i) Basis of Accounting
 
 The financial statements have been prepared under the historical cost
 convention, except for certain fixed assets which are revalued, on
 accrual basis and in accordance with the generally accepted accounting
 principles in India (Indian GAAP).  The said financial statements
 comply with the relevant provisions of the Companies Act, 1956 (the
 Act) and the Accounting Standards notified by the Central Government of
 India under Companies (Accounting Standards) Rules, 2006 as applicable.
 
 ii) Use qf 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 end. Although these estimates are based upon management''s best
 knowledge of current events and actions, actual results could differ
 from these estimates. Difference between the actual results and
 estimates is recognised in the period in which the results are known/
 materialized.  *
 
 iii) Fixed Assets and Depreciation
 
 Fixed assets are stated at historical cost (net of CENVAT7VAT wherever
 applicable) less accumulated depreciation / amortisation. Cost
 comprises of direct cost, related taxes, duties, freight and
 attributable finance costs (Refer (xi) below) till such assets are
 -ready-for its intended use. Capital work fn progress is stated at the
 amount expended up to the Balance sheet date. Machinery spares used in
 connection with a particular item of fixed asset and the use of which
 is irregular, are capitalized at cost net of CENVAT / VAT, as
 applicable.
 
 Certain assets have been revalued as on 31 March 1996, 31 March 1999,
 31 March 2000, 1 April 2002, 1 April 2003 and 31 March 2006 and the
 resultant surplus has been added to the cost of the assets with a
 corresponding credit to Revaluation Reserve Account. (Refer Note B-5)
 
 Depreciation on fixed assets (other than fixed assets relating to Pen-G
 unit) has been provided on Straight Line Method (SLM) in accordance
 with and in the manner prescribed in Schedule XIV to the Companies Act,
 1956. In respect of assets whose useful life has been revised, the
 unamortised depreciable amount has been charged over the revised
 remaining useful life.
 
 iv) impairment of Assets
 
 At each balance sheet date, the carrying values of the tangible and
 intangible assets are reviewed to determine whether there is any
 indication that those assets have suffered an impairment loss. If any
 such indication exists, the recoverable amount of
 
 the asset is estimated in order to determine the extent of the
 impairment loss (if any). Where there is an indication that there is a
 likely impairment loss for a group of assets, the company estimates the
 recoverable amount of the group of assets as a whole, and if the
 carrying value is less than the recoverable amount, the impairment loss
 is recognized.
 
 v) investment-
 Investments that are intended to be held for more than a year, from the
 date of acquisition, are classified as long term .  investments and are
 carried at cost. However, provision for diminution is made in the value
 of investments if such diminution is other than of temporary in nature.
 Current investments are stated at lower of cost or fair value.
 
 vi) inventories
 
 Inventories are valued at lower of cost and net realizable value. Cost
 includes freight, taxes and duties net of CENVAT / VAT credit wherever
 applicable. Customs duty payable on material in bond is added to the
 cost. The method of determining cost of various categories of
 inventories of various divisions is as follows:
 
 Stores, spares and raw materials - Monthly weighted average
 method/first in first out method/annual average method
 
 Work-in-Process and finished - Average cost of last quarter''s
 production/average annual cost, computed on full goods absorption
 costing method
 
 By-Products - At Net realizable value
 
 Contract in Progress - Work in Process on construction contracts
 reflects proportionate value of inputs and expenses on contracts yet to
 be billed
 
 vii) Revenue Recognition
 
 (a) Sales revenue is recognized at the point of despatch to customers.
 Sales include amounts recovered towards excise duty and exclude sales
 tax.  ''
 
 (b) Nutrient Based Subsidy Scheme (NBS) has been implemented by
 Government of India for Phosphatic Fertilisers effective from 1 April
 2010. Concession allowable under the above scheme (NBS) with respect to
 Phosphatic fertilisers is recognized at the rates notified by the
 Government for the year 2010-11. Concession is recognized on the basis
 of the receipt of material at the warehouse/sale at the factory gate to
 dealers.
 
 Under the New Pricing Scheme for Urea, the Government of India
 reimburses in the form of subsidy to the Fertiliser Industry, the
 difference between the cost of production and the selling price
 realised from the farmers, as fixed by the Government from time to
 time. This has been accounted on the basis of movement of fertiliser
 from the factory and receipt of the same at the warehouse/Dealer point,
 as per the procedure prescribed by the Government and not on the basis
 of ultimate sales. The said amount has been further adjusted for input
 price escalation/de-escalation as estimated by the management based on
 prescribed norms.
 
 (c) Income on long-term contract
 
 Income on long-term contracts is recognized on percentage completion
 method and measured by reference to the percentage of cost incurred up
 to the reporting date to the estimated total cost for each contract.
 Provision for anticipated losses on the long-term contracts is made as
 and when such loss is established.
 
 (d) Dividend Income
 
 Dividend Income is recognized, when the right to receive the payment is
 established.
 
 viii) Foreign Currency Transactions
 
 Foreign currency transactions are recorded at the rate of exchange
 prevailing on the date of the transaction. Monetary assets &
 liabilities outstanding at the year-end are translated at the rate of
 exchange prevailing at the year-end and the gain or loss, is recognized
 in the profit and loss account.
 
 Exchange differences arising on actual payments/realizations and
 year-end restatements are dealt with in the Profit & Loss Account.
 Investments in Foreign currencies are reported using the exchange rate
 at the date of the transaction.
 
 ix) Employee Benefits
 
 a.  Defined Contribution Plan
 
 (i) Fixed contributions paid/payable to (i) the Superannuation Fund
 pertaining to Officers and Executives which is administered by the
 Company nominated trustees and being managed by Life Insurance
 Corporation of India, (ii) the Superannuation Fund pertaining to staff
 members which is administered by Company nominated trustees and (iii)
 the Employee State Insurance Corporation (ESIC) are charged to the
 Profit and Loss Account.
 
 Company also contributes to a Government administered Pension Fund on
 behaff of its employees, which are charged to the Profit and Loss
 Account.
 
 (ii) Fixed Contributions made to the Provident Fund managed by the
 Regional Provident Fund Commissioner are charged to Profit & Loss
 account.
 
 b.  Defined Benefit Plan ''
 
 The liability for Gratuity to employees, as at the Balance Sheet date
 is determined on the basis of actuarial valuation using Projected Unit
 Credit method as on the Balance Sheet date, is funded with a Gratuity
 Trust managed by Company nominated Trustees. The liability thereof
 paid/payable is absorbed in the Profit & Loss account. The actuarial
 gains/ losses are recognised in the Profit and Loss Account.
 
 c.  Long Term Compensated Absences
 
 In respect of long term portion of compensated absences [Leave
 benefits], the liability is determined on the basis of actuarial
 valuation using Projected Unit Credit method as on the Balance Sheet
 date and is provided for.
 
 d.  Short Term Employee Benefits
 
 Short term employee benefits including accumulated compensated absences
 determined as per Company''s policy/scheme are recognized as expense
 based on expected obligation on undiscounted basis.
 
 x) Research and Development Expenditure
 
 All revenue expenditure related to research and development are charged
 to the respective heads in the Profit and Loss Account.  Capital
 expenditure incurred on research and development is capitalized as
 fixed assets and depreciated in accordance with the depreciation policy
 of the Company.
 
 xi) Borrowing costs
 
 Borrowing costs, if any, are capitalized as part of qualifying fixed
 assets when it is possible that they will result in future economic
 benefits. Other borrowing costs are expensed.
 
 xii) Segment Reporting
 
 The generally accepted accounting principles used in the preparation of
 the financial statements are applied to record revenue and expenditure
 in individual segments.
 
 a) Revenue and expenses have been identified to segments on the basis
 of their relationship to the operating activities of the segment.
 Revenue and expenses which relate to the enterprise as a whole and are
 not allocable to segments on a reasonable basis, have been included
 under unallocated corporate expenses.
 
 b) Investments, advance towards investments and other advances, which
 are not allocable to segments, are excluded from segment capital
 employed.
 
 xiii) Taxation
 
 Current tax is determined on income for the year chargeable to tax in
 accordance with the Income Tax Act, 1961.
 
 Deferred tax is recognized for all the timing differences. Deferred Tax
 assets in respect of unabsorbed depreciation and carry forward losses
 are recognized if there is virtual certainty that there will be
 sufficient future taxable income available to realize such losses.
 Other deferred tax assets are recognized if there is reasonable
 certainty that there will be sufficient future taxable income available
 to realize such assets.
 
 xiv) Provisions. Contingent Liabilities and Contingent Assets
 
 Provisions are recognized only when there is a present obligation as a
 result of past events and when a reliable estimate of the amount of
 obligation can be made. Contingent liability is disclosed for (i)
 Possible obligation which will be confirmed only by future events not
 wholly within the control of the Company or (ii) Present obligations
 arising from past events where it is not probable that an outflow of
 resources will be required to settle the obligation or a reliable
 estimate of the amount of the obligation cannot be made. Contingent
 assets are not recognized in the financial statements.