Accounting Convention:
 
 The financial statements have been prepared in conformity with
 generally accepted accounting principles to comply in all material
 respects with the notified Accounting Standards(AS) under Companies
 (Accounting Standard) Rules 2006 and the relevant provisions of the
 Companies Act 1956(the Act”).The financial statements have been
 prepared under the historical cost convention, on an accrual basis. The
 accounting policies have been consistently applied by the Company and
 are consistent with those used in the previous year except for the
 change in accounting policy explained in 2 below.
 
 Presentation and disclosure of financial statements
 
 During the year ended 31 March 2012, the revised Schedule VI notified
 under the Act has become applicable to the company, for preparation and
 presentation of its financial statements. The adoption of revised
 Schedule VI does not impact recognition and measurement principles
 followed for preparation of financial statements. However, it has
 significant impact on presentation and disclosures made in the
 financial statements.
 
 All assets and liabilities have been classified as current or
 non-current as per criteria set out in the revised Schedule
 
 VI notified under the Act which are as under:
 
 Based on the nature of products and the time taken between the
 acquisition of assets or processing and their realization in cash and
 cash equivalents, company has ascertained its operating cycle. The
 Normal operating cycle as determined by the Company is 6 months.
 
 The threshold for classification as current or non-current assets is
 determined either by the realization of such assets within the normal
 operating cycle or if such asset is expected to be realized within
 twelve months after the reporting date. Thus classification of an asset
 either current or non-current has been made applying the criteria of
 realization of such assets within a period of 12 months after the
 reporting date.
 
 Where assets have been fully provided for as doubtful, the same are
 classified as non-current.
 
 Similarly in case of liabilities the same is classified as current
 where it is expected to be settled within 12 months after reporting
 date and where the company does not have an unconditional right to
 defer settlement of the liability for at least twelve months after
 reporting date.
 
 2.  Change in Accounting Policy
 
 Adjustment of exchange variance on translation
 
 /settlement of long term monetary items
 
 Government of India has issued an amendment to Accounting Standard -11
 (Revised) giving an option to Companies which had earlier not exercised
 the option to adjust the exchange differences to the cost of asset in
 respect of long term foreign currency items for transactions commencing
 from 01 -4-2011. Consequently, company has exercised the option of
 adjusting such exchange variances to the cost of the asset. The impact
 of the same is given separately in Note no. 49 to the Financial
 Statements.
 
 3.  Use of Estimates: ''
 
 The preparation of the financial statements in conformity with the
 generally accepted accounting principles requires management to make
 estimates and assumptions that affect the reported amount of assets and
 liabilities and disclosure of contingent liabilities as 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.
 
 Any revisions to accounting estimates are recognized prospectively when
 revised, in current and future periods.
 
 4.  Fixed Assets
 
 4.1 Fixed assets comprise of tangible assets and intangible assets, and
 are stated at their original cost of acquisition (net of Cenvat and
 VAT) less accumulated depreciation/ amortization and impairment loss.
 Cost for this purpose includes all costs attributable for bringing the
 asset to its present location and condition. Assets held for disposal,
 are stated at lower of net book value and net estimated realizable
 value.
 
 4.2 The Government/Institutional grants of capital nature are adjusted
 to the gross block of relevant Fixed Assets.
 
 4.3 From accounting periods commencing on after 01-4-2011, the Company
 adjusts exchange differences on translation / settlement of long term
 monetary items pertaining to the acquisition of a depreciable asset to
 the cost of the asset and depreciates the same over the remaining life
 of the asset.
 
 5.  Depreciation/Amortization
 
 Depreciation on Fixed Assets other than on intangible assets (software
 applications) is provided for under STRAIGHT LINE METHOD (SLM) at the
 rates
 
 prescribed in Schedule XIV to the Companies Act, 1956.  Depreciation on
 additions/deductions to Gross Block is calculated on pro-rata basis
 from the date of such additions/and up to the date of such deductions.
 
 Intangible assets (software applications) are amortized over their
 respective individual estimated useful lives on a STRAIGHT-LINE BASIS,
 pro-rata from the date the asset is available to the Company for its
 use. Management estimates the useful life of software applications
 identified as intangible assets as three years. Any expenses incurred
 on intangible assets upto Rs. 1 lakh in each case are being charged off
 in the year of incurrence.
 
 Leasehold land is amortized equally over the lease period pro-rata from
 the month the asset is available to the Company.
 
 Depreciation on Catalyst capitalized upon commissioning is provided on
 the estimated useful life as technically assessed.
 
 Depreciation on railway wagons purchased is provided on its estimated
 useful life.
 
 Impairment of Assets:
 
 The carrying amounts of assets are reviewed at each Balance Sheet date
 for identifying an impairment based on internal/external factors. Loss
 on impairment is provided to the extent the carrying amount of assets
 exceeds its recoverable amount. Recoverable amount is the higher of an
 asset''s net selling price and its value in use. After recognition of
 impairment loss, the revised carrying amount less residual value of the
 impaired asset would be depreciated on systematic basis over its
 remaining useful life. A previously recognized loss on impairment is
 increased or reversed depending on the change in the 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.
 
 6.  Expenditure during Construction (EDC)
 
 All pre-operative costs (net of income) incidental to new projects
 undertaken are accumulated as EDC and apportioned appropriately among
 the various plants/facilities during the year of capitalization.
 
 7.  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 up to the date when
 such assets are ready for their intended use. All other borrowing costs
 are charged to statement of Profit and Loss.
 
 Exchange variation on foreign currency borrowing to the
 
 extent they are considered as borrowing costs are capitalized up to the
 date when such assets are ready for their intended use.
 
 8.  Foreign Currency Transactions
 
 Transactions in Foreign currency are recorded in the reporting currency
 by applying the currency rate as at the date of transaction.
 
 Monetary assets and liabilities denominated in foreign currency are
 translated at the rates of exchange prevalent on the Balance Sheet
 date.
 
 In respect of transactions covered by forward exchange contracts the
 difference between the contract rate and the spot rate on the date of
 the contract is recognized in the Statement of Profit and Loss over the
 period of the contract.
 
 Exchange differences arising on long-term foreign currency monetary
 items related to acquisition of a fixed asset are capitalized and
 depreciated over the remaining useful life of the asset. For this
 purpose, the company treats a foreign currency monetary items as
 long-term foreign currency monetary item, if it has a term of 12
 months or more at the date of its obligation.
 
 All other exchange differences (gains or losses) are recognized in the
 Statement of Profit & Loss in the period in which they arise.
 
 9.  Investments
 
 Current Investments are valued at lower of cost and fair value. Long
 term investments are stated at cost and provision is made for any
 diminution in such value, which is other than temporary in nature.
 
 10.  Inventory
 
 10.1 Assessment of Inventory
 
 Raw Materials, Intermediary Products, By- Products and Finished
 Products inside factory premises are assessed by survey method on a
 date as close as possible to the Balance Sheet date and the shortages
 /excesses in the quantities as compared to book stocks are adjusted in
 the books. Finished goods and other inventory stored outside the
 factory premises are taken as per warehousing certificates and third
 party confirmation respectively.
 
 10.2 Mode of Valuation
 
 Inventory is valued at lower of cost and net realizable value except in
 case of by-products, which are valued at, net realizable value. Gases
 and slurries, if any, in pipelines at different stages of process are
 not valued as the same is not practicable.
 
 10.3 Basis of Cost:
 
 10.3.1 The cost of manufactured finished goods, bought out products and
 intermediary products are arrived at based on weighted average cost.
 Bifurcation of cost of joint products is made on technical estimates.
 
 10.3.2 Cost of raw materials, petroleum products, packing materials,
 stores and spares, and loose tools is determined on weighted average
 cost basis.
 
 10.3.3 Used loose tools are treated as consumed and hence not valued.
 
 10.3.4 Project surplus stores and spares of old plants not in use are
 brought in the books at nominal estimated value/technical estimate or
 carried in memorandum records.
 
 10.3.5 Provision is made in respect of raw materials, packing
 materials, stores and spares and petroleum products, wherever
 appropriate, based on technical estimates, to reflect the impact of
 obsolescence, damage or other diminution in value.
 
 10.4 Measurement of Cost / Realizable Value
 
 10.4.1 Cost of Purchases
 
 Cost of purchase includes duties, taxes (net of those recoverable)
 freight and other expenses net of trade discounts, rebates and price
 adjustments.
 
 10.4.2 Cost of Manufactured goods
 
 Cost of Manufactured Goods comprises of direct cost, variable
 production overheads and fixed production overheads on absorption
 costing method.  Catalysts issued are charged off over their estimated
 useful lives as technically assessed. Variable production overheads are
 allocated based on actual production.  Variable overheads related to
 movement of finished products are allocated based on actual dispatches.
 Fixed overheads are allocated based on higher of the actual production
 level or normal production level. Average freight incurred is included
 in valuing stocks in field warehouses and in transit.
 
 10.4.3 Cost of Traded Fertilizers
 
 It comprises of Cost of Purchases as defined under 10.4.1 plus bagging,
 handling and transportation costs incurred to bring the material in its
 present location and condition.
 
 10.4.4 Net Realizable Value
 
 Price of urea is administered by the Government of India by which
 selling price is fixed for the buyer. The net realizable value for
 manufactured urea is taken at retention price (selling price net of
 dealers'' margin plus subsidy from Government of India) net of variable
 selling and distribution cost. Net realizable value of off-spec urea is
 taken at 40% of MRP excluding subsidy.
 
 The net realizable value of phosphatic and potassic fertilizers is
 taken at the applicable selling prices expected to be realized, net of
 dealers'' margin and variable selling and distribution costs plus the
 concession as fixed/to be fixed by Government. Net realizable value of
 off-spec phosphatic and potassic fertilizers is taken at selling price
 net of dealers'' margin and estimated cost of re- processing including
 transportation cost to factory. The net realizable value of off spec
 bought out fertilizers is at 30% of MRP excluding subsidy.
 
 The Net realizable value of imported Urea is the selling price and
 other entitled compensation as contracted with the Government net of
 variable selling and distribution cost.
 
 The net realizable value of off-spec imported Urea is taken at 40% of
 MRP excluding subsidy.
 
 Average freight incurred on dispatches from silo/factory/ port to
 godown is reduced for arriving at the net realizable value in respect
 of stocks of fertilizers in silo/factory/port.
 
 The net realizable value of non-fertilizer products is taken at the
 year-end lowest selling prices net of variable selling and distribution
 cost.
 
 11.  Trade receivables, other debts, loans and advances are provided
 for as doubtful upon review on case to case basis.
 
 Subsidy receivable from Government overdue over 3 years are provided
 for as doubtful.
 
 12.  Leases
 
 Assets acquired on leases wherein a significant portion of the risks
 and rewards of ownership are retained by the lessors are classified as
 operating leases. Lease rentals paid for such leases are recognized as
 an expense as per the lease terms which is more representative of the
 time pattern of the benefit.
 
 Rental income on leases is accounted for an accrual basis in accordance
 with the terms of the contract. This is more representative of the time
 pattern in which benefit derived from the use of the leased asset is
 diminished.
 
 13.  Taxation
 
 Provision for Current Income Tax is made in accordance with the Income
 Tax Act 1961.
 
 Deferred Tax resulting from timing difference” between book profit
 and taxable profit for the year is accounted for using the tax rates
 and laws that have been enacted or substantially enacted as on the
 balance sheet date. The deferred tax asset is recognized and carried
 forward only to the extent that there is a reasonable certainty that
 the assets will be adjusted in future and for unabsorbed depreciation
 or carry forward of losses where there is a virtual certainty of their
 adjustment in future.
 
 14.  Cash and Cash Equivalents
 
 Cash and cash equivalents in the cash flow statement comprises of cash
 in hand , cash at bank and short term investments with an original
 maturity of three months or less.
 
 15.  Employee Benefits
 
 15.1 Contribution to Provident Fund is accounted for on accrual basis.
 The Provident Fund contributions are made to a Trust administered by
 the Company. The interest rate payable to the members of the Trust
 shall not be lower than statutory rate of interest declared by the
 Central Government under the Employees Provident Funds and
 Miscellaneous'' Provisions Act, 1952 and shortfall, if any, shall be
 made good by the Company. Such shortfall on account of interest, if
 any, is recognized in the Statement of Profit and Loss.
 
 15.2 Company''s defined Contribution made to its Superannuation scheme
 is charged off to Statement of Profit and Loss on accrual basis.
 
 15.3 Employee benefits under Defined Benefit plans
 
 comprising of gratuity, leave encashment on retirement, Post retirement
 medical benefits and long term service award are recognized based on
 the present value of Defined Benefit Obligation based on actuarial
 valuation carried out as on the date of the Balance Sheet. The
 actuarial valuation is done as per Projected Unit Method.
 
 15.4 Actuarial gains and losses are recognized in full in the Statement
 of Profit and Loss for the period in which they occur. Past service
 cost is recognized immediately to the extent that the benefits are
 already vested. The retirement benefit obligation recognized in the
 Balance Sheet represents the present value of the defined benefit
 obligation as adjusted for unrecognized past service cost, and as
 reduced by the fair value scheme of assets, wherever applicable.
 
 16.  Earnings per Share (EPS)
 
 Basic earnings per share is calculated by dividing net profit or loss
 after tax for the year attributable to equity shareholders by the
 weighted average number of equity shares outstanding during the year.
 
 For the purpose of calculating diluted EPS, net profit or loss after
 tax for the year attributable to equity shareholders are divided by the
 weighted average number of equity shares outstanding during the year
 and are adjusted for the effects of all dilutive potential equity
 shares.
 
 17.  Research and Development Expenditure
 
 Revenue Expenditure on Research and Development activity is recognized
 separately and charged to Statement of Profit and Loss.
 
 18.  Revenue Recognition
 
 18.1 Sales are recognized on an accrual basis when all significant
 risks and rewards of ownership are transferred to the buyer and the
 Company retains no effective control of the goods transferred.
 
 18.2 Gross Sales (net of returns) include excise duty, wherever
 applicable.
 
 18.3 Subsidy income is accounted on the quantity sold during the year.
 
 18.4 Recognition of Subsidy is generally made on the basis of in
 principle recognition/approval/ settlement of claims from Government of
 India /Fertilizer Industry Co-ordination Committee.
 
 18.5 Other Income is recognized on an accrual basis.
 
 18.6 Dividend income is recognized when right to receive dividend is
 established.
 
 18.7 Interest Income is recognized when no significant uncertainty as
 to its realization exists and is accounted on time proportion basis at
 contracted rates.
 
 18.8 Scrap, salvaged/waste materials and sweepings are accounted for on
 realization.
 
 18.9 Insurance and other miscellaneous claims are recognized on
 receipt/acceptance of claim.  Contractual pass through incentives,
 benefits, etc. are recognized on receipt basis.
 
 18.10 Debits/Credits Relating to Prior period Income and expenditure
 pertaining to earlier period and up to Rs.  1,00,000/- in each case, are
 not being classified as relating to prior period”.
 
 18.11 Prepaid Expenses
 
 Individual expense up to Rs.25,000 is not considered in classifying
 prepaid expenses.
 
 19.  Contingent Liabilities and Provisions
 
 Claims against the Company not acknowledged as debts relating to normal
 business transactions and show cause notices and demands disputed by
 the Company are treated as Contingent Liabilities after careful
 evaluation of facts.  Provision in respect of contingent liabilities if
 any, is made when it is probable that a liability may be incurred and
 the amount can be reasonably estimated.
 
 A provision is recognized when the Company has a present obligation as
 a result of past event; it is probable that 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 estimate.