1. The above results have been reviewed and recommended by the Audit & Ethics Committee and approved by the Board of Directors in its meeting held on June 24, 2009.

2. The audited accounts are subject to review by the Comptroller and Auditor General of India under section 619(4) of the Companies Act, 1956.

3. The Board of Directors has recommended a final dividend of Rs. 14 per share which works out to Rs. 2994 Crore over and above the interim dividend of Rs 18 per share amounting to Rs 3850 Crore paid in January, 2009. The total dividend for the year 2008-09 works out to Rs 6844 Crore as against Rs.6,844 Crore during 2007-08.

4. In terms of the decision of Government of India (GoI), the Company has shared under recoveries of Oil Marketing Companies (OMCs) for the year 2008-09 by allowing discount in the prices of Crude Oil, PDS Kerosene and domestic LPG based on provisional rates of discount communicated by Petroleum Planning and Analysis Cell, Ministry of Petroleum & Natural Gas (MoP&NG). The impact on this account is as under:

For the Year ended March 31, 2009:

Sales Revenue - Rs 28225 Crore
Profit before Tax - Rs 23933 Crore
Profit afterTax - 15798 Crore

5. Gross Sales and Purchases for the quarter include Rs. 1,673.44 Crore (previous quarter Rs. 2,187.95 Crore) and Rs. 1,671.21 Crore (previous quarter Rs. 2,187.01 Crore) respectively on account of trading of products of MRPL, a subsidiary of the Company. Similarly, Gross Sales and Purchases for the year include Rs. 8,519.76 Crore (previous year Rs. 6,516.86 Crore) and Rs. 8,516.60 Crore (previous year Rs. 6,511.53 Crore) respectively on account of trading of products of MRPL, a subsidiary of the Company.

6. In respect of a joint venture, the demand towards additional profit petroleum raised by GoI, was disputed by the operator due to differences in perception of PSC provision in respect of computation of Post Tax Rate of Return (PTRR). The JV parties other than ONGC had gone in for arbitration with the GoI on different issues. In its partial award dated October 12, 2004, the arbitral tribunal had issued certain directions favouring operator, which were further challenged by the GoI and the said award has been set aside by the Honorable High Court of Kuala Lampur, Malaysia in January 2009. Although the Company is not a party to the dispute, and the dispute has not been concluded, as an abundant precaution, the Company has made provision of Rs 577.11 Crore on account of additional profit petroleum and Rs. 282.99 Crore for interest thereon.

7. The Company had provided the liability for pay revision, due w.e.f. January 01, 2007, amounting to Rs. 1,050 Crore on estimated basis in 2007-08. During the current year, the Company has reassessed the pay revision liability based on the guidelines issued by Department of Public Enterprises, GoI and excess liability amounting to Rs. 536 Crore upto March 31, 2008 has been reversed. During 2008-09, the Company has provided liability on pay revision amounting to Rs 568 Crore for the current year. Thus, the total liability provided upto March 31, 2009 is Rs 1,082 Crore. The same has been allocated to activities as per the policy of the Company.

8. The Company had not been valuing crude oil in Group Gathering Stations (GGS) and flow lines from GGS to Central Tank Farm (CTF) till 2007-08. During the year, the policy was reviewed and the Company decided to value the crude oil quantity in GGS and in flow lines from GGS to CTF. Due to this change, there is an increase in inventory of crude oil of 40,938 MT as on March 31, 2009. This has resulted in increase in inventory as on March 31, 2009 by Rs. 14.49 Crore with corresponding increase in profit before tax.

9. The Company had changed the rate of depreciation in 2005-06 on all Trunk Pipelines and Onshore Flow lines (assets below ground) from 27.82% to 100% based on technical assessment by the management. The Company has made a reference to the Ministry of Corporate Affairs, GoI in 2006-07 for confirmation of the rate of depreciation. Pending confirmation by the Ministry, the Company continues to charge depreciation at 100% on such assets.

10. Extraordinary items Rs 43.41 Crore (net of tax expenses of Rs 22.36 Crore) is on account of full and final settlement of insurance claim in respect of damage to Hazira Gas Complex by flood during August 2006 after adjustment of net book value of damaged assets.

11. The Consolidated Financial Results have been prepared in line with requirements of Accounting Standard (AS) - 21 ´Consolidated Financial Statements´, AS-23 ´Accounting for Investments in Associates in Consolidated Financial Statements´ and AS-27 ´Financial Reporting on Interests in Joint Ventures´.

12. Previous years figures have been regrouped/reclassified wherever necessary.

D K Sarraf
Director (Finance)