1.  Amalgamation of MCF International Limited with the Company
 
 - Pursuant to the Scheme of Amalgamation (''the Scheme'') of the
 erstwhile MCF International Limited (MCFIL) as approved by the Hon''ble
 High Court of Karnataka on July 8, 2011, the entire business and
 undertaking of MCFIL including all assets, liabilities, duties and
 obligations have been transferred to and vested in the Company with
 effect from April 1, 2010.
 
 - The Amalgamation has been accounted for under the ''Pooling of
 interests'' method as prescribed by Accounting Standard 14, Accounting
 for Amalgamations, notified under Sec 211 (3C) of the Companies Act
 1956.
 
 - In accordance with the Scheme, 50,000 Equity Shares of Rs. 10/- each
 held by the Company in the equity share capital of MCFIL stand
 cancelled. The difference of Rs. 3,27.24 lakhs between assets,
 liabilities, statutory reserves of MCFIL and the carrying value of
 investments being cancelled, has been adjusted against balance in Profit
 and Loss Account.
 
 - In view of the accounting for amalgamation with effect from April 1,
 2010, the fgures of the current year are not strictly comparable with
 those of the previous year.
 
                                                   (Rs. in Lakhs) 
 
                                              2010-2011      2009-2010
 
 2.  Contingent Liabilities
 
 a.  Outstanding Bank Guarantees               15,93.61        3,58.37
 
 b.  Claims against the Company not 
 acknowledged as debt.
 
 Disputed arrears of electricity charges, 
 under appeal by Company / KPTCL                2,38.58        2,38.58
 
 3.  Secured and Unsecured loans
 
 a) Term loan from Banks: Rs. 19,72.22 lakhs (previous year Rs. 15,74.31
 lakhs) is secured by First charge on the project assets, and second
 charge on all of the Company''s fixed assets including all movable and
 immovable properties both present and future.
 
 b) Working Capital facilities of Rs. 167,89.18 lakhs (previous year Rs.
 81,50.65 lakhs) from banks are secured by a frst pari passu charge on
 present and future plant and machinery, stock of fertilizers including
 work-in-process and raw materials, book debts, outstanding monies,
 receivables, claims, bills, contracts, engagements, securities,
 investments, rights and assets of the Company (except property
 effectively otherwise hypothecated / charged or mortgaged to the
 banks).
 
 c) Loans from others is lease liability secured by hypothecation of
 assets acquired under the facility.
 
 4.  Leasehold land of Rs. 3.04 lakhs is towards 3.041 acres taken on
 lease from the New Mangalore Port Trust.
 
 5.  Depreciation includes Rs. 7,09.09 lakhs (previous year Nil) towards
 accelerated depreciation of D G sets to be replaced.
 
 6 As per the practice consistently followed by the Company, the
 concession rate for Urea for the year 2010-11 has been recognised based
 on latest notified rates under NPS-III and further adjusted with input
 price escalation aggregating Rs. 6,60.00 lakhs, as estimated by
 Management.
 
 The concession rate for Phosphatic and Potassic fertilizers for April
 2010 to March 2011 has been based on the notified price and a provision
 of Rs. 19,65.00 lakhs has been made, as estimated by Management, for
 any price variation.
 
 (ii) Compensated Leave (Unfunded)
 
 Defined benefit obligation of compensated absence in respect of the
 employees of the Company is arrived on the basis of actuarial valuation
 conducted as on 31.3.2011 which works out to Rs. 4,20.40 lakhs
 (previous year Rs. 3,71.96 lakhs). Increase in the obligation towards
 compensated leave has been charged to Profit and Loss Account Rs. 48.44
 lakhs (previous year Rs. 12.36 lakhs).
 
 7.  Segment Reporting
 
 The Company''s business comprises of manufacture, purchase and sale of
 fertilizers and related products constituting a single segment.  The
 sales of these products are predominantly made in India. Hence, the
 segment information as per Accounting Standard 17 - Segment Reporting
 is not required to be disclosed.
 
 8. Related Party Disclosures a) List of related parties:
 
 i) Associates
 
 United Breweries (Holdings) Limited
 
 ii) Subsidiary *
 
 MCF International Limited
 
 iii) Key Management Personnel
 
 Deepak Anand, Managing Director K. Prabhakar Rao, Wholetime Director
 
 b) General Description of Lease terms:
 
 i) Lease rentals are charged on the basis of agreed terms.
 
 ii) Assets are taken on lease over a period of 3/5 years.
 
 9.  Accounting for taxes on Income
 
 In accordance with the Accounting Standard 22 - Accounting for Taxes
 on Income, issued by the Institute of Chartered Accountants of ndia,
 the Company has recognised Rs. 1,52.85 lakhs as deferred tax Asset
 (net) for the current year.
 
 10.  The previous year''s fgures have been reworked, regrouped,
 rearranged and reclassified wherever necessary.