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Notes to Accounts of Oil India Ltd.

Mar 31, 2023

6.6 Numaligarh Refinery Limited vide Shareholders Resolution dated 19th September,2022 approved Bonus Share in the ratio of 1:1 of face value of '' 10 per share fully paid and on 30th November,2022 accordingly the Company has received 51,22,20,385 nos of Bonus share. Subsequent to the Bonus issue, only 12 are held by the Company in the name of nominee shareholders.

6.7 The Board of Directors of Oil India Cyprus Ltd. in its meeting held on 8th July, 2021 had accorded in principle approval for initiating the procedure for striking-off the Company and striked-off application have been filed with the Registrar of the Company, Republic of Cyprus and Official Receiver, Nicosia, Cyprus. The Company has been officially strike-off from the Registrar of the Company, Republic of Cyprus on 23rd September, 2022 and accordingly the investment in Oil India Cyprus Ltd has been written off during the year ended 31st March, 2023.

6.8 Oil India (USA), Inc. the wholly owned subsidiary of the Company held a stake in Niobrara shale oil and gas asset in USA. On 14th January 2022, Oil India (USA), Inc., closed the deal to divest its entire stake in Niobrara shale oil and gas asset in USA. Subsequent to the divestment, the subsidiary Company has repatriated US$ 35.45 million including divestment proceeds to the parent Company during the year 2022-23. The Board of the parent cCompany in its 536th Meeting held on 23rd September, 2022 approved winding up of Oil India (USA), Inc. After compliance of applicable US laws, the subsidiary company has been wound up on 2nd May,2023.

6.9 Oil India International BV, Netharlands, the wholly owned subsidiary of OIL has 50% stake in a JV Company WorldAce Investments Limited, Cyprus (the other 50% is owned by Petroneft Resources Plc., Ireland) which in turn owns 100% of the voting equity in Stimul-T LLC, a Russian registered legal entity, which owns and operates Licence 61 in the Tomsk region of the Russian Federation. Stimul-T, LLC has filed for bankruptcy in the Arbitration Court of Tomsk, Russia on 10th May, 2023. A liquidator will be appointed by the Court for the bankruptcy proceedings. Considering the recent development, the Company has carried out impairment testing of its investment in subsidiary company and recognised impairment loss of '' 5.99 crore during the year ended 31st March, 2023.

6.10 The Company is holding 16,086 nos (12,600 nos as on 31st March, 2022) fully paid 10% Cumulative Redeemable preference share of No par value in Beas Rovuma Energy Mozambique Ltd as on 31st March, 2023. 5120 ordinary equity shares and 15,416 preference shares of the Company in Beas Rovuma Energy Mozambique Limited (BREML) have been provided under custody of Area 1 shared security custodian (Standard Bank, S.A.) under project finance arrangement entered into by BREML.

6.11 The Company has been alloted 60500000 nos of equity share of the face value of '' 10 per share fully paid up by Assam Petro - Chemicals Limited, the Joint Venture of the Company, during the year ended 31st March, 2023 as right shares.

6.12 The Company has been alloted 1130000000 nos of equity share of the face value of '' 10 per share fully paid up by Indradhanush Gas Grid Limited, the Joint Venture of the Company, during the year ended 31st March, 2023 as right shares.

9.2 Advance against acquisition of Equity to NRL represents 1st Call money of '' 550.95 crore ('' 27.50 per share for 20,03,44,555 shares) paid by the Company against Right Issue Offer of NRL dated 23rd February,2023. Board of Directors of NRL has passed a resolution by circulation dated 9th May,2023 for allotment of partly paid-up equity shares against the right offer. The new equity shares so allotted shall rank pari passu with the existing equity shares of the Company and shall be entitled to dividend to the extent of the amount paid up per equity share.

9.3 10% Cummulative Redeemable Preference Shares to be received by the Company against the advance''s paid to Beas Rovuma Energy Mozambique Limited.

9.4 Advance against acquisition of Equity Shares to HPOIL Gas Private Limited represents payment of '' 15.50 Crore made against the Right issue of 1,55,00,000 Equity Shares of ''10 /- face value offered by HP OIL Gas Private Limited to the Company.

14.2 Trade receivables primarily comprise of government related entities. These government related entities have very strong capacity to meet their obligations. The Company allows credit period of 15-30 days to its customers for payment. Normally, payments are made by the customers on or before the due dates. The management does not anticipate any payment default from these customers other than those already provided for. Hence, as per the prevailing circumstances, management does not consider the increase in credit risk from the time of initial recognition of trade receivables and at the reporting date as significant.

14.3 The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information.

16.1 If the dividend has not been paid or claimed within 30 days from the date of its declaration, the Company is required to transfer the total amount of the dividend which remains unpaid or unclaimed, to a special account maintained by the Company in a scheduled bank as "Unpaid Dividend Account". The unclaimed dividend lying with the Company is required to be transferred to the Investor Education and Protection Fund (IEPF), administered by the Central Government after a period of seven years of its declaration.

16.2 Bank Balance with Repatriation restrictions represents an amount of FCFA 9,519,694 (USD equivalent 15,787.85 and INR equivalent '' 0.13 crore as on 31.03.2023) is freezed by CITI Bank, Gabon and ORABANK Gabon in the Bank Account of Block Shakthi Gabon Project, consequent to a direction of the Gabonese court in a legal case.

16.3 Deposit in Escrow Account represent amount deposited with State Bank of India, New Delhi for Kharsang Field which is related to dispute regarding calculation of share of profit petroleum including interest payable to Government of India as per Production Sharing Contract (PSC) and also to secure an extension of PSC, which was valid till 15th June 2020. Thereafter Ministry of Petroleum & Natural Gas vide various communications has issued permissions to continue petroleum operations in the Kharsang Field as interim measure of facilitation.

21.1 Terms/rights attached to equity shares:

The Company has only one class of equity shares having par value of ''10 per share. Each holder of equity shares is entitled to one vote per share and carry a right to dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company in proportion to the number of equity shares held.

22.1 Nature and purpose of reserves:

(a) Foreign Currency Monetary Item Translation Difference Account: Exchange difference on long-term foreign currency monetary items are accumulated in a Foreign Currency Monetary Item Difference Account and amortised over the balance period of such long term foreign currency monetary item in continuance of policy as permitted under D13AA of Ind AS 101.

(b) Debenture Redemption Reserve: Debenture Redemption Reserve is created out of the profits of the Company, and the amount credited to such account shall not be utilised by the Company except for the redemption of bonds.

(c) Capital Redemption Reserve: Capital Redemption Reserve is created out of the Securities Premium/General Reserve, a sum equal to nominal value of the fully paid up own equity shares purchased by the Company during the period. The amount credited to such account may be applied in paying up unissued shares of the Company to be issued to members of the Company as fully paid bonus shares.

(d) General Reserve: The General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. General Reserve is free reserve of the Company and is used for the purposes like issuing bonus shares, buy back of shares etc as per the approval of Board of Directors.

(e) Retained Earnings: The retained earnings comprises of Profit / (loss) transferred from statement of profit and loss after payment of interim and final dividend if any. It also includes remeasurement of net defined benefit plan as per actuarial valuations.

22.2 Other Comprehensive Income: It includes the cumulative gains/losses arising on measurement of equity instruments designated at fair value through Other Comprehensive Income. On disposal of such equity instruments the net amount shall be reclassified to retained earnings.

22.3 The amount that can be distributed by the Company as dividends to its equity shareholders is determined considering the requirements of the Companies Act,2013.

On 24th September, 2022 the final dividend of '' 5 per share (50%) for FY-2021-22 was paid to equity shareholders.

On November 10, 2022 and on February 10, 2023, the Company had declared interim dividend of '' 4.50 per share (45%) and '' 10.00 per share (100%) respectively, which has since been paid.

In respect of the year ended March 31, 2023, the Board of Directors has proposed a final dividend of '' 5.50 per share (55%) be paid on fully paid-up equity shares. This final dividend shall be subject to approval by shareholders at the ensuing Annual General Meeting and has not been included as a liability in these financial statements. The total estimated equity dividend to be paid is '' 596.42 cr.

32.1 As per the directives of MOP&NG, Crude Oil price calculation is based on the monthly average price of benchmarked International Basket of Crude Oil which is further adjusted for quality differential.

32.2 Natural Gas price is as notified by MOP&NG and applicable to operating areas of the Company. Subsidy extended to the eligible customers in North East India is reimbursed by Government of India and shown as Other Operating Revenue.

32.3 On application of Ind AS 115 - Revenue from contracts with customers, the sale of crude oil includes transportation of own crude oil to customers upto the delivery point which coincides with the transfer of risk & rewards and transfer of custody. Income from pipeline transportation includes '' 81.84 crore (previous year '' 75.18 crore) for transportation of own crude oil.

37.1 Pursuant to directives from Government of India, the Company has raised overseas borrowings for acquiring 4% participating interest in Rovuma 1 offshore block in Mozambique. In the opinion of the Management, there is no explicit restriction by Government of India with regard to servicing of such overseas borrowings from domestic resources of the Company. Interest servicing of '' 542.76 crore (previous year '' 437.43 crore) on such overseas borrowings have been met from domestic resources. The Company has informed MoP&NG that servicing of interest on the overseas borrowings raised for financing of above transaction is being done from domestic resources.

41.1.1 Capital Management

The Company manages its capital to ensure that Company will be able to continue as going concern while maximizing the return to stakeholders through the optimization of the capital structure.

The capital structure of the Company consists of total equity and debt, (Refer note 21,22, 23 and 28). The Company is not subject to any externally imposed capital requirements except the guidelines issued by Government of India.

The Company''s management reviews the capital structure on a regular basis. As part of this review, the management considers the cost of capital and the risks associated with each class of capital.The Company aims to maintain gearing ratio target around 45% at Group level. The gearing ratio of the Company is provided below.

41.3 Financial Risk Management

41.3.1 Objective

The Company monitors and manages the financial risks relating to the operations of the Company by analysing exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk.

41.3.2 Commodity Risk

Crude oil and Natural gas price of the Company are linked to international prices of crude oil/natural gas. In case of any upward or downward movement in the international prices of crude oil/natural gas, the revenue of the Company get affected correspondingly. Therefore, the Company is exposed to commodity price risk.

41.3.3 Market Risk

The Company activities exposes it primarily to the financial risks of changes in foreign currency exchange rates, interest rate risk , market exposures that are measured using sensitivity analysis.

41.4 Foreign Currency Risk Management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise.

The carrying amounts of the Company''s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

The price of crude oil and natural gas produced and sold by the Company are linked to US Dollars, though billed and received in INR. Hence any movement in the USD against INR has direct impact on the future cash flows of the Company on account of sale of these products.

41.4.1 Foreign Currency Sensitivity Analysis

The Company is mainly exposed to the currency of United States of America (USD).

The following table details the Company''s sensitivity to a 5% increase and decrease in the INR against USD. The sensitivity analysis includes only outstanding foreign currency denominated monetary items as at period end and adjusts their translation at the period end for a 5% change in foreign currency rates.

41.4.2 Forward foreign exchange contracts

There is no forward foreign exchange contract outstanding as on balance sheet date.

41.5 Interest rate risk management

The Company is exposed to interest rate risk because the Company borrows funds at both fixed and floating interest rates and make investment in mutual funds. Periodical interest rate on floating interest loan or receivable on mutual fund investment are linked to market rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings. The Company policy allows to use forward interest rate agreements (FRA''s) or interest rate swap as per the rquirements

The Company''s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management Refer note 43.8.

41.5.1 Interest Rate Sensitivity Analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. The analysis is prepared based on the floating interest rate assets and liabilities, assuming that the amount outstanding at the end of the reporting period was outstanding for the whole year.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company''s: Loan Given

• Profit and Equity for the year ended March 31, 2023 would increase / decrease by '' 1.80 crore (for the year ended March 31, 2022: increase / decrease by '' 1.66 crore).

Loan Taken

• Profit and Equity for the year ended March 31, 2023 would decrease/increase by '' 9.44 crore (for the year ended March 31, 2022 : decrease/increase by '' 8.15 crore).

41.6 Price risk

The Company is exposed to equity price risks arising from equity investments in Indian Oil Corporation Limited. Exposure in mutual funds

The Company also manages surplus fund through investments in debt mutual fund plans regulated by Securities Exchange Board of India (SEBI). The NAV declared by Asset Management Companies(AMC) has generally remained constant on the mutual funds plan taken by the Company. However, if the NAV of the fund is increased/decreased by 5%, the sensitivity analysis has been mentioned below:

• Profit and Equity for the year ended March 31, 2023 would increase/decrease by '' 7.42 crore (for the year ended March 31, 2022: decrease/increase by '' 12.91 crore).

41.6.1 Equity Price Sensitivity Analysis

The sensitivity analysis below have been determined based on the exposure to price risks at the end of the reporting period.

If equity prices had been 5% higher/lower:

• Other comprehensive income and Equity for the year ended March 31, 2023 would increase/decrease by '' 255.34 crore (for the year ended March 31, 2022 would increase/decrease by '' 259.92 crore.).

41.7 Credit Risk Management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company regularly monitors its counterparty limits by reviewing the outstanding balance and ageing of the same.

The Company has a credit policy that is designed to ensure that consistent processes are in place to measure and control credit risk. Credit risk is considered as part of the risk-reward balance of doing business. On entering into any business contract the extent to which the arrangement exposes the Company to credit risk is considered.

41.8 Liquidity Risk Management

Liquidity risk is the risk that suitable sources of funding for the Company''s business activities may not be available. The Company manages liquidity risk by monitoring its forecast and actual cash flows, maintaining adequate reserves

42.1.2 Defined Benefit Plans

The various Benefit Plans which are in operation in the Company are Oil India Gratuity Fund (OIGF), Oil India Employees'' Pension Fund (OIEPF), Oil India Pension Fund (OIPF), Leave Encashment Fund and Post-Retirement Medical Benefit. The present value of the obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation.

The amount recognized in the Balance Sheet as the present value of the defined benefit obligation is net of the fair value of plan assets at the Balance Sheet date.

In respect of the plans in India, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at March 31, 2023 by a member firm of the Institute of Actuaries of India. The present value of the defined benefit obligation and the related current service cost and past service cost was measured using the projected unit credit method.

42.1.5 Provision of Oil India Employees'' Pension Fund (OIEPF):

The Company is maintaining an irrevocable Trust Fund named as "Oil India Employees'' Pension Fund" (OIEPF) for providing pensionary benefit to its employees on their retirement, permanent disablement and on their death to their beneficiaries which is in line with Employees'' Pension Scheme, 1995.

The Board of Directors in its 501st meeting held on 23rd April, 2019 accorded approval to give opportunity annually to the employees, including retired employees, to exercise their option to contribute on the basis of Actual Salary.

In view above, opportunity for exercising the change of contribution option was given to active employees, including retired employees during the financial year 2022-23.

The actuarial valuation for active employees as on 31st March, 2023 was carried out as per Ind AS 19 to quantify the net deficit to be borne by the Company. Based on the actuarial valuation '' 164.18 crore (previous year '' 164.44 crore) has been recognized in the Statement of Profit and Loss and '' 81.98 crore (previous year '' 260.53 crore) has been routed through Other Comprehensive Income during the year ended 31st March, 2023. The liability of the Company towards the Trust Fund is '' 810.27 crore as on 31st March, 2023 (previous year '' 1,147.12 crore) and the same is disclosed under Other Current Liabilities in the financial statements.

Based on the Hon''ble Supreme Court judgement dated 04.11.2022 in SLP (C) No. 8658-8659 of 2019, last opportunity for exercising the change of contribution option is given to active employees, including retired employees until 26th June, 2023. The actual number of applications received from active members till 31st March, 2023 have been considered in Actuarial Valuation. The actual number of remaining active employees, including retired employees, who may opt, for change of contribution option on actual salary basis in lieu of minimum salary basis cannot be forecasted with precision. The effect for same will be recognized in the financial statement for FY 2023-24.

42.1.6 Oil India Social Security Scheme Fund

The Board of Directors of the Company in its 535th meeting held on 10th August 2022 approved creation of a trust fund named as "Oil India Social Security Scheme Fund" effective from 01.04.2022 to provide lumpsum benefits to the dependents of deceased employee of the Company who dies during service period. As approved, both the Company and employees will contribute fixed monthly contribution to the fund and in addition, the Company will contribute '' 4.29 crore annually as base contribution.

The Company contributed immediately, on formation of the Trust Fund, an amount of ''15 crore as Seed Capital to maintain the initial solvency and liquidity. The Seed Capital will be recovered by the Company in five equal annual instalments.

Further, if in any year the cash required for meeting the liabilities of the Trust Fund is less than the value of the assets available, the shortfall shall be made good by the Company by making additional contribution equivalent to the amount of deficit.

1. Revenue mentioned above, represents revenue from external customers. No revenue is generated from transactions with other operating segments of the same entity.

2. Revenue and expenses directly identifiable to the segments have been allocated to the relative primary reportable segments.

3. Segment revenue and expenses which are not directly identifiable to the primary reportable segments have been disclosed under others which primarily include business development services.

4. Assets and liabilities which are directly identifiable to the segments have been allocated to relative segments.

5. Assets and liabilities which are not directly identifiable to the segments have been disclosed under unallocated.

6. All assets are allocated to reportable segments other than investments in subsidiaries, associates and joint ventures, other investments, loans and current and deferred tax assets.

7. There are no reportable geographical segments.

9. Information about major customers:

The Company''s significant revenue comes from sales to Public Sector Undertakings (PSUs). The total sales to such PSUs during the year ended 31st March 2023 amounted to '' 22,312.24 crore (previous year '' 14,252.31 crore). Sales to such PSUs during the year ended contributed around 95.88% of the total sales (previous year 98.09%). The Company has lodged '' 888.60 crore (previous year '' 253.00 crore) to Ministry of Petroleum & Natural Gas against claim recovery of Natural Gas during the year ended 31st March 2023. The contribution of claim recovery of Natural Gas towards sales revenue during the year ended 31st March 2023 is 3.82% (previous year 1.74%). No other single customer contributed 10% or more to the Company''s revenue for the year ended 31st March 2023.

42.3 Information as per Indian Accounting Standard (Ind AS) 23 "Borrowing Costs"

Finance cost on lease liability capitalized to wells during the year ended 31st March 2023 is '' 6.72 crore (previous year '' 8.63 crore).

*The Board of Directors of Oil India Cyprus Ltd in its meeting held on 8th July, 2021 accorded in principle approval for initiating the process for striking-off the Company and accordingly application was filed with the Registrar of Companies, Nicosia, Republic of Cyprus. On 23rd September, 2022, the Company has been struck off from the Register under the Companies Law of Republic of Cyprus.

**On 14th January 2022, Oil India (USA) Inc., the wholly owned subsidiary of the Company closed the deal to divest its entire stake in Niobrara shale oil and gas asset in USA. Subsequent to the divestment, OIL Board, in its 536th Meeting held on 23rd September, 2022 approved winding up of Oil India (USA) Inc. Along with the divestment proceeds, the US Corporation repatriated its available funds to the parent Company. After compliance of applicable US laws, Oil India (USA) Inc. has been wound up on 2nd May,2023.

***Oil India International BV, Netherlands, the wholly owned subsidiary of OIL has 50% stake in a JV Company WorldAce Investments Limited, Cyprus (the other 50% is owned by Petroneft Resources Plc., Ireland) which in turn owns 100% of the voting equity in Stimul-T LLC, a Russian registered legal entity, which owns and operates Licence 61 in the Tomsk region of the Russian Federation. Stimul-T LLC has filed for bankruptcy in the Arbitration Court of Tomsk, Russia on 10th May, 2023. A liquidator will be appointed by the Court for the bankruptcy proceedings.

****The Company through its subsidiary Oil India International Pte Limited, registered in Singapore, has invested in oil blocks in Russia through Joint Ventures registered in Singapore. The Russian oil block entities have declared dividends which have been received in bank accounts in Russia of Singapore Joint Ventures. However, on account of restrictions imposed by the Central Bank of Russia during the reporting period (for now valid till 30th September 2023), the funds cannot be repatriated to Singapore till said restriction is in force.

On application of Ind AS 115 - ''Revenue from Contracts with Customers'', sale of crude oil include transportation of own crude oil upto the delivery point which generally coincides with the transfer of risk and rewards and transfer of custody. Income from pipeline transportation includes '' 81.84 crore (previous year '' 75.18 crore) for transportation of own crude.

42.8 Information as per Indian Accounting Standard (Ind AS) 116 "Leases"

The Company has adopted Ind AS 116 "Leases" with effect from 1st April, 2019. The Company has elected to apply modified prospective transition approach to measure the right-to-use asset at an amount equal to the lease liability and initial estimate of decommissioning obligation at the date of transition.

The Company has applied Ind AS 116 to hiring contracts of vehicles, rigs, cranes, crawlers, compressors, buildings, etc. to evaluate whether these contracts contains lease components. Based on evaluation of the terms and conditions, the Company has evaluated the lease components of such contracts falling under the purview of Ind AS 116. The lease contracts, with limited exceptions, are recognised in the financial statements by way of right-of-use assets corresponding lease liabilities and initial estimate of decommissioning obligation. The lease liabilities were measured at the present value of the remaining lease payment and discounted using Government of India Bond rate.

The Company had also elected to apply the following practical expedients available under Ind AS 116:

a) Short term leases / Low-value assets: The Company has elected short term leases and low value assets leases for recognition exemption in terms of Ind AS 116. The Company recognises the lease rental payment associated with short term leases and low value assets as expense in the Statement of Profit & Loss.

b) Discount rate: The Company has applied Government of India Bond rate as discounting factor to each lease of similar assets in similar economic environment with a similar end rate. The Government of India Bond rate has been bucketed into 0-3 years, 3-5 years, 5-10 years and above 10 years to different lease contract falling in those periods. The Company has applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.

The contracts such as vehicle hiring, drilling rigs hiring, bundle service contracts, etc. involve a number of additional services and components including personnel cost, maintenance, drilling related activities, consumables and other items. In most of such contacts, the additional services/non-lease components constitute significant portion of the overall contract value. Where the additional services/non-lease components are not separately priced, the consideration paid has been allocated based on the relative stand-alone prices of the lease and non-lease components.

The following effects have been given in the financial statement for the Financial year ended 31st March, 2023:

42.15 Physical verification of Property, Plant and Equipment (PPE):

Physical verification of the property, plant and equipment is carried out by the Company in phased manner over the period of 3 years. The current block started from 2021-22. Physical verification of PPE carried out till 31st March, 2023 covers 96.84% of PPE in terms of value. A provision of '' 12.17 crore has been made in the accounts towards physical verification of PPE during the period ended 31st March, 2023.

42.16 Service Tax and GST on Royalty payment:

1. a. Service Tax demand was raised on the Company for the period March''2016 to June'' 2017 seeking to levy Service Tax on Royalty paid on Crude Oil & Natural Gas under the Oil Fields (Regulation & Development) Act, 1948 for the states of Assam, Arunachal Pradesh and Rajasthan. The Company has challenged the demand on various grounds by filing writ petitions before different High Courts. However, pending adjudication of the Writs, the Company has deposited under protest the entire Service Tax demand of '' 257.13 crore.

b. Goods and Services Tax (GST) was implemented w.e.f. 01st July, 2017 and as per the FAQs on Government Services issued by CBIC, GST is payable on Royalty paid for assignment of right to use natural resources. However, based on a legal opinion obtained by the Company Service tax/GST is not payable on Royalty paid under the Oil Fields (Regulation & Development) Act, 1948. The Company has accordingly filed writ petitions in different High Courts challenging such levy. Further, the Hon''ble Gauhati High Court, vide its interim order dated 2nd November, 2021 has granted stay on the GST on royalty payments made by the Company in the state of Assam until further orders.

The total GST amount deposited under protest till 31st March, 2023 is '' 1,232.23 crore. Further out of the above-mentioned amount the Company has received refund of '' 24.41 crore in the State of Assam. The estimated amount (including interest and penalty) of '' 259.67 crore for Service Tax and '' 2010.09 crore for GST (including '' 121.89 crore and '' 533.38 crore for quarter and year ended 31st March, 2023) have been considered as Contingent Liability as on 31st March, 2023, being disputed levies.

2. The Company has challenged the levy of Service Tax/GST on Royalty paid under the Oil Fields (Regulation & Development) Act, 1948 on various grounds before the Jodhpur Bench of Hon''ble Rajasthan High Court and the Hon''ble Gauhati High Court. Considering the expert opinion and in the light of various judicial pronouncements, pending adjudication of the matter, the service tax /GST paid under protest has been claimed as an allowable deduction under the Income Tax Act, 1961.

42.17 Government Grants

Revenue Grants

Stipend to apprentices under NATS scheme

As per Ministry of HRD, 50% of the cost of stipend for apprentices paid under National Apprenticeship Training Scheme (NATS) will be reimbursed by Government of India subject to prescribed threshold limit. During the year the Company has received reimbursement of stipend amounting to '' 1.89 crore (previous year '' 2.53 crore) paid to apprentices appointed under NATS.

Generation-based Incentive

Company is getting incentive from Department of Renewable Energy, GOI for wind power generation of Electricity at the rate of 50 paise per unit of power generated. The Company has received grant of '' 2.00 crore during the current year (previous year '' 2.92 crore).

42.20 Others:

42.20.1 Disclosure for COVID - 19

The Company has assessed the potential impact of Covid-19 pandemic on its existing operations. The total revenue of the Company is mainly from sale of crude oil and natural gas which constitute 95% of the total revenue from operations. Around 25% of domestic consumption of crude oil in the Country is from domestic source and any fall in demand of petroleum products is unlikely to adversely affect the domestic crude oil production.

Majority of the Natural Gas produced currently is supplied by the Company to fertilizers and thermal power plants and no significant impact on demand has been witnessed due to Covid-19 pandemic.

The Company does not anticipate any major challenge in continuing its operations and meeting financial obligations. Hence, no impact is expected on Company''s ability to continue as a going concern and meeting its obligations.

Due to Covid-19, there is no effect on useful life / residual life of Property, Plant and Equipment, Trade Receivable, Inventories and Lease Arrangements.

Further, the management has tested Property, Plant and Equipment including Oil & Gas assets for impairment and there is no additional loss on impairment due to the pandemic.

42.20.2 Disclosure on Expiry of Power Purchase Agreement (PPA)

The Company entered into Power Purchase Agreement (PPA) with Jodhpur Vidyut Vitaran Nigam Limited (JdVVNL) for supply of electricity generated from solar power plants validity of which expired on 31.03.2019. The Company vide letter no R/TS/RE/2019-80 dated 26.03.2019, submitted its request for extension of validity of the PPAs of both the Solar Power Plants for the remaining useful life to Rajasthan Urja Vikas Nigam Limited (RUVNL), under the Renewable Energy Certificate and Renewable Purchase Obligation Compliance Framework which is yet to be finalized.

In view of inordinate delay in response from JdVVNL in execution of the agreement, the Company has filed a writ petition with Hon''ble Rajasthan High Court, Jaipur Bench for finalization of Power Purchase Agreement. During the hearing held on 05.11.2019, Hon''ble Rajasthan High Court, Jaipur Bench ordered that the pending disposal of the writ petition, the joint meter reading reports shall be signed, without prejudice to the rights of the either party.

The sale of renewable energy as disclosed in Note 32 of the financial statement includes an amount of '' 7.31 crore (previous year '' 7.19 crore) in respect of sale of renewable power from solar power plants. The revenue has been recognised as per the rate prescribed by the Hon''ble Rajasthan Electricity Regulatory Commission (RERC) pending renewal of the Power Purchase Agreement (PPA) with JdVVNL. Any adjustment arising on finalisation of the PPA will be accounted in the year of incidence. As per the estimates of the management, the adjustments to the final price will not be material upon execution of PPA.

42.20.3 Disclosure on Overseas Investments

a. Provision for / reversal of diminution in value of certain Overseas Investments through impairment test:

The Company during the year has assessed the impact of impairment of its overseas investments and has recognised impairment in equity investment of '' 7.32 crore for Oil India International B.V. and '' 0.05 crore for Suntera Nigeria 205 Ltd. and '' 154.78 crore towards loan to Suntera Nigeria 205 Ltd., Nigeria.

b. Disclosure on Debt Service Undertaking of Mozambique Area 1 Project

Mozambique Area 1 project, wherein OIL has a participating interest (PI) of 4%, has secured debt commitment of US$15.40 Billion under Export Credit Agencies (ECA) Direct Loans, ECA Covered Facilities, Commercial Bank Facilities and a Loan Facility from African Development Bank. It is one of the condition precedents under project finance arrangement to provide Debt Service Undertaking (DSU) by each of the sponsors of the project. OIL as a DSU provider undertakes to pay its portion of obligation which is equal to pro-rata share of aggregate amount of advances at a given point in time based on its PI in the project. In case of OIL, the maximum amount that may be claimed by the Senior creditors has been capped at US$ 768 Million. As on 31st March 2023, a debt of US$ 287.30 Million (date of drawal US$ 199.30 Million 26th March, 2021 and USD 88 Million on 1st April 2021) has been drawn from the lenders at project level. OIL''s share of liability under the DSU for its 4% share is US$ 11.49 Million.

42.20.4 Balance Confirmation

The Company has a system of obtaining periodic confirmation of balances from banks and other parties. Further, some balances of Trade and other receivables, Trade and other payables and Loans are subject to confirmation/ reconciliation. Adjustments, if any, will be accounted for on confirmation/reconciliation of the same, which will not have a material impact.

42.20.5 (a) Disclosure on COSA

Crude oil produced by the Company is sold to state owned companies. The price of such crude oil is agreed upon between the buyer and seller through Crude Off-take and Sale Agreement (COSA) based on directives of the Ministry of Petroleum & Natural Gas (MoP&NG)dated May 1, 2009. COSA for the crude oil produced in state of Assam and Arunachal

Pradesh is in place with Indian Oil Corporation Limited (IOCL) and Numaligarh Refinery Limited (NRL). However, the Company is in process of executing the COSA with IOCL for crude oil produced in Rajasthan Fields. Crude oil price for heavy crude in Rajasthan fields delivered to IOCL is determined and billed provisionally, based on 70% of the monthly average of the quoted price of brent crude as mutually agreed upon. Change in price of heavy crude oil, if any, arising out of the signing of COSA with IOCL will be adjusted in the year of incidence. As per the estimates of the management, the adjustments to the final price will not be material upon execution of COSA. (Refer Note 32 for revenue from sale of crude oil).

42.20.5 (b) Arrear crude oil transportation revenue and tariff revision

The Company is engaged in the business of transportation of imported crude oil of Indian Oil Corporation Limited (IOCL) through its crude oil trunk pipeline from Barauni, Bihar to IOCL''s refineries at Bongaigaon and Guwahati.

During the year, tariff for the aforesaid transportation segment has been revised from FY 2017-18, as mutually agreed upon by both the parties and formalisation of same through the execution of an Agreement is expected shortly.

The Company, as per significant accounting policy [refer Note no 1.3.1], recognised the arrears of transportation income of '' 156.97 crore for the period FY 2017-18 to FY 2021-22 during the year as Income from Pipeline Transportation (Crude Oil). (refer Note no.32 of the Standalone Financial Statements).

42.20.6 OIDB Loan Assistance to M/s IGGL

In Pursuance of the approval granted by Oil Industry Development Board (OID Board) in its 103rd meeting held on 16.08.2021 for OIDB loan assistance of '' 2,594 Crore (Rupees Two Thousand Five Hundred Ninety Four Crore) to M/s Indradhanush Gas Grid Limited (IGGL), a Company promoted by GAIL (India) Ltd., Indian Oil Corporation Ltd., Oil & Natural Gas Corporation Ltd., Oil India Ltd. and Numaligarh Refinery Ltd. with a share of 20% each, Oil India Limited , being one of the promoters, have provided an unconditional and unequivocal guarantee to pay an amount of '' 518.80 crore to OIDB in the event of M/s Indradhanush Gas Grid Limited (IGGL), the borrower, being unable to fulfil its obligation for repayment of loan amounting to '' 2,594 crore & interest accrued thereon on the due dates and other monies payables by the said borrower to OIDB in accordance with terms and conditions of the Loan agreement executed between OIDB and IGGL. The Corporate Guarantee will remain valid and unrevoked till the loan & interest is fully repaid by M/s IGGL to OIDB. As on 31st March 2023 M/s IGGL has withdrawn two installments of Loan against the Loan Facility from OIDB as follows.

1. 1st installment drawn on 22.07.2022 is '' 200 crore.

2. 2nd installment drawn on 02.09.2022 is '' 100 crore.

M/s IGGL, on 15.11.2022 has repaid back the 1st loan of '' 200 crore drawn on 22.07.2022.

42.20.7 Blowout of well Baghjan #5

On 27th May, 2020 a blowout occurred in a producing well (Baghjan #5) of Baghjan Oilfield in Tinsukia district, Assam, while carrying out workover operations and well subsequently caught fire. The fire was finally put out on 15th November, 2020 and the well was permanently capped and abandoned on 3rd December, 2020. The total losses/damages for the blowout of '' 449.03 crore has been shown as Exceptional Item in the Statement of Profit and Loss for the year ended 31st March, 2021.

National Green Tribunal (NGT), Principle Bench, New Delhi through its order dated 19th February 2021 constituted a ten-member Committee headed by the Chief Secretary, Assam to look into the probable damage caused by the blowout to the environment and restoration measures, including measures for restoration of Dibru-Saikhowa National Park (DSBR) and the Maguri - Motapung Wetland (MMW). It also constituted two other committees to fix responsibility for the failure as well as non-compliance of statutory procedures.

An appeal was filed before the Hon''ble Supreme Court challenging the order of NGT regarding formation of the committees. Hon''ble Supreme Court vide order dated 2nd September 2021 re-constituted the Committee with five members for "Assessment of the damage and preparation of restoration plan of Dibru-Saikhowa National Park and

Maguri-Motapung Wetland". The said Committee proposed a cost of '' 1196 crore in its final report (which includes '' 625 crore towards livelihood and socio-economic aspect of victims) for redressal of damage and putting in place systems and institutional mechanisms.

The Hon''ble Supreme Court stated in its order dated 23rd January, 2023 that the "NGT shall hear such objections as the parties in the proceedings have, before issuing necessary directions on the aspects including restoration of the environment, reparation of environmental damage and compensation".

The NGT in its order dated 10th March 2023 stated that NGT is unable to accept in entirety of the SC expert committee''s report with respect to recommendations and assessment of cost of restoration measures. Restoration measures to be determined by NGT Committee on further studies, site visits and interaction with stake holders, including OIL. Assessment of expenditure of '' 625 crore towards livelihood and socio-economic aspect proposed is against the view taken by NGT vide order dated 10th February 2021, which recorded that the said issue shall be taken as concluded in view of steps taken by OIL.

As against the assessed cost of '' 571 crore for restoration of the accident site, the DSBR and MMW, the tribunal directed the Company to initially set apart an amount of '' 200 crore in a separate account to be spent as per recommendation of the Committee.

The directions to the Company by NGT vide the above order, has been restricted and broadly limited only to incur expenses for the restoration work which is to be carried out in the areas on a need basis as per assessment to be done by the NGT Committee, for which availability of an amount of '' 200 crore has been arranged and shall be facilitated as and when required and informed to the Pollution Control Board, Assam. Accordingly, the management is of the view that there will be no further liability in this respect. However, actual cost, if any, as and when incurred towards remediation of environment, will be accounted for.

42.20.8 Special Additional Excise Duty (SAED):

Government of India (Gol) vide notification no. 05/2022 dated 30th June, 2022 had levied Special Additional Excise Duty (SAED) on crude oil with effect from 1st July, 2022 which has been revised and notified by Gol from time to time. During the year, an amount of '' 1,887.35 crore is charged to Statement of Profit & Loss under head "Excise Duty".

42.20.9 Details of charge:

(a) The Company has created charge against Current Assets to the tune of '' 377.45 crore (previous year '' 377.45 crore) for availing Bank Guarantee.

(b) Further the Company has created charge against the Current Assets to the tune of '' 700.00 crore (previous year '' 700.00 crore) for availing Cash Credit/Letter of Credit/Bank Guarantee Facility.

42.21 Other disclosure under Schedule III to the Companies Act, 2013 42.21.1 Contingent Liabilities and Commitments (to the extent not provided for)

A. Contingent Liabilities:

[a) Claims against the Company not acknowledged as debts:

('' in crore)

Sl. No.

Particulars

As at 31st March 2023

As at 31st March 2022

i.

Under Central Excise Act, Service Tax and GST

2,613.51

2,048.09

ii.

Under Income Tax Act

256.69

256.76

iii.

Under Other Acts

90.79

247.85

iv.

By Contractor pending in Arbitration / Courts

22.00

22.36

v.

Claim on JVC/PSC account

103.95

56.96

vi.

Demand raised under Assam Taxation (on specified lands) Amendment Act,2004 for the period from 2010 to 2017

1,495.30

1,404.53

vii

Additional demand of 2% NPV by CCF(Assam) against afforestation

82.77

82.77

Total

4,665.02

4,119.32

[b) In respect of Guarantees:

('' in crore)

Sl. No.

Particulars

As at 31st March 2023

As at 31st March 2022

i.

Bank Guarantee issued to Superintendent of Taxes, Naharkatia, Assam, in relation to demand raised by the Department under Assam Taxation (on specified lands) Amendment Act, 2004 for the period from 2005 to 2009.

702.02

702.02

ii.

Bank Guarantee for Domestic Minimum Work Program (MWP) commitment

675.28

581.10

iii.

Bank Guarantee for Overseas Minimum Work Program (MWP) commitment

273.87

328.98

iv.

Bank Guarantee in respect of NLD, Solar & City gas Distribution

974.00

974.00

v.

Bank Guarantee against OALP

1,094.07

978.48

vi.

Bank Guarantee against DSF Blocks

152.28

152.28

vii.

Against Letter of Credit

175.18

228.31

viii.

Others

4.81

4.68

ix.

Bank Guarantee in respect of Renewable Energy Projects

0.33

0.32

x.

Bank Guarantee in respect of lead partner of AGCL-OIL Consortium

44.10

-

Total

4,095.94

3,950.17

B. Other matters for which the Company is contingently liable:

Commitments:

(a) Capital Commitments:

(i) The estimated amount of contracts remaining to be executed on Capital Account and not provided for in the accounts are '' 940.00 crore (previous year '' 566.79 crore).

(ii) The Company''s share of Capital Commitment in Non-Operated Joint Venture Block AAP-ON-94/1 is '' 0.05 crore (previous year '' 0.20 crore).

(b) Other Commitments:

(i) The estimated amount of contracts remaining to be executed on Revenue Account and not provided for in the accounts are '' 26.16 crore (previous year '' 54.62 crore).

(ii) The balance of Minimum Work Program (MWP) by the Company under Production Sharing Contracts (PSCs) / Revenue Sharing Contract (RSCs) entered for NELP / HELP / DSF Blocks with Govt. of India is '' 4,600.32 crore (previous year '' 4,266.26 crore). The commitment is covered by Bank Guarantee as referred in point no 42.21.1 (A) (b) (ii).

(iii) The balance of Minimum Work Program (MWP) by the Company under Production Sharing Contracts (PSCs) entered for overseas Blocks is '' 416.51 crore (previous year '' 487.83 crore). The commitment is covered by Bank Guarantee as referred in point no 42.21.1 (A) (b) (iii).

(iv) Commitment towards Right issue of equity shares w.r.t., M/s Numaligarh Refinery Limited is ''1,652.84 crore (previous year '' Nil).

42.22 The financial statements were approved by the Board of Directors on 24th May, 2023.

42.23 Figures of previous year have been regrouped/reclassified, wherever necessary, to conform to current years classification.


Mar 31, 2022

2.1 The Company has adopted to continue with the carrying value of its Property, Plant & Equipment (PPE) - Tangible Assets, recognised as on 1st April, 2015 (transition date) measured as per the Previous GAAP and used that carrying value as its deemed cost as on the transition date.

2.2 Carrying value of Oil and Gas assets include estimated cost of decommissioning amounting to '' 191.14 crore (previous year '' 322.66 crore).

2.3 Lands for projects and drillings operations are acquired primarily through bipartite negotiation with the occupiers/

pattadars. In case, however, bipartite negotiation fails, land is acquired under relevant land laws with Government intervention. Upon successful negotiation or government order, as the case may be, consent letters are obtained from the occupiers/pattadars and surface compensation for the standing crops on the lands are settled and the same are capitalized either as Free hold Land or as Oil & Gas assets. At the same time occupiers/pattadars are advised to submit documentary evidences in support of their legal possession of the lands. Pending submission of these documents and upon settlement of surface compensation, liability for land value is determined and capitalised under respective heads. Land cost forming part of Oil & Gas Assets is either amortized or charged off depending on discovery in the well.

Acquisition of land is a continuous activity and in each reporting period there may be instances where execution of sale deed is on-going. As per para 3(ii), General instructions for preparation of financial statements of Schedule III to the Companies Act, 2013, excessive details which may not assist the users of financial statements may not be provided. The management of the Company is of the opinion that providing details of each and every tittle deed holder against which sale deed are yet to be executed due to non-submission of documentary evidence by the occupiers / pattadars in support of their legal position on land will be in the nature of excessive details. Accordingly, the same has not been disclosed. The total land in the possession of the Company is segregated as appended below:

(*) Oil India (USA) Inc. has carried out a reverse stock-split whereby each 1,00,000 shares has beeen exchanged for

1 share. This has the effect of reducing the number of issued shares from 11110000000 of US$0.01 each to 111100 of

US$0.01 each. The effective date of the reverse stock split was 30th August, 2021.

6.6 In December 2021, the Wholly owned Subsidiary Company OIL India (USA) Inc executed a purchase and sale agreement for the sale of 100% of its oil and natural gas properties agreeing to a sale price of US$ 25 million which was fully paid on 14th January, 2022. Accordingly, the Company has tested the carrying value of investment in Oil India (USA) Inc. for impairment and reversed the impairment loss by '' 101.69 crore (US$ 15.86 million) during the year ended 31st March, 2022.

6.7 The Board of Directors of Oil India Cyprus Ltd in its meeting held on 8th July, 2021 had accorded in principle approval for initiating the procedure for striking-off the Company and striking off application have been filed with the Registrar of the Company, Republic of Cyprus and Official Receiver, Nicosia, Cyprus. As the official striking-off of the Company from the Registrar of the Company, Republic of Cyprus is still pending, the investment in Oil India Cyprus Ltd has been continued to be classified as "Investment in Subsidiary" as on 31st March, 2022.

6.8 The Company is holding 12600 nos (1200 nos as on 31st March, 2021) fully paid of 10% Cummulative Redeemable preference share of No par value in Beas Rovuma Energy Mozambique Ltd as on 31st March, 2022. 5120 ordinary equity shares and 1200 preference shares of OIL in Beas Rovuma Energy Mozambique Limited (BREML) have been provided under custody of Area 1 shared security custodian (Standard Bank, S.A.) under project finance arrangement entered into by BREML. The balance 11400 preference shares issued during the year 2021-22 are also under the process of being provided to the Area 1 shared security custodian.

13.2 Trade receivables primarily comprise of government related entities. These government related entities have very strong capacity to meet their obligations. The Company allows credit period of 15-30 days to its customers for payment. Normally, payments are made by the customers on or before the due dates. The management does not anticipate any payment default from these customers other than those already provided for. Hence, as per the prevailing circumstances, management does not consider the increase in credit risk from the time of initial recognition of trade receivables and at the reporting date as significant.

13.3 The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information.

21.1 Terms/rights attached to equity shares:

The Company has only one class of equity shares having par value of ''10 per share. Each holder of equity shares is entitled to one vote per share and carry a right to dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company in proportion to the number of equity shares held.

21.5 4,49,12,000 Equity shares of ''10 each bought back in the FY 2017-18.

21.6 37,83,01,304 Equity shares of ''10 each allotted as fully paid up bonus shares in the FY 2018-19.

21.7 5,04,98,717 Equity shares of ''10 each bought back in the FY 2018-19.

22.1 Nature and purpose of reserves:

(a) Foreign Currency Monetary Item Translation Difference Account: Exchange difference on long-term foreign currency monetary items are accumulated in a Foreign Currency Monetary Item Difference Account and amortised over the balance period of such long term foreign currency monetary item in continuance of policy as permitted under D13AA of Ind AS 101.

(b) Debenture Redemption Reserve: Debenture Redemption Reserve is created out of the profits of the Company, and the amount credited to such account shall not be utilised by the Company except for the redemption of bonds.

(c) Capital Redemption Reserve: Capital Redemption Reserve is created out of the Securities Premium/General Reserve, a sum equal to nominal value of the fully paid up own equity shares purchased by the Company during the period. The amount credited to such account may be applied in paying up unissued shares of the Company to be issued to members of the Company as fully paid bonus shares.

(d) General Reserve: The General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes.

22.2 Other Comprehensive Income: It includes the cumulative gains/losses arising on measurement of equity instruments designated at fair value through Other Comprehensive Income. On disposal of such equity instruments the net amount shall be reclassified to retained earnings.

22.3 The amount that can be distributed by the Company as dividends to its equity shareholders is determined considering the requirements of the Companies Act,2013. On September 16, 2021 the final dividend of '' 1.50 per share (15%) for FY-2020-21 was paid to equity shareholders. On November 10, 2021 and on February 11, 2022, the Company had declared interim dividend of '' 3.50 per share (35%) and '' 5.75 per share (57.50%) respectively, which has since been paid. In respect of the year ended March 31, 2022, the Board of Directors has proposed a final dividend of '' 5.00 per share (50%) be paid on fully paid-up equity shares. This final dividend shall be subject to approval by shareholders at the ensuing Annual General Meeting and has not been included as a liability in these financial statements. The total estimated equity dividend to be paid is '' 542.20 cr.

33.1 As per the directives of MOP&NG, Crude Oil price calculation is based on the monthly average price of benchmarked International Basket of Crude Oil which is further adjusted for quality differential.

33.2 Natural Gas price is as notified by MOP&NG and applicable to operating areas of the Company. Subsidy extended to the eligible customers in North East India is reimbursed by Government of India and shown as Other Operating Revenue.

33.3 On application of Ind AS 115 - Revenue from contracts with customers, the sale of crude oil includes transportation of own crude oil to customers upto the delivery point which coincides with the transfer of risk & rewards and transfer of custody. Income from pipeline transportation includes '' 75.18 crore (previous year '' 77.01 crore) for transportation of own crude oil.

38.1 Pursuant to the directives from Government of India, the Company has raised overseas borrowings for acquiring 4% participating interest in Rovuma 1 offshore block in Mozambique. In the opinion of the Management, there is no explicit restriction by Government of India with regard to servicing of such overseas borrowings from domestic resources of the Company. Interest servicing of '' 437.43 crore (previous year '' 423.06 crore) on such overseas borrowings have been met from domestic resources. The Company has informed MoP&NG that servicing of interest on the overseas borrowings raised for financing of above transaction is being done from domestic resources.

38.2 The Interest Cost on Unsecured loan is net of '' 29.15 crore received from Government of Assam (GoA) being Interest cost related to borrowings for additional shares purchased by OIL on behalf of Government of Assam.

41.1 In Baghjan Oilfield, a producing well (Baghjan #5) in Tinsukia district, Assam suddenly became very active during workover operations on 27th May, 2020, around 10:30 AM. The ongoing operations were immediately suspended as the well started releasing natural gas in an uncontrolled manner. To control the blowout immediate action was taken. The Company has also engaged ONGC Crisis Management Team and M/s Alert Disaster Control (Asia) Pte Ltd, Singapore to control the blowout. The blowout has been successfully controlled, the total losses/ damages for the blowout is '' 449.03 crore which has been shown as Exceptional Item during the year ended 31st March, 2021.

43. FINANCIAL INSTRUMENTS

43.1.1 Capital Management

The Company manages its capital to ensure that Company will be able to continue as going concern while maximizing the return to stakeholders through the optimization of the capital structure.

The capital structure of the Company consists of total equity and debt, (Refer note 21, 22, 23 and 28). The Company is not subject to any externally imposed capital requirements except the guidelines issued by Government of India.

The Company''s management reviews the capital structure on a regular basis. As part of this review, the management considers the cost of capital and the risks associated with each class of capital.The company aims to maintain gearing ratio target around 45% at Group level. The gearing ratio of the company is provided below.

43.3 Financial Risk Management

43.3.1 Objective

The Company monitors and manages the financial risks relating to the operations of the Company by analysing exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk.

43.3.2 Commodity Risk

Crude oil and Natural gas price of the company are linked to international prices of crude oil/natural gas. In case of any upward or downward movement in the international prices of crude oil/natural gas, the revenue of the company get affected correspondingly. Therefore, the company is exposed to commodity price risk.

43.3.3 Market Risk

The company activities exposes it primarily to the financial risks of changes in foreign currency exchange rates, interest rate risk , market exposures that are measured using sensitivity analysis.

43.4 Foreign Currency Risk Management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise.

The price of crude oil and natural gas produced and sold by the company are linked to US Dollars, though billed and received in INR. Hence any movement in the USD against INR has direct impact on the future cash flows of the company on account of sale of these products.

43.4.1 Foreign Currency Sensitivity Analysis

The Company is mainly exposed to the currency of United States of America (USD).

The following table details the Company''s sensitivity to a 5% increase and decrease in the INR against USD.The sensitivity analysis includes only outstanding foreign currency denominated monetary items as at period end and adjusts their translation at the period end for a 5% change in foreign currency rates.

43.4.2 Forward foreign exchange contracts

The Company has entered into a forward foreign exchange contract during the reporting period. However, there is no forward foreign exchange contract outstanding as on balance sheet date.

43.5 Interest rate risk management

The Company is exposed to interest rate risk because the Company borrows funds at both fixed and floating interest rates and make investment in mutual funds. Periodical interest rate on floating interest loan or receivable on mutual fund investment are linked to market rates.The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings. The company policy allows to use forward interest rate agreements (FRA''s) or interest rate swap as per the rquirements

The Company''s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management Refer note 43.8.

43.5.1 Interest Rate Sensitivity Analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. The analysis is prepared based on the floating interest rate assets and liabilities, assuming that the amount outstanding at the end of the reporting period was outstanding for the whole year.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company''s: Loan Given

• Profit and Equity for the year ended March 31, 2022 would increase / decrease by '' 1.66 crores (for the year ended March 31, 2021: increase / decrease by '' 1.61 crores).

Loan Taken

• Profit and Equity for the year ended March 31, 2022 would decrease/increase by '' 8.15 crores (for the year ended March 31, 2021 : decrease/increase by '' 6.39 crores).

43.6 Price risk

The Company is exposed to equity price risks arising from equity investments in Indian Oil Corporation Limited. Exposure in mutual funds

The company also manages surplus fund through investments in debt mutual fund plans regulated by Securities Exchange Board of India (SEBI). The NAV declared by Asset Management Companies(AMC) has generally remained constant on the mutual funds plan taken by the company. However, if the NAV of the fund is increased/decreased by 5%, the sensitivity analysis has been mentioned below:

• Profit and Equity for the year ended March 31, 2022 would increase/decrease by '' 12.91 crores (for the year ended March 31, 2021: decrease/increase by '' 6.51 crores).

43.6.1 Equity Price Sensitivity Analysis

The sensitivity analysis below have been determined based on the exposure to price risks at the end of the reporting period.

If equity prices had been 5% higher/lower:

• Other comprehensive income and Equity for the year ended March 31, 2022 would increase/decrease by '' 259.92 crores (for the year ended March 31, 2021 would increase/decrease by '' 200.71 crores.

43.7 Credit Risk Management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company regularly monitors its counterparty limits by reviewing the outstanding balance and ageing of the same.

The Company has a credit policy that is designed to ensure that consistent processes are in place to measure and control credit risk. Credit risk is considered as part of the risk-reward balance of doing business. On entering into any business contract the extent to which the arrangement exposes the Company to credit risk is considered.

43.8 Liquidity Risk Management

Liquidity risk is the risk that suitable sources of funding for the Company''s business activities may not be available.

The Company manages liquidity risk by monitoring its forecast and actual cash flows, maintaining adequate reserves and by matching the maturity profiles of financial assets and liabilities.

The amounts included above for variable interest rate instruments for both non-derivative financial assets and liabilities is subject to change if changes in variable interest rates differ to those estimates of interest rates determined at the end of the reporting period.

43.8.2 Credit Rating of the Company

Management believes that it has access to sufficient debt funding sources (capital market), and to undrawn committed borrowing facilities to meet foreseeable requirements.

43.9 Fair Value Measurement

This note provides information about how the Company determines fair values of various financial assets and financial liabilities

43.9.1 Fair value of the Company''s financial assets and financial liabilities that are measured at fair value on a recurring basis

Some of the Company''s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used).

Note 1 : Fair value determined on the basis of NAV declared by respective Asset Management Companies Note 2 : Fair value on the basis of price provided by respective Insurance companies Note 3 : Fair value on the basis of quoted price from NSE

43.9.2 Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required)

Except as detailed in the following table, the company considers that the carrying amounts of financial assets and financial liabilities recognised in the consolidated financial statements approximate their fair values.

44.1.2 Defined Benefit Plans

The various Benefit Plans which are in operation in the Company are Oil India Gratuity Fund (OIGF), Oil India Employees'' Pension Fund (OIEPF), Oil India Pension Fund (OIPF), Leave Encashment Fund and Post-Retirement Medical Benefit. The present value of the obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation.

The amount recognized in the Balance Sheet as the present value of the defined benefit obligation is net of the fair value of plan assets at the Balance Sheet date.

44.1.5 Provision of Oil India Employees'' Pension Fund (OIEPF):

The Company is maintaining an irrevocable Trust Fund named as "Oil India Employees'' Pension Fund" (OIEPF) for providing pensionary benefit to its employees on their retirement, permanent disablement and on their death to their beneficiaries which is in line with Employees'' Pension Scheme, 1995.

The Board of Directors in its 501st meeting held on 23rd April, 2019 accorded approval to give opportunity annually to the employees, including, retired employees, to exercise their option to contribute on the basis of Actual Salary.

In view above, opportunity for exercising the change of contribution option was given to active employees, including retired employees during the financial year 2021-22.

The actuarial valuation for active employees, including retired employees as on 31st March, 2022 was carried out as per Ind AS 19 to quantify the net deficit to be borne by the Company. Based on the actuarial valuation '' 164.44 crore has been recognized in the Statement of Profit and Loss and '' 260.53 crore has been routed through Other Comprehensive Income during the year ended 31st March, 2022. The liability of the Company towards the Trust Fund is '' 1,147.12 crore as on 31st March, 2022 and the same is disclosed under Other Current Liabilities in the financial statements.

The actual number of remaining active employees, including retired employees, who may opt, for change of contribution option on actual salary basis in lieu of minimum salary basis cannot not be forecasted with precision. Accordingly, effect of the change in contribution option on actual salary basis by the remaining active employees, including retired employees in future periods shall be recognized in the financial statements in those future periods on occurrence of the event.

1. Revenue mentioned above, represents revenue from external customers. No revenue is generated from transactions with other operating segments of the same entity.

2. Revenue and expenses directly identifiable to the segments have been allocated to the relative primary reportable segments.

3. Segment revenue and expenses which are not directly identifiable to the primary reportable segments have been disclosed under others which primarily include business development services.

4. Assets and liabilities which are directly identifiable to the segments have been allocated to relative segments.

5. Assets and liabilities which are not directly identifiable to the segments have been disclosed under unallocated.

6. All assets are allocated to reportable segments other than investments in subsidiaries, associates and joint ventures, other investments, loans and current and deferred tax assets.

7. There are no reportable geographical segments.

8. Information about major customers:

The Company''s significant revenue comes from sales to Public Sector Undertakings (PSUs). The total sales to such PSUs during the year ended 31st March 2022 amounted to '' 14,252 crore (previous year '' 8,396 crore). Sales to such PSUs during the year ended contributed around 98.09% of the total sales (previous year 97.42%). The Company has lodged '' 253.00 crore from Ministry of Petroleum & Natural Gas against claim recovery of Natural Gas during the year ended 31st March 2022 (previous year '' 196.24 crore). The contribution of claim recovery of Natural Gas towards sales revenue during the year ended 31st March 2022 is 1.74% (previous year 2.28%). No other single customer contributed 10% or more to the Company''s revenue for the year ended 31st March 2022.

* The Board of Directors of Oil India Cyprus Ltd in its meeting held on 8th July, 2021 had accorded in principle approval for initiating the procedure for striking-off the Company and striking-off application have been filed with the Registrar of the Company, Republic of Cyprus and Official Receiver, Niscosia, Cyprus. The Registrar of Companies at Cyprus has proceeded and published the company''s strike off, on the 10th of March 2022. As the official striking-off of the Company from the Registrar of the Company, Republic of Cyprus is still pending, the investment in Oil India Cyprus Ltd has been continued to be classified as "Investment in Subsidiary" as on 31st March, 2022.

** The Board of Directors of the Company in its meeting held on 28th November, 2016 had accorded in-principle approval for voluntary liquidation of M/s Oil India International Limited (OIIL), a wholly owned subsidiary. MoP&NG vide its letter No. O-12027/11/341/2017-ONG-II (18870) dated 20th May, 2019 accorded its approval for winding up of M/s OIIL. Consequently, liquidator has been appointed in the extra - ordinary general meeting of M/s OIIL held on 30th September, 2019. The voluntary liquidation is under process. Pursuant to the liquidation proceedings, with effect from 30th September, 2019 the investment in M/s OIIL was classified as "Equity Shares - Unquoted, measured at fair value through Statement of Profit and Loss". The Company has received an amount of '' 134.81 crore as liquidation

proceeds against investment value of '' 135.11 crore upto the year ended 31st March, 2022. The balance amount of '' 0.30 crore is considered under "Other Receivables".

* M/S Geo Global Resources Inc. a partner in KG-ONN-2004/1 has withdrawn their participating interest from the block. The Company is in the process of taking over the 10% participating interest of M/S Geo Global Resources Inc in the block for which final approval is pending from MOP&NG. One of the discovery in the block is Dangeru - I was a tight gas discovery and first ever discovery in Kommugudem in Krishana - Godaveri basin. The Dangeru discovery is found to be techno-economically unviable due to very poor Gas productivity even after hydro-fracturing in the appraising well and the Company has decided to relinquish the area covering 12.5 sq.km under Dangeru discovery. In connection to this DGH approval for relinquishment of Dangeru discovery has been obtained.

OIL has submitted a proposal for relinquishment of the block KG-ONN-2004/1 covering an area of 129.1 sq. km along with HPHT discoveries viz. Thanelanka-1 and Yedurulanka-1 & exit from the block at the end of the Exploration Period, vide letter dated 06.08.2021. MC Decision on above proposal is awaited.

** The original validity of the Block MZ-ONN-2004/1 expired in May'' 2012 and extended upto 30.06.2017. After that the Company was granted three years extension of the Phase - I Exploration Period under special dispensation w.e.f. 01st July, 2017 & validity of block was extended up to 30.06.2020. After grant of extension of 247 days on account of force majeure and 341 days due to COVID-19 pandemic the block validity was till 08.02.2022. OIL has applied for extension of block validity to DGH for 4 years on 30.11.2021.

However, M/s Shivvani having participating interest of 15% in the said block has gone into liquidation which was intimated by the Dy. Official Liquidator, Delhi High Court vide their letter reference T.C.I/SHIV-VANI 512 dated 17th January, 2018. The Company is in the process of acquisition of the 15% participating interest of M/s Shivani in the Block.

*** In respect these OALP Blocks PEL applications were submitted, however the Company is yet to receive PEL from concerned Governments.

**** Initial Exploration Phase (IEP) of the Block AA-ONN-2010/2 is extended up to 26.12.2023.

***** Initial Exploration Phase (IEP) of the Block AA-ONN-2010/3 is extended up to 17.05.2022 as per Article 3.5 of PSC. Further, OIL has applied for 2nd six months extension for validity of block to DGH on 24.04.2022.

****** In respect of Block AA-ONHP-2017/20, Government of India has approved assignment of participation interest (PI) of 10% from M/s Oil India Limited to M/s Assam Hydro-carbon & Energy Limited (AHECL) on 31.05.2021. However, amendments in 2nd Revenue sharing contract (RSC) signed on 22.06.2021 and 1st Joint operating agreement (JOA) signed on 23.11.2021.

******* In respect to DSF-II offshore block KG/OSDSF/GSKW/2018 in KG Basin, DGH has approved 341 days of extension due to COVID-19 which includes force majeure due to national lockdown. Operator (OIL) has invoked force Majeure in the block from 05.05.2021 due to second wave of Covid-19 hampering the progress of the work. In continuation of extension already granted till 28.02.2021, the Development Period has been extended further till 14.04.2025 under special dispensation vide DGH letter No. DGH/DSF/Special Dispensation (Ext)/2021/11 Dtd. 05.01.2022 due to COVID-19 pandemic

# In respect of these two Mahanadi basin blocks (MN-ONHP-2018/1 & MN-ONHP-2018/2), DGH has approved 217 days of extension due to COVID-19 which includes force majeure due to national lockdown. Operator (OIL) has invoked force Majeure in the block from 05.05.2021 due to second wave of Covid-19 hampering the progress of the work. DGH has been informed about the same and the state government orders related to COVID-19 has been shared with them. DGH has not approved the extension sought on account of Second wave of COVID-19.

## In respect of the offshore blocks in Andaman Basin, Operator has received in-principle approval for the PEL for the small onshore are subject to condition. DGH has approved 180 days of extension due to COVID-19 which includes force majeure due to national lockdown. Operator (OIL) has invoked force Majeure in the block from 05.05.2021 due to second wave of Covid-19 hampering the progress of the work. DGH has been informed about the same and the state government orders related to COVID-19 has been shared with them. DGH has not approved the extension sought on account of Second wave of COVID-19.

### In respect of this Mahanadi basin block (MN-ONHP-2018/5), DGH has approved 222 days of extension due to COVID-19 which includes force majeure due to national lockdown. Operator (OIL) has invoked force Majeure in the block from 05.05.2021 due to second wave of Covid-19 hampering the progress of the work. DGH has been informed about the same and the state

government orders related to COVID-19 has been shared with them. DGH has not approved the extension sought on account of Second wave of COVID-19.

#### In respect to offshore block in Kerala-Konkan Basin, DGH has approved 341 days of extension due to COVID-19 which includes force majeure due to national lockdown. Operator (OIL) has invoked force Majeure in the block from 05.05.2021 due to second wave of Covid-19 hampering the progress of the work. DGH has been informed about the same and the state government orders related to COVID-19 has been shared with them. DGH has not approved the extension sought on account of Second wave of COVID-19.

##### In respect of these two Mahanadi basin blocks (MN-ONHP-2018/3 & MN-ONHP-2018/4), the PEL for both the blocks have been received and the blocks have been effective after signing deed with one district. DGH has been informed about the same and the state government orders related to COVID-19 has been shared with them. DGH has not approved the extension sought on account of Second wave of COVID-19.

(O) Operator

#The validity of the block is expired on 01.08.2021. Operator has requested DGH for granting of four-month Force Majeure considering second wave of COVID-19. The approval of DHG is awaited.

Note: Revenue interest in respect of Block AAP-ON-94/1 is 35.245%.

On application of Ind AS 115 - ''Revenue from Contracts with Customers'', sale of crude oil include transportation of own crude oil up to the delivery point which generally coincides with the transfer of risk and rewards and transfer of custody. Income from pipeline transportation includes '' 75.18 crore for transportation of own crude.

44.8 Information as per Indian Accounting Standard (Ind AS) 116 "Leases"

The Company has adopted Ind AS 116 "Leases" with effect from 1st April, 2019. The Company has elected to apply modified prospective transition approach to measure the right-to-use asset at an amount equal to the lease liability and initial estimate of decommissioning obligation at the date of transition.

The Company has applied Ind AS 116 to hiring contracts of vehicles, rigs, cranes, crawlers, compressors, buildings, etc. to evaluate whether these contracts contains lease components. Based on evaluation of the terms and conditions, the Company has evaluated the lease components of such contracts falling under the purview of Ind AS 116. The lease contracts, with limited exceptions, are recognised in the financial statements by way of right-of-use assets corresponding lease liabilities and initial estimate of decommissioning obligation. The lease liabilities were measured at the present value of the remaining lease payment and discounted using Government of India Bond rate.

The Company had also elected to apply the following practical expedients available under Ind AS 116:

a) Short term leases - The Company has applied Government of India Bond rate as discounting factor to each lease of similar assets in similar economic environment with a similar end rate. The Government of India Bond rate has been bucketed into 0-3 years, 3-5 years, 5-10 years and above 10 years to different lease contract falling in those periods.

b) Discount rate- The Company has applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.

The contracts such as vehicle hiring, drilling rigs hiring, bundle service contracts, etc. involve a number of additional services and components including personnel cost, maintenance, drilling related activities, consumables and other items. In most of such contacts, the additional services/non-lease components constitute significant portion of the overall contract value. Where the additional services/non-lease components are not separately priced, the consideration paid has been allocated based on the relative stand-alone prices of the lease and non-lease components.

The following effects have been given in the financial statements for the Financial year ended 31st March 2022:

(v) Proved and Proved Developed Reserves of oil (including condensates) and gas are technically assessed and reviewed in-house at the end of each year in line with international practices. Reserves are audited by external experts at periodical intervals. For the purpose of estimation of Proved and Proved Developed Reserves, Deterministic Method is used by the Company. Production pattern analysis, numbers of additional wells to be completed, application of enhanced recovery techniques, validity of mining lease agreements, agreements/ MOU for sales are taken into consideration for determining reserves quantity.

44.14 Physical verification of Property, Plant and Equipment (PPE):

Physical verification of the property, plant and equipment is carried out by the Company in phased manner over the period of 3 years. The current block started from 2021-22. Physical verification of PPE carried out till 31st March, 2022 covers 50.06% of PPE in terms of value. A provision of '' 15.29 crore has been made in the accounts towards physical verification of PPE during the period ended 31st March, 2022.

44.15 Service Tax and GST on Royalty payment:

1. Service Tax demand was raised on the Company for the period from March''2016 to June''2017 seeking to levy of service tax along with interest and penalty on Royalty paid on Crude Oil & Natural Gas under the Oil Fields (Regulation & Development) Act, 1948 for the states of Assam, Arunachal Pradesh and Rajasthan. The Company has challenged the demand on various grounds by filing writ petitions before different High Courts. However, pending adjudication of the Writs, the Company has deposited under protest the entire service tax demand of '' 257.13 Crore and the matter is sub-judice.

Pursuant to the Goods and Services Tax Act which was implemented in the country w.e.f. 01st July, 2017 and as per the FAQ on Government Services issued by CBIC, Goods and Services Tax (GST) is payable on Royalty paid for assignment of right to use natural resources.

Based on a legal opinion obtained by the Company that Service tax/GST is not payable on Royalty by the Company under the Oil Fields (Regulation & Development) Act, 1948, the Company has filed writ petitions before different Hon''ble High Courts challenging such levy.

Based on the stay petition filed by the Company the Hon''ble Gauhati High Court, vide its interim order dated 2nd November, 2021 granted stay on the payment of GST on the royalty payments made by the Company in the state of Assam under section 6D of the Oil fields (Regulation and Development) Act, 1948 read with Rules 13 and 14 of the Petroleum and Natural Gas Rules 1959 until further orders.

The total GST amount deposited under protest till 31st March, 2022 is '' 1,228.26 crore (including interest) of which ''

24.41 crore has been received back as refund in the state of Assam. From September, 2021 onwards GST amounting to '' 228.37 crore has not been deposited on the basis of the stay granted by the Hon''ble Gauhati High Court. However, the GST amount in the state of Rajasthan from September, 2021 to March, 2022 amounting to '' 0.80 Crore is deposited.

The estimated amount (including interest and penalty) of '' 259.67 crore for Service Tax and '' 1,456.72 crore for GST (including '' 388.97 crore during FY 2021-22) have been considered as Contingent Liability as on 31st March 2022, being disputed levies.

2. The Company has challenged the levy of Service Tax/GST on Royalty paid under the Oil Fields (Regulation & Development) Act, 1948 on various grounds before the Jodhpur Bench of Hon''ble Rajasthan High Court and the Hon''ble Gauhati High Court. Considering the expert opinion and in the light of various judicial pronouncements, pending adjudication of the matter, the service tax /GST paid under protest has been claimed as an allowable deduction under the Income Tax Act, 1961.

44.16 Government Grants

Revenue Grants

Stipend to apprentices under NATS scheme

As per Ministry of HRD, 50% of the cost of stipend for apprentices paid under National Apprenticeship Training Scheme (NATS) will be reimbursed by Government of India subject to prescribed threshold limit. During the year the Company has received reimbursement of stipend amounting to '' 2.53 crore (previous year '' 2.98 crore) paid to apprentices appointed under NATS.

Generation-based Incentive

Company is getting incentive from Department of Renewable Energy, GOI for wind power generation of Electricity at the rate of 50 paise per unit of power generated. The Company has received grant of '' 2.92 crore during the current year (previous year '' 2.51 crore).

44.19 Others:

44.19.1 Disclosure for COVID - 19

The Company has assessed the potential impact of Covid-19 pandemic on its existing operations. The total revenue of the Company is mainly from sale of crude oil and natural gas which constitute 95% of the total revenue from operations. Around 25% of domestic consumption of crude oil in the Country is from domestic source and any fall in demand of petroleum products is unlikely to adversely affect the domestic crude oil production.

Majority of the Natural Gas produced currently is supplied by the Company to fertilizers and thermal power plants and no significant impact on demand has been witnessed due to Covid-19 pandemic.

The Company does not anticipate any major challenge in continuing its operations and meeting financial obligations. Hence, no impact is expected on Company''s ability to continue as a going concern and meeting its obligations.

Due to Covid-19, there is no effect on useful life / residual life of Property, Plant and Equipment, Trade Receivable, Inventories and Lease Arrangements.

Further, the management has tested Property, Plant and Equipment including Oil & Gas assets for impairment and there is no additional loss on impairment due to the pandemic.

44.19.2 Disclosure on Expiry of PPA

The Company entered into Power Purchase Agreement (PPA) with Jodhpur Vidyut Vitaran Nigam Limited (JdVVNL) for supply of electricity generated for solar power plants validity of which expired on 31.03.2019. The Company vide letter no R/TS/RE/2019-80 dated 26.03.2019, submitted its request for extension of validity of the PPAs of both the Solar Power Plants for the remaining useful life to Rajasthan Urja Vikas Nigam Limited (RUVNL), under the Renewable Energy Certificate and Renewable Purchase Obligation Compliance Framework which is yet to be finalized.

In view of inordinate delay in response from JdVVNL in execution of the agreement, the Company has filed a writ petition with Hon''ble Rajasthan High Court, Jaipur Bench for finalization of Power Purchase Agreement. During the hearing held on 05.11.2019, Hon''ble Rajasthan High Court, Jaipur Bench ordered that the pending disposal of the writ petition, the joint meter reading reports shall be signed, without prejudice to the rights of the either party.

The sale of renewable energy as disclosed in Note 33 of the financial statement includes, an amount of '' 7.19 crore (previous year '' 7.90 crore) in respect of sale of renewable power from solar power plants. The revenue has been recognised as per the rate prescribed by the Hon''ble Rajasthan Electricity Regulatory Commission (RERC) pending renewal of the Power Purchase Agreement (PPA) with JdVVNL. Any adjustment arising on finalisation of the PPA will be accounted in the year of incidence. As per the estimates of the management, the adjustments to the final price will not be material upon execution of PPA.

44.19.3 Disclosure on Overseas Investments

a. Provision for / reversal of diminution in value of certain Overseas Investments through impairment test:

The Company during the year has assessed the impact of impairment of its overseas investments and has recognised impairment in equity investment of '' 216.49 crore for Oil India Sweden AB & '' 49.15 crore for Oil India International B.V., Netherlands and '' 41.22 crore towards loan to Suntera Nigeria 205 Ltd., Nigeria. On divestment of the entire oil & gas assets of wholly owned subsidiary Oil India (USA) Inc. for a consideration of USD 25 million, the Company has reversed an impairment loss of '' 101.69 crore recognized in earlier periods and revised the carrying value of investment in Oil India (USA) Inc.

b. Disclosure on Debt Service Undertaking of Mozambique Area 1 Project

Mozambique Area 1 project, wherein OIL has a participating interest (PI) of 4%, has secured debt commitment of US$14.90 Billion under Export Credit Agencies (ECA) Direct Loans, ECA Covered Facilities, Commercial Bank Facilities and a Loan Facility from African Development Bank. It is one of the condition precedents under project finance arrangement to provide Debt Service Undertaking (DSU) by each of the sponsors of the project. OIL as a DSU provider undertakes to pay its portion of obligation which is equal to pro-rata share of aggregate amount of advances at a given

point in time based on its PI in the project. In case of OIL, the maximum amount that may be claimed by the Senior creditors has been capped at US$ 768 Million. As on 31st March 2022, a debt of US$ 287.30 Million (date of drawal US$ 199.30 Million 26th March, 2021 and USD 88 Million on 1st April 2021) has been drawn from the lenders at project level. OIL''s share of liability under the DSU for its 4% share is US$ 11.49 Million.

44.19.4 Balance Confirmation

The Company has a system of obtaining periodic confirmation of balances from banks and other parties. Further, some balances of Trade and other receivables, Trade and other payables and Loans are subject to confirmation/ reconciliation. Adjustments, if any, will be accounted for on confirmation/reconciliation of the same, which will not have a material impact.

44.19.5 Disclosure on COSA

Crude oil produced by the Company is sold to state owned companies. The price of such crude oil is agreed upon between the buyer and seller through Crude Off-take and Sale Agreement (COSA) based on directives of the Ministry of Petroleum & Natural Gas (MOP&NG) dated May 1, 2009. COSA for the crude oil produced in state of Assam and Arunachal Pradesh is in place with Indian Oil Corporation Limited (IOCL) and Numaligarh Refinery Limited (NRL). However, the Company is in process of executing the COSA with IOCL for crude oil produced in Rajasthan Fields. Crude oil price for heavy crude in Rajasthan fields delivered to IOCL is determined and billed provisionally, based on 70% of the monthly average of the quoted price of brent crude as mutually agreed upon. Change in price of heavy crude oil, if any, arising out of the signing of COSA with IOCL will be adjusted in the year of incidence. As per the estimates of the management, the adjustments to the final price will not be material upon execution of COSA. (Refer Note 33 for revenue from sale of crude oil).

44.19.6 Digboi PML Expiry

Digboi (PML), on the several PMLs operated by the Company expired on 13th October, 2021. The Company in exercise of right of re-grant as per the subsisting deed applied to Mines and Minerals Department, Government of Assam with a copy to Ministry of Petroleum & Natural Gas (MoP&NG) for re-grant of the said PML within the due date of application for re-grant. Further, the Company has also requested Directorate General of Hydrocarbon (DGH) requesting for re-grant of the PML.

44.19.7 On January 14th 2022, the subsidiary company M/s Oil India (USA) Inc completed the divestment of its entire oil & gas assets for a consideration of USD 25 million. Subsequent to divestment, on May 5th, 2022, the subsidiary company adopted a plan of liquidation and termination.

44.19.8 Blowout of well Baghjan #5

On 27th May, 2020 a blowout occurred in a producing well (Baghjan #5) of Baghjan Oilfield in Tinsukia district, Assam, while carrying out workover operations and subsequently caught fire. The fire was finally put off on 15th November, 2020 and the well was permanently capped and abandoned on 3rd December, 2020. The total losses/damages for the blowout is '' 449.03 crore which has been shown as Exceptional Item in the Statement of Profit and Loss for the year ended 31st March, 2021.

National Green Tribunal, Principal Bench, New Delhi through its order dated 19th February 2021 constituted a ten-member Committee headed by the Chief Secretary, Assam to look into the probable damage caused by the blowout to the environment and restoration measures, including measures for restoration of Dibru-Saikhowa National Park and the Maguri - Motapung Wetland.

However, an appeal was filed before the Hon''ble Supreme Court by one Ms Bonani Kakkar challenging the above order of NGT regarding formation of the committee.

Hon''ble Supreme Court vide order dated 02nd September 2021 re-constituted the Committee with five member for "Assessment of the damage and preparation of restoration plan of Dibru Saikhowa National Park and Maguri-Motapung Wetland".

The report of the committee was submitted to the Hon''ble Supreme Court and was shared with the concerned parties on the basis of order dated 11th May,2022 of the Apex Court. The committee in its report proposed a cost of '' 1196 crore for redressal of damage and putting in place systems and institutional mechanisms, with share of OIL being '' 980 crore and the balance to be borne by Govt. of Assam. The Hon''ble Supreme Court has sought the response of concerned parties prior to the hearing scheduled on 2nd August 2022. Management is of the view that there will be no further liability for ecological restoration, addressing livelihood and socio-economics aspect related with restoration.

44.19.9 Details of charge:

(a) The Company has created charge against Current Assets to the tune of '' 377.45 crore (previous year '' 377.45 crore) for availing Bank Guarantee.

(b) Further the Company has created charge against the Current Assets to the tune of '' 700.00 crore (previous year '' 700.00 crore) for availing Cash Credit/Letter of Credit/Bank Guarantee Facility.

B. Other matters for which the Company is contingently liable:

Commitments:

(a) Capital Commitments:

(i) The estimated amount of contracts remaining to be executed on Capital Account and not provided for in the accounts are '' 566.79 crore (previous year '' 274.60 crore).

(ii) The Company''s share of Capital Commitment of in Non-Operated Joint Venture Block AAP-ON-94/1 is '' 0.20 crore (previous year '' 1.46 crore).

(b) Other Commitments:

(i) The estimated amount of contracts remaining to be executed on Revenue Account and not provided for in the accounts are '' 54.62 crore (previous year '' 663.45 crore).

(ii) The balance of Minimum Work Program (MWP) by the Company under Production Sharing Contracts (PSCs) / Revenue Sharing Contract (RSCs) entered for NELP / HELP / DSF Blocks with Govt. of India is '' 4,266.26 crore (previous year '' 5,033.24 crore). The commitment is covered by Bank Guarantee as referred in point no 44.20.1 (b) (ii).

(iii) The balance of Minimum Work Program (MWP) by the Company under Production Sharing Contracts (PSCs) entered for overseas Blocks is '' 487.83 crore (previous year '' 473.32 crore). The commitment is covered by Bank Guarantee as referred in point no 44.20.1 (b) (iii).

44.21 The financial statements were approved by the Board of Directors on 27th May, 2022.

44.22 Figures of previous year have been regrouped/reclassified, wherever necessary, to conform to current years classification.


Mar 31, 2021

2.3 Lands for projects and drillings operations are acquired primarily through bipartite negotiation with the occupiers/pattadars. In case, however, bipartite negotiation fails, land is acquired under relevant land laws with Government intervention. Upon successful negotiation or government order, as the case may be, consent letters are obtained from the occupiers/pattadars and surface compensation for the standing crops on the lands are settled and the same are capitalized either as Free hold Land or as Oil & Gas assets. At the same time occupiers/pattadars are advised to submit documentary evidences in support of their legal possession of the lands. Pending submission of these documents and upon settlement of surface compensation, liability for land value is determined and capitalised under respective heads. Land cost forming part of Oil & Gas Assets is either amortized or charged off depending on discovery in the well. The total land in the possession of the Company is segregated as appended below:

6.6 The Company has acquired 3984,36,929 equity shares (54.16%) of Numaligarh Refinery Limited (NRL) from Bharat Petroleum Corporation Limited (BPCL) at ? 217.75 per share for a total cash consideration of ? 8,675.96 core along with transfer of management control to the Company on 26th March, 2021. Share Purchase agreement in this behalf amongst the buyers and seller was signed on 25th March, 2021. By virtue of this investment, NRL has become a subsidiary of the Company.

The Govt, of Assam (GOA) while exercising its right of first offer for 10,04,42,858 equity shares of NRL, purchased 2,29,62,112 equity shares of NRLfromtheseller(BPCL)and had requested the Companyto purchase balance7,74,80,746 shares which will be acquired by GOAfrom the Company during the FY 2021-22.

Accordingly, the Company out of its total holding of 80.163% of equity shares in NRL, has classified 69.63% as investment in subsidiary (existing 26% plus 43.63% out of the new acquisition). The balance of equity shares of NRL acquired (10.533%) which is to be purchased by Govt, of Assam during the FY 2021-22 has been disclosed as "Asset classified as held for sale" in Note 19 to the Standalone Financial Statements.

6.7 The Board of Directors of the Company in its meeting held on 28th November, 2016 had accorded in principle approval for voluntary liquidation of Oil India International Limited (OIIL), a wholly owned subsidiary. MoP&NG vide its letter No. 0-12027/11/341/2017-ONG-II (18870) dated 20th May, 2019 accorded its approval for winding up of Oil India International Limited. Consequently, liquidator has been appointed in the extra-ordinary general meeting of Oil India International Limited held on 30th September,2019. The voluntary liquidation is under process. Pursuant to liquidation proceedings, with effect from 30th September, 2019 the investment in Oil India International Limited was classified as "Unquoted measured at fair value through Profit and Loss". During the year ended 31st March, 2021 the Company has received an

12.1 Trade receivables primarily comprise of government related entities. These government related entities have very strong capacity to meet their obligations. The Company allows credit period of 15-30 days to its customers for payment. Normally, payments are made by the customers on or before the due dates. The management does not anticipate any payment default from these customers other than those already provided for. Hence, as per the prevailing circumstances, management does not consider the increase in credit risk fromthe time of initial recognition of trade receivables and at the reporting date as significant.

12.2 The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information.

14.1 If the dividend has not been paid or claimed within 30 days from the date of its declaration, the Company is required to transfer the total amount of the dividend which remains unpaid or unclaimed, to a special account maintained by the Company in a scheduled bank as "Unpaid Dividend Account". The unclaimed dividend lying with the Company is required to be transferred to the Investor Education and Protection Fund(IEPF), administered by the Central Government after a period of seven years of its declaration.

17.1 The Government of India introduced the Direct Tax Vivad Se Vishwas Scheme, 2020 (herein after referred to as the "the Scheme" by enactment of the Direct Tax Vivad Se Vishwas Act, 2020 and the Direct Tax Vivad Se Vishwas Rules, 2020 for settlement of pending Income Tax disputes. The Company has settled all its pending Income Tax Disputes from AY 2003-04 to AY 2016-17 under the said Scheme. Out of ?1381.56 crore receivable under the Scheme an amount of ? 919.51 crore has been already received within 31stMarch, 2021 and the balance receivable amount of ?462.05 crore has been disclosed as receivable.

19.1 Reference to Note 6.6 to the Standalone Financial Statement, 7,74,80,746 (10.533%) of the equity shares of Numaligarh Refinery Limited acquired by the Company @ ? 217.75 per share in pursuance of the Share Purchase Agreement will be acquired by Govt, of Assam in the financial year 2021-22. In view of the forward purchase right available to the Govt, of Assam and the company having committed to sale such number of shares in pursuance of the Share Purchase Agreement and letter to the Govt, of Assam, the investment is classified as asset held for sale as on reporting date in compliance with IndAS 105.The Company has received on 25th May, 2021 an amount of ?496.63 crore (2,28,07,158 shares @ ? 217.75). In addition, the Company has also received the reimbursement of stamp duty fee and holding cost borne by theCompanytill24.05.2021 in respect of theseshares.

21.1 Natureand purpose of reserves:

(a) Foreign Currency Monetary Item Translation Difference Account: Exchange difference on long-term foreign currency monetary items are accumulated in a Foreign Currency Monetary Item Difference Account and amortised over the balance period of such long term foreign currency monetary item in continuance of policy as permitted underD13AAoflndAS101.

(b) Debenture Redemption Reserve: Debenture Redemption Reserve is created out of the profits of the Company

available for payment of dividend and the amount credited to such account shall not be utilised by the Company except for the redemption of debentures.

(c) Capital Redemption Reserve: Capital Redemption Reserve is created out of the Securities Premium/General Reserve, a sum equal to nominal value of the fully paid up own equity shares purchased by the Company during the period. The amount credited to such account may be applied in paying up unissued shares of the Company to be issued to members of the Company as fully paid bonus shares.

(d) General Reserve: The General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes.

21.2 Other Comprehensive Income: It includes the cumulative gains/losses arising on measurement of equity instruments designated at fair value through Other Comprehensive Income. On disposal of such equity instruments the net amount shall be reclassified to retained earnings.

32.1 As per the directives of MOP&NG, Crude Oil price calculation is based on the monthly average price of benchmarked International Basket of Crude Oil which is further adjusted for quality differential.

32.2 LPG prices are governed as per PAHAL (DBTL) Scheme, 2014 issued by MOP&NG vide letter No. 20019/101/2014-LPG dated 1st April, 2015.

32.3 Natural Gas price is as notified by MOP&NG and applicable to operating areas of the Company. Subsidy extended to the eligible customers in North East India is reimbursed by Government of India and shown as Other Operating Revenue.

32.4 On application of Ind AS 115 - Revenue from contracts with customers, the sale of crude oil and natural gas includes transportation of own crude oil and natural gas to customers upto the delivery point which coincides with the transfer of risk & rewards and transfer of custody. Income from pipeline transportation includes? 77.01 crore (previous year? 87.34 crorejand ? 0.98 crorejprevious year? 0.92 crorejfor transportation of own crude oil and natural gas respectively.

37.1 Pursuant to directive from Government of India, the Company has raised overseas borrowings for acquiring 4% participating interest in Rovuma 1 offshore block in Mozambique. In the opinion of the Management, there is no explicit restriction by Government of India with regard to repayment and servicing of such overseas borrowings from domestic resources of the Company. Interest servicing of ?423.06 crore (previous year ?430.21 crore) on such overseas borrowings have been met from domestic resources. The Company has informed MoP&NG that servicing of interest on the overseas borrowings raised forfinancing of above transaction is being done from domestic resources. Approval of MoP&NG isawaited.

42.1.1 Capital Management

The Company manages its capital to ensure that Company will be able to continue as going concern while maximizing the return to stakeholders through the optimization of the capital structure.

"The capital structure of the Company consists of total equity and debt, (Refer note 20,21, 22 and 27). The Company is not subject to any externally imposed capital requirements except the guidelines issued by Government of India."

The Company''s management reviews the capital structure on a regular basis. As part of this review, the management considers the cost of capital and the risks associated with each class of capital.The company aims to maintain gearing ratio target around 45% at Group level. The gearing ratio of the company is provided below.

42.3 Financial Risk Management42.3.1 Objective

The Company monitors and manages the financial risks relating to the operations of the Company by analysing exposures by degree and magnitude of risks. These risks include market riskfincluding currency risk, interest rate risk and price risk), credit riskand liquidity risk.

42.3.2 Commodity Risk

Crude oil and Natural gas price of the company are linked to international prices of crude oil/natural gas. In case of any upward or downward movement in the international prices of crude oil/natural gas, the revenue of the company get affected correspondingly. Therefore, the company is exposed to commodity price risk.

42.3.3 Market Risk

The company activities exposes it primarily to the financial risks of changes in foreign currency exchange rates, interest rate risk, market exposures that are measured using sensitivity analysis.

42.4 Foreign Currency Risk Management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuationsarise.

The carrying amounts of the Company''s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

The Company is mainly exposed to the currency of United States of America (USD).

The following table details the Company''s sensitivity to a 5% increase and decrease in the INR against USD.The sensitivity analysis includes only outstanding foreign currency denominated monetary items as at period end and adjusts their translation at the period end fora 5% change in foreign currency rates.

42.4.2 Forward foreign exchange contracts

The Company has entered into a forward foreign exchange contract during the reporting period. However, there is no forward foreign exchange contract outstanding as on balance sheet date.

42.5 Interest rate risk management

The Company is exposed to interest rate risk because the Company borrows funds at both fixed and floating interest rates and make investment in mutual funds. Periodical interest rate on floating interest loan or receivable on mutual fund investment are linked to market rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings. The company policy allows to use forward interest rate agreements(FRA''s)or interest rate swap as perthe rquirements

The Company''s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management Refernote42.8.

42.5.1 Interest Rate Sensitivity Analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for both derivatives and nonderivative instruments at the end of the reporting period. The analysis is prepared based on the floating interest rate assets and liabilities, assuming that the amount outstanding at the end of the reporting period was outstanding for the whole year.

If interest rates had been 50 basis points higher/lowerand all other variables were held constant, the Company''s:

Loan Given

• Profit and Equity for the year ended March 31,2021 would increase/decrease by Rs.1.61 crores (for the year ended March 31, 2020: increase/decrease by ?1.66 crores).

LoanTaken

• Profit and Equity fortheyear ended March 31,2021 would decrease/increase by Rs.6.39 croresfforthe year ended March 31, 2020: decrease/increase by Rs. 3.64 crores).

42.6 Price risk

The Company is exposed to equity price risks arising from equity investments in Indian Oil Corporation Limited.

Exposure in mutual funds

The company also manages surplus fund through investments in debt mutual fund plans regulated by Securities Exchange Board of India (SEBI). The NAV declared by Asset Management Companies(AMC) has generally remained constant on the mutual funds plan taken by the company. However, if the NAV of the fund isincreased/decreased by 5%, the sensitivity analysis has been mentioned below:

• Profit and Equity for the year ended March 31,2021 would increase/decreaseby Rs.6.51 crores (for the year ended March 31, 2020: decrease/increaseby?15.38 crores).

The sensitivity analysis below have been determined based on the exposure to price risks at the end of the reporting period.

If equity prices had been 5% higher/lower:

• Other comprehensive income and Equity for the year ended March 31, 2021 would increase/decrease by ?200.71 crores (forthe year ended March 31,2020 would increase/decrease by ?178.42 crores.

42.7 Credit Risk Management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company regularly monitors its counterparty limits by reviewing the outstanding balance and ageing of the same.

42.8 Liquidity Risk Management

Liquidity risk is the risk that suitable sources of funding for the Company''s business activities may not be available.

The Company manages liquidity risk by monitoring its forecast and actual cash flows, maintaining adequate reserves and by matching the maturity profiles of financial assets and liabilities.

42.8.1.1 The table below provides details regarding the contractual maturities of financial liabilities including estimated interest payments as at March 31,2021:

1. Revenue mentioned above, represents revenue from external customers. No revenue is generated from transactions with other operating segments of the same entity.

2. Revenue and expenses directly identifiable to the segments have been allocated to the relative primary reportable segments.

3. Segment revenue and expenses which are not directly identifiable to the primary reportable segments have been disclosed under others which primarily include business development services and leasing of OFC.

4. Assets and liabilities which are directly identifiable to the segments have been allocated to the related segments.

5. Assets and liabilities which are not directly identifiable to the segments have been disclosed as unallocated.

6. All assets are allocated to reportable segments other than investments in subsidiaries, associates and joint ventures, otherinvestments, loansand currentand deferred tax assets.

7. There are no reportable geographical segments.

8. The Company has adopted new basis for apportionment of common cost between crude oil and natural gas segmentsfrom the currentfinancial year. Common costs of the products have been apportioned between them in the ratio of guantity of gross production instead of thermal eguivalence percentage adopted in previous years, as a more appropriate alternative basis of apportionment to assess the operating results of the reportable segment. In view of the change in the basis of apportionment, comparative figures of segment results, assets and liabilities

8. Information about major customers:

The Company''s significant revenue comes from sales to Public Sector Undertakings (PSUs). The total sales to such PSUs during the year ended 31st March 2021 amounted to? 8,396 crore (previous year? 11,723 crore). Sales to such PSUs during the year ended 31st March, 2021 contributed around 97.42% of the total sales (previous year 96.66%). The Company has lodged? 196.24 crore (previous year? 351.89 crore)from Ministry of Petroleum & Natural Gas against claim recovery of Natural Gas during the year ended 31st March 2021. The contribution of claim recovery of Natural Gas towards sales revenue during the year ended 31st March 2021 is 2.28% (previous year 2.90%). No other single customer contributed 10% or more to the Company''s revenue for the year ended 31st March 2021.

43.3 Information as per Indian Accounting Standard (Ind AS) 23 "Borrowing Costs"

Borrowing cost capitalized during the year is NIL (previous year NIL).

43.4 Information as per Indian Accounting Standard (Ind AS) 24 "Related Party Disclosures"43.4.1 Related party relationships

Name of related parties and description of relationship are as under:

*The Board of Directors of the Company in its meeting held on 28th November, 2016, accorded in-principle approval for voluntary liquidation of Oil India International Limited (OIIL), a wholly owned subsidiary. Further, MoP&NG vide its letter No. 0-12027/11/341/2017-ONG-II (18870) dated 20th May, 2019 accorded its approval for winding up of Oil India International Limited. Conseguently, Liquidator has been appointed in the extra-ordinary general meeting of Oil India International Limited held on 30th September, 2019. The voluntary liquidation is under process. Pursuant to liquidation proceedings, with effect from 30th September, 2019 the investment in Oil India International Limited was classified as "Eguity Instruments - Unguoted measured at fair value through Profit and Loss" in Note 6. During the year ended 31st March, 2021 the Company has received an amount of ? 134.81 crore as liquidation proceedings against investment value of ? 135.11 crore. The balance amount of ? 0.30 crore has been shown as "Other Receivables" under "Current Financial Assets: Others"in Note16.

**The Company has acquired 3984,36,929 equity shares (54.16%) of Numaligarh Refinery Limited (NRL) from Bharat Petroleum Corporation Limited (BPCL) at? 217.75 per share for a total cash consideration of ? 8,675.96 crore along with transfer of management control to the Company on 26th March, 2021. Share Purchase agreement in this behalf amongst the buyers and seller was signed on 25th March, 2021. By virtue of this investment, NRL has become a subsidiary of the Company.

The Govt, of Assam (GOA) while exercising its right of first offer for 10,04,42,858 equity shares of NRL, purchased 2,29,62,112 equity shares of NRL from the seller (BPCL) and had requested the Company to purchase balance 7,74,80,746 shares which will be acquired by GOA from the Company during the FY 2021-22.

Accordingly, the Company out of its total holding of 80.163% of equity shares in NRL, has classified 69.63% as investment in subsidiary (existing 26% plus 43.63% out of the new acquisition). The balance of equity shares of NRL acquired (10.533%) which is to be purchased by Govt, of Assam during the FY 2021-22 has been disclosed as "Asset classified as held for sale" in Note 19 to the Standalone Financial Statements.

* M/S Geo Global Resources Inc. a partner in KG-ONN-2004/1 has withdrawn their participating interest from the block. The Company is in the process of taking over the 10% participating interest of M/S Geo Global Resources Inc in the block for which final approval is pending from MOP&NG. One of the discovery in the block is Dangeru -1 was a tight gas discovery and first ever discovery in Kommugudem in Krishana - Godaveri basin. The Dangeru discovery is found to be techno-economically unviable due to very poor Gas productivity even after hydro-fracturing in the appraising well and the Company has decided to relinquish the area covering 12.5 km2 under Dangeru discovery. In connection to this DGH approval for relinquishment of Dangeru discovery has been obtained.

** The original validity of the Block MZ-ONN-2004/1 expired in May''2012 and extended upto 30.06.2017. After that the Company was granted three years extension of the Phase -1 Exploration Period under special dispensation w.e.f. 01st July, 2017 & validity of block was extended up to 30.06.2020. Now the block is currently valid till 08.02.2022 after the recent grant of 247 days on account of force majeure and 341 days due to COVID-19 pandemic.

However, M/s Shivvani having participating interest of 15% in the said block has gone into liquidation which was intimated by the Dy. Official Liquidator, Delhi High Court vide their letter reference T.C.I/SHIV-VANI 512 dated 17th January, 2018. The Company is in the process of acquisition of the 15% participating interest of M/sShivani in the Block.

*** In respect these OALP Blocks PEL applications were submitted, however the Company is yet to receive PEL from concerned Governments.

**** Validity of the Block has been extended up to 04.06.2021 due to the outbreak of COVID-19 pandemic including the force majeure granted for the period of National Lock down. Two years extension for block has already been applied on 24.04.2019 to DGH, however extension grant is still awaited.

***** Validity of the block was extended up to 17.11.2021 due to outbreak of COVID-19 pandemic including the force majeure granted for the period of National Lockdown.

# In respect of these two Mahanadi basin blocks (MN-ONHP-2018/1 & MN-ONHP-2018/2), DGH has approved 217 days of extension due to COVID-19 which includes force majeure due to national lockdown.

## In respect of the offshore blocks in Andaman Basin, Operator has received in-principal approval for the PEL for the small onshore are subject to condition. DGH has approved 180 days of extension due to COVID-19 which includes force majeure due to national lockdown.

### In respect of this Mahanadi basin block (MN-ONHP-2018/5), DGH has approved 222 days of extension due to COVID-19 which includes force majeure due to national lockdown.

#### In respect to offshore block in Kerala-Konkan Basin, DGH has approved 341 days of extension due to COVID-19 which includes force majeure due to national lockdown.

##### In respect of these two Mahanadi basin blocks (MN-ONHP-2018/3 & MN-ONHP-2018/4), the PEL for both the blocks have been received and the blocks have been effective after signing deed with one district.

The following two blocks were awarded to the Company under OALP V round of bidding, Revenue Sharing Contract (RSC) was signed with Government of India (GOI) on 17th November, 2020. The Company has applied for PEL on 09.12.2020. The PEL is vet to be aranted bv Govt, of Raiasthan.

43.7 Information as per Indian Accounting Standard (Ind AS)H5 "Revenue from Contracts with Customers" Disaggregation of Revenue

The Company presents disaggregated revenues from contracts with customers for the year ended 31st March 2021 byproduct lines. The Company believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.

43.1.2 Defined Benefit Plans

The various Benefit Plans which are in operation in the Company are Oil India Gratuity Fund (OIGF), Oil India Employee''s Pension Fund(OIEPF), Oil India Pension Fund(OIPF), Leave Encashment Fund and Post-Retirement Medical Benefit. The present value of the obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation.

The amount recognized in the Balance Sheet as the present value of the defined benefit obligation is net of the fair value of plan assets at the Balance Sheet date.

These plans typically expose the Group to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

On application of Ind AS 115 - ''Revenue from Contracts with Customers'', sale of crude oil and natural gas will include transportation of own crude oil and natural gas respectively upto the delivery point which generally coincides with the transfer of risk and rewards and transfer of custody. Income from pipeline transportation includes? 77.01 croreand

? 0.98 crore for transportation of own crude oil and natural gas respectively.

43.8 Information as per Indian Accounting Standard (Ind AS) 116 "Leases"

The Company has adopted Ind AS 116 "Leases" with effect from 1st April, 2019. The Company has elected to apply modified prospective transition approach to measure the right-to-use asset at an amount equal to the lease liability and initial estimate of decommissioning obligation at the date of transition.

The Company has applied Ind AS 116 to hiring contracts of vehicles, rigs, cranes, crawlers, compressors, buildings, etc. to evaluate whether these contracts contains I ease components. Based on evaluation of the terms and conditions, the Company has evaluated the lease components of such contracts falling under the purview of Ind AS 116. The lease contracts, with limited exceptions, are recognised in the financial statements byway of right-of-use assets corresponding lease liabilities and initial estimate of decommissioning obligation. The lease liabilities were measured at the present value of the remaining lease payment and discounted using Government of India Bond rate.

The Company had also elected to apply the following practical expedients available under Ind AS 116:

a) Shortterm leases-The Company has applied Government of India Bond rate as discounting factor to each lease of similar assets in similar economic environment with a similar end rate. The Government of India Bond rate has been bucketed into 0-3 years, 3-5 years, 5-10 years and above 10 years to different I ease contract falling in those period.

b) Discount rate-The Company has applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.

The contracts such as vehicle hiring, drilling rigs hiring, bundle service contracts, etc. involve a number of additional service and components including personnel cost, maintenance, drilling related activities, consumables and other items. In most t such contacts, the additional services/non-lease components constitute significant portion of the overall contract valui Where the additional services/non-lease components are not separately priced, the consideration paid has been allocate based on the relative stand-alone prices of the lease and non-lease components.

The following effects have been given in the financial statement for the year ended 31st March, 2021:

Balance Sheet:

The movement of right-of-use assets and lease liabilities is as below:

(v) Proved and Proved Developed Reserves of oil (including condensates) and gas are technically assessed and reviewed in-house at the end of each yearin line with international practices. Reserves are audited by external experts at periodical intervals. For the purpose of estimation of Proved and Proved Developed Reserves, Deterministic Method is used

by the Company. Production pattern analysis, numbers of additional wells to be completed, application of enhanced recovery technigues, validity of mining lease agreements, agreements/ MOU for sales are taken into consideration for determining reserves guantity.

43.13 Physical verification of Property, Plant and Equipment(PPE):

Physical verification of the property, plant and equipment is carried out by the Company in phased manner over the period of 3 years. The current block started from 2018-19. Physical verification of PPE carried out till 31st March, 2021 covers 99.85% of PPE in terms of value. A provision of ? 13.53 crore has been made in the accounts towards physical verification of PPE during the period ended 31st March, 2021.

43.14 Service Tax and GST on Royalty payment:

1. TheCompanyhasreceivedShowCausecum Demand Notices (SCNs), from the Directorate General of Goods and Service Tax Intelligence (DGGSTI) seeking to levy of service tax along with interest and penalty on Royalty paid on Crude Oil & Natural Gas, levied under Oil Fields (Regulation & Development) Act, 1948 for the states of Assam, Arunachal Pradesh and Rajasthan for the period from March, 2016 to June, 2017. The Company had made detailed representations against these SCNs to the Appropriate Authorities disputing the levy on various grounds.

The SCN pertaining to operations in the State of Rajasthan has been decided against the company vide order No 13/ST/JDR/2019 dated 12,h April, 2019 and the Company has already Tied a writ petition before the High Court of Rajasthan, Jodhpur Bench against the order confirming the SCN issued by the Department. The Writ has been admitted by the Hon''ble High Court of Rajasthan and hearing on the same is awaited. However, the entire service tax demand of ? 1.44 crore as per the SCN in Rajasthan has been deposited by the Company under protest. The SCN relating to the States of Assam & Arunachal Pradesh is yet to be disposed off. pending adjudication of the SCN, the Company has deposited under protest the entire service tax demand of ? 255.69 crore as per the SCN.

The Goods and Service Tax Act was implemented in the country w.e.f. 1st July, 2017 and as per the FAQ on Government Services issued by CBIC, GST is payable on Royalty paid for assignment of right to use natural resources.

The Company has obtained a legal opinion that Service tax/ GST is not payable on Royalty paid by the Company under the Oil Fields (Regulation & Development)Act, 1948.

However, as an abundant precaution the Company has been regularly filing GSTR-3B and depositing the GST on Royalty paid with intimation to the jurisdictional GST Authorities that the deposit is made under protest. The Company has also claimed refund of the amount deposited till March''2020 in the states of Assam and Arunachal Pradesh and till June, 2019 in Rajasthan.

The refund claim of the Company has been initially granted for two months and rejected for all other months till March, 2019 and SCN have been issued for the remaining period till March, 2020 (including for the two months for which refund was initially granted) in the state of Assam. While refund claims of the Company in the State of Rajasthan have been rejected for the period till March, 2019 and SCN have been issued for the remaining period there was no order passed in the State of Arunachal Pradesh.

The Company has Tied three writ petitions in Gauhati High Court challenging the levy of Service Tax and GST on Royalty paid under the Oil Fields (Regulation and Development) Act, 1948 and all the writs have been already admitted by the Hon''ble Gauhati High Court. Further the Company has Tied two writs in Rajasthan High Court, Jodhpur Bench challenging the levy of Service Tax and GST on Royalty paid under the Oil Fields (Regulation and Development) Act, 1948 and both the writs have been already admitted by the Hon''ble Rajasthan High Court.

The Company has deposited? 1047.11 crore(including interest) under protest against GST on Royalty till 31st March, 2021 out of which ? 24.41 crore has been received back as refund in Assam. This does not include ? 45.25 crore, being GST on Royalty for the month of February''2021 and March'' 2021, which has been deposited later.

The total estimated amount (including interest) of ? 259.67 crore for Service Tax and ? 1092.36 crore for GST, including? 207.92 crore for the current financial year (i.e., FY 2020-21) have been shown as "Contingent Liability" as on 31st March, 2021, being disputed levy.

2. The Company has challenged the levy of Service Tax/GST on Royalty paid under the Oil Fields (Regulation & Development) Act, 1948 on various grounds before the Jodhpur Bench of Hon''ble Rajasthan High Court and the Hon''ble Gauhati High Court. Considering the expert opinion and in the light of various judicial pronouncements, pending

adjudication of the matter, the service tax /GST paid under protest has been claimed as an allowable deduction under the Income Tax Act, 1961.

43.15 Others:43.15.1 Capital Subsidy Reimbursement from Brahmaputra Cracker and Polymers Limited

As per the approval of Cabinet Committee on Economic Affairs (CCEA), an amount of ?215.00 crore is reimbursable by Brahmaputra Cracker and Polymers Limited (BCPL)to the Company out of the capital subsidy received from the Ministry of Chemical and Fertilizers for development of infrastructure for gas supply. The Company has received ? 69.65 crore, ? 60.00 crore and ? 65.00 crore during FY 2011-12, FY 2018-19 and FY 2019-20 respectively.

The balance amount of ?20.35 crore has been recognised as reimbursement of capital cost receivable with a corresponding credit to deferred income as on 31st March, 2021. However, the amount of ? 20.35 crore has been paid by M/s BCPL on 16th April, 2021.

The deferred income corresponding to the amount of reimbursement of capital cost receivable is recognized over the useful life of the asset from December, 2014 when the related assets were commissioned. During the year ended 31st March, 2021 the Company has recognized an amount of ? 5.55 crore as deferred income from amortization and credited to the Statement of Profit or Loss.

43.15.2 DisclosureforCOVID-19

The Company has assessed the potential impact of COVID-19 pandemic on its existing operations. The total revenue of the Company is mainly from sale of crude oil and natural gas which constitute 95% of the total revenue from operations. Around 25% of domestic consumption of crude oil in the Country is from domestic source and any fall in demand of petroleum products is unlikely to adversely affect the domestic crude oil production. Majority of the Natural Gas produced currently is supplied by the Company to fertilizers and thermal power plants and no significant impact on demand has been witnessed due to COVID-19 pandemic.

The Company does not anticipate any major challenge in continuing its operations and meeting financial obligations. Hence, no impact is expected on Company''s ability to continue as a going concern and meeting its obligations. Due to COVID-19, there is no effect on useful life/residual life of Property, Plant and Eguipment, Trade Receivables, Inventoriesand Lease Arrangements. Further, the management hastested Property, Plantand Eguipment including Oil & Gas assets for impairment and

there is no additional loss on impairment due to the pandemic.

43.15.3 Blowout of well Baghjan# 5

In Baghjan Oilfield, a producing well (Baghjan #5) in Tinsukia district, Assam suddenly became very active during workover operations on 27th May, 2020, around 10:30 AM. The ongoing operations were immediately suspended as the well started releasing natural gas in an uncontrolled manner. To control the blowout immediate action was taken. The Company has also engaged ONGC Crisis Management Team and M/s Alert Disaster Control (Asia) Pte Ltd, Singapore to control the blowout. The blowout has been successfully controlled, the total losses/damages for the blowout is ? 449.03 crore which has been shown as Exceptional Item in the Statement of Profit and Loss for the year ended 31st March, 2021.

The National Green Tribunal, Principal Bench, New Delhi in its order dated 19th February, 2021 directed that the probable damage to the Environment and restoration measures, including measures for restoration of Dibru-Saikhowa National Park and the Maguri - Motapung Wetland should be looked into and remedial measures would be planned by a ten-member Committee headed by the Chief Secretary, Assam. The Committee headed by the Chief Secretary, Assam may make an estimate the cost of restoration of the environment. The Company shall deposit the amount so estimated to meet the expenses.

43.15.4 Provision for diminution in value of certain Overseas Investments through impairment test:

The Company during the year has assessed the impact of impairment of its overseas investments and has recognised impairment in eguity investment of ? 59.77 crore for Oil India Sweden AB, ? 1.41 crore for Oil India Cyprus Limited and ? 101.56 crore for Oil India International B.V., Netherlands and ?31.09 crore towards loan to Oil India international B.V., Netherlands and ?1.14 crore towards loan toSuntera Nigeria 205 Ltd., Nigeria. Mozambigue Area 1 project, wherein OIL has a participating interest (PI) of 4%, has secured debt commitment of US$14.90 Billion from Export Credit Agencies (ECA) Direct Loans, ECA Covered Facilities, Commercial Bank Facilities and a Loan Facility from African Development Bank. It is one of the condition precedent under project finance arrangement to provide Debt Service Undertaking (DSU) by each of the sponsors of the project. OIL as a DSU provider undertakes to pay its portion of obligation which is egual to pro-rata share of aggregate amount of advances at a given point in time based on its PI in the project. In case of OIL, the maximum amount that may be claimed by the

Senior creditors has been capped at US$ 768 Million. As on 31st March 2021, a debt of US$ 199.30 Million ( date of drawal 26th March, 2021) has been drawn from the lenders at project level. OIL''S share of liability under the DSU for its 4% share is US$7.97 Million.

43.15.5 Disclosure on COSA

Crude oil produced by the Company is sold to state owned companies. The price of such crude oil is agreed upon between the buyer and seller through Crude Offtake and Sale Agreement (COSA) based on directives of the Ministry of Petroleum & Natural Gas(MOP&NG)dated Mayl, 2009. The Company is in process of executing the COSA with Indian Oil Corporation Limited (I0CL). However, pending execution of COSA with I0CL, the price of crude oil delivered to refineries of I0CL in Assam is determined and billed on the basis of MoP&NG directive. Crude oil price for heavy crude in Rajasthan fields delivered to I0CL is determined and billed provisionally, based on 70% of the monthly average of the guoted price of brent crude as mutually agreed upon. Change in price of crude oil including heavy crude, if any, arising out of the signing of COSA with I0CL will be adjusted in the year of incidence. As per the estimates of the management, the adjustments to the final price will not be material upon execution of COSA. (Refer Note 32 for revenue from sale of crude oil).

43.15.6A Disclosure on Expiry of PPA The Company entered into Power Purchase Agreement (PPA) with Jodhpur Vidyut Vitaran Nigam Limited (JdVVNL) for supply of electricity generated for solar power plants validity of which expired on 31.03.2019. The Company vide letter no R/TS/RE/2019-80 dated 26.03.2019, submitted its reguest for extension of validity of the PPAs of both the Solar Power Plants for the remaining useful life to Rajasthan Urja Vikas Nigam Limited (RUVNL), under the Renewable Energy Certificate and Renewable Purchase Obligation Compliance Framework which isyetto befinalized.

In view of inordinate delay in response from JdVVNL in execution of the agreement, the Company has Tied a writ petition with Hon''ble Rajasthan High Court, Jaipur Bench for finalization of Power Purchase Agreement. During the hearing held on 05.11.2019, Hon''ble Rajasthan High Court, Jaipur Bench ordered that the pending disposal of the writ petition, the joint meter reading reports shall be signed, without prejudice to the rights of the either party.

The sale of renewable energy as disclosed in Note 32 of the financial statement includes, an amount of ?7.90 crore (previous year tl.Zl crore) in respect of sale of renewable power from solar power plants. The revenue

has been recognised as per the rate prescribed by the Hon''ble Rajasthan Electricity Regulatory Commission (RERC) pending renewal of the Power Purchase Agreement (PPA) with JdVVNL. Any adjustment arising on finalisation of the PPA will be accounted in the year of incidence. As per the estimates of the management, the adjustments to the final price will not be material upon execution of PPA.

43.15.6B Disclosure on expiry of PML

Hugrijan Petroleum Mining Lease (PML), one of the several PMLs operated by the Company expired on 9th January, 2021. The Company in exercise of right of regrant as per the subsisting lease deed applied to the Ministry of Petroleum & Natural Gas (MoP & NG)for re -grant of the said PML within the due date of application forre-grant.

Further, the Company has also reguested Directorate General of Hydrocarbon (DGH) with a copy to MoP & NG, reguesting for re - grant of the PML. The said PML granted to the Company started production since 1956 and there were several regrants in the past. The Company has fully complied with the pre - conditions in the past and there has been no breach of terms in the covenants, which reasonably, let the Company to believe and expect the approval of MOP&NG for re - grant of Hugrijan PML. The delay in grant of approval by the MoP& NG is a mere procedural delay.

The Company has recognised all revenues and paid all the statutory dues arising out of the production from the PML area till 31st March, 2021. The Property, plant and eguipment in respect to the said PML have been recognised in the Financial Statements as on 31st March, 2021.

43.15.7 Balance Confirmation

The Company has a system of obtaining periodic confirmation of balances from banks and other parties. Further, some balances of Trade and other receivables, Trade and other payables and Loans are subject to confirmation/reconciliation. Adjustments, if any, will be accounted for on confirmation/reconciliation of the same, which will not have a material impact.

43.15.8 Details of charge:

(a) The Company has created charge against Current Assets to the tune of ?377.45 crore (previous year ?377.45crore)for availing Bank Guarantees.

(b) Furtherthe Company has created charge against the Current Assets to the tune of ?700.00 crore (previous year?700.00 crore)for availing Cash Credit, Letter of Creditsand BankGuarantees Facility.

(a) Capital Commitments:

(i) The estimated amount of contracts remaining to be executed on Capital Account and not provided for in the accounts are ?274.60 crore( previous year ?425.47crore).

(ii) The Company''s share in the amount of contracts remaining to be executed on Capital Accounts and not provided for in the account in respect of the un-incorporated Joint Ventures is Nil (previous year Nil).

(iii) The Company''s share of Capital Commitment of in Non-Operated Joint Venture Block AAP-ON-94/1 is n.46 crore (previous year ?5.88crore).

(i) The estimated amount of contracts remaining to be executed on Revenue Account and not provided for in the accounts are ?663.45 crore (previous year ?92.56 crore).

(ii) The balance of Minimum Work Program (MWP) by the Company under Production Sharing Contracts (PSCs) / Revenue Sharing Contract (RSCs) entered for NELP / HELP / DSF Blocks with Govt, of India is ?5,033.24 crore (previous year ?5,185.14 crore). The commitment is covered by Bank Guarantee as referred in point no 43.16.1 (b)(ii).

(iii) The balance of Minimum Work Program (MWP) by the Company under Production Sharing Contracts (PSCs) entered for overseas Blocks is ?473.32 crore (previous year ?551.23 crore). The commitment is covered by Bank Guarantee as referred in pointno43.16.1(b)(iii).

43.17 The financial statements were approved by the Board of Directors on 21st June, 2021.

43.18 Figures of previous year have been regrouped/reclassified, wherever necessary, to conform to current year''s classification.


Mar 31, 2019

Note:

1. Revenue mentioned above, represents revenue from external customers. No revenue is generated from transactions with other operating segments of the same entity.

2. Revenue and expenses directly identifiable to the segments have been allocated to the relative primary reportable segments.

3. Segment revenue and expenses which are not directly identifiable to the primary reportable segments have been disclosed under others which primarily include business development services and leasing of OFC.

4. Assets and liabilities which are directly identifiable to the segments have been allocated to relative segments.

5. Due to the decision taken by Board of Directors to extend opportunity to employees including separated employees to exercise option to contribute to the "Oil India Employees'' Pension Fund" on the basis of actual salary, total actuarial deficit charged to Profit & Loss account as "Exceptional Item" during current Financial years amounting to Rs,1,026.79 crore is included in unallocated expenses.

6. Assets and liabilities which are not directly identifiable to the segments have been disclosed under unallocated.

7. There are no reportable geographical segments.

8. Information about major customers:

Company''s significant revenue comes from sales to Public Sector Undertakings (PSUs). The total sales to such PSUs during the year ended 31.03.2019 amounted to Rs,13,326 crore (corresponding year ended Rs,10.273 crore). Sales to such PSUs during the year ended contributed around 97.02% of the total sales (corresponding year ended 96.40%). The Company has received Rs,360.24 crore from Ministry of Petroleum & Natural Gas against claim recovery of Natural Gas during the year ended 31.03.2019 (corresponding year ended Rs,279.57 crore). The contribution of claim recovery of Natural Gas towards sales revenue during the year ended 31.03.2019 is 2.62% (corresponding year ended 2.62%). No other single customer contributed 10% or more to the Company''s revenue for the year ended 31.03.2019.

41.6 Information as per Indian Accounting Standard (Ind AS) 112 "Interest in Other Entities".

41.6.1 Company executed various JVCs/PSCs in India for oil and gas exploration, as Jointly Control Assets as on

31.03.2019, the details of which are given below:

41.6.2 Jointly controlled Assets in India

Note: Figures in parenthesis ( ) represent Participating Interest as on 31.03.2018.

* M/S Geo Global Resources Inc. a partner in KG-ONN-2004/1 has withdrawn their participating interest from the block. The Company is in the process of taking over the 10% participating interest of M/S Geo Global Resources Inc in the block for which final approval is pending from MOP&NG.

"Management approval for relinquishment of the block RJ-ONN-2004/2 has been obtained and submitted to DGH.

***The validity of the Block expired on October, 2016, special dispensation received for extension of Phase - I upto 30th June, 2020. However, M/s Shiv Vani having participating interest of 15% in the said block has gone into liquidation which was intimated by the Dy. Official Liquidator, Delhi High Court vide their letter reference T.C.I/SHIV-VANI 512 dated 17th January, 2018. The Company is in the process of acquisition of the 15% participating interest of M/s Shivvani in the Block.

The Company participated in Open Acreage Licensing Policy (OALP) Bid Round-1 during the period 19th January, 2018 to 2nd May

2018. The MOP & NG vide letter reference no F.No.27011/1/2017-ONG-II (48590) dated 12th September, 2018 has conveyed that the Government of India has approved to award 9 OALP blocks to the Company, which is subject to the signing and execution of Revenue Sharing Contract (RSC).

Note: Figures in parenthesis ( ) represent Participating Interest as on 31.03.2018 *Pre NELP Blocks

** Under Discover Small Field Bid 2016 *** Proposed for relinquishment (O) Operator

Note: Figures in parenthesis ( ) represent Participating Interest as on 31.03.2018

(O) Operator

* Proposed for relinquishment

(O) Operator

Note: Financial position of the following blocks applied for relinquishment (approval pending) has not been considered in above statement:

1. Block 102/4 of Libya

2. Block 86 of Libya

3. Block M-4

4. Block YEB

41.6.4 Company has sent statement of Accounts for confirmation of balances to the JVC Partners which are yet to be received.

41.7 Information as per Indian Accounting Standard (Ind AS) 115 "Revenue from contracts with customers" Disaggregation of Revenue

The Company presents disaggregated revenues from contracts with customers for the year ended March 31, 2019 by product lines. The Company believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.

41.9 Micro, Small and Medium Enterprises Development Act, 2006:

The Company has identified Micro, Small and Medium Enterprises (MSMEs) to whom the Company owes dues, which are outstanding as at 31.03.2019.

Notes:

a) For Assessment Years (AY) 2003-04 to 2014-15 appeals are pending for disposal before the Hon''ble Income Tax Appellate Tribunal (ITAT), Guwahati with respect to the Company''s claims/disallowances u/s 14A, 37, 42, 80-IB and 80-ICof the Income Tax Act, 1961, hereinafter called the Act.

b) The company has filed Appeals before the CIT (A), Dibrugarh for the AY 2015-16 and AY 2016-17 contesting the disallowances made by the Assessing Officer in the Assessment orders for the above AYs. The Hon''ble CIT (A) has passed his order for the AY 2015-16 on 25.03.2019, by confirming certain disallowances made in the Assessment. The company is in the process of filing appeal before the Hon''ble ITAT against the order of CIT (A) for the AY 2015-16.

c) The benefits claimed u/s 80-IA, 80-IB and 80-IC of the Act have not been considered to make provisions of tax in the books.

d) The resulting interest, whether receivable or payable, shall be accounted for on finalization of the matter by an appellate authority.

e) The Company''s appeals against disallowance made by the Income Tax Department of its claim of deduction u/s 80IC of the Income Tax Act,1961 ("the Act") for the Assessment years (AY) 2005-06 and 2006-07 had been decided in favour of the company by the Commissioner of Income Tax (Appeals), "CIT(A)". The order of the CIT(A) was contested by the Income Tax Department in the Income Tax Appellate Tribunal (ITAT), Guwahati where the matter is still pending for decision.

Meanwhile, the Commissioner of Income Tax had passed an order u/s 263 of the Act and recovered the amount received by the company as refund consequent to the above CIT(A)''s favourable order. The company had challenged the order passed u/s 263 by filing appeals before the Hon''ble ITAT, which was decided in favour of the company. The ITAT''s order was subsequently challenged by the Income Tax Department before the Hon''ble Guwahati High Court.

The Hon''ble Guwahati High Court has ruled in favour of the company vide its order dated 20.02.2019 by upholding the order of the Hon''ble ITAT. This has resulted in a refund of '' 930.52 Crore (including interest) from the Income Tax Department which has been received by the Company on 30.04.2019. The amount has not been accounted for in the Accounts for the year ended 31st March, 2019, pending decision of the ITAT in Appeals on merit of deduction u/s 80IC.

f) Income tax assessments up to the Assessment Year 2016-17 have been completed and a demand of Rs,288.98 crore has been raised by the Department over the period on account of certain disallowances / additions. Such disallowances / additions have not been provided for in the books as the same are likely to be deleted or may be reduced substantially on the grounds taken by the Company before the appellate authority. However, wherever demand is raised, the amount has been paid/adjusted.

g) The tax liability of the company for the Assessment year 2017-18 was calculated based on book profit determined u/s 115JB of the income Tax Act, 1961. As per the provisions of section 115JAA, the income tax paid u/s 115JB (i.e. Minimum Alternate Tax) can be carried forward up to next ten Assessment years for being utilized against tax payable under normal provisions of the Act subject to limits specified u/s 115JAA. The Company has utilized the balance MAT credit amounting to Rs,236.48 crore in determining its current tax liability for the financial year ended 2018-19 (AY 2019-20).

41.11 Disclosures as per Guidance Note on Oil & Gas Producing Activities (Ind AS):

(Prepared by the management and Auditors have placed reliance being information of technical nature)

(*) Shown to the extent of participating interest of the Company. The opening reserve of the block has been restated as per the Reserve Audit Report given by GCA.

(#) Shown to the extent of participating interest of the Company.

(*) Shown to the extent of participating interest of the Company.

Reserves are calculated in terms of Million kilo liters.

(v) Proved and Proved Developed Reserves of oil (including condensates) and gas are technically assessed and reviewed in-house at the end of each year in line with international practices. Reserves are audited by external experts at periodical intervals. For the purpose of estimation of Proved and Proved Developed Reserves, Deterministic Method is used by the company. Production pattern analysis, numbers of additional wells to be completed, application of enhanced recovery techniques, validity of mining lease agreements, agreements/MOU for sales are taken into consideration for determining reserves quantity.

41.12 Physical verification of Property, Plant and Equipment (PPE):

Physical verification of the property, plant and equipment is carried out by the Company in phased manner over the period of 3 years. The current block started from 2018-19. Physical verification of PPE carried out till 31st March, 2019 covers 66.40% of PPE in terms of value.

41.13 VAT on crude oil:

The Company had received notices for demand of Rs,1327.74 crore from Assam Value Added Tax Authority claiming VAT on sharing of under recoveries to downstream oil companies and on transportation charges of own crude oil of the financial year 2009-10 to 2012-13. The Company has contested the Demand before the Commissioner of Taxes, Assam.

The company has relied upon the decision of the Hon''ble Gujarat High Court in the case of ONGC Vs. State of Gujarat, wherein the Hon''ble Gujarat High Court had dismissed demand of VAT by State Government on the amount of under recoveries shared by ONGC to Oil Marketing Companies at the direction of MOP&NG. The decision of the Hon''ble Gujarat High Court was also upheld by the Supreme Court by dismissing the Special Leave Petition filed by the State of Gujarat.

41.14 Service Tax and GST on Royalty payment.

During the financial year 2017-18, the Company received Show Cause cum Demand Notices (SCN), from the Directorate General of Goods and Service Tax Intelligence seeking to levy service tax along with interest and penalty, on Royalty paid on Crude Oil & Natural Gas levied under Oil Fields (Regulation & Development) Act, 1948 for the states of Assam, Arunachal Pradesh and Rajasthan for the period from March, 2016 to June, 2017. The Company has made detailed representations to the Appropriate Authorities contesting such levy. Pending adjudication of the matter, the entire Service Tax amount of Rs,257.13 crore as per the SCN has been deposited by the Company under protest in May, 2018.

The demand in the SCN has been confirmed by the Joint Commissioner of CGST, Jodhpur for the state of Rajasthan vide order No. 13/ST/JDR/2019 dated 28th March, 2019. The Company is in the process of filing appeal before the higher Appellate Authority against the order passed by the above Adjudicating Authority in Rajasthan.

Further, as an abundant caution, the Company has been depositing under protest GST on Royalty paid on Crude Oil & Natural

Gas levied under Oil Fields (Regulation & Development) Act, 1948 for the states of Assam, Arunachal Pradesh and Rajasthan.

The amount deposited for the period from July, 2017 to February, 2019 is Rs,535.11crore and Rs,11.18 crore on account of GST and interest respectively. H The above amounts including the liability for the month of March, 2019 have been included in contingent liability as on 31st March, 2019.

41.15 Others :

41.15.1 As per approval of the Cabinet Committee on Economic Affairs (CCEA), an amount of Rs,215.00 crore is reimbursable by Brahmaputra Cracker and Polymers Limited (BCPL) to the Company out of the capital subsidy received from the Ministry of Chemical and Fertilizers for development of infrastructure for gas supply. An amount of Rs,69.65 crore has already been received in this regard up to the financial year 2011-12. Further, the Company has received Rs,60.00 crore towards capital cost reimbursement from BCPL on 22nd November, 2018 resulting the total receipt of Rs,129.65 (Rs,69.65 Rs,60.00) crore. In view of the reasonable assurance on receipt of the balance amount of Rs,85.35 crore based on recommendation of the Inter Ministerial Committee on Assam Gas Cracker Project, the same has been recognized as reimbursement of capital cost receivable with a corresponding credit to deferred income. The deferred income corresponding to the amount of reimbursement of capital cost receivable is recognized over the useful life of the asset from December 2014 when the related assets were commissioned. During the year ended 31st March, 2019 the Company has recognized an amount of Rs,8.04 crore as deferred income from amortization and credited to the Statement of Profit or Loss.

41.15.2 Details of charge:

(a) The Company has created charge against Current Assets to the tune of Rs,377.45 crore (corresponding period Rs,377.45 crore) for availing Bank Guarantee.

(b) Further the Company has created charge against the Current Assets to the tune of Rs,700.00 crore (corresponding period Rs,700.00 crore) for availing Cash Credit/Letter of Credit/Bank Guarantee Facility.

41.16 Other disclosure under Schedule III to the Companies Act, 2013

41.16.1 Contingent Liabilities and Commitments (to the extent not provided for)

A. Contingent Liabilities:

B. Other matters for which the Company is contingently liable: Commitments: (a) Capital Commitments:

(i) The estimated amount of contracts remaining to be executed on Capital Account and not provided for in the accounts: Rs,843.34 crore (corresponding period Rs,507.00 crore).

(ii) Company''s share in the amount of contracts remaining to be executed on Capital Accounts and not provided for in the account in respect of the un-incorporated Joint Ventures is Rs,0.07 crore (Corresponding period Rs,0.07 crore).

(iii) Company''s share of Capital Commitment of in Non Operated Joint Venture Block AAP-ON-94/1 is Rs,0.18 crore (corresponding period Rs,0.82 crore).

(b) Other Commitments:

(i) The estimated amount of contracts remaining to be executed on Revenue Account and not provided for in the accounts: Rs,122.81 crore (corresponding period Rs,575.80 crore).

(ii) Balance of Minimum Work Program Commitment (MWP) by OIL under Production Sharing Contracts (PSCs) entered for NELP Blocks with Govt. of India is Rs,1,561.98 crore (corresponding period Rs,835.21 crore). The commitment is covered by Bank Guarantee as referred in point no 41.16.1 (b) (ii).

(iii) Balance of Minimum Work Program Commitment (MWP) by OIL under Production Sharing Contracts (PSCs) entered for overseas Blocks is Rs,505.64 crore (corresponding period Rs,475.95 crore). The commitment is covered by Bank Guarantee as referred in point no 41.16.1 (b) (iii).

41.17 Figures of Previous year have been regrouped/reclassified, wherever necessary, to conform to current years classification.


Mar 31, 2018

1.1 The Company has adopted to continue with the carrying value of its Property, Plant & Equipment (PPE) - Tangible Assets, recognised as on 1st April, 2015 (transition date) measured as per the Previous GAAP and used that carrying value as its deemed cost as on the transition date.

1.2 Carrying value of Oil and Gas assets include decommissioning liabilities amounting to Rs.120.85 crore (previous year Rs.182.31 crore).

1.3 Lands for projects and drillings operations are acquired primarily through bipartite negotiation with the occupiers/ pattadars. In case, however, bipartite negotiation fails, land is acquired under relevant land laws with Government intervention. Upon successful negotiation or government order, as the case may be, consent letters are obtained from the occupiers/pattadars and surface compensation for the standing crops on the lands are settled and the same are capitalized either as Land Under Possession or as Oil & Gas assets. At the same time occupiers/pattadars are advised to submit documentary evidences in support of their legal possession of the lands. Pending submission of these documents and upon settlement of surface compensation, liability for land value is determined and capitalised under respective heads. Land cost forming part of Oil & Gas Assets is either amortized or charged off depending on discovery in the well. Land cost forming part of the Land Under Possession is not amortized. The total land in the possession of the Company is segregated as appended below:

2.1 Capital work in progress includes capital goods in transit Rs.230.18 crore (previous year Rs.383.90 crore).

2.2 *Oil & Gas Assets include decommissioning liabilities amounting to Rs.12.01 crore (previous year Rs.9.68 crore).

3.1 Exploration and Evaluation assets include decommissioning liabilities amounting to Rs.30.73 crore (previous year Rs.19.30 crore).

4.1 Right of Use (ROU) to lay pipelines does not bestow ownership of land upon the Company. Hence, ROU is treated as Intangible Assets.

5.1 The aggregate carrying value of unquoted investments is Rs.12,943.61 crore (previous year Rs.10,742.71 crore).

5.2 The aggregate amount of quoted investments is Rs.9,236.56 crore (previous year Rs.10,058.42 crore).

5.3 The aggregate market value of quoted investments is Rs.9,326.78 crore (previous year Rs.10,150.44 crore).

5.4 The aggregate amount of impairment in value of investment is Rs.202.22 crore (previous year Rs.174.00 crore).

5.5 The details of Equity investments are as under: -

5.6 Mode of valuation of investments is given in Note no 1.14 & 1.15.

5.7 Advance against acquisition of equity shares pending allotment:

5.8 Fair Value of Financial Guarantee includes:

6.1 Loans to employees include amount due from whole time Directors and Other Officers of the Company are as under:

6.2 Loans to related parties include:

* As on 31.03.2018, the Company has entered into three interest bearing Facility Agreements with Oil India International BV to extend total Rs.387.81 crore (USD 59 million) and as on balance sheet date the total amount withdrawn under the agreements is Rs.382.56 crore (USD 58.2 million).

Out of total amount withdrawn, Rs.7.89 crore (USD 1.2 million) is included in “Loan to OIIBV” disclosed in Current Financial Assets: Loan under Note-15.

** The interest on USD 3.2 million revised to 3 months LIBOR plus 13.65% w.e.f 01.01.2018 on account of non payment of USD 1.2 million as on 31.12.2017.

* As on 31.03.2018, the total receivables consisting of principal and interest from M/s Suntera Nigeria 205 Limited is Rs.187.44 crore as against the fair value assessment of Rs.121.53 crore. Accordingly an amount of Rs.65.91 crore has been taken as allowances for bad and doubtful loans as of 31.03.2018.

7.1 Secuirty deposits include deposits with Appelate Authorities, other Governement entities and deposits made for office facilities.

8.1 The cost of inventories recognised as an expense during the year in respect of continuing operations was Rs.185.18 crores (previous year Rs.198.55 crores).

8.2 Mode of valuation of inventories is given in Note no 1.12.0.

9.1 Trade receivables primarily comprise of government related entities. These government related entities have very strong capacity to meet their obligations. The Company allows credit period of 15-30 days to its customers for payment. Normally, payments are made by the customers on or before the due dates. The management does not anticipate any payment default from these customers other than those already provided for. Hence, as per the prevailing circumstances, management does not consider the increase in credit risk from the time of initial recognition of trade receivables and at the reporting date as significant.

9.2 The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The aggregate percentage of provision against trade receivables outstanding for more than six months is 14.04% as at 31.03.2018 (as at 31.03.2017 11.83%).

10.1 If the dividend has not been paid or claimed within 30 days from the date of its declaration, the Company is required to transfer the total amount of the dividend which remains unpaid or unclaimed, to a special account maintained by the Company in a scheduled bank as “Unpaid Dividend Account”. The unclaimed dividend lying with the Company is required to be transferred to the Investor Education and Protection Fund (IEPF), administered by the Central Government after a period of seven years of its declaration.

11.1 Terms/rights attached to equity shares: The Company has only one class of equity shares having par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share and carry a right to dividend.

11.2 Details of shareholders holding more than 5% shares in the Company are as under:

11.3 36,06,81,573 Equity shares of Rs.10 each allotted as fully paid up bonus shares in the FY 2012-13.

11.4 20,03,78,652 Equity shares of Rs.10 each allotted as fully paid up bonus shares in the FY 2016-17.

11.5 37,83,01,304 Equity shares of Rs.10 each allotted as fully paid up bonus shares in the FY 2017-18 on 3rd April, 2018.

11.6 As per the approval of Board of Directors in its meeting held on 20th March, 2017, the Company has completed the buy-back of 4,49,12,000 fully paid up equity shares at the price of Rs.340 per equity share, on 15th June, 2017. After the buy back, the share capital of the Company stands decreased from ‘801.51 crore to Rs.756.60 crore.

11.7 The Board of Directors has recommended a final dividend of Rs.1.00 per share which is subject to the approval of the shareholders in the ensuing Annual General Meeting.

12.1 Nature and purpose of reserves:

(a) Securities Premium Reserve: Security Premium Reserve is created when securities are issued at premium. This reserve may be utilised for issue of fully paid bonus shares and for any other purpose as permitted under the provisions of the Companies Act, 2013.

(b) Foreign Currency Monetary Item Translation Difference Account: Exchange difference on long-term foreign currency monetary items are accumulated in a Foreign Currency Monetary Item Difference Account and amortised over the balance period of such long term foreign currency monetary item in continuance of policy as permitted under D13AA of Ind AS 101.

(c) Debenture Redemption Reserve: Debenture Redemption Reserve is created out of the profits of the Company, available for payment of dividend and the amount credited to such account shall not be utilised by the Company except for the redemption of debentures.

(d) Capital Redemption Reserve: Capital Redemption Reserve is created out of the Securities Premium Reserve, a sum equal to nominal value of the fully paid up own equity shares purchased by the Company during the period. The amount credited to such account may be applied in paying up unissued shares of the Company to be issued to members of the Company as fully paid bonus shares.

(e) General Reserve: The General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes.

12.2 Other Comprehensive Income: It includes the cumulative gains/losses arising on measurement of equity insruments designated at fair value through Other Comprehensive Income. On disposal of such equity instruments the net amount shall be reclassified to retained earnings. It also includes remeasurement of defined benefit plans due to change in actuarial assumptions.

12.3 The figures in US$ in Note 21.1 and Note 21.2 represent the original borrowings availed from the respective lenders.

13.1 Refer to note no. 41.8 for dues to Micro, Small and Medium Enterprises.

14.1 Statutory Liabilities for the previous year includes Rs.304.59 crore on account of increase in gratuity ceiling from Rs.10 Lakhs to Rs.20 Lakhs as per DPE guidelines.

15.1 As per the directives of MOP&NG, Crude Oil price calculation is based on the monthly average price of benchmarked International Basket of Crude Oil which is further adjusted for quality differential.

15.2 LPG prices are governed as per PAHAL (DBTL) Scheme, 2014 issued by MOP&NG vide letter No. 20019/101/2014-LPG dated 1st April, 2015.

15.3 Natural Gas price is as notified by MOP&NG and applicable to operating areas of the Company. Subsidy extended to the eligible customers in North East I ndia is reimbursed by Government of I ndia and shown as Other Operating Revenue.

15.4 Company is holding 77,172 (as on 31.03.2017 61,042) numbers of Renewable Energy Certificates (REC) as on 31.03.2018. The Floor Price of REC in the Energy Exchange on 31.03.2018 was Rs.1000 (as on 31.03.2017 Rs.3500) per REC.

16.1 Dividends from equity instruments designated at FVTOCI relate to investment held at the end of the year. There was no dividend income relating to investments derecognised during the year.

16.2 Interest Income from financial assets measured at amortised cost includes an amount of Rs.39.43 crore (previous year Rs.42.75 crore) interest income from the loan given to related parties.

17.1 Pursuant to directive from Government of India, the Company has raised overseas borrowings for acquiring 4% participating interest in Rovuma 1 offshore block in Mozambique. In the opinion of the Management, there is no explicit restriction by Governement of India with regard to repayment & servicing of such overseas borrowings from domestic resources of the Company. Interest servicing of Rs.319.29 crore (previous year Rs.322.07 crore) on such overseas borrowings have been met from domestic resources. The Company has informed MoP&NG that servicing of interest on the external commercial borrowings raised for financing of above transaction is being done from domestic resources. Approval of MOP&NG is awaited.

18.1 Statutory levies represent Royalty Rs.1493.94 crore (previous year Rs.1297.14 crore) and Cess Rs.1435.09 crore (previous year Rs.1231.53 crore).

19.1. Exceptional items represents the differential royalty for the period from February 2014 to December, 2016 amounting to Rs.1151.73 crore paid to government of Assam and Arunachal Pradesh as per GOI directives and charged to the Statement of Profit and Loss during the previous year ended 31st March, 2017.

20.1 Earnings per share for the year ended 31st March, 2018 has been computed on the basis of weighted average number of shares outstanding during the year considering :

i) Buy back of 449,12,000 shares completed on 15th June, 2017.

ii) Issue of 37,83,01,304 number of bonus shares as per approval of the shareholders on 21st March, 2018 allotment of which was made on 3rd April, 2018.

20.2 Earnings per share for the year ended 31st March, 2017 has been restated considering the bonus issue of shares as stated in point 39.1 (ii).

21. Financial Instruments 40.1.1 Capital Management

The Company manages its capital to ensure that Company will be able to continue as going concern while maximizing the return to stakeholders through the optimization of the capital structure.

The capital structure of the Company consists of total equity and debt. The Company is not subject to any externally imposed capital requirements except the guidelines issued by Government of India.

The Company’s management reviews the capital structure on a regular basis. As part of this review, the management considers the cost of capital and the risks associated with each class of capital. The company aims to maintain gearing ratio target around 45% at Group level. The gearing ratio of the company is provided below.

21.1 Financial Risk Management

21.1.1 Objective

The Company monitors and manages the financial risks relating to the operations of the Company by analysing exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk.

21.1.2 Commodity Risk

Crude oil and Naural gas price of the company are linked to international prices of crude oil/natural gas. In case of any upward or downward movement in the international prices of crude oil/natural gas, the revenue of the company get affected correspondingly. Therefore, the company is exposed to commodity price risk.

21.1.3 Market Risk

The company activities exposes it primarily to the financial risks of changes in foreign currency exchange rates, interest rate risk, market exposures that are measured using senstivity analysis.

21.2 Foreign Currency Risk Management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

The price of crude oil and natural gas produced and sold by the company are linked to US Dollars, though billed and received in INR. Hence any movement in the USD against INR has direct impact on the future cash flows of the company on account of sale of these products.

21.2.1 Foreign Currency Sensitivity Analysis

The Company is mainly exposed to the currency of United States of America (USD).

The following table details the Company’s sensitivity to a 5% increase and decrease in the INR against USD.The sensitivity analysis includes only outstanding foreign currency denominated monetary items as at period end and adjusts their translation at the period end for a 5% change in foreign currency rates.

21.2.2 Forward foreign exchange contracts

The Company has entered into a forward foreign exchange contracts during the reporting period. However, there is no forward foreign exchange contract oustanding as on balance sheet date.

21.3 Interest rate risk management

The Company is exposed to interest rate risk because the Company borrows funds at both fixed and floating interest rates and make investment in mutual funds. Periodical interest rate payable on floating interest loan or receivable on mutual fund investment that are linked to market rates.The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings. The company policy allows to use forward interest rate agreements (FRA’s) or interest rate swap as per the rquirements

The Company’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management Refer note 40.8.

21.3.1 Interest Rate Sensitivity Analaysis

The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. The analysis is prepared based on the floating interest rate assets and liabilities, assuming that the amount outstanding at the end of the reporting period was outstanding for the whole year.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company’s:

Loan Given

- Profit and Equity for the year ended March 31, 2018 would increase / decrease by Rs.1.25 crores (for the year ended March 31, 2017: increase / decrease by Rs.1.18 crores).

Loan Taken

- Profit and Equity for the year ended March 31, 2018 would decrease/increase by Rs.8.06 crores (for the year ended March 31, 2017: decrease/increase by Rs.8.02 crores).

21.4 Price risk

The Company is exposed to equity price risks arising from equity investments in Indian Oil Corporation Limited.

Exposure in mutual funds

The company also manages short term surplus fund through investments in debt mutual fund plans regulated by Securities Exchange Board of India(SEBI). The NAV declared by Asset Management Companies(AMC) has generally remained constant on the mutual funds plan taken by the company. However, if the NAV of the fund is increased/decreased by 5%, the senstivity analysis has been mentioned below:

- Profit and Equity for the year ended March 31, 2018 would decrease/increase by Rs.14.22 crores (for the year ended March 31, 2017: decrease/increase by Rs.31.39 crores).

21.4.1 Equity Price Sensitivity Analysis

The sensitivity analyses below have been determined based on the exposure to price risks at the end of the reporting period.

If equity prices had been 5% higher/lower:

- Other comprehensive income and Equity for the year ended March 31, 2018 would increase/decrease by Rs.385.90 crores (for the year ended March 31, 2017 would increase/decrease by Rs.422.88 crores.

21.5 Credit Risk Management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company regularly monitors its counterparty limits by reviewing the outstanding balance and ageing of the same.

21.6 Liquidity Risk Management

Liquidity risk is the risk that suitable sources of funding for the Company’s business activities may not be available.

The Company manages liquidity risk by monitoring its forecast and actual cash flows, maintaining adequate reserves and by matching the maturity profiles of financial assets and liabilities.

21.6.1 Credit Rating of the Company

Management believes that it has access to sufficient debt funding sources (capital market), and to undrawn committed borrowing facilities to meet foreseeable requirements. The Company’s financial prudence is reflected in the strong credit rating ascribed by ratings agencies as below:

21.7 Fair Value Measurement

This note provides information about how the Company determines fair values of various financial assets and financial liabilities.

21.7.1 Fair value of the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis

Some of the Company’s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used).

Note 1 : Fair value determined on the basis of NAV declared by repective Asset Management Companies Note 2 : Fair value on the basis of price provided by respective Insurance companies Note 3 : Fair value on the basis of quoted price from NSE

Note 4 : Fair value on the basis of book value which closely approximates the fair value

21.7.2 Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required)

Except as detailed in the following table, the company considers that the carrying amounts of financial assets and financial liabilities recognised in the consolidated financial statements approximate their fair values.

Fair value hierarchy

Level 1-Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2-Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

The fair values of the financial assets and financial liabilities included in the level 2 categories above have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counter parties.

The Fair Value of current financial assets and current financial liabilities are approximately equals to their carrying value.

22.1 Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 - Employee Benefits:

22.1.1 Defined Contribution Plans

The Company’s contribution to Provident Funds and Oil India Superannuation Benefit Scheme Fund (OISBSF) for employees and executives are as follows:

22.1.2 Defined Benefit Plans

The various Benefit Plans which are in operation are Oil India Gratuity Fund (OIGF), Oil India Employee’s Pension Fund (OIEPF), Oil India Pension Fund (OIPF), Leave Encashment Fund, Post-Retirement Medical Benefit and Long Service Award. The present value of the obligation is determined based on actuarial valuation made at the end of the financial year using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation.

The amount recognised in the Balance Sheet as the present value of the defined benefit obligation is net of the fair value of plan assets at the Balance Sheet date.

These plans typically expose the Group to actuarial risks such as: investment risk , interest rate risk, longevity risk and salary risk.

In respect of the plans in India, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at March 31, 2018 by Mr Bhudev Chatterjee, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation and the related current service cost and past service cost was measured using the projected unit credit method.

Note: 1.Revenue and expenses directly identifiable to the segments have been allocated to the relative primary reportable segments. 2.Segment revenue and expenses which are not directly identifiable to the primary reportable segments have been disclosed under others which primarily includes business development services, leasing of OFC.

3. Assets and liabilities which are directly identifiable to the segments have been allocated to relative segments.

4. Assets and liabilities which are not directly identifiable to the segments have been disclosed under unallocated.

5. There are no reportable geographical segments.

6. Information about major customers:

Company’s significant revenue comes from sales to Public Sector Undertakings (PSUs). The total sales to such PSUs during the year ended 31.03.2018 amounted to Rs.10,273 crore (corresponding year ended Rs.9,103 crore). Sales to such PSUs during the year ended contributed around 96.40% of the total sales (corresponding year ended 95.72 %). The Company has received Rs.279.57 crore from Ministry of Petroleum & Natural Gas against claim recovery of Natural Gas during the year ended 31.03.2018 (corresponding year ended Rs.310.07 crore). The contribution of claim recovery of Natural Gas towards sales revenue during the year ended 31.03.2018 is 2.62% (corresponding year ended 3.26%). No other single customer contributed 10% or more to the Company’s revenue for the year ended 31.03.2018

22.3 Information as per Indian Accounting Standard (Ind AS) 23 “Borrowing Costs”

Borrowing cost capitalized during the year is NIL (Previous year NIL).

22.4 Information as per Indian Accounting Standard (Ind AS) 24 “Related Party Disclosures”

22.4.1 Related party relationships

Name of related parties and description of relationship are as under:

22.5 Information as per Indian Accounting Standard (Ind AS) 112 “Interest in Other Entities”.

22.5.1 Company executed various JVCs/PSCs in India for oil and gas exploration, as Jointly Control Assets as on 31.03.2018, the details of which are given below:

Note: Figures in parenthesis ( ) represent Participating Interest as on 31.03.2017.

*M/S Geo Global Resources Inc. holding 25% participating interest in RJ-ONN-2004/2 and 10% participating interest in KG-ONN-2004/1 has withdrawn from the blocks and the Company is in the process of taking over the said participating interests for both the Block for which final approval is pending from MOP&NG.

** Proposed for relinquishment by the Operating Committee during the financial year 2016-17.

*** The validity of the Block expired on October, 2016, special dispensation received for extension of Phase - I upto 30th June, 2020. However, M/s Shiv Vani having participating interest of 15% in the said block has gone into liquidation which was intimated by the Dy. Official Liquidator, Delhi High Court vide their letter reference T.C.I/SHIV-VANI 512 dated 17th January, 2018. The Company is in the process of acquisition of the 15% participating interest of M/s Shiv Vani in the Block.

Note : Financial position of the following blocks applied for relinquishment (approval pending) in previous year has not been considered in above statement:

1. AA-ONN-2009/4 - Relinquished during the financial year 2017-18

2. AN-DWN-2009/3

3. RJ-ONN-2005/2

4. CY-OSN-2009/2

5. MB-OSN-2010/2

Note: Figures in parenthesis ( ) represent Participating Interest as on 31.03.2017

*Pre NELP Blocks

** Under Discover Small Field Bid 2016 *** Proposed for relinquishment

(O) Operator

Note : Financial position of the following blocks applied for relinquishment (approval pending) in previous year has not been considered in above statement:

1. AA-ONN-2009/1

2. AN-DWN-2009/2

3. AS-CBM-2008/IV

4. MN-OSN-2000/2 - Relinquished during the financial year 2017-18

5. KG-OSN-2009/4

Note: Figures in parenthesis ( ) represent Participating Interest as on 31.03.2017

(O) Operator

* The Company has intimated the Myanmar Oil & Gas Enterprise (MOGE) for termination of PSC for two shallow offshore Blocks, M-4 & YEB. The MOGE has accepted the termination proposal of the Company and has advised the Consortium Partners to settle the issues on the financial obligations, title of assets and transfer of G&G data collected from MOGE in order to finalise the Termination Agreement.

Note: Financial position of the following block applied for relinquishment (approval pending) in previous year has not been considered in above statement:

1. Block 102/4 of Libya

2. Block 86 of Libya

3. Block M-4

4. Block YEB

22.5.2 Company has sent statement of Accounts for confirmation of balances to the JVC Partners which are yet to be received.

Notes:

a) For Assessment Years (AY) 2003-04 to 2014-15 appeals are pending for disposal before the Hon’ble Income Tax Appellate Tribunal (ITAT), Guwahati with respect to the Company’s claims/disallowances u/s 14A, 37, 42, 80-IB & 80-IC of the Income Tax Act, 1961, hereinafter called the Act.

b) The benefit u/s 80-IA, 80-IB and 80-IC of the Act has not been considered to make provisions of tax in the books.

c) The resulting interest, whether receivable or payable, shall be accounted for on finalization of the matter by an appellate authority.

d) Income tax assessment up to the Assessment Year 2014-15 has been completed and a demand of Rs.205.05 crore has been raised by the Department over the period on account of certain disallowances / additions. Such disallowances / additions have not been provided for in the books as the same are likely to be deleted or may be reduced substantially on the grounds taken by the Company before the appellate authority. However, wherever demand is raised, the amount has been paid.

e) The Current Tax figure of the year includes ‘ (45.60) crore due to brought forward losses of FY 2016-17 of Rs.131.76 crore.

f) The tax liability of the company for the Assessment year 2017-18 was calculated based on book profit determined u/s 115JB of the income Tax Act, 1961. As per the provisions of section 115JAA, the income tax paid u/s 115JB (i.e. Minimum Alternate Tax) can be carried forward up to next ten Assessment years for being utilized against tax payable under normal provisions of the Act subject to limits specified u/s 115JAA. The Company has utilized the entire MAT credit amounting to Rs.337.39 crore in determining its current tax liability for the financial year ended 2017-18 (AY 2018-19).

g) Subject to the approval of the prescribed authority, Department of Scientific and Industrial Research, Company has claimed weighted deduction u/s 35(2AB) of the Income Tax Act, 1961, for the eligible amount incurred in the following respective year for capital and revenue expenditure on scientific research on in-house approved research and development facilities:

(v) Proved and Proved Developed Reserves of oil (including condensates) and gas are technically assessed and reviewed in-house at the end of each year in line with international practices. Reserves are audited by external experts at periodical intervals. For the purpose of estimation of Proved and Proved Developed Reserves, Deterministic Method is used by the company. Production pattern analysis, numbers of additional wells to be completed, application of enhanced recovery techniques, validity of mining lease agreements, agreements/MOU for sales are taken into consideration for determining reserves quantity.

22.6 Physical verification of Property, Plant and Equipment (PPE):

Physical verification of the property, plant and equipment is carried out by the Company in phased manner over the period of 5 years. The current block started from 2013-14. Physical verification of PPE carried out till 31st March, 2018 covers 94.29% of PPE in terms of value.

22.7 VAT on crude oil:

The Company has received notices for demand of Rs.1349.71 crore from Assam Value Added Tax Authority claiming VAT on sharing of under recoveries to downstream oil companies and on transportation charges of own crude oil of the financial year 2009-10 to 201213. The Company has paid Rs.21.97 crore in April, 2016 on account of VAT on transportation of crude oil for the said period. However, the demand for Rs.1327.73 crore, being VAT on sharing of under-recoveries has been contested by the Company before the Commissioner of Taxes, Assam. In a similar matter, ONGC vs State of Gujarat, the Hon’ble Gujarat High Court has passed order against applicability of VAT on the amount of under recoveries shared. The decision of the Hon’ble Gujarat High Court has been challenged by the State of Gujarat in the Hon’ble Supreme Court of India through a special Leave Petition. The Hon’ble Supreme Court of India has upheld the decision of the Hon’ble Gujarat High Court dismissing the Special Leave Petition of State of Gujarat.

22.8 Service Tax and GST on Royalty payment.

The Company has received show cause cum demand notices from the Directorate General of Goods and Service Tax Intelligence for Rs.257.13 crore towards service tax on Royalty for Assam & Arunachal Pradesh and Rajasthan for the period March, 2016 to June, 2017, against which the Company has made detailed representations to the Appropriate Authorities. Pending adjudication of the matter, the entire Service Tax amount has been deposited by the Company under protest in May, 2018.

The Company has also deposited under protest in May 2018, GST on Royalty payment for the period July, 2017 to March, 2018 amounting to Rs.209.17 crore and Rs.11.18 crore as interest thereon. The above amounts have been disclosed in the financial statement as contingent liability as on 31.03.2018.

22.9 Crackers and Polymer :

22.9.1 As per approval of the Cabinet Committee on Economic Affairs (CCEA), an amount of Rs.215.00 crore is reimbursable by Brahmaputra Cracker and Polymers Limited (BCPL) to the company out of the capital subsidy received from the Ministry of Chemical and Fertilizers for development of infrastructure for gas supply. An amount of Rs.69.65 crore has already been received in this regard up to the financial year 2011-12. In view of the reasonable assurance on receipt of the balance amount of Rs.145.35 crore based on recommendation of the Inter Ministerial Committee on Assam Gas Cracker Project, the same has been recognised as reimbursement of capital cost receivable with a corresponding credit to deferred income. The deferred income corresponding to the amount of reimbursement of capital cost receivable is recognized over the useful life of the asset from December 2014 when the related assets were commissioned. During the financial year 2017-18 the Company has recognized an amount of Rs.7.62 crore as deferred income from amortization and credited to the statement of Profit or Loss.

22.9.2 Details of charge:

(a) The Company has created charge against Current Assets to the tune of Rs.377.45 crore (corresponding period Rs.377.45 crore) for availing Bank Guarantee.

(b) Further the Company has created charge against the Current Assets to the tune of Rs.700.00 crore (corresponding period Rs.700.00 crore) for availing Cash Credit/Letter of Credit/Bank Guarantee Facility.

22.10 Other disclosure under Schedule III to the Companies Act, 2013

22.10.1 Contingent Liabilities and Commitments (to the extent not provided for)

(i) Contingent Liabilities:

(a) Claims against the Company not acknowledged as debts:

(c) Other matters for which the Company is contingently liable:

Commitments:

(a) Capital Commitments:

(i) The estimated amount of contracts remaining to be executed on Capital Account and not provided for in the accounts: Rs.507.00 crore (corresponding period Rs.366.59 crore).

(ii) Company’s share in the amount of contracts remaining to be executed on Capital Accounts and not provided for in the account in respect of the un-incorporated Joint Ventures is Rs.0.07 crore (Corresponding period Rs.9.91 crore).

(iii) Company’s share of Capital Commitment of in Non Operated Joint Venture Block AAP-ON-94/1 is ‘0.82 crore (corresponding period Rs.29.92 crore).

(b) Other Commitment:

(i) The estimated amount of contracts remaining to be executed on Revenue Account and not provided for in the accounts: Rs.575.80 crore (corresponding period Rs.35.40 crore).

(ii) Balance of Minimum Work Program Commitment (MWP) by OIL under Production Sharing Contracts (PSCs) entered for NELP Blocks with Govt. of India is Rs.835.21 crore (corresponding period Rs.861.88 crore). The commitment is covered by Bank Guarantee as referred in point no 41.15.1 (b) (ii).

(iii) Balance of Minimum Work Program Commitment (MWP) by OIL under Production Sharing Contracts (PSCs) entered for overseas Blocks is Rs.475.95 crore (corresponding period Rs.378.03 crore). The commitment is covered by Bank Guarantee as referred in point no 41.15.1 (b) (iii).

22.11 Figures of Previous year have been regrouped/reclassified, wherever necessary, to conform to current years classification.


Mar 31, 2017

1 The aggregate amount of unquoted investments is Rs, 1149.26 crore (as at 31.03.2016 Rs, 353.97 crore and as at 0l.0A.20l5 Rs, 376.25 crore)

2 Mode of valuation of investments is given in Note no 1.15.1.1.

3. Trade receivables primarily comprise of government related entities. These government related entities have very strong capacity to meet their obligations. The Company allows credit period of 15-30 days to its customers for payment. Normally, payments are made by the customers on or before the due dates. The management does not anticipate any payment default from these customers other than already provided for. Hence, as per the prevailing circumstances, management does not consider the increase in credit risk from the time of initial recognition of trade receivables and at the reporting date as significant.

4. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The aggregate percentage of provision against trade receivables outstanding for more than six months is 11.83% as at 31.03.2017 (as at 31.03.201610.60% and as at 01.04.2015 7.55%).

5. If the dividend has not been paid or claimed within 30 days from the date of its declaration, the Company is required to transfer the total amount of the dividend which means remain unpaid or unclaimed, to a special account to be opened by the Company in a scheduled bank to be called "Unpaid Dividend Account" the unclaimed dividend lying with companies is required to be transferred to the Investor Education and Protection Fund (IEPF), administered by the Central Government after a period of seven years of its declaration.

6. 36,06,81,573 Equity shares of Rs, 10 each allotted as fully paid up bonus shares in the FY 2012-13.

7. 20,03,78,652 Equity shares of Rs, 10 each allotted as fully paid up bonus shares in the FY 2016-17.

8. The Board of Directors in its meeting dated March20, 2017 approved the buyback of 4,49,12,000 equity shares of Rs, 10 each at a price of Rs,340 per equity share and the same is in process.

9. Terms/rights attached to equity shares: The Company has only one class of equity shares having par value of Rs,10 per share. Each holder of equity shares is entitled to one vote per share and carry a right to dividend.

10. The Board of directors has recommended a final dividend of Rs,4.75 per share which is subject to the approval of the shareholders in the ensuing Annual General Meeting over and above the interim dividend of Rs, 9.50 per share paid as interim dividend.

11. Nature and purpose of reserves:

(a) General Reserve: The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes.

(b) Securities Premium Reserve: Security Premium Reserve is created when securities are issued at premium. This reserve may be utilized for issue of fully paid bonus shares and for any other purpose as permitted under the provisions of the Companies Act.

(c) Debenture Redemption Reserve: - Debenture Redemption Reserve is created out of the profits of the company available for payment of dividend and the amount credited to such account shall not be utilized by the company except for the redemption of debentures.

(d) Foreign Currency Monetary Item Translation Difference Account: Exchange difference on long-term foreign currency monetary items are accumulated in a Foreign Currency Monetary Item Difference Account and amortized over the balance period of such long term foreign currency monetary item in continuance of policy as permitted under D13AA of Ind AS 101.

(f) Items of OCI: This reserve represents the cumulative gains and losses arising on measurement of equity instruments designated at fair value through other comprehensive income net of amounts transferred to retained earnings on disposal of such instruments. This also includes remeasurement of defined benefit plans due to change in actuarial assumptions.

12. Bonds represent

(i) 5.375% Notes Rs, 3250.42 crore (USD 500 million) {March 31, 2016 : Rs, 3320.98 crore (USD 500 million); April 1, 2015 : Rs, 3134.62 crore (USD 500 million)} Reg S Bonds issued on 17.04.2014, payable on the date falling 10 years from the date of issue.

(ii) 3.875% Notes Rs, 3264.02 crore (USD 500 million) {March 31, 2016 : Rs, 3333.80 crore (USD 500 million); April 1, 2015 : Rs, 3145.68 crore (USD 500 million)} Reg S Bonds issued on 17.04.2014, payable on the date falling 5 years from the date of issue.

13. External Commercial Borrowings represent

(i) Syndication loan of Rs, 808.01 crore (USD 125 million) {March 31, 2016 : Rs, 822.79 crore (USD 125 million); April 1, 2015 : Rs, 426.70 crore (USD 70 million)} availed from banks drawl commencing from 06.01.2015 repayable on the date falling five years from the average date of drawl i.e. 22.03.2015 at an interest rate of 1 month LI BOR 1.04%.

(ii) Syndication loan of Rs, 1625.08 crore (USD 250 million) {March 31,2016: Rs, 1655.27 crore (USD 250 million); April 1, 2015: Rs, 1557.64 crore (USD 250 million)} drawn from banks on 26.12.2013 repayable on the date falling five years from the date of drawl at an interest rate of 3 month LI BO R 1.18%.

14. The figure in USD in Note 21.1 and Note 21.2 represents the original borrowings availed from the respective lenders.

15. Provision for employee benefits represents defined benefit plans. The figure represents Leave encashment Rs, 149.77 crore (March 31,2016: Rs, 180.91 crores; April 1, 2015 : Rs, 183.58 crores). Post retirement medical benefit Rs, 125.26 crore (March 31, 2016 : Rs, 123.19 crores; April 1,2015:Rs, 115.90 crores) and Long service award Rs, 31.99 crore (March 31,2016:Rs, 30.10 crores; April 1,2015:Rs, 30.77 crores).

16.Refer to note no. 40.7 for dues to Micro, Small and Medium Enterprises.

17. Statutory Liabilities includes liability on account of Gratuity for Rs, 304.59 crore (March 31,2016: Rs, 15.27 crores; April l, 2015: Rs, 7.94 crores).

18. VAT &CST are paid on provisional basis pending assessment. Such provisional payment of VAT&CST of Rs, 22.77 crore in respect of earlier years is adjusted with Statutory Liability.

19. The figure of Provision for employee benefits represents Leave encashment Rs, 87.78 crore (March 31,2016: Rs, 34.76 crores; April 1,2015: Rs,33.7l crores). Post retirement medical benefit Rs, 38.87 crore (March 31, 2016 : Rs, 23.46 crores; April l, 2015 : Rs, 22.08 crores). Long service award Rs, 24.66 crore (March 31, 2016 : Rs, 17.54 crores; April l, 2015: Rs, 14.78 crores) & provision against ex-gratia bonus Rs, 10.79 crore (March 31,2016: Rs, 7.68 crores; April 1,2015: Rs,4.59 crores).

20. Provision has been made towards cost of non-fulfillment of Minimum Work Programme (MWP) payable as per terms of the Production Sharing Contract (PSC) of Blocks.

21. As per directive of MOP&N G, Crude Oil price calculation is based on the monthly average price of benchmarked International Basket of Crude Oil which is further adjusted for quality differential. As per directive of MOP&NG, discount is allowed on the sale of crude oil and LPG.

22. LPG price are governed as per the PAHAL (DBTL) scheme, 2014 issued by MoP&NG vide letter no. P-20019/101/2014-LPG dated 1st April 2015.

23. Natural Gas price is as notified by MOP&NG and applicable to operating areas of the Company. Subsidy extended to the eligible customers in North East India is reimbursed by Government of India and shown as Other Operating Revenue.

24. In terms of decision of Government of India (GOI), the Company has shared under-recoveries of Oil Marketing Companies (OMCs) on price sensitive products for the period ended by extending discount in the prices of Crude Oil based on the rates of discount communicated by Petroleum Planning and Analysis Cell (PPAC), Ministry of Petroleum and Natural Gas (MoP&NG). Sale values of Crude Oil are shown net of such discount of Nil (PreviousyearRs, 155.06 crore).

25. Company is holding 61,042 (as on 31.03.2016 44,881) numbers of Renewable Energy Certificates (REC) as on 31.03.2017. The Floor Price of REC in the Energy Exchange on 31.03.2017 was Rs, 3500 per REC. The Floor Price of REC in the Energy Exchange on 01.04.2017 was Rs, 1000 per REC.

26. All dividends from equity instruments designated at FVTOCI relate to investment held at the end of the financial year. There was no dividend income relating to investments derecognized during the financial year.

27. Interest Income from financial assets measured at amortized cost includes an amount of Rs, 42.75 crore (Corresponding previous year Rs,9l.27 crore) interst income from the loan given to related parties.

28. Pursuant to directive from Government of India, the Company has raised overseas borrowings for acquiring 4% participating interest in Rovuma l offshore block in Mozambique. In the opinion of the Management, there is no explicit restriction by the competent authority with regard to repayment and servicing of such overseas borrowings from domestic resources of the Company. Interest servicing of Rs,322.07 crore (Previous year Rs,316.20 crore) on such overseas borrowings have been met from domestic resources. The Company has informed MoP&NG that servicing of interest on the external commercial borrowings raised to financing of above transaction is being done from domestic resources as the Company does not have any earnings abroad at present. Approval of MOP&NG is awaited.

29. Government of Assam based on a claim from Director of Geology and Mining, had filed a writ petition in the Hon''ble Gauhati High Court for payment of differential royalty of Rs,7,224.20 crore on post and pre-discounted sale price of crude oil for the period from 2008-09 to 2013-14 which was pending for adjudication. The Company was paying royalty on post discounted price based on instructions issued by MOP&NG and in line with Oil Fields (Regulation and Development) Act, 1948 and subsequent notifications thereof and hence did not consider the claim as liability. The matter of payment of onshore royalty at pre-discounted prices was examined by MOP&NG based on the interim decision of the Hon''ble Supreme Court dated 13th February 2014 and accordingly MOP&NG intimated vide letter dated 15th July, 2016 to pay royalty at rediscount prices effective from 1st February 2014, pending outcome of Special Leave to Appeal (Civil) No 1596/2014 filed by ONGC Ltd. before the Hon''ble Supreme Court against Gujarat High Court''s order. The amount of demand for differential royalty up to 31.12.2016 including interest thereon aggregating to Rs,10405.60 Crore was considered as contingent liability by the Company. Following the order of the MOP&NG dated 15th July, 2016, the Company has paid to the respective State Govt an amount of Rs,1151.73 crore being the differential amount of royalty which was shown as deposit. During the year a settlement between GOI, Government of Assam and Government of Arunachal Pradesh was made in which GOI has agreed to absorb the differential royalty for the period from 2008-09 to 2013-14. Accordingly, the differential royalty for period from February 2014 to December, 2016 amounting to Rs, 1151.73 crore has been charged to Statement of Profit & Loss in the quarter and year ended 31.03.2017 and is shown under "Exceptional Items".

30.The Board of Directors in its meeting held on 28.il.2016 had recommended issue of Bonus Shares in the ratio of one equity share of Rs,10/-each for three existing equity shares of Rs,10/- each held. The issue of bonus shares was approved by the shareholders on 6th January, 2017 and accordingly the Company has issued 200378652 number of equity shares, allotment of which was completed on 24.01.2017. Pursuant to the above. Earnings Per Share (both basic and diluted) for the year ended 31.03.2017 and comparative year have been calculated after adjustment of the number of bonus shares issued.

31. Financial Instruments

32 Capital Management

The Company manages its capital to ensure that Company will be able to continue as going concern while maximizing the return to stakeholders through the optimization of the capital structure."

The capital structure of the Company consists of total equity and debt, (Refer note 19,20 and 2i). The Company is not subject to any externally imposed capital requirements except the guidelines issued by Government of India."

The Company''s management reviews the capital structure on a regular basis. As part of this review, the management considers the cost of capital and the risks associated with each class of capital. The company aims to maintain gearing ratio target around 45% at Group level. The gearing ratio of the company is provided below.

33. Financial Risk Management

34. Objective

The Company monitors and manages the financial risks relating to the operations of the Company by analyzing exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk.

35. Commodity Risk

Crude oil and Naural gas price of the company are linked to international prices of crude oil/natural gas. In case of any upward or downward movement in the international prices of crude oil/natural gas, the revenue of the company get affected correspondingly. Therefore, the company is exposed to commodity price risk.

36. Market Risk

The company activities exposes it primarily to the financial risks of changes in foreign currency exchange rates, interest rate risk, market exposures that are measured using sensitivity analysis.

37.Foreign Currency Risk Management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise.

The price of crude oil and natural gas produced and sold by the company are linked to US Dollars, though billed and received in I NR. Hence any movement in the USD against INR has direct impact on the future cash flows of the company on account of sale of these products.

38. Foreign Currency Sensitivity Analysis

The Company is mainly exposed to the currency of United States of America (USD).

The following table details the Company''s sensitivity to a 5% increase and decrease in the INR against USD. The sensitivity analysis includes only outstanding foreign currency denominated monetary items as at period end and adjusts their translation at the period end for a 5% change in foreign currency rates.

39.Forward foreign exchange contracts

The Company has entered into a forward foreign exchange contracts during the reporting period. However, there is no forward foreign exchange contract outstanding as on balance sheet date.

40. Interest rate risk management

The Company is exposed to interest rate risk because the Company borrows funds at both fixed and floating interest rates and makes investment in mutual funds. Periodical interest rate payable on floating interest loan or receivable on mutual fund investment that are linked to market rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings. The company policy allows to use forward interest rate agreements (FRA''s) or interest rate swap as per the requirements.

The Company''s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management (Refer note 39.8).

41. Interest Rate Sensitivity Analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. The analysis is prepared based on the floating interest rate assets and liabilities, assuming that the amount outstanding at the end of the reporting period was outstanding for the whole year.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company''s:

Loan Given

- Profit and Equity for the year ended March 31, 2017 would increase / decrease by Rs,1.18 crores (for the year ended March 31, 2016: increase/decrease by fl.io crores).

Loan Taken

- Profit and Equity for the year ended March 31, 2017 would decrease/increase by Rs,8.02 crores (for the year ended March 31, 2016: decrease/increase by Rs,8.28 crores).

42. Price risk

The Company is exposed to equity price risks arising from equity investments in Indian Oil Corporation Limited.

Exposure in mutual funds

The company also manages surplus fund through investments in debt mutual fund plans regulated by Securities Exchange Board of India(SEBI). The NAV declared by Asset Management Companies(AMC) has generally remained constant on the mutual funds plan taken by the company. However, if the NAV of the fund is increased/decreased by 5%, the sensitivity analysis has been mentioned below:

- Profit and Equity for the year ended March 31, 2017 would increase/decrease by Rs,4.27 crores (for the year ended March 31, 2016: increase/decrease byRs,4.97 crores).

43. Equity Price Sensitivity Analysis

The sensitivity analyses below have been determined based on the exposure to price risks at the end of the reporting period.

If equity prices had been 5% higher/lower:

- Other comprehensive income and Equity for the year ended March 31,2017 would increase/decrease byRs,422.88 crores (for the year ended March 31,2016 would increase/decrease byRs,2l5.02 crores.

44. Credit Risk Management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company regularly monitors its counterparty limits by reviewing the outstanding balance and ageing of the same.

Possible Credit Risk Credit Risk Management

Credit risk related to trade receivables Company''s significant trade receivables consist of amounts due from reputed and creditworthy Public Sector Undertakings (PSUs)/Government undertaking. Apart from amounts due from PSUs/Government undertakings, (collectively IOCL, NRL, ONGC, BVFCL etc.), the Company does not have significant credit risk exposure to any single counterparty. Concentration of credit risk to any other counterparty did not exceed 2% of total monetary assets at any time during the year.

Credit risk related to bank balances Company holds bank balances with reputed and creditworthy banking institution within the approved exposures limit of each bank.

Credit risk related to investments Company has made investments in highly liquid SEBI regulated public sector mutual funds to meet their short term liquidity objectives. Company has also made investment in Tax Free Bonds having AAA rating. The company analyses the credit worthiness of the party before investing their funds.

Other credit risk The Company is exposed to credit risk in relation to financial guarantees given on behalf of subsidiary/ associate companies. The Company''s maximum exposure in this respect if the guarantee is called on as at March 31,2017 is f5,488.66 crores (As at March 31,2016 is Rs,699.33 crores). The increase in financial guarantee from previous year is due to corporate guarantee given by the company to its subsidiary Oil India International Pte Ltd. Singapore against short term loan raised by the subsidiary company.

The Company has a credit policy that is designed to ensure that consistent processes are in place to measure and control credit risk. Credit risk is considered as part of the risk-reward balance of doing business. On entering into any business contract the extent to which the arrangement exposes the Company to credit risk is considered.

45. Fair Value Measurement

This note provides information about how the Company determines fair values of various financial assets and financial liabilities.

46. Fair value of the Company''s financial assets and financial liabilities that are measured at fair value on a recurring basis Some of the Company''s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used).

Note l: Fair value determined on the basis of NAV declared by respective Asset Management Companies Note 2: Fair value on the basis of price provided by respective Insurance companies Note 3: Fair value on the basis of quoted price from NSE

Note A: Fair value on the basis of book value which closely approximates the fair value

47.Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required)

Except as detailed in the following table, the company considers that the carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their fair values.

Fair value hierarchy

Level l-Quoted prices(unadjusted) in active markets for identical assets or liabilities.

Level 2-Inputs other than quoted prices included within Level l thatare observable for the asset or liability, either directly (i.e. as prices) or indirectly(i.e. derived from prices).

The fair values of the financial assets and financial liabilities included in the level 2 categories above have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparties.

The Fair Value of current financial assets and current financial liabilities are approximately equals to their carrying value.

48. Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 - Employee Benefits:-40.1.lDefined Contribution Plans

The Company''s contribution to Provident Funds and Oil India Superannuation Benefit Scheme Fund (OISBSF) for employees and executives are Rs,88.26 crore (previous year Rs,86.59 crore) and Rs, 81.95 crore (previous year Rs, 104.83 crore) respectively.

49. Defined Benefit Plans

The various Benefit Plans which are in operation are Gratuity Fund, Oil India Employee''s Pension Fund (OIEPF), Oil India Pension Fund (OIPF), Leave Encashment Fund, Post-Retirement Medical Benefit and Long Service Award. The present value of the obligation is determined based on actuarial valuation made at the end of the financial year using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation.

The amount recognized in the Balance Sheet as the present value of the defined benefit obligation is net of the fair value of plan assets at the Balance Sheet date.

These plans typically expose the Group to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. For other defined benefit plans, the discount rate is determined by reference to market yields at the end of the reporting period on high quality corporate bonds when there is a deep market for such bonds; if the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

Interest risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investments.

Longevity risk The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary risk The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

In respect of the plan in India, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at March 31, 2017 by Mr Bhudev Chatterjee, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

Note:

1. Revenue and expenses directly identifiable to the segments have been allocated to the relative primary reportable segments.

2. Segment revenue and expenses which are not directly identifiable to the primary reportable segments have been disclosed under others which primarily includes business development services, leasing of OFC.

3. Assets and liabilities which are directly identifiable to the segments have been allocated to relative segments.

4. Assets and liabilities which are not directly identifiable to the segments have been disclosed under unallocated.

5. There are no reportable geographical segments.

Note: Figures in parenthesis () represent Participating Interest as on 31.03.2016 and parenthesis {} represent Participating Interest as on 01.04.2015.

*M/S Geo Global Resources Inc. holding 25% participating interest in Rj-ONN-2004/2 and 10% participating interest in KG-0NN-2004/1 has withdrawn from the blocks and the Company is in the process of taking over the said participating interests for which final approval is pending from MOP&NG.

** Proposed for relinquishment by OC during the year 2016-17.

*** JV Block validity has been expired in oct 2016, applied for extension of the block.

Note: Figures in parenthesis () represent Participating Interest as on 31.03.2016 and parenthesis {} represent Participating Interest as on 01.04.2015.

*Pre NELP Blocks

** Under Discover Small Field Bid 2016

Note: The tax rate used for the 2016-2017 and 2015-2016 reconciliations above is the effective corporate tax rate of 34.608% payable by corporate entities in India on taxable profits under the Indian tax law.

Notes:

a) For Assessment Years (AY) 2003-04 to 2007-08,2009-10 and 2010-11, the appeals are pending for disposal before the Hon''ble Income Tax Appellate Tribunal (ITAT) with respect to the Company''s claim of benefit u/s 80-IB / 80-IC of the Income Tax Act, 1961, hereinafter called the Act.

b) For Assessment Years (AY) 2008-09,2011-12,2012-13,2013-14 and 2014-15 the appeals are pending for disposal before the CIT(A) against disallowances/additions made in the assessment u/s 143(3).

c) The benefit u/s 80- IA, 80-1B and 80- 1C of the Act has not been considered to make the provisions of tax in the books.

d) The resulting interest, whether receivable or payable, shall be accounted for on finalization of the matter by an appellate authority.

e) Income tax assessment up to the Assessment Year 2014-15 has been completed and a demand of Rs,200.48 crore has been raised by the Department over the period on account of certain disallowances/additions. Such disallowances/additions have not been provided for in the books as the same are likely to be deleted or may be reduced substantially on the grounds taken by the Company before the first appellate authority. However, wherever demand is raised, the amount has been paid.

f) The Current Tax figure of the year includes Rs,118.40 crore (previous year Rs,102.03 crore) on account of adjustments pertaining to previous year.

g) Subject to the approval of the prescribed authority. Department of Scientific and Industrial Research, Company has claimed weighted deduction u/s 35(2AB) of the Income Tax Act, 1961, for the eligible amount incurred in the following respective year for capital and revenue expenditure on scientific research on in-house approved research and development facilities:

50. Disclosures as per Guidance Note on Oil & Gas Producing Activities (Ind AS):

(Prepared by the management and Auditors have placed reliance being information of technical nature)

(i) Net quantities of interest in Proved Reserves of oil (including condensates & Heavy Oil) and natural gas as on 31.03.2017:

(v) Proved and Proved Developed Reserves of oil (including condensates) and gas are technically assessed and reviewed in-house at the end of each year in line with international practices. Reserves are audited by external experts at periodical intervals. For the purpose of estimation of Proved and Proved Developed Reserves, Deterministic Method is used by the Company. Production pattern analysis, number of additional wells to be completed, application of enhanced recovery techniques, validity of mining lease agreements, agreements/MOU for sales are taken into consideration for determining reserves quantity.

51. Physical verification of Property, Plant and Equipment

(PPE):

Physical verification of the property, plant and equipment is carried out by the Company in phased manner over the period of 5 years. The current block started from 2013-14. Physical verification of PPE carried out till 31st March, 2017 covers 80.14% of PPE in terms of value.

52. VAT and Royalty on crude oil:

(a) The Company has received notice of demand for Rs, 1349.71 crore from Assam Value Added Tax Authority claiming VAT on sharing of under recoveries to downstream oil companies and on transportation charges of own crude oil. Out of this an amount of Rs,21.97 crore pertains to VAT on transportation of crude oil for the period from FY 2009-10 to 2012-13. The demand for the balance Rs,1327.74 crore, being VAT on sharing of under-recoveries has been contested by the Company before the Commissioner of Taxes, Assam. In a similar matter, the Gujarat High Court has passed order against applicability of VAT on the amount of under recoveries shared, which has been upheld by Supreme Court of India through dismissal of Special Leave Petition filed by Gujarat Government against the High Court decision.

(b) Government of Assam based on a claim from Director of Geology and Mining, filed a writ petition in the Hon''ble Gauhati High Court for payment of differential royalty of Rs,7,224.20 crore on post and pre-discounted sale price of crude oil for the period from 2008-09 to 2013-14. The Company is paying royalty on post discount price based on instructions issued by MOP&NG and in line with Oil Fields (Regulation and Development) Act, 1948 and subsequent notifications thereof. The matter of payment of onshore royalty at pre-discount prices was examined by MOP&NG based on the interim decision of the Hon''ble Supreme Court dated 13th February 2014 and accordingly MOP&NG intimated vide letter dated 15th July, 2016 to pay royalty at pre-discount prices effective from 1st February 2014, pending outcome of Special Leave to Appeal (Civil) No 1596/2014 filed by ONGC Ltd. before the Hon''ble Supreme Court against Gujarat High Court''s adverse order on a similar issue. Pending the final outcome of the Special Leave Petition (SLP) filed before Hon''ble Supreme Court, differential royalty up to 31st March, 2016 including interest thereon aggregating ^9749.55 crore had been considered as Contingent Liability as at 31st March, 2016. Following the order of the MOP&NG dated 15th July, 2016 the Company has paid to the Government of Assam an amount of Rs,ll5l.73 crore being the differential amount of royalty on pre-discount price and post discount price of crude oil w.e.f. from 1st February, 2014. Differential royalty amounting to Rs,ll5l.73 crore had been considered as deposit.

During the year, a settlement was made by Government of India (GOI) on 2nd February, 2017 amongst GOI, Government of Assam and the Company, based on which Hon''ble Supreme Court disposed the SLP. Accordingly, the Company has recognized the differential royalty of Rs,ll5l.73 paid to State Government of Assam as expense and shown as exceptional item in the Statement of Profit & Loss.

53. Disclosures as required by Ind AS 101 - First Time Adoption of Indian Accounting Standards

The Company has prepared its financial statements for the year ended March 31, 2017 together with comparative date as at and year ended March 31,2016 in compliance with the Ind AS notified till date. In preparing these financial statements, the opening balance sheet has been prepared on April l, 2015, being the date of transition to Ind AS. Necessary guidance has been drawn from the principles for first time adoption of Ind AS as set out in Ind AS 101 ''First time adoption of Indian Accounting Standards''. As per Ind AS 101 on "First time adoption of Indian Accounting Standards", the Company has applied all the Ind ASs effective at the reporting date retrospectively except in cases of exception availed by the Company as are allowed under Ind AS lOl. The effects of transition from previous GAAP to Ind AS are disclosed in Note no

40.13.1 &40.13.2.

The following optional exemptions in addition to the mandatory exceptions have been availed by the Company:

a) Deemed cost exemption - The Company has elected the option to carry items of property, plant and equipment at its carrying value at the date of transition (i.e. April 1, 2015) as its deemed cost in accordance with Ind AS.

b) Leases exemption - The Company has elected the option to asses ''whether an arrangement is or contains a lease'' at the transition date based on the facts and circumstances existing at that date.

c) Long-term foreign currency monetary item - The Company has opted to continue with the policy adopted under previous GAAP for accounting for long term foreign currency monetary items recognized in the financial statement for the period ending immediately before the date of transition taken from policies. Hence, the Company will continue to follow the accounting policy of amortizing the exchange differences as per the previous GAAP over the balance period of such long term liability.

d) Investments in subsidiaries, joint ventures and associates - The Company has opted to carry its investments in subsidiaries, joint ventures and associates at deemed cost being the carrying amount for such investments in its separate Financial Statement as on the transition date in line with the previous GAAP.

e) Designation of previously recognized financial instruments - The Company has investments in equity instruments of listed Companies (other than subsidiaries, joint ventures and associates).The Company has elected to designate such investments on transition date to be measured at Fair Value through Other Comprehensive Income (FVTOCI).IND AS 101 allows such designation on the basis of the facts and circumstances that enlisted at the date of transition of IN D AS.

f) Fair value measurement of financial assets or liabilities at initial recognition - The Company has opted to apply the requirements of paragraph B5.1.2A of Ind AS 109 prospectively for the transactions entered into on or after the transition date.

g) Decommissioning obligation included in the cost of property, plant and equipment - The Company has opted for the exemption given under para D21 of Ind AS 101. Accordingly, the Company at transition date. Company has included in the depreciated cost of the asset an amount calculated by discounting the liability at the date of transition back to when the liability was first incurred (using its best estimate of the historical risk-adjusted discount rate that would have applied for that liability over the intervening period) and depreciating this adjustment from that date.

h) De-recognition of financial assets and liabilities exception

- The Company has opted to apply the de-recognition requirements of Ind AS 109 prospectively for transactions occurring on or after transition date as per paragraph B2. Hence past transactions of financial assets before the transition date (if any) have not been reassessed at transition date.

i) Classification and measurement of financial assets exception- The Company has availed the exception for classifying the financial assets identified at transition date. Further, the Company has opted to apply life time expected credit loss model for all the financial assets at transition date. However, no loss allowance is recognized at transition date.

40.13 The Financial Statements are in compliance with Indian Accounting Standards (Ind AS) subsequent to its adoption with effect from 1st April 2015 pursuant to Ministry of Corporate Affairs'' Notification dated 16th February, 2015 notifying the Companies (Indian Accounting Standards) Rules, 2015. The Company has prepared a Statement of Financial Position as at 1st April, 2015 the date of transition to Ind AS. The Company applied all applicable Ind AS and availed all relevant exemptions as per Ind As 101 "First Time Adoption of Indian Accounting Standards" and prepared Separate Ind AS Financial Statements which comprise of the Balance Sheet as at 31st March,20l6, the opening Balance Sheet as at 1st April,2015, the Statement of Profit & Loss (including Other Comprehensive Income), Cash Flow Statement and the Statement of Changes in Equity for the year ended 3lfflMarch,20l6.

a) The Company has opted to designate its equity investments (other than Investments in Subsidiaries, Associates and Joint Venture Companies) at fair value through other comprehensive income. The fair value gains and losses on such investments are recognized in Other Comprehensive Income and taken to Equity.

b) Final dividend proposed and the related corporate dividend tax are recorded as a liability in the year in which dividend is approved by the shareholders. The same being non adjusting events as on the reporting date have been added back to Equity.

c) Borrowings have been measured at Fair Value after adjustments of discount on issue, upfront fees paid with retrospective effect from the day when loan was drawn and amortized over the tenure of loan using effective interest rate. Impact of the difference in value of loan and finance cost as on the date of transition and reporting date have been adjusted to Equity.

d) Adjustments for revision in Foreign Currency Monetary Item Translation Difference Accounts (FCMITDA) balance due to fair valuation of borrowings up to the date of transition and reporting date have been recognized in Equity.

e) Fair Value of Loans to employees of the Company are measured with reference to market interest rate as a result of which any employee cost which is the difference between market rate of interest and contractual interest rate is recognized initially as deferred employee benefits and amortized over the tenure of the loan and income on such loans are recognized using market rate of interest. Impact on account of amortization of deferred employee benefits and interest income up to the date of transition and reporting date have been adjusted to Equity.

f) Decommissioning liability in respect of Property, Plant and Equipment and Evaluation & Exploration assets was measured at the date of transition based on the fact that the same liability (adjusted for the time value of money) arose when the asset was first acquired/ constructed. Impact of change in present value of decommissioning liability adjusted to wells and production facilities and related depletion charges, unwinding of decommissioning obligation up to the date of transition and reporting date have been adjusted to Equity.

g) Prior period items arising during the year have been adjusted against the retained earnings at the beginning of the earliest comparative period.

h) Development cost of production facilities charged to the Statement of Profit and Loss earlier, have been recognized in Capital work in progress.

i) Financial Guarantees issued in respect of loans raised by Oil India USA and BCPL are recognized at fair value at inception and measured at the higher of the amortized value or the obligation amount in case it is probable that the guarantee amount is payable. Amortized portion of the unearned income on guarantees issued up to the date of transition and reporting date have been recognized in Equity.

j) Major spares having useful life more than one year, which were earlier included in Inventory have been capitalized as a part of Property, Plant and Equipment and depreciated with retrospective effect. Impact of depreciation charges on capital spares up to the date of transition and reporting date have been recognized in Equity.

k) With reference to j) above, provision created against nonmoving capital spares included in Inventory earlier have been reversed and adjusted against Equity.

0) For the purpose of this clause, the term Specified Bank Notes shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance .Department of Economic Affairs numbers S.O. 3407E, dated Novembers, 2016

54. The company had formed a Wholly Owned Subsidiary (WoS), Oil India International Pte Ltd. in Singapore on 6th May, 2016 to acquire E&P assets overseas. Oil India International Pte Ltd. jointly with subsidiaries of IOCL and BPRL has formed two separate SPVs, Vankor India Pte. Ltd. and Taas India Pte. Ltd which has completed the acquisition of 23.9056 stake in CJSC Vankorneft and 29.90% stake in Taas - Yuryakh Neftegazodobycha respectively in Russia, on 5th October, 2016. OIL''s stake in each of the SPVs is 33.50%.

55. As per approval of the Cabinet Committee on Economic Affairs (CCEA), an amount of Rs,215.00 crore is reimbursable by Brahmaputra Cracker and Polymers Limited (BCPL) to the Company out of the capital subsidy received from the Ministry of Chemical and Fertilizers for development of infrastructure for gas supply. An amount of Rs,69.65 crore has already been received in this regard up to the financial year 2011-12. In view of the reasonable assurance on receipt of the balance amount of Rs,145.35 crore based on recommendation of the Inter Ministerial Committee on Assam Gas Cracker Project, the same has been recognized as government grant receivable for the financial year ended 31.03.2017 as per the relevant (Ind AS) 20 - Accounting for Government and Disclosure of Government Assistance. The deferred government grant income corresponding to the amount of grant receivable shall be recognized over the useful life of the asset from December 2014 when the related assets were commissioned. For the year ended 31st March,2017 the Company has recognized an amount of Rs,27.49 crore as income from amortization of deferred grant and credited to the statement of Profit or Loss.

56. Details of charge:

(a) The Company has created charge against Current Assets to the tune of Rs, 377.45 crore (corresponding period Rs, 377.45 crore) for availing Bank Guarantee.

(b) Further the Company has created charge against the Current Assets to the tune of Rs, 700.00 crore (corresponding period Rs, 700.00 crore) for availing Cash Credit/Letter of Credit/Bank Guarantee Facility.

57. Other disclosure under Schedule 111 to the Companies Act, 2013 40.15.1 Contingent Liabilities and commitments G) Contingent Liabilities: (a) Claims against the Company not acknowledged as debts:

(c) Other matters for which the Company is contingently liable: Commitments:

(a) Capital Commitments:

(i) The estimated amount of contracts remaining to be executed on Capital Account and not provided for in the accounts: Rs, 366.59 crore (corresponding period Rs, 623.83 crore).

(ii) Company''s share in the amount of contracts remaining to be executed on Capital Accounts and not provided for in the account in respect of the un-incorporated Joint Ventures isRs, 9.91 crore (Corresponding period Rs, 146.76 crore).

(iii) Company''s share of Capital Commitment in Non Operated Joint Venture Block AAP-ON-94/l is Rs,29.92 crore (corresponding period Rs,76.60 crore).

(b) Other Commitment:

(i) The estimated amount of contracts remaining to be executed on Revenue Account and not provided for in the accounts: Rs, 35.40crore (corresponding period Rs, 283.07 crore).

(ii) Balance of Minimum Work Program Commitment (MWP) by OIL under Production Sharing Contracts (PSCs) entered for NELP Blocks with Govt, of India is Rs, 861.88 crore (corresponding period Rs, 2200.62 crore). The commitment is covered by Bank Guarantee as referred in point no 40.15.1 (b) (ii).

(iii) Balance of Minimum Work Program Commitment (MWP) by OIL under Production Sharing Contracts (PSCs) entered for overseas Blocks is Rs, 378.03 crore (corresponding period Rs, 388.03 crore). The commitment is covered by Bank Guarantee as referred in point no 40.15.1 (b) (iii).


Mar 31, 2016

1.1 Disclosure pursuant to Accounting Standard (AS) 15 (Revised 2005) - Employee Benefits:-

1.1.1 Defined Contribution Plans

The Company''s contribution to Provident Funds for employees and executives is Rs. 86.59 crore (Previous year Rs. 84.20 crore).

1.1.2 Defined Benefit Plans

The various Benefit Plans which are in operation are Gratuity Fund, Oil India Employee''s Pension Fund (OIEPF), Oil India Pension Fund (OIPF), Leave Encashment Fund, Post Retirement Medical Benefit and Long Service Award. The present value of the obligation is determined based on actuarial valuation made at the end of the financial year using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation

The amount recognised in the Balance Sheet as the present value of the defined benefit obligation is net of the fair value of plan assets at the Balance Sheet date.

1.1.3 Certified Actuarial Data:-

The following tables set out the status of the Defined Benefit plans as required under AS-15:

1.2 Information as per Accounting Standard (AS) 16 "Borrowing Costs"

Borrowing cost capitalized during the year is Rs. Nil (Previous year Rs. 7.24 crore).

1.3 Information as per Accounting Standard (AS) 18 "Related Party Disclosures"

a) Related party relationships

Name of related parties and nature of relationship (excluding the State controlled entities):

i) (a) Joint Ventures (Unincorporated):

(b) Jointly Controlled Entity:

(i) Suntera Nigeria 205 Ltd.

ii) Key Management Personnel:

Whole time Functional Directors:

a) Mr. U.P. Singh Chairman and Managing Director (w.e.f. 01.07.2015)

b) Mr. S.K.Srivastava Chairman and Managing Director (up to 30.06.2015)

c) Mrs. R.S. Borah Director (Finance)

d) Mr. S. Mahapatra Director (Exploration & Development)

e) Mr. B. Roy Director (HR & BD) (w.e.f. 08.05.2015)

f) Mr. P. K. Sharma Director (Operations) (w.e.f. 01.06.2015)

g) Mr. S. Rath Director (Operations) (up to 31.05.2015)

Other Officers:

a) Mr. S.R. Krishnan Company Secretary

1.4 Information as per Accounting Standard (AS) 27 "Financial reporting of interest in Joint Ventures"

1.4.1 Company executed various JVCs/PSCs in India for oil and gas exploration, as Jointly Control Assets as on 31.03.2016, the details of which are given below:

1.4.2 Company has sent for confirmation of balances to the JVC Partners which are yet to be received.

1.5 Micro, Small and Medium Enterprises Development Act, 2006:

The Company has identified Micro, Small and Medium Enterprises (MSMEs) to whom the Company owes dues, which are outstanding as at 31.03.2016.

1.6 Income Tax

(a) For Assessment Years (AY) 2003-04 to 2007-08, 2009-10 and 2010-11, the appeals are pending for disposal before the Hon''ble Income Tax Appellate Tribunal (ITAT) with respect to the Company''s claim of benefit u/s 80-IB / 80-IC of the Income Tax Act, 1961, herein after called as the Act.

(b) For Assessment Years (AY) 2008-09, 2011-12, 2012-13 and 2013-14 the appeals are pending for disposal before the CIT (A) against disallowances / additions made in the assessment u/s 143(3).

(c) The benefit u/s 80IB and 80-IC of the Act has not been considered to make the provisions of tax in the books.

(d) The resulting interest, whether receivable or payable, shall be accounted for on finalization of the matter by an appellate authority.

(e) Income tax assessments up to the Assessment Year 2013-14 have been completed and a demand of Rs. 188.23 crore has been raised by the Department over the period on account of certain disallowances / additions. Such disallowances /additions have not been provided for in the books as the same is likely to be deleted or may be reduced substantially on the grounds taken by the company before the first appellate authority. However, wherever demand is raised, the amount has been paid.

(f) The Current tax figure of the year includes Rs.102.03 Crore on account of adjustments pertaining to previous year.

(g) Subject to the approval of the prescribed authority, Department of Scientific and Industrial Research, Company has claimed weighted deduction u/s 35(2AB) of the Income Tax Act, 1961, for the eligible amount incurred in the following respective year for capital and revenue expenditure on scientific research on in-house approved research and development facilities:

1.7 Implementation of component accounting as per Schedule II to The Companies Act, 2013

In terms of Schedule II to The Companies Act, 2013, the Company has with effect from 01.04.2015 implemented component accounting in respect of assets. As a result, depreciation for the year ended 31.03.2016, calculated based on revised useful life of the components under written down value method is higher by Rs. 4.80 crore.

1.8 Provision for diminution in value of certain Investments through impairment test arising out of exceptional circumstances:

(i) Investment in Beas Rovuma Energy Mozambique Limited (BREML)

The Company has acquired 40% stake in BREML in Financial Year 2013-14. Considering the prevailing low global oil/gas prices consequent to slowdown in global economy as an impairment indicator, a provision for diminution amounting to Rs.174 crore in the value of investments in BREML has been made during the year based on the impairment test conducted arising out of exceptional circumstances.

(ii) Investment in Suntera Nigeria 205 Limited (SUNTERA) including loans and advances

a. The Long Term Loans & Advances to SUNTERA amounting to Rs.161.55 crore as of 31.03.2016 represents the loan extended for Company''s share of expenditure in Oil Mining Lease (OML) 142, Nigeria including accrued interest of Rs.54.52 crore.

b. On expiry of the loan agreement on 31st December 2014, the outstanding loan amounting to Rs.99.66 crore had been provided as doubtful of recovery in financial year 2014-15 accounts. Interest of Rs. 7.89 crore upto 31.12.2009 had earlier been provided in Financial Year 2009-10 accounts. Further, provision was created as Diminution in value of investment of Rs. 0.01 crore and Rs. 0.67 crore recoverable on other accounts was provided as doubtful in 2014-15 Accounts.

c. The loan agreement has now been extended up to 31.01.2022 on 23.10.2015 with retrospective effect from 1-1-2015 in supersession of earlier agreements to cover further development in the block.

d. Accordingly, aforesaid provisions taken in the previous year for above loan dues with interest and other provisions as referred in (b) above have been written back in the current year.

e. As the loan as well as total interest accrual thereof will be payable by 31.01.2022 as per fresh agreement reached duly approved by Board of Directors of the Company on 29.09.2015, accrued interest from 01.01.2010 to 31.03.2016 amounting to Rs.46.64 crore (including Rs.7.44 crore for 2015-16) have been accounted in the current year under accrual system of accounting being followed by the Company.

However considering the prevailing low global oil/gas prices consequent to slowdown in global economy as an impairment indicator, the Investment in SUNTERA by way of loans & advances including accrued interest thereon have been put to impairment test and Rs.41.13 crore provision in diminution in value has been made in current year''s accounts based on such test conducted arising out of exceptional circumstances.

1.9 VAT and Royalty on crude oil:

(a) The Company has received notice of demand for Rs. 1349.71 crore from Assam Value Added Tax Authority claiming VAT on sharing of under recoveries to downstream oil companies and on transportation charges of own crude oil. Out of this an amount of Rs.21.97 crore pertains to VAT on transportation of crude oil for the period from FY 2009-10 to 2012-13. The company has provided Rs.41.11 crore including interest for the period from 2009-10 to 2015-16 in the accounts for the quarter and year ended 31.03.2016. The demand for the balance Rs.1327.74 crore, being VAT on sharing of under-recoveries has been contested by the Company before the Commissioner of Taxes, Assam. In a similar matter, the Gujrat High Court has passed order against applicability of VAT on the amount of under recoveries shared, which has been upheld by Supreme Court of India through dismissal of Special Leave Petition filed by Gujrat Government against the High Court decision.

(b) The Company has received claim of Rs. 7224.20 crore from Director of Geology and Mining, Assam claiming royalty on sharing of under recoveries to downstream oil companies on crude oil for the year 2008-09 to 2013-14 including interest upto 31.08.2014. Company is paying royalty on post-discounted price based on the instructions issued by MOP&NG and in line with Oil Field (Regulation & Development) Act 1948 and subsequent notifications thereof and hence does not consider the claim as liability. The Government of Assam has filed a writ petition before the Hon''ble Gauhati High Court which is pending adjudication. The amount of claim as above together with amount of differential royalty up to 31.03.2016 including interest thereon estimated to be Rs.9749.55 crore has accordingly been included and shown as contingent liability.

1.10 Details of charge:

(a) The Company has created charge against Current Assets to the tune of Rs. 377.45 crore (previous year Rs. 377.45 crore) for availing Bank Guarantee.

(b) Further the Company has created charge against the Current Assets to the tune of Rs. 700.00 crore (previous year Rs. 700.00 crore) for availing Cash Credit/Letter of Credit/Bank Guarantee Facility.

1.11 Other disclosure under Schedule III to the Companies Act, 2013

I. Contingent Liabilities and commitments

(i) Contingent Liabilities:

(a) Claims against the Company not acknowledged as debts:

(b) In respect of Guarantees :

(c) Other matters for which the Company is contingently liable:

(ii) Commitments:

(a) Capital Commitments:

(i) The estimated amount of contracts remaining to be executed on Capital Account and not provided for in the accounts: Rs. 632.92 crore (previous year Rs. 246.20 crore).

(ii) Company''s share in the amount of contracts remaining to be executed on Capital Accounts and not provided for in the account in respect of the un-incorporated Joint Ventures is Rs.146.76 crore (previous year Rs. 18.13 crore).

(b) Other Commitment:

(iii) The estimated amount of contracts remaining to be executed on Revenue Account and not provided for in the accounts: Rs. 283.07 crore (previous year Rs. 172.45 crore).

(iv) Balance of Minimum Work Program Commitment (MWP) by OIL under Production Sharing Contracts (PSCs) entered for NELP Blocks with Govt. of India is Rs. 2200.62 crore (previous year Rs.2371.00 crore) out of which Rs. 460.81 crore (previous year Rs. 883.00 crore) is covered by Bank Guarantee submitted to DGH.

(v) Balance of Minimum Work Program Commitment (MWP) by OIL under Production Sharing Contracts (PSCs) entered for overseas Blocks is Rs. 388.03 crore (previous year Rs. 445.50 crore) out of which Rs. 345.34 crore (previous year Rs. 326.19 crore) is covered by Bank Guarantee.

1.12 RECLASSIFICATION/REGROUPING:

Previous year figures have been reclassified / regrouped wherever necessary to conform to current year figures.


Mar 31, 2015

1. The Board of Directors has recommended a final dividend of Rs.10 per share which is subject to the approval of the shareholders in the ensuing Annual General Meeting over and above the interim dividend of Rs. 10 per share paid .

2. Foreign Currency Translation Reserve Account represents the exchange difference arising out of translation of monetary items related to advances paid to subsidiaries/joint venture being considered as Non-Integral Foreign Operation.

3. The treatment of Foreign Currency Monetary Item Translation Difference Account is accounted for in line with the Para 46 A of AS-11- reference note no. 32.5 (i) (b).

4. Pursuant to directive from Government of India, company has raised overseas borrowings for acquiring 10% participating interest in Rovuma 1 offshore block in Mozambique. In the opinion of the management, there is no explicit restriction by the competent authority with regard to repayment and servicing of such overseas borrowings from domestic resources of the company. Interest servicing on this overseas borrowings have been met from domestic resources and accounting treatment of exchange fluctuation on such long term overseas borrowings is made accordingly.

5. Bonds represent

(i) 5.375% Notes USD 500 million Reg S Bonds issued on 17.04.2014, payable after 10 years from the date of issue.

(ii) 3.875% Notes USD 500 million Reg S Bonds issued on 17.04.2014, payable after 5 years from the date of issue.

6. External commercial Borrowings represent

(i) Syndication loan of USD 250 million (Previous year USD 250 million) drawn from banks on 26.12.2013 repayable on the date falling five years from the date of drawl.

(ii) Syndication loan of USD 125 million availed from banks repayable on the date falling five years from the average date of drawl facility commencing from 06th January, 2015. Amount drawn upto 31.03.2015 is USD 70 million.

7. Provision for employee benefits includes superanuation benefits as per Note no 31.1.2. The figure represents includes Leave encashment Rs. 183.58 crore (Previous year Rs. 172.11 crore), Post retirement medical benefit Rs. 115.90 crore (Previous year Rs. 104.77 crore) and Long service award Rs. 30.77 crore (Previous year Rs. 17.81 crore).

8. In terms of Department of Public Enterprise (DPE) order for revision of pay package of executives and non- unionised supervisors of CPSEs w.e.f 01.01.2007 a superannuation defined contribution plan called Oil India Superannuation Benefit Scheme has been implemented. The scheme has started disbursement of pension to eligible retirees. Employees liability includes Rs. 562.98 crore as on 31.03.2015 towards Oil India Superannuation Benefit Scheme after payment of Rs.70.41 crore to the trust fund. Corresponding figure included in the previous year was Rs. 460.90 crore under Provision for employee benefits in Note-10 towards defined contribution benefit scheme as it was not implemented in previous financial year.

9. Provision for employee benefits includes superannuation benefits in Note no. 31.1.2. The figure represents Leave encashment Rs. 33.71 crore (Previous year Rs. 32.54 crore), Post retirement medical benefit Rs. 22.08 crore (Previous year Rs.18.89 crore), Long service award Rs. 14.78 crore (Previous year Rs.9.41 crore) & provision against ex- gratia bonus Rs. 4.59 crore (Previous year Rs. 2.07 crore) and also refer Note No. 9.1.

10. Provision has been made towards cost of non-fulfilment of Minimum Work Programme (MWP) payable to Government of India as per terms of the Production Sharing Contract (PSC) of Blocks.

11. Depreciation for the year includes Rs. 70.50 crore (Previous year Rs. 54.44 crore) capitalised under Development Cost (Note 13) and Rs. 0.92 crore [Previous year Rs. (0.65) crore] shown under Note-29 in prior period items.

12. Lands for projects and drillings operations are acquired primarily through bipartite negotiation with the occupiers/ pattadars. In case, however, bipartite negotiation fails, lands are acquired with the intervention of government officials under the relevant land laws. Upon successful negotiation or government order, as the case may be, consent letters are obtained from the occupiers/pattadars and surface compensation for the standing crops on the lands are settled and the same are capitalized either as Land under Possession or as Pre Producing / Producing Properties. At the same time occupiers/pattadars are advised to submit documentary evidences in support of their legal possession of the lands. Pending submission of these documents and upon settlement of surface compensation, liability for land value is determined and capitalised under respective heads. Land cost forming part of Pre-Producing/Producing Properties is either amortized or charged off depending on discovery in the well. Land cost forming part of the Land under Possession is not amortized. Out of the total lands measuring 26164.65 Bighas under the possession of the company, title deed have been executed for lands measuring 12439.22 Bighas, mutation completed for lands measuring 6466.84 Bighas, 3720.39 Bighas have been applied for mutation and for the balance, the company is in the process of execution of title deed/mutation. The Company is in the process of strengthening the acquisition process and the mutation of those lands including maintenance of systematic records thereof.

13. The aggregate amount of unquoted investments is Rs. 8630.71 crore (Previous year Rs. 8585.86 crore).

14. The aggregate market value of quoted investments is Rs. 4475.32 crore (Previous year Rs. 3386.99 crore).

15. Advance against acquisition of equity shares includes advances amounting to Rs. 0.17 crore (Previous year Rs. 0.06 crore), Rs. 69.63 crore (Previous year Rs. 69.63 crore), Nil (Previous year Rs. 13.61 crore) and Rs. 210.05 crore (Previous year NIL) paid to Oil India Cyprus Limited, Oil India (USA) Inc., M/s BCPL & Oil India International B.V. respectively pending allotment.

16. Loans represents loans given to

(i) M/s Oil India International B.V. : Maturing on 12th July, 2019, carries interest at 3 months LIBOR plus 5.65%.

(ii) M/s DNP Limited: Repayment @ Rs. 2 crore per month maturing on 1st January, 2019, carries interest at SBI Base Rate plus 1.75% to be reset every 2 years, last such reset having done on 20th April, 2015. The Current portion of the loan outstanding is shown under 'Short-term loans and advances'.

(iii) M/s Brahmaputra Cracker & Polymer Limited: Repayment in eight equal quarterly instalments maturing on 31st December, 2017, carries interest at SBI Base Rate plus 0.50% to be reset every year, last such reset was done on 21st Feb, 2015. The Current portion of the loan outstanding is shown under 'Short-term loans and advances'.

17. The aggregate amount of unquoted investments is Rs. 210.00 crore (Previous year Rs. 200.00 crore).

18. Mode of valuation of investments is given in Note no 32.9.

19. Stores and spares includes Goods in transit Rs. 97.55 crore (Previous year Rs. 121.80 crore).

20. Mode of valuation of inventories is given in Note no 32.10.

21. Current Accounts includes an amount of Rs. 7.46 crore (Previous year Rs. 8.83 crore) in respect of earmarked balances with bank for unpaid dividend.

22. Term deposits includes Nil (Previous year Rs. 1971.78 crore), pledged as Security against Short Term Loans from Banks.

23. As per directive of MOP&NG, Crude Oil price calculation is based on the monthly average price of benchmarked International Basket of Crude Oil which is further adjusted for quality differential. As per directive of MOP&NG, Discount is allowed on the sale of crude oil and LPG.

24. LPG price is governed as per the MOU between the Company and Indian Oil Corporation Ltd.

25. Natural Gas price is as notified by MOP&NG and applicable to operating areas of the company. Subsidy extended to the eligible customers in North East India is reimbursed by Government of India and shown as Other Operating Revenue.

26.In terms of decision of Government of India (GOI), the company has shared under-recoveries of Oil Marketing Companies (OMCs) on price sensitive products viz Crude Oil & LPG for the first three quarters by extending discount in the prices Crude Oil & LPG based on the rates of discount communicated by Petroleum Planning and Analysis Cell (PPAC), Ministry of Petroleum and Natural Gas (MoP&NG). Sales value of Crude Oil & LPG are shown net of such discount of Rs. 5439.81 crore (Previous year Rs. 8566.23 crore) and Rs. 82.77 crore (Previous year Rs. 170.62 crore) respectively.

27. Contribution to provident and other funds include an amount of Rs. 172.44 crore (Previous year Rs. 106.55 crore) on account of superannuation defined contribution benefit plan. {Refer Note 10.1}

ADDITIONAL NOTES

28. DISCLOSURE PURSUANT TO ACCOUNTING STANDARD (AS) 15 (REVISED 2005) - EMPLOYEE BENEFITS:-

28.1. Defined Contribution Plans

The Company's contribution to Provident Funds for employees and executives is Rs. 84.20 crore (Previous year Rs. 79.79 crore).

28.2. Defined Benefit Plans

The various Benefit Plans which are in operation are Gratuity Fund, Oil India Employee's Pension Fund (OIEPF), Oil India Pension Fund (OIPF), Leave Encashment Fund, Post Retirement Medical Benefit and Long Service Award. The present value of the obligation is determined based on actuarial valuation made at the end of the financial year using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation.

The amount recognised in the Balance Sheet as the present value of the defined benefit obligation is net of the fair value of plan assets at the Balance Sheet date.

28.3. Certified Actuarial Data:-

The following tables set out the status of the Defined Benefit plans as required under AS-15:

Borrowing cost capitalized during the year is Rs. 7.24 crore (Previous year Rs. 1.38 crore).

29. Information as per Accounting Standard (AS) 18 "Related Party Disclosures"

a) Related party relationships

Name of related parties and nature of relationship (excluding the State controlled entities):

(b) Jointly Controlled Entity:

(i) Suntera Nigeria 205 Ltd.

(ii) Key Management Personnel:

whole time Functional Directors:

a) Mr. S.K.Srivastava Chairman and Managing Director

b) Mr. N.K. Bharali Director (HR & BD)

c) Mr. S. Rath Director (Operations)

d) Mrs. R.S. Borah Director (Finance)

e) Mr. S. Mahapatra Director (E & D)

Part-time Directors:

a) Mr. Anup Mukerji Independent Director

b) Mr. Suresh Chand Gupta Independent Director

c) Mr. Bhaskar Ramamurthi Independent Director

d) Mr. Shekhar Chaudhuri Independent Director

e) Mr. Gautam Barua Independent Director

Other Officers:

a) Mr.S.R.Krishnan Company Secretary

The Company has signed a "Participating Agreement" (PA) for the product pipeline in Sudan with ONGC Videsh Limited (OVL) for a 10% Participating Interest (balance 90% being with OVL) awarded by Ministry of Energy & Mining , Govt. of Sudan (GOS). The construction of the pipeline project was completed on 01.09.2005 and handed over to GOS under Build, Own, Lease and Transfer (BOLT) basis.

The "PA" entered into between OVL and the Company is neither intended nor shall be construed as creating a partnership or joint venture among the parties. Hence, accounting has not been done following "Joint Venture Accounting Policy" but the agreement for providing finance for the project in rupees to OVL and to share lease rentals receivable from Govt. of Sudan has been treated as "Finance Lease Activity" as envisaged under Accounting Standard (AS) 19 issued by The Institute of Chartered Accountants of India and accordingly accounted for.

Since the company is not having any discontinuing operations and as such disclosure under AS-24 is not applicable.

30. Information as per Accounting Standard (AS) 27 "Financial reporting of interest in Joint Ventures"

31.1 Company has sent for confirmation of balances to the JVC Partners which are yet to be received.

32. INCOME TAX

(a) For Assessment Year (AY) 2003-04 to 2007-08, 2009-10 and 2010-11, the appeal is pending for disposal before the Hon'ble Income Tax Appellate Tribunal (ITAT) with respect to the Company's claim of benefit u/s 80-IB / 80-IC of the Income Tax Act, 1961, herein after called as the Act.

(b) For Assessment Year (AY) 2008-09, 2011-12 and 2012-13, the appeal is pending for disposal before the CIT (A) against disallowances / additions made in the assessment u/s 143(3).

(c) The benefit u/s 80IB and 80-IC of the Act has not been considered to make the provisions of tax in the books.

(d) The resulting interest, whether receivable or payable, shall be accounted for on finalization of the matter by an appellate authority.

(e) Income tax assessments up to the Assessment Year 2013-14 have been completed and a demand of Rs.200.50 crore has been raised by the Department over the period on account of certain disallowances / additions. Such disallowances/additions have not been provided for in the books as the same is likely to be deleted or may be reduced substantially on the grounds taken by the company before the first appellate authority. However, wherever demand is raised, the amount has been paid.

(f) The current tax figure of the year includes Rs. 93.76 crore (negative) on account of adjustments pertaining to previous years.

(g) Subject to the approval of the prescribed authority, Department of Scientific and Industrial Research, company has claimed weighted deduction u/s 35 (2AB) of the Income Tax Act, 1961, for the eligible amount incurred in the following respective years for capital and revenue expenditure on scientific research on in-house approved research and development facilities:

33. Implementation of Schedule II of the Companies Act, 2013

In respect of Fixed assets other than those included under Producing Properties, the company has w.e.f. 01.04.2014 revised the depreciation rates based on the useful life of its various fixed assets as prescribed in Part-C of Schedule II to the Companies Act, 2013. As a result, depreciation for financial year, calculated on written down value method is lower by Rs. 28.84 crore. Similarly, in case of fixed assets whose useful life has already been completed as on March 31,2014, the carrying value (net of residual value) of those fixed assets amounting to Rs.14.37 crore (net of deferred tax Rs. 4.88 crore) have been debited to the opening balance of General Reserves.

34. Implementation of Guidance Note on Depletion of Producing Properties - Other Production Facilities:

Company following the Guidance note on Accounting for Oil and Gas Producing Activities (Revised), 2013 as well as ICAI Expert Advisory Committee, company has w.e.f. 01.04.2014 made changes in accounting estimates by changing the useful life of "Other production facilities" by linking it with the respective oil and gas reserves as against the existing practice of determination of the same on the basis of the Companies Act. Such reserves are assessed at the year end and impacts of changes to reserves are accounted for prospectively. As per (AS) 5, such change in accounting estimates do not require restatement of earlier financial statements or any retrospective adjustment. Accordingly, the effect of such changes including reversal of changes made consequent to implementation of Schedule II to the Companies Act, 2013 in respect of those "Other production facilities" resulted in depletion/depreciation for the year higher by Rs. 17.72 crore.

(iii) Proved and Proved Developed Reserves of oil (including condensates) and gas are technically assesses and reviewed in-house at the end of each year in line with international practices. Reserves are audited by external experts at periodical intervals. For the purpose of estimation of Proved and Proved Developed Reserves Deterministic Method is used by the company. Production pattern analysis, no of additional wells to be completed, application of enhanced recovery techniques, validity of mining lease agreements, agreements/MOU for sales are taken into consideration for determining reserves quantity.

35. VAT and Royalty on crude oil:

(a) Company has received notice of demand for Rs.1349.71 crore from Assam Value Added Tax Authority claiming tax on sharing of under recoveries to downstream oil companies and on transportation charges on crude oil. Company is contesting the demand and pursuant to directive of Gauhati High Court the matter is pending before the VAT Appellate Authority.

(b) Company has received claim of Rs.7224.20 crore from Director of Geology and Mining, Assam claiming royalty on sharing of under recoveries to downstream oil companies on crude oil for the year 2008-09 to 2013-14. Company is paying royalty on post-discounted price based on the instructions issued by MOP&NG and in line with Oil Field (Regulation & Development) Act 1948 and hence does not consider the claim as liability.

(C) Oil India International BV: On 4th July 2014, company through its wholly owned subsidiary Oil India International B.V. completed acquisition of 50% shareholding in World Ace Investments Limited, a Cyprus based company which through its wholly owned subsidiary owns License 61 in Tomsk Oblast region in Western Siberia, Russia. The company's share of consideration for acquiring the shares has been accounted as investment in Joint Venture as per AS -13

(d) In respect of claims made against the company to the extent they are not acknowledged as debt and where no provisions have been made, are disclosed under Contingent Liabilities 31.16(I)(i).

36. Details of charge:

(a) The company has created charge against Current Assets to the tune of Rs.377.45 crore (Previous year Rs.377.45 crore) for availing Bank Guarantee.

(b) The company is having Cash Credit /Letter of credit / Bank Guarantee facility against the security of its current assets to the tune of Rs.700 crore.(Previous year Rs.700 crore)

37. Other disclosure under Schedule III to the Companies Act, 2013

I. Contingent Liabilities and commitments

(i) Contingent Liabilities:

(a) Claims against the Company not acknowledged as debts:

(i) In respect of claims under Sales Tax Act : Rs.1358.12 crore (Previous year Rs.8.41 crore)

(ii) In respect of claims under Central excise Acts : Rs. 158.17 crore (Previous year & Service Tax Rs.114.73 crore)

(iii) In respect of claims under Income Tax Act : Rs.3.96 crore(Previous year - nil)

(iv) In respect of claims under Other Acts : Rs.46.39 crore (Previous year ' 42.26 crore)

(v) Claims by contractors pending in Arbitration / Courts. : '24.52 crore (Previous year '109.63 crore).

(vi) In respect of share of claim on JVC/PSC account : Rs.6.57 crore (Previous year ' 27.36 crore)

(vii) In respect of claim of Royalty by Govt. of Assam : Rs.7224.20 crore (Previous year - nil) on gross price of crude oil

(b) In respect of Guarantees :

(i) Bank Guarantee issued for Rs.702.02 crore to Superintendent of Taxes, Naharkatia, Assam, in relation to demand raised by the Department under Assam Taxation (on specified lands) Act 1990. (Previous year Rs.702.02crore).

(ii) Guarantee to OIDB against Loan by M/S BCPL from OIDB: Rs.36.34 crore (Previous year Rs.36.34 crore).

(iii) Counter Guarantee to GAIL against Loan by M/S BCPL from OIDB: Rs.27.78 crore (Previous year Rs.27.78 crore).

(iv) Corporate Guarantee to Royal Bank of Scotland (Finance) Ireland against Loan taken by OIL INDIA (USA) INC. for USD Nil Rs.NIL (Previous year USD 90 million Rs. 545.49 crore).

(v) Corporate Guarantee to Sumitomo Mitsui Banking Corporation against Loan taken by OIL INDIA (USA)INC. for USD 90 million Rs.568.71 crore (Previous year USD Nil Rs.Nil).

(c) Other money for which the company is contingently liable:

(II) Commitments:

(a) Capital Commitments:

(i) The estimated amount of contracts remaining to be executed on Capital Account and not provided for in the accounts: Rs.246.20 crore (Previous year Rs. 538.66 crore).

(ii) Company's share in the amount of contracts remaining to be executed on Capital Accounts and not provided for in the account in respect of the Joint Ventures is Rs.18.13 crore (Previous year Rs. 8.47 crore).

(b) Other Commitment:

(i) Balance of Minimum Work Program Commitment (MWP) by OIL under Production Sharing Contracts (PSCs) entered for NELP Blocks with Govt. of India is Rs.2371 crore.(Previous year Rs.2663 crore) out of which Rs. 883 crore (Previous year Rs.314 crore) is covered by Bank Guarantee submitted to DGH.

38. RECLASSIFICATION/REGROUPING:

Previous year figures have been reclassified / regrouped whenrever necessary to conform to current year figures.


Mar 31, 2014

1.1 The Board of Directors has recommended a final dividend of Rs. 0.50 per share which is subject to the approval of the shareholders in the ensuing Annual General Meeting over and above the interim dividend of Rs. 21 (Rs. 11 and Rs. 10) per share paid in two phases.

2.1 The balance in Foreign Currency Translation Reserve Account reflects the exchange difference arising out of translation of monetary items related to Non Integral Foreign Operation.

3.1 Syndication loan of USD 250 million drawn from banks on 26.12.2013 repayable on the date falling five years from the date of drawal.

4.1 Provision for employee benefits includes superannuation benefits as Note No 31.1.2.

4.2 In terms of Department of Public Enterprise order for revision of pay package of executives and non-unionised supervisors of CPSEs w.e.f 01.01.2007, a superanuation defined contribution plan has been formulated and approved by the competent authority. In recognition of such defined contribution plan liability w.e.f 01.01.2007, company has provided Rs. 106.55 crore during the year (Previous year Rs. 29.24 crore) and the cumulative liability as on 31.03.2014 stands at Rs. 460.95 crore (Previous year Rs. 354.40 crore).

4.3 Provision has been made towards cost of non-fulfilment of Minimum Work Programme (MWP) payable to Government of India as per terms of the Production Sharing Contract (PSC) of Blocks.

5.1 Lands for projects and drillings operations are acquired primarily through bipartite negotiation with the occupiers/pattadars. In case, however, bipartite negotiation fails, lands are acquired with the intervention of government officials under the relevant land laws. Upon successful negotiation or government order, as the case may be, consent letters are obtained from the occupiers/pattadars and surface compensation for the standing crops on the lands are settled and the same are capitalized either as Freehold Land or as Capital work in progress/Acquisition cost under Producing Properties. At the same time occupiers/pattadars are advised to submit documentary evi- dences in support of their legal possession of the lands. Pending submission of these documents and upon settlement of surface compensation, liability for land value is determined and capitalised under respective heads. Land cost forming part of Producing Proper- ties/Capital work in progress is either amortized or charged off depending on discovery in the well. Land cost forming part of the Land under Possession is not amortized. Out of the total lands measuring 26064.41 Bigha under the possession of the company, lands measuring 6311.24 Bighas have been mutated and 3480.20 Bighas have been applied for mutation & for the balance, the verification of title deed of the land is in the process as on 31.03.2014. The Company is in the process of strengthening the acquisition process and the mutation of those lands including maintenance of systematic records thereof.

6.1 Right of use for laying pipelines does not bestow upon the company, the ownership of land and hence, treated as Intangible Assets.

7.1 The aggregate amount of unquoted investments is Rs. 8585.86 crore (Previous year Rs. 1857.07 crore).

7.2 The aggregate market value of quoted investments is Rs. 3386.99 crore (Previous year Nil).

8.1 Inter Corporate Loans represent loans given to

(i) M/s DNP Limited of Rs. 98.20 crore for a period of 10 years, which carries an interest of 10% per annum (8% per annum upto 19.04.2011). First instalment of Repayment of loan commenced from 01.04.2013. The Current portion of the loan outstanding is shown under ''Short- term loans and advances''.

(ii) M/s Brahmaputra Cracker & Polymer Limited of Rs. 250.00 crore for a period of 5 years. The rate of interest is SBI Base Rate plus 0.50% prevailing on the date of signing of the Loan agreement and shall remain valid for one year. The interest on loan will be reset every year thereafter at prevailing SBI Base Rate at that point of time plus 0.50%. Repayment of loan will be commenced after the moratorium period of 2 years.

9.1 Long term trade receivables represents non-current portion of receivables against lease rent under finance lease arrangement. Refer to note no. 31.5.

9.2 In terms of Hon''ble High Court order, Company has paid decreed amount of Rs. 99.05 crore in the FY 2012-13 arising out of dispute with a contractor. Company''s appeal against such decreed amount is admitted and pending before the Hon''ble High Court and the Company considers it to be recoverable and as such not treated as expense.

10.1 Stores and spares includes Goods in transit Rs. 121.80 crore (Previous year Rs. 126.70 crore).

10.2 Mode of valuation of inventories is given in Note no 32.10.

11.1 Current Accounts includes an amount of Rs. 8.83 crore (Previous year Rs. 231.10 crore) in respect of earmarked balances with bank for unpaid dividend.

11.2 Term deposits includes Rs. 1971.78 crore (Previous Year Rs.1021.86 crore), pledged as Security against Short Term Loans from Banks.

12.1 For Leave Encashment fund refer to note no. 31.1.3.

12.2 Advance against acquisition of equity shares includes advances amounting to Rs. 0.06 crore (Previous year Rs. 0.06 crore), Rs. 69.63 crore (Previous year Rs. 52.78 crore) & Rs. 13.61 crore (Previous year Rs. 21.10 crore) paid to Oil India Cyprus Limited, Oil India (USA) Inc. & M/s BCPL respectively pending allotment.

13.1 As per directive of MOP&NG, Crude Oil price calculation is based on the monthly average price of benchmarked International Basket of Crude Oil which is further adjusted for quality differential. As per directive of MOP&NG, Discount is allowed on the sale of crude oil and LPG.

13.2 LPG price is governed as per the MOU between the Company and Indian Oil Corporation Ltd.

13.3 Natural Gas price is as notified by MOP&NG and applicable to operating areas of the company. Subsidy extended to the eligible customers in North East India is reimbursed by Government of India and shown as Other Operating Revenue.

13.4 In terms of decision of Government of India (GOI), the company has shared under-recoveries of Oil Marketing Companies (OMCs) on price sensitive products viz Crude Oil & LPG for the year 2013-14 by extending the discount in the Crude Oil & LPG based on the rates of discount communicated by Petroleum Planning and Analysis Cell (PPAC), Ministry of Petroleum and Natural Gas (MoP&NG). Sales value of Crude Oil & LPG are shown net of such discount of Rs. 8566.23 crore (Previous year Rs. 7766.08 crore) and Rs. 170.62 crore (Previous year Rs. 126.09 crore) respectively.

14.1 Contribution to provident and other funds includes an amount of Rs.106.55 Crore (Previous year Rs. 29.24 crore) on account of superannuation defined contribution benefit plan. {Refer Note 10.2}

15.1 In line with the approval of the Govt. of India, Company has financed the acquisition of 40% shares in Videocon Mozambique Rovuma 1 Limited (renamed as Beas Rovuma Energy Mozambique Limited) out of foreign currency borrowings. However, interest servicing on these foreign currency borrowings amounting to Rs. 21.01 crore is being done out of Company''s internal resource generation in India.

16.1 Statutory levies represent Royalty Rs.1276.08 crore (Previous year Rs. 1332.55 crore) and Cess Rs.1602.77 crore (Previous year Rs. 1711.30 crore).

16.2 The Company has reviewed the recent judgement of the Supreme Court with regard to payment of Royalty on Pre-discount price of crude oil and is of the opinion that no liability on this account is anticipated at this stage.

17.1 Weighted average number of Equity Shares for Previous period figures have been restated for the purpose of computation of Earnings per share in accordance with AS-20.

18.1 Disclosure pursuant to Accounting Standard (AS) 15 (Revised 2005) – Employee Benefits:- 31.1.1 Defined Contribution Plans

The Company''s contribution to Provident Funds for employees and executives is Rs. 79.79 crore (Previous year Rs. 72.36 crore).

18.1.2 Defined Benefit Plans

The various Benefit Plans which are in operation are Gratuity Fund, Oil India Employee''s Pension Fund (OIEPF), Oil India Pension Fund (OIPF), Leave Encashment Fund, Post Retirement Medical Benefit and Long Service Award. The present value of the obligation is determined based on actuarial valuation made at the end of the financial year using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation. Long Service Award liability as on 31.03.2014 determined by the actuary, has been charged to Statement of Profit and Loss. The amount recognised in the Balance Sheet as the present value of the defined benefit obligation is net of the fair value of plan assets at the Balance Sheet date.

18.2 Information as per Accounting Standard (AS) 16 "Borrowing Costs"

Borrowing cost capitalized during the year is Rs.1.38 crore (Previous year Rs. Nil).

18.3 Information as per Accounting Standard (AS) 19 "Lease"

The Company has signed a "Participating Agreement" (PA) for the product pipeline in Sudan with ONGC Videsh Limited (OVL) for a 10% Participating Interest (balance 90% being with OVL) awarded by Ministry of Energy & Mining , Govt. of Sudan (GOS). The construction of the pipeline project was completed on 01.09.2005 and handed over to GOS under Build, Own, Lease and Transfer (BOLT) basis.

The "PA" entered into between OVL and the Company is neither intended nor shall be construed as creating a partnership or joint venture among the parties. Hence, accounting has not been done following "Joint Venture Accounting Policy" but the agreement for providing finance for the project in rupees to OVL and to share lease rentals receivable from Govt. of Sudan has been treated as "Finance Lease Activity" as envisaged under Account- ing Standard (AS) 19 issued by The Institute of Chartered Accountants of India and accordingly accounted for.

18.4 Since the company is not having any discontinuing operations and as such disclosure under AS-24 is not applicable.

18.5 Information as per Accounting Standard (AS) 27 "Financial reporting of interest in Joint Ventures"

C. Blocks relinquished/being relinquished

The required disclosures under AS 27 related to relinquished/being relinquished blocks against which full provision has been made are not disclosed since it does not affect the related disclosures materially. However, relinquished/ being relinquished blocks against which balances are appearing in the books of accounts or transactions have taken place during the financial year are disclosed as under:

Jointly Controlled Entity:

The Company along with ONGC Videsh Limited (OVL) acquired 100% shares of Videocon Mozambique Rovuma 1 Limited (renamed as Beas Rovuma Energy Mozambique Limited (BREML)). The Company acquired 40% shares in BREML, which holds 10% PI in the Rovuma Area 1 offshore Block, Mozambique. The transaction was completed on 7th January, 2014 for USD 1,007.69 million (Rs. 6337.39 crore) against the net asset value of USD 130.46 million (Rs. 820.44 crore). The company''s share of consideration for acquiring the shares has been accounted as investment in Joint Venture as per AS -13.

As per the condition of sale and purchase agreement with Videocon for acquiring the shares of BREML, the consideration is subject to adjustment for the seller''s final statements of accounts which has been received from Videocon on 2nd May, 2014 seeking adjustment to the purchase price of USD 20.972 million (Rs. 127.11 crore) additionally payable to seller. The same is under review and adjustment to the consideration, if any, shall be accounted on finalization of seller''s final statement of accounts.

18.7.1 Pursuant to directive from Government of India vide MoP&NG letter no. 33011/16/2013-ONG-III dated 17.10.2013, the company has raised overseas funding for acquiring 10% participating interest in Rovuma I offshore block in Mozambique along with ONGC Videsh Ltd. The foreign currency borrowing at the close of year has been translated in accordance with AS-11 and consequently Rs 238.96 crore has been recognized as exchange gain on foreign currency translation.

In the opinion of the Management there is no explicit restriction by the authority with regard to repayment or servicing of debt from domestic resources of the company.

18.7.2 Recoverability of dues of Rs. 94.47 crore as on 31.03.2014 from Suntera Nigeria 205 Ltd. in which the company is having 25% interest in equity along with Suntera Resources Limited (50%) and Indian Oil Corporation Limited (25%) is dependent upon its ability to continue as a going concern with the support of its shareholding companies. This loan is however due for repayment on 31.12.2014 only. Accordingly, no provision has been created in accounts as on 31.03.2014.

18.7.3 Company has sent for confirmation of balances to the JVC Partners which are yet to be received.

19.1 Income Tax

a) For Assessment Year (AY) 2003-04 to 2007-08, 2009-10 and 2010-11, the appeal is pending for disposal before the Hon''ble Income Tax Appellate Tribunal (ITAT) with respect to the Company''s claim of benefit u/s 80-IB / 80-IC of the Income Tax Act, 1961, herein after called as the Act.

b) For Assessment Year (AY) 2008-09, 2011-12 and 2012-13, the appeal is pending for disposal before the CIT(A) against disallowances / additions made in the assessment u/s 143(3).

c) The benefit u/s 80-IB & 80-IC of the Act has not been considered to make the provisions of tax in the books.

d) The resulting interest, whether receivable or payable, shall be accounted for on finalization of the matter by an appellant authority.

e) Income tax assessments up to the Assessment Year 2012-13 have been completed and a demand of 149.18 crore has been raised by the Department over the period on account of certain disallowances / additions.

Such disallowances/additions have not been provided for in the books as the same is likely to be deleted or may be reduced substantially on the grounds taken by the company before the first appellate authority. However, as per demand notice, the amount has been paid.

f) Subject to the approval of the prescribed authority, Department of Scientific and Industrial Research, company has claimed weighted deduction u/s 35 (2AB) of the Income Tax Act, 1961, for the eligible amount incurred in the following respective years for capital and revenue expenditure on scientific research on in-house approved research and development facilities:

19.2 Disclosure under Section 441A of the Companies Act:

Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

19.3 Implementation of Guidance Note on Oil & Gas Producing Activities (Revised 2013):

Company has implemented "Guidance Note on Accounting for Oil & Gas Producing Activities (Revised 2013)" issued by the Institute of Chartered Accountants of India (ICAI). However, the company has continued to provide depreciation on other Production Facilities, being part of producing properties as per the rates prescribed under Schedule XIV to the Companies Act 1956, in preference to the Depletion method based on Unit of Production as recommended by ICAI. Company''s decision is based on the opinion from Expert Advisory Committee of ICAI issued on 11.05.2010 and also since the rates under Schedule XIV to the Companies Act 1956 prescribes the minimum rates at which depreciation is to be provided. Impact of implementation of the Guidance Note is increase in Acquisition Cost-Land with corresponding increase in Profit before tax by Rs. 0.32 crore, increase in abandonment liability by Rs. 86.15 crore with corresponding increase in Producing well Rs. 80.21 crore, Capital Work in Progress (Development Cost- Wells Rs. 0.94 crore) & Well write off Rs. 5 crore.

Reserves are calculated in terms of Million kilo litres. Figures relating to crude oil (including condensates) are converted in Million metric tonne using average conversion factor as applicable for the year.

iii) Proved and Proved Developed Reserves of oil (including condensates) and gas are technically assesses and reviewed in-house at the end of each year in line with international practices. Reserves are audited by external experts at periodical intervals. For the purpose of estimation of Proved and Proved Developed Reserves Deterministic Method is used by the company. Production pattern analysis, no of additional wells to be completed, application of enhanced recovery techniques, validity of mining lease agreements, agreements/MOU for sales are taken into consideration for determining reserves quantity.

19.4 Details of charge:

a) The company has created charge against Current Assets to the tune of Rs. 377.45 crore (Previous year Rs. 377.45 crore) for availing Bank Guarantee.

b) The company has created charge against Current Assets to the tune of Rs. Nil (Previous year Rs.150 crore) for availing Letter of Credit.

c) The company is having Cash Credit /Letter of credit / Bank Guarantee facility against the security of its current assets to the tune of Rs. 700 crore.(Previous year Rs.1000 crore)

19.5 Other disclosure under Schedule VI to the Companies Act, 1956

I. Contingent Liabilities and commitments

i) Contingent Liabilities:

a) Claims against the Company not acknowledged as debts:

i) In respect of claims under Sales Tax Act : Rs. 8.41 crore (Previous year Rs. 5.58 crore)

ii) In respect of claims under Central excise Acts : Service Tax Rs. 114.73 crore (Previous year Rs. 43.66 crore)

iii) In respect of claims under Other Acts : Rs. 42.26 crore(Previous year Rs. 41.51 crore)

iv) Claims by contractors pending in Arbitration / Courts : Rs. 109.63 crore (Previous year Rs.110.97 crore)

v) In respect of share of claim on JVC/PSC account : Rs. 27.36 crore (Previous year Rs. 30.11 crore)

b) In respect of Guarantees :

i) Bank Guarantee issued for Rs. 702.02 crore to Superintendent of Taxes, Naharkatia, Assam, in relation to demand raised by the Department under Assam Taxation (on specified lands) Act 1990.(Previous year Rs. 702.02crore).

ii) Guarantee to OIDB against Loan by M/S BCPL from OIDB : Rs. 36.34 crore(Previous year Rs. 36.34 crore)

iii) Guarantee to OIDB against Loan by M/S DNPL from OIDB : Rs. Nil (Previous year Rs. 38.02 crore)

iv) Counter Guarantee to GAIL against Loan by M/S BCPL from OIDB : Rs. 27.78 crore(Previous year Rs. 27.78 crore)

v) Irrevocable Standby Letter of Credit to CARRIZO OIL AND GAS INC. of USD Nil, Rs. Nil, under Purchase and Participating agreement. (Previous year USD 23 Million, Rs. 126.29 crore)

vi) Guarantee to Citibank NA., New York against Loan taken by OIL INDIA (USA)INC. for USD Nil, Rs. Nil (Previous year USD 50 Million, Rs. 274.55 crore)

vii) Guarantee to Royal Bank of Scotland (Finance) Ireland against Loan taken by OIL INDIA (USA)INC. for USD 90 million Rs. 545.49 crore (Previous year USD Nil, Rs. Nil)

ii) Commitments:

Capital Commitments:

i) The estimated amount of contracts remaining to be executed on Capital Account and not provided for in the accounts: Rs. 538.66 crore (Previous year Rs. 364.13 crore).

ii) Company''s share in the amount of contracts remaining to be executed on Capital Accounts and not provided for in the account as on 31.03.2014 in respect of the Joint Ventures is Rs. 8.47 crore (Previous year Rs. 0.09 crore).

Other Commitment:

iii) Balance of Minimum Work Program Commitment (MWP) by OIL under Production Sharing Contracts (PSCs) entered for NELP Blocks with Govt. of India is Rs. 2663 crore. (Previous year Rs. 3094.53 crore) out of which Rs. 314 crore. (Previous year Rs. 389 crore) is covered by Bank Guarantee submitted to DGH.

19.6 RECLASSIFICATION/REGROUPING:

Previous year figures have been reclassified / regrouped wherever necessary to conform to current year figures.


Mar 31, 2013

1.1.1 Defined Contribution Plans

The Company''s contribution to Provident Funds for employees and executives is Rs.72.36crore (Previous year Rs. 67.38 crore).

1.1.2 Defined Benefit Plans

The various Benefit Plans which are in operation are Gratuity Fund, Oil India Employee''s Pension Fund (OIEPF), Oil India Pension Fund (OIPF), Leave Encashment Fund, Post Retirement Medical Benefit and Long Service Award. The present value of the obligation is determined based on actuarial valuation made at the end of the financial year using the Projected Unit Credit Method, which recognizes each period of service as given rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation. Long Service Award liability as on 31.03.2013 determined by the actuary, has been charged to Statement of Profit and Loss.

The amount recognised in the Balance Sheet as the present value of the defined benefit obligation is net of the fair value of plan assets at the Balance Sheet date.

1.2 Information as per Accounting Standard (AS) 16 "Borrowing Costs" Borrowing cost capitalized during the period is Rs. Nil (Previous year Rs. Nil).

1.3 Information as per Accounting Standard (AS) 18 "Related Party Disclosures"

a) Related party relationships

Name of related parties and nature of relationship (excluding the State controlled entities):

i) Joint Ventures (Unincorporated):

ii) Key Management Personnel Whole time Functional Directors:

a) Mr. S.K.Srivastava Chairman and Managing Director(w.e.f. 01.05.2012)

b) Mr. N.M. Borah Chairman and Managing Director( upto 30.04.2012)

c) Mr. T.K. Ananth Kumar Director (Finance)

d) Mr. B.N. Talukdar Director (Exploration & Development)

e) Mr. N.K. Bharali Director (HR & BD)

f) Mr. S. Rath Director (Operations)

Part-time Directors:

a) Mr. Anup Mukerji Independent Director (w.e.f 16.09.2012)

b) Mr. Suresh Chand Gupta Independent Director (w.e.f 16.09.2012)

c) Mr. Bhaskar Ramamurthi Independent Director (w.e.f 16.09.2012)

d) Mr. Shekhar Chaudhuri Independent Director (w.e.f 16.09.2012)

e) Mr. Gautam Barua Independent Director (w.e.f 16.09.2012)

f) Mr. Ghanshyambhai Hiralal Amin Independent Director (upto 15.09.2012)

g) Mr. Pawan Kumar Sharma Independent Director (upto 15.09.2012)

h) Mr. Alexander Koipuram Luke Independent Director (upto 15.09.2012)

i) Mr. Vinod Kumar Misra Independent Director (upto 15.09.2012)

j) Mr. Sushil Khanna Independent Director (upto 15.09.2012)

Other Officers

a) Mr. S.R. Krishnan Company Secretary

1.4 Information as per Accounting Standard (AS) 19 "Lease"

The Company has signed a "Participating Agreement" (PA) for the product pipeline in Sudan with ONGC Videsh Limited (OVL) for a 10% Participating Interest (balance 90% being with OVL) in the pipeline project awarded by Ministry of Energy & Mining (MEM), Govt. of Sudan (GOS) through a separate agreement entered into by OVL in this regard. The construction of the pipeline project was completed on 01.09.2005 and handed over to MEM under Build, Own, Lease and Transfer (BOLT) basis.

The "PA" entered into between OVL and the Company is neither intended nor shall be construed as creating a partnership or joint venture among the parties. Hence, accounting has not been done following "Joint Venture Accounting Policy" but the agreement for providing finance for the project in rupees to OVL and to share lease rentals receivable from MEM has been treated as "Finance Lease Activity" as envisaged under Accounting Standard (AS) 19 issued by The Institute of Chartered Accountants of India and accordingly accounted for.

1.5 Since the company is not having any discontinuing operations and as such disclosure under AS-24 is not applicable.

1.6 Information as per Accounting Standard (AS) 27 "Financial reporting of interest in Joint Ventures"

1.7.1 Company has sent for confirmation of balances to the JVC Partners which are yet to be received.

1.8 Income Tax

a) For Assessment Year (AY) 2003-04 to 2007-08, the appeal is pending for disposal before the Hon''ble Income Tax Appellate Tribunal (ITAT) with respect to the Company claim of benefit u/s 80-IB / 80-IC of the Income Tax Act, 1961, herein after called as the Act.

b) For AY 2009-10 the Commissioner of Income Tax (Appeal), "CIT(A)", has disposed off the appeal and confirmed the disallowances of Company claim u/s 80-IC of the Act. The Company will prefer a 2nd appeal before Hon''ble ITAT.

c) For AY 2008-09, 2010-11 and 2011-12 the appeal is pending for disposal before the CIT(A) with respect to the Company claim of benefit u/s 80-IC of the Act.

d) The resulting interest, whether receivable or payable, shall be accounted for on finalization of the matter by an appellant authority.

The benefit u/s 80-IC of the Act has not been considered to make the provisions of tax in the books.

1.9 Disclosure under Section 441A of the Companies Act:

Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

1.10 Details of charge:

The company has created charge against Current Assets to the tune of Rs. 377.45 crore for availing Bank Guarantee.

The company has created further charge against Current Assets to the tune of Rs. 150 crore for availing Letter of Credit.

The company is having Cash Credit facility against the security of its current assets to the tune of Rs.1000 crore.

1.11 Other disclosure under Schedule VI to the Companies Act, 1956

I. Contingent Liabilities and commitments

i) Contingent Liabilities:

a) Claims against the Company not acknowledged as debts:

i) In respect of claims under Sales Tax Act : Rs. 5.58 crore (Previous year Rs.5.58 crore)

ii) In respect of claims under Central excise Acts : Rs. 43.66 crore (Previous year Rs.26.19 crore)

iii) In respect of claims under Other Acts : Rs. 41.51crore(Previous year Rs. 36.91 crore)

iv) Claims by contractors pending decision in Arbitration / Courts. : Rs. 110.97crore (Previous year Rs.128.53 crore).

v) In respect of share of claim on JVC/PSC account : Rs. 30.11crore (Previous year Rs. 31.80 crore)

b) In respect of Guarantees :

i) Bank Guarantee issued for Rs. 702.02 crore to Superintending of Taxes, Naharkatia, Assam, in relation to demand raised by the Department under Assam Taxation (on specified lands) Act 1990.(Previous year Rs.702.02crore)

ii) Guarantee to OIDB against Loan by M/S BCPL from OIDB: Rs.36.34crore(Previous year Rs.36.34crore)

iii) Guarantee to OIDB against Loan by M/S DNPL from OIDB: Rs.38.02crore(Previous year Rs.38.02crore)

iv) Counter Guarantee to GAIL against Loan by M/S BCPL from OIDB:Rs.27.78crore(Previous year Nil)

v) Irrevocable Standby Letter of Credit to CARRIZO OIL AND GAS INC.of 23 Million USD, Rs.126.29crore under Purchase and Participating agreement. (Previous year Nil)

vi) Guarantee to Citibank NA., New York against Loan by OIL INDIA (USA)INC. for USD 50 million Rs.274.55 crore(Previous year Nil)

(ii) Commitments:

(i) The estimated amount of contracts remaining to be executed on Capital Account and not provided for in the accounts: - Rs.364.13 crore (Previous year Rs. 256.97 crore).

(ii) Company''s share in the amount of contracts remaining to be executed on Capital Accounts and not provided for in the account as on 31.03.2013 in respect of the Joint Ventures is Rs.0.09 crore (Previous year Rs. 0.02 crore).

(iii) Balance of Minimum Work Program Commitment (MWP) by OIL under Production Sharing Contracts (PSCs) entered for NELP Blocks with Govt. of India is Rs.3094.53 crore.(Previous year Rs. 3248.68 crore).

1.12 Reclassification/Regrouping:

Previous year figures have been reclassified / regrouped wherever necessary to conform to current year figures.


Mar 31, 2012

A. During the year, the company has increased authorised share capital from Rs. 500 crore to Rs. 2000 crore.

b. In terms of the approval of shareholders vide its resolution dated 21.03.2012 the Bonus issue committee of the Board of Directors of the Company have issued on 02.04.2012. 36,06,81,573 new fully paid up equity shares of Rs.10 each as bonus shares by capitalising a sum of Rs. 3,606,815,730/- out of the "Securities Premium Account" in the proportion of 3 equity bonus shares of the Company for every 2 equity fully paid up shares of Rs. 10 each to the holders of the equity shares on the record date as on 31.03.2012.

(a) Lands for projects and drillings operations are acquired primarily through bipartite negotiation with the occupiers/pattadars. In case, however, bipartite negotiation fails, lands are acquired with the intervention of government officials under the relevant land laws. Upon successful negotiation or government order, as the case maybe, consent letters are obtained from the occupiers/pattadars and surface compensation for the standing crops on the lands are settled and the same are capitalized either as Land under Possession or as Pre Producing / Producing Properties. At the same time occupiers/pattadars are advised to submit documentary evidences in support of their legal possession of the lands. Pending submission of these documents and upon settlement of surface compensation, liability for land value is determined and capitalised under respective heads. Land cost forming part of Pre-Producing/Producing Properties is either amortized or charged off depending on discovery in the well. Land cost forming part of the Land under Possession is not amortized. Out of the total lands measuring 21569B 3K 10L under the possession of the company, lands measuring 6271B 1K 3L have been mutated up to 31.03.2012. The Company is in the process of strengthening the acquisition process and the mutation of those lands including maintenance of systematic records thereof.

(b) To facilitate gas supply to Brahmaputra Cracker and Polymers Limited (BCPL), the company is requried to construct/modify additional/ existing gas distribution network. Towards this, Government of India has agreed to release capital subsidy of Rs. 215.00 crore to the Company. Total Grant received till 31.03.2012 is Rs. 69.65 crore. Out of this, an amount of Rs.41.25 crore has been adjusted against Tangible Assets on capitalisation. Balance amount of Rs.28.40 crore is kept under 'Current Liabilities' pending capitalisation of the respective assets.

(#) There are certain wells which have been temporarily abandoned / shut in & the possibility of commercial hydrocarbon discovery from these wells is remote. Hence, a provision for an amount of Rs. 265.53 crore (Previous year k Nil) has been made in the books during the year.

In respect of 2 PEL (Petroleum Exploration License) Areas, whose license have expired and renewal of the same is pending with the Government of India. Provision of Rs. 80.06 crore (Previous year Rs. Nil) has been made in the accounts during the year being the carrying amount of expenditure lying in Pre Producing Properties as on 31.03.2012.

Provision for Rs.71.58 crore (Previous Year Rs.71.12 crore) and Rs. 14.60 crore (Previous Year Rs.Nil) being the company's share of expenditure in Pre Producing Properties in Farsi Block and Libya Block respectively has been created due to geopolitical instability in respective countries.

b. Inter Corporate Loan (PSU) represents Rs. 131 crore loan given to M/s DNP Limited for a period of 10 years, which carries an interest of 10% per annum (8% per annum upto 19.04.2011). Repayment of loan will commence 2 years after commercial operation date which is 01.04.2011.

a. As per directive of MOP&NG, Crude Oil price calculation is based on the monthly average price of benchmarked International Basket of Crude Oil which is further adjusted for quality differential. As per directive of MOP&NG, Discount is allowed on the sale of crude oil and LPG.

b. LPG price is governed as per the MOU between the Company and Indian Oil Corporation Ltd.

c. Natural Gas price is as notified by MOP&NG and applicable to operating areas of the company. Subsidy extended to the eligible customers in North East India is reimbursed by Government of India and shown as Other Operating Revenue.

NOTE-1: Additional Notes

1.1 Disclosure pursuant to Accounting Standard (AS) 15 (Revised 2005) - Employee Benefits:-

1.1.1 Defined Contribution Plans

The Company's contribution to Provident Funds for employees and executives is Rs. 67.38 crore (Previous year Rs. 95.08 crore).

1.1.2 Defined Benefit Plans

The various Benefit Plans which are in operation are Gratuity Fund, Oil India Employee's Pension Fund (OIEPF), Oil India Pension Fund (OIPF), Leave Encashment Fund, Post Retirement Medical Benefit and Long Service Award. The present value of the obligation is determined based on actuarial valuation made at the end of the financial year using the Projected Unit Credit Method, which recognizes each period of service as given rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation. Long Service Award liability as on 31.03.2012 determined by the actuary, has been charged to Statement of Profit and Loss.

The amount recognised in the Balance Sheet as the present value of the defined benefit obligation is net of the fair value of plan assets at the Balance Sheet date.

1.2 Information as per Accounting Standard (AS) 16 "Borrowing Costs"

Borrowing cost capitalized during the period is Rs. Nil (Previous year Rs.Nil).

1.3 Information as per Accounting Standard (AS) 18 "Related Party Disclosures"

a) Related party relationships

Name of related parties and nature of relationship (excluding the State controlled entities):

i) Joint Ventures (Unincorporated):

ii) Key Management Personnel

Whole time Functional Directors:

a) Mr. S.K.Srivastava Chairman and Managing Director (w.e.f. 01.05.2012)

b) Mr. N.M. Borah Chairman and Managing Director (upto 30.04.2012)

c) Mr. T.K. Ananth Kumar Director (Finance)

d) Mr. B.N. Talukdar Director (Exploration & Development)

e) Mr. N.K. Bharali Director (HR & BD)

f) Mr. S. Rath Director (Operations)

Part-time Directors:

a) Mr. Ghanshyambhai Hiralal Amin Independent Director

b) Mr. Pawan Kumar Sharma Independent Director

c) Mr. Alexander Koipuram Luke Independent Director

d) Mr. Arun Kumar Gupta Independent Director (upto 29.07.2011)

e) Mr. Vinod Kumar Misra Independent Director

f) Mr. Sushil Khanna Independent Director

Other Officers

a) Mr. S.R. Krishnan Company Secretary

1.4 Information as per Accounting Standard (AS) 19 "Lease"

The Company has signed a "Participating Agreement" (PA) for the product pipeline in Sudan with ONGC Videsh Limited (OVL) for a 10% Participating Interest (balance 90% being with OVL) in the pipeline project awarded by Ministry of Energy & Mining (MEM), Govt, of Sudan (GOS) through a separate agreement entered into by OVL in this regard. The construction of the pipeline project was completed on 01.09.2005 and handed over to MEM under Build, Own, Lease and Transfer (BOLT) basis.

The "PA" entered into between OVL and the Company is neither intended nor shall be construed as creating a partnership or joint venture among the parties. Hence, accounting has not been done following "Joint Venture Accounting Policy" but the agreement for providing finance for the project in rupees to OVL and to share lease rentals receivable from MEM has been treated as "Finance Lease Activity" as envisaged under Accounting Standard (AS) 19 issued by The Institute of Chartered Accountants of India and accordingly accounted for.

Note:

i. Amount recoverable from M/s. Suntera Resources Ltd. against the expenditure incurred in some NELP Blocks stands at Rs. 53.22 crore (Previous year Rs. 49.81 crore). M/s Suntera Resources Ltd. has not paid the amount despite reminders and provision has been made in books of accounts for the entire amount .The Company applied to Directorate General of Hydro- carbon (DGH) under Ministry of Petroleum and Natural Gas (MOP&NG), New Delhi for acquiring the Participating Interest (PI) of M/s Suntera Resources Ltd in these NELP Blocks. Approval from DGH has since been received to acquire the participating interest of M/s Suntera Resources Ltd in these NELP Blocks .No further expenditure pertaining to these NELP Blocks has been debited to M/s Suntera Resources Ltd and no cash calls have been raised on M/s Suntera Resources Ltd. The revised PSC in this regard is yet to be executed.

ii. The required disclosures under AS 27 related to relinquished / under relinquishment JVCs against which full provision has been made are not disclosed since it does not affect the related disclosures made above materially.

1.5 Income Tax

(a) For Assessment Year (AY) 2003-04 to 2007-08, the appeal is pending for disposal before the Income Tax Appellate Tribunal (ITAT) with respect to the Company claim of benefit u/s 80-IB / 80-IC of the Income Tax Act, 1961, herein after called as the Act.

(b) For AY 2008-09 and 2009-10, the appeal is pending for disposal before the Commissioner of Income Tax (CIT(A)) with respect to the Company claim of benefit u/s 80-IC of the Act.

(c) The resulting interest, whether receivable or payable, shall be accounted for on finalization of the matter by an appellant authority.

The benefit u/s 80-IC of the Act has not been considered to make the provisions of tax in the books.

1.6 Disclosure under Section 441A of the Companies Act:

Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

1.7 Other disclosure under Schedule VI to the Companies Act, 1956

I. Contingent Liabilities and commitments

i. Contingent libilities

(a) In respect of claims under Income Tax, Sales Tax, Service Tax and Other Acts

(i) In respect of claims under Sales Tax Act : Rs. 5.58 crore (Previous year Rs. 5.58 crore)

ii) In respect of claims under Central excise Acts : Rs.26.19 crore (Previous year Rs.14.27 crore)

iii) In respect of claims under Other Acts : Rs. 661.73crore(Previous year Rs. 561.67 crore)

(b) In respect of claims other than under Income Tax, Sales Tax, Service Tax and Other Act :

(i) Claims by contractors pending decision in Arbitration / Courts. : Rs.128.53crore (Previous year Rs.503.33 crore)

(c) In respect of share of claim on JVC/PSC account : Rs. 31.80crore (Previous year Rs. 26.39 crore)

(ii) Commitments:

(i) The estimated amount of contracts remaining to be executed on Capital Account and not Provided for in the accounts: -

Rs. 256.97 crore (Previous year Rs. 172.74 crore).

(ii) Company's share in the amount of contracts remaining to be executed on Capital Accounts and not provided for in the account as on 31.03.2012 in respect of the Joint Ventures is Rs. 0.02 crore (Previous year Rs. Nil).

1.8 RECLASSIFICATION/REGROUPING:

The financial statements have been prepared as per the amended Schedule VI to the Companies Act, 1956 which had an impact on the presentation. Accordingly, previous year figures have been reclassified / regrouped wherever necessary to conform to current year figures.


Mar 31, 2011

1. (i) (a) With effect from 01.04.2002, the price of Crude Oil and LPG are market determined in terms of the policy of the Government of India. Accordingly, the Crude Oil price was being determined based on the terms and conditions of the Memorandum of Understanding (MOU) signed with various buyers of Crude Oil for the period 01.04.2002 to 31.03.2004. Though the MOU / Crude Offtake and Sale Agreement (COSA) for the period effective from 01.04.2004 has not yet been finalized, the Company is continuing to bill and the buyers are continuing to pay on the terms and conditions of the aforesaid MOU for the period 01.04.2004 to 31.03.2011.

In terms of the notification from MOP&NG dated 01.05.2009, the Company w.e.f. 01.04.2008 has accounted for on a monthly average price of Crude Oil benchmarked to Basket Price of Crude Oil (ascertained from Reuter) after adjustment for Gross Product Worth (quality differential) and discount on account of Base Sediment & Water (BS&W).

(b) As regard LPG price, the same continues to be notified by Indian Oil Corporation Ltd. (IOC) every month.

(c) The price of APM Natural Gas has been revised by MOP & NG, Government of India vide its letter no. L-12015/8/10- GP dated 31.05.2010 at USD 4.20/ mmbtu inclusive of royalty at 10% on Net Calorific Value (NCV) basis w.e.f. 01.06.2010. For Customers in the North East, the net consumer price charged to the customers at 60% of USD 4.20/mmbtu i.e. USD 2.52/mmbtu on NCV basis. The difference between Producer Price and Consumer Price has been taken as Budget Claim from MOP& NG. For Non- APM customers, the same price of USD 4.20/ mmbtu inclusive of royalty at 10% has also been fixed w.e.f. 01.06.2010 vide letter no. L-12015/5/10-GP dated 28 .06.2010 from

MOP&NG. Similarly the gas price for gas sale in Rajasthan has also been revised at USD 4.20 / mmbtu inclusive of royalty at 10% on Net Calorific Value (NCV) basis w.e.f. 01.06.2010. Royalty @10% is being paid separately to the respective State Governments.

(ii) The MOP& NG, Government of India, vide Letter No.P-20012/11/2006-PP (Vol. II) dated 21.03.2011 allowed the Company to realize the sales tax and full amount of transportation charges in respect of its own Crude Oil sold to the refineries for the year ended 31.03.2011 also. Accordingly an amount of Rs. 27.15 crore (Previous year Rs. 27.33 crore) for transportation charges and Rs. 269.70 crore (Previous year Rs. 269.81 crore) for reimbursement of sales tax, respectively have been recognised during financial year 2010-11.

(iv) a. Pending finalization of the Transportation Tariff by the Government of India for Crude Oil, the Company has on a provisional basis accounted for the transportation income of Crude Oil from all the refineries as fixed by the Petroleum Planning & Analysis Cell (PPAC) for the year 2001-02 for the Forward Pumping Sector of the pipeline from Naharkatiya to Digboi and Bongaigaon (Sector-wise).

b. In regards to the transportation income in respect of Crude Oil of M/s Oil & Natural Gas Corporation Ltd. (ONGCL) & Canoro Resources Limited, are accounted on the basis of MOU/Crude Oil Transportation Agreement (COTA) signed with the respective companies.

c. In respect of the Reverse Pumping Sector between Barauni to Bongaigaon, Transportation Tariff has been revised by PPAC w.e.f. financial year 2008-09 and in the current year the income for the same has been recognised on that basis.

(v) The total Gas Reserve as on 31.03.2011 in Assam & Arunachal Pradesh has been ascertained field wise following Society of Petroleum Engineers (SPE) norms.

(vi) Exchange (gain)/loss of Rs. 1.40 crore {Previous year (Rs. 4.78) crore} includes, exchange (gain)/loss of Rs. Nil (Previous year Rs. Nil) related to Assets charged off in line with the changed Accounting Policy No.5 due to applicability of AS 11 (Revised).

(viii) The Company is holding in its safe custody, Fixed Deposit Receipts issued in its favour by Contractors / Suppliers as Security Deposit / Earnest Money amounting to Rs. 1.62 crore (Previous year Rs. 1.60 crore), which are not included in the accounts.

(ix) Borrowing cost capitalized during the period is Rs. Nil. 2. Disclosure pursuant to Accounting Standard (AS) 15 (Revised 2005) – Employee Benefits:- The Company has adopted AS 15 (Revised 2005) for Employee Benefits issued by ICAI as against erstwhile AS 15. Consequent to the adoption, the following disclosure related to accounting etc. are made as far as practicable under AS 15 (Revised 2005) requirement:

Defined Contribution Plans

The Company's contribution to Provident Funds for employees and executives is Rs. 95.11 crore (Previous year Rs. 48.60 crore).

Defined Benefit Plans

The various Benefits Plans which are in operation are Gratuity Fund, Oil India Employee Pension Fund (New), Oil India Pension Fund (Old), Leave Encashment, Post Retirement Medical Benefit and Long Service Award. The present value of the obligation is determined based on actuarial valuation made at the end of the financial year using the Projected Unit Credit Method, which recognizes each period of service as given rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation.

G. Notes on above

(i) In view of the amendment of the Payment of Gratuity Act 1972, the ceiling of Gratuity has been enhanced from the existing limit of Rs. 3.50 lakh to Rs. 10.00 lakh. Accordingly, the Company has adopted the revised limit for provisioning of Gratuity Liability based on the actuarial valuation.

(ii) Long Service Award liability as on 31.03.2011, determined by the actuary, has been charged to Profit and Loss Account.

(iii) The Company's Provident fund is exempted under section 17 of Employees' Provident Fund and Misc. Provisions Act, 1952. The Company has also taken exemption under Para 39 of Employees Pension Schemes 1995 and extending the Pension benefits through Oil India Employees Pension Fund. Conditions for grant of exemptions, stipulate that the employer shall make good the deficiency, if any, in the interest rate declared by the trust vis-à-vis statutory rate in case of Employee Provident Fund as well as the deficiency, if any in extending the pensioner benefits will be made good by the Company in the Employee Pension Fund.

(iv) The amount recognised in the Balance Sheet as the present value of the defined benefit obligation is net of the fair value of plan assets at the Balance Sheet date.

H. Employees cost includes:

(a) The company has finalised the pay revision of the unionised employees w.e.f 01.01.2007 and an amount of Rs. 256.57 crore (net of provision upto 31.03.2010 has been accounted for in the year 2010-11 under other adjustment of Rs. 220.02 crore and under employee cost Rs. 43.81 crore).

(b) The company has finalised the pay revision of the executive employees w.e.f 01.01.2007 and an amount of Rs. (34.06) crore (net of provision upto 31.03.2010 has been accounted for in the year 2010-11 under other adjustment of Rs. 139.54 crore and under employee cost Rs. 44.13 crore).

3. The Company has completed the process of IPO on 26.09.2009 and thus allotted 2, 64, 49, 982 Equity Shares of Rs. 10/- each to the public including employees of the Company. Accordingly the Issued, Subscribed and Paid-up Share Capital of the Company has increased to Rs. 240.45 crore. As the face value of shares of Rs. 10/- each were issued at a premium of Rs. 1040/- per share the sum of Rs. 2750.80 crore have been credited to "Security Premium Account".

Against the estimated expenditure of planned activities up to 31.03.2011 amounting to Rs. 4559.84 crore as per the 'Object Clause' of the Issue as declared in the Prospectus an amount of Rs. 3022.96 crore have been spent up to 31.03.2011.

The cost of the issue amounting to Rs. 32.17 crore has been amortized in seven equal quarterly installments over the period during which the proceeds of IPO is planned to be utilized by the Company i.e. up to 31.03.2011. Accordingly the total amount Rs. 32.17 crore has been charged as expenses upto 31.03.2011.

4. (i) Fixed Assets :

a. Land in possession of the Company, includes some areas for which title/conveyance deeds are yet to be executed and/or mutation in settlement records are pending, documentation formalities are in progress.

b. The Company has identified various Plant & Machinery, which are not in use for considerable time. Pending writing off of these assets from the gross block, the Company has taken a provision of Rs. 3.00 crore (Previous year Rs. (0.74) crore) during the financial year towards the difference between the WDV as on 31.03.2011 and 5% of original cost as the residual value of the respective assets.

c. For infrastructure development and to facilitate the supply of natural gas to Brahmaputra Cracker and Polymer Limited (BCPL), the Company will have to augment/ modify the existing gas pipeline network, construction of lean gas distribution network and setting up of gas sale off-take point with metering facility. The Government of India has agreed to release one time subsidy upto a maximum of Rs. 215.00 crore to the Company through BCPL, subject to incurring higher actual expenditure. The expenditure will be vetted by Engineers India Ltd. (EIL). Towards this arrangement, the Company has started incurring expenditure for various assets and claiming the amount in stages from BCPL after the same is vetted by EIL. BCPL has paid Rs. 35.26 crore to the Company up to 31.03.2011 in this regard. The Company is maintaining a separate record to identify the capital expenditure incurred and receipt of the claim till the completion of all the facilities. Necessary accounting related to subsidy/adjustment thereof with assets will be carried out on completion of the project.

(ii) Pre-Producing Property

A sum of Rs. 88.01 crore (Previous year Rs. 83.90 crore) is being allocated to Pre-producing Property Account from general overhead during the year ended 31.03.2011.

(iii) Liability for Well Abandonment Cost

During the year, the Company has changed the Accounting Policy 2. 2. on abandonment cost and started providing the full eventual estimated liability towards cost related to dismasting, abandoning and restoring of well sites. Such cost of well sites has been capitalized to Producing Properties when completed {with reference to Accounting Policy 2.1. (d)} and in case of dry wells it is charged to Profit and Loss Account. This has resulted in increase in Producing Properties by Rs. 153.54 crore and cost off dry wells by Rs. 8.95 crore with corresponding increase in well abandonment liability by Rs. 162.49 crore. This has also resulted in decrease in Profit before tax by Rs. 21.47 crore, due to increase in Depletion Cost by Rs. 12.52 crore and write off of abandonment cost relating to dry wells by Rs. 8.95 crore.

(iv) Impairment of Assets

In terms of the Significant Accounting Policy No. 6, the Company assessed the Cash Generating Assets for the Impairment as required under AS-28 issued by ICAI and found that no cash generating Asset needs impairment as on 31.03.2011.

(v) Sundry Debtors:

Sundry Debtors including the overdue amount are reconciled from time to time on an ongoing basis and are considered good and realizable, unless stated otherwise and provision made wherever considered necessary.

(vi) (i) Loans and Advances include :

(b) Advances recoverable in cash or in kind or for value to be received includes materials given on loan to Public Sector Undertakings amounting to Rs. 3.85 crore (Previous year Rs. 3.18 crore)

(c) Arising out of one time settlement with M/s. Indian Drugs and Pharmaceuticals Limited (IDPL), (a Government of India Undertaking) the loan amount of Rs. 15.00 crore was to be settled along with interest @ 5% p.a. as per the revival package of the unit. Since no significant improvement on the revival package is forth coming, the Company is continuing with the provision of Rs. 28.33 crore created in the books of accounts during the financial year 2008- 09 as against the principal and interest due from IDPL. No interest has been accounted for w.e.f 01.04.2009.

(d) In terms of the Joint Operating Agreement and the Memorandum and Articles of Association of Brahmaputra Cracker and Polymer Limited (BCPL), the Company has paid an amount of Rs. 32.47 crore to M/s. Brahmaputra Cracker and Polymer Limited (BCPL) towards acquisition of 32465729 Equity Shares of Rs. 10/- each which is shown as "Investments". Further, an amount of Rs. 22.88 crore paid during the year for acquisition of Equity Share is shown under "Loans & Advances" pending allotment.

(e) The Company has acquired 23% Equity Shares of DNP Limited and paid Rs. 24.38 crore as contribution to Equity Capital in the form of 24380000 Equity Shares of Rs. 10 each which is shown as "Investment". Further a sum of Rs. 6.65 crore was paid on 01.10.2010 towards Company's share of additional contribution to Equity Capital and is shown under "Loans and Advances" pending allotment.

(viii) Current Liabilities :

(a) Sundry creditors include materials received on loan from other Public Sector Undertakings amounting to Rs. 4.05 crore (Previous year Rs. 5.03 crore)

(b) Balance shown sundry creditors, claims recoverable and advances are reconciled from time to time on an on-going basis. Provisions, wherever considered necessary, have been made.

(ix) Micro, Small and Medium Enterprises Act, 2006 :

The Company has identified Micro, Small and Medium Enterprises (MSMEs) to whom the Company owes dues, which are outstanding as at 31.03.2011.

6. (a) The Assessing Officer (AO) rejected the claim of the Company u/s 80-IB / 80-IC of the Income Tax Act'1961 (IT Act) for assessment years 2003-04 to 2006-07. The Company preferred an appeal before the first Appellate Authority [CIT(A)] against the AO order. The appeal was decided in the Company's favour resulting into refund of Rs. 672.59 crore (including interest of Rs. 71.81 crore). The Income Tax Department (Department) preferred second appeal which is pending for disposal before the Income Tax Appellant Tribunal (ITAT). The accounting adjustment for the refund of section 80-IB and 80-IC of IT Act will be taken on finalization of such appeal by ITAT.

(b) For the assessment year 2007-08, the AO continued the disallowance of claim of the Company u/s 80-IC of IT Act. The Company preferred appeal before CIT(A) disputing the disallowance. The CIT(A), however, vide his order dated 23.04.2010 has confirmed the disallowance made by AO. The Company preferred an appeal in ITAT against the order of CIT(A) for the claim u/s 80-IC of IT Act.

(c) Further for the assessment year 2008-09, the AO once again disallowed the claim of the Company u/s 80-IC of IT Act. The Company's appeal before CIT(A) disputing such disallowance is pending for disposal.

No Contingent Liabilities exist in respect of above mentioned disallowance of claim u/s 80-IB / 80-IC of IT Act as the Company continued to make provisions for tax without considering the benefit u/s 80-IB / 80-IC of IT Act.

The Company has signed a "Participating Agreement" (PA) for the product pipeline at Sudan with ONGC Videsh Limited (OVL) for a 10% Participating Interest (balance 90% being with OVL) in the pipeline project awarded by Ministry of Energy & Mining (MEM), Govt. of Sudan (GOS) through a separate agreement entered into by OVL in this regard. The construction of the pipeline project was completed on 01.09.2005 and handed over to MEM under Build, Own, Lease and Transfer (BOLT) basis.

The "PA" entered into between OVL and OIL is neither intended nor shall be construed as creating a partnership or joint venture among the parties. Hence, accounting has not been done following "Joint Venture Accounting Policy" but the agreement for providing finance for the project in rupees to OVL and to share lease rentals receivable from MEM has been treated as "Finance Lease Activity" as envisaged under Accounting Standard (AS) 19 issued by The Institute of Chartered Accountants of India and accordingly accounted for.

The Company has been informed by OVL that the EPC contractor for constructing the pipeline has raised further invoices for an amount of approximately Rs. 115.46 crore (US$ 25.53 million) and OVL has in turn raised a claim on MEM of GOS as per the agreement between GOS and OVL. OIL's share related to both the claims i.e. by the pipeline contractor on OVL (though accepted by OVL) and OVL's claim on GOS shall be accounted for upon acceptance by GOS and on suitable amendment of repayment schedule by MEM. OVL has received an additional claim of Rs. 52.55 crore (US$ 11.62 million) which has not been acknowledged as debt in the books of the operator (OVL). Pending this, the Company's share of the amount claimed by the pipeline contractor has not been accounted for but disclosed under "Contingent Liabilities".

In terms of such "PA", the Company on 10.02.2011 has received the balance due of 9th Installment along with 10th & 11th Installments due on 30.06.2010 & 31.12.2010 respectively. Moreover the Company has also received, in terms of the agreement, the interest on the delayed rental payments by the MEM and the same is shown under miscellaneous income. The regular installments are accounted for as income from Finance Lease.

The Company has acquired 25% equity in Suntera Nigeria 205 Ltd., a company incorporated under the Laws of Nigeria, from Suntera Resources Ltd., Cyprus through "Share Purchase Agreement" (SPA) signed with them on 31st August, 2006 (effective dated 27th September, 2006) for Rs. 0.01 crore (Nigerian Naira 62502 USD 488.87 approximately) at par and also signed a Shareholders Agreement (SHA) with Suntera Resources Ltd. and IOCL, the other shareholders of the company Suntera Nigeria 205 Ltd. had entered into an Acquisition Agreement (AA) and Economic Interest Assignment Agreement (EIAA) with Summit Oil International Limited (original 100% Participating Interest holder in OPL-205 and the operators of the Block) on 10.05.2006 for acquiring 40% Participating Interest and 30% Economic Interest in onland Block OPL-205 in Nigeria. Suntera Nigeria 205 Ltd. also entered into a Joint Operating Agreement (JOA) and Technical Service Agreement (TSA) with Summit Oil International Limited on 10.05.2006 for providing the technical support for the operations in OPL-205. Accordingly, the Company indirectly, through 25% equity holding in Suntera Nigeria 205 Ltd. owns a combined Participating and Economic interest of 17.5% in OPL- 205. The Company is required to contribute its 25% share of all the expenses in the Block by way of loan to Suntera Nigeria 205 Ltd. as agreed by all the shareholders in the SHA, and accordingly a loan agreement has been signed on 30.08.2007. In terms of the loan agreement, the Company has disbursed loan amounting to Rs. 35.63 crore (US$ 78,01,050.31) as of 31.03.2011 carrying a simple interest of 8.75% per annum is payable. Accordingly, Rs. 7.89 crore (Previous year ended 31.03.2010 Rs. 7.89 crore) has been charged to Suntera Nigeria 205 Ltd. as interest up to 31.03.2011. As per the loan agreement with Suntera OPL-205 Limited, the principal amount along with simple interest @ 8.75% p.a. is repayable by 31.03.2011. However due to uncertainty of the project, the Company is doubtful about the recoverability of the principal amount and interest receivable upto 31.12.2009. Accordingly no amount is being recognized as interest w.e.f quarter ended 31.03.2010 onwards. Further provisions have also been made towards entire principal and interest outstanding amounting to Rs. 43.51 crore as on 31.03.2011. Accordingly exchange fluctuation on account of principal and interest as at 31.03.2011 has not been accounted for.

3. The consortium of Gujarat State Petroleum Corporation Limited (GSPCL), Oil India Limited (OIL) and Hindustan Petroleum Corporation Limited (HPCL) has been awarded Block 3 and Block 4 (offshore Egypt) offered under International Bid Round 2008 announced by M/s. Ganoub El Wadi Holding Petroleum Company (GANOPE), Egypt. GSPCL is the operator for the blocks with 50% participating interest (PI). OIL and HPCL both have 25% PI each in these blocks as non-operators. The Company has remitted its share of the signature bonus of USD 0.75 million for each block and shown as acquisition costs. The Company has also executed bank guarantee of USD 8.75 million and USD 7.25 million for its share of 5% of the total financial commitment for the blocks as per requirement of signing of Concession Agreements. GANOPE has informed the consortium that some concern has been raised by neighboring country related with the maritime boundaries of both the awarded blocks. The consortium members are in negotiation with GANOPE for resolving the issue and execution of the concession agreement.

4. The consortium of Oil India Limited (OIL), ONGC Videsh Limited (OVL), Indian Oil Corporation Limited (IOCL), Repsol YPF (Spain) and Petroliam National Berhad (PETRONAS) (Malaysia), has been awarded on 10.02.2010 Project I consisting of Carabobo I North and Carabobo I Central blocks in Venezuela's Orinoco belt under competitive bidding, for development of the Field. The project will be operated by a Mixed Company (MC), the contract for which has been signed on 12th May 2010 in

Venezuela between the state company and the successful bidders. Corporation Venezolana del Petroleo, S.A. (CVP) i.e. a wholly owned subsidiary of Petroleos De Venezuela S.A. (PdVSA), the national oil company of Venezuela holds 60% share of MC and remaining 40% is held jointly by INDOIL Netherlands BV (a consortium of OIL and IOCL), ONGC Videsh Limited, REPSOL (Spain) and Petronas (Malaysia) with Participating Interests of 7% (3.5% each for OIL & IOCL), 11%, 11% and 11% respectively.

OIL will be investing in the project in Venezuela through INDOIL, Netherlands B.V., a company acquired in The Netherlands (OIL's WOS in Sweden and IOC's WOS in Sweden holds 50% each in this company) which will be funded through WOS in Sweden and Cyprus. OIL will be infusing its financial commitments for 3.50% in Carabobo Project I in Venezuela through the Swedish Company OIL INDIA SWEDEN AB. OIL, as a Guarantor, has also given a Parent Company Guarantee towards its share of Minimum Work Commitment in the Carabobo Project to CORPORATION VENEZOLANA DEL PETROLEO, S.A., Caracas, Venezuela jointly and severally with Indian Oil Corporation Ltd. through INDOIL, Netherlands B.V., The Netherlands. During the year the Company paid ? 84.84 crore to OIL INDIA Sweden AB towards acquisition of 1374650 number of equity share for which allotment was made.

5. i) As per the terms of the Kharsang PSC, the applicable price for crude oil produced and saved from the field is to be ascertained online from Reuters' daily publication for the previous month. Accordingly the invoices are being raised by the operator of the field at the rates, as applicable.

ii) As per the terms of the respective PSCs, provision for Abandonment Costs is to be made and accordingly a sum of ? 0.11 crore (Previous year? 0.32 crore) has been provided through creation of a Sinking Fund as per Joint Operating Agreement. Such sinking Fund on cumulative basis has been disclosed separately in the Balance Sheet.

6. (A) The assets, liabilities, income and expenditure of the Joint ventures as shown above are ? 376.41 crore, ? 856.27 crore, ? 102.33 crore and ? 578.16 crore respectively (Previous year ? 356.44 crore, ? 56.33 crore, ? 98.05 crore and ? 398.17 crore respectively), being the proportionate value relating to Company's Participating Interest which have been incorporated in the books of accounts on the basis of Audited 5 nos. (Previous year 18 nos.) and Unaudited 37 nos. (Previous year 21 nos.) Statement of Accounts received from the respective operators. No material changes are expected by the Company in the Unaudited Statement of Accounts.

(B) The Company's Share of Contingent liability and Capital Commitment, if any, under the PSC are shown in Note No.9 (A) & (C) below.

7. In terms of the Memorandum of Understanding dated 27.12.2005 the Company has entered into a consortium agreement dated 13.10.2006 with M/s. IOT Infrastructure & Energy Services Limited (formerly IOTL), for jointly bidding and securing a contract for laying a part of the Numaligarh - Siliguri Product Pipeline for the Company on 50:50 sharing basis and the consortium was awarded with a contract for laying 115 km pipeline at a total contract value of? 50.01 crore by the Company. On finalisation of accounts of the consortium after completion of the project, share of profit of the company was ?1.31 crore, which has been adjusted from the cost of such pipeline as per Accounting Standard.

8. Information as per Accounting Standard (AS) 18 "Related Party Disclosures" issued by ICAI.

a) Related party relationships

Name of related parties and description of relationship (excluding the State controlled entities):

-> Joint Ventures (Unincorporated):

1 AA-ONN-2002/3

2 MZ-ONN-2004/1

3 AA-ONN-2004/1

4 AA-ONN-2004/2

5 RJ-ONN-2004/2

6 RJ-ONN-2004/3

8 KG-ONN-2004/1

9 RJ-ONN-2005/2

10 Kharsang PSC

11 AAP-ON-94/1

12 SR-OS-94/1

13 GK-OSJ-3

14 CY-DWN-2001/1

15 KG-DWN-2009/1

16 RJ-ONN-2000/1

17 CR-ON-90/1

18 KG-OSN-2009/4

19 Shakthi, Gabon

20 Area 95/96, Libya

21 Timor Leste-Block 'K', East Timor

22 Block 82, Yemen

23 Block 82, Yemen

-> Associates :

a) IOTL - OIL Consortium

-> Key Management Personnel

Whole time Functional Directors:

a) Mr. N.M. Borah Chairman and Managing Director

b) Mr. T.K. Ananth Kumar Director (Finance)

c) Mr. B.N. Talukdar Director (Exploration & Development)

d) Mr. N.K. Bharali Director (HR & BD) from 14.09.2010

e) Mr. S. Rath Director (Operation) from 31.03.2011

Part-time Directors:

a) Mr. Ghanshyambhai Hiralal Amin Independent Director

b) Mr. Pawan Kumar Sharma Independent Director

c) Mr. Alexander Koipuram Luke Independent Director

d) Mr. Arun Kumar Gupta Independent Director

e) Mr. Vinod Kumar Misra Independent Director

f) Mr. Sushil Khanna Independent Director

Other Officers

a) Mr. S.R. Krishnan Company Secretary

9. (A) Contingent Liabilities :

Claims against the Company not acknowledged as debts amounting to Rs. 1112.03 crore (Previous year Rs. 640.95 crore) include:

(a) In respect of claims under Income Tax, Sales Tax, Service Tax and Other Acts :

(i) Rs. 17.94 crore (Previous year Rs. 16.11 crore):- Demand raised by the District Revenue Authorities on account of premium / revenue on Government ceiling surplus land occupied by the Company.

(ii) Rs. 13.12 crore (Previous year Rs. 13.12 crore) – Demand raised by District Revenue Authorities on Account of revised rate of Land revenue against which has been disputed by the Company and obtained Stay from the Gauhati High Court.

(iii) Rs. 3.66 crore (Previous year Rs. 3.38 crore) being the demand raised by Govt. of Rajasthan for alleged short payment of PEL fee and penalty thereon, which has been disputed by the Company.

(iv) Rs. 526.78 crore (Previous year Rs. 436.13 crore) being the tax imposed under "Assam Taxation (on specified land) Act 2004", the validity of the imposition of which has been challenged by the Company before the Gauhati High Court.

(v) Rs. 0.17 crore (Previous year Rs. 0.17 crore) – Demand raised by Govt. of Orissa under Orissa Entry Tax Act for material purchased for drilling operation for Block MN-ONN-2000/1.

(vi) Rs. 5.58 crore (Previous year Rs. 5.58 crore) – Demand raised by the Sale Tax authority on Account Assam VAT and CST Act pending the adjustment of the refundable to the Company by the Sales Tax Authority under Assam General Sales Tax Act to the tune of Rs 3.66 crore for which Assessment order has been recieved..

(vii) Rs. 0.79 crore (Previous year Rs. Nil) – Being the demand raised by Commissioner of Central Excise, Jodhpur for Service Tax on PDVSA Contract appeal against the same is being pending for disposal before CESTAT, New Dehli.

(viii) Rs. 14.27 crore (previous year- Rs. Nil) - Demand raised by Commissioner Central Excise, Dibrugarh as an Excise Duty on Condensate, under Section 11A along with interest to be accrued thereon for delayed payment of duties of excise under Section 11AB of the Central Excise Act, 1944 and penalty of Rs. 10000/- under Rule 27 of the Central Excise Rules 2002 for contravention of the various provisions of the Rule 4,6 and 11 of the Central Excise Rules 2002. An appeal in CESTAT, Kolkata is being filed against the order.

(b) In respect of claims other than under Income Tax, Sales Tax, Service Tax and Other Act :

(i) Rs. 503.33 crore (Previous year Rs. 139.93 crore):- Claims by contractors pending decision in Arbitration / Courts.

(c) In respect of share of claim on JVC/PSC account :

(i) Rs. 0.75 crore (Previous year Rs. 0.75 crore) being the value of 19.28 GLK2D Seismic Survey carried out in one of the block in Karbi Anglong, Assam.

(ii) Rs. 14.09 crore (Previous year Rs. 14.12 crore) being proportionate (45%) value of claim on OIL for 3.389 billion FCFA raised by Mr. Paul Tomo, Power of Attorney Holder of M/s. Import Commerce General (IGC) in Block "Shakthi", Gabon (JV).

(iii) Rs. 11.55 crore (Previous year Rs. 11.66 crore) being the Company's share of claim made by the Sudan Pipeline contractor on OVL, pending acceptance by the MEM Govt. of Sudan.

(B) Letter of Credit and Bank guarantees.

(i) Letters of Credit outstanding as on 31.03.2011 amounting to Rs. 78.84 crore (Previous year Rs. 24.38 crore) for which there is a floating charge on Current Assets of the Company.

(ii) Rs. 353.58 crore (Previous year Rs. 216.78 crore):- Bank Guarantee in US Dollars of 75.92 million (Previous year USD 44.66 million) issued by SBI CAG Branch, Kolkata in favour of Ministry of Petroleum & Natural Gas, Govt. of India towards Company's obligation under various rounds of Production Sharing Contracts of NELP.

(iii) Rs. 79.14 crore (Previous year Rs. 79.14 crore):- Guarantee / Standby Letter of Credits in US dollars of 16.00 million (Previous year USD 16.00 million) issued in favour of Ganoub Ei Wadi Holding Petroleum Company, Cairo, Egypt for Block No. 3 & 4, Egypt, towards company's share of the total financial commitment for the blocks as per requirement of signing the concession agreement.

(iv) Rs. Nil (Previous year Rs. 24.77 crore) :- Bank Guarantee issued by HDFC Bank Ltd., New Delhi in favour of National Stock Exchange of India Limited for security deposit for listing of shares.

(v) Rs. 15.59 crore (Previous year Rs. 15.59 crore) :- Bank Guarantee for USD 3.2 million (Previous year USD 3.2 million) issued in favour of Autoridade National Dp. Petrolo – Anp Ala Leste Do Palacio Do Governo, towards OIL's share of 12.5% Participating Interest of the Minimum Work Programme in Deep Water Block "K" in Democratic Republic of Timor Leste.

(vi) Rs. 8.89 crore (Previous year Rs. 22.45 crore):- Bank Guarantee issued for USD 2.00 million (Previous year USD 5 million) by HDFC Bank Limited, New Delhi for five PEL areas allotted to the company.

(vii) Rs. 0.01 crore (Previous year - Rs. 0.01 crore) – Bank Guarantee issued on behalf of Pipeline Telecommunication system.

(C) (i) The estimated amount on account of contracts remaining to be executed on Capital Account and not provided for in the accounts :- Rs. 172.74 crore (Previous year Rs. 170.37 crore).

(ii) Company's share of amount of contracts remaining to be executed on Capital Accounts and not provided for in the account as on 31.03.2011 in respect of the Joint Ventures is Rs. Nil (Previous period Rs. Nil).

(10) Previous period's figures have been reclassified / regrouped wherever necessary to conform to current period's classifications.


Mar 31, 2010

1. (i) (a) With effect from 01.04.2002, the price of Crude Oil and LPG are market determined in terms of the policy of the Government of India. Accordingly, the Crude Oil price was being determined based on the terms and conditions of the Memorandum of Understanding (MOU) signed with various buyers of Crude Oil for the period 01.04.2002 to 31.03.2004. Though the MOU / Crude Offtake and Sale Agreement (COSA) for the period effective from 01.04.2004 has not yet been fi nalized, the Company is continuing to bill and the buyers are continuing to pay on the terms and conditions of the aforesaid MOU for the period 01.04.2004 to 31.03.2010.

In terms of the notifi cation from MOP&NG dated 01.05.2009, the Company w.e.f. 01.04.2008 has accounted for on a monthly average price of Crude Oil benchmarked to Basket Price of Crude Oil (ascertained from Reuter) after adjustment for Gross Product Worth (quality differential) and discount on account of Base Sediment & Water (BS&W).

(b) As regard LPG price, the same continues to be notifi ed by Indian Oil Corporation Ltd. (IOC) every month.

(c) The price of Natural Gas was revised by the Ministry of Petroleum and Natural Gas, (MOP&NG) Government of India vide letter No. L-12015/5/04-GP (i) dated 20th June, 2005. The revised price applicable w.e.f. 01.07.2005 in respect of APM gas quantity, being the quantity of gas produced as on 30.06.2005 and sold to consumers other than those with whom the Company had signed Gas Sale and Purchase Agreement (GSPA) with mutually agreed price. The gas price for gas sale in Rajasthan is governed by the MOU dated 11th October, 2004 between the Company and GAIL India Limited, which is a mutually agreed price.

(ii) The MOP&NG, Government of India, vide its letter dated 22.04.2010 allowed the Company to realize the sales tax and full amount of transportation charges in respect of its own Crude Oil sold to the refi neries for the financial year 2009-10, similar to the decision in the previous financial years.

(iii) In terms of the decision of Government of India, MOP&NG, vide letter no. P-20012/28/97-PP dated 23.07.2004 and further communications in this regard, the Company during the year ended 31.03.2010 has allowed a discount Rs. 148990.89 lakh (Previous year Rs 294853.19 lakh) on the sale of Crude Oil and Rs. 5890.98 lakh (Previous year Rs 7475.48 lakh) on the sale of LPG. Accordingly, the sales revenue in respect of Crude Oil and LPG are net of the aforesaid discounts which have the effect of reduction of profi t for the respective years by such amounts.

(iv) Pending fi nalization of the Transportation Tariff by the Government of India for Crude Oil, the Company has on a provisional basis accounted for the Transportation Income of Crude Oil from all the refi neries as fi xed by the Petroleum Planning & Analysis Cell (PPAC) for the year 2001-02. In regards to the Transportation Income in respect of Crude Oil of M/s Oil & Natural Gas Corporation Ltd. (ONGCL), Conoro Resources Limited and M/s Bongaigaon Refi nery and Petrochemicals Limited the same are accounted for based on the MOU/Crude Oil Transportation Agreement (COTA) signed with the respective companies.

(v) The total Gas Reserve as on 31.03.2010 in Assam & Arunachal Pradesh has been ascertained fi eld wise following SPE norms.

(vi) Exchange gain of Rs. 501.83 lakh (Previous year loss of Rs. 615.08 lakh) includes, exchange gain of Rs nil (Previous Year Rs. Nil) related to Assets charged off in line with the changed Accounting Policy no. 5 due to applicability of AS 11 (Revised).

2. Disclosure pursuant to AS 15 (Revised 2005) – Employee Benefi ts:-

The Company has adopted AS 15 (Revised 2005) for Employee Benefi ts issued by ICAI as against erstwhile AS 15. Consequent to the adoption, the following disclosures related to accounting, etc are made as far as practicable under AS 15 (Revised 2005) requirement:

Defined Contribution Plans

The Companys contribution to Provident Funds for employees and executives is Rs. 4859.60 lakh (Previous year Rs. 4085.99 lakh).

Defined Benefit Plans

The various Benefi ts Plans which are in operation are Gratuity Fund, Pension Funds, Leave Encashment, Leave Fare Assistance/ Leave Travel Concession, Post Retirement Medical Benefi t and Long Service Award. The present value of the obligation is determined based on Actuarial valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefi ts entitlement and measures each unit separately to build up the fi nal obligation.

F. Notes on above

(i) In view of the amendment of the Payment of Gratuity Act 1972, the ceiling of Gratuity has been enhanced from the existing limit of Rs 3.50 lakh to Rs. 10.00 lakh. Accordingly the Company has adopted the revised limit for provisioning of Gratuity liability based on the actuarial valuation.

(ii) Long Service Award liability as on 31.03.2010, as per actuarial determination has been charged to Profi t and Loss Account.

(iii) The Companys Provident fund is exempted under section 17 of Employees Provident Fund and Misc. Provisions Act, 1952. The Company has also taken exemption under Para 39 of Employees Pension Schemes 1995 and extending the Pension benefi ts through Oil India Employees Pension Fund. Conditions for grant of exemptions stipulate that the employer shall make good the defi ciency, if any, in the interest rate declared by the trust vis-à-vis statutory rate in case of Employee Provident Fund as well as the defi ciency, if any in extending the pensioner benefi ts will be made good by the Company in the Employee Pension Fund.

(iv) The amount recognised in the Balance Sheet as the present value of the defi ned benefi t obligation is net of the fair value of plan assets at the Balance Sheet date.

G. Employees cost includes:

(a) Rs 5787.05 lakh for the year, resulting into total provision to Rs. 35120.09 lakh unto 31.03.2010 (Previous year Rs. 29333.04 lakh ) being the amount estimated pending fi nalisation and full implementation of the pay revision of unionized as well as executive employees (including Board level) of the Company which is due for revision with effect from 01.01.2007.

(b) Rs. 43193.29 lakh (Previous year Rs. 40399.81 lakh) being the amount estimated according to Actuarial Valuation of employees benefi ts for future services as required under AS-15.

3. During the year the Company has completed the process of IPO on 26.09.2009 and thus allotted 2,64,49,982 Equity Shares of Rs. 10/- each to the public including employees of the Company. Accordingly the Issued, Subscribed and Paid-up Share Capital of the Company has increased to Rs. 24045.44 lakh. As the face value of shares of Rs. 10/- each were issued at a premium of Rs 1040/- per share the sum of Rs. 275079.81 lakh has been accounted for in Security Premium Account in Balance Sheet.

Against the estimated expenditure of planned activities up to 31.03.2011 amounting to Rs. 455984.70 lakh as per the Object of the Issue declared in the Prospectus an amount of Rs. 148443.40 lakh, as certifi ed by the Monitoring Agency have been spent up to 31.03.2010. The unutilised issue proceeds along with internal resources have been invested in short term deposits and ICDs.

The cost of the issue amounting to Rs 3216.52 lakh will be amortized over the period during which the proceeds of IPO is planned to be utilized by the Company. Accordingly Rs 1378.51 lakh has been charged as expenses during the year ended 31.03.2010 and Rs 1838.01 lakh has been carried over under the head "Miscellaneous Expenditure" in the Balance Sheet as on 31.03.2010.

4. (i) Fixed Assets:

A. Land in possession of the Company, includes some areas for which title / conveyance deeds are yet to be executed and / or mutation in settlement records is pending. Documentation formalities are in progress.

B. The Company has identifi ed various Plant & Machinery, which are not in use for considerable time. Pending writing off of these assets from the gross block, the Company has taken a provision of Rs. (73.59) lakh (Previous year Rs (78.50) lakh) during the year towards the difference between the WDV as on 31.03.2010 and 5% of original cost as the residual value of the respective assets.

C. For infrastructure development and to facilitate the supply of natural gas to Brahmaputra Cracker and Polymers Limited (BCPL), the Company will have to augment / modify the existing gas pipeline network, construction of lean gas distribution network and setting up of gas sale off-take point with metering facility. The Government of India has agreed to release one time subsidy upto a maximum of Rs. 21500.00 lakh to the Company through BCPL, subject to incurring the actual expenditure more than that. The expenditure will be vetted by Engineers India Ltd. (EIL). Towards this arrangement, the Company has started incurring expenditure for various assets and has been claiming the amount in stages from BCPL after the same is vetted by EIL. BCPL has deposited Rs. 3093.47 lakh to the Company up to 31.03.2010 in this regard. Pending completion of all the facilities, the Company is maintaining the separate identity to record capital expenditure and the receipt of the claim till incurring the total expenditure on capital assets and receipt of fi nal amount of subsidy. Necessary accounting related to subsidy/adjustment thereof with assets will be carried out on completion of the project.

D. The cost of infrastructure which are in the nature of Corporate Social Responsibility (viz. Delhi Public School (DPS), Duliajan and some other assets) amounting to Rs 583.83 lakh has been charged off as expense in the Accounts of the Company for year ended 31.03.2010.

(ii) Pre-Producing Property

A sum of Rs. 8389.89 lakh (Previous year Rs. 8321.93 lakh) is been allocated to Pre-producing Property Account from general overhead.

(iii) Impairment of Assets

In terms of the Signifi cant Accounting Policy No. 6, the Company assessed the Cash Generating Assets for the Impairment as required under AS-28 issued by ICAI and found that no cash generating Asset needs impairment as on 31.03.2010.

(iv) Sundry Debtors:

Sundry Debtors including the overdue amount are reconciled from time to time on an ongoing basis and are considered good and realizable, unless stated otherwise and provision made wherever considered necessary.

(v) (i) Loans and Advances include:

(b) Advances recoverable in cash or in kind or for value to be received includes materials given on loan to Public Sector Undertakings amounting to Rs. 317.57 lakh (Previous year Rs. 294.00 lakh).

(c) Arising out of one time settlement with M/s Indian Drugs and Pharmaceuticals Limited (IDPL), (a Government of India undertaking) the loan amount of Rs. 1500.00 lakh was to be settled along with interest @ 5% as per the revival package of the unit. Since no signifi cant improvement on the revival package is forth coming, the Company is continuing with the provision of Rs. 2833.16 lakh created in the books of Accounts during the financial year 2008-09 as against the principal and interest dues from IDPL. For the year ended 31.03.2010 no interest has been accounted for.

(d) In terms of the Joint Operating Agreement and the Memorandum and Articles of Association of Brahmaputra Cracker and Polymer Limited (BCPL), the Company has paid an amount of Rs 50,100 to M/s Brahmaputra Cracker and Polymer Limited (BCPL) towards acquisition of 5,010 shares of Rs 10 each. The amount paid was accounted under Investments. During the year 2009-10 BCPL has further allotted 26332149 equity shares of Rs. 10 each accordingly an amount of Rs. 2633.21 lakh is shown as "Investment" which was accounted as Loan & Advances in the previous year. The balance amount of Rs. 613.99 lakh is shown under "Loans & Advances" pending allotment.

(e) The Company has acquired 23% Equity Shares of DNP Limited and paid Rs. 2438.00 lakh toward its contribution to Equity Capital. The allotment of 24380000 equity shares of Rs. 10/- each was done during the financial year 2009-10 is shown as "Investment".

(f) OIL has entered into a MOU with HPCL, GAIL India limited, Mittal Energy Investment Pte. Ltd. and TOTAL France S.A. on 18.10.2007 for setting up of an integrated Refi nery cum Petrochemical Complex at Vishakapatnam in Andhra Pradesh. However as on 31.03.2010, no provision has been kept in the books the project ceased to exist.

(g) Investment in associate is valued following the "Equity Method" as per AS-23 "Accounting of Investment in Associate in Consolidation".

(ii) Disclosure pursuant to clause 32 of the Listing Agreement

(a) Loans, Advances and Investments in its own shares by the Company and its subsidiary/associates Nil (Previous year Nil)

(b) Advances to associated "INDOIL Netherlands BV" Rs 7.85 lakh (Previous year Nil)

(c) Investment in wholly own subsidiary "Oil India Sweden AB" Rs. 6.45 lakh (Previous year Nil)

(vi) Current Liabilities:

Sundry creditors include materials received on loan from other Public Sector Undertakings amounting to Rs. 502.94 lakh (Previous Year Rs. 365.85 lakh)

(vii) Balance shown sundry creditors, claims recoverable and advances are reconciled from time to time on an on-going basis. Provisions, wherever considered necessary, have been made.

(viii) Micro, Small and Medium Enterprises Act, 2006:

The Company has identifi ed Micro, Small and Medium Enterprises (MSME) to whom the Company owes dues, which are outstanding as at 31.03.2010. There is no such Micro, Small and Medium Enterprises where outstanding balance is due for more than 45 days.

6. The Income Tax Assessing Offi cers had rejected claim of the Company for certain relief and concessions and further did not allow the discount on Crude Oil and LPG being allowed to Oil Marketing Companies (OMCs), as per the Government order/ notifi cation, as expenses for Assessment Years 2003-04 to 2006-07, due to which demand of Rs. 84023.00 lakh had been raised on the Company during the financial year 2007-08. The Company had preferred an appeal before the fi rst Appellate Authority against such order/demand and succeeded in the Appeal proceeding resulting into refund of Rs. 67259.59 lakh (including interest of Rs. 7180.56 lakh) during the financial year 2008-09 though the Income Tax Department has preferred second appeal before ITAT. Necessary Accounting action has been taken for the refund, except the provision relating to the claim under section 80-IB and 80-IC. On fi nalization of such appeal by ITAT necessary adjustments will be carried out.

For the Assessment Year 2007-08, the Assessing Offi cer continued the disallowance of both the above two claims of the Company in the Assessment Order and demanded Rs 71660.86 lakh, against which the Company has deposited Rs. 26950.00 lakh under protest. The Company has preferred appeal before CIT (A) disputing the assessment. CIT (A) vide his order dated 23.04.2010 allowed the issue of discount to the OMCs in favour of the Company but the claim of benefi t u/s 80-IC was disallowed. The order of the Assessing Offi cer for rectifying the original order in the terms of the appellate order is pending. The company is preferring second appeal before ITAT against such disallowances by CIT (A).

For the assessment year 2008-09, the Assessing Offi cer continued the disallowance of claim of benefi t u/s 80-IC but allowed the discount to OMCs as an allowable expenditure, based on the Committee of Disputes (COD) minutes dated 27.08.2009, in the assessment order and demanded Rs. 42541.78 lakh. The Company has preferred an appeal before CIT (A) disputing the disallowance.

No Contingent Liabilities arises in respect of above mentioned Orders as:- (a) Committee on Dispute (COD) constituted by Government of India has decided, that the discount to OMCs as an allowable expenses and not allowed Income Tax Department to agitate on the issue any further.

(b) While making the provision for Income Tax in its books of account the Company has not considered the benefi t available u/s 80-IB and 80-IC on conservative basis pending disposal of appeal by ITAT.

(vi) The Company has acquired 15% Participating Interest (PI) in the Onshore blocks 82 and 83, Republic of Yemen (Sl. No. C (7) & C (8) above). Both the areas are being operated by MEDCOENERGI through its 100% subsidiaries. The Production Sharing Agreements (PSA) for both the exploration blocks were signed on 13th April, 2008 and Government of Yemen accorded its approval on 17th March, 2009. The Operator has initiated actions to start the Seismic commitment of the MWP

Abbreviations used in (A), (B), (C) and (D) above:

ONGCLOil & Natural Gas Corporation Limited

IOCLIndian Oil Corporation Limited

GAILGAIL(India) Limited

BPCLBharat Petroleum Corporation Ltd

HPCLHindustan Petroleum Corporation Ltd.

GANOPE Ganoub El Wadi Holding Petroleum Company, Egypt.

GSPCLGujarat State Petroleum Corporation Ltd.

HOEC Hindustan Oil Exploration Ltd

GGRGeo Global Resources (Barbados) Inc.

SUNTERASuntera Resources Ltd.

SHIVVANIShivvani Oil & Gas Exploration Services Ltd.

OIL Oil India Limited

GeoenproGeo Enpro Petroleum Limited

POCPremier Oil Cachar BV

JEPLJubilant Enpro Pvt Ltd.

Geo-PetrolGeo-Petrol International Inc.

EOL Essar Oil Limited

RIL Reliance Industries Ltd.

Marvis Marvis Pte Ltd.

OVL ONGC Videsh Ltd

SummitSummit Oil International Ltd

PIBBV Petrobras International Braspetro

SIPEX Sonatrach International Petroleum Exploration and Production Corporation BVI

RE&P DMCCReliance Exploration & Production DMCC

HMEL HPCL Mittal Energy Ltd. ACL Assam Co. Ltd.

MEDCOENERGI Pt. Medco Energi Internasional Tbk

MEDCO AMEDMedco Yemen Amed Limited (100% Subsidiary of MEDCO ENERGI)

MEDCO ARAT Medco Yemen Arat Limited (100% Subsidiary of MEDCO ENERGI)

ANPAutoridade Nacionale Do Petroleo ANP Ala Leste Do Palacio Do Governo, Dili, Timor Leste

YGCOGYemen General Corporation for Oil & Gas

CVP Corporation Venezolana del Petroleo, S.A.

(E) The Company has signed a "Participating Agreement" (PA) for the product pipeline at Sl. No. C above with ONGC Videsh Limited (OVL) for a 10% Participating Interest (balance 90% being with OVL) in the pipeline project awarded by Ministry of Energy & Mining (MEM), Govt. of Sudan (GOS) through a separate agreement entered into by OVL in this regard. The construction of the pipeline project was completed on 01.09.2005 and handed over to MEM under Build, Own, Lease and Transfer (BOLT) basis.

The "PA" entered into between OVL and OIL is neither intended nor shall be construed as creating a partnership or joint venture among the parties. Hence, accounting has not been done following "Joint Venture Accounting Policy" but the agreement for providing fi nance for the project in rupees to OVL and to share lease rentals receivable from MEM has been treated as "Finance Lease Activity" as envisaged under Accounting Standard (AS) 19 issued by The Institute of Chartered Accountants of India and accordingly accounted for.

The Company has been informed by OVL that the EPC contractor for constructing the pipeline has raised further invoices for an amount of approximately Rs. 11658.67 lakh (US$ 25.53 million) and OVL has in turn raised a claim on MEM of GOS as per the agreement between GOS and OVL. OILs share related to both the claims i.e. by the pipeline contractor on OVL (though accepted by OVL) and OVLs claim on GOS shall be accounted for upon acceptance by GOS and on suitable amendment of repayment schedule by MEM. OVL has received an additional claim of Rs. 5306.55 lakh (US$ 11.62 million) which has not been acknowledged as debt in the books of the operator (OVL). Pending this, the Companys share of the amount claimed by the pipeline contractor has not been accounted for but disclosed under "Contingent Liabilities".

In terms of such "PA", the Company has partly received on 21.01.2010 its share of (9th) ninth installment of lease rentals due as on 31.12.2009. Moreover the Company has also received, in terms of the agreement, the interest on the delayed rental payments by the MEM and the same is shown under miscellaneous income. The regular installments are accounted for as income from Finance Lease.

(F) The Company has acquired 25% equity shares of Suntera Nigeria 205 Ltd. (a company incorporated under the Laws of Nigeria) from Suntera Resources Ltd., a company incorporated under the Laws of Cyprus. The other shareholders of Suntera Nigeria 205 Ltd. are Suntera Resources Ltd. and IOCL with 50% and 25% equity holding respectively. Suntera Nigeria 205 Ltd. holds participating interest of 40% and a further Economic Interest of 30% in onland Block OPL-205 in Nigeria in which the exploration work started. Further the said block (OPL-205) had a hydrocarbon (gas) discovery in structure "Otien". To appraise the discovery of the said prospect it was earlier decided to drill two more appraisal wells. Drilling of the fi rst well started on 24.11.2007 and was suspended in January, 2008 for future re-entry after acquisition of seismic data. Meanwhile OPL-205 was valid only till 19.01.2009. To retain the acreage and execute the drilling of the third well, the operator (SOIL) has obtained the Oil Mining Lease (OML) of the said block on 25.06.2009. The Title deed for OML is still awaited. Pending the receipt of the title deed for OML, the block activity has been kept under abeyance. The plan for future activities in the block has also been under continuous discussion between the shareholders of Suntera Nigeria 205 Ltd.

The Company has acquired 25% equity in Suntera Nigeria 205 Ltd., a company incorporated under the Laws of Nigeria, from Suntera Resources Ltd., Cyprus, through a Share Purchase Agreement (SPA) signed with them on 31st August, 2006 (effective dated 27th September, 2006), for Rs. 0.22 lakh (Nigerian Naira 62502 USD 488.87 approximately) at par and also signed a Shareholders Agreement (SHA) with Suntera Resources Ltd. and IOCL, the other shareholders of the company. Suntera Nigeria 205 Ltd. had entered into an Acquisition Agreement (AA) and Economic Interest Assignment Agreement (EIAA) with Summit Oil International Limited (original 100% Participating Interest holder in OPL-205 and the operators of the Block) on 10.05.2006 for acquiring 40% Participating Interest and 30% Economic Interest in onland Block OPL-205 in Nigeria. Suntera Nigeria 205 Ltd. also entered into a Joint Operating Agreement (JOA) and Technical Service Agreement (TSA) with Summit Oil International Limited on 10.05.2006 for providing the technical support for the operations in OPL-205. Accordingly, the Company indirectly, through 25% equity holding in Sunetra Nigeria 205 Ltd., owns a combined Participating and Economic interest of 17.5% in OPL- 205. The Company is required to contribute its 25% share of all the expenses in the Block by way of loan to Suntera Nigeria 205 Ltd. as agreed by all the shareholders in the SHA, and accordingly a loan agreement has been signed on 30.08.2007. In terms of the loan agreement, the Company has disbursed loan amounting to Rs. 3562.74 lakh (US$ 78,01,050.31) as of 31.03.2010 carrying a simple interest of 8.75% per annum is payable. Accordingly, Rs. 788.51 lakh (Previous year ended on 31.03.2009 Rs. 624.92 lakh) has been charged to Suntera Nigeria 205 Ltd. as interest up to 31.12.2010. As per the loan agreement with Suntera OPL-205 Limited, the principal amount along with simple interest @ 8.75% p.a. is repayable by 31.12.2010. However due to uncertainty of the project, the Company is doubtful about the recoverability of the principal amount and interest receivable upto 31.12.2009. Accordingly no amount has been recognised as interest for the quarter ended 31.03.2010. Further provisions have also been made towards entire principal and interest outstanding amounting to Rs. 4351.25 lakh as on 31.03.2010.

(G) The consortium of Gujarat State Petroleum Corporation Limited (GSPCL), Oil India Limited (OIL) and Hindustan Petroleum Corporation Limited (HPCL) has been awarded Block 3 and Block 4 (offshore Egypt) offered under International Bid Round 2008 announced by M/s. Ganoub El Wadi Holding Petroleum Company (GANOPE), Egypt. GSPCL is the operator for the blocks with 50% participating interest (PI). OIL and HPCL both have 25% PI each in these blocks as non-operators. The Company has remitted its share of the signature bonus of USD 0.75 million for each block and shown as Acquisition costs. The Company had also executed bank guarantee of USD 8.75 million and USD 7.25 million for its share of 5% of the total financial commitment for the blocks as per requirement of signing of Concession Agreements. GANOPE has informed the consortium that some concern has been raised by neighboring country related with the maritime boundaries of both the awarded blocks. The consortium members are in negotiation with GANOPE for resolving the issue and execution of the concession agreement.

(H) The consortium of Oil India Limited (OIL), ONGC Videsh Limited (OVL), Indian Oil Corporation Limited (IOCL), Repsol YPF (Spain) and Petroliam Nasional Berhad (PETRONAS) (Malaysia) has been awarded on 10.02.2010 Project 1 consisting of Carabobo 1 North and Carabobo 1 Central blocks in Venezuelas Orinoco belt under competitive bidding, for development of the Field. The project will be operated by a Mixed Company (MC), the contract for which has been signed on 12th May 2010 in Venezuela between the state company and the successful bidders. Corporatcion Venezolana del Petroleo, S.A. (CVP) i.e. a wholly owned subsidiary of Petroleos De Venezuela S.A. (PdVSA), the national oil company of Venezuela holds 60% share of MC and remaining 40% is held jointly by INDOIL Netherlands BV (a consortium of OIL and IOCL), ONGC Videsh Limited, REPSOL (Spain) and Petronas (Malaysia) with Participating Interests of 7% (3.5% each for OIL & IOCL), 11%, 11% and 11% respectively. OIL will be investing in the project in Venezuela through INDOIL Netherlands B.V., a company acquired in The Netherlands (OILs WOS in Sweden and IOCs WOS in Sweden holds 50% each in this company) which will be funded through WOS in Sweden and Cyprus. OIL will be infusing its financial commitments for 3.5 % in Carabobo project 1 in Venezuela through the Swedish Company OIL INDIA SWEDEN AB.

(I) The assets, liabilities, income and expenditure of the Joint ventures as shown in (A), (B), (C), (D), (E) and (F) above are Rs 35644.45 lakh, Rs 5632.72 lakh, Rs 9804.83 lakh and Rs. 39817.03 lakh respectively (Previous year Rs 4012.36 lakh, Rs. 2296.04 lakh, Rs 7407.71 lakh and Rs 45289.88 lakh respectively), being the proportionate value relating to Companys Participating Interest which have been incorporated in the books of accounts on the basis of Audited 18 nos. (Previous year 13 nos.) and Unaudited 21 nos. (Previous year 20 nos.) Statement of Accounts received from the respective operators. No material changes are expected by the Company in the Unaudited Statement of Accounts.

(J) i) As per the terms of the Kharsang PSC, the applicable price for crude oil produced and saved from the fi eld is to be ascertained online from Reuters daily publication for the previous month. Accordingly the invoices are being raised by the operator of the fi eld at the rates, as applicable. ii) As per the terms of the respective PSCs, provision for Abandonment Costs is to be made and accordingly a sum of Rs. 31.60 lakh (Previous Year Rs 6.83 lakh) has been provided through creation of a Sinking Fund as per Joint Operating Agreement. Such Sinking Fund on cumulative basis has been disclosed separately in the Balance Sheet.

(K) The Companys Share of Contingent liability and Capital Commitment, if any, under the PSC are shown in Note No. 9 (A) & (C) below.

(L) In terms of the Memorandum of Understanding dated 27.12.2005 with M/s. IOT Infrastructure & Energy Services Limited (formerly IOTL), the Company has entered into a consortium agreement dated 13.10.2006 with IOTL for jointly bidding and securing a contract for laying a part of the Numaligarh – Siliguri Product Pipeline for the Company on 50: 50 sharing basis and the consortium was awarded with a contract for laying 115 km of the pipeline at a total contract value of Rs 5001.21 lakh by the Company. Pending receipt of Audited Statement of Accounts relating to the contract (complying with the requirement of Accounting Standard (AS) 7 issued by ICAI for recognition of Profi t/Loss on execution of contract) from IOTL (Project Leader), the Company has accounted for Rs.5325.00 lakh being the project cost incurred by the consortium. The initial contribution of Rs 250.00 lakh paid by the Company to the consortium towards its share of working capital requirement as per the Consortium Agreement has been shown under "Loans and Advances". The project as such has been completed in 2008-09. On receipt of the Audited Statement of Accounts of the Consortium necessary adjustment for fi nal accounting of profi t/loss of this Consortium will be accounted for in the books of the Company.

ii) Associates:

IOTL – OIL Consortium

iii) Key Management Personnel

Whole-time Functional Directors:

a) Mr. N. M. Borah Chairman and Managing Director

b) Mr. T. K. Ananth Kumar Director (Finance)

c) Mr. B. N. Talukdar Director (Exploration & Development)

d) Mr. A. Anand Director (HR & BD)

e) Mr. S. K. Srivastava Director (Operations) (From 01.10.2009 to 28.02.2010)

Part-time Directors:

a) Mr. Ghanshyambhai Hiralal Amin Independent Director

b) Mr. Pawan Kumar Sharma Independent Director

c) Mr. Alexander Koipuram Luke Independent Director

d) Mr. Arun Kumar Gupta Independent Director

e) Mr. Vinod Kumar Misra Independent Director

f) Mr. Sushil Khanna Independent Director

Other Offi cers

a) Mr. S. R. Krishnan Company Secretary

9 (A) Contingent Liabilities:

Claims against the Company not acknowledged as debts amounting to Rs. 57094.62 lakh (Previous year Rs. 54218.56 lakh) include:- (a) In respect of claims under Income Tax, Sales Tax , Service Tax and Other Acts:

(i) Rs. 157.74 lakh (Previous year Rs. 1452.53 lakh):- Demand raised by the District Revenue Authorities on account of premium / revenue on Government ceiling surplus land occupied by the Company. (ii) Rs. 1200.43 lakh (Previous year Rs. 1198.54 lakh) – Demand raised by District Revenue Authorities on Account of revised rate of Land revenue against which has been disputed by the Company and obtained Stay from the Gauhati High Court.

(iii) Rs. 337.81 lakh (Previous year Rs.314.74 lakh ) being the demand raised by Govt. of Rajasthan for alleged short payment of PEL fee and penalty thereon, which has been disputed by the Company.

(iv) Rs. 43612.57 lakh (Previous year Rs. 34555.46 lakh) being the tax imposed under "Assam Taxation (on specifi ed land) Act 2004", the validity of the imposition of which has been challenged by the Company before the Gauhati High Court.

(v) Rs. 16.63 lakh (Previous year Nil) – Demand raised by Govt. of Orissa under Orissa Entry Tax Act for material purchased for drilling operation for Block MN-ONN-2000/1.

(vi) Rs. 558.13 lakh (Previous year Nil) – Demand raised by the Sale Tax authority on Account Assam VAT and CST Act pending the adjustment of the refundable to the Company by the Sales Tax Authority under Assam General Sales Tax Act.

(b) In respect of claims other than under Income Tax, Sales Tax, Service Tax and Other Acts:

(i) Rs. 8558.70 lakh (Previous year Rs. 13908.20 lakh):- Claims by contractors pending decision in Arbitration / Courts.

(c) In respect of share of claim on JVC/PSC account:

(i) Rs. 75.19 lakh (Previous Year Rs. 75.19 lakh) being the value of 19.28 GLK 2D Seismic Survey carried out in one of the block in Karbi Anglong, Assam.

(ii) Rs. 1411.55 lakh (Previous Year Rs. 1397.93 lakh) being proportionate (45%) value of claim on OIL for 3.389 billion FCFA raised by Mr. Paul Tomo, Power of Attorney Holder of M/s Import Commerce General (IGC) in Block "Shakthi", Gabon (JV) .

(iii) Rs. 1165.87 lakh (Previous Year Rs. 1315.97 lakh) being the Companys share of claim made by the Sudan pipeline contractor on OVL, pending acceptance by the MEM Govt. of Sudan.

(B) Letter of Credit and Bank Guarantees

(i) Letters of Credit outstanding as on 31.03.2010 amounting to Rs. 2437.50 lakh (Previous year Rs. 4478.10 lakh) for which there is a fl oating charge on Current Assets of the Company.

(ii) Letters of Credit outstanding as on 31.03.2010 Nil (Previous year US dollars of 1.032 million equivalent to Rs.518.32 lakh) towards OIL s share (50%) for Area 86 and Block 102/4, Libya issued by M/s ICICI Bank Limited, New Delhi.

(iii) Rs 21677.86 lakh (Previous year Rs. 16674.43 lakh) :- Bank Guarantee in US Dollars of 44.66 million (Previous year USD 36.42 million) issued by SBI CAG Branch, Kolkata in favour of Ministry of Petroleum & Natural Gas, Govt. of India towards Companys obligation under various rounds of Production Sharing Contracts.

(iv) Rs. 7913.60 lakh (Previous year Rs. 401.44 lakh):- Guarantee / Standby Letter of Credits in US dollars of 16 million (previous year ended 31.03.2009 USD 0.80 million) issued in favour of Ganoub Ei Wadi Holding Petroleum Company, Cairo, Egypt for Block no.3 & 4, Egypt, towards companys share of the total financial commitment for the blocks as per requirement of signing the concession agreement.

(v) Rs.2477.25 lakh (Previous year ended 31.03.2009 – Nil) :- Bank Guarantee issued by HDFC Bank Ltd., New Delhi in favour of National Stock Exchange of India Limited for security deposit for listing of shares.

(vi) Rs.1559.04 lakh (Previous year ended 31.03.2009 – Nil) : - Bank Guarantee for USD 3.2 million (previous year ended 31.03.2009 – Nil) issued in favour of Autoridade Nacional Dp Petrolo – Anp Ala Leste Do Palacio Do Governo, towards OILs share of 12.5% Participating Interest of the Minimum Work Programme in Deep Water Block "K" in Democratic Republic of Timor Leste.

(vii) Rs.2245 lakh (Previous year ended 31.03.2009 – Nil): - Bank Guarantee issued for USD 5 million by HDFC Bank Limited, New Delhi (previous year ended 31.03.2009- Nil) for fi ve PEL areas allotted to the company.

(viii) Rs.2397.68 lakh (Previous year ended 31.03.2009 – Nil) – Bank Guarantee issued for USD 5.250 million by Deutsche Bank (Asia) issued in favour of BOLIVARIAN REPUBLIC OF VENEZUELA, MINISTRY OF THE PEOPLES POWER FOR ENERGY AND PETROLEUM, Caracus, Venezuela as a part of tender process.

(C) (i) The estimated amount on account of contracts remaining to be executed on Capital Account and not provided for in the accounts :- Rs. 17036.69 lakh (Previous year Rs. 18256.83 lakh).

(ii) Companys share of amount of contracts remaining to be executed on Capital Account and not provided for in the account as on 31.03.2010 in respect of the Joint Ventures is Rs. Nil. (Previous Year Rs Nil).

10) Previous years figures have been reclassifi ed/ regrouped wherever necessary to conform to current years classifi cations.


Mar 31, 2008

1. The Company has acquired 25% equity shares of Suntera Nigeria 205 Ltd. (a company incorporated under the Laws of Nigeria) from Suntera Resources Ltd., a company incorporated under the Laws of Cyprus. The other shareholders of Suntera Nigeria 205 Ltd. are Suntera Resources Ltd. and IOCL with 50% and 25% equity holding respectively. Suntera Nigeria 205 Ltd. holds participating interest of 40% and a further Economic Interest of 30% in onland Block OPL-205 in Nigeria in which the exploration work is yet to commence.

Notes : (i) The Exploration Service Contract for the Block at Sl. No. B(1) above was signed with National Iranian Oil Company (NIOC), the State owned company, of the Government of Iran, in consortium with ONGC Videsh Limited and Indian Oil Corporation Limited. The exploration work in the block is in progress.

(ii) The Company signed two "Exploration and Production Sharing Agreement (EPSA)" for the blocks at Sl. No. B (2) and B (3) above with National Oil Corporation of Libya in consortium with Indian Oil Corporation Ltd. The Company is the operator of these blocks. The exploration work in both the Blocks is in progress.

(iii) The Company acquired a participating interest of 45% in onshore Block Shakthi in Gabon, West Africa (Sl. No. B (4) above) through a farm-out agreement signed on 17.04.2006 with Marvis Pte Ltd., a company incorporated in Singapore, which was holding 100% Participating Interest in the Block. The acquisition has been approved by the Govt. of Gabon. The Company is the Operator of the Block. The exploration work in the block is in progress.

(iv) The Company has signed a "Participating Agreement" (PA) for the product pipeline at Sl. No. C above with ONGC Videsh Limited (OVL) for a 10% participating interest (balance 90% being with OVL) in the pipeline project awarded by Ministry of Energy & Mining (MEM), Govt. of Sudan (GoS) through a separate agreement entered into by OVL in this regard. The construction of the pipeline project was completed on 01.09.2005 and handed over to MEM under Build, Own, Lease and Transfer (BOLT) basis.

The "PA" entered into between OVL and OIL is neither intended nor shall be construed as creating a partnership or joint venture among the parties. Hence, accounting has not been done following "Joint Venture Accounting Policy" but the agreement for providing finance for the project in rupees to OVL and to share lease rentals receivable from MEM has been treated as "Finance Lease activity" as envisaged under Accounting Standard (AS) 19 issued by The Institute of Chartered Accountants of India and accordingly accounted for.

The Company has been informed by OVL that the contractor for constructing the pipeline has raised further invoices for an amount of approximately Rs.10259.73 lakh (US$ 25.53 Million) and OVL has in turn raised a claim on MEM of GoS as per the agreement between GoS and OVL. OIL’s share related to both the claims i.e. by the pipeline contractor on OVL (though accepted by OVL) and OVL’s claim on GoS shall be accounted for upon acceptance by GoS and on suitable amendment of repayment schedule by MEM. OVL has received an additional claim of Rs. 4669.80 lakh (US$ 11.62 million) which has not been acknowledged as debt in the books of the operator (OVL). Pending this, the Company’s share of the amount claimed by the pipeline contractor has not been accounted for but disclosed under "Contingent Liabilities".

In terms of such "PA", the Company has received its share of (5th) fifth instalment of lease rentals due as on 31.12.2007. Moreover the Company has also received, in terms of the agreement, the interest on the delayed rental payments by the MEM and the same is shown under miscellaneous income. The regular installments are accounted for as income from Finance Lease.

(v) The Company, as stated in Sl. No. D above, has acquired 25% equity in Suntera Nigeria 205 Ltd., a company incorporated under the Laws of Nigeria, from Suntera Resources Ltd., Cyprus, through a Share Purchase Agreement (SPA) signed with them on 31st August, 2006 (effective dated 27th September, 2006), for Rs. 0.22 lakh (Nigerian Naira 62502 USD 488.87 approximately) at par and also signed a Shareholders Agreement (SHA) with Suntera Resources Ltd. and IOCL, the other shareholders of the company. Suntera Nigeria 205 Ltd. had entered into an Acquisition Agreement (AA) and Economic Interest Assignment Agreement (EIAA) with Summit Oil International Limited (original 100% Participating Interest holder in OPL-205 and the operators of the Block) on 10.05.2006 for acquiring 40% Participating Interest and 30% Economic Interest in onland Block OPL-205 in Nigeria. Suntera Nigeria 205 Ltd. also entered into a Joint Operating Agreement (JOA) and Technical Service Agreement (TSA) with Summit Oil International Limited on 10.05.2006 for providing the technical support for the operations in OPL-205. Accordingly, the Company indirectly, through 25% equity holding in Suntera Nigeria 205 Ltd., owns a combined Participating and Economic interest of 17.5% in OPL-205. The Company is required to contribute its 25% share of all the expenses in the Block by way of loan to Suntera Nigeria 205 Ltd. as agreed by all the shareholders in the SHA and accordingly a loan agreement has been signed on 30.08.2007. In terms of the loan agreement, the Company has disbursed loan amounting to Rs. 2989.73 lakh (US$ 7565108.31) as of 31.03.2008 {Previous year Rs. 1650.43 lakh (US$ 3704233.12)} carrying a simple interest of 8.75% per annum. Accordingly, Rs.211.69 lakh (Previous year Rs.31.26 lakh) has been charged to Suntera Nigeria 205 Ltd. as interest up to 31.03.2008.

(E) The assets, liabilities, income and expenditure of the Joint ventures as shown in (A), (B), (C) and (D) above are Rs 791.36 lakh, Rs 1994.04 lakh, Rs 5993.96 lakh and Rs.19403.50 lakh respectively (Previous year Rs 8756.43 lakh, Rs.2055.12 lakh, Rs 6025.13 lakh and Rs 30457.82 lakh respectivety), being the proportionate value relating to Company’s Participating Interest which have been incorporated in the books of accounts on the basis of Audited 20 no. (Previous years Nil) and Unaudited 11 no. (Previous year 31 nos.) Statement of Accounts received from the respective operators. No material changes are expected by the Company in the unaudited Statement of Accounts.

(F) (i) As per the terms of the Kharsang PSC, the applicable price for crude oil produced and saved from the field is to be ascertained online from Reuters’ daily publication for the previous month. Accordingly the invoices are being raised by the operator of the field at the rates, as applicable.

(ii) As per the terms of the respective PSCs, provision for Abandonment Costs is to be made; in accordance whereof a sum of Rs. 6.83 lakh (Previous Year Rs 7.22 lakh) has been provided through creation of a Sinking Fund as per Joint Operating Agreement. Such Sinking Fund on cumulative basis has been disclosed separately in the Balance Sheet.

(G) The Company’s Share of Contingent liability and Capital Commitment, if any, under the PSC are shown in Note No. 9 (A) & (C) below.

(H) In terms of the Memorandum of Understanding dated 27.12.2005 with M/s. Indian Oil Tanking Limited (IOTL), the Company has entered into a consortium agreement dated 13.10.2006 with IOTL for jointly bidding and securing a contract for laying a part of the Numaligarh – Siliguri product pipeline for the Company on 50: 50 sharing basis and the consortium has been awarded with a contract for laying 115 km of the pipeline at a total contract value of Rs 5001.21 lakh by the Company. Pending receipt of Audited Statement of Accounts relating to the contract (complying with the requirement of Accounting Standard 7 issued by ICAI for recognition of Profit/Loss on execution of contract) from IOTL (Project Leader), the Company has provisionally accounted for loss of Rs 281.95 lakh in the current year’s account being its share based on the unaudited accounts and charged the same to the project cost in addition to the amount paid to consortium amounting to Rs 3385.57 lakh and Rs 111.44 lakh spent by the Company towards laying of the pipeline under Capital Work in Progress pending completion of the project. The initial contribution of Rs 250.00 lakh paid by the Company to the consortium towards its share of working capital requirement as per the Consortium Agreement has been shown under Loans and Advances. On receipt of Audited Statement of Accounts of the Consortium upon completion of the Project, which is expected during the year 2008-09, necessary accounting of profit/loss of this project of the Consortium will be carried out.

(I) The Company had entered into a joint venture partnership agreement dated 26.09.2006 with M/s ICSA (India) Ltd. (ICSA) towards development of the iCap technology (used in pipeline surveillance) by ICSA. During the year the said agreement was terminated and accordingly Rs.225.18 lakh provided in 2006-07 on adhoc basis as payable has been written back under "Other Adjustments (Income)" in Schedule 22A.

2. Information as per Accounting Standard (AS) 18 "Related Party Disclosures" issued by ICAI.

a) Related party relationships

Name of related parties and description of relationship (excluding the State controlled entities):-

3. Deferred Tax

a) In accordance with the Accounting Standard – 22, the Company has net deferred tax liability as at 31st March, 2008 of Rs. 86,551.70 lakh (Previous year Rs. 80333.18 lakh).

4. Fixed Assets:

A. Land in possession of the Company, includes some areas for which title / conveyance deeds are yet to be executed and / or mutation in settlement records is pending. Documentation formalities are in progress.

B. The Company has identified various Plant & Machinery, which are not in use for considerable time. Pending writing off of these assets from the gross block, the Company has taken a provision of Rs. 402.66 lakh (Previous year Rs 120.43 Lakh) during the year towards the difference between the WDV as on 31.03.2008 and 5% of original cost as the residual value of the respective assets.

5. Impairment of Assets

In terms of the Significant Accounting Policy No. 6, the Company assessed the Cash Generating Assets for the Impairment as required under AS-28 issued by ICAI and found that no cash generating Asset needs impairment as on 31.03.2008.

6. (A) Sundry Debtors:

i) The settlement of outstanding dues from Assam State Electricity Board (ASEB) for sale of Natural Gas amounting to Rs. 16196.87 lakh was under process. The Government of Assam has decided to discharge the liability from its’ budgetary support. Accordingly the Government of Assam has released Rs. 3000.00 lakh on 31.03.2008 being the 1st instalment. Hence, entire amount due from ASEB has been classified as "Unsecured, Considered Good" under Sundry Debtors. Interest receivable, if any, on the dues will be accounted in the year of final settlement.

ii) All other Sundry Debtors including the overdue amount are considered good and realizable, unless stated otherwise.

(B) Loans and Advances include :

(i) Amount due by Directors and Other Officers of the Company:

(ii) Advances recoverable in cash or in kind or for value to be received includes materials given on loan to Public Sector Undertakings amounting to Rs. 279.41 lakh (Previous year Rs. 279.31 lakh).

(iii) A revival package for M/s Indian Drugs and Pharmaceuticals Limited (IDPL) has been recommended by BRPSE on 9th March, 2007 to the Government of India. The revival package also envisages payment of principal amount of Rs. 1500.00 lakh along with 5 % simple interest to OIL. The matter was also considered by the Cabinet in its meeting on 17th May, 2007 and then referred to Group of Ministers for consideration. As soon as the package is approved by the Government and the funds are provided for the same, the outstanding dues will be cleared by IDPL.

(iv) M/s Luit India Inc., (formerly known as Sakhalin India Inc.) incorporated in United States of America became fully owned subsidiary company of Oil India Limited with effect from 10.05.2003. The subsidiary company was already wound up on 31.12. 2004. The company does not exist as of 31.03.2008, no consolidated Statement of Assets and Liabilities and Profit and Loss Account has been prepared. An amount of Rs.6731.44 (Previous Year Rs. 7475.79) lying in the bank account of Luit India Inc. as on 31st March, 2008 is shown as amount receivable.

(C) Balance shown creditors, debtors, claims, recoverable and advances include balances subject to confirmation/ reconciliation and consequential adjustment, if any. Reconciliation are carried out on on-going basis. Provisions, wherever considered necessary, have been made.

(D) Micro , Small and Medium Enterprises Act, 2006 :

The Company has initiated the process of obtaining confirmation from vendors who have registered under The Micro, Small and Medium Enterprises Development Act, 2006.The Company has not received any confirmation from registered vendors as of date, in respect of whom disclosures are required to be made under the said Act.

7. Current Liabilities:

Sundry creditors include materials received on loan from other Public Sector Undertakings amounting to Rs. 351.56 lakh (Previous Year Rs. 359.92 lakh).

8. Disclosure pursuant to AS 15 (Revised 2005) – Employee Benefits:- Effective 1st April, 2007, the Company has adopted AS 15 (Revised 2005) for Employee Benefits issued by ICAI as against erstwhile AS 15. Consequent to the adoption, the following disclosures related to accounting etc are made as far as practicable under AS 15 (Revised 2005) requirement:

Defined Contribution Plans

The Company’s contribution to Provident Funds for employees and executives is Rs.3212.78 lakh.

Defined Benefit Plans

The various Benefits Plans which are in operation are Gratuity Fund, Pension Funds, Leave Encashment, Leave Fare Assistance/ Leave Travel Concession, Pre & Post Retirement Medical Benefit and Long Service Award. The present value of the obligation is determined based on Actuarial valuation using the projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation.

E. Notes on above

(i) In case of gratuity, the fair value of plan asset at the end of the year is Rs.15300.16 lakh as against present value of obligation of Rs.10870.35 lakh i.e. Rs.4429.81 lakh higher. Neither any adjustment has been made in the Accounts for such credit in the Funded benefits scheme nor Rs.150.56 lakh expense has been recognized.

(ii) Long Service Award liability as on 31.03.2008, Actuarial determination has been charged to Profit and Loss Account as no figure up to 31.03.2007, has been ascertained for taking to opening General Reserve.

(iii) LFA/LTC liability determined by Actuary as on 31.03.2007 of Rs.2500.01 lakh has been adjusted against opening General Reserve net of Deferred Ta x Asset of Rs.849.75 lakh.

(iv) The Company’s Provident fund is exempted under section 17 of Employees’ Provident Fund Act, 1952. The Company has also taken exemption under Para 39 of Employees Pension Schemes 1995 and extending the Pension benefits through Oil India Employees Pension Fund. Conditions for grant of exemptions stipulate that the employer shall make good the deficiency, if any, in the interest rate declared by the trust vis-à-vis statutory rate in case of Employee Provident Fund and deficiency, if any in extending the pensionary benefits will be made good by the Company in the Employee Pension Fund.

(v) AS 15 (Revised 2005) Employees benefit being mandatorily applicable from 01.04.2007 no corresponding previous figures appear. Accordingly, the impact on current year’s Accounts due to such adoption of revised AS, as compared to earlier policy not disclosed.

9 (A) Contingent Liabilities:

Claims against the Company not acknowledged as debts amounting to Rs.62196.30 lakh (Previous year Rs.36785.10 lakh) include:- (a) In respect of claims under Income Tax, Sales Tax , Service Tax and Other Acts:

(i) Rs. 1424.54 lakh (Previous year Rs. 67.66 lakh) :- Demand raised by the District Revenue Authorities on account of premium / revenue on Government ceiling surplus land occupied by the Company.

(ii) Rs. 1088.47 lakh (Previous year Nil) – Demand raised by District Revenue Authorities on Account of revised rate of Land revenue against which has been disputed by the Company and obtained Stay from the Gauhati High Court.

(iii) Rs. 293.94 lakh (Previous year Rs. 242.75 lakh ) being the demand raised by Govt. of Rajasthan for alleged short payment of PEL fee and penalty thereon, which has been disputed by the Company.

(iv) Rs. 25908.74 lakh (Previous year Rs. 17825.99 lakh ) being the tax imposed under "Assam Taxation (on specified land) Act 2004", the validity of the imposition of which has been challenged by the Company before the Supreme Court of India.

(b) In respect of claims other than under Income Tax, Sales Tax , Service Tax and Other Acts:

(i) Rs. 31712.47 lakh (Previous year Rs. 14882.64 lakh) :- Claims by contractors pending decision in Arbitration/Courts.

(ii) Rs. 1692.95 lakh (Previous Year Rs. 508.58 lakh) being the Company’s share of claim made by the Sudan pipeline contractor on OVL, pending acceptance.

(c) In respect of share of claim on JVC/PSC account:

Rs. 75.19 lakh (Previous Year Rs. 75.19 lakh) being the value of 19.28 GLK 2D Seismic Survey carried out in one of the blocks. Barring above, there are no other contingent liabilities in any of the Joint Ventures in India or abroad requiring disclosure.

(B) Letter of Credit and Bank Guarantees.

(i) Letters of Credit outstanding as on 31st March, 2008 amounting to Rs.7806.71 lakh (Previous year Rs. 5685.77 lakh) for which there is a floating charge on Current Assets of the Company.

(ii) Rs 8238.02 lakh (Previous year Rs. 3018.62 lakh) :- Performance Guarantee in US Dollars of 20.23 million issued by SBI CAG Branch, Kolkata in favour of Ministry of Petroleum & Natural Gas, Govt. of India towards Company’s obligation under various Production Sharing Contracts.

(iii) Rs 4.85 lakh (Previous year Nil):- Performance Bank Guarantee of Rs. 4.85 lakh issued by State Bank of India, CAG Branch, Kolkata in favour of "Indian Oil Corporation Noida (Pipeline Division)", valid upto 19.07.2008.

(C) (i) The estimated amount on account of contracts remaining to be executed on Capital Account and not provided for in the accounts :- Rs. 22044.23 lakh (Previous year Rs. 7177.74 lakh).

(ii) Company’s share of amount of contracts remaining to be executed on Capital Account and not provided for in the account as on 31.03.2008 in respect of the Joint Ventures is Rs. Nil. (Previous Year Rs Nil).

10. General

(A) (i) With effect from 01.04.2002, the price of Crude Oil and LPG is market determined in terms of the Policy of the Government of India. Accordingly, the crude oil price is determined based on the terms and condition of the Memorandum of Understanding (MOU) signed with various buyers of crude oil for the period from 01.04.2002 to 31.03.2004. Though the MOU for the period effective from 01.04.2004 has not yet been finalized, the Company is continuing to bill and the buyers are continuing to pay on the terms and conditions of the MOU for the period from 01.04.2002 to 31.03.2004. In terms of the MOU, the Company receives a monthly average price of crude oil bench marked to Nigerian Bonny Light crude oil (ascertained from Reuter) after adjustment for gross product worth (quality differential) and discount on account of Base Sediment & Water (BS&W). As regards LPG price, the same continues to be notified by Indian Oil Corporation Ltd. (IOC) every month.

(ii) The Ministry of Petroleum & Natural Gas (MOP&NG), Govt. of India, vide its letter dated 03.03.2008 allowed the Company to realize the sales tax for the financial year 2007-08, similar to decision of 2006-07, in respect of crude oil supplies to refineries which were borne by the Company up to financial year 2005- 06. The same amounting to Rs17223.38 lakh (net) (Previous year Rs 15458.28 lakh (net)) has accordingly been accounted for in the current year.

(iii) In terms of decision of the Govt. of India, conveyed by Petroleum Planning and Analysis Cell , the Company has allowed discount of Rs. 223562.73 lakh (Previous year Rs. 192848.18 lakh) on sale price of Crude oil and Rs. 6946.08 (Previous year Rs. 6526.63 lakh) on sale price of LPG during the year. Accordingly, the sales revenue in respect of crude oil and LPG is net of the aforesaid discounts, which have the effect of reduction of the profit for the year by that amount.

(iv) The price of Natural Gas was revised by the Ministry of Petroleum and Natural Gas, Government of India vide letter No. L-12015/5/04-GP(i) dated 20th June, 2005. The revised price applicable w.e.f. 01.07.2005 in respect of APM gas quantity, being the quantity of gas produced as on 30.06.2005 and sold to consumers other than those with whom the Company had signed Gas Sale and Purchase Agreement (GSPA) with mutually agreed price. The gas price for gas sale in Rajasthan is governed by the MOU dated 11th October, 2004 between the Company and GAIL, which is a mutually agreed price.

(v) The Company has been recovering, on a provisional basis, from all refineries other than Numaligarh Refinery Limited (NRL), 50% of the transportation tariff on crude oil as fixed by the Petroleum Planning & Analysis Cell (PPAC) for the year 2001-02. However, for the year MOP & NG, vide its letter dated 03.03.2008 has allowed the Company to realize the full transportation tariff from all the refineries including NRL similar to the decision in 2006-07. The same amounting to Rs. 1865.67 lakh (net) {Previous year Rs. 1917.45 lakh (net)} has accordingly been accounted for. As regards transportation income in respect of crude oil of M/s. Oil & Natural Gas Corp. Ltd. (ONGC) and M/s. Bongaigaon Refinery & Petro-chemicals Ltd. (BRPL) for its imported crude, the same are accounted for based on the MOU/Crude Oil Transportation Agreement (COTA) signed with the respective companies.

(vi) The Company is holding in its safe custody, Fixed Deposit Receipts issued in its favour by Contractors / Suppliers as Security Deposit / Earnest Money amounting to Rs. 159.10 lakh (Previous year Rs. 159.10 lakh), which are not included in the accounts.

(vii) The total Gas Reserve as on 31st March, 2008 in Assam & Arunachal Pradesh have been allocated to the Oil Fields based on the ratio of Reserve figures as on 31.03.2006. The opening balance of Reserve as on 01.04.2007 as reduced by production during the year in respect of such fields and depletion provided accordingly.

(viii) Exchange loss of Rs. 392.13 lakh (Previous year Rs. 112.37 lakh) includes , exchange gain of Rs 21.75 lakh related to Assets accounted in line with the changed Accounting Policy no. 5 due to applicability of AS 11 (Revised).

(ix) OIL has entered into a MOU with HPCL, GAIL, Mittal Energy Investment Pte. Ltd. and TOTAL France S.A. on 18.10.2007 for setting up of an integrated Refinery cum Petrochemical Complex at Vishakapatnam in Andhra Pradesh. A provision of Rs.81.00 lakh have been made in the Accounts for the year towards OIL’s share of cost for feasibility study for the said project.

(B) During the year, the Company has provided a Drilling Rig on hire for the operation in one of the NELP blocks in Rajasthan, in which the Company is the operator. The profit arising out of the drilling rig hiring services has been identified and set off from the Pre-Producing Properties Account relating to the wells in which the rig was put to use.

(C) The salary of the unionized employees as well as executive employees below board level is due for revision with effect from 01.01.2007. Pending finalization of the same Rs. 2289.53 lakh for the period 01.01.2007 to 31.03.2007 and Rs. 14010.76 lakh for the current year have been provided in the accounts on adhoc basis.

(D) Borrowing cost capitalized during the year is nil.

(E) Previous year’s figures have been reclassified/ regrouped wherever necessary to conform to current year’s classifications.

1. (a) In accordance with the existing management reporting system, the Company has adopted :-

(i) the following business segments as the primary reporting segments :

Crude Oil

Natural Gas

LPG

Transportation

and

(ii) the following geographical segments as the secondary reporting segments :

Assam / Arunachal Pradesh (AP)

Rajasthan

(b) All inter-segment transfers have been measured using actual price used for transfer pricing.

2. Segment sales revenues are directly identifiable with the respective segments and therefore, have been directly allocated to the segments. Other income which can be directly attributed to a particular segment has been shown as segment revenue. Other income which cannot be attributed to any of the segments have been disclosed as unallocated.

3. Expenditure incurred directly by the segments are directly allocated to them. Expenditure incurred by Service departments have been allocated to the segments in proportion to the actual services rendered to the respective segments. Overhead expenditure have been allocated to the segments on the basis of direct emoluments. Exploration expenditure pertaining to the areas having joint production of Crude Oil & Natural Gas, charged to the Profit and Loss Account have been allocated to the Crude Oil and Natural Gas segments on the basis of thermal equivalence. Research & Development expenditure have been considered as unallocated.

4. Other adjustments in the income and expenditure not relating to the year of reporting have been disclosed as unallocated corporate income/expenses.

5. Share capital, Reserves and Surplus and Loans have been treated as unallocated corporate liabilities.

6. Liabilities and Current Assets relating to purchase of materials and hiring of services, used jointly by two or more segments have been allocated to the segments on the basis of average consumption/utilization of the previous two years.

7. Liabilities and Advances arising out of payment to employees , used jointly by two or more segments, have been allocated to the respective segments on the same basis as followed for allocation of employees cost

8. Fixed assets and depreciation thereon have been identified cost center wise and after allocation of the amounts under services and overhead cost centers on the basis mentioned in para 3 above, the segment assets have been determined.

9. Producing properties, pre producing properties and depletion pertaining to the areas having joint production of Crude Oil & Natural Gas have been allocated to crude oil and gas segments on the basis of Proved-Developed- Producing reserves.

10. Investments outside the business and Cash and Bank balances are treated as unallocated corporate assets.

11. Any other revenue, expenditure, assets or liabilities, which cannot be directly attributed to one or more segments, have been treated as unallocated corporate revenue, expenditure, assets or liabilities as the case may be.

12. Exploration expenditure, assets & liabilities pertaining to the project areas where commercial production of Hydrocarbons has not yet commenced, have been shown in the unallocated corporate head.

13. Individual items of assets or liabilities used jointly by two or more segments, the amount of which is insignificant and are not considered material, have been allocated to Crude Oil and Natural Gas segment on the basis of thermal equivalence.

14. Inter segment sales not considered in total revenue are shown under elimination.


Mar 31, 2005

1. Current Liabilities:

Sundry Creditors include materials received on loan from other Public Sector Undertakings amounting to Rs. 909.36 lakh (Previous Year Rs.210.61 lakh).

4. Fixed Assets:

(i) Land in possession of the Company, includes some areas for which title deeds/conveyance deeds are yet to be executed and/or mutation in settlement records is pending. Documentation formalities are in progress.

(ii) Lease for 90 years or more is treated as Perpetual Lease.

(iii) Fixed Assets as on 31.03.2005 includes Rs. 3.01 lakh being the adjusted value of the Assets awaiting disposal as per the Significant Accounting Policy No.3 (c) as against nil value in earlier years, which has the effect of increase in profit for the year by like amount.

(iv) A firm of consultants was appointed to physically verify the Fixed Assets of the Company as on 31.03.98. The firm has completed the verification and reconciliation of the assets at various locations of the Company. Based on such physical verification, assets of original cost of Rs.3402.60 lakh representing 2.60% of the total cost of the assets of the Company were to be matched and reconciled, for which a sum of Rs.1154.17 lakh representing the Written Down Value (WDV) as on 31.03.2001 had been provided for, pending the reconciliation of the said items, on that date. Upon reconciliation, which is still continuing as on date, assets representing original cost of Rs. 2972.73 lakh (WDV Rs.1089.79 lakh) have been identified and balance assets with original amount of Rs.429.87 lakh of original cost (WDV Rs. 64.38 lakh) representing 0.30% of the total cost of assets on the date of the verification (31.03.98) are pending reconciliation/identification as on date. Accordingly, the provision of Rs. 74.59 lakh made in the previous year for the unidentified assets has been reduced to Rs. 64.38 lakh as on 31.03.2005.

5. Depreciation:

In accordance with the Significant Accounting Policy No. 4 (b), depreciation on fixed assets for the year amounting to Rs. 2313.63 lakh (Previous year Rs. 2390.49 lakh) has been allocated to drilling and/or completion and testing of exploratory and development wells undertaken during the year.

6. Impairment of Assets

In terms of the Significant Accounting Policy No. 6 the Company assessed the Cash Generating Assets for the Impairment Test with the U.S. Dollar Conversion Rate as per RBIs B.C. Selling Rate notified as on 31.03.2005 and using a discounting rate of 10%, finds no asset need impairment as on 31.03.2005.

7. (A) Loans and Advances include:

(i) Amount due by Directors and Other Officers of the Company (Rs. in lakhs):

Balance as at Maximum amount due at any time during the year 31st March, 2005 31st March, 2004 2004-05 2003-04

(a) Directors 3.17 5.67 5.67 9.66

(b) Other Officers 7.42 8.16 8.16 8.90

(ii) Advances recoverable in cash or in kind or for value to be received includes materials given on loan to Public Sector Undertakings amounting to Rs. 922.73 lakh (Previous year Rs.472.35 lakh)

(iii) During the previous year ending 31st March 2004, since North Hellhole Bayou Prospect was declared unsuccessful, a part of the loan (Rs. 3155.03 lakh) extended to Luit India Inc. after netting the amount available in its bank account as on 31st March, 2004, had been written off. Further, it was also decided to wind up M/s. Luit India Inc. in due course. Accordingly, M/s. Luit India Inc/Sakhalin India Inc. was dissolved on 31st December, 2004 and the certificate of dissolution has been obtained after completing all the formalities required under the laws of United States of America. Since the Company has been dissolved on 31.12.2004, an amount of Rs.315717.32 (i.e. US$ 7157.50@ Rs.44.11 per dollar) incurred during the year towards administrative and winding up expenses of the Company has been charged off. The remaining amount of Rs.7513.26 (US$ 170.33 @44.11) in the bank account of Luit India Inc. as on 31st December, 2004 (as on the date of dissolution) is shown as amount receivable from M/s. Luit India Inc.

(iv) During the year, one instalment of the loan taken from ONGC Videsh Limited amounting to Rs. 618.24 lakh was due for repayment as per Sale & Purchase Agreement dt. 7th March, 2003. However, the Company has disputed the repayment and has appealed to Ministry of Petroleum and Natural Gas. Pending disposal of the appeal by the Ministry of Petroleum and Natural Gas, no further action is being taken towards repayment of the loans. Entire amount is due and payable as per terms of Sale & Purchase Agreement.

(B) Sundry Debtors;

i) The settlement of outstanding dues from Assam State Electricity Board (ASEB) for sale of Natural Gas is under the process of securitization as per the scheme "Securitization of dues of State Electricity Boards" of Government of India. Hence, entire amount due from ASEB has been classified as "Unsecured Considered Good" under Sundry Debtors (Schedule 10).

ii) Sundry Debtors balance includes interest receivable for delay in payment.

iii) All other Sundry Debtors including the overdue amount are considered good and realisable.

(C) Balance confirmation in respect of Creditors and Loans & Advances have not been obtained.

(D) Inventory : During the year the Company has reviewed the valuation of insurance spares including items related to deferred projects/drilling wells and accessories of plant & equipment. Accordingly, the insurance spares have been capitalised and depreciated in line with Accounting Standard-2 read with Accounting Standard-10. The other spares have been considered as part of other Stores and Spares for valuation as per the Significant Accounting Policy no. 10 (c).

Due to above change in policy a sum of Rs. 215.37 lakh has been charged to depreciation and Rs. 1949.14 lakh has been charged to Profit & Loss Account during the year, which have effect of reduction of profit for the year by like amount.

8 Contingent Liabilities not provided for:

(A) Claims against the Company not acknowledged as debts Rs. 16831.40 lakh (Previous year Rs. 18406.38 lakh) which includes:-

(i) Rs.989.57 lakh (Previous year Rs.824.64 lakh):- Sales Tax and interest demand on account of a foreign contractor which is pending before the Orissa High Court.

(ii) Rs. 13653.32 lakh (Previous year Rs. 17457.00 lakh) :- Claims by contractors pending decision in Arbitration/Courts.

(iii) Rs.67.66 lakh (Previous year Rs.67.66 lakh) :- Demand raised by the District Revenue Authorities on account of premium/revenue on Government ceiling surplus land occupied by the Company.

(iv) Rs. 69.47 lakh (Previous year Rs.57.08 lakh) :- Being the Companys Share (40%) of the disputed demand of Cess by Excise Authorities on Crude Oil sold by Kharsang PSC by Excise Authority.

(v) Rs.1930.40 lakh (Previous year-nil) being the tax imposed under "Assam Taxation (on specified land) Act 2004", the validity of the imposition of which is challenged by the Company before the Honble High Court at Guwahati.

(vi) Rs.120.98 lakh (Previous year-nil) being the claim by ASEB against sale of Electricity which is disputed by the Company.

(B) Letters of Credit and Bank Guarantees

(i) Letters of Credit outstanding as on 31st March, 2005 amounting to Rs.7257.00 lakh (Previous year Rs.2117.44 lakh) for which there is a floating charge on Current Assets of the Company.

(ii) Rs.478.74 lakh (Previous year Rs.477.58 lakh) :- Performance Guarantee for US Dollars 1.08 Million given (towards work commitment) issued by SBI CAG Branch, Kolkata in favour of National Iranian Oil Company towards 20% participating interest of the Company in the Exploration Service Contract for the Offshore Farsi Block in Persian Gulf, Islamic Republic of Iran. Though as per Exploration Service Contract, the amount of the Perfomance Guarantee is to be reduced at the end of each year to the extent of the work commitment already fulfilled, the amount of the liability has been retained at its original level due to non-receipt of clearance from the National Iranian Oil Company, the state owned oil company of the Government of Iran, in this regard.

(iii) Rs. 753.56 lakh (Previous year-nil):- Bid bond guarantee of US Dollars 1.7 million issued by State Bank of India, CAG Branch, Kolkata in favour of National Oil Corporation ("NOC"), Bashir Sadawi Street, Tripoli, Great Socialist People Libyan Arab Jamahiriya for participating by Oil India Limited in the bidding process for an Exploration and Production Sharing Agreement (EPSA) for Block No.86 in Libya. Although the bank guarantee is valid as on 31.03.2005, the EPSA has been signed on 20th March, 2005, hence there will not be any future liability towards the same.

(iv) Rs.500.00 lakh ((Previous year-nil) :- Performance Bank Guarantees of Rs.500.00 lakh issued by State Bank of India, CAG Branch, Kolkata with validity of two years in favour of "Department of Telecom, Government of India" upon approval of Department of Telecommunication granting licence to Oil India Limited on non-exclusive basis for Infrastructure Provider Category-II(IP-II) permitting the company leasing of end to end dark fibre to out side operator.

(C) The estimated amount on account of contracts remaining to be executed on Capital Account and not provided for in the accounts :- Rs.9749.35 lakh (Previous year Rs.6675.07 lakh)

10. General

(a) (i) With effect from 1.4.2002, the price of crude oil and LPG is market determined in terms of the Policy of the Government of India. Accordingly, the crude oil prices during the year have been taken based on Memorandum of Understanding (MOU) signed with various buyers of crude oil for the period from 01/4/2002 to 31/03/2004. Though the MOU for the period effective from 01/04/2004 has not yet been finalized, the Company is continuing to bill and the buyers are continuing to pay, on a provisional basis, on the terms and conditions of the MOU for the period from 01/04/2002 to 31/03/2004. In terms of the MOU, the Company receives a monthly average price of crude oil bench marked to Nigerian Bonny Light crude oil (ascertained from Platts Oilgram) after adjustment for gross product worth (quality differential) and discount on account of Base Sediment & Water (BS&W), Further, the Company would also be entitled to receive sales tax on crude oil sales provided Free on Board (FOB) crude oil price is up to US$21/bbl. In case FOB crude oil price exceeds US$21/bbl, sales tax shall be borne by the Company subject to the Company getting minimum US$21/bbl plus sales tax. As regards LPG price, the same continues to be notified by Indian Oil Corporation Ltd. (IOC) every month.

In terms of decision of the Govt. of India, conveyed vide letter No. P-20012/28/97-PP dated 23rd July, 2004 and further communicated by Petroleum Planning and Analysis Cell vide letter dated 27th August, 2004, 15th October, 2004, 24th January, 2005 and 3rd May, 2005 the Company has allowed discount of Rs. 64815.71 lakh on sale price of crude oil and Rs. 5642.84 lakh on sale price of LPG. Accordingly, the sales revenue in respect of crude oil and LPG is net of the aforesaid discounts, which have the effect of reduction of the profit for the year by those amount.

(ii) The price of natural gas is governed by the notification issued by GAIL(lndia) Ltd. in respect of all gas sales in the North East Region except where gas supply is based on a mutually agreed price. However, in respect of gas sale in Rajasthan, the Company followed the price as per notification from GAIL(lndia) Ltd. till 10th October, 2004. Since 11th October, 2004, the gas price for gas sale in Rajasthan is Governed by the MOU dated 11th October, 2004 between the Company and GAIL, which is mutually agreed price and has been approved by the Government of India.

(iii) The Company recovers on a provisional basis, from all refineries other than Numaligarh Refinery, 50% of the transportation tariff as fixed by the Petroleum Planning & Analysis Cell (PPAC) for the year 2001-02. Accordingly, the transportation income, pertaining to the Companys Crude oil transported through pipeline to the Refineries during the year, has been accounted for as Transportation Income to the extent received/receivable from refineries which were hitherto accounted for at full value on notional basis as Income from Transportation. As regards transportation Income in respect of crude oil of M/s Oil & Natural Gas Corpn. Ltd. (ONGC) and imported crude of M/s. Bongaigaon Refinery & Petro-chemicals Ltd. (BRPL), the same are accounted for based on the Crude Oil Transportation Agreement (COTA) signed with the respective Companies.

(iv) The Company has lodged a claim on M/s. Bongaigaon Refinery & Petro-chemicals Ld. (BRPL), towards minimum guaranteed quantity of throughput, amounting to Rs.5434.22 lakh for the period from 27/12/2000 to 31.03.2003, during which the Reverse pumping facility of the Company was not fully utilized by BRPL as agreed in the MOU for this purpose. However, as the claim is yet to be accepted by M/s. Bongaigaon Refinery & Petro-chemicals Ltd., the said revenue has not been recognized in the Books of Account.

(v) (a) In terms of notification No. 4(7)-W&M/2002 dated 30th March, 2002, the Government of India had issued 6.96% Oil Companies Government of India Special Bond 2009 on 30th March, 2002, amounting to Rs. 10700.00 lakh towards settlement of a part of the estimated outstanding claims of the Company with Oil Coordination Committee under the Administered Price Mechanism. Out of the same, Bonds amounting to Rs, 10692.00 lakh (Rs. 6427.00 lakh till the end of the previous year) have been sold by the Company at par till the end of the current year. Accordingly, the balance amount of bonds amounting to Rs.8.00 lakh (Previous year Rs.4273.00. lakh) has been reflected in the books of account under the head "Investments".

(b) In terms of Notification No. 4(3)-W&M/2004 dated 23rd March, 2004, the Government of India has issued 5% Oil Companies Govt. of India Special Bond 2009 amounting to Rs.9103.40 lakh in settlement of claim arising from arrear Royally for the period 01.04.1998 to 31.03.2002 paid by the Company to State Governments. The same is reflected under the head "Investments".

(vi) The Company, for the first time has provided for liability towards Post-Retirement Medical Benefits based on an Actuarial Valuation carried out at the end of the year and, accordingly, a sum of Rs. 3200.12 lakh has been provided in the books towards such liability, which has the effect of reduction of profit for the year by like amount.

The Company is holding in its safe custody, Fixed Deposit Receipts issued in its favour by Contractors/Suppliers as Security Deposit/Earnest Money amounting to Rs. 178.88 lakh (Previous year Rs. 230.85 lakh), which are not included in the accounts.

(b) Borrowing cost capitalized during the year is nil.

(c) Rupee figures have been rounded off to nearest rupees in lakh.

(d) Previous years figures have been reclassified/regrouped, wherever necessary to conform to current years classification.


Mar 31, 2003

Note : (i) The Company took participating interest in the Production Sharing Contract for the Block at SI.No. (1) through a Farmout Agreement signed on 28-08-1998 with M/s. Total Exploration Oman. The Block stands relinquished on 31st December 2001 (ii) The Exploration Service Contract for the Block at SI. No. (2) above was signed with National Iranian Company (NIOC) the state owned company of the Government of Iran, in consortium with ONGC Videsh Limited and Indian Oil Corporation Limited.

c) Previous years figures are reflected in parentheses hereof and current years figures are unaudited.

d) The assets, liabilities, income and expenditure as shown in (a) & (b) above, being the proportionate value towards Companys Participating Interest, have been incorporated in the books of Accounts on the basis of unaudited figures. There was no income from any of the blocks during the year. No material changes are expected by the Company in the audited figures.

e) i) As per the terms of the Karsang PSC, the applicable price for JVC crude is to be ascertained from Piatts Oilgram daily publication for the previous month. Accordingly the invoicing is being done at the rates, as applicable

ii) As per terms of the Kasang PSC, provision for Abandonment Costs has to be made over eight years commencing from the third year of the date of execution of the PSC, in accordance whereof a sum of 11.49 lakhs (Previous Year Rs. 13.87 lakhs) has been provided which is included in the expenditure of Rs. 969.67 lakhs (Previous year Rs. 731.32 lakhs) reflected in Note (a) above.

iii) The valuation of inventory of Crude Oil in PSC (Kharsang) was not carried out in Companys accounts in earlier years. However the system has been changed from this year and the Companys share of Closing Stock of Crude oil as on 31st March 2003 has been valued at Rs. 35.01 lakhs and accounted for in the Companys account. Impact of this change has resulted in decrease of the profit by Rs. 0.39 lakhs.

f) The Companys Share of Contingent liability and Capital Commitment, if any, under the PCSs are shown in note No. 7 below

2. Related Party Disclosure

a) Related party relationships

Name of the related party Relationship

1. Geo Enpro Petroleum Ltd. Operator in the Kharsang PSC

2. Key Management Personnel

i) Mr. R.K. Dutta Chairman Cum Managing Director

ii) Col. P. Barua Director (Personnel)

iii) Mr. S.K. Patra Director (Exploration)

iv) Mr. M.R. Pasrija Director (Finance)

v) Mr. P.C. Goswami Director (Operation) (since deceased)

3. Current Liabilities :

Sundry Creditors include materials received on loan from other Public Sector Undertakings amounting to Rs. 207.14 lakhs (Previous year Rs. 204.09 lakhs)

4. Fixed Assets :

(i) Land in possession of the Company, includes some areas for which title deeds/conveyance deeds are yet to be executed and/or mutation in settlement records is pending. Documentation formalities are in progress.

(ii) A firm of consultants was appointed to physically verify the Fixed Assets of the Company as on 31.03.98. The firm has completed the verification and reconciliation of the assets at various locations of the Company. Based on such physical verification, assets of original cost of Rs. 3402.60 lakhs representing 2.60% of the total cost of the assets

of the Company were to be matched and reconciled, for which a sum of Rs. 1154.17 lakhs representing the Written Down Value (WDV) as on 31.03.2001 has been provided for, pending the reconciliation of the said items, on that date. Upon reconciliation, which is still continuing as on date, assets representing original cost of Rs. 2912.69 lakhs (WDV Rs. 1025.13 lakhs) have been identified and balance assets representing 0.37% of the total cost of assets on the date of the verification (31.03.98) are pending reconciliation/identification as on date. Accordingly, the provision made in the previous year as aforesaid has been correspondingly reduced.

5. Depreciation:

In accordance with the Significant Accounting Policy Para 3 (Schedule 28) depreciation on fixed assets for the year amounting to Rs. 2375.83 lakhs (Previous year Rs. 2318.59 lakhs) has been allocated to drilling and/or completion and testing of exploratory and development wells undertaken during the year.

6. Loans and Advances include:

(ii) Advances recoverable in cash or in kind or for value to be received includes materials given on loan to Public Sector Undertakings amounting to Rs. 545.58 lakhs (Previous year Rs. 681.70 lakhs).

(iii) A deposit of Rs. 1500 lakhs with a Public Sector Undertaking, including interest thereon aggregating to Rs. 4126.90 lakhs (previous year Rs. 4126.90 lakhs) has not been settled despite maturity. Since the said PSU was referred to BIFR (being a sick unit), a moratorium of three years for repayment of loan and interest thereon was granted with effect from 12.08.1992. Subsequently, BIFR on the advice of Group of Ministers appointed IDBI as the operating agency for a revival package, who recommended repayment of principal amount of loan only. Though the Company has not agreed to the proposal for waiver of interest, the Company had made a provision for doubtful advances for the full amount of interest of Rs. 2626.90 lakhs in the books of accounts till 31-03-2002 in the previous years, which has been written off during this year without waiving the right to further recourse, if any. The Company has also not accounted for the interest amounting to Rs. 210.00 Lakhs for the year (Previous year Rs. 210.00 Lakhs)

7. Contingent liabilities not provided for:

(A)(a) Claims against the Company not acknowledged as debts Rs. 24862.46 lakhs (Previous year Rs. 46094.86 lakhs) which includes :-

(i) Rs. NIL (Previous year Rs. 8446.36 lakhs) :- Excise Duty demanded on Condensate and Residue gas in respect of which appeals are pending before CEGAT.

(ii) Rs. NIL (Previous year Rs. 18757.07 lakhs) :- Excise Duty demanded on Condensate in respect of which appeals are pending before Commissioner of Excise (Appeals).

(iii) Rs. 687.20 lakhs (Previous year Rs. 645.03 lakhs):- Sales Tax and Interest demand on account of a foreign contractor is pending before the Orissa High Court.

(iv) Rs. 88.64 lakhs (Previous year Rs. 88.64 lakhs) :- Customs Duty refund received but department has preferred appeal, which is pending before CEGAT.

(v) Rs. 18219.10 lakhs (Previous year Rs. 18090.10 lakhs ) :- Claims by contractors pending decision in Arbitration.

(vi) Rs. 67.66 lakhs (Previous year Rs. 67.66 lakhs) :- Demand raised by the District Revenue authorities on account of premium/revenue on Government ceiling surplus land occupied by the Company.

(vii) Rs. 515.48 lakhs (previous year Rs. NIL) : - Performance Guarantee provided in favour of National Iranian Oil Company towards 20% participating interest of the Company in the Offshore Farsi Block in Persian Gulf. Islamic Republic of Iran.

(viii) Rs. 5237.90 Lakhs (previous Rs. Nil) - Income Tax liability on the Appeals filed by the IT. department, which have been disposed of by the Appellate Authorities in limini in absence of the clearance by the Committee On Disputes (COD). Govt. of India.

(ix) Rs. 46.48 lakhs (previous year Rs. 33.14 lakhs) - Being the 40% (OILS Share) of the disputed demand of cess on crude oil sold by JVC by Excise Authority.

(b) Letters of Credit outstanding as on 31 st March, 2003 Rs.1372.29 lakhs (Previous year Rs. 6583.30 lakhs) for which there is a floating charge on Current Assets of the company.

(B) The estimated amount on account of contracts remaining to be executed on Capital Account and not provided for in the accounts Rs.7370.38 lakhs (Previous year Rs. 7894.17 lakhs).

8. Deferred Tax

a) Adoption of Accounting standard- 22 "Accounting for taxes on income" Issued by the Institute of Chartered Accountants of India has been made mandatory for all the Companies for the accounting period commencing on or after 1st April 2002. Accordingly the Company has recorded the cumulative net deferred tax/liability in respect of all timing difference as at 31st March 2002 amounting to Rs. 59862/.06 lakhs as a deduction from the General Reserve as on. 1st April 2002 and disclosed the same separately under Source of funds. The incremental deferred tax liability (net) for the year works out to Rs. 5184.18 lakhs, which has been provided for in current year and has been added to the Deferred Tax Liability account in the Balance Sheet.

9. General

(a) (i) With effect from 1.4.2002, the price of crude oil and LPG is market determined in terms of Government of Indias policy in this regard. Accordingly, the crude oil prices during the year have been taken based on Memorandum of

Understanding (MOU) signed with various buyers. In term of the MOU, the company receives a monthly average price of crude oil bench marked to Nigerian Bonny Light crude oil after adjustment for gross product worth (quality differential) and discount on account of Base Sediment & Water (BS&W). Further, the company would be entitled to receive sales tax on crude oil sales provided Free on Board (FOB) crude oil price is up to US$21/bbl. In case FOB crude oil price exceeds US$21/bbl sales tax shall be borne by the company subject to the company getting minimum US $21/bbl plus sales tax . As regards LPG, the same continues to be notified by Indian Oil Corporation every month. However, since 1.10.2002, IOC has not notified the revised price and the company has been receiving the price as notified for October, 2002. Revenue from LPG sales has been taken accordingly

(ii) With effect from 1st October, 1997 the price of Natural Gas as notified by GAIL for every quarter is taken for invoicing.

(iii) Transportation tariff of crude oil receivable from Refineries has not been finalized for the period from 1.4.2002. Hence, the transportation income pertaining to the Companys crude oil produced and delivered to the Refineries during the year has been appropriated out of sales value of the crude oil on a provisional basis at the transportation tariff rates proposed by Petroleum Planning & Analysis Cell (PPAC). As regards transportation of crude oil pertaining to Oil & Natural Gas Corpn. Ltd. (ONGC), income has been accrued in the books of account on a provisional basis based on tariff rates proposed by PPAC for the year 2001-02.

(iv) The Government of India has issued 6.96% Oil Companies Government of India Special Bonds 2009 in terms of notification No. F.4.(7) W&M/2002 on 30th March 2002 towards settlement of a part of the estimated outstanding claims of the Company on Oil Coordination Committee under Administered Pricing Mechanism. Out of the said bonds, the bonds amounting to Rs. 3610 lakhs have been sold by the Company at par during the year. Accordingly, the balance amount of bonds amounting to Rs. 7090 lakhs has been reflected in the books of accounts under the head "Investments".

(v) The Company has been receiving interest @ 10.5% p.a. simple interest on amounts due from Oil Pool Account towards various claims up to 31.3.2002. However with the winding up of Oil Co-ordination Committee, the additional claims have been raised during the year on Petroleum Planning And analysis Cell (PPAC), a new body created by Ministry of Petroleum & Natural Gas, Government of India. Since, there are no guidelines for payment of interest on outstanding amounts due from Oil Pool Account w.e.f. 1.4.2002 no interest income has been accounted for during the year on the outstanding amounts.

(b) The Company is holding in its safe custody, Call Deposit Receipts, Cash Certificate, Pass book, issued in its favour by Contractors/ Suppliers as security deposit/earnest money amounting to Rs. 271.94 lakhs (Previous year Rs. 309.96 lakhs) which are not included in the accounts.

(c) The Company had undertaken a research project on Pilot Plant for co-processing of Assam Coal & Oil Into clean liquid fuels in consortium with HRI Incorporation USA, subsequently known as IFP North America Inc. and presently known as Axens NA, under PACER grant. The original total cost envisaged for the project was Rs. 925.70 lakhs inclusive of Foreign Exchange component of Rs. 549 lakhs against which a conditional PACER grant was available for US$ 1174500 and Rs. 94.70 lakhs or 65% of the actual project cost, whichever is lower. The Pilot plant has been commissioned in March, 1999 to undertake pilot test and to determine commercial potential.

The PACER GRANT is subject to the conditions that the grant was to be repaid within one year of each disbursement subject to the following :

(i) In the event the project not being successful and/or not resulting in successful commercialisation and no product with commercial potential is developed then the entire conditional grant will be due to the Company. Upon completion of the pilot test, the commercial viability of the project was not established and as such as per the terms of the contract the amount of Rs. 477.62 lakhs equivalent to US$ 1174500 ( at exchange rate prevailing at the date of original transaction) has been refunded by ICICI (Nodal Agency).

(ii) However the company is desirous of continuing the project for coal fuel only with further modifications to pilot plant, as may be necessary.

(d) During the year, the Company acquired the entire paid up capital of 1000 Equity Shares of US$1/- each amounting to US$/- 1000/-in respect of M/s Sakhalin India Inc., a company registered under the laws of Texas, USA M/s Sakhalin India Inc., has accordingly become a wholly owned subsidiary (100%) of the Company w.e.f. 10-03-2003,

the date on which the transaction of sales and purchase of the equity shares was settled between the Company and M/s ONGC Videsh Ltd. (OVL) through a Sale and Purchase Agreement dated 07.03.2003. Further in terms of the Sale and Purchase Agreement, the total amount of money spent by M/s OVL, through M/s Sakhalin India Inc. towards participating interest share of expenses in the North HellHole Bayou Prospect in the Vermillion Parish, Offshore, Louisiana, USA, was taken over by the Company from M/s OVL as loan on the effective date of the Agreement. In turn, the total amount of loan from M/s OVL along with other amounts transferred to M/s Sakhalin India Inc.s bank account for its operations by the Company has been treated in the books of accounts as Un- secured Loans to M/s Sakhalin India Inc. The Company has not consolidated the financial statement of M/s Sakhalin India Inc. in terms of option available under the Accounting Standard 21 dealing with "Consolidation of Financial statement" read with Section 212 of the Companies Act 1956. However, the Balance Sheet of M/s Sakhalin India Inc. as at 31.3.2003 is annexed to the Companys financial statement.

(e) Contributions to Pension, Gratuity Funds and liability for leave encashment are as per pare 9 of Significant Accounting Policies (Schedule 28) on the basis of Actuarial valuation done as at the year end.

(f) Borrowing cost capitalised during the year is nil.

(g) The inventory of stock and spare parts includes a sum of Rs. 275.07 lakhs which was alleged as damaged in transit in 1999-2000 against which an insurance claim was lodged. The insurance survey report against the claim was received during the year 2000-01 where the surveyor opined that actual loss could only be estimated once minor repair and N.D. Test are carried out by the company with the help of external agency. The N.D. Tests have been carried out and the final assessment of the same/claim is awaited which is not likely to prejudice the current assets of the Company.

(h) Rupee figures have been rounded off to nearest lakhs of rupees.

(i) Schedules 1 to 28 from an integral part of the accounts.

(j) Previous years figures have been rearranged/regrouped/recasted wherever necessary.

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