1.  BASIS OF PREPARATION
 
 1.1 The financial statements are prepared under historical cost
 convention in accordance with the mandatory accounting standards
 notified by the Companies (Accounting Standards) Rules, 2006 and the
 provisions of the Companies Act, 1956.
 
 1.2 The preparation of financial statements requires the management to
 make estimates and assumptions that affect the reported amount of
 assets, liabilities and disclosure of contingent liabilities as at the
 date of the financial statements. Management believes that these
 estimates and assumptions are reasonable and prudent. However, actual
 results could differ from estimates.
 
 2.  FIXED ASSETS
 
 2.1 Fixed Assets
 
 2.1.1 Fixed Assets are stated at acquisition cost less accumulated
 depreciation /amortization and cumulative impairment.
 
 2.1.2 Land acquired on perpetual lease as well as on lease for over 99
 years is treated as free hold land.
 
 2.1.3 Land acquired on lease for 99 years or less is treated as
 leasehold land.
 
 2.1.4 Technical know-how / license fee relating to plants/facilities
 are capitalised as part of cost of the underlying asset.
 
 2.2 Construction Period Expenses on Projects
 
 2.2.1 Revenue expenses exclusively attributable to projects incurred
 during construction period are capitalised. However, such expenses in
 respect of capital facilities being executed along with the
 production/operations simultaneously are charged to revenue.
 
 2.2.2 Financing cost incurred during construction period on loans
 specifically borrowed and utilised for projects is capitalised on
 quarterly basis up to the date of capitalisation.
 
 2.2.3 Financing cost, if any, incurred on General Borrowings used for
 projects is capitalised at the weighted average cost. The amount of
 such borrowings is determined on quarterly basis after setting off the
 amount of internal accruals.
 
 2.3 Capital Stores
 
 2.3.1 Capital stores are valued at cost. Specific provision is made for
 likely diminution in value, wherever required.
 
 2.4 Depreciation/Amortisation
 
 2.4.1 Cost of leasehold land for 99 years or less is amortised over the
 lease period.
 
 2.4.2 Depreciation on fixed assets is provided in accordance with the
 rates as specified in Schedule XIV to The Companies Act, 1956, on
 straight line method, upto 95% of the cost of the asset other than
 Insurance spares which are depreciated upto 100%. Depreciation is
 charged pro-rata on quarterly basis on assets, from/upto the quarter of
 capitalisation/sale, disposal/dismantle or earmarking for
 disposal/dismantling during the year.
 
 2.4.3 Assets, other than LPG Cylinders and Pressure Regulators, costing
 upto Rs. 5,000/-per item are depreciated fully in the year of
 capitalisation.
 
 2.4.4 Expenditure on items like electricity transmission lines, railway
 sidings, roads, culverts etc. the ownership of which is not with the
 Company are charged off to revenue in the year of incurrence of such
 expenditure.
 
 2.5 Impairment of Assets
 
 As at each balance sheet date, the carrying amount of cash generating
 units / assets is tested for impairment so as to determine:
 
 (a) the provision for impairment loss, if any, required; or
 
 (b) the reversal, if any, required of impairment loss recognized in
 previous periods.
 
 Impairment loss is recognized when the carrying amount of an asset
 exceeds recoverable amount.
 
 3.  INTANGIBLE ASSETS
 
 3.1 Technical know-how / license fee relating to production process and
 process design are recognised as Intangible Assets and amortised on a
 straight line basis over a period of ten years or life of the
 underlying plant/ facility, whichever is earlier.
 
 3.2 Expenditure incurred on Research & Development, other than on
 capital account, is charged to revenue.
 
 3.3 Costs incurred on computer software purchased/developed resulting
 in future economic benefits, are capitalised as Intangible Asset and
 amortised over a period of three years beginning from the quarter in
 which such software is capitalised. However, where such computer
 software is still in development stage, costs incurred during the
 development stage of such software are accounted as Work-in
 Progress-Intangible Assets.
 
 3.4 Cost of Right of Way for laying pipelines is capitalised. However,
 such Right of Way being perpetual in nature, is not amortised.
 
 4.  BORROWING COST
 
 Borrowing costs that are attributable to the acquisition and
 construction of the qualifying asset are capitalized as part of the
 cost of such assets. A qualifying asset is one that necessarily takes
 substantial period of time to get ready for intended use. All other
 borrowing costs are charged to revenue.
 
 5.  FOREIGN CURRENCY TRANSLATION
 
 5.1 Transactions in foreign currency are recorded at exchange rates
 prevailing on the date of transactions.
 
 5.2 Monetary items denominated in foreign currencies (such as cash,
 receivables, payables etc) outstanding at the year end, are translated
 at exchange rates prevailing as at the year end.
 
 5.3 Non-monetary items denominated in foreign currency, (such as
 investments, fixed assets etc.) are valued at the exchange rate
 prevailing on the date of the transaction.
 
 5.4.1 (a) Any gains or losses arising due to differences in exchange
 rates at the time of translation or settlement are accounted for in the
 Profit & Loss Account either under the head foreign exchange
 fluctuation or interest cost, as the case may be, except those relating
 to long-term foreign currency monetary items.
 
 (b) Exchange differences on long-term foreign currency monetary items
 relating to acquisition of depreciable assets are adjusted to the
 carrying cost of the assets and depreciated over the balance life of
 the assets. In other cases, exchange differences are accumulated in a
 Foreign Currency Monetary Item Translation Difference Account and
 amortised over the balance period of such long-term foreign currency
 monetary item but not beyond 31st March, 2012, by recognition as income
 or expense in each of such periods.
 
 5.4.2 Premium/discount arising at the inception of the forward
 contracts entered into to hedge foreign currency risks are amortised as
 expense/income over the life of the contract. Outstanding forward
 contracts as at the reporting date are restated at the exchange rate
 prevailing on that date.
 
 6.  INVESTMENTS
 
 6.1 Long term investments are valued at cost and provision for
 diminution in value, thereof is made, wherever such diminution is other
 than temporary.  6.2 Current investments are valued at lower of cost or
 fair market value.
 
 7.  INVENTORIES
 
 7.1 Raw Materials
 
 7.1.1 Raw materials including crude oil are valued at cost determined
 on weighted average basis or net realizable value, whichever is lower.
 
 7.1.2 Stock in Process is valued at raw material cost plus conversion
 costs as applicable or net realizable value, whichever is lower.
 
 7.2 Stock-in-Trade
 
 7.2.1 Finished products, other than lubricants, are valued at cost
 determined on ‘First in First Out'' basis or net realizable value,
 whichever is lower. Cost of Finished Products internally produced is
 determined based on raw material cost and processing cost.
 
 7.2.2 Lubricants are valued at cost on weighted average basis or net
 realizable value, whichever is lower. Cost of lubricants internally
 produced is determined based on cost of inputs and processing cost.
 
 7.2.3 Imported products in transit are valued at CIF cost or net
 realisable value whichever is lower.
 
 7.3 Stores and Spares
 
 7.3.1 Stores and Spares (including Barrels and Tins) are valued at
 weighted average cost. Specific provision is made in respect of
 identified obsolete stores & spares and chemicals for likely diminution
 in value. Further, an adhoc provision @ 5% is also made on the balance
 stores and spares (excluding barrels, tins, stores in transit and
 chemicals) towards likely diminution in the value.
 
 7.3.2 Stores & Spares in transit are valued at cost.
 
 8.  DEBTORS
 
 In addition to the specific provision made, an adhoc provision @ 1% is
 also made in respect of debtors other than those relating to Oil
 Marketing Companies, Subsidiary & Joint Venture Companies and Export
 customers to recognize the element of uncertainty.
 
 9.  CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS 
 
 9.1 Contingent Liabilities
 
 9.1.1 Show Cause Notices issued by various Government Authorities are
 not considered as Obligation.
 
 9.1.2 When the demand notices are raised against such show cause
 notices and are disputed by the Company, these are classified as
 disputed obligations.
 
 9.1.3 The treatment in respect of disputed obligations, in each case
 above Rs. 5 lakh, are as under:
 
 a) a provision is recognized in respect of present obligations where
 the outflow of resources is probable;
 
 b) all other cases are disclosed as contingent liabilities unless the
 possibility of outflow of resources is remote.
 
 9.2 Capital Commitments
 
 Estimated amount of contracts remaining to be executed on capital
 account above Rs. 5 lakhs, in each case, are considered for disclosure.
 
 10. REVENUE RECOGNITION
 
 10.1 Revenue from sale of goods is recognised when sufficient risks and
 rewards are transferred to customers, which is generally on dispatch of
 goods.
 
 10.2 Dividend income is recognized when the company''s right to receive
 dividend is established.
 
 10.3 Claims (including interest on outstandings) are accounted:
 
 a) When there is certainty that the claims are realizable
 
 b) Generally at cost
 
 10.4 Income and expenditure upto Rs. 5 lakh in each case pertaining to
 previous years are accounted for in the current year.
 
 10.5 Pre-paid expenses upto Rs. 5 lakh in each case are charged to
 revenue.
 
 11. EXCISE DUTY
 
 Excise duty is accounted on the basis of both, payments made in respect
 of goods cleared as also provision made for goods lying in stock.
 Closing stock value includes excise duty payable / paid on finished
 goods.
 
 12.TAXES ON INCOME
 
 Provision for current tax is made as per the provisions of the Income
 Tax Act, 1961. Deferred Tax Liability / Asset resulting from ''timing
 difference'' between book and taxable profit is accounted for
 considering the tax rate and laws that have been enacted or
 substantively enacted as on the Balance Sheet date.  Deferred Tax Asset
 is recognized and carried forward only to the extent that there is
 virtual certainty that the asset will be realized in future.
 
 13.EMPLOYEES'' BENEFITS
 
 13.1 Short Term Benefits:
 
 Short Term Employee Benefits are accounted for in the period during
 which the services have been rendered.
 
 13.2 Post-Employment Benefits and Other Long Term Employee Benefits :
 
 a) The Company''s contribution to the Provident Fund is remitted to
 separate trusts established for this purpose based on a fixed
 percentage of the eligible employee''s salary and charged to Profit and
 Loss Account. Shortfall, if any, in the fund assets, based on the
 Government specified minimum rate of return, will be made good by the
 Company and charged to Profit and Loss Account.
 
 b) The Company operates defined benefit plans for Gratuity. The cost of
 providing such defined benefits is determined using the projected unit
 credit method of actuarial valuation made at the end of the year and is
 administered through a fund maintained by Insurance Company. Actuarial
 gains/losses are charged to Profit and Loss Account.
 
 c) Obligations on Compensated Absences, Post Retirement Medical
 Benefits, Resettlement and Long Service Awards are provided using the
 projected unit credit method of actuarial valuation made at the end of
 the year.
 
 d) The Company operates a defined contribution scheme for Pension
 benefits for its employees and the contribution is remitted to a
 separate Trust.
 
 13.3 Termination Benefits:
 
 Payments made under Voluntary Retirement Scheme are charged to Profit
 and Loss Account.
 
 14. GRANTS
 
 14.1 Capital Grants
 
 In case of depreciable assets, the cost of the asset is shown at gross
 value and grant thereon is treated as Capital Grants which are
 recognised as income in the Profit and Loss Account over the period and
 in the proportion in which depreciation is charged.
 
 14.2 Revenue Grants
 
 Revenue grants are reckoned as per the respective schemes notified by
 Govt. of India from time to time, subject to final adjustment as per
 separate audit.
 
 15. OIL & GAS EXPLORATION ACTIVITIES
 
 15.1 The Company is following the ‘Successful Efforts Method'' of
 accounting for Oil & Gas exploration and production activities as
 explained below:
 
 a) Survey costs are expensed in the year of incurrence.
 
 b) Acquisition cost, cost of incomplete / undecided exploratory wells
 and development costs are carried as capital work in progress till the
 time these are either transferred to producing properties on completion
 or expensed in the year when determined to be dry, as the case may be.
 
 c) Expenditure towards unfinished Minimum Work Programme with and
 without extension of time is expensed in the year of incurrence.
 
 15.2 Company''s share of proved reserves of oil and gas are disclosed
 when notified by the Operator of the relevant block.
 
 15.3 The Company''s proportionate share in the assets, liabilities,
 income and expenditure of joint venture operations are accounted as per
 the participating interest in such joint venture operations.
 
 16.COMMODITY HEDGING
 
 The realised gain or loss in respect of commodity hedging contracts,
 the pricing period of which has expired during the year, are recognised
 in the Profit & Loss Account. However, in respect of contracts, the
 pricing period of which extends beyond the balance sheet date, suitable
 provision for likely loss, if any, is made.