NOTE-1

1.1.0 Corporate Information

The Financial Statements of "Oil India Limited" ("the Company " or " OIL" ) (CIN: L11101AS1959G0I001148) are for the year ended 31^st March, 2024.

The Company is a public limited Company incorporated in India having its registered office at Duliajan, District Dibrugarh, Assam, Pin-786602. The Company's shares are listed and traded on BSE Limited and National Stock Exchange of India Limited.

The Company is engaged in exploration, development and production of crude oil, natural gas, LPG and condensate and providing services such as pipeline transportation and generation of renewable energy.

The Financial Statements are approved for issue by the Board of Directors of the Company in its meeting held on 20^th May, 2024.

1.1.1 New Standards/ amendments and other changes effective from April 1, 2023

The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules, 2023 dated 31^st March 2023, to amend the following Ind AS which are effective for annual periods beginning on or after 1^st April 2023. The Company applied for the firsttime these amendments.

Disclosure of Accounting Policies - Amendments to Ind AS 1

The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their 'Significant' Accounting Policies with a requirement to disclose their 'Material' Accounting Policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

The amendments have an impact on the Company's disclosures of accounting policies, but not on the measurement, recognition or presentation of any item in the Company's Financial Statements.

the amounts of revenue and expenditures during the reported period and notes to the financial statements. Actual results could differ from those estimates, any revision to such estimates is recognized in such period in which the same is determined and if material, their effects are disclosed in the notes to the Standalone Financial Statements.

1.2.1 Major judgements, assumptions and

accounting estimates

a. Estimation of oil and gas reserves

The estimation of oil and gas reserves is key factor in the accounting for oil and gas producing activities. Oil and gas reserves are estimated by analysis of geosciences and engineering data using Deterministic Method. Production pattern analysis, number of additional wells to be completed, application of recovery techniques, validity of mining lease agreements, agreements/MOU for sales etc. influence the estimation of reserves. Unit-of-production method of depreciation, depletion and amortization charges are principally measured based on management's estimates of proved and proved developed oil and gas reserves. Also, exploration drilling costs are categorized as Exploration and Evaluation Assets pending the results of further exploration or appraisal activity, which may take several years to complete and before any related proved reserves can be booked.

b. Impairment of assets

As part of the determination of the recoverable value of assets of cash generating units for impairment, the estimates, assumptions and judgments mainly concern oil and gas price scenarios, operating cost, production volumes and oil and gas proved & probable reserves. The discounting rate used for estimating the value in use is reviewed annually. Changes in assumptions could affect the carrying amounts of assets, and any impairment losses and reversals will affect the revenues.

c. Employee benefits

The benefit obligations and plan assets can be subject to significant volatility due to changes in market values and actuarial assumptions. These assumptions vary between different pension plans and thus take into account market conditions. They are determined following actuarial valuation method certified by external independent actuarial valuer. The assumptions for each plan are reviewed periodically and adjusted if necessary.

Division II of Schedule III to the Companies Act, 2013 and Guidance Note on Accounting for Oil and Gas Producing Activities (Ind AS) issued by the Institute of Chartered Accountants of India.

1.3.2 Basis of preparation

The Financial Statements are prepared on going concern basis under the historical cost convention using accrual basis of accounting except for assets and liabilities which have been measured at fair value such as certain financial assets and financial liabilities. (refer notes 43 for financial instruments measured at fair value).

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

As the operating cycle cannot be identified in normal course due to the special nature of industry, the same has been assumed to have duration of 1 year. Accordingly, all assets and liabilities have been classified as current or non-current as per the Company's operating cycle and other criteria set out in Ind AS-1 "Presentation of Financial Statements and Schedule III to the Companies Act, 2013.

The Financial Statements are presented in Indian Rupees and all values are rounded off to the nearest two decimal crore, except otherwise stated.

1.4.0 Revenue recognition

1.4.1 Revenue from contracts with customers

The Company derives revenues primarily from sale of products such as Crude Oil, Natural Gas, Liquefied Petroleum Gas (LPG), Condensate, Renewable Energy and sale of services such as Pipeline Transportation Services.

Revenue from contracts with customers is recognized at the point in time when the Company satisfies a performance obligation by transferring control of a promised product or service to a customer and is measured at the amount of transaction price allocated to that performance obligation. Discount, taxes & duties (other than excise duty) are excluded from revenue.

As per the Production Sharing Contracts for extracting the Oil and Gas Reserves with Government of India, out

of the earnings from the exploitation of reserves after recovery of eligible cost, a part of the revenue is paid to Government of India which is called Profit Petroleum. It is reduced from the revenue from Sale of Products as Government of India's Share in Profit Petroleum.

The transfer of control on sale of Crude Oil, Natural Gas, Liquefied Petroleum Gas (LPG), Renewable energy and Condensate occurs either at the point of delivery or the point of receipt, where usually the title is passed and/ or the customer takes physical possession, depending upon the contractual conditions. Any retrospective revision in prices is accounted for in the year of such revision.

Claims on Central Government / Petroleum Planning & Analysis Cell (PPAC) towards gas pool revenue are accrued based on quantity delivered to the customers at discounted price, in respect of which revenue is recognized when collectability of the receivable is reasonably certain.

Revenue from sale of Renewable Energy Certificates (REC) is recognized on sale of the certificates through the Exchange. i.e., when the receivable is reasonably certain.

Revenue in respect of contractual short- lifted quantity of gas is recognized when the customer's right to such quantity is expired and there is reasonable certainty regarding its ultimate collection.

Sale and transportation of crude oil and natural gas are based on mutually agreed terms between the parties/ governed by the Government directives issued from time to time. Subsequent changes in terms, if any, are recognized in the period of change. Such retrospective revision in prices is not determinable at the time of sale.

1.4.2 Contract liabilities

The Company recognises contract liability for consideration received for short lifted quantity of gas under take or pay arrangements for which the customer has right to take related volume in future (i.e. unsatisfied performance obligations) and for the penalties that may be raised by the contracting party in case of a dispute and reports these amounts as advances from customers or as penalties that may be payable in future. in the balance sheet. The un-accrued amounts are not recognised as revenue till all related performance obligations are fulfilled or the customer's right to such quantities is expired.

1.4.3 Other income

(i) Dividend income from investments is recognized when the Company's right to receive payment is established.

(ii) Interest income is recognized on a time proportion basis considering the amount outstanding and the effective interest rate applicable which is the rate that equalizes discounted estimated future cash receipts through expected life of the financial asset to that asset's net carrying amount on initial recognition. Interest on income tax refund is accounted for upon finalisation of assessments.

(iii) Insurance claim other than that for transit loss of stores items are accounted for on final acceptance by the Insurance Company.

(iv) Revenue on account of subsidies/grants and interest on delayed realization from customers are recognized when there is certainty of ultimate realization.

(v) Recovery of liquidated damages is recognized in the Statement of Profit & Loss as income at the time of occurrence except in case of Joint Venture Contracts (JVC) which are governed by the respective Production Sharing/Revenue Sharing Contracts. In case of return/refund of the liquidated damages, the same is accounted for as other expenses. In case of any dispute over the liquidated damages, provision is created in the accounts.

(vi) Income from Business development services such as technical and administrative support, maintenance of Right of Way, cathodic protection, facilities extended to other organisations etc. are recognised at a point in time when the Company satisfies its performance obligation.

(vii) Income in respect of OFC fibre leasing is recognised periodically over the contract term.

(viii) Other claims are recognized when there is a reasonable certainty of recovery.

1.5.0 Leases

1.5.1 The Company as lessor

The Company has classified Numaligarh Siliguri Product

Pipeline as operating lease as per the provisions of

Ind AS 116.

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized as expense on a straight-line basis over the lease term on the same basis as lease income.

1.5.2 The Company as lessee

The Company has applied Ind AS 116 "Leases" to service contracts of equipment, land, buildings, vehicles, etc. to evaluate whether these contracts contain lease or not. Based on evaluation of the terms and conditions of the arrangements, the Company assesses such arrangements to be leases.

The Company has exercised the option not to apply Ind AS 116 to intangible assets.

1.5.2.1 Lease term

The Company determines the lease term as the noncancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease.

1.5.2.2 Right of use assets:

The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right of use assets are recognized at cost, less any accumulated depreciation and impairment losses (Ind AS 36), if any.

The cost of right of use assets includes the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the inception date of the lease, any initial direct costs incurred and restoration obligations, if any.

1.5.2.3 Depreciation:

The right-of-use assets are depreciated using the straight-line method, beginning from the commencement date over the lease term or useful life of right-of-use assets whichever is earlier.

1.5.2.4 Lease liabilities:

The lease liability is initially measured at present value of the future lease payments over the reasonably certain lease term. The lease payments are discounted using the incremental borrowing rate as applicable.

1.5.2.5 Finance cost on lease liabilities:

The interest cost on lease liability, computed using effective interest method, is expensed in the statement of profit and loss, unless eligible for capitalization as per accounting policy on "Borrowing costs".

1.5.2.6 Non lease component:

The Company's contracts involve a number of additional services and components including personnel cost, maintenance, drilling related activities, consumables and other items. In most of such contracts, the additional services/non-lease components constitute significant portion of the overall contract value. Where the additional services/non-lease components are not separately priced, the Company allocates the consideration paid based on the relative stand-alone prices of the lease and non-lease components. Further, these non-lease components are not included in the measurement of lease liability.

1.5.2.7 Reassessment of lease liabilities:

The Company remeasures the carrying amount of lease liabilities if there is a change in the lease term or a change in the lease payments.

1.5.2.8 Short term lease and low value assets leases:

Leases for which lease term ends within 12 months is classified as short-term leases. The Company has elected short term leases and low value asset leases for recognition exemption in terms of Ind AS 116. The Company recognizes the lease rental payment associated with short term lease and low-value asset leases as expense in the Statement of Profit & Loss over the lease term.

1.6.0 Foreign currency transactions and translations

The Financial Statements are presented in Indian Rupees, which is also the Company's functional currency.

In preparing the Financial Statements of the Company, transactions in currencies other than Indian Rupees

are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the closing rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rate prevailing at the date when the fair value was measured. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as on the dates of the initial transactions. Transaction gains and losses realized upon settlement of foreign currency transactions are included in determining net profit / loss for the period in which the transaction is settled.

Exchange differences on monetary items are recognized in the statement of profit and loss in the period in which they arise except for:

a) Exchange differences on foreign currency borrowings relating to acquisition or construction of qualifying assets to the extent they are regarded as an adjustment to interest cost ;

b) In accordance with para D13AA of Ind AS 101, Firsttime Adoption of Indian Accounting Standards, the Company continues to exercise policy adopted under previous IGAAP and accordingly exchange differences arising on long-term foreign currency monetary items recognised as at 31^st March, 2016 were accumulated in a "Foreign Currency Monetary Item Translation Difference Account" and amortized over the balance period of such long term foreign currency monetary item by recognition as income or expense.

1.7.0 Borrowing costs

Borrowing cost consists of interest and other cost incurred in connection with borrowing of funds and includes exchange difference arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest cost. Borrowing cost also includes finance cost on decommissioning and lease liability.

Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalized to the cost of those assets, until such time the assets are substantially ready for their intended use.

Capitalisation of borrowing costs is suspended when active development activity on the qualifying assets is

interrupted other than on temporary basis and charged to the statement of profit and loss.

All other borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.

1.8.0 Government grants

Government grants are recognized when there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants will be received.

(i) Grant related to Income (Revenue Grants)

The Company recognizes revenue grants in the statement of profit and loss as a deduction in the reporting related expense.

(ii) Grant relating to Assets (Capital Grants)

Government grants with the primary condition that the Company should purchase construct or otherwise acquire non-current assets are recognized as deferred income in the balance sheet and transferred to the statement of profit and loss in the ratio of depreciation / depletion calculated on the related assets.

1.9.0 Employee benefits

1.9.1 Retirement benefit costs and termination benefits:

Payments to defined contribution plans (such as provident fund and superannuation benefit scheme fund) are charged to the statement of profit and loss (other than expenses to be capitalized), when employees have rendered service entitling them to the contributions.

The cost of providing benefits under defined benefit plans (such as gratuity, leave encashment, postretirement medical benefits, defined benefit pension, Social security schemes etc) are determined separately for each plan using the projected unit credit method, with actuarial valuations being carried out half-yearly and annually. This attributes the increase in present value of the defined benefit obligation resulting from employee service in the current period to determine current service cost. The current service cost as stated above and past service costs, resulting from a plan amendment are recognized in the statement of profit and loss under 'employee benefits expense'.

Net interest which is recognized in the statement of profit and loss under 'employee benefits expense' represents the net change in present value of plan obligations and the value of plan assets resulting from the passage of time, and is determined by applying the discount rate to the present value of the benefit obligation and to the fair value of plan assets at the beginning of the year, taking into account expected changes in the obligation or plan assets during the year.

Re-measurement of the defined benefit liability and asset, comprising actuarial gains and losses, and the return on plan assets (excluding amounts included in net interest described above) other than capitalised portion are recognized in other comprehensive income in the period in which they occur and are not subsequently reclassified to the statement of profit and loss.

The Company presents remeasurement of defined benefit plans as a part of retained earnings (refer statement of changes in equity).

Surplus or deficit recognized in the Financial Statements for each defined benefit plan is the difference between the present value of the defined benefit obligation and the fair value of plan assets. The deficit for each plan managed through separate Trust fund is to be settled directly to such Trust fund. Defined benefit plan surpluses are only recognized to the extent they are recoverable, naturally by way of refund or reductions in future contributions to the plans.

Payments made under Voluntary Retirement Scheme or any other early separation scheme are charged to the statement of profit and loss on incurrence.

1.9.2 Short-term and other long-term employee benefits

A liability is recognized for benefits accruing to employees in respect of wages and salaries (including performance related pay), annual leave, sick leave etc in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognized in respect of other long-term employee benefits are measured at the present value

of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

1.10.0 Taxation

1.10.1 Current Tax

Income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

The Company evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation at each reporting date and considers whether it is probable that a taxation authority will accept an uncertain tax treatment.

In respect of disputed cases, when an appeal is decided by appellate authority, the corresponding appeal effect is given in the accounts only after receipt of appellate order from the concerned Department/ Authority, if not further contested.

1.10.2 Deferred tax

(i) Deferred tax is recognized using liability method on temporary differences between the carrying amounts of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit.

(ii) Deferred tax liabilities are generally recognized for all taxable temporary differences.

(iii) Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

(iv) The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the benefits of all or part of the deferred tax asset to be utilized. Any such reduction shall be reversed to the extent when it becomes probable that sufficient taxable profit will be available.

Profit and Loss, when determined to be dry or of no further use.

c) E&E costs related to each exploratory well are not carried over unless it could be reasonably demonstrated that there are indications of sufficient quantity of reserves and activities are firmly planned in near future for further assessing the reserves and economic and operating viability of the project. Costs of written off exploratory wells are not reinstated in the books even if they start producing subsequently.

d) Estimated decommissioning cost is included in the carrying value of exploration and evaluation asset.

(iv) Development Cost

Costs incurred on development activities such as drilling of development wells and service wells, setting of production and processing of plant and facilities including allocated depreciation on support equipment and facilities (such as rig, mud plant, well logging equipment, cementing unit etc.) and allocated interest on support equipment taken on lease are initially shown under Capital Work in Progress as "Development Cost wells" and are capitalized as "Oil & Gas Asset" under Property, Plant and Equipment on completion of well. Cost of dry development well, if any, is also capitalized as Oil and Gas Asset under Property, Plant and Equipment upon completion of the well.

(v) Production Cost

Production Cost consists of direct and indirect costs incurred to operate and maintain wells and related equipment and facilities, including depreciation and applicable operating cost of support equipment and facilities. These costs are charged off to Statement of Profit and Loss, as and when incurred.

(vi) Side-Tracking Expenditure:

In case of exploratory wells, the cost of abandoned portion of side tracked well is charged off to Statement of Profit and Loss. In case of development wells, the entire cost of abandoned portion and side- tracking is capitalized. In case of existing producing wells, the cost of side - tracking is capitalized if it increases the proved developed reserves, otherwise it is charged off to Statement of Profit and Loss.

1.12.0 Research & Development Expenditure

All revenue expenditure incurred for Research & Development Projects/Schemes, net of grants-in-aid (other than those related to asset) if any, are charged to the Statement of Profit and Loss.

1.13.0 Property, Plant and Equipment (PPE) including Capital Work in Progress (CWIP) (PPE) including Capital Work in Progress (CWIP)

i. Property, plant and equipment including Oil and Gas assets are stated at cost, less accumulated depreciation, depletion and impairment losses. Such cost includes the cost of replacing part of the plant and equipment, if the recognition criteria are met, the present value of the initial estimate of any decommissioning or site abandonment or restoration obligation, wherever applicable and eligible borrowing costs, wherever applicable. Refer to significant accounting judgements, estimates and assumptions (Note 1.2.1) and provisions (Note 1.15.2) for further information relating to decommissioning cost and its provision.

ii. Assets which are in the course of construction are initially kept under capital work in progress and capitalized when the assets are available for use in the manner as intended by the management. Such cost includes the costs incurred during construction period and the present value of the initial estimate of any abandonment, decommissioning or site restoration obligation, wherever applicable. Capital work in progress is stated at cost, net of accumulated impairment loss, if any.

iii. Borrowing cost consisting of interest on term loan and unwinding of interest on lease liability in respect of leases entered for support equipment are capitalised in CWIP or the relevant item of PPE (as the case may be), provided the criteria for recognition of borrowing cost as a component of carrying value of item of PPE has been fulfilled.

iv. If any item held under CWIP is not as per the defined requirement or specifications and has no further use, a provision is recognized for the write off of such item, until such item is actually written off.

v. Items such as spare parts, stand-by equipment and servicing equipment which meet the definition of Property, Plant and Equipment are capitalised. Other spare parts are carried as inventory and recognized in the Statement of Profit and Loss on consumption.

vi. When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives not exceeding the remaining useful life of respective plant and equipment. Where an asset or part of an asset that was separately depreciated is replaced and it is probable that future economic benefits associated with the item will flow to the Company, the expenditure is capitalized and the carrying amount of the replaced asset is derecognized.

vii. Major shut-down and overhaul expenditure is capitalized as the activities undertaken to improve the future economic benefits expected to arise from the asset. Inspection costs associated with major maintenance programs from which future economic benefits are expected to flow, are capitalized and depreciated over the period to the next inspection.

viii. Technical know-how /license fee relating to plants / facilities and specific software that are integral part of the related hardware are capitalized as part of cost of the underlying asset.

ix. Oil and Gas assets forming part of PPE in respect of an area / field having proved developed oil and gas reserves, when the well in the area / field is ready to commence commercial production. Oil and Gas assets which comprise of producing wells, related acquisition cost and production facilities are depleted using a unit-of-production method. The capitalised cost of producing wells and production facilities including estimated decommissioning and abandonment cost (net of salvage value, accumulated depreciation and impairment charge) are depleted over proved developed reserves. Acquisition cost is depleted over proved reserves. Rate of depletion is determined based on production from the Oil/ Gas field or a group of Oil/Gas fields identified to the related reserves having homogeneous geological features. Estimation of oil and natural

gas reserves are done annually at the year end and the impact of changes in the estimated proved reserves are dealt with prospectively by depleting the remaining carrying value of the asset.

x. Other property, plant and equipment excluding 'Land-freehold' and 'Right of use (ROU) assets' are depreciated based on useful life of the asset under "Written down value method" as specified in Schedule II to the Companies Act., 2013. Freehold land are not depreciated.

xi. Low value items not exceeding ' 5,000 are fully depreciated at the time of addition. Residual value (net of estimated cost of disposal) of property plant and equipment other than well asset is determined considering past experience and technical assessment (if applicable) and is upto 5% of the original cost. The residual value of well assets are determined based on technical assessment of the net sale value of scrap that may be extracted from the wells, depending upon the location and condition of the wells. The typical useful life of other major property, plant and equipment are as follows:

xii. Depreciation on subsequent expenditure on PPE (other than of Oil and Gas Assets) arising on account of capital improvement or other factors is provided for prospectively over the remaining useful life. Depreciation on furbished/revamped PPE (other than of Oil and Gas Assets) which are capitalized separately is provided for over the reassessed useful life.

xiii. The expected useful life of property, plant and equipment other than Oil and gas assets are reviewed on an annual basis. The expected useful life of Oil and Gas assets are reviewed

by estimating the reserves for the Oil and Gas assets annually. Further, the residual value of PPE is also reassessed annually. Impact arising due to changes in useful life or the change in residual value, are accounted for prospectively. Company considers the impact of health, safety and environmental legislation in its assessment of expected useful lives and estimated residual values.

xiv. Any tangible asset other than well assets retired from active use and future economic benefits are expected to arise on disposal of the asset is carried as plant & equipment at lower of ' 1000 or 5% of the original cost and the balance written down value, is charged off.

xv. An item of property, plant and equipment other than well assets is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use or disposal of the asset. Any gain or loss arising on de-recognition of the asset is included in the statement of Profit & Loss in the period in which the item is derecognized. Any gain or loss arising on actual sale of the asset is included in the Statement of Profit and Loss in the period in which the item is actually sold as scrap.

xvi. Producing well assets are derecognized when the designated oil/gas field or a group of oil/gas fields ceases to produce.

xvii. Assets provided to employees as per the Company's internal schemes are also classified as property, plant and equipment and are depreciated under written down value method based on the useful life as defined in the internal schemes of the Company or useful life as specified in Schedule II of the Companies Act, whichever is lower. Such assets are derecognised on expiry of useful life as defined in the internal scheme or buy-back of such assets by the employees as per aforesaid internal schemes.

The assets provided to employees having its useful life different than as specified in schedule II of the Act are as follows:

Further, soft furniture given to employees as per the aforesaid internal scheme, are fully depreciated in the year of purchase.

xviii. Physical verification of the property, plant and equipment (other than PPE items given to employees as per the policy of the Company) is carried out by the Company in a phased manner to cover all the items over a period of three years. The discrepancies noticed, if any, are accounted for in the year in which such differences are found and provision is created in respect of these discrepancies, till the time the same is written off.

1.13.1 Intangible assets

The Company follows cost model for recognition and measurement of intangible assets. Intangible assets are stated at the amount initially recognized less accumulated amortization and accumulated impairment losses, if any.

Cost of right of way of land with indefinite useful lives are not amortized but tested for impairment annually at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues or not. If not, the change is useful life from indefinite to finite is made on a prospective basis.

Cost of computer software is amortized on straight line basis over the useful life upto 5 years from the date of capitalization. The amortisation period and the amortisation method for Computer Software are reviewed annually. Computer Software are assessed for impairment whenever there is an indication that the intangible asset may be impaired.

Any intangible asset when determined obsolete and no further use, is written off.

1.13.2 Impairment of property, plant & equipment (PPE), E&E assets and other Intangible assets

At the end of each reporting period, the Company reviews whether there is an indication that its Property, Plant and Equipment, Capital Work in Progress,

Exploration and Evaluation Assets and Intangible Assets may be impaired. E&E Assets are reviewed for indicators of impairment as per Ind AS 106. If any indication exists, the Company estimates the asset's recoverable amount, which is the higher of cash-generating unit's (CGU) fair value less costs of disposal and its value in use. The recoverable amount is determined for CGU as a whole. For this purpose, Producing fields, LPG plant, Transportation Pipeline and Renewable Energy Units (other than captive power plants) are considered as Cash Generating Units (CGU).

Corporate assets and common service assets are also allocated to individual cash- generating units on a reasonable and consistent basis. When the carrying amount of all assets under the CGU exceeds the recoverable amount of CGU, the asset is impaired and is written down to its recoverable amount, by charging the impairment loss in the Statement of Profit and Loss.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate, that reflects current market assessments of the time value of money and the risks specific to the CGU.

An assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Company estimates the CGU's recoverable amount. A previously recognised impairment loss is reversed only if there has been a favourable change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognised.

When an impairment loss is subsequently reversed, the carrying amount of the asset or group of assets covered under the CGU is increased to the revised estimate of its recoverable amount, up to the carrying amount that would have been determined had no impairment loss been recognized for the asset or group of assets covered under the CGU in prior years. A reversal of an impairment loss is recognized in the Statement of Profit and Loss.

After a reversal, the depreciation charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

1.14.0 Inventories

Inventory of Finished goods of Crude Oil, Liquefied Petroleum Gas (LPG), and condensate are valued at cost determined using absorption costing method or net realizable value, whichever is lower. Cost of finished goods is determined based on direct cost and directly attributable services cost including depreciation and depletion. The value of such inventories includes excise duty, royalty and other levies, as applicable. Excise duty on finished stocks lying at manufacturing locations is provided for at the assessable value applicable at each of the locations based on end use. Net realizable value represents the estimated selling price of inventories less all estimated costs necessary to effect the sale.

Crude oil in unfinished condition in the flow line up to Group Gathering Station and Natural Gas in Pipeline are not valued, as these pipeline fills are necessary for the operation of the facility. Crude oil lying in flowlines from Group Gathering Station (GGS) / Oil Collecting Station (OCS) to tank farms are not valued, as these pipeline fills will always remain and are necessary for the operation of the facility. Crude oil in semi-finished condition in tanks in GGS/OCS are measured and valued at cost on absorption costing method or net realisable value, whichever is lower.

Inventory of stores and spares (including inventory in transit) and other raw materials are valued using weighted average cost or net realizable value whichever is lower.

Obsolete / unserviceable items, as and when identified, are written off. Any item of stores and spares including those in storage locations which have not moved for last four years as on date of Balance Sheet are identified as slow-moving items for which a provision of 95% of the book value is made.

Renewable Energy Certificates (REC) received by the Company on the basis of generation of renewable energy and certified by the competent authority, are held for trading and are not valued.

Physical verification of inventory including store and spare items (excluding materials in-transit) is carried out by the Company in a phased manner to cover all the items. Stores and Spares items of high and medium value are physically verified every year whereas items carrying low value are physically verified over a period of 3 years. The discrepancies noticed, if any, are accounted for in the year in which such differences are found.

1.15.0 Provisions including Decommissioning and restoration obligations

1.15.1 Provisions

Provisions are recognized when the Company has a present obligation as a result of a past event and it is probable that the Company will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account all the relevant facts, the risks and uncertainties surrounding the obligation. Provision is measured using the present value of cash flows estimated to settle the present obligation as on the reporting date.

Provisions towards cost of unfinished minimum work program (MWP) committed by the Company for all joint venture blocks are made when there is a present obligation on the basis of available facts as at the end of the reporting period.

1.15.2 Decommissioning and restoration obligations

Liabilities towards costs relating to assets retirement obligations are recognized when the Company has an obligation to plug and abandon a well, dismantle and remove a facility or an item of plant and to restore the site on which it is located, and when a reliable estimate of that liability can be made. Liabilities towards costs relating to dismantling, abandoning and restoring well sites, associated production facilities and plants are recognized at the commencement of drilling a well or when facilities and plants are installed, as the case may be. The amount recognized is the present value of the estimated future expenditure determined considering the depth and the type of wells (testing well, exploratory well, developed well etc.), facilities and plants installed in accordance with local conditions and requirements at current prices and escalated using appropriate inflation rate till the expected date of decommissioning and discounted using appropriate risk-free discount rate.

An amount equivalent to the decommissioning liability provision is recognized as part of the corresponding PPE, CWIP or Exploration & Evaluation Asset (E&E) as the case may be. The decommissioning cost in respect

of dry exploratory well is expensed off in the Statement of Profit and Loss as exploratory well cost.

Provision for decommissioning cost in respect of assets under joint operations is considered as per participating interest of the Company on the basis of estimates prepared by the operator.

Liability for decommissioning cost is updated annually at current cost based on latest available technical assessment. The unwinding of the discount is included as a finance cost. Any change in the present value of the estimated decommissioning provision other than unwinding of discount is adjusted to decommissioning provision and added to or deducted from the cost of the asset in the current period and is considered for depreciation (depletion) prospectively. In case, where the reversal of decommissioning provision exceeds the corresponding carrying value of the related assets, the excess amount is recognized in the Statement of Profit and Loss.

The Company considers the impact of health, safety and environmental legislation in estimating the decommissioning liability.

The actual cost incurred on settlement of the obligation is adjusted against the liability and the ultimate gain or loss is recognized in the Statement of Profit and Loss, when the designated oil / gas field or a group of oil/gas fields cease to produce.

1.16.0 Investments in subsidiaries, associates and joint ventures

The Company measures its investments in subsidiaries, associates and joint ventures at cost and the same are tested for impairment in case of any indication of impairment.

1.17.0 Financial instruments

1.17.1 Financial assets

1.17.1.1 Initial Recognition and Measurement

All regular purchases or sales of financial assets that require delivery of assets within a timeframe established by regulation or convention in the marketplace are recognized on a trade date basis which is the date on which the Company commits to purchase or sell the asset or investment date as the case may be.

The Company measures a financial asset at its fair value plus, in the case of a financial asset not subsequently measured at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset except for trade receivables which are initially measured at transaction price. Transaction costs of financial assets carried at fair value through profit or loss are expensed off in the Statement of Profit and Loss.

1.17.1.2 Classification of financial assets

The Company determines the classification of its financial assets based on its business model for managing the financial assets and the contractual terms of the cash flows. The Company's financial assets are classified into the following categories:-

a. those to be measured at fair value (either through other comprehensive income or through profit or loss). These includes equity securities at fair value through other comprehensive income (FVTOCI) and investment in mutual fund and leave encashment fund at fair value through profit or loss (FVTPL).

b. those to be measured at amortized cost. These comprise debt securities at amortized cost, trade receivables, loan receivables, cash and bank balances, other financial assets and receivables.

On initial recognition, the Company has made an irrevocable election to present the subsequent changes in fair value through other comprehensive income for equity instruments (other than in subsidiaries, joint ventures and associates) that are not held for trading.

1.17.1.3 Subsequent Measurement

A gain or loss in debt securities that is subsequently measured at amortized cost is recognized as a component of other income/expense when the asset is derecognized or impaired. Interest income from these financial assets is included in other income using the effective interest method.

Gain and losses on financial assets measured at fair value are recorded either through profit or loss or other comprehensive income. Upon derecognition, the cumulative fair value changes recognised in OCI is not reclassified from the equity to profit or loss.

1.17.1.4 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand, including offsetting bank overdrafts, and short-term highly liquid investments that are readily convertible to known amounts of cash, have a maturity of three months or less from the acquisition date.

1.17.1.5 Trade receivables

Trade receivables are recognized initially at their transaction price unless those contain a significant financing component in accordance with Ind AS 115.

1.17.1.6 Impairment of financial assets

The Company measures the loss allowance for all financial instruments (Investments, loans, cash calls receivable from JV partners, receivable against insurance claim and leave encashment and other financial assets) at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since its initial recognition. If the credit risk on a financial instrument has not increased significantly since its initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.

However, for trade receivables that result in relation to revenue from contracts with customers, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

1.17.1.7 De-recognition of financial assets

The Company de-recognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On de-recognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset.

1.17.2 Financial liabilities and equity instruments

1.17.2.1 Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

1.17.2.2 Financial liabilities

The Company initially recognizes a financial liability at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company's financial liabilities which are not held for trading are subsequently measured at amortized cost using the effective interest method which mainly include loans and borrowings, lease liabilities, financial guarantee contracts and other financial liabilities. However, financial guarantee contracts issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.

Interest expense that is not capitalized as part of costs of an asset is included in the 'finance costs' line item.

Gain or loss on financial liabilities are measured at amortized cost are recorded in profit or loss.

1.17.3 Financial guarantee contracts

Financial guarantee given by the Company are initially measured at their fair values, adjusted for transaction costs that are directly attributable to the issuance of the guarantees and are subsequently measured at the higher of loss allowance determined in accordance with Ind AS 109 and the amount initially recognised less cumulative amount of finance income recognised.

The Company measures finance income by amortizing the initial fair value of guarantee on a straight-line basis over the guarantee period.

Fair value of financial Guarantee contract issued by the Company for subsidiaries, associates and joint

or expenditure to the extent of the new partner's contribution towards past cost and balance is considered as miscellaneous receipts/expenses.

e) Gain or loss on sale on interest in block, is recognized in the Statement of Profit and Loss, except that no gain is recognized at the time of such sale if substantial uncertainty exists about the recovery of the costs applicable to the retained interest or if the Company has substantial obligation for future performance. The gain in such situation is treated as recovery of cost related to that block.

1.19.0 Segment Reporting

Considering the nature and associated risks and return of products and services, the Company has adopted its products and services (viz. Crude Oil, Natural Gas, LPG, Pipeline Transportation Renewable Energy and Others) as the primary reporting segments. There are no reportable geographical segments.

Segment assets, liabilities, income and expenses have been either directly identified or allocated to the segments on the similar basis as used for allocation of cost for the purpose of preparing the Financial Statements of the Company.

See Note 45 for the detailed disclosure related to segments.

1.20.0 Earnings per share

Basic earnings per share are calculated by dividing the net profit after tax for the year attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit after tax for the year attributable to equity shareholders of the Company and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.21.0 Dividend

The final dividend on shares is recorded as a liability on the date of approval by shareholders, and interim dividends are recorded as a liability on the date of declaration by the Company's board of directors.

1.22.0 Contingent Liabilities and Contingent Assets

Contingent liabilities are possible obligations that arise from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events not wholly within the control of the Company. A provision is recognised in respect of present obligations where the outflow of resources is probable (refer note 50) and all other cases are disclosed

as contingent liabilities unless the possibility of outflow of resources is remote.

Contingent liabilities relating to direct taxes, indirect taxes, guarantees, legal cases and others, whether disputed or not, are disclosed on the basis of judgment of the management/ independent experts and reviewed at each Balance Sheet date to reflect the current management estimate.