1 Accounting Conventions and Basis of Presentation / Accounting
 
 1.1 The financial statements are prepared under the historical cost
 convention, in accordance with the Generally Accepted Accounting
 Principles (GAAP), the provisions of the Companies Act, 1956 and the
 Accounting Standards issued under the Companies (Accounting Standards)
 Rules, 2006
 
 1.2 All income and expenses to the extent considered receivable /
 payable with reasonable certainty are accounted for on accrual basis.
 
 2 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 revenues and expenses during the reporting period. The
 difference between the actual results and estimates are recognised in
 the period in which the results are known / materialised.
 
 3 Cash Flow Statement
 
 Cash Flow Statement has been prepared in accordance with the indirect
 method prescribed in Accounting Standard - 3 issued under the Companies
 (Accounting Standards) Rules, 2006 and as required by the Securities
 and Exchange Board of India.
 
 4 Fixed Assets
 
 4.1 Land is stated at historical cost less amortisation wherever
 applicable.
 
 4.2 Other Fixed assets are stated at historical cost less accumulated
 depreciation/ Amortisation and impairment.
 
 4.3 Spares received along with the Plant or Equipment and those
 purchased subsequently for specific machinery and having irregular use
 are capitalised.
 
 4.4 During the period of construction, directly identifiable expenses
 are capitalised at the first instance and all other allocable expenses
 are capitalised proportionately on the basis of the value of the
 assets.
 
 4.5 Cost for this purpose includes purchase prices, duties (net of
 cenvat), taxes, incidental expenses, erection / commissioning expenses,
 technical knowhow fee, professional fee, interest upto the date the
 asset is put to use and exchange rate differences arising on long term
 foreign currency monetary items in so far as they relate to the
 acquisition of depreciable assets etc.
 
 5 Impairment
 
 Impairment of cash generating units / assets is ascertained and
 considered where the carrying cost exceeds the recoverable amount being
 the higher of net realisable amount and value in use.
 
 6 Depreciation / Amortisation
 
 6.1 Depreciation on Fixed Assets (including those taken on lease) is
 provided on Straight Line Method, at the rates and in the manner
 specified in Schedule XIV to the Companies Act, 1956.
 
 6.2 Cost of leasehold land is amortised over the lease period. Cost of
 leasehold lands where the transfer of ownership to the company on
 expiry of the lease period is eventually certain are not amortised.
 
 6.3 Depreciation on amounts capitalised on account of foreign exchange
 fluctuation is provided prospectively over residual life of the assets.
 
 6.4 Depreciation on spares, having irregular use and purchased
 subsequent to the installation of specific machinery is provided
 prospectively over residual life of the specific machinery and written
 down value of the spare is charged to Profit and Loss Account as and
 when replaced.
 
 7 Intangible Assets:
 
 Cost incurred on intangible asset, resulting in future economic
 benefits are capitalised as intangible assets and amortised on equated
 basis over the estimated useful life of such assets.
 
 8 Investments
 
 8.1 Long term investments are valued at cost. Provision is made for any
 diminution, other than temporary in the accounts.
 
 8.2 Current Investments are valued at lower of cost and fair value.
 
 9 Inventories
 
 Inventories are valued at lower of cost and net realisable value. Cost
 of inventories comprises of purchase cost and other costs incurred in
 bringing inventories to their present location and condition. The cost
 has been determined as under:
 
 9.1 Raw material - on First in First out (FIFO) basis.
 
 9.2 Finished Products - at Raw material ,Conversion cost and excise
 duty.
 
 9.3 Stock-in-Process - at Raw material and Proportionate Conversion
 cost.
 
 9.4 Stores, Spares and other trading Goods - on weighted average cost
 basis
 
 10 Revenue Recognition
 
 10.1 Sales are recognised on transfer of custody to customers and
 includes all statutory levies except Value Added Tax (VAT) and is net
 of discounts.
 
 10.2 Dividend income is recognised when the right to receive the
 dividend is established.
 
 10.3 Interest income is recognised on a time proportion basis
 
 10.4 Revenue from sale of scrap are recognised on transfer of custody
 to customers.
 
 10.5 Revenue in respect of Liquidated Damages from contractors/
 suppliers is recognised when determined as not payable.
 
 10.6 Excise duty recovery from customer is deducted from Turnover
 (gross).  Excise duty differential between closing and opening stock of
 excisable goods is included under other expenses.
 
 11 Claims
 
 11.1 Claims/Surrenders 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, as stipulated.
 
 11.2 Insurance Claims
 
 11.2.1 In case of total loss of asset, on intimation to the insurer,
 either the carrying cost of the asset or insurance value (subject to
 deductible excess) whichever is lower is treated as claims recoverable
 from insurance company. In case insurance claim is less than the
 carrying cost of the asset, the difference is charged to Profit and
 Loss account.
 
 11.2.2 In case of partial or other losses, expenditure incurred /
 payments made to put such assets back into use, to meet the third party
 or other liabilities (Less deductible excess) if any, are accounted for
 as claims receivable from insurance company. Insurance Policy
 Deductible Excess are expensed in the year the corresponding
 expenditure is incurred
 
 11.2.3 As and when claims are finally received from the insurance
 company, the difference, if any, between the claim receivable from
 insurance company and claims received is adjusted to Profit and Loss
 account
 
 11.3 All other claims and provisions are booked on the merits of each
 case.
 
 12 Foreign Currency Transactions
 
 12.1 Foreign Currency Transactions are accounted for at the exchange
 rates prevailing on the date of the transactions.
 
 12.2 The foreign currency assets liabilities of monetary items are
 translated using the exchange rates prevailing on the reporting date.
 
 12.3 The exchange differences on translation of foreign currency
 transactions on the reporting date are recognised as income or expense
 and adjusted to the profit and loss account except exchange differences
 arising on reporting of long term foreign currency monetary items in so
 far as they relate to the acquisition of depreciable capital assets are
 added to /or deducted from cost of the assets.
 
 12.4 The mark to market losses (net) in respect of un-expired forward
 contracts entered into to hedge the risk of changes in foreign currency
 exchange rates on future export sales against the existing contract are
 recognised in the profit and loss account.
 
 13 Employee Benefits
 
 13.1 All short term employee benefits are recognised at their
 undiscounted amount in the accounting period in which they are
 incurred. Employee Benefits under defined contribution plans comprising
 provident fund and superannuation fund are recognised on the
 undiscounted obligations of the company to contribute to the plan. The
 same is paid to Provident Fund Trust authorities and to Life Insurance
 Corporation of India respectively, which are expensed during the year
 
 13.2 Employee benefits under defined benefit plans comprising of
 Gratuity, leave encashment, long service emblem, post retirement
 medical benefits and other long term retirement benefits are recognised
 based on the present value of defined benefit obligation, which is
 computed on the basis of actuarial valuation using the Projected Unit
 Credit Method. Actuarial liability in excess of respective plan assets
 in respect of gratuity is recognised during the year.
 
 13.3 Actuarial gains and losses are recognised in the Profit and Loss
 account as income or expenses.
 
 13.4 Undiscounted amount of short-term liability on account of
 un-availed leave is determined and provided for at the year end.
 
 13.5 Provision for Gratuity as per actuarial valuation is funded with a
 separate trust.
 
 14 Leases
 
 14.1 Lease rentals in respect of finance lease are segregated into cost
 of assets and interest component by applying the implicit rate of
 return.
 
 14.2 Assets acquired on lease where a significant portion of the risks
 and rewards of ownership are retained by the lessor are classified as
 operating leases. Lease rentals are charged to the Profit and Loss
 Account on accrual basis.
 
 15 Borrowing Costs
 
 Borrowing costs that are attributable to acquisition, construction or
 production of qualifying assets, are capitalised as part of the cost of
 such assets. A qualifying asset is an asset that necessarily takes a
 substantial period of time to get ready for intended use. All other
 borrowing costs are charged to the Profit and Loss Account.
 
 16 Research and Development expenditure
 
 Capital expenditure on Research and Development is capitalised under
 the respective fixed assets. Revenue expenditure thereon is charged to
 Profit and Loss account.
 
 17 Taxes on Income
 
 17.1 Current tax is determined on the basis of taxable income computed
 in accordance with the provisions of the Income Tax Act, 1961.
 
 17.2 Deferred tax is recognised on timing differences between taxable
 and accounting income/expenditure that originates in one period and are
 capable of reversal in one or more subsequent period(s). Deferred Tax
 Asset is recognised on the basis of virtual/reasonable certainty about
 its realisability, as applicable.
 
 18 Provisions, Contingent Liabilities and Contingent Assets
 
 Provisions involving substantial degree of estimation in measurement
 are recognised when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources.
 Contingent liabilities, if material, are disclosed by way of notes.
 Contingent Assets are neither recognised nor disclosed in the financial
 statements.