1.2 New accounting standards, interpretations and amendments in existing standards becoming mandatory for accounting periods beginning on or after January 1, 2006 are not considered to have any affect on these condensed interim Financial Statements. IAS-1 Presentation of financial statements-Capital Disclosures becoming mandatory for accounting periods beginning on or after January 1, 2007 may only impact the extent of disclosures presented.

1.3 The accounting polices and methods of computation adopted for the preparation of these condensed interim financial statements are the same as those applied in the preparation of the annual financial statements of the Company for the year ended June 30, 2006.

1.4 The refineries were operating till June 30, 2002 under the 1992 Import Parity Pricing formula whereby the rate of return on paid-up capital was limited to a range of 10% to 40%. The price fixation of products under the above formula was handled by the Government until it was handed over to Oil Companies Advisory Committee with certain amendments from July 1, 2001 up to March 31, 2006. Subsequently under a directive from the Government, prices are now notified by Oil and Gas Regulatory Authority.

The formula was further amended, effective July 1, 2002, for certain refineries including the Company when the capping of 10% to 40% was removed. Under the new tariff protection formula the concerned refineries have been allowed to charge a deemed duty on some of their products enabling them to run their operations on a self-financing basis. After tax profit for a year above 50% of the paid-up capital as at the date of applicability of the tariff protection formula i.e. July 1, 2002, is to be transferred to a “Special Reserve Account” to offset against future losses or to make investments for expansion or upgradation of the respective refineries and is therefore not available for distribution.