GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED _

Fertilize rnagar- 391 750. Vadodar a, Gujarat, INDIA.

CIN: L99999G J1962PL C001121

NO.SEC/ AR/2020 5th Septemb er, 2020

The Corporate Relationsh ip Departme nt The Manager, Listing Departme nt

BSE Limited National Stock Exchange of India Ltd.
1st Floor, New Trading Ring 'Exchange Plaza', C/1, Block G
Rotunda Bldg., P.J.Towers, Dalal Street Bandra-K urla Complex
Fort, MUMBAI - 400 001 Bandra (East), MUMBAI - 400 051

SCRIP CODE : 500690 SYMBOL: GSFC

Sub : Submiss ion of Annual Report- Clause 34 of the SEBI (Listing

Obligatio ns and Disclosu re Requirem ents), Regulatio ns, 2015.

Dear Sir/Madam ,

We submit herewith 58th Annual Report of the Company for the Financial Year
2019-202 0 together with the Notice of 58th Annual General Meeting of the
Company scheduled to be held on Wednesday, the 30th Septembe r, 2020 at 10.30
a.m. through Video Conferenc e (VC)/ Other Audio Visual Means (OAVM), in
accordance with the relevant Circulars issued by the Ministry of Corporate Affairs
(MCA) and Securities Exchange Board of India (SEBI).

The said Annual Report together with the Notice is also available on the Website of
the Company www.gsfc limited.co m.

A copy of the 58th Annual Report is being emailed to all Sharehold ers of the
Company whose E-mail IDs are registered with the Company /R&T Agents & DPs.

Kindly take the same on record.

Thanking you,

Yours faithfully,
For Gujarat Stat~ Fertilizer s & Chemica ls Limited
I .. , . .,.

E-mail : vishvesh@ gsfcltd.co m

Ph.: (0) +91-265-2242451, 2242651,2242751,2242641

Fax: +91-265-2240966- 2240119 • Email : [email protected] • Website: www.gsfclimited.com
ISO 9001.1SO 14001.1SO 45001 & ISO 50001 cenified Companv
 GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED
[Corporate Identity Number (CIN) : L99999GJ1962PLC001121]
BOARD OF DIRECTORS (As on 03-09-2020)
58TH ANNUAL GENERAL MEETING SHRI ARVIND AGARWAL Chairman & Managing Director
SHRI D C ANJARIA
Date : 30th September, 2020 PROF. VASANT P GANDHI
SHRI AJAY N SHAH
Day : Wednesday SHRI VIJAI KAPOOR
Time : 10.30 a.m. SMT. GEETA GORADIA
SHRI PANKAJ JOSHI
Through Video Conferencing (“VC”) / Other Audio SMT. SUNAINA TOMAR
Visual Means (“OAVM”). DR. RAVINDRA DHOLAKIA (FROM 02-09-2020)
SHRI TAPAN RAY (FROM 02-09-2020)
SMT. GAURI KUMAR (FROM 02-09-2020)
DR. SUDHIR KUMAR JAIN (FROM 02-09-2020)
EXECUTIVE DIRECTOR (FINANCE) & CFO
CONTENTS Page No. SHRI V D NANAVATY
Notice ........................................................................02 EXECUTIVE DIRECTOR
Directors' Report ......................................................18 SHRI S P YADAV
SHRI S V VARMA
Business Responsibility Report ............................. 43 SHRI B B BHAYANI
SHRI D B SHAH
Management Discussion and Analysis Report ..... 51
SR. VICE PRESIDENTS
Corporate Governance Report ............................... 60 SHRI A K JAUHARI
SHRI D V PATHAKJEE
Financial Highlights .................................................80 SHRI S H PUROHIT
Auditors' Report .......................................................81 SHRI MAYUR GARG
COMPANY SECRETARY & SR. VICE PRESIDENT (LEGAL)
Balance Sheet ..........................................................90 CS V V VACHHRAJANI
Statement of Profit & Loss ....................................... 92 VICE PRESIDENT / CHIEF
SHRI H D MEHTA
Cash Flow Statement ..............................................93 SHRI J P MANDAVIA
Statement of Changes in Equity (SOCIE) .............. 94 DR. P B VAISHNAV
BANKERS
Notes to the Financial Statements .......................... 95 Bank of Baroda
Consolidated Financial Statements .................... 142 Central Bank of India
Bank of India
Dena Bank
Indian Bank
REGISTRARS & SHARE TRANSFER AGENTS Vijaya Bank
Yes Bank Ltd.
Link Intime India Pvt. Ltd. State Bank of India
B-102 & 103, Shangrila Complex, First Floor, Indian Overseas Bank
Opp. HDFC Bank, Near Radhakrishna Char Rasta, Axis Bank Ltd.
Akota, Vadodara - 390 020. The Hongkong and Shanghai Banking Corporation Ltd.
Phone : (0265) 2356573 LEGAL ADVISORS AND ADVOCATES
Fax : (0265) 2356791 Nanavati Associates, Advocates, Ahmedabad
Email : [email protected] Kunan Naik Associates, Advocates, Ahmedabad
Jaideep B. Verma, Advocate, Vadodara
REGISTERED OFFICE
Fertilizernagar - 391 750 STATUTORY AUDITORS
District Vadodara, Gujarat, India M/s T R Chadha & Co., LLP, Ahmedabad
Phone : (0265) 2242451/651/751 COST AUDITORS
Fax : (0265) 2240966/2240119 M/s Diwanji & Company, Vadodara
Email : [email protected] SECRETARIAL AUDITORS
Website : www.gsfclimited.com Niraj Trivedi, Vadodara

58TH ANNUAL REPORT 2019-20 1

 NOTICE

NOTICE is hereby given that the Fifty-Eighth Annual General Meeting of the Members of the Gujarat State Fertilizers
& Chemicals Limited will be at 1030 hours Indian Standard Time (IST) on Wednesday, the 30th September, 2020
through video conferencing (“VC”) / other audio visual means (“OAVM”) to transact the following business:
Ordinary Business
1. To receive, consider and adopt:
a) the Audited Financial Statements of the Company for the Financial Year ended March 31, 2020, the
reports of the Board of Directors and Auditors thereon; and
b) The Audited Consolidated Financial Statements of the Company for the Financial Year ended March 31,
2020 and report of the Auditor thereon.
2. To declare Dividend on Equity Shares.
3. To appoint a Director in place of Smt. Sunaina Tomar, IAS (DIN 03435543), who retires by rotation and being
eligible offers herself for re-appointment.
Special Business
4. To approve the remuneration of the Cost Auditors for the Financial Year ending 31 st March, 2021 and in this
regard, to consider and if thought fit, to pass the following resolution as an Ordinary Resolution:
“RESOLVED that pursuant to Section 148 and other applicable provisions, if any, of the Companies Act, 2013
read with Rule 14 of Companies (Audit and Auditors) Rules, 2014 (including any statutory modifications or re-
enactment thereof, for the time being in force), the remuneration payable to M/s Diwanji & Company, Cost
Accountants, Vadodara (Firm Registration No. 000339), appointed by the Board of Directors of the Company as
cost auditors to conduct the audit of the cost records of the Company, as applicable for the financial year ending
March 31, 2021, amounting to ` 4,80,000/- plus applicable taxes and reimbursement of out of pocket expenses
incurred in connection with the aforesaid audit, be and is hereby ratified.
5. To appoint Shri Tapan Ray, (DIN 00728682), as an Independent Director and in this regard, to consider and if
thought fit, to pass the following resolution with or without modification(s), as an Ordinary Resolution:
RESOLVED that pursuant to the provisions of Section 149,152 and any other applicable provisions of the
Companies Act, 2013 and the rules made there under (including any statutory modification(s) or re-enactment
thereof for the time being in force) read with Schedule IV of the Companies Act, 2013 and the applicable
provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement)
Regulations, 2015 (including any statutory modification(s) or re-enactment thereof for the time being in force),
Shri Tapan Ray, (DIN 00728682), who is appointed as an Additional Director of the Company in the category of
Independent Director and in respect of whom the Company has received a notice in writing under Section 160
of the Act from a member proposing his candidature for the office of director, be and is hereby appointed as an
Independent Director of the Company to hold office, for the first term of five consecutive years from the conclusion
of 58th Annual General Meeting till the conclusion of the 63rd Annual General Meeting.”
6. To appoint Prof. Ravindra Dholakia, (DIN 00069396) as an Independent Director and in this regard, to consider
and if thought fit, to pass the following resolution with or without modification(s), as an Ordinary Resolution:
RESOLVED that pursuant to the provisions of Section 149,152 and any other applicable provisions of the
Companies Act, 2013 and the rules made there under (including any statutory modification(s) or re-enactment
thereof for the time being in force) read with Schedule IV of the Companies Act, 2013 and the applicable
provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement)
Regulations, 2015 (including any statutory modification(s) or re-enactment thereof for the time being in force),
Prof. Ravindra Dholakia, (DIN 00069396), who is appointed as an Additional Director of the Company in the
category of Independent Director and in respect of whom the Company has received a notice in writing under
Section 160 of the Act from a member proposing his candidature for the office of a director, be and is hereby
appointed as an Independent Director of the Company to hold office, for the first term of five consecutive years
from the conclusion of 58th Annual General Meeting till the conclusion of the 63rd Annual General Meeting.”

2 58TH ANNUAL REPORT 2019-20

 NOTES (Contd..)

7. To appoint Smt. Gauri Kumar (DIN 01585999) as an Independent Director and in this regard, to consider and if
thought fit, to pass the following resolution with or without modification(s), as an Ordinary Resolution:
RESOLVED that pursuant to the provisions of Section 149,152 and any other applicable provisions of the
Companies Act, 2013 and the rules made there under (including any statutory modification(s) or re-enactment
thereof for the time being in force) read with Schedule IV of the Companies Act, 2013 and the applicable
provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement)
Regulations, 2015 (including any statutory modification(s) or re-enactment thereof for the time being in force),
Smt. Gauri Kumar (DIN 01585999), who is appointed as an Additional Director of the Company in the category
of Independent Director Company and in respect of whom the Company has received a notice in writing under
Section 160 of the Act from a member proposing her candidature for the office of director, be and is hereby
appointed as an Independent Director of the Company to hold office, for the first term of five consecutive years
from the conclusion of 58th Annual General Meeting till the conclusion of the 63rd Annual General Meeting.”
8. To appoint Dr. Sudhir Kumar Jain (DIN 03646016) as an Independent Director and in this regard, to consider
and if thought fit, to pass the following resolution with or without modification(s), as an Ordinary Resolution:
RESOLVED that pursuant to the provisions of Section 149,152 and any other applicable provisions of the
Companies Act, 2013 and the rules made there under (including any statutory modification(s) or re-enactment
thereof for the time being in force) read with Schedule IV of the Companies Act, 2013 and the applicable
provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement)
Regulations, 2015 (including any statutory modification(s) or re-enactment thereof for the time being in force),
Dr. Sudhir Kumar Jain (DIN 03646016), who is appointed as an Additional Director of the Company in the
category of Independent Director and in respect of whom the Company has received a notice in writing under
Section 160 of the Act from a member proposing his candidature for the office of director, be and is hereby
appointed as an Independent Director of the Company to hold office, for the first term of five consecutive years
from the conclusion of 58th Annual General Meeting till the conclusion of the 63rd Annual General Meeting.”
9. To appoint Shri Arvind Agarwal (DIN 00122921), as Chairman & Managing Director of the Company and to
approve terms & conditions of remuneration & perquisites of Shri Arvind Agarwal and in this regard, to consider
and if thought fit, to pass the following resolution with or without modification(s), as an Ordinary Resolution:
RESOLVED that subject to the provisions of Section 196, 197 and any other applicable provisions of the
Companies Act, 2013 and the rules made there under (including any statutory modification(s) or re-enactment
thereof for the time being in force) read with Schedule V to the Companies Act, 2013, the Company hereby
accords its consent and approval to the appointment of Shri Arvind Agarwal (DIN 00122921), as Chairman and
Managing Director of the Company on the terms & conditions of remuneration and perquisites as set out in the
explanatory statement annexed hereto.
FURTHER RESOLVED that the remuneration, benefits and perquisites as set out in the explanatory statement
shall be paid and allowed to him as minimum remuneration notwithstanding the absence/ inadequacy of profit
in the year.
FURTHER RESOLVED that the Board of Directors are hereby authorized to approve any revision/ modification
to the remuneration, perquisites or terms & conditions as per the communication by the Government from time
to time during the continuity of his appointment.
FURTHER RESOLVED that so long as Shri Arvind Agarwal, functions as Chairman and Managing Director of
the Company, he shall not be paid any sitting fees for attending the meetings of the Board of Directors or
Committees thereof.
By Order of the Board
Sd/-
CS V. V. Vachhrajani
Place : Fertilizernagar Company Secretary &
Date : 02/09/2020 Sr. Vice President (Legal)

58TH ANNUAL REPORT 2019-20 3

 NOTES (Contd..)

EXPLANATORY STATEMENT
PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013
ITEM NO. 04
The Board, on recommendation of the Audit Committee, has approved the appointment and remuneration of the Cost
Auditors to conduct the audit of the cost records of the Company for the financial year ending on March 31, 2021 at
a fee of ` 4,80,000/- plus applicable taxes and reasonable out of pocket and traveling expenses.
In accordance with the provisions of Section 148 of the Companies Act, 2013 read with Companies (Audit and
Auditors) Rules, 2014, the remuneration payable to the cost auditors as recommended by the Audit Committee and
approved by the Board of Directors, has to be ratified by the members of the Company.
Accordingly, consent of the members is sought for passing an ordinary resolution as set out at item no. 4 of the notice
for ratification of the remuneration payable to the cost auditors for the financial year ending March 31, 2021.
None of the Directors/ Key Managerial Personnel of the Company/ their relatives are, in any way, concerned or
interested, financially or otherwise, in the resolution set out at Item No.4 of the notice.
ITEM No. 05 to 8
As recommended by the Nomination-cum-Remuneration Committee vide circular resolution dtd. 02 nd September,
2020, the Board of Directors has proposed to appoint Shri Tapan Ray, Dr. Ravindra Dholakia, Smt. Gauri Kumar and
Dr. Sudhir Kumar Jain as Independent Directors of the Company for a first term of five years not liable to retire by
rotation and subject to the approval of the Members of the Company. Pursuant to Sections 149, 152, Schedule IV and
other applicable provisions of the Companies Act, 2013 (“the Act”) and the Rules made thereunder, it is proposed to
seek approval of the Members for appointment of Shri Tapan Ray, Dr. Ravindra Dholakia, Smt. Gauri Kumar and Dr.
Sudhir Kumar Jain as an Independent Directors of the Company for a term of five years. They shall not be liable to
retire by rotation. Pursuant to the provisions of Section 161 of the Act, being Independent Directors, all the four
Additional Directors so appointed in the category of Independent Directors will hold office up to the date of the
ensuing Annual General Meeting (AGM) and are eligible for appointment as Independent Directors of the Company.
The Company has received notice/s in writing under Section 160 of the Act from four Members proposing candidatures
of each of them to hold the office of Directors. The Company has received from Shri Tapan Ray, Dr. Ravindra
Dholakia, Smt. Gauri Kumar and Dr. Sudhir Kumar Jain (i) Consent in writing to act as a Director in Form DIR-2
pursuant to Rule 8 of Companies (Appointment & Qualification of Directors) Rules, 2014, (ii) Intimation in Form DIR-
8 in terms of Companies (Appointment & Qualification of Directors) Rules, 2014, to the effect that he is not disqualified
under Section 164(2) of the Act, (iii) A declaration to the effect that he meets the criteria of independence as provided
in Section 149 (6) of the Act and under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
(SEBI Listing Regulations). Brief profile along with other details as required pursuant to Regulations 26 (4) & 36 (3)
of SEBI Listing Regulations and Secretarial Standards as applicable of Shri Tapan Ray, Dr. Ravindra Dholakia, Smt.
Gauri Kumar and Dr. Sudhir Kumar Jain is given in the Annexure-I forming part of this Notice. It is recommended to
appoint Shri Tapan Ray, Dr. Ravindra Dholakia, Smt. Gauri Kumar and Dr. Sudhir Kumar Jain as the Independent
Directors of the Company. In the opinion of the Board, Shri Tapan Ray, Dr. Ravindra Dholakia, Smt. Gauri Kumar and
Dr. Sudhir Kumar Jain fulfills the conditions specified in the Companies Act, 2013 and Rules made thereunder and
they are independent of management. The association of Shri Tapan Ray, Dr. Ravindra Dholakia, Smt. Gauri Kumar
and Dr. Sudhir Kumar Jain would be of immense benefit to the Company and it is recommended to approve their
appointment as Independent Directors.
The terms and conditions of appointment of Independent Director applicable to Shri Tapan Ray, Dr. Ravindra
Dholakia, Smt. Gauri Kumar and Dr. Sudhir Kumar Jain are available on the Website of the Company at
www.gsfclimited.com.
Except the Independent Director whose candidature is proposed for appointment, none of the other Directors / Key
Managerial Personnel of the Company and their relatives is/are, in any way, concerned or interested, financially or
otherwise, in the aforesaid Resolution No. 5 to 8 of the Notice. This Statement shall also be regarded as a disclosure
under Regulation 36 (3) of the SEBI Listing Regulations. The Board recommends the Resolution at Item No. 5 to 8 of
the Notice for your approval.

4 58TH ANNUAL REPORT 2019-20

 NOTES (Contd..)

Item No. 9:
As per Govt. of Gujarat Order No.AIS/35.2019/46/G dated 06/12/2019, Shri Arvind Agarwal, IAS was appointed as
Chairman and Managing Director of the Company vice Shri Sujit Gulati, IAS (Retd). Shri Arvind Agarwal assumed
charge of the Company on 07/12/2019 as the Chairman and Managing Director.
Shri Arvind Agarwal presently, is a retired senior IAS Officer of Government of Gujarat. He has done Post Graduation
in Commerce. He has also completed CA (intermediate) having secured 11 th rank in the country. He did his 3
years CA Articleship from Price Waterhouse, Mumbai.
He has very rich and varied experience of more than 33 years and has held distinguished positions in Government
of Gujarat like District Development Officer and Collector - Bharuch, Labour Commissioner, Industrie s
Commissioner, Additional Chief Secretary to Education, Industries & Mines Departments, Additional Chief Secretary
to Finance Department.
He was Managing Director, Gujarat State Financial Corporation Ltd., Vice Chairman & Managing Director, Gujarat
Industrial Development Corporation (GIDC). He has rich experience in the field of Finance, Management and
Administration.
He has authored a Book in Gujarati viz. “Panchayat Parichay”. He was awarded as “Best Collector” during his
posting in Bharuch. He was also appointed as Additional Chief Secretary, Forest & Environment Department,
Government of Gujarat.
He superannuated from Indian Administrative Service in April 2020. Presently, he is Chairman and Managing
Director of Gujarat State Fertilizers & Chemicals Ltd., Vadodara.
Govt. of Gujarat vide resolutions no. GSF/1098/1620/E dated 03/02/2020 & no. AIS/35.2019/172888/G dated 09/06/
2020 prescribed the terms & conditions as to remuneration in respect of Shri Arvind Agarwal and has also been
recommended by the Nomination and Remuneration Committee and the Board of Directors.
In terms of Schedule V and other applicable provisions of the Companies Act, 2013, the appointment of Shri Arvind
Agarwal as Chairman and Managing Director and payment of remuneration to him requires the approval of the
shareholders in General Meeting. He does not have any shares of the Company in his name.
The terms & conditions of appointment and particulars of remuneration and perquisites paid/ payable to Shri Arvind
Agarwal (DIN 00122921) are as follows:-
1. Period of Duration:
Shri Arvind Agarwal, is sent on deputation as Chairman and Managing Director of Gujarat State Fertilizers &
Chemicals Co. Ltd., Vadodara with effect from the date he assumed the charge till 30/04/2020 or until further
orders whichever is earlier.
After his superannuation from Indian Administrative Service in April 2020, the appointment of Shri Arvind
Agarwal, IAS (Retd.) as Chairman & Managing Director, Gujarat State Fertilizers & Chemicals Limited, Vadodara
shall be upto 06/12/2020 or until further orders, whichever is earlier.
2. Pay:
During the period of Deputation, Shri Arvind Agarwal, IAS will be eligible to draw his pay in the grade of
Additional Chief Secretary to Government by virtue of equation of the post of Chairman & Managing Director of
Gujarat State Fertilizers & Chemicals Ltd., Vadodara with the lAS Cadre post of Secretary to Government vide
GAD Resolution No. AIS/30/2019/626118/G dated 12 th December, 2019.
After his superannuation from Indian Administrative Service in April 2020, his pay will be fixed on the basis of
formula of “last pay drawn minus pension” as per 7 th Pay Commission.
3. Dearness Allowance:
Shri Arvind Agarwal, will be eligible to draw Dearness Allowance at such rate as may be prescribed by the State
Government from time to time.
After his superannuation from Indian Administrative Service in April 2020, he will get the Dearness Allowances
on the last day drawn by him immediately before his retirement. By virtue of this, he shall not be entitled to get
any Temporary Increase in monthly pension. He shall be provided a vehicle and chauffer for discharging his
official duties.

58TH ANNUAL REPORT 2019-20 5

 NOTES (Contd..)

4. City Compensatory Allowance:

Shri Arvind Agarwal will be eligible to draw city Compensatory Allowance as per the rules applicable to the lAS
Officer working in connection with the affairs of the State.
5. License Fee for residential Accommodation:
Shri Arvind Agarwal would be required to pay 10% of the pay plus DA/DP & CCA or the prescribed license fee
for similar class of accommodation in the State Government, whichever is lower.
After his superannuation from Indian Administrative Service in April 2020, he will be allowed facility of residential
accommodation on the same scale as was being allowed to him while in service prior to his retirement on
superannuation.
6. Transfer TA/Joining Time:
Shri Arvind Agarwal will be entitled to Transfer TA and Joining Time under the rules of organization to which he
is appointed. Facility of joining time shall not be inferior to that available to AIS Rules. Facility of transfer TA shall
not be inferior to that available under the relevant provisions as applicable to IAS officers working under the
Gujarat Government. The expenditure on this account will be borne by the organization.
7. TA and DA for Journey on duty:
Shri Arvind Agarwal, IAS will be paid Travelling Allowance and Daily Allowance by the borrowing organization
under the Rules of the borrowing organization for the journey undertaken by him in connection with the official
work under that organization. While undertaking foreign visits by the official, the instructions contained in GAD
Circular No. AIS/109/1720/G dated 17/04/1999, as amended from time to time, will be applicable for the purpose
of drawl of per diem and in other matters.
After his superannuation from Indian Administrative Service in April 2020, he will get the Travelling Allowances,
Daily Allowances & Other Allowances with reference to the last pay drawn by him while in service prior to his
retirement or superannuation. He will not get any transport allowance.
8. Medical Facilities:
The borrowing organization shall afford to Shri Arvind Agarwal, IAS, the medical services facilities as per the
Rules of the borrowing organization but shall not be inferior to those admissible to an All India Service Officer
of his rank and seniority under the All India Services (Medical Attendance) Rules, 1954.
After his superannuation from Indian Administrative Service in April 2020, he will get medical facilities/ medical
reimbursement as available to an AIS Pensioner under the Standing Order of the Health and Family Welfare
Department.
9. Leave and Pension:
During the period of deputation, Shri Arvind Agarwal, IAS will continue to be governed by the All India Service
(Leave) Rules, 1955 and the All India Services (DCRB) Rules, 1958. The entire expenditure in respect of leave
taken during and at the end of deputation shall be borne by the borrowing organization.
After his superannuation from Indian Administrative Service in April 2020, he will be allowed 15 days paid leave
on non-cumulative and non-encashment basis for the period of contract, but he will not be allowed to encash
the accumulated earned leave on completion of the contract period.
10. Provident Fund:
During the period of Foreign Service Shri Arvind Agarwal, IAS, will continue to subscribe to the All India
Services (Provident Fund) Scheme/ contributory Provident Fund Scheme to which he was subscribing at the
time of proceeding on Foreign Service in accordance with the rules of such Fund/ Scheme.
11. Conduct, Discipline & Appeal Rules:
During the period of Foreign Service, Shri Arvind Agarwal shall continue to be governed by All India Services
(Conduct) Rules, 1968 and the All India Services (Discipline & Appeal) Rules, 1969.
12. Leave Travel Concession:
The Gujarat State Fertilizers & Chemicals Ltd., Vadodara shall allow Leave Travel Concession to Shri Arvind
Agarwal as admissible to him under the All India Services (LTC) rules, 1975. The whole expenditure in this
regard will be borne by the borrowing organization.

6 58TH ANNUAL REPORT 2019-20

 NOTES (Contd..)

13. Disability Leave:

The Gujarat State Fertilizers & Chemicals Ltd., Vadodara will be liable to pay leave emoluments in respect of
disability leave, if any granted to Shri Arvind Agarwal, IAS, on account of any disability incurred in and through
Foreign Service even though such disability manifests itself after termination of the Foreign Service. The
relevant AIS rules will be applicable in such cases.
14. Leave Salary/ Pension Contribution:
Shri Arvind Agarwal shall not be permitted to join the Pension Schemes of the borrowing organization under
any circumstances. The entire expenditure in respect of pension and leave salary contribution for the period of
deputation shall be borne by the borrowing organization failing which by the officer himself.
The organization will pay to the Government the leave salary and pension contribution at the rates force from
time to time in accordance with the orders issued by the President under FR 116. The payment of these
contributions must be paid annually within 15 days from the end of each financial year or at the end of Foreign
Services, if deputation expires before the end of a financial year. Delayed payment will attract liability of
payment of interest in the terms of instructions contained in the Ministry of Finances’ Notification No. F.1 (1)/
E.IIII83 dated 10th August, 1983, as amended from time to time. Pending intimation of the rates of leave salary
and pension contributions by the Accountant General, Gujarat, Rajkot/ Ahmedabad, the organization shall pay
leave salary and pension contribution provisionally at the prescribed rates.
15. Group Insurance:
Shri Arvind Agarwal, IAS will be governed by the All India Services Group Insurance Rules, 1981. The amount
deducted from his salary as per the prescribed rates as subscription towards the Central Government Employees
Group Insurance Scheme, 1980 shall be remitted to the concerned Accountant General, Gujarat, Rajkot /
Ahmedabad by the organization. If at any time, the recovery of subscription falls in arrears, the same shall be
recovered with interest admissible under the Scheme on the accretions to the Saving Fund.
16. Residuary Matters:
In all matters relating to conditions of service and benefits/ facilities and perquisites in the borrowing organization
not covered by items 1 to 15 above, Shri Arvind Agarwal, IAS, shall be governed by corresponding rules,
regulations and orders laid down for AIS officers working in connection with the affairs of the state.
After his superannuation from Indian Administrative Service in April 2020, he will get the facility of residential
telephone on the same scale as he was getting prior to his retirement. This facility will be available only if he is
not provided mobile phone for official use. He will also be entitled to get other facilities as were received by him
immediately before his retirement as Additional Chief Secretary to the Government.
The above mentioned terms & conditions would be applicable till Shri Arvind Agarwal, remains on deputation
with the Company. On reversion from Appointment, he will be governed by the relevant rules laid down for All
India Services Officers.
The Appointment of Shri Arvind Agarwal and the remuneration and perquisites payable to him are in accordance
with Schedule V to the Companies Act, 2013. Shri Arvind Agarwal has long and extensive experience in
Government Service. Accordingly, the directors commend this resolution for your consent and approval.
Except Shri Arvind Agarwal, none of the Directors/ Key Managerial Personnel of the Company/ their relatives is,
in anyway, concerned or interested, financial or otherwise, in the resolution set out at Item No. 09. This Explanatory
Statement may also be regarded as a disclosure under the Listing Regulations with the Stock Exchange.

By Order of the Board

Sd/-
CS V. V. Vachhrajani
Place : Fertilizernagar Company Secretary &
Date : 02/09/2020 Sr. Vice President (Legal)

58TH ANNUAL REPORT 2019-20 7

 NOTES (Contd..)

Notes:
1. In view of the continuing present Covid-19 pandemic situation, the Ministry of Corporate Affairs ( “MCA”) has
vide its Circular dated May 5, 2020 read together with circulars dated April 8, 2020 and April 13, 2020 (collectively
referred to as “MCA Circulars”) permitted convening the Annual General Meeting (“AGM” / “Meeting”) through
Video Conferencing (“VC”) or Other Audio Visual Means (“OAVM”), without the physical presence of the members
at a common venue. In accordance with the aforementioned MCA Circulars, provisions of the Companies Act,
2013 (‘the Act’) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (“SEBI Listing Regulations”), the 58th AGM of the Company is being held through VC / OAVM.
The deemed venue for the AGM shall be the Registered Office of the Company.
2. Since, this AGM is being conducted through VC/OAVM, Physical attendance of Members is not required
and has been dispensed with. Accordingly, facility for appointment of proxies by the Members will not be
available for this AGM and hence the Proxy Form and Attendance Slip are not annexed to this Notice.
Members can attend the meeting through login credentials provided to them to connect AGM.
3. In compliance with the MCA Circulars and SEBI Circular dated May 12, 2020, Notice of 58 th AGM along with
Annual Report 2019-20 is being sent only through electronic mode to those Members whose email addresses
are registered with the Company/Depositories. Members may note that the Notice along with Annual Report
2019-20 has been uploaded on the website of the Company at www.gsfclimited.com and on the websites of the
Stock Exchanges at www.bseindia.com and www.nseindia.com and on the website of CDSL at
www.evotingindia.com.
4. Members attending AGM through VC/OAVM shall be counted for the purpose of reckoning quorum under
Section 103 of the Act.
5. Since the AGM will be held through VC/OAVM, the route map of the venue of the meeting is not annexed hereto.
6. A Statement pursuant to Section 102 (1) of the Companies Act, 2013, in respects of special business to be
transacted at the meeting is annexed hereto.
7. The Register of Members and Share Transfer Books of the Company shall remain closed from Wednesday, the
16 th September, 2020 to Wednesday, the 30th September, 2020 (both days inclusive).
8. The dividend on equity shares, if declared at the AGM, will be paid on or after 12 th October, 2020 to those
shareholders holding shares in physical form and whose names appear on the Register of Members of the
Company on book closure date. In respect of shares held in electronic form, the dividend will be payable to
those who are the beneficial owners of shares after close of business hours on book closure date as per details
furnished by National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL).
Dividend Warrants/Demand Drafts will be dispatched to the registered address of the shareholders who have
not updated their bank account details.
9(a) Members holding shares in electronic form may note that their bank details as may be furnished to the Company
by respective Depositories will only be considered for remittance of dividend through NECS/ECS or through
Dividend Warrants. Beneficial Owners holding Shares in demat form are requested to get in touch with their
Depository Participants (DP) to update / correct their NECS/ ECS details - MICR (9 digits) and Bank Account No.
(11 to 16 digits) to avoid any rejections and also give instructions regarding change of address, if any, to their
DPs.
9(b) The Company has appointed Link Intime India Pvt. Ltd. as Registrar and Share Transfer Agent (R&T Agent).
Members are requested to send all future correspondence to Link Intime India Pvt. Ltd. at B-102 & 103, Shangrila
Complex, 1st Floor, Opp. HDFC Bank, Near Radhakrishna Char Rasta, Akota, Vadodara 390 020. Members
holding shares in physical mode are requested to notify immediately any change in their addresses, the Bank
mandate or Bank details along with photocopy of the cancelled cheque or self attested copy of bank passbook
to the R&T Agent of the Company.
9(c) Shareholders of the Company holding shares in physical mode are requested to register their E-mail address
with Registrar and Share Transfer Agent (RTA) of the Company viz. Link Intime India Pvt. Ltd. at https://
www.linkintime.co.in/ EmailReg/Email_Register.html by entering the details of Folio No./Certificate No. (for
Physical Folios only), Shareholder Name, PAN, Mobile No. and E-mail address with OTP Verification or

8 58TH ANNUAL REPORT 2019-20

 NOTES (Contd..)

Shareholders may send such details through E-mail at [email protected]. While uploading/ sending
the said details, self-certified copy of PAN and copy of Aadhar Card or valid Passport are required to be
attached for verification purpose. Shareholders who hold shares in dematerialised form can also register their
e-mail address, PAN, Mobile Number etc. with their Depository Participant or with the RTA of the Company on
the aforesaid link.
10. In addition to the updation of E-mail address of the shareholders of the Company, those shareholders who hold
shares in physical mode may also register / update their Bank Account details at the aforesaid link or can send
an E-mail, mentioning the Folio No. to the RTA of the Company by attaching copy of their cancelled cheque or
self attested copy bank passbook.
11. The Shareholders are advised to encash their dividend warrants within validity period. Thereafter, the payment
of unencashed dividend warrants shall be made only after receipt of final list of unclaimed dividend warrants
and reconciliation of Dividend Account from Bank. The payment of unclaimed dividend will be made by electronic
bank transfer or in case of failure, by issuing banker’s cheque or Demand Draft incorporating the bank accounts
details of security holder upon furnishing Indemnity-cum-Request letter by the Shareholder and verification by
the Company.
12(a) Pursuant to the provisions of Section 205A (5) and 205C of the erstwhile Companies Act, 1956 and the
corresponding provisions of Section 124 of the Companies Act, 2013 read with the Investor Education and
Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended, the amount of
dividend unclaimed dividend upto FY 2011-12 have been transferred from time to time on respective due dates
to Investor Education and Protection Fund (IEPF). Details of unpaid/unclaimed dividend lying with the Company
as on March 31, 2020 is available on the website of the Company at www.gsfclimited.com.
12(b) Attention of the Members is drawn to the provisions of Section 124 (6) of the Act read with the Investors
Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended,
which requires a Company to transfer all Shares in respect of which dividend has not been paid or claimed for
seven (07) consecutive years or more to IEPF Authority. In compliance with the aforesaid provision of the Act the
Company has transferred the underlying shares in respect of which dividends remained unclaimed for a
consecutive period of seven years.
12(c) The Members who have not encashed dividend warrant(s) for the years 2012-13, 2013-14, 2014-15, 2015-16,
2016-17, 2017-18 and 2018-19 are requested to claim payment immediately by writing to the Company secreatry
at its registered office. After seven years, unclaimed dividend shall be transferred to the Investor Education and
Protection Fund. Pursuant to provisions of the Investor Education and Protection Fund Authority (Accounting,
Audit, Transfer and Refund) Rules, 2016, as amended, the details of unclaimed dividend amount lying with the
Company as on 31.03.2019 has been uploaded on the Company’s website (www.gsfclimited.com) and also
filed with the Ministry of Corporate Affairs.
13. Any person, whose unclaimed dividend or shares have been transferred to the IEPF Authority may claim back
the same by making an application in Web Form IEPF 5 to the IEPF Authority, which is available on Website of
IEPF Authority at www.iepf.gov.in or on Company’s website http://www.gsfclimited.com/IEPF.asp?mnuid=5.
14. Pursuant to the provisions of Section 72 of the Companies Act, 2013, Shareholders are entitled to make
nomination in respect of the shares held by them in physical form. Shareholders desirous of making nominations
are requested to send their requests in Form SH-13 (filled in “duplicate”) to the R&T Agent, Link Intime India Pvt.
Ltd. at the address given above.
15. Members who have not registered their e-mail addresses so far are requested to register their email
address for receiving all communication including Annual Report, Notices, Circulars, etc. from the Company
electronically to the R&T agent.
16. Shareholders who would like to express their views/ask questions during the meeting may register themselves
as a speaker by sending their request in advance latest by 22 nd September, 2020 by mentioning their name,
demat account number/folio number, email id, mobile number at [email protected]. The shareholders who
do not wish to speak during the AGM but have queries may send their queries in advance latest by 22 nd
September, 2020 mentioning their name, demat account number/folio number, email id, mobile number at
[email protected]. These queries will be replied to by the company suitably by email. Those shareholders
who have registered themselves as a speaker will only be allowed to express their views/ask questions during
the meeting.

58TH ANNUAL REPORT 2019-20 9

 NOTES (Contd..)

Inspection of documents:
All documents referred to in this Notice and Statement u/s. 102 of the Act will be available for inspection
electronically by the members of the Company from the date of circulation of this Notice upto the date of the
AGM. Members seeking to inspect such documents can send an e-mail to [email protected]/
[email protected].
17. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account
Number (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore,
requested to submit their PAN to their Depository Participants with whom they are maintaining their demat
accounts. Members holding shares in physical form should submit their PAN to the Company/ R&T Agent.
18. Procedure for Remote E-Voting, Attending the AGM through Video Conference/Other Audio Visual Means (VC/
OAVM) and E-Voting facility during the AGM:
The detailed process, instructions and manner for availing Remote e-Voting, attending AGM through VC/OAVM
and E-Voting facility during the AGM is shown hereunder:
(I) As per Section 108 of the Companies Act, 2013, read with Rule 20 of the Companies (Management and
Administration) Rules, 2014 as amended by Companies (Management and Administration) Amendment
Rules, 2015 and Regulation 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, and the Circulars issued by the Ministry of Corporate Affairs dated April 08, 2020, April 13, 2020 and
May 05, 2020 the Company is providing facility for voting by electronic means (“e-Voting”) and the business
in respect of all Shareholders’ Resolutions may be transacted through such e-Voting. The facility is
provided to the Shareholders to exercise their right to vote by electronic means from a place other than the
venue of AGM (“remote e-Voting”) as well as e-voting system on the date of AGM through e-Voting
services provided by Central Depository Services (India) Limited (CDSL).
(II) The Company has fixed 23rd September, 2020, Wednesday as a cut-off date to record the entitlement of
the Shareholders to cast their votes electronically by remote e-Voting as well as by e-voting system on the
date of AGM.
(III) The remote e-Voting period commences on Sunday, 27th September, 2020 (09:00 a.m.) and ends on
Tuesday, 29th September, 2020 (05:00 p.m.). During this period, Shareholders of the Company holding
shares either in physical form or in dematerialized form as on the cut-off date, i.e. 23rd September, 2020
may cast their vote electronically. The e-Voting module shall be disabled by CDSL for voting after 5.00
p.m. on 29th September, 2020. Once the vote on a resolution is cast by the Member, he/she shall not be
allowed to change it subsequently.
Any person, who becomes Member of the Company after dispatch of the Notice of the meeting and
holding shares as on the cut-off date i.e. Wednesday, 23rd September, 2020 may obtain USER ID and
password by following e-Voting instructions which is part of Notice and the same is also placed in e-
Voting Section of CDSL Website i.e. www.evotingindia.com and Company’s Website i.e.
www.gsfclimited.com . For further guidance, Members are requested to send their query by email at
[email protected]. Members can also cast their vote using CDSL’s mobile app m-Voting
available for android based phones. The m-Voting app can be downloaded from Google Play Store.
Apple and Windows phone users can download the app from the App Store and the Windows Phone
Store respectively. Please follow the instructions as prompted by the mobile app while voting on your
mobile.
(A) Procedure for Remote E-voting:
Below mentioned steps should be followed to cast vote(s) electronically:
(a) The Shareholders should log on to the e-Voting Website: www.evotingindia.com.
(b) Click on “Shareholders” tab.
(c) Now, Enter your User ID:
i For CDSL: 16 digits beneficiary ID.
ii For NSDL: 8 Character DP ID followed by 8 Digits Client ID.

10 58TH ANNUAL REPORT 2019-20

 NOTES (Contd..)

iii Members holding shares in Physical Form should enter Folio Number registered with the
Company.
OR
Alternatively, if you are registered for CDSL’s EASI/EASIEST e-services, you can log-in at https://
www.cdslindia.com from Login - Myeasi using your login credentials. Once you successfully log-in
to CDSL’s EASI/EASIEST e-services, click on e-Voting option and proceed directly to cast your vote
electronically.
(d) Next enter the Image Verification Code as displayed and Click on Login.
(e) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on
an earlier voting of any company, then your existing password is to be used.
(f) If you are a first time user, please follow the steps given below:
For Members holding shares in Demat Form and Physical Form
Permanent Account Enter your 10 digit alpha-numeric PAN issued by Income Tax
Number (PAN) Department (Applicable for both shareholders holding shares in demat
as well as physical).
Members who have not updated their PAN with the Company /
Depository Participant are requested to use the 10 Digits Sequence
Number. The sequence Number is communicated by e-mail indicated
in the PAN field.
Dividend Bank Details Enter the Dividend Bank Details or Date of Birth in dd/mm/yyyy format
OR Dateof Birth (DOB) as recorded in your demat account or in the company records in order
to login. If both the details (i.e. Dividend Bank Details and Date of
Birth) are not registered with the Company or Depository, please enter
the Member ID / Folio No. in the Dividend Bank details field mentioned
in instruction (c) herein above.
(g) After entering these details appropriately, click on “SUBMIT” tab.
(h) Members holding shares in physical form will then directly reach the Company selection screen.
However, members holding shares in demat form will now reach “Password Creation” menu wherein
they are required to mandatorily enter their login password in the new password field. Kindly note
that this password is to be also used by the demat holders for voting for resolutions of any other
company on which they are eligible to vote, provided that company opts for e-Voting through CDSL
platform. It is strongly recommended not to share your password with any other person and take
utmost care to keep your password confidential.
(i) For Members holding shares in physical form, the details can be used only for e-Voting on the
resolutions contained in this Notice.
(j) Click on the EVSN 200828002 for the relevant company i.e. GUJARAT STATE FERTILIZERS &
CHEMICALS LIMITED for which you choose to vote.
(k) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option
“YES/NO” for voting. Select the option “YES” or “NO” as may be desired by you. The option “YES”
implies that you assent to the Resolution and option “NO” implies that you dissent to the Resolution.
(l) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.
(m) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will
be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on
“CANCEL” and accordingly modify your vote.
(n) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.
(o) You can also take a print of the votes cast by clicking on “Click here to print” option on the Voting
page.

58TH ANNUAL REPORT 2019-20 11

 NOTES (Contd..)

(p) If a demat account holder has forgotten the login password, then Enter the User ID and the image
verification code and click on Forgot Password & enter the details as prompted by the system.
(q) Members can also use Mobile app – “m-Voting” for e voting. The m-Voting app can be downloaded
from respective Store. Please follow the instructions as prompted by the mobile app while Remote
Voting on your mobile. Shareholders may log in to m-Voting using their e voting credentials to vote
for the Company resolution(s).
(r) Note for Non-Individual Shareholders and Custodians:
• Non-Individual Shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are
required to log on to www.evotingindia.com and register themselves as Corporates.
• A scanned copy of the Registration Form bearing the stamp and sign of the entity should be
emailed to [email protected].
• After receiving the login details, users would be able to link the account(s) for which they wish
to vote on.
• The list of accounts linked in the login should be mailed to [email protected]
and on approval of the accounts they would be able to cast their vote.
• A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued
in favour of the Custodian, if any, should be uploaded in PDF format in the system for the
scrutinizer to verify the same.
(s) You can also update your mobile number and e-mail ID records with R&T Agent/Company (for
physical shares) and with DP (for Demat Shares) before cut-off date i.e 23.09.2020, for e-Voting.
(t) In case you have any queries or issues regarding e-Voting, you may refer the Frequently Asked
Questions (“FAQs”) and e-Voting manual available at www.evotingindia.com under ‘Help Section’
or write an email to [email protected] or contact Mr.Nitin Kunder (022- 23058738 )
or Mr. Mehboob Lakhani (022-23058543) or Mr. Rakesh Dalvi (022-23058542).
All grievances connected with the facility for voting by electronic means may be addressed to Mr.
Rakesh Dalvi,Manager, (CDSL) Central Depository Services (India) Limited, A Wing, 25th Floor,
Marathon Futurex, Mafatlal Mill Compounds, N M Joshi Marg, Lower Parel (East), Mumbai -400013
or send an email to [email protected] or call on 022-23058542/43.
(B) Instructions for Shareholders for E-Voting during the AGM:
1. The procedure for e-Voting on the day of the AGM is same as the instructions mentioned in Point A
above for Remote e-voting.
2. Only those Shareholders, who are present in the AGM through VC/OAVM facility and have not
casted their vote on the Resolutions through remote e-Voting and are otherwise not barred from
doing so, shall be eligible to vote through e-Voting system available in the AGM.
3. If any Votes are cast by the Shareholders through the e-voting available during the AGM and if the
same shareholders have not participated in the meeting through VC/OAVM facility, then the votes
cast by such shareholders shall be considered invalid as the facility of e-voting during the meeting
is available only to the shareholders participating in the meeting.
4. Shareholders who have voted through Remote e-Voting will be eligible to attend the AGM. However,
they will not be eligible to vote at the AGM.
5. The voting rights of shareholders shall be in proportion to their shares of the paid up equity share
capital of the Company as on the cut-off date of 23 rd September, 2020.
6. Mr. Niraj Trivedi, Practicing Company Secretary, 218-219, Saffron Complex, Fatehgunj, Vadodara:
390 002 (Gujarat) has been appointed as Scrutinizer to scrutinize the remote e-voting process as
well as the e-voting system on the date of the AGM.
7. The result of the voting will be announced by the Chairman of the meeting within stipulated time as
per the Scrutinizer’s Report to be submitted to the Chairman. The results of voting will be
communicated to the stock exchanges and will be placed on the CDSL’s Website (under “Notices –

12 58TH ANNUAL REPORT 2019-20

 NOTES (Contd..)

Results section”) i.e. www.evotingindia.com; on the Website of the Company i.e. www.gsfclimited.com
and also on the notice board of the Company.
(C) Process for those shareholders whose email ids are not registered:
i. For members holding shares in Physical mode - please provide necessary details like Folio No.,
Name of Shareholder by email to [email protected].
ii. Members holding shares in Demat mode can get their email id registered by contacting their respective
Depository Participant or by email to [email protected].
(D) Procedure for joining the AGM through VC / OAVM:
1. The Members can join the AGM through VC/OAVM mode 15 minutes before and after the scheduled
time of the commencement of the Meeting by following the procedure mentioned in the Notice. The
facility of participation at the AGM through VC/OAVM will be made available for 1,000 members on
first come first served basis. This will not include large Shareholders (Shareholders holding 2% or
more shareholding), Promoters, Institutional Investors, Directors, Key Managerial Personnel, the
Chairpersons of the Audit Committee, Nomination and Remuneration Committee and Stakeholders
Relationship Committee, Auditors etc. who are allowed to attend the AGM without restriction on
account of first come first served basis.
2. Members will be provided with a facility to attend the AGM through VC/OAVM through the CDSL e-
Voting system. Members may access the same at https://www.evotingindia.com under shareholders’
/ members’ login by using the remote e-voting credentials. The link for VC/OAVM will be available in
shareholder/members login where the EVSN of Company will be displayed.
3. Members are encouraged to join the Meeting through Laptops for better experience.
4. Further, Members will be required to allow Camera and use Internet with a good speed to avoid any
disturbance during the meeting.
5. Please note that Participants Connecting from Mobile Devices or Tablets or through Laptop
connecting via Mobile Hotspot may experience Audio/Video loss due to fluctuation in their respective
network. It is therefore recommended to use Stable Wi-Fi or LAN Connection to mitigate any kind of
aforesaid glitches.
Contact Details
Company: Gujarat State Fertilizers & Chemicals Limited
P.O.: Fertilizernagaar - 391 750
DIST.: VADODARA (GUJARAT)
Phone: (0265) 2242451, Extn. 3582
E-mail: [email protected]
Registrar & Share Transfer Agent: Link Intime India Private Limited (Unit: GSFC)
B -102 &103, Shangrila Complex, 1st Floor, Opp. HDFC Bank,
Near Radhakrishna Char Rasta, Akota,
VADODARA: 390 020 (GUJARAT)
Phone: (0265) 2356573 / 6136000
E-mail: [email protected]
e-Voting Agency : Central Depository Services (India) Limited
E-mail: [email protected]
Phone: +91-22-22723333/8588
Scrutinizer: Mr. Niraj Trivedi
Practicing Company Secretary
218-219, Saffron Complex, Fatehgunj,
VADODARA : 390 002 (GUJARAT)
E-mail: [email protected]

58TH ANNUAL REPORT 2019-20 13

 NOTES (Contd..)

Annexure – I
DETAILS OF DIRECTORS SEEKING APPOINTMENT / REAPPOINTMENT BY THE SHAREHOLDERS OF THE
COMPANY AT THE ENSUING ANNUAL GENERAL MEETING IN PURSUANCE OF REGULATION 26 (4) & 36 (3)
OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 AND APPLICABLE
SECRETARIAL STANDARDS
Name of Director Dr. Ravindra Dholakia Shri Tapan Ray, IAS (Retd.) Smt. Gauri Kumar
DIN 00069396 00728682 01585999
Date of Birth 02/04/1953 09/09/1957 16/08/1955
Date of first 02/09/2020 02/09/2020 02/09/2020
appointment
No. of Shares Nil Nil Nil
held by self or by
any beneficial
basis for
any other person
Relationship with -- -- --
other Directors /
Key Managerial
Personnel
Qualifications Master of Arts (Gold Medalist), Ph. Post Graduate in Public IAS (Retd.)
D. in Economics (MSU, Baroda) and Policy, Princeton University
Post-Doctoral Fellow (Uni. Of USA,
Toronto) Master of Public
Administration, Syracuse
University USA.
B. Tech. Mechanical
Engineering, IIT, Delhi.
Executive Masters in Foreign
Trade, IIFT, New Delhi.
LL.B M S University LL.B. (spl)
Gujarat University
Diplomas in International Law,
International Business
Nature of Dr. Ravindra H. Dholakia, a retired He has served in the IAS for Very wide experience of
Expertise/ IIM Ahmedabad Professor of thirty five years, in the working in various
Experience Economics, has more than 43 years Ministries of Defence, Textiles, Government Departments
of experience in research, teaching, Power, Science &Technology, both at State Government
training and consulting in the fields and Planning in the level and with the
of macroeconomic measurements Government of India. He has Government of India.
and policy, regional development served as Principal Secretary,
and sectoral issues like health, Finance Department,
education, rural development, Government of Gujarat.
labour, etc. He has corporate experience
He has provided consultancy to of over 12 years in various
state and central governments, companies of Government of
public and private sector Gujarat and Government of
companies, and international India, and was the Managing
organisations such as WHO, Director of the Gujarat State
UNICEF, ADB, World Bank, etc. He Petroleum Corporation group
has worked as a member of several of Companies for about 5
high powered committees years. He has extensive

14 58TH ANNUAL REPORT 2019-20

 NOTES (Contd..)

Nature of constituted by the Central and State

knowledge and experience in Very wide experience of
Expertise/ governments. He has published the field of Finance, working in various
Experience more than 140 research papers, 23 Economics, Technology, Law, Government Departments
books and 51 monographs. Capital Markets, Management, both at State Government
Foreign Trade, Public Policy level and with the
and Administration. He was Government of India.
Additional Secretary,
Department of Electronics and
IT, and held charge as DG
National Informatics Centre
(NIC), Government of India,
before taking over as
Secretary, Ministry of
Corporate Affairs. He has
served on the board of
the Securities and Exchange
Board of India (SEBI). After
retirement, he has been
appointed as the Non-
Executive Chairman of Central
Bank of India. Currently,
working as Managing Director
and Group CEO of GIFTCL,
Gandhinagar.
Names of other 1. Adani Transmission Limited 1. Gift SEZ Limited. 1. Gujarat Mineral
Companies in 2. Gujarat State Petroleum 2. Gujarat International Development
which Corporation Finance Tec-City Corporation Limited
Directorship is Company Limited. 2. Gujarat Narmada Valley
held 3. Gift Power Company Fertilizers & Chemicals
Limited. Limited
4. Central Bank of India 3. GCAP World Softech
Private Limited
Names of the Adani Transmission Limited - Gujarat Narmada Valley
Committees of Audit committee – member Fertilizers & Chemicals
the Board of Nomination & Remuneration Limited
Companies in committee - member Audit committee – member
which Nomination &
Membership/ Gujarat State Petroleum Remuneration committee -
Chairmanship is Corporation member
Audit committee – member CSR committee – member
held
Risk Mgt. - member

58TH ANNUAL REPORT 2019-20 15

 NOTES (Contd..)

Name of Director Dr. Sudhir Kumar Jain Shri Pankaj Joshi Smt. Sunaina Tomar Shri Arvind Agarwal*
DIN 03646016 01532892 03435543 00122921
Date of Birth 04/07/1959 19/10/1965 01/12/1965 23/04/1960
Date of first 02/09/2020 21/12/2019 04/01/2020 07/12/2019
appointment
No. of Shares held by Nil Nil Nil Nil
self or by any
beneficial basis for
any other person
Relationship with - - - --
other Directors / Key
Managerial Personnel
Qualifications Bachelor of Engineering from the University of Shri Pankaj Joshi is a senior lAS Smt. Sunaina Tomar is a senior lAS Shri Arvind Agarwal presently,
Roorkee, Officer, with distinguished academic Officer, with academic background is a retired senior IAS Officer of
Masters and Doctoral degrees from the background of B.Tech in Civil of M.A. (Psychology). Government of Gujarat. He has
California Institute of Technology, Pasadena. Engineering, M. Tech in Water done Post Graduation in
Resource Engineering and M.Phil in Commerce. He has also
Defence & Strategic Studies. completed CA (intermediate)
having secured 11 th rank in the
country. He did his 3 years CA
Articleship from Price
Waterhouse, Mumbai.
Nature of Expertise/ Dr. Sudhir Kumar Jain is an active academic Having joined the Indian Administrative Having joined the Indian Shri Arvind Agarwal, IAS, is a very
Experience and a passionate academic administrator. He Service in 1989, he has held various Administrative Service in 1989, she Senior IAS Officer of Government of
is currently serving his third term as director of important positions in the Government has held various important positions Gujarat. He has done Post
the Indian Institute of Technology of Gujarat in various departments like in the Government of Gujarat in Graduation in Commerce. He has
Gandhinagar (IITGN), which he joined as various departments for about 20 very rich and varied experience of
Land revenue, Personnel and General
founder director in June 2009. He was on the years. She has wide experience in more than 33 years and has held
Administration, Urban Development
faculty of IIT Kanpur for 35 years from 1984- the public administration. She has distinguished positions in
2019. Dr. Jain holds a Bachelor of and Education Department for about 20 held distinguished positions in the Government of Gujarat like District
Engineering from the University of Roorkee, years. Government of Gujarat in various Development Officer and Collector -
and Masters and Doctoral degrees from the He has also worked with the Union departments including National Bharuch, Labour Commissioner,
California Institute of Technology, Pasadena. Government in various Departments Rural Health Mission, Land Industries Commissioner, Additional
He has served as President of the like Urban Development, Social Justice Reforms, Women & Child Dev Chief Secretary to Education,
International Association for Earthquake and Empowerment, Public Transport Deptt, Social Justice & Industries & Mines Departments,
Engineering during 2014 to 2018. He was etc. for about 6 years. Empowerment, Welfare of SC & BC, Government of Gujarat & Additional
elected Fellow of the Indian National Academy He has wide experience at the senior Education Dept, Ports & Transport Chief Secretary to Finance
of Engineering in 2003, and was conferred level in the public administration and etc. She has also worked with the Department, Government of
Padma Shri by the President of India in 2020. policy in various areas. Union Government as Joint Gujarat.
Secretary, Ministry of Textiles. She He was Managing Director, Gujarat
also holds Directorship of various State Financial Corporation Ltd.,
Government Companies. Presently Vice Chairman & Managing
She is Principal Secretary to the Director, Gujarat Industrial
Energy and Petrochemicals Development Corporation (GIDC).
Department, Government of He has rich experience in the field of
Gujarat. Finance, Management and
Administration. He has authored a
Book in Gujarati viz. "Panchayat
Parichay". He was awarded as
"Best Collector" during his posting in
Bharuch. He was also appointed as
Additional Chief Secretary, Forest &
Environment Department,
Government of Gujarat.

16 58TH ANNUAL REPORT 2019-20

 NOTES (Contd..)

Names of other 1. Gujarat State Petronet Limited. 1. Sardar Sarovar Narmada Nigam 1. Gujarat State Petroleum 1. Indian Potash Limited.
Companies in which 2. GSPL India Gasnet Limited Limited Corporation Limited 2. GSFC Agrotech Limited.
Directorship is held 3. GSPL India Transco Limited. 2. Gujarat State Financial Services 2. Gujarat Gas Limited 3. Gujarat Green Revolution
4. Gift Sez Limited. Limited 3. Gujarat Power Corporation Company Limited.
5. Gujarat International Finance Tec-City 3. Gujarat Alkalies and Chemicals Limited 4. Gujarat Port and Logistics
Company Limited. Limited 4. Gujarat Industries Power Company Limited.
6. IIT Gandhinagar Research Park 4. Gujarat International Finance Tec- Company Limited 5. Gujarat Narmada Valley
7. IIT Gandhinagar Innovation and City Company Limited 5. Gujarat State Electricity Fertilizers & Chemicals Ltd
entrepreneurship Center. 5. Gujarat State Petroleum Corporation Limited
Corporation Limited 6. Gujarat Energy Transmission
6. Gujarat State Investment Limited Corporation Limited
7. Gujarat Metro Rail Corporation 7. Gujarat Urja Vikas
Limited (GMRC) Nigam Limited
8. Torrent Power Limited
Names of the GSPL India Gasnet Limited Gujarat Alakalies and Chemicals Gujarat State Petroleum Gujarat State Fertilizers &
Committees of the Member – Audit Committee Limited Corporation Limited Chemicals Limited
Board of Companies 1. Member – Audit Committee 1. Member – Project Committee 1. Member – CSR
in which GSPL India Transco Limited. 2. Member – CSR Committee 2. Member – CSR Committee Committee
Membership/ Member – Audit Committee 3. Member – Project Committee 3. Member – Committee for 2. Member – Nomination and
Chairmanship is held Gujarat State Petroleum Financial Restructuring Remuneration Committee
Gujarat International Finance Tec-City Corporation Limited 4. Member – HR Committee 3. Member – Risk Mgt.
Company Limited. 1. Member – Project Committee 5. Member - Nomination and Committee
Member – Audit Committee 2. Member – Audit Committee Remuneration Committee
3. Member – Committee of Directors
for Gujarat Gas Limited
Financial Restructuring 1. Chairman – CSR Committee
4. Member – Committee of onshore 2. Member - Nomination and
Block Remuneration Committee
5. Member - HRCommittee
Gujarat International Finance Tec - Gujarat State Fertilizers &
City Chemicals Limited
Company Limited 1. Member CSR Committee
1. Member Audit Committee 2. Member – Project Committee
Gujarat State Financial Services 3. Member - Nomination and
Limited Remuneration Committee
1. Member – Audit Committee 4. Member – Risk Management
2. Member – CSR Committee Committee
3. Chairman – Finance Committee
4. Chairman – Investment Committee Gujarat State Electricity
5. Chairman – Personnel Committee Corporation Limited
6. Member – Risk Management & 1. Chairman – Project cum
Assets procurement Committee
Liability Committee
Gujarat State Fertilizers & Gujarat Energy
Chemicals Limited Transmission
1. Member – CSR Committee Corporation Limited
2. Member – Nomination and 1. Chairman - Project
Remuneration Committee cum procurement Committee
3. Member – Project Committee
Sardar Sarovar Narmada Nigam
Limited
1. Member – Finance Committee
2. Member – Purchase and Tender
Committee
3. Member – Project Committee
4. Member - Statue of Unity
Committee
5. Member – CSR Committe
Gujarat Metro Rail Corporation
(GMRC) Limited
1. Chairman – Audit Committee
2. Member – Project Committee
*For details regarding the number of meetings of the Board / Committees attended by the above Directors during the year and remuneration drawn /
sitting fees received, please refer to the Board's Report and the Corporate Governance Report forming part of this Annual Report.

58TH ANNUAL REPORT 2019-20 17

 DIRECTORS' REPORT

To
The Members,
Your Directors have pleasure in presenting their 58th Annual Report on the business and operations of the Company
and the accounts for the Financial Year ended March 31, 2020.
1. Financial highlights of the Company
(` in Crores)
Sr. Particulars Standalone Consolidated
No. 2019-20 2018-19 2019-20 2018-19
1 Gross Sales 7620.82 8574.54 7797.98 8490.67
2 Other Income 109.19 104.90 106.51 107.53
3 Total Revenue 7730.01 8679.44 7904.49 8598.20
4 Less : Operating Expenses 7318.13 7827.15 7480.76 7742.01
5 Operating Profit 411.88 852.29 423.73 856.19
6 Less : Finance Cost 114.69 61.26 114.80 61.01
7 Gross Profit 297.19 791.02 308.93 795.18
8 Less : Depreciation 170.21 125.61 170.95 126.25
9 Exceptional Item 0 0 0 0
10 Profit before Taxes 126.98 665.42 137.98 668.92
11 Shares in Profit/(Loss) of Associates 0.00 0.00 2.94 0.02
12 Profit before taxes after Associates 126.98 665.42 140.92 668.94
13 Taxation
• Current Tax - 123.23 2.99 125.61
• Deferred Tax (net) 24.79 53.11 24.79 54.81
• Mat Credit recognized - (6.89) - (6.89)
• Earlier year tax 3.49 2.29 3.49 2.29
14 Profit after taxes 98.70 493.68 109.64 493.13
15 Non-controlling Interest 0.00 0.00 -0.06 -0.001
16 Other comprehensive income arising from
re-measurement of defined benefit plan (201.20) (8.37) (201.22) (8.35)
17 Balance brought forward from last year 431.69 432.06 472.52 473.52
18 Amount available in retained earnings 329.19 917.37 380.89 958.30
19 Payment of Dividend
- Dividend 87.66 87.66 87.66 87.66
- DDT Paid 18.02 18.02 18.12 18.12
20 Transfer to General Reserve - 380.00 - 380.00
21 Leaving a balance in retained earnings 223.51 431.69 275.11 472.53

2. Dividend:
Your Directors are happy to recommend a dividend @ 60%, i.e. ` 1.20/- per Equity Share (Face value of ` 2/-
each) on 39,84,77,530 shares (Previous Year - 110%, i.e. ` 2.20 per share on 39,84,77,530 Equity Shares of
` 2/- each) for the financial year ended 31st March, 2020. The net outgo on account of Dividend shall be ` 47.82
Crores. The Dividend shall be paid to those members, whose names shall appear on the Register of Members
of the Company on the Book Closure Date i.e. on 15/09/2020.
3. Brief description of the Company’s working during the year/ State of Company’s affair:
Your directors wish to report that your Company has achieved turnover of ` 7620.82 Crores for the year ended
March 31, 2020 as against ` 8574.53 Crores (FY 18-19) on standalone basis, which is lower by 36% (`953.71
Crores) when compared to the previous financial year.

18 58TH ANNUAL REPORT 2019-20

 DIRECTORS' REPORT (Contd..)

Similarly, for the year under review (FY 2019-20), Profit before Tax (PBT) was ` 126.98 Crores and Net Profit
(Profit after Tax) was ` 98.70 Crores as against PBT of ` 665.42 Crores and PAT of ` 493.68 Crores for the
previous financial year.
4. Material changes and commitments:
The Company has not made any material changes or commitments which affect the financial position of the
Company between the end of the financial year of the Company to which the financial statements relate and the
date of signing of this report.
Global Pandemic COVID-19
This year Novel Coronavirus (Covid-19) Pandemic has affected the majority of the countries globally including
India. Apart from human suffering, it has also caused major economic disruptions. The Government of India has
issued various Advisories/Guidelines on preventive measures to contain the spread of Covid-19. The Iockdowns
and restrictions imposed on various activities due to Covid-19 pandemic have posed challenges to the businesses
of the Company. In order to control the spread of Covid-19, the Government had issued various guidelines
including nation-wide lockdown with effect from 25th March 2020 for 21 days which was further extended upto
May 2020. Initially, the Company reduced its manufacturing operations of its various plants at Vadodara Unit
and Sikka Unit with effect from 25th March 2020, resulting into significant reduction in economic activities. Later
on, the Company had taken complete shut-down of its plants at Vadodara Unit and Sikka Unit in line with the
Government of India's announcement from time to time to observe nation-wide Iockdown. From 3rd April, 2020
onwards, the Company resumed partial operation of its various plants at Vadodara Unit and Sikka Unit in
phased manner considering the requirements of various municipal corporations and other essential industries
after obtaining necessary permissions from the concerned Authorities. As many of the Company's products are
categorized under essential items, the plant operations were resumed after a few days of lockdown at minimum
capacity due to manpower and demand constraints. The Company continued with plant operations with minimum
of manpower, exercising precautions of social distancing in compliance with Central and State Government
Authorities' guidelines. The Company had adopted "Work from Home Policy" for its employees. Effective from
1st May, 2020, all plants at Vadodara Unit and Sikka Unit have started operating at full capacity.
All these factors have also adversely affected the progress of ongoing projects under execution which may
result into delay in completion of these projects. However, all efforts are being made to minimize the delay in
completion of these projects. In assessing the recoverability of Company's assets such as investments, loans,
advances and other financial and non-financial assets, the Company has considered internal and external
information and has performed sensitivity analysis on the assumptions used basis the internal and external
information / indicators of future economic conditions and expects to recover the carrying amount of the assets.
The management has evaluated the various financial ratios, expected ageing and maturities of assets and
liabilities and the various internal and external information available. The management does not see any risks
to Company's ability to continue as a going concern and expects that the Company will be able to meet its
liabilities in the foreseeable future, as and when the same fall due. There has been no other material changes
and commitments, which affect the financial position of the Company which have occurred between the end of
the Financial Year 2019-20 and the date of this Report. There has been no change in the nature of business of
the Company.
5. Details of significant and material orders passed by the regulators or courts or tribunals impacting the
going concern status and Company’s operations in future:
There are no such orders except those which have been appropriately challenged before the judiciary and no
impact on going concern status and Company’s operation in future of such matters are expected or visualised
at the current stage at which they are.
6. Details in respect of adequacy of internal financial controls with reference to the Financial Statements:
Your Company has an internal Control System which commensurate with the size, scale and complexity of its
operations. The scope and authority of the Internal Audit function lies with the Audit Committee of Directors. The
Audit Committee monitors and evaluates the efficacy and adequacy of internal control systems, accounting
procedures and policies. Based on the report of Internal Auditors, significant audit observations and actions
taken on such observations are presented to the Audit Committee of the Board.

58TH ANNUAL REPORT 2019-20 19

 DIRECTORS' REPORT (Contd..)

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

During the year under review, Companies listed below are the Subsidiary Company or Associate Companies:
 Subsidiary Company - GSFC Agrotech Limited.
Gujarat Port and Logistics Company Limited*
 Associate Companies - Vadodara Enviro Channel Limited
Gujarat Green Revolution Company Limited
Gujarat Data Electronics Limited
Karnalyte Resources INC
 Subsidiary of Subsidiary - Gujarat Arogya Seva Private Limited.
*Gujarat Port and Logistics Company Limited was incorporated on 03/02/2020 as a Joint Venture Company by
Gujarat State Fertilizers & Chemicals Limited and Gujarat Maritime Board with proposed investment in the ration
of 60:40 respectively. A report of the performance and financial position of each of the subsidiaries, associates
and joint venture companies as per the Companies Act, 2013 is provided at Annexure - A to the Consolidated
Financial Statement and hence not repeated here for the sake of brevity. The Company does not have any
material subsidiary in terms of Company’s Act, 2013 read with SEBI (Listing Obligation & Disclosure Requirement)
Regulations.
8. Listing of Shares & Depositories:
The Equity Shares of your Company are listed on the BSE Limited (BSE) and National Stock Exchange of India
Ltd. (NSE). As approved by the shareholders, an application for voluntary delisting of Equity Shares from
Calcutta Stock Exchange Association Ltd., Kolkatta, was made, however, the approval for delisting is still
awaited. The listing fee for the FY 20-21 has been paid to both the Stock Exchanges.
Your Directors wish to state that the Equity Shares of your Company are compulsorily traded in dematerialized
form w.e.f. 26/06/2000. Presently, 97.94% of shares are held in electronic/ dematerialized form.
9. Report on Corporate Governance And Management Discussion And Analysis Report To Shareholders:
Your Company has complied with all the mandatory requirements of Corporate Governance norms as mandated
by SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
A separate report on Corporate Governance together with the Certificate of M/s. Samdani Kabra & Associates,
Company Secretaries, Vadodara forms part of this Annual Report. The Management Discussion & Analysis
report also forms part of this Annual Report.
10. Business Responsibility Reporting
Business Responsibility Report forms part of this Annual Report Annexure-E as required under Regulation
34(2) (f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
11. Fixed Deposits
During the year 2019-20, your Company has not accepted/ renewed any Fixed Deposit. Your Directors wish to
report that there are NIL Fixed Deposits aggregating ` NIL which have remained unclaimed by Depositors, as on
31 st March, 2020. Letters reminding them to seek repayment have been sent. Upto and including the date of this
report, Nil deposits have been repaid.
During the year, the Company has transferred a sum of ` 0.69 Lakhs being the unclaimed deposits and interest
amount thereon to the Investors’ Education and Protection Fund (IEPF) as required in terms of Section 125 of the
Companies Act, 2013. The Company has discontinued accepting new deposits since 15.11.2005, and renewing
the deposits since 31.03.2009.
12. Insurance:
All the properties and insurable interests of the Company, including the buildings, plant & machinery and stocks
have been adequately insured. Also, as required under the Public Liability Insurance Act, 1991, your Company
has taken the appropriate insurance cover.

20 58TH ANNUAL REPORT 2019-20

 DIRECTORS' REPORT (Contd..)

13. Expansion & Diversification

 Projects under Development:
Urea Plant Revamping Project:
To reduce the energy consumption of existing Urea plants and to improve the plant reliability of vintage
plant, your company is considering to carry out revamping of Urea-II Plant. The feasibility study for the
Project has been completed from Process Licensors and Company is in process of carrying out Detail
Project Report from reputed consultant. Also, company has invited offers from Process Licensors for supply
of Technology and Basic Engineering Package.
400 MTPD Sulphuric Acid Plant at Vadodara Unit :
To minimize Sulphuric Acid purchase from market and to meet the captive requirement, your company is
considering to set up 400 MTPD Sulphuric Acid Plant on LSTK basis at Vadodara Unit. The plant will also
export about 440 MTPD steam to the complex which will reduce load on NG fired boilers. Company is in
process of carrying out Detail Project Report from reputed consultant.
400 MTPD Ammonium Sulphate Plant at Vadodara Unit:
To capture growing market of Ammonium Sulphate, your company is considering to set up 400 MTPD
Ammonium Sulphate Plant at Vadodara Unit. Company is in process of carrying out Detail Project Report
from reputed consultant.
PA & APS Plants refurbishment:
To improve productivity, efficiency and reliability of the old PA and APS Plants established in the year 1967,
Your Company has taken up refurbishment of these plants.
15 MW Solar Power Project at Charanka:
To make use of green energy & meet Renewable Purchase Obligation (RPO) requirement, your company
is considering to install 15 MW ground mounted solar power plant at Charanka, Gujarat. Company is in
process of floating of RFP to reputed vendors.
Expansion of Sikka Jetty for better Utilization:
Considering the high cost, about ` 800 Crores for the Project which will add to PA/SA Project cost at Sikka,
complexity of the operation for which GSFC has no experience and addition of Operating cost, your company
is not moving ahead with the Project. As an alternative, your company has initiated discussions with M/s
Essar Port for unloading of imported rock phosphate for PA Project at Sikka which is a cheaper option.
Methyl Methacrylate (MMA) Plant at Dahej:
Considering uncertainty for sourcing of major raw material C4 Raffinate from OPaL, recent downtrend in
the chemical market, Global demand / supply outlook, Your Company is not moving ahead with the Project.
Caprolactam Plant at Vadodara:
Considering recent downtrend in the chemical market and international prices of Caprolactam your Company
has put the Project on hold.
NPK Pilot Plant at Sikka:
It is essential to produce various grades of NPK in competitive market. For developing various NPK grades
and optimization of process parameters for effective scale up, your Company is considering to install pilot
plant at its Sikka unit
14. Information regarding conservation of energy, technology absorption, foreign exchange earnings and
outgo and particulars of employees etc.
Information as required under Section 134 (3) (m) of Companies Act, 2013 read with the Companies (Accounts)
Rules, 2014 are enclosed in Annexure “E” forming part of this report.

58TH ANNUAL REPORT 2019-20 21

 DIRECTORS' REPORT (Contd..)

The details relating to Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 have been disclosed in point # 5 of
Corporate Governance Report.
15. Corporate Social Responsibility (CSR)
The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section
135 of the Companies Act, 2013. As a part of its initiatives under “Corporate Social Responsibility”, the Company
has undertaken projects in the areas of education, livelihood, health, water and sanitation. The Annual Report
on CSR activities is enclosed as Annexure A. CSR Policy adopted by the Company is placed on the Company’s
website at https://www.gsfclimited.com/social_commitment.asp?mnuid=1&fid=15
16. Directors
A) Changes in Directors and Key Managerial Personnel:
Shri Arvind Agarwal, IAS has been appointed as Chairman and Managing Director of the Company
w.e.f.07.12.2019 in place of Dr. J. N. Singh, IAS Chairman (till 01.12.2019) and Shri Sujit Gulati, IAS,
Managing Director of the Company (till 06.12.2019).
Shri Pankaj Joshi, IAS has been appointed w.e.f. 21.12.2019 as rotational director and nominee of Finance
Dept. to the Govt. of Gujarat in place of Shri Arvind Agarwal, IAS (who was the erstwhile nominee of Finance
Dept. to the Govt. of Gujarat till 06.12.2019) and Smt. Sunaina Tomar, IAS has been appointed w.e.f.
04.01.2020 as rotational director in place of Shri Pankaj Joshi, IAS, Director, who was the erstwhile nominee
of Energy and Petrochemicals Dept. to the Govt. of Gujarat on the Board of the Company.
Smt. Sunaina Tomar, IAS shall be liable to retire by rotation at the ensuing Annual General Meeting, being
eligible, has offered herself for re-appointment.
The appropriate resolution/s and brief resume of Directors under appointment/ re-appointment at 58 th
Annual General Meeting is annexed to the Notice convening the 58 th Annual General Meeting and it forms
the integral part of this Annual Report and your Directors recommend the same for your approval.
The Board of Directors via circular resolution dated 02-09-2020 appointed;
(1) Shri Tapan Ray, DIN 00728682 as an additional director in the category of Independent Director of the
Company with effective from 02-09-2020 and subject to approval of shareholders of the Company, the
term of appointment of Shri Tapan Ray as an Independent Director of the Company shall be 5 (five)
Years from the conclusion of 58th Annual General Meeting till the conclusion of 63rd Annual General
Meeting.
(2) Dr. Ravindra Dholakiya, DIN 00069396 as an additional director in the category of Independent
Director of the Company with effective from 02-09-2020 and subject to approval of shareholders of the
Company, the term of appointment of Shri Ravindra Dholakiya as an Independent Director of the
Company shall be 5 (five) Years from the conclusion of 58th Annual General Meeting till the conclusion
of 63rd Annual General Meeting.
(3) Smt. Gauri Kumar DIN 01585999 as an additional director in the category of Independent Director of
the Company with effective from 02-09-2020 and subject to approval of shareholders of the Company,
the term of appointment of Smt. Gauri Kumar as an Independent Director of the Company shall be 5
(five) Years from the conclusion of 58th Annual General Meeting till the conclusion of 63rd Annual
General Meeting.
(4) Dr. Sudhir Kumar Jain DIN 03646016 as an additional director in the category of Independent Director
of the Company with effective from 02-09-2020 and subject to approval of shareholders of the Company,
the term of appointment of Dr. Sudhir Kumar Jain as an Independent Director of the Company shall be
5 (five) Years from the conclusion of 58th Annual General Meeting till the conclusion of 63rd Annual
General Meeting.
The Board of Directors is of the opinion that Shri Tapan Ray, Shri Ravindra Dholakiya, Smt. Gauri Kumar
and Dr. Sudhir Kumar Jain are the persons of integrity with high level of ethical standards and they were

22 58TH ANNUAL REPORT 2019-20

 DIRECTORS' REPORT (Contd..)

holding senior positions in other organizations, all the directors possess requisite expertise and experience
for appointment as Independent Director of the Company.
All the independent directors have submitted declarations that they meet the criteria of Independence as
provided under section 149 (6) of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment
and Qualification of Directors) Rules, 2014, as amended, the names of all the Independent Directors of the
Company have been included in the data bank maintained by the Indian Institute of Corporate Affairs.
The brief resume of Directors with regard to appointment/ re-appointment at 58th Annual General Meeting
is annexed to the Notice convening the 58th Annual General Meeting, which forms the integral part of this
Annual Report.
B) Board Evaluation:
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation & Disclosure
Requirement) Regulations, 2015, the Board has carried out the annual performance evaluation of its own
performance, the Directors individually as well as the evaluation of its committees. The manner in which the
evaluation has been carried out is explained in the Corporate Governance Report which forms the part of
this Annual Report.
C) Appointment and Remuneration Policy:
The Board has on the recommendation of the Nomination and Remuneration Committee, framed a policy
for selection and appointment of Directors, senior management and their remuneration. The details of
Remuneration Policy and its weblink are contained in the Corporate Governance Report.
D) Meetings:
During the year, Six Meetings of the Board of Directors and Five meetings of the Audit Committee were
held. The composition of Board and Committees along with details of attendance is contained in Corporate
Governance Report.
17. Details of establishment of vigil mechanism for Directors and Employees:
The Company has a Vigil Mechanism Policy in place to deal with instances, if any, of the fraud, mismanagement,
misappropriations, if any and the same is placed on the Company’s website. The details of the policy as well as
its weblink are contained in the Corporate Governance Report.
18. Particulars of loans, guarantees or investments under section 186:
Particulars of loans given, investments made, guarantee given and securities provided along with the purpose
for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the
standalone financial statement.
19. Particulars of contracts or arrangements with related parties:
All related party transactions that were entered into during the financial year were on an arm’s length basis and
were in the ordinary course of business. There are no materially significant related party transactions made by
the Company with Promoters, Directors, Key Managerial Personnel and other Designated Persons which may
have a potential conflict with the interest of the Company at large.
All Related party transactions were placed before the Audit Committee and also the Board of Directors for
Approval. Prior omnibus approval of the Audit Committee is obtained and a statement giving details of
transactions, if any, shall be continued to be placed before the Audit Committee meeting as mandated. The
Company has developed a mechanism for identification of related party transactions and the Company is also
having the system of monitoring of such transactions.
The particulars of every contract or arrangements entered into by the Company with related parties referred to
in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under
third proviso thereto have been disclosed in Annexure D to this report.

58TH ANNUAL REPORT 2019-20 23

 DIRECTORS' REPORT (Contd..)

20. Managerial Remuneration:

Details as required pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are contained in Corporate Governance Report.
21. Risk management policy:
The details of such Committee and its terms of reference are set out in the Corporate Governance Report
forming part of the Board’s Report.
22. Directors’ Responsibility Statement:
Pursuant to Section 134 (3) (c) of the Companies Act, 2013, your Directors confirm that:
a. In the preparation of the annual accounts, the applicable accounting standards had been followed along
with proper explanation relating to material departures;
b. The Directors had selected such accounting policies and applied them consistently and made judgments
and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the profit and loss of the Company for that period;
c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities;
d. The Directors had prepared the annual accounts on a going concern basis;
e. The Directors, in the case of a listed Company, had laid down internal financial controls to be followed by
the Company and that such internal financial controls are adequate and were operating effectively; and
f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws
and that such systems were adequate and operating effectively.
23. Auditors:
(a) Statutory Auditors
on recommendation of the Audit Committee, the Board of Directors has recommended for the appointment
of M/s. T. R Chadha & Co. LLP, Ahmedabad, Chartered Accountants (Firm Registration No.006711N/
N500028) as the Statutory Auditors for the second term of three consecutive years i.e. to hold the office from
the conclusion of 57th Annual General Meeting till the conclusion of 60 th Annual General Meeting of the
Company to be held in the year 2022.
The Companies Amendment Act, 2017 read with notification S O 1833(E) dated 7 th May, 2018 has deleted
the provision requiring annual ratification of the appointment of Auditors. Therefore a resolution relating to
the ratification of appointment of Auditors (M/s. T R Chadha & Co., LLP, Ahmedabad, the Statutory Auditors)
of the Company, who shall continue to hold office from the conclusion of 58th Annual General Meeting of the
Company till the conclusion of 59th Annual General Meeting of the Company, has not been included in the
notice convening 58th Annual General Meeting.
(b) Cost Auditors:
In terms of the Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit)
Rules, 2014, the Company is required to maintain cost accounting records and get them audited every
year.
The Board of Directors of your Company, on the recommendations made by the Audit Committee has
approved appointment of M/s Diwanji & Company, Cost Accountants, Vadodara (Firm Registration Number
000339) as the Cost Auditors of your Company to conduct the audit of cost records for the Financial Year
2020-21. The remuneration proposed to be paid to the Cost Auditor is placed for your ratification at the
ensuing 58th Annual General Meeting. The Cost Auditors for the F.Y. 2019-20 was filed within stipulated
time.

24 58TH ANNUAL REPORT 2019-20

 DIRECTORS' REPORT (Contd..)

(c) Internal Auditors:

Your Company has appointed M/s Talati & Talati, Chartered Accountants, Vadodara, as Internal Auditors of
Baroda & Sikka Unit for Financial Year i.e. 2020-21.
(d) Secretarial Auditors & Secretarial Audit Report:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Niraj Trivedi,
Practicing Company Secretary to undertake the secretarial audit of the Company. The Report of the Secretarial
Auditor is enclosed as Annexure B.
24. Auditors’ Report
There are no comments/ observations, reservations or adverse remarks in the Auditors Report and Secretarial
Audit Report and hence no clarifications need to be given on their clean report.
25. Extract of the Annual Return:
Link of annual report as per the Companies Amendment Act, 2017 is Annexure-C as below;
www.gsfclimited.com/statu_comp.asp?mnuid=12
26. Human Resources:
Your Directors are happy to acknowledge that the well positioned human resource of the Company have been
key drivers in implementing ideas, polices, cultural and behavioral aspects of the organization and ultimately
with their outstanding performance has helped the Company to realize its objectives. Your Directors are happy
to place on record their appreciation for highly potential, consistent and ethical employees for their remarkable
contribution to the Company.
Industrial Relations have remained cordial during the period under report.
27. Acknowledgements:
Your Directors place on record their appreciation for the overwhelming co-operation and assistance received
from the Government of Gujarat, Government of India, Bank of Baroda and other Banks and agencies. Your
Directors also wish to express their gratitude to the investors for their continued support and faith reposed in the
Company.

For and on behalf of the Board

Sd/-
Place : Fertilizernagar Arvind Agarwal, IAS
Date : 02nd September, 2020 Chairman & Managing Director

58TH ANNUAL REPORT 2019-20 25

 ANNEXURE "A" TO DIRECTORS' REPORT

REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES (FY 2019-20)

1. A brief outline of the Company’s CSR policy, overview of projects or programs proposed to be undertaken
and a reference to the web-link to the CSR policy and projects or programs
Ever since its inception in 1962, Gujarat State Fertilizers and Chemicals Ltd (GSFC) is serving the community towards
enriching lives of all its stake holders. Even before the concept of Corporate Social Responsibility (CSR) got clad into legal
frame-work through Companies Act 2013, there existed a Village Development Cell which served the community with great
commitment. The present CSR Policy is amended and documented with a candid objective of formalizing the Company’s CSR
activities within the prescribed legal frame work of the Companies Act, 2013(Section 135 read with Schedule VII) and the
CSR Rules, 2014. This policy shall apply to all CSR activities taken up at the various Plants/Business locations, to include
Liaison Offices, Marketing Offices and Depots of GSFC.
The GSFC’s CSR Policy clearly states that “GSFC is committed to integrate its business values, ethics and professional skills
to meet the expectations of all our stakeholders by developing, encouraging and supporting various social and economic
initiatives, without any duplication of government policies, through our industrial expertise for Sustainable Development.”
Web link: www.gsfclimited.com
2. The present Composition of the CSR Committee:
Sr. Name Category
1 Shri Arvind Agrawal Chairman
2 Shri D C Anjaria Member
3 Smt. Geeta Goradia Member
4 Smt Sunaina Tomar Member
5 Shri Pankaj Joshi Member
3. Average net profit of the company for last three financial years : ` 495 Crores
4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above) : ` 9.90 (i.e. 2% of ` 495 Crores).
5. Details of CSR spend for the financial year :
(a) Total amount to be spent for the financial year: ` 9.90 Crores.
(b) Amount unspent, if any: Not Applicable
(c ) Manner in which the amount spent during the financial year is detailed below: (Amount in `)
Sr. CSR project or Sector in which the Amount outlay Amount spent on Cumulative
No. activity identified project is covered (budget) project or the projects or expenditure up to
programs wise programs: 1.Direct the reporting
expenditure on period (Since FY
projects 2014-15)
2. Overhead
1 Education Education 7,05,04,100 7,05,04,100 44,85,53,192
2 Drinking Water Safe Drinking Water 24,15,200 24,15,200 5,90,34,808
Contribution and Education, Health, Women
3 1,92,79,427 1,92,79,427 8,62,26,498
Donations Empowerment
4 Other Local Activities Rural Development Projects 68,01,273 68,01,273 1,22,50,560
Total 9,90,00,000 9,90,00,000 60,60,65,058
Note:
1. Sr. No. 1 GSFC University, Schools run by GSFC at three units and work for government primary school is merged
together as education.
2. This table shows expenditure incurred at all four units of GSFC consolidated.
6. In case the company has failed to spend the two percent of the average net profit of the last three financial
years or any part thereof, the company shall provide the reasons for not spending the amount in its Board
Report: Not Applicable.
7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR policy is in
compliance with CSR objectives and Policy of the Company:
The implementation and monitoring of CSR policy is in compliance with the CSR objective and policy of the company.
Person specified under clause(d) of Sd/-
sub-section(1) of section 380 of the Act) Chairman CSR Committee
(wherever applicable)

26 58TH ANNUAL REPORT 2019-20

 ANNEXURE "B" TO DIRECTORS' REPORT

FORM NO. MR-3

SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED ON 31ST MARCH, 2020
[Pursuant to section 204(1) of the Companies Act, 2013 and Rule 9 of the
Companies (Appointment and Remuneration Personnel) Rules, 2014]
To,
The Members
GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED
P.O. Fertilizernagar,
Vadodara – 391750.
We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate
practices by Gujarat State Fertilizers & Chemicals Limited (hereinafter called “the Company”). Secretarial Audit was conducted in
a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion
thereon.
We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate
practices by Gujarat State Fertilizers & Chemicals Limited (“the Company”). Secretarial Audit was conducted in a manner that
provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.
Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the
Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of
secretarial audit and considering the relaxations granted by the Ministry of Corporate Affairs (MCA) and Securities and Exchange Board
of India (SEBI) warranted due to the spread of the COVID- 19 pandemic, We hereby report that in our opinion, the Company has, during
the audit period covering the financial year ended on 31st March, 2020 complied with the statutory provisions listed hereunder and also
that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the
reporting made hereinafter:
We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the
financial year ended on 31st March, 2020 according to the provisions of:
(i) The Companies Act, 2013 (the Act) and the rules made thereunder (Including any statutory modification(s) or re-enactments(s)
thereof, for the time being in force);
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;
(Including any statutory modification(s) or re-enactments(s) thereof, for the time being in force);
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; (Including any statutory modification(s) or re-
enactments(s) thereof, for the time being in force);
(iv) Foreign Exchange Management Act, 1999 (FEMA) and the rules and regulations made there under to the extent of Foreign Direct
Investment (FDI), Overseas Direct Investment (ODI) and External Commercial Borrowings (ECB); (Including any statutory modification(s)
or re-enactments(s) thereof, for the time being in force):- Not applicable during the audit period
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’)
(including any statutory modification(s) or re-enactments(s) thereof, for the time being in force):-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;- Not
applicable to the Company during the Audit Period ;
(d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; - Not applicable to the
Company during the Audit Period
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;
(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993
regarding the Companies Act and dealing with client;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; - Not applicable to the
Company during the Audit Period and
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; - Not applicable to the Company
during the Audit Period
(vi) Other applicable laws: Based on the information provided and the representation made by the Company and its Officers and also
on the review of the compliance reports taken on record by the Board of Director of the Company, in our opinion, adequate systems
and processes exist in the Company to monitor and ensure compliances under other applicable Acts, Laws and Regulations as
applicable to the Company as given below:
i. The Apprentices Act, 1961
ii. The Contract Labour (R & A) Act, 1970
iii. The Child Labour (P & R) Act, 1986
iv. The Industrial Employment (Standing Orders) Act, 1946
v. The Industrial Disputes Act, 1947
vi. The Minimum Wages Act, 1948

58TH ANNUAL REPORT 2019-20 27

 ANNEX URE "B" TO DIRECTORS' REPORT (Contd.)

vii. The Payment of Gratuity Act, 1972

viii. The Employees Provident Fund and Miscellaneous Provisions Act, 1952;
ix. The Equal Remuneration Act, 1976
x. The Employees State Insurance Act, 1948
xi. The Payment of Bonus Act, 1965
xii. The Payment of Wages Act, 1936
xiii. The Factories Act, 1948
xiv. The Employment Exchange (Compulsory Notification of Vacancies) Act, 1959
xv. The Employees Compensation Act, 1923
xvi. The Maternity Benefit Act, 1961
xvii. The Sexual Harassment of Women at Workplace (PD & R) Act, 2013
xviii. The Collection of Statistics Act, 2008
xix. Gujarat Physically Handicapped Persons (Employment in Factories) Act 1982.
xx. The Water Cess Act, 1972
xxi. The Dangerous Machines (Regulation) Act, 1936
xxii. The Environment Protection Act, 1986
xxiii. The Personal Injuries (Compensation Insurance) Act, 1963
xxiv. The Professional Tax Act, 1976
xxv. The Public Liability Insurance Act, 1991
xxvi. The Air (Prevention & Control of Pollution) Act, 1981
xxvii. The Water (Prevention & Control of Pollution) Act, 1974
xxviii. The Hazardous Waste Act, 1989
xxix. The Trade Union Act, 1926
xxx. The Weekly Holidays Act, 1942
xxxi. The Building and Other Construction Workers Act, 1996
We have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India;
(ii) The Listing Agreements entered into by the Company with BSE Limited (BSE); National Stock Exchange of India Ltd. (NSE)
read with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;
(iii) Framework for listing of Commercial Paper as per SEBI circular SEBI/HO/DDHS/CIR/P/115 dated 22nd October 2019.
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards,
etc. mentioned above.
We further report that -
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and
Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were
carried out in compliance with the provision of the Act.
Adequate notice is given to all the directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least
seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before
the meeting and for meaningful participation at the meeting.
Decisions at the meetings of the Board of Directors of the Company were carried through on the basis of unanimously and/or requisite
majority. There were no dissenting views by any member of the Board of Directors during the period under review.
We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the
Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
We further report that during the audit period, following major event have happened which is deemed to have major bearing on the
company’s affairs in pursuance of above referred laws, rules, regulations, guidelines etc.
1. During the year under review, Company issued and allotted 21 Commercial paper (CP) aggregating to `3100 Crore and same has
been listed on the National Stock Exchange of India Limited (NSE).
2. During the year under review, Company has incorporated its subsidiary company namely Gujarat Port and Logistics Company
Limited in the state of Gujarat.
Place : Vadodara
Date : 18th July, 2020 Signature : Sd/-
Name of PCS : NIRAJ TRIVEDI
C. P. No. : 3123
PR. : 499/2016
UDIN : F003844B000472081
This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report.

28 58TH ANNUAL REPORT 2019-20

 ANNEX URE "B" TO DIRECTORS' REPORT (Contd.)

‘ANNEXURE A’ TO SECRETARIAL AUDIT REPORT

To,
The Members
GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED
P.O. Fertilizernagar,
Vadodara - 391750
Our report of even date is to be read along with this letter.
1. Maintenance of secretarial records is the responsibility of the management of the company. Our responsibility is to express an
opinion on these secretarial records based on our audit.
2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness
of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in
secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the company.
4. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and
happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of
management. Our examination was limited to the verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with
which the management has conducted the affairs of the company.

Place : Vadodara
Date : 18th July, 2020 Signature : Sd/-
Name of PCS : NIRAJ TRIVEDI
C. P. No. : 3123
PR. : 499/2016
UDIN : F003844B000472081

58TH ANNUAL REPORT 2019-20 29

 ANNEXURE "C" TO DIRECTORS' REPORT

Form No. MGT-9

EXTRACT OF ANNUAL RETURN as on the Financial Year ended on 31.03.2020
[Pursuant to section 92(3) of the Companies Act, 2013 and
rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i CIN:- L99999GJ1962PLC001121
ii Registration Date: 15.02.1962
iii Name of the Company: GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED
iv Category / Sub-Category of the Company: Public Limited Company
v Address of the Registered office and contact details: P O Fertilizernager – 391 750, Dist: Vadodara,
Tel. 0265 2242451, Fax. 0265 2240966
website: www.gsfclimited.com
vi Whether listed company: Yes
Details of the Stock Exchanges where shares are listed Stock Exchange Name Name Code
BSE Limited (BSE) 500690
The National Stock Exchange of India Limited (NSE) GSFC
vii Name, Address and Contact details of Registrar and Transfer Agent: Link Intime India Pvt. Ltd.
B-102 & 103, Shangrila Complex, First Floor, Opp. HDFC Bank,
Near Radhakrishna Char Rasta, Akota. Vadodara -390 020
Phone : (0265) 2356573/2366794 Fax : (0265) 2356791
Email : [email protected]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the company shall be stated:-
Sr. No. Name and Description of main products/ services NIC code of Product % of total turnover of the company
1 Fertilizers 2012 71.07%
2 Chemicals 2011 28.93%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES -

Sr. Name and Address of CIN/GLN Holding / % of Applicable
No. the Company Subsidiary / Shares Section
Associate held
1 GSFC Agrotech Limited U36109GJ2012PLC069694 Subsidiary 100.00% 2 (87)
Administration Building, 1st Floor, Fertilizernagar,
P. O. Fertilizernagar – 391750
2 Gujarat Green Revolution Company Limited U63020GJ1998PLC035039 Associate 46.87% 2 (6)
Fertilizernagar Township, P. O. Fertilizernagar – 391750
3 Vadodara Enviro Channel Limited U51395GJ1999PLC036886 Associate 28.57% 2 (6)
Plot no. 304/1, 317 & 318, At and Post Dhanora, Vadodara – 391 346
4 Gujarat Data Electronics Limited# U39308GJ1985PLC008058 Associate 23.00% 2 (6)
A-78-6-7 GIDC Electronics Estate, Gandhinagar-15
5 Gujarat Arogya Seva Private Limited U74999GJ2017PTC096542 Subsidiary 100.00% 2 (87)
1st Floor, Administrative Building of Subsidiary
P. O. Fertilizernagar Vadodara Vadodara GJ 391750 IN
6 Karnalyte Resources INC - Associate 38.73% 2 (6)
104 - 26 Crystalridge Drive, Okotoks, Alberta
# The Company is Dormant and 100% provision for diminution in value of investment has been accounted in the books of GSFC Limited.

30 58TH ANNUAL REPORT 2019-20

 ANNEX URE "C" TO DIRECTORS' REPORT (Contd.)

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
i) Category-wise Share Holding
Category of Shareholders Shareholding at the beginning of the year 2019 Shareholding at the end of the year 2020 % change
during
Demat Physical total % of total Demat Physical Total % of total
shares shares the year
(A) Shareholding of Promoter and
Promoter Group
[1] Indian
(a) Individuals/Hindu Undivided Family 0 0 0 0.0000 0 0 0 0.0000 0.0000
(b) Central Government / State
Government(s) 0 0 0 0.0000 0 0 0 0.0000 0.0000
(c) Financial Institutions / Banks 0 0 0 0.0000 0 0 0 0.0000 0.0000
(d) Any Other (Specify)
Bodies Corporate 150799905 0 150799905 37.8440 150799905 0 150799905 37.8440 0.0000
Sub Total (A)(1) 150799905 0 150799905 37.8440 150799905 0 150799905 37.8440 0.0000
[2] Foreign
(a) Individuals (Non-Resident
Individuals / Foreign Individuals) 0 0 0 0.0000 0 0 0 0.0000 0.0000
(b) Government 0 0 0 0.0000 0 0 0 0.0000 0.0000
(c) Institutions 0 0 0 0.0000 0 0 0 0.0000 0.0000
(d) Foreign Portfolio Investor 0 0 0 0.0000 0 0 0 0.0000 0.0000
(e) Any Other (Specify)
Sub Total (A)(2) 0 0 0 0.0000 0 0 0 0.0000 0.0000
Total Shareholding of Promoter &
Promoter Group(A)=(A)(1)+(A)(2) 150799905 0 150799905 37.8440 150799905 0 150799905 37.8440 0.0000
(B) Public Shareholding
[1] Institutions
(a) Mutual Funds / UTI 19067928 3050 19070978 4.7860 8375198 2550 8377748 2.1024 -2.6836
(b) Venture Capital Funds 0 0 0 0.0000 0 0 0 0.0000 0.0000
(c) Alternate Investment Funds 0 0 0 0.0000 0 0 0 0.0000 0.0000
(d) Foreign Venture Capital Investors 0 0 0 0.0000 0 0 0 0.0000 0.0000
(e) Foreign Portfolio Investor 75098737 0 75098737 18.8464 78260071 0 78260071 19.6398 0.7934
(f) Financial Institutions / Banks 39706487 141870 39848357 10.0002 40900769 141045 41041814 10.2997 0.2995
(g) Insurance Companies 0 0 0 0.0000 2126387 0 2126387 0.5336 0.5336
(h) Provident Funds/ Pension Funds 0 0 0 0.0000 0 0 0 0.0000 0.0000
(i) Any Other (Specify)
Foreign Bank 150 0 150 0.0000 150 0 150 0.0000 0.0000
Sub Total (B)(1) 133873302 144920 134018222 33.6326 129662575 143595 129806170 32.5755 -1.0571
[2] Central Government/State
Government(s)/President of India
Sub Total (B)(2) 0 0 0 0.0000 0 0 0 0.0000 0.0000
[3] Non-Institutions
(a) Individuals
(i) Individual shareholders holding
nominal share capital upto ` 1 lakh 50842281 6379438 57221719 14.3601 52649238 5551708 58200946 14.6058 0.2457
(ii) Individual shareholders holding
nominal share capital in excess
of ` 1 lakh 11819197 0 11819197 2.9661 15364455 0 15364455 3.8558 0.8897
(b) NBFCs registered with RBI 79035 0 79035 0.0198 58030 0 58030 0.0146 -0.0052
Trust Employee 25325 0 25325 0.0064 44225 0 44225 0.0111 0.0047
(d) Overseas Depositories(holding DRs)
(balancing figure) 0 0 0 0.0000 0 0 0 0.0000 0.0000
(e) Any Other (Specify)
IEPF 1658610 0 1658610 0.4162 1819628 0 1819628 0.4566 0.0404
Trusts 34435 0 34435 0.0086 33975 0 33975 0.0085 -0.0001
Foreign Nationals 0 0 0 0.0000 12334 0 12334 0.0031 0.0031
Coperatives Socities 13395 2357655 2371050 0.5950 13395 2335235 2348630 0.5894 -0.0056
Hindu Undivided Family 3479929 1770 3481699 0.8738 3646580 1770 3648350 0.9156 0.0418
Non Resident Indians (Non Repat) 923841 0 923841 0.2318 826718 0 826718 0.2075 -0.0243
Other Directors 1450 0 1450 0.0004 1450 0 1450 0.0004 0.0000
Non Resident Indians (Repat) 1283166 146780 1429946 0.3589 1746119 145265 1891384 0.4747 0.1158
Foreign Portfolio Investor (Individual) 5100 0 5100 0.0013 20900 0 20900 0.0052 0.0039
Clearing Member 965100 0 965100 0.2422 486311 0 486311 0.1220 -0.1202
Bodies Corporate 33591071 51825 33642896 8.4429 33068199 45920 33114119 8.3102 -0.1327
Sub Total (B)(3) 104721935 8937468 113659403 28.5234 109791557 8079898 117871455 29.5805 1.0571
Total Public Shareholding
(B)=(B)(1)+(B)(2)+(B)(3) 238595237 9082388 247677625 62.1560 239454132 8223493 247677625 62.1560 0.0000
Total (A)+(B) 389395142 9082388 398477530 100.0000 390254037 8223493 398477530 100.0000 0.0000
(C) Non Promoter - Non Public
[1] Custodian/DR Holder 0 0 0 0.0000 0 0 0 0.0000 0.0000
[2] Employee Benefit Trust (under
SEBI (Share based Employee
Benefit) Regulations, 2014) 0 0 0 0.0000 0 0 0 0.0000 0.0000
Total (A)+(B)+(C) 389395142 9082388 398477530 100.0000 390254037 8223493 398477530 100.0000

58TH ANNUAL REPORT 2019-20 31

 ANNEX URE "C" TO DIRECTORS' REPORT (Contd.)

(ii) Shareholding of Promoters

Sr Name & Type of Transaction Shareholding at the beginning Transactions during the year Cumulative Shareholding at the
No. of the year – 2019 end of the year - 2020
Name & Type of Tran NO.OF % OF TOTAL DATE OF NO. OF NO OF % OF TOTAL
SHARES SHARES OF TRANSACTION SHARES SHARES HELD SHARES OF
HELD THE THE
COMPANY COMPANY
GUJARAT STATE 150799905 37.8440 150799905 37.8440
1 INVESTMENTS LIMITED
AT THE END OF THE YEAR 150799905 37.8440
(iii) Change in promoters’ shareholding (please specify, if there is no change)

Sr Shareholder's Name Shareholding at the beginning Shareholding at the end

No of the year – 2019 of the year - 2020
NO.OF % of total %of Shares NO.OF % of total %of Shares
SHARES Shares of Pledged SHARES Shares of the Pledged/
HELD the /encumbered to HELD company encumbered to
company total shares total shares
1 GUJARAT STATE 150799905 37.8440 0.0000 150799905 37.8440 0.0000
INVESTMENTS LIMITED
Total 150799905 37.8440 0.0000 150799905 37.8440 0.0000

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

Sr Name & Type of Transaction Shareholding at the beginning Transactions during the year Cumulative Shareholding at
No. of the year – 2019 the end of the year - 2020
NO. OF % OF TOTAL DATE OF NO. OF NO OF % OF TOTAL
SHARES SHARES OF TRANSACTION SHARES SHARES SHARES OF
HELD THE HELD THE
COMPANY COMPANY
1 LIFE INSURANCE CORPORATION
OF INDIA 31797658 7.9798 31797658 7.9798
AT THE END OF THE YEAR 31797658 7.9798
2 FIDELITY PURITAN TRUST-
FIDELITY LOW-PRICED STOCK
FUND 28500000 7.1522 28500000 7.1522
AT THE END OF THE YEAR 28500000 7.1522
3 ADITYA BIRLA SUN LIFE
TRUSTEE PRIVATE LIMITED A/C
ADITYA BIRLA SUN LIFE PURE
VALUE FUND 8468806 2.1253 8468806 2.1253
Transfer 05 Apr 2019 127500 8596306 2.1573
Transfer 12 Apr 2019 197000 8793306 2.2067
Transfer 19 Apr 2019 200000 8993306 2.2569
Transfer 26 Apr 2019 (111500) 8881806 2.2289
Transfer 31 May 2019 126900 9008706 2.2608
Transfer 21 Jun 2019 (23500) 8985206 2.2549
Transfer 29 Jun 2019 (991700) 7993506 2.0060
Transfer 09 Aug 2019 28400 8021906 2.0131
Transfer 13 Sep 2019 100000 8121906 2.0382
Transfer 20 Sep 2019 (100000) 8021906 2.0131
Transfer 27 Sep 2019 80000 8101906 2.0332
Transfer 06 Dec 2019 96223 8198129 2.0574
Transfer 17 Jan 2020 276000 8474129 2.1266
Transfer 24 Jan 2020 62867 8536996 2.1424
Transfer 07 Feb 2020 (15115) 8521881 2.1386
Transfer 14 Feb 2020 (15617) 8506264 2.1347

32 58TH ANNUAL REPORT 2019-20

 ANNEX URE "C" TO DIRECTORS' REPORT (Contd.)

Transfer 21 Feb 2020 (33131) 8473133 2.1264

Transfer 06 Mar 2020 (176107) 8297026 2.0822
AT THE END OF THE YEAR 8297026 2.0822
4 GUJARAT ALKALIES AND
CHEMICALS LIMITED 7500000 1.8822 7500000 1.8822
AT THE END OF THE YEAR 7500000 1.8822
5 GUJARAT NARMADA VALLEY
FERTILIZERS AND CHEMICALS
LIMITED 7500000 1.8822 7500000 1.8822
AT THE END OF THE YEAR 7500000 1.8822
6 VANDERBILT UNIVERSITY -
ATYANT CAPITAL MANAGEMENT
LIMITED 4046331 1.0154 4046331 1.0154
Transfer 13 Sep 2019 200000 4246331 1.0656
Transfer 24 Jan 2020 100000 4346331 1.0907
Transfer 31 Jan 2020 530000 4876331 1.2237
Transfer 07 Feb 2020 770000 5646331 1.4170
Transfer 21 Feb 2020 500000 6146331 1.5425
Transfer 28 Feb 2020 47423 6193754 1.5544
AT THE END OF THE YEAR 6193754 1.5544
7 GOTHIC CORPORATION 6114648 1.5345 6114648 1.5345
Transfer 25 Oct 2019 42070 6156718 1.5451
AT THE END OF THE YEAR 6156718 1.5451
8 GOVERNMENT PENSION FUND
GLOBAL 6000001 1.5057 6000001 1.5057
Transfer 06 Sep 2019 100000 6100001 1.5308
Transfer 31 Jan 2020 (21727) 6078274 1.5254
Transfer 07 Feb 2020 (244000) 5834274 1.4641
Transfer 14 Feb 2020 (513000) 5321274 1.3354
Transfer 20 Mar 2020 (65973) 5255301 1.3188
Transfer 27 Mar 2020 (187892) 5067409 1.2717
Transfer 31 Mar 2020 (64593) 5002816 1.2555
AT THE END OF THE YEAR 5002816 1.2555
9 GUJARAT MINERAL
DEVELOPMENT CORPORATION
LTD 5000000 1.2548 5000000 1.2548
AT THE END OF THE YEAR 5000000 1.2548
10 CHINMAY G PARIKH 7758 0.0019 7758 0.0019
Transfer 27 Sep 2019 408832 416590 0.1045
Transfer 30 Sep 2019 400000 816590 0.2049
Transfer 06 Dec 2019 51206 867796 0.2178
Transfer 06 Mar 2020 507969 1375765 0.3453
Transfer 13 Mar 2020 40000 1415765 0.3553
Transfer 20 Mar 2020 2766024 4181789 1.0494
AT THE END OF THE YEAR 4181789 1.0494
11 ATYANT CAPITAL INDIA FUND I 4004405 1.0049 4004405 1.0049
AT THE END OF THE YEAR 4004405 1.0049

(v) Shareholding of Directors and Key Managerial Personnel:

None of the Key Managerial Personnel and/ or Directors are holding shares in their personal capacity except Shri D C Anjaria, holding 1450 Equity
Shares as detailed in Corporate Governance Report.

58TH ANNUAL REPORT 2019-20 33

 ANNEX URE "C" TO DIRECTORS' REPORT (Contd.)

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager: (` in Lakhs)

Particulars of Remuneration
Name Sujit Gulati Arvind Agarwal
SN.
Designation Managing Director Chairman and
Managing Director
1 Gross salary Total Amount (Rs/Lac) Total Amount (Rs/Lac)
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 27.09 12.95
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 - -
(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961 - -
2 Stock Option 0.00 0.00
3 Sweat Equity 0.00 0.00
Commission 0.00 0.00
4 -as % of profit 0.00 0.00
-others, specify 0.00 0.00
5 Others, please specify 0.00 0.00
Total (A) 27.09 12.95
Ceiling as per the Act not applicable

B. Remuneration to other directors: (Amount in ` )

SN. Particulars of Name of Directors Total
Remuneration Amount (Rs.)
Independent Directors Shri D C Anjaria Prof. Vasant Shri Ajay Shah Shri Vijai Kapoor Smt. Geeta Goradia
Gandhi
1Fee for attending board 2,10,000 2,40,000 40,000 90,000 1,70,000 7,50,000
committee meetings
Commission -
Others, please specify -
Total (1) 2,10,000 2,40,000 40,000 90,000 1,70,000 7,50,000
Other Non-Executive Directors Dr. J N Singh Shri Pankaj Shri Arvind Smt. Sunaina
Joshi Agarwal Tomar
2 Fee for attending board 40,000 30,000 40,000 30,000 1,40,000
committee meetings
Commission -
Others, please specify -
Total (2) 40,000 30,000 40,000 30,000 1,40,000
Total (B)=(1+2) 2,50,000 2,70,000 80,000 1,20,000 1,70,000 8,90,000

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD (` in Lakhs)

SN. Particulars of Remuneration Name of Key Managerial Personnel Total Amount
Designation CFO CS (Rs/Lac)
1 Gross salary Rs.54.61 Lakhs Rs. 54.18 Lakhs 108.79
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 - - -
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 - - -
(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961 - - -
2 Stock Option - - -
3 Sweat Equity - - -
Commission - -
4 -as % of profit - - -
-others, specify - - -
5 Others, please specify - - -
Total Rs.54.61 Lakhs Rs. 54.18 Lakhs 108.79

VII. PENALTIES/ PUNISHMENT/ COMPOUNDING OF OFFENCES:

There were no penalties/ punishments/ compounding of offences for the Financial Year ending 31/03/2020.

34 58TH ANNUAL REPORT 2019-20

 ANNEXURE "D" TO DIRECTORS' REPORT

Particulars of contracts/ arrangements made with related parties

Form No. AOC-2 (Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of
the Companies (Accounts) Rules, 2014)
This Form pertains to disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in
sub-section (1) of section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto.
1. Details of contracts or arrangements or transactions not at arm's length basis. - There were no contracts or arrangements or
transactions not at arm's length basis.
2. Details of material contracts or arrangement or transactions at arm’s length basis; (` In Lakhs)
Related Party Nature of Nature/Type of Related Party Duration of the Salient Feature Value of the
Relationship Transaction Contract proposed
transaction
GSFC Agrotech Limited Subsidiary Company Purchase of goods & Other expenses Not applicable Not applicable 6,000
Sale of materials/Goods 60,000
Commission income
570
Rent receipt
Reimbursement of expense 1,500
Expenses recovered -
Equity contribution 2,000
ICD Received 6,000
ICD Repaid 6,000
Interest expense on ICD 480
Dividend Received -
Outstanding balance-Payable -
Outstanding balance-Receivable -
Vadodara Enviro Channel Limited Associate Company Usage of effluent channel Not applicable Not applicable 550
Outstanding balance-Payable -
Gujarat Green Revolution Company Associate Company Expenses recovered Not applicable Not applicable 400
ICD Received 30,000
Interest expense on ICD 436
Dividend Received -
Outstanding balance-Receivable -
Outstanding balance-Loan -
Karnalyte Resources Inc. Associate Company Expenses recovered Not applicable Not applicable 250
Provision for investment -
Tunisian Indian Fertilizers ( TIFERT) Other related party Purchase of Material 65,000
Expenses recovered 100
Provision for investment -
Advance to vendor -
Outstanding balance - Receivable -
GSFC Education Society Related Party Donation Granted Not applicable Not applicable 1,000
Chairman and Managing Director KMP Not applicable Not applicable 197
Remuneration
Sh. V.D. Nanavaty KMP
Sh. V. V. Vachhrajani KMP
Gujarat Alkalies and Chemicals Ltd Other Related Party Purchase of Materials Not applicable Not applicable 3,000
Sale of Product 1,500
Expenses recovered 53
Outstanding balance-payable -
Dividend Received -
Outstanding balance-receivable -
Gujarat Narmada Valley Fertilizers Other Related Party Purchase of Materials 1,000
Company Limited Fees for Services -
Sale of Material 10,000
Dividend Received -
Outstanding balance-Payable -
Outstanding balance-Receivable -

58TH ANNUAL REPORT 2019-20 35

 ANNEX URE "D" TO DIRECTORS' REPORT (Contd.)

Gujarat Industries Power Company Ltd Other Related Party Purchase of power Not applicable Not applicable 30,000
Sale of power 1,200
Dividend Received -
Outstanding balance-Receivable -
Outstanding balance-Payable -
Gujarat State Petroleum Corporation Ltd Other Related Party Purchase of Gas Not applicable Not applicable 35,100
Outstanding balance-payable -
Indian Potash Ltd Other Related Party Purchase of Material Not applicable Not applicable 70,000
Dividend Received -
Outstanding balance-payable -
The Fertilizer Association of India Other Related Party Fees for Services 30

For and on behalf of the Board

Sd/-
Place: Fertilizernagar Shri Arvind Agarwal
Date : 18th June, 2020 Chairman & Managing Director

36 58TH ANNUAL REPORT 2019-20

 ANNEX URE "E" TO DIRECTORS' REPORT

Conservation of energy, technology absorption and foreign exchange earnings and outgo Section 134 (3) (m) of the
Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014.
A CONSERVATION OF ENERGY rejecting heat to CW, reduced steam consumption in
Measures taken at Fertilizernagar, Vadodara Unit: Dis tillation column and s ubsequently reduc ed NG
consumption at Steam generation boilers. It resulted into
1) Use of Variable Frequency Drive (VFD) at BFW pumps annual NG saving of 1.92 Lakhs SM3 (` 61.44 Lakhs).
of CVL boiler.
8) Enhancement of flash steam generation at A-III plant.
VFD installed as BFW flow control valve was remaining in
throttled condition as two numbers of BFW pumps were 4K Flash steam generated (in place of present practice of
kept in line at low load operation of CVL boiler. It resulted generating 0.5K Flash steam) from blowdown stream of
into annual power saving of 7 Lakhs unit (` 50.75 Lakhs). 37K at A-III plant. Generated 4K steam was utilized in
reboiler. It reduced requirement of generating 4K steam
2) Replacement of two pumps at ETP.
by throttling 37K steam, within plant. Equivalent amount of
Two new energy efficient pumps installed at ETP in place 37K could be exported from A-III plant. Export of 37K
of energy inefficient pumps. It resulted into annual power steam reduced NG consumption at Steam generation
saving of 1.38 Lakhs unit (` 10.01 Lakhs). boilers. It has resulted into annual NG saving of 0.45 Lakhs
3) Reduction in NG fuel consumption in F-101 & F-202, SM3 (` 14.40 Lakhs).
A-III Plant. 9) Replacement of existing ejectors installed on
Preheating of HPNG feed to HPNG Heater furnace (F- Concentrator at PA Plant.
101) carried out by recovering heat from process stream,
New energy efficient ejectors were installed to achieve
which was being cooled by Cooling water, to reduce heat
s team s aving. It reduc ed s team consumption and
duty of the furnace. Preheating of Process air to Process
s ubsequently reduced NG c onsumption at Steam
Air heater Furnace (F-202) carried out by LPS (3K steam),
generation boilers. It resulted into annual NG saving of
which is in exc es s and being vented, to reduc e
consumption of NG Fuel in Process Air heater Furnace 1.26 Lakhs SM3 (` 40.32 Lakhs).
(F-202).It resulted into total annual NG saving of 4.40 10) Replacement of Cooling Tower fan blades with high
Lakhs SM3 (` 140.80 Lakhs). energy efficient Aerodynamic Hollow e-Glass epoxy
4) Installation of an additional Dehydrogenation Feed fan blades, at Ammonia-IV, Capro-I, II SA IV, & Urea
preheater for 37K steam saving, at Anone Plant, plants.
Capro-I. Replacement of 9 Nos. of Cooling tower fans having hollow
Process Feed was preheated from ~50°C to ~99°C in FRP fan blades carried out with high energy efficient
existing Feed preheater, resulting into 37K steam saving. Aerodynamic Hollow e- Glass epoxy fan blades. It resulted
Further pre-heating of stream from ~99°C to ~130°C, into annual power saving of 6.06 Lakhs unit (` 43.94 Lakhs).
carried out using excess LPS (3K steam), which is in 11) Power conservation in Raw water booster pump,
excess and being vented. It resulted into equivalent
Nylon-6-II Plant.
reduction of steam generation load on Steam generation
boilers. It resulted in annual NG saving of 0.32 Lakhs SM3 Raw water pump was running v ery near to shutoff
(` 10.24 Lakhs). condition due to less consumption level. A spare pump,
having low head and low capacity installed in place of high
5) Steam saving by replacing existing Ejector with
energy efficient Ejector, at Urea I Plant. capacity high head pump. It resulted into annual power
saving of 0.248 Lakhs unit (` 1.80 Lakhs).
Installation of New energy efficient ejectors to enhance
the energy efficiency resulted into steam saving. It reduced 12) Power Conservation in Chilled water pump (P-481A/
NG consumption at Steam generation boilers. It resulted B), HAS plant, Capro-II.
into annual NG saving of 2.85 Lakhs SM3 (` 91.20 Lakhs). Two nos. of Chilled water pumps were running to meet
6) Pre-Heating of Lactam-Benzene feed to T-423-3 for requirement of plant, operating at higher capacity. Impeller
MPS saving at Lactam-I plant, Caprolactam-I. size changed from 245 mm (rated) to 255 mm in one of
the pump. Motor rating was changed from 90 KW to 110
Lactam-Benzene (LC-BZ) stream was originally pre-
KW motor. It enabled stoppage of one pump and chilled
heated from ~38°C upto ~65°C using hot water (HW) from
water requirement of plant is met by running only one
other section. HW supply was stopped due to stoppage of
other section. LPS (3K steam), which is in excess and pump. It resulted into annual power saving of 3.76 Lakhs
being vented, utilized for pre-heating. It reduced heat load unit (` 27.26 Lakhs).
on Reboiler, consuming 14K steam. It resulted into annual 13) Power Conservation in Drinking water pump (P-1707),
NG saving of 6.33 Lakhs SM3 (` 202.56 Lakhs). Utility plant, Capro-II.
7) Preheating of KA oil feed to Distillation column (K150) Supply pressure of Drinking water pump was reduced to
for energy conservation in Anone-II Plant, Capro-II. 5 Kg/Cm2g in place of 7 Kg/Cm2 g by reducing impeller
Preheating of KA oil with process stream, which otherwise size from 238 mm to 210 mm. Drinking water requirement

58TH ANNUAL REPORT 2019-20 37

 ANN EXUR E "E" TO DIRECTORS' REPORT (Contd.)

could be fulfilled at lower supply pressure too. It resulted 5. Replacement of 83 Nos. 150 Watt HPSV Lamps by
into annual power saving of 0.57 Lakhs unit (` 4.10 Lakhs). 60 Watt LED Lamps in Various Plant area Lighting.
14) Power Conservation in Chilled water pump (P-1340A/ 6. Replacement of 56 Nos. 35 Watt CFL Lamps with 12
B), HAS plant, Capro-II. Watt LED Lamps in Various Plant area Lighting.
Load on Chilled water system increased due to operation 7. Replacement of 100 Nos. 100 Watt GLS Lamps
of plant at higher load. Hence, two nos. of VAHP were fitting By 09 Watt LED UJALA Lamp in Various Plant
kept in line. To supply Chilled water to both VAHPs, two area Lighting.
nos. of Chilled water pumps were operated. To save on
8. Replacement of 27 Nos. 75 Watt Conventional Ceiling
power, impeller of higher size i.e. 388 mm in place of 354
Fans by 50 Watt UJALA Ceiling fan in Various offices.
mm installed in one of the pump. Corresponding, motor
rating also changed from 45 KW to 75 KW. It enabled 9. Replacement of 36 Nos. 125 Watt HPMV fitting by
adequate flow by operating only one pump. Power 45 Watt LED Fitting in Various Plant area Lighting.
consumption by operating one pump at higher head is Thus by adopting Energy efficient motors & lighting system
less than operating two nos. of pumps. It resulted into annual power saving of 1.63 Lakhs units achieved. This
annual power saving of 0.98 Lakhs unit (` 7.09 Lakhs). resulted in to aggregate annual saving of ` 11.42 Lakhs at
15) Power Conservation in LC-AS Belt conveyor (H-781A/ a unit cost of `7.00.
B), LC-AS plant, Capro-II. Above mentioned measures resulted into aggregate an-
Installation of latest technology of geared motor and VFD nual saving at a rate of 1.63 Lakhs KWH Power (` 11.42
drive in place of worm and worm wheel Gear assembly Lakhs @` 7 / KWH).
with mechanically reduced variable pulley drive resulted Measures under consideration at Fertilizernagar, Vadodara
into annual power saving of 0.11 Lakhs unit (` 0.81 Lakhs). Unit:
16) Power Conservation in HAS supply pump (P-1035A/ 1) Generation of Flash steam at CVL Boiler.
B), HAS plant, Capro-II.
It is under consideration to generate Flash steam of 14K
Due to operation of plant at higher load, two nos. of HAS (in place of present practice of generating 0.5K Flash
supply pumps were operated. To save on power, impeller steam) from blowdown stream of 37K at CVL Boiler and to
of higher size i.e. 174 mm in place of 170 mm installed in utilize low pressure steam, which is in excess and being
one of the pump. Corresponding, motor rating also changed vented, in place of 0.5K steam. Generated 14K steam will
from 5.5 KW to 9.3 KW. It enabled adequate flow by reduce NG consumption at Steam generation boilers.
operating only one pump. It resulted into annual power Anticipated annual NG saving is 0.77 Lakhs SM3 (` 24.58
saving of 0.15 Lakhs unit (` 1.06 Lakhs). Lakhs).
Above mentioned measures resulted into aggregate an- 2) Use of Variable Frequency Drive (VFD) at FD fans of
nual saving at a rate of 20.37 Lakhs units Power (` 147.68 CVL boiler.
Lakhs) and 17.53 Lakhs SM3 NG (` 560.96 Lakhs).
Due to operation of two numbers of FD fans with throttled
Measures taken at Sikka Unit: suction dampers, during low load operation of CVL boiler,
1) In order to achieve energy saving, followings major steps it is proposed to install VFDs in both FD fans for power
were carried out during the F.Y. 2019-20. saving. Anticipated annual power saving is 10.51 Lakhs
unit (` 76.20 Lakhs).
By Energy Efficient Motors
3) Replacement of existing ejectors installed at PA, AS-
1. Replacement of 01 No. 30 KW conventional motor
I, AS-II & Caprolactam-II Plants.
by Energy efficient motor in PA Supply pump-C.
It is under consideration to use New energy efficient
2. Replacement of 01 No. 37 KW conventional motor
ejectors to enhance the efficiency of operation and thereby
by Energy effic ient motor in Ins trument Air
to achieve steam saving. It will reduce steam consumption
Compressor at SST.
and reduce NG consumption at Steam generation boilers.
By Energy Efficient Lighting Anticipated annual NG saving is 7.23 Lakhs SM3 (` 231.42
Lakhs).
1. Replacement of 40 Nos. 150 Watt HPSV Lamps by
100 Watt LED Lamps in Various Plant area Lighting. Measures under consideration at Sikka Unit:
2. Replacement of 20 Nos. 250 Watt MH Lamps by 85 1) Modification in the Distribution of Pressurized Air for Full
Watt LED in Various Plant area Lighting. Capacity utilization of new Energy Efficient Air Compressor
and Stopping of Old Air Compressors.
3. Replacement of 100 Nos. 125 Watt HPMV Flood
Light by 27 Watt LED fittings in Various Plant area 2) By Energy Efficient Motors
Lighting.
1. Replacement of 02 No. 30 KW conventional motor
4. Replacement of 60 Nos. 50 Watt Ordinary TL with by Energy efficient motor for PA Supply pump A & B
20 Watt LED Tube light in Various Offices. of Train-C.

38 58TH ANNUAL REPORT 2019-20

 ANN EXUR E "E" TO DIRECTORS' REPORT (Contd.)

2. Replacement of 02 No. 37 KW conventional motor 3. Replacement of 50 Nos. 125 Watt HPMV lamp by 27
by Energy effic ient motor for Instrument Air Watt LED Lamps in Various Plant area Lighting.
Compressor-SST & Ammonia Transfer pump-MK. 4. Replacement of 50 Nos. 70 Watt MH lamp by 27
3) Permanent Disconnection of Electricity power supply at Watt LED Lamps in Various Plant area Lighting.
Jogwad Pump house due to Non-Utilization of the same. 5. Replacement of 100 Nos. 50 Watt Ordinary TL
4) By Energy Efficient Lighting fittings with 20 watt LED Tube light in Various Plant
area Lighting.
1. Replacement of 50 Nos. 150 Watt MH Lamps by 70
6. Replacement of 60 Nos. 150 Watt HPSV Lamps with
Watt LED Flood Lights in Various Plant area Lighting.
60 Watt LED Fittings in Various Plant area Lighting.
2. Replacement of 50 Nos. 250 Watt MH Lamps by 85
7. Replacement of 200 Nos. 35 Watt CFL Lamps by 12
Watt LED Flood Lights in Various Plant area Lighting. W LED Lamps in Various Plant area Lighting.

TOTAL ENERGY CONSUMPTION AND ENERGY CONSUMPTION PER UNIT OF PRODUCTION

FORM-A C TECHNOLOGY ABSORPTION

Form for disclosure of particulars with respect to EFFORTS MADE IN TECHNOLOGY ABSORPTION
Conservation of Energy : 2019-20 As per enclosed FORM – B
(A) POWER AND FUEL CONSUMPTION
D FOREIGN EXCHANGE USED AND EARNED : 2019-20
PARTICULARS 2019-20 2018-19 Foreign Exchange Outgo :
1. Electricity     (i) C.I.F. VALUE OF IMPORTS ` Lakhs
(a) Raw Materials 12039.21
A. PURCHASE     (b) Stores & Spares 962.71
UNIT: MWH 285654 361759 (c ) Capital Goods and High
AMOUNT ` in Lakhs 22126 28817 Sea Purchases 0.00
(d) Stock In Trade 97005.15
Rate `/KWH 7.75 7.97 TOTAL (i) 110007.07
B. Own Generation (ii) EXPENDITURE IN FOREIGN
CURRENCY
Unit: MWH 92346 27401
(a) Interest 254.40
KWH Per Ltr. of Fuel/Gas 7.00 7.31 (b) Technical Asstt./Know How 2855.37
Cost `/KWH 3.15 3.02 (c ) Others 530.82
TOTAL (ii) 3640.59
2. LSHS, FO, LDO
TOTAL (i) + (ii) 113647.65
QUANTITY – MTs 81 57 Foreign Exchange Earned :
Amount ` in Lakhs 54 40 FOB VALUE OF EXPORT OF ` Lakhs
Caprolactam 224.52
Average Rate `/MT 67499 70881 Hydroxyl Amine Sulphate Crystal 52.00
3. NATURAL GAS MEK Oxime 2393.00
Ammonium Sulphate 241.00
Quantity in ‘000 SM3 152541 130555 Ammonium Phosphate Sulphate 994.00
Amount ` in Lakhs 40428 36817 Melamine 15.00
Di-Ammonium Phosphate 6049.00
Average Rate 1000/SM3 26503 28200 TOTAL 9968.52

58TH ANNUAL REPORT 2019-20 39

 ANN EXUR E "E" TO DIRECTORS' REPORT (Contd.)

TOTAL ENERGY CONSUMPTION AND ENERGY CONSUMPTION PER UNIT OF PRODUCTION (Contd.)

(B) CONSUMPTION PER UNIT OF PRODUCTION

Sr. Product Power Steam Natural Gas
No.
  2019-20 2018-19 2019-20 2018-19 2019-20 2018-19
    KWH KWH MTs MTs SM3 SM3
1 Ammonia 432 377 -1.276* -1.309* 872 879
2 Sulphuric Acid 37 36 -0.848* -0.871* 0.147 0.075
3 Phosphoric Acid 362 282 2.002 2.019 1.348 0.911
4 Urea 187 169 1.464 1.432 0.000 0.000
5 ASP 54 43 0.080 0.064 9.015 8.789
6 Melamine 1802 1756 6.918 6.821 370 376
7 Caprolactam (Old) 2112 1971 6.837 5.690 93.661 83.421
8 Caprolactam (Exp.) 1458 1360 5.876 5.573 33.472 32.352
9 Nylon – 6 812 767 2.059 2.046 0 0
10 ACH 0 0 0.000 0.000 0 0
11 Monomer 1180 961 3.310 3.172 0 0
12 MAA 438 480 3.923 3.429 0 0
13 AS 45 55 0.364 0.522 0 0
14 Sheets 0 0 0.000 0.000 0 0
15 Pellets 0 0 0.000 0.000 0 0
16 DAP (SU) 71 68 0.018 0.015 7.756 6.814
17 NPK (10:26:26) (SU) 68 69 0.017 0.015 10.633 11.596
18 NPK (12:32:16) (SU) 66 65 0.017 0.015 10.289 10.094
19 NPK (20:20:0:13) (APS) (SU) 71 76 0.020 0.017 15.469 17.346
20 Nylon Chips - - - - - -
21 Nylon Filament Yarn - - - - - -
* -ve indicate Export from Plants.

FORM-B
Form for disclosure of particulars with respect to Technology Absorption: 2019-20
(1) SPECIFIC AREAS, IN WHICH R&D IS CARRIED OUT: new grades of NPK complex fertilizers for crops like
Research work carried out in areas of polymers, fortified Wheat, Paddy, Maize, Pulses, Sugarcane, Vegetables,
fertilizers, Environment control & waste management; value fruits etc. The process is developed with a view of direct
added product(s)/Derivatives of existing products, specialized implement ation at Sik ka Unit without any need of
Agri-inputs for improving quality and yield of agricultural output, additional capital investment.
Quality and process efficiency improvement and assurance, • NPK 12-32-16 (Boronated): Optimized process with
customization of products. Continual support and expertise modifications to make use of liquid source of Boron
provided to all plants and services departments for Corrosion in existing setup at Sikka Unit. This product is
& Material evaluation, Failure investigation of components & m arket ed under t he brand nam e of S ardar
machinery, Microbial activity & corrosion monitoring of cooling
Boronated NPK Complex(12:32:16)
water.
• A PS 16-20-0-13 & NPK 16-16-16: P roc es s
(2) BENEFITS DERIVED:
established and Successful trial taken at Sikka Unit.
(A) Development of New Products/New Processes:
• NPK 14-28-00 & NPK 15-15-15: P roces s
1. NPK Liquid Bio fertilizer: Developed a biofertilizer product
in liquid form consis ting of a consortium of three established at lab scale and ready for scale up.
microorganisms each one for N, P & K. This product is 3. Nanofertilizer of ZnO: A process developed to produce
drought resistant and it helps in fixing nitrogen from Nano Fertilizer of Zinc in Suspension form. Nano to Sub-
atmosphere and phosphate & potash from soil. It is useful micron size ZnO particles enhances in-take by plants
in crops like Cereals, Millets, Vegetables, Fruits, Fibre through leaf stomata. Mainly used for Direct Absorption
and oil producing crop. 2 Lac Ltr/yr capacity plant has Technology with increased nutrient use efficiency.
been commissioned and is operative from February 2020. 4. Ammonium Sulphate (G5): Value addition to existing
This product is now being traded under the brand name product of Ammonium Sulphate by addition of FCO
of “Sardar Liquid Consortia (NPK)”. approved micronutrient fertilizer (G5). This makes product
2. NPK Complex Fertilizers: Complex Fertilizers are the rich in I ron, Manganese, Zinc, Copper and Boron
source of major nutrients like Nitrogen, Phosphorus and micronutrients. It is mainly used for Oil seeds, Horticultural
Potash along with micronutrients. R&D has developed crops and Fruit crops. This product will help to reduce
various processes to manufacture different customized/ micronutrient deficiency in Indian soil.

40 58TH ANNUAL REPORT 2019-20

 ANN EXUR E "E" TO DIRECTORS' REPORT (Contd.)

5. G4 Micromix from inorganic salts: Developed a process 4. Ferrography of lube oil samples for assessment of
to produce G4 Micromix as per GoG specifications by condition of rotating machinery, oil contamination and
using inorganic salts. Product is a ric h source of oil-replacement frequency.
micronutrients at reduced cost. This product is mainly 5. Metallurgical input provided to all operating plants and
used for Foliar Applications in field crops, fruits & departments for material related problems like heat
vegetables. treatment, welding, import substitution, MoC selection,
6. HexaMethoxy Methyl Melamine (HMMM): A process material compatibility study etc.
developed to produce HMMM, a derivative of Melamine 6. COVID19: R&D also joined hands with GSFC team to
using Melamine as starting raw material. Blend of HMMM fight against Corona Pandemic and provided immense
with Silica in various proportions has huge demand in support by ensuring uninterrupted supply of Hand
Tyre and conveyer belt industry due to excellent wear Sanitizers and Disinfectant solution. To start with, 2250
resistance properties. Process is already established at Ltrs Hand Sanitizer was manufactured in-house as per
Pilot scale and product is under field trial. WHO guidelines and distributed to all departments.
7. Melamine Cyanurate: It is a derivative of Melamine having Hydrogen Peroxide solution for Disinfectant tunnels and
high thermal stability. It is often used by compounding Hypochlorite solution for Spray is also being distributed
with glass filled Nylon in various proportions for polymers on continuous basis.
wit h higher proces sing t emperatures and in (3) FUTURE PLAN OF ACTION:
manufacturing of flame retardant nylons & thermoplastics. 1. Zinc solubilizing bacteria: Zinc solubilizing biofertilizer
Process is scaled up at pilot plant and product is under (ZSB) converts unavailable form of zinc present in soil to
field trial. bio- available form. It increases shoot growth, larger leaf
8. Cast Nylon: Cast nylon is high molecular weight, highly size drought resistance of plant, improves soil aeration
crystalline polymer having better machinability than and water retention.
2. Silica solubilizing bacteria: Silica solubilizing biofertilizer
extruded nylon. It is light weight and shock absorbent. It
contains bacteria which converts insoluble silica to silicic
can replace steel structure in certain applications.
acid, the bio-available form of silica. It makes plant
Successful commercial trials have also been conducted.
st ronger and mos t benef ic ial f or paddy crop with
Process is ready for demonstration to end users.
increased yield.
9. P harm a Grade Am m onium S ulphate: A proc es s
3. To develop a process for manufacture of SMMA (Styrene-
dev eloped to produce P harma Grade Am m onium
Methyl MethAcrylate) copolymer – an alternative to
Sulphate by using Ammonium Sulphate produced at
polycarbonates.
AS-III plant. In addition to pharma industries, this product 4. To develop a process for manufacture of Hydroxylamine-
has wide applications in bakery, detergents, toothpaste, O-Sulfonic acid. This product is mainly used in pharmacy
s hampoo, dent al c leans ers and ot her hous ehold industries.
cleaning products. The process is ready for scale up. 5. To develop a process for manufacture of Ammonium
10. Potassium Di Hydrogen Phosphate & Di Potassium dihydrogen phosphate and Di ammonium Hydrogen
Hydrogen Phosphate: Developed process to produce Phosphate used in pharma & food industries.
Potassium Di Hydrogen Phosphate & Di Potassium 6. To develop a process for manufacture of Food grade
Hydrogen Phosphate. These products have wide use in Phosphoric Acid and Pharma grade Urea.
Pharma & food industries. Products developed at lab (4) EXPENDITURE ON RESEARCH & DEVELOPMENT:
scale are under evaluation stage. ` in Lakhs
11. Hydroxy lam ine hydroc hloride (HA C): I t has wide (a) Capital 28.66
applications and used for the preparation of Oximes, (b) Recurring 1014. 82
anti-skinning agents, corrosion inhibitors and additives (c) Total 1043. 47
for cleaners. Product developed at lab scale, process (d) Total R & D Expenditure as a
optimization is under progress. percentage of Gross Sales 0.14%
12. Acetone Oxime: It is a white crystalline solid used as a Technology Absorption, Adoption and Innovation:
reagent in Organic synthesis. It has very good corrosion In-house Technology:
inhibitor properties, with lower toxicity and greater stability • NPK Biofertilizer launched in the market and started production
c om pared t o Hydraz ine. It has got wide use in with a capacity of 1.5 Lac Ltrs/yr. Expansion of capacity is
Pharmaceutical Industries & Chemical Industries. Product under planning stage.
developed at lab scale, process optimization is under • Trial production of APS 16:20:0:13 taken at Sikka Unit for
progress. initial market feedback.
(B) Customization & Market support • B oronated NPK launched in t he market and s t arted
Services, Plant Support Activities: production at Sikka Unit, it has contributed 70.42 Lakhs to
1. I n-situ m et allography at 296 loc ations on c ritical turnover.
equipments of various plants was done for condition • Gypsum Plus launched last year has contributed 425.65 Lakhs
monitoring. This has enabled in assessment of possible to turnover.
damage as well as monitoring degradation of material • SWP 90: Water dispersible 90% Sulfur works as fungicide
operating at high temperatures/stress conditions. and f ert ilizer. 22 M TPD plant is under f inal st age of
2. Failure Analysis of 15 components from various plants commissioning and expected to start production this year.
was carried out which has helped in selection of better B CONSERVATION OF RAW MATERIAL AND CHEMICALS
MOC and optimization of process parameters to avoid Measures taken at Fertilizernagar, Vadodara Unit
future failures and reducing down time of plants. 1) Installation of BacComber system at SA-III Cooling Tower.
3. Corrosion and microbial monitoring of cooling tower water Cooling water treatment at Cooling Tower was changed from
at various plants resulted in efficient running of plants. chemical dosing to non-chemical treatment, called BacComber

58TH ANNUAL REPORT 2019-20 41

 ANN EXUR E "E" TO DIRECTORS' REPORT (Contd.)

system. It resulted into less RW makeup requirement by 0.5 4) Recovery of Benzene and Cyclohexane vapour in Anone
lac M3/year (`16.4 Lakhs). CEP.
2) Requirement of fixed opening valve trays for Hydrolysis Reflux drum vapour line was directly connected to Absorption
Column (K-135) at Caprolactam-II plant of GSFC. column. To reduce vapour loading, Reflux drum vapour,
Tray type of Hydrolysis Column (K-135) was replaced from containing benzene vapour, was passed through Chiller prior
variable opening trays to fixed opening valve tray. This had to feeding to Absorption column. It enabled recovery of
reduced anone slip from tower. Total annual Anone loss Benzene vapour. Similarly, to reduce loss of cyclohexane
prevention is 60 MT (` 60 Lakhs). vapour, Chilled water flow to chiller increased by modifying
3) Provision of Chilled Water Jacket in Vent Line of B-150 for Chilled water supply / return line size from 2"ø to 4"ø. It
Recovering CX Vapors in Anone CEP. resulted into better cooling and thus more recovery. Combined
Chilled water condenser was installed on vent line for saving of Bz + CX by 1.3 MT/year (` 1.06 Lakhs).
condensation of CX vapors for recovering. It resulted into CX
recovery by 14.3 MT/year (` 8.6 Lakhs).

42 58TH ANNUAL REPORT 2019-20

 ANNEX URE "F" TO DIRECTORS' REPORT

BUSINESS RESPONSIBILITY REPORT (BRR)

SECTION A: GENERAL INFORMATION ABOUT THE COMPANY
1. Corporate Identity Number (CIN) of the Company : L99999GJ1962PLC001121
2. Name of the Company : Gujarat State Fertilizers & Chemicals Limited
3. Registered Address : P. O. Fertilizernagar, Dist: Vadodara, Gujarat, India
4. Webs ite : www.gsfclimited.com
5. E-mail ID : [email protected]
6. Financial Year Reported : 2019-20
7. Sector(s) that the Company is engaged in (industrial activity code-wise):
Fertilizers & Industrial Production
Industrial Group Description
201 Manufacture of basic chemicals, fertilizer and nitrogen compounds, plastics and synthetic rubber
in primary forms
202 Manufacture of other chemical products
203 Manufacture of man-made fibres
As per National Industrial Classification – The Ministry of Statistics and Programme Implementation
8. List three key products that the Company manufactures (as in balance sheet):
i. Caprolactam
ii. DAP
iii. Urea
9. Total number of locations where business activities are undertaken by the Company:
i) Company does not have any International Location where business activity is undertaken by Company.
ii) There are four National locations where Company’s Units are located. The details are as follows:
Baroda Unit Fertilizernagar – 391 750, Dist. Vadodara.
Polymers Unit Nandesari GIDC, Dist. Vadodara.
Fibre Unit Kuwarda, Dist. Surat.
Sikka Unit Moti Khawdi, Dist. Jamnagar
10. Markets served by the Company – local/ state/ national/ international:
In addition to serving Indian markets at Local, State and National level, GSFC exported its products to countries worldwide
during the year ended on 31st March, 2020.

SECTION B: FINANCIAL DETAILS OF THE COMPANY

1. Paid-up capital (INR): 79.70  Crores
2. Total turnover (INR): 7621  Crores
3. Total profit after taxes (INR): 99  Crores
4. Total spending on Corporate Social Responsibility (CSR) as percentage of profit after tax (%): 2% of PAT
5. List of activities in which the Corporate Social Responsibility (CSR) expenditures have been incurre d:
The major areas in which the CSR expenditure has been incurred include
1. Rural transformation
2. Environment
3. Health
4. Education

SECTION C: OTHER DETAILS

1. Does the Company have any subsidiary company/ companies?
Yes, Company has two direct subsidiary and one indirect subsidiary as on 31st March, 2020.

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 ANNEX URE "F" TO DIRECTORS' REPORT (Contd.)

2. Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the
number of such subsidiary company(s)
Your Company would like to encourage its subsidiaries to adopt its policies and practices.
3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR
initiatives of the Company?
No. Your Company would like to deal with the parties/ entities who have willingness to be the part of BRR initiatives.

SECTION D: BUSINESS RESPONSIBILITY INFORMATION

1. Details of Director/ Directors responsible for BR
a. Details of the Director/ Directors responsible for implementation of the BR policy/ policies:
DIN Number : 00122921
Name : Arvind Agarwal
Designation : Chairman and Managing Director
b. Details of the BR head;
Sl. Particulars Details
No.
1 DIN Number (if applicable) NA
2 Name V. V. Vachhrajani
3 Designation Company Secretary & SVP (Legal)
4 Telephone Number +91 265 3093582
5 E-mail ID [email protected]

2. Principle-wise as per National Voluntary Guidelines (NVGs) BR Policy/ Policies (Reply in Y/N)
The National Voluntary Guidelines (NVGs) on Social, Environmental and Economic Responsibilities of Business released by
the Ministry of Corporate Affairs has adopted nine principles of Business Responsibility.
Following are the brief summary of Principles as per NVGs;
P1 Business should conduct and govern themselves with Ethics, Transparency and Accountability
P2 Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle
P3 Businesses should promote the well-being of all employees
P4 Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are
disadvantaged, vulnerable and marginalized
P5 Businesses should respect and promote human rights
P6 Business should respect, protect, and make efforts to restore the environment
P7 Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner
P8 Businesses should support inclusive growth and equitable development
P9 Businesses should engage with and provide value to their customers and consumers in a responsible manner

Sr. Question(s) P1 P2 P3 P4 P5 P6 P7 P8 P9
No.
1. Do you have a Y Y Y Y Y Y Y Y Y*
policy/policies This forms This policy is Certain policies form part of certain This is the This forms Your
certain certain
for part part of your the Code of Conduct for aspects part of the part of your Company has
aspects aspects
of the Code of Company’s employees. of this Code of Company’s a CSR Policy.
of this of this
Conduct of Environment, There are various policies principle Conduct EHS policy.
principle principle
your Health and for the benefit of the forms part of your
forms part forms part
Company Safety (EHS) employees which are of the CSR Company
of the of the
which Policy. issued by the Human Policy. which is
Marketing Marketing
is applicable Resources function of the applicable
Policy. Policy.
to Company from time to time. to all
all employees. The policies includes Employees.
Maternity Leave Policy,
Employee Safety Policy,
Group Mediclaim Policy,
etc.

44 58TH ANNUAL REPORT 2019-20

 ANNEX URE "F" TO DIRECTORS' REPORT (Contd.)

2 Has the Y Y Y Y Y Y Y Y Y
Policy being
formulated in
consultation
with the relevant
stakeholders?
Refer Note1
3 Does the policy Y Y Y Y Y Y Y Y Y
conform to
any national / The spirit and contents of the Code of Conduct and all the applicable laws and standards are captured in the policies articulated by your Company.
international The policies are based on and are in compliance with the applicable regulatory requirements and International Standards.
standards?
4 Has the policy Y Y Y Y Y Y Y Y Y
been approved (It is (It is signed (It is signed by (It is signed (It is signed (It is signed (It is signed
by the Board? If signed by by the Managing by by by by
yes, has it been the the Managing Director) the Managing the Managing the Managing the
signed by MD/ Managing Director) Director) Director) Director) Managing
owner/CEO/ Director) Director)
appropriate
Board Director? As per Good Corporate Governance practice, all the policies are noted by the Board. The Board authorizes Senior Officials of the Company to
authenticate such policies and make necessary changes whenever required.
5 Does the Y Y Y Y Y Y Y Y Y
Company have
a specified The implementation and adherence to the Code of Conduct for Employees is overseen by the Human Resource and Internal Audit Function
committee respectively.
of the Board/ The Corporate Social Responsibility Policy is administered by the CSR Committee in line with the requirements of the Companies Act, 2013. The
Director/Official EHS Policy is overseen by the Supply Chain, Manufacturing and the Research & Technology Function.
to oversee the
implementation
of the policy?
6 Indicate the link Please refer corporate governance report for link.
for the policy to
be viewed online?
7 Has the policy Y Y Y Y Y Y Y Y Y
been formally
communicated
to all relevant
internal and
external
stakeholders?
8 Does the Y Y Y Y Y Y Y Y Y
Company
have in-house
structure to
implement the
policy/policies
9 Does the Y Y Y Y Y Y Y Y Y
Company have
a grievance
redressal
mechanism
related to the
policy/policies
to address
stakeholders’
grievances related
to the policy/
policies?
10 Has the Y Y Y Y Y Y Y Y Y
Company
carried out
independent
audit/evaluation
of the working
of this policy by
an internal or
external agency?
Refer Note 2:

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 ANNEX URE "F" TO DIRECTORS' REPORT (Contd.)

Note 1: W hile there may not be formal consultation with all stakeholders, the relevant policies have evolved over a
period of time by taking inputs from concerned Stakeholders.
Note 2: The Company has not carried out independent audit of the policies, the Internal Audit Functions periodically
looks at the implementation of the policies.
Note 3: In respect of Principle 7 & 9, the Company follows the contents enshrined therein. However, the Policy in this
regard is presently not documented.
2a. If answer to Sr. No. 1 against any principle is ‘No’, please explain why: (Tick upto 2 options)
Sr. Question(s) P1 P2 P3 P4 P5 P6 P7 P8 P9
No.
1 The Company has not understood the Principles - - - - - - - - -
2 The Company is not at a stage where it finds itself in a position to formulate - - - - - - - - -
and implement the policies on specified principles
3 The Company does not have financial or manpower - - - - - - - - -
resources available for the task
4 It is planned to be done within next 6 months - - - - - - - - -
5 It is planned to be done within the next 1 year - - - - - - - - -
6 Any other reason (please specify) - - - - - - - - -
3. Governance related to BR
 The Board of Directors of your Company, either directly or through its Committees, assesses various initiatives forming part
of the BR performance of the Company annually. The CSR Committee meets periodically to review implementation of the
projects/programmes/activities to be undertaken in the field of CSR. Other supporting heads of Department meet on a
periodic basis to assess the BR performance.
 Your Company publishes the information on BR which forms part of the Annual Report of the Company. The Annual Report
is uploaded on the website of the Company – www.gsfclimited.com

SECTION E: PRINCIPLE-WISE PERFORMANCE

Principle 1
Business should conduct and govern themselves with Ethics, Transparency and Accountability
• The GSFC Code of Conduct for Employees ("the Code") contains the essence of various regulatory requirements and internal
policies which primarily deal with or are framed around the principles of ethical behaviour and a sense of accountability. The
Company expects its employees including the employees of its subsidiaries to know the Code and act accordingly. Therefore, its
employees are acquainted with the Code at the time of their joining and are required to read and affirm to the Code on annual
basis.
• Ethics, transparency and accountability are the three basic/essential pillars on which the com plianc e eco-system of your
Company is built. The web based compliance management system not only helps adhere to the regulatory requirements but also
develops a culture of self-regulation and accountability at the grass root level within the organization. In the present times when
governance is looked upon as a critical aspect of sustainability, we believe, our compliance managem ent system s play a
significant role in ensuring good corporate governance.
• A policy on vigil mechanism has been framed and is placed on website of the Company to enable the employees to report any
instances of fraud, abuse, misconduct or malpractices at workplace.
In order to further strengthen its internal controls for prevention of insider trading, the Company has developed its Code of
Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information in such a manner that it not only satisfies
the regulatory requirem ents but also instils a sense of responsibility among the designated persons for making timely and
adequate disclosures. In order to facilitate implementation of the Code and its compliance, your Com pany has automated the
entire process by leveraging technology and putting in place the GSFC Insider Trading Management System. The system acts
as a repository of relevant information and provides an electronic platform for seeking trading approvals and send out timely
compliance rem inders.
The Company has in place different mechanisms for receiving and dealing with com plaints from different Stakeholders viz.
Shareholders, Customers, Employees, Vendors etc. There are dedicated resources to respond to the complaints within a time
bound manner. During the year, your Company received 40 (forty) complaints from shareholders, which have been fully resolved.
Principle 2
Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle
• The original objective for setting up your company was to contribute towards the food security to the nation. Subsequently,
beyond fertilizers, your company diversified into the arena of Chemicals which has been touching all walks of human life, directly
or indirectly. All the products conform to their quality standards and the plants of GSFC are proactively maintained so as to meet
with environmental standards.

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 ANNEX URE "F" TO DIRECTORS' REPORT (Contd.)

• Your Company is committed to offer the products that meet nationally accepted green product standards. This comm itment
comes from the team of dedicated professionals working at Com pany's state-of-the-art Research & Development Centre at
Vadodara where technology and innovation are the corner stones.
• Your Company strives to launch various schemes for improvement in the architecture of its plants with a clear focus on improvising
the overall performance in terms of production quality, rationalization in the consumption of basic raw materials, utilities like
water, power etc. The introduction of such schemes has been quite a regular exercise in the Company and this is the only reason
that despite the plants of GSFC are more than four decades old, still they are performing above its rated capacity and without the
risks associated to the obsolescence.
• Your Com pany has initiated proactive steps, as far as possible, to control, reduce and eliminate use of avoidable hazardous
materials. Appropriate safeguard mechanism has been in place with a view to control or prevent entry of pollutants. Also there
is a proper system in place in categorizing the hazardous inputs in the active raw material list and continuous efforts are always
there in the direction towards achieving reduction in pollution levels. In cases where alternates are not available easily for
replacement, a detailed analysis for rational mitigation of exposure risk is being undertaken and same is followed at plant level.
• Your Company intends to educate its customers and employees about the safe use of its products. Product Information Sheets for
all the major products are available. Company has laid down vendor evaluation and registration procedures for procurement of
goods and availing services. The procedure entitles com pany to have sustainable sourcing and large amount of inputs are
sourced sustainably as most of the raw materials are sourced directly from large scale manufacturers in India and outside India.
This ensures quality supplies on consistent basis at the most competitive prices.
• On-line Registration of Suppliers & Service providers are undertaken to have more transparency in procurem ent. Many new
vendors and service providers are registered during the year to enhance competition.
• Company promotes and encourages local and small vendors including MSMEs from the nearby/ surrounding area to procure
goods and services. The nearby comm unities are given adequate opportunities for associating with com pany on competitive
terms and conditions. Feasible preference is also given to MSMEs and small scale industries as per guidelines prevailing from
time to tim e. Local and small scale vendors are educated and encouraged to participate in online tender process as well as
reverse auction process. Technical support is also extended to these communities when sought for.
• The Com pany has well developed process for recycle of products, wastes etc. emanating from the production cycle. Any
discharge of waste water, finally outside the factory premises is scientifically processed so as to become eligible for discharge in
the effluent channel for further disposal thereof. To ensure this objective, the Company has become the promoter of one of the
Com mon Conveying Channel Company viz. Vadodara Enviro Channel Ltd. The objective of this Company is to maintain the
effluent channel, which is connected to the Gulf of Cambay through which its participating members discharge their treated
effluents as per pollution control norms. Needless to mention here that before final discharge of effluents into the said channel,
they are appropriately treated. The hazardous waste generated by the Company is also scientifically handled and the Company
has proper system in place for safe disposal of these hazardous wastes like organic waste from Caprolactam Plants which are sent
for incineration at registered TSDF site, spent catalysts are given to registered recyclers, spent oil is given to registered refiners
etc.
1. Pre-Heating of Lactam-Benzene feed to T-423-3 for MPS saving at Lactam-I plant, Caprolactam-I:
Lactam-Benzene (LC-BZ) feed to Tower (T-423-3) of Capro-I plant was originally pre-heated from ~38°C upto ~65°C using hot
water (HW) received from other section of Capro-I Plant. HW supply was stopped due to stoppage of other section. Use of LPS (3K
steam), which is in excess and being vented was utilized for pre-heating. This resulted into a reduction of steam generation load
on Steam generation boiler thereby reducing the quantity of fuel - Natural Gas (NG) used for combustion in the boilers. The
resultant annual NG saving is 6.33 Lakhs SM3 equivalent to ` 202.7 Lakhs. As quantity of NG used for combustion is reduced,
corresponding flue gas em issions containing green house gases gets reduced. The modification was im plem ented with a
payback period of 0.5 months.
2. Reduction in NG fuel consumption in F-101 & F-202, A-III Plant:
It was proposed to preheat HPNG feed to HPNG Heater furnace (F-101) to reduce the heat duty of the furnace by recovering heat
from process stream which was being cooled by Cooling water. And also use of LPS (3K steam), which is in excess and being
vented, to preheat Process air in Process Air heater Furnace (F-202). This resulted into reduction of steam generation load on
Steam generation boiler thereby reducing overall quantity of fuel - Natural Gas (NG) used for combustion in the boilers. The
resultant annual NG saving is 4.40 Lakhs SM3 equivalent to ` 140.8 Lakhs. As quantity of NG used for combustion is reduced,
corresponding flue gas em issions containing green house gases gets reduced. The modification was im plem ented with a
payback period of 2.7 months.
3. Steam saving by replacing existing Ejector with energy efficient Ejector, at Urea I Plant:
12K steam is utilized in Ejectors for maintaining Vacuum in Crystallizer of Urea-I Plant. New energy efficient ejectors was
installed to enhance the efficiency of operation and thereby to achieve steam saving. This resulted into a reduction of steam
consum ption and further load on Steam generation boiler thereby reducing the quantity of fuel - Natural Gas (NG) used for
combustion in the boilers. The resultant annual NG saving is 2.85 Lakhs SM3 equivalent to ` 91.24 Lakhs. As quantity of NG used
for combustion is reduced, corresponding flue gas emissions containing green house gases gets reduced. The modification was
implemented with a payback period of 0.2 months.
4. Use of Variable Frequency Drive (VFD) at BFW pumps of CVL boiler:
Due to operation of two numbers of BFW pumps of CVL boiler at low load, it was proposed to install VFD for power saving. It
resulted in annual power saving of 7 Lakhs unit (` 50.8 Lakhs). The modification was implemented with a payback period of 20.9
months. The reduction in power consumption reduces equivalent power generation at source plants.

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 ANNEX URE "F" TO DIRECTORS' REPORT (Contd.)

Principle 3
Businesses should promote the well-being of all employees
• During the time length under discussion, Process Safety Management and Safety Management system was strengthened and
HAZOP studies have been carried out as well. Contractors Safety and visitors safety modules have been added. Concentrated
efforts have been applied on trainings related to personal protective appliances for all stake holders trainings have been imparted
on basic fire prevention as well as usage of fire extinguishers. Safety and Fire trainings have attracted more than 5000 employees,
Contractors and visitors. The figure in percentage terms may be expressed as follows:
 45.60 % permanent employees have been imparted Safety related training during the period 19-20.
 12.59 % Women employees have been covered under various safety related trainings during the same period and 55.55%
persons with special ability participated in safety and allied program during the period under discussion viz 19-20.
 75.99 % Contract employees (1408) have been imparted safety related trainings during the time length of FY 19-20.
• Basic Fire safety awareness sessions have been conducted in school for students in nearby pockets, students who received such
trainings exceed 300.
• Project work is currently going on for S90WDG etc. which again has its own set of safety challenges. Adequate measures have
been taken to ensure safety during Construction, Mechanical and Electromechanical work by putting additional layers of safety
and employing safety mechanisms utilized for project related works.
• Measures have been initiated to impart mechanical turnaround to fire fighting vehicles and as such Fire tenders are responding
much quickly to emergency calls ; mechanically elevated working platform popularly called as snorkel is ready to offer service on
the spur of the moment; it can scale an elevation of nearly 33 Meters. Inculcation of discipline by way of Fire Drills and training the
fitness part of emergency responders has been especially ensured.
• These are the internal unions of its staff cadre employees which are recognized by the Management. These unions do not have
any affiliation political and otherwise and follow the process of collective bargaining for resolving staff related matters.
• All the staff cadre permanent employees are the members of this recognized employees association. The employees also have an
autonomy to opt out of the membership any of these unions, if they so desire.   
1. Total number of employees: 3188 (155 – Polymers, 3033- Baroda,)
2. Total number of employees hired on temporary/contractual/casual basis: 192+1216- (Baroda – 1408)
3. Number of permanent women employees: 135 (Polymer-1 Baroda – 134 )
4.   Number of permanent employees with disabilities:36 (Polymer-2 Baroda – 34,)
• There are the internal unions of its staff cadre employees which are recognized by the Management. These unions do not
have any affiliation political and otherwise and follow the process of collective bargaining for resolving staff related matters.
• All the staff cadre permanent employees are the members of this recognized employees association. The employees also
have an autonomy to opt out of the membership any of these unions, if they so desire.   
The company has its union of staff employees under the name and style :
I Baroda Unit : “GSF Employees’ Union”. 
“GSFC Employees Union”
II. Polymers Unit : GSFC Limited – Polymers Unit Employees Union
III. Fibre Unit : Gujarat Nylons Employees Union
IV. Sikka Unit : Gujarat State Fertilizers & Chemicals (Sikka Unit) Employees’ Union
Percentage of your permanent employees is members of recognized employee association:
All the staff cadre permanent employees are the members of these recognized employees association. The employees also have an
autonomy to opt out of the membership any of these unions, if they so desire.
1. Number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last financial year and
pending, as on the end of the financial year for all units.
Sr. Category No of complaints filed during the No of complaints pending as on end
No. financial year of the financial year
1. Child labour / forced labour / involuntary labour NIL NIL
2. Sexual harassment NIL NIL
3. Discriminatory employment NIL NIL
1. Percentage of safety & skill up-gradation training during the year 19-20
Units Permanent Employees Permanent Women Casual/ Temporary/ Employees with
Employees Contractual Employees Disabilities
Polymers 18% 100% 55% 100%
Baroda Safety Trg.: 50.22% 12.31% 75.99 % Nil
Principle – 4
Businesses should respect the interests of and be responsive towards all stakeholders, especially those who are
disadvantaged, vulnerable and marginalized
Identifying the Stakeholders and engaging with them through multiple channels in order to hear what they have to say about our
products and services are essential parts of our sustainability plan. The health and wellbeing of the communities has always been
an important facet of our Company’s operations. Our Company extends its social responsibility beyond the statute book and by
engaging in strategic and trust based community development interventions.

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 ANNEX URE "F" TO DIRECTORS' REPORT (Contd.)

While our CSR approach focuses on the development of communities around the vicinity of our plants and beyond, we have also
developed innovative programmes that leverage our capabilities as a fertilizer and chemical company to ensure equitable distribution
of its fertilizers as per Govt. supply plan, thus adding value to the food security of the Nation. While on chemical business plan,
the Company strives to touch all walks of life to make a comfortable living. 
We are running three schools at our Vadodara, Sikka and Fibre unit in which students from nearby communities are enrolled. With
a view for wholesome development of children through inclusive sports coaching, Company has tied up with TENVIC Sports Pvt.
Ltd., a reputed agency for improving the sports talent amongst the schools run by GSFC at its Vadodara and Fibre Unit and Akshar
Trust, a school for deaf and mute children.  Karate training is conducted with emphasis on girl students to empower them.
GSFC does give special attention to disadvantaged stakeholders as evident from Special Children Centre established at Chhani.
We provide safe drinking water to nearby villages. We ensure support to NGOs that are doing excellent for upliftment of the
communities but lack resources like United Way of Baroda, Art and Culture Foundation, SVADES, Sunday school run by Friend’s
Society for marginalised and  special children,  Citizens Blood Donation Society for Mobile Medical van etc.
CSR initiatives are undertaken in coordination with government where we are not able to reach the communities in need. The
details of initiatives taken by our Company in the area of community and society development have been provided in the Corporate
Social Responsibility which is part of the Annual Report.
In nutshell it fulfils the vision of company’s CSR Policy, which is to commit and to integrate its business values, ethics and
professional skills to meet the expectations of all our stakeholders by developing, encouraging and supporting various social and
economic initiatives, without any duplication of government policies, through our industrial expertise for Sustainable Development.
Principle – 5 Business should respect and promote human rights
• The concept of equality of human beings irrespective of the cast, creed, religion, gender etc. has been the basic principle
on which the business of GSFC is based on. Human rights are very well weaved with Code of Conduct for Employees, Human
Resource Policies and the settlements reached with the Trade Unions at our plants. Some of the points like prohibition of
child labour and forced labour and workers’ right to information are of special importance.
• The term ‘Human Rights’ covers a host of aspects including freedom of association, collective bargaining, non-discrimination,
gender equality, avoidance of child and forced labour among others. Your Company is compliant to national regulations
pertaining to human rights. The Code of Conduct of your Company also applies to the employees of its subsidiary company.
There are Grievance Redressal Mechanisms in place at all the plants with proportion of workers and management as per the
statutory norms. These initiatives provide a sound platform for continued dialog and thus help maintain cordial relation with the
workers. During the last financial year, there were no serious complaints received from the stakeholders, which is pending resolution.
Principle – 6
Business should respect, protect, and make efforts to restore the environment
The policy related to environment covers all agencies connected to business with GSFC and extends to the Joint Ventures/
Suppliers/Contractors etc. GSFC practices Integrated Management System Policy (Covering Responsible care, Quality, Environment,
Occupational Health, Safety & Energy) to ensure safe working environment for the employees & affiliated people.
GSFC is deeply committed to satisfy its social obligations and has made consistent and effective endeavours for creating better
environmental conditions through abatement of pollution and adopting sustainable development practices. With the objective of
combating climate change, GSFC aligns its business objectives with practices of resource conservation and environment protection.
Regular technological initiatives are pressed into service with great vigour to improve and retain the purity of air, water and soil.
GSFC has always remained in forefront to make the company green & clean by Landscaping, development of large & beautiful
gardens within the complex & in colony and massive Green belt in 118 Ha areas (@ 36% of the total land area).
Our Company has consistently managed and improved the environmental performance. We are sensitive to our role both as user
of natural resources and as a responsible producer of Fertilizers & chemicals based products for society. Over the last two decades,
our efforts to manage water, energy and material resources have yielded positive results. The manufacturing facilities have
established ISO 14001 based Environment Management System. Potential Environment aspects have been identified as a part
of EMS. Any deviations from laid down policies and procedures are tracked and reviewed by effective procedures of Corrective
Action and Preventive Action (CAPA). GSFC has installed Online round the clock monitoring facility for treated effluent discharge,
ambient air and stack air emissions for efficient and immediate control of pollution. SO2 and Ammonia gas detectors are also
installed in various process plants for monitoring of gaseous emissions at source and subsequently better control and implementation
of proactive corrections.
GSFC’s clean development mechanism (CDM) initiatives bear testimony to the drive to reduce greenhouse emissions. The first CDM
project envisages use of waste gas from company’s plants to manufacture Ammonia, thereby obviating the need for natural gas
as fuel for its production. It is a matter of pride that the technology for replacing the fossil fuel has been developed through in-
house R&D efforts. Meanwhile, the second CDM initiative is generating 152.8 MW green energy through a cluster of windmills.
32 to 35 % of GSFC’s all units power requirement is fulfilled from wind power.
Continual adoption of new Technologies and up gradation in the existing process plants is done for energy efficiency, resource
conservation and reduction of pollution potential. Use of renewable energy like wind and solar energy is encouraged at all levels
of energy production phases. 10 MW Solar power plant is successfully commissioned at Charanka, Dist. Patan Gujarat. It is operated
at about 21% Capacity Utilization Factor (CUF).
Our Company considers compliance to statutory EHS requirements as the minimum performance standard and is committed to go
beyond and adopt stricter standards wherever appropriate.
The emissions/waste generated by our Company is well within the permissible limits given by Gujarat Pollution Control Board for
the financial year being reported. No Show cause notice is received from GPCB or CPCB.
In FY 2019-20, various energy conservation schemes have been implemented like Use of Variable Frequency Drive (VFD) at BFW

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 ANNEX URE "F" TO DIRECTORS' REPORT (Contd.)

pumps of CVL boiler and Replacement of two pumps in ETP. In addition to this, various measures are also undertaken for saving
Natural Gas (NG) like Installation of additional Dehydrogenation Feed preheater at Capro-I, Replacement of existing ejectors at
PA plant, Enhancement of flash steam generation at A-III plant etc.
Implementation of above resulted into annual reduction in consumption of NG by 1930266 Sm3/year and power by 95.72 kWh/
year. Equivalent monetary saving achieved is @ ` 6.2 Crores/year. As most of the schemes were implemented with minimum or
no cost of modification, it resulted into instantaneous payback period with lucrative savings.
Principle – 7
Businesses when engaged in influencing public and regulatory policy, should do so in a responsible manner
Your Company has maintained a fair degree of transparency through timely and adequate disclosure of information to the public
and regulatory bodies. Your Company articulates the larger interest of industry and the community at industrial forums. As on 31st
March, 2020 your Company is a member of following prominent trade associations viz. Confederation of Indian Industries (CII),
Federation of Indian Chambers of Commerce and Industry (FICCI), Federation of Gujarat Industries (FGI), The Fertilizer Association
of India (FAI). All India Plastic Manuf. Association, Baroda Productivity Council, British Safety Council, UK   P 470, Employees
Federation of India, EXIM Club, Indian Chemical Council, Indian Council of Arbitration, National Safety Council
Principle – 8
Businesses should support inclusive growth and equitable development
Company has specified programme as a CSR Activities which has been the part of core business philosophy at GSFC ever since
its inception. Today, company has developed CSR as a very special concept to promote the overall development, progress and
betterment of people belonging to the weaker sections of society with a view to improve ‘Human Development Index’ (HDI) with
core areas like education, environment, health and sanitation, improvement in nutrition level, support to NGOs, rural development
(social & infrastructural), industry-academic interface, support during natural calamities and various other in-house projects.
The CSR projects at GSFC are undertaken through the ideal blend of in-house as well as support of specialized implementing
agencies/NGOs. Company has carried out the impact assessment of its CSR initiative.  The contribution towards CSR for the F.Y.
2019-20 was to the tune of ` 09.96 Crores.
We believe in hand holding with a view to develop the beneficiary in such a way that there is self sufficiency over a period and
the project is handed over. One such example is Contribution to Mid-Day-Meal Scheme through The Akshaya Patra Foundation,
where GSFC has supported for capital expenditure plus running expenditure for five years and then project has started showing
its fruitful results on its own.
GSFC University is insightful CSR initiative from GSFC with a vision to boost quality education needs and eco-friendly technology
for urban sustainability. Cutting- edge skill dissemination with a drive to facilitate state-of the art infrastructure and technology for
academic pursuits and to fulfil industry requirements to supplement and nourish region’s landscape of learning and research is
the idea behind establishing this academic institute with industrial support. It is an innovative step towards preparing youth
interested in joining the mainstream of development, by moulding their minds, expanding their comfort zones and boosting
confidence to deliver quality results all backed by digital knowledge with online course material.
Principle – 9
Businesses should engage with and provide value to their customers and consumers in a responsible manner
• Your Company places its customers at the center of all its business conducts rather than at the receiving end.
• Your Company believes in implementing the customer feedback into product development and enhancing user experience.
In order to facilitate our customers and to communicate their views, feedback, suggestions, complaints etc. your Company
has dedicated Product Manager, who is the contact point for the respective products from the stand point of customer
feedback and the responsibility is cast upon the Product Manager to resolve the complaint/query of its customers in a time
bound manner. Many times, the Product Manager is required to visit the premises of the customers to have the complete
grasp of the consumer grievance/complaint for its effective resolution.
• On your company’s website, an interactive platform has been created which allows any potential customer to raise queries
pertaining to our products and services. All our channels ensure that a potential customer with access to phone/internet is
able to engage, receive or share the desired information about our products and services.
• While there are no consumer related legal cases which are pending as at the end of the financial year, there are no customer
complaints pending for redressal.
• The products of your Company display all information which is mandated by law including the directions for use. Product
information is available in the Product Information Sheet that is available with the dealers of the Company and on the website
of the Company.
There are no cases filed by any stakeholder against the Company regarding unfair trade practices, irresponsible advertising and/or
anti-competitive behavior during the last five years.
The Marketing team of your Company both of Fertilizers as well as Chemicals are in continuous interaction with the end users of its
products and any suggestions from the customers are appropriately conveyed at the production level and wherever feasible is being
done.

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 MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Macro-economic review: 2019-20

Year 2019-20 was a difficult year for world economy with weak business environment prevailed for global demand, manufacturing
and trade. Global GDP growth at 2.9 per cent has remained slowest after global financial crises of 2009 and also dipped from 3.6
per cent in 2018-19 and 3.8 per cent in 2017-18. World economic growth has been largely impacted on account of protectionist
tendencies of China & USA and rising geo-political tensions between USA and Iran experienced during the year.
Under the influence of weakening global economic parameters, Indian economy also registered a slowdown in 2019-20 with GDP
growth falling from 6.8 per cent in 2018-19 to 5 per cent in 2019-20. A weak rural demand and the stress on the financial sector are
being cited as key contributing factors for the sluggish growth. At the same time, reduction in the current account deficit (CAD),
robust growth in Foreign Direct Investment (FDI) and acceleration of foreign exchange reserves indic ates a positivity of the
economy on the external front. With easing of crude prices, value of imports has contracted much sharply than exports, which
have helped in narrowing CAD. Having duly recognizing the financial stresses built up in the economy, the government has taken
significant steps in 2019-20 towards speeding up the insolvency resolution process under Insolvency and Bankruptcy Code (IBC)
and easing of credit, particularly for the stressed real-estate and non-banking financial companies (NBFCs). The measures taken
by government are well supported by an accommodative monetary policy, adjusting repo-rate to ease the credit flow in the
economy.
The measures announced/implemented in 2019-20 include hike in minimum support price of agricultural crops; reduction in
corporate tax rate; policy framework for development of textiles, handicrafts and electric vehicles; special programs for micro,
small and medium enterprises, incentives for start-ups in India etc. Apart from this, various steps were taken to boost manufacturing,
employment generation; financial inclusion; digital payments; improving ease of doing business via schemes such as Make in
India, Skill India and Direct Benefit Transfer etc.
The growth in agriculture, industry and service sector in terms of GVA (gross value added) is estimated to be 2.8 per cent, 2.5 per
cent and 6.9 per cent respectively in 2019-20, which is lower by 0.1 per cent, 4.4 per cent and 0.7 per cent over 2018-19.
Contribution of agriculture, Industry & Service sector in the overall economic growth in terms of GVA is registered at 16.5%, 28.2%
& 55.3% respectively.
Although overall growth in economy has slowed down, still India is recognized as a bright spot of the global economy. Country
witnessed its best phase of macro-economic stability in the recent years. From being 11th largest economy few years back, today
India has emerged as 5th largest economy in the world.
Indian Agriculture sector:
Agriculture is the primary source of livelihood for about 58% of the India’s population. It accounts for 16.5 per cent of the total GVA,
which comes to about `30.47 Lakh Crore in FY 2019-20. In spite of rapid development in non-agriculture sectors in India,
agriculture continues to be the main driver of the rural economy. Understanding this fact, the present government has prioritized
its efforts for growth in agriculture and initiated various special programmers for this sector include widening the irrigation base,
access to farm credit, food processing, integrated platform for output markets, mentoring agri-entrepreneurs, agriculture exports,
increased minimum support price (MSP), Transport and marketing assistance for farm produce, warehousing, cost of storages,
soil health cards, Fasal Bima Yojna to secure the farmers against natural calamities and other non-farm activities to support the
income of farmers.
Growth of agriculture & allied sectors has shown a marginal decline by 0.1 per cent during the year under review. It grew by 2.8%
in 2019-20 as compared to growth of 2.9 per cent witnessed in 2018-19. However, it is much below the targeted growth of 4%
pegged by government for agriculture sector. Having limited irrigation resource, performance of agriculture in India largely
depends on behavior of South west monsoon, in terms of overall rainfall quantum and its distribution over the monsoon season.
Monsoon season 2019 ended with i) higher precipitation by 10% over normal rains & ii) Prolonged rainy days by about 40 days,
up to Oct’19. Excessive rains caused flood like conditions in many states and damaged the standing Kharif crops. Extended
monsoon has coincided the harvest time of Kharif crops and impacted the yield as well as quality and market value of Kharif outputs
and also delayed the next crop cycle of Rabi crops considerably. The attack of locust in many states such as Punjab, Rajasthan,
and Gujarat etc. caused significant damage to the standing Rabi crops in many areas. Rabi season started with a happy note of
overall higher soil moisture status across the states due to excessive rains received in monsoon season and record reservoir
levels, promising for enhanced irrigation potential. Overall sowing area in agriculture year 2019-20 has been increased to 1725
Lakh Hectare, which is 2% higher over normal crop area coverage in the country during past years. In spite of having uneven
distribution of rains with excessive rains received in many states, country is likely to witness record food grain production of 296
million MT in 2019-20 season, higher by 3.7 per cent over 2018-19. However, from farmer’s perspective, because of various
reasons, they did not get remunerative prices for their crops and therefore, increased production could not help to lift their
economic conditions proportionately in true sense. Especially during Rabi season, the pandemic situa tion of Covid-19 has
coincided with Rabi harvest time, which has delayed the harvest of matured crops, deterioration of its quality and delayed sales in
mandis, hampering their cash flow severely. The disturbance in supply chain cycle during Covid 19 time has caused heavy loses
to the fruit and vegetable farmers.
Performance of Fertilizer Industry in India:
Year 2019-20 started with a prediction of better monsoon to prevail in the country & also it being election year, the political desire

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 MANAGEMENT DISCUSSION AND ANALYSIS REPORT (Contd.)

of the Government to ensure security of fertilizer supply in the country, promising for very good demand prospects to prevail for
fertilizer business. Although, overall rainfall has remained higher, its uneven distribution and prolonged period has impacted the
farm economy and cash cycle at grass root level. Therefore, in spite of increased area under sowing and better availability of
fertilizers, the real demand from farmer’s level has remained passive during the year. World prices of raw materials and also
finished fertilizers have declined consistently during the year 2019-20, which has prompted for higher domestic production and
also higher imports of fertilizers in the country.
Overall fertilizer production has increased to 426 Lakh MT in 2019-20, exhibiting growth of 3 % over 2018-19. Individually,
production of DAP has increased with a higher scale (17%) during the year.
Imports of fertilizers have rose moderately by 1% and reported as 184 Lakh MT in 2019-20. In fact imports of DAP & MOP have
reduced significantly, however, higher imports of Urea under Government account to the tune of 22% have largely contributed in
increase in overall fertilizer imports during 2019-20. With improved availability of fertilizers, market has remained saddled with
higher inventories throughout the year. Initially, up to mid-July’19, on account of deficit rains during early Kharif season, demand
of fertilizers has remained moderate. Subsequently in the later half, on account of excessive rains and prolonged monsoon period,
which has largely damaged Kharif harvest followed by unseasonal rains at the time of Rabi harvest and also the Covid-19 impact
at the fag end of the year has impacted the sentiments at farmer’s level considerably and hence although sowing area have
enhanced and selling prices of fertilizers are reduced, it has not converted into enhanced real demand for inputs like fertilizers at
farmer’s level during the agriculture year 2019-20.
Continuous decline in import prices have put a pressure on retail selling prices of Phosphatic fertilizers in India. Channels were
hopping further cut in prices with continued volatility in import prices and therefore, reluctant to hold higher stocks. Overall, selling
prices of Phosphatic fertilizers have declined by 15 - 20% during the year. Since raw materials are being procured in advance with
a time leg of 2-3 months, decline in import prices of finished fertilizers and thereby MRP in a continuous manner in India has
impacted the margins of domestic industry to considerable extent during 2019-20.
In order to facilitate the growing demand in the country, both production (2%) and Imports (22%) of Urea have been stepped up
in the country. In case of Phosphatic sector, production of DAP has increased by 17 % whereas, that of NPK products has
contracted marginally by 2 %. Imports of DAP has registered a decline of 22 % for want of adequate demand support in terms of
real sales pull from farmers. Imports of MOP in the country have registered a negative growth of 5%. Lower growth in NPK
production, decline in direct consumption of MOP in agriculture and maintaining status quo in its MRP vs. reduction made in
Phosphatic fertilizers during the year have contributed in overall reduction in MOP sales in the country.
As the agriculture year 2019-20 progressed, retail demand of fertilizer has picked up reasonably during latter half of the year,
which has helped in clearing the inventories lying unsold at retail level. PoS sales have picked up momentum which enabled
industry to avail subsidy under DBT scheme. The budgetary provisions made by Government of India for fertilizer subsidy were
inadequate and got exhausted in the early 2nd half of 2019-20, leading to financial stress at industry level. Lately Government has
taken the cognizance of this aspect and made special banking arrangement (SBA) to ease the situation to some extent.
Outbreak of Covid-19 since March-20 has disrupted production, imports and distribution of fertilizer in the country, which has
impacted the peak demand of fertilizers towards hot weather crop season and also advance stocking of fertilizers towards ensuing
Kharif season.
Overall, in spite of having very good monsoon and increased crop area in the country as well as lower fertilizer prices, demand of
fertilizers has remained passive from farmer’s level. Channels have all the time remained saddled with stocks and cash-flow as
well as margins of the industry has remained under pressure during the year.
GSFC’s Performance FY 2019-20 :
During 2019-20 although, country received excessive rains with prolonged period of monsoon, it could not help to rejuvenate the
real fertilizer demand in the market. Rather, enhanced period of monsoon has damaged the standing crops significantly, initially
during Kharif season, followed by delayed harvest and bringing the farm produce to market has disturbed the whole agriculture
cycle at farmers level. Excessive rains received in our home state of Gujarat and also in the states like Maharashtra, Rajasthan,
MP, Bihar, Karnataka, UP, constituting our major market segments have impacted the farm economy and hence affected demand
pull for inputs like fertilizers to considerable extent.
In spite of lacklustre demand prevailed in the fertilizer consumption during the FY 2019-20, your company could sell 24.67 Lakh MT
fertilizers, which is marginally lower by 4 % over 2018-19. Decline in aggregate fertilizer sales during the year under review is
largely attributed to lower availability of Urea through both production as well as Import handling on Government account at Rozi
Port.
With augmented availability of raw materials at better prices; availability of Phosphatic fertilizers through Sikka unit has enhanced
which in turn helped to increase the sales of Sikka products by 15 % over FY 2018-19. With increased production of DAP through
Sikka Unit, company has curtailed its imports drastically during the year. Accelerated availability of Ammonium Sulphate through
Baroda Unit has helped company to achieve record sales of Ammonium Sulphate to the tune of 4.39 Lakh MT during the year.
Similarly the sales of 3.47 Lakh MT Ammonium Phosphate Sulphate achieved in 2019-20 is also all time higher. For the first time
GSFC has ventured into Imports of MOP fertilizer and sold 0.89 Lakh MT quantities in various states of our operation, which

52 58TH ANNUAL REPORT 2019-20

 MANAGEMENT DISCUSSION AND ANALYSIS REPORT (Contd.)

accounts for 3% of the national consumption. Your company has imported new NPK grade – NPK 16:20:0:13 to cater the specific
demand of southern states, which has a growing consumption trend in such region. Also contemplating to commence commercial
production of NPK grade 16:16:16 from Kharif-20 season at Sikka unit, which will help in enhancing our product basket further in
NPK segment.
Gujarat is most economic market for GSFC, fetching highest margins in fertilizer business. We have enhanced contribution of
Gujarat in overall fertilizer business of company to 40 %, 1 % higher over 2018-19.
In order to strengthen the logistics operations, first time in the history, GSFC has started fertilizer movement in container load
through water ways from its Sikka Unit. This approach will also help in catering piece meal demand of individual products coming
forward through different coastal states of our operation.
With a view to improve the acceptability of Imported P&K fertilizers further, company has introduced packing of such products in
yellow coloured bags, which has been well received in the market.
Your company is taking up intensive promotional campaigns during Kharif and Rabi season which helps in furthering up our brand
values in the market.
Areas of concern:
Continuing Urea out of the NBS policy and keeping its MRP at quite low level v/s that of P&K fertilizers, resulting into excessive use
of Urea by the farmers, curtailing applications of P&K fertilizers and thereby impacting NPK ratio of the soil adversely and affecting
the soil productivity.
On account of India’s over reliance on imports for both, raw materials & also finished Phosphatic fertilizers and global suppliers are
by far common for both the category of imports; as far as competitiveness is concerned, domestic industry is always at
disadvantage vis-à-vis imported finished fertilizers. Therefore, Indian Phosphatic industry is unable to run their plants to full load
and about 40% capacity remains idle. Unless Government bridge this anomaly through imposing appropriate import duty on
imports of finished fertilizers, it will be difficult for Indian Phosphatic industry to sustain business viability in a long run.
Timely receipt of subsidy payments through Government is very important for sustaining financial health of the industry. However,
unfortunately, releasing payment of subsidy by Government gets inordinately delayed primarily because of under provisioning of
fertilizer subsidy amount in the union budget besides cumbersome procedures under DBT. Delays in subsidy payments entail to
liquidity crisis and higher borrowing cost at industry level.
Regulation of movement through supply plan limits the market development in various territories and results into inconsistent
presence in farther but important market segments.
GSFC’s higher dependence on imported raw materials, especially Phosphoric Acid (PA) for Sikka unit s ometime affect the
production of Phosphatic fertilizer over last few years. This constraint, however is mitigated partly through PA supplies gradually
getting channelized through our JV partner TIFERT besides supplementing DAP requirement through imports on need basis.
Recent Developments and outlook for 2020-21:
Pandemic situation developed under the influence of Covid-19 has a dip and long lasting impact on agriculture and food sector. Late
harvest of Rabi crops, its delayed procurement, disrupted supply chain for both supply of agri inputs to farmers and also bringing
farm harvest to market, non-availability of adequate laborers, and non-remunerative prices of farm produce in the open market etc.
has impacted the economics of the farming community adversely.
Operations of all the sectors of agri inputs, including Seeds, Agrochemicals, Fertilizers, Farm processing, farm machinery, Micro
irrigation, warehousing and cold storage, food retail, e-commerce etc. are badly affected under the control measures taken for
pandemic situation. As far as production is concerned, 15% capacity of Urea and half of the capacity of Phosphatic fertilizers
remained closed for almost 45 days. Even at plant level, bagging of fertilizers and its road-rail logistics has been slowed down for
want of labor force. Similarly, at ports, handling of imports and its further inland supplies have been affected to considerable extent
in absence of sufficient labors. Availability of adequate rail rakes has become critical on account of higher turnaround time of the
rakes due to labor crises faced under Covid situation. Distribution of stocks available at Plant, Port and in the field warehouses
could not reach to farmers as road transport services got crippled for more than two months. It being essential commodity,
distribution and selling of fertilizers was allowed to continue by government authorities through legal notifications, however, there
were various local hindrances on account of which practically, it remained standstill for more than a month’s time. On account of
restricted production/imports followed under present conditions, stock levels of P&K products have depleted fast in the market.
Further, under the fear of non-availability of fertilizer supplies in ensuing Kharif season, farmers have started stocking fertilizers
in advance, which may help to liquidate the back-log quantities lying unsold with the channels.
Bottlenecks of Direct benefit transfer (DBT) scheme of subsidy and the constraint of budgetary provisions of subsidy may
continue to impact the cash flow of fertilizer industry. Subsidy rates for P&K fertilizers are reduced in the range of 0.6 % on
Nitrogen, 2.2 % on Phosphorus and 9.1 % on Potash by Government of India for 2020-21.
Recent increase in the prices of Phosphoric acid, which is important raw material for manufacturing Phosphatic fertilizers will push
up the cost of production of such fertilizers further and widen the gap in the economics between manufactured and imported DAP.

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 MANAGEMENT DISCUSSION AND ANALYSIS REPORT (Contd.)

This phenomenon is expected to encourage higher imports in FY 2020-21. However, reduction in import prices of MOP will provide
leverage to NPK industries to some extent. The recent reform package announced by the Government worth ` 20,000 Lakh Crore,
has considerable cake for agriculture and allied sectors, which will help to fuel up rural demand, including that of fertilizers in 2020-
21.
India Meteorological Department (IMD) in its recent update on monsoon, predicted “Normal” rains in ensuing season, which is quite
encouraging and promises for better seasonal prospects to prevail in 2020-21. Selling prices of Phosphatic fertilizers are unlikely
to get improved in short run, during the 1st half of current financial year. Hike in minimum support prices (MSP) extended for Rabi
crops have given enhanced return to the farmers on their output to be marketed in current season and also the purchasing power
of farmers for procurement of inputs. Lately, procurement of Rabi harvest in respect of oilseeds, pulses, wheat has been
accelerated, which will support the farm incomes to considerable extent. Commission for Agriculture Costs and Prices (CACP)
has recommended higher support prices in the range of 2-13% for Kharif-20 season, which will encourage farmers for more
plantation Further, on account of having availability of higher irrigation potential, plantation of Summer crops has reached to record
level of 67 Lakh Hectare, 60% higher over normal area coverage, which will provide added breather to the farm sector. These
developments will support farm incomes and also salutary effect to ease the food price pressure.
Under the influence of Covid-19, economic growth in terms of overall GDP of the country is bound to get shrink to greater extent
in 2020-21. World Bank cut India’s growth forecast to 1.5-2.8% from earlier estimate of 6.1%. However, as per recent assessment
of NitiAyog, the country’s farm sector is poised to grow at 3% in 2020-21, despite disruption in overall economy due to Coronavirus
pandemic.
Overall, under the backdrop of bumper Rabi harvest, larger summer crop area and with prediction of better monsoon, outlook in
general for agriculture and in turn for the fertilizer industry looks good for 2020-21 as far as real demand is concerned.
Raw material prices:
The international prices of raw materials were having downward trend  during FY 2019–20 as compared to 2018–19. 
The average CFR prices of Phosphoric Acid (PA) which was USD 752 per ton during 2018–19 went downwards to USD 664 (11.70
%) per ton during 2019–20. 
The average prices of Ammonia decreased during 2019–20 as compared to 2018–19. The average CFR prices of Ammonia during
2018–19 was USD 322 per ton went down to USD 262 (18.63 %) per ton during 2019-20. On an average, there was 18.63 %
decrease in prices of Ammonia as compared to 2018–19.
The average CFR price of Rock Phosphate increased during 2019–20 as compared to 2018–19.  The average CFR price of Rock
Phosphate during 2018–19 was USD 85.58 per ton which went up to USD 94.61 (10.55%) per ton during 2019–20. On an average
there was 10.55% increase in price of Rock Phosphate compared to 2018–19.
The price of Sulphur decreased during 2019-20 as compared to 2018-19. The average CFR price of Sulphur during 2018-19 was
USD 154.06 per ton went down to USD 91 (40.93%) per ton during 2019-20.  On an average, there was 40.93% decrease in price
of Sulphur as compared to 2018-19.
Average price of Raw Material products ($ / MT)
Product 2018-19 2019-20 % Increase / Decrease
Phos. Acid (C & F) 752 664 (-)11.70
Ammonia (C & F) 322 262 (-)18.63
Rock Phosphate (C & F) 85.58 94.61 (+)10.55
Sulphur (C & F) 154.06 91 (-) 40.93
INDUSTRIAL PRODUCT SCENARIO:
The Financial year 2019-20 has witnessed series of events in terms of delayed but heavy rainfall, coupled with volatility in price of
crude oil, poor demand from Auto sector, depreciated Rupee against dollar and at the end of the financial year 2019-20, COVID-
19 pandemic across the globe.
The crude oil prices trajectory was impacted by the geo political tension between Saudi Arabia and Russia. The crude oil prices
were continued to fall from April 2019 to March 2020 by more than 50%. The price of petrochemicals also remained under pressure
due to poor demand, coupled with issues of trade war between USA and China which got further aggravated due to COVID-19
which started since Dec 2019.
The Indian automobile industry, the world’s fourth-largest, has finally embraced a slowdown after a near-decade of high growth.
During May 2019, the Society of Indian Automobile Manufacturers (SIAM) announced a 17 percent decline in passenger vehicle
sales for April 2019, the lowest in nearly eight years. According to the data available with SIAM, this is the 11th consecutive month
since July 2018 when car sales have shown a decline. The slowdown has forced production cuts by top automakers to streamline
their inventories. Overall Index of Industrial Production (IIP) data has been reported -0.7% during April to March of FY2019-20,
which was 3.8% during the corresponding period of FY2018-19.

54 58TH ANNUAL REPORT 2019-20

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As per the estimates, India’s estimated gross domestic product (GDP) for the fourth and final quarter of FY2019-20 fell to 3.1 per
cent. Data suggests that India’s GDP growth in FY2019-20 slowed down to an 11-year-low of 4.2 per cent.
Accordingly, the sales of Industrial products have been impacted during FY2019-20 in terms of prices down by more than 15% on
Year of Year basis for the products like Caprolactam and Nylon -6 Chips. The volumes were also gone down by 7% for Nylon -6
Chips and 11% for Caprolactam during FY2019-20. The oversupply of Caprolactam in international market has resulted into lower
price of Caprolactam globally.
The sales volume of Melamine has increased by 42% during FY2019-20 as compared to FY2018-19 due to the availability of
additional quantity from Melamine –III plant. Margin of Industrial products continued to remain under pressure during FY2019-20
due to poor demand, upward price movement of raw materials like benzene which has impacted the profitability of the Industrial
Products segment.
Global economic activity has come to a near standstill as COVID-19 related lockdowns and social distancing are imposed across
practically 188 No. of affected countries of the world. The outlook is now heavily contingent upon the intensity, spread and duration
of the pandemic.
1. FINANCIAL PERFORMANCE OF THE COMPANY DURING FY 2019-20:
Particulars Units 2018-19 2019-20 CHANGE CHANGE % REASON FOR CHANGE
Debtors’ Turnover Days 58.25 65.16 6.91 12% change < 25 %
Inventory Turnover Times 13.66 9.29 -4.37 -32% Stock Turnover reduced due
to lower sales and higher
fertilizers inventory.
Interest Coverage Times 14.99 3.74 -11.24 -75% Interest Cov erage ratio
Ratio dec lined due to higher
finance cost and lower profit.
Current Ratio Ratio 1.86 1.90 0.04 2% change < 25 %
Debt Equity Ratio Ratio 0.15 0.23 0.08 53% Debt Equity Ratio increased
due to lower equity and
inc reas ed short term
borrowings.
Operating Profit % 9.94 5.40 -4.54 -46% Profitability decreased due to
Margin lower margins of Industrial
Products and impact of
quadrennial wage revision.
Net Profit Margin % 5.76 1.30 -4.46 -77%
Return on Net Worth % 6.79 1.45 -5.34 -79%
Debtors’ Turnover Days 58.25 65.16 6.91 12% change < 25 %
Inventory Turnover Times 13.66 9.29 -4.37 -32% Stock Turnover reduced due
to lower sales and higher
fertilizers inventory.
Interest Coverage Times 14.99 3.74 -11.24 -75% Interest Cov erage ratio
Ratio dec lined due to higher
finance cost and lower profit.
Current Ratio Ratio 1.86 1.90 0.04 2% change < 25 %
Debt Equity Ratio Ratio 0.15 0.23 0.08 53% Debt Equity Ratio increased
due to lower equity and
inc reas ed short term
borrowings.
Operating Profit % 9.94 5.40 -4.54 -46% Profitability decreased due to
Margin lower margins of Industrial
Products and impact of
quadrennial wage revision.
Net Profit Margin % 5.76 1.30 -4.46 -77%
Return on Net Worth % 6.79 1.45 -5.34 -79%
*Based on 39,84,77,530 equity shares of Face value ` 2/- each
# Debtors’ Turnover is excluding subsidy income and receivables

58TH ANNUAL REPORT 2019-20 55

 MANAGEMENT DISCUSSION AND ANALYSIS REPORT (Contd.)

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

There exists a comprehensive system of internal controls in place. The internal auditors of the Company comprehensively
carry out their audit and their observations/audit queries are being discussed and debated at length by the Audit Committee.
The Audit Committee of the Company also reviews the follow-up actions in respect of the items which did not get closed and
seek explanation for the open items. The internal control system is so designed that a particular transaction gets filtered at
different levels so as to ensure that proper recording of such transaction takes place and no unscrupulous elements get into
the system. The Company uses the SAP platform where-in the roles, responsibilities and authorities are well defined and no
deviation is allowed without proper management approval.
2. TEN YEARS PRODUCT PERFORMANCE RECORD:
The last 10 years’ Product-wise performance years is given below:
Product-wise performance in terms of production and sales for the last ten years is given below:
PARTIC ULARS Unit 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11
PRODUCTION
FERTILIZERS MT 1665824 1733957 1678958 1507991 1491741 1385857 1423059 1436535 1470350 1556172
Ammonium Sulphate MT 445630 374720 372330 337370 334030 318680 306671 315145 298000 278470
Ammonium Sulphate
Phosphate MT 267140 291940 282360 313860 328430 337930 336340 294600 302800 280500
Di-Ammonium Phosphate M T 484720 459090 503830 411850 370200 314600 390300 424520 534100 706170
NPK MT 128120 193150 154220 38340 47650 15460 19520 10280 0 0
UREA MT 332705 405360 361181 406571 411431 399187 370228 391990 335450 291032
CAPROLACTAM MT 83093 91479 86662 86191 86297 89918 84856 83180 80503 79577
NYLON-6 MT 24296 23887 20215 17421 9885 9400 9751 9659 8914 9464
MELAMINE MT 29215 14161 15188 14886 15697 14284 14916 14001 15279 13938
ARGON ‘000NM3 3116 3574 3319 3549 3581 3611 3334 3458 3270 3327
MONOMER MT 1709 3993 3187 751 2281 3435 3227 3116 4287 4547
ACRYLIC SHEETS MT 0 0 10 0 122 79 780 566 876 721
ACRYLIC PELLETS MT 0 0 9 285 1346 969 1701 1974 2046 1710
NYLON FILAMENT YARN MT 0 0 811 4044 4219 3427 3643 3080 3910 4361
NYLON CHIPS MT 0 0 2749 6559 8397 9114 9219 6563 5103 5399
SALES
FERTILIZERS* MT 1682171 1598428 1604222 1412044 1434684 1320471 1383154 1395376 1441232 1571500
Ammonium Sulphate MT 441335 385952 360555 308214 329778 315926 309843 320007 302915 336988
Ammonium Sulphate
Phosphate MT 249482 293115 262134 299025 290107 334072 334193 335865 296470 304940
Di-Ammonium Phosphate M T 524410 399309 500999 417820 368874 302666 386585 431238 543699 707529
NPK MT 141409 184270 130194 35024 46558 14628 25811 3925 0 0
UREA MT 325536 366763 313448 360879 355402 353058 325051 343736 289678 249699
CAPROLACTAM* MT 58764 65596 63217 63101 66483 68901 65725 64728 63082 61770
NYLON-6 MT 23752 25311 22569 13697 9999 9701 9915 9732 8756 9623
MELAMINE MT 26234 13953 15298 15341 15096 14283 15378 14166 15283 13319
ARGON ‘000NM3 3099 3563  3317 3546 3599 3622 3313 3453 3272 3327
MONOMER* MT 2200 3989 3236 480 1947 2934 1316 2108 2036 2292
ACRYLIC SHEETS MT 0 0 76 91 112 122 707 678 726 728
ACRYLIC PELLETS MT 0 9 44 344 1365 984 1705 1978 1993 1855
NYLONE FILAMENT YARN M T 5 20 991 4309 2706 3233 3378 2924 3319 4033
NYLON CHIPS MT 0 146 3730 4296 6262 6514 6455 6331 5121 5251
*excluding captive consumption

56 58TH ANNUAL REPORT 2019-20

 MANAGEMENT DISCUSSION AND ANALYSIS REPORT (Contd.)

3. RISK MANAGEMENT:
Changes in Government policy, currency risk, fluctuation in input prices, increase in NG prices, insufficient availability of
natural gas and raw material in the international market will have an impact on Company’s profitability.
Market may experience frequent changes in the price of domestic Phosphatic Fertilizers depending upon the cost of
production of the manufacturers. The resistance from farming community has impacted demand. DAP sales was 111 Lakh
MT during 2010-11 which has gone down substantially during the subsequent years (74 Lakh MT during 2013-14, 76 Lac MT
in 2014-15 & 98 Lac MT in 2015-16). With sharp increase in NG price, prices of Phosphatic fertilizers would go up. In the
current scenario, good and widely distributed rainfall, smooth & comparatively cheaper availability of raw materials and timely
reimbursement of subsidy by the Govt. of India would be the prime catalysts for the Company to sustain its operations
profitably.
In the above likely scenario, the Company is focusing on the efficiency improvement with higher production levels, efficiencies
in raw material procurement, increased availability through imports, reduction in marketing & distribution costs, production of
various complex grades at Sikka and proper product/ segment strategies to maximize the sales to achieve better contribution
from its product basket.
To control the financial risks associated with the Foreign Exchange/ Currency rate movements and their impact on raw
material prices, the Company has put in place a sophisticated Foreign Exchange Risk Management System.
4. RESEARCH AND PROMOTIONAL ACTIVITIES:
Your company has a state-of-the-art soil testing laboratory equipped with high through-put machine i.e. ICP-OES with a
testing capacity of 1 Lac samples per annum. Over a period of time, this laboratory has analysed more than 1.47 million of
Soil samples across the state. With compilation of last 10 Years data, your company has developed GUJARAT SOIL ATLAS,
which has complete mapping of all Taluka of Gujarat with pictorial depiction of soil nutrient deficiency in all Taluka of the state.
Your company make use of the latest IT technology and with the available database; you have developed Software to
generate online Fertilizers recommendations for particular crops for all Taluka of Gujarat State. This software provides
options of THREE fertilizers packages to farmers along with cost benefit ratio. Your company promotes balanced fertilizer
usage which is environment friendly. With an endeavour to achieve prosperity for farmers on one hand and commitment for
improving the soil health, your company has been involved in organizing awareness campaigns not only in Gujarat but also
in Punjab, Haryana, Maharashtra & Rajasthan. The motive is to maintain and improve the soil fertility for future generations.
Your company is running round the year call centre (Toll free number-1800 123 5000) to support farmers in Hindi, Gujarati
and Marathi languages. The call centre not only provides answers to general issues but has the capacity to link farmers to
experts from Agricultural Universities as well.
Your Company is organizing regular & re-orientation Farm Youth Training Programs since 1986 in coordination with Agriculture
Universities of Gujarat to educate the young generation of Farming Community regarding latest agricultural technology and
also motivate them to adopt it for increasing farm productivity. It organizes four regular & one re-orientation Farm Youth
Training Programs every year to promote high-tech agri-concepts among the farmers, who are now decision makers.
Your company is publishing agricultural monthly magazine ‘KrishiJivan’ since 1968 in local language and in Hindi quarterly. It
has one of the highest circulations i.e. 50000 copies per issue. It provides latest agriculture information to farmers based on
scientific research of scientists of Agriculture Universities and acts as a link for transfer of technology from ‘Lab to Land’.
Your Company is concerned about the environment and ecological balance and in its endeavour it is contributing through tree
plantation, garden development & maintenance etc. with an objective to turn GSFC ‘Green to Greener’ and thus also
supporting the initiative of Govt. of Gujarat in this direction.
For encouraging urban population to increase greenery and maintaining the ecological balance, your Company sponsored
Fruit, Flower & Vegetable shows in association with Baroda AgriHorti Committee. It has participated in the competitions and
won accolades and appreciation and sales plants and Agro Inputs from “Kissan Suvidha Kendra”.
GSFC Agrotech Limited
GSFC AgroTech Ltd., a wholly owned subsidiary of GSFC was established in the year 2012 with the aim of providing single
stop solution to the farmers by providing reliable Agri-products at reasonable prices and promoting extension services either
directly or in association with Government. Today GATL is one of the pioneers in organized agri-input retail in India and its
services are synonymous with innovation and path breaking ventures in the agri-input industry.
GATL manages 285 plus retail outlets across the state of Gujarat and 11 in Rajasthan with a vision to expand its retail chain
to other states in the upcoming year. We take pride in the fact that we are the only agri-input company in India which has
deployed trained Agriculture Graduates / Post Graduates to manage its retail outlet.
We consider farmer as our partner and are committed to providing an assured supply of a comprehensive range of agri-
inputs to our customers. We have thus collaborated with leading agri-inputs companies National Seed Corporation, Pioneer,
Coromandel International, Indian Potash Limited, Kribhco, Rise N Shine, etc. to ensure the all-round availability of multi brand
products at our retail outlets.
Keeping in view the Government’s agenda of doubling farmer’s income, we have worked on price rationalization of our
products like WSF to offer best quality agri-inputs at most reasonable prices. Product innovation is yet another endeavour
at GATL. Keeping in view the best interest of the farmer, soil and environment, we are continuously involved in development
and launch of newer products and variants.

58TH ANNUAL REPORT 2019-20 57

 MANAGEMENT DISCUSSION AND ANALYSIS REPORT (Contd.)

With a commitment to serve the farmers, GATL is in constant touch with the latest technology and innovations. State-of-the-
art Tissue Culture lab which is certified by DBT (Department of Biotechnology, Government of India) has already developed
tissue culture protocols for over 10 varieties of fruits, flowers and commercial crops. We sell approximately 64 lakhs plants
annually in Gujarat and have also expanded our distribution network to other states.
GATL has also established itself as a trusted implementation partner with various departments of the Government of Gujarat
for its farmer welfare schemes. Projects worth ` 70 crore have been successfully implemented for the Department of
Agriculture & Tribal Development Department of Gujarat.
5. SAFETY, HEALTH AND ENVIRONMENT:
During the year under review, Health Safety Management System as well as elements of Process Safety Management were
strengthened both of which are the fundamental building block of Safety functionaries in any industry.
HAZOP studies have been conducted as necessitated by inviting external agencies. Facelift is provided to the modules of the
Contractors Safety and Visitors safety training topics. Focused Efforts have been pinned on trainings related to personal
protective equipment and basic fire prevention; utilization of fire extinguishers etc.
Safety and Fire Trainings have covered more than 4125 employees, Contractors and visitors during the last FY 19-20.
Public Awareness campaign was arranged for inhabitants of nearby villages in which more than 100 ladies participated and
absorbed the characteristics of Chemicals utilized in GSFC with the hazards and safety measures. Both manmade and
artificial disasters were covered and methods of mitigation were shared as a part of interactive sessions.
Plant shutdown and start up activities pose hazards that are different than operational plant hazards and therefore intensified
safety covers have been provided in a structured way, ensured right kind of hand tools, power tools, lifting tools and tackles
as well as material handling and shifting devices to ascertain robust safety during plant shut down and start up activities. Pre
Start up Safety Review and Non routine work permit as per checklist and in accordance with stipulations of SOPs have been
ensured. Personal protection often termed as the last line of defense has always been emphasized and ensured for
Employees, Contractors and Visitors.
Project commissioning work is going on for S90WDG which again has its own set of safety challenges. Adequate measures
have been taken to ensure safety during Construction, Mechanical and Electro-mechanical work by elevating the safety
measures and employing safety mechanisms utilized for project related works. Site Tool box talk, Use of certified tools and
tackles, Safety Supervision and capturing near miss are ensured
Measures have been put in place to impart mechanical turnaround to fire fighting vehicles and as such Fire tenders are quick
response vehicles can be used on the spur of the moment.
Safety measures to safeguard against COVID – 19:
Because of very nature of COVID-19; precautions are the key to safety.
GSFC Ltd, Vadodara, is committed to take care of employees, contractors and all stake holders.
Following preventive measures are being exercised at GSFC Vadodara:
• Sanitization Tunnel is made available at all the entry gates and it is ensured that the same is utilized cent percent.
• Sanitization and fumigation drives are being conducted on daily basis by the use of spray of recommended chemical as
per the correct ratio using Fire tenders.
• Face masks & hand gloves are distributed among all employees on a regular basis.
• All the entrants must necessarily pass through a Temperatures scan at the entrance gate of factory itself at all time.
• All employees have been made aware of maintaining social distance by way of drawn circles.
• Medical services are acting on proactive basis.
• Instructions of State and Central Government as well as advisories are being followed in toto.
• Circulars and precautions are being utilized as flyers for the sake of employees, Contractors and all stake holders.
• Cleanliness and Hygienic activities are being maintained in all plants and departments of GSFC Vadodara.
• Chewing of tobacco, spitting here and there attracts penalty and is punishable too in GSFC Vadodara.
• Non usage of Face mask is punitive in GSFC.
• A number of interactive programs have been arranged by HR and Safety on how to remain safe during COVID 19
pandemic.
• Employees, Contractors and other stake holders who have a travel history, need to obtain medical fitness certificate
before entering in GSFC Vadodara, been ensured. Personal protection often termed as the last line of defense has
always been emphasized and ensured for Employees, Contractors and Visitors.
6. HUMAN RESOURCES:
Shareholders are requested to refer to point 26 on page no. 26 of the Directors Report which forms part of the Annual Report.

For and on behalf of the Board

Sd/-
Place : Fertilizernagar Arvind Agarwal, IAS
Date : 02nd September, 2020 Chairman & Managing Director

58 58TH ANNUAL REPORT 2019-20

 MANAGEMENT DISCUSSION AND ANALYSIS REPORT (Contd.)

CAUTIONARY STATEMENT:
Some of the statements made in this “Management Discussion & Analysis Report” regarding the economic and financial conditions
and the results of operations of the Company, the Company’s objectives, expectations and predictions may be futuristic within the
meaning of applicable laws/regulations. These statements are based on assumptions and expectations of events that may or may
not materialize in the future.
The Company does not guarantee that the assumptions and expectations are accurate and/or will materialize. The Company does
not assume responsibility to publicly amend, modify or revise the statements made therein nor does it assume any liability for them.
Actual performance may vary substantially from those expressed in the foregoing statements. The investors’ are, therefore,
cautioned and are requested to take considered decisions with respect to these matters.
Data sources : Websites of (1) Ministry of Finance, Department of Economic Affairs, (2) Ministry of Fertilizers & Chemicals,
Department of Fertilizers, Govt. of India, (3) Central Statistical Bulletin, (4) FAI, New Delhi, (5) Economic Survey- 2018-19, (6)
Fertilizer Market Bulletins and (7) Ministry of Agriculture & Farmers’ Welfare, GoI. (7) Union Budget 2019-2020(8) India Meteorological
Department (IMD), Government of India.

58TH ANNUAL REPORT 2019-20 59

 CORPORATE GOVERNANCE REPORT

THE PHILOSOPHY
Corporate governance is about commitment to values and ethical business conduct by an organization. This includes its corporate
and other structures, its culture, policies and the manner in which it deals with various stakeholders. Timely and accurate
disclosure of information regarding the financial situation, performance, ownership and governance of the company is an integral
part of corporate governance. This enhances public understanding of the structure, activities and policies of an organization.
Consequently, the organization is able to attract and retain investors and enhance their trust and confidence.
We believe that sound corporate governance practice is critical for enhancing investors’ trust and seek to attain business goals
with integrity. Our Board exercises its fiduciary responsibilities in the widest sense of the term. Our disclosures always seek to
attain the best practices followed. We also endeavor to enhance Stakeholders’ value and respect minority rights in all our business
decisions with a long term perspective.
Our corporate governance philosophy is based on the following principles:
1. Satisfying the spirit of law and not just the letter of law.
2. Transparency and maintenance of a high degree of disclosure levels.
3. Make a clear distinction between personal conveniences and corporate resources.
4. Communicating effectively, in a truthful manner, about how the Company is run internally.
5. Comply with the Law of Land.
6. Having a simple and transparent corporate structure driven solely by business needs.
7. Firm belief that Management is the trustee of the shareholders’ capital and not the owner.
The Board of Directors (‘the Board’) is at the core of our corporate governance practice and oversees how the Management
serves and protects the long-term interests of all our Stakeholders. We believe that an active, well-informed and independent
Board is imperative for ensuring highest standards of corporate governance.
The Company is having an appropriately constituted Board, with each Director bringing in key expertise in their respective
professional arena. The Chairman of the Company is a Non-Executive Director. More than half of the Board consists of Independent
Directors. In fact, the Board of GSFC comprises of entirely non-executive Directors except the Chairman and Managing Director
(CMD), who is an Executive Director.
There is a proactive flow of information to the members of the Board and the Board Committees enabling discharge of fiduciary
duties effectively. The Company has full-fledged systems and processes in place for internal controls on all operations, risk
management and financial reporting. Providing of a timely and accurate disclosure of all material, o perational and financial
information to the stakeholders is a practice followed by the Company. The Company confirms to all the mandatory requirements
of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
All the Committees of the Board like Stakeholders Relationship Committee, Finance-cum-Audit Committee, Corporate Social
Responsibility Committee, Nomination and Remuneration Committee, Risk Management etc. that are constituted under the Code
of Corporate Governance, have been functioning effectively.
The Board of Directors of the Company has formally adopted the Code of Conduct way back at its Meeting held on 28-01-2005,
which has subsequently been updated to make them contemporary from time to time. The Code has been made applicable to the
Board of Directors and the Senior Officers of the Company, i.e. all the members of the Internal Management Committee of the
Company. The Code includes honesty and integrity in all the transactions concerning the Company, conflict of interest, insider
trading, protection of assets, communication, duties of independent directors etc. The Code of conduct is also available on the
website of the Company at www.gsfclimited.com. The Company firmly believes and accepts that this code of conduct cannot be
expected to remain static and therefore, it would need continuous improvisation as per moral, cultural and ethical sense of values
encountered by the Company with the passage of time. Needless to mention that the same also continues to get tested and
remains compliant from the Regulator point of view.
1 BOARD OF DIRECTORS
 COMPOSITION AND CATEGORY OF DIRECTORS :
The strength of the Board of Directors as on 31st March, 2020 was eight; its composition is tabulated below:
Sr. Name of Directors Category
No .
1 Shri Arvind Agarwal, IAS,
Chairman and Managing Director (w.e.f. 07.12.2019) Promoter, Executive Non Independent Non Rotational Director
2 Dr. J. N. Singh, IAS, Chairman (till 01.12.2019) Promoter, Non- Executive Non Independent Non Rotational Director
3 Shri Sujit Gulati, IAS, Managing Director (till 06.12.2019) Promoter, Executive Non Independent Non Rotational Director
4 Shri D.C. Anjaria Non Executive Independent Non Rotational Director
5 Prof. Vasant P. Gandhi
6 Shri Ajay N. Shah
7 Shri Vijai Kapoor
8 Smt. Geeta Goradia

60 58TH ANNUAL REPORT 2019-20

 CORPORATE GOVERNANCE REPORT (Contd.)

Sr. Name of Directors Category

No .
9 Shri Arvind Agarwal, IAS (till 06.12.2019) Non Executive, Non Independent Rotational Director
10 Shri Pankaj Joshi, IAS (w.e.f. 23.09.2019 to 16.12.2019)
11 Shri Pankaj Joshi, IAS (w.e.f. 21.12.2019)
12 Smt.Sunaina Tomar, IAS (w.e.f.04.01.2020)
Note : Shri Arvind Agarwal, IAS has been appointed as Chairman and Managing Director of the Company w.e.f. 07/12/2019
and hence his category has been changed from Director to Chairman and Managing Director.
In all, six meetings of the Board of Directors of the Company were held during the Financial Year 2019-20 as detailed below:
Sr. No. Dates of Board meeting Board strength No. of Directors present
1. 22/05/2019 8 5
2. 06/08/2019 8 8
3. 24/10/2019 9 8
4. 24/12/2019 7 5
5. 15/01/2020 8 7
6. 30/01/2020 8 6
Note: The gap between the two board meetings never exceeded 120 days.
The details relating to the names and categories of the Directors on the Board, their attendance during FY 2019-20 at the
Board Meetings and the 57th Annual General Meeting, their Chairmanship/ Membership in the Committees of other Companies
are given below:
Sr. Name Category No. of Equity No. of Attendance No. of other No. of Committees
No. shares of the Meetings at the last Directorships/ in which Chairman/
Company held attended AGM Memberships Member (Including
by him GSFC Ltd.)
Chairman(*) Member(*)

1 Shri Arvind Agarwal, IAS Promoter’s i.e. GOG - 3 - 5 - 1

Chairman and Managing Nominee Executive
Director Director
(w.e.f. 07.12.2019)
2 Dr. J. N. Singh, IAS Promoter’s i.e. GOG - 3 No 10 - -
Chairman Nominee Non-Executive
(till 01.12.2019) Director
3 Shri Sujit Gulati, IAS Promoter’s i.e. GOG - 3 Yes 6 - 1
Managing Director Nominee Non-Executive
(till 06.12.2019) Director
4 Shri D. C. Anjaria Non-Executive /
Independent Director - 6 Yes 6 2 -
5 Prof. Vasant P. Gandhi Non- Executive /
Independent Director - 5 Yes 3 2 2
6 Shri Ajay N. Shah Non- Executive /
Independent Director - 2 No 4 1 1
7 Shri Vijai Kapoor Non- Executive /
Independent Director - 6 No 2 - -
8 Smt. Geeta Goradia Non- Executive /
Independent Director - 4 Yes 4 - 4
9 Shri Pankaj Joshi, IAS Non Executive,
(w.e.f. 23.09.2019 to Non Independent
16.12.2019) Rotational Director - 1 No - - -
10 Shri Pankaj Joshi, IAS Non Executive,
(w.e.f. 21.12.2019) Non Independent
Rotational Director - 1 - 9 2 4
11 Smt. Sunaina Tomar, Non Executive,
IAS (w.e.f.04.01.2020) Non Independent
Rotational Director - 2 - 10 - -
12 Shri Arvind Agarwal, IAS Non- Executive/
(till. 06.12.2019) Non-Independent Director - 2 No 10 - 1

58TH ANNUAL REPORT 2019-20 61

 CORPORATE GOVERNANCE REPORT (Contd.)

(*) In accordance with Clause 26 of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, Membership/
Chairmanship of only the Audit Committee and Stakeholders Relationship Committee of all Public Limited Companies including
GSFC as on 31st March 2020 have been considered.
None of the Director is a member in more than ten Committees or is a Chairman in more than five committees, across all
Companies in which He/She is a Director.
Notes: (i) None of the Directors is inter se related to any other Director.
(ii) None of the Directors has any business relationship with the Company.
(iii) None of the Directors received any loans and advances from the Company during the year.
(iv) The Company has not issued any Convertible Instruments during the year
All Directors including independent directors meet with the requirements pertaining to the number of membership on the
Board as well as membership/ chairmanship of the Board level Committees.
 Details of Directorship in other Listed Entities as on March 31, 2020.
Name of Director Names of Listed Entity Category
Shri Arvind Agarwal Gujarat Narmada Valley Fertilizers & Non-executive & Non-Independent
Chemicals Limited
Shri D C Anjaria Ratnamani Metals and Tubes Ltd. Non-executive & Independent
Prof. Vasant Gandhi Advanta Limited Non-executive & Independent
UPL Limited Non-executive & Independent
Shri Vijai Kapoor — Non-executive & Independent
Shri Ajay Shah Britannia Industries Limited. Non-executive & Independent
Smt. Geeta Goradia Panasonic Energy India Company Limited. Non-executive & Independent
Transpek Industry Limited. Non-executive & Independent
Shri Pankaj Joshi Gujarat Alkalies & Chemicals Limited Non-executive & Non-Independent
Gujarat State Petronet Ltd Non-executive & Non-Independent
Smt. Sunaina Tomar Gujarat Industries Power Company Ltd. Non-executive & Chairman
Gujarat Gas Limited Non-executive & Non-Independent
Torrent Power Ltd. Non-executive & Non-Independent
Gujarat State Petronet Limited Non-executive & Non-Independent
The brief profile of directors forming part of Annual Report gives an insight into the education, expertise, skills and
experience of directors, thus bringing in diversity to the Board’s perspective. In terms of the requirement of the Listing
Regulations, the Board has identified the core skills/ expertise/ competencies of the Board in the c ontext of the
Company’s business for effective functioning and as available with the Board. These are as follows:
Financial Governance Corporate Business General
Name of Director
Management Practices Practices Strategy Management
Shri Arvind Agarwal     
Shri D C Anjaria     
Prof. Vasant Gandhi     
Shri Vijai Kapoor     
Shri Ajay Shah     
Smt. Geeta Goradia     
Shri Pankaj Joshi     
Smt. Sunaina Tomar     
 Disclosure regarding appointment/ re-appointment of Directors:
Shri Arvind Agarwal, IAS has been appointed as Chairman and Managing Director of the Company w.e.f. 07.12.2019 in
place of Dr. J. N. Singh, IAS Chairman (till 01.12.2019) and Shri Sujit Gulati, IAS, Managing Director of the Company (till
06.12.2019). Accordingly, the resolution relating to his appointment as Chairman and Managing Director of the Company
including approval of terms & conditions of appointment and particulars of remuneration and perquisites paid to Shri
Arvind Agarwal is placed for your approval.
Shri Pankaj Joshi, IAS was appointed as representative of Energy and Petrochemicals Department on the Board of the
Company w.e.f. 23.09.2019 to 16.12.2019 vice Shri Raj Gopal. He was then appointed as representative of Finance
Department to the Government of Gujarat on the Board of the Company and was appointed as rotational director in
place of Shri Arvind Agarwal, IAS, Director (as he was in his erstwhile capacity as representative of Finance Department
to the Government of Gujarat) of the company w.e.f. 21.12.2019.

62 58TH ANNUAL REPORT 2019-20

 CORPORATE GOVERNANCE REPORT (Contd.)

Smt. Sunaina Tomar, IAS has been appointed as a representative of Energy and Petrochemicals Department to the
Government of Gujarat on the Board of the Company and was appointed rotational director in place of Shri Pankaj Joshi,
IAS, Director of the Company w.e.f. 04.01.2020. Smt. Sunaina Tomar, IAS shall be liable to retire by rotation at the
ensuing Annual General Meeting, has offered herself for re-appointment.
The Board of Directors via circular resolution dated 02-09-2020 appointed;
(1) Shri Tapan Ray, DIN 00728682 as an additional director in the category of Independent Director of the Company
with effective from 02-09-2020 and subject to approval of shareholders of the Company, the term of appointment
of Shri Tapan Ray as an Independent Director of the Company shall be 5 (five) Years from the conclusion of 58th
Annual General Meeting till the conclusion of 63rd Annual General Meeting.
(2) Dr. Ravindra Dholakiya, DIN 00069396 as an additional director in the category of Independent Director of the
Company with effective from 02-09-2020 and subject to approval of shareholders of the Company, the term of
appointment of Shri Ravindra Dholakiya as an Independent Director of the Company shall be 5 (five) Years from
the conclusion of 58th Annual General Meeting till the conclusion of 63rd Annual General Meeting.
(3) Smt. Gauri Kumar DIN 01585999 as an additional director in the category of Independent Director of the Company
with effective from 02-09-2020 and subject to approval of shareholders of the Company, the term of appointment
of Smt. Gauri Kumar as an Independent Director of the Company shall be 5 (five) Years from the conclusion of
58th Annual General Meeting till the conclusion of 63rd Annual General Meeting.
(4) Dr. Sudhir Kumar Jain DIN 03646016 as an additional director in the category of Independent Director of the
Company with effective from 02-09-2020 and subject to approval of shareholders of the Company, the term of
appointment of Dr. Sudhir Kumar Jain as an Independent Director of the Company shall be 5 (five) Years from the
conclusion of 58th Annual General Meeting till the conclusion of 63rd Annual General Meeting.
The Board of Directors is of the opinion that Shri Tapan Ray, Shri Ravindra Dholakiya, Smt. Gauri Kumar and Dr. Sudhir
Kumar Jain are the persons of integrity with high level of ethical standards and they were holding senior positions in
other organizations, all the directors possess requisite expertise and experience for appointment as Independent
Director of the Company.
All the independent directors have submitted declarations that they meet the criteria of Independence as provided under
section 149 (6) of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of
Directors) Rules, 2014, as amended, the names of all the Independent Directors of the Company have been included
in the data bank maintained by the Indian Institute of Corporate Affairs.
The brief resume of Directors with regard to appointment/ re-appointment at 58th Annual General Meeting is annexed to
the Notice convening the 58th Annual General Meeting, which forms the integral part of this Annual Report.
A Certificate has been obtained from the Company Secretary in practice, confirming that non of the directors on the
Board of Directors of the Company have been debarred or disqualified from being appointed or continuing as director
of Companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs or any such other statutory
authorities. The Certificate of Shri Niraj Trivedi is forming part of this report.
 Code of Conduct :
The Company has laid down a Code of Conduct for all its Board Members and Senior Management Personnel to avoid
any conflict of interest. The confirmation of adherence to the Code of Conduct for the Financial Year 2019-20 in the form
of declaration is received from all the Directors and Members in the Senior Management of the Company, to whom such
code is applicable.
The Board of Directors have noted the adherence to the code of conduct. The Code of Conduct of the Company is
available on the Company’s web-site viz.
http://www.gsfclimited.com/statu_comp.asp?mnuid=12.
Availability of Information to the Board of Directors:
The Board of Directors of the Company is apprised of all the relevant and significant information and developments
pertaining to the Company’s business and this facilitates them to take timely corporate decisions. The comprehensive
management reporting systems are in place which encompass preparation and reporting of operating results by units or
say divisions, other business developments etc. Their reviews are being carried out by senior management and the Board
at its Meeting/s.
The Board of Directors have complete access to all the information that is within the Company. At the meetings of the
Board, the senior executives and if required, even functional Managers, who can provide insight into the agenda items,
are being invited.

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All the mandatory information that is required to be placed before the Board of Directors and as required under SEBI
(Listing Obligations & Disclosure Requirements) Regulations, 2015 are being placed before the Board of Directors
should the occasion arise.
Apart from the matters that require mandatory Board approval, following matters are also put up for information to the
Board, as and when the occasions arise:
1. Annual operating plans and budgets and any updates.
2. Capital budgets and any updates.
3. Quarterly results for the company and its operating divisions or business segments.
4. Minutes of meetings of audit committee and other committees of the board.
5. The information on recruitment and remuneration of senior officers just below the board level, including appointment
or removal of Chief Financial Officer and the Company Secretary.
6. Show cause, demand, prosecution notices and penalty notices which are materially important.
7. Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems.
8. Any material default in financial obligations to and by the company, or substantial non-payment for goods sold by
the company.
9. Any issue, which involves possible public or product liability claims of substantial nature, including any judgement
or order which, may have passed strictures on the conduct of the company or taken an adverse view regarding
another enterprise that can have negative implications on the company.
10. Details of any joint venture or collaboration agreement.
11. Transactions that involve substantial payment towards goodwill, brand equity, or intellectual property.
12. Significant labour problems and their proposed solutions. Any significant development in Human Resources/
Industrial Relations front like signing of wage agreement, implementation of Voluntary Retirement Scheme etc.
13. Sale of material nature, of investments, subsidiaries, assets, which is not in normal course of business.
14. Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse
exchange rate movement, if material.
15. Non-compliance of any regulatory, statutory or listing requirements and shareholders service such as non-
payment of dividend, delay in share transfer etc.
A Certificate of Compliance with all the applicable laws to the Company is being placed before the Board at its every
meeting.
 MANAGERIAL REMUNERATION
Remuneration to the Non-executive Directors:
Directors (except Managing Director - Executive Director) are paid sitting fees for attending Board/ Committee Meetings
and no commission/ share of profit is paid to them. The details of sitting fees paid to them for attending Board/ Committee
Meetings during the year are as follows:
(Amount in Rupees)
Name Sitting Fees
Dr. J. N. Singh, IAS 40,000/-*
Shri D.C. Anjaria 2,10,000/-
Prof. Vasant P. Gandhi 2,40,000/-
Shri Ajay N. Shah 40,000/-
Shri Vijai Kapoor 90,000/-
Smt. Geeta Goradia 1,70,000/-
Shri Arvind Agarwal, IAS 30,000/-*
Shri Pankaj Joshi, IAS 40,000/-*
Smt. Sunaina Tomar, IAS 30,000/-*
(*) Deposited in the Govt. Treasury.
The Company pays sitting fee @ `10, 000/- per meeting to the Directors. No sitting fee however is being paid to
Managing Director.

64 58TH ANNUAL REPORT 2019-20

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Remuneration to the Executive Director:

Managing Director-
The Managing Director of the Company is appointed from amongst the Directors nominated by the Government of
Gujarat, who is a Senior Officer of Indian Administrative Service (IAS Cadre). He is being paid the remuneration
applicable to his scale in the Government and in line with the terms & conditions prescribed by the Govt. of Gujarat. The
remuneration to the Whole Time Director and other Non-Executive Directors of the Company, if any, is decided by the
Board upon recommendation by the Nomination & Remuneration Committee. The details of the remuneration paid to the
Directors during the financial year 2019-20 are as under:
Name of MD Salary & Perquisites
Shri Sujit Gulati, IAS Managing Director ( till 06-12-2019) ` 27.09 Lakhs
Shri Arvind Agarwal, IAS Chairman and Managing Director (w.e.f.07.12.2019) ` 12.95 Lakhs
The Company currently does not have any Stock Option Plan in place. All the Directors have been reimbursed
expenses incurred by them in discharge of their duties. There are no payments made to a Director in his individual
capacity or to his relatives, and should there be an instance of such payment, the same would have been appropriately
disclosed. However, none of these Directors has any material pecuniary relationship or transactions with the Company,
its promoters, its Directors, its senior management or its holding Company, its subsidiaries and associates which may
affect their independence. The Company has not entered into any materially significant transaction with Promoters,
Directors or their relatives or its management or subsidiary that may have potential conflict with the interests of the
Company.
COMMITTEES OF THE BOARD:
2 AUDIT COMMITTEE:
The Finance-cum-Audit Committee presently comprises of four Directors and majority of them are Independent and all are
Non-Executive Directors. All the members of the Committee have wide knowledge and experience in the field of Corporate
Finance and Accounts. The Committee is governed by a charter which is in line with the regulatory requirements mandated
by the Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligation & Disclosure Requirements), Regulations, 2015.
The Company has systems and procedures in place to ensure that the Audit Committee mandatorily reviews:
1. Management discussion and analysis of financial condition and results of operations.
2. Statement of significant related party transactions (as defined by the Audit Committee), submitted by the Management.
3. Management letters / letters of internal control weaknesses issued by the statutory auditors.
4. Internal audit reports relating to internal control weaknesses.
5. The appointment, removal and terms of remuneration of the Chief Internal Auditor.
The terms of reference of this Committee include matters specified in the Companies Act, 2013, Rules and Listing regulations
and those specified by the Board in writing. Besides having access to all required information within the Company, the
Committee may investigate any activity within its terms of reference, seek information from any employee, secure attendance
of outsiders with relevant expertise, obtain legal or other professional advice from external sources, whenever required.
The Committee acts as a link amongst the Management, Auditors and the Board of Directors. The Audit Committee shall act
in accordance with the terms of reference which shall, inter alia, include:
1. Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that the
financial statement is correct, sufficient and credible;
2. Recommendation for appointment, remuneration and terms of appointment of auditors of the Company;
3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors;
4. Reviewing, with the Management, the annual financial statements and auditor’s report thereon before submission to the
Board for approval, with particular reference to:
a) Matters, required to be included in the Director’s Responsibility Statement.
b) Changes, if any, in accounting policies and practices and reasons for the same.
c) Major accounting entries involving estimates based on the exercise of judgment by Management.
d) Significant adjustments made in the financial statements arising out of audit findings.
e) Compliance with listing and other legal requirements relating to financial statement.
f) Disclosure of any related party transactions.
g) Qualifications in the draft audit report.
5. Reviewing, with the Management, the quarterly financial statements before submission to the Board for approval;
6. Reviewing, with the Management, the statement of uses / application of funds raised through an issue (public issue,
rights issue, preferential issue, etc.), the statement of funds utilised for purposes other than those stated in the offer

58TH ANNUAL REPORT 2019-20 65

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document/ prospectus/ notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds
of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
7. Review and monitor the auditor’s independence and performance and effectiveness of audit process;
8. Approval or any subsequent modification of transactions of the Company with related parties;
9. Scrutiny of inter-corporate loans and investments;
10. Valuation of undertakings or assets of the Company, wherever it is necessary;
11. Evaluation of internal financial controls and risk management systems;
12. Reviewing, with the Management, performance of statutory and internal auditors, adequacy of the internal control
systems;
13. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing
and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;
14. Discussion with internal auditors of any significant findings and follow up thereon;
15. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud
or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;
16. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-
audit discussion to ascertain any area of concern;
17. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in
case of non-payment of declared dividends) and creditors;
18. To review the functioning of the Vigil/Whistle Blower Mechanism;
19. Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function
or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;
20. Carrying out any other function as is included in the terms of reference of the Audit Committee.
21. Reviewing the utilization of loans and/or advances from/ investment by the holding company in the subsidiary exceeding
rupees 100 crore or 10% of the asset size of the subsidiary, whichever is lower including existing loans/ advances/
investments existing as on 01.04.2020.
During the Financial Year 2019-20, five meetings of Finance-cum-Audit Committee were held i.e. on 21-05-2019, 05-08-
2019, 24-10-2019, 30-01-2020 and 27-02-2020. The Composition of the Audit Committee and the attendance details are as
under:
Sr. Name of the Member Category No. of meetings No. of
No. held during the meetings
tenure of Directors attended
1 Shri D.C. Anjaria Independent Non-Executive 5 5
(Chairman of the Committee)
2 Prof. Vasant P. Gandhi Independent Non-Executive 5 5
3 Shri Ajay N. Shah Independent Non-Executive 5 1
4 Smt. Geeta Goradia Independent Non-Executive 5 5
5 Shri Arvind Agarwal Non-Independent Non-Executive 3 0
(As Member of the Committee
till 06.12.2019)
The Finance - cum - Audit Committee meetings are usually attended by the Head of Finance Dept. Managing Director is also
invited to attend the meetings as a Special Invitee. The Internal Auditors, Statutory Auditors, Cost Auditors and Branch
Auditors are invited to attend the meetings as and when required. The Company Secretary acts as Secretary to the
Committee.
Shri D. C. Anjaria, Chairman of the Finance-cum-Audit Committee remained present at the last i.e. 57 th Annual General
Meeting held on 27-09-2019.
3 STAKEHOLDERS RELATIONSHIP COMMITTEE
Pursuant to provisions of Section 178(5) of the Companies Act, 2013 and Listing Regulations, Stakeholders Relationship
Committee of the Board comprises of Prof. Vasant Gandhi, Chairman of the Committee, Smt. Geeta Goradia, Shri Arvind
Agarwal and Shri Sujit Gulati (till 06-12-2019) as on 31.03.2020. Shri V V Vachhrajani, Company Secretary & Sr. Vice
President (Legal) is the Compliance Officer for complying with requirements of Securities Laws and Listing Regulations with
Stock Exchanges.
During the FY 2019-20, four meetings of the Committee were held i.e. on 22-05-2019, 05-08-2019, 24-10-2019, and 30-01-
2020. The details of Committee members and their attendance at the Committee meetings during the Financial Year 2019-20
are furnished below:

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 CORPORATE GOVERNANCE REPORT (Contd.)

Sr. Name of the Members No. of meetings held during No. of Meetings
No the tenure of Directors Attended

1 Prof. Vasant P. Gandhi 4 3

2 Smt. Geeta Goradia 4 4
3 Shri Sujit Gulati IAS (till 06-12-2019) 3 3
4 Shri Arvind Agarwal, IAS
(w.e.f. 07-12-2019 appointment as
Chairman and Managing Director) 1 1
As a measure of good Corporate Governance and accepting the shareholders as its esteemed customers, the Company
has well designed Investors’ Grievance Redressal System. The average time taken for the grievance redressal is very less
and the Committee monitors the investors’ grievance redressal periodically. On the date of this report there are no complaints
pending, which need redressal from Company’s side. Also there are no cases of share transfers pending except those which
are under sellers’ notice/court cases under injunction order etc.
With a view to facilitating and ensuring timely transfer, transmission, transposition etc., the Board of Directors has delegated
the authority in favor of the Company Secretary/ Dy. Company Secretary upto 5000 shares of ` 2/- each per transfer
request and the authority for approval of more than 5000 shares of ` 2/- each per transfer request has been delegated to
the Managing Director.
The report on various issues concerning the shareholders such as issue of share certificates, redressal of shareholders’
complaints etc. is being periodically placed before the Committee.
The jurisdiction/terms of reference of the Committee encompass the following areas:
 Timely transfer of Shares and Debentures.
 Dematerialization and/or Rematerialization of shares.
 Transmission of Shares/ Deletion of Name in case of death of the shareholder/s.
 Issue of duplicate shares/debentures Certificates in case of lost / misplaced/ torn/ mutilated ones.
 Timely redressal of complaints pertaining to non-receipt of dividends, interests on debentures, redemption amount of
Non Convertible Debentures / Partly Convertible Debentures redeemed etc.
 Any other related issue/s.
 Resolving the grievances of the security holders of the listed entity including complaints related to transfer/transmission
of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general
meetings etc.
 Review of measures taken for effective exercise of voting rights by shareholders.
 Review of adherence to the service standards adopted by the listed entity in respect of various services being rendered
by the Registrar & Share Transfer Agent.
 Review of the various measures and initiatives taken by the listed entity for reducing the quantum of unclaimed
dividends and ensuring timely receipt of dividend warrants/annual reports/statutory notices by the shareholders of the
company.
All the shares received for Transfer/ Transmission/ Transposition/ Split/ Consolidation etc. are processed and dispatched
within the period not exceeding fifteen days and a half-yearly Certificate from a Practicing Company Secretary to that effect
is being obtained pursuant to Listing Regulations.
The following table highlights the details of the complaints received during the F.Y. 2019-20 and their status as on date. It is
further reported that as on 31-03-2020, there are no outstanding complaints pertaining to and received during the F.Y. 2019-
20:
(a) No. of complaints received from Shareholders/ Investors during the financial year 2019-2020. 40
(b) No. of complaints not redressed to the satisfaction of shareholders / investors. Nil
(c ) No. of applications received for transfers/ transmissions /transposition/deletion of shares during the
financial year 2019-20. (IEPF 968 TM cases) 1338
(d) No. of pending requests for share transfers, transmissions and transposition of shares as on 31-03-2020. Nil
As mandated by SEBI, the Quarterly Reconciliation of share capital Audit, highlighting the reconciliation of total admitted
capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) vis-a-vis
the total issued and listed capital is being carried out by the Practicing Company Secretary. This Audit confirms that the total
issued and paid up capital is in agreement with the total number of shares in physical form and the total number of
dematerialized shares held with the two depositories viz. the NSDL and CDSL.
As on 31st March, 2020 total 39, 02, 54, 037 Equity Shares of ` 2/- each representing 97.94% of the total no. of Shares were
dematerialized.

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 CORPORATE GOVERNANCE REPORT (Contd.)

4 CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

Pursuant to provisions of Section 135 of the Companies Act, 2013, Corporate Social Responsibility Committee of the Board
consists of following members as on 31.03.2020:
 Shri Arvind Agarwal – (w.e.f.07.12.2019) Chairman, Non-Independent & Executive Director
 Shri D C Anjaria – Member - Independent & Non-executive Director
 Smt. Geeta Goradia – Member - Independent & Non-executive Director
 Shri Pankaj Joshi – (w.e.f. 21-12-2019) Non-Independent, Non-Executive Director
 Smt. Sunaina Tomar – (w.e.f. 04-01-2020) Non-Independent, Non-Executive Director
The Members of the CSR Committee approved CSR spending for the FY 19-20 on 26.03.2020. No physical meeting were
held during the year under review in view of pandemic COVID-19.
The details of CSR Activities in the prescribed format forms the part of Directors’ Report to shareholders.
5 NOMINATION AND REMUNERATION COMMITTEE:
Pursuant to provisions of Section 178 of the Companies Act, 2013 read with Listing Regulation, ‘Nomination and Remuneration
Committee’ of the Board consists of following members as on 31.03.2020:
(1) Shri D. C. Anjaria, Chairman – Independent & Non-executive Director,
(2) Prof. Vasant Gandhi, Member – Independent & Non-executive Director,
(3) Smt. Geeta Goradia, Member – Independent & Non-executive Director,
(4) Shri Arvind Agarwal, Member – Non-Independent & Non-executive Director, (till 06.12.2019)
(5) Shri Pankaj Joshi, Member-Non Independent & Non-executive Director, (w.e.f. 21.12.2019)
(6) Smt. Sunaina Tomar, Member- Non Independent & Non executive Director, (w.e.f.04.01.2020)
(6) Shri Arvind Agarwal, Special Invitee-Non Independent & Executive Director, (w.e.f. 07.12.2019)
(7) Shri Sujit Gulati – Special Invitee –Non-Independent & Executive Director, (till 06.12.2019)
During the FY 2019-20, three meetings of the Committee were held i.e. on 21-05-2019, 24-12-2019, and 15-01-2020.
The details of Committee members and their attendance at the Committee meetings during the Financial Year 2019-20 are
furnished below:
Sr. Name of the Members No. of meetings held during No. of Meetings
No. the tenure of Directors Attended
1 Shri D C Anjaria(Chairman of the Committee) 3 3
2 Prof. Vasant Gandhi 3 3
3 Smt. Geeta Goradia 3 1
4 Shri Arvind Agarwal, IAS (w.e.f. 04-06-2018) 3 2
5 Shri Pankaj Joshi, IAS (w.e.f. 21.12.2019) 1 1
6 Smt. Sunaina Tomar, IAS(w.e.f.04.01.2020) 1 1
7 Shri Sujit Gulati, IAS (till 06.12.2019) 1 1
Besides having access to all required information within the Company, the Committee may investigate any activity within its
terms of reference, seek information from any employee, secure attendance of outsiders with relevant expertise, or obtain
legal or other professional advice from external sources, whenever required. The Committee acts as a link amongst the
Management and the Board of Directors. The Committee shall act in accordance with the terms of reference which shall, inter
alia, include:
i. Formulation of the criteria for determining qualifications, positive attributes and independence of a Director and recommend
to the Board a policy, relating to the remuneration of the Directors, key managerial personnel and other employees;
ii. Formulation of criteria for evaluation of Independent Directors and the Board;
iii. Devising a policy on Board diversity;
iv. Identifying persons who are qualified to become Directors and who may be appointed in Senior Management in
accordance with the criteria laid down, and recommend to the Board their appointment and removal;
v. Evaluation of every Director’s performance.
vi. Recommend to the board, all remuneration, in whatever form, payable to senior management.
The Policy on Nomination & Remuneration cum Board Diversity as approved is available at the website of the Company at
http://www.gsfclimited.com/statu_comp.asp?mnuid=12.
 Criteria for Nomination as per Nomination and Remuneration Policy:

68 58TH ANNUAL REPORT 2019-20

 CORPORATE GOVERNANCE REPORT (Contd.)

The Committee shall follow the procedure mentioned below for appointment of Director, Independent Director, KMP and
Senior Management Personnel and recommend their appointments to the Board.
• The Committee shall consider the ethical standards of integrity and probity, qualification, expertise and experience
of the person for appointment as Director, KMP or at Senior Management level and accordingly recommend to the
Board his / her appointment.
• The Company should ensure that the person so appointed as Director/ Independent Director/ KMP/ Senior
Management Personnel shall not be disqualified under the Act, rules made there under, Listing Agreement or any
other enactment for the time being in force.
• In case of the appointment of Independent Director, Independent Director should comply with the additional criteria
of his / her independence as prescribed under the Act, rules framed there under and the Listing Agreement. For
selection of Independent Director, the Company may use the data bank containing names, addresses and
qualifications of persons who are eligible and willing to act as independent directors, maintained by anybody,
institute or association, as may be notified by the Central Government, having expertise in creation and maintenance
of such data bank.
• The Director/ Independent Director/ KMP/ Senior Management Personnel shall be appointed as per the procedure
laid down under the provisions of the Companies Act, 2013, rules made there under, Listing Agreement or any
other enactment for the time being in force.
I. REMUNERATION:
The Committee will recommend the remuneration to be paid to the Managing Director, Whole-time Director, KMP and
Senior Management Personnel to the Board for their approval. The Committee shall ensure that:
• The level and composition of remuneration so determined shall be reasonable and sufficient to attract, retain and
motivate Directors, Key Managerial Personnel and Senior Management of the quality required to run the company
successfully;
• The relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
• Remuneration to Directors, KMP and Senior Management Personnel involves a balance between fixed and
incentive pay reflecting short and long-term performance objectives appropriate to the working of the company
and its goals.
A. Managing Director/ Whole-time Director(s):
Besides the above criteria, the Remuneration/ compensation/ commission etc to be paid to Managing Director, Whole-
time Director(s) etc shall be governed as per provisions of the Act read with Schedule V and rules made there under or
any other enactment for the time being in force.
B. Non-Executive Independent Directors:
The Non-Executive Independent Directors may receive remuneration by way of sitting fees for attending meetings of
Board or Committee thereof, reimbursement of expenses for participation in the Board and other meetings and profit
related commission if so decided and approved by the Board/ Shareholders as per the provisions of the Act.
Provided that the amount of such fees shall not exceed the amount as prescribed under the Act read with the rules
made there under or any other enactment for the time being in force. Further, independent director shall not be entitled
to any stock option.
The Non-Executive Independent Directors may be paid remuneration for services rendered in any other capacity, like
to serve as a member of Selection Committee for recruitment of Senior Management Personnel and/or any other
specific assignment given by the Company from time to time. The remuneration paid for such services shall be subject
to provisions of the Act and approval of the Nomination-cum-Remuneration Committee.
Provided that the payment of remuneration for services rendered by any such Director in other capacity shall not be
included in the overall ceiling prescribed under the Act read with Schedule V and rules made there under, if –
(a) The services rendered are of a professional nature; and
(b) In the opinion of the Committee, the director possesses the requisite qualification for the practice of the profession.
C. KMPs/ Senior Management Personnel etc.:
The Remuneration to be paid to KMPs/ Senior Management Personnel shall be based on the experience, qualification
and expertise of the related personnel and governed by the limits, if any, prescribed under the Companies Act, 2013 and
rules made there under or any other enactment for the time being in force.
The requisite information as required in terms of provisions of Section 197 of the Companies Act, 2013 read with Rule
5 of Companies Rules, 2014 are mentioned below:
a. The ratio of the remuneration of each director to the median remuneration of the employees of the company for the
financial year;
Submission: Not applicable, as the Directors are not paid any salary.

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b. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer,
Company Secretary or Manager, if any, in the financial year;
Submission: 5% for Grade II, 6% for Grade IC & ID and 7% for Grade  IB and above rise in basic pay of all
officers in the company in the financial year.
c. The percentage increase in the median remuneration of employees in the financial year;
Submission: 5% for Grade II, 6% for Grade IC & ID and 7% for Grade  IB and above rise in basic pay of all
officers in the company in the financial year.
d. The number of permanent employees on the rolls of company;
Submission: 3033 permanent employees are on the rolls of the company. (i.e. Vadodara Unit as on 31/03/
2020).
e. Average percentile increase already made in the salaries of employees other than the managerial personnel in the
last financial year and its comparison with the percentile increase in the managerial remuneration and justification
thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;
Submission:5% for Grade II, 6% for Grade IC & ID and 7% for Grade  IB and above rise in basic pay of all
officers in the company in the financial year.
f. Affirmation that the remuneration is as per the remuneration policy of the company.
Submission: Yes
The details as required under Section 197 read with Rule 5(3) of Companies (Payment and Remuneration of Managerial
Personnel) Rules, 2014 is provided below and records thereof are also available for inspection at the Registered Office
of the Company on any working day during business hours. All the below mentioned employees are permanent
employees and none of them are holding any equity shares of the Company and also that none of them are relative of
the Directors.
SN Name Position & Department Grade Date Of Date Of Birth Qualification Age Experience Prev.
Joining Yrs. Exp.
1 Vishvesh ED(Finance) & CFO, 0E 21/03/2002 13/05/1964 B. Com., Cost 56 17 13
Dineshchandra Finance Department Accountant (ICWA),
Nanavaty Chartered Accountant
(CA), Comp Secretary
(CS)
2 Vishvesh CS & Senior vice President 1A 01/10/2013 01/10/1969 B. COM., Co. 50 5.7 22
Vyomesh (Legal), Secretarial & Legal Secretary, L.L.B.
Vachhrajani Department
3 Surendra Prasad ED (Agri Business) 0E 31/03/2014 01/06/1962 M.SC. Agronomy , 58 6 27
Yadav M.B.A. Marketing
4 Mukeshkumar Vice President (FMU) 1B 12/12/2014 01/03/1961 M.B.B.S. , M.D. 59 5 19
Dahyalal Patel Medicine
5 Gopal Ambalal VP (Mechanical) 1B 11/04/1988 01/09/1962 New S.S.C. Science , 58 32
Patel DIP Mechanical
Mathematics , B.E.
Mechanical
6 Dilipkumar ED(OP-II) 0E 19/12/1986 12/01/1962 B.E. Chemical , 58 32 0
Bhikhabhai Shah P.G.Diploma Finance
Mgt , P.G.Diploma
Management
7 Bimal Bhupatbhai ED(OP-I) 0E 28/01/1986 19/09/1962 H.S.C.(10 + 2) 58 34
Bhayani Chem/Physics , B.E.
Chemical Engg , Cert.
Course Computer
Progm
8 Ashok Kumar SVP (IP) 1A 01/09/1986 29/05/1963 High School 57 33
Jauhari Mathematics, B. SC.
Chem/Physics,
B.Tech. Plastics ,
P.G.Diploma Mktg&
Sales Mgt

70 58TH ANNUAL REPORT 2019-20

 CORPORATE GOVERNANCE REPORT (Contd.)

9 Milind VP (I&M BUREAU)&DY MR 1B 27/01/1985 11/11/1959 M.Tech Chem 61 34

Madhusudan
Tare
10 Sharad VP (Inst BU & PU) 1B 01/03/1983 20/08/1959 B.E.Inst.& Control 61 36
Chandrakant
Bhatt
If employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less
than one crore and two Lakh rupees.
Submission: Nil
If employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the
aggregate, was not less than eight Lakh fifty thousand rupees per month.
Submission: Nil
If employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate,
or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time
director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the
equity shares of the company.
Submission: Number of employees received remuneration in excess of that drawn by the managing director, in the
aggregate -Nil
 Performance evaluation:
Pursuant to the provisions of the Companies Act, 2013 and the Listing Agreement, the Board has carried out the annual
performance evaluation of its own performance, the directors individually as well as the evaluation of its committees.
The performance evaluation of the Independent directors was carried out by the entire board. The performance
evaluation of the chairman and the non independent directors was carried out by the independent directors.
6 RISK MANAGEMENT COMMITTEE:
Business Risk and Management is an ongoing process within the organization. The Company has a risk management
framework to identify, monitor and minimize risks as also identify business opportunities.
Within its overall scope as aforesaid, the Committee shall review risks trends, exposure, potential impact analysis and
mitigation plan. The Board has voluntarily constituted the Risk Management Committee which have delegated the monitoring
and reviewing of the risk management plan to the Committee and such other functions as it may deem fit.
The Objective and scope of the Risk Management Committee broadly comprises:
 Oversight of risk management performed by the executive management;
 Reviewing the BRM policy and framework in line with local legal requirements and SEBI guidelines;
 Reviewing risks and evaluate treatment including initiating mitigation and reporting of risks.
Effective from 01-04-2019 the recommendations of the Kotak Committee have become applicable to the Company and
accordingly, the Company should have a policy on Risk Management including Cyber Security in place and at the same time
it is also to be decided by the Board about the periodicity of reporting on the Risk Management and Cyber Security. The Policy
on Risk Management was approved by the Board of Directors upon recommendation by the Risk Management Committee.
During the year 2019-20, meeting of Risk Management Committee was held on 21.03.2020.
The details of Committee members and their attendance at the Committee meetings during the Financial Year 2019-20 are
furnished below:
Sr. Name of the Members No. of meetings held during No. of Meetings
No. the tenure of Directors Attended
1 Shri Arvind Agarwal, IAS 1 1
2 Shri D C Anjaria 1 1
3 Smt. Geeta Goradia 1 0
4 Smt. Sunaina Tomar, IAS 1 0
The risk document containing Key and Non-Key risks including way forward for mitigation thereof, as approved by the Risk
Management Committee, is also reviewed by the Audit Committee and the Board of Directors periodically.

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7 GENERAL BODY MEETINGS

 Date & Venue of the last three Annual General Meetings :
Meetings
57th AGM 56th AGM 55th AGM
Particular
Date September 27, 2019 September 28, 2018 September 16, 2017
Start Timing 03.30 PM 03.30 PM 03.30 PM
Venue Cultural Center Auditorium situated atP. O. Fertilizernagar – 391750,
Dist. Vadodara (Registered Office of the Company)
• No ‘Extraordinary General Meeting’ was held during the last three years.
• No postal ballot was conducted in aforesaid meetings.
• At the forthcoming ‘Annual General Meeting’ there is no item on the agenda requiring postal ballot.
• One special resolution pertaining to appointment of Shri Vijai Kapoor as Independent Director in terms of Regulation
17(1A) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 was passed at 57th Annual General
Meeting with requisite majority.
8 DISCLOSURES
There are no materially significant related party transactions made by the Company with its Promoters, Directors, or
Management, their subsidiaries or relatives etc. which may have potential conflict with the interest of the Company at large.
An adequate disclosure regarding related party transactions is contained in the Annual Accounts of the Company in Note No.
40 which forms a part of this Annual Report.
There are no non compliance by the Company, penalties, strictures imposed on the Company by Stock Exchanges
or SEBI or any statutory authority on any matter related to capital markets, during the last three years.
The Company complies with all the mandatory requirements of the Regulation 17 to 27 & Clause (b) to (i) of Sub-regulation
(2) of Regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 on Code of Corporate
Governance. The Board of Directors has approved the Code of Conduct and Ethics for the Directors and the Senior
Management of the Company.
 CEO CERTIFICATION:
The Managing Director (CEO) of the Company has certified the compliance of Code of Conduct in respec t of the
Financial Year 2019-20 by the Board Members & Senior Management and the said certificate forms part of this report.
Statutory Compliance of all applicable Laws is being made by the Company and is reported to the Board in its every
meeting. Further in preparation of the financial statements, all those Accounting Standards that are applicable have
been complied with by the Company.
 Vigil mechanism:
The Company has a vigil mechanism policy to deal with instances of fraud and mismanagement, if any. The said policy
is placed on the website of the company at web link:
http://www.gsfclimited.com/statu_comp.asp?mnuid=12.
The Company has in place an anti harassment policy in line with the requirements of the Act. Internal Complaint
Committee is set up to redress complaints received regularly and are monitored by women supervisors who directly
reports to the Managing Director. All employees (permanent, contractual, temporary, trainees) are covered under the
policy. There were no complaints received from any employee during the financial year 2019-20 and hence no
complaints is outstanding as on 31.03.2020 for redressal. No personnel were denied access to the Audit Committee of
the Company.
 Board Training and induction:
At the time of appointing an independent director, a formal letter of appointment is given to them, which inter alia explains
the role, functions, duties and responsibilities expected of him as a director of the company. The Director is also
explained in detail the compliances required from him under the Companies Act, 2013 as well as SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 and other relevant regulations and his affirmation taken with respect
to the same.
By way of introduction to the Company, the Director is presented with a book of product profile, its history and growth
trajectory ever since its inception, Companies Promoted and other relevant information. Further, with a view to familiarize
the new director with the Company’s operations, the director is also given a CD of corporate film ex plaining the
organizational set up of the Company, Company’s market share and shareholding pattern of the Company, its investments
etc.
 Independent Directors’ Meeting
During the year under review, the Independent Directors met on 21.05.2019, inter alia, to discuss:

72 58TH ANNUAL REPORT 2019-20

 CORPORATE GOVERNANCE REPORT (Contd.)

• Evaluation of the performance of non–independent directors and the Board as a whole;

• Evaluation of the performance of the Chairman of the Company, taking into account the views of the executive and non-
executive directors.
• Evaluation of quality, content and timeliness of flow of information between the management and the board that is
necessary for the Board to effectively and reasonably perform its duties.
The familiarisation programme in line with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 was arranged for the Independent Directors on 21.05.2019 by way of presentation/
agenda, where in they were provided with the guidelines of their duties, roles, responsibilities etc.
 Subsidiary Company (GSFC Agrotech Limited):
The Company does not have any material subsidiary whose net worth exceeds 10% of the consolidated net worth of
the holding company in the immediately preceding accounting year or has generated 10% of the consolidated income
of the company during the previous financial year. Accordingly, the policy on material subsidiaries has not been
formulated.
The Audited Annual Financial Statements of subsidiary company was tabled at Audit Committee and Board Meetings.
The board periodically takes note of the minutes of the meetings of the subsidiary company.
The following are the policies/details that are required to be placed on the Company’s website as required under the
provisions of the Companies Act, 2013 and Listing Regulations. The following web-link can be clicked/used to access
those policies/details;
http://www.gsfclimited.com/statu_comp.asp?mnuid=12.
1. Vigil Mechanism/Whistle Blower Policy
2. Terms of Appointment of Independent Director
3. Policy for Evaluation of Board Performance
4. Nomination & Remuneration -cum–Board Diversity Policy
5. Code of Conduct
6. Corporate Social Responsibilities (CSR) Policy
7. Policy on materiality of Related Party Transactions and dealing with Related Party Transactions
8. Code of conduct – SEBI (Prohibition of Insider Trading) Regulations, 2015
9. Familiarization programme of Independent Directors
10. 58th AGM e-voting process & Book Closure Notice
11. Notice of 58th Annual General Meeting
12. Authority to KMP to determine materiality of event
13. List of GSFC committees
14. Policy on determining materiality of event or information
15. Policy on preservation of documents
16. Stock Exchange Submission File
17. Press Clippings’
18. Dividend Distribution Policy
19. Risk Management Policy
9 MEANS OF COMMUNICATION:
Apart from furnishing the copies of the Unaudited Quarterly & Half Yearly Results and Audited Annual results to all the Stock
Exchanges where the shares of the Company are listed, the Company also publishes the results in leading English newspaper
and vernacular language newspaper viz. Business Standard all Editions and Vadodara Edition of Sandesh/ Divaya Bhaskar/
Gujarat Samachar.
The Company’s financial results are timely sent to the Stock Exchanges so that they are available on their website. The
financial results of the Company and other information pertaining to the Company are available on the Company’s website
www.gsfclimited.com. The Company also supplies copies of its financial results to the investors free of cost, if requested for,
and simultaneously they are also available on the Company’s website. The Management Discussion & Analysis Report shall
form as a part of the Directors’ Report to shareholders.
The Company has voluntarily adopted the procedure of getting the Compliance of Code on Corporate Governance audited
on quarterly basis besides annually as required under Listing Regulations and a Certificate to that effect together with the
quarterly compliance report has been submitted to Stock Exchange(s) as follows:

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Report for the quarter ended Date of submission to Stock Exchange(s)

30-06-2019 06-08-2019
30-09-2019 24-10-2019
31-12-2019 30-01-2020
31-03-2020 18-06-2020
As required by the Listing Regulations, the Company has designated an email account specifically for investor service and
the same is displayed on the website of the Company. Investors may lodge their complaints at: [email protected].
10 GENERAL SHAREHOLDER INFORMATION
a) Annual General Meeting:
As is indicated in the Notice convening the 58th Annual General Meeting of the Company will be held on 30th day of
September, 2020 at 10:30 AM. through video conferencing (“VC”) / other audio visual means (“OAVM”).
b) Financial Calendar:
The Financial Year of the Company is from 1st April to 31st March. The tentative financial calendar is given below:
Unaudited Results for Quarter ending June 30, 2020 Latest by 14th August, 2020
Unaudited Results for Quarter ending September 30, 2020 Latest by 14th November, 2020
Unaudited Results for Quarter ending December 31, 2020 Latest by 14th February, 2021
th
Audited Results for Quarter/ Year ending March 31, 2021 Latest by 30 May, 2021
c) Book Closure Date:
The Register of Members of the Company shall remain closed from 16th September, 2020 to 30th September, 2020.
(Both days inclusive).
d) Dividend payment date:
Dividend shall be paid on and after 12th October, 2020.
e) (i) Listing of Equity Shares:
The Equity Shares of the Company are listed on the following stock exchanges:
Sr. No. Name & Address of the Exchange Scrip Code
01 BSE Limited1st Floor, New Trading Ring
Rotunda Bldg., P.J.Towers, Dalal Street
Fort, MUMBAI - 400 001 500690
02 National Stock Exchange of India Limited’
Exchange Plaza’, C/1, Block G Bandra-Kurla Complex
Bandra (East), MUMBAI - 400 051 GSFC – EQ
An application for delisting of Equity Shares from Calcutta Stock Exchange (CSE) has been made to CSE and their
approval is yet not received. The Annual Listing Fees in respect of BSE Limited and National Stock Exchange of
India Limited for the F.Y. 2020-21 has been paid by the Company.
(ii) Demat ISIN No. in NSDL & CDSL for Equity shares: INE026A01025.
(iii) Corporate Identification Number (CIN): L99999GJ1962PLC001121.

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 CORPORATE GOVERNANCE REPORT (Contd.)

(iv) Stock Market Data :–

High - Low share price performance in comparison to broad-based indices – BSE Sensex and NSE Nifty:
Month BSE NSE
& year Sensex GSFC’s Nifty GSFC’s
Share Price (`) Share Price (`)
High Low High Low High Low High Low
Apr-19 39487.45 38460.25 108.50 97.25 11856.15 11549.10 108.70 97.20
May-19 40124.96 39956.10 110.70 90.45 12041.15 11108.30 110.65 90.30
Jun-19 40312.07 38870.96 108.90 88.80 12103.05 11625.10 108.50 89.10
Jul-19 40032.41 37128.26 94.80 78.20 11981.75 10999.40 94.80 78.10
Aug-19 37807.55 36102.35 80.50 68.50 11181.45 10637.15 80.50 68.50
Sep-19 39441.12 35987.80 87.25 72.30 11694.85 10670.25 87.25 72.20
Oct-19 40392.22 37415.83 82.45 71.55 11945.00 11090.15 82.40 72.50
Nov-19 41163.79 40014.23 83.25 70.00 12158.80 11802.65 83.30 70.05
Dec-19 41809.96 40135.37 72.90 65.95 12293.90 11832.30 73.65 66.00
Jan-20 42273.87 40476.55 97.70 69.60 12430.50 11929.60 97.80 69.35
Feb-20 41709.30 38219.97 88.75 60.50 12246.70 11175.05 88.80 60.10
Mar-20 39083.17 25638.90 63.45 29.90 11433.00 7511.10 63.30 29.80
The graphical presentations shall be presented at the time of printing of annual report which will depict the
movement of monthly high/ low share prices of the Company’s Shares on BSE and NSE vis-à-vis the movements
in the Sensex and Nifty during the period from April 2019 to March 2020.

(f) Share Transfer System and Registrars & Share Transfer Agents of the Company:
The entire share transfer process, physical as well as dematerialized, is being handled by the Company’s Registrar and
Transfer Agents viz. Link Intime India Pvt. Ltd., situated at B – 102 & 103, Shangrila Complex, First Floor, Opp.
HDFC Bank, Near Radhakrishna Char Rasta, Akota, Vadodara – 390 020. Share Transfer in physical form can be
lodged (objection cases) either with the Registrars & Transfer Agents OR at the Registered Office of the Company.
Share Transfer requests received are attended within a fortnight. All requests for de-materialization / re-materialization
of shares are processed and confirmation is sent to the depositories by the Registrars & Share Transfer Agents of the
Company generally within 10 days from the date of the receipt thereof.
The Company’s representatives regularly visit the office of the Registrar and Share Transfer Agents to monitor,
supervise and ensure that there are no unusual delays or lapses in the system.

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 CORPORATE GOVERNANCE REPORT (Contd.)

(g) Distribution of Shareholding as on 31st March, 2020:

Pattern of Shareholding (Category wise):
Category No. of Shares % to Total Capital
Promoter: Gujarat State Investments Limited 15,07,99,905 37.84
Public Financial Institutions, Insurance Companies & Mutual Fund 4,84,87,411 12.17
Companies & Banks 11,41,76,693 28.65
Individuals, Co-operative Societies & Co-operative Banks 8,50,13,521 21.34
Total 39,84,77,530 100.00
Pattern of Shareholding (Shareholding wise):
Category (No. of Shares) No. of Shareholders % No. of Shares %
From To
Upto 500 Shares 109617 82.27 15523462 3.90
501 – 1000 11193 8.40 8984076 2.25
1001 – 2000 6443 4.83 9704565 2.44
2001 – 3000 2192 1.64 5557983 1.39
3001 – 4000 935 0.70 3347380 0.84
4001 – 5000 816 0.61 3879984 0.97
5001 – 10000 1122 0.84 8213461 2.06
10001 and above 913 0.68 343266619 86.15
Total 133231 100.00 398477530 100.00
(h) Unclaimed Shares:
The Company has transferred the Unclaimed/Undelivered Equity Shares in terms of Schedule VI of the SEBI (LODR)
Regulations 2015 into “Demat Suspense Account” opened for the purpose pursuant to SEBI Circular dated 16-12-2010.
The details of Unclaimed/Undelivered Shares in the “Demat Suspense Account as on 31st March, 2020 is as follows:-
Sr. Description No. of No. of
No. Shareholder/s Shares
i) Aggregate number of shareholding and the outstanding shares in the
Unclaimed Suspense Account at the beginning of the year, i.e. April 1, 2019. 223 18110
ii) Number of shareholders who approached the Company for transfer of shares
from the Unclaimed Suspense Account during the year 2019-2020. - -
iii) Number of Shareholders to whom shares were transferred from the Unclaimed
Suspense Account during the year 2019-2020. - -
iv) Number of Shareholders whose shares were transferred from the Unclaimed
Suspense Account to the IEPF Authority during the year 2019-2020 5 135
v) Aggregate number of shareholders and the outstanding shares lying in the
Unclaimed Suspense Account at the end of the year i.e. March 31, 2020. 218 17975
The Voting rights in respect of the said shares will be frozen.
 No pledge has been created over the Equity Shares held by the Promoters as on March 31, 2020.
 97.94% of the Equity Shares have been dematerialized till 31/03/2020. The Company’s Equity Shares are to be
compulsorily dealt in dematerialized form since 26/06/2000 and the ISIN no. of the Company’s Equity Share is
INE026A01025.
 The Company has paid the Annual Custody Charges to National Securities Depository Limited (NSDL) and
Central Depository Services (India) Ltd. (CDSL) for the year 2019-20.
 Dividend @ 1.20 per share of ` 2/- each has been recommended by the Board of Directors on the Equity Shares
which shall be paid/ distributed on or after 12th October, 2020 upon its approval by the Shareholders in the ensuing
58th Annual General Meeting.
 The Company has paid ` 23.07 lakhs as total audit fees for all services by the statutory auditor in terms of
Schedule V(C)-10(k)of SEBI LODR.
 The Company has not raised funds raised through preferential allotment or qualified institutions placement,
therefore, disclosure in terms of Regulation 32 (7A)- read with Schedule V(C)-10(h)is not applicable to the
Company;

76 58TH ANNUAL REPORT 2019-20

 CORPORATE GOVERNANCE REPORT (Contd.)

 The Company has obtained as a certificate from Shri Niraj Trivedi, Practicing Company Secretary to the effect that
none of the directors on the board of the company have been debarred or disqualified from being appointed or
continuing as directors of companies by the Board / Ministry of Corporate Affairs or any such statutory authority
in terms of Schedule V(E) of SEBI LODR;
 The Board has accepted all the recommendations of all its committees, during the financial year in terms of
Schedule V(C)-9(n)of SEBI LODR.
 The Company is not currently involved in commodity hedging activity.
 Unit-wise Plant locations :
The Company’s Units are located as follows:
Baroda Unit Fertilizernagar – 391 750, Dist. Vadodara. Polymers Unit Nandesari GIDC, Dist. Vadodara.
Fibre Unit Kuwarda, Dist. Surat. Sikka Unit Moti Khawdi, Dist. Jamnagar
(j) Address for Correspondence:
The shareholders may send their communications at the registered office of the Company at the following address:
Company Secretary & Sr. Vice President (Legal)
Gujarat State Fertilizers & Chemicals Limited, Fertilizernagar - 391750, Dist. Vadodara
Tel Nos. 0265-2242451/2242651/2242751, Fax Nos.0265-2240966/2240119
Email: [email protected]. Website: www.gsfclimited.com
Or
Registrars & Transfer Agents for Equity Shares of the Company:
R&T Name & Address: Link Intime India Pvt. Limited, B-102 & 103, Shangrila Complex, First Floor, Opp. HDFC Bank,
Near Radhakrishna Char Rasta, Akota, Vadodara - 390 020.
Tel No: +91 265 2356573/2356794 E-mail id: [email protected]
Website: www.linkintime.co.in
R&T HO Address: Link Intime India Pvt Limited, C-101, 247 Park, L.B.S. Marg, Vikhroli (West),
Mumbai – 400 083, Tel No : +91 22 49186270
(k) List of all credit ratings obtained by the Company during the Financial Year 2019-20
Credit Rating Issuing Agency Facilities
CARE AA+ CARE Ratings Long Term Bank Facilities
IND AA+ India Ratings & Research Long Term Bank Facilities
CARE A1+ CARE Ratings Short Term Bank Facilities
IND A1+ India Ratings & Research Short Term Bank Facilities

Sub: Affirmation of compliance with the Code of Conduct by all Board Members &
Sr. Management of the Company for the Financial Year 2019-20.

Based on the confirmations received from Board Members & Members of Sr. Management of the Company, I hereby affirm that all
the Board Members & Members of Sr. Management of the Company have complied with the Code of Conduct as approved by the
Board of Directors of the Company for the Financial Year 2019-20.

Sd/-
Date : 4th August, 2020 Shri Arvind Agarwal,
Place : Fertilizernagar. Chairman & Managing Director

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 CORPORATE GOVERNANCE REPORT (Contd.)

CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

(Pursuant to the Regulation 34 (3) and Schedule V Para C Clause (10) (i) of the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)
To,
The Members of
GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED
(CIN: L99999GJ1962PLC001121)
P. O. Fertilizernagar,
Vadodara – 391 750.
I have examined the relevant registers, records, forms, returns and disclosures received from the Directors of Gujarat State
Fertilizers & Chemicals Limited having CIN: L99999GJ192PLC001121 and having Registered Office at P.O . Fertilizernagar,
Vadodara – 391 750 (Hereinafter referred to as ‘the Company’), produced before me by the Company for the purpose of issuing
this Certificate, in accordance with the Regulation 34 (3) read with Schedule V Para C Clause 10 (i) of the Securities Exchange
Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
In my opinion and to the best of my information and according to the verifications (Including Directors Identification Number (DIN)
status at the portal www.mca.gov.in) as considered necessary and explanations furnished to me by the Company and its officers
and considering the relaxations granted by the Ministry of Corporate Affairs and Securities and Exchange Board of India warranted
due to the spread of the COVID – 19 pandemic, I hereby certify that none of the Directors on the Board of the Company as stated
below for the Financial Year ending on 31st March, 2020, have been debarred or disqualified from being appointed or continuing as
the Directors of the Companies, by Securities and Exchange Board of India (SEBI), Ministry of Corporate Affairs (MCA) or any
such other Statutory Authority:-
Sr. No. Name of the Directors DIN Date of Appointment*
1 Ajay Shah Narottam 01141239 15/07/2006
2 Vasant Pakash Gandhi 00863653 15/07/2006
3 Vijai Kumar Kapoor 01084371 15/07/2006
4 Divyabhash Chandrakant Anjaria 00008639 22/09/2006
5 Geeta Amit Goradia 00074343 08/08/2014
6 Arvind Motilal Agarwal 00122921 04/06/2018
7 Pankaj Harishchandra Joshi 01532892 23/09/2019
8 Sunaina Tomar 03435543 04/01/2020
* The date of appointment is as per the MCA Portal.
Ensuring the eligibility for the appointment / continuity of every Director on the Board is the responsibility of the management of the
Company. Our responsibility is to express an opinion on these based on our verification. This certificate is neither an assurance
as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs
of the Company.

DATE : 04TH AUGUST, 2020 SIGNATURE : Sd/-

PLACE : VADODARA NAME OF PCS : NIRAJ TRIVEDI
FCS : 3844
C. P. NO. : 3123
UDIN : F003844B000547332

78 58TH ANNUAL REPORT 2019-20

 CORPORATE GOVERNANCE REPORT (Contd.)

CORPORATE GOVERNANCE CERTIFICATE

(For the Financial Year ended March 31, 2020 pursuant to Schedule-V – part E of SEBI (Listing Obligation and Disclosure
Requirements) Regulations, 2015)
To the Members
Gujarat State Fertilizers & Chemicals Limited
We have examined the compliance of the conditions of Corporate Governance by GUJARAT STATE FERTILIZERS & CHEMICALS
LIMITED for the year ended March 31, 2020 as per the relevant provisions of Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) (Listing Regulations).
The Compliance of conditions of Corporate Governance is the responsibility of the Company’s Management. Our examination was
limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of
Governance. It is neither an audit nor an expression of an opinion on the financial statement of the Company.
In our opinion and to the best of our information and according to the explanations given to us, and considering the relaxations
granted by the Ministry of Corporate Affairs and Securities and Exchange Board of India warranted due to the spread of the
COVID-19 Pandemic, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the
above mentioned Listing Regulations.
We state that in respect of investor grievances received during the year ended March 31, 2020, no investor grievance is pending
against the Company, as per the records maintained by the Company and presented to the Stakeholders Relationship Committee.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or
effectiveness with which the Management has conducted the affairs of the Company.

Sd/-
Suresh Kumar Kabra
Partner

Samdani Kabra & Asso.

Company Secretaries
ACS No 9711; CP No. 9927
UDIN: A009711B000548128

Place : Vadodara
Date : August 04, 2020

58TH ANNUAL REPORT 2019-20 79

 FINANCIAL HIGHLIGHTS OF TEN YEARS

PARTICULARS 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11

OPERATING RESULTS (` in Crores)

GROSS INCOME 7730 8679 6404 5477 6326 5563 5671 6486 5464 4856
GROSS PROFIT 297 791 610 478 694 675 640 900 1276 1259
DEPRECIATION 170 126 119 103 97 101 145 132 129 147
EXCEPTIONAL ITEMS 0 0 0 - - - - - -34 -
PROFIT/(LOSS) BEFORE TAX 127 665 491 375 597 574 495 768 1113 1112
TAX 28 171 15 -45 188 173 153 250 356 363
PROFIT/(LOSS) AFTER TAX 99 494 476 420 409 401 342 518 758 749
DIVIDEND 88 88 88 88 88 88 80 80 60 56
DIVIDEND TAX 18 18 18 18 18 18 13 13 10 9
AMOUNT PER SHARE (RUPEES)*
SALES 191 215 158 137 159 134 136 157 665 597
EARNING 2 12 12 11 10 10 9 13 95 94
CASH EARNING 7 17 14 11 12 13 12 16 117 119
EQUITY DIVIDEND 1.2 2.2 2.2 2.2 2.2 2.2 2 2 7.5 7
BOOK VALUE 171 182 182 165 122 112 107 99 441 355
MARKET PRICE:
HIGH 111 138 166 132 91 125 63 91 504 413
LOW 30 86 113 64 57 53 44 55 322 215

* Per share figures for F.Y. 2012-13 to 2019-20 are based on face value of ` 2/- for remaining years figures are based on face
value of ` 10/-
# Figure from 2015-16 are as per IND AS

80 58TH ANNUAL REPORT 2019-20

 Independent Auditors’ Report

TO THE MEMBERS OF GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED

Report on the Audit of the Standalone Financial Statements
Auditor’s Opinion
We have audited the accompanying standalone financial statements of Gujarat State Fertilizers & Chemicals
Limited (“the Company”), which comprise the balance sheet as at 31st March 2020, and the statement of Profit and
Loss (including Other Comprehensive income), statement of changes in equity and statement of cash flows for the
year then ended, on that date and notes to the financial statements, including a summary of significant accounting
policies and other explanatory information (hereinafter referred to as “standalone financial statements”).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid
standalone financial statements give the information required by the Companies Act, 2013 (“the Act”) Act in the
manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed
under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended,
(“Ind As”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at
March 31, 2020, profit, total comprehensive loss, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the
Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities
for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance
with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence
requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and
the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements
and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the standalone financial statements.
Emphasis of Matter
We draw attention to Note no. 48 to the standalone financial statement, to assess the recoverability of certain
receivables and investments, the management has considered internal and external information upto the date of
approval of the standalone financial statement and economic forecasts. Based on current indicators of future economic
conditions, management expects to recover the carrying amount of these assets. The actual impact of global health
pandemic may be different from that estimated as at the date of approval of the standalone financial statement and
management will continue to closely monitor any material changes to future economic conditions.
Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
standalone financial statements of the current period. These matters were addressed in the context of our audit of the
standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. We have determined the matters described below to be the key audit matters to be
communicated in our report.
Key Audit Matter Auditor’s Response
Evaluation of uncertain tax positions: Principal Audit Procedures
The Company has material uncertain tax positions We evaluated the related accounting policy for provisioning
for liability of ` 31,044.76 Lakhs including matters for tax exposures and found it to be appropriate. We have
under dispute which involves significant judgment obtained details of completed tax assessments and demands
to determine the possible outcome of these upto the year ended March 31, 2020 from management. We
disputes. Refer Notes 38 to the Standalone evaluated auditee's response / opinion taken from various tax
Financial Statements. experts by auditee to challenge the underlying assumptions
in estimating the tax provision and the possible outcome of
the disputes. We also considered legal precedence and other
rulings in evaluating management's position on these
uncertain tax positions. Additionally, we considered the effect

58TH ANNUAL REPORT 2019-20 81

 Independent Auditors’ Report (Contd...)

Key Audit Matter Auditor’s Response

of new information in respect of uncertain tax positions as at
March 31, 2020 to evaluate whether any change was required
to management's position on these uncertainties. From the
evidence obtained and in the context of the financial
statements, taken as a whole, we consider the provisions in
relation to uncertain tax positions as at 31 March 2020 to be
appropriate.

Impairment of property, plant and equipment: Principal Audit Procedures

Company has discontinued its operations at Fiber We evaluated the management's various viable proposals,
& Polymer unit due to non-viability of its products. impairment calculations, assessing the net recoverable value
Gross block of the assets of the Fiber & Polymer of the CGU used in the models, and the process by which
unit and it's carrying value as on 31st March 2020 they were drawn up, including comparing them to the latest
works out to ` 26,475.38 Lakhs & ` 6,215.03 circle rates of the Land, and testing the underlying
Lakhs. Further, methanol plant having Gross Block calculations. Based on our audit procedures, we found
and carrying value as on 31st March 2020, of management's assessment in determining the carrying value
` 27,537.13 Lakhs & ` 19,717.35 Lakhs is not in of the property, plant and equipment of Fiber & Polymer unit
operation since last 3 to 4 years. We have and Methanol Plant to be reasonable. Refer Note 49 (i) & (iv)
considered this issue to be a key audit matter to the Standalone Financial Statements.
because the analysis performed by management
requires the use of complex estimates and
judgments regarding the future earnings
performances \ recoverable amount of the CGUs
to which the aforementioned assets belong.
Fair Value assessment of subsidy receivables Principal Audit Procedures
from Government: Our audit procedure includes review of subsidy receivable
Government Subsidy Receivable forms a from Department of Fertilizer (i.e. sovereign Authority) is
significant part of the Company's assets, backed by the approved claims generated from MFMS
amounting to ` 1,83,104.24 Lakhs as at March 31, (Mobile Fertilizer Management System).
2020. Given the size of the subsidy balance Subsidy income recognised and remained outstanding over
relative to the total assets of the company and the significant period are discussed / enquired with management
estimates and judgements described in Note 12 based on follow-up with Department of Fertilizers,
to the Standalone Financial statements, the fair Government of India including basis of management
value assessment requires significant audit judgement and realisation certainty thereof.
attention.
Based on the above procedures performed, the
management's assessment of implications of government
notifications / policies on recognition of subsidy revenue and
the recoverability were considered to be reasonable.
Accuracy of recognition, measurement, Principal Audit Procedures
presentation and disclosures of revenues and Our audit procedure focused on transactions occurring within
other related balances in view of adoption of Ind proximity of the year end in the Fertilizer segment, obtaining
AS 115 "Revenue from Contracts with evidence to support the appropriate timing of revenue
Customers" (new revenue accounting recognition based on terms and conditions set out in sales
standard): contracts, delivery documents and dealers' confirmation.
Company manufactures and sells a number of
fertilizer and chemical products to its customers,
mainly through its own distribution network. Sales
contracts specifically w.r.t Bill and Hold transaction
contains constructive obligation for transfer of
control to the buyer. As per the terms of the
contract with the customers, company use to

82 58TH ANNUAL REPORT 2019-20

 Independent Auditors’ Report (Contd...)

recognize the sale based on the invoicing and

considering the transfer of control and other
criteria set out in para B81 of Ind AS 115. Refer
Notes 46 to the Standalone Financial Statements.

Recognition / de-recognition and measurement Principal Audit Procedures

of Urea Subsidy Income Our audit procedure includes:
Revenue from concession receivable from the • We assessed design, implementation and operative
Government of India ('GOI') is recognized when effectiveness of management's key internal controls over
control of the products has transferred to the revenue recognition.
customer and there is no unfulfilled obligation that
• We performed test of details, on a sample basis and
could affect the customer's acceptance of the
evaluated the underlying documents relating to urea
products. Concessions in respect of urea, as
concession income.
notified under the New Pricing Scheme, is
recognized with adjustments for escalation/de- • We read relevant notifications issued by the GOI and
escalation in the prices of inputs and other discussed with the management, to understand the
adjustments, as estimated by the management in underlying matters and basis for management judgement
accordance with the known policy parameters in and estimates including necessary changes made in
this regard. estimates to address variations noted in past.
During the current year, company has recognized • We reviewed the calculation of urea concession income
Urea subsidy income of aggregating to including escalation / de-escalation adjustments as per
` 78,139.02 Lakhs. Considering significant known policy parameters in this regard.
estimates involved, as mentioned above, revenue • We assessed the disclosures in the financial statements
and profit may deviate on account of change in in this regard.
such judgements and estimates.

Information Other than the Financial Statements and Auditor’s Report Thereon
The Company’s Board of Directors is responsible for the other information. The other information comprises the
information included in the Board’s Report and Annexure to Board’s Report, but does not include the financial
statements and our auditor’s report thereon. The other information is expected to be made available to us after the
date of this auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified
above when it becomes available and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
Management’s Responsibility for the Standalone Financial Statement
The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act, with respect to the
preparation of these standalone financial statements that give a true and fair view of the financial position, financial
performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the
accounting principles generally accepted in India. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and prudent; and design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.

58TH ANNUAL REPORT 2019-20 83

 Independent Auditors’ Report (Contd...)

Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our
opinion on whether the company has adequate internal financial controls system in place and the operating
effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate,
makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may
be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work
and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial
statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter
or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.

84 58TH ANNUAL REPORT 2019-20

 Independent Auditors’ Report (Contd...)

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government
of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure A”, a statement on the
matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge
and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it
appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive income, the statement
of changes in equity and the Cash Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors as on 31st March, 2020 taken on
record by the Board of Directors, none of the directors is disqualified as on 31st March, 2020 from being
appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the
Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements
of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the
managerial remuneration has been paid by the company to its directors during the year is in accordance
with provisions of Section 197 of the Act.
(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information
and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial
statements – Refer Note no 38 to the financial statements;
ii. Provision has been made in the financial statements, as required under the applicable law or
accounting standards, for material foreseeable losses, if any, on long-term contracts including
derivative contracts.
iii. There were no amounts which were required to be transferred to the investor’s education and
protection fund by the company.

For T R Chadha & Co LLP

Firm’s Reg. No-: 006711N/N500028
Chartered Accountants

Brijesh Thakkar
Place : Ahmedabad Partner
Date : 18th June, 2020 Membership No-135556
UDIN : 20135556AAAADM5404

58TH ANNUAL REPORT 2019-20 85

 ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT

ANNEXURE “A” TO INDEPENDENT AUDITORS’ REPORT FOR THE PERIOD ENDED MARCH 2020
(Referred to in Paragraph 1 under the Heading of “Report on Other Legal and Regulatory Requirements”
section of our Report of even date)
(i) Fixed Assets
a) The Company has maintained proper records showing full particulars including quantitative details and
situtation of fixed assets.
b) The fixed assets have been physically verified by the management during the year, which in our opinion
is reasonable having regard to the size & nature of the company. No material discrepancies were noted
on such verification.
c) According to the information and explanations given to us and the records examined by us and based on
the examination of registed sales deed/trasnfer deed/latter of award provided to us, we report that, the title
deeds, comprising all the immovable properties of land and buildings are held in the name of the Company
as at the balance sheet date.
(ii) Inventories
As explained to us, the inventories, except goods-in-transit, were physically verified during the year by the
Management at reasonable intervals and no material discrepancies were noticed on physical verification.
(iii) Loans given
According to Information and explanations given to us, the Company has not granted any Secured or unsecured
loan to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained
under Section 189 of the Companies Act, 2013. Hence reporting under clause 3 (iii) (a), (b) and (c) does not
arise.
(iv) Compliance of Sec. 185 & 186
In our openion and according to the information and explanations given to us, the compnay has complied with
the provisions of sections 185 & 186 of the companies Act, 2013 in respect of grant of loans, making investments
and providing guarantees and securities, as applicable.
(v) Public Deposit
According to Information and explanations given to us, the company has not accepted any deposits from the
public during the year and in respect of unclaimed deposits, the company has complied with the proviosn of
section 73 to 76 or any other relevent provisons of the copmanies Act, 2013.
(vi) Cost Records
The company is maintaining the cost records as specified by the Central Government under sub-section (1) of
section 148 of the Companies Act in respect of service carried out by the company. We have broadly reviewed
the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules,
2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies
Act, 2013 and are of the opinion that, prima facie, the prescribed cost records have been made and maintained.
We have, however not made a detailed examination of the cost records with a view to determine whether they
are accurate or complete.
(vii) Statutory Dues
According to the information and explanations given to us, in respect of statutory dues:
a) The Company has generally been regular in depositing its undisputed statutory dues including Provident
Fund, Income-tax, Goods and Service Tax, Customs duty, cess and other material statutory dues applicable
to it to the appropriate authorities.
b) No undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2020
for a period of more than six months from the date they became payable.
c) Detail of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Value Added Tax
which have not been deposited as on 31 March, 2020 on account of disputes are given below:

86 58TH ANNUAL REPORT 2019-20

 ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT (Contd...)

Amount Amount
Period/between involved unpaid
Name of Nature of Forum where dispute is various periods (excluding (excluding
Statute Dues pending to which the interest and interest and
amount relates penalty penalty
` in Lakhs) ` in Lakhs)
Assessing Officer FY 2016-17 1.68 1.68
Income Tax
Income Tax FY 2009-10 &
Act, 1961 Commissioner (Appeals) 650.87 419.65
FY 2015-16
FY 1986-89
High Court- Ahmedabad-HO 6,936.92 6,911.92
FY 2011-2015
Central Excise
Excise Duty FY 2009-12
Act, 1994 CESTAT-HO 386.19 357.57
FY 2013-17
Commissioner-Appeals FY 1991-95 80.20 80.20
Customs CESTAT FY 2017-18 1,357.03 1,357.03
Custom Duty
Act,1962 Commissioner-Appeals FY 2016-17 9.36 8.66
Commissioner-Appeals FY 2013-17 162.65 150.45
Supreme Court FY 2010-13 11.51 10.36
Finance Act,
Service Tax FY 2005-12
1994 CESTAT 166.80 96.62
FY 2014-16
Commissioner FY 2013-14 12.20 11.29
Gujarat Value
Gujarat Value Joint/Dy. Commissioner of FY 2006-07 to
added tax Act, 2,886.83 2,491.34
Added Tax Commercial Tax 2012-13
2003
Central Sales Additional Commissioner of Sales
FY 1998-99 0.14 0.14
Tax Tax, Delhi
Central Sales Central Sales Assistance Commissioner of FY 1995-96 &
2.21 2.21
Tax Act, 1956 Tax Sales Tax, West Bengal 1997-98
Central Sales Joint/Dy. Commissioner of FY 2006-07 to
2,772.00 2,551.71
Tax Commercial Tax 2015-16
(viii) In our opinion and according to the information and explanations given to us, the company has not defaulted in
the repayment of loans or borrowings to financial institutions & banks. The Company has not taken any loans or
borrowings from Government and has not issued any debentures.
(ix) The Company has not raised money by way of initial public offer or further public offer (including debt instrument)
any term loans during the period under audit therefore, paragraph 3 (ix) of the order is not applicable to the
company.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial
statements and as per the information and explanations given by the management, we report that no fraud by
the Company or any fraud on the company by its officers or employees has been noticed or reported during the
year.
(xi) According to information & explanations given to us, the managerial remuneration has been paid by the
company to its directors during the year is in accordance with provisions of Section 197 of the Act.
(xii) The company is not a Nidhi Company and hence reporting under clause (xii) of the paragraph 3 of the order is
not applicable.
(xiii) In our opinion and according to the information and explanations given to us, all the transactions with the
related parties are in compliance with section 177 and 188 of the Companies Act, 2013, where applicable, and
the details of related party transactions have been disclosed in the standalone financial statements as required
by the applicable Indian accounting standards.
(xiv) During the year, company has not made any preferential allotment or private placement of shares or fully or
partly convertible debentures. Therefore paragraph 3 (xiv) of the order is not applicable to the company.

58TH ANNUAL REPORT 2019-20 87

 ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT

(xv) In our opinion and according to the information and explanations given to us, during the year, the company has
not entered into any non-cash transactions with its directors or persons connected with him and hence paragraph
3 (xv) of the order is not applicable to the company.
(xvi) In our opinion and according to the information and explanations given to us, company is not required to be
registered under section 45-IA of the Reserve Bank of India Act, 1934.

For T R Chadha & Co LLP

Firm’s Reg. No-: 006711N/N500028
Chartered Accountants

Brijesh Thakkar
Place : Ahmedabad Partner
Date : 18th June, 2020 Membership No-135556
UDIN : 20135556AAAADM5404

ANNEXURE “B” TO THE INDEPENDENT AUDITOR’S REPORT

THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS
OF GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED.
(Referred to in Paragraph 2(F) under the Heading of “Report on Other Legal and Regulatory Requirements”
section of our Report of even date)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies
Act, 2013 (“the Act”)
We have audited the internal financial controls with reference to Financial Statements of Gujarat State Fertilizers
and Chemicals Limited (“the Company”) as of 31 March, 2020 in conjunction with our audit of the standalone financial
statements of the Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Company’s management is responsible for establishing and maintaining internal financial controls based on,
“the internal financial controls with reference to financial statements criteria established by the Company considering
the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls
over Financial Reporting issued by the Institute of Chartered Accountants of India”. These responsibilities include
the design, implementation and maintenance of adequate internal financial controls that were operating effectively
for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the
safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of
the accounting records, and the timely preparation of reliable financial information, as required under the Companies
Act, 2013.
Auditors’ Responsibility
Our responsibility is to express an opinion on the Company’s internal financial controls with reference to financial
statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI
and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an
audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by
the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate
internal financial controls with reference to financial statements was established and maintained and if such controls
operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls
with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with
reference to financial statements included obtaining an understanding of internal financial controls with reference

88 58TH ANNUAL REPORT 2019-20

 ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT(Contd...)

to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on
the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements,
whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion on the Company’s internal financial controls with reference to financial statements.
Meaning of Internal Financial Controls with reference to financial statements
A company’s internal financial control with reference to financial statements is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A company’s internal financial control
with reference to financial statements includes those policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of
the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorisations of management and directors
of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to Financial Statements
Because of the inherent limitations of internal financial controls with reference to financial statements, including the
possibility of collusion or improper management override of controls, material misstatements due to error or fraud
may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference
to financial statements to future periods are subject to the risk that the internal financial control with reference to
financial statements may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference
to financial statements and such internal financial controls with reference to financial statements were operating
effectively as at 31 March, 2020, based on, “the internal control with reference to financial statements criteria
established by the Company considering the essential components of internal control stated in the Guidance Note
on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants
of India”.

For T R Chadha & Co LLP

Firm’s Reg. No-: 006711N/N500028
Chartered Accountants

Brijesh Thakkar
Place : Ahmedabad Partner
Date : 18th June, 2020 Membership No-135556
UDIN : 20135556AAAADM5404

58TH ANNUAL REPORT 2019-20 89

 BALANCE SHEET AS AT 31ST MARCH, 2020

(` in lakhs)
Particulars Note As at As at
31st March 2020 31st March 2019

A. ASSETS

1. Non-current assets

(a) Property, Plant and Equipments 5 2,89,129.14 2,81,030.24

(b) Capital work-in-progress 5 10,685.10 18,702.38

(c) Right of Use Assets 5 230.46 -

(d) Other Intangible assets 6 148.12 296.82

(e) Financial Assets

(i) Investments 7 2,02,340.25 2,31,529.23

(ii) Others financial assets 8 3,000.06 4,415.80

(f) Income tax assets (Net) 23 15,121.97 9,901.82

(g) Deferred tax assets (Net) 23 6,762.92 -

(h) Other non current assets 9 32,287.45 33,320.33

5,59,705.47 5,79,196.62

2. Current assets

(a) Inventories 10 1,26,263.81 1,43,025.50

(b) Financial Assets

(i) Trade receivable 11 89,171.80 95,105.61

(ii) Government subsidies receivable 12 1,83,104.24 1,72,948.97

(iii) Cash and cash equivalents 13 1,429.04 3,697.50

(iv) Bank balances other than (iii) above 14 1,092.25 1,202.50

(v) Loans 15 19,226.97 17,445.78

(vi) Others financial assets 16 886.69 236.99

(c) Other current assets 17 20,844.65 21,558.14

4,42,019.45 4,55,220.99

3. Assets held for sale 18 703.98 703.98

TOTAL ASSETS 10,02,428.90 10,35,121.59

90 58TH ANNUAL REPORT 2019-20

 BALANCE SHEET AS AT 31ST MARCH, 2020

(` in lakhs)
Particulars Note As at As at
31st March 2020 31st March 2019

B. EQUITY AND LIABILITIES

EQUITY
(a) Equity share capital 19 7,969.55 7,969.55
(b) Other Equity 20 6,71,815.04 7,18,814.71

6,79,784.59 7,26,784.26

LIABILITIES
1. Non-current liabilities
(a) Financial Liabilities
(i) Borrowings 21 9,333.33 14,666.67
(b) Provisions 22 80,145.76 47,190.34
(c) Deferred tax liabilities (Net) 23 - 2,006.67

89,479.09 63,863.68

2. Current liabilities
(a) Financial Liabilities
(i) Borrowings 24 1,41,241.45 86,868.79
(ii) Trade payables 25
- Total outstanding dues of MSMED 494.13 1,057.41
- Total outstanding dues of creditors other
than MSMED 40,203.20 98,893.71
(iii) Other financial liabilities 26 29,578.47 43,318.90
(b) Other current liabilities 27 7,818.90 3,298.51
(c) Provisions 28 13,330.00 10,537.27
(d) Current tax liabilities (Net) 23 499.07 499.07

2,33,165.22 2,44,473.66

TOTAL EQUITY & LIABILITIES 10,02,428.90 10,35,121.59

See accompanying notes forming part of the financial statements 1 to 49

In terms of our report attached

For T R Chadha & Co LLP Arvind Agarwal
Chartered Accountants Chairman and Managing Director
Firm Registration No: 006711N / N500028
Brijesh Thakkar V. D. Nanavaty V. V. Vachhrajani
Partner ED (Finance) & CFO Company Secretary
Membership No: 135556

Vadodara
18th June, 2020

58TH ANNUAL REPORT 2019-20 91

 STATEMENT OF PROFIT & LOSS FOR THE PERIOD ENDED 31 ST MARCH, 2020

(` in lakhs)
Particulars Note Year Ended 31st March
2020 2019
I Income
Revenue from operations 29 7,62,082.43 8,57,453.65
Other income 30 10,919.01 10,489.82
Total income 7,73,001.44 8,67,943.47
II Expenses
Cost of materials consumed 31 3,59,702.25 4,22,602.07
Purchase of Stock in Trade 1,41,578.96 2,06,291.64
Changes in inventories of finished goods, work in
process and stock in trade 32 10,219.04 (48,768.45)
Power and Fuel 65,231.30 67,671.95
Employee benefits expense 33 71,425.77 52,122.73
Finance costs 34 11,469.26 6,126.13
Depreciation and amortization expense 17,020.92 12,560.56
Other expenses 35 83,656.38 82,795.21
Total Expenses 7,60,303.88 8,01,401.84
III Profit before tax 12,697.56 66,541.63
IV Tax expense
Current tax - 12,322.52
Deferred tax 23 2,479.03 5,311.05
MAT credit recognised - (689.37)
Earlier Year Tax 23 348.89 228.98
V Profit for the year 9,869.64 49,368.45
VI Other Comprehensive Income
(A) Items that will be reclassified to profit or loss - -
(B) Items that will not be reclassified to profit or loss
Re-measurement gains/ (losses) on defined benefit plans (30,926.63) (1,286.61)
Income tax effect on above 10,807.00 449.59
Net fair value (loss) / gain on investments in equity
instruments at FVTOCI (28,392.23) (44,719.61)
Income tax effect on above 2,211.04 7,346.07
Net other comprehensive income that will not be
reclassified to profit or loss (46,300.82) (38,210.56)
VII Total Comprehensive Income for the year (V+VI) (36,431.18) 11,157.89
Earnings per equity share (face value of ` 2/- each)
Basic and Diluted Earnings per equity share: 36 2.48 12.39
See accompanying notes forming part of the financial
statements 1 to 49
In terms of our report attached
For T R Chadha & Co LLP Arvind Agarwal
Chartered Accountants Chairman and Managing Director
Firm Registration No: 006711N / N500028
Brijesh Thakkar V. D. Nanavaty V. V. Vachhrajani
Partner ED (Finance) & CFO Company Secretary
Membership No: 135556

Vadodara
18th June, 2020

92 58TH ANNUAL REPORT 2019-20

 CASH FLOW STATEMENT FOR THE YEAR ENDED 31 ST MARCH, 2020

(` in lakhs)
Particulars Year Ended 31st March
2020 2019
A Cash Flow From Operating Activities :
Profit Before Tax 12,697.56 66,541.63
Adjustments for :
Depreciation and amortisation expense 17,020.92 12,560.56
Amortisation of lease hold land 355.98 355.98
Finance cost 11,469.26 6,126.13
Interest income (52.29) (198.91)
Loss on fixed assets sold/written off 424.08 17.23
Dividend income (3,538.40) (3,705.86)
Provision for doubtful debts/advances 536.08 38.86
Operating Profit before Working Capital Changes 38,913.19 81,735.61
Movements in working capital:
Inventories 16,761.69 (62,385.68)
Trade receivables, loans and advances and other assets (12,029.80) 17,416.19
Trade payables, other current liabilities and provision (41,313.90) 24,032.68
Cash Generated from Operations 2,331.18 60,798.80
Direct taxes paid (net of refunds) (5,569.04) (10,103.54)
Net Cash Flow from Operating Activities (3,237.86) 50,695.26
B Cash Flow From Investing Activities :
Purchase of property, plant & equipments (including CWIP &
capital advances) (30,167.44) (29,559.43)
Purchase of non current investments 796.75 (2,202.75)
Interest received 63.17 196.51
Dividend received 3,538.40 3,705.86
Net Cash Flow used in Investing Activities (25,769.12) (27,859.80)
C Cash Flow From Financing Activities
Repayment of long term borrowings (5,333.33) (40,536.86)
Proceeds from long term borrowings - 30,000.00
Net increase/(decrease) in short term borrowings 54,372.66 2,778.81
Interest paid (11,732.80) (5,862.96)
Dividend paid (including tax thereon) (10,568.01) (10,550.00)
Net Cash Flow from/ (used in) Financing Activities 26,738.52 (24,171.01)
Net Increase/ (Decrease) in Cash & Cash Equivalents (2,268.46) (1,335.55)
Cash and Cash Equivalents as at the beginning of the year 3,697.50 5,033.05
Cash and Cash Equivalents as at end of the year (Refer Note-13) 1,429.04 3,697.50
Notes:
Components of Cash and cash equivalents
Cash on hand 7.61 4.28
Balances with banks
In current accounts 1,421.43 3,693.22
Total Cash and cash equivalents 1,429.04 3,697.50
The Cash flow statement has been prepared under the indirect method as
set out in the Indian Accounting Standard 7 on Cash Flows Statement.
See accompanying notes forming part of the financial statements

In terms of our report attached

For T R Chadha & Co LLP Arvind Agarwal
Chartered Accountants Chairman and Managing Director
Firm Registration No: 006711N / N500028
Brijesh Thakkar V. D. Nanavaty V. V. Vachhrajani
Partner ED (Finance) & CFO Company Secretary
Membership No: 135556

Vadodara
18th June, 2020

58TH ANNUAL REPORT 2019-20 93

 STATEMENT OF CHANGES IN EQUITY (SOCIE)

Note (a) : Equity share capital (` in lakhs)

Particulars Amount
Balance as at April 01, 2018 7,969.55
Changes in equity share capital during the year -
Balance as at March 31, 2019 7,969.55
Balance as at April 01, 2019 7,969.55
Changes in equity share capital during the year -
Balance as at March 31, 2020 7,969.55

Note (b) : Other equity (` in lakhs)

Reserves & Surplus Items of OCI
Particulars Capital Security Capital General Retained Equity Total Equity
reserve premium redemption reserve earnings Instruments
reserve through
OCI

Balance as at April 01, 2018 1,256.33 30,524.02 3,335.00 4,46,153.31 43,206.47 1,93,750.09 7,18,225.22
Profit for the year - - - - 49,368.45 - 49,368.45
Other comprehensive income for the year net of income tax - - - - - (37,373.54) (37,373.54)
Other comprehensive income arising from remeasurement of defined
benefit obligation net of income tax - - - - (837.02) - (837.02)
Total comprehensive income for the year - - - - 48,531.43 (37,373.54) 11,157.89
Dividends paid [Note 20] - - - - (8,766.51) - (8,766.51)
Dividend Distribution Tax (DDT) [Note 20] - - - - (1,801.90) - (1,801.90)
Transfer to General reserve - - - 38,000.00 (38,000.00) - -
Balance as at March 31, 2019 1,256.33 30,524.02 3,335.00 4,84,153.31 43,169.49 1,56,376.56 7,18,814.71
Balance as at April 01, 2019 1,256.33 30,524.02 3,335.00 4,84,153.31 43,169.49 1,56,376.56 7,18,814.71
Profit for the year - - - - 9,869.64 - 9,869.64
Other comprehensive income for the year net of income tax - - - - - (26,181.19) (26,181.19)
Other comprehensive income arising from remeasurement of defined
benefit obligation net of income tax - - - - (20,119.63) - (20,119.63)
Total comprehensive income for the year - - - - (10,249.99) (26,181.19) (36,431.18)
Dividends paid [Note 20] - - - - (8,766.50) - (8,766.50)
Dividend Distribution Tax (DDT) [Note 20] - - - - (1,801.98) - (1,801.98)
Balance as at March 31, 2020 1,256.33 30,524.02 3,335.00 4,84,153.31 22,351.02 1,30,195.36 6,71,815.04
See accompanying notes forming part of the financial statements 1 to 49

In terms of our report attached

For T R Chadha & Co LLP Arvind Agarwal
Chartered Accountants Chairman and Managing Director
Firm Registration No: 006711N / N500028
Brijesh Thakkar V. D. Nanavaty V. V. Vachhrajani
Partner ED (Finance) & CFO Company Secretary
Membership No: 135556

Vadodara
18th June, 2020

94 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

Notes to the financial statements for the year ended March All other assets are classified as non-current.
31, 2020 A liability is classified as current if it satisfies any of the
1. Corporate Information following criteria:
Gujarat State Fertilizers and Chemicals Limited “the a) it is expected to be settled in the Company’s normal
Company” is a public company domiciled in India and is operating cycle,
incorporated under the provisions of the Companies Act b) it is held primarily for the purpose of trading,
applicable in India. The Company is principally engaged
in production of fertilizers and chemicals. Its shares are c) it is due to be settled within twelve months after the
listed on two recognised stock exchanges in India. The reporting period,
regis tered office of the Company is loc ated at d) there is no unconditional right to defer the settlement
Fertilizernagar - 391 750, Dist. Vadodara. of the liability for at least twelve months after the
These financial statements were authorised for issuance reporting period.
by the Board of Directors of the Company in their meeting The Company classifies all other liabilities as non-current.
held on June 18, 2020. Current liabilities include current portion of non-current
2. Basis of preparation of financial statements financial liabilities.
2.1) Basis of preparation and compliance with Ind AS Deferred tax assets and liabilities are classified as non-
current assets and liabilities.
The standalone financial statements (financial statements)
of the Company as at and for the year ended March 31, The operating cycle is the time between the acquisition of
2020 has been prepared in accordance with Indian assets for processing and their realisation in cash and
Accounting standards (‘Ind AS’) notified under section cash equivalents. The Company has identified twelve
133 of the Companies Act, 2013 (‘Act’) and the Companies months as its operating cycle.
(Indian Accounting Standards) Rules issued from time to 3. The Company has applied the following accounting policies
time and other relevant provisions of the Companies Act, to all periods presented in the financial statements.
2013 (collectively called as Ind AS).
3.1 Revenue recognition
2.2) Basis of measurement
The Company derives rev enues primarily from
The financial statements have been prepared on a going manufacturing of Fertilizers and Chemical Products.
concern basis, using historical cost convention and on
Revenue from Operations is recognised in the Statement
an accrual method of accounting, except for the following
assets and liabilities which have been measured at fair of Profit and Loss when:
value, as required by relevant Ind AS. • The income generating activities have been carried
1. Derivative financial instruments out on the basis of a binding agreement.
2. Certain financial assets and liabilities measured at • The income can be measured reliably.
fair value (refer accounting policy regarding financial • It is probable that the economic benefits associated
instruments) with the transaction will flow to the Company.
3. Defined benefit plans • Costs relating to the transaction can be measured
2.3) Functional and presentation currency reliably.
The financial statements are prepared in Indian Rupees, Revenue for all businesses is recognized upon transfer
which is the Company’s functional and presentation of control of promised goods or services to customers in
currency. All financial information presented in Indian an amount that reflects the consideration to which the
Rupees has been rounded to the nearest lakhs with two Company expects to be entitled in exchange for the goods
decimals. and services.
2.4) Current and non-current classification Sale of fertilizer products is recognised net of returns and
The Company presents assets and liabilities in the trade discounts. Sales exclude sales tax/value added
Balance Sheet bas ed on c urrent / non-current tax/GST collected on behalf of Government. Revenue is
classification. also recognised on sale of goods in case where the
delivery is kept pending at the instance of the customer,
An asset is classified as current if it satisfies any of the
as the performance obligation has been satisfied and
following criteria:
control are transferred and customer takes title and
a) It is expected to be realised or intended to sold or accepts billing as per usual payment terms.
consumed in the Company’s normal operating
Sales of industrial products are accounted on the dispatch
cycle,
basis except export sales, which are recognised on the
b) It is held primarily for the purpose of trading, basis of bill of lading on satisfaction of performance and
c) It is expected to be realised within twelve months transfer of control.
after the reporting period, or The amounts receivable from various agencies are
d) It is a cash or cash equivalent unless restricted accounted for on accrual basis except interest on delayed
from being exchanged or used to settle a liability payments, refunds from customs & excise authorities,
for atleast twelve months after the reporting period. insurance claims (other than marine claims), etc. where

58TH ANNUAL REPORT 2019-20 95

 Notes to the Financial Statements

it is not possible to ascertain the income with reasonable Current tax items are recognised in correlation to the
accuracy or in absence of finality of the transaction. underlying transaction either in OCI or directly in equity.
Revenues in excess of invoicing are classified as contract Management periodically evaluates positions taken in the
assets (referred as unbilled revenue) while invoicing in tax returns with respect to situations in which applicable
excess of revenues are classified as contract liabilities tax regulations are subject to interpretation and
(which we refer to as unearned revenues). establishes provisions where appropriate.
Subsidy income Deferred tax
Urea subsidy income is recognised on the basis of the Deferred income tax is provided in full, using the liability
rates notified from time to time by the Government of method, on temporary differences arising between the
India on the quantity of fertilisers sold by the Company for tax bases of assets and liabilities and their carrying
the period for which notification has been issued, further amounts in the financial statements. Deferred income tax
adjusted for input price escalation/de-escalation estimated is determined using tax rates (and laws) that have been
by management, based on prescribed norms as notified enacted or substantially enacted by the end of the reporting
by Govt. of India. period and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax
Subsidy on Phosphatic and Potassic (P&K) fertilizers is
liability is settled.
recognized as per concession rates notified by the
Government of India in accordance with Nutrient Based Deferred tax assets are recognised for all deductible
Subsidy Policy from time to time and Freight subsidy has temporary differences and unused tax losses only if it is
been ac c ounted for in line with the polic y of the probable that future taxable amounts will be available to
Government of India. utilise those temporary differences and losses.
Subsidy on City Compost is recognized based on rates, Deferred tax assets and liabilities are offset when there is
as notified by the Government of India. a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate
Interest income
to the same taxation authority. Current tax assets and
For all debt instruments measured either at amortised tax liabilities are offset where the entity has a legally
cost or at fair value through other comprehensive income, enforceable right to offset and intends either to settle on a
interest income is recorded using the effective interest net basis, or to realise the asset and settle the liability
rate (EIR), which is the rate that exactly discounts the simultaneously.
estimated future cash payments or receipts over the
Current and deferred tax is recognised in profit or loss,
expected life of the financial instrument or a shorter period,
except to the extent that it relates to items recognised in
where appropriate, to the gross carrying amount of the
other comprehensive income or directly in equity. In this
financial asset or to the amortised cost of a financial
case, the tax is also recognised in other comprehensive
liability. Interest income is included in other income in the income or directly in equity, respectively.
statement of profit and loss.
The Company recognizes tax credits in the nature of
Dividends Minimum Alternate Tax (MAT) credit entitlement only to
Dividend income is accounted for when the right to receive the extent that it is probable that the Company will pay
the s ame is es tablished, whic h is generally when normal income tax during the specified period, i.e., the
shareholders approve the dividend. period for which tax credit is allowed to be carried forward,
Insurance Claims sufficient to utilize the MAT credit entitlement. The carrying
amount of tax credit is reviewed at each reporting date as
Claims receivable on account of insurance are accounted
stated above.
for to the extent no significant uncertainty exist for the
measurement and realisation of the amount. 3.3 Non-current assets held for sale
Rental Income The Company classifies non-current assets as held for
sale if their carrying amounts will be recovered principally
Rental income arising from operating leases is accounted
through a sale rather than through continuing use. The
for on a straight-line basis over the lease terms and is
Company treats sale of the asset to be highly probable
included in revenue in the statement of profit or loss due
when:
to its operating nature.
 The appropriate level of management is committed
3.2 Taxes:
to a plan to sell the asset,
Tax expense comprises of current income tax & deferred
tax  An ac tiv e programme to loc ate a buy er and
complete the plan has been initiated,
Current income tax
 The sale is expected to qualify for recognition as a
Current income tax assets and liabilities are measured at
completed sale within one year from the date of
the amount expected to be recovered from or paid to the
taxation authorities, based on the rates and tax laws classification, and
enacted or substantively enacted, at the reporting date in  Actions required to complete the plan indicate that
India where the entity operates and generates taxable it is unlikely that significant changes to the plan will
income. be made or that the plan will be withdrawn.

96 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

Non-current assets held for sale are measured at the Research and Development
lower of their carrying amount and the fair value less Capital expenditure on Research & Development activities
costs to sell. Assets and liabilities classified as held for is included in Property, plant and equipment to the extent
sale are presented separately in the balance sheet. it has alternative economic use. Revenue expenditure
Property, plant and equipment and intangible assets once pertaining to research activity is charged under respective
classified as held for sale are not depreciated or amortised. account heads in the statement of Profit & Loss.
3.4 Property, plant and equipment and intangible assets Depreciation methods, estimated useful lives and
residual value
Freehold land is carried at historical cost. All other items
of property, plant and equipment are stated at historical Depreciation on Property, plant and equipment is provided
cost less accumulated depreciation. Historical cost on Straight Line Method as per the useful life prescribed
includes expenditure that is directly attributable to the in Schedule II to the Company’s Act, 2013. Depreciation
acquisition of the items. on additions to Property, plant and equipment and assets
disposed off/discarded is charged on pro-rata basis.
Subsequent costs are included in the asset’s carrying
Depreciation on commissioning of plants and other assets
amount or rec ognised as a s eparate as set, as
of new projects is charged for the days they are actually
appropriate, only when it is probable that future economic
available for use.
benefits associated with the item will flow to the Company
and the cost of the item can be measured reliably. Such The useful lives have been determined based on technical
cost includes the cost of replacing part of the plant and evaluation done by the management’s expert which are
equipment. When significant parts of plant and equipment higher than those s pec ified by Schedule II to the
are required to be replaced at intervals, the company Companies Act; 2013, in order to reflect the actual usage
depreciates them separately based on their specific useful of the assets. The residual values are not more than 5%
lives. Items of stores and spares that meet the definition of the original cost of the asset.
of property, plant and equipment are capitalized at cost. The assets’ residual values and estimated useful lives
Otherwise, such items are classified as inventories. The are reviewed, and adjusted if appropriate, at the end of
carrying amount of any component accounted for as a each reporting period.
separate asset is derecognised when replaced. All other
repairs and maintenance are charged to profit or loss An asset’s carrying amount is written down immediately
during the reporting period in which they are incurred to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
Assets under erection / installation of the existing projects
and on-going projects are shown as “Capital Work in Leasehold land, other than that on perpetual lease, is
Progress”. amortized over the life of the lease.
Capital advances given for procurement of Property, plant Intangible assets are amortized over their estimated
and equipment are treated as other non-current assets. economic lives but not exceeding ten years on a straight-
line basis.
In the absence of availability of specific original cost in
respect of a part of assets capitalised under turn-key The useful lives of the property, plant and equipment are
contracts, the original value of such asset written / as follows:
disposed off is estimated on the basis of its current cost Assets Estimated Useful life
adjusted for price and technological factors.
Freehold Land —
Major cost of civil works required as plant and machinery
Leasehold Land 20 years
s upports , on the bas is of tec hnical estimates, is
considered as Plant & Machinery. Buildings 30-60 years

Intangible assets Bridge, culverts,bunders,etc. 30 years

Roads 5-10 years
Intangible assets are recognised when it is probable that
the future economic benefits that are attributable to the Plant and machinery 15-25 years
assets will flow to the Company and the cost of the asset Furniture and fittings 10 years
can be measured reliably. Motor Vehicles 5-10 years
Intangible assets acquired separately are measured on Railway sidings 15 years
initial recognition at cost. Following initial recognition,
Office equipment 5 years
intangible assets are carried at cost less any accumulated
amortisation and accumulated impairment losses, if any. Computers and Data Processing units 3-6 years
Cost of intangible assets comprises of purchase price Laboratory equipment 10 years
and attributable expenditure on making the asset ready
Electrical Installation and Equipment 10 years
for its intended use. Internally generated intangibles,
exc luding c apitalised dev elopment c os ts, are not Library books 15 years
capitalised and the related expenditure is reflected in profit An item of property, plant and equipment is derecognized
or loss in the period in which the expenditure is incurred. upon disposal or when no future economic benefits are

58TH ANNUAL REPORT 2019-20 97

 Notes to the Financial Statements

expected to arise from the continued use of the asset. 3.6 Borrowing costs
Any gain or loss arising on the disposal or retirement of
Borrowing costs directly attributable to the acquisition,
an item of property, plant and equipment is determined as
construction or production of an asset that necessarily
the difference between the sales proceeds and the
takes a substantial period of time to get ready for its
carrying amount of the asset and is recognised in profit
intended use or sale are capitalised as part of the cost of
or loss.
the asset. All other borrowing costs are expensed in the
3.5 Impairment of non-financial assets period in which they occur. Borrowing costs consist of
interest and other costs that an entity incurs in connection
The Company assesses, at each reporting date, whether
with the borrowing of funds. Borrowing cost also includes
there is an indication that an asset may be impaired. If
exchange differences to the extent regarded as an
any indication exists, or when annual impairment testing
adjustment to the borrowing costs.
for an asset is required, the Company estimates the
asset’s recoverable amount. An asset’s recoverable 3.7 Leases
amount is the higher of an asset’s or cash-generating
Transition
unit’s (CGU) fair value less costs of disposal and its
value in use. Recoverable amount is determined for an Effective April 01, 2019, the company adopted Ind As 116
individual asset, unless the asset does not generate cash “leases” and applied the standard to all applicable lease
inflows that are largely independent of those from other contracts existing on April 1, 2019 using the modified
assets or Company’s of assets. When the carrying retrospective method with cumulative effect of initially
amount of an asset or CGU exceeds its recoverable applying the standard recognised on the date of initial
amount, the asset is considered impaired and is written application. Accordingly, company has not restated
down to its recoverable amount. comparative information and recognised right of use
assets at an amount equal to lease liability.
Recoverable amount is determined:
The Company’s lease asset primarily consists of leases
(i) In case of individual asset, at higher of the fair
for buildings. The Company assesses whether a contract
value less cost to sell and value in use; and
contains a lease, at inception of a contract. A contract is,
(ii) In case of cash-generating unit (a Company of or contains, a lease if the contract conveys the right to
assets that generates identified, independent cash control the use of an identified asset for a period of time in
flows), at the higher of the cash-generating unit’s exchange for consideration. To assess whether a contract
fair value less cost to sell and the value in use. conveys the right to control the use of an identified asset,
the Company assesses whether: (i) the contract involves
In assessing value in use, the estimated future cash
the use of an identified asset (ii) the Company has
flows are discounted to their present value using a pre-
substantially all of the economic benefits from use of the
tax dis c ount rate that reflec ts c urrent market
asset through the period of the lease and (iii) the Company
assessments of the time value of money and the risks
has the right to direct the use of the asset.
specific to the asset. In determining fair value less costs
of disposal, recent market transactions are taken into Company as a lessee
account. If no such transactions can be identified, an
At the date of commencement of the lease, the Company
appropriate valuation model is used. These calculations
rec ogniz es a right-of-use as set (“ROU”) and a
are corroborated by valuation multiples, quoted share
corresponding lease liability for all lease arrangements in
prices for publicly traded companies or other available
which it is a lessee, except for leases with a term of
fair value indicators.
twelve months or less (short-term leases) and low value
The Company bases its impairment calculation on detailed leases. For these short-term and low value leases, the
budgets and forecast calculations, which are prepared Company recognizes the lease payments as an operating
separately for each of the Company’s CGUs to which the expense.
individual assets are allocated. These budgets and The right-of-use assets are initially recognized at cost,
forecast calculations generally cover a period of five which comprises the initial amount of the lease liability
years. For longer periods, a long-term growth rate is adjusted for any lease payments made at or prior to the
calculated and applied to project future cash flows after commencement date of the lease plus any initial direct
the fifth year. costs less any lease incentives. They are subsequently
Impairment losses including impairment on inventories, measured at cost less accumulated depreciation and
are recognised in the statement of profit and loss, except impairment losses.
for properties previously revalued with the revaluation Right-of-use as sets are depreciated from the
surplus taken to OCI. For such properties, the impairment commencement date on a straight-line basis over the
is recognised in OCI up to the amount of any previous shorter of the lease term and useful life of the underlying
revaluation surplus. asset. Right of use assets are evaluated for recoverability
Intangible assets with indefinite useful lives are tested for whenever events or changes in circumstances indicate
impairment annually at the CGU level, as appropriate, that their carrying amounts may not be recoverable. For
and when circumstances indicate that the carrying value the purpose of impairment testing, the recoverable amount
may be impaired. (i.e. The higher of the fair value less cost to sell and the

98 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

value-in-use) is determined on an individual asset basis Contributions paid/payable for Provident

unless the asset does not generate cash flows that are Fund of eligible employees and National
largely independent of those from other assets. In such Pension Sc heme is recognized in the
cases, the recoverable amount is determined for the Cash statement of Profit and Loss each year. The
Generating Unit (CGU) to which the asset belongs. Company has an obligation to make good
the shortfall, if any, between the return from
The lease liability is initially measured at amortized cost the investments of the trusts and the interest
at the present value of the future lease payments. The rate notified by Government.
lease payments are discounted using the interest rate
implicit in the lease or, if not readily determinable, using Liability on account of such shortfall, if any,
the incremental borrowing rates. Lease liabilities are is provided for bas ed on the actuarial
remeasured with a corresponding adjustment to the related valuation carried out as at the end of the
right of use asset if the Company changes its assessment year.
if whether it will exercise an extension or a termination (b) Defined benefit plans
option.
A defined benefit plan is a post-employment
Lease liability and ROU asset have been separately benefit plan other than a defined contribution
presented in the Balance Sheet and finance cost portion plan. The Company’s net obligation in respect
of lease payments have been classified as financing cash of defined benefit plans is calculated
flows. separately for each plan by estimating the
amount of future benefit that employees have
Company as a lessor
earned in the current and prior periods,
At the inception of the lease, the Company classifies discounting that amount and deducting the
each of its leases as either an operating lease or a finance fair value of any plan assets.
lease. The Company recognises lease payments received
Post employment defined benefits plans
under operating leases as income over the lease term on
comprise of gratuity, superannuation and
a straight-line basis.
Post Retirement Medical Benefit for eligible
3.8 Inventories employ ees of the Company . Pos t
employment benefits are recognized as an
Items of inventories are measured at lower of cost and
expense in the statement of profit and loss
net realisable value after providing for obsolescence, if
for the year in which the employee has
any. Cost of inventories comprises of cost of purchase,
rendered s erv ic es . The Company als o
cost of conversion and other costs including manufacturing
contributes to a government administered
overheads incurred in bringing them to their respective
Family Pens ion fund on behalf of its
present location and condition. Cost of raw materials,
employees. The calculation of defined benefit
process chemicals, stores and spares, packing materials, obligation is performed annually by a qualified
trading and other products are determined on weighted actuary us ing the projec ted unit c redit
average basis. method.
Net realisable value represents the estimated selling price Remeasurements of the net defined benefit
(including subsidy income, where applicable) of inventories liability, which comprise actuarial gains and
less all estimated costs of completion & costs necessary losses, the return on plan assets (excluding
to make the sale. interest) and the effect of the asset ceiling (if
3.9 Employee benefits any, excluding interest), are recognised in
OCI. Re-measurement in OCI is reflected
(i) Short-term employee benefits immediately in retained earnings and is not
Short term employee benefits are recognized as reclassified to profit & loss.
an expense at the undiscounted amount in the (iii) Other long-term employee benefits
statement of profit and loss of the year in which the
related service is rendered. Other long-term employee benefits comprise
of leave encashment for eligible employees
(ii) Post Employment benefits of Company. The obligation is measured on
(a) Defined contribution plans the basis of an annual independent actuarial
valuation using the projected unit credit
A defined contribution plan is a post- method. Remeasurements gains or losses
employment benefit plan under which an are recognised in profit or loss in the period
entity pays fixed contributions into a separate in which they arise.
entity and will have no legal or constructive
obligation to pay further amounts . The 3.10 Financial instruments
Company has set up separate recognized A financial instrument is any contract that gives rise to a
Provident Fund trusts for all the units of the financial asset of one entity and a financial liability or
Company. equity instrument of another entity.

58TH ANNUAL REPORT 2019-20 99

 Notes to the Financial Statements

(A) Financial Assets Amortised cost is calculated by taking into

acc ount any dis count or premium on
The Company determines the classification of its
acquisition and fees or costs that are an
financial as s ets at initial rec ognition. The
integral part of the EIR. The EIR amortisation
classification depends on the Company’s business
is included in finance income in the statement
model for managing the financial assets and the
of profit or loss. The losses arising from
contractual terms of the cash flows.
impairment are recognised in the Statement
The financial assets are classified in the following of Profit or Loss in other income.
measurement categories:
(ii) Fair value through other comprehensive
a) Those to be measured subsequently at fair income
value (either through other comprehensive
Financial assets that are held for collection
income, or through profit or loss), and
of contractual cash flows and for selling the
b) Those to be measured at amortised cost. financial assets, where the assets’ cash
For assets measured at fair value, gains and losses flows represent solely payments of principal
will either be recorded in profit or loss or other and interest, are measured at fair value
comprehensive income. For investments in debt through other c omprehensive income.
instruments, this will depend on the business model Movements in the carrying amount are taken
in which the investment is held. For investments in through other c omprehensive income,
equity instruments, this will depend on whether the except for the recognition of impairment gains
Company has made an irrevocable election at the or losses, interest revenue and foreign
time of initial recognition to account for the equity exc hange gains and los s es whic h are
inv es tment at fair value through other rec ognis ed in profit or loss . When the
comprehensive income. financ ial ass et is derecognised, the
c umulative gain or los s previously
At initial recognition, the Company measures a recognised in other comprehensive income
financial asset at its fair value plus, in the case of a is reclassified from equity to profit or loss
financial asset not at fair value through profit or and recognis ed in other gains/(los ses ).
loss, transaction costs that are directly attributable Interest income from these financial assets
to the acquisition of the financial asset. Transaction is included in other income using the effective
costs of financial assets carried at fair value
interest rate method.
through profit or loss are expensed in profit or loss
as incurred. (iii) Financial assets at fair value through
profit or loss
Subsequent measurement of debt instruments
depends on the Company’s business model for The Company c las sifies the following
managing the as s et and the c as h flow financial assets at fair value through profit or
characteristics of the asset. There are three loss:
measurement categories into which the Company a) Debt investments that do not qualify
classifies its debt instruments. for measurement at amortised cost;
(i) Amortised Cost b) Debt investments that do not qualify
The Company classifies its financial assets for measurement at fair value through
as at amortised cost only if both of the other comprehensive income; and
following criteria are met:
c) Debt inv es tments that hav e been
a) The asset is held within a business designated at fair value through profit
model with the objective of collecting or loss.
the contractual cash flows, and
Financial assets at fair value through profit
b) The contractual terms give rise on or loss include financial assets held for
specified dates to cash flows that are trading, debt securities and financial assets
s olely pay ments of princ ipal and designated upon initial recognition at fair
interest on the principal outstanding. value through profit or loss. Financial assets
Financial assets at amortised cost include at fair value through profit or loss are carried
loans receivable, trade and other in the Balance Sheet at fair value with net
receivables, and other financial assets that changes in fair value presented as finance
are held with the objective of collecting c os ts in profit or loss if the same is
c ontrac tual c as h flows . After initial considered as an adjustment to borrowing
measurement at fair value, the financial cost. Interests, dividends and gain/loss on
assets are measured at amortised cost using foreign exchange on financial assets at fair
the effective interest rate (EIR) method, less value through profit or loss are included
impairment. separately in other income.

100 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

If Company elects to present fair value gains shortfall is the difference between the cash
and losses on equity investments in other flows that are due in accordance with the
c omprehens ive inc ome, there is no c ontract and the c as h flows that the
subsequent reclassification of fair value gains company expects to receive. The expected
and losses to profit or loss. Dividends from credit losses consider the amount and timing
s uc h inv es tments shall c ontinue to be of payments and hence, a credit loss arises
recognised in profit or loss as other income even if the Company expects to receive the
when the Company ’s ’ right to receiv e pay ment in full but later than when
pay ments is establis hed. There are no contractually due. The expected credit loss
impairment requirements for equity method requires to assess credit risk, default
investments measured at fair value through and timing of collection since initial recognition.
other comprehensive income. Changes in This requires recognising allowance for
the fair value of financial assets at fair value expected credit losses in profit or loss even
through profit or loss shall be recognised in for receivables that are newly originated or
other gain/(losses) in the statement of profit acquired.
or loss as applicable.
Impairment of financial assets is measured
Investments in subsidiaries, joint ventures as either 12 month expected credit losses
and associates or life time expected credit losses, depending
Investments in subsidiaries, joint ventures on whether there has been a significant
and associates is carried at deemed cost in increase in credit risk since initial recognition.
the separate financial statements. ‘12 month expected credit losses’ represent
the expected credit losses resulting from
Derecognition of financial assets
default events that are possible within 12
The Company derecognises a financial months after the reporting date. ‘Lifetime
asset when the contractual rights to the cash expec ted c redit los s es ’ represent the
flows from the assets expire, or when it expected credit losses that result from all
trans fers the financ ial ass et and possible default events over the expected
substantially all the risks and rewards of life of the financial asset.
ownership of the asset to another party. If
the Company neither transfers nor retains Trade receivables are of a short duration,
substantially all the risks and rewards of normally less than 12 months and hence the
ownership and continues to control the los s allowanc e measured as lifetime
transferred asset, the Company recognises expected credit losses does not differ from
its retained interest in the as set and that measured as 12 month expected credit
associated liability for amounts it may have losses. The Company uses the practical
to pay. If the Company retains substantially ex pedient in Ind AS 109 for measuring
all the risks and rewards of ownership of the expected credit losses for trade receivables
transferred financial asset, the Company using a provision matrix based on ageing of
continues to recognise the financial asset receivables.
and also recognises a c ollateralised The Company uses his toric al los s
borrowing for the proceeds received. experience and derived loss rates based on
Impairment of Financial Assets the pas t twelve months and adjus t the
historical loss rates to reflect the information
The Company applies expected credit loss
about current conditions and reasonable and
(ECL) model for meas urement and
supportable forecasts of future economic
recognition of impairment loss on the following
conditions. The loss rates differ based on
financial assets and credit risk exposure:
the ageing of the amounts that are past due
a) Financ ial as s ets that are debt and are generally higher for those with the
ins truments and are meas ured at higher ageing.
amortised cost e.g., loans, deposits,
trade receivables and bank balance. Interest income

b) Trade receivables or any contractual For all financial instruments measured at

right to receive cash or other financial amortised cost and interest bearing financial
asset that result from transactions that assets, interest income is recognised using
are within the scope of Ind AS 18. the effective interest rate (EIR), which is the
rate that discounts the estimated future cash
An expected credit loss is the probability- receipts through the expected life of the
weighted es timate of credit loss es (i.e. financial instrument or a shorter period,
present value of all cash shortfalls) over the where appropriate, to the net carrying amount
expected life of the financial asset. A cash of the financial asset.

58TH ANNUAL REPORT 2019-20 101

 Notes to the Financial Statements

When a loan and receivable is impaired, the Financial liabilities measured at amortised cost
Company reduces the carrying amount to Financial liabilities are initially recognised at fair
its recoverable amount, being the estimated value, net of transaction cost incurred and are
future cash flow discounted at the original subsequently measured at amortised cost, using
EIR of the instrument, and c ontinues the EIR method. Any difference between the
unwinding the discount as interest income. proceeds net of transaction costs and the amount
Interest income on impaired financial asset due on settlement or redemption of borrowings is
is recognised using the original EIR. recognised over the term of the borrowing.
Dividends The effective interest method is a method of
calculating the amortised cost of a debt instrument
Dividends are recognised as revenue when
and of allocating interest charge over the relevant
the right to receive payment is established. effective interest rate period. The effective interest
Cash and cash equivalents rate is the rate that exactly discounts estimated
future cash outflow (including all fees and points
Cash and cash equivalents comprise cash paid or received that form an integral part of the
on hand and call deposits, and other short- effective interest rate, transaction costs and other
term highly liquid investments that are readily premiums or discounts) through the expected life
convertible to a known amount of cash and of the debt instrument, or, where appropriate, a
are subject to an insignificant risk of changes shorter period, to the net carrying amount on initial
in value. recognition.
(B) Financial Liabilities Derecognition of financial liabilities
The Company determines the classification of its A financial liability is derec ognised when the
financial liabilities at initial recognition. obligation under the liability is disc harged or
cancelled or expires. When an existing financial
Classification liability is replaced by another from the same lender
The Company classifies all financial liabilities as on substantially different terms, or the terms of an
subsequently measured at amortised cost, except existing liability are substantially modified, such an
for financial liabilities at fair value through profit or exc hange or modification is treated as a
loss. Such liabilities, including derivatives that are derecognition of the original liability and the
recognition of a new liability, and the difference in
liabilities, shall be subsequently measured at fair
the respective carrying amounts is recognised in
value.
the Statement of Profit and Loss.
Initial recognition and measurement
(C) Offsetting financial instruments
Financ ial liabilities are c las sified, at initial Financial assets and liabilities are offset and the
recognition, as financial liabilities at fair value through net amount reported in the Balance Sheet when
profit or loss. Loans and borrowings, payables are there is a legally enforceable right to offset the
subsequently measured at amortised cost where recognised amounts and there is an intention to
as derivatives are measured at fair value through settle on a net basis or realise the asset and settle
profit and loss. the liability simultaneously. The legally enforceable
right must not be contingent on future events and
All financial liabilities are recognised initially at fair
must be enforc eable in the normal course of
value and, in the case of loans and borrowings and
business and in the event of default, insolvency or
payables, net of directly attributable transaction bankruptcy of the company or the counter party.
costs.
(D) Derivative financial instruments
The Company’s financial liabilities include trade and
other payables, loans and borrowings including The Company’s activities expose it to the financial
bank overdrafts, financial guarantee contracts and risks of changes in foreign exchange rates and
interest rates. The use of financial derivatives is
derivative financial instruments.
governed by the Company’s policies approved by
Financial liabilities at fair value through profit the Board of Directors, which prov ide written
and loss princ iples on the use of financial derivativ es
consistent with the Company’s risk management
Financial liabilities at fair value through profit and
strategy. Changes in values of all derivatives of a
loss include financial liabilities to hedge risks which financing nature are included within financing costs
are not designated as hedges. At initial recognition, if the s ame is considered as adjus tment to
the Company measures financial liabilities at its borrowing cost in the Statement of Profit and Loss
fair value. Financial liabilities at fair value through whereas other foreign exchange fluctuation is
profit and loss are carried in the Balance Sheet at disclosed under other expenses. The Company
fair value with changes recognised in the Statement does not use derivative financial instruments for
of Profit and Loss. speculative purposes.

102 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

Derivativ e financial ins truments are initially the purpose of the statement of cash flows, cash and
measured at fair value on the contract date and cash equivalents consist of cash and short-term deposits,
are subsequently remeasured to fair value at each as defined above.
reporting date.
3.13 Segment accounting:
(E) Equity investments
The Chief Operational Decision Maker monitors the
All equity investments in scope of Ind AS 109 are operating results of its business Segments separately
measured at fair value. For equity instruments, the for the purpose of making decisions about resource
company may make an irrevocable election to alloc ation and performanc e as sess ment. Segment
present in other comprehensive income subsequent performance is evaluated based on profit or loss and is
changes in the fair value. The classification is made measured consistently with profit or loss in the financial
on initial recognition and is irrevocable. statements.
If the company decides to classify an equity The Operating segments have been identified on the basis
instrument as at FVTOCI, then all fair value changes of the nature of products/services.
on the ins trument, exc luding div idends , are
recognized in the OCI. There is no recycling of the The accounting policies adopted for segment reporting
amounts from OCI to P&L, ev en on s ale of are in line with the accounting policies of the Company.
investment. However, the company may transfer Segment revenue, segment expenses, segment assets
the cumulative gain or loss within equity. and segment liabilities have been identified to segments
on the basis of their relationship to the operating activities
Equity instruments included within the FVTPL
of the segment. Inter Segment revenue is accounted on
category are measured at fair value with all changes
the basis of transactions which are primarily determined
recognized in the P&L.
based on market/fair value factors. Revenue, expenses,
3.11 Foreign currencies assets and liabilities which relate to the Company as a
(a) Functional and presentation currency whole and are not allocated to segments on a reasonable
basis have been included under “unallocated revenue /
The financial statements are presented in Indian expenses / assets / liabilities”.
Rupees, which is the Company’s functional and
presentation currency. Each entity in the Company The Company has identified two reportable business
determines its own func tional currenc y (the segments i.e. Fertilizer products and Industrial products.
currency of the primary economic environment in The Company operates mainly in Indian market and there
which the entity operates) and items included in are no reportable geographical segments.
the financ ial s tatements of each entity are
3.14 Provisions, Contingent liabilities, Contingent assets
measured using that functional currency.
and Commitments:
(b) Transactions and balances
Provisions are recognised only when the Company has
Transactions in foreign currencies are initially a present obligation (legal or constructive) as a result of
recorded at the exchange rate prevailing at the a past event, it is probable that an outflow of resources
date of the transaction. Monetary assets and embodying economic benefits will be required to settle
liabilities denominated in foreign currencies are the obligation and a reliable estimate can be made of the
retranslated into the respective functional currency amount of the obligation. When the Company expects
of the entity at the rates prevailing on the reporting some or all of a provision to be reimbursed, for example,
date. under an insurance contract, the reimbursement is
Foreign exchange gains and losses resulting from recognised as a separate asset, but only when the
the settlement of such transactions and from the reimbursement is virtually certain. The expense relating
translation at reporting date exchange rates of to a provision is presented in the statement of profit and
monetary assets and liabilities denominated in loss net of any reimbursement.
foreign currencies are recognised in the Statement
If the effect of the time value of money is material,
of Profit and Loss.
provisions are discounted using a current pre-tax rate
Foreign exchange gains and losses that relate to that reflects, when appropriate, the risks specific to the
borrowings and cash and cash equivalents are liability. When discounting is used, the increase in the
presented in the Statement of Profit and Loss within provision due to the passage of time is recognised as a
‘Finance costs’. All other foreign exchange gains finance cost.
and losses are presented in the Statement of Profit
and Loss within ‘Other operating expenses’. Contingent liability is disclosed in the case of:

3.12 Cash and cash equivalents • A present obligation arising from the past events,
when it is not probable that an outflow of resources
Cash and cash equivalent in the balance sheet comprise will be required to settle the obligation;
cash at banks and on hand and short-term deposits with
an original maturity of three months or less, which are • A present obligation arising from the past events,
subject to an insignificant risk of changes in value. For when no reliable estimate is possible;

58TH ANNUAL REPORT 2019-20 103

 Notes to the Financial Statements

• A possible obligation arising from the past events, there is no significant change in the useful lives as
unless the probability of outflow of resources is compared to previous year.
remote.
Allowance for expected credit losses:
Commitments include the amount of purchase order (net
Note 41 describes the use of practical expedient by
of advances) issued to parties for completion of assets.
computing the expected credit loss allowance for trade
Provisions, contingent liabilities, contingent assets and receivables other than subsidy receivables based on
commitments are reviewed at each balance sheet date. provision matrix. The expected credit allowance is based
on the aging of the days receivables are due and the
3.15 Earnings per share
rates derived based on past history of defaults in the
Basic earnings per share are calculated by dividing the provision matrix.  As regards subsidy receivables, the
net profit for the period attributable to equity shareholders Company does not believe that there is any credit risk as
by the weighted average number of equity shares dues are receivable from the Government and hence no
outstanding during the period. Earnings considered in allowance for expected credit loss is made.   
ascertaining the Company’s earnings per share is the
Dismantling cost of property, plant and equipment:
net profit for the period after deducting preference
dividends and any attributable tax thereto for the period. Note 22 describes assets retirement obligation on estimate
The weighted av erage number of equity s hares basis for property, plant and equipment. The management
outstanding during the period and for all periods presented estimates dismantling cost considering size of the asset
is adjusted for events, such as bonus shares, other than and its useful life in line with industry practices.
the conversion of potential equity shares that have
Stores and spares inventories:
changed the number of equity shares outstanding, without
a corresponding change in resources. The Company’s manufacturing process is continuous
and highly mechanical with wide range of different types
For the purpose of calculating diluted earnings per share,
of plant and machineries. The Company keeps stores
the profit or loss for the period attributable to equity
and spares as standby to continue the operations without
shareholders and the weighted average number of shares
any disruption. Considering wide range of stores and
outstanding during the period is adjusted for the effects of
spares and long lead time for procurement of it and based
all dilutive potential equity shares.
on criticality of spares, the Company believes that net
3.16 Cash flow statement realizable value would be more than cost.
Cash flow are reported using the indirect method, whereby Fair value of investments:
net profit before tax is adjus ted for the effects of
The Company has invested in the equity instruments of
transactions of a non-cash nature, any deferrals of
v arious companies . However, the percentage of
accruals of past or future operating cash receipts or
shareholding of the Company in some of such investee
payments and item of income or expenses associated
companies is low and hence, it has not been provided
with investing or financing cash flows. The cash flows
with future projections including projected profit and loss
from operating, investing and finance activities of the
ac count by those inv estee c ompanies. Hence, the
Company are segregated.
valuation exercise carried out by the Company with the
4. Critical and significant accounting judgements, help of an independent valuer has estimated the fair value
estimates and assumptions at each reporting period based on available historical
annual reports and other information in the public domain.
4.1 Critical estimates and judgements
In case of other companies , where there are no
The following are the critical judgements, apart from those comparable companies’ valuations available (also includes
involving estimations that the management have made in start-up companies) and no further information available
the process of applying the Company’s accounting for future projections, capacity utilisation, commencement
policies and that have the most significant effect on the of operations, etc., the method of valuation followed is
amounts recognized in the financial statements. Actual cost approach. The Company evaluates the aforesaid
results may differ from these estimates.  These estimates position at each period end.  
and underlying assumptions are reviewed on an ongoing
Income taxes:
basis. Revisions to the accounting estimates in the period
in which the estimate is revised if the revision affects only Significant judgements are involved in determining the
that period, or in the period of the revision and future provision for income taxes, including amount expected to
periods if the revision affects both current and future be paid/recovered for uncertain tax positions.
periods.
4.2 Significant accounting judgements, estimates and
Useful lives of property, plant and equipment and assumptions
intangible assets:
The preparation of the company’s financial statements
Management reviews the useful lives of depreciable requires management to make judgements, estimates
ass ets at eac h reporting. As at Marc h 31, 2020 and assumptions that affect the reported amounts of
management assessed that the useful lives represent revenues, expenses, assets and liabilities, and the
the expected utility of the assets to the Company. Further, acc ompanying disc los ures , and the dis clos ure of

104 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

contingent liabilities. Uncertainty about these assumptions are derived from the budget for the next five years and do
and estimates could result in outcomes that require a not include activities that the company is not yet committed
material adjustment to the carrying amount of assets or to or significant future investments that will enhance the
liabilities affected in future periods. asset’s performance of the Cash Generating Unit being
tested. The recoverable amount is sensitive to the
Judgements
discount rate used for the Discounted Cash Flow model
In the process of applying the company’s accounting as well as the expected future cash-inflows and the growth
policies, management has made the following judgements, rate used for extrapolation purposes.
which have the most significant effect on the amounts
Taxes
recognised in the standalone financial statements:
Deferred tax assets are recognised for unused tax losses
Determination of lease term & discount rate:
to the extent that it is probable that taxable profit will be
Ind AS 116 leases requires lessee to determine the lease available against which the losses can be utilised.
term as the non-cancellable period of a lease adjusted Signific ant management judgement is required to
with any option to extend or terminate the lease, if the use determine the amount of deferred tax assets that can be
of such option is reasonably certain. The company makes recognised, based upon the likely timing and the level of
assessment on the expected lease term on lease by future taxable profits together with future tax planning
lease basis and thereby as s es ses whether it is strategies.
reasonably certain that any options to extend or terminate
Defined benefit plans
the contract will be exercised. In evaluating the lease
term, the company c ons iders fac tor s uc h as any The cost of the defined benefit plans v iz. gratuity,
significant leasehold improvements undertaken over the superannuation for the eligible employees of the Company
lease term, costs relating to the termination of lease and are determined using actuarial valuations. An actuarial
the importance of the underlying to the company’s valuation involves making various assumptions that may
operations taking into account the location of the underlying differ from actual developments in the future. These
asset and availability of the suitable alternatives. The include the determination of the discount rate, future salary
lease term in future period is reassessed to ensure that increases and mortality rates. Due to the complexities
the leas e term reflects the c urrent economic involved in the valuation and its long-term nature, a defined
circumstances. benefit obligation is highly sensitive to changes in these
assumptions. All assumptions are reviewed at each
The discount rate is generally based on the incremental
reporting date.
borrowing rate specific to the lease being evaluated or for
a portfolio of leases with similar characteristics. The parameter most subject to change is the discount
rate. In determining the appropriate discount rate for plans
Estimates and assumptions
operated in India, the management considers the interest
The key assumptions concerning the future and other rates of government bonds in currencies consistent with
key sources of estimation uncertainty at the reporting the currencies of the post-employment benefit obligation.
date, that have a significant risk of causing a material
The mortality rate is based on publicly available mortality
adjustment to the carrying amounts of assets and liabilities
tables. Those mortality tables tend to change only at
within the next financial year, are described below. The
interval in response to demographic changes. Future
company based on its assumptions and estimates on
salary increases and gratuity increases are based on
parameters available when the financial statements were
expected future inflation rate.
prepared. Existing circumstances and assumptions about
future developments, however, may change due to market Further details about gratuity obligations are given in Note
changes or circumstances arising that are beyond the 37.
control of the company. Such changes are reflected in
Provision and contingent liability
the assumptions when they occur.
On an ongoing basis, Company reviews pending cases,
Impairment of non-financial assets
claims by third parties and other contingencies. For
Impairment exists when the carrying value of an asset or contingent losses that are considered probable, an
cash generating unit exceeds its recoverable amount, estimated loss is recorded as an accrual in financial
which is the higher of its fair value less costs of disposal statements. Loss Contingencies that are considered
and its value in use. The fair value less costs of disposal possible are not provided for but disclosed as Contingent
calculation is based on available data from binding sales liabilities in the financial statements. Contingencies the
transactions, conducted at arm’s length, for similar assets likelihood of which is remote are not disclosed in the
or observable market prices less incremental costs for financ ial s tatements . Gain c ontingenc ies are not
disposing of the asset. The value in use calculation is recognized until the contingency has been resolved and
based on a Discounted Cash Flow model. The cash flows amounts are received or receivable.

58TH ANNUAL REPORT 2019-20 105

 Notes to the Financial Statements

5. (i) Property, Plant and Equipment (` in lakhs)

GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK
PARTICULARS As at Additions Deductions/ As at As at Charge for Deductions/ As at Balance Balance
01-Apr-19 Adjustments 31-Mar-20 01-Apr-19 the year Adjustments 31-Mar-20 As at As at
31-Mar-20 31-Mar-19
Freehold land 551.47 2,691.42 - 3,242.89 - - - - 3,242.89 551.47
Leasehold land 705.30 935.26 - 1,640.56 25.60 34.23 - 59.83 1,580.73 679.70
Buildings 18,717.76 1223.28 - 19,941.04 2,174.89 681.06 - 2,855.95 17,085.09 16,542.87
Bridge, culverts,bunders,etc. 0.18 - - 0.18 0.08 0.01 - 0.09 0.09 0.10
Roads 409.28 6.17 - 415.45 44.80 30.78 - 75.58 339.87 364.48
Plant and machinery 2,79,943.32 18043.33 2971.17 2,95,015.48 37,403.64 13700.32 2519.22 48,584.74 2,46,430.74 2,42,539.68
Furniture and fittings 7,180.57 56.75 8.41 7,228.91 279.61 687.54 7.99 959.16 6,269.75 6,900.96
Motor Vehicles 240.49 10.83 11.31 240.01 135.34 22.98 10.51 147.81 92.20 105.15
Railway sidings 2,122.13 86.01 - 2,208.14 442.11 117.51 - 559.62 1,648.52 1,680.02
Office equipment 784.42 68.79 18.10 835.11 417.33 106.90 17.12 507.11 328.00 367.09
Computers and Data Processing units 524.40 107.30 73.82 557.88 186.20 96.81 70.13 212.88 345.00 338.20
Laboratory equipment 1,531.20 54.65 12.75 1,573.10 228.08 156.12 11.78 372.42 1,200.68 1,303.12
Electrical Installation and Equipment 11,069.23 1980.56 - 13,049.79 1,421.12 1070.87 - 2,491.99 10,557.80 9,648.11
Library books 16.96 - - 16.96 7.67 1.51 - 9.18 7.78 9.29
TOTAL 3,23,796.71 25,264.35 3,095.56 3,45,965.50 42,766.47 16,706.64 2,636.75 56,836.36 2,89,129.14 2,81,030.24
Capital work in progress 10,685.10 18,702.38

GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK

PARTICULARS As at Additions Deductions/ As at As at Charge for Deductions/ As at Balance Balance
01-Apr-18 Adjustments 31-Mar-19 01-Apr-18 the year Adjustments 31-Mar-19 As at As at
31-Mar-19 31-Mar-18
Freehold land 551.47 - - 551.47 - - - - 551.47 551.47
Leasehold land 705.30 - - 705.30 19.19 6.41 - 25.60 679.70 686.11
Buildings 17,830.15 892.94 5.33 18,717.76 1,525.44 652.46 3.01 2,174.89 16,542.87 16,304.71
Bridge, culverts,bunders,etc. 0.18 - - 0.18 0.06 0.02 - 0.08 0.10 0.12
Roads 138.48 270.80 - 409.28 37.99 6.81 - 44.80 364.48 100.49
Plant and machinery 2,10,468.56 69579.61 104.85 2,79,943.32 26,946.23 10554.68 97.27 37,403.64 2,42,539.68 1,83,522.33
Furniture and fittings 601.41 6594.07 14.91 7,180.57 158.62 135.16 14.17 279.61 6,900.96 442.79
Motor Vehicles 200.27 57.70 17.48 240.49 120.45 31.50 16.61 135.34 105.15 79.82
Railway sidings 2,122.13 - - 2,122.13 325.95 116.16 - 442.11 1,680.02 1,796.18
Office equipment 683.29 106.98 5.85 784.42 301.48 121.72 5.87 417.33 367.09 381.81
Computers and Data Processing units 333.64 230.37 39.61 524.40 121.18 102.34 37.32 186.20 338.20 212.46
Laboratory equipment 597.04 953.57 19.41 1,531.20 169.92 74.03 15.87 228.08 1,303.12 427.12
Electrical Installation and Equipment 6,370.29 4698.94 - 11,069.23 779.71 641.41 - 1,421.12 9,648.11 5,590.58
Library books 16.96 - - 16.96 6.10 1.57 - 7.67 9.29 10.86
TOTAL 2,40,619.17 83,384.98 207.44 3,23,796.71 30,512.32 12,444.27 190.12 42,766.47 2,81,030.24 2,10,106.85
Capital work in progress 18,702.38 76,132.93

5. (ii) Right of Use Assets (` in lakhs)

GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK
PARTICULARS As at Additions Deductions/ As at As at Charge for Deductions/ As at Balance Balance
01-Apr-19 Adjustments 31-Mar-20 01-Apr-19 the year Adjustments 31-Mar-20 As at As at
31-Mar-20 31-Mar-19
Leasehold Building - 375.62 2.37 373.25 - 143.60 0.81 142.79 230.46 -
TOTAL - 375.62 2.37 373.25 - 143.60 0.81 142.79 230.46 -

106 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

Details for Right of Use Assets (` in lakhs)

Gross Block (At Cost)
As at 01-04-2019 -
Additions (Transitional impact on adoption of Ind AS 116) 361.83
Additions during the period 13.79
Disposals 2.37
As at 31-03-2020 373.25
Accumulated Depreciation
As at 01-04-2019 -
Charge for the period 143.60
Disposals 0.81
As at 31-03-2020 142.79
Net Block as at 31-03-2020 230.46

Notes
1. The Company has commissioned Ammonia Storage Tank Cap. 10000 MT at cost of ` 6527.23 Lakhs, PA Storage Tank Cap. 10000 MT ` 856.47 Lakhs and 10
MW Solar power Plant ` 4991.67 Lakhs during FY 2019-20.The company has also acquired freehold land at Motikhavdi, Jamnagar for ` 2691.42 Lakhs during
FY 2019-20.
2. Asset acquisition includes R&D assets of ` 28.66 lakhs (previous year ` 20.83 lakhs).
3. The Company has acquired land through Government and also through direct negotiations. The entire land is in possession of the Company. In respect of other
portion of land acquired through direct negotiations, compensation has been paid at the negotiated price. The Company also holds possession of a portion of land
for which no amount has been paid in absence of receipt of awards.
4. "The Company has leased a portion of its land to Bank of Baroda for bank premises at Fertilizernagar and Sikka and Gas Authority of India Ltd. (GAIL) for
establishment of CNG pumping station.“"
5. Buildings include ` 0.02 lakh being the value of shares in Co-operative Housing Societies.
6. "The Company established Sikka Jetty at its own cost, which is in operation since 1987. After due discussion with Gujarat Maritime Board (GMB), a consensus was
arrived at establishing ownership of jetty with the Company. Thereafter, in terms of resolution passed by GMB, the ownership of the jetty at Sikka was transferred
to the Company. However, during 1994, GMB has reversed its earlier decision not supported by resolution and contended that the ownership of the jetty rests with
GMB. The Company has made representation to the appropriate authority with regards to the ownership of the jetty with the Company.““The matter of deciding the
status of Jetty was under examination at GMB & Government of Gujarat levels since long back. Various meetings were also held and after due diligence on the
matter, it is decided by the Board of GMB supported by a resolution to assign the status of Captive Jetty to sikka jetty and the Company has to sign Captive Jetty
Agreement with GMB. The matter is under discussion with GMB authorities. Pending finalization of the Captive Jetty Agreement, no provision is considered
necessary in respect of various claims against the Company and counter-claims of the Company (both the amounts not determined). At present the Company is
in possession of the Jetty and continues to be the owner of the Jetty pending signing of the Agreement."

6. Intangible assets (` in lakhs)

GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK
PARTICULARS As at Additions Deductions/ As at As at Charge for Deductions/ As at Balance Balance
01-Apr-19 Adjustments 31-Mar-20 01-Apr-19 the year Adjustments 31-Mar-20 As at As at
31-Mar-20 31-Mar-19
Computer software 1,270.56 21.99 - 1,292.55 973.74 170.69 - 1,144.43 148.12 296.82
TOTAL 1,270.56 21.99 - 1,292.55 973.74 170.69 - 1,144.43 148.12 296.82

GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK

PARTICULARS As at Additions Deductions/ As at As at Charge for Deductions/ As at Balance Balance
01-Apr-18 Adjustments 31-Mar-19 01-Apr-18 the year Adjustments 31-Mar-19 As at As at
31-Mar-19 31-Mar-18
Computer software 1,234.42 36.14 - 1,270.56 857.45 116.29 - 973.74 296.82 376.97
TOTAL 1,234.42 36.14 - 1,270.56 857.45 116.29 - 973.74 296.82 376.97

58TH ANNUAL REPORT 2019-20 107

 Notes to the Financial Statements

7. Non-current investments (` in lakhs)

Praticulars As at As at
31-03-2020 31-03-2019
Inv estmen ts in equity share s of Associ ates m easure d at c ost
14,302 shares of Vadodara Enviro Channel Ltd. - ` 10 each* - -
12,50,000 shares of Gujarat Green Revolution Company Ltd. - ` 10 each 125.00 125.00
1,63,34,558 Shares of Karnalyte Resources Inc - Canadian Dollar (CAD) 4,064.38 4,064.38
Less : Provision for Impairment (Note - g) 870.03 -
3 ,3 19 .3 5 4 ,1 89 .3 8
Inves tments in equity sha res of su bsidiary m easured at cost
47,99,994 shares of GSFC Agrotech Ltd. - ` 10 each 480.00 480.00
Unquoted equity shares of other companies measured at fair value through OCI
22,50,000 Shares of Indian Potash Limited - ` 10 each (11,25,000 Bonus shares received during the year) 12,115.35 6,242.17
12,26,31,575 Shares of Gujarat Chemical Port Terminal Co. Ltd. - ` 1 each 23,263.21 23,177.37
1 Share of Gujarat State Electricity Corporation Ltd – ` 10 each (Note - b) - -
2,35,00,000 Shares of Gujarat State Petroleum Corporation Limited – ` 1 each 2,023.35 1,882.35
41,79,848 Shares of Tunisian Indian Fertilizers (TIFERT s.a.) - TND 10 each (Note - c) - -
60,000 Shares of Gujarat Venture Finance Limited – ` 10 each 101.54 89.28
50,000 Shares of Biotech Consortium India Limited – ` 10 each 20.57 19.02
1,15,000 Shares of Gujarat Data Electronics Limited - ` 10 each - -
37 ,52 4. 02 31 ,41 0. 19
Quoted equity shares of other companies measured at fair value through OCI
3,07,79,167 Shares of Gujarat Narmada Valley Fertilizers & Chemicals Ltd. - ` 10 each 35,303.70 94,168.86
2,23,62,784 Shares of Gujarat Industries Power Company Ltd. - ` 10 each 11,159.03 15,899.94
16,55,040 Shares of Gujarat Alkalies & Chemicals Ltd. - ` 10 each 3,690.74 8,164.31
4,69,14,475 Shares of Gujarat Gas Ltd. - ` 2 each 1,08,302.07 69,480.34
9,35,600 Shares of Gujarat State Financial Corporation - ` 10 each - -
11,36,000 Shares of Bandhan Bank Limited - ` 10 each (Note - d) 2,314.60 5,516.00
5,49,440 Shares of Industrial Development Bank of India - ` 10 each 106.04 256.31
5,79,000 Shares of Mangalore Chemicals & Fertilizers Ltd. - ` 10 each 140.70 234.50
1, 61 ,0 16 .8 8 1, 93 ,7 20 .2 6
To tal FVTO CI I nves tmen ts 1, 98 ,5 40 .9 0 2, 25 ,1 30 .4 5
Ot her equi ty i nves tmen ts
Tunisian Indian Fertilizers (TIFERT) (Note - f) - 1 ,7 29 .4 0
TOTAL I NVES TMEN TS 2, 02 ,3 40 .2 5 2, 31 ,5 29 .2 3
Aggregate book value of Quoted Investments 1,61,016.88 1,93,720.26
Aggregate market value of Quoted Investments 1,61,016.88 1,93,720.26
Aggregate carrying value of Unquoted Investments 41,323.37 37,808.97
Category-wise other investments-as per Ind AS 109 classification
P ar ti c ul ar s 31-03-2020 31-03-2019
Financial assets carried at fair value through profit or loss (FVTPL) - -
Financial assets carried at amortised cost 3,799.35 4,669.38
Financial assets measured at FVTOCI 1,98,540.90 2,26,859.85
TOTAL I NVES TMEN TS 2, 02 ,3 40 .2 5 2, 31 ,5 29 .2 3
Notes:
* Less than a Thousand
a) There is no change in the no of shares compare to previous year, except where specifically mentioned above under each case.
b) As per Notification of Govt of Gujarat, Bhavnagar Energy Company Ltd.(BECL) is Merged with Gujarat State Electricity Corpo. Ltd.(GSECL) As
per the Merger scheme, the company has received 1 No of share of GSECL in exchange of 7,12,20,000 No of shares of BECL. The Fair Value
of said investment is ` Nil as on 31st March 2020 & 31st March 2019.

108 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

c) The equity shares held by the Company in Tunisian Indian Fertilizers S.A., Tunisia (TIFERT) have been pledged to secure the obligations of
TIFERT to their lenders.
d) Pursuant to the scheme of Amalgamation, GRUH Finance Ltd got amalgamated with Bandhan Bank Ltd in FY 19-20. As per the share swap ratio
given in the scheme documents, 568 Share of Bandhan Bank Ltd has been allotted against 1,000 shares of Gruh Finance Ltd. Hence company
has received 11,36,000 shares of Bandhan Bank Ltd., in swap of 20,00,000 shares in Gruh Finance Ltd
e) Investments at fair value through OCI (fully paid)reflect investment in quoted and unquoted equity securities. Refer note 41 for determination of
their fair values.
f) The company has provided a loan of USD 2.50 Mn to TIFERT for procurement of critical spares and equipments. Loan has been provided with
a condition of compulsory conversion in equity shares of TIFERT after 3 years from the date of agreement and it carries an interest of daily
average LIBOR plus a margin of 225 basis points. Principal amount of the loan along with unpaid interest will be converted into equity shares of
TIFERT at face value after 3 years of agreement, accordingly the same has been classified as Investment, as in substance the nature is of the
investment.
g) Impairment Loss of ` 870.03 Lakhs has been recognised in the carrying value of investment in Karnalyte Resources Ltd. during FY 2019-20
under the head “Other Expenses” in Profit and Loss Account, taking into consideration consistent operating losses booked by the company and
its low market capitalisation. As share valuation has been carried out considering the Replacement cost method, Investment is categorised at
Level 3 of the fair value hierarchy.

8. Other non-current financial assets (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Unsecured, considered good
Other deposits* 3,000.06 4,415.80
Unsecured, considered doubtful
Deposits with companies & others 102.70 102.70
Less: Allowance for doubtful deposits (102.70) (102.70)
TOTAL 3,000.06 4,415.80
*Deposit of ` 2048.58 lakhs (Previous Year ` 1713.03 Lakhs) paid under protest against which legal cases are going
on with various Govt authorities.
9. Other non current assets (` in lakhs)
Particulars As at 31st As at 31st
March, 2020 March, 2019
Capital Advances* 31,242.46 32,200.61
Prepaid Expenses 5.70 6.03
Prepayment for Leasehold Land 883.06 957.44
Others 156.23 156.25
TOTAL 32,287.45 33,320.33
*Capital advance as on 31st March,2020 includes ` 28,576.38 lakhs (` 28,857.98 lakhs as at 31st March, 2019)
advance for leasehold land pending execution of lease deed towards plot in Dahej.

58TH ANNUAL REPORT 2019-20 109

 Notes to the Financial Statements

10. Inventories (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Raw materials 25,091.08 24,904.49
Raw materials in Transit 4,783.75 10,308.56
Work-in-Process 2,009.54 1,534.20
Finished goods 50,494.23 63,386.86
Stock in trade 24,433.11 22,169.69
Stock in trade-in Transit - 65.16
Stores and spares (including packing material) 19,426.50 20,634.09
Loose tools 25.60 22.45
TOTAL 1,26,263.81 1,43,025.50

11. Trade receivables (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Secured, considered good 1,167.33 1,052.65
Unsecured, considered good 88,004.47 94,052.96
Unsecured, credit impaired 7,413.31 6,942.39
TOTAL 96,585.11 1,02,048.00
Less: Allowance for doubtful debts (including ECL) 7,413.31 6,942.39
TOTAL 89,171.80 95,105.61
The average credit period on sale of goods is 30 to 90 days. No interest is charged on trade receivables up to the expiry
of the credit period. There after, interest is charged at 15% per annum on the outstanding balance.The company has
two customers (GSFC Agrotech Limited & Gujarat Fertilizers Dealers Association) which represents more than 5% of
the total balance of trade receivables.
The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables
based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for
forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are
due and the rates as given in the provision matrix. Refer note 41 for the provision matrix at the end of the reporting
period, ageing of receivable and movement in the expected credit loss allowance.
The concentration of credit risk is limited due to the fact that the customer base is large and unrelated. Refer note 41 for
the credit risk management by the Company.
The above balances include trade receivables from related parties ` 10109.62 Lakhs (` 17298.55 Lakhs as on 31
March 2019) Refer note 39.

12. Government subsidies receivable (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Subsidy from Government of India under New Urea Policy/Retention Price
Scheme/Nutrient Based Subsidy Scheme
Subsidy Receivable from Government 1,83,562.53 1,73,915.35
TOTAL 1,83,562.53 1,73,915.35
Less: Allowance for doubtful debts 458.29 966.38
TOTAL 1,83,104.24 1,72,948.97

110 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

13. Cash and cash equivalents (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Cash and cash equivalents
Cash on hand 7.61 4.28
Balances with banks
In current accounts 1,421.43 3,693.22
1,429.04 3,697.50

14. Other bank balances (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
In Unclaimed dividend account-restricted 544.82 544.35
In Fractional bonus account-restricted - 10.58
In Deposit accounts (original maturity more than three months) 547.43 647.57
TOTAL 1,092.25 1,202.50

If the dividend has not been claimed within 30 days from the date of its declaration, the Company is required to transfer the total amount of the dividend
which remains unpaid or unclaimed, to a special account to be opened by the Company in a scheduled bank to be called “Unpaid Dividend Account”.
The unclaimed dividend lying in such account is required to be transferred to the Investor Education and Protection Fund (IEPF), administered by the
Central Government after a period of seven years from the date of declaration. Company has transferred Unclaimed Dividend upto FY 2011 – 2012
to IEPF upto March 31, 2020.

15. Loans (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Secured, considered good
Loans to employees* 18,254.54 16,462.37
Unsecured, considered good
Advances to employees 58.83 65.15
Other loans to employees 836.57 873.53
Interest accrued 14.19 25.07
Others 62.84 19.66
19,226.97 17,445.78
Notes:
* The loans are secured by mortgage of the underlying assets and are repayable on demand.
Loans and receivables are non-derivative financial assets which generate a fixed or variable interest income for the
Company. The carrying value may be affected by changes in the credit risk of the counter parties. These financial
assets are carried at amortised cost.

58TH ANNUAL REPORT 2019-20 111

 Notes to the Financial Statements

16. Other current financial assets (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Financial assets at fair value through profit & loss
Derivatives not designated in hedging relationship
Foreign exchange derivative contracts - 9.40
Financial assets at amortised cost
Others 886.69 227.59
TOTAL 886.69 236.99

17.    Other Current Assets (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Unsecured, considered good
Balances with govt. agencies 9,970.42 12,413.70
Advances to suppliers* 8,872.06 8,367.18
Prepaid expenses 126.19 421.28
Prepayment for Lease hold lands 355.98 355.98
Advance Paid Towards Equity Contribution** 1,520.00 -
TOTAL 20,844.65 21,558.14
* includes advances to related parties ` 7242.80 lakhs (` 7027.18 lakhs as at 31st March, 2019).
** Advance towards share application money for purchase of 1,52,00,000 equity shares of Face value ` 10 each of
GSFC Agrotech Ltd.

18. Assets held for sale (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Assets classified as held for sale* 703.98 703.98
TOTAL 703.98 703.98
* Expected net realizable value is higher than carrying amount.
- The Company decided to sell plant and machinery amounting to ` 300.26 Lakhs which is of obsolete technology. The
Company expects to sell the same in near future. There is no cost to sell the asset and hence the same is not presented
seperately under liabilities.
- The company acquired possession of Residential Property located at New Delhi against outstanding receivables,
value of which amounts to ` 403.72 Lakhs.

112 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

19. Share Capital (` in lakhs)

Particulars As at 31st March 2020 As at 31st March 2019
Number Amount Number Amount
of shares of shares
Refer Note Refer Note
(a) below (a) below
Authorised
Equity Shares of ` 2/- each 1,00,00,00,000 20,000.00 1,00,00,00,000 20,000.00
Redeemable Cumulative Preference Shares of `100/- each 1,60,00,000 16,000.00 1,60,00,000 16,000.00
36,000.00 36,000.00
Issued, Subscribed and Paid up:
Issued
Equity Shares: Face value of ` 2/- each
Shares outstanding at beginning of the year 39,91,21,850 7,982.44 39,91,21,850 7,982.44
Shares outstanding at year end 39,91,21,850 7,982.44 39,91,21,850 7,982.44
Subscribed
Equity Shares: Face value of ` 2/- each
Shares outstanding at beginning of the year 39,90,69,685 7,981.39 39,90,69,685 7,981.39
Shares outstanding at year end 39,90,69,685 7,981.39 39,90,69,685 7,981.39
Paid-up
Equity Shares: Face value of ` 2/- each
Shares outstanding at beginning of the year 39,84,77,530 7,969.55 39,84,77,530 7,969.55
Shares outstanding at year end 39,84,77,530 7,969.55 39,84,77,530 7,969.55
TOTAL 39,84,77,530 7,969.55 39,84,77,530 7,969.55

a) Reconciliation of Shares outstanding at the beginning and the end of the reporting period (` in lakhs)

Particulars As at 31st March 2020 As at 31st March 2019

Number Amount Number Amount
of shares of shares
Equity Shares
At the beginning of the year 39,84,77,530 7,969.55 39,84,77,530 7,969.55
Issued / Reduction, if any during the year - - - -
Outstanding at the end of the year 39,84,77,530 7,969.55 39,84,77,530 7,969.55
b) Rights, preferences and restrictions attached to shares
Equity shares
The Company has one class of equity shares having a par value of ` 2 each. Each shareholder is eligible for one
vote per share held. The dividend proposed by Board of Directors is subject to approval of shareholders in the
ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the
remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
c) Shareholders holding more than 5% of equity share capital
Particulars As at 31st March 2020 As at 31st March 2019
Number Percentage Number Percentage
of shares of holding of shares of holding
Gujarat State Investments Limited 15,07,99,905 37.84 15,07,99,905 37.84
Life Insurance Corporation of India 3,17,97,658 7.98 3,17,97,658 7.98
Fidelity Puritan Trust-Fidelity Low priced stock fund 2,85,00,000 7.15 2,85,00,000 7.15

58TH ANNUAL REPORT 2019-20 113

 Notes to the Financial Statements

d) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years
immediately preceding the reporting date : NIL
e) Calls Unpaid: NIL, Forfeited Shares : ` 11.84 Lakhs
20. Other equity (` in lakhs)
Reserves & Surplus Items of OCI
Particulars Capital Security Capital General Retained Equity Total Equity
reserve premium redemption reserve earnings Instruments
reserve through
OCI
Balance as at April 01, 2018 1,256.33 30,524.02 3,335.00 4,46,153.31 43,206.47 1,93,750.09 7,18,225.22
Profit for the year - - - - 49,368.45 - 49,368.45
Other comprehensive income for the year net of income tax - - - - - (37,373.54) (37,373.54)
Other comprehensive income arising from remeasurement of defined
benefit obligation net of income tax - - - - (837.02) - (837.02)
Total comprehensive income for the year - - - - 48,531.43 (37,373.54) 11,157.89
Dividends paid [Note 20] - - - - (8,766.51) - (8,766.51)
Dividend Distribution Tax (DDT) [Note 20] - - - - (1,801.90) - (1,801.90)
Transfer to General reserve - - - 38,000.00 (38,000.00) - -
Balance as at March 31, 2019 1,256.33 30,524.02 3,335.00 4,84,153.31 43,169.49 1,56,376.56 7,18,814.71
Balance as at April 01, 2019 1,256.33 30,524.02 3,335.00 4,84,153.31 43,169.49 1,56,376.56 7,18,814.71
Profit for the year - - - - 9,869.64 - 9,869.64
Other comprehensive income for the year net of income tax - - - - - (26,181.19) (26,181.19)
Other comprehensive income arising from remeasurement of defined
benefit obligation net of income tax - - - - (20,119.63) - (20,119.63)
Total comprehensive income for the year - - - - (10,249.99) (26,181.19) (36,431.18)
Dividends paid [Note 20] - - - - (8,766.50) - (8,766.50)
Dividend Distribution Tax (DDT) [Note 20] - - - - (1,801.98) - (1,801.98)
Balance as at March 31, 2020 1,256.33 30,524.02 3,335.00 4,84,153.31 22,351.02 1,30,195.36 6,71,815.04

Distributions made and proposed (` in lakhs)

Particulars Amount
Cash dividends on equity shares declared and paid:
Final dividend for the year ended on 31 March 2019: ` 2.20 per share
(31 March 2018: ` 2.20 per share) 8,766.50
DDT on final dividend 1,801.98
Total cash dividends declared and paid 10,568.48
Proposed dividends on Equity shares:
Final dividend for the year ended on 31 March 2020: ` 1.20 per share
(31 March 2019: ` 2.20 per share) 4,781.73
Total Proposed dividends 4,781.73
Proposed dividends on equity shares are subject to approval at the annual general meeting
and are not recognised as a liability
1. Capital Reserve:  This reserve has been created from amounts forfeited on shares not fully paid up, scheme of capital subsidy for industries
in backwards areas, etc. It  is not available for distribution of dividend.
2. Securities Premium:  The amount received in excess of face value of the Rights Equity shares issued have been recognised in Share
Premium Reserve, etc. It is not available for distribution of dividend.
3. Capital Redemption Reserve: Capital Redemption Reserve has been created against the redemption of preference shares in earlier years.
It is not available for distribution of dividend.
4. General Reserve: General Reserve represents a reserve other than capital reserve which is not earmarked for a specific purpose.
5. Retained Earnings: Retained Earnings represents surplus/accumulated earnings of the Company and are available for distribution to
shareholders.
6. Other comprehensive income (OCI): OCI comprises items of income and expenses (including reclassification adjustments) that are not
recognised in profit or loss as required or permitted by Indian Accounting Standards. The components of OCI include: re-measurements of
defined benefit plans, gains and losses arising from investment in equity instruments.
114 58TH ANNUAL REPORT 2019-20
 Notes to the Financial Statements

21.   Long term borrowings (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Secured
Term loan from bank* 9,333.33 14,666.67
TOTAL 9,333.33 14,666.67
Note:
The term loan from bank comprises of Rupee Term Loan (RTL) from EXIM bank for 40,000 MTPA Melamine III Project at
Baroda Unit of GSFC having tenure of 5 years. The sanctioned limit of the loan is ` 500 Crores carrying G-sec rate prevailing
as on the date of disbursement with spread of 160 bps (G – sec rate and spread is subject to reset annually). GSFC had
outstanding balance of ` 146.67 Crores as on 31.03.2020. The effective rate of interest was 8.14%. This loan is secured by
hypothecation of movable fixed assets of the said project. The principal amount of loan is repayable over a period of 15 equal
quarterly installments commencing after a moratorium of 18 months from the date of first disbursement which was due on
01.04.2019 and GSFC has repaid principal amount of ` 53.33 Crores during F.Y. 2019-20. Future Repayment is due as under :

Financial Year Amount in ` Lakhs

2020-21 5,333.33
2021-22 5,333.33
2022-23 4,000.00

22. Long term provisions (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Provision for employee benefits
Provision for Gratuity (Refer Note 37) 16,254.74 5,714.52
Provision for Pension (Refer Note 37) 34,068.06 19,373.43
Provision for Compensated absences 23,137.67 16,454.70
Provision for Post Retirement Medical Benefit Scheme (PRMBS) (Refer Note 37) 4,652.65 3,839.45
Other Provisions
Provision for Asset Retirement Obligation 2,032.64 1,808.24
TOTAL 80,145.76 47,190.34

Movement in provision for Asset Retirement Obligation:

Particulars As at 31st As at 31st
March, 2020 March, 2019
Balance at Beginning of Year 1,808.24 1,648.11
Additional provision recognised 224.40 160.13
Provision Utilized - -
Balance at Closing of Year 2,032.64 1,808.24

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 Notes to the Financial Statements

23.
A Income tax asset (net) (` in lakhs)
Particulars As at 31st As at 31st
March, 2020 March, 2019
Advance payment of Income Tax (net) 15,121.97 9,901.82

B- Current tax liabilities (net) (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Provision for Income Tax (net) 499.07 499.07

C Deferred tax liabilities (net)

Particulars As at 31st As at 31st
March, 2020 March, 2019
(a) Statement of Profit & loss
Profit & loss section
Current income tax charge (net of MAT credit entitlement) - 11,633.15
Deferred tax relating to origination & reversal of temporary differences 2,479.03 5,311.05
Earlier Year Tax 348.89 228.98
Income tax expense reported in the statement of profit or loss 2,827.91 17,173.18
(b) Other comprehensive income section
Unrealised (gain)/loss on FVTOCI equity securities (2,211.04) (7,346.07)
Net loss/(gain) on remeasurements of defined benefit plans (10,807.00) (449.59)
Income tax charged to OCI (13,018.04) (7,795.67)
(c) Reconciliation of tax expense and the accounting profit multiplied by
India’s domestic tax rate for the year ended
Accounting profit before income tax 12,697.56 66,541.63
Statutory income tax rate 34.944% 34.944%
Tax at statutory income tax rate of 34.944% 4,437.03 23,252.31
Tax effects of :
Income not subject to tax (1,631.06) (1,323.74)
Inadmissiable expenses or expenses treated seperately 13,997.25 8,929.45
Admissiable deductions (16,080.12) (14,152.87)
Deduction Under chapter - VI (723.10) (5,072.01)
Deferred tax on other items 2,479.02 5,311.05
Total Tax effects (1,958.01) (6,308.12)
Income tax expense 2,479.02 16,944.19
Earlier year tax 348.89 228.98
Income tax expense reported in statement of Profit & loss 2,827.91 17,173.17

116 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

(d) Deferred tax relates to the following: (` in lakhs)

Balance sheet Profit & loss
31-Mar-20 31-Mar-19 2019-20 2018-19
Property, plant and equipment (56,501.48) (50,543.44) 5,958.04 4,765.30
Expenses allowable for tax purpose when paid 11,295.56 8,287.35 (3,008.20) 640.28
Investments in Equity instruments 21,319.36 19,108.32 (2,211.04) (7,346.07)
Fair valuation of deposits 0.36 0.41 0.05 0.23
Actuarial loss on Defined Benefit Plans 20,012.89 9,205.89 (10,807.00) (449.60)
Fair valuation of Derivatives (6.65) (6.65) - 0.01
Machinery Spares 1,464.17 1,464.17 - -
Provision for PF Contribution 310.22 - (310.22) -
Allowance for doubtful debts 5,378.18 5,303.07 (75.11) 12.98
ARO provision-Windmill 440.46 389.91 (50.55) (55.96)
ARO provision-Solar 3.42 - (3.42) -
Leasehold Building IND AS 14.98 - (14.98) -
ICDS Impact 112.42 95.83 (16.59) (51.80)
Reclassification of MAT Credit entitlement 2,919.04 4,688.47 1,769.43 (554.39)
Deferred tax expense/(income) (8,769.59) (3,039.02)
Net deferred tax assets/(liabilities) 6,762.92 (2,006.67)
Reconciliation of deferred tax liabilities (net):
Opening Balance as at 31-Mar-19 31-Mar-18
(2,006.67) (5,045.68)
Tax income/(expense) during the period recognised in P&L (2,479.02) (5,311.05)
Tax income/(expense) MAT credit recognised in P&L (1,769.43) 554.39
Tax income/(expense) during the period recognised in OCI 13,018.04 7,795.67
Closing balance as at 6,762.92 (2,006.67)
31-Mar-20 31-Mar-19

Notes:
The company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets
and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the
same tax authority.

58TH ANNUAL REPORT 2019-20 117

 Notes to the Financial Statements

24. Financial Liabilities- borrowings (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Secured
Loans repayable on demand
From Banks
Cash credit account * 4,149.44 16,365.96
Unsecured
Loans repayable on demand
Short term working capital demand loan/over drafts from banks 21,186.61 2.83
Inter Corporate Deposits 54,000.00 70,500.00
Other loans and advances
Commercial papers 30,000.00 -
Buyers credit and bill discounting facility 31,905.40 -
TOTAL 1,41,241.45 86,868.79
* The Cash credit facility from consortium of banks is secured by hypothecation of stock of raw materials, finished
products, packing materials, general stores, spares, book debts etc. of the Company.
Interest rate details for short term borrowings:
(i) Cash credit accounts carrier interest rates ranging from 7.70% to 9.45% p.a.
(ii) Working capital demand loan carries interest rate ranging from 6.60% to 7.35% p.a.
(iii) Inter Corporate Deposits carries interest rates ranging from 5.42% to 7.75% p.a.
(iv) Commercial papers carries interest at ranging from 5.26% to 7.19% p.a.
(v) Buyers credit carries interest at ranging from 1.04% to 2.35% p.a.
25. Current financial liabilities-trade payables (` in lakhs)
Particulars As at 31st As at 31st
March, 2020 March, 2019
Due to Micro, Small and Medium Enterprises (MSMED)* 494.13 1,057.41
Others** 40,203.20 98,893.71
TOTAL 40,697.33 99,951.12

Particulars As at 31st As at 31st

March, 2020 March, 2019
(i) Principal amount remaining unpaid to any supplier as at the end of the
accounting year 494.13 1,057.41
(ii) Interest due thereon remaining unpaid to any supplier as at the end of
the accounting year NIL NIL
(iii) The amount of interest paid along with the amounts of the payment made
to the supplier beyond the appointed day NIL NIL
(iv) The amount of interest due and payable for the year NIL NIL
(v) The amount of interest accrued and remaining unpaid at the end of the
accounting year NIL NIL
(vi) The amount of further interest due and payable even in the succeeding year,
until such date when the interest dues as above are actually paid NIL NIL
*Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the
basis of information collected by the Management. This has been relied upon by the auditors.
**The above balances include trade payables to related parties ` 16.63 Lakhs (` 1715.99 Lakhs as on 31 March 2019)
Refer Note 39.

118 58TH ANNUAL REPORT 2019-20

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26. Other current financial liabilities (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Financial liabilities at fair value through profit & loss
Derivatives not designated in hedging relationship
Foreign exchange derivative contracts 28.28 -
Other financial liabilities at amortised cost
Current maturities of long term debt 5,333.33 5,333.33
Interest accrued but not due on borrowings 225.58 489.12
Unclaimed dividend* 544.82 544.35
Deposits received 5,432.84 5,330.78
Dues to shareholders for fractional bonus shares - 19.42
Liability towards employee benefits 5,401.93 5,684.92
Creditors for capital goods 12,330.71 25,873.71
Lease Liabilities** 246.47 -
Other payables 34.51 43.27
TOTAL 29,578.47 43,318.90
* These figures do not include any amounts due and outstanding to be credited to Investor Education and Protection
Fund.
** Details of Lease Liabilities :
Movement of Lease Liabilities was as under: As at 31st As at 31st
March, 2020 March, 2019
Opening Balance - -
Add: Additions (Transitional impact on adoption of Ind AS 116) 373.25 -
Add: Interest recognised during the year 42.86 -
Less: Payment Made 169.64 -
Closing Balance 246.47 -

Contractual maturities of lease liabilities on an undiscounted basis: As at 31st

March, 2020
- Less than one year 157.62
- One to Five years 88.85
Closing Balance 246.47

27. Other current liabilities (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Advances from customers 1,707.39 1,543.87
Statutory dues 6,107.71 1,751.36
Income received in advance 3.80 3.28
TOTAL 7,818.90 3,298.51

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 Notes to the Financial Statements

28. Provisions (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Provision for employee benefits
Provision for Gratuity (Refer note 37) 2,382.35 1,812.46
Provision for Pension (Refer note 37) 5,833.69 4,476.75
Provision for Compensated absences* 3,989.48 3,507.67
Provision for PRMBS (Refer note 37) 236.72 210.39
Other Provision** 887.76 530.00
TOTAL 13,330.00 10,537.27
* * The provision for Compensated absences pertains to accrued ordinary and sick leave entitlements. The change
in carrying amount of the provision results from additional provision recognized net of benefits paid.
** Employees’ Provident Fund Trust of the Company (GSFC-EPFT) is holding investments aggregating to ` 4767
Lakhs in various debt securities issued by IL&FS Group, Dewan Housing Finance Corporation Ltd., Yes Bank Ltd. &
Reliance Group. In view of uncertainties regarding recoverability of such investment, the Company has, as a matter
of prudence, made a provision of ` 1030 Lakhs (21.61%) upto FY 2019-20, of which ` 500 Lakhs was provided during
FY 2019-20, towards probable incremental employee benefit liability that may arise on the Company on account of
any likely shortfall of the GSFC-EPFT in meeting its obligations.Out of this ` 142.24 Lakh has been paid in FY 2019-
20. (Previous year ` NIL). In future company will make provision looking to the development in the matter.
29. Revenue from operations (` in lakhs)
Particulars Year ended Year ended
31st March, 20 31st March, 19
Revenue from sale of products (including subsidy on fertilizers)
- Manufactured / Generated products 6,15,813.88 6,56,049.91
- Traded products 1,46,268.55 2,01,403.74
Total 7,62,082.43 8,57,453.65
Revenue from operation above includes:-
Subsidy from Government of India under New Urea Policy/Nutrient Based
Subsidy Scheme
Pertaining to current year 2,33,857.00 2,46,113.00
Pertaining to earlier years determined during current year 12,129.00 10,369.00
TOTAL 2,45,986.00 2,56,482.00
As per amendment made by Department of Fertilizers vide notification dated 30th March, 2020 in Modified NPS – III
Policy of Urea effective from 2nd April, 2014, the company will be compensated additional ` 500 per MT for Urea sales
from April, 2014 onwards. Accordingly, the company has recognized Urea subsidy income of ` 10375.43 Lakhs in FY
2019-20 out of which ` 8747.75 Lakhs pertains to previous years.

30. Other income (` in lakhs)

Particulars Year ended Year ended
31st March, 20 31st March, 19
Interest 1,985.79 3,284.65
Dividend from long term investments 3,538.40 3,705.86
Rent 171.29 157.19
Insurance claims 1,374.56 562.37
Excess provision no longer required 1,042.80 1,353.07
Scrap sales 542.78 753.19
Miscellaneous income 2,263.39 673.49
TOTAL 10,919.01 10,489.82

120 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

31. Cost of material consumed (` in lakhs)

Particulars Year ended Year ended
31st March, 20 31st March, 19
Raw Materials
Opening stock 35,213.05 25,309.60
Add: Purchases 3,54,364.03 4,32,505.52
Less: Closing stock 29,874.83 35,213.05
TOTAL 3,59,702.25 4,22,602.07

32. Changes in inventory of finished goods, work in process and stock in trade (` in lakhs)
Particulars Year ended Year ended
31st March, 20 31st March, 19
Opening stock
Finished products 63,386.86 30,648.95
Stock in trade 22,234.85 6,155.74
Work-in-process 1,534.20 1,582.77
87,155.91 38,387.46
Less: Closing stock
Finished products 50,494.23 63,386.86
Stock in trade 24,433.11 22,234.85
Work-in-process 2,009.54 1,534.20
76,936.88 87,155.91
(Increase) / Decrease 10,219.04 (48,768.45)

33. Employee benefit expenses (` in lakhs)

Particulars Year ended Year ended
31st March, 20 31st March, 19
Salaries, wages, bonus 56,130.04 37,415.45
Contribution to provident, gratuity and superannuation (pension) funds
(including provisions) 8,751.94 7,915.50
Staff Welfare expenses 6,543.79 6,791.79
TOTAL 71,425.77 52,122.73
- Employee benefit expenses includes R&D salary expenses of ` 1001.68 lakhs (previous year ` 895.91 lakhs)(Refer
note no. 42)
- Long Term Wage Revision was due from 1st January 2019 for Staff and Officers of Baroda Unit. The same has
been amicably settled and paid. For Sikka Unit, Polymer Unit and Fibre Unit, necessary provisions has been made
for Pay revision from due date to 31st March 2020. Wage revision remains valid for four years.

34. Finance costs (` in lakhs)

Particulars Year ended Year ended
31st March, 20 31st March, 19
Interest
- borrowings 10,535.68 5,073.58
- others 464.92 439.23
Other borrowing cost 468.66 613.32
TOTAL 11,469.26 6,126.13

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35. Other expenses (` in lakhs)

Particulars Year ended Year ended
31st March, 20 31st March, 19
Consumption of stores and spare parts 12,747.32 10,324.33
Water 2,946.28 2,905.24
Packing expenses 8,464.38 9,669.91
Repairs to buildings 337.14 430.54
Repairs to machinery 6,249.08 6,307.36
Other repairs 673.99 829.58
Insurance 1,011.02 580.82
Rent, rates and taxes 2,121.97 336.42
Product transportation, distribution & loading & unloading charges 33,382.84 35,238.83
Depots and farm information centers expense 4,560.16 3,241.58
Marketing expense reimbursement, demonstration, extension services
and publicity etc. 701.77 864.90
Foreign exchange gain/loss (net) 3,102.88 6,909.72
Directors sitting fees 8.90 7.30
Auditors’ remuneration * 23.07 25.15
Cost auditors’ fees 5.17 5.16
Loss on fixed assets sold/discarded 424.08 17.23
Allowance for doubtful debts 536.08 38.86
Amortisation of leasehold land 355.98 355.98
Donations and contributions 878.14 411.09
Miscellaneous 4,256.10 4,295.23
Impairment in value of Investment 870.03 -
TOTAL 83,656.38 82,795.21
Other expenses includes R&D expenses of ` 13.13 lakhs (previous
year ` 10.43 lakhs) in respective heads (Refer note no. 42)

*Auditors’ remuneration
Particulars Year ended Year ended
31st March, 20 31st March, 19
Payment to Statutory Auditors:
For Statutory audit 7.00 7.00
For Taxation matters 2.00 2.00
For other services (including Limited Review fees & certification) 12.42 14.65
For Reimbursement of expenses 1.65 1.50
23.07 25.15

122 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

36. Earnings per share (EPS): (` in lakhs)

Particulars Year ended Year ended
31st March, 20 31st March, 19
i. Profit attributable to Equity holders of the Company
Profit attributable to equity holders of the Company
Continuing operations 9,869.64 49,368.45
Discontinued operations - -
Profit attributable to equity holders of the Company for basic earnings 9,869.64 49,368.45
Effect of dilution - -
Profit attributable to equity holders of the Company adjusted for the
effect of dilution 9,869.64 49,368.45
ii. Weighted average number of ordinary shares
Issued ordinary shares 39,84,77,530 39,84,77,530
Effect of dilution - -
39,84,77,530 39,84,77,530
Basic EPS (`) 2.48 12.39
Diluted EPS (`) 2.48 12.39
Nominal value per share (`) 2.00 2.00

37. Employment benefit plans

a) The Company operates post employment and other long term employee benefits defined plans as follows:
I. Funded II. Unfunded
i. Gratuity i. Post retirement medical benefit scheme
ii. Pension
Aforesaid post-employment benefit plans typically expose the Company to actuarial risks such as: investment
risk, interest rate risk, longevity risk and salary risk.
Investment Risk: The present value of the defined benefit liability is calculated using a discount rate which is
determined by reference to market yields at the end of the reporting period on government bonds.
Interest Risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially
offset by an increase in the return on the plan’s investments.
Longevity Risk: The present value of the defined benefit liability is calculated by reference to the best estimate
of the mortality of plan participants both during and after their employment. An increase in the life expectancy of
the plan participants will increase the plan’s liability.
Salary Risk: The present value of the defined benefit liability is calculated by reference to the future salaries of
plan participants. As such, an increase in salary of the plan participants will increase the plan’s liability.
b) Defined contribution plans:
Amount towards Defined Contribution Plans have been recognised under “Contributions to Providend, Gratuity
and Superannuation Fund (pension) Funds (including provisions)” in Note : 33 ` 4049.22 lakhs for FY 2019-20
(` 2996.94 lakhs for FY 2018-19).

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 Notes to the Financial Statements

37. Employment benefit plans (Contd...)

c) Details of funded & unfunded plans are as follows: (` in lakhs)
Description Pension Gratuity
2019-20 2018-19 2019-20 2018-19
1. Changes In Present Value of obligation
a. Obligation as at the beginning of the year 61,093.93 61,080.53 29,003.72 27,860.47
b. Current Service Cost 798.02 796.25 1,284.48 1,259.31
c. Interest Cost 4,752.04 4,739.84 2,232.93 2,182.49
d. Actuarial (Gain)/Loss 18,870.75 303.51 10,969.21 741.81
e. Benefits Paid (5,637.82) (5,826.19) (3,054.02) (3,040.36)
f. Obligation as at the end of the year 79,876.92 61,093.93 40,436.32 29,003.72
The defined benefit obligation is Funded Funded Funded Funded
2. Changes in Fair Value of Plan Assets
a. Fair Value of Plan Assets as at the beginning of
the year 37,243.76 35,631.39 21,476.75 21,376.92
b. Expected return on Plan Assets 2,896.82 2,765.00 1,654.18 1,674.89
c. Actuarial Gain/(Loss) (170.10) (107.38) (8.02) (70.52)
d. Contributions 5,642.52 4,780.95 1,730.34 1,535.82
e. Benefits Paid (5,637.82) (5,826.19) (3,054.02) (3,040.36)
f. Fair Value of Plan Assets as at the end of the year 39,975.18 37,243.76 21,799.23 21,476.75
3. Amount Recognised In The Balance Sheet
a. Fair Value of Plan Assets as at the end of the year 39,975.18 37,243.76 21,799.23 21,476.75
b. Present Value of Obligation as at the end of the year (79,876.92) (61,093.93) (40,436.32) (29,003.72)
c. Amount recognised in the Balance Sheet (39,901.74) (23,850.18) (18,637.09) (7,526.97)
4. Expense recognised in P & L during the year
a. Current Service Cost 798.02 796.25 1,284.48 1,259.31
b. Net Interest Cost 1,855.22 1,974.84 578.75 507.60
c. Expense recognised during the year 2,653.24 2,771.09 1,863.23 1,766.91
5. Expense recognised in OCI during the year
a. Return on Plan Assets, Excluding Interest Income 170.10 107.38 8.02 70.52
b. Actuarial (Gain)/Loss recognised on Obligation 18,870.75 303.51 10,969.21 741.81
c. Net (Income)/Expense recognised during the year 19,040.85 410.89 10,977.23 812.33
6. Investment Details of Plan Assets
Administered by LIC of India 100% 100% 100% 100%

Maturity Profile Pension Gratuity PRMBS

Projeted benefit payable in future year
from the date of reporting 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19
1st Following year 9,062.84 8,264.41 5,040.86 3,763.98 236.72 210.39
2nd Following year 6,172.27 4,781.35 3,119.60 2,314.11 250.37 222.75
3rd Following year 11,280.78 7,264.87 5,260.30 3,367.34 265.79 235.95
4th Following year 11,927.10 8,047.22 6,071.63 3,738.51 284.92 250.81
5th Following year 10,537.22 9,450.90 4,902.16 4,350.66 299.73 269.05
Sum of year 6 to 10 37,430.80 32,595.43 18,919.52 14,324.85 1,672.81 1,530.07
Sum of year 11 and above - - 21,074.56 16,530.70 - -

124 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

37. Employment benefit plans (Contd...) (` in lakhs)

Description PRMBS
2019-20 2018-19
1. Changes In Present Value of the defined benefit obligation
a. Obligation as at the beginning of the year 4,049.84 4,037.11
b. Current Service Cost 182.27 166.89
c. Interest Cost 315.08 290.54
d. Actuarial (Gain)/Loss 908.56 63.38
e. Benefits Paid (566.37) (508.08)
f. Obligation as at the end of the year 4,889.38 4,049.84
The defined benefit obligation is Unfunded Unfunded
2. Amount Recognised In The Balance Sheet
a. Fair Value of Plan Assets as at the end of the year — —
b. Present Value of Obligation as at the end of the year (4,889.38) (4,049.84)
c. Amount recognised in the Balance Sheet (4,889.38) (4,049.84)
3. Expense recognised in P & L during the year
a. Current Service Cost 182.27 166.89
b. Interest Cost 315.08 290.54
c. Expense recognised during the year 497.35 457.43
4. Expense recognised in OCI during the year
a. Return on Plan Assets,Excluding Interest Income — —
b. Actuarial (Gain)/Loss recognised on Obligation 908.56 63.38
c. Net (Income)/Expense recognised during the year 908.56 63.38
The expense is disclosed in Note No. 33 - “Employee Benefit Expenses”, Pension & Gratuity are disclosed in line
item - Contribution to Provident Fund,and provision to Gratuity, Superannuation (Pension) Funds. Leave
Encashment is disclosed in line item - Salaries, Wages and Bonus and PRMBS is disclosed in line item - Welfare
funds.
d) Assumptions 31.03.2020 31.03.2019
a. Discount Rate (per annum) 6.84% 7.78%
b. Estimated Rate of return on Plan Assets (per annum) N.A. N.A.
c. Salary Escalation Rate (per annum) 6% 6%
d. Salary Medical Inflation Rate (per annum) N.A. N.A.
e. The estimates of future salary increases considered in actuarial valuation take account of inflation, seniority,
promotion and other relevant factors.
f. The estimate of mortality rate during employment has been considered as per Indian Assured Lives
Mortality (2006-08).
g. Provident Fund contributions are made to Trusts administered by the Company.  The interest rate payable
to the members of the Trusts shall not be lower than the statutory rate of interest declared by the Central
Government under the Employees provident Funds and Miscellaneous Provisions Act, 1952 and shortfall,
if any, shall be made good by the Company.

58TH ANNUAL REPORT 2019-20 125

 Notes to the Financial Statements

37. Employment benefit plans (Contd...) (` in lakhs)

Description 2019-20
Pension Gratuity PRMBS
e) Effect of one percentage point change in the
assumed Discount Rate
a. One percentage point increase in Discount Rate (4,007.39) (2,029.51) (519.79)
b. One percentage point decrease in Discount Rate 3,981.98 2,289.84 639.87
Effect of one percentage point change in the assumed
Salary Escalation Rate
a. One percentage point increase in Salary Escalation Rate 3,965.10 2,285.74 NA
b. One percentage point decrease in Salary Escalation Rate (4,062.15) (2,078.19) NA
Effect of one percentage point change in the assumed
medical inflation rate-Benefit Obligation
a. One percentage point increase in medical inflation rate NA NA 652.17
b. One percentage point decrease in medical inflation rate NA NA (537.10)

f) Details of funded & unfunded plans are as follows: ( ` in lakhs)

Pension 2019-20 2018-19 2017-18 2016-17 2015-16
Net Asset/(Liability) recognised in Balance Sheet (including experience adjustment impact)
1 Present Value of Defined Benefit
Obligation 79,876.92 61,093.93 61,080.53 58,669.04 50,362.00
2 Fair Value of Plan Assets 39,975.18 37,243.76 35,631.39 32,985.70 31,863.73
3 Status [Surplus/(Deficit)] (39,901.74) (23,850.18) (25,449.14) (25,683.34) (18,498.27)
4 Experience Adjustment of Plan
Assets [Gain/(Loss)] (170.10) (107.38) 323.70 116.31 -
5 Experience/Assumptions Adjustment
of obligation [(Gain)/Loss] 18,870.75 303.51 1,858.06 7,958.89 15,143.18
Gratuity 2019-20 2018-19 2017-18 2016-17 2015-16
Net Asset/(Liability) recognised in Balance Sheet (including experience adjustment impact)
1 Present Value of Defined Benefit
Obligation 40,436.32 29,003.72 27,860.47 27,890.11 26,260.45
2 Fair Value of Plan Assets 21,799.23 21,476.75 21,376.92 19,143.29 18,443.70
3 Status [Surplus/(Deficit)] (18,637.09) (7,526.97) (6,483.55) (8,746.82) (7,816.75)
4 Experience Adjustment of Plan
Assets [Gain/(Loss)] (8.02) (70.52) 196.79 19.15 -
5 Experience/Assumptions Adjustment
of obligation [(Gain)/Loss] 10,969.21 741.81 (1,134.55) 636.00 4,665.37

126 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

37. Employment benefit plans (Contd...) (` in lakhs)

PRMBS 2019-20 2018-19 2017-18 2016-17 2015-16
Net Asset/(Liability) recognised in Balance Sheet (including experience adjustment impact)
1 Present Value of Defined Benefit
Obligation 4,889.38 4,049.84 4,037.11 3,947.53 3,636.09
2 Fair Value of Plan Assets - - - - -
3 Status [Surplus/(Deficit)] (4,889.38) (4,049.84) (4,037.11) (3,947.53) (3,636.09)
4 Experience Adjustment of Plan
Assets [Gain/(Loss)] - - - - -
5 Experience/Assumptions Adjustment
of obligation [(Gain)/Loss] 908.56 63.38 122.04 362.45 354.77

38. Commitment and contingencies

a. Commitments (` in lakhs)
Particulars As at As at
Mar-20 Mar-19
(i) Estimated amount of contracts remaining to be executed on
capital accounts and not provided 6,897.18 12,757.00

b. Contingent liabilities (` in lakhs)

Particulars As at As at
Mar-20 Mar-19
Claims against the Company not acknowledgement as debt
(i) Excise and Customs duty 9,122.86 12,366.00
(ii) Central sales tax and value added tax 5,661.17 5,661.00
(iii) Income tax 16,260.73 13,776.01
(iv) Other claims by:
Income tax assessment orders contested 3,289.00 5,674.20
- Others 67,859.43 43,862.00
- Department of Fertilizers, total amount not quantifiable, demands stayed, Refer Refer
matter pending with High Courts Note:12 Note:12
- Employees / ex-employees, contractual labour – pending before courts Not Not
ascertainable ascertainable

In respect of the above, the expected outflow will be determined at the time of final resolution of the dispute.

c. Contingent Assets
The Company does not have any contingent assets.

58TH ANNUAL REPORT 2019-20 127

 Notes to the Financial Statements

39. Related party transactions

(` in lakhs)
Name of the Party Nature of Relationship Nature of Transaction 2019-20 2018-19
Purchase of goods & Other expenses 2,294.52 1,800.32
Sale of materials/Goods 29,101.75 44,360.68
Commission income 473.85 4.85
Rent receipt 9.15 9.15
Reimbursement of expense 444.71 80.98
Expenses recovered 1,180.49 1,033.60
GSFC Agrotech Limited Subsidiary Equity contribution 1,520.00 -
ICD Received 2,010.00 1,000.00
ICD Repaid 2,010.00 1,000.00
Interest expense on ICD 3.50 46.69
Dividend Received 48.00 48.00
Outstanding balance-Payable (1,721.98) (757.64)
Outstanding balance-Receivable 7,196.58 15,741.25
Vadodara Enviro Channel Ltd. Usage of effluent channel 346.20 317.20
(Erstwhile Effluent Channel Project Associate
Outstanding balance-Payable 17.15 22.71
Ltd.)
Expenses recovered 336.22 165.30
ICD Received 10,000.00 5,500.00
ICD Repaid 5,500.00
Gujarat Green Revolution Company Associate Interest expense on ICD 595.18 33.86
Dividend Received 6.25 6.25
Outstanding balance-Receivable 194.78 58.27
Outstanding balance - loan (ICD) 10,000.00 -
Expenses recovered 156.04 85.87
Provision for Investment 870.03 -
Karnalyte Resources Inc. Associate
Outstanding balance-Payable - 15.72
Outstanding balance-Receivable 39.89 -
Purchase of Material 35,300.58 33,545.39
Expenses recovered 38.80 26.57
Tunisian Indian Fertilizer Company
Other related party Provision for Investment 1,802.67 -
(TIFERT)
Advance to vendor 7,242.80 7,027.18
Outstanding balance-Receivable 2,497.07 1,357.10
Donation Granted 563.17 508.49
GSFC Education society Other related party
Outstanding balance-Payable 163.17 -
Key Management
Chairman & Managing Director
Personnel
V D Nanavaty – ED (Finance) & Key Management
Remuneration 178.45 129.60
CFO Personnel
Key Management
V V Vachhrajani, CS & SVP(Legal)
Personnel
Purchase of Materials 1,824.15 2,401.10
Sale of Product 835.89 1,242.51
Gujarat Alkalies and Chemicals Expenses recovered 3.30 6.79
Other related party
Limited Outstanding balance-payable 118.75 112.47
Dividend Received 132.40 107.58
Outstanding balance-receivable 121.70 108.13
Purchase of Materials 198.34 585.96
Fees for Services 30.20 34.17
Gujarat Narmada Valley Fertilizers Sale of Material 1,039.33 6,909.14
Other Related Party
Company Limited Dividend Received 2,154.54 2,308.44
Outstanding balance-Payable 0.62 (14.62)
Outstanding balance-Receivable 53.50 26.31

128 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

Name of the Party Nature of Relationship Nature of Transaction 2019-20 2018-19

Purchase of power 15,579.45 17,822.01
Sale of power 107.27 187.47
Gujarat Industries Power Company Dividend Received 648.52 603.79
Other Related Party
Limited. Expenses recovered - 20.46
Outstanding balance-Receivable 6.10 7.49
Outstanding balance-Payable 863.97 8.91
Purchase of Gas 21,539.82 3,854.86
Gujarat State Petroleum Corporation
Other Related Party Fees for Services - 5.90
Ltd.
Outstanding balance-payable 338.22 99.99
Purchase of Material 9,829.51 13,556.11
Indian Potash Ltd. Other Related Party Dividend Received 33.75 33.75
Outstanding balance-payable 236.73 2,228.45
The Fertilizer Association of India Other Related Party Fees for Services 37.33 19.86

Terms and conditions of transactions with related parties:

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length
transactions. Related Party Transaction amounts shown in above table are inclusive of taxes.Outstanding balances
at the year-end are unsecured and interest free and settlement occurs in cash.There have been no gua rantees
provided or received for any related party receivables or payables. For the year ended 31 March 2020, the Company
has not recorded any impairment of receivables relating to amounts owed by related parties (31st March, 2019: Nil).
This assessment is undertaken each financial year through examining the financial position of the related party and
the market in which the related party operates.
Transactions with key management personnel: (` in lakhs)

Remuneration to key management personnel: For the year ended

31-Mar-20 31-Mar-19
Short term employee benefits 157.52 117.53
Post employment benefits 10.67 6.17
Long-term employee benefits 10.26 5.90
Total 178.45 129.60

58TH ANNUAL REPORT 2019-20 129

 Notes to the Financial Statements

40. Segment information

For management purposes, the company is organised into business units based on its products and has two reportable
segments, as follows:
1. Fertilizer products comprising of Urea, Ammonium Sulphate, Di-ammonium Phosphate, Ammonium Phosphate
Sulphate, NPK (12:32:16), (10:26:26), traded fertilizer products etc.
2. Industrial products comprising of Caprolactam, Nylon-6, Nylon Filament Yarn, Nylon Chips, Melamine, Methanol,
Polymer products, traded industrial products etc.
The Chief Operating Decision Maker (“CODM”) evaluates the Company’s performance and allocates resources
based on an analysis of various performance indicators by the two operating segments. The CODM reviews
revenue and gross profit as the performance indicator for both operating segments.
(` in lakhs)
A] SEGMENT REVENUE: 31-Mar-20 31-Mar-19
1 TOTAL SEGMENT REVENUE
a) Fertilizer Products 6,06,123.01 6,39,814.54
b) Industrial Products 1,55,959.42 2,17,639.11
TOTAL 7,62,082.43 8,57,453.65
2 INTER SEGMENT REVENUE - -
3 EXTERNAL REVENUE (1 - 2)
a) Fertilizer Products 6,06,123.01 6,39,814.54
b) Industrial Products 1,55,959.42 2,17,639.11
TOTAL 7,62,082.43 8,57,453.65
B] RESULT:
1 Segment result
a) Fertilizer Products 31,121.50 28,621.91
b) Industrial Products (6,929.39) 38,212.83
TOTAL 24,192.11 66,834.74
2 a) Unallocated income 7,322.15 8,921.23
b) Unallocated expenses (7,347.44) (3,088.21)
3 Operating Profit (B1 + B2) 24,166.82 72,667.76
4 Finance Cost (11,469.26) (6,126.13)
5 Provision for Taxation:
Current Income Tax - (12,322.52)
Deferred Tax (net) (2,479.03) (5,311.05)
MAT credit recognised - 689.37
Earlier Year Tax (348.89) (228.98)
6 Net Profit 9,869.64 49,368.45
C] OTHER INFORMATION:
1 Segment assets
a) Fertilizer Products 5,09,548.07 5,30,188.52
b) Industrial Products 2,15,257.30 2,08,934.42
TOTAL 7,24,805.37 7,39,122.94
2 Unallocated corporate assets 2,77,623.53 2,95,998.65
3 Total Assets 10,02,428.90 10,35,121.59
4 Segment Liabilities
a) Fertilizer Products 94,440.90 1,40,329.39
b) Industrial Products 75,965.54 73,694.66
TOTAL 1,70,406.44 2,14,024.05
5 Unallocated corporate liabilities 1,52,237.87 94,313.29
6 Total Liabilities 3,22,644.31 3,08,337.34

130 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

(` in lakhs)
31-Mar-20 31-Mar-19
7 Capital Expenditure
a) Fertilizer Products 10,007.28 5,730.70
b) Industrial Products 1,919.80 14,525.73
c) Corporate Capital Expenditure 2,619.66 5,526.70
TOTAL 14,546.74 25,783.13
8 Depreciation and Amortisation
a) Fertilizer Products 8,062.95 7,420.69
b) Industrial Products 8,693.87 4,946.40
c) Unallocated corporate Depreciation 264.10 193.47
TOTAL 17,020.92 12,560.56
9 Non-Cash expenses
a) Fertilizer Products 27,324.23 6,024.31
b) Industrial Products 18,915.28 3,775.33
c) Unallocated non-cash expenses 274.73 44.27
TOTAL 46,514.24 9,843.91
41. Financial instruments – Fair values and risk management
A. Accounting classification and fair values
The carrying value of financial instruments by categories as of 31st March, 2020 is as follows. (` in lakhs)
Particulars Carrying amount Fair value
FVT PL FVTOCI Amortised Total Level 1 - Level 2 - Level 3 - Total
Cost Quoted price Significant Significant
in active observable unobservable
markets inputs inputs
Financial assets
Non-current investments - 1,98,540.90 3,799.35 2,02,340.25 1,61,016.88 - 37,524.02 1,98,540.90
Other Non-current financial asset - - 3,000.06 3,000.06 - - - -
Trade receivables - - 89,171.80 89,171.80 - - - -
Government subsidy receivable - - 1,83,104.24 1,83,104.24 - - - -
Cash and cash equivalents - - 1,429.04 1,429.04 - - - -
Other bank balances - - 1,092.25 1,092.25 - - - -
Current loans - - 19,226.97 19,226.97 - - - -
Derivative financial instruments - - - - - - - -
Other Current financial asset - - 886.69 886.69 - - - -
- 1,98,540.90 3,01,710.40 5,00,251.30 1,61,016.88 - 37,524.02 1,98,540.90
Financial liabilities
Non current borrowings - - 9,333.33 9,333.33 - - - -
Current borrowings* - - 1,41,241.45 1,41,241.45 - - - -
Trade payables* - - 40,697.33 40,697.33 - - - -
Other current financial liabilities - - 29,550.19 29,550.19 - - - -
Derivative financial instruments 28.28 - - 28.28 - 28.28 - 28.28
28.28 - 2,20,822.30 2,20,850.58 - 28.28 - 28.28
The carrying value of financial instruments by categories as of 31 st March, 2019 is as follows. (` in lakhs)
Financial assets
Non-current investments - 2,25,130.45 6,398.78 2,31,529.23 1,93,720.26 - 31,410.19 2,25,130.45
Other Non-current financial asset - - 4,415.80 4,415.80 - - - -
Trade receivables - - 95,105.61 95,105.61 - - - -
Government subsidy receivable - - 1,72,948.97 1,72,948.97 - - - -
Cash and cash equivalents - - 3,697.50 3,697.50 - - - -
Other bank balances - - 1,202.50 1,202.50 - - - -
Current loans - - 17,445.78 17,445.78 - - - -
Derivative financial instruments 9.40 - - 9.40 - 9.40 9.40
Other Current financial asset - - 227.59 227.59 - - - -
9.40 2,25,130.45 3,01,442.53 5,26,582.38 1,93,720.26 9.40 31,410.19 2,25,139.85
Financial liabilities
Non current borrowings - - 14,666.67 14,666.67 - - - -
Current borrowings* - - 86,868.79 86,868.79 - - - -
Trade payables* - - 99,951.12 99,951.12 - - - -
Other current financial liabilities - - 43,318.90 43,318.90 - - - -
Derivative financial instruments - - - - - - - -
- - 2,44,805.47 2,44,805.47 - - - -
* - carrying value approximates to the fair value

58TH ANNUAL REPORT 2019-20 131

 Notes to the Financial Statements

B. Measurement of fair values & Sensitivity Analysis

i) Valuation techniques and significant unobservable inputs
Some of the Company’s financial assets and financial liabilities are measured at fair value at the end of each
reporting period. The following table gives information about how the fair values of financial assets and financial
liabilities are determined (in particular, the valuation technique(s) and inputs used).
Financial instruments measured at fair value
Financial assets / financial Fair Value (` In Lakhs) as at Fair Value Valuation technique(s)
liabilities 31-03-2020 31-03-2019 hierarchy and key input(s)
1) Investments in equity instruments Listed equity securities in various companies Listed equity securities in various companies Level 1 Quoted bid prices in an
at FVTOCI (quoted) (see note 7) engaged in fertilizer, chemicals,finance, gas, engaged in fertilizer, chemicals,finance, gas, power active market
power and mining industry aggregate fair and mining industry aggregate fair value of
value of ` 1,61,016.88 ` 193,720.26

Particulars Valuation technique(s) & key Fair Value (` In Lakhs) as at Fair Significant Relationship of unobservable input(s) to
input(s) 31-03-2020 31-03-2019 Value unobservable fair value
hierarchy input(s)
2) Investments Market Approach-Comparable Investment in Investment in Level 3 Market Multiple Increasing/Decreasing the Market Multiples
in equity companies-In this approach, companies engaged companies engaged Discount ranging from by probability weighted range, would change
instruments at the value of shares / business in business of storage in business of storage 15% to 25% (As at the FV by + ` 3,838.37 lakhs & - ` 1,054.63
FVTOCI of a company is determined facilities - aggregate facilities - aggregate 31.3.19 from 15% to lakhs ( As at 31.3.19 +` 2,599.79 lakhs & -
(unquoted) (see based on market multiples of fair value of fair value of 25%) ` 2,440.37 lakhs)
note 7) publicly traded comparable ` 23,263.21 ` 23,177.37
companies. Investment in Investment in Discount to Increasing/Decreasing the Discounting
The appropriate multiple is companies engaged companies engaged EV/EBITDA Multiple Factor by probability weighted range, would
generally based on in business of in business of ranging from -0.50% to change the FV by + ` 566.55 lakhs &
performance of listed fertilizers industry - fertilizers industry - 0.50% (As at 31.3.19 -` 566.55 lakhs ( As at 31.3.19 + ` 827.89
companies with similar aggregate fair value of aggregate fair value of from -0.5% to 0.5%) lakhs & -` 1,138.16 lakhs)
business model and size ` 12,115.35 ` 6,242.18
(Refer note 1 below).
Income Approach- In this Investment in Investment in Level 3 Growth Rate ranging Increasing/Decreasing the Growth Rate &
approach, discounted cash company engaged in company engaged in NIL (As at 31.3.19 NIL) Discounting Factor by probability weighted
flow method was used to fertilizer industry - fertilizer industry - Discounting Factor range, would change the FV by NIL. ( As at
capture the present value of the aggregate fair value of aggregate fair value of ranging NIL (As at 31.3.19 NIL)
expected future economic ` NIL ` NIL 31.3.19 NIL)
benefits to be derived from the
ownership of this investee.
(Refer note below). Investment in Investment in Level 3 10% +/- over base 10% increase/Decrease over base value,
company engaged in company engaged in value. would change FV by + ` 338.40 lakhs & -
the business of gas the business of gas ` 336.05 lakhs. (No sensitivity analysis has
marketing – marketing – aggregate been carried out as at 31.03.2019 on
aggregate fair value of fair value of account of non-availability of data.)
` 2,023.35 ` 1,882.35
Note : Discounted Free Cash flow method has been used to arrive at the enterprise value of the gas marketing business of the investee. Under this technique, the
projected free cash flows from gas marketing business of the company are discounted at the weighted average cost of capital to the providers of capital to the business
of the company and the sum of the present value of such free cash flows would represent the value of business. The investee has various investments in 1ubsidiaries
and joint venture companies. Each of these subsidiary and joint venture companies have been separately valued using market price method, DCF method, CCM
method and book value (NAV) method and applied the investee’s stake percentage to arrive at the fair value of investee’s investment in these subsidiaries / joint
venture companies. Under the market price method, the valuation is derived from the quoted market price of the share of the company as at the valuation date. Under
the NAV method, the valuation is derived by calculating the net assets value of the investee as at the valuation date.
Cost Approach- Net Asset Investment in Investment in Level 3 Discount to Book Value Increasing/Decreasing the Discounting
Value - In this approach, total companies engaged companies engaged ranging from 15% to Factor by probability weighted range, would
value is based on the sum of in power and finance in power and finance 30% (As at 31.3.19 change the FV by + ` 14.21 lakhs & -
net asset value as recorded on industry - aggregate industry - aggregate from 15% to 30%) ` 13.44 lakhs ( As at 31.3.19 + ` 12.60 lakhs
the balance sheet.A net asset fair value of ` 122.11 fair value of ` 108.30 & - `11.93 lakhs)
methodology is most applicable
for businesses where the value
lies in the underlying assets
and not the ongoing operations
of the business. (Refer note 1
and 2 below).

132 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

Note 1 : The Company has invested in the equity instruments of various companies. However, the percentage of
shareholding of the Company in such investee companies is very low and hence, it has not been provided with future
projections including projected profit and loss account by those investee companies. Hence, the independent valuer
appointed by the Company has estimated fair value based on available historical Annual Reports of such companies
and other information as available in the public domain. Since the future projections are not available, discounted
cashflow approach for fair value determination has not been followed.
Note 2 : In case of some companies, there are no comparable companies valuations available and some are recent
start up companies. In light of no information available for future projections, capacity utilisation, commencement of
operations, etc., the valuation is based on cost approach.
ii) Transfers between Levels 1 and 2
There have been no transfers between Level 1 and Level 2 during 2019-20 and 2018-19.
iii) Level 3 fair values
Reconciliation of Level 3 fair values
The following table shows a reconciliation from the opening balances to the closing balances for Level 3 fair values.

(` in lakhs)
Paticulars Equity securities
Opening Balance (1 April 2019) 31,410.20
Net change in fair value (unrealised) 6,113.83
Purchases -
Closing Balance (31 March 2020) 37,524.03

Transfer out of Level 3

There were no movement in level 3 in either directions during the year 2019-20 and 2018-19.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:
• Credit risk ;
• Liquidity risk ; and
• Market risk

i. Risk management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of the
Company’s risk management framework. The Company manages market risk through a Financial risk
management committee, which evaluates and exercises independent control over the entire process of
market risk management. The treasury department recommends risk management objectives and policies,
which are approved by Audit cum finance committee and Board of Directors. The activities of this department
include management of cash resources, implementing hedging strategies for foreign currency exposures,
borrowing strategies, and ensuring compliance with market risk limits and policies.
The Company’s risk management policies are established to identify and analyse the risks faced by the
Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and the
Company’s activities. The Company, through its training and management standards and procedures,
aims to maintain a disciplined and constructive control environment in which all employees understand
their roles and obligations.
The audit cum finance committee oversees how management monitors compliance with the company’s
risk management policies and procedures, and reviews the adequacy of the risk management framework
in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by
internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and
procedures, the results of which are reported to the audit committee.

58TH ANNUAL REPORT 2019-20 133

 Notes to the Financial Statements

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Company’s receivables from
customers.
The carrying amount of following financial assets represents the maximum credit exposure:
Trade and other receivables
The Company’s exposure to credit is influenced mainly by the individual characteristics of each customer.
However, management also considers the factors that may influence the credit risk of its customer base,
including the default risk of the industry and country in which customers operate.
The Revenue department has established a credit policy under which each new customer is analysed individually
for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered.
The Company’s review includes external ratings, if they are available, and in some cases bank references. Sale
limits are established for each customer and reviewed quarterly. Any sales exceeding those limits require
approval from the Board of Directors.
Goods are sold subject to retention of title clauses, so that in the event of non-payment the Company may have
a secured claim. The Company does not otherwise require collateral in respect of trade and other receivables.
The company establishes an allowance for impairment that represents its estimate of expected losses in
respect of trade and other receivables. The provision matrix of ECL at the end of reporting period is as follows.
Particulars Expected credit loss %
Within the credit Period 0.04%
1-90 days past due 0.38%
91-180 days past due 1.52%
181-270 days past due 5.49%
270-360 days past due 13.02%
360-450 days past due 25.77%
450-540 days past due 44.23%
540-630 days past due 61.84%
630-720 days past due 100.00%
More than 720 days past due 100.00%

Impairment
The ageing of trade and other receivables that were not impaired was as follows.
(` in lakhs)
Particulars Carrying amount
March 31, 2020 March 31, 2019
Neither past due nor impaired 87,323.40 1,08,760.01
Past due 1–30 days 11,633.16 5,258.35
Past due 31–90 days 36,361.45 46,696.39
Past due 91 days and above 1,36,958.03 1,07,339.83
2,72,276.04 2,68,054.58

Management believes that the unimpaired amounts that are past due by more than 30 days are still collectible
in full, based on historical payment behaviour and extensive analysis of customer credit risk, including underlying
customers’ credit ratings if they are available.

134 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

Movement in expected credit loss allowance (` in lakhs)

Particulars Year ended Year ended
March 31, 2020 March 31, 2019
Balance at the beginning of the year 7,908.78 7,992.40
Movement in the expected credit loss allowanceon trade receivables
calculated at lifetime expected credit losses Past due 31–90 days (37.16) (83.62)
7,871.62 7,908.78
During the year 2019-20 and 2018-19, impairment provision was reduced by ` 37.18 Lakhs and ` 83.62 Lakhs
respectively
Cash and cash equivalents
The Company held cash and cash equivalents of ` 1429.04 at March 31, 2020 (` 3697.50 at March 31, 2019).
The cash and cash equivalents are held with approved scheduled banks.
Derivatives
The derivatives deals are done with AD category banks in OTC market and registered brokers in ETCD market.
iii. Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to
managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when
they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Company’s reputation.
Financing facilities: (` in lakhs)
Particulars As at As at
31-03-2020 31-03-2019
a) Secured cash credit, reviewed annually
- amount used 4,149.44 16,365.96
- amount unused 42,419.05 30,202.53
b) Secured term loan
- amount used 14,666.66 20,000.00
- amount unused - 30,000.00
c) Unsecured bill acceptance facility
- amount used 31,905.40 -
- amount unused - -
d) Unsecured commercial papers
- amount used 30,000.00 -
- amount unused 70,000.00 1,00,000.00
e) Unsecured working capital demand loan
- amount used 14,686.61 -
- amount unused 40,313.39 35,000.00
f) Unsecured Inter-Corporate Loan Facility
- amount used 54,000.00 70,500.00
- amount unused 46,000.00 29,500.00
g) Unsecured bank overdraft facility/WCDL Facility
- amount used 6,500.00 2.83
- amount unused 8,000.00 14,497.17

58TH ANNUAL REPORT 2019-20 135

 Notes to the Financial Statements

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts
are gross and undiscounted, and include estimated interest payments and exclude the impact of nettin g
agreements. (` in lakhs)
March 31, 2020 Contractual cash flows
Carrying Total 0-12 months 1-2 years 2-5 years More than
amount 5 years
INR
Non-derivative financial liabilities
Term loans from banks 14,666.66 14,666.66 5,333.33 5,333.33 4,000.00 -
Working capital loans from banks 1,41,241.45 1,41,241.45 1,41,241.45 - - -
Trade payables 40,697.33 40,697.33 40,697.33 - - -
Other current financial liabilities 24,216.86 24,216.86 24,216.86 - - -
Derivative financial liabilities
Derivative contracts used for hedging - - - - - -
Outflow 28.28 28.28 28.28 - - -

March 31, 2019 Contractual cash flows

Carrying Total 0-12 months 1-2 years 2-5 years More than
amount 5 years
Non-derivative financial liabilities
Term loans from banks 20,000.00 20,000.00 5,333.33 5,333.33 9,333.34 -
Working capital loans from banks 86,868.79 86,868.79 86,868.79 - - -
Trade payables 99,951.12 99,951.12 99,951.12 - - -
Other current financial liabilities 37,985.57 37,985.57 37,985.57 - - -
Derivative financial liabilities
Derivative contracts - - - - - -
Outflow - - - - - -
The gross inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to
derivative financial liabilities held for risk management purposes and which are not usually closed out before contractual
maturity. The disclosure shows net cash flow amounts for derivatives that are net cash-settled and gross cash inflow
and outflow amounts for derivatives that have simultaneous gross cash settlement.
iv. Market risk
Market risk is the risk that changes in market prices – such as foreign exchange rates, interest rates and equity prices
– will affect the Company’s income or the value of its holdings of financial instruments.Market risk is attributable to all
market risk sensitive financial instruments including foreign currency receivables and payables and long term debt.
The company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market
value of company’s investments. Thus, company’s exposure to market risk is a function of investing and borrowing
activities and revenue generating and operating activities in foreign currency. The objective of market risk management
is to control the financial risks associated with the Foreign Exchange/Currency rate movements through a sophisticated
Foreign Exchange Risk Management System.
Currency risk
The Company is exposed to currency risk on account of its import payables and borrowings inforeign currency. The
functional currency of the Company is Indian Rupee. The Company uses forward exchange contracts, Options and
futures to hedge its currency risk, most with a maturity of less than one year from the reporting date.

136 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

The company is using derivative instruments which are not intended for trading or speculative purposes but for hedge
purposes to establish the amount of reporting currency required or available at the settlement date of certain payables
and receivables.
Exposure to currency risk
The currency profile of financial assets and financial liabilities as at March 31, 2020 and March 31, 2019 are as
below: (` in lakhs)
Particulars March 31, 2020 March 31, 2020 March 31, 2020 March 31, 2020
INR USD1 CAD1 Others1
Financial assets
Cash and cash equivalents 1,429.04 - - -
Other bank balances 1,092.25 - - -
Non-current investments 1,99,145.90 - 3,194.35 -
Current loans and advances 19,226.97 - - -
Trade and other receivables 2,68,414.18 3,841.98 - 19.88
Derivative assets - - - -
Other Non-Current financial assets 3,000.06 - - -
Other Current financial assets 886.69 - - -
4,93,195.09 3,841.98 3,194.35 19.88
Financial liabilities
Long term borrowings 9,333.33 - - -
Short term borrowings 1,09,336.05 31,905.40 - -
Trade and other payables 35,991.85 4,621.92 - 83.56
Derivative liabilities - 28.28 - -
Other Current financial liabilities 28,784.82 5.43 - 759.94
1,83,446.05 36,561.03 - 843.50
(` in lakhs)
Particulars March 31, 2019 March 31, 2019 March 31, 2019 March 31, 2019
INR USD1 CAD1 Others1
Financial assets
Cash and cash equivalents 3,697.50 - - -
Other bank balances 1,202.50 - - -
Non-current investments 2,25,735.45 1,729.40 4,064.38 -
Current loans and advances 17,445.78 - - -
Trade and other receivables 2,67,576.00 478.57 - -
Derivative assets - 9.40 - -
Other non current financial assets 4,415.80 - - -
Other Current financial assets 227.59 - - -
5,20,300.63 2,217.37 4,064.38 -
Financial liabilities
Long term borrowings 14,666.67 - - -
Short term borrowings 86,868.79 - - -
Trade and other payables 51,515.88 48,307.68 15.24 112.32
Derivative liabilities - - - -
Other Current financial liabilities 43,318.90 - - -
1,96,370.24 48,307.68 15.24 112.32
1 - The figures are in INR Equivalent of respective currency

58TH ANNUAL REPORT 2019-20 137

 Notes to the Financial Statements

The following significant exchange rates have been applied during the year.
Year-end spot rate
INR March 31, 2020 March 31, 2019
USD 75.39 69.17
CAD 53.49 51.83
Sensitivity analysis
A reasonably possible strengthening (weakening) of the Indian Rupee against US dollars at March 31 would
have affected the measurement of financial instruments denominated in US dollars and affected equity and
profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest
rates, remain constant and ignores any impact of forecast sales and purchases.
(` in lakhs)
31-Mar-20 31-Mar-19
Effect in INR Strengthening Weakening Strengthening Weakening
10% movement
USD (1,424.11) (1,132.77) 2,324.26 (645.36)
CAD 319.44 (319.44) 406.44 (406.44)

Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate
risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the
interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing
investments will fluctuate because of fluctuations in the interest rates.
Exposure to interest rate risk
Company’s interest rate risk arises from borrowings. Company has long term borrowings at variable rate of
interest.The interest rate profile of the Company’s interest-bearing financial instruments as reported to the
management of the Company is as follows.
(` in lakhs)
Particulars Nominal amount in INR
March 31, 2020 March 31, 2019
Variable-rate instruments
Financial assets - -
Financial liabilities 14,666.67 20,000.00
Total 14,666.67 20,000.00
Sensitivity analysis
A reasonably possible strengthening (weakening) of the Interest Rate would have affected the finance cost,
equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain
constant.
31-Mar-20 31-Mar-19
Effect in INR Strengthening Weakening Strengthening Weakening
1% movement
Interest cost 146.67 (146.67) 200.00 (200.00)
Capital Management
The Company manages its capital to ensure that it will be able to continue as a Going Concern while maximising
the return to stakeholders through optimisation of the Debt and Equity Balance.

138 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

Further, the Company is also subject to externally imposed capital requirement as part of its debt covenant for
Term Loan for Melamine III plant, viz maintaining minimum Net Fixed Assets Coverage Ratio (of Melamine III
Plant Assets) of 1.25 times throughout the currency of the loan.
The Company manages its capital structure and makes adjustments to it in light of changes in economic
conditions and the requirements of the financial covenants. The Company monitors capital by computing the
above ratios on an annual basis and ensuring that the same is in Compliance with the requirements of the
Financial Covenants.
(` in lakhs)
Particulars INR
March, 2020 March, 2019
Net Fixed Assets (Melamine-III) 77,295.70 80,546.62
Total Debt (Melamine-III) 14,666.67 20,000.00
Net Fixed Asset Coverage Ratio 5.27 4.03

42. Research & Development Expenses (` in lakhs)

Particulars Year end 31st Year end 31st
March, 2020 March, 2019
Capital* 28.66 20.83
Recurring** 1,014.81 906.34
Total 1,043.47 927.17
*Capital Expenses included in PPE Note No. 5 28.66 20.83
**Recurring Expenses included in
Note No. 33 Employee Benefit expenses 1,001.68 895.91
Note No. 35 Other expenses 13.13 10.43

43. Corporate Social Responsibility (` in lakhs)

Particulars Year end 31st Year end 31st
March, 2020 March, 2019
Prescribed CSR expenditure @ 2% 990.13 931.02
Actual expenditure 990.00 1,101.49

44. Details on derivative instruments and unhedged foreign currency exposure

(I) (a) Forward exchange contracts and options (being derivative instruments), which are not intended for trading
or speculative purposes but for hedge purposes to establish the amount of reporting currency required or
available at the settlement date of certain payables and receivables.
Outstanding forward exchange contracts entered into by the Company as on 31 March, 2020
Currency Amount (in Mn) Buy / Sell Cross currency
USD 0.00 Buy Rupees
USD (4) Buy Rupees
Note: Figures in brackets relate to the previous year
(b) Currency Futures (other than forward exchange contracts stated above) which are not intended for trading
or speculative purposes but for hedge purposes to hedge against fluctuations in changes in exchange
rate.
Currency Amount (in Mn) Buy / Sell Cross currency
USD 44.00 Buy Rupees
USD (48.00) Buy Rupees
Note: Figures in brackets relate to the previous year

58TH ANNUAL REPORT 2019-20 139

 Notes to the Financial Statements

(II) The year-end foreign currency exposures that have not been hedged by a derivative instrument or otherwise,
represented in equivalent USD: USD 9.16 Mn (As at March 31, 2019: USD 27.44 Mn)

45. Leases
(i) The Company has taken various warehouses, godowns, guesthouses and office premises under operating
lease or rental agreements. Effective 1st April, 2019, the company has adopted Ind AS 116 and applied
to its leases, retrospectively, with the cumulative effect of initially applying the standard on the date of
initial application (April 01, 2019). Accordingly, the Company has not restated comparative information
and recognized right-of-use assets at an amount equal to the lease liability.Refer Note 5(ii) for details of
right-of-use assets and Note 26 for details of Lease Liability. Interest on lease liability ` 42.86 Lakhs in FY
2019-20 (Nil in FY 2018-19) has been included in Finance Costs and depreciation on right-of-use assets
has been included in Depreciation and amortization expense for the year.
(ii) Rent income includes lease rentals received towards office premises and land leased out for gas station.
Such operating lease is generally for a period of three to four years. There are no restrictions imposed by
lease arrangements.

46. Ind As 115 : Revenue from Contracts with Customers

The Company generates revenue primarily from manufacturing of Fertilizers and Chemical Products. The
Company has recognised revenue by satisfying its performance obligations at a point of time basis. The
revenue from contracts with customers to the amounts disclosed as total revenue are as under: (` in lakhs)
Particulars Year end 31st Year end 31st
March, 2020 March, 2019
Revenue from Contract with Customers 5,16,096.43 6,00,971.65
Revenue from Subsidy from Government 2,45,986.00 2,56,482.00
Total Revenue 7,62,082.43 8,57,453.65
The disaggregation of Total Revenue is as under:
(A) Revenue – Segment-wise (` in lakhs)
Particulars Year end 31st Year end 31st
March, 2020 March, 2019
Fertilizer Products 6,06,123.00 6,39,814.54
Industrial Products 1,55,959.43 2,17,639.11
Total Revenue 7,62,082.43 8,57,453.65
(B) Revenue – Activity-wise (` in lakhs)
Particulars Year end 31st Year end 31st
March, 2020 March, 2019
Revenue generated from Manufacturing Activity 6,15,813.88 6,56,049.91
Revenue generated from Trading Activity 1,46,268.55 2,01,403.74
Total Revenue 7,62,082.43 8,57,453.65
(C) Contract Liability: (` in lakhs)
Particulars Year end 31st Year end 31st
March, 2020 March, 2019
Opening Balance of Contract Liability 1,543.87 1,164.01
Revenue Recognised from the opening balance of contract liability 1,543.87 1,164.01
Current year Contract liability - Carried Forward 1,707.39 1,543.87
Closing Balance of Contract Liability 1,707.39 1,543.87

140 58TH ANNUAL REPORT 2019-20

 Notes to the Financial Statements

The nature of services and its disclosure of timing of satisfaction of performance obligation is mentioned
in para 3.1 of Note No 3.There are no contract assets in the Balance Sheet.Contract Liabilities in the
Balance Sheet constitutes advance payments and billings in excess of revenue recognised. The Company
expects to recognise such revenue in the next financial year.There were no significant changes in contract
liabilities during the reporting period except amount as mentioned in the table and explanation given
above.Under the payment terms generally applicable to the Company’s revenue generating activities,
prepayments are received only to a limited extent. Typically, payment is due upon or after completion of
delivery of the goods.
47. Disclosure as per regulation 34(3) and 53(f) of Securities and Exchange Board of India (listing obligations
and disclosures requirements) regulations, 2015:
Loans & Advances in the nature of loans to subsidiaries is ` Nil (PY: ` Nil)
48. Impact of Covid-19 Pandemic
In assessing the recoverability of receivables and certain investments, the company has considered internal
and external information up to the date of approval of these financial statements and economic forecasts.
Based on current indicators of future economic conditions, the company expects to recover the carrying amount
of these assets. The impact of the global health pandemic may be different from that estimated as at the date of
approval of these financial statements and the company will continue to closely monitor any material changes
to future economic conditions
49. Other Matters
(i) With respect to Fibre Unit and Methanol plant, the Net Realizable Value is higher compared to its carrying
value as on March 31, 2020.
(ii) The previous year's figures have been re-casted, regrouped and rearranged, whenever necessary to
confirm to this year's classifications.
(iii) Balances of Sundry Creditors, Sundry Debtors, Loans & advances, etc. are subject to confirmation and
reconciliation.
(iv) At present production at Polymer Unit has been stopped from February, 2020 due to economic unviability.
Value in use of Polymer Unit is higher compared to its carrying value as on March 31, 2020.

In terms of our report attached

For T R Chadha & Co LLP Arvind Agarwal
Chartered Accountants Chairman and Managing Director
Firm Registration No: 006711N / N500028
Brijesh Thakkar V. D. Nanavaty V. V. Vachhrajani
Partner ED (Finance) & CFO Company Secretary
Membership No: 135556

Vadodara
18th June, 2020

58TH ANNUAL REPORT 2019-20 141

 Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORT

To the Members of Gujarat State Fertilizers & Chemicals Limited
Report on the Audit of the Consolidated Financial Statements
Auditor’s Opinion
We have audited the accompanying consolidated financial statements of Gujarat State Fertilizers & Chemicals
Limited (hereinafter referred to as “the Parent”) and its subsidiary companies (the Parent and its subsidiaries together
referred as “the Group”), and its associates, comprising the Consolidated Balance Sheet as at 31st March, 2020, the
Consolidated Statement of Profit and Loss (including other comprehensive income), the Consolidated Cash Flow
Statement and the Consolidated Statement of changes in Equity for the year then ended, and a summary of the
significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial
statements”).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated
financial statements give the information required by the Companies Act, 2013 (“the Act”) Act in the manner so required
and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act
read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind As”) and other accounting
principles generally accepted in India, of the state of affairs of the Group as at March 31, 2020, the consolidated profit,
consolidated total comprehensive losses, consolidated changes in equity and its consolidated cash flows for the year
ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act.
Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the
Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the
Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence
requirements that are relevant to our audit of the consolidated financial statements under the provisions of the Act and
the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements
and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the consolidated financial statements.
Emphasis of Matter
We draw attention to Note no. 48 to the consolidated financial statement, to assess the recoverability of certain
receivables and investments, the management has considered internal and external information upto the date of
approval of the consolidated financial statement and economic forecasts. Based on current indicators of future economic
conditions, management expects to recover the carrying amount of these assets. The actual impact of global health
pandemic may be different from that estimated as at the date of approval of the consolidated financial statement and
management will continue to closely monitor any material changes to future economic conditions.
Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. We have determined the matters described below to be the key audit matters to be
communicated in our report.
Key Audit Matter Auditor’s Response
Evaluation of uncertain tax positions: Principal Audit Procedures
The Group has material uncertain tax positions for We evaluated the related accounting policy for provisioning
liability of ` 31,044.76 Lakhs including matters for tax exposures and found it to be appropriate. We have
under dispute which involves significant judgment obtained details of completed tax assessments and demands
to determine the possible outcome of these upto the year ended March 31, 2020 from management. We
disputes. Refer Notes 38 to the Consolidated evaluated auditee's response / opinion taken from various tax
Financial Statements. experts by auditee to challenge the underlying assumptions

142 58TH ANNUAL REPORT 2019-20

 Independent Auditors’ Report (Contd...)

in estimating the tax provision and the possible outcome of

the disputes. We also considered legal precedence and other
rulings in evaluating management's position on these
uncertain tax positions. Additionally, we considered the effect
of new information in respect of uncertain tax positions as at
March 31, 2020 to evaluate whether any change was required
to management's position on these uncertainties. From the
evidence obtained and in the context of the consolidated
financial statements, taken as a whole, we consider the
provisions in relation to uncertain tax positions as at 31 March
2020 to be appropriate.

Impairment of property, plant and equipment: Principal Audit Procedures

During the previous year, Group has discontinued We evaluated the management's various viable proposals,
its operations at Fiber & Polymer unit due to non- impairment calculations, assessing the net recoverable value
viability of its products. Gross block of the assets of the CGU used in the models, and the process by which
of the Fiber & Polymer unit and its carrying value they were drawn up, including comparing them to the latest
as on 31st March 2020 works out to ` 26,475.38 circle rates of the Land, and testing the underlying
Lakhs & ` 6,215.03 Lakhs. Further, methanol calculations. Based on our audit procedures, we found
plant having Gross Block and its carrying value management's assessment in determining the carrying value
as on 31st March, 2020 of ` 27,537.13 Lakhs of the property, plant and equipment of Fiber & Polymer unit
& ` 19,717.35 Lakhs is not in operation since and Methanol Plant to be reasonable. Refer Notes 49(i) &
last 3 to 4 years. We have considered this issue (iv) to the Consolidated Financial Statements.
to be a key audit matter because the analysis
performed by management requires the use of
complex estimates and judgments regarding the
future earnings performances \ recoverable
amount of the CGUs to which the aforementioned
assets belong.

Fair Value of assessment of subsidy receivables Principal Audit Procedures

from Government: Our audit procedure includes review of subsidy receivable
Government Subsidy Receivable forms a from Department of Fertilizer (i.e. sovereign Authority) is
significant part of the Group’s assets, amounting backed by the approved claims generated from MFMS
to ` 179,119.00 Lakhs as at March 31, 2020. (Mobile Fertilizer Management System).
Given the size of the subsidy balance relative to Subsidy income recognised and remained outstanding over
the total assets of the Group and the estimates significant period are discussed / enquired with management
and judgements described in Note 12 to the based on follow-up with Department of Fertilizers,
consolidated financial statement, the fair value Government of India including basis of management
assessment requires significant audit attention. judgement and realisation certainty thereof.
Based on the above procedures performed, the
management's assessment of implications of government
notifications / policies on recognition of subsidy revenue and
the recoverability were considered to be reasonable.

Accuracy of recognition, measurement, Principal Audit Procedures

presentation and disclosures of revenues and Our audit procedure focused on transactions occurring within
other related balances in view of adoption of proximity of the year end in the Fertilizer segment, obtaining
Ind AS 115 "Revenue from Contracts with evidence to support the appropriate timing of revenue
Customers" (new revenue accounting recognition based on terms and conditions set out in sales
standard): contracts, delivery documents and dealers' confirmation.
Group primarily manufactures and sells a number
of fertilizer and chemical products to its customers,

58TH ANNUAL REPORT 2019-20 143

 Independent Auditors’ Report (Contd...)

mainly through its own distribution network. Sales

contracts specifically w.r.t Bill and Hold transaction
contains constructive obligation for transfer of
control to the buyer. As per the terms of the
contract with the customers, Group use to
recognize the sale based on the invoicing and
considering the transfer of control and other
criteria set out in para B81 of Ind AS 115. Refer
Notes 46 to the Consolidated Financial
Statements.

Recognition / de-recognition and measurement Principal Audit Procedures

of Urea Subsidy Income • We assessed design, implementation and operative
Revenue from concession receivable from the effectiveness of management's key internal controls over
Government of India ('GOI') is recognized when revenue recognition.
control of the products has transferred to the • We performed test of details, on a sample basis and
customer and there is no unfulfilled obligation evaluated the underlying documents relating to urea
that could affect the customer's acceptance of the concession income.
products. Concessions in respect of urea, as
• We read relevant notifications issued by the GOI and
notified under the New Pricing Scheme, is
discussed with the management, to understand the
recognized with adjustments for escalation/de-
underlying matters and basis for management judgement
escalation in the prices of inputs and other
and estimates including necessary changes made in
adjustments, as estimated by the management in
estimates to address variations noted in past.
accordance with the known policy parameters in
this regard. • We reviewed the calculation of urea concession income
including escalation / de-escalation adjustments as per
During the current year, Group has recognized
known policy parameters in this regard.
Urea subsidy income of aggregating to
` 78,139.02 Lakhs. Considering significant • We assessed the disclosures in the financial statements
estimates involved, as mentioned above, revenue in this regard.
and profit may deviate on account of change in
such judgements and estimates.

Information Other than the Consolidated Financial Statements and Auditor’s Report Thereon
The Parent’s Board of Directors is responsible for the preparation of other information. The other information comprises
the information included in the Board’s Report and Annexure to Board’s Report, but does not include the consolidated
financial statements and our auditor’s report thereon. The other information is expected to be made available to us after
the date of this auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
identified above when it becomes available and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to
be materially misstated.
Management’s Responsibility for the Consolidated Financial Statements
The Parent’s Board of Directors is responsible for the matters stated in Section 134(5) of Act with respect to the
preparation of these consolidated financial statements that give a true and fair view of the consolidated financial
position, consolidated financial performance including other comprehensive income, consolidated cash flows and
statement of changes in equity of the Group including its Associates in accordance with Ind As and the accounting
principles generally accepted in India. The respective Board of Directors of the companies included in the Group and
of its associates are responsible for maintenance of adequate accounting records in accordance with the provisions of
the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the
selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and

144 58TH ANNUAL REPORT 2019-20

 Independent Auditors’ Report (Contd...)

prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating
effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and
presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the
Group are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless management either intends
to liquidate or to cease operations, or has no realistic alternative but to do so.
The respective Board of Directors of the companies included in the Group are also responsible for overseeing the
financial reporting process of the Group.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our
opinion on whether the holding company has adequate internal financial controls system in place and the operating
effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the ability of the group and its associates to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in
the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Group and its associates to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the consolidated financial statements that, individually or in aggregate,
makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be
influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and
in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial
statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical

58TH ANNUAL REPORT 2019-20 145

 Independent Auditors’ Report (Contd...)

requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Other Matters
a) The consolidated financial statements includes the unaudited/unreviewed financial statements/financial information
of 2 subsidiaries, whose financial statement/financial information reflects total assets of ` 17,008.40 Lakhs as at
31 March, 2020, total revenue of ` 45,751.12 Lakhs, total net profit after tax of ` 890.44 Lakhs and total
comprehensive income of ` 890.44 Lakhs for the year ended 31 March, 2020 respectively and net cash inflow of
` 1,590.73 Lakhs for the year ended on 31 March, 2020 as considered in the financial statement. The consolidated
financial statements also include the group share of profit after tax of ` 293.94 Lakhs and total comprehensive
income of ` 291.19 Lakhs for the year ended 31 March, 2020, as considered in the statement of respect of 3
associates whose financial statements/financial information have not been audited by us. This financial statements/
financial information are unaudited/unreviewed and have been furnished to us by the Management and our
opinion on the consolidated financial statements/financial information, in so far as it relates to the amounts and
disclosures included in respect of these subsidiaries and associates, is solely based on such unaudited financial
statements/financial information. In our opinion and according to the information and explanations given to us by
the Management, this financial statements / financial information are not material to the Group.
Our opinion on the consolidated financial statements above, and our report on Other Legal and Regulatory
Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done
and the report of the other auditors and the financial statements / financial information certified by the Management.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit and on the consideration of the report of other auditors
on separate financial statements of the subsidiary and the other financial information of associate companies
incorporated in India, referred in the Other Matters paragraph above we report, to the extent applicable, that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.
(b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated
financial statements have been kept so far as it appears from our examination of those books and the report
of the other auditor.
(c) The Consolidated Balance Sheet, the Consolidated statement of Profit and Loss (including Other
Comprehensive Income), the Consolidated Cash Flow Statement and Consolidated Statement of Changes
in Equity dealt with by this Report are in agreement with the relevant books of account maintained for the
purpose of preparation of the consolidated financial statements.
(d) In our opinion, the aforesaid consolidated financial statements comply with the Indian Accounting Standards
prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Account) Rules, 2014.
(e) On the basis of the written representations received from the directors of the Parent company as on March 31,
2020 taken on record by the Board of Directors of the Parent and the reports of the statutory auditor of its
subsidiary company incorporated in India, none of the directors of these entities is disqualified as on March
31, 2020 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference to financial statement and the
operating effectiveness of such controls, refer to our Report in “Annexure A”, which is based on the auditor’s
report of the Parent Company and Subsidiary company incorporated in India. Our report expresses an
unmodified opinion on the adequacy and operating effectiveness of internal financial controls over financial
reporting of those companies, for reasons stated therein.

146 58TH ANNUAL REPORT 2019-20

 Independent Auditors’ Report (Contd...)

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements
of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the managerial
remuneration paid by the Holding Company to its directors during the year is in accordance with the provisions
of Section 197 of the Act.
(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditor’s) Rules, 2014, as amended, in our opinion and to the best of our information
and according to the explanations given to us:
i. The consolidated financial statements disclose the impact of pending litigations on the consolidated
financial position of the Group as referred to in Note 38 to the consolidated financial statements.
ii. Provision has been made in the consolidated financial statements, as required under the applicable law
or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative
contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education
and Protection Fund by the Parent and its subsidiary company incorporated in India.

For T R Chadha & Co LLP

Chartered Accountants
Firm Regn. No: 006711N / N500028

Place : Ahmedabad Brijesh Thakkar

Date : 18th June, 2020 Partner
Membership No. 135556
UDIN : 20135556AAAADN3330

58TH ANNUAL REPORT 2019-20 147

 ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT

THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE CONSOLIDATED FINANCIAL STATEMENTS
OF GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED.
(Referred to in Paragraph 1(f) under the Heading of “Report on Other Legal and Regulatory Requirements”
section of our Report of even date)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act,
2013 (“the Act”)
In conjunction with our audit of the Consolidated Financial Statements of the Parent Company as of and for the year
ended March 31, 2020, we have audited the internal financial controls with reference to financial statements of GUJARAT
STATE FERTILIZERS & CHEMICALS LIMITED (hereinafter referred to as “the Parent Company”) and its subsidiary
Companies which are companies incorporated in India, as of that date.
Management’s Responsibility for Internal Financial Controls
The respective Board of Directors of the Parent, its Subsidiaries companies which are incorporated in India, are
responsible for establishing and maintaining internal financial controls based on the internal control with reference to
financial statements criteria established by these entities, considering the essential components of internal control
stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the Guidance Note)
issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation
and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and
efficient conduct of its business, including adherence to respective Company’s policies, the safeguarding of its assets,
the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the
timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors’ Responsibility
Our responsibility is to express an opinion on the internal financial control with reference to financial statements of the
Parent and its subsidiary companies, which are incorporated in India, based on our audit. We conducted our audit in
accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance
Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under section
143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards
and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether adequate internal financial controls with reference to financial statements was
established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls
with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with
reference to financial statements included obtaining an understanding of internal financial controls with reference to
financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error.
We believe that the audit evidence obtained by us and the other auditor of the subsidiary companies incorporated in
India, in terms of their report referred to in the Other Matters paragraph below, is sufficient and appropriate to provide
a basis for our audit opinion on the internal financial with reference to financial statements of the Parent and its
subsidiary companies incorporated in India.
Meaning of Internal Financial Controls with reference to financial statements
A Company’s internal financial control with reference to financial statements is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles. A company’s internal financial control with reference to
financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are

148 58TH ANNUAL REPORT 2019-20

 ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT (Contd...)

being made only in accordance with authorisations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to Financial Statements
Because of the inherent limitations of internal financial controls with reference to financial statements, including the
possibility of collusion or improper management override of controls, material misstatements due to error or fraud may
occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to
financial statements to future periods are subject to the risk that the internal financial control with reference to financial
statements may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us and based on the consideration
of the report of other auditor, as referred to in the Other Matters paragraph below, the Parent and its subsidiary
Companies which are incorporated in India, have, in all material respects, an adequate internal financial controls with
reference to financial statements and such internal financial controls with reference to financial statements were
operating effectively as at March 31, 2020, based on the internal control with reference to financial statements established
by the respective companies, considering the essential components of internal control stated in the Guidance Note on
Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Other Matters
Our aforesaid reports under section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal
financial controls with reference to financial statements in so far as it relates to consolidated / standalone financial
statements of subsidiary companies which are incorporated in India, is based solely on the corresponding reports of
the auditor of such company.
Our opinion is not modified in respect of the above matter.

For T R Chadha & Co LLP

Chartered Accountants
Firm Regn. No: 006711N / N500028

Place : Ahmedabad Brijesh Thakkar

Date : 18th June, 2020 Partner
Membership No. 135556
UDIN : 20135556AAAADN3330

58TH ANNUAL REPORT 2019-20 149

 CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2020

(` in lakhs)
Particulars Note As at As at
31st March 2020 31st March 2019

A. ASSETS

1. Non-current assets

(a) Property, Plant and Equipments 5 2,89,801.14 2,81,769.32

(b) Capital work-in-progress 5 10,705.50 18,722.78

(c) Right of Use Assets 5 230.46 -

(d) Other Intangible assets 6 158.20 310.59

(e) Financial Assets

(i) Investments 7 2,08,741.19 2,37,638.98

(ii) Others financial assets 8 3,007.28 4,419.15

(f) Income tax assets (Net) 23 15,121.97 9,904.01

(g) Deferred tax assets (Net) 23 5,272.26 -

(h) Other non current assets 9 32,287.45 33,320.33

5,65,325.45 5,86,085.16

2. Current assets

(a) Inventories 10 1,37,368.75 1,65,524.30

(b) Financial Assets

(i) Trade receivable 11 84,977.36 81,161.95

(ii) Government subsidies receivable 12 1,79,119.00 1,65,791.42

(iii) Cash and cash equivalents 13 3,404.47 4,082.20

(iv) Bank balances other than (iii) above 14 1,361.43 2,754.25

(v) Loans 15 19,229.80 17,463.64

(vi) Others financial assets 16 964.21 479.72

(c) Other current assets 17 19,820.83 22,317.02

4,46,245.85 4,59,574.51

3. Assets held for sale 18 703.98 703.98

TOTAL ASSETS 10,12,275.29 10,46,363.65

150 58TH ANNUAL REPORT 2019-20

 CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2020

(` in lakhs)
Particulars Note As at As at
31st March 2020 31st March 2019

B. EQUITY AND LIABILITIES

EQUITY
(a) Equity share capital 19 7,969.55 7,969.55
(b) Other Equity 20 6,78,175.24 7,24,098.28
(c) Non Controlling Interest 128.52 123.70
6,86,273.31 7,32,191.53
LIABILITIES
1. Non-current liabilities
(a) Financial Liabilities
(i) Borrowings 21 9,333.33 14,666.67
(b) Provisions 22 80,145.76 47,190.35
(c) Deferred Subsidy Income 105.03 116.26
(d) Deferred tax liabilities (Net) 23 - 3,497.41
89,584.12 65,470.69
2. Current liabilities
(a) Financial Liabilities
(i) Borrowings 24 1,41,241.45 86,868.79
(ii) Trade payables 25 -
- Total outstanding dues of MSMED 809.66 1,057.41
- Total outstanding dues of creditors other than MSMED 42,757.80 1,02,808.75
(iii) Other financial liabilities 26 29,783.04 43,601.76
(b) Other current liabilities 27 7,954.67 3,323.79
(c) Provisions 28 13,337.18 10,541.86
(d) Current tax liabilities (Net) 23 534.06 499.07
2,36,417.86 2,48,701.43
TOTAL EQUITY & LIABILITIES 10,12,275.29 10,46,363.65
See accompanying notes forming part of the consolidated
financial statements 1 to 51

In terms of our report attached

For T R Chadha & Co LLP Arvind Agarwal
Chartered Accountants Chairman and Managing Director
Firm Registration No: 006711N / N500028
Brijesh Thakkar V. D. Nanavaty V. V. Vachhrajani
Partner ED (Finance) & CFO Company Secretary
Membership No: 135556

Vadodara
18th June, 2020

58TH ANNUAL REPORT 2019-20 151

 CONSOLIDATED STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31 ST MARCH, 2020

(` in lakhs)
Particulars Note Year Ended 31st March
2020 2019
I Income
Revenue from operations 29 7,79,797.79 8,49,067.34
Other income 30 10,651.06 10,752.59
Total income 7,90,448.85 8,59,819.93
II Expenses
Cost of materials consumed 31 3,59,718.06 4,22,616.78
Purchase of Stock in Trade 1,43,126.71 2,10,545.65
Changes in inventories of finished goods, work in process
and stock in trade 32 21,618.60 (64,594.66)
Power and Fuel 65,253.35 67,691.75
Employee benefits expense 33 72,883.58 53,068.43
Finance costs 34 11,479.74 6,101.08
Depreciation and amortization expense 17,094.87 12,625.39
Other expenses 35 85,476.16 84,873.09
Total Expenses 7,76,651.07 7,92,927.51
III Profit before share of profit/(loss) of Associates 13,797.78 66,892.42
IV Share of profit of Associates 293.96 2.20
V Profit before tax 14,091.74 66,894.62
VI Tax expense
Current tax 299.45 12,560.55
Deferred tax 23 2,478.95 5,481.26
MAT credit recognised - (689.37)
Earlier Year Tax 23 348.89 228.98
VII Profit for the year 10,964.45 49,313.20
VIII Other Comprehensive Income
(A) Items that will be reclassified to profit or loss - -
(B) Items that will not be reclassified to profit or loss
Re-measurement gains/ (losses) on defined benefit plans (30,929.40) (1,284.36)
Income tax effect on above 10,807.00 449.59
Net fair value (loss) / gain on investments in equity instruments
at FVTOCI (28,392.23) (44,719.61)
- Income tax effect on above 2,211.04 7,346.07
Net other comprehensive income that will not be reclassified
to profit or loss (46,303.59) (38,208.30)
IX Total Comprehensive Income for the year (VII+VIII) (35,339.14) 11,104.90
Net Profit attributable to :
(a) Owners of the company 10,959.05 49,313.29
(b) Non Controlling Interest 5.40 (0.10)
Other Comprehensive Income attributable to :
(a) Owners of the company (46,303.59) (38,208.30)
(b) Non Controlling Interest - -
Total Comprehensive Income attributable to :
(a) Owners of the company (35,344.54) 11,104.99
(b) Non Controlling Interest 5.40 (0.10)
Earnings per equity share (face value of ` 2/- each)
Basic and Diluted Earnings per equity share: 36 2.75 12.38
See accompanying notes forming part of the financial statements 1 to 51

In terms of our report attached

For T R Chadha & Co LLP Arvind Agarwal
Chartered Accountants Chairman and Managing Director
Firm Registration No: 006711N / N500028
Brijesh Thakkar V. D. Nanavaty V. V. Vachhrajani
Partner ED (Finance) & CFO Company Secretary
Membership No: 135556

Vadodara
18th June, 2020

152 58TH ANNUAL REPORT 2019-20

 CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2020

(` in lakhs)
Particulars Year Ended 31st March
2020 2019
A Cash Flow From Operating Activities :
Profit Before Tax 14,091.73 66,894.61
Adjustments for :
Depreciation and amortisation expense 17,094.87 12,625.39
Amortisation of lease hold land 355.98 355.98
Share of Profit of Associates (293.96) (2.20)
Finance cost 11,469.26 6,126.13
Interest income (133.37) (348.92)
Loss on fixed assets sold/written off 424.08 17.23
Dividend income (3,490.40) (3,657.86)
Provision for doubtful debts/advances 536.08 38.86
Operating Profit before Working Capital Changes 40,054.27 82,049.20
Movements in working capital:
Inventories 28,155.56 (78,215.82)
Trade receivables, loans and advances and other assets (14,586.50) 19,929.70
Trade payables, other current liabilities and provision (49,424.65) 37,381.28
Cash Generated from Operations 4,198.68 61,144.36
Direct taxes paid (net of refunds) (5,866.30) (10,307.44)
Net Cash Flow from Operating Activities (1,667.62) 50,836.93
B Cash Flow From Investing Activities :
Purchase of property, plant & equipments (including CWIP & capital advances) (30,170.60) (29,909.92)
Purchase of non current investments 796.75 (2,202.75)
Interest received 144.25 346.52
Dividend received 3,538.40 3,705.86
Net Cash Flow used in Investing Activities (25,691.20) (28,060.29)
C Cash Flow From Financing Activities
Repayment of long term borrowings (5,333.33) (40,536.86)
Proceeds from long term borrowings - 30,000.00
Net increase/(decrease) in short term borrowings 54,372.66 2,778.78
Interest paid (11,732.80) (5,862.96)
Dividend paid (including tax thereon) (10,625.44) (10,607.86)
Net Cash Flow from/ (used in) Financing Activities 26,681.09 (24,228.90)
Net Increase / (Decrease) in Cash & Cash Equivalents (677.73) (1,452.26)
Cash and Cash Equivalents as at the beginning of the year 4,082.20 5,534.47
Cash and Cash Equivalents as at end of the year (Refer Note-13) 3,404.47 4,082.20
Notes:
Components of Cash and cash equivalents
Cash on hand 89.20 34.06
Balances with banks
In current accounts 3,315.27 4,048.14
Total Cash and cash equivalents 3,404.47 4,082.20
The Cash flow statement has been prepared under the indirect method as set out in the Indian Accounting Standard 7 on Cash Flows
Statement.
See accompanying notes forming part of the financial statements

In terms of our report attached

For T R Chadha & Co LLP Arvind Agarwal
Chartered Accountants Chairman and Managing Director
Firm Registration No: 006711N / N500028
Brijesh Thakkar V. D. Nanavaty V. V. Vachhrajani
Partner ED (Finance) & CFO Company Secretary
Membership No: 135556

Vadodara
18th June, 2020

58TH ANNUAL REPORT 2019-20 153

 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (SOCIE)

Note (a) : Equity share capital (` in lakhs)

Particulars Amount
Balance as at April 01, 2018 7,969.55
Changes in equity share capital during the year -
Balance as at March 31, 2019 7,969.55
Balance as at April 01, 2019 7,969.55
Changes in equity share capital during the year -
Balance as at March 31, 2020 7,969.55

Note (b) : Other equity (` in lakhs)

Reserves & Surplus Items of OCI
Particulars Capital Security Capital General Retained Equity Total Equity
reserve premium redemption reserve earnings Instruments
reserve through
OCI
Balance as at April 01, 2018 1,256.33 30,524.02 3,335.00 4,46,153.31 47,352.44 1,93,750.09 7,22,371.18
Capital Reserve on acquisition of shares in Associates 1,200.38 1,200.38
Profit for the year - - - - 49,313.29 - 49,313.29
Other comprehensive income for the year net of income tax - - - - (37,373.54) (37,373.54)
Other comprehensive income arising from remeasurement of defined
benefit obligation net of income tax - - - - (834.77) - (834.77)
Total comprehensive income for the year - - - - 48,478.52 (37,373.54) 11,104.99
Dividends paid [Note 20] - - - - (8,766.51) - (8,766.51)
Dividend Distribution Tax (DDT) [Note 20] - - - - (1,811.77) - (1,811.77)
Transfer to General reserve - - - 38,000.00 (38,000.00) - -
Balance as at March 31, 2019 2,456.71 30,524.02 3,335.00 4,84,153.31 47,252.69 1,56,376.56 7,24,098.28
Balance as at April 01, 2019 2,456.71 30,524.02 3,335.00 4,84,153.31 47,252.69 1,56,376.56 7,24,098.28
Profit for the year - - - - 10,958.45 - 10,958.45
Other comprehensive income for the year net of income tax - - - - - (26,181.19) (26,181.19)
Other comprehensive income arising from remeasurement of defined
benefit obligation net of income tax - - - - (20,122.40) - (20,122.40)
Total comprehensive income for the year - - - - (9,163.95) (26,181.19) (35,345.14)
Dividends paid [Note 20] - - - - (8,766.50) - (8,766.50)
Dividend Distribution Tax (DDT) [Note 20] - - - - (1,811.40) - (1,811.40)
Balance as at March 31, 2020 2,456.71 30,524.02 3,335.00 4,84,153.31 27,510.84 1,30,195.36 6,78,175.24

In terms of our report attached

For T R Chadha & Co LLP Arvind Agarwal
Chartered Accountants Chairman and Managing Director
Firm Registration No: 006711N / N500028
Brijesh Thakkar V. D. Nanavaty V. V. Vachhrajani
Partner ED (Finance) & CFO Company Secretary
Membership No: 135556

Vadodara
18th June, 2020

154 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

Notes to the Consolidated Financial Statements for the derecognized when the Group los es control of the
year ended March 31, 2020 subsidiary. Subsidiaries have been consolidated on a
line-by-line basis by adding together the book values of
1. Corporate Information
the like items of assets, liabilities, equity, income and
Gujarat State Fertilizers and Chemicals Limited “the expenses. Intercompany transactions, balances and
Company” is a public company domiciled in India and is unrealized gains resulting on intra-group transactions are
incorporated under the provisions of the Companies Act eliminated in full. Unrealized losses resulting from intra-
applicable in India. The Company is principally engaged group transactions are eliminated in arriving at the
in production of fertilizers and chemicals. Its shares are carrying amount of assets unless transaction provides
listed on two recognised stock exchanges in India. The an evidence of impairment of transferred asset.
regis tered office of the Company is loc ated at
Non-controlling interests represent the portion of profit or
Fertilizernagar - 391 750, Dist. Vadodara.
loss and net assets not held by the Group and are
These consolidated financial statements were authorised presented separately in the Statement of Profit and Loss
for issuance by the Board of Directors of the Company in and Consolidated Balance Sheet, separately from parent
their meeting held on June 18, 2020. shareholders’ equity. Profit and loss and each component
2. Basis of preparation of Consolidated Financial of other comprehensive income (OCI) are attributed to
Statements the equity holders of the parent of the Group and to the
non-controlling interests, even if this results in the non-
2.1) Basis of preparation and compliance with Ind AS controlling interests having a deficit balance.
The consolidated financial statements are prepared in Changes in the Group’s ownership interests in subsidiaries
accordance with the principles and procedures laid down that do not result in the Group losing control over the
under the Accounting Standard notified under Section subsidiaries are accounted for as equity transactions.
133 of the Companies Act 2013 read with Rule 7 of the The carrying amounts of the Groups interests and the
Companies (Accounts) Rules, 2014 non-controlling interests are adjusted to reflect the
2.2) Principles of Consolidation changes in their relative interests in the subsidiaries.
The consolidated financial statements comprise the Associates - Equity Accounting
financial statements of the Company, its subsidiaries and An associate is an entity over which the Group has
equity accounting of its investment in associates. significant influence. Significant influence is the power to
Consolidation financial statements are prepared using participate in the financial and operating policy decisions
uniform accounting policies for like transactions and other of the investee but is not control or joint control over
event in similar circumstances. If a member of the group those policies.
uses accounting policies other than those adopted in the The results and assets and liabilities of associates are
c onsolidated financ ial s tatements , appropriate incorporated in the consolidated financial statements using
adjustments are made to that group member’s financial the equity method of accounting. Under the equity method,
statements in preparing the cons olidated financial an investment in an associate is initially recognized at
s tatements to ensure conformity with the group’s cost and adjusted thereafter to recognize the Group’s
accounting policies. share of post-acquisition profits or losses and that of
The financial statements of all the entities used for the other c omprehensive income of the as s oc iate.
purpose of consolidation are drawn up to same reporting Distributions received from an associate reduce the
date as that of the parent company. When the end of the carrying amount of the investment. Unrealized gains and
reporting period of the parent is different from that of a losses resulting from transactions between the Group,
subsidiary, jointly controlled entity or associate, the Associate entities are eliminated to the extent of the
respective entity prepares, for consolidation purposes, interest in the Associate entities.
additional financial information as of the same date as the After application of the equity method, at each reporting
financial statements of the parent to enable the parent to date, the Group determines whether there is objective
consolidate the financial information of the said entity, evidence that the investment in the associate is impaired.
unless it is impracticable to do so. If there exists such evidence, the Group determines extent
The c ons olidated financial statements hav e been of impairment and then recogniz es the los s in the
prepared on the following basis. Statement of Profit and Loss.
Subsidiaries Upon loss of significant influence over the associate, the
Group measures and recognizes any retained investment
Subsidiaries are all entities over which the Group has at its fair value. Any difference between the carrying
control. The Group controls an entity when the Group is amount of the associate and the fair value of the retained
exposed, or has rights, to variable returns from its power investment and proceeds from disposal is recognized in
and involvement with the investee and has the ability to profit and loss.
affect those returns through its power over the investee.
The list of c ompanies inc luded in c ons olidation,
Subsidiaries are considered for consolidation when the relationships with the company and shareholding therein
Group obtains control over the s ubsidiary and are is provided in Note No. 50

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2.3) Basis of measurement 3.1 Revenue recognition

The c ons olidated financial statements hav e been The Group deriv es rev enues primarily from
prepared on a going concern basis, using historical cost manufacturing of Fertilizers and Chemical Products.
convention and on an accrual method of accounting, Revenue from Operations is recognised in the Statement
except for the following assets and liabilities which have of Profit and Loss when:
been measured at fair value, as required by relevant Ind
AS. • The income generating activities have been carried
out on the basis of a binding agreement.
1. Derivative financial instruments
• The income can be measured reliably.
2. Certain financial assets and liabilities measured at
• It is probable that the economic benefits associated
fair value (refer accounting policy regarding financial
with the transaction will flow to the Group.
instruments)
• Costs relating to the transaction can be measured
3. Defined benefit plans reliably.
2.4) Functional and presentation currency Revenue for all businesses is recognized upon transfer
The consolidated financial statements are prepared in of control of promised goods or services to customers in
Indian Rupees, which is the Group’s functional and an amount that reflects the consideration to which the
presentation currency. All financial information presented Group expects to be entitled in exchange for the goods
in Indian Rupees has been rounded to the nearest lakhs and services.
with two decimals. Sale of fertilizer products is recognised net of returns and
2.5) Current and non-current classification trade discounts. Sales exclude sales tax/value added
tax/GST collected on behalf of Government. Revenue is
The Group presents assets and liabilities in the Balance also recognised on sale of goods in case where the
Sheet based on current / non-current classification. delivery is kept pending at the instance of the customer,
An asset is classified as current if it satisfies any of the as the performance obligation has been satisfied and
following criteria: control are transferred and customer takes title and
accepts billing as per usual payment terms.
a) It is expected to be realised or intended to sold or
Sales of industrial products are accounted on the dispatch
consumed in the Group’s normal operating cycle,
basis except export sales, which are recognised on the
b) It is held primarily for the purpose of trading, basis of bill of lading on satisfaction of performance and
transfer of control.
c) It is expected to be realised within twelve months
after the reporting period, or The amounts receivable from various agencies are
accounted for on accrual basis except interest on delayed
d) It is a cash or cash equivalent unless restricted
payments, refunds from customs & excise authorities,
from being exchanged or used to settle a liability insurance claims (other than marine claims), etc. where
for atleast twelve months after the reporting period. it is not possible to ascertain the income with reasonable
All other assets are classified as non-current. accuracy or in absence of finality of the transaction.
A liability is classified as current if it satisfies any of the Revenues in excess of invoicing are classified as contract
following criteria: assets (referred as unbilled revenue) while invoicing in
excess of revenues are classified as contract liabilities
a) it is expected to be settled in the Group’s normal (which we refer to as unearned revenues).
operating cycle,
Subsidy income
b) it is held primarily for the purpose of trading,
Urea subsidy income is recognised on the basis of the
c) it is due to be settled within twelve months after the rates notified from time to time by the Government of
reporting period India on the quantity of fertilisers sold by the Company for
d) there is no unconditional right to defer the settlement the period for which notification has been issued, further
of the liability for at least twelve months after the adjusted for input price escalation/de-escalation estimated
by management, based on prescribed norms as notified
reporting period
by Govt. of India.
The Group classifies all other liabilities as non-current.
Subsidy on Phosphatic and Potassic (P&K) fertilizers is
Current liabilities include current portion of non-current
recognized as per concession rates notified by the
financial liabilities. Government of India in accordance with Nutrient Based
Deferred tax assets and liabilities are classified as non- Subsidy Policy from time to time and Freight subsidy has
current assets and liabilities. been ac c ounted for in line with the polic y of the
Government of India.
3 The Group has applied the following accounting policies
to all periods presented in the consolidated financial Subsidy on City Compost is recognized based on rates,
statements. as notified by the Government of India.

156 58TH ANNUAL REPORT 2019-20

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Interest income Deferred tax assets and liabilities are offset when there is
a legally enforceable right to offset current tax assets
For all debt instruments measured either at amortised
and liabilities and when the deferred tax balances relate
cost or at fair value through other comprehensive income,
to the same taxation authority. Current tax assets and
interest income is recorded using the effective interest
tax liabilities are offset where the entity has a legally
rate (EIR), which is the rate that exactly discounts the
enforceable right to offset and intends either to settle on a
estimated future cash payments or receipts over the
net basis, or to realise the asset and settle the liability
expected life of the financial instrument or a shorter period,
simultaneously.
where appropriate, to the gross carrying amount of the
financial asset or to the amortised cost of a financial Current and deferred tax is recognised in profit or loss,
liability. Interest income is included in other income in the except to the extent that it relates to items recognised in
statement of profit and loss. other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive
Dividends income or directly in equity, respectively.
Dividend income is accounted for when the right to receive The Group recognizes tax c redits in the nature of
the s ame is es tablished, whic h is generally when Minimum Alternate Tax (MAT) credit entitlement only to
shareholders approve the dividend. the extent that it is probable that the Group will pay normal
Insurance Claims income tax during the specified period, i.e., the period for
which tax credit is allowed to be carried forward, sufficient
Claims receivable on account of insurance are accounted
to utilize the MAT credit entitlement. The carrying amount
for to the extent no significant uncertainty exist for the
of tax credit is reviewed at each reporting date as stated
measurement and realisation of the amount.
above.
Rental Income
3.3 Non-current assets held for sale
Rental income arising from operating leases is accounted
The Group classifies non-current assets as held for sale
for on a straight-line basis over the lease terms and is
if their carrying amounts will be recovered principally
included in revenue in the statement of profit or loss due through a sale rather than through continuing use. The
to its operating nature. Group treats sale of the asset to be highly probable when:
3.2 Taxes  The appropriate level of management is committed
Tax expense comprises of current income tax & deferred to a plan to sell the asset,
tax  An ac tiv e programme to loc ate a buyer and
Current income tax complete the plan has been initiated,
Current income tax assets and liabilities are measured at  The sale is expected to qualify for recognition as a
the amount expected to be recovered from or paid to the completed sale within one year from the date of
taxation authorities, based on the rates and tax laws classification, and
enacted or substantively enacted, at the reporting date in  Actions required to complete the plan indicate that
India where the entity operates and generates taxable it is unlikely that significant changes to the plan will
income. be made or that the plan will be withdrawn.
Current tax items are recognised in correlation to the Non-current assets held for sale are measured at the
underlying transaction either in OCI or directly in equity. lower of their carrying amount and the fair value less
Management periodically evaluates positions taken in the costs to sell. Assets and liabilities classified as held for
tax returns with respect to situations in which applicable sale are presented separately in the balance sheet.
tax regulations are subject to interpretation and Property, plant and equipment and intangible assets once
establishes provisions where appropriate. classified as held for sale are not depreciated or amortised.
Deferred tax 3.4 Property, plant and equipment and intangible assets
Deferred income tax is provided in full, using the liability Freehold land is carried at historical cost. All other items
method, on temporary differences arising between the of property, plant and equipment are stated at historical
tax bases of assets and liabilities and their carrying c os t les s deprec iation. His toric al cos t inc ludes
amounts in the financial statements. Deferred income tax expenditure that is directly attributable to the acquisition
is determined using tax rates (and laws) that have been of the items.
enacted or substantially enacted by the end of the reporting
period and are expected to apply when the related deferred Subsequent costs are included in the asset’s carrying
amount or rec ognised as a s eparate as set, as
income tax asset is realised or the deferred income tax
appropriate, only when it is probable that future economic
liability is settled.
benefits associated with the item will flow to the Group
Deferred tax assets are recognised for all deductible and the cost of the item can be measured reliably. Such
temporary differences and unused tax losses only if it is cost includes the cost of replacing part of the plant and
probable that future taxable amounts will be available to equipment. When significant parts of plant and equipment
utilise those temporary differences and losses. are required to be replaced at intervals, the Group

58TH ANNUAL REPORT 2019-20 157

 Notes to the Consolidated Financial Statements

depreciates them separately based on their specific useful of the assets. The residual values are not more than 5%
lives. Items of stores and spares that meet the definition of the original cost of the asset.
of property, plant and equipment are capitalized at cost.
The assets’ residual values and useful lives are reviewed,
Otherwise, such items are classified as inventories. The
and adjusted if appropriate, at the end of each reporting
carrying amount of any component accounted for as a
period.
separate asset is derecognised when replaced. All other
repairs and maintenance are charged to profit or loss An asset’s carrying amount is written down immediately
during the reporting period in which they are incurred. to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
Assets under erection / installation of the existing projects
and on-going projects are shown as “Capital Work in Leasehold land, other than that on perpetual lease, is
Progress”. amortized over the life of the lease.
Capital advances given for procurement of Property, plant Intangible assets are amortized over their estimated
and equipment are treated as other non-current assets. economic lives but not exceeding ten years on a straight-
line basis.
In the absence of availability of specific original cost in
respect of a part of assets capitalised under turn-key The useful lives of the property, plant and equipment are
contracts, the original value of such asset written / as follows:
disposed off is estimated on the basis of its current cost Assets Estimated Useful life
adjusted for price and technological factors.
Freehold Land —
Major cost of civil works required as plant and machinery
s upports , on the bas is of tec hnical estimates, is Leasehold Land 20 years
considered as Plant & Machinery. Buildings 30-60 years
Intangible assets Bridge, culverts, bunders, etc. 30 years
Intangible assets are recognised when it is probable that Roads 5-10 years
the future economic benefits that are attributable to the Plant and machinery 15-25 years
assets will flow to the Group and the cost of the asset can
be measured reliably. Furniture and fittings 10 years

Intangible assets acquired separately are measured on Motor Vehicles 5-10 years
initial recognition at cost. Following initial recognition, Railway sidings 15 years
intangible assets are carried at cost less any accumulated Office equipment 5 years
amortisation and accumulated impairment losses, if any.
Cost of intangible assets comprises of purchase price Computers and Data Processing units 3-6 years
and attributable expenditure on making the asset ready Laboratory equipment 10 years
for its intended use. Internally generated intangibles,
Electrical Installation and Equipment 10 years
exc luding c apitalised dev elopment c os ts, are not
capitalised and the related expenditure is reflected in profit Library books 15 years
or loss in the period in which the expenditure is incurred. An item of property, plant and equipment is derecognized
Research and Development upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset.
Capital expenditure on Research & Development activities Any gain or loss arising on the disposal or retirement of
is included in Property, plant and equipment to the extent an item of property, plant and equipment is determined as
it has alternative economic use. Revenue expenditure the difference between the sales proceeds and the
pertaining to research activity is charged under respective carrying amount of the asset and is recognised in profit
account heads in the statement of Profit & Loss. or loss.
Depreciation methods, estimated useful lives and 3.5 Impairment of non-financial assets
residual value
The Group assesses, at each reporting date, whether
Depreciation on Property, plant and equipment is provided there is an indication that an asset may be impaired. If
on Straight Line Method at the rates presc ribed in any indication exists, or when annual impairment testing
Schedule II to the Company’s Act, 2013. Depreciation on for an asset is required, the Group estimates the asset’s
additions to Property, plant and equipment and assets recoverable amount. An asset’s recoverable amount is
disposed off / discarded is charged on pro-rata basis. the higher of an asset’s or cash-generating unit’s (CGU)
Depreciation on commissioning of plants and other assets fair value less costs of disposal and its value in use.
of new projects is charged for the days they are actually Recoverable amount is determined for an individual asset,
put to use. unless the asset does not generate cash inflows that are
The useful lives have been determined based on technical largely independent of those from other assets or group
evaluation done by the management’s expert which are of assets. When the carrying amount of an asset or CGU
higher than those s pec ified by Schedule II to the exceeds its recoverable amount, the asset is considered
Companies Act; 2013, in order to reflect the actual usage impaired and is written down to its recoverable amount.

158 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

Recoverable amount is determined: The Group’s lease asset primarily consists of leases for
buildings. The Group ass esses whether a contract
(i) In case of individual asset, at higher of the fair
contains a lease, at inception of a contract. A contract is,
value less cost to sell and value in use; and
or contains, a lease if the contract conveys the right to
(ii) In case of cash-generating unit (a Group of assets control the use of an identified asset for a period of time in
that generates identified, independent cash flows), exchange for consideration. To assess whether a contract
at the higher of the cash-generating unit’s fair value conveys the right to control the use of an identified asset,
less cost to sell and the value in use. the Group assesses whether: (i) the contract involves
In assessing value in use, the estimated future cash the use of an identified as set (ii) the Group has
flows are discounted to their present value using a pre- substantially all of the economic benefits from use of the
tax dis c ount rate that reflec ts c urrent market asset through the period of the lease and (iii) the Group
assessments of the time value of money and the risks has the right to direct the use of the asset.
specific to the asset. In determining fair value less costs Group as a lessee
of disposal, recent market transactions are taken into
account. If no such transactions can be identified, an At the date of commencement of the lease, the Group
appropriate valuation model is used. These calculations rec ogniz es a right-of-use as set (“ROU”) and a
are corroborated by valuation multiples, quoted share corresponding lease liability for all lease arrangements in
prices for publicly traded companies or other available which it is a lessee, except for leases with a term of
fair value indicators. twelve months or less (short-term leases) and low value
leases. For these short-term and low value leases, the
The Group bases its impairment calculation on detailed Group recognizes the lease payments as an operating
budgets and forecast calculations, which are prepared expense.
separately for each of the Group’s CGUs to which the
individual assets are allocated. These budgets and The right-of-use assets are initially recognized at cost,
forecast calculations generally cover a period of five which comprises the initial amount of the lease liability
years. For longer periods, a long-term growth rate is adjusted for any lease payments made at or prior to the
calculated and applied to project future cash flows after commencement date of the lease plus any initial direct
the fifth year. costs less any lease incentives. They are subsequently
measured at cost less accumulated depreciation and
Impairment losses of continuing operations, including impairment losses.
impairment on inventories, are recognised in the statement
of profit and loss , exc ept for properties previously Right-of-use as sets are depreciated from the
revalued with the revaluation surplus taken to OCI. For commencement date on a straight-line basis over the
such properties, the impairment is recognised in OCI up shorter of the lease term and useful life of the underlying
to the amount of any previous revaluation surplus. asset. Right of use assets are evaluated for recoverability
whenever events or changes in circumstances indicate
Intangible assets with indefinite useful lives are tested for that their carrying amounts may not be recoverable. For
impairment annually at the CGU level, as appropriate, the purpose of impairment testing, the recoverable amount
and when circumstances indicate that the carrying value (i.e. The higher of the fair value less cost to sell and the
may be impaired. value-in-use) is determined on an individual asset basis
3.6 Borrowing costs unless the asset does not generate cash flows that are
largely independent of those from other assets. In such
Borrowing costs directly attributable to the acquisition, cases, the recoverable amount is determined for the Cash
construction or production of an asset that necessarily Generating Unit (CGU) to which the asset belongs.
takes a substantial period of time to get ready for its
intended use or sale are capitalised as part of the cost of The lease liability is initially measured at amortized cost
the asset. All other borrowing costs are expensed in the at the present value of the future lease payments. The
period in which they occur. Borrowing costs consist of lease payments are discounted using the interest rate
interest and other costs that an entity incurs in connection implicit in the lease or, if not readily determinable, using
with the borrowing of funds. Borrowing cost also includes the incremental borrowing rates. Lease liabilities are
exchange differences to the extent regarded as an remeasured with a corresponding adjustment to the related
adjustment to the borrowing costs. right of use asset if the Group changes its assessment if
whether it will exercise an extension or a termination
3.7 Leases
option.
Transition
Lease liability and ROU asset have been separately
Effective April 01, 2019, the Group adopted Ind As 116 presented in the Balance Sheet and finance cost portion
“leases” and applied the standard to all applicable lease of lease payments have been classified as financing cash
contracts existing on April 1, 2019 using the modified flows.
retrospective method with cumulative effect of initially
Group as a lessor
applying the standard recognised on the date of initial
applic ation. Ac c ordingly, Group has not res tated At the inception of the lease, the Group classifies each of
comparative information and recognised right of use its leases as either an operating lease or a finance lease.
assets at an amount equal to lease liability. The Group recognises lease payments received under

58TH ANNUAL REPORT 2019-20 159

 Notes to the Consolidated Financial Statements

operating leases as income over the lease term on a fund on behalf of its employ ees . The
straight-line basis. calculation of defined benefit obligation is
performed annually by a qualified actuary
3.8 Inventories
using the projected unit credit method.
Items of inventories are measured at lower of cost and
net realisable value after providing for obsolescence, if Remeasurements of the net defined benefit
any. Cost of inventories comprises of cost of purchase, liability, which comprise actuarial gains and
cost of conversion and other costs including manufacturing losses, the return on plan assets (excluding
overheads incurred in bringing them to their respective interest) and the effect of the asset ceiling (if
present location and condition. Cost of raw materials, any, excluding interest), are recognised in
process chemicals, stores and spares, packing materials, OCI.
trading and other products are determined on weighted (iii) Other long-term employee benefits
average basis.
Other long-term employee benefits comprise
3.9 Employee benefits of leave encashment for eligible employees
Defined benefit plans: of Group. The obligation is measured on the
basis of an annual independent actuarial
(i) Short-term employee benefits valuation using the projected unit credit
Short term employee benefits are recognized as method. Remeasurements gains or losses
an expense at the undiscounted amount in the are recognised in profit or loss in the period
statement of profit and loss of the year in which the in which they arise.
related service is rendered. 3.10 Financial instruments
(ii) Post Employment benefits Financial instruments are recognised when the Group
(a) Defined contribution plans becomes a party to the contractual provisions of the
instrument. Regular way purchases and sales of financial
A defined contribution plan is a post-
assets are recognised on trade-date, the date on which
employment benefit plan under which an
the Group commits to purchase or sell the asset.
entity pays fixed contributions into a separate
entity and will have no legal or constructive (A) Financial Assets
obligation to pay further amounts. The Parent
The Group determines the classification of its
has set up separate recognized Provident
financial as s ets at initial rec ognition. The
Fund trusts for all the units of the Group.
classification depends on the Group’s business
Contributions paid / payable for Provident model for managing the financial assets and the
Fund of eligible employees and National contractual terms of the cash flows.
Pension Sc heme is recognized in the
The financial assets are classified in the following
statement of Profit and Loss each year. The
measurement categories:
Parent has an obligation to make good the
shortfall, if any, between the return from the a) Those to be measured subsequently at fair
investments of the trusts and the interest value (either through other comprehensive
rate notified by Government. income, or through profit or loss), and
(b) Defined benefit plans b) Those to be measured at amortised cost.
A defined benefit plan is a post-employment For assets measured at fair value, gains and losses
benefit plan other than a defined contribution will either be recorded in profit or loss or other
plan. The Parent’s net obligation in respect comprehensive income. For investments in debt
of defined benefit plans is calculated instruments, this will depend on the business model
separately for each plan by estimating the in which the investment is held. For investments in
amount of future benefit that employees have equity instruments, this will depend on whether the
earned in the current and prior periods, Group has made an irrevocable election at the time
discounting that amount and deducting the of initial recognition to account for the equity
fair value of any plan assets. inv es tment at fair value through other
Post employment defined benefits plans comprehensive income.
comprise of gratuity, superannuation and At initial recognition, the Group measures a financial
Post Retirement Medical Benefit for eligible asset at its fair value plus, in the case of a financial
employees of the Group. Post employment ass et not at fair value through profit or loss,
benefits are recognized as an expense in transaction costs that are directly attributable to
the statement of profit and loss for the year the acquisition of the financial asset. Transaction
in whic h the employ ee has rendered costs of financial assets carried at fair value
services. The Group also contributes to a through profit or loss are expensed in profit or loss
government administered Family Pension as incurred.

160 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

Subsequent measurement of debt instruments (iii) Financial assets at fair value through
depends on the Group’s bus iness model for profit or loss
managing the as s et and the c as h flow
The Group classifies the following financial
characteristics of the asset. There are three
assets at fair value through profit or loss:
measurement categories into which the Group
classifies its debt instruments. a) Debt investments that do not qualify
for measurement at amortised cost;
(i) Amortised Cost
b) Debt investments that do not qualify
The Group classifies its financial assets as
for measurement at fair value through
at amortised cost only if both of the following
other comprehensive income; and
criteria are met:
c) Debt inv es tments that hav e been
a) The asset is held within a business
designated at fair value through profit
model with the objective of collecting
or loss.
the contractual cash flows, and
Financial assets at fair value through profit
b) The contractual terms give rise on or loss include financial assets held for
specified dates to cash flows that are trading, debt securities and financial assets
s olely pay ments of princ ipal and designated upon initial recognition at fair
interest on the principal outstanding. value through profit or loss. Financial assets
Financial assets at amortised cost include at fair value through profit or loss are carried
loans receivable, trade and other in the Balance Sheet at fair value with net
receivables, and other financial assets that changes in fair value presented as finance
are held with the objective of collecting c os ts in profit or loss if the same is
c ontrac tual c as h flows . After initial considered as an adjustment to borrowing
measurement at fair value, the financial cost. Interests, dividends and gain/loss on
assets are measured at amortised cost using foreign exchange on financial assets at fair
the effective interest rate (EIR) method, less value through profit or loss are included
impairment. separately in other income.

Amortised cost is calculated by taking into If Group elects to present fair value gains
acc ount any dis count or premium on and losses on equity investments in other
acquisition and fees or costs that are an c omprehens ive inc ome, there is no
integral part of the EIR. The EIR amortisation subsequent reclassification of fair value gains
is included in finance income in the statement and losses to profit or loss. Dividends from
s uc h inv es tments shall c ontinue to be
of profit or loss. The losses arising from
recognised in profit or loss as other income
impairment are recognised in the Statement
when the Group’s’ right to receive payments
of Profit or Loss in other income.
is established. There are no impairment
The Group classifies its financial assets as requirements for equity inv es tments
(ii) Fair value through other comprehensive measured at fair v alue through other
comprehensive income. Changes in the fair
income
value of financial assets at fair value through
Financial assets that are held for collection profit or loss shall be recognised in other
of contractual cash flows and for selling the gain / (losses) in the statement of profit or
financial assets, where the assets’ cash loss as applicable.
flows represent solely payments of principal
Derecognition of financial assets
and interest, are measured at fair value
through other c omprehensive income. The Group derecognises a financial asset
Movements in the carrying amount are taken when the contractual rights to the cash flows
through other c omprehensive income, from the assets expire, or when it transfers
except for the recognition of impairment gains the financial asset and substantially all the
or losses, interest revenue and foreign risks and rewards of ownership of the asset
exc hange gains and los s es whic h are to another party. If the Group neither transfers
rec ognis ed in profit or loss . When the nor retains substantially all the risks and
financ ial ass et is derecognised, the rewards of ownership and continues to control
c umulative gain or los s previously the transferred asset, the Group recognises
recognised in other comprehensive income its retained interest in the as set and
is reclassified from equity to profit or loss associated liability for amounts it may have
and recognis ed in other gains/(los ses ). to pay. If the Group retains substantially all
Interest income from these financial assets the risks and rewards of ownership of the
is included in other income using the effective trans ferred financial as set, the Group
interest rate method. continues to recognise the financial asset

58TH ANNUAL REPORT 2019-20 161

 Notes to the Consolidated Financial Statements

and als o rec ognis es a c ollateralised The Group uses historical loss experience
borrowing for the proceeds received. and derived loss rates based on the past
Impairment of Financial Assets twelve months and adjust the historical loss
rates to reflect the information about current
The Group applies expected credit loss conditions and reasonable and supportable
(ECL) model for meas urement and forecasts of future economic conditions. The
recognition of impairment loss on the following loss rates differ based on the ageing of the
financial assets and credit risk exposure: amounts that are past due and are generally
a) Financ ial as s ets that are debt higher for those with the higher ageing.
ins truments and are meas ured at Interest income
amortised cost e.g., loans, deposits,
trade receivables and bank balance. For all financial instruments measured at
amortised cost and interest bearing financial
b) Trade receivables or any contractual assets, interest income is recognised using
right to receive cash or other financial the effective interest rate (EIR), which is the
asset that result from transactions that rate that discounts the estimated future cash
are within the scope of Ind AS 18. receipts through the expected life of the
An expected credit loss is the probability- financial instrument or a shorter period,
weighted es timate of credit loss es (i.e. where appropriate, to the net c arry ing
present value of all cash shortfalls) over the amount of the financial asset.
expected life of the financial asset. A cash When a loan and receivable is impaired, the
shortfall is the difference between the cash Group reduces the carrying amount to its
flows that are due in accordance with the recoverable amount, being the estimated
contract and the cash flows that the group future cash flow discounted at the original
expects to receive. The expected credit EIR of the instrument, and c ontinues
losses consider the amount and timing of unwinding the discount as interest income.
payments and hence, a credit loss arises
Interest income on impaired financial asset
even if the Group expects to receive the
is recognised using the original EIR.
pay ment in full but later than when
contractually due. The expected credit loss Dividends
method requires to assess credit risk, default Dividends are recognised as revenue when
and timing of collection since initial recognition. the right to receive payment is established.
This requires recognising allowance for
expected credit losses in profit or loss even Cash and cash equivalents
for receivables that are newly originated or Cash and cash equivalents comprise cash
acquired. on hand and call deposits, and other short-
Impairment of financial assets is measured term highly liquid investments that are readily
as either 12 month expected credit losses convertible to a known amount of cash and
or life time expected credit losses, depending are subject to an insignificant risk of changes
on whether there has been a significant in value.
increase in credit risk since initial recognition. (B) Financial Liabilities
‘12 month expected credit losses’ represent
the expected credit losses resulting from The Group determines the classification of its
default events that are possible within 12 financial liabilities at initial recognition.
months after the reporting date. ‘Lifetime Classification
expec ted c redit los s es ’ represent the
expected credit losses that result from all The Group classifies all financial liabilities as
possible default events over the expected subsequently measured at amortised cost, except
life of the financial asset. for financial liabilities at fair value through profit or
loss. Such liabilities, including derivatives that are
Trade receivables are of a short duration, liabilities, shall be subsequently measured at fair
normally less than 12 months and hence the value.
los s allowanc e measured as lifetime
expected credit losses does not differ from Initial recognition and measurement
that measured as 12 month expected credit Financ ial liabilities are c las sified, at initial
los ses . The Group us es the prac tical recognition, as financial liabilities at fair value through
ex pedient in Ind AS 109 for measuring profit or loss. Loans and borrowings, payables are
expected credit losses for trade receivables subsequently measured at amortised cost where
using a provision matrix based on ageing of as derivatives are measured at fair value through
receivables. profit and loss.

162 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

All financial liabilities are recognised initially at fair enforceable right must not be contingent on future
value and, in the case of loans and borrowings and events and must be enforceable in the normal
payables, net of directly attributable transaction course of business and in the event of default,
costs. insolvency or bankruptcy of the Group or the
counter party.
The Group’s financial liabilities include trade and
other payables, loans and borrowings including (D) Derivative financial instruments
bank overdrafts, financial guarantee contracts and
The Group’s activities expose it to the financial
derivative financial instruments.
risks of changes in foreign exchange rates and
Financial liabilities at fair value through profit interest rates. The use of financial derivatives is
and loss governed by the Group’s policies approved by the
Board of Directors, which provide written principles
Financial liabilities at fair value through profit and
on the use of financial derivatives consistent with
loss include financial liabilities to hedge risks which
the Group’s risk management strategy. Changes
are not designated as hedges. At initial recognition,
in values of all derivatives of a financing nature are
the Group measures financial liabilities at its fair
included within financing costs if the same is
value. Financial liabilities at fair value through profit
considered as adjustment to borrowing cost in the
and loss are carried in the Balance Sheet at fair
Statement of Profit and Loss whereas other foreign
value with changes recognised in the Statement of
exchange fluctuation is disclosed under other
Profit and Loss.
expenses. The Group does not use derivative
Financial liabilities measured at amortised cost financial instruments for speculative purposes.
Financial liabilities are initially recognised at fair Deriv ative financ ial ins truments are initially
value, net of transaction cost incurred and are measured at fair value on the contract date and
subsequently measured at amortised cost, using are subsequently remeasured to fair value at each
the EIR method. Any difference between the reporting date.
proceeds net of transaction costs and the amount
(E) Equity investments
due on settlement or redemption of borrowings is
recognised over the term of the borrowing. All equity investments in scope of Ind AS 109 are
measured at fair value. For equity instruments, the
The effective interest method is a method of
Group may make an irrevocable election to present
calculating the amortised cost of a debt instrument
in other c omprehensive income subs equent
and of allocating interest charge over the relevant
changes in the fair value. The classification is made
effective interest rate period. The effective interest
on initial recognition and is irrevocable.
rate is the rate that exactly discounts estimated
future cash outflow (including all fees and points If the Group decides to classify an equity instrument
paid or received that form an integral part of the as at FVTOCI, then all fair value changes on the
effective interest rate, transaction costs and other instrument, excluding dividends, are recognized in
premiums or discounts) through the expected life the OCI. There is no recycling of the amounts from
of the debt instrument, or, where appropriate, a OCI to P&L, even on sale of investment. However,
shorter period, to the net carrying amount on initial the group may transfer the cumulative gain or loss
recognition. within equity.
Derecognition of financial liabilities Equity instruments included within the FVTPL
category are measured at fair value with all changes
A financial liability is derec ognised when the
recognized in the P&L.
obligation under the liability is disc harged or
cancelled or expires. When an existing financial 3.11 Foreign currencies
liability is replaced by another from the same lender
(a) Functional and presentation currency
on substantially different terms, or the terms of an
existing liability are substantially modified, such an The c ons olidated financial statements are
exc hange or modification is treated as a presented in Indian Rupees, which is the Group’s
derecognition of the original liability and the functional and presentation currency. Each entity
recognition of a new liability, and the difference in in the Group determines its own functional currency
the respective carrying amounts is recognised in (the currency of the primary economic environment
the Statement of Profit and Loss. in which the entity operates) and items included in
the financ ial s tatements of each entity are
(C) Offsetting financial instruments
measured using that functional currency.
Financial assets and liabilities are offset and the
(b) Transactions and balances
net amount reported in the Consolidated Balance
Sheet when there is a legally enforceable right to Transactions in foreign currencies are initially
offset the recognised amounts and there is an recorded at the exchange rate prevailing at the
intention to settle on a net basis or realise the asset date of the transaction. Monetary assets and
and settle the liability simultaneously. The legally liabilities denominated in foreign currencies are

58TH ANNUAL REPORT 2019-20 163

 Notes to the Consolidated Financial Statements

retranslated into the respective functional currency embodying economic benefits will be required to settle
of the entity at the rates prevailing on the reporting the obligation and a reliable estimate can be made of the
date. amount of the obligation. When the Group expects some
or all of a provision to be reimbursed, for example, under
Foreign exchange gains and losses resulting from
an insurance contract, the reimbursement is recognised
the settlement of such transactions and from the
as a separate asset, but only when the reimbursement is
translation at reporting date exchange rates of
virtually certain. The expense relating to a provision is
monetary assets and liabilities denominated in presented in the statement of profit and loss net of any
foreign currencies are recognised in the Statement reimbursement.
of Profit and Loss.
If the effect of the time value of money is material,
Foreign exchange gains and losses that relate to provisions are discounted using a current pre-tax rate
borrowings and cash and cash equivalents are that reflects, when appropriate, the risks specific to the
presented in the Statement of Profit and Loss within liability. When discounting is used, the increase in the
‘Finance costs’. All other foreign exchange gains provision due to the passage of time is recognised as a
and losses are presented in the Statement of Profit finance cost.
and Loss within ‘Other operating expenses’.
Contingent liability is disclosed in the case of:
3.12 Cash and cash equivalents
A present obligation arising from the past events, when it
Cash and cash equivalent in the balance sheet comprise is not probable that an outflow of resources will be required
cash at banks and on hand and short-term deposits with to settle the obligation;
an original maturity of three months or less, which are
A present obligation arising from the past events, when
subject to an insignificant risk of changes in value. For
no reliable estimate is possible;
the purpose of the statement of cash flows, cash and
cash equivalents consist of cash and short-term deposits, A possible obligation arising from the past events, unless
as defined above. the probability of outflow of resources is remote.

3.13 Segment accounting: Commitments include the amount of purchase order (net
of advances) issued to parties for completion of assets.
The Chief Operational Decision Maker monitors the
operating results of its business Segments separately Provisions, contingent liabilities, contingent assets and
for the purpose of making decisions about resource commitments are reviewed at each balance sheet date.
alloc ation and performanc e as sess ment. Segment 3.15 Earnings per share
performance is evaluated based on profit or loss and is
Basic earnings per share are calculated by dividing the
measured consistently with profit or loss in the financial
net profit for the period attributable to equity shareholders
statements. (Net of Non-Controlling Interest) by the weighted average
The Operating segments have been identified on the basis number of equity shares outstanding during the period.
of the nature of products/services. Earnings considered in ascertaining the Group’s earnings
per share is the net profit for the period after deducting
The accounting policies adopted for segment reporting
preference dividends and any attributable tax thereto for
are in line with the accounting policies of the Group.
the period. The weighted average number of equity shares
Segment revenue, segment expenses, segment assets
outstanding during the period and for all periods presented
and segment liabilities have been identified to segments
is adjusted for events, such as bonus shares, other than
on the basis of their relationship to the operating activities the conversion of potential equity shares that have
of the segment. Inter Segment revenue is accounted on changed the number of equity shares outstanding, without
the basis of transactions which are primarily determined a corresponding change in resources.
based on market/fair value factors. Revenue, expenses,
assets and liabilities which relate to the Group as a whole For the purpose of calculating diluted earnings per share,
and are not allocated to segments on a reasonable basis the profit or loss for the period attributable to equity
hav e been inc luded under “unallocated rev enue / shareholders and the weighted average number of shares
expenses / assets / liabilities”. outstanding during the period is adjusted for the effects of
all dilutive potential equity shares.
The Group has identified two reportable bus ines s
segments i.e. Fertilizer products and Industrial products. 3.16 Cash flow statement
The Group operates mainly in Indian market and there Cash flow are reported using the indirect method, whereby
are no reportable geographical segments. net profit before tax is adjusted for the effec ts of
3.14 Provisions, Contingent liabilities, Contingent assets transactions of a non-cash nature, any deferrals of
and Commitments: General accruals of past or future operating cash receipts or
payments and item of income or expenses associated
Provisions are recognised when the Group has a present with investing or financing cash flows. The cash flows
obligation (legal or constructive) as a result of a past from operating, investing and finance activities of the
event, it is probable that an outflow of resources Group are segregated.

164 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

4. Critical and significant accounting judgements, of an independent valuer has estimated the fair value at
estimates and assumptions each reporting period based on available historical annual
reports and other information in the public domain. In
4.1 Critical estimates and judgements
case of other companies, where there are no comparable
The following are the critical judgements, apart from those companies’ valuations available (also includes start-up
involving estimations that the management have made in companies) and no further information available for future
the process of applying the Group’s accounting policies projec tions, c apacity utilisation, c ommencement of
and that have the most significant effect on the amounts operations, etc., the method of valuation followed is cost
recognized in the financial statements. Actual results may approach. The Group evaluates the aforesaid position at
differ from these estimates .  These estimates and each period end.  
underlying assumptions are reviewed on an ongoing
Income taxes:
basis. Revisions to the accounting estimates in the period
in which the estimate is revised if the revision affects only Significant judgements are involved in determining the
that period, or in the period of the revision and future provision for income taxes, including amount expected to
periods if the revision affects both current and future be paid/recovered for uncertain tax positions.
periods. 4.2. Significant accounting judgements, estimates and
Useful lives of property, plant and equipment and assumptions
intangible assets: The preparation of the Group’s financial statements
Management reviews the useful lives of depreciable requires management to make judgements, estimates
ass ets at eac h reporting. As at Marc h 31, 2020 and assumptions that affect the reported amounts of
management assessed that the useful lives represent revenues, expenses, assets and liabilities, and the
the expected utility of the assets to the Group. Further, acc ompanying disc los ures , and the dis clos ure of
there is no significant change in the useful lives as contingent liabilities. Uncertainty about these assumptions
compared to previous year. and estimates could result in outcomes that require a
material adjustment to the carrying amount of assets or
Allowance for expected credit losses: liabilities affected in future periods.
Note 41 describes the use of practical expedient by Judgements
computing the expected credit loss allowance for trade
receivables other than subsidy receivables based on In the process of applying the group’s accounting policies,
provision matrix. The expected credit allowance is based management has made the following judgements, which
on the aging of the days receivables are due and the have the most significant effect on the amounts recognised
rates derived based on past history of defaults in the in the standalone financial statements:
provision matrix.  As regards subsidy receivables, the Determination of lease term & discount rate:
Group does not believe that there is any credit risk as
Ind AS 116 leases requires lessee to determine the lease
dues are receivable from the Government and hence no
term as the non-cancellable period of a lease adjusted
allowance for expected credit loss is made.   
with any option to extend or terminate the lease, if the use
Dismantling cost of property, plant and equipment: of such option is reasonably certain. The Group makes
Note 22 describes assets retirement obligation on estimate assessment on the expected lease term on lease by
basis for property, plant and equipment. The management lease basis and thereby as s es ses whether it is
estimates dismantling cost considering size of the asset reasonably certain that any options to extend or terminate
and its useful life in line with industry practices. the contract will be exercised. In evaluating the lease
term, the Group considers factor such as any significant
Stores and spares inventories: leasehold improvements undertaken over the lease term,
The Group’s manufacturing process is continuous and c os ts relating to the termination of lease and the
highly mechanical with wide range of different types of importance of the underlying to the Group’s operations
plant and machineries. The Group keeps stores and taking into account the location of the underlying asset
spares as standby to continue the operations without and availability of the suitable alternatives. The lease term
any disruption. Considering wide range of stores and in future period is reassessed to ensure that the lease
spares and long lead time for procurement of it and based term reflects the current economic circumstances.
on criticality of spares, the Group believes that net The discount rate is generally based on the incremental
realizable value would be more than cost. borrowing rate specific to the lease being evaluated or for
Fair value of investments: a portfolio of leases with similar characteristics.
Estimates and assumptions
The Group has invested in the equity instruments of
v arious companies . However, the percentage of The key assumptions concerning the future and other
shareholding of the Group in some of such investee key sources of estimation uncertainty at the reporting
companies is low and hence, it has not been provided date, that have a significant risk of causing a material
with future projections including projected profit and loss adjus tment to the carrying amounts of ass ets and
ac count by those inv estee c ompanies. Hence, the liabilities within the next financial year, are described below.
valuation exercise carried out by the Group with the help The group based on its assumptions and estimates on

58TH ANNUAL REPORT 2019-20 165

 Notes to the Consolidated Financial Statements

parameters available when the financial statements were Defined benefit plans
prepared. Existing circumstances and assumptions about The cost of the defined benefit plans v iz. gratuity,
future developments, however, may change due to market superannuation for the eligible employees of the group
changes or circumstances arising that are beyond the are determined using actuarial valuations. An actuarial
control of the Group. Such changes are reflected in the valuation involves making various assumptions that may
assumptions when they occur. differ from actual developments in the future. These
include the determination of the discount rate, future salary
Impairment of non-financial assets
increases and mortality rates. Due to the complexities
Impairment exists when the carrying value of an asset or involved in the valuation and its long-term nature, a defined
cash generating unit exceeds its recoverable amount, benefit obligation is highly sensitive to changes in these
which is the higher of its fair value less costs of disposal assumptions. All assumptions are reviewed at each
and its value in use. The fair value less costs of disposal reporting date.
calculation is based on available data from binding sales The parameter most subject to change is the discount
transactions, conducted at arm’s length, for similar assets rate. In determining the appropriate discount rate for plans
or observable market prices less incremental costs for operated in India, the management considers the interest
disposing of the asset. The value in use calculation is rates of government bonds in currencies consistent with
based on a Discounted Cash Flow model. The cash flows the currencies of the post-employment benefit obligation.
are derived from the budget for the next five years and do The mortality rate is based on publicly available mortality
not include activities that the group is not yet committed tables. Those mortality tables tend to change only at
to or significant future investments that will enhance the interval in response to demographic changes. Future
asset’s performance of the Cash Generating Unit being salary increases and gratuity increases are based on
tested. The recoverable amount is sensitive to the expected future inflation rate.
discount rate used for the Discounted Cash Flow model Further details about gratuity obligations are given in Note
as well as the expected future cash-inflows and the growth 37.
rate used for extrapolation purposes.
Provision and contingent liability
Taxes
On an ongoing basis, Group reviews pending cases,
Deferred tax assets are recognised for unused tax losses claims by third parties and other contingencies. For
to the extent that it is probable that taxable profit will be contingent losses that are considered probable, an
available against which the losses can be utilised. estimated loss is recorded as an accrual in financial
Signific ant management judgement is required to statements. Loss Contingencies that are considered
determine the amount of deferred tax assets that can be possible are not provided for but disclosed as Contingent
recognised, based upon the likely timing and the level of liabilities in the financial statements. Contingencies the
future taxable profits together with future tax planning likelihood of which is remote are not disclosed in the
strategies. financ ial s tatements . Gain c ontingenc ies are not
recognized until the contingency has been resolved and
amounts are received or receivable.

166 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

Note - 5 (i) Property, Plant and Equipment (` in lakhs)

GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK
PARTICULARS As at Additions Deductions/ As at As at Charge for Deductions/ As at Balance Balance
01-Apr-19 Adjustments 31-Mar-20 01-Apr-19 the year Adjustments 31-Mar-20 As at As at
31-Mar-20 31-Mar-19
Freehold land 551.47 2,691.42 - 3,242.89 - - - - 3,242.89 551.47
Leasehold land 705.30 935.26 - 1,640.56 25.60 34.23 - 59.83 1,580.73 679.70
Buildings 19,110.82 1223.28 - 20,334.10 2,191.83 693.51 - 2,885.34 17,448.76 16,918.99
Bridge, culverts,bunders,etc. 0.18 - - 0.18 0.08 0.01 - 0.09 0.09 0.10
Roads 409.28 6.17 - 415.45 44.80 30.78 - 75.58 339.87 364.48
Plant and machinery 2,80,157.56 18043.33 2971.17 2,95,229.72 37,438.42 13713.92 2519.22 48,633.12 2,46,596.60 2,42,719.14
Furniture and fittings 7,184.16 56.83 8.41 7,232.58 283.61 691.44 7.99 967.06 6,265.52 6,900.55
Motor Vehicles 306.39 10.83 21.31 295.91 141.08 26.09 13.16 154.01 141.90 165.31
Railway sidings 2,122.13 86.01 - 2,208.14 444.91 117.51 - 562.42 1,645.72 1,677.22
Office equipment 850.60 69.10 18.10 901.60 430.10 122.41 17.12 535.39 366.21 420.50
Computers and Data Processing units 585.38 117.43 73.82 628.99 207.87 114.67 70.13 252.41 376.58 377.51
Laboratory equipment 1,549.66 54.65 12.75 1,591.56 229.65 157.88 11.78 375.75 1,215.81 1,320.01
Electrical Installation and Equipment 11,090.85 1980.56 - 13,071.41 1,425.80 1072.93 - 2,498.73 10,572.68 9,665.05
Library books 16.96 - - 16.96 7.67 1.51 - 9.18 7.78 9.29
TOTAL 3,24,640.74 25,274.87 3,105.56 3,46,810.05 42,871.42 16,776.89 2,639.40 57,008.91 2,89,801.14 2,81,769.32
Capital work in progress 10,705.50 18,722.78

GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK

PARTICULARS As at Additions Deductions/ As at As at Charge for Deductions/ As at Balance Balance
01-Apr-18 Adjustments 31-Mar-19 01-Apr-18 the year Adjustments 31-Mar-19 As at As at
31-Mar-19 31-Mar-18
Freehold land 551.47 - - 551.47 - - - - 551.47 551.47
Leasehold land 705.30 - - 705.30 19.19 6.41 - 25.60 679.70 686.11
Buildings 17,929.81 1186.34 5.33 19,110.82 1,531.79 663.05 3.01 2,191.83 16,918.99 16,398.02
Bridge, culverts,bunders,etc. 0.18 - - 0.18 0.06 0.02 - 0.08 0.10 0.12
Roads 138.48 270.80 - 409.28 37.99 6.81 - 44.80 364.48 100.49
Plant and machinery 2,10,634.85 69627.56 104.85 2,80,157.56 26,967.90 10567.79 97.27 37,438.42 2,42,719.14 1,83,666.95
Furniture and fittings 605.00 6594.07 14.91 7,184.16 159.66 138.12 14.17 283.61 6,900.55 445.34
Motor Vehicles 230.27 93.60 17.48 306.39 122.63 35.06 16.61 141.08 165.31 107.64
Railway sidings 2,122.13 - - 2,122.13 328.75 116.16 - 444.91 1,677.22 1,793.38
Office equipment 692.95 163.56 5.91 850.60 301.45 134.52 5.87 430.10 420.50 391.50
Computers and Data Processing units 346.89 278.10 39.61 585.38 128.06 117.13 37.32 207.87 377.51 218.83
Laboratory equipment 598.92 970.15 19.41 1,549.66 170.27 75.25 15.87 229.65 1,320.01 428.65
Electrical Installation and Equipment 6,384.63 4706.22 - 11,090.85 782.35 643.45 - 1,425.80 9,665.05 5,602.28
Library books 16.96 - - 16.96 6.10 1.57 - 7.67 9.29 10.86
TOTAL 2,40,957.84 83,890.40 207.50 3,24,640.74 30,556.20 12,505.34 190.12 42,871.42 2,81,769.32 2,10,401.64
Capital work in progress 18,722.78 76,308.19

5. (ii) Right of Use Assets (` in lakhs)

GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK
PARTICULARS As at Additions Deductions/ As at As at Charge for Deductions/ As at Balance Balance
01-Apr-19 Adjustments 31-Mar-20 01-Apr-19 the year Adjustments 31-Mar-20 As at As at
31-Mar-20 31-Mar-19
Leasehold Building - 375.62 2.37 373.25 - 143.60 0.81 142.79 230.46 -
TOTAL - 375.62 2.37 373.25 - 143.60 0.81 142.79 230.46 -

58TH ANNUAL REPORT 2019-20 167

 Notes to the Consolidated Financial Statements

Details for Right of Use Assets (` in lakhs)

Gross Block (At Cost)
As at 01-04-2019 -
Additions (Transitional impact on adoption of Ind AS 116) 361.83
Additions during the period 13.79
Disposals 2.37
As at 31-03-2020 373.25
Accumulated Depreciation
As at 01-04-2019 -
Charge for the period 143.60
Disposals 0.81
As at 31-03-2020 142.79
Net Block as at 31-03-2020 230.46

Notes
1 The Company has commissioned Ammonia Storage Tank Cap. 10000 MT at cost of ` 6527.23 Lakhs, PA Storage Tank Cap. 10000 MT ` 856.47 Lakhs and 10
MW Solar power Plant of ` 4991.67 Lakhs during FY 2019-20.The company has also acquired freehold land at Motikhavdi, Jamnagar for ` 2691.42 Lakhs
during FY 2019-20.
2 Asset acquisition includes R&D assets of ` 28.66 lakhs (previous year ` 20.83 lakhs).
3 The Company has acquired land through Government and also through direct negotiations. The entire land is in possession of the Company. In respect of other
portion of land acquired through direct negotiations, compensation has been paid at the negotiated price. The Company also holds possession of a portion of land
for which no amount has been paid in absence of receipt of awards.
4 The Company has leased a portion of its land to Bank of Baroda for bank premises at Fertilizernagar and Sikka and Gas Authority of India Ltd. (GAIL) for
establishment of CNG pumping station.
5 Buildings include ` 0.02 lakh being the value of shares in Co-operative Housing Societies.
6 The Company established Sikka Jetty at its own cost, which is in operation since 1987. After due discussion with Gujarat Maritime Board (GMB), a consensus was
arrived at establishing ownership of jetty with the Company. Thereafter, in terms of resolution passed by GMB, the ownership of the jetty at Sikka was transferred
to the Company. However, during 1994, GMB has reversed its earlier decision not supported by resolution and contended that the ownership of the jetty rests with
GMB. The Company has made representation to the appropriate authority with regards to the ownership of the jetty with the Company.
The matter of deciding the status of Jetty was under examination at GMB & Government of Gujarat levels since long back. Various meetings were also held and
after due diligence on the matter, it is decided by the Board of GMB supported by a resolution to assign the status of Captive Jetty to sikka jetty and the Company
has to sign Captive Jetty Agreement with GMB. The matter is under discussion with GMB authorities. Pending finalization of the Captive Jetty Agreement, no
provision is considered necessary in respect of various claims against the Company and counter-claims of the Company (both the amounts not determined). At
present the Company is in possession of the Jetty and continues to be the owner of the Jetty pending signing of the Agreement.

6. Intangible assets (` in lakhs)

GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK
PARTICULARS As at Additions Deductions/ As at As at Charge for Deductions/ As at Balance Balance
01-Apr-19 Adjustments 31-Mar-20 01-Apr-19 the year Adjustments 31-Mar-20 As at As at
31-Mar-20 31-Mar-19
Computer software 1,294.15 21.99 - 1,316.14 983.56 174.38 - 1,157.94 158.20 310.59
TOTAL 1,294.15 21.99 - 1,316.14 983.56 174.38 - 1,157.94 158.20 310.59

GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK

PARTICULARS As at Additions Deductions/ As at As at Charge for Deductions/ As at Balance Balance
01-Apr-18 Adjustments 31-Mar-19 01-Apr-18 the year Adjustments 31-Mar-19 As at As at
31-Mar-19 31-Mar-18
Computer software 1,258.01 36.14 - 1,294.15 863.51 120.05 - 983.56 310.59 394.50
TOTAL 1,258.01 36.14 - 1,294.15 863.51 120.05 - 983.56 310.59 394.50

168 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

7. Non-current investments (` in lakhs)

Praticulars As at As at
31-03-2020 31-03-2019
Investments in equity shares of Asso ciates measured under e quity method
14,302 shares of Vadodara Enviro Channel Ltd. - ` 10 each* - -
14,302 shares of Vadodara Enviro Channel Ltd. - ` 10 each* 166.80 175.15
12,50,000 shares of Gujarat Green Revolution Company Ltd. - ` 10 each 7,802.60 6,878.09
1,63,34,558 Shares of Karnalyte Resources Inc - Canadian Dollar (CAD) 3,100.91 3,725.89
Less : Provision for Impairment (Note g) 870.03 -
10 ,20 0. 29 10 ,77 9. 13
Unquoted equity shares of other companies measured at fair value through OCI
22,50,000 Shares of Indian Potash Limited - ` 10 each (11,25,000 Bonus shares received during the year) 12,115.35 6,242.17
12,26,31,575 Shares of Gujarat Chemical Port Terminal Co. Ltd. - ` 1 each 23,263.21 23,177.37
1 Share of Gujarat State Electricity Corporation Ltd – ` 10 each (Note - b) - -
2,35,00,000 Shares of Gujarat State Petroleum Corporation Limited – ` 1 each 2,023.35 1,882.35
41,79,848 Shares of Tunisian Indian Fertilizers (TIFERT s.a.) - ` 10 each (Note - c) - -
60,000 Shares of Gujarat Venture Finance Limited – ` 10 each 101.54 89.28
50,000 Shares of Biotech Consortium India Limited – ` 10 each 20.57 19.02
1,15,000 Shares of Gujarat Data Electronics Limited - ` 10 each - -
37 ,52 4. 02 31 ,41 0. 19
Quoted equity shares of other companies measured at fair value through OCI
3,07,79,167 Shares of Gujarat Narmada Valley Fertilizers & Chemicals Ltd. - ` 10 each 35,303.70 94,168.86
2,23,62,784 Shares of Gujarat Industries Power Company Ltd. - ` 10 each 11,159.03 15,899.94
16,55,040 Shares of Gujarat Alkalies & Chemicals Ltd. - ` 10 each 3,690.74 8,164.31
4,69,14,475 Shares of Gujarat Gas Ltd. - ` 2 each 1,08,302.07 69,480.34
9,35,600 Shares of Gujarat State Financial Corporation - ` 10 each - -
11,36,000 Shares of Bandhan Bank Limited - ` 10 each (Note - d) 2,314.60 5,516.00
5,49,440 Shares of Industrial Development Bank of India - ` 10 each 106.04 256.31
5,79,000 Shares of Mangalore Chemicals & Fertilizers Ltd. - ` 10 each 140.70 234.50
1, 61 ,0 16 .8 8 1, 93 ,7 20 .2 6
To tal FVTO CI I nves tmen ts 1, 98 ,5 40 .9 0 2, 25 ,1 30 .4 5
Ot her equi ty i nves tmen ts
Tunisian Indian Fertilizers (TIFERT) (Note - f) - 1,729.40
TOTAL I NVES TMEN TS 2, 08 ,7 41 .1 9 2, 37 ,6 38 .9 8
Aggregate book value of Quoted Investments 1,61,016.88 1,93,720.26
Aggregate market value of Quoted Investments 1,61,016.88 1,93,720.26
Aggregate carrying value of Unquoted Investments 47,724.31 43,918.72
Category-wise other investments-as per Ind AS 109 classification

Financial assets carried at fair value through profit or loss (FVTPL) - -

Financial assets carried at amortised cost 10,200.29 10,779.13
Financial assets measured at FVTOCI 1,98,540.90 2,26,859.85
TOTAL I NVES TMEN TS 2, 08 ,7 41 .1 9 2, 37 ,6 38 .9 8
Investment in Associates is accounted under equity method as under:

(i ) Vadodara Enviro Channel Limited

Opening Carrying value of Investment 175.15 278.43
Share in Profit for the year (8.35) (103.28)
Carrying value of investments at the year end 16 6. 80 17 5. 15

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 Notes to the Consolidated Financial Statements

P ar ti c ul ar s As at As at
31-03-2020 31-03-2019
( ii ) Gujarat Green Revolution Company Limited
Opening Carrying value of Investment 6,878.09 6,019.86
Share in Profit for the year 927.28 855.98
Add: Share in Other Comprehensive Income for the year (2.77) 2.25
Carrying value of investments at the year end 7 ,8 02 .6 0 6 ,8 78 .0 9
(i ii ) Ka rnal yte Res ourc es I nc
Opening Carrying value of Investment 3,725.88 2,520.04
Carrying Value for further acquisition - 1,956.34
Impairment Provision recognised (870.03) -
Share in Profit for the year (624.97) (750.50)
Carrying value of investments at the year end 2 ,2 30 .8 8 3 ,7 25 .8 8

Notes:
* Less than a Thousand
a) There is no change in the number of shares compare to previous year, except where specifically mentioned above under each case.
b) As per Notification of Govt of Gujarat, Bhavnagar Energy Company Ltd.(BECL) is Merged with Gujarat State Electricity Corpo. Ltd.(GSECL) As
per the Merger scheme, the company has received 1 No of share of GSECL in exchange of 7,12,20,000 No of shares of BECL. The Fair Value
of said investment is ` Nil as on 31st March 2020 & 31st March 2019.
c) The equity shares held by the Company in Tunisian Indian Fertilizers S.A., Tunisia (TIFERT) have been pledged to secure the obligations of
TIFERT to their lenders.
d) Pursuant to the scheme of Amalgamation, GRUH Finance Ltd got amalgamated with Bandhan Bank Ltd in FY 19-20. As per the share swap ratio
given in the scheme documents, 568 Share of Bandhan Bank Ltd has been allotted against 1,000 shares of Gruh Finance Ltd. Hence company
has received 11,36,000 shares of Bandhan Bank Ltd., in swap of 20,00,000 shares in Gruh Finance Ltd.
e) Investments at fair value through OCI (fully paid) reflect investment in quoted and unquoted equity securities. Refer note 41 for determination
of their fair values.
f) The company has provided a loan of USD 2.50 Mn to TIFERT for procurement of critical spares and equipments. Loan has been provided with
a condition of compulsory conversion in equity shares of TIFERT after 3 years from the date of agreement and it carries an interest of daily
average LIBOR plus a margin of 225 basis points. Principal amount of the loan along with unpaid interest will be converted into equity shares of
TIFERT at face value after 3 years of agreement, accordingly the same has been classified as Investment, as in substance the nature is of the
investment.
g) Impairment Loss of ` 870.03 Lakhs was recognised in the carrying value of investment in Karnalyte Resources Ltd. during FY 2019-20 under
the head “Other Expenses” in Profit and Loss Account, taking into consideration consistent operating losses booked by the company and its low
market capitalisation. As share valuation has been carried out considering the Replacement cost method, Investment is categorised at Level 3
of the fair value hierarchy.

8. Other non-current financial assets (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Unsecured, considered good
Other deposits* 3,007.28 4,419.15
Unsecured, considered doubtful
Deposits with companies & others 102.70 102.70
Less: Allowance for doubtful deposits (102.70) (102.70)
TOTAL 3,007.28 4,419.15
*Deposit of ` 2048.58 lakhs (Previous Year ` 1713.03 Lakhs) paid under protest against which legal cases are going
on with various Govt authorities.

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9. Other non current assets (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Capital Advances* 31,242.46 32,152.02
Prepaid Expenses 5.70 6.03
Prepayment for Leasehold Land 883.06 957.44
Others 156.23 204.84
TOTAL 32,287.45 33,320.33
*Capital advance as on 31st March,2020 includes ` 28,576.38 lakhs (` 28,857.98 lakhs as at 31st March, 2019)
advance for leasehold land pending execution of lease deed towards plot in Dahej.
10. Inventories (` in lakhs)
Particulars As at 31st As at 31st
March, 2020 March, 2019
Raw materials 25,115.54 24,933.04
Raw materials in Transit 4,783.75 10,308.56
Work-in-Process 2,014.81 1,559.13
Finished goods 59,041.07 63,430.86
Stock in trade 26,919.61 44,538.94
Stock in trade-in Transit - 65.16
Stores and spares (including packing material) 19,468.37 20,688.61
Loose tools 25.60 -
TOTAL 1,37,368.75 1,65,524.30

11. Trade receivables (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Secured, considered good 1,167.33 1,052.65
Unsecured, considered good 83,810.03 80,109.30
Unsecured, credit impaired 7,413.31 6,942.39
TOTAL 92,390.67 88,104.34
Less: Allowance for doubtful debts (including ECL) 7,413.31 6,942.39
TOTAL 84,977.36 81,161.95
The average credit period on sale of goods is 30 to 90 days. No interest is charged on trade receivables up to the expiry
of the credit period. Thereafter, interest is charged at 15% per annum on the outstanding balance.The company has
one customer i.e. Gujarat Fertilizers Dealers Association which represents more than 5% of the total balance of trade
receivables.
The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables
based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for
forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are
due and the rates as given in the provision matrix. Refer note 41 for the provision matrix at the end of the reporting
period, ageing of receivable and movement in the expected credit loss allowance.
The concentration of credit risk is limited due to the fact that the customer base is large and unrelated. Refer note 41 for
the credit risk management by the Company.
The above balances include trade receivables from related parties ` 2913.04 Lakhs (` 200.21 Lakhs as on 31 March
2019) Refer note 39.

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 Notes to the Consolidated Financial Statements

12. Government subsidies receivable (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Subsidy from Government of India under New Urea Policy/Nutrient Based
Subsidy Scheme
Subsidy Receivable from Government 1,79,577.30 1,66,757.80
Less: Allowance for doubtful debts 458.29 966.38
TOTAL 1,79,119.01 1,65,791.42

13. Cash and cash equivalents (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Cash and cash equivalents
Cash on hand 89.20 34.06
Balances with banks
In current accounts 3,315.27 4,048.14
3,404.47 4,082.20

14. Other bank balances (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
In Unclaimed dividend account-restricted 544.82 544.35
In Fractional bonus account-restricted - 10.58
In Deposit accounts (original maturity more than three months) 816.61 2,199.32
TOTAL 1,361.43 2,754.25
If the dividend has not been claimed within 30 days from the date of its declaration, the Company is required to transfer the total amount of the dividend
which remains unpaid or unclaimed, to a special account to be opened by the Company in a scheduled bank to be called “Unpaid Dividend Account”.
The unclaimed dividend lying in such account is required to be transferred to the Investor Education and Protection Fund (IEPF), administered by the
Central Government after a period of seven years from the date of declaration. Company has transferred Unclaimed Dividend upto FY 2011 – 2012
to IEPF upto March 31, 2020.
15. Loans (` in lakhs)
Particulars As at 31st As at 31st
March, 2020 March, 2019
Secured, considered good
Loans to employees* 18,254.54 16,462.35
Unsecured, considered good
Advances to employees 58.83 65.59
Other loans to employees 836.57 873.53
Interest accrued 17.02 42.50
Others 62.84 19.67
19,229.80 17,463.64
Notes:
* The loans are secured by mortgage of the underlying assets and are repayable on demand.
Loans and receivables are non-derivative financial assets which generate a fixed or variable interest income for the
Company. The carrying value may be affected by changes in the credit risk of the counter parties. These financial
assets are carried at amortised cost.

172 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

16. Other current financial assets (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Financial assets at fair value through profit & loss
Derivatives not designated in hedging relationship
Foreign exchange derivative contracts - 9.40
Financial assets at amortised cost
Others 964.21 470.32
TOTAL 964.21 479.72

17.    Other Current Assets (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Unsecured, considered good
Balances with govt. agencies 10,449.51 12,280.54
Advances to suppliers* 8,875.53 9,242.06
Prepaid expenses 139.81 438.45
Prepayment for Lease hold lands 355.98 355.97
TOTAL 19,820.83 22,317.02
* includes advances to related parties ` 7242.80 lakhs (` 7027.18 lakhs as at 31st March,2019).

18. Assets held for sale (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Assets classified as held for sale* 703.98 703.98
TOTAL 703.98 703.98
* Expected net realizable value is higher than carrying amount.
- The Company decided to sell plant and machinery amounting to ` 300.26 Lakhs which is of obsolete technology. The
Company expects to sell the same in near future. There is no cost to sell the asset and hence the same is not presented
seperately under liabilities.
- The company acquired possession of Residential Property located at New Delhi against outstanding receivables,
value of which amounts to ` 403.72 Lakhs.

58TH ANNUAL REPORT 2019-20 173

 Notes to the Consolidated Financial Statements

19. Share Capital (` in lakhs)

Particulars As at 31st March 2020 As at 31st March 2019
Number Amount Number Amount
of shares of shares
Refer Note Refer Note
(a) below (a) below
Authorised
Equity Shares of ` 2/- each 1,00,00,00,000 20,000.00 1,00,00,00,000 20,000.00
Redeemable Cumulative Preference Shares of ` 100 each 1,60,00,000 16,000.00 1,60,00,000 16,000.00
36,000.00 36,000.00
Issued, Subscribed and Paid up:
Issued
Equity Shares: Face value of ` 2/- each
Shares outstanding at beginning of the year 39,91,21,850 7,982.44 39,91,21,850 7,982.44
Shares outstanding at year end 39,91,21,850 7,982.44 39,91,21,850 7,982.44
Subscribed
Equity Shares: Face value of ` 2/- each
Shares outstanding at beginning of the year 39,90,69,685 7,981.39 39,90,69,685 7,981.39
Shares outstanding at year end 39,90,69,685 7,981.39 39,90,69,685 7,981.39
Paid-up
Equity Shares: Face value of ` 2/- each
Shares outstanding at beginning of the year 39,84,77,530 7,969.55 39,84,77,530 7,969.55
Shares outstanding at year end 39,84,77,530 7,969.55 39,84,77,530 7,969.55
TOTAL 39,84,77,530 7,969.55 39,84,77,530 7,969.55

a) Reconciliation of Shares outstanding at the beginning and the end of the reporting period (` in lakhs)

Particulars As at 31st March 2020 As at 31st March 2019

Number Amount Number Amount
of shares of shares
Equity Shares
At the beginning of the year 39,84,77,530 7,969.55 39,84,77,530 7,969.55
Issued / Reduction, if any during the year - - - -
Outstanding at the end of the year 39,84,77,530 7,969.55 39,84,77,530 7,969.55
b) Rights, preferences and restrictions attached to shares
Equity shares
The Company has one class of equity shares having a par value of ` 2 each. Each shareholder is eligible for one
vote per share held. The dividend proposed by Board of Directors is subject to approval of shareholders in the
ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the
remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
c) Shareholders holding more than 5% of equity share capital
Particulars As at 31st March 2020 As at 31st March 2019
Number Percentage Number Percentage
of shares of holding of shares of holding
Gujarat State Investments Limited 15,07,99,905 37.84 15,07,99,905 37.84
Life Insurance Corporation of India 3,17,97,658 7.98 3,17,97,658 7.98
Fidelity Puritan Trust-Fidelity Low priced stock fund 2,85,00,000 7.15 2,85,00,000 7.15

174 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

d) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years
immediately preceding the reporting date: NIL
e) Calls Unpaid: NIL, Forfeited Shares : ` 11.84 Lakhs
20. Other equity (` in lakhs)
Reserves & Surplus Items of OCI
Particulars Capital Security Capital General Retained Equity Total Equity
reserve premium redemption reserve earnings Instruments
reserve through
OCI
Balance as at April 01, 2018 1,256.33 30,524.02 3,335.00 4,46,153.31 47,352.44 1,93,750.09 7,22,371.18
Capital Reserve on acquisition of shares in Associates 1,200.38 1,200.38
Profit for the year - - - - 49,313.29 - 49,313.29
Other comprehensive income for the year net of income tax - - - - - (37,373.54) (37,373.54)
Other comprehensive income arising from remeasurement of defined
benefit obligation net of income tax - - - - (834.77) - (834.77)
Total comprehensive income for the year - - - - 48,478.54 (37,373.54) 11,104.99
Dividends paid [Note 20] - - - - (8,766.51) - (8,766.51)
Dividend Distribution Tax (DDT) [Note 20] - - - - (1,811.77) - (1,811.77)
Transfer to General reserve - - - 38,000.00 (38,000.00) - -
Balance as at March 31, 2019 2,456.71 30,524.02 3,335.00 4,84,153.31 47,252.69 1,56,376.56 7,24,098.28
Balance as at April 01, 2019 2,456.71 30,524.02 3,335.00 4,84,153.31 47,252.69 1,56,376.56 7,24,098.28
Profit for the year - - - - 10,958.45 - 10,958.45
Other comprehensive income for the year net of income tax - - - - - (26,181.19) (26,181.19)
Other comprehensive income arising from remeasurement of defined
benefit obligation net of income tax - - - - (20,122.40) - (20,122.40)
Total comprehensive income for the year - - - - (9,163.95) (26,181.19) (35,345.14)
Dividends paid [Note 20] - - - - (8,766.50) - (8,766.50)
Dividend Distribution Tax (DDT) [Note 20] - - - - (1,811.40) - (1,811.40)
Balance as at March 31, 2020 2,456.71 30,524.02 3,335.00 4,84,153.31 27,510.84 1,30,195.36 6,78,175.24

Distributions made and proposed (` in lakhs)

Particulars Amount
Cash dividends on equity shares declared and paid:
Final dividend for the year ended on 31 March 2019: ` 2.20 per share
(31 March 2018: ` 2.20 per share) 8,766.50
DDT on final dividend 1,811.40
Total cash dividends declared and paid 10,577.90
Proposed dividends on Equity shares:
Final dividend for the year ended on 31 March 2020: ` 1.20 per share
(31 March 2019: ` 2.20 per share) 4,781.73
Total Proposed dividends 4,781.73
Proposed dividends on equity shares are subject to approval at the annual general meeting
and are not recognised as a liability
1. Capital Reserve: This reserve has been created from amounts forfeited on shares not fully paid up, scheme of capital subsidy for industries
in backwards areas, etc. It is not available for distribution of dividend.
2. Securities Premium: The amount received in excess of face value of the Rights Equity shares issued have been recognised in Share
Premium Reserve, etc. It is not available for distribution of dividend.
3. Capital Redemption Reserve: Capital Redemption Reserve has been created against the redemption of preference shares in earlier years.
It is not available for distribution of dividend.
4. General Reserve: General Reserve represents a reserve other than capital reserve which is not earmarked for a specific purpose.
5. Retained Earnings: Retained Earnings represents surplus/accumulated earnings of the Company and are available for distribution to shareholders.
6. Other comprehensive income (OCI): OCI comprises items of income and expenses (including reclassification adjustments) that are not
recognised in profit or loss as required or permitted by Indian Accounting Standards. The components of OCI include: re-measurements of
defined benefit plans, gains and losses arising from investment in equity instruments.

58TH ANNUAL REPORT 2019-20 175

 Notes to the Consolidated Financial Statements

21.   Long term borrowings (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Secured
Term loan from bank 9,333.33 14,666.67
TOTAL 9,333.33 14,666.67
Note:
The term loan from bank comprises of Rupee Term Loan (RTL) from EXIM bank for 40,000 MTPA Melamine III Project at
Baroda Unit of GSFC having tenure of 5 years. The sanctioned limit of the loan is ` 500 Crores carrying G-sec rate prevailing
as on the date of disbursement with spread of 160 bps (G – sec rate and spread is subject to reset annually). GSFC had
outstanding balance of ` 146.67 Crores as on 31.03.2020. The effective rate of interest was 8.14%. This loan is secured by
hypothecation of movable fixed assets of the said project. The principal amount of loan is repayable over a period of 15 equal
quarterly installments commencing after a moratorium of 18 months from the date of first disbursement which was due on
01.04.2019 and GSFC has repaid principal amount of ` 53.33 Crores during F.Y. 2019-20. Future repaymet is due as under:

Financial Year Amount in ` Lakhs

2020-21 5,333.33
2021-22 5,333.33
2022-23 4,000.00

22. Long term provisions (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Provision for employee benefits
Provision for Gratuity (Refer Note 37) 16,254.74 5,714.52
Provision for Pension (Refer Note 37) 34,068.06 19,373.43
Provision for Compensated absences 23,137.67 16,454.70
Provision for Post Retirement Medical Benefit Scheme (PRMBS) (Refer Note 37) 4,652.65 3,839.45
Other Provisions
Provision for Asset Retirement Obligation 2,032.64 1,808.25
TOTAL 80,145.76 47,190.35

Movement in provision for Asset Retirement Obligation: (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Balance at Beginning of Year 1,808.25 1,648.11
Additional provision recognised 224.39 160.14
Provision Utilized - -
Balance at Closing of Year 2,032.64 1,808.25

176 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

23.
A Income tax asset (net) (` in lakhs)
Particulars As at 31st As at 31st
March, 2020 March, 2019
Advance payment of Income Tax (net) 15,121.97 9,904.01

B- Current tax liabilities (net) (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Provision for Income Tax (net) 534.06 499.07

C Deferred tax liabilities (net)

Particulars As at 31st As at 31st
March, 2020 March, 2019
(a) Statement of Profit & loss
Profit & loss section
Current income tax charge (net of MAT credit entitlement) 299.45 11,871.18
Deferred tax relating to origination & reversal of temporary differences 2,478.95 5,481.26
Earlier Year Tax 348.89 228.98
Income tax expense reported in the statement of profit or loss 3,127.29 17,581.41
(b) Other comprehensive income section
Unrealised (gain)/loss on FVTOCI equity securities (2,211.04) (7,346.07)
Net loss/(gain) on remeasurements of defined benefit plans (10,807.00) (449.59)
Income tax charged to OCI (13,018.04) (7,795.67)
(c) Reconciliation of tax expense and the accounting profit multiplied by
India’s domestic tax rate for the year ended
Accounting profit before income tax 14,091.74 66,894.61
Statutory income tax rate 34.944% 34.944%
Tax at statutory income tax rate of 34.944% 4,733.23 23,375.65
Tax effects of :
Income not subject to tax (1,631.06) (1,323.74)
Inadmissible expenses or expenses treated seperately 13,997.25 8,929.45
Admissiable deductions (16,080.12) (14,152.87)
Deduction Under chapter - VI (723.10) (5,072.01)
Deferred tax on other items 2,479.02 5,311.04
Others 3.18 284.91
Total Tax effects (1,954.83) (6,023.22)
Income tax expense 2,778.39 17,352.43
Earlier year tax 348.89 228.98
Income tax expense reported in statement of Profit & loss 3,127.29 17,581.42

58TH ANNUAL REPORT 2019-20 177

 Notes to the Consolidated Financial Statements

(d) Deferred tax relates to the following: (` in lakhs)

Balance sheet Profit & loss
31-Mar-20 31-Mar-19 2019-20 2018-19
Property, plant and equipment (56,539.20) (50,581.93) (5,957.27) 4,778.95
Expenses allowable for tax purpose when paid 11,296.29 8,288.77 3,007.52 637.80
Investments in Equity instruments 21,319.36 19,108.32 2,211.04 (7,346.08)
Fair valuation of deposits 0.36 0.41 (0.05) 0.23
Actuarial loss on Defined benefit plan 20,012.89 9,205.89 10,807.00 (449.60)
Fair valuation of Derivatives (6.65) (6.65) - 0.01
Machinery Spares 1,464.17 1,464.17 - (0.00)
Undistributed profit of associates (1,453.67) (1,453.67) - 157.97
Provision for PF Cont. ILFS 310.22 - 310.22 -
Allowance for doubtful debts 5,378.18 5,303.07 75.11 12.98
ARO provision-Windmill 440.46 389.91 50.55 (55.96)
ARO provision-Solar 3.42 - 3.42 -
Leasehold Building IND AS 14.98 - 14.98 -
ICDS Impact 112.42 95.83 16.59 (51.80)
Reclassification of MAT Credit entitlement 2,919.04 4,688.47 (1,769.43) (554.39)
Deferred tax expense/(income) 8,769.67 (2,869.89)
Net deferred tax assets/(liabilities) 5,272.26 (3,497.41)
Reconciliation of deferred tax liabilities (net):
Opening Balance as at 31-Mar-19 31-Mar-18
(3,497.41) (6,367.28)
Tax income/(expense) during the period recognised in P&L (2,478.94) (5,481.26)
Tax income / (Expense) MAT credit recognised in P&L (1,769.43) 554.39
Tax income/(expense) during the period recognised in
Retained Earnings - 1.07
Tax income/(expense) during the period recognised in OCI 13,018.04 7,795.67
Closing balance as at 5,272.26 (3,497.41)
31-Mar-20 31-Mar-19

Notes:
The company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets
and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the
same tax authority.

178 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

24. Financial Liabilities- borrowings (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Secured
Loans repayable on demand
From Banks
Cash credit account * 4,149.44 16,365.96
Unsecured
Loans repayable on demand
Short term working capital demand loan/over drafts from banks 21,186.61 2.83
Inter Corporate Deposits 54,000.00 70,500.00
Other loans and advances
Commercial papers 30,000.00 -
Buyers credit and bill discounting facility 31,905.40 -
TOTAL 1,41,241.45 86,868.79
* The Cash credit facility from consortium of banks is secured by hypothecation of stock of raw materials, finished
products, packing materials, general stores, spares, book debts etc. of the Company.
Interest rate details for short term borrowings:
(i) Cash credit accounts carrier interest rates ranging from 7.70% to 9.45% p.a.
(ii) Working capital demand loan carries interest rate ranging from 6.60% to 7.35% p.a.
(iii) Inter Corporate Deposits carries interest rates ranging from 5.42% to 7.75% p.a.
(iv) Commercial papers carries interest at ranging from 5.26% to 7.19% p.a.
(v) Buyers credit carries interest at ranging from 1.04% to 2.35% p.a.
25. Current financial liabilities-trade payables (` in lakhs)
Particulars As at 31st As at 31st
March, 2020 March, 2019
Due to Micro, Small and Medium Enterprises (MSMED)* 809.66 1,057.41
Others** 42,757.80 1,02,808.75
TOTAL 43,567.46 1,03,866.16

Particulars As at 31st As at 31st

March, 2020 March, 2019
(i) Principal amount remaining unpaid to any supplier as at the end of the
accounting year 809.66 1,057.41
(ii) Interest due thereon remaining unpaid to any supplier as at the end of
the accounting year NIL NIL
(iii) The amount of interest paid along with the amounts of the payment made
to the supplier beyond the appointed day NIL NIL
(iv) The amount of interest due and payable for the year NIL NIL
(v) The amount of interest accrued and remaining unpaid at the end of the
accounting year NIL NIL
(vi) The amount of further interest due and payable even in the succeeding year,
until such date when the interest dues as above are actually paid NIL NIL
* Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the
basis of information collected by the Management. This has been relied upon by the auditors.
** The above balances include trade payables to related parties ` 1738.61 Lakhs (` 2473.63 Lakhs as on 31 March
2019) Refer Note 39.

58TH ANNUAL REPORT 2019-20 179

 Notes to the Consolidated Financial Statements

26. Other current financial liabilities (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Financial liabilities at fair value through profit & loss
Derivatives not designated in hedging relationship
Foreign exchange derivative contracts 28.28 -
Other financial liabilities at amortised cost
Current maturities of long term debt 5,333.33 5,333.33
Interest accrued but not due on borrowings 225.58 489.12
Unclaimed dividend* 544.82 544.35
Deposits received 5,529.13 5,410.37
Dues to shareholders for fractional bonus shares - 19.42
Liability towards employee benefits 5,463.34 5,742.73
Creditors for capital goods 12,330.71 25,874.23
Lease Liabilities** 246.47 -
Other payables 81.38 188.21
TOTAL 29,783.04 43,601.76
* These figures do not include any amounts due and outstanding to be credited to Investor Education and Protection
Fund.
** Details of Lease Liabilities :
Movement of Lease Liabilities was as under: As at 31st
March, 2020
Opening Balance -
Add: Additions (Transitional impact on adoption of Ind AS 116) 373.25
Add: Interest recognised during the year 42.86
Less: Payment Made 169.64
Closing Balance 246.47

Contractual maturities of lease liabilities on an undiscounted basis: As at 31st

March, 2020
- Less than one year 157.62
- One to Five years 88.85
Closing Balance 246.47

27. Other current liabilities (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Advances from customers 1,737.60 1,551.58
Statutory dues 6,213.27 1,768.93
Income received in advance 3.80 3.28
TOTAL 7,954.67 3,323.79

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28. Provisions (` in lakhs)

Particulars As at 31st As at 31st
March, 2020 March, 2019
Provision for employee benefits
Provision for Gratuity (Refer note 37) 2,382.35 1,812.46
Provision for Pension (Refer note 37) 5,833.69 4,476.75
Provision for Compensated absences* 3,989.48 3,507.67
Provision for PRMBS (Refer note 37) 236.72 210.39
Other Provision** 894.94 534.59
TOTAL 13,337.18 10,541.86
* The provision for Compensated absences pertains to accrued ordinary and sick leave entitlements. The change in
carrying amount of the provision results from additional provision recognized net of benefits paid.
** Employees’ Provident Fund Trust of the Company (GSFC-EPFT) is holding investments aggregating to ` 4767
Lakhs in various debt securities issued by IL&FS Group, Dewan Housing Finance Corporation Ltd., Yes Bank Ltd. &
Reliance Group. In view of uncertainties regarding recoverability of such investment, the Company has, as a matter
of prudence, made a provision of ` 1030 Lakhs (21.61%) upto FY 2019-20, of which ` 500 Lakhs was provided during
FY 2019-20, towards probable incremental employee benefit liability that may arise on the Company on account of
any likely shortfall of the GSFC-EPFT in meeting its obligations.Out of this ` 142.24 Lakh has been paid in FY 2019-
20. (Previous year ` NIL). In future company will make provision looking to the development in the matter.
29. Revenue from operations (` in lakhs)
Particulars Year ended Year ended
31st March, 20 31st March, 19
Revenue from sale of products (including subsidy on fertilizers)
- Manufactured / Generated products 5,90,650.92 6,07,243.78
- Traded products 1,89,146.87 2,41,823.56
Total 7,79,797.79 8,49,067.34
Revenue from operation above includes:-
Subsidy from Government of India under New Urea Policy/Nutrient Based
Subsidy Scheme
Pertaining to current year 2,33,857.00 2,46,113.00
Pertaining to earlier years determined during current year 12,129.00 10,369.00
TOTAL 2,45,986.00 2,56,482.00
As per amendment made by Department of Fertilizers vide notification dated 30th March, 2020 in Modified NPS – III
Policy of Urea effective from 2nd April, 2014, the company will be compensated additional ` 500 per MT for Urea sales
from April, 2014 onwards. Accordingly, the company has recognized Urea subsidy income of ` 10375.43 Lakhs in FY
2019-20 out of which ` 8747.75 Lakhs pertains to previous years.

30. Other income (` in lakhs)

Particulars Year ended Year ended
31st March, 20 31st March, 19
Interest 2,063.38 3,399.76
Dividend from long term investments 3,490.40 3,657.86
Rent 171.29 148.10
Insurance claims 1,374.56 562.37
Excess provision no longer required 1,042.80 1,353.07
Scrap sales 542.78 753.19
Miscellaneous income 1,965.85 878.24
TOTAL 10,651.06 10,752.59

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31. Cost of material consumed (` in lakhs)

Particulars Year ended Year ended
31st March, 20 31st March, 19
Raw Materials
Opening stock 35,241.60 25,335.28
Add: Purchases 3,54,375.75 4,32,523.10
Less: Closing stock 29,899.29 35,241.60
TOTAL 3,59,718.06 4,22,616.78

32. Changes in inventory of finished goods, work in process and stock in trade (` in lakhs)
Particulars Year ended Year ended
31st March, 20 31st March, 19
Opening stock
Finished products 63,430.85 35,812.57
Stock in trade 44,604.10 7,507.30
Work-in-process 1,559.11 1,679.53
1,09,594.06 44,999.40
Less: Closing stock
Finished products 50,520.54 63,430.85
Stock in trade 35,440.14 44,604.10
Work-in-process 2,014.81 1,559.11
87,975.49 1,09,594.06
(Increase) / Decrease 21,618.60 (64,594.66)

33. Employee benefit expenses (` in lakhs)

Particulars Year ended Year ended
31st March, 20 31st March, 19
Salaries, wages, bonus 57,239.34 38,092.09
Contribution to provident, gratuity and superannuation (pension) funds
(including provisions) 8,993.78 8,073.55
Staff Welfare expenses 6,650.46 6,902.79
TOTAL 72,883.58 53,068.43
-Employee benefit expenses includes R&D salary expenses of ` 1001.68 lakhs (previous year ` 895.91 lakhs)(Refer
note no. 42)
-Long Term Wage Revision was due from 1st January 2019 for Staff and Officers of Baroda Unit. The same has been
amicably settled and paid.For Sikka Unit, Polymer Unit and Fibre Unit, necessary provisions have been made for Pay
revision from due date to 31st March 2020. Wage revision remains valid for four years.
34. Finance costs (` in lakhs)
Particulars Year ended Year ended
31st March, 20 31st March, 19
Interest
- borrowings 10,532.18 5,036.93
- others 464.98 439.47
Other borrowing cost 482.58 624.68
TOTAL 11,479.74 6,101.08

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35. Other expenses (` in lakhs)

Particulars Year ended Year ended
31st March, 20 31st March, 19
Consumption of stores and spare parts 12,748.83 10,325.57
Water 2,947.47 2,906.41
Packing expenses 8,470.58 9,690.68
Repairs to buildings 337.14 430.61
Repairs to machinery 6,256.18 6,334.35
Other repairs 673.99 829.61
Insurance 1,012.22 581.65
Rent, rates and taxes 2,555.72 665.47
Product transportation, distribution & loading & unloading charges 33,567.16 35,472.07
Depots and farm information centers expense 4,981.41 3,692.14
Marketing expense reimbursement, demonstration, extension services
and publicity etc. 588.86 1,170.23
Foreign exchange gain/loss (net) 3,102.88 6,909.72
Directors sitting fees 8.90 7.30
Auditors’ remuneration * 24.17 26.15
Cost auditors’ fees 5.17 5.16
Loss on fixed assets sold/discarded 424.08 17.23
Allowance for doubtful debts 536.08 38.86
Amortisation of leasehold land 355.98 355.98
Donations and contributions 878.14 420.68
Miscellaneous 5,131.17 4,993.25
Impairment in value of Investment 870.03 -
TOTAL 85,476.16 84,873.09
Other expenses includes R&D expenses of ` 13.13 lakhs (previous
year ` 10.43 lakhs) in respective heads (Refer note no. 42)

*Auditors’ remuneration
Particulars Year ended Year ended
31st March, 20 31st March, 19
Payment to Statutory Auditors:
For Statutory audit 7.70 7.60
For Taxation matters 2.40 2.40
For other services (including Limited Review fees & certification) 12.42 14.65
For Reimbursement of expenses 1.65 1.50
24.17 26.15

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36. Earnings per share (EPS): (` in lakhs)

Particulars Year ended Year ended
31st March, 20 31st March, 19
i. Profit attributable to Equity holders of the Company
Profit attributable to equity holders of the Company
Continuing operations 10,959.05 49,313.29
Discontinued operations - -
Profit attributable to equity holders of the Company for basic earnings 10,959.05 49,313.29
Effect of dilution - -
Profit attributable to equity holders of the Company adjusted for the
effect of dilution 10,959.05 49,313.29
ii. Weighted average number of ordinary shares
Issued ordinary shares 39,84,77,530 39,84,77,530
Effect of dilution - -
39,84,77,530 39,84,77,530
Basic EPS (`) 2.75 12.38
Diluted EPS (`) 2.75 12.38
Nominal value per share (`) 2.00 2.00

37. Employment benefit plans

a) The Company operates post employment and other long term employee benefits defined plans as follows:
I. Funded II. Unfunded
i. Gratuity i. Post retirement medical benefit scheme
ii. Pension
Aforesaid post-employment benefit plans typically expose the Company to actuarial risks such as: investment
risk, interest rate risk, longevity risk and salary risk.
Investment Risk: The present value of the defined benefit liability is calculated using a discount rate which is
determined by reference to market yields at the end of the reporting period on government bonds.
Interest Risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially
offset by an increase in the return on the plan’s investments.
Longevity Risk: The present value of the defined benefit liability is calculated by reference to the best estimate
of the mortality of plan participants both during and after their employment. An increase in the life expectancy of
the plan participants will increase the plan’s liability.
Salary Risk: The present value of the defined benefit liability is calculated by reference to the future salaries of
plan participants. As such, an increase in salary of the plan participants will increase the plan’s liability.
b) Defined contribution plans:
Amount towards Defined Contribution Plans have been recognised under “Contributions to Providend, Gratuity
and Superannuation Fund (pension) Funds (including provisions)” in Note : 33 ` 4049.22 lakhs for FY 2019-20
(` 2996.94 lacs for FY 2018-19).

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37. Employment benefit plans (Contd...)

c) Details of funded & unfunded plans are as follows: (` in lakhs)
Description Pension Gratuity
2019-20 2018-19 2019-20 2018-19
1. Changes In Present Value of obligation
a. Obligation as at the beginning of the year 61,093.93 61,080.53 29,003.72 27,860.47
b. Current Service Cost 798.02 796.25 1,284.48 1,259.31
c. Interest Cost 4,752.04 4,739.84 2,232.93 2,182.49
d. Actuarial (Gain)/Loss 18,870.75 303.51 10,969.21 741.81
e. Benefits Paid (5,637.82) (5,826.19) (3,054.02) (3,040.36)
f. Obligation as at the end of the year 79,876.92 61,093.93 40,436.32 29,003.72
The defined benefit obligation is Funded Funded Funded Funded
2. Changes in Fair Value of Plan Assets
a. Fair Value of Plan Assets as at the beginning of
the year 37,243.76 35,631.39 21,476.75 21,376.92
b. Expected return on Plan Assets 2,896.82 2,765.00 1,654.18 1,674.89
c. Actuarial Gain/(Loss) (170.10) (107.38) (8.02) (70.52)
d. Contributions 5,642.52 4,780.95 1,730.34 1,535.82
e. Benefits Paid (5,637.82) (5,826.19) (3,054.02) (3,040.36)
f. Fair Value of Plan Assets as at the end of the year 39,975.18 37,243.76 21,799.23 21,476.75
3. Amount Recognised In The Balance Sheet
a. Fair Value of Plan Assets as at the end of the year 39,975.18 37,243.76 21,799.23 21,476.75
b. Present Value of Obligation as at the end of the year (79,876.92) (61,093.93) (40,436.32) (29,003.72)
c. Amount recognised in the Balance Sheet (39,901.74) (23,850.18) (18,637.09) (7,526.97)
4. Expense recognised in P & L during the year
a. Current Service Cost 798.02 796.25 1,284.48 1,259.31
b. Net Interest Cost 1,855.22 1,974.84 578.75 507.60
c. Expense recognised during the year 2,653.24 2,771.09 1,863.23 1,766.91
5. Expense recognised in OCI during the year
a. Return on Plan Assets, Excluding Interest Income 170.10 107.38 8.02 70.52
b. Actuarial (Gain)/Loss recognised on Obligation 18,870.75 303.51 10,969.21 741.81
c. Net (Income)/Expense recognised during the year 19,040.85 410.89 10,977.23 812.33
6. Investment Details of Plan Assets
Administered by LIC of India 100% 100% 100% 100%

Maturity Profile Pension Gratuity PRMBS

Projeted benefit payable in future year
from the date of reporting 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19
1st Following year 9,062.84 8,264.41 5,040.86 3,763.98 236.72 210.39
2nd Following year 6,172.27 4,781.35 3,119.60 2,314.11 250.37 222.75
3rd Following year 11,280.78 7,264.87 5,260.30 3,367.34 265.79 235.95
4th Following year 11,927.10 8,047.22 6,071.63 3,738.51 284.92 250.81
5th Following year 10,537.22 9,450.90 4,902.16 4,350.66 299.73 269.05
Sum of year 6 to 10 37,430.80 32,595.43 18,919.52 14,324.85 1,672.81 1,530.07
Sum of year 11 and above - - 21,074.56 16,530.70 - -

58TH ANNUAL REPORT 2019-20 185

 Notes to the Consolidated Financial Statements

37. Employment benefit plans (Contd...) (` in lakhs)

Description PRMBS
2019-20 2018-19
1. Changes In Present Value of the defined benefit obligation
a. Obligation as at the beginning of the year 4,049.84 4,037.11
b. Current Service Cost 182.27 166.89
c. Interest Cost 315.08 290.54
d. Actuarial (Gain)/Loss 908.56 63.38
e. Benefits Paid (566.37) (508.08)
f. Obligation as at the end of the year 4,889.38 4,049.84
The defined benefit obligation is Unfunded Unfunded
2. Amount Recognised In The Balance Sheet
a. Fair Value of Plan Assets as at the end of the year — —
b. Present Value of Obligation as at the end of the year (4,889.38) (4,049.84)
c. Amount recognised in the Balance Sheet (4,889.38) (4,049.84)
3. Expense recognised in P & L during the year
a. Current Service Cost 182.27 166.89
b. Interest Cost 315.08 290.54
c. Expense recognised during the year 497.35 457.43
4. Expense recognised in OCI during the year
a. Return on Plan Assets,Excluding Interest Income — —
b. Actuarial (Gain)/Loss recognised on Obligation 908.56 63.38
c. Net (Income)/Expense recognised during the year 908.56 63.38
The expense is disclosed in Note No. 33 - “Employee Benefit Expenses”, Pension & Gratuity are disclosed in line
item - Contribution to Provident Fund,and provision to Gratuity, Superannuation (Pension) Funds. Leave
Encashment is disclosed in line item - Salaries, Wages and Bonus and PRMBS is disclosed in line item - Welfare
funds.
d) Assumptions 31.03.2020 31.03.2019
a. Discount Rate (per annum) 6.84% 7.78%
b. Estimated Rate of return on Plan Assets (per annum) N.A. N.A.
c. Salary Escalation Rate (per annum) 6% 6%
d. Salary Medical Inflation Rate (per annum) N.A. N.A.
e. The estimates of future salary increases considered in actuarial valuation take account of inflation, seniority,
promotion and other relevant factors.
f. The estimate of mortality rate during employment has been considered as per Indian Assured Lives
Mortality (2006-08).
g. Provident Fund contributions are made to Trusts administered by the Company.  The interest rate payable
to the members of the Trusts shall not be lower than the statutory rate of interest declared by the Central
Government under the Employees provident Funds and Miscellaneous Provisions Act, 1952 and shortfall,
if any, shall be made good by the Company.

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 Notes to the Consolidated Financial Statements

37. Employment benefit plans (Contd...) (` in lakhs)

Description 2019-20
Pension Gratuity PRMBS
e) Effect of one percentage point change in the
assumed Discount Rate
a. One percentage point increase in Discount Rate (4,007.39) (2,029.51) (519.79)
b. One percentage point decrease in Discount Rate 3,981.98 2,289.84 639.87
Effect of one percentage point change in the assumed
Salary Escalation Rate
a. One percentage point increase in Salary Escalation Rate 3,965.10 2,285.74 NA
b. One percentage point decrease in Salary Escalation Rate (4,062.15) (2,078.19) NA
Effect of one percentage point change in the assumed
medical inflation rate-Benefit Obligation
a. One percentage point increase in medical inflation rate NA NA 652.17
b. One percentage point decrease in medical inflation rate NA NA (537.10)

f) Details of funded & unfunded plans are as follows: (` in lakhs)

Pension 2019-20 2018-19 2017-18 2016-17 2015-16
Net Asset/(Liability) recognised in Balance Sheet (including experience adjustment impact)
1 Present Value of Defined Benefit
Obligation 79,876.92 61,093.93 61,080.53 58,669.04 50,362.00
2 Fair Value of Plan Assets 39,975.18 37,243.76 35,631.39 32,985.70 31,863.73
3 Status [Surplus/(Deficit)] (39,901.74) (23,850.18) (25,449.14) (25,683.34) (18,498.27)
4 Experience Adjustment of Plan Assets
[Gain/(Loss)] (170.10) (107.38) 323.70 116.31 -
5 Experience/Assumptions Adjustment
of obligation [(Gain)/Loss] 18,870.75 303.51 1,858.06 7,958.89 15,143.18
Gratuity 2019-20 2018-19 2017-18 2016-17 2015-16
Net Asset/(Liability) recognised in Balance Sheet (including experience adjustment impact)
1 Present Value of Defined Benefit
Obligation 40,436.32 29,003.72 27,860.47 27,890.11 26,260.45
2 Fair Value of Plan Assets 21,799.23 21,476.75 21,376.92 19,143.29 18,443.70
3 Status [Surplus/(Deficit)] (18,637.09) (7,526.97) (6,483.55) (8,746.82) (7,816.75)
4 Experience Adjustment of Plan Assets
[Gain/(Loss)] (8.02) (70.52) 196.79 19.15 -
5 Experience/Assumptions Adjustment
of obligation [(Gain)/Loss] 10,969.21 741.81 (1,134.55) 636.00 4,665.37

58TH ANNUAL REPORT 2019-20 187

 Notes to the Consolidated Financial Statements

37. Employment benefit plans (Contd...) (` in lakhs)

PRMBS 2019-20 2018-19 2017-18 2016-17 2015-16
Net Asset/(Liability) recognised in Balance Sheet (including experience adjustment impact)
1 Present Value of Defined Benefit
Obligation 4,889.38 4,049.84 4,037.11 3,947.53 3,636.09
2 Fair Value of Plan Assets - - - - -
3 Status [Surplus/(Deficit)] (4,889.38) (4,049.84) (4,037.11) (3,947.53) (3,636.09)
4 Experience Adjustment of Plan Assets
[Gain/(Loss)] - - - - -
5 Experience/Assumptions Adjustment
of obligation [(Gain)/Loss] 908.56 63.38 122.04 362.45 354.77

38. Commitment and contingencies

a. Commitments (` in lakhs)
Particulars As at 31st As at 31st
March, 20 March, 19
(i) Estimated amount of contracts remaining to be executed on
capital accounts and not provided for 6,897.18 12,757.00

b. Contingent liabilities (` in lakhs)

Particulars As at 31st As at 31st
March, 20 March, 19
Claims against the Company not acknowledgement as debt
(i) Excise and Customs duty 9,122.86 12,366.00
(ii) Central sales tax and value added tax 5,661.17 5,661.00
(iii) Income tax 16,260.73 13,776.01
(iv) Other claims by:
Income tax assessment orders contested 3,289.00 5,674.20
- Others 67,859.43 43,862.00
- Department of Fertilizers, total amount not quantifiable, demands stayed, Refer Refer
matter pending with High Courts Note:12 Note:12
- Employees / ex-employees, contractual labour – pending before courts Not Not
ascertainable ascertainable

In respect of the above, the expected outflow will be determined at the time of final resolution of the dispute.

c. Contingent Assets
The Company does not have any contingent assets.

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 Notes to the Consolidated Financial Statements

39. Related party transactions

(` in lakhs)
Name of the Party Nature of Relationship Nature of Transaction 2019-20 2018-19
Vadodara Enviro Channel Ltd. Usage of effluent channel 346.20 317.20
(Erstwhile Effluent Channel Project Associate
Outstanding balance-Payable 17.15 22.71
Ltd.)
Expenses recovered 336.22 165.30
ICD Received 10,000.00 5,500.00
ICD Repaid - 5,500.00
Gujarat Green Revolution Company Associate Interest expense on ICD 595.18 33.86
Dividend Received 6.25 6.25
Outstanding balance-Receivable 194.78 58.27
Outstanding balance - loan (ICD) 10,000.00 -
Expenses recovered 156.04 85.87
Provision for Investment 870.03 -
Karnalyte Resources Inc. Associate
Outstanding balance-Payable - 15.72
Outstanding balance-Receivable 39.89 -
Purchase of Material 35,300.58 33,545.39
Expenses recovered 38.80 26.57
Tunisian Indian Fertilizer Company
Other related party Provision for Investment 1,802.67 -
(TIFERT)
Advance to vendor 7,242.80 7,027.18
Outstanding balance-Receivable 2,497.07 1,357.10
Donation Granted 563.17 508.49
GSFC Education society Other related party
Outstanding balance-Payable 163.17 -
Key Management
Chairman & Managing Director
Personnel
Key Management
V D Nanavaty – ED (Finance) & CFO Remuneration 178.45 129.60
Personnel
Key Management
V V Vachhrajani, CS & SVP(Legal)
Personnel
Purchase of Materials 1,824.15 2,401.10
Sale of Product 835.89 1,242.51
Gujarat Alkalies and Chemicals Expenses recovered 3.30 6.79
Other related party
Limited Outstanding balance-payable 118.75 112.47
Dividend Received 132.40 107.58
Outstanding balance-receivable 121.70 108.13
Purchase of Materials 198.34 585.96
Fees for Services 30.20 34.17
Gujarat Narmada Valley Fertilizers Sale of Material 1,039.33 6,909.14
Other Related Party
Company Limited Dividend Received 2,154.54 2,308.44
Outstanding balance-Payable 0.62 (14.62)
Outstanding balance-Receivable 53.50 26.31
Purchase of power 15,579.45 17,822.01
Sale of power 107.27 187.47
Gujarat Industries Power Company Dividend Received 648.52 603.79
Other Related Party
Limited. Expenses recovered - 20.46
Outstanding balance-Receivable 6.10 7.49
Outstanding balance-Payable 863.97 8.91
Purchase of Gas 21,539.82 3,854.86
Gujarat State Petroleum Corporation
Other Related Party Fees for Services - 5.90
Ltd.
Outstanding balance-payable 338.22 99.99
Purchase of Material 9,829.51 13,556.11
Indian Potash Ltd. Other Related Party Dividend Received 33.75 33.75
Outstanding balance-payable 236.73 2,228.45
The Fertilizer Association of India Other Related Party Fees for Services 37.33 19.86

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 Notes to the Consolidated Financial Statements

Terms and conditions of transactions with related parties:

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length
transactions. Related Party Transaction amounts shown in above table are inclusive of taxes.Outstanding balances
at the year-end are unsecured and interest free and settlement occurs in cash.There have been no gua rantees
provided or received for any related party receivables or payables. For the year ended 31 March 2020, the Company
has not recorded any impairment of receivables relating to amounts owed by related parties (31st March,2019: Nil).
This assessment is undertaken each financial year through examining the financial position of the related party and
the market in which the related party operates.
Transactions with key management personnel: (` in lakhs)

Particulars For the year ended

31-Mar-20 31-Mar-19
Short term employee benefits 157.52 117.53
Post employment benefits 10.67 6.17
Long-term employee benefits 10.26 5.90
Total 178.45 129.60

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 Notes to the Consolidated Financial Statements

40. Segment information

For management purposes, the company is organised into business units based on its products and has two reportable
segments, as follows:
1. Fertilizer products comprising of Urea, Ammonium Sulphate, Di-ammonium Phosphate, Ammonium Phosphate
Sulphate, NPK (12:32:16), (10:26:26), traded fertilizer products etc.
2. Industrial products comprising of Caprolactam, Nylon-6, Nylon Filament Yarn, Nylon Chips, Melamine, Methanol,
Polymer products, traded industrial products etc.
The Chief Operating Decision Maker (“CODM”) evaluates the Company’s performance and allocates resources
based on an analysis of various performance indicators by the two operating segments. The CODM reviews
revenue and gross profit as the performance indicator for both operating segments.
(` in lakhs)
A] SEGMENT REVENUE: 31-Mar-20 31-Mar-19
1 TOTAL SEGMENT REVENUE
a) Fertilizer Products 6,23,838.37 6,31,429.34
b) Industrial Products 1,55,959.42 2,17,638.00
TOTAL 7,79,797.79 8,49,067.34
2 INTER SEGMENT REVENUE - -
3 EXTERNAL REVENUE (1 - 2)
a) Fertilizer Products 6,23,838.37 6,31,429.34
b) Industrial Products 1,55,959.42 2,17,638.00
TOTAL 7,79,797.79 8,49,067.34
B] RESULT:
1 Segment result
a) Fertilizer Products 32,526.16 28,984.57
b) Industrial Products (6,929.39) 38,213.00
TOTAL 25,596.77 67,197.57
2 a) Unallocated income 7,322.15 8,884.35
b) Unallocated expenses (7,347.44) (3,086.35)
3 Operating Profit (B1 + B2) 25,571.48 72,995.56
4 Finance Cost (11,479.74) (6,100.94)
5 Provision for Taxation:
Current Income Tax (299.45) (12,560.55)
Deferred Tax (net) (2,478.95) (5,481.26)
MAT credit recognised - 689.37
Earlier Year Tax (348.89) (228.98)
6 Net Profit 10,964.45 49,313.20
C] OTHER INFORMATION:
1 Segment assets
a) Fertilizer Products 5,19,394.46 5,34,722.73
b) Industrial Products 2,15,257.30 2,08,934.42
TOTAL 7,34,651.76 7,43,657.15
2 Unallocated corporate assets 2,77,623.53 3,02,706.50
3 Total Assets 10,12,275.29 10,46,363.65
4 Segment Liabilities
a) Fertilizer Products 97,798.57 1,46,162.96
b) Industrial Products 75,965.54 73,695.00
TOTAL 1,73,764.11 2,19,857.96
5 Unallocated corporate liabilities 1,52,237.87 94,314.16
6 Total Liabilities 3,26,001.98 3,14,172.12

58TH ANNUAL REPORT 2019-20 191

 Notes to the Consolidated Financial Statements

40. Segment information (Contd.) (` in lakhs)

31-Mar-20 31-Mar-19
7 Capital Expenditure
a) Fertilizer Products 10,007.80 6,081.20
b) Industrial Products 1,919.80 14,525.73
c) Corporate Capital Expenditure 2,619.66 5,526.70
TOTAL 14,547.26 26,133.63
8 Depreciation and Amortisation
a) Fertilizer Products 8,136.90 7,485.52
b) Industrial Products 8,693.87 4,946.40
c) Unallocated corporate Depreciation 264.10 193.47
TOTAL 17,094.87 12,625.39
9 Non-Cash expenses
a) Fertilizer Products 27,324.23 6,024.31
b) Industrial Products 18,915.28 3,775.33
c) Unallocated non-cash expenses 274.73 44.27
TOTAL 46,514.24 9,843.91
41. Financial instruments – Fair values and risk management
A. Accounting classification and fair values
The carrying value of financial instruments by categories as of 31st March, 2020 is as follows. (` in lakhs)
Particulars Carrying amount Fair value
FVT PL FVTOCI Amortised Total Level 1 - Level 2 - Level 3 - Total
Cost Quoted price Significant Significant
in active observable unobservable
markets inputs inputs
Financial assets
Non-current investments - 1,98,540.90 10,200.29 2,08,741.19 1,61,016.88 - 37,524.02 1,98,540.90
Other Non-current financial asset - - 3,007.28 3,007.28 - - - -
Trade receivables - - 84,977.36 84,977.36 - - - -
Government subsidy receivable - - 1,79,119.00 1,79,119.00 - - - -
Cash and cash equivalents - - 3,404.47 3,404.47 - - - -
Other bank balances - - 1,361.43 1,361.43 - - - -
Current loans - - 19,229.80 19,229.80 - - - -
Derivative financial instruments - - - - - - - -
Other Current financial asset - - 964.21 964.21 - - - -
- 1,98,540.90 3,02,263.85 5,00,804.75 1,61,016.88 - 37,524.02 1,98,540.90
Financial liabilities
Non current borrowings - - 9,333.33 9,333.33 - - - -
Current borrowings* - - 1,41,241.45 1,41,241.45 - - - -
Trade payables* - - 43,567.46 43,567.46 - - - -
Other current financial liabilities - - 29,754.76 29,754.76 - - - -
Derivative financial instruments 28.28 - - 28.28 - 28.28 - 28.28
28.28 - 2,23,897.00 2,23,925.28 - 28.28 - 28.28
The carrying value of financial instruments by categories as of 31 st March, 2019 is as follows. (` in lakhs)
Financial assets
Non-current investments - 2,25,130.45 12,508.53 2,37,638.98 1,93,720.26 - 31,410.19 2,25,130.45
Other Non-current financial asset - - 4,419.15 4,419.15 - - - -
Trade receivables - - 81,161.95 81,161.95 - - - -
Government subsidy receivable - - 1,65,791.42 1,65,791.42 - - - -
Cash and cash equivalents - - 4,082.20 4,082.20 - - - -
Other bank balances - - 2,754.25 2,754.25 - - - -
Current loans - - 17,463.64 17,463.64 - - - -
Derivative financial instruments 9.40 - - 9.40 - 9.40 - 9.40
Other Current financial asset - - 470.32 470.32 - - - -
9.40 2,25,130.45 2,88,651.46 5,13,791.31 1,93,720.26 9.40 31,410.19 2,25,139.85
Financial liabilities
Non current borrowings - - 14,666.67 14,666.67 - - - -
Current borrowings* - - 86,868.79 86,868.79 - - - -
Trade payables* - - 1,03,866.16 1,03,866.16 - - - -
Other current financial liabilities - - 43,601.76 43,601.76 - - - -
- - 2,49,003.38 2,49,003.38 - - - -
* - carrying value approximates to the fair value

192 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

B. Measurement of fair values & Sensitivity Analysis

i) Valuation techniques and significant unobservable inputs
Some of the Company’s financial assets and financial liabilities are measured at fair value at the end of each
reporting period. The following table gives information about how the fair values of financial assets and financial
liabilities are determined (in particular, the valuation technique(s) and inputs used).
Financial instruments measured at fair value (` in lakhs)
Financial assets / financial Fair Value (` In Lakhs) as at Fair Value Valuation technique(s)
liabilities 31-03-2020 31-03-2019 hierarchy and key input(s)
1) Investments in equity instruments Listed equity securities in various companies Listed equity securities in various companies Level 1 Quoted bid prices in an
at FVTOCI (quoted) (see note 7) engaged in fertilizer, chemicals,finance, gas, engaged in fertilizer, chemicals,finance, gas, power active market
power and mining industry aggregate fair and mining industry aggregate fair value of
value of ` 1,61,016.88 ` 193,720.26

(` in lakhs)
Particulars Valuation technique(s) & key Fair Value (` In Lakhs) as at Fair Significant Relationship of unobservable input(s) to
input(s) 31-03-2020 31-03-2019 Value unobservable fair value
hierarchy input(s)
2) Investments Market Approach-Comparable Investment in Investment in Level 3 Market Multiple Increasing/Decreasing the Market Multiples
in equity companies-In this approach, companies engaged companies engaged Discount ranging from by probability weighted range, would change
instruments at the value of shares / business in business of storage in business of storage 15% to 25% (As at the FV by + ` 3,838.37 lakhs & - ` 1,054.63
FVTOCI of a company is determined facilities - aggregate facilities - aggregate 31.3.19 from 15% to lakhs ( As at 31.3.19 +` 2,599.79 lakhs & -
(unquoted) (see based on market multiples of fair value of fair value of 25%) ` 2,440.37 lakhs)
note 7) publicly traded comparable ` 23,263.21 ` 23,177.37
companies.
The appropriate multiple is Investment in Investment in Discount to Increasing/Decreasing the Discounting
generally based on companies engaged companies engaged EV/EBITDA Multiple Factor by probability weighted range, would
performance of listed in business of in business of ranging from -0.50% to change the FV by +` 566.55 lakhs & -
companies with similar fertilizers industry - fertilizers industry - 0.50% (As at 31.3.19 ` 566.55 lakhs ( As at 31.3.19 + ` 827.89
business model and size aggregate fair value of aggregate fair value of from -0.5% to 0.5%) lakhs & - ` 1,138.16 lakhs)
(Refer note 1 below). ` 12,115.35 ` 6,242.18
Income Approach- In this Investment in Investment in Level 3 Growth Rate ranging Increasing/Decreasing the Growth Rate &
approach, discounted cash company engaged in company engaged in NIL (As at 31.3.19 NIL) Discounting Factor by probability weighted
flow method was used to fertilizer industry - fertilizer industry - Discounting Factor range, would change the FV by NIL. (As at
capture the present value of aggregate fair value of aggregate fair value of ranging NIL (As at 31.3.19 NIL)
the expected future economic NIL ` NIL 31.3.19 NIL)
benefits to be derived from the
ownership of this investee.
(Refer note below). Investment in Investment in Level 3 10% +/- over base 10% increase/Decrease over base value,
company engaged in company engaged in value. would change FV by + ` 338.40 lakhs & -
the business of gas the business of gas ` 336.05 lakhs. (No sensitivity analysis has
marketing - aggregate marketing - aggregate been carried out as at 31.03.2019 on
fair value of fair value of account of non-availability of data.)
` 2,023.35 ` 1,882.35
Note : Discounted Free Cash flow method has been used to arrive at the enterprise value of the gas marketing business of the investee. Under this technique, the
projected free cash flows from gas marketing business of the company are discounted at the weighted average cost of capital to the providers of capital to the business
of the company and the sum of the present value of such free cash flows would represent the value of business. The investee has various investments in subsidaries
and joint venture companies. Each of these subsidiary and joint venture companies have been separately valued using market price method, DCF method, CCM
method and book value (NAV) method and applied the investee's stake percentage to arrive at the fair value of investee's investment in these subsidiaries / joint
venture companies. Under the market price method, the valuation is derived from the quoted market price of the share of the company as at the valuation date. Under
the NAV method, the valuation is derived by calculating the net assets value of the investee as at the valuation date.
Cost Approach- Net Asset Investment in Investment in Level 3 Discount to Book Value Increasing/Decreasing the Discounting
Value - In this approach, total companies engaged companies engaged ranging from 15% to Factor by probability weighted range, would
value is based on the sum of in power and finance in power and finance 30% (As at 31.3.19 change the FV by +` 14.21 lakhs & - ` 13.44
net asset value as recorded on industry - aggregate industry - aggregate from 15% to 30%) lakhs (As at 31.3.19 +` 12.60 lakhs & -
the balance sheet. A net asset fair value of ` 122.11 fair value of ` 108.30 ` 11.93 lakhs)
methodology is most
applicable for businesses
where the value lies in the
underlying assets and not the
ongoing operations of the
business. (Refer note 1 and 2
below).

58TH ANNUAL REPORT 2019-20 193

 Notes to the Consolidated Financial Statements

Note 1 : The Company has invested in the equity instruments of various companies. However, the percentage of
shareholding of the Company in such investee companies is very low and hence, it has not been provided with future
projections including projected profit and loss account by those investee companies. Hence, the independent valuer
appointed by the Company has estimated fair value based on available historical Annual Reports of such companies
and other information as available in the public domain. Since the future projections are not available, discounted
cashflow approach for fair value determination has not been followed.
Note 2 : In case of some companies, there are no comparable companies valuations available and some are recent
start up companies. In light of no information available for future projections, capacity utilisation, commencement of
operations, etc., the valuation is based on cost approach.
ii) Transfers between Levels 1 and 2
There have been no transfers between Level 1 and Level 2 during 2019-20 and 2018-19.
iii) Level 3 fair values
Reconciliation of Level 3 fair values
The following table shows a reconciliation from the opening balances to the closing balances for Level 3 fair values.

(` in lakhs)
Paticulars Equity securities
Opening Balance (1 April 2019) 31,410.19
Net change in fair value (unrealised) 6,113.83
Purchases -
Closing Balance (31 March 2020) 37,524.02

Transfer out of Level 3

There were no movement in level 3 in either directions during the year 2019-20 and 2018-19.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:
• Credit risk ;
• Liquidity risk ; and
• Market risk

i. Risk management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of the
Company’s risk management framework. The Company manages market risk through a Financial risk
management committee, which evaluates and exercises independent control over the entire process of
market risk management. The treasury department recommends risk management objectives and policies,
which are approved by Audit cum finance committee and Board of Directors. The activities of this department
include management of cash resources, implementing hedging strategies for foreign currency exposures,
borrowing strategies, and ensuring compliance with market risk limits and policies.
The Company’s risk management policies are established to identify and analyse the risks faced by the
Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and the
Company’s activities. The Company, through its training and management standards and procedures,
aims to maintain a disciplined and constructive control environment in which all employees understand
their roles and obligations.
The audit cum finance committee oversees how management monitors compliance with the company’s
risk management policies and procedures, and reviews the adequacy of the risk management framework
in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by
internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and
procedures, the results of which are reported to the audit committee.

194 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Company’s receivables from
customers.
The carrying amount of following financial assets represents the maximum credit exposure:
Trade and other receivables
The Company’s exposure to credit is influenced mainly by the individual characteristics of each customer.
However, management also considers the factors that may influence the credit risk of its customer base,
including the default risk of the industry and country in which customers operate.
The Revenue department has established a credit policy under which each new customer is analysed individually
for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered.
The Company’s review includes external ratings, if they are available, and in some cases bank references. Sale
limits are established for each customer and reviewed quarterly. Any sales exceeding those limits require
approval from the Board of Directors.
Goods are sold subject to retention of title clauses, so that in the event of non-payment the Company may have
a secured claim. The Company does not otherwise require collateral in respect of trade and other receivables.
The company establishes an allowance for impairment that represents its estimate of expected losses in
respect of trade and other receivables. The provision matrix of ECL at the end of reporting period is as follows.
Particulars Expected credit loss %
Within the credit Period 0.04%
1-90 days past due 0.38%
91-180 days past due 1.52%
181-270 days past due 5.49%
270-360 days past due 13.02%
360-450 days past due 25.77%
450-540 days past due 44.23%
540-630 days past due 61.84%
630-720 days past due 100.00%
More than 720 days past due 100.00%

Impairment
The ageing of trade and other receivables that were not impaired was as follows.
(` in lakhs)
Particulars Carrying amount
March 31, 2020 March 31, 2019
Neither past due nor impaired 79,143.72 85,482.38
Past due 1–30 days 11,633.16 5,917.81
Past due 31–90 days 36,361.45 46,759.92
Past due 91 days and above 1,36,958.03 1,08,793.27
2,64,096.36 2,46,953.37

Management believes that the unimpaired amounts that are past due by more than 30 days are still collectible
in full, based on historical payment behaviour and extensive analysis of customer credit risk, including underlying
customers’ credit ratings if they are available.

58TH ANNUAL REPORT 2019-20 195

 Notes to the Consolidated Financial Statements

Movement in expected credit loss allowance (` in lakhs)

Particulars Year ended Year ended
March 31, 2020 March 31, 2019
Balance at the beginning of the year 7908.78 7,992.40
Movement in the expected credit loss allowanceon trade receivables
calculated at lifetime expected credit losses Past due 31–90 days (37.18) (83.62)
7,871.60 7,908.78
During the years 2019-20 and 2018-19, impairment provision was reduced by ` 37.18 Lakhs and ` 83.62 Lakhs
respectively.
Cash and cash equivalents
The Company held cash and cash equivalents of ` 3404.47 at March 31, 2020 (` 4082.20 at March 31, 2019).
The cash and cash equivalents are held with approved scheduled banks.
Derivatives
The derivatives deals are done with AD category banks in OTC market and registered brokers in ETCD market.
iii. Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to
managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when
they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Company’s reputation.
Financing facilities: (` in lakhs)
Particulars As at As at
31-03-2020 31-03-2019
a) Secured cash credit, reviewed annually
- amount used 4,149.44 16,365.96
- amount unused 42,419.05 30,202.53
b) Secured term loan
- amount used 14,666.66 20,000.00
- amount unused - 30,000.00
c) Unsecured bill acceptance facility
- amount used 31,905.40 -
- amount unused - -
d) Unsecured commercial papers
- amount used 30,000.00 -
- amount unused 70,000.00 1,00,000.00
e) Unsecured working capital demand loan
- amount used 14,686.61 -
- amount unused 40,313.39 35,000.00
f) Unsecured Inter-Corporate Loan Facility
- amount used 54,000.00 70,500.00
- amount unused 46,000.00 29,500.00
g) Unsecured bank overdraft facility/WCDL Facility
- amount used 6,500.00 2.83
- amount unused 8,000.00 14,497.17

196 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts
are gross and undiscounted, and include estimated interest payments and exclude the impact of nettin g
agreements. (` in lakhs)
March 31, 2020 Contractual cash flows
Carrying Total 0-12 months 1-2 years 2-5 years More than
amount 5 years
INR
Non-derivative financial liabilities
Term loans from banks 14,666.66 14,666.66 5,333.33 5,333.33 4,000.00 -
Working capital loans from banks 1,41,241.45 1,41,241.45 1,41,241.45 - - -
Trade payables 43,567.46 43,567.46 43,567.46 - - -
Other current financial liabilities 24,421.43 24,421.43 24,421.43 - - -
Derivative financial liabilities
Derivative contracts used for hedging - - - - - -
Outflow 28.28 28.28 28.28 - - -

March 31, 2019 Contractual cash flows

Carrying Total 0-12 months 1-2 years 2-5 years More than
amount 5 years
Non-derivative financial liabilities
Term loans from banks 20,000.00 20,000.00 5,333.33 5,333.33 9,333.34 -
Working capital loans from banks 86,868.79 86,868.79 86,868.79 - - -
Trade payables 1,03,866.16 1,03,866.16 1,03,866.16 - - -
Other current financial liabilities 38,268.43 38,268.43 38,268.43 - - -
Derivative financial liabilities
Derivative contracts - - - - - -
Outflow - - - - - -
The gross inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to
derivative financial liabilities held for risk management purposes and which are not usually closed out before contractual
maturity. The disclosure shows net cash flow amounts for derivatives that are net cash-settled and gross cash inflow
and outflow amounts for derivatives that have simultaneous gross cash settlement.
iv. Market risk
Market risk is the risk that changes in market prices – such as foreign exchange rates, interest rates and equity prices
– will affect the Company’s income or the value of its holdings of financial instruments.Market risk is attributable to all
market risk sensitive financial instruments including foreign currency receivables and payables and long term debt.
The company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market
value of company’s investments. Thus, company’s exposure to market risk is a function of investing and borrowing
activities and revenue generating and operating activities in foreign currency. The objective of market risk management
is to control the financial risks associated with the Foreign Exchange/Currency rate movements through a sophisticated
Foreign Exchange Risk Management System.
Currency risk
The Company is exposed to currency risk on account of its import payables and borrowings in foreign currency. The
functional currency of the Company is Indian Rupee. The Company uses forward exchange contracts, Options and
futures to hedge its currency risk, most with a maturity of less than one year from the reporting date.

58TH ANNUAL REPORT 2019-20 197

 Notes to the Consolidated Financial Statements

The company is using derivative instruments which are not intended for trading or speculative purposes but for hedge
purposes to establish the amount of reporting currency required or available at the settlement date of certain payables
and receivables.
Exposure to currency risk
The currency profile of financial assets and financial liabilities as at March 31, 2020 and March 31, 2019 are as
below: (` in lakhs)
Particulars March 31, 2020 March 31, 2020 March 31, 2020 March 31, 2020
INR USD1 CAD1 Others1
Financial assets
Cash and cash equivalents 3,404.47 - - -
Other bank balances 1,361.43 - - -
Non-current investments 2,06,510.30 - 2,230.89 -
Current loans and advances 19,229.80 - - -
Trade and other receivables 2,60,234.50 3,841.98 - 19.88
Derivative assets - - - -
Other Non-Current financial assets 3,007.28 - - -
Other Current financial assets 964.21 - - -
4,94,711.99 3,841.98 2,230.89 19.88
Financial liabilities
Long term borrowings 9,333.33 - - -
Short term borrowings 1,09,336.05 31,905.40 - -
Trade and other payables 38,861.98 4,621.92 - 83.56
Derivative liabilities 28.28 - -
Other Current financial liabilities 28,989.39 5.43 - 759.94
1,86,520.75 36,561.03 - 843.50
(` in lakhs)
Particulars March 31, 2019 March 31, 2019 March 31, 2019 March 31, 2019
INR USD1 CAD1 Others1
Financial assets
Cash and cash equivalents 4,082.20 - - -
Other bank balances 2,754.25 - - -
Non-current investments 2,32,183.69 1,729.40 3,725.89 -
Current loans and advances 17,463.64 - - -
Trade and other receivables 2,46,474.80 478.57 - -
Derivative assets - 9.40 - -
Other non current financial assets 4,419.15 - - -
Other Current financial assets 470.32 - - -
5,07,848.05 2,217.37 3,725.89 -
Financial liabilities
Long term borrowings 14,666.67 - - -
Short term borrowings 86,868.79 - - -
Trade and other payables 55,430.93 48,307.68 15.24 112.32
Other Current financial liabilities 43,601.76 - - -
2,00,568.15 48,307.68 15.24 112.32
1 - The figures are in INR Equivalent of respective currency

198 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

The following significant exchange rates have been applied during the year.
Year-end spot rate
INR March 31, 2020 March 31, 2019
USD 75.39 69.17
CAD 53.49 51.83
Sensitivity analysis
A reasonably possible strengthening (weakening) of the Indian Rupee against US dollars at March 31 would
have affected the measurement of financial instruments denominated in US dollars and affected equity and
profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest
rates, remain constant and ignores any impact of forecast sales and purchases.
(` in lakhs)
31-Mar-20 31-Mar-19
Effect in INR Strengthening Weakening Strengthening Weakening
10% movement
USD (1,424.11) (1,132.77) 2,324.26 (645.36)
CAD 223.09 (223.09) 372.59 (372.59)

Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate
risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the
interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing
investments will fluctuate because of fluctuations in the interest rates.
Exposure to interest rate risk
Company’s interest rate risk arises from borrowings. Company has long term borrowings at variable rate of
interest.The interest rate profile of the Company’s interest-bearing financial instruments as reported to the
management of the Company is as follows.
(` in lakhs)
Particulars Nominal amount in INR
March 31, 2020 March 31, 2019
Variable-rate instruments
Financial assets - -
Financial liabilities 14,666.67 20,000.00
Total 14,666.67 20,000.00
Sensitivity analysis
A reasonably possible strengthening (weakening) of the Interest Rate would have affected the finance cost,
equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain
constant.
31-Mar-20 31-Mar-19
Effect of interest rate Strengthening Weakening Strengthening Weakening
1% movement
Interest cost 146.67 (146.67) 200.00 (200.00)
Capital Management
The Company manages its capital to ensure that it will be able to continue as a Going Concern while maximising
the return to stakeholders through optimisation of the Debt and Equity Balance.

58TH ANNUAL REPORT 2019-20 199

 Notes to the Consolidated Financial Statements

Further, the Company is also subject to externally imposed capital requirement as part of its debt covenant for
Term Loan for Melamine III plant, viz maintaining minimum Net Fixed Assets Coverage Ratio (of Melamine III
Plant Assets) of 1.25 times throughout the currency of the loan.
The Company manages its capital structure and makes adjustments to it in light of changes in economic
conditions and the requirements of the financial covenants. The Company monitors capital by computing the
above ratios on an annual basis and ensuring that the same is in Compliance with the requirements of the
Financial Covenants.
(` in lakhs)
Particulars INR
March, 2020 March, 2019
Net Fixed Assets (Melamine-III) 77,295.70 80,546.62
Total Debt (Melamine-III) 14,666.67 20,000.00
Net Fixed Asset Coverage Ratio 5.27 4.03

42. Research & Development Expenses (` in lakhs)

Particulars Year end 31st Year end 31st
March, 2020 March, 2019
Capital* 28.66 20.83
Recurring** 1,014.81 906.34
Total 1,043.47 927.17
*Capital Expenses included in PPE Note No. 5 28.66 20.83
**Recurring Expenses included in
Note No. 33 Employee Benefit expenses 1,001.68 895.91
Note No. 35 Other expenses 13.13 10.43

43. Corporate Social Responsibility (` in lakhs)

Particulars Year end 31st Year end 31st
March, 2020 March, 2019
Prescribed CSR expenditure @ 2% 990.13 931.02
Actual expenditure 990.00 1,101.49

44. Details on derivative instruments and unhedged foreign currency exposure

(I) (a) Forward exchange contracts and options (being derivative instruments), which are not intended for trading
or speculative purposes but for hedge purposes to establish the amount of reporting currency required or
available at the settlement date of certain payables and receivables.
(i) Outstanding forward exchange contracts entered into by the Company as on 31 March, 2020
Currency Amount (in Mn) Buy / Sell Cross currency
USD 0.00 Buy Rupees
USD (4) Buy Rupees
Note: Figures in brackets relate to the previous year
(b) Currency Futures (other than forward exchange contracts stated above) which are not intended for trading
or speculative purposes but for hedge purposes to hedge against fluctuations in changes in exchange
rate.
Currency Amount (in Mn) Buy / Sell Cross currency
USD 44.00 Buy Rupees
USD (48.00) Buy Rupees
Note: Figures in brackets relate to the previous year

200 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

45. Leases
(i) The Company has taken various warehouses, godowns, guesthouses and office premises under operating
lease or rental agreements. Effective 1st April, 2019, the company has adopted Ind AS 116 and applied
to its leases, retrospectively, with the cumulative effect of initially applying the standard on the date of
initial application (April 01, 2019). Accordingly, the Company has not restated comparative information
and recognized right-of-use assets at an amount equal to the lease liability.Refer Note 5(ii) for details of
right-of-use assets and Note 26 for details of Lease Liability. Interest on lease liability ` 42.86 Lakhs in FY
2019-20 (Nil in FY 2018-19) has been included in Finance Costs and depreciation on right-of-use assets
has been included in Depreciation and amortization expense for the year.
(ii) Rent income includes lease rentals received towards office premises and land leased out for gas station.
Such operating lease is generally for a period of three to four years. There are no restrictions imposed by
lease arrangements.

46. Ind As 115 : Revenue from Contracts with Customers

The Company generates revenue primarily from manufacturing of Fertilizers and Chemical Products. The
Company has recognised revenue by satisfying its performance obligations at a point of time basis. The
revenue from contracts with customers to the amounts disclosed as total revenue are as under:
Particulars Year end 31st Year end 31st
March, 2020 March, 2019
Revenue from Contract with Customers 5,33,811.79 5,92,585.34
Revenue from Subsidy from Government 2,45,986.00 2,56,482.00
Total Revenue 7,79,797.79 8,49,067.34
The disaggregation of Total Revenue is as under:
(A) Revenue – Segment-wise
Particulars Year end 31st Year end 31st
March, 2020 March, 2019
Fertilizer Products 6,23,838.37 6,31,429.34
Industrial Products 1,55,959.42 2,17,638.00
Total Revenue 7,79,797.79 8,49,067.34
(B) Revenue – Activity-wise
Particulars Year end 31st Year end 31st
March, 2020 March, 2019
Revenue generated from Manufacturing Activity 5,90,650.92 6,07,243.78
Revenue generated from Trading Activity 1,89,146.87 2,41,823.56
Total Revenue 7,79,797.79 8,49,067.34
(C) Contract Liability:
Particulars Year end 31st Year end 31st
March, 2020 March, 2019
Opening Balance of Contract Liability 1,551.08 1,165.01
Revenue Recognised from the opening balance of contract liability 1,551.08 1,165.01
Current year Contract liability - Carried Forward 1,737.60 1,551.08
Closing Balance of Contract Liability 1,737.60 1,551.08
The nature of services and its disclosure of timing of satisfaction of performance obligation is mentioned
in para 3.1 of Note No 3.There are no contract assets in the Balance Sheet.Contract Liabilities in the
Balance Sheet constitutes advance payments and billings in excess of revenue recognised. The Company

58TH ANNUAL REPORT 2019-20 201

 Notes to the Consolidated Financial Statements

expects to recognise such revenue in the next financial year.There were no significant changes in contract
liabilities during the reporting period except amount as mentioned in the table and explanation given
above.Under the payment terms generally applicable to the Company’s revenue generating activities,
prepayments are received only to a limited extent. Typically, payment is due upon or after completion of
delivery of the goods.
47. Disclosure as per regulation 34(3) and 53(f) of Securities and Exchange Board of India (listing obligations
and disclosures requirements) regulations, 2015:
Loans & Advances in the nature of loans to subsidiaries is ` Nil (PY: ` Nil)
48. Impact of Covid-19 Pandemic
In assessing the recoverability of receivables and certain investments, the company has considered internal
and external information up to the date of approval of these financial statements and economic forecasts.
Based on current indicators of future economic conditions, the company expects to recover the carrying amount
of these assets. The impact of the global health pandemic may be different from that estimated as at the date of
approval of these financial statements and the company will continue to closely monitor any material changes
to future economic conditions.
49. Other Matters
(i) With respect to Fibre Unit and Methanol plant, the Net Realizable Value is higher compared to its carrying
value as on March 31, 2020.
(ii) The previous year’s figures have been re-casted, regrouped and rearranged, whenever necessary to
confirm to this year’s classifications.
(iii) Balances of Sundry Creditors, Sundry Debtors, Loans & advances, etc. are subject to confirmation and
reconciliation.
(iv) At present production at Polymer Unit has been stopped from February, 2020 due to economic unviability.
Value in use of Polymer Unit is higher compared to its carrying value as on March 31, 2020.

50. Interest in other entities

a) Subsidiaries
The Company’s subsidiaries at 31 March 2020 are set out below. They have share capital consisting solely of
equity shares that are held directly by the Company, and the proportion of ownership interests held equals the
voting rights held by the Company. The country of incorporation or registration is also their principal place of
business.
Name of Entity Place of % of ownership interest Principal activities
business 31 March 2020 31 March 2019
GSFC Agrotech Limited (GATL) India 100.00% 100.00% Trading of Agro inputs
Gujarat Arogya Seva Pvt. Ltd. India 50.94% 50.94% Trading of generic
medicines
b) Associates
Set out below are the associates of the Company as at 31 March 2020 which, in the opinion of the directors, are
material to the Company. The entities listed below have share capital consisting solely of equity shares, which
are held directly by the Company. The country of incorporation or registration is also their principal place of
business, and the proportion of ownership interest is the same as the proportion of voting rights held.

202 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

(` in Lakhs)
Name of Entity Place of % of Relationship Accounting Carrying Amount Quoted fair values
business ownership method 31.03.2020 31.03.2019 31.03.2020 31.03.2019
interest
Vadodara Enviro Channel Limited India 28.57% Associate Equity Method 166.80 175.15 * *
(note 1)
Gujarat Green Revolution India 46.87% Associate Equity Method 7,802.60 6,878.09 * *
Company Limited (note 2)
Karnalyte Resources Inc (note 3) Canada 38.73% Associate Equity Method 2,230.88 3,725.88 1,224.93 1,778.62
Total 10,200.27 10,779.12 1,224.93 1,778.62
* Unlisted entity - no quoted price available
1 Vadodara Enviro Channel Limited was formed to administer the safe disposal of treated wastewater through
Effluent Channel Project.
2 Gujarat Green Revolution Company Limited (GGRCL) is appointed as a nodal agency by Government of Gujarat,
for passing on the subsidy received from the State and the Central Government for installation of Micro Irrigation
System (MIS) to farmers in the State of Gujarat.
3 Karnalyte Resources Inc is engaged in development of its property and planned construction of a prod uction
facility and development of a potash mine.
Commitments and contingent liabilities in respect of associates (` in Lakhs)
Particulars 31 March 2020 31 March 2019
Contingent liabilities - associates 6,080.18 3,349.41

Summarised financial information for associate

The tables below provide summarised financial information for those associates that are material to the Company.
The information disclosed reflects the amounts presented in the financial statements of the relevant associates and
not the Company’s share of those amounts. They have been amended to reflect adjustments made by the entity when
using the equity method, including fair value adjustments made at the time of acquisition and modifications for
differences in accounting policies. (` in Lakhs)
Particulars 31 March 2020 31 March 2019
KRI VECL GGRCL KRI VECL GGRCL
Total current assets 4096.07 3,060.75 55,814.47 5220.36 2,785.88 56,330.02
Total non-current assets 3104.06 3,248.32 1,261.07 2994.40 3,148.77 1,759.16
Total current liabilities 507.79 726.93 40,375.20 314.22 465.60 43,343.81
Total non-current liabilities 882.21 1,092.29 51.12 921.39 951.51 38.77
Adjustment-Member’ Capital Contribution
& Capital Reserve - 3,904.57 - - 3,904.57 -
Net Assets 5,810.13 585.28 16,649.22 6,979.14 612.97 14,706.60

58TH ANNUAL REPORT 2019-20 203

 Notes to the Consolidated Financial Statements

Reconciliation to carrying amounts (` in Lakhs)

Particulars 31 March 2020 31 March 2019
KRI VECL GGRCL KRI VECL GGRCL
Net assets 5,810.13 585.28 16,649.22 6,979.14 612.97 14,706.60
Company’s Share in % 38.73% 28.57% 46.87% 38.73% 28.57% 46.87%
Company’s Share in INR 2,250.30 166.80 7,803.72 2,703.06 175.15 6,893.19
Goodwill/Capital Reserve - - - 1,018.66 - -
Adjustment (19.42) - (1.12) 4.16 - (15.10)
Carrying amount 2,230.88 166.80 7,802.60 3,725.88 175.15 6,878.09

Summarised statement of profit and loss for the year ended on 31 March 2020 (` in Lakhs)
Particulars 31 March 2020 31 March 2019
KRI VECL GGRCL KRI VECL GGRCL
Revenue - 1,373.21 1,215.63 - 1,323.71 1,315.03
Profit for the year (1,613.63) (174.58) 1,964.62 (3,293.21) (362.72) 1,687.52
Other comprehensive income - - (5.90) - - 4.81
Total comprehensive income (1,613.63) (174.58) 1,958.72 (3,293.21) (362.72) 1,692.33
Dividend received - - 6.25 - - 6.25

204 58TH ANNUAL REPORT 2019-20

 Notes to the Consolidated Financial Statements

51. ADDITIONAL INFORMATION REQUIRED BY SCHEDULE III (` in Lakhs)

Name of the entity Net assets (total assets Share in profit or (loss) Share in other Share in total
in the group minus total liabilities) comprehensive income comprehensive income
As % of Amou nt As % of Amou nt As % of Amou nt As % of Amou nt
consolidated consolidated consolidated consolidated
net assets net profit/ OCI TCI
(loss)
Parent
Gujarat State Fertilisers and
Chemicals Limited
31 March 2020 97.85% 6,71,377.85 89.14% 9,769.24 100.00% (46,300.82) 103.36% (36,531.58)
31 March 2019 98.22% 7,19,069.09 98.68% 48,664.00 100.00% (38,210.56) 94.13% 10,453.45
Subsidiaries
Indian
GSFC Agrotech Limited
31 March 2020 0.65% 4,433.08 8.02% 879.44 0.00% - -2.49% 879.44
31 March 2019 0.29% 2,091.06 1.31% 647.19 0.00% - 5.83% 647.19
Gujarat Arogya Seva Pvt. Ltd.
31 March 2020 0.04% 262.10 0.10% 11.01 0.00% - -0.03% 11.01
31 March 2019 0.03% 252.28 0.00% (0.20) 0.00% - 0.00% (0.20)
Non Controlling Interest in
above subsidiaries
31 March 2020 -0.02% (128.52) 0.05% 5.40 0.00% - -0.02% 5.40
31 March 2019 -0.02% (123.71) 0.00% 0.10 0.00% - 0.00% 0.10
Associates (Investments as
per the equity method)
Indian
Vadodara Enviro Channel
Limited
31 March 2020 0.02% 166.80 -0.08% (8.35) 0.00% - 0.02% (8.35)
31 March 2019 0.02% 175.15 -0.21% (103.28) 0.00% - -0.93% (103.28)
Gujarat Green Revolution
Company Limited
31 March 2020 1.14% 7,802.60 1.88% 927.28 0.00% -2.77 -2.62% 924.51
31 March 2019 0.94% 6,878.09 1.81% 855.98 0.00% 2.25 7.73% 858.23
Foreign
Karnalyte Resources Inc.
31 March 2020 0.33% 2,230.88 -1.27% (624.97) 0.00% - 1.77% (624.97)
31 March 2019 0.51% 3,725.88 -1.58% (750.50) 0.00% - -6.76% (750.50)
Total
31 March 2020 100.00% 6,86,144.79 100.00% 10,959.05 100.00% (46,303.59) 100.00% -35,344.54
31 March 2019 100.00% 7,32,067.83 100.00% 49,313.29 100.00% (38,208.30) 100.00% 11,104.99
Signatures to Notes 1 to 51 forming the part of the Financial Statements.

In terms of our report attached

For T R Chadha & Co LLP Arvind Agarwal
Chartered Accountants Chairman and Managing Director
Firm Registration No: 006711N / N500028
Brijesh Thakkar V. D. Nanavaty V. V. Vachhrajani
Partner ED (Finance) & CFO Company Secretary
Membership No: 135556

Vadodara
18th June, 2020

58TH ANNUAL REPORT 2019-20 205

 ANNEXURE “A” TO THE CONSOLIDATED FINANCIAL STATEMENT

Form AOC-I
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of
Companies (Accounts) Rules, 2014)
Statement containing salient features of the financial statement of subsidiaries/associate
companies/joint ventures

Part “A”: Subsidiaries

(Information in respect of each subsidiary to be presented with amounts in `)
Amount in `
1 Serial No. 1 2
2 Name of the subsidiary GSFC Agrotech Limited Gujarat Arogya Seva
Pvt. Ltd.
3 Reporting period for the subsidiary concerned, if
different from the holding company’s reporting period Not Applicable Not Applicable
4 Reporting currency and Exchange rate as on the last
date of the relevant Financial year in the case of
foreign subsidiaries. Not Applicable Not Applicable
5 Share capital (as on 31.03.2020) 4,80,00,000 2,65,00,000
6 Reserves & surplus (as on 31.03.2020) 24,33,08,133 (2,89,721)
7 Total assets (as on 31.03.2020) 1,67,42,83,354 2,65,57,301
8 Total Liabilities (as on 31.03.2020) 1,23,09,75,221 3,47,022
9 Investments (as on 31.03.2020) 1,35,00,000 Nil
10 Turnover (FY 2019-20) 4,50,29,83,061 Nil
11 Profit before taxation (FY 2019-20) 11,75,53,887 14,26,622
12 Provision for taxation (FY 2019-20) 2,96,10,351 3,26,411
13 Profit after taxation (FY 2019-20) 8,79,43,536 11,00,211
14 Proposed Dividend (FY 2019-20) Nil Nil
15 % of shareholding (as on 31.03.2020) 100% (with nominees ) 50.94%

Notes: The following information shall be furnished at the end of the statement:

1 Names of subsidiaries which are yet to commence operations None

2 Names of subsidiaries which have been liquidated or sold during the year. None

In terms of our report attached

For T R Chadha & Co LLP Arvind Agarwal
Chartered Accountants Chairman and Managing Director
Firm Registration No: 006711N / N500028
Brijesh Thakkar V. D. Nanavaty V. V. Vachhrajani
Partner ED (Finance) & CFO Company Secretary
Membership No: 135556

Vadodara
18th June, 2020

206 58TH ANNUAL REPORT 2019-20

 ANNEXURE “A” TO THE CONSOLIDATED FINANCIAL STATEMENT (Contd.)

Part “B”: Associates and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures
Gujarat Green Vadodara Enviro Gujarat Data Karnalyte
Name of Associates
Revolution Limited Channel Limited Electronics Limited Resources Inc.
1 Latest audited Balance Sheet Date 31st March, 2019 31st March, 2019 Not available 31st
December,2019
Shares of Associates held by the
2
company on the year end
No. 12,50,000 14,302 1,15,000 1,63,34,558
Amount of Investment in Associates (`) 1,25,00,000 20 11,50,000 2,47,06,38,160
Extend of Holding % 46.87% 28.57% 23.00% 38.73%
Description of how there is Holding more than Holding more than Holding more than Holding more than
3 significant influence 20% of the total 20% of the total 20% of the total 20% of the total
capital capital capital capital
4 Reason why the associate is not Not Applicable Not Applicable Financial statements Not Applicable
consolidated are not available and
100% provision for
diminution in value of
investment has been
accounted in the
books of GSFC Ltd.
(i) Networth attributable to 68,93,19,414 2,16,66,538 Not available 24,09,99,378
5 Shareholding as per latest
audited Balance Sheet
(ii) Networth attributable to 78,03,72,635 1,67,22,389 Not available 22,50,29,656
Shareholding as per unaudited
Balance sheet as on 31/03/2020
(`)
Unaudited Profit / Loss for the FY 19,64,62,196 (1,74,58,278) Not available (16,13,63,498)
6
2019-20 (Rs.)

i. Considered in Consolidation (Rs.) Not available

19,64,62,196 (1,74,58,278) (16,13,63,498)

ii. Not Considered in Consolidation (Rs.) Not available -

- -
1. Names of associates or joint ventures which are yet to commence operations. None
2. Names of associates or joint ventures which have been liquidated or sold during the year. None

In terms of our report attached

For T R Chadha & Co LLP Arvind Agarwal
Chartered Accountants Chairman and Managing Director
Firm Registration No: 006711N / N500028
Brijesh Thakkar V. D. Nanavaty V. V. Vachhrajani
Partner ED (Finance) & CFO Company Secretary
Membership No: 135556

Vadodara
18th June, 2020

58TH ANNUAL REPORT 2019-20 207

 GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED

NOTES

208 58TH ANNUAL REPORT 2019-20