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Directors Report of Gujarat Alkalies & Chemicals Ltd.

Mar 31, 2015

Dear Members,

The Directors present this 42nd Annual Report of the Company on the business and operations of the Company together with Audited Balance Sheet and Statement of Profit & Loss for the Financial Year ended 31st March, 2015 and the report of the Auditors thereon.

PERFORMANCE AND FINANCIAL RESULTS

The performance of the Company in Financial Year 2014-15 has been as follows:

FINANCIAL RESULTS (Rs. in Lakhs)

Particulars 2014-15 2013-14

Sales (excluding Excise Duty) and Other Income 1,99,707 1,92,632

Profit before Interest, Depreciation and Taxation (PBIDT) 32,287 40,373

Profit before Taxation (PBT) 21,548 24,655

Less: Provision for Taxation (1,238) 6,153

Profit after Taxation (PAT) 22,786 18,502

Add: P & L A/c Balance brought forward from Previous Year 57,974 52,159

Amount available for appropriations 80,760 70,661

Your Directors recommend the following Appropriations:

Proposed Dividend 3,304 2,937

Tax on Proposed Dividend 673 499

Transferred to General Reserve 11,393 9,251

Balance Carried to Balance Sheet 65,390 57,974

Earning Per Share Rs.31 Rs.25

Dividend Per Share Rs.4.50 Rs.4.00

Book Value per Share Rs.286 Rs.263

RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS

The highlights of the Company's performance are as under:

* The Company has achieved highest ever sales (including Excise Duty) of Rs.2157.17 Crores during the year 2014-15 as against Rs.2087.50 Crores in the Previous Year.

* Total production of all the products has increased by 1.54% to 14,47,788 MT during the year 2014-15 as against 14,25,853 MT in previous year.

* Other Operating Income increased by Rs.3.10 Crores to Rs.16.31 Crores during the year 2014-15 as against Rs.13.21 Crores in previous year.

* Other Income increased by Rs.18.69 Crores to Rs.48.95 Crores during the year 2014-15 as against Rs.30.26 Crores in previous year.

* Gross Profit has decreased by 20.03% from Rs.403.73 Crores in previous year to Rs.322.87 Crores in the year 2014-15.

* Profit before Tax has decreased by 12.60% from Rs.246.55 Crores in previous year to Rs.215.48 Crores in the year 2014-15.

* Profit after Tax has increased by 23.15% from Rs.185.02 Crores in previous year to Rs.227.86 Crores in the year 2014-15 due to MAT status and deferred tax reversals.

The Financial Year 2014-15 was a challenging year for Chlore-alkali sector. The price of Caustic Soda remained under pressure due to huge imports during most of the part of the Financial Year 2014-15. However, the Company was able to sustain the cut-throat competition due to its nation- wide distribution network, operational excellence, higher efficiency and well executed business strategy. During the year 2014-15, the Company has achieved highest ever productions in Caustic Soda, Chloromethanes and Hydrogen Peroxide at Vadodara Complex and highest ever productions in Hydrogen Peroxide, Poly Aluminium Chloride and Anhydrous Aluminium Chloride at Dahej Complex.

DIVIDEND

Your Directors are glad to recommend Dividend @ Rs.4.50 per share (i.e. 45%) on 7,34,36,928 Equity Shares of Rs.10/- each fully paid up for the year ended 31st March, 2015.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in the Annexure - 1 to this report.

SUBSIDIARY, JOINT VENTURE OR ASSOCIATE COMPANIES

The Company does not have subsidiary, joint venture or associate company and hence, requirements for giving information under Rule 8 of the Companies (Accounts) Rules, 2014 are not applicable.

On 23rd June, 2015, the Company has signed Joint Venture- cum-Shareholders' Agreement with National Aluminium Company Ltd. (NALCO), a Government of India Enterprise to take up 800 TPD Caustic Soda Project and 80-90 MW Coal based Power Plant at Dahej, Gujarat. The formation of JV Company is under process.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

CREDIT RATING

Your Company's financial discipline and prudence is reflected in the strong credit rating described by rating agency as the following particulars :

Instrument Rating Rating Outlook

Long Term Credit CARE AA Stable Bank Analysis & (Double A outlook for Facilities Research Plus) Caustic Ltd. (CARE) Soda industry & GACL, being industry leader in domestic market,is likely to

Short Term Credit CARE A1 benefit from Bank Analysis & (A One various Facilities Research Plus) factors. Ltd. (CARE)



Instrument Remarks Agency

Long Term This rating is Bank considered to Facilities have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk.

Short Term This rating is Bank considered to Facilities have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.

RISK MANAGEMENT

During the year, the Company has constituted Internal Risk Management Committee comprising of senior executives of the Company who are heading respective departments viz. Finance, Manufacturing, Marketing, Purchase, Project, HR, Secretarial and Legal functions. The Executive Director (Finance) & CFO is the Chairman of the Internal Risk Management Committee. The Internal Risk Management Committee report to the Managing Director and the risks identified by the said Committee alongwith proposed mitigation actions are discussed periodically with the Managing Director. Out of the various risks identified by the Internal Risk Management Committee, the Audit Committee has identified certain critical risks,which are reviewed by Audit Committee and by the Board of Directors on quarterly basis. A Report on the steps taken to mitigate those critical risks is also submitted to the Audit Committee and the Board of Directors.

VIGIL MECHANISM / WHISTLE BLOWER MECHANISM

The Company has formulated a Vigil Mechanism-cum- Whistle Blower Policy ("Policy") as per the requirements of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The Policy is applicable to all Directors and Employees of the Company.

As per the Policy, protected disclosures can be made by whistle blower to the Chairman of the Audit Committee.

During the Financial Year 2014-15, no unethical and improper practice or any other wrongful conduct in the Company by any person was reported under the said Policy.

The Vigil Mechanism-cum-Whistle Blower Policy may be accessed on the Company's website at the link : http:// www.gacl.com/public html/new/policy/ VIGIL MECHANISM CUM WHISTLE BLOWER POLICY.pdf

CORPORATE SOCIAL RESPONSIBILITY

As per the provisions of Section 135 read with Schedule VII of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted Corporate Social Responsibility (CSR) Committee and formulated CSR Policy. The composition of CSR Committee is given in the Corporate Governance Report.

The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) identifying the activities to be carried out by the Company and the said CSR Policy has been approved by the Board of Directors at their Meeting held on 23.07.2014.

The Board of Directors at their Meeting held on 26.05.2015 have approved some modifications in the CSR Policy including to undertake CSR activities through GACL Education Society (GES). GES is a registered Society under the Societies Registration Act, 1860 and was formed with an objective for promotion and development of education in various fields and branches of Engineering, Management Technology, Information & Communication etc. and carry out such other projects having similar objects. Various projects are planned to be undertaken through GES during the year 2015-16 which include GACL Uday Shala Project; Project "UDAAN"; Projects for special children at Vadodara, Bharuch, Chhotaudepur; promoting vocational education and entrepreneurship among youth students from poor families; creating generic medical stores at Bharuch, Vadodara and other places; setting up a chain of maternity wards in few Districts on the lines of Life Spring Hospitals Model to reduce the MMR and IMR in these areas etc. To implement the said projects, GES has recruited Project Officers, Volunteers, Teaching Volunteers and Field Workers.

The revised CSR Policy may be accessed on the Company's website at the link: http://www.gacl.com/ public html/new/pdf/CSR POLICY.pdf

During the year, the Company has spent an amount of Rs.4.47 Crore towards the CSR activities, against the statutory amount of Rs.5.20 Crore which is slightly lesser (by Rs.73 lakhs) than 2% of the average Net Profits of the Company for last three years. Thus, amount of Rs.73 lakhs towards CSR activities could not be spent during the year as per the provisions of the Companies Act, 2013. The Company has transferred this amount of Rs.73 lakhs to GACL Education Society. This amount shall be utilized in current year for CSR activities identified by the Company as per CSR Policy.

The Annual Report on CSR activities for the Financial Year 2014-15 is annexed herewith as Annexure - 2.

DIRECTORS

A. Appointment / Reappointment / Cessation of Directors & Key Managerial Personnel

During the year, Dr. Varesh Sinha, IAS (Retd.), Chairman, Dr. Hasmukh Adhia, IAS and Shri D. J. Pandian, IAS, Directors have resigned from the Board of Directors of the Company effective from 02.12.2014, 13.11.2014 and 30.08.2014, respectively.

Shri Atanu Chakraborty, IAS has resigned as the Managing Director effective from 28.08.2014 and in his place, Shri A M Tiwari, IAS was appointed as Managing Director of the Company with effect from 29.08.2014. Shri G C Murmu, IAS, Director has resigned from the Board of Directors of the Company effective from 01.05.2015.

Shri D J Pandian, IAS, Chief Secretary to Government of Gujarat was appointed as Government Nominee Non- Rotational Director and Chairman of the Board of Directors of the Company effective from 08.04.2015. Further, Shri D J Pandian, IAS (Retd.) has sent his resignation as Chairman of the Company vide letter dated 30th May, 2015 effective from 3rd July, 2015 (i.e. date of receipt by the Company) due to his superannuation from the services as Chief Secretary. The Board placed on record its deep appreciation of the valuable services rendered to the Company by Dr. Varesh Sinha, IAS (Retd.) as Chairman, Shri D J Pandian, IAS (Retd.) as Director and Chairman, Shri Atanu Chakraborty, IAS as Managing Director, Dr. Hasmukh Adhia, IAS and Shri G C Murmu, IAS as Directors of the Company.

During the year, Dr. Rajiv I Modi and Ms. Pallavi S Shroff (Woman Director) have been appointed by the Board as Independent Directors of the Company for a term of five years effective from 01.10.2014. The Independent Directors have submitted the declarations under Section 149(6) of the Companies Act, 2013 to the effect that they qualify to be appointed as Independent Directors of the Company.

Dr. J N Singh, IAS has been appointed as a Director by the Board of Directors of the Company effective from 05.02.2015 to fill casual vacancy caused due to resignation of Dr. Hasmukh Adhia, IAS.

Shri G R Aloria, IAS, Chief Secretary to Government of Gujarat is appointed as Government Nominee Non- Rotational Director and Chairman of the Board of Directors of the Company w.e.f. 28th July, 2015 as per the provisions of Articles of Association of the Company. Dr. Sukh Dev has expressed his unwillingness to be reappointed as an Independent Director due to old age. Therefore, his term as an Independent Director would continue till the date of this 42nd AGM (i.e. 18.09.2015).

As per Section 149 of the Companies Act, 2013, Shri J N Godbole, Dr. Rajiv I Modi and Ms. Pallavi S Shroff, Directors are eligible for appointment / reappointment as Independent Directors. Your Directors recommend the appointments of Dr. Rajiv I Modi and Ms. Pallavi S Shroff and reappointment of Shri J N Godbole as Independent Directors for a period of 5 years. Further, declarations under Section 149(6) of the Companies Act, 2013 have been received from all the Directors to the effect that they qualify to be appointed as Independent Directors of the Company.

Thus, as on the date of this Report, there are seven Directors on the Board of Directors of the Company. The Chairman, Managing Director, four Independent Directors are Non-Rotational Directors and one Non Independent Director viz. Dr. J N Singh, IAS is Rotational Director appointed in the casual vacancy in place of Dr. Hasmukh Adhia, IAS. The appointment of Dr. J N Singh, IAS will be regularized by the Shareholders at this Annual General Meeting. Except Dr. Sukh Dev, Independent Director, the four Directors viz. : Managing Director and three Independent Directors will be appointed / reappointed at this Annual General Meeting. Thus, the appointment/reappointment of five Directors are being placed before the Shareholders at this Annual General Meeting and Dr. Sukh Dev will not be reappointed as mentioned above. Therefore, no Director will retire by rotation at this Annual General Meeting.

Pursuant to the provisions of Section 203 of the Companies Act, 2013, effective from 14.05.2014, Dr. H. B. Patel was appointed as Chief Financial Officer of the Company and Mr. Sanjay S Bhatt was appointed as Company Secretary of the Company.

B. Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

C. Nomination and Remuneration Policy

The Board has on the recommendation of the Nomination-cum-Remuneration Committee formulated a Nomination & Remuneration-cum-Board Diversity Policy for selection, appointment of Directors and Senior Management and their remuneration. Information about the Policy is provided in the Corporate Governance Report.

D. Meetings

During the year, 7(seven) Board Meetings and 4 (four) Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the Listing Agreement. Further, the composition of Audit Committee is given in the Corporate Governance Report.

AUDITORS

A. Internal Auditors

M/s. Chandulal M. Shah & Co., Chartered Accountants, Ahmedabad were appointed as Internal Auditors for conducting Internal Audit of the Company for the period from 1st July, 2014 to 30th June, 2015.

The Board of Directors of the Company at its Meeting held on 26th May, 2015, appointed M/s. Talati & Talati, Chartered Accountants, Vadodara as Internal Auditors for conducting Internal Audit of the Company for the period from 1st July, 2015 to 30th June, 2016.

The Internal Auditors independently evaluate the internal controls, adherence to and compliance with the procedures, guidelines and statutory requirements. The Audit Committee of Directors periodically reviews the reports of the Internal Auditors and the corrective actions, if any, are taken by the Management.

B. Statutory Auditors

M/s. Deloitte Haskins & Sells, Chartered Accountants, Vadodara (Firm Registration No.:117364W) were appointed as Statutory Auditors of the Company for a period of five years in the 41st Annual General Meeting held on 22nd August, 2014. M/s. Deloitte Haskins & Sells, Chartered Accountants,Vadodara have confirmed their eligibility under Section 141 of the Companies Act, 2013 and rules framed there-under for their appointment as Statutory Auditors of the Company from this Annual General Meeting up to the conclusion of next Annual General Meeting.

The Board of Directors of the Company at their Meeting held on 26th May, 2015 have approved the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants for the Financial Year 2015-16. Accordingly, a Resolution for ratification of appointment of the Statutory Auditors for the Financial Year 2015-16 is placed at Item No. 3 of the Notice.

Your Directors recommend the said Resolution for ratification for your approval.

The Auditors Report to the shareholders for the year under review does not contain any qualification.

C. Cost Auditors

The Board of Directors of the Company at its Meeting held on 14th May, 2014 had appointed M/s. R.K. Patel & Co., Cost Accountants, Vadodara as Cost Auditors for the Financial Year 2014-15 to conduct the Cost Audit of the cost accounts and records maintained by the Company, at the remuneration of Rs.4,95,000/- plus service tax as applicable. As required under the Section 148 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, the Shareholders at their 41st Annual General Meeting held on 22nd August, 2014 had ratified the remuneration payable to the Cost Auditors for the Financial Year 2014-15.

The Board of Directors of the Company at its Meeting held on 26th May, 2015, appointed M/s. R K Patel & Co., Cost Accountants, Vadodara as Cost Auditors for conducting the Cost Audit of the Accounts and records maintained by the Company for the Financial Year 2015-16.

Your Directors recommend the remuneration of the Cost Auditors appointed by the Board of Directors for the Financial Year 2015-16 for your ratification / approval as per the provisions of the Companies Act, 2013.

D. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Samdani Kabra & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as Annexure - 3. The Report does not contain any qualification.

CORPORATE GOVERNANCE

The Company has been following the principles and practices of good Corporate Governance and has ensured compliance of the requirements stipulated under Clause 49 of the Listing Agreement with Stock Exchanges.

A detailed report on Corporate Governance along with Certificate issued by Company Secretary in Practice in terms of Clause 49 of the Listing Agreement is attached herewith.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, are provided in the Annexure - 4. Further, there was no employee holding 2% or more of the Equity Shares of the Company during the Financial Year 2014-15.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, the Company has not entered into any arrangement or contract or transactions with related parties except the remuneration paid to the Key Managerial Personnel.

The Policy on Related Party Transactions and Material Related Party Transactions as approved by the Board of Directors may be accessed on the Company's website at the link : http://www.gacl.com/public html/new/policy/ related party tran policy-1 .pdf

The Audit Committee of Directors at its Meeting held on 26th May, 2015 has accorded omnibus approval to execute transactions with related parties up to the value of Rs.1 Crore.

Your Directors draw attention of the Members to Note No. 36 to the Financial Statement which sets out Related Party disclosures.

LOANS, GUARANTEES AND INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Note No.4, 7, 9, 12, 15 and 32(i)(e) of the Notes to the Financial Statements.

INSURANCE

The Company has taken adequate insurance for all its properties. The Company has also taken necessary insurance cover as required under the Public Liability Insurance Act, 1991.

LISTING AGREEMENT COMPLIANCE

Your Company's Equity Shares are listed on Bombay Stock Exchange Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE) and their listing fees for the Financial Year 2015- 16 have been paid and the conditions of Listing Agreements have been complied with.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as Annexure - 5.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items since there were no transactions in these matters and/or they are not applicable to the Company during the year under review :

1. Business Responsibility Reporting is not applicable as the Company does not fall under list of top 100 listed companies.

2. Details relating to deposits covered under Chapter V of the Act.

3. Issue of equity shares with differential rights as to dividend, voting or otherwise.

4. Issue of shares (including sweat equity shares) to employees of the Company under ESOS.

5. There is no subsidiary company of our Company and therefore, the Managing Director is not in receipt of any commission from any subsidiary.

6. No significant or material orders were passed by the Regulators / Courts or Tribunals which would impact the going concern status of the Company and its future operations.

You Directors further state that your Company has constituted Sexual Harassment Committee and during the year under review, no case was pending pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors state that :

i) in the preparation of the annual accounts for the Financial Year ended 31st March, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, 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 31st March, 2015 and of the profit of the Company for the year ended on that date;

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

iv) the Directors have prepared the annual accounts on a going concern basis;

v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

MANAGEMENT DISCUSSION AND ANALYSIS

A report on Management Discussion and Analysis forms part of the Board's Report and it deals with inter-alia the Business, Operations & Financial Performance, Research & Development, Expansion & Diversification, Risk Management, Marketing Strategy, Safety & Environment, Corporate Social Responsibility, Human Resources Development etc.

ACKNOWLEDGEMENTS

The Board expresses its gratitude and appreciation to the Government of India, Government of Gujarat, Financial Institutions, Insurance Companies, Banks, other business associates, Promoters, Shareholders and employees of the Company for their continued support. The Directors also gratefully acknowledged all stakeholders of the Company viz. : customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitments and continued contribution to the Company.

For and on behalf of the Board Sd/- Sd/- (A.M. Tiwari) (Dr. J.N. Singh) Managing Director Director

Place: Gandhinagar Date : 6th August, 2015


Mar 31, 2013

To The Members,

The Directors present this 40th Annual Report on the business and operations of the Company together with Audited Balance Sheet and Statement of Profit & Loss for the Financial Year ended 31st March, 2013 and the report of the Auditors thereon. The performance of the Company in Financial Year 2012-13 has been as follows :

FINANCIAL RESULTS :

(Rs. in Lakhs)

Particulars 2012-13 2011-12

Sales (excluding Excise Duty) 1,83,330 1,72,274 and Other Income Profit before Interest, Depreciation 51,402 41,129 and Taxation (PBIDT)

Profit before Taxation (PBT) 33,683 22,342

Less: Provision for Taxation 10,148 6,981

Profit after Taxation (PAT) 23,535 15,361

Add: P&L A/c Balance brought forward 43,399 38,279 from Previous Year

Amount available for appropriations 66,934 53,640

Your Directors recommend the following Appropriations:

Proposed Dividend 2,570 2,203

Tax on Proposed Dividend 437 357

Transfer to General Reserve 11,768 7,681

Balance Carried to Balance Sheet 52,159 43,399

Earning per Share Rs.32 Rs.21

Dividend per Share Rs.3.50 Rs.3.00

Book Value per Share Rs.242 Rs.214

DIVIDEND:

Your Directors are glad to recommend a Dividend @ Rs.3.50 per share for the year ended 31st March, 2013 on 7,34,36,928 Equity Shares of Rs.10/- each fully paid up.

ENERGY CONSERVATION AND TECHNOLOGY ABSORPTION:

Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 is given in the Annexure - 1 to this report.

INSURANCE:

The Company has taken adequate insurance for all its properties. The Company has also taken necessary insurance cover as required under the Public Liability Insurance Act, 1991.

PUBLIC DEPOSITS:

During the Financial Year 2012-13, the Company has not accepted or renewed any Fixed Deposits and there is no Fixed Deposit outstanding.

VOLUNTARY DELISTING OF COMPANY''S SECURITIES FROM VADODARA STOCK EXCHANGE LTD. (VSE) :

The Board of Directors of the Company at its Meeting held on 21st September, 2012 have accorded their approval for Voluntary Delisting of Company''s Equity Shares from Vadodara Stock Exchange Ltd. (VSE).

The Company has submitted the application on 5th November, 2012 to VSE for Voluntary Delisting of Company''s Securities viz. : 7,34,36,928 Equity Shares of Rs.10/- each.

The Company has received a Letter No. : VSE/DELISTING/ 2013/002 dated 11th January, 2013 from VSE confirming the Delisting of Securities of the Company from VSE w.e.f. 10th January, 2013.

LISTING AGREEMENT COMPLIANCE:

Your Company''s Equity Shares are listed on Bombay Stock Exchange Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE) and their listing fees for the Financial Year 2013-14 has been paid and the conditions of Listing Agreement have been complied with.

DIRECTORS'' RESPONSIBILITY STATEMENT:

The Board of Directors of the Company confirms:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to any material departure;

ii) that the selected accounting policies were applied consistently and the Directors made judgements 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 March 31, 2013 and of the profit of the Company for the year ended on that date;

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) that the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE:

The Company has been following the principles and practices of good Corporate Governance and has ensured compliance of the requirements stipulated under Clause - 49 of the Listing Agreement with the Stock Exchanges.

A detailed report on Corporate Governance along with Certificate dated 4th July, 2013 issued by Practicing Company Secretary in terms of Clause - 49 of the Listing Agreement is attached which forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

A report on Management Discussion and Analysis forms part of this Report and it deals with the Business, Operations and Financial Performance, Expansion & Diversification, Research & Development, Marketing Strategy, Safety & Environment, Corporate Social Responsibility, Human Resources Development etc.

DIRECTORS:

Dr. Varesh Sinha, IAS was appointed as a Director by the Board of Directors of the Company at its Meeting held on 21st September, 2012 pursuant to Section 262 of the Companies Act, 1956 vice Shri M M Srivastava, IAS (Retd.). Upon his transfer and appointment as Chief Secretary to Government of Gujarat, he has tendered his resignation as a Director from the Board of Directors of the Company w.e.f. 28th February, 2013 and the Government of Gujarat has appointed Dr. Varesh Sinha, IAS, as Government Nominee Director and Chairman on the Board of Directors of the Company w.e.f. 1st March, 2013 vice Shri A K Joti, IAS (Retd.).

The Board places on record their appreciation of the valuable services rendered to the Company by Shri A K Joti, IAS (Retd.) during his tenure as Chairman of the Company.

Dr. Hasmukh Adhia, IAS has been appointed as an Additional Director by the Board of Directors of the Company on 16th May, 2013 and he holds office as Director up to the ensuing Annual General Meeting. The Company has received a notice in writing from a Member u/s. 257 of the Companies Act, 1956 proposing appointment of Dr. Hasmukh Adhia, IAS as a Director of the Company at the ensuing Annual General Meeting.

Padma Bhushan Dr. Sukh Dev and Shri J N Godbole, Directors will retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

The Directors recommend for your approval the appointment of Dr. Hasmukh Adhia, IAS and reappointment of Padma Bhushan Dr. Sukh Dev and Shri J N Godbole as Directors at the ensuing Annual General Meeting.

PARTICULARS OF EMPLOYEES :

The information, as required under Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended, forms part of this Report. Any Shareholder interested in seeking this information may write to the Company Secretary at the Registered Office of the Company. Further, there was no employee holding 2% or more of the equity shares of the Company during the Financial Year 2012-13.

INTERNAL AUDITORS :

M/s. Chandulal M Shah & Co., Chartered Accountants, Ahmedabad have been appointed as Internal Auditors for conducting Internal Audit of the Company for Vadodara and Dahej Complexes for the Financial Year 2012-13.

The Internal Auditors independently evaluate the internal controls, adherence to and compliance with the procedures, guidelines and statutory requirements. The Audit Committee of Directors periodically reviews the reports of the internal auditors and corrective actions taken by the Management with regard thereto.

STATUTORY AUDITORS :

The Company''s Statutory Auditors, M/s. Prakash Chandra Jain & Co., Chartered Accountants, Vadodara, retire and are eligible for reappointment. You are requested to appoint Statutory Auditors and authorise your Directors to fix their remuneration.

COST AUDITORS :

The Board of Directors has appointed M/s. R K Patel & Co., Cost Accountants, Vadodara as Cost Auditors for the Financial Year 2012-13 to conduct the Cost Audit of all products manufactured by the Company falling under Chapters 28, 29 & 38 of Central Excise Tariff Act, 1985 as per Notification No. 52/ 26/CAB-2010 dated 24th January, 2012 issued by Ministry of Corporate Affairs, Government of India.

ACKNOWLEDGEMENTS :

The Board expresses its gratitude and appreciation to the Government of India, Government of Gujarat, Financial Institutions, Insurance Companies, Banks, other business associates, Promoters, Shareholders and employees of the Company for their continued support.

For and on behalf of the Board

DR. VARESH SINHA, IAS

CHAIRMAN

Place : Gandhinagar

Date : 5th August, 2013


Mar 31, 2012

The Directors present this 39th Annual Report on the business and operations of the Company together with Audited Balance Sheet and Statement of Profit & Loss for the Financial Year ended 31st March, 2012 and the report of the Auditors thereon.

The performance of the Company in 2011-12 has been as follows :

FINANCIAL RESULTS :

(Rs. in Lakhs)

Particulars 2011-12 2010-11

Sales (excluding Excise Duty) 1,72,274 1,44,669 and Other Income

Profit before Interest, Depreciation 39,909 28,127 and Taxation (PBIDT)

Profit before Taxation (PBT) 22,342 12,711

Less: Provision for Taxation 6,981 1,281 (Including Deferred Tax Liability, Wealth Tax etc.)

Profit after Taxation (PAT) 15,361 11,430

Add: P&L A/c Balance brought forward 38,279 35,124 from Previous Year

Amount available for appropriations 53,640 46,554

Your Directors recommend the following Appropriations:

Proposed Dividend 2,203 2,203

Tax on Proposed Dividend 357 357

Transfer to General Reserve 7,681 5,715

Balance Carried to Balance Sheet 43,399 38,279

Earning per Share Rs. 21 Rs.15

Dividend per Share Rs. 3.00 Rs.3.00

Book Value per Share Rs. 214 Rs. 197

DIVIDEND:

Your Directors are glad to recommend a Dividend @ Rs.3.00 per share for the year ended 31st March, 2012 on 7,34,36,928 Equity Shares of Rs.10/- each fully paid up.

ENERGY CONSERVATION AND TECHNOLOGY ABSORPTION:

Information in accordance with the provisions of Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 is given in the Annexure - 1 to this report.

INSURANCE:

The Company has taken adequate insurance for all its properties. The Company has also taken necessary insurance cover as required under the Public Liability Insurance Act, 1991.

PUBLIC DEPOSITS:

During the year 2011-12, the Company has not accepted/ renewed any Fixed Deposits and there is no Fixed Deposit outstanding.

LISTING AGREEMENT COMPLIANCE:

Your Company's Equity Shares are listed on Bombay Stock Exchange Ltd. (BSE), National Stock Exchange of India Ltd. (NSE) and Vadodara Stock Exchange Ltd. (VSE) and their listing fees for the Financial Year 2012- 13 has been paid and the conditions of Listing Agreement have been complied with.

DIRECTORS' RESPONSIBILITY STATEMENT:

The Board of Directors of the Company confirms:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to any material departure;

ii) that the selected accounting policies were applied consistently and the Directors made judgements 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 March 31, 2012 and of the profit of the Company for the year ended on that date;

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) that the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE :

The Company has been following the principles and practices of good Corporate Governance and has ensured compliance of the requirements stipulated under Clause - 49 of the Listing Agreement with the Stock Exchanges.

A detailed report on Corporate Governance along with Certificate dated 25th July, 2012 issued by Practicing Company Secretary in terms of Clause - 49 of the Listing Agreement is attached forming part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS :

A report on Management Discussion and Analysis forms part of this Report and it deals with the Operations and Business Performance, Expansion & Diversification, Research & Development, Marketing Strategy, Safety & Environment, Corporate Social Responsibility, Human Resources Development etc.

DIRECTORS:

Shri M. M. Srivastava, IAS has resigned as Director of the Company on 31st July, 2012. The Board places on record their appreciation of the valuable services rendered by Shri M. M. Srivastava, IAS to the Company during his tenure as Director of the Company.

Shri D. J. Pandian, IAS and Shri G. C. Murmu, IAS Directors will retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment and your Directors recommended the same for your approval.

PARTICULARS OF EMPLOYEES :

The information, as required under Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended, forms part of this Report. Any Shareholder interested in seeking this information may write to the Company Secretary at the Registered Office of the Company. Further, there was no employee holding 2% or more of the equity shares of the Company during the year 2011-12.

INTERNAL AUDITORS :

M/s. K.C. Mehta & Co., Chartered Accountants, Vadodara were appointed as Internal Auditors for conducting Internal Audit of the Company for Vadodara and Dahej Complexes for the Financial Year 2011-12.

M/s. Chandulal M Shah & Co., Chartered Accountants, Ahmedabad have been appointed as Internal Auditors for conducting Internal Audit of the Company for Vadodara and Dahej Complexes for the Financial Year 2012-13.

The Internal Auditors independently evaluate the internal controls, adherence to and compliance with the procedures, guidelines and statutory requirements. The Audit Committee of Directors periodically reviews the reports of the internal auditors.

STATUTORY AUDITORS :

The Company's Auditors, M/s. Prakash Chandra Jain & Co., Chartered Accountants, Vadodara retire and are eligible for reappointment. They have furnished necessary concurrence and declaration and also informed that the Peer Review Certificate issued by ICAI to them is valid for three years from the date of issue. You are requested to appoint Statutory Auditors and authorise your Directors to fix their remuneration.

COST AUDITORS :

The Government of India, Ministry of Finance has issued Cost Audit Order under Section 233(B) of the Companies Act, 1956 to appoint Cost Auditors to audit the Cost Accounting Records and Books of Accounts maintained by the Company in respect of "Caustic Soda" and "Chloromethanes" Products. Accordingly, the Board of Directors has appointed M/s R K Patel & Co., Cost Accountants, Vadodara as Cost Auditors - (i) for Financial Year 2011-12 to conduct the Cost Audit of Caustic soda products in both the plants at Vadodara and Dahej Complexes and for Chloromethanes products at Vadodara Complex of the Company; and (ii) for Financial Year 2012-13 to conduct the Cost audit of all products manufactured by the Company falling under Chapters 28,29 & 38 of Central Excise Tariff Act,1985 as per Cost Audit Order No. 52/26/CAB-2010 dated 24th January, 2012 issued by Ministry of Corporate Affairs, Government of India.

ACKNOWLEDGEMENTS :

The Board expresses its gratitude and appreciation to the Government of India, Government of Gujarat, Financial Institutions, Insurance Companies, Banks, other business associates, Promoters, Shareholders and employees of the Company for their continued support.

For and on behalf of the Board

A K JOTI

CHAIRMAN

Place : Vadodara

Date : 4th August, 2012


Mar 31, 2011

The Members,

The Directors present this 38th Annual Report on the business and operations of the Company together with Audited Balance Sheet and Profit & Loss Account for the Financial Year ended 31st March, 2011 and the report of the Auditors thereon.

The performance of the Company in 2010-11 has been as follows:

FINANCIAL RESULTS :

(Rs in Lakhs)

Particulars 2010-11 2009-10

Sales (excluding Excise Duty) 1,44,669 1,33,991

and Other Income

Profit before Interest, Depreciation 27,984 29,019

and Taxation (PBIDT)

Less: Interest 1,989 1,748

Profit before Depreciation and 25,995 27,271

Taxation (PBDT)

Less: Depreciation 13,297 12,155

Profit of the year 12,698 15,116

Prior Period Adjustment (13) 488

[Net Debit/(Credit)]

Profit before Taxation (PBT) 12,711 14,628

Less: Provision for Taxation 1,281 (2,556)

(Including Deferred Tax Liability, Wealth Tax, Fringe Benefits Tax, etc.)

Profit after Taxation (PAT) 11,430 17,184

Add: P&L A/c Balance brought forward 35,124 29,102 from Previous Year

Amount available for appropriations 46,554 46,286

Your Directors recommend the following Appropriations:

Proposed Dividend 2,203 2,203

Tax on Proposed Dividend 357 366

Transferred to General Reserve 5,715 8,593

Balance Carried to Balance Sheet 38,279 35,124

Earning per Share Rs15 Rs23

Dividend per Share Rs3.00 Rs3.00

Book Value per Share Rs197 Rs185



DIVIDEND:

Your Directors are glad to recommend a Dividend @ Rs3.00 per share for the year ended 31st March, 2011 on 7,34,36,928 Equity Shares of Rs10/- each fully paid up.

ENERGY CONSERVATION AND TECHNOLOGY ABSORPTION:

Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 is given in the Annexure - 1 to this report.

INSURANCE:

The Company has taken adequate insurance for all its properties. The Company has also taken necessary insurance cover as required under the Public Liability Insurance Act, 1991.

PUBLIC DEPOSITS:

During the year 2010-11, the Company has not accepted / renewed any Fixed Deposits. As at the date of this report only 1 (one) deposit of Rs10,000/- has remained unencashed / unclaimed.

LISTING AGREEMENT COMPLIANCE:

Your Company's Equity Shares are listed on Bombay Stock Exchange Ltd. (BSE), National Stock Exchange of India Ltd. (NSE) and Vadodara Stock Exchange Ltd (VSE) and their listing fees for the Financial Year 2011-12 has been paid and the conditions of Listing Agreement have been complied with.

DIRECTORS' RESPONSIBILITY STATEMENT:

The Board of Directors of the Company confirms:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to any material departure;

ii) that the selected accounting policies were applied consistently and the Directors made judgements 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 March 31, 2011 and of the profit of the Company for the year ended on that date;

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and iv) that the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE:

The Company has been following the principles and practices of good Corporate Governance and has ensured compliance of the requirements stipulated under Clause - 49 of the Listing Agreement with the Stock Exchanges.

A detailed report on Corporate Governance along with Certificate dated 30th June, 2011 issued by Practicing Company Secretaries in terms of Clause - 49 of the Listing Agreement is attached forming part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

A report on Management Discussion and Analysis forms part of this Report and it deals with the Operations and Business Performance, Expansion & Diversification, Research & Development, Marketing Strategy, Safety & Environment, Corporate Social Responsibility, Human Resources Development etc.

DIRECTORS:

Shri M S Dagur, IAS has been appointed as the Managing Director of the Company vice Dr. Guruprasad Mohapatra, IAS with effect from 19th July, 2011. Shri M S Dagur, IAS is the Chief Executive Officer & Rehabilitation Commissioner, Sardar Sarover Punarvasavat Agency, Vadodara and Principal Secretary to Governrment (R&R), Narmda Water Resources, Water Supply & Kalpsar Department, Gandhinagar and holds additional charge as the Managing Director of the Company.

The Board places on record its deep appreciation of valuable services and contribution in the growth of the Company given by Dr. Guruprasad Mohapatra, IAS during his tenure as the Managing Director of the Company.

Shri J N Godbole and Padma Bhushan, Dr. Sukh Dev, Directors will retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment and your Directors recommend the same for your approval.

PARTICULARS OF EMPLOYEES:

The information, as required under Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended, forms part of this Report. Any Shareholder interested in seeking this information may write to Company Secretary of the Company at the Registered Office of the Company. Further, there was no employee holding 2% or more of the equity shares of the Company during the year 2010-11.

INTERNAL AUDITORS:

M/s K.C. Mehta & Co., Chartered Accountants, Vadodara have been appointed as Internal Auditors for conducting Internal Audit of the Company for Vadodara and Dahej Complexes. The Internal Auditors independently evaluate the internal controls, adherence to and compliance with the procedures, guidelines and statutory requirements. The Audit Committee of Directors periodically reviews the reports of the internal auditors.

STATUTORY AUDITORS:

The Company's Auditors M/s. Prakash Chandra Jain & Co., Chartered Accountants, Vadodara, retire and are eligible for reappointment. They have Furnished necessary concurrence and declaration and also informed that the Peer Review certificate issued by ICAI to them is valid for three years from the date of issue. You are requested to appoint Statutory Auditors and authorise your Directors to fix their remuneration.

COST AUDITORS:

The Government of India, Ministry of Finance has issued Cost Audit Order under Section 233(B) of the Companies Act, 1956 to appoint Cost Auditors to audit the Cost Accounting Records and Books of Accounts maintained by the Company in respect of "Caustic Soda" and "Chloromethanes" Products. Accordingly, the Board of Directors has appointed M/s. R K Patel & Co., Cost Accountants, Vadodara as Cost Auditor for Financial Year 2010-11 to conduct the Cost Audit of Caustic Soda products in both the plants at Vadodara and Dahej Complexes and for Chloromethanes products at Vadodara Complex of the Company.

ACKNOWLEDGEMENTS:

The Board expresses its gratitude and appreciation to the Government of India, Government of Gujarat, Financial Institutions, Insurance Companies, Banks, other business associates, Promoters, Shareholders and employees of the Company for their continued support.

For and on behalf of the Board

A K JOTI

CHAIRMAN

Place : Gandhinagar

Date : 28th July, 2011

 
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