The financial statements are prepared under the historical cost convention on accrual basis of accounting in accordance with the applicable accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006 (AS), Generally Accepted Accounting Principles (GAAP) in India and the relevant provisions of Companies Act, 1956 (The Act).

1.2) USE OF ESTIMATE :

The preparation of financial statement requires estimates & assumptions that affect the reported amount of assets & liabilities on the Balance Sheet date and the revenues and expenses during the year. Difference, if any, between the actual & estimate is recognised in the year in which the same are acknowleged / materialised.

1.3) FIXED ASSETS:

Fixed Assets are stated at cost (of acquisition or construction, as the case may be) less accumulated depreciation and impairment losses, if any. All direct expenses, borrowing cost and other expenses during construction period are capitalized.

1.4) INTANGIBLE ASSETS:

Intangible assets are recognized only if it is probable that the future economic benefits that are attributable to the assets will flow to the company and the cost of the assets can be measured reliably. The intangible assets are recorded at cost and are carried at cost less accumulated amortization and impairment losses, if any.

1.5) CAPITAL WORK IN PROGRESS:

Capital Work in Progress comprises cost of Fixed Assets not yet commissioned, incidental expenses, borrowing cost and advance for capital expenditure.

1.6) DEPRECIATION / AMORTISATION :

a) Depreciation on Sulphuric Acid Plant, Single Super Phosphate and Granulated Single Super Phosphate Plants is provided on Straight Line Method (modified for multiple shift/Continuous Process Plants wherever applicable) over the useful life of the respective Plants as envisaged by a Government approved Chartered Engineer which is as under

Plant Description                           Useful Life in Years

                                          Single              Double
                                          Shift Basis      Shift Basis

Single Super Phosphate Plant                   12            7.75

Single Super Phosphate Gran. Plant             12            7.75

Sulphuric Acid Plant                           -               -

Plant Description                        Triple Shift     Continuous
                                         Basis            Process Plant

Single Super Phosphate Plant              5.50                 -

Single Super Phosphate Gran. Plant        5.50                 -

Sulphuric Acid Plant                      -                 10.80

b) Depreciation on Plant and Machinery (other than those specified in para 1.6(a) above) and other Fixed Assets is provided on Straight Line Method on the basis of useful life specified in Schedule II to the Companies Act, 2013. Fixed assets costing below Rs. 5000.00 are fully depriciated in the year of addition.

Depriciation is provided on pro-rata basis with reference to the date of addition / deletion in respect of addition to / deletion of fixed assets.

c) Computer Software being intangible asset is amortized over a period of 5 years on "Straight Line Method".

1.7 REVENUE RECOGNITION :

a) Sales are recognised on despatch of goods to costomers. Sales are shown inclusive of exice duty but excluding dealer margin & sales tax

b) Subsidy is recognised when certainly of receipt is established.

c) All other incomes are accounted for on accrual basis.

1.8 CENVAT CREDIT

Cenvat Credit availed in respect of capital goods is adjusted from cost of asset and in respect of other item is adjusted from related expenses.

1.9 BORROWING COSTS

Borrowing costs that are attributable to the acquisition/construction of qualifying assets are capitalized as part of cost of such assets. A qualifying assets is an assets that requires a substantial period of time to get ready for its intended use. All other borrowing cost are recognized as an expense in the year in which they are incurred.

1.10 INVENTORIES:

a) Raw Materials at factory is valued at lower of cost (determined on Annual weighted average basis) or net releasable value; whereas stock lying at port or in transit is valued at lower of direct purchase cost or net realizable value.

b) Stock of Finished Goods, is valued at lower of cost (determined on direct Annual cost basis) or net realizable value. Excise Duty is not considered while ascertaining cost.

c) Work in Process is valued at lower of estimated cost or net realizable value.

d) Chemicals, Stores and Spares are valued at lower of cost (determined on FIFO basis) or estimated realizable value.

e) Waste and Scraps are determined as at the close of the year and are valued at estimated realizable value.

1.11 TAXES ON INCOME :

Provision for tax on income for the year (i.e. current tax) is made after considering the various deductions / relief admissible under the Income Tax Act, 1961. Provision for tax effect of timing difference (i.e. Deferred tax ) is made in accordance with the provisions of Accounting Standard 22, Accounting for Taxes on Income (AS-22) issued by the Institute of Chartered Accountants of India.

1.12) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provisions are recognized in respect of obligations where, based on the evidences available, their existence at the Balance Sheet date is considered probable. Contingent liabilities are disclosed by way of notes on accounts in respect of obligations where, based on the evidences available, their existence at the Balance Sheet date is considered not probable. Contingent assets are not recognized in the accounts.

1.13 IMPAIRMENT OF ASSETS:

The company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than the carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit & Loss. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

1.14 GOVERNMENT GRANTS :

Grants are recognized when certainty of receipt is established. Grant related to fixed assets are adjusted with the gross block / cost of fixed assets and grants of revenue nature are adjusted with the respective expenditure / treated as income as the case may be.

1.15 EMPLOYEE BENEFITS :

a) Companies contribution to provident fund and family pension fund are charged to Profit & Loss account.

b) Provision of gratuity is determined on the basis of actuarial valuation as at the end of the year and is charged to statement of Profit and Loss each year.

c) Provision for leave encashment (treated as short term in nature) is done on the basis of leaves accrued as at the end of year.

d) Termination benefits are recognized as an expense as and when incurred.

1.16 RESEARCH & DEVELOPMENT EXPENDITURE :

Expenditure of revenue nature is charged to the statement of Profit & Loss and that of capital nature is capitalized as fixed assets.

1.17 Prior period items, if material, are shown separately.