8.1 Provisions
Provisions are recognized when the Company has a presentobligation (legal or constructive) as a result of a past event, itis probable that an outflow of resources embodying economicbenefits will be required to settle the obligation and a reliableestimate can be made of the amount of the obligation.
8.2 Decommissioning Liability
Decommissioning costs are provided at the present valueof expected cost to settle the obligation using estimatedcash flows and are recognized as part of the cost of theparticular asset. The cash flows are discounted at acurrent pre-tax rate that reflects the risks specific to thedecommissioning liability. The unwinding of the discount isexpensed as incurred and recognized in the Statement ofProfit and Loss as a finance cost. The estimated future costof decommissioning is reviewed annually and adjusted asappropriate. Changes in the estimated future cost or in thediscount rate applied are adjusted in the cost of the asset.
8.3.1 Show-cause notices issued by various GovernmentAuthorities are generally not considered as obligations.When the demand notices are raised against such showcause notices and are disputed by the Company, these areclassified as disputed obligations.
8.3.2 The treatment in respect of disputed obligations is as under:
a) a provision is recognized in respect of presentobligations where the outflow of resources is probableas per 8.1 above.
b) all other cases are disclosed as contingent liabilitiesunless the possibility of outflow of resources is remote.
8.3.3 A contingent asset is disclosed where an inflow of economicbenefits is probable.
8.3.4 Contingent liabilities/assets are disclosed on the basis ofjudgment of the management/independent experts andreviewed at each Balance Sheet date to reflect the currentmanagement estimate.
Revenue from Contracts with Customers
9.1 Revenue is recognized when control of the goods orservices are transferred to the customer at an amount thatreflects the consideration to which the Company expects tobe entitled in exchange for those goods or services.
The Company has generally concluded that it is the principalin its revenue arrangements, except a few agency services,because it typically controls the goods or services beforetransferring them to the customer.
The Company considers whether there are other promisesin the contract that are separate performance obligations towhich a portion of the transaction price needs to be allocated(e.g., customer loyalty points). In determining the transactionprice for the sale of products, the Company considers theeffects of variable consideration, the existence of significantfinancing components, non-cash consideration andconsideration payable to the customer (if any).
9.2 Revenue from the sale of petroleum products, petrochemicalproducts, Crude and gas are recognized at a point in time,generally upon delivery of the products. The Companyrecognizes revenue over time using input method (on thebasis of time elapsed) in case of non-refundable depositsfrom dealers and service contracts. In case of constructioncontracts, revenue and cost are recognized by measuringthe contract progress using input method by comparing thecost incurred and total contract cost.
9.3 The Company has assumed that recovery of excise dutyflows to the Company on its own account. This is for thereason that it is a liability of the manufacturer which forms
part of the cost of production, irrespective of whether thegoods are sold or not. Since the recovery of excise dutyflows to the Company on its own account, revenue includesexcise duty.
However, Sales Tax/ Goods and Services Tax (GST) andValue Added Tax (VAT) is not received by the Company onits own account. Rather, it is tax collected on value addedto the product by the seller on behalf of the government.Accordingly, it is excluded from revenue.
The Company provides volume rebates to certain customersonce the quantity of products purchased during the periodexceeds a threshold specified in the contract. Rebates areoffset against amounts payable by the customer. The volumerebates/ cash discount give rise to variable consideration. Toestimate the variable consideration for the expected futurerebates/ cash discount, the Company applies the most likelyamount method for contracts with a single-volume thresholdand the expected value method for contracts with more thanone volume threshold. The selected method that best predictsthe amount of variable consideration is primarily driven by thenumber of volume thresholds contained in the contract andaccordingly, the Company recognizes a refund liability for theexpected future rebates with suitable adjustments in revenuefrom operations.
The Company operates various loyalty point schemes.The transaction price allocated to customer loyalty pointsis based on their relative estimated standalone sellingprice and the same is reduced from revenue from saleof goods. While estimating standalone selling price ofcustomer loyalty points, the likelihood of exercising theoption is adjusted. Wherever the Company is acting asan agent in this arrangement, the Company recognize therevenue on net basis.
Excise duty is accounted on the basis of both, paymentsmade in respect of goods cleared and provision made forgoods lying in stock. Value of stock includes excise dutypayable / paid on finished goods, wherever applicable.
11.1 Current Income Tax
Provision for current tax is made as per the provisions ofthe Income Tax Act, 1961. The tax rates and tax laws usedto compute the amount are those that are enacted orsubstantively enacted, at the reporting date.
Current income tax relating to items recognized outsideprofit or loss is recognized outside profit or loss (either inother comprehensive income or in equity). Management
periodically evaluates positions taken in the tax returns withrespect to applicable tax regulations which are subject tointerpretation and establishes provisions where appropriate.
11.2.1 Deferred tax is provided using the Balance Sheet methodon temporary differences between the tax bases of assetsand liabilities and their carrying amounts for financialreporting purposes at the reporting date. Deferred taxassets and liabilities are measured based on tax rates (andtax laws) that have been enacted or substantively enactedat the reporting date.
11.2.2 Deferred tax relating to items recognized outside profitor loss is recognized outside profit or loss (either in othercomprehensive income or in equity).
Short Term Employee Benefits are accounted for in theStatement of Profit and Loss for the period during which theservices have been rendered.
a) The Company's contribution to the Provident Fund isremitted to separate trusts established for this purposebased on a fixed percentage of the eligible employee'ssalary and charged to the Statement of Profit andLoss/CWIP Shortfall, if any, in the fund assets, basedon the Government specified minimum rate of return,is made good by the Company and charged to theStatement of Profit and Loss/CWIP
b) The Company operates defined benefit plansfor Gratuity, Post-Retirement Medical Benefits,Resettlement, Felicitation Scheme and Ex-gratia. Thecost of providing such defined benefits is determinedusing the projected unit credit method of actuarialvaluation made at the end of the year. Out of theseplans, Gratuity and Post-Retirement Medical Benefitsare administered through respective Trusts.
c) Obligations on other long term employee benefitsviz leave encashment and Long Service Awards areprovided using the projected unit credit method ofactuarial valuation made at the end of the year. Out ofthese obligations, leave encashment obligations arefunded through qualifying insurance policies madewith insurance companies.
d) The Company also operates a defined contributionscheme for Pension benefits for its employeesand the contribution is remitted to a separateTrust/Corporate NPS.
Remeasurements, comprising of actuarial gains andlosses and the return on plan assets (excluding amountsincluded in net interest on the net defined benefit liability),are recognized immediately in the Balance Sheet with acorresponding debit or credit to retained earnings throughOther Comprehensive Income (OCI) in the period in whichit occurs. Remeasurements are not reclassified to profit orloss in subsequent periods. Remeasurements in respect ofother long-term benefits are recognized in the Statement ofProfit and Loss.
In case of grants relating to depreciable assets, the costof the asset is shown at gross value and grant thereon istreated as Deferred income which are recognized as "OtherOperating Revenues" usually in the Statement of Profitand Loss over the period and in the proportion in whichdepreciation is charged.
Revenue grants are recognized in the Statement of Profitand Loss on a systematic basis over the periods in whichthe entity recognizes as expenses the related cost for whichthe grants are intended to compensate.
Subsidy and budgetary support towards under recoveriesare recognized in "Revenue from Operations” as perschemes notified by Government from time to time, subjectto final adjustments, wherever applicable.
Revenue grants are generally recorded under "OtherOperating Revenues”, except north east excise dutyexemption which is netted off with the related expense.
13.3 When loans or similar assistance are provided bygovernments or related institutions, with an interest ratebelow the current applicable market rate or NIL interestrate, the effect of this favourable interest is regarded asa government grant. The loan or assistance is initiallyrecognized and measured at fair value and the governmentgrant is measured as the difference between the initialcarrying value of the loan and the proceeds received. Theloan is subsequently measured as per the accounting policyapplicable to financial liabilities. Classification of the grant ismade considering the terms and condition of the grant i.e.whether grants relates to assets or otherwise.
Expenditure incurred before obtaining the right(s) toexplore, develop and produce oil and gas are expensed asand when incurred.
Acquisition cost relating to projects under explorationare initially accounted as "Intangible Assets underDevelopment”. The expenses on oil and gas assets that isclassified as intangible includes acquired rights to exploreand exploratory drilling cost.
Cost of Survey and prospecting activities conducted in thesearch of oil and gas are expensed as exploration cost in theyear in which these are incurred.
If the project is not viable based upon technical feasibilityand commercial viability study, then all cost relating toExploratory Wells are expensed in the year when determinedto be dry. If the project is proved to be viable, then all costrelating to drilling of Exploratory Wells shall be continued tobe presented as "Intangible Assets under Development”.
Acquisition cost relating to projects under developmentstage are presented as "Capital Work-in-Progress”.
When a well is ready to commence commercial production,the capitalized cost corresponding to proved developedoil and gas reserves is reclassified as 'Completed wells/Producing wells' from "Capital Work-in-Progress/ IntangibleAssets under Development” to the gross block of assets.Examples of Oil and Gas assets that might be classified asTangible Assets include development drilling cost, pipingand pumps and producing wells.
Production cost include pre-well head and post-well headexpenses including depreciation and applicable operatingcost of support equipment and facilities are expensed off.
Depletion is calculated using the Unit of Production methodbased upon proved and developed reserves.
In case of development / production phase, abandonment/ decommissioning amount is recognized at the presentvalue of the estimated future expenditure. Any changein the present value of the estimated decommissioningexpenditure other than the unwinding of discount is adjustedto the decommissioning provision and the carrying value of thecorresponding asset. The unwinding of discount on provisionis charged in the Statement of Profit and Loss as finance costs.
In case of E&P related development and producingassets, expected future cash flows are estimated usingmanagement's best estimate of future oil and natural gas
prices, production volumes, proved & probable reservesvolumes and discount rate. The expected future cashflows are estimated on the basis of value in use concept.The value in use is based on the cash flows expected to begenerated by the projected oil or gas production profiles upto the expected dates of cessation of production of eachproducing field, based on current estimates of proved andprobable reserves and on reasonable & supportable fiscalassumptions that represent management's best estimateof the range of economic conditions that will exist over theremaining useful life of the asset. Management takes along-term view of the range of economic conditions over theremaining useful life of the asset and, are not based on therelatively short-term changes in the economic conditions.However, impairment of exploration and evaluation assetsis to be done in line with para-14.6.2.
Exploration and Evaluation assets are tested for impairmentwhere an indicator for impairment exists. In such cases, whilecalculating recoverable amount, in addition to the factorsmentioned in 14.6.1, management's best estimate of totalcurrent reserves and resources are considered (includingpossible and contingent reserve) after appropriatelyadjusting the associated inherent risks. Impairment lossis reversed subsequently, to the extent that conditions forimpairment are no longer present.
In case of E&P Assets, the Company generally considers aproject as cash generating unit. However, in case where themultiple fields are using common production/transportationfacilities and are sufficiently economically interdependentthe same are considered to constitute a single CashGenerating Unit.
14.7 The Company accounts for jointly owned oil and gas assets,in which it is non-operator and holds only participatinginterest, based on the accounting estimates and judgementsadopted by operator of the assets.
The Company uses twelve months period for determiningcurrent and non-current classification of assets andliabilities in the balance sheet.
Initial recognition and measurement
All Financial Assets are recognized initially at fair value plus,in the case of financial assets not recorded at fair valuethrough profit or loss, transaction cost that are attributableto the acquisition of the Financial Asset. However, tradereceivables that do not contain a significant financingcomponent are measured at transaction price. Transaction
costs directly attributable to the acquisition of financialassets measured at fair value through profit or loss arerecognized immediately in the Statement of Profit and Loss.
For the purpose of subsequent measurement, FinancialAssets are classified in four categories:
n Financial Assets at amortised cost
n Debt Instruments at fair value through Other
Comprehensive Income (FVTOCI)
n Equity Instruments at fair value through Other
n Financial Assets and derivatives at fair value throughprofit or loss (FVTPL)
A Financial Asset is measured at the amortised cost if boththe following conditions are met:
a) The asset is held within a business model whoseobjective is to hold assets for collecting contractualcash flows, and
b) Contractual terms of the asset give rise on specifieddates to cash flows that are solely paymentsof principal and interest (SPPI) on the principalamount outstanding.
Financial Assets are subsequently measured at amortisedcost using the effective interest rate (EIR) method.Amortised cost is calculated by taking into account anydiscount or premium on acquisition and fees or cost thatare an integral part of the EIR. The EIR amortisation isincluded in finance income in the profit or loss. The lossesarising from impairment are recognized in the profit or loss.Apart from the same, any income or expense arising fromremeasurement of financial assets measured at amortisedcost, in accordance with Ind AS 109, is recognized in theStatement of Profit and Loss. This category generallyapplies to trade and other receivables.
A 'Debt Instrument' is classified as at the FVTOCI if both ofthe following criteria are met:
a) The objective of the business model is achieved bothby collecting contractual cash flows and selling thefinancial assets, and
b) The asset's contractual cash flows represent solelypayments of principal and interest (SPPI).
Debt Instruments included within the FVTOCI category aremeasured initially as well as at each reporting date at fairvalue. Fair Value movements are recognized in the Other
Comprehensive Income (OCI). However, the Companyrecognizes interest income, impairment losses & reversalsand foreign exchange gain or loss in the Statement of Profitand Loss. On derecognition of the asset, cumulative gain orloss previously recognized in OCI is reclassified from theEquity to the Statement of Profit and Loss. Interest earnedwhilst holding FVTOCI Debt Instrument is reported asinterest income using the EIR method.
Investments in Equity Shares of Subsidiaries, JointVentures and Associates are accounted for at cost inthe financial statements and the same are tested forimpairment in case of any indication of impairment.
Investments in Share Warrants of Joint Ventures aremeasured at fair value and the Company has made anirrevocable election to present subsequent changes inthe fair value in Other Comprehensive Income.
All such equity investments are measured at fair valueand the Company has made an irrevocable election topresent subsequent changes in the fair value in OtherComprehensive Income. There is no recycling of theamounts from OCI to the Statement of Profit and Loss,even on sale of investments.
D. Dividend income is recognized in the Statement ofProfit and Loss when the Company's right to receivedividend is established.
FVTPL is a residual category for Debt Instruments. Anydebt instrument, which does not meet the criteria forcategorisation as at amortised cost or as FVTOCI, isclassified as at FVTPL.
This category also includes derivative financial instrumentsentered into by the Company that are not designated ashedging instruments in hedge relationships as defined byInd AS 109.Debt Instruments included within the FVTPLcategory are measured at fair value with all changesrecognized in the Statement of Profit and Loss. Interestincome on such instruments has been presented underinterest income.
The Company applies Expected Credit Loss (ECL) modelfor measurement and recognition of impairment loss onthe financial Assets that are measured at amortised coste.g., loans, debt securities, deposits, trade receivablesand bank balance.
ECL impairment loss allowance (or reversal) recognizedduring the period is recognized as expense /income/ inthe Statement of Profit and Loss. In the Balance Sheet,ECL is presented as an allowance, i.e., as an integral partof the measurement of those assets in the Balance Sheet.The allowance reduces the net carrying amount. Until theasset meets write-off criteria, the Company does not reduceimpairment allowance from the gross carrying amount.
The Company follows 'simplified approach' for recognitionof impairment loss allowance on Trade Receivables. Theapplication of simplified approach does not require theCompany to track changes in credit risk. Rather, it recognizesimpairment loss allowance based on lifetime ECLs at eachreporting date, right from its initial recognition.
As a practical expedient, the Company uses a provisionmatrix to determine impairment loss allowance on portfolioof its trade receivables. The provision matrix is based on itshistorically observed default rates over the expected life ofthe trade receivables and is adjusted for forward-lookingestimates. At every reporting date, the historical observeddefault rates are updated and changes in the forward¬looking estimates are analysed. On that basis, the Companyestimates provision on trade receivables at the reporting date.
For recognition of impairment loss on other financial assets,the Company determines that whether there has been asignificant increase in the credit risk since initial recognition.If credit risk has not increased significantly, 12-months ECLis used to provide for impairment loss. However, if creditrisk has increased significantly, lifetime ECL is used. If, in asubsequent period, credit quality of the instrument improvessuch that there is no longer a significant increase in credit risksince initial recognition, then the entity reverts to recognizingimpairment loss allowance based on 12-months ECL.
Lifetime ECL are the expected credit losses resulting from allpossible default events over the expected life of a financialinstrument. The 12-months ECL is a portion of the lifetimeECL which results from default events that are possiblewithin 12 months after the reporting date.
16.2 Financial Liabilities
All Financial Liabilities are recognized initially at fair valueand, in the case of liabilities subsequently measured atamortised cost, they are measured net of directly attributabletransaction cost. In case of Financial Liabilities measured atfair value through profit or loss, transaction costs directlyattributable to the acquisition of financial liabilities arerecognized immediately in the Statement of Profit and Loss.
The Company's Financial Liabilities include trade andother payables, loans and borrowings and derivativefinancial instruments.
The measurement of financial liabilities depends on theirclassification, as described below:
Financial Liabilities at fair value through profit or loss includefinancial liabilities held for trading and financial liabilitiesdesignated upon initial recognition as at fair value throughthe Statement of Profit and Loss. This category alsoincludes derivative financial instruments entered into by theCompany that are not designated as hedging instrumentsin hedge relationships as defined by Ind AS 109.
Gains or losses on liabilities held for trading arerecognized in the Statement of Profit and Loss.
B. Financial Liabilities at amortised cost
Financial Liabilities that are not held-for-trading andare not designated as at FVTPL are measured atamortised cost at the end of subsequent accountingperiods. The carrying amounts of financial liabilitiesthat are subsequently measured at amortised cost aredetermined based on the effective interest method.Gains and losses are recognized in the Statement ofProfit and Loss when the liabilities are derecognizedas well as through the EIR amortisation process.
Amortised cost is calculated by taking into accountany discount or premium on acquisition and feesor cost that are an integral part of the EIR. The EIRamortisation is included as finance costs in theStatement of Profit and Loss.
C. Financial Guarantee Contracts
Financial guarantee contracts issued by the Companyare those contracts that require a payment to be madeto reimburse the holder for a loss it incurs because thespecified debtor fails to make the payment when duein accordance with the terms of a debt instrument.Financial guarantee contracts are recognized initiallyas a liability at fair value, adjusted for transaction costthat are directly attributable to the issuance of theguarantee. Subsequently, the liability is measured atthe higher of the amount of loss allowance determinedas per impairment requirements of Ind AS 109 and theamount initially recognized less cumulative incomerecognized in accordance with principles of Ind AS 115.
16.3 Derivative Instrument- Initial recognition / subsequentmeasurement
Derivative financial instruments are initially recognizedat fair value on the date on which a derivative contract isentered into and are subsequently re-measured at fair value.The accounting for subsequent changes in fair value ofderivatives depends on the designation or non- designationof derivative as hedging instruments. Derivatives are carriedas financial assets when the fair value is positive and asfinancial liabilities when the fair value is negative.
The Company generally designates the whole contract as hedginginstrument, and these hedges are accounted for as cash flowhedges. At the inception of a hedge relationship, the Companydocuments the hedge relationship to which the Company wishesto apply hedge accounting, the risk management objective,strategy for undertaking the hedge, the hedging/ economicrelationship, the hedged item or transaction, the nature of therisk being hedged, hedge ratio and how the entity will assess theeffectiveness of changes in the hedging instrument's fair value inoffsetting the exposure to changes in the hedged item's fair valueor cash flows attributable to the hedged risk.
The effective portion of changes in the fair value of thesederivatives is recognized in Other Comprehensive Incomeand accumulated under the heading Cash Flow HedgeReserve within Equity. The fair value changes relating tothe ineffective portion is recognized immediately in theStatement of Profit and Loss. Amounts previously recognizedin OCI and accumulated in equity relating to effective portionare reclassified to Statement of Profit and Loss in the periodswhen the hedged item affects profit or loss, in the sameline item as the recognized hedged item or treated as basisadjustment if a hedged forecast transaction subsequentlyresults in the recognition of a non-financial asset or non¬financial liability. When a forecasted transaction is no longerexpected to occur, the cumulative gain or loss accumulatedin equity is transferred to the Statement of Profit and Loss.
The Company enters into certain derivative contracts tohedge risks which are not designated as hedges. Suchcontracts are accounted for at fair value through theStatement of Profit and Loss and are included in the OtherIncome or Other Expenses as Gain on Derivatives or Loss onDerivatives respectively.
Cash and Cash Equivalents in the Balance Sheet comprisecash at banks and on hand and short-term deposits with anoriginal maturity of three months or less, which are subjectto an insignificant risk of changes in value. Bank overdraft(negative balance in Account) is shown under short termborrowings under Financial Liabilities & Positive balance inthat account is shown in Cash & Cash Equivalents.
Pursuant to the Scheme of Amalgamation, IOC SharesTrust has been set up by IOCL for holding treasury sharesin relation to IBP and BRPL mergers. The shares held by IOCShares Trust are treated as treasury shares.
Own equity instruments that are reacquired (treasuryshares) are recognized at cost and deducted from equity.No gain or loss is recognized in the Statement of Profit
and Loss on the purchase, sale, issue or cancellation of theCompany's own equity instruments.
Ministry of Corporate Affairs through its notification amendsCompanies (Indian Accounting Standards) Rules, 2015 tonotify new standards or amend the existing standards andthe such notifications during the Financial Year 2024-25are as follows:
n Vide Notification G.S.R. 492 (E) dated 12th August2024, in which Ind AS 104 on Insurance Contract wasomitted and the new Indian Accounting Standard (IndAS) 117 on Insurance Contracts has been notified.Insurance contract is defined by the Ind AS 117as "A contract under which one party (the issuer)accepts significant insurance risk from another party(the policyholder) by agreeing to compensate thepolicyholder if a specified uncertain future event (theinsured event) adversely affects the policyholder.”. TheCompany does not have any contract falling under thedefinition of Insurance contract and hence impact ofthe new Ind AS is not material.
n Vide Notification G.S.R. 554(E) dated 9th September 2024,amendments have been made in Indian AccountingStandard (Ind AS) 116 on Leases with reference to theSale and Lease back transactions. These transactionsare where an entity (the seller-lessee) transfers an assetto another entity (the buyer-lessor) and leases thatasset back from the buyer-lessor. The Company doesnot have any contract falling under the category of Saleand Lease back transactions and hence the impact ofthe amendment is not material.
n Vide Notification G.S.R. 602(E) dated 28th September2024, amendments have been made to enableinsurer or insurance company to provide its financialstatement as per Ind AS 104 for the purposes ofconsolidated financial statements by its parent orinvestor or venturer till the Insurance Regulatory andDevelopment Authority notifies the Ind AS 117 and torevive Ind AS 104 for this purpose.
As the Company is not an insurer or and insurancecompany the amendment does not have anymaterial impact.
Ministry of Corporate Affairs through its notification amendsCompanies (Indian Accounting Standards) Rules, 2015to notify new standards or amend the existing standards.During the year no new standard or modification in existingstandard has been notified which will be applicable fromApril 1, 2025, or thereafter.
The preparation of the Company's financial statements requiresmanagement to make judgements, estimates and assumptionsthat affect the reported amounts of revenues, expenses, assetsand liabilities, and the accompanying disclosures, and thedisclosure of contingent liabilities. These include recognitionand measurement of financial instruments, estimates of usefullives and residual value of Property, Plant and Equipment andIntangible Assets, valuation of inventories, measurement ofrecoverable amounts of cash-generating units, measurement ofemployee benefits, actuarial assumptions, provisions etc.
Uncertainty about these assumptions and estimates couldresult in outcomes that require a material adjustment to thecarrying amount of assets or liabilities affected in future periods.The Company continually evaluates these estimates andassumptions based on the most recently available information.Revisions to accounting estimates are recognized prospectivelyin the Statement of Profit and Loss in the period in which theestimates are revised and in any future periods affected.
In the process of applying the Company's accountingpolicies, management has made the following judgements,which have the significant effect on the amounts recognisedin the financial statements:
Ind AS requires assessment of materiality by the Companyfor accounting and disclosure of various transactions in thefinancial statements. Accordingly, the Company assessesmateriality limits for various items for accounting anddisclosures and follows on a consistent basis. Overallmateriality is also assessed based on various financialparameters such as Gross Block of assets, Net Block ofAssets, Total Assets, Revenue and Profit Before Tax. Themateriality limits are reviewed and approved by the Board.
Acquisition costs and drilling of exploratory well costs arecapitalized as intangible asset under development and arereviewed at each reporting date to confirm that explorationdrilling is still under way or work has been determined /under way to determine that the discovery is economicallyviable based on a range of technical & commercialconsiderations and for establishing development plansand timing, sufficient / reasonable progress is being made.If no future activity is planned on reasonable grounds/ timeframes, Intangible asset under development andproperty acquisition costs is written off. Upon start ofproduction from field and recognition of proved reserves,cost carried as intangible asset under development istransferred to producing properties. Also refer Note-34 forrelated disclosures.
Contingent liabilities may arise from the ordinary courseof business in relation to claims against the Company,including legal, contractor, land access and other claims.By their nature, contingencies will be resolved only whenone or more uncertain future events occur or fail to occur.The assessment of the existence, and potential quantum, ofcontingencies inherently involves the exercise of significantjudgement and the use of estimates regarding the outcomeof future events.
The key assumptions concerning the future and other keysources of estimation at the reporting date, that have asignificant risk of causing a material adjustment to thecarrying amounts of assets and liabilities within the nextfinancial year, are described below.
Existing circumstances and assumptions about futuredevelopments, however, may change due to market changesor circumstances arising that are beyond the control of theCompany. Such changes are reflected in the assumptionswhen they occur.
Defined benefit plans/ Other Long term employeebenefits
The cost of the defined benefit plans and other long termemployee benefit plans are determined using actuarialvaluations. An actuarial valuation involves making variousassumptions that may differ from actual developments inthe future. These include the determination of the discountrate, future salary increases and mortality rates. Due tothe complexities involved in the valuation and its long¬term nature, a defined benefit obligation is highly sensitiveto changes in these assumptions. All assumptions arereviewed at each reporting date.
The parameter most subject to change is the discountrate. The management considers the interest rates ofgovernment securities based on expected settlement periodof various plans.
Further details about various employee benefit obligationsare given in Note 35.
Fair value measurement of financial instruments
When the fair values of financial assets and financialliabilities recorded in the Balance Sheet cannot be measuredbased on quoted prices in active markets, their fair valueis measured using valuation techniques including theDiscounted Cash Flow (DCF) model based on level-2 andlevel-3 inputs. The inputs to these models are taken fromobservable markets where possible, but where this is not
feasible, a degree of judgement is required in establishing fairvalues. Judgements include considerations of inputs suchas price estimates, volume estimates, rate estimates etc.Changes in assumptions about these factors could affect thereported fair value of financial instruments. Also refer Note 39for further disclosures of estimates and assumptions.
The impairment provisions for trade receivables are madeconsidering simplified approach based on assumptionsabout risk of default and expected loss rates. The Companyuses judgement in making these assumptions and selectingthe inputs to the impairment calculation based on theCompany's past history and other factors at the end ofeach reporting period. In case of other financial assets,
the Company applies general approach for recognition ofimpairment losses wherein the Company uses judgement inconsidering the probability of default upon initial recognitionand whether there has been a significant increase in creditrisk on an ongoing basis throughout each reporting period.Also refer Note-40 for impairment analysis and provision.
The Company uses estimates and judgements based on therelevant facts, circumstances, present and past experience,rulings, and new pronouncements while determining theprovision for income tax. A deferred tax asset is recognisedto the extent that it is probable that future taxable profitwill be available against which the deductible temporarydifferences and tax losses can be utilised.
A. i) Freehold Land includes H1.61 crore (2024: H1.61 crore) lying vacant due to title disputes/ litigation.
ii) Out of the Freehold land measuring 1364.01 acres at Mathura and Agra regions, land measuring 50 acres (approx) has beenacquired by NHAI as a part of the NH2 widening project for which the determination of value of compensation is pending.Accordingly, the value of land amounting to H1.18 crore is continued to be included in Freehold land.
iii) Freehold Land of 490 acres at Guwahati Refinery includes land parcel of approx. 32.39 acres (Costing H0.05 crore) on whichpublic roads, drains etc. have been constructed by PWD, Govt. of Assam.
iv) Freehold Land includes H41.75 crore of compensation paid in respect of land at Panipat Refinery as per District and Highcourt orders of earlier dates, which was later quashed by subsequent High Court order dated 18.12.2019. Since, the processof recovery of compensation already paid, has been stayed by Hon'ble Supreme Court vide order dated 21.09.2020, necessaryadjustment shall be made in the cost of the land upon actual recovery, if any.
B. i) Buildings include H0.01 crore (2024: H0.01 crore) towards 1605 (2024: 1605) nos. of shares in Co-operative Housing Societies
towards membership of such societies for purchase of flats.
ii) Includes Roads, Bridges etc. (i.e. Assets other than Building) of Gross block amounting to H6207.6 crore (2024: H6699.32crore) and net block amounting to H3420.8 crore (2024: H3538.55 crore).
C. Depreciation and amortisation for the year includes H96.42 crore (2024: H81.37 crore) relating to construction period expensesshown in 'Note - 2.2'
D. Land and Buildings (Including ROU Asset) includes Gross Carrying Value of H508.61 crore (2024: H933.03 crore) in respect of whichTitle/ Lease Deeds are pending for execution or renewal. (Refer Note - 48)
E. Impairment assessment has been carried out at period end by comparing the recoverable amount with the carrying value of assetsunder respective CGUs, as per Ind AS 36. Given the uncertainity over realisation of electricity tariffs and variations in CapacityUtilization Factor of some windmill assets, impairment loss of H68.17 crore (2024: NIL) and impairment reversal of H2.10 crore(2024: NIL) has been recognized, based on its value in use computed considering a discounting rate of 9.80%.
F. During the year, Useful life of DEF Plant has been reviewed and changed from 25 years to 15 years. The impact on account of this
change is increase in depreciation charge by H5.66 crore in FY 2024-25 which will be offset over future periods in the Statementof Profit & Loss.
G. During the year, Useful life of Optical Fibre Cable have been reviewed and changed from 13 years to 18 years. The impact on
account of this change is reduction in depreciation charge by H11.91 crore in FY 2024-25 which will be offset over future periodsin the Statement of Profit & Loss.
H. For further details regarding ROU Assets, refer 'Note - 36'.
I. In accordance with the requirements prescribed under Schedule II to Companies Act, 2013, the Company has adopted useful livesas prescribed in that schedule except in some cases as per point no. 2.4.1 of material accounting policies (Note-1).
The retained earnings comprises of general reserve and surplus which is used from time to time to transfer profits by appropriations.Retained earnings is free reserve of the Company and is used for the purposes like issuing bonus shares, buy back of shares andother purposes (like declaring Dividend etc.) as per the approval of Board of Directors. It includes the re-measurement of definedbenefit plan as per actuarial valuations which will not be reclassified to statement of profit and loss in subsequent periods.
As per the Companies Act 2013, a Bond Redemption Reserve is required to be created for all bonds/ debentures issued by theCompany at a specified percentage. This reserve is created out of appropriation of profits and is transferred back to generalreserve on repayment of bonds for which it is created. In 2019, this requirement was dispensed with in case of public issue/ privateplacement of debentures by listed companies to NBFCs, Housing Finance Companies and other listed companies.
Capital Reserve was created through business combinations and shall be utilised as per the provisions of the Companies Act 2013.
Insurance Reserve is created by the Company with the approval of Board of Directors to mitigate risk of loss of assets not insuredwith external insurance agencies. H20.00 crore is appropriated by the Company every year to this reserve. The reserve is utilised tomitigate actual losses by way of net appropriation in case any uninsured loss is incurred. Amount of H5.59 crore (2024: H6.25 crore)has been utilised for recoupment of uninsured losses.
This reserve represents the cumulative effect of fair value fluctuations of investments made by the Company in equity instrumentsof other entities. The cumulative gain or loss arising on such changes are recognised through Other Comprehensive Income (OCI)and accumulated under this reserve. This will not be reclassified to the statement of profit and loss in subsequent periods.
This reserve represents the cumulative effect of fair value fluctuations in debt investments made by the Company to earncontractual cash flows and which are available for sale. The cumulative gain or loss arising on such changes are recognisedthrough Other Comprehensive Income (OCI) and accumulated under this reserve. This amount will be reclassified to the statementof profit and loss in subsequent periods on disposal of respective instruments.
G. Cash Flow Hedge Reserve
The cash flow hedge reserve represents the cumulative effective portion of gains or losses arising on changes in fair value ofdesignated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on such changesare recognised through Other Comprehensive Income (OCI) and accumulated under this reserve. Such gains or losses will bereclassified to statement of profit and loss in the period in which the hedged item occurs/ affects the statement of profit and loss.
Note : During the current year, Block BK-CBM-2001/1 commenced the production of gas. Indian Oil has the participating interest of20.00% in the block.
The Proved and Proved & Developed reserves mentioned above are the provisional numbers based on the estimate provided by theoperator. For the purpose of estimation of Proved and Proved & Developed reserves, Deterministic method has been used by theoperator. The annual revision of Reserve Estimates is based on the yearly exploratory and development activities and results thereof.
Disclosures in compliance with Ind-AS 19 on "Employee Benefits" is as under:
A. Defined Contribution Plans- General DescriptionEmployee Pension Scheme (EPS-95)
During the year, the Company has recognised H23.95 crore (2024: H25.68 crore) as contribution to EPS-95 in the Statement of Profitand Loss/ CWIP (included in Contribution to Provident and Other Funds in Note - 27/ Construction period expenses in Note-2.2).
During the year, the Company has recognised H412.08 crore (2024: H420.32 crore) towards Defined Contributory EmployeesPension Scheme (including contribution in corporate National Pension System) in the Statement of Profit and Loss/ CWIP (includedin Contribution to Provident and Other Funds in Note - 27/ Construction period expenses in Note-2.2).
The Company's contribution to the Provident Fund are remitted to the three separate provident fund trusts established for thispurpose based on a fixed percentage of the eligible employee's salary and charged to the Statement of Profit and Loss. Shortfall ofnet income of trust below Government specified minimum rate of return, if any, and loss to the trust due to its investments turningstressed are being made good by the Company.
Each employee rendering continuous service of 5 years or more is entitled to receive gratuity amount based on completed tenureof service subject to maximum of H0.20 crore at the time of separation from the Company. Besides, the ceiling of gratuity increasesby 25% whenever IDA rises by 50% with reference to January 01, 2017.
PRMBF provides medical coverage to retired employees and their eligible dependant family members.
Resettlement benefit is allowed to employees to facilitate them to settle down upon retirement.
Ex-gratia is payable to those employees who have retired before January 01, 2007 and either not drawing pension fromsuperannuation benefit fund (as they superannuated prior to January 01, 1987, i.e. introduction of superannuation benefit fundscheme in IndianOil) or are drawing a pension lower than the ex gratia fixed for a Grade (in such case differential amount betweenpension and ex gratia is paid).
Employees Compensation for injuries arising out of or during the course of employment
Employees covered under the Employees' Compensation Act, 1923 who meet with accidents, while on duty, are eligible forcompensation under the said Act. Besides, a lumpsum monetary compensation equivalent to 100 months' Pay (BP DA) is paidin the event of an employee suffering death or permanent total disablement due to an accident arising out of and in the course ofhis employment.
The Company has a scheme to felicitate retired employees on attaining different age milestones with a token lumpsum amount.
Each employee is entitled to get 8 earned leaves for each completed quarter of service. Encashment of earned leaves is allowedduring service leaving a minimum balance of 15 days subject to maximum accumulation of 300 days. In addition, each employeeis entitled to get 5 sick leaves (in lieu of 10 Half Pay Leave) at the end of every six months. The entire accumulation of sick leaveis permitted for encashment only at the time of retirement. DPE had clarified earlier that sick leave cannot be encashed, thoughEarned Leave (EL) and Half Pay Leave (HPL) could be considered for encashment on retirement subject to the overall limit of 300days. Ministry of Petroleum and Natural Gas (MoPNG) has advised the Company to comply with the said DPE Guidelines. However,in compliance to the DPE guidelines of 1987 which had allowed framing of own leave rules within broad parameters laid down bythe Government and keeping in view operational complications and service agreements the Company had requested concernedauthorities to reconsider the matter. Subsequently, based on the recommendation of the 3rd Pay Revision Committee, DPE in itsguidelines on pay revision, effective from January 01,2017 has inter-alia allowed CPSEs to frame their own leave rules consideringoperational necessities and subject to conditions set therein. The requisite conditions are fully met by the Company.
On completion of specified period of service with the Company and also at the time of retirement, employees are rewarded withamounts based on the length of service completed. It is a mode of recognizing long years of loyalty and faithful service in linewith Bureau of Public Enterprises (currently DPE) advice vide its DO No. 7(3)/79-BPE (GM.I) dated February 14, 1983. On receiptof communication from MoPNG advising us that the issue of Long Service Award has been made into an audit para in the AnnualReport of CAG of 2019, the Corporation has been clarifying its position to MoPNG individually as well as on industry basis as to
how Long Service Awards are not in the nature of Bonus or Ex-gratia or honorarium and is emanating from a settlement with theunions under the Industrial Dispute Act as well as with the approval of the Board in line with the DPE's advice of 1983. The matteris being pursued with MoPNG for resolution. Pending this the provision is in line with Board approved policy.
LTC is allowed once in a period of two calendar years (viz. two yearly block). An employee has, in any given block period of twoyears, an option of availing LTC or encashing the entilements of LFA.
(Figures given in Unbold & Italic Font in the table are for previous year)
A. Leases
(a) As Lessee
The Company has entered into various material lease arrangements (including in substance lease arrangements) such as lands andbuildings for the purpose of its plants, facilities, offices, retail outlet etc., storage tankages facility for storing petroleum products,time charter arrangements for transportation of crude and petroleum products, transportation agreement for dedicated tanktrucks for road transportation of petroleum products, handling arrangement with CFA for providing dedicated storage facility andhandling lubes, supply of utilities like Hydrogen, Oxygen, Nitrogen and Water,way leave licences and port facilities among others.
There are no significant sale and lease back transactions and lease agreements entered by the Company do not contain anymaterial restrictions or covenants imposed by the lessor upto the current reporting period.
1. Various arrangements on BOO/BOOT basis for Tankages facility, Water Intake facility, Quality Control Lab, Plants for supplyof utility gases at Refineries for periods ranging from 10-25 years. In case of BOOT contracts, Lessor will transfer ownershipto IOCL at the end of contract period at Nil/Nominal value.
2. Leasehold lands from government for the purpose of plants, facilities and offices for the period 30 to 90 years.
As per requirement of the standard, maturity analysis of Lease Liabilities have been shown separately from the maturity analysis
of other financial liabilities under Liquidity Risk-Note 40: Financial Instruments & Risk Factors.
lease liabilities are as under:
(i) Variable Lease Payments
Variable lease payments that depend on an index or a rate are to be included in the measurement of lease liability althoughnot paid at the commencement date. As per general industry practice, the Company incurs various variable lease paymentswhich are not based any index or rate (variable based on kms covered or % of sales etc.) and are recognised in profit or lossand not included in the measurement of lease liability. Details of some of the arrangements entered by the Company whichcontain variable lease payments are as under:
1. Transportation arrangement based on number of kms covered for dedicated tank trucks with different operators forroad transportation of petroleum, petrochemical and gas products.
2. Leases of Land of Retail Outlets based on Sales volume.
3. Rent for storage tanks for petroleum products on per day basis.
4. Payment of VTS software and VSAT equipment based on performance of equipment.
5. Payment of SD WAN equipment & software based on performance of equipment.
The Company lease arrangements includes extension options only to provide operational flexibility. Company assessesat every lease commencement whether it is reasonably certain to exercise the extension options and further reassesseswhether it is reasonably certain to exercise the options if there is a significant event or significant change in circumstanceswithin its control. However, where Company has the sole discretion to extend the contract such lease term is included for thepurpose of calculation of lease liabilities.
The Company has the sole discretion to terminate the lease in case of lease agreement for Retail Outlets. However, Companyis reasonably certain not to exercise the option in view of significant improvement and prominent importance of Retailto the entity's operations. Accordingly, such lease term without any effect of termination is considered for the purpose ofcalculation of lease liabilities.
The Company have entered into various BOOT agreements wherein at the end of lease term the leased assets will betransferred to the Company at Nominal value which has no significant impact on measurement of lease liabilities.
1. The Company has entered into 4 nos. of lease agreements on BOO/ BOOT basis for Tankages facility and supply ofutilities at multiple refineries for a period ranging from 15-20 years. IOCL has sub leased the land for the construction ofthe plant. Lease will commence once plant is commissioned.
2. The Company has paid Advance Upfront Premium of H 19.70 crore to MSRDC for land for Retail outlets at Aurangabadand Mumbai for the period of 30 years. The land is yet to be handed over to Company and therefore the amount is lyingas Capital Advance and shall form part of ROU Assets once lease is commenced.
3. The Company has entered into lease agreement for sourcing e-locks from various vendors for a period of 3 years (withan option to extend at the option of IOCL) at rate ranging from H 1,200-1,650/month and for 1 vendor H 2,450/month. Asat March 31,2025, 4,111 no's are yet to be supplied. However, the same are low value items.
4. The Company has entered into lease agreement with Andhra Pradesh State Civil Supplies for land for 1 Retail Outletat Vizag for a period of 20 years at an monthly rental of H 20,000/- with an increment of 10% in every 3 years. Thepossession of land is not given and the matter is pending in the court.
5. The Company has entered into centralised lease agreement with M/s Trimble for rent payment of H373/month for VTSsoftware for POL trucks customised to IOCL requirement for a period of 5 years. As at March 31,2025, total 19,039 Nosare yet to be installed. However, payment is in the nature of variable lease payment.
6. The Company has entered into lease agreement with various vendors for VTS software of LPG trucks for a period of5 years at a rental ranging from H 108-256/month. As at March 31, 2025 a total of 14,020 nos. of VTS are yet to beinstalled. However, payment is in the nature of variable lease payment.
7. The Company has entered into lease agreement with M/s Seven Islands Shipping Ltd for hiring time charter vessels fora period of 2 years to be commenced from the month of Apr'2025.
8. The Company has entered into lease agreement for Supply, Installation and Maintenance of Dual Network ConnectivitySolution (SD-WAN Solutions) with Managed Services on rental basis for ROs for a period of 5 years on OPEX Model withmonthly rental of H 2,113/-. Out of selected RO's, commissioning is pending in 1,103 RO's. However, payment is in thenature of variable lease payment.
B. Contingent Liabilities
B.1 Claims against the Company not acknowledged as debt
Claims against the Company not acknowledged as debt amounting to H11,320.47 crore (2024: H8,441.23 crore) are as under:
B.1.1 H785.72 crore (2024: H137.41 crore) being the demands raised by the Central Excise /Customs/ Service Tax/ GST Authoritiesincluding interest of H541.83 crore (2024: H62.69 crore).
B.1.2 H39.84 crore (2024: H39.84 crore) in respect of demands for Entry Tax from State Governments including interest of H9.44crore (2024: H9.44 crore).
B.1.3 H756.89 crore (2024: H810.97 crore) being the demands raised by the VAT/ Sales Tax Authorities including interest of H265.89crore (2024: H268.93 crore).
B.1.4 H1,131. 11 crore (2024: H2,568.91 crore) in respect of Income Tax demands including interest of H109.38 crore(2024: H212.00 crore).
B.1.5 H8,386.00 crore (2024: H4,716.60 crore) including H4,072.39 crore (2024: H3,978.83 crore) on account of Projects for which suitshave been filed in the Courts or cases are lying with Arbitrator. This includes interest of H1,052.73 crore (2024: H188.67 crore).
B.1.6 H220.91 crore (2024: H167.50 crore) in respect of other claims including interest of H44.74 crore (2024: H74.88 crore).
The Company has not considered those disputed demands/claims as contingent liabilities, for which, the outflow of resources has
been considered as remote. The Company does not expect the outcome of these proceedings to have a materially adverse effect
on its financial position. Contingent liabilities in respect of joint operations are disclosed in Note 33B.
B.2.1 The Company has entered into Master Guarantee Agreement, on behalf of its subsidiaries viz. Indoil Global B.V. and IndoilMontney Ltd. for all of its payments and performance obligations under the various Project Agreements entered by thesubsidiaries with PETRONAS Carigali Canada B.V. and Progress Energy Canada Ltd. (now renamed as Petronas EnergyCanada Ltd.). The total amount sanctioned by the Board of Directors is CAD 3,924.76 million. The estimated amount ofsuch obligation (net of amount paid) as on 31st March 2025 is INR 2,818.95 crore - CAD 472.50 million (2024: INR 3,367.22crore - CAD 549.49 million). The sanctioned amount was reduced by CAD 1,462.00 million due to winding down of LNGPlant during 2017.
*B.2.2 The Company has issued Corporate Guarantee in favour of three beneficiaries i.e., Bolivarian Republic of Venezuela(Republic), The Corporation Venezolana del Petroleo S.A. and PeTroCarabobo S.A., on behalf of Indoil Netherlands B.V,Netherlands (an associate Company) to fulfil the associate Company's future obligations of payment of signature bonus /equity contribution / loan to the beneficiaries. The total amount sanctioned by the Board of Directors is USD 424 million. Theestimated amount of such obligation (net of amount paid) as on 31st March 2025 is H3,131.40 crore - USD 366.33 million(2024: H3,055.57 crore - USD 366.33 million).
*B.2.3 The Company has issued Corporate Guarantee, on behalf of IndianOil Adani Gas Private Limited (IOAGPL), to the extent ofobligations of later Company under Performance Bank Guarantee facility provided to IOAGPL by State Bank of India, CanaraBank, Bank of Baroda, Indian Bank, IndusInd Bank, Jammu and Kashmir Bank, Axis Bank and ICICI Bank. On 31st March, 2025,the Company's share of such obligation is estimated at H3,472.15 crore (2024: H3,472.15 crore).
*B.2.4 The Company has issued Parent Company Guarantee in favour of Abu Dhabi National Oil Company, on behalf of Urja BharatPte. Ltd., Singapore (a joint venture Company of Company's subsidiary i.e. IOCL Singapore Pte Ltd) to fulfill the joint ventureCompany's future obligations of payment and performance of Minimum Work Programme. The total amount sanctioned bythe Board of Directors is USD 149.94 Million. The estimated amount of such obligation (net of amount paid) is H564.08 crore- USD 65.99 million (2024: H144.30 crore - USD 17.30 million).
* The Company has sought an opinion from Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India on treatment of these as
Financial Guarantee. On receipt of the EAC opinion, appropriate effect will be given in the books of account, if required.
B.3.1 Pending decision of the Government, no liability could be determined and provided for in respect of additional compensation,if any, payable to the land owners and the Government for certain lands acquired.
B.3.2 As on 31.03.2025, Company has contingent liability of H1,452.03 crore (2024: H967.81 crore) towards custom duty for capitalgoods imported under Manufacturing & Other operation in Warehouse Regulation (MOOWR) scheme against which Companyhas executed and utilised bond amounting to H4,356.09 crore (2024: H2,903.43 crore) which represents three times of thecustom duty. The firm liability towards such custom duty shall be contingent upon conditions (Rate of custom duty/decisionof Company to export, etc) at the time of filing of ex-bond bill of entry at the time of disposal. In case the Company decidesto export such capital goods, the associated costs shall not be significant.
C. Commitments
C.1 Capital Commitments
Estimated amount of contracts remaining to be executed on Capital Account and thus not provided for is H41,684.17 crore
(2024: H61,085.44 crore) inclusive of taxes.
1) This does not include the impact of provision made on actuarial valuation of retirement benefit/ long term Schemes andprovision made during the period towards Post Retirement Benefits as the same are not separately ascertainable forindividual directors.
2) There were no Share Based Employee Benefits given to KMPs during the period.
3) In addition, whole-time Directors are also allowed the use of Corporation's car for private purposes up to 12,000 kms. perannum on a payment of ?2,000/- per mensem.
4) Remuneration and Loan balances for KMP is reported for the period of tenure as KMP
1) Shri Siddharth Shrikant Vaidya (Assistant Manager (Production), Indian Oil Corporation Limited): Son of Shri S M Vaidya whowas Key Managerial Personnel up to 31.08.2024.
2) Shri Vinayak Shrikant Vaidya (Production Engineer, Indian Oil Corporation Limited): Son of Shri S M Vaidya who was KeyManagerial Personnel up to 31.08.2024
B. Level 2 Hierarchy:
(i) Derivative Instruments at FVTPL: Replacement cost quoted by institutions for similar instruments by employing use ofmarket observable inputs.
(ii) Hedging Derivatives at FVTOCI: Replacement cost quoted by institutions for similar instruments by employing use ofmarket observable inputs.
(iii) Loans to employees: Discounting future cash flows using rates currently available for items on similar terms, credit riskand remaining maturities, adjusted for insignificant unobservable inputs specific to such loan like principal and interestrepayments are such that employee get more flexibility in repayment as per the respective loan schemes.
(iv) Non-Convertible Debentures & Loan from Odisha Government: Discounting future cash flows using rates currentlyavailable for items on similar terms, credit risk and remaining maturities (Excluding floating rate borrowings).
(i) Unquoted Equity Instruments: Fair values of the unquoted equity instruments have been estimated using MarketApproach or Income Approach of valuation techniques with the help of external valuer. Valuation as per Market Approachtechnique is determined by comparing the Company's accounting ratios with another Company's of the same natureand size which are considered to be significant to valuation, such as earnings, cash flow, book value, or sales of variousbusiness of the same nature. Valuation as per Income Approach technique is determined by discounting future cashflows to present value using a discount rate. These valuation requires management to use unobservable inputs in themodel, of which the significant unobservable inputs are disclosed in the tables below.
(ii) Non Convertible Redeemable Preference Shares: Fair value of Preference shares is estimated with the help of externalvaluer by discounting future cash flows. The valuation requires management to use unobservable inputs in the model,of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses arange of reasonably possible alternatives for those significant unobservable inputs and determines their impact on thetotal fair value.
(iii) PMUY Loan: Fair value of PMUY loans is estimated by discounting future cash flows using approximate interest ratesapplicable on loans given by Banks duly adjusted for significant use of unobservable inputs in estimating the cash flowscomprising of specific qualitative and quantitative factors like consumption pattern, assumption of subsidy rate etc.
The significant unobservable inputs used in fair value assessment categorised within Level 3 of the Fair Value Hierarchy
together with a quantitative sensitivity analysis as on March 31,2025 and March 31,2024 are shown below:
In the following cases, the Company has not recognised gains/losses in profit or loss on initial recognition of financial assets/financial liability, instead, such gains/losses are deferred and recognised as per the accounting policy mentioned below.
As per the terms of service, the Company has given long term loan to its employees at concessional interest rate. Transactionprice is not fair value because loans are not extended at market rates applicable to employees. Since implied benefit ison the basis of the services rendered by the employee, it is deferred and recognised as employee benefit expense overthe loan period.
The PMUY loan is the interest free loan given to PMUY beneficiaries towards cost of burner and 1st refill. The loan is interestfree and therefore transaction price is not at fair value. The difference between fair value and transaction price is accumulatedin Deferred expenses and amortised over the loan period on straight line basis in the Statement of Profit and Loss.
Financial Risk Factors
The Company's principal financial liabilities, other than derivatives, comprise Borrowings, trade and other payables, security deposits,employee liabilities and lease obligation. The main purpose of these financial liabilities is to finance the Company's operations andto provide guarantees to support its operations. The Company's principal financial assets include loans & advances, trade and otherreceivables, short-term deposits and cash / cash equivalents that derive directly from its operations. The Company also holds FVTOCIinvestments and enters into derivative transactions.
The Company is exposed to a number of different financial risks arising from natural business exposures as well as its use of financialinstruments including market risk relating to interest rate, commodity prices, foreign currency exchange rates and equity price, creditrisk and liquidity risk.
The Risk Management Commitee comprised of senior management oversees the management of these risks. The Company's seniormanagement is supported by a Risk Management Compliance Board that advises on financial risks and the appropriate financial riskgovernance framework for the Company. The Risk Management Committee provides assurance to the Board that the Company's risksare governed by appropriate policies and procedures and that risks are identified, measured and managed in accordance with theCompany's policies, risk objectives and risk appetite.
The Company's requirement of crude oil are managed through integrated function handled through its international trade andoptimization department. All derivative activities for risk management purposes are carried out by specialist teams that have theappropriate skills, experience and supervision. As per the Company's policy, derivatives contracts are taken only to hedge the variousrisks that the Company is exposed to and not for speculation purpose.
The Board of Directors oversee the risk management activities for managing each of these risks, which are summarised below:
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in marketprices. The major components of market risk are interest rate risk, foreign currency risk, commodity price risk and other pricerisk viz. equity shares etc. Financial instruments affected by market risk include Borrowings, Deposits, FVTOCI investments andderivative financial instruments.
The sensitivity analysis in the following sections relate to the position as at March 31,2025 and March 31,2024.
The analysis excludes the impact of movements in market variables on the carrying values of gratuity and other post-retirementobligations, provisions, and other non-financial assets and liabilities of foreign operations.
The Company is exposed to interest rate risk from the possibility that changes in interest rates will affect future cash flowsof a financial instrument, principally financial debt. The Company's exposure to the risk of changes in market interest ratesrelates primarily to the Company's long-term debt obligations with floating interest rates.
The Company manages to maintain a mix between fixed and floating rates for rupee and foreign currency loans, based onliquidity, availability of cost effective instruments and considering the market/ regulatory constraints etc. The Companyalso use interest rate swap contracts for managing the interest rate risk of floating interest rate debt. As at March 31, 2025approximately 37% of the Company's borrowings are at a fixed rate of interest (March 31,2024: 39%).
Pursuant to phasing out of USD LIBOR benchmark, the last date of its publication was 30th June 2023. Meanwhile, theCompany has completed the transition exercise of the existing USD LIBOR linked instruments to alternate benchmark.
The sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected, with allother variables held constant, on floating rate borrowings is as follows:
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes inforeign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to theCompany's operating activities (when revenue or expense is denominated in a foreign currency) and Borrowings.
The Company manages its foreign currency risk through combination of natural hedge, mandatory hedging and hedgingundertaken on occurence of pre-determined triggers. The hedging is mostly undertaken through forward contracts.
The Company has outstanding forward contract of H 2,634.68 crore as at March 31,2025 (March 31,2024: H 1,810.72 crore)which has been undertaken to hedge its exposure to borrowings and other financial liabilities.
The sensitivity to a reasonably possible change in USD/INR exchange rates, with all other variables held constant, the impacton the Company's profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives. The Company's exposure to foreign currency changes for all other currencies otherthan below is not material.
The effects of most exchange rate fluctuations are absorbed in business operating results which are offset by changing costcompetitiveness, lags in market adjustments to movements in rates to its other non-financial assets like inventory etc. Forthis reason, the total effect of exchange rate fluctuations is not identifiable separately in the Company's reported results.
The Company is exposed to various commodity price related risk such as Refinery Margins i.e. Differential between theprices of petroleum products & crude oil, Crude Oil Price fluctuation on accounts of inventory valuation fluctuation and crudeoil imports, etc. As per approved risk management policy, the Company can undertake refinery margin hedging, inventoryhedging and crude oil price hedging through swaps, options and futures in the OTC market as well as domestic exchangesto mitigate the risk within the approved limits.
The Company's investment in listed and non-listed equity securities, other than its investments in Joint Ventures/ Associatesand Subsidiaries, are susceptible to market price risk arising from uncertainties about future values of the investment securities.
At the reporting date, the exposure to unlisted equity securities at fair value was H5,274.23 crore. Sensitivity analysis of theseinvestments have been provided in Note 39.
The exposure to listed equity securities valued at fair value was H30,408.71 crore. An increase/ decrease of 5% in the shareprice could have an impact of approximately H1,520.44 crore on the OCI and equity attributable to the Company. Thesechanges would not have an effect on profit or loss.
The primary risks managed using derivative instruments are commodity price risk, foreign currency risk andinterest rate risk.
IndianOil buys crude and sells petroleum products linked to international benchmark prices and these benchmarkprices do not move in tandem. This exposes IndianOil to the risk of variation in refining margins which is managed bymargin hedging.
The risk of fall in refining margins of petroleum products in highly probable forecast sale transactions is hedged byundertaking crack spread forward contracts. The Company wants to protect the realization of margins and therefore tomitigate this risk, the Company is taking these forward contracts to hedge the margin on highly probable forecast salein future. Risk management activities are undertaken in OTC market i.e. these are the bilateral contracts with registeredcounterparties.
All these hedges are accounted for as cash flow hedges.
The Company is exposed to various foreign currency risks as explained in A.2 above. As per Company's ForeignCurrency & Interest Rate Risk Management Policy, the Company is required to fully hedge the short term foreigncurrency loans (other than revolving lines and PCFC loans) and at least 50% of the long term foreign currency loansbased on market conditions.
Apart from mandatory hedging of loans, the Company also undertakes foreign currency forward contracts for themanagement of currency purchase for repayment of crude/ product liabilities based on market conditions andrequirements. The above hedgings are undertaken through delivery based forward contracts.
The Company is exposed to interest rate risks on floating rate borrowings as explained in A.1 above. Company hedgesinterest rate risk by taking interest rate swaps as per Company's Interest Rate Risk Management Policy based onmarket conditions. The Company uses interest rate derivatives to hedge exposure to interest payments for floating rateborrowings denominated in foreign currencies.
Hedge Effectiveness
There is an economic relationship between the hedged items and the hedging instruments as the terms of the foreignexchange and commodity forward contracts match the terms of hedge items. The Company has established a hedgeratio of 1:1 for the hedging relationships as the underlying risk of the foreign exchange, interest rate and commodityforward contracts are identical to the hedged risk components. To test the hedge effectiveness, the Companycompares the changes in the fair value of the hedging instruments against the changes in fair value of the hedged itemsattributable to the hedged risks. In case of interest rate swaps, as the critical terms of the interest rate swap contractsand their corresponding hedged items are similar, the Company performs a qualitative assessment of effectiveness andit is expected that the value of the interest rate swap contracts and the value of the corresponding hedged items willsystematically change in opposite direction in response to movements in the underlying interest rates.
In case of commodity price risk, the Company has identified the following sources of ineffectiveness, which are notexpected to be material:
n Differences in the timing of the cash flows of the hedged items and the hedging instruments
n Different indexes linked to the hedged risk of the hedged items and hedging instruments
n The counterparties' credit risk differently impacting the fair value movements of the hedging instrumentsand hedged items
n Changes to the forecasted amount of cash flows of hedged items and hedging instruments
In case of foreign currency risk and interest rate risk, the main source of hedge ineffectiveness is the effect of thecounterparty and the Company's own credit risk on the fair value of hedge contracts, which is not reflected in the fairvalue of the hedged items. The effect of this is not expected to be material.
Customer credit risk is managed by each business unit subject to the Company's established policy, procedures and control relatingto customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard andindividual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitoredand any shipments to major customers are generally covered by Letters of Credit, Bank Guarantees or other forms of creditinsurance, wherever required.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large numberof minor receivables are grouped into homogenous groups and assessed for impairment collectively. The Company appliesSimplified approach for providing the expected credit losses on Trade Receivables as per the accounting policy of the Company.The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note10. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located inseveral jurisdictions and industries and operate in largely independent markets.
The Company's maximum exposure to credit risk for the components of the Balance Sheet at March 31,2025 and March 31,2024is the carrying amounts as provided in Note 4, 5, 6, 11 & 12. The Company applies General approach for providing the expectedcredit losses on these items as per the accounting policy of the Company.
Credit risk from balances with banks and financial institutions is managed by the Company's treasury department in accordancewith the Company's policy. Investments of surplus funds are made only with approved counterparties and within credit limitsassigned to each counterparty. Counterparty credit limits are approved by the Company's Board of Directors. The limits are set tominimise the concentration of risks and therefore mitigate financial loss through counterparty's potential failure to make payments.
The Company has given loans to PMUY (Pradhan Mantri Ujjwala Yojana) customers which are shown under Loans in Note-5.PMUY loans are given to provide clean cooking fuel to BPL families as per GOI scheme wherein free LPG connections are issued byOil Marketing Companies (OMCs) to the women belonging to the Below Poverty Line (BPL) households. As per the scheme, OMCsare providing an option for interest free loan towards cost of burner and 1st refill to PMUY consumers which is to be recovered fromthe subsidy amount payable to customer when such customers book refill.
In case of certain PMUY loans, the Company has determined that there is significant increase in the credit risk. The Companyconsiders the probability of default upon initial recognition of the loan and whether there has been a significant increase in creditrisk on an ongoing basis throughout each reporting period. It considers past experience and time elapsed since the last refill fordetermining probability of default on collective basis. The Company has categorised the PMUY loans wherein credit risk has increasedsignificantly under various categories considering the likelihood of default based on time gap since last refill. ECL is provided @70%(2024: @70%) in case of time gap since last refill is more than 6 months but not exceeding 12 months, @ 80% (2024: @ 80%) in caseof time gap since last refill is more than 12 months but not exceeding 18 months, @ 90% (2024: @ 90%) in case of time gap is morethan 18 months but not exceeding 24 months and @ 100% (2024: @100%) for those consumers who have not taken any refill morethan 24 months. ECL is provided for the loans where the refill is taken within last 6 months (2024: 6 months) based on experience ratioof more than 6 months (2024: 6 months) as above. The PMUY loans are classified as credit impaired as on reporting date consideringsignificant financial difficulty in case the customer has not taken any refill from past 24 months (2024: 24 months).
Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the samegeographical region, or have economic features that would cause their ability to meet contractual obligations to be similarlyaffected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company'sperformance to developments affecting a particular industry.
In order to avoid excessive concentrations of risk, the Company's policies and procedures include specific guidelines to focus onthe maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.
As Company has been rated investment grade by various domestic and international rating agencies, there has been norequirement of submitting any collateral for booking of derivative contracts. Company undertakes derivatives contract only withthose counterparties that have credit rating above the internally approved threshold rating. Accordingly, Company does not seekany collaterals from its counterparties.
The primary objective of the Company's capital management is to maximise the shareholder value. Capital includes issued equitycapital, share premium and all other equity reserves, attributable to the equity shareholders, for the purpose of the Company'scapital management.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and requirements. TheCompany determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. TheCompany may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares to maintain or adjustthe capital structure. The Company monitors capital using debt equity ratio, which is borrowings divided by Equity. The Company'sendeavour is to keep the debt equity ratio under 1:1.
Subsidies on sales of SKO (PDS) in India amounting to H 33.03 crore (2024: H 93.80 crore) and subsidies on sales of LPG(Domestic) to customers in Bhutan amounting to H 15.39 crore (2024: H 5.80 crore) have been reckoned as per the schemesnotified by Governments.
The Company has recognised H 31.01 crore (2024: H 37.62 crore) on export of notified goods under Merchandise Exports fromIndia Scheme (MEIS)/ Remission of Duties and Taxes on Exported Products (RoDTEP)/Duty Drawback scheme in the Statementof Profit and Loss as Revenue Grant.
As per Ministry of HRD & Skill development and Enterpreneurship, a portion of stipend and basic training cost for apprentices willbe reimbursed to employer by Government under National Apprenticeship Training Scheme (NATS) and National ApprenticeshipPromotion Scheme (NAPS), subject to prescribed threshold limit. The Company has recognised grant in respect of stipend paid toapprentices & Basic training cost under NATS & NAPS amounting to H 0.31 crore (2024: H 7.93 crore) as Revenue Grant.
During the year, the Company has received revenue grant of NIL (2024: H 0.47 crore) in respect of meeting out revenue expendituresuch as Manpower, Consumables, Travel & Contingency etc for research projects undertaken with various agencies.
The Company is getting incentive from Department of Renewable Energy, GOI for wind power generation of Electricity at therate of H 0.50 paise for per unit of power generated. The Company has received grant of H 0.01 crore during the current year(2024: H 1.46 crore).
Excise duty exemption of 50% of goods manufactured and cleared from north east refineries has been reckoned at full valuein revenue and on net basis in expenses under 'Excise Duty' (to the extent of duty paid). Financial impact for the current year isH 3,885.58 crore (2024: H 3,816.73 crore).
The Company has received grant in the form of interest free loans from Odisha Government for a period of 15 years.Theunamortized grant amount as at March 31, 2025 is H 3,100.61 crore (2024: H 2,901.21 crore). During the year, the Company hasrecognised H 273.26 crore (2024: H 241.15 crore) in the Statement of Profit and Loss as amortisation of grants.
Post Export EPCG grants are received in respect of Import duties paid on procurement of capital goods under Post Export EPCGScheme of Central Govt. which allows refund of Basic custom duty in the form of duty scripts upon fulfilment of an export obligation.During the year, the Company has recognized H 1.84 crore (2024: Nil) as Revenue Grant in the Statement of Profit & Loss.
The Company has received government grant from OIDB (Oil Industry Development Board) for strengthening distribution of PDSKerosene as per the directions of MoP&NG to be used in construction of 20KL underground Tank, Mechanical Dispensing Unitsand Barrel Shed. The unamortized capital grant amount as at March 31,2025 is H 0.20 crore (2024: H 0.31 crore). During the year,the Company has recognised H 0.11 crore (2024: H 0.15 crore) in Statement of Profit and Loss as amortisation of capital grants.
The Company has received grant in respect of Custom duty waiver on import on capital goods, Excise duty waiver and GST waiveron purchase of goods from local manufacturer in India under the certificate issued by Department of Scientific and IndustrialResearch (DSIR). The unamortized capital grant amount as at March 31,2025 is H 38.81 crore (2024: H 49.48 crore). The goods soimported or procured from local manufacturer shall not be transferred or sold for a period of five years from date of installation.
During the year, the Company has recognised H 10.67 crore (2024: H 11.92 crore) in the Statement of Profit and Loss as amortisationof capital grants. However, the scheme of GST concession on purchase of goods from local manufacturer under certificate issuedby DSIR has been discontinued from 18.07.2022 and accordingly no new grant has been recognised thereafter in this regard.
The Company has received capital grant from various agencies in respect of procurement/ setting up of Capital assets for researchprojects undertaken. The unamortized capital grant amount as at March 31, 2025 is H 66.68 crore (2024: H 7.64 crore). Duringthe year, the Company has recognised H 32.67 crore (2024: H 1.75 crore) in the Statement of Profit and Loss as amortisation ofcapital grants.
Entry Tax exemption received from Odisha Government for Paradip Refinery Project has been recognized as Capital Grant andgrossed up with the concerned Assets.The unamortized capital grant amount as at March 31, 2025 is H 84.22 crore (2024:H 89.55 crore). During the year, the Company has recognised H 5.33 crore (2024: H 5.34 crore) in the Statement of Profit and Lossas amortisation of capital grants.
Grant received from OIDB/CHT/USTDA for setting up units for Ethanol production from Refinery off gases/Ligncoellulosic Biomassat Panipat Refinery. The unamortized capital grant amount as at March 31, 2025 is H 308.93 crore (2024: H 305.42 crore). Duringthe year, the Company has recognised H 11.50 crore (2024: H 6.50 crore) in the Statement of Profit and Loss as amortisation ofcapital grants.
Grant received from OIDB for setting up of demonstration unit at Guwahati refinery with the Company's R&D developed IndaDeptGtechnology . The unamortized capital grant amount as at March 31,2025 is H 53.85 crore (2024: H 57.57 crore). During the year,the Company has recognised H 3.72 crore (2024: H 3.72 crore) in the Statement of Profit and Loss as amortisation of capital grants.
The Company has received capital grant in respect of interest subsidy on loans taken from OIDB. The unamortized capital grantamount as at March 31,2025 is H 9.78 crore (2024: H 10.30 crore). During the year, the Company has recognised H 0.52 crore (2024:H 0.52 crore) in the Statement of Profit and Loss as amortisation of capital grants.
The Company has received capital financial assistance from Ministry of New and Renewable Energy in respect of procurementand installation of Solar Panels for Power Generation.The unamortized capital grant amount as at March 31,2025 is H 3.19 crore(2024: H 3.38 crore). During the year, the Company has recognised H 0.19 crore (2024: H 0.19 crore) in the Statement of Profit andLoss as amortisation of capital grants.
The Company has received grant from Nepal Government by way of waiver of Local taxes on goods/services procured locally inNepal and Import Duty for goods/services imported into Nepal. The Company has recognised H 1.48 crore (2024: H 1.14 crore) inStatement of Profit & Loss. The unamortized balance is H 15.46 crore (2024: H 13.29 crore)
The Company had received grant from Ministry of Heavy Industries (MHI) for establishing and upgradation/deployment of EVCharging stations (EVCS) at ROs under Faster Adoption and Manufacturing of Electric Vehicles (FAME) India Scheme Phase-II inMarch 2023. Out of total sanctioned amount of H 389.27 crore, H 272.49 crore was received in advance and balance amount willbe received on commissioning of all EVCS. Since the work has not completed as on 31.03.2025, no amount is recognised in thestatement of Profit and loss during the year. The unamortized balance as at March 31, 2025 is H 389.17 crore (2024: H 389.28crore). During the year, the Company has recognised H 0.11 crore (2024: Nil) in the Statement of Profit and Loss as amortisation ofcapital grants.
The Company is in the business of oil and gas and it earns revenue primarily from sale of petroleum products, petrochemicals, Gas, E&Pand Others. Revenue is recognized when control of the goods and services is transferred to the customer.
Generally, Company enters into contract with customers:
a. On delivered basis in case of Retail Sales, LPG and Aviation.
b. On Ex-Marketing Installation as well as delivered basis in case of Lubes and Consumers.
c. On FOB or CIF basis depending on terms of contract in case of Export sales.
Majority of Company's sales are to retail category which are mostly on cash and carry basis. Company also execute supply to InstitutionalBusinesses(IB), Lubes, Aviation on credit which are for less than a year.
For maintaining uninterrupted supply of products, customers generally deposit amount in advance with the Company against whichorders for purchase of products are placed by the customers. Based on these orders, supply is maintained by the Company andrevenue is recognized when the goods are delivered to the customer by adjusting the advance from customers. Revenue in casesof performance obligation related to delivered sales are recognized in time based on delivery of identified and actual goods and nosignificant judgement is involved.
The Company also extends volume/slab based discounts to its customers on contract to contract basis for upliftment of productsand it is adjusted in revenue as per the terms of the contract. Company also runs loyalty programmes and incentive schemes for itsretail and bulk customers. Loyalty points are generated and accumulated by the customers on doing transactions at Company's outletwhich can be redeemed subsequently for fuel purchases from Company outlets. Revenue is recognized net of these loyalty points andincentive schemes.
Besides this, though not significant, the Company also undertakes construction contracts on deposit basis. Revenue is recognized forthese contracts overtime using input based on cost incurred. Similarly non-refundable deposits received from Retail Outlets (ROs) arerecognized as revenue over time on proportionate basis.
1 In order to provide clean cooking fuel to BPL families, Government has approved "Pradhan Mantri Ujjwala Yojana (PMUY)” schemewhere free LPG connections are issued by Oil Marketing Companies (OMCs) to the women belonging to the Below Poverty Line(BPL) households as per SECC -2011 (Rural) database. The scheme was launched on May 1,2016. As per the scheme, the initialcost towards connection charges (Refundable deposit) would be borne by the Central Government for each card holder. Few StateGovernments have also extended this scheme to other beneficiaries. As per the scheme, OMCs would provide an option for EMI/Loans towards cost of burner and 1st refill to the PMUY consumers. The loan amount is to be recovered from the subsidy amountpayable by the government to the customers on each refill sale. During the year, discounting of the loan has been done based onassumption of average refills in a year and average subsidy rate per cylinder under respective range of subsidy buckets.
The amount outstanding as at 31st March 2025 towards PMUY Cash Assistance claim from Central Government is H62.74 crore(2024: H279.69 crore) and loan to PMUY consumers is H2,180.76 crore (2024: H2,367.12 crore) (net of recovery through subsidy).Against the above loan, a provision for doubtful loans amounting to H1,226.99 crore (H1,159.40 crore) has been created as at 31stMarch 2025 against the beneficiaries who have not taken any refill for more than 6 months based on expected credit loss (ECL)model and applying experience factor based on experience ratio of doubtful provision on more than 6 months to the loans in lessthan 6 months category. (Also refer Credit Risk under Note 40)
The Company has remeasured the gross carrying amount of PMUY loan as at Balance Sheet date based on revised estimatedfuture contractual cash flows resulting in addition in PMUY loans by H107.24 crore (2024: Addition by H336.61 crore) which hasbeen accounted in Statement of Profit and Loss in Note -24 under the head "Other Income".
2 During the current financial year, the Company has reversed Provision created in the earlier years to the tune of ?1,838.02 crore(comprising VAT ITC amount of ?1,203.72 crore and interest amount of ?634.30 crore), consequent to the favourable orders fromHon'ble Supreme Court and Gujarat VAT Tribunal on the subject of VAT Input Tax Credit under Gujarat VAT Act 2005. Accordingly,the pre-deposit has been reclassified from "Deposits” (Note-18) to "Claims Recoverable” (Note-8). The reversal of provision hasbeen treated as "Exceptional Item” considering its nature and size.
3 The Principal Controller of Defence Accounts (PCDA) and Indian Air Force have deducted H621.25 crore and H68.78 crorerespectively from the regular supplies on account of the price differential on supplies made between January 2022 to March 2023.The Company has been contesting this claim directly and also through the Ministry of Petroleum and Natural Gas (MoPNG). Hencethe same has been shown under disputed trade receivables considered good (Note-10). The matter is still under deliberation, andthe financial impact, if any, will be addressed once the issue is resolved.
4 Purchase of crude oil from some small oilfields has been accounted for provisionally pending finalisation of agreements withrespective parties. The management estimates that no significant adjustments will arise upon finalisation of these agreements.
5 "The Retired Officers Welfare Society consisting of employees retired from the Company and other individual retired employeesfiled a writ petition in Delhi High Court in the year 2017 that the manner in which the Self Contributory pension scheme titledas Superannuation Benefits Fund on defined benefit basis, setup in the year 1987, has been retrospectively terminated in theyear 2011, with effect from 01.01.2007, by the Company is arbitrary. In April 2025, the Hon'ble Delhi High Court passed an orderdirecting that the monthly pension of petitioners be re-fixed under a Defined Benefit Scheme and the arrears be paid along withinterest. Impact of the Court order is not ascertainable in view of the varied possible scenarios.
Based on external legal opinion, prima-facie the Company is not responsible for the self-contributory & self-sustaining schemeprepared, managed and run by a separate independent and legal entity being the Trust. The Company is in the process of filing anappeal along with the stay application against the said order. The management is confident that no liability shall devolve on theCompany and hence no provision is required.
6 There are no significant subsequent events that would require adjustments or disclosures in the Financial Statements as atBalance Sheet date, other than those disclosed above.
7 Figures of the previous year have been regrouped wherever necessary, to conform to current period presentation, Major itemregrouped is as under:
- For and on Behalf of Board of Directors -
Sd/- Sd/- Sd/-
A S Sahney Anuj Jain Kamal Kumar Gwalani
Chairman Director (Finance) Company Secretary
DIN-10652030 DIN-10310088 ACS-13737
As per our attached Report of even date
For KHANDELWAL JAIN & CO For K G SOMANI & CO LLP For MKPS & ASSOCIATES LLP For KOMANDOOR & CO LLP
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
Firm Regn. No. 105049W Firm Regn. No. 006591N/ Firm Regn. No. 302014E/ Firm Regn. No. 001420S/
N500377 W101061 S200034
Sd/- Sd/- Sd/- Sd/-
Naveen Jain Amber Jaiswal Narendra Khandal Nagendranadh Tadikonda
Partner Partner Partner Partner
M. No. 511596 M. No. 550715 M. No. 065025 M. No. 226246
Place: New DelhiDated: 30th April 2025