Equity Analysis

To

The Members,

Your Directors present herewith the 62^nd Annual Report on the business and operations together with financial statement of the Company for the Financial Year ended 31^st March, 2024.

1. Financial highlights of the Company:

( in Crores)

2. Dividend:

The Board of Directors, at the meeting held on 21^st May, 2024 has recommend a dividend of 4 per Equity Share of 2- each (@ 200%) on 39,84,77,530 shares (Previous Year - 500%, i.e. 10 per share on 39,84,77,530 Equity Shares of 2 each) for the financial year ended 31^st March, 2024, for consideration at the 62^nd Annual General Meeting ("AGM") of the Company.

The net outgo on account of Dividend, if approved by shareholders, shall be 159.39 Crores. The dividend pay-out is in accordance with the Company's Dividend Distribution Policy.

This policy has been framed and adopted in terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). The policy, inter alia, lays down various parameters relating to declaration / recommendation of dividend. There has been no change to the policy during the financial year 2023-24. The policy is placed on the Company's website at https://www.gsfclimited.com/sebi-listing-regulations.

3. Transfer to reserves:

The Company has transferred Rs. 200 crore to general reserves.

4. Brief description of the Company's working during the year/ State of Company's affairs:

Your directors wish to report that your Company has achieved turnover of Rs. 8,932 Crores for the year ended 31^st March 2024 as against 11,298 Crores (FY 22-23) on Standalone basis, which is lower by 2,366 Crores. Similarly, for the year under review, Profit Before Tax (PBT) was Rs. 664 Crores and Net Profit was 524 Crores as against PBT of 1,568 Crores and Net Profit of 1,293 Crores for the previous Financial Year.

5. Material changes and commitments:

The Company has not made any material changes or commitments which affect the financial position of the Company during the financial year of the Company to which the financial statements relate and as on the date of signing of this report.

6. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future:

There are no such orders except those which have been appropriately challenged before the judiciary. The Company believes that as of now none of these sub-judies matters impact on going concern status and Company's operation in future

7. Details in respect of adequacy of internal financial controls with reference to the Financial Statements:

Your Company has an internal Control System which is commensurate with the size, scale and complexity of its operations. Review and monitoring of the scope and authority of the Internal Audit function lies with the Finance-cum-Audit Committee of Directors. The Finance-cum-Audit Committee monitors and evaluates the efficacy and adequacy of internal control systems, accounting procedures and policies. Based on the report of Internal Auditors, significant audit observations and actions taken on such observations are presented to the Finance-cum-Audit Committee of the Board.

8. Share Capital:

The paid-up equity share capital of the Company as on 31^st March, 2024, was 79,69,55,060. During the year under review, there has been no change in authorized, issued, subscribed and paid up share capital, including any reclassification or sub-division thereto. The Company has not issued shares with differential voting rights, sweat equity shares, neither has it granted any employee stock options nor has issued any convertible securities. Please refer the notes to financial statements for details of Share Capital.

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

As at 31^st March, 2024, Companies listed below are the Subsidiary Company or Associate Companies:

The Company does not have any material subsidiary in terms of Companies Act, 2013 read with SEBI (Listing Obligation & Disclosure Requirement) Regulations.

*GSFC Agrotech Limited was incorporated on 02/04/2012 as a wholly owned subsidiary company of Gujarat State Fertilizers & Chemicals Limited.

**Gujarat Port and Logistics Company Limited was incorporated on 03/02/2020 as a Joint Venture Company by Gujarat State Fertilizers & Chemicals Limited and Gujarat Maritime Board with investment in the ratio of 60:40 respectively.

***Vadodara Jal Sanchay Private Limited was incorporated on 22/07/2020 as a joint venture company by Gujarat State Fertilizers & Chemicals Limited, Gujarat Alkalies and Chemicals Limited, Gujarat Industries Power Company Limited and Vadodara Municipal Corporation with investment in the ratio of 60:15:15:10 respectively.

BOARD'S REPORT (Contd..)

A report on the performance and financial position of each of the subsidiaries and associates and joint venture companies as per the Companies Act, 2013 is provided at Annexure - A to the Consolidated Financial Statement and hence not reproduced here for the sake of brevity.

The Equity Shares of your Company are listed on the BSE Limited (BSE) and National Stock Exchange of India Ltd. (NSE). The listing fee for the FY 24-25 has been paid timely to both the BSE and NSE.

Your Directors wish to state that the Equity Shares of your Company are compulsorily traded in dematerialized form w.e.f. 26/06/2000. Presently, 98.49% of shares are held in electronic/ dematerialized form.

Your Company has complied with all the mandatory requirements of Corporate Governance norms as mandated by Listing Regulations.

A separate report on Corporate Governance together with the Certificate of M/s. Samdani Kabra & Associates, Company Secretaries, Vadodara forms part of this Annual Report.

The Management Discussion & Analysis report also forms part of this Annual Report.

In terms of Regulation 34(2) of the Listing Regulations Business Responsibility and Sustainability Report for the financial year 2023-24 is placed on the Company's website at https://www.gsfclimited.com/Content/writereaddata/Portal/Document/104_1_1_GSFC-_BRSR_FY_23-24_FINAL.PDF

During the year 2023-24, your Company has not accepted/ renewed any Fixed Deposit.

During the year, the Company has not transferred any amount being unclaimed deposits and interest thereon to the Investors' Education and Protection Fund (IEPF) as required in terms of Section 125 of the Companies Act, 2013.

The Company has discontinued accepting new deposits since 15/11/2005, and renewing the deposits since 31/03/2009.

The Company has not availed any loan from its Directors or their relatives.

All the properties and insurable interests of the Company, including the buildings, plant & machinery and stocks have been adequately insured. Also, as required under the Public Liability Insurance Act, 1991, your Company has taken the appropriate insurance cover.

In terms of Regulation 25(10) of the Listing Regulations, the Company has in place a Directors & Officers insurance Policy for such quantum and risk coverage, as determined by the Board of Directors.

Your Directors are happy to share the status of various projects that are under execution/ executed as below:

To capture growing market of Ammonium Sulphate, your Company has successfully commissioned 400 MTPD Ammonium Sulphate Plant at Vadodara Unit in January, 2024. Based on experience of Ammonium Sulphate production over the years, your Company has executed the Project without involving technology supplier and by utilising In-house expertise & available resources.

To enhance green energy portfolio, your Company has successfully commissioned 140 KW (AC) roof top solar power plant at Vadodara Unit and 640 KW (AC) floating roof & roof top solar power plant at Sikka unit in January, 2024.

To enhance green energy portfolio, your Company is setting up 1 MW (AC) Floating solar power plant on EPC basis at Fiber Unit. M/s Hi Tech Transpower Pvt. Ltd is EPC Contractor. The Project is under execution stage and expected Commissioning date is September, 2024.

To facilitate the operation of Rajkot International Airport, your Company is relocating 07 nos. of wind mills from Mahidad, Rajkot site by engaging M/s Suzlon as LSTK Contractor. Project is under execution stage and erection & pre-commissioning activities are completed at new locations. Expected date of commissioning of these wind mills progressively is September, 2024.

To make use of green energy, your company is setting up 15 MW (AC) ground mounted solar power plant on EPC basis at Charanka, Gujarat. M/s Kosol Energies Private Limited is EPC Contractor. The Project is under execution stage and expected Commissioning date is November, 2024.

Considering present demand-supply gap and as an import substitute, your company is expanding production capacity of HX crystal plant at Vadodara unit for further value addition. Your company is executing the Project based on In-house technology & expertise and by utilising available resources. The milestone of Mechanical completion of the project is achieved in August, 2024 and Project is under execution stage and expected to be commissioned by September, 2024.

Based on Sulphuric Acid & Steam balance of the complex, your Company is setting up 600 MTPD Sulphuric Acid Plant on LSTK basis at Vadodara Unit. M/s ISGEC Heavy Engineering Limited is selected as LSTK Contractor with M/s DMCC technology. The Project is under execution stage and expected Commissioning date is February, 2025.

To reduce the energy consumption of existing Urea Plants and improve the plant reliability considering vintage plant, your company is carrying out revamping of Urea-II Plant. M/s Casale SA, Switzerland is selected as Technology supplier while M/s Larson & Toubro Limited is selected as EPC contractor. The Project is under execution stage and expected Commissioning date is March, 2025.

To improve the plant reliability considering vintage plant, your company is carrying out Refurbishment of Ammonium Sulphate-I (AS-I) & Ammonium Sulphate-II (AS-II) Plants. The refurbishment activities are carried out inhouse and in running plant / availing shutdown opportunities. The expected Project completion date is March, 2025.

As a part of backward integration, your Company is considering to install 600 MTPD Phosphoric Acid Plant and 1800 MTPD Sulphuric Acid Plant at Sikka Unit. M/s TECI, Tunisia is selected as Technology supplier for Phosphoric Acid Plant and Basic Engineering Package is received from M/s TECI. M/s Chemetics, Canada is selected as Technology supplier for Sulphuric Acid Plant and Basic Engineering Package is received in May, 2024 from M/s Chemetics. M/s PDIL is engaged as Project Management Consultant. Activities for engagement of EPC contractor is in progress.

In order to reduce its energy cost, your company is Participating in GIPCL's 75 MW Solar Power Project in Group captive mode with GACL by way of equity infusion. Project is under execution stage and expected to be commissioned in May, 2025.

Company has prepared a business plan for development of Dahej Complex by engaging consultant. Detail Project report for the identified products in business plan is under progress by a consultant. The report is expected by September, 2024.

As a part of green initiative of Government of India, your company is evaluating setting up of a Green Hydrogen Project at Vadodara Unit on LSTK basis.

Information as required under Section 134 (3) (m) of Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is enclosed in Annexure "C" forming part of this report.

The details relating to Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have been disclosed in Corporate Governance Report.

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. As a part of its initiatives under "Corporate Social Responsibility", the Company has undertaken projects in the areas of education, livelihood, health, water and sanitation. The Annual Report on CSR activities is enclosed as Annexure A. CSR Policy adopted by the Company is placed on the Company's website at https://www.gsfclimited.com/social_commitment.asp?mnuid=1&fid=15

The Company has constituted a Risk Management Committee ("RMC") of the Board to review the Risk review report and Risk Management Framework of the Company. The RMC reviews the management of key risks, as identified by the Company, its financial impact and measures taken to mitigate the same.

Details pertaining to RMC are given in the Corporate Governance Report of the Company. There are no risks identified by the Board which may threaten the existence of the Company.

The composition of the Board of Directors of the Company, as on the date of this Report is as follows:

Declaration by Independent Directors:

In terms of Section 149(7) of the Act and Regulation 16(1)(b) of the Listing Regulations, the Independent Directors of the Company viz.: Shri Tapan Ray, IAS (Retd.); Smt. Gauri Kumar, IAS (Retd.); Prof. Ravindra Dholakia, and Dr. Sudhir Kumar Jain have submitted their declarations confirming compliance with the criteria of independence as stipulated thereunder.

All Independent Directors of the Company have affirmed compliance with the Company's Code of Conduct for Directors and Senior Management Personnel for the financial year 2023-24. The Board has taken on record declarations and confirmations submitted by the Independent Directors regarding their fulfilment of the prescribed criteria of independence, after assessing veracity of the same as required under Regulation 25 of the Listing Regulations.

In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by Indian Institute of Corporate Affairs. All Independent Directors of the Company are exempt from the requirement to undertake online proficiency self-assessment test.

A Certificate has been obtained from the Company Secretary in practice, confirming that none of the directors on the Board of Directors of the Company have been debarred or disqualified from being appointed or continuing as director of Companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs or any such other statutory authorities. The Certificate of CS Niraj Trivedi, Practicing Company Secretary (C P No. 3123) forms part of this report.

Opinion of the Board with regard to integrity, expertise and experience (including proficiency) of the Independent Directors: The Board is of the opinion that the Independent Directors of the Company are professionally qualified and well experienced in their respective domains and meet the criteria regarding integrity, expertise, experience and proficiency. Their qualifications, specialized domain knowledge, strategic thinking & decision making and vast experience in varied fields has immensely contributed in strengthening the Company's processes to align the same with good industry practices.

Smt. Nidhi Pillai was appointed as Company Secretary & Compliance Officer as well as Key Managerial Personnel of the Company with effect from 07/08/2023.

Shri V.D. Nanavaty, erstwhile ED(Finance) & Chief Financial Officer of the Company superannuated on 31/05/ 2024. Shri S.K. Bajpai, Senior Vice President (Finance & Legal) has been appointed as Chief Financial Officer and Key Managerial Personnel of the Company with effect from 01/06/2024.

During the year under review and till the date of this report, officials of the Company designated as Senior Management Personnel are mentioned below: i. Shri S.V. Varma, ED(AB, HRS & IR); ii. Shri D.V. Pathakjee, Sr. VP (IT & ITES, S&FS & PU); iii. Shri R.S. Erande, Sr. VP (Marketing - IP); iv. Shri K S Badlani, Sr. Vice President (I&MB, U&EC, PLM & FU); v. Shri A V Bhave, Sr. Vice President (OP-2); vi. Shri P R Shah, Sr. VP (PDC); and vii. Shri S B Patel, Sr. Vice President (OP-I & SU) & Factory Manager Shri H N Gurjar, ED (Projects) ceased to be the SMP of the Company, after his superannuation with effect from 31^st January, 2024.

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation & Disclosure Requirement) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of its committees. The manner in which the evaluation has been carried out is explained in the Corporate Governance Report which forms the part of this Annual Report.

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, senior management and their remuneration. In terms of Section 178 of the Act, the Nomination and Remuneration Policy covers Directors, Key Managerial Personnel and Senior Management Personnel of the Company. The policy, inter alia, lays down the principles relating to appointment, cessation, remuneration and evaluation of Directors, Key Managerial Personnel and Senior Management Personnel of the Company. The details of Remuneration Policy and its web link are given in the Corporate Governance Report.

The NR Policy was revised by the Board at its meeting held on 7^th November, 2023, based on the recommendations of the Nomination & Remuneration Committee. The NR Policy was reviewed in light of amendments to the Listing Regulations from time to time and the practices being followed in the Company. Key revisions made to the NR Policy are: Aligning the role of the Committee with that stipulated in the Listing Regulations; Revision to the definition of Senior Management Personnel; Including reference to the policy of the Board for performance evaluation of the directors, Board, as a whole, and the Committees.

Revision in the criteria for nominating directors on the Board and persons as Key Managerial Personnel ("KMP") / SMP; Introducing a clause pertaining to cessation of directors, KMPs and SMPs; and Introducing a time frame of three years for periodic review of the NR Policy.

The Risk Management Policy was last revised by the Board, at its meeting held on 5^th August, 2024 based on the recommendations of the Risk Management Committee. The existing Risk Management Policy ("RM Policy") was reviewed in light of amendments to the Listing Regulations from time to time and the practices being followed in the Company. Amendments to the Policy were made such as: Aligning the policy with the actual practice wrt to identification, assessment and evaluation of risks, and implementation of mitigation measures.

The classification of risks specifically contains cyber risks as mentioned in Regulation 21(4) of the Listing Regulations.

Included the objective and purpose of the Risk Management framework which is in line with Schedule

II to the Listing Regulations especially w.r.t. Business Continuity Plan.

The existing mechanism of reporting process of risk review report is explained.

Roles and responsibilities of Risk Management Committee have been aligned with the Listing Regulations.

The classification of risks has been appended to the policy document to provide more clarity on the nature of risks covered.

During the year under review, five Meetings of the Board of Directors and five meetings of the Finance-cum-Audit Committee were held. The composition of Board and Committees along with details of attendance is mentioned in Corporate Governance Report.

Pursuant to the provisions of Section 177(9) of the Act read with Regulation 22(1) of the Listing Regulations, the Company is required to establish an effective vigil mechanism for directors and employees to report genuine concerns. The Company has a Vigil Mechanism / Whistle Blower Policy in place to deal with instances, if any, of the fraud, mismanagement, misappropriations, if any and the same is placed on the Company's website. The details of the policy as well as its web link are mentioned in the Corporate Governance Report.

During the year under review, the Statutory Auditors of the Company have not reported any instance of fraud to the Board of Directors under Section 143 (12) of the Companies Act, 2013, including rules made thereunder.

During the year your Company has complied with provisions relating to the constitution of Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (as amended from time to time). Necessary disclosures with respect to above-mentioned Act are given in the Corporate Governance Report of the Company.

During the year under review, your Company has complied with the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India and approved by the Central Government.

Particulars of loans given, investments made, guarantee given and securities provided (if any) along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statements.

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel and other Designated Persons which may have a potential conflict with the interest of the Company at large.

All Related party transactions were placed before the Finance-cum-Audit Committee and also the Board of Directors for approval. Prior omnibus approval of the Finance-cum-Audit Committee is obtained and a statement giving details of transactions, is placed before the Finance-cum-Audit Committee meeting, as mandated. The Company has developed a mechanism for identification of related party transactions and the Company is also having the system of monitoring of such transactions.

Policy on Materiality of Related Party Transactions and on Dealing with Related Party Transactions of the Company as approved and revised by the board from time to time in line with the amended provisions of the Act and Listing Regulations has been uploaded on the Company's website.

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto have been disclosed in this annual report.

Details as required pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Corporate Governance Report.

The Board of Directors has constituted a Risk Management Committee. Your Company has implemented a mechanism for risk management and formulated a Risk Management Policy. The details of such Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report.

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, your Directors confirm that: a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. The Directors had prepared the annual accounts on a going concern basis; e. The Directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

M/s Parikh Mehta & Associates, Chartered Accountants, Vadodara (Firm Registration Number 112832W) were appointed as statutory auditors of the Company, in the 60^th Annual General Meeting ("AGM") held on 27^th September, 2022, for a term of three consecutive years, to hold office from the conclusion of 60^th AGM until the conclusion of the 62^nd AGM of the Company. Pursuant to the provisions of Section 139 of the Companies Act, 2013 ("Act") read with the Companies (Audit and Auditors) Rules, 2014, and other applicable provisions, the Company can appoint or reappoint an audit firm as statutory auditors for not more than 2 (two) terms of up to 5 (five) consecutive years each. The first term of the present Statutory Auditors is expiring on the conclusion of ensuing AGM i.e. 62^nd AGM of the Company.

Based on the recommendation of the Finance-cum-Audit Committee, the Board of Directors at their meeting held on 21^st May, 2024, approved the reappointment of M/s Parikh Mehta & Associates as the Statutory Auditors of the Company to hold office for a second term of one year from the conclusion of 62^nd Annual General Meeting until the conclusion of the 63^rd Annual General Meeting of the Company to be held for the financial year 2024-25.

Accordingly, an item is proposed in the Notice of 62^nd AGM for appointment of M/s Parikh Mehta & Associates as the Statutory Auditors of the Company to hold office for a second term of one year from the conclusion of 62^nd Annual General Meeting until the conclusion of the 63^rd Annual General Meeting of the Company to be held for the financial year 2024-25. The Boards recommends their appointment to the Members.

In terms of the Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost accounting records and get them audited every year. The Board of Directors of your Company, on the recommendations made by the Finance-cum--Audit Committee, has approved appointment of M/s Dhananjay V Joshi & Associates (Firm Registration No. 000030), Cost Accountant, Pune as the Cost Auditors of your Company to conduct the audit of cost records for the Financial Year 2024-25. The remuneration proposed to be paid to the Cost Auditor is placed for your ratification at the ensuing 62^nd Annual General Meeting. The Cost Audit report for the F.Y. 2023-24 was filed within stipulated time. The Board recommends ratification of remuneration of 4,40,000/- per annum plus applicable taxes and certification fee, as mentioned in the Notice of 62^nd Annual General Meeting.

Your Company has appointed M/s K C Mehta & Co. LLP, Chartered Accountants, Vadodara, (Firm Registration No. 106237W/W100829) as Internal Auditors of Baroda & Sikka Unit for Financial Year i.e. 2024-25.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed CS Niraj Trivedi, Practicing Company Secretary, Vadodara, (CP No. 3123) to undertake the Secretarial Audit of the Company for the financial year 2023-24. The Report of the Secretarial Auditor is enclosed as Annexure B.

There are no comments/ observations, reservations or adverse remarks in the Auditors Report and Secretarial Audit Report and hence no clarifications need to be given on the clean report.

The Annual Return of 2023-24 in prescribed Form No. MGT-7, as required under Section 92(1) of the Companies Act, 2013 read with Rule 11 of the Companies (Management and Administration) Rules, 2014 will be filed and shall be placed on the Company's Website at https://www.gsfclimited.com/sebi-listing-regulations.

There has been no change in the nature of business during the year under review.

37. Other disclosures: a) Buyback of securities: The Company has not bought back any of its securities during the year under review. b) Sweat equity: The Company has not issued any Sweat Equity Shares during the year under review. c) Bonus shares: No Bonus Shares were issued during the year under review. d) Employees' stock option plan: The Company has not provided any Stock Option Scheme to the employees.

Your Directors are happy to acknowledge that employees of the Company have been key drivers in implementing ideas, polices, cultural and behavioral aspects of the organization and ultimately with their outstanding performance has helped the Company to realize its objectives. Your Directors are happy to place on record their appreciation for highly potential, consistent and ethical employees for their remarkable contribution to the Company. Industrial Relations have remained cordial during the period under report.

There are no such proceedings or appeals pending under Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year and at the end of the financial year.

No such instance of One-time settlement or valuation was done while taking or discharging loan from the Banks/Financial institutions occurred during the year.

Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from the Government of Gujarat, Government of India, Bank of Baroda and other Banks and agencies. Your Directors also wish to express their gratitude to the investors for their continued support and faith reposed in the Company.