1.  Basis of preparation and presentation of financial statements :
 
 The financial statements have been prepared and presented to comply in
 all material respects with the mandatory Accounting Standards issued by
 the Institute of Chartered Accountants of India and the relevant
 provisions of the Companies Act, 1956. The significant accounting
 policies have been consistently applied by the Company.
 
 2.  Capital Expenditure :
 
 (a) Fixed Assets acquired and constructed are stated at historical cost
 including attributable cost for bringing the asset to its intended use
 and includes amount added on revaluation of fixed assets of Polymers
 Unit at the time of merger.
 
 (b) Assets under erection/installation of the existing projects are
 shown as Capital Work in Progress (including advances and inventory
 lying at stores). Capital expenditure and project stores (including
 advances) for on going projects are shown as Projects under execution
 in the Schedule of Fixed Assets.
 
 (c) In the absence of availability of specific original cost in respect
 of a part of assets capitalised under turn-key contracts, the original
 value of such asset written / disposed off is estimated on the basis of
 its current cost adjusted for price and technological factors.
 
 (d) Major cost of civil works required as plant and machinery supports,
 on the basis of technical estimates, is considered as Plant &
 Machinery.
 
 (e) Advances paid for the purchase/acquisitions of land in possession
 of the Company are included in the cost of land.
 
 (f) Renewals and replacements are either capitalised or charged to
 revenue as appropriate, depending upon the nature and long term utility
 of such renewals and/or replacements.
 
 (g) Intangible Assets :
 
 Intangible assets are stated at cost.
 
 3.  Borrowing Cost :
 
 Borrowing cost of the funds borrowed for the qualifying asset is
 capitalised till the date of commencement of commercial production.
 Other borrowing cost is charged to revenue.
 
 4.  Depreciation and Amortization :
 
 Depreciation on Fixed Assets is provided on Straight Line Method at the
 rates prescribed in Schedule XIV to the Companies Act, 1956.
 Depreciation on additions to fixed assets and assets disposed
 off/discarded is charged on monthly pro-rata basis. Depreciation on
 commissioning of plants and other assets of new projects is charged for
 the days they are actually put to use. Exchange variation adjusted in
 the carrying cost of the fixed assets is amortized over the residual
 life of the assets.  Leasehold land, other than that on perpetual
 lease, is amortized over the life of the lease.  Intangible assets are
 amortized over their estimated economic lives but not exceeding ten
 years on a straight line basis.
 
 5.  Impairment of Assets :
 
 The Company makes assessment to find out whether there are any
 indications for impairment of assets as provided in the Accounting
 Standard stipulated by the Institute of Chartered Accountants of India.
 If any such indications are available then further process as per the
 Accounting Standard is carried out by the Company and necessary
 adjustments in the books of the accounts are made accordingly.
 
 6.  Foreign Currency Transactions :
 
 Foreign currency transactions are recorded at the exchange rate
 prevailing on the date of transaction. Assets and liabilities related
 to foreign currency transactions remaining unsettled at the year-end
 are translated into rupee at the contract rates, when covered by
 forward cover contracts and at the year-end exchange rates in other
 cases. The exchange difference arising on foreign currency transactions
 including gain or loss arising due to cancellation of forward cover
 contracts are recognised in the profit and loss account except those
 relating to fixed assets acquired prior to 01.04.2004 which are
 adjusted to the carrying cost of the fixed assets.
 
 7.  Investments :
 
 Current investments are carried at the lower of cost or quoted/fair
 value. Long term investments are carried at cost.  However, provision
 for diminution in value is made to recognise a decline other than
 temporary in the value of long term investments.
 
 8.  Inventories :
 
 (a) Raw materials, stores and spares are valued at weighted
 average/FIFO cost. Cost of stores and spares items is based on the
 purchase order price and the difference, if any, between the invoice
 value and the purchase order price is charged to consumption. Stores
 returns, non-standard/obsolete items are valued at assessed or
 realisable value below cost. Imported raw material lying at port is
 valued at cost based on the Bill of Lading quantity.
 
 (b) Finished products and stock in process are valued at lower of
 weighted average cost or net realisable value.  Value of stock of
 finished products lying at depots, warehouses, consignment stockists,
 other parties and stocks remaining out of inter-unit transfers is
 inclusive of transportation cost. Stock of trading items is valued at
 lower of cost or realisable value.
 
 (c) Consumable stores categorised separately with an annual consumption
 of less than Rs. 10,000/- per item are charged to Profit & Loss Account
 at the time of purchase at Baroda Unit. At Polymers Unit, sundry
 consumable items are charged to Profit & Loss
 
 Account as and when procured, while at Sikka and Fibre Units such items
 are charged to Profit & Loss Account as and when consumed.  (d) Freight
 on indigenous stores & spares are directly charged to Profit & Loss
 Account.
 
 9.  Revenue Recognition :
 
 (a) Sales :
 
 Sales of industrial products are accounted on the dispatch basis except
 export sales, which are recognised on the basis of bill of lading.
 Sales of fertilizers are accounted for on the basis of issue of release
 orders. Subsidy and equated freight on fertilizers are accounted on
 accrual basis as and when the order notified by for the same is
 available with the Company from the Government of India.
 
 (b) Other Income :
 
 The amounts receivable from various agencies are accounted for on
 accrual basis except interest on delayed payments, refunds from customs
 & excise authorities, insurance claims (other than marine claims), etc.
 where it is not possible to ascertain the income with reasonable
 accuracy or in absence of finality of the transaction.
 
 10.  Employee Benefits :
 
 (i) Short-term employee benefits :
 
 Short term employee benefits are recognized as an expense at the
 undiscounted amount in the profit and loss account of the year in which
 the related service is rendered.
 
 (ii) Post Employment benefits :
 
 Post employment benefits comprise of gratuity, superannuation for the
 eligible employees of all the four units of the Company and medical
 benefit for eligible employees of Baroda unit of the Company. Post
 employment benefits are recognized as an expense in the profit and loss
 account for the year in which the employee has rendered services. The
 expense is recognized at the present value of the amount payable using
 actuarial valuation carried out as at the end of the year in accordance
 with the revised Accounting Standard 15 (revised 2005) on ‘Employee
 Benefits'' issued by the Institute of Chartered Accountants of India.
 
 The company has set up separate recognized Provident Fund trusts for
 all the units of the Company.  Contributions paid/payable for Provident
 Fund of eligible employees is recognized in the Profit and Loss Account
 each year. The Company has an obligation to make good the shortfall, if
 any, between the return from the investments of the trust and the
 interest rate notified by Government.
 
 The Company also contributes to a government administered Family
 Pension Fund on behalf of its employees.
 
 (iii) Other long term employee benefits :
 
 Other long term employee benefits comprise of leave encashment. The
 Company accounts for Leave Encashment Liability on the basis of
 actuarial valuation carried out as at the end of the year.
 
 (iv) Actuarial gains and losses in respect of post employment and other
 long-term benefits are charged to the profit and loss account.
 
 11.  Prior Period Adjustments :
 
 In respect of the transactions pertaining to the period prior to the
 current accounting year, the Company follows the practice in conformity
 with the Accounting Standard.
 
 12.  Prepaid Expenses :
 
 Expenses incurred but pertaining to subsequent period (except those not
 exceeding Rs. 50,000/- in each case, which are accounted through
 respective revenue accounts) are accounted as ‘Prepaid Expenses''.
 
 13.  Research and Development :
 
 Capital expenditure on Research & Development activities is included in
 Fixed Assets to the extent it has alternative economic use. Revenue
 expenditure pertaining to research activity is charged under respective
 account heads in the Profit & Loss Account.
 
 14.  Taxation :
 
 Provision for Current income tax is based on the estimated taxable
 income for the period in accordance with the provisions of the Income
 Tax Act, 1961.  Deferred Tax is measured based on the tax rates and the
 tax laws enacted or substantively enacted at the balance sheet date and
 is recognised on timing differences between taxable income and
 accounting income that originate in one period and are capable of
 reversal in one or more subsequent periods. Deferred Tax assets,
 subject to consideration of prudence, are recognised and carried
 forward only to the extent there is reasonable certainty that
 sufficient future taxable income will be available against which such
 deferred tax assets can be realised.
 
 Provision for Wealth Tax is made in accordance with the provisions of
 the Wealth Tax Act, 1957.
 
 15.  Segment Reporting :
 
 The Company has identified two reportable business segments i.e.
 Fertilizer products and Industrial products.  The Company operates
 mainly in Indian market and there are no reportable geographical
 segments.
 
 16.  Provisions, Contingent Liabilities and Contingent Assets :
 
 Provisions involving substantial degree of estimation in measurement
 are recognized when there is a present obligation as a result of a past
 events and it is probable that there will be an outflow of resources.
 Contingent Liabilities are not recognised but are disclosed in the
 notes on accounts. Contingent Assets are neither recognised nor
 disclosed in the financial statements.