(a) Basis of Preparation:
 
 The financial statements have been prepared to comply in all material
 respects with the notified accounting standards by Companies
 (Accounting Standards) Rules, 2006 , as amended, and the relevant
 provisions of the Companies Act, 1956. The financial statements have
 been prepared under the historical cost convention on an accrual basis.
 The accounting policies have been consistently applied and are
 consistent with those used in the previous year.
 
 (b) Fixed Assets:
 
 Fixed Assets are stated at cost less accumulated depreciation and
 provision for impairment, if any. Cost comprises the purchase price and
 any attributable cost of bringing the asset to its working condition
 for its intended use.
 
 (c) Intangible Assets
 
 Intangible assets are stated at cost less accumulated amortisation.
 
 (d) Depreciation:
 
 (i) Leasehold Land:
 
 No amount has been written off against leasehold land since as per the
 lease agreements, the leases are renewable at the option of the Company
 for a further period of 99 years at the end of the lease period of 99
 years, without/marginal payment of further premium.
 
 (ii) Other Fixed Assets:
 
 a) In respect of all assets at Ankleshwar Unit, Jhagadia Unit, Vapi
 Unit at A-2/1, GIDC, Vapi, Haldia Unit, Research and Development assets
 and additions to Plant and Machinery from 1st January, 1983 of Vapi
 Unit at 11, GIDC, Vapi, on straight line basis in accordance with
 Section 205(2)(b) of the Companies Act, 1956 as under:
 
 (i) At the straight line rates corresponding to the rates applicable
 under the Income-tax Rules in force at the time of
 acquisition/installation of the said assets, in accordance with
 Circular No.1/86 dated 21st May, 1986 issued by the Department of
 Company Affairs in respect of additions to the aforesaid Fixed Assets
 upto 1st April, 1987.
 
 (ii) At the straight line rates specified in Schedule XIV of the
 Companies Act, 1956 in respect of additions to the aforesaid Fixed
 Assets on or after 2nd April, 1987.
 
 (iii) In respect of additions to the following Plant and Machinery
 after 1st October, 2001 at the straight line rates specified below:
 
 Membrane used in Caustic Chlorine Plant - 20%
 
 Hot Section in the Power Plant - 33%
 
 Gas Turbine Engine in Power Plant - 16.67%
 
 (b) In respect of all other Fixed Assets, on written down value basis
 in accordance with Section 205(2)(a) of the Companies Act, 1956 at the
 rates specified in Schedule XIV to the Companies Act, 1956.
 
 (c) Assets costing Rs.5,000 or less have been depreciated at the rate
 of 100%.
 
 (d) In respect of Leasehold Improvement Assets on a straight line basis
 over the period of the lease which is generally five years.
 
 (e) In respect of additions to/deletions from the Fixed Assets, on
 pro-rata basis with reference to the month of addition/deletion of the
 Assets.
 
 (e) Inventories:
 
 (i) Stocks of stores and spares, packing materials and raw materials
 are valued at lower of cost or net realisable value and for this
 purpose, cost is determined on moving weighted average basis. However,
 the aforesaid items are not valued below cost if the finished products
 in which they are to be incorporated are expected to be sold at or
 above cost.
 
 (ii) Semi-finished products, finished products and by-products are
 valued at lower of cost or net realisable value and for this purpose,
 cost is determined on standard costing basis. Cost of finished goods
 includes excise duty, as applicable.
 
 (iii) Traded goods are valued at lower of cost or net realisable value.
 
 (f) Amortisation of Intangible Assets:
 
 (i) Expenditure incurred on product acquisitions is amortised on
 straight line basis over a period of fifteen years from the month of
 addition, to match their expected future economic benefits.
 
 (ii) Other intangible assets are amortised on straight line basis over
 a period of five years.
 
 (g) Investments:
 
 Long-term investments are carried at cost of acquisition. However, the
 carrying amount is reduced to recognise a decline, other than
 temporary, in the value of long-term investments by a charge to the
 profit and loss account.  Current investments are stated at lower of
 cost and fair value determined on individual investment basis.
 
 (h) Sale of Trade Receivable
 
 The Company sells insured trade receivables to banks whereby
 significant risks and rewards are transferred and this transfer is
 treated as true sale for both legal and financial reporting purposes
 and accordingly, these receivables are not reflected on the balance
 sheet of the Company.
 
 (i) Export Benefits:
 
 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 benefit accrued under the Duty Entitlement Pass Book Scheme as per
 the Import and Export Policy in respect of exports made under the said
 scheme is included under the head `Export Incentives in `Other Income
 from operations.
 
 (j) Retirement Benefits:
 
 (i) Provident Fund is a defined contribution scheme established under a
 State Plan. The contributions to the scheme are charged to the profit
 and loss account in the year when the contributions to the funds are
 due.
 
 (ii) Superannuation Fund is a defined contribution scheme and
 contributions to the scheme are charged to the profit and loss account
 in the year when the contributions are due. The scheme is funded with
 an insurance company in the form of a qualifying insurance policy.
 
 (iii) The Company has a defined benefit gratuity plan. Every employee
 who has completed five years or more of service gets a gratuity on post
 employment at 15 days salary (last drawn salary) for each completed
 year of service as per the rules of the Company. The aforesaid
 liability is provided for on the basis of an actuarial valuation on
 projected unit credit method made at the end of the financial year. The
 scheme is funded with an insurance company in the form of a qualifying
 insurance policy.
 
 (iv) The Company has other long-term employee benefits in the nature of
 leave encashment. The liability in respect of leave encashment is
 provided for on the basis of an actuarial valuation on projected unit
 credit method made at the end of the financial year. The aforesaid
 leave encashment is funded with an insurance company in the form of a
 qualifying insurance policy.
 
 (v) Actuarial gains/ losses are recognised immediately to the profit
 and loss account.  
 
 (k) Revenue recognition
 
 (i) Revenue from sale of goods is recognised when the significant risks
 and rewards of ownership of the goods have passed to the buyer.
 
 (ii) Revenue from sale of Certified Emission Reduction (CER) is
 recognised as income on delivery thereof in terms of the contract with
 the respective buyers.
 
 (iii) Income from services are recognised as and when the services are
 rendered
 
 (iv) Interest is recognised on a time proportion basis taking into
 account the amount outstanding and the rate applicable.
 
 (v) Dividend is recognised when the shareholders right to receive
 payment is established by the balance sheet date.
 
 (l) Foreign Currency Transactions:
 
 (i) Transactions in foreign currency are recorded by applying the
 exchange rate at the date of the transaction.  Monetary items
 denominated in foreign currency remaining unsettled at the end of the
 year, are translated at the closing rates, prevailing on the Balance
 Sheet date. Non-monetary items which are carried in terms of historical
 cost denominated in a foreign currency are reported using the exchange
 rate at the date of the transaction.  Exchange differences arising as a
 result of the above are recognised as income or expense in the profit
 and loss account except for exchange differences arising on a monetary
 item which, in substance, form part of the Companys net investment in
 a non-integral foreign operation which is accumulated in a Foreign
 Currency Translation Reserve until the disposal of the net investment.
 Exchange difference arising on the settlement of monetary items at
 rates different from those at which they were initially recorded during
 the year, or reported in previous financial statements, are recognised
 as income or as expenses in the year in which they arise.
 
 (ii) In the case of forward contracts not intended for trading or
 speculation purposes, the premium or discount arising at the inception
 of the contract is amortised as an expense or income with reference to
 the spot rate as at the end of the period over the life of the
 contract. Exchange difference on such contracts are recognised in the
 statements of profit and loss in the year in which the exchange rate
 change. Any profit and loss arising on cancellation or renewal of
 forward exchange contract is recognised as income or as expenses for
 the year.
 
 (m) Derivative Instruments:
 
 As per the ICAI announcement, accounting for derivative contracts,
 other than those covered under AS 11, are marked to market on a
 portfolio basis, and the net loss is charged to the profit and loss
 account. Net gains are ignored.
 
 (n) Research and Development Costs:
 
 Research Costs are charged as an expense in the year in which they are
 incurred and are reflected under the appropriate heads of account.
 Development expenditure is carried forward when its future
 recoverability can reasonably be regarded as assured and is amortised
 over the period of expected future benefit.
 
 (o) Borrowing Costs:
 
 Interest and other costs incurred for acquisition and construction of
 qualifying assets, upto the date of commissioning / installation, are
 capitalised as part of the cost of the said assets.  
 
 (p) Assets taken on Lease: 
 
 (i) Operating Leases:
 
 Leases where the lessor effectively retains substantially all the risks
 and benefits of ownership of the leased term, are classified as
 operating leases. Rentals and all other expenses in respect of assets
 taken on lease are debited to Profit and Loss Account on straight line
 basis over the lease term.
 
 (ii) Finance Leases:
 
 Assets acquired under finance leases which effectively transfer to the
 Company substantially all the risks and benefits incidental to
 ownership of the leased item, are capitalised and a corresponding loan
 liability is recognised.  The lease rentals paid are bifurcated into
 principal and interest component by applying an implicit rate of
 return.  The interest is charged as a period cost and the principal
 amount is adjusted against the liability recognised in respect of
 assets taken on financial lease.
 
 (q) Earnings Per Share:
 
 Basic earnings per share are calculated by dividing the net profit or
 loss for the period attributable to equity shareholders by the weighted
 average number of equity shares outstanding during the period. The
 weighted average number of equity shares outstanding during the period
 are adjusted for events of bonus issue.
 
 For the purpose of calculating diluted earnings per share, the net
 profit or loss for the period attributable to equity shareholders and
 the weighted average number of shares outstanding during the period are
 adjusted for the effects of all dilutive potential equity shares.
 
 (r) Segment Reporting Policies:
 
 The Companys operative businesses are organised and managed separately
 according to the nature of products, with each segment representing a
 strategic business unit that offers different products and serves
 different markets.  The analysis of geographical segments is based on
 the areas in which major operating divisions of the Company operate.
 The Company accounts for inter-segment sales and transfers as if the
 sales were to third parties at market prices.
 
 Unallocable items includes general corporate income and expense items
 which are not allocated to any business segment.
 
 Segment Policies:
 
 The Company prepares its segment information in conformity with the
 accounting policies adopted for preparing and presenting the financial
 statements of the Company as a whole. Common allocable costs are
 allocated to each segment on an appropriate basis.
 
 (s) Cash and cash equivalents
 
 Cash and cash equivalents for the purpose of cash flow statements
 comprise cash at bank and in hand and short-term investments with an
 original maturity of three months or less.
 
 (t) Taxation:
 
 Tax expense comprises of current and deferred tax. Current income tax
 is measured at the amount expected to be paid to the tax authorities in
 accordance with the Income-tax Act, 1961 enacted in India. Deferred
 income taxes reflects the impact of current year timing differences
 between taxable income and accounting income for the year and reversal
 of timing differences of earlier years.
 
 Deferred tax is measured based on the tax rates and the tax laws
 enacted or substantively enacted at the balance sheet date. Deferred
 tax assets and deferred tax liabilities are offset, if a legally
 enforceable right exists to set off current tax assets against current
 tax liabilities and the deferred tax assets and deferred tax
 liabilities relate to the taxes on income levied by the same governing
 taxation laws. Deferred tax assets are recognised only to the extent
 that there is reasonable certainty that sufficient future taxable
 income will be available against which such deferred tax assets can be
 realised. In situations where the Company has unabsorbed depreciation
 or carry forward tax losses, all deferred tax assets are recognised
 only if there is virtual certainty supported by convincing evidence
 that they can be realised against future taxable profits.
 
 The carrying amount of deferred tax assets are reviewed at each balance
 sheet date. The Company writes-down the carrying amount of a deferred
 tax asset to the extent that it is no longer reasonably certain or
 virtually certain, as the case may be, that sufficient future taxable
 income will be available against which deferred tax asset can be
 realised.  Any such write-down is reversed to the extent that it
 becomes reasonably certain or virtually certain, as the case may be,
 that sufficient future taxable income will be available.
 
 MAT credit is recognised as an asset only when and to the extent there
 is convincing evidence that the Company will pay normal income tax
 during the specified period. The Company reviews the same at each
 balance sheet date and writes down the carrying amount of MAT Credit
 Entitlement to the extent there is no longer convincing evidence to the
 effect that Company will pay normal Income Tax during the specified
 period.
 
 (u) Provisions
 
 A provision is recognised when the Company has a present legal or
 constructive obligation as a result of past events and it is probable
 that an obligation of resources embodying economic benefits will be
 required to settle the obligation and a reliable estimate of the amount
 of the obligation can be made. Provisions are not discounted to its
 present value and are determined based on the best estimate required to
 settle the obligation at the balance sheet date. These are reviewed at
 each balance sheet and adjusted to reflect the current best estimates.