ventures and associates	(8)	(175)
VI	Profit before exceptional items and tax (III-IV V)	28,900	64,223	48,227	18,712
VII	Exceptional items	(957)	(20,082)	15,403	528
VIII	Profit before tax (VI VII)	27,943	44,141	63,630	19,240
IX	Total Tax expense	3,936	22,690	14,899	4,612
X	Profit/(Loss) for the period (VIII-IX)	24,007	21,451	48,731	14,629
XI	Other comprehensive income	763	(2,638)	168	147
XII	Total comprehensive income	24,770	18,813	48,899	14,776
Attributable to
- Owners of the Company		25,999	6,215
- Non-controlling interests		(1,229)	12,598
Opening balance in Retained Earnings		1,07,622	1,00,652	9,618	(1,923)
Amount available for Appropriations		1,36,576	1,11,758	58,418	12,618
Dividend -Final-2016-17		3,844		3,844
Tax on dividend		783		783
Transferred to General Reserves		20,000	3,000	20,000	3,000
Transferred to Other Reserves			1,136
Closing balance in Retained Earnings		1,11,949	1,07,622	33,791	9,618

Detailed analysis of the Financial and Operational Performance of the Company has been given in the Management Discussion and Analysis forming part of this Annual Report.

2. Consolidated Financial Statements

As per Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as “Listing Regulations”) and applicable provisions of the Companies Act, 2013 read with the Rules issued thereunder, the Consolidated Financial Statements of the Company for the Financial Year 2017-18 have been prepared in compliance with applicable Accounting Standards and on the basis of audited financial statements of the Company, its subsidiaries, joint ventures and associate companies, as approved by the respective Board of Directors.

The Consolidated Financial Statements together with the Auditors’Report form part of this Annual Report. The Audited Standalone and Consolidated Financial Statements for the Financial Year 2017-18 shall be laid before the Annual General Meeting for approval of the Members of the Company.

3. Dividend

Your Directors have proposed Dividend of Rs.3.50 per share (350%). The total dividend pay-out (including dividend distribution tax on dividend pay-out) for the Financial Year 2017-18 will be Rs.4635 lakhs.

In accordance with Regulation 43A of the Listing Regulations, the Company has formulated a ‘Dividend Distribution Policy’and details of the same have been uploaded on the Company’s website www.gfl.co.in.

4. Transfer of Unapid Dividend /Unclaimed amount and shares to Investor Education and Protection fund

During the year under review, the Company has credited unpaid dividend aggregating to Rs.20.71 lakhs to the Investor Education and Protection Fund (IEPF) pursuant to the provisions of the Companies Act, 2013.

In accordance with the provisions of Companies Act, 2013, the Company has transferred 2,93,213 and 21,447 equity shares of Re 1 each, to the credit of IEPF Authority on in respect of which dividend had not been paid or claimed by the members for seven consecutive years. The Company had initiated necessary action for transfer of these shares in respect of which dividend has not been paid or claimed by the Members consecutively since 2009-10 and 2010-11. The Company has uploaded on its website the details of unpaid and unclaimed amounts lying with the Company as on date of last Annual General Meeting (i.e. 28^th September,2017) and details of shares transferred to IEPF. The aforesaid details are put on the Company’s website https://www.gfl.co.in/unclaimed_ dividend.php and can be accessed at the website of the IEPF Authority (www.iepf.gov.in).

The voting rights on the shares transferred to IEPF Authority shall remain frozen till the rightful owner claims the shares.

5. Transfer to Reserves

During the year under review, the Company has transferred Rs.20,000 lakhs to General Reserves.

6. Directors and Key Managerial Personnel

Your Directors recommend re-appointment of following Directors:

Re-appointment of Shri Devendra Kumar Jain (DIN: 00029782) who retires by rotation and being eligible, offers himself for re-appointment.

Re-appointment of Shri Shailendra Swarup (DIN: 00167799), Shri Om Prakash Lohia (DIN: 00206807), Shri Chandra Prakash Jain (DIN: 00011964) and Shri Shanti Prashad Jain (DIN: 00023379), Independent Directors of the Company for a second term of five years with effect from 01^st April, 2019.

Re-appointment of Shri Dinesh Kumar Sachdeva (DIN: 00050740) and Shri Anand Rambhau Bhusari (DIN: 07167198) as Whole-time Director /s of the Company for a further period of one year.

Necessary Resolutions in respect of Directors seeking re-appointment and their brief resume pursuant to Clause 36 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) are provided in the Notice of the Annual General Meeting forming part of this Annual Report.

During the year there is no change in the Key Managerial Personnel of the Company and Shri Vivek Jain, Managing Director, Shri Manoj Agrawal, Chief Financial Officer and Shri Bhavin Desai, Company Secretary continue as Key Managerial Personnel of the Company.

7. Nomination and Remuneration Policy

The Nomination and Remuneration Policy of the Company is annexed to this report as Annexure A.

8. Declaration of Independence

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Section 149 (6) of the Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Regulation 16 of Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

9. Familiarisation Programme for Independent Directors

Details of Familiarisation Programme for Independent Directors is given in the Corporate Governance Report.

10. Performance Evaluation

Performance Evaluation forms containing criteria for evaluation of Board as a whole, Committees of the Board and individual Directors and Chairperson of the Company were sent to all the Directors with a request to provide their feedback to the Company on the Annual Performance Evaluation of Board as a whole, Committees of Board, Individual Directors and Chairperson of the Company for the Financial Year 2017-18. Further, based on the feedback received by the Company, the Nomination and Remuneration Committee at its Meeting held on 08^th February, 2018 had noted that Annual Performance of each of the Directors including Chairman is highly satisfactory and decided to continue the terms of appointment of all the Independent Directors of the Company.

11. Meetings of the Board

During the year under review, the Board met four times and details of Board Meetings held are given in the Corporate Governance Report. The intervening gap between the two Meetings was within the time limit prescribed under Section 173 of the Companies Act, 2013 and Regulation 17 of the Listing Regulations.

12. Director’s Responsibility Statement as per sub-section (5) of section 134 of the Companies Act, 2013

To the best of their knowledge and belief and according to the information and explanations obtained by your Directors, they make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013:

i. in the preparation of the annual accounts for the Financial Year ended 31^st March, 2018, the applicable Accounting Standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;

ii. the Directors 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 at the end of the Financial Year and of the Profit of the Company for that period;

iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the Directors had prepared the Annual Accounts on a going concern basis;

v. the Directors had laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls were adequate and were operating effectively and

vi. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

13. Particulars of loans given, investments made, guarantees given and securities provided

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the Standalone Financial Statement of the Company. Please refer to Notes no. 8, 9, 38, 45 and 48 to the Standalone Financial Statements of the Company.

14. Contracts and arrangements with related parties

All contracts / arrangements / transactions entered by the Company during the year under review with Related Parties are approved by the Audit Committee and/or Board, as per the provisions of Section 188 of the Companies Act, 2013 read with the Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 23 of the Listing Regulations. During the year under review, the Company had not entered into any contract / arrangement / transaction with Related Parties which could be considered material in accordance with the Policy of the Company on materiality of Related Party Transactions.

The Policy on materiality of Related Party Transactions and dealing with Related Party Transactions as approved by the Board may be accessed on the Company’s website at the link: http://www.gfl.co.in/pdf/GFL%20-%20 Related%20Party%20Transaction%20Policy.pdf

All transactions entered with Related Parties for the year under review were on arm’s length basis and hence, disclosure in form no AOC -2 is not required to be annexed to this report.

15. Deposits

The Company has not accepted any deposits covered under Chapter V of the Act.

16. Subsidiary Companies including Joint Venture and Associate Companies

A separate statement containing the salient features of financial statements of all subsidiaries, Associates and Joint Ventures of the Company forms a part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. In accordance with Section 136 of the Companies Act, 2013, the financial statements of the subsidiaries, joint ventures, associate companies are available for inspection by the members at the Registered Office of the Company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the Annual General Meeting (‘AGM’). Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of the Company. The financial statements including the consolidated financial statements, financial statements of subsidiaries and all other documents required to be attached to this report have been uploaded on the website of the Company www.gfl.co.in. The Company has formulated a policy for determining material subsidiaries. The policy may be accessed on the website of the Company www.gfl.co.in

The Report on the performance and financial position of each of the Subsidiaries, Associates and Joint Venture Companies of the Company is annexed to this report in Form no AOC-1 pursuant to first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 and Rule 5 of Companies (Accounts) Rules, 2014 is annexed to this report as Annexure B.

17. Internal Financial Controls

The Company has adequate Internal Financial Controls commensurate with its size and nature of its business. The Board has reviewed Internal Financial Controls of the Company and the Audit Committee monitors the same in consultation with Internal Auditors of the Company. One of the internal auditors of the Company also tests the internal controls independently.

18. Independent Auditor’s Report

There are no reservations, qualifications or adverse remarks in the Independent Auditor’s Report.

The notes forming part of the accounts are self-explanatory and do not call for any further clarifications under Section 134 (3) (f) of the Companies Act, 2013.

19. Independent Auditors

Members at their 30^th Annual General Meeting held on 28^th September, 2017 had appointed M/s Kulkarni and Company, Chartered Accountants, Pune as Independent Auditors of the Company from the conclusion of 30^th Annual General Meeting until conclusion of 35^th Annual General Meeting. They have confirmed that they are not disqualified from continuing as Auditors of the Company.

The requirement to place the matter relating to appointment of Auditors for ratification by members at every Annual General Meeting is done away with vide notification dated May 7, 2018 issued by the Ministry of Corporate Affairs, New Delhi. Accordingly, no resolution is proposed for ratification of appointment of Auditors, who were appointed in the Annual General Meeting held on 28^th September, 2017.

20. Cost Auditor

In terms of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company are required to be audited by a Cost Accountant in practice who shall be appointed by the Board. In view of the above, the Company has appointed M/s Kailash Sankhlecha & Associates to audit the cost audit records maintained by the Company for Financial Year 2018-19 on a remuneration of Rs.3,00,000/-. As required under the referred Section of the Companies Act, 2013 and relevant Rules, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a resolution seeking Members’ratification for the remuneration payable to M/s Kailash Sankhlecha & Associates, Cost Auditors is included at Item No. 12 of the Notice convening the Annual General Meeting.

Particulars of Cost Audit Report Submitted by M/s. Kailash Sankhlecha & Associates in respect of Financial Year 2016-17 is as follows.

Financial Year	2016-17
Due Date of Filing Cost Audit Report	20th October,2017
Date of Filing Cost Audit Report	04th October,2017

21. Secretarial Audit Report

In terms of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2013, the Company has appointed M/s Samdani Shah & Kabra, a firm of Practising Company Secretaries to conduct Secretarial Audit of the Company. The Secretarial Audit Report given by M/s Samdani Shah & Kabra in Form no. MR-3 which has no qualifications is annexed to this report as Annexure C.

22. Management Discussion and Analysis Report

Management’s Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the Listing Regulations read with para B of Schedule V is presented in a separate Section forming part of this Annual Report.

23. Corporate Governance Report

Pursuant to Regulation 34 read with Para C of Schedule V of Listing Regulations, the Corporate Governance Report of the Company for the year under review and the Auditors’Certificate regarding compliance of conditions of Corporate Governance is annexed to this report.

In compliance with the requirements of Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a certificate from the Managing Director and Chief Financial Officer of the Company, who are responsible for the finance function, was placed before the Board.

All the Board Members and Senior Management Personnel of the Company had affirmed compliance with the Code of Conduct for Board and Senior Management Personnel. A declaration to this effect duly signed by the Managing Director is enclosed as a part of the Corporate Governance Report.

24. Business Responsibility Report

A Business Responsibility Report as per Regulation 34 of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front forms an integral part of this report. The said report is available on the website of the Company www.gfl.co.in

25. Extract of Annual Return

In terms of Section 92 (3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management & Administration) Rules, 2013, the extract of Annual Return as provided in Form no. MGT -9 is annexed to this report as Annexure D.

26. Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo

Information in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134 of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, in the manner prescribed is annexed to this report as Annexure E.

27. Particulars of Employees

Disclosure pertaining to remuneration and other details as required under Section 197 (12) read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report as Annexure F.

In accordance with the provisions of Section 197 (12) of the Companies Act, 2013 read with Rules 5 (2) and 5 (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the name and other particulars of the employees drawing remuneration in excess of the limits set out in the said rule is annexed to this report.

In terms of Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the Members of the Company excluding information on employees’particulars which is available for inspection by the Members at the Registered Office of the Company during the business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining such information may write to the Company Secretary at the Registered Office of the Company.

28. Corporate Social Responsibility Activities

The Corporate Social Responsibility (CSR) Committee of the Company comprises of Shri Shanti Prashad Jain, Independent Director, Shri Vivek Jain, Managing Director and Shri Deepak Asher, Non Independent Director of the Company. The CSR Policy of the Company is disclosed on the website of the Company which can be viewed at http://www.gfl.co.in/pdf/CSR_Policy_Final_05112014.pdf. The report on CSR activities as per Companies (Corporate Social Responsibility) Rules, 2014 is annexed to this Report as Annexure G.

29. Safety, Health and Environment

Safety, health and environment have been of prime concern to the Company and necessary efforts were made in this direction in line with the safety, health and environment policy laid down by the Company. The Company has achieved certification of ISO: 14001:2004 (Environment Management System), ISO 18001:2007 (Occupational Health and Safety Management System) and ISO 9001:2008 (Quality Management System) for its Ranjitnagar and Dahej Unit. Health of employees is being regularly monitored and environment has been maintained as per statutory requirements.

30. Insurance

The Company’s property and assets have been adequately insured.

31. Risk Management

The Board of Directors of the Company at its Meeting held on 10^th November, 2017 has approved Enterprise Risk Management (ERM) Framework of the Company which is derived from COSO ERM - Aligning Risk with Strategy and Performance 2016 Framework established by committee of sponsoring organizations. According to this, Enterprise Risk Management is “The culture, capabilities, and practices, integrated with strategy-setting and its execution, that organizations rely on to manage risk in creating, preserving, and realizing value”. The Company has, therefore, adopted Residual risk approach and the Board of Directors have at its Meeting held on 08^th February, 2018 approved Enterprise Risk Register, Risk Reporting and its Monitoring system. In the Board’s view, there are no material risks, which may threaten the existence of the Company. For further details, please refer to the Management Discussion and Analysis Report annexed to this report.

32. Information under the sexual harrassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Your Company has formed an Internal Complaints Committee (ICC) to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy.

The following is the summary of sexual harassment complaints received and disposed of during the year 2017-18.

No. of Complaints Received Nil

No. of Complaints disposed of Not Applicable

33. Material changes and Commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the Financial Statements relate and the date of the report

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of this report.

34. Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future

There are no orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future.

35. Acknowledgement

Your Directors express their gratitude to all other external agencies for the assistance, co-operation and guidance received. Your Directors place on record their deep sense of appreciation for the dedicated services rendered by the workforce of the Company.

By order of the Board of Directors

26^th July, 2018 Devendra Kumar Jain

Chairman