1.  Accounting Convention:
 
 The financial statements have been prepared to comply in all material
 respects with the Accounting Standards notified by Companies
 (Accounting Standards) Rules, 2006 and the relevant provisions of the
 Companies Act, 1956. The financial statements have been prepared under
 the historical cost convention on an accrual basis except otherwise
 stated. The accounting policies have been consistently applied by the
 Company.
 
 Use of Estimates:
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires management to make estimates
 and assumptions that affect the reported amounts of assets and
 liabilities and disclosure of contingent liabilities at the date of the
 financial statements and the results of operations during the reporting
 period. Although these estimates are based upon management''s best
 knowledge of current events and actions, actual results could differ
 from these estimates.
 
 2.  Fixed Assets:
 
 Fixed assets are stated at cost less accumulated depreciation and
 impairment losses if any. Cost comprises the purchase price and any
 attributable cost of bringing the asset to its working condition for
 its intended use. Borrowing costs relating to acquisition of fixed
 assets which take substantial period of time to get ready for their
 intended use are also included to the extent they relate to the period
 till such assets are ready to be put to use.
 
 3.  Depreciation:
 
 Depreciation is provided using the Straight Line Method as per the
 useful lives of the assets estimated by the management or at the rates
 prescribed under schedule XIV of the Companies Act, 1956, whichever is
 higher.
 
 In respect of assets acquired upto 31st March, 1993, the specified
 period has been recomputed by applying to the original cost, the
 
 revised rates as per Schedule XIV as per Government Notification dated
 16-12-93, and depreciation charge calculated by allocating the
 unamortized value as per books of account over the remaining part, if
 any, of the recomputed period.
 
 In respect of equipment of IT and PKI Projects, they are depreciated at
 the rate of 9.5% per annum which is based on useful life of such assets
 estimated by the management.
 
 Furniture exceeding Rs. 5,000/- provided to employees is depreciated
 fully in the year of purchase.
 
 In respect of assets acquired for giving on lease, the depreciation is
 provided at flat rates equally spread over the tenure of lease
 agreement or at the rates specified in Schedule XIV of the Companies
 Act, 1956, whichever is higher.
 
 The core engine, an integral part of Captive Power Plant, needs
 replace- ment at the end of every three years and so the replacement
 amount is capitalized and is depreciated over its useful life of three
 years.
 
 4.  Impairment:
 
 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 impairment loss is recognized wherever the carrying amount
 of an asset exceeds its recoverable amount. The recoverable amount is
 the greater of the asset''s net selling price and value in use. In
 assessing value in use, the estimated future cash flows are discounted
 to their present value at the weighted average cost of capital.
 
 After impairment, depreciation is provided on the revised carrying
 amount of the asset over its remaining useful life.  A previously
 recognized impairment loss is increased or reversed depending on
 changes in circumstances. However, the carrying value after reversal is
 not increased beyond the carrying value that would have prevailed by
 charging usual depreciation if there was no impairment.
 
 5.  Intangible Assets:
 
 Goodwill is amortized over the period of 5 years commencing from the
 financial year in which the amalgamation is effected and accounted for.
 
 Software is amortized over its estimated useful life of six years.
 
 License acquired and used along with and directly related to the plant
 and machinery is amortized over the estimated useful life of the
 related plant and machinery.
 
 Research costs are expensed as incurred. Development expenditure
 incurred on an individual project is carried forward when its future
 recoverability can reasonably be regarded as assured.
 
 6.  Leases: Finance Lease:
 
 Assets given under a finance lease are recognized as a receivable at an
 amount equal to the net investment in the lease. Lease rentals are
 apportioned between principal and interest on the IRR method.  The
 principal amount received reduces the net investment in the lease and
 interest is recognized as revenue. Initial direct costs such as legal
 costs, brokerage costs, etc. are recognized immediately in the Profit
 and Loss Account.
 
 Operating Lease:
 
 Assets subject to operating leases are included in fixed assets.  Lease
 income is recognized in the Profit and Loss Account on a straight-line
 basis over the lease term. Costs, including depreciation are recognized
 as an expense in the Profit and Loss Account. Initial direct costs such
 as legal costs, brokerage costs, etc. are recognized immediately in the
 Profit and Loss Account.
 
 7.  Investments:
 
 Investments that are readily realizable and intended to be held for not
 more than a year are classified as current investments. All other
 investments are classified as long-term investments. Current
 investments are carried at lower of cost and fair value determined on
 investment category basis. Long-term investments are carried at cost.
 However, provision for diminution in value is made to recognize a
 decline other than temporary in the value of the investments.
 
 8.  Inventories:
 
 Inventories are valued as follows: (A) At plant:
 
 1 Stores & Spares (including coal)
 
 At weighted average cost.
 
 2 Raw Materials and Finished Goods and Stock-in-Process
 
 At Lower of Weighted Average Cost or Net Realisable Value. Annual cost
 is computed on full absorption costing method including material cost
 and conversion costs.
 
 3 Fertilizers of sub- standard quality
 
 At Lower of Weighted Average Cost or Net Realisable Value as estimated
 by the Company. Annual cost is computed on full absorption costing
 method including material cost and conversion costs.
 
 (B) At Field:
 
 1 Finished Goods
 
 At Lower of Weighted Average Cost or Net Realisable Value. Annual cost
 is computed on full absorption costing method including material cost
 and conversion costs. Cost of field stocks includes freight to the
 destination.
 
 2 Fertilizers of sub- standard quality
 
 At Lower of Weighted Average Cost or Net Realisable Value as estimated
 by the Company.
 
 Net realizable value is the estimated selling price in the ordinary
 course of business, less estimated costs of completion and estimated
 costs necessary to make the sale.
 
 9.  Foreign Currency Transactions:
 
 Initial Recognition:
 
 Foreign currency transactions are recorded in the reporting currency,
 by applying to the foreign currency amount the exchange rate between
 the reporting currency and the foreign currency at the date of the
 transaction.
 
 Conversion:
 
 Foreign currency monetary items are reported using the closing rate.
 Non-monetary items which are carried in terms of historical cost
 denominated in a foreign currency are reported using the exchange rate
 at the date of the transaction; and non-monetary items which are
 carried at fair value or other similar valuation denominated in a
 foreign currency are reported using the exchange rates that existed
 when the values were determined.
 
 Exchange Differences:
 
 The net gain or loss on account of exchange rate differences arising on
 settlement of foreign currency transactions are recognized as income or
 expenses of the period in which they arise except on liability relating
 to fixed assets acquired within India arising out of transactions
 entered on or before March 31, 2004 are added to the cost of such
 assets in line with old AS-11.
 
 Forward Exchange Contracts not intended for trading or speculation
 purposes:
 
 The premium or discount arising at the inception of forward exchange
 contracts is amortized as expense or income over the life of the
 contract. Exchange differences on such contracts are recognized in the
 statement of profit and loss in the year in which the exchange rates
 change. Any profit or loss arising on cancellation or renewal of
 forward exchange contract is recognized as income or as expense for the
 year.
 
 10. Revenue Recognition:
 
 Revenue is recognized to the extent that it is probable that the
 economic benefits will flow to the Company and the revenue can be
 reliably measured.
 
 a.  Sale of Goods:
 
 Revenue is recognized when the significant risks and rewards of
 ownership of the goods have passed to the buyer.  Sales, net of sales
 tax and discounts, comprise of sale of goods and services, excise duty
 and claims preferred on the Government of India for retention price
 reimbursement on fertilizers and admissible claims for change in
 retention price on account of variation in the costs. The excise duty
 collected on sales is shown by way of further deduction from sales.
 Urea and ANP Product Subsidy:
 
 Urea Subsidy under the New Pricing Scheme-III (extension) and ANP
 Subsidy under Nutrient Based Subsidy (NBS) Scheme w.e.f. 01-04-2010 is
 allowed by the Government of India (GoI) for the quantity received at
 the destination, as per the rate prescribed by GoI, at the time of
 dispatch in case of Urea and at the time of receipt in case of ANP.
 Urea Subsidy is further adjusted for input price escalation/
 de-escalation as estimated by the management based on the prescribed
 norms. The Company accounts for the same on sales quantity basis.  Urea
 and ANP Freight Subsidy:
 
 Freight Subsidy is recognized for the quantity received at the
 destination based on the rates approved by the Government of India in
 case of Urea and on the normative rates approved by the Government of
 India or the actual freight whichever is lower in case of ANP.
 
 b.  Other Income:
 
 Interest:
 
 Revenue is recognized on a time proportion basis taking into
 
 account the amount outstanding and the rate applicable.
 
 Dividends:
 
 Revenue is recognized on actual receipt basis.
 
 Other Income:
 
 The amounts receivable from various agencies are accounted on accrual
 basis to the extent it is possible to ascertain the income with
 reasonable accuracy.
 
 Insurance claims:
 
 Revenue is recognized on actual receipt basis.
 
 11. Government Grants:
 
 Government Grant is recognized when there is reasonable assurance that
 the conditions attached to them will be complied with. Government Grant
 received against the cost of fixed asset is credited to the gross value
 of the respective fixed asset in arriving at its book value. The grant
 is thus recognized in the profit and loss statement over the useful
 life of the respective depreciable fixed asset by way of a reduced
 depreciation charge.
 
 12. Borrowing Costs:
 
 Interest and other costs in connection with the borrowing of the funds
 to the extent related/ attributed to the acquisition/ construction of
 qualifying assets are accumulated and capitalized upto the date when
 such assets are ready for their intended use. Other borrowing costs are
 charged to Profit and Loss Account.
 
 13. Export Benefits:
 
 Export benefits under Duty Exemption Advance License Scheme, Duty
 Exemption Pass Book Scheme and Duty Drawback Scheme are accounted for
 in the year of export of goods.
 
 14. Retirement Benefits:
 
 a.  Retirement benefits in the form of Provident Fund and Pension Fund
 is a defined contribution scheme and the contributions are charged to
 the Profit and Loss Account of the year when the contributions to the
 respective funds are due. There are no other obligations other than the
 contribution payable to the respective trusts.
 
 b.  Gratuity liability and Post employment Medical Benefit liability
 are defined benefit obligations and are provided for on the basis of
 actuarial valuation made at the end of each financial year on project
 unit credit method.
 
 c.  Short term compensated absences are provided for on basis of
 estimates. Long term compensated absences are provided for based on
 actuarial valuation on project unit credit method.
 
 d.  Actuarial gains / losses are immediately taken to profit and loss
 account and are not deferred.
 
 15. Taxation:
 
 Tax expense comprises of current tax, wealth tax and deferred tax.
 Current income tax is measured at the amount expected to be paid to the
 tax authorities in accordance with the Indian Income Tax Act.  Deferred
 income tax reflects the impact of current year timing differences
 between taxable income and accounting income for the year and reversal
 of timing differences of earlier years.  Deferred tax is measured based
 on the tax rates and the tax laws enacted or substantively enacted at
 the Balance Sheet date. Deferred tax assets are recognized only to the
 extent that there is reasonable certainty that sufficient future
 taxable income will be available against which such deferred tax assets
 can be realized. In situations where the company has carried forward
 tax losses, all deferred tax assets are recognized only if there is
 virtual certainty supported by convincing evidence that they can be
 realized against future taxable profits.
 
 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 such deferred tax assets can be
 realized.
 
 16. Provisions:
 
 A provision is recognized when an enterprise has a present obligation
 as a result of past event; 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. These are reviewed at
 each balance sheet date and adjusted to reflect the current best
 estimates.
 
 17. Earnings Per Share:
 
 Basic earnings per share are calculated by dividing the net profit or
 loss for the period attributable to equity shareholders by the weighted
 average number of equity shares outstanding during the period.  Partly
 paid equity shares are treated as a fraction of an equity share to the
 extent that they were entitled to participate in dividends relative to
 a fully paid equity share during the reporting period.  For the purpose
 of calculating diluted earnings per share, the net profit or loss for
 the period attributable to equity shareholders and the weighted average
 number of shares outstanding during the period are adjusted for the
 effects of all dilutive potential equity shares.
 
 18. Cash and Cash Equivalents:
 
 Cash and cash equivalents in balance sheet comprise cash at bank and in
 hand and fixed deposits with banks.
 
 19. Segment Reporting Policies: Identification of segments:
 
 The Company''s operating businesses are organized and managed separately
 according to the nature of products and services provided, with each
 segment representing a strategic business unit that offers different
 products. Majority of the Company''s products are sold within India and
 hence geographical segment is not identified. There are no intersegment
 transfers.
 
 Allocation of Common Costs:
 
 To the extent the costs can be directly identified, they are allocated
 to the related segment. Common allocable costs are allocated to each
 segment according to the relative production tonnage, sales tonnage/
 value and other related basis.
 
 Unallocated items:
 
 Other segment includes Information Technology activity and general
 corporate income and expense items which are not allocated to any
 business segment.