Enter the first few characters of Company and click 'Go'

Directors Report of Gujarat Narmada Valley Fertilizers & Chemicals Ltd.

Mar 31, 2023

Your Directors have immense pleasure in presenting this 47^th Annual Report on the Company''s business and operations together with Audited Financial Statements (Standalone and Consolidated) for the Financial Year (FY) ended on 31^st March, 2023.

FINANCIAL RESULTS AND STATE OF THE COMPANY''S AFFAIRS

During the year under review, the Company achieved remarkable performance on operational and financial fronts. The Company established total eighty (80) new Records during the FY 2022-23, out of which forty four (44) Records were established in Production and thirty six (36) for Sale / Dispatch.

The Financial Highlights on Standalone basis are summarized, as follows:

('' Crores)
Particulars		Standalone
		2022-23	2021-22
Revenue from operations		10,227	8,642
Other Income		361	210
Total Income		10,588	8,852
Total Expenditure		8,348	6,259
Profit before Depreciation, Finance Cost and Tax		2,240	2,593
Depreciation and Amortisation		303	292
Finance Cost		5	3
Profit Before Tax		1,932	2,298
Tax Expense		468	594
Net Profit for the year	A	1,464	1,704
Re-measurement (loss)/gain on defined employee benefit plans	(Net of tax) B	(69)	15
Balance brought forward from previous year	D	4,075	2,481
Amount available for Appropriation	A B C D	5,470	4,200
Appropriations :
Dividend paid		155	125
Transferred to General Reserve		200	-
Surplus carried to Balance Sheet		5,115	4,075

COMPANY''S PERFORMANCE OVERVIEW1.0 Operational Performance:

The Company has achieved remarkable production performance during the FY 2022-23. Day to day Plant Operations were closely reviewed and optimised to maximize profit.

During the year, following Plants achieved over 100% capacity utilization level. Ammonia (6,79,535 MTs i.e. 152.53%), ASGP (3,69,823 MTs i.e. 100.06%), Urea (8,35,863 MTs i.e. 131.24%), Methyl Formate (33,650 MTs i.e. 147.59%), Formic Acid (25,461 MTs i.e. 254.61%), Acetic Acid (1,62,563 MTs i.e. 162.56%), Weak Nitric Acid-I (3,03,248 MTs i.e. 122.52%), Weak Nitric Acid-II (1,28,095 MTs i.e. 128.10%), CNA-III (49,890 MTs i.e. 100%), TDI-I (17,669 MTs i.e. 126.21%), MTD-I (14,436 MTs i.e. 122.30%), Ethyl Acetate (68,658 MTs i.e. 137.32%). During the year, strategic optimization of various Plant Operations and product mix had been done keeping in line with price of raw materials so as to achieve cost reduction in all aspects.

TDI-II Dahej operated for 258 days (on-stream days) during the year with capacity utilization of 74.65%. Yearly production of 37,322 MT has been achieved against target of 58,010 MT, which is lower mainly on account of market constraints, higher input cost amid global geopolitical situation and technical glitches faced in the Plant during the year. Annual shut down of the Plant was taken in July, 2022.

Anxiety was faced in SAC (Sulphuric Acid Concentration) plant as two failures of SA91 storage tank along with exchangers E31803 & E31802 occurred on 30.1 1.2022 and 04.01.2023 respectively, which were successfully overcome by in-house efforts and modifications which averted long shutdown of TDI-II Plant.

2.0 Financial Performance:

Your Directors are happy to share with you the highlights of Annual Financial Results (AFRs) achieved by your Company for the FY 2022-23 on Standalone basis.

The company reported highest ever revenue of '' 10,227 Crores; 18% more than previous highest reported revenue in last financial year which was a year of historic performance.

On the back of strong financials, the Board of Directors at its meeting held on 18^th May, 2023, Chaired by Shri Vipul Mittra, IAS has recommended dividend of 300% which is the highest ever dividend.

SALES1.0 Industrial Products:

The Chemical industry as a whole and our Industrial Products market witnessed trend towards normalisation during the FY 2022-23. In the previous year, most of our products attained historical highest prices. Overall there is slump in demand of various chemicals due to recession like situation particularly in Europe. In spite of such a situation, we could achieve ever highest annual sales for some of our main products. GNFC''s products have better resonance due to their application and use in different end use sectors. The sales volume of our top ten industrial products increased by 6% in FY 2022-23 compared to previous year.

2.0 Fertilizer Business:

During the FY 2022-23, your Company has achieved total sales of 6.39 Lakhs Metric Tonnes of Urea which was a little lower than the previous year (i.e. 6.64 Lakh Metric Tonnes). Sales of Nitrophosphate (20-20-0) stood at 1.28 Lakh Metric Tonnes, marginally higher to 1.20 Lakhs Metric Tonnes in the FY 2021-22. Decreased sales volume of Urea was mainly for maintaining production to the levels of re-assessed capacity i.e. 6.37 Lakh Metric Tonnes, to avoid loss in subsidy realization. Nitrophosphate was sold as per the availability. During the FY 2022-23, the Company could increase retail sales of Urea to 94,222 metric Tonnes from 84,355 metric Tonnes of FY 2021-22 through its own Narmada Khedut Sahay Kendras (NKSKs).

During the year, Trading Activities were also continued in Muriate of Potash (MoP), Di-Ammonium Phosphate (DAP), Ammonium Sulphate (AS), Single Super Phosphate (SSP) and City Compost. A total quantity of 31,018 Metric Tonnes of Fertilizers were sold during the FY 2022-23 against 16,824 Metric Tonnes sold in 2021 -22. Besides, GNFC sold non-bulks agri inputs worth '' 97.06 Lakh through NKSKs.

3.0 (n)Code Solutions - IT Division:

During the FY 2022-23, (n)Code Solutions - IT Division of the Company continued to provide IT services such as Digital Signature Certificates, PKI Solutions, e-Procurement and e-Auction services, Smart City/System Integration, Data Centre Operations, software/application development & support etc. Our commitment to innovation, excellence, and customer satisfaction helped us achieve growth in almost every business vertical.

(n)Code Solutions registered a Profit Before Tax (PBT) of '' 36 Crore for the FY 2022-23, an increase of ~50% from the previous year''s PBT of '' 24 Crore. Our total sales for the FY 2022-23 were '' 74 Crore compared to the previous year''s total sales of '' 73 Crore. (n) Code Solutions successfully managed all business and support activities with full client satisfaction.

(n)Code Solutions has also secured several prestigious projects, including the implementation of e-Passport initiative of the Government of India (GoI); "Ease of Doing Business" initiative for the Central Bureau of Narcotics (Ministry of Finance - Revenue Dept. GoI) to digitize business processes and promote ease of access and prompt service and development and implementation of an online system (''Coal Distribution Management System'') for distributing and allocating coal quota received from the Central Govt. for Gujarat Mineral Development Corporation (GMDC).

Looking ahead, our aspiration is to expand our reach across India and bring greater convenience to business through our comprehensive range of software solutions, including innovative products such as e-tender, e-Auction, Digital Solutions, integrated Mining solutions etc. By leveraging the latest digital technology, we are committed to providing our clients with the tools they need to succeed in today''s competitive marketplace.

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

DIVIDEND:

Keeping in view the Company''s performance for the FY 2022-23, long term growth strategy and to ensure that the Shareholders get sustained return on their investment, your Directors have recommended a Dividend of '' 30/- per share (@ 300%) on 15,54,18,783 Equity Shares of 10/- each fully paid up, subject to approval of Shareholders at the Annual General Meeting. On its approval, the Dividend payout will work out to '' 466.26 Crore. This amounts to 31.85% of the Net Profit of the Company.

APPROPRIATIONS:

Your Company has registered a Net Profit of '' 1,463.98 Crore for FY 2022-23. After deducting there from '' 68.79 Crore being the re-measurement loss on defined employee benefit plans and adding thereto '' 4,075.39 Crore being the balance of Statement of Profit & Loss brought forward from previous year, an amount of '' 5,470.58 Crore is available for appropriation. Out of this, '' 155.42 Crore is appropriated towards payment of Dividend of FY 2021 -22 and '' 200 Crore is transferred to General Reserve. The balance amount of '' 5,115.16 Crore is proposed to be carried to Balance Sheet.

TRANSFER TO RESERVES:

The Board of Directors has decided to transfer '' 500 Crore of profits of FY 2022-23 to General Reserve.

FERTILIZER INDUSTRY - GOVERNMENT POLICY:

Government Policy in respect of fertilizers pricing has not underwent any change during the FY 2022-23. However, Government has come up with following new directives aiming towards reforms.

Introduction of ''One Nation One Fertilizer (ONOF)'' in all fertilizers. After deliberations and discussions with the Industry, ONOF has been implemented in all fertilizers including Urea, DAP, MOP and NPK. It has begun with imported urea on 02.10.2022, indigenous Urea on 01.12.2022, DAP & NPK on 01.01.2023.

Dept. of Fertilizers (DoF) has started giving movement plans of Urea and other non-Urea fertilizers through a linear programme of RITES (Rail India Technical & Economic Service Limited). The objective is to avoid crisscross movement of fertilizers thereby saving primary freight cost.

As an another step, GoI has introduced ''Pradhan Mantri Krishi Samraddhi Kendra'' (PMKSK), which is being implemented across the country. All the fertilizers companies, including GNFC have been allotted 3.30 Lakh retails shops in India to convert as PMKSKs. The Govt. is looking to develop the retail shops as primary destination for advisory to the farmers besides offering agri services and all agri inputs under one roof.

Nutrient Based Subsidy (NBS) was announced on six monthly basis during 2022-23. For GNFC''s Nitrophosphate the NBS Subsidy was '' 32,940 per Metric Tonnes in first half and '' 32,991 per Metric Tonnes during second half of the year.

On-Going Projects / New Projects/ Revamp Schemes:

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

1. Formic Acid Capacity Enhancement:

GNFC implemented Formic Acid (FA) capacity enhancement Project to increase the capacity by 20 MTPD (6,800 MT per annum). Project commissioned in April, 2022 & required designed capacity achieved in June, 2022.

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

With the increase in captive consumption of CNA for TDI, market share of the Company is reducing. Hence, the Company has successfully commissioned CNA-IV expansion Project with a capacity of 150 MTPD, in July, 2023.

3. 04 MW Solar Power Plant Project:

To fulfil Renewable Purchase Obligation (RPO), your Company is implementing four 04 MW Solar Power Project at Charanka Solar Park. The Project will be completed by First Quarter of FY 2023-24.

4. Ammonia Plant revamp

At present, your Company is producing about 1,950 MTPD Ammonia from both fuel oil and natural gas route after installation of S-300 revamp. It is planned to increase the Ammonia production capacity from 1,950 MTPD to 2,100 MTPD by installation of Ammonia Make-up Gas Convertor Loop [AMUGL], in existing Ammonia Synthesis Loop (ASL). The Project will also increase the reliability of existing ASL.

This will increase Ammonia production by 50,000 MT per annum which will be consumed for new Weak Nitric Acid and Ammonium Nitrate Plants. Agreement has been signed with M/s. Haldor Topsoe, Denmark, the Technology Licensor, to implement the Project in EPC mode.

5. Coal based Captive Co-generation Power Plant at Dahej:

The Company has set up 100 MT/Hr. capacity gas based Boiler at TDI - II Dahej Complex to meet captive steam requirement, while power is being sourced from DGVCL Grid. There is large variation in gas prices.

Approval from the Board of Directors for implementation of Coal based Captive Co-Generation Power Plant (CCPP) Project having a capacity to produce 18 MW Power and 150 MT/ Hr. Steam was availed in October, 2022, in order to reduce cost of steam and Power and to improve reliability of TDI-II Dahej Plant. LSTK Contract has been awarded to M/s Thyssenkrupp Industries India Pvt. Ltd., in October, 2022. The Project is expected to be completed by April, 2025.

6. Weak Nitric Acid-III (WNA-III) and Ammonium Nitrate-II (AN-II) Project:

Your Company is planning to expand its capacity of WNA and AN considering future market growth. Two separate NITs for WNA-III with capacity of 600 MTPD and AN-II with capacity of 480 MTPD have been floated. After consumption of WNA in

AN-II, surplus WNA will be sold out in the domestic market. AN-II will have facility to produce both Low Density Ammonium Nitrate (LDAN) and High Density Ammonium Nitrate (HDAN), being used mainly in explosives manufacturing.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Sections 134(3)(c) read with 134(5) of the Companies Act, 2013, your Directors confirm thatâ

(i) in the preparation of Annual Accounts for the financial year ended 31^st March, 2023, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;

(ii) they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at end of the financial year on 31^st March, 2023 and of the profit of the Company for that period;

(iii) they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, if any;

(iv) they had prepared Annual Accounts on a going concern basis;

(v) they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

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

DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES:

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

CONSOLIDATED FINANCIAL STATEMENTS:

Pursuant to Section 129(3) of the Act, read with Regulation 33 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 [the SEBI Listing Regulations, 2015], as amended, the Company has prepared Consolidated Financial Statements in respect of Associate Company GGRCL for the FY 2022-23 and forms part of this Annual Report.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

The Company has not made any investment in other bodies corporate or given any Loan or Guarantee or provided any Security in connection with loan to any other body corporate or person during the FY 2022-23.

PARTICULARS OF CONTRACT OR ARRANGEMENT MADE WITH RELATED PARTY:

The Policy for Related Party Transactions (RPTs) deals with review and approval of RPTs and the same is available on the Company''s Website at web link https://www.gnfc.in/wp-content/uploads/2021/04/Related-Party-Transactions-Policy.pdf. The Audit Committee has granted Omnibus approval for RPTs, which are routine and repetitive in nature, based on the criteria approved by the Board of Directors within the overall framework of the said Policy. All RPTs under the Omnibus approval are placed before the Audit Committee periodically for its review and approval.

The Company has not entered into any contract or arrangement with related parties, as referred to in Section 188(1) of the Act during the FY 2022-23. Hence, the disclosure of RPTs in Form AOC-2, as required under Section 134(3)(h) of the Act, is not applicable to your Company. Details of Related Party as per Ind AS-24 are given in Note No. 37 to the Standalone Financial Statements.

Requisite details on RPTs have also been furnished in the ''Report on Corporate Governance'' forming part of this Report. MEETINGS OF THE BOARD AND COMMITTEES THEREOF:

(i) Board Meeting:

Five (5) Meetings of the Board of Directors were held during the year.

(ii) Committees of the Board:

Presently, there are seven Committees of the Board as follows:

1. Audit Committee (AC);

2. Stakeholders'' Relationship Committee (SRC);

3. Nomination and Remuneration Committee (NRC);

4. Corporate Social Responsibility (CSR) Committee;

5. Risk Management Committee (RMC);

6. Project Committee (PC); and;

7. Human Resource Development Committee (HRDC).

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

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

REMUNERATION POLICY FOR DIRECTORS / KEY MANAGERIAL PERSONNEL / SENIOR MANAGEMENT AND OTHER EMPLOYEES:

The Company has formulated a Nomination, Remuneration & Evaluation Policy as required under Section 178 of the Act and SEBI (LODR) Regulations, 2015 and the same is available on the Company''s website at web link https://www.gnfc.in/wp-content/uploads/2021/04/GNFC-NRC-Policy_11815.pdf. The details of remuneration paid to Directors / Key Managerial Personnel / Senior Management and other employees are furnished in the Report on Corporate Governance, forming part of this Report.

PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

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

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNELChairman of the Company:

Shri Vipul Mittra, IAS, was nominated and appointed as Chairman of the Company by the Govt. of Gujarat (GoG), w.e.f. 31.01.2023.

Retirement of Director(s) by Rotation:

In terms of Section 152 of the Act, Shri Mukesh Puri, IAS will retire by rotation at this AGM and being eligible, offers himself for re-appointment.

Declaration by Independent Directors:

In terms of Section 149(7) of the Act and the SEBI Listing Regulations, 2015, the Company has received necessary Declarations for the FY 2023-24, from all Independent Directors, to the effect that they meet with the criteria of independence as laid down in Section 149(6) of the Act and Regulation 16(1) (b) of the SEBI Listing Regulations, 2015, as amended.

Change in Directorate:

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

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

INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

The IEPF Rules, mandate Companies to transfer Shares of Members whose Dividends remain unpaid / unclaimed for a continuous period of seven years to the Demat account of the IEPF Authority. The Sahreholders whose Dividend / Shares are transferred to the IEPF Authority can claim their shares / dividend from the Authority.

In terms of the provisions of IEPF Rules / Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001, the Company did not pay any Dividend for the FY 2014-15, thus there was no Unpaid/ Unclaimed Dividend and no Shares were liable to be transferred to IEPF during the FY 2022-23.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

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

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM AND ITS ADEQUACY:

The Company has in place Risk Management Policy (RMP). Under this Policy, various risks pertaining to Operations & Maintenance of the Plants, financial and other organizational risks are assessed, evaluated and continuously monitored for taking effective steps for its mitigation.

In compliance with Regulation 21 of the SEBI Listing (Amendment) Regulations, 2018, the Board of Directors has constituted a Risk Management Committee (RMC) defining its Terms of Reference (ToR), in its Meeting held on 11th February, 2019. The details as to the constitution of RMC and its major ToR included in the "Report on Corporate Governance" are forming part of this Report.

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

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

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3) (a) of the Act, the Draft Annual Return in Form MGT-7 as on March 31,2023 is available on the Company''s website at https://www.gnfc.in/statistics-annual-report/#1661838618831 -f3392cb8-b234

CORPORATE SOCIAL RESPONSIBILITY (CSR):

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

The Company''s CSR Policy is available on the Website of the Company at web link https://www.gnfc.in/wp-content/uploads/ 2021/04/CSR-Policy-Revised_17-05-2021.PDF

As per the provisions of Section 135 of the Act, the statutory amount (i.e. 2% of the average net profits of the last three Financial Years) that was required to be spent by the Company for various CSR Activities/Projects, during the FY 2022-23, was '' 24.20 Crore. The Company had actually spent '' 24.27 Crore towards various CSR Activities/Projects during the FY 2022-23. During the FY 2022-23, no amount (being excess spending of previous FY) was available for set off in pursuance of sub-rule (3) of rule 7 of the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Pursuant to Rule 12 of Companies (Accounts) Rules, 2014, the Company has filed statutory Form CSR-2 for FY 2021-22 on 28.03.2023.

Annual Report on CSR activities as required under Rule 9 of the Companies (Accounts) Rules, 2014 read with Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed as Annexure - A to this Report.

VIGIL MECHANISM-CUM-WHISTLE BLOWER POLICY:

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

SIGNIFICANT AND MATERIAL ORDERS:

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

MANAGEMENT DISCUSSION & ANALYSIS AND REPORT ON CORPORATE GOVERNANCE:

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

â¢ Declaration by Managing Director regarding compliance of the Company''s Code of Conduct by the Board Members and Senior Management Personnel.

â¢ Certificate by Practicing Company Secretary certifying:

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

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

BUSINESS REPONSIBILITY AND SUSTAINABILITY REPORT:

Business Responsibility and Sustainability Report (BRSR) is based on Environment, Social and Governance (ESG) norms and Sustainable Development Goals. Your Company has strived to actualize the principles of responsible business conduct in letter and spirit and is conducting its Business in a manner that creates shared values for all Stakeholders whilst aiming to achieve the best targets on ESG fronts.

Your Company has adopted to report under the new reporting guidelines prescribed by the SEBI for FY 2022-23. The report is appended as Annexure - B, forming part of this Report.

INFORMATION REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

As required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, requisite information on conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is furnished in the enclosed Annexure - C, forming part of this Report.

PARTICULARS OF EMPLOYEES AND REMUNERATION:

There were 2,273 permanent employees of the Company as of 31st March, 2023. The disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (the ''Rules'') have been appended as Annexure - D, forming part of this Report. Details of employee remuneration as required under the provisions of Section 197 of the Act and Rule 5(2) and 5(3) of the Rules are available to any Shareholder for inspection on request. If any Shareholder is interested in obtaining a copy thereof, such Shareholder may write to the Company Secretary, where upon a copy would be sent through email only.

AUDITORS AND AUDITORS'' REPORT:

Pursuant to the provisions of Section 139 and other applicable provisions of the Act and relevant Rules made there under, the Shareholders of the Company had at their 45th AGM held on 23rd September, 2021 appointed M/s Suresh Surana & Associates LLP, Mumbai, Chartered Accountants, a Member firm of RSM International as Statutory Auditors of the Company for a term of Five (5) consecutive years, until conclusion of the forthcoming 50th AGM to be held in the year 2026, on such remuneration as may be determined by the Board of Directors, based on the recommendation of the Audit Committee plus certification fees, applicable taxes and reasonable out of pocket expenses actually incurred by them during the course of Audit.

Notes to Financial Statements (Standalone and Consolidated) forming part of Audited Financial Statements for FY 2022-23 are self- explanatory and need no further explanation. The Auditors'' Reports on Audited Financial Statements (Standalone and Consolidated) does not contain any Modified Opinions.

COST AUDITOR:

As per Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Company is required to prepare, maintain as well as have the audit of its cost records conducted by a Cost Accountant and accordingly, it has made and maintained such cost accounts and records. The Board of Directors, on the recommendation of the Audit Committee, has appointed Mr. R K Patel, Proprietor of M/s R K Patel, Vadodara, having FRN No. 100180 as the Cost Auditor of the Company for the FY 2023-24 at a remuneration of '' 1,00,000/- ('' One Lakh) p.a. plus out of pocket expenses and statutory levies.

Mr. R K Patel, Proprietor of M/s R K Patel, Vadodara, have confirmed that they are free from disqualification specified under Section 141 (3) and proviso to Section 148(3) read with Section 141 (4) of the Act and that the appointment meets the requirements of the Act. They have further confirmed their independent status and an arm''s length relationship with the Company.

The remuneration payable to the Cost Auditor is required to be placed before the Shareholders in General Meeting for ratification. Accordingly, a resolution seeking Shareholders'' ratification for the remuneration payable to Mr. R K Patel, Proprietor of M/s R K Patel, Vadodara, forms part of the Notice of 47^th AGM, forming part of this Annual Report.

The Company had e-filed the Cost Audit Report for the FY 2021-22 with the Ministry of Corporate Affairs (Cost Audit Branch), on 06^th September, 2022. The due date of filing the said Report was 27^th September, 2022.

SECRETARIAL AUDITOR:

In pursuance of Section 204 of the Act and the Rules made thereunder, the Board of Directors, in its Meeting held on 04^th February, 2021, appointed CS Shalin Patel, Practicing Company Secretary, Vadodara as Secretarial Auditor for three years

from FY 2020-21 to FY 2022-23. Due to some circumstances, he could not continue his term up to FY 2022-23 as Secretarial Auditor of the Company. In order to fill the vacancy, the Board of Directors, in its meeting held on 10^th November, 2022 appointed CS J.J. Gandhi, Practicing Company Secretary of M/s. J. J. Gandhi & Co., Vadodara, as Secretarial Auditor for the FY 2022-23. The Secretarial Audit Report in Form MR-3 in respect of Secretarial Audit work carried out by him for the FY 2022-23 is enclosed at Annexure - E, forming part of this Report. The said Report does not contain any qualification, reservation or adverse remark.

DIVIDEND DISTRIBUTION POLICY:

As per Regulation 43A of the SEBI Listing Regulations, 2015, Dividend Distribution Policy of the Company inter-alia, set-out the various parameters and circumstances that are to be taken into account while determining the distribution of Dividend to the Shareholders and / or retaining profits by the Company. The said Policy is enclosed at Annexure - F, forming part of this Report and the same is also available on the Company''s website at web link https://www.gnfc.in/wp-content/uploads/2021/04/Dividend-Distribution-Policy.pdf

DISCLOSURE ON COMPLIANCE OF SECRETARIAL STANDARDS:

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI), New Delhi, and approved by the Central Government.

DETAILS OF FRAUDS, IF ANY, REPORTED BY THE AUDITORS:

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

FIXED DEPOSITS:

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

INSURANCE:

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

INDUSTRIAL RELATIONS:

The Industrial Relations within the Company remained cordial and harmonious throughout the year It has helped the Company to achieve satisfactory performance on Operational and Financial fronts and in achieving targets.

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

ACKNOWLEDGEMENTS:

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

For and on behalf of the Board of Directors,Shri Vipul Mittra, IAS

Chairman

Place: Gandhinagar DIN: 03108280

Date: 29^th July, 2023

Mar 31, 2022

Your Directors have immense pleasure in presenting this 46^th Annual Report on the Company''s business and operations together with Audited Financial Statements (Standalone and Consolidated) for the Financial Year (FY) ended on 31^st March, 2022.

FINANCIAL RESULTS AND STATE OF COMPANY''S AFFAIRS

During the year under review, the Company achieved remarkable performance on operational and financial fronts. The Company established total 110 new Records during FY 2021-22, out of which 55 Records were established in Production and 55 Records for Sale / Dispatch.

The Financial Highlights on Standalone basis are summarized below:

('' Crores)
Particulars		Standalone
		2021-22	2020-21
Income from operations		8,642	5,129
Other Income		209	237
Total Income		8,851	5,366
Total Expenditure		6,258	4,126
Profit before Depreciation, Finance Cost and Tax		2,593	1,240
Depreciation		292	272
Finance Cost		3	20
Profit Before Tax		2,298	948
Tax Expense		594	259
Net Profit for the year	A	1,704	689
Re-measurement of Gain on defined employee benefit plans (Net of tax)	B	15	11
Transferred From Other comprehensive income	C	-	(61)
Balance brought forward from previous year	D	2,481	1,920
Amount available for Appropriation	A B C D	4,200	2,559
Appropriations :
Dividend paid		125	78
Surplus carried to Balance Sheet		4,075	2,481

COMPANY''S PERFORMANCE OVERVIEW1.0 Operational Performance:

The Company has achieved remarkable production performance during FY 2021-22, in spite of annual shutdown of plants from 1^st April 2021 to 25^th April 2021. Day to day plant operations were closely reviewed and plant operations were adjusted accordingly, to maximize profit.

During the year, following plants achieved over 100% capacity utilization level. Ammonia (6,67,312 MTs, i.e. 149.79%), ASGP (3,82,555 MTs, i.e. 103.51%), Urea (8,19,024 MTs. i.e 128.60%), Methyl Formate (28,445 MTs, i.e. 124.76%), Formic Acid (20,881 MTs, i.e 208.81%), Acetic Acid (1,57,058 MTs. i.e 157.06%), Weak Nitric Acid-I (3,02,002 MTs, i.e 122.02%), Weak Nitric Acid-II (1,24,098 MTs, i.e. 124.10%), Concentrated Nitric Acid-I (33,435 MTs, i.e. 101.32%), Concentrated Nitric Acid-II (34,450 MTs, i.e. 104.39%), Concentrated Nitric Acid-III (53,528 MTs, i.e. 107.06%), Aniline (39,662 MTs. i.e. 113.32%), Nitrobenzene (61,998 MTs, i.e. 131.21%), TDI-I (18,338 MTs, i.e. 130.99%), Ethyl Acetate (65,725 MTs, i.e. 131.45%). During the year, strategic optimization of various plant operations had been done keeping in line with prices of raw materials so as to achieve cost reduction in all aspects.

TDI-II Dahej achieved production of 34,128 MTs with lower capacity utilization (68.26%) due to market constraints followed by increase in prices of raw material disturbing the cost economics of TDI amid global geopolitical events. Technical glitches were faced in plant during February to March, 2022.

2.0 Financial Performance:

Your Directors are happy to share with you the highlights of Annual Financial Results (AFRs) achieved by your Company for the FY 2021-22 on Standalone basis.

FY 2021-22 has been the year of unprecedented revenue and profits where the Company has delivered ever highest annual Revenue and Profits in its history of 46 years.

On YoY basis, the operational revenue at '' 8,642/- crores and PBT at '' 2,298/- crores of FY 2021-22 are 68% and 142% higher respectively than those of corresponding period of FY 2020-21.

The operational revenue at '' 8,642 crores is historical highest since the inception of the Company and marks 46% improvement over its previous highest ever revenue recorded in FY 2017-18. Similarly, the PBT at '' 2,298 crores is also the historical highest and marks 98% improvement over its previous recorded PBT in FY 2017-18.

From FY 2021-22, the Company has opted to avail the benefit of new income tax regime, which allows the Company to pay tax at lower rate (i.e. 25.17% instead of 34.94%). The effect of the same is given in FY 2021-22. However, the tax expense for FY 2020-21 was calculated at a higher rate under old tax regime.

SALES1.0 Industrial Products:

The whole industry was severally affected by the second wave of COVD-19 during April & May of the current Financial Year We could get significant recovery in Industrial Products sector in subsequent months. This was possible due to efficient product management, constant team efforts and prudent decision making. This was reflected in Company''s turnover of top ten Industrial Products in current Financial Year which is remarkably higher by 79% compared to FY 2020-21. The demand for Industrial Products has picked up rapidly from June, 2021 onward. The sales of our chemical products were better in current Financial Year compared to that of year FY 2020-21. The aggregate sales of industrial products in FY 2021-22 is 83% higher compared to that in FY 2020-21.

GNFC''s Industrial Products have better resonance because of their applications in different end use sectors. Even during such volatile times, the demand for Industrial Products has remained favorable. Prices for some of the products attained historical highest level and have sustained at that level. On the other side the foremost challenge for the Industrial Product sector is its dependence on import of key basic inputs like Natural Gas (NG). In recent times NG price have witnessed very unusual spurt in prices.

2.0 Fertilizer Business:

Your Company performed reasonably well in fertilizers business during FY 2021-22. The Company achieved total sales of 6.64 Lakhs MTs of Urea which was a little higher than the previous year (i.e. 6.57 Lakhs MTs). Sales of Ammonium Nitro

Phosphate (ANP) during FY 2021-22 was 1.20 Lakhs MTs as compared to 1.78 Lakhs MTs in FY 2020-21 i.e. 33% lower. Decreased sales volume of ANP was mainly due to lesser availability for sale as well as diversion of resources for manufacturing Ammonium Nitrate Melt, in the larger interest of the country. The Company could increase retail sales of Urea & ANP by selling 84,355 MTs (as against 42,600 MTs of FY 2020-21) through Company''s own Narmada Khedut Sahay Kendras (NKSKs).

During the year, Trading Activities were also continued in Muriate of Potash (MoP), Di-Ammonium Phosphate (DAP), Ammonium Sulphate (AS), Single Super Phosphate (SSP) and City Compost. Total 16,874 MTs of Fertilizers were sold as a part of trading activities as against 13,393 MTs of previous year. Besides, GNFC introduced non-bulks agri inputs during FY 2021-22 and registered a sales value of '' 80.25 Lakhs through NKSKs.

3.0 (n)Code Solutions - IT Division:

During the FY 2021-22 under review, the performance of (n)Code Solutions - IT Division of the Company was also affected due to COVID-19 pandemic situation. We have continuously run our DSC operations, Procurement portal, Software operation support & data center operation throughout the period considering an essential services. This division has registered sales turnover of '' 73 crores and Profit of '' 24 crores across its all business segments.

(n)Code has enhanced their IT solutions & services using state-of-the art information technology solution like Mobility, secure online access in the areas like Digital Signature Certificate, e-Procurement, e-Auction and "Ease of Doing Business" activities by extending software / Application development support. (n)Code has been supporting Government initiatives by extending Software / Application development and support, Smart City / System Integration, Data Centre Operations, Project Management, Quality and Audit Consultancy, etc.

In the current year, (n)Code has developed & released new ILMS (Integrated Lease & Mining System) 2.0. Commissioner of Geology & Mining, Gujarat has won platinum award in the innovative software category for Skoch award. ILMS 2.0 is a complete integrated solution for mining industries.

(n)Code has also started good business opportunity in education domain specifically for providing Online examination portal for academic as well as recruitment activity and conducted successful examinations even during COVID-19 pandemic situation.

(n)Code team has managed all the business & support activities successfully with full client satisfaction. (n)Code has now set a vision to spread its wings pan India to deliver convenience to businesses by using its suit of software products like e-Auction, integrated Mining solution etc.

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

DIVIDEND:

Keeping in view the Company''s performance for FY 2021 -22, long term growth strategy and to ensure that the shareholders get sustained return on their investment, your Directors have recommended a dividend of '' 10/- per share (@100%) on 15,54,18,783 equity shares of '' 10/- each fully paid up, subject to approval of shareholders at the Annual General Meeting. On its approval, the dividend payout will work out to '' 155.42 crores. This amounts to 9.12% of the Net Profit of the Company.

APPROPRIATIONS:

Your Company has registered a Net Profit of '' 1,703.75 crores for FY 2021-22. After adding thereto '' 14.79 crores being the remeasurement gain on defined employee benefit plans and adding thereto '' 2,481.19 crores being the balance of Statement of Profit & Loss brought forward from previous year, an amount of '' 4,199.73 crores is available for appropriation. Out of this, '' 124.34 crores is appropriated towards payment of dividend for FY 2020-21. The balance amount of '' 4,075.39 crores is proposed to be carried to Balance Sheet.

FERTILIZER INDUSTRY - GOVERNMENT POLICY:

Department of Fertilizers (DOF) announced a revision in Nutrient Based Subsidy (NBS) rates w.e.f. 20-05-2021, which remains applicable till 31-03-2022. As per NBS the subsidy stands at '' 12,822 per MT for ANP However, this was still not enough owing to very high price of raw materials, especially Rock Phosphate, which is a major ingredient. Even with the highest outlay towards subsidy and a marginal increase in MRP of ANP, the margins remain low or negative. FY 2021 -22 witnessed lower availability of phosphatic fertilizers due to non-viability on mandated MRPs. The Fertilizer industry remains vital to agriculture productivity but continues to operate under a rigid control regime.

The Direct Benefit Transfer (DBT) scheme for fertilizers was implemented throughout the country from March, 2018. Though the scheme is called DBT, subsidy continues to be routed through the industry. The scheme has changed the business model for fertilizers companies as the subsidy now becomes due only on sales of fertilizers by the retailers to the farmers through POS (Point of Sales) machines. This has delayed the cash inflow cycle for subsidy to Industry due to lag between production and actual farmer purchases/consumption thereby impacting working capital.

As per the directives of Ministry of Coal, GOI, in Q-4 of FY 2021-22, GNFC had to divert resources at their Nitrophosphate complex for manufacturing Ammonium Nitrate Melt (AN Melt), Weak Nitric Acid (WNA) and Concentrated Nitric Acid (CNA) by compromising ANP production. GNFC has contributed to the larger benefit of country by providing AN Melt for coal mines thereby avoiding shortage of coal.

ON-GOING PROJECTS / NEW PROJECTS/ REVAMP SCHEMES:

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

1. Formic Acid Capacity Enhancement:

GNFC is implementing Formic Acid (FA) capacity enhancement Project to increase the capacity by 20 MTPD (6,800 MT per annum). The Project will be completed by Second Quarter of FY 2022-23 and total capacity of FA would be 85 MTPD.

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

With the increase in captive consumption of CNA for TDI, market share of the Company is reducing. Hence, the Company is implementing CNA-IV Project with a capacity of 150 MTPD. The Project will be completed by First Quarter of FY 2023-24.

3. 04 MW Solar Power Plant Project:

To fulfil Renewable Purchase Obligation, GNFC is implementing 04 (Four) MW Solar Power Project at Charanka Solar Park. Project will be completed by Fourth Quarter of FY 2022-23.

4. Ammonia Plant revamp:

At present, Company is producing about 1,950 MTPD Ammonia from both fuel oil and natural gas route after installation of S-300 revamp. It is possible to increase the Ammonia production capacity from 1,950 MTPD to 2,100 MTPD by installation of Ammonia Make-up Gas Convertor Loop [AMUGL], in existing Ammonia Synthesis loop.

This will increase Ammonia production by 50,000 MT per annum which will be used for new Weak Nitric Acid and Ammonium Nitrate Plants. Actions have been initiated for implementation of this revamp.

5. Coal based Captive Co-generation Power Plant at Dahej:

Company has set up 100 MT/Hr. capacity gas based boiler at TDI - II Dahej Complex to meet captive steam requirement, while power is being sourced from DGVCL grid. There is large variation in gas prices.

In order to reduce cost of steam & power and to improve reliability, Coal based Captive Co-Generation Power Plant (CCPP) having a capacity to produce 18 MW Power & 150 MT/ Hr. steam is under active Considerations. Fresh bids from the LSTK

bidders shall be invited and based on the viability of the project, decision for the implementation of the 18 MW Power & 150 MT/ Hr. steam plant shall be taken.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Sections 134(3)(c) read with 134(5) of the Companies Act, 2013, your Directors confirm thatâ

(i) in the preparation of Annual Accounts for the Financial Year ended 31^st March, 2022, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;

(ii) they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at end of the Financial Year on 31^st March, 2022 and of the profit of the Company for that period;

(iv) they had prepared Annual Accounts on a going concern basis;

(v) they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

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

DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES:

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

The Company had incorporated a Wholly Owned Subsidiary Company namely Gujarat (n)code Solutions Limited (GNSL) in the year 2017. As GNSL had not commenced its business operations, it filed an application to the Registrar of Companies (RoC) for removal of its name from the Register of Companies in terms of Section 248(1) of the Act. RoC vide order dated 25-09-2021 struck off the name of GNSL from Register of Companies and the Company stands dissolved from even date.

CONSOLIDATED FINANCIAL STATEMENTS:

Pursuant to Section 129(3) of the Act, read with Regulation 33 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 [SEBI (LODR) Regulations, 2015], as amended, the Company has prepared Consolidated Financial Statements in respect of Associate Company viz. Gujarat Green Revolution Co. Ltd. for the FY 2021-22 and forms part of this Annual Report.

As per the Indian Accounting Standards (Ind AS), the Accounts of the Joint Venture Company viz. EcoPhos GNFC Pvt. Ltd. (EGIL) are not required to be consolidated. Further, the wholly owned Subsidiary Company namely Gujarat (n)code Solutions Limited (GNSL) has been struck off from the Register of Companies w.e.f. 25-09-2021. Therefore, the same are not included in the Consolidated Financial Statements.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

PARTICULARS OF CONTRACT OR ARRANGEMENT MADE WITH RELATED PARTY:

The Policy for Related Party Transactions (RPTs) deals with review and approval of RPTs and the same is available on the Company''s website at web link https://www.gnfc.in/wp-content/uploads/2021/04/Related-Party-Transactions-Policy.pdf. The Audit Committee has granted Omnibus approval for RPTs, which are routine and repetitive in nature, based on the criteria approved by the Board of Directors within the overall framework of the said Policy. All RPTs under the Omnibus approval are placed before the Audit Committee periodically for its review and approval.

The Company has not entered into any contract or arrangement with related parties, as referred to in Section 188(1) of the Act during the FY 2021-22. Hence, the disclosure of RPTs in Form AOC-2 as required under Section 134(3)(h) of the Act is not applicable to your Company. Details of Related Party as per Ind AS-24 are given in Note No. 37 to the Standalone Financial Statements.

Requisite details on RPTs have also been furnished in the ''Report on Corporate Governance'' forming part of this Report. MEETINGS OF THE BOARD AND COMMITTEES THEREOF:

(i) Board Meeting:

Five (5) Meetings of the Board of Directors were held during the year.

(ii) Committees of the Board:

Presently, there are seven Committees of the Board as follows:

1. Audit Committee;

2. Stakeholders'' Relationship Committee;

3. Nomination and Remuneration Committee;

4. Corporate Social Responsibility Committee;

5. Risk Management Committee;

6. Project Committee; and;

7. Human Resource Development Committee.

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

REMUNERATION POLICY FOR DIRECTORS / KEY MANAGERIAL PERSONNEL / SENIOR MANAGEMENT AND OTHER EMPLOYEES:

PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

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

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL Chairman of the Company:

Shri Pankaj Kumar, IAS, Chief Secretary to Government of Gujarat (GoG) was nominated by GoG as Government Nominee Director on the Board vice Shri Anil Mukim, IAS (Retd). Shri Pankaj Kumar, IAS, has been appointed as Nominee Director and Chairman of the Company w.e.f. 07-09-2021.

Retirement of Director(s) by Rotation:

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

Declaration by Independent Directors:

In terms of Section 149(7) of the Act and SEBI (LODR) Regulations, 2015, the Company has received necessary declarations from all Independent Directors to the effect that they meet with the criteria of independence as laid down in Section 149(6) of the Act and Regulation 16(1) (b) of SEBI (LODR) Regulations, 2015 as amended for FY 2022-23.

Change in Directorate:

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

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

INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

Pursuant to the applicable provisions of the Act, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (''the Rules'') as amended, all unpaid or unclaimed dividends which were required to be transferred by the Company to the IEPF were transferred to IEPF Authority. The Company has also transferred 2,94,484 shares held by 4,557 Shareholders in respect of which dividend amount remained unpaid / unclaimed for a consecutive period of seven years or more to IEPF Authority within stipulated time.

The details of unpaid / unclaimed dividend and the shares transferred to IEPF Authority are available on the Company''s website at web link - https://www.gnfc.in/about-us/share-holders/information-regarding-transfer-of-shares-to-iepf-authority/ #1616487600815-c8355071-e6c5

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

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

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM AND ITS ADEQUACY:

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

In compliance with Regulation 21 of SEBI (LODR) (Amendment) Regulations, 2018, the Board of Directors has constituted a Risk Management Committee (RMC) defining its Terms of Reference (ToR) in its Meeting held on 11^th February, 2019. The details as to the constitution of RMC and its major ToR included in the "Report on Corporate Governance" are forming part of this Report.

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

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

ANNUAL RETURN:

The Draft Annual Return of the Company as on March 31,2022 is available on the Company''s Website and can be accessed at Weblink : https://www.gnfc.in/form-mgt-7-annual-return/. The Annual Return of FY 2020-21 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 is placed on the Company''s Website at weblink: https://www.gnfc.in/form-mgt-7-annual-return/. The same was filed with the Registrar of Companies, Gujarat (ROC) on Ministry of Corporate Affairs (MCA) portal within prescribed time limit.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

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

Company''s CSR Policy is available on the website of the Company at web link https://www.gnfc.in/wp-content/uploads/2021/ 04/CSR-Policy-Revised_17-05-2021.PDF

As per the provisions of Section 135 of the Companies Act, 2013 (the Act), the statutory amount (i.e. 2% of the average net profits of the last three Financial Years) that was required to be spent by the Company for various CSR Activities during the FY 2021-22 was '' 14.40 crores. The Company had actually spent '' 10.15 crores towards various CSR Activities during the FY 2021-22. During the current FY 2021 -22, an amount of '' 4.25 crores (being excess spending of previous FY) was available for set off in pursuance of sub-rule (3) of rule 7 of the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Pursuant to Rule 12 of Companies (Accounts) Rules, 2014, the Company has filed statutory Form CSR-2 for FY 2020-21 on 24-03-2022.

VIGIL MECHANISM-CUM-WHISTLE BLOWER POLICY:

SIGNIFICANT AND MATERIAL ORDERS:

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

MANAGEMENT DISCUSSION & ANALYSIS AND REPORT ON CORPORATE GOVERNANCE:

â¢ Declaration by Managing Director regarding compliance of the Company''s Code of Conduct by the Board Members and Senior Management Personnel.

â¢ Certificate by Practicing Company Secretary certifying:

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

BUSINESS REPONSIBILITY AND SUSTAINABILITY REPORT:

SEBI vide Circular dated 10^th May, 2021 has prescribed that reporting under BRSR is voluntarily for FY 2021 -22 and mandatory from FY 2022-23. Your Company has adopted a report under the old reporting guidelines. The report is appended as Annexure- B.

INFORMATION REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

PARTICULARS OF EMPLOYEES AND REMUNERATION:

There were 2,401 permanent employees of the Company as of 31^st March, 2022. The disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (''Rules'') have been appended as Annexure - D to this Report. Details of employee remuneration as required under provisions of Section 197 of the Companies Act, 2013 and Rule 5(2) and 5(3) of the Rules are available to any shareholder for inspection on request. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary, where upon a copy would be sent through email only.

AUDITORS AND AUDITORS'' REPORT:

Pursuant to the provisions of Section 139 and other applicable provisions of the Act and relevant Rules made there under, the Members of the Company had at their 45^th AGM held on 23^rd September, 2021 appointed M/s Suresh Surana & Associates LLP, Mumbai, Chartered Accountants, a Member firm of RSM International as Statutory Auditors of the Company for a term of Five (5) consecutive years, until the conclusion of the forthcoming 50^th AGM to be held in the year 2026, on such remuneration as may be determined by the Board of Directors, based on the recommendation of the Audit Committee plus certification fees, applicable taxes and reasonable out of pocket expenses actually incurred by them during the course of Audit.

Notes to Financial Statements (Standalone and Consolidated) forming part of Audited Financial Statements for FY 2021-22 are self- explanatory and need no further explanation. The Auditors'' Reports on Audited Financial Statements (Standalone and Consolidated) does not contain any Modified Opinions.

COST AUDITOR:

The Board of Directors in its Meeting held on 9^th May, 2022, based on the recommendations of Audit Committee, has appointed M/s R K Patel & Company, Cost Accountants, Vadodara, as the Cost Auditor of the Company for the FY 2022-23 at a remuneration of '' 1,00,000/- per annum plus out of pocket expenses and statutory levies.

In accordance with Section 148 of the Companies Act, 2013, read with Rule 14 of the Companies (Audit & Auditors) Rules, 2014, the remuneration of '' 1,00,000/- per annum payable to Cost Auditors for the FY 2022-23 is subject to ratification by the Shareholders at this AGM. Therefore, a suitable Resolution in this regard has been proposed in the Notice of this AGM for your approval.

The Company had e-fiLed the Cost Audit Report for the FY 2020-21 with the Ministry of Corporate Affairs (Cost Audit Branch) on 9^th September, 2021. The due date of filing the said Report was 27^th September, 2021.

SECRETARIAL AUDITOR:

In pursuance of Section 204 of the Act and the Rules made thereunder, the Board of Directors in its Meeting held on 04-02-2021 appointed CS Shalin Patel, Practicing Company Secretary, Vadodara as Secretarial Auditor for three years from FY 2020-21 to FY 2022-23. The Secretarial Audit Report in Form MR-3 in respect of Secretarial Audit work carried out by him for FY 2021 -22 is enclosed at Annexure - E to this Report. The said Report does not contain any qualification, reservation or adverse remark.

DIVIDEND DISTRIBUTION POLICY:

As per Regulation 43A of SEBI (LODR) Regulations, 2015, Dividend Distribution Policy of the Company inter-aLia, set-out the various parameters and circumstances that are to be taken into account while determining the distribution of dividend to the Shareholders and / or retaining profits by the Company. The said Policy is enclosed at Annexure - F to this Report and the same is also available on the Company''s website at web Link https://www.gnfc.in/wp-content/upLoads/2021/04/Dividend- Distribution-PoLicy.pdf

DISCLOSURE ON COMPLIANCE OF SECRETARIAL STANDARDS:

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

DETAILS OF FRAUDS, IF ANY, REPORTED BY THE AUDITORS:

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

FIXED DEPOSITS:

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

INSURANCE:

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

INDUSTRIAL RELATIONS:

Your Directors put on record their sincere appreciation for the dedicated and committed contributions made by aLL employees at aLL LeveLs for the sustainabLe growth of the Company.

ACKNOWLEDGEMENTS:

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

For and on behalf of the Board of Directors,

PLace : Gandhinagar Shri Pankaj Kumar, IAS

Date : 19^th August, 2022 Chairman

Mar 31, 2018

To,

The Members,

The Directors have immense pleasure in presenting this 42nd Annual Report on Companyâs business and operations together with Audited Financial Statements (Standalone and Consolidated) for the Financial Year ended on 31st March, 2018.

The year 2017-18 was the unprecedented year for your Company registering excellent financial results in the history of 42 years of its operations. The continued emphasis on higher productivity, energy conservation & efficiency improvement, smart marketing strategies, innovation / cost reduction, environmental & safety consciousness, dedication of employees at all levels, etc., have significantly contributed in achieving commendable allround performance of your Company.

FINANCIAL RESULTS AND STATE OF COMPANYâS AFFAIRS

The concerted efforts put-in by your Company have resulted in achieving glittering financial and operational performance during the year. The Company established total 186 new records on production and marketing fronts.

The financial highlights for the year ended 31st March, 2018 are summarized below:

(Rs. in Crores)

Particulars	Standalone
	2017-18	2016-17
Income from operations	5,917	4,945
Other Income	141	225
Total Income	6,058	5,170
Total Expenditure	4,526	4,292
Profit before Depreciation, Finance
Cost, Exceptional Item and Tax	1,532	878
Depreciation	270	251
Finance Cost	100	204
Exceptional Item (Impairment
Reversal of TDI-II Assets)	-	292
Profit Before Tax	1,162	715
Tax Expense	372	194
Net Profit for the year	790	521
Re-measurement of Losses on
defined employee benefit plans	27	6
Balance brought forward from
previous year	635	157
Amount available for Appropriation	1,398	672
Appropriations :
Dividend paid	78	31
Tax on Dividend	16	6
Transferred to General Reserve	115	-
Surplus carried to Balance Sheet	1,189	635

FINANCIAL & OPERATIONAL PERFORMANCE OVERVIEW

1. Financial Performance :

Your Directors are delighted to share with you the highest ever financial records established by your company during the year under review on standalone basis, which are as follows:

- Highest Ever Profit Before Tax of Rs.1,162 Crore as against Rs.715 Crore in the previous year, registering an increase of 63%.

- Highest Ever Profit After Tax of Rs.790 Crore as against Rs.521 Crore in the previous year, registering an increase of 51%.

- Highest Ever Turnover of Rs.6,058 Crore as against Rs.5,170 Crore in the previous year, registering an increase of 17%.

- Highest Ever Exports of Rs.629 Crore as against Rs.361 Crore in the previous year, registering an increase of 74%.

- Highest Ever EBITDA of Rs.1,532 Crore as against Rs.1,170 Crore in the previous year, registering an increase of 31%.

- Highest Ever EPS of Rs.50.80 as against Rs.33.54 in the previous year, registering an increase of 51%.

- Recommendation of Highest Ever Dividend of 75% as against 50% paid last year.

- Highest ever pre-payment of Long Term Debt of Rs.534 Crore.

- Highest ever Long Term Debt extinction of Rs.888 Crore. The total debt of Rs.1,436 Crore paid off in one single year. Thus, your Company has become Long Term Debt free Company.

During the year under review, the exponential growth in revenue and profits are significantly led by non-TDI chemicals products. The realisation from Acetic Acid, Formic Acid and Ethyl Acetate were the highest in the last 6 years.

The Net Profit for FY 2017-18 on consolidated basis was Rs.794.94 Crore as compared to Rs.528.79 Crore in the previous year.

2. Operational performance :

It is a matter of proud that your Company has once again excelled on production front during the year. Most plants were operated at more than 100% capacity utilization. Special focus was given on energy conservation and cost reduction in all aspects. Ever highest annual production was achieved in Formic Acid : 22,009 MTs. (220.09%), Ethyl Acetate : 63,126 MTs. (126.25%), Aniline : 41,883 MTs. (119.67%) Technical Grade Urea : 1,03,601 MTs, TDI-II : 42,577 MTs (85.15%).

In addition, annual production at more than 100% capacity utilization was also achieved in Acetic Acid : 1,57,067 MTs. (157.07%), Ammonium Nitrophosphate : 2,16,575 MTs. (151.98%), Ammonia : 6,13,010 (137.60%) and TDI-I : 17,056 MTs. (121.83%).

Currently, TDI-II Plant, Dahej is running smoothly on consistent basis. Your Company is making on-going efforts for reliability and improvement in TDI-II Plant operations in terms of consistency, safety and capacity utilization by implementing various schemes. Actions have been initiated for implementation of various schemes under âReliability Phase-IIâ with an estimated investment of Rs.170 Crore. This will help in decreasing downtime and achieving sustainable production, resulting into higher contribution in the profitability of the Company.

SALES :

1. Industrial Products :

The Chemical Segment has performed extremely well for FY 2017-18 despite competitive scenario of Chemical business in the country and International Market. Almost all Industrial Products performed well in terms of sales and realization during the year. Many new milestones have been achieved in sales. E-tendering of Methanol successfully launched and well accepted in the market. Your Company is the first Company to adopt such a unique way of Chemical sales through e-Tendering. Export turn-over has increased to Rs.629 Crore in FY 2017-18 from Rs.361 Crore in FY 2016-17. The company is one of the leading suppliers of TDI in Markets of Middle East and Africa. The companyâs products have been exported to 66 Countries. The outstanding performance of Chemical Segment was mainly attributed to smart marketing strategy and dynamic pricing of companyâs products.

2. Fertilizer Business:

The year 2017-18 was challenging for Fertilizer Sector as the over-all rainfall remained normal during the monsoon season and there was high carried forward stock of Fertilizers at the beginning of the year.

Despite these challenges, your Company performed well in the ferti lizer business during the year and achieved total sale of Urea (Manufactured and Traded) at 7.31 Lac MTs. as compared to 10.37 Lac MTs. in the previous year. Lower sales volume of Urea was due to reduced handling of Imported Urea during the year. The sale of Ammonium Nitro Phosphate (ANP) was highest ever at 2.23 Lac MTs. compared to 2.16 Lac MTs in the previous year. Out of the total sale of fertilizers, around 1.09 Lac MTs fertilizers were sold through Companyâs own 68 Narmada Khedut Sahay Kendras (NKSKs).

During the year, trading activities continued in Muriate of Potash (MoP), indigenously sourced Di-Ammonium Phosphate (DAP), Ammonium Sulphate, Single Super Phosphate (SSP) and City Compost. Total 10,415 MTs. of fertilizers were sold as part of Trading activities.

3. (n)Code Solutions - IT Division:

(n)Code Solutions - IT Division has also contributed in achieving stellar performance of your Company during the year. This division has registered sales turnover of Rs.174 Crore and profit of Rs.39.53 Crore across all its business segments.

(n)Code Solutions has bagged major prestigious order from Vadodara Smart City Development Ltd. Another notable contribution by (n)Code in the Government Sector was its role in conducting reverse auction on its own e-auction for Gujarat State Civil Supplies Corporation (GSCSC) resulting in to a massive savings of Rs.32.58 Crore to GSCSC.

With a view to maintain growth momentum in IT business, (n)Code has undertaken several new initiatives in the areas of smart cities, education, intelligent transportation, system integration, Geographical Information Systems, security and surveillance, Digital Mapping and Surveys, business intelligence, Data Analytics, e-Auction, etc.

(n)Code Solutions - IT Division of the company was appointed as an Authentication User Agency (AUA) and e-KYC User Agency (KUA) by Unique Identification Authority of India (UIDAI) for the purpose of providing Aadhaar enabled services. UIDAI had vide its interim order dated 7th June, 2018 imposed financial disincentive of Rs.2,05,32,000/- (including GST of Rs.31,32,000/-) due to violation of certain provisions of Aadhaar Act, 2016 and its Regulations by (n)Code. Your Company had submitted due explanations in this proceedings. However, in order to amicably resolve the issue and close the matter, the Company had made full payment towards financial disincentive to UIDAI. As such, there is no material impact of the said payment on the financial position of the Company.

A detailed analysis of Companyâs operational and financial performance is presented under a separate section on âManagement Discussion & Analysisâ forming part of this report.

DIVIDEND :

Your Directors are delighted to inform that in view of unprecedented performance of your Company for FY 2017-18 in its history of 42 years and to meet with the aspirations of shareholders for higher dividend on their investments, your Directors have recommended ever highest dividend of Rs.7.50 per share (75%) on 15,54,18,783 equity shares of Rs.10/- each, subject to the approval of shareholders at this Annual General Meeting. The dividend payout would work out to Rs.140.52 Crore including tax on dividend. This amounts to 17.80% of the Net Profit of the Company.

APPROPRIATIONS :

Your Company has registered a Net Profit of Rs.789.52 Crore for FY 2017-18. After deducting therefrom Rs.26.72 Crore being the re-measurement losses on defined employee benefit plans and adding thereto Rs.635.19 Crore being the balance of Statement of Profit & Loss brought forward from previous year, an amount of Rs.1,397.99 Crore is available for appropriation. Out of this, Rs.93.53 Crore (inclusive of Tax on Dividend) is appropriated towards payment of dividend for FY 2016-17 and Rs.115 Crore is transferred to General Reserve. The balance amount of Rs.1,189.46 Crore is proposed to be carried to Balance Sheet. The Company proposes to transfer Rs.175 Crore to General Reserve upon declaration of dividend for FY 2017-18.

FERTILIZER INDUSTRY - GOVERNMENT POLICY :

The Government of India (GoI) increased subsidy on Phosphates and decreased subsidy on Nitrogen and Potash nutrient covered under the policy of Nutrient Based Subsidy for FY 2018-19. Net effect of such changes in subsidy on âNarmada Phosâ produced by your Company has been positive resulting into annual benefit of around Rs.14 Crore.

After the success of pilot project of GoI for sale of fertilizers under âDirect Benefit Transferâ (DBT) Scheme in 19 Districts of selected States, the said scheme has now been implemented across the Country from 1st February, 2018 with the objectives of addressing the challenges such as diversion of Urea for non-agricultural use, imbalanced use of fertilizers, delay in subsidy receipts from Government and protection of some of the legacy / operation of inefficient plants. The subsidy is now available directly to farmers under DBT Scheme. GST @ 5% on fertilizers is applicable from 1st July, 2017.

Recently, GoI has made it compulsory for all Fertilizer Manufacturers to use 45 Kgs. bag of Urea in place of existing 50 Kgs. bag, with a view to bring down consumption of Urea by 10% since farmers mostly assess their requirement of Urea in terms of bags for agriculture purposes. This will not only save countryâs precious Foreign Exchange out-go but also reduce de-gradation of soil & environment.

ON-GOING PROJECTS / INITIATIVES :

1. Neem Project :

Inspired by Honâble Prime Ministerâs Policy mandate of 100% Neem coating of Urea, your Company has achieved significant progress in its innovative Neem Project, implemented in 2015. With effective backward integration of Neem Oil production, your Company has created shared value among rural and urban poor people empowering communities with targeted focus on women empowerment through income generation and improved livelihood. During the last three years, by collecting over 45,000 MTs of Neem seeds, income of more than Rs.45 Crore was generated for 4.5 Lac Women in 53 Districts across Six States of India. Besides, more than 2.5 Lac people were benefitted by indirect employment.

During the year under review, around 23,000 MTs of Neem seeds were collected from six States from which 1,724 MTs. of Neem Oil and 14,421 MTs. of Neem Cake were produced.

As reported last year, facilities for manufacture of Neem Oil based products were set-up and the Company launched various products such as Neem Shampoo, Neem Mosquito Repellent, Neem Face-wash, Neem Hair Oil, Neem Handwash, etc. New Soap manufacturing Unit with a capacity of producing 225 MTPA Neem Soaps has been established by Companyâs CSR Wing - NARDES and registered under Khadi Village Industries Commission (KVIC).

Honâble Prime Minister inaugurated Neem Product facility on 8th October, 2017 and also laid foundation stone for Neem Seed expelling / extraction Unit at Bharuch. Neem based products launched by your Company has received overwhelming response from the consumers across India. To meet with the growing demand, the Company has opened first of its kind Neem Stores and Neem Parlours in various major cities of Gujarat. The Company has opened 17 own outlets and 40 Garden Parlours in Ahmedabad, Surat, Vadodara and Rajkot.

With a view to cater to the market demand of Neem products, a large scale Neem Seed expelling / extraction unit is under implementation to produce around 2,900 MTPA Neem Oil and around 22,000 MTPA Neem Cake. The Company is also setting-up 10 MTPD Toilet Soap Manufacturing Unit at Bharuch.

We are happy to inform that your Companyâs innovative multi-dimensional socio-economic Neem Project has been lauded in the UNDP impact assessment survey which concluded that there has been significant decrease in domestic violence, increase in annual income, asset creation and education expenditure. In addition, the project has been appreciated by Honâble Prime Minister and many other Dignitaries at various occasions and has won many prestigious Awards and Recognitions at both National and International levels, the details of which are separately given under the heading âAwards and Recognitionsâ in this Report.

2. Di-Calcium Phosphate Project :

Honâble Prime Minister laid foundation stone for Di-Calcium Phosphate (DCP) project on 8th October, 2017 at Bharuch. The project execution activities to manufacture 2 Lac MTPA DCP at Dahej to be set-up by Ecophos GNFC India Pvt. Ltd. (EGIL) at an estimated cost of Rs.538 Crore are under progress. Financial closure for the project has been completed. There is a slight delay in execution of this project as reported last year and the same is expected to be completed by end September, 2019. The Company is concentrating on speedy implementation of the said project as downstream integration of TDI-II Plant.

Once the project goes on stream, the entire HCI generated as by-product from TDI-II Plant will be consumed for production of DCP, which would help the Company in improving the profitability of TDI business.

3. Contribution towards âDigital Indiaâ :

As was reported last year, your Company was the first Fertilizer Company in India to have its 100% Cashless Township, following the clarion call of Honâble Prime Minister for âDigital Indiaâ. The efforts put-in by your Company for Cashless initiatives in various segments of its business were well appreciated by Honâble Prime Minister and other Dignitaries at various occasions including Government of India, Government of Gujarat and other renowned Organizations / Authorities. Last year, the Company received many prestigious Awards at National and International Levels in recognition of Cashless drive undertaken by your Company. This year also, the Company has received Awards, the details of which are given separately under the heading âAwards and Recognitionsâ in this Report.

GROWTH PLAN / REVAMP SCHEMES :

(1) Formic Acid Capacity Enhancement :

Your company is the only producer of Formic Acid (FA) in India. To meet with the domestic demand ofthe Country, around 15,000 MTPA FA is imported mainly from China, Germany and Finland. To bridge the gap of demand & supply in India to some extent, the Company is planning to enhance the present capacity of its FA Plant from 22,000 MTPA to 28,800 MTPA through implementation of FA Plant revamp. The proposed capacity enhancement will save countryâs precious foreign exchange. Moreover, one of the raw materials viz. Carbon Monoxide to produce FA is also available at Companyâs Dahej site. Hence, possibilities are being explored for setting-up FA Plant at Dahej.

(2) Acetic Acid Capacity Enhancement :

Your company is the only producer of Acetic Acid (AA) in India with installed capacity of 1 Lac MTPA. Currently, 80% of domestic demand of AA is met through import. Looking to the market of AA in India, the Company is actively considering Acetic Acid capacity expansion. The level of capacity of the plant is under technical examination.

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

Your Company is operating three CNA Plants. With the increase in captive consumption of CNA for manufacture of TDI, market share of GNFC is reducing. Hence, the Company has initiated actions for setting up 150 MTPD CNA-IV Plant and is expected to be completed by Mid 2020.

(4) Ammonia Plant Revamp :

The Company produces about 1,850 MTPD Ammonia from both fuel oil and natural gas route and further, Syngas loop revamp is under implementation to increase the production to 1,900 MTPD. This revamp is expected to be implemented by end 2018. Ammonia production capacity can be further increased from 1,900 MTPD to 2,050 MTPD by installing Make-up Gas Convertor Loop in existing Ammonia Synthesis loop. This will increase Ammonia production by 150 MTPD (50,000 MTPA) and reliability of operations. Actions have been initiated for implementation of revamp in Ammonia Plant, which is expected to be completed by end 2020.

(5) Reliability Improvement Schemes for TDI-II Plant, Dahej :

With a view to further increasing the reliability of TDI-II Plant operations and achieving sustainable production, resulting into higher contribution in the profitability, your company has undertaken implementation of various schemes under âReliability Phase-IIâ.

The above mentioned projects / revamp schemes would be implemented with an estimated investment between Rs.1000 ~ Rs.2000 Crore, depending upon the scale of operations.

AWARDS & RECOGNITIONS :

Your Directors are delighted to inform that in recognition of exemplary work done in the areas of Neem Project and Cashless initiatives, the Company has won many prestigious National and International Awards from Governments and other renowned Institutions, which are listed below :

- Porter Prize for Enabling Social Progress, Mumbai for second consecutive year

- India CSR Innovative Project of the year 2017, Mumbai

- India CSR Award for PSU Leader of the year 2017, Mumbai

- CMO Asia Best CSR Practices Award 2017, Singapore

- Global Giving Award for Best CSR Innovation Practices 2017, Dubai

- CII-ITC Sustainability CSR Award 2017, New Delhi

- Shared Value Inclusive Business List Award, New Delhi

- CMO Asia 50 Most Influential Rural Marketing Professional, Malaysia

- ET Now CSR Award for Innovation in CSR practices, Mumbai

- Dhainik Bhaskar India Pride Award for Excellence in CSR, New Delhi

- Business World Digital India Award for implementation of cashless initiatives, New Delhi

- SKOCH BSE Order of Merit, Mumbai

- SKOCH Smart Governance SKOCH Order-of-Merit Award

- Times Network Digital India Award for Digital Social Innovation, New Delhi

- CII Supply Chain and Logistics Excel lence Award, Hyderabad

- Star Performer of the year 2017 by SBI Mutual Fund

- Indiaâs Best Company of the year Award DIRECTORSâ RESPONSIBILITY STATEMENT :

Pursuant to Sections 134(3)(c) and 134(5) of the Act, the Directors state that-

(i) in the preparation of Annual Accounts for the financial year ended 31st March, 2018, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any, there from had been furnished;

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

(iv) they had prepared Annual Accounts on a going concern basis;

(v) they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY :

Except for additional equity investment of Rs.12 Crore in the equity of Bhavnagar Energy Co. Ltd., there has been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of financial year to which the financial statements relate and the date of the Report.

DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES :

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

GNSL has not commenced its business operations during FY 2017-18 and therefore, report on performance and financial position has not been furnished in this Report.

The project execution activities for setting-up of 2 Lac MTPA Di-Calcium Phosphate Project by EcoPhos GNFC India Pvt. Ltd. (EGIL), a Joint Venture Company are underway. Therefore, report on operational performance and financial position of EGIL for FY 2017-18 has not been furnished in this Report.

CONSOLIDATED FINANCIAL STATEMENTS :

Pursuant to Section 129(3) of the Act, read with Regulation 33 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has prepared Consolidated Financial Statement in respect of Gujarat Ncode Solutions Ltd. (GNSL), a wholly owned subsidiary of the Company and Gujarat Green Revolution Co. Ltd., being an Associate Company for FY 2017-18 and forms part of this Annual Report.

As per Indian Accounting Standards, the accounts of EcoPhos GNFC India Pvt. Ltd. (EGIL), a Joint Venture Company are not required to be consolidated.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS :

During the year, the Company has neither made any investment in other bodies corporate nor given any Loan or Guarantee or provided any Security in connection with loan to any other body corporate or person.

PARTICULARS OF CONTRACT OR ARRANGEMENT MADE WITH RELATED PARTY :

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

In terms of the Policy on Related Party Transactions, the Company had not entered into any contract or arrangement with related parties, which could be considered âmaterialâ (i.e. transactions exceeding 10% of the annual consolidated turnover as per the last Audited Financial Statement entered into individually or taken together with previous transactions during the financial year) during FY 2017-18. Hence, the disclosure of RPTs as required under Section 134(3)(h) of the Act, in Form AOC-2 is not applicable to your company. Suitable Related Party disclosure under Ind AS-24 is also reported in the Note No.40 to the Standalone Financial Statement.

Requisite details on RPTs have also been furnished in the âReport on Corporate Governanceâ forming part of this Report. MEETINGS OF THE BOARD & COMMITTEES THEREOF :

(i) Board Meeting :

Five (5) meetings of the Board were held during the year

(ii) Committees of the Board :

Currently, there are six Committees of the Board as under:

1. Audit Committee;

2. Stakeholdersâ Relationship Committee;

3. Nomination and Remuneration Committee;

4. Corporate Social Responsibility Committee;

5. Project Committee; and

6. Human Resource Development Committee.

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

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

REMUNERATION POLICY FOR DIRECTORS / KEY MANAGERIAL PERSONNEL / SENIOR MANAGEMENT AND OTHER EMPLOYEES :

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

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS :

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

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL :

During the year, Shri Anil Mukim, IAS ceased to be the Director of the Company effective 7th March, 2018.

Shri Sunil Parekh and Shri Piruz Khambatta who were appointed as Independent Directors (IDs) at the 39th AGM held on 26th September, 2015 for a term of three years up to 30th September, 2018, their term of office will expire on that date. They are eligible for re-appointment as IDs in terms of Section 149(10)(11) of the Act. Therefore, suitable resolutions proposing their reappointment as IDs are included in the Notice of this AGM for your kind approval.

Government of Gujarat (GoG) has vide its Notification dated 12.07.2018 nominated Shri M.S. Dagur as Government Director on the Board for a period of two years from the date he assumes the charge of Managing Director (MD) and withdrawn the nomination of Dr. Rajiv Kumar Gupta, IAS. In accordance with Article 171 of the Articles of Association of the Company, the Board in its meeting held on 9.08.2018, appointed Shri M.S. Dagur as MD w.e.f. 16.07.2018 (i.e. the date of which he assumed the charge). Dr. Rajiv Kumar Gupta, IAS relinquished the charge of MD on 15.07.2018. Accordingly, he ceased to be the Director and MD effective from the said date.

The Members had at their 37th AGM held on 21.09.2013 accorded their consent to the appointment of Dr. Rajiv Kumar Gupta, IAS as MD from 2.05.2013 until further orders from GoG or for five years as per the Companies Act, 2013. Accordingly, the term of Dr. Rajiv Kumar Gupta, IAS as MD had completed on 1.05.2018. In order to formalize the appointment Dr. Rajiv Kumar Gupta, IAS as MD for intervening period from 2.05.2018 to 15.07.2018, the Board had in its meeting held on 9.08.2018 reappointed him as MD.

Necessary resolutions proposing the appointment of Shri M.S. Dagur and re-appointment of Dr. Rajiv Kumar Gupta, IAS as MD as required under the Companies Act, 2013 are included in the Notice of this AGM for your kind approval.

Retirement of Director(s) by Rotation:

In terms of Section 152 of the Act, Shri V D Nanavaty, Director will retire by rotation at this AGM and is proposed to be reappointed thereat.

Declaration by Independent Directors:

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

Change in Directorate :

The information relating to change in Directorship during the year is furnished in the âReport on Corporate Governanceâ forming part of this Report.

Your Directors place on record their deep sense of appreciation for the valuable services rendered by the outgoing Director. Key Managerial Personnel :

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

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the applicable provisions of the Act, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âthe Rulesâ), all unpaid or unclaimed dividends which were required to be transferred by the Company to the IEPF were transferred by the Company to IEPF Authority. The Company also transferred 15,40,351 Nos. of shares held by 27,868 Shareholders in respect of which dividend amount remained unpaid / unclaimed for a consecutive period of seven years or more to IEPF Authority within stipulated time. The details of unpaid / unclaimed dividend and the shares transferred to IEPF Authority are available on Companyâs website at web link http://www.gnfc.in/PDFandWORD/List-of-Shareholders.pdf

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

A formal Policy against Sexual Harassment of Women at Workplace is in place as required under The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. The Company has constituted Internal Complaints Committee to redress the complaint(s). No complaint was received during the year.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The Company has in place a Risk Management Policy. Under this Policy, various risks pertaining to operations & maintenance of plants, financial and other organizational risks are assessed, evaluated and continuously monitored for taking effective steps for its mitigation. Risk Management Report, inter-alia, containing major anxiety areas of risks and action plan for their mitigation and noteworthy risk management activities carried out by the Company is put-up periodically before mettings of the Audit Committee and Board of Directors for its review.

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

EXTRACT OF ANNUAL RETURN:

In accordance with Sections 92(3) & 134(3)(a) of the Act, an extract of Annual Return in Form MGT-9 is enclosed as Annexure - A to this Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR) :

In accordance with the requirement of Section 135 of the Act, read with the Companies (CSR Policy) Rules, 2014, the Company has constituted a Corporate Social Responsibility Committee and formulated a CSR Policy. As a responsible corporate, the Company has been undertaking societal activities directly as well as through its CSR arm - Narmadanagar Rural Development Society (NARDES) in the areas which are covered in CSR Policy and Schedule-VII to the Act. During FY 2017-18, the company has spent Rs.838 Lac against the requirement of spending Rs.356.35 Lac towards CSR expenditure. Thus, the Company has spent around 4.70%, which is more than 2% of average Net Profit of last three Financial Years.

CSR Policy is available on the website of the Company at web link http://www.gnfc.in/aboutus/corporate/policies.html Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed as Annexure - B to this Report.

The Companyâs exemplary contribution on CSR front has been widely acknowledged and appreciated at various foras as can be seen from the list of Awards listed under âAwards and Recognitionsâ.

VIGIL MECHANISM-CUM-WHISTLE BLOWER POLICY :

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

SIGNIFICANT AND MATERIAL ORDERS :

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

MANAGEMENT DISCUSSION & ANALYSIS AND REPORT ON CORPORATE GOVERNANCE :

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

- Declaration regarding compliance of Companyâs Code of Conduct by Board Members and Senior Management Personnel.

- Certificate by Practicing Company Secretary on compliance with the conditions of Corporate Governance by the Company.

BUSINESS REPONSIBILITY REPORT :

The Company has been conducting its business in such a way that it delivers both long term stakeholders value and benefit society under the approach of âCreating Shared Valueâ. The Company was covered under top 500 listed entities based on market capitalization as on 31.03.2017. Therefore, as required under Regulation 34 of SEBI (LODR) Regulations, 2015, Business Responsibility Report is enclosed as Annexure - C to this Report.

INFORMATION REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO :

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

PARTICULARS OF EMPLOYEES AND REMUNERATION :

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

AUDITORS AND AUDITORSâ REPORT :

Pursuant to the provisions of Section 139 and other applicable provisions of the Companies Act, 2013, M/s SRBC & Co. LLP, Chartered Accountants, a Member Firm of E&Y India were appointed as Statutory Auditors of the Company at the 40th AGM held on 30th September, 2016 for a term of five consecutive years, until the conclusion of 45th AGM to be held in the year 2021, subject to ratification of their appointment at every AGM held thereafter. However, in terms of the Companies Amendment Act, 2017, ratification for appointment of Statutory Auditors is now not required to be made at every AGM when Auditors have been appointed for a term of five years. Hence, resolution for ratification of appointment of Statutory Auditors is not included in the Notice of this AGM.

Notes to Financial Statements (Standalone and Consolidated) forming part of Audited Financial Statements for FY 2017-18 are self explanatory and need no further explanation. The Auditors Reports on Audited Standalone and Consolidated Financial Statements does not contain any modified opinions.

COST AUDITOR :

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

In accordance with Section 148 of the Act read with Rule 14 of the Companies (Audit & Auditors) Rules, 2014, the remuneration of Rs.4.18 Lac per annum payable to Cost Auditor for FY 2018-19 is subject to ratification by the Shareholders at the AGM. Therefore, a suitable Resolution in this regard is included in Notice of this AGM for your kind approval.

The Company had e-filed the Cost Audit Report for FY 2016-17 with the Ministry of Corporate Affairs (Cost Audit Branch) on 1st September, 2017. The due date of filing the said Report was 30th September, 2017.

SECRETARIAL AUDITOR :

As required under Section 204 of the Act and the Rules made thereunder, the Board of Directors has appointed M/s J.J. Gandhi & Co., Practicing Company Secretaries, Vadodara as Secretarial Auditor for FY 2017-18. The Secretarial Audit Report in Form MR-3 in respect of Secretarial Audit work carried out by the Secretarial Auditors for FY 2017-18 is enclosed as Annexure - G.

In respect of qualifications mentioned in the Secretarial Audit Report, the comments are under:

(i) In order to have proper composition of the Board, as per Regulation 17(1) of SEBI (LODR) Regulations, 2015, during the first three quarters of FY 2017-18, the Company made all out efforts for identifying / selecting one more Independent Director having relevant expertise and experience with appropriate balance of skill and knowledge. However, the Board of the company was properly constituted from the fourth quarter.

(ii) The Board Meeting on 29th May, 2017 held after a gap of 125 days against maximum permissible gap of 120 days as per Section 173 of the Companies Act, 2013 was due to slight delay in finalization of Annual Accounts for FY 2016-17 on account of adoption of Indian Accounting Standards (Ind AS).

DIVIDEND DISTRIBUTION POLICY :

As per Regulation 43A of SEBI (LODR), 2016, the Company has formulated Dividend Distribution Policy, inter-alia, setting-out the parameters and circumstances that will be taken into account while determining the distribution of dividend to the shareholders and / or retaining profits by the Company. This policy is enclosed as Annexure - H and the same is also available on the Companyâs website at web link http://www.gnfc.in/PDFandWORD/Dividend-Distribution-Policy.pdf

DISCLOSURE ON COMPLIANCE OF SECRETARIAL STANDARDS :

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

DETAILS OF FRAUDS, IF ANY, REPORTED BY THE AUDITORS :

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

FIXED DEPOSITS :

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

INSURANCE

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

INDUSTRIAL RELATIONS

Industrial relations during the year under review have remained extremely cordial and harmonious. Your Company has been able to function efficiently because of the culture of professionalism, creativity, integrity and continuous improvement in all major business areas as well as efficient utilization of Companyâs resources for sustainable and profitable growth.

Your Directors wish to express their deep sense of gratitude for the efficient and loyal services rendered by each and every employee at all levels, without whose whole hearted efforts, overall splendid performance would have not been possible and also look forward the bright future of your Company with confidence.

ACKNOWLEDGEMENTS

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

For and on behalf of the Board of Directors,

Dr. J.N. Singh

Dated : 9th August, 2018 Chairman

Mar 31, 2017

DIRECTORSâ REPORT

To,

The Members,

The Directors have great pleasure in presenting this 41st Annual Report on Companyâs business and operations together with Audited Financial Statements (Standalone and Consolidated) for the Financial Year ended 31st March, 2017. The year 2016-17 was the year of extraordinary all around performance of your Company. The continued emphasis on higher productivity, energy conservation & efficiency improvement, smart marketing strategies, innovation / cost reduction, environmental & safety consciousness, etc., have substantially contributed in achieving the commendable performance of your Company.

FINANCIAL RESULTS

As a result of the concerted efforts put-in by your Company, ever highest Profit Before Tax (PBT) of Rs.715 Crore and Profit After Tax (PAT) of Rs.521 Crore were achieved, registering an appreciable growth for the year ended 31st March, 2017.

The financial highlights for the year ended 31st March, 2017 are summarized below:

(Rs. in Crores)

Particulars	Standalone
	2016-17	2015-16
Income from operations	4,945	4,846
Other Income	225	252
Total Income	5,170	5,098
Total Expenditure	4,292	4,283
Profit before Depreciation, Finance
Cost, Exceptional Item and Tax	878	815
Depreciation	251	251
Finance Cost	204	296
Exceptional Item (Impairment
Reversal of TDI-II Assets)	292	-
Profit Before Tax	715	268
Tax Expense	194	95
Net Profit for the year	521	173
Re-measurement of Losses on
defined employee benefit plans	6	8
Balance brought forward from
previous year	157	42
Amount available for Appropriation	672	207
Appropriations :
Dividend paid	31	-
Tax on Dividend	6	-
Transferred to General Reserve	-	50
Surplus carried to Balance Sheet	635	157

INDIAN ACCOUNTING STANDARDS - IMPLEMENTATION

The Ministry of Corporate Affairs (MCA) vide its Notification dated 16th February, 2015, notified the Indian Accounting Standards (Ind AS) applicable to certain classes of Companies. Ind AS has replaced the existing Indian Generally Accepted Accounting Principles (IGAAP) prescribed under Section 133 of the Companies Act, 2013, (here-in-after referred to as âthe Actâ) read with Rule 7 of the Companies (Accounts) Rules, 2014. Ind AS is applicable to the Company with effect from 1 st April, 2016 with a transition date of 1 st April, 2015 and IGAAP as the previous GAAP. Accordingly, the Financial Statements have been prepared in accordance with Ind AS issued under the Companies (Indian Accounting Standards) Rules, 2015.

PERFORMANCE REVIEW

1. Financial Performance :

Your Directors are happy to inform that during the year under review, the company has established ever highest records on standalone basis, which are as follows :

- Profit Before Tax of Rs.715 Crore.

- Single quarter PBT of Rs.314 Crore for Fourth Quarter of FY 2016-17.

- Export of Rs.361 Crore to 55 Countries.

- Repayment of term debt of Rs.780 Crore.

- IT Division turnover of Rs.189 Crore and profit of Rs.51 Crore.

- Market capitalization of Rs.5,015 Crore.

- Dividend of Rs.5/- per equity share @ 50%.

The Company registered total turnover of Rs.4,944.81 Crore for FY 2016-17 as compared to Rs.4,845.85 Crore during previous year, registering a marginal increase of 2.04%. The performance of Chemical Segment was extraordinarily well registering Segment Profit of Rs.818 Crore, despite 140 Nil production days of TDI-II Plant, Dahej. The performance of Fertilizer Segment was also good, with Segment Profit of Rs.109 Crore before onetime items / abnormal factors. After accounting of onetime items / abnormal factors of Rs.104 Crore, on account of reversal of subsidy, the Company achieved Segment Profit of Rs.5 Crore in Fertilizer Segment for the year under review.

During the year, the Company exported various Industrial Products and achieved ever highest export turnover of Rs.361 Crore compared to Rs.212 Crore in previous year. While the contribution of TDI in the total export turnover was Rs.304 Crore (the main contributor), the other Industrial Products contributed Rs.57 Crore.

The Net Profit on consolidated basis was Rs.528.79 Crore as compared to Rs.179.86 Crore in the previous year.

2. Operational performance :

Your Company has achieved excellent production performance during the year. Most plants of the Company performed at high capacity utilization level. Ever highest annual production was achieved in various plants viz. Ammonia 6,45,347 MTs (144.86%), Urea 7,77,555 MTs (122.08%), Formic Acid 21,934 MTs (219.34%), Ammonium Nitro phosphate 2,20,311 MTs (154.60%), TDI-II 33,365 MTs (66.73%). In addition, Acetic Acid and Aniline Plants also operated at over 100% capacity and achieved production of 1,58,512 MTs (158.51 %) and 41,454 MTs (118.44%) respectively.

The Directors are happy to inform that TDI-II Plant is currently operating at more than 100% capacity on a consistent basis. With a view to increase safety, reliability and also to achieve sustainable operations of the plant, the Company has initiated necessary actions for implementation of various schemes with an estimated investment of Rs.50 Crore.

SALES 1. Industrial Products :

The Chemical Segment has performed extremely well for FY 2016-17 despite competitive scenario of Chemical business in the country and International Market. Almost all Industrial Products performed well in terms of sales and realization during the year. The Company sold in aggregate 12.55 Lac MTs of Industrial Products during 2016-17 as against 12.06 Lac MTs in the previous year and achieved total sales turnover of Rs.3061.65 Crore as compared to Rs.2704.14 Crore in the previous year. The outstanding performance of Chemical Segment was mainly attributed to smart marketing strategy and dynamic pricing of Companyâs products.

2. Fertilizer Business:

The year 2016-17 continued to remain challenging for Fertilizer Sector due to weak monsoon and high carried forward stock of last year in the country. Inspite of this, your Company performed well in the Fertilizer business. The Company sold total 10.37 Lac MTs of Urea (Manufactured and Traded) as compared to 8.10 Lac MTs in the previous year. The sale of Ammonium Nitro phosphate (ANP) was marginally lower at 2.16 Lac MTs compared to 2.20 Lac MTs in the previous year. Around 1 Lac MTs of Fertilizers were sold through Companyâs Narmada Khedut Sahay Kendras (NKSKs) in Gujarat. The Company has decided to expand its network of NKSKs progressively over a period of time.

The Company continued its trading activities in Muriate of Potash (MOP), indigenously sourced Di-Ammonium Phosphate (DAP), Single Super Phosphate (SSP), during the year and total 8500 MTs Fertilizers were sold as a part of trading activities.

3. (n)Code Solutions - IT Division:

(n)Code Solutions - IT Division has also significantly contributed in achieving the splendid performance of your Company during the year. This division has registered ever highest sales turnover of Rs.189 Crore compared to Rs.151 Crore in the previous year and contributed ever highest Profit Before Tax of Rs.51 Crore during the year as compared to Rs.38 Crore in previous year, registering an increase of 34% across all its business segments.

(n)Code Solutions has bagged major prestigious orders from Ahmadabad Janmarg Ltd., Surat Municipal Corporation - BRTS, Maharashtra Sales Tax Department, Mukhya Mantri Amrutam Yojna, etc.

To achieve sustained growth in IT business, (n)Code has undertaken several new initiatives in the areas of smart cities, intelligent transportation, system integration, Geographical Information Systems, security and surveillance, Digital Mapping and Surveys, business intelligence, Data Analytics, e-KYC, e-sign, etc.

Looking to the exponential growth of IT Division of your Company in terms of business and profitability since last more than three years and future growth opportunities in IT Sector and with a view to provide an operational flexibility befitting to its nature of business, which would ultimately pave the way for realizing the full potential of this division and to appropriately reflect its performance, your Directors decided to carve out wholly owned subsidiary of GNFC for its IT business rather than functioning as a division of the Company. Towards this direction, a wholly owned subsidiary of the Company in the name of âGujarat NCode Solutions Limitedâ has been incorporated on 28th February, 2017 for hiving off IT business to the said Company.

A detailed analysis of Companyâs operational and financial performance is presented under a separate section on âManagement Discussion & Analysisâ forming part of this report.

DIVIDEND

The Directors are happy to inform that in view of splendid performance of the Company for FY 2016-17 and to ensure that shareholders get sustained and stable return on their investments, your Directors have recommended ever highest dividend of Rs.5/- per share (50%) on 15,54,18,783 equity shares of Rs.10/- each for FY 2016-17, subject to approval of shareholders at this Annual General Meeting (AGM). The dividend payout would work out to Rs.78 Crore plus dividend tax of Rs.16 Crore and the total outgo works out to around Rs.94 Crore. This amounts to 18% of the Net Profit of the Company.

Your Company has earned Net Profit of Rs.521 Crore for FY 2016-17. After deducting there from Rs.9 Crore being the re-measurement losses on defined employee benefit plans and adding thereto Rs.153 Crore being the balance of Statement of Profit & Loss brought forward from previous year, an amount of Rs.665 Crore is available for appropriation. Out of this, Rs.37 Crore (inclusive of Tax on Dividend) is appropriated towards payment of dividend for FY 2015-16. The balance amount of Rs.628 Crore is proposed to be carried to Balance Sheet. The Company proposes to transfer Rs.115 Crore to General Reserve upon declaration of Dividend for FY 2016-17.

FERTILIZER INDUSTRY - GOVERNMENT POLICY :

International market of Fertilizer saw a fall in prices during the year. Government of India (GoI) increased subsidy on nitrogen nutrient and decreased subsidy on P&K nutrient covered under Nutrient Based Subsidy Policy for FY 2017-18 resulting into combined effect of reduction or increase in subsidy on finished fertilizers depending upon the content of nutrient.

GoI is slowly but steadily pursuing its initiatives to transfer subsidy directly to the farmers. The pilot project for payment of Fertilizer subsidy as âDirect Benefit Transferâ (DBT) is under implementation in 19 Districts across the Country, including Narmada District in Gujarat. GoI is planning to roll out DBT across the country very soon.

Recently, GoI has enacted the Central Goods & Service Tax (GST) Act, 2017 in the Parliament and made effective from 1st July, 2017. The applicable GST rate on Fertilizers is 5% which will marginally reduce the cost of Fertilizers across the country except in few states where there was no tax on Fertilizers earlier. This is in the interest of Farmers and also augurs well for the growth of the company.

Due to Government Policy of 100% Neem Coating of Urea, efficiency of Fertilizers has gone up and it has pesticide effect too. Therefore, the consumption of Urea has been reduced. This has reduced import of Urea, resulting into saving of precious foreign exchange of the country.

As per the directives of GoI to all Fertilizer Companies for opening âModel Fertilizer Retail Shopsâ, your Company has upgraded its 25 Retail Outlets out of total 68 Retail Outlets. And as per the directives to all Chemical Fertilizer suppliers for promoting and marketing City Compost Fertilizers (CCF), your Company has started marketing CCF in Gujarat and sold around 7000 MTs during FY 2016-17.

NEW INITIATIVES 1. Neem Project :

Following the directives of Government of India for 100% Neem coating of Urea, your Company had undertaken an innovative Socio-Economic Neem Project in 2015 and became the first Fertilizer Company in India to implement the Neem Project. During the year, about

11,300 MTs of Neem Seeds were collected through unique network of community based organizations, providing additional income to about 1.25 lac poor rural women and other marginalized communities. During the year under review, the Company has produced around 890 MTs of Neem Oil and 7,000 MTs of Neem Cake.

It was reported last year that the Company is planning to set-up its own production facility of Neem Oil. Your Directors are happy to inform that the Company has established facility for expelling 5,000 MTPA of Neem Seeds to produce high quality Neem Oil at Bharuch. As a forward integration and to promote the use of Neem Oil, facility for manufacturing Neem Soap and Neem Oil (for domestic and personal care use) and pesticides have been developed. Additional facilities are also setup to manufacture Neem Oil based products such as Hand-wash, Shampoo, Face wash and Hair Oil. Actions have also been initiated to set-up Neem Seeds extraction unit on a large scale to produce about 2,900 MTPA Neem Oil and about 22,000 MTPA Neem Cake.

This innovative Socio-economic Neem Project - the first of its kind in India has won several National and International prestigious awards, the details of which are separately provided in this report under the heading âAwards and Accoladesâ. Ministry of Fertilizers has advised other Fertilizer Companies to replicate Neem Project. Honâble Prime Minister was kind enough to praise GNFCâs initiative in collecting neem seeds and producing neem oil by providing additional income to Lacs of women, in his interview to CNN IBN in September, 2016.

2. Contributing towards âDigital Indiaâ Goal :

It is a matter of proud for all of us that your Company became the first Fertilizer Company in India to have its 100% Cashless Township following the clarion call of Honâble Prime Minister of India for âDigital Indiaâ. This cashless initiative is well recognized at the highest level in Government of India, Government of Gujarat and other States of the Country. The Company is also facilitating the farmers to buy Fertilizers and other Agri-inputs through cashless mode by installing PoS Machines, Mobile App, on-line applications, e-wallets, use of debit / credit cards, RTGs / NEFT, etc. The farmers and retailers are encouraged by offering them various incentives for cashless transactions. GNFC has so far sold 23.17 Lac Bags of Fertilizers to 2.11 Lac farmers amounting to Rs.79.48 Crore through cashless transactions.

Honâble Prime Minister was kind enough to praise GNFCâs initiatives in Cashless sale of Fertilizers during his National address in âMann-Ki-Baatâ on 25th December, 2016. Under the auspice of NITI Ayog, the Apex Planning Body of India chaired by Honâble Prime Minister of India, GNFCâs Cashless Township Model has been implemented in 81 Integrated Townships across 12 States of India.

The Companyâs contribution to this innovative framework of cashless initiatives has been well recognized at National and International Level and won several prestigious awards, the details of which are separately provided in this report under the heading âAwards and Accoladesâ.

3. Di-Calcium Phosphate Project :

The project execution activities for setting-up of 2 Lac MTPA Di-calcium Phosphate (DCP) Project at Dahej are under progress by EcoPhos GNFC India Pvt. Ltd., a Joint Venture Company set-up with EcoPhos s.a. Belgium. The estimated cost of the said project is Rs.538 Crore with an equity investment in the ratio of 15:85 by GNFC and EcoPhos s.a. Belgium respectively. The Company is concentrating on speedy implementation of project as downstream integration of TDI-II Plant and the project is expected to be completed by December, 2018.

With the completion of this project, entire HCI generated as by-product from TDI-II Plant will be consumed for production of DCP, which would help in improving the profitability of TDI business.

4. Solar Power Generation Project :

The Company has entered into a Memorandum of Understanding with a Saudi Arabian Company for setting-up about 40 MW Solar Power Generation facilities at Bharuch and Dahej in order to fulfill the Renewable Purchase Obligations applicable to the Company, in terms of Notification issued by Gujarat Electricity Regulatory Commission. The feasibility study for setting-up of this project is being conducted and further course of actions will be decided based on positive outcome of feasibility study.

5. Coal based Captive Co-generation Power Plant at Dahej:

The Company has set-up 100 MT/hr capacity gas based Boiler at TDI-II Plant, Dahej to meet captive steam requirement, while the power is being sourced from DGVCL Grid. There is a large variation in gas prices. With a view to reduce the cost of steam & power for captive requirement and to improve its reliability, your Company is planning to set up a Coal based Captive Co-generation Power Plant with a capacity to produce 18 MW power and 150 MT/hr steam at Dahej.

6. Lime purification Project :

Post successful outcome of pilot plant trials in previous year, the Company has entered in to a Joint Venture Agreement with M/s Santosh Agrochem LLP (SAC) to establish the facility for purification of by-product Lime generated from ANP Plant to make it more marketable. This will resolve the environmental issues and at the same time add value to the product.

The facility of lime purification will be established at Bharuch Complex in two Phases with total annual capacity of 100,000 MT per annum through a joint venture Company M/s. Calciwell Chemtech Pvt Ltd. (CCPL). The estimated cost of the project is Rs.50 Crore with an equity investment for GNFC and SAC in the ratio of 10:90 respectively. Activities related to project implementation are under progress.

AWARDS & ACCOLADES :

Your Directors are delighted to inform that the Company has won many National and International prestigious Awards from Governments and other renowned Institutions, in recognition of unique work done in the areas of Cashless initiatives and Neem Project, which are listed below :

- Skoch Order of Merit Award for Neem Project.

- Skoch Blue Economy Platinum Sustainability Award- 2016.

- Skoch Blue Economy Person of the Year Award to Dr. Rajiv Kumar Gupta, IAS, Managing Director for his exemplary leadership in conceiving, designing and managing the Neem Project.

- Golden Peacock Award-2017 in CSR for Neem Project.

- ABP News Award for Excellence in CSR - Women Empowerment.

- Global CSR Award for Women Empowerment.

- Porter prize for Neem Project which is sponsored and supported by Harvard affiliated Institute for Competitiveness by Michael Porter.

- India CSR Community initiative Award for Women Empowerment.

- Business World Digital India Award for Best implementation of Digital Payments.

- Golden Peacock Product / Service Award - 2017 for Cashless Township.

- Golden Globe Tigers Award for Excellence and Leadership in CSR for e-payment leadership.

- India CSR Leadership Summit Award for Most Innovative Neem Project of the year.

- Skoch Order of Merit Award for Corporate Excellence for innovation - 100% Cashless drive.

DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to Sections 134(3)(c) and 134(5) of the Act, the Directors state that-

(i) in the preparation of Annual Accounts for the financial year ended 31 st March, 2017, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any, therefrom had been furnished;

(ii) they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

(iv) they had prepared Annual Accounts on a going concern basis;

(v) they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

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

DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES

The Company has an Associate Company namely Gujarat Green Revolution Co. Ltd. (GGRCL). A Statement containing salient features of Financial Statement of GGRCL is given in Form AOC-1 as an Annexure to the Consolidated Financial Statements and the same has not been repeated here for the sake of brevity.

During the year, a wholly owned subsidiary of the Company in the name of âGujarat NCode Solutions Limitedâ (GNSL) was incorporated on 28th February, 2017.

The first Accounting Year of GNSL is from the date of incorporation i.e. from 28th February, 2017 to 31st March, 2018. Therefore, report on performance and financial position in respect of GNSL has not been furnished in this Report.

The first Accounting Year of EcoPhos GNFC India Pvt. Ltd. (EGIL) a Joint Venture Company has ended on 31st March,

2017. The project execution activities have recently commenced and therefore, report on operational performance and financial position of EGIL for FY 2016-17 has not been furnished in this Report.

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Section 129(3) of the Act, read with Regulation 33 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has prepared Consolidated Financial Statement in respect of Gujarat Green Revolution Co. Ltd., being an Associate Company for FY 2016-17 and forms part of this Annual Report.

Gujarat NCode Solutions Ltd. (GNSL), a wholly owned subsidiary of the Company and EcoPhos GNFC India Pvt. Ltd. (EGIL), a Joint Venture Company falls within the category of subsidiary. As per Ind AS, the accounts of GGRCL and GNSL are only required to be consolidated. However, GNSL being newly formed entity having financial transactions after 31st March, 2017, only the accounts of GGRCL have been consolidated.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

During the year, the Company made an additional investment of Rs.24.20 Crore in the equity capital of EcoPhos GNFC India Private Ltd., a Joint Venture Company by subscribing

10,07,300 equity shares of Rs.10/- each for cash and 2,32,01,200 equity shares of Rs.10/- each, other than cash by executing an Agreement for sub-letting land to EGIL for setting-up of DCP Project.

The Company has also made an investment of Rs.1 Lac in the equity of Gujarat NCode Solutions Ltd., a wholly owned subsidiary of the Company by subscribing 10,000 equity shares of Rs.10/- each as subscribers to the Memorandum of Association.

The Company has not given any Loan or Guarantee or provided any Security in connection with loan to any other body corporate or person during the year.

PARTICULARS OF CONTRACT OR ARRANGEMENT MADE WITH RELATED PARTY

The Policy for Related Party Transactions (RPTs) is available on the Companyâs website, which deals with review and approval of RPTs. The Audit Committee has granted Omnibus approval for RPTs, which are routine and repetitive in nature, based on criteria approved by the Board of Directors within the overall framework of said policy.

The Company executed an agreement with M/s EcoPhos GNFC India Pvt. Ltd., a joint venture Company for sub-letting of land admeasuring about 130052 sq. mtrs. situated at Dahej for consideration of Rs.23.20 Crore, for setting-up of DiCalcium Phosphate Project, initially for a period of 20 years, with a right to further extend the same. The said transaction being related party transaction under Section 188(1) of the Act, the Company has made necessary compliance as required under the Act.

During the year, the Company had not entered into any contract or arrangement with related parties, which could be considered âmaterialâ (i.e. transaction exceeding 10% of the annual consolidated turnover as per the last Audited Financial Statement entered into individually or taken together with previous transaction during the financial year) according to the Policy on Related Party Transactions. Hence, there is no transaction, which is required to be reported in Form AOC-2. Suitable Related Party disclosure under Ind AS-24 is also reported in the Note No.37 to the Standalone Financial Statement.

Details on RPTs has also been furnished in the âReport on Corporate Governanceâ forming part of this report.

MEETINGS OF THE BOARD & COMMITTEES THEREOF

(i) Board Meeting :

Five (5) meetings of the Board were held during the year.

(ii) Committees of the Board :

Currently, there are six Committees of the Board as under:

1. Audit Committee;

2. Stakeholdersâ Relationship Committee;

3. Nomination and Remuneration Committee;

4. Corporate Social Responsibility Committee;

5. Project Committee; and

6. Human Resource Development Committee.

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

REMUNERATION POLICY FOR DIRECTORS / KEY MANAGERIAL PERSONNEL / SENIOR MANAGEMENT AND OTHER EMPLOYEES

The Company has formulated a Nomination, Remuneration & Evaluation Policy as required under Section 178 of the Act and SEBI (Listing Obligations & Disclosure Requirements),

Regulations, 2015. The details of remuneration to Directors / Key Managerial Personnel / Senior Management and other employees are furnished in the ââReport on Corporate Governanceââ, forming part of this Report.

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The Company has carried out annual performance evaluation of the Board, its Committees and Individual Directors in line with the provisions of the Act and SEBI (LODR) Regulations,

2015.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, Dr. J.N. Singh, IAS was nominated by Govt. of Gujarat as its nominee and appointed Chairman of the Company effective from 31st August, 2016. Shri Anil Mukim, IAS was appointed Additional Director on the Board effective 30th September, 2016, who will hold office up to the date of this AGM. Shri Anil Mukim, IAS being eligible for appointment, a suitable resolution proposing his appointment as Rotational Director is included in the Notice of this AGM for your kind approval.

Prof. Arvind Sahay and Shri C.S. Mani were appointed as Independent Directors (IDs) at the 38th AGM held on 26th September, 2014 for a term of three years up to 30th September, 2017. Accordingly, their term of office will expire on that date. They are eligible for re-appointment as IDs in terms of Section 149(10)(11) of the Act. Therefore, suitable resolutions proposing their re-appointment as IDs are included in the Notice of this AGM for your kind approval.

Retirement by Rotation:

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

Declaration by Independent Directors:

Change in Directorate :

The information relating to change in other Directorship during the year is furnished in the âReport on Corporate Governanceâ forming part of this report.

Your Directors place on record their deep sense of appreciation of the valuable services rendered by the outgoing Directors and take this opportunity to welcome the new Directors.

Key Managerial Personnel :

During the year under review -

(i) Shri Vikram Mathur ceased to be Chief Financial Officer (CFO) w.e.f. 30th September, 2016 and Shri D.V. Parikh was appointed as CFO effective from 1 st February, 2017.

(ii) Shri R.B. Panchal ceased to be Company Secretary and Compliance Officer w.e.f. 30th November, 2016 and Shri T.J. Lakhmapurkar was appointed as Company Secretary and Compliance Officer w.e.f. 1st December, 2016.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the applicable provisions of the Companies Act 2013, and relevant Rules made thereunder, all unpaid or unclaimed dividends are required to be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government after the completion of seven years. Accordingly, the Company has transferred unclaimed / unpaid dividend amount to IEPF.

Further, pursuant to the IEPF Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017 (''the Rules''), the Company is mandated to transfer all such shares in respect of which Dividend amount remains unclaimed / unpaid for a consecutive period of seven years or more to the demat account opened by the IEPF Authority. The details of such shares are available on Company''s website at web link http://www.gnfc.in/PDFandWORD/List-of-Shareholders.pdf.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The Company has in place a Risk Management Policy. Under this Policy, various risks pertaining to operations & maintenance of plants, financial and other organizational risks are assessed, evaluated and continuously monitored for taking effective mitigation steps. The Audit Committee and Board of Directors periodically review the Risk Management Report, inter-alia, containing major anxiety areas and action plan for their mitigation and noteworthy risk management activities carried out by the Company.

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

EXTRACT OF ANNUAL RETURN

In accordance with Sections 92(3) & 134(3)(a) of the Act, an extract of Annual Return in Form MGT-9 is enclosed as Annexure - I to this Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In accordance with the requirement of Section 135 of the Act, read with the Companies (CSR Policy) Rules, 2014, the Company has constituted a Corporate Social Responsibility Committee and formulated a CSR Policy. As a responsible corporate, the Company has been undertaking societal activities directly as well as through its CSR arm -Narmadanagar Rural Development Society (NARDES) in the areas covered in CSR Policy and Schedule -VII to the Act. Annual Report on CSR activities for FY 2016-17 is enclosed as Annexure - II to this Report.

VIGIL MECHANISM-CUM-WHISTLE BLOWER POLICY

The Company has formulated a âVigil Mechanism-cum-Whistle Blower Policyâ for Directors and employees of the Company to report their genuine concerns, details of which have been given in the âReport on Corporate Governanceâ, forming part of this Report.

SIGNIFICANT AND MATERIAL ORDERS

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

MANAGEMENT DISCUSSION & ANALYSIS AND REPORT ON CORPORATE GOVERNANCE

The âManagement Discussion & Analysisâ on the business and operations of the Company and the Report on Corporate Governance together with the following are attached herewith and form part of this Annual Report.

- Declaration of Code of Conduct.

- Certificate from Practicing Company Secretary with regard to Companyâs compliance with the conditions of Corporate Governance.

INFORMATION REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

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

PARTICULARS OF EMPLOYEES AND REMUNERATION

The required information under Section 197(12) of the Act read with Rule 5(1)(2)&(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed as Annexure - IV & V to this Report.

AUDITORS AND AUDITORSâ REPORT

M/s SRBC & Co. LLP, Chartered Accountants, a Member Firm of E&Y India were appointed as Statutory Auditors of the Company at the 40th AGM held on 30th September, 2016 for a term of five consecutive years, until the conclusion of 45th AGM to be held in the year 2021, subject to ratification of their appointment at every AGM held thereafter. A suitable resolution for ratification of their appointment has been included in the Notice of this AGM.

Notes to Financial Statements (Standalone and Consolidated) forming part of Audited Financial Statements for FY 2016-17 are self explanatory and need no further explanation. The Auditors'' Reports on Audited Financial Statements (Standalone and Consolidated) do not contain any modified opinions.

COST AUDITOR

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

In accordance with Section 148 of the Act read with Rule 14 of the Companies (Audit & Auditors) Rules, 2014, the remuneration payable to Cost Auditor is subject to ratification by the Shareholders at the AGM. Therefore, a suitable Resolution for ratification of remuneration to Cost Auditor for FY 2017-18 is included in Notice of this AGM for your kind approval.

The Company has e-filed the Cost Audit Report for FY 2015-16 with the Ministry of Corporate Affairs (Cost Audit Branch) on 20th August, 2016. The due date of filing the said report was 30th September, 2016.

SECRETARIAL AUDITOR

As required under Section 204 of the Act and the Rules there under, the Board has appointed Shri V.L. Vyas, Practicing Company Secretary as Secretarial Auditor for FY 2016-17. The Secretarial Audit Report in Form MR-3 is enclosed as Annexure - VI, which does not contain any qualification, reservation or adverse remark.

DIVIDEND DISTRIBUTION POLICY

As per Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2016, Top 500 listed companies are required to formulate Dividend Distribution Policy based on market capitalization (calculated as on 31st March every year). Your company is covered under the top 500 listed companies as per the market capitalization as on 31st March, 2017. Accordingly, the Company has formulated a Dividend Distribution Policy, inter-alia, setting-out the parameters and circumstances that will be taken into account in determining the distribution of dividend to the shareholders and / or retaining profits by the Company. This policy is enclosed as Annexure-VII and the same is also available on the Companyâs website at web link http://www.gnfc.in/aboutus/corporate-policies.html

DETAILS OF FRAUDS, IF ANY, REPORTED BY THE AUDITORS

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

FIXED DEPOSITS

The Company has not accepted any Fixed Deposit during the year. No amount on account of principal or interest was outstanding as on the date of Balance Sheet.

INSURANCE

INDUSTRIAL RELATIONS

Industrial relations during the year under review have remained extremely cordial and harmonious. Your Directors convey their high sense of appreciation for the significant contribution made by the employees at all levels in achieving excellent all around operational and financial performance of the Company.

ACKNOWLEDGEMENTS

For and on behalf of the Board of Directors,

Place : Gandhinagar Dr. J.N. Singh

Date :19th August, 2017 Chairman

Mar 31, 2014

The Members,

The Directors have pleasure in presenting this 38th Annual Report together with Audited Statement of Accounts of the Company for the year ended 31st March, 2014.

The fiscal year 2013-14 was a challenging year for Indian Economy. There was a marginal rise in the growth of Indian economy at 4.7% in 2013-14 from 4.5% in 2012- 13, confi rming the signs of sticky slow down. The growth of economy below 5% in 2013-14 is primarily the result of continued slowdown in the Industrial Sector and lower growth in certain segment of service sector. Impact of deceleration in the growth rate in the earlier year had continued.

In the back drop of this sluggish economy, the performance of your company during 2013-14 remained reasonably satisfactory, thanks to the resilient trend in Chemical business segment and company''s efforts to take advantage of the same.

In its quest for excellence, the company has continued its emphasis on higher productivity, adoption of smart marketing strategies, energy saving, effi ciency improvement and cost control / cost savings measures. During the year, 101 new records were established on production and marketing fronts.

FINANCIAL RESULTS

Summary of fi nancial results : (Rs. in Crore)

Particulars 2013-14 2012-13

Income from operations 4,847.19 4,252.57

Other Income 45.05 40.38

Total Income 4,892.24 4,292.95

Total Expenditure 4,230.73 3,659.32

Profit before Depreciation, Finance Cost and Tax 661.51 633.63

Depreciation 145.31 148.55

Finance Cost 92.37 62.68

Profit before Tax (PBT) 423.83 422.40

Provision for Taxes 131.56 149.29

Net Profit for the year 292.27 273.11

Balance brought forward from previous year 394.49 485.02

Amount available for Appropriation 686.76 758.13

Appropriations

Proposed Dividend 54.40 54.40

Tax on Dividend 9.24 9.24

Transferred to General Reserve 300.00 300.00

Balance carried to Balance Sheet 323.12 394.49

YEAR IN RETROSPECT

Your company achieved sales turn-over of Rs. 4,847.19 Crore compared to Rs.4,252.57 Crore in the previous Financial Year, registering an increase of 13.98%. The turnover was higher mainly on account of increased volume of production and increased sales realization. Profi t Before Tax was higher at Rs.423.83 Crore as against Rs.422.40 Crore of the previous financial year. Profit After Tax was Rs.292.27 Crore as against Rs.273.11 Crore of the previous fi nancial year.

DIVIDEND

The company''s financial performance for the year 2013-14 was more or less comparable with that of previous financial year. Keeping in view the company''s performance and the requirement of fund for its future growth and to ensure that the shareholders get sustained return on their investments, your Directors have recommended a dividend of Rs 3.50 per equity share (35%) on 15,54,18,783 equity shares for the year ended 31st March, 2014. The dividend on equity shares is subject to the approval of the shareholders at the Annual General Meeting. On its approval, the dividend payout will work out to Rs.63.64 Crore, including tax on dividend of Rs.9.24 Crore. This amounts to 21.77% of the Net Profit.

APPROPRIATIONS

Your company earned Net Profit of Rs.292.27 Crore for the year 2013-14. After adding thereto Rs.394.49 Crore being the balance of Statement of Profit & Loss brought forward from the previous year, amount available for appropriation is Rs.686.76 Crore. Out of this, Rs.63.64 Crore, including tax on dividend is earmarked for dividend. The company proposes to transfer Rs.300 Crore to General Reserve. An amount of Rs.323.12 Crore is proposed to be retained in the Statement of Profit & Loss.

PERFORMANCE REVIEW

The year 2013-14 was one of the challenging year for chemical business in the country due to overall cost increase and moderate industrial growth coupled with increased competition due to free fl ow of material from international markets. The company has to sell its products keeping parity in prices with imports.

In order to get an edge over competition, a strategy had been formulated by your company during the year to excel both in production and marketing of its products. Keeping this strategy in mind, concerted efforts were made to achieve highest production levels in most of the products with optimum cost. Accordingly, various all time best records were established during 2013-14.

PRODUCTION

Most plants of the company operated at over 100% capacity utilization. Ever highest yearly production was achieved in Ammonia, Ammonia Syngas Generation, Neem coated Urea, Formic Acid, Methyl formate, Ethyl Acetate, Weak Nitric Acid, Concentrated Nitric Acid and Captive Power Generation. Total 66 Ever highest records of production were made during 2013-14.

The company continuously monitors the plants operations and implement various modifi cation schemes, to save energy and to increase plant reliability and production thereby improving the Profitability of the company.

Production of Calcium Ammonium Nitrate (CAN) was discontinued in view of the same falling within the ambit of Ammonium Nitrate Rules 2012, made effective from 11th January 2014.Consequently, AN Melt sale was maximized resulting into improved Profitability.

SALES

Industrial Products

To supplement the production efforts, special drive had been made in the marketing of chemical Industrial Products through innovative marketing, market segmentation and smart pricing. A niche market has been created for many of its products like Acetic Acid, Nitric Acid, AN Melt, Aniline and Formic Acid.

Total 35 Ever highest records of sales were made during 2013- 14. All time best annual sales records were made during the year 2013-14 in Weak Nitric Acid, Concentrated Nitric Acid, AN Melt, export of Methyl Format and Ethyl Acetate. The sale of Ethyl Acetate at 51360 MTs was signifi cantly higher as compared to previous best of 13837 MT during 2012-13. Similarly AN Melt sale of 127087 MT was signifi cantly higher compared to previous best of 88493 MT during 2012-13.

There was alround increase in quantity sold, turn-over, price realization and contribution of chemical Industrial Products during 2013-14 compared to previous year. This was possible due to smart and dynamic pricing of the company''s products, keeping a close watch on cost of production and opportunity to increase price during the year.

Methanol is imported in our Country to the tune of about 19 Lac MTs per annum. Out of this, about 14 Lac MTs of Methanol is imported from Iran itself. Your company is the largest producer of Methanol in the Country. However, due to high cost of Natural Gas, the company has been fi nding it diffi cult to compete with the imported material. To offset this disadvantage, specifi c efforts were made to fi nalize a yearly supply contract of Methanol at very attractive terms with one of the leading producers of Methanol in Iran. The company has also handled import of Acetic Acid. The other signifi cant effort made by the company was to

stream line AN Melt sale logistics, post implementation of stringent Ammonium Nitrate Rules, 2012.

Fertilizers

The Fertilizer business was good through-out the year. The company sold in aggregate 9.35 Lac MTs of fertilizers (both manufactured & traded) during the year. Out of this, 6.96 Lac MTs of Fertilizers constituting 74% of the total sales were sold in the primary sales zone comprising Home State Gujarat and the adjoining States - Maharashtra, Madhya Pradesh and Rajasthan and more than 1 lac MTs of fertilizers were sold through company''s Narmada Agri marts in Gujarat during the year. The company continued its trading activities in Single Super Phosphate (SSP) and commenced trading of indigenously sourced Di-Ammonium Phosphate (DAP) and Muraite of Potash (MoP) during the year.

(n)Code Solutions Â IT Division

(n)Code Solutions has continued its growth and expansion in the IT Sector during the year by achieving record sales of Rs.102 Crore, registering an increase of 29% over the previous year, based on strong performance of all its business segments. It remains the market leader in Digital Certifi cate business maintaining about 40% market share.

(n)Code implemented a unique project on behalf of Bharat Electronics Limited (BEL) for securing voting data in the Electronic Voting Machines (EVMs) using PKI (Public Key Infrastructure) Technology. It also implemented a city-wide surveillance project for Ahmedabad Municipal Corporation, one of the largest such projects in the Country and received several recognitions and awards in the fi eld of IT.

(n)Code has undertaken several initiatives during the year in new business lines such as Cloud Computing, IT Management Systems for BRTS, as also Technology based E-Governance Solutions to realize better growth in the coming years.

STATUS OF PROJECTS

As reported last year, Ammonia Syngas Generation Project (ASGP) and TDI-II Project at Dahej were under implementation.

1. Ammonia Syngas Generation Project

During the year, commercial production of ASGP has been declared and the plant has operated at more than 100% capacity in the fi rst year of its operation.

2. TDI-II Dahej Project

The commercial production of TDI-II Plant has been declared on 24th March 2014. TDI-II Plant, Dahej has faced the problem of gas emission during the initial production days. For ensuring the plant worthiness for restarting the plant, hazard operatability study (HAZOP) was carried out by M/s Lloyds Registers Asia,

Mumbai, necessary modifi cations were made and the plant was restarted. However, due to complex and diffi cult technology, the stabilization of operations of the plant is taking time, which has created an anxiety for the company. Looking to the cost of manufacture and prevailing market conditions including price, economic operation of plant currently seems diffi cult. Experts in TDI Technology have been drawn from world-over by M/s Chematur Engineering AB, Sweden, the technology supplier, to supervise and guide the technical personnel of the company. An Action Plan has been drawn and is under implementation for restart, stabilization and economical operation of the plant.

NEW INITIATIVES

With a view to accelerating growth momentum, the company is continuously exploring potential business opportunities in the areas having synergy with company''s existing business operations. Towards this direction, following projects are under active consideration by the company:

Brown fi eld Ammonia ~ Urea Project

The company has initiated actions for setting up a Brown fi eld Ammonia ~ Urea Project at Bharuch and has already expressed its interest to the Department of Fertilizers for setting up the Project. The New Investment Policy, 2012 for Urea, announced last year, is under review by Government of India and appropriate actions will be taken by the company based on the fi nal policy.

Di-Calcium Phosphate Project

Newly commissioned TDI- II Plant at Dahej will generate Hydrochloric Acid (HCl) as by-product. The company has initiated actions for setting up of Di-Calcium phosphate project based on HCl. The company is actively pursuing joint venture with a leading technology supplier of International repute for the same.

Aniline Expansion Project

The company is also considering expansion of the capacity of Aniline based on the availability of surplus hydrogen.

FERTILIZER POLICY

Taking forward the Government''s initiative to transfer the subsidy directly to the farmers, Government of India (GoI) launched pilot projects in six more Districts, including Narmada District in Gujarat, in addition to the pilot projects initially launched in six selected Districts across India. Our company has been assigned the responsibility of co-ordinating the pilot project launched in Narmada District.

The subsidy rates on P&K fertilizers notifi ed by GoI last year under Nutrient Based Subsidy (NBS) Policy have been continued during the current year also. Looking to

the increased cost of production, most of the Fertilizer Companies, including our company have increased the selling price of P&K Fertilizers, which has resulted into increase in realization.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, your Directors hereby confi rm that -

- in the preparation of the Annual Accounts for the year 2013-14, the applicable Accounting Standards have been followed and there are no material departures;

- they have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March, 2014 and of the Profit of the company for the fi nancial year;

- they have taken proper and suffi cient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956. They confi rm that there are adequate systems and controls for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

- they have prepared the Annual Accounts on a going concern basis.

CORPORATE GOVERNANCE

As per the requirement of Clause 49 of the Listing Agreement, a Report on Corporate Governance together with the following are attached herewith and form part of this Annual Report:

- Declaration on the Code of Conduct.

- Certifi cate from the Practicing Company Secretary with regard to company''s compliance with the conditions of Corporate Governance.

MANAGEMENT DISCUSSION & ANALYSIS

Management Discussion & Analysis on the business and operations of the company is attached herewith and forms part of this Annual Report.

DEMERGER OF V-SAT / ISP GATEWAY BUSINESS

As reported last year, the Scheme of Arrangement and Demerger for transfer of company''s V-SAT / ISP Gateway Business to ING Satcom Limited sanctioned by Hon''ble High Court of Gujarat, is subject to and conditional upon the approval of Government Authorities for transfer of Licenses. Applications submitted for transfer of V-SAT / ISP Gateway Business Licenses standing in the name of company to the name of transferee company viz., ING Satcom Ltd. are pending before the Department of Telecommunications (DoT), Govt. of India.

FIXED DEPOSITS

The company has not accepted any Fixed Deposit during the year. No amount on account of principal or interest on Fixed Deposits was outstanding as on the date of Balance Sheet.

INSURANCE

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

DIRECTORATE

Change in Directorship

- Shri DC Anjaria retired by rotation at the last Annual General Meeting held on 21/9/2013.

- Dr. Ashok Shah ceased to be a Director vide resignation effective 10/6/2014.

- Prof. Arvind Sahay and Shri Chandrasekhar Mani have been appointed as Additional Directors (Independent Category) effective 4th August, 2014. They have been recommended by the Board to appoint them as Independent Directors at this AGM.

In terms of the provisions of Section 161 of the Companies Act, 2013, Prof. Arvind Sahay and Shri Chandrasekhar Mani hold offi ce up to the date of this AGM. The company has received Notices in writing from a Member under Section 160 of the Companies Act, 2013 along with requisite deposit proposing their appointment as Independent Directors at this AGM.

In pursuance of the provisions of Articles of Association as also of the provisions of Companies Act, two Directors viz, Dr. TT Ram Mohan and Shri GC Murmu, IAS, who are liable to retire by rotation, will retire at this AGM. And Shri GC Murmu, IAS, is proposed to be reappointed as Rotational Director at this AGM.

Your Directors place on record their deep appreciation of the valuable services rendered by the outgoing Directors and take this opportunity to welcome the new Directors.

INFORMATION REGARDING CONSERVATION OF ENERGY, ETC., AND PARTICULARS OF EMPLOYEES

Information 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 and information as per Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, are given in Annexure Â ''A'' & ''B'' respectively forming part of this report.

AUDITORS AND AUDITORS'' REPORT

In pursuance of the provisions of the Companies Act, 1956, M/s Deloitte Haskins & Sells, Chartered

Accountants, Ahmedabad, who are the Statutory Auditors of the company, hold offi ce up to the conclusion of the forthcoming Annual General Meeting and they are eligible for reappointment.

In terms of the provisions of new Companies Act, 2013, an Ordinary Resolution for reappointment of M/s Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad, as Statutory Auditors of the company to hold offi ce from the conclusion of this AGM until the conclusion of 40th AGM to be held in the year 2016 for a term of two consecutive years and fi xation of their remuneration, has been included in the Notice of this AGM.

Notes to Accounts forming part of Audited Financial Statements are self explanatory and need no further explanation. There are no qualifi cations or adverse remarks in the Auditors'' Report, which require any clarifi cation / explanation.

COST AUDITOR

The Board of Directors has based on recommendation of Audit Committee, appointed Shri Shirish V Diwanji, Cost Accountant of M/s Diwanji & Associates, Vadodara, as the Cost Auditor of the company for fi nancial year 2014-15. In accordance with the provisions of Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Audit & Auditors) Rules, 2014, the remuneration payable to the Cost Auditor is required to be ratifi ed/approved by the shareholders of the company. A suitable Ordinary Resolution in this regard, is included in the Notice of this AGM. The company has e-fi led the Cost Audit Report for the fi nancial year 2012-13 with the Ministry of Corporate Affairs (Cost Audit Branch) on 20/9/2013. The due date of fi ling the said report was 27/9/2013.

INDUSTRIAL RELATIONS

Industrial relations during the year under review have remained extremely cordial and harmonious. Your Directors convey their high sense of appreciation for the contribution made by the employees at all levels.

ACKNOWLEDGEMENTS

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

For and on behalf of the Board of Directors,

Place : Gandhinagar Dr. Varesh Sinha Date : 16th August, 2014 Chairman

Mar 31, 2013

To The Members,

The Directors have pleasure in presenting this 37th Annual Report together with Audited Statements of Accounts of the Company for the year ended 31st March, 2013.

The year under review proved to be a challenging year for the Indian economy. Years of lavish spending, a long struggle with high inflation, high interest rates and fragile global economy has put back India in a rut. The slowdown in the rate of growth of services during 2011-12 and particularly in 2012-13 contributed significantly to slowdown in the overall growth of economy, while some slowdown could also be attributed to lower growth in agriculture and industrial activities. As a consequence of this, India''s GDP growth hit decade low of 5%.

In the backdrop of the sluggish economy, the Company performed reasonably well, thanks to buoyancy displayed in chemical business segment.

Year 2012-13 was celebrated as the "Energy Conservation Year" at GNFC. Continuous efforts of your Company towards energy saving, cost control and thus, achieving higher productivity, have resulted in surpassing many milestones during the year in Production, Marketing and Dispatch of Company''s products as well as in terms of the operative parameters.

FINANCIAL RESULTS

Summary of financial results: (Rs. in Crore)

Particulars 2012-13 2011-12

Income from operations 4,252.57 3,862.01

Other Income 40.38 30.09

Total Income 4,292.95 3,892.10

Total Expenditure 3,659.32 3,310.58

Profit before Depreciation,

Finance Cost and Tax 633.63 581.52

Depreciation 148.55 130.53

Finance Cost 62.68 33.59

Profit Before Tax (PBT) 422.40 417.40

Provision for Taxes 149.29 133.56

Net Profit for the year 273.11 283.84

Balance brought forward from previous year 485.02 564.41

Amount available for Appropriation 758.13 848.24

Appropriations

Proposed Dividend 54.40 54.40

Tax on Dividend 9.24 8.82

Transferred to General Reserve 300.00 300.00

Balance carried to Balance Sheet 394.49 485.02

YEAR IN RETROSPECT

Your Company achieved sales turn-over of Rs. 4,252.57 Crore compared to Rs.3,862.01 Crore in the previous Financial Year, registering an increase of 10.11%. The turnover was higher mainly on account of increased volume of production and increased sales realization. Profit Before Tax was higher at Rs.422.40 Crore as against Rs.417.40 Crore of the previous financial year. Profit After Tax was Rs.273.11 Crore as against Rs.283.84 Crore of the previous financial year.

DIVIDEND

Keeping in view the Company''s performance and long term growth strategy, your Directors have recommended a dividend of Rs 3.50 per equity share on 15,54,18,783 equity shares for the year ended 31st March, 2013. The dividend on equity shares is subject to the approval of the shareholders at the Annual General Meeting. On its approval, the dividend payout will work out to Rs.63.64 Crore, including tax on dividend of Rs.9.24 Crore. This amounts to 23.30% of the Net Profit.

APPROPRIATIONS

Your company earned Net Profit of Rs.273.11 Crore for the year 2012-13. After adding thereto Rs.485.02 Crore being the balance of Statement of Profit & Loss brought forward from the previous year, amount available for appropriation is Rs.758.13 Crore. Directors have recommended a Dividend @ 35% for the financial year 2012-13, which will entail payout of Rs. 63.64 Crore, including tax on Dividend. The Company proposes to transfer Rs.300 Crore to General Reserve. An amount of Rs.394.49 Crore is proposed to be retained in the Statement of Profit & Loss.

PERFORMANCE REVIEW

Production

The Company achieved commendable production performance during the year 2012-13. Most plants of the Company were operated at over 100% capacity utilization. Ammonia Plant produced 5,91,861 MT of Ammonia with capacity utilization of 132.85%, Urea Plant produced 7,08,795 MT of Urea with capacity utilization of 111.29%, Formic Acid Plant produced 20,153 MT of Formic Acid with capacity utilization of 201.53%, Acetic Acid Plant produced 1,57,093 MT of Acetic Acid with capacity utilization of 157.09%, Weak Nitric Acid (WNA) Plants produced in aggregate, 3,99,997 MT of WNA with capacity utilization of 115.11%, Ammonium Nitrophosphate Plant (ANP) produced 2,00,895 MT of ANP with capacity utilization of 140.98%, Aniline Plant produced 41,717 MT of Aniline with capacity utilization of 119.19%, Toulene Di-Isocyanate (TDI) Plant produced 17,875 MT of TDI with capacity utilization of 127.68%.

Concentrated Nitric Acid (CNA) plants produced in aggregate 1,08,100 MT of CNA with capacity utilization of 93.19%. Calcium Ammonium Nitrate (CAN) Plant produced 1,06,401 MT of CAN with capacity utilization of 74.67%. Production of CAN was contained to suit the requirement of ANP production/ sale of AN Melt. AN Melt being more remunerative, it was sold directly to the extent possible rather than using the same for producing CAN. Production of WNA and CNA was planned as per the market conditions. Methanol Plants were not operated at their full capacity in view of high cost of production of Methanol coupled with its lower sales realization.

The Government of India encourages production of Neem Coated Urea. During the year, the Company has started production of Neem Coated Urea and has produced 1,00,076 MT of Neem Coated Urea.

Sales

The Company achieved impressive performance in the sale of Fertilizers and Industrial Chemicals. The Company sold in aggregate 11.11 Lac MT of Fertilizers, (both manufactured and traded) during the year. 7.74 Lac MT of Fertilizers constituting 70% of the total sales were sold in the primary marketing zone comprising the Home State Gujarat and the adjoining States - Maharashtra, Madhya Pradesh and Rajasthan. The Company continued the trading activities in imported Urea and Single Super Phosphate. In addition to the manufactured Fertilizers, the Company sold 88,619 MT of imported Urea and 13,014 MT of SSP.

Almost all the Industrial Products performed well in terms of sales and their realization during the year. The Company sold in aggregate 8,59,235 MT of Industrial Products during 2012-13 as against 8,49,761 MT of Industrial Products sold during year 2011-12. The Company exported in aggregate 4,686 MT of Industrial Products registering an increase of 257% over the previous year.

(n)Code Solutions Â IT Division

(n)Code Solutions, the IT Division of the Company has continued its growth and expansion in the IT Sector during the year. It achieved the record sales of Rs.79.08 Crore and the record profit by registering 35% growth in profitability based on strong performance of its Digital Signature Certificate (DSC) business and e-Procurement services. It remains market leader in DSC business maintaining about 40% market share. (n)Code has undertaken several initiatives during the year in new business lines such as Cloud Computing, Technology & E-Governance Solutions to realize better growth in the coming years.

STATUS OF PROJECTS

As reported last year, Ethyl Acetate Project, Ammonia Syngas Generation Project (ASGP) and TDI Project at Dahej were under implementation. We are happy to inform you that during the year, Ethyl Acetate Project has been commissioned at a total cost of Rs.124.34 Crore and put into operation. As per the policy of Government of India, ASGP with total investment of Rs.1215.74 Crore is currently under test run.

There has been a time and cost overrun in the implementation of TDI Project undertaken by the Company under its growth plan. We are seriously concerned about the delay in the implementation of this project. As informed earlier, an action plan was chalked out and project team has been reorganized to boost up speedy implementation of TDI Project. With the committed and concerted efforts, the TDI project is expected to be commissioned by end September, 2013.

NEW INITIATIVES

With a view to accelerating its growth momentum, the Company is continuously exploring the potential business opportunities in India and Abroad in the areas having synergy with Company''s existing business operations. Towards this direction, following projects are under consideration by the Company:

Brown field Ammonia-Urea Project

The Government of India (GoI) has recently announced the New Investment Policy, 2012 for Urea. Considering the demand-supply gap of Urea and very high price of imported Urea, GoI is likely to approve 4-5 large Ammonia Â Urea Projects in India in near future under the new investment policy. The Company is considering to set up a gas based Brown field Ammonia-Urea Project (BAUP) at Bharuch using some of its existing facilities/ utilities. The Company has expressed its interest to the Department of Fertilizers, GoI for setting-up of BAUP at Bharuch. Implementation of this project is subject to the approval of Department of Fertilizers, GoI.

Ghana - India Fertilizer Project

Government of India and Government of Ghana have agreed to set-up in joint venture, a Natural Gas based Ammonia ~ Urea Project in Ghana. Rashtriya Chemicals & Fertilizers Ltd., (RCF) is acting as a nodal agency of GoI for implementation of the said project. The Company has submitted an Expression of Interest (EoI) to RCF for participating in the equity of Indian joint venture to be formed for the proposed project in consortium with Gujarat State Fertilizers & Chemicals Ltd. (GSFC) and Gujarat Alkalies & Chemicals Ltd. (GACL).

Joint Venture Project with M/s. Jordan Phosphate Mines Company Ltd (JPMC), Jordan

M/s JPMC are supplying Rock Phosphate for Company''s existing Nitrophosphate Complex. The Company is having a long term business relationship with them. The Company is considering to set-up a Phosphoric Acid Project in Joint Venture with M/s JPMC and has signed MoU for setting up the said project. Actions have been initiated for carrying out the pre-feasibility studies of this project.

Poly Aluminium Chloride and Di-Calcium Phosphate Project

TDI Project at Dahej, when commissioned, will generate Hydrochloric Acid (HCl) as by-product. Poly Aluminium Chloride and Di-Calcium Phosphate Project based on the HCl are under active consideration of the Company.

FERTILIZER POLICY

Government of India (GoI) is slowly but steadily pursuing its initiative to transfer subsidy directly to the farmers. GoI is planning to provide Point of Sale (PoS) devices with an inbuilt thermal printer and internet connectivity to retailers. A pilot plan has been planned in six select Districts across the country.

GoI has announced a New Investment Policy to facilitate fresh investments in Urea sector. GoI has notified lower subsidy rates on P&K fertilizers for the current year and also announced lower indicative selling prices for these fertilizers.

Government of India has notified Ammonium Nitrate Rules, 2012 in July, 2012. The said Rules will become effective from 11th January, 2014. Ammonium Nitrate (AN) Melt and Calcium Ammonium Nitrate (CAN) fertilizer manufactured by the Company are under the purview of the said Rules. As per the provisions of the Rules, Licenses will be required for production, storage, transportation, sale and export of both the products.

DIRECTORS'' RESPONSIBILITY STATEMENT

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

- in the preparation of the Annual Accounts for the year 2012-13, the applicable Accounting Standards have been followed and there are no material departures;

- they have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the profit of the Company for the financial year;

- they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

- they have prepared the Annual Accounts on a going concern basis.

CORPORATE GOVERNANCE

As per the requirement of Clause 49 of the Listing Agreement, a Report on Corporate Governance together with the following are attached herewith and form part of this Annual Report:

- Declaration on the Code of Conduct.

- Certificate from the Practicing Company Secretary with regard to company''s compliance with the conditions of Corporate Governance.

MANAGEMENT DISCUSSION & ANALYSIS

Management Discussion & Analysis on the business and operations of the Company is attached herewith and forms part of this Annual Report.

DEMERGER OF V-SAT / ISP GATEWAY BUSINESS

Subsequent to the Order by the Hon''ble High Court of Gujarat sanctioning the Scheme of Arrangement and Demerger for transfer of V-SAT / ISP Gateway Business of the Company to ING Satcom Ltd., an unlisted Company, two separate applications for transfer of V-SAT / ISP Gateway Business Licenses standing in the name of company to the name of transferee company viz., ING Satcom Ltd. have been submitted to the Department of Telecommunications (DoT). The Scheme is subject to and conditional upon the approval of Government Authorities for transfer of Licenses as aforesaid, which is in progress.

FIXED DEPOSITS

The Company has not accepted any Fixed Deposit during the year. No amount on account of principal or interest on Fixed Deposits was outstanding as on the date of Balance Sheet.

INSURANCE

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

DIRECTORATE

Chairman

Dr. Varesh Sinha, IAS, Chief Secretary to Government of Gujarat (GoG) was nominated by GoG as Government Director on the Board vice Shri AK Joti, IAS (Retd.) effective 1st March, 2013. Dr. Sinha has been appointed Chairman of the Company effective 1st March, 2013.

Managing Director :

- Shri AM Tiwari, IAS relinquished the charge of Managing Director effective 2nd May, 2013.

- Dr. Rajiv Kumar Gupta, IAS, assumed the charge of Managing Director of the Company effective 2nd May, 2013.

Change in Directorship

- Shri MM Srivastava, IAS (Retd.) tendered resignation as Director effective 31st July, 2012.

- Dr. Varesh Sinha, IAS, was appointed Director in the casual vacancy caused by the resignation of Shri MM Srivastava, IAS (Retd.) w.e.f. 22.09.2012. He resigned as Director w.e.f. 28.02.2013.

- Dr. Hasmukh Adhia, IAS, has been appointed as an Additional Director effective 25th March, 2013.

- Shri RK Tripathy, IAS (Retd.) tendered resignation as Director effective 7.05.2013.

In terms of the provisions of the Companies Act, 1956, Dr. Hasmukh Adhia, IAS, holds office up to the date of forthcoming Annual General Meeting (AGM) of the Company. The Company has received a Notice in writing from a Member under Section 257 of the Act, along with the requisite deposit proposing his appointment as Director of the Company at the forthcoming AGM.

In pursuance of the provisions of Articles of Association of the Company as also of the provisions of the Companies Act, 1956, S/Shri DC Anjaria and Atanu Chakraborty, IAS retire by rotation at the forthcoming Annual General Meeting and they are eligible for reappointment.

Your Directors place on record their deep appreciation of the valuable services rendered by the outgoing Directors and take this opportunity to welcome the new Directors.

INFORMATION REGARDING CONSERVATION OF ENERGY, ETC., AND PARTICULARS OF EMPLOYEES

Information 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 and information as per Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, are given in Annexure Â ''A'' & ''B'' respectively forming part of this report.

AUDITORS AND AUDITORS'' REPORT

In pursuance of the provisions of the Companies Act, 1956, M/s Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad, who are the Statutory Auditors of the Company, hold office up to the conclusion of the forthcoming Annual General Meeting and they are eligible for reappointment.

Notes to Accounts forming part of the Audited Financial Statements are self explanatory and need no further explanation. There are no qualifications or adverse remarks in the Auditors'' Report, which require any clarification / explanation.

COST AUDITOR

The Board of Directors has appointed Shri Shirish V Diwanji, Cost Accountant of M/s Diwanji & Associates, Vadodara, as the Cost Auditor of the Company to conduct the Audit of the Cost Accounts in respect of the manufacturing of fertilizers and other related manufacturing activities carried out by the Company for financial year 2013-14 under the Cost Accounting Records (Fertilizer Industry) Rules, 2011.

The Company has e-filed the Cost Audit Report for the financial year 2011-12 with the Ministry of Corporate Affairs (Cost Audit Branch) on 17th December, 2012. The due date of filing the said report was 31st December, 2012.

INDUSTRIAL RELATIONS

Industrial relations during the year under review have remained extremely cordial and harmonious. Your Directors convey their high sense of appreciation for the contribution made by the employees at all levels.

ACKNOWLEDGEMENTS

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

For and on behalf of the Board of Directors,

Place : Gandhinagar Dr.Varesh Sinha

Date : 9th August, 2013 Chairman

Mar 31, 2012

The Directors have pleasure in presenting this 36th Annual Report together with Audited Statements of Accounts of the Company for the year ended 31 st March, 2012.

FINANCIAL PERFORMANCE

Summary of financial results: (Rs. in Crore)

Particulars 2011-12 2010-11

Income from Operations 3,862.01 2,845.89

Other Income 30.09 143.56

Total Income 3,892.10 2,989.45

Total Expenditure 3,310.58 2,466.84

Profit before Depreciation, Finance Cost and Tax 581.52 522.61

Depreciation 130.53 121.11

Finance Cost 33.59 20.26

Profit Before Tax (PBT) 417.40 381.24

Provision for Taxes (Net) 133.56 114.71

Net Profit for the year 283.84 266.53

Balance brought forward from previous year 564.41 456.58

Amount available for Appropriation 848.24 723.11

Appropriations

Proposed Dividend 54.40 50.51

Tax on Dividend 8.82 8.19

Transferred to General Reserve 300.00 100.00

Balance carried to Balance Sheet 485.02 564.41

YEAR IN RETROSPECT

Your company achieved a sales turn-over of Rs.3,862.01 Crore compared to Rs.2,845.89 Crore in the previous Financial Year, registering an increase of 35.70%. The turnover was higher mainly on account of increased volume of production and increased sales realization. Profit Before Tax was higher at Rs.417.40 Crore as against Rs.381.24 Crore of the previous financial year, registering an increase of 9.48%. Profit After Tax was also higher at Rs.283.84 Crore as against Rs.266.53 Crore of the previous financial year, registering an increase of 6.49%.

DIVIDEND

The Company is presently implementing CAPEX programmes under its Corporate Plan which will entail substantial expenditure. In order to part finance the CAPEX programmes, it is necessary to retain some profits for generating internal accruals. Keeping in view the Company's performance, need for capital for its Growth Plan and to ensure that the shareholders of the Company get sustained return on their investments, your Directors have recommended a higher dividend @ 35%, for the financial year ended 31st March, 2012 as against 32.5% for the previous financial year ended 31st March, 2011. On its approval, the dividend payout will work out to Rs.63.22 Crore, including tax on dividend of Rs.8.82 Crore. This amounts to 22.27% of the Net Profit.

APPROPRIATIONS

Your company earned Net Profit of Rs.283.84 Crore for the year 2011-12. After adding thereto Rs.564.41 Crore being the balance of Profit & Loss Account brought forward from the previous year, amount available for appropriation is Rs.848.24 Crore. Directors have recommended a Dividend @ 35% for the financial year 2011-12, which will entail payout of Rs.63.22 Crore, including tax on Dividend. The Company proposes to transfer Rs.300 Crore to General Reserve. An amount of Rs.485.02 Crore is proposed to be retained in the Statement of Profit & Loss.

PERFORMANCE REVIEW

The Company has achieved all-round satisfactory performance during the year. Members will be happy to know that during the year under review, three new plants viz. 300 MTD WNA-II, 150 MTD CNA-III and 33 MW CPSU Plants have been commissioned.

Production

The Company achieved impressive production performance during 2011-12. Most plants of the Company were operated at over 100% capacity utilization. Ammonia Plant produced 5,49,502 MTs of Ammonia with capacity utilization of 123.35%, Urea Plant produced 7,01,572 MTs of Urea with capacity utilization of 110.15%, Formic Acid Plant produced 19,656 MTs of Formic Acid with capacity utilization of 196.56%, Acetic Acid Plant produced 1 ,56,023 MTs of Acetic Acid with capacity utilization of 156.02%, Weak Nitric Acid (WNA)-I Plant produced 2,83,504 MTs of WNA with capacity utilization of 114.55%, Ammonium Nitrophosphate Plant (ANP) produced 1,96,394 MTs of ANP with capacity utilization of 137.82%, Aniline Plant produced 39,597 MTs of Aniline with capacity utilization of 113.13%, Toulene Di-Isocyanate (TDI) Plant produced 17,727 MTs of TDI with capacity utilization of 126.62%. Production of Acetic Acid, Formic Acid, Methyl Formate and TDI was adjusted to maximize contribution based on availability of Carbon Monoxide. Production of WNA and CNA was planned as per the market condition. Methanol- I & II Plants were not operated at their full capacity and Methanol Synthesis Unit (MSU) was not operated in view of high cost of production of Methanol coupled with its lower sales realization. Production of Calcium Ammonium Nitrate (CAN) was contained to suit the requirement of ANP production / sale of AN Melt. AN Melt being more remunerative, it was sold directly to the extent possible rather than using the same for producing CAN.

Sales

The Company achieved a commendable performance in the sale of Fertilizers and Industrial Chemicals. The Company sold in aggregate 10.85 Lacs MTs of Fertilizers, (both manufactured and traded) during the year. 7.43 Lacs MTs of Fertilizers constituting 69% of the total sales were sold in the primary marketing zone comprising the Home State Gujarat and the adjoining States - Maharashtra, Madhya Pradesh and Rajasthan. The Company continued the trading activities in imported Urea, imported MOP and SSP. In addition to the manufactured Fertilizers, the Company sold 37,021 MTs of imported Urea, 30,873 MTs of imported MOP and 30,456 MTs of SSP.

The chemical market continued its recovery from the Global meltdown. Almost all the Industrial Products performed well in terms of realization during the year. The Company sold in aggregate 8,49,761 MTs of Industrial Products during financial year 2011-12 vis-a-vis 7,84,592 MTs of Industrial Products sold during financial year 2010-11, registering an increase of 8.31%. The Company during financial year 2011-12 exported in aggregate 1 31 0 MTs of Industrial Products registering an increase of 22.19% over the previous year.

78 new records were established during the year in terms of production, marketing and despatch.

GROWTH STRATEGY

(a) Projects under Corporate Plan

As informed to you last year, of the total 14 projects taken- up for implementation by the Company under its Growth Plan, 8 projects were completed by 2010-11 at a total cost of Rs.432.05 Crore. During the year, three more projects viz. WNA-II, CNA-III and CPSU Projects were completed and commissioned, at a cost of around Rs.596.25 Crore. Wet Sulphuric Acid Project has been abandoned. Remaining two projects viz. TDI Project and Ethyl Acetate Project are under implementation. An action plan was chalked out last year for the speedy implementation of these projects. With the committed and concerted efforts, the TDI project is expected to be mechanically complete by March, 2013 and Ethyl Acetate Project is expected to be mechanically complete by August, 2012.

As per the policy of Government of India, the Company is also implementing Ammonia Plant Feed Stock Conversion Project. This project is scheduled to be commissioned by September, 2012.

(b) New Initiatives :

With a view to accelerating its growth momentum going forward, the Company is continuously looking for opportunities of business avenues in India and abroad.

Formulation of a new Urea Investment Policy by Government of India is in the offing aimed at boosting the production of Urea - India's most widely used Fertilizer. The Company is actively considering setting-up a world scale Ammonia ~ Urea facility.

Major raw materials for Methylene Diphenyl Di-isocyanate (MDI) are Aniline, Formaldehyde, Carbon Monoxide and Chlorine. The Company has the required infrastructure for setting up MDI Project. As such, as a forward integration, the Company is considering putting-up MDI Project. The Company has approached the technology suppliers for tie- up. The Company has also initiated actions for sourcing the technology to take care of the higher requirement of Aniline, which is the main raw material for MDI.

The Company has joined hands with a renowned Engineering Company of India for providing the Project Management Services for relocation of Ammonia ~ Urea Plant from Alaska to Nigeria. The Company has signed an Agreement with M/s Chematur AB, (CEAB) Sweden, to provide commissioning assistance / technical services for CEAB's projects world-wide.

Considering the Company's experience of successfully absorbing technology from variety of sources, its technical personnel are providing commissioning services for TDI, Methanol and other plants in China, Iraq, Myanmar, Iceland, Iran, etc.

The Company is considering to have overseas offices in Middle East, Africa and South East Asia.

(n) Code Solutions - IT Division :

(n) Code Solutions, the IT Division of the Company issued 7,51,194 Digital Signature Certificates during the financial year 2011-12, registering a growth of over 300% over the previous year and completed 23,502 tenders, registering a growth of around 59% over the previous year. (n) Code recorded highest ever sales of Rs.73.10 Crore during 2011-12 registering a growth of 43% over the previous year.

(n) Code won four prestigious awards for its project on Mineral Administration implemented for Commissionerate of Geology and Mining, Government of Gujarat and Department of Mining and Geology, Government of Karnataka.

FERTILIZER POLICY

The primary nutrients viz. Nitrogen (N) Phosphatic (P) Potash (K) and Secondary Nutrient, Sulphur (S) in NPK Fertilizers covered under NBS Policy introduced by the Government of India (GoI) effective 1st April, 2010 shall be eligible for the NBS during 2012-13. GoI has vide its Office Memorandum dated 29.3.2012 announced per kg NBS for nutrients, N, P, K & S for the year 2012-13 with effect from 1st April, 2012. In terms of the said NBS Policy applicable to the Company's product, the Company was free to decide selling price of ANP in the market. Considering the market scenario, the prices of ANP were increased gradually. With the de-regulation of prices of all the Fertilizers, excepting Urea, the market has become very competitive. The Company has been able to benefit from such de-regulation of prices. The Company increased prices of ANP and CAN during the year by taking advantage of its brand equity.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of sub section (2AA) of Section 217 of the Companies Act, 1956, your Directors hereby confirm that -

- in the preparation of the Annual Accounts for the year 2011-12, the applicable Accounting Standards have been followed and there are no material departures;

- they have selected such Accounting Policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 st March, 2012 and of the profit of the Company for the financial year;

- they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

- they have prepared the Annual Accounts on a going concern basis.

CORPORATE GOVERNANCE

As per the requirement of Clause 49 of the Listing Agreement, a Report on Corporate Governance together with the following are attached herewith and form part of this Annual Report:

- Declaration on the Code of Conduct.

- Certificate from the Practising Company Secretary with regard to company's compliance with the conditions of Corporate Governance.

MANAGEMENT DISCUSSION & ANALYSIS

Management Discussion & Analysis on the business and operations of the Company is attached herewith and forms part of this Annual Report.

DEMERGER OF V-SAT / ISP GATEWAY BUSINESS

Hon'ble High Court of Gujarat has vide its order dated 15th June, 2012 approved the Scheme of Arrangement and Demerger for transfer of V-SAT / ISP Gateway Business of the Company to ING Satcom Ltd., an unlisted Company. The Scheme of Arrangement and Demerger will become finally effective upon the transfer of Licenses for V-SAT / ISP Gateway Business by the competent authority to the name of ING Satcom Ltd.

FIXED DEPOSITS

The Company has not accepted any Fixed Deposit during the year. No amount on account of principal or interest on Fixed Deposits was outstanding as on the date of Balance Sheet.

INSURANCE

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

DIRECTORS

The position with respect to Board of Directors since the last Annual Report is as follows:

- Shri Atanu Chakraborty, IAS, Director of the Company was appointed to hold the additional charge of Managing Director of the Company during the absence of Shri AM Tiwari, IAS, Managing Director of the Company, on election duty from 11th January, 2012 to 9th March, 2012.

- In terms of the provisions of the Companies Act, 1956, Shri GC Murmu, IAS, holds office up to the date of forthcoming AGM of the Company. The Company has received a Notice in writing from a Member under Section 257 of the Act, along with requisite deposit proposing appointment of Shri GC Murmu as Director of the Company at the forthcoming AGM.

- In pursuance of the provisions of Articles of Association of the Company as also of the provisions of the Companies Act, 1956, S/Shri Dr. Ashok Shah and Dr. TT Ram Mohan retire by rotation at the forthcoming AGM and they are eligible for reappointment.

- Shri MM Srivastava, IAS on reaching superannuation, has retired from the services of Government of Gujarat effective 31st July, 2012. He has tendered his resignation as Director of the Company w.e.f. 31st July, 2012.

INFORMATION REGARDING CONSERVATION OF ENERGY, ETC., AND PARTICULARS OF EMPLOYEES

Information 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 and information as per Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, are given in Annexure - 'A' & 'B' respectively forming part of this report.

AUDITORS AND AUDITORS' REPORT

In pursuance of the provisions of the Companies Act, 1956, M/s Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad, who are the Statutory Auditors of the Company, hold office up to the conclusion of the forthcoming Annual General Meeting and they are eligible for reappointment.

Notes to Accounts forming part of the Audited Financial Statements are self explanatory and need no further explanation. There are no qualifications or adverse remarks in the Auditors' Report, which require any clarification / explanation.

COST AUDITOR

The Board of Directors has appointed Shri Shirish V Diwanji, Cost Accountant of M/s Diwanji & Associates, Vadodara, as the Cost Auditor of the Company to conduct the Audit of the Cost Accounts in respect of the manufacturing of fertilizers and other related manufacturing activities carried out by the Company, for financial year 2012-13 under the Cost Accounting Records (Fertilizer Industry) Rules, 2011.

The Company has e-filed the Cost Audit Report for the financial year 2010-11 with the Ministry of Corporate Affairs, (Cost Audit Branch) on 24th September, 2011. The due date of filing the said report was 27th September, 2011.

INDUSTRIAL RELATIONS

Industrial relations during the year under review have remained extremely cordial and harmonious. Your Directors convey their high sense of appreciation for the contribution made by the employees at all levels. A fresh Long Term Wage Settlement has been entered into with the Employees' Union for the period from 1st July, 2010 to 30th June, 2014 on the expiry of previous settlement.

ACKNOWLEDGEMENTS

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

For and on behalf of the Board of Directors,

Place: Gandhinagar A K Joti

Date : 08-08-2012 Chairman

Mar 31, 2011

The Members,

The Directors have pleasure in presenting this 35th Annual Report together with Audited Statements of Accounts of the Company for the year ended 31st March, 2011.

Financial Results

Following are the financial highlights : (Rs. in Crores)

Particulars 2010-11 2009-10

Income from Sales 2,845.89 2,614.45

Other Income 143.56 86.28

Total Income 2,989.45 2,700.73

Total Expenditure 2,468.54 2,340.50

Profit before Depreciation,

Interest and Tax 520.91 360.23

Depreciation 121.11 116.96

Interest 18.39 23.38

Profit before Taxes (PBT) 381.41 219.89

Provision for Taxes (Net) 114.88 96.05

Net Profit for the year 266.53 123.84

Balance brought forward

from previous year 456.58 491.64

Amount available for Appropriation 723.11 615.48

Appropriations

Proposed Dividend 50.51 50.51

Tax on Dividend 8.19 8.39

General Reserve 100.00 100.00

Balance carried to Balance Sheet 564.41 456.58

YEAR IN RETROSPECT

During the year under review, the Company achieved a sales turn-over of Rs.2,845.89 Crores as against Rs.2,614.45 Crores of the previous Financial Year. The profit before tax and the profit after tax were higher at Rs.381.41 Crores and Rs.266.53 Crores respectively for the Financial Year 2010-11 as against Rs.219.89 Crores and Rs.123.84 Crores for the previous Financial Year.

DIVIDEND

Keeping in view the Company's performance, need for capital for its Growth Plan and to ensure that the shareholders of the Company get sustained return on their investments, your Directors have recommended a dividend of Rs.3.25 per equity share i.e. @ 32.50%, for the financial year ended 31st March, 2011. On its approval, the dividend payout will be Rs.58.70 Crores, including tax on dividend of Rs.8.19 Crores.

TRANSFER TO RESERVES

The Company proposes to transfer Rs.100 Crores to General Reserve out of the amount available for appropriations. An amount of Rs.564.41 Crores is proposed to be retained in the Profit & Loss Account.

PERFORMANCE REVIEW

Year 2010-11 has been a year of consolidation of the Indian Economy. Growth rate in 2010-11 has been 8.6%. Growth has been broad based with a rebound in the Agriculture sector at around 5.4%. Manufacturing and service sectors have also registered impressive gains. Food inflation, higher commodity prices and volatility in global commodity markets have, however been a cause of concern. Global commodity prices have been on the upswing. Crude oil prices reached a high of $110 a barrel by the end of financial year from $ 75 a barrel in mid 2010. Similarly, all major raw material prices increased steadily during the financial year 2010-11. It is in this back-drop, the Company has registered impressive performance during 2010-11.

As reported last year, after the failure of Waste Heat Boiler (WHB) E-703 in Ammonia Plant on 9th February, 2010, a partial shutdown of Ammonia Plant had to be taken for the repairs of WHB E-703. Repaired WHB E-703 has been put-back into operation and all the plants of the Company have been recommissioned effective 6th June, 2010. All the plants of the Company have been operating well since then.

Despite loss of production of Ammonia for 70 days, the Company achieved commendable production performance during the year under review. Some of the major plants of the Company were operated at over 100% capacity utilization. Ammonia Plant produced 4,74,868 MTs of Ammonia with capacity utilization of 106.59%, Urea Plant produced 6,43,228 MTs of Urea with capacity utilization of 101.14%, Formic Acid Plant produced 19,382 MTs of Formic Acid with capacity utilization of 193.82%, Acetic Acid Plant produced 1,53,295 MTs of Acetic Acid with capacity utilization of 153.29%, Weak Nitric Acid Plant (WNA) produced 2,84,307 MTs of WNA with capacity utilization of 114.87%, CNA-I and CNA-II Plants produced in aggregate 73,741 MTs of CNA with average capacity utilization of 111.73%, Ammonium Nitrophosphate Plant produced 1,66,235 MTs of Ammonium Nitrophosphate with capacity utilization of 116.66%, Aniline Plant produced 39,896 MTs of Aniline with capacity utilization of 113.99% and TDI Plant produced 17,710 MTs of TDI with capacity utilization of 126.50%. Methanol-I, Methanol-II and MSU Plants were not operated at their full capacity in view of high cost of production of Methanol coupled with reduction in its sales realization. AN Melt being more remunerative, it was sold directly to the extent possible rather than using the same for producing Calcium Ammonium Nitrate.

Impact of economic meltdown during the previous year eased off during the financial year 2010-11. Almost all Industrial Products performed well in terms of volume and realization during the year. The Company sold 7,84,592 MTs of Industrial Products during financial year 2010-11 vis-a-vis 6,67,589 MTs of Industrial Products sold during financial year 2009-10, registering an increase of around 17.5%.

In respect of damage to equipment E-703, the Company had lodged a claim with the Insurance Company for material damage as well as loss of profit (LOP). The Company has received a sum of Rs.141.20 Crores from the Insurance Company in full and final settlement of the claim.

Your company took-up 14 projects for implementation under its strategic Growth Plan. Of these, 8 projects were completed and commissioned by 2010-11 at a total cost of Rs.432.05 Crores. 2 projects viz. Concentrated Nitric Acid-III project and Weak Nitric Acid-II project have been completed and commissioned during the current year 2011-12 at a cost of around Rs. 324.13 Crores. One project viz. Wet Sulphuric Acid project has been abandoned. Remaining 3 projects viz. Co- generation Power & Steam Unit (CPSU), Ethyl Acetate and Toluene Di-isocynate (TDI) projects are presently under implementation. An Action Plan including re-organising the Project Team has been chalked out for speedy implementation of these projects.

As per the policy of Government of India, the Company is also implementing Ammonia Plant Feed Stock Conversion Project for which the contract has been awarded to M/s Larsen & Toubro, Mumbai, on LSTK basis. This project is slated to be commissioned by August, 2012.

Status of various projects completed as also the projects under execution are given in 'Management Discussion & Analysis', forming part of this Annual Report.

(n) CODE SOLUTIONS DIVISION

(n)Code Solutions, the IT Division of the Company is a leading Licensed Certifying Authority for issuance of Digital Signature Certificates in the Country. (n)Code also provides e- procurement solutions, e-governance solutions, designs, builds and manages world class data centers and offers managed IT services. (n)Code issued 189074 Digital Signature Certificates during the financial year 2010-2011, registering a growth of 73% over the previous year. (n)Code also completed 15029 tenders, registering a growth of around 38% over the previous year. During the year under review, (n)Code emerged as a broad based IT solution provider beyond the confines of Gujarat.

FERTILIZER POLICY

During the year under review,

? Government of India (GoI) levied Excise Duty on Fertilizers effective 1st March, 2011. Excise Duty as applicable is recoverable by the Company by way of suitable increase in MRP.

? With a view to compensating the manufacturers of Urea for tax on inputs levied by the State Governments of Gujarat and Uttar Pradesh, not reimbursed by GoI by way of subsidy, GoI has permitted the Urea suppliers to charge the same from the farmers of Gujarat and Uttar Pradesh effective 1st April, 2011.

? Nutrient Based Subsidy Policy introduced from 1st April, 2010 for P&K Fertilizers continues during Financial Year

2011-12. Subsidy on nutrients has been increased in line with the increase in the international prices of Urea, DAP, MOP and Sulphur. Consequently, subsidy on Ammonium Nitrophosphate produced by the Company has increased.

DIRECTORS' RESPONSIBILITY STATEMENT

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

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

- appropriate Accounting Policies have been selected and applied consistently and judgements 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, 2011 and of the profit of the Company for the year ended on that date;

- 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

- the Annual Accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

As per the requirements of Clause 49 of the Listing Agreement, a Report on Corporate Governance together with the following are attached herewith and forms part of this Annual Report:

1. Declaration on the Code of Conduct.

2. Certificate obtained from the Practising Company Secretary with regard to company's compliance with the conditions of Corporate Governance.

MANAGEMENT DISCUSSION & ANALYSIS

Management Discussion & Analysis on the business and operations of the Company is attached herewith and forms part of this Annual Report.

DEMERGER OF V-SAT / ISP GATEWAY BUSINESS

V-SAT / ISP Gateway business not being a core business of the Company, it has been decided to transfer the said business to ING Satcom Ltd., a wholly owned subsidiary of M/s Infinium India Ltd., an unlisted company through the scheme of arrangement and demerger, against cash consideration of Rs.6 Crores.

FIXED DEPOSITS

The Company has discontinued acceptance of fixed deposits with effect from 1st April, 2007. The Company has paid during the year Rs.246/- towards the unclaimed interest to one depositor.

INSURANCE

The properties and insurable assets and interest of your Company such as buildings, plant & machinery and stocks among others, are adequately insured.

DIRECTORATE

Managing Director :

- Shri Guruprasad Mohapatra, IAS, relinquished the charge of the post of Managing Director of the Company effective 15th July, 2010.

- Shri HV Patel, IAS, Managing Director, Gujarat State Fertilizers & Chemicals Ltd., assumed the additional charge of the post of Managing Director of the Company effective 15th July, 2010. Consequent upon his transfer and appointment as Commissioner of Commercial Tax, Ahmedabad, Shri HV Patel has tendered his resignation as Director / Managing Director of the Company effective 13th July, 2011.

- Shri AM Tiwari, IAS has been appointed as Managing Director of the Company with effect from 14th July, 2011.

Change in Directorship :

- S/Shri PN Roychowdhury and Pankaj Kumar, IAS, resigned as Directors from the Board of the Company effective 12th October, 2010.

- S/Shri RK Tripathy, IAS and GC Murmu, IAS, were appointed as Directors in the casual vacancy caused by the resignation of S/Shri PN Roychowdhury and Pankaj Kumar respectively, effective 20th October, 2010.

- Shri Atanu Chakraborty, IAS has been appointed as an Additional Director with effect from 28th July, 2011.

In terms of the provisions of the Companies Act, 1956, S/Shri MM Srivastava, IAS, RK Tripathy, IAS and Atanu Chakraborty, IAS hold office upto the date of forthcoming Annual General Meeting (AGM) of the Company. The Company has received Notices in writing from some Members under Section 257 of the Act, along with the requisite deposit in respect of S/Shri MM Srivastava, RK Tripathy and Atanu Chakraborty proposing their appointment as Directors of the Company at the forthcoming AGM.

In pursuance of the provisions of Articles of Association of the Company as also of the provisions of the Companies Act, 1956, Shri DC Anjaria retires by rotation at the forthcoming AGM and he is eligible for reappointment.

Your Directors place on record their deep appreciation of the valuable services rendered by the outgoing Directors and take this opportunity to welcome the new Directors.

INFORMATION REGARDING CONSERVATION OF ENERGY, ETC., AND PARTICULARS OF EMPLOYEES

Information 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 and information as per Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, are given in Annexure Ã 'A' & 'B' respectively forming part of this report.

AUDITORS AND AUDITORS' REPORT

In pursuance of the Companies Act, 1956, M/s RS Patel & Co., Chartered Accountants, Ahmedabad, who are the Statutory Auditors of the Company, hold office upto the conclusion of the forthcoming Annual General Meeting. It is proposed to appoint M/s Deloitte Haskins & Sells (DHS), Chartered Accountants, Ahmedabad, as the Statutory Auditors in place of retiring Auditors. M/s DHS have under Section 224 (1-B) of the Companies Act, 1956, furnished a certificate of their eligibility for appointment as such.

Notes to Accounts forming part of the Audited Financial Statements are self explanatory and need no further explanation. There are no qualifications or adverse remarks in the Auditors' Report, which require any clarification / explanation.

COST AUDITOR

In pursuance of the directives received from the Central Government for the appointment of Cost Auditors, your Directors have appointed Shri Shirish V Diwanji, Cost Accountant of M/s Diwanji & Associates, Vadodara, as the Cost Auditor of the Company to conduct the cost audit of fertilizer products in respect of financial year 2011-12 under the Cost Accounting Records (Fertilizers) Rules, 1993. The Company has e-filed the Cost Audit Report for the financial year 2009-10 with the Registrar of Companies, Gujarat on 24th September, 2010. The due date of filing the said report was 27th September, 2010.

INDUSTRIAL RELATIONS

Industrial relations during the year under review have remained extremely cordial and harmonious. Your Directors convey their high sense of appreciation for the contribution made by the employees at all levels.

ACKNOWLEDGEMENTS

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

For and on behalf of the Board of Directors,

Place: Gandhinagar A K Joti

Date : 28.7.2011 Chairman

Mar 31, 2010

The Directors have pleasure in presenting this 34th Annual Report together with Audited Statements of Accounts of the Company for the year ended 31st March, 2010.

Financial Results (Rs. in Crores)

Particulars 2009-10 2008-09

Income from Sales 2,614.45 2,920.06

Other Income 86.28 65.34

Total Income 2,700.73 2,985.40

Total Expenditure 2,340.50 2,485.04

Profit before Depreciation, Interest and Tax 360.23 500.36

Depreciation 116.96 119.73

Interest 23.38 26.92

Profit before Taxes (PBT) 219.89 353.71

Provision for Taxes (Net) 96.05 126.19

Net Profit for the year 123.84 227.52

Balance brought forward from previous year 491.64 523.22

Amount available for Appropriation 615.48 750.74

Appropriations

Proposed Dividend 50.51 50.51

Tax on Dividend 8.39 8.59

General Reserve 100.00 200.00

Balance carried to Balance Sheet 456.58 491.64

YEAR IN RETROSPECT

During the year under review, the Company achieved a sales turn-over of Rs.2,614.45 Crores as against Rs.2,920.06 Crores of the previous Financial Year. The profit before tax and the profit after tax remained at Rs.219.89 Crores and Rs.123.84 Crores respectively for the Financial Year 2009-10 as against Rs.353.71 Crores and Rs.227.52 Crores for the previous Financial Year. The Companys margins were under pressure during the year due to stiff competition and lower realization of Industrial Products, despite increase in the volume of sales.

DIVIDEND

Keeping in view the Companys performance, need for capital for its Growth Plan and to ensure that the shareholders of the Company get sustained return on their investments, your Directors have recommended a dividend of Rs.3.25 per equity share i.e. @ 32.50%, for the financial year ended 31st March, 2010. On its approval, the dividend pay out will be Rs.58.90 Crores, including tax on dividend of Rs.8.39 Crores.

TRANSFER TO RESERVES

The Company proposes to transfer Rs.100 Crores to General Reserve out of the amount available for appropriations. An amount of Rs.456.58 Crores is proposed to be retained in the Profit & Loss Account.

PERFORMANCE REVIEW

Operational Highlights

The fiscal year 2009-10 was a challenging year for Indian Economy. Impact of significant deceleration in the growth rate in the second half of 2008-09 was felt even during the first half of 2009-10. There was added uncertainty on account of delayed and subnormal south Ã west monsoon, which had undermined the kharif crop in the Country. Major concern during the second half of 2009-10 had been the emergence of double digit food inflation. It is in this environment that the performance of your Company during 2009-10 can be regarded as reasonably good.

Despite several constraints, the Company achieved overall satisfactory production performance during the year under review. Some of the major plants of the Company were operated at over 100% capacity utilization. Ammonia Plant produced 4,45,505 MTs of Ammonia with capacity utilization of 100%, Formic Acid Plant produced 15,886 MTs of Formic Acid with capacity utilization of 158.86%, Acetic Acid Plant produced 1,40,140 MTs of Acetic Acid with capacity utilization of 140.14%, Weak Nitric Acid Plant (WNA) produced 2,81,049 MTs of WNA registering capacity utilization of 113.56%, CNA-I and CNA-II Plants produced 68,906 MTs of CNA registering average capacity utilization of 104.40% and ANP Plant produced 1,66,547 MTs of Ammonium Nitrophosphate registering capacity utilization of 116.88%. Besides, Urea Plant produced 6,01,681 MTs of Urea with capacity utilization of 94.60%, Aniline Plant produced 33,848 MTs of Aniline with capacity utilization of 96.71% and TDI Plant produced 12,974 MTs of TDI with capacity utilization of 92.67%.

Total 23 new records were established during the year in terms of production, marketing and despatch.

The Company achieved a sale of 10.30 Lac MTs of Fertilizers. In addition, the Company also handled and sold 1.13 Lac MTs of Imported Urea as a part of its trading activity. Highest ever dispatches of Fertilizers directly to retail outlets in Gujarat by road was achieved, resulting into a significant saving in freight cost. The Company handled 6,67,589 MTs of Industrial Products during financial year 2009-10 vis-a-vis 5,29,528 MTs of Industrial Products handled during financial year 2008-09, showing an increase of around 26%.

A catastrophic failure of Waste Heat Boiler (WHB) E-703, in Ammonia Plant on 9th February, 2010 resulted into disruption of Ammonia production. A partial shutdown of Ammonia Plant had to be taken for the repairs of WHB E-703. Repaired WHB E-703 has been put-back into operation and all the plants have been recommissioned effective 6th June, 2010. The production of Ammonia, Urea and ANP has been restored. All the plants of the Company are now operating smoothly.

We are seriously concerned about the failure / breakdown of the plants. An Upkeep Plan for countering failure susceptibility due to ageing of plants and supporting facilities has been approved. All critical equipments / instruments which have potential failure or are risk prone are being replaced in a phased manner. It is also planned to revamp / replace the ageing plants which have lived their life.

As reported last year, the Company is implementing various projects under its ÃGrowth Plan. The Company has tied-up term loans of Rs.2,001 Crores from Banks, etc., for its new projects. In addition, as per the policy of Government of India, the Company is implementing Ammonia Plant Feed Stock Conversion Project at a cost of Rs.1,215.74 Crores. Approval from Department of Fertilizers, Government of India for this project has been received with zero date commencing from 14th December, 2009. The Company has already awarded LSTK contract for this project to M/s Larsen & Toubro Ltd., Mumbai and has also tied-up term loans of Rs. 1,154.53 crores from banks for this project. With a view to utilizing the spare capacity of existing Gasifier Train, the Company is exploring a new Formic Acid Plant of 50,000 MTPA. The Company is also contemplating setting-up projects in Joint Venture with Gujarat State Fertilizers & Chemicals Ltd., and Gujarat Alkalies & Chemicals Ltd., at Dahej in Gujarat.

Analysis of the performance of the Company as also the status of various projects completed and projects under execution are given in the Management Discussion & Analysis, forming part of this Annual Report.

(n) CODE SOLUTIONS

(n) Code Solutions, the IT division of the Company is a Licensed Certifying authority for issuance of Digital Signature Certificates, the usage of which is increasing in e-governance applications and e-commerce transactions. It has issued 1,09,488 Digital Signature Certificates during the financial year 2009-2010, a growth of about 20% over the previous year. (n) Code solutions also provides e-procurement services, e-Governance solutions, designs, builds and manages world class data centers and offers Managed IT services.

(n) Code has been selected as a service provider by NICSI (National Informatics Center Services Incorporated) for the implementation of e-procurement for 11 States under the PMGSY (Pradhan Mantri Gram Sadak Yojna) Project. During 2009-10, it has also handled interesting projects for Pune Municipal Corporation, Reliance Industries Ltd., BEML, MJunction, All Time Royalty pass for the Department of Geology and Mining, Gujarat etc. During the year its security services project called ISMS implemented for GUVNL received a "Special Recognition Award" of the Computer Society of India (CSI).

FERTILIZER POLICY

During the year under review, the Government of India (GoI) has announced Nutrient Based Subsidy (NBS) Policy. This Policy is expected to promote balanced fertilization through new fortified products and focus on extension services by the Fertilizer Industry. This will lead to an increase in agricultural productivity and consequently better returns for the farmers.The first phase of NBS covering only P&K has become effective from 1st April, 2010. NBS policy is applicable to the Companys product Ammonium Nitrophosphate (ANP). As per the policy, subsidy amount will be fixed for the entire year based on the Nutrient contents of Companys product and the Company will be free to decide the selling price of the product in the market.

NBS policy for Urea will be implemented in second phase. Till such time NPS-III will continue as NPS-IV /ad-hoc Urea Scheme. Urea price has been increased by 10% w.e.f. 1st April, 2010. This however, is not likely to impact the demand of Companys Urea.

DIRECTORS RESPONSIBILITY STATEMENT

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

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

- appropriate Accounting Policies have been selected and applied consistently and judgements 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 year ended on that date;

- 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

- the Annual Accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

As per the requirements of Clause 49 of the Listing Agreement, a Report on Corporate Governance together with the following are attached herewith and forms part of this Annual Report:

1. Declaration on the Code of Conduct.

2. Certificate obtained from the Practising Company Secretary with regard to Companys compliance with the conditions of Corporate Governance.

MANAGEMENT DISCUSSION & ANALYSIS

Management Discussion & Analysis on the business and operations of the Company is attached herewith and forms part of this Annual Report.

FIXED DEPOSITS

The Company has discontinued acceptance of fixed deposits w.e.f. 1st April, 2007. The Company has during the year transferred an amount of Rs.3,54,308/- being the amount of unclaimed deposit and interest, to the Investors Education and Protection Fund set-up by the Government of India.

DIRECTORATE

Chairman

On the expiry of her term of office, Smt. Sudha Anchlia, relinquished the charge as Chairperson & Managing Director of the Company effective 30th June, 2009.

Shri AK Joti, IAS, Chief Secretary to Government of Gujarat has been nominated as Government Director on the Board of Directors of the Company effective 20th February, 2010. He has been appointed as the Chairman of the Company.

Managing Director :

Shri Guruprasad Mohapatra, IAS, was nominated as Government Director on the Board effective 1st July, 2009 and was appointed Managing Director of the Company with effect from the said date. He relinquised the charge of the post of Managing Director of the Company effective 15th July, 2010.

Shri H. V. Patel, IAS, Managing Director, Gujarat State Fertilizers and Chemicals Limited has assumed the additional charge of the post of Managing Director of the Company with effect from 15th July, 2010.

Change in Directorship during the year under review.

- Shri MM Srivastava, IAS, has been appointed Director to fill the casual vacancy caused by the resignation of Shri D Rajagopalan w.e.f. 22nd April, 2009.

- Shri S Jagadeesan, IAS, resigned as Director of the Company w.e.f. 1st December, 2009.

- Shri DJ Pandian, IAS, has been nominated as Government Director on the Board effective 11th December, 2009.

In pursuance of the provisions of Articles of Association of the Company as also of the provisions of the Companies Act, 1956, S/Shri Pankaj Kumar, IAS, and Dr. TT Ram Mohan retire by rotation at the forthcoming Annual General Meeting and they are eligible for reappointment.

Your Directors place on record their deep appreciation of the valuable services rendered by the outgoing Directors and take this opportunity to welcome the new Directors.

INFORMATION REGARDING CONSERVATION OF ENERGY, ETC., AND PARTICULARS OF EMPLOYEES

Information 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 and information as per Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, are given in Annexures - ÃA & ÃB respectively forming part of this report.

AUDITORS AND AUDITORS REPORT

In pursuance of the Companies Act, 1956, M/s RS Patel & Co., Chartered Accountants, Ahmedabad, who are the Statutory Auditors of the Company, hold 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 RS Patel & Co., Chartered Accountants, Ahmedabad to the effect that their reappointment, if made, would be within the prescribed limits under Section 224 (1-B) of the Companies Act, 1956 and that they are not disqualified for such reappointment within the meaning of Section 226 of the said Act.

Notes to Accounts forming part of the Audited Financial Statements are self explanatory and need no further explanation. There are no qualifications or adverse remarks in the Auditors Report, which require any clarification / explanation.

COST AUDITOR

In pursuance of the directives received from the Central Government for the appointment of Cost Auditors, your Directors have appointed Shri Shirish V Diwanji, Cost Accountant of M/s Diwanji & Associates, Vadodara, as the Cost Auditor of the Company to conduct the cost audit of fertilizer products in respect of financial year 2010-11 under the Cost Accounting Records (Fertilizers) Rules, 1993.

INDUSTRIAL RELATIONS

Industrial relations during the year under review have remained extremely cordial and harmonious. Your Directors convey their appreciation for the contribution made by the employees at all levels.

ACKNOWLEDGEMENTS

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

For and on behalf of the Board of Directors,

Place: Vadodara A K Joti

Date : 31st July, 2010 Chairman

Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article