41st Annual Report 2002-03 GUJARAT STATE …gsfclimited.com/pdf/faq/AR 2002-03.pdf · GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED ... following seven Stock Exchanges : 1. Vadodara

GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED

BOARD OF DIRECTORS P K LAHERI Chairman

DR. MANJULA SUBRAMANIAM

SUDHA ANCHALIA

BALWANT SINGH

N R KRISHNAN UTI Nominee

S R VENGSARKER ICICI Bank Nominee

R S AGARWAL IDBI Nominee

A K LUKE Managing Director

EXECUTIVE DIRECTORS C R RAO

A K VIJAY KUMAR

GAUTAM SEN

M D BUCH

COMPANY SECRETARY V D NANAVATY

BANKERS Bank of Baroda

State Bank of India

Bank of India

Vijaya Bank

Central Bank of India

Dena Bank

Indian Bank

Indian Overseas Bank

HDFC Bank Ltd.

Punjab National Bank

STATUTORY AUDITORS M/s. Ghiya & Co., Jaipur

BRANCH AUDITORS M/s. K C Mehta & Co., Vadodara(Polymers & Fibre Units)

COST AUDITORS M/s. Diwanji & Associates, Vadodara

SOLICITORS M/s. Bhaishanker Kanga & Girdharlal

REGISTRARS & M/s. MCS LimitedTRANSFER AGENT Neelam Apartments, 1st Floor

88, Sampatrao ColonyBehind Standard Chartered BankProductivity Road, Vadodara - 390 007

REGISTERED OFFICE P. O. Fertilizernagar - 391 750District Vadodara, Gujarat

41st Annual Report 2002-03

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41ST ANNUAL REPORT 2002-03

FOR MEMBERS’ ATTENTION

1. With a view to comply with the provisions of theListing Agreements with the Stock Exchanges, theRegister of Members and the Share Transfer Booksof the Company will remain closed from Thursday,the 11th September, 2003 to Friday, the 26thSeptember, 2003 (both days inclusive).

2. Members are requested to quote Folio Numberor DP ID and Clients ID No. (in case of shares heldin demat forms) in all correspondence and alsoto bring with them the Attendance Card whichmay be submitted at the entrance duly signed.

3. Members who are registered under two or moreLedger Folios are requested to write to theRegistrars and Transfer Agents of the Companyfor consolidation, giving particulars of such Foliosand send relevant Share Certificates.

4. Those members who have not yet submitted theirold shares of Rs.100/- each for exchange of newequity shares of Rs.10/- each are requested to sendthe said shares to the Registrars & Transfer Agentsof the Company.

5. Shareholders of erstwhile Gujarat Nylons Ltd, whohave yet not surrendered their GNL equity sharecertificate/s are advised to surrender the sameimmediately to the Registrars & Transfer Agentsof the Company so as to enable the despatch ofconverted GSFC shares etc. in exchange thereofat the earliest.

6. Members holding shares in the DematerialisedForm are requested to intimate changes, if any,in respect of their Bank details, Mandateinstructions, Nomination, Power of Attorney,Change of Address, Change of Name etc. to theirDepository Participant (DP).

CONTENTS Page No(s)

Notice ........................................................................3

Directors’ Report ......................................................8

Corporate Governance Report .............................20

Management Discussion and Analysis Report ....26

Auditors’ Report .....................................................31

The Accounts ..........................................................34

Cash Flow Statement.............................................65

Statement Pursuant to Section 212 .....................66

GSFC Investment and Leasing Company Ltd. .....67

Consolidated Accounts ..........................................77

41st ANNUAL GENERAL MEETINGDate : 26th September, 2003Day : FridayTime : 9.00 a.m.Place : Fertilizernagar - 391 750

District Vadodara

7. The Company’s Equity Shares are listed on thefollowing seven Stock Exchanges :

1. Vadodara Stock Exchange Ltd.(Regional Stock Exchange)Fortune Tower, 3rd FloorSayajigunj, Vadodara - 390 005

2. The Stock Exchange, MumbaiPhiroze Jeejeebhoy Tower25th Floor, Dalal StreetMumbai - 400 001

3. The Stock Exchange, AhmedabadKamdhenu ComplexOpp. Sahajanand CollegePanjara PoleAhmedabad - 380 015

4. The Calcutta Stock Exchange Association Ltd.7, Lyons RangeKolkata - 700 001

5. The Delhi Stock Exchange Association Ltd.DSE House3/1 Asaf Ali RoadNew Delhi - 110 002

6. Madras Stock Exchange Ltd.“Exchange Building”P. B. No. 18311, Second Line BeachChennai - 600 001

7. National Stock Exchange of India Ltd.Exchange Plaza, 5th Floor, Plot No.C/1,G Block, Bandra Kurla ComplexBandra (East), MUMBAI - 400 051

The Company has paid annual Listing fees to eachof the above Stock Exchanges for the financialyear 2002-03.

8. Members are requested to send their queries, ifany, at least seven days in advance of the meetingso that the information can be made available atthe meeting.

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NOTICE is hereby given that the Forty-first Annual General MeetingForty-first Annual General MeetingForty-first Annual General MeetingForty-first Annual General MeetingForty-first Annual General Meeting of the Members of the Companywill be held at the Registered Office of the Company at 9.00 a.m. on Friday, the 26th September, 2003to transact the following business :

Ordinary Business

1. To receive, consider and adopt the Audited Accounts, Balance Sheet as at 31st March, 2003, Profit &Loss Account for the year ended on that date & the reports of Directors and Auditors thereon.

2. To appoint a Director in place of Dr. Manjula Subramaniam, who retires by rotation and being eligibleoffers herself for re-appointment.

3. To pass the following resolution, with or without modifications, as an Ordinary Resolution.Ordinary Resolution.Ordinary Resolution.Ordinary Resolution.Ordinary Resolution.

“RESOLVED that the Board of Directors of the Company be and are hereby authorized to fix theremuneration plus TA and out of pocket expenses, to be paid to the Statutory Auditors and BranchAuditors as may be appointed by the Comptroller and Auditor General of India to audit the accountsof the Company for the financial year 2003-04 at Corporate level at Head Quarters including its SikkaUnit and Fertilizernagar Plants and to audit the accounts of Polymers and Fibre Units of the Companyfor the financial year 2003-04, as the Board may deem fit and appropriate in their absolute discretion.”

Special Business

4. To consider and if thought fit, to pass the following resolution, with or without modifications, as anOrdinary Resolution.Ordinary Resolution.Ordinary Resolution.Ordinary Resolution.Ordinary Resolution.

“RESOLVED that subject to the provisions of Sections 198, 269, 309, 310 and 311 read with ScheduleXIII and other applicable provisions, if any, of the Companies Act, 1956, the Company hereby accordsits consent and approval to the appointment of Shri A K Luke, IAS as Managing Director of the Company,on the terms & conditions of remuneration and perquisites as set out in the explanatory statement annexedhereto.”

“FURTHER RESOLVED that the remuneration, benefits and perquisites as set out in the explanatorystatement shall be paid and allowed to him as minimum remuneration notwithstanding the absenceor inadequacy of profits in any year.”

“FURTHER RESOLVED that any revision/modification to the remuneration, perquisites or terms & conditionsas may be communicated by the Government of Gujarat from time to time shall be applicable.”

“FURTHER RESOLVED that so long as Shri A K Luke functions as the Managing Director of the Company,he shall not be paid any sitting fees for attending the meetings of the Board of Directors or Committeesthereof.”

5. To consider and if thought fit, to pass the following resolution, with or without modifications, as a SpecialSpecialSpecialSpecialSpecialResolutionResolutionResolutionResolutionResolution.

“RESOLVED THAT pursuant to the provisions of the Clauses 4,5,6 and other applicable provisions of theSecurities and Exchange Board of India (Delisting of Securities) Guidelines, 2003 (hereinafter referred toas the “Delisting Guidelines”) and subject to the provisions of the Companies Act, 1956 and SecuritiesContracts (Regulation) Act, 1956 (including any statutory modification(s) or re-enactment thereof for thetime being in force), and the Rules framed thereunder, Listing Agreements, and all other applicable laws,rules, regulations, and guidelines and subject to such approvals, consents, permissions or sanctions ofthe Securities and Exchange Board of India, Stock Exchanges where the shares of the Company are listedand any other appropriate authorities, institutions or regulators as may be necessary and subject to suchconditions and modifications, as may be prescribed or imposed by any authority while granting such

NOTICE

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NOTES

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXYTO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER.

2. The present Statutory Auditors M/s. Ghiya & Co., Chartered Accountants,Branch Auditors for Polymers& Fibre Units, M/s. K C Mehta & Co., Chartered Accountants, appointed by the Comptroller & AuditorGeneral of India will retire at the conclusion of Forty-first Annual General Meeting. The Auditors ofthe Company for the current financial year will be appointed by the Comptroller & Auditor Generalof India as the Company continues to attract provisions of Section 619-B read with the provision ofSection 619(2) of the Companies Act, 1956.

3. Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of SpecialBusiness is annexed hereto.

4. As required under the Rule 4A of the Companies Unpaid Dividend (Transfer to General Revenue Accountof Central Government) Rules, 1978, the Company hereby informs its Members that all unpaid/ unclaimeddividends declared for and upto the Financial Year ended 31st March, 1994 have been transferred tothe General Revenue Account of the Central Government. Members who have not encashed the dividendwarrants for the said period are requested to claim the amount from the Registrar of Companies (Gujarat),Housing Board Building, Opp. Roopal Park Society, Ankur Char Rasta, Naranpura, Ahmedabad - 380 013.

Consequent upon amendment to Section 205A of the Companies Act, 1956 and introduction of Section205C by the Companies (Amendment) Act, 1999, the amount of dividend for the subsequent yearsremaining unpaid or unclaimed for a period of seven years from the date of transfer to Unpaid DividendAccount of the Company shall be transferred to the Investor Education and Protection Fund set upby the Government of India and no payments shall be made in respect of any such claims by the Fund.Accordingly, the unclaimed dividend for the financial year ended 31-03-1995 has been transferred tothe said fund.

Members who have not yet encashed their dividend warrant(s) for the financial year ended 31-03-1996onwards, are requested to make their claims to the Company accordingly, without any delay.

5. The terms and conditions of the appointment of Managing Director and other documents referred toin the notice are available for inspection at the Registered Office of the Company on any day (notbeing the public holiday) from 09.30 A.M. to 11.30 A.M.

6. Relevancy of questions and the order of speakers at the meeting will be decided by the Chairman.

approvals, permissions and sanctions, which may be agreed to by the Board of Directors of the Company(hereinafter referred to as “the Board”, which term shall be deemed to include any Committee thereoffor the time being exercising the powers conferred on the Board by this Resolution), the consent ofthe Company be and is hereby accorded to the Board to delist the Equity Shares of the Company, whichshall be voluntary in nature and without giving the exit opportunity to the investors, from all or anyof the Stock Exchanges at Ahmedabad, Chennai, Kolkata and Delhi at such time or times as the Boardmay decide.”

“FURTHER RESOLVED THAT the Board of Directors of the Company be and is hereby authorised to seekvoluntary delisting and take all necessary actions in this regard and to do all such acts, deeds, mattersand things as may be necessary for the purpose of giving effect to the above resolution.”

By Order of the Board

Ahmedabad V D Nanavaty29th July, 2003 Company Secretary

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ANNEXURE TO NOTICE

EXPLANATORY STATEMENT PURSUANT TO SECTION 173 OF THE COMPANIES ACT, 1956

In conformity with the provisions of Section 173 of the Companies Act, 1956, the following ExplanatoryStatement sets out all the material facts relating to the Special Business mentioned in the accompanyingNotice and should be taken as forming part of the Notice.

Item No. 4

As per Notification No. AIS/35/2003/16/G dated 5th May, 2003 and followed by Resolution No. GSF-11-2001-3940-E dated 9th May, 2003 Shri A K Luke, IAS was appointed as “Government Director” and ManagingDirector. He assumed charge on 07-05-2003.

Further the Govt. of Gujarat vide Resolution No. GSF-11-2003-1782-E dated 5th June, 2003 had prescribedthe terms & conditions of the remuneration for the above appointment and the same were recommended& approved by the Remuneration Committee & Board of Directors.

In terms of Schedule XIII and other applicable provisions of the Companies Act, 1956, the appointment ofShri A K Luke as Managing Director and payment of remuneration to him requires the consent and approvalof the Company in General Meeting.

The terms & conditions of appointment and the particulars of remuneration and perquisites paid/payableto Shri A K Luke are as follows :-

(1) Period :

From the date he assumed charge as Managing Director i.e. from 07-05-2003 till further order providedthat duration of deputation will not exceed a period of five years.

(2) Pay :

During the period of deputation Shri A K Luke will be eligible to draw the pay @ Rs. 22,400/- permensem in the pay scale of Principal Secretary i.e. Rs. 22,400-525-24,500. He will be given furtheroption in case there is any change in the substantive notional pay in his parent cadre.

(3) Deputation Allowance :

While on deputation he will be eligible to draw deputation allowance wherever admissible in casehe has given option to draw his grade pay of the cadre however he will not be eligible to drawdeputation allowance if he opts, for pay of the post of the Company.

(4) Dearness Allowance :

If he has given option to draw his grade pay of the cadre post alongwith deputation allowance, ifany, he will be eligible to draw dearness allowance at the Central Government rates. However, incase he has opted for pay of the post in the Company, this allowance would be admissible as perthe existing rules of the Company.

(5) City Compensatory Allowance :

If he has opted for his grade pay of the cadre post, the city compensatory allowance would be applicableas per the Central Government Rules otherwise this will be regulated in accordance with the existingprovisions of the Company.

(6) House Rent Allowance :

If he has opted for drawing his grade pay of the cadre, he would be required to pay 10% of thepay plus DA, DP and CCA or the prescribed license fee for similar class of accommodation in theGovernment, whichever is lower. However, if he has opted to draw pay scale of the post of the Company,this will be regulated as per existing rules of the Company.

(7) Transfer T.A./Joining Time :

He will be entitled to T.A. and Joining Time, both on joining the post of deputation and on reversion,under the rules of the Company, which shall not be inferior to the relevant provisions of the AISRules. The expenditure on this account will be borne by the Company.

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(8) TA/DA for journey on duty :

He will be paid Travelling Allowance and Daily Allowance by the Company under its own rule forthe journey undertaken by him in connection with the official work whether in India or abroad whichshall not be inferior to the relevant provisions of the All India Service Rules.

(9) Medical facilities :

The Company shall afford him medical facilities which shall not be inferior to those which are admissibleto an All India Service Officer of the same status under the Central Government rules for the same.

(10) Leave and Pension :

During the period of deputation, he will continue to be governed by the AIS (Leave) Rules, 1955and the All India Services (DCRB) Rules, 1958. The entire expenditure in respect of the leave takenduring deputation period and at the end of deputation shall be borne by the Company. He shallnot be allowed to join any of the pension schemes of the Company.

(11) Provident Fund :

During the period of the deputation, he will continue to subscribe to the AIS Provident Fund Schemeto which he was subscribing at the time of proceeding on deputation in accordance with the rulesof such fund.

(12) Conduct Discipline and Appeal Rules :

He shall continue to be governed by the All India Services (Conduct) Rules, 1968 and All India Services(Discipline and Appeal) Rules, 1969.

(13) Leave Travel Concession :

The Company shall allow Leave Travel Concession to him as admissible under its own rules providedthese are not inferior to those admissible to him under the AIS (L.T.C.) Rules, 1975. The wholeexpenditure in this regard shall be met by the Company which is subject to the condition that hebefore proceeding on deputation had not availed of concession during the particular block years periodof his deputation.

(14) Disability Leave :

The Company will be liable to pay leave emoluments in respect of disability leave, if any, grantedto him on account of any disability incurred in and through foreign service even though such disabilitymanifests itself after termination of deputation. The relevant AIS rules will be applicable in such cases.

(15) Leave Salary / Pension Contributions :

The Company will pay to the Government, leave salary and pension contributions at the rates of theparent cadre in force from time to time in accordance with the orders issued by the President underF.R.116. The payment of these contributions must be paid annually within 15 days from the end ofeach financial year or at the end of deputation if the deputation expires before the end of a financialyear. Delayed payment will attract liability of payment of interest in terms of the instructions containedin the Ministry of Finance’s Notification No.F.1(1)-E.III/83 dated 10th August, 1983, as amended fromtime to time. Pending intimation of the rates of leave salary and pension contributions by the concernedAccountant General, the Company shall pay leave salary and Pension contribution provisionally at theprescribed rates.

(16) Group Insurance :

If he has not opted out of the Central Govt. Employees Group Insurance Scheme 1980, before 31.12.1981,the said scheme as appended to the schedule to the AIS (Group Insurance) Rules, 1981 shall be applicableto him. In that case, an amount be deducted from his salary as per prescribed rates as subscriptiontowards the Insurance scheme shall be remitted to the concerned Accountant General by the Company.If at any time the recovery of subscription falls in arrears, the same shall be recovered with interestadmissible under the scheme on the accretions to the saving fund.

(17) Residuary Matters :

In all matters relating to conditions of service and benefits/facilities and perquisites in the Companynot covered above, he shall be governed by the existing rules, regulations and orders of the Company.

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(18) The above mentioned terms & conditions would be applicable till Shri A K Luke, IAS remains ondeputation with the Company. On reversion from deputation, he will be governed by the relevantrules laid down for All India Service Officers.

The appointment of Shri A K Luke and the remuneration and perquisites payable to him are in accordancewith Schedule XIII to the Companies Act, 1956. Shri A K Luke has long experience in Government Services.Accordingly, the Directors commend this resolution for your consent and approval.

The above terms & conditions may be treated as an abstract of the terms & conditions of appointmentof Shri A K Luke pursuant to Section 302 of the Companies act, 1956.

None of the Directors except Shri A K Luke is concerned or interested in passing this resolution.

Item No. 5The Securities and Exchange Board of India (SEBI) has issued the Securities and Exchange Board of India(Delisting of Securities) Guidelines, 2003 (hereinafter referred to as the “Delisting Guidelines”) incorporating,among others, provisions for delisting of securities of a body corporate voluntarily by a promoter or anacquirer or any person other than the Stock Exchanges.

At present, the Equity Shares of the Company are listed on the following seven Stock Exchanges :

(i) Vadodara Stock Exchange Ltd. (Regional Stock Exchange) (VSE)

(ii) The Stock Exchange, Mumbai (BSE)(iii) The Stock Exchange, Ahmedabad (ASE)

(iv) The Calcutta Stock Exchange Association Ltd., Kolkata (CSE)

(v) The Delhi Stock Exchange Association Ltd., New Delhi (DSE)

(vi) Madras Stock Exchange Ltd., Chennai (MSE)(vii) National Stock Exchange of India Ltd., Mumbai (NSE).

The Company’s Equity Shares are one of the scrips which the SEBI has specified for settlement only indematerialized form by all investors, since January, 2000.

With the extensive networking of BSE and NSE as also the extension of BSE/NSE terminals to other citiesas well, investors have access to on-line dealings in Equity Shares of the Company across the country. Thebulk of the trading in the Company’s equity shares takes place on the BSE and NSE which have nationwidetrading terminals and the depth and liquidity of trading in the Company’s Equity Shares on all the otherStock Exchanges are not significant.

The Company has proposed this resolution, as part of its cost reduction measures, which will enable it todelist its equity shares at an appropriate time in future, from all or any of the following Stock Exchanges :The Stock Exchange, Ahmedabad;

The Calcutta Stock Exchange Association Ltd., Kolkata;

The Delhi Stock Exchange Association Ltd., New Delhi; and

Madras Stock Exchange Ltd., Chennai.As per the Delisting Guidelines, the Company can delist it shares from ASE, CSE, DSE and MSE with theapproval of Members by passing a Special Resolution, without providing an exit opportunity, provided thatthe shares will continue to be listed on a stock exchange having nationwide trading terminals. Accordingly,Member’s approval is being sought by a Special Resolution for enabling voluntary delisting of its securitiesfrom the said Stock Exchanges.

The proposed delisting of the Company’s Equity Shares from the said Stock Exchanges, as and when it takesplace, will not affect the investors adversely. The Company’s Equity Shares will continue to be listed onBSE, NSE and VSE. The delisting will take effect after all approvals, permissions and sanctions are received.The exact date on which delisting will take effect will be suitably notified at that time.

None of the Directors of the Company are, in any way, concerned or interested in this Resolution.

By Order of the Board

Ahmedabad V D Nanavaty29th July, 2003 Company Secretary

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DIRECTORS’ REPORTToThe Members,

Your Directors hereby present the 41st Annual Report and audited Accounts of the Company for the yearended 31st March, 2003.

FINANCIAL RESULTS(Rs.in Crores)

Particulars 2002-03 2001-02

1. Gross Sales 1935.23 2035.23Less : Excise Duty Recovered 98.71 80.80Net Sales 1836.52 1954.43

2. Other Income 50.48 47.273. Total Revenue 1887.00 2001.704. Less : Operating Expenses 1787.00 1776.095. Operating Profit 100.00 225.616. Less : Interest 170.76 176.607. Gross Profit (70.76) 49.018. Less : Depreciation 142.37 136.519. Balance (213.13) (87.50)10. Prior Period Adjustment (15.15) 0.0511. Profit/(Loss) Before tax & Exceptional items (228.28) (87.45)12. Taxation - Current Taxation (0.02) (0.02)

- Deferred Tax (net) — 20.5913. Profit/(Loss) after taxes but before Exceptional items (228.30) (66.88)14. Exceptional items (162.54) 18.8215. Profit/(Loss) after Exceptional items (390.84) (48.06)16. Opening Balance of Profit & Loss Account –– —17. Excess provision for taxation written back 0.00 0.0218. Investment Allowance Reserve written back — 19.1019. Debenture/Bond Redemption Reserve written back 51.38 —20. Balance in Profit & Loss Account (339.46) (28.94)21. Transfer from General Reserve 339.46 28.94

22. Balance in Profit & Loss Account –– —

The operating profit for the year worked out to Rs. 100 crores as against Rs.225.61 crores in the previousyear. Higher prices of input materials and lower realisation of finished products specially in fertilizers arethe main factors affecting operating profit. The price realisation of Urea was affected due to downwardadjustment in retention price on account of 7th & 8th pricing period and coverage of Ammonia-4 plantunder retention price scheme.

DIVIDEND

In view of the losses, your Directors are unable to recommend any dividend for the year under report.

CURRENT PERFORMANCE

During the first quarter of the current financial year 2003-04, production of Caprolactam was higher by4%. Both the Melamine plants were under operation during the quarter. In case of industrial products,sales turnover of Caprolactam, Melamine and Polymer products increased due to better volumes and higherprice realization. The production and sales of fertilizer has been lower for the first three months. Theoperating profit of the Company improved from Rs. 28.78 crores in April-June 2002 to Rs. 55.79 crores in

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April-June, 2003. The Company’s net loss for the first quarter of 2003-04 of Rs. 28.44 crores is lower byRs. 19.73 crores when compared the loss of Rs. 48.17 crores in the first quarter of the previous year. Duringthe period April-June, 2003, the Company posted a cash profit of Rs. 8.40 crores as against a cash lossof Rs. 13.76 crores in the corresponding quarter of the previous year.The Company has received the favourable orders from CIT (Appeals), Baroda in the month of July, 2003and on receipt of the effect order from Income Tax Officer, our income tax liability of Rs. 115.59 croresshown in 11(A) of Schedule-22 (Notes on Accounts) is to be fully vacated.

UNUSED IDLE ASSETS

During the year under review, your Company disposed off idle assets viz. Splitting Machinery and realisedRs. 75 lacs.

RELIEF UNDERTAKINGThe Government of Gujarat has declared your Company as a relief undertaking under The Bombay ReliefUndertaking (Special Provisions) Act, 1958 for a period of 12 months effective from 2-11-2002. The Govt.of Gujarat directed that except in case of Government dues in relation to the Company, any rights, privileges,obligations, liabilities (other than those liabilities etc. towards its employees) occurred or incurred beforethe undertaking is declared as relief undertaking and any remedy for the enforcement thereof shall besuspended and proceedings relating thereto pending before any Court, Tribunal, Officer or Authority shallbe stayed during one year commencing from 2-11-2002.

CORPORATE DEBT RESTRUCTURING (CDR)

The Cash-Flow of the Company has been under severe pressure since last few years mainly due to costover run in the Ammonia Project, huge recovery of past subsidies by FICC, market constraints and lossesduring the previous year and the year under report. In the absence of corrective measures at this criticaljuncture by all the stakeholders, the cash-flow deficit may severely impact the sustained viability of theoperations of the Company. Moreover, considering the performance for the F.Y. 2002-03 there is an imminentneed to provide certain relief by main stakeholders of the Company i.e. Promoters and Lenders to revivethe operation and ensure serviceability of the debt obligation in future.

The Reserve Bank of India instituted Corporate Debt Restructuring Mechanism for restructuring the debtsof the Corporates facing financial difficulties due to certain internal and external factors. The Companywill submit a comprehensive financial restructuring plan to the CDR Cell very shortly. The Company hasalready submitted the Information Memorandum (IM) for the above purpose to all the lenders.RETENTION PRICE FOR UREA

The Government of India (GOI) had announced in June 2002, the new parameters of the retention Pricefor Urea for the 7th & 8th Pricing periods commencing from 01.07.1997 and 01.04.2000 respectively. In thesaid pricing periods, the consumption norms and normative level of capacity utilization are further tightenedand the vintage allowance is withdrawn in a phased manner. Moreover, the introduction of the newparameters with retrospective effect has caused severe financial impact.

With effect from 01.04.2003, the old retention price scheme is replaced by New Fertilizer Policy recommendedby Expenditure Reforms Commission (ERC) under Groupwise Concession Scheme. The main thrust of the newpolicy is to move away from the unit specific retention price support to group pricing. Now, all the Unitsare divided under these groups based on the age of the plants and feed stock they use. The retentionprice is fixed as a Group Weighted Average under this policy and this has caused adverse impact on theCompany. The new policy also envisages gradual de-regularization leading to full de-control by April 2006.

CORPORATE GOVERNANCEPursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion andAnalysis Report, Corporate Governance Report and Auditors’ Certificate regarding compliance of conditionsof Corporate Governance are made a part of the Annual Report.

FIXED DEPOSITS

As on 31st March, 2003 the repayment/renewal of 880 deposits amounting to Rs. 74.39 lakhs could notbe made for want of instructions thereof from the depositors. Letters were sent to the concerned deposit-holders seeking their instructions. Till the date of this report, 394 deposits amounting to Rs. 28.34 lakhshave been repaid/renewed.

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INSURANCEAll properties and insurable interests of the Company, including buildings, plant & machinery and stockshave been insured. As required under the Public Liability Insurance Act, 1991, your Company has takenthe necessary insurance cover.ISO ACCREDITATIONOn successful completion of re-certification audit of ISO 9001:2000 Quality Management System conductedin the month of December, 2002, GSFC Fertilizernagar complex has received a Certificate of approval validtill December 2005 for the scope of “Manufacture and Marketing of Caprolactam (Flakes & Crystals), MEK-Oxime, Melamine, Sulphuric Acid, Oleum, Ammonia, Argon, CO2, Urea including associated offsites andutilities” from M/s. TUV India Pvt. Ltd.Your Compamy is in process of getting ISO 14001 Environment Management System Certification forFertilizernagar complex.Your Company is also in process of getting ISO 9001 Quality Management System Certification for its SikkaUnit.SAFETY, HEALTH AND ENVIRONMENTYour Company continues to give priority in the field of Safety, Health and Environment. Your Companyhas been awarded a rotating shield and certificate as “Winner” for achieving lowest Disabling Injury Index(DII) based on safety performance for the year 2000 as well as a ‘Certificate of Merit for more than 2million accident free manhours. Both the awards are for the category “I” (Fertilizer Industry) and Group“A” (Industry employing more than 1000 employees). These awards are given jointly by Gujarat Safety Counciland Factory Inspectorate.In order to ensure continual improvement and to demonstrate your Company’s commitment for continualimprovement in all safety activities and programmes followed, your Company’s Safety and Health Policyhas been updated.SUBSIDIARYThe audited Statement of Accounts of GSFC Investment and Leasing Company Ltd., together with the reportsof the Directors and Auditors for the year ended March 31, 2003, as required under Section 212 of theCompanies Act, 1956, is annexed. As required by Accounting Standard 21 on Consolidation of Accounts,Consolidated Accounts of your Company with that of above subsidiary also forms part of this Annual Report.INFORMATION REGARDING CONSERVATION OF ENERGY, ETC., AND PARTICULARS OF EMPLOYEESInformation required under Section 217 (1)(e) of the Companies Act, 1956, read with Rule (2) of the Companies(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and information as per Section217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 asamended from time to time, are given in Annexures “A” & “B” respectively forming part of this report.DIRECTORATECHAIRMANDr. K D Jeswani resigned as Chairman/Director of the Company and Shri Ashok Narayan, IAS, who wasnominated as “Govt. Director” had been appointed as Chairman of the Board with effect from 27-1-2003.Shri P K Laheri, IAS, Chief Secretary to the Govt. of Gujarat who was nominated as “Govt. Director” viceShri Ashok Narayan had been appointed as Chairman of the Board of Directors with effect from 14-7-2003.MANAGING DIRECTOREffective from 7-5-2003 Shri A K Luke, IAS assumed charge as Managing Director of the Company vice ShriBalwant Singh. Accordingly, resolutions relating to the terms & conditions of his appointment and paymentof remuneration and perquisites are placed before you for approval.CHANGE IN DIRECTORSHIPShri A D Desai resigned as a Director of the Company with effect from 1-11-2002. Shri Balwant Singh, IASwas appointed in the casual vacancy of Shri A D Desai effective from 27-6-2003.Shri S G Mankad, IAS resigned as a Director with effect from 6-1-2003 and in his casual vacancy Shri CK Koshy, IAS was appointed as a Rotational Director with effect from 30-3-2003. Shri C K Koshy, IAS resignedas a Director and in his vacancy Smt. Sudha Anchalia, IAS was appointed from 27-6-2003.Shri Ashok Bhavsar resigned as a Director of the Company with effect from 31-1-2003.Consequent upon retirement of Shri G Subba Rao from the services of the Govt. of Gujarat and as desiredby the Govt. of Gujarat, he ceased to be a Director of the Company with effect from 29-7-2003.

11

Nomination from IDBIThe nomination of Dr. K Kameswara Rao was withdrawn by the IDBI and in his place Shri R S Agarwalwas nominated effective from 14-11-2002.In pursuance of the provisions of Article 170 of the Articles of Association of the Company as also theprovisions of the Companies Act, 1956, Dr. Manjula Subramaniam will retire by rotation at this Annual GeneralMeeting and being eligible, has offered herself for re-appointment.Your Directors place on record their deep appreciation of the valuable services rendered by the outgoingDirectors and take this opportunity to welcome the new Directors.DIRECTORS’ RESPONSIBILITY STATEMENTAs required under Section 217 of the Companies Act, the Directors hereby confirm that :(i) In the preparation of the annual accounts, the applicable accounting standards had been followed

alongwith proper explanation relating to material departures.(ii) The accounting policies followed in the preparation of the annual accounts have been consistently applied

except where otherwise stated in the notes on Accounts. The judgement and the estimates in thepreparation of annual accounts have been made on prudent and reasonable basis so that the AnnualAccounts give a true and fair view of the state of affairs of the Company, at the end of the financialyear and of the loss of the Company for the year under review.

(iii) The Directors have taken sufficient and proper care for the maintenance of adequate accounting records,in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Companyand for preventing and detecting fraud and other irregularities.

(iv) The Directors have prepared the accounts on a ‘going concern’ basis.AUDITORSThe Company continues to attract the provisions of Section 619-B of the Companies Act, 1956. The Comptrollerand Auditor General of India under his letter No. CA V/COY/GUJARAT & GSFC(2)/32 dated 27-12-2002,appointed M/s. Ghiya & Co., Chartered Accountants, Jaipur as Statutory Auditors of the Company, to auditthe accounts of the Company including its Sikka Unit and M/s. K C Mehta & Co., Chartered Accountants,Vadodara as Branch Auditors, to audit the accounts of its Polymers Unit and Fibre Unit for the year ended31st March, 2003. Auditors for the current year 2003-04 are also to be similarly appointed by the Comptroller& Auditor General of India. Pursuant to Section 224(8)(aa) of the Companies Act, 1956, the remunerationof the Auditors appointed by the Comptroller & Auditor General of India shall be fixed by the Companyin the General Meeting or shall be fixed in such manner as the Company in General Meeting may determine.Accordingly, a resolution proposing to give authority to Board of Directors of the Company to fix theremuneration of the Auditors for the financial year 2003-04 is placed for your approval under ‘OrdinaryBusiness’.In pursuance of the directives received from the Department of Company Affairs for the appointment ofCost Auditors, your Directors have, with the approval of the Central Government, appointed M/s. Diwanji& Associates, Cost Accountant, as Cost Auditor to conduct the cost audit of fertilizer products for the financialyear ending 31-3-2004.AUDITORS’ REPORTWith regard to observations of Statutory Auditors contained in their Report, the Company has providedclarifications in Schedule 22 “Notes on Accounts”.PERSONNELRelations between the Company and its employees were cordial during the year. We recognise and sincerelyappreciate the hard work put in by all the employees of the Company.ACKNOWLEDGMENTSYour Directors are happy to place on record their grateful thanks to the Government of India, the Governmentof Gujarat, IDBI, IFCI, UTI, ICICI Bank, LIC, GIC, other Indian Financial Institutions as well as InternationalFinancial Institutions, SEBI, NSDL, CDSL, Stock Exchanges, Bank of Baroda, State Bank of India, Bank of India& other Banks and other agencies for their assistance, cooperation and support extended to your Company.Above all, your Directors remain thankful to the shareholders for their continued support.

For and on behalf of the Board

Ahmedabad P K LaheriP K LaheriP K LaheriP K LaheriP K Laheri29th July, 2003 Chairman

12


Annexure “A”Annexure to the Directors’ Report

PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURES OF PARTICULARS IN THE REPORT OFDIRECTORS) RULES,1988.

A] CONSERVATION OF ENERGYMeasures taken at Fertilizernagar Complex :a) By optimizing the cooling water flow and

trimming of pump impellers of the processpumps in the Melamine plants, savng in powercould be achieved to the extent of Rs. 38.00lakhs per year.

b) By supplying gasseous oxygen produced atAmmonia - IV plant to the CaprolactamExpansion Plant (CEP), one of the compressorsin the CEP could be stopped resulting in powersaving to the extent of Rs. 1.33 crores per year.

c) By switching over to supply of raw waterdirectly from the main line at cost of Rs. 0.78lakhs for the cooling water make up for thecooling towers instead of through a dedicatedpump, power could be saved to the extent ofRs. 7.80 lakhs per year.

Measures taken at Sikka Unit :It is proposed to provide another transformer forthe bagging plant at a cost of Rs. 82,000/- toreduce lighting voltage level to 230V. Anticipatedpower saving because of this would be Rs. 1.68lakhs per year.Measures taken at Fibre Unit :Measures taken at Fibre Unit :Measures taken at Fibre Unit :Measures taken at Fibre Unit :Measures taken at Fibre Unit :a) By incorporating certain modifications in the

air washer system and improving the heattransfer efficiency by intense cleaning in thecentrifugal chiller system, the overall load ofthe centrifugal chiller system has been broughtdown resulting in an electrical energy savingto the extent of Rs. 27.00 lakhs per year.

b) It is proposed to replace the energy intensivecentrifugal chiller system by a vapourabsorption system at an estimated cost ofRs. 1.6 crores. This could result in saving ofelectrical energy to the extent of Rs. 1.97crores per year. This proposal is subject toavailability of additional natuaral gas supplyto the extent of 7000 SCM.

Conservation of raw material, water, etc. :At Fertilizernagar Complex :a) Saving in natural gas as fuel is proposed to

be achieved by bringing forth improvementin combustion efficiency by the installation ofoxygen analyzer already available for use onthe exit flue gas in the fire furnace at theAmmonia – IV Plant.

b) By implementing certain tactical modificationsat a cost of Rs. 3.00 lakhs, it has been possibleto save about 120 MT per year of Anone (anintermediate product in Caprolactam Product)equivalent to Rs. 64.20 lakhs per year.

c) A recovery scheme has been implemented toreduce raw water consumption in coolingtower to the extent of 0.285 million gallonsper day and resulting in lesser effluent also.The saving is approx. Rs. 25.00 lakhs per year.

d) A scheme is proposed to be implemented forcapturing vented low pressure steam, whichwill result in reduction of DM waterrequirement equivalent to Rs. 1.30 crores peryear.

At Sikka Unit :By adopting an integrated water managementsystem, water harvesting and by improvingefficiency of water transfer system betweensourcing points, conservation of ground waterresources is proposed to be achieved.TOTAL ENERGY CONSUMPTION AND ENERGYCONSUMPTION PER UNIT OF PRODUCTION

As per enclosed Form-AB] TECHNOLOGY ABSORPTION

EFFORTS MADE IN TECHNOLOGY ABSORPTION

As per enclosed Form-BTOTAL FOREIGN EXCHANGE USED AND EARNED 2002-03

Foreign Exchange Outgo :(i) C.I.F. VALUE OF IMPORTS Rs.Lakhs

(a) Raw Materials 58405.78(b) Stores & Spares 579.61(c) Capital Goods 17.47

59002.86(ii) EXPENDITURE IN FOREIGN CURRENCY

(a) Interest 1870.93(b) Others 19.51

1890.44TOTAL (i)+(ii) 60893.30

Foreign Exchange Earned :FOB VALUE OF EXPORT OF

Caprolactam 5006.20MEK Oxime 981.75Melamine 134.72Nylon-6 142.44

6265.11

13

A. POWER AND FUEL CONSUMPTION

PARTICULARS 2002-03 2001-02

1. ELECTRICITY(A) Purchase :

Unit : MWH 381877 293254

Amount Rs. In Lakhs 9027.18 9048.32

Rate Rs./KWH 2.36 3.09

(B) Own Generation :

Unit : MWH 151232 173967

KWH Per Ltr. ofFuel Oil/Gas 3.27 3.55

Cost Rs./KWH 5.21 3.89

FORM-A

Form for disclosure of particulars with respect to Conservation of Energy : 2002-03

2. LSHS

Quantity-MT 94722.00 124536.00


Average Rate Rs./MT 13952.60 10496.92

3. NATURAL GAS

Quantity In ‘000 SM3 68680.00 76161.00


Average Rate 1000/SM3 4531.14 4536.96

PARTICULARS 2002-03 2001-02

B. CONSUMPTION PER UNIT OF PRODUCTION

Sr. PRODUCT Power Steam Natural Gas NaphthaNo.

2002-03 2001-02 2002-03 2001-02 2002-03 2001-02 2002-03 2001-02KWH KWH MT MT NM3 NM3 KG KG

1. Ammonia 378 137 0.020 0.506 652 575 167 252

2. Sulphuric Acid 38 37 0.683 * 0.856 * – – – –

3. Phosphoric Acid 276 216 1.678 2.028 2 1 – –

4. Urea 191 190 1.485 1.483 – – – –

5. D.A.P. 61 57 0.076 0.076 5 4 – –

6. A.S.P. 54 56 0.008 0.007 6 6 – –

7. Melamine 1931 1887 6.183 6.017 350 356 – –

8. Caprolactam (Old) 2500 2655 7.539 6.018 38 38 – –

9. Caprolactam (Expn.) 1554 1651 7.034 6.913 59 42 – –

10. Nylon-6 1175 1196 2.628 2.923 – – – –

11. ACH 755 902 1.057 1.206 – – – –

12. Monomer 717 793 3.290 3.723 – – – –

13. MAA 290 254 3.895 4.853 – – – –

14. AS 66 41 0.152 0.179 – – – –

15. Sheets 2334 2818 8.627 10.154 – – – –

16. Pellets 589 611 0.935 0.370 – – – –

17. D.A.P. (Sikka) 58 49 0.023 0.022 – – – –

18. A.S.P. (Sikka) – 56 – 0.020 – – – –

19. Nylon Chips 928 1082 – – – – – –

20. Nylon Filament Yarn 4770 5377 – – – – – –

* Indicates Export from Plants

14


FORM-B

Form for disclosure of particulars with respect to Technology Absorption : 2002-03

Research & Development (R&D)

1. SPECIFIC AREAS IN WHICH R&D IS CARRIED OUT :

The areas are – Polymers & Fibres, EnvironmentControl & Waste Management, Value added Product(s)/Derivatives from existing products, support to Plantand Marketing for Quality & Process efficiencyimprovement and assurance, Corrosion & MaterialEvaluation, Failure investigation of components ofplant equipment & Machinery, Consultancy andAnalytical Service to plants and outside Agencies.

2. BENEFITS DERIVED :

A new generation Melamine based Super Plasticizer– SMF developed at the R&D Centre using the existingfacilities has been commercialized. 4 product variantshas also been introduced in the market.

Process patents for SMF and the CrystallineHydroxylamine Sulfate has been filed.

A new value added specialty grade Nylon-6, viz. glassfibre reinforced flame retardant composites and GFmineral reinforced composites of Nylon-6 has alsobeen introduced.

Super white Nylon-6 chips developed at the R&DCentre has been taken up for regular production atFibre Unit and it has been sold in the market.

Nylon-6/PP alloys based MST grade developed at R&DCentre is also being produced at Fibre Unit and hasfound market acceptance.

Real time vigilant corrosion monitoring for fine tuningof cooling water systems using the linear colarizationresistent measurement instrument have helped toincrease the concentration cycle to 6 in few of theplants in cooling water saving. This has resulted inconservation of water and reduced consumption ofbiocides.

Reduction in plant corrosion rate and fouling problemswith close monitoring of the corrosion rate and thefailure investigation and MOC selection servicesrendered to various plants has resulted in reductionof down time and the maintenance cost.

Consultancy services for corrosion monitoring andchemical analysis are also offered to neighbouringindustries.

3. FUTURE PLAN OF ACTIONS :

To find new application areas for SMF to develop andcommercialize new value added polymer productshaving synergy with Company’s existing line of businessand associated application and support to marketingservices and quality assurance services for polymerproducts of the Company.

Regular corrosion monitoring of high temperatureequipment and machinery in various plants and alsoto provide consultancy in analytical services to otheroutside agencies.

To develop new derivatives of Melamine and undertakepilot production of Nylon-6 powder for market seedingprogramme.

4. EXPENDITURE ON RESEARCH & DEVELOPMENT :

Rs.Lakhs

(a) Capital 3.26

(b) Recurring 866.56

(c) Total 869.82

(d) Total R & D expenditure as apercentage of total turnover 0.45%

Technology absorption and innovation

1. Efforts in brief, made towards technology absorption,adaptation and innovation, and

2. Benefits derived as a result of the efforts, e.g. productimprovement, cost reduction, product development,import substitution etc.

DAP Expansion Project, Train – C at Sikka Unit basedon the Pipe Reactor based ammoniation granulationtechnology of M/s. INCRO SA, Spain, supplied throughM/s UHDE India Ltd., Mumbai has been fullycommissioned and commercial production has startedin October 2002.

APS Production through slurry route at theFertilizernagar is already commissioned and APSproduction is undertaken as per market demands.

3. In case of imported technology (imported during thelast 5 years reckoned from the beginning of thefinancial year), following information is furnished :

(a) Technology imported

(b) Year of import

(c) Has technology been fully absorbed?

(d) If not fully absorbed, reasons & future course ofaction :

(i) GSFC adopted new safer technology for ContinuousPolymerization with enhanced production capacity,supplied by M/s. Inventa-Fisher AG of Switzerlandwhile rebuilding Nylon-6 plant at Fertilizernagar.

The technology was imported in 1997-98, same isnow fully absorbed and adopted and it has helpedin improvement/enhancement of Nylon-6production to the specified levels.

(ii) GSFC adopted Enriched Air (with O2) technologyof M/s. Enco Engineering, Switzerland formanufacture of Cyclohexanone. The technologywas imported in 1997-98, necessary Guarantee TestRuns of the new technology has been successfullytaken and the technology is now fully absorbedand adopted and it has helped in improvementof the Cyclohexanone production to the specifiedlevels.

15

Annexure “B”Annexure to the Directors’ Report

Statement showing particulars of Employees of the Companies as required u/s 217(2A) of the Companies Act, 1956 read with the Companies(Particulars of Employees) Rules,1975 and forming part of the Report of the Board of Directors for the year ended on 31st March, 2003.

Name of the Age Designation / Remuneration Qualification Exp. Date Of Last Employment HeldEmployee (Yrs.) Nature Of Duties Gross Net (Yrs) Commencement

(Rs.) (Rs.) of Employment

[A] Employed throughout the financial year under review and were in receipt of remuneration aggregating to Rs.24,00,000/- or more.NIL[B] Employed for part of the financial year and were in receipt of remuneration aggregating to not less than Rs.2,00,000/- per month.

Ajudia P.P. 60 Supervisor (Machine-Shop) 742864 632159 I.T.I. Turner 35 01/09/67 —Anjaria B.C. 60 Sr Mgr (Anone-Services) 1048214 929542 B. Sc. Chemistry 35 15/05/67 —Antani K.K. 60 Sr Mgr (Prod-Fert Bagging) 1167843 916326 B. Sc. Chemistry 34 19/07/68 Atul Drug House Ltd., Kandla.Arande B.V. 60 Mgr(Shift Oprn) 993124 794853 B. Sc. Chemistry 36 17/12/66 Baroda Rayon Corpn., Udhna, Surat.Balar B.B. 59 Sr Supr (Sales) 865837 737565 B. Sc. Agricultural 30 26/06/72 Palitana Taluka Coop.Sales & Pur.Union.Balar M.R. 59 Regional Manager 884841 779903 B. Sc. Agricultural 31 18/12/71 Guj. State Co-Op. Mktg. Soc., Ahmedabad.Baraiya B.D. 57 Mgr(Marketing) 954885 819027 B. Sc. Agricultural 31 25/11/71 Shri VT Krishna Mach.Chr.Inst.of Rural

Dev.Samila.Baria J.D. 60 Supervisor (Mechanical) 649601 535865 I.T.I. Fitter 28 19/08/74 Alembic Glass, Baroda.Battiwala R.T. 60 Mgr(Quality Control) 1013109 865092 B. Sc. Chemistry 33 09/01/69 —Bavarva G.K. 55 Sr Supr (Sales) 937016 792326 B. Sc. Agricultural 30 24/06/72 —Bhabhor R.V. 60 Supervisor (Mechanical) 714678 613797 I.T.I. Fitter 34 22/07/68 —Bhatt H.C. 56 Bearer Cum Peon (Delhi) 342335 331078 Std. 6th 34 01/09/68 —Bhatt P.S. 60 Sr Mgr (LC) 1009454 885087 B. Sc. Chemistry 35 15/06/67 —Bhatt R.R. 60 Office Secretary 776990 657727 SSC 33 01/08/69 G. E. B , Baroda.Bhave R.S. 59 Office Supervisor 523089 481786 SSC 38 10/02/64 Jyoti Calor Emag Ltd., Baroda.Bheda N.B. 60 Sr Supr (Instrument) 872803 753679 I.T.I. Electrical 35 01/06/67 —Bhingradia H.K. 58 Regional Manager 946176 807764 B. Sc. Agricultural 31 09/12/71 —Bhole P.H. 58 Sr Supr (Sales) 933321 813401 B. Sc. Agricultural 31 09/12/71 —Bhrahmbhatt 60 Office Supervisor 665531 576955 SSC 31 31/08/71 G.E.B., Baroda.N.M.Charola K.C. 57 Mgr(Marketing) 1059572 891212 B. Sc. Agricultural 31 28/11/71 —Chauhan M.M. 58 Supervisor (Mechanical) 773362 652084 I.T.I. Fitter 33 17/11/68 —Chauhan U.S. 53 Depo Attendant 231729 217973 Standard 7th 19 01/01/83 G.S.F.C.Ltd.-Depo Office.Chavda A.M. 53 Sr Supr (Sales) 700912 591358 B. Sc. Agricultural 27 15/09/75 —Chitkara B.L. 60 General Foreman (Inst) 868505 715093 Matriculation 34 13/03/68 F. C. I., Bombay.Chokshi P.J. 44 Sr Systems Engineer 643591 557738 Diploma-Eng. 22 31/03/80 —

ElectricalChristian R.F. 60 Supervisor (Production) 521556 491482 Standard 10th 34 16/03/68 Synbiotics Limited, Wadi Wadi, Baroda.Christian R.G. 58 Sr Supr (Production) 883952 747295 B. Sc. Chemistry 33 10/05/69 —Dalsania P.P. 60 Sr Supr (Welding) 616283 550424 I.T.I. Welding 35 01/09/67 —Dalvi K.P. 58 Executive Secretary 684799 628129 SSC 32 20/06/70 M/S Suhrid Geigy Limited, Ranoli,

Dist. BarodaDarji G.R. 60 Sr Supr (Production) 978967 847913 B. Sc. Chemistry 35 15/05/67 Vadu Higpo-Vadu, Tal-Padra.Darji J.B. 55 Marketing Officer 811849 705052 B. Sc. Agricultural 30 01/07/72 —Desai H.B. 60 Supervisor (Production) 675066 585655 SSC 35 01/06/67 O.N.G.C., Cambay.Desai K.G. 59 Sr Supr (Production) 901962 782239 B. Sc. Chemistry 32 15/06/70 —Desai N.S. 60 Sr Accounts Officer 840310 651432 B. Com. 31 06/01/72 The Punjab Steel & Rolling Mills, Baroda.Desai V.L. 60 Marketing Officer 746905 658784 B. Sc. Agricultural 30 24/06/72 Kharaghoda A.V.K.Sahakari Mandli Ltd.Dholia B.P. 59 Sr Agro Services Officer 998200 860602 B. Sc. Agronomy 32 23/04/70 Taluka Panchayat, Sihor.Dholiya G.R. 57 Sr Supr (Sales) 874508 740303 B. Sc. Agricultural 30 03/12/72 —Diwanji A.G. 55 Admn. Officer (GH & C) 531088 461509 B.A. 26 04/12/76 Zaverchand Gaekwad P.Ltd.,Baroda.Elavia B.M. 60 Sr Supr (Mechanical) 718792 645494 SSC 35 01/04/67 Alembic Chemicals, BarodaGaekwad A.D. 51 Dy GM (Administration) 1048240 916387 M.Com. 27 14/08/75 —Gandhi A.B. 60 Supervisor (Mechanical) 729420 643154 I.T.I. Fitter 33 04/04/69 —Gandhi P.J. 59 Sr Supr (Production) 853524 724696 SSC 34 01/04/68 —Gandhi R.M. 56 Mgr(Electrical) 925812 801242 Diploma-Eng. 32 05/01/70 —

ElectricalGhantala H.P. 56 Sr Supr (Sales) 893224 769084 B. Sc. Agricultural 31 15/12/71 M/S Granulated Fert., Bhavnagar.Ghode S.S. 60 Sr Mechanical Engineer 853347 729135 I.T.I. D’Man(Mech)37 15/12/64 Sarabhai Merck Ltd.,Baroda.

16


Gohil M.J. 60 Sr Shift Engineer 861125 678701 B. Sc. Chemistry 35 15/05/67 —Gorasia L.M. 57 Mgr(Marketing) 842355 730849 B. Sc. Agricultural 31 06/05/71 —Gosai A.J. 60 Mgr(Res-Laboratory) 954832 838129 B. Sc. Chemistry 31 11/01/71 Suhrid Geigy Limited, Wadi Wadi, Baroda.Gosai B.B. 57 Sr Supr (Production) 842145 716121 SSC 33 24/04/69 —Gosai P.S. 58 Regional Manager 899707 783063 B. Sc. Agricultural 31 06/08/71 —Harijan S.F. 60 Sweeper 346938 331318 Std 3rd 33 15/11/68 Sewards & Lloyds India Ltd., Baroda.Ingle V.D. 60 Head Bearer 608475 561935 Standard 8th 33 10/04/69 Toyo Engg.Corpn.,Baroda.Jose K.P. 60 Office Secretary 907966 792621 SSC 36 07/09/66 Oil & Natural Gas Commission, Baroda.Joshi B.P. 56 Sr Supr (Sales) 749372 687206 B. Sc. Agricultural 31 12/12/71 M/S Trade Link, Bilimora.Joshi K.R. 58 Supervisor (Advt. & PR) 733918 596993 B.A. 25 19/01/77 Synbiotics Ltd., Baroda.Kachhia N.H. 58 Supervisor (Production) 733545 644258 SSC 34 15/12/68 —Kadam Y.D. 57 Office Secretary 752229 674372 SSC 31 01/09/71 Jyoti Calor Emag. Ltd BarodaKaila C.P. 57 Sr Supr (Sales) 957061 821420 B. Sc. Agricultural 30 25/06/72 —Kapadia K.P. 60 Sr Mgr (MM) 1088638 886272 B.E. Mechanical 31 01/02/71 M/S Sigil India Services Pvt. Ltd.Karnani N.V. 60 Mgr(Electrical) 1003935 953680 Diploma-Eng. 35 01/06/67 B & B Polytechnic, VV Nagar.

ElectricalKhatri M.J. 60 Supervisor (Mechanical) 716570 615766 I.T.I. Fitter 28 01/08/74 Suhrid Geigy Ltd., Ranoli.Khatri S.L. 60 Foreman (Mechanical) 725443 606356 Cert. Course 28 05/08/74 SLM-Maneklal Industries, Vatva.Kulkarni P.S. 60 Sr Supr (Production) 757393 668326 I.T.I. Electrical 34 22/07/68 Alembic Chemicals Ltd.,Baroda.Kutty J.S.N. 58 Sr Mgr (Finance) 1065090 878908 B. Com. 29 17/05/73 Controller of Defence,

Account Southeran Comm, PuneLadani K.A. 57 Regional Manager 818664 718609 B. Sc. Agricultural 30 08/07/72 —Limbachia K.K. 60 Sr Supervisor (Accounts) 689062 612088 B. Com. 34 19/06/68 Engg. Workshop, W. Rly , Ahmedabad.Macwana V.S. 60 Sr Supr (Instrument) 825933 722266 SSC 36 03/12/66 The Gujarat Electricity Board, Dhuvaran.Mahida N.A. 60 Sr Shift Engineer 846620 750163 B. Sc. Chemistry 30 20/03/72 Universal Dyestuff Indus. Ltd., Sakarda.Mahrotri K.V. 58 Sr Supr (Production) 806384 677209 B. Sc. Chemistry 32 10/04/70 —Majmundar A.S. 60 Sr Mgr 1043203 906073 Diploma-Eng. 35 01/07/67 —

(Mech - PA-AS-II Plant) ElectricalMakadia B.L. 60 Sr Foreman(Mechanical) 829215 727154 I.T.I. Fitter 35 01/06/67 —Mavani M.R. 59 Sr Supr (Sales) 936776 799581 B. Sc. Agricultural 31 15/12/71 —Mehta B.G. 58 Mgr(Mechanical) 944983 851371 Diploma-Eng. 32 14/01/70 Indian Light Gauge Metal Product, Baroda

MechanicalMehta D.S. 60 Sr Mgr (Electrical) 823173 724895 Diploma-Eng. 35 01/06/67 —

ElectricalMehta J.S. 60 Administrative Officer 727368 620080 M.S.W. Philosophy33 25/06/69 Navin Glass Product, Baroda.Mehta M.K. 58 Mgr(Mechanical) 1279845 993496 Diploma-Eng. 33 05/10/69 —

ElectricalMehta M.M. 60 Sr Shift Engineer 868836 747058 B. Sc. Chemistry 32 13/01/70 —Mehta N.D. 60 Sr Shift Engineer 996631 911908 B. Sc. Chemistry 33 08/05/69 —Mehta R.T. 60 Sr Supr (Production) 922958 803805 SSC 35 24/08/67 Saurashtra Chem., Porbandar.Mhaskar G.L. 60 Jt Sr Materials Officer 814894 684850 SSC 33 22/11/69 Sarabhai Merk Co., Baroda.Miyagamwala 60 Mgr(Mech-W/Shop) 980073 835792 Diploma-Eng. 33 05/10/69 —A.H. MechanicalModi N.M. 60 Sr Supr (Mechanical) 879407 759031 I.T.I. Fitter 35 01/08/67 —Mody M.D. 60 Mgr(Shift Oprn) 1218333 1073623 B. Sc. Chemistry 35 15/05/67 —Morkar M.B. 59 Supervisor (Mechanical) 668425 558171 I.T.I. Fitter 30 18/10/72 —Naik B.M. 60 Sr Supervisor (Marketing) 758711 665377 SSC 35 11/05/67 Medical College, Baroda.Narayan B. 60 Dy GM 1159291 990838 B.Sc. Production 35 28/04/67 F. C. I., Trombay Unit.

(Utility & Env Con-Oprn)Naul M.B. 60 Sr Mgr (MM) 1049502 901917 Diploma-Eng. 30 01/11/72 Suhrid Geigy Ltd, Wadi Wadi, Baroda.

MechanicalPalnitkar S.W. 60 Executive Director & 616337 416619 Asso. Comp Secr 16 27/06/86 Divisional Audit Office Central Rly. Bhusaval

Co. SecretaryPanchal A.M. 60 Supervisor (Machine-Shop) 662264 591444 I.T.I. Turner 35 01/09/67 —Panchal C.J. 60 Sr Mgr (Mechanical) 971691 867678 Diploma-Eng. 35 06/06/67 —

MechanicalPancholi M.H. 60 Mgr(Mechanical) 957011 821028 Diploma-Eng. 35 01/06/67 Technical High School, Bhuj.

MechanicalPandya H.M. 60 Sr Mgr (Proj-Constn-Civil) 1152458 953833 B.E. Civil 35 15/09/67 S.B.Patel & Co., Baroda.Paranjape D.K. 60 Sr Movement Control Officer 641893 575015 B. Com. 33 18/11/69 Sarabhai Merck Limited, Baroda.Parekh B.C. 60 Supervisor (Marketing) 566241 528329 SSC 34 07/03/68 Sarabhai Glass, Baroda.



17

Parekh K.J. 60 Administrative Officer 668488 623352 B. Com. 34 01/04/68 Jambugam Taluka, Education Committee.Parikh C.M. 53 Sr Mgr (Design-Planning) 780773 690150 B.E. Mechanical 26 01/12/76 —Parikh M.K. 60 Mgr(Shift Oprn) 1062647 904741 B. Sc. Chemistry 33 09/01/69 —Parmar N.K. 60 Sr Foreman 739324 668146 SSC 34 01/05/68 —Parmar S.K. 60 Sr Agricultural Asst 635825 568021 SSC 33 17/03/69 Office of Supdt. Agri. Deesa.Patel A.M. 55 Sr Supr (Sales) 819070 726827 B. Sc. Agricultural 30 03/12/72 —Patel A.P. 58 Supervisor (Production) 657912 582005 SSC 33 01/03/69 —Patel B.J. 60 Sr Supr (Production) 998525 763470 B. Sc. Chemistry 32 14/04/70 The New English School, Unava.Patel B.N. 60 Sr Shift Engineer 905654 754906 B. Sc. Chemistry 35 15/05/67 —Patel B.S. 59 Mgr(Agro Ser)/Editor(KJ) 975977 834554 B. Sc. Agricultural 31 14/04/71 —Patel C.C. 60 Sr Technician (Mechanical) 696620 592404 I.T.I. Fitter 33 21/03/69 The Uania Silk Mills Private Ltd.,Billimora.Patel C.M. 59 Sr Supr (Mechanical) 741185 645528 I.T.I. Fitter 35 28/06/67 North Guj. Cotton Mills, Siddhpur.Patel C.M. 59 Mgr(Quality Control) 882441 778543 M.Sc. Organic 28 04/02/74 Sarabhai Chem. Pvt. Ltd.,Baroda.Patel C.P. 60 Sr Supr (Mechanical) 608854 543536 Diploma In 36 10/05/66 I.O.C.-Guj.Refinery, Baroda.

Auto Engg/ElectPatel D.A. 57 Sr Supervisor (Prod.-Boiler) 739039 665879 SSC 34 09/12/68 —Patel D.H. 60 Sr Supr (Production) 897414 712435 B. Sc. Chemistry 33 09/05/69 —Patel D.I. 60 Sr Mgr (Prod-AS-I & AS-II) 1055253 908268 B. Sc. Chemistry 35 15/05/67 —Patel D.J. 60 Sr Mgr (Marketing-Logistics) 994182 855950 B. Com. 35 12/05/67 Air Control & Chem. Engg. Co. , Barejadi.Patel D.N. 60 Supervisor (Sales) 767842 652255 B. Sc. Agricultural 29 24/06/73 Dept. of Agriculture, Matar.Patel G.S. 59 Sr Tractor Driver 601354 526331 Standard 10th 31 09/09/71 Patel Raijibhai Muljibhai Patel.Patel H.R. 60 Dy GM (Marketing) 1259841 1057814 B. Sc. Chem/Physics35 22/02/67 F. C. I., Bombay.Patel I.D. 59 Mgr(Mechanical) 952255 842146 Diploma-Eng. 33 05/10/69 —

ElectricalPatel I.K. 60 Mgr (Amm Stor & 928725 795866 B. Sc. Chemistry 35 15/05/67 —

Amm/Argon Fill)Patel I.N. 57 Sr Supr (Sales) 914630 784981 B. Sc. Agricultural 31 10/12/71 —Patel J.C. 58 Sr Supr (Sales) 816577 723250 B. Sc. Agricultural 31 12/06/71 Director Of Agri., Ahmedabad.Patel J.D. 58 Sr Supr (Production) 688282 599179 SSC 34 01/04/68 —Patel J.P. 60 Personal Assistant 593601 474013 BA (Special) 30 15/03/72 Indian Institute of Management,

Ahmedabad.Patel J.R. 55 Supervisor (Mechanical) 475858 456776 SSC 29 07/09/73 —Patel J.V. 59 Sr Foreman (Safety) 722119 646775 SSC 35 05/08/67 —Patel J.V. 60 Sr Supr (Mechanical) 766763 627237 I.T.I. Fitter 34 01/04/68 —Patel K.B. 60 Sr Adm Officer 637660 558420 B. Sc. Chemistry 29 22/01/73 Mehta Printing Press, Godhra.Patel K.M. 57 Shift Co-Or Cum Sr Meo 586266 509704 Standard 9th 33 11/04/69 —Patel K.M. 60 Sr Supr (Mechanical) 855639 714284 SSC 35 04/06/67 —Patel K.M. 57 Sr Supr (Production) 843303 719972 B. Sc. Chemistry 33 20/06/69 University School Of Science, Guj.Uni.,AbadPatel K.S. 45 Sr Supr (Quality Control) 501066 446544 M.Sc. Chemistry 19 14/12/82 Polytechnic-M.S.University.Patel L.M. 54 Sr Supr (Quality Control) 581552 513715 M.Sc. Chemistry 24 01/02/78 —Patel M.B. 60 Sr Supr (Production) 720152 597909 B. Sc. Chemistry 28 01/01/74 The Indian Ele. Chem., Ahmedabad.Patel M.G. 56 Sr Supr (Production) 777627 663774 B. Sc. Chemistry 29 10/09/73 Guj. Pharmaceutical & Chem. Works,

Ahmedabad.Patel M.M. 58 Sr Supr (Sales) 939252 821481 B. Sc. Agricultural 30 24/06/72 Jetalwasana Coop.Society,Jetalwasana.Patel M.P. 59 Mgr(Quality Control) 876034 769396 M.Sc. Chemistry 28 31/01/74 Guj. Mineral Dev Corpn Ltd, Baroda.Patel M.S. 60 Mgr(Shift Oprn) 993964 838240 B. Sc. Chemistry 35 15/05/67 —Patel M.V. 60 Sr Shift Engineer 953368 812543 B. Sc. Chemistry 33 09/01/69 —Patel M.Z. 59 Sr Supr (Sales) 818754 702072 B. Sc. Agricultural 30 08/12/72 —Patel N.C. 60 Sr Mgr (Marketing) 1047114 845339 B. Sc. Agricultural 32 27/04/70 Director of Agriculture, Ahmedabad.Patel N.P. 60 Sr Mgr (Marketing) 1075395 906679 B. Sc. Agricultural 32 02/01/71 Agriculture School,Dahod.Patel N.R. 58 Sr Supr (Sales) 967818 813091 B. Sc. Agricultural 31 21/04/71 —Patel P.B. 57 Mgr(Mechanical) 1083926 901975 Diploma-Eng. 33 05/10/69 Poineer Foundry,Baroda.

MechanicalPatel P.J. 56 Marketing Officer 762237 659709 B. Sc. Agri. 29 07/12/72 Guj. State Co-Op. Marketing Soc.,

Ahmedabad.Patel P.L. 60 General Foreman(Workshop) 914831 778207 SSC 36 27/09/66 Sarabhai Machinary,Baroda.Patel R.C. 60 Sr Shift Engineer 859726 739204 B. Sc. Chemistry 35 15/05/67 —Patel R.D. 58 Sr Supr (Production) 786588 660488 SSC 34 01/04/68 —



18


Patel R.H. 60 Sr Supr (Machine-Shop) 726977 654167 Standard 8th 33 30/05/69 Jyoti Ltd.,Baroda.Patel R.K. 56 Sr Mgr (Mechanical) 1009279 775742 Diploma-Eng. 25 17/09/77 Alembic Chemical Works Co Ltd.,

Mechanical Baroda.Patel R.K. 60 Sr Supr (Production) 590414 533376 SSC 34 01/04/68 —Patel R.K. 54 Mgr(Marketing) 933107 817237 B. Sc. Agricultural30 02/07/72 Guj.State Co-Op.Mktg.Soc.,Ahmedabad.Patel R.P. 57 Sr Supr (Production) 678016 627713 B. Sc. Chemistry 32 10/04/70 —Patel R.R. 59 Regional Manager 963799 818625 B. Sc. Agricultural31 01/12/71 Dir. of Agri., GS, Ahmedabad.Patel S.B. 60 Supervisor (Production) 720204 555574 SSC 34 01/04/68 —Patel S.C. 60 Sr Mgr (HX-MEK-O) 888205 783031 B. Sc. Chemistry 35 15/05/67 —Patel S.I. 60 Mgr(Design-Mechanical) 984903 827032 Diploma-Eng. 32 11/11/70 M/S Sarabhai Machinery.

MechanicalPatel S.J. 60 Mgr(Quality Control) 1013428 875411 B. Sc. Chemistry 31 01/07/71 Alembic Chemicals, Baroda.Patel S.K. 58 Mgr(Marketing) 811254 721812 B. Sc. Agricultural31 13/05/71 Guj State Co-Op Housing Soc.,

Ahmedabad.Patel T.A. 59 Sr Supr (Production) 894478 685478 B. Sc. Chemistry 32 10/04/70 —Patel T.L. 60 Sr Supr (Production) 594795 549937 SSC 34 04/05/68 Baroda Rayon Corp.Ltd.,Udhna.Patel V.B. 60 Mgr(Shift Oprn) 950400 767722 B. Sc. Chemistry 35 25/05/67 —Patel V.M. 60 Supervisor (Electrical) 762472 690207 Pwd Wire. Course 34 21/11/68 —Patel V.M. 59 Supervisor (Electrical) 628164 552750 SSC 25 15/02/77 KC.Kam.Engg.Co.,Baroda.Patel V.M. 50 Supervisor (Production) 688595 605131 B. Sc. Chemistry 25 22/08/77 Universal Dyestuff Industries Limited.Patil J.K. 60 Dresser Cum Wardboy 415682 368212 SSC 30 06/03/72 Dr. S Y Kirtane, Baroda.Pawar B.K. 60 Sr Supervisor (Marketing) 853993 742814 B. Com. 34 30/04/68 Synbiotics Ltd., Baroda.Popat A.B. 60 Addl GM (Projects) 1107012 916150 B.E. Chemical 32 29/06/70 Saurashtra Chemicals, PorbandarPrajapati M.A. 60 Sr Supr (Electrical) 745350 664708 I.T.I. Wireman 35 01/06/67 —Prajapati M.N. 60 Sr Mgr (Prod-Urea) 1172387 979986 B. Sc. Chemistry 35 01/06/67 Narmada Project, Rajpipla.Prajapati R.H. 57 Regional Manager 869709 744528 B. Sc. Agricultural 31 08/12/71 —Purani G.N. 60 Sr Supr (Sales) 752419 661662 B. Sc. Agricultural 30 08/06/72 Cambay Taluka Sales &

Purchase Union, Cambay.Rabadia M.V. 52 Supervisor (Sales) 651933 569452 B. Sc. Agricultural 24 28/05/78 —Rahevar B.I. 60 Mgr(Shift Oprn) 1073801 911534 B. Sc. Chemistry 35 15/05/67 —Rajkotia B.K. 60 Sr Supr (Sales) 907438 776055 B. Sc. Agricultural 30 04/08/72 Guj. State Co-Op Mktg. Society,

Kutiyana.Rana Y.M. 57 Mgr(Agro Services) 716378 650041 B. Sc. Agricultural 32 29/04/70 Dept. of Agri. Govt. of Gujarat,

Navsari.Raval P.J. 60 Sr Shift Engineer 800991 712941 B. Sc. Chemistry 33 02/08/69 —Ruparelia G.V. 60 Sr Supr (Sales) 815068 681576 B. Sc. Agricultural 30 15/12/71 —Sakaria B.G. 57 Foreman (Welding) 658078 578204 I.T.I. Welding 35 01/09/67 —Santoki O.J. 60 Mgr(Electrical) 962944 828983 Diploma-Eng. 35 15/06/67 —

ElectricalSawale S.K. 57 Sr Human Resources Officer 867781 730537 B. Com. 31 02/03/71 Synbiotics Ltd.,Baroda.Sethi P.N. 60 Dy GM 1086037 870510 B. Sc. Chem/ 35 24/01/67 F. C. I. Limited, Trombay.

(Prodn Urea - Melamine) PhysicsShah C.H. 36 Sr Design Engineer 255561 236205 B.E. Mechanical 10 04/04/92 —

(Mechanical)Shah H.M. 60 Executive Director 1597726 1252808 B.E. Mechanical 32 03/09/70 General Electric Co. Lymn,Mass,USA.Shah H.M. 60 Supervisor (Production) 889944 714371 B. Sc. Chemistry 33 10/06/69 —Shah H.V. 60 Mgr(Shift Oprn) 1030032 909658 B. Sc. Chemistry 35 15/05/67 The Navchetan Engg School,Bhahi.Shah I.M. 60 Mgr(Shift Oprn) 988953 867791 Diploma-Eng. 35 30/05/67 —

ElectricalShah J.M. 57 Sr Quality Control Officer 815438 738808 B. Sc. Chemistry 33 24/06/69 —Shah J.R. 60 Mgr(Finance) 793831 688007 B. Com. 36 04/07/66 Jyoti Limited, Baroda.Shah M.B. 58 Accountant 649998 563204 B. Com. 29 01/08/73 Charotar Sahakari Khand Udyog Ltd.,

Palej.Shah M.S. 59 Regional Manager 827887 738070 B. Sc.Chemistry 32 29/04/70 Testeels Ltd.,Edehgam.Shah N.J. 59 Sr Supr (Production) 711425 606405 B. Sc. Chemistry 28 15/01/74 Universal Dyestuff Industries Limited,

BarodaShah N.R. 58 Sr Accounts Officer 788072 666770 B. Com. 32 18/07/70 Sarabhai M. Chemicals Limited, Baroda.Shah P.N. 49 Sr Mgr (Shift Operation) 879994 782853 B.E. Chemical 22 01/09/80 —



19

Shah R.C. 60 Mgr(Quality Control) 927922 794672 M.Sc. Chemistry 32 01/01/71 Dir. Of Geology, Ahmedabad.Shah R.N. 38 Sr Microbiologist 242800 224631 M.Sc. 12 01/03/90 M J Pharmaceuticals Ltd

Micro-BiologyShaikh M.M. 60 Sr Supr (Production) 694864 634461 SSC 34 22/07/68 —Sharma P.K. 60 Addl GM (S & FS) 1181685 926483 B.Sc. 35 17/02/67 FCI Ltd, Naya Nangal and Trombay.

Chem/PhysicsShastri R.M. 58 Sr Mgr (Mechanical) 1037950 918420 Diploma-Eng. 30 15/09/72 Oriental Textile Co.

ElectricalShelat S.B. 60 Mgr(Systems) 964282 821869 B.E. Electrical 29 30/05/73 Alembic Chemicals, Baroda.Sheth I.J. 60 Dy GM (Mktg-Fert) 1083270 919381 B.A. 34 12/06/68 —Sheth K.R. 58 Mgr(Marketing) 935240 840362 B. Sc. Agri. 32 06/05/70 Sub.Div.Soil Conservator Officer, DohadShitole C.N. 60 Sr Supr (Production) 644632 581185 B. Sc. Chemistry 33 03/07/69 Synbiotics Ltd.,Baroda.Solanki J.D. 60 Sr Shift Engineer 868355 741516 B. Sc. Chemistry 33 22/05/69 —Solanki N.L. 56 Sr Supr (Electrical) 1004277 806657 I.T.I. Electrical 33 19/04/69 —Soni K.A. 57 Mgr(Quality Control) 870756 768598 B. Sc. Chemistry 31 29/05/71 Suhrid Geigy Ltd., Baroda.Soni P.K. 59 Dy GM (EDP) 914656 784749 M.Sc. 21 24/08/81 Jyoti Limited, Baroda.

Chem/PhysicsSubramaniam 60 Executive Director 1449906 1094167 B.Sc. Engg. 37 27/09/65 —C.A. ChemicalSurelia J.T. 53 Office Asst / Typist 498677 435012 SSC 31 28/12/70 M.S.University, Baroda.Suthar N.V. 60 Mgr(Marketing - IP) 893659 734103 B. Com. 32 20/03/70 Jyoti Limited, Baroda.Suthar S.M. 59 Mgr(Marketing) 1090847 933566 B. Sc. Agricultural 31 18/07/71 —Thakkar D.K. 60 Supervisor (Sales) 840948 781868 B.A. 31 29/05/71 Indian Arts Emporium, Ahmedabad.Thakkar P.B. 60 Mgr(Shift Oprn) 970898 828748 B. Sc. Chemistry 34 06/01/69 —Thakore R.N. 57 Agro Services Officer 667533 605063 M.Sc. Agricultural 29 05/08/73 —Thoria D.L. 60 Dy GM (Electrical) 969067 840837 Diploma-Eng. 35 01/06/67 Gujarat Electricity Board,Baroda.

ElectricalTrivedi D.M. 59 Supervisor (MM) 676353 595755 SSC 35 01/03/67 —Trivedi K.H. 60 Sr Supr (Production) 897420 755711 B. Sc. Chemistry 33 27/04/69 —Trivedi R.B. 58 Sr Supr (Sales) 744201 669674 B. Sc. Agricultural 31 28/07/71 —Trivedi R.V. 60 Sr Foreman 885177 750577 SSC 35 20/01/67 Pesticides Limited, Bombay.Umarawala R.R. 60 Jt Sr Officer (Training) 868041 687971 I.T.I. D;Man 37 12/11/65 Saraswati Engg. Works, Baroda.

(Mech)Upadhyay A.T. 57 Supervisor (Gate Keeping) 680637 606336 SSC 35 01/03/67 —Upadhyay C.R. 59 Supervisor (Sales) 724092 640744 B.A. 29 01/06/73 Gujarat State Co-Op. Mktg. Soc.,

Ahmedabad.Upadhyaya C.S. 57 Sr Supr (Production) 697180 632292 B. Sc. Chemistry 33 08/08/69 —Upadhyaya M.M.60 Sr Shift Engineer 941516 813532 B. Sc. Chemistry 33 10/02/69 —Vaghela G.G. 57 Addl GM (Technical Services) 975031 866595 B.E. Chemical 29 01/12/72 Satyadev Chem Pvt.Ltd. BarodaValand A.G. 60 Sr Supr (Mechanical) 727281 625812 I.T.I. Fitter 33 24/03/69 —Vashi M.C. 60 Sr Supr (Production) 878168 753248 B. Sc. Chemistry 33 17/01/69 —Vayak N.V. 53 Sr Supr (Sales) 691004 624160 B. Sc. Agricultural 29 13/12/72 Inst. of Agriculture, Anand.Verma J.R. 47 Sr Mgr (Finance) 893507 759120 B. Com. 23 05/09/79 Haribhakti & Company,Baroda.Vidja G.H. 59 Supervisor (Sales) 763264 669429 B. Sc. Agricultural 30 24/06/72 G.S.Mktg.Soc.Ltd.,Ahmedabad.Vijayan V.V. 57 Office Secretary 698029 622120 M.A. 31 30/08/71 The Anup Engg. Ltd., Ahmedabad.Vyas N.G. 36 Sr Safety Officer 345607 315731 B.E. Chemical 11 31/08/91 —Vyas R.P. 58 Supervisor (Mechanical) 651637 553385 SSC 28 06/08/74 Aims Oxygen Private Ltd., Baroda.Williams C.R. 60 Mgr(Administration - Mktg) 973655 845175 B.A. 30 12/04/72 Western Railway, Baroda.Yadav P.G. 59 Sr Supr (Instrument) 861411 755110 I.T.I. Instrument 31 13/01/71 Ingersoll Rand Pvt. Limited, Naroda.Zala M.M. 59 Supervisor (Auto) 641203 570713 I.T.I. Fitter 34 04/08/68 —Polymers Unit :R Y Christy 54 Sr Mgr (MM) 652155 592311 B.E.(Electronics) 31 07/05/78 GSFC-Fertilizernagar, Dist.VadodaraA B Desai 60 DGM (S&P) 853668 737895 B.Sc. 35 27/11/77 Deepak Nitrite Ltd., Nandesari,

Dist. VadodaraK S Jambusaria 54 Sr Mgr (AUE) 674558 612814 B.Sc. (Phy.) 31 25/02/75 Garware Plastics Pvt.Ltd., Mumbai

Note :1. Gross remuneration includes salaries, allowances, Company’s contribution to provident fund, leave travel concession, leave encashment, value

of the other perquisites etc.2. The Company’s contribution to superannuation (pension) fund and gratuity fund is not included in the gross remuneration. However gratuity

payment made during the year 2002-2003 to ex-employees who were employed for the part of the financial year is included in the gross remuneration.3. The nature of employment of all the above employees is non-contractual and as per Company’s service rules and other regulations.

4. None of the above employees is relative of any of the Directors.



20


(PURSUANT TO CLAUSE 49 OF THE LISTING AGREEMENT)

1. COMPANY’S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE

It has been the endeavour of the Company to achieve the highest levels of transparency, accountability,independent monitoring and full disclosures within the framework of legal provisions. It is committedto enhance the shareholder’s value over a sustained period of time and accountable to its stake-holders,employees, the state and central government, financial institutions, bankers and lenders. CorporateGovernance strengthens a Company’s quest for higher growth and profile. The Company believes thatits systems and actions must be directed to enhancing corporate performance and maximising shareholdervalue in the long term.

2. BOARD OF DIRECTORS

Composition and Size of the BoardThe present strength of the Board of Directors of the Company is 8 (eight) comprising :– 1 Promoter, Executive Director– 1 Promoter, Non-Executive Director– 3 Independent, Non-Executive, nominee Directors representing IDBI, UTI and ICICI Bank as lenders– 3 Independent, Non-Executive Directors

Board meetings

The Company placed before Board all the relevant and necessary information at their meetings suchas production, sales, exports, annual operating plans, capital budgets, quarterly results including thatof Sikka, Polymers & Fibre Units, minutes of Committee meetings, material communications from State/Central Govt. and other statutory corporations/bodies, share transfers etc. Ten meetings of the Boardof Directors were held during the year (as against the minimum requirement of 4 meetings) on -20.04.2002, 28.06.2002, 29.07.2002, 27.09.2002, 26.10.2002, 22.11.2002, 27.12.2002, 29.01.2003, 21.02.2003& 30.03.2003.

As on 31-3-2003, the composition and category of the Board of Directors and also the number of otherDirectorships and Membership/Chairmanship of Committees was as under and attendance of each Directorat the Board meetings and at the last Annual General Meeting held on 27th September, 2002 is alsogiven under :

Sr. Name Category No. of Attendance No. of No. of CommitteesNo Meetings at the other in which

attended last AGM Directorships Chairman/Member(Including GSFC Ltd.)

Chairman Member

1. Shri Ashok Narayan Nominee of GOG 3 N.A. 1 1 -Chairman *1 (As promoter)

Non-Executive Director

2. Shri G Subba Rao Non-Executive Director 4 No 6 1 -

3. Dr. Manjula Non-Executive Director 2 No 13 2 1Subramaniam

4. Shri N R Krishnan Nominee of UTI (As lender) 8 No 3 3 1Non-Executive Director

5. Shri S R Vengsarker Nominee of ICICI Bank 8 No 3 - 3(As lender) Non-Executive Director

6. Shri R S Agarwal *2 Nominee of IDBI 4 N.A. 5 - 4Non-Executive Director

7. Shri C K Koshy *3 Non-Executive Director 1 N.A. 8 - 1

8 Shri Balwant Singh Nominee of GOG 10 Yes 10 1 3Managing Director (As promoter) Executive Director

9. Shri A D Desai *4 Non-Executive Director 4 Yes N.A. N.A. N.A.

CORPORATE GOVERNANCE REPORT

21

10. Dr. K Kameswara Nominee of IDBI 3 Yes N.A. N.A. N.A.Rao *5 (As lender)


11. Shri S G Mankad *6 Non-Executive Director 2 No N.A. N.A. N.A.

12. Dr. K D Jeswani *7 Nominee of GOG 7 Yes N.A. N.A. N.A.Chairman (As promoter)


13. Shri Ashok P. Non-Executive Director 6 No N.A. N.A. N.A.Bhavsar *8

*1 Appointed on 27-01-2003*2 Appointed on 14-11-2002*3 Appointed on 30-03-2003*4 Ceased to be a Director w.e.f. 01-11-2002*5 Ceased to be a Director w.e.f. 14-11-2002*6 Ceased to be a Director w.e.f. 06-01-2003*7 Ceased to be a Director w.e.f. 22-01-2003*8 Ceased to be a Director w.e.f. 31-01-2003

None of the Directors is a member in more than ten Committees or is a Chairman in more than five Committeesacross all companies in which he/she is a Director.

Notes : (i) None of the Directors is 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.

In addition to the Audit Committee viz., Finance-cum-Audit Committee, and Shareholders’ Committee viz.Shares-cum-Debentures Transfer and Investors Grievance Committee, as required to be constituted underthe Listing Agreement, the Board has constituted seven more committees viz. Project Committee, PersonnelCommittee, Research Committee, Committee for authorisation for Bank Accounts, Committee for approvingappointment of Manager/Principal Officer, Restructuring Committee and ‘Committee of Directors’ for over-viewing the Implementation of the Restructuring Committee’s Report to deal with the specialized issues.

Details of Director being appointed/re-appointed :

Dr. Manjula Subramaniam retires by rotation at the forthcoming Annual General Meeting and being eligible,has offered herself for re-appointment. Dr. Manjula Subramaniam, aged 55 years is a Director since 24-12-2001, possessing M.Sc (Physics), M.P.A. (Harvard), Ph. D. (Commerce), IAS qualifications and having wideexperience in Administration and Industry and on senior positions in various Deptt. of the Govt. of Gujarat.At present she is a Principal Secretary in Energy & Petrochemicals Deptt. of the Govt. of Gujarat. She isa Chairperson of six public Companies viz. Gujarat Industries Power Co.Ltd., Gujarat State Fuel ManagementCo.Ltd., Gujarat State Electricity Corporation Ltd.,Gujarat Energy Transmission Corp.Ltd., Gujarat State EnergyGeneration Ltd. and Gujarat Power Corporation Ltd., and Director in seven other Companies/Associationviz. Gujarat Alkalies & Chemicals Ltd., Gujarat State Petroleum Corp. Ltd,. The Ahmedabad Electricity Co.Ltd.,Gujarat State Petronet Ltd., Gujarat Alumina Bauxite Ltd., Gujarat Narmada Valley Ferti.Co.Ltd. and GujaratState Investments Ltd. She is also Member in other Committees of the Board of Directors viz. Project andPersonnel Committees of the Company.

COMMITTEES OF THE BOARD

3. AUDIT COMMITTEE

The Finance-cum-Audit Committee is presently comprising of three independent non-executive Directors.All the members of the Committee possess adequate knowledge of corporate finance and accounts.

Major terms of reference of the committee are :

i) To review the Company’s Financial Reporting Process and its financial statements.

Sr. Name Category No. of Attendance No. of No. of CommitteesNo Meetings at the other in which

attended last AGM Directorships Chairman/Member(Including GSFC Ltd.)

Chairman Member

22


ii) To review the accounting and financial policies and practices.iii) To review the adequacy of Internal Control Systems.iv) To review the Company’s Financial and Risk Management Policies and ensure compliance with regulatory

guidelines.v) To review reports furnished by the internal and statutory auditors.vi) To investigate into any matter specified in Section 292A of the Companies Act, 1956 or referred to

it by the Board or to investigate any activities within its terms of reference. For this purpose, it shallhave full access to information contained in the records of the Company and to obtain external legalor professional advice, if necessary; and

vii) To secure attendance of outsider with relevant expertise, if considered necessary.

During the financial year 2002-03, five meetings of Finance-cum-Audit Committee were held. The particularsof the attendance of the members of the Committee held during the year are as under :

Sr. Name of the Member Tenure Meetings held MeetingsNo during the attended

tenure ofDirectors

1. Shri N R Krishnan (Nominee of UTI) From 01-04-02 5 4Chairman of the Committee from 29-01-03

2. Shri S R Vengsarker (Nominee of ICICI Bank) From 01-04-02 5 53. Shri R S Agarwal (Nominee of IDBI) From 14-11-02 2 24. Shri A D Desai Chairman of the Committee (upto 31-10-02) Upto 31-10-02 3 35. Dr. K Kameswara Rao (Nominee of IDBI) Upto 14-11-02 3 26. Shri Ashok P Bhavsar Upto 31-01-03 4 4

4. REMUNERATION COMMITTEE

The remuneration of the Directors is decided by the Board of Directors, keeping in view the provisionsof the Articles of Association of the Company and the Companies Act, 1956 subject to such approvals fromshareholders as & when necessary. Directors other than Managing Director, were paid during the year2002-03 sitting fees @ Rs.1000/- for each meeting of the Board of Directors or its Committees attendedby them.

The details of the remuneration paid to the Directors during the financial year 2002-03 are as under :

(Rupees)

Name Salary Perquisites Contribution Contribution Sitting Totalto pension to leave salary Fees

Shri Ashok Narayan, Chairman - - - - 10,000/- @ 10,000/-Shri G Subba Rao - - - - 4,000/- @ 4,000/-Dr. Manjula Subramaniam - - - - 6,000/- @ 6,000/-Shri N R Krishnan - - - - 20,000/- 20,000/-Shri S R Vengsarker - - - - 17,000/- 17,000/-Shri R S Agarwal - - - - 7,000/- 7,000/-Shri C K Koshy - - - - 1,000/- @ 1,000/-Shri Balwant Singh, MD 4,30,911/- 69,593/- 62,859/- 30,496/- - 5,93,859/-Shri A D Desai - - - - 12,000/- @ 12,000/-Dr. K D Jeswani - - - - 37,000/- 37,000/-Dr. K Kameswara Rao - - - - 7,000/- * 7,000/-Shri S G Mankad - - - - 2,000/- @ 2,000/-Shri Ashok P Bhavsar - - - - 39,000/- 39,000/-

@ Deposited in the Govt. Treasury.* Paid to IDBIThe Company does not currently have a Stock Option Plan.

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5. SHAREHOLDERS COMMITTEE

Shareholders’/Investors’ Grievance Committee :

Four meetings of the Committee were held during the year 2002-03 wherein status of investors grievanceswere discussed.

Shares-cum-Debentures Committee :

The composition of the Committee and number of the meetings held during the year are furnished hereunder :

Sr. Name of the Member Meetings held No. of MeetingsNo. during the tenure attended

1. Dr. K D Jeswani * 20 20

2. Shri Ashok Narayan @ 3 3

3. Shri Ashok P Bhavsar ** 21 20

4. Shri Balwant Singh 24 21

* Ceased to be Director & Committee Member from 22-01-2003.@ Appointed on 27-01-2003 as Chairman and Committee Member.** Ceased to be Director & Committee Member from 31-01-2003.

During the year, the Company received only 11 complaints from the Stock Exchanges /SEBI/Departmentof Company Affairs, which have been redressed to the satisfaction of the shareholders. Shri V D Nanavaty,Company Secretary was the Compliance Officer of the Company. During the year 2002-03, the Companyhad received 2240 applications for transfer / transmission / transposition of shares which were processed.

As on 31st March, 2003, 22 requests consisting 739 equity shares were pending for transfer, transmissionand transposition of equity shares of the Company. These have been approved/dealt with by 7-4-2003.

Upto 31-3-2003, 4,67,74,176 Equity Shares of Rs.10/- each (58.69%) were dematerialised.

Effective from 30-3-2003 the Board has decided to merge the Shareholders’/Investors’ Grievance Committeewith the Shares-cum-Debentures Committee and renamed it as Shares-cum-Debentures Transfer and InvestorsGrievance Committee. (1) Shri Ashok Narayan, Chairman (2) Shri C K Koshy, Director and (3) Shri Balwant Singh,Managing Director were the initial members of the Committee. To facilitate quick response to shareholders,the authority to approve transfer etc. upto 500 shares has been delegated to the Company Secretary/Manager(Secretarial & Legal). The proposals for transfer etc. of shares above 500 nos. are placed before the aforesaidCommittee. As per mandatory requirements of SEBI vide Circular No.D&CC/FITTC/CIR-16/2002 dated 31-12-2002, Company has complied with Secretarial Audit in respect of its share capital.

6. GENERAL BODY MEETINGS

The Annual General Meetings of the Company are held at the Registered Office of the Company. The detailsas to the timings, date and venue of the last three meetings are as under :

YEAR DATE & (Day) TIME VENUE

1999-2000 38th AGM 22-9-2000 (Friday) 11.00 a.m. Regd.Office of the Company situated atP.O.Fertilizernagar - 391 750, Dist. Vadodara

2000-2001 39th AGM 28-9-2001 (Friday) 9.00 a.m. -do-

2001-2002 40th AGM 27-9-2002 (Friday) 09.00 a.m. -do-

No postal ballots were used for voting at aforesaid meetings. At the forthcoming Annual General Meeting,there is no item on the agenda that needs approval by postal ballot.

7. DISCLOSURES

There are no materially significant related party transaction made by the Company with its Promoters,Directors or Management, their subsidiaries or relatives etc. that may have potential conflict with the interestof the Company at large.

During the last three years, there were no strictures or penalties imposed by either SEBI or the Stock Exchangesor any statutory authority for non compliance of any matter related to capital markets.

24


8. MEANS OF COMMUNICATION

The company’s results and official news releases are displayed on the Company’s Web-site www.gsfclimited.com.The quarterly financial results are published in the national and regional newspapers. The presentationabout Company’s performance etc. is made to the Institutional Investors / Financial Analysts, as and whenconsidered necessary.The Management Discussion and Analysis Report forms a part of this Annual Report.

9. GENERAL SHAREHOLDER INFORMATION(a)(a)(a)(a)(a) Annual General Meeting :Annual General Meeting :Annual General Meeting :Annual General Meeting :Annual General Meeting :

– Date and Time : September 26, 2003 at 9.00 a.m.– Venue : Registered Office of the Company at

P.O. Fertilizernagar - 391 750 Dist. Vadodara (b)(b)(b)(b)(b) Financial Calendar :Financial Calendar :Financial Calendar :Financial Calendar :Financial Calendar :

TentativeUnaudited Results for quarter ending June 30, 2003 : Before end of July, 2003Unaudited Results for quarter ending Sept. 30, 2003 : Before end of October, 2003Unaudited Results for quarter ending Dec. 31, 2003 : Before end of January, 2004Unaudited Results for quarter ending March 31, 2004 : Before end of April, 2004Audited Results for year ending March 31, 2004 : Before end of June, 2004

(c)(c)(c)(c)(c) Book closure date :Book closure date :Book closure date :Book closure date :Book closure date : 11th September, 2003 to 26th September, 2003 (Both days inclusive).(d)(d)(d)(d)(d) Dividend payment date :Dividend payment date :Dividend payment date :Dividend payment date :Dividend payment date : Not applicable.(e)(e)(e)(e)(e) (i)(i)(i)(i)(i) Listing of Equity Shares on Stock Exchanges at :Listing of Equity Shares on Stock Exchanges at :Listing of Equity Shares on Stock Exchanges at :Listing of Equity Shares on Stock Exchanges at :Listing of Equity Shares on Stock Exchanges at :

Vadodara (Regional Stock Exchange), Mumbai, Ahmedabad,Kolkata, New Delhi, Chennai and National Stock Exchange (NSE)Note : It is proposed to delist the equity shares of the Company from all or any of the following

Stock Exchanges : The Stock Exchange, Ahmedabad, The Calcutta Stock ExchangeAssociation Ltd., Kolkata, The Delhi Stock Exchange Association Ltd., New Delhi andMadras Stock Exchange Ltd., Chennai at an appropriate time in future.

(ii)(ii)(ii)(ii)(ii) Stock Code :Stock Code :Stock Code :Stock Code :Stock Code :The Stock Exchange, Mumbai :Equity Shares –Physical Segment : “690”Demat Segment : “500690”

(iii)(iii)(iii)(iii)(iii) Demat ISIN Number in NSDL & CDSL for Equity SharesDemat ISIN Number in NSDL & CDSL for Equity SharesDemat ISIN Number in NSDL & CDSL for Equity SharesDemat ISIN Number in NSDL & CDSL for Equity SharesDemat ISIN Number in NSDL & CDSL for Equity Shares ::::: INE026A01017(iv) Stock Market Data – High, Low during each month in last Financial Year and Performance in

comparison to broad-based indices such as BSE Sensitive Index (200 Scrips)

GSFC Share Price BSE Sensex GSFC Share Price BSE SensexMonth High (Rs.) High Low (Rs.) Low

Apr-2002 30.50 411.77 21.60 389.90May-2002 30.95 409.89 20.00 377.32Jun-2002 40.65 405.37 25.95 385.34Jul-2002 41.00 403.19 22.00 360.97Aug-2002 27.00 377.70 19.90 359.72Sep-2002 24.00 378.57 16.60 353.86Oct-2002 18.90 362.43 14.50 342.64Nov-2002 18.00 379.33 15.00 354.04Dec-2002 29.85 394.62 17.50 376.17Jan-2003 25.90 399.43 20.40 380.68Feb-2003 24.60 391.44 20.20 379.38Mar-2003 21.15 389.31 15.00 359.12

25

(f)(f)(f)(f)(f) Share Transfer System :Share Transfer System :Share Transfer System :Share Transfer System :Share Transfer System :Share Transfer in physical form can be lodged with M/s. MCS Ltd., Registrars & Transfer Agents or atthe Registered Office of the Company. Share Transfer requests received are normally processed within15 to 25 days from the date of receipt, if the documents are complete in all respects..All requests for dematerialisation of shares are processed and confirmation thereof is conveyed by theRegistrars & Share Transfer Agents of the Company viz. M/s. MCS Ltd., Baroda to the depositories within7 to 15 days from the date of the receipt thereof.

(g)(g)(g)(g)(g) Distribution of shareholding as on 31st March, 2003 :Distribution of shareholding as on 31st March, 2003 :Distribution of shareholding as on 31st March, 2003 :Distribution of shareholding as on 31st March, 2003 :Distribution of shareholding as on 31st March, 2003 :As mentioned elsewhere in the Annual Report.

(h)(h)(h)(h)(h) Dematerialisation of shares :Dematerialisation of shares :Dematerialisation of shares :Dematerialisation of shares :Dematerialisation of shares :Over 58% of the shares have been dematerialised upto 31st March, 2003.

(i)(i)(i)(i)(i) Plant locations :Plant locations :Plant locations :Plant locations :Plant locations :Main Plants : Fertilizernagar, Vadodara DistrictPolymers Unit : Nandesari, Vadodara DistrictSikka Unit : Moti Khavdi, Jamnagar DistrictFibre Unit : Kuwarda, Surat District

(j)(j)(j)(j)(j) Address for correspondence :Address for correspondence :Address for correspondence :Address for correspondence :Address for correspondence :Registrars & Transfer Agents for Equity Shares of the Company :M/s. MCS LimitedNeelam Apartments, 1st Floor, 88, Sampatrao Colony,Behind Standard Chartered Bank, Productivity Road, Vadodara - 390 007Tel.Nos. 0265-2339397/2314757, Fax No. 0265-2341639E-mail : [email protected]

AUDITORS’ CERTIFICATETo the Shareholders,

We have examined the compliance of conditions of Corporate Governance by Gujarat State Fertilizers &Chemicals Limited for the year ended on 31st March, 2003 as stipulated in clause 49 of the Listing Agreementof the said Company with stock exchange.

The compliance of conditions of Corporate Governance is the responsibility of the management. Ourexamination was limited to procedures and implementation thereof, adopted by the Company for ensuringthe compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinionon the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certifiythat the Company has complied with the conditions of Corporate Governance as stipulated in the abovementioned Listing Agreement.

We state that in respect of investor grievances received during the year ended 31st March, 2003, no investorgrievances are pending against the Company as per the records maintained and information given by theCompany and presented to the Shareholders’/Investors’ Grievance Committee.

We further state that such compliance is neither an assurance as to the future viability of the Companynor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For Ghiya & Co.Chartered Accountants

Place : Fertilizernagar Devendra UpadhyayDate : 27th June, 2003 Partner

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1 MACRO–ECONOMIC AND INDUSTRY DEVELOPMENTS

Financial year 2002-03 was the challenging year as most of the economies globally was still under the grip ofrecession. No doubt, Indian economy experienced recovery in the growth in 2002-03 which was very significantin view of the several downside risks which prevails in international & domestic economy. The Indian economywas adversely affected by the poor agricultural output due to monsoon failure, global economic slowdown andgeo-political tensions on account of the Iraq crisis. The Gross Domestic Product (GDP) of the Indian economyis expected to show a growth of around 4.4 % for the year 2002-03. This is mainly on account of the poorperformance of the agriculture sector which is expected to show a negative growth of 3.1%. While the servicessector continued its strong growth (7.1%), what was heartening was the performance of the industrial sectorthat is estimated to have shown a growth of 6.1%. The main contributor to this industrial growth has beenthe infrastructure segment.The deceleration in agriculture sector had impacted the fertilizer industry also. The uncontrollable factors likeerratic monsoon in tandem with unfavourable policy of Government of India affected fertilizer industry in general& GSFC in particular.In Fertilizers and Industrial Products, the Company has the following share in the Indian Industry-GSFC’s Share in Total Domestic Capacity (000 MT)

Product All India Capacity GSFC’s Capacity % share of GSFC

Urea 20749.1 364 1.75A S 764.5 244 31.92DAP 6364 984 15.46A P S 1003.5 256 25.51Nylon-6 Chips 15 10 66.67Caprolactam 120 70 58.33Melamine 15 15 100.00

2 OPPORTUNITIES & THREATS2.1 Government of India had announced the “Group Pricing Policy“ for urea units from 1.4.2003 whereby the old

RPS has been replaced by the new group pricing policy based on feedstocks. This scheme will be implementedin stages .The goal of the new pricing policy is to encourage efficiency parameters of international standardsbased on the usage of most efficient feedstock & state of art technology.There are six groups based on vintage and feedstock for determining the group based concession under thenew Scheme, GSFC has been classified in mixfeed category. The other units in mixfeed category are IFFCO, Kalol& RCF, Thal. Govt. of India has provisionally announced the group concession applicable to GSFC asRs. 8,178/- per MT of Urea for April-June, 2003 quarter against the latest available Retention Price ofRs. 9,210/- for October-December, 2002.

2.2 For Complex Fertilizer the Tariff Commission Report is proposed to be implemented for pricing of the complexfertilizers. Ammonium Phosphate Sulphate (APS 20:20:0) manufacturing facilities at Sikka and Fertilizernagarwill be covered under Tariff Commission Report. APS production at Fertilizernagar uses Captive Ammoniausing a mix of NG and Naphtha. There is substantial difference between imported ammonia and captiveammonia cost rendering units manufacturing APS from captive Ammonia with mixed feed at loss. ThoughFICC has recognized GSFC unit as mixed feed/fuel for urea, in case of APS, it is being bracketed as gasbased unit.

2.3 For DAP, according to Tariff Commission, the units are classified into 2 groups- Units manufacturing DAPfrom Captive PA and Units manufacturing DAP from Imported PA.In case of Sikka Unit using imported PA, PA prices considered in Tariff Commission Report are on lowerside and not reflective of actual procurement prices. Capacity mismatch arises between PA and DAP becauseof reassessment of capacity. While in case of Fertilizernagar using captive PA, Rock Phosphate prices consideredby Tariff Commission are also on much lower side than actual procurement prices of the units.However it is now learnt that Govt. of India is reconsidering various proposals in the said Tariff CommissionReport and have constituted an Inter Ministerial Group (IMG) to examine the proposals of report and therepresentation made by various companies.For above fertilizer policy related issues, we are taking up through FAI.

2.4 GSFC is protected to some degree from changes in the DAP subsidy system because of its spread of productionbetween rock imports and phosphoric acid imports. However, any moves by the government to lower thesubsidy of rock-based producers or the differential between imported DAP and domestically produced DAPcould impact negatively on GSFC’s business.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

27

2.5 Availability of water from “Sardar Sarovar Project” will accelerate the consumption of fertilizers in Gujarat.This may help in pushing more quantity in home state and hence may enhance our realisation. More thanhalf of the areas where our depots are located will be getting the water from Sardar Sarovar and hencethe sales of fertilizers through this network will increase. Moreover, distribution deregulation of urea willresult in more availability of urea to depots. Availability of urea at depots will help in increasing the salesof other fertilizers at depots.

2.6 Reduction of import duty as per the WTO agreements, enabling dumping of cheaper imports may adverselyaffect domestic sales of industrial products. In Nylon Industry, imports of Nylon Filament & Tyre cord yarnand fabric may shrink the demand of Caprolactam for textile and tyre cord sector. In Fishnet Yarn Industry,imports of Nylon Filament and monofilament yarn & Fishing nets may have overall impact on Nylon Filamentindustry reducing consumption and demand of Nylon 6 Chips. Dumping of extrusion grade Nylon 6 Chipsfor monofilament may reduce sales and capacity utilization of domestic Nylon 6 manufacturers. Due tochanging consumer preference from Scooter to Motorbike, overall demand of Nylon 6 Chips for Engg.Components in two wheeler automobile segment may have an adverse impact. Some of the applicationsof Nylon 6 Chips for various engineering components in Textile, Automobile, Electrical may switch over toother competitive materials thereby adversely affecting demand of Nylon 6 Chips. Continuous shift in usagefrom Nylon tyres to steel radial tyres in Automobile industry, may reduce overall consumption and demandof Caprolactam in tyre cord sector.

2.7 International prices of various products such as Caprolactam, Nylon, Melamine, Ammonia improved thanprevious year low spells, however, international prices of various raw materials for these products such asBenzene, Naphtha, LSHS, Sulphur also increased in higher proportions thereby adversely affecting our margins.

2.8 With the help of newly developed Melamine based products, the commercial applications are being explored.Similarly to cater the tailor-made requirements of Nylon-6 based value added products, some of the gradesare under advanced stage of development. Successful commercialization of such promising products is likelyto enhance the overall demand of Melamine and Nylon-6.

3 Business Segment UpdateProductwise performance in terms of production and sales for ten years is as follows :

PARTICULARS UNIT 2002-03 2001-02 2000-01 1999-00 1998-99 1997-98 1996-97 1995-96 1994-95 1993-94

PRODUCTION

FERTILIZERS(loose) MT 1146668 1360661 1292283 1409520 1289755 1325643 1493460 1489239 1388499 1277392CAPROLACTAM MT 60004 59546 65051 64647 65987 59501 63901 65651 54037 51022

NYLON-6 MT 5424 5487 6698 - @ - @ - @ 4607 7524 7023 6844

MELAMINE MT 6643 11521 10527 10797 10193 6315 5440 5120 5390 5344ARGON 000NM3 2756 2785 2218 2620 2815 1752 1980 2202 2256 2207

MONOMER MT 3586 2665 4012 1965 3241 3096 3995 3288 3813 3923

SHEETS MT 469 358 745 650 1073 1116 1413 1148 1671 1782PELLETS MT 2114 2010 2119 1563 1667 950 1910 1747 1478 1299

NYLON FILAMENTYARN MT 5311 4084 5850 5647 5746 5931 6231 6824 5552 5271

NYLON CHIPS MT 2283 2073 3025 4077 3692 3504 2987 2172 1976 1370SALES

FERTILIZERS* MT 1221559 1330856 1183105 1318744 1408681 1414318 1440090 1297959 1425066 1299305

CAPROLACTAM* MT 46991 47707 60504 57720 43949 43057 50563 50641 51670 22134NYLON-6 MT 6307 5777 5254 1544 4939 4722 6708 7890 8303 7522

MELAMINE MT 10619 10062 17462 3687 7819 6593 4500 6570 4813 4651

ARGON 000NM3 2759 2817 2179 2627 2827 1717 1984 2138 2237 2198MONOMER* MT 1309 828 1315 103 552 1639 1007 1521 1174 1188

SHEETS MT 600 555 503 842 865 1161 1370 1508 1378 2066

PELLETS MT 2149 2361 1909 1552 1716 1591 1226 1553 1997 1543NYLON FILAMENTYARN MT 5251 3964 5404 5784 5696 5808 5791 6890 5573 4962

NYLON CHIPS MT 2351 2048 2642 3361 3299 2651 2082 1492 848 410

@ Plant under reconstruction * Excluding captive consumption

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3.1 TurnoverIn the Year 2002-03, total turnover of the Company was Rs. 1935 crores as against Rs. 2035 crores in 2001-02 registering a decrease of Rs. 100 crores. The sale of fertilizers were lower by Rs. 198.93 crores. For salesof industrial products, Company registered a turnover of Rs. 755.01 crores as against Rs. 656.08 crores inthe previous year. Decrease in turnover of Rs. 100.00 crores consisted of Rs. 17.17 crores due to lower pricerealization and Rs. 82.83 crores due to lower sales volume.Proportion of fertilizers and industrial products in total sales were as follows in the last two years :-

2002-03 2001-02

Rs.Cr % Rs.Cr %

Fertilizers 1180.221180.221180.221180.221180.22 60.9960.9960.9960.9960.99 1379.15 67.76

Industrial Products 755.01755.01755.01755.01755.01 39.0139.0139.0139.0139.01 656.08 32.24

1935.231935.231935.231935.231935.23 100.00100.00100.00100.00100.00 2035.23 100.00

3.2 Exports

Export sales during the year were as follows :

Product 2002-03 2001-02

MT Rs.Cr MT Rs.Cr

Caprolactam 98029802980298029802 50.5450.5450.5450.5450.54 18977 76.04

MEK-Oxime 1217 1217 1217 1217 1217 10.0810.0810.0810.0810.08 1043 8.78

Melamine 300300300300300 1.411.411.411.411.41 300 1.61

Nylon-6 235235235235235 1.441.441.441.441.44 0 0

Ammonium Sulphate 46824682468246824682 2.512.512.512.512.51 0 0

Total 65.9865.9865.9865.9865.98 86.43

The total exports of Caprolactam during the year 2002-2003 is down compared to the previous year mainly onaccount of non-availability of material either due to good domestic demand or reduced level of production/availability.

Company could break the ice with M/s. Agrolinz. Hence export of Melamine commenced once again and firstlot of 300 MTs was exported.

There has been significant improvement of 16.7% in the sales of MEK Oxime as compared to the previous year.The first ISO container of MEKO could also be despatched during the year.

Significant quantity of 235 MTs of Nylon-6 Chips were exported. Besides Company could also export AmmoniumSulphate for the first time.

4 Outlook

4.1 The Indian Economy alongwith the world economy passed through a difficult phase last year. However, it isnow slightly upward and there are expectations of revival in demand and industrial activity. The year startedwith poor demand and sluggish industrial activity with the slowdown deflation and deceleration in world economy.The problem was more compounded due to Iraq war which prompted the oil prices to shoot up to unprecedentedheight, but the product prices not following the suit. However, since then oil prices have stabilized at lowerlevels.

4.2 The feed stock prices are not yet guaranteed at the international parity level for fertilizer industry to facecompetition on a global basis. This is one of the important reasons why future growth of the industry cannotbe predicted with any certainty.

4.3 The Company is in an advanced stage of development of nature added products out of industrial products currentlyavailable, which would help to expand its product range and better price realization. Not stopping at this, formultifaceted development and utilization of its human assets, the Company is aggressively promoting its brandname in the field of consultancy by deputing its expert manpower in various organizations at national andinternational level.

5 Risk Management5.1 Company is exposed to risks in fertilizer business due to uncertain fertilizer pricing policies, on account of being

put in different feed stock groups for different fertilizers products, vagaries of changing hydrocarbon prices,

29

implementation of WTO obligations etc. All these factors have affected our margins, which are already underpressure. To overcome all these risks, the Company is making efforts to reduce costs, improve productivity, improveconsumption norms, adopt aggressive marketing, reduce manpower, reduce raw material and finished productsinventory etc.

5.2 The Company is successful in getting additional allocation of gas from GSPL and Gujarat Gas Trading Co.Ltd.to the tune of 2.5 lac sm3/day and 1.5 lac sm3/day respectively to curtail the feed stock cost of naphtha andLSHS.

6 Internal Control Systems

The Company maintains a system of internal controls including suitable monitoring procedures. The Companyhas engaged firms of Chartered Accountants for internal audit in respect of Head Office and the Units of theCompany. The internal auditors cover operational audit & review of business processes and performance, inaddition to transaction audit. The Audit Committee of the Board regularly reviews the reports of internal auditors.

7 Discussion on Financial Performance

The Gross Turnover of the Company decreased by Rs. 100 crores from Rs. 2035 crores in previous year toRs. 1935 crores during 2002-03. In the current year sales of the manufactured fertilizers at 12.22 lakhs MT werelower by 1.09 lakhs MT. Average price realisation of Urea was lower due to downward adjustment in retentionprice on account of 7th and 8th pricing period and coverage of Ammonia-4 plant under Retention Price Scheme.Similarly, reduction in subsidy support on DAP affected the average price realisation of DAP. However, pricerealisation of Caprolactam was better then the previous year. On overall basis, the turnover was lower this yearboth due to lower price realisation and lower sales volume. Other Income was higher during the year byRs. 3.21 crores.

The average cost of raw material per MT increased during the year. Major price increase took place in caseof Benzene from Rs. 14096 to Rs. 20969 (49%), in Sulphur from Rs. 1992 to Rs. 3302 (66%) and in Naphthafrom Rs. 12467 to Rs. 14838 (19%). The average price of LSHS was also higher by about 34% during the year.Lower production at Fertilizernagar and Sikka Unit mainly reduced the manufacturing expenses of the Company.Personnel cost increased largely due to provision for deferred LTC liability. Favourable exchange variation whichis grouped as Other Income, and decreased lease rentals due to completion of the lease period lowered theadministration expenses during 2002-03 when compared with previous year. Marketing expenses decreased mainlydue to lower sales volume of fertilizers.

Operating profit (i.e. profit before interest, tax and depreciation) for the current year was Rs.100 crores as againstRs. 226 crores in the previous year, a reduction from 11.54% to 5.45%. Loss after considering interest anddepreciation but before exceptional items for 2002-03 was to the tune of Rs. 228.28 crores as against a lossof Rs. 87.45 crores in the previous year. The downward adjustments in retention price of Urea on account ofreview of 7th & 8th pricing period policy and inclusion of Ammonia-4 plant under Retention Price Scheme hasbeen shown as exceptional item. The net result for the year after considering provision for taxation and theexceptional items is a loss of Rs. 390.84 crores as against Rs. 48.06 crores in the previous year.

In order to overcome the tremendous liquidity pressure, the Company had submitted a restructuring proposalfor privately placed debentures / bonds and term loans with Financial Institutions and Banks. Necessary consentswere received from the lenders except from some of the Bondholders of 12.5% Bonds. The Company’s Debt-Equity ratio as on 31st March 2003 was 2.89:1 as against the ratio of 1.64:1 at the end of the previous financialyear. The gross value of fixed assets increased from Rs.2856.99 crores to Rs.3057.31 crores. The increase is dueto the commissioning of C Train at Sikka unit in October, 2002 and capitalisation of foreign exchange loss onAmmonia-4 project loans. The deferred tax liability (Net of Deferred Tax Assets of Rs. 193.61 crores) as on31-3-2003 is Rs. 272 crores.

8 Human Resources

The Company continued to have cordial & harmonious relations with its employees. Presently 4,862 employeesare on the roll of the Company. Environmental concerns are adequately reflected in the annual report elsewhere.The company has been discharging its social responsibility by providing help in welfare measures to the surroundingvillages.

9 Cautionary Note

Certain statements in the Management Discussion and Analysis Report may be forward looking and are statedas required by applicable laws & regulations. Many factors may affect the actual results, which could be differentfrom what the Directors envisage in terms of future performance and outlook.

30


FINANCIAL HIGHLIGHTS OF TEN YEARSPARTICULARS 2002-03 2001-02 2000-01 1999-00 1998-99 1997-98 1996-97 1995-96 1994-95 1993-94OPERATING RESULTS (Rs. in Crs.)

GROSS INCOME # 1887 2002 2213 2151 2091 2068 1942 1851 1672 1202GROSS PROFIT (86) 49 138 111 232 261 282 271 172 94DEPRECIATION 142 137 132 88 85 73 65 65 58 54PROFIT/(LOSS) BEFORE TAX (228) (88) * 6 23 147 189 217 206 114 40TAX – (21) – 3 15 19 31 – – –PROFIT/(LOSS) AFTER TAX (228) (67) * 6 20 132 170 186 206 114 40EXCEPTIONAL ITEMS (163) 19 – – – – – – – –PROFIT/(LOSS) AFTER TAX &EXCEPTIONAL ITEMS (391) (48) – – – – – – – –DIVIDEND – – – 4 36 36 31 27 22 22DIVIDEND TAX – – – – 4 4 3 – – –RETAINED EARNINGS (391) (48) * 6 16 92 130 152 179 92 18

SOURCES & APPLICATION OF FUNDS (Rs. in Crs.)SOURCES OF FUNDSSHARE CAPITAL 80 80 113 113 113 80 78 66 66 66RESERVES & SURPLUS 437 828 1177 1394 1378 1286 1141 885 706 613LOANS 1470 1473 1519 1507 1383 1276 1371 1241 1058 1068

FUNDS EMPLOYED 1987 2381 2809 3014 2874 2642 2590 2192 1830 1747APPLICATION OF FUNDSFIXED ASSETS (GROSS) 3060 3029 3023 2902 2845 2643 2406 2016 1711 1561DEPRECIATION 1162 1023 911 781 693 612 540 481 423 399FIXED ASSETS (NET) 1898 2006 2112 2121 2152 2031 1866 1535 1288 1162INVESTMENTS 127 134 138 136 147 140 129 106 100 100CURRENT ASSETS (NET) 226 505 549 756 571 456 569 525 442 485DEFERRED TAX LIABILITY (NET) (272) (272) – – – – – – – –MISC.EXP.(to the extent not w/off) 8 8 10 1 4 15 26 26 – –NET ASSETS EMPLOYED 1987 2381 2809 3014 2874 2642 2590 2192 1830 1747AMOUNT PER SHARE (Rupees)SALES 230 255 268 258 251 251 237 274 236 173EARNING (49) (6) * 1 2 17 21 @ 27 31 17 6EQUITY DIVIDEND – – – – 4.50 4.50 4.50 4.00 3.30 3.30BOOK VALUE 64 113 156 185 182 169 149 139 116 102MARKET PRICE : HIGH 41 27 41 66 128 141 170 180 276 313

LOW 13 8 19 32 32 68 70 105 153 190

# Gross Income from 2001-02 does not include Excise duty recovered* After adjusting exceptional item of Rs. 224.02 Crores against General Reserves.@ At weighted average basis on the paid up capital.

DISTRIBUTION OF EQUITY SHAREHOLDING AS ON 31-3-2003NO. OF NO. OF % TO TOTAL

SHAREHOLDERS SHARES HELD SHARES

GROUP OF SHARES

0001 TO 50 91359 1988215 2.490051 TO 100 17018 1357307 1.700101 TO 250 14282 2420170 3.040251 TO 500 7795 2842448 3.570501 TO 1000 2873 2130276 2.671001 & ABOVE 1909 68957090 86.53

135236 79695506 100.00CATEGORYState Financial Corporations & its Associate Companies 7 30659981 38.47Public Financial Institutions & Insurance Companies 33 26396304 33.12Companies, Nationalised Banks & other Banks 1002 5791425 7.27Individuals, Co-operative Societies & Banks 134194 16847796 21.14

135236 79695506 100.00

31

We have audited the attached Balance Sheet of Gujarat State Fertilizers & Chemicals Limited, as at 31st

March 2003 and also the Profit and Loss Account for the year ended on that date annexed thereto andthe cash flow statement for the period ended on that date in which are incorporated the accounts of thePolymers Unit and Fibre Unit of the Company, audited by another firm of Chartered Accountants. Thesefinancial statements are the responsibility of the Company’s Management. Our responsibility is to expressan opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988 issued by the CentralGovernment of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclosein the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that :(i) we have obtained all the information and explanations, which to the best of our knowledge and belief,

were necessary for the purpose of our audit;(ii) in our opinion, proper books of account as required by law have been kept by the company so far

as appears from our examination of those books (and proper returns adequate for the purposes ofour audit have been received from the Polymers and Fibre Units not visited by us. The Branch Auditor’sReport(s) have been forwarded to us and have been appropriately dealt with);

(iii) the Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the booksof account (and with the audited returns from the branches);

(iv) in our opinion, the Balance Sheet and Profit & Loss Account dealt with by this report comply withthe accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(v) on the basis of written representations received from certain directors of the Company and from themanagement in respect of other directors exempted vide General Circular No.8/2001-CLV dated 22-3-2002 issued by Ministry of Law, Justice and Company Affairs, Department of Company Affairs and takenon record by the Board of Directors, we report that none of the Directors is disqualified as on 31st

March 2003 from being appointed as a Director of the Company in terms of clause (g) of Sub-section(1) of Section 274 of the Companies Act, 1956;

(vi) in our opinion and to the best of our information and according to the explanations given to us andsubject to :(1) Note No.3 of the claim of increased gas price by the Oil & Natural Gas Commission (ONGC) for

the principal as well as interest thereon.(2) Note No.6 of discontinuing the policy of accounting the Retention Price escalation claim on

lodgement basis impact of which is not ascertainable.(3) Note No.14 of exceptional item of Rs.162.54 Crores representing adjustment of Retention Price

Scheme of 7th and 8th pricing period and coverage of Ammonia IV Plant.(4) Note No.17 of Provision not considered out of the order of Commissioner of Labour.and other notes thereon, the said accounts give the information required by the Companies Act, 1956,in the manner so required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India :(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2003;(b) in the case of the Profit and Loss Account, of the loss for the year ended on that date; and(c) in the case of cash flow statement, of the cash flows for the year ended on that date.

For GHIYA & COMPANYChartered Accountants

Place : Fertilizernagar, Devendra UpadhyayDate : 27th June, 2003. Partner

.

Auditors’ Report to the Members of Gujarat State Fertilizers & Chemicals Ltd.

32


(Referred to in our report of even date on the accounts for the year ended 31st March, 2003 of GujaratState Fertilizers & Chemicals Limited)

1. The Company has maintained proper records showing full particulars including quantitative details andsituation of its fixed assets. The fixed assets have been physically verified by the Management duringthe year and we are informed that no material discrepancies were noticed on such verification.

2. None of the fixed assets have been re-valued during the year.

3. The stocks of finished goods, stores, spare parts and raw materials have been physically verified duringthe year by the management. In our opinion the frequency of verification is reasonable.

4. The procedures of physical verification of stocks followed by the management are reasonable andadequate in relation to the size of the Company and the nature of its business.

5. As informed to us, the discrepancies noticed on verification between the physical stocks and the bookrecords were not material.

6. On the basis of our examination of stock records, we are of the opinion that the valuation of stockis fair and proper in accordance with the normally accepted accounting principles.

7. The Company has not taken any loans, secured or unsecured, from the companies, firms or other partieslisted in the register maintained under Section 301 of the Companies Act, 1956. In terms of Section370(6) of the Companies Act 1956 provisions of the said section are not applicable to a company onor after 31st October, 1998.

8. The Company has not granted any loans, secured or unsecured, to companies, firms or other partieslisted in the register maintained under Section 301 of the Companies Act, 1956 except to a subsidiaryin respect of which the interest has not been charged with effect from 1-4-2002. Further, in termsof Section 370(6) of the Companies Act 1956, provisions of the said section are not applicable to aCompany on or after 31st October, 1998.

9. The parties to whom loans or advances in the nature of loans have been given are repaying the principalamount and interest wherever applicable, as stipulated except in case of a subsidiary company andof certain ex-employees for which the management has taken reasonable steps for recovery of thesame.

The Company has also given interest free loans to Gujarat State Machine Tools Corporation Ltd. (GSMT),Gujarat Agro Industries Corporation Ltd. (GAIC) for Gujarat Tractor Corporation Ltd. (GTCL) towardsequity contribution under rehabilitation scheme of GSMT & GTCL; to Gujarat Acrylic Ltd. (GAL) andGujarat Agri Processing Co. Ltd. (GAPCL) towards equity participation.

10. In our opinion and according to the information and explanations given to us, there are adequateinternal control procedures commensurate with the size of the Company and the nature of its businessfor the purchase of stores, raw materials, plant and machinery, equipments and other assets and withregard to the sale of goods.

11. According to the information and explanations given to us, there are no transactions for purchase ofgoods and materials and sale of goods, materials and services aggregating during the year to Rs. 50,000or more in respect of each party made in pursuance of contracts or arrangements entered in the registermaintained under Section 301 of the Companies Act, 1956.

12. As explained to us, the Company has a regular procedure for the determination of unserviceable ordamaged stores and raw materials. Adequate provisions have been made in the accounts for the lossarising on the items so determined.

13. In our opinion and according to the information and explanations given to us, the Company has complied

Annexure to the Auditors’ Report

33

Annexure to the Auditors’ Report (Contd.)

Comments of the Comptroller and Auditor General of India under Section 619 (4) read with Section619-B of the Companies Act, 1956 on the accounts of Gujarat State Fertilizers and Chemicals Limited,Vadodara for the year ended 31 March, 2003.

I have to state that the Comptroller and Auditor General of India has no comments upon or supplementto the Auditors’ Report under Section 619 (4) read with Section 619-B of the Companies Act, 1956 on theAccounts of Gujarat State Fertilizers and Chemicals Limited, Vadodara for the year ended 31 March, 2003.

Ahmedabad RAGHUBIR SINGHDated : 01-08-2003 PR. ACCOUNTANT GENERAL

with the provisions of Section 58A of the Companies Act, 1956 and the Companies (Acceptance ofDeposits) Rules, 1975 with regard to deposits accepted from the public.

14. In our opinion, reasonable records have been maintained by the Company for the sale and disposalof realisable by-products and scrap.

15. The Company has appointed firms of Chartered Accountants as its internal auditors in respect of HeadOffice, Sikka, Polymers and Fibre Units. On the basis of the reports by Internal Auditors to themanagement, the internal audit system is, in our opinion, commensurate with the size of the Companyand nature of its business.

16. We have broadly reviewed, without carrying out a detailed examination of the books of accountmaintained by the Company pursuant to the order made by the Central Government for the maintenanceof cost records under Section 209(1)(d) of the Companies Act, 1956, in respect of manufacture ofFertilizers, Sulphuric Acid and Manmade Fibre Yarn and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained.

17. According to the records of the Company, Provident Fund dues have been regularly deposited withthe appropriate authorities. The Company has obtained exemption from the provisions of Employees’State Insurance Scheme.

18. According to the information and explanations given to us, no undisputed amounts payable in respectof income tax, wealth tax, sales tax, customs duty and excise duty were outstanding as at 31st March,2003 for more than six months from the date they became payable.

19. According to the information and explanations given to us, no personal expenses of employees orDirectors have been charged to revenue account other than those payable under contractual obligationsor in accordance with the generally accepted business practice.

20. The Company is not a sick industrial company with the meaning of Sick Industrial Companies (SpecialProvisions) Act, 1985.

21. In relation to trading activities of the Company, adequate provision has been made for loss in respectof damaged goods so determined.

For GHIYA & COMPANYChartered Accountants

Place : Fertilizernagar, Devendra UpadhyayDated : 27th June, 2003. Partner

34


Balance Sheet as at 31st March, 2003(Rs. in lakhs)

Schedule As At As At31st March, 2003 31st March, 2002

SOURCES OF FUNDS

Shareholders’ Funds :

Share Capital 1 7973.68 7973.68

Reserves and Surplus 2 43712.51 82795.91

51686.19 90769.59Loan Funds :

Secured Loans 3 108293.93 111703.10

Unsecured Loans 4 38723.29 35587.60

147017.22 147290.70

Total 198703.41 238060.29

APPLICATION OF FUNDS

Fixed Assets : 5

Gross Block 305731.11 285698.51

Less: Depreciation 116181.25 102365.47

Net Block 189549.86 183333.04

Capital work in progress 276.25 196.04

Projects under execution – 17030.15

189826.11 200559.23

Investments 6 12632.91 13386.75

Current Assets, Loans and Advances :

Income accrued on Investments 2.58 70.37

Inventories 7 41213.26 48480.81

Sundry Debtors 8 30928.96 55101.72

Cash and Bank Balances 9 4202.89 8670.63

Loans and Advances 10 24185.64 24127.79

Total c/f. 100533.33 202459.02 136451.32 213945.98

(Contd.)

35

Total b/f. 100533.33 202459.02 136451.32 213945.98

Less: Current Liabilities and Provisions :

Current Liabilities 11 72294.44 80783.41

Provisions 12 5609.44 5121.31

77903.88 85904.72

Net Current Assets 22629.45 50546.60

Deferred Tax :[Refer note 11(d) of Schedule-22]

Deferred Tax Assets 19360.97 19360.97

Deferred Tax Liability (46561.01) (46561.01)

(27200.04) (27200.04)

Miscellaneous Expenditure 814.98 767.75(To the extent not written off or adjusted)(Refer note 21 of Schedule-22)

Total 198703.41 238060.29

Significant Accounting Policies 21

Notes on Accounts 22

Gautam Sen A. K. LukeExecutive Director (Finance) Managing Director

V. D. NanavatyCompany Secretary N. R. Krishnan

R. S. AgarwalFertilizernagar S. R. Vengsarker27th June, 2003 Directors

As per our attached Report of even date


Fertilizernagar Devendra Upadhyay27th June, 2003 Partner


Balance Sheet as at 31st March, 2003 (Contd.)(Rs. in lakhs)

36


Profit and Loss Account for the year ended 31st March, 2003

(Rs. in lakhs)

Schedule For the year ended For the year ended31st March, 2003 31st March, 2002

INCOME

Sales 13 193523.19 203523.33

Less : Excise Duty recovered on Sales 9870.79 8080.22

Net Sales 183652.40 195443.11

Other Income 14 5047.63 4726.44

Total 188700.03 200169.55

EXPENDITURE

Materials, Manufacturing &Operating Expenses 15 130147.16 138932.25

Personnel Expenses 16 17517.16 15675.01

Administration, Marketing &Other Expenses 17 18030.99 20407.09

Purchase of Finished Products 283.66 472.77

Interest :

On Debentures/Bonds and Fixed Loans 10489.33 10625.62

Others 6587.10 7034.03

17076.43 17659.65

Depreciation 14236.64 13651.45

Sub Total 197292.04 206798.22

(Increase)/Decrease in Stock ofFinished products, Trading Goodsand Stock-in-Process 18 12720.99 2121.08

Total 210013.03 208919.30

Balance (21313.00) (8749.75)

Prior Period Adjustments (Net) 19 (1515.01) 4.75

Loss before Taxes & Exceptional Items (22828.01) (8745.00)

Provision for Taxation

Current Taxation (2.00) (2.00)

Deferred Tax (Net) — 2058.74

(2.00) 2056.74

Loss after Taxes but before Exceptional Items (22830.01) (6688.26)

Exceptional Items (16253.83) 1881.99(refer note 14 of Schedule-22)

Loss after Exceptional Items (39083.84) (4806.27)

(Contd.)

37


Balance brought forward from last year –– —

Excess Provision for Taxation written back 0.44 2.04

Investment Allowance Reserve written back — 1910.27

Debenture/Bond RedemptionReserve written back 5137.50 —

Balance in Profit & Loss Account (33945.90) (2893.96)

Transferred from General Reserve 33945.90 2893.96

Balance Carried to Balance Sheet — —


Weighted average number of Equity Shares 79736830 79736830

Basic and Diluted Earnings Per Share (in Rs.) (49.02) (6.03)

Nominal value per share (in Rs.) 10.00 10.00

Pre-operative Expenses 20










Profit and Loss Account for the year ended 31st March, 2003 (Contd.)

(Rs. in lakhs)

38


Schedules Forming Part of Balance Sheet

SCHEDULE - 1 SHARE CAPITAL(Rs. in lakhs)

As At As At31st March, 2003 31st March, 2002

Authorised :1,60,00,000 Redeemable Cumulative Preference

Shares of Rs.100 each 16000.00 16000.0020,00,00,000 Equity Shares of Rs.10 each 20000.00 20000.00

36000.00 36000.00Issued :

7,98,24,370 Equity Shares of Rs.10 each 7982.44 7982.447982.44 7982.44

Subscribed :7,98,13,937 Equity shares of Rs.10 each 7981.39 7981.39

7981.39 7981.39Paid-up :

7,96,95,506 Equity Shares of Rs.10 each 7969.55 7969.551,16,091 Add : Forfeited Equity Shares 4.13 4.13

(Amount originally paid up)7973.68 7973.68

Total 7973.68 7973.682,340 Equity Shares forfeited and amount

transferred to Capital Reserve inearlier years.

Notes :(1) Out of the Equity Shares mentioned above :

(a) Under the scheme of amalgamation with the Company(i) 5,86,390 shares of Rs. 10 each were issued to the shareholders of erstwhile Polymers Corporation

of Gujarat Limited.(ii) 18,57,600 shares of Rs.10 each were issued to the shareholders of erstwhile Gujarat Nylons

Limited.(b) 3,12,41,915 shares of Rs.10 each were issued as fully paid-up bonus shares by capitalisation of

Reserves and Share Premium Account.

SCHEDULE - 2 RESERVES AND SURPLUS(Rs. in lakhs)

Balance as Additions Deductions Balance as Balance asat 1st at 31st at 31st

April, 2002 March, 2003 March, 2002

Capital Reserve I 3.43 — — 3.43 3.43Capital Reserve II 1248.77 — — 1248.77 1248.77Capital Redemption Reserve 3335.00 — — 3335.00 3335.00Share Premium Account 30524.02 — — 30524.02 30524.02Debenture/Bond Redemption Reserve 12350.00 — 5137.50 (a) 7212.50 12350.00General Reserve 35334.69 — 33945.90 (a) 1388.79 35334.69Total Reserves 82795.91 — 39083.40 43712.51 82795.91Profit and Loss Account — — — — —

Total 82795.91 — 39083.40 43712.51 82795.91

(31-3-2002) (117683.92) — (34888.01) (82795.91) (117683.92)

(a) Transferred to Profit & Loss Account.

39


SCHEDULE - 3 SECURED LOANS(Rs. in lakhs)


A] Debentures / Bonds :i) Secured Redeemable Non-convertible

debentures of Rs.100/-each 8000.00 8000.00(on private placement basis) *10,00,000 - 14.5%70,00,000 - 16.25%

ii) 2,500 - 12.5% Secured RedeemableNon-Convertible Bonds of Rs.500000 each 12500.00 12500.00(on private placement basis)

iii) 1,670 - 12.6% Secured RedeemableNon-Convertible Bonds of Rs.500000 each 8350.00 8350.00(on private placement basis)

28850.00 28850.00*(Of the above, Debentures ofRs. 2666.65 lakhs are to be redeemedduring the next twelve months)

B] Loans from :i) Life Insurance Corporation of India(LIC)* 162.00 162.00

ii) Industrial Development Bank of India (IDBI)* 5291.69 5291.69

iii) The Industrial Finance Corporation of IndiaLimited (IFCI)* 3136.00 3136.00

iv) ICICI Bank Ltd.* 822.46 822.46

v) General Insurance Corporation of India (GIC)and its Subsidiaries* 12.80 18.00

vi) Industrial Investment Bank of India Ltd.(IIBI)* 88.00 88.00

vii) Kreditanstalt fur Wiederaufbau, Germany (KfW)Foreign Currency Loan 12579.51 10348.02

viii) ICICI Bank Ltd.* 3000.00 3000.00

ix) Oriental Insurance Company Ltd. (OIC) 250.00 —

x) Deposits from a Company* 3700.00 4000.00

29042.46 26866.17

*(Of the above, Rs. 5401.78 lakhs are payableduring the next twelve months)

C] From Banks :

i) Cash Credit 35360.62 40978.25

Interest accrued and due 40.85 8.68

ii) Working Capital Term Loans 15000.00 15000.00

50401.47 55986.93

Total 108293.93 111703.10

(Contd.)

40


1. (a) Debentures at A(i) and Bonds at A(ii) and A(iii) are secured by first mortgage on the Company’sland, buildings and all movables, both present and future, at Fertilizernagar, District Vadodara andat Villages Motikhavadi and Sikka, District Jamnagar (excluding the assets of the Company’s Polymersand Fibre Units), subject to prior charges of the Company’s bankers on specified movables forsecuring borrowings for working capital requirements and ranking pari passu with the mortgagesand charges created in favour of other such chargeholders.

(b) The Debentures at A(i) are redeemable in three equal annual instalments commencing from01-01-2004.

(c) The Bonds at A(ii) shall be redeemed in five equal biannual instalments commencing from29-10-2004 (i.e. at the end of 5th year from the date of allotment). (Refer note 4)

(d) The Bonds at A(iii) shall be redeemed in four equal bi-annual instalments commencing from01-10-2005.

2. The loans at B(i) to B(vi) are secured against hypothecation of the movable properties (except bookdebts) of the Company (excluding those of Company’s Polymers and Fibre Units and investments inUnits of Unit Trust of India) and secured by a joint equitable mortgage created on the immovableproperties of the Company (excluding those of Company’s Polymers & Fibre Units), both present andfuture.

The loan from KfW at B(vii) is secured by guarantees issued by IDBI and State Bank of India. The guaranteeassistance by IDBI is secured by joint equitable mortgage/hypothecation of the immovable / movableproperties of the Company (excluding those of Company’s Polymers and Fibre Units and investmentsin Units of Unit Trust of India), both present and future. The guarantee assistance by SBI is securedby joint equitable mortgage of the immovable properties of the Company (excluding those of Company’sPolymers and Fibre units and investments in Units of Unit Trust of India), both present and future andby the counter guarantee of the Company.

All these mortgage & hypothecation charges are subject to prior charges in favour of Company’s bankerson specified movables. Above charges are ranking pari passu amongst the lenders.

The loan from ICICI Bank Ltd. at B(viii) is secured against pledge of Equity shares of Gujarat NarmadaValley Fertilizers Company Limited held by the Company.

The loan from OIC at B(ix) is to be secured by way of second charge on current assets of the Company.

Deposits from a Company stated at B(x) is to be secured by way of second charge either on fixedassets or current assets (excluding those of Company’s Polymers & Fibre units)

3. The Credit Facility and working capital term loan from Banks at C(i) and C(ii) above is secured byhypothecation of stock of raw materials, finished products, packing materials, general stores, spares,book debts etc. of the Company.

The Working Capital Term Loan from Banks at C(ii) are further secured by a joint equitable mortgagecreated on the immovable properties of the Polymers unit and Fibre unit of the Company.

4. The Company has submitted the restructuring proposal for privately placed debentures / bonds andterm loans with FIs / Banks for which necessary consents were received except from some of thebondholders for bonds at A(ii) and one of the lenders of the Working Capital Term Loan at C(ii) forwhich Company is in process of getting consent.

SCHEDULE - 3 SECURED LOANS (Contd.)


41

SCHEDULE - 4 UNSECURED LOANS

(Rs.in lakhs)


1] Fixed Deposits 7638.09 7992.57

2] Deposits from Other Companies — 538.36

3] Other Loans :

(a) Housing Development Finance CorporationLtd.(HDFC) (for housing loans to employees)* 2107.14 2535.71

(b) Kreditanstalt fur Wiederaufbau Germany (KfW)Foreign Currency Loan 6000.25 4935.86

(c) External Commercial Borrowingsin Foreign Currency 7119.00 7302.00

(d) Banks :

(i) For housing loans to employees* 3116.00 3782.00

(ii) Interest accrued & due on (i) above 22.07 26.44

(iii) For vehicle loans to employees* 510.00 510.00

(iv) Interest accrued & due on (iii) above — 0.90

(v) Under acceptance-cum-bill discounting facility 12210.74 7963.76

15858.81 12283.10

31085.20 27056.67

Total 38723.29 35587.60

(Of the above, Rs. 20336.79 lakhs are payableduring the next twelve months)

The loans from KfW at 3(b) and External Commercial Borrowing at 3(c) are to be secured by way of secondand subservient charge on movable and immovable assets of the Company (excluding those of Company’sPolymers & Fibre units).

*Refer note 9 of Schedule 22


42



SCHEDULE - 5 FIXED ASSETS

(Rs.in lakhs)

Sr. Assets Gross Block Depreciation Net Block

No. As at Additions/ Deductions/ As at For the year upto As at As at1-4-2002 Adjustments Adjustments 31-3-2003 2002-03 31-3-2003 31-3-2003 31-3-2002

1. Land-Freehold 549.17 — — 549.17 — — 549.17 549.17

2. Land-Leasehold 29.39 — — 29.39 — — 29.39 29.39

3. Buildings 7519.49 1105.11 0.05 8624.55 196.91 2423.68 6200.87 5292.72(IncludingRoads, Culverts& CompoundWalls)

4. Railway Sidings 886.35 711.81 — 1598.16 55.18 487.20 1110.96 454.33

5. Plant &Machinery 273811.87 19318.57 2113.70 291016.74 13811.93 110585.25 180431.49 175834.63

6. Furniture,Fittings &Equipments 2642.16 41.45 24.08 2659.53 126.93 1657.19 1002.34 1102.13

7. Vehicles 147.18 5.46 1.74 150.90 7.48 107.93 42.97 45.07

8. Library Books 65.35 3.07 — 68.42 1.90 46.10 22.32 21.16

9. Live Stock 0.14 — — 0.14 — — 0.14 0.14

10. Assets retiredfrom use &held for disposal 47.41 1411.58 424.88 1034.11 36.31 873.90 160.21 4.30

Total 285698.51 22597.05 2564.45 305731.11 14236.64 116181.25 189549.86 183333.04

(31st March 2002) (286346.02) (2276.47) (2923.98) (285698.51) (13651.45) (102365.47) (183333.04)

11. Capital Workin Progress 276.25 — — 276.25 196.04

12. Projects underexecution — — — — 17030.15

Total 306007.36 14236.64 116181.25 189826.11 200559.23

Notes:

1. The Company has acquired land through Government and also through direct negotiations. The entire land isin possession of the Company. In respect of portion of land for which the Company has still not received the award/sale deed, the advance paid to land owners have been treated as land. In respect of other portion of land acquired throughdirect negotiations, compensation has been paid at the negotiated price. The Company also holds possession of aportion of land for which no amount has been paid in absence of receipt of awards.

2. The Company has leased a portion of its land to Bank of Baroda for bank premises at Fertilizernagar and Sikkaand another portion at Fertilizernagar to Department of Atomic Energy (DAE) for establishment of Synthesis GasFacility (A-III Plant).

3. Buildings include Rs. 0.02 lakh being the value of shares in Co-operative Housing Societies.

4. Cost of equipment against which Government subsidy is received are shown net of subsidy.

5. Additions / Deductions include :

(a) Rs. 3125.09 lakhs being the net increase (previous year Rs. 848.84 lakhs net increase) in value on account of realignmentof foreign currencies affecting liabilities payable in foreign currencies.

6. Projects under execution includes Nil balance (previous year Rs. 3065.95 lakhs) being expenses pending allocation (ReferSchedule 20- Pre-Operative Expenses).

7. Assets retired from use and held for disposal at item no. 10 are stated at cost or realisable value whichever is lower.No depreciation has been charged on these assets for the year after its retirement.

43

SCHEDULE - 6 INVESTMENTS(Rs. in lakhs)

Nos. Face As At As AtValue 31st March, 2003 31st March, 2002

Rs.

LONG TERM INVESTMENTS :

1. GOVERNMENT SECURITIES (Unquoted) :

National Savings Certificates 0.37 0.37

2. TRADE INVESTMENTS : ‘

(i) Quoted :

a) Fully paid Equity Shares of –

Gujarat Narmada Valley FertilizersCompany Limited 3,07,79,167 10 5838.81 5838.81Gujarat Industries Power Company Ltd.1,86,92,927 10 2656.89 2656.89Gujarat Alkalies & Chemicals Ltd. 10,34,400 10 749.94 749.94

9245.64 9245.64b) Fully paid Debentures –

Gujarat Industries Power Company Ltd. 31,49,599 15 472.44 944.88(Non-convertible part of 18% securedredeemable debentures)(Second instalment of Rs.15 perdebenture redeemed during the year)

9718.08 10190.52

(ii) Unquoted :

Fully paid Equity Shares of –

Indian Potash Limited 7,50,000 10 60.50 60.50

Gujarat Chemical Port Terminal Co. Ltd. 1,48,00,000 10 1480.00 1480.00

Gujarat Agri Processing Company Ltd. 6,00,000 10 60.00 60.00

1600.50 1600.50

3. OTHER INVESTMENTS :

(i) Quoted :


ICICI Bank Ltd. 210 10 0.14 0.14(received against equity shares ofRs.10 each of erstwhile ICICI Ltd.in the ratio of 1:2)

Gujarat Rural Housing FinanceCorporation Limited 1,00,000 10 10.00 10.00

Industrial Development Bank of India 5,49,440 10 446.42 446.42

HDFC Bank Limited 500 10 0.05 0.05

Bank of Baroda 1,25,000 10 106.25 106.25

Gujarat State Financial Corporation 9,35,600 10 187.12 187.12

749.98 749.98

Total c/f. 12068.93 12541.37


(Contd.)

44



Total b/f. 12068.93 12541.37

(ii) Unquoted :a) Units of Unit Trust of India (Unit ’64) 44,14,732 10 617.83 617.83

(Earmarked for repayment ofFixed Deposits)Less : Provision for Diminution in value

of investment -175.45 —442.38 617.83

[Repurchase price of Rs. 245.46 lakhs(previous year Rs. 280.34 lakhs)]

b) Fully paid Equity Shares of -Gujarat Data Electronics Limited 1,15,000 10 11.50 11.50Less : Provision for Diminution in value

of investment -11.50 -11.500.00 0.00

Gujarat Venture Finance Limited 60,000 10 6.00 6.00Biotech Consortium India Limited 50,000 10 5.00 5.00Gujarat State Petroleum Corp. Limited 2,50,000 10 25.00 25.00Gujarat State Fuel Management Co. Ltd. 1,00,000 10 10.00 10.00

c) Fully paid Shares of -Co-operative Bank of Baroda Limited — 0.25(1,000 shares each of Rs. 25 surrenderedduring the year)

d) Contribution to :Gujarat Venture Capital Fund-1990 18.00 21.00(Rs. 3.00 lakhs redeemed during the year)Gujarat Venture Capital Fund-1995 57.60 60.30(Rs. 2.70 lakhs redeemed during the year)

563.98 745.384. IN SHARES OF SUBSIDIARY COMPANY :

(i) Unquoted :Fully paid Equity Shares of –GSFC Investment and Leasing Company Ltd. 10,00,000 10 100.00 100.00(7 shares subscribed during the year)Less : Provision for Diminution in value of investment -100.00 —

0.00 100.00Total 12632.91 13386.75

Aggregate Value of Unquoted Investments 2164.85 2446.25Aggregate Value of Quoted Investments 10468.06 10940.50Market Value of Quoted Investments 12389.86 13164.83

SCHEDULE - 6 INVESTMENTS (Contd.)(Rs. in lakhs)


Rs.

45

SCHEDULE - 7 INVENTORIES

(Rs. in lakhs)


Stores and Spare-parts (Including Loose Tools 16178.27 16730.61Rs. 10.02 lakhs - previous year Rs. 8.94 lakhs)

Raw Materials 4598.83 10858.13

Finished Goods :

Finished Products 17442.31 17807.48

Trading Goods 49.73 124.03

17492.04 17931.51

Stock-in-Process* 2944.12 2767.96

Stock out of trial run production — 192.60(at estimated realisable value)

20436.16 20892.07

Total 41213.26 48480.81

* Includes Loose (unpacked) productsRs. 1987.22 lakhs(previous year Rs. 1881.89 lakhs)

Notes :

(1) Inventories as taken, valued and certified by the Management.

(2) For mode of valuation refer Schedule-21 - Significant Accounting Policies.

SCHEDULE - 8 SUNDRY DEBTORS

Over Six Months

Secured - Good 89.37 45.47

Unsecured - Good 8414.68 11333.63

- Doubtful 2676.05 2720.90

11180.10 14100.00

Less : Provision 2676.05 2720.90

8504.05 11379.10

Others (Considered Good)

Secured 550.94 608.98

Unsecured 21873.97 43113.64

22424.91 43722.62

Total 30928.96 55101.72


46



SCHEDULE - 9 CASH AND BANK BALANCES

(Rs. in lakhs)


Cash, Cheques & Stamps on hand* 127.92 212.90

Remittances in transit 113.85 251.88

With Scheduled Banks :

In Current Accounts (including Rs. 61.16 lakhs 829.98 247.36of unpaid dividend accounts andRs. 0.27 lakh in Saving Accounts)(previous year Rs. 69.88 lakhs andRs. 0.21 lakh respectively)

In Collection Accounts 2569.38 7946.91

In Short Term Deposit Accounts 561.75 11.57

3961.11 8205.84

With Non-Scheduled Banks :

In Current Accounts/Fixed Depositwith Co-operative Banks 0.01 0.01(for details refer Note 22 of Schedule-22)

In Post Office Savings Bank Account (Rs.100) — —(Maximum balance during the yearRs. 100, previous year Rs. 100)

Total 4202.89 8670.63

* Includes balances in Savings Bank Accountsopened in names of the authorised representativesof the Company in respect of Imprest Accounts.

SCHEDULE - 10 LOANS AND ADVANCES

Secured (Considered Good)Loans to employees for construction/purchaseof houses and vehicles(including interest accrued)* 7396.01 7835.25(Refer Note 9 of Schedule-22)

Unsecured (Considered Good)

Advances to Subsidiary Company 1265.22 1265.22

Less : Provision for Doubtful Advances -641.26 –

623.96 1265.22

Advances to other Companies 108.76 150.05(Refer Note 8 of Schedule-22)

Advances recoverable in cash or in kind orfor value to be received (including interest 13636.30 13527.45accrued)*

Total c/f. 14369.02 7396.01 14942.72 7835.25

(Contd.)

47

Total b/f. 14369.02 7396.01 14942.72 7835.25

Deposits with Excise, Customs and otherGovernment Departments 204.34 189.05Deposits with Limited Companies / FinancialInstitutions (including interest accrued) 76.55 77.27Advance payment of Tax (net of provision) 2139.72 1083.50Unsecured (Considered Doubtful)Advances to other Companies 75.00 75.00Advances recoverable in cash or in kind orfor value to be received 1.07 1.07

16865.70 16368.61Less : Provision for Doubtful Advances 76.07 76.07

16789.63 16292.54Total 24185.64 24127.79

* Includes NIL (previous year Rs. 0.51 lakhs) due from officers of the Company - maximum balance Rs. 0.52 lakhs (previous year Rs. 1.81 lakhs).

SCHEDULE - 11 CURRENT LIABILITIES

1. Sundry Creditors 62942.92 68924.96(Refer Note 10 of Schedule-22)

2. Advances from Customers 830.14 865.613. (a) Unpaid Dividends* 61.16 69.88

(b) Unpaid application money* 0.14 **(c) Unpaid matured deposit* 74.39 **(d) Unpaid matured debentures* 35.98 **(e) Interest accrued on 3(a) to 3(d) above* — —

171.67 69.884. Other Liabilities 5866.49 7576.865. Interest accrued but not due on loans 2483.22 3346.10

Total 72294.44 80783.41

* These figures do not include any amounts, due and outstanding to be credited to Investor Educationand Protection Fund.

** Figures for previous year have not been disclosed as the disclosure requirement came into force thisyear.

SCHEDULE - 12 PROVISIONS

Retirement Benefits 5609.44 5121.31

Total 5609.44 5121.31


SCHEDULE - 10 LOANS AND ADVANCES (Contd.)

(Rs. in lakhs)


48


Schedules Forming Part of Profit and Loss Account

SCHEDULE - 13 SALES

Quantity 2002-03 Quantity 2001-02MTs Rs. Lakhs MTs Rs. Lakhs

Manufacturing Operations :(A) Fertilizernagar & Sikka Unit :

Fertilizernagar UnitUrea 269261 24990.57 304714 33157.68Ammonium Sulphate 213525 10956.94 224667 10865.69Di-ammonium Phosphate 40078 4649.81 130922 16002.79Ammonium Phosphate Sulphate 89248 6993.80 20762 1843.05

Total Fertilizernagar unit 612112 47591.12 681065 61869.21Sikka UnitDi-ammonium Phosphate 601590 69796.31 552025 67125.77Ammonium Phosphate Sulphate 7857 576.06 97766 8728.65Total Sikka unit 609447 70372.37 649791 75854.42Total Fertilizers 1221559 117963.49 1330856 137723.63Caprolactam 46991 28593.69 47707 23313.08Cyclohexanone 8577 3662.87 11686 4791.71Nylon-6 6307 5784.01 5777 5576.93Melamine 10619 6132.27 10062 5404.32MEK Oxime 1488 1309.74 1270 1130.16Argon Gas (NM3) 2759443 633.34 2816690 461.67Ammonia 29359 2675.05 39915 4061.71Nitric Acid 7579 322.74 7552 298.84Sulphuric Acid 61712 932.47 54872 657.50Other Items 1858.12 663.49

169867.79 184083.04(B) Polymers Unit’s Products :

Methyl Methacrylate Monomer 1309 1039.95 828 648.58Polymethyl Methacrylate Sheets 600 621.90 555 578.57Polymethyl Methacrylate Pellets 2149 2253.87 2361 2238.35Ammonium Sulphate 7329 194.22 12173 289.88Methacrylic Acid 503 472.24 495 483.50Acetone Cyano Hydrine 360 302.49 267 224.90Others 79.70 82.91

4964.37 4546.69(C) Fibre Unit’s Products :

Nylon Filament Yarn 5251 6168.18 3964 4419.64Nylon Chips 2351 2266.17 2048 1879.55

8434.35 6299.19Trading Activities : 385.89 514.19(Refer Annexure-I (B))Sales (Net of Excise Duty) 183652.40 195443.11Excise Duty Recovered 9870.79 8080.22

Total 193523.19 203523.33

49


SCHEDULE - 14 OTHER INCOME(Rs. in lakhs)

2002-03 2001-02

Rent 16.34 15.06Income from Long Term Investments (Gross) :Dividend :Trade 776.98 838.54Others 24.79 79.86(Tax deducted at source Rs. 84.18 lakhs)(previous year - nil) 801.77 918.40Interest :Trade 130.94 215.98(Tax deducted at source Rs. 27.50 lakhs)(previous year Rs. 44.82 lakhs) 130.94 215.98

932.71 1134.38Interest on Advances, Deposits and others (Gross) 1657.40 967.81(Tax deducted at source Rs. 51.23 lakhs)(previous year Rs. 43.38 lakhs)Recoveries for services rendered 60.44 46.30Insurance claims 166.39 234.34Captive Consumption in Projects under Execution 59.68 9.62Profit on sale of fixed assets 0.32 449.54Variation in Exchange Rates 863.38 —Excess provision no longer required 490.92 1071.28Miscellaneous 800.05 798.11

Total 5047.63 4726.44

SCHEDULE - 15 MATERIALS, MANUFACTURING AND OPERATING EXPENSES

Raw Materials Consumed :Opening Stock 10858.13 8562.56Add : Purchases 88174.83 104417.90

99032.96 112980.46Less : Closing Stock 4589.63 10858.13

94443.33 102122.33Electricity and Fuel 25525.12 25658.67Water 946.77 850.21Stores and Spares Consumed 2898.76 3537.24Packing Expenses 2780.59 3214.80Insurance 1272.16 1155.24Repairs and Maintenance :Buildings 53.43 47.07Plant & Machinery 2401.64 2155.40Others 212.67 236.87

2667.74 2439.34Excise Duty (Net) (387.31) (45.58)

Total 130147.16 138932.25

50



SCHEDULE - 16 PERSONNEL EXPENSES*(Rs. in lakhs)

2002-03 2001-02

Salaries, Wages and Bonus 10736.55 11163.04

Contribution to Provident, Gratuity andSuperannuation (Pension) Funds [(Including 3270.72 2695.52provision for Gratuity, Superannuation (Pension)]

Welfare Expenses 3509.89 1816.45

Total 17517.16 15675.01

* Refer Note 18 of Schedule-22

SCHEDULE - 17 ADMINISTRATION, MARKETING AND OTHER EXPENSESAdministration ExpensesInsurance-General 318.27 297.77Rates and Taxes 83.44 126.30Printing, Stationery, Postage, Telephones, Telex etc. 153.56 168.79Brokerage on Deposits 67.91 35.26Letter of Credit/Guarantee Commission, Bank Charges 357.63 429.15Variation in Exchange Rates — 1243.67Travelling and Conveyance 86.05 86.47(Including tour expenses of Directors Rs. 10.86 lakhs)(Previous year Rs. 8.25 lakhs)Vehicle running & maintenance (net) 178.57 169.08including hire chargesDirectors’ Fees 1.64 1.67Auditors’ Remuneration 6.53 6.08(Refer Note 19 of Schedule-22)Cost Auditors’ Fees 0.53 0.53Rent 77.38 26.39Subscriptions, Membership Fees, etc. 32.04 34.46Legal, Professional and Consultancy charges 69.16 55.51Research and Development expenses 4.98 2.61Loss on fixed assets sold / discarded 647.68 140.15Provision for diminution in value of investments 275.45 —Obsolete spares and other items written off 42.61 805.03Provision for Doubtful Debts/Advances 664.13 1.83Lease Rent on Assets taken on lease 817.99 2100.59Take or pay rental charges to GCPTCL 718.38 621.88Expenditure on abandoned project written off 132.39 —Miscellaneous 1235.57 1254.19

Total c/f. 5971.89 7607.41

(Contd.)

51

Total b/f. 5971.89 7607.41

Marketing Expenses

Sales promotion, Demonstration, Extensionservices and Publicity etc. 3248.30 2816.33Expenses on Depots-cum-Farm Information Centres,Warehouses, Area/Regional Offices etc. and Products’Transportation, Loading & Unloading charges 7778.65 8352.16Commission to Selling Agents 342.47 404.13Cash Rebate on Sales 466.48 982.50Turn over tax 4.12 12.39

11840.02 12567.51Other ExpensesContribution to Government Authorities forrelease of water and discharge of effluentand pollution control expenses 85.41 88.11Laboratory Expenses 33.50 34.64Fire Fighting and Safety Services 56.04 45.45Crop Compensation/Assistance 43.61 61.14Donations and Contributions 0.52 2.83

219.08 232.17

Total 18030.99 20407.09

SCHEDULE - 18 (INCREASE)/DECREASE IN STOCK OF FINISHED PRODUCTS,TRADING GOODS AND STOCK-IN-PROCESS

Opening Stock



Stock-in-Process 2767.96 2687.94

Stock out of Trial Run Production 12457.68 —

33157.15 22820.55

Less :

Closing Stock




20436.16 20699.47

(Increase) / Decrease 12720.99 2121.08

* Includes Loose (unpacked) products Rs.1987.22 lakhs (previous year Rs.1881.89 lakhs)


SCHEDULE - 17 ADMINISTRATION, MARKETING AND OTHER EXPENSES (Contd.)(Rs. in lakhs)

2002-03 2001-02

52



SCHEDULE - 19 PRIOR PERIOD ADJUSTMENTS (NET)(Rs. in lakhs)

2002-03 2001-02

(A) IncomeSales (49.42) (1.77)Other Income 1.04 (0.53)

Total (48.38) (2.30)(B) Expenditure

Raw Materials consumed (70.10) 5.39Electricity and Fuel 1486.25 (20.60)Water 96.82 —Stores and Spares consumed (33.27) (15.38)Packing expenses — 0.22Insurance (2.04) (0.71)Repairs and Maintenance (8.12) (4.73)Salaries, Wages, Bonus & Welfare Expenses (0.04) 0.16Administration, Marketing and Other Expenses (10.49) 3.09Excise Duty (0.17) —Purchase of Finished Products 16.14 4.52Interest (8.22) 3.32Depreciation (0.13) 17.67

Total 1466.63 (7.05)

Net (A-B) (1515.01) 4.75

SCHEDULE - 20 PRE-OPERATIVE EXPENSES (Rs. in lakhs)

Balance For the Amount Balanceas on year transferred as on

1-4-2002 2002-03 to Capital 31-3-2003Accounts/

Adjustments1. Raw Materials Consumed 179.67 10299.91 10479.58 —2. Electricity & Fuel 22.28 249.09 271.37 —3. Captive Products Consumed 9.62 59.69 69.31 —4. Stores and Spares Consumed — 2.13 2.13 —5. Packing Expenses — 171.98 171.98 —6. Repairs & Maintenance — 3.90 3.90 —7. Insurance 16.36 — 16.36 —8. Personnel Expenses 291.46 41.08 332.54 —9. Printing, Stationery, Postage, Telephones, Telex etc. 1.11 — 1.11 —10. Realignment of Foreign Currencies 0.53 (80.30) (79.77) —11. Letter of Credit/Guarantee Commission

and Bank Charges 6.51 22.99 29.50 —

12. Travelling and Conveyance 51.20 0.09 51.29 —

Total c/f. 578.74 10770.56 11349.30 —

(Contd.)

53

SCHEDULE - 20 PRE-OPERATIVE EXPENSES (Contd.) (Rs. in lakhs)



AdjustmentsTotal b/f. 578.74 10770.56 11349.30 —

13. Legal, Professional and Consultancy Charges 102.17 — 102.17 —14. Share / Debenture / Bond issue Expenses 103.08 14.55 117.63 —15. Miscellaneous Expenses 5.28 2.61 7.89 —16. Marketing Expenses — 688.91 688.91 —17. Interest and Commission :

On Debentures / Bonds and Fixed Loans 2382.96 1109.06 3492.02 —Others 84.44 45.15 129.59 —

18. Depreciation 1.88 0.12 2.00 —3258.55 12630.96 15889.51 —

19. Less : Stock of Trial Run Production 192.60 11380.73 11573.33 —20. Interest Received — 3.73 3.73 —

Total 3065.95 1246.50 4312.45 —

(31st March, 2002) (1354.76) (1711.19) — (3065.95)

Adjustment includes Rs.117.65 lakhs transferred to revenue expenditure / deferred revenue expenditure. Initialexpenditure of Rs.97.13 lakhs incurred on project not to be pursued further, is written off during the year.


Schedules Forming Part of Accounts

SCHEDULE - 21 SIGNIFICANT ACCOUNTING POLICIES1. Capital Expenditure :

a) Fixed Assets acquired and constructed are stated athistorical cost including attributable cost forbringing the asset to its intended use and includesamount added on revaluation of fixed assets ofPolymers Unit at the time of merger.

b) Assets under erection/installation of the existingprojects are shown as “Capital Work in Progress”.Capital expenditure and project stores (includingadvances) for on going projects are shown as“Projects under execution” in the Schedule of FixedAssets.

c) In the absence of availability of specific originalcost in respect of a part of assets capitalised underturn-key contracts, the original value of such assetwritten / disposed off is estimated on the basis ofits current cost adjusted for price and technologicalfactors.

d) Major cost of civil works required as plant andmachinery supports, on the basis of technicalestimates, is considered as Plant & Machinery.

e) Advances paid for the purchase / acquisitions of

land in possession of the Company are included inthe cost of land.

f) Renewals and replacements are either capitalisedor charged to revenue as appropriate, dependingupon the nature and long term utility of suchrenewals and/or replacements.

2. Borrowing Cost :

Borrowing cost of the funds borrowed for the qualifyingasset is capitalised till the date of commencement ofcommercial production. Other borrowing cost ischarged to revenue.

3. Investments :

Investments are valued at cost.

4. Exchange Variation :

Foreign currency transactions are recorded at theexchange rate prevailing on the date of transaction.Assets and liabilities related to foreign currencytransactions remaining unsettled at the year-end aretranslated into rupee at the contract rates, whencovered by forward cover contracts and at the year-end exchange rates in other cases. The exchange

54


difference arising on foreign currency transactionsincluding gain or loss arising due to cancellation offorward cover contracts are recognised in the profitand loss account except those relating to fixed assetswhich are adjusted to the carrying cost of the fixedassets.

5. Inventories :a) Raw materials, stores and spares are valued at

weighted average / FIFO cost. Cost of stores andspares items is based on the purchase order priceand the difference, if any, between the invoicevalue and the purchase order price is charged toconsumption. Stores returns, non-standard/obsolete items are valued at assessed or realisablevalue below cost. Imported raw material lying atport is valued at cost based on the Bill of Ladingquantity.

b) Finished products and stock in process are valuedat lower of weighted average cost or net realisablevalue. Value of stock of finished products lying atdepots, warehouses, consignment stockists, otherparties and stocks remaining out of inter-unittransfers is inclusive of transportation cost. Stockof trading items is valued at lower of cost orrealisable value.

c) Consumable stores categorised separately with anannual consumption of less than Rs. 3000/- per itemare charged to Profit & Loss Account at the time ofpurchase at Fertilizernagar unit. At Polymers Unit,sundry consumable items are charged to Profit &Loss Account as and when procured, while at Sikkaand Fibre Units such items are charged to Profit &Loss Account as and when consumed.

d) Freight on indigenous stores & spares are directlycharged to Profit & Loss Account.

6. Sales & Other income :a) Sales

Sales of industrial products are accounted on thedispatch basis except export sales, which arerecognised on the basis of bill of lading. Sales offertilizers are accounted for on the basis of issue ofrelease orders. Subsidy and equated freight onfertilizers are accounted on accrual basis as andwhen the order for the same is available with theCompany from the Government of India.

b) Other IncomeThe amounts receivable from various agencies areaccounted for on accrual basis except interest ondelayed payments, refunds from customs & exciseauthorities, insurance claims (other than marineclaims), etc. where it is not possible to ascertain theincome with reasonable accuracy or in absence offinality of the transaction.

7. Retirement benefits :a) Superannuation (Pension)

In respect of eligible employees of the Company,

the Liability for Superannuation (pension) schemeshave been accounted for on the basis of the actuarialvaluation by Life Insurance Corporation of India(LIC) and funded with them.

(b) GratuityThe liability for Gratuity at Fertilizernagar unit hasbeen accounted for on the basis of valuation reportreceived from LIC and funded with them. AtPolymers, Sikka and Fibre units, the gratuity liabilityhave been accounted for on the basis of actuarialvaluation.

(c) Encashment of LeaveThe Company accounts for Leave EncashmentLiability on the basis of actuarial valuation.

8. Depreciation :Depreciation on Fixed Assets is provided on StraightLine Method at the rates prescribed in Schedule XIV tothe Companies Act, 1956. Depreciation on additionsto fixed assets and assets disposed off/discarded ischarged on monthly pro-rata basis. Depreciation oncommissioning of plants and other assets of newprojects is charged for the days they are actually putto use. Exchange variation adjusted in the carryingcost of the fixed assets is amortised over the residuallife of the assets.

9. Prior Period Adjustments :In respect of the transactions pertaining to the periodprior to the current accounting year, the Companyfollows the practice in conformity with the AccountingStandard.

10. Prepaid Expenses :Expenses incurred but pertaining to subsequent period(except those not exceeding Rs. 50,000/- in each case,which are accounted through respective revenueaccounts) are accounted as ‘Prepaid Expenses’.

11. Research and Development :Capital expenditure on Research & Developmentactivities is included in Fixed Assets to the extent it hasalternative economic use, the revenue expenditurethereof is charged under respective account heads inthe Profit & Loss Account.

12. Taxation :Provision for income tax for the current year is basedon the estimated taxable income for the period inaccordance with the provisions of the Income Tax Act,1961.Deferred Tax is calculated at current statutory incometax rate and is recognised on timing differences betweentaxable income and accounting income that originatein one period and are capable of reversal in one ormore subsequent periods. Deferred Tax assets, subjectto consideration of prudence, are recognised and carriedforward only to the extent there is reasonable certaintythat sufficient future taxable income will be availableagainst which such deferred tax assets can be realised.

55

SCHEDULE - 22 NOTES ON ACCOUNTS

1. Contingent Liabilities not provided for :

2002-03 2001-02Rs. lakhs Rs. lakhs

(a) Disputed Excise Duty andCustoms Duty 2297 2563

(b) Disputed demand of Sales Taxand Interest on Turnover Tax& Purchase Tax against whichthe Company has preferredappeals 17 147

(c) Claims by StatutoryCorporations and othersdisputed and notacknowledged as debt 1477 1430

(d) Claim by ONGC for royaltyon gas 81 81

(e) Claims by employees/ex-employees pending Not Notbefore courts ascertainable ascertainable

2. Estimated amount ofcontracts remaining to beexecuted on capital accounts,net of advances 22 65

3. On expiry of pricing period of the earlier agreement,Oil & Natural Gas Commission (ONGC) demandedincreased gas price from April 1982 to 29th January,1987. This price increase was not agreed to by theCompany since as provided in the earlier agreement,gas price for the future period was to be determinedmutually whereas ONGC had increased the priceunilaterally without the consent of the Company andnot executed fresh agreement inspite of variousefforts of the Company. ONGC has referred thismatter to the Ministry of Petroleum and Natural Gasand Ministry of Fertilizers. The decision of theGovernment in this regard is still awaited. ONGC hasalso submitted an application in Civil Misc. Applicationwith Civil Judge (S.D.) Baroda for the recovery ofprincipal amount of Rs. 118.10 crores for the pricedifference and interest thereon. As per the legalopinion, the aforesaid application for recovery is nottenable in law in the said Civil Misc. Application andhence the Company has no obligation towards thesame.

4. Pending fixation of Retention Price (RTP) ofAmmonium Sulphate (AS) fertilizer produced fromCaprolactam Expansion Plant, the sales and subsidyclaims thereof upto 9-6-1994 (from 10-6-1994, thesame has been decontrolled) have been accountedat RTP applicable to AS produced from the old plants.

Similarly, sale of AS from Polymers Unit upto9-6-1994 has been accounted at the provisional RTPfixed by the Government of India.

5. The RTP of AS for the Sixth Pricing period from1-4-1991 is not yet announced. As per the normsfixed by FICC, Government of India, the Company hasmade its own estimates of the increase in RTP ofAS and accordingly accounted for.

6. Hitherto the Company was accounting the RetentionPrice escalation claims on lodgement basis consideringthe input norms adopted by FICC (Fertiliser IndustryCo-ordination Committee). However, the input normsadopted by FICC for the 8th Pricing Period is notavailable with the Company and hence the Companyby way of abundant caution and conservatively haschanged the accounting policy discontinuing theescalation / de-escalation claim on lodgement basis.In view of this the impact of this on the financialstatement is not ascertainable.

7. (a) As one of the promoters of the Gujarat IndustriesPower Company Ltd.(GIPCL), the Company hasgiven undertaking to Industrial Development Bankof India (IDBI), Power Finance Corporation Ltd.(PFC)and Gujarat Industrial Investment CorporationLtd. (GIIC) for non disposal of and non creationof a charge against the Company’s investment inthe shares of the said company during thependency of loans given to GIPCL by IDBI, PFCand GIIC.

(b) As one of the promoters of the Gujarat ChemicalPort Terminal Company Limited (GCPTCL), theCompany has given undertaking to ICICI Bank fornot to transfer, assign, dispose off, pledge, chargeor create any lien or in any way encumbercompany’s existing or future shareholding in theGCPTCL in favour of any person so long as moneyremains due by GCPTCL to ICICI Bank or till theproject is duly completed, whichever is later.

8. (a) In joint participation with other Industrialundertakings in Gujarat, the Company has paidRs. 30.21 lakhs to Gujarat Acrylics Limited (GAL)and Rs. 38.55 lakhs to Gujarat Agri ProcessingCompany Limited by way of advance towardsequity contribution. These amounts have beenshown under Schedule-10 “Loans & Advances”.

(b) Under Rehabilitation and Revival Scheme forM/s. Gujarat Tractors Corporation Ltd. (GTCL)finalised by the Government of Gujarat, theCompany has given interest free loan of Rs. 40lakhs to M/s. Gujarat Agro Industries CorporationLtd. (GAIC) for GTCL.

9. The Company has given an undertaking to assign andtransfer to Housing Development Finance Corporation


56


Ltd. (HDFC), Central Bank of India, Vijaya Bank, HDFCBank and ICICI Bank, all its rights, titles, interests andclaims under the mortgages / hypothecation obtainedfrom employees against loans given to employees forconstruction / purchase of residential houses andvehicles out of loans of Rs. 3750 lakhs taken by theCompany from HDFC, Rs. 1000 lakhs from CentralBank of India and Rs. 1000 lakhs from Vijaya Bank,Rs. 1375 lakhs from HDFC Bank and Rs. 1250 lakhsfrom ICICI Bank. Pending this, the mortgages /hypothecation created in the Company’s favour arebeing held by the Company in trust for HDFC, CentralBank of India, Vijaya Bank, HDFC Bank and ICICIBank.

10. Sundry creditors in Schedule-11 includes (i) Rs. 215.76lakhs due to Small Scale Industrial Undertakings and(ii) Rs. 62727.16 lakhs due to other creditors. Thedisclosure is based on the information available withthe Company regarding the status of suppliers underthe Industries (Development and Regulation) Act,1961. Small Scale Industrial Undertakings to whomthe Company owes for more than 30 days, whichwere within the agreed terms, are:

A N Instruments Pvt. Ltd.; Aep Company; AcousticsIndia Pvt. Ltd.; Aditya Forge Ltd.; Arpita Enterprise;Bharat Forge & Press Industries Ltd.; Bhavani ForgePvt. Ltd.; Chemtrol Valves Pvt. Ltd.; Chisel & Hammer;Dimple Polymers; Detection Instruments (I) Pvt Ltd;Eagle Plastic Industries; Eby Fasteners; Econo ValvesPvt. Ltd.; Electro Mech Industries; ExcelHydropneumatics P. Ltd.; Echjay Forgings Ltd.; ElsonPacking Industries Pvt. Ltd; Fabwel Engg. Corporation;Fainger Engg.; Flowchem Industrial P Ltd.; Ferro Tube& Forge Ind. ; Fainger Laser Valves Pvt. Ltd.; Fisher-Xomox Sanmar Ltd.; Flexican Bellows & Hoses;Filteration Engrs. (I) Pvt. Ltd.; Fluid Controls Pvt. Ltd.;Goa Instrument Ind.; Gasket India P Ltd; GaugesBourdon (I) Pvt. Ltd.; Gujarat Infrapipes Pvt. Ltd;Hawa Industries Pvt. Ltd.; Hydropneumatics; Hyd-AirEngg. Works Lonavla; Instrument Engg. Pvt. Ltd.;Jasubhai Richard Simon Ltd; Jyoti Industries; KirtiPlastic Ind. Pvt. Ltd.; Kishor Pumps Pvt. Ltd.; KeldEllentoft (I) Ltd.; Madras Industrial Products; MayankGasket Manufacturing; Multi Thread Fasteners; MyricksPiping Systems Pvt. Ltd.; Multi Tex Filtration Engg.P. Ltd.; Mkt Valves Pvt. Ltd.; Manoj Plastic Industries;Maldeep Catalyst Pvt. Ltd.; M H Valves Pvt. Ltd.; NewField Industrial Eqpt.; Nu-Tech bags & Containers;New Mercantile Impex Pvt. Ltd.; Odin India Pvt. Ltd.;Panelec Pvt. Ltd.; Plas-Pack Industries - Gujarat;Prestige Counting Instruments; Pressure & FlowControl; Pratolina Instruments Pvt. Ltd.; Propel ValvesPvt. Ltd.; Protego Equipment Pvt. Ltd.; Powergrip (I)Fasteners Pvt Ltd.; Parekh Engg. Co.; Pushparaj Plastic& Packing; Samyak Udyog; Sarathi Engineering Ent.Pvt. Ltd.; Shreyas Instruments Pvt. Ltd.; Sam IndustryLtd.; S & G Engineers (P) Ltd.; Sanghvi Forging &Engg.; Samleshwari Packaging Pvt. Ltd.; Triveni

Equipments Pvt. Ltd.; T S Pumps & Valves P Ltd.; TejasPolypack Pvt. Ltd.; Unitop Engineers Pvt. Ltd.; VanshSteel Pvt. Ltd.; Zenith Machine Tools P Ltd.; Allza FlexIndustries; Anticorrosive Equipment; ARW Filters P.Ltd.; Asham Carbon Products Ltd.; Controquip P. Ltd.;Elson Packing P. Ltd.; Florocarbon Processing P. Ltd.;Inmarco Ind. Maint. P. Ltd.; Jyoti Ind.; Kulkarni Eng.Co.; KJB Titanium P. Ltd.; Mico Entrerprices; MeeraEngineers; Naval Thermoplast P. Ltd.; Nayan Ind.Equip. Co.; New Field Ind. Equip. P. Ltd.; Pap FlonEng. Co.; Prestige HM Poly containers; Silex Industries;Turnweld Engineers; Vadilal Gases & Chem.; VakoSeals; Span Industries; Super Pack.

11. (a) Income-Tax liabilities estimated at Rs. 1209 lakhsfor the Assessment Years 1987-88, 1990-91, 1997-98 and 1999-2000 are disputed in appeal by theCompany. During the regular assessment ofAssessment Year 2000-2001, the assessing officerhas raised a demand of Rs. 10351 lakhs, whichis disputed in appeal by the Company. No provisionhas been made in the accounts for the same, asthe Company is hopeful of succeeding in the saidappeal.

(b) Pending approval of the competent authority tothe Company’s application for exemption undersection 10(15)(iv)(c) of the Income Tax Act for theIncome Tax on interest paid on import payments,income tax liability of Rs. 22 lakhs has not beenconsidered in accounts.

(c) (i) No provision for Income Tax is considerednecessary, since the company, in view ofunabsorbed depreciation, carried forwardlosses and other available deductions does notexpect any taxable income.

(ii) The Provision for Current Taxation for theyear is for Wealth Tax.

(d) Deferred Taxation :(Rs. lakhs)

As on As on31-03-2003 31-03-2002

A] Deferred Tax Liabilty :1. Depreciation 46561.01 46561.01

46561.01 46561.01B] Deferred Tax Assets :1. Unabsorbed Losses 3005.60 3005.602. Unabsorbed Depreciation 13434.87 13434.873. Expenses allowable for tax

purpose when paid 1890.20 1890.20

4. Provision for DoubtfulDebts and Advances 1027.89 1027.89

5. Diminution in value ofinvestments 2.41 2.41

19360.97 19360.97

Net Deferred Tax Liability/(Assets) 27200.04 27200.04

In the opinion of the management, no deferredtax asset is required to be created, although thereis a loss in the current year.

57

12. Extra Duty Deposit equivalent to 5% of CIF valuelevied on consignments of Caprolactam/MelamineExpansion Project and capitalised is subject toadjustment on final assessment by special valuationbranch of Customs Department.

13. The Customs Authorities have provisionally levied 5%Extra Duty Deposit and further 5% Revenue Depositof CIF value on the imported consignments ofAmmonia Projects and the same is capitalised. Thefinal adjustment, if any, will be carried out on receiptof final assessment order from the CustomsAuthorities.

14. A sum of Rs. 162.54 crores has been shown asexceptional item, which represents adjustments forthe period from 1.7.1997 to 31.3.2002 on account ofreview of the 7th and 8th pricing period andcoverage of Ammonia-IV plant under Retention PriceScheme.

15. The Company established Sikka Jetty at its own cost,which is in operation since 1987. After due discussionwith Gujarat Maritime Board (GMB), a consensus wasarrived at establishing ownership of jetty with GSFC.Thereafter, in terms of resolution passed by GMB,the ownership of the jetty at Sikka was transferredto the Company. However, during 1994, GMB hasreversed its earlier decision not supported byresolution, and contended that the ownership of thejetty rests with GMB. The Company has maderepresentation to the appropriate authority withregard to the ownership of the jetty with theCompany. Pending finalisation of the representation,no provision is considered necessary in respect ofvarious claims against the Company and the counterclaims of the Company (both the amounts notdetermined) which is dependent upon theestablishment of the ownership of jetty. At presentthe Company is in possession of the jetty andcontinues to be in ownership of the jetty till the finaldecision of the appropriate authority.

16. The liability for natural gas supplied by Gas Authorityof India Limited (GAIL) from 1-4-2000, is accountedat provisional rates billed by GAIL, pending finalfixation of natural gas price by the Government ofIndia.

Similarly, fuel cost adjustment charges levied byGujarat Industries Power Company Limited, for thepower supplied to the Company from 1-4-2000 is alsoprovisional and subject to adjustment on fixation ofnatural gas price by Government of India.

17. Consequent upon the order dated 31-12-2002 ofthe Commissioner of Labour in the matter of equalwork equal wages in respect of the contract labourand since the Company has a good case on stronggrounds, the Company has challenged the order inthe Hon'ble High Court of Gujarat. The Hon'bleHigh Court has granted ad-interim relief staying

the operation of the order of the Commissioner ofLabour. If the Commissioner of Labour's aboveorder is implemented then the estimated liabilitywould be to the tune of Rs. 61 crores. However,since the Company is having strong grounds in thecase and recourse available for approaching theDivision Bench of High Court and then after evento the Supreme Court, the Company has notprovided liability and neither considers it ascontingent liability at this juncture in the matterof equal work equal wages. Other litigation ofcontract labourer's demand for permanency in theservice of the Company referred to the IndustrialTribunal for adjudication is pending.

18. Details of Managerial Remuneration : (Rs. in lakhs)

Managing Whole-timeDirector Director

2002-03 2001-02 2002-03 2001-02

Salary 4.31 3.37 - 0.01

Other Perquisites* 0.70 1.08 - 0.14

PensionContribution 0.63 0.52 - -

Leave SalaryContribution 0.30 0.25 - -

TOTAL 5.94 5.22 - 0.15

* Includes Monetary value of Perquisites 0.19 0.33 - -

19. The break-up of payment to Auditors is as under :

2002-03 2001-02 Rs. in lakhs

(a) Audit Fees including ServiceTax (including fees to Branch 1.96 1.96Auditors Rs.0.39 lakh)(previous year Rs.0.39 lakh)

(b) In other capacity inrespect of :

1. Tax Audit fees 0.74 0.74

2. Other services 3.05 2.91(for certification work etc.)

(c) Reimbursement of expenses 0.78 0.47(including Rs.0.11 lakh paidto Branch Auditors)(previous year Rs.0.04 lakh)

6.53 6.08

20. Investment including trade investment have beenvalued at cost as in the opinion of the Management,all the investments are long term investments.

21. Details of deferred revenue expenditure underthe head "Miscellaneous Expenditure" to theextent not written off or adjusted and thoseproportionately written off during the year areas under :

58


Particulars Written off Balance asduring the year on 31-3-2003(previous year) (31-3-2002)

Rs. in lakhs Rs. in lakhs

1. Security Issue 70.14 187.36Expenses (46.61) (139.85)

2. Superannuation (Pension) 100.59 201.17of past period (100.59) (301.76)

3. Realignment of 48.89 33.83Finance charges (37.50) (80.64)

4. Licence, Know-how fees 139.08 392.62for production process (81.83) (245.50)

22. Details of balances with non-scheduled banks :(Refer Schedule-9 Cash & Bank balances)

Name of the Balance as Maximum balanceBank on 31-3-2003 during the year

(31-3-2002) (previous year)Rs. Rs.

The Panchmahal Dist. 500 277935Co-op. Bank Ltd. (500) (333590)

Co-op. Bank of 500 500Baroda Ltd. (500) (500)

23. Fixed Assets taken on lease amount to Rs. 35 lakhs(Previous Year Rs.11126 lakhs). Future obligationstowards lease rentals under the lease agreementsas on 31-03-2003 amount to Rs.11 lakhs (PreviousYear Rs. 979 lakhs).

24. Based on the opinion of the Expert AdvisoryCommittee of the Institute of Chartered Accountantsof India, the Company has provided a sum ofRs.1899 lakhs as liability for deferred Leave TravelConcession for the first time of block period 2001& 2002 (for Polymers unit block period is 2002 &2003) out of which Rs.1124 lakhs pertaining toperiod upto 31-03-2002.

25. Loans and Advances in the nature of Loans givento subsidiaries etc. are as follows :

As on Maximum31-3-2003 Balance

duringthe year

(Rs. Lakhs) (Rs. Lakhs)

1. (a) Loans & Advancesin the nature of Loanto subsidiaries :

GSFC Investment &Leasing Co. Ltd. 1265.22 1265.22

(b) Loans & Advances inthe nature of Loanto associates :

Gujarat Narmada ValleyFertilizers Co. Ltd. 50.00 50.00

Gujarat AgriProcessing Co. Ltd 38.55 38.55

2. Investment by theLoanee in the shares No. of Rs. inof the Company : Shares Lakhs

Gujarat Narmada ValleyFertilizers Co. Ltd. 1500000 1503.75

26. Related Party Disclosures :

Related Party disclosures as required by AS-18"Related Party Disclosures" are given below :

1. Relationship :

(a) Subsidiary Company :

1. GSFC Investment and Leasing Co. Ltd.

(b) Associate Company :

1. Gujarat Agri Processing Co. Ltd.

(c) Directors and their relatives :

1. Shri Ashok Narayan Chairman(wef 27-01-03)

2. Shri G Subba Rao Director

3. Dr. Manjula Subramaniam Director

4. Shri S R Vengsarker Director

5. Shri N R Krishnan Director

6. Shri R S Agarwal Director(wef 14-11-02)

7. Shri C K Koshy Director(wef 30-03-03)

8. Dr. K D Jeswani Chairman(upto 22-01-03)

9. Shri A D Desai Director(upto 01-11-02)

10. Shri K Kameswara Rao Director(upto 14-11-02)

11. Shri S G Mankad Director(upto 06-01-03)

12. Shri Ashok P Bhavsar Director(upto 31-01-03)

13. Shri Balwant Singh ManagingDirector

As on Maximum31-3-2003 Balance

duringthe year

(Rs. Lakhs) (Rs. Lakhs)

59

2. Details of transactions with related parties :(i) Details relating to parties referred to in 1(a)

above :(Rs. in lakhs)

Sr. Name of Value for OutstandingNo. Transaction the year as on

(previous 31-03-03year) (as on

31-03-02)

1. Services rendered 4.50 2.25(4.49) (—)

2. Interest Income on — —ICD placed (143.84) (—)

3. Lease rent paid 10.63 —(12.45) (—)

4. Inter-Corporate 114.50 1265.22Deposit placed (52.96) (1150.73)

5. Investment made in — 100.00equity shares (at cost) (—) (100.00)

6. Outstanding — 2.25receivable (—) (118.99)

7. Fixed Assets taken — 34.63on lease (—) (43.62)

(ii) Details relating to parties referred to in 1(b)above :

(Rs. in lakhs)

Sr. Nature of Value for OutstandingNo. Transaction the year as on


31-03-02)

1. Advance towards — 38.55equity contribution (11.67) (38.55)

2. Investments in equity — 60.00shares (at cost) (60.00) (60.00)

(iii) Details relating to parties referred to in 1(c)above :

Sr. Nature of Transaction Rs. LakhsNo. (previous year)1. Sitting fees 1.64

(1.67)2. Remuneration to 5.94

Managing Director (5.22)

27. Segment Information :(Rs. Lakhs)

For the year For the yearended on ended on

31-03-03 31-03-02i) PRIMARY SEGMENT INFORMATION :A] SEGMENT REVENUE:1. TOTAL SEGMENT REVENUE

a) Fertilizer Products 123711.95 143483.01b) Caprolactam and

Nylon Products 48454.77 41493.92c) Other Segments 11485.68 10466.18

TOTAL 183652.40 195443.11

2. INTER SEGMENT REVENUE — —

3. EXTERNAL REVENUE (1 - 2)

a) Fertilizer Products 123711.95 143483.01

b) Caprolactam andNylon Products 48454.77 41493.92

c) Other Segments 11485.68 10466.18

TOTAL 183652.40 195443.11

B] RESULT :

1. Segment result

a) Fertilizer Products -8360.17 4566.31



TOTAL -3576.64 9368.88

2. Unallocated expenses netof unallocated income -2174.94 -454.23

3. Operating Profit (B1 + B2) -5751.58 8914.65

4. Interest expenses -17076.43 -17659.65

5. Provision for Taxation :Current Taxation -2.00 -2.00

Deferred Tax (net) — 2058.74

6. Profit beforeExceptional Items -22830.01 -6688.26

7. Exceptional Items -16253.83 1881.99

8. Net Profit -39083.84 -4806.27

OTHER INFORMATION :1. Segment assets


Nylon Products 66414.74 71429.23


TOTAL 280515.26 305438.03

2. Unallocatedcorporate assets 22477.10 44959.25

3. Total Assets 302992.36 350397.28

4. Segment Liabilities




TOTAL 74186.05 79247.05

5. Unallocatedcorporate liabilities 177935.10 181148.40

6. Total Liabilities 252121.15 260395.45

(Rs. Lakhs)For the year For the year

ended on ended on31-03-03 31-03-02

60


Signatures to Schedules 1 to 22 :







7. Capital Expenditure




d) Corporate CapitalExpenditure 42.70 255.07

TOTAL 21185.47 2276.47

8. Depreciation




d) Unallocated corporateDepreciation 251.27 233.00

TOTAL 14236.64 13651.45

9. Non-Cash expenses




d) Unallocated non-cashexpenses 916.71 0.00

TOTAL 1443.35 502.85

(Rs. Lakhs)

For the year For the yearended on ended on

31-03-03 31-03-02

ii) SECONDARY SEGMENT INFORMATION :

The Company operates mainly in Indian market andthere are no reportable geographical segments.

iii) OTHER DISCLOSURES :

1. The Products and Services covered under eachbusiness segment is as under:

Fertilizer Products : Urea, AmmoniumSulphate, Di-ammoniumPhosphate, AmmoniumPhosphate Sulphate.

Caprolactam and : Caprolactam, Nylon-6,Nylon Products Nylon Filament Yarn,

Nylon Chips.

Other Segments : Melamine, Polymerproducts, Tradingactivity etc.

2. Segment revenue, results, assets and liabilitiesinclude the respective amounts identifiable toeach of the segment and amounts allocated onreasonable basis.

28. Balance of certain creditors and debtors / advancesare subject to confirmation / reconciliation andconsequential adjustments, if any.

29. Previous year's figures have been regroupedwherever necessary.

30. Additional information pursuant to the relevantprovisions of paragraphs 3 and 4 of Part-II ofSchedule-VI to the Companies Act, 1956 as perAnnexure-I.

31. Balance sheet abstract and company's generalbusiness profile in terms of Part-IV of Schedule-VIto the Companies Act, 1956 as per Annexure-II.

61

ANNEXURE - I

ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PARAGRAPHS 3 & 4 (C) & (D) OFPART-II OF SCHEDULE-VI TO THE COMPANIES ACT, 1956

(A) Capacities, Production and Stock Year 2002-03

Product Unit Licenced Installed Production Opening Stock Closing Stock Value Of Closing StockCapacity Capacity Rs. in lakhs

Per Per Annum Annum 2002-03 2001-02 2002-03 2001-02 2002-03 2001-02 2002-03 2001-02 2000-01

1. Ammonia MT 150000 150000 c 6670 0 0 0 0 0 0.00 0.00 0.00

2. Ammonia Expansion MT 445500 445500 c 314670 386210 5112 8884 4099 5112 409.07 460.08 881.77

3. Urea MT 364000 364000 245159 323050 29535 12821 4065 29535 342.93 2700.32 1148.97

4. Ammonium Sulphate Phosphate MT 256000 108000 93865 34354 13489 10 17576 13489 1355.43 953.05 0.59or orDi-ammonium Phosphate MT 108000 38999 102572 1733 30345 535 1733 60.76 188.66 3375.13

5. Caprolactam h MT 70000 70000 60004 59546 981 711 1462 981 953.36 520.04 421.41

6. Ammonium Sulphate h MT 202000 196000 213852 226082 8948 8069 8889 8948 447.08 412.05 361.94(Caprolactam)

7. Nylon-6 Chips MT d 7000 5424 5487 1413 1593 588 1413 572.90 1264.73 1544.74

8. Sulphuric Acid MT 132000 132000 e 108641 115115 11746 9187 10567 11746 115.91 69.34 58.87

9. Styrene Acrylonitrile MT 500 300 0 0 0 0 0 0 0.00 0.00 0.00

10. Melamine MT d 15000 6643 11521 4893 3435 916 4893 518.04 2553.22 1682.45

11. MEK Oxime MT d 1200 1464 1273 78 75 53 78 31.71 48.48 48.37

12. Methyl Methacrylate Monomer MT 5000 5000 c 3586 2665 232 223 62 232 45.50 173.90 159.24

13. Polymethyl Methacrylate Sheets MT 2000 2000 469 358 411 607 280 411 318.50 538.01 798.85

14. Polymethyl Methacrylate Pellets MT 1500 1500 2114 2010 137 476 97 137 88.51 124.05 453.58

15. Ammonium Sulphate (Polymers) MT 10000 10000 8973 6641 575 6332 939 575 24.88 15.23 123.66

16. Acetone Cyano Hydrine MT 5150 5150 c 5009 3309 22 310 259 22 126.61 11.36 158.46

17. Methacrylic Acid MT 500 500 493 405 32 127 19 32 16.61 31.22 112.74

18. 1A) DAP (A+B TRAIN) MT 150000 f 150000 f 537623 568152 49704 34777 93298 49704 10297.92 5447.26 4157.10

1B) DAP (C TRAIN) MT d g 396000 g

2) APS MT f f 0 70897 8616 35654 605 8616 47.60 683.71 2833.73

19. Synthetic Filament Yarn MT 6000 6000 5311 4084 669 562 581 669 721.00 819.99 829.50Incl.industrial Yarn/Tyre Cord

20. Nylon Chips - Fibre MT 2000 2000 2283 2073 640 616 570 640 542.85 531.85 468.39

21. Others 405.13 260.93 379.57

17442.31 17807.48 19999.06

a] Installed capacities and projects under execution are as certified by the Managing Director.

b] Quantities of production & stock of the products other than Ammonia, Sulphur Dioxide, Oleum, Sulphuric Acid, Monomer, Acetone Cyano Hydrine, arein packed form. Caprolactam production is inclusive of molten caprolactam.

c] Mainly for captive consumption.

d] Licence not applicable/exempt from compulsory licencing.

e] Production and Stock of Oleum & Sulphur Dioxide obtained from the Plant are expressed in terms of Sulphuric Acid.

f] Licenced and installed capacities of A+B trains are in terms of P2O5 ,whereas installed capacity of C train is in terms of DAP. However the productionand stock of all the trains are in terms of DAP/fertilizers and in packed form. APS also produce from Sikka DAP plant.

g] Installed 3rd train (C) with a capacity of 396000 MT per annum & commercial production commenced wef 23/10/2002.

h] Information at Sl.No. 5 & 6 includes Caprolactam and Ammonium Sulphate produced from “Caprolactam (Expansion Phase I)”

Inter Unit transfers for captive consumption are taken at cost and the accounting effect of such transfers is not considered.

}

62


ANNEXURE - I (Contd.)

(B) Stocks, Purchases and Sales of Trading Items

2002-03 Opening Stock Purchases Sales Closing Stock(2001-02) MT Rs. Lakhs MT Rs. Lakhs MT Rs. Lakhs MT Rs. Lakhs

Urea 467 21.84 350 17.29 817 40.78 — —(—) (—) (2921) (139.77) (2454) (119.94) (467) (21.84)

Diammonium Phosphate 167 15.38 — 0.86 167 17.76 — —(859) (79.24) (––) (13.55) (692) (71.36) (167) (15.38)

Potash 569 22.79 3134 131.99 3293 145.77 410 17.23(493) (19.98) (3593) (143.96) (3517) (149.64) (569) (22.79)

Single Super Phosphate 4.21 0.22 3.25 1.15(––) (5.18) (1.23) (4.21)

Pesticides 28.89 96.63 109.51 22.37(24.79) (123.11) (140.86) (28.89)

Seeds 19.55 27.98 54.44 —(––) (36.74) (20.56) (19.55)

Zinc Sulphate 2.58 8.69 14.38 0.19(0.75) (10.46) (10.60) (2.58)

Imported Nylon-6 7 8.79 — — — –– 7 8.79(7) (8.79) (—) (—) (––) (—) (7) (8.79)

Total 124.03 283.66 385.89 49.73(133.55) (472.77) (514.19) (124.03)

(C) Raw Materials Consumption

Unit 2002-03 2001-02 Quantity Value Quantity Value


FertilizernagarRock Phosphate MT 120527 3312.86 191484 5652.16Sulphur MT 138432 4571.28 146115 2911.12Naphtha MT 52533 7795.12 97468 12151.19Gas ‘000 SM3 182025 8360.56 196178 9001.84Benzene MT 71184 14926.61 73948 10423.99MEK MT 1324 442.24 1145 446.95Ammonia MT 524 48.96 804 67.08Cyclohexanone MT — — 475 160.70Others 43.15 56.74

39500.78 40871.77Polymers UnitAcetone MT 3539 1109.81 2351 699.15Hydrocyanic Acid MT 1635 233.23 1081 163.13Methanol MT 1471 219.88 1107 132.87Monomer MT 12 4.94 401 191.73Others 8.90 6.65

1576.76 1193.53Total c/f. 41077.54 42065.30

(Contd.)

63

Total b/f. 41077.54 42065.30

Sikka Unit

Ammonia MT 123028 8998.53 145722 10907.51

Phosphoric Acid MT 252852 44002.33 278579 48602.35

Others 214.14 487.80

53215.00 59997.66

Fibre Unit

Others 150.79 59.37

150.79 59.37

Total 94443.33 102122.33

(D) Value of Imported and Indigenous Raw Materials and Spare Parts consumed and percentage thereofto total consumption

2002-03 2001-02Rs. in lakhs % Rs. in lakhs %

Raw MaterialsImported 57677.57 61.07 66066.31 64.69Indigenous 36765.76 38.93 36056.02 35.31

94443.33 100.00 102122.33 100.00Spare PartsImported 608.06 48.74 686.05 39.33Indigenous 639.61 51.26 1058.14 60.67

1247.67 100.00 1744.19 100.00

(E) C.I.F. Value of Imports

2002-03 2001-02Rs. in lakhs Rs. in lakhs

Raw Materials 58405.78 63711.53Spare Parts 579.61 229.39Capital Goods 17.47 16.65

(F) Expenditure in Foreign Currency(on payment basis)Interest 1870.93 2233.33Technical Assistance/Know-how — 83.02

Others 19.51 25.50

(G) Remittance of dividend in Foreign Currency — —

(H) Earnings in Foreign ExchangeF.O.B.value of Exports 6515.82 8513.01

Unit 2002-03 2001-02 Quantity Value Quantity Value


ANNEXURE - I (Contd.)

(C) Raw Materials Consumption (Contd.)

64


ANNEXURE - IIPART-IV Balance Sheet Abstract and Company’s General Business Profile

I. Registration Details

Registration No. 1 1 2 1 State Code 0 4

Balance Sheet Date 3 1 - 0 3 - 2 0 0 3

II. Capital raised during the year (Amount in Rs. Thousands)

Public Issue Rights Issue

N I L N I L

Bonus Issue Private Placement

N I L N I L

III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)

Total Liabilities* Total Assets

3 0 3 8 0 7 3 3 3 0 3 8 0 7 3 3

Sources of Funds Paid up Capital Reserves & Surplus

7 9 7 3 6 8 4 3 7 1 2 5 1

Secured Loans Unsecured Loans

1 0 8 2 9 3 9 3 3 8 7 2 3 2 9

Application of Funds Net Fixed Assets Investments

1 8 9 8 2 6 1 1 1 2 6 3 2 9 1

Net Current Assets* Misc. Expenditure

( 4 5 7 0 5 9 ) 8 1 4 9 8

Accumulated Losses

N I L

* includes Deferred Tax

IV. Performance of Company (Amount in Rs. Thousands)

Turnover and Other Income Total Expenditure

1 8 8 7 0 0 0 3 2 1 1 5 2 8 0 4

Profit / (Loss) Before Tax Profit / (Loss) After Tax& Exceptional items & Exceptional items

(2 2 8 2 8 0 1) (3 9 0 8 3 8 4)

Earning per Share in Rs. Dividend Rate %

(4 9 . 0 2) N I L

V. Generic Names of Three Principal Products/Services of Company (as per monetary terms)

Item Code No. (ITC Code) Product Description

3 1 0 2 0 0 CHEMICAL FERTILIZERS

2 9 3 3 0 0 CAPROLACTAM

5 4 0 2 0 0 NYLON FILAMENT YARN

65

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2003(Rs. in lakhs)

For the year For the yearended 31-3-2003 ended 31-3-2002

[A] Cash Flow From Operating Activities :Net Loss before tax & Exceptional item (22828.01) (8745.00)Exceptional item (16253.83) 1881.99Adjustment for :Depreciation 14236.64 13651.45Interest charged 17076.43 17659.65Miscellaneous Expenditure Written Off 358.70 266.53Loss on Fixed Assets Sold / Written Off 744.81 140.15Profit on Sale of Fixed Assets (0.32) (449.54)Income from Investments (932.71) (1134.38)Provision for Doubtful Debts / Advances 699.39 1.83Provision for diminution in value of investments 275.45 —

32458.39 30135.69Operating Profit before Working Capital Changes (6623.45) 23272.68Adjustment for :Inventories 7267.55 862.15Trade and Other Receivables 23576.88 4413.88Current Liabilities and Provisions (7129.24) 3287.39Miscellaneous Expenditure (405.93) (48.92)(To the extent not written off or adjusted)

23309.26 8514.50Cash Generated from Operations 16685.81 31787.18Interest Paid (17939.31) (17163.16)Direct Taxes Paid (162.92) (88.20)

(18102.23) (17251.36)Net Cash From Operating Activities (1416.42) 14535.82

[B] Cash Flow From Investing Activities :Purchase of Fixed Assets (4332.67) (3490.01)Sale of Fixed Assets 84.66 832.30Purchase of Investments 0.00 (65.00)Sale of Investments 478.39 476.69Interest Received 198.73 145.61Dividend Received 801.77 918.40Net Cash used in Investing Activities (2769.12) (1182.01)

[C] Cash Flow From Financing Activities :Proceeds from issue of Share Capital — (4125.00)Proceeds from borrowings (273.48) (4678.93)Dividend Paid (8.72) (0.80)Net Cash Generated in Financing Activities (282.20) (8804.73)

NET INCREASE/(DECREASE) IN CASHAND CASH EQUIVALENTS [A+B+C] (4467.74) 4549.08CASH AND CASH EQUIVALENTS ATTHE BEGINNING OF THE YEAR 8670.63 4121.55CASH AND CASH EQUIVALENTS ATTHE END OF THE YEAR 4202.89 8670.63

Gautam Sen A. K. LukeExecutive Director (Finance) Managing DirectorV. D. NanavatyCompany Secretary N. R. Krishnan


As per our attached Report of even dateFor Ghiya & Co.

Chartered Accountants


66


STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANY

(A) Name of the Subsidiary Company : GSFC Investment And Leasing Company Limited

(B) The Financial Year of the Subsidiary Companyended on : 31st March, 2003

(C) Shares of the subsidiary held by Gujarat StateFertilizers & Chemicals Limited

(a) Number and face value : 10,00,000 Shares of Rs.10/- each fully paid up

(b) Extent of holding : 100%

(D) The net aggregates of Profit / (Loss) of the SubsidiaryCompany so far as it concerns the members ofGujarat State Fertilizers & Chemicals Limited :-

(a) not dealt with in the accounts of GujaratState Fertilizers & Chemicals Limited forthe year ended 31st March, 2003 amounts to :-

(i) for Subsidiary’s financial year ended asin (B) above. : Rs.2.30 lakhs

(ii) for the previous financial years of theSubsidiary since it became the HoldingCompany’s Subsidiary : (Rs.300.15 lakhs)

(b) dealt with in the accounts of Gujarat StateFertilizers & Chemicals Limited for the yearended 31st March, 2003 amounts to :-

(i) for Subsidiary’s financial year ended asin (B) above. : NIL

(ii) for the previous financial years of theSubsidiary since it became the HoldingCompany’s Subsidiary : Rs. 20.00 lakhs



R. S. AgarwalFertilizernagar S. R. Vengsarker27th June, 2003 DirectorsAs per ourattached Report of even date


Fertilizernagar (Davendra Upadhyay)29th June, 2003 Partner

66

67

GSFC INVESTMENT AND LEASING COMPANY LIMITED

Directors’ Report

To the Members,

Your Directors present their Thirteenth Annual Reporttogether with the Audited Accounts of the Company forthe year ended 31st March 2003.

FINANCIAL RESULTS

Summarised Results For the year Ended

31-3-2003 31-3-2002Rs. Rs.

Gross Income 12,40,897 10,81,031

Gross Profit/(-) Loss for the yearafter meeting all expenses,but before providing forDepreciation is 6,72,742 (1,39,22,244)

To/from which is(added)/deducted :Depreciation 4,19,391 (4,19,391)

Leaving a balance ofProfit/(Loss) for the year 2,53,351 (1,43,41,635)

Balance of Profit & LossAccount brought forward (3,00,14,586) (1,56,72,951)

Advance Income Tax/IT provisionsettled during the year (23,355) –

Leaving a balance in theProfit & Loss Account of (2,97,84,590) (3,00,14,586)

OPERATIONS

During the year under report, your Company has notundertaken any new business of leasing.

AUDITORS

M/s. C C Chokshi & Co., Vadodara, were re-appointed asthe Auditors of the Company, at the Twelfth AnnualGeneral Meeting, to hold office till the conclusion of theThirteenth Annual General Meeting. Accordingly, the saidAuditors retire at the conclusion of the ensuing AnnualGeneral Meeting and, being eligible, offer themselves forre-appointment pursuant to sub-section 1(B) of Section224 of the Companies Act, 1956.

DIRECTORS

Shri A K Luke, IAS has been appointed as a GSFC NomineeDirector and Chairman of the Board of Directors effective22-5-2003 vice Shri Balwant Singh, IAS.

Shri M D Buch will retire by rotation at the ensuingAnnual General Meeting of the Company. Being eligible,he offers himself for re-appointment.

The Board places on record its deep appreciation of thevaluable services rendered by Shri Shri Balwant Singh, IASduring his tenure as the Chairman of the Company.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) ofthe Companies Act, 1956 with respect to Directors’Responsibility Statement, it is hereby confirmed :

(i) that in the preparation of the annual accounts forthe financial year ended 31st March, 2003, theapplicable accounting standards had been followed;

(ii) that the directors had selected such accountingpolicies and applied them consistently and madejudgements and estimates that were reasonable andprudent so as to give a true and fair view of thestate of affairs of the Company at the end of thefinancial year and of the profit or loss of theCompany for the year under review;

(iii) that the directors had taken proper and sufficientcare for the maintenance of adequate accountingrecords in accordance with the provisions of theCompanies Act, 1956 for safeguarding the assets ofthe Company and for preventing and detecting fraudand other irregularities;

(iv) that the directors had prepared the accounts for thefinancial year ended 31st March, 2003 on a goingconcern basis.

DEPOSITS

Your Company has not accepted any deposits from thepublic.

CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTIONAND FOREIGN EXCHANGE EARNINGS AND OUTGO

Since your Company is not engaged in anymanufacturing activity, information pursuant to Section217 (1)(e) read with Companies (Disclosures of Particularsin the Report of the Board of Directors) Rules, 1988 maybe treated as “Nil”.

PARTICULARS OF EMPLOYEES

Your Company has no employees and as such no particularsas required by Section 217(2A) of the Companies Act, 1956,have been furnished.

INFORMATION PURSUANT TO NON-BANKING FINANCIALCOMPANIES ACCEPTANCE OF PUBLIC DEPOSITS (RESERVEBANK) DIRECTIONS, 1998

The information pursuant to Section 217(1) of the CompaniesAct, 1956 read with direction No.5 of Non-BankingFinancial Companies Acceptance of Public Deposits(Reserve Bank) Directions, 1998 may be treated as “Nil”.

COMPLIANCE CERTIFICATE

Pursuant to the proviso to sub-section (1) of Section 383Aof the Companies Act, 1956, a Compliance Certificate dtd.26-06-2003 is obtained from Shri K J Trivedi, CompanySecretary in whole-time practice, which is attached to thisReport.

APPRECIATION

Your Directors place on record their grateful thanks toGujarat State Fertilizers & Chemicals Limited, its officersand staff for their co-operation.

For and on behalf of the Board,

Fertilizernagar, A K Luke29th July, 2003 Chairman

68

13TH ANNUAL REPORT 2002-03

Compliance Certificate

Registration No. of the Company : 04-13913Nominal Capital : Rs.10,00,00,000/-

ToThe MembersGSFC Investment and Leasing Company Ltd.PO : Fertilizernagar - 391 750Dist. Vadodara

We have examined the registers, records, books and papersof GSFC Investment and Leasing Company LimitedGSFC Investment and Leasing Company LimitedGSFC Investment and Leasing Company LimitedGSFC Investment and Leasing Company LimitedGSFC Investment and Leasing Company Limited asrequired to be maintained under the Companies Act, 1956,(the Act) and the rules made thereunder and also theprovisions contained in the Memorandum and Articles ofAssociation of the Company for the financial year endedon 31st March, 2003. In our opinion and to the best ofour information and according to the examinations carriedout by us and explanations furnished to us by the Company,its officers and agents, we certify that in respect of theaforesaid financial year :

1. The Company has kept and maintained all registersas stated in Annexure ‘A’ to this Certificate, as perthe provisions of the Act and the rules made thereunderand all entries therein have been duly recorded.

2. The Company has duly filed the forms and returns asstated in Annexure ‘B’ to this certificate with theRegistrar of Companies within the time prescribedunder the Act and the rules made thereunder. Howeverno forms or returns were required to be filed withthe Regional Director, Central Govt., Company LawBoard or other authorities.

3. The Company being a Public Limited Company has thepaid-up capital of Rs. 1,00,00,000/- (Rupees One CroreOnly) as on 31st March, 2003.

4. The Board of Directors duly met five times respectivelyon 20-04-2002, 28-06-2002, 27-09-2002, 22-11-2002 and15-03-2003 in respect of which meetings proper noticeswere given and the proceedings were properly recordedand signed the minutes book maintained for thepurpose. The Company has not passed any BoardResolution by circulation.

5. The Company has not closed its Register of Membersduring the financial year.

6. The Annual General Meeting for the Financial yearended on 31st March, 2002 was held on 27th September,2002 after giving due notice to members of theCompany and the resolution passed there at were dulyrecorded in the minutes book maintained for thepurpose.

7. No Extra Ordinary General Meeting was held duringthe financial year.

8. The Company has not advanced any loans to itsdirectors or persons or firms or companies referred inthe Section 295 of the Act.

9. The Company has not entered into any contractsfalling within the purview of Section 297 of the Act.

10. The Company has made necessary entries in theRegister maintained u/s 301 of the Act.

11. As there were no instances falling within the purviewof Section 314 of the Act, the Company was notrequired to obtain any approvals from the Board ofDirectors, Members or the Central Govt. as the casemay be.

12. The Company has not issued any duplicate ShareCertificate during the financial year.

13. The Company has …..

(a) Not made any allotment or transmission ofsecurities during the financial year.

(b) Not declared any dividend or interim dividendduring the financial year under review.

(c) Duly complied with the requirements of Section217 of the Act.

14. The Board of Directors of the Company is dulyconstituted and the appointments of directors,additional directors, alternate directors to fill casualvacancies have been duly made.

15. The Company has not appointed any ManagingDirector/ Whole time Director / Manager during thefinancial year.

16. The Company has not appointed any Sole-sellingAgent during the financial year.

17. The Company was not required to obtain any approvalsof the Central Govt., Company Law Board, RegionalDirector, Registrar of Companies and/or such authoritiesprescribed under the various provisions of the Actduring the financial year.

18. The Directors had disclosed their interest in otherfirms/companies to the Board of Directors as perprovisions of the Companies Act, 1956 and rules madethereunder.

19. The Company has not issued any shares, debenturesor other securities during financial year.

20. The Company has not bought back any shares duringthe financial year.

21. There was no redemption of preference shares ordebentures during the financial year.

22. There were no transactions necessitating the Companyto keep in abeyance the rights to dividends, rightshares and bonus shares pending registration of transferof shares.

23. The Company has not invited/accepted any depositsincluding any unsecured loans falling within thepurview of Section 58A of the Companies Act, 1956during the financial year.

69


24. The amount borrowed by the Company from holdingcompany during the financial year ending 31-3-2003is within the borrowing limits of the Company andthat necessary resolutions as per section 293(1)(d) ofthe Act have been passed in duly convened annual/extra ordinary general meeting.

25. The Company has made loans and investment oradvances or given guarantee or provided securities toother bodies corporate in compliance with theprovisions of the Act and has made necessary entriesin the register kept for the purpose.

26. The Company has not altered the provisions of theMemorandum with respect to the situation of theCompany’s registered office from one State to anotherduring the year under scrutiny.

27. The Company has not altered the provisions of theMemorandum with respect to the object of theCompany during the year under scrutiny.

28. The Company has not altered the provisions of theMemorandum with respect to the name of the Companyduring the year under scrutiny.

29. The Company has not altered the provisions of theMemorandum with respect to the Share Capital of theCompany during the year under scrutiny.

30. The Company has not altered its Articles of Associationduring the financial year.

31. There was no prosecution initiated against or ShowCause notices received by the Company during thefinancial year for the offences under the Act.

32. The provisions of Section 417(1) of the Companies Act,1956 is not applicable as the Company has noemployees.

33. The provisions of Section 418 of the Companies Act,1956 is not applicable as the Company has noemployees.

For K J TRIVEDI & CO.Company Secretaries

Place : Ahmedabad K J TrivediDate : 26/06/2003 Sole Propritor

Registers as maintained by the Company :

1. Register of Members under Section 150 of theCompanies Act, 1956.

2. Register of Directors, Managing Director, Manager &Secretary under Section 303 of the Companies Act,1956.

3. Register of Directors’ Shareholdings under Section 307of the Companies Act, 1956.

4. Minutes Books of meetings of the Board of Directorsunder Section 193(1) of the Companies Act, 1956.

5. Minutes Book of the proceedings of Annual GeneralMeeting/EOGM’s under Section 193(1) of the CompaniesAct, 1956.

6. Register of Contracts, Companies and Firms in whichDirectors of the Company are interested under Sections299, 301 and 301(3) of the Companies Act, 1956.

7. Register of Investments / Loans under Section 372-Aof the Companies Act, 1956.

8. Register of transfer/transmission of shares.



Forms and Returns as filed by the Company, duringFinancial Year ended 31st March, 2003 :

Sr. Form PurposeNo.

1. Annual Return Under Section 159 of the Act.

2. Annual Report Under Section 220 of the Act.

3. Form 29 Under Section 264 & 266 ofthe Act.

4. Form 32 Under Section 303 of the Act.

5. Compliance Under Section 383(A) of the Act.Certificate

Annexure ‘A’Annexure ‘A’Annexure ‘A’Annexure ‘A’Annexure ‘A’

Annexure - ‘B’Annexure - ‘B’Annexure - ‘B’Annexure - ‘B’Annexure - ‘B’

With Regional Director : Not Applicable

With Central Govt. or : Not Applicableother authorities



70


To the Shareholders of GSFC Investment and Leasing CompanyLimited1. We have audited the attached Balance Sheet of GSFC

Investment and Leasing Company Limited as at 31st March,2003 and also the Profit and Loss Account of the Companyfor the year ended on that date, annexed thereto. Thesefinancial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinionon these financial statements.

2. We conducted our audit in accordance with auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financial statementsare free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used andsignificant estimates made by management, as well asevaluating the overall financial statement presentation. Webelieve that our audit provides a reasonable basis for ouropinion.

3. As required by the Manufacturing and Other Companies(Auditor’s Report) Order, 1988, issued by the Company Law Board in terms of Section 227 (4A) of the CompaniesAct, 1956, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to inparagraph 3 above, we report that :a) We have obtained all the information and explanations

which to the best of our knowledge and belief werenecessary for the purposes of our audit.

b) In our opinion, proper books of account as required bylaw have been kept by the Company so far as appearsfrom our examination of such books.

c) The Balance Sheet and Profit and Loss Account dealtwith by this report are in agreement with the booksof account.

Auditors’ Reportd) In our opinion, the Balance Sheet and Profit and Loss

Account dealt with by this report comply with theaccounting standards referred to in sub-section (3C) ofsection 211 of the Companies Act, 1956.

e) On the basis of the written representations receivedfrom the directors as of 31st March, 2003, and takenon record by the Board of Directors, we report thatnone of the directors is disqualified as on 31st March,2003 from being appointed as a director in terms ofclause (g) of sub section (1) of section 274 of theCompanies Act, 1956.

5. Attention is invited to the following notes in Schedule 8:(i) Note no. 4 : regarding recoverability of long outstanding

debt of Rs. 14,871/-. In our opinion, a provision fordoubtful debt needs to be made for the entire amount.This non provisioning for doubtful debt has resultedinto the profit for the year and the sundry debtorsto be overstated and the accumulated losses to beunderstated by Rs. 14,871/-.

Subject to the foregoing, in our opinion and to the bestof our information and according to the explanations givento us, the said accounts, read with the SignificantAccounting Policies and Notes on Accounts, give theinformation required by the Companies Act, 1956 in themanner so required and give a true and fair view inconformity with the accounting principles generally acceptedin India :(i) In the case of the Balance Sheet of the state of affairs

of the Company as at 31st March, 2003 and(ii) In the case of Profit and Loss Account of the profit

of the Company for the year ended on that date.For C.C.CHOKSHI & CO.Chartered Accountants

Place : Vadodara R. D. KamatDate : 26-06-2003 Partner

Annexure to the Auditors’ Report

(Referred to in paragraph (3) of our Report of even date onthe Accounts of GSFC INVESTMENT AND LEASING COMPANYLIMITED for the year ended March 31, 2003)1. The Company has maintained proper records showing full

particulars, including quantitative details and location offixed assets. The fixed assets of the Company have beenphysically verified by the management. We are informedthat no material discrepancies were noticed on suchverification.

2. The fixed assets of the Company have not been revaluedduring the year.

3. The Company was not engaged in any trading actvityduring the year and also there was no stock of goods atthe year end. Requirements of items (iii),(iv),(v)(vi),(xii),(xiv),and (xvi) of clause A and clause C of paragraph 4 of theorder are not applicable to the Company.

4. The Company has not taken any loan from companies, firmsor other parties listed in the register maintained underSection 301 of the Companies Act, 1956. We are informedthat there is no Company under the same managementwithin the meaning of Section 370 (1B) of the Act.

5. The Company has not granted any loans, secured orunsecured, to companies, firms or other parties listed inthe register maintained under Section 301 of the CompaniesAct, 1956. We are informed that there is no company underthe same management within the meaning of Section 370(1B) of the Act.

6. No loans or advances have been given by the Company andhence there are no recoveries to be effected on thataccount as to the principal and interest.

7. There are adequate internal control procedures in thecontext of the present activities of the Company.

8. According to the information and explanations given to us,there are no transactions of purchase of goods and materialsand sale of goods, materials and services, made in pursuanceof the contracts or arrangements entered in the registermaintained under Section 301 of the Companies Act, 1956and aggregating during the year to Rs.50,000/- or more inrespect of each party.

9. The Company has not accepted any deposits from thepublic.

10. The Company has no internal audit system.11. We have been informed that provisions relating to Provident

Fund and Employees’ State Insurance, were not applicableto the Company during the year.

12. According to the information and explanations given to us,no undisputed amount payable in respect of Income-tax,Wealth-tax and Custom duty are outstanding as at 31st

March, 2003 for a period of more than six months fromthe date they became payable.

13. According to the information and explanations given to us,no personal expenses have been charged to Profit and LossAccount.

14. The Company is not a sick industrial company within themeaning of clause (o) of sub-section (1) of section 3 of theSick Industrial Companies (Special Provisions) Act, 1985.

For C.C.CHOKSHI & CO.Chartered Accountants

Place : Vadodara R. D. KamatDate : 26-06-2003 Partner

71


Balance Sheet as at 31st March, 2003(Rupees) (Rupees)

As At As At31.03.2002 Schedule 31.03.2003

SOURCES OF FUNDS

Shareholders’ Funds :

10000000 Share Capital 1 10000000

Unsecured Loans :

115072612 ICD from GSFC Ltd. 126522337

125072612 TOTAL 136522337

APPLICATION OF FUNDS

Fixed Assets : 2

4467137 Gross Block 4467137

1342478 Less : Depreciation 1761869

3124659 2705268

1060480 Less : Lease Adjustment Account 1681647

2064179 Net Block 1023621

103749982 Investments 3 103019632

Current Assets, Loans and Advances :

14871 Sundry Debtors 4 14871

213732 Cash and Bank Balances 5 254372

352029 Advance tax and TDS 91502(net of Provision for taxation)

2000 Others 0

3500353 Short Term Deposits 2558120

19914 Interest accrued but not due 25169

4102899 Total Current Assets 2944034

14859034 Less: Current Liabilities & Provisions 6 249540

-10756135 Net Current Assets 2694494

30014586 Profit & Loss Account 29784590


Notes on Accounts 8

125072612 TOTAL 136522337

A. K. LukeAS PER OUR ATTACHED REPORT OF EVEN DATE Chairman

FOR C.C. CHOKSHI & CO.CHARTERED ACCOUNTANTS R. N. Shah

M. D. BuchR. D. Kamat DirectorsPARTNER

Place : Vadodara Place : FertilizernagarDate : 26-06-2003 Date : 26-06-2003

72


Profit and Loss Account for the year ended 31st March, 2003

(Rupees) (Rupees)For the For the

Year ended Year ended31.03.2002 31.03.2003

INCOME

203536 Interest on Short Term Deposits 144068

1244844 Lease Rent 1244844

487349 Less : Lease Equalisation Account 621167

757495 623677

0 Interest on Income Tax Refund Order 88585

120000 Dividend 180000

0 Profit on sale of shares 204567

1081031 TOTAL 1240897

EXPENDITURE

Supporting Service Charges to GSFC forAdministration, Finance, Legal Services

450000 and for use of Office Premises 450000

29325 Legal & Professional Exp. 73160

10500 Audit Fees 10800

94327 Misc. Expenses 16671

14384077 Interest on ICD 0

419391 Depreciation 419391

13553 Service Charges (Zerox Machine) 7524

21493 Preliminary and Other Expenses written off 0

0 Income Tax Penalty 10000

15422666 TOTAL 987546

-14341635 Profit / (-) Loss before tax 253351

-15672951 Balance of Profit and Loss Account brought Forward -30014586

0 Less : Advance Income Tax / IT Provision settled during the year -23355

-30014586 Balance Carried to Balance Sheet -29784590





73


SCHEDULE - 1 CAPITAL

(Rupees) (Rupees)As At As At

31.03.2002 31.03.2003

SHARE CAPITAL

Authorised :

95000000 95,00,000 Equity Shares of Rs. 10/- each 95000000

5000000 0,050,000 Preference Shares of Rs.100/- each 5000000

100000000 100000000

Issued, Subscribed and Paid up :

10000000 10,00,000 Equity Shares of Rs.10/- each fully paid (100% held by GSFC Ltd.) 10000000

10000000 TOTAL 10000000

(PY : Out of the above equity shares, 9,99,993 equity sharesare held by Gujarat State Fertilizers & Chemicals Limited,holding company)


Name of Assets Gross Block of Assets Depreciation Block Lease Adjustment Net AssetsAmount

As at Addition Deduction As at Total Addition Adjustment Total31.03.2002 during during 31.03.2003 upto for during upto upto upto As at As at

the Year the Year 31.03.2002 the Year the Year 31.03.2003 31.03.2003 31.03.2002 31.03.2003 31.03.2002

Assets on Lease 4362137 0 0 4362137 1328867 414403 0 1743270 1681647 1060480 937220 2064179(Vehicles)

Zerox Machine 105000 0 0 105000 13611 4988 0 18599 0 0 86401 0

TOTAL 4467137 0 0 4467137 1342478 419391 0 1761869 1681647 1060480 1023621 2064179

2001-2002 4467137 0 0 4467137 923087 419391 0 1342478 1060480 573131 2064179

SCHEDULE - 3 INVESTMENTS (At Cost)


31.03.2002 31.03.2003

Quoted :

1,50,000 - Fully paid equity shares of3750000 Rs.10/- each of GRUH Finance Limited 3750000

(Previous Year 1,50,000 Shares of Rs.10/- each)

36,69,857 - Fully paid equity shares ofRs.10/- each of Gujarat Industries Power

99999982 Co. Ltd. at a premium of Rs.17.05 99269632(Previous Year 36,96,857 shares of Rs.10/-each at a premium of Rs.17.05)

103749982 TOTAL 103019632

Market Value of Quoted Investments of Gruh Fin. Ltd. Rs. 2385000/-(Previous Year Rs. 2587500/-)

Market Value of Quoted Investments of G.I.P.C.L. Rs. 55781826/-(Previous Year Rs. 72828083/-)


74


Sundry Debtors : (Unsecured, Considered Good)

14871 Outstanding for a period exceeding six months 14871

14871 TOTAL 14871

SCHEDULE - 5 CASH AND BANK BALANCES– Cash on hand –

Bank Balance with Scheduled Banks :

187955 In Current Account with Bank of Baroda 232343

25777 In Current Account with IDBI Bank 22029

213732 TOTAL 254372

SCHEDULE - 6 CURRENT LIABILITIES AND PROVISIONSCurrent Liabilities and Provisions :

448791 Gujarat State Fertilizers & Chemicals Limited (holding company) 225000

26165 Sundry Creditors for Expenses 24540

2934353 TDS Payable 0

11449725 Interest Payable on ICD from G.S.F.C. LTD. 0

14859034 TOTAL 249540



31.03.2002 31.03.2003


SCHEDULE - 7 SIGNIFICANT ACCOUNTING POLICIES

1. System of Accounting Policies

The Company adopts the accrual concept in the preparation of accounts.

2. Fixed Assets

Fixed assets are capitalised at cost inclusive of all incidental expenses for the relevant assets.

3. Investments

Long-term investments are valued at cost.

4. Depreciation

Depreciation on fixed assets is provided on “Straight Line Method” at the rates prescribed in ScheduleXIV to the Companies Act, 1956, as amended.

5. Trading Activity

Purchases and Stocks relating to trading activities are recorded at cost with additions of Direct costs,and sale of goods are booked at prices realized/realizable, including elements of applicable excise andsales tax.

75


6. Inventory

Stock of trading goods is valued at cost or net realizable value whichever is less. The stock is valuedon FIFO basis.

7. Accounting for Taxes on Income

Deferred tax is recognized on timing differences, subject to consideration of prudence, arising/originatingduring the year and reversing during the year.


1. The Company has not engaged in any trading activity during the current year. Also, there are no newleases commencing after April 1, 2001.

2. In respect of leases commencing before April 1, 2001, the Company has followed the Guidance noteon ‘Accounting for Leases’ issued by the Institute of Chartered Accountants of India.

3. No provision has been considered for the difference in value between investment in shares at cost andmarket quotation of relevant shares as on 31-03-2003 of Rs. 448.52 lacs (P.Y. Rs. 283.34 lacs), since inthe opinion of the Company, the decline in the value of investments, is temporary in nature.

4. Sundry Debtors comprise of receivable of Rs. 14,871/- from a party long outstanding, for which themanagement has initiated action for recovery and believe it to be good and recoverable.

5. As per the Accounting Standard - 22, “Accounting for Taxes on Income” issued by the Institute of CharteredAccountants of India, the Company has no Deferred Tax Liability as on 31st March, 2003. In view ofthe losses, the Company has not recognized the Deferred Tax Asset as on that date.

6. The break-up of the payment to Auditors is as under :

2002-2003 2001-2002(Rs.) (Rs.)

(including service tax)

Audit Fees 10800 10500

Fees in other Capacity 58500 –

TOTAL 69300 10500

Signatures to Schedules 1 to 8 :





76


PART-IV Balance Sheet Abstract and Company’s General Business Profile

I. Registration Details

Registration No. 1 3 9 1 3 State Code 0 4

Balance Sheet Date 3 1 - 0 3 - 2 0 0 3

II. Capital raised during the year (Amount in Rs. Thousands)Public Issue Rights Issue

N I L N I LBonus Issue Private Placement

N I L N I LIII. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)

Total Liabilities Total Assets1 3 6 5 2 2 1 3 6 5 2 2

Sources of Funds Paid up Capital Reserves & Surplus 1 0 0 0 0 N I L

Secured Loans Unsecured LoansN I L 1 2 6 5 2 2

Application of Funds Net Fixed Assets Investments1 0 2 4 1 0 3 0 2 0

Net Current Assets Misc. Expenditure 2 6 9 4 0

Accumulated Losses2 9 7 8 5

IV. Performance of Company (Amount in Rs. Thousands)Turnover Total Expenditure

1 2 4 1 9 8 8Profit Before Tax Profit After Tax

2 5 3 2 5 3Earning per Share in Rs. Dividend Rate %

0. 2 5 3 0

V. Generic names of Principal Products / Services of Company (as per monetary terms)Item Code No. Product Description

N I L INVESTMENT

N I L LEASING

A. K. LukeChairman


M. D. BuchR. D. Kamat DirectorsPARTNERPlace : Vadodara Place : FertilizernagarDate : 26-06-2003 Date : 26-06-2003


77

We have audited the attached Consolidated Balance Sheet of Gujarat State Fertilizers & Chemicals Limitedand it’s subsidiary as at 31st March, 2003 and also the related Profit and Loss Account and the Cash FlowStatement for the year then ended. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these statements based on our audit. We didnot audit the financial statements of GSFC Investment and Leasing Co. Limited, the subsidiary, for the yearended 31st March, 2003. These statements were audited by other Auditors whose report has been furnishedto us, and our opinion, so far as it relates to this company is based solely on the report of the other Auditors.

We conducted our audit in accordance with generally accepted auditing standards in India. These standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financialstatements are free of material mis-statement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by the management, as well as evaluating theoverall financial statement presentation. We believe that our audit and the report of other auditors providea reasonable basis for our opinion.

We report that the consolidated financial statements have been prepared by the Company in accordancewith the requirements of Accounting Standard – 21 ‘Consolidated Financial Statement’ issued by the Instituteof Chartered Accountants of India, on the basis of the individual financial statements of Gujarat StateFertilizers & Chemicals Limited and its subsidiary included in the consolidated financial statements.

On the basis of the information and explanations given to us and on the consideration of the separateaudit report on the audited financial statements of Gujarat State Fertilizers & Chemicals Limited and itsaforesaid subsidiary, we are of the opinion that :

(a) the Consolidated Balance Sheet gives a true and fair view of the consolidated state of affairs of GujaratState Fertilizers & Chemicals Limited and its subsidiary as at 31st March, 2003, and

(b) the Consolidated Profit and Loss Account gives a true and fair view of the consolidated results of operationsand the Cash Flow Statement of Gujarat State Fertilizers & Chemicals Limited and its subsidiary forthe year then ended.

For GHIYA & COMPANYFor GHIYA & COMPANYFor GHIYA & COMPANYFor GHIYA & COMPANYFor GHIYA & COMPANYChartered Accountants

Place : Fertilizernagar Devendra UpadhyayDated : 27th June, 2003 Partner

AUDITORS’ CERTIFICATE

We have examined the attached consolidated Cash Flow Statement of Gujarat State Fertilizers & ChemicalsLimited for the year ended 31st March, 2002. The Statement has been prepared by the Company in accordancewith the requirement of listing agreement clause 32 with Stock Exchanges and is based on and in agreementwith the corresponding Profit & Loss Account and Balance Sheet of the Company covered by our reportof 28 June, 2002 to the members of the Company.

For RAMANLAL G. SHAH & CO.For RAMANLAL G. SHAH & CO.For RAMANLAL G. SHAH & CO.For RAMANLAL G. SHAH & CO.For RAMANLAL G. SHAH & CO.Chartered Accountants

Place : FertilizernagarDated : 28 June, 2002. Partner

AUDITORS’ REPORT TO THE BOARD OF DIRECTORS OFGUJARAT STATE FERTILIZERS & CHEMICALS LTD.

78

CONSOLIDATED ANNUAL ACCOUNTS 2002-03CONSOLIDATED ANNUAL ACCOUNTS 2002-03CONSOLIDATED ANNUAL ACCOUNTS 2002-03CONSOLIDATED ANNUAL ACCOUNTS 2002-03CONSOLIDATED ANNUAL ACCOUNTS 2002-03

Balance Sheet as at 31st March, 2003(Rs. in lakhs)


SOURCES OF FUNDSShareholders’ Funds :Share Capital 1 7973.68 7973.68Reserves and Surplus 2 52622.36 82495.77

60596.04 90469.45Loan Funds :Secured Loans 3 108293.93 111703.10Unsecured Loans 4 38723.29 35587.60

147017.22 147290.70Total 207613.26 237760.15

APPLICATION OF FUNDSFixed Assets : 5Gross Block 305775.78 285743.18Less: Depreciation 116215.69 102389.50Net Block 189560.09 183353.68Capital work in progress 276.25 196.04Projects under execution – 17030.15

189836.34 200579.87Investments 6 22129.55 14324.25Current Assets, Loans and Advances :Income accrued on Investments 2.83 70.56Inventories 7 41213.26 48480.81Sundry Debtors 8 30926.86 55097.39Cash and Bank Balances 9 4205.43 8672.77Loans and Advances 10 23588.18 22901.11

99936.56 135222.64Less: Current Liabilities and Provisions :Current Liabilities 11 72294.69 80813.01Provisions 12 5609.44 5121.31

77904.13 85934.32Net Current Assets 22032.43 49288.32Deferred Tax :[Refer note 11(d) of Schedule-22]Deferred Tax Assets 19360.97 19360.97Deferred Tax Liability (46561.01) (46561.01)

(27200.04) (27200.04)Miscellaneous Expenditure 814.98 767.75(To the extent not written off or adjusted)(Refer note 21 of Schedule-22)

Total 207613.26 237760.15





R. S. AgarwalFertilizernagar S. R. Vengsarker

27th June, 2003 Directors



Fertilizernagar Devendra Upadhyay

27th June, 2003 Partner

79

Profit and Loss Account for the year ended 31st March, 2003(Rs. in lakhs)


INCOMESales 13 193523.19 203523.33Less : Excise Duty recovered on Sales 9870.79 8080.22Net Sales 183652.40 195443.11Other Income 14 5049.30 4581.34

Total 188701.70 200024.45EXPENDITUREMaterials, Manufacturing & Operating Expenses 15 130147.16 138932.25Personnel Expenses 16 17517.16 15675.01Administration, Marketing & Other Expenses 17 17284.68 20401.21Purchase of Finished Products 283.66 472.77Interest :On Debentures/Bonds and Fixed Loans 10489.33 10625.62Others 6587.10 7034.03

17076.43 17659.65Depreciation 14240.83 13655.64

Sub Total 196549.92 206796.53(Increase)/Decrease in Stock of Finished products,Trading Goods and Stock-in-Process 18 12720.99 2121.08

Total 209270.91 208917.61Balance (20569.21) (8893.16)Prior Period Adjustments (Net) 19 (1515.01) 4.75Loss before Taxes & Exceptional Items (22084.22) (8888.41)Provision for TaxationCurrent Taxation (2.24) (2.00)Deferred Tax (Net) — 2058.74

(2.24) 2056.74Loss after Taxes but before Exceptional Items (22086.46) (6831.67)Exceptional Items (16253.83) 1881.99(refer note 14 of Schedule-22)Loss after Exceptional Items (38340.29) (4949.68)Balance brought forward from last year (300.14) (156.73)Excess Provision for Taxation written back 0.44 2.04Investment Allowance Reserve written back — 1910.27Debenture/Bond Redemption Reserve written back 5137.50 —Balance in Profit & Loss Account (33502.49) (3194.10)Transferred from General Reserve 33945.90 2893.96Balance Carried to Balance Sheet 443.41 (300.14)

Loss after Exceptional Items (38340.29) (4949.68)Weighted average number of Equity Shares 79736830 79736830Basic and Diluted Earnings Per Share (in Rs.) (48.08) (6.21)Nominal value per share (in Rs.) 10.00 10.00Pre-operative Expenses 20Significant Accounting Policies 21Notes on Accounts 22



R. S. AgarwalFertilizernagar S. R. Vengsarker

27th June, 2003 Directors



Fertilizernagar Devendra Upadhyay

27th June, 2003 Partner

80


Schedules Forming Part of Balance SheetSchedules Forming Part of Balance SheetSchedules Forming Part of Balance SheetSchedules Forming Part of Balance SheetSchedules Forming Part of Balance Sheet

SCHEDULE - 1 SHARE CAPITAL(Rs. in lakhs)


Authorised :

1,60,00,000 Redeemable Cumulative PreferenceShares of Rs.100 each 16000.00 16000.00

20,00,00,000 Equity Shares of Rs.10 each 20000.00 20000.00

36000.00 36000.00

Issued :


7982.44 7982.44

Subscribed :

7,98,13,937 Equity shares of Rs.10 each 7981.39 7981.39

7981.39 7981.39

Paid-up :


1,16,091 Add : Forfeited Equity Shares 4.13 4.13(Amount originally paid up)

7973.68 7973.68

Total 7973.68 7973.68

2,340 Equity Shares forfeited and amounttransferred to Capital Reserve in earlier years.

Notes :

(1) Out of the Equity Shares mentioned above :

(a) Under the scheme of amalgamation with the Company

(i) 5,86,390 shares of Rs. 10 each were issued to the shareholders of erstwhile Polymers Corporation of Gujarat Limited.

(ii) 18,57,600 shares of Rs.10 each were issued to the shareholders of erstwhile Gujarat Nylons Limited.

(b) 3,12,41,915 shares of Rs.10 each were issued as fully paid-up bonus shares by capitalisation of Reserves and Share PremiumAccount.

SCHEDULE - 2 RESERVES AND SURPLUS

(Rs. in lakhs)

Balance as Additions Deductions Balance as Balance asat 1st at 31st at 31st

April, 2002 March, 2003 March, 2002

Capital Reserve I 3.43 — (b) — 3.43 3.43

Capital Reserve II 1248.77 — (b) — 1248.77 1248.77

Capital Redemption Reserve 3335.00 — (b) — 3335.00 3335.00

Share Premium Account 30524.02 — (b) — 30524.02 30524.02

Debenture/Bond Redemption Reserve 12350.00 — (b) 5137.50 (a) 7212.50 12350.00

General Reserve 35334.69 8466.44 (b) 33945.90 (a) 9855.23 35334.69

Total Reserves 82795.91 8466.44 (b) 39083.40 52178.95 82795.91

Profit and Loss Account (300.14) 743.55 (b) — 443.41 (300.14)

Total 82495.77 9209.99 (b) 39083.40 52622.36 82495.77

(31-3-2002) (117527.19) (–143.41) (b) (34888.01) (82495.77) (117527.19)

(a) Transferred to Profit & Loss Account.

(b) Retained Earning on accounting of Investment in Associates on first occasion.

81


SCHEDULE - 3 SECURED LOANS(Rs. in lakhs)


A] Debentures / Bonds :

i) Secured Redeemable Non-convertible debentures ofRs.100/-each (on private placement basis) * 8000.00 8000.00

10,00,000 - 14.5%

70,00,000 - 16.25%

ii) 2,500 - 12.5% Secured Redeemable Non-ConvertibleBonds of Rs.500000 each (on private placement basis) 12500.00 12500.00

iii) 1,670 - 12.6% Secured Redeemable Non-ConvertibleBonds of Rs.500000 each (on private placement basis) 8350.00 8350.00

28850.00 28850.00

*(Of the above, Debentures of Rs. 2666.65 lakhs areto be redeemed during the next twelve months)

B] Loans from :

i) Life Insurance Corporation of India(LIC)* 162.00 162.00

ii) Industrial Development Bank of India (IDBI)* 5291.69 5291.69

iii) The Industrial Finance Corporation of India Limited (IFCI)* 3136.00 3136.00

iv) ICICI Bank Ltd.* 822.46 822.46

v) General Insurance Corporation of India (GIC)and its Subsidiaries* 12.80 18.00

vi) Industrial Investment Bank of India Ltd.(IIBI)* 88.00 88.00

vii) Kreditanstalt fur Wiederaufbau, Germany 12579.51 10348.02(KfW) Foreign Currency Loan

viii) ICICI Bank Ltd.* 3000.00 3000.00

ix) Oriental Insurance Company Ltd. (OIC) 250.00 —

x) Deposits from a Company* 3700.00 4000.00

29042.46 26866.17

*(Of the above, Rs. 5401.78 lakhs are payableduring the next twelve months)

C] From Banks :

i) Cash Credit 35360.62 40978.25

Interest accrued and due 40.85 8.68

ii) Working Capital Term Loans 15000.00 15000.00

50401.47 55986.93

Total 108293.93 111703.10

1. (a) Debentures at A(i) and Bonds at A(ii) and A(iii) are secured by first mortgage on the Company’s land, buildings and all movables,both present and future, at Fertilizernagar, District Vadodara and at Villages Motikhavadi and Sikka, District Jamnagar (excludingthe assets of the Company’s Polymers and Fibre Units), subject to prior charges of the Company’s bankers on specified movablesfor securing borrowings for working capital requirements and ranking pari passu with the mortgages and charges created infavour of other such chargeholders.

(b) The Debentures at A(i) are redeemable in three equal annual instalments commencing from 01-01-2004.

(c) The Bonds at A(ii) shall be redeemed in five equal biannual instalments commencing from 29-10-2004 (i.e. at the end of 5thyear from the date of allotment). (Refer note 4)

(d) The Bonds at A(iii) shall be redeemed in four equal bi-annual instalments commencing from 01-10-2005.

2. The loans at B(i) to B(vi) are secured against hypothecation of the movable properties (except book debts) of the Company (excluding

(Contd.)

82


SCHEDULE - 4 UNSECURED LOANS

(Rs.in lakhs)


1] Fixed Deposits 7638.09 7992.57

2] Deposits from Other Companies — 538.36

3] Other Loans :

(a) Housing Development Finance CorporationLtd.(HDFC) (for housing loans to employees)* 2107.14 2535.71

(b) Kreditanstalt fur Wiederaufbau Germany (KfW)Foreign Currency Loan 6000.25 4935.86

(c) External Commercial Borrowingsin Foreign Currency 7119.00 7302.00

(d) Banks :

(i) For housing loans to employees* 3116.00 3782.00

(ii) Interest accrued & due on (i) above 22.07 26.44

(iii) For vehicle loans to employees* 510.00 510.00

(iv) Interest accrued & due on (iii) above — 0.90

(v) Under acceptance-cum-bill discounting facility 12210.74 7963.76

15858.81 12283.10

31085.20 27056.67

Total 38723.29 35587.60

(Of the above, Rs. 20336.79 lakhs are payableduring the next twelve months)

The loans from KfW at 3(b) and External Commercial Borrowing at 3(c) are to be secured by way of second and subservient charge onmovable and immovable assets of the Company (excluding those of Company’s Polymers & Fibre units).

*Refer note 9 of Schedule 22

those of Company’s Polymers and Fibre Units and investments in Units of Unit Trust of India) and secured by a joint equitable mortgagecreated on the immovable properties of the Company (excluding those of Company’s Polymers & Fibre Units), both present and future.

The loan from KfW at B(vii) is secured by guarantees issued by IDBI and State Bank of India. The guarantee assistance by IDBI issecured by joint equitable mortgage/hypothecation of the immovable / movable properties of the Company (excluding those of Company’sPolymers and Fibre Units and investments in Units of Unit Trust of India), both present and future. The guarantee assistance by SBIis secured by joint equitable mortgage of the immovable properties of the Company (excluding those of Company’s Polymers andFibre units and investments in Units of Unit Trust of India), both present and future and by the counter guarantee of the Company.

All these mortgage & hypothecation charges are subject to prior charges in favour of Company’s bankers on specified movables. Abovecharges are ranking pari passu amongst the lenders.

The loan from ICICI Bank Ltd. at B(viii) is secured against pledge of Equity shares of Gujarat Narmada Valley Fertilizers CompanyLimited held by the Company.

The loan from OIC at B(ix) is to be secured by way of second charge on current assets of the Company.

Deposits from a Company stated at B(x) is to be secured by way of second charge either on fixed assets or current assets (excludingthose of Company’s Polymers & Fibre units)

3. The Credit Facility and working capital term loan from Banks at C(i) and C(ii) above is secured by hypothecation of stock of rawmaterials, finished products, packing materials, general stores, spares, book debts etc. of the Company.

The Working Capital Term Loan from Banks at C(ii) are further secured by a joint equitable mortgage created on the immovableproperties of the Polymers unit and Fibre unit of the Company.

4. The Company has submitted the restructuring proposal for privately placed debentures / bonds and term loans with FIs / Banks forwhich necessary consents were received except from some of the bondholders for bonds at A(ii) and one of the lenders of the WorkingCapital Term Loan at C(ii) for which Company is in process of getting consent.

SCHEDULE - 3 SECURED LOANS (Contd.)


83



(Rs. in lakhs)

Sr. Assets Gross Block Depreciation Net Block

No. As at Additions/ Deductions/ As at For the year upto As at As at1-4-2002 Adjustments Adjustments 31-3-2003 2002-03 31-3-2003 31-3-2003 31-3-2002

1. Land-Freehold 549.17 — — 549.17 — — 549.17 549.17

2. Land-Leasehold 29.39 — — 29.39 — — 29.39 29.39

3. Buildings 7519.49 1105.11 0.05 8624.55 196.91 2423.68 6200.87 5292.72(IncludingRoads, Culverts& CompoundWalls)

4. Railway Sidings 886.35 711.81 — 1598.16 55.18 487.20 1110.96 454.33

5. Plant &Machinery 273811.87 19318.57 2113.70 291016.74 13811.93 110585.25 180431.49 175834.63

6. Furniture,Fittings &Equipments 2643.21 41.45 24.08 2660.58 126.98 1657.38 1003.20 1103.04

7. Vehicles 190.80 5.46 1.74 194.52 11.62 142.18 52.34 64.80

8. Library Books 65.35 3.07 — 68.42 1.90 46.10 22.32 21.16

9. Live Stock 0.14 — — 0.14 — — 0.14 0.14

10. Assets retiredfrom use &held for disposal 47.41 1411.58 424.88 1034.11 36.31 873.90 160.21 4.30

Total 285743.18 22597.05 2564.45 305775.78 14240.83 116215.69 189560.09 183353.68

(31st March 2002) (286390.69) (2276.47) (2923.98) (285743.18) (13660.52) (102389.50) (183353.68)

11. Capital Workin Progress 276.25 — — 276.25 196.04

12. Projects underexecution — — — — 17030.15

Total 306052.03 14240.83 116215.69 189836.34 200579.87

Notes:

1. The Company has acquired land through Government and also through direct negotiations. The entire land is in possession of theCompany. In respect of portion of land for which the Company has still not received the award/sale deed, the advance paid to land ownershave been treated as land. In respect of other portion of land acquired through direct negotiations, compensation has been paid at thenegotiated price. The Company also holds possession of a portion of land for which no amount has been paid in absence of receipt ofawards.

2. The Company has leased a portion of its land to Bank of Baroda for bank premises at Fertilizernagar and Sikka and another portionat Fertilizernagar to Department of Atomic Energy (DAE) for establishment of Synthesis Gas Facility (A-III Plant).

3. Buildings include Rs. 0.02 lakh being the value of shares in Co-operative Housing Societies.

4. Cost of equipment against which Government subsidy is received are shown net of subsidy.

5. Additions / Deductions include :

(a) Rs. 3125.09 lakhs being the net increase (previous year Rs. 848.84 lakhs net increase) in value on account of realignment of foreigncurrencies affecting liabilities payable in foreign currencies.

6. Projects under execution includes Nil balance (previous year Rs. 3065.95 lakhs) being expenses pending allocation (Refer Schedule 20-Pre-Operative Expenses).

7. Assets retired from use and held for disposal at item no. 10 are stated at cost or realisable value whichever is lower. No depreciation hasbeen charged on these assets for the year after its retirement.

84


SCHEDULE - 6 INVESTMENTS

(Rs. in lakhs)


Rs.

LONG TERM INVESTMENTS :

1. GOVERNMENT SECURITIES (Unquoted) :

National Savings Certificates 0.37 0.37

2. TRADE INVESTMENTS : ‘

(i) Quoted :

a) Fully paid Equity Shares of –

Gujarat Narmada Valley Fertilizers Co. Ltd. 3,07,79,167 10 14338.33 5838.81

Gujarat Industries Power Co. Ltd. 2,23,62,784 10 3649.59 3656.89(27,000 shares sold during the year)

Gujarat Alkalies & Chemicals Ltd. 10,34,400 10 749.94 749.94

18737.86 10245.64

b) Fully paid Debentures –

Gujarat Industries Power Co. Ltd. 31,49,599 15 472.44 944.88(Non-convertible part of 18% secured redeemabledebentures) (Second instalment of Rs. 15 perdebenture redeemed during the year)

19210.30 11190.52

(ii) Unquoted :


Indian Potash Limited 7,50,000 10 60.50 60.50

Gujarat Chemical Port Terminal Co. Ltd. 1,48,00,000 10 1480.00 1480.00

Gujarat Agri Processing Company Ltd. 6,00,000 10 26.92 60.00

1567.42 1600.50

3. OTHER INVESTMENTS :

(i) Quoted :


ICICI Bank Ltd. 210 10 0.14 0.14(received against equity shares of Rs.10 each oferstwhile ICICI Ltd. in the ratio of 1:2)

Gujarat Rural Housing Finance Corporation Limited 2,50,000 10 47.50 47.50

Industrial Development Bank of India 5,49,440 10 446.42 446.42

HDFC Bank Limited 500 10 0.05 0.05

Bank of Baroda 1,25,000 10 106.25 106.25

Gujarat State Financial Corporation 9,35,600 10 187.12 187.12

787.48 787.48

(ii) Unquoted :

a) Units of Unit Trust of India (Unit ’64) 44,14,732 10 617.83 617.83(Earmarked for repayment of Fixed Deposits)

Less : Provision for Diminution in value of investment -175.45 —

[Repurchase price of Rs. 245.46 lakhs(previous year Rs. 280.34 lakhs)]

Total c/f. 442.38 21565.57 617.83 13578.87


(Contd.)

85


Total b/f. 442.38 21565.57 617.83 13578.87

b) Fully paid Equity Shares of -

Gujarat Data Electronics Limited 1,15,000 10 11.50 11.50

Less : Provision for Diminution in value of investment -11.50 -11.50

0.00 0.00

Gujarat Venture Finance Limited 60,000 10 6.00 6.00

Biotech Consortium India Limited 50,000 10 5.00 5.00

Gujarat State Petroleum Corp. Limited 2,50,000 10 25.00 25.00

Gujarat State Fuel Management Co. Ltd. 1,00,000 10 10.00 10.00

c) Fully paid Shares of -

Co-operative Bank of Baroda Limited — 0.25(1,000 shares each of Rs. 25 surrendered during the year)

d) Contribution to :

Gujarat Venture Capital Fund-1990 18.00 21.00(Rs. 3.00 lakhs redeemed during the year)

Gujarat Venture Capital Fund-1995 57.60 60.30(Rs. 2.70 lakhs redeemed during the year)

563.98 745.38

Total 22129.55 14324.25

Aggregate Value of Unquoted Investments 2131.77 2346.25

Aggregate Value of Quoted Investments 19997.78 11978.00

Market Value of Quoted Investments 12971.53 13918.99

SCHEDULE - 7 INVENTORIES

Stores and Spare-parts (Including Loose Tools 16178.27 16730.61Rs. 10.02 lakhs - previous year Rs. 8.94 lakhs)

Raw Materials 4598.83 10858.13

Finished Goods :



17492.04 17931.51


Stock out of trial run production (at estimated realisable value) — 192.60

20436.16 20892.07

Total 41213.26 48480.81

* Includes Loose (unpacked) products Rs. 1987.22 lakhs(previous year Rs. 1881.89 lakhs)

Notes :

(1) Inventories as taken, valued and certified by the Management.

(2) For mode of valuation refer Schedule-21 - Significant Accounting Policies.

SCHEDULE - 6 INVESTMENTS (Contd.)(Rs. in lakhs)


Rs.

86



(Rs. in lakhs)


Over Six Months

Secured - Good 89.37 45.47

Unsecured - Good 8414.83 11333.78

- Doubtful 2676.05 2720.90

11180.25 14100.15

Less : Provision 2676.05 2720.90

8504.20 11379.25

Others (Considered Good)

Secured 550.94 608.98

Unsecured 21871.72 43109.16

22422.66 43718.14

Total 30926.86 55097.39

SCHEDULE - 9 CASH AND BANK BALANCES

Cash, Cheques & Stamps on hand* 127.92 212.90

Remittances in transit 113.85 251.88

With Scheduled Banks :

In Current Accounts (including Rs. 61.16 lakhs 832.52 249.50of unpaid dividend accounts andRs. 0.27 lakh in Saving Accounts)(previous year Rs. 69.88 lakhs andRs. 0.21 lakh respectively)

In Collection Accounts 2569.38 7946.91

In Short Term Deposit Accounts 561.75 11.57

3963.65 8207.98

With Non-Scheduled Banks :

In Current Accounts/Fixed Depositwith Co-operative Banks 0.01 0.01(for details refer Note 22 of Schedule-22)

In Post Office Savings Bank Account (Rs.100) — —(Maximum balance during the yearRs. 100, previous year Rs. 100)

Total 4205.43 8672.77

* Includes balances in Savings Bank Accountsopened in names of the authorised representativesof the Company in respect of Imprest Accounts.


87


SCHEDULE - 10 LOANS AND ADVANCES

(Rs. in lakhs)


Secured (Considered Good)

Loans to employees for construction/purchaseof houses and vehicles(including interest accrued)* 7396.01 7835.25(Refer Note 9 of Schedule-22)

Unsecured (Considered Good)

Advances to other Companies 108.76 150.05(Refer Note 8 of Schedule-22)

Advances recoverable in cash or in kind orfor value to be received (including interest 13636.30 13527.45accrued)*

Deposits with Excise, Customs and otherGovernment Departments 204.34 189.07

Deposits with Limited Companies / FinancialInstitutions (including interest accrued) 102.13 112.27

Advance payment of Tax (net of provision) 2140.64 1087.02

Unsecured (Considered Doubtful)

Advances to other Companies 75.00 75.00

Advances recoverable in cash or in kind orfor value to be received 1.07 1.07

16268.24 15141.93

Less : Provision for Doubtful Advances 76.07 76.07

16192.17 15065.86

Total 23588.18 22901.11

* Includes NIL (previous year Rs. 0.51 lakhs) due from officers of the Company - maximum balance Rs. 0.52 lakhs (previous year Rs. 1.81 lakhs).

SCHEDULE - 11 CURRENT LIABILITIES1. Sundry Creditors (Refer Note 10 of Schedule-22) 62943.17 68925.22

2. Advances from Customers 830.14 865.61

3. (a) Unpaid Dividends* 61.16 69.88

(b) Unpaid application money* 0.14 **

(c) Unpaid matured deposit* 74.39 **

(d) Unpaid matured debentures* 35.98 **

(e) Interest accrued on 3(a) to 3(d) above* — —

171.67 69.88

4. Other Liabilities 5866.49 7606.20

5. Interest accrued but not due on loans 2483.22 3346.10

Total 72294.69 80813.01

* These figures do not include any amounts, due and outstanding to be credited to Investor Education and Protection Fund.

** Figures for previous year have not been disclosed as the disclosure requirement came into force this year.

SCHEDULE - 12 PROVISIONS

Retirement Benefits 5609.44 5121.31

Total 5609.44 5121.31

88


Schedules Forming Part of Profit and Loss AccountSCHEDULE - 13 SALES

Quantity 2002-03 Quantity 2001-02MTs Rs. Lakhs MTs Rs. Lakhs

Manufacturing Operations :

(A) Fertilizernagar & Sikka Unit :

Fertilizernagar Unit

Urea 269261 24990.57 304714 33157.68

Ammonium Sulphate 213525 10956.94 224667 10865.69

Di-ammonium Phosphate 40078 4649.81 130922 16002.79

Ammonium Phosphate Sulphate 89248 6993.80 20762 1843.05

Total Fertilizernagar unit 612112 47591.12 681065 61869.21

Sikka Unit

Di-ammonium Phosphate 601590 69796.31 552025 67125.77

Ammonium Phosphate Sulphate 7857 576.06 97766 8728.65

Total Sikka unit 609447 70372.37 649791 75854.42

Total Fertilizers 1221559 117963.49 1330856 137723.63

Caprolactam 46991 28593.69 47707 23313.08

Cyclohexanone 8577 3662.87 11686 4791.71

Nylon-6 6307 5784.01 5777 5576.93

Melamine 10619 6132.27 10062 5404.32

MEK Oxime 1488 1309.74 1270 1130.16

Argon Gas (NM3) 2759443 633.34 2816690 461.67

Ammonia 29359 2675.05 39915 4061.71

Nitric Acid 7579 322.74 7552 298.84

Sulphuric Acid 61712 932.47 54872 657.50

Other Items 1858.12 663.49

169867.79 184083.04

(B) Polymers Unit’s Products :

Methyl Methacrylate Monomer 1309 1039.95 828 648.58

Polymethyl Methacrylate Sheets 600 621.90 555 578.57

Polymethyl Methacrylate Pellets 2149 2253.87 2361 2238.35

Ammonium Sulphate 7329 194.22 12173 289.88

Methacrylic Acid 503 472.24 495 483.50

Acetone Cyano Hydrine 360 302.49 267 224.90

Others 79.70 82.91

4964.37 4546.69

(C) Fibre Unit’s Products :

Nylon Filament Yarn 5251 6168.18 3964 4419.64

Nylon Chips 2351 2266.17 2048 1879.55

8434.35 6299.19

Trading Activities : (Refer Annexure-I (B)) 385.89 514.19

Sales (Net of Excise Duty) 183652.40 195443.11

Excise Duty Recovered 9870.79 8080.22

Total 193523.19 203523.33

89

Schedules Forming Part of Profit and Loss AccountSchedules Forming Part of Profit and Loss AccountSchedules Forming Part of Profit and Loss AccountSchedules Forming Part of Profit and Loss AccountSchedules Forming Part of Profit and Loss Account

SCHEDULE - 14 OTHER INCOME(Rs. in lakhs)

2002-03 2001-02

Rent 16.34 15.06Income from Long Term Investments (Gross) :Dividend : Trade 776.98 838.54 Others 26.59 81.06(Tax deducted at source Rs. 84.18 lakhs) (previous year - nil)

803.57 919.60Interest : Trade 130.94 215.98(Tax deducted at source Rs. 27.50 lakhs) (previous year Rs. 44.82 lakhs)

130.94 215.98934.51 1135.58

Interest on Advances, Deposits and others (gross) 1659.73 826.01(Tax deducted at source Rs. 51.23 lakhs)(previous year Rs. 43.38 lakhs)Recoveries for services rendered 60.44 46.30Insurance claims 166.39 234.34Captive Consumption in Projects under Execution 59.68 9.62

Profit on sale of investments 2.04 —Profit on sale of fixed assets 0.32 449.54Variation in Exchange Rates 863.38 —Excess provision no longer required 490.92 1071.28

Miscellaneous 795.55 793.61

Total 5049.30 4581.34

SCHEDULE - 15 MATERIALS, MANUFACTURING AND OPERATING EXPENSESRaw Materials Consumed :

Opening Stock 10858.13 8562.56

Add : Purchases 88174.83 104417.90

99032.96 112980.46

Less : Closing Stock 4589.63 10858.13

94443.33 102122.33

Electricity and Fuel 25525.12 25658.67

Water 946.77 850.21

Stores and Spares Consumed 2898.76 3537.24

Packing Expenses 2780.59 3214.80

Insurance 1272.16 1155.24

Repairs and Maintenance :

Buildings 53.43 47.07

Plant & Machinery 2401.64 2155.40

Others 212.67 236.87

2667.74 2439.34

Excise Duty (Net) (387.31) (45.58)

Total 130147.16 138932.25

SCHEDULE - 16 PERSONNEL EXPENSES*Salaries, Wages and Bonus 10736.55 11163.04

Contribution to Provident, Gratuity and Superannuation 3270.72 2695.52(Pension) Funds [(Including provision for Gratuity,Superannuation (Pension)]

Welfare Expenses 3509.89 1816.45Total 17517.16 15675.01

* Refer Note 18 of Schedule-22

90



Administration ExpensesInsurance-General 318.27 297.77Rates and Taxes 83.44 126.30Printing, Stationery, Postage, Telephones, Telex etc. 153.56 168.79Brokerage on Deposits 67.91 35.26Letter of Credit/Guarantee Commission, Bank Charges 357.63 429.15Variation in Exchange Rates — 1243.67Travelling and Conveyance (Including tour expenses of 86.05 86.47Directors Rs. 10.86 lakhs) (Previous year Rs. 8.25 lakhs)Vehicle running & maintenance (net) including hire charges 178.57 169.08Directors’ Fees 1.64 1.67Auditors’ Remuneration (Refer Note 19 of Schedule-22) 7.22 6.19Cost Auditors’ Fees 0.53 0.53Rent 77.38 26.39Subscriptions, Membership Fees, etc. 32.04 34.46Legal, Professional and Consultancy charges 69.31 55.80Research and Development expenses 4.98 2.61Loss on fixed assets sold / discarded 647.68 140.15Provision for diminution in value of investments 175.45 —Obsolete spares and other items written off 42.61 805.03Provision for Doubtful Debts/Advances 22.87 1.83Lease Rent on Assets taken on lease 811.75 2093.02Take or pay rental charges to GCPTCL 718.38 621.88Expenditure on abandoned project written off 132.39 —Miscellaneous 1235.92 1255.48

5225.58 7601.53Marketing ExpensesSales promotion, Demonstration, Extension services and Publicity etc. 3248.30 2816.33Expenses on Depots-cum-Farm Information Centres, Warehouses,Area/Regional Offices etc. and Products’ Transportation, Loading &Unloading charges 7778.65 8352.16Commission to Selling Agents 342.47 404.13Cash Rebate on Sales 466.48 982.50Turn over tax 4.12 12.39

11840.02 12567.51Other ExpensesContribution to Government Authorities for release of water anddischarge of effluent and pollution control expenses 85.41 88.11Laboratory Expenses 33.50 34.64Fire Fighting and Safety Services 56.04 45.45Crop Compensation/Assistance 43.61 61.14Donations and Contributions 0.52 2.83

219.08 232.17Total 17284.68 20401.21

SCHEDULE - 18 (INCREASE)/DECREASE IN STOCK OF FINISHED PRODUCTS,TRADING GOODS AND STOCK-IN-PROCESS

Opening StockFinished Products 17807.48 19999.06Trading Goods 124.03 133.55Stock-in-Process 2767.96 2687.94Stock out of Trial Run Production 12457.68 —

33157.15 22820.55Less : Closing Stock

Finished Products 17442.31 17807.48Trading Goods 49.73 124.03Stock-in-Process* 2944.12 2767.96

20436.16 20699.47(Increase) / Decrease 12720.99 2121.08* Includes Loose (unpacked) products Rs. 1987.22 lakhs(previous year Rs. 1881.89 lakhs)

SCHEDULE - 17 ADMINISTRATION, MARKETING AND OTHER EXPENSES(Rs. in lakhs)

2002-03 2001-02

91


SCHEDULE - 19 PRIOR PERIOD ADJUSTMENTS (NET)(Rs. in lakhs)

2002-03 2001-02

(A) IncomeSales (49.42) (1.77)Other Income 1.04 (0.53)

Total (48.38) (2.30)(B) Expenditure

Raw Materials consumed (70.10) 5.39Electricity and Fuel 1486.25 (20.60)Water 96.82 —Stores and Spares consumed (33.27) (15.38)Packing expenses — 0.22Insurance (2.04) (0.71)Repairs and Maintenance (8.12) (4.73)Salaries, Wages, Bonus & Welfare Expenses (0.04) 0.16Administration, Marketing and Other Expenses (10.49) 3.09Excise Duty (0.17) —Purchase of Finished Products 16.14 4.52Interest (8.22) 3.32Depreciation (0.13) 17.67

Total 1466.63 (7.05)

Net (A-B) (1515.01) 4.75

SCHEDULE - 20 PRE-OPERATIVE EXPENSES (Rs. in lakhs)



Adjustments1. Raw Materials Consumed 179.67 10299.91 10479.58 —2. Electricity & Fuel 22.28 249.09 271.37 —3. Captive Products Consumed 9.62 59.69 69.31 —4. Stores and Spares Consumed — 2.13 2.13 —5. Packing Expenses — 171.98 171.98 —6. Repairs & Maintenance — 3.90 3.90 —7. Insurance 16.36 — 16.36 —8. Personnel Expenses 291.46 41.08 332.54 —9. Printing, Stationery, Postage, Telephones, Telex etc. 1.11 — 1.11 —10. Realignment of Foreign Currencies 0.53 (80.30) (79.77) —11. Letter of Credit/Guarantee Commission and Bank Charges 6.51 22.99 29.50 —12. Travelling and Conveyance 51.20 0.09 51.29 —13. Legal, Professional and Consultancy Charges 102.17 — 102.17 —14. Share / Debenture / Bond issue Expenses 103.08 14.55 117.63 —15. Miscellaneous Expenses 5.28 2.61 7.89 —16. Marketing Expenses — 688.91 688.91 —17. Interest and Commission :

On Debentures / Bonds and Fixed Loans 2382.96 1109.06 3492.02 —Others 84.44 45.15 129.59 —

18. Depreciation 1.88 0.12 2.00 —3258.55 12630.96 15889.51 —

19. Less : Stock of Trial Run Production 192.60 11380.73 11573.33 —20. Interest Received — 3.73 3.73 —

Total 3065.95 1246.50 4312.45 —

(31st March, 2002) (1354.76) (1711.19) — (3065.95)Adjustment includes Rs. 117.65 lakhs transferred to revenue expenditure / deferred revenue expenditure. Initial expenditure ofRs. 97.13 lakhs incurred on project not to be pursued further, is written off during the year.

92


Schedules Forming Part of AccountsSCHEDULE - 21 SIGNIFICANT ACCOUNTING POLICIES

1. Principles of Consolidation :

The consolidated financial statements relate to Gujarat StateFertilizers & Chemicals Limited (holding company) and GSFCInvestment & Leasing Company Limited (wholly owned subsidiarycompany). The consolidated financial statements have beenprepared on the following basis:

a) The financial statements of the Holding Company andits wholly owned subsidiary Company have been combinedon a line-by-line basis adding together the book valuesof like items of assets, liabilities, income and expenses,after fully eliminating intra-group balances and intra-

group transactions resulting in unrealised profit or losses.

b) The consolidated financial statements are prepared byadopting uniform accounting policies for like transactionsand other events in similar circumstances and are presentedto the extent possible, in the same manner as the HoldingCompany’s separate financial statements.

2. Other significant accounting policies

These are set out under “Significant Accounting Policies” asgiven in the unconsolidated Financial Statements of GujaratState Fertilizers & Chemicals Limited and its subsidiary.


1. Contingent Liabilities not provided for :

2002-03 2001-02Rs. lakhs Rs. lakhs

(a) Disputed Excise Duty and Customs Duty 2297 2563

(b) Disputed demand of Sales Tax andInterest on Turnover Tax & PurchaseTax against which the Companyhas preferred appeals 17 147

(c) Claims by Statutory Corporations andothers disputed and notacknowledged as debt 1477 1430

(d) Claim by ONGC for royalty on gas 81 81

(e) Claims by employees/ ex-employees Not Notpending before courts ascertainable ascertainable

2. Estimated amount of contracts remainingto be executed on capital accounts,net of advances 22 65

3. On expiry of pricing period of the earlier agreement, Oil &Natural Gas Commission (ONGC) demanded increased gas pricefrom April 1982 to 29th January, 1987. This price increase wasnot agreed to by the Company since as provided in the earlieragreement, gas price for the future period was to be determinedmutually whereas ONGC had increased the price unilaterallywithout the consent of the Company and not executed freshagreement inspite of various efforts of the Company. ONGC hasreferred this matter to the Ministry of Petroleum and NaturalGas and Ministry of Fertilizers. The decision of the Governmentin this regard is still awaited. ONGC has also submitted anapplication in Civil Misc. Application with Civil Judge (S.D.)Baroda for the recovery of principal amount of Rs. 118.10 croresfor the price difference and interest thereon. As per the legalopinion, the aforesaid application for recovery is not tenable inlaw in the said Civil Misc. Application and hence the Companyhas no obligation towards the same.

4. Pending fixation of Retention Price (RTP) of Ammonium Sulphate(AS) fertilizer produced from Caprolactam Expansion Plant, thesales and subsidy claims thereof upto 9-6-1994 (from 10-6-1994,the same has been decontrolled) have been accounted at RTPapplicable to AS produced from the old plants. Similarly, saleof AS from Polymers Unit upto 9-6-1994 has been accounted atthe provisional RTP fixed by the Government of India.

5. The RTP of AS for the Sixth Pricing period from 1-4-1991 is notyet announced. As per the norms fixed by FICC, Government ofIndia, the Company has made its own estimates of the increasein RTP of AS and accordingly accounted for.

6. Hitherto the Company was accounting the Retention Priceescalation claims on lodgement basis considering the input norms

adopted by FICC (Fertiliser Industry Co-ordination Committee).However, the input norms adopted by FICC for the 8th PricingPeriod is not available with the Company and hence the Companyby way of abundant caution and conservatively has changed theaccounting policy discontinuing the escalation / de-escalationclaim on lodgement basis. In view of this the impact of this onthe financial statement is not ascertainable.

7. (a) As one of the promoters of the Gujarat Industries PowerCompany Ltd.(GIPCL), the Company has given undertakingto Industrial Development Bank of India (IDBI), PowerFinance Corporation Ltd.(PFC) and Gujarat IndustrialInvestment Corporation Ltd. (GIIC) for non disposal of andnon creation of a charge against the Company’s investmentin the shares of the said company during the pendency ofloans given to GIPCL by IDBI, PFC and GIIC.

(b) As one of the promoters of the Gujarat Chemical PortTerminal Company Limited (GCPTCL), the Company has givenundertaking to ICICI Bank for not to transfer, assign, disposeoff, pledge, charge or create any lien or in any way encumbercompany’s existing or future shareholding in the GCPTCL infavour of any person so long as money remains due byGCPTCL to ICICI Bank or till the project is duly completed,whichever is later.

8. (a) In joint participation with other Industrial undertakings inGujarat, the Company has paid Rs. 30.21 lakhs to GujaratAcrylics Limited (GAL) and Rs. 38.55 lakhs to Gujarat AgriProcessing Company Limited by way of advance towardsequity contribution. These amounts have been shown underSchedule-10 “Loans & Advances”.

(b) Under Rehabilitation and Revival Scheme forM/S. Gujarat Tractors Corporation Ltd. (GTCL) finalised by theGovernment of Gujarat, the Company has given interest freeloan of Rs. 40 lakhs to M/S. Gujarat Agro Industries CorporationLtd. (GAIC) for GTCL.

9. The Company has given an undertaking to assign and transferto Housing Development Finance Corporation Ltd. (HDFC), CentralBank of India, Vijaya Bank, HDFC Bank and ICICI Bank, all itsrights, titles, interests and claims under the mortgages /hypothecation obtained from employees against loans given toemployees for construction / purchase of residential houses andvehicles out of loans of Rs. 3750 lakhs taken by the Companyfrom HDFC, Rs. 1000 lakhs from Central Bank of India andRs. 1000 lakhs from Vijaya Bank, Rs. 1375 lakhs from HDFC Bankand Rs. 1250 lakhs from ICICI Bank. Pending this, the mortgages/ hypothecation created in the Company’s favour are being heldby the Company in trust for HDFC, Central Bank of India, VijayaBank, HDFC Bank and ICICI Bank.

10. Sundry creditors in Schedule-11 includes (i) Rs. 215.76 lakhs dueto Small Scale Industrial Undertakings and (ii) Rs. 62727.41 lakhsdue to other creditors. The disclosure is based on the information

93

available with the Company regarding the status of suppliersunder the Industries (Development and Regulation) Act, 1961.Small Scale Industrial Undertakings to whom the Company owesfor more than 30 days, which were within the agreed terms, are:A N Instruments Pvt. Ltd.; Aep Company; Acoustics India Pvt. Ltd.;Aditya Forge Ltd.; Arpita Enterprise; Bharat Forge & PressIndustries Ltd.; Bhavani Forge Pvt. Ltd.; Chemtrol Valves Pvt. Ltd.;Chisel & Hammer; Dimple Polymers; Detection Instruments (I) PvtLtd; Eagle Plastic Industries; Eby Fasteners; Econo Valves Pvt. Ltd.;Electro Mech Industries; Excel Hydropneumatics P. Ltd.; EchjayForgings Ltd.; Elson Packing Industries Pvt. Ltd; Fabwel Engg.Corporation; Fainger Engg.; Flowchem Industrial P Ltd.; FerroTube & Forge Ind. ; Fainger Laser Valves Pvt. Ltd.; Fisher-XomoxSanmar Ltd.; Flexican Bellows & Hoses; Filteration Engrs. (I) Pvt.Ltd.; Fluid Controls Pvt. Ltd.; Goa Instrument Ind.; Gasket IndiaP Ltd; Gauges Bourdon (I) Pvt. Ltd.; Gujarat Infrapipes Pvt. Ltd;Hawa Industries Pvt. Ltd.; Hydropneumatics; Hyd-Air Engg. WorksLonavla; Instrument Engg. Pvt. Ltd.; Jasubhai Richard Simon Ltd;Jyoti Industries; Kirti Plastic Ind. Pvt. Ltd.; Kishor Pumps Pvt. Ltd.;Keld Ellentoft (I) Ltd.; Madras Industrial Products; Mayank GasketManufacturing; Multi Thread Fasteners; Myricks Piping SystemsPvt. Ltd.; Multi Tex Filtration Engg. P. Ltd.; Mkt Valves Pvt. Ltd.;Manoj Plastic Industries; Maldeep Catalyst Pvt. Ltd.; M H ValvesPvt. Ltd.; New Field Industrial Eqpt.; Nu-Tech bags & Containers;New Mercantile Impex Pvt. Ltd.; Odin India Pvt. Ltd.; Panelec Pvt.Ltd.; Plas-Pack Industries - Gujarat; Prestige Counting Instruments;Pressure & Flow Control; Pratolina Instruments Pvt. Ltd.; PropelValves Pvt. Ltd.; Protego Equipment Pvt. Ltd.; Powergrip (I)Fasteners Pvt Ltd.; Parekh Engg. Co.; Pushparaj Plastic & Packing;Samyak Udyog; Sarathi Engineering Ent. Pvt. Ltd.; ShreyasInstruments Pvt. Ltd.; Sam Industry Ltd.; S & G Engineers (P) Ltd.;Sanghvi Forging & Engg.; Samleshwari Packaging Pvt. Ltd.; TriveniEquipments Pvt. Ltd.; T S Pumps & Valves P Ltd.; Tejas PolypackPvt. Ltd.; Unitop Engineers Pvt. Ltd.; Vansh Steel Pvt. Ltd.; ZenithMachine Tools P Ltd.; Allza Flex Industries; AnticorrosiveEquipment; ARW Filters P. Ltd.; Asham Carbon Products Ltd.;Controquip P. Ltd.; Elson Packing P. Ltd.; Florocarbon ProcessingP. Ltd.; Inmarco Ind. Maint. P. Ltd.; Jyoti Ind.; Kulkarni Eng. Co.;KJB Titanium P. Ltd.; Mico Entrerprices; Meera Engineers; NavalThermoplast P. Ltd.; Nayan Ind. Equip. Co.; New Field Ind. Equip.P. Ltd.; Pap Flon Eng. Co.; Prestige HM Poly containers; SilexIndustries; Turnweld Engineers; Vadilal Gases & Chem.; VakoSeals; Span Industries; Super Pack.

11. (a) Income-Tax liabilities estimated at Rs. 1209 lakhs for theAssessment Years 1987-88, 1990-91, 1997-98 and 1999-2000are disputed in appeal by the Company. During the regularassessment of Assessment Year 2000-2001, the assessingofficer has raised a demand of Rs. 10351 lakhs, which isdisputed in appeal by the Company. No provision has beenmade in the accounts for the same, as the Company ishopeful of succeeding in the said appeal.

(b) Pending approval of the competent authority to theCompany’s application for exemption under section10(15)(iv)(c) of the Income Tax Act for the Income Tax oninterest paid on import payments, income tax liability ofRs. 22 lakhs has not been considered in accounts.

(c) (i) No provision for Income Tax is considered necessary,since the company, in view of unabsorbed depreciation,carried forward losses and other available deductionsdoes not expect any taxable income.

(ii) The Provision for Current Taxation for the year is forWealth Tax.

(d) Deferred Taxation :(Rs. in lakhs)

As on As on31-03-2003 31-03-2002

A] Deferred Tax Liabilty :1. Depreciation 46561.01 46561.01

46561.01 46561.01

B] Deferred Tax Assets :1. Unabsorbed Losses 3005.60 3005.602. Unabsorbed Depreciation 13434.87 13434.873. Expenses allowable for tax

purpose when paid 1890.20 1890.204. Provision for Doubtful

Debts and Advances 1027.89 1027.895. Diminution in value of investments 2.41 2.41

19360.97 19360.97Net Deferred Tax Liability/(Assets) 27200.04 27200.04

In the opinion of the management, no deferred tax assetis required to be created, although there is a loss in thecurrent year.

12. Extra Duty Deposit equivalent to 5% of CIF value levied onconsignments of Caprolactam/Melamine Expansion Project andcapitalised is subject to adjustment on final assessment by specialvaluation branch of Customs Department.

13. The Customs Authorities have provisionally levied 5% Extra DutyDeposit and further 5% Revenue Deposit of CIF value on theimported consignments of Ammonia Projects and the same iscapitalised. The final adjustment, if any, will be carried out onreceipt of final assessment order from the Customs Authorities.

14. A sum of Rs. 162.54 crores has been shown as exceptional item,which represents adjustments for the period from 1.7.1997 to31.3.2002 on account of review of the 7th and 8th pricing periodand coverage of Ammonia-IV plant under Retention Price Scheme.

15. The Company established Sikka Jetty at its own cost, which isin operation since 1987. After due discussion with GujaratMaritime Board (GMB), a consensus was arrived at establishingownership of jetty with GSFC. Thereafter, in terms of resolutionpassed by GMB, the ownership of the jetty at Sikka wastransferred to the Company. However, during 1994, GMB hasreversed its earlier decision not supported by resolution, andcontended that the ownership of the jetty rests with GMB. TheCompany has made representation to the appropriate authoritywith regard to the ownership of the jetty with the Company.Pending finalisation of the representation, no provision isconsidered necessary in respect of various claims against theCompany and the counter claims of the Company (both theamounts not determined) which is dependent upon theestablishment of the ownership of jetty. At present the Companyis in possession of the jetty and continues to be in ownershipof the jetty till the final decision of the appropriate authority.

16. The liability for natural gas supplied by Gas Authority of IndiaLimited (GAIL) from 1-4-2000, is accounted at provisional ratesbilled by GAIL, pending final fixation of natural gas price by theGovernment of India.Similarly, fuel cost adjustment charges levied by Gujarat IndustriesPower Company Limited, for the power supplied to the Companyfrom 1-4-2000 is also provisional and subject to adjustment onfixation of natural gas price by Government of India.

17. Consequent upon the order dated 31-12-2002 of theCommissioner of Labour in the matter of equal work equalwages in respect of the contract labour and since the Companyhas a good case on strong grounds, the Company has challengedthe order in the Hon'ble High Court of Gujarat. The Hon'bleHigh Court has granted ad-interim relief staying the operationof the order of the Commissioner of Labour. If the Commissionerof Labour's above order is implemented then the estimatedliability would be to the tune of Rs. 61 crores. However, sincethe Company is having strong grounds in the case and recourseavailable for approaching the Division Bench of High Court andthen after even to the Supreme Court, the Company has notprovided liability and neither considers it as contingent liabilityat this juncture in the matter of equal work equal wages.Other litigation of contract labourer's demand for permanency

(Rs. in lakhs)

As on As on31-03-2003 31-03-2002

94


in the service of the Company referred to the Industrial Tribunalfor adjudication is pending.

18. Details of Managerial Remuneration : (Rs. in lakhs)

Managing Whole-timeDirector Director

2002-03 2001-02 2002-03 2001-02Salary 4.31 3.37 - 0.01Other Perquisites* 0.70 1.08 - 0.14Pension Contribution 0.63 0.52 - -Leave Salary Contribution 0.30 0.25 - - TOTAL 5.94 5.22 - 0.15* Includes Monetary value of Perquisites 0.19 0.33 - -

19. The break-up of payment to Auditors is as under :

2002-03 2001-02 Rs. in lakhs

(a) Audit Fees including ServiceTax (including fees to Branch 2.07 2.07Auditors Rs.0.39 lakh)(previous year Rs.0.39 lakh)

(b) In other capacity in respect of :

1. Tax Audit fees 0.74 0.742. Other services 3.63 2.91

(for certification work etc.)(c) Reimbursement of expenses 0.78 0.47

(including Rs.0.11 lakh paidto Branch Auditors)(previous year Rs.0.04 lakh)

7.22 6.1920. Investment including trade investment have been valued at cost

as in the opinion of the Management, all the investments arelong term investments.

21. Details of deferred revenue expenditure under the head"Miscellaneous Expenditure" to the extent not written off oradjusted and those proportionately written off during theyear are as under :

Particulars Written off Balance asduring the year on 31-3-2003(previous year) (31-3-2002)

Rs. in lakhs Rs. in lakhs1. Security Issue 70.14 187.36

Expenses (46.61) (139.85)2. Superannuation (Pension) 100.59 201.17

of past period (100.59) (301.76)3. Realignment of 48.89 33.83

Finance charges (37.50) (80.64)4. Licence, Know-how fees 139.08 392.62

for production process (81.83) (245.50)22. Details of balances with non-scheduled banks :

(Refer Schedule-9 Cash & Bank balances)

Name of the Balance as Maximum balanceBank on 31-3-2003 during the year

(31-3-2002) (previous year)Rs. Rs.

The Panchmahal Dist. 500 277935Co-op. Bank Ltd. (500) (333590)Co-op. Bank of 500 500Baroda Ltd. (500) (500)

23. Based on the opinion of the Expert Advisory Committee of theInstitute of Chartered Accountants of India, the Company hasprovided a sum of Rs.1899 lakhs as liability for deferred LeaveTravel Concession for the first time of block period 2001 & 2002(for Polymers unit block period is 2002 & 2003) out of whichRs.1124 lakhs pertaining to period upto 31-03-2002.

24. Related Party Disclosures :Related Party disclosures as required by AS-18 "Related PartyDisclosures" are given below:

1. Relationship :(a) Associate Company :

1. Gujarat Agri Processing Co. Ltd.(b) Directors and their relatives :

1. Shri Ashok Narayan Chairman (wef 27-01-03)2. Shri G Subba Rao Director3. Dr. Manjula Subramaniam Director4. Shri S R Vengsarker Director5. Shri N R Krishnan Director6. Shri R S Agarwal Director (wef 14-11-02)7. Shri C K Koshy Director (wef 30-03-03)8. Dr. K D Jeswani Chairman (upto 22-01-03)9. Shri A D Desai Director (upto 01-11-02)10. Shri K Kameswara Rao Director (upto 14-11-02)11. Shri S G Mankad Director (upto 06-01-03)12. Shri Ashok P Bhavsar Director (upto 31-01-03)13. Shri Balwant Singh Managing Director

(c) Directors of Subsidiary company and their relatives :1. Shri Balwant Singh Chairman2. Shri A K Vijay Kumar Director3. Shri Gautam Sen Director4. Shri M D Buch Director5. Shri R N Shah Director

2. Details of transactions with related parties :(i) Details relating to parties referred to in 1(a) above :

(Rs. in lakhs)

Sr. Nature of Value for OutstandingNo. Transaction the year as on


31-03-02)

1. Advance towards — 38.55equity contribution (11.67) (38.55)

2. Investments in equity — 60.00shares (at cost) (60.00) (60.00)

(ii) Details relating to parties referred to in 1(b) above :

Sr. Nature of Transaction Rs. LakhsNo. (previous year)

1. Sitting fees 1.64(1.67)

2. Remuneration to 5.94Managing Director (5.22)

(iii) Details relating to parties referred to in 1(c) above :No transactions have been entered by subsidiary companywith the said parties.

25. Segment Information :(Rs. Lakhs)

For the year For the yearended on ended on31-03-03 31-03-02

i) PRIMARY SEGMENT INFORMATION :A] SEGMENT REVENUE:

1. TOTAL SEGMENT REVENUEa) Fertilizer Products 123711.95 143483.01b) Caprolactam and


TOTAL 183652.40 195443.112. INTER SEGMENT REVENUE — —3. EXTERNAL REVENUE (1 - 2)



TOTAL 183652.40 195443.11

95

B] RESULT :1. Segment result

a) Fertilizer Products -8360.17 4566.31b) Caprolactam and Nylon Products 4526.77 4755.77c) Other Segments 256.76 46.80

TOTAL -3576.64 9368.882. Unallocated expenses net

of unallocated income -1431.15 -597.643. Operating Profit (B1 + B2) -5007.79 8771.244. Interest expenses -17076.43 -17659.655. Provision for Taxation :

Current Taxation -2.24 -2.00Deferred Tax (net) – 2058.74

6. Profit before Exceptional Items -22086.46 -6831.677. Exceptional Items -16253.83 1881.998. Net Profit -38340.29 -4949.68OTHER INFORMATION :1. Segment assets

a) Fertilizer Products 202827.69 219997.85b) Caprolactam and Nylon Products 66414.74 71429.23c) Other Segments 11280.96 14027.28

TOTAL 280523.39 305454.362. Unallocated corporate assets 31379.07 44672.383. Total Assets 311902.46 350126.744. Segment Liabilities

a) Fertilizer Products 64471.60 67829.64b) Caprolactam and Nylon Products 6537.78 8194.35c) Other Segments 3176.92 3252.66

TOTAL 74186.30 79276.655. Unallocated corporate liabilities 177935.10 181148.406. Total Liabilities 252121.40 260425.057. Capital Expenditure

a) Fertilizer Products 21065.68 1000.25b) Caprolactam and Nylon Products 55.13 834.00c) Other Segments 21.96 187.15d) Corporate Capital Expenditure 42.70 255.07

TOTAL 21185.47 2276.478. Depreciation

a) Fertilizer Products 8824.32 8226.43b) Caprolactam and Nylon Products 4639.21 4675.38c) Other Segments 526.03 520.83d) Unallocated corporate

Depreciation 251.27 233.00TOTAL 14240.83 13655.64

9. Non-Cash expensesa) Fertilizer Products 252.87 212.56b) Caprolactam and Nylon Products 156.61 173.47c) Other Segments 117.16 116.82d) Unallocated non-cash expenses 916.71 0.00

TOTAL 1443.35 502.85

ii) SECONDARY SEGMENT INFORMATION :The Company operates mainly in Indian market and there are noreportable geographical segments.

iii) OTHER DISCLOSURES :1. The Products and Services covered under each business segment

is as under :Fertilizer Products : Urea, Ammonium Sulphate, Di-

ammonium Phosphate, AmmoniumPhosphate Sulphate.

Caprolactam and : Caprolactam, Nylon-6,Nylon Products Nylon Filament Yarn, Nylon Chips.Other Segments : Melamine, Polymer products,

Trading activity etc.2. Segment revenue, results, assets and liabilities include the

respective amounts identifiable to each of the segment andamounts allocated on reasonable basis.

26.26.26.26.26. The associate companies considered in the consolidated financialstatements are :

Name of the associate company Proportion ofOwnership interest

1. Gujarat Narmada Valley Fertilizers Co. Ltd. 21.01%2. Gujarat Agri Processing Co. Ltd. 44.44%

27.27.27.27.27. As required by Accounting Standard (AS-23) on Accounting forInvestments in Associates in Consolidated Financial Statementsissued by the Institute of Chartered Accountants of India, thecarrying amount of Investments in Associates is computed onEquity Method on the basis of audited balance sheet of31-03-2002.

28.28.28.28.28. The accounting policy of valuation of raw material by GujaratNarmada Valley Fertilizers Co. Ltd. is lower of cost or realisablevalue while at GSFC, it is valued at weighted / FIFO cost.However, it is not possible to quantify the effect of the saiddifference.

29.29.29.29.29. As this is the first year of adoption of Accounting Standard23 - Accounting for Investments in Associates in ConsolidatedFinancial Statements issued by the Institute of CharteredAccountants of India, figures for the previous year are thereforenot comparable to that extent.

30. Balance of certain creditors and debtors / advances are subjectto confirmation / reconciliation and consequential adjustments,if any.

31. Previous year's figures have been regrouped wherever necessary.

Signatures to Schedules 1 to 22 :Gautam Sen A. K. LukeExecutive Director (Finance) Managing DirectorV. D. NanavatyCompany Secretary N. R. Krishnan



Chartered AccountantsFertilizernagar Devendra Upadhyay27th June, 2003 Partner

(Rs. Lakhs)


(Rs. Lakhs)


96


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2003(Rs. in lakhs)

For the year For the yearended 31-3-2003 ended 31-3-2002

[A] Cash Flow From Operating Activities :Net Loss before tax & Exceptional item (22084.22) (8888.41)Exceptional item (16253.83) 1881.99Adjustment for :Depreciation 14247.05 13660.51Interest charged 17076.43 17659.65Miscellaneous Expenditure Written Off 358.70 266.73Loss on Fixed Assets Sold / Written Off 744.81 140.15Profit on Sale of Fixed Assets (0.32) (449.54)Income from Investments (934.51) (1135.58)Profit on sale of investments (2.04) —Provision for Doubtful Debts / Advances 58.13 1.83Provision for diminution in value of investments 175.45 —

31723.70 30143.75Operating Profit before Working Capital Changes (6614.35) 23137.33Adjustment for :Inventories 7267.55 862.15Trade and Other Receivables 23586.45 4528.23Current Liabilities and Provisions (7158.59) 3301.29Miscellaneous Expenditure (405.93) (48.92)(To the extent not written off or adjusted)

23289.48 8642.75Cash Generated from Operations 16675.13 31780.08Interest Paid (17939.31) (17163.16)Direct Taxes Paid (162.92) (88.20)

(18102.23) (17251.36)Net Cash From Operating Activities (1427.10) 14528.72

[B] Cash Flow From Investing Activities :Purchase of Fixed Assets (4332.67) (3490.01)Sale of Fixed Assets 84.66 832.31Purchase of Investments — (65.00)Sale of Investments 487.73 476.69Interest Received 198.67 145.95Dividend Received 803.57 919.60Net Cash used in Investing Activities (2758.04) (1180.46)

[C] Cash Flow From Financing Activities :Proceeds from issue of Share Capital — (4125.00)Proceeds from borrowings (273.48) (4678.93)Dividend Paid (8.72) (0.80)Net Cash Generated in Financing Activities (282.20) (8804.73)

NET INCREASE/(DECREASE) IN CASHAND CASH EQUIVALENTS [A+B+C] (4467.34) 4543.53CASH AND CASH EQUIVALENTS ATTHE BEGINNING OF THE YEAR 8672.77 4129.24CASH AND CASH EQUIVALENTS ATTHE END OF THE YEAR 4205.43 8672.77

Gautam Sen A. K. LukeExecutive Director (Finance) Managing DirectorV. D. NanavatyCompany Secretary N. R. Krishnan



Chartered Accountants


Documents

41st Annual Report 2002-03 GUJARAT STATE …gsfclimited.com/pdf/faq/AR 2002-03.pdf · GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED ... following seven Stock Exchanges : 1. Vadodara