Latin Manharlal Chat
BSE Prices delayed by 5 minutes...
     Prices as on Dec 03, 2021     
  ABB India 2079.2 [ -1.61% ]
  ACC 2260.4 [ -0.10% ]
  Axis Bank Ltd. 672.95 [ -0.46% ]
  Bajaj Auto Ltd. 3286.95 [ -1.18% ]
  Bank of Baroda 88.55 [ 0.51% ]
  Bharti Airtel 718.35 [ -1.88% ]
  Bharat Heavy Ele 60.5 [ -0.08% ]
  Britannia Ind. 3555.8 [ -0.63% ]
  Cipla 911.85 [ -1.04% ]
  Coal India 159.8 [ 0.35% ]
  Colgate Palm. 1452.05 [ 0.79% ]
  Dabur India 581.1 [ 0.43% ]
  DLF Ltd. 386.3 [ 0.35% ]
  Dr. Reddy's Labs 4598 [ -1.38% ]
  GAIL (India) 132.25 [ 0.34% ]
  Grasim Inds. 1702.6 [ -1.31% ]
  HCL Technologies 1171 [ -1.16% ]
  HDFC 2771 [ -1.36% ]
  HDFC Bank 1513.1 [ -0.82% ]
  Hero MotoCorp 2462.85 [ -0.29% ]
  Hindalco Indus. 424.95 [ -1.63% ]
  ICICI Bank 716.6 [ -0.82% ]
  IDFC L 51.5 [ -0.58% ]
  IndusInd Bank 951.25 [ 0.61% ]
  Infosys 1734.9 [ -0.76% ]
  ITC Ltd. 221.7 [ -1.66% ]
  Jindal St & Pwr 359.4 [ 1.63% ]
  L&T 1801.85 [ 0.72% ]
  Lupin Ltd. 873.1 [ -0.30% ]
  Mahi. & Mahi 836.8 [ -1.43% ]
  MTNL 18.9 [ 0.00% ]
  Nestle India 19305.4 [ -1.02% ]
  NIIT Ltd. 401.55 [ -1.29% ]
  NMDC Ltd. 146.15 [ 3.32% ]
  NTPC 127.15 [ -1.28% ]
  ONGC 145.8 [ 1.29% ]
  Punj. NationlBak 38.5 [ 0.00% ]
  Power Grid Corpo 206 [ -4.03% ]
  Reliance Inds. 2408.15 [ -3.05% ]
  SBI 473.2 [ -0.81% ]
  Vedanta 337.25 [ -0.25% ]
  Shipping Corpn. 153.7 [ -2.20% ]
  Sun Pharma. 751.8 [ -1.87% ]
  Tata Chemicals 910 [ 1.08% ]
  Tata Motors Ltd. 480 [ 0.21% ]
  Tata Steel 1118 [ 0.47% ]
  Tata Power Co. 225.6 [ -0.33% ]
  Tech Mahindra 1592.9 [ -2.26% ]
  United Spirits 894.95 [ 0.82% ]
  Wipro 640.4 [ -0.98% ]

Company Information

Home » Market » Company Information

Indian Oil Corporation Ltd.

Dec 03
121.90 +1.35 (+ 1.12 %)
 
VOLUME : 856591
Prev. Close 120.55
Open Price 121.85
TODAY'S LOW / HIGH
120.75
 
 
 
122.90
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
84.20
 
 
 
141.75
Dec 03
122.20 +1.55 (+ 1.28 %)
 
VOLUME : 9910726
Prev. Close 120.65
Open Price 121.00
TODAY'S LOW / HIGH
120.75
 
 
 
122.85
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
84.20
 
 
 
141.50
Company Information Menu

Search Company

Market Cap. ( ₹ ) 115041.02 Cr. P/BV 1.03 Book Value ( ₹ ) 119.05
52 Week High/Low ( ₹ ) 142/84 FV/ML 10/1 P/E(X) 5.32
Bookclosure 12/11/2021 TTM EPS ( ₹ ) 27.30 Div Yield (%) 9.82
NOTES TO ACCOUNTS
You can view the entire text of Notes to accounts of the company for the latest year
Year End :2021-03 

A. i) Freehold Land includes J 1.61 Crore (2020: H 22.38 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 been acquired 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 J 1.18 Crore is continued to be included in Freehold land.

iii) Freehold Land includes J 41.75 Crore of compensation paid in respect of land at Panipat Refinery as per District and High court orders of earlier dates, which was later quashed by subsequent High Court order dated 18.12.2019. Since, the process of recovery, for compensation already paid, has been stayed by Honble Supreme Court vide order dated 21.09.2020, necessary adjustment shall be made in the cost of the land upon actual recovery, if any.

B. i) Buildings include J 0.01 Crore (2020: H 0.01 Crore) towards value of 1605 (2020: 1605) 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 J 4,219.39 Crore (2020: H 3,547.27 Crore) and net block amounting to J 2,390.91 Crore (2020: H 2,072.21 Crore).

C. During the year J 1,586.03 Crore (2020: H 1,296.54 Crore) has been availed as GST ITC out of capital expenditure on CWIP/ assets.

D. Depreciation and amortisation for the year includes J 25.86 Crore (2020: H 37.64 Crore) relating to construction period expenses shown in Note-2.2

E. Railways have claimed transfer of ownership in respect of certain assets provided by the Company at railway premises which has not been accepted by the Company and continue to be part of Property, Plant & Equipment of the Company, WDV of such assets is J 49.28 Crore (2020: H 51.14 Crore). This includes WDV of assets worth J 17.91 Crore (2020: H 7.82 Crore) which are being used by other oil companies based on award of tender by Railways. However, considering the right on the assets and future commercial interest of the company, these assets are continued to be reflected as Property, Plant & Equipment.

F. Land and Buildings (Including ROU Asset) include J 1,282.78 Crore (2020: H 1,020.43 Crore) in respect of which Title/ Lease Deeds are pending for execution or renewal.

G. For details regarding hypothecation/ pledge of assets, refer Note-16.

H. In accordance with the requirements prescribed under Schedule II to Companies Act, 2013, the Company has adopted useful lives as prescribed in that schedule except in some cases as per point no. 2.4.1 of significant accounting policies (Note-1).

I. The estimated residual value of movable assets provided at the residence of employees for official use under various approved schemes has been revised from 1% of original cost to Nil effective from April, 01, 2020. The impact on account of above change is increase in depreciation by J 1.57 Crore during current year. Overall future impact on the assets existing as on 31.03.2021 will be J 2.58 Crore by way of increase in depreciation over the remaining useful life of these assets, which will be offset by profit/ loss on sale of assets.

J. Leasehold Land (included in ROU Assets) includes an amount of J 716.47 Crore (2020: H 716.41 Crore) for Land Development Cost.

Nature and Purpose of Reserves

A. Retained Earnings

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 and other purposes (like declaring Dividend etc.) as per the approval of Board Of Directors. It includes the remeasurement of defined benefit plan as per actuarial valuations which will not be re-classified to statement of profit and loss in subsequent periods.

B. Bond Redemption Reserve

As per the Companies Act 2013, a Bond Redemption Reserve was required to be created for all bonds/ debentures issued by the company at a specified percentage. This reserve is created out of appropriation of profits over the tenure of bonds and will be transferred back to general reserve on repayment of bonds for which it is created.

C. Capital Redemption Reserve

As per the Companies Act 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve. Utilisation of this reserve is governed by the provisions of the Companies Act 2013.

D. Capital Reserve

Capital Reserve was created through business combinations and shall be utilised as per the provisions of the Companies Act 2013.

E. Insurance Reserve

Insurance Reserve is created by the company with the approval of Board of Directors to mitigate risk of loss of assets not insured with external insurance agencies. H 20.00 Crore is appropriated by the company every year to this reserve. The reserve is utilised to mitigate actual losses by way of net appropriation in case any uninsured loss is incurred. Amount of H 8.95 Crore (2020 : NIL) has been utilised for recoupment of uninsured losses.

F. Export Profit Reserve

Amount set aside out of profits from exports for availing income tax benefits u/s 80HHC of the Income Tax Act, 1961 for the Assessments Years 1986-87 to 1988-89. Creation of reserve for claiming deduction u/s 80HHC was dispensed from AY 198990 onwards. In view of settlement of tax dispute with respect to claim under Section 80HHC, Export profit reserve created in earlier year is no longer required and therefore the balance lying has been transfered to General Reserve.

G. Corporate Social Responsibility Reserve

Corporate Social Responsibility (CSR) Reserve was being created till FY 2019-20 for meeting expenses relating to CSR activities in line with CSR policy of the Company. Pursuant to the recent amendments in Companies Act, 2013 & CSR Rules (January 22, 2021), entire CSR amount required to be spent in a financial year is to be recorded as expenditure in the financial statements. CSR expenditure is being recognised by Company as expense in the statement of profit and loss as and when such expenditure is incurred. However, at the end of the financial year, liability is created for any unspent amount while asset is created for the overspent amount.

H. Foreign Currency Monetary Item Translation Difference Account

This reserve is created to accumulate and amortise exchange fluctuations on Long-Term Monetary Items (other than those related to depreciable PP&E) over the remaining life of these items. This is as per the transition exemption taken by the company at the time of implementation of Ind-AS wherein the company has chosen to continue the old GAAP practice for items upto 31.03.2016.

I. Fair value of Equity Instruments

This reserve represents the cumulative effect of fair value fluctuations of investments made by the company in equity instruments of 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 re-classified to the statement of profit and loss in subsequent periods.

J. Fair value of Debt Instruments

This reserve represents the cumulative effect of fair value fluctuations in debt investments made by the company which are classified as available for sale investments. The cumulative gain or loss arising on such changes are recognised through Other Comprehensive Income (OCI) and accumulated under this reserve. This amount will be re-classified to the statement of profit and loss in subsequent periods on disposal of respective instruments.

K. Cash Flow Hedge Reserve

The cash flow hedge reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on such changes are recognised through Other Comprehensive Income (OCI) and accumulated under this reserve. Such gains or losses will be reclassified to statement of profit and loss in the period in which the hedged item occurs/ affects the statement of profit and loss.

#App[ication has been submitted to RoC Ahmedabad on December 30, 2020 for striking-off the Company's name from the ROC's Register.

@ Liquidator has been appointed for winding up of Company w.e.f August 30, 2018.

@@ IndianOil has exited the Joint Venture by selling its entire stake in IPPCL to SCION Exports Private Limited on March 5, 2021.

@@@ The Company is under winding up process and the appointed liquidator has submitted his report to the official liquidator who is still to submit its report to Tribunal for winding up of the company.

## IndianOil has exited the Joint Venture, IndianOil Ruchi Biofuels LLP (M/s IORB) by giving notice of its exit from the LLP to the other JV partner viz. Ruchi Soya Industries Limited (M/s Ruchi) as well as to the LLP on December 26, 2018 stating that it will exit the LLP w.e.f. January 25, 2019. The time frame for completing exit formalities by M/s. Ruchi by filing requisite forms with ROC was within 30 days of notice expiry period (i.e., by February 24, 2019) but the same is still pending and IndianOil name is appearing on ROC website as Partner in the said LLP. M/s Ruchi was under Corporate Insolvency Resolution Process and has been taken over by Patanjali Ayurveda Limited. All necessary documents have been provided to M/s Ruchi for completing formalities relating to exit of IndianOil from IORB LLP.

Notes:

1. Ujjwala Plus Foundation is a joint venture of IOCL, BPCL and HPCL with fund contribution in the ratio of 50:25:25 which was incorporated as a limited by guarantee Company (without share capital) under section 8 of Companies Act, 2013.

2. IOC Phinergy Pvt. Limited is a joint venture of IOCL and Phinergy Limited, Israel and was incorporated on 19th February,2021 having shareholding in the ratio of 50:50 for development of indigenous batteries using locally available Aluminum to boost India's pursuit of e-mobility.

A. Exploration License expired on October 7, 2015. Consortium has requested Directorate General of Hydrocarbon (DGH) for Appraisal phase, however vide letter dated March 6, 2019, it was opined to carry out Exploration activity instead of Appraisal work. Accordingly, Operator requested DGH for extension of exploration period. Response from DGH is awaited.

B. Blocks relinquished during the year 2020-21 vide approval dated November 27, 2020.

C. The project 's exploration period ended on 24 June 2009. The contractual arrangement with respect to development of the block could not be finalised so far with Iranian Authorities.

D. Under Force Majeure since May 20, 2014

E. Members in Petroleum India International (AOP) are HPCL, BPCL, EIL, IOCL, CPCL, ONGC, OIL and Reliance Industries Ltd. During the current financial year, final communication is received from PII for bringing an end to the MOU (entered on 01/03/1986) vide letter dated March 31, 2021 as all the balance activities facilitating the dissolution mentioned in termination agreement dated March 18, 2020 for dissolution of AOP is completed.

A. Defined Contribution Plans- General Description

Provident Fund (EPS-95)*

During the year, the company has recognised J 32.68 Crore (2020: H 34.89 Crore) as contribution to EPS-95 in the Statement of Profit and Loss/ CWIP (included in Contribution to Provident and Other Funds in Note - 27/ Construction period expenses in Note-2.2).

Pension Scheme*

During the year, the company has recognised J 449.83 Crore (2020: H 312.3 Crore) towards Defined Contributory Employees Pension Scheme (including contribution in corporate National Pension System) in the Statement of Profit and Loss/ CWIP (included in Contribution to Provident and Other Funds in Note - 27/ Construction period expenses in Note-2.2).

B. Defined Benefit Plans- General Description Provident Fund:*

The Company's contribution to the Provident Fund is remitted to separate provident fund trusts established for this purpose based on a fixed percentage of the eligible employee's salary and charged to the Statement of Profit and Loss. Shortfall, if any, in the fund assets, based on the Government specified minimum rate of return, will be made good by the Company. The Company has three Provident Funds maintained by respective PF Trusts in respect of which actuarial valuation is carried out and J 132.02 Crore (2020: H 130.24 Crore) has been provided by the company for current and future interest shortfall/ losses of PF trusts beyond available surplus at respective trust level.

Gratuity:*

Each employee rendering continuous service of 5 years or more is entitled to receive gratuity amount based on completed tenure of service subject to maximum of H 0.20 Crore at the time of separation from the company. Besides, the ceiling of gratuity increases by 25% whenever IDA rises by 50% with reference to January 01, 2017.

Post Retirement Medical Benefit Facility (PRMBF):*

PRMBF provides medical coverage to retired employees and their eligible dependant family members.

Resettlement Benefit:

Resettlement benefit is allowed to employees to facilitate them to settle down upon retirement.

Ex gratia Scheme:

Ex-gratia is payable to those employees who have retired before January 01, 2007 and either not drawing pension from superannuation benefit fund (as they superannuated prior to January 01, 1987, i.e. introduction of superannuation benefit fund scheme in IndianOil) or are drawing a pension lower than the ex gratia fixed for a Grade (in such case differential amount between pension 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 for compensation under the said Act. Besides, a lumpsum monetary compensation equivalent to 100 months' Pay (BP DA) is paid in the event of an employee suffering death or permanent total disablement due to an accident arising out of and in the course of his employment.

Felicitation of Retired Employees:

The company has a scheme to felicitate retired employees on attaining different age milestones with a token lumpsum amount.

* As per the DPE Guidelines on Pay Revision, the company can contribute upto 30% of Basic Pay plus Dearness Allowance towards Provident Fund, Gratuity, Post-Retirement Medical Benefits (PRMB) and Pension of its employees. The superannuation benefits expenditure charged to Statement of Profit and Loss / Other Comprehensive Income has been limited to 30% of Basic pay plus Dearness Allowance and the balance amount is shown as recoverable advance from the company's contribution towards superannuation benefits including pension schemes.

Accordingly, as per the actuarial valuation of Gratuity and PRMB, H 369.01 Crore was charged to the Statement of Profit and Loss, H (-) 28.87 Crore has been adjusted in Other Comprehensive income during the year and H 648.80 Crore (i.e. H 214.24 Crore and H 434.56 Crore towards Gratuity and PRMBF respectively) has been shown as recoverable advance. This advance amount is included in Advance to Employee Benefits Trust / Funds of H 870.53 Crore in Note 6.

C. Other Long-Term Employee Benefits - General Description Leave Encashment:

Each employee is entitled to get 8 earned leaves for each completed quarter of service. Encashment of earned leaves is allowed during service leaving a minimum balance of 15 days subject to maximum accumulation of 300 days. In addition, each employee is entitled to get 5 sick leaves (in lieu of 10 HPL) at the end of every six months. The entire accumulation is permitted for encashment only at the time of retirement. DPE had clarified earlier that sick leave cannot be encashed, though Earned Leave (EL) and Half Pay Leave (HPL) could be considered for encashment on retirement subject to the overall limit of 300 days. MOP&NG 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 by the Government and keeping in view operational complications and service agreements the company had requested concerned authorities to reconsider the matter. Subsequently, based on the recommendation of the 3rd PRC, DPE in its guidelines on pay revision, effective from January 01, 2017 has inter-alia allowed CPSEs to frame their own leave rules considering operational necessities and subject to conditions set therein. The requisite conditions are fully met by the company.

Long Service Award:

On completion of specified period of service with the company and also at the time of retirement, employees are rewarded with amounts based on the length of service completed. It is a mode of recognising long years of loyalty and faithful service in line with Bureau of Public Enterprises (currently DPE) advice vide its DO No. 7(3)/79-BPE (GM.I) dated February 14, 1983. On receipt of communication from MoPNG advising us that the issue of Long Service Award has been made into an audit para in the Annual Report of CAG of 2019, the Corporation has been clarifying its position to MoP&NG individually as well as on industry basis as

Note - 35 : EMPLOYEE BENEFITS FOR THE YEAR ENDED ON MARCH 31, 2021 (Contd..)

the unions under the ID Act as well as with the approval of the Board in line with the DPE's advice of 1983. The matter is being pursued with MOP&NG for resolution. Pending this the provision is in line with Board approved policy.

The amount provided during the year on this account is J 18.49 Crore (2020: H 28.4 Crore) and the payments made to employees during the year is J 25.33 Crore (2020: H 26.28 Crore). The actuarial liability of H 182.36 Crore in this respect as on March 31, 2021 is included under "Provision for Employees Benefit” in "Note 18 - Provisions”.

Leave Fare Allowance (LFA) / Leave Travel Concession (LTC):

LFA/ LTC is allowed once in a period of two calendar years (viz. two yearly block).

D. The summarised position of various Defined Benefit Plans recognised in the Statement of Profit & Loss, Balance Sheet and Other Comprehensive Income are as under:

(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 and buildings for the purpose of its plants, facilities, offices, retail outlet etc., storage tankages facility for storing petroleum products, time charter arrangements for coastal transportation of crude and petroleum products, transportation agreement for dedicated tank trucks for road transportation of petroleum products, handling arrangement with CFA for providing dedicated storage facility and handling lubes, supply of utilities like Hydrogen, Oxygen, Nitrogen and Water, and port facilities among others.

There are no significant sale and lease back transactions and lease agreements entered by the Company do not contain any material restrictions or covenants imposed by the lessor upto the current reporting period.

Details of significant leases entered by the Company (including in substance leases) are as under;

1. BOOT Agreement in respect of Tankages facility for a period of 15 years. Lessor will transfer ownership to IOCL after 15 years at Nil value.

2. BOOT Agreement in respect of Water Intake facility for a period of 25 years. Lessor will transfer ownership to IOCL after 25 years at H 0.01 Crore.

3. Leasehold lands from government for the purpose of plants, facilities and offices for the period 30 to 90 years.

4. Agreements with vessel owners for hiring of vessels for various tenures, these are classified as Transport Equipments.

5. BOO agreement for supply of oxygen and nitrogen at Panipat Refinery. The land is owned by IOCL and the plant is being operated by contractor for supply of oxygen and nitrogen to IOCL.

6. BOO Agreement for leasing of Nitrogen & Hydrogen Plant at Paradip for 15 years .

7. BOOT Agreement for leasing of Quality Control Lab at Paradip for 10 years. Lessor will transfer the Assets after 10 years at H 0.01 Crore.

8. Arrangements with Gujarat Adani Port Limited related to port facilities at Gujarat for a period of 25 years and 11 months.

9. Arrangement for lease of land for operating Retail Outlets for sale of Petroleum products, setting up terminals/Bottling plant/Lube Blending plant for storing petroleum products/bottling LPG/Manufacturing Lubes respectively.

10. CFA handling arrangement with CFAs for providing dedicated storage facility for handling lubes.

11. Arrangements with Tank truck operators for providing dedicated tank trucks for transportation of company's petroleum products.

12. Arrangements for dedicated time charter vessels for coastal transportation of Company's petroleum products.

13. Arrangement for dedicated storage tanks for storing Company's petroleum products at various locations.

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.

Details of items of future cash outflows which the Company is exposed as lessee but are not reflected in the measurement of 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 although not paid at the commencement date. As per general industry practice, the Company incurs various variable lease payments which are not based any index or rate (variable based on kms covered or % of sales etc..) and are recognised in profit or loss and not included in the measurement of lease liability. Details of some of the arrangements entered by the Company which contain variable lease payments are as under;

1. Transportation arrangement based on number of kms covered for dedicated tank trucks with different operators for road 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. DG Set charges based on usage.

(ii) Extension and Termination Options

The Company lease arrangements includes extension options only to provide operational flexibility. Company assesses at every lease commencement whether it is reasonably certain to exercise the extension options and further reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant change in circumstances within its control. However, where Company has the sole discretion to extend the contract such lease term is included for the purpose of calculation of lease liabilities.

The Company has the sole discretion to terminate the lease in case of lease agreement for Retail Outlets. However, Company is reasonably certain not to exercise the option in view of significant improvement and prominent importance of Retail to the entity's operations. Accordingly, such lease term without any effect of termination is considered for the purpose of calculation of lease liabilities.

(iii) Residual Value Guarantees

The Company have entered into various BOOT agreements wherein at the end of lease term the leased assets will be transferred to the company at Nominal value which has no significant impact on measurement of lease liabilities.

(iv) Committed leases which are yet to commence

1. The Company has entered into lease agreement on BOO basis for supply of oxygen and nitrogen gas to IOCL Ethylene Glycol Project at Paradip Refinery for a period of 20 years. IOCL has sub leased the land for the construction of the plant. Lease will commence once plant is commissioned.

2. The Company has entered into lease agreement with VSAT providers (Highes,Nelco and Airtel) for VSAT equipment at H 1175/ month upto Sep/Oct 2024 for subleasing to Retail outlet to ensure seamless connectivity of automated and online data from them. Out of total contracts, 499 no's are pending as at March 31, 2021. However, payment is in the nature of variable lease payment.

3. Advance upfront premium is paid to Greater Noida Developement Authority for leasing of land for the period of 90 years for New Retail Outlet of H 7.58 Crore at Greater Noida. The agreement is yet to be executed and therefore the amount is lying as Capital advance and shall form part of ROU once lease is commenced.

4. The Company has entered into lease agreement for 1 Nos of Retail Outlet at Rajkot for a period of 20 years at an annual rental of H 4,20,000/- with an increment of 10% in every 5 years. Lease for such case will commence once RO is commisioned.

5. The Company has entered into lease agreement with various lessors for 3 no's of Retail outlet at Ahmedabad for a period of 19 years 11 months at an annual rental of H 90,000/-, H 1,08,000/-, H 2,40,000/- respectively with an increment of 10% in every 5 years. Leases for all such cases will commence once RO is commissioned.

6. The Company has entered into lease agreement for providing e-locks from various vendors for a period of 3 years (with an option to extend at the option of IOCL) at rate ranging from H 1050-1300/month and for 1 vendor H 2,450/-month. As at March 31, 2021, 8897 no's are yet to be supplied. However, the same are low value items.

7. The Company has entered into lease agreement with Andhra Pradesh State Civil Supplies for 1 Nos of Retail Outlet at Vizag for a period of 20 years at an monthly rental of H 20,000/- with an increment of 10% in every 3 years. The possession of land is not given and the matter is pending in the court.

8. The Company has entered into centralised lease agreement with M/s Trimble for rent payment of H 373/month for VTS software for POL trucks customised to IOCL requirement for a period of 5 years. As at March 31, 2021 total 1776 Nos are yet to be installed. However, payment is in the nature of variable lease payment.

9. The Company has entered into lease agreement with M/s Geovista for VTS software for 2800 Nos of LPG trucks for a period of 5 years. As at March 31, 2021 lease pending to be commence for all 2800 Nos.

(b) As Lessor

(ii) Finance Lease

The Company has entered into the following material finance lease arrangements:

(i) The Company has entered into Lease Agreement with Indian Railways in respect of BTPN Tank Wagons for a minimum period of 20 years. The lease rentals from the date of formation of rake are @ 16% for the first 10 years and thereafter at the nominal rate of 1% of the cost.

(ii) The Company has subleased Telematics Equipments to its Fleet Customers. IOCL has classified the sub lease as a finance lease, because the sub-lease is for the whole of the remaining term of the head lease.

(iii) The Company has entered into sublease arrangement of Office Space to PCRA for a period of 3 years. The same has been classified as finance lease as the sub-lease is for the whole of the remaining term of the head lease.

(iv) The Company has entered into arrangement with Chandigarh administration for subleasing LPG Godowns to LPG Distributors for a period of 15 years. The same has been classified as finance lease as the sub-lease is for the whole of the remaining term of the head lease.

(v) The Company has entered into a lease agreement with Indian Synthetic Rubber Private Limited in which the Company has leased out land for one time upfront payment of H 16.65 Crore

(vi) The Company has subleased certain Office Premises to IHB Private Limited.

B. Contingent Liabilities

B.1 Claims against the Company not acknowledged as debt

Claims against the Company not acknowledged as debt amounting to J 8,069.65 Crore (2020: H 8,862.31 Crore) are as under:

B.1.1 J 49.15 Crore (2020: H 48.02 Crore) being the demands raised by the Central Excise /Customs/ Service Tax Authorities including interest of J 22.43 Crore (2020: H 21.31 Crore.)

B.1.2 J 42.81 Crore (2020: H 52.39 Crore) in respect of demands for Entry Tax from State Governments including interest of J 8.61 Crore (2020: H 11.69 Crore).

B.1.3 J 2,033.87 Crore (2020: H 2,027.91 Crore) being the demands raised by the VAT/ Sales Tax Authorities including interest of J 848.96 Crore (2020: H 841.17 Crore).

B.1.4 J 1,812.86 Crore (2020: H 2,589.45 Crore) in respect of Income Tax demands including interest of J 80.15 Crore (2020: Nil).

B.1.5 J 3,779.27 Crore (2020: H 2,980.96 Crore) including J 3,169.42 Crore (2020: H 2,404.28 Crore) on account of Projects for which suits have been filed in the Courts or cases are lying with Arbitrator. This includes interest of J 110.53 Crore (2020: H 210.53 Crore).

B.1.6 J 351.69 Crore (2020: H 1,163.58 Crore) in respect of other claims including interest of J 25.22 Crore (2020: H 545.86 Crore).

The Company has not considered those disputed demands/claims as contingent liabilities, for which, the outflow of resources has been considered as remote. Contingent liabilities in respect of joint operations are disclosed in Note 33B.

B.2 Guarantees excluding Financial Guarantees

B.2.1 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 fulfill 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. The estimated amount of such obligation (net of amount paid) is J 2,678.71 Crore - USD 366.37 Million (2020: H 2,772.13 Crore - USD 366.37 Million).

B.2.2 The Company has entered into Master Guarantee Agreement, on behalf of its subsidiaries viz. Indoil Global BV. and Indoil Montney Ltd. for all of its payments and performance obligations under the various Project Agreements entered by the subsidiaries with PETRONAS Carigali Canada B.V. and Progress Energy Canada Ltd. (now renamed as Petronas Energy Canada Ltd.). The total amount sanctioned by the Board of Directors is CAD 3924.76 Million. The estimated amount of such obligation (net of amount paid) is J 4,332.44 Crore - CAD 746.55 Million (2020: H 4,317.78 Crore - CAD 813.51 Million). The sanctioned amount was reduced by CAD 1,462.00 Million due to winding down of LNG Plant during 2017.

B.2.3 The Company has issued Corporate Guarantee, on behalf of IndianOil Adani Gas Private Limited (IOAGPL), to the extent of obligations of later company under Performance Bank Guarantee facility provided to IOAGPL by State Bank of India, Canara Bank, Bank of Baroda, Indian Bank, IndusInd Bank, Jammu and Kashmir Bank, Axis Bank and ICICI Bank. The Company's share of such obligation is estimated at J 3,533.46 Crore (2020: H 3,533.46 Crore).

B.2.4 The Company has issued Corporate Guarantee, on behalf of IndianOil LNG Private Limited (IOLPL), to the extent of obligations of IOLPL under Performance Bank Guarantee Facility provided to IOLPL by State Bank of India. The estimated amount of such obligation is at Nil (2020: H 11.40 Crore).

B.2.5 The Company has issued Parent Company Guarantee in favor of Abu Dabhi National Oil Company, on behalf of Urja Bharat Pte. Ltd., Singapore (a joint venture company of Company's subsidiary i.e. IOCL Singapore Pte Ltd) to fulfill the joint venture Company's future obligations of payment and performance of Minimum Work Programme. The total amount sanctioned by the Board of Directors is USD 89.7 Million. The estimated amount of such obligation (net of amount paid) is J 418.22 Crore - USD 57.20 Million (2020: H 565.22 Crore - USD 74.70 Million).

B. 3 Other money for which the Company is Contingently Liable

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.

C. Commitments

C.1 Capital Commitments

Estimated amount of contracts remaining to be executed on Capital Account and not provided for is J 30,679.89 Crore (2020: H 26,677.10 Crore) inclusive of taxes.Capital Commitments in respect of Joint Operations are disclosed in Note 33B.

C.2 Other Commitments

C.2.1 The Company has an export obligation to the extent of Nil (2020: H 583.56 Crore) on account of concessional rate of duty availed under EPCG license scheme on procurement of capital goods and the same is expected to be fulfilled by way of exports.

C.2.2 IndianOil LNG Private Limited (IOLPL), the JV Company, entered into Debenture Subscription Agreement with ICICI Bank (ICICI), in which, the Company, as promoter of IOLPL, provided put option under certain conditions in which ICICI has option to sell Compulsory Convertible Debenture (CCD) to the Company. During the year, ICICI Bank has exercised put option and the Company (IOCL) has paid J 787.00 Crore and its share of obligation is H Nil as on March 31, 2021 (2020 H 808.44 Crore).

3. Government related entities where significant transactions carried out

Apart from transactions reported above, the Company has transactions with other Government related entities, which includes but not limited to the following:

Name of Government: Government of India (Central and State Government)

Nature of Transactions:

• Sale of Products and Services

• Purchase of Products

• Purchase of Raw Materials

• Handling and Freight Charges, etc.

These transactions are conducted in the ordinary course of the Company's business on terms comparable to those with other entities that are not Government-related.

*Liquidator has been appointed for winding up of Company w.e.f. August 30, 2018.

@@IndianOil has exited the Joint Venture by selling its entire stake in IPPCL to SCION Exports Private Limited on March 5, 2021.

@The Company is under winding up process and the appointed liquidator has submitted his report to the official liquidator who is still to submit its report to Tribunal for winding up of the company.

#IndianOil has exited the Joint Venture, IndianOiL Ruchi Biofuels LLP (M/s IORB) by giving notice of its exit from the LLP to the other JV partner viz. Ruchi Soya Industries Limited (M/s Ruchi) as well as to the LLP on December 26, 2018 stating that it will exit the LLP w.e.f. January 25, 2019. The time frame for completing exit formalities by M/s Ruchi by filing requisite forms with ROC was within 30 days of notice expiry period (i.e., by February 24, 2019) but the same is still pending and IndianOil name is appearing on ROC website as Partner in the said LLP M/s Ruchi was under Corporate Insolvency Resolution Process and has been taken over by Patanjali Ayurveda Limited. All necessary documents have been provided to M/s Ruchi for completing formalities relating to exit of IndianOil from IORB LLP.

The management has assessed that fair value of Trade Receivables, Cash and Cash Equivalents, Bank Balances/ Deposits,

Advances for Investment, Recoverable from Employee Benefits Trusts, Other Non-derivative Current Financial Assets, Finance

Lease Receivable, B site RO modernisation loans, Security Deposits paid and received, Short-term Borrowings (including

Current Maturities of Long term Borrowings), Trade Payables, Floating Rate Borrowings/ Receivables, Other Non-derivative

Current Financial Liabilities and Liabilities towards financial guarantees approximate their carrying amounts.

METHODS AND ASSUMPTIONS

The following methods and assumptions were used to estimate the fair values at the reporting date:

A. Level 1 Hierarchy:

(i) Quoted Equity Shares: Closing quoted price (unadjusted) in National Stock Exchange of India Limited

(ii) Quoted Government Securities: Closing published price (unadjusted) in Clearing Corporation of India Limited

(iii) Foreign Currency Bonds - US Dollars: Closing price for the specific bond collected from Bank

B. Level 2 Hierarchy:

(i) Derivative Instruments at FVTPL: Replacement cost quoted by institutions for similar instruments by employing use of market observable inputs.

(ii) Hedging Derivatives at FVTOCI: Replacement cost quoted by institutions for similar instruments by employing use of market observable inputs.

(iii) Loans to employees: Discounting future cash flows using rates currently available for items on similar terms, credit risk and remaining maturities, adjusted for insignificant unobservable inputs specific to such loan like principal and interest repayments are such that employee get more flexibility in repayment as per the respective loan schemes.

(iv) Non-Convertible Redeemable Bonds, Foreign Currency Bonds - Singapore Dollars , Loan from Odisha Government

and USD 100 Mn Term Loan: Discounting future cash flows using rates currently available for items on similar terms, credit risk and remaining maturities (Excluding floating rate borrowings).

(v) Term Loans from Oil Industry Development Board (OIDB): Discounting future cash flows using rates currently available for similar type of borrowings (OIDB Borrowing Rate) using exit model as per Ind AS 113.

C. Level 3 Hierarchy:

(i) Unquoted Equity Instruments: Fair values of the unquoted equity shares have been estimated using Market Approach & Income Approach of valuation techniques. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in management's estimate of fair value for these unquoted equity investments.

(ii) Non Convertible Redeemable Preference Shares, Compulsorily Convertible Debentures (CCDs) and Loan to Related parties - Suntera: Fair value of Preference shares, CCDs and Loan to Suntera is estimated with the help of external valuer by discounting future cash flows. The CCDs are valued considering conversion into equity shares at face value on conversion date. 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 a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.

(iii) PMUY Loan: Fair value of PMUY loans is estimated by discounting future cash flows using approximate interest rates applicable on loans given by Banks duly adjusted for significant use of unobservable inputs in estimating the cash flows comprising of specific qualitative and quantitative factors like consumption pattern, assumption of subsidy rate, deferment of loan etc.

II. Disclosures relating to recognition of differences between the fair value at initial recognition and the transaction price

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.

Financial Assets

1. Loan to Employees

As per the terms of service, the Company has given long term loan to its employees at concessional interest rate. Transaction price is not fair value because loans are not extended at market rates applicable to employees. Since implied benefit is on the basis of the services rendered by the employee, it is deferred and recognised as employee benefit expense over the loan period.

2. PMUY loan

The PMUY loan is the interest free loan given to PMUY beneficiaries towards cost of burner and 1st refill. The loan is interest free and therefore transaction price is not at fair value. The difference between fair value and transaction price is accumulated in Deferred expenses and amortised over the loan period on straight line basis in the Statement of Profit and Loss.

3. Security Deposits

The security deposit is paid to landlord in relation to lease of land. The security deposit is interest free and therefore transaction price is not fair value.The difference between fair value and transaction price is accumulated in Deferred expenses and amortised over the loan period on straight line basis in the statement of Profit and loss till March 31,2019 prior to introduction of IND AS 116.

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 and to provide guarantees to support its operations. The Company's principal financial assets include loans & advances, trade and other receivables, short-term deposits and cash / cash equivalents that derive directly from its operations. The Company also holds FVTOCI investments 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 financial instruments including market risk relating to interest rate, commodity prices, foreign currency exchange rates and equity price, credit risk and liquidity risk.

The Risk Management Commitee comprised of senior management oversees the management of these risks. The Company's senior management is supported by a Risk Management Compliance Board that advises on financial risks and the appropriate financial risk governance framework for the Company. The Risk Management Committee provides assurance to the Board that the Company's risks are governed by appropriate policies and procedures and that risks are identified, measured and managed in accordance with the Company's policies, risk objectives and risk appetite.

The Company's requirement of crude oil are managed through integrated function handled through its international trade and optimisation department. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. As per the Company's policy, derivatives contracts are taken only to hedge the various risks that the Company is exposed to and not for speculation purpose.

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The major components of market risk are interest rate risk, foreign currency risk, commodity price risk and other price risk viz. equity shares etc. Financial instruments affected by market risk include Borrowings, Deposits, FVTOCI investments and derivative financial instruments.

The sensitivity analysis in the following sections relate to the position as at March 31, 2021 and March 31, 2020.

The analysis excludes the impact of movements in market variables on the carrying values of gratuity and other postretirement obligations, provisions, and other non-financial assets and liabilities of foreign operations.

1. Interest Rate Risk

The Company is exposed to interest rate risk from the possibiltiy that changes in interst rates will affect future cash flows of a financial instrument, principally financial debt. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term debt obligations with floating interest rates.

The Company manages to maintian a mix between fixed and floating rates for rupee and foreign currency loans, based on liquidity, availability of cost effective instruments and considering the market/ regulatory constraints etc. The Company also use interest rate swap contracts for managing the interest rate risk of floating interest rate debt. As at March 31, 2021, approximately 66% of the Company's borrowings are at a fixed rate of interest (March 31, 2020: 58%).

3. Commodity Price Risk

The Company is exposed to various commodity price related risk such as Refinery Margins i.e. Differential between the prices of petroleum products & crude oil, Crude Oil Price fluctuation on accounts of inventoty valuation fluctuation and crude oil imports etc. As per approved risk management policy, the Company can undertake refinery margin hedging, inventory hedging and crude oil price hedging through swaps, options and futures in the OTC market as well as domestic exchanges to mitigate the risk within the approved limits.

Company is exposed to USD LIBOR interest rate benchmark reform with respect to floating rate debts raised by it and associated derivative contracts. Company is closely monitoring the market and the announcements from the various agencies managing the transition to new benchmark interest rates. Secured Overnight Financing Rate (SOFR) has been identified by the regulators as the replacement benchmark for USD LIBOR. This is applicable for both loans as well as interest rate derivatives contracts benchmarked to USD LIBOR. Based on announcements made in March 2021 by various agencies involved in USD LIBOR transition, the transition from USD LIBOR to SOFR will take effect immediately after 30 June 2023. The Company is not expecting any material financial impact of transition from USD LIBOR to SOFR on its floating rate loans linked to USD LIBOR and associated derivative contracts which are maturing beyond 30th June 2023.

2. Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company'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 hedging undertaken on occurence of pre-determined triggers. The hedging is mostly undertaken through forward contracts.

4. Equity Price Risk

The Company's investment in listed and non-listed equity securities, other than its investments in Joint Ventures/ Associates and 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 J 855.52 Crore. Sensitivity analysis of these investments have been provided in Note 39.

The exposure to listed equity securities valued at fair value was J 12,213.69 Crore. An increase / decrease of 5% on the NSE market index could have an impact of approximately J 610.68 Crore on the OCI and equity attributable to the Company. These changes would not have an effect on profit or loss.

5. Derivatives and Hedging

(i) Classification of derivatives

The Company is exposed to certain market risks relating to its ongoing business operations as explained above.

Derivatives are only used for economic hedging purposes and not as speculative investments. However, where derivatives do not meet the hedge accounting criteria, they are accounted for at fair value through profit or loss. Information about the derivatives used by the Company and outstanding as at the end of the financial year is provided below:

(ii) Hedging activities

The primary risks managed using derivative instruments are commodity price risk, foreign currency risk and interest rate risk.

Commodity Price Risk Margin Hedging

IndianOil buys crude and sells petroleum products linked to international benchmark prices and these benchmark prices do not move in tandem. This exposes IndianOil to the risk of variation in refining margins.

The risk of fall in refining margins of petroleum products in highly probable forecast sale transactions is hedged by undertaking crack spread forward contracts. The Company wants to protect the realisation of margins and therefore to mitigate this risk, the Company is taking these forward contracts to hedge the margin on highly probable forecast sale in future. Risk management activities are undertaken in OTC market i.e. these are the bilateral contracts with registered counterparties.

All these hedges are accounted for as cash flow hedges.

Foreign Currency Risk

The Company is exposed to various foreign currency risks as explained in A.2 above. As per Company's Foreign Currency & Interest Rate Risk Management Policy , the Company is required to fully hedge the short term foreign currency loans (other than revolving lines and PCFC loans) and at least 50% of the long term foreign currency loans based on market conditions.

Apart from mandatory hedging of loans, the Company also undertakes foreign currency forward contracts for the management of currency purchase for repayment of crude/ product liabilities based on market conditions and requirements. The above hedgings are undertaken through delivery based forward contracts.

All these hedges are accounted for as cash flow hedges.

Interest Rate Risk

The Company is exposed to interest rate risks on floating rate borrowings as explained in A.1 above. Company hedges interest rate risk by taking interest rate swaps as per company's Interest Rate Risk Management Policy based on market conditions. The Company uses interest rate derivatives to hedge exposure to interest payments for floating rate borrowings denominated in foreign currencies.

All these hedges are accounted for as cash flow hedges.

Hedge Effectiveness

There is an economic relationship between the hedged items and the hedging instruments as the terms of the foreign exchange and commodity forward contracts match the terms of hedge items. The Company has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of the foreign exchange, interest rate and commodity forward contracts are identical to the hedged risk components. To test the hedge effectiveness, the Company compares the changes in the fair value of the hedging instruments against the changes in fair value of the hedged items attributable to the hedged risks. In case of interest rate swaps, as the critical terms of the interest rate swap contracts and their corresponding hedged items are the same, the company performs a qualitative assessment of effectiveness and it is expected that the value of the interest rate swap contracts and the value of the corresponding hedged items will systematically change in opposite direction in response to movements in the underlying interest rates.

Source of Hedge ineffetiveness

In case of commodity price risk, the Company has identified the following sources of ineffectiveness, which are not expected to be material:

• Differences in the timing of the cash flows of the hedged items and the hedging instruments

• Different indexes linked to the hedged risk of the hedged items and hedging instruments

• The counterparties' credit risk differently impacting the fair value movements of the hedging instruments and hedged items

• Changes to the forecasted amount of cash flows of hedged items and hedging instruments

B. Credit risk

Trade Receivables

Customer credit risk is managed by each business unit subject to the Company's established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by Letters of Credit, Bank Guarantees or other forms of credit insurance, wherever required.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The Company applies Simplified 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 Note 10. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several 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, 2021 and March 31, 2020 is the carrying amounts as provided in Note 4, 5, 6, 11 & 12.

The Company applies General approach for providing the expected credit 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 accordance with the Company's policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are approved by the Company's Board of Directors. The limits are set to minimise 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 by Oil Marketing Companies (OMCs) to the women belonging to the Below Poverty Line (BPL) households. As per the scheme, OMCs are providing an option for interest free loan towards cost of burner and 1st refill to PMUY consumers which is to be recovered from the 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 Company considers the probability of default upon initial recognition of the loan and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. It considers past experience and time elapsed since the last refill for determining probability of default on collective basis. The Company has categorised the PMUY loans wherein credit risk has increased significantly under various categories considering the likelihood of default based on time gap since last refill. During the year, due to inactivity of a portion of PMUY consumers despite the efforts of company and GOI, company has changed the percentage of ECL provisioning. ECL is provided @80% (2020: @50%) in case of time gap since last refill is more than 12 months but not exceeding 18 months, @90% (2020: @70%) in case of time gap is more than 18 months but not exceeding 24 months and @100% (2020: @90%) for those consumers who have not taken any refill more than 24 months. ECL is provided for the loans where the refill is taken within last 12 months based on experience ratio of more than 12 months as above.

The PMUY loans are classified as credit impaired as on reporting date considering significant financial difficulty in case the customer has not taken any refill from past 24 months (2020: 30 months).

In case of other financial assets, there are certain credit impaired cases mainly due to breach of contract arising due to default or bankruptcy proceedings.

The Company monitors its risk of shortage of funds using a liquidity planning tool. The Company seeks to manage its liquidity requirement by maintaining access to both short term and long term debt markets. In addition, Company has committed credit facilities from banks.

The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, commercial papers, bank loans, debentures, and leases. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of

D. Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company's performance 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 on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

E. Collateral

As Company has been rated investment grade by various domestic and international rating agencies, there has been no requirement of submitting any collateral for booking of derivative contracts. Company undertakes derivatives contract only with those counterparties that have credit rating above the internally approved threshold rating. Accordingly, Company does not seek any collaterals from its counterparties.

A. Revenue Grants

1 Subsidies on sales of SKO (PDS) and LPG (Domestic)

Subsidies on sales of SKO (PDS) and LPG (Domestic) in India amounting to J 72.46 Crore (2020: H 148.29 Crore) and subsidies on sales of SKO and LPG to customers in Bhutan amounting to J 3.13 Crore (2020: H 13.39 Crore) have been reckoned as per the schemes notified by Governments.

2 Compensation against under recoveries

The Company has accounted for Budgetary Support of Nil (2020: H 1,296.17 Crore) towards under-recovery on sale of SKO (PDS) in the Statement of Profit and Loss as Revenue Grant.

3 Export of Notified Goods under MEIS Claims

The Company has recognised J 0.02 Crore (2020: H 1.41 Crore) on export of notified goods under Merchandise Exports from India Scheme (MEIS) in the Statement of Profit and Loss as Revenue Grant.

4 Stipend to apprentices under NATS scheme

As per Ministry of HRD, 50% of the cost of stipend for apprentices which are paid under National Apprenticeship Training Scheme (NATS) will be reimbursed to employer from Government subject to prescribed threshhold limit. The Company has recognised grant in respect of stipend paid to apprentices appointed under NATS amounting to J 2.43 Crore (2020: H 4.88 Crore) as Revenue Grant.

5 Grant in respect of revenue expenditure for research projects

During the year, the Company has received revenue grant of J 1.59 Crore (2020: H 1.93 Crore) in respect of meeting out revenue expenditure such as Manpower, Consumables, Travel & Contingency etc for research projects undertaken with various agencies.

6 Incentive on sale of power

Company is getting incentive from Department of Renewable Energy, GOI for wind power generation of Electricity at the rate of H 0.50 paise for per unit of power generated. The Company has received grant of J 2.08 Crore during the current year (2020: H 2.76 Crore).

7 EPCG Grant

Grant recognised in respect of duty waiver on procurement of capital goods under EPCG scheme of Central Govt. which allows procurement of capital goods including spares for pre production and post production at zero duty subject to an export obligation of 6 times of the duty saved on capital goods procured. The unamortised grant amount as at March 31, 2021 is Nil (2020: H 39.89 Crore) . During the year, the Company has recognised J 39.89 Crore (2020: H 17.68 Crore) in the Statement of Profit and Loss as amortisation of revenue grant.

8 Excise duty benefit in North East

Excise duty exemption of 50% of goods manufactured and cleared from north east refineries has been reckoned at full value in revenue and on net basis in expenses under 'Excise Duty' (to the extent of duty paid). Financial impact for the current year is J 5,655.21 Crore (2020: H 2,627.98 Crore).

9 Grant in respect of Hydrogen blended Natural Gas project at Rajghat DTC

The Company has received grant from Transport Ministry, Govt of NCT, DELHI as per the direction of Hon'ble Supreme Court to carry out its study & pilot project of hydrogen blended CNG (H-CNG). The Company has recognised Nil (2020: H 15.00 Crore) in Statement of Profit & Loss during the year.

B. Capital Grants

1 OIDB Government Grant for strengthening distribution of SKO (PDS)

The Company has received government grant from OIDB (Oil Industry Development Board) for strengthening distribution of PDS Kerosene as per the directions of MoP&NG to be used in construction of 20KL underground Tank, Mechanical Dispensing

Units and Barrel Shed. The unamortised capital grant amount as at March 31, 2021 is J 0.76 Crore (2020: H 1.01 Crore). During the year, the Company has recognised J 0.25 Crore (2020: H 0.27 Crore) in Statement of Profit and Loss as amortisation of capital grants.

2 Capital Grant in respect of Excise duty, Custom duty and GST waiver

The Company has received grant in respect of Custom duty waiver on import on capital goods,Excise duty waiver and GST waiver on purchase of goods from local manufacturer in India under the certificate issued by Department of Scientific and Industrial Research (DSIR). The unamortised capital grant amount as at March 31, 2021 is J 67.77 Crore (2020: H 61.78 Crore) The goods so imported 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 J 10.85 Crore (2020: H 8.50 Crore) in the Statement of Profit and Loss as amortisation of capital grants.

3 Capital Grant in respect of Research projects

The Company has received capital grant from various agencies in respect of procurement/ setting up of Capital assets for research projects undertaken. The unamortised capital grant amount as at March 31, 2021 is J 11.19 Crore (2020: H 12.24 Crore). During the year, the Company has recognised J 2.60 Crore (2020: H 2.51 Crore) in the Statement of Profit and Loss as amortisation of capital grants.

4 Capital Grant in respect of Entry Tax Exemption from Odisha Govt.

Entry Tax exemption received from Odisha Government for Paradip Refinery Project has been recognised as Capital Grant and grossed up with the concerned AssetsThe unamortised capital grant amount as at March 31, 2021 is J 105.55 Crore (2020: H 111.02 Crore). During the year, the Company has recognised J 5.47 Crore (2020: H 5.30 Crore) in the Statement of Profit and Loss as amortisation of capital grants.

5 Capital Grant in respect of demonstration unit

Grant received from OIDB for setting up of demonstration unit at Guwahati refinery with the company's R&D developed IndaDeptG technology and also for Ethanol production from Refinery off gases at Panipat Refinery. The unamortised capital grant amount as at March 31, 2021 is J 173.27 Crore (2020: H 90.77 Crore). During the year, the Company has recognised J 4.38 Crore (2020: H 4.38 Crore) in the Statement of Profit and Loss as amortisation of capital grants.

6 Capital Grant in respect of interest subsidy

The Company has received capital grant in respect of interest subsidy on loans taken from OIDB. The unamortised capital grant amount as at March 31, 2021 is J 26.32 Crore (2020: H 11.56 Crore). During the year, the Company has recognised J 0.51 Crore (2020: H 0.34 Crore) in the Statement of Profit and Loss as amortisation of capital grants.

7 Capital Grant in respect of Viability Gap Funding (VGF)

The Company has received capital grant in the form of interest free loans from Orissa Government for a period of 15 yearsThe unamortised capital grant amount as at March 31, 2021 is J 2,065.16 Crore (2020: H 1,750.64 Crore). During the year, the Company has recognised J 144.86 Crore (2020: H 112.11 Crore) in the Statement of Profit and Loss as amortisation of capital grants.

8 Capital Grant in respect of Solar Power Generation

The Company has received capital financial assistance from Ministry of New and Renewable Energy in respect of procurement and installation of Solar Panels for Power GenerationThe unamortised capital grant amount as at March 31, 2021 is J 3.96 Crore (2020: H 4.14 Crore). During the year, the Company has recognised J 0.18 Crore (2020: H 0.19 Crore) in the Statement of Profit and Loss as amortisation of capital grants.

9 Capital Grant from Nepal Government

The Company has received grant from Nepal Government by way of waiver of Local taxes on goods/services procured locally in Nepal and Import Duty for goods/services imported into Nepal. The Company has recognised J 1.05 Crore (2020: H 0.71 Crore) in Statement of Profit & Loss. The unamortised balance is J 12.42 Crore (2020: H 13.63 Crore)

The Company is in the business of oil and gas and it earns revenue primarily from sale of petroleum products, petrochemicals and others comprising of Gas, E&P and Others. Revenue are recognised when control of the goods and services are transferred to the customer at an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. In determining the transaction price for the sale of products, the company considers the effects of variable consideration, the existence of significant financing components, non-cash consideration, and consideration payable to the customer (if any).

Generally, Company enters into contract with customers;

a. On delivered basis in case of Retail Sales, LPG and Aviation.

b. On EX-MI 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 Institutional Businesses(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 which orders for purchase of products are placed by the customers. Based on these orders, supply is maintained by the Company and revenue is recognised when the goods are delivered to the customer by adjusting the advance from customers.

Company also extend volume/slab based discounts to its customers on contract to contract basis for upliftment of products and it is adjusted in revenue as per the terms of the contract. Company also runs loyalty programmes and incentive schemes for its retail and bulk customers. Loyalty points are generated and accumulated by the customers on doing transactions at Company's outlet which can be redeemed subsequently for fuel purchases from Company outlets. Revenue is recognised net of these loyalty points and incentive schemes.

Beside this, though not significant, Company also undertakes construction contracts on deposit basis. Revenue is recognised for these contracts on input based on cost incurred. Similarly non-refundable deposits received from Retail Outlets (ROs) are recognised as revenue over time.

The Company has applied practical expedient as per IndAS 115 in case of delivered sales, advance from customers where the performance obligation is part of the contract and the original expected duration is one year or less and in case of construction contracts/deposit works wherein the company has a right to consideration from customer that correspond directly with the value of the entity's performance completed for the customer.

Revenue in cases of performance obligation related to delivered sales and advance from customers are recognised in time based on delivery of identified and actual goods and no significant judgement is involved. Revenue in case of construction contracts/ deposit works are recognised over time using input based on cost incurred. Revenue in case of Non Refundable RO Deposit is recognised on time proportion basis.

1 In order to provide clean cooking fuel to BPL families, Government has approved "Pradhan Mantri Ujjwala Yojana (PMUY)” scheme where 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 initial cost towards connection charges (Refundable deposit) would be borne by the Central Government for each card holder. Few State Governments 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 amount payable by the government to the customers on each refill sale. During the year, discounting of the loan has been done based on assumption of 3 refills in a year and average subsidy of H 44.69 per cylinder as loan recovery.

The amount of outstanding as at March 31, 2021 towards PMUY claim from Central Government is J 6.38 Crore (2020: H 468.54 Crore) and loan to PMUY consumers is J 3,022.58 Crore (2020: H 3,185.64 Crore) (net of recovery through subsidy). Against the above loan, a provision for doubtful loans amounting to J 910.45 Crore (2020: H 553.19 Crore) has been created as at March 31, 2021 against the beneficiaries who have not taken any refill for more than 12 months based on expected credit loss(ECL) model and applying experience factor based on experience ratio of more than 12 months. (Also refer Credit Risk under Note 40)

On account of decline in subsidy amount of LPG cylinders in current year, the Company has remeasured the gross carrying amount of PMUY loan as at Balance Sheet date based on revised estimated future contractual cash flows resulting in reduction in PMUY loans by J 847.08 Crore which has been charged to Statement of Profit and Loss in Note 29.1 under the head "Amortisation and Remeasurement of PMUY Assets”

2 During the year old dispute with Delhi Development Authority (DDA) pertaining to demand of license fee towards Retail Outlets settled with DDA based on decision of the Committee of Secretaries under Administrative Mechanism for Resolution of CPSEs Disputes (AMRCD). Consequently provision of J 205.38 Crore has been written back and included in Revenue from operations.

3 "The Government of India had announced a relief package under Pradhan Mantri Garib Kalyan Yojna (PMGKY) to the Poor families affected by the pandemicThis scheme entailed PMUY consumers to avail a sequential advance towards purchase of three refill cylinders. The scheme was initially for the period beginning from 01.04.2020 and ending on 30.06.2020 which was subsequently extended up to 31.12.2020 to allow PMUY Beneficiaries to uplift refill against the transferred advance, and thereby enabling OMC to claim from MoPNG for such refill against the advance transferred.

Accordingly, the Company during the year transferred advance of J 4,541.05 Crore (2020: Nil) to PMUY beneficiaries out of which J 4,374.16 Crore (2020: Nil) were utilised by the customers towards refills leaving an outstanding of H 166.89 Crore as on 31.03.2021. Doubtful provision has been made for the said unutilised amount and included under the head "Impairment Loss on Financial Assets” on the face of Statement of Profit and Loss , representing the difference between advance amount as against RSP on the date of upliftment of refill and advance against which no upliftment of refill has taken place and thereby claim could not be submitted by IOC.

4 The land and other facilities held by the Company at Narimanam Marketing Terminal is intended to be transferred to new Joint venture proposed to be formed between IOCL and CPCL with equity holding of 50% and balance to be retained by strategic/public investors for construction of new refinery project at CBR Nagapattinam. Pending finalisation of modalities of transfer and management approvals, the facilities held at marketing terminal having WDV of J 81.93 Crore (Gross Block: H 151.39 Crore) has been continued in the books as Property, Plant & Equipment under Note -2.

5 Pursuant to the Board approval for formation of a Joint Venture company between Indian Oil Corporation Ltd and Coal India Ltd for transfer of explosives business to the said venture Company on slump sale basis at a value of H 311.00 Crore (Net Assets WDV of H 82.69 Crore as at March 31, 2020), consent of Niti Ayog was initially received for formation of the JV vide letter dated April 27, 2018. However, the formation of the JV is not carried forward on account of subsequent communication dated July 11, 2018 from MoPNG. The matter is under deliberation and accordingly, the explosive business continues to be in operation as at March 31, 2021. The Net Asset WDV of the business as at March 31, 2021 is J 77.49 Crore.

6 In line with the conditions specified in Environment Clearance Certificates issued by Ministry of Environment, Forest and Climate Change (MoEFCC) at the time of commencement of the project, during the year, the Company has recognised a cumulative liability towards environmental responsibility as project cost for the ongoing projects of J 174.9 Crore and completed projects of J 421.19 Crore.

7 Pursuant to the order of Honorable High Court of Odisha in the Feb' 2012 for removal of shoals from the upstream of Mahanadi Barrage and Construction of Water Treatment plant in Cuttack, Company was treating the expenditure as enabling

Asset for its Paradip Refinery which was commissioned in March 2016. In the financial year 2019-20, out of the total advance of H 231.44 Crore, an amount of H 147.10 Crore was shown as Construction-Work in Progress based on Utilisation Certificate received from the authorities and the balance amount of H 84.34 Crore was shown as Advance for Capital Expenditure (Note-8). The balance unpaid amount of H 146.96 Crore was shown under Capital Commitment (Note-36). During the year, Company has received an opinion from the Expert advisory Committee (EAC) of Institute of Chartered Accountant of India (ICAI) which opined that above expenses are directly attributable for bringing the refinery assets into operation and therefore should be capitalised along with Refinery. Accordingly, the Company has capitalised the entire cost of J 382.37 Crore by providing unpaid liability amounting to J 33.19 Crore.

8 During the year, vessel MT New Diamond carrying crude cargo for Paradip Refinery met with fire incidence near Sri Lankan Coast and had to be towed to port of refuge, Kalba, UAE for Ship-to-Ship (STS) operations with the help of salvors. General Average claims arising out of such salvage, towing and STS operations in respect of vessel MT New Diamond is yet to be finalised by General Adjuster appointed for the purpose. The liability arising out of General Average claims is fully insured under Marine Insurance Policy except to the extent of excess clause, for which necessary provision amounting to J 6.84 Crore is made in the books of accounts.

9 The Company has net recoverable capital advances of J 103.53 Crore and trade receivable of J 8.40 Crore from parties which have been referred to National Company Law Tribunal (NCLT). In respect of capital advances provision of J 9.36 Crore (2020: Nil) is recognised after considering the available bank guarantees and no further provision is considered as the matter is subjudice. For trade receivable no provision have been created considering available bank gurantees.

10 Pursuant to the opinion of EAC of ICAI on treatment of Marine Cum Erection policy cost, Company has charged an amount of J 40.51 Crore as insurance cost under Note 29.1 in respect of ongoing projects and projects completed during the year.

11 During the year, Diamond Gas International (DGI) cancelled FOB LNG Cargoes scheduled to be loaded from Cameron LNG Project in USA, due to Force Majeure event - Hurricane Laura and Hurricane Delta. The Company has created a provision of J 288.38 Crore against advance paid to DGI, recognised J 23.53 Crore payable to DGI under LNG Sale and Purchase Agreement as Miscellaneous Expenses and recognised J 60.79 Crore as shipping cost settled with shippers.

12 During the financial year 2019-20, the MAT Credit Entitlement as on April 1, 2019 amounting to H 1,921.13 Crore was written off in the books of accounts upon exercising the option to pay tax at lower rates from Assessment Year 2020-21 as per provision of Section 115BAA of the Income Tax Act, 1961. However, the same is available for utilisation against any tax liabilities pertaining to past years i.e prior to Assessment Years 2020-21. During the current financial year, on account of increase in the tax liabilities pertaining to the past years, MAT Credit Entitlement previously written off, has been adjusted by J 1,099.27 Crore.

13 During the current financial year, the Company has opted for settlement of eligible Income Tax disputes for the Assessment Years 1987-88 to 2010-11 through Vivad se Vishwas Scheme introduced by the Government of India vide The Direct Tax Vivad Se Vishwas Act, 2020. As per the provisions of the scheme liability has been assessed at J 2,420.82 Crore in respect of said years. Accordingly, during the year, an additional amount of J 1,582.44 Crore has been accounted for as current tax expense in the Statement of Profit and Loss towards the aforesaid scheme over and above the existing provision of H 838.49 Crore which was being carried in the Books of account and contingent liability amounting to H 625.09 Crore in respect of the said years has been reduced to Nil.

14 The Company is consistently valuing its inventories at Cost or Net Realisable Value (NRV), whichever is lower and for this purpose NRV is derived is based on specified subsequent period as per regular practice. During previous financial year 201920, unprecedented situation caused by global outbreak of Covid-19 pandemic lead to demand reduction and significant fall in oil prices. Further, national lockdown from March 25, 2020 resulted in decline in demand necessitating the Company to consider a longer time period than that as per regular practice for deriving NRV and the NRV so derived was compared with cost. As a result of considering a longer time period and fall in prices, value of inventories as on March 31,2020 were written down by H 11,304.64 Crore, which was treated as Exceptional Item considering its nature and size.

15 The impact of Covid-19 pandemic on lives of people from every walk of life continued during the year and effected all business and economic activities globally. The national lock down imposed in last week of Mar 2020 lasted till May'2020 and the restrictions were gradually relaxed over a period extending unto third quarter. This skewed demand for petroleum products by reducing need for transportation fuels and increasing demand domestic fuel.

The Company continued to meet energy demand of the nation under Essential Services, by modifying the production plans at its refineries and balancing it with import of products. The Company reorganised itself in tune with the new normal without any disruption in the supply chain or compromising with the internal controls. The demand for all petroleum products resumed to normal levels from the second half of the financial year. However, as Tourism and Airline industries had been hit worst by the pandemic, the demand for aviation fuel had not normalised.

The Company has taken into account all the possible impacts of pandemic in preparation of these standalone financial statements, including but not limited to its assessment of liquidity, recoverable values of its financial and non-financial assets, performance of contractual liability and obligations etc. The Company has carried out this assessment based on available internal and external sources of information up to the date of approval of these standalone financial statement. The Company is positive on the long term business outlook as well as its financial position.

16 Purchase of crude oil from Oil India Limited and some other oilfields has been accounted for provisionally, pending finalisation of agreements with respective parties. Adjustments, if any, will be made on finalisation of agreements.

17 Transactions with other Oil Marketing Companies are jointly reconciled on an ongoing basis.

18 There are no other significant subsequent events that would require adjustments or disclosures in the Financial Statements as at Balance Sheet date, other than those disclosed above.

19 Previous year's comparative figures have been regrouped wherever necessary. Figures in brackets indicate deductions/losses.