To the members
 
 Rashtriya Chemicals and Fertilizers Ltd,
 
 Mumbai
 
 The Directors of your Company have pleasure in presenting this 33rd
 Annual Report on the working of your Company together with the Audited
 Accounts for the year ended 31 st March, 2011.
 
 1.0.0 FINANCIAL PERFORMANCE:
 
 Summary of financial performance :
 
                                                       Rs. Crore
 
 Particulars                              2010-2011     2009-2010
 
 Sales including Subsidy                    5574.10       5697.18
 
 Other Income                                103.15        129.07
 
 Total Income                               5677.25       5826.25
 
 Cost of Sales                              5200.51       5386.55
 
 Operational Profit                          476.74        439.70
 
 Depreciation                                112.62         75.60
 
 Interest (Net)                                9.65         19.87
 
 Prior year adjustment                         0.22         (0.02)
 
 Profit/(Loss) before tax                    354.69        344.21
 
 Provision for Tax (including
 deferred Tax liability/Asset)               109.57        109.34
 
 Net Profit/(loss)                           245.12        234.87
 
 Appropriations:
 
 Dividend                                     60.69         60.69
 
 Tax and Educational cess on                   9.84         10.08
 
 Dividend
 
 Balance Transferred to General              174.59        164.10
 
 Reserve
 
 1.1.0 Highlights for the year 2010-2011:
 
 Your Company achieved a turnover of Rs.5574.10 crore compared to
 Rs.5697.18 crore in the previous year. The turnover is lower by Rs.
 123.08 crore during the year compared to previous year mainly due to
 lower subsidy received from Government of India. The total income from
 operations was Rs. 5677.25 crore as against Rs.5826.25 crore during the
 previous year. Your Company achieved a gross profit of Rs.476.74 crore
 as against Rs.439.70 crore. The net Profit before Tax at Rs.354.69
 crore as against Rs.344.21 crore registered an increase of 3.04%. The
 Net Profit after Tax during the current year, is higher at Rs.245.12
 crore as against Rs.234.87 crore in the previous year registering an
 increase of 4.36% over previous year. The net Interest cost during the
 year has been Rs.9.65 crore compared to Rs.19.87 crore during the
 previous year due to good treasury and foreign currency management.
 Your Company received ''MOU Excellent'' rating for 2009-2010 and is
 likely to get the same for 2010-11 from Ministry of Heavy Industries
 and Public Enterprises.
 
 1.2.0 Dividend:
 
 Your Company has lined up a number of capex programmes which will
 entail substantial expenditure and, in order to fund these programmes,
 it is necessary to plough back its profits. In view of this, your
 Directors propose to pay dividend at Rs.1.10 per each equity share of
 Rs.10/-, same as that in the previous year. The total out go works out
 to Rs. 70.53 crore (Rs. 70.77 crore in the previous year) including
 dividend distribution tax and education cess.
 
 1.3.0 Appropriation to General Reserves:
 
 Your Company earned a net Profit after Tax of Rs. 245.12 crore (Rs.
 234.87 crore in the previous year). The dividend pay out along with
 Tax/cess is Rs. 70.53 crore (Rs. 70.77 crore in the previous year). The
 balance amount of ^ 174.59 crore (Rs.164.10 crore in the previous year)
 is transferred to General Reserves.
 
 2.0.0 MANAGEMENT DISCUSSION AND ANALYSIS:
 
 2.1.0 OPERATIONAL RESULTS:
 
 2.1.1 PRODUCTION:
 
 2.1.2 Fertilizers:
 
 Your Company produced 27.29 lakh MT of fertilizers (21.24 lakh MT of
 Urea, 4.47 lakh MT of Suphalal 5:15:15 and 1.58 lakh MT of Suphala
 20:20) during the year as against 25.96 lakh MT (20.89 lakh MT of Urea,
 4.90 lakh MT of Suphala 15:15:15 and 0.17 lakh MT of Suphala 20:20)
 produced in the previous year and achieved overall installed capacity
 utilisation of 100.08% as against 96.23% during the previous year. The
 capacity utilisation of the Urea plants was to the extent of 104.28%.
 As regards complex fertilizers, Suphala [15:15:15] plant produced to
 the extent of 106.43% and Suphala 20:20 (ANP) produced 58.52% as the
 plant got stabilised in second half of the year. In terms of nutrients,
 your Company produced 10.76 lakh MT of Nitrogen (N), 0.99 lakh MT of
 Phosphate (P205) and 0.67 lakh MT of Potash (K20) during the year as
 compared to 10.38 lakh MT of N, 0.77 lakh MT of P205 and 0.74 lakh MT
 of K20 during the previous year.
 
 The details of performances of the units are given below:
 
 2.1.2.1 Thai Unit:
 
 Thai unit produced 17.83 lakh MT of Urea during the year compared to
 17.82 lakh MT produced in the previous year.  The unit achieved a
 capacity utilisation of 104.49% as compared to 104.41% during the
 previous year. The unit produced 11.35 lakh MT of Ammonia compared to
 11.28
 
 lakh MT during previous year. The energy consumption per MT of Urea was
 6.37 Gcal/ MT (6.30 Gcal MT in the previous year). In terms of
 nutrients in the fertilizers, the unit produced 8.20 lakh MT of N
 during the year, same as in previous year.
 
 Thai unit of your Company was bestowed with following awards during the
 year:
 
 i. Certificate of Merit for Excellence in Energy Conservation and
 Management from Indian Chemical Council for 2009.
 
 ii. Runner up Award for Best Technical Innovation from Fertilizers
 Association of India for the year 2009-10.
 
 iii: Green Tech Environment Excellence Award jn Gold Category for the
 year 2010.
 
 2.1.2,2 Trombay Unit:
 
 The Trombay Unit produced 3.41 lakh MT of Urea, 4.47 lakh MT of Suphala
 15:15:15 and 1.58 lakh MT of ANP during the year under report compared
 to 3.07 lakh MT of Urea, 4.90 lakh MT of Suphala 15:15:15 and 0.17 lakh
 MT of ANP produced during the previous year.
 
 The unit achieved an overall capacity utilization of 92.75% compared to
 82.14% during the previous year. In terms of Nutrient values, the unit
 produced 2.56 lakh MT of N, 0.99 lakh MT of P205 and 0.67 lakh MT of
 K20 during the year compared to 2.18 lakh MT, 0.77 lakh MT and 0.74
 lakh MT respectively in the previous year.
 
 The unit was bestowed with the following awards:
 
 i. Green Tech Environment Excellence Award for Environmental
 Excellence in Fertilizer Sector for 2009-10
 
 ii.  Second best National Energy Conservation Award in Fertilizer
 Sector for Energy Conservation.
 
 2.1.3 Industrial Products:
 
 Your Company is one of the prime chemicals manufacturers in the country
 producing several Industrial Chemicals at its two units. During the
 year, your Company produced 1.51 lakh MT of various major Industrial
 Chemical products compared to 1.19 lakh MT during the previous year.
 Your Company produces, amongst others, Methanol, Methylamines and
 derivatives, Ammonium Nitrate, Sodium Nitrate/Nitrite, Ammonium
 Bi-Carbonate, Formic Acid etc.
 
 2.2.0 MARKETING PERFORMANCE:
 
 2.2.1 Fertilizer Division:
 
 Your Company achieved sales volume of 40.14 lakh MT during 2010-11 as
 compared to 40.73 lakh MT in the previous year. Your Company sold 29.86
 lakh MT of Urea, 4.50 lakh MT of Suphala 15:15:15; 1.52 lakh MT of
 Suphala 20:20 and 4.26 lakh MT of other bought out products such as
 DAP, MOP, etc. compared to 28.62 lakh MT of Urea, 4.87 lakh MT of
 Suphala 15:15:15, and 0.16 lakh MT of Suphala 20:20 and 7.08 lakh MT of
 other bought out products respectively during the previous year.  The
 total sale of manufactured fertilizers during 2010-11 was 27.56 lakh MT
 as against 25.99 lakh MT in 2009- 10 registering a nominal increase of
 6.07%. the total sales value, excluding subsidy, of manufactured
 fertilizers during the period 2010-11 was Rs.1503.33 crore compared to
 Rs.1267.71 crore in the previous year.
 
 Though, the sale of own manufactured fertilizers was higher by 1.58
 lakh MT, since the total sale of bought out fertilizers during 2010-11
 was 12.58 lakh MT as against 14.74 lakhJVIT in 2009-10, the total sale
 during the year was marginally lower by 0.59 lakh MT.
 
 2.2.2 Industrial Products Division:
 
 Despite various constraints due to global recession during the second
 half of the financial year, Industrial Products Division achieved
 turnover of Rs. 726.25 Crore as against the sales turnover of Rs.
 717.28 Crore during the previous year. Ammonium Nitrate (Melt),
 Methanol, Methylamines and Cone. Nitric Acid, etc contributed
 significantly to the turnover.
 
 2.2.3 Exports :
 
 During the year Under report, your Company exported 384 MT of Suphala
 15:15:15 worth Rs. 0.74 crore as against 1220 MT of Rs. 2.58 crore
 during the previous year. Considering the products manufactured by your
 Company, scope for exporting and earning foreign exchange is very
 limited.
 
 2.2.4 FUTURE PLANS OF FERTILIZER MARKETING:
 
 Your Company has plans to increase the sales of all fertilizers from
 40.14 lakh MT in 2010-11 to about 45 lakh MT in 2011-12. Your Company
 is tying up with SSP Units for manufacturing and marketing 6 lakh MT of
 SSP to increase turnover and profitability. Your Company also intends
 to import and market complex fertilizers, water soluble fertilizers,
 SOP, Aluminium Sulphate, Zinc Sulphate and develop customised/fortified
 fertilizers like Boronated Suphala and Zincated urea.
 
 2.3.0 The Fertilizer Industry:
 
 The Nutrient Based Subsidy (NBS) scheme for decontrolled phosphatic and
 potassic fertilizers has come into effect from 1.4.2010 as was informed
 in the previous report. The scheme has been revised w.e.f 1.4.2011. The
 main features of the NBS scheme are as under:
 
 i. Revised NBS would be applicable for DAP, DAP-lite, MOP, MAP, TSP,
 AS, 15 grades of complex fertilizers and SSP.
 
 ii.  Inclusion of''S'' as a nutrient.
 
 iii.  Fixed subsidy per kg for each nutrient for the year.
 
 iv. Any variant of fertilizer specified above, with secondary and micro
 nutrients would also be covered under NBS.  Secondary and micro
 nutrients would be eligible for separate subsidy.
 
 v. Fortified fertilizers with Boron will be eligible for Rs. 300/MT
 additional subsidy and fertilizers with fortified zinc would be
 eligible for Rs. 500/MT.-
 
 vi.  MRP can be fixed by the Company.
 
 vii. 20% of the price decontrolled fertilizers produced/ imported will
 be under movement control under ECA.  DOF will regulate the movements
 to bridge gaps in supply to underserved areas.
 
 viii. All subsidised fertilizers, except Urea, are brought under Open
 General Licence.
 
 ix. Freight reimbursement for fertilizers under NBS is limited to rail
 freight at actuals and road freight at normated levels for direct
 despatches from plant/ports to districts upto a maximum lead of 700 km.
 In case of SSP, a lumpsum reimbursement of Rs. 200/MT will be paid.
 
 Your Company welcomes the policy and the modifications made as it
 affords a challenge ,to improve the market share and enables your
 Company to market the products in a dynamic scenario.
 
 2.4.0 Strength and Weakness:
 
 2.4.1 Strengths:
 
 Your Company''s strength lies in its skilled manpower, high Brand Equity
 for the Products manufactured such as Ujjwala, Suphala, Microla, Biola,
 and Sujala. The wide spread marketing network ensures that your Company
 - reaches the products to all parts of the country. The Farmers''
 Training Institute and R&D Centre ensure that quality services are
 provided to the farmers/ dealers by educating them and providing inputs
 for better crop realisation. Your Company has a wide portfolio of
 chemical products and can withstand difficult economic situations by
 adopting optimal mix of production. The well maintained plants and
 equipment ensure uninterrupted production and distribution of goods,
 
 2.4.2 Weaknesses:
 
 The Plants have been in operation for a very long time, some of them
 since 1965 by carrying out regular upkeep, maintenance and
 up-gradation. The complex fertilizers are based on imported raw
 materials which can face severe volatility in raw material prices and
 foreign currency exchange rate affecting the profitability of the
 company.
 
 2.4.3 Opportunities:
 
 Due to your Company''s good reputation, several opportunities exist,
 abroad, for Collaborations / Diversification in manufacturing and,
 mining of raw materials and marketing of varieties of products. The
 increased availability of feedstock gas would permit for undertaking
 major expansion at Thai. Alternate feedstock like Coal gasification
 gives an opportunity for undertaking Fertilizer Projects in other parts
 of the country. All these opportunities would lead to substantial
 increase in the turnover of your Company by marketing varieties of
 fertilizers. Clean Development Mechanism (CDM) activities enable
 realization of Carbon Credits. Experienced and Skilled Manpower of your
 Company has been in demand for rendering O&M service in India and
 abroad.
 
 2.4.4 Threats:
 
 Manufacturing and marketing of Fertilizers is the core business of your
 Company. Agro-climatic conditions have a large effect on the
 performance of your Company. In the recent years, there has been high
 volatility in the prices of raw material and creation of scarcity
 impeding production and marketing plans. The chemicals business is
 highly susceptible to cut throat global market competition.
 
 2.5.0 Risk Management:
 
 Your Company has put in place Risk Management System, with the
 objective of having a balanced approach towards business plan and to
 mitigate the associated risks through better management practices,
 resulting in greater degree of confidence amongst various stakeholders.
 Risks associated with operations, Environment, Finance, Human Resource,
 legal, Information security etc and the degree of impact financially,
 its likely effect on the assets, facilities and third parties are
 assessed regularly.  In order to mitigate losses arising out of
 perceived risks, the procedures being adopted to contain the risks, as
 also the practices adopted during emergencies, including the
 communication system and mode of disseminating information are
 periodically reviewed and updated to minimise the impact on the
 Company.
 
 The profitability is, susceptible to the input costs of major raw
 materials, such as Rock Phosphate, Sulphur, DAP, MOP, MAP etc. and
 hence your Company has been developing alternate source of raw
 materials to reduce the risk of dependency. To safeguard against major
 breakdown at the data centre, your Company has installed another server
 at a separate site, which replicates the data on production server and
 can be available to ERP users.
 
 2.6.0 MAJOR EXPANSION AND DIVERSIFICATIONS:
 
 In line with its Mission, your Company has taken up several ambitious
 projects for growth. Besides these large capital outlay projects, your
 Company has also taken up projects for enhancing energy efficiency,
 increasing production and improving reliability in its existing plants.
 The projects which have been implemented, being implemented and are
 under active considerations are listed below:
 
 2.6.1 Projects implemented:
 
 2.6.1.1 Revamp of Methanol Plant:
 
 The existing Methanol plant was revamped for increasing the capacity
 from 180 MTPD to 242 MTPD and to bring down the energy consumption from
 9.094 to 7.9632 Gcal /MT of Methanol at a cost of Rs. 137 Crore. The
 plant is running on sustained basis and has been achieving desired
 results.
 
 2.6.1.2. Ammonium Nitro Phosphate (ANP) Granulation Project:
 
 Your Company has taken up ANP Granulation Project of 900 MTPD capacity
 at a cost of Rs. 80.49 crore by using the slurry prepared in the wet
 section (front end) of ANP.  Subsequent to trial production, and after
 overcoming initial problems, plant was stabilized and is running on
 consistent load. It is envisaged to revamp wet section of the plant to
 improve nutrient & and energy efficiency.
 
 2.6.1.3 Clean Development Mechanism (CDM):
 
 Your Company has successfully implemented Nitrous Oxide abatement
 project, which is a green house gas, in its HP and MP Nitric Acid
 Plants leading to generation of Carbons Credits. This project has been
 registered with UNFCCC and your Company has received the first tranche
 of 1,55,115 CERs (Certified Emission. Reduction) for MP Nitric Acid
 plant in January 2011 after due verification of the project.
 
 2.6.1.4 Rapidwall Project at Trombay:
 
 Rapidwall Project has been set up at a cost of Rs. 81.10 crore, to
 utilize Phospho Gypsum produced as by-product in Trombay, with
 Australian technology from M/s. Rapidwall Building Systems Pty. Ltd.
 Australia (RBS).  Rapidwall is a revolutionary and environmental
 friendly, load-bearing, prefabricated glass fiber reinforced walling
 system with broad construction applications. More than 500 wall panels
 have been manufactured at Trombay. As required, sample panels have been
 successfully tested at NT Madras and the product has also received ''in
 principle'' approval from Building Material Technology Promotion Council
 (BMTPC) under the Ministry of Housing and Urban Poverty Alleviation.
 Apart from Wall panels, the plant also manufactures Plaster which is
 being marketed vigorously. Your Company is taking various steps for
 marketing of all products by entering into Memorandum of Intent with
 large project developers and also gaining foothold in retail market.
 This has given the company, confidence regarding sustained demand in
 near future.
 
 2.6.2 On going Projects:
 
 2.6.2.1 De-bottlenecking of Thai Plants:
 
 Thai Ammonia Revamp Project is being implemented to enhance capacity of
 existing Thai Ammonia Plants from 2 x 1500 MTPD to 2 x 1750 MTPD and
 reduce specific energy consumption to 8.15 Gcal/MT of ammonia.
 Simultaneously Thai urea plant is also being revamped, wherein the
 capacity of one of the urea streams will be increased to 2300 MTPD so
 as to convert the entire ammonia into urea and achieve urea production
 of 6015 MTPD. The total project cost is Rs. 488.75 Crore.  The revamped
 ammonia plant will be commissioned by December 2011 and the Urea plant
 by 2012.
 
 2.6.3 Projects on the Anvil:
 
 2.6.3.1 Additional Ammonia Urea project at Thai
 
 Your Company has plans to expand the capacity of urea at Thai by
 setting up one single stream ammonia plant of capacity 2200 MTPD and
 one single stream urea plant of capacity 3500 MTPD at the existing
 site, at an estimated project cost of Rs. 4400 crore. The selection
 process for lumpsum turnkey contractors (LSTK) for main plants has been
 started and your Company has received four bids from international
 parties/consortium for the project.  Draft EIA report has been prepared
 and further action is being undertaken for obtaining environment
 clearance.  Other pre-project activities, including preparation of
 detailed feasibility report, are underway. The project when
 commissioned will be a significant step towards bridging the increasing
 demand supply gap of urea in the country.
 
 2.6.3.2 Single Super Phosphate project at Thai
 
 Your Company has envisaged to set up Single Super Phosphate (SSP) plant
 at Thai to manufacture 5 lakh MT/ year SSP. The project cost would be
 Rs. 278 crore.  Feasibility of the project is being examined and the
 project is likely to take 24 months to complete from the zero date.
 
 2.6.3.3 Coal Based Fertilizer Plant at Talcher:
 
 Under the scheme of revival of sick Fertilizer Units, your Company has
 been nominated by the government to be the lead partnertto revive FCI
 Unit at Talcher, Orissa through Coal Gasification route as the
 feedstock.
 
 Your Company, along with Coal India Limited (CIL) and GAIL is
 contemplating to set up a fertilizer complex, comprising of 2500 MTPD
 ammonia plant, 3500 MTPD Urea plant, 800 MTPD Nitric Acid and 1000 MTPD
 ammonium nitrate plant. Coal for this will be made available by CIL
 through its subsidiary Mahanadi Coal Fields which is. located nearby.
 The front end Coal Gasification will be set up on Build, Own, Operate
 (BOO) basis. The ammonia synthesis, urea, nitric acid and ammonium
 nitrate plants will be built on lumpsum turnkey basis for which
 prequalification bids have been invited. Project capital cost involved
 is approx. Rs. 8000 Crore.
 
 2.6.3.4 Gas based urea plant in Ghana:
 
 Ghana has recently discovered oil and gas in its offshore Jubilee
 Fields. Ghana Government intends to go for value addition to this
 natural resource through setting up of downstream processing facilities
 including a fertilizer plant. Governments of Ghana and India have
 signed a Memorandum of Understanding (MoU) for setting up the
 fertilizer project to produce about 1 million metric tons of Urea
 fertilizer.
 
 Your Company has been nominated by Government of India to take a lead
 role for development of the fertilizer project. The proposed grass-root
 project would consist of an ammonia plant of 2000 MTPD capacity and a
 Urea plant of 3500 MTPD capacity. The site for the project has been
 identified and pre-feasibility report has been submitted for
 consideration by the respective governments. The project is likely to
 be commissioned in 2016-17. Discussions are being held to finalise
 pricing and quantity of gas to be supplied to the project.
 
 2.6.3.5 Phosphatic Fertilizer Project in Saudi Arabia
 
 Your Company is exploring the opportunity of participating in
 Phosphatic Fertilizers project in Saudi Arabia, being undertaken by
 Ma''aden at Al Khabra mines at a project cost of US.0 billion. Ma''aden
 is willing to offer equity shares upto 30% to Indian Companies. If the
 project fructifies it would help in tying up for Phosphatic supply,
 apart from the benefit of being a shareholder of the venture.
 
 2.6.3.6 Coal Based Fertilizer Plant In Indonesia:
 
 As per the Memorandum of Understanding signed between governments of
 India and Indonesia a study is to be conducted for setting up a coal
 based fertilizer plant in Indonesia. Your Company has been nominated to
 conduct the study from Indian side and action has been initiated in
 this direction.
 
 Apart from the above, your Company is working on development of several
 other projects including development of Port based infrastructure.
 
 2.7 Subsidiary and other Joint Venture Companies:
 
 2.7.1 FACT-RCF Building Products Ltd., Kochi
 
 Your Company has formed a Joint Venture Company with Fertilizers and
 Chemicals Travancore Limited (FACT) by incorporating FACT-RCF Building
 Products Ltd to set up a Rapidwall project at Kochi.  Both your Company
 and FACT haye 50:50 equity holding in the Company.  The plant will use
 gypsum available with FACT to produce load bearing wall panels, wall
 plaster and wall putty through Rapidwall technology.  The plant has
 been mechanically completed and will be soon commissioned in the
 current financial year.
 
 2.7.2 Urvarak Videsh Limited
 
 The JV Company is exploring the possibility of revival of old unit of
 HFCL at Barauni and has engaged PDIL for consultancy work for EIA and
 technology selection. The JV Company would decide further course of
 action based on feasibility of the project. The Company has been
 incorporated with an authorised capital of Rs. 5 crore and has a paid
 up capital ofRs.15 lakh of which your Company''s contribution is Rs. 5
 lakh. If the promoters do not find that the objectives for which the
 Company was incorporated can not be achieved, action would be taken to
 wind up the Company.
 
 2.7.3 Rajasthan Rashtriya Chemicals & Fertilizers Ltd, Jaipur
 
 The Joint Venture Company incorporated to undertake the project for
 manufacturing 850 MTPD of DAP has not been functional as the promoters
 are yet to take decision on investment in the project. As it is
 unlikely that the promoters would go ahead with the project, the
 promoters are likely to take steps to wind up the JVC.
 
 2.7.4 RCF HM Construction Solutions Pvt Ltd.
 
 Your Company has incorporated a 50:50 Joint Venture Company with First
 Future Properties Pvt. Ltd for marketing the Rapidwall products with an
 authorised .  capital of Rs. 5 crore and paid up capital of Rs. 10
 lakh.  Considering the nature of products and technical skills
 available, your Company is confident of marketing the products by
 entering into MOUs/long term supply contracts with the
 builders/developers. Your Company is therefore contemplating to wind up
 the JVC.
 
 2.7.5 Consolidated Statement
 
 Consolidated financial statement of your company with subsidiary
 company and other Joint venture companies and statement under section
 212'' in respect of the subsidiary company are attached to the accounts.
 
 2.8.0.  RESEARCH AND DEVELOPMENT:
 
 Your Company has taken up several Research and Development projects,
 some of which taken up for commercial scale design and engineering, are
 as under:
 
 2.8.1 CHEMICAL DIVISION
 
 2.8.1.1 Study to recover Process water from present R.O.  reject water
 in Sewage Treatment Plant (STP).
 
 R&D division of your Company carried out experiment to recover process
 water from R.O. reject water of STP and has successfully recovered
 usable process water.  The scheme suggested by R&D is in the process of
 implementation and your Company would recover about 3000 m3/day of
 Process water from RO reject water.
 
 2.8.1.2.  Fortified fertiliser NPK 15:15:15 with Boron (0.2% )
 
 Boronated Suphala (NPKB 15:15:15:0.2), a new range of NPK Fortified
 Fertilizer, has been successfully developed on laboratory scale. Field
 Trials on certain crops are being carried out at Agriculture
 Universities such as Mahatma Phule Krishi Vidyapeeth* Rahuri & Dr.
 Punjabrao Deshmukh Krishi Vidyapeeth, Akola.
 
 This product will give value addition to the existing NPK fertilizer
 and it will be beneficial, especially, in the boron deficient regions.
 Production on commercial scale is being undertaken shortly in the
 existing Suphala production plant to produce (15:15:15:0.2) Boronated
 Suphala.
 
 2.8.1.3.  Study undertaken to find cost effective substitute for
 proprietary anti-precipitating agent Kemfert in Sujala 19:19:19.
 
 Anti-precipitating agent is being used in Sujala 19:19:19 (drip grade)
 to overcome clogging of drippers during drip application. R&D division
 of your Company has undertaken a study to find suitable cheaper
 substitute for the anti-precipitating agent. Mono Sodium salt of
 Hydroxy Ethelene Di-phosphonic Acid (HEDP) which is readily available
 in market, is found to be suitable, cheaper and is giving having
 satisfactory performance.
 
 2.8.2 AGRICULTURE DIVISION
 
 2.8.2.1 Customized fertilizers
 
 Your Company is developing certain Customised Fertilizer grades for
 usage in Satara, Sangli, Pune, Solapur and Kolhapur Districts of
 Maharashtra. These formulations are crop and region specific customized
 formulations, developed in two formats viz. 100% water soluble
 fertilizer for drip and foliar application and Granular product for
 soil application. The agronomic efficacy studies on these grades are in
 progress at Mahatma Phule Krishi Vidyapeeth, Rahuri Agriculture
 University.
 
 2.8.2.2.  Liquid Bio-fertilizer
 
 Liquid Bio-fertilizers (phosphate solubilizers) are formulations,
 without any carrier, with increased shelf life. The liquid
 bio-fertilizer has several advantages, over carrier (lignite) based
 product, such as application through seed, soil, drip irrigation, flood
 irrigation, sprinklers, spray against only seed and soil application
 for lignite based biofertilizers.
 
 The product has shelf life of 2 years in lab conditions (1.5 yrs in
 field condition), in comparison to 6 months of lignite based
 bio-fertilizer.
 
 Laboratory studies as well as field trials have been successfully
 completed and this product will soon be commercialised.
 
 2.9.0 CONSERVATION OF ENERGY:
 
 Your Company undertook several steps for conserving energy. These
 included several modifications in the plants which have resulted in
 significant reduction in the energy consumption. Some of the measures
 undertaken are as follows:
 
 In Thai unit several measures undertaken such as Replacement of
 Synthesis gas compressor turbine rotor for Ammonia Line I, Relocation
 of HP section pressure control valve outlet gas to Medium Pressure
 decomposer, conversion of existing radar type level transmitter to
 purge type for Hydrolyser, conversion of unit -11 & 31 condenser
 cooling water side from double pass to single pass, installation of gas
 cooler, resulted in considerable saving in energy.
 
 In Trombay unit, Methanol plant has been revamped to reduce energy
 consumption. Apart from this, several other measures such as
 installation of vapour absorption machine in Ammonia I, replacement of
 old motors with energy efficient LT motors, installation of variable
 frequency Drives for slurry pumps, installation of high capacity reject
 water pumps in ETP and several other measures have been undertaken
 which resulted in saving of energy.
 
 The particulars with regard to Conservation of Energy, Technology
 Absorption, Foreign Exchange outgo as required under Section 217 (i)
 (e) of the Companies Act, 1956 are enclosed as Annexure I.
 
 3.0.0 ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL:
 
 Your Company is dedicated to improve environmental performance through
 continual improvement and is going beyond satisfying all stipulated
 requirements laid down by the statutory authorities for environment
 management and pollution control.
 
 With an aim to sustain the operations in an environment friendly
 manner, your Company established ISO 14001 compliant Environment
 Management System (EMS) at its two manufacturing units. The Systems are
 constantly upgraded and the three separate systems, namely Quality
 Management System (ISO 9001:2000), Environment Management System (ISO
 14001:2004) & Occupational Health and Safety Assessment Series (OHSAS
 18001:2007), are all brought under Integrated Management System.
 Regular internal audits and Management Reviews are being carried out to
 ensure compliance and continually improve the system.
 
 Measures taken to conserve water have yielded not only savings but also
 have further improved the environmental management. The state of art
 Effluent Treatment plants and the Sewage Treatment plants at Trombay
 have ensured that the environment in and around the Units is fully
 protected. Various schemes are implemented to reduce wastage of the
 scarce natural resources. The waste streams from the plants are
 recycled/reused for useful purpose. Sludge generated in Effluent
 Treatment Plant, Sulphur Sludge Generated in Sulphuric Acid plant,
 waste streams of effluents from complex fertilizer plants are recycled
 back in the processes. The integrated Effluent Treatment Plant ensures
 that whatever effluent is discharged from the factory meets the
 statutory requirements laid down by the Pollution Control Board.
 
 In Trombay Unit of your Company, New granulation technology is adopted
 in Ammonium Nitro phosphate plant to reduce dust emission. Capacity of
 Sewage treatment plant is increased with installation of 5th RO.  Your
 Company has adopted the most effective system of environmental
 management at its Trombay complex by process up-gradation, adoption of
 cleaner technologies in new plants, suitable treatment of effluent and
 continuous monitoring of emission & ambient air quality.
 
 To check the effectiveness and compliance to emission regulations,
 monitoring network has been incorporated.  Apart from Stack monitors,
 which continuously monitor the emissions, four fixed ambient air
 quality monitoring stations monitor ammonia, NOx, S02, Particulate
 matter (PM10 & PM2.5)& metrological parameters.
 
 During the process of converting raw materials into finished products,
 certain residual chemicals are formed, which are either recycled or
 converted into harmless chemicals as far as possible, before
 discharging them into the atmosphere, giving due importance to cleaner
 environment.
 
 4.0.0 PRINCIPLES OF GLOBAL COMPACT:
 
 Your Company is a member of United Nations Global Compact and fully
 supports the Ten Principles in the areas of human rights, labour and
 environment which are derived from the earlier declarations by United
 Nations,
 
 ILO and other international organisations. Your Company has. posted a
 detailed write-up on its website www.rcfltd.  com in this respect.
 
 5.0.0 CORPORATE SOCIAL RESPONSIBILETY (CSR) ACTIVITIES:
 
 5.1.1 Being a conscientious corporate citizen, your Company has
 developed its corporate philosophy imbibing self regulating mechanism
 to ensure that it''s operations benefit all stake holders. Public
 Interest is a deliberate inclusion honouring Triple bottom line
 approach - people, planet and profit.
 
 As stated in para 4.0.0, your Company is a member of United Nations
 Global Compact and supports the ten Principles of human rights, labour
 and environment.
 
 As a responsibility to the society around its business areas, your
 Company undertakes several activities aimed for the benefit of needy
 and also for general good. During the financial year 2010-11, your
 Company carried out the following activities under CSR policy and spent
 about Rs. 7 crore:
 
 5.1.2 Education:
 
 5.1.2.1 Running of Schools:
 
 Your Company runs schools, both at its Thai and Trombay units to impart
 quality education from Nursery to 10th Standard. The schools admit
 children from nearby community. Instructions are imparted in Marathi,
 Hindi and English medium. Your Company has provided school building in
 the Company''s residential colonies at Thai and Trombay and undertakes
 its upkeep, maintenance and bears the deficit expenditure incurred by
 the schools. The schools are entrusted to reputed Educational
 Institutions.  During the year, your Company spent about Rs. 307 lakh
 on this activity.
 
 5.1.2.2 Scholarship to meritorious students:
 
 Your Company encourages students from SC/ ST/ OBC communities by
 offering them scholarship for pursuing higher studies. During the year
 your Company spent Rs. 2.30 lakh towards scholarship.
 
 5.1.2.3 Farmers'' Education:
 
 Your Company imparts farming education to increase productivity through
 intensive and integrated extension activities in the field of
 Agriculture, recommending balanced use of fertilizers and
 simultaneously to extend the services as promoter, activator and
 organiser of various socio-economic and educational activities to
 improve the quality of life of various, rural masses particularly
 small, marginal and SC/ST families.
 
 5.1.3 Supply of drinking water to the villages:
 
 Your Company has been providing drinking water since more than 20 years
 to seven villages around Thai unit through pipelines laid down from the
 water reservoir in the unit. During the year your Company spent about
 Rs. 78 lakh towards the same.
 
 5.1.4 Village Adoption:
 
 Your Company provides support to needy people by providing tools,
 tackles and training to enable them learn self sustaining vocations and
 improve their economic capabilities. An amount of Rs. 10 lakh is spent,
 on imparting training for improving their skills, during the financial
 year.  Your Company sponsored games and sports such as - Kabaddi, Kho
 Kho etc by spending an amount of Rs. 37 lakh.
 
 5.1.5 . Chembur Green Project:
 
 Launched to establish greenery in the eastern suburb of Mumbai, your
 Company has grown and brought back the green forestry amidst concrete
 jungle. The development of traffic islands, kitchen gardens,
 exhibitions, Rose shows and other activities in schools and colleges
 have increased the environment consciousness among the citizens. Your
 Company continues distribution of free saplings and rendering advice to
 various co-op. societies and also to individuals. Your Company also
 introduced organic manure from urban waste in the year so as to protect
 environmental degradation of soil.
 
 5.1.6.  Service to Farmers:
 
 5.1.6.1 Advice on Soil nutrients:
 
 Your Company attaches special importance to undertaking Soil
 diagnostics to advise farmers about use of proper dosage of fertilizers
 in order to optimize soil productivity. Over 70,000 soil samples were
 analyzed and recommendations given through the five static and six
 mobile soil testing laboratories.
 
 5.1.7 Farm practices:
 
 Your Company continues to have grass root contact with farmers to
 disseminate knowledge of proper farm practices to enhance their farm
 income. In this regard, your Company undertook crop specific
 development programs depending on the State/area. Your Company has
 established several Farmers'' Services Centres for providing services
 such as soil sample collection, arranging farmers meeting, film shows,
 and exhibitions and for providing general guidance in the fields of
 farming.  Several farmers''/dealers'' training programmes were conducted
 during the year at the Company''s two Farmers Training Institutes.
 
 5.1.7 Other activities:
 
 5.1.7.1 Your Company is constructing at a cost of Rs. 93 lakh a mini
 sports stadium, alongwith accessories and facilities, in Jaleshwar,
 Balasore district to encourage sports and culture of the area. The
 construction would be completed by December 2011. The total amount
 spent during the year isRs.61.70 lakh.
 
 5.1.7.2 Your Company has also undertaken construction of 15 Number of
 Bus shelters, at Madurai city and 30 Nos.  in Madurai Rural Area at a
 cost of Rs.152.40 lakh for the benefit of general public.
 
 6.0.0 HUMAN RESOURCES:
 
 6.1.0 Training and Development:
 
 Human Resource Development has always been the cornerstone of your
 Company and this year''s activities have also been special and focussed.
 
 Exclusive Training & Development initiatives were successfully carried
 out to enhance General Management Skills of the employees in Marketing,
 Finance, Commercial and Health Services disciplines. Besides this,
 comprehensive Safety Management Programmes were carried out for
 officers in Technical disciplines.
 
 Activities were also focused on strengthening and effective
 implementation of Quality Management Systems, Environment Management
 Systems, Occupational Health & Safety Systems and 5-S systems.
 
 Training & Development programmes were conducted, in-house, for the
 employees of your Company at various levels.
 
 The Training department contributed to the development of other
 Organisations by accepting special assignments to train
 employees/students of industrial and academic institutions. HRD has
 been contributing in selection and grooming of young talents, imparting
 domain knowledge, developing skills and mind set towards achieving
 professional excellence.
 
 6.2.0 Industrial Relations:
 
 Your Company maintained cordial Industrial Relations with all its
 employees. All the issues are settled through regular discussions,
 meetings and. dialogues with the employees. Your Company has 4238
 employees comprising of 1541 officers and 2697 workmen as on 31st
 March, 2011 compared to 4334 employees (1589 officers and 2745 workmen)
 as on the corresponding date of the previous year.
 
 6.2.1.  Welfare and Sports
 
 Your Company undertakes several welfare schemes like education,
 medical, transport, housing etc., according to the needs of the
 employees. In regards to sports, your Company is a prominent patron and
 sponsored various sports events. Your Company''s Football, Cricket,
 Hockey, Kabaddi and other teams continue to show excellent performance
 at District, State and National levels and have brought laurels to your
 Company by winning several prizes.
 
 6.2.2.  Welfare / Employment opportunity to weaker section:
 
 The guidelines in respect of reservation in recruitment and promotion
 of SC/ST, OBC, Ex-servicemen and Persons with Disabilities are followed
 by your Company. Your Company has 593 Scheduled Caste (SC), 261
 Scheduled Tribe (ST) and 339 OBC employees on its rolls.
 
 During the year, your Company recruited 70 persons, including 2 persons
 with physical disability, on regular employment. Your Company also
 recruited 4 Operator Trainees, 9 Steno Trainees and 16 Technical
 Trainees.  Due representation to SC/ST/OBC was given in recruitments.
 
 Your Company is committed to the welfare of the backward classes in
 general and SC/ST employees in particular. Regular meetings are held
 with SC/ST Employees Welfare Association to address grievances, if any,
 and providing guidance for development.
 
 Medical Camp is organized every year at Chaitya Bhoomi, Dadar on 6th
 December, on the occasion of ''Mahaparinirvan Day''. Financial assistance
 for making, arrangement for medical camp and for medicines along with
 the vehicles and Doctors was made available by the Company.
 
 Your Company''s Thai Unit continued to provide various amenities like
 water, road for the nearby villages e.g. Thai, Navgaon, Boris, Gunjis
 etc. where the majority of the population belongs to the SC/ST
 categories. Scholarships were given to meritorious students of SC/ST
 community in the nearby village of Thai.
 
 The following activities were also taken up by your Company:-
 
 a) Training programmes were conducted for farmers at Company''s
 Institute at Nagpur and Thai. Large number of SC/ST farmers have
 undergone training in these programmes.
 
 b) Your Company''s Marketing Department gives special consideration in
 enrolment of dealers belonging to SC/ ST category. A large number of
 dealers belonging to SC/ ST have already been appointed.
 
 7.0.0 OFFICIAL LANGUAGE POLICY:
 
 Your Company has fully endeavoured to implement the provisions of
 Official Language Act 1963 and the policy of the Government. Publicity
 material and literature for employees and farmers is made available in
 Hindi and other regional languages.
 
 Your Company was awarded the First prize by Mumbai Town Official
 Language implementation. Committee for excellence in implementation of
 Official Language Policy. Your Company''s House Magazine, Darpan was
 also awarded first Prize in House Magazine competition organised by
 Mumbai Town Official Language Implementation Committee for the year
 2010-11.
 
 9.0.0 INTERNAL CONTROL SYSTEM:
 
 Your Company has a well defined Internal Control System, adequate and
 commensurate with the size and nature of its business, comprising of an
 in-house Audit Department, which conducts internal audit of various
 operational and financial matters on on-going basis. Internal Audit
 group consists of adequate number of financial and technical personnel.
 The recommendations and observations of the Internal Audit Department
 are reviewed regularly by the Audit Committee constituted by the Board
 of Directors.  The performance of your Company is regularly monitored
 by the Board of Directors.
 
 Your Company has an effective budgetary control mechanism in place both
 in respect of capex and revex to take care of the detailed capex and
 operational budget.  Appropriate monitoring mechanism to compare the
 actual performance with the budget ensures that necessary review is
 periodically undertaken.
 
 10.0.0 COST AUDIT
 
 As per the Government''s directive, your Company''s Cost Records in
 respect of manufacture of Fertilizers and Sulphuric Acid for the year
 ended 31st March, 2011 are being audited by Rohit Vora & Co. and OR.
 Musib & Associates, firms of Cost Auditors. The Cost Auditors are
 likely to complete the audit by 31st July, 2011.
 
 11.0.0 DIRECTORS'' RESPONSIBILITY STATEMENT:
 
 The Companies Act, 1956 requires the Board of Directors of your Company
 to prepare accounts for each financial year giving a true and fair view
 of the state of affairs of the Company and the profit or loss of the
 Company for that period.
 
 Your Directors state that:
 
 i] in preparing the annual accounts, the applicable accounting
 standards have been followed,
 
 ii] the accounting policies adopted have been consistently applied and
 wherever necessary, made judgements and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of your Company at the end of the financial year and of the profit or
 loss of the Company for the year,
 
 iii] proper and sufficient care has been taken for maintaining adequate
 accounting records in accordance with the provisions of the Companies
 Act, 1956 for safeguarding the assets of your Company and for
 preventing and detecting fraud and other irregularities; and
 
 iv] the annual accounts have been prepared on going concern basis.
 
 12,0.0 CORPORATE GOVERNANCE:
 
 As per Clause 49 of the listing Agreement with the Stock Exchanges, a
 separate section on Corporate Governance along with a certificate of
 Compliance is annexed and forms part of this report.
 
 13.0.0 CAUTIONARY STATEMENT:
 
 Statements in the Management Discussion and Analysis describing the
 Company''s objectives, projections, estimates and expectations may be
 ''forward looking statements'' and actual results may or may not be in
 accordance therewith. Your Company''s performance is dependent on
 several external factors such as downtrend in the agriculture, below
 normal monsoon, significant changes in economic environment, Government
 Policies, fluctuations in prices of raw material and finished products
 and also their availability, etc. which could adversely affeGt the
 operations of your Company.
 
 14.0.0 DIRECTORS:
 
 Government of India appointed Shri Sham Lai Goyal, IAS, Joint Secretary
 Department of Fertilizers, Ministry of Chemicals and Fertilizers as
 additional Director in place of Shri Deepak Singhal. The contribution
 of Shri Deepak Singhal to your Company has been immense. His guidance,
 suggestions and advice has greatly benefited the. Company. Your
 Directors place on record their appreciation of the contribution of
 Shri Deepak Singhal to your Company. Notice under Section 257 of the
 Companies Act has been received proposing the candidature of Shri Sham
 Lai Goyal as
 
 Director of the Company.
 
 As per Section 256 of the Companies Act, Shri Manoj Priya, Director,
 retires by rotation at the ensuing Annual General Meeting and being
 eligible, offers himself for reappointment.
 
 15.0.0 AUDITORS:
 
 The Comptroller and Auditor General of India (CAG) has appointed, M/s.
 JCR & Company and M/s GD Apte & Co., as Joint Statutory Auditors of
 your Company for the Financial Year 2010-11. The Auditors would be
 retiring at the conclusion of the Thirty third Annual General Meeting.
 
 The Statutory Auditors for the Financial Year 2011 -12 will be
 appointed by the CAG. However, their remuneration is to be fixed at the
 AGM by the members.
 
 16.0.0 ACKNOWLEDGMENT:
 
 Your Directors wish to gratefully acknowledge the valuable guidance and
 continued support extended by Government of India and in particular,
 the Department of Fertilizers and the Office of Fertilizer Industry Co-
 ordination Committee (FICC), Railways, members of MOU Task force, and
 other Central Government departments and Agencies.
 
 The Board also wishes to acknowledge with sincere gratitude, the help
 and unstinted support from the State Governments, MSEB, MIDC, various
 media, Municipal authorities, Maharashtra Pollution Control Board,
 Bankers to your Company, Financial Institutions, Dealers and Customers.
 
 The Board also wishes to place on record the positive suggestions and
 guidance provided by the Statutory Auditors, Cost Auditors and the
 Office of the Principal Director of Commercial Audit.
 
 Last but not the least, your Directors take pleasure in placing on
 record their deep appreciation of the excellent contribution made by
 the employees of your Company at all levels, without which your Company
 would not have achieved such good performance.
 
                                    By order of the Board of Directors
 
 Place: Mumbai                                              R.G. Rajan
 
 Date : 10.05.2011                      Chairman and Managing Director