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Notes to Accounts of Chennai Petroleum Corporation Ltd.

Mar 31, 2023

The recognition of deferred tax assets / liability is based on the ââAsset and liability methodâ, determined on the basis of difference between the financial statement and tax bases of the assets and liabilities, by using the enacted tax rates applicable to the company.

The deferred taxes are recognised to the extent, they are more likely than not to be realised, based on the best estimates as at the balance sheet date. In making such estimates, all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income and pricing assumptions based on the past trend are considered. Such estimates are subject to significant fluctuations in earnings and timing of such earnings.

(i) (A) As per the Formation Agreement entered into between the promoters, an offer is to be made to the Naftiran

Intertrade Company Limited (NICO), an affiliate of National Iranian Oil Company (NIOC) in any issue of the Capital in proportion to the shares held by them at the time of such issue to enable them to maintain their shareholding at the existing percentage.

(B) The Shareholders of the Company at the General meeting held on 24^th August 2018 has accorded approval for

a) Cancellation of unsubscribed equity share capital of R 20.87 Crore consisting of 2,08,68,900 equity shares of R 10/- each, comprising of partial subscription to Rights Issue made by the company in 1984, by the Government of India and non-subscription by Amoco India Inc., to the Rights Issue made by the company in 1984;

b) Cancellation of 2,19,700 forfeited equity shares of R 10/- each totaling R 0.22 Crore (1,87,900 equity shares forfeited on 26.09.2003 and 31,800 equity shares forfeited on 26.10.2006)

(ii) Based on special resolution passed by the shareholders through postal ballot on 16.07.2015, the company has allotted 100 Crore Non Convertible Cumulative Redeemable Preference Shares of R 10 each for cash at par amounting to R 1000 Crore to Indian Oil Corporation Ltd, the holding company on private placement preferential allotment basis on 24.09.2015 after receipt of full subscription amount.

Preference shares to the extent of R 500 crore, out of the total outstanding amount of R 1000 crore were redeemed on 06.06.2018. Accordingly the outstanding amount as at 31.03.2023 is R 500 crore.

Preference Shares classified as financial liability (long term borrowing) as per Ind AS 32 - Refer note - 15(D)

B. Rights, preferences and restrictions attached to Equity shares

Equity Shares: The company has one class of equity shares having a par value of T 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company in proportion to their shareholding.

Retained Earnings

The retained earnings comprises of general reserve and surplus which is used from time to time to transfer profits by appropriations. Retained earnings is free reserve of the Company and is used for the purposes like issuing bonus shares, buy back of shares and other purposes (like declaring Dividend etc.) as per the approval of Board of Directors. It includes the remeasurement of defined benefit plan as per actuarial valuations which will not be re-classified to statement of profit and loss in subsequent periods.

Other Reserves

Reserves created in compliance with the Provision of the Companies Act, the utilisation of which is restricted to the purposes mandated therein:

A Capital Redemption Reserve Account : As per Companies Act 2013, capital redemption reserve is created to redeem preference shares. Utilisation of this reserve is governed by the provisions of the Companies Act 2013.

B Insurance Reserve : Insurance Reserve is created by the company to Offset risk of loss of assets not insured with external insurance agencies. The reserve is utilised to Offset actual losses by way of net appropriation in case any uninsured loss is incurred

C Securities Premium : Premium on shares issued by the company appropriated under this reserve.

D Capital Reserve: Capital Reserve was created through forfeiture of shares and shall be utilised as per the provisions of

the Companies Act 2013.

C. Non Convertible Cumulative Redeemable Preference Shares

Preference Share is treated as financial liability as per Ind AS 32, as these are redeemable on maturity for a fixed

determinable amount and carry fixed rate of dividend.

(i) Rights, preferences and restrictions attached to Preference shares:

The Company has one class of preference shares i.e. Non-Convertible Cumulative Redeemable Preference Shares

(NCCRP Shares) of P 10 per share.

(a) Such shares shall confer on the holders thereof, the right to preferential dividend from the date of allotment i.e., 24.09.2015

(b) Such shares shall rank for capital and dividend (including all dividend undeclared upto the commencement of winding up) and for repayment of capital in a winding up, pari passu inter se and in priority to the Ordinary Shares of the Company, but shall not confer any further or other right to participate either in profits or assets.

(c) The holders of such shares shall have the right to receive all notices of general meetings of the Company and have a right to vote only on resolution placed before the share holders which directly affect their rights attached to preference shares like winding up of company or repayment of preference shares etc.

(d) The tenure of the NCCRP Shares would be 10 years , with put and call option. Either the preference shareholder shall have right to exercise Put option or the Issuer shall have right to exercise Call option to redeem the preference shares, in whole or in part after the 5 years of the preference issue date. However, it is also agreed that Put & Call option before the 5 year period can be exercised by mutual consent of both the parties by giving 30 days notice.

(ii) Non-convertible cumulative redeemable preference shares to the extent of P 500 Crore, out of P 1000 crore was

redeemed on 06.06.2018.

(v) Preference dividend has been provisionally accrued as finance cost. However, as per the Companies Act 2013, the preference shares is treated as part of share capital and the provisions of the Act relating to declaration of Preference Dividend would be applicable.The Board of Directors have recommended preference dividend of 6.65% on the outstanding preference shares amounting to Rs. 33.25 Cr for the year (2021-22 : Rs. 33.25 cr for FY 2021-22 and Rs. 105.76 Cr being the cumulative preference dividend for the previous year(s)).

(vi) Refer Note -13 & 13A - Authorised and issued Preference Share capital and the reconciliation of no. of shares of preference shares

Note - 32 : Employee Benefits

Disclosures in compliance with Ind AS 19 on âEmployee Benefitsâ is as under:

A. Defined Contribution Plans- General Description

Pension Scheme:

During the year, the company has recognised ? 25.03 Crore (2022: ? 24.62 Crore) towards contribution to Defined Employees Pension Scheme in the Statement of Profit and Loss / CWIP (included in Contribution to Provident & Other Funds in Note - 25 / Construction period expenses in Note-2.1)

During the year, the company has recognised ? 1.71 Crore (2022: ? 1.81 Crore) as contribution to EPS-95 in the Statment of Profit and Loss / CWIP (included in Contribution to Provident and Other Funds in Note - 26 / Construction period expenses in Note-2.1)

B. Defined Benefit Plans- General Description

1 Provident Fund:

The Companyâs contribution to the Provident Fund is remitted to separate provident fund trust established for this purpose based on a fixed percentage of the eligible employeeâs salary and charged to Statement of Profit and Loss. Shortfall, if any, in the fund assets, based on the Government specified minimum rate of return, will be made good by the Company. The Provident Fund maintained by the PF Trust in respect of which actuarial valuation is carried out and T 6.9 Crore (2022 : T 4.91 Crore) has been provided by the company towards the current and future interest shortfall/losses beyond available surplus.

2 Gratuity:

Each employee rendering continuous service of 5 years or more is entitled to receive gratuity amount equal to 15/26 of the eligible salary for every completed year of service subject to a maximum of T 0.20 Crore at the time of separation from the company. Besides, the ceiling of gratuity increases by 25% whenever IDA rises by 50%. The company has funded the liability through insurance company.

3 Post Retirement Medical Scheme (PRMS):

PRMS provides medical benefit to retired employees and eligible dependant family members.The company has funded the liability through insurer managed funds.

4 Workman Compensation:

The company pays an equivalent amount of 100 months salary to the family member of employee, if employee dies due to accidental death while he is on duty. This scheme is not funded by the company. The liability originates out of the workman compensation Act and Factory Act.

C. Other Long-Term Employee Benefits - General Description

1 Leave Encashment:

(i) Each employee is entitled to get 8 days of earned leave for each completed quarter of service. Encashment of earned leave is allowed during service leaving a minimum balance of 15 days subject to maximum accumulation up to 300 days. In addition each employee is entitled to get 5 days of sick leave at the end of every six months. The Company has been adopting a practice of permitting encashment of the entire accumulation of sick leave only at the time of retirement.

(ii) DPE Guidelines in this regard states that sick leave cannot be encashed. The company continues this practice keeping in view operational complications and service agreements. Our Holding company has represented to the concerned authorities in earlier years to reconsider the matter. The matter has been dealt in 3^rd PRC recommendations, which is effective January 1,2017 and CPSEs have been allowed to frame their own rules considering operational necessities and subject to conditions set therein. The net expenditure accounted towards encashment of sick leave for the year is T 6.07 Crore (2022: T 1.96 crore). The accumulated provision for towards encashment of sick leave is T 32.16 Crore (2022: T 29.86 Crore).

2 Long Service Award:

On completion of specified period of service with the Company and also at the time of retirement, employees are rewarded with Prepaid Card as per eligibility, based on the duration of service completed based on the Board approved policy. This award based on length of meritorious and faithful service of employees (Long Service Award) was specifically allowed by DPE (formerly BPE) thru its letter dated 14.02.1983. MOP&NG has advised the Company that the Scheme is in contravention to the present DPE guidelines issued vide DPE OM No. 2(22)/97-DPE(WC) dated 20^th November, 1997 The matter is being pursued with MOP&NG for resolution. Pending resolution of the matter, the company is of the view that the provision is in line with Board approved policy. The net expenditure accounted on this account is T 1.01 Crore (2022: T 0.96 Crore). The accumulated provision in this regard is T 10.54 Crore (2022: T 10.95 Crore). The Company continues this practice keeping in view operational complications and service agreements. Our Holding company has represented to the concerned authorities in earlier years to reconsider the matter.

Note - 33 : Commitments and Contingencies

A Leases

(a) As lessee

The Company has entered into various material lease arrangements (including in substance lease arrangements) such as lands and buildings for purpose of its plants, facilities, offices, etc..,

The Employees Township at Cauvery Basin Refinery has been constructed on land area of thirty four acres and forty nine cents of land leased from a trust on five-year renewable basis.

Amount Recognized in Statement of Profit and Loss Account or Carrying Amount of Another Asset
				(? in Crore)
Particulars			31-03-2023	31-03-2022
Depreciation recognized			7.63	6.27
Interest on lease liabilities			2.08	1.39
Expenses relating to short-term leases (leases more than 30 days but less than 12 months)			3.12	2.46
Variable lease payments not included in the measurement of lease liabilities			1.32	2.19
Total cash outflow for leases			12.87	12.02
Additions to ROU during the year			15.29	2.61
Net Carrying Amount of ROU at the end the year			21.15	13.49
The details of ROU Asset other than leasehold land included in PPE (Note 2) held as lessee by class of underlying asset is presented below :-
Current Year:				(? in Crore)
Asset Class	Items Added to RoU Asset as on 01.04.2022	Additions to RoU Asset during the Year	Depreciation Recognized During the Year	Net Carrying value as on 31.03.2023
Leasehold Land	7.86	4.28	4.50	7.63
Buildings Roads etc.	0.31	-	0.02	0.30
Plant & Equipment	-	-	-	-
Transport Equipments	5.32	11.01	3.11	13.22
Total	13.49	15.29	7.63	21.15

Previous Year:				(7 in Crore)
	Items Added to	Additions to RoU	Depreciation	Net Carrying
Asset Class	RoU Asset as on	Asset during the	Recognized	value as on
	01.04.2021	Year	During the Year	31.03.2022
Leasehold Land	8.42	0.94	1.50	7.86
Buildings Roads etc.	0.33	-	0.02	0.31
Plant & Equipment	1.11	-	1.11	-
Transport Equipments	7.29	1.67	3.64	5.32
Total	17.15	2.61	6.27	13.49

As per requirement of the standard, maturity analysis of Lease Liabilities have been shown as part of borrowings under Liquidity Risk of Note 36: Financial Instruments & Risk Factors.

Details of items of future cash outflows which the Company is exposed as lessee but are not reflected in the measurement of lease liabilities are as under;

(i) Variable Lease Payments

As per general industry practice, the Company incurs various variable lease payments which are based on rate, kms covered etc. and are recognized in profit or loss and not included in the measurement of lease liability.

(b) As lessor (i) Operating Lease The lease rentals recognized as income in these statements as per the rentals stated in the respective agreements:
			(7 in Crore)
	Particulars	31-03-2023	31-03-2022
A. Lease rentals recognized during the period		31.03	30.62
B. Value of assets given on lease included in tangible assets
- Gross Carrying Amount		15.08	9.99
- Accumulated Depreciation		2.87	1.41
- Depreciation recognized in the Statement of Profit and Loss		0.39	0.19
These relate to storage tankage facilities for petroleum products, buildings, plant and equipments given on lease. Asset class wise details have been presented under Note 2: Property, Plant & Equipments.
Maturity Analysis of Undiscounted Lease Payments to be received after the reporting date			(7 in Crore)
	Particulars	31-03-2023	31-03-2022
Less than one year		16.83	16.75
One to two years		15.85	15.16
Two to three year		16.67	15.92
Three to four years		17.52	16.74
Four to five years		18.42	17.52
More than five years		693.80	712.23
Total		779.09	794.32

B Contingent Liabilities

Contingent Liabilities amounting to T606.82 Crore (2022: T201.48 Crore) are as under

(i) T 539.11 Crore (2022: T 28.03 Crore) being the demands raised by the Central Excise / Customs / Service Tax Authorities including interest of T 173.16 Crore (2022: T 12.26 Crore).

(ii) T 10.48 Crore (2022: T 145.73 Crore) being the demands raised by the VAT/ Sales Tax Authorities and includes no interest (2022: Nil).

(iii) T 54.31 Crore (2022: T 20.67 Crore) on account of Projects for which suits have been filed in the Courts or cases are lying with Arbitrator. This includes interest of T 8.58 Crore (2022: T 8.41 Crore).

(iv) T 2.92 Crore (2022: T 705 Crore) in respect of other claims including interest of T 1.37 Crore (2022: T 6.75 Crore).

The Company has not considered those disputed demands / claims as contingent liabilities, for which, the outflow of resources has been considered as remote.

C Commitments

(i) Capital Commitments

Estimated amount of contracts remaining to be executed on Capital Account not provided for T 199.76 Crore (2022: T 266.81 Crore).

(ii) Other Commitments

The Company has an export obligation to the extent of T 219.05 Crore (2022: T 147.02 Crore) on account of concessional rate of customs duty availed under EPCG license scheme on procurement of capital goods and the same is expected to be fulfilled by way of exports.

1. Levels under Fair Value measurement hierarchy are as follows:

(a) Level 1 items fair valuation is based upon market price quotation at each reporting date

(b) Level 2 items fair valuation is based upon Significant observable inputs like PV of future cash flows, MTM valuation, etc.

(c) Level 3 items fair valuation is based upon Significant unobservable inputs wherein valuation done by independent valuer.

2. The management assessed that Trade Receivables, Cash and Cash Equivalents, Bank Balances, Deposit for Leave Encashment Fund, Recoverable from Employee Benefits Trusts, Other Non-derivative Current Financial Assets, Shortterm Borrowings, Trade Payables, Floating Rate Loans and Other Non-derivative Current Financial Liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

3. The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Methods and assumptions

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

Level 2 Hierarchy:

(i) Derivative instruments at fair value through profit or loss viz.Foreign exchange forward contracts: Replacement cost quoted by institutions for similar instruments by employing use of market observable inputs are considered.

(ii) Loans to employees, Loan to related parties, Security deposits paid and Security deposits received,Lease obligations: Discounting future cash flows using rates currently available for items on similar terms, credit risk and remaining maturities

(iii) Non Convertible Redeemable Preference shares : The fair value of Preference shares is estimated by discounting future cash flows.

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

Note - 36 : Financial Instruments and Risk Factors

Financial Risk Factors

The Companyâs principal financial liabilities, other than derivatives, comprise Borrowings, trade and other payables, security deposits and employee liabilities. The main purpose of these financial liabilities is to finance the Companyâs operations and to support its operations. The Companyâs principal financial assets include loans & advances, trade and other receivables, short-term deposits and cash / cash equivalents that derive directly from its operations. The companyâs requirement of crude oil imports are canalized through its holding company, Indian Oil Corporation Limited. The derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Companyâs policy that trading in derivatives are taken only to hedge the various risks that the company is exposed to and not for speculation purpose.

The Company is exposed to a number of different financial risks arising from natural business exposures as well as its use of financial instruments including market risk relating to interest rate, commodity prices, foreign currency exchange rates and equity price, credit risk and liquidity risk.

The Action Taken Report on the Risk Management Policy for the year 2022-23 was reviewed by the Risk Management Committee, Audit Committee and Board of Directors at their meetings held on 27.04.2023.

The Board of Directors oversees the risk management activities for managing each of these risks, which are summarised below:

A. Market risk

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

The sensitivity analysis in the following sections relate to the position as at 31 March 2023 and 31 March 2022

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

The following assumptions have been made in calculating the sensitivity analysis:

- The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held as at 31 March 2023 and 31 March 2022 including the effect of hedge accounting.

- The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant as at 31^st March 2023.

1) Interest rate risk

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

The Companyâs interest rate risk management includes to maintain a mix between fixed and floating rates for rupee and foreign currency loans, based on liquidity, availability of cost effective instruments and considering the market / regulatory constraints. As at 31 March 2023, approximately 100% of the Companyâs Long term borrowings are at fixed rate of interest (31 March 2022: 92%).

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior years.

2) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities (when revenue or expense is denominated in a foreign currency) and Borrowings.

The Company manages its foreign currency risk through combination of natural hedge, hedging undertaken on occurrence of pre-determined triggers as per the Risk management policy. The hedging is undertaken through forward contracts.

The sensitivity to a reasonably possible change in USD exchange rates, with all other variables held constant and the impact on the Companyâs profit before tax due to changes in the fair value of monetary assets and liabilities is tabulated below. The Companyâs exposure to foreign currency changes for all other currencies is not material.

The effects of most exchange rate fluctuations are absorbed in business operating results which are offset by changing cost competitiveness, lags in market adjustments to movements in rates to its other non-financial assets like inventory etc. For this reason, the total effect of exchange rate fluctuations is not identifiable separately in the companyâs reported results.

3) Commodity price risk

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

B. Credit risk

1) Trade receivables

Customer credit risk is managed according to the Companyâs policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored. Transactions other than with oil marketing companies are either generally covered by Letters of Credit, Bank Guarantees or cash-and-carry basis.

2) Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Companyâs treasury department in accordance with the Companyâs policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty so as to minimise concentration of risks and mitigate consequent financial loss.

The Companyâs maximum exposure to credit risk for the components of the Balance Sheet at 31 March 2023 and 31 March 2022 is the carrying amounts as provided in Note 4, 5, 6, 11 & 12.

C. Liquidity risk

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

D. Excessive risk concentration

Substantial portion of the Companyâs sales is to the Holding Company, Indian Oil Corporation Limited. Consequently, trade receivables from IOCL are a significant proportion of the Companyâs receivables. Since the operations are synchronised with those of the Holding Company, for optimal results, the same does not present any risk.

E. Collateral

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

Note - 37 : Capital Management

For the purpose of the Companyâs capital management, capital includes issued equity capital, share premium and all other equity reserves. The primary objective of the Companyâs capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company monitors capital using debt equity ratio, which is borrowings divided by Equity. The Companyâs strategy is to keep the debt equity ratio in the range of 2:1 and 1:1 under normal circumstances. The Company also includes accrued interest in the borrowings for the purpose of capital management. The Debt-Equity ratio which impacted due to the lower product cracks arising out of the CoVID-19 situation has improved during the year.

A Revenue Grants

1. Stipend to apprentices under NATS scheme

The company has received grant of ? 0.64 Crore (2022: ? 0.67 crore) in respect of stipend paid to apprentices registered under National Apprenticeship Training Scheme (NATS) and the same has been accounted on net basis against training expenses.

2. EPCG Grant

Grant recognised in respect of duty waiver on procurement of capital goods under EPCG scheme of Central Government which allows procurement of capital goods including spares for pre production and post production at zero duty subject to an export obligations of 6 times of the duty saved on capital goods procured.The unamortized capital grant amount as on March 31, 2023 is ? 12.54 Crore (2022: ? 8.29 Crore). The company recognised Nil Crore (2022: ? Nil Crore) in the statement of profit & loss account as amortisation of revenue grant. The company expects to meet the export obligations in line with the scheme.

B Capital Grants

1. Capital Grant in respect of interest subsidy

The Company has received capital grant in the form of interest subsidy on loans taken from OIDB. The unamortized capital grant amount as on March 31, 2023 is ? 1.32 crore (2022:? 4.99 crore). During the year, the company has recognised ? 0.86 crore (2022: ? 1.67 crore) in the statement of profit and loss as amortisation of capital grants.

Note - 41 : Exposure to Financial Derivatives

Financial and Derivative Instruments:

1 All derivative contracts entered into by the Company are for hedging its foreign currency relating to underlying transactions and firm commitments and not for any speculative or trading purposes.

2 The company has no outstanding forward contract as at 31^st March 2023(2022 : NIL)

Note - 42 : Revenue from Contracts with Customers

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

Generally, Company enters into contract with customers for sale on EX-MI basis. Majority of Companyâs sales are to Oil Marketing Companies and Downstream industries for which credit period is less than 1 year. Direct sales to other customers are generally on cash and carry basis. Revenue is recognised when the goods are delivered to the customer by adjusting the amounts deposited by customers, if any.

1. The 9 MMTPA refinery project at Cauvery Basin Refinery, Nagapattinam was approved by the Board of Directors of Indianoil Corporation, (the holding company) in January 2021 for implementation through a Separate Joint Venture. The Joint Venture Company, Cauvery Basin Refinery and Petrochemicals Ltd (CBRPL). has since been incorporated during the year.

At the year-end on 31^st Mar 2023 an amount of Rs.867.87 Cr and Rs.11.06 Cr, (2022: Rs. 618.46 Cr and Rs. 25.06 Cr) being the actual expenditure and the associated liabilities on the project, which has been considered as Asset/ Liability included in disposal group held for Transfer respectively. This group consists of CWIP, Intangible assets under development, advances for capital expenditure, construction period expenses and liability for capital expenditure amounting to Rs.384.31 Cr (2022: Rs.253.83 Cr), Rs.282.83 Cr (2022: Rs. 259.36 Cr), Rs 20.08 Cr (2022: Rs. 0.24 Cr), Rs 180.65 Cr (2022: Rs 105.03 Cr) and Rs 11.06 Cr (2022: Rs. 25.06 Cr) respectively as at 31^st March 2023. The capital commitment as at 31^st March 2023 for this group is Rs. 1805.72 Cr (2022: Rs.1545.31 Cr) in respect of this project.

As per Joint Venture agreement entered between CPCL, IOCL and other seed investors on 22^nd Nov 2022, the expenditure incurred by CPCL on behalf of the Joint Venture shall be considered as CPCLâs contribution towards share capital or Quasi-Equity Instruments or as may be decided later as permissible by Applicable law.

The Company is in the process of obtaining necessary approvals from the Administrative Ministry. Upon the receipt of requisite approval, the assets included in the disposal group held for transfer shall be dealt with accordingly.

Cauvery Basin Refinery (CBR) having capacity to process 1 MMTPA crude oil was situated on 618 acres of freehold land in Nagapattinam. The refinery was operated till 2018-19. The Company along with its parent company viz. Indian Oil Corporation Limited and other seed investors viz ICICI Bank Limited, Axis Bank Limited, ICICI Prudential Life Insurance Company Limited, HDFC Life Insurance Company Limited and SBI Life Insurance Company Limited commenced the implementation of a grass root 9 MMTPA Refinery (Project) on the said land. A Joint Venture Company namely Cauvery Basin Refinery and Petrochemicals Limited (CBRPL) was incorporated in January 2023 for implementation and execution of the project.

The new refinery is being set up at the same location in Nagapattinam utilizing CPCLâs land besides additional land being acquired for the project.

618 acres of freehold (carrying value: Rs.10.67 Crore) is being used for the project which will be implemented and executed by a separate Joint Venture Company (CBRPL).

The arrangement (sale, lease or any other arrangement) under which the project of CBRPL is being established in the land is yet to be decided by the company as it requires prior sanction of the Government of Tamil Nadu.

2. The Company has refineries at two locations viz., Manali and Nagapattinam (Cauvery Basin Refinery - CBR). The operations of the CBR unit have been stopped from 01.04.2019. Accordingly, the value in use was negative and, the recoverable value of the assets was reviewed and it was estimated that there would not be any recoverable value for the same and impairment loss was recognised.

Some of the Assets to the extent of gross block of Rs. 17.09 crore and accumulated Depreciation of Rs. 11.00 crore in respect of which impairment to the extent of Rs. 6.09 crore was provided, has been dismantled and scrapped during the year. Impairment provision of Rs. 93.66 crore is continued in respect of the balance Assets.

3. The Government of India w.e.f. 01.07.2022, levied Duties on Export of Petroleum products at the rates notified on fortnightly basis, which have been reckoned in the Refinery Transfer Pricing. This has resulted in lower revenue realisations with significant impact on the profitability for and upto the quarter.

4. As part of CSR activities, CPCL sponsors polytechnic college, for which twenty acres of land of the company has been leased to the CPCL Educational Trust for a period of 50 years.

5. (a) The cost of land includes provisional payments towards cost, compensation, and other accounts for which detailed

accounts are yet to be received from the authorities concerned.

(b) The company has valid title for all immovable properties. However, in respect of 186.93 acres of land allotted by Government of Tamil Nadu (classified as Poramboke) assignment deed is yet to be received. Out of this, value is to be determined by Government of Tamilnadu in respect of 135.93 acres.

(c) Pending decision of the Government/Court, additional compensation, if any, payable to the landowners and the Government for certain lands acquired, is not quantifiable, and hence not considered.

6. The company operates only in a single segment viz. downstream petroleum sector. As such reporting is done on a single segment basis.

7. There are no other significant subsequent events that require adjustments or disclosures in the financial statements as at balance sheet date, other than those disclosed above.

9. Previous yearâs comparative figures have been regrouped, reclassified and recast wherever necessary and the related disclosures are included in the respective notes.

Mar 31, 2022

(i) (A) As per the Formation Agreement entered into between the promoters, an offer is to be made to the Naftiran Intertrade

Company Limited (NICO), an affiliate of National Iranian Oil Company (NIOC) in any issue of the Capital in proportion to the shares held by them at the time of such issue to enable them to maintain their shareholding at the existing percentage.

(B) The Shareholders of the Company at the General meeting held on 24th August 2018 has accorded approval for

a) Cancellation of unsubscribed equity share capital of H 20.87 Crore consisting of 2,08,68,900 equity shares of H 10/-each, comprising of partial subscription to Rights Issue made by the company in 1984, by the Government of India and non-subscription by Amoco India Inc., to the Rights Issue made by the company in 1984;

b) Cancellation of 2,19,700 forfeited equity shares of H 10/- each totaling H 0.22 Crore (1,87,900 equity shares forfeited on 26.09.2003 and 31,800 equity shares forfeited on 26.10.2006)

(ii) Based on special resolution passed by the shareholders through postal ballot on 16.07.2015, the company has allotted 100 Crore Non Convertible Cumulative Redeemable Preference Shares of H 10 each for cash at par amounting to H 1000 Crore to Indian Oil Corporation Ltd, the holding company on private placement preferential allotment basis on 24.09.2015 after receipt of full subscription amount.

Preference shares to the extent of H 500 crore, out of the total outstanding amount of H 1000 crore were redeemed on 06.06.2018. Accordingly the outstanding amount as at 31.03.2022 is H 500 crore.

Preference Shares classified as financial liability (long term borrowing) as per Ind AS 32 - Refer note - 15(D)

B. Rights, preferences and restrictions attached to Equity shares

Equity Shares: The company has one class of equity shares having a par value of H 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company in proportion to their shareholding.

D. Non Convertible Cumulative Redeemable Preference Shares

Preference Share is treated as financial liability as per Ind AS 32, as these are redeemable on maturity for a fixed determinable

amount and carry fixed rate of dividend.

(i) Rights, preferences and restrictions attached to Preference shares:

The Company has one class of preference shares i.e. Non-Convertible Cumulative Redeemable Preference Shares

(NCCRP Shares) of H 10 per share.

(a) Such shares shall confer on the holders thereof, the right to preferential dividend from the date of allotment i.e., 24.09.2015

(ii) Non-convertible cumulative redeemable preference shares to the extent of H 500 Crore, out of H 1000 crore was

redeemed on 06.06.2018.

(v) Preference dividend has been provisionally accrued as finance cost. However, as per the Companies Act 2013, the preference shares is treated as part of share capital and the provisions of the Act relating to declaration of Preference Dividend would be applicable.The Board of Directors have recommended preference dividend of 6.65% on the outstanding preference shares amounting to '' 33.25 Cr for the year and '' 105.76 Cr being the cumulative preference dividend for the previous year(s).

(vi) Refer Note -13 & 13A - Authorised and issued Preference Share capital and the reconciliation of no. of shares of preference shares

Disclosures in compliance with Ind AS 19 on âEmployee Benefitsâ is as under:

A. Defined Contribution Plans- General Description Pension Scheme:

During the year, the company has recognised H 24.62 Crore (2021: H 21.1 Crore) towards contribution to Defined Employees Pension Scheme in the Statement of Profit and Loss / CWIP (included in Contribution to Provident & Other Funds in Note - 25 / Construction period expenses in Note-2.1)

During the year, the company has recognised H 1.81 Crore (2021: H 1.95 Crore) as contribution to EPS-95 in the Statment of Profit and Loss / CWIP (included in Contribution to Provident and Other Funds in Note - 26 / Construction period expenses in Note-2.1)

B. Defined Benefit Plans- General Description

1 Provident Fund:

The Company''s contribution to the Provident Fund is remitted to separate provident fund trust established for this purpose based on a fixed percentage of the eligible employee''s salary and charged to Statement of Profit and Loss. Shortfall, if any, in the fund assets, based on the Government specified minimum rate of return, will be made good by the Company. The Provident Fund maintained by the PF Trust in respect of which actuarial valuation is carried out and '' 4.91 Crore (2021 : '' 4.34 Crore) has been provided by the company towards the current and future interest shortfall/losses beyond available surplus.

2 Gratuity:

Each employee rendering continuous service of 5 years or more is entitled to receive gratuity amount equal to 15/26 of the eligible salary for every completed year of service subject to a maximum of H 0.20 Crore at the time of separation from the company. Besides, the ceiling of gratuity increases by 25% whenever IDA rises by 50%. The company has funded the liability through insurance company.

3 Post Retirement Medical Scheme (PRMS):

PRMS provides medical benefit to retired employees and eligible dependant family membersThe company has funded the liability through insurer managed funds.

4 Workman Compensation:

C. Other Long-Term Employee Benefits - General Description 1 Leave Encashment:

(ii) DPE Guidelines in this regard states that sick leave cannot be encashed. The company continues this practice keeping in view operational complications and service agreements. Our Holding company has represented to the concerned authorities in earlier years to reconsider the matter. The matter has been dealt in 3rd PRC recommendations, which is effective January 1, 2017 and CPSEs have been allowed to frame their own rules considering operational necessities and subject to conditions set therein. The net expenditure accounted towards encashment of sick leave for the year is H 1.96 Crore (2021: H 6.94 crore). The accumulated provision for towards encashment of sick leave is H 29.86 Crore (2021: H 32.51 Crore).

2 Long Service Award:

On completion of specified period of service with the Company and also at the time of retirement, employees are rewarded with Prepaid Card as per eligibility, based on the duration of service completed based on the Board approved policy. This award based on length of meritorious and faithful service of employees (Long Service Award) was specifically allowed by DPE (formerly BPE) thru its letter dated 14.02.1983. MOP&NG has advised the Company that the Scheme is in contravention to the present DPE guidelines issued vide DPE OM No. 2(22)/97-DPE(WC) dated 20th November, 1997. The matter is being pursued with MOP&NG for resolution. Pending resolution of the matter, the company is of the view that the provision is in line with Board approved policy. The net expenditure accounted on this account is H 0.96 Crore (2021: H 0.80 Crore). The accumulated provision in this regard is H 10.95 Crore (2021: H 11.54 Crore). The Company continues this practice keeping in view operational complications and service agreements. Our Holding company has represented to the concerned authorities in earlier years to reconsider the matter.

D. The summarised position of various defined benefits / Long Term Employee Benefits recognised in the Statement of Profit & Loss, Balance Sheet are as under:

(Figures presented in Italic Font in the table are for previous year)

Note - 33 : COMMITMENTS AND CONTINGENCIES

A Leases

(a) As lessee

The Company has entered into various material lease arrangements (including in substance lease arrangements) such as lands and buildings for purpose of its plants, facilities, offices, etc..,

The Employees Township at Cauvery Basin Refinery has been constructed on land area of thirty four acres and forty nine cents of land leased from a trust on five-year renewable basis.

Amount Recognized in Statement of Profit and Loss Account or Carrying Amount of Another Asset

(H in Crore)
Particulars	31-Mar-22	\|31-Mar-21
Depreciation recognized	6.27	5.64
Interest on lease liabilities	1.39	1.48
Expenses relating to short-term leases (leases more than 30 days but less than 12	2.46	3.13
months)
Variable lease payments not included in the measurement of lease liabilities	2.19	4.25
Total cash outflow for leases	12.02	14.15
Additions to ROU during the year	2.61	9.83
Net Carrying Amount of ROU at the end the year	13.49	17.15

The details of ROU Asset other than leasehold land included in PPE (Note 2) held as lessee by class of underlying asset is presented below :- Current Year : (H in Crore)
	Items Added to	Additions to	Depreciation	Net Carrying
Asset Class	RoU Asset as	RoU Asset	Recognized	value as on
	on 01.04.2021	during the Year	During the Year	31.03.2022
Leasehold Land	8.42	0.94	1.50	7.86
Buildings Roads etc.	0.33	-	0.02	0.31
Plant & Equipment	1.11	-	1.11	-
Transport Equipments	7.29	1.67	3.64	5.32
Total	17.15	2.61	6.27	13.49
Previous Year :
				(H in Crore)
	Items Added to	Additions to	Depreciation	Net Carrying
Asset Class	RoU Asset as	RoU Asset	Recognized	value as on
	on 01.04.2020	during the Year	During the Year	31.03.2021
Leasehold Land	9.94	-	1.52	8.42
Buildings Roads etc.	0.35	-	0.02	0.33
Plant & Equipment	-	2.22	1.11	1.11
Transport Equipments	2.67	7.61	2.99	7.29
Total	12.96	9.83	5.64	17.15

As per requirement of the standard, maturity analysis of Lease Liabilities have been shown as part of borrowings under Liquidity Risk of Note 36: Financial Instruments & Risk Factors.

Details of items of future cash outflows which the Company is exposed as lessee but are not reflected in the measurement of lease liabilities are as under;

(i) Variable Lease Payments

B Contingent Liabilities

Contingent Liabilities amounting to H201.48 Crore (2021: H444.66 Crore) are as under:

(i) H 28.03 Crore (2021: H 26.61 Crore) being the demands raised by the Central Excise / Customs / Service Tax Authorities including interest of H 12.26 Crore (2021: H 11 Crore).

(ii) H 145.73 Crore (2021: H 381.26 Crore) being the demands raised by the VAT/ Sales Tax Authorities and includes no interest (2021: Nil).

(iii) H 20.67 Crore (2021: H 28.93 Crore) on account of Projects for which suits have been filed in the Courts or cases are lying with Arbitrator. This includes interest of H 8.41 Crore (2021: H 7.77 Crore).

(iv) H 7.05 Crore (2021: H 7.86 Crore) in respect of other claims including interest of H 1.27 Crore (2021: H 1.17 Crore).

The Company has not considered those disputed demands / claims as contingent liabilities, for which, the outflow of resources has been considered as remote.

C Commitments

(i) Capital Commitments

Estimated amount of contracts remaining to be executed on Capital Account not provided for H 266.81 Crore (2021: H 424.07 Crore).

(ii) Other Commitments

The Company has an export obligation to the extent of H 147.02 Crore (2021: H 147.02 Crore) on account of concessional rate of customs duty availed under EPCG license scheme on procurement of capital goods and the same is expected to be fulfilled by way of exports.

1. Levels under Fair Value measurement hierarchy are as follows:

(a) Level 1 items fair valuation is based upon market price quotation at each reporting date

(b) Level 2 items fair valuation is based upon Significant observable inputs like PV of future cash flows, MTM valuation, etc.

(c) Level 3 items fair valuation is based upon Significant unobservable inputs wherein valuation done by independent valuer.

2. The management assessed that Trade Receivables, Cash and Cash Equivalents, Bank Balances, Deposit for Leave Encashment Fund, Recoverable from Employee Benefits Trusts, Other Non-derivative Current Financial Assets, Short-term Borrowings, Trade Payables, Floating Rate Loans and Other Non-derivative Current Financial Liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

Methods and assumptions

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

Level 2 Hierarchy:

(ii) Loans to employees, Loan to related parties, Security deposits paid and Security deposits received,Lease obligations:

Discounting future cash flows using rates currently available for items on similar terms, credit risk and remaining maturities

(iii) Non Convertible Redeemable Preference shares : The fair value of Preference shares is estimated by discounting future cash flows.

Note - 36 : FINANCIAL INSTRUMENTS AND RISK FACTORS

Financial Risk Factors

The Company''s principal financial liabilities, other than derivatives, comprise Borrowings, trade and other payables, security deposits and employee liabilities. The main purpose of these financial liabilities is to finance the Company''s operations and to support its operations. The Company''s principal financial assets include loans & advances, trade and other receivables, short-term deposits and cash / cash equivalents that derive directly from its operations. The company''s requirement of crude oil imports are canalized through its holding company, Indian Oil Corporation Limited. The derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that trading in derivatives are taken only to hedge the various risks that the company is exposed to and not for speculation purpose.

The Action Taken Report on the Risk Management Policy for the year 2021-22 was reviewed by the Risk Management Committee, Audit Committee and Board of Directors at their meetings held on 27.04.2022.

The Board of Directors oversees the risk management activities for managing each of these risks, which are summarised below: A. Market risk

The sensitivity analysis in the following sections relate to the position as at 31 March 2022 and 31 March 2021

The analysis exclude the impact of movements in market variables on the carrying values of gratuity and other post-retirement obligations, provisions, and other non-financial assets.

The following assumptions have been made in calculating the sensitivity analysis:

- The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held as at 31 March 2022 and 31 March 2021 including the effect of hedge accounting.

1) Interest rate risk

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

The Company''s interest rate risk management includes to maintain a mix between fixed and floating rates for rupee and foreign currency loans, based on liquidity, availability of cost effective instruments and considering the market / regulatory constraints. As at 31 March 2022, approximately 92% of the Company''s Long term borrowings are at fixed rate of interest (31 March 2021: 87%).

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior years.

2) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency) and Borrowings.

3) Commodity price risk

B. Credit risk

1) Trade receivables

Customer credit risk is managed according to the Company''s policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored. Transactions other than with oil marketing companies are either generally covered by Letters of Credit, Bank Guarantees or cash-and-carry basis.

2) Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty so as to minimise concentration of risks and mitigate consequent financial loss.

The Company''s maximum exposure to credit risk for the components of the Balance Sheet at 31 March 2022 and 31 March 2021 is the carrying amounts as provided in Note 4, 5, 6, 11 & 12.

C. Liquidity risk

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

D. Excessive risk concentration

Substantial portion of the Company''s sales is to the Holding Company, Indian Oil Corporation Limited. Consequently, trade receivables from IOCL are a significant proportion of the Company''s receivables. Since the operations are synchronised with those of the Holding Company, for optimal results, the same does not present any risk.

E. Collateral

Note - 37 : CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company monitors capital using debt equity ratio, which is borrowings divided by Equity. The Company''s strategy is to keep the debt equity ratio in the range of 2:1 and 1:1 under normal circumstances. The Company also includes accrued interest in the borrowings for the purpose of capital management. The Debt-Equity ratio which impacted due to the lower product cracks arising out of the CoVID-19 situation has improved during the year. Need for capital infusion, would be reasssed based on the turnaround of the situation.

A Revenue Grants

1 Stipend to apprentices under NATS scheme

The company has received grant of H 0.67 Crore (2021: H 0.09 crore) in respect of stipend paid to apprentices registered under National Apprenticeship Training Scheme (NATS) and the same has been accounted on net basis against training expenses.

2 EPCG Grant

Grant recognised in respect of duty waiver on procurement of capital goods under EPCG scheme of Central Government which allows procurement of capital goods including spares for pre production and post production at zero duty subject to an export obligations of 6 times of the duty saved on capital goods procuredThe unamortized capital grant amount as on March 31, 2022 is H 8.29 Crore (2021: H 2.29 Crore). The company recognised Nil Crore (2021: H 1.68 Crore) in the statement of profit & loss account as amortisation of revenue grant. The company expects to meet the export obligations in line with the scheme.

3 Grant in respect of Revenue expenditure for research projects

During the year, the Company has received Nil revenue grant (2021: H 0.09 Crore) in respect of meeting out revenue expenditure such as manpower, consumable etc for research project undertaken with Centre of High Technology under the Ministry of Petroleum & Natural Gas and the same has been reckoned on net basis in expenses.

B Capital Grants

1 Capital Grant in respect of interest subsidy

The Company has received capital grant in the form of interest subsidy on loans taken from OIDB. The unamortized capital grant amount as on March 31, 2022 is H 4.99 crore (2021:H 6.66 crore). During the year, the company has recognised H 1.67 crore (2021: H 1.31 crore) in the statement of profit and loss as amortisation of capital grants

Note - 41 : EXPOSURE TO FINANCIAL DERIVATIVES

Financial and Derivative Instruments:

1 All derivative contracts entered into by the Company are for hedging its foreign currency relating to underlying transactions and firm commitments and not for any speculative or trading purposes.

2 The company has no outstanding forward contract as at 31st March 2022(2021 : NIL)

Note - 42 : REVENUE FROM CONTRACTS WITH CUSTOMERS

Generally, Company enters into contract with customers for sale on EX-MI basis. Majority of Company''s sales are to Oil Marketing Companies and Downstream industries for which credit period is less than 1 year. Direct sales to other customers are generally on cash and carry basis. Revenue is recognised when the goods are delivered to the customer by adjusting the amounts deposited by customers, if any.

1 The 9 MMTPA refinery project at Cauvery Basin Refinery,Nagapattinam was approved by the Board of Directors of Indianoil Corporation, the holding company in January 2021 for implementation through a Separe Joint Venture. During the year, NITI Aayog has accorded approval for implementation of the project through a separate Joint Venture. Accordingly, pending the incorporation of the Joint Venture, the actual expenditure and the associated liabilities incurred on the project is accounted as asset/ Liability included in disposal group held for Transfer respectively. This group consists of CWIP, Intagible assets under development, advances for capital expenditure and liability for capital expenditure amounting to H 358.86 Crore, H 259.36 Crore, H 0.24 Crore and H 25.06 Crore respectively as at 31st March 2022. The capital commitment as at 31st March 2022 for the group is H 1545.31 Crore in respect of this project.

2 "The Company has refineries at two locations viz., Manali and Nagapattinam (Cauvery Basin Refinery - CBR). The operations of the CBR unit have been stopped from 01.04.2019. Accordingly, the value in use was negative and, the recoverable value of the assets was reviewed and it was estimated that there would not be any recoverable value for the same and impairment loss was recognised.

Some of the Assets to the extent of gross block of H 25.80 crore and accumulated Depreciation of H 3.16 crore in respect of which impairment to the extent of H 22.64 crore was provided, has been dismantled and scrapped during the year. Impairment provision of H 100.02 crore is continued in respect of the balance Assets.â

3 Tax expense for the previous year includes H 693.76 crore on exercise of option under said section 115BAA of the Income Tax Act, 1961 to avail the lower rate . Based on receipt of Final Assessment order under Direct Tax Vivad Se Vishwas Act, 2020, tax expense of H 11.35 crore has been reversed during the year.

4 As part of CSR activities, CPCL sponsors polytechnic college, for which twenty acres of land of the company has been leased to the CPCL Educational Trust for a period of 50 years.

5 (a) The cost of land includes provisional payments towards cost, compensation, and other accounts for which detailed

accounts are yet to be received from the authorities concerned.

(c) Pending decision of the Government/Court, additional compensation, if any, payable to the landowners and the Government for certain lands acquired, is not quantifiable, and hence not considered.

6 The company operates only in a single segment viz. downstream petroleum sector. As such reporting is done on a single segment basis.

7 There are no other significant subsequent events that require adjustments or disclosures in the financial statements as at balance sheet date, other than those disclosed above.

8 Other disclosures as required under Schedule III to the Companies Act, 2013

(i) The quarterly statements of current assets filed by the company with banks or financial institutions are in agreement with the books of accounts.

9 Previous year''s comparative figures have been regrouped, reclassified and recast wherever necessary.

Mar 31, 2018

A. Corporate Information

The stand-alone financial statements of âChennai Petroleum Corporation Limitedâ (âthe Companyâ or âCPCLâ) are for the year ended 31^st March 2018. The Company is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on two recognised stock exchanges in India. The registered office of the Company is located at 536, Anna Salai, Teynampet, Chennai- 600018. (CIN - L40101TN1965GOI005389)

CPCL is in the business of refining crude oil to produce & supply various petroleum products.

Information on related party relationships of the Company is provided in Note-34.

The stand-alone financial statements were approved for issue in accordance with a resolution of the Board of directors on 10^th May, 2018.

B. Amendments to Standards effective 1st April,2017

- Amendments to Ind AS 7, Statement of Cash flows

Effective April 1^st, 2017, the Company adopted the amendment to IndAS7, which require the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non cash changes. Further, the amendment suggest inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from financing activities, to meet the disclosure requirement. The adoption of the amendment will have impact only on disclosures in relation to cash flow statement within the financial statements.

- Amendments to Ind AS 102, Share Based payments

Effective April 1^st, 2017, amendment to Ind AS 102 specifies the accounting for cash-settled share based payments or share based payments with a net-settled feature. The same is not relevant to the Company as it does not have any transactions of this nature.

C. Standards issued but not yet effective

On March 28^th, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration and the Ind AS 115, Revenue from Contract with Customers. They shall come into force from April 1^st, 2018. The information that is expected to be relevant to the financial statements is provided below.

- Amendments to Ind AS 21, The Effects of Changes in Foreign Exchange Rates

The amendment to Ind AS 21, Foreign currency transactions and advance consideration clarifies the date of the transaction for the purpose of determining the exchange rate to be used on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The Company will adopt the standard on April 1^st, 2018. The effect on adoption of Ind AS 21 is expected to be insignificant.

- Amendments to Ind AS 115, Revenue from Contract with Customers

The Ind-AS 115 Revenue from Contract with Customers supersedes Ind-AS 11 Construction Contracts and Ind-AS 18 Revenue. The standard is effective for periods beginning on or after April 1^st, 2018. The amendment is not relevant for the company as it does not have any revenue from construction contracts.

Note â 1A : SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, the accompanying disclosures, and the disclosure of contingent liabilities. These include recognition and measurement of financial instruments, estimates of useful lives and residual value of Property, Plant and Equipment and intangible assets, valuation of inventories, measurement of recoverable amounts of cash-generating units, measurement of employee benefits, actuarial assumptions, provisions etc.

Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The Company continually evaluates these estimates and assumptions based on the most recently available information. Revisions to accounting estimates are recognized prospectively in the Statement of Profit and Loss in the period in which the estimates are revised and in any future periods affected.

JUDGEMENTS

In the process of applying the companyâs accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the standalone financial statements:

Contingencies

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal, contractor, land access and other claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgement and the use of estimates regarding the outcome of future events

ESTIMATES AND ASSUMPTIONS

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the company. Such changes are reflected in the assumptions when they occur.

Defined benefit plans / Other Long term employee benefits

The cost of the defined benefit plans and other long term employee benefit plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. The management considers the interest rates of government securities based on expected settlement period of various plans.

Further details about various employee benefit obligations are given in Note 32.

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flow (DCF) model based on level-2 and level-3 inputs. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as price estimates, volume estimates, rate estimates etc. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Also refer Note-35 for further disclosures of estimatesand assumptions.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less cost of disposal used to determine the recoverable amounts of the impaired assets are not based on observable market data, rather, managementâs best estimates. The value in use calculation is based on a DCF model. The cash flows do not include impact of significant future investments that may enhance the assetâs performance of the CGU being tested. The results of impairment test are sensitive to changes in key judgements, such as changes in commodity prices, future changes in alternate use of assets etc, which could result in increase or decrease of the recoverable amounts and result in additional impairment charges or recovery of impairment charged.

Refer Note 42.1 on impairment recognized during the year.

(i) (a) As per the Formation Agreement entered into between the promoters, an offer is to be made to the Naftiran Intertrade Company Limited (NICO), an affiliate of National Iranian Oil Company (NIOC) in any issue of the Capital in proportion to the shares held by them at the time of such issue to enable them to maintain their shareholding at the existing percentage.

(b) Refer Note-40 - Events occuring after Reporting Period(Sl.No.3)

(ii) (a) Based on special resolution passed by the shareholders through postal ballot on 16.07.2015, the company has allotted 100 Crore Non Convertible Cumulative Redeemable Preference Shares of â10 each for cash at par amounting to Rs.1000 Crore to Indian Oil Corporation Ltd, the holding company on private placement preferential allotment basis on 24.09.2015 after receipt of full subscription amount.Preference Shares classified as financial liability (long term borrowing) as per Ind AS 32 - Refer note - 15(II) (B) and note

(ii) thereon

(b) Refer Note-40 - Events occuring after Reporting Period(Sl.No.2)

A With regard to disclosure requirements under the provisions of section 22 of Micro, Small and Medium Enterprises Development Act, 2006, the company has carried out the same based on the confirmation received from its suppliers. No interest amount remains unpaid to such Micro and Small enterprises as on 31st March 2018 and no payments were made to such enterprises beyond the âappointed dayâ during the year. Also, the company has not paid any interest in terms of section 16 of the above mentioned act or otherwise.

B Represents dues to Indian Oil Corporation Ltd., the holding company Rs.402282.36 Lakhs (2017: Rs.114882.02 Lakhs) and IOT Infrastructure and Energy Services Limited Rs.351.46 Lakhs (2017: Rs.107.81 Lakhs)

A (i) Goods and Services Tax (GST) has been implemented w.e.f.01.07.2017 wherein some of the petroleum products have come under its ambit. Accordingly, GST is being levied on these products as against Excise Duty applicable hitherto. Since Excise duty is included in revenue and GST is not included in revenue, the comparable turnover after netting off Excise duty on products on which GST has now been levied, for periods before 01.07.2017, is tabulated below :

(ii) Sale to certain customers, which involves return of material upon extraction of relevant products are being invoiced for the gross supply quantity by the company and quantity returned is being invoiced by the customer on the company upon GST implementation. Accordingly, the quantity supplied to the extent received by the company after extraction is included in both Revenue from operations and purchase of stock in trade to the extent of Rs.20929.30 Lakhs in line with the invoicing pattern under GST.

A Represents interest on Income tax refund received under the Income Tax Act, 1961

B Represents Dividends received from Indian Additives Limited (Non-Current Investments in Joint Ventures)

Note â 2 EMPLOYEE BENEFITS

Disclosures in compliance with Ind AS 19 on âEmployee Benefitsâ is as under:

A. Defined Contribution Plans- General Description

Pension Scheme:

During the year, the company has recognised Rs.2214.54 Lakhs (2017: Rs.2286.41 Lakhs) towards Defined Contributory Employees Pension Scheme in the Statement of Profit and Loss/ CWIP (included in Contribution to Provident & Other Funds in Note - 25/ Construction period expenses in Note-2.1)

During the year, the company has recognised Rs.234.04 Lakhs (2017: Rs.227.88 Lakhs) as contribution to EPS-95 in the Statement of Profit and Loss/ CWIP (included in Contribution to Provident and Other Funds in Note - 25/ Construction period expenses in Note-2.1)

B. Defined Benefit Plans- General Description

1 Provident Fund:

The Companyâs contribution to the Provident Fund is remitted to separate provident fund trust established for this purpose based on a fixed percentage of the eligible employeeâs salary and charged to Statement of Profit and Loss. Shortfall, if any, in the fund assets, based on the Government specified minimum rate of return, will be made good by the Company. The Provident Funds maintained by the PF Trust in respect of which actuarial valuation is carried out does not have any deficit as on 31st March 2018.

2 Gratuity:

3 Post Retirement Medical Scheme (PRMS):

PRMS provides medical benefit to retired employees and eligible dependant family members.

4 Workman Compensation:

C. Other Long-Term Employee Benefits - General Description

1 Leave Encashment:

Each employee is entitled to get 8 earned leaves for each completed quarter of service. Encashment of earned leaves is allowed during service leaving a minimum balance of 15 days subject to maximum accumulation up to 300 days. In addition, each employee is entitled to get 5 sick leaves at the end of every six months. The entire accumulation of sick leaves is permitted for encashment only at the time of retirement.

2 Long Service Award:

On completion of specified period of service with the company and also at the time of retirement, employees are rewarded with Prepaid Card as per eligibility, based on the duration of service completed.

D. The summarised position of various defined benefits / Long Term Employee Benefits recognised in the Statement of Profit & Loss, Balance Sheet are as under:

(Figures presented in Italic Font in the table are for previous year)

Note - 3 : COMMITMENTS AND CONTINGENCIES

A. Leases

Operating lease - as lessee

The company has taken certain assets (including office/residential premises/Land) on Operating Lease which are cancellable by giving appropriate notice as per the respective agreements. During the year Rs.1739.10 Lakhs (2017: Rs.2063.92 Lakhs) had been paid towards cancellable Operating Lease.

B Disclosure under Finance Lease as Lessee:

The company has entered into BOOT arrangement with IOT Infrastructure & Energy Services Limited in respect of LPG Bottling facilities for a period of 10 years. During the year, on completion of the contracted period of 10 years, the Lessor has transferred ownership of the assets to the company at Nil Value.

C Contingent Liabilities

Contingent Liabilities amounting to Rs.69142.11 Lakhs (2017: Rs.65184.02 Lakhs) are as under:

(i) Rs.2520.31 Lakhs (2017: Rs.539.66 Lakhs) being the demands raised by the Central Excise /Customs/ Service Tax Authorities including interest of Rs.807.62 Lakhs (2017: Rs.189.74 Lakhs).

(ii) Rs.52998.44 Lakhs (2017: Rs.50592.22 Lakhs) being the demands raised by the VAT/ Sales Tax Authorities and includes no interest (2017:Nil).

(in)? 9815.98 Lakhs (2017: Rs.10002.51 Lakhs) in respect of Income Tax demands including interest of Rs.4802.51 Lakhs (2017: Rs.2582.58 Lakhs).

(iv)Rs.3807.38 Lakhs (2017: Rs.4049.63 Lakhs) including Rs.239.68 Lakhs (2017: Rs.2241.64 Lakhs) on account of Projects for which suits have been filed in the Courts or cases are lying with Arbitrator. This includes interest of Rs.867.83 Lakhs (2017: Rs.827.75 Lakhs).

The Company has not considered those disputed demands/claims as contingent liabilities, for which, the outflow of resources has been considered as remote.

D Commitments

(i) Capital Commitments

Estimated amount of contracts remaining to be executed on Capital Account not provided for Rs.115254.48 Lakhs (2017: Rs.82208.01 Lakhs).

(ii) Other Commitments

The Company has an export obligation to the extent of Rs.10145.90 Lakhs (2017: Rs.59057.65 Lakhs) on account of concessional rate of customs duty availed under EPCG license scheme on import of capital goods.

Note - 4 âRelated Party Disclosuresâ in compliance with Ind-AS 24, are given below:

1. Relationship with Entities

A. Details of Holding Company

i) Indian Oil Corporation Limited (IOCL)

E. Government related entities where significant transactions are carried out:

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

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

Nature of Transactions:

- Sale of Product and Services

- Purchase of Product

- Purchase of Raw Materials

- Handling and Freight Charges, etc.

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

2) Key Managerial Personnel

A. Whole Time Directors / Company Secretary

1) Shri.B.Ashok (Upto 31.05.2017)

2) Shri.Sanjiv Singh

3) Shri Gautam Roy (Upto 31.1.2018)

4) Shri S.Venkataramana (Upto 31.7.2017)

5) Shri U.Venkata Ramana

6) Shri S.Krishna Prasad (Upto 31.1.2018)

7) Shri.Farzad Bahrami

8) Shri.Mohammad Bagher Dakhili

9) Shri S.N. Pandey (w.e.f 01.02.2018)

10) Shri G.Aravindan (w.e.f 30.01.2018)

11) Shri PShankar

B. Independent / Government Nominee Directors

1) Shri .K.M.Mahesh (Upto 24.11.2017)

2) Shri .Mrutunjay Shaoo

3) Dr.P.B.Lohiya

4) Smt. Perin Devi (w.e.f . 24.11.2017)

Note - 5 : FAIR VALUES

Set out below, is a comparison by class of the carrying amounts as per financial statements and fair value of the Companyâs financial instruments, along with the fair value measurement hierarchy:

Notes:

1. Levels under Fair Value measurement hierarchy are as follows:

(a) Level 1 items fair valuation is based upon market price quotation at each reporting date.

(b) Level 2 items fair valuation is based upon Significant observable inputs like PV of future cash flows, MTM valuation, etc.

(c) Level 3 items fair valuation is based upon Significant unobservable inputs wherein valuation done by independent valuer.

2. The management assessed that Trade Receivables, Cash and Cash Equivalents, Bank Balances, Deposit for Leave Encashment Fund, Recoverable from Employee Benefits Trusts, Other Non-derivative Current Financial Assets, Short-term Borrowing, Trade Payables, Floating Rate Loans and Other Non-derivative Current Financial Liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

3. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Methods and assumptions

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

Level 2 Hierarchy:

(i) Derivative instruments at fair value through profit or loss viz.Foreign exchange forward contracts: Replacement cost quoted by institutions for similar instruments by employing use of market observable inputs are considered.

(ii) Loans to employees, Loan to related parties, Security deposits paid and Security deposits received: Discounting future cash flows using rates currently available for items on similar terms, credit risk and remaining maturities

(iii) Finance lease obligation: For obligation arrived based on IRR, implicit rate applicable on the reporting date and for obligation arrived based on incremental borrowing rate, applicable rate for remaining maturity.

(iv) Term Loans from Banks - In Foreign Currency: Discounting future cash flows using rates currently available for items on similar terms, credit risk and remaining maturities (Excluding floating rate borrowings)

(v) Non Convertible Redeemable Preference shares : The fair value of Preference shares is estimated by discounting future cash flows.

Note - 6 : FINANCIAL INSTRUMENTS AND RISK FACTORS Financial Risk Factors

The Companyâs principal financial liabilities, other than derivatives, comprise Borrowings, trade and other payables, security deposits and employee liabilities. The main purpose of these financial liabilities is to finance the Companyâs operations and to support its operations. The Companyâs principal financial assets include loans & advances, trade and other receivables, shortterm deposits and cash / cash equivalents that derive directly from its operations. The companyâs requirement of crude oil imports are canalized through its holding company, Indian Oil Corporation Limited. The derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Companyâs policy that trading in derivatives are taken only to hedge the various risks that the company is exposed to and not for speculation purpose.

To ensure alignment of Risk Management system with the corporate and operational objective and to improve upon the existing procedure, the Executive Committee of the company constituted a Committee comprising of officials from various functional areas to identify the risks in the present context, prioritize them and formulate proper action plan for implementation. The Committee has formulated the Risk Management Policy. The Action Taken Report on the Risk Management Policy for the year 2016-17 was reviewed by the Audit Committee and Board at the Meeting held on 15.05.2017 respectively and the Report for the year 2017-18 has been reviewed by the Audit Committee and Board at the Meeting held on 10.05.2018.

The Board of Directors oversees the risk management activities for managing each of these risks, which are summarised below:

Market risk

The sensitivity analyses in the following sections relate to the position as at 31^st March 2018 and 31^st March 2017

The analyses exclude the impact of movements in market variables on the carrying values of gratuity and other postretirement obligations, provisions, and other non-financial assets.

The following assumptions have been made in calculating the sensitivity analyses:

- The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31^st March 2018 and 31^st March 2017 including the effect of hedge accounting.

Interest rate risk

The Companyâs interest rate risk management includes to maintain a mix between fixed and floating rates for rupee and foreign currency loans, based on liquidity, availability of cost effective instruments and considering the market / regulatory constraints. As as 31^st March 2018, approximately 93% of the Companyâs borrowings are at a fixed rate of interest (31^st March 2017: 94%).

The sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected, with all other variables held constant, on floating rate borrowings is as follows:

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior years .

Foreign currency risk

Credit risk Trade receivables

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Companyâs treasury department in accordance with the Companyâs policy. Investments of surplus funds are made only with approved counter parties and within credit limits assigned to each counter party so as to minimize concentration of risks and mitigate consequent financial loss.

Liquidity risk

The Company monitors its risk of shortage of funds using detailed cash flow projections which is monitored closely on daily basis. The Company seeks to manage its liquidity requirement by maintaining access to both short term and long term debt markets. In addition, Company has committed credit facilities from banks. The Companyâs objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, commercial papers, bank loans and debentures. and finance leases. The Company assessed the concentration of risk and concluded it to be low. The Company has access to a sufficient variety of sources of funding.

The table below summarises the maturity profile of the Companyâs financial liabilities based on contractual undiscounted payments.

Excessive risk concentration

Collateral

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

Note - 7: CAPITAL MANAGEMENT

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018 and 31 March 2017.

1. The Board of Directors has recommended a dividend of 6.65% on the paid-up Preference Capital of the company, representing Rs. 0.665 per preference share and 185% on the paid-up Equity Capital of the company, representing Rs.18.50 per equity share.

2. The Board of Directors of the Company at the meeting held on 05^th April 2018, has accorded approval for the partial redemption of Non- Convertible Cumulative Redeemable Preference shares to the extent of Rs.50000 Lakhs, out of the total outstanding amount of Rs.100000 Lakhs. Accordingly, in terms of the issue, offer for partial redemption of Non-Convertible Cumulative Redeemable Preference shares to the extent of Rs.50000 Lakhs, would be made to Indian Oil Corporation Limited. Based on the acceptance of the offer by IndianOil, further action in this regard would be initiated.

3.The Board of Directors of the Company at the meeting held on 05^th April 2018 has accorded approval, (subject to the approval of the shareholders of the Company in the General Meeting)

a) For cancellation of unsubscribed equity share capital of Rs.2086.89 Lakhs consisting of 2,08,68,900 equity shares of Rs.10/- each, comprising of partial subscription to Rights Issue made by the company in 1984, by the Government of India and non-subscription by Amoco India Inc., to the Rights Issue made by the company in 1984;

b) For cancellation of 2,19,700 forfeited equity shares of Rs.10/- each totaling Rs.21.97 Lakhs (1,87,900 equity shares forfeited on 26.09.2003 and 31,800 equity shares forfeited on 26.10.2006)

Note - 8 : EXPOSURE TO FINANCIAL DERIVATIVES Financial and Derivative Instruments:

1. All derivative contracts entered into by the Company are for hedging its foreign currency relating to underlying transactions and firm commitments and not for any speculative or trading purposes.

2. The company has No Outstanding forward contract as at 31^st March 2018(2017 : NIL) which has been undertaken to hedge its exposure to borrowings and other financial liabilities.

3. Foreign currency exposure that are not hedged by a derivative instrument as on 31^st March 2018 is given below:

1 Details of impairment loss in respect of Cauvery Basin Refinery

The Company has refineries at two locations viz., Manali and Nagapattinam (Cauvery Basin Refinery). Consequent to implementation of BS- IV specifications on a pan India basis w.e.f 01.04.2017 and in the absence of secondary treatment facilities, the BS - III grade of diesel production from CBR would not be marketable in the local market, entailing significant coastal/export under recoveries, which has adversely impacted the profitability of CBR and hence the value in use is negative. Accordingly, in line with the requirements of Ind AS -36, an amount of Rs.432.77 Lakhs has been accounted as impairment loss during the year, being the difference between the carrying value of additions during the year Rs.3345.16 Lakhs and the recoverable value of Rs.1003.55 Lakhs after adjusting the impairment loss of â1908.84 Lakhs already accounted as part of Capital work in progress in previous year. This impairment loss has been recognised as part of Depreciation, Depletion and Amortisation of tangible and intangible assets in the statement of profit and loss as the carrying value of the assets is lower than the value in use/ estimated recoverable amount of this CGU. Total impairment loss recognized as on 31.03.2018 - Rs.6611.41 Lakhs.

In estimating the value in use, the approximate weighted average capital cost has been considered as the discount rate used to calculate the net present value of the estimated future cash flows, which are subject to changes in the external environment.

The fair value less cost of disposal used to determine the recoverable amounts of the impaired assets are classified as level 3 fair value measurements (as detailed in statement of significant accounting policy no.4), as the estimated recoverable amounts are not based on observable market data, rather, managementâs best estimates. The results of impairment test are sensitive to changes in key judgements, such as changes in commodity prices, future changes in alternate use of assets etc, which could result in increase or decrease of the recoverable amounts and result in additional impairment charges or recovery of impairment charged.

2 Pay revision in respect of supervisory employees due from 01.01.2017 has been implemented based on receipt of presidential directives on 29.10.2017 and accounted accordingly. Pending finalization of revision in pay and benefits in respect of non -supervisory employees, provision of Rs.3783 Lakhs, including consequential impact of retirement benefits has been reckoned during the year - Refer note 25.( 2017: Rs.11064 Lakhs for all employees )

3 The Employees Township at Cauvery Basin Refinery has been constructed on land area of thirty four acres and forty nine cents of land leased from a trust on five-year renewable basis.

4 As part of CSR activities, CPCL sponsors polytechnic college, for which twenty acres of land of the company has been leased to the CPCL Educational Trust for a period of 50 years.

5 (a) The cost of land includes provisional payments towards cost, compensation, and other accounts for which detailed accounts are yet to be received from the authorities concerned.

(b) The company has valid title for all immovable properties. However, in respect of 186.86 acres of land allotted by Government of Tamil Nadu (classified as Poramboke) assignment deed is yet to be received. Out of this, value is to be determined by Government of Tamilnadu in respect of 135.93 acres.

(c) Pending decision of the Government/Court, additional compensation, if any, payable to the landowners and the Government for certain lands acquired, is not quantifiable, and hence not considered.

6 The Companyâs Property, Plant & Equipments and stores & spares were damaged due to the severe floods in Chennai during December 2015. As against the final claim amount of Rs.607.13 Lakhs (replacement & repair cost net of deductibles), on account payment of Rs.300.00 Lakhs received from the insurance company in FY 2015-16, has been disclosed as income in that year. In respect of damages suffered due to Vardha cyclone during December 2016, the Company has filed insurance claim for an estimated amount of Rs.992.34 Lakhs (replacement cost after considering the deductibles). Final claim is yet to be lodged with the insurance company

7 Valuation of Finished Products:

The overall gross margin percentage for all joint products is subtracted from the final net realisable value of each product to arrive at the total cost of each product which is taken as the basis for valuation of closing stock of finished products. (Refer Policy No 7.2 in Note - 1 - âStatement of Significant Accounting Policiesâ).

8 The company operates only in a single segment viz. downstream petroleum sector. As such reporting is done on a single segment basis.

9 Previous yearâs comparative figures have been regrouped, reclassified and recast wherever necessary.

Mar 31, 2017

1. CASH AND CASH EQUIVALENTS

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

2. CASH FLOW STATEMENT

Cash flow statement are reported using the indirect method, whereby net profit or loss 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 items of income or expense associated with investing or financing cash flows.

Note -3: SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the company''s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

JUDGEMENTS

In the process of applying the company''s accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognized in the standalone financial statements:

Contingencies

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal, contractor, land access and other claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence and potential quantum of contingencies inherently involves the exercise of significant judgment and the use of estimates regarding the outcome of future events

Refer Note no. 33 for details of Contingent Liabilities

ESTIMATES AND ASSUMPTIONS

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the company. Such changes are reflected in the assumptions when they occur.

Impairment of non-financial assets

The value in use calculation is based on a DCF model. The cash flows do not include impact of significant future investments that may enhance the asset''s performance of the CGU being tested. The results of impairment test are sensitive to changes in key judgments, such as changes in commodity prices, future changes in alternate use of assets etc, which could result in increase or decrease of the recoverable amounts and result in additional impairment charges or recovery of impairment charged.

Refer Note 43.2 on impairment recognized during the year.

Taxes

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. The net tax expense has been arrived at after considering deferred tax liability and Credit for Minimum Alternate Tax (including credits available in the previous year), considering the availability of MAT credit for utilization against the future year''s tax liability. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Refer Note 7 on Taxes

Defined benefit plans

The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter, which is most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government securities of relatable maturity.

The mortality rate is based on publicly available mortality tables which tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Further details about gratuity obligations are given in Note 32.

(i) Includes receivables from Indian Oil Corporation Ltd., the holding company - Rs,89104.45 Lakhs (2016: Rs,61334.93 Lakhs; 2015: Rs,161885.99 Lakhs) and receivables from Indian Additives Limited., Joint Venture Company - Rs,393.85 Lakhs(2016: Rs,485.25 Lakhs ; 2015: Rs,401.10 Lakhs). For Terms & Conditions relating to Related Party transactions. Refer note 34

(ii) Represents dues for which mortgage and first charge on Fixed asset is in favour of the company to the extent of Rs,10000 Lakhs (2016: Rs,10000 Lakhs; 2015: Rs,10000 Lakhs)

(i) As per the Formation Agreement entered into between the promoters, an offer is to be made to the Naftiran Intertrade Company Limited (NICO), an affiliate of National Iranian Oil Company (NIOC) in any issue of the Capital in proportion to the shares held by them at the time of such issue to enable them to maintain their shareholding at the existing percentage.

(ii) Based on special resolution passed by the shareholders through postal ballot on 16.07.2015, the company has allotted 100 Crore Non Convertible Cumulative Redeemable Preference Shares of 0 each for cash at par amounting to Rs,1000 Crore to Indian Oil Corporation Ltd, the holding company on private placement preferential allotment basis on 24.09.2015 after receipt of full subscription amount.

Preference Shares classified as financial liability (long term borrowing) as per Ind AS 32 - Refer note -15(11) (C) and note (ii) thereon

C. Non Convertible Cumulative Redeemable Preference Shares

Preference Share is treated as financial liability as per Ind AS 32, as these are redeemable on maturity for a fixed determinable amount and carry fixed rate of dividend.

(i) Rights, preferences and restrictions attached to Preference shares:

The Company has one class of preference shares i.e. Non-Convertible Cumulative Redeemable Preference Shares (NCCRP Shares) ofRs, 10 per share.

(a) Such shares shall confer on the holders thereof, the right to preferential dividend from the date of allotment i.e., 24.09.2015

(b) Such shares shall rank for capital and dividend (including all dividend undeclared up to the commencement of winding up) and for repayment of capital in a winding up, pari passu inter se and in priority to the Ordinary Shares of the Company, but shall not confer any further or other right to participate either in profits or assets.

(d) The tenure of the NCCRP Shares would be 10 years, with put and call option. Either the preference shareholder shall have right to exercise Put option or the Issuer shall have right to exercise Call option to redeem the preference shares, in whole or in part after the 5 years of the preference issue date. However, it is also agreed that Put & Call option before the 5 year period can be exercised by mutual consent of both the parties by giving 30 days notice.

(e) Dividend rate shall be equivalent to the Post tax yield of AAA rated corporate bond i.e. prevailing (at the time of issue) 10 year G-Sec yield plus spread on AAA rated corporate bond i.e., 6.65% p.a (reckoned forthe FY 2015-16). The coupon rate on preference share would be adjusted to reflect the subsequent changes in tax laws with the consent and approval of preference share holders by way of special resolution. Currently, the Effective interest rate inclusive of dividend distribution tax is 8.00%

A Pending the approval of shareholders, preference dividend has been provisionally accrued as finance cost. However, as per the Companies Act 2013, the preference shares is treated as part of share capital and the provisions of the Act relating to declaration of Preference Dividend at the end of the year would be applicable.

B There are no amounts due for payment to the Investor Education and Protection Fund as at the year end. Balance as at 31st March 2017 includes Rs, 917.32 Lakhs (2016: Rs, 3210.61 Lakhs; 2015: Rs,3210.61 Lakhs) of unpaid dividend to Naftiran Inter trade company Limited (NICO) for the financial year ending 2016 which could not be remitted due to restrictions in banking channels arising out of sanctions imposed by US / European Union against Iran

No interest amount remains unpaid to such Micro and Small enterprises as on 31 March 2017 and no payments were made to such enterprises beyond the "appointed day" during the year. Also, the company has not paid any interest in terms of section 16 of the above mentioned act or otherwise.

B Represents dues to Indian Oil Corporation Ltd., the holding company Rs, 114882.02 Lakhs (2016: Rs,175764.32 Lakhs; 2015: Rs,198087.31 Lakhs) and IOT Infrastructure and Energy Services Limited Rs, 107.81 Lakhs (2016: Rs,183.24 Lakhs; 2015: Rs,96.01 Lakhs)

A Represents Dividends received from Indian Additives Limited (Non-Current Investments in Joint Ventures) B Includes Income from Petroleum India International Rs, 93.58 Lakhs (2016: Rs, 78.55 Lakhs)

A Miscellaneous Expenses Includes:

Expenditure on Public Relations and Publicity amounting to Rs,372.6 Lakhs (2016 : Rs,281.24 Lakhs). The ratio of annual expenditure on Public Relations and Publicity to the annual turnover (inclusive of excise duty) is 0.00009:1 (2016: 0.00008:1).

Entertainment Expenses Rs,29.43 Lakhs (2016: Rs,21.22 Lakhs).

Note - 4 EMPLOYEE BENEFITS

Disclosures in compliance with Ind AS 19 on "Employee Benefits" is as under

A. Defined Contribution Plans- General Description Pension Scheme:

During the year, the company has recognized Rs,2286.41 Lakhs (2016: Rs,2108.82 Lakhs) towards Defined Contributory Employees Pension Scheme in the Statement of Profit and Loss/ CWIP (included in Contribution to Provident & Other Funds in Note - 25/ Construction period expenses in Note-2.1)

B. Defined Benefit Plans- General Description

1. Provident Fund:

The Company''s contribution to the Provident Fund is remitted to separate provident fund trust established for this purpose based on a fixed percentage of the eligible employee''s salary and charged to Statement of Profit and Loss. Shortfall, if any, in the fund assets, based on the Government specified minimum rate of return, will be made good by the Company. The Provident Funds maintained by the PF Trust in respect of which actuarial valuation is carried out does not have any deficit as on 31st March 2017.

During the year, the company has recognized Rs, 234.04 lakhs (2016: Rs, 227.88 lakhs) as contribution to EPS-95 in the Statement of Profit and Loss / CWIP (included in Contribution to Provident and Other Funds in Note - 25/ Construction period expenses in Note-2.1)

2. Gratuity:

3. Post Retirement Medical Scheme (PRMS):

PRMS provides medical benefit to retired employees and eligible dependant family members.

C. Other Long-Term Employee Benefits - General Description

5. Leave Encashment:

6. Long Service Award:

A. Leases

Operating lease - as lessee

The company has taken certain assets (including office/residential premises/Land) on Operating Lease which are cancellable by giving appropriate notice as per the respective agreements. During the year Rs,2063.92 Lakh (2016: Rs,2521.47 Lakh) had been paid towards cancellable Operating Lease.

B Disclosure under Finance Lease as Lessee:

The company has entered into BOOT arrangement with IOT Infrastructure & Energy Services Limited in respect of LPG Bottling facilities for a period of 10 years. Lessor will transfer ownership to the company after 10 years at Nil Value

C Contingent Liabilities

Contingent Liabilities amounting toRs,65184.02 Lakhs (2016:763045.40 Lakhs; 2015:738669.59 Lakhs) are as under

(i) 7539.66 Lakhs (2016: 7514.28 Lakhs; 2015: Rs,619.54 Lakhs) being the demands raised by the Central Excise /Customs/ Service Tax Authorities including interest of 7189.74 Lakhs (2016: 7182.76 Lakhs; 2015: 7257.02 Lakhs).

(ii) 750592.22 Lakhs (2016:748632.59 Lakhs; 2015:727028.27 Lakhs) being the demands raised by the VAT/ Sales Tax Authorities and includes no interest (2016; Nil, 2015; Nil).

(iii) 710002.51 Lakhs (2016: 79414.81 Lakhs; 2015: 77075.98 Lakhs) in respect of Income Tax demands including interest of 72582.58 Lakhs (2016:71994.87 Lakhs; 2015:7795.08 Lakhs).

(iv) 74049.63 Lakhs (2016:74483.72 Lakhs; 2015:73945.80 Lakhs) including 72241.64 Lakhs (2016:72219.59 Lakhs; 2015:71713.94 Lakhs) on account of Projects for which suits have been filed in the Courts or cases are lying with Arbitrator. This includes interest of 7827.75 Lakhs (2016:7784.43 Lakhs; 2015:7692.78 Lakhs).

The Company has not considered those disputed demands/claims as contingent liabilities, for which, the outflow of resources has been considered as remote.

D Commitments

(i) Capital Commitments

Estimated amount of contracts remaining to be executed on Capital Account not provided for 782208.01 Lakhs (2016: 7154579.73 Lakhs; 2015:7249455.02 Lakhs).

(ii) Other Commitments

The Company has an export obligation to the extent of759057.65 Lakhs (2016:745190.62 Lakhs; 2015:712881.18 Lakhs) on account of concessional rate of customs duty availed under EPCG license scheme on import of capital goods.

F. Other Government related entities where significant transactions were carried out i) Details of Entities

1) Oil & Natural Gas Corporation Limited

2) Madras Fertilizers Limited

3) GAIL (India) Limited

4) Bharat Petroleum Corporation Limited

5) Hindustan Petroleum Corporation Limited

6) Shipping Corporation of India Limited

7) Engineers India Limited

8) Bharat Heavy Electricals Limited

9) Bridge & Roof Co. (India) Ltd

2) Key Managerial Personnel

A. Whole Time Directors / Company Secretary B. Independent / Government Nominee Directors

1) Shri B.Ashok 1) Shri K.M.Mahesh

2) Shri Sanjiv Singh 2) Shri Mrutunjay Sahoo (w.e.f 23.02.2017)

3) Shri Gautam Roy 3) Dr. P.B.Lohiya (w.e.f 23.02.2017)

4) Shri S.Venkataramana 4) Shri G.Ramaswamy (Upto 08.10.2016)

5) Shri U.Venkataramana

6) Shri S.Krishna Prasad

7) Shri Yasin Rezazadeh (Upto 23.01.2017)

8) Shri Ali Zamani (Upto 23.02.2017)

9) Shri Mohammad Bagher Dakhili (w.e.f 23.01.2017)

10) Shri Farzad Bahrami (w.e.f 23.02.2017)

11) Shri P.Shankar

Notes:

1. Levels under Fair Value measurement hierarchy are as follows:

a) Level 1 items fair valuation is based upon market price quotation at each reporting date

b) Level 2 items fair valuation is based upon Significant observable inputs like PV of future cash flows, MTM valuation, etc.

c) Level 3 items fair valuation is based upon Significant unobservable inputs wherein valuation done by independent valuer.

2. The management assessed that Trade Receivables, Cash and Cash Equivalents, Bank Balances, Deposit for Leave Encashment Fund, Recoverable from Employee Benefits Trusts, Other Non-derivative Current Financial Assets, Short-term Borrowing, Trade Payables, Floating Rate Loans and Other Non-derivative Current Financial Liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

Methods and assumptions

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

Level 2 Hierarchy:

(i) Derivative instruments at fair value through profit or loss viz. Foreign exchange forward contracts: Replacement cost quoted by institutions for similar instruments by employing use of market observable inputs are considered .

(ii) Loans to employees. Loan to related parties. Security deposits paid and Security deposits received: Discounting future cash flows using rates currently available for items on similar terms, credit risk and remaining maturities

(iii) Finance lease obligation: For obligation arrived based on IRR, implicit rate applicable on the reporting date and for obligation arrived based on incremental borrowing rate, applicable rate for remaining maturity.

(iv) Term Loans from Banks - In Foreign Currency: Discounting future cash flows using rates currently available for items on similar terms, credit risk and remaining maturities (Excluding floating rate borrowings)

(v) Non Convertible Redeemable Preference shares: The fair value of Preference shares is estimated by discounting future cash flows.

Note - 7 : FINANCIAL INSTRUMENTS AND RISK FACTORS Financial Risk Factors

The Company''s principal financial liabilities, other than derivatives, comprise borrowings, trade and other payables, security deposits, employee liabilities and finance lease obligation. The main purpose of these financial liabilities is to finance the Company''s operations and to support its operations. The Company''s principal financial assets include loans & advances, trade and other receivables, short-term deposits and cash / cash equivalents that derive directly from its operations. The company''s requirement of crude oil imports are canalized through its holding company, Indian Oil Corporation Limited. The derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that trading in derivatives are taken only to hedge the various risks that the company is exposed to and not for speculation purpose.

To ensure alignment of Risk Management system with the corporate and operational objective and to improve upon the existing procedure, the Executive Committee of the company constituted a Committee comprising of officials from various functional areas to identify the risks in the present context, prioritize them and formulate proper action plan for implementation. The Committee has formulated the Risk Management Policy. The Action Taken Report on the Risk Management Policy for the year 2015-16 was reviewed by the Audit Committee and Board at the Meeting held on 22.05.2016 and 23.05.2016 respectively and the Report for the year 2016-17 has been reviewed by the Audit Committee and Board at the Meeting held on 15.05.2017.

The Board of Directors oversees the risk management activities for managing each of these risks, which are summarized below:

Market risk

The sensitivity analyses in the following sections relate to the position as at 31st March 2017 and 31st March 2016.

The analyses exclude the impact of movements in market variables on the carrying values of gratuity and other post-retirement obligations, provisions, and other non-financial assets and liabilities of foreign operations.

The following assumptions have been made in calculating the sensitivity analyses:

- The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31st March 2017 and 31st March 2016 including the effect of hedge accounting.

Interest rate risk

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

The Company''s interest rate risk management includes to maintain a mix between fixed and floating rates for rupee and foreign currency loans, based on liquidity, availability of cost effective instruments and considering the market/ regulatory constraints. As at 31st March 2017, approximately 93% of the Company''s borrowings are at a fixed rate of interest (31st March 2016:100%, 1st April 2015:100%).

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior years

Foreign currency risk

The Company has outstanding forward contract of X NIL Lakhs as at 31st March 2017 (31st March 2016: Rs, 44328.29 Lakhs, 1 st April 2015: Nil Lakhs) which has been undertaken to hedge its exposure to borrowings and other financial liabilities.

The sensitivity to a reasonably possible change in USD exchange rates, with all other variables held constant and the impact on the Company''s profit before tax due to changes in the fair value of monetary assets and liabilities is tabulated below. The Company''s exposure to foreign currency changes for all other currencies is not material.

Credit risk Trade receivables

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty so as to minimize concentration of risks and mitigate consequent financial loss.

Liquidity risk

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

The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments.

Excessive risk concentration

Substantial portion of the Company''s sales is to the Holding Company, Indian Oil Corporation Limited. Consequently, trade receivables from IOCL are a significant proportion of the Company''s receivables. Since the operations are synchronized with those of the Holding Company, for optimal results, the same does not present any risk.

Collateral

Note - 8: CAPITAL MANAGEMENT

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31st March 2017 and 31st March 2016.

Note - 9 : DISCLOSURES ON GOVERNMENT GRANTS Revenue Grant

1 Nature of grant Export Promotion Capital Goods (EPCG) scheme allows import of capital goods including spares at zero duty subject to fulfillment of an export obligation

Note 10 : EVENTS AFTER REPORTING PERIOD

The Board of Directors has recommended a dividend of 6.65% on the paid-up Preference Capital of the company, representing Rs, 0.665 per preference share and 210% on the paid-up Equity Capital of the company, representing Rs, 21 per equity share.

STANDALONE FINANCIAL STATEMENTS

Note - 11 : EXPOSURE TO FINANCIAL DERIVATIVES

Financial and Derivative Instruments:

1. All derivative contracts entered into by the Company are for hedging its foreign currency relating to underlying transactions and firm commitments and not for any speculative or trading purposes.

Note - 12 : FIRST-TIME ADOPTION OF IND AS

These financial statements, for the year ended 31 March 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31st March 2017, together with the comparative period data as at and for the year ended 31st March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at 1 st April 2015, the Company''s date of transition to Ind AS. This note explains exemptions availed by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 st April 2015 and the financial statements as at and for the year ended 31st March 2016.

Exemptions applied:

1. Mandatory exceptions: a) Estimates

The estimates at 1 st April 2015 and at 31st March 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:

- FVTOCI - unquoted equity shares

Impairment of financial assets are made based on expected credit loss model

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1 st April 2015, the date of transition to Ind AS and as of 31st March 2016.

2. Optional exemptions;

A. Deemed cost-Previous GAAP carrying amount: (PPE and Intangible)

Since there is no change in the functional currency, the Company has elected to continue with the carrying value for all of Property, Plant and Equipment and Intangible Assets, as recognized in its Indian GAAP financial as deemed cost at the transition date.

B. Investment in Joint ventures and associates:

The Company has elected this exemption and opted to continue with the carrying value of investment in joint ventures, as recognized in its Indian GAAP financials, as deemed cost at the date of transition.

C. Designate of previously recognized financial instrument:

The Company has elected this exemption and opted to:

- Designate financial asset at FVTPL as per Ind AS 109 based on facts and circumstances as on transition date;

- Designate an investment in equity shares as FVOCI, as per Ind AS 109, based on facts and circumstances exist on transition date.

D. Classification and measurement of financial assets:

i. Financial Instruments: (Loan to employees. Security deposits received and paid):

Financial assets like loan to employees, security deposits received and security deposits paid, has been classified and measured at amortized cost on the basis of the facts and circumstances that exist at the date of transition to Ind ASs. Since, it is impracticable for the Company to apply retrospectively the effective interest method in Ind AS 109, the fair value of the financial asset or the financial liability at the date of transition to Ind As by applying amortized cost method, has been considered as the new gross carrying amount of that financial asset or the financial liability at the date of transition to Ind AS.

ii. Financial Instruments: (Equity shares other than investment in associates and JVs):

The Company has designated unquoted equity instruments held at 1 April 2015 as fair value through OCI investments.

E. Embedded Derivatives:

The Company has assessed whether an embedded derivative is required to be separated from the host contract and accounted for as a derivative on the basis of the conditions that existed at the later of the date it first became a party to the contract and the date of reassessment.

2 Details of impairment loss in respect of Cauvery Basin Refinery

The Company has refineries at two locations viz., Manali and Nagapattinam (Cauvery Basin Refinery). Consequent to implementation of BS- IV specifications on a pan India basis w.e.f 01.04.2017 and in the absence of secondary treatment facilities, the BS - III grade of diesel production from CBR would not marketable in the local market, entailing significant coastal/export under recoveries, which has adversely impacted the profitability of CBR and hence the value in use is negative. Accordingly, in line with the requirements of Ind AS -36, difference between the carrying value ofRs, 113.19 Cr and the recoverable value ofRs, 51.40 Cr has been accounted as impairment loss during the year. This impairment loss has been recognized as part of Depreciation, Depletion and Amortization of tangible and intangible assets in the statement of profit and loss as the carrying value of the assets is lower than the value in use/ estimated recoverable amount of this CGU.

The fair value less cost of disposal used to determine the recoverable amounts of the impaired assets are classified as level 3 fair value measurements (as detailed in statement of significant accounting policy no.4), as the estimated recoverable amounts are not based on observable market data, rather, management''s best estimates. The results of impairment test are sensitive to changes in key judgments, such as changes in commodity prices, future changes in alternate use of assets etc, which could result in increase or decrease of the recoverable amounts and result in additional impairment charges or recovery of impairment charged.

3 The pay revision for employees is due from 01.01.2017. Pending finalization of revision in pay and benefits, provision of Rs, 110 crore (inclusive of consequential impact on retirement benefits has been considered) - Refer note 25.

4 The Employees'' Township at Cauvery Basin Refinery has been constructed on land area of thirty four acres and forty nine cents of land leased from a trust on five-year renewable basis.

5 Sixteen acres and twenty six cents of land of the company are under lease for a period of twelve years to IOT Infrastructure & Energy Services Limited in respect of LPG botting facilities operated on BOOT basis.

6 As part of CSR activities, CPCL sponsors polytechnic college, for which twenty acres of land of the company has been leased to CPCL Educational Trust for a period of fifty years.

7 (a) The cost of land includes provisional payments towards cost, compensation, and other accounts for which detailed accounts are yet to be received from the authorities concerned.

(b) The company has valid title for all immovable properties. However, in respect of 186.86 acres of Land allotted by Government of Tamil Nadu (classified as Poramboke) Assignment deed is yet to be received. Out of this, value is to be determined by Government of Tamilnadu in respect of 135.93 acres.

(c) Pending decision of the Government/Court, additional compensation, if any, payable to the landowners and the Government for certain lands acquired, is not quantifiable, and hence not considered.

13 Valuation of Finished Products:

The overall gross margin percentage for all joint products is subtracted from the final net realizable value of each product to arrive at the total cost of each product which is taken as the basis for valuation of closing stock of finished products. (Refer Policy No 7.2 in Note 1 - "Statement of Significant Accounting Policies").

9 The company operates only in a single segment viz. downstream petroleum sector. As such reporting is done on a single segment basis.

10 Previous year''s comparative figures have been regrouped,reclassified and recast wherever necessary.

Mar 31, 2016

NOTE "1" - DEFERRED TAX LIABILITIES / (ASSETS) (NET)

Due to future taxable income arising on account of reversal of timing differences, Company has restricted the recognition of Deferred Tax Asset in respect of carry forward business loss and unabsorbed depreciation to the extent of Deferred Tax Liability of Rs, 77956.16 lakhs.

(i] There are no amounts due for payment to the Investor Education and Protection Fund as at the year end. Balance as at 31^st March 2016 includes Rs, 3210.61 Lakhs (2015 : Rs, 3210.61 Lakhs] of unpaid dividend to Naftiran Inter trade company Limited (NICO] for the financial years ending 2011 and 2012 which could not be remitted due to sanctions imposed by US / European Union against Iran.

(ii] Refer Sl. No 9 of Note 28.

(i) With regard to Disclosure requirement under the provisions of Section 22 of Micro, Small and Medium Enterprises Development Act, 2006, the company has carried out the same based on the confirmation received from its suppliers.

No interest amount remains unpaid to such Micro and Small enterprises as on 31.03.2016 and no payments were made to such enterprises beyond the âappointed dayâ during the year. Also, the company has not paid any interest in terms of Section 16 of the above mentioned act or otherwise.

(ii) Represents dues to Indian Oil Corporation Ltd., the holding company.

A : Gross block of Land includes Rs, 18.36 Lakhs deposited towards 50.93 acres of Land for which assignment deed is yet to be received from Govt, of TamilNadu.

B : Refer S.No. 2.1.3 and 2.5.4 of Note - 1, Significant Accounting Policies.

C : Pursuant to the requirements prescribed under Schedule II to the Companies Act, 2013 the Company has, effective 1^st April 2015, reviewed and identified the components (significant parts) of the main asset having different useful lives as compared to the main asset and depreciation has been charged accordingly. Due to this, the depreciation for the year 2015-16 is higher by Rs, 3984.29 lakhs. In addition, as per the transitional provisions, the Company has charged Rs, 1584.63 lakhs to the opening balance of General reserve as at 1^st April, 2015.

D : Represents 5/24 share of total cost of the Railway Siding jointly owned by the Company along with Madras Fertilizers Limited, Madras Petrochem Limited, Steel Authority of India Limited and Rashtriya Ispat Nigam Limited

E : The cost of assets are net of VAT/CENVAT, wherever applicable.

(i) Includes receivables from Indian Oil Corporation Ltd., the holding company - Rs, 61334.93 Lakhs. (2015: Rs, 161885.99 Lakhs) and receivables from Indian Additives Limited., Joint Venture Company - Rs, 485.25 Lakhs. (2015: Rs, 401.10 Lakhs)

(ii) Represents dues for which mortgage and first charge on an asset is in favour of the company to the extent of Rs, 10000 Lakhs. (2015: Rs, 10000 Lakhs)

(i) In line with the scheme formulated by the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas, the company has received an aggregate discount of Rs, 17322.40 Lakhs (2015: Rs, 412063.58 Lakhs) from Oil and Natural Gas Corporation Limited on Crude Oil purchase and has passed on the same as discounts on products sold to Indian Oil Corporation Limited, the holding company. Accordingly, Gross Sale of Products and Consumption of Raw Materials for the year are net of Rs, 17322.40 Lakhs. (2015: Rs, 412063.58 Lakhs).

Refer Note 30 - Finished Products - Quantity and Value Particulars, for product wise sales

(i) Includes interest on Income Tax refunds - Nil (2015: Rs, 805.83 Lakhs)

(ii) Represents income from Non Current Trade Investment - Indian Additives Limited - Joint Venture Company.

(iii)Includes income from Petroleum India International (Non Current Trade Investments) Rs, 78.55 Lakhs (2015: Rs, 60.36 Lakhs)

(iv) During December 2015, due to severe floods in Chennai, there was damage to the Company''s Plant & Machinery and Stores & spares. The Company had filed an insurance claim for an estimated amount of Rs, 1378.95 Lakhs (replacement cost) after considering deductibles. Pending settlement of the claim, the Company has received an "On Account payment" of Rs, 300 Lakhs from the insurance company which has been disclosed under "Other income".

(i) Refer Sl No.12 in Note 28 (Annexure -II)

Miscellaneuos Expenses include:

a) Expenditure on Public Relations and Publicity amounting to Rs, 243.99 lakhs (2015: Rs, 143.66 lakhs). The ratio of annual expenditure on Public Relations and Publicity to the annual turnover is 0.00007:1 (2015: 0.00003:1)

b) Entertainment Expenses Rs, 21.22 lakhs (2015: Rs, 17.68 lakhs).

1. Contingent Liabilities:

a) Claims against the company not acknowledged as debts Rs, 63029.67 lakhs (2015: Rs, 38669.59 lakhs).

These mainly include:

i) Rs, 498.55 lakhs (2015: Rs, 619.54 lakhs) in respect of Central Excise.

ii) Rs, 48632.59 lakhs (2015: Rs, 27028.27 lakhs) in respect of Sales Tax.

iii) Rs, 9414.81 lakhs (2015: Rs, 7075.98 lakhs) in respect of Income Tax.

iv) Rs, 2219.59 lakhs (2015: Rs, 1713.94 lakhs) relating to projects.

b) Interest/Penalty, if any, unascertainable, on the above claims is not considered.

c) Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs, 154579.73 lakhs (2015: Rs, 249455.02 lakhs).

2. Thirty four acres and forty nine cents of land has been taken on lease from a trust on a five-year renewable lease for the construction of Employees Township at Cauvery Basin Refinery

3. Sixteen acres and twenty six cents and twenty acres of land of the company are in the possession of IOT Infrastructure & Energy Services Limited and CPCL Educational T rust respectively under lease agreement for a period of 12 years and 50 years respectively.

4. (a) The cost of land includes provisional payments towards cost, compensation, and other accounts for which

detailed accounts are yet to be received from the authorities concerned

(c) Pending decision of the Government/Court, additional compensation, if any, payable to the landowners and the Government for certain lands acquired, is not quantifiable, and hence not considered

5. Valuation of Finished Products:

The overall gross margin percentage for all joint products is subtracted from the final net realizable value of each product to arrive at the total cost of each product which is taken as the basis for valuation of closing stock of finished products. (Refer Policy No 7.3 in Note - 1 - "Statement of Significant Accounting Policies").

6. In view of Componentization of fixed assets, expenses on replacement of significant catalyst, hitherto charged to statement of Profit and Loss, have been identified and capitalized as component. This has resulted in decrease in expenditure and increase in profit before tax during the year by Rs, 2165.90 lakhs. Accordingly, net tangible assets is higher by the like amount.

7. The Company has export obligation of Rs, 31854 lakhs (2015: Nil) on account of concessional rate of customs duty availed under EPCG scheme on import of capital goods/Advance License scheme on import of crude oil

8. The company operates in a single segment viz. downstream petroleum sector. As such reporting is done on a single segment basis.

9. Foreign currency exposures (liability) as on 31.03.2016 is Rs, 273528.16 Lakhs (2015: Rs, 392932.66 Lakhs). The company has entered into 135 (2015: 4) forward contract transactions during the year for hedging purposes out of which 4 Forward contracts of Rs, 44328.29 Lakhs (2015: Nil) remained outstanding as on 31^st March 2016.

10. Disclosure as required under Accounting Standard - 15 (Revised) on "Employee Benefits" is provided in Annexure - I to this Note.

11. In compliance with Accounting Standard - 18 on "Related Party Disclosures", the required information is given in Annexure - II to this Note.

# Audited

b) Name of the Joint Venture National Aromatics and Petrochemicals Corporation Ltd

Proportion of ownership interest 50%

Country of Incorporation India

Aggregate amount of interest in Joint Venture is not given since the joint venture is not operational

12. During the year, the company has undertaken a review of all fixed assets in line with the requirements of AS- 28 on "Impairment of Assets". Based on such review, no provision for impairment is required to be recognised for the year.

13. In Compliance of Accounting Standard - 29 on " Provisions, Contingent Liabilities & Contingent Assets", the required information on each class of contingent liability is as under :

Defined Contribution Schemes:

(a) Provident Fund

(i) During the year, the company has recognized Rs, 1635.70 Lakhs (2015: Rs, 1574.59 Lakhs) as Employer''s contribution to Provident Fund in the Statement of Profit and Loss (included in ''Contribution to Provident & Other Funds'' in Note 24)

(ii) In addition, during the year, the company has recognized '' 227.88 Lakhs (2015 : Rs, 181.21 Lakhs) as contribution to EPS-95 in the Statement of Profit and Loss (included in ''Contribution to Provident & Other Funds'' in Note 24)

(b) Pension Scheme

During the year, the company has recognized Rs, 2108.82 Lakhs (2015: Rs, 509.18 Lakhs) towards Defined Contributory Employees'' Pension Scheme in the Statement of Profit and Loss (included in ''Contribution to Provident & Other Funds'' in Note 24)

Defined Benefits Plans: General Description

Gratuity:

Each employee rendering continuous service of 5 years or more is entitled to receive gratuity amount equal to 15/26 of the monthly emoluments for every completed year of service subject to a maximum of '' 10 Lakhs at the time of separation from the company

Leave Encashment:

PRMS

Post Retirement Medical Scheme (PRMS) provides medical benefit to retired employees and eligible dependant family members.

Long Service Award:

The long service award scheme, under which the employees were rewarded with gold coins based on duration of completed service, has been discontinued based on the advice of MoP&NG. Pending the finalization of alternate scheme, the company has continued actuarial liability as on 31.03.2015. No additional liability has been provided

a) The remuneration/other benefits & entitlements to KMP stated above does not include the impact of provision made on actuarial valuation of retirement/post retirement benefit schemes as the same are not ascertainable separately.

b) Sl No 2, 8 , 9 & 10 represents transactions with Joint Venture Company - Indian Additives Limited

Key Management Personnel (KMP)

Whole-time Directors

1) Mr Gautam Roy

2) Mr S. Venkataramana

3) Mr S. Krishna Prasad

4) Mr. U. Venkata Ramana

Company Secretary

Mr. P. Shankar

Joint Venture Companies

1) Indian Additives Limited

2) National Aromatics and Petrochemicals Corporation Limited

Entity over which KMP exercise significant influence

1) CPCL Educational Trust

Mar 31, 2015

1. Rights, preferences and restrictions attached to shares Equity Shares: The company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting, except in case of interim dividend In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company in proportion to their shareholding.

2.Nature of Security and Terms of repayment for Secured Loans

Nature of Security

(i) Secured Redeemable Non Convertible Debentures (Series-II) - First Charge on specific Plant & Machinery alongwith the underlying land together with all the building and structures standing on the said land to the extent of Rs. 100000 Lakhs

Terms of Repayment

Principal repayable at the end of 5 years from 10.01.2014 being date of allotment. Interest payable annually on 10th Jan at the rate of 9.65% p.a.

Nature of Security

(ii) Secured Redeemable Non Convertible Debentures (Series-I) - First Charge on specific Plant & Machinery alongwith the underlying land together with all the building and structures standing on the said land to the extent of RS. 100000 Lakhs.

Terms of Repayment

Principal repayable at the end of 5 years or on the exercise of put/call option either in whole or in part at the end of 3 years from 18.02.2013 being date of allotment. Interest payable annually on 18th Feb at the rate of 8.85% p.a.

2. DEFERRED TAX LIABILITIES / (ASSETS) (NET)

During the current financial year , the company has recognized Deferred Tax Asset in respect of carry forward business loss and unabsorbed depreciation to the extent of Deferred Tax Liability of Rs. 70339.89 lakhs as per the accounts of previous year , which has a consequential impact on the profit for the current year. The said sum of v 70339.89 lakhs constitutes a prior period item and disclosed accordingly. This accounting treatment is based on the opinion received by the company from the Expert Advisory Committee of the Institute of Chartered Accountants of India in July 2014 and due to future taxable income arising on account of reversal of timing differences.

3. Contingent Liabilities:

a) Claims against the company not acknowledged as debts Rs. 38669.59 lakhs (2014: Rs. 30524.95 lakhs).

These mainly include:

i) Rs. 619.54 lakhs (2014: Rs. 344.19 lakhs) in respect of Central Excise.

ii) Rs. 27028.27 lakhs (2014: Rs. 20620.57 lakhs) in respect of Sales Tax.

iii) Rs. 7075.98 lakhs (2014: Rs. 6926.63 lakhs) in respect of Income Tax.

iv) Rs. 1713.94 lakhs (2014: Rs. 1628.03 lakhs) relating to projects.

b) Interest/Penalty, if any, unascertainable, on the above claims is not considered

The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company's financial position and results of operations.

c) Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 249455.02 lakhs (2014: Rs. 184959.97 lakhs).

4. Thirty four acres and forty nine cents of land has been taken on lease from a trust on a five-year renewable lease for the construction of Employees Township at Cauvery Basin Refinery.

5. Forty-one acres, twenty three and half acres and eleven acres and sixty two cents of land of the company are in the possession of IOT Infrastructure & Energy Services Limited, CPCL Educational Trust and Indian Oil Corporation Limited respectively under lease agreement.

6. (a) The cost of land includes provisional payments towards cost, compensation, and other accounts for which detailed accounts are yet to be received from the authorities concerned.

(b) The company is in possession of 135.93 acres of land (classified as Poramboke) for which value is to be determined and Assignment deed is yet to be received from Govt of Tamilnadu.

(c) Pending decision of the Government/Court, additional compensation, if any, payable to the landowners and the Government for certain lands acquired, is not considered

7. Valuation of Finished Products:

The overall gross margin percentage for all joint products is subtracted from the final net realisable value of each product to arrive at the total cost of each product which is taken as the basis for valuation of closing stock of finished products. (Refer Policy No 7.3 in Note - 1 - "Statement of Significant Accounting Policies").

8. The Company has no export obligation (2014: Nil) on account of concessional rate of customs duty availed under EPCG scheme on import of capital goods/Advance License scheme on import of crude oil.

9. The company operates in a single segment viz. downstream petroleum sector. As such reporting is done on a single segment basis.

8. No provision for Income Tax (Current Tax) has been made in view of loss for the current year.

10. Foreign currency exposures as on 31.03.2015 is Rs. 392932.66 Lakhs (2014: Rs. 703338.45 Lakhs). The company has entered into four (2014: Nil) derivative transactions during the year. There are no outstanding Forward contracts as on 31st March 2015 (2014: Nil).

11. Disclosure as required under Accounting Standard - 15 (Revised) on "Employee Benefits" is provided in Annexure - I to this Note.

12. In compliance with Accounting Standard - 18 on "Related Party Disclosures", the required information is given in Annexure - II to this Note.

b) Name of the Joint Venture National Aromatics and Petrochemicals Corporation Ltd

Proportion of ownership interest 50%

Country of Incorporation India

Aggregate amount of interest in Joint Venture is not given since the joint venture is not operational

13. During the year, the company has undertaken a review of all fixed assets in line with the requirements of AS- 28 on "Impairment of Assets". Based on such review, no provision for impairment is required to be recognised for the year.

14. Disclosure requirements under AS - 15 (Revised) as per Serial No: 10

Defined Contribution Schemes:

(a) Provident Fund

(i) During the year, the company has recognised Rs. 1574.59 Lakhs (2014: Rs. 1574.98 Lakhs) as Employer's contribution to Provident Fund in the Statement of Profit and Loss (included in 'Contribution to Provident & Other Funds' in Note 24)

(ii) In addition, during the year, the company has recognised Rs. 181.21 Lakhs (2014 : Rs. 104.71 Lakhs) as contribution to EPS-95 in the Statement of Profit and Loss (included in 'Contribution to Provident & Other Funds' in Note 24)

(b) Pension Scheme

During the year, the company has recognised Rs. 509.18 Lakhs (2014: Rs. 1443.42 Lakhs) towards Defined Contributory Employees' Pension Scheme in the Statement of Profit and Loss (included in 'Contribution to Provident & Other Funds' in Note 24)

15.Defined Benefits Plans: General Description Gratuity:

Each employee rendering continuous service of 5 years or more is entitled to receive gratuity amount equal to 15/26 of the monthly emoluments for every completed year of service subject to a maximum of Rs. 10 Lakhs at the time of separation from the company.

Leave Encashment:

Each employee is entitled to get 8 earned leaves for each completed quarter of service. Encashment of earned leaves is allowed during service leaving a minimum balance of 15 days subject to maximum accumulation upto 300 days. In addition, each employee is entitled to get 5 sick leaves at the end of every six months. The entire accumulation of sick leaves is permitted for encashment only at the time of retirement.

PRMS

Post Retirement Medical Scheme (PRMS) provides medical benefit to retired employees and eligible dependant family members.

Long Service Award:

On completion of specified period of service with the company and also at the time of retirement, employees are rewarded with Gold Coins of different weight based on the duration of service completed.

Ministry of Petroleum & Natural Gas ( MoP&NG) vide letter dated 25th February 2015 has advised Oil Marketing Companies to discontinue the Long Service Award Scheme. However, IOCL, the holding company has taken-up the issue with MoP&NG and pending final decision in the matter, company has continued with the actuarial valuation for FY 14-15 and provided for liability in the books of accounts.

Key Management Personnel (KMP)

Whole-time Directors

1) Mr Gautam Roy (from 09.10.2014)

2) Mr S. Venkataramana

3) Mr S. Krishna Prasad (from 09.01.2015)

4) Mr. U. Venkata Ramana (from 01.12.2014)

5) Mr A.S Basu (till 31.05.2014)

6) Mr T. S. Ramachandran (till 30.11.2014)

Company Secretary

Mr. P. Shankar

Joint Venture Companies

1) Indian Additives Limited

2) National Aromatics and Petrochemicals Corporation Limited

Entity over which KMP exercise significant influence

1) CPCL Educational Trust

Mar 31, 2014

NOTE 1

1. Contingent Liabilities:

a) Claims against the company not acknowledged as debts Rs.30524.95 lakhs (2013: Rs.29101.34 lakhs).

These mainly include:

i) Rs.344.19 lakhs (2013: Rs.572.31 lakhs) in respect of Central Excise.

ii) Rs.20620.57 lakhs (2013: Rs.21454.65 lakhs) in respect of Sales Tax.

iii) Rs.6926.63 lakhs (2013: Rs.4695.27 lakhs) in respect of Income Tax.

iv) Rs.1628.03 lakhs (2013: Rs.1342.70 lakhs) relating to projects.

b) Interest/Penalty, if any, unascertainable, on the above claims is not considered.

c) Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs.184959.97 lakhs (2013: Rs.38854.22 lakhs).

2. Thirty four acres and forty nine cents of land has been taken on lease from a trust on a five-year renewable lease for the construction of Employees Township at Cauvery Basin Refinery.

3. Forty-one acres, twenty three and half acres and eleven acres and sixty two cents of land of the company are in the possession of IOT Infrastructure & Energy Services Limited, CPCL Educational Trust and Indian Oil Corporation Limited respectively under lease agreement.

4. (a) The cost of land includes provisional payments towards cost, compensation, and other accounts for which detailed accounts are yet to be received from the authorities concerned.

(b) The company is in possession of 135.93 acres of land (classified as Poramboke) for which value is to be determined and Assignment deed is yet to be received from Govt. of Tamilnadu.

(c) Pending decision of the Government/Court, additional compensation, if any, payable to the landowners and the Government for certain lands acquired, is not considered.

5. The company, in the absence of notification by the Central Government specifying the applicable rate of cess under section 441A of the Companies Act, 1956 on turnover payable by the company, has not provided for cess towards formation of Rehabilitation and Revival Fund.

6. Valuation of Finished Products:

The overall gross margin percentage for all joint products is subtracted from the final net realisable value of each product to arrive at the total cost of each product which is taken as the basis for valuation of closing stock of finished products. (Refer Policy No 6.3 in Note Â 1 Â "Statement of Significant Accounting Policies").

7. The Company has no export obligation (2013: Rs.1153.65 Lakhs) on account of concessional rate of customs duty availed under EPCG scheme on import of capital goods/Advance License scheme on import of crude oil.

8. The company operates in a single segment viz. downstream petroleum sector. As such reporting is done on a single segment basis.

9. No provision for Income Tax (Current Tax) has been made in view of loss for the current year.

10. Foreign currency exposures as on 31.03.2014 is Rs.703338.45 Lakhs (2013: Rs.650903.20 Lakhs). The company has not entered into any derivative transaction. There are no outstanding Forward contracts as on 31st March 2014 (2013: Nil).

11. Disclosure as required under Accounting Standard Â 15 (Revised) on "Employee Benefits" is provided in Annexure Â I to this Note.

12. In compliance with Accounting Standard Â 18 on "Related Party Disclosures", the required information is given in Annexure Â II to this Note.

13. During the year, the company has undertaken a review of all fixed assets in line with the requirements of AS- 28 on "Impairment of Assets". Based on such review, no provision for impairment is required to be recognised for the year.

14. Previous year''s comparative figures have been regrouped and recast, wherever necessary, to the extent practicable, for uniformity in presentation.

Mar 31, 2013

1. Contingent Liabilities:

a) Claims against the company not acknowledged as debts Rs. 17103.90 lakhs (2011: Rs. 2971.77 lakhs).

These mainly include:

i) Rs. 447.83 lakhs (2011: Rs.201.72 lakhs) being the demands raised by Central Excise authorities.

ii) Rs. 8857.48 lakhs (2011: Rs. 1270.79 lakhs) in respect of Sales Tax demands.

iii) Rs. 6188.38 lakhs (2011: Rs. 229.45 lakhs) in respect of Income Tax demands.

iv) Rs. 886.88 lakhs (2011: Rs. 811.21 lakhs) relating to projects.

b) Interest/Penalty, if any, unascertainable, on the above claims is not considered

c) Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 62554.03 lakhs (2011: Rs. 74183.00 lakhs).

2. Thirty four acres and forty nine cents of land has been taken on lease from a trust on a five-year renewable lease for the construction of Employees Township at Cauvery Basin Refinery

3. Forty-one acres and twenty three and half acres of land of the company are in the possession of IOT Infrastructure & Energy Services Limited and CPCL Educational Trust respectively under lease agreement

4. (a) The cost of land includes provisional payments towards cost, compensation, and other accounts for which detailed accounts are yet to be received from the authorities concerned

(b) Pending completion of formalities, assignment deeds of some portion of the land are yet to be obtained

(c) Pending decision of the Government/Court, additional compensation, if any, payable to the landowners and the Government for certain lands acquired, is not considered

5. The company, in the absence of suitable notification by the Central Government specifying the applicable rate of cess under section 441A of the Companies Act, 1956 on turnover payable by the company, has not provided for cess towards formation of Rehabilitation and Revival Fund

6. Valuation of Finished Products:

The overall gross margin percentage for all joint products is subtracted from the final net realisable value of each product to arrive at the total cost of each product which is taken as the basis for valuation of closing stock of finished products. (Refer Policy No 7 (c) in Note - 1 - "Statement of Significant Accounting Policies").

7. The Company has an export obligation to the extent of Rs. 3904.22 Lakhs (2011: Rs. 19473.58 Lakhs) on account of concessional rate of customs duty availed under EPCG scheme on import of capital goods/Advance License scheme on import of crude oil

8. The company operates in a single segment viz. downstream petroleum sector. As such reporting is done on a single segment basis.

9. (a) No provision for Income Tax (Current Tax) has been made in view of loss for the year.

(b) Rs. 25350.80 lakhs credited in the Statement of Profit and Loss under ''Tax expenses - Pertaining to earlier years'' represents net write back of provisions relating to earlier years considered as no longer required

10. During the year the Company has exercised the option provided by Ministry of Corporate Affairs vide Notification dated 29.12.2011 of the Companies (Accounting Standards) (Second Amendment) Rules, 2011 to adjust the exchange differences on long term foreign currency loans relating to acquisition of fixed assets to the carrying cost of the assets and depreciate the same over the balance life of the assets which were hitherto adjusted in the Profit and Loss Account. Had the company followed the accounting policy adopted earlier, profits for the year would have been lower by Rs. 2140.20 Lakhs with a corresponding decrease in the value of fixed assets.

11. The company has not entered into any derivative transaction, other than for hedging purposes during the year. Fifteen Forward contracts entered into for hedging purposes by the company are outstanding as on 31st March 2012 towards repayment, mainly of Packing Credit Foreign Currency Loan amounting to Rs. 27793.62 Lakhs (USD 54.63 Million) (2011: Rs. 97555.38 Lakhs; USD 212.75 Million).

12. Foreign currency exposures that are not hedged (which mainly includes Packing credit foreign currency loans) as on 31.03.2012 Rs. 134551.71 Lakhs (2011: Rs. 64224.00 Lakhs).

13. Disclosure as required under Accounting Standard - 15 (Revised) on "Employee Benefits" is provided in Annexure - I to this schedule.

14. In compliance with Accounting Standard - 18 on "Related Party Disclosures", the required information is given in Annexure - II to this schedule.

15. Disclosure as required under Accounting Standard - 19 on "Leases" is as under:

Operating Leases:

The company has taken on operating lease, Product Tankages from IOC on a renewal basis. The lease rentals incurred for the current year amounting to Rs. 774.36 lakhs are included in Rent (2011 Rs. 569.46 lakhs).

The lease rent payable for the next financial year is estimated to be Rs. 810.42 Lakhs (2011: Rs. 800.42 Lakhs) and lease rent for the five-year period after the next year is estimated to be Rs. 4052.10 Lakhs (2011: Rs. 4002.10 Lakhs).

16. In compliance with Accounting Standard - 20 on "Earning Per Share", the elements considered for calculation of Earning Per Share (Basic and Diluted) are as under:

17. During the year, the company has undertaken a review of all fixed assets in line with the requirements of AS- 28 on "Impairment of Assets". Based on such review, no provision for impairment is required to be recognised for the year.

18. The Profit and Loss Account includes:

a) Expenditure on Public Relations and Publicity amounting to Rs. 149.06 lakhs (2011: Rs. 132.43 lakhs). The ratio of annual expenditure on Public Relations and Publicity to the annual turnover is 0.00003284:1 (2011: 0.00003473:1).

b) Research and Development expenses Rs. 408.30 lakhs (2011: Rs. 385.99 lakhs).

c) Entertainment Expenses Rs. 43.82 lakhs (2011: Rs. 25.47 lakhs).

19. Previous year''s comparative figures have been regrouped and recast, wherever necessary, to the extent practicable, for uniformity in presentation.

Mar 31, 2012

(i). As per the Formation Agreement entered into between the promoters, an offer is to be made to the Naftiran Intertrade Company Limited (NICO), an affiliate of National Iranian Oil Company (NIOC) in any issue of the Capital in proportion to the shares held by them at the time of such issue to enable them to maintain their shareholding at the existing percentage.

(1) Rights, preferences and restrictions attached to shares

Equity Shares: The company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company in proportion to their shareholding.

(i) Disclosure required under the provisions of Section 22 of Micro, Small and Medium Enterprises Development Act, 2006.

The company sought written confirmation from its suppliers to identify Micro, Small and Medium enterprises.

No principal amount or interest amount remains unpaid to such Micro and Small enterprises as on 31.03.2012 and no payments were made to such enterprises beyond the "appointed day" during the year. Also, the company has not paid any interest in terms of section 16 of the above mentioned act or otherwise.

This information has been determined to the extent, such parties could be identified on the basis of information made available to the company.

(ii) Represents due to Indian Oil Corporation Ltd., the holding company.

(i) In line with the scheme formulated by the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas, the company has received an aggregate discount of Rs. 337980.04 Lakhs (2011: Rs. 82439.51 Lakhs) from Oil and Natural Gas Corporation Limited on Crude Oil purchase and has passed on the same as discounts on products sold to Indian Oil Corporation Limited the holding company. Accordingly, Gross Sale of Products and Consumption of Raw Materials for the year are net of Rs. 337980.04 Lakhs. (2011: Rs. 82439.51 Lakhs).

Refer Note 30 - Finished Product - Quantity and Value Particulars, for productwise sales.

(i) Includes interest on Income Tax refunds Rs. 2904.96 Lakhs(2011: Rs. 2178.32 Lakhs)

(ii) Represents income from Non current Trade Investment - Indian Additives Limited - JV Company.

(iii) Includes income from Petroleum India International (Non current Trade Investments) Rs. 112.57 Lakhs (2011: Rs. 25.93 Lakhs)

(i) Disclosure in compliance with Accounting Standard-15 (Revised) on "Employee Benefits" is given in Note 28. (Annexure I)

(ii) Includes Rs. 1700 Lakhs towards estimated provision pending finalisation of wage revision for Non-Supervisory employees (2011: Rs. 983.17 Lakhs).

(iii) Includes Rs. 940 Lakhs (2011: Rs. 768 Lakhs) towards increased retirement benefits in respect of employees.

Note "2"

1. Contingent Liabilities:

a) Claims against the company not acknowledged as debts Rs. 17103.90 lakhs (2011: Rs. 2971.77 lakhs).

These mainly include:

i) Rs. 447.83 lakhs (2011: Rs.201.72 lakhs) being the demands raised by Central Excise authorities.

ii) Rs. 8857.48 lakhs (2011: Rs. 1270.79 lakhs) in respect of Sales Tax demands.

iii) Rs. 6188.38 lakhs (2011: Rs. 229.45 lakhs) in respect of Income Tax demands.

iv) Rs. 886.88 lakhs (2011: Rs. 811.21 lakhs) relating to projects.

b) Interest/Penalty, if any, unascertainable, on the above claims is not considered

c) Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 62554.03 lakhs (2011: Rs. 74183.00 lakhs).

2. Thirty four acres and forty nine cents of land has been taken on lease from a trust on a five-year renewable lease for the construction of Employees Township at Cauvery Basin Refinery.

3. Forty-one acres and twenty three and half acres of land of the company are in the possession of IOT Infrastructure & Energy Services Limited and CPCL Educational Trust respectively under lease agreement

4. (a) The cost of land includes provisional payments towards cost, compensation, and other accounts for which detailed accounts are yet to be received from the authorities concerned

(b) Pending completion of formalities, assignment deeds of some portion of the land are yet to be obtained

(c) Pending decision of the Government/Court, additional compensation, if any, payable to the landowners and the Government for certain lands acquired, is not considered

5. The company, in the absence of suitable notification by the Central Government specifying the applicable rate of cess under section 441A of the Companies Act, 1956 on turnover payable by the company, has not provided for cess towards formation of Rehabilitation and Revival Fund

6. Valuation of Finished Products:

The overall gross margin percentage for all joint products is subtracted from the final net realisable value of each product to arrive at the total cost of each product which is taken as the basis for valuation of closing stock of finished products. (Refer Policy No 7 (c) in Note - 1 - "Statement of Significant Accounting Policies").

7. The Company has an export obligation to the extent of Rs. 3904.22 Lakhs (2011: Rs. 19473.58 Lakhs) on account of concessional rate of customs duty availed under EPCG scheme on import of capital goods/Advance License scheme on import of crude oil

8. The company operates in a single segment viz. downstream petroleum sector. As such reporting is done on a single segment basis.

9. (a) No provision for Income Tax (Current Tax) has been made in view of loss for the year.

(b) Rs. 25350.80 lakhs credited in the Statement of Profit and Loss under 'Tax expenses - Pertaining to earlier years' represents net write back of provisions relating to earlier years considered as no longer required

10. During the year the Company has exercised the option provided by Ministry of Corporate Affairs vide Notification dated 29.12.2011 of the Companies (Accounting Standards) (Second Amendment) Rules, 2011 to adjust the exchange differences on long term foreign currency loans relating to acquisition of fixed assets to the carrying cost of the assets and depreciate the same over the balance life of the assets which were hitherto adjusted in the Profit and Loss Account. Had the company followed the accounting policy adopted earlier, profits for the year would have been lower by Rs. 2140.20 Lakhs with a corresponding decrease in the value of fixed assets.

11. The company has not entered into any derivative transaction, other than for hedging purposes during the year. Fifteen Forward contracts entered into for hedging purposes by the company are outstanding as on 31st March 2012 towards repayment, mainly of Packing Credit Foreign Currency Loan amounting to Rs. 27793.62 Lakhs (USD 54.63 Million) (2011: Rs. 97555.38 Lakhs; USD 212.75 Million).

12. Foreign currency exposures that are not hedged (which mainly includes Packing credit foreign currency loans) as on 31.03.2012 Rs. 134551.71 Lakhs (2011: Rs. 64224.00 Lakhs).

13. Disclosure as required under Accounting Standard - 15 (Revised) on "Employee Benefits" is provided in Annexure - I to this schedule.

14. In compliance with Accounting Standard - 18 on "Related Party Disclosures", the required information is given in Annexure - II to this schedule.

15. Disclosure as required under Accounting Standard - 19 on "Leases" is as under:

Operating Leases:

The company has taken on operating lease, Product Tankages from IOC on a renewal basis. The lease rentals incurred for the current year amounting to Rs. 774.36 lakhs are included in Rent (2011 Rs. 569.46 lakhs).

The lease rent payable for the next financial year is estimated to be Rs. 810.42 Lakhs (2011: Rs. 800.42 Lakhs) and lease rent for the five-year period after the next year is estimated to be Rs. 4052.10 Lakhs (2011: Rs. 4002.10 Lakhs).

3. During the year, the company has undertaken a review of all fixed assets in line with the requirements of AS- 28 on "Impairment of Assets". Based on such review, no provision for impairment is required to be recognised for the year.

4. The Profit and Loss Account includes:

a) Expenditure on Public Relations and Publicity amounting to Rs. 149.06 lakhs (2011: Rs. 132.43 lakhs). The ratio of annual expenditure on Public Relations and Publicity to the annual turnover is 0.00003284:1 (2011: 0.00003473:1).

b) Research and Development expenses Rs. 408.30 lakhs (2011: Rs. 385.99 lakhs).

c) Entertainment Expenses Rs. 43.82 lakhs (2011: Rs. 25.47 lakhs).

5. Previous year's comparative figures have been regrouped and recast, wherever necessary, to the extent practicable, for uniformity in presentation.

Mar 31, 2011

1. Contingent Liabilities:

a) Claims against the company not acknowledged as debts Rs. 2971.77 Lakhs (2010: Rs. 2969.46 Lakhs). These mainly include:

i) Rs. 201.72 Lakhs (2010: Rs. 330.36 Lakhs) being the demands raised by Central Excise authorities.

ii) Rs. 1270.79 Lakhs (2010: Rs. 1276.09 Lakhs) in respect of Sales Tax demands.

iii) Rs. 229.45 Lakhs (2010: Rs. 188.21 Lakhs) in respect of Income Tax demands.

iv) Rs. 811.21 Lakhs (2010: Rs. 769.56 Lakhs) relating to projects.

b) Interest/Penalty, if any, unascertainable, on the above claims is not considered.

c) Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 74183.00 Lakhs (2010: Rs. 117325.87 Lakhs).

2. Thirty four acres and forty nine cents of land has been taken on lease from a trust on a five-year renewable lease for the construction of Employees Township at Cauvery Basin Refinery.

3. Forty-one acres of land of the company is in the possession of IOT Infrastructure & Energy Services Limited under a lease agreement.

4. Change in Acounting policy of the company with regard to capital expenditure on assets, on which the ownership and control that does not vest with the company are charged to revenue in the year in which it is incurred (Policy No.2.4(c)). This has no impact on the profits for the year as no such expenditure has been incurred during the year.

5. (a) The cost of land includes provisional payments towards cost, compensation, and other accounts for which detailed accounts are yet to be received from the authorities concerned.

(b) Pending completion of formalities, assignment deeds of some portion of the land are yet to be obtained.

(c) Pending decision of the Government/Court, additional compensation, if any, payable to the landowners and the Government for certain lands acquired, is not considered.

6. The company, in the absence of suitable notification by the Central Government specifying the applicable rate of cess under section 441A of the Companies Act, 1956 on turnover payable by the company, has not provided for cess towards formation of Rehabilitation and Revival Fund.

7. Valuation of Finished Products:

The overall gross margin percentage for all joint products is subtracted from the final net realisable value of each product to arrive at the total cost of each product which is taken as the basis for valuation of closing stock of finished products. (Refer policy no 7 (c) in Schedule Ã Q Ã "Statement of Significant Accounting Policies").

8. In line with the scheme formulated by the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas, the company has received an aggregate discount of Rs. 82439.51 Lakhs (2010: Rs. 58738.21 Lakhs) from Oil and Natural Gas Corporation Limited on Crude Oil purchase and has passed on the same as discounts on products sold to Indian Oil Corporation Limited. Accordingly, Gross Sales and Consumption of Raw Materials for the year are net of Rs. 82439.51 Lakhs. (2010: Rs. 58738.21 Lakhs).

9. The Company has an export obligation to the extent of Rs.19473.58 Lakhs (2010: Rs.1715.11 Lakhs) on account of concessional rate of customs duty availed under EPCG scheme on import of capital goods/Advance License scheme on import of crude oil.

10. a) Payments to and provisions for employees includes Rs. 983.17 Lakhs for the current year for Non-Supervisory employees (2010: Rs.3066.83 Lakhs for the period 01.01.2009 to 31.03.2010 for Non-Supervisory employees) towards estimated provision pending finalisation of wage revision.

b) Additionally, a sum of Rs.768.00 Lakhs (2010: Rs.1700.05 Lakhs) is accounted during the year towards estimated provision in respect of increased retirement benefits in line with DPE guidelines.

11. The company operates in a single segment viz. downstream petroleum sector. As such reporting is done on a single segment basis.

12. The company has not entered into any derivative transaction, other than for hedging purposes during the year. 88 Forward contracts entered into for hedging purposes by the company and outstanding as on 31st March 2011 towards repayment of foreign currency loan is USD 212.75 Million amounting to Rs. 97555.38 Lakhs (2010: Rs. 84405.96 Lakhs; USD 187.99 Million)

13. Foreign currency exposures that are not hedged as on 31st March 2011: Rs.64224 Lakhs (2010: Rs. 75818.75 Lakhs).

14. Disclosure as required under Accounting Standard Ã 15 (revised) on "Employee Benefits" is provided in Annexure Ã I to this schedule.

15. In compliance with Accounting Standard Ã 18 on "Related Party Disclosures" the required information is given in Annexure Ã II to this schedule.

16. Disclosure as required under Accounting Standard Ã 19 on "Leases" is as under:

Operating Leases:

The company has taken on operating lease, Product Tankages from IOC on a renewal basis. The lease rentals incurred for the current year amounting to Rs. 569.46 Lakhs are included in Rent (2010: Rs.766.85 Lakhs).

The lease rent payable for the next financial year is estimated to be Rs. 800.42 Lakhs (2010: Rs.850.11 Lakhs) and lease rent for the five-year period after the next year is estimated to be Rs. 4002.10 Lakhs. (2010: Rs.4250.54 Lakhs)

17. In compliance with Accounting Standard Ã 22 on "Accounting for Taxes on Income" Deferred Tax Asset (-)/Liability ( ) for the financial period ended 31st March 2011 amounting to Rs. 2851.77 Lakhs (2010: Rs. 16195.25 Lakhs) has been made/provided.

18. Disclosure as required under Accounting Standard Ã 27 on "Financial Reporting of Interests in Joint Ventures" is as under:

a) Name of the Joint Venture Indian Additives Ltd.

Proportion of ownership interest 50%

Country of Incorporation India

b) Name of the Joint Venture National Aromatics and Petrochemicals

Corporation Ltd.

Proportion of ownership interest 50%

Country of Incorporation India

Aggregate amount of interests in Joint Venture is not given since the joint venture is not operational.

19. During the year, the company has undertaken a review of all fixed assets in line with the requirements of AS - 28 on "Impairment of Assets". Based on such review, no provision for impairment is required to be recognised for the year.

20. Disclosure required under the provisions of Section 22 of Micro, Small and Medium Enterprises Development Act, 2006.

The company sought written confirmation from its suppliers to identify micro, small and medium enterprises.

No principal amount or interest amount remains unpaid to such Micro and Small enterprises as on 31.03.2011 and no payments were made to such enterprises beyond the "appointed day" during the year. Also, the company has not paid any interest in terms of section 16 of the above-mentioned act or otherwise.

This information has been determined to the extent, such parties could be identified on the basis of information made available to the company.

21. The Profit and Loss Account includes:

a) Expenditure on Public Relations and Publicity amounting to Rs. 260.08 Lakhs (2010: Rs. 135.16 Lakhs). The ratio of annual expenditure on Public Relations and Publicity to the annual turnover is 0.00006808: 1 (2010: 0.00004616:1).

b) Research and Development expenses Rs. 385.99 Lakhs (2010: Rs. 388.12 Lakhs).

c) Entertainment Expenses Rs. 25.47 Lakhs (2010: Rs. 22.40 Lakhs).

22. Previous year's comparative figures have been regrouped and recast, wherever necessary, to the extent practicable, for uniformity in presentation.

Key Management Personnel Whole-time Directors

1) Shri K. Balachandran

2) Shri N.C.Sridharan

3) Shri S.Chandrasekaran

4) Shri S. Venkataramana (from 3rd October 2010)

Joint Venture Companies

1) Indian Additives Limited

2) National Aromatics and Petrochemicals Corporation Limited.

Mar 31, 2010

1. Contingent Liabilities:

a) Claims against the company not acknowledged as debts Rs. 2969.46 lakhs (2009: Rs. 34223.05 lakhs). These mainly include:

i) Rs. 330.36 lakhs (2009: Rs. 330.36 lakhs) being the demands raised by Central Excise authorities. ii) Rs. 1276.09 lakhs (2009: Rs. 32127.95 lakhs) in respect of Sales Tax demands. iii) Rs 188.21 lakhs (2009: Rs. 456.06 lakhs) in respect of Income Tax demands. iv) Rs. 769.56 lakhs (2009: Rs. 875.62 lakhs) relating to projects.

b) Interest/Penalty, if any, unascertainable, on the above claims is not considered.

c) Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 117325.87 lakhs (2009: Rs. 110445.78 lakhs).

2. Thirty four acres and forty nine cents of land has been taken on lease from a trust on a five-year renewable lease for the construction of Employees Township at Cauvery Basin Refinery.

3. Forty one acres of land of the company is in the possession of IOT Infrastructure & Energy Services Limited under a lease agreement.

4. (a) The cost of land includes provisional payments towards cost, compensation, and other accounts for which detailed accounts are yet to be received from the authorities concerned.

(b) Pending completion of formalities, assignment deeds of some portion of the land are yet to be obtained.

(c) Pending decision of the Government/Court, additional compensation, if any, payable to the land owners and the Government for certain lands acquired, is not considered.

5. The company, in the absence of suitable notification by the Central Government specifying the applicable rate of cess under section 441A of the Companies Act, 1956 on turnover payable by the company, has not provided for cess towards formation of Rehabilitation and Revival Fund.

6. Valuation of Finished Products:

The overall gross margin percentage for all joint products is subtracted from the final net realisable value of each product to arrive at the total cost of each product which is taken as the basis for valuation of closing stock of finished products. (Refer policy no 7 (c) in Schedule - Q - "Statement of Significant Accounting Policies").

7. In line with the scheme formulated by the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas, the company has received an aggregate discount of Rs. 58738.21 lakhs (2009: Rs. 130655.55) from Oil and Natural Gas Corporation Limited on Crude Oil purchase and has passed on the same as discounts on products sold to Indian Oil Corporation Limited. Accordingly, Gross Sales and Consumption of Raw Materials for the year are net of Rs. 58738.21 lakhs. (2009: Rs. 130655.55 lakhs).

8. Based on the assessment order received during the year, provision for Income Tax of Rs. 14555.26 Lakhs made in the earlier year, has been reversed in the current year.

9. a) Payments to and provisions for employees includes Rs. 3066.83 Lakhs towards estimated provision / adhoc relief paid in respect of pay revision for non-supervisory employees for the period 01.01.2009 to 31.03.2010. (2009: Rs. 5467.30 Lakhs in respect of pay revision for supervisory employees for the period 01.01.2007 to 31.03.2009).

b) Additionally, a sum of Rs.1700.05 Lakhs (2009: Rs.Nil) is accounted during the year towards estimated provision in respect of increased retirement benefits in line with DPE guidelines.

10. The company operates in a single segment viz. downstream petroleum sector. As such reporting is done on a single segment basis.

11. The company has not entered into any derivative transaction, other than for hedging purposes during the year. 36 Forward contracts entered into for hedging purposes by the company and outstanding as on 31st March 2010 towards repayment of foreign currency loan is USD 187.99 Million amounting to Rs. 84405.96 Lakhs (2009: NIL)

12. Foreign currency exposures that are not hedged as on 31st March 2010: -75818.75 Lakhs (2009: Rs. 152939.99 Lakhs).

13. The company has migrated to SAP during the year to align with the business processes of the holding company. The company has instituted a system audit to confirm the functionalities and controls.

14. Disclosure as required under Accounting Standard - 15 (revised) on "Employee Benefits" issued by the Institute of Chartered Accountants of India is provided in Annexure -1 to this schedule.

15. In compliance with Accounting Standard - 18 on "Related Party Disclosures" issued by the Institute of Chartered Accountants of India, the required information is given in Annexure - II to this schedule.

16. Disclosure as required under Accounting Standard - 19 on "Leases" issued by the Institute of Chartered Accountants of India is as under:

17. During the year, the company has undertaken a review of all fixed assets in line with the requirements of AS - 28 on "Impairment of Assets" issued by the Institute of Chartered Accountants of India. Based on such review, no provision for impairment is required to be recognised for the year.

18. Disclosure required under the provisions of Section 22 of Micro, Small and Medium Enterprises Development Act, 2006.

The company sought written confirmation from its suppliers to identify micro, small and medium enterprises.

No principal amount or interest amount remains unpaid to such Micro and Small enterprises as on 31.03.2010 and no payments were made to such enterprises beyond the "appointed day" during the year. Also, the company has not paid any interest in terms of section 16 of the above-mentioned act or otherwise.

This information has been determined to the extent, such parties could be identified on the basis of information made available to the company.

19. The Profit and Loss Account includes:

a) Expenditure on Public Relations and Publicity amounting to Rs. 135.16 lakhs (2009: Rs. 149.31 lakhs). The ratio of annual expenditure on Public Relations and Publicity to the annual turnover is 0.00004616: 1 (2009: 0.00004078:1).

b) Research and Development expenses Rs. 388.12 lakhs (2009: Rs. 330.29 lakhs).

c) Entertainment Expenses Rs. 22.40 lakhs (2009: Rs. 43.74 lakhs).

20. Previous years comparative figures have been regrouped and recast, wherever necessary, to the extent practicable, for uniformity in presentation.

Key Management Personnel Whole-time Directors

1) Shri K. Balachandran

2) Shri N.C.Sridharan

3) Shri S.Chandrasekaran

4) Shri K.K. Acharya (upto November 2009) Joint Venture Companies

1) Indian Additives Limited

2) National Aromatics and Petrochemicals Corporation Limited.

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