1.  BASIS FOR PREPARATION
 
 The financial statements are prepared under historical cost convention
 to comply in all material aspects with the mandatory Accounting
 Standards notified by the Companies (Accounting Standards) Rules 2006
 and the provisions of the Companies Act, 1956, adopting accrual system
 of accounting unless otherwise stated.
 
 2.  USE OF ESTIMATES
 
 The preparation of financial statements requires management to make
 certain estimates and assumptions that affect the amounts reported in
 the financial statements and notes thereto. Differences between actual
 amounts and estimates are recognised in the period in which they
 materialise.
 
 3.  FIXED ASSETS
 
 3.1 LAND
 
 Land acquired on lease where period of lease exceeds 99 years is
 treated as freehold.
 
 3.2 FIXED ASSETS OTHER THAN LAND
 
 3.2.1. Fixed Assets are stated at cost of acquisition (including
 incidental expenses) less accumulated depreciation.
 
 3.2.2 Expenditure on assets, other than plant and machinery, LPG
 cylinders and pressure regulators, not exceeding Rs 1,000 per item is
 charged to revenue.
 
 3.2.3 Machinery spares that are specific to a fixed asset are
 capitalised along with the fixed asset.  Replacement of such spares is
 charged to revenue.
 
 3.3 EXPENDITURE DURING CONSTRUCTION PERIOD
 
 Direct expenses including borrowing cost incurred during construction
 period on capital projects are capitalised. Indirect expenses of the
 project group which are allocated to projects costing Rs 5 crores and
 above are also capitalised. Crop compensation expenses incurred in the
 process of laying pipelines are capitalised. Expenditure incurred
 generally during construction period of projects on assets like
 electricity transmission lines, roads, culverts etc. the ownership of
 which is not with the Company are charged to revenue in the accounting
 period of incurrence of such expenditure.
 
 3.4 INTANGIBLE ASSETS
 
 3.4.1 Cost of right of way that is perennial in nature is not
 amortised.
 
 3.4.2 Expenditure incurred for creating/acquiring other intangible
 assets of Rs 0.50 crores and above, from which future economic benefits
 will flow over a period of time, is amortised over the estimated useful
 life of the asset or five years, whichever is lower, from the time the
 intangible asset starts providing the economic benefit.
 
 3.4.3 In other cases, the expenditure is charged to revenue in the year
 the expenditure is incurred.
 
 4.  IMPAIRMENT OF ASSETS
 
 The values of fixed assets in respect of Cash Generating Units are
 reviewed by the management for impairment at each Balance Sheet date if
 events or circumstances indicate that the carrying values may not be
 recoverable. If the carrying value is more than the net selling price
 of the asset or present value, the difference is recognized as an
 impairment loss.
 
 5.  BORROWING COSTS
 
 Borrowing costs attributable to acquisition, construction or production
 of qualifying asset are capitalised as part of the cost of that asset,
 till the month in which the asset is ready for use. Other borrowing
 costs are recognised as an expense in the period in which these are
 incurred.
 
 6.  DEPRECIATION
 
 6.1 Depreciation on fixed assets is provided under the straight line
 method, at rates prescribed under Schedule XIV to the Companies Act,
 1956, except in following cases:
 
 6.1.1.  Premium paid for acquiring leasehold land for lease period not
 exceeding 99 years, is amortised over the period of lease.
 
 6.1.2.  LPG cylinders, pressure regulators and other fixed assets
 costing not more than Rs 5,000 each are depreciated @ 100 percent in the
 year of capitalisation.
 
 6.1.3.  Computer equipments and peripherals, and mobile phones are
 depreciated over a period of 4 years. Furniture provided at the
 residence of management staff is depreciated over a period of seven
 years.
 
 6.2 Depreciation is charged on addition / deletion on pro-rata monthly
 basis including the month of addition / deletion.
 
 7.  INVESTMENTS
 
 7.1 Current investments are valued at lower of cost or fair market
 value.
 
 7.2 Long-term investments are valued at cost. Provision for diminution
 is made to recognise a decline, other than of temporary nature, in the
 value of such investments.
 
 8.  INVENTORY
 
 8.1.  Raw material and Intermediates are valued at cost or net
 realisable value whichever is lower. Cost is determined as follows:
 
 8.1.1.  Raw materials on weighted average cost. Purchased raw materials
 in transit are carried at cost.
 
 8.1.2.  Intermediate Stocks at raw material cost plus cost of
 conversion.
 
 8.2.  Finished products are valued at weighted average cost or at net
 realisable value, whichever is lower.
 
 8.3.  Stores are valued at weighted average cost. Obsolete stores are
 valued at Rs Nil. Slow moving stores/ other materials identified as
 surplus and no longer usable are valued at Rs Nil.
 
 8.4.  Packages are valued at weighted average cost or at net realisable
 value, whichever is lower.
 
 9.  REVENUE RECOGNITION
 
 9.1. Sales are net of trade discounts and include, inter alia, excise /
 customs duties / claim from Petroleum Planning and Analysis Cell,
 Government of India and other elements allowed by the Government from
 time to time.
 
 9.2 Claims/Surrenders including subsidy on LPG and SKO on/to Petroleum
 Planning and Analysis Cell, Government of India are booked on ''in
 principle acceptance'' thereof on the basis of available instructions/
 clarifications subject to final adjustments after necessary audit, as
 stipulated. Adjustments if any, on completion of audit are recognised.
 
 9.3.  Other claims are booked when there is a reasonable certainty of
 recovery. Claims are reviewed on a periodical basis and if recovery is
 uncertain, provision is made in the accounts.
 
 9.4.  Income from sale of scrap is accounted for on realisation.
 
 10.  CLASSIFICATION OF INCOME/EXPENSES
 
 10.1.  Expenditure on Research, other than capital expenditure, is
 charged to revenue in the year in which the expenditure is incurred.
 
 10.2.  Income/expenditure upto Rs 0.05 crore in each case pertaining to
 prior years is charged to the current year.
 
 10.3.  Prepaid expenses upto Rs 0.05 crore in each case, are charged to
 revenue as and when incurred.
 
 10.4.  Deposits placed with Government agencies/ local authorities
 which are perennial in nature are charged to revenue in the year of
 payment.
 
 11.  EMPLOYEE BENEFITS
 
 11.1.  Contributions to Provident Fund for the year are recognised in
 the Profit & Loss Account. Liability towards superannuation benefits is
 charged to the Profit & Loss Account.
 
 11.2.  The liability towards gratuity, leave encashment, post
 retirement benefits and other long term benefits are provided for in
 the accounts based on actuarial valuation as at the end of the year. To
 determine the present value of the defined benefit obligations and the
 current and past service costs, the Projected Unit Credit Method is
 used. Actuarial gains and losses are recognised in the Profit & Loss
 Account as income or expense.
 
 12.  DUTIES ON BONDED STOCKS
 
 12.1.  Customs duty on Raw materials/Finished goods lying in bond are
 provided for at the applicable rates except where liability to pay duty
 is transferred to consignee.
 
 12.2.  Excise duty on finished stocks lying in bond is provided for, at
 the assessable value applicable at each of the locations at maximum
 rates based on end use.
 
 13.  FOREIGN CURRENCY & DERIVATIVE TRANSACTIONS
 
 13.1.  Transactions in foreign currency are accounted at the exchange
 rate prevailing on the date of transaction.
 
 13.2.  Monetary items denominated in foreign currency are converted at
 exchange rates prevailing on the date of Balance Sheet.
 
 13.3.  Foreign Exchange differences arising at the time of translation
 or settlement are recognised as income or expense in the Profit & Loss
 Account either under foreign exchange fluctuation or interest as the
 case may be.
 
 Premium/discount arising at the inception of the forward exchange
 contracts entered into to hedge foreign currency risks are amortised as
 expense or income over the life of the contract. Exchange differences
 on such contracts are recognised in the Profit & Loss Account.
 
 13.4.  Gains / losses arising on settlement of Derivative transactions
 entered into by the Corporation to manage the commodity price risk and
 exposures on account of fluctuations in interest rates and foreign
 exchange are recognised in the Profit & Loss Account. Provision for
 losses in respect of outstanding contracts as on balance sheet date is
 made based on mark to market valuations of such contracts.
 
 14.  GOVERNMENT GRANTS
 
 14.1.  In case of depreciable assets, the cost of the asset is shown at
 gross value and grant thereon is taken to Capital Reserve as deferred
 income, which is recognised in the Profit & Loss Account over the
 useful life of the asset.
 
 14.2.  Government grants of the nature of promoters'' contributions are
 credited to Capital Reserve and treated as part of Shareholders'' Funds.
 
 15.  PROVISIONS, CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
 
 15.1.  Provision is recognised when there is a present obligation as a
 result of a past event and it is probable that an outflow of resources
 will be required to settle the obligation in respect of which a
 reliable estimate can be made.
 
 15.2.  Contingent liabilities are disclosed in respect of possible
 obligations that arise from past events but their existence is
 confirmed by the occurrence or non-occurrence of one or more uncertain
 future events not wholly within the control of the Corporation.
 
 15.3.  Capital commitments and Contingent liabilities disclosed are in
 respect of items which exceed Rs 0.05 crore in each case.
 
 15.4.  Contingent liabilities are considered only on conversion of show
 cause notices issued by various Government authorities into demand.
 
 16.  TAXES ON INCOME
 
 16.1.  Provision for current tax is made in accordance with the
 provisions of the Income Tax Act, 1961.
 
 16.2.  Deferred tax on account of timing difference between taxable and
 accounting income is provided using the tax rates and tax laws enacted
 or substantively enacted by the Balance Sheet date.
 
 16.3.  Deferred tax assets are not recognised unless, in the management
 judgement there is a virtual certainty supported by convincing evidence
 that sufficient future taxable income will be available against which
 such deferred tax assets can be realised.