2.17. Provisions and Contingent Liabilities

2.17.1. Provisions are recognized when there is a present
obligation as a result of a past event, it is probable
that an outflow of resources embodying economic
benefits will be required to settle the obligation and
a reliable estimate can be made of the amount of
the obligation;

2.17.2. Contingent liabilities are not recognized in the
financial statements but are disclosed unless the
possibility of an outflow of economic resources is
considered remote;

2.17.3. Contingent liabilities and Capital Commitments
disclosed are in respect of items which in each case
are above the threshold limit (*);

2.17.4. Contingent Liabilities are considered only when
show-cause notice is converted into demand.

2.18. Fair value measurement

2.18.1. Fair value is the price that would be received/ paid
to sell an asset or to transfer a liability, as the
case may be, in an orderly transaction between
market participants at the measurement date in the
principal or, in its absence, the most advantageous
market to which the Corporation has access at that
date. The fair value of a liability also reflects its non¬
performance risk;

2.18.2. While measuring the fair value of an asset or liability,
the Corporation uses observable market data as far
as possible. Fair values are categorised into different
levels in a fair value hierarchy based on the inputs
used in the relevant valuation technique.

Financial Instruments

2.19. Financial Assets

2.19.1. Initial recognition and measurement

Purchase and sale of Financial Assets are recognized
based on settlement date accounting.

AH financial assets (not measured subsequently
at fair value through profit or loss) are recognised
initially at fair value plus transaction costs that are
attributable to the acquisition of the financial asset.
However, trade receivables that do not contain a
significant financing component are measured at
transaction price.

2.19.2. Subsequent measurement

Subsequent measurement is determined with
reference to the classification of the respective
financial assets. The Corporation classifies financial
assets (other than equity instruments) as under:

(a) subsequently measured at amortised cost;

(b) fair value through other comprehensive income
(FVOCI); or

(c) fair value through profit or loss (FVTPL)

on the basis of its business model for managing
the financial assets and the contractual cash flow
characteristics of the financial asset.

Amortised cost

A 'debt instrument' is measured at the amortised cost
if both the following conditions are met. The asset is
held within a business model whose objective is:

• To hold assets for collecting contractual cash
flows, and

• Contractual terms of the asset give rise on
specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the
principal amount outstanding.

After initial recognition, such financial assets are
subsequently measured at amortised cost using
the Effective Interest Rate (EIR) method and such
amortization is recognised in the Statement of Profit
and Loss.

Debt instruments at Fair value through profit
and loss (FVTPL)

Fair value through profit and loss is a residual
category for measurement of debt instruments.

After initial measurement, any fair value changes
including any interest income, impairment loss and
other net gains and losses are recognised in the
Statement of Profit and Loss.

Equity investments

All equity investments in scope of Ind-AS 109
(except investments in Subsidiaries, Joint Ventures,
and Associates) are measured at fair value. Equity
instruments which are held for trading are classified
as at FVTPL. For all other equity instruments, the
Corporation decides to classify the same either
as at FVOCI or FVTPL. The Corporation makes such
election on an instrument-by-instrument basis. The
classification is made on initial recognition and
is irrevocable;

For equity instruments classified as FVOCI, all
fair value changes on the instrument, excluding
dividends, are recognized in other comprehensive
income (OCI);

Equity instruments included within the FVTPL
category are measured at fair value, with all fair
value changes being recognized in the Statement of
Profit and Loss.

2.19.3. Impairment of financial assets

In accordance with Ind-AS 109, the Corporation applies
Expected Credit Loss (“ECL”) model for measurement
and recognition of impairment loss on the financial
assets measured at amortised cost;

Loss allowances on trade receivables are measured
following the ‘simplified approach’ at an amount
equal to the lifetime ECL at each reporting date.

2.20. Financial Liabilities

2.20.1. Initial recognition and measurement

All financial liabilities (not measured subsequently
at fair value through profit or loss) are recognised
initially at fair value net of transaction costs
that are directly attributable to the respective
financial liabilities.

2.20.2. Subsequent measurement

The Corporation classifies all financial liabilities as
subsequently measured at amortised cost by using
the Effective Interest Rate Method (“EIR”) and such
amortisation is recognised in the Statement of Profit
and Loss.

2.20.3. Derecognition

A Financial Liability is derecognised when the
obligation under the liability is discharged or
cancelled or expires.

2.21. Financial guarantees

Financial guarantee contracts are recognised initially
at fair value. Subsequently on each reporting date,
the liability is measured at the higher of the amount
of loss allowance determined as per impairment
requirements of Ind AS 109 and the fair value initially
recognised less cumulative amortisation.

2.22. Derivative financial instruments

The Corporation uses derivative financial instruments,
such as forward contracts, interest rate swaps to
mitigate its foreign currency risk, interest risk and
commodity price risk arising out of highly probable
forecast transactions and are presented in Financial
Statements, either as Financial Assets or Financial
liabilities as the case may be.

2.22.1. Derivatives Contracts designated as hedging
instruments

Wherever Hedge Accounting is undertaken, the
derivative financial instruments are recognized at
fair value with due assessment to effectiveness of
the hedge instrument.

By following Cash Flow Hedges, the effective portion
of changes in the fair value is recognized in Other
Comprehensive Income (OCI) and accumulated
under Cash Flow Hedge Reserve within Other Equity,
whereas the ineffective portion, if any, is recognized
immediately in the Statement of Profit and Loss.
The effective portion, previously recognized in OCI
and accumulated as Cash Flow Hedge Reserve is
reclassified to the Statement of Profit and Loss in
the subsequent period, during which, the hedged
expected future cash flows affect profit or loss
and presented in the same line item to which the
underlying is accounted.

Further, in case of previously recognized forecasted
transaction, upon the knowledge of its non¬
occurrence, the effective portion of cumulative gain
or loss is forthwith recognized by transferring from
Cash Flow Hedge Reserve to the Statement of Profit
and Loss.

If the amount accumulated in Cash Flow Hedge
Reserve is a loss and Corporation expects that
all or a portion of that loss will not be recovered
in one or more future period, the Corporation
immediately reclassifies the amount that is not
expected to be recovered into profit or loss as a

reclassification adjustment. The hedge accounting
is discontinued when the hedging instrument expires
or is sold, terminated or no longer qualifies for
hedge accounting.

2.22.2. Derivatives Contracts not designated as
hedging instruments

The derivative financial instruments are accounted at
fair value through Profit or Loss and presented under
Other Income or Other Expenses, as the case may be.

2.23. Offsetting of financial instruments

Financial assets and financial liabilities are offset
and the net amount is reported in the Balance Sheet,
if there is a currently enforceable legal right to offset
the recognised amounts and there is an intention
to settle on a net basis, or to realise the assets and
settle the liabilities simultaneously.

2.24. Taxes on Income

2.24.1. Provision for current tax is made in accordance with
the provisions of the Income Tax Act, 1961;

2.24.2. Deferred tax liability/asset on account of temporary
difference is recognised using tax rates and tax laws
enacted or substantively enacted as at the Balance
Sheet date;

2.24.3. Deferred tax assets are recognised and carried
forward for all deductible temporary differences
only to the extent that it is probable that taxable
profit will be available in future against which the
deductible temporary difference can be utilized;

2.24.4. The carrying amount of deferred tax assets/Liabilities
is reviewed at each Balance Sheet date.

2.25. Earnings per share

2.25.1. Basic earnings per share are calculated by dividing
the net profit or loss for the period attributable to
equity shareholders by the weighted average number
of equity shares outstanding during the period;

2.25.2. For the purpose of calculating diluted earnings per
share, the net profit or loss for the period attributable
to equity shareholders and the weighted average
number of shares outstanding during the period
are adjusted for the effect of all dilutive potential
equity shares.

2.26. Cash and Cash equivalents

Cash and cash equivalents includes cash on hand,
balances with banks, other short-term, highly liquid
investments with original maturities of three months
or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk
of changes in value.

2.27. Cash Flows

Cash flows are reported using the indirect method,
whereby net profit before tax is adjusted for the
effects of transactions of a non-cash nature, any
deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses
associated with investing or financing cash flows. The
cash flows from operating, investing and financing
activities are segregated. For the purpose of the
Statement of Cash Flows, cash and cash equivalent

consist of cash, as defined above, net of outstanding
bank overdrafts as they are considered an integral
part of the Corporation’s cash management.

2.28. Dividend

The Company recognises a liability to make cash
distributions to equity holders of the Corporation
when the distribution is authorised and the
distribution is no longer at the discretion of the
Corporation. As per the corporate laws in India, a
distribution is authorised when it is approved by the
shareholders. A corresponding amount is recognised
directly in other equity.

(*) Threshold limit, referred to above, for various
items is stated as part of Financial Statements.

Notes

1. Includes assets of gross block ? 0.007 Crore (31.03.2025: ? 0.007 Crore) of erstwhile Kosan Gas Company that have not been
handed over to the Corporation. Though Kosan Gas Company was to give up their claim, in view of the tenancy right sought
by third party, the matter is under litigation.

2. Includes Gross Block of ? 1,125.33 Crore (31.03.2025: ? 1,107.39 Crore) towards Land, Building, Plant & Equipment, Furniture
& Fixtures, Transport equipments, Office/lab Equipments, Roads & Culverts, Pipelines, Railway Sidings, etc. representing
Corporation’s share of Assets, jointly owned with other Companies.

3. Includes Gross Block of ? 10.44 Crore (31.03.2025: ? 10.66 Crore) towards Roads & Culverts, Transformers & Transmission lines,
Railway Sidings & Rolling Stock for which though ownership does not vest with the Corporation, operational control over
such assets is exercised. These assets are amortized as per useful life specified in Schedule II of Companies Act, 2013.

5. Assets held for sale consists of items such as plant and equipment, office equipment, transport equipment, buildings,
furnitures & fixtures, roads & culverts and Railway siding which have been identified for disposal due to replacement/
obsolescence of assets which happens in the normal course of business. These assets are expected to be disposed off within
the next twelve months. On account of classification of these assets as ‘Asset held for sale’, a loss of ? 45.12 Crore (2024-25:
? 39.42 Crore) has been recognised in the Statement of Profit and Loss.

6. Includes Right of Use Assets having Gross Block ? 115.63 Crore (31.03.2025: ? 115.63 Crore) for land acquired on lease-cum-sale
basis from Karnataka Industrial Area Development Board (KIADB), that has not been amortized over the period of lease in
view of freehold title that would vest upon fulfilment of certain terms and conditions, as per allotment letter.

7. Includes adjustment to Cost of Assets pursuant to exchange differences arising on long term foreign currency monetary
items, which, in accordance with Para 7AA of Ind AS 21 read with Para D13AA of Ind AS 101, are capitalized and depreciated
over the balance useful life of the assets.

8. The Corporation has considered pipeline assets laid within the boundary limit of its premises as integral part of Tanks / Other
Plant and Machinery and have been depreciating such assets based on the useful life of associated Plant & Equipment, in
line with the Schedule II of the Companies Act, 2013.

9. During the year, the Corporation has capitalised Gas Distribution Systems of ? 568.28 Crore, and depreciation of ? 12.27 Crore
has been charged.

10. Includes an increase in depreciation by ? Nil Crore (2024-25: ? 3.95 Crore) on account of a change in accounting estimate
regarding the residual value of Optical Fiber Cable from 5% to 0%, and an increase in depreciation by ? Nil Crore (2024-25:
? 5.28 Crore) on account of a change in accounting estimate regarding the residual value of Scada, PLC & DCS from 1% to 0%,
implemented during FY 2024-25 based on assessment carried out by the Management.

11. During the year, in respect of LPG consumers who have been inactive for 15 years and the useful life of equipment they are
holding is also over, the equipment value (First Cost: ? 0.36 Crore, 2024-25: ? 1.80 Crore) along with the LPG consumer deposit
(? 3.71 Crore, 2024-25: ? 4.31 Crore) has been de-recognized in the books of account.

12. The process of capitalization in respect of Property, Plant and Equipment including accounting of Capital Work-in-Progress
is under continuous review and updation, wherever required, and is being carried out on a regular basis.

13. In the nature of business carried out by the Corporation, there are certain leasehold immovable properties, which are under
its continuous possession, control and use over the period, the lease agreement of which have expired. Pending renewal of
such leases, these have not been recognised as Right of Use Assets.

14. Title deeds of Immovable Properties not held in name of the Corporation (Other than properties where the Corporation is
the lessee and the lease agreements are duly executed in favour of the Corporation)

Notes

1. Includes Gross Block of ? 91.65 Crore (31.03.2025: ? 91.25 Crore) towards Right of Way representing Corporation’s share of
Assets, jointly owned with other Companies.

2. The Corporation has entered into service concession arrangements with entities that supply electricity (referred to as
"The Regulator”) in order to construct, own, operate, and maintain a wind energy-based electric power generating station
(referred to as the “Plant”). Pursuant to the agreement, the Corporation will operate and maintain the Plant, and will sell the
electricity generated to The Regulator for a period covering the substantial useful life of the Plant, which may be renewed for
a further period upon mutual agreement between the parties. During the concession period, the Corporation is responsible
for providing any maintenance services required. In turn, the Corporation has the right to charge The Regulator an agreed
rate as set forth in the service concession arrangement. The value of the Plant’s construction has been recognized as an
Asset, which is amortized over the useful life of the asset.

6.1: As per the guidelines issued by Department of Public Enterprises (DPE), Ministry of Finance, in February 2010, the Board of
Directors of Maharatna Central Public Sector Enterprises (CPSEs) can invest in joint ventures and wholly owned subsidiaries
subject to an overall ceiling of 30% of the net worth of the CPSE. The Corporation has requested Ministry of Petroleum
& Natural Gas (MOP&NG) to confirm its understanding that for calculating this ceiling limit, the amount of investments
specifically approved by Government of India [viz. investment in HPCL Mittal Energy Limited (HMEL) and HPCL Rajasthan
Refinery Limited (HRRL)] are to be excluded. The Corporation has calculated the limit of 30% investment in joint ventures
and wholly owned subsidiaries, by excluding these investments.

6.2: Petronet India Limited is in the process of voluntary winding up w.e.f. August 30, 2018.

6.3: During the current year, Corporation’s shareholding in Bhagyanagar Gas Limited (BGL) has increased from 47.51% to 47.72%,
consequent to non-subscription to the BGL’s rights issue by shareholders namely, Andhra Pradesh Industrial Infrastructure
Corporation Limited, and Telangana State Industrial Infrastructure Corporation Limited.

6.4: During the current year, the Corporation has invested an amount of ? 267.00 Crore (FY 2024-25: ? 50.00 Crore) in 6% Non¬
convertible Cumulative Redeemable Preference Shares (NCCRPS) of ? 1,00,000 each fully paid up [redeemable on 31^st March
2044 or earlier, at the option of either the issuing entity or the subscriber, depending upon funds availability], issued by
wholly-owned-subsidiary HPCL LNG Limited to meet it’s fund requirement.

Based on the characteristics of contractual cash flows, investment has been recognised at ‘Fair Value Through Profit or Loss
(FVTPL)’, and, accordingly, the initial recognition of investment is being carried out by measuring the present value of future
cash flows (i.e. management’s current internal estimates towards receipt of dividend on periodical basis and realisations

7.1: The Corporation intends to hold this Investment for long term strategic purposes, and accordingly, designated it at fair value
through Other Comprehensive Income. There was no disposal of this strategic investment during the financial year.

7.2: (a) The Corporation’s investment into ‘Voltrez Tech Private Limited’, has been sold-out during the year for an amount of
? 1.86 Crore (initial cost: ? 0.80 Crore), resulting into a gain of ? 1.06 Crore, including realised gain of ? 0.11 Crore for
FY 2025-26.

(b) In case of start-ups where deals/funding have taken place subsequent to our investments, fair valuation have been
carried-out basis such deals/funding, and in cases where the start-up lack sufficient financial/operational traction, the
fair valuation has been determined factoring-in available information. This has resulted into gain/(loss) of ? (5.59) Crore
(2024-25: ? 2.03 Crore). In rest of the cases, considering that the start-ups are mostly in traction and refinement stages,
the carrying value of such start-ups is considered as a reasonable approximation of their fair value.

11.1. The write-down, if any, of Inventories to net realisable value, amounted to ? 2,322.68 Crore (31.03.2025: ? 586.71 Crore, reversed
during the current year). The write downs and reversal are included in cost of materials consumed, changes in Inventories
of finished goods, stock-in-trade and work-in-progress.

11.2. Inventories of the Corporation are hypothecated in favour of banks on pari passu basis as a security for availment of Cash
Credit facility.

11.3. Corporation had received 54.6 TMT of Crude Oil (during October 2025) from the B-80 Mumbai Offshore oilfield of Hindustan
Oil Exploration Company Limited, for processing at its Mumbai Refinery. The crude had high salt and chloride content, which
contaminated some quantity of existing crude due to commingling, and also generated off-spec products. Raw materials
include 94.4 TMT of this commingled Crude.

The impact of the above has been appropriately assessed and accounted.

F. Rights and Restrictions on Equity / Preference Shares

The Corporation has only one class of Equity Shares having a face value of ? 10/- per share which are issued and subscribed.
Each Shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of the
winding up, the holders of equity shares will be entitled to receive the remaining assets in proportion to the number of
equity shares held by the shareholders and the amount paid up thereon.

The Corporation also has 75,000 6% cumulative Redeemable Non-convertible Preference Shares of ? 100/- each as a part
of the Authorised Capital, which were issued earlier by the erstwhile ESSO Standard Refining Co. of India Limited (ESRC).
Presently the said Preference Shares stand redeemed.

H. In the period of five years immediately preceding 31^st March, 2026

(i) number and class of shares allotted as fully paid up pursuant to contract without payment being received in
cash: Nil

(ii) aggregate number and class of shares allotted as fully paid up by way of bonus shares: The Board, at its meeting
held on May 09, 2024 had recommended the issuance of bonus equity shares in the ratio of one equity share of T 10/-
each for every two equity shares of T 10/- each held, and it was approved by the members of the Corporation through
postal ballot on June 11, 2024. Pursuant to this, the Corporation issued 70,92,74,172/- Equity Shares as bonus shares
during the FY 2024-25.

(iii) aggregate number and class of shares bought back: The Board, at its meeting held on November 04, 2020 approved the
buyback of fully paid-up equity shares of the face value of T 10/- from the open market through stock exchange mechanism
for an aggregate amount not exceeding T 2,500 Crore ("Maximum Buyback Size”) and at a price not exceeding T 250 per
Equity Share, payable in cash. The shares buy-back program, which commenced on November 17, 2020 had concluded on
May 14, 2021. During the buy-back period, a total of 10,52,74,280/- shares, representing 6.91% of paid up Share Capital (prior
to commencement of buy-back) having a face value of T 105,27,42,800/- were bought back and extinguished.

24.1: a. Includes ? 69.51 Crore (31.03.2025: ? 37.37 Crore) towards non-current portion of unamortised Capital Grant, out of total
Grant of ? 75.00 Crore received from GOI (an amount of ? 37.50 Crore has been received during the year), on completion
of relevant milestone against approved financial assistance for viability gap funding (VGF) of ? 150.00 Crore for setting
up commercial scale 2G Ethanol refinery at Bhatinda, Punjab under PM-JIVAN Yojna. Of the total unamortised capital
grant, ? 3.59 Crore (31.03.2025: ? 0.13 Crore) towards current portion is included in Note 28. The capital grant has been
secured with first charge on the facilities of 2G ethanol refinery project. Subsequent instalments of the assistance
would be received upon compliance with stipulated conditions, and amongst others are subjected to the availability of
funds with granting authority, and thus, would be recognised accordingly.

b. Includes ? 170.59 Crore (31.03.2025: ? 129.30 Crore) towards non-current portion of unamortised Capital Grant, out of
total Grant of ? 199.33 Crore received (an amount of ? 59.80 Crore has been received during the year) towards FAME
India scheme phase II for installation and commissioning of EV charging stations across India. Of the total unamortised
Capital Grant, ? 21.74 Crore (31.03.2025: ? 9.93 Crore) towards current portion is included in Note 28.

c. Includes non-current unamortised portion of ? 128.97 Crore (31.03.2025: ? 131.99 Crore) towards the impact of duty
deferment under Manufacturing and Other Operations in Warehouse Regulations, 2019 scheme, which is treated as
Capital Grant from GOI in accordance with Ind AS-20 "Accounting for Government Grants and Disclosure of Government
Assistance”. Of the total unamortised Capital Grant, ? 9.72 Crore (31.03.2025: ? 4.86 Crore) towards current portion is
included in Note 28.

d. Includes ? 36.12 Crore (31.03.2025: ? Nil Crore) towards non-current portion of unamortised Capital Grant, out of total
Grant of ? 36.40 Crore receivable under PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE)
scheme for installation of EV Public Charging Stations (EV PCS) across India. Of the total unamortised Capital Grant,
? 0.28 Crore (31.03.2025: ? Nil Crore) towards current portion is included in Note 28. Corporation is reasonably assured of
compliance with the stipulated conditions, and thus, entire grant has been recognised as receivable as of 31^st March 2026.

e. Includes ? 14.46 Crore (31.03.2025: ? Nil Crore) towards non-current portion of unamortised Capital Grant, out of total
approved Grant of ? 14.70 Crore under Viability Gap Funding (VGF) for the "Pilot Project for Use of Green Hydrogen in
Transport Sector” from The Automotive Research Association of India (ARAI), against which the first tranche of ? 2.94
Crore has been received during the year. Of the total unamortised Capital Grant, ? 0.25 Crore (31.03.2025: ? Nil Crore)
towards current portion is included in Note 28. Corporation is reasonably assured of compliance with the stipulated
conditions, and thus, balance grant has also been recognised as receivable as of 31^st March 2026.

f. Includes ? 0.40 Crore (31.03.2025: ? Nil Crore) towards non-current portion of unamortised Capital Grant, out of
total approved Grant of ? 0.44 Crore received from Centre of High Technology (CHT) towards financial assistance for
procurement of Biomass Aggregation Machinery (BAM). Of the total unamortised Capital Grant, ? 0.04 Crore (31.03.2025:
? Nil Crore) towards current portion is included in Note 28.

40.A. Risk management framework

The Corporation has established an Enterprise Risk Management (ERM) framework under the Corporation’s Enterprise
Risk Management Charter and Policy, which is embedded at the forefront of business strategies and focuses on the
stronger, deeper and trust-based relationship with the stakeholders. This framework provides necessary support to the
business to navigate through the evolving risk landscape through dynamic risk management approach that embraces
disruption and enhances resiliency and builds trust.

The Corporation is regularly reviewing the identified and emerging risks and taking appropriate risk mitigation measures.

The Risk Management Committee (RMC), receives regular insights on risk exposures faced by the Corporation, thereby
enabling it to provide inputs on prompt actions to be taken as well as monitor the actions taken. The Board is also
updated regularly on the risk assessment and mitigation procedures.

Technology has been enabled to support the ERM processes with a focus on optimizing risk exposures and automation
of risk reporting across the organization.

40.B. Corporation has identified financial risk and categorised them in three parts Viz. (i) Credit Risk, (ii)
Liquidity Risk & (iii) Market Risk. Details regarding sources of risk in each such category and how
Corporation manages the risk is explained in following notes
40.B.1 - Credit risk

Credit risk is the risk of financial loss to the Corporation if a customer or counterparty to a financial instrument fails to
meet their contractual obligations. The risk arises principally from the Corporation’s Receivables from Customers and so
also from Investment Securities. The risk is managed through credit approval, establishing credit limits and continuous
monitoring of the creditworthiness of Customers to whom the Corporation extends credit terms in the normal course
of business.

The maximum exposure to credit risk in case of all the financial instruments covered below is restricted to their
respective carrying amount.

Note: Refer Note 61 regarding loans given to consumers under Pradhan Mantri Ujjwala Yojna (PMUY).

Trade receivables

The Corporation’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.

The Corporation assesses impairment of Trade Receivable/Other Receivables both individually and/or grouping large
numbers of Customers, homogenously and recognizes a loss allowance towards doubtful debts by estimating its
expected losses. In this regard, an allowance matrix is used to measure the expected credit losses on trade receivables
that are considered good. The following table provides information about the exposure to credit risk and loss allowance
(including expected credit loss provision) on such trade receivables:

The amounts written off relates to customers who have defaulted payments and are not expected to pay their outstanding
balances, mainly due to economic circumstances.

Cash and Cash Equivalents

The Corporation held cash and cash equivalents of ? 57.61 Crore as on 31.03.2026 (31.03.2025: ? 80.13 Crore). The cash and
cash equivalents (other than cash on hand) are held with scheduled banks. The Corporation invests its surplus funds for
short duration in fixed deposit with banks, Government of India T-bills, Tri Party Repo System (TREPS), Clearcorp Repo
Order Matching System (CROMS) and debt schemes of Mutual Funds, all of which carry no mark to market risks as the
Corporation is exposed only to low credit risk.

Derivatives

The forex and interest rate derivatives are entered into with banks having an investment grade rating. Commodity
derivatives are entered with reputed Counterparties in the OTC (Over-the-Counter) Market. The exposure to counter¬
parties are closely monitored and kept within the approved limits.

Investment in Debt Securities

Investment are made in government securities or bonds which do not carry any credit risk, being sovereign in nature.
40.B.2. Liquidity risk

Liquidity risk is the risk that the Corporation will not be able to meet its financial obligations as they become due.
Corporation has a strong focus on effective management of its liquidity to ensure that all business and financial
commitments are met on time. The Corporation has adequate borrowing limits in place duly approved by its Shareholders
and Board. Corporation’s sources of liquidity includes operating cash flows, cash and cash equivalents, fund and
non-fund based credit lines from banks and liquid investment portfolio. Corporation ensures that there is minimal
concentration risk by diversifying its portfolio across instruments and counterparties. Cash and fund flow management
is monitored daily in order to have smooth and continuous business operations.

(i) Financing arrangements

The Corporation has adequate fund and non-fund based lines from various banks. The Corporation has sufficient
borrowing limits in place duly approved by its Shareholders and Board. Domestic and international credit rating
from reputed credit rating agencies enables access of funds both from domestic as well as international market.
Corporation’s diversified source of funds and cash flow enables it to maintain requisite capital structure discipline.
Corporation diversifies its capital structure with a mix of instruments and financing products across varying maturities
and currencies. The financing products include syndicated loans, foreign currency bonds, bank term loans, TREPS loan,
CROMS loan, commercial paper, non-convertible debentures, buyer’s credit loan, clean loan etc. Corporation taps
domestic as well as foreign debt markets from time to time to ensure appropriate funding mix and diversification across

The Corporation has long-term foreign currency syndicated loans with floating rate of interest, which exposes the
Corporation to cash flow interest rate risk. The borrowings at floating rate are denominated in USD. The Corporation
manages its cash flow interest rate risk by using floating-to-fixed interest rate swaps. Under this, the Corporation agrees
with other Parties to exchange at specified intervals (i.e. quarterly), the difference between fixed contract rates and
floating rate interest amounts calculated by referring to the agreed notional principal amounts. The Corporation monitors
the interest rate movement and manages the interest rate risk, based on the Corporation's Forex Risk Management
Policy. The Corporation also has a Forex Risk Management Cell (FRMC) that actively reviews the forex and interest rate
exposures. The Corporation does not use derivative financial instruments for trading or speculative purposes.

The Corporation’s borrowings which are contracted at fixed rate are carried at amortised cost. These are not affected
due to interest rate risk as defined in Ind AS 107 as neither the carrying amount nor the future cash flows will fluctuate
in the event of a change in market interest rates.

Interest rate risk exposure

The Corporation’s interest rate risk arises mainly from borrowings. The profile of the Corporation’s interest-bearing
financial instruments at period end is as follows:

Cash flow sensitivity analysis for variable-rate instruments

A reasonably possible change of 25 basis points in interest rates at Reporting Date would have impacted profit or loss
[increased / (decreased)] by the amounts shown below. The indicative 25 basis point (0.25%) movement is directional
and does not reflect management forecast on interest rate movement. This analysis assumes that all other variables,
in particular, foreign currency exchange rate remaining constant.

The Corporation’s Profitability is exposed to the risk of fluctuation in prices of Crude Oil and Petroleum products in
international markets. The Corporation monitors and reduces the impact of the volatility in International Oil prices based
on approved Oil Price Risk Management Policy by entering into derivative contracts in the OTC market. The Corporation
also has Oil Price Risk Management Committee (OPRMC) which actively reviews and monitors risk management principles,
policies and risk management activities.

Category-wise quantitative break-up of Commodity derivative contracts entered into by the Corporation which are
Outstanding as at Balance Sheet date is given below:

40.B.3.5 Derivatives & Hedging

The Corporation enters into derivative contracts for hedging purpose, to mitigate the commodity price risk on Highly probable
forecast transactions and Currency Risk. The Corporation has applied Hedge Accounting on commodity derivative transactions
and foreign exchange forward derivatives as per Ind AS 109 (Financial Instruments). Consequent to this a Mark to Market
Debit / (Credit) amounting to ? 41.00 Crore [2024-25: ? (95.48) Crore] towards commodity derivative transactions, has been
accounted in Other Comprehensive Income which will be recycled to Statement of Profit and Loss in subsequent period on
settlement of respective contracts.

All these hedges are accounted for as Cash Flow Hedges.

Hedge Effectiveness

The Corporation has established a hedge ratio of 1:1 for the hedging relationship as the underlying risk of the commodity
derivative contracts are identical to the hedged risk component. Hedge item and the hedging instruments have economic
relationship as the terms of the commodity derivative contracts match with the terms of hedge items. Considering the
economic relationship and characteristics of the hedging instrument being aligned to the hedged item, the fair value changes
in the hedging instrument reasonably approximates the fair value changes in the hedged Item (in absolute amounts).

Source of Hedge Ineffectiveness

The Corporation has identified the following sources of hedge ineffectiveness w.r.t commodity derivative contracts which
are not expected to be material as at date:

a. Counterparty Credit Risk impacting the fair value of the hedge instrument and hedge item.

b. Difference in the timing of the cash flows of the hedged items and the hedge instruments.

c. Different indexes used to hedge risk of the hedged item.

d. Changes to forecasted amounts of cash flows of hedged items and hedging instruments.

In case of foreign currency risk, the main source of hedge ineffectiveness is the effect of the counterparty and the Corporation’s
own credit risk on the fair value of the hedge contracts, which is not reflected in the fair value of the hedged items. The
effect of this is not expected to be material.

Disclosures of effects of Cash Flow Hedge Accounting

The Corporation has applied Hedge Accounting prospectively for the highly probable forecast transactions and foreign exchange
forwards as stated above. Consequently, disclosure is made only for the transactions designated for Hedge Accounting.

(e) Short or (excess) provision for tax of earlier years: Excess provision reversed during the year ended 31.03.2026 for (? 14.27
Crore) [2024-25: (? 104.16 Crore)], includes reversal of provision and interest (if any), towards current tax of (? 26.10 Crore)
[2024-25: (? 249.07 Crore)] and additional provision towards deferred tax of ? 11.83 Crore [2024-25: ? 144.91 Crore] with respect
to updated tax position on account of income tax orders.

(f) As of 31^st March 2026, Pillar Two legislation has not been enacted or substantively enacted in India, and accordingly, there
is no current tax impact for the current year. Furthermore, the Corporation has applied the mandatory temporary exception
under Ind AS 12 ‘Income Taxes’ and, thus, has not recognized or disclosed any deferred tax assets or liabilities related to
Pillar Two Income Taxes.

The Corporation with a Participating Interest (PI) of 60% along with Prize Petroleum Company Limited (PPCL), having a PI of
10% and M3nergy Sdn. Bhd (M/s M3nergy) having a PI of 30% were awarded service contract in March, 2006 for development
of ONGC’s offshore marginal oilfields of cluster-7. PPCL was the executing contractor. Parties provided necessary Bank
Guarantees to ONGC. Since M/s M3nergy could not meet their contractual obligations, the contract was terminated by
ONGC and Bank guarantees were forfeited. HPCL and PPCL demanded the refund of monies forfeited towards encashment
of Bank Guarantee along with other claims from M/s M3nergy. A counter claim of USD 36.51 Million was made by M3nergy
on termination of such service contract. The matter was referred to Arbitration.

The Arbitral Tribunal passed 3 Awards (09.01.2014, 27.09.2017, 15.06.2018 respectively), all were in favour of the Corporation
and PPCL. These Orders were to the effect that M3nergy had committed breach of the contract and hence their counter
claims were disallowed and that the Corporation and PPCL are entitled for damages with interest and costs of arbitration to
be borne by M3nergy. All the 3 Awards were challenged by M/s M3nergy before the Bombay High Court. However, there was
no stay granted by Bombay High Court, hence, HPCL/PPCL filed applications for (a) Mareva Injunction and (b) Enforcement
of the Award before the Courts in Malaysia since M/s M3nergy is located in Malaysia.

By Orders dated 10.01.2019 the Hon’ble Bombay High Court set aside all three Arbitration Awards. As the Awards were set
aside (on the basis of which the enforcement application was filed by HPCL), on 28.02.2019 the Malaysian High Court at Kuala
Lumpur allowed the application of M/s M3nergy to set aside the enforcement order with liberty to file fresh proceedings,
if HPCL/ PPCL succeed later. Meanwhile, HPCL and PPCL have filed Appeals against the setting aside order (of Single Judge
Bombay High Court) before the Division Bench of the Bombay High Court. After hearing arguments of parties, on 16.10.2019,

the Hon’ble Bombay High Court set aside the Single Judge’s Order and remanded all the 3 matters back to the Single Judge
of the High Court, to decide the matter afresh on merits. This Order was challenged by M/s M3nergy before the Supreme
Court by filing Special Leave Petition (SLP) which, after brief arguments, was dismissed as withdrawn (by M/s M3nergy) on
31.01.2020. In the matter pertaining to Award dated 09.01.2014 (Partial Award 1), Hon’ble Bombay High Court passed a judgment
on 03.11.2025, vide which the Partial Award 1, was upheld in favour of HPCL and PPCL. M3nergy has filed an appeal against
the said judgement before the Division Bench of Hon’ble Bombay High Court and same is pending for hearing. The other 2
matters (Partial Award 2 and Final Award) are being heard by Single Judge of Hon’ble Bombay High Court. The Corporation
has also filed for execution of the Arbitral Awards before the High Court in Malaysia and same is pending for hearing.

As a result, the Corporation’s share of the awarded amount which is approximately ? 420.74 Crore towards loss of profit /
damages /costs and interest thereon has not been recognized on a conservative basis. Further, the claim raised by M/s
M3nergy to the extent of Corporation’s share i.e. approximately ? 296.80 Crore @ Exchange rate of 1 USD = ? 94.84 (31.03.2025:
? 267.50 Crore @ Exchange rate of 1 USD = ? 85.48), being considered remote is also not recognized.

53.2: Corporation has entered into a long term product off take agreement with M/s HPCL- Mittal Energy Limited (HMEL), its joint
venture company, for purchase of petroleum products produced by the refinery. This agreement has a take or pay clause and
the Corporation is committed to purchase the said petroleum products over the tenure of the agreement.

53.3: In respect of certain Joint Venture/Associate Companies, the Corporation and other joint venture partners have committed
among others, that they would jointly hold at least 51% of share capital of such Joint Venture/Associate till the repayment
of certain bank loans/bonds for which letters of comfort are issued in certain cases. Expected future outflow of resources
emanating out of approved plans on investment in Subsidiaries/Joint Ventures/Associates are not part of commitments,
unless investment calls are made as at period end.

53.4: Ministry of Environment, Forest and Climate Change (MoEFCC), Gol, had stipulated vide letter dated 31/01/2017 that at least
2.5% of the total cost of Mumbai Refinery Expansion Project (MREP) shall be earmarked towards Enterprise Social Commitment
(ESR) based on Public Hearing issues, which works out to ? 134.5 Crore. Corporation has undertaken various activities in
line with the discussions held during the Public Hearing / meetings of Expert Appraisal Committee (EAC) of MoEFCC, and
an aggregate amount of ? 4.51 Crore incurred on such activities has been duly accounted for in the books of account as on
31/03/2026.

53.5: The Corporation has been authorised to develop City Gas Distribution (CGD) infrastructure across 14 Geographical Areas
with stipulated Minimum Work Programme (MWP) targets. The Corporation is yet to achieve the Minimum Work Programme
(MWP) targets, in certain Geographical Areas due to external, regulatory, and market-related factors. Continuous efforts are
being made to achieve the targets.

Impairment assessment as per the requirements of Ind AS 36 ‘Impairment of Assets’ has been carried out at period
end for all Cash-Generating Units (CGUs) by comparing their value-in-use/fair value of assets, with the carrying value
of assets under respective CGUs. of these:

a) Corporation has a 2G Bio-Ethanol Plant at Bhatinda (Punjab), which has been designed to produce fuel-grade
ethanol from rice straw biomass (stubble/Parali), and has been identified as a ‘Cash-Generating Unit’ (CGU).
Management estimates the technological challenges along with the expectation that the current production
and operating costs of the plant would be higher than the anticipated realisation from sale of the production.
Accordingly, based on the fair value assessment, the net recoverable amount of the plant has been estimated
to be ? 820.27 Crore.

In line with Ind AS-36, an impairment loss of ? 358.09 Crore [? 221.57 Crore towards Property, Plant and Equipment
(refer Note 3), ? 136.52 Crore towards Capital Work in Progress (refer Note 4)] has been determined and charged
to Statement of Profit and Loss during the year. Further, Corporation has also received a grant of ? 75.00 Crore
towards setting up this plant, which has been excluded proportionately while arriving at the impairment amount.

b) Corporation has Compressed Bio-Gas (CBG) Plant at Badaun (Uttar Pradesh), having a rated capacity of 14.25
MT per day for generation of Bio-Gas and has been identified as a ‘Cash-Generating Unit’ (CGU). Management
estimates that the constraints related to raw materials, demand of the product etc., would adversely impact
the capacity utilisation, projected cash flows and profitability of the plant.

In line with IndAS-36, an impairment loss of ? 58.00 Crore [? 57.05 Crore towards Property, Plant and Equipment
(refer Note 3), and balance towards Capital Work in Progress (refer Note 4)] has been recognized in the Statement
of Profit and Loss during the year.

Above impairment assessment has been carried out in line with the requirement of Ind AS 36, and in the opinion
of the Management, the current level of impairment is appropriate.

On the reporting date, the Corporation has an equity investment of ? 1,119.64 Crore (31.03.2025: ? 1,095.64 Crore) in
its wholly owned subsidiary, HPCL Biofuels Limited (HBL). HBL is engaged in the business of manufacturing ethanol
and sugar from crushing of sugarcane, and is also undertaking a project related to grain-based ethanol production.
Considering the continuous incurrence of losses and the projected financial performance of the plant(s), and based
on impairment assessment, an amount of ? 182.00 Crore (FY 2024-25: ? Nil Crore) has been provided during the current
financial year, taking the aggregate impairment as of 31.03.2026 to ? 754.16 Crore (31.03.2025: ? 572.16 Crore). The said
impairment assessment has been carried out in line with the requirement of Ind AS 36, and in the opinion of the
Management, the current level of impairment is appropriate.

The Corporation has an equity investment of ? 268.27 Crore (31.03.2025: ? 268.27 Crore) in its wholly owned subsidiary,
Prize Petroleum Company Limited. The investment has been fully impaired as of 31.03.2025 (including an impairment
of ? 17 Crore during FY 2024-25), resulting into carrying value of the investment at ? Nil Crore. In the opinion of the
Management, the current level of impairment is appropriate.

(a) The Corporation has an equity investment of ? 66.77 Crore in its Associate, GSPL India Transco Limited, which is
engaged in the business of Natural Gas transmission in India. Considering the projected financial performance
of its assets, and based on the impairment assessment carried out, an amount of ? 39.88 Crore (FY 2024-25: ? Nil
Crore) has been provided during the current financial year, taking the aggregate impairment as of 31.03.2026 to
? 53.88 Crore (31.03.2025: ? 14.00 Crore). The said impairment assessment has been carried out in line with the
requirement of Ind AS 36, and in the opinion of the Management, the current level of impairment is appropriate.

(b) The Corporation has an equity investment of ? 50.00 Crore in its Joint Venture, Ratnagiri Refinery and Petrochemicals
Limited, which was incorporated in the year 2017 to set-up a refinery and petrochemical complex along the west
coast of India in the State of Maharashtra. Considering the current state of the project development \ progress,
an impairment assessment was carried-out as required by Ind AS 36. Basis available information including its
Financial Statements, an amount of ? 25.20 Crore (FY 2024-25: ? Nil Crore) has been provided during the current
financial year, taking the aggregate impairment as of 31.03.2026 to ? 25.20 Crore (31.03.2025: ? Nil Crore). In the
opinion of the Management, the current level of impairment is appropriate.

Prize Petroleum Company Ltd. (PPCL), a wholly-owned subsidiary, is the upstream arm of the Corporation in the
business of Exploration & Production (E&P) of hydrocarbons and management of E&P blocks. PPCL has a wholly-
owned subsidiary, Prize Petroleum International Pte Ltd. (PPIPL), which was incorporated in Singapore, as a part of
Corporation’s upstream strategy to have a balanced portfolio of E&P assets to serve the relatable business interest
of the Corporation and commercial expediency. Towards this, a loan of US $86 Million was availed by PPIPL during
the financial year 2016-17, for which a Corporate Guarantee (CG) was provided by the Corporation. The carrying value
of the obligation towards the said CG (on loan outstanding of US $79 Million) was re-measured under the provisions
of Ind AS 109 and was completely provided for by FY 2023-24.

The said loan outstanding was due for repayment during the FY 2023-24. In view of inability of PPIPL/PPCL to discharge
its obligations, the same was directly settled by the Corporation pursuant to CG given, by making payment of ? 678.63
Crore [which included interest due on maturity] to the lenders/agent, during FY 2023-24. Consequently, the carrying
value of obligation was reversed, and equivalent receivable of ? 678.63 Crore from PPIPL was recognised, as well as
provided for during that year. During the current year, both receivable of ? 678.63 Crore as well as the equivalent
provision against the said receivables (aggregating to ? Nil Crore) has been written-off/back, and included in Note
38 ‘Other Expenses’.

During April 2024, a tripartite Sale and Purchase Agreement (SPA) was entered into amongst PPIPL (Seller), Beach
Energy (Operations) Limited (Buyer), and the Corporation (Seller Guarantor) to divest Seller’s Participating Interest in
E&P Assets located in Australia w.e.f. 1^st July 2023, with inter-period adjustments. Under the SPA, a total consideration
of AUD 16.6 Million, plus applicable taxes, was payable to the Buyer. This comprised of an upfront payment of AUD

11.3 Million, which had been discharged [net of Inter-period adjustments, applicable taxes etc.] during the FY 2024-25,
and also the titles related to E&P assets, had been transferred to the Buyer. The balance deferred payment of AUD

5.3 Million (~? 34.50 Crore, excluding applicable taxes) is contingent upon certain decisions to be taken by the Buyer
in future, and is duly guaranteed by the Corporation towards Seller’s performance under the SPA. Further, to facilitate
the discharge of obligations by PPIPL, Corporation had infused equity share capital of ? 17.00 Crore into PPCL during
the FY 2024-25, and had provided for the impairment loss for the same during that year, in accordance with IndAS 36.

The Pradhan Mantri Ujjwala Yojana (PMUY) was launched in 2016 to provide LPG connections to women from below-
poverty-line (BPL) households. The beneficiary is given an option to avail loan from the respective OMCs to meet the
cost of the stove and first fill. This loan is to be recovered from the subsidy payable to the consumer on purchase of
the refill cylinder. The loan has been provided to 1.76 Crore PMUY consumers for an amount aggregating to ? 2,960.24
Crore (31.03.2025: ? 2,960.24 Crore), and of this, ? 1,196.66 Crore (31.03.2025: ? 1,302.19 Crore) is outstanding at period
end. The Loan is classified as ‘subsequently measured at amortized cost’ in the financial statements. The carrying
value of loan outstanding as at Balance Sheet date is re-measured based on revised estimates of future cash flows.
Such re-measurement has resulted in change in gross carrying amount of outstanding loan, net of interest unwinding,
by ? -77.69 Crore (FY 2024-25: ? -59.11 Crore) during the year. Considering the cumulative re-measurement loss, net
of interest unwinding, amounting to ? 239.86 Crore (31.03.2025: ? 317.55 Crore) and accounting of Deferred Expense
amounting to ? 528.29 Crore (net balance after amortisation as of 31.03.2026 is ? 206.13 Crore), the outstanding loan at
period end is carried in the books at ? 428.52 Crore (31.03.2025: ? 456.36 Crore). Further, considering the consumption
pattern of refills, level of subsidies and consequential impact on repayment of the loan, by following the principles
of prudence and conservatism, a cumulative provision of ? 408.40 Crore (31.03.2025: ? 238.19 Crore) net of reversal,
if any, is estimated and recognized in books. The addition of provision during the year amounted to ? 170.21 Crore
(FY 2024-25: reversal of ? 87.88 Crore) that arose primarily due to active customers turning inactive. The expected
credit loss estimate is reasonable.

The Corporation implements various schemes of Government of India, such as PMUY, Direct Benefit Transfer scheme,
wherein the amount is either received in advance or reimbursed subsequently. As of 31.03.2026, reimbursements
amounting to ? 60.65 Crore (31.03.2025: ? 38.10 Crore) are pending for a period beyond 6 months for which provision
of ? 5.73 Crore (31.03.2025: ? Nil Crore) is carried out in the books.

During the current year, the Company did not have the required number of Independent Directors on its Board, as
stipulated in Regulation 17(1)(b) of SEBI LODR 2015. On the date of approval of financial statements for the year ended
31^st March 2026, Company’s Board includes one Independent Director (31.03.2026: two Independent Directors), as
against requirement of seven Independent Directors. The Company has approached the Administrative Ministry for
appointment of requisite number of Independent Directors on its Board from time to time.

A. Defined Contribution Plan
Superannuation Fund

The Corporation has Superannuation - Defined Contribution Scheme (DCS) maintained by ‘Superannuation Benefit Fund
Scheme (SBFS) Trust’ wherein Employer makes a monthly contribution of a certain percentage of ‘Basic Salary & Dearness
AUowance(DA)’, out of 30%, earmarked for various Superannuation benefits. This is in accordance with Department of Public
Enterprises (DPE) guidelines. These contributions are credited to individual Employee’s Account maintained either with Life
Insurance Corporation of India (LIC) or an optional National Pension Scheme (NPS) Account. For the Financial Year 2025-26,
the Corporation has made an overall contribution of ? 214.75 Crore (2024-25: ? 190.56 Crore) towards Superannuation - DCS
[including ? 146.81 Crore (2024-25: ? 105.78 Crore) to NPS] by charging it to the Statement of Profit and Loss.

Employee Pension Scheme(EPS-95)

During the year, Corporation has recognised ? 6.54 Crore (2024-25: ? 6.67 Crore) as contribution to Employee Pension Scheme
(EPS-95) in the Statement of Profit and Loss.

B. Defined Benefit Plan
Provident Fund

Provident Fund is administered through a separate Trust, established for this purpose in accordance with The Employee
Provident Fund and Miscellaneous Provisions Act, 1952. The Corporation’s contribution to the Provident Fund is remitted to
this trust based on a fixed percentage of the eligible employee’s salary and charged to Statement of Profit and Loss. During
the year, the Corporation has recognized ? 172.38 Crore (2024-25: ? 168.94 Crore) as Employer’s contribution to Provident Fund
in the Statement of Profit and Loss.

Shortfall, if any, in matching the Government specified minimum rate of return, will be made good by the Corporation and
charged to Statement of Profit and Loss. During the year, the fund has been able to match the Government specified minimum
rate of return. The present value of benefit obligation at period end is ? 5,395.72 Crore (31.03.2025: ? 5,484.75 Crore). The fair
value of the plan assets of Provident Fund Trust at the period end is ? 5,301.24 Crore (31.03.2025: ? 5,421.71 Crore) resulting
in cumulative shortfall of ? 94.48 Crore (31.03.2025:? 63.04 Crore). For the current year, a shortfall of ? 22.10 Crore (2024-25:
? 31.94 Crore) has been accounted through Other Comprehensive Income, and the balance has been charged to the Statement
of Profit and Loss, as applicable.

During the current year, a provision of ? Nil Crore has been created/reversed [FY 2024-25: an amount ? 0.66 Crore was reversed]
towards losses/reduction in losses on defaulted investments. The initial provision was created in FY 2019-20.

H: Notes

I. Gratuity i) Each employee rendering continuous service of 5 Years or more is entitled to receive gratuity amount equal
to 15/26 of the eligible salary for every completed years of service subject to maximum of ? 0.20 crore at the time of
separation from the Corporation. Besides the ceiling, gratuity increases by 25% whenever IDA rises by 50%. The long
term employee benefit of Gratuity is administered through a Trust, established under the erstwhile Payment of Gratuity
Act, 1972. The Board of Trustees comprises of representatives from the Employer who are also plan participants in
accordance with the plans regulation. The liability towards gratuity is funded with Life Insurance Companies.

ii) Pursuant to notification of Code on Social Security during the year, Actuarial Valuation of (unfunded) Gratuity
liability has been carried-out towards fixed-term associates with the Corporation as of 31.03.2026.

II. Pension The employees covered by the Pension Plan of the Corporation are entitled to receive monthly pension for
life. However, none of the current serving employees are covered under Pension Plan of the Corporation.

III. Post Retirement Medical Benefit (PRMBS): Post Retirement Benefit medical scheme provides medical benefit to
retired employees and eligible dependent family members. This long term employee benefit is administered through a
Trust. The liability towards Post-Retirement Medical Benefit for employees is ascertained, yearly, based on the actuarial
valuation and funded to the Trust.

IV. Ex-gratia The ex-employees of Corporation are covered under the Scheme, entitling to get ex-gratia, determined based
on their salary grade at the time of their superannuation. The benefit is paid to eligible employees till their survival, and
thereafter till the survival of their spouse. However, none of the current serving employees are covered under this Plan.

V. Resettlement Allowance: Upon superannuation from the services of the Corporation, there are employees who
permanently settle down at a place other than the location of the last posting. Such employees are provided with
resettlement allowance as per policy of the Corporation.

VI. Felicitation Scheme Under the Scheme, superannuated employees are felicitated with a token lumpsum amount to
honor their long and dedicated service, on reaching certain age-related milestones.

VII. Others The expected return on plan assets is based on market expectation over the entire life of the related obligation.
The actuarial assumption with regard to future salary escalation takes into consideration, the factors such as inflation,
seniority, promotion, demand & supply in the employment market.

VIII. Figures in italics represent last year figures.

I: The Government of India has notified the implementation of four Labour Codes, namely The Code on Wages, 2019, The

Industrial Relations Code, 2020, The Code on Social Security, 2020 and The Occupational Safety, Health and Working Conditions
Code, 2020, with effect from 21^st November 2025. These Codes consolidate and rationalise 29 existing labour laws.

Based on the assessment carried out by the Corporation and the information available as at the reporting date, no material
impact is envisaged in this regard. The Corporation continues to monitor developments on labour code/rules and provide
appropriate accounting effect, as applicable.

As on 31.03.2026, the Corporation has no inventory of Non-Solar Renewable Energy Certificates (RECs) (31.03.2025:
Nil Units), available for sale after earmarking a requisite quantity already for captive consumption. Traded in Indian
Energy Exchange Ltd., the revenue from RECs is recognized as and when the same are sold.

As on 31.03.2026, there are no loans or advances in the nature of loans granted to promoters, directors, KMPs and the
related parties either severally or jointly with any other person that are repayable on demand (or, without specifying
any terms or period of repayment).

(a) During the current year, Corporation has executed further amendments to the ‘Facility agreement for inter-corporate
subordinated loan’ entered during FY 2023-24 [further amended during FY 2024-25] with HPCL Rajasthan Refinery Limited
(HRRL), to disburse an interest bearing subordinated loan of upto ? 8,950 Crore, to meet HRRL’s project expenditure [Govt. of
India’s approval was awaited as of 31.03.2026, for equity infusion into HRRL by the Corporation, beyond the currently approved
limit]. Towards these, as of 31.03.2026, a sum of ? 8,286 Crore (31.03.2025: ? 4,325 Crore) has been disbursed to HRRL, which
would be repayable by way of issue of equivalent amount of Equity Shares to the Corporation. Apart from the loan amount,
as of 31.03.2026, an interest amount (net of TDS) of ? 690.56 Crore (31.03.2025: ? 186.34 Crore) is outstanding but not due.

During April 2026, Cabinet Committee on Economic Affairs has approved the proposal for additional equity investment by the
Corporation for the revised project cost equivalent to Corporation’s shareholding of 74%. Upon allotment of equity shares by
HRRL, post equity call to both the promoters, requisite accounting treatment would be accorded to convert the subordinated
loan to investment.

(b) As of 31.03.2026, the Corporation has extended an interim loan of ? 8.00 Crore (applicable interest rate @ 7% p.a.) to its
associate company GSPL India Gasnet Limited (GIGL). The loan along with interest (not yet due) remains outstanding, at
the year-end. This is part of an arrangement, whereby Corporation is required to subscribe to Non-Convertible Redeemable
Cumulative Preference Shares of ? 16.21 Crore. The interim loan along with interest thereupon would be repayable by GIGL,
upon receipt of subscription amount towards Non-Convertible Redeemable Cumulative Preference Shares.

(c) Disclosures with respect to loans granted to HPCL Rajasthan Refinery Limited, and GSPL India Gasnet Limited:

72

' Other Disclosures

72.1: The Quarterly returns / statements of the first 3 quarters of the current financial year with respect to current assets
(Inventories) filed with banks / financial institutions for the financial year 2025-26 are in agreement with the books of accounts.
The return for the 4^th quarter, being price sensitive information, will be filed after declaration of annual results.

72.2: Compliance with number of layers of companies as per Clause 87 of Section 2 of the Companies Act, 2013 read with Companies
(Restriction on number of Layers) Rules, 2017 is not applicable for Government Companies.

72.3: There have not been any revaluation of Property, Plant & Equipment and Intangible Assets.

72.4: The borrowings from banks and financial institutions were used for the purpose for which it was taken.

72.5: There are no proceedings initiated or pending for holding any benami property under the Benami Transactions (Prohibition)
Act, 1988 (45 of 1988) and rules made thereunder.

72.6: No Bank or financial institution or other lender has declared the Corporation as willful defaulter.

72.7: There are no Charges or satisfaction yet to be registered with Registrar of Companies beyond the statutory / stipulated period.

72.8: There are no pending applications with any authority for a scheme of arrangement in terms of sections 230 to 237 of the
Companies Act, 2013.

72.9: To the best of knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or
share premium or any other sources or kind of funds) to or in any other person(s) or entity(ies), including foreign entities
(“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or
indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Corporation
(Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

To the best of knowledge and belief, no funds have been received from any person or entity, including foreign entity (“Funding
Parties”), with the understanding, whether recorded in writing or otherwise, to directly or indirectly, lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiary”) or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

72.10: There are no unrecorded transactions, which have been surrendered or disclosed as Income during the year in the tax
assessments under the Income tax act, 1961.

72.11: There are no trading entered into or investments made in Crypto Currency or Virtual Currency during the year.

73 Previous periods figures are regrouped wherever necessary.

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b)
OF THE COMPANIES ACT, 2013 ON THE STANDALONE FINANCIAL STATEMENTS OF HINDUSTAN
PETROLEUM CORPORATION LIMITED FOR THE YEAR ENDED 31 MARCH 2026

The preparation of financial statements of Hindustan Petroleum Corporation Limited for the year ended 31 March 2026 in accordance
with the financial reporting framework prescribed under the Companies Act, 2013 is the responsibility of the management of the
company. The statutory auditors appointed by the Comptroller and Auditor General of India under section 139(5) are responsible
for expressing opinion on the financial statements under section 143 of the Act based on independent audit in accordance with
the standards on auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide their Audit
Report dated 13 May 2026.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit of the financial statements of
Hindustan Petroleum Corporation Limited for the year ended 31 March 2026 under section 143(6)(a) of the Act. This supplementary
audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily
to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records.

On the basis of my supplementary audit nothing significant has come to my knowledge which would give rise to any comment
upon or supplement to statutory auditors’ report under section 143(6)(b) of the Act.