Annual Report 2005 06

THE FERTILIZER
CORPORATION
OF INDIA LIMITED
50th Ann
ual Repor
t 2005 - 2006
Annual
Report
CONTENTS
Board of Directors, Principal Executives,

Chief Executives-Units, Units, Offices,
Registered Office, Auditor, Bankers and
Legal Advisers
Notice
Directors Report
Comments of the Comptroller and Auditor

General of India
15
Auditors Report
16
Balance Sheet
24
Profit & Loss Account
26
Schedule 1 to 28
28
Schedule-29
Accounting Policies & Notes
Forming Part of Accounts
59
Balance Sheet Abstract and

Companies General Business Profile
69
Cash Flow Statement
70
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
BOARD OF D1RECTORS
Shri Deepak Singhal, IAS
Joint Secretary, Deptt. of Fertilizers,
Ministry of Chemicals & Fertilizers,
Additional Charge of Chairman & Managing Director
(w.e.f. 14.6.2006)
Shri B.K. Sinha, IAS
Joint Secretary, Deptt. of Fertilizers,
Ministry of Chemicals & Fertilizers
Additional Charge of Chairman & Managing Director
(Upto 14.6.2006)
Ms. Swatantra K. Sekhon, IAS
Executive Director, FICC, Deptt. of Fertilizers,
Additional Charge of Chairperson & Managing Director
(Upto 31.7.2005)
Shri Tejinder Singh Laschar, I.Ec.S.
Economic Adviser, Deptt. of Fertilizers,
Ministry of Chemicals & Fertilizers (Upto 13.6.2005)
Dr. Rajneesh Goel, IAS
Director, Deptt. of Fertilizers,
Ministry of Chemicals & Fertilizers (Upto 13.6.2005)
Ms. Sofia Dahiya
Ministry of Chemicals & Fertilizers,
Additional Charge of Director (Finance) (w.e.f. 21.3.2006)
Shri A.P. Singh, IRS
Additional Charge of Director (Finance) (Upto 31.3.2006)
Shri R.C. Meena
Dy. Secretary, Deptt. of Fertilizers,
Ministry of Chemicals & Fertilizers (w.e.f. 13.6.2005)
Shri A.N. Murty
Dy. Secretary, Deptt. of Fertilizers,
Ministry of Chemicals & Fertilizers (w.e.f. 13.6.2005)
Shri R.N. Dash
Ministry of Chemicals & Fertilizers, (w.e.f. 16.1.2006)
CHIEF EXECUTIVESUNITS
Shri Jai Prakash
Actg. General Manager, Sindri
Shri A.N. Tiwari
Actg. General Manager, Gorakhpur
Shri K. Ratna Kumar
Actg. General Manager, Ramagundam
Shri P.K. Patnaik
Actg. General Manager, Talcher
Shri Koshy Abraham
Incharge, Korba.
UNITS/OFFICES
Sindri
Jharkhand
Gorakhpur
Uttar Pradesh
Ramagundam
Andhra Pradesh
Talcher
Orissa
Korba Division
Chhatisgarh
Central Office
NOIDA (U.P.)
REGISTERED OFFICE
7, Institutional Area,
SCOPE Complex, Core III,
Lodi Road, New Delhi-110003
AUDITOR
M/s. H.K. Choudhry & Co.,
Chartered Accountants,
New Delhi.
BANKERS
State Bank of India
State Bank of Hyderabad
Union Bank of India
State Bank of Patiala
LEGAL ADVISERS
M/s. J.B. Dadachanji Ravinder Narain Mathur & Co.,
Advocates, New Delhi
M/s. Fox & Mandal,
Advocates, Kolkata & New Delhi
M/s. Anjali K. Varma & Associates,
M/s. Arora & Associates,
Advocates, NOIDA
M/s. Dewan & Co.,
Advocates, Delhi
M/s. G.. Joshi & Associates,
M/s. K.R. Chawla & Co.,
M/s. Saxena & Co.,
Advocates, Delhi
PRINCIPAL EXECUTIVES
Shri Manoj Kumar, IAS
Chief Vigilance Officer (Additional Charge) (w.e.f. 6.9.2005)
Shri Man Singh
Actg. General Manager
OFFICER ON SPECIAL DUTY
Shri K.L. Rao
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
NOTICE
Notice is hereby given that the 50 th Annual General Meeting of the Shareholders of The Fertilizer
Corporation of India Limited will be held at the Conference Room, Department of Fertilizers, Shastri
Bhawan, New Delhi - 110 001 on Thursday, the 28th September, 2006 at 4.30 P.M. to transact the following
business : 1.
To receive and adopt the Directors Report to the Shareholders, the Balance Sheet and Profit and
Loss Account along with the Auditors Reportfor the year ended 31st March, 2006.
2.
To consider and, if thought fit, to pass, with or without modification, the following resolution as an ordinary
resolution : Resolved that the remuneration would be payable to the Statutory Auditors to be appointed by the
Comptroller & Auditor General of India (CAG) for the financial year 2006-2007 be fixed by the Board
of Directors of the Corporation.
By Order of the Board
Sd/(Sofia Dahiya)
Director (Finance)
Dated : September 2, 2006
NOTE: A Shareholder entitled to attend and vote at the meeting is entitled to appoint proxy to attend and
vote instead of himself. A proxy need not be a Shareholder of the Company.
To :
All Shareholders.
Copy to :
1.
M/s. H.K. Chaudhry & Co.,
Chartered Accountants,
1/9B, Jindal House,
Asaf Ali Road,
New Delhi-110 002.
2.
Chairman, Audit Committee.
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
DIRECT
ORS REPOR
T
DIRECTORS
REPORT
1.0
Your Directors hereby present their 50th Annual Report of the Corporation together with the audited
accounts and the Auditors Reportfor the year ended 31st March, 2006.
2.0
FINANCIAL RESUL
TS
RESULTS
The Corporation incurred a net loss of Rs.1298.31 crore in 2005-2006 as against Rs. 1209.10 crore
during 2004-2005. The loss has been arrived at after charging interest of Rs. 1307.79 crore (previous
year Rs. 1203.40 crore) including penal interest on Government of India loans of Rs.832.96 crore (previous
year Rs.721.82 crore) and after providing for depreciation of Rs.0.31 crore (previous year Rs.0.32 crore).
The financial results are given below:
(Rs./Crore)
Year
Operating
Profit/Loss
(+)
(-)
Depreciation
Interest
Net
Profit/Loss
(+)
(-)
Net loss after prior

period adjustment
2005-06
(+)
9.17
0.31
1307.79
(-) 1298.31
(-) 1299.01
2004-05
(-)
5.38
0.32
1203.40
(-) 1209.10
(-) 1209.85
3.0
FINANCIAL RESOURCES
3.1
SHARE CAPIT
AL
CAPITA
The subscribed capital and paid up capital remains Rs.750.92 crore.
3.2
LOAN
During the year the Corporation has not received any loan from Government for non-plan expenditure.
The loan and interest payable position up to the year-end was as follows:
Rs./Crore
2006
2005
385.78
385.78
Non-plan loan
2333.02
2333.02
Overdue interest
9325.03
8007.03
12043.83
10725.83
From Government of India

Plan loan
Total (a)
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
Rs./Crore
2006
2005
5.00
21.00
Overdue interest* (Up to 31.3.2000)
52.85
52.85
Total (b)
57.85
73.85
12101.68
10799.68
Fr
om Pub
lic Sector Under
takings/Financial Institutions
rom
Public
Undertakings/Financial
Loan
Grand Total (a+b)
*No further interest is provided on loans in view of severe financial constraints.

4.0
UER
CONTRIB
UTION TO NA
CONTRIBUTION
NATIONAL
EXCHEQU
TIONAL EXCHEQ
The Corporation made a contribution of Rs. 0.54 crore by way of sales tax, excise duty, income tax,
customs duty, electricity duty to the central and state exchequers during the year.
5.0
PRODUCTION PERFORMANCE
There was no production of urea at any of the plants during the year, due to the decision of the GOI
for closure of the plants.
6.0
PLANT ST
ATUS
STA
Activities at plants are restricted to security arrangements and settlement of dues of employees.
7.0
MARKETING OPERA
TIONS
OPERATIONS
In view of decision for closure of all the fertilizer units of the Corporation and there being no production
during the year, there is no marketing activity. All the marketing offices outside Delhi have been closed.
8.0
BIFR REFERENCE
8.1
While the Company was before the Honble Delhi High Court, challenging the orders dated 2.11.2001
of BIFR for winding up of the Corporation, the Department of Fertilizers vide their communications dated
30.7.2002 and 10.9.2002 conveyed the decision of GOI for closure of all fertilizer units of the Corporation
and release of all the employees on VSS.
8.2
Pursuant to the Governments orders for closure of all the fertilizer units, 5240 numbers of employees
were released on VSS in the year 2002-03, 273 persons during the year 2003-04, 7 persons during
2004-05 and 4 persons during 2005-06. At present 61 VSS optee employees are retained. They are
on the rolls of the Corporation to look after the safety and security of the properties of the Corporation
and discharge the statutory obligations of the Company.
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
8.3
The Honble BIFR vide their recommendations dated 17.5.2004 conveyed the sanction of the de-merger
of J.M.O w.e.f 1-4-2003 which has already been given effect. And while confirming the winding up of
the Company has given the following directions:
a)
The Bench allow ed the sale of the assets of the unviable units of the FCI under Section 20(4)
of the Act through an Assets Sale Committee.
b)
An Assets Sale Committee (ASC) to decide on the sale of assets of unviable units of FCIL shall
be constituted by the Government of India, with one nominee of the rank of Joint Secretary/
Additional Secretary from the MCF, CMD of the company or his nominee, representatives of PNB
and SBI (OA) not below the rank of DGM and a representative of the concerned State Governments
if land sale is involved. The nominees would be appointed within one month of the hearing date
and ASC would start functioning at the end of one month from the hearing date, without waiting
for such nominations.
c)
The GOI and the company shall make proper arrangements for the safeguard of the assets
of the company by appointing security and insurance, etc. The expenses incurred thereon shall
be met out of the sale proceeds.
d)
The Department of Atomic Energy (DAE) was directed to serve a copy of their application upon
the concerned Central and State Government departments and the F.C.I and OA and reach an
amicable settlement in the matter. In case differences persist, the matter may be referred by
the GOI to the BIFR along with the opinions of the concerned departments/organizations, so
as to enable the Board to issue final directions in the matter. Meanwhile, the assets covered
by the DAEs application in question shall not be put to sale.
e)
The admissible dues of the workers of Sindri and Gorakhpur units should be cleared from the
net sale proceeds of the assets after obtaining the orders of the concerned Official Liquidator.
The constitution of ASC Committee is in process.

The BIFR has forwarded its recommendations dated 17.05.2004 to the Registrar, Honble High Court
of Delhi on 27.05.2004. The same have been registered as CP: 183 of 2004 in the High Court
. The
matter has been heard by Honble Company Judge, Delhi High Court on 19.07.2004, 04.10.2004, 17.01.2005
and 12.07.2005 on which date the matter has been adjourned to 22.02.2006 and 16.05.2006. Honble
High Court in the hearing on 4.5.2006 held that in case no concrete proposal / scheme is received
by next date of hearing, appropriate order will be passed and no further adjournment will be granted
in the matter. Based on this Board has submitted the proposal to the Ministry for restructuring of the
Company which includes the proposal for waiver of GOI loan and interest thereon. The matter has
been adjourned to 11.08.2006.
9.0
VIGILANCE DEP
AR
TMENT - ITS A
CTIVITIES AND A
CHIEVEMENTS FOR THE YEAR 2005-2006
DEPA
RTMENT
ACTIVITIES
ACHIEVEMENTS
Vigilance Department is headed by Chief Vigilance Officer at the Corporate Office for attending to vigilance
work with officers and staff posted in vigilance wings of Units/Offices of the Corporation.
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
10.0
USE OF HINDI AS OFFICIAL LANGU

AG E
LANGUA
Annual programme and instructions and all other directives issued by the Government regarding progressive
use of Hindi are complied with by the Corporation. However, due to closure of the company, these
activities are kept limited.
11.0
INDUSTRIAL RELA
TIONS,
RELATIONS,
MANAGEMENT ETC
.
ETC.
HUMAN
RESOURCE, W E L F
ARE,
FARE,
11.1
The staff strength as on 31.3.2006 is 60 retained. They are on the rolls for looking after the safety
and security of the properties of the Corporation and to discharge statutory obligations of the Company.
Due to the closure of all Units, safety rules and procedures were follow ed to a limited extent for disposal
of hazardous and inflammable materials.
12.0
EMPLO
YMENT OF SCs / STs, EX-SER
VICEMEN AND PHYSICALL
Y HANDICAPPED PERSONS
OYMENT
EX-SERVICEMEN
PHYSICALLY
SAFETY
, P
AR
TICIP
A TIVE
SAFETY,
PA
RTICIP
TICIPA
G overnments directives with regard to reservation of posts for SCs/STs/Ex-servicemen, including physically
handicapped, were kept in view. However, no recruitment has been made during the year.
13.0
PA R
TICULARS OF EMPLO
YEES
RTICULARS
EMPLOYEES
Information in accordance with section 217(2A) of the Companies Act, 1956 is NIL
.
14.0
ENERGY CONSER
VATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS
CONSERV
AND OUT GO.
In view of Governments decision for closure of the Corporation there was no scope to take up any
measures for energy conservation, technology absorption during the year. Foreign Exchange earning
were nil during the year.
15.0
A UDIT
ORS AND THEIR REPOR
T
UDITORS
REPORT
The accounts of the Corporation were scrutinized and audited by M/s.H.K. Chaudhry & Company, Chartered
Accountants, New Delhi.
16.0
DIRECT
ORS RESPONSIBILITY ST
AT E M E N T
DIRECTORS
STA
16.1
Pursuant to the requirement under section 217(2AA) of the Companies Act 1956, with respect to Directors
Responsibility Statement, it is hereby confirmed:
That in the preparation of the annual accounts for the financial year ended 31st March, 2006, the applicable
accounting standards have been follow ed along with proper explanation relating to material departures.
That the Directors have selected such accounting policies and applied them consistently and made
judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
state of affairs of the company at the end of the financial year and of the profit or loss of the company
for the year under review.
That the Directors have taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act 1956, for safeguarding the assets
of the Company and for preventing and detecting fraud and other irregularities.
That the Directors have prepared the annual accounts for the financial year ended 31st March, 2006
on not going concern basis.
16.2
16.3
BO
ARD OF DIRECT
ORS
OARD
DIRECTO
From
To
1. Shri Deepak Singhal, C&MD
14-06-2006
Till date
2. Shri R N Dash, Director
16-01-2006
Till date
3. Ms. Sofia Dahiya , Director (Finance)
21-03-2006
Till date
4. Shri A.P. Singh, Director (Finance)
23-03-2004
21-03-2006
5. Shri R. C. Meena, Dy. Secretary
13-06-2005
Till date
6. Shri A N Murty, Dy. Secretary
13-06-2005
16-01-2006
7. Shri B K Sinha, C&MD
01-08-2005
14-06-2006
There were 8 meetings of Board of Directors and 2 meetings of Audit Committee during the year.
The details of meetings that Directors attended are given below :
Name
Board Meetings
Audit Committee Meetings
1. Shri B. K. Sinha
2. Ms. Sofia Dahiya
3. Shri R.N. Dash
4. Shri R.C. Meena
5. Shri A.N. Murty
6. Shri A.P. Singh
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
16.4
The information pursuant to Part IV of Schedule VI to the Companies Act, 1956 regarding Balance
Sheet Abstract and Companys General Business Profile as at 31st March, 2006 is annexed with the
accounts.
17.0
AUDIT COMMITTEE
In the amended Companies Act, 1956, a new section 292A i.e. Audit Committee has been inserted,
as a measure for better corporate governance. Though the said provision is not applicable in case
of FCIL being Private Limited Company,for better corporate governance, Audit Committee has been
reconstituted by the Board by circulation comprising of the following Directors:
18.0
(1)
Shri R. N. Dash, Director
Chairman
(2)
Ms. Sofia Dahiya, Director (Finance)
Member
(3)
Shri R. C. Meena, Dy. Secretary
Member
ACKNOWLEDGEMENTS
The Directors place on record their appreciation of the services of the employees during the year.The
Directors gratefully acknowledge the support received from the various Ministries and Departments of
the Government of India and State Governments and in particular the Secretary, Department of Fertilizers
and other officers of the Department for their guidance, cooperation and support
.
The Directors also place on record their sincere thanks to the Comptroller and Auditor General of India,
Statutory Auditors and Consortium of Banks for their valued cooperation and support
.
For and on behalf of the Board of Directors
Sd/(Sofia Dahiya)
Director (Finance)
New Delhi
Dated: 30.8.2006
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
ADDENDUM TO DIRECT
ORS REPOR
T
DIRECTORS
REPORT
Comments of Statutor
y A
uditor
s (Ref
erence Statutor
y A
uditor
t dated 30.8.2006) and Explanations
Statutory
Auditor
uditors
(Reference
Statutory
Auditor
uditors
Report
s Repor
of the Compan
y.
Company
A.O.No. Comments On
Replies of the Compan

y
Company
3.2
The provisions under Section 383-A of the Companies

Act, 1956 provides that it shall be a defence to prove
that all reasonable efforts to comply with the provisions
of Sub-Section (1) were taken or that the financial
position of the Company were such that it was beyond
its capacity to engage a whole-time Secretary.
The Corporation did not have a Company

Secretary after 2nd July, 2003, that is the date
of death of the Corporations Company Secretary, as required in terms of Section 383A
of the Companies Act, 1956.
Perusal of the accounts for the year ending 31.3.2006

would show that the Company has incurred a loss of
Rs. 1299.01 crore. The accumulated losses as on
31.3.2006 stand at Rs.12741.75 crore.The Company
has incurred heavy cash losses. In the circumstances,
it is quite clear that it is beyond the capacity of the
Company to employ a whole time Company Secretary.
Further,VSS has been offered by the Company to all
its employees in the year 2002. The Gol circular for
granting of VSS for employees indirectly imposes a
ban on the Companyfor making any fresh recruitments.
The existing Company Secretary of the Company had
expired after the commencement of VSS. Keeping in
view the impediments in fresh recruitments and as the
financial position of the Company was beyond its
capacity to engage a whole-time Company Secretary,
no Company Secretary could be appointed.
3.3
No Provision has been made for the

following :
3.3.1
The Additional Custom Duty of Rs.580 lakh

demanded by Customs Authorities in respect
of Korba Project for which attachment proceedings have been initiated. (Refer Note No.
6.1)
Ministry of Finance had decided to keep the demand

in abeyance. Hence, no provision was made (Note
No. 6.1)
3.3.2
Penal interest amounting to Rs. 13753.35 lakh

payable on Government of Indias loans upto
31st March, 1991 (Refer Note No.6.2)
This has been disclosed in the Notes of Accounts (Note

No.6.2)
10
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
A.O.No. Comments On

y
Company
3.3.3
Interest amounting to Rs. 188.51 lakh (accum ulated upto 31st March, 2006 Rs.989.11 lakh)
and Rs.2556.91 lakh (accumulated upto 31st
March, 2006 Rs. 10550.03 lakh) payable on
loans of Central W arehousing Corporation and
Life Insurance Corporation respectively (Refer
Note No.6.3)
This has been disclosed in Notes to Accounts (Note

No.6.3)
3.3.4
Interest amounting to Rs.468.97 lakh (accumulated upto 31st March, 2006 Rs.2477.19
lakh) payable to Indian Oil Corporation
Limited for delayed payments towards supply
of oil (Refer Note No.6.7).
This has been disclosed in Note to Accounts (Note

No.6.7)
3.3.5
Payments of Rs.67 lakh tow ards ex-gratia

made under Voluntary Separation Scheme to
the staff members in the earlier years and
shown under Loans and Advances, on misinterpretation of respective clause of the
scheme for which legal action of recovery has
been initiated by the Corporation (Refer Note
No.5.1)

No.5.1)
3.4
W e are unable to express our opinion on the

extent and consequential impact on state of
affair/loss for the year in respect of :-
3.4.1
Realisability of License Fee Rs.22.18 lakh

recoverable from SSB (Refer Note No.5.2

No.5.2)
3.4.2
Unascertained interest/damages on account

of creditors lying unadjusted/un-reconciled
since earlier years and non-confirmation and
non-reconciliation of principal and interest
accrued and due as well as accrued but not
due on loans obtained from Government of
India, Life Insurance Corporation of India and
Central W arehousing Corporation Limited and
in respect of unconfirmed balances in other
personal accounts (Refer Note No.9.3)

No.9.3)
11
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
A.O.No. Comments On

y
Company
3.4.3
Loss, if any, that may arise on disposal of

assets retired from active use and held for
disposal (Refer Note No.9.4)

No.9.4)
3.4.4
Loss, if any, that may arise on disposal of

inventory (Refer Note No.9.5)
The adjustment of shortages/damages etc., noticed

during physical verification, where necessary, have been
done. Since, the realizable value of the same is more
than the book value, no further diminution in the value
of inventory is considered necessary.
3.4.5
Non-accounting of 900 acres of land at Korba

(value not ascertained) received free of cost
(Refer Note No.4.3)

No.4.3)
3.4.6
Non accounting of lease rent recoverable from

M/s. ACC Ltd. for railway siding (value not
ascertained) (Refer Note No.5.3)

No.5.3)
3.4.7
The liability that may arise on final settlement

with Punjab National Bank, one of the consortium members, who have not agreed to
the one time settlement amount unascertained
(Refer Note No.6.8)
As OTS amount was arrived at in consultation with

all the consortium banks, no liability is considered
necessary (Note No.6.8)
12
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
ANNEXURE REFERRED TO IN P
ARA
GRAPH 1 OF THE A
UDIT
ORS
PA
AGRAPH
AUDIT
UDITORS
REPOR
T ON A
CCOUNTS FOR THE YEAR ENDED 31s1 MARCH, 2006.
RT
ACCOUNTS
A.O.
NO.
COMMENTS/OBSER
VATIONS OF T H E
RV
ST
ATUT
OR
Y AUDIT
ORS
STA
TUTO
RY
AUDITO
REPLIES OF THE BO
ARD OF DIRECT
ORS
BOARD
DIRECTORS
1.a)
The Corporation has generally maintained

proper records to show full particulars including quantitative details and situation of fixed
assets including retired assets held for disposal except in some units/division where for
some items particulars, location and quantitative details have not been mentioned or
correct locations are not stated. Further, in
some units/division fixed asset records are not
updated.
Physical verification of fixed assets,inventory etc. have

been carried out during 2005-06 and where necessary
adjustment of shortages/damages, have been done.
Moreover, during physical verification location and
quantitative details etc. have also been mentioned.
b)
W e are informed that physical verification of

fixed assets other than plant and machinery
has been carried out by outside professional
firms during the year except at Korba and
Central Office. W herever the discrepancies
have been found, provision for shortages
have been made except Sindri Unit where the
process of reconciliation as explained to
us is in process. In respect of Korba and
Central Office, we are unable to comment on
discrepancies, i
f any, in absence of physical
verification/reconciliation with book records.
The process of reconciliation at Sindri has since been

completed and where necessary, adjustments have
been made during the current year. The physical
verification of Korba was last done during 2002-03 by
PDIL. Adequate steps have been taken to safeguard
the assets of stores and spares by sealing godowns
immediately.
c)
In view of the closure order issued by the Govt.

of India, the going concern assumption has
been affected. However, the Corporation has
not disposed off substantial partoffixed assets
during the year though major part of the fixed
assets have been retired from active use and
are held for disposal.
No comments.
As explained to us, all inventories except stock

at Korba have been physically verified during
the year by outside professional firms appointed for the purpose.
The physical verification of Korba was last done during

2002-03 by PDIL. Adequate steps have been taken
to safeguard the assets of stores and spares by sealing
godowns immediately.
2.a&c)
13
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
COMMENTS/OBSER
VATIONS OF T H E
RV
OR
Y AUDIT
ORS
ST
ATUT
STA
TUTO
RY
AUDITO
REPLIES OF THE BO
ARD OF DIRECT
ORS
BOARD
DIRECTORS
4.
In view of the order issued by the Government of India for closing the Corporation and
further in view of the fact that only a few
employees are left in the Corporation, we are
unable to comment on the internal control
system of the purchase of Inventory and Fixed
Assets and sale of goods and services.
As such, there are no purchases and consumption/

use of inventory/fixed assets to exercise specific internal
control procedure due to closure of all the units,
consequent to the decision of Gol to close the units
and release all employees on VSS.The Assets Sale
Committee as directed by BIFR is required to be constituted by Gol/DoF and the same is awaited.
7.
The Corporation did not have an Internal Audit

System commensurate with the size and
nature of its business during the year.Internal
audit was conducted only at plants for part
of the year. It has been explained that in view
of the skeleton staff and closure orders for
the Corporation, the Internal Audit department
could not be maintained.
In view of the closure decision and consequent release

of most of the employees on VSS, the Internal Audit
Deptt. could not be maintained. How ever, the Internal
Audit of all the units and division have been carried
out during the year.
A.O.
NO.
14
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
Comments of the Comptr

oller and A
uditor General of India Under Section 619(4) of the
Comptroller
Auditor
Companies Act, 1956 on the accounts of Fer
er Corporation of India Limited
Fert
zer
tiliz
for the year ended 31st March, 2006
I have to state that Comptroller & Auditor General of India has no comments upon or supplement to
Statutory Auditors Report under Section 619(4) of the Companies Act, 1956 on the accounts of Fertilizer Corporation
of India Limited for the year ended 31st March, 2006.
Sd/(B. Mazumdar)
Principal Director of Commercial Audit
and Ex-officio Member, Audit Board-II, Kolkata.
Place: Kolkata
Date: 22.09.2006
15
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
AUDIT
ORS REPOR
T
AUDITORS
REPORT
W e have audited the attached Balance Sheet of the Fertilizer Corporation of India Limited, as at 31st
March, 2006 and also the Profit & Loss Account and Cash-Flow Statement of the companyfor the year ended
on that date annexed thereto.These financial statements are the responsibility of the Companys management.
Our responsibility is to express an opinion on these financial statements based on our audit.
W e conducted our audit in accordance with auditing standards generally accepted in India. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material mis-statement. An audit includes examining, on a test basis,evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall financial statement presentation.
W e believe that our audit provides a reasonable basis for our opinion.
1.
As required by the Companies (Auditors Report) Order, 2003, issued by me Central Govt. of India
in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the said order.
2.
Further to our comments in the Annexure referred to in paragraph 1 above, we report that:
3.1
(a)
W e have obtained all the information and explanations, which to the best of our knowledge and
belief, were necessary for the purpose of our audit.
(b)
In our opinion, proper books of account as required by law have been kept by the Company
so far as appears from our examination of such books.
(c)
The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report
are in agreement with the books of account.
(d)
Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt by this report complied
with mandatory Accounting Standard, referred to in sub section (3C) of Section 211 of the Companies
Act, 1956 except in respect of non recognition of impairment of loss, if any, in financial statement
in accordance with Accounting Standard 28 Impairment of Assets issued by the Institute of
Chartered Accountants of India. We are unable to express opinion on the consequential impact
on revenue, assets and liabilities. (Refer Note No. 9.6).
(e)
The Central Government has not yet notified the rules relating to the levy and collection of cess
from companies in terms of section 441 A of the Companies Act, 1956. W e are therefore unable
to comment on the Corporations liability towards cess duty as prescribed under the said section.
(f)
The Central Government has, vide clarification No. GSR 829(E) dated 21st October, 2003, exempted
G overnment Companies from the applicability of the provisions of section 274(l)(g) of the Companies
Act, 1956 relating to disqualification of Directors.
The accumulated loss of the Corporation as on 31.03.2006 exceeds its paid up capital and free reserves
16
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
and the Corporation has been declared a sick company. In pursuance to application by the Corporation
to the BIFR, the BIFR vide order dated 17.05.2004 pursuant to a hearing dated 02.04.2004, recommended
for winding up of the company and forwarded its opinion to the Honble Delhi High Court on 27.5.2004
(Refer Note No. 1 & 2).
3.2
The Corporation did not have a Company Secretary after 2nd July 2003, that is the date of death of
the Corporations Company Secretary, as required in terms of Section 383 A of the Companies Act,
1956.
3.3
No Provision has been made for the following:
3.3.1
The Additional Custom Duty of Rs. 580 lakh demanded by Customs Authorities in respect of Korba
Project for which attachment proceedings have been initiated. (Refer Note No. 6.1).
3.3.2
Penal interest amounting to Rs. 13753.35 lakh payable on Government of Indias loans up to 31st March,
1991 (Refer Note No. 6.2).
3.3.3
Interest amounting to Rs. 188.51 lakh (accumulated up to 31st March 2006 Rs. 989.11 lakh) and Rs.
2556.91 lakh (accumulated up to 31st March 2006 Rs.10550.03 lakh) payable on loans of Central W arehousing Corporation and Life Insurance Corporation respectively (Refer Note No. 6.3).
3.3.4
Interest amounting to Rs. 468.97 lakh (accumulated up to 31st March 2006 Rs. 2477.19 lakh) payable
to Indian Oil Corporation Limited for delayed payments towards supply of oil (Refer Note No. 6.7).
3.3.5
Payments of Rs.67 lakh towards ex-gratia made under Voluntary Separation Scheme to the staff members
in the earlier years and shown under Loans and Advances, on misinterpretation of respective clause
of the scheme for which legal action of recovery has been initiated by the Corporation (Refer Note
No. 5.1).
3.4
W e are unable to express our opinion on the extent and consequential impact on state of affair/loss
for the year in respect of:
3.4.1
Realisability of License Fee Rs. 22.18 lakh recoverable from SSB (Refer Note No. 5.2),
3.4.2
Unascertained interest / damages on account of creditors lying unadjusted / un-reconciled since earlier
years and non-confirmation and non-reconciliation of principal and interest accrued and due, as well
as accrued but not due on loans obtained from Government of India, Life Insurance Corporation of
India and Central Warehousing Corporation Limited and in respect of unconfirmed balances in other
personal accounts (Refer Note No. 9.3).
3.4.3
Loss, if any, that may arise on disposal of assets retired from active use and held for disposal (Refer
Note No. 9.4).
3.4.4
Loss, if any, that may arise on disposal of inventory (Refer Note No. 9.5).
17
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
3.4.5
Non-accounting of 900 acres of land at Korba (value not ascertained) received free of cost (Refer Note
No. 4.3).
3.4.6
Non accounting of lease rent recoverable from M/s AC C Ltd. for railway siding (value not ascertained).
(Refer Note No. 5.3).
3.4.7
The liability that may arise on final settlement with Punjab National Bank, one of the consortium members,
who have not agreed to the one time settlement, amount unascertained (Refer Note No. 6.8).
We further report that, without considering items mentioned at para 2(d) & 3.4 above, the effect of
which could not be determined and, had the observations made by us in para 3.3 above have been
considered:
1)
Loss for the year would have been Rs. 133115.96 Lakh as against the reported loss of
Rs. 129901.57 Lakh
2)
Current Liabilities and provisions as at the end of the year would have been Rs.56158.05 Lakh
as against the reported figure of Rs 27741.37 Lakh).
3)
Accumulated losses would have been Rs 1302591.82 Lakh as against the reported figure of
Rs 1274175.14 Lakh.
Subject to our comments as above in our opinion and to the best of our information and according
to the explanations given to us, the said accounts read together with the accounting policies and notes
thereon give the information as required by the Companies Act, 1956 in the manner so required and
give a true and fair view in conformity with the accounting principles generally accepted in India:(a)
In the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2006.
(b)
In the case of the Profit & Loss Account, of the Loss for the year ended on that date.
(c)
In the case of the Cash Flow Statement, of the cash flow of the company for the year ended
on that date.
For H.K. Chaudhry & Co.
Chartered Accountants
Sd/(I.J. Soni)
Partner
M.No.88694
Place: New Delhi

Dated: 30.8.2006
18
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE AUDITORS REPORT ON

ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2006
1.
(a)
The Corporation has generally maintained proper records to show full particulars including quantitative
details and situation of fixed assets including retired assets held for disposal except in some
units/division where for some items particulars, location, and quantitative details have not been
mentioned or correct locations are not stated. Further, in some units/division fixed assets records
are not updated.
(b)
We are informed that physical verification of fixed assets other than plant and machinery has
been carried out by outside professional firms during the year except at Korba and Central Office.
Wherever the discrepancies have been found, provision for shortages have been made except
Sindri unit where the process of reconciliation as explained to us is in process. In respect of
Korba and Central Office, we are unable to comment on discrepancies, if any, in absence of
physical verification / reconciliation with book records.
(c)
In view of the closure order issued by the Govt. of India, the going concern assumption has
been affected. However, the Corporation has not disposed off substantial part of fixed assets
during the year though major part of the fixed assets have been retired from active use and
are held for disposal.
(a)
As explained to us, all inventories except stock at Korba unit have been physically verified during
the year by outside professional firms appointed for the purpose.
(b)
In our opinion and according to the explanation given to us, the procedures of physical verification
of inventory followed by the management are reasonable and adequate in relation to the size
of the company and nature of its business.
(c)
The Corporation is maintaining proper records of Inventory. Wherever any discrepancies were
noticed, provision for obsolescence have been increased enough to cover the shortages found.
However, in absence of any physical verification at Korba unit, we are unable to comment on
discrepancies, if any, and its treatment in the accounts.
3. (abc&d)
The Corporation has not granted any loan, secured or unsecured to companies,firms or other
parties stated in the register maintained under section 301 of the Act.
3.
The Corporation has not taken any loan, secured or unsecured from any company,firm or other
party stated under the register maintained u/s 301 of the Act.
2.
(ef&g)
4.
In view of the order issued by the Government of India for closing the Corporation and further in view
of the fact that only a few employees are left in the Corporation, we are unable to comment on the
internal control system for the purchase of Inventory and Fixed Assets and sale of goods and services.
(a)
The transactions that need to be entered into a register in pursuance of section 301 of the Act
have been so entered.
19
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
(b)
As regards to transactions with the companies in which the Directors of the company are interested,
aggregating to Rs. 5 lakh or more, we are unable to comment on the rates at which such transactions
were made as the comparative rates for similar transactions were not available for verification.
6.
The Corporation has not accepted any deposits from the public.
7.
The Corporation did not have an Internal Audit System commensurate with the size and nature of its
business during the year. Internal audit was conducted only at plants for part of the year. It has been
explained that in view of the skeleton staff and closure orders for the Corporation, the Internal Audit
Department could not be maintained.
8.
Cost records have been prescribed by the Central Govt. under section 209(1)(d) of the Companies
Act, 1956. W e are informed that the Corporation has moved an application to the competent authority
for exempting the Corporation for maintaining such records in view of the orders for closure of the
Corporation. How ever, no such permission has yet been received. Since the production activities have
been closed, no cost records have been made and maintained.
9.
(a)
The Corporation has been generally regular in depositing undisputed statutory dues including
Provident Fund, Income Tax, and Sales Tax etc. According to information and explanations given
to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, service
tax, customs duty, excise duty, cess and other statutory dues, were outstanding as on 31st March
2006 for a period of more than six months from the date they became payable except Rs. 580
Lakh of Custom Duty at Kobra unit (Refer to Note No. 6.1).
(b)
In respect of disputed amounts not deposited on account of sales tax, custom duty, excise duty
and cess, the required information is provided by way of an Annexure to this report and which
forms an integral part hereof and which is based on the necessary information and explanations
provided by the management.
10.
The Corporation has accumulated losses at the end of the financial year more than its Paid-up Capital
and Reserves. The Corporation has also incurred cash losses during the year and in the immediately
proceeding financial year.
11.
The Corporation has defaulted in repayment of dues to Life Insurance Corporation of India, the amount
of default on account of principal and interest as at the end of the year was Rs. 16671.96 lakh since
1991-92. However, out of this Rs.1600 lakh principal amount has been repaid during the year by Govt.
of India being a guarantor.
12.
The Corporation has not granted any loans and advances on the basis of security by way of pledge
of shares, debentures and other securities.
13.
The Corporation is not a Chit Fund Company.
14.
The Corporation is not dealing or trading in shares, securities, debentures or other investments.
20
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
15.
The Corporation has not given any guarantee for loans taken by others.
16.
The Corporation has not obtained any term loan during the year.
17.
The Corporation has not raised any short term fund during the year.
18.
The Corporation has not made any preferential allotment of shares during the year.
19.
The Corporation has not issued any debentures.
20.
The Corporation has not raised any money through public issues.
21.
W e are informed that no fraud on or by the company has been noticed or reported during the year.
For H.K. Chaudhry & Co.
Sd/(I.J. Soni)
Partner
M.No.88694
Place: New Delhi

Dated: 30.8.2006
21
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
DET
AILS OF DISPUTED ST
AT U T
OR
Y DUES AS REFERRED IN THE PARA NO
. 9(B) OF
TAILS
STA
TO
RY
NO.
THE ANNEXURE TO THE AUDITORS REPORT ON ACCOUNTS FOR THE YEAR ENDED ON
31.3.2006
Sl.
No.
Unit & Name of the

Statute
Nature of dues
Amount (Rs.)
Forum for dispute
SINDRI
1.
Bihar Health Cess Act

77 and Bihar and
Orissa Primary Education Act, 1990
Health Cess and Education Cess imposed by

Notified Area Committee
Rs. 160.74 Lakh +

Interest from 1996.
(Rs. 30 lakh paid
as per SC interim
orders)
Supreme Court of India
2.
Excise
Excise duty
Rs. 1.50 lakh +

interest from 1997
Commissioner of
Excise, Government of
Bihar, Patna.
3.
Excise
Excise duty
Rs.445.30 lakh
C E S AT, Kolkata
4.
Excise
Excise duty
Rs. 33.00 lakh
Commissioner (Excise),
Jamshedpur
5.
Sales Tax Act
Sales Tax & Penalty
Rs. 1950.32 lakhs
JCCT, Dhanbad
6.
Sales Tax Act
Sales Tax & Penalty
Rs. 302.42 lakhs
C.C.T., Ranchi
7.
Sales Tax Act
Sales Tax & Penalty
Rs. 5.00 lakh +

interest from 1993-94
Dy. Commissioner,
Comm. Taxes, Patna
8.
Sales Tax Act
Sales Tax & Penalty
Rs. 1.00 lakh
A.C.C.T., Ranchi
GORAKHPUR
9.
Trade Tax Act
Sales Tax
Rs. 0.41 lakh
High Court, Allahabad
10.
Trade Tax Act
Sales Tax
Rs. 0.32 lakh
High Court, Allahabad
Excise Duty
Rs. 57.30 lakh
CESTAT, Bangalore
Sales Tax
Rs. 2.27 lakh
Asstt. Commissioner of
Sales Tax, Cuttak, Orissa
RAMAGUNDAM
11.
Excise
TALCHER
12.
Sales Tax Act
22
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
Sl.
No.
Unit & Name of the

Statute
Nature of dues
Amount (Rs.)
Forum for dispute
KORBA
13.
Project Import Regulations, 1965
Customary Duty
Rs. 5.09 lakh
Asst. Commissioner of
Customs,
Visakhapatnam
14.
Municipal Act
Property Tax
Rs. 14.50 lakh
Dist. Court, Bilaspur
MARKETING DIVISION
15.
Sales Tax Act
Sales Tax
Rs. 24.89 lakh
Asstt. Comm. Sales

Tax, Patna
16.
Sales Tax Act
Sales Tax
Rs. 24.00 lakh
Asstt. Commissioner of
Sales Tax, Lucknow
CENTRAL OFFICE
17.
Income Tax Act
Income Tax
Rs. 2.93 lakh
CIT (Appeals)
18.
Income Tax Act
Income Tax
Rs. 1.45 lakh
ITAT, New Delhi
23
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
BALANCE SHEET
AS AT 31ST MARCH, 2006
(Rs. in 000s)
Schedule
.
I
2005
SOURCES OF FUNDS
1.
2.
Shareholders Funds
a)
Share Capital
7509239
7509239
b)
Reserves and Surplus
11755
11755
Loan Funds
a)
Secured Loans
b)
Unsecured Loans
121176806
107996784
128697800
115517778
Total
II.
2006
APPLICA
TION OF FUNDS
APPLICATION
1.
Fix
ed Assets
Fixed
a)
Gross Block
301005
301005
b)
Less: Depreciation
213779
210669
c)
Net Block
87226
90336
d)
Retired Assets held for disposal

10961348
10961348
8456250
8456250
Gross Block
Less: Depreciation/Provision for dimunition
2.
Net Block
2505098
2505098
e)
Capital work-in progress (CWIP)
f
)
Advances to contractors/suppliers
against capital work
8
0
2592324
2595434
In
vestments
nvestments
(Continued)
24
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
BALANCE SHEET (Continued)

(Rs. in 000s)
Schedule
3.
2006
2005
Current Assets, Loans & Ad

vances
Adv
a)
Inventories
10
429444
429510
b)
Sundry Debtors
11
82143
84444
c)
Cash and Bank Balances
12
892407
829204
d)
Loans and Advances
13
58100
107229
1462094
1450387
Total
Less :Current Liabilities and Provisions
e)
Current Liabilities
14
2773835
2955314
f
)
Provisions
15
302
92
2774137
2955406
1312043
-1505019
Profit & Loss Account (Loss)
127417514
114427358
Total
128697800
115517778
Total
Net Current Assets
4.
Miscellaneous Expenditure
(To the extent not written off or adjusted)
Significant Accounting Policies and

Notes of Accounts Forming Part of
Balance Sheet
Sd/(R.N. Dash)
Director
16
29
Sd/(Sofia Dahiya)
Director (Finance)
Sd/(Man Singh)
General Manager
Sd/(Deepak Singhal)
Chairman & Managing Director
As per our report of even date

For H.K. Choudhry & Company
Sd/(I.J. Soni)
Partner
Memb. No. 88694
Place: New Delhi

Dated: 30.8.2006
25
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
PR
OFIT AND LOSS A
CCOUNT
ROFIT
AC
FOR THE YEAR ENDED 31ST MARCH, 2006
(Rs. in 000s)
Schedule
.
I
2005
3274
3274
3274
INCOME
Sales (Less Returns)
17
Less: Excise Duty
Price Support Under Retention Price Scheme
Other Income
18
210021
74154
Closing Stock
19
15073
14853
225099
92281
Total
II.
2006
EXPENDITURE
Opening Stock
20
14853
14845
Purchase of Finished Goods
21
Materials consumed
22
3532
Salaries, W ages, Bonus and Other

benefits to employees
23
16361
16589
Power and Fuel
6712
9899
Freight and Handling Charges
3884
3282
Royalties
Repairs and Maintenance
24
2694
3728
Other Expenses
25
75345
64468
Interest
26
13077902
12034015
3110
3160
Depreciation
(Continued)
26
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
PR
OFIT AND LOSS A
CCOUNT (Contin
ued)
ROFIT
ACCOUNT
(Continued)
(Rs. in 000s)
Schedule
2006
2005
Provisions
1.
For obsolescence of Stores and Spares
2.
For obsolescence of CWIP
3.
For shortages/losses in Fixed Assets

and Inventory
210
4.
For doubtful debts and advances
7208
29800
5.
Provision for diminution for value

of investment
7420
29800
Total
13208287
12183318
Loss before extra ordinary items
12983188
12091037
12983188
12091037
6969
7441
12990157
12098478
Add: Loss brought forward from previous year
114427357
102328879
Balance of loss carried over to Balance Sheet
127417514
114427357
Extra Ordinary Items written off
27
Net Loss for the year

Net Prior period adjustments
28
Loss after Prior period adjustments
Significant Accounting Policies and Notes

to Accounts forming part of Profit
and Loss Account
Sd/(R.N. Dash)
Director
29
Sd/(Sofia Dahiya)
Director (Finance)
Sd/(Man Singh)
General Manager
Sd/(Deepak Singhal)

For H.K. Choudhry & Company
Sd/(I.J. Soni)
Partner
Memb. No. 88694
Place: New Delhi

Dated: 30.8.2006
27
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 1
SHARE CAPITAL
(Rs. in 000s)
2006
2005
8000000
8000000
7509239
7509239
7509239
7509239
Authorised
80,00,000 Equity Shares of
Rs. 1,000/- each
Issued, Subscribed and Paid up
7509239 Equity Shares of Rs.1000/each fully paid up (previous year
7509239 Equity Shares)
Note: Shares issued include 190082 shares of Rs.1000 each (previous year 190082 shares) allotted as fully
paid up pursuant to contracts without payment being received in cash.
28
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 2
RESERVES AND SURPLUS
(Rs. in 000s)
Capital Reserve
29
2006
2005
11755
11755
11755
11755
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 3
SECURED LOANS
(Rs. in 000s)
W orking capital demand loan accounts from others
30
2006
2005
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 4
UNSECURED LOANS
(Rs. in 000s)
2006
2005
From Government of India

(including Rs.1062618 thousands repayable
within a year and Rs.25027078 thousands
overdue, previous year Rs. 2064938
thousands repayable within a year
and Rs. 22672579 thousands over due)
From L.I.C. (over due) (previous year over due)
From C.W.C. (over due) (previous year over due)
27347966
27187966
160000
50000
50000
Interest accrued and due on:

Govt. of India Loans *
93250320
80070298
LIC Loan **
452193
452193
CWC Loan
76327
76327
93778840
80598818
121176806
107996784
*Include interest accrued on overdue principal.

**Guaranteed by Govt. of India
INTEREST ON GOI LO
AN NO
T ALLOCA
TED TO UNITS
LOAN
NOT
ALLOCATED
2005-06
2004-05
2003-04
Sindri Unit
3954007
3625260
3331200
Gorakhpur Unit
2240604
2054314
1887680
Ramagundam Unit
3031405
2779366
2553920
Talcher Unit
3954007
3625260
3331200
13180023
12084200
11104000
31
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 5
FIXED ASSETS
FOR THE YEAR 2005-2006
(Rs. in 000s)
Description
Gross Block
Depreciation
Net Block
Upto
On
Of
Of
Upto
Upto
Provided
Items
On
Upto
As at
As at
March,
transfer
addition/
deducts/
March,
March,
during
Sold/dis-
transfer
March,
31-3-2006
31-3-2005
2006
2005
2006
2005
during
adjust-
adjust-
the year
ments
ments
the
carded/
during
year
asdjusted
the year
Land - lease hold
20002
20002
4318
216
4534
15468
15684
Land - free hold
24521
24521
24521
24521
Roads and Culverts
15437
15437
11322
247
38
11607
3830
4115
191561
0 191561 149372
2074
38
0 151408
40153
42189
39622
39622
37362
349
37711
1911
2260
7311
7311
5784
213
5997
1314
1527
2551
2551
2511
11
2522
29
40
301005
0 301005 210669
3110
0 213779
87226
90336
Buildings
Water System &
Drainage
Plant and Machinery
Misc. Equipment
Furniture, Fixture &
Office Applicances
Total
32
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 6
RETIRED ASSETS HELD FOR DISPOSAL
FOR THE YEAR 2005-2006
(Rs. in 000s)
Description
Gross Block
Upto
March,
2005
On
Of
Depreciation
Of
Upto
transfer addition/ deducts/
March,
March,
2006
2005
adjust-
ments
ments
16746
16746
184909
122811
68414
10242773
Items
On
Upto
As at
As at
Sold/dis-
transfer
March,
31-3-2006
31-3-2005
2006
the
carded/
during
asdjusted
the year
13424
13424
3322
3322
184909
165667
165667
19242
19242
122811
112710
112710
10101
10101
68414
61671
61671
6743
6743
10242773
7881536
7881536
2361237
2361237
87567
87567
72236
72236
15331
15331
Office Applicances
40114
40114
34542
34542
5572
5572
Transport Vehicles
9481
9481
7615
7615
1866
1866
10772815
10772815
8349401
8349401
2423414
2423414
188533
188533
106849
106849
81684
81684
10961348
10961348
8456250
8456250
2505098
2505098
Buildings - Retired
adjust-
during
year
Roads and Culverts
during
the year
Upto Provided
Net Block
Water System &

Drainage
Railways sidings
Plant and Machinery
(Retd.)
Misc. Equipment
(Retd.)
Furniture, Fixture &
(Retd.)
Total
CWIP (Retd.)
Total
33
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 7
CAPIT
AL WORK-IN-PR
OGRESS
CAPITAL
WORK-IN-PRO
(Rs. in 000s)
2006
2005
AT COST
Materials with fabricators
13
13
Less: Provision for doubtful replacements
13
13
34
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 8
AD
VANCES TO CONTRA
CT
ORS/SUPPLIERS
DV
CONTRAC
TORS/SUPPLIERS
A GAINST CAPIT
AL W O R K S
CAPITAL
(Rs. in 000s)
2006
2005
Suppliers
567
567
Less: Provision for doubtful advances
567
567
Unsecured - Considered Doubtful
35
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 9
INVESTMENTS
(Rs. in 000s)
2006
2005
* Fully paid up equity shares in

Employees Co-operative
Stores Limited
15
15
Less: Provision for diminution

in value of investments
10
10
Non-trade Investments
(At cost-Unquoted)
* 501 Shares of Rs.10/- each

50 Shares of Rs 100/-each
5 Shares of Rs.1000/-each
36
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 10
INVENTORIES
(Rs. in 000s)
2006
2005
Raw Materials
18723
18723
Less: Provision for obsolescence and

shortages
10955
10953
7769
7770
3359
3359
238
238
3121
3121
(including in-transit Rs.4662

thousands, under inspection Rs.27
thousands, previous year Rs. 4662
thousands, Rs 27 thousands respectively)
576851
577136
Less: Provision for obsolescence and

shortage
173357
173357
403494
403779
642
642
13
13
629
629
14431
14211
429444
429510
In
ventories (as taken, v
alued and cer
tified b
y Mana
gement)
nventories
valued
cert
by
Manag
Packing Materials
Less: Provision for obsolescence
and shortages
Stores, spare par

ts, loose tools etc.,
part
Finished goods
(Includes Gypsum worth Rs 629 thousand
lying with WBSWC, Cossim Bazar
W est Bengal
Less: Provision for obsolescence
Scrap items held for disposal
37
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 11
SUNDR
Y DEBT
ORS
RY
DEBTO
(Rs. in 000s)
2006
2005
77567
77194
Considered doubtful
198671
191758
Total
276238
268952
4576
7250
Total
4579
7253
Total
280817
276205
Less: Provision for doubtful debts
198674
191761
82143
84444
(i) Claims recoverable
32603
32603
(ii) On account of consignment sale
10756
10756
Debts outstanding for a period

exceeding six months
Unsecured-considered good
Other Debts
Unsecured-considered good
Considered doubtful
Included in the above are:
38
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 12
CASH AND BANK BALANCES
(Rs. in 000s)
Cash in hand
2006
2005
223
430
541195
423450
13351
12086
326530
377344
5230
10223
1731
1731
With Scheduled Banks in

Deposit Account
Fixed Deposit as margin/security
No lien Account (flexi deposit)
Current Accounts
Deposit with post office in
Savings Bank Accounts**
W orkers Amenities Accounts
with Scheduled banks in
Savings bank accounts
Current Accounts
Fixed Deposits
Interest accrued
Interest accrued on deposits
544
544
3421
3242
38
29
4003
3815
144
125
892407
829204
** Rs. 1731 thousands pledged with Excise Department (Previous year Rs. 1731 thousands)
39
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 13
LO
ANS AND AD
OANS
ADV
VA N C E S
(Rs. in 000s)
2006
2005
33
33
107
134
140
167
Loans
Secured-Considered good (HBL to Employees)
Interest accrued on staff loans*
Advances
Advances recoverable in cash or
kind or for value to be received
Unsecured-Considered good:
Contractors
Suppliers
Employees
Others
From Company under same
Management
Considered Doubtful
Prepaid Expenses
Deposits with Custom, Port
Trust, Electricity Board, other
Government authorities and
Income tax deducted at source
and PF Trustees (considered good)
Interest Accrued on deposits
Deposits Considered Doubtful
Less: Provision for doubtful deposits

Less: Provision for doubtful Advances
Due from Directors and
Officers of the Company
Maximum Balance due at any time
* Includes interest accrued on secured loans.
40
113
26270
1163
18726
113
26322
1348
57300
37
46272
85120
323
333
37
11688
21546
359
18104
18114
30115
40389
18104
18114
323
333
58100
107229
0
0
0
0
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 14
CURRENT LIABILITIES
(Rs. in 000s)
2006
2005
Current Liabilities
Sundry Creditors
On capital accounts
On other accounts:
Small Scale Industrial
Undertakings (SSIs)
Others
Trade deposits, advances

against sales orders and
others
Security and Earnest Money
deposit received from
Contractors and others
Other Liabilities
W orkers Amenities Fund
Special welfare scheme
Interest accrued but not due on
Government of India Loans
41
51790
60879
362
362
2236687
2339146
2288839
2400387
89516
94254
219282
218829
41377
11912
4003
3814
631
631
130187
225487
2773835
2955314
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 15
PROVISIONS
(Rs. in 000s)
For Shortages/losses in
Fixed Assets
42
2006
2005
302
92
302
92
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 16
MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted)
(Rs. in 000s)
2006
2005
Deferred Revenue Expenditure

For Installation of Electric connection
at Mohangarh Mines
43
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 17
SALES
(Rs. in 000s)
.
I
II.
2006
2005
Fertilizers
Industrial Products
Gypsum
Raw Materials & Others
3274
3274
Man
ufactured Pr
oducts
Manufactured
Products
44
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 18
OTHER INCOME
(Rs. in 000s)
2006
2005
9032
9764
49405
0
39328
Value of services rendered
1130
Profit on sale of assets
1605
147076
16362
4508
5965
210021
74154
Recovery of rent etc.

Interest (Gross) (TDS - Nil)
Bank Deposits
Staff Loans & others
Miscellaneous Income
Excess provision and credit
balances written back
45
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 19
CLOSING ST
STO
OCK
(Rs. in 000s)
Finished goods
Scrap items held for disposal
2006
2005
642
642
14431
14211
15073
14853
SCHEDULE - 19A
ODUCTWlSE BREAK-UP
CLOSING ST
OCK-PR
STOCK-PR
OCK-PRODUCTWlSE
FINISHED GOODS
(Rs. in 000s)
2006
2005
Quantity
Unit MT
Value
Quantity
Unit MT
Value
Urea
1.634
13
1.634
13
Gypsum
598.9
629
598.9
629
Finished Goods (Manufactured)
642
642
Gypsum valuing Rs 629 thousand is lying with WBSWC Cossim Bazar W est Bengal for the last 6-7 years.
CWC had not allowed removal of the gypsum. Accordingly the company has not paid their outstanding dues
of Rs. 14.98 lakh.
46
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 20
OPENING STOCK
(Rs. in 000s)
2006
2005
642
642
Intermediate/semi
finished products
By-Products
14211
14203
14853
14845
Finished goods/gypsum
Scrap
47
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 20A
OPENING ST
OCK-PR
ODUCTWISE BREAK-UP
STOCK-PR
OCK-PRODUCTWISE
FINISHED GOODS
(Rs. in 000s)
2006
2005
Quantity
Unit MT
Value
Quantity
Unit MT
Value
Prilled
Flakes
Melt
598.9
629
598.9
629
1.634
13
1.634
13
Finished Goods (Manufactured)

Urea
Ammonium Nitrate
Ammonium Bi-carbonate
Gypsum
Finished Goods (Bought out)
Urea
Ammonium Sulphate (FACT)
642
48
642
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 21
PURCHASE OF FINISHED GOODS
(Rs. in 000s)
2006
Zinc Sulphate
2005
Quantity
Unit MT
Value
Quantity
Unit MT
Value
49
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 22
MA
TERIALS CONSUMED
ATERIALS
(Rs. in 000s)
2006
2005
18723
27147
4896
18723
22251
18723
18723
3528
3359
3338
25
3359
3363
3359
3359
572234
572245
52
572182
572245
571950
572234
Total
232
11
Grand Total
232
3543
Stores & Spares
226
11
Total
226
11
3532
Raw Materials
Opening Stock
Purchases/adjustments
(Including Inter-Unit transfer
and transfer from projects)
Less: Closing Stock

Total
Packing Materials
Opening Stock
Purchases
Less: Closing Stock

Total
Stores and Spares
Opening Stock
Purchases (Including inter-unit transfers)
Prior period adjustment
Less: Closing Stock
Less:Transferred to capital expenditure,

pow er & fuel, repairs, welfare expenses
and inter-unit sales
Packing Materials
Net Consumption
50
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 22A
ITEM-WISE BREAK-UP OF RA
W
RAW
MA
TERIALS CONSUMED
ATERIALS
(Rs. in 000s)
2006
Quantity
Unit MT
2005
Quantity
Unit MT
Value
Steam Coal
4000
3380
Furnace Oil/LSHS (KL)
22.69
148
Power Coal
Value
0
0
51
3528
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 23
SALARIES, W A GES, BONUS AND
O THER BENEFITS TO EMPLO
YEES
EMPLOYEES
(Rs. in 000s)
2006
2005
12481
9526
Provident Fund Contribution
672
829
Gratuity
425
224
VSS Expenditure
1197
1743
W orkmen & Staff W elfare Expenses
1586
2347
1920
16361
16589
Transferred to capital
and other accounts
Grant in-aid received for

Voluntary Retirement Compensation
16361
16589
Salaries, W ages & Bonus
Family Pension under FCIL (FPS)
Less:
52
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 24
REPAIRS AND MAINTENANCE
(Rs. in 000s)
2006
2005
Machinery
343
710
Buildings
233
231
2118
2787
2694
3728
Others
53
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 25
OTHER EXPENSES
(Rs. in 000s)
2006
2005
Rent
1017
1038
Rates and Taxes
5019
1102
Fringe Benefit Tax
315
Insurance
1430
1451
Travelling Expenses
2101
2548
80
108
33
994
1720
Guarantee Fee
28511
24106
Expenditure on Security
25337
17489
Miscellaneous Expenses
10541
14865
TO TAL
75345
64468
Entertainment Expenses
Retirement T.A. Expenses
Retainers Payment
Rebate/Discount on Sales
54
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 26
INTEREST
(Rs. in 000s)
Loans from Government of India

Interest others
2006
2005
4747891
4746667
364
69105
8329647
7218243
13077902
12034015
Penal Interest:
On GOI Loan
55
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 27
EXTRA ORDINAR
Y ITEMS WRITTEN OFF
ORDINARY
(Rs. in 000s)
2006
2005
Expenditure on Voluntary
Retirement Scheme
Provision for diminution in

value of stores and spares
Provision for diminution in

value of raw materials
Provision for diminution in value of assets

and Capital W ork in Progress(CWlP)
Provision for Compensation to vendors

for cancellation of orders
Provision for diminution in value of assets
Professional charges for Demerger Scheme
Loss on sale of materials
Miscellaneous Expenditure Written off
Write off of Capital work in progress
Write off of Stores and Spares
Korba Written off
TOTAL : (A)
Add: Expenditure
Expenditure during Construction
(Continued)
56
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 27
EXTRA ORDINARY ITEMS WRITTEN OFF (CONTINUED)
(Rs. in 000s)
2006
2005
Write back on account of:

One time settlement with consortium bank
Write off of interest by

Public Sector Undertaking (PSU)
Write off of loan principal by PSU
Write back of Liab. of

Custom duty, port rent etc.
Profit on sale of assets
Write back of liabilities
TO TAL: (B)
NET (A-B)
Less: Income
57
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 28
PRIOR PERIOD ADJUSTMENTS
(Rs. in 000s)
2006
2005
52
4871
365
3348
Power & Fuel
Freight & Handling Charges
Repairs & Maintenance
4625
993
Depreciation
Interest (Others)
1774
Sales tax duties
7185
12227
10993
Price Support Under Retention

Price Scheme
Value of services rendered
Excess provision/liabilities and

credit balance written back
Purchase of (SSP)
5258
3551
5258
3551
6969
7441
Expenditure:
Materials consumed/reclaimed
Salaries, Wages, Bonus & Gratuity
Other Expenses Misc.
Interest on GOI loan
Income:
Miscellaneous Income
Interest others
Net Expenditure/(Income)
58
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
SCHEDULE - 29
SIGNIFICANT ACCOUNTING POLICIES AND NO
TES TO ACCOUNTS FORMING PAR
T
NOTES
PART
OF BALANCE SHEET AS ON 31ST MARCH, 2006.
SIGNIFICANT ACCOUNTING POLICIES
1.0
BASIS OF PREP
ARA
TION OF FINANCIAL ST
ATEMENT
PREPA
ATION
STA
1.1
The Financial Statements have been prepared under the Historical Cost Convention in accordance with
the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted
consistently by the Corporation. The same is prepared on not going concern basis.
1.2
The Corporation follows mercantile system of accounting except for items specified elsewhere in the
policy.
2.0
FIXED ASSETS
2.1
Fixed Assets are stated at cost of acquisition inclusive of inward freight duties & taxes and incidental
expenses related to acquisition.
2.2
Assets are capitalized after they are certified to be complete and put to use.
2.3
Land given free by State Governments and other authorities is capitalized at normal cost and/or on
the basis of incidental expenditure incurred on its acquisition in accordance with the guidelines issued
by Department of Public Enterprises, Government of India.
2.4
Machinery spares whose use is expected to be irregular and could be identified with a plant are capitalized
in pursuance with provisions of Accounting Standard 2 (Revised)
3.0
CAPITALISATION OF EXPENDITURE
3.1
Revenue expenditure incurred in due course of implementation of capital projects, such as salaries
and wages, insurance, repairs etc. relatable/allocable to such projects and schemes till commencement
of commercial production are capitalized. Incidental income prior to commencement of commercial production
is set off against the cost of the project/scheme.
3.2
Expenditure on renewal and replacement of major/critical equipments resulting in increase in expected

life of the equipment and efficiency of operation is capitalized. Original cost or estimated technical valuation
of the items replaced (at the time of its installation) is reduced from the Fixed Assets.
4.0
RETIRED PLANTS AND MACHINERY

Plant and Machinery is depreciated up to net realization value as per technical evaluation (if not already
done) in the year in which decision regarding retirement of plants and machinery is taken, and the
59
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
original cost/estimated technical valuation and depreciation reserve are transferred to retired assets.
Profit/loss on such plants is booked in the year of sale/disposal.
5.0
CA
TA L
YSTS
AT
LYSTS
Catalysts issued at the time of commissioning the plants are capitalized. Subsequent additions are charged
to revenue on the basis of their estimated life. In case of premature replacement the difference in
value is written off in the year of replacement.
6.0
DEPRECIA
TION
DEPRECIATION
6.1
Assets costing up to Rs.5000 are fully depreciated in the year of addition.
6.2
Depreciation on fixed assets (including subsequent additions) is charged on straight-line method at the
rates prescribed in Schedule XIV to the Companies Act, 1956.
6.3
Plant and machinery is depreciated up to 95% of its original value.
6.4
Lease hold land is amortized over the period of lease.
7.0
INVENT
ORIES
INVENTORIES
7.1
Stock of raw materials and packing materials are valued based on monthly weighted average cost or
net realizable value whichever is low er.
7.2
Stocks of stores and spare parts are valued based on moving/ monthly weighted average cost.
7.3
Stocks of finished / semi-finished goods are valued at low er of cost/net realizable value.
7.4
Stocks of by-products are valued at net realizable value. Material in process stocks of coal ash, carbon
slurry and carbon di-oxide is valued at nil.
7.5
Accounting for scrap to the extent received in the stockyard is done at estimated realizable value.
7.6
Loose tools are written off over a period of three years.
8.0
ADJUSTMENT OF SHOR
TA GE/EXCESS
SHORT
Shortage/excess of raw materials/intermediate products/packing materials and finished stocks arising
from physical verification of ground balance (as well as non-recoverable transit loss of finished goods)
are charged to consumption.
9.0
SALES
Sales are accounted for on the basis of dispatches. Subsidy is accounted for on the basis of dispatches
from the factory. How ever, credits for subsidy in the account is taken only for the quantities sold.
60
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
10.0
CLAIMS OF THE CORPORATION

Claims on underwriters and railways for goods in transit based on the shortage certificate from the
Railways are accounted for in the year of lodgment of claims.
10.1
Interest from customers is recognized when no significant uncertainty as to its realization exists.
11.0
PREPAID EXPENSES
Prepaid expenses up to Rs.25,000 in each case is accounted for in the year in which they are incurred.
12.0
RETIREMENT BENEFITS
Liability for gratuity and encashable leave is provided on actuarial valuation.
13.0
DEFERRED REVENUE EXPENDITURE

Expenditure incurred on sales promotion and staff training during construction period is written off over
five years from the year in which the unit commences commercial production.
14.0
FOREIGN EXCHANGE TRANSACTIONS

Transactions in foreign currency at the exchange are accounted at rate prevailing on the date of transaction.
Gains/losses arising out of fluctuations in the exchange rates are recognized in profit and loss in the
period in which they arisen except in respect of fixed assets where exchange variance is adjusted
in the carrying amount of the respective Fixed Assets.
15.0
MISCELLANEOUS
15.1
Wherever bills/demands from contractors, suppliers, railways and others have not been received, the
assets have been capitalized/expenditure booked on provisional / estimated basis.
15.2
Liability for excess credits (Net) wherever given by the Bank, is retained for 12 years, Interest on such
credits is retained for a period of 3 years.Thereafter excess provision along with principal is reversed
as current year income and included in Contingent Liability.
B.
NO
TES TO A
CCOUNTS 2005-2006
OTES
ACCOUNTS
1.1
The accumulated loss of the Corporation as on 31.3.2006 aggregating Rs.1274175 lakh exceeds its
paid up capital and free reserves aggregating Rs.75210 lakh. Consequent to amendments in the Sick
Industrial Companies (Special Provisions) Act (SICA), 1985, the Corporation had come within the purview
of the said Act and a reference under Section 15 of the Act was made to the Board for Industrial
and Financial Reconstruction (BIFR) on 20.4.1992 and the Corporation was declared sick in the BIFR
hearing held on 6.11.1992.
61
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
1.2
Finally vide orders dated 17.5.2004 the BIFR recommended for winding up of the Company and forwarded
its opinion of winding up to the Delhi High Court on 27.5.2004. The Honble Delhi High Court (Company
Jurisdiction) has since taken note of the same under case No. 183/2004 and the matter is still pending,
the next date of hearing is 30.10.2006.
2.0
The accounts of the Corporation have not been prepared on going concern basis. Fixed Assets of
the units and offices approved for closure (except assets pertaining to township) have been indicated
as assets held for disposal and valued at lower of the book value or net realizable value and are
shown separately in Schedule 6 of Retired Assets Held for Disposal.
2.1
In pursuance to the Governments orders for closure, hazardous and perishable items are being disposed
off,for which BIFR/High Court has been kept informed. Funds realized from disposal of these items
are being kept in a no-lien bank account.
3.0
CONTINGENT LIABILITIES
3.1
Contingent Liabilities not provided for:

(Rs. in lakh)
2006
2005
For excise, custom duty and other demands

including matters under appeal
1079
586
For sales tax/income tax demands excluding

interest that may fall due in settlement of appeals
2315
2327
From contractors and others including under

arbitration/negotiation/before courts
1624
1309
Claims on the Corporation not acknowledged as

debts (to the extent ascertained)
4.0
FIXED ASSETS AND CAPITAL WORK-IN-PROGRESS
4.1
Agreements/legal formalities remains to be executed with regard to 1031.780 acres of land (at Talcher
7.780 acres and at Korba 1024 acres) (previous year 1031.780 acres).
4.2
Land includes 112 acres at Sindri allotted by the State Government for which the possession still to
be handed over to the Corporation.
4.3
Land measuring 900 acres at Korba (value not considered) has been received free of cost from Government
and other authorities.
4.4
At Gorakhpur, cost of land represents only 40% of the value and balance 60% was gifted by the State
G overnment amounting Rs.32.67 lakh not accounted for.
62
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
4.5
At Gorakhpur, 546 quarters have been mortgaged to the State Government against subsidy received
under the subsidized industrial housing Scheme. Corporation is yet to obtain release of mortgage deed
which has been expired.
4.6
In view of winding up orders issued by BIFR vide order dated 17.5.2004 and in the absence of any
directives from State/Central Government regarding status of land as appearing in the books of accounts
no accounting adjustments in this regard has been considered necessary. Further, it is not known as
to what effect will have to be given to matters as stated in 4.1 to 4.5 above.
4.7
At Sindri & Gorakhpur units certain buildings along with equipments, and fittings etc. installed thereon
have been handed over to CRPF and SSB under MHA (Ministry of Home Affairs) during the period
from 7.2.2004 till 31.3.2006 in terms of MOU dated 5.2.2004 entered between DoF and MHA for safe
custody and use by them with an intention to transfer subject to approval of competent authority. Since
the approval of competent authority and other modalities thereof have not been determined till date,
no adjustment/entry of the same have been passed in these accounts.
4.8
At Talcher 202 quarters given to Heavy W ater Plant for exchange with 344 quarters received from
HWP under an arrangement suggested by BIFR, since, the final settlement of this arrangement is pending,
hence no adjustment entry has been carried out.
5.0
SUNDR
Y DEBT
ORS / LO
ANS AND AD
VA N C E S
RY
DEBTORS
LOANS
ADV
5.1
Loans and advances include Rs.67 lakh in respect of excess payment of ex-gratia to 51 numbers of
employees on opting for VSS, due to misinterpretation of the Governments order. Legal action has
been initiated for recovery of the said amount and the same has been treated as good of recovery.
5.2
Sundry Debtors includes Rs.22.18 lakh recoverable from SSB (Gorakhpur) on account of licence fee
charged for the use of assets handed over to them for safe custody. The same has been disputed
by SSB. How ever the same has been treated as good for recovery.
5.3
After closure of Sindri Unit during 2002-03, the railway siding at Sindri is being exclusively used by
M/s. ACC Ltd. All maintenance jobs etc. were also carried out by them. Pending decisions for leasing
out / rent for railway siding to M/s. ACC Ltd., no bills have been raised after 2002-03, the leasing /
rental income, if any, to be received from M/s. ACC Ltd. will be recorded in the year of receipt.
6.0
CURRENT LIABILITIES AND PR

O VISIONS
PRO
6.1
Customs authorities have demanded additional duty for Rs.580 lakh against goods imported at concessional
customs duty on the ground that the Korba Project has not been implemented nor the industrial licence
for the project renewed. The Ministry of Finance had decided to keep the recovery proceedings in abeyance
till BIFRs findings vide their letter No.455/14/94cus:v dated 26.5.1994. Department of Customs has
again issued attachment notice vide letter dated 26.2.2003. Since the matter is not yet resolved, therefore,
no provisions for the same has been made in these accounts.
6.2
Penal interest up to 31.3.1991 amounting to Rs. 13753.35 lakh on Government of India loans has
not been provided for.
63
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
6.3
Interest for the year Rs.188.51 lakh (accumulated since 2000-01 Rs. 989.11 lakh) on loans taken from
Central W arehousing Corporation and Rs.2556.91 lakh (accumulated since 2000-01 Rs 10550.03 lakh
on loan taken from Life Insurance Corporation have not been provided.
6.4
GOI as a guarantor to the loan has discharged its obligation by releasing Rs.16.00 Crore (Rupees
sixteen crore) to LIC in repayment of the outstanding principal amount of loan vide letter no.18021/
45/2003/fca-I dated 27.3.2006 pending instructions/details, amount repaid by GOI has been shown under
GOI loan.
6.5
Current liabilities include Rs.544.44 lakh in respect of VSS compensation to 61 employees whose request
for VSS has been accepted but they have not been relieved by 31.3.2006 due to exigencies of work.
Any difference in actual payment compared to liability provided as on 31.3.2006 will be accounted for
in the year of release of these employees.
6.6
Sundry creditors include Rs. 5.23 lakh in respect of payment by cheques towards gratuity and earned
leave etc. not accepted by nine employees who had not opted for VSS and were terminated as per
ID Act.
6.7
Interest for the year Rs.468.97 lakh (accumulated since 2001-2002 Rs.2477.19 lakh) payable to Indian
Oil Corporation for delayed payment towards supply of oil has not been provided.
6.8
One time settlement (OTS) of outstanding secured loans was arrived at with consortium comprising
of ten banks, including Punjab National Bank (PNB). While all the banks have since communicated
their acceptance of OTS, PNB is yet to confirm their acceptance, though their share of OTS amount
of Rs.3.25 crore has been paid to them. As OTS was approved by consortium in consultation with
all the member banks, no additional liability in this regard towards PNB is considered necessary.
6.9
The Liability for Gratuity and Leave Encashment is accounted on actual basis.
7.0
REMUNERATION
Rs./ lakh
2005-06
2004-05
Audit Fees & Service Tax
1.57
1.94
Traveling /out of pocket expenses
3.00
1.94
Tax Audit Fee
0.22
0.25
Auditors Remuneration
8.0
EXPENDITURE
8.1
Inventory adjustments have been made as at the end of the year based on actual quantities consumed/
sold as follows:
64
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
Rs./ lakh
Shor
ta
ge
Short
ag
Surplus
Finished/semi-finished goods
Raw Materials
Packing Materials
Stores and Spares
(Previous years figures are given in bracket)

9.0
MISCELLANEOUS
9.1
In the opinion of the Board, Current Assets, Loans and Advances have a value on realization in the
ordinary course of business at least equal to the amount at which they are stated in the financial statements.
9.2
In view of decision for closure of the Corporation, exemption for maintaining cost records,Cost Accounting
Records Fertilizer Rules 1993 has been sought from appropriate authority,for which approval has yet
to be received.
9.3
No confirmation of balances from parties / employees / lenders have been received. The impact, if
any, on the accounts is not ascertainable.
9.4
Depreciation on fixed assets held for disposal has been provided up to the date of decision for closure
of the respective plants/offices. Since book value, as on date of closure is lower than the realizable
value, no further depreciation after the date of closure is provided.
9.5
Physical verification of Stores & Spares / movable assets was carried out during 2005-06. The accounting
where necessary, of shortages noticed, during physical verification has been done.
9.6
In view of decision for closure of the Corporation and further in view of the fact that Plants have been
closed and only few employees are left, the recoverable amount of Assets is not ascertainable as per
Accounting Standard - 28 of Institute of Chartered Accountants of India Impairment of Assets. Therefore,
impaired loss, if any, is not ascertained.
9.7
Misc. Income includes Rs.1396.09 Lakh of unspent liabilities, excess provisions and unclaimed balances
in respect of earlier years written back.
10.0
RELATED PARTY DISCLOSURES

(I)
KEY MANAGEMENT PERSONNEL:

1)
Shri Deepak Singhal C & MD, FCIL w.e.

f. 14.06.2006;
2)
Shri B. K. Sinha, C & MD w.e.

f. 01.08.2005 to 14.06.2006;
65
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
(II)
3)
Shri R. N. Dash, Director w.e.

f. 16.01.2006
4)
M s. Sofia Dahiya, Director (Finance) w.e.

f. 21.03.2006;
5)
Shri R.C. Meena, Director, w.e.

f. 13.06.2005;
6)
Shri A. P. Singh, Director (Finance), w.e.

f. 23.03.2004 to 21.03.2006;
7)
Shri A.N. Murty, Director, w.e.

f. 13.06.2005 to 16.01.2006;
8)
M s. Swatantra K. Sekhon, ED, FICC, DoF / C&MD, FCIL w.e.

f. 9.9.2003 upto 01.08.2005;
9)
Shri Tejinder Singh Laschar, Director w.e.

f. 19.09.2001 upto 13.6.2005;
10)
Dr. Rajneesh Goel, Director w.e.

f. 23.9.2002 upto 13.6.2005.
ENTERPRISES O
VER WHICH KEY MANA
GEMENT PERSONNEL ARE ABLE TO EXERCISE
OVER
MANAGEMENT
SIGNIFICANT INFLUENCE:
a)
(III)
FCI Aravali Gypsum and Minerals India Limited (FAGMIL)
DISCLOSURE OF TRANSA
CTIONS BETWEEN THE COMP
ANY AND RELA
TED P
AR
TIES AND
TRANSACTIONS
COMPANY
RELATED
PA
RTIES
ATUS OF OUTST
ANDING B
ALANCES AS ON 31.3.2006.
STA
OUTSTANDING
BALANCES
THE ST
Advance from M/s. FAGMIL
11.0
Rs.1.25 Lakh.
Maximum outstanding balance during the
year Rs.6.95 Lakh (previous year Rs.0.37 Lakh).
SEGMENT REPORTING
In the absence of any operation by the company, there are no separate segments to be reported.
12.0
Additional information as per the requirements of Schedule VI Part-II of the Companies Act, 1956 is
given in the Annexure-A.
13.0
Previous years figures have been regrouped / recasted wherever found necessary so as to make them
comparable to current years figures.
14.0
No provision for cess duty payable under section 441 A of the Companies Act, 1956 has been made,
as the necessary notification for the same has not been issued by the Central Government.
15.0
In view of decision by the Government for closure of the Corporation and further in the opinion of
the management there being no probability of set off of net deferred tax assets, no adjustments have
been carried out in respect of net deferred tax in terms of provisions of Accounting Standard-22 on
Taxes on Income, issued by the ICAI.
66
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
Q U ANTIT
ATIVE INFORMA
TION
ANTITA
INFORMATION
In respect of goods manufactured during the year 2005-06 as certified by management.
Finished Goods
1.
2.
3.
4.
Licenced
Capacity
M.T
.
M.T.
Installed
Capacity
M.T
.
M.T.
Actual Pr
oduction
roduction
2004-05
2005-06
M.T
.
M.T
.
M.T.
M.T.
3,30,000
3,30,000
9,000
9,000
900
900
3,000
3,000
2,97,000
2,97,000
Sindri
(a)
Urea (SMP)
(b)
Ammonium Nitrate
(c)
Sodium Hexameta Phosphate
(d)
Ammonium Bi-carbonate
(e)
Ammonia
(f)
Nitric Acid
Gorakhpur
(a)
Urea
2,85,000
2,85,000
(b)
Argon (NM3)
2,88,000
2,88,000
Ramagundam
(a)
Urea
4,95,000
4,95,000
(b)
Argon (NM3)
9,50,000
9,50,000
(c)
Ammonia
2,97,000
2,97,000
Talcher
(a)
Urea
4,95,000
4,95,000
(b)
Ammonia
2,97,000
2,97,000
67
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
ANNEXURE-A
ADDITIONAL INFORMA
TION
INFORMATION
Rs. in Lakh
1.
2006
2005
Components and spare parts.
Capital Goods
Value (estimated)
%age of total consumption
Value of imports calculated on CIF

basis (calculated at FOB plus 10%)
2.
Expenditure in foreign currency on account

of royalty, know-how, professional consultation
fees, interest and other matters.
3.
Consumption Raw Material,

Spare Parts and components.
2006
(i)
(ii)
(iii)
2005
2006
2005
Imported raw materials,

spare parts and components
Indegenous raw-materials
spare parts and components
Earnings in foreign exchange export of

goods calculated on cost basis as
insurance was not done and freight
was paid in Indian Currency
68
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
BALANCE SHEET ABSTRACT AND COMPANYS GENERAL BUSINESS PROFILE

(As at 31st March 2006)
(Rs. in 000s)
.
I
II.
III.
IV.
V.
Registration Details
Registration No.
Balance Sheet Date
3439
31.3.2006
State Code
55
Nil
Nil
Nil
Right Issue
Private Issue
Nil
Nil
128697800
Total Assets
128697800
7509239
Nil
121176806
Reserve and Surplus
Capital Raised During the Year

Public Issue
Bonus Issue
Govt. Contribution
Position of Mobilisation and
Deployment of Funds
Total Liabilities
Sources of Funds
Paid-up Capital
Secured Loans
Un-secured Loans
Application of Funds
Net Fixed Assets
Net Current Assets
Accumulated Losses
Performance of the Company
Turnover
Profit/Loss before Tax
Earnings per share (Rs)
Names of Principal Pr
oducts
Products
of the Company.
(a) ITC CODE 31021000
(b) ITC CODE 31023000
11755
2592324
(-) 1312043
127417514
Investment
Misc. Expenditure
5
Nil
5
(-) 12990157
Basic (-)1730
Diluted (-)1730
Total Expenditure
Profit after Tax
Dividend Rate
13208287
Nil
N.A.
Urea
Ammonium Nitrate
69
THE FERTILIZER
CORPORATION
OF INDIA LIMITED
CASH FLO
W ST
AT E M E N T
FLOW
STA
(Rs./Lakh)
A.
CASH FLO
W FR
OM OPERA
TING A
CTIVITIES:
FLOW
FROM
OPERATING
ACTIVITIES:
Net Loss before Tax
Adjustment for:
Depreciation
Interest Income
Provision for Loss due to obsolescence &
Shortages on Fixed Assets
Interest Expense
2.10
130779.02
Operating Loss before Working Capital change

Decrease in Sundry Debtors
Decrease in Loans & Advances
Decrease in Inventories
Decrease in Current Liabilities
23.01
491.29
0.66
(1814.78)
() 129901.57
31.10
(494.05)
130318.17
416.60
1299.82
-883.22
B.
CASH FLOW FROM INVESTING ACTIVITIES

Purchase/Sale of Fixed Assets
Interest Income
nil
494.05
494.05
389.17
C.
CASH FLO
W FR
OM FINANCING A
CTIVITIES
FLOW
FROM
ACTIVITIES
Interest Expense
Increase in Interest accrued and due
(130779.02)
131800.22
1021.20
632.03
Cash and Cash equivalent at beginning
8292.04
Cash and Cash equivalent at the end
8924.07
Sd/(R.N. Dash)
Director
Sd/(Sofia Dahiya)
Director (Finance)
Sd/(Man Singh)
General Manager
Sd/(Deepak Singhal)

For H.K. Chaudhry & Company
Sd/(I.J. Soni)
Partner
Member No. 88694
Place: New Delhi

Dated: 30.8.2006
70

Annual Report 2005 06

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Annual Report 2005 06

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THE FERTILIZER

Board of Directors, Principal Executives,

Comments of the Comptroller and Auditor

Profit & Loss Account

Balance Sheet Abstract and

Cash Flow Statement

Dated : September 2, 2006

Chairman, Audit Committee.

Net loss after prior

From Government of India

Overdue interest* (Up to 31.3.2000)

Grand Total (a+b)

*No further interest is provided on loans in view of severe financial constraints.

The constitution of ASC Committee is in process.

USE OF HINDI AS OFFICIAL LANGU

1. Shri Deepak Singhal, C&MD

2. Shri R N Dash, Director

3. Ms. Sofia Dahiya , Director (Finance)

4. Shri A.P. Singh, Director (Finance)

5. Shri R. C. Meena, Dy. Secretary

6. Shri A N Murty, Dy. Secretary

7. Shri B K Sinha, C&MD

Audit Committee Meetings

2. Ms. Sofia Dahiya

3. Shri R.N. Dash

4. Shri R.C. Meena

5. Shri A.N. Murty

6. Shri A.P. Singh

Shri R. N. Dash, Director

Ms. Sofia Dahiya, Director (Finance)

Shri R. C. Meena, Dy. Secretary

Replies of the Compan

The provisions under Section 383-A of the Companies

The Corporation did not have a Company

Perusal of the accounts for the year ending 31.3.2006

No Provision has been made for the

The Additional Custom Duty of Rs.580 lakh

Ministry of Finance had decided to keep the demand

Penal interest amounting to Rs. 13753.35 lakh

This has been disclosed in the Notes of Accounts (Note

Replies of the Compan

This has been disclosed in Notes to Accounts (Note

This has been disclosed in Note to Accounts (Note

Payments of Rs.67 lakh tow ards ex-gratia

This has been disclosed in Note to Accounts (Note

W e are unable to express our opinion on the

Realisability of License Fee Rs.22.18 lakh

This has been disclosed in Note to Accounts (Note

Unascertained interest/damages on account

This has been disclosed in Note to Accounts (Note

Replies of the Compan

Loss, if any, that may arise on disposal of

This has been disclosed in Note to Accounts (Note

Loss, if any, that may arise on disposal of

The adjustment of shortages/damages etc., noticed

Non-accounting of 900 acres of land at Korba

This has been disclosed in Note to Accounts (Note

Non accounting of lease rent recoverable from

This has been disclosed in Note to Accounts (Note

The liability that may arise on final settlement

As OTS amount was arrived at in consultation with

The Corporation has generally maintained

Physical verification of fixed assets,inventory etc. have