3.8. Provisions, Contingent Liabilities, Contingent Assets and Commitments
Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past
event, 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 recognised 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 the risks and uncertainties surrounding the
obligation. If the effect of time value of money is material and a reliable estimate of timing of future outflow of
resources can be made, provisions are discounted using an appropriate pre-tax discount rate. When discounting is
used, the increase in provision due to the passage of time is recognized as a Finance Costs.
Contingent Liabilities
Contingent liabilities are possible obligations whose existence will only be confirmed by future events not wholly
within the control of the Company, or present obligations where it is not probable that an outflow of resources will
be required or the amount of the obligation cannot be measured with sufficient reliability.
These are disclosed on the basis ofjudgment of the management / independent experts in the Financial Statements
by way of Notes to Accounts, unless possibility of an outflow of resources embodying economic benefit is remote
and are reviewed at each balance sheet date to reflect the current management estimate [Refer para 4.3].
Contingent Assets
Contingent assets are disclosed in the Financial Statements by way of Notes to Accounts when an inflow of
economic benefits is probable and are reviewed at each balance sheet date to reflect the current management
estimate.
Commitments
Capital and Other Commitments disclosed are in respect of items which in each case are above the materiality
threshold limit [Refer para 4.3].
3.9. Revenue Recognition
3.9.1 Revenue from sales of goods and services are recognized upon the satisfaction of a performance obligation, which
occurs when control transfers to the customer. Control of the goods is determined to be transferred to the customer
when the title of goods passes to the customer, which typically takes place when product is physically transferred
into a vessel, pipeline (other than Company owned pipeline) or other delivery mechanism. In respect of revenue
contracts for goods which provide for provisional pricing (wherever applicable) at the time of shipment, the final
price adjustment if any will be given effect in the period in which it is finalised/ settled.
3.9.2.Revenue is measured at the transaction price of the consideration received or receivable and represents amounts
receivable for goods and services including excise duty (wherever applicable) provided in the normal course of
business, net of discounts or rebates, GST and sales tax. Any retrospective revision in prices is accounted for in the
year of such revision.
3.10. Government Grants
Government Grants including the export incentives are not recognised until there is reasonable assurance that the
Company will comply with the conditions attached to them and that the grants will be received.
Government Grants are recognised in Statement of Profit and Loss on a systematic basis over the periods in which
the Company recognises as expenses the related costs for which the grants are intended to compensate.
Specifically, Government Grants whose primary condition is that the Company should purchase, construct or
otherwise acquire non-current assets are recognised as deferred revenue in the Balance Sheet and transferred to
Statement of Profit and Loss on a systematic and rational basis over the useful lives of the related assets.
The benefit of a Government loan at a below market rate of interest is treated as a Government Grant, measured as
the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.
3.11. Employee Benefits
Employee benefits include salaries, wages, contributory provident fund, gratuity, leave encashment towards un¬
availed leave, compensated absences, post-retirement medical benefits and other terminal benefits.
3.11.1Short Term Employee Benefits
All short term employee benefits are recognized at their undiscounted amount in the accounting period in which
they are incurred.
3.11.2 Post-Employment benefits
Defined Contribution Plans
Employee Benefit under defined contribution plans comprising Contributory provident fund, superannuation
benefit, Employee pension scheme-1995, etc. is recognized based on the undiscounted amount of obligations
of the Company to contribute to the plan. The superannuation benefit is paid to a fund administered through a
separate trust.
Defined Benefit Plans
Defined employee benefit plans comprising of gratuity, post-retirement medical benefits and other terminal
benefits, are recognized based on the present value of defined benefit obligation which is computed using the
projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting
period. These are accounted either as current employee cost or included in cost of assets as permitted.
Net interest on the net defined liability is calculated by applying the discount rate at the beginning of the period to
the net defined benefit liability or asset and is recognised in the Statement of Profit and Loss except those included
in cost of assets as permitted.
Remeasurement of defined retirement benefit plans, comprising actuarial gains and losses, the effect of the
changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest as defined above),
are recognized in other comprehensive income except those included in cost of assets as permitted in the period
in which they occur and are not subsequently reclassified to profit or loss.
The Company contributes all ascertained liabilities with respect to gratuity to the MRPL Gratuity Fund Trust (MGFT).
Liability towards post-retirement medical benefits and other terminal benefits etc. are unfunded.
The retirement benefit obligation recognised in the Financial Statements represents the actual deficit or surplus in
the Company's defined benefit plans. Any surplus resulting from this calculation is limited to the present value of
any economic benefits available in the form of reductions in future contributions to the plans.
3.11.3Other Long-term Employee Benefits
Other long term employee benefit comprises of leave encashment towards un-availed leave. These are recognized
based on the present value of defined obligation which is computed using the projected unit credit method, with
actuarial valuations being carried out at the end of each annual reporting period. These are accounted either as
current employee cost or included in cost of assets as permitted.
Re-measurements of leave encashment towards un-availed leave are recognized in the Statement of profit and
loss except those included in cost of assets as permitted in the period in which they occur.
3.11.4Termination Benefits
Expenditure on account of Termination Benefit schemes namely, premature retirement on medical grounds and
for providing compensation for death or permanent total disablement are charged to Statement of Profit and Loss
as and when incurred.
3.12. Borrowing or Finance Costs
Borrowing or Finance costs consists of interest and other costs incurred in connection with the borrowing of funds
and interest on lease liability.
Borrowing costs specifically identified to the acquisition or construction of qualifying assets are capitalized as
part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its
intended use. Capitalization of borrowing costs is suspended when active development of the qualifying asset is
interrupted other than on temporary basis and charged to the statement of Profit and Loss during such extended
periods. All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are
incurred.
3.13. Foreign Currency Transactions
Transactions in currencies other than the Company's Functional Currency (foreign currencies) are recognised 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 translated using closing exchange rate prevailing on the last day of
the reporting period.
3.14. Income Taxes
Income Tax Expense represents the sum of the Current Tax and Deferred Tax.
(i) Current Tax
The tax currently payable is based on Taxable Profit for the year together with any adjustment to tax payable
in respect of previous years. The Company's Current Tax is calculated using tax rates that have been enacted
or substantively enacted by the end of the reporting period.
Current Income Tax Assets and Liabilities are measured at the amount expected to be recovered from or paid
to the taxation authorities.
(ii) Deferred Tax
Deferred Tax is provided using the Balance Sheet method and is recognized 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.
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 all or part of
the asset to be recovered. Any such reduction shall be reversed to the extent that it becomes probable that
sufficient taxable profit will be available.
At the end of each reporting period, unrecognised deferred tax assets are reassessed to recognise a previously
unrecognised deferred tax asset to the extent that it has become probable that future taxable profit will
allow the deferred tax asset to be recovered.
Deferred Tax Liabilities and Assets are measured at the tax rates that are expected to apply in the period in
which the liability is settled or the asset realised, based on tax rates and tax laws that have been enacted or
substantively enacted by the end of the reporting period.
The measurement of Deferred Tax Liabilities and Assets reflects the tax consequences that would follow
from the manner in which the Company expects, at the end of the reporting period, to recover or settle the
carrying amount of its Assets and Liabilities.
Deferred Tax Assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India,
which is likely to give future economic benefits in the form of availability of set off against future income tax
liability. Accordingly, MAT is recognised as Deferred Tax Asset in the Balance Sheet when the asset can be
measured reliably and it is probable that the future economic benefit associated with asset will be realised.
Current and Deferred Tax for the year
Current and Deferred Tax are recognised in Statement of Profit and Loss, except when they relate to items that are
recognised in Other Comprehensive Income or directly in equity, in which case, the Current and Deferred Tax are
also recognised in Other Comprehensive Income or directly in Equity respectively.
3.15. Statement of Cash Flows
Statement of Cash Flows are reported using the indirect method, whereby Profit After Tax is adjusted for the effects
of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments
and item of income or expenses associated with Investing or Financing activities. The Cash Flows are segregated
into Operating, Investing and Financing activities.
4. Critical Accounting Judgments, Assumptions and Key Sources of Estimation Uncertainty
Inherent in the application of many of the Accounting Policies used in preparing the Financial Statements is
the need for management to make judgments, estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and
expenses. Actual outcomes could differ from the estimates and assumptions used.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised and future periods are affected.
Key source of judgments, assumptions and estimation uncertainty in the preparation of the Financial Statements
which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial
year, are in respect of useful lives of Property, Plant and Equipment, Employee Benefit Obligations, Provision for
Income Tax and measurement of Deferred Tax Assets.
4.1 Critical judgments in applying accounting policies
The following are the critical judgements, apart from those involving estimations (Refer note 4.2), that the
Management have made in the process of applying the Company's accounting policies and that have the
significant effect on the amounts recognized in the Financial Statements.
a) Determination of Functional Currency
Currency of the primary economic environment in which the Company operates ("the Functional Currency") is
Indian Rupee (?) in which the company primarily generates and expends cash. Accordingly, the management
has assessed its Functional Currency to be Indian Rupee (?).
b) Identification of Cash Generating Unit (CGU)
The Company is engaged in the business of refining of crude oil and marketing of related products.
Considering the business operations and inter-dependability of the resources, the management has
determined Company as a single CGU.
4.2 Assumptions and key sources of estimation uncertainty
Information about estimates and assumptions that have the significant effect on recognition and measurement of
assets, liabilities, income and expenses is provided below. Actual results may differ from these estimates.
a) Useful life of Property, Plant and Equipment and Intangible Assets
Management reviews its estimate of the useful lives of PPE and Intangible Assets at each reporting date,
based on the future economic benefits expected to be consumed from the Assets.
b) Defined Benefit Obligation (DBO)
Management's estimate of the DBO is based on a number of critical underlying assumptions such as standard
rates of inflation, medical cost trends, mortality, discount rate and anticipation of future salary increases.
Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit
expenses.
c) Provision for Income Tax
Significant judgements are involved in determining the provision for Income Taxes, including amount
expected to be paid/recovered for uncertain tax positions.
d) Recognition of Deferred Tax Assets
The extent to which Deferred Tax Assets can be recognized is based on an assessment of the probability
of the Company's future taxable income against which the Deferred Tax Assets can be utilized. In addition,
significant judgement is required in assessing the impact of any legal or economic limits or uncertainties.
e) Leases
Identifying whether a Contract includes a Lease
The Company enters into hiring/service arrangements for various assets/services. The Company evaluates
whether a contract contains a lease or not, in accordance with the principles of Ind AS 116. This requires
significant judgments including but not limited to, whether asset is implicitly identified and substantive
substitution rights available with the supplier, decision making rights with respect to how the underlying
asset will be used, economic substance of the arrangement, etc.
Determining Lease Term (Including Extension and Termination Options)
The Company considers the lease term as the non-cancellable period of a lease adjusted with any option
to extend or terminate the lease, if the use of such option is reasonably certain. Assessment of extension/
termination options is made on lease by lease basis, on the basis of relevant facts and circumstances. The
lease term is reassessed if an option is actually exercised. In case of contracts, where the Company has the
option to hire and de-hire the underlying asset on some circumstances (such as operational requirements),
the lease term is considered to be initial contract period.
Identifying Lease Payments for Computation of Lease Liability
To identify fixed (including in-substance fixed) lease payments, the Company consider the non-operating
day rate/standby as minimum fixed lease payments for the purpose of computation of Lease Liability and
corresponding Right of Use Assets.
Low Value Leases
Ind AS 116 requires assessment of whether an underlying asset is of low value, if lessee opts for the option of
not to apply the recognition and measurement requirements of Ind AS 116 to leases where the underlying
asset is of low value. For the purpose of determining low value, the Company has considered nature of assets
and concept of materiality as defined in Ind AS 1 and the conceptual framework of Ind AS which involve
significant judgment [Refer para 4.3].
Determining Discount Rate for Computation of Lease Liability
For computation of Lease Liability, Ind AS 116 requires lessee to use their incremental borrowing rate as
discount rate if the rate implicit in the lease contract cannot be readily determined.
For leases denominated in Company's Functional Currency, the Company considers the incremental
borrowing rate to be Corporate Bond Rates for similar rated Organizations. For leases denominated in foreign
currency, the Company considers the incremental borrowing rate as risk free rate based on US treasury bills
as adjusted with applicable credit risk spread and other lease specific adjustments like relevant lease term
and currency of the obligation.
5.1 Property, Plant and Equipment pledged as security [refer note 22]:
Working capital borrowings from consortium banks are secured by way of first ranking pari passu charge by way of
hypothecation of Company's stocks of Raw Material, Finished Goods, Stock-in-Process, Stores, Spares, Components,
Trade receivables, Outstanding Money Receivables, Claims, Bills, Contract, Engagements, Securities both present
and future and further secured by second ranking pari passu charge over companies movable and immovable
property (all Property, Plant & Equipment including investment property) both present and future.
Loan from EXIM Bank is secured by first ranking pari passu charge by way of hypothecation / mortgage on
moveable fixed assets, lands and other immovable properties, both present and future.
Loan from OIDB was secured by way of first ranking pari passu charge by way of hypothecation / mortgage only
on Property, Plant & Equipment / projects financed out of loan proceeds of OIDB and the same was repaid during
the current financial year.
5.2 The Company is eligible for certain economic benefits such as exemptions from custom duty on import of capital
goods under Export Promotion Capital Goods (EPCG) scheme of Central Government. The Company accounts
for the benefits received for custom duty on purchase of Property, Plant and Equipment as Government grants.
During the current financial year the company has received economic benefits of ? Nil (Year ended March 31, 2025
? 4.23 million) included in the cost of Property, Plant and Equipment by crediting deferred Government Grant
and such grant is amortised over the remaining useful life of the Property, Plant and Equipment. The amortization
made including benefits received during earlier years is amounting to ? 162.60 million for the year ended March
31, 2026 (Year ended March 31,2025 ? 162.97 million).
5.3 Disclosure as per Ind AS 8 - 'Accounting Policies, Changes in Accounting Estimates and Errors' and Ind AS 1
'Presentation of Financial Statements'
During the current financial year, the Company has reviewed and changed the accounting policy on Property, Plant
and Equipment (PPE) related to Corporate Environment Responsibility (CER) obligation towards specified projects.
The effects of the said change in accounting policy are made in line with Ind AS 8 "Accounting Policies, Changes
in Accounting Estimates and Errors" and Ind AS 1 "Presentation of Financial Statements". Related adjustments
are considered from April 1, 2025 resulting in addition to Property, Plant and Equipment of ? 1,012.42 million
and corresponding increase in liability (net of expenses already accounted) along with increase in depreciation
expense by ? 182.88 million and decrease in other expenses by ? 266.29 million.
Considering the fact that above adjustment resulted in increase in profit before tax of ? 83.41million which does
not have material effect on the information on the Financial Statement, as such the effect of the previous periods
is considered in the financial statement of the current year.
5.4 During the current financial year, the company has reclassified Freehold land measuring 2.37 acres situated in the
state of Gujarat having gross carrying amount of ? 0.91 million as Investment Property. The said land is currently in
the possession of the company, some trespassing has been observed and company is in the process of initiating
necessary action in this regard.
5.5 During the current financial year, upon completion of periodic physical verification of Property, Plant and
Equipment, an amount of ? 1.18 million (Year ended March 31, 2025 ? Nil) has been considered as impairment
adjustment.
6.1 Includes leasehold lands where the ownership will be transferred to the Company at the end of the lease period.
These leasehold lands are not depreciated.
6.2 Right-of-Use Assets includes assets having gross carrying amount of ? 1,965.94 million (As at March 31, 2025 ?
1,888.15 million), which is in possession of the Company towards which formal lease / sale deeds are yet to be
executed [refer note 48.1].
The above includes land pertaining to Refinery Land (Phase I and II) measuring to 3.47 acres, for which company
has informed to Karnataka Industrial Area Development Board (KIADB) to take suitable action to surrender / de-
notify same as it is under encroachment. At present the value of the said land is not ascertainable and expected
amount is insignificant.
6.3 The above includes land measuring to 47.65 acres having gross carrying amount of ? 248.70 million, which was
allotted to the company for a specific project which has been permanently abandoned. The company plans to use
the land for future projects and / or other activities.
6.4 Plant and Equipment represents storage facilities taken on lease.
6.5 An amount of ? 6.00 million (Year ended March 31, 2025 ? 2.40 million) towards depreciation charged
to Right-of-Use Asset has been capitalized as component of cost of Capital Work-in-Progress (CWIP) [refer note
7.3].
7.1 Additions to CWIP includes borrowing costs amounting to ? Nil (For the year ended March 31, 2025 ? 0.02 million)
and allocated / will be allocated to different class of assets. The rate used to determine the amount of borrowing
costs eligible for capitalisation for the year ended March 31, 2025 was 6.83% which was the effective interest rate
on borrowings.
7.2 An amount of ? 8.84 million (Year ended March 31, 2025 ? 6.89 million) towards Finance cost on lease liability has
been capitalized as a component of cost of Capital Work-in-Progress (CWIP).
7.3 An amount of ? 6.00 million (Year ended March 31,2025 ? 2.40 million) towards depreciation charged to Right-of-
Use Asset has been capitalized as a component of cost of Capital Work-in-Progress (CWIP).
7.4.1 Pursuant to the permanent abandonment of a project as mentioned in note 6.3, the company has written off
?133.67 million during the year (Year ended March 31, 2025 ? Nil). Consequently, the company has surrendered
corresponding unavailed Viability Gap Funding (VGF) sanctioned by Centre for High Technology (CHT) amounting
to ?1,000 million.
8.1 During the current financial year, the company has reclassified the land measuring 2.37 acres, which is in the State
of Gujarat from Property, Plant & Equipment to Investment Property [refer note 5.4]. Investment Property also
includes land measuring 102.995 acres in the State of Tamil Nadu. These lands are held for capital appreciation.
8.2 There is no contractual obligation to purchase, construct or develop investment property
8.3 The net amount recognised in the Statement of Profit and Loss for investment property for current year is ? Nil
(Year ended March 31, 2025 ? Nil).
8.4 No Right-of-Use Asset has been included in the investment property as given above.
8.5 The best evidence of fair value is current prices in an active market for similar properties.
8.6 The fair value of the freehold lands [refer note 8.1] held by the company is ? 554.20 million (As at March 31,2025 ?
484.08 million). The fair value is based on the valuation carried out by independent external valuers on November
2, 2024 and January 21, 2026. Based on management's assessment of prevailing market conditions, there have
been no significant changes that would materially affect the fair value of the investment property since the date
of the valuation. Accordingly, the management believes that the fair value determined as at the valuation date
reasonably approximates the fair value as at the reporting date. The fair value of the respective properties is more
than the carrying amount.
The Company has goodwill of ? 4.04 million towards excess consideration paid over net assets acquired for
acquisition of Nitrogen plant and of ? 3,768.74 million on account of amalgamation of erstwhile subsidiary
company ONGC Mangalore Petrochemicals Limited (OMPL) in the respective years.
As the Company has determined that its entire operations fall into a single Cash Generating Unit (CGU) [Refer
Note 4.1 (b)], the entire goodwill relates to the single CGU. The carrying value of the CGU as at March 31, 2026 is
? 2,13,403.41 million.
The Company performed its annual impairment test for the financial year ended March 31, 2026.
The recoverable amount of the CGU has been determined at ? 3,12,179.68 million based on the value in use
calculation using discounted cash flow model based on business assumptions covering a fifteen-year period and
is in line with the business plan of the company.
The Company has performed sensitivity analysis on the assumptions used basis the internal and external
information / indicators of future economic conditions. However, the sensitivity analysis may not be representative
of the actual change as it is unlikely that the change in assumptions would occur in isolation of one another as
some of the assumptions may be correlated.
Since the value in use is higher than the carrying amount of the CGU, the Company has not determined the fair
value less costs of disposal separately.
During previous financial year, the Board of Directors approved the revised acquisition price of ? 48.708 per
share for a total consideration of ? 656.58 million to acquire 1,34,80,000 equity shares of Mangalore SEZ Limited
(MSEZL). During the current financial year, the company has entered into a Share Purchase Agreement (SPA) for
the same and the acquisition process is under progress. After this acquisition, equity stake of the company shall
increase from 0.96% to 27.92%. An amount of ? 0.07 million has been incurred towards this share purchase
agreement [Refer Note 13(h)].
11.2.2 Details of Investment: Startup Fund
During the year ended March 31, 2026, the Company has recognized Fair Value gain in ONGC Start up Fund
to the tune of ? 5.24 million (Year ended March 31,2025 ? 20.69 million).Further, an amount of ? 1.00 million
has been paid towards subscription of units pending allotment as at March 31, 2026 [Refer note 13 (h)].
The investment in ONGC Startup Fund has been measured at fair value (level 2 hierarchy).
12.1 Company has policy of providing financial assistance to Schedule Caste / Schedule Tribe category dealers for Retail
Outlets under the Corpus Fund Scheme (CFS). Under this scheme upon written request seeking working capital
loan / assistance by dealer, the company provides working capital loan for a full cycle of operation (equivalent
to seven days sales volume) of the dealer. This working capital loan as well as the interest at the specified rate
thereon will be recovered in hundred equal monthly instalments from the thirteenth month of commissioning
of the dealer operated Retail Outlet.
13.1 As per the Government of India's scheme for Promotion of flagging of merchant ships in India by providing
subsidy support to Indian Shipping companies in global tenders floated by Ministries / Departments / Central
Public Sector Enterprises (CPSEs), the eligible Indian shipping company shall be paid the subsidy amount along
with the charter hire amount as per the contract term by the Company and the Company will be then reimbursed
by Government under the scheme.
17.1 Generally, the Company enters into long-term sales arrangement with Oil Marketing Companies for domestic
sales and short term arrangement with others. Besides, the export of products are undertaken through term
contracts, spot international tenders, short term tender arrangements, B2B arrangements and supplies to SEZ
customers. The average credit period [wherever applicable] on sales ranges from 5 to 45 days (Year ended
March 31, 2025 ranges from 7 to 45 days). Interest is not charged on trade receivables for the applicable credit
period from the date of invoice. For delayed period of payments, interest is charged [wherever applicable] as per
respective arrangements, which is upto 3% per annum (Year ended March 31, 2025 upto 3% per annum) over the
applicable bank or benchmark rate on the outstanding balance.
17.2 Of the trade receivables, balance as at March 31, 2026 of ? 53,909.39 million (As at March 31, 2025
? 33,587.11 million) are due from the customers mentioned below. There are no other customers who represent
more than 5% of the total balance of trade receivables other than mentioned below :
Note: Major customers' identity are not disclosed on account of market confidentiality. Trade receivable from
individual customer for current / previous year constituting not more than 5% of total trade receivables amount
has not been disclosed.
17.3 Usually, the Company collects all receivables from its customers within the applicable credit period. The Company
assesses impairment on trade receivables from all the customers on facts and circumstances relevant to each
transaction.
17.4.1 Secured by bank guarantees / letter of credit received from customers.
17.4.2 The above includes trade receivables pertaining to Retail Outlets (RO) dealers amounting to ? 127.77 million (As
at March 31, 2025 ? 114.88 million). From these RO dealers, the company has received interest free refundable
Security Deposit (SD) to comply with obligations related to RO dealership amounting to ? 66.20 million (As at
March 31, 2025 ? 51.40 million). The company has a right to adjust any dues to it from the Security Deposit at the
time of resignation/ termination including trade receivables subject to applicable conditions as per Dealership
agreement
20.1 Terms/rights attached to Equity shares
The Company has two classes of equity shares having a par value of ? 10 per share and ? 10,000 per share. Each
holder of equity shares is entitled to one vote per share. The dividend (if any) proposed by the Board of Directors
is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining
assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the
number of equity shares held by the shareholders.
21.1 An amount of ? 93.63 million as at March 31, 2026 (As at March 31, 2025 ? 76.78 million) is shown as deemed
equity which denotes the difference between the fair value of Corporate Guarantee received from Holding
Company and the consideration paid by the company .
21.2 The Company created capital redemption reserve on redemption of preference share capital during the financial
years 2011-12 and 2012-13.
21.3 The Company created securities premium on issue of equity share capital and the same can be utilized as per the
requirement of the Companies Act, 2013.
21.4 The General reserve is used from time to time to transfer profits from retained earnings for appropriation
purposes. As the general reserve is created by a transfer from one component of equity to another and is not an
item of other comprehensive income, items included in the general reserve will not be reclassified subsequently
to Statement of Profit and Loss.
21.5 Other reserve represents excess consideration paid towards acquisition of non-controlling interest in erstwhile
subsidiary company ONGC Mangalore Petrochemicals Limited (OMPL) from non-controlling share holders.
21.6 The amount that can be distributed by the Company as dividend to its equity shareholders is determined
considering the requirements of the Companies Act, 2013 and the dividend distribution policy of the Company.
Thus, the amount reported in General Reserve is not entirely distributable.
21.7 On March 3, 2026, the Company had declared an interim dividend of ? 4.00 per share (40%) amount to ? 7,010.40
million which has since been paid.
21.8 The company has complied with the guidelines of Department of Investment and Public Asset Management
(DIPAM) on Capital Restructuring of Central Public Sector Enterprises (CPSEs) including payment of dividend for
financial year 2025-26.
For the Financial Year 2024-25, considering Company's Capital Expenditure and loan repayments plans due
in FY 2024-25 and FY 2025-26, the Company did not declare dividends as per DIPAM Guidelines. Accordingly,
the Company had represented to the Ministry of Petroleum and Natural Gas (MoPNG), being its Administrative
Ministry, for grant of exemption from payment of dividend.
22.1 Foreign Currency Borrowings (FCTL) :
22.1.1 Foreign Currency Borrowings are USD denominated Loans and carries variable rate of interest, which is
linked with three month SOFR plus spread (Interest Rate as at March 31, 2026 is 4.75% and Interest rate for
corresponding loan as at March 31, 2025 was 5.40%).
22.1.2 Foreign Currency Borrowing is secured by first ranking pari passu charge by way of hypothecation / mortgage
on moveable Property, Plant and Equipment, lands and other immovable properties both present and future.
22.1.3 ? 1,668.83 million (As at March 31,2025 of ? 1,367.05 million) is repayable within one year i.e. Current Maturities
of long term debt has been shown as Current Borrowing.
22.3 Interest Free Loan from Government of Karnataka
22.3.1 This Loan represents amounts payable on account of "Interest free loan" received from Government of
Karnataka. This interest free loan against Value Added Tax (VAT) / State Goods and Services Tax (SGST) will be
repayable from March 31,2028.
22.3.2 The benefit of a Government loan at a below-market rate of interest is treated as a government grant (Ind AS
20). The Interest free loan is recognised and measured in accordance with Ind AS 109, Financial Instruments.
The benefit of the Interest free loan is measured as the difference between the initial carrying value of the loan
determined in accordance with Ind AS 109, and the proceeds received.
22.3.3 Interest Free Loan from Government of Karnataka - VAT / SGST Loan are secured by bank guarantees given by
the company.
22.4 Loan Repayable on Demand
Working capital borrowings pertaining to the company amounting to ? 3,900.00 million as at March 31, 2026
(As at March 31, 2025 ? 4,266.58 million) from consortium banks are secured by way of first ranking pari passu
charge by way of hypothecation of Company's stocks of Raw Material, Finished Goods, Stock-in-Process, Stores,
Spares, Components, Trade receivables, Outstanding Money Receivables, Claims, Bills, Contract, Engagements,
Securities both present and future and further secured by second ranking pari passu charge over companies
movable and immovable property (all Property, Plant & Equipment including investment property) both present
and future.
22.7 Deferred Payment Liabilities - From Government of Karnataka :
22.7.1 Deferred payment liability against tax payable under Central Sales Tax (CST) represents amount payable on
account of "Interest free loan" received from Government of Karnataka. This sum of the deferred CST loan
against Central Sales Tax (CST) is repayable in five equal annual instalments without interest after the closure of
deferment period.
22.7.2 The benefit of a Government loan at a below-market rate of interest is treated as a government grant (Ind AS
20). The Interest free loan is recognised and measured in accordance with Ind AS 109, Financial Instruments.
The benefit of the Interest free loan is measured as the difference between the initial carrying value of the loan
determined in accordance with Ind AS 109, and the proceeds received.
22.8 Export Packing Credit:
Export Packing Credit from Union Bank of India carries a fixed rate of interest i.e., 6% p.a. and is repayable within
90 days from each disbursal.
22.9 Other Working Capital Loan :
Unsecured short term working capital loan from bank amounting to ? 36,961.61 million as at March 31, 2026 (As
at March 31, 2025 ? 27,756.67 million) (Interest rate as at March 31, 2026 is in range of 5.90% to 7.25% and March
31, 2025 was in range of 7.02% to 7.48%).
22.10 The repayment schedules disclosed above are based on contractual cash outflows and hence will not reconcile
to carrying amounts of such borrowings which are accounted at amortised cost.
23.1 No amount is due for payment to the Investor Education and Protection Fund.
23.2 Price reduction schedule
Payable against capital goods includes ? 86.13 million (As at March 31, 2025 ? 55.96 million) relating to amounts
withheld from vendors pursuant to price reduction schedule which will be settled on finalisation of proceedings
with such vendors. When the withheld amounts are ultimately finalised, the related adjustment is made to the
Property, Plant and Equipment prospectively.
23.3 Includes an amount of ? 699.55 million toward Corporate Environment Responsibility (As at March 31, 2025 ? Nil)
(Refer note 5.3)
25.1 As per the amendments made to Income Tax Act, 2025 vide Finance Act, 2026, from FY 2026-27 onwards, companies
opting for lower tax rate as per Section 200 are allowed to carry forward and utilise the MAT Credit subject to certain
conditions, which was not hitherto allowed under related provisions of the Income Tax Act, 1961 applicable up to
FY 2025-26. Company is currently following the old tax regime and considering these amendments, intends to opt
for lower tax rate under Section 200 of Income Tax Act, 2025 from Financial Year 2026-27.
As deferred tax assets and liabilities shall be measured at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled, accordingly, the Company considered effective tax rate of
25.168% as against 34.944% for measuring the expected future realisations and settlements.
In view of above, deferred tax asset on account of MAT credit of ? 18,024.83 million as at March 31, 2026 has not
been carried forward to the extent that it is probable that future taxable profit based on projections will not be
available against which MAT Credit can be utilised. Further, due to application of reduced effective tax rates, the
carrying amount of deferred tax liability net of deferred tax asset excluding on account of MAT Credit is reduced
by ? 11,409.82 million as at March 31 2026.
26.1 Trade payables include ? 37,014.06 million (As at March 31, 2025 of ? 12,733.48 million) for which ONGC has given
guarantees on behalf of the Company.
26.2 The average credit period [wherever applicable] on purchases of crude, stores and spares, other raw material,
services, etc. ranges from 4 to 90 days (Year ended March 31, 2025 ranges from 4 to 90 days). Thereafter, interest is
charged [wherever applicable] upto 6.75 % per annum (Year ended March 31, 2025 upto 7.50% per annum) over
the relevant bank or benchmark rate as per respective arrangements on the outstanding balances. The Company
has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit
terms.
(e) Reason for Shortfall :
The Company has allocated a total CSR budget of ? 654.18 million for various projects under the items
listed in Schedule VII of the Companies Act, 2013 in FY 2025-26. During the financial year, an expenditure
of ? 46.22 million was incurred against the allocated budget. The shortfall of ? 607.96 million is primarily
due to milestone-based payments for multi-year ongoing projects, which are currently in various stages of
implementation.
In compliance with statutory provisions, the unspent amount of ? 607.96 million will be transferred to the
Unspent CSR Account (UCSRA) within the stipulated timeline as applicable, and will be utilized in accordance
with the applicable CSR Rules.
Additionally, ? 225.78 million was transferred to the UCSRA (Unspent CSR Account) for the financial year
2023-24, out of which ? 36.51 million has been utilized during the financial year 2025-26 as per CSR
guidelines. Furthermore, ? 705.21 million was transferred to the UCSRA for the financial year 2024-25, out of
which ? 403.97 million has been utilized during 2025-26. The remaining balance is planned to be utilized by
2026-27.
39 Leases39.1 Obligations under finance leases
39.1.1 The Company has adopted Ind AS 116 'Leases' effective April 1, 2019. The Company has entered into lease
agreements for lands which have been classified as finance leases and the same is now disclosed as Right of
Use Assets (ROU). The ownership of the lands will be transferred to the Company at the end of the lease term
with nominal payment of administrative charges. The lease term ranges from 2 to 24 years.
Financial lease obligation as at March 31,2026 is immaterial (As at March 31, 2025 : immaterial).
39.2 Operating lease arrangements39.2.1 Leasing arrangements
The Company has adopted Ind AS 116 'Leases' effective April 1, 2019. The Company has entered into
arrangements for buildings, right of way, storage facilities and lease of land which have been classified as
operating leases and the same is now disclosed as Right of Use Assets (ROU). The lease period for buildings
ranges from 5 years to 20 years, for right of way ranges from 5 years to 43 years, for storage facilities ranges
from 6 to 10 years and for leases of land ranges from 16 years to 99 years. For these leased assets, the Company
does not have option to purchase the same at the end of the lease period. Generally, the lease arrangements for
land requires Company to make upfront payments at the time of the execution of the lease arrangement with
annual recurring charges with escalations in annual lease rentals.
39.2.2 Payments recognized as an expense
The Company has adopted Ind AS 116 'Leases' effective April 1, 2019 and wherever the lease is short term lease,
lease for low value assets or having variable lease payments are not included in lease liabilities.
Present Status of Provident Fund (Trust) :
(a) Based on the request from the Board ofTrustees of Provident Fund of MRPL and also by the Company, EPFO
has issued the order dated December 12, 2022, stating that the exemption granted to the establishment
stands surrendered w.e.f December 31, 2022 and the company has to report the compliances as un¬
exempted establishment with effect from January 2023. Accordingly, from January 2023 onwards, the
Company has started remitting the contribution towards the Provident Fund to EPFO along with the
applicable administrative charges thereon.
(b) The company has transferred all its members' balances and the corresponding investments held in
Government Securities along with the other funds available with PF Trust (including funds realised from
sale of investments in other securities) to EPFO. As the amount transferred to EPFO together with the
face value of securities / instruments, is more than the members' balances including the accrued interest
thereon as on December 31, 2022, no additional provision is warranted during the current financial year
(Year ended March 31, 2025 ? Nil). The Company is awaiting for a formal notification of cancellation of
exemption and also gazette notification under Para 28(5) of the Employees' Provident Funds Scheme,
1952.
40.1.2 Defined benefit plans
40.1.2.1 Brief Description: A general description of the type of Defined benefit plans are as follows:
a) Gratuity:
15 days salary for every completed year of service. Vesting period is 5 years (the Company does not have
any fixed term employment) and the payment is restricted to ? 2.50 million (during the current financial
year, the IDA has risen beyond 50%).
The MRPL Gratuity Fund Trust was formed on April 20, 2007 and investments of the funds received from
the company after actuarial valuation and the investment of the funds upto June 28, 2013 was made in
the manner prescribed by Income tax Rule 67(1) of the Income Tax Rules ,1962 as amended from time to
time.
The Funds of MRPL Gratuity Fund Trust after June 28, 2013 are being invested in Group Gratuity Cash
Accumulation Scheme (Traditional Fund) of various insurance companies.
b) Post-Retirement Medical Benefits (PRMB):
After retirement, on payment of one time lump sum contribution, the superannuated employee and his/
her dependent spouse and dependent parents will be covered for medical benefit as per the rules of the
Company.
The company has invested a part of its PRMB liability in LIC's Group Post Retirement Medical Benefit
Plan to the tune of ? 137.11 million (Year ended March 31, 2025 ? 140.39 million) and the accumulated
balance (including accruals thereon) as on March 31, 2026 stands at ? 288.64 million (As at March 31,2025
? 140.53 million).
c) Resettlement Allowance:
At the time of superannuation, employees are entitled to settle at a place of their choice and they are
eligible for Settlement Allowance.
40.2 Other long term employee benefits40.2.1 Leave encashment
A brief description on Leave encashment are as follows:
a) Earned Leave Benefit (EL) :
Accrual - 32 days per year.
Accumulation up to 300 days allowed.
EL accumulated in excess of 15 days is allowed for encashment while in service provided the EL encashed
is not less than 5 days.
b) Half Pay Leave (HPL) :
Accrual - 20 days per year.
Encashment while in service is not allowed.
Encashment on retirement is permitted; restricted up to 300 days along with Earned leave.
The liability for above leaves (a & b) are recognized on the basis of actuarial valuation.
The company has invested a part of its EL and HPL liability in LlC's New Group Leave Encashment
Plan to the tune of ? 500.00 million (Year ended March 31, 2025 ? 449.90 million) and the
accumulated balance (including accruals thereon) as on March 31, 2026 stands at ? 1,039.58 million
(As at March 31, 2025 ? 500.43 million).
40.3 Termination Benefits :40.3.1 Premature Retirement on Medical Grounds :
The Company has an approved scheme of Premature Retirement on Medical Grounds. Ex-gratia payment
equivalent 60 days emolument for each completed year of service or the monthly emoluments at the time of
retirement multiplied by the balance months of service left before normal date of retirement, whichever is less
is payable apart from Superannuation Benefits.
40.3.2 Scheme for Self Insurance for providing lump-sum monetary compensation :
Under the scheme of 'Post Retirement Benefit and Benefit on Separation; in case of employee's death or
suffering permanent total disablement due to an accident arising out of and in the course of employment,
a compensation equivalent to 100 months Basic Pay plus Dearness Allowance (DA) without laying down any
minimum amount is payable.
40.3.3 Benefits of Separation under SABF (re-nomenclatured now as MDCPS) :
In case of death / permanent disablement of an employee while in service in the Company, the beneficiary has
to exercise desired options available within 6 months from the date of death / permanent total disablement.
40.3.4 Terminal benefits are unfunded plans, and no plan assets are involved.
40.3.5 Termination Benefits are charged to Statement of Profit and Loss as and when incurred.
41 Segment Reporting
The Company operates only in a single segment viz. downstream petroleum sector. As such reporting is done on
a single segment basis.
41.1 Information about major customers
Company's significant revenues are derived from sales to oil marketing companies which is 60% and 57% of the
Company's sales related to petroleum products for the year ending March 31, 2026 & March 31, 2025 respectively.
The total sales to such companies amounted to ? 6,34,951.63 million for the year ended March 31, 2026 and ?
6,27,436.44 million for the year ended March 31, 2025.
No customer (excluding oil marketing companies mentioned above) for the years ended March 31, 2026 and
March 31,2025 contributed 10% or more to the Company's revenue.
41.2 Information about geographical areas:
a) The Company is domiciled in India. The amount of its revenue from customers broken down by location of
customers is tabulated below:
42.3 Transactions with other Government-Controlled Entities
The Company is a Government related entity, engaged in the business of refining of crude oil and marketing of
petroleum products. The Company also deals on regular basis with entities directly or indirectly controlled by the
Central / State Governments through its Government authorities, agencies, affiliations and other organizations
(collectively referred as "Government related entities").
Apart from transactions with Company's group Companies, the Corporation has transactions with other
Government related entities, including but not limited to the followings:
• Sale and purchase of products;
• Rendering and receiving services;
• Leasing of assets;
• Depositing and borrowing money; and
• Use of public utilities
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.
43 Financial instruments43.1 Capital Management
The Company's objective when managing capital is to safeguard its ability to continue as going concern so that
the Company is able to provide maximum return to stakeholders and benefits for other stakeholders; and maintain
an optimal capital structure to reduce the cost of capital.
The Company maintains its financial framework to support the pursuit of value growth for shareholders, while
ensuring a secure financial base. In order to maintain or adjust the capital structure, the Company may vary the
distribution of dividends to shareholders, return capital to shareholders, issue new shares or sell assets to reduce
debt.
The capital structure of the Company consists of net debt (borrowings as detailed in note 22 offset by cash and
bank balances) and total equity of the Company.
The Company's management reviews the capital structure of the Company on quarterly basis. As part of this review,
the management considers the cost of capital and the risks associated with each class of capital requirements and
maintenance of adequate liquidity.
43.2.1 Investment in Joint Venture has not been disclosed above as these are measured at cost less impairment, if any.
43.3 Financial risk management objectives
The Company's Risk Management Committee monitors and manages key financial risks relating to the operations
of the Company by analysing exposures by degree and magnitude of risks. These risks include market risk
(including currency risk and interest rate risk), credit risk and liquidity risk.
43.4 Market Risk
Market risk is the risk or uncertainty arising from possible market price movements and their impact on the future
performance of a business. The major components of market risk are foreign currency exchange risk and interest
rate risk.
43.5 Foreign currency risk management
The Company undertakes transactions denominated in foreign currencies, primarily for purchases of crude oil
and exports sales and has borrowings denominated in foreign currency; consequently, exposures to exchange
rate fluctuations arise. Significant carrying amounts of the Company's foreign currency denominated monetary
assets and monetary liabilities at the end of the reporting period are as follows:
43.5.1 Foreign currency sensitivity analysis
The Company is mainly exposed to the currency of United States of America (USD). Sensitivity of profit or loss
arises mainly from USD denominated receivables and payables.
As per management's assessment of reasonable possible changes in the exchange rate of /- 5% between USD-
INR currency pair, sensitivity of profit or loss only on outstanding foreign currency denominated monetary items
at the period end is presented below:
43.5.2 Forward foreign exchange contracts
The Company books short term forward contracts upto a maximum period of 30 days to the limited extent when
export receivables date and import payments date do not fall within the spot date.
43.6 Interest rate risk management
The Company has availed borrowings at fixed and floating interest rates, hence is exposed to interest rate risk.
The Company has not entered into any of the interest rate swaps and hence the Company is exposed to interest
rate risk.
Interest rate sensitivity analysis
The sensitivity analysis below have been determined based on the exposure to interest rates at the end of the
reporting period. For floating rate borrowings, the analysis is prepared assuming the amount of the borrowings
outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or
decrease is used for disclosing the sensitivity analysis.
If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company's
profit for the year ended March 31,2026 would decrease/increase by ? 250.00 million (for the year ended March
31, 2025 : decrease/increase by ? 232.16 million). This is mainly attributable to the Company's exposure to interest
rates on its variable rate borrowings (considered on closing balance of borrowings as at year end).
43.7 Credit risk management
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial
loss to the Company. Credit risk arises from cash and cash equivalents, deposits with banks as well as customers
including receivables. Credit risk management considers available reasonable and supportive forward-looking
information including indicators like external credit rating (as far as available), macro-economic information
(such as regulatory changes, government directives, market interest rate etc.).
Major customers comprise of public sector undertakings (Oil Marketing Companies - OMCs) having highest credit
ratings and carry negligible credit risk. Concentration of credit risk to any other counterparty did not exceed 10%
of total monetary assets at any time during the year.
Only high rated banks are considered for placement of deposits. Bank balances are held with reputed and
creditworthy banking institutions.
43.8 Liquidity risk management
The Company manages liquidity risk by maintaining sufficient cash and cash equivalents including bank deposits
and availability of funding through an adequate amount of committed credit facilities to meet the obligations
when due. Management monitors rolling forecasts of liquidity position and cash and cash equivalents on the basis
of expected cash flows. In addition, liquidity management also involves projecting cash flows considering level
of liquid assets necessary to meet obligations by matching the maturity profiles of financial assets & liabilities and
monitoring balance sheet liquidity ratios. The Company manages liquidity risk by maintaining adequate cash &
credit lines and continuously monitoring forecast and actual cash flows and by matching the maturity profiles of
financial assets and liabilities.
The following tables detail the Company's remaining contractual maturity for its non-derivative financial
liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash
flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables
include both interest and principal cash flows. The contractual maturity is based on the earliest date on which the
Company may be required to pay.
45.2 Disputed tax / Duty demands pending in appeal as at March 31, 2026
45.2.1 Income Tax: ? 428.54 million as at March 31,2026 (As at March 31, 2025 ? 79.91 million). Against this ? Nil as at
March 31,2026 (As at March 31,2025 ? Nil) is pre-deposit / paid under protest and is included under tax assets/
liability.
45.2.2 Excise Duty and Service Tax: ? 4,980.78 million as at March 31, 2026 (As at March 31, 2025 ? 5,271.30 million).
Against this ? 106.86 million as at March 31, 2026 (As at March 31, 2025 ? 85.90 million) is predeposit / paid
under protest and is included under other assets [refer note 15].
45.2.3 Customs Duty: ? 1,155.30 million as at March 31, 2026 (As at March 31, 2025 ? 1,126.70 million). Against this ?
378.71 million as at March 31, 2026 (As at March 31, 2025 ? 379.48 million) is adjusted / paid under protest and
is included under other assets [It excludes the amount mentioned at 45.2.5] [refer note 15].
45.2.4 Goods & Service Tax: ? 322.78 million as at March 31, 2026 (As at March 31, 2025 ? Nil). Against this ? Nil as at
March 31, 2026 (As at March 31,2025 ? Nil) is adjusted / paid under protest and is included under other assets.
45.2.5 There is a claim from the Custom Department for customs duty amounting to ? 2,121.14 million as at March 31,
2026 (As at March 31, 2025 ? 2,121.14 million) along with applicable interest and penalties totally amounting
to ? 6,168.37 million as at March 31, 2026 (As at March 31, 2025 ? 6,168.37 million) in respect of classification
of tariff of the reformate for the purpose of payment of import duty. An appeal has been filed before the
Appellate Authority contesting the entire demand. Pending outcome of the appeal proceedings, no provision
for the said demand has been made in the books [refer note 15].
45.3 Others :
As informed by a vendor company, there is a claim from the Deputy Commissioner of Commercial Tax (CT)
amounting to ? 5,078.07 million as at March 31,2026 (As at March 31, 2025 ? 4,838.47 million) against which a
writ petition has been filed by them before Hon'ble Karnataka High Court. In terms of the contract entered with
the vendor company, the said liability as and when reaches finality is to be discharged by the company on back
to back basis.
45.4 Contingent Asset :
The company is in the process of claiming Export incentive of ? 11.41 million as at March 31,2026 (as at March
31, 2025 ? 12.30 million) for eligible exports under Remission of Duties and Taxes on Exported Products
(RoDTEP) scheme from concerned authority.
46 Commitments46.1 Capital Commitments:
46.1.1 The estimated amount of contracts remaining to be executed on capital account and not provided for (net
of advances) as at March 31, 2026 ? 7,721.44 million (As at March 31, 2025 ? 14,148.96 million).
46.1.2 The Company has requested KIADB for allotment of 1,050 acres of land for Phase IV expansion. However
KIADB has notified only 990.60 acres of land. The estimated capital commitment against notified land is ?
6,421.17 million (As at March 31,2025 ? 6,421.97 million).
46.1.3 The estimated amount towards acquisition of additional land of 25.89 acres (As at March 31, 2025 : 27 acres)
for development of Green belt and buffer zone to meet Environmental clearance conditions for Phase III
project of the Company is ? 2,358.60 million which includes the cost of land, building, horticulture etc. and
approximate one time monetization of Rehabilitation and Resettlement package (As at March 31, 2025 : ?
216.00 million for acquisition of land).
46.2 Other Commitments
46.2.1 The Company is in possession of certain land provisionally measuring 36.69 acres ceded by HPCL for use by
the Company for it's Phase III expansion and upgradation work. The consideration for such land is mutually
agreed to be by way of swapping of land in possession of Company / HPCL. The final documentation in this
regard is pending to be executed.
46.2.2 Letters of Credit and Bank guarantees issued by bankers towards procurement of goods and services and
outstanding as at March 31, 2026 ? 8,583.50 million (As at March 31, 2025 ? 1,948.47 million).
46.2.3 The Company has entered into a long term RLNG off take agreement with M/s BPCL as well as Short term
RLNG take off agreement with M/s GAIL. These agreements have a take or pay clause and the Company is
committed to purchase the said RLNG over the tenure of the agreement.
46.2.4 The Company has entered into a long term transmission of RLNG agreement with M/s GAIL. This agreement
has a ship or pay clause and the Company is committed to pay the ship or pay charges over the tenure of the
agreement.
46.2.5 Pending commitments on account of Corporate Environment Responsibility (CER) and Enterprise Social
Commitment (ESC) as at March 31, 2026 ? 55.98 million (As at March 31, 2025 ? Nil).
46.2.6 The company has taken on lease a cavern for storage of crude oil. As per the terms of the agreement with the
lessor, on closure of lease, the cavern has to be returned along with the dead stock existing at inception of
lease. The dead stock lying in the cavern belongs to Government of India
47 Reconciliation of liabilities arising from financing activities.
The table below details change in the Company's liabilities arising from financing activities, including both cash
and non cash changes. Non Cash changes include unrealized foreign exchange gain or loss, amortisation, finance
cost on lease liabilities, effect of new leases recognized etc. Liabilities arising from financing activities are those for
which cash flows were, or future cash flows will be, classified in the Company's Statement of Cash Flows as cash
flows from financing activities.
48.6 No proceedings have been initiated or pending against the Company for holding any benami property under the
Benami Transactions Prohibitions Act, 1988 and the rules thereunder as at March 31, 2026 and March 31, 2025.
48.7 The Company has not been declared a wilful defaulter by any bank or financial institution or other lender as at
March 31,2026 and March 31, 2025.
48.8 All charges or satisfaction have been registered with Registrar of Companies (RoC) within the statutory period as
at March 31, 2026 and March 31, 2025.
48.9 The requirement of number of layers as prescribed under clause (87) of section 2 of the Act read with Companies
(Restriction on number of Layers) Rules, 2017 is not applicable to the Company.
48.10 The company has used the borrowings from banks and financial institutions for the specific purpose for which it
was taken as at March 31,2026 and March 31,2025.
48.11 The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any
other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (intermediaries)
with the understanding that the intermediary shall directly or indirectly lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the company (ultimate beneficiaries) or provide any
guarantee, security or the like to or on behalf of the ultimate beneficiaries.
48.12 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding
party) with the understanding (whether recorded in writing or otherwise) that the company shall directly or
indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the
Ultimate Beneficiaries.
48.13 The Company did not have any transaction which was not recorded in the books of accounts that has been
surrendered or disclosed as income during the previous year in the tax assessments under the Income Tax Act,
1961.
48.14 The Company has not traded or invested in Crypto currency or virtual currency during the year ended March 31,
2026 and year ended March 31, 2025.
50 Integration of Human Resource of erstwhile subsidiary company ONGC Mangalore Petrochemicals Limited:
Pursuant to the scheme of Amalgamation ('the Scheme') approved by the Ministry of Corporate Affairs (MCA)
vide its order No. 24/3/2021-CL-MI dated April 14, 2022, Human Resource (HR) integration of erstwhile subsidiary
company ONGC Mangalore Petrochemicals Limited (OMPL) with the company is carried out w.e.f May 1, 2022
(effective date of the scheme).
The Management grade employees of erstwhile subsidiary company OMPL represented the matter before
Honourable High Court of Karnataka with regard to HR integration during FY 2022-23. The Judgement was
pronounced by single bench of Honourable High Court of Karnataka in May 2024.
During the year, Writ petitions filed seeking to challenge the Judgement before the Division Bench of Honourable
High Court of Karnataka have been dismissed by the Division Bench vide the Judgment pronounced in February
2026. Further, one more Writ petition filed by the Management grade employees of erstwhile OMPL is pending
disposal before Honorable High Court of Karnataka, thereby, the matter is subjudice.
51 The Government of India has notified New Labour Codes namely, the Code on Wages, 2019, the Industrial Relations
Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code,
2020 effective November 21,2025. Draft rules have been circulated by the Ministry of Labour & Employment, while
the same are yet to be notified. In this regard, Frequently Asked Questions (FAQs) have also been issued by the
Ministry. Based on the available information, the Company has assessed that there is no financial implication on
the Company at this stage.
52 The Company also operates in special economic zone (SEZ) in Mangalore, accordingly is eligible for certain
economic benefits such as exemptions from GST, custom duty, excise duty, service tax, value added tax, entry tax,
etc. which are in the nature of government assistance. These benefits are subject to fulfilment of certain obligations
by the Company.
53 The Company has a system of periodic physical verification of Inventory, Property, Plant and Equipment and
capital stores in a phased manner to cover all items over a period. Adjustment differences, if any, is carried out on
completion of reconciliation.
54 The Company did not have any long term contracts including derivative contracts for which there were any
material foreseeable losses.
55 Some balances of trade and other receivables, trade and other payables and loans are subject to confirmation/
reconciliation. Adjustments, if any, will be accounted for on confirmation/reconciliation of the same, which will not
have a material impact.
56 As at March 31, 2026, the Company holds 39,479 Nos. (As at March 31, 2025 39,479 Nos.) of Energy Saving
Certificates (ESCerts) awarded by Bureau of Energy Efficiency (BEE) as part of "Performance, Achieve & Trade" (PAT)
scheme, India for achieving reduction in Specific Energy Consumption as per notified PAT Cycle for the Company
till FY 2022-23. Thereafter, Company was not notified under PAT Cycle.
The Government of India has decided to transition the PAT scheme into the "Carbon Credit Trading Scheme"
(CCTS) compliance mechanism and as per the notification dated January 13, 2026, Company was notified for the
Greenhouse Gas Emission Intensity (GEI) Targets under CCTS for FY 2025-26. As per company's assessment, the
company is meeting the GEI target for FY 2025-26 under CCTS mechanism, which is subject to Verification and
Assessment by the Accredited Carbon Verifying (ACV) agency.
Currently there is no mechanism to convert ESCerts to Carbon Credit Certificates under CCTS framework and
further the trading window to trade/sell the ESCerts are yet to be announced. Considering unascertainability of
cost of ESCerts since such cost cannot be derived directly and absence of reliably determinable price, ESCerts have
not been carried in inventory.
57 The number of Independent Directors on the Board during previous financial years was lower than the minimum
required under the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,
and the Companies Act, 2013. Consequently, the composition of the Board-level committees, namely the
Audit Committee, Nomination & Remuneration Committee, Stakeholders' Relationship Committee, and Risk
Management Committee, was not in compliance with the applicable regulations. As a result, penalties for these
non-compliances were levied by both BSE and NSE amounting to ? 18.51 million and ? 18.51 million respectively
up to December 2025.
The Company, being a Central Public Sector Enterprise (CPSE), has its Directors nominated by the Administrative
Ministry, i.e., the Ministry of Petroleum and Natural Gas (MoPNG), Government of India (GoI). The Company has
been continuously following up with MoPNG for the appointment of the requisite number of Independent
Directors on its Board. MoPNG appointed four Independent Directors for the periods from November 8, 2021 to
November 7, 2024, and from March 28, 2025 to March 27, 2026, which enabled the Company to comply with the
requirements relating to the composition of the Board and its sub-committees during their tenure. Further, upon
achieving compliance with the regulations, the policy for exemption of fines provides for the submission of an
application seeking waiver or reduction of penalties in cases where the Company is unable to make appointments
to the Board due to pending approvals from the Government (Ministry), regulator, or any statutory authority.
In view of the above, the Company requested the stock exchanges to waive the fines, citing the aforementioned
reasons. Based on the Company's request, BSE waived fines up to September 2020 for Regulation 17(1), and up to
December 2020 for Regulations 18(1) and 19(1) of the SEBI (LODR) Regulations, 2015. NSE also waived fines for the
period from December 2020 to March 2025 for Regulations 18(1), 19(1), and 21(1) of the SEBI (LODR) Regulations,
2015, amounting to ? 3.32 million and ? 3.82 million, respectively. Waiver of the remaining amounts of ? 15.19
million (BSE) and ? 14.69 million (NSE) is currently awaited.
58 The Company has assessed all the possible effects that may result from ongoing geo-political conditions. As per
the assessment, these are not having significant effect on the carrying amounts of Property, Plant and Equipment,
Inventories, Receivables & Other Current Assets and their recoverability.
59 Figures in parenthesis as given in these notes to financial statements relate to previous years. Previous year figures
have been regrouped wherever required.
60 Approval of financial statements
Pursuant to the completion of tenure of Independent Directors on the Board of the Company on March 27, 2026,
the Board does not have requisite number of Independent Directors as per the provisions of Regulation 17(1)
of SEBI (LODR) Regulations, 2015, the Companies Act, 2013 and DPE guidelines. Accordingly, for the purpose of
quorum as required under Regulation 17(2A) for Board Meeting and Regulation 18(2)(b) for Audit Committee
Meetings under SEBI (LODR) Regulations, currently, the functions of Audit Committee are carried out by the Board
of the Company. The Company has been regularly requesting the Administrative Ministry for appointment of
requisite number of Independent Directors on the Board of the Company (refer Note 57).
Accordingly, the financial statements have been reviewed and approved by the Board in its meeting held on April
24, 2026.
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