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