To the Members,
 
 The Directors have pleasure in presenting the 67th Annual Report of
 your Company together with the Audited Accounts and the report of the
 Auditors for the year 2010-2011.
 
 We are happy to inform you that FACT has been able to maintain an
 impressive level in the overall performance during the financial year
 2010-11. Turn over of the company touched an all time record of Rs.
 2512 crore.
 
 HIGHLIGHTS
 
 - All time high sales turnover 
 
 - All time record sale of Gypsum 
 
 - Impressive sale of Caprolactam
 
 - New record in production and sale of Bio-Fertilisers
 
 - Award and Laurels in Safety and Pollution Control
 
 PERFORMANCE - PRODUCTION, SALES AND PROFITABILITY
 
                                         2010-2011      2009-2010
 
 1 Production / In Tonnes
 
 Factamfos 20:20                            644454         753744
 
 Ammonium Sulphate                          200311         179546
 
 Caprolactam                                 44345          42006
 
 2 Sales / In Tonnes
 
 Fertilisers                                932670        1044893
 
 Caprolactam                                 44136          38253
 
 3 Financial / Rs. lakh
 
 Turnover                                   251183         214161
 
 Profit before interest, depreciation 
 & taxes                                  13438.72        3654.11
 
 Profit/Loss (-) after tax              (-)4932.67    (-)10383.51
 
 During the year 2010-11, the company has achieved considerable
 improvement in the production of Ammonium Sulphate and Caprolactam.
 
 The main reason for shortfall in the production of Factamfos as
 compared to previous year is the shortage of phosphoric acid.
 
 The reason for the reduction in the sale of Factamfos as compared to
 2009-10 is attributable to lower production.
 
 Financial results of the company for the year 2010-11 shows a loss of
 Rs.49.33 crore as against the loss of Rs.103.84 crore during the year
 2009-10.
 
 Due to the accumulated loss, your Directors are not recommending any
 dividend for the year 2010-2011.
 
 The loss incurred for the year under review is mainly due to the
 
 provision for gratuity, loss on sales of Fertilisers bonds provided in
 the accounts and huge burden on interest and financing charges.
 
 Consequent to the increase in gratuity limit from Rs.3.5 lakh to Rs.10
 lakh, the liability towards Gratuity provision and leave encashment
 debited in the profit and loss account for the year 2010-11 is Rs.85.04
 crore as against Rs.20.64 crore during the previous year.  Under a
 buy-back scheme announced by the Government of India, the Fertiliser
 bonds amounting to Rs.265.76 crore have been sold by the Company to RBI
 on 31.3.2011 and 26.7.2011. Government of India agreed to compensate
 not less than 50% loss suffered on account of buy-back arrangement.
 Loss of Rs.18.48 crore being 50% of loss on reduction in face value of
 bonds has been provided in the Annual Accounts for the year 2010-11.
 The company has incurred additional expenditure of Rs.25.11 crore on
 account of interest and financing charges for the year 2010-11 as
 compared to last year and the total interest and financing charges
 provided in the accounts for the year 2010-11 is Rs.141 crore.  The
 production and the financial performance of the company during the
 first quarter of the financial year 2011-12 is also not encouraging.
 Due to shortage of raw materials the production fell much below the
 targeted levels.
 
 The Company has taken steps to ensure availability of raw materials to
 optimize production in the remaining months of the financial year
 2011-12. The Company has laid down plans to maximize the production of
 captive phosphoric acid. The availability of imported phosphoric acid
 is also showing some improvement. FACT has entered into a long term
 arrangement for supply of phosphoric acid with indigenous supplier. The
 Company is also proposing to enter into long term arrangement for
 supply of Rock phosphate. To facilitate procurement of bulk consignment
 of Sulphuric acid, the company has hired a Sulphuric acid storage
 facility at Willingdon Island.
 
 In order to improve the turnover and profitability, the company is
 concentrating in marketing of traded products. During the year 2011-12,
 FACT has already handled a Urea ship of 32996 MT at Cochin Port. FACT
 is anticipating another Urea ship during the second quarter of the
 financial year 2011-12. Offers have already been received for import of
 MOP through MMTC and FACT plans to import 50000 to 75000 MT of MOP
 during the financial year 2011-12.  To promote Integrated Plant
 Nutrient Management, FACT is expanding the sale of organic manure to
 the State of Tamil Nadu.  During the year 2011-12, FACT has
 considerably increased the sale of bulk Gypsum and plans to sell 50,000
 MT of bagged Gypsum.  The sale of bulk Gypsum is set to touch an all
 time record of 6 to 7 lakh MT during the year 2011-12.
 
 On materializing the above, the Company hopes to improve its physical
 and financial performance and to show a positive result for the
 financial year 2011-12.
 
 The Joint Venture project with RCF for manufacturing gypsum- based
 building material is nearing completion and the project is expected to
 be commissioned shortly.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 A Management Discussion and Analysis Report covering the operational
 aspects during the year 2010-2011 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, 2011 and of profit and loss account for
 the year ended March 31, 2011.  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 directors had prepared the annual accounts 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 & Co., Chartered Accountants, Kochi, was
 re-appointed as Statutory Auditors of the Company for the year 2010-11
 by the Comptroller and Auditor General of India. M/s.  A.John Moris &
 Co, Chartered Accountants, Chennai was re- appointed as Branch Auditors
 for Tamilnadu and Kerala area and M/s.Ramanatham & Rao, Chartered
 Accountants, Hyderabad was re-appointed as Branch Auditors for
 Karnataka and Andhra Pradesh area of the Company for the year 2010-11
 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 2010-11.
 
 Comments of Statutory Auditors
 
 The Statutory Auditors in their report has made certain comments on the
 Accounts of the Company for the year 2010-11. The reply to the comments
 of Statutory Auditors are annexed to this report.
 
 DIRECTORS RETIREMENT & APPOINTMENTS
 
 Shri A.Asokan, Director (Marketing) who was holding additional charge
 of Chairman and Managing Director, has retired from the services of
 FACT on superannuation on 30.06.2010.  Government of India, Ministry of
 Chemicals and Fertilisers, Department of Fertilisers vide Order
 No.86/5/2008-HR-I dated 30th June 2010 entrusted additional charge of
 the post of Chairman and Managing Director to Shri K.Mathevan Pillai,
 Director (Finance), and Shri K.Mathevan Pillai had assumed charge of
 Chairman and Managing Director with effect from 01.07.2010. Shri
 K.Mathevan Pillai, superannuated from the service of FACT on
 31.08.2010.  Government of India, Ministry of Chemicals and
 Fertilisers, Department of Fertilisers vide Order No. 86/5/2008-HR-I
 dated 6th September 2010 entrusted additional charge of the post of
 Chairman and Managing Director to Shri V.G.Sankaranarayanan, Director
 (Technical). Shri V.G.Sankaranarayanan had assumed charge of Chairman
 and Managing Director with effect from 01.09.2010 and held the
 additional charge upto 28.2.2011. Shri V.G.Sankaranarayanan, Director
 (Technical) superannuated from the service of FACT on 30.4.2011.
 
 Department of Fertilisers, Ministry of Chemicals and Fertilisers,
 Government of India, vide Order No.130/8/2003-HR-1 dated 3rd May 2010
 notified the appointment of Shri Satish Chandra, Joint Secretary,
 Department of Fertilisers and Shri Deepak Singhal, Joint Secretary,
 Department of Fertilisers, on the Board of Directors of FACT in place
 of Shri Mathew C,Kunnumkal, Director and Shri Sudhir Bhargava,
 Director, respectively.  Government of India, Ministry of Chemicals and
 Fertilisers, Department of Fertilisers, vide Order No.130/8/2003-HR-I
 dated 3rd November 2010 notified the appointment of Shri Sham Lal
 Goyal, Joint Secretary (P&P), Department of Fertilisers as a Director
 on the Board of FACT in place of Shri Deepak Singhal, Director.
 Government of India, Ministry of Chemicals and Fertilisers,
 
 Department of Fertilisers vide Order No. 86/5/2008-HR-I dated 28th
 February 2011 entrusted additional charge of the post of Chairman and
 Managing Director to Shri. Sham Lal Goyal, Joint Secretary (P&P),
 Department of Fertilisers, Ministry of Chemicals and Fertilisers. Shri
 Sham Lal Goyal has assumed charge of Chairman and Managing Director
 with effect from 01.03.2011.  Government of India, Ministry of
 Chemicals and Fertilisers, Department of Fertilisers, vide Order
 No.86/4/2009-HR-I dated 20th December 2010 notified the appointment of
 Shri P.Muthusamy, as Director (Finance). Shri P.Muthusamy has assumed
 charge with effect from 18.03.2011.
 
 Government of India, Ministry of Chemicals and Fertilisers, Department
 of Fertilisers, vide Order No.86/1/2010-HR-I dated 28th June 2011
 notified the appointment of Shri V.K.Anil, as Director (Technical).
 Shri V.K.Anil has assumed charge with effect from 28.06.2011.
 
 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 in place of Shri Satish Chandra and Shri
 Sham Lal Goyal respectively.  The Board place on record its
 appreciation of the valuable services rendered by Shri A. Asokan,
 Director (Marketing), Shri K.Mathevan Pillai, Director (Finance), Shri
 V.G.Sankaranarayanan, Director (Technical), Shri Mathew C. Kunnumkal,
 Director, Shri Sudhir Bhargava, Director, Shri Deepak Singal, Director
 and Shri Satish Chandra, Director.
 
 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 2011 was Rs.4873.24
 lakh. As on 31-03-2011, 10 depositors have not claimed their deposits
 amounting to Rs. 90.35 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/-
 
 Udyogamandal                                         Sham Lal Goyal
 
 Date: August 30, 2011                Chairman and Managing Director