p) Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events,
it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably
estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an
outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle
the present obligation at the end of the reporting period. The discount rate used to determine the present value is a
pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
The increase in the provision due to the passage of time is recognised as interest expense.
q) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker.
The Board of Directors of Petronet LNG Limited has been identified as being the chief operating decision maker by
the Management of the Company.
r) Cash and cash equivalents
Cash and cash equivalents comprise of cash at bank and in hand and short-term money market deposits with original
maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of change in value.
s) Lease Accounting
The Company measures the lease liability at present value of remaining lease payments discounted using the
weighted average incremental borrowing rate as at the date of initial application and Right of Use asset is measured
at an amount equal to lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to
that lease recognized in the balance sheet immediately before the date of initial application.
The Company as a lessee
The Company considers whether a contract is, or contains a lease. A lease is defined as 'a contract, or part of a
contract, that conveys the right to use an asset (the underlying asset) for a period in exchange for consideration. To
apply this definition, the Company assesses whether the contract meets three key points of evaluation which are
whether:
? the contract contains an identified asset, which is either explicitly identified in the contract or implicitly
specified by being identified at the time the asset is made available to the Company.
? the Company has the right to obtain substantially all of the economic benefits from use of the identified asset
throughout the period of use, considering its rights within the defined scope of the contract.
? the Company has the right to direct the use of the identified asset throughout the period of use. The Company
assess whether it has the right to direct 'how and for what purpose' the asset is used throughout the period
of use.
Measurement and recognition
At lease commencement date, the Company recognises a right-of-use asset and a lease liability on the balance
sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability,
any initial direct costs incurred by the Company, an estimate of any costs to dismantle and remove the asset at the
end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives
received).
The Company depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the
earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Company also assesses
the right-of-use asset for impairment when such indicators exist.
At the commencement date, the Company measures the lease liability at the present value of the lease payments
unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the
Company's incremental borrowing rate.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is
re-measured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments.
When the lease liability is re-measured, the corresponding adjustment is reflected in the right-of-use asset, or profit
and loss if the right-of-use asset is already reduced to zero.
The Company has elected to account for short-term leases and leases of low-value assets using the practical
expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are
recognised as an expense in profit or loss on a straight-line basis over the lease term.
The Company as a lessor
At the inception of the lease the Company classifies each of its leases as either an operating lease or a finance lease.
The Company recognises lease payments received under operating leases as income on a straight-line basis over the
lease term. In case of a finance lease, finance income is recognised over the lease term based on a pattern reflecting
a constant periodic rate of return on the lessor's net investment in the lease. When the Company is an intermediate
lessor it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of
a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying
asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it
classifies the sub-lease as an operating lease.
2A. Recent Accounting Pronouncements
The Ministry of Corporate Affairs ("MCA") notifies new Indian Accounting Standards ("Ind AS") and amendments
to existing standards through notifications issued under the Companies (Indian Accounting Standards) Rules, as
amended from time to time.
Amendments effective from 1st April , 2025
Ind AS 21 - The Effects of Changes in Foreign Exchange Rates
In May 2025, the MCA notified amendments to Ind AS 21 relating to the accounting requirements when a currency
is not exchangeable. The Company has evaluated the amendments and concluded that they do not have a material
impact on its financial statements.
Ind AS 1 - Presentation of Financial Statements
In August 2025, the MCA notified amendments to Ind AS 1 relating to the classification of liabilities as current or
non-current, including guidance for non-current liabilities subject to covenants. The amendments clarify that the
right to defer settlement of a liability for at least twelve months must exist and have substance as at the reporting
date. The Company has assessed these amendments and concluded that they do not have any material impact on
the classification of its liabilities.
Ind AS 7 - Statement of Cash Flows and Ind AS 107 - Financial Instruments: Disclosures
The amendments introduce additional disclosure requirements for supplier finance arrangements. Under Ind AS
7, entities are required to disclose information that enables users of financial statements to assess the effects of
such arrangements on liabilities, cash flows and liquidity risk. Correspondingly, Ind AS 107 includes supplier finance
arrangements as a factor that may give rise to concentration of liquidity risk. The Company has evaluated these
amendments and determined that they do not have any material impact on its financial statements.
Ind AS 12 - Income Taxes
The amendments relating to the International Tax Reform - Pillar Two Model Rules provide a temporary mandatory
exception from accounting for deferred taxes arising from the implementation of the Pillar Two rules, along with
related disclosure requirements. As the Company does not operate in jurisdictions where these rules are applicable,
the amendments do not have any impact on its financial statements.
Note:
i) All the immovable property appearing in the financial statements (other than taken on lease) are in the name of
Company.
* ii) Plant & Equipment and Buildings includes Jetty & Trestle having WDV of Rs. 538.43 Crores (Dahej - North and South
Jetty) & Rs.217.98 Crores (Kochi) as at 31.03.2026. As per concession agreement, the ownership of Jetty & Trestle
(Dahej - North and South) would be transferred to the Gujarat Maritime Board in the year 2035.The ownership of
Jetty & Trestle (Kochi) would be transferred to Cochin Port Trust in the year 2039.
Note - During the year, the Company has obtained secured Rupee Term Loan (RTL) facilities aggregating to Rs.12,000 Crore,
comprising Rs. 6,000 Crore each from State Bank of India and Bank of Baroda, for financing its petrochemical project and
other capex of company. As at 31st March, 2026, no amount has been drawn under the said facilities. The said facilities are
secured by:
First pari-passu charge by way of hypothecation over all movable properties and assets, including plant & machinery,
machinery spares, equipment, tools & accessories, furniture, fixtures, vehicles, and all other movable assets, both present
and future, pertaining to the PDH-PP project, together with first pari-passu charge by way of mortgage on all PDH-PP
Project related immovable properties, both present and future (such as building, structures erected or constructed on land
but excluding the PDH-PP Project Land) and;
Second pari-passu charge on existing movable fixed assets of the Company by way of hypothecation. This charge shall be
released on the achievement of commissioning of PDH-PP Project. The Security shall be shared pari-passu amongst the
Lenders and Bond Holders in accordance with the terms of the financing documents.
Footnote
Trade receivables as at 31st March 2026 include'Use or Pay' (UoP) dues amounting to Rs. 719.84 Crore (gross) (Rs. 413.02 Crore
(net) after making a provision of Rs. 306.82 Crore). These dues have arisen due to lower capacity utilisation by customers
under long-term regasification agreements entered into by the Company. These UoP dues pertain to FY 2022-23 (CY 2022):
Rs. 13.11 Crore, FY 2023-24 (CY 2023): Rs. 540.50 Crore, FY 2024-25 (CY 2024): Rs. 117.27 Crore and FY 2025-26 (CY 2025):
Rs. 48.96 Crore.
The Board had approved a recovery mechanism for UoP dues relating to CY 2022 and CY 2023, in accordance with
agreements reached with customers. As part of this arrangement, the Company received Rs. 630.04 Crore, as against CY
2022 UoP dues of Rs. 643.15 Crore, during the year. The Company continues to engage with the customer for balance
outstanding. The Company is in the process of implementing the Board approved recovery mechanism with all customers
for CY 2023. Bank guarantees pertaining to CY 2023 have been received from majority of the customers.
As per the terms of the Settlement Agreement under the recovery mechanism for Use or Pay (UoP) dues of CY 2022 and CY
2023, some of the customers have brought LNG quantities upto 31st March 2026, for which revenue has been recognised at
the prevailing Regasification Rate. Correspondingly, the Company has waived off UoP dues amounting to Rs. 120.64 Crore
during the year ended 31st March 2026 by charging it to the Statement of Profit and Loss.
The Board at its meeting held on 9th April 2026, approved a recovery mechanism for UoP dues pertaining to CY 2024. The
Company is in the process of implementing this mechanism.
While some customers have not provided balance confirmations for the UoP dues, management remains confident of
recovery, as the amounts are contractually obligated. As a measure of prudence, the Company has made a time-based
provision of Rs. 306.82 Crore as at 31st March 2026 (Rs. 469.15 Crore as at 31st March 2025).
a. Terms and rights attached to equity shares
The Company has only one class of equity shares each having a par value of Rs. 10/- per share. They entitle the holder
to participate in dividend and to share in the proceeds of winding up of the company in proportion to the number
of and amounts paid on the shares held. Every holder of equity shares present at a meeting in person or by proxy, is
entitled to one vote per share.
b. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is
subject to the approval of the shareholders in the ensuing Annual General Meeting.
Refer Note -45(q)
* On the basis of confirmation obtained from suppliers who have registered themselves under the Micro, Small and Medium
Enterprises Development Act, 2006 (MSMED Act, 2006) and based on the information available with the company, the
required disclosures are given below:
The Government of India notified four Labour Codes namely - The Code on Wages, 2019, The Industrial Relations Code, 2020,
The Code on Social Security, 2020, and The Occupational Safety, Health and Working Conditions Code, 2020, collectively
referred to as the'New Labour Codes, consolidating 29 existing labour laws.The New Labour Codes were made effective from
21st November, 2025. The Ministry of Labour & Employment published draft Central Rules and FAQs to enable assessment
of the financial impact due to changes in regulations arising from these regulatory changes. Accordingly, the Company has
recognised an estimated incremental impact of Rs.25.44 Crore on account of past service cost under 'Employees Benefit
Expense' in the Statement of Profit and Loss for the year ended 31st March 2026, considering best information available. The
b. 1.425 MMTPA with Mobil Australia Resources Company PTY Ltd, Australia for a period upto 2035.
c. 1.20 MMTPA with ExxonMobil Asia Pacific Pte Ltd with supplies to commence in FY 2026-27.
Since the Company has entered into materially back-to-back sale agreements / arrangements corresponding to the above
purchase agreements, there is no foreseeable loss arising from these agreements/arrangements as at the balance sheet
date.
B. Contingent Liabilities
In the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses
such claims and assertions and monitors the legal environment on an ongoing basis with the assistance of internal legal
team. The Company records a liability for any claims where a potential loss is probable and capable of being estimated
and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not
probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless
the loss becomes probable. The following is a description of claims and assertions where a potential loss is possible, but not
probable. The Company believes that none of the contingencies described below would have a material adverse effect on
the Company's financial condition, results of operations or cash flows.
Contractor Claims in Arbitration
a. Afcons Infrastructure Limited, one of the Company's contractors, filed a claim of Rs.106.66 Crore (excluding interest
and arbitration costs) related to capital works executed at Kochi. The Company submitted counterclaims in response.
The Arbitral Tribunal, through an award dated 26th September 2022, ruled in favour of the contractor for Rs.65.40
Crore, which was duly provided for in the financial year 2022-23. The Company has challenged the award before the
Hon'ble Delhi High Court under Section 34 of the Arbitration and Conciliation Act, 1996 (OMP No. 50/2023 dated
30th January 2023). Additionally, the contractor has filed petitions under Section 34 vide OMP No. 32/2023 dated
24th January 2023 and under section 36 vide OMP No. 30/2023 dated 11th February 2023. The matter is currently sub
judice and pending as on 31st March 2026.
b. The Company received a favourable arbitral award of Rs.79.28 Crore (including interest) against the claim raised
against the contractor i.e. Dahej Standby Jetty Project Undertaking (DSJPU), relating to capital works executed at
Dahej. In September 2021, the Company encashed the bank guarantee furnished by DSJPU for the same amount and
recognised it as income during FY 2022-23. The contractor has challenged the award before the Hon'ble Delhi High
Court under Section 34 of the Arbitration and Conciliation Act, 1996 (OMP No. 280/2021 dated 16th September 2021),
and PLL filed its reply on 1st October 2022. The matter is currently sub judice and pending as on 31st March 2026.
c. The unincorporated consortium comprising CTCI Corporation, Taiwan and CINDA Engineering & Construction
Private Limited (together called"CTCI-GNDA Consortium") was awarded EPC Contract for Engineering, Procurement,
Construction & Commissioning of works relating to design, engineer, procure, supply, erection and commission for
expansion of the LNG Terminal by 2.50 MMTPA at Dahej. Certain disputes arose between the parties from the said
contract, which have been referred to an Arbitration Tribunal wherein the Claimants (CTCI-CINDA Consortium) raised
certain claims amounting to Rs. 49.59 Crores plus USD 22.22 lacs (as on 09th May 2023) and cost of arbitration, interest
etc. against which the Company has also made certain counter claims. The arbitration proceedings are in progress as
on 31st March 2026.
d. One of the contractors of the Company, B.L. Kashyap & Sons Ltd. ("BLK") was awarded the Contract for Construction
of Office Building Complex at Sector - 14, Dwarka, New Delhi vide Contract no. PLL/DB-CONTRACT/01, dated
08.07.2020. On account of inability of the contractor to complete the work within stipulated time, the contract was
terminated by the Company on 24.01.2025. The pending disputes between the parties from the said contract, have
been referred to an Arbitration Tribunal wherein the Claimants (BLK) has raised certain claims amounting to Rs. 85.33
Crores along with cost of arbitration, interest etc. The arbitration proceedings are in progress as on 31st March 2026.
Indirect Taxes
e. The Company has received refund of Rs. 1.12 Crore, Rs. 2.84 Crore and Rs. 3.46 Crore from Customs Authority vide
CESTAT order dated 7th November 2013, 9th September 2011 and 31st May 2010 respectively mainly pertaining to
custom duty on short landing of LNG. The Custom Authority have filed appeal against the order of the CESTAT with
the Hon'ble High court of Gujarat on 15th April 2014 for Rs. 1.12 Crore, on 19th March 2012 for Rs. 2.84 Crore, on 30th
August 2010 for Rs. 3.46 Crore and the outcome of the cases are pending as on 31st March 2026.
f. The Company has paid excess custom duty of Rs. 9.59 Crore (in relation to short landing of LNG under spot purchase
agreement during provisional assessment). The Company has received favourable order in respect of the above issue
from Commissioner (Appeals) and CESTAT. However, the refund of the custom duty has been denied by department
and Commissioner (Appeals) on the ground of time barred refund application. The Company has preferred an appeal
against the above order with CESTAT and received a negative order. The Company filed a WRIT Petition with Hon'ble
Gujarat High Court against the CESTAT order and got a favourable ruling. The Company has got refund of the above
amount (Rs. 9.59 Crore) in June 2020. The department has preferred an appeal with Hon'ble Supreme Court against
the order of Hon'ble High court of Gujarat (Diary Number 2829/2020 filed on 15-06-2020), the outcome of which is
pending as on 31st March 2026.
g. The Company had received demand for service tax on vessel hire charges for the period 16th May 2008 to
30th September 2009 amounting to Rs.40.05 Crore (including Interest). The Company had paid the demand under
protest and preferred an appeal before CESTAT against the above demand. The company received favourable order
on 24th October 2013 and consequently had received the refund (including interest). However, the department had
preferred an appeal against the CESTAT order before the Hon'ble Supreme Court (Diary Number 1366/2015 Filed on
12th January 2015), the outcome of which is pending as on 31st March 2026.
h. Kochi terminal of the Company is having Co-developer status in Puthuypeen SEZ (PSEZ). As a Co-developer, it
is entitled for the tax and duty benefits on the materials / services received for authorized operation of its Kochi
terminal. After exit of only unit (viz GAIL) from this SEZ, PSEZ officials have denied endorsement of certain service
invoices on which tax benefits were availed. Total amount of tax benefits availed on such invoices is Rs. 47.76 Crore
during the period from April 2019 to February 2020. In case invoices are not endorsed, refund of GST/ input credit
may be denied to the vendors which may be claimed by some of the vendors from the Company.
i. The Company has filed service tax refund applications in respect of input services availed within the Special Economic
Zone (SEZ) for the LNG Terminal at Kochi, aggregating to Rs. 15.26 Crore. These applications were submitted on
21st October 2009 (Rs. 2.21 Crore), 23rd July 2010 (Rs. 5.53 Crore), and 30th June 2010 (Rs. 7.52 Crore).
Of the total claim, an amount of Rs. 7.74 Crore was refunded to the Company in April 2025. The Department has filed
an appeal before the Commissioner (Appeals) against the said order. The balance amount of Rs. 7.52 Crore, relating
to the application filed on 30th June 2010, remains pending with the office of the Assistant Commissioner as at
31st March 2026.
j. During the FY 2023-24, the Company filed an application for a refund of Rs. 68.41 Crore with the Assessing Officer,
representing GST charged and paid on UoP (Use or Pay) income for the financial year 2021-22 (calendar year 2021).
The Company's appeal against the Assessing Officer's order was rejected by the Commissioner (Appeals) vide order
28th March 2025. A WRIT has been filed with the Hon'ble High Court of Gujarat against said order. The outcome of
WRIT is pending as on 31st March 2026.
k. The GST Authority, pursuant to audits conducted for the respective financial years, has raised demands against the
Company aggregating Rs. 44.45 Crore, inclusive of interest and penalty. Specifically, demands of Rs. 4.08 Crore (order
dated 11th August 2024) for FY 2019-20, Rs. 33.68 Crore (order dated 24th February 2025) for FY 2020-21, and Rs. 6.69
Crore (order dated 10th December 2025) for FY 2021-22 have been raised.
The Company has filed appeals before the Appellate Authority against all three demand orders. The matters remain
pending as at 31st March 2026.
Other Taxes
l. The Collector of Electricity Duty, Gandhinagar (Gujarat) had issued notices classifying the business activities of the
Company as "Storage (HTP-MA)" instead of "Industrial Undertaking (HTP I)" and hence levied Electricity Duty @ 45%
(revised rates @ 20%) instead of 20% (Revised rate @15%) of the consumption charges. The Company has challenged
the legality and validity of the notices by way of WRIT petitions before the Hon'ble High Court of Gujarat who had
quashed the supplementary bill / demand notice and remanded the case back to the Collector of Electricity Duty
vide order dated 1st July 2014. The Company has made its submissions before the Collector of Electricity Duty,
Gandhinagar on 30th September 2021 and again in December 2024. The order is awaited. The total demand for the
period 2005-06 to 2025-26 as on 31st March 2026 is Rs. 114.38 Crore (Rs. 105.74 Crore as on 31st March 2025).
m. The Collector of Stamps, Bharuch had issued notice to the Company to pay stamp duty @ Rs. 1 per Rs. 1000/ or part
thereof of the value mentioned in the Delivery Order of the goods imported through ports in Gujarat pursuant to
the amendment to Section 24 of the Bombay Stamp Act, 1958. The Hon'ble High Court of Gujarat has quashed the
notice. Stamp authorities have filed Special Leave Petition (SLP) in Hon'ble Supreme Court dated 25th November 2011
against the same and the case is pending as on date. The potential liability from the effective date of amendment i.e.
1st April 2006 till 31st March 2026 on the CIF value would be Rs. 481.49 Crore (Rs. 452.36 Crore as on 31st March 2025).
n. The Company entered into an agreement with Kerala State Electricity Board (KSEB) on 6th May 2013 for supply of
2,900 KVA of electricity (subsequently enhanced to 3,300 KVA in 2023) under tariff category "HT-I (Industrial)". KSEB
unilaterally reclassified this supply to "HT-IV (Commercial)', resulting in a significant increase in electricity charges.
Aggrieved by this reclassification, the Company pursued legal remedies before the Consumer Grievance Redressal
Forum (CGRF), the Hon'ble Kerala High Court, and the Hon'ble Kerala State Electricity Regulatory Commission
(KSERC). Vide its order dated 31st January 2025, the Hon'ble KSERC, Ernakulam classified the PLL Kochi LNG Terminal
into a separate tariff category "Industrial - HT-I(C)" with effect from 5th December 2024 and determined the tariff
accordingly. KSEB thereafter raised a demand on the Company for the period prior to 5th December 2024 (i.e.,
pertaining to the period when the Commercial tariff was applied). The Company challenged this demand before the
Hon'ble Kerala High Court vide W.P. No. 19290 of 2025, which was decided in favour of the Company vide Judgment
dated 20th August 2025. KSEB has preferred an Appeal against the said Judgment before the Division Bench of the
Hon'ble Kerala High Court, which remains sub judice as on 31st March 2026. The amount of contingent liability as on
31st March 2026 on account of the above dispute is Rs.13.71 Crore.
C. Contingent Assets
The Company has no contingent assets as at 31st March 2026 (Rs. Nil as on 31st March 2025).
38. Segment information
Operating Segments
The Company's Board of Directors have been identified as the Chief Operating Decision Maker ('CODM'), since they
are responsible for all major decision w.r.t. the preparation and execution of business plan, preparation of budget,
planning, expansion, alliance, joint venture, merger and acquisition, and expansion of any new facility. The Company
has a single operating segment "Natural Gas Business". Accordingly, there is only one Reportable Segment for the
Company which is "Natural Gas Business", hence no specific disclosures have been made.
Entity wide disclosures
A. Information about products and services
Company primarily operates in one product line, therefore product wise revenue disclosure is not applicable.
B. Information about geographical areas
The major sales of the Company are made to customers which are domiciled in India. Also, all the assets other than
non-current financial assets (investment and loan) of the Company are located in India.
C. Information about major customers (from external customers)
The Company derives revenues from the following customers which amount to 10 per cent or more of an entity's
revenues:
42. Employee benefits
The Company contributes to the following post-employment defined benefit plans in India.
I. Defined Contribution Plans:
The Company makes contributions towards provident fund and superannuation fund to a defined contribution
retirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute a specified
percentage of payroll cost to the retirement benefit plan to fund the benefits. Contribution to the defined contribution
plan, recognised as expenses for the year is as under:
II. Defined Benefit Plan:
(a) Gratuity
The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees
who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable
on retirement / termination is the employees last drawn basic salary per month computed proportionately
for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the
Company makes contributions to Group Gratuity cum Life Assurance Schemes administered by the LIC of
India.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for
gratuity were carried out as at 31 March 2026. The present value of the defined benefit obligations and the
related current service cost and past service cost, were measured using the Projected Unit Credit Method.
(b) Post-retirement medical scheme plan (PRMS)
The Company provides Post-Retirement Medical Benefit to its employees through PLL Post-Retirement
medical Scheme Trust. Under the scheme, eligible retired employees of the Company, their dependants
and dependants of deceased employees are allowed to claim reimbursement of hospitalisation expenses
on actuals and OPD coverage subject to maximum one month last drawn basic pay per annum of eligible
employees. The PRMS plan is a funded plan and the Company makes contributions to the PLL Post-Retirement
medical Scheme Trust, which invests the fund as per Section 11(5) of Income Tax Act, 1961.
(c) Benevolent Fund
Under this scheme, in the event of unfortunate event of death or in case of permanent disablement of an
employee while on service, the dependent/s shall be entitled a relief assistance under the scheme of 'Tatkal
Sahayata Yojana'. The notified beneficiary under the scheme shall be paid an amount of Rs. 0.50 Crore from
the Tatkal Sahayata Yojana Fund. For the above scheme, employees also make non returnable contribution of
their one-day basic salary every year.
(d) Long service Award
Under this scheme, any employee who completes the prescribed number of years service (i.e. 15 year, 20 year,
25 year, 30 year and 35 years) in the Company shall be awarded with a prepaid card (with value @ Rs. 2,500 *
No of years service)
(e) Resettlement Allowance on Retirement
All employees who superannuates from the Company on completion of regular service shall be allowed Re¬
settlement allowance which subject to cap of the last drawn one month basic pay of the employee. This is to
facilitate employees to settle at a place of their choice & cover expenses viz. transportations charges, loading
/ unloading of household goods, packing charges, insurance for household effects, octroi charges, traveling
expenses of employees and dependent family members, etc.
A. Based on the actuarial valuation obtained in this respect, the following table sets out the status of the Gratuity plan,
PRMS, Benevolent fund, Long service award and Resettlement allowance on Retirement and amounts recognised in
the Company's financial statements as at balance sheet date:
On an annual basis, an asset-liability matching study is done by the Company whereby the Company contributes the
net increase in the actuarial liability to the Petronet LNG Limited Employees Group Gratuity Trust, which invests in Group
Gratuity cum Life Assurance Schemes administered by the LIC of India in order to manage the liability risk.
Actuarial assumptions-Gratuity
i) Economic assumptions
The principal assumptions are the discount rate and salary growth rate. The discount rate is based upon the market yields
available on government bonds at the accounting date with a term that matches that of liabilities. Salary increase rate takes
into account of inflation, seniority, promotion and other relevant factors on long term basis. Valuation assumptions are per
following details:
Sensitivities due to mortality and withdrawals are not material and hence impact of change not calculated.
Sensitivities as rate of increase of pensions in payment, rate of increase of pensions before retirement and life expectancy
are not applicable being a lump sum benefit on retirement.
The following table shows a reconciliation from the opening balances to the closing balances for net defined benefit (asset)
/liability and its components:
On an annual basis, an asset-liability matching study is done by the Company whereby the Company contributes the net
increase in the actuarial liability to the PLL Post-Retirement medical Scheme Trust, which invests the fund as per Section
11(5) of Income Tax Act, 1961 in order to manage the liability risk.
Actuarial assumptions - PRMS
i) Economic assumptions
The principal assumptions are the discount rate & cost growth rate. The discount rate is based upon the market yields
available on Government bonds at the accounting date relevant to currency of benefit payments for a term that matches
that of the liabilities. Medical cost increase rate is company's long term best estimate as to cost increases taking into account
of inflation, other relevant factors on long term basis as provided in relevant accounting standard.
i) Economic assumptions
The principal assumptions are the discount rate & cost growth rate. The discount rate is based upon the market yields
available on Government bonds at the accounting date relevant to currency of benefit payments for a term that matches
that of the liabilities. Medical cost increase rate is company's long term best estimate as to cost increases taking into
account of inflation, other relevant factors on long term basis as provided in relevant accounting standard. These valuation
assumptions are as per following details:
Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement &
life expectancy are not applicable being a lump sum benefit
Other long term Employee benefit
During the year ended 31st March 2026, the Company has incurred an expense on compensated absences amounting to
Rs. 31.34 Crore (previous year Rs. 18.93 Crore). The Company determines the expense for compensated absences based on
the actuarial valuation using the Projected Unit Credit Method.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. The fair value of all equity
instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. The
mutual funds are valued using the closing NAV.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the counter
derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little
as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the
instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level
3. This is the case for unlisted equity securities.
There are no transfers between level 1 and level 2 during the year.
Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
• the use of quoted market prices or dealer quotes for similar instruments
• the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance
sheet date
• the fair value of the remaining financial instruments is determined using discounted cash flow analysis.
All of the resulting fair value estimates are included in level 2 except for unlisted equity securities and preference shares,
where the fair values have been determined based on present values and the discount rates used were adjusted for
counterparty or own credit risk.
The carrying amounts of trade receivables, trade payables, capital creditors, cash and cash equivalents, unpaid dividend,
and other payable for capital goods are considered to be the same as their fair values, due to their short-term nature.
The fair values for loans were calculated based on cash flows discounted using a current lending rate. They are classified
as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
II. Financial risk management
The Company has exposure to the following risks arising from financial instruments:
? credit risk;
? liquidity risk; and
? market risk
Risk management framework
The Company's board of directors has overall responsibility for the establishment and oversight of the Company's
risk management framework. The board of directors has established the Risk Management Committee, which is
responsible for developing and monitoring the Company's risk management policies. The committee reports
regularly to the board of directors on its activities.
The Company's risk management policies are established to identify and analyse the risks faced by the Company, to
set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and
systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company,
through its training and management standards and procedures, aims to maintain a disciplined and constructive
control environment in which all employees understand their roles and obligations.
The Company's Audit Committee oversees how management monitors compliance with the Company's risk
management policies and procedures and reviews the adequacy of the risk management framework in relation to
the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit
undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are
reported to the Audit Committee.
i. Credit risk
The Company has made investments in Debt based Mutual Funds. These Mutual funds invests in NCD / Bonds / CP /
CD of various companies and banks. In case, the investee company defaults on repayment, such losses may have to
be borne by the investors of Mutual funds.
Company generally takes Stand by Letter of Credit (SBLC) from its customers, the exceptions being its Promoters,
namely BPCL, GAIL, IOCL and ONGC. Option to take SBLC from Promoter is also being explored by the Company.
The Company establishes an allowance for impairment that represents its estimate of expected credit losses in
respect of trade and other receivables. Basis the evaluation, the management has determined that there are credit
impairment losses on the trade and other receivables.
The gross carrying amount of trade receivables is Rs. 1,346.23 Crore (31st March 2025 - Rs. 3,736.04 Crore).
During the current year, net impairment charges reversed amounting to Rs. 162.33 Crore (31st March 2025 - Rs.
111.13 Crore provided), has been made by the Company based on past ageing of trade receivables. The Company
management also pursue all options for recovery of dues wherever necessary based on its internal assessment. A
default on a financial asset is generally when counterparty fails to make payments within 365 days when they fall due.
ii. Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to
managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they
are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the
Company's reputation.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability
of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out
market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in
funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the Company's liquidity position (comprising the undrawn borrowing
facilities below) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out
at local level in accordance with practice and limits set by the Company. These limits vary by location to take into
account the liquidity of the market in which the entity operates. In addition, the Company's liquidity management
policy involves projecting cash flows in major currencies, considering the level of liquid assets necessary, monitoring
balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing
plans.
Market risk is the risk that changes in market prices - such as commodity prices (LNG), foreign exchange rates and interest
rates - will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
a) Price risk
To protect the company from fluctuation of commodity prices, same are passed through to the off-takers in long term
contract. In spot or short term contract, they are generally pass through to the customers except in few cases, up to 2 cargo
load, where the company keeps the commodity price risk with themselves to take benefit from market fluctuation.
b) Currency risk
PLL imports LNG mainly from Qatar and Australia through long term chartered vessels. The foreign exchange involved
in making payment to LNG suppliers, loading port charges and shipper is recovered from off-takers / customers under
sale contract, both long term and short term. Company does not take any exposure on account of currency in Foreign
Currency Loans by parallelly taking derivatives to hedge against the foreign exchange fluctuation on loan, if any. In respect
of other payments on account of repair and capex of plant, operating expenses of plant and corporate offices etc. same are
monitored on a regular basis to keep the open position at an acceptable level.
Sensitivity analysis
A reasonably possible strengthening (weakening) of the INR against all other currencies at 31 March would have affected
the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the
amounts shown below. This analysis assumes that all other variables (in particular interest rates) remain constant.
The Company has given loans to India LNG Transport Co. (No. 3) Ltd., Malta which is at 3-month SOFR 2.956 % or Indian
bank rate whichever is higher. The effective Interest rate as on 31.03.2026 is 6.62%.
Exposure to interest rate risk
The interest rate profile of the Company's interest-bearing financial instruments as reported to the management of the
Company is as follows.
Fair value sensitivity analysis for fixed-rate instruments
The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss,
and the Company does not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge
accounting model. Therefore, a change in interest rates at the reporting date would not affect profit or loss.
44. Capital management
The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and
to sustain future development of the business. Management monitors the return on capital on a yearly basis as well as the
level of dividends to ordinary shareholders which is given based on approved dividend policy.
The board of directors seeks to maintain a balance between the higher returns that might be possible with higher levels of
borrowings and the advantages and security afforded by a sound capital position
45. Additional disclosure / Regulatory Information as required by Notification no. GSR 207(E)
dated 24.03.2021
a) Disclosure in respect of Investment Property
The Company does not have any Investment Property.
b) Disclosure in respect of Revaluation of Property, Plant & Equipment (including Right to Use Assets)
The Company has not revalued its Property, Plant and Equipment (including Right to Use Assets)
c) Disclosure in respect of Revaluation of Intangible Assets
The Company has not revalued its intangible assets.
d) Loan or advances granted to the promoters, directors and KMPs and the related parties:
No loan or advances in the nature of loans granted to the promoters, directors, key managerial persons and
the related parties (as defined under the Companies Act, 2013), either severally or jointly with any other
person that are:
(a) repayable on demand or
(b) without specifying any terms or period of repayment
e) Disclosure in respect of Benami Property Held
No proceedings have been initiated or pending against the company for holding any benami property under
benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made
thereunder.
f) Disclosure in case the Company has borrowings from banks or financial institutions on the basis of
security of current assets,
The quarterly statement filed by the company with banks, during the year, are in agreement with the books of
the accounts of the company.
g) Disclosure in case the Company is declared as Wilful Defaulter
No bank has declared the company as "wilful defaulter".
h) Disclosure in case the Company is having any relationship and balances with Struck off Companies:
The disclosure in respect of companies whose name is struck off under section 248 of the Companies Act,
2013 or section 560 of Companies Act, 1956 is given below -
i) Disclosure in case of pending Registration of charges or satisfaction with Registrar of Companies:
All applicable cases where registration of charges or satisfaction is required with Registrar of Companies have been
done.
j) Disclosure in case compliance is not done with number of layers of Companies
No layers of companies have been established beyond the limit prescribed as per above said section / rules.
a) Current Ratio - Due to decrease in trade payables
b) Trade receivables turnover ratio - Due to decrease in trade receivables
c) Trade Payable turnover ratio - Due to decrease in trade payables
l) Compliance with approved Scheme(s) of Arrangements
No scheme of arrangements has been approved by the competent authority in terms of Section 230 to 237 of the
Companies Act, 2013.
46. Impact of Geopolitical Developments / Regional Conflict in Middle East Region
The Company has a long-term Sale and Purchase Agreement (SPA) with QatarEnergy LNG S (2) (QE) for supply of 7.50
MMTPA of LNG on FOB basis from Qatar. The Company also has corresponding long-term Gas Sale and Purchase Agreements
(GSPAs) with its customers in India. For transportation of LNG to India, the Company has engaged three dedicated LNG
vessels under long-term Time Charter Agreements.
Armed conflict and related hostilities in the Middle East region broke out on 28th February 2026, resulting in significant
disruption to maritime navigation through the Strait of Hormuz and LNG loading operations in the region. Consequently,
the Company issued Force Majeure notice to QE under the SPA on 2nd March 2026, to the owners of the three chartered
vessels under the respective charter agreements on 3rd March 2026, and to its customers under the relevant GSPAs on a
back-to-back basis on 3rd March 2026. QE also invoked Force Majeure under the SPA and served notice to the Company on
4th March 2026, consequent to which the Company served Force Majeure notice to it's Customers on 5th March 2026. As
a result, LNG cargoes scheduled for lifting from Qatar from 3rd March 2026 onwards could not be loaded and the related
business operations remain disrupted as on date.
Further, one LNG cargo loaded prior to the disruption remains stranded in Persian Gulf, as it is unable to transit through the
Strait of Hormuz as on date. Accordingly, the said LNG cargo having a carrying value of Rs. 258.53 Crore continues to be
reflected as stock-in-transit in the financial statements as at 31st March 2026, pending completion of voyage and delivery.
Based on management's assessment, the estimated net realisable value of such inventory is not lower than its carrying cost
as at the reporting date.
The owners of the three chartered vessels have raised claims towards vessel hire charges and other associated costs
aggregating to Rs. 89.30 Crore up to 31st March 2026 and have continued to do so for subsequent periods. The Company,
based on legal advice, is of the view that such claims are not tenable as per relevant provisions of the respective time
charter agreements. The Company has accordingly responded to the owners of the said time chartered vessels. Thus, no
provision has been considered necessary in respect of these claims at this stage.
The situation remains uncertain and the ultimate operational and financial impact, if any, cannot presently be determined.
47. Previous year figures have been regrouped / reclassified wherever considered necessary to
conform to current year figures.
|