4.0.

0 Principles of global impact: RCF 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 organizations. 5.0.0 CSR Activities: In line with the CSR philosophy adopted, RCF has undertook several activities aimed for the benefit of needy and for general good of the society like schooling of children near its plants, scholarship to meritorious students, mid-day meals, educating farmers, supplying drinking water to the villages, provide support to needy people in villages, Chembur green project. It has spent/committed about 12.48 crore for all the above mentioned activities. 6.0.0 Sustainable development: It has undertaken various activities for sustainable development and growth like development of road and infrastructure, clean environment, saving water, etc.
7.0.0 Vigilance: Careful watch is kept on various activities through regular and surprise inspections. System improvements and corrective action are taken wherever necessary. 8.0.0 Human Resources: RCF has adopted various HR policies and undertaken training and development of all employees. It has maintained healthy relationships with its employees. It has also undertaken various welfare schemes for employees and has also sponsored various sports events. It has given equal importance to the weaker sections of the employees belonging to SC/ST class. 9.0.0 Particulars of Employees: A statement providing the information as required under section 217 (2A) of the Companies Act, 1956 is attached to this report as Annexure II.

10.0.0 Official Language policy: RCF has implemented and always adhered to the Official Languages act 1963 and has made available its literature in Hindi and other regional languages. 11.0.0 Internal Control System: RCF has adequate and appropriate internal monitoring and control system which is periodically reviewed and updated. 12.0.0 Cost Audit: Information about who are the cost auditors and when would they be filing the same. 13.0.0 Directors Responsibility Statement: The directors have stated that all the accounting standards are adhered and all the policies are applied correctly. 14.0.0 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 is a part of the report. 15.0.0 Cautionary statement:

All the expectations and estimated are made for the future and all of them are dependent on external factors. So, the company has to keep that in mind too. 16.0.0 Directors: Information regarding which directors would be retiring and who all would be taking up their places. 17.0.0 Auditors: Information regarding the auditors is given in this section. 18.0.0 Acknowledgement: The director has acknowledged all the support given by the government of India and other department and agencies. Also acknowledges all the support and guidance provided by dealers, customers and all the people who are part of the company directly or indirectly. Interpretation of balance sheet as at 31st March, 2012: There has been an increase in reserves and surplus and in the non-current liabilities as well as current liabilities especially in short term borrowings and trade payables which has seen an increase of over 250% and over 100% respectively. There has been minimum increase in fixed assets except capital work in progress. There has been significant increase in current assets mainly due to cash and bank balances which have seen over 125% increase as compared to the last year. However, other current assets have decreased over 85% and stand at just 41.07 crores.

Interpretation of Profit and Loss for the year ended 31st March, 2012: Total revenue increased over 18% due to increase in revenue from operations. Total expenses increased over 17% as compared to the previous year. Profit before tax increased by 6% and profit for the year increased by just 2%. EPS increased from 4.44 to 4.52.

Company Profile About R.C.F. Ltd. Rashtriya Chemicals and Fertilizers Limited, a Government undertaking is one of the largest integrated Fertilizer and Industrial chemicals complex in our country. RCF is Indias third-largest fertilizer

producer. It makes urea and complex fertilizers and has a combined capacity of 25.1 lakh tones per annum (TPA). It also produces chemicals such as methanol, methylamines, nitric acid and ammonium bicarbonate. RCF also imports and sells urea, muriate of potash (MoP) and diammonium phosphate to support its product portfolio. It was incorporated on 6th March 1978 on
reorganization of the erstwhile Fertilizer Corp. of India (F.C.I. Ltd.) and National Fertilizer Ltd.(N.F.L. Ltd.).R.C.F. has always chosen the best available technology at the time of inception of every plant and followed it up with up gradation from time to time to improve energy efficiency and make the plants eco friendly. The first phase plants of Trombay unit, Ammonia, Urea, Complex fertilizer, Suphala(15:15:15), Sulfuric Acid and Nitric acid were commissioned in October November,1965 .In the second phase, Methanol Plant was put up in 1966 which was known as Trombay II diversification. This included addition of various chemical plants like ammonium Bicarbonate plant, Sodium Nitrate/ite Plant, Methylamines Plant, Concentrated Nitric Acid plant and Phosphoric acid plant. Further expansion in terms of Nitric Acid Plant, Complex Fertilizer Ammonium Nitrate Phosphate, additional Steam generation plants and a Water treatment Plant, Bagging Plant and an Effluent treatment plant was commissioned in 1979.This was termed as the Trombay IV expansion. In 1977another expansion V was planned which had one Ammonia and one Urea Plant with Associated Gas Compressor, steam

Generation, Water Treatment and Bagging Plant. This project was commissioned in 1981.R.C.F.s Thal Plant is located about 100 kms from Mumbai. It boasts of the worlds largest Ammonia Plant in a single unit and also the Asias largest Urea plant. The Plant capacity for Urea is 1.5 million Tons per year. Spread over an area of 600 acres, it has an investment of 890 crores which amounts to investments of over 5000 crores as per todays valuation. The Thal Plant was started on 17th Oct, 1984 Sector Analysis:

Fertilizer sector is very crucial for Indian economy because it provides a very important input to agriculture. The fertilizer industry in India has played a pivotal role in achieving self sufficiency in food grains as well as in rapid and sustained agriculture growth. India is the third largest producer and consumer of fertilizer in world after China and USA.The growth of the fertilizer highly dependent on government policies. The govt. exercise extensive controls on pricing, distribution and movement of fertilizers. There has been significant growth in the consumption of fertilizers in last three years due to overall good monsoon. The growth in NPK consumption was 9.50% in 2004-05, 10.60 % in 2005-06 and 8.40% per cent in 2006-07.The robust growth in consumption of domestic fertilizer production has remained in range, from last decades. Fertilizers output grew by a modest 6.50 per cent during 2006-07. The surge in fertilizers demand and stagnant to modest increase in production has widened the gap between consumption and production, causing larger dependence on imports. Therefore, the rising demand for fertilizers is providing ample scope for the companies in this sector to increase their production capacity and volumes thereby, driving the growth of fertilizer.

The fertilizer sector in last few months has shown some upward trend on the ground that government may come out with policies favoring the sector, which would provide boost to the companies in this sector. The sector looks attractive, as there can be unlimited opportunity to increase the volumes to fulfill the gap between supply and demand. The companies with huge capex plans are in queue just waiting for the nod of DoF(Department of fertilizers), and once the sector get ground clearance from DoF than one can see new highs for this sector as a whole. Therefore, there is a bullishness on the sector with the time horizon of 1-2 years and expect that sector would outperform the broad market in coming years. Outlook: RCF is set to receive an immediate boost from increased availability of natural gas It is to get 3.05 million cubic meters per day (mcmd) of gas from Reliance Industries, which will enable it to restart its 3.3-lakh-TPA urea plant at Trombay by this month-end and cut down naphtha consumption at its Thal plant. It will also restart its 3.2-lakh-TPA complex fertilizer plant at Trombay, which was closed due to an accident. RCFs Rapid wall project to produce low-cost pre-fabricated walling systems from gypsum produced at Trombay will start operations by end-April and the company is also

revamping its methanol plant to add more capacity and cut energy consumption. All these initiatives will raise output, raising turnover and boosting bottom line. Lower costs will bring down its subsidy bill. The lower dependence on government payments, typically made two to three months after actual production, will help cut RCFs short-term borrowings and interest costs. In the long run too, RCF has various expansion projects planned to drive growth. It has set up a joint venture with Rajasthan State Mines & Minerals (RSMML) to set up a 3-lakh-TPA diammonium phosphate (DAP) fertilizer plant in Rajasthan at a total estimated cost of Rs 900 crore. This project involves a 2:1 debt-equity ratio. The company is also de-bottlenecking its Thal plant to scale up urea manufacturing capacity to 20 lakh TPA by mid-2010 from 17 lakh TPA now. At Thal, it is also considering a 1.2-million-TPA brownfield urea expansion. RCF has also entered into a joint venture with Gail for a coal-bed-methane project and with National Fertilizers and KRIBHCO for revival of a defunct fertilizer plant. RCF is one of the leading manufacturers of urea in India with a share of 9.6% in the countrys production capacity. The companys market share is relatively higher at 13.73%, as it undertakes significant sale of imported urea. With significant increase in trading activities, the company has been able to bolster its urea market share in the last few years. With increasing area under irrigation and rise in cultivation of hybrid crops and horticulture varieties, the demand for urea is expected to remain strong. So, considering the above mentioned points the future of RCF looks bright. Note on Corporate Governance: The Company believes in corporate governance and hence maintains a high standard and always adheres to policies and framework which is part of the company philosophy. It complies with Clause 49 of the listing Agreement. Information regarding the board of Directors is given and also about the directors who are stepping down and the people who may replace them. Shri C.M.T. Britto has been appointed by the President of India as Director (Technical) for the company. All his educational and past details have been given. Information regarding which all directors have attend which all meeting during the past year has been provided. Audit Committee, Share holders Grievance Committee, share Transfer Committee, Remuneration Committee and Committee on Sustainable Development has been constituted. All these committees have company Directors as their member/heads according to the mentioned policy and they look into the matters accordingly. Information regarding the remuneration fee for the Directors is mentioned. The non-Executive
independent directors are not paid any remuneration. They are paid sitting fee for attending the Board Meetings/ Committee meetings as decided and approved by the Board. The non-executive government Directors are not paid any sitting fee for attending the meetings.

All Directors and senior management Personnel adhere to the code of conduct.
Chairman & Managing Director [CEO] and Director [Finance] [CFO] have certified to the Board of Directors, after reviewing the financial statements and cash flow statements Information is provided regarding the last 3 AGMs held and no special resolution has been passed in the same. Disclosures are mentioned like they adhered to all the rules and regulations given by SEBI, they have a whistleblower policy in pace, have complied to the requirements of Clause 49 and that none of the Directors hold shares in the Company. All the financial results were published in prominent newspapers as per the requirements of the Stock Exchange/SEBI. All the information is also displayed in the company website. Share price information is provided from April 2011 to March 2012 alongwith Sensex and value and the volume of the shares traded.

The calendar of events is provided alongwith the distribution of shareholding and the performance of RCF share prices is shown in comparison to broad based indices which shows an increase of 34.32% as compared to the previous year.

Auditors Report
1. 2. 3. 4. They have audited the attached Balance Sheet of Rashtriya Chemicals & Fertilizers Limited ('the Company'), as at 31st March 2012, and also the Statement of Profit & Loss and the Cash Flow Statement for the year ended. They conducted our audit in accordance with the auditing standards generally accepted in India. Auditors have attached Companies (Auditors Report) Order, 2003 as required by Section 227 of the Companies Act, 1956 They have drawn attention to various notes and have reported different information about the reports provided to the company.