Dear Members,
 
 The Directors are pleased to present the 37th Annual Report on the
 business and operations of the company together with the audited
 accounts for the year ended March 31,2011.
 
 Financial Highlights
 
 During the year under review, the Company achieved turnover of Rs. 5791
 crore (previous year Rs. 5091 crore). The profit before tax was X 203.92
 crore (previous year Rs. 259.95 crore) and profit after tax was Rs. 138.50
 crore (previous year Rs. 171.51 crore). The decrease in profit over
 previous year is mainly due to higher receipt of subsidy arrears during
 the previous year and decrease in interest income. This has been off
 set by higher production, lower energy consumption, and higher sale of
 Industrial Products. The total borrowings of the company as at 31st
 March, 2011, stood at Rs. 613.06 crore (Rs. 403.16 crore as at 31 * March,
 2010). The borrowings include long term loan of Rs. 150 crore to finance
 the under implementation capital scheme of change over of feed stock
 from Fuel-oil to Natural Gas at Nangal, Bathinda and Panipat and buyers
 credit of Rs. 41.22 crore for Urea capacity enhancement projects at
 Vijaipur. The cash credit utilization was Rs. 343.84 crore and short term
 loan of Rs. 78 crore was outstanding as on that date.
 
 Dividend
 
 The Directors have recommended a dividend of Rs.0.85 per share (previous
 yearRs.1.05 per share) subject to approval of the members. The total
 dividend pay-out is Rs.48.46 crore (including dividend tax of Rs.6.76
 crore) and accounts for 30% of profit after tax. A sum of Rs.13.85 crore
 has been transferred to the general reserve during the year (previous
 year 17.15 crore).
 
 Operations
 
 During the year, your company produced 33.80 lakh tonnes of Urea
 (104.06% of installed capacity), including 1.49 lakh tonnes of
 additional production from Vijaipur Plants, compared to 33.30 lakh
 tonnes in the previous year. Vijaipur units achieved ever-best yearly
 production of Urea and Ammonia at 18.78 lakh tonnes and 10.92 lakh
 tonnes respectively, which was 108.6% and 108.8 % of installed
 capacity. The three fuel oil based plants achieved 100% capacity
 utilization on cumulative basis. The production beyond 100% capacity
 utilization in fuel oil based plants is not economically viable in
 terms of Pricing Policy of Urea.  The company achieved ever-best
 Bio-Fertilizers production of 231 tonnes during the year against
 earlier best production of 226 tonnes in 2009-10.  Ever best
 lower energy consumption of 9.446 Gcal/tonne of urea was achieved at
 Nangal during 2010-11 surpassing the previous best lowest energy
 consumption of 9.505 Gcal/tonne of urea in 2008-09. The percentage
 share of NFL in urea production in the country has been estimated at
 15.4%. Company has also started the production of foundation and
 certified seeds under a pilot project.
 
 Sales & Marketing
 
 Company sold 33.59 lakh tonnes of Urea (including Neem coated Urea of
 1.20 lakh tonnes) against 33.78 lakh tonnes (including Neem Coated Urea
 of 0.38 lakh tonnes) in the previous year. Inspite of marginal drop in
 sales quantity mainly due to limitation of railway wagons, the sales
 turnover including subsidy for the year was Rs. 5791 crore, an increase
 of 14% overRs.5091 crore in the previous year. The increase in turnover
 is due to increase in subsidy resulting from increase in the prices of
 petroleum products and revision in the price of APM Gas from 1st
 July,2010, higher sales of industrial products, etc. Bio-fertilizers
 sales at 219 tonnes saw a growth of 11% over the previous year at 196
 tonnes. Industrial Product sales were of the value of Rs.115 crore in
 2010-11 recording a growth of 17% over previous year.
 
 Company sold 0.50 lakh tonnes of imported Murate of Potash (MOP). It
 has also ventured into trading of certified seeds and sold 5502 tonnes
 of wheat, soyabean and paddy seeds with a turnover of Rs. 9.07 crore.
 Company also sold mycorrhiza and compost. In agro-chemicals, the
 Company saw a turnover of Rs. 1.03 crore and efforts are being made for
 trading of Zinc Sulphate and Ventonite Sulphur.
 
 Company signed an MoU with M/s PT PUPUK SRIWIDJAJA, an Indonesian firm
 regarding procurement of around 3 lakh tonnes of Urea and 2.50 lakh
 tonnes of NPK per annum for a period of two years.
 
 The Company undertook various Agriculture extension activities during
 the year. Krishi melas, exhibitions, Crop Seminars, Farmers'' & Dealers''
 Training Programmes and study tours were organized to disseminate
 information regarding improved farm technology and establish direct
 communication with the farmers as also to educate the farmers on the
 balanced use of fertilizer and its timely application besides providing
 guidance on pesticides and fungicides. Under orientation programmes for
 dealers/retailers and farmers on balanced fertilization to optimize
 crop productivity, a total of 2045 dealers/retailers and 5351 farmers
 were covered during the year. The Company undertook 409 block and
 frontline demonstrations and 182 R&D trials on different crops in
 different areas. During the year, 17520 farmers were trained and 59,970
 soil samples were tested, and analyzed. The Company participated in 42
 Krishi Melas and Exhibitions. During the year, 15 ''Krishi Sewa Kendras''
 were set-up and 27 solar lights distributed.  Company is establishing a
 Soil Testing Laboratory at Balasore, Odisha at a cost of Rs. 70 lakhs
 under the National Project on Soil Health and Fertility of Govt, of
 India. The Company has 4 mobile and 5 static Soil Testing Laboratories.
 The Laboratories are used for Soil Testing and analysis to make
 balanced use of fertilizers by the farming community.
 
 Modernization and Expansion Projects
 
 With a view to consolidate its position as a market leader in Urea,
 projects of about Rs. 4700 crore are at various stages of implementation
 in Company''s various plants. The major ongoing schemes are:
 
 Revamp of fuel-oil based plants at Panipat, Bathinda & Nangal
 
 The Company has undertaken revamp of fuel-oil based plants at Panipat,
 Bathinda & Nangal for change over of feedstock from Fuel-oil to Natural
 Gas. These projects involve a total investment of Rs. 4066 crore and a
 completion period of 36 months from the Zero date i.e. 29th January
 2010. These projects are being implemented on lumpsum turn key (LSTK)
 basis. Panipat and Bathinda projects are being implemented by M/s.
 Larsen & Toubro (L&T) with process licence from M/s. Haider Topsoe.
 Nangal Project is being implemented by consortium of M/s. Tecnimont SPA
 Italy and M/s. Technimont ICB, Mumbai with process licence from KBR.
 M/s. Project & Development India Limited (PDIL) has been engaged as
 Project Management Consultant for all these three projects. The
 projects are on schedule.
 
 Capacity Augmentation & Energy Saving Project (ESP) at Vijaipur
 
 The Company has undertaken Capacity augmentation of Ammonia & Urea
 plants at Vijaipur-I & II units including installation of Carbon
 Dioxide Recovery (CDR) plant at an investment of around Rs.650 crore. The
 total urea capacity of Vijaipur units after commissioning of the
 project shall be 20.66 lakh tonnes per annum against 17.29 lakh tonnes
 per annum at present. Capacity Augmentation of Ammonia & Urea shall be
 completed by November, 2011 and the CDR Plant shall be commissioned by
 June, 2012.
 
 Human Resource Management
 
 The Company has always believed that human resource is its most
 important asset and continues to work for its development and
 realisation of its potential. To achieve growth and to foster
 motivational climate, several initiatives were taken up during the
 year. Modified Performance Related Pay Scheme for Executives and
 Non-Executives has been implemented and Group Productivity Allowance
 Scheme has also been introduced. The Company has introduced Employees
 Economic & Social Rehabilitation Scheme, which protects the welfare of
 the family in case of demise/permanent disablement of employee during
 service. A new Pension Scheme for the benefit of employees is also in
 the process of implementation.
 
 During the year, to inculcate leadership qualities with high values,
 moral and ethics in all supervisory staff and managerial cadre, Company
 achieved 8781 and 11802 man days training for Executives and
 Non-Executives, respectively by deputing employees for external and
 in-house programmes. Manpower strength of the company as on 31.03.2011
 was 4596 comprising of 1877 Executives and 2719 Non-executives.
 
 The Employer-Employee relationship continued to be harmonious during
 the year. There was no loss of production due to any adverse IR
 situation. The schemes for employees'' participation in Management
 continue to function successfully. There were continuous interactions
 between the Management and employees'' representatives on various issues
 keeping in view the best interest of employees and the Company.
 
 The Company continues to make efforts for improving employees'' health,
 well-being and welfare and has taken steps for providing recreation,
 education and general welfare of employees.
 
 Implementation of Official Language
 
 The Company is making all efforts to ensure the implementation of
 Official Language policy of the Government of India. The targets fixed
 in the Annual Programme issued by the Department of Official Language,
 Government of India have been achieved. A number of workshops,
 competitions and pakhwaras were organized to encourage employees to
 work in Hindi. Information Technology is being widely used to promote
 the official language in the offices. The Company continued to win
 awards in implementing the National Language. Panipat Unit received Raj
 Bhasha Shield in Hindi Language from ''NagarRajbhashaKaarynvan Samiti''
 Panipat for 2009.
 
 Awards & Accolades
 
 Your Company excelled in performance in various areas, which got
 recognition from various quarters during the year.  The company has
 received Excellent rating for the MoU 2009-10 which is tenth
 excellent rating in a row.
 
 Company has won the following prestigious awards during 2010-11 :-
 
 ICWAI Award 2009 for excellence in cost management for Bathinda
 Unit.
 
 National Safety Award 2008 for accident free year and lowest average
 frequency rate from Ministry of Labour and Employment, New Delhi and
 Prashansa Patra National Safety Award 2009 from National Safety Council
 for VijaipurUnit.
 
 Safety Award Suraksha Puraskarfrom National Safety Council of India
 for the year 2009 for Panipat Unit.
 
 Environment Management
 
 The Company accords highest priority to Industrial Safety, Ecology &
 Pollution Control and has adopted 3R''s approach i.e. reduce, reuse,
 recycle in an effort to have zero effluent discharge plants. Company
 has adopted an extensive afforestation programme. All the statutory
 standards are met by respective units.
 
 Silo system for collecting fly ash from ESP Hoppers using dense phase
 pneumatic conveying system has been installed at Panipat, Bathinda and
 Nangal Units for evacuation of ash from the plants. This has helped to
 contain the ecological concerns in fly ash disposal.
 
 All the Units are ISO 9001-2000 certified for Quality Management
 System, ISO-14001 certified for Environment Management System and have
 received OHSAS-18001 certification for occupational health and safety
 management system.
 
 Company is putting up a Carbon Dioxide Recovery Plant of 450 MTPD
 capacity for recovery of carbon dioxide from Flue Gases of primary
 reformer at Vijaipur. This will help in reduction of discharge of
 greenhouse gases.
 
 Information Technology
 
 The Company is making use of information technology in its business
 functions. A consultant has been appointed to provide advisory services
 on implementation of Enterprise Resource Planning. A preliminary report
 including ERP strategy, road map and cost benefit analysis on ERP
 implementation has already been received.
 
 On IT infrastructure front, the Company has provided wide Local Area
 Network (LAN) at all the units and offices for integration of local
 computers and servers, a MPLS based Virtual Private Network (Wide Area
 Network) to provide a secured and scalable connectivity amongst
 Corporate Office, Units and Marketing Offices. IP enabled services like
 email, internet browsing, FTP Server, etc. has been provided to the
 employees. Field Staff of Marketing Division have been provided with
 high-speed data cards/broadband connections. The Company is extensively
 using the facility of e- procurement, e-payment and e-receipt for
 bringing efficiency and transparency in the business system. DSLAMs/
 ADSL Routers have been provided at the Units for LAN connectivity to
 remote locations through internal exchanges.
 
 Corporate Social Responsibility
 
 The Company is committed towards up-liftment of under privileged
 Section of the Society and has supported various social and community
 initiatives touching the lives of large number of people. The Company
 has identified CSR activities in economic, environmental, health and
 social areas and had earmarked Rs.3 crores towards CSR activities during
 the financial year 2010-11. Separate budgets and achievement targets
 have been fixed for each CSR initiative.  The unspent budget from
 2010-2011 has been carried forward to the next financial year.
 
 Roadmap was developed to undertake integrated development of 9 villages
 situated in the vicinity of our Plants/Offices. Baseline survey has
 been completed in all the Units/ Offices of the Company. Activities
 identified under CSR like digging of tube well for supplying of potable
 water, laying pipelines for distribution of water, Construction of
 concrete approach roads, Anganwadies, kitchen sheds, toilets, overhead
 water tanks, carrying out various civil jobs in nearby villages,
 construction of boundary wall, Preparation of Volley ball play ground,
 installation of submersible tube well, procurement of furniture for
 distribution in nearby schools etc. are under progress.
 
 Action to line up a contract to construct a Multipurpose Women
 Empowerment Centre on Panchayat land of Nangal Unit, appointment of
 agencies for imparting vocational training / stitching training to
 women in nearby villages is also under process.
 
 17 nos. Solar Street Lights have been installed in Village Sivian,
 Bathinda. Further, procurement of 35 nos. of solar lights for
 installation in nearby villages is under process.
 
 100519 saplings have been planted during the year in the vicinity of
 Company''s plants and units. Company''s manufacturing units at Vijaipur,
 Panipat, Bathinda and Nangal also carried out various useful activities
 for the benefit of socially and economically weaker sections of the
 society in the surrounding areas of the respective unit. Health
 awareness Programmes/Medical Camps were organized. In addition,
 financial aid, ceiling fans, sewing machines etc.  were also provided
 to the poor and needy persons of nearby villages.
 
 In addition, Company extended financial assistance to Bitnoti College,
 Orissa for construction of one Auditorium-cum- Gallery Class Room.
 Mayurbhanj is a tribal dominated backward district of Odisha. The
 objective of construction of auditorium is to prepare students of
 backward tribal areas to face the competitive world by developing their
 presentation skills, public speaking and entrepreneurship.
 
 Balasore is a tribal dominated backward district of Orissa and Utkal
 Bal Ashram is one of the oldest and reputed orphanage of Balasore. This
 Ashram was established in the year 1944 and has been rendering valuable
 services to about 250 orphan children. Company is extending a
 contribution for construction and renovation of Utkal Bal Ashram.
 
 As in the past, the Company continued to facilitate the farming
 community in improving the crop productivity. The Company also
 continued its efforts to improve the living standard of
 socio-economically weaker sections of the society.
 
 The Right to Information Act 2005
 
 In consonance with the provisions of the Right to Information Act,
 2005, Company has taken requisite measures and appointed Appellate
 Authorities/Public Information Officers/Asstt. Public Information
 Officers at all the Units/Offices of the Company in order to respond
 effectively to the requests of the applicants under the Act. The Act
 aims at bringing out transparency in the functioning of organizations
 and the Company has created necessary mechanism to meet the objective.
 
 Vigilance
 
 Vigilance Division endeavored for evolving and effectively implementing
 preventive techniques including transparency, accountability, fair
 play, objectivity and timely response in dealing with matters relating
 to public administration.
 
 All systems and processes for deliverance of services are being
 synchronized through use of technology like effecting e-payments to
 vendors, e-receipts, publishing complete details of tenders on website,
 e-procurement, reverse auction, etc.
 
 To impart proper training to the employees, yearly calendar was
 prepared for organizing training programmes/workshops. Special emphasis
 was laid by organizing workshops on leveraging technology and
 disciplinary matters through external faculties. Vigilance Awareness
 Week was observed at all Units/Offices involving all employees to
 create an environment of ethical growth in the organization.
 
 Management Discussion & Analysis Report
 
 Management Discussion and Analysis Report covering the operations and
 future prospects of the company is at Annexure-I.
 
 Statutory Auditors & Statutory Auditors Report
 
 M/s. S.P. Chopra & Co. and M/s. DSP & Associates, Chartered
 Accountants, were appointed as Joint Auditors for the financial year
 2010-11 by the Comptroller & Auditor General of India. The Statutory
 Auditors'' Report on the Accounts of the Company for the financial year
 ended 31 * March, 2011 is at Annexure-I I.
 
 The Comptroller & Auditor General of India (CAG) has given Nil comments
 on the accounts of the Company for the year ended 31st March, 2011.
 under Section 619(4) of the Companies Act, 1956. A copy of the comments
 is at Annexure-lll.
 
 Cost Audit
 
 As prescribed under the Cost Accounting Records (Report) Rules, 2001,
 the cost accounting records are being maintained by all the Units of
 the Company. Cost Audit for 2010-11 has been completed.
 
 The Cost Audit Reports for the financial year 2009-10 in respect of the
 units was filed as follows:-
 
 Unit                  Date of filing of Report
 
 Nangal                     18.8.2010
 
 Bathinda                   18.8.2010
 
 Vijaipurl                  19.8.2010
 
 Vijaipurll                 19.8.2010
 
 Panipat                    25.8.2010
 
 Corporate Governance
 
 The Company believes Corporate Governance is the fountain head of
 shareholder''s value creation. The Company has in place a well defined
 Corporate Governance Mechanism which considers the interests of all
 stakeholders. A separate section on Corporate Governance forming part
 of this Directors'' Report alongwith the Auditors'' Certificate
 conforming the Compliance of Corporate Governance Code as provided in
 Clause 49 of the Listing Agreement is at Annexure-IV.
 
 Report on Conservation of Energy, Technology Absorption and Foreign
 Exchange Earnings & Outgo.
 
 Disclosures in terms of Companies (Disclosure of Particulars in the
 Report of the Board of Directors) Rules, 1988, in respect of
 Conservation of Energy and Technology Absorption & Foreign Exchange
 Earnings and Outgo are at Annexure-V.
 
 Statistical information on employees belonging to Scheduled
 Castes/Scheduled Tribes Categories
 
 The information with regard to the employees belonging to Scheduled
 Castes / Scheduled Tribes is annexed at Annexure-VI.
 
 Particulars of employees
 
 None of employees of the company is drawing remuneration in excess of
 the limits prescribed under section 217(2A) of the Companies Act, 1956
 read with companies (Particulars of Employees) Rules, 1975.
 
 Directors'' Responsibility Statement
 
 Pursuant to the requirement of Section 217(2AA) of the Companies Act
 1956, your Directors confirm that: -
 
 i.  in the preparation of the Annual Accounts, the applicable
 Accounting Standards have been followed and no
 
 material departure have been made therefrom by the Company;
 
 ii.  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 2010-11 and of the profit of the Company for that period;
 
 iii. the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities; and
 
 iv.  the Directors have prepared the Annual Accounts on a going concern
 basis.
 
 Board of Directors
 
 The position with regard to the Board of Directors since the last
 report is as follows:-
 
 Shri Sudhir Bhargava ceased to be Director w.e.f. 3rd May, 2010.
 
 Shri Deepak Singhal, Joint Secretary, Department of Fertilizers joined
 as a Director w.e.f. 27th May, 2010.
 
 Shri Rajesh Kumar Aggarwal, joined as Director (Technical) on 2nd June,
 2010.
 
 Shri N.K. Goyal, Shri S.A.T. Rizvi and Dr. S.K. Bhattacharyya ceased to
 be Directors w.e.f. 29th January, 2011.
 
 Capt. Pavan Kumar Kaul, ex-Executive Director, Container Corporation of
 India Ltd. has joined as Director (Marketing), w.e.f. 7th February,
 2011.
 
 Shri V.K. Sharma ceased to be Director and Chairman & Managing Director
 w.e.f. 231 February, 2011.
 
 Shri Deepak Singhal, Joint Secretary, Department of Fertilizers and a
 Director on the Board of the Company held the additional charge of the
 position of Chairman & Managing Director from 25th February, 2011 to
 17th March, 2011. He ceased to be a Director and Chairman & Managing
 Director of the Company w.e.f. 17th March, 2011.
 
 Shri Satish Chandra, Joint Secretary, Department of Fertilizers and
 Director on the Board of the Company has been holding the additional
 Charge as Chairman & Managing Director since 31st March, 2011.
 
 Shri Munikoti Niranjana Rao, a practicing Chartered Accountant has been
 appointed as an Independent Director on the Board w.e.f. 6.5.2011.
 
 Board places on record its deep appreciation for the valuable services
 rendered by Shri Sudhir Bhargava, Shri N.K.  Goyal, Shri S.A.T. Rizvi,
 Dr. S.K. Bhattacharyya, Shri V.K. Sharma and Shri Deepak Singhal during
 their association with the Company.
 
 In accordance with the provisions of Article 76(2) of the Articles of
 Association of the Company, Shri Satish Chandra shall retire by
 rotation at the Annual General Meeting and being eligible has offered
 himself for reappointment.
 
 In accordance with provisions of Section 257 of the Companies Act 1956,
 a notice has been received for appointment of Shri Munikoti Niranjana
 Rao as Director at the Annual General Meeting.
 
 Acknowledgements
 
 The Board of Directors acknowledge their gratitude for the valuable
 guidance and support received from the Government of India in
 particular Department of Fertilizers, Fertilizer Industry Coordination
 Committee (FICC), various State Governments, Financial Institutions,
 Banks, stakeholders and all others whose continued support has been a
 source of strength to the Company.
 
 The Board would like to place on record its appreciation to the hard
 work, commitment and unstinting efforts put in by your Company''s
 employees at all levels.
 
                           For and on behalf of the Board of Directors
 
                                                       (Satish Chandra)
                                           Chairman & Managing Director
 
 Place: New Delhi 
 Date: 29th July, 2011