i.  SUBSIDY UNDER NEW PRICING SCHEME (NPS) FOR UREA
 
 Escalation/De-escalation in input prices is subject to annual
 revision based on the actual prices. Accordingly, a sum of Rs.85.89 Cr.
 (Previous year Rs. 50.99 Cr.) has been reckoned as receivable from FICC
 for the year 2011-12 towards annual escalation of input prices.
 
 ii.  EXCHANGE RATE FLUCTUATION
 
 Exchange rate fluctuation included in other expenses is Rs. 4.06 Cr
 (Previous year Rs. 7,362).
 
 iii.  CENTRAL EXCISE 25/70 NOTIFICATION
 
 With due permission of COD, the Company has preferred an appeal with
 CESTAT on 18.07.2011 against (I) demand for delayed payment interest
 of Rs. 5.42 Cr. for refund of the excess Excise Duty of Rs. 3.10 Cr.
 collected by the Department and (ii) to quash the order of Commissioner
 (Appeals).The hearings are yet to take place.
 
 No provision is considered necessary in the Books by the Company as the
 matter is subjudice. However the same is shown under Contingent
 Liability.
 
 iv. Advances include a sum of Rs. 63.09 Lacs deposited with ESI
 authorities being employer contribution to ESI as per the direction of
 Hon. Madras High Court. The Company has already filed Writ Appeal No.
 1228/2010 against the orders passed in WP No. 14642/2006. The Hon.
 Court on 29.06.2010 granted interim stay until further orders and
 notice. Pending disposal of the case the amount is shown under advances
 as of 31.3.2012.
 
 v GOI has approved the 2007 pay revision vide letter No:
 84/1/2009-HR-I dated April 18,2011. In terms of the order the perks and
 allowances on the revised scales are effective 18.04.2011. Accordingly,
 perks and allowances for the period from 18.04.2011 to 31.03.2012
 amounting to Rs. 3.41 Cr. has been provided in the books of accounts to
 enable implementation of revised perks and allowances per GOI order.
 
 vi. OTHER DISCLOSURES
 
 i.  Information required under AS-15 (Revised) on Employee Benefit
 Expenses is provided in Annexure -1 to this note.
 
 ii. The amount of borrowing costs capitalised for the year is ''NIL''
 (Previous year ''NIL'')per AS-16 (Borrowing Costs).
 
 iii. Fertilizer manufacture is the only main business segment and
 trading operations are less than 10% of the total revenue. Further, the
 Company is engaged in providing and selling its products in single
 economic environment in India i.e., there is a single geographical
 segment. Hence, there is no requirement of segment reporting for the
 Company as per AS -17 (Segment Reporting).
 
 iv. During the year, there were no transactions with related parties as
 defined in AS -18 (Related Party Disclosures).  The data relating to
 key managerial personnel is furnished under note 25.
 
 v. The Company has not entered into joint venture activities as defined 
 in AS-27. Hence AS-27 on Financial Reporting of Interest in Joint 
 Ventures is not applicable to the Company at present.
 
 vi. The movement of Provisions as required under AS- 29 Provisions,
 Contingent Liabilities and Contingent Assets is given below:
 
                                          Mar 31,2012    Mar 31,2011
                                             (Rs. Cr)       (Rs. Cr) 
 
 a.  Leave Encashment
 
 Provision at the beginning of the year          6.25           5.66
 
 Provision made during the year                  4.98           2.48
 
 Utilisation/withdrawal during the year          1.83           1.89
 
 Provision at the end of the year                9.40           6.25
 
 
 b Retired Medical Benefits
 
 Provision at the beginning of the year          1.43           1.34
 
 Provision made during the year                  0.05           0.23
 
 Utilisation/withdrawal during the year          0.15           0.14
 
 Provision at the end of the year                1.33           1.43
 
 c.  Service Awards
 
 Provision at the beginning of the year          0.93           0.58
 
 Provision made during the year                  0.33           0.35 
 
 Utilisation/withdrawal
 during the year                                    -              -
 
 Provision at the end of the year                1.26           0.93
 
 d.  Gratuity
 
 Provision at the beginning of the year         12.19           3.72
 
 Provision made during the year                  7.40          10.47
 
 Utilisation / withdrawal during the year        4.00           2.00
 
 Provision at the end of the year               15.59          12.19
 
 e.  Bad and Doubtful Debts
 
 Provision at the beginning of the year          5.17           4.33
 
 Provision made during the year                  0.15           0.98
 
 Utilisation/withdrawal during the year          0.54           0.14
 
 Provision at the end of the year                4.78           5.17
 
 f.  Claims Recoverable
 
 Provision at the beginning of the year          0.82              -
 
 Provision made during the year                  0.19           0.82
 
 Utilisation/withdrawal during the year
 
 Provision at the end of the year                1.01           0.82
 
 vii.  a) Considering the carry forward losses and allowances available
 for set off, there is no Income Tax liability for the year 2011-12.
 Hence no provision is made for Income Tax during the year.
 
 b) Deferred tax asset (Net) as at 31.03.2012 has not been recognized
 since there are no taxable profits in view of the set-off of the carry
 forward loss and depreciation benefits available to the Company
 under the Income-Tax Act.
 
 viii.  Eight hearings of BIFR have taken place since 02.04.2009 on
 which date, the Company was declared sick under SIC (SP) Act, 1985. The
 Operating Agency (SBI, Commercial Branch, Chennai) has submitted a
 Draft Rehabilitation Scheme (DRS) to BIFR. In the BIFR hearing held on
 07.5.2012, the Board wanted certain clarifications/modifications in the
 DRS and directed the operating agency to resubmit the fully tied up
 DRS. Next hearing is posted on 27.08.2012.
 
 ix.  Based on the preliminary report of the outside professional firm
 of Chartered Accountants, the Company identified the disposal documents
 for most of the items reported short under Air Conditioners & Water
 Coolers and Lab Equipment. In respect of Furniture & Fittings, Office
 Equipment and Automotive & Service Equipment, the reconciliation is in
 progress. However, as most of the items reported short are fully
 depreciated, there is no material financial impact on Accounts.
 
 x.  Included in Short term Trade Payables under ''Note 9a'' are:
 
 a.  Dues to CPCL - Rs. 0.02 Cr (Previous Year Rs. 82.27 Cr) for which
 mortgage and First charge on Guindy land is given for Rs. 100 Cr till
 the date of sanction of a rehabilitation scheme for the Company.
 
 b.  Dues to IOC - Rs. 49.60 Cr (Previous Year Rs. 49.92 Cr) for which
 First charge on Plant and Machinery is given for Rs. 50 Cr
 
 xi.  The Company settled the dues to LICHFL through One Time Settlement
 and the benefit of Rs. 1.31 Cr (Previous year Rs. 124.69 Cr with
 Financial Institutions) has been accounted under extra ordinary items.
 
 xii.  The Annual maintenance of Plants was taken up from March 05,
 2012.  Per normally accepted Accounting Principles, all spares drawn
 from stores up to March 31,2012 together with connected labour costs
 were charged in 2011-12 Accounts, though the Plants have not restarted
 as of year end.
 
 1.  CONTINGENT LIABILITIES, CAPITAL COMMITMENTS AND L/Cs OUTSTANDING:
 
                                         2011-12             2010-11
                                          (RS. )              (RS. )       
 
 
 (a) Contingent Liabilities in     183,58,01,504       156,72,77,307
 respect of claims against the 
 Company not acknowledged as 
 debts in respect of Income Tax, 
 Excise Duty, Sales Tax and 
 others (Includes Customs Duty 
 on Imported Urea Rs. 65.86 Cr, 
 Penal Interest on GOI Loans 
 Rs. 104.20 Cr, and interest 
 on delayed payment of Excise 
 Duty Rs. 5.42 Cr).
 
 (b) L/Cs outstanding 
 (not provided for)                 18,12,30,479        21,72,90,258
 
 (C) Estimated amount of 
 contracts remaining to be
 executed on Capital Account 
 and not provided for (after 
 adjusting advance made therefor)   19,28,08,775              96,222
 
 (d) ESI Liability (interest) not 
 provided for, based on Court''s
 interim injunction.                   38,41,925           42,53,871
 
 2.  GENERAL INFORMATION:
 
 a.  The Company has filed an appeal before the Commissioner of Customs
 (Appeals) over the denial of concessional rate of duty for imported
 Urea for use as manure by the Commissioner of Customs who demanded Rs.
 65.86 Cr as differential duty including equal penalty. The appeal is
 pending.
 
 Based on COD clearance, the Company has filed a restoration application
 before CESTAT, which vide order No: 66/12 dated 31.01.2012 waived
 pre-deposit of the duty and penalty during the pendency of the appeal.
 CESTAT also directed the Company to deposit an amount of Rs. 5 lacs which
 the Company has complied with. Further hearings are to take place.
 
 b.  During the year, the Company has moved 4,86,750 MT of Urea from
 current year production and 10,615 MTfrom the opening stock totaling to
 4,97,365 MT. The Company is eligible for full subsidy upto 100%
 capacity i.e. 4,86,750 MT and for the balance quantity at the rates
 notified for the earlier years during which the stock got accumulated.
 Further, the balance quantity of unmoved opening stock of 4,142 MT is
 also eligible for subsidy as above. The valuation is done accordingly
 pending notification from FICC.
 
 c.  Confirmation of balances has not been received in respect of Loans
 from GOI, Trade Receivables/Payables and Loans and Advances.
 
 d.  Figures for the previous year have been regrouped wherever
 necessary to conform to Current Year''s classification.
 
 Information to Investors
 Dear Shareholders
 
 Dematerilisation of Madras Fertilizers Limited (MFL) Shares
 
 As you may be aware that the shares of MFL are under compulsory
 dematerialisation (demat) segment of trading as per SEBI directives.
 This means, MFL shares can be purchased/sold at the Stock Exchanges
 only in demat form. Shareholders are therefore advised to avail the
 demat facility.
 
 Dematerialisation
 
 Dematerialisation is the process of converting physical share
 certificates into electronic form i.e. crediting of equivalent number
 of shares to your depository account electronically.
 
 Depository Account
 
 For dematerialisation of shares you have to open a depository account
 with a Depository Participant (DP) having connectivity with National
 Securities Depository Ltd (NSDL)/Central Depository Services (I) Ltd
 (CSDL). You are free to open an account with any of the DPs for demat.
 
 Benefits of Dematerialisation
 
 - No risk of loss/misplacement/theft/damage of share certificates
 
 - No risk of bad deliveries
 
 - No stamp duty on transfer of shares
 
 - Faster transfer of shares
 
 Steps involved for Dematerialisation of shares
 
 1.  Open a demat account with any of the Depository Participants (DPs)
 
 2.  Submit demat request form (DRF) (duly signed by all the holders)
 along with the share certificates to the DP.
 
 3.  Obtain acknowledgement from the DP for having delivered the share
 certificates
 
 4.  Receive a confirmation statement of holding from your DP.
 
 5.  PLEASE DO NOT SEND THE SHARE CERTIFICATES/DOCUMENTS FOR DEMAT TO
 THE COMPANY OR SHARE TRANSFER AGENT OF THE COMPANY.
 
 Some of the DP names are furnished under for your reference.
 
 You may contact nearest DP in this regard.
 
 - Appollo Sindhoori Capital Investments Ltd
 
 - Cholamandalam Securities Ltd
 
 - Fortis Securities Ltd
 
 - Geojit Financial Services Ltd
 
 - HDFC Bank Ltd
 
 - ICICI Bank Ltd
 
 - IDBI Bank Ltd
 
 - India Infoline Securities P Ltd
 
 - Indian Bank
 
 - Induslnd Bank Ltd
 
 - Integrated Enterprises India Ltd
 
 - Kotak Securities Ltd
 
 - State Bank of India
 
 - Stock Holding Corporation of India Ltd
 
 - Union Bank of India
 
 - UTI Bank of India
 
 - UTI Securities Ltd
 
 In order to obtain the complete list of DP locations and other related
 information you may log on www.nsdl.co.in/ www.cdslindia.com
 
 In case you need any additional information on this matter, please feel
 free to contact:
 
 G Alagarsamy
 
 Company Secretary
 Madras Fertilizers Limited
 Manali,Chennai-600068
 Phone: 044-25941001 /25941201 Extn 3456
 Fax : 044-25943613