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 0 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 – ''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