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

2. The above results have been reviewed and recommended by the Audit Committee in its meeting held on May 28, 2009 and approved by the Board of Directors at its meeting held on May 29, 2009.

3. The Board of Directors has recommended dividend of Rs. 7.50 per share.

4. Average Gross Refining Margins during the year was US$ 3.69 per bbl as against US$ 9.02 per bbl during the corresponding previous year. Refining margins during the current year is lower mainly due to fall in the international crude oil prices resulting in inventory losses.

5. In line with the scheme formulated by Petroleum Planning and Analysis Cell (PPAC), the Company has received during the year, discounts of Rs 16756.55 crore (2008: Rs 14322.91 crore) on Crude Oil/Products purchased from ONGC/GAIL/OIL and Rs 1306.56 crore (2008: Nil) from CPCL through sale of HSD to IOC, towards part of the under recovery suffered on sale of MS, HSD, LPG (Domestic) & SKO (PDS). Further, based on the advice received from Government of India, the Company has accounted for Rs. 146.42 crore (2008: Nil) towards discounts receivable from ONGC/OIL for compensating under recoveries on import losses in respect of MS & HSD. These discounts have been adjusted against the purchase cost.

6. An amount of Rs 40383.01 crore has been accounted for during the year (2008: Rs 18997.00 crore) as Grants from Government of India towards ´OMC GOI Special Bonds´. This includes Bonds of Rs 6207.06 crore (2008: Rs.7536.27 crore) accounted for on the basis of advice received from Government of India pending receipt of the same.

7. The Company has received full compensation for the under realization on sale of MS, HSD, SKO(PDS) and LPG (Domestic) during the current year whereas there was a net under realization of Rs 9773.76 crore in the previous year.

8. Pursuant to orders pronounced by the Honourable Supreme Court / various High Courts in the matter of Entry Tax on Crude Oil & Lubricants, and as advised, the Company has not provided for Entry Tax amounting to Rs 2658.48 crore (2008: Rs. 1349.33 crore) including Rs. 1332.66 crore for the year (2008: Rs. 1176.75 crore) in respect of Mathura & Panipat Refineries and Asaoti Lube Blending plant. Pending final disposal of the matter by the Honourable Supreme Court / various High Courts, Entry Tax already paid / deposited / provided for at various units has not been considered for write back.

9. The Company has exercised the option as per AS-11 (notified under the Company’s Accounting Standard Rules, 2008) and has changed its accounting policy for recognition of exchange differences arising on long term foreign currency monetary items, which hitherto were charged to the Profit and Loss Account. This change has resulted in increase in Profit for the year by Rs 782.17 crore.

10. In view of the opinion of the Expert advisory committee of The Institute of Chartered Accountants of India, the accounting policy hitherto followed by the company of charging the Know-how / Licence fee relating to production process to revenue in the year of incurrence has been changed and now the same is accounted for (with retrospective effect from April 01, 2003) as an Intangible Asset. This change has resulted in increase in Profit for the year by Rs 535.08 crore.

11. The Company has provided a sum of Rs 2714 crore (2008: Rs 196.76 crore) during the year on estimated basis towards the pay revision of employees due w.e.f. January 01, 2007, which interalia includes the impact on account of proposed enhancement in the gratuity ceiling from the existing limit of Rs 3.5 lakhs to Rs 10 lakhs as per the guidelines of the Department of Public Enterprises.

12. The Scheme of Amalgamation for merger of Bongaigaon Refinery & Petrochemicals Ltd (BRPL) with Indian Oil Corporation Ltd (Indianoil) has been sanctioned by the Ministry of Corporate Affairs vide its Order dated March 09, 2009 and has become effective from March 25, 2009. The effect of the merger of BRPL with the Company has been given effect to in the financial results for the year 2008-09 as well as in the current quarter January-March 2009. Previous year´s figures do not include the financials of erstwhile BRPL and hence are not comparable to those of the current year to that extent.

13. Pursuant to the Scheme of Amalgamation IndianOil has issued 2,16,01,935 equity shares of Rs 10/- each to the shareholders of erstwhile BRPL in the approved swap ratio of 4 equity shares of Rs 10/- each of IndianOil for every 37 equity shares of Rs 10/- each held in BRPL. Accordingly, 2,16,01,935 equity shares of Rs 10/- each of Indianoil have been accounted under Share Capital Suspense Account’ as on March 31, 2009 as these shares were allotted on May 05, 2009.

14. Figures have been regrouped wherever necessary.

S V Narasimhan
Director (Finance)