To the Members,
 
 The Directors are happy to present the 68th Annual Report and Audited
 Accounts of the Company for the year ended 31st March 2012.
 
 Your Directors are pleased to report that your company has achieved
 highest ever turn over of Rs.2937 crore and earned a profit of Rs.19.80
 crore in the financial year 2011-12.
 
 Highlights
 
 All time High Sales Turnover
 
 All time Record Sales of Gypsum
 
 Profit of Rs.19.80 crores
 
 Increase in networth
 
 Reduction in interest and finance charges
 
 Improvement in working capital position
 
 Increase in sales of Urea and Organic Fertilizers
 
 Awards and Recognition from National Safety Council
 
 PERFORMANCE - FINANCIAL, PRODUCTION AND SALES
 
 A.  FINANCIAL / Rs. lakh
 
                                         2011-12           2010-11
 
 1   Revenue from operations            287604.83         246072.63
 
 2   Other Income                         3670.17           3059.91
 
 3   Total Revenue                      291275.00         249132.54
 
 4   Total Expenses                     289295.19         253244.06
 
 5   Profit Before Tax                    1979.81       (-) 4932.67
 
 6   Tax Expenses                          Nil               Nil
 
 7   Profit After Tax                     1979.81       (-) 4932.67
 
 Due to the accumulated loss, your Directors are not recommending any
 dividend for the year 2011-2012.
 
 B.  PRODUCTION / In Tonnes
 
                                      2011-12            2010-11
 
 1   Factamfos 20:20                  622256             644454
 
 2   Ammonium Sulphate                163468             200311
 
 3   Caprolactam                       37854              44345
 
 C.  SALES / In Tonnes
 
                                      2011-12            2010-11
 
 1   Fertilisers                      834580             932670
 
 2   Caprolactam                       40963              44136
 
 The performance of the company during the year 2011- 12 was
 satisfactory. The company was able to maintain the production and sales
 at a reasonable level and earn a marginal profit. Financial results of
 the company for the year 2011-12 shows a Profit of Rs.19.80 crore as
 against the loss of Rs.49.32 crore during the year 2010-11.
 
 During the financial year 2011-12, the company has faced several
 constraints in the production and marketing front.
 
 The production of finished products has come down during the year under
 review as compared to the previous year. The main reason for adverse
 variation in production is constraint in the availability of Phosphoric
 Acid and the unexpected shutdown of ammonia plant on account of Carbon
 Di-oxide absorption section failure. The lower production has resulted
 in lower sales volume.
 
 Low production and sales volume have affected the financial performance
 of the company. Steep increase in the prices of raw materials and
 intermediates has also affected the financial performance of the
 company adversely. Due to aging of plants, the company continues to
 incur considerable amount towards repairs and maintenance. The adverse
 impact of the exchange rate variation has also affected the
 profitability of the company. The adverse effect of exchange rate
 variation in the financial year 2011-12 is Rs.12.38 crore as against a
 favourable effect of Rs.11.32 crore during the year 2010-11.
 
 However, marginal reduction in the interest and finance charges,
 improvement in the working capital position and net-worth are the
 silver lines in the performance of the company in the financial front.
 
 As compared to the previous year, the company is able to achieve a
 reduction of Rs.6.63 crore in the interest and finance charges. This is
 due to the lower utilization of bank limit and the reduction in
 interest rates. The net-worth of the company has also increased to
 Rs.161.48 crore as against a net-worth of Rs.141.69 crore as on 31.3.2011.
 
 In order to improve the turnover and profitability, the company is
 concentrating also on marketing of traded products. During the year
 2011-12, FACT has handled 56696 MT of imported Urea and 39430 MT of MOP
 at Cochin Port.
 
 Prior to the financial year 2007-08, in the absence of viable market
 for Gypsum, the company did not value Gypsum stock in the books of
 accounts. Based on the qualification of the statutory auditors during
 2007-08, the company started valuing Gypsum stock at net realizable
 value considering the estimated sales quantity of 5 years, out of the
 total stock available with the company. Based on the qualification of
 statutory auditors with regard to valuation of Gypsum on the accounts
 of 2010-11, opinion of Expert Advisory Committee of the Institute of
 Chartered Accountants of India was obtained as advised by the Principal
 Director of Commercial Audit and Ex-Officio Member Audit Board.
 
 Accordingly, the company has valued the entire saleable quantity of
 Gypsum as against the 5 years sales quantity.
 
 To promote Integrated Plant Nutrient Management, FACT is expanding the
 sale of organic manure to the States of Kerala and Tamil Nadu. During
 the year 2011- 12, FACT has sold 5150 MT of organic manure. The company
 has sold 36772 MT Bagged Gypsum in the year 2011-12 compared to 38051
 MT during the year 2010-2011. The company has plans to sell 50,000 MT
 of bagged Gypsum during the year 2012-2013.
 
 The performance of the company during the first quarter of the
 financial year 2012-13 is not encouraging. The shut down of plants
 during April and May 2012 for Annual Maintenance has affected the
 production of finished products. Constraints in the availability of
 Phosphoric Acid continue to affect the production performance of the
 company for the year 2012-13.  However, during the first quarter the
 production of Factamfos in Cochin Division was higher compared to the
 corresponding quarter of the previous year.
 
 The company expects some improvement in performance in the coming
 months and expects to end the financial year 2012-13 with positive
 working result.
 
 The additional compensation for use of Naphtha in the production of
 Ammonia has been allowed by the Government only upto 31.3.2012. The
 company expects Government notification on additional compensation for
 use of Naphtha in the year 2012-13 also.
 
 Your Directors are pleased to inform you that the Joint Venture Company
 - FACT-RCF Building Products Limited – has started commercial
 production with effect from 1st June 2012.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 A Management Discussion and Analysis Report covering the operational
 aspects during the year 2011-2012 is enclosed.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to Sec.217(2AA) of the Companies Act, 1956, your Directors
 hereby state:
 
 that in the preparation of annual accounts, the applicable accounting
 standards had been followed along with proper explanation relating to
 material departures.
 
 that 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 as at March 31, 2012 and of the profit of the company
 for the period from 1st April 2011 to 31st March 2012.
 
 that the directors have 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.
 
 that the annual accounts have been prepared on a going concern basis.
 
 REPORT ON CORPORATE GOVERNANCE
 
 Your Directors are pleased to state that your Company has been
 practicing the principles of good Corporate Governance. The Board lays
 emphasis on transparency and accountability for the benefit of all
 stake-holders of the Company. Report on Corporate Governance in
 accordance with the listing agreement is annexed to this report.
 
 STATUTORY AUDITORS, COST AUDITORS
 
 M/s. Babu A.Kallivayalil and Co., Chartered Accountants, Kochi, was
 re-appointed as Statutory Auditors of the Company for the year 2011-12
 by the Comptroller and Auditor General of India. M/s. R.Sadasivan and
 Co, Chartered Accountants, Chennai was appointed as Branch Auditors for
 Tamilnadu and Kerala area and M/s. Ramanatham and Rao, Chartered
 Accountants, Hyderabad was re-appointed as Branch Auditors for
 Karnataka and Andhra Pradesh area of the Company for the year 2011-12
 by the Comptroller and Auditor General of India.
 
 M/s. Sukumaran & Co., Cost Accountants, Thiruvananthapuram has been
 appointed as Cost Auditors of the Company for the year 2011-12.
 
 Comments of Statutory Auditors
 
 The Statutory Auditors in their report has made certain comments on the
 Accounts of the Company for the year 2011-12. The replies to the
 comments of Statutory Auditors are annexed to this report.
 
 DIRECTORS RETIREMENTS & APPOINTMENTS
 
 Government of India, Ministry of Chemicals and Fertilisers, Department
 of Fertilisers, vide Order No.130/ 8/2003-HR-1 dated 8th August 2011
 notified the appointment of Dr.V.Rajagopalan, Additional Secretary &
 Financial Adviser, Department of Fertilisers and Shri S.C.Gupta, Joint
 Secretary (F&P), Department of Fertilisers, as Part-time Official
 Directors on the Board of FACT.
 
 Government of India, Ministry of Chemicals and Fertilisers, Department
 of Fertilisers, vide Order No.86/ 3/2009-HR-1 dated 29th November 2011
 notified the appointment of Shri P.K.Chandrasekharan as Director
 (Marketing) on the Board of FACT.
 
 Pursuant to Government of India, Ministry of Chemicals and Fertilizers,
 Department of Fertilizers Order No.130/ 8/2003-HR-I dated 8th August
 2011, Shri Satish Chandra, Director, ceased to be a Director on the
 Board of Directors of FACT.
 
 On completion of the 3 years term, Ms.Pratibha Karan, Shri
 T.M.Jeyachandran, Shri.Khan Masood Ahmad, Prof.  R.K.Mishra and
 Dr.B.S.Ghuman, Non-official Part-time Directors of the company were
 retired from the Board of FACT on 03.10.2011.
 
 Dr.B.Bodeiah and Shri S.Balan, Non-official Part-time Directors were
 retired from the Board of FACT with effect from 04.03.2012 on
 completion of three years.
 
 The Board place on record its appreciation of the valuable services
 rendered by Shri Satish Chandra, Ms.Pratibha Karan, Shri
 T.M.Jeyachandran, Shri.Khan Masood Ahmad, Prof. R.K.Mishra,
 Dr.B.S.Ghuman Dr.B.Bodeiah and Shri S.Balan.
 
 AUDIT COMMITTEE
 
 In line with the Provision of Section 292(A) of the Companies
 (Amendment) Act 2000 and Clause 49 of the listing agreement with Stock
 Exchange, an Audit Committee of the Board has been constituted.
 
 PUBLIC DEPOSITS
 
 The total amount of Fixed Deposits as on 31st March 2012 was Rs. 4073.13
 lakh. As on 31-03-2012, 27 depositors have not claimed their deposits
 amounting to Rs. 24.76 lakh.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 Information regarding the conservation of energy, technology
 absorption, adaptation & innovation and foreign exchange earnings
 and-outgo required as per Section 217(1) (e) of the Companies Act, 1956
 is set out in a separate statement attached to this report and forms
 part of it.
 
 EMPLOYEES PARTICULARS, REMUNERATION ETC.
 
 During the year no employee had received remuneration within the
 purview of Section 217(2A) of the Companies Act, 1956.
 
 ACKNOWLEDGEMENT
 
 Your Directors gratefully acknowledge the valuable guidance and support
 extended by the Government of India, Department of Fertilisers and the
 State Governments of Kerala, Tamilnadu, Karnataka and Andhra Pradesh.
 
 The Directors deeply appreciate the committed efforts put in by the
 employees and look forward to their dedicated services and endeavour in
 the years ahead to enable the Company to scale greater heights.
 
 The Directors also acknowledge the continued support extended by the
 Shareholders, Depositors, Dealers, Suppliers and Customers of the
 Company, the Press and Electronic Media.
 
 For and on behalf of the Board of Directors.
 
 Sd/-
 
 Sham Lal Goyal
 
 Chairman and Managing Director
 
 Udyogamandal
 
 Date: August 23, 2012