a.  Basis of preparation of financial statements
 
 i) The financial statements have been prepared under the historical
 cost convention in accordance with the applicable accounting principles
 and comply with notified accounting standards as referred to in Section
 211(3C) and other relevant provisions of Companies Act 1956, subject to
 what is stated herein below, as adopted consistently by Company.
 
 ii) Company generally follows mercantile system of accounting and
 recognises significant items of income & expenditure on accrual basis.
 
 b.  Use of estimates
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles (GAAP) requires management to make
 estimates and assumptions that affect the reported amounts of assets
 and liabilities and the disclosures of contingent liabilities on the
 date of financial statements and reported amounts of revenue and
 expenses for that year. Actual result could differ from these
 estimates. Any revision to accounting estimates is recognised
 prospectively in current and future periods.
 
 c.  Fixed assets
 
 i) Fixed Assets are stated at cost of acquisition or construction less
 depreciation. In accordance with the provisions of AS-28 , if the
 carrying amount of fixed assets exceeds the recoverable amount on the
 reporting date , the carrying amount is reduced to the recoverable
 amount.The cost of fixed assets includes interest on borrowings
 attributable to the acquisition of the said fixed assets upto the date
 of commissioning of that assets.
 
 ii) The Company assesses at each balance sheet date whether there is
 any indication that any asset may be impaired. If any such indication
 exists, the carrying value of such asset is reduced to its estimated
 recoverable amount and the amount of such impairment loss is charged to
 profit and loss account. If at the balance sheet date there is an
 indication that a previously assessed impairment loss no longer exist,
 then such loss is reversed and the asset is restated to that effect.
 
 d.  Depreciation
 
 Depreciation on fixed assets is provided on straight line method at the
 rates and in the manner prescribed in Schedule XIV to the Companies
 Act,1956. Leasehold land has not been written off as lease agreement is
 yet to be executed.
 
 e.  Investments
 
 Investments are classified into current investments and long term
 investments. Long term investments are valued at cost or below cost
 whenever there is a diminution in the value thereof (scrip wise) of a
 permanent nature.
 
 f.  Inventories
 
 i.  The stock of finished goods, raw materials, stores & spares,
 packing materials and other consumables are valued at cost or net
 realisable value whichever is lower. Cost is either average cost or
 specific identification as applicable.
 
 ii.  Stock in process is valued at estimated cost.
 
 g.  Retirement benefits
 
 i.  Provident fund dues are accounted for on accrual basis.
 
 ii.  In respect of Gratuity Liability, the company has taken a group
 policy, premium whereof is paid annually to Life Insurance Corporation
 of India based on their actuarial valuation.Gratuity liabilities are
 funded and administered through Group Gratuity Scheme with Life
 Insurance Corporation of India.
 
 h.  Revenue recognition Sales:
 
 i) a) Sales are inclusive of freight & forwarding charges wherever
 recoverable from customers.
 
 b) Subsidy on sale of Single Super Phosphate fertilizers reveivable
 from Ministry of Chemicals & Fertilisers credited to subsidy account
 under the group head sales in the Profit & Loss Account at the time of
 sale.
 
 ii) Revenue in respect of insurance/other claims, interest etc.  is
 recognised only when it is reasonably certain that the ultimate
 collection will be made.
 
 i.  Research & Development expenditure
 
 i) Capital Expenditure in respect of Research & Development activity is
 amortised over the period of three years.  ii) Revenue expenditure on
 Research and Development shown separately in Profit & Loss Account
 
 j.  Taxation
 
 Provision for the current tax is made on the basis of estimated taxable
 income for the current accounting year in accordance with the Income
 Tax Act, 1961.Income tax expense comprises current tax and deferred tax
 charge or credit (reflecting the tax effects of timing differences
 between accounting income and taxable income for the year). 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 recognized to the extent
 there is reasonable certainty that these would be realized in future
 and are reviewed for the appropriateness of their respective carrying
 value at each balance sheet date. Tax credit is recognized in respect
 of Minimum Alternate Tax (MAT) as per the provisions of Section 115JB
 of the Income tax Act, 1961 based on convincing evidence that the
 Company will pay normal income tax within the statutory time frame and
 is reviewed at each balance sheet date.
 
 k.  Provision for contingent liabilities and contingent assets
 
 i) Provisions involving substantial degree of estimation in measurement
 are recognized when there is present obligation as a result of past
 events and it is probable that there will be outflow of resources.  
 
 ii) Disclosures for a contingent liability is made, without a provision
 in books, when there is an obligation that may, but probably will not,
 require outflow of resources. Contingent Assets are neither recognized
 nor disclosed in the financial statement.