1.1 Shares held by holding or ultimate holding company or its
 subsidiaries or associates 1,255,354,097 Equity Shares (1,255,354,097
 Equity Shares) are held by ONGC Limited, the holding company.
 
 1.2 No shares are reserved for issue under options and
 contracts/commitments for the sale of shares/disinvestment
 
 Notes
 
 a.  Includes Rs. 261.50 Million (Previous YearRs. 260.87 Million) which has
 not been amortised in view of the fact that eventually the ownership
 will get transferred to the Company on expiry of the lease period, of which
 Rs.11.52 Million (Previous YearRs. 11.52 Million) is in the process
 Being surrendered to Competent Authority. Net Block Rs.11.52 Million
 (Previous YearRs. 11.52 Million).
 
 b.  Includes land value Rs. 29.99 Million (Previous YearRs. 29.99 Million),
 which is in possession of the company towards which formal lease deeds
 are yet to be executed .  Net BlockRs.29.92 Million (Previous Year
 Rs.29.92 Million)
 
 c.  Includes Rs. 782.98 Million (Previous Year Rs. 782.98 Million) being
 Company''s share of an asset jointly owned with another Company. Net
 Block Rs. 120.73 Million (Previous YearRs. 162.07 Million).
 
 d.  Includes Office Equipments
 
 e.  Assets not in use and held for sale is shown at lower of cost or
 estimated realisable value.
 
 f.  Represents consideration for purchase of business (Nitrogen Plant)
 in excess of book value of net assets acquired.
 
 2.01 Effects of changes in Foreign Exchange Rates (AS11)
 
 Pursuant to Notification no. G.S.R.(914)E dated 29th December 2011,
 issued by MCA, from the current financial year, the Company has opted
 to adjust exchange differences arising on reporting of long term
 foreign currency monetary items, in so far as they relate to the
 acquisition of depreciable assets, against the cost of such assets and
 depreciate the said adjustment over the balance life of the asset. Had
 the option not been exercised, the difference amounting to Rs. 26.14
 million on long term foreign currency monetary items relating to
 depreciable assets would have been charged to Profit and Loss Account
 and Capital Work in Progress would have been lesser to that extent.
 
 2.02 Employee Benefits(AS-15)
 
 2.02.01 Brief Description: A general description on the type of
 Defined Benefit Plans are as follows: a Earned Leave Benefit (EL):
 
 Accrual  32 days per year Accumulation up to 300 days allowed
 
 EL accumulated in excess of 15 days is allowed for encashment while in
 service provided the EL encashed is not less than 5 days.  b Sick Leave
 (SL):
 
 Accrual —10 days per year Encashment while in service is not allowed
 Encashment on retirement is permitted and entire accumulation is
 allowed for encashment c Gratuity:
 
 15 days salary for every completed year of service. Vesting period is 5
 years and the payment is restricted to Rs. 1 miilion.
 
 d Long Service Emblem:
 
 On completion of each milestone of service from the date of joining and
 also at the time of retirement, employees will be gifted with Gold
 Coin, weight depends on the milestone of service completed.
 
 e Post Retirement Medical Benefits:
 
 After retirement, on payment of one time lump sum contribution, the
 Superannuated employee and his/her dependent spouse and dependent
 parents will be covered for medical benefit as per the rules of the
 Company.
 
 f Retirement Benefits:
 
 At the time of superannuation, employees are entitled for reimbursement
 of expenses towards travel, transportation of personal effects from
 their place of retirement to the new location upto certain limits
 depending on the designation of the employee at the time of retirement
 and one month''s salary as settling allowance.
 
 2.03 Borrowing Costs(AS-16)
 
 Amount of borrowing costs capitalised during the yearRs. 889.56 million
 (Previous year Nil)
 
 2.04 Segment Reporting(AS17)
 
 The Company is engaged in the business of refining crude oil, all
 activities of the Company revolve around this business and the
 operations are in India. As such there is no other reportable segment
 as defined by the Accounting Standard 17 - Segment Reporting issued
 under The Companies (Accounting Standards ) Rules, 2006. The
 clarification sought for by the Company on the EAC opinion is under
 consideration by ICAI and hence segment reporting is not made.
 
 2.05 Related Party Disclosure (AS-18)
 
 2.05.01 The Company is a state controlled enterprise and the
 transactions with other state controlled enterprises are not required
 to be disclosed as perAS-18.
 
 2.05.02 Key Management Personnel:
 
 (i) Shri. U.K.Basu, Managing Director
 
 (ii) Shri P.P.Upadhya, Director (Technical)
 
 (iii) Shri Vishnu Agrawal, Director (Finance)
 
 2.06 Leases(AS-19)
 
 2.06.01 The company has taken various premises under cancellable
 operating lease.
 
 2.06.02 These lease agreements are normally renewed on expiry of the
 term.
 
 2.06.03 Lease rental expenses for the year ended 31st March, 2012 in
 respect of above operating leases are Rs. 34.75 Million (pre. year
 Rs. 44.22 Million)
 
 2.07 Accounting for taxes on income(AS-22)
 
 2.07.01 The company has commenced commercial refining of crude oil
 from its Phase III refinery during the year and accordingly is entitled
 to the deduction u/s80 IB of the Income TaxAct,1961.
 
 2.07.02 Contingent Liabilities not provided for in respect of:
 
 a Corporate Guarantee given by the Company towards loan of Rs. 3,372.30
 Million sanctioned by certain bankers / financial institutions to New
 Mangalore Port Trust (NMPT) for construction of Jetties. Amount
 outstanding as at the close of the year ended 31st March, 2012, after
 adjusting the repayment made by NMPT is Rs. Nil (Previous Year Rs.Nil).
 
 In respect of all these claims, which are being contested by the
 company as not admissible, it is not practicable to make a realistic
 estimate of the outflow of resource, if any, for settlement of such
 claim pending resolution / award from Arbitrators / Court.
 
 2.07.03 Disputed tax / Duty demands pending in appeal:
 
 a) Income Tax: Rs. 1123.40 Million (Previous YearRs. 373.90 Million).
 (against this Rs. 1000.92 Million is adjusted / paid under protest and is
 included under loans & advances. Note 21)
 
 b) Commercial Tax: Rs. 321.49 Million (Previous Year Rs. 1217.84 Million)
 Rs. includes Rs. 321.49 Million (Previous Year Rs. 524.87 Million) relating
 to projects.
 
 c) Excise Duty: Rs. 488.10 Million (Previous Year Rs. 360.26 Million).
 (against this Rs. 27.01 Million is paid under protest and is included
 under loans & advances Note -20)
 
 d) Customs Duty:Rs.647.54 Million (previous yearRs. 130.19 Million).
 
 2.07.04 a) The estimated amount of contracts remaining to be executed
 on capital account and not provided for (net of advances) Rs.31,185.31
 Million (Previous YearRs. 57,527.76 Million).
 
 b) Other commitments
 
 i) ECB Loan to be availed USD 200 million
 
 ii)ONGC Loan to be availed Rs. 24000 million
 
 iii)Pending commitment on account of Refinery performance improvement
 programme by M\s.Shell Global International Solution
 
 (M\s.Shell GIS) USD 0.50 Million USD
 
 2.8 Foreign Exchange exposures
 
 2.9 Loans and Advances :
 
 Loans and advances (Note 20) include refund claims for Custom Duty on
 project imports Rs. 378.71.Million (Previous yearRs. 378.71Million) and
 Commercial Taxes Rs. 548.48 Million (previous year Rs. 476.34 Million).  A
 further refund due towards Commercial Taxes Rs. 2,884.43 Million is also
 included therein for which there is a matching liability to pay to
 customers on receipt of the refund which is included under other
 current liabilities - liability for statutory payments( Note 10).
 
 2.10.01 The Sales tax deferment loan shown under Unsecured Loans
 (Note-4 ) includes a sum of Rs. 290.17 Million (Previous YearRs. 290.17
 Million) relating to CST on excise duty included under refund from
 Commercial Tax Department ( Note 20) for the years 2000-01and 2001-02,
 which were earlier paid under protest and are now being claimed as
 sales tax deferment loan by the Company.
 
 2.11 The Company is yet to receive response for its confirmation
 letters from some of the trade receivables , Loans and Advances and
 trade payables. Reconciliation and adjustment will be effected on
 receipt of confirmations, which in the opinion of the management will
 not be significant.
 
 2.12 Following expenses are included under other heads of expenses
 Insurance charges amounting to Rs. 20.22 Million (Previous year Rs.17.13
 Million) relating to crude purchase and staff welfare has been charged
 under respective heads.
 
 2.13 Dues to Micro, Small & Medium enterprises:
 
 The classification of the suppliers under Micro, Small and Medium
 Enterprises Development Act, 2006 is made on the basis of information
 made available to the company. The Company has neither paid any
 interest in the terms Section 16 of the above said Act nor any interest
 remain unpaid and no payments were made beyond the ''appointed date''
 to such enterprises during the year ended 31.03.2012. Amount
 outstanding to these enterprises for the year ended 31st March, 2012 is
 Rs.Nil (Previous year: Rs.Nil)
 
 2.14 The financial statements for the year ended March, 31,2011 had
 been prepared as per the then applicable , pre Revised Schedule VI to
 the Companies Act,1956 . Consequent to the notification of Revised
 Schedule VI under the Companies Act,1956, the financial statements for
 the year ended March,31,2012 are prepared as per Revised Schedule VI.
 Accordingly, the previous year''s figures have also been reclassified to
 conform to this year''s classification. The adoption of Revised Schedule
 VI for previous year''s figures does not impact recognition and
 measurement principles followed for preparation of financial statements.
 
 Corporate Governance is based on principles of conducting business with
 all integrity and fairness, being transparent with regard to all
 transactions making all disclosures, complying with laws of land,
 accountability and responsibility towards the shareholders and
 commitment to conduct the business in an ethical manner.
 
 We at MRPL are committed to good governance practices that create
 long-term sustainable value for its stakeholders. Our Corporate
 Governance framework is based on the following principles:
 
 - Ensuring maximum disclosure of information to the Board/Committees
 of the Board for meaningful and focused discussions in meetings;
 
 - Committed to a transparent system and values;
 
 - Operating in a sound system of internal control with a thrust on
 integrity and accountability;
 
 - Ensuring timely and adequate disclosure of all material information
 to all Stakeholders;
 
 - Ensuring compliance of applicable laws, guidelines, rules and
 regulations;
 
 - Committed for equitable and fair treatment to all its stakeholders
 and society at large.