The Members,
 
 The Directors are happy to present the 49th Annual Report and Audited
 Accounts of the Company for the year ended 31st March, 2011.
 
 A.  FINANCIAL RESULTS                                 (Rs. in Crores)
 
 Particulars                             2010-11           2009-10
 
 1.  Gross Sales                         4925.49           4129.17 
 
 Less : Excise Duty Recovered             170.44            109.98 
 
 Net Sales                               4755.05           4019.19
 
 2.  Other Income                         101.20            113.01
 
 3.  Total Revenue                       4856.25           4132.20
 
 4.  Less : Operating Expenses           3583.18           3569.51
 
 5.  Operating Profit                    1273.07            562.69
 
 6.  Less : Interest                       13.78             30.62
 
 7.  Gross Profit                        1259.29            532.07
 
 8.  Less : Depreciation                  146.40            140.93
 
 9.  Prior Period Adjustment                0.44              2.02
 
 10.  Profit before taxes                1112.45            389.12
 
 11.  Taxation
 
 Current Tax                              308.34            156.46
 
 Deferred Tax (net)                        54.62            (21.93)
 
 Wealth Tax                                 0.12              0.12
 
 12.  Profit after taxes                  749.37            254.47
 
 13.  Balance brought forward from 
 last year                                 90.41             47.75
 
 14.  Amount available for appropriations 839.78            302.22
 
 15.  Out of which, your Directors have 
 proposed appropriation and transfer 
 as under :
 
 a) Proposed Dividend on Equity shares     55.79             35.86
 
 b) Tax on Proposed Dividend                9.05              5.96
 
 c) General Reserve                       640.00            170.00
 
 16.  Leaving a balance in the Profit & 
 Loss Account                             134.94             90.40
 
 B.  OPERATIONAL PERFORMANCE
 
 It is heartening to report that for the F.Y. 2010-11, your Company has
 achieved highest ever Profit before Tax (PBT) and Net Profit (Profit
 After Tax). PBT has increased from Rs.389 Crores in 2009-10 to Rs.1112
 Crores, registering an increase of 186%. Similarly, the Net profit was
 Rs.749 Crores which is almost three times the previous year''s net
 profit of Rs.254 Crores.
 
 During F.Y. 2010-11, there was constraint in availability of imported
 Phosphoric Acid at Sikka Unit, which affected production and
 availability of DAP. Inspite of this, the Company witnessed a rise of
 18% in net sales.  The net sales increased from Rs. 4019 Crores in
 2009-10 to Rs.4755 Crores in 2010-11. The Company achieved higher sales
 turnover as a result of better price realization in both the business
 segments viz.  Fertilizer and Industrial Products.
 
 The EBIDTA for 2010-11 was 1273 Crores as compared to Rs.563 Crores in
 the previous F.Y. 2009-10, thus showing stride of 126%. Better margins
 in Fertilizer and Industrial Product segments have improved the overall
 EBIDTA margin from 14% to 26.77%. The interest cost has decreased from
 Rs.31 Crores in previous year to Rs.14 Crores in F.Y.2010-11.
 
 C.  DIVIDEND
 
 Considering the excellent performance and profits for the year under
 review, your Directors are happy to recommend a dividend @70%, i.e.
 Rs.7/- per Equity Share (Previous Year - 45%, i.e. Rs. 4.50 per share)
 on 7,96,95,506 Equity Shares of Rs.10/- each for the financial year
 ended 31st March, 2011. The net outgo on account of Dividend shall be
 Rs.6483.69 Lacs including Corporate Dividend Tax. The Dividend shall be
 paid to those members, whose name shall appear on the Register of
 Members of the Company on the Book Closure Date i.e. on 03/09/2011.
 
 D.  CURRENT PERFORMANCE
 
 Your Directors are pleased to report that during the First Quarter (Q1)
 of Financial Year (F.Y.) 2011-12 also, your Company has achieved Net
 Profit of Rs.142 Crores which is ever highest in the Q1 of any
 Financial Year ever since its inception.  The EBIDTA margin has
 improved from 19% during Q1 of F.Y. 2010-11 to 25% during the Q1 of the
 current Financial Year. The above results are after making the
 provision for exceptional items aggregating Rs.52.63 Crores.
 
 The operational performance of your Company during Q1 of the current
 Financial Year is encouraging when the fertilizer production increased
 from 3.58 Lac Tons during Q1 of 2010-11 to 3.77 Lac Tons during the Q1
 of 2011-12. Similarly, the production of major Industrial Products viz.
 Caprolactam, Nylon-6, Melamine, etc., during the same period, remained
 above the capacity levels and when compared, it is higher than the
 production of the corresponding period of the previous Financial Year.
 The Net Sales of your Company during the Q1 of F.Y. 2011-12 is Rs.1208
 Crores which is higher by Rs.141 Crores (up by 13%) as compared to the
 Net Sales of Rs.1067 Crores during Q1 of F.Y. 2010-11. The sales price
 of major Industrial Products like Caprolactam, Melamine and Nylon-6
 were tuned in line with international prices. Similarly, price
 realization in Fertilizer segment was also higher. The prices of major
 raw materials showed a rising trend, thus affecting the cost of
 production.
 
 E.  LISTING OF SHARES & DEPOSITORIES
 
 The Equity Shares of your Company are listed on the Bombay Stock
 Exchange Limited (BSE) and National Stock Exchange of India Ltd. (NSE).
 As approved by the shareholders, an application for voluntary delisting
 of Equity Shares from Calcutta Stock Exchange Association Ltd.,
 Kolkatta, was made, however, the approval for delisting is still
 awaited.
 
 Your Directors wish to state that the Equity Shares of your Company are
 compulsorily traded in dematerialized form w.e.f. 26/06/2000.
 Presently, 58.37% of shares is held in electronic/dematerialised form.
 
 F.  REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND
 ANALYSIS REPORT TO SHAREHOLDERS
 
 Your Company has complied with all the mandatory requirements of
 Corporate Governance norms as mandated by Clause 49 of the Listing
 Agreement with Stock Exchanges. A separate report on Corporate
 Governance together with the Certificate of M/s. S. Samdani &
 Associates, Company Secretaries, Vadodara forms part of this Annual
 Report. The Management Discussion & Analysis report also forms part of
 this Annual Report.
 
 G.  FIXED DEPOSITS
 
 During the year 2010-11, your Company has not accepted / renewed any
 Fixed Deposit. Your Directors wish to report that there are 456 Fixed
 Deposits aggregating Rs.60.38 Lacs which have remained unclaimed by
 Depositors, as on 31st March, 2011. Letters reminding them to exercise
 their option to seek repayment have been sent. Upto and including the
 date of this report, 86 deposits amounting to Rs. 13.82 Lacs have been
 repaid.
 
 During the year, the Company has transferred a sum of Rs.13.53 Lacs
 being the unclaimed deposits and interest amount thereon to the
 Investors'' Education and Protection Fund as required in terms of
 Section 205C of the Companies Act, 1956.
 
 H.  INSURANCE
 
 All the properties and insurable interests of the Company, including
 the buildings, plant & machinery and stocks have been adequately
 insured. Also, as required under the Public Liability Insurance Act,
 1991, your Company has taken all the necessary insurance cover.
 
 I.  PROJECTS UNDER CLEAN DEVELOPMENT MECHANISM (CDM)
 
 Your Company has taken up various projects for reducing emission and
 energy saving. These projects have also been submitted for validation
 and registration under the Clean Development Mechanism. This would help
 your Company to earn Carbon Credit.
 
 Your Directors are happy to inform that a Project on fossil fuel
 change-over and Wind Mill Power Project of 10 MW have already got
 registered under CDM, while the Wind Mill Projects of 12 MW, 18 MW and
 33 MW are under registration process for availing carbon credit.
 
 J.  EXPANSION & DIVERSIFICATION
 
 Your Company has taken up conversion of Ammonia-I Plant for production
 of Methanol based on technology from M/s. Haldor Topsoe, Denmark. M/s
 Project & Development India Ltd. have been appointed as consultants for
 carrying out detailed engineering work for the project. The project is
 under execution and it is slated to be commissioned in the last quarter
 of F.Y. 2011-12. Your Company has also taken up modernization of
 Cyclohexanone unit at Vadodara.
 
 Your Company has participated in a strategic Joint Venture with
 Tunisian Indian Fertilizers (TIFERT) in Tunisia with a view to ensure
 consistent supply of Phosphoric Acid for optimized running of its DAP
 Plant at Sikka.  The Project is slightly delayed due to political
 turmoil in Tunisia and it is now expected to be commissioned by the
 last quarter of F.Y.2011-12.
 
 Your Company has been conscious of the development of green technology
 and with a view to translate this into a reality; it has commissioned
 its first 10 MW Wind Mill Power Project at Kutch in March 2008 and
 added another 12 MW Wind Mill Power Project in January 2009 in Kutch
 District. Your Company has subsequently implemented 18 MW Wind Power
 Project in Porbandar Dist. and 33 MW Wind Power Project in Kutch Dist.
 These projects are working satisfactorily and are meeting the Company''s
 captive power requirements as well as selling surplus power to State
 Grid. Encouraged by the performance of these Wind Mill Projects, the
 incentives available from the Government and the global need of green
 energy, your Company is in the process of implementing additional 50.4
 MW Wind Power capacity in Rajkot and Surendranagar Districts of
 Gujarat.
 
 Your Directors also wish to inform that capacity addition of Nylon-6
 plant by another 15000 MTPA is planned at Baroda and the technology
 tie-up for the same is under progress.
 
 Your Directors are pleased to inform that your Company has ambitious
 plan for setting up larger capacity plants at Dahej replicating its
 existing Baroda Unit for which land acquisition and technology search
 activities are progressing well.
 
 K.  INFORMATION REGARDING CONSERVATION OF ENERGY, TECHNOLOGY
 ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO AND PARTICULARS OF
 EMPLOYEES ETC.
 
 Information as required under Section 217(1)(e) of the Companies Act,
 1956, read with Rule (2) of the Companies (Disclosure of Particulars in
 the Report of Board of Directors) Rules, 1988 is given in Annexure A
 forming part of this report. The Company does not have any employee
 falling within the purview of Section 217(2A) of the Companies Act,
 1956 and hence such Particulars of Employees are not included.
 
 L.  DIRECTORS
 
 - Managing Director :
 
 With effect from 13/07/2011 Shri Atanu Chakraborty, IAS has been
 appointed as Managing Director of the Company in place of Shri H.V.
 Patel, IAS. Accordingly, a resolution relating to his appointment is
 placed for your approval. Your Directors place on record their
 appreciation for the dynamic and vibrant leadership provided by Shri
 H.V. Patel, IAS during his tenure as Managing Director of the Company.
 
 - Change in Directors :
 
 Pursuant to the provisions of Section 255 & 256 of the Companies Act,
 1956, Shri D.C. Anjaria and Prof.  Vasant P. Gandhi shall be liable to
 retire by rotation at the ensuing Annual General Meeting and being
 eligible, have offered themselves for re-appointment.
 
 The appropriate resolutions for appointment/reappointment of Directors
 are placed for the approval of shareholders.
 
 Your Directors also take this opportunity to welcome Shri Atanu
 Chakraborty, IAS the new Managing Director of the Company.
 
 M.  DIRECTORS'' RESPONSIBILITY STATEMENT
 
 As required under Section 217 (2AA) of the Companies Act, 1956, the
 Directors hereby confirm that:
 
 i) In the preparation of the Annual Accounts, the applicable Accounting
 Standards have been followed and that no material departures have been
 made from the same;
 
 ii) The appropriate accounting policies have been selected and applied
 consistently and judgments & estimates have been made that are
 reasonable and prudent, so as to give a true and fair view of the state
 of affairs of the Company as at 31st March, 2011 and of the profit of
 the Company for the period from 1st April, 2010 to 31st March, 2011;
 
 iii) Proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities; and
 
 iv) The Annual Accounts have been prepared on a Going Concern basis.
 
 N.  AUDITORS
 
 Your Directors wish to inform that as on the date of writing of this
 report, the provisions of Section 619-B of the Companies Act, 1956 does
 not apply to your Company and hence the appointment and fixation of
 remuneration of Statutory Auditors of the Company for Financial Year
 2011-12 shall be done by the Shareholders at the ensuing Annual General
 Meeting. The suitable resolution/s to that effect has been included in
 the notice convening the said meeting.
 
 Your Directors would further like to mention that the provisions of the
 said Section 619-B is not applicable w.e.f.  quarter ended 30th
 September, 2010 due to the reason that the shareholding of specified
 shareholders having gone down below the threshold limits and hence the
 CAG has not conducted the supplementary audit of accounts for the year
 under review.
 
 Your Directors further state that as on the date of writing of this
 report, provisions of Section 619-B do not apply to the Company and
 accordingly the resolution for appointment and fixation of remuneration
 of the Statutory Auditors is proposed.
 
 However, as a matter of abundant precaution, parallely your Directors
 propose a resolution regarding authorization for fixation of
 remuneration etc. to the Statutory Auditors, should the provisions of
 Section 619-B apply before the date of ensuing Annual General Meeting.
 
 Your Directors also recommend the approval of Resolutions for
 appointment and/or fixation of remuneration to the Statutory Auditors/
 Branch Auditors for the F.Y. 2011-12 as the case may be.
 
 Pursuant to the directive from the Ministry of Corporate Affairs
 regarding appointment of Cost Auditor, M/s Diwanji & Associates, Cost
 Accountants, Vadodara have been appointed as the Cost Auditor for
 Fertilizers, Chemicals & Nylon Products of the Company for the
 Financial Year 2011-12. The approval of the Central Government for the
 said appointment is received. The Cost Auditor for the F.Y. 2009-10 was
 also M/s Diwanji & Associates, Cost Accountants, Vadodara and the Cost
 Audit Report was filed on 24.09.2010 (i.e. three days before the
 stipulated date of 27.09.2010). W.e.f. F.Y. 2011-12, the Ministry has
 directed to carry out the Cost Audit for the Wind Mill Power Projects
 also and accordingly M/s. Diwanji & Associates, Cost Accountants,
 Vadodara have been appointed as Cost Auditors. The necessary
 application in this regard is being made to the Central Government.
 
 Your Company has also appointed M/s Haribhakti & Co., Chartered
 Accountants, Mumbai as Internal Auditors for carrying out the Internal
 Audit of its Baroda Unit and Sikka Unit. M/s K.N.Mehta & Co., Chartered
 Accountants, Vadodara and M/s Parikh Mehta & Associates, Chartered
 Accountants, Vadodara have been appointed as Internal Auditors for the
 Company''s Polymers and Fibre Units respectively.
 
 O.  AUDITORS'' REPORT
 
 With regard to observations of Statutory Auditors contained in their
 Report, the Company has provided clarifications in Schedule 22 Notes
 on Accounts.
 
 P.  ENVIRONMENTAL PROTECTION
 
 Your Company holds the valid Consolidated Consent & Authorization from
 Gujarat Pollution Control Board and has complied with all the relevant
 statutory requirements. The renewal application for the same has been
 submitted and is under process.
 
 Your Company has implemented a scheme for 100% utilization of treated
 sewage water for gardening purpose in February 2011.
 
 Your Directors are pleased to inform that conservation, protection &
 promotion of clean and green environment is of vital concern in all
 facets of its business. As a part of Environment Management System, our
 conscious efforts are on towards waste minimization, recycling and
 conservation of natural resources to the maximum possible extent for
 the protection of environment. The Fertilizer Group of plants has
 maintained zero process effluent discharge system. The revamping of our
 Effluent Treatment Plants is in progress for enhancing its treatment
 capacity.
 
 Your Company is continuously looking for new ways for conservation of
 natural resources (water, energy and raw materials) and wastes
 minimization for the protection of environment. The multifarious
 eco-friendly initiatives adopted by your Company include:-
 
 - Implementing energy conservation schemes.
 
 - Reducing the use of natural resources like fuel, water etc.
 
 - Promoting the use of alternative fuels and materials.
 
 - Tree plantation campaigns.
 
 - Awareness programs for employees at all levels and for community.
 
 - Complying with statutory requirements as applicable from time to time
 in letter and spirit.
 
 The gaseous emission generated through different processes from plants
 is maintained well within the permissible limit through sophisticated
 Air Pollution Control Devices and the scrubbing liquor emanating from
 the plants are used for recovering important resources. Your Company is
 also going for installation of GAS Detectors in different plants and
 Ambient Air Monitoring Stations in four directions in the premises for
 continuous monitoring of gaseous pollutants.
 
 Majority of hazardous solid wastes are sold to recyclers authorized by
 the Pollution Control Board and the remaining solid wastes are disposed
 off at Pollution Control Board approved facilities.
 
 During the year under review, your Company was conferred with the
 prestigious Gujarat State Safety Award 2009 a Certificate of Honor
 from Gujarat Safety Council and Director Industrial Safety & Health for
 achieving more than 30 Lacs million man-hours without any accident
 among Category- 1 Group A Industries.
 
 External statutory audit for Safety & Health was conducted by British
 Safety Council for all the four Units during Nov.-Dec.2010.
 
 Your Company has obtained BS EN 16001:2009 Energy Management System
 Certification in July, 2010. This system will help your Company to
 improve energy performance including energy efficiency. It will also
 lead to reduction in energy cost and Green House Gases emission through
 systematic management of energy.
 
 Your Company is also conscious about the environment and the ecological
 balance and is promoting horticultural activities.  It has taken
 initiative to make GSFC greener by planting large number of quality
 trees such as Banyan, Pipal and Neem, thus also supporting the
 initiative of the Govt. of Gujarat in this direction.
 
 Q.  HUMAN RESOURCES
 
 Your Directors are happy to acknowledge that with the competent,
 motivated and cost conscious personnel, the Company made significant
 strides in its operations. The employees have been able to meet the
 challenges from time to time to improve upon the performance of its
 plants through efficiency, productivity and economy.  Your Directors
 are happy to place on record their appreciation for the sincere efforts
 and contributions made by the employees of the Company.
 
 The pending issue of permanency of contract labours has been
 successfully resolved during the year. With a view to sensitizing the
 employees towards higher productivity, your Company has introduced a
 Production, Productivity & Profitability linked Incentive Scheme from
 F.Y. 2009-10 effective for three years and a settlement to this effect
 has been signed with the Employees'' Union during the year.
 
 The Company has also continued its endeavor to impart appropriate and
 relevant training to its employees at various levels with a view to
 prepare them to take up increased challenges that are ahead and to
 enhance their performance in the overall interest of the Company.
 
 The industrial relations remained cordial during the year.
 
 R.  ACKNOWLEDGEMENTS
 
 Your Directors place on record their appreciation for the overwhelming
 co-operation and assistance received from the Government of Gujarat,
 Government of India, Bank of Baroda and other Banks and agencies. Your
 Directors also wish to express their gratitude to the investors for
 their continued support and faith reposed in the Company.
 
                                       For and on behalf of the Board
 
                                                                 Sd/- 
 
 Place : Fertilizernagar                                   A. K. Joti
 
 Date : 28th July, 2011                                      Chairman