1.  Project status
 
 The Company has a plan to set up crude oil refineries in Haldia, West
 Bengal with total capacity of approximately 10 million metric tonnes
 per annum (MMTPA) with budgeted outlay of approximately Rs.
 83,000,000,000 (US $ 1.8 billion) of which Rs. 29,000,000,000 (US $
 0.63 billion) is planned to be funded by way of equity capital and the
 balance Rs. 54,000,000,000 (US $ 1.17 billion) by way of debt.
 
 The equity component was partially funded by issue of Global Depositary
 Receipts (GDR) of US $ 200 million (equivalent to Rs. 7,880,000,000) in
 December 2007. The proceeds of the GDR issue were utilized to pay
 capital advances related to purchase of equipments of two used oil
 refineries and other corporate expenses incurred during construction
 period.
 
 Further, on March 15, 2011, the Company has entered into two Assets
 Purchase agreements with Tagore Investments S.A. and Amber Energy S.A.
 (affiliates of HARDT Energy Limited) for the purchase of certain
 petroleum refinery equipments and technical components for US $ 275
 million (equivalent to Rs.  12,375,000,000) and US $ 142 million
 (equivalent to Rs. 6,390,000,000) respectively, aggregating to a total
 cost of US $ 417 million (equivalent to Rs.  18,765,000,000). As per
 such agreements, the Company shall issue GDR, subject to the Central
 Government approval, for an amount of US $ 175 million to Tagore
 Investments S.A. and US $ 142 million to Amber Energy S.A. and also
 make cash payment amounting to US $ 100 million to Tagore Investments
 S.A. Pursuant to another agreement, Abboro Limited (affiliate of HARDT
 Energy Limited) has already infused Rs. 102,431,700 as share
 application money, pending allotment as on March 31, 2011. The Company
 is also in discussion with other investors to bring in the balance
 equity required for the project.
 
 Further, as explained in more detail in note 8 below, the Company has
 sought an extension of period from the concerned authorities for
 compliance of certain conditions related to sub-lease of land required
 for the project at Haldia, West Bengal.
 
 The ability of the Company to continue as a going concern is
 significantly dependent on its ability to successfully arrange the
 balance funding and achieve financial closure to fund its project and
 obtain the necessary extension for compliance of terms related to
 sub-lease of land required for the refinery project.  In the event of
 any delay in the arrangement of the balance funding, the Management is
 confident of arranging the funds required for discharging the
 liabilities of the Company arising in the foreseeable future. These
 financial statements have been prepared on a going concern basis on the
 assumption that the necessary funding and financial closure will be
 achieved and do not include the adjustments that would result if the
 Company is unable to continue as a going concern.
 
 2.  Status of significant contracts
 
 - During the previous years, the Company had entered into agreements
 for supply of plant and machinery, certain process units, and auxiliary
 technical services related to the project. The said agreement provided
 for certain milestones of performance on part of the parties to the
 contract which more specifically involved delivery of equipments by the
 supplier/ contractors against periodical opening of letters of credit
 and periodical payment by the Company. The Company paid certain
 advances as per the terms of the contract, however, in view of the
 pending financial closure, it could not fulfill other terms and
 conditions stipulated under the said agreement. The suppliers/
 contractors also could not fulfill their obligations under the said
 agreements.
 
 In view of the fact that the obligations of either party to the
 contracts in the aforementioned agreements for supply of plant and
 machinery, certain process units, auxiliary technical services and
 consultancy services related to the project are not fulfilled, the
 Company''s liability for payment of Rs. 5,361,960,970 (as on March 31,
 2010 : Rs. 5,153,656,980) is not crystallized as at the balance sheet
 date and hence has not been recognised in these financial statements.
 Further, based on the developments stated in Note 1 above, Management
 is confident of achieving the financial closure and fulfilling its
 obligation under the said contracts.
 
 - Also, subsequent to March 31, 2011, the Company has successfully
 renegotiated one of the contracts (liability for which amounted to Rs.
 5,007,216,720 and is included in the note above) for supply of plant
 and machinery and certain process units in respect of its refinery
 projects whereby the scope of the contract has been amended to exclude
 auxiliary technical services and consultancy services besides reduction
 in the purchase price for the contract.  As per the terms of the
 amended contract, the Company was required to make certain payments as
 per the agreed payment schedule.  The Company is in the process of
 negotiating an extension from the supplier for compliance with the
 payment terms. The Company has given advances amounting to Rs.
 3,355,930,000 to such supplier in terms of the agreement executed by
 the Company for the said supply which will not be recoverable if the
 necessary extension is not granted by the supplier. Based on the
 development stated in Note 1 above, Management is confident of
 fulfilling the amended contractual liability.  
 
 
 -The Company has paid advances amounting to Rs.
 311,400,048 (as on March 31, 2010 Rs.  8,360,400,558) to the suppliers
 and auxiliary service providers. Due to delay in financial closure, the
 Company could not fulfill its financial obligations as stipulated in
 such agreements, resulting into delay in supply of plant and machinery
 and related services. As per these agreements, some of such advances
 may not be recoverable in the event of non- fulfillment of obligations
 by the Company.  Based on the developments stated in Note 1 above,
 Management is confident of achieving financial closure and fulfilling
 its obligations under various contracts in the foreseeable future.
 
 3. In the opinion of the Board of Directors, current assets, loans and
 advances have a value on realization in the ordinary course of the
 business at least equal to the amounts at which they are stated and
 provision for all known liabilities have been made.
 
 4.  The expenses incurred during the construction period are classified
 as Pre-operative expenses pending allocation and will be apportioned
 to the assets on the completion of the project. In respect of such
 expenditure, necessary details as per Part II of Schedule VI of the
 Companies Act, 1956 have been disclosed under schedule 3(B)(ii).
 
 5.  Contingent Liabilities
 
                                            (Rs.)
 
                                 2011        2010
 
 Claim against the          5,450,671   2,785,000
 company not acknowledged 
 as debt
 
 6.  The service tax liability has been ascertained and provided for in
 the books of accounts. The Company has been advised that as per the
 provisions of Central Excise Act, 1944, the Company is eligible to
 claim CENVAT Credit against the excise duty payable on the products to
 be manufactured by the Company and accordingly CENVAT credit of service
 tax has been considered as an asset and classified as Cenvat
 recoverable in Schedule 6.
 
 7.  Leasehold Land
 
 Haldia Development Authority (HDA), vide its memo dated March 25, 2008,
 offered land admeasuring about 400 acres at Haldia, West Bengal to the
 Company for setting up the refinery project (''the project''). As per the
 terms of the said memo, lease premium of Rs. 600,000,000 was
 stipulated.
 
 Subsequently, vide its memo dated April 23, 2008, HDA granted
 permission to the Company for survey work, soil testing, land
 development work and construction work and accordingly the Company
 carried out such work at a cost of Rs. 195,092,367.  Also, the Company
 has incurred Rs. 49,637,110 for civil work carried out on such land.
 Pending financial closure for the refinery project, the Company could
 not pay the aforesaid lease premium in full. During the year ended
 March 31, 2010, the Company entered into a tripartite agreement dated
 March 19, 2010 along with HDA and West Bengal Industrial Development
 Corporation Limited (WBIDC).
 
 As per the terms of the aforesaid agreement, WBIDC has paid Rs.
 630,000,000 as lease premium for land, development fee and other
 amounts to HDA and the Company was given permissive possession of the
 said land for a period of six months from the date of the agreement,
 for the purpose of implementing the project. Further, it was stipulated
 that the said land shall be sub-leased in favour of the Company at the
 end of six months from the date of the agreement subject to compliance
 with certain conditions.
 
 Since the Company is in the process of achieving financial closure for
 the project, it has requested WBIDC for granting an extension of period
 for compliance of the aforementioned conditions.
 
 Based on the developments stated in Note 1 above, Management is
 confident of achieving the financial closure and obtaining the
 necessary extension and accordingly, aforementioned cost of land
 development and civil work amounting to Rs. 195,092,367 and Rs.
 49,637,110 respectively is included in the cost of leasehold land and
 capital work in progress.
 
 8. The Company has requested its vendors to confirm their status under
 Micro, Small and Medium Enterprises Development Act (MSMED), 2006.
 Based on the confirmations received, there are no amounts due to any
 micro or small enterprise under the MSMED Act, 2006.
 
 9. The Company has taken various residential, office and warehouse
 premises under operating lease agreements. These are generally
 cancellable and are renewable by mutual consent on mutually agreed
 terms.
 
 Rental expenses of Rs. 9,519,867 (previous year Rs.  18,830,947) in
 respect of operating lease obligation have been recognised in
 Pre-operative expenses pending allocation.
 
 10. Based on the opinion from an independent eminent lawyer and in the
 light of certain court judgements, certain services, rendered by
 foreign suppliers mainly in connection with the purchase of plant and
 machinery, have been considered to be part of supply of plant and
 machinery and the Company has been advised that there would be no
 liability on account of tax deducted at source and service tax.
 Accordingly, service tax and tax deducted at source amounting to Rs.
 5,437,653 and Rs. 6,001,848 respectively has been derecognised in the
 financial statements and interest cost for non payment of the tax
 deducted at source for the period from January 1, 2011 to March 31,
 2011 amounting to Rs. 218,407 has not been provided for in the
 financial statements.
 
 Further, in the light of certain court judgements and in line with the
 Company''s position in its income tax returns for the previous years,
 the interest income earned in those years has been considered to be
 capital in nature and accordingly the provision for income tax
 (including of interest thereon) created in respect thereof amounting to
 Rs. 56,165,790 in those years has been derecognized in the financial
 statements for the year ended March 31, 2011 and also the interest
 thereon for the period from January 1, 2011 to March 31, 2011 amounting
 to Rs. 2,389,182 has not been provided for in the financial statements.
 
 11.  Related party transactions
 
  a.  Name of Related Parties 
 
 Nature of Relationship           :  Name of Related Parties
 
 Key Managerial Personnel         :  Mr. D. Sundararajan (Managing 
                                     Director) from February 05, 2011
 
                                     Mr.Deep Kumar Rastogi (Executive 
                                     Chairman) 
                                     
                                     Mr. Manabendra Guha Roy (Chief 
                                     Executive Officer) upto January 
                                     14, 2011 
 
                                     Mr. Ramesh Bhosale (Chief 
                                     Financial Officer) upto January 
                                     17, 2011
 
 Relatives of key managerial       : Mrs.Anuja Bhosale (wife of 
 personnel                           Mr.Ramesh Bhosale)
                                    
 
  
 12.  Employee Benefits
 
 C.  Provident Fund
 
 Contribution made by the Company during the year is Rs. 851,568
 (previous year Rs. 1,524,392).
 
 13.  Additional information pursuant to the provisions of paragraphs 3,
 4C and 4D of Part II of Schedule VI to the Companies Act, 1956.
 
 i) Details of Capacity and Production
 
 In the absence of manufacturing activity in the Company, aforesaid
 information is not applicable.
 
 ii) Details of Trading Goods
 
 In the absence of trading activity in the Company, aforesaid
 information is not applicable
 
 iii) Expenditure in Foreign Currency
 
 (On cash basis including amounts capitalized during the year)
 
 14.  Based on the opinion from an independent eminent lawyer, the
 Company would not be liable to pay income tax on foreign exchange gain
 amounting to Rs. 284,972 (Previous Year Rs. 69,667,513) being receipt
 on capital account.  Accordingly, no provision for tax has been made on
 the exchange gain.
 
 15.  The Company is setting up a refinery project. The indirect
 expenditure/income during construction period has been recognised in
 Pre-operative expenses pending allocation account, which forms part
 of capital work-in-progress.  The said account includes foreign
 exchange gain of Rs. 972,376,986 (including previous year Rs.
 972,092,015), corporate expenses of Rs. 10,301,755 (including previous
 year Rs. 7,624,729), interest on statutory dues of Rs. 34,671,568
 (including previous year Rs. 91,089,885), FCCB expenses written off of
 Rs. 54,053,605 (including previous year Rs. 54,053,605), capital
 advance/ balances written (back)/ off of Rs. (2,277,184) (including
 previous year Rs. 1,752,775) and leasehold improvements written off of
 Rs. 16,368,548 (including previous year Rs. 2,639,418) till March 31,
 2011. At the time of allocation of pre-operative expenses to the
 respective assets on commissioning of the project, above mentioned
 expenses/income shall not be capitalized. The above accounting
 treatment is in accordance with the clarification given by the
 Department of Companies Affairs (Letter No. 2/17/64-PR, dated
 29.01.1964) and accordingly Profit and Loss Account has not been
 prepared.
 
 16.  Previous year figures have been re-classified/re-grouped, wherever
 considered necessary to conform to current year''s classification.