I welcome you to the 23rd Annual General Meeting of the Company.
 
 It is indeed a source of gratification that on the eve of the
 millennium, the Indian economy is showing signs of recovery, leaving
 behind an unusually long period of stagnation.
 
 The Capital Markets in recent weeks have witnessed a sustained uptrend
 heralding the start of economic recovery.  The Indian Corporate Sector
 is beginning to show better results for the current financial year.
 Interest rates, have in the recent months, shown a healthy reduction.
 
 The food grain production this year has crossed the 200 million tonnes
 mark with the Agriculture Sector showing a growth of 3% against a
 negative growth of 3.7% in the previous year.  This, coupled with the
 continued good monsoon for the seventh consecutive year, helped to keep
 down inflation at the lowest ebb not witnessed during the previous
 seventeen years.
 
 All these positive factors would make India one of the most attractive
 destinations amongst emerging markets for overseas investors.
 
 This augurs well for the Indian economy on the eve of the millennium.
 
 The domestic production of Urea has increased to about 20 million
 tonnes and it is a matter of satisfaction that the domestic Urea sector
 has achieved international standards in both productivity as well as
 energy consumption.  This increased production in turn has also almost
 eliminated imports of Urea for domestic supplies, thereby conserving
 valuable foreign exchange resources for the country.  It is also
 heartening to note that the demand for Urea continues to register a
 healthy growth of 4% to 5% per year.
 
 In this context, it is imperative that the Urea Industry which is
 currently under the Retention Pricing Scheme is suitably nurtured and
 incentivised in the larger context of the country's strategic concern
 with regard to food supply.
 
 It is hoped that subsidy-related matters are looked at from a larger
 perspective of consolidating the gains that would accrue with the
 continued healthy performance of the Urea industry.  It would be wise
 to put in place a pragmatic long-term growth-oriented policy for the
 Urea industry.  This would go a long way in also providing the
 much-needed impetus to the Indian agriculture.
 
 Operations
 
 I am glad to inform you that the Second Plant, after facing initial
 teething problems, has stabilised to produce Urea at high levels of
 efficiency.
 
 The Plant I and Plant II of the Company continue to maintain
 consistently high levels of productivity and energy efficiency.
 
 The performance of your Company for the six months ending September 30,
 1999 should be good, and barring unforeseen circumstances, your Company
 should be in a position to better the performance over the
 corresponding period in the previous year.
 
 Your Directors have recommended a higher dividend of 20% for this year
 involving an increased dividend outlay of Rs. 69.43 crores.  I am sure
 you will welcome this move.
 
 Preference Shares
 
 Your Directors have recommended, subject to the approval of the
 shareholders, issue of Preference Shares upto Rs. 200 crores on a
 Private Placement Basis.  In the absence of a ready market for
 Preference Shares amongst the investing public, it has been considered
 desirable to place these Preference Shares with companies and bodies
 corporate, commercial banks, regional rural banks, financial
 institutions, insurance companies mutual funds and others.
 
 Nagarjuna Oil Corporation Limited
 
 Your Company is involved in the setting up of 6 million tonnes per
 annum Refinery Plant at Cuddalore in Tamil Nadu through Nagarjuna Oil
 Corporation Limited.  The financial closure of Nagarjuna Oil
 Corporation Limited is nearing completion and the dismantling of the
 Refinery at Woerth in Germany is in good progress.  I am optimistic
 that the Plant shall be re-erected and commissioned as scheduled.
 
 Nagarjuna Power Corporation Limited
 
 The implementation of the 1,000 MW Power Plant being set up through
 Nagarjuna Power Corporation Limited has progressed with the Company
 receiving the Techno Economic Clearance from Central Electricity
 Authority and the Power Purchase Agreement having been initialled.
 Other project-related work is progressing steadily.
 
 Acknowledgement
 
 On behalf of the Company, I would like to thank the Central and State
 Governments, Financial Institutions, Banks, Gas Authority of India
 Limited, the farming community, the shareholders, debenture-holders,
 depositors, the dedicated employees of the Company and all others for
 their continued support and assistance.