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Directors Report of Gujarat State Fertilizer & Chemicals Ltd.

Mar 31, 2023

Your Directors have pleasure in presenting their 61^st Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2023.

1. Financial highlights of the Company

(Rs. in Crores)
Sr.	Particulars	Standalone		Consolidated
No.		2022-23	2021-22	2022-23	2021-22
1	Gross Sales	11298.03	8997.78	11368.69	9084.79
2	Other Income	146.48	180.35	148.85	181.11
3	Total Revenue	11444.51	9178.13	11517.54	9265.90
4	Less : Operating Expenses	9680.57	7685.44	9780.81	7763.73
5	Operating Profit	1763.94	1492.69	1736.73	1502.17
6	Less : Finance Cost	14.89	9.63	15.03	9.77
7	Gross Profit	1749.05	1483.07	1721.70	1,492.40
8	Less : Depreciation	181.51	178.18	182.02	178.8
9	Exceptional Item	0	0	0	0
10	Profit before Taxes	1567.54	1304.89	1539.68	1313.61
11	Shares in Profit/(Loss) of Associates	0	0	3	1.6
12	Profit before taxes after Associates	1567.54	1304.89	1542.68	1315.21
13	Taxation
	â¢ Current Tax	410.34	328.94	412.66	331.70
	â¢ Deferred Tax (net)	-115.68	79.57	-115.68	79.45
	â¢ Mat Credit recognized	0	0	0	0
	â¢ Earlier year tax	-20.2	5.48	-20.2	5.48
14	Profit after taxes	1293.08	890.90	1265.92	898.58
15	Non-controlling Interest	0	0	0.03	-0.03
16	Other comprehensive income arising from
	re-measurement of defined benefit plan	16.96	13.31	16.97	13.07
17	Balance brought forward from last year	683.85	357.30	775.38	441.35
18	Amount available for appropriations	1,993.89	1,261.52	2,058.24	1,353.03
19	Payment of Dividend
	- Dividend	99.62	87.67	99.62	87.67
20	Transfer to General Reserve	490.00	490.00	490.00	490.00
21	Leaving a balance in the Profit & Loss Account	1,404.27	683.85	1468.62	775.38

2. Dividend:

Your Directors are happy to recommend a dividend @ 500%, i.e. '' 10/- per Equity Share (Face value of '' 2/-each) on 39,84,77,530 shares (Previous Year - 125%, i.e. '' 2.50 per share on 39,84,77,530 Equity Shares of '' 2/- each) for the financial year ended 31^st March, 2023. The net outgo on account of Dividend shall be '' 398.48 Crores. The Dividend shall be paid to those members, whose names shall appear on the Register of Members of the Company on the Book Closure Date i.e. on 08/09/2023.

3. Brief description of the Company''s working during the year/ State of Company''s affairs:

Your directors wish to report that your Company has achieved turnover of '' 11,298 Crores for the year ended 31^stMarch 2023 as against '' 8,998 Crores (FY 21-22) on Standalone basis, which is higher by '' 2300 Crores when compared to previous Financial Year.

Similarly, for the year under review (FY 22-23), Profit Before Tax (PBT) was '' 1568 Crores and Net Profit (Profit After Tax) was '' 1293 Crores as against PBT of '' 1305 Crores and Net Profit of '' 891 Crores for the previous Financial Year.

4. Material changes and commitments:

The Company has not made any material changes or commitments which affect the financial position of the Company during the financial year of the Company to which the financial statements relate and as on the date of signing of this report.

5. Details of 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 such orders except those which have been appropriately challenged before the judiciary and no impact on going concern status and Company''s operation in future of such matters are expected or visualized at the current stage at which they are.

6. Details in respect of adequacy of internal financial controls with reference to the Financial Statements:

Your Company has an internal Control System which commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function lies with the Audit Committee of Directors. The Audit Committee monitors and evaluates the efficacy and adequacy of internal control systems, accounting procedures and policies. Based on the report of Internal Auditors, significant audit observations and actions taken on such observations are presented to the Audit Committee of the Board.

7. Details of Subsidiary/Joint Ventures/Associate Companies:

During the year under review, Companies listed below are the Subsidiary Company or Associate Companies:

Subsidiary Companies

GSFC Agrotech Limited*

Gujarat Port and Logistics Company Limited** Vadodara JalSanchay Private Limited***

Associate Companies

Vadodara Enviro Channel Limited Gujarat Green Revolution Company Limited Gujarat Data Electronics Limited Karnalyte Resources INC

The Company does not have any material subsidiary in terms of Company''s Act, 2013 read with SEBI (Listing Obligation & Disclosure Requirement) Regulations.

*GSFC Agrotech Limited was incorporated on 02/04/2012 as a wholly owned subsidiary company of Gujarat State Fertilizers & Chemicals Limited.A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided at Annexure - A to the Consolidated Financial Statement and hence not reproduced here for the sake of brevity.

**Gujarat Port and Logistics Company Limited was incorporated on 03/02/2020 as a Joint Venture Company by Gujarat State Fertilizers & Chemicals Limited and Gujarat Maritime Board with proposed investment in the ratio of 60:40 respectively. A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided at Annexure - A to the Consolidated Financial Statement and hence not reproduced here for the sake of brevity.

***Vadodara Jal Sanchay Private Limited was incorporated on 22/07/2020 as a joint venture company by Gujarat State Fertilizers & Chemicals Limited, Gujarat Alkalies and Chemicals Limited, Gujarat Industries Power Company Limited and Vadodara Municipal Corporation with investment in the ratio of 60:15:15:10 respectively. A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided at Annexure - A to the Consolidated Financial Statement and hence not reproduced here for the sake of brevity.

8. Listing of Shares & Depositories:

The Equity Shares of your Company are listed on the BSE Limited (BSE) and National Stock Exchange of India Ltd. (NSE). As approved by the shareholders Equity Shares have been delisted from Calcutta Stock Exchange Association Ltd., Kolkata. The listing fee for the FY 23-24 has been paid timely to both the BSE and NSE.

Your Directors wish to state that the Equity Shares of your Company are compulsorily traded in dematerialized form w.e.f. 26/06/2000. Presently, 98.30% of shares are held in electronic/ dematerialized form.

9. Report on Corporate Governance And Management Discussion And Analysis Report To Shareholders:

Your Company has complied with all the mandatory requirements of Corporate Governance norms as mandated by SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

A separate report on Corporate Governance together with the Certificate of M/s. Samdani Kabra & Associates, Company Secretaries, Vadodara forms part of this Annual Report. The Management Discussion & Analysis report also forms part of this Annual Report.

10. Business Responsibility and Sustainability Report:

Business Responsibility and Sustainability Report forms part of this Annual Report as required under Regulation 34(2) (f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

11. Fixed Deposits

During the year 2022-23, your Company has not accepted/ renewed any Fixed Deposit. Your Directors wish to report that there are NIL Fixed Deposits aggregating '' NIL which have remained unclaimed by Depositors, as on 31^st March, 2023. Letters reminding them to seek repayment have been sent. Upto and including the date of this report, Nil deposits have been repaid.

During the year, the Company has transferred nil amount to unclaimed deposits and interest amount thereon to the Investors'' Education and Protection Fund (IEPF) as required in terms of Section 125 of the Companies Act, 2013. The Company has discontinued accepting new deposits since 15.11.2005, and renewing the deposits since 31.03.2009.

12. Insurance:

All the properties and insurable interests of the Company, including the buildings, plant & machinery and stocks have been adequately insured. Also, as required under the Public Liability Insurance Act, 1991, your Company has taken the appropriate insurance cover.

13. Expansion & Diversification

Your Directors are happy to share the status of various projects that are under execution/executed as below: 100 MTPD Gypsum Granulation Plant:-

Considering increased use of Gypsum granules as a soil conditioner and the cost advantage over Gypsum powder, your company has successfully commissioned 100 MTPD Gypsum Granulation Plant at Vadodara unit on LSTK basis in November, 2022.

400 MTPD Ammonium Sulphate Plant at Vadodara Unit:-

To capture growing market of Ammonium Sulphate, your company is setting up 400 MTPD Ammonium Sulphate Plant at Vadodara Unit. Based on experience of Ammonium Sulphate production over the years, your company will execute the Project without involving technology supplier and by utilising In-house expertise and available resources. The Project is under execution stage and expected Commissioning date is December, 2023.

20 MTPD HX Crystal Project-

Considering present demand-supply gap and as an import substitute, your company is expanding production capacity of HX crystals plant at Vadodara unit for further value addition. Your company will execute the Project based on In-house technology and by utilising available resources.

Relocation of 07 nos. Wind mills to facilitate operation of Rajkot International Airport:-

To facilitate the operation of Rajkot International Airport, your Company is relocating 07 nos. of wind mills from Mahidad, Rajkot site by engaging M/s Suzlon as LSTK Contractor. Project is under execution stage and expected dated of commissioning of these wind mills at new location is December, 2023.

15 MW Solar Power Project at Charanka:-

To make use of green energy & meet Renewable Purchase Obligation (RPO) requirement, your company is setting up 15 MW ground mounted solar power plant at Charanka, Gujarat. Your company has awarded the work to EPC contractor and Project activities are under progress.

Urea Plant Revamping Project:-

To reduce the energy consumption of existing Urea Plants and improve the plant reliability considering vintage plant, your company is carrying out revamping of Urea-II Plant. M/s Casale SA, Switzerland is selected as Technology supplier while M/s Larson & Toubro Limited is selected as EPC contractor. The Project is under execution stage and expected Commissioning date is February, 2025.

600 MTPD Sulphuric Acid Plant at Vadodara Unit:-

Based on Sulphuric Acid & Steam balance of the complex, your Company is setting up 600 MTPD Sulphuric Acid Plant on LSTK basis at Vadodara Unit. M/s ISGEC Heavy Engineering Limited is selected as LSTK Contractor with M/s DMCC technology. The Project is under execution stage and expected Commissioning date is November, 2024.

600 MTPD Phosphoric Acid Plant and 1800 MTPD Sulphuric Acid Plant at Sikka Unit:-

As a part of backward integration, your Company is considering to install 600 MTPD Phosphoric Acid Plant and 1800 MTPD Sulphuric Acid Plant at Sikka Unit. M/s TECI, Tunisia is selected as Technology supplier for Phosphoric Acid Plant while M/s Chemetics, Canada is selected as Technology supplier for Sulphuric Acid Plant. Basic Engineering activities are under progress by technology suppliers.

Roof top Solar Power Project at Vadodara and Sikka Unit:-

To enhance green energy portfolio, your Company is considering to set up roof top solar plant at Vadodara Unit and floating roof & roof top solar plant at Sikka unit on EPC basis. Company has received commercial offers from EPC contractors and same are under evaluation.

Green Hydrogen Project at Vadodara Unit:-

As a part of green initiative of Government of India, your company is evaluating setting up of a Green Hydrogen Project at Vadodara Unit on LSTK basis.Company has received technical offers from LSTK contractors which are under evaluation.

40,000 MTPA Melamine-IV Project at Vadodara Unit:-

After successful commissioning and operation of 40,000 MTPA Melamine-III Project at Vadodara Unit, your Company is considering to set up 40,000 MTPA Melamine-IV Project at existing location of Melamine-I Plant at Vadodara unit. Company has received technical offer from technology supplier and same is under evaluation.

Revival of Polymer Unit (PU):-

Company is in process of identifying Projects for growth which may be undertaken on standalone basis or under a JV. In order to assess the potential of the shortlisted products, company is in process of carrying out Market Survey.

Revival of Fiber Unit (FU):-

Company has identified various options for revival of Fiber Unit and same are under evaluation.

Development of Dahej Complex: -

Company has prepared a business plan for development of Dahej Complex by engaging consultant. Company is in process of carrying out Detailed Project report for the identified products in business plan.

14. Information regarding conservation of energy, technology absorption, foreign exchange earnings and outgo and particulars of employees etc.

Information as required under Section 134 (3) (m) of Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are enclosed in Annexure âCâ forming part of this report.

The details relating to Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have been disclosed in point # 5 of Corporate Governance Report.

15. Corporate Social Responsibility (CSR)

has undertaken projects in the areas of education, livelihood, health, water and sanitation. The Annual Report on CSR activities is enclosed as Annexure A. CSR Policy adopted by the Company is placed on the Company''s website at https://www.gsfclimited.com/social_commitment.asp?mnuid=1&fid=15

16. Directors

A) Changes in Directors and Key Managerial Personnel:

Shri Raj Kumar, IAS has been appointed as Chairman w. e. f. 21.02.2023 in place of Shri Pankaj Kumar, IAS (till 01.02.2023).

Shri J. P. Gupta, IAS shall be liable to retire by rotation at the ensuing Annual General meeting and has offered himself for re-appointment.

Government of Gujarat had nominated Shri Mukesh Puri as Managing Director of the Company effective from 06/12/2020. As per the Government of Gujarat Order dated 05/12/2020, he was the Additional Chief Secretary, Urban Development & Urban Housing Department, Government of Gujarat and was holding additional charge as Managing Director - GSFC Limited for the period effective from 06/12/2020.

Accordingly the members at 60^th Annual General Meeting approved the appointment of Shri Mukesh Puri, IAS as Managing Director of the Company. The members at the said 60^th AGM further authorized the Board of Directors to approve the remuneration, perquisites or terms and conditions for his appointment, as per the communication that may be received from the Government from time to time.

Government of Gujarat, vide its resolution # GSF/1098/1620/ E dated 20/01/2022 advised the terms and conditions for his appointment holding full time charge as Managing Director - GSFC Limited during his tenure for holding full charge as Managing Director - GSFC Limited.

The terms and conditions issued by the Government of Gujarat for the period of his appointment in the category of Executive Director was approved by the shareholders at 60^th Annual General Meeting for a period from 24/12/2021 to 03/03/2022.

Thereafter, vide GoG Notification dated 03/03/2022; he was again given charge as Additional Chief Secretary to Agriculture, Farmers Welfare and Co-operation Department, Government of Gujarat and was appointed to hold the additional charge as Managing Director - GSFC Limited. Hence, the category again was changed from executive director to non-executive director.

Further, vide GoG Notification dated 31/03/2023, he was transferred from Agriculture, Farmers Welfare and Co-operation Department, Government of Gujarat and was appointed as Additional Chief Secretary to Home Department, Government of Gujarat and continued to hold the additional charge as Managing Director -GSFC Limited

Shri Tapan Ray, Smt. Gauri Kumar, Prof. Ravindra Dholakia and Dr. Sudhir Kumar Jain, independent directors have submitted declarations that they meet the criteria of Independence as provided under section 149 (6) of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, the names of all the Independent Directors of the Company have been included in the data bank maintained by the Indian Institute of Corporate Affairs.

The brief resume of Directors with regard to appointment/ re-appointment at 61^st Annual General Meeting is annexed to the Notice convening the 61^stAnnual General Meeting, which forms the integral part of this Annual Report.

Shri Vishvesh Vachhrajani, Company Secretary & Compliance Officer of the Company has tendered his resignation w.e.f. 10/02/2023 and hence ceases to be the Key Managerial Personnel of the Company. Smt.

Nidhi Pillai has been appointed as Company Secretary & Compliance Officer as well as Key Managerial Personnel of the Company.

A Certificate has been obtained from the Company Secretary in practice, confirming that none of the directors on the Board of Directors of the Company have been debarred or disqualified from being appointed or continuing as director of Companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs or any such other statutory authorities. The Certificate of Shri Niraj Trivedi forms part of this report.

B) Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation & Disclosure Requirement) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of its committees. The manner in which the evaluation has been carried out is explained in the Corporate Governance Report which forms the part of this Annual Report.

C) Appointment and Remuneration Policy:

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, senior management and their remuneration. The details of Remuneration Policy and its web link are contained in the Corporate Governance Report.

D) Meetings:

During the year, six Meetings of the Board of Directors and five meetings of the Audit Committee were held. The composition of Board and Committees along with details of attendance is contained in Corporate Governance Report.

Dividend Distribution Policy: The Board of Directors of the Company at its Meeting held on 26th May, 2017 has adopted âDividend Distribution Policyâ effective from 26th May, 2017, which is available on the Company''s Website at the link https://www.gsfclimited.com/companys-act-listing-agreement.

As per the SEBI Listing Regulations, the said âDividend Distribution Policyâ is also required to be disclosed in the Annual Report of the Company, which is annexed herewith as Annexure - D.

17. Details of establishment of vigil mechanism for Directors and Employees:

The Company has a Vigil Mechanism Policy in place to deal with instances, if any, of the fraud, mismanagement, misappropriations, if any and the same is placed on the Company''s website. The details of the policy as well as its web link are contained in the Corporate Governance Report.

Reporting of fraud by Auditors

Disclosure as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (as amended from time to time).

Secretarial Standards of ICSI

Your Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India and approved by the Central Government.

18. Particulars of loans, guarantees or investments under section 186:

Particulars of loans given, investments made, guarantee given and securities provided (if any) 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.

19. Particulars of contracts or arrangements with related parties:

All Related party transactions were placed before the Audit Committee and also the Board of Directors for approval. Prior omnibus approval of the Audit Committee is obtained and a statement giving details of transactions, if any, shall be continued to be placed before the Audit Committee meeting as mandated. The Company has developed a mechanism for identification of related party transactions and the Company is also having the system of monitoring of such transactions.

During the Financial Year, the transactions entered into by the Company with Related Parties were in the ordinary course of business at arm''s length price and/or within the omnibus approval granted by the Audit Committee.

The Company has not entered into contracts / arrangements / transactions with Related Parties which could be considered material in accordance with Section 188 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 and the Policy of the Company on Related Party T ransactions. Since, all the contracts / arrangements / transactions with Related Parties during the year were in the ordinary course of business and/or the same were at arm''s length as well as under the special omnibus approval route and not being material transaction as defined under the Act / Rules, disclosure in Form AOC-2 under Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is not required.

20. Managerial Remuneration:

Details as required pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are contained in Corporate Governance Report.

21. Risk management policy:

The details of such Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board''s Report.

22. Directors'' Responsibility Statement:

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, your Directors confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. 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 and loss of the Company for that period;

c. 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;

d. The Directors had prepared the annual accounts on a going concern basis;

e. The Directors, in the case of a listed Company, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f. 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.

23. Auditors:

(a) Statutory Auditors

On the recommendation of Audit Committee, the Board of Directors has recommended for the appointment of M/s. Parkih Mehta & Associates, Vadodara, Chartered Accountants (Firm Registration No. 112832W) as the Statutory Auditors for the first term of two consecutive years i.e. to hold the office from the conclusion of 60^th Annual General Meeting till the conclusion of 62^nd Annual General Meeting of the Company to be held in the year 2024.

(b) Cost Auditors:

The Board of Directors of your Company, on the recommendations made by the Audit Committee, has approved appointment of M/s Diwanji & Company, Cost Accountants, Vadodara (Firm Registration Number 000339) as the Cost Auditors of your Company to conduct the audit of cost records for the Financial Year 2023-24. The remuneration proposed to be paid to the Cost Auditor is placed for your ratification at the ensuing 61^st Annual General Meeting. The Cost Audit report for the F.Y. 2022-23 was filed within stipulated time.

Your Company has appointed M/s K C Mehta & Co, Chartered Accountants, Vadodara, as Internal Auditors of Baroda & Sikka Unit for Financial Year i.e. 2023-24.

(d) Secretarial Auditors & Secretarial Audit Report:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Niraj Trivedi, Practicing Company Secretary to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor is enclosed as Annexure B.

24. Auditors'' Report:

There are no comments/ observations, reservations or adverse remarks in the Auditors Report and Secretarial Audit Report and hence no clarifications need to be given on the clean report.

25. Annual Return:

The Annual Return of 2021-22 in prescribed Form No. MGT-7, as required under Section 92(1) of the Companies Act, 2013 read with Rule 11 of the Companies (Management and Administration) Rules, 2014 was filed and is placed on the Company''s Website at https://www.gsfclimited.com/companys-act-listing-agreement.

The same was filed with the Registrar of Companies, Gujarat (ROC) on Ministry of Corporate Affairs (MCA) portal within prescribed time limit.

26. Human Resources:

Your Directors are happy to acknowledge that the well positioned human resource of the Company have been key drivers in implementing ideas, polices, cultural and behavioral aspects of the organization and ultimately with their outstanding performance has helped the Company to realize its objectives. Your Directors are happy to place on record their appreciation for highly potential, consistent and ethical employees for their remarkable contribution to the Company.Industrial Relations have remained cordial during the period under report.

27. Acknowledgements:

Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from the Government of Gujarat, Government of India, Bank of Baroda and other Banks and agencies. Your Directors also wish to express their gratitude to the investors for their continued support and faith reposed in the Company.

For and on behalf of the Board Sd/-

Place : Fertilizernagar Raj Kumar, IAS

Date : 22^nd August, 2023 Chairman

(DIN: 00294527)

Mar 31, 2022

Your Directors have pleasure in presenting their 60^th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2022.

1. Financial highlights of the Company

('' in Crores)
Sr.	Particulars	Standalone		Consolidated
No.		2020-21	2021-22	2020-21	2021-22
1	Gross Sales	7499.61	8995.63	7634.06	9082.64
2	Other Income	183.34	182.50	183.17	183.26
3	Total Revenue	7682.95	9178.13	7817.24	9265.90
4	Less : Operating Expenses	6950.46	7685.44	7062.76	7763.73
5	Operating Profit	732.49	1492.69	754.48	1502.17
6	Less : Finance Cost	42.74	9.63	43.00	9.77
7	Gross Profit	689.76	1483.07	711.48	1,492.40
8	Less : Depreciation	176.45	178.18	177.20	178.80
9	Exceptional Item	0.00	0.00	0.00	0.00
10	Profit before Taxes	513.32	1304.89	534.28	1313.61
11	Shares in Profit/ (Loss) of Associates	0.00	0.00	0.65	1.60
12	Profit before taxes after Associates	513.31	1304.89	534.94	1315.21
13	Taxation
	â¢ Current Tax	70.84	328.94	74.62	331.70
	â¢ Deferred Tax (net)	78.08	79.57	63.49	79.45
	â¢ Mat Credit recognized	-32.62	0.00	-32.62	0.00
	â¢ Earlier year tax	-20.66	5.48	-20.66	5.48
14	Profit after taxes	417.67	890.90	450.11	898.58
15	Non-controlling Interest	0.00	0.00	-0.02	-0.03
16	Other comprehensive income arising from
	re-measurement of defined benefit plan	-6.06	13.31	-6.07	13.07
17	Balance brought forward from last year	223.51	357.30	275.11	441.35
18	Amount available for appropriations	635.12	1261.52	719.17	1,353.04
19	Payment of Dividend
	- Dividend	47.82	87.67	47.82	87.67
20	Transfer to General Reserve	230.00	490.00	230.00	490.00
21	Leaving a balance in the Profit & Loss Account	357.30	683.85	441.35	775.38

2. Dividend:

Your Directors are happy to recommend a dividend @ 2.50 per Equity Share (Face value of Rs. 2/- each) on 39,84,77,530 shares (Previous Year - 110%, i.e. Rs. 2.20 per share on 39,84,77,530 Equity Shares of Rs.2/-each) for the financial year ended 31^st March, 2022. The net outgo on account of Dividend shall be Rs. 99.62 Crores including Corporate Dividend Tax. The Dividend shall be paid to those members, whose names shall appear on the Register of Members of the Company on the Book Closure Date i.e. on 13/09/2022.

3. Brief description of the Company''s working during the year/ State of Company''s affair:

Your directors wish to report that your Company has achieved turnover of Rs. 8996 Crores for the year ended March 31, 2022 as against Rs. 7500 Crores (FY 20-21) on standalone basis, which is higher by Rs.1496 crores when compared to the previous financial year.

Similarly, for the year under review (FY 21-22), Profit before Tax (PBT) was Rs.1305 Crores and Net Profit (Profit after Tax) was Rs.891 Crores as against PBT of Rs.513 Crores and PAT of Rs.418 Crores for the previous financial year.

4. Material changes and commitments:

5. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future:

6. Details in respect of adequacy of internal financial controls with reference to the Financial Statements:

7. Details of Subsidiary/Joint Ventures/Associate Companies:

During the year under review, Companies listed below are the Subsidiary Company or Associate Companies:

> Subsidiary Companies - GSFC Agrotech Limited.

Gujarat Port and Logistics Company Limited*

Vadodara Jal Sanchay Private Limited*

> Associate Companies - Vadodara Enviro Channel Limited

Gujarat Green Revolution Company Limited Gujarat Data Electronics Limited Karnalyte Resources INC

> Subsidiary of Subsidiary - Gujarat Arogya Seva Private Limited**

*Gujarat Port and Logistics Company Limited was incorporated on 03/02/2020 as a Joint Venture Company by Gujarat State Fertilizers & Chemicals Limited and Gujarat Maritime Board with proposed investment in the ration of 60:40 respectively. A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided at Annexure - A to the Consolidated Financial Statement and hence not reproduced here for the sake of brevity. The Company does not have any material subsidiary in terms of Company''s Act, 2013 read with SEBI (Listing Obligation & Disclosure Requirement) Regulations.

*Vadodara Jal Sanchay Private Limited was incorporated on 22/07/2020 as a joint venture company by Gujarat State Fertilizers & Chemicals Limited, Gujarat Alkalies and Chemicals Limited, Gujarat Industries Power Company Limited and Vadodara Municipal Corporation with investment in the ratio of 60:15:15:10 respectively. A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided at Annexure - A to the Consolidated Financial Statement and hence not reproduced here for the sake of brevity. The Company does not have any material subsidiary in terms of Company''s Act, 2013 read with SEBI (Listing Obligation & Disclosure Requirement) Regulations, 2015.

** Gujarat Arogya Seva Private Limited (GASPL) was incorporated on 28th March 2017 with the primary object to retail generic medicines. The said Company was jointly promoted by Gujarat Medical Services Corporation Ltd (GMSCL) and GSFC Agrotech Limited (a wholly owned subsidiary of GSFC Limited) with equity participation of 49% (Rs.1.30 Crore) and 51% (Rs. 1.35 Crore) respectively.

GASPL has remained dormant ever since its incorporation except for statutory compliances with ROC and book keeping activities to avoid defaults and penalties. GASPL is inoperative company and since last 2 years has neither carried out any commercial activity nor there remain any possibility to carry out such activities. As such now there is no plan for commencing the business in view of the Government Resolutions dated 05-07-18 and

18-07-18 issued by the Additional Chief Secretary, Health & Family welfare Department, GOG. As per the said GR, it has been decided to transfer the work of Generic Drug Stores to M/s. H.L.L. Life Care Limited. Hence, it was decided to dissolve the company.

The process for voluntary liquidation of the company was carried out by M/s Ravi Kapoor and Associates, who was appointed as liquidator for the company. The National Company Law Tribunal (NCLT) allowed the application for voluntary liquidation of the Company and the Company got dissolved accordingly vide Order dated 16.03.2022 issued by NCLT, Ahmedabad.

8. Listing of Shares & Depositories:

The Equity Shares of your Company are listed on the BSE Limited (BSE) and National Stock Exchange of India Ltd. (NSE). As approved by the shareholders, an application for voluntary delisting of Equity Shares from Calcutta Stock Exchange Association Ltd., Kolkata, was made, however, the approval for delisting is still not received. The listing fee for the FY 22-23 has been paid timely to both the BSE and NSE.

Your Directors wish to state that the Equity Shares of your Company are compulsorily traded in dematerialized form w.e.f. 26/06/2000. Presently, 98.12% of shares are held in electronic/ dematerialized form.

9. Report on Corporate Governance And Management Discussion And Analysis Report To Shareholders:

Your Company has complied with all the mandatory requirements of Corporate Governance norms as mandated by SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

10. Business Responsibility Reporting

Business Responsibility Report forms part of this Annual Report as required under Regulation 34(2) (f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

11. Fixed Deposits

During the year 2021-22, your Company has not accepted/ renewed any Fixed Deposit. Your Directors wish to report that there are NIL Fixed Deposits aggregating Rs. NIL which have remained unclaimed by Depositors, as on 31^st March, 2022. Letters reminding them to seek repayment have been sent. Upto and including the date of this report, Nil deposits have been repaid.

During the year, the Company has transferred a sum of Rs. NIL Lacs being the unclaimed deposits and interest amount thereon to the Investors'' Education and Protection Fund (IEPF) as required in terms of Section 125 of the Companies Act, 2013. The Company has discontinued accepting new deposits since 15.11.2005, and renewing the deposits since 31.03.2009.

12. Insurance:

13. Expansion & Diversification

Your Directors are happy to share the status of various projects that are under execution/ executed as below: PA & APS Plants Refurbishment:-

To improve productivity, efficiency and reliability of the old PA and APS Plants established in the year 1967, your Company has taken up refurbishment of these plants. The Project is successfully completed well within the allocated budget.

Nylon- 6 Compounding Project:-

Considering growing demand of Nylon-6 Compounded chips and as a value added product, your company has successfully commissioned 2 numbers of 24 MTPD capacity Nylon-6 compounding lines in the month of December, 2021.

400 MTPD Ammonium Sulphate Plant at Vadodara Unit:-

To capture growing market of Ammonium Sulphate, your company is setting up 400 MTPD Ammonium Sulphate

Plant at Vadodara Unit. Based on experience of Ammonium Sulphate production over the years, your company will execute the Project without involving technology supplier and by utilising In-house expertise and available resources. Engineering activities are completed and Procurement & Construction activities are under progress. 20 MTPD HX Crystal Project:-

100 MTPD Gypsum Granulation Plant:-

Considering increased use of Gypsum granules as a soil conditioner and the cost advantage over Gypsum powder, your company is setting up 100 MTPD Gypsum Granulation Plant at Vadodara unit on LSTK basis. Your company has awarded the work to LSTK contractor and Project activities are under progress.

15 MW Solar Power Project at Charanka:-

Urea Plant Revamping Project:-

To reduce the energy consumption of existing Urea Plants and improve the plant reliability considering vintage plant, your company is considering to carry out revamping of Urea-II Plant. M/s Casale SA, Switzerland is selected as Technology supplier and accordingly, Basic Engineering Package is received from M/s Casale. Company has received commercial offers & the same are under evaluation.

600 MTPD Sulphuric Acid Plant at Vadodara Unit:-

Based on Sulphuric Acid & Steam balance of the complex, your Company is considering to set up 600 MTPD Sulphuric Acid Plant on LSTK basis at Vadodara Unit. Company has received commercial offers & the same are under evaluation.

600 MTPD Phosphoric Acid Plant and 1800 MTPD Sulphuric Acid Plant at Sikka Unit:-

As a part of backward integration, your Company is considering to install 600 MTPD Phosphoric Acid Plant and 1800 MTPD Sulphuric Acid Plant at Sikka Unit. Discussions are in progress with Phosphoric Acid and Sulphuric Acid technology suppliers for contract finalisation.

Roof top Solar Power Project at Vadodara Unit:-

To enhance green energy portfolio, your Company is considering to set up roof top solar plant at various identified locations & a floating roof solar power plant at Vadodara Unit. Company has invited Expression of Interest from EPC contractors & based on responses, the techno-commercial offers will be invited.

Green Hydrogen Project at Vadodara Unit:-

As a part of green initiative of Government of India, your company is evaluating various options to set up a Green Hydrogen Project at Vadodara Unit.

Phosphate Rich Organic Manure (PROM), Project at Polymer Unit:-

With a view to expand GSFC''s Agro-product portfolio, your company is considering to enter into organic fertilizers by setting up 2x200 MTPD PROM plant at Polymer unit by using available existing infrastructure.

14. Information regarding conservation of energy, technology absorption, foreign exchange earnings and outgo and particulars of employees etc.

Information as required under Section 134 (3) (m) of Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are enclosed in Annexure D forming part of this report.

15. Corporate Social Responsibility (CSR)

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section

135 of the Companies Act, 2013. As a part of its initiatives under âCorporate Social Responsibilityâ, the Company has undertaken projects in the areas of education, livelihood, health, water and sanitation. The Annual Report on CSR activities is enclosed as Annexure A. CSR Policy adopted by the Company is placed on the Company''s website at https://www.gsfclimited.com/companys-act-listing-agreement

16. Directors

A) Changes in Directors and Key Managerial Personnel:

Shri Pankaj Kumar, IAS has been appointed as Chairman w. e. f. 07.09.2021 in place of Shri Anil Mukim, IAS (till 31.08.2021).

Further, the members may kindly note that Smt. Jayaben Thakkar, Independent Director (Woman) of the Company has tendered her resignation with effective from 09/02/2022 due to personal commitments and other pre-occupations.

Government of Gujarat had nominated Shri Mukesh Puri as Managing Director of the Company with effective from 06/12/2020. As per the Government of Gujarat Order dated 05/12/2020, he was the Additional Chief Secretary, Urban Development & Urban Housing Department, Government of Gujarat and was holding additional charge as Managing Director-GSFC Limited for the period effective from 06/12/2020. Accordingly the members at 59^th Annual General Meeting approved the appointment of Shri Mukesh Puri, IAS as Managing Director of the Company. The members at the said 59^th AGM further authorized the Board of Director to approve the remuneration, perquisites or terms and conditions for his appointment, as per the communication that may be received from the Government from time to time.

Thereafter, Shri Mukesh Puri, IAS was relieved from the charge as Additional Chief Secretary, Urban Development & Urban Housing Department and his services were placed by the Government to hold full time charge as Managing Director - GSFC Limited vide GoG Notification dated 24/12/2021. Hence, he was appointed as Managing Director in the category of Executive Director with effect from 24/12/2021. Government of Gujarat, vide its resolution # GSF/1098/1620/ E dated 20/01/2022 advised the terms and conditions for his appointment holding full time charge as Managing Director - GSFC Limited during his tenure for holding full charge as Managing Director - GSFC Limited.

The terms and conditions issued by the Government of Gujarat for the period of his appointment in the category of Executive Director from 24/12/2021 to 03/03/2022 is placed for information and approval by the members in the notice convening 60^th Annual General Meeting.

Smt. Mamta Verma, IAS has been appointed w.e.f.01.07.2021as a rotational director in place of Smt. Sunaina Tomer, IAS (till 14.06.2021) and Shri J. P. Gupta, IAS has been appointed w.e.f. 14.12.2021 as rotational director in place of Shri Pankaj Joshi, IAS, (till 01.11.2021). Smt. Mamta Verma, IAS shall be liable to retire by rotational at the ensuing 60th Annual General meeting, has offered herself for re-appointment.

The brief resume of Directors with regard to appointment/ re-appointment at 60^th Annual General Meeting is annexed to the Notice convening the 60^th Annual General Meeting, which forms the integral part of this Annual Report.

B) Board Evaluation:

C) Appointment and Remuneration Policy:

D) Meetings:

During the year, five Meetings of the Board of Directors and five meetings of the Audit Committee were held. The composition of Board and Committees along with details of attendance is contained in Corporate Governance Report.

As per the SEBI Listing Regulations, the said âDividend Distribution Policyâ is also required to be disclosed in the Annual Report of the Company, which is annexed herewith as Annexure E. The dividend recommended by the Board for the year ended 31st March, 2022 is in accordance with the said Dividend Distribution Policy.

17. Details of establishment of vigil mechanism for Directors and Employees:

Reporting of fraud by Auditors

During the year under review, the Statutory Auditors of the Company have not reported any instance of fraud to the Board of Directors under Section 143 (12) of the Companies Act, 2013, including rules made thereunder. Disclosure as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Secretarial Standards of ICSI

18. Particulars of loans, guarantees or investments under section 186:

19. Particulars of contracts or arrangements with related parties:

All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel and other Designated Persons which may have a potential conflict with the interest of the Company at large.

a mechanism for identification of related party transactions and the Company is also having the system of monitoring of such transactions. The appropriate resolution regarding related parties is placed for the approval of members and forms the part of the notice convening the 60^th Annual General Meeting.

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm''s length transactions under third proviso thereto have been disclosed in Annexure C to this report.

20. Managerial Remuneration:

Details as required pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are contained in Corporate Governance Report.

21. Risk management policy:

The details of such Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board''s Report.

22. Directors'' Responsibility Statement:

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, your Directors confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

d. The Directors had prepared the annual accounts on a going concern basis;

f. 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.

23. Auditors:

(a) Statutory Auditors

(b) Cost Auditors:

In terms of the Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost accounting records and get them audited every year. The Board of Directors of your Company, on the recommendations made by the Audit Committee, has approved appointment of M/s Diwanji & Company, Cost Accountants, Vadodara (Firm Registration Number 000339) as the Cost Auditors of your Company to conduct the audit of cost records for the Financial Year 2022-23. The remuneration proposed to be paid to the Cost Auditor is placed for your ratification at the ensuing 60^th Annual General Meeting. The Cost Audit report for the F.Y. 2021-22 was filed within stipulated time.

Your Company has appointed M/s K C Mehta & Co, Chartered Accountants, Vadodara, as Internal Auditors of Baroda & Sikka Unit for Financial Year i.e. 2022-23.

(d) Secretarial Auditors & Secretarial Audit Report:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Niraj Trivedi, Practicing Company Secretary to undertake the secretarial audit of the Company. The Report of the Secretarial Auditor is enclosed as Annexure B.

24. Auditors'' Report:

There are no comments/ observations, reservations or adverse remarks in the Auditors Report and Secretarial Audit Report and hence no clarifications need to be given on the clean report.

25. Extract of the annual return:

Link of annual report as per the Companies Amendment Act, 2017 is as below; https://www.gsfclimited.com/companys-act-listing-agreement

26. Human Resources:

Industrial Relations have remained cordial during the period under report.

27. Acknowledgements:

For and on behalf of the Board

Sd/-

Place : Fertilizernagar Pankaj Kumar, IAS

Date : 22/08/2022 Chairman

Mar 31, 2018

DIRECTORS¹ REPORT

The Members,

The Directors have pleasure in presenting their 56^th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2018.

1. Financial highlights of the Company

(Rs. in Crores)

Sr.	Particulars	Standalone		Consolidated
No.		2017-18	2016-17	2017-18	2016-17
1	Gross Sales	6309.27	5476.88	6304.57	5476.88
2	Other Income	94.67	56.64	98.95	56.30
3	Total Revenue	6403.94	5533.52	6403.52	5533.18
4	Less : Operating Expenses	5742.68	4990.28	5739.80	4982.68
5	Operating Profit	661.26	543.24	663.72	550.50
6	Less : Finance Cost	51.35	64.93	51.35	64.92
7	Gross Profit	609.91	478.31	612.37	485.58
8	Less : Depreciation	119.12	103.43	119.45	103.62
9	Exceptional Item	0	0	0	0
10	Profit before Taxes	490.79	374.88	492.92	381.96
11	Taxation - Current Tax	82.08	57.35	85.28	57.76
	- Deferred Tax (net)	49.74	13.84	50.69	15.55
	- Mat Credit recognized	(15.45)	(24.30)	(15.45)	(24.30)
	- Current tax relating to prior years	(101.31)	(91.51)	(101.31)	(91.51)
12	Profit after taxes	475.73	419.50	473.71	424.46
13	Non-Controlling Interest	-	-	0.06	-
14	Other comprehensive income arising from re-measurement of defined benefit plan	(2.12)	(55.32)	(2.12)	(55.32)
15	Balance brought forward from last year	243.96	285.29	287.74	324.11
16	Amount available for appropriations	717.57	649.47	759.39	693.25
17	Out of which your Directors have proposed appropriation and transfer as under: a) Proposed dividend on equity shares	87.66	87.66	87.96	87.66
	b) Tax on proposed dividend	17.85	17.85	17.90	17.85
	c) General Reserve	180.00	300.00	180.00	300.00
18	Leaving a balance in the Profit & Loss Account	432.06	243.96	473.53	287.74

2. Dividend

Your Directors are happy to recommend a dividend @ 110%, i.e. Rs. 2.20/- per Equity Share (Face value of Rs. 2/- each) on 39,84,77,530 shares (Previous Year - 110%, i.e. Rs. 2.20 per share on 39,84,77,530 Equity Shares of Rs.2/- each) for the financial year ended 31st March, 2018. The net outgo on account of Dividend shall be Rs. 105.51 Crores including Corporate Dividend Tax. The Dividend shall be paid to those members, whose names shall appear on the Register of Members of the Company on the Book Closure Date i.e. on 13/09/2018.

3. Brief description of the Companyâs working during the year/ State of Companyâs affair

Your directors wish to report that your Company has achieved turnover of Rs. 6309.27 Crores for the year ended March 31, 2018 as against Rs. 5476.88 Crores (FY 17-18) on standalone basis, which is higher by 15% (Rs.832.39 Crores) when compared to the previous financial year.

Similarly, for the year under review (FY 2017-18), Profit before Tax (PBT) was Rs. 490.80 Crores and Net Profit (Profit after Tax) was Rs. 475.74 Crores as against PBT of Rs. 374.88 Crores and PAT of Rs. 419.50 Crores for the previous financial year.

4. Material changes and commitments

The Company has not made any material changes or commitments which affect the financial position of the Company between the end of the financial year of the Company to which the financial statements relate and the date of signing of this report.

5. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companyâs operations in future.

There are no such orders except those which have been appropriately challenged before the judiciary and no impact on going concern status and Companyâs operation in future of such matters are expected or visualized at the current stage at which they are.

6. Details in respect of adequacy of internal financial controls with reference to the Financial Statements.

7. Details of Subsidiary/Joint Ventures/Associate Companies

During the year under review, Companies listed below are the Subsidiary Company or Associate Companies:

- Subsidiary Company - GSFC Agrotech Limited.

- Associate Companies - Vadodara Enviro Channel Limited

Gujarat Green Revolution Company Limited Gujarat Data Electronics Limited Karnalyte Resources Inc.

- Subsidiary of Subsidiary - Gujarat Arogya Seva Private Limited.

There were no new additions/ deletions during the year. A report of the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided as Annexure - A to the Consolidated Financial Statement and hence not repeated here for the sake of brevity. The Company does not have any material subsidiary in terms of Companyâs Act, 2013 read with SEBI (Listing Obligation & Disclosure Requirement) Regulations.

8. Listing of Shares & Depositories

The Equity Shares of your Company are listed on the BSE Limited (BSE) and National Stock Exchange of India Ltd. (NSE). As approved by the shareholders, an application for voluntary delisting of Equity Shares from Calcutta Stock Exchange Association Ltd., Kolkatta, was made, however, the approval for delisting is still awaited. The listing fee for the FY 18-19 has been paid to both the Stock Exchanges.

Your Directors wish to state that the Equity Shares of your Company are compulsorily traded in dematerialized form w.e.f. 26/06/2000. Presently, 97.42% of shares are held in electronic/ dematerialized form.

9. Report on Corporate Governance And Management Discussion And Analysis Report To Shareholders

Your Company has complied with all the mandatory requirements of Corporate Governance norms as mandated by SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

A separate report on Corporate Governance together with the Certificate of M/s. S. Samdani & Associates, Company Secretaries, Vadodara forms part of this Annual Report. The Management Discussion & Analysis report also forms part of this Annual Report.

10. Business Responsibility Reporting

Business Responsibility Report is enclosed as Annexure âFâ to this Annual Report as required under Regulation 34(2) (f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

11. Fixed Deposits

During the year 2017-18, your Company has not accepted/ renewed any Fixed Deposit. Your Directors wish to report that there are 2 Fixed Deposits aggregating Rs. 0.25 Lacs which have remained unclaimed by Depositors, as on 31^st March, 2018. Letters reminding them to seek repayment have been sent. Upto and including the date of this report, 0 deposits amounting to Rs 0 Lacs have been repaid.

During the year, the Company has transferred a sum of Rs. 2.40 Lacs being the unclaimed deposits and interest amount thereon to the Investorsâ Education and Protection Fund (IEPF) as required in terms of Section 125 of the Companies Act, 2013. The Company has discontinued accepting new deposits since 15.11.2005, and renewing the deposits since 31.03.2009.

12. Insurance

13. Expansion & Diversification

Caprolactam Quality project (CQ project) was successfully commissioned on 25^th February 2018 and officially inaugurated on 28^th February 2018. This project is for improvement of quality of extract Caprolactam made Caprolactam-I Plant of GSFC to produce international grade Caprolactam enhancing its quality. GSFC replicated existing Lactam Section of Caprolactam-I Plant which was commissioned in the year 1992 on BASF technology and carried out their role as a Licenser of the process legally. The project is capable of production of 50000 MTPA International grade Caprolactam from Caprolactam extract. M/s Simon India Limited was awarded the contractor this plant on EPC. The total project cost of CQ Project is @ 71 Crores including taxes. This project is only one of its kinds in India for import substitute product in petrochemical industry.

The plant started producing International grade Caprolactam from the very first day of its commissioning underlining GSFCâs operational capabilities. At full load capacity of this plant, it is expected to produce @1000 MT of additional Caprolactam from lactam extract and @3500 MT of additional Ammonium Sulphate per annum as byproduct. With the commissioning of this project GSFC expects to improve their profitability significantly. It also improves operational flexibility and consistent quality of international grade Caprolactam.

GSFC has successfully commissioned its Film Grade Nylon-6 (Dry blending unit) Project on 26^th February 2018.The plant was officially inaugurated on 28^th February 2018.This plant can produce 15 MT per Day of Film Grade Nylon (5000 MT per annum) of varieties like Lubricated Chips, Nucleated chips and Combination of Lubricated and Nucleated chips. This is first of its kind project in India and provides leverage for import substitution.

GSFC had faced a very challenging task of completing this project which was based on PEPC-Germany technology. M/S PEPC-Germany backed out of the project midway due to their poor financial position leaving entire investment of Rs. 15 Crores at stake with a possible long delay. Being a LSTK project, the process recipe was a secret which party did not reveal. GSFC projects execution team developed recipe and Instrumentation logic control along with piping and structural work without drawings of the project and completed mechanically within house efforts in short period. From the first trial production, quality film grade Nylon-6 could be achieved with quantity with negligible hassles endorsing technical capabilities of GSFC Projects execution team.

This plant will provide an edge for selling of Nylon-6 with value added benefit and provide direct import substitution to the country.

- Projects under development

- 1000 MTPD Phosphoric Acid and 3000 MTPD Sulphuric Acid Plant at Sikka Unit:

As a part of backward integration, Company is contemplating to install 1000 MTPD Phosphoric Acid and 3000 MTPD Sulphuric Acid Plant on EPC basis at its Sikka Unit. This will reduce the import dependency for sustaining the plant operation on continuous basis for production of Phosphatic Fertilizers at Sikka Unit.

Company is in process of discussions with Phosphoric Acid Process Licensors for supply of Basic Engineering Package based on which the Company proposes to execute the project on EPC basis. The Company is expected to finalize the Licensor by August/September 2018. Simultaneously the Company is in final discussion with Rock Phosphate Suppliers for execution of Memorandum of Understanding (MoU) to ensure availability of rock phosphate on long term basis. Company has already achieved NoC from GPCB for execution.

- Expansion of Sikka Jetty for better utilization :

As present Sikka jetty and its associated infrastructure facilities are highly unutilized, Company is contemplating to expand the present jetty for solid handling and handling of other liquid chemicals by developing necessary infrastructure / storage facilities at jetty and Chemical Shore Terminal (CST).

After expansion and development of jetty / CST, Rock Phosphate required for new Phosphoric acid plant and other fertilizers like Urea, DAP for trading purpose will be imported at jetty. Also, other liquid chemicals like Sulphuric Acid / Methanol, Cyclohexane etc. can be imported and stored for captive use / trading purpose.

Company has got done feasibility study for the expansion of Sikka jetty and is now in the process of getting the Environment Clearance and finalising the joint venture partners for this project.

- Ammonia -Urea Complex in Republic of Congo (RoC) :

To avail benefits of availability of Natural gas at reasonable price and active interest shown by Government of RoC, Company is contemplating to install 800 MTPD Ammonia and 1100 MTPD Urea plants in RoC wherein Government of RoC will also have equity participation.

PDIL has completed Techno Economic Feasibility (TEFR) for the Project and based on initial assessment Project seems to be feasible. Company has executed a Non binding term sheet with G-RoC to form a basis of discussions for the Project. Company is process of discussions with bankers, technology suppliers and EPC contractors for their equity participation. G-RoC has applied for Line of Credit from GoI for this project and the project will be further taken based on the approvals received.

- Methyl Methacrylate (MMA) Plant at Dahej:

Company is contemplating to install 50,000 MTPS MMA plant at Dahej for which land acquisition has been completed. Company has entered into an understanding with OPaL for supply of the major raw material C4 Raffinate along with the mode of execution of the project. Company have also finalized the M/s Mitsui Chemicals Incorporation (MCI) as the technology suppliers and the requisite agreements will be shortly executed for supply of License Know-How, Process Design Package and Catalyst. The Company is expected to finalize the EPC Contractor for this project by June 2019.

14. Information regarding conservation of energy, technology absorption, foreign exchange earnings and outgo and particulars of employees etc.

Information as required under Section 134 (3) (m) of Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are enclosed in Annexure âEâ forming part of this report.

The Company does not have any employee falling within the purview of Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and hence such Particulars of Employees are not included.

15. Corporate Social Responsibility (CSR)

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. As a part of its initiatives under âCorporate Social Responsibilityâ, the Company has undertaken projects in the areas of education, livelihood, health, water and sanitation. The Annual Report on CSR activities is enclosed as Annexure A. CSR Policy adopted by the Company is placed on the Companyâs website www.gsfclimited.com.

16. Directors

A) Changes in Directors and Key Managerial Personnel

Shri Arvind Agrawal, IAS has been appointed w.e.f. 04.06.2018 as a rotational Director in place of Shri Anil Mukim, IAS, Director of the Company (till 07.03.208).

Shri Raj Gopal, IAS has been appointed w.e.f. 08.08.2018 as a rotational director in place of Shri Sujit Gulati, IAS.

Shri Sujit Gulati, IAS has been appointed as Managing Director of the Company w.e.f. 13.07.2018 (afternoon) vice Shri A M Tiwari, IAS (Managing Director of the Company till 13.07.2018).

Shri Arvind Agarwal shall be liable to retire by rotation at the ensuing Annual General Meeting, has offered himself for re-appointment.

The brief resume of Directors with regard to appointment/ re-appointment at 56^th Annual General Meeting is annexed to the Notice convening the 56^th Annual General Meeting, which forms the integral part of this Annual Report.

B) Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation & Disclosure Requirement) Regulations, 2015 the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of its committees. The manner in which the evaluation has been carried out is explained in the Corporate Governance Report which forms the part of this Annual Report.

C) Appointment and Remuneration Policy

The Board has on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, senior management and their remuneration. The details of Remuneration Policy and its we blink are contained in the Corporate Governance Report.

D) Meetings

During the year, Six Meetings of the Board of Directors and Five meetings of the Audit Committee were held. The composition of Board and Committees along with details of attendance is contained in Corporate Governance Report.

17. Details of establishment of vigil mechanism for Directors and employees

The Company has a Vigil Mechanism Policy in place to deal with instances, if any, of the fraud, mismanagement, misappropriations, if any and the same is placed on the Companyâs website. The details of the policy as well as its we blink are contained in the Corporate Governance Report.

18. Particulars of loans, guarantees or investments under section 186

Particulars of loans given, investments made, guarantee 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.

Your Directors would further like to inform that GSFC is one of the promoters of Bhavnagar Energy Company Limited (BECL) and currently holds 5,92,20,000 equity shares of Rs.10/- each, aggregating Rs.29.31 Crores in BECL, which represents 5.95% of BECLâs total equity share capital.

Energy & Petrochemicals Department (EPD), Government of Gujarat (GoG) in May, 2018, in-principle, approved the proposal of merger of BECL into Gujarat State Electricity Corporation Ltd. (GSECL). GSECL is a wholly owned subsidiary of Gujarat Urja Vikas Nigam Limited (GUVNL). The merger shall be carried out by the State Government (GoG) under the provisions of Gujarat Electricity Industry (Reorganization & Regulation) Act, 2003. By virtue of which, upon issuance of notification by GoG, the Scheme of Merger of BECL with GSECL shall stand approved and the transfer and vesting of the undertaking/s of BECL shall become operative and effective. No further actions shall be required to be taken by BECL or GSECL or any other persons including the promoters of BECL thereafter.

All promoters of BECL have made representation to calculate and fix the share exchange ratio based on the fair valuation approach. The precise financial impact of this merger would be known only after merger ratio is notified by GoG and post-merger valuation of the equity shares of GSECL. The impact of merger shall be appropriately dealt into the books of accounts once it actually gets implemented.

19. Particulars of contracts or arrangements with related parties

All related party transactions that were entered into during the financial year were on an armâs length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with promoters, Directors, key managerial personnel and other designated persons which may have a potential conflict with the interest of the Company at large.

All Related party transactions were placed before the Audit Committee and also the Board of Directors for Approval. Prior omnibus approval of the Audit Committee is obtained and a statement giving details of transactions, if any, shall be placed before the Audit Committee meeting as mandated. The Company has developed a mechanism for identification of related party transactions and the Company is also having the system of monitoring of such transactions.

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto have been disclosed in Annexure D to this report.

20. Managerial Remuneration

Details as required pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are contained in Corporate Governance Report.

21. Risk management policy

The details of such Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Boardâs Report.

22. Directorsâ Responsibility Statement

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, your Directors confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

d. The Directors had prepared the annual accounts on a going concern basis;

f. 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.

23. Auditors

(a) Statutory Auditors

The Board of Directors has on recommendation of the Audit Committee, recommendation of the Audit Committee, recommended for the appointment of M/s. T. R Chadha & Co. LLP, Ahmadabad, Chartered Accountants (Firm Registration No.006711N/N500028) as the Statutory Auditors for the period of two years

i.e. to hold the office from the conclusion of this Annual General Meeting till the conclusion of 57^th Annual General Meeting of the Company to be held in the year 2019.

The Companies Amendment Act, 2017 read with notification S O 1833(E) dated 7^th May, 2018 has deleted the provision requiring annual ratification of the appointment of Auditors. Therefore a resolution relating to the ratification of appointment of Auditors (M/s. T R Chadha & Co., LLP, Ahmadabad, the Statutory Auditors) of the Company, who shall continue to hold office from the conclusion of 56^th Annual General Meeting of the Company till the conclusion of 57^th Annual General Meeting of the Company, has not been included in the notice convening 56^th Annual General Meeting.

(b) Cost Auditors

The Board of Directors of your Company, on the recommendations made by the Audit Committee has approved appointment of M/s A G Dalwadi & Company, Cost Accountants, Ahmadabad (Firm Registration Number 100071) as the Cost Auditors of your Company to conduct the audit of cost records for the Financial Year 2018-19. The remuneration proposed to be paid to the Cost Auditor is placed for your ratification at the ensuing 56^th Annual General Meeting. The Cost Auditors for the F.Y. 2017-18 was filed within stipulated time.

Your Company has appointed M/s Talati & Talati, Chartered Accountants, Vadodara, as Internal Auditors of Baroda & Sikka Unit for Financial Year i.e. 2018-19. M/s K. N. Mehta & Co., Chartered Accountants, Vadodara and M/s Parikh Mehta & Associates, Chartered Accountants, Vadodara have been appointed as Internal Auditors for the Companyâs Fiber and Polymers Units respectively.

(d) Secretarial Auditors & Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Niraj Trivedi, Practicing Company Secretary to undertake the secretarial audit of the Company. The Report of the Secretarial Auditor is enclosed as annexure B.

24. Auditorsâ Report

There are no comments/ observations, reservations or adverse remarks in the Auditors Report and Secretarial Audit Report and hence no clarifications need to be given on their clean report.

25. Extract of the annual return

Extract of Annual Return in Form No. MGT - 9 is enclosed as Annexure C.

26. Human Resources

27. Acknowledgements

For and on behalf of the Board

Sd/-

Place: Fertilizernagar DR. J. N. Singh, IAS

Date : 10/08/2018 Chairman

Mar 31, 2017

DIRECTORS'' REPORT

The Members,

Your Directors have pleasure in presenting their 55^th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2017.

1. Financial highlights of the Company

(Rs. in Crores)

Sr.	Particulars	Standalone		Consolidated
No.		2016-17	2015-16	2016-17	2015-16
1	Gross Sales	5476.88	6326.47	5476.88	6326.47
2	Other Income	56.64	65.75	56.30	65.13
3	Total Revenue	5533.52	6392.22	5533.18	6391.60
4	Less : Operating Expenses	4987.36	5668.02	4987.83	5669.31
5	Operating Profit	546.17	724.21	545.35	722.29
6	Less: Finance Cost	64.93	31.31	64.92	31.31
7	Gross Profit	481.24	692.9	480.43	690.98
6	Less : Depreciation	106.36	100.37	103.62	97.46
9	Exceptional Item	0	0	0	0
10	Profit Before Taxes	374.88	592.53	376.81	593.52
11	Taxation
	- Current Tax	57.35	188.06	57.76	188.43
	- Deferred Tax (net)	13.84	-4.88	15.55	-3.29
	- MAT Credit recognized	(24.30)	0	(24.30)	0
	- Current tax relating to prior years	(91.51)	0	(91.51)	0
12	Profit After Taxes	419.50	409.35	424.46	415.97
13	Other Comprehensive Income arising from
	remeasurement of defined benefit plan	(55.32)	(129.53)	(55.32)	(129.53)
14	Balance brought forward from last year	285.29	380.98	324.11	413.18
15	Amount available for appropriations	649.47	660.80	693.25	699.62
16	Out of which, your Directors have proposed appropriation and transfer as under:
	a) Proposed Dividend on Equity shares	87.66	87.66	87.66	87.66
	b) Tax on Proposed dividend	17.85	17.85	17.85	17.85
	c) General Reserve	300.00	270.00	300.00	270.00
17	Leaving a balance in the Profit & Loss Account	243.96	285.29	287.74	324.11

2. Dividend

Your Directors are happy to recommend a dividend @ 110%, i.e. Rs. 2.20/- per Equity Share (Face value of Rs. 2/- each) on 39, 84, 77,530 shares (Previous Year - 110%, i.e. Rs. 2.20 per share on 39,84,77,530 Equity Shares of Rs.2/- each) for the financial year ended 31st March, 2017. The net outgo on account of Dividend shall be Rs. 105.51 Crores including Corporate Dividend Tax. The Dividend shall be paid to those members, whose names shall appear on the Register of Members of the Company on the Book Closure Date i.e. on 02/ 09/2017.

3. Brief description of the Company''s working during the year/ State of Company''s affair

Your directors wish to report that your Company has achieved turnover of Rs. 5476.88 Crores for the year ended March 31, 2017 as against Rs. 6326.47 Crores (FY 15-16) on standalone basis, which is lower by 13% (Rs.849 Crores) when compared to the previous financial year.

Similarly, for the year under review (FY 2016-17), Profit before Tax (PBT) was Rs. 374.88 Crores and Net Profit (Profit after Tax) was Rs. 419.50 Crores as against PBT of Rs. 592.53 Crores and PAT of Rs. 409.35 Crores for the previous financial year.

4. Material changes and commitments

5. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future

There were no such orders except those which have been appropriately challenged before the judiciary and no impact on going concern status and Company''s operation in future of such matters are expected or visualized at the current stage at which they are.

6. Details in respect of adequacy of internal financial controls with reference to the Financial Statements

7. Details of Subsidiary/Joint Ventures/Associate Companies

During the year under review, Companies listed below are the Subsidiary Company or Associate Companies:

- Subsidiary Company - GSFC Agrotech Limited.

- Associate Companies - Vadodara Enviro Channel Limited

Gujarat Green Revolution Company Limited

- Subsidiary of Subsidiary - Gujarat Arogya Seva Private Limited

There were no new additions/ deletions during the year. A report of the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided as Annexure - A to the Consolidated Financial Statement and hence not repeated here for the sake of brevity. The Company does not have any material subsidiary in terms of Company''s Act, 2013 read with SEBI (Listing Obligation & Disclosure Requirement) Regulations.

8. Listing of Shares & Depositories

The Equity Shares of your Company are listed on the BSE Limited (BSE) and National Stock Exchange of India Ltd. (NSE). As approved by the shareholders, an application for voluntary delisting of Equity Shares from Calcutta Stock Exchange Association Ltd., Kolkatta, was made, however, the approval for delisting is still awaited. The listing fee for the FY 17-18 has been paid to both the Stock Exchanges.

Your Directors wish to state that the Equity Shares of your Company are compulsorily traded in dematerialized form w.e.f. 26/06/2000. Presently, 96.94% of shares are held in electronic/dematerialized form. All shares held by promoters are in dematerialized form.

9. Report on Corporate Governance And Management Discussion And Analysis Report To Shareholders

Your Company has complied with all the mandatory requirements of Corporate Governance norms as mandated by SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. A separate report on Corporate Governance together with the Certificate of Samdani Kabra & Associates, Company Secretaries, Vadodara forms part of this Annual Report. The Management Discussion & Analysis report also forms part of this Annual Report.

10. Business Responsibility Reporting

Business Responsibility Report is annxed as Annexure ''F'' to this Annual Report as required under Regulation 34(2) (f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

11. Fixed Deposits

During the year 2016-17, your Company has not accepted/ renewed any Fixed Deposit. Your Directors wish to report that there are 11 Fixed Deposits aggregating Rs. 0.87 Lacs which have remained unclaimed by Depositors, as on 31^st March, 2017. Letters reminding them to seek repayment have been sent. Upto and including the date of this report there are no deposits which were claimed and not repaid during the year.

During the year, the Company has transferred a sum of Rs. 4.13 Lacs being the unclaimed deposits and interest amount thereon to the Investors'' Education and Protection Fund (IEPF) as required in terms of Section 125 of the Companies Act, 2013. The Company has discontinued accepting new deposits since 15.11.2005, and renewing the deposits since 31.03.2009.

12. Insurance

13. Expansion & Diversification

Your Directors are happy to inform you that 40,000 MTPA Melamine Plant project based on technology supplied by M/s Casale, Switzerland is making good progress. Your Company has awarded the contract for the Melamine Project on EPC basis to L & T Hydrocarbon Engineering Ltd. on 30/03/2016. The new plant will be operational in the third quarter of the year 2018-19.

Your Directors are happy to inform that installation of 2 Nos. 10000 capacity Phosphoric Acid Tanks at Sikka Shore Terminal, Jamnagar on lump sum turnkey basis (LSTK) are duly commissioned and lined up in February 2017 as per planned schedule.

Your Company has set up Associated Additional Facility related to DAP-NPK Plant at Sikka, Dist Jamnagar (SU) for which TKIS (ThyssenKrupp-Germany) is hired to provide engineering services. Your Company has successfully commissioned Bagging ''B'' facility along with new bulk silo and 2 Nos. sub stations on 27/03/ 2017. Rest of the facilities of Bagging ''C'' and Bagging ''A'' will be completed by September 2017.

Your Directors are happy to inform that the project for enhancing the production capacity of Nylon-6 by 15000 MTPA at Vadodara Unit based on technology supplied by M/s Lurgi, Germany (Now Technip Zimmer) and detailed engineering by M/s TATA Consultancy Engineers Ltd; India was commissioned in July 2016.

After addressing initial teething problems, the plant is now in the process of stabilization for quality and quantity. In order to enhance market of value added Nylon-6 chips, the Company has taken up installation of Dry Blending Unit (DBU) concurrently in Nylon-6 project to produce superior quality Nylon-6 chips for taking care of application and marketing based on the technology supplied by M/s PE Polymer Engineering Plant Construction GmbH, Germany (PEPC). DBU is under construction phase and is expected to be commissioned by end of 2^nd quarter or beginning of 3^rd quarter of 2017-18. The delay of the project is attributed to weak financial condition of PEPC. Your Company is taking all steps to complete this project.

Your Directors are happy to inform that the Company has also awarded contract for Caprolactam Quality improvement project to M/s Simon India Ltd. on EPC basis. The project is expected to be commissioned by third quarter of 2017-18. This project will improve the quality of Caprolactam produced at Caprolactam-I Plant.

Your Directors also would like to inform that Water Soluble Fertilizer (WSF) Project of 20000 MTPA capacity at Vadodara Unit got commissioned in September 2016 successfully with in-house efforts despite of backing out by the detailed engineering consultant M/s Hindustan Dorr-Oliver Ltd.

-Projects under development

- Revamping of Urea Plants For Energy Reduction:

Your Directors are pleased to inform you that your Company is contemplating to revamp its Urea plants for reducing the energy consumption so as to achieve the revised energy norms of 6.2 Gcal / MT as per new Urea policy and improving the plant reliability. As per the technical feasibility study carried out by process licensors, estimated reduction in natural gas consumption will be to the tune of 28 MMSCM per year.

Your Directors also would like to inform that your Company is in advance stage of discussions with Process Licensors for implementation of the Project on EPC basis. Based on financial viability, further decision for implementation of the Project will be taken by September 2017. Estimated Project completion time is 28 months after signing of Contract.

- 1 MW and 10 MW Solar Power Plants:

In line with Government of India''s initiatives for use of renewable energy, Company is in process of setting up 1 MW roof top Solar Power Project at its existing Vadodara complex and 10 MW Solar Power Plant at Gujarat Solar park, Charanka for which land has been allotted. Estimated Power generated will be 45 MWH per day based on Capacity utilisation factor of 17 %.

Bid evaluation process for 1MW and 10 MW Solar Power plants is under progress. Based on financial viability of the Project, final decision for 1 MW and 10MW Solar Power Plants is underway. Estimated Project completion time is 6 months after signing of the Contract.

- 1000 MTPD Phosphoric Acid and 3000 MTPD Sulphuric Acid Plant at Sikka Unit:

As a part of backward integration, your Company is contemplating to install 1000 MTPD Phosphoric Acid and 3000 MTPD Sulphuric Acid Plant on EPC basis at its Sikka Unit. This will reduce the import dependency for sustaining the plant operation on continuous basis for production of Phosphatic Fertilizers at Sikka Unit.

Your Directors also would like to inform that your Company is in the process of discussions with Phosphoric Acid Process Licensors for supply of Plant on EPC basis. Memorandum of Understanding (MoU) will be executed with rock phosphate suppliers soon to ensure availability of rock phosphate on long term basis. Consultant for obtaining Environmental clearance will be selected shortly. For Sulphuric acid, possibilities are being explored for production of Sulphuric acid from molten sulphur or direct purchase of Sulphuric acid produced from smelter. Company is in process of discussions with respective suppliers and final decision will be taken based on long term availability and financial viability.

- Changeover of drive from steam turbine to electric motor for Main air Blower (CR-0501) in Sulphuric Acid Plant :

Your Directors are pleased to inform that in Sulphuric Acid-IV plant, the main air blower (CR-0501) is presently steam turbine driven. Based on steam and power economics, it is contemplated to change the drive from steam to electric motor. The estimated saving after implementation of proposal will be approximately Rs. 10 Crores per year.

Considering major modifications required in electrical system, Company has engaged a renowned consultant for carrying out feasibility study which will be completed by August 2017. Based on feasibility study report further decision for implementation of the proposal will be taken.

- Ammonia -Urea Complex in Republic of Congo (RoC) :

For further assessment, Detail Project Report (DPR) will be carried out and further decision to move ahead with the Project will be taken by December 2017 based on DPR and other factors.

- Methyl Methacrylate (MMA) Plant at Dahej:

Your Directors also would like to inform that your Company is contemplating to install 50,000 MTPS MMA plant at Dahej for which land acquisition has been completed. Company is in the process of technology selection and discussion with OPaL for supply of major raw material C4 Raffinate.

Based on raw material availability and financial viability further decision for the Project will be taken.

- Conversion of Methanol Plant for Production of Synthesis Gas / Ammonia.

Your Directors are pleased to further inform that to meet the future Ammonia requirements of the complex & to maintain present Ammonia sales after commissioning of Melamine-III plant, your Company is contemplating to convert its Methanol plant for production of Synthesis Gas / Ammonia by utilising existing equipment of Methanol plant. M/s Haldor Topsoe the technology supplier for Methanol will carry out the feasibility study for conversion of Methanol plant for production of Synthesis Gas / Ammonia. Feasibility study will be completed in November 2017 & based on feasibility study report further decision for implementation of proposal will be taken.

14. Information regarding conservation of energy, technology absorption, foreign exchange earnings and outgo and particulars of employees etc.

Information as required under Section 134 (3) (m) of Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are enclosed in Annexure âEâ forming part of this report.

The Company does not have any employee falling within the purview of Section 197 (12) of the Companies Act,

2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,

2014 and hence such Particulars of Employees are not included.

15. Corporate Social Responsibility (CSR)

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. As a part of its initiatives under âCorporate Social Responsibilityâ, the Company has undertaken projects in the areas of education, livelihood, health, water and sanitation. The Annual Report on CSR activities is annexed as Annexure A. CSR Policy adopted by the Company is placed on the Company''s website www.gsfclimited.com.

16. Directors

A) Changes in Directors and Key Managerial Personnel

Dr. J. N. Singh, IAS Chief Secretary to Govt. of Gujarat has been appointed w.e.f. 31.08.2016 as the Government of Gujarat Nominee Director & Chairman of the Company vice Shri G. R. Aloria, consequent upon his retirement from the services of the Govt. of Gujarat.

Dr. J. N. Singh, IAS was the Additional Chief Secretary to the Government of Gujarat and was also Director of the Company for the period from 25.11.2014 to 31.08.2016.

Shri Sujit Gulati, IAS has been appointed w.e.f. 25.07.2016 as a rotational Director in place of Shri L Chuaungo, IAS, Director of the Company (till 25.07.2016) & Shri Anil Mukim, IAS has been appointed w.e.f. 24.10.2016 vice Dr. J N Singh (who was then nominated as Addl. Chief Secretary, Finance Dept. to Govt. of Gujarat). Shri Anil Mukim, IAS shall be liable to retire by rotation at the ensuing Annual General Meeting, has offered himself for re-appointment.

The brief resume of Directors with regard to appointment/ re-appointment at 55^th Annual General Meeting is annexed to the Notice convening the 55^th Annual General Meeting, which forms the integral part of this Annual Report.

B) Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation & Disclosure Requirement) Regulations, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of its committees. The manner in which the evaluation has been carried out is explained in the Corporate Governance Report which forms the part of this Annual Report.

C) Appointment and Remuneration Policy

The Board on the recommendation of the Nomination and Remuneration Committee, has framed a policy for selection and appointment of Directors, senior management and their remuneration. The details of Remuneration Policy and its we blink are contained in the Corporate Governance Report.

D) Meetings

During the year, Five Meetings of the Board of Directors and Five meetings of the Audit Committee were held. The composition of Board and Committees along with details of attendance is contained in Corporate Governance Report.

17. Details of establishment of vigil mechanism for Directors and employees

The Company has a Vigil Mechanism Policy in place to deal with instances, if any, of the fraud, mismanagement, misappropriations, if any and the same is placed on the Company''s website. The details of the policy as well as its web blink are contained in the Corporate Governance Report.

18. Particulars of loans, guarantees or investments under section 186

19. Particulars of contracts or arrangements with related parties

All related party transactions that were entered into during the financial year 2016-17 were on an arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with promoters, Directors, key managerial personnel and other designated persons which may have a potential conflict with the interest of the Company at large.

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto have been disclosed in Annexure D to this report.

20. Managerial Remuneration:

Details as required pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are contained in Corporate Governance Report.

21. Risk management policy

The details of such Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board''s Report.

22. Directors'' Responsibility Statement:

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, your Directors confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

d. The Directors had prepared the annual accounts on a going concern basis;

f. 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.

23. Auditors:

(a) Statutory Auditors

M/s Deloitte Haskins & Sells, Chartered Accountants, Vadodara shall retire at the conclusion of 55th annual general meeting of the company. Pursuant to the provisions of Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014. The board put on record its appreciation for the valuable services provided by the retiring auditors to the shareholders during their association with the Company.

The Board of Directors has, on recommendation of the Audit Committee, recommended for the appointment of M/s. T R Chadha & Co., LLP, Ahmadabad, Chartered Accountants (Firm Registration No. 006711N/ N500028) as the statutory auditors for the period of two years, i.e. to hold the office from the conclusion of this annual general meeting till the conclusion of 57^th Annual General Meeting of the Company to be held in the year 2019.

(b) Cost Auditors:

The Board of Directors of your Company, on the recommendations made by the Audit Committee has approved appointment of M/s A G Dalwadi & Company, Cost Accountants, Ahmadabad (Firm Registration Number 100071) as the Cost Auditors of your Company to conduct the audit of cost records for the Financial Year 2017-18. The remuneration proposed to be paid to the Cost Auditor is placed for your ratification at the ensuing 55^th Annual General Meeting. The Cost Audit Report for the F.Y. 2015-16 was filed within stipulated time.

Your Company has appointed M/s Talati & Talati, Chartered Accountants, Vadodara, as Internal Auditors of Baroda & Sikka Unit for Financial Year i.e. 2017-18. M/s K. N. Mehta & Co., Chartered Accountants, Vadodara and M/s Parikh Mehta & Associates, Chartered Accountants, Vadodara have been appointed as Internal Auditors for the Company''s Fiber and Polymers Units respectively.

(d) Secretarial Auditors & Secretarial Audit Report:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Niraj Trivedi, Practicing Company Secretary to undertake the secretarial audit of the Company. The Secretarial Audit Report for FY 2016-17 is enclosed as annexure B.

24. AUDITORS'' REPORT

There are no comments/ observations, reservations or adverse remarks in the Auditors Report and Secretarial Audit Report and hence no clarifications need to be given on their clean report.

25. Extract of the annual return:

The extract of the annual return in Form No. MGT - 9 is annexed herewith as Annexure C.

26. Human Resources

27. Acknowledgements

For and on behalf of the Board

Sd/-

Place: Fertilizernagar DR. J. N. Singh, IAS

Date : 25.07.2017 Chairman

Mar 31, 2016

The Directors have pleasure in presenting their 54th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2016.

1. Financial highlights of the Company

(Rs. in Crores)

Sr. Particulars Standalone Consolidated No. 2015-16 2014-15 2015-16 2014-15

1 Gross Sales 6378.76 5576.19 6378.76 5576.19

Less : Excise Duty Recovered 215.44 251.62 215.43 251.62

Net Sales 6163.33 5324.57 6163.33 5324.57

2 Other Income 64.83 101.93 64.21 101.19

3 Total Revenue 6228.16 5426.50 6227.54 5425.76

4 Less : Operating Expenses 5550.14 4733.92 5548.49 4732.36

5 Operating Profit 678.02 692.58 679.05 693.40

6 Less : Finance Cost 30.21 18.01 30.21 18.01

7 Gross Profit 647.81 674.57 648.84 675.40

8 Less : Depreciation 100.69 100.66 100.72 100.68

9 Exceptional Item 0.00 0.00 0.00 0.00

10 Profit before taxes 547.13 573.91 548.12 574.72

11 Taxation

- Current Tax 188.06 158.92 188.43 159.31

- Deferred Tax (net) (20.28) 14.48 (20.16) 14.49

12 Profit after taxes 379.35 400.51 379.85 400.92

13 Balance brought forward from last year 321.83 286.83 363.00 319.02

14 Amount available for appropriations 701.18 687.34 750.43 728.51

15 Out of which, your Directors have proposed appropriation and transfer as under :

a) Proposed Dividend on Equity shares 87.66 87.66 87.66 87.66

b) Tax on Proposed Dividend 17.85 17.85 17.85 17.85

c) General Reserve 270.00 260.00 270.00 260.00

16 Leaving a balance in the Profit & Loss Account 325.67 321.83 374.92 363.00

2. Dividend

Your Directors are happy to recommend a dividend @ 110%, i.e. Rs. 2.20/- per Equity Share (Face value of Rs. 2/- each) on 39, 84,77,530 shares (Previous Year - 110%, i.e. Rs. 2.20 per share on 39,84,77,530 Equity Shares of Rs.2/- each) for the Financial Year ended 31st March, 2016. The net outgo on account of Dividend shall be Rs. 105.51 Crores including Corporate Dividend Tax. The Dividend shall be paid to those members, whose names shall appear on the Register of Members of the Company on the Book Closure Date i.e. on 3rd September, 2016.

3. Brief description of the Company''s working during the Year/ State of Company''s affair

Your directors wish to report that your Company has achieved turnover of Rs.6163 Crores for the year ended March 31, 2016 as against Rs. 5325 Crores (FY 14-15) on standalone basis, at a growth rate of 15.74% (Rs.838 Crores) when compared to the previous Financial Year.

Similarly, for the FY 2015-16, Profit before Tax (PBT) was Rs. 547.13 Crores and Net Profit (Profit after Tax) was Rs. 379.35 Crores as against PBT of Rs. 573.91 Crores and PAT of Rs. 400.51 Crores for the previous Financial Year.

4. Material changes and commitments

The Company has not made any material changes or commitments which affect the financial position of the company between the end of the Financial Year of the company to which the Financial Statements relate and the date of signing of this report.

5. Details of 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 such orders except those which have been appropriately challenged before the judiciary and no impact on going concern status and company''s operation in future of such matters are expected or visualised at the current stage at which they are.

6. Details in respect of adequacy of internal financial controls with reference to the Financial Statements

The Company has an internal Control System, commensurate with the size, scale and complexity of its operation. The Scope and authority of the internal audit functions lies with the Audit Committee. The Audit Committee monitors and evaluates the efficacy and adequacy of internal control systems, accounting procedures and policies. Based on the report of internal auditors, significant audit observations and actions taken on such observations are presented to the audit committee of the Board.

7. Details of Subsidiary/Joint Ventures/Associate Companies

During the year under review, companies listed below are Company''s Subsidiary Company or Associate Company.

Subsidiary Company - GSFC Agrotech Limited.

Associate Companies -Vadodara Enviro Channel Limited Gujarat Green Revolution Company Limited

There were no new additions/ deletions during the year. A report of the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided as annexure A to the consolidated financial statement and hence not repeated here for the sake of brevity. The Company does not have any material subsidiary in terms of Company''s Act, 2013 read with Listing Agreement.

8. Listing of Shares & Depositories

The Equity Shares of your Company are listed on the BSE Limited (BSE) and National Stock Exchange of India Ltd. (NSE). As approved by the shareholders, an application for voluntary delisting of Equity Shares from Calcutta Stock Exchange Association Ltd., Kolkatta, was made, however, the approval for delisting is still awaited. The listing fees for the FY 16-17 has been paid to both the stock exchanges

Your Directors wish to state that the Equity Shares of your Company are compulsorily traded in dematerialized form w.e.f. 26/06/2000. Presently, 96.87% of shares are held in electronic/dematerialized form.

9. Report on Corporate Governance And Management Discussion And Analysis Report To Shareholders

Your Company has complied with all the mandatory requirements of Corporate Governance norms as mandated by SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. A separate report on Corporate Governance together with the Certificate of M/s. S. Samdani & Associates, Company Secretaries, Vadodara forms part of this Annual Report. The Management Discussion & Analysis report also forms part of this Annual Report.

10. Fixed Deposits

During the year 2015-16, your Company has not accepted/ renewed any Fixed Deposit. Your Directors wish to report that there are 19 Fixed Deposits aggregating Rs. 1.92 Lakhs which have remained unclaimed by Depositors, as on 31st March, 2016. Letters reminding them to seek repayment have been sent. Upto and including the date of this report, 13 deposits amounting to Rs. 1.29 Lakhs have been repaid.

During the year, the Company has transferred a sum of Rs. 8.12 Lakhs being the unclaimed deposits and interest amount thereon to the Investors'' Education and Protection Fund (IEPF) as required in terms of Section 125 of the Companies Act, 2013. The Company has discontinued accepting new deposits since 15.11.2005, and renewing the deposits since 31.03.2009.

11. Insurance

All the properties and insurable interests of the Company, including the buildings, plant & machinery and stocks have been adequately insured. Also, as required under the Public Liability Insurance Act, 1991, your Company has taken the appropriate insurance cover.

12. Expansion & Diversification

Your Directors are happy to inform that the project for enhancing production capacity of Nylon-6 chips by 15,000 MTPA at Vadodara Unit, based on the technology supplied by M/s Lurgi, Germany and detail engineering by M/ sTata Consulting Engineers Ltd., India has reached the stage of commissioning and its Guarantee Test Run at full capacity is expected by end August, 2016. In order to enhance the marketability and profitability of Nylon-6 chips, the company has taken up installation of Dry Blending Unit (DBU) concurrently in the Nylon-6 Project to produce lubricated and nucleated grades of Nylon-6 chips for Film grade application based on technology supplied by M/s Polymer Engineering GmbH-Germany. DBU is under construction phase and is expected to be commissioned by 3rd quarter of FY 2016-17.

Your Directors further wish to inform that the Water Soluble Fertilizer (WSF) Project of 20,000 MTPA capacity at Vadodara Unit had a tie-up for project execution with M/s. Hindustan Dorr-Oliver (HDO). Due to financial constraints of HDO, GSFC was compelled to take upon itself the completion of the plant in mid June, 2016 and the same is expected to be commissioned shortly.

Your Directors also wish to inform that the contract with M/s HDO for setting up of the 4th train (D Train) with approx. 5 Lakh MTPA of DAP / NPK Fertilizers at Sikka Unit, Dist. Jamnagar (SU) was terminated in April, 2016 due to extremely poor performance of the party and the Company is currently considering various options including revival of its execution by another competent party.

Your Company is also setting up Associated Additional Facilities related to DAP/NPK plant at Sikka Unit, Dist. Jamnagar (SU) for which M/s. TKIS (UIPL) is hired to provide engineering services. Implementation of these facilities will provide flexibility to produce 3 different grade of NPK fertilizers concurrently which will help in enhancing the sales of the Company. This project is slated to be commissioned by first quarter of 2017-18. Your Directors are happy to inform that the 40,000 MTPA Melamine Project at Vadodara Unit based on technology supplied by M/s Casale of Switzerland has reached the detail engineering & construction stage. Your Company has awarded the contract for execution of this project on EPC basis to M/s L&T Hydrocarbon Engineering on 30th March, 2016 and it is expected that this new plant will be operational in the second quarter of 2018-19.

Your Directors are happy to inform that the Company has also awarded the job for installation of two numbers of 10,000 MT capacity Phosphoric Acid Tanks at Sikka Shore Terminal on Lump Sum Turn Key (LSTK) basis to M/ s Simon India Limited and the Project is planned to be completed by fourth quarter of 2016-17.

Your Directors are happy to inform that the Company has also awarded Caprolactam Quality improvement Project to M/s Simon India Limited on EPC basis and the Project is planned to be completed by fourth quarter of 2016-17. This will improve the quality of Caprolactam produced at Caprolactam- I plant.

Your Directors are pleased to inform that the Company has ambitious plans of setting up a large capacity Fertilizers & Petrochemicals Complex at Dahej for which Land acquisition and its development have already been completed. Your Company is presently in the process of technology selection for various projects like - Caprolactam, Methyl Methacrylate etc. along with the feasibility of each project.

Your Directors would also like to inform that the Company is evaluating the proposal for setting up of Ammonia - Urea Fertilizer Complex at Chabbar in Iran as a consortium partner with RCF, in line with the initiative taken by Government of India.

In order to make your Company more competitive in current market scenario, it has taken preliminary feasibility study for various projects like establishing an Ammonia-Urea Complex in Republic of Congo (RoC) which is being supported by Govt. of RoC, a Sulphuric Acid & Phosphoric Acid complex at its Sikka unit for increasing availability of key raw materials, enhancing the port infrastructure at Sikka Jetty for handling solid and liquid cargos, debottlenecking of key operating plants like Ammonia-III & IV for enhancing capacity, Urea revamping for energy saving etc.

13. Information regarding conservation of energy, technology absorption, foreign exchange earnings and outgo and particulars of employees etc.

Information as required under Section 134 (3) (m) of Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are enclosed in Annexure E forming part of this report.

The Company does not have any employee falling within the purview of Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and hence such Particulars of Employees are not included.

14. Corporate Social Responsibility (CSR)

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. As a part of its initiatives under "Corporate Social Responsibility", the Company has undertaken projects in the areas of education, livelihood, health, water and sanitation. The Annual Report on CSR activities is annexed as Annexure A. CSR Policy adopted by the company is placed on the company''s website www.gsfclimited.com.

15. Directors

A) Changes in Directors and Key Managerial Personnel Managing Director - Executive Director

During the year, Shri A.M. Tiwari, IAS has been nominated as Managing Director of the Company w.e.f. 01.02.2016 in place of Dr. S. K. Nanda, IAS, Chairman and Managing Director till 31.01.2016. Accordingly, resolution relating to his appointment and terms & conditions relating to his appointment are included in the notice convening the 54th Annual General Meeting and is recommended for your approval.

Shri G. R. Aloria has been nominated as Chairman w.e.f. 03.05.2016 in place of Dr. S. K. Nanda, IAS (Retd.).

Shri L Chuaungo, IAS has been appointed w.e.f. 08.04.2015 as a rotational director. Consequent upon his transfer from Energy & Petrochemicals Department of Government of Gujarat, he has tendered his resignation on 27.06.2016 and hence ceased to be the Director of the Company. Shri Sujit Gulati, IAS has been appointed w.e.f. 25.07.2016 as a rotational director in place of Shri L Chuaungo. Shri Sujit Gulati shall be liable to retire by rotation at the ensuing Annual General Meeting, has offered himself for re-appointment.

The brief resume of Directors with regard to appointment/ re-appointment at 54th Annual General Meeting is annexed to the Notice convening the 54th Annual General Meeting, which forms the integral part of this Annual Report.

Pursuant to the provisions of Section 149 of the Companies Act, 2013 read with Schedule IV, all the Independent Directors have submitted their declaration of independence and the same has been taken on record by the Board of Directors.

B) Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of its committees. The manner in which the evaluation has been carried out is explained in the Corporate Governance Report which forms the part of this Annual Report.

C) Appointment and Remuneration Policy

The Board has on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of directors, senior management and their remuneration. The details of Remuneration Policy and its weblink are contained in the Corporate Governance Report.

D) Meetings

During the year, Seven Meetings of the Board of Directors and Five meetings of the Audit Committee were held. The composition of Board and Committees along with details of attendance is contained in Corporate Governance Report.

16. Details of establishment of vigil mechanism for directors and employees

The Company has a Vigil Mechanism Policy in place to deal with instances, if any, of the fraud, mismanagement, misappropriations, if any and the same is placed on the Company''s website. The details of the policy as well as its weblink are contained in the Corporate Governance Report.

17. Particulars of loans, guarantees or investments under section 186

Particulars of loans given, investments made, guarantee 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. (Please refer to note 12,13,14 to the standalone financial statement).

18. Particulars of contracts or arrangements with related parties

All related party transactions that were entered into during the Financial Year were on an arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the company with promoters, directors, key managerial personnel and other designated persons which may have a potential conflict with the interest of the Company at large.

All Related party transactions were placed before the Audit Committee and also the Board of Directors for Approval. Prior omnibus approval of the Audit Committee is obtained and a statement giving details of transactions, if any, shall be placed before the Audit Committee meeting as mandated. The Company has developed a mechanism for identification of related party transactions and the company is also having the system of monitoring of such transactions.

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto have been disclosed in annexure D to this report.

19. Managerial Remuneration

Details as required pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are contained in Corporate Governance Report.

20. Risk management policy

The details of such Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board''s Report.

21. Directors'' Responsibility Statement

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, your Directors confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. 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 and loss of the company for that period;

c. 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;

d. The directors had prepared the annual accounts on a going concern basis;

e. The directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f. 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.

22. Auditors

(a) Statutory Auditors

M/s Deloitte Haskins & Sells, Chartered Accountants, Vadodara were appointed as Statutory Auditors of the Company for a term of three consecutive years i.e. from 2014-15 to 2016-17. In terms of the fist proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. The Company has received a letter from M/s Deloitte Haskins & Sells, Chartered Accountants, Vadodara (Firm Registration No. 117364W) to the effect that their re-appointment, if made, would be in accordance with the conditions prescribed under section 139 (2) of the Companies Act, 2013 and they are not disqualified for such re-appointment within the meaning of Section 141 of the said Act. Your Directors recommend the ratification of Resolution for re-appointment and fixation of remuneration to the Statutory Auditors for the F.Y. 2016-17.

(b) Cost Auditors:

In terms of the Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost accounting records and get them audited every year.

The Board of Directors of your Company, on the recommendations made by the Audit Committee has approved appointment of M/s A G Dalwadi & Company, Cost Accountants, Ahmedabad (Firm Registration Number 100071) as the Cost Auditors of your Company to conduct the audit of cost records for the Financial Year 2016-17. The remuneration proposed to be paid to the Cost Auditor is placed for your ratification at the ensuing 54th Annual General Meeting. The Cost Auditors for the F.Y. 2014-15 was filed within stipulated time.

(c) Internal Auditors:

Your Company has appointed M/s K. C. Mehta & Co., Chartered Accountants, Vadodara, as Internal Auditors for carrying out the Internal Audit of Baroda Unit & Sikka Unit for F.Y. 2016-17. M/s K. N. Mehta & Co., Chartered Accountants, Vadodara and M/s Parikh Mehta & Associates, Chartered Accountants, Vadodara have been appointed as Internal Auditors for the Company''s Fibre and Polymers Units respectively.

(d) Secretarial Auditors & Secretarial Audit Report:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Niraj Trivedi, Practicing Company Secretary to undertake the secretarial audit of the Company. The Report of the Secretarial Auditor is enclosed as annexure B.

23. Auditors'' Report

There are no comments/ observations from the Auditors and hence no clarifications need to be given on their clean report.

24. Extract of the annual return

The extract of the annual return in Form No. MGT - 9 is annexed herewith as Annexure C.

25. Human Resources

Your directors are happy to acknowledge that the well positioned human resource of the Company have been key drivers in implementing ideas, polices, cultural and behavioral aspects of the organization and ultimately with their outstanding performance has helped the Company to realize its objectives. Your Directors are happy to place on record their appreciation for highly potential, consistent and ethical employees for their remarkable contribution to the Company.

26. Acknowledgements

Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from the Government of Gujarat, Government of India, Bank of Baroda and other Banks and agencies. Your Directors also wish to express their gratitude to the investors for their continued support and faith reposed in the Company.

For and on behalf of the Board

Sd/-

Place: Fertilizernagar G. R. Aloria, IAS

Date : 27.07.2016 Chairman

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their 53rd Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2015.

1. Financial highlights of the Company (Standalone)

(Rs. in Crores)

Sr. Particulars 2014-15 2013-14 No.

1 Gross Sales 5576.19 5697.97 Less : Excise Duty Recovered 251.62 285.48

Net Sales 5324.57 5412.49

2 Other Income 101.93 124.54

3 Total Revenue 5426.50 5537.03

4 Less : Operating Expenses 4733.92 4851.16

5 Operating Profit 692.58 685.87

6 Less : Finance Cost 18.01 45.14

7 Gross Profit 674.57 640.73

8 Less : Depreciation 100.66 145.32

9 Exceptional Item 0.00 0.00

10 Profit before taxes 573.91 495.41

11 Taxation

- Current Tax 158.92 130.75

- Deferred Tax (net) 14.48 22.49

12 Profit after taxes 400.51 342.17

13 Balance brought forward from last year 286.83 287.90

14 Amount available for appropriations 687.34 630.07

15 Out of which, your Directors have proposed appropriation and transfer as under :

a) Proposed Dividend on Equity shares 87.66 79.70

b) Tax on Proposed Dividend 17.85 13.54

c) General Reserve 260.00 250.00

16 Leaving a balance in the Profit & Loss Account 321.83 286.83

2. Dividend

Your Directors are happy to recommend a dividend @ 110%, i.e. Rs. 2.20/- per Equity Share (Face value of Rs. 2/- each) on 39, 84,77,530 shares (Previous Year - 100%, i.e. Rs. 2 per share on 39,84,77,530 Equity Shares of Rs.2/- each) for the Financial Year ended 31st March, 2015. The net outgo on account of Dividend shall be Rs. 105.51 Crores including Corporate Dividend Tax. The Dividend shall be paid to those members, whose names shall appear on the Register of Members of the Company on the Book Closure Date i.e. on 02/09/2015.

3. Brief description of the Company''s working during the year/State of Company''s affair

Your directors wish to report that your Company has achieved the turnover of Rs.5325 Crores for the year ended March 31, 2015 as against Rs. 5412 Crores (FY 13-14) down by 87 Crores (2%) when compared to the previous Financial Year.

Similarly, for the FY 2014-15, Profit before Tax (PBT) was Rs.573.91 Crores and Net Profit (Profit after Tax) was Rs.400.51 Crores as against PBT of Rs.495.41 Crores and PAT of Rs.342.17 Crores for the previous Financial Year.

4. Material changes and commitments

The Company has not made any material changes or commitments which affect the financial position of the company between the end of the Financial Year of the company to which the financial statements relate and the date of signing of this report.

5. Details of 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 such orders except those which have been appropriately challenged before the judiciary and no impact on going concern status and company''s operation in future of such matters are expected or visualised at the current stage at which they are.

6. Details in respect of adequacy of internal financial controls with reference to the Financial Statements

The Company has an internal Control System, commensurate with the size, scale and complexity of its operation. The Scope and authority of the internal audit functions lies with the Audit Committee. The Audit Committee monitors and evaluates the efficacy and adequacy of internal control systems, accounting procedures and policies. Based on the report of internal auditors, significant audit observations and actions taken on such observations are presented to the audit committee of the Board.

7. Details of Subsidiary/Joint Ventures/Associate Companies

During the year under review, companies listed below are Company''s Subsidiary Company or Associate Company.

Subsidiary Company - GSFC Agrotech Limited.

Associate Companies - Vadodara Enviro Channel Limited

Gujarat Green Revolution Company Limited

There were no new additions/ deletions during the year. A report of the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided as annexure A to the consolidated financial statement and hence not repeated here for the sake of brevity. The Company does not have any material subsidiary in terms of Company''s Act, 2013 read with Listing Agreement.

8. Listing of Shares & Depositories

The Equity Shares of your Company are listed on the BSE Limited (BSE) and National Stock Exchange of India Ltd. (NSE). As approved by the shareholders, an application for voluntary delisting of Equity Shares from Calcutta Stock Exchange Association Ltd., Kolkatta, was made, however, the approval for delisting is still awaited. The listing fees for the FY 15-16 has been paid to both the stock exchanges

Your Directors wish to state that the Equity Shares of your Company are compulsorily traded in dematerialized form w.e.f. 26/ 06/2000. Presently, 96.78% of shares are held in electronic/dematerialized form.

9. Report on Corporate Governance And Management Discussion And Analysis Report To Shareholders

Your Company has complied with all the mandatory requirements of Corporate Governance norms as mandated by Clause 49 of the Listing Agreement with Stock Exchanges. A separate report on Corporate Governance together with the Certificate of M/s. S. Samdani & Associates, Company Secretaries, Vadodara forms part of this Annual Report. The Management Discussion & Analysis report also forms part of this Annual Report.

10. Fixed Deposits

During the year 2014-15, your Company has not accepted/ renewed any Fixed Deposit. Your Directors wish to report that there are 49 Fixed Deposits aggregating Rs. 5.36 Lacs which have remained unclaimed by Depositors, as on 31st March, 2015. Letters reminding them to seek repayment have been sent. Upto and including the date of this report, 10 deposits amounting to Rs. 1.23 Lacs have been repaid.

During the year, the Company has transferred a sum of Rs. 20.98 Lacs being the unclaimed deposits and interest amount thereon to the Investors'' Education and Protection Fund (IEPF) as required in terms of Section 125 of the Companies Act, 2013. The Company has discontinued accepting new deposits since 15.11.2005, and renewing the deposits since 31.03.2009.

11. Insurance

All the properties and insurable interests of the Company, including the buildings, plant & machinery and stocks have been adequately insured. Also, as required under the Public Liability Insurance Act, 1991, your Company has taken the appropriate insurance cover.

12. Projects under Clean Development Mechanism (CDM)

The Directors are happy to inform that Wind Mill Projects of 10 MW, 12 MW, 18 MW & 33 MW are already registered under CDM and for 50.4 MW Wind Mill Project registration process is being finalised for availing Carbon Credit. Company has also taken up the steps for getting the revenue against Carbon Credit for the registered projects.

13. Expansion & Diversification

Your company had been conscious of the development of Green technology and has translated this into reality by setting up total 152.8 MW Wind Mill Power Projects in the Saurashtra & Kutch Region. These windmills are performing satisfactorily and are helpful in partly meeting Company''s captive power requirement. The surplus power so generated is being sold to the State Grid as per contractual arrangements.

Your Directors also wish to inform that for additional 15,000 MTPA Nylon-6 capacity (Engineering Plastic) at Vadodara unit, the technology tie-up has been made with M/s. Lurgi, Germany and M/s.Tata Consulting Engineers Ltd. are hired for Detail Engineering work. The project execution is in advance stage and the project is likely to go in to main stream during the second quarter of F.Y. 2015-16.

Your Directors also wish to inform that for 20,000 MTPA Water Soluble Fertilizer (WSF) Project at Vadodara unit, for which the tie-up for project execution has been made with M/s.Hindustan Dorr-Oliver. The project execution is under execution and is likely to go into production during the second quarter of F.Y. 2015-16.

Your Directors are also happy to inform that the Company in its pursuit of capacity addition, is setting up 4th train (D Train) with about 5 Lakh MTPA of DAP/NPK Fertilizers at Sikka Unit, Dist. Jamnagar and for this the process license is from M/s Espendisa, Spain. The technological tie-up and project implementation has been made through M/s. Hindustan Dorr-Oliver.

The total plant production capacity with this capacity addition shall now be to the tune of 1.4 MTPY. The total cost of the DAP/ NPK Plant with Associated Additional Facilities is approximately Rs. 900 Crores. The new plant is expected to be put in operation by third quarter of FY 2016-17. This project will have the benefit of reduction of DAP imports and would enable your Company to produce different grades of NPK fertilizers.

Your Company is also setting up of Associated Additional Facilities related to DAP/NPK plant at Sikka Unit (SU) near Jamnagar and for this M/s. TKIS (UIPL) has been hired to provide engineering services for. EIA approval for the project has been received in October 2014 and work is in progress. The project is slated to be commissioned during the 2nd quarter of F.Y. 2016-17.

Your Directors are happy to inform that for setting up of 40000 MTPA Melamine Project at Vadodara unit, the technology tie up already done and contract is signed for supply of know-how, basic engineering and proprietary equipment with M/s. Casale, Switzerland on 5th February 2015. Project is slated to be implemented on fast track basis and is planned to be operational in 2nd quarter of 2017-18.

Your Directors are pleased to inform that the Company has ambitious plans for setting up large capacity Fertilizers & Petrochemicals Complex at Dahej for which Land acquisition is done and plot development is under progress. Technology selection for various projects like - Caprolactam, Methyl Methacrylate, Ammonia, Urea, etc. is under progress.

Your Directors are also happy to inform that technology selection for setting up of 30000 MTPA High Speed Nylon-6 Chips is under way and will be finalised after review of feasibility by third quarter of 2015-16. This project is proposed to be set up at Company''s Kosamba Unit near Surat, Gujarat.

Yours Directors would also like to inform that the proposal of setting up Ammonia- Urea Fertilizer Complex in Iran as a consortium partner with RCF & GNFC as per the Government of India guidelines is being explored.

Your Directors would also like to inform that your company being environment conscious and promote environment friendly technologies and accordingly various options for construction products from Gypsum are being explored.

14. Information regarding conservation of energy, technology absorption, foreign exchange earnings and outgo and particulars of employees etc.

Information as required under Section 134 (3) (m) of Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are enclosed in Annexure "E" forming part of this report.

The Company does not have any employee falling within the purview of Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and hence such Particulars of Employees are not included.

15. Corporate Social Responsibility (CSR)

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. As a part of its initiatives under "Corporate Social Responsibility", the Company has undertaken projects in the areas of education, livelihood, health, water and sanitation. The Annual Report on CSR activities is annexed as Annexure "A". CSR Policy adopted by the company placed on the company''s website www.gsfclimited.com.

16. Directors

A) Changes in Directors and Key Managerial Personnel

Chairman & Managing Director - Executive Director

During the year, Dr. S. K. Nanda,IAS has been nominated as Chairman and Managing Director of the Company w.e.f. 01.11.2014 in place of Dr. Varesh Sinha, IAS, Chairman (till 31.10.2014) and Shri Atanu Chakraborty, IAS, Managing Director of the Company (till 31.10.2014). Accordingly, resolution relating to his appointment and terms & conditions relating to his appointment are included in the notice convening the 53rd Annual General Meeting and is recommended for your approval.

Independent Director and Non-executive Directors

The independent directors of the Company viz. Shri D C Anjaria, Prof. Vasant P Gandhi, Shri Vijai Kapoor and Shri Ajay Shah, were approved for a term of one year at the 52nd Annual General Meeting of the Company. The resolutions proposing their re-appointment for another term of five consecutive years and your Directors recommend their appointment for your approval.

Smt. Geeta Goradia (Woman Director) was appointed as an additional director of the Company. In the opinion of the Board, Smt. Geeta Goradia fulfills the criteria prescribed in the Companies Act, 2013 and rules made there under for her appointment as a Woman Independent Director of the Company and she is independent of the management in all ways. Accordingly, a resolution relating to her appointment as a woman independent director for a term of five years is included in the notice convening the 53rd Annual General Meeting and is recommended for your approval.

Shri Raj Kumar, IAS has been appointed w.e.f. 08.08.2014 as a rotational director of the Company in place of Shri P N Roy Chowdhury, Director (till 08.08.2014). Consequent upon his transfer to Govt. of India, he has tendered his resignation and ceased to be the Director of the Company.

Shri L Chuaungo, IAS has been appointed w.e.f. 23.04.2015 as a rotational director in place of Shri D J Pandian, IAS, Director of the Company (till 30.08.2014).

Dr. J N Singh, IAS has been appointed w.e.f. 25.11.2014 as rotational director of the Company in place of Dr. Hasmukh Adhia, IAS, Director of the Company (till 05.11.2014).

The brief resume of Directors including declaration of Independent Director etc with regard to appointment/ re-appointment at 53rd Annual General Meeting is annexed to the Notice convening the 53rd Annual General Meeting, which forms the integral part of this Annual Report.

Dr. J N Singh, IAS, director of the Company, shall be liable to retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment.

B) Declaration by an Independent Director(s) and re- appointment, if any

All Independent directors have given declarations that they meet the criteria of independency as laid down under section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

An independent director shall hold office for a term up to five consecutive years on the Board of a Company, but shall be eligible for reappointment for next five years on passing of a special resolution by the Company and disclosure of such appointment in the Board''s report. Accordingly special resolutions are recommended for your approval in the notice convening the 53rd Annual General Meeting.

C) 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 its committees. The manner in which the evaluation has been carried explained in the Corporate Governance Report which forms the part of this Annual Report.

D) Appointment and Remuneration Policy

The Board has on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of directors, senior management and their remuneration. The details of Remuneration Policy and its weblink are contained in the Corporate Governance Report.

E) Meetings

During the year, Seven Meetings of the Board of Directors and Five meetings of the Audit Committee were held. The composition of Board and Committees along with details of attendance is contained in Corporate Governance Report.

17. Details of establishment of vigil mechanism for directors and employees

The Company has a Vigil Mechanism Policy in place to deal with instances, if any, of the fraud, mismanagement, misappropriations, if any and the same is placed on the Company''s website. The details of the policy as well as its weblink are contained in the Corporate Governance Report.

18. Particulars of loans, guarantees or investments under section 186

Particulars of loans given, investments made, guarantee 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. (Please refer to note 12,13,14 to the standalone financial statement).

19. Particulars of contracts or arrangements with related parties

All related party transactions that were entered into during the Financial Year were on an arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the company with promoters, directors, key managerial personnel and other designated persons which may have a potential conflict with the interest of the Company at large.

All Related party transactions were placed before the Audit Committee and also the Board of Directors for Approval. Prior omnibus approval of the Audit Committee is obtained and a statement giving details of transactions, if any, shall be placed before the Audit Committee meeting as mandated. The Company has developed a mechanism for identification of related party transactions and the company is also having the system of monitoring of such transactions.

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto have been disclosed in Annexure "D" to this report.

20. Managerial Remuneration

Details as required pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are contained in Corporate Governance Report.

21. Risk management policy

Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted Risk Management Committee. The details of such Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board''s Report.

22. Directors'' Responsibility Statement

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, your Directors confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. 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 and loss of the company for that period;

c. 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;

d. The directors had prepared the annual accounts on a going concern basis;

e. The directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f. 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.

23. Auditors

(a) Statutory Auditors:

M/s Deloitte Haskins & Sells, Chartered Accountants, Vadodara were appointed as Statutory Auditors of the Company for a term of three consecutive years i.e. from 2014-15 to 2016-17. The Company has received a letter from M/s Deloitte Haskins & Sells, Chartered Accountants, Vadodara (Firm Registration No. 117364W) to the effect that their re-appointment, if made, would be in accordance with the conditions prescribed under section 139 (2) of the Companies Act, 2013 and they are not disqualified for such reappointment within the meaning of Section 141 of the said Act. Your Directors recommend the ratification of Resolution for re-appointment and fixation of remuneration to the Statutory Auditors for the F.Y. 2015-16.

(b) Cost Auditors:

Your directors have appointed M/s A G Dalwadi & Company, Cost Accountants, Ahmedabad (Firm Registration Number 100071), whose appointment and remuneration has been recommended by the Audit Committee and approved by the Board, for conducting and carrying out the cost audit for the Financial year 2015-16. The Cost Audit Report for Financial Year ended 31st March, 2014 was timely filed with Central Government (Ministry of Corporate Affairs) on 19.09.2014 (due date 27.09.2014). Pursuant to Section 148 (3) of Companies Act, 2013, remuneration of cost auditors shall require ratification of shareholders and accordingly, the appropriate resolution has been included in notice convening the 53rd Annual General Meeting.

(c) Internal Auditors:

Your Company has appointed M/s K. C. Mehta & Co., Chartered Accountants, Vadodara, as Internal Auditors for carrying out the Internal Audit of Baroda Unit & Sikka Unit for F.Y. 2014-15. M/s K. N. Mehta & Co., Chartered Accountants, Vadodara and M/s Parikh Mehta & Associates, Chartered Accountants, Vadodara have been appointed as Internal Auditors for the Company''s Fibre and Polymers Units respectively.

(d) Secretarial Auditors & Secretarial Audit Report:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Niraj Trivedi, Practicing Company Secretary to undertake the secretarial audit of the Company. The Report of the Secretarial Auditor is enclosed as annexure "B".

24. Auditors'' Report

There are no comments/ observations from the Auditors and hence no clarifications need to be given on their clean report.

25. Extract of the annual return

The extract of the annual return in Form No. MGT - 9 is annexed herewith as Annexure "C".

26. Human Resources

Your Directors are happy to acknowledge that with the competent, motivated and cost conscious personnel, the Company made significant strides in its operations. The employees have been able to meet the challenges from time to time to improve upon the performance of its plants through efficiency, productivity and economy. Your Directors are happy to place on record their appreciation for the sincere efforts and contributions made by the employees of the Company.

27. Acknowledgements

Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from the Government of Gujarat, Government of India, Bank of Baroda and other Banks and agencies. Your Directors also wish to express their gratitude to the investors for their continued support and faith reposed in the Company.

For and on behalf of the Board

Sd/- Place : Fertilizernagar Dr. S K Nanda, IAS Date : 15.06.2015 Chairman & Managing Director

Mar 31, 2014

The Members,

The Directors are happy to present the 52nd Annual Report and Audited Accounts of the Company for the year ended 31st March, 2014.

A. FINANCIAL RESULTS (Rs. in Crores)

Sr. Particulars 2013-14 2012-13 No.

1. Gross Sales 5697.97 6503.18

Less : Excise Duty Recovered 285.48 249.88

Net Sales 5412.49 6253.30

2. Other Income 157.05 138.09

3. Total Revenue 5569.54 6391.39

4. Less : Operating Expenses 4883.66 5455.37

5. Operating Profit 685.88 936.02

6. Less : Finance Cost 45.14 36.25

7. Gross Profit 640.74 899.77

8. Less : Depreciation 145.32 132.05

9. Exceptional Item 0.00 0.00

10. Profit before Taxes 495.42 767.72

11. Taxation

Current Tax 130.75 257.84

Deferred Tax (net) 22.49 (8.22)

12. Profit after Taxes 342.17 518.10

13. Balance brought forward from last year 287.90 213.04

14. Amount available for Appropriations 630.07 731.14

15. Out of which, your Directors have proposed Appropriation and Transfer as under :

a) Proposed Dividend on Equity Shares 79.70 79.70

b) Tax on Proposed Dividend 13.54 13.54

c) General Reserve 250.00 350.00

16. Leaving a balance in the Profit & Loss Account 286.83 287.90

B. OPERATIONAL PERFORMANCE

Your Directors wish to report that your Company has achieved the turnover of Rs. 5412 Crores for the year ended March 31, 2014 as against Rs. 6253 Crores (FY 12-13) down 13% when compared to the previous financial year. Similarly for the FY 13-14, Profit Before Tax (PBT) was Rs. 495 Crores and Net Profit (Profit After Tax) was Rs. 342 Crores as against PBT of Rs. 768 Crores and PAT of Rs. 518 Crores for the previous financial year.

C. DIVIDEND

Your Directors are happy to recommend a dividend @ 100%, i.e. Rs. 2/- per Equity Share (Face value of Rs. 2/- each) on 39,84,77,530 shares (Previous Year - 100%, i.e. Rs. 2 per share on 39,84,77,530 Equity Shares of Rs.2/- each) for the financial year ended 31st March, 2014. The net outgo on account of Dividend shall be Rs. 93.24 Crores including Corporate Dividend Tax. The Dividend shall be paid to those members, whose names shall appear on the Register of Members of the Company on the Book Closure Date i.e. on 26/07/2014.

D. LISTING OF SHARES & DEPOSITORIES

The Equity Shares of your Company are listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Ltd. (NSE). As approved by the shareholders, an application for voluntary delisting of Equity Shares from Calcutta Stock Exchange Association Ltd., Kolkatta, was made, however, the approval for delisting is still awaited. Your Directors wish to state that the Equity Shares of your Company are compulsorily traded in dematerialized form w.e.f. 26/06/2000. Presently, 96.64% of shares are held in electronic/dematerialized form.

E. REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT TO SHAREHOLDERS

Your Company has complied with all the mandatory requirements of Corporate Governance norms as mandated by Clause 49 of the Listing Agreement with Stock Exchanges. A separate report on Corporate Governance together with the Certificate of M/s. S. Samdani & Associates, Company Secretaries, Vadodara forms part of this Annual Report. The Management Discussion & Analysis report also forms part of this Annual Report.

F. FIXED DEPOSITS

During the year 2013-14, your Company has not accepted/ renewed any Fixed Deposit. Your Directors wish to report that there are 82 Fixed Deposits aggregating Rs. 9.10 Lacs which have remained unclaimed by Depositors, as on 31st March, 2014. Letters reminding them to seek repayment have been sent. Upto and including the date of this report, 9 deposits amounting to Rs. 1.19 Lacs have been repaid.

The Company has also transferred a sum of Rs. 12.69 Lacs being the unclaimed deposits and interest amount thereon during the year to the Investors'' Education and Protection Fund as required in terms of Section 205C of the Companies Act, 1956.

G. INSURANCE

All the properties and insurable interests of the Company, including the buildings, plant & machinery and stocks have been adequately insured. Also, as required under the Public Liability Insurance Act, 1991, your Company has taken the appropriate insurance cover.

H. PROJECTS UNDER CLEAN DEVELOPMENT MECHANISM (CDM)

The Directors are happy to inform that Wind Mill Projects of 10 MW, 12 MW, 18 MW & 33 MW are already registered under CDM and 50.4 MW Wind Mill Project is in the final stage of registration process for availing Carbon Credit. Company has also initiated steps for getting the revenue against Carbon Credit for the registered projects.

I. EXPANSION & DIVERSIFICATION

Your Company had taken up conversion of Ammonia-I plant for production of Methanol based on the technology provided by M/s. Haldar Topsoe, Denmark. M/s. Projects & Development India Ltd. was the Consultant for carrying out detailed engineering works for the project. Your Directors are happy to inform that this Plant commissioned during 2nd quarter of F.Y.2013-14 and could achieve the guaranteed quality product at full load.

Your Company has participated in a strategic Joint Venture with Tunisian Indian Fertilizers (TIFERT) in Tunisia with a view to ensure consistent supply of Phosphoric Acid for optimized running of its DAP plant at Sikka. The project is commissioned successfully and we have started getting Phosphoric Acid from TIFERT for our Sikka Unit.

Your Company had been conscious of the development of Green technology and with a view to translate this into reality has set up total 123.4 MW Wind Mill Power Projects in the Saurashtra & Kutch Region. These projects are working satisfactorily and are also meeting Company''s captive power requirements as well as your company is selling surplus power to the State Grid.

Your Directors are happy to inform that your Company has successfully commissioned 29.4 MW Wind Mill Project in Rajkot district during 4th quarter of FY 2013-14.

Your Directors also wish to inform that your Company is in the process of implementing additional Nylon-6 capacity of 15,000 MTPA (Engineering Plastic) at Vadodara, for which the technology tie-up has been made with M/s. Lurgi, Germany and M/s. Tata Consulting Engineers Ltd. have been engaged for detailed engineering work. The project is slated to be operational in the 4th quarter of FY 2014-15.

Your Directors also wish to inform that your Company has taken up 20,000 MTPA Water Soluble Fertilizer (WSF) Project at Vadodara, for which tie-up has been made with M/s. Hindustan Dorr-Oliver (HDO). The project execution is under progress and is slated to be operational in the 2nd quarter of F.Y. 2014-15.

Your Company is proposing to set up 40,000 MTPA Melamine Project at Vadodara for which technology selection process is underway.

Your Directors are happy to inform that tie-up for technology and project implementation has been made with M/s.

Hindustan Dorr-Oliver for the capacity expansion of about 5 Lakhs MTPA for DAP/NPK at Sikka unit.

M/s. Uhde India Pvt. Ltd. is engaged to provide engineering services for associated additional facilities related to DAP/ NPK plant. EIA approval procedure is in final stage and engineering is under progress. The project is slated to be operational in 2nd quarter of FY 2015-16.

Your Directors are happy to inform that the Company is also exploring the feasibility of setting up of Sulphuric Acid & Phosphoric Acid Plants at Sikka unit as a part of backward integration to have assured supply of Raw Materials.

Your Directors are pleased to inform that the Company has ambitious plans for setting up large capacity Fertilizers & Petrochemicals Complex at Dahej for which Land acquisition is completed and plot development is in progress.

Technology selection for various projects like Â Caprolactam, Nylon-6, Methyl Methacrylate, Ammonia, Urea etc. are under way.

SUBSIDIARY COMPANY - GSFC AGROTECH LIMITED

The Company considers the subsidiary to be not material in terms of its investment and the level of operations as at 31st March 2014 and hence consolidated financial statements are not prepared. The reports of the Directors'' and Auditors of GATL for the year ended March 31, 2014, as required under Section 212 of the Companies Act, 1956, are annexed.

J. INFORMATION REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO AND PARTICULARS OF EMPLOYEES ETC.

Information as required under Section 217(1) (e) of the Companies Act, 1956, read with Rule (2) of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure "A" forming part of this report. The Company does not have any employee falling within the purview of Section 217(2A) of the Companies Act, 1956 and hence such Particulars of Employees are not included.

K. DIRECTORS

Change in Directors

Dr. Hasmukh Adhia, IAS, Addl. Chief Secretary, Govt. of Gujarat, has been appointed as Director of the Company w.e.f. 01-04- 2013.

Pursuant to the provisions of Section 255 & 256 of the Companies Act, 1956, Shri P N Roy Chowdhury shall be liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered himself for re-appointment.

Independent Directors

In due compliance with the provisions of Section 149 of the Companies Act, 2013, it is proposed to appoint Shri D C Anjaria, Prof. Vasant P Gandhi, Shri Ajay N Shah and Shri Vijai Kapoor as Independent Directors on the Board of the Company, who shall hold the office for a term from the conclusion of the ensuing Annual General Meeting to the conclusion of the next Annual General Meeting. The appropriate resolutions for appointment/ reappointment of Directors are placed for the approval of shareholders.

L. DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm that: i) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and that no material departures have been made from the same;

ii) The appropriate accounting policies have been selected and applied consistently and judgments & estimates have been made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the profit of the Company for the period from 1st April, 2013 to 31st March, 2014;

iii) 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) The Annual Accounts have been prepared on a "Going Concern" basis.

M. AUDITORS

Pursuant to provisions of Section 224 of the Companies Act, 1956, M/s Deloitte Haskins & Sells, Chartered Accountants, Vadodara, were the statutory auditors of the Company who hold office up to the conclusion of the forthcoming Annual General Meeting.

As per Section 139 (2) of the Companies Act, 2013 they are eligible for re-appointment for a term of maximum three consecutive years i.e. from 2014-15 to 2016-17 (since they have completed the term of two years). The Company has received a letter from M/s Deloitte Haskins & Sells, Chartered Accountants, Vadodara (Firm Registration No. 117364W) to the effect that their re-appointment, if made, would be in accordance with the conditions prescribed under section 139 (2) of the Companies Act, 2013 and they are not disqualified for such reappointment within the meaning of Section 141 of the said Act.

Pursuant to the directive from the Ministry of Corporate Affairs regarding appointment of Cost Auditor, M/s A G Dalwadi & Company, Cost Accountants, Ahmedabad have been appointed as the Cost Auditor of the Company for the Financial Year 2014-15. The Cost Auditor for the F.Y. 2012-13 was M/s Diwanji & Associates, Cost Accountants, Vadodara and the Cost Audit Report in respect of FY 12-13 was filed on 27.09.2013 (i.e. timely on the stipulated date of 27.09.2013). The Section 148 (3) of Companies Act, 2013 requires that the remuneration of cost auditors shall require the ratification of Shareholders and accordingly the appropriate resolution has been included in the notice convening the 52nd Annual General Meeting.

Your Directors recommend the approval of Resolution for re-appointment and fixation of remuneration of Auditors for the F.Y. 2014-15.

Your Company has also appointed M/s K. C. Mehta & Co., Chartered Accountants, Vadodara as Internal Auditors for carrying out the Internal Audit of Baroda Unit & Sikka Unit for F.Y. 2013-14. M/s K. N. Mehta & Co., Chartered Accountants, Vadodara and M/s Parikh Mehta & Associates, Chartered Accountants, Vadodara have been appointed as Internal Auditors for the Company''s Fibre and Polymers Units respectively.

N. AUDITORS'' REPORT

There are no comments/observations from the Statutory Auditors and hence no clarifications need be given on their clean report.

O. ENVIRONMENTAL PROTECTION

- As a part of Environment Management System, our prime concern is on minimization and control of environmental pollution and conservation of natural resources to the maximum extent possible for the protection of the environment.

- GSFC possess valid Consolidated Consent and Authorization (CC&A) vide Order No. AWH-44254 dated 16/11/2011, which is valid up to 06/06/2016 and complies with all relevant statutory requirements. Your Directors are happy to inform that your Company has also received amendment in CC&A Order AWH-44254 for 1200 MTPA HAS crystal project vide Letter No. GPCB/CC&A-VRD-83(2)/ID:21968/147842 dated 22/05/2013.

- There is a Zero Effluent Discharge System in place at Phosphoric group of plants. Revamping of Effluent Treatment Plants (ETP) for enhancement of treatment capacity is in progress and its Phase ÂI is in the final stage of completion. Your Company has also initiated Phase-II revamping activities for improvement of performance of ETPs with respect to new projects and reuse options of treated effluent for water conservation. Quality of final treated effluent during the year 2013-14 has met with the applicable norms of Gujarat Pollution Control Board. As a part of complying with norms, your Company has received rebate in water cess assessment order for the year 2012-13.

- To monitor the real time concentration of pollutants, scheme for installation of four On-line Ambient Air Quality Monitoring Stations within the periphery of your Company''s premises has been completed in Nov. 2013. The gaseous emissions from the stacks of different plants are being regularly monitored so as to ensure that they consistently meet with the requirements of permissible limits.

- Most of the Hazardous Solid Wastes generated from different processes are sold to GPCB approved recyclers/ rerefiners.

- Your Company has received Environmental Clearance (EC) for proposed 45 TPD Nylon 6 Project from State Level Environmental Impact Assessment Authority (SEIAA) vide Letter No. SEIAA/GUJ/EC/5(e)/131/2013 dated 05/07/ 2013. Subsequently, it has received the Consent to Establish (CTE) for proposed 45 TPD Nylon 6 Project from GPCB vide CTE No. 58830 dated 05/12/2013.

- Your Company has also received the Consent to Establish Order (CTE/NOC) for Water Soluble Fertilizer and Micronutrient Mixture Project from GPCB vide CTE No. 56462 dated 03/10/2013.

- Your Directors are also happy to report that there has been an uninterrupted supply of all utilities to process plants during the year.

P. HUMAN RESOURCES

Your Directors are happy to acknowledge that with the competent, motivated and cost conscious personnel, the Company made significant strides in its operations. The employees have been able to meet the challenges from time to time to improve upon the performance of its plants through efficiency, productivity and economy. Your Directors are happy to place on record their appreciation for the sincere efforts and contributions made by the employees of the Company.

Your Directors wish to inform that a Performance Management System for Officers is in place since last year with its linkage to promotion policy. This has enhanced personal excellence by the Officers towards Company''s overall excellence.

Your Directors wish to inform that the Company has introduced production, productivity & profitability linked incentive scheme for participation of employees towards higher productivity.

Q. ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from the Government of Gujarat, Government of India, Bank of Baroda and other Banks and agencies. Your Directors also wish to express their gratitude to the investors for their continued support and faith reposed in the Company.

For and on behalf of the Board

Sd/- Place : Gandhinagar Dr. Varesh Sinha Date : 16th June, 2014 Chairman

Mar 31, 2013

To The Members,

The Directors are happy to present the 51st Annual Report and Audited Accounts of the Company for the year ended 31st March, 2013.

A. FINANCIAL RESULTS (Rs. in Crores)

Particulars 2012-13 2011-12

1. Gross Sales 6503.18 5510.50

Less : Excise Duty Recovered 249.88 208.67

Net Sales 6253.30 5301.83

2. Other Income 138.09 162.08

3. Total Revenue 6391.39 5463.91 4. Less : Operating Expenses 5455.37 4167.19

5. Operating Profit 936.02 1296.72

6. Less : Finance Cost 36.25 20.08

7. Gross Profit 899.77 1276.64

8. Less : Depreciation 132.05 129.20

9. Exceptional Item 0.00 (34.09)

10. Profit before Taxes 767.72 1113.35

11. Taxation

- Current Tax 257.84 312.71

- Deferred Tax (net) (8.22) 43.07

12. Profit after Taxes 518.10 757.57

13. Balance brought forward from last year 213.04 134.94

14. Amount available for Appropriations 731.14 892.51

15. Out of which, your Directors have proposed Appropriation and Transfer as under :

a) Proposed Dividend on Equity shares 79.70 59.77

b) Tax on Proposed Dividend 13.54 9.70

c) General Reserve 350.00 610.00

16. Leaving a balance in the Profit & Loss Account 287.90 213.04

B. OPERATIONAL PERFORMANCE

Your directors are pleased to report that your Company has achieved the highest - ever sales turnover of Rs. 6253 Crores in Fertilizers & Industrial Products business segments for the year ended March 31, 2013. This represents 18% increase over the previous financial year''s turnover of Rs. 5302 Crores.

Despite the higher turnover volume, declining margins were reflected in the Profit Before Tax (PBT) of Rs. 768 Crores and Net Profit (Profit After Tax) of Rs. 518 Crores in the year 2012-13 as against previous Financial Year (PBT of Rs. 1113 Crores & PAT of Rs. 758 Crores).

C. DIVIDEND

Your Directors are happy to recommend a dividend @ 100%, i.e. Rs. 2/- per Equity Share of Rs. 2/- each on 39,84,77,530 shares (Previous Year - 75%, i.e. Rs. 7.50 per share on 7,96,95,506 Equity Shares of Rs.10/- each) for the financial year ended 31st March, 2013. The net outgo on account of Dividend shall be Rs. 93.23 Crores including Corporate Dividend Tax. The Dividend shall be paid to those members, whose names shall appear on the Register of Members of the Company on the Book Closure Date i.e. on 20/07/2013.

D. LISTING OF SHARES & DEPOSITORIES

The Equity Shares of your Company are listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Ltd. (NSE). As approved by the shareholders, an application for voluntary delisting of Equity Shares from Calcutta Stock Exchange Association Ltd., Kolkatta, was made, however, the approval for delisting is still awaited.

Your Directors wish to state that the Equity Shares of your Company are compulsorily traded in dematerialized form w.e.f. 26/06/2000. Presently, 96.54% of shares are held in electronic/dematerialised form.

E. REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT TO SHAREHOLDERS

Your Company has complied with all the mandatory requirements of Corporate Governance norms as mandated by Clause 49 of the Listing Agreement with Stock Exchanges. A separate report on Corporate Governance together with the Certificate of M/s. S. Samdani & Associates, Company Secretaries, Vadodara forms part of this Annual Report. The Management Discussion & Analysis report also forms part of this Annual Report.

F. FIXED DEPOSITS

During the year 2012-13, your Company has not accepted / renewed any Fixed Deposit. Your Directors wish to report that there are 113 Fixed Deposits aggregating Rs. 14.05 Lacs which have remained unclaimed by Depositors, as on 31st March, 2013. Letters reminding them to exercise their option to seek repayment have been sent. Upto and including the date of this report, 8 deposits amounting to Rs. 1.75 Lacs have been repaid.

During the year, the Company has transferred a sum of Rs. 10.78 Lacs being the unclaimed deposits and interest amount thereon to the Investors'' Education and Protection Fund as required in terms of Section 205C of the Companies Act, 1956.

G. INSURANCE

All the properties and insurable interests of the Company, including the buildings, plant & machinery and stocks have been adequately insured. Also, as required under the Public Liability Insurance Act, 1991, your Company has taken all the necessary insurance cover.

H. PROJECTS UNDER CLEAN DEVELOPMENT MECHANISM (CDM)

Your Company has taken various Projects for energy saving & reducing carbon emission. These projects have been submitted for validation and registration under Clean Development Mechanism (CDM). This would help the company to earn Carbon Credits which can fetch further revenue.

The Directors are happy to inform that Wind Mill Projects of 12 MW, 18 MW & 33 MW are already registered under CDM and 50.4 MW Wind Mill Project is under advance stage of registration process for availing Carbon Credit. The Company has undertaken the procedure for getting the revenue against Carbon Credits for the registered projects.

I. EXPANSION & DIVERSIFICATION

Your Company had taken up conversion of Ammonia-I plant for production of Methanol based on technology for M/s.Haldar Topsoe, Denmark. M/s.Projects & Development India Ltd. was appointed as Consultant for carrying out Detail Engineering work for the project. The mechanical completion of the project was achieved on 28.12.12 and trial production is achieved on 2nd March, 2013. Company is in the process of declaring the Commissioning of the Plant in 1st quarter of F.Y.2013-14.

Your Company has made strategic Investment of 19.98% in equity share capital of M/s Karnalyte Resources Inc., Canada totaling Rs. 238 Crores. This will give assured supply of 3,50,000 MT of Potash in Phase I and further 2,50,000 MT in Phase II from Wynyard Potash Project of the said Company. This tie up will help your Company in adding ''K'' Nutrient in its portfolio. Your Company plans to partly use Potash for NPK fertilizers manufacturing & partly for trading purpose.

Your Company had taken up modernization of Cyclohexanone unit in Caprolactam-II plant at Vadodara and modernization project is completed and taken in line to achieve the desired saving in consumption of Benzene.

Your Company has participated in a strategic Joint Venture with Tunisian Indian Fertilizers (TIFERT) in Tunisia with a view to ensure consistent supply of Phosphoric Acid for optimized running of its DAP plant at Sikka. The project was delayed due to political turmoil in Tunisia but the directors are happy to report that the project is now expected to be commissioned by the 1st quarter of F.Y. 2013-14.

Your Company had been conscious of the development of Green technology and has translated this into reality by setting up total 123.4 MW Wind Mill Power Projects in the Saurashtra & Kutch Region. These projects are working satisfactorily and are meeting Company''s captive power requirement as well as selling surplus power to the State Grid. Your company is also in process of setting up of 29.4 MW Wind Mill Power Project in Rajkot district. The project is planned to be operational in the 2nd quarter of F.Y. 2013-14.

Your Directors also wish to inform that for additional 15,000 MTPA Nylon-6 capacity (Engineering Plastic) at Vadodara unit, the technology tie-up has been made with M/s. Lurgi, Germany and M/s.Tata Consulting Engineers Ltd. are hired for Detail Engineering work. The project is planned to be operational in the 2nd quarter of F.Y. 2014-15.

Your Directors also wish to inform that for 20,000 MTPA Water Soluble Fertilizer (WSF) Project at Vadodara unit, tie-up has been made with M/s.Hindustan Dorr-Oliver for the project implementation. The project is planned to be operational in the 1st quarter of F.Y. 2014-15.

Your Company is also exploring the possibility of setting up Melamine Project and modernization of Cyclohexanone Plant of Caprolactam-I Plant at Vadodara unit.

Your Directors are also happy to inform that tie-up for technology and project implementation has been made with M/s.Hindustan Dorr-Oliver for capacity expansion of about 5 lakhs MtPa for DAP/NPK at Sikka unit. M/s.UIPL is hired to give engineering services for Associated Additional Facilities related to DAP/NPK plant. The project is planned to be operational in 1st quarter of F.Y. 2015-16.

Your Directors are happy to inform that Company is taking actions for setting up of Sulphuric Acid & Phosphoric Acid Plant at Sikka unit for assured supply of Raw Material.

Your Directors are pleased to inform that the Company has ambitious plans for setting up large capacity Fertilizers & Petrochemicals Complex at Dahej for which Land acquisition is done and technology selection is under progress.

SUBSIDIARY COMPANY

During the year your Company has made an investment of Rs. 1 Crore in the equity share capital of GSFC Agrotech Limited (GATL). It has thus become a wholly owned subsidiary of your Company .GATL''s business blue print was under consideration and no commercial operations have been commenced during the year. Three projects during the year namely (1) Sardar Amin Granuls (SAG) /Sardar Amin Liquid (SAL) of 20,000 MT/annum capacity and (2) Liquid Biofertilizer (LBF) of 10 lac Lit/annum capacity have been approved and are under implementation while (3) Tissue Culture Complex (TCC) for producing 1.25 crore Tissue culture plants/annum , is under project planning and tendering stage. The Company considers the subsidiary to be not material in terms of its investment and the level of operations as at 31st March 2013 and hence consolidated financial statements are not prepared. The reports of the Directors'' and Auditors of GATL for the year ended March 31, 2013, as required under Section 212 of the Companies Act, 1956, are annexed.

J. INFORMATION REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO AND PARTICULARS OF EMPLOYEES ETC.

Information as required under Section 217(1) (e) of the Companies Act, 1956, read with Rule (2) of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure "A" forming part of this report. The Company does not have any employee falling within the purview of Section 217(2A) of the Companies Act, 1956 and hence such Particulars of Employees are not included.

K. DIRECTORS Chairman

Upon attaining superannuation, Shri A. K. Joti, IAS retired from the services of Govt. of Gujarat and in his place Dr. Varesh Sinha, Chief Secretary to the Govt. of Gujarat has been appointed as Govt. Director and Chairman of the Company w.e.f. 01/03/2013. Your Directors place on record their deep sense of appreciation for the dynamic leadership, valuable contribution and the vision provided by Shri A. K. Joti, IAS towards the growth of the Company during his tenure as Chairman.

Change in Directors

Dr. Hasmukh Adhia, IAS, Principal Secretary, Govt. of Gujarat, has been appointed as an Additional Director of the Company w.e.f. 01 -04-2013. The Resolution for his appointment as Rotational Director is placed for your approval.

Your Directors place on record the valuable contributions made by Shri M. M. Srivastava, IAS during his tenure as Director of the Company.

Pursuant to the provisions of Section 255 & 256 of the Companies Act, 1956, Shri D. J. Pandian and Shri D. C. Anjaria shall be liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment. The appropriate resolutions for appointment/ reappointment of Directors are placed for the approval of shareholders.

L. DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm that:

i) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and that no material departures have been made from the same;

ii) The appropriate accounting policies have been selected and applied consistently and judgments & estimates have been made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the profit of the Company for the period from 1st April, 2012 to 31st March, 2013;

iii) 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) The Annual Accounts have been prepared on a "Going Concern" basis.

M. AUDITORS

In pursuance of the Companies Act, 1956, M/s Deloitte Haskins & Sells, Chartered Accountants, Vadodara, who are the statutory auditors of the Company, holding office upto the conclusion of the forthcoming Annual General Meeting and they are eligible for reappointment. The Company has received a letter from M/s Deloitte Haskins & Sells, Chartered Accountants, Vadodara (Firm Registration No. 117364W) to the effect that their re-appointment if made, would be within the prescribed limits under section 224 (1-B) of the Companies Act, 1956 and they are not disqualified for such reappointment within the meaning of Section 226 of the said Act.

Your Directors recommend the approval of Resolution for appointment and fixation of remuneration to the Statutory Auditors for the F.Y. 2013-14.

Pursuant to the directive from the Ministry of Corporate Affairs regarding appointment of Cost Auditor, M/s Diwanji & Associates, Cost Accountants, Vadodara have been appointed as the Cost Auditor of the Company for the Financial Year 2013-14. The Cost Auditor for the F.Y. 2011 -12 was also M/s Diwanji & Associates, Cost Accountants, Vadodara and the Cost Audit Report was filed on 22.12.2012 (i.e. well before the stipulated date of 28.02.2013).

Your Company has also appointed M/s K. C. Mehta & Co., Chartered Accountants, Vadodara as Internal Auditors for carrying out the Internal Audit of Baroda Unit & Sikka Unit for F.Y. 2012-13. M/s K. N. Mehta & Co., Chartered Accountants, Vadodara and M/s Parikh Mehta & Associates, Chartered Accountants, Vadodara have been appointed as Internal Auditors for the Company''s Fibre and Polymers Units respectively.

N. AUDITORS'' REPORT

There are no comments/observations from the Statutory Auditors and hence no clarifications need be given on their clean report.

O. ENVIRONMENTAL PROTECTION

- Preservation & promotion of environment is GSFC''s fundamental concern in all our business activities, as a part of Environment Management System. We are conscious on wastes minimization, recycling and conservation of natural resources to the maximum possible extent for the protection of the environment.

- Zero Process Effluent Discharge System is in place at Fertilizer Group of plants. Phase-I Revamping of Effluent Treatment Plants is at final stage of completion for enhancement of treatment capacity. All efforts were put to maintain Quality of the discharged effluent within the norms specified by the GPCB.

- To monitor the real time concentration of pollutant, 1) Installation of 22 nos. Ammonia and 8 Nos of Sulphur Dioxide Gas Detectors have been completed and 2) the scheme for installation of Online Ambient Air Quality Monitoring Stations at four directions of the premises is in progress and likely to be completed by the end of September 2013. The gaseous emission from the stacks of different plants is monitored and consistently meets with the permissible limit.

- Most of the Hazardous Solid Wastes generated from different processes are sold to pollution board approved recyclers.

- GSFC has valid Consolidated Consent and Authorization (CCA) vide Order No. AWH-44254 dated 16/11/2011, valid up to 06/06/2016 and complied with relevant statutory requirements.

- Our company has received 1) CTO/CCA amendment for Methanol Project vide letter no. GPCB/122627 dated 28/08/2012. 2) NOC for new HAS crystal project vide CTE No. 48327 dated 28/08/2012. 3) CCA amendment for HAS crystal project and changes in manufacturing process of Anone intermediate at Caprolactam - II plant. The modification carried out at Anone plant is resulted in to reduction of specific raw material consumption i.e. Benzene by better process yield, improvement of quality of Anone and simultaneous reduction of some of the utilities and wastes.

- Environmental Clearance of 45 TPD Nylon-6 Chips expansion project is likely to be received by June 2013 from SEIAA, Gandhinagar.

P. HUMAN RESOURCES

Your Directors are happy to acknowledge that with the competent, motivated and cost conscious personnel, the Company made significant strides in its operations. The employees have been able to meet the challenges from time to time to improve upon the performance of its plants through efficiency, productivity and economy. Your Directors are happy to place on record their appreciation for the sincere efforts and contributions made by the employees of the Company.

Your Directors wish to inform that the Company has introduced Performance Management System for Officers and accordingly variable incentive shall be paid to Officers based on their performance and the company''s promotion policy will also be linked with the performance.

Your Directors wish to inform that the Company has introduced production, productivity & profitability linked incentive scheme for participation of employees towards higher productivity. Your Company has recently concluded a wage settlement for the Sikka Unit, Fibre Unit & Polymer Unit and agreements to this effect have been signed with Employees Unions.

Q. ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from the Government of Gujarat, Government of India, Bank of Baroda and other Banks and agencies. Your Directors also wish to express their gratitude to the investors for their continued support and faith reposed in the Company.

For and on behalf of the Board

Sd/-

Place : Fertilizernagar Dr. Varesh Sinha

Date : 17th June, 2013 Chairman

Mar 31, 2012

The Directors are happy to present the 50th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2012.

A. FINANCIAL RESULTS (Rs.in Crores)

Particulars 2011-12 2010-11

1. Gross Sales 5510.50 4925.49

Less : Excise Duty Recovered 208.67 170.44

Revenue from Operations 5301.83 4755.05

2. Other Income 162.08 101.20

3. Total Revenue 5463.91 4856.25

4. Less : Operating Expenses 4167.19 3577.66

5. Operating Profit 1296.72 1278.59

6. Less : Finance Cost 20.08 19.86

7. Gross Profit 1276.64 1258.73

8. Less : Depreciation 129.20 146.40

9. Exceptional Item (34.09) -

10. Profit before Taxes 1113.35 1112.33

11. Taxation

- Current Tax 312.71 308.34

- Deferred Tax (net) _43.07 54.62

12. Profit after Taxes 757.57 749.37

13. Balance brought forward from last year 134.94 90.41

14. Amount available for Appropriations 892.51 839.78

15. Out of which, your Directors have proposed Appropriation and Transfer as under :

a) Proposed Dividend on Equity shares 59.77 55.79

b) Tax on Proposed Dividend 9.70 9.05

c) General Reserve 610.00 640.00

16. Leaving a balance in the Profit & Loss Account 213.04 134.94

B. OPERATIONAL PERFORMANCE

Your Directors are pleased to report that your Company has achieved highest ever Profit Before Tax (PBT) of Rs. 1113 Crores and Net Profit (Profit After Tax) of Rs. 758 Crores in the year 2011-12. (Previous highest PBT of Rs. 1112 Crores & PAT of Rs. 749 Crores in FY 2010-11).

Your Company has achieved the sales turnover for the year ended March 31, 2012 of Rs. 5302 Crores, which registered a growth of 12% over the previous financial year's turnover of Rs. 4755 Crores. Your Company achieved this higher sales turnover as a result of better price realization in both the business segments viz. Fertilizer and Industrial Products.

The EBIDTA has also increased from 1278.59 Crores to Rs. 1296.72 Crores. The finance cost has increased nominally from Rs. 19.86 Crores in previous year to Rs. 20.08 Crores in F Y 2011-12.

C. DIVIDEND

Your Directors are happy to recommend a dividend @ 75%, i.e. Rs.7.50 per Equity Share (Previous Year - 70%, i.e. Rs. 7.00 per share) on 7,96,95,506 Equity Shares of Rs.10/- each for the financial year ended 31st March, 2012. The net outgo on account of Dividend shall be Rs.6946.81 Lacs including Corporate Dividend Tax. The Dividend shall be paid to those members, whose name shall appear on the Register of Members of the Company on the Book Closure Date i.e. on 21/07/2012.

D. SUB-DIVISION OF SHARES

Your Directors are pleased to inform you that the Equity shares of the Company are proposed to be sub-divided from the face value of Rs.10/- per share to Rs. 2/- per share. Suitable resolutions in this regard have been included in the notice convening the Annual General Meeting.

Your Directors also wish to inform that as a result of sub-division of shares the liquidity of Company's shares would increase in the market. It would also broad base the distribution of shareholding as it tends to attract small investors. Your Directors recommended the passing of the said resolutions.

E. LISTING OF SHARES & DEPOSITORIES

The Equity Shares of your Company are listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Ltd. (NSE). As approved by the shareholders, an application for voluntary delisting of Equity Shares from Calcutta Stock Exchange Association Ltd., Kolkatta, was made, however, the approval for delisting is still awaited.

Your Directors wish to state that the Equity Shares of your Company are compulsorily traded in dematerialized form w.e.f. 26/06/2000. Presently, 96.37% of shares are held in electronic/dematerialized form.

F. REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT TO SHAREHOLDERS

Your Company has complied with all the mandatory requirements of Corporate Governance norms as mandated by Clause 49 of the Listing Agreement with Stock Exchanges. A separate report on Corporate Governance together with the Certificate of M/s. S. Samdani & Associates, Company Secretaries, Vadodara forms part of this Annual Report. The Management Discussion & Analysis report also forms part of this Annual Report.

G. FIXED DEPOSITS

During the year 2011-12, your Company has not accepted / renewed any Fixed Deposit. Your Directors wish to report that there are 311 Fixed Deposits aggregating Rs. 41.61 Lacs which have remained unclaimed by Depositors, as on 31st March, 2012. Letters reminding them to exercise their option to seek repayment have been sent. Upto and including the date of this report, 104 deposits amounting to Rs. 13.17 Lacs have been repaid.

During the year, the Company has transferred a sum of Rs. 8.24 Lacs being the unclaimed deposits and interest amount thereon to the Investors' Education and Protection Fund as required in terms of Section 205C of the Companies Act, 1956.

H. INSURANCE

All the properties and insurable interests of the Company, including the buildings, plant & machinery and stocks have been adequately insured. Also, as required under the Public Liability Insurance Act, 1991, your Company has taken all the necessary insurance cover.

I. PROJECTS UNDER CLEAN DEVELOPMENT MECHANISM (CDM)

Your Company has taken up various projects for reducing emission and energy saving. These projects have also been submitted for validation and registration under the Clean Development Mechanism. This would help your Company to earn Carbon Credit.

Your Directors are happy to inform that a Project on fossil fuel change-over and Wind Mill Power Project of 10 MW have already got registered under CDM, while the Wind Mill Projects of 12 MW, 18 MW and 33 MW are under advance stage of registration process for availing carbon credit.

J. EXPANSION & DIVERSIFICATION

Your Company has taken up conversion of Ammonia-I Plant for production of Methanol based on technology from M/s. Haldor Topsoe, Denmark. M/s. Project & Development India Ltd. have been appointed as consultants for carrying out detailed engineering work for the project. The project is under execution and it is slated to be commissioned in the second quarter of F.Y. 2012-13. Your Company has also taken up modernization of Cyclohexanone unit at Vadodara.

Your Company has participated in a strategic Joint Venture with Tunisian Indian Fertilizers (TIFERT) in Tunisia with a view to ensure consistent supply of Phosphoric Acid for optimized running of its DAP Plant at Sikka. The Project is delayed due to political turmoil in Tunisia and it is now expected to be commissioned by the 2nd quarter of F.Y. 2012-13.

Your Company has been conscious of the development of Green technology and has translated this into reality by setting up total 123.4 MW Wind Mill Power Projects in the Saurashtra & Kutch Region. These projects are working satisfactorily and are meeting Company's captive power requirements as well as selling surplus power to the State Grid.

Your directors also wish to inform that for additional 15,000 MTPA Nylon-6 capacity at Vadodara Unit, the technology tie up has been made with M/s. Lurgi, Germany, who is one of the most renowned technology suppliers for Polyamides and the project is planned to be operational in the last quarter of F.Y. 2013-14.

Your directors are pleased to inform that the Company has ambitious plans for setting up large capacity fertilizers & petrochemicals complex at Dahej for which land acquisition and technology search are almost completed. Your directors are also happy to inform that the Company has decided to take forward the capacity expansion in the DAP, Sulphuric Acid and Phosphoric Acid at Sikka Unit and has ambitious plans to add capacity of Water Soluble Fertilizers, Customized Fertilizers & Bio-fertilizers.

SETTING UP OF A WHOLLY OWNED SUBSIDIARY FOR AGROTECH BUSINESS :

The Company's growth depends on diversification and expansion of the existing facilities in related areas. Headway has been made in planning the activities related to bio-fertilizers, bio-fungicides, tissue culture, flori-culture, greenhouse technology, cold-storage chain, plant growth promoters etc. at Vadodara.

To take care of investment in new schemes, your company has promoted and incorporated a new company in the name and style of GSFC Agrotech Limited. It will be wholly owned subsidiary of your company. The business blue print for the same is under preparation.

K. INFORMATION REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO AND PARTICULARS OF EMPLOYEES ETC.

Information as required under Section 217(1) (e) of the Companies Act, 1956, read with Rule (2) of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure "A" forming part of this report. The Company does not have any employee falling within the purview of Section 217(2A) of the Companies Act, 1956 and hence such Particulars of Employees are not included.

L. DIRECTORS

Pursuant to the provisions of Section 255 & 256 of the Companies Act, 1956, Shri Ajay N. Shah and Shri Vijai Kapoor shall be liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment.

The appropriate resolutions for appointment/reappointment of Directors are placed for the approval of shareholders.

M. DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm that:

i) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and that no material departures have been made from the same;

ii) The appropriate accounting policies have been selected and applied consistently and judgments & estimates have been made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the profit of the Company for the period from 1st April, 2011 to 31st March, 2012;

iii) 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) The Annual Accounts have been prepared on a "Going Concern" basis.

N. AUDITORS

Your Directors wish to inform that M/s. Prakash Chandra Jain & Co., Chartered Accountants, the Statutory Auditors of the Company will be completing two years tenure at the conclusion of the forthcoming Annual General Meeting (AGM). They were appointed Statutory Auditors at the last AGM. As a measure of good Corporate Governance practice, it is proposed to rotate the Statutory Auditors. It is therefore recommended to appoint M/s. Deloitte Haskins & Sells, Chartered Accountants, Vadodara (Firm Registration No. 117364W) in place of retiring Auditors. M/s. Deloitte Haskins & Sells are a renowned firm of Chartered Accountants and they have wide experience of the Audit of various Companies.

Your Directors recommend the approval of Resolution for appointment and fixation of remuneration to the new Statutory Auditors.

Pursuant to the directive from the Ministry of Corporate Affairs regarding appointment of Cost Auditor, M/s. Diwanji & Associates, Cost Accountants, Vadodara have been appointed as the Cost Auditor for Fertilizers, Chemicals and Nylon of the Company for the Financial Year 2012-13. The Cost Auditor for the F.Y. 2010-11 was also M/s. Diwanji & Associates, Cost Accountants, Vadodara and the Cost Audit Report was filed on 23.09.2011(i.e. four days before the stipulated date of 27.09.2011).

Your Company has also appointed M/s. Haribhakti & Co., Chartered Accountants, Mumbai as Internal Auditors for carrying out the Internal Audit of its Vadodara Unit and Sikka Unit for F.Y. 2011-12. M/s. K.N.Mehta & Co., Chartered Accountants, Vadodara and M/s. Parikh Mehta & Associates, Chartered Accountants, Vadodara have been appointed as Internal Auditors for the Company's Polymers and Fibre Units respectively.

O. AUDITORS REPORT

There are no comments/observations from the Statutory Auditors and hence no clarifications need be given on their clean report.

P. ENVIRONMENTAL PROTECTION

Environment control division has taken all round care for meeting all statutory requirements while disposing-off effluents, solid wastes and air emissions.

Bio-diversity study within and around GSFC complex was carried out by Gujarat Ecology Society (recognized by Ministry of Science & Technology), which indicates considerable improvement in the environment on account of various steps taken by GSFC for abatement of pollution.

Considering enhancement of Production activities of Caprolactam plants and upcoming projects like Methanol, Nylon-6 Chips etc., actions for revamping of effluent treatment facilities are in progress.

To monitor real time concentration of pollutants, scheme for installation of 4 nos. of additional Online Ambient Air Quality Monitoring Stations at four sides of the premises and GAS Detectors in different plants is under implementation.

GSFC has received renewal of Consolidated Consent and Authorization (CCA) vide Order No. AWH-44254 dated 16/11/2011, valid upto 06/06/2016 and complied with relevant statutory requirements.

GSFC was conferred Safety Award-2010 Certificate of Appreciation from NSCI, Mumbai and also prestigious Gujarat State Safety Award 2010' in the form of Certificate of Honor from Gujarat Safety Council and Director Industrial Safety & Health for achieving 3 million man-hours without any accident among Category - I Group A Industries.

Most of the plants at GSFC Fertilizer agar are more than 25 years old and Risk Assessment of all the installations was carried out in phased manner. Quantitative Risk Assessment study of all the plants at GSFC is done once again by M/s. PDIL and no major non-compliance is observed. A few recommendations made by them are being considered for implementation.

For up-gradation of fire fighting facilities to take care of any eventuality as well as extension of support to nearby industries, 06 nos. of new fire tenders have been purchased.

Q. HUMAN RESOURCES

Your Directors are happy to acknowledge that with the competent, motivated and cost conscious personnel, the Company made significant strides in its operations. The employees have been able to meet the challenges from time to time to improve upon the performance of its plants through efficiency, productivity and economy. Your Directors are happy to place on record their appreciation for the sincere efforts and contributions made by the employees of the Company.

Your directors wish to inform that the Company has introduced production, productivity & profitability linked incentive scheme for participation of employees towards higher productivity. Your company has recently concluded a wage settlement for the Vadodara Unit and an agreement to this effect has been signed with Employees Union.

R. ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from the Government of Gujarat, Government of India, Bank of Baroda and other Banks and agencies. Your Directors also wish to express their gratitude to the investors for their continued support and faith reposed in the Company.

For and on behalf of the Board

Sd/-

Place : Fertilizer agar A. K. Joti

Date : 30th June, 2012 Chairman

Mar 31, 2011

The Members,

The Directors are happy to present the 49th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2011.

A. FINANCIAL RESULTS (Rs. in Crores)

Particulars 2010-11 2009-10

1. Gross Sales 4925.49 4129.17

Less : Excise Duty Recovered 170.44 109.98

Net Sales 4755.05 4019.19

2. Other Income 101.20 113.01

3. Total Revenue 4856.25 4132.20

4. Less : Operating Expenses 3583.18 3569.51

5. Operating Profit 1273.07 562.69

6. Less : Interest 13.78 30.62

7. Gross Profit 1259.29 532.07

8. Less : Depreciation 146.40 140.93

9. Prior Period Adjustment 0.44 2.02

10. Profit before taxes 1112.45 389.12

11. Taxation

Current Tax 308.34 156.46

Deferred Tax (net) 54.62 (21.93)

Wealth Tax 0.12 0.12

12. Profit after taxes 749.37 254.47

13. Balance brought forward from last year 90.41 47.75

14. Amount available for appropriations 839.78 302.22

15. Out of which, your Directors have proposed appropriation and transfer as under :

a) Proposed Dividend on Equity shares 55.79 35.86

b) Tax on Proposed Dividend 9.05 5.96

c) General Reserve 640.00 170.00

16. Leaving a balance in the Profit & Loss Account 134.94 90.40

B. OPERATIONAL PERFORMANCE

It is heartening to report that for the F.Y. 2010-11, your Company has achieved highest ever Profit before Tax (PBT) and Net Profit (Profit After Tax). PBT has increased from Rs.389 Crores in 2009-10 to Rs.1112 Crores, registering an increase of 186%. Similarly, the Net profit was Rs.749 Crores which is almost three times the previous year's net profit of Rs.254 Crores.

During F.Y. 2010-11, there was constraint in availability of imported Phosphoric Acid at Sikka Unit, which affected production and availability of DAP. Inspite of this, the Company witnessed a rise of 18% in net sales. The net sales increased from Rs. 4019 Crores in 2009-10 to Rs.4755 Crores in 2010-11. The Company achieved higher sales turnover as a result of better price realization in both the business segments viz. Fertilizer and Industrial Products.

The EBIDTA for 2010-11 was 1273 Crores as compared to Rs.563 Crores in the previous F.Y. 2009-10, thus showing stride of 126%. Better margins in Fertilizer and Industrial Product segments have improved the overall EBIDTA margin from 14% to 26.77%. The interest cost has decreased from Rs.31 Crores in previous year to Rs.14 Crores in F.Y.2010-11.

C. DIVIDEND

Considering the excellent performance and profits for the year under review, your Directors are happy to recommend a dividend @70%, i.e. Rs.7/- per Equity Share (Previous Year - 45%, i.e. Rs. 4.50 per share) on 7,96,95,506 Equity Shares of Rs.10/- each for the financial year ended 31st March, 2011. The net outgo on account of Dividend shall be Rs.6483.69 Lacs including Corporate Dividend Tax. The Dividend shall be paid to those members, whose name shall appear on the Register of Members of the Company on the Book Closure Date i.e. on 03/09/2011.

D. CURRENT PERFORMANCE

Your Directors are pleased to report that during the First Quarter (Q1) of Financial Year (F.Y.) 2011-12 also, your Company has achieved Net Profit of Rs.142 Crores which is ever highest in the Q1 of any Financial Year ever since its inception. The EBIDTA margin has improved from 19% during Q1 of F.Y. 2010-11 to 25% during the Q1 of the current Financial Year. The above results are after making the provision for exceptional items aggregating Rs.52.63 Crores.

The operational performance of your Company during Q1 of the current Financial Year is encouraging when the fertilizer production increased from 3.58 Lac Tons during Q1 of 2010-11 to 3.77 Lac Tons during the Q1 of 2011-12. Similarly, the production of major Industrial Products viz. Caprolactam, Nylon-6, Melamine, etc., during the same period, remained above the capacity levels and when compared, it is higher than the production of the corresponding period of the previous Financial Year. The Net Sales of your Company during the Q1 of F.Y. 2011-12 is Rs.1208 Crores which is higher by Rs.141 Crores (up by 13%) as compared to the Net Sales of Rs.1067 Crores during Q1 of F.Y. 2010-11. The sales price of major Industrial Products like Caprolactam, Melamine and Nylon-6 were tuned in line with international prices. Similarly, price realization in Fertilizer segment was also higher. The prices of major raw materials showed a rising trend, thus affecting the cost of production.

E. LISTING OF SHARES & DEPOSITORIES

The Equity Shares of your Company are listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Ltd. (NSE). As approved by the shareholders, an application for voluntary delisting of Equity Shares from Calcutta Stock Exchange Association Ltd., Kolkatta, was made, however, the approval for delisting is still awaited.

Your Directors wish to state that the Equity Shares of your Company are compulsorily traded in dematerialized form w.e.f. 26/06/2000. Presently, 58.37% of shares is held in electronic/dematerialised form.

F. REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT TO SHAREHOLDERS

Your Company has complied with all the mandatory requirements of Corporate Governance norms as mandated by Clause 49 of the Listing Agreement with Stock Exchanges. A separate report on Corporate Governance together with the Certificate of M/s. S. Samdani & Associates, Company Secretaries, Vadodara forms part of this Annual Report. The Management Discussion & Analysis report also forms part of this Annual Report.

G. FIXED DEPOSITS

During the year 2010-11, your Company has not accepted / renewed any Fixed Deposit. Your Directors wish to report that there are 456 Fixed Deposits aggregating Rs.60.38 Lacs which have remained unclaimed by Depositors, as on 31st March, 2011. Letters reminding them to exercise their option to seek repayment have been sent. Upto and including the date of this report, 86 deposits amounting to Rs. 13.82 Lacs have been repaid.

During the year, the Company has transferred a sum of Rs.13.53 Lacs being the unclaimed deposits and interest amount thereon to the Investors' Education and Protection Fund as required in terms of Section 205C of the Companies Act, 1956.

H. INSURANCE

All the properties and insurable interests of the Company, including the buildings, plant & machinery and stocks have been adequately insured. Also, as required under the Public Liability Insurance Act, 1991, your Company has taken all the necessary insurance cover.

I. PROJECTS UNDER CLEAN DEVELOPMENT MECHANISM (CDM)

Your Company has taken up various projects for reducing emission and energy saving. These projects have also been submitted for validation and registration under the Clean Development Mechanism. This would help your Company to earn Carbon Credit.

Your Directors are happy to inform that a Project on fossil fuel change-over and Wind Mill Power Project of 10 MW have already got registered under CDM, while the Wind Mill Projects of 12 MW, 18 MW and 33 MW are under registration process for availing carbon credit.

J. EXPANSION & DIVERSIFICATION

Your Company has taken up conversion of Ammonia-I Plant for production of Methanol based on technology from M/s. Haldor Topsoe, Denmark. M/s Project & Development India Ltd. have been appointed as consultants for carrying out detailed engineering work for the project. The project is under execution and it is slated to be commissioned in the last quarter of F.Y. 2011-12. Your Company has also taken up modernization of Cyclohexanone unit at Vadodara.

Your Company has participated in a strategic Joint Venture with Tunisian Indian Fertilizers (TIFERT) in Tunisia with a view to ensure consistent supply of Phosphoric Acid for optimized running of its DAP Plant at Sikka. The Project is slightly delayed due to political turmoil in Tunisia and it is now expected to be commissioned by the last quarter of F.Y.2011-12.

Your Company has been conscious of the development of green technology and with a view to translate this into a reality; it has commissioned its first 10 MW Wind Mill Power Project at Kutch in March 2008 and added another 12 MW Wind Mill Power Project in January 2009 in Kutch District. Your Company has subsequently implemented 18 MW Wind Power Project in Porbandar Dist. and 33 MW Wind Power Project in Kutch Dist. These projects are working satisfactorily and are meeting the Company's captive power requirements as well as selling surplus power to State Grid. Encouraged by the performance of these Wind Mill Projects, the incentives available from the Government and the global need of green energy, your Company is in the process of implementing additional 50.4 MW Wind Power capacity in Rajkot and Surendranagar Districts of Gujarat.

Your Directors also wish to inform that capacity addition of Nylon-6 plant by another 15000 MTPA is planned at Baroda and the technology tie-up for the same is under progress.

Your Directors are pleased to inform that your Company has ambitious plan for setting up larger capacity plants at Dahej replicating its existing Baroda Unit for which land acquisition and technology search activities are progressing well.

K. INFORMATION REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO AND PARTICULARS OF EMPLOYEES ETC.

Information as required under Section 217(1)(e) of the Companies Act, 1956, read with Rule (2) of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure "A" forming part of this report. The Company does not have any employee falling within the purview of Section 217(2A) of the Companies Act, 1956 and hence such Particulars of Employees are not included.

L. DIRECTORS

- Managing Director :

With effect from 13/07/2011 Shri Atanu Chakraborty, IAS has been appointed as Managing Director of the Company in place of Shri H.V. Patel, IAS. Accordingly, a resolution relating to his appointment is placed for your approval. Your Directors place on record their appreciation for the dynamic and vibrant leadership provided by Shri H.V. Patel, IAS during his tenure as Managing Director of the Company.

- Change in Directors :

Pursuant to the provisions of Section 255 & 256 of the Companies Act, 1956, Shri D.C. Anjaria and Prof. Vasant P. Gandhi shall be liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment.

The appropriate resolutions for appointment/reappointment of Directors are placed for the approval of shareholders.

Your Directors also take this opportunity to welcome Shri Atanu Chakraborty, IAS the new Managing Director of the Company.

M. DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm that:

i) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and that no material departures have been made from the same;

ii) The appropriate accounting policies have been selected and applied consistently and judgments & estimates have been made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2011 and of the profit of the Company for the period from 1st April, 2010 to 31st March, 2011;

iii) 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) The Annual Accounts have been prepared on a "Going Concern" basis.

N. AUDITORS

Your Directors wish to inform that as on the date of writing of this report, the provisions of Section 619-B of the Companies Act, 1956 does not apply to your Company and hence the appointment and fixation of remuneration of Statutory Auditors of the Company for Financial Year 2011-12 shall be done by the Shareholders at the ensuing Annual General Meeting. The suitable resolution/s to that effect has been included in the notice convening the said meeting.

Your Directors would further like to mention that the provisions of the said Section 619-B is not applicable w.e.f. quarter ended 30th September, 2010 due to the reason that the shareholding of specified shareholders having gone down below the threshold limits and hence the CAG has not conducted the supplementary audit of accounts for the year under review.

Your Directors further state that as on the date of writing of this report, provisions of Section 619-B do not apply to the Company and accordingly the resolution for appointment and fixation of remuneration of the Statutory Auditors is proposed.

However, as a matter of abundant precaution, parallely your Directors propose a resolution regarding authorization for fixation of remuneration etc. to the Statutory Auditors, should the provisions of Section 619-B apply before the date of ensuing Annual General Meeting.

Your Directors also recommend the approval of Resolutions for appointment and/or fixation of remuneration to the Statutory Auditors/ Branch Auditors for the F.Y. 2011-12 as the case may be.

Pursuant to the directive from the Ministry of Corporate Affairs regarding appointment of Cost Auditor, M/s Diwanji & Associates, Cost Accountants, Vadodara have been appointed as the Cost Auditor for Fertilizers, Chemicals & Nylon Products of the Company for the Financial Year 2011-12. The approval of the Central Government for the said appointment is received. The Cost Auditor for the F.Y. 2009-10 was also M/s Diwanji & Associates, Cost Accountants, Vadodara and the Cost Audit Report was filed on 24.09.2010 (i.e. three days before the stipulated date of 27.09.2010). W.e.f. F.Y. 2011-12, the Ministry has directed to carry out the Cost Audit for the Wind Mill Power Projects also and accordingly M/s. Diwanji & Associates, Cost Accountants, Vadodara have been appointed as Cost Auditors. The necessary application in this regard is being made to the Central Government.

Your Company has also appointed M/s Haribhakti & Co., Chartered Accountants, Mumbai as Internal Auditors for carrying out the Internal Audit of its Baroda Unit and Sikka Unit. M/s K.N.Mehta & Co., Chartered Accountants, Vadodara and M/s Parikh Mehta & Associates, Chartered Accountants, Vadodara have been appointed as Internal Auditors for the Company's Polymers and Fibre Units respectively.

O. AUDITORS' REPORT

With regard to observations of Statutory Auditors contained in their Report, the Company has provided clarifications in Schedule 22 "Notes on Accounts".

P. ENVIRONMENTAL PROTECTION

Your Company holds the valid Consolidated Consent & Authorization from Gujarat Pollution Control Board and has complied with all the relevant statutory requirements. The renewal application for the same has been submitted and is under process.

Your Company has implemented a scheme for 100% utilization of treated sewage water for gardening purpose in February 2011.

Your Directors are pleased to inform that conservation, protection & promotion of clean and green environment is of vital concern in all facets of its business. As a part of Environment Management System, our conscious efforts are on towards waste minimization, recycling and conservation of natural resources to the maximum possible extent for the protection of environment. The Fertilizer Group of plants has maintained zero process effluent discharge system. The revamping of our Effluent Treatment Plants is in progress for enhancing its treatment capacity.

Your Company is continuously looking for new ways for conservation of natural resources (water, energy and raw materials) and wastes minimization for the protection of environment. The multifarious eco-friendly initiatives adopted by your Company include:-

- Implementing energy conservation schemes.

- Reducing the use of natural resources like fuel, water etc.

- Promoting the use of alternative fuels and materials.

- Tree plantation campaigns.

- Awareness programs for employees at all levels and for community.

- Complying with statutory requirements as applicable from time to time in letter and spirit.

The gaseous emission generated through different processes from plants is maintained well within the permissible limit through sophisticated Air Pollution Control Devices and the scrubbing liquor emanating from the plants are used for recovering important resources. Your Company is also going for installation of GAS Detectors in different plants and Ambient Air Monitoring Stations in four directions in the premises for continuous monitoring of gaseous pollutants.

Majority of hazardous solid wastes are sold to recyclers authorized by the Pollution Control Board and the remaining solid wastes are disposed off at Pollution Control Board approved facilities.

During the year under review, your Company was conferred with the prestigious "Gujarat State Safety Award 2009" a Certificate of Honor from Gujarat Safety Council and Director Industrial Safety & Health for achieving more than 30 Lacs million man-hours without any accident among Category- 1 Group A Industries.

External statutory audit for Safety & Health was conducted by British Safety Council for all the four Units during Nov.-Dec.2010.

Your Company has obtained BS EN 16001:2009 Energy Management System Certification in July, 2010. This system will help your Company to improve energy performance including energy efficiency. It will also lead to reduction in energy cost and Green House Gases emission through systematic management of energy.

Your Company is also conscious about the environment and the ecological balance and is promoting horticultural activities. It has taken initiative to make GSFC greener by planting large number of quality trees such as Banyan, Pipal and Neem, thus also supporting the initiative of the Govt. of Gujarat in this direction.

Q. HUMAN RESOURCES

Your Directors are happy to acknowledge that with the competent, motivated and cost conscious personnel, the Company made significant strides in its operations. The employees have been able to meet the challenges from time to time to improve upon the performance of its plants through efficiency, productivity and economy. Your Directors are happy to place on record their appreciation for the sincere efforts and contributions made by the employees of the Company.

The pending issue of permanency of contract labours has been successfully resolved during the year. With a view to sensitizing the employees towards higher productivity, your Company has introduced a Production, Productivity & Profitability linked Incentive Scheme from F.Y. 2009-10 effective for three years and a settlement to this effect has been signed with the Employees' Union during the year.

The Company has also continued its endeavor to impart appropriate and relevant training to its employees at various levels with a view to prepare them to take up increased challenges that are ahead and to enhance their performance in the overall interest of the Company.

The industrial relations remained cordial during the year.

R. ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from the Government of Gujarat, Government of India, Bank of Baroda and other Banks and agencies. Your Directors also wish to express their gratitude to the investors for their continued support and faith reposed in the Company.

For and on behalf of the Board

Sd/-

Place : Fertilizernagar A. K. Joti

Date : 28th July, 2011 Chairman

Mar 31, 2010

The Directors are happy to present the 48th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2010.

A. FINANCIAL RESULTS (Rs. in Crores)

Particulars 2009-10 2008-09

1. Gross Sales 4129.17 6019.19

Less : Excise Duty Recovered 109.98 138.39

Net Sales 4019.19 5880.80

2. Other Income 113.01 71.29

3. Total Revenue 4132.20 5952.09

4. Less : Operating Expenses 3569.51 5030.70

5. Operating Profit 562.69 921.39

6. Less : Interest 30.62 39.17

7. Gross Profit 532.07 882.22

8. Less : Depreciation 140.93 143.04

9. Prior Period Adjustment 2.02 (0.77)

10. Profit before taxes 389.12 739.95

11. Taxation

- Current Tax 156.46 330.37

- Deferred Tax (net) (21.93) (91.37)

- FBT - 1.50

- Wealth Tax 0.12 0.12

- Excess provision for taxation

written back - (0.03)

12. Profit after taxes 254.47 499.36

13. Balance brought forward from last year 47.75 47.35

14. Amount available for appropriations 302.22 546.71

15. Out of which, your

Directors have proposed appropriation and

transfer as under :

a) Proposed Dividend on Equity shares 35.86 35.86

b) Tax on Proposed Dividend 5.96 6.09

c) General Reserve 170.00 457.00

16. Leaving a balance in the Profit

& Loss Account 90.40 47.76

B. OPERATIONAL PERFORMANCE

Your Company has achieved new heights on the operational front. During the Financial Year (FY) 2009-10, your Company has achieved the ever highest Fertilizer production of 18.13 Lacs MTs surpassing the previous record production of 17.78 Lacs MTs. The production of major Industrial Products like Caprolactam and Ammonia have also touched the ever highest level of 81,151 MTs and 5.06 Lacs MTs respectively during the year surpassing the previous record production of 79,716 MTs and 4.71 Lacs MTs respectively. The production at the Polymers Unit is also higher as compared to the previous year. The higher production of Fertilizers and Industrial Products was due to better capacity utilization of plants, improved maintenance practices and adequate availability of raw materials and intermediates. The Fertilizer sales for the FY 2009-10 was 17.98 Lacs MTs as compared to 13.82 Lacs MTs during the FY 2008-09 thus registering 30% growth. Despite deficient rainfall in the home market of Gujarat and in the primary market of Maharashtra, Rajasthan and Madhya Pradesh, your Company has achieved ever highest sales volume of fertilizers thus surpassing the previous sales record of 16.59 lacs MTs. Your Directors are pleased to inform that inspite of global meltdown, your Company has been able to achieve higher sales volume of its major industrial products due to its aggressive marketing strategy.

In Fiscal Terms, the Net Sales was Rs. 4019.19 Crores as compared to Rs. 5880.80 Crores during the previous year. This was mainly due to lower prices of Phosphatic Fertilizers like DAP and APS. Similarly, the input prices of Phosphatic fertilizers were also lower which helped in maintaining 14% EBIDTA margin as against 15.67% during the previous year.

The Interest cost has gone down by 22% to Rs. 30.62 Crores in FY 2009-10 as compared to Rs. 39.17 Crores for FY 2008-09. The Profit Before Tax for the FY 2009-10 was Rs. 389.12 Crores as compared to Rs. 739.95 Crores for the FY 2008-09. The Profit After Tax was Rs. 254.47 Crores for the FY 2009-10 as compared to Rs. 499.36 Crores for FY 2008-09.

C. DIVIDEND

Your Directors are happy to recommend a Dividend of Rs. 4.50 per Equity Share (Previous Year Ã Rs. 4.50 per share) on 7,96,95,506 Equity Shares of Rs. 10/- each for the financial year ended 31st March, 2010. The net outgo on account of Dividend shall be Rs. 4181.94 Lacs including Corporate Dividend Tax. The Dividend shall be paid to those members, whose name shall appear on the Register of Members of the Company on the Book Closure Date i.e. on 11th September, 2010.

D. CURRENT PERFORMANCE

It is heartening to report that during the First Quarter of FY 2010-11, your Company has achieved highest ever Profit Before Tax (PBT) of Rs.160 Crores and Net Profit of Rs.109 Crores in the First Quarter of any financial year. (Previous highest Profit Before Tax Rs.105 Crores and Net Profit Rs.71 Crores in First Quarter of F. Y. 2008-09). The EBIDTA for the Q1 of FY 2010-11 is Rs.198 Crores as compared to Rs.82 Crores in Q-1 of the FY 2009-10 which is higher by 116 Crores(140%).

The sales price realization of major industrial products like Caprolactam and Nylon-6 increased in line with international prices. This, coupled with encouraging Nutrient Based Subsidy (NBS) policy for Potassic & Phosphatic fertilizers introduced by Deptt. of Fertilizers w.e.f. 01-04-10 helped in economic price realization in fertilizers also. However, the Net Sales of your Company during the first quarter of FY 2010-11 stood at Rs.1067 Crores which is lower by Rs.76 Crores as compared to the Net Sales of Rs.1143 Crores during 1st Quarter of FY 2009-10 mainly due to lower production on account of annual turn-around of the plants and consequently lower sales volume.

With the tapping of the cheaper source of working capital finance, the interest cost during the quarter stood at Rs.4 Crores as compared to Rs.9 Crores during corresponding quarter of the previous financial year.

E. LISTING OF SHARES & DEPOSITORIES

The Equity Shares of your Company are listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Ltd. (NSE). As approved by the shareholders, an application for voluntary delisting of Equity Shares from Calcutta Stock Exchange Association Ltd., Kolkatta, was made, however, the approval for delisting is still awaited.

Your Directors wish to state that the Equity Shares of your Company are compulsorily traded in dematerialized form w.e.f. 26/06/2000. Presently, 58.15% of shares are held in electronic/dematerialised form.

F. REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT TO SHAREHOLDERS

Your Company has complied with all the mandatory requirements of Corporate Governance norms as mandated by Clause 49 of the Listing Agreement with Stock Exchanges. A separate report on Corporate Governance together with the Certificate of M/s. S. Samdani & Associates, Company Secretaries, Vadodara forms part of this Annual Report. The Management Discussion and Analysis report also forms part of this Annual Report.

G. FIXED DEPOSITS

Your Directors wish to report that there are 787 fixed deposits aggregating Rs.111.72 Lacs which have remained unclaimed by Depositors, as on 31st March, 2010. Letters reminding them to exercise their option to seek repayment have been sent. Upto and including the date of this report, 451 deposits amounting to Rs. 69.72 Lacs have been repaid.

During the year, the Company has transferred a sum of Rs. 9.18 Lacs being the unclaimed deposits and interest amount thereon to the InvestorsÃ Education and Protection Fund as required in terms of Section 205C of the Companies Act, 1956.

H. INSURANCE

All the properties and insurable interests of the Company, including buildings, plant & machinery and stocks have been adequately insured. Also, as required under the Public Liability Insurance Act, 1991, your Company has taken all the necessary insurance cover.

I. PROJECTS UNDER CLEAN DEVELOPMENT MECHANISM (CDM)

Your Company has taken up various projects for reducing emission and energy saving. These projects have also been put up for validation and registration under the Clean Development Mechanism. This will help your Company to earn carbon credit under Clean Development Mechanism.

Your Directors are happy to inform that a project on fossil fuel change-over and Wind Mill Power Project of 10 MW have already got registered under CDM.

J. EXPANSION & DIVERSIFICATION

Your Company has taken up conversion of Ammonia-I Plant for production of Methanol based on technology from M/s. Haldor Topsoe, Denmark. M/s. Project & Development India Ltd. has been appointed as consultants for carrying out detailed engineering work for the project. The work relating to the basic design is completed and the detailed engineering and procurement activities for critical and long term delivery items have been taken up. The project is slated to be commissioned in the first quarter of financial year 2011-12. Your Company has also taken up Project of modernisation of Cyclohexanone unit situated at Vadodara.

Your Company has participated in a strategic joint venture Tunisian Indian Fertilizers (TIFERT) in Tunisia with a view to ensure consistent supply of Phosphoric Acid for optimized running of its DAP Plant at Sikka. This project is progressing satisfactorily. The financial closure for the project has been achieved in April, 2009 and the project is expected to go into main stream during the first quarter of Financial Year 2011-12. Further your Company has commissioned 1500 MTPY Urea Phosphate Fertilizer project, which will help in meeting the demand of Water Soluble Fertilizer for micro irrigation system.

Your Company has been conscious for the development of green technology and with a view to translate this into reality, it has commissioned its first 10 MW Wind Mill Power Project at Kutch in March 2008 and added another 12 MW Wind Mill Power Project at Kutch in January 2009. These projects are working satisfactorily and are meeting the Companys captive power requirements as well. Encouraged by the performance of these Wind Mill Power Projects, keeping in mind the additional requirement of power for future and the incentives available from the Government in this regard, your Company is implementing its third Wind Mill Power Project of 18 MW Capacity in the Porbandar District in Gujarat.

Your Directors are pleased to inform that your Companys ambitious plan for setting up larger capacity plants at Dahej replicating its existing Baroda Unit is gaining momentum.

K. INFORMATION REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO AND PARTICULARS OF EMPLOYEES ETC.

Information as required under Section 217(1)(e) of the Companies Act, 1956, read with Rule (2) of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure "A" forming part of this report. The Company did not have any employee falling within the purview of Section 217(2A) of the Companies Act, 1956 and hence Particulars of Employees are not included.

L. DIRECTORS

> Chairman :

Upon attaining superannuation, Shri D. Rajagopalan, IAS, retired from the services of Govt. of Gujarat on 31-12-2009 and in his place Shri A. K. Joti, IAS, Chief Secretary to the Govt. of Gujarat has been appointed as Govt. Director and Chairman of the Company w.e.f. 19-02-2010. Your Directors place on record their deep sense of appreciation for the dynamic leadership, valuable contribution and the vision provided by Shri D. Rajagopalan, IAS towards the growth of the Company during his tenure as Chairman.

> Change in Directors :

Shri M. M. Srivastava, IAS, Additional Chief Secretary, Finance Department, Govt. of Gujarat, has been appointed as an Additional Director of the Company w.e.f. 29-10-2009. The Resolution for his appointment as Rotational Director is placed for your approval.

Shri D. J. Pandian, IAS, Principal Secretary, Energy & Petrochemicals Dept., Govt. of Gujarat has been appointed by the Govt. of Gujarat w.e.f. 21-01-2010, as Rotational Director in the vacancy caused due to transfer of Shri S. Jagadeesan, IAS as Managing Director, Sardar Sarovar Narmada Nigam Ltd.

Pursuant to the provisions of Sections 255 & 256 of the Companies Act, 1956, Shri Vijai Kapoor and Shri D. J. Pandian, IAS shall be liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment.

Your Directors place on record the valuable contributions made by Shri S. Jagadeesan, IAS during his tenure as Director of the Company.

The appropriate resolutions for re-appointment of Directors are placed for the approval of shareholders.

Your Directors also take this opportunity to welcome the new Directors on the Board of your Company.

M. DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm that:

i) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and that no material departures have been made from the same;

ii) The appropriate accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the profit of the Company for the period from 1st April, 2009 to 31st March, 2010;

iii) 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) The Annual Accounts have been prepared on a "Going Concern" basis.

N. AUDITORS

The provisions of Section 619B of the Companies Act, 1956 continue to apply to your Company. The Comptroller & Auditor General of India (CAG) has appointed M/s. S. C. Bapna & Associates, Chartered Accountants, Vadodara, for the Financial Year 2009-10 and M/s. Prakash Chandra Jain & Co., Chartered Accountants, Vadodara, for the Financial Year 2010-11 for carrying out audit of accounts of the Company at its Corporate Office, Sikka Unit and Baroda Fertilizernagar Plants. M/s Khedkar Shah & Soni, Chartered Accountants, Vadodara have been appointed as Branch Auditors for the audit of accounts of the CompanyÃs Polymers Unit and Fibre Unit for the Financial Year 2009-10 and 2010-11. Your Directors recommend the approval of Resolution for fixation of remuneration to the Statutory Auditors and Branch Auditors for the F.Y. 2010-11.

Pursuant to the directive from the Dept. of Company Affairs regarding appointment of Cost Auditor, M/s Diwanji & Associates, Cost Accountants, Vadodara have been appointed as the Cost Auditor for the Financial Year 2010-11. The approval of the Central Government for the said appointment has been received.

Your Company has also appointed M/s. Haribhakti & Co., Chartered Accountants, Mumbai as Internal Auditors for carrying out the Internal Audit for its Baroda Unit and Sikka Unit. M/s. K. N. Mehta & Co., Chartered Accountants, Vadodara and M/s. Parikh, Mehta & Associates, Chartered Accountants, Vadodara have been appointed as Internal Auditors for the CompanyÃs Fibre Unit and Polymers Unit respectively.

O. AUDITORS REPORT

With regard to observations of Statutory Auditors contained in their Report, the Company has provided clarifications in Schedule 22 "Notes on Accounts".

P. ENVIRONMENTAL PROTECTION

Your Directors wish to reiterate that GSFCÃs business strategies consciously factor in the conservation and prevention of the environment as its supreme goal. There is zero effluent discharge system for the process effluent emanating from the Fertilizer Group of Plants. Your Company has in place two full fledged Effluent Treatment Plants (ETP) and the treated effluents, conforming to Pollution Control Board norms, are discharged into sea through the channel of M/s. Effluent Channel Project Ltd. Your Company is also going for revamping of its Effluent Treatment Plants to increase their treatment capacity. Further the treated sewage arising from the CompanyÃs township is used as manure for the gardening and maintenance of green sports pavilion and massive tree plantation. Your Company has latest computerized ambient air monitoring station at the centre of the Complex which monitors the ambient air quality on continuous basis.

Your Directors are happy to inform that your Company has been conferred with "ICC Aditya Birla Award for Best Responsible Care Committed Company" for the year 2008, 1st prize in Fertilizer Sector in National Energy Conservation Awards - 2009 from Ministry of Power - GOI.

Your Directors are pleased to inform that your Company has won the Gold Trophy of "SCOPE Meritorious Award for Environmental Excellence & Sustainable Development" for the year 2008-09.

As a part of Environment Management System, our conscious efforts are on towards waste minimization, recycling and conservation of natural resources to the maximum possible extent for the protection of environment.

Apart from controlling pollution, your Company maintains 261 Acres of Green Belt Area within GSFC premises and this constitutes more than one third of its total land area. These green belts are the natural abode of variety of birds like peacocks, ducks etc. In the year 2009, your Company has planted around one Lac Banyan, Pipal and Neem trees as a part of its forestation drive. Your CompanyÃs encapsulated chalk heap which has been converted into a beautiful garden admeasuring about 14 Hectares is being well maintained.

Q. HUMAN RESOURCES

The strength of your Company lies in its team of competent and motivated personnel. This has made possible for your Company to make significant strides in all areas of its functioning. The Employees have from time to time taken up the challenge to improve upon the performance of its plants through efficiency, productivity and economy. Your Directors are happy to place on record their sincere appreciation for the unstinted efforts and contribution put in by the employees of the Company.

The Company has also continued its endeavor to impart appropriate and relevant training to its employees at various levels with a view to equip them to take up the challenges that are ahead and to enhance their performance in the overall interest of the Company.

The industrial relations remained cordial during the year.

R. ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from the Government of Gujarat, Government of India, Bank of Baroda and other Banks and agencies. Your Directors also wish to express their gratitude to the investors for their continued support and faith reposed in the Company.

For and on behalf of the Board

Sd/-

Place : Fertilizernagar A. K. Joti

Date :31st July, 2010 Chairman

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