(I) BASIS OF PREPARATION
 
 The financial statements have been prepared under the historical cost
 convention on an accrual basis in compliance with all material aspect
 of the Accounting Standard Notified by Companies Accounting Standard
 Rules, 2006 (as amended), and the relevant provisions of the Companies
 Act, 1956. The accounting policies have been consistently applied by
 the Company and are consistent with those used in the previous year.
 
 (II) FIXED ASSETS
 
 Fixed assets are stated at cost, less accumulated depreciation and
 impairment loss, if any. Cost comprises the purchase price and any
 attributable cost of bringing the asset to its working condition for
 its intended use.
 
 (III) DEPRECIATION/AMORTISATION
 
 a) Depreciation on Fixed Assets is provided on Straight Line Method at
 the rates and in the manner specified in the Schedule XIV of the
 Companies Act, 1956, except in the case of the following, where
 depreciation is equally charged over the estimated useful lives.
 
 c) Depreciation on the Fixed Assets added/disposed off/discarded during
 the year is provided on pro-rata basis with reference to the month of
 addition/disposal/discarding.
 
 Continuous Process Plants are classified based on technical
 assessment, and depreciation is provided accordingly.
 
 (IV) IMPAIRMENT OF ASSETS
 
 The carrying amounts of assets are reviewed at each Balance Sheet date
 if there is any indication of impairment based on internal/external
 factors. An asset is treated as impaired when the carrying cost of the
 assets exceeds its recoverable value. An impairment loss, if any, is
 charged to the Profit and Loss Account in the year in which an asset is
 identified as impaired. Reversal of impairment losses recognised in
 prior years is recorded when there is an indication that the impairment
 losses recognised for the assets no longer exist or have decreased.
 
 (V) BORROWING COST
 
 Borrowing Costs attributable to acquisition and construction of
 qualifying assets are capitalised as a part of the cost of such asset
 up to the date when such assets are ready for its intended use.  Other
 borrowing costs are charged to the Profit and Loss Account.
 
 (VI) TRANSLATION OF FOREIGN CURRENCY ITEMS
 
 Transactions in foreign currency are recorded at the rate of exchange
 prevailing on the date of transaction. Foreign currency monetary items
 are reported using closing rate of exchange at the end of the year. The
 resulting exchange gain/loss is reflected in the Profit and Loss
 Account. Other non- monetary items, like fixed assets, and investments
 in equity shares are carried in terms of historical cost using the
 exchange rate at the date of transaction. Premium/Discount, in respect
 of forward foreign exchange contract, is recognised over the life of
 the contracts. Exchange differences on such contracts are recognised in
 the statement of Profit and Loss in the year in which the exchange
 rates change Profit/Loss on cancellation/renewal of forward exchange
 contract is recognised as income/ expense for the year.
 
 (VII) DERIVATIVE INSTRUMENTS
 
 The Company uses derivative financial instruments such as currency swap
 and interest rate swaps to hedge its risks associated with foreign
 currency fluctuations and interest rate. As per ICAI announcement
 regarding accounting for derivative contracts, other than covered under
 AS 11, these are mark to market on the portfolio basis and net loss
 after considering the offsetting effect on the underlying hedged item
 is charged to the income statement. Net gains are ignored.
 
 (VIII) INVESTMENTS
 
 Investments are recorded at cost on the date of purchase, which
 includes acquisition charges such as brokerage, stamp duty, taxes, etc.
 Current Investments are stated at lower of cost and net realisable
 value. Long term investments are stated at cost after deducting
 provisions made, if any, for other than temporary diminution in the
 value.
 
 (IX) INVENTORIES
 
 Raw materials, components, stores and spares are valued at lower of
 cost and net realisable value.  However, these items are considered to
 be realisable at cost if the finished products, in which they will be
 used, are expected to be sold at or above cost.
 
 Work-in-progress and finished goods are valued at lower of cost and net
 realisable value. Finished goods and work-in-progress include costs of
 conversion and other costs incurred in bringing the inventories to
 their present location and condition.
 
 Cost of inventories is computed on a weighted-average/FIFO basis.
 
 Proceeds in respect of sale of raw materials/stores are credited to the
 respective heads. Obsolete, defective and unserviceable inventory is
 duly provided for.
 
 (X) GOVERNMENT GRANTS
 
 Government Grants are recognised when there is reasonable assurance
 that the same will be received and all attaching conditions will be
 complied with. Revenue grants are recognised in the Profit and Loss
 Account. Capital grants relating to specific fixed assets are reduced
 from the gross value of the respective fixed assets. Other capital
 grants are credited to capital reserve.
 
 (XI) REVENUE RECOGNITION
 
 Sales are recorded net of trade discounts, rebates and include excise
 duty. Revenue from sale of products is recognised when the significant
 risks and rewards of ownership of the goods have passed to the buyer.
 Revenue is recognised to the extent that it is probable that the
 economic benefits will flow to the Company and can be reliably
 measured.
 
 Income from services are recognised as they are rendered based on
 agreements/arrangements with the concerned parties.
 
 Fertiliser price support under Group Concession and other Scheme of
 Government of India is recognised based on management''s estimate taking
 into account known policy parameters and input price
 escalation/de-escalation.
 
 Income from Certified Emission Reductions (CERs) is recognised at
 estimated realisable value on confirmation of CERs by the concerned
 authorities.
 
 Dividend income on investments is accounted for when the right to
 receive the payment is established.
 
 (XII) RETIREMENT AND OTHER EMPLOYEE BENEFITS
 
 (i) Defined Contribution Plan
 
 The Company makes defined contribution to Provident Fund, ESI and
 Superannuation Schemes, which are recognised in the Profit and Loss
 Account on accrual basis. Provident Fund contributions are made to a
 Trust administered by the Company and government administered Provident
 Fund. The interest rate payable to the members of the Trust shall not
 be lower than the statutory rate of interest declared by the Central
 Government under the Employees'' Provident Funds and Miscellaneous
 Provisions Act, 1952, and shortfall, if any, shall be made good by the
 Company.  The remaining contributions are made to a government
 administered Provident Fund towards which the Company has no further
 obligations beyond its monthly contributions.
 
 (ii) Defined Benefit Plan
 
 The Company''s liabilities under Payment of Gratuity Act, long term
 compensated absences and pension are determined on the basis of
 actuarial valuation made at the end of each financial year using the
 projected unit credit method except for short term compensated absences
 which are provided for based on estimates. Actuarial gains and losses
 are recognised immediately in the statement of Profit and Loss Account
 as income or expense. Obligation is measured at the present value of
 estimated future cash flows using a discounted rate that is determined
 by reference to market yields at the Balance Sheet date on Government
 bonds where the currency and terms of the Government bonds are
 consistent with the currency and estimated terms of the defined benefit
 obligation.
 
 (XIII) EMPLOYEE STOCK OPTIONS
 
 The stock options granted are accounted for as per the accounting
 treatment prescribed by Employee Stock Option Scheme and Employee Stock
 Purchase Guidelines, 1999, issued by Securities and Exchange Board of
 India and the Guidance Note on Accounting for Employee Share- based
 Payments, issued by the Institute of Chartered Accountants of India,
 whereby the intrinsic value of the option is recognised as deferred
 employee compensation. The deferred employee compensation is charged to
 the Profit and Loss Account on straight-line basis over the vesting
 period of the option.
 
 (XIV) TAXATION
 
 Tax expense comprises of current and deferred tax.
 
 Provision for current tax is made on the basis of estimated taxable
 income for the current accounting year in accordance with the Income
 Tax Act, 1961.
 
 The deferred tax for timing differences between the book and tax
 profits for the year is accounted for, using the tax rates and laws
 that have been substantively enacted as of the Balance Sheet date.
 Deferred tax assets arising from timing differences are recognised to
 the extent there is reasonable certainty that these would be realised
 in future.
 
 The carrying amount of deferred tax assets are reviewed at each balance
 sheet date. The Company writes down the carrying amount of a deferred
 tax asset to the extent that it is no longer reasonably certain or
 virtually certain, as the case may be, that sufficient future taxable
 income will be available against which deferred tax asset can be
 realised. Any such write-down is reversed to the extent that it becomes
 reasonably certain or virtually certain, as the case may be, that
 sufficient future taxable income will be available.
 
 In case of unabsorbed losses and unabsorbed depreciation, all deferred
 tax assets, are recognised only if there is virtual certainty supported
 by convincing evidence that they can be realised against future taxable
 profit. At each balance sheet date the Company reassesses unrecognised
 deferred tax assets.
 
 Minimum Alternative Tax (MAT) credit is recognised as an asset only
 when and to the extent there is convincing evidence that the Company
 will pay normal income tax during the specified period.  In the year in
 which the MAT credit becomes eligible to be recognised as an asset in
 accordance with the recommendations contained in Guidance Note issued
 by the ICAI, the said asset is created by way of a credit to the Profit
 and Loss Account and shown as MAT Credit Entitlement.  The Company
 reviews the same at each balance sheet date and writes down the
 carrying amount of MAT Credit Entitlement to the extent there is no
 longer convincing evidence to the effect that the Company will pay
 normal income tax during the specified period.
 
 (XV) OPERATING LEASES
 
 Leases, where significant portion of risk and reward of ownership are
 retained by the Lessor, are classified as Operating Leases and lease
 rentals thereon are charged to the Profit and Loss Account on a
 straight-line basis over lease term.
 
 Lease income is recognised in the Profit and Loss Account on a
 straight-line basis over lease term.
 
 (XVI) CONTINGENT LIABILITIES AND PROVISIONS
 
 Contingent Liabilities are possible but not probable obligations as on
 Balance Sheet date, based on the available evidence.
 
 Provisions are recognised when there is a present obligation as a
 result of past event, and it is probable that an outflow of resources
 will be required to settle the obligation, in respect of which a
 reliable estimate can be made.
 
 Provisions are not discounted to its present value and are determined
 based on best estimate required to settle the obligation at the Balance
 Sheet date.