I BASIS OF ACCOUNTING:
 
 The financial statements are prepared in conformity with Generally
 Accepted Accounting Principles in India, the applicable Accounting
 Standards notified by the Companies (Accounting Standards) Rules, 2006
 and the other relevant provisions of the Companies Act, 1956. The
 Accounts have been prepared on the basis of historical cost. The
 Company follows the mercantile system of accounting for recognising
 income and expenditure on accrual basis.
 
 II USE OF ESTIMATES:
 
 The preparation of financial statements requires estimates and
 assumptions to be made that affect the reported amount of assets and
 liabilities on the date of the financial statements and the reported
 amount of revenue and expenses during the reporting period. Difference
 between the actual and estimates are recognised in the period in which
 the results are known/ materialised.
 
 III REVENUE RECOGNITION:
 
 a} Sale of goods are recognised when risk and rewards of ownership of
 the products are passed on to the customers which is generally on
 despatch of goods. Service revenue is recognised as per terms of
 contract. Sales include amounts recovered towards Excise Duty, and are
 net of returns.
 
 b} Revenue from sale of power from wind operated generators is
 accounted when the same is transmitted / confirmed by the Electricity
 Board.
 
 c} Revenue from letting out of storage facilities are accounted on
 accrual basis.
 
 d} Duty free imports of raw materials under Advance Licence for imports
 as per the Import and Export Policy are matched with the exports made
 against the said licences and the net benefit/obligation is accounted
 by making suitable adjustments in raw material consumption. The
 benefits accrued under the Duty Drawback and Duty Entitlement Pass Book
 Benefits as per the Import and Export Policy in respect of exports made
 under the said scheme have been included under the head ''Duty
 Drawback and Duty Entitlement Pass Book Benefits''.
 
 e} Revenue from sale of scrap is recognised as and when scrap is sold.
 
 f} Revenue from interest is recognised on a time proportion basis
 taking into account the amount outstanding and the rate applicable.
 
 g} Revenue from dividend is recognised when the shareholders'' right
 to receive payment is established by the balance sheet date.
 
 IV FIXED ASSETS:
 
 Tangible Assets:
 
 Fixed Assets are recorded at cost of acquisition or construction /
 erection including taxes, duties, freight and other incidental expenses
 related to acquisition and installation. Interest incurred during
 construction period on borrowings to finance qualifying fixed assets is
 capitalised. Fixed Assets which are not in active use are scrapped and
 written off.
 
 V DEPRECIATION:
 
 Depreciation on Plant and Machinery and Building is provided on
 Straight Line method except on Maleic Anhydride plant and all assets of
 CMC division, which has been provided on Written Down Value method. The
 rates at which depreciation is provided as above, are as prescribed by
 Schedule XIV to the Companies Act, 1956 and in terms of relevant
 circulars issued by the Department of Company Affairs.
 
 VI INVESTMENTS:
 
 Investments which are all long-term are stated at cost of acquisition
 and related expenses. Provision is made for any diminution, other than
 temporary, in the value of investments.
 
 VIII EMPLOYEE BENEFITS :
 
 1.  Short-term employee benefits
 
 All employee benefits payable wholly within twelve months of rendering
 the service are classified as short term employee benefits. Benefits
 such as salaries, wages, performance incentive paid annual leave,
 bonus, leave travel assistance, medical allowance, contribution to
 provident fund and superannuation etc. recognised as actual amounts due
 in period in which the employee renders the related services.
 
 2.  Post-employment benefits
 
 a.  Defined contribution plan
 
 Payment made to defined contribution plans such as Provident is charged
 as expenses as they fall due.
 
 b.  Defined Benefit Plans
 
 The cost of providing benefits i.e. gratuity is determined using the
 Projected Unit Credit Method, with actuarial valuation carried out as
 at the balance sheet date. Actuarial gains and losses are recognised
 immediately in the Profit and Loss Account.
 
 3.  Other Long - term employee benefits
 
 Other Long term employee benefit is recognised as an expenses in the
 profit and loss account as and when it accrues.  The Company determines
 the liability using the Projected Unit Credit Method, with actuarial
 valuation carried out as at the balance sheet date. The actuarial gains
 and losses in respect of such benefit are charged to the profit and
 loss account.
 
 IX FOREIGN CURRENCY TRANSLATION:
 
 a} Transactions denominated in foreign currencies are recorded at the
 exchange rates prevailing at the date of transaction.
 
 b} Monetary items denominated in foreign currency at the year end are
 translated at year end rates. In respect of Monetary items which are
 covered by foreign exchange contracts, the difference between the year
 end rates and the rate on the date of contract is recognised as
 exchange difference and the premium on such forward contracts is
 recognized over the life of the forward contract. The exchange
 differences arising on settlement / translation are recognised in the
 profit and loss statement.
 
 c} Exchange differences arising on long term foreign currency loans
 given to non-integral foreign subsidiaries is accumulated in Foreign
 Currency Translation Reserve and reversed to profit and loss statement
 as and when the loans are repaid/settled.
 
 X BORROWING COSTS:
 
 Borrowing costs that are directly attributable to the acquisition of
 qualifying assets are capitalised for the period until the asset is
 ready for its intended use. A qualifying asset is an asset that
 necessarily takes substantial period of time to get ready for its
 intended use. Other borrowing costs are recognised as an expense in the
 period in which they are incurred.
 
 XI LEASE RENTALS:
 
 Lease rentals paid in respect of assets taken on lease are charged to
 revenue over the estimated life of the assets.
 
 XII TAXATION:
 
 Current tax is determined as the amount of tax payable to the taxation
 authorities in respect of taxable income for the period.  Deferred tax
 is recognised, subject to the consideration of prudence, on timing
 difference being differences between taxable incomes and accounting
 income, that originate in one period and are capable of reversal in one
 or more subsequent periods.
 
 XIII PROVISIONS, CONTINGENT LIABILITES AND CONTINGENT ASSETS:
 
 Provisions are recognised only when there is present obligation as a
 result of past events and when a reliable estimate of the amount of the
 obligation can be made. Contingent liabilities disclosed for:-
 
 (i) possible obligations which will be confirmed only by future events
 not wholly within the control of the company, or
 
 (ii) present obligations arising from past events where it is not
 probable that an outflow of resources will be required to settle the
 obligation or a reliable estimate of the amount of obligation cannot be
 made.Contingent assets are not recognised in the financial statements,
 since this may result in recognition of income that may never be
 realised.
 
 XIV CASH AND CASH EQUIVALENTS
 
 The Company considers all highly liquid financial instruments, which
 are readily convertible into and cash and have original maturities of
 three months or less from the date of purchase, to be cash equivalents.