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A Oneindia Venture

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Accounting Policies of Mangalore Refinery And Petrochemicals Ltd. Company

Mar 31, 2025

1. Corporate information

Mangalore Refinery and Petrochemicals Limited (''MRPL'' or ''the Company''} is a Central Public Sector Enterprise domiciled and incorporated in India having its registered office at Mudapadav, Kuthethoor P.O. via Katipalla, Mangaluru, Karnataka - 575030. The Company''s equity shares are listed and traded on BSE Limited and National Stock Exchange of India Limited. The Company is engaged in the business of refining of crude oil. The Company is a subsidiary of Oil and Natural Gas Corporation Limited which holds 71.63% equity shares.

2. Application of new and revised Indian Accounting Standards

All the Indian Accounting Standards issued under Section 133 of the Companies Act, 2013 and notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards} Rules, 2015 (as amended} till the financial statements are approved have been considered in preparing these Financial Statements.

In accordance with the amendments to the Indian Accounting Standards (Ind AS} effective April 1, 2023, the Company is now disclosing only material accounting policy information in its financial statements, instead of significant accounting policies as required previously. This change aligns the Company''s disclosure practices with the updated Ind AS framework and does not affect the financial statements themselves.

As on the reporting date, there were no new Indian Accounting Standards (Ind AS} issued by the Ministry of Corporate Affairs (MCA) which would have been applicable from April 1, 2025.

3. Material Accounting Policy Information :3.1. Statement of compliance

These Financial Statements have been prepared in accordance with the Indian Accounting Standards (referred to as âInd ASâ} as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards} Rules as amended from time to time and the presentation requirements of Division II of Schedule Ill to the Companies Act, 2013, (Ind AS compliant Schedule Ill}, as applicable to the financial statements.

3.2. Basis of preparation

The Financial Statements have been prepared on going concern basis on the historical cost convention using accrual system of accounting except for certain assets and liabilities which are measured at fair value / amortized cost / net present value at the end of each reporting period, as explained in the accounting policies for financial instruments.

All Assets and Liabilities have been classified as current or non-current as per the Company''s normal operating cycle (same has been assumed to have duration of 12 months} and other criteria set out in Ind AS - 1 âPresentation of Financial Statementsâ and the Schedule Ill to the Companies Act, 2013.

The Financial Statements are presented in Indian Rupees (''} which is also company''s functional currency. All values are rounded off to the nearest two decimal million except otherwise stated.

3.3. Goodwill

3.3.1 Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

3.3.2 Goodwill arising on amalgamation of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

the previous GAAP and use that as its deemed cost as at the date of transition (April 1, 2015).

3.4. Revenue Recognition

3.4.1 Revenue from sales of goods and services are recognized upon the satisfaction of a performance obligation, which occurs when control transfers to the customer. Control of the goods is determined to be transferred to the customer when the title of goods passes to the customer, which typically takes place when product is physically transferred into a vessel, pipeline (other than Company owned pipeline) or other delivery mechanism. In respect of revenue contracts for goods which provide for provisional pricing (wherever applicable) at the time of shipment, the final price adjustment if any will be given effect in the period in which it is finalised/ settled.

3.4.2 Revenue is measured at the transaction price of the consideration received or receivable and represents amounts receivable for goods and services including excise duty provided in the normal course of business, net of discounts or rebates, GST and sales tax. Any retrospective revision in prices is accounted for in the year of such revision.

3.5. Leases

To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

(i) The contract involves use of an identified assets.

(ii) The company has substantially all the economic benefits from the use of the asset through the period of the lease, and

(iii) The company has the right to direct the use of the asset.

Company as a Lessee:

Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. Right-of-Use Assets and Lease Liabilities include these options when it is reasonably certain that they will be exercised.

The Lease Liability is initially measured at present value of the future lease payments over the reasonably certain lease term. The lease payments are discounted using the interest rate implicit in the lease, if it is not readily determinable, using the incremental borrowing rate. For leases with similar characteristics, the Company, on a lease by lease basis applies either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the portfolio as a whole.

The Right-of-Use Assets are initially recognized at cost, which comprises the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the inception date of the lease along with any initial direct costs, restoration obligations and lease incentives received.

Subsequently, the Right-of-Use Assets are measured at cost less any accumulated depreciation and accumulated impairment losses, if any. The Right-of-Use Assets are depreciated using the straight-line method, except in case of leasehold lands where the ownership will be transferred to the Company, from the commencement date over the shorter of lease term or useful life of Right-of-Use Assets. However, in case of ownership of such right-of-use asset transfers to the lessee at the end of the lease term, such assets are depreciated over the useful life of the underlying asset. The Company applies Ind AS 36 to determine whether a Right-of-Use Asset are impaired and accounts for any identified impairment loss as described in the accounting policy below on "Impairment of Non-Financial Assets".

The interest cost on Lease Liability (computed using effective interest method) is expensed in the Statement of Profit and Loss unless eligible for capitalization as per accounting policy below on "Borrowing or Finance costs".

The Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract in accordance with Ind AS 116 and allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

Right-of-Use Assets are derecognized upon completion or cancellation of the lease contract.

Lease Liability and Right-of-Use Assets have been separately presented in the Balance Sheet and lease payments have been classified as financing activity in the Statement of Cash Flows.

Lease modification impact is on prospective basis.

The Company has elected not to apply Ind AS 116 âLeasesâ to intangible assets.

3.6. Foreign Currency Transactions

Transactions in currencies other than the Company''s Functional Currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated using closing exchange rate prevailing on the last day of the reporting period.

Exchange difference arising in respect of foreign currency monetary items is recognised in the Statement of Profit and Loss either as ''Exchange Rate Fluctuation loss/ (gains) (Net)'' or as ''Finance Costs'' except for the exchange difference related to long term foreign currency monetary items outstanding as at March 31, 2016, in so far as, they relate to the acquisition of depreciable assets, are adjusted against the cost of such assets and depreciate the said adjustment, over the balance life of asset.

3.7. Borrowing or Finance Costs

Borrowing costs specifically identified to the acquisition or construction of qualifying assets are capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. Capitalization of borrowing costs is suspended when active development of the qualifying asset is interrupted other than on temporary basis and charged to the statement of Profit and Loss during such extended periods. All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred.

3.8. Government Grants

Government Grants including the export incentives are not recognised until there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants will be received.

Government Grants are recognised in Statement of Profit and Loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate.

Specifically, Government Grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the Balance Sheet and transferred to Statement of Profit and Loss on a systematic and rational basis over the useful lives of the related assets.

The benefit of a Government loan at a below market rate of interest is treated as a Government Grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.

3.9. Employee Benefits

Employee benefits include salaries, wages, Contributory provident fund, gratuity, leave encashment towards un-availed leave, compensated absences, post-retirement medical benefits and other terminal benefits.

3.9.1. Short Term Employee Benefits

All short term employee benefits are recognized at their undiscounted amount in the accounting period in which they are incurred.

3.9.2. Post-Employment benefits Defined Contribution Plans:

Employee Benefit under defined contribution plans comprising Contributory provident fUnd, superannuation benefit, Employee pension scheme-1995, etc. is recognized based on the undiscounted amount of obligations of the Company to contribute to the plan. The superannuation benefit is paid to a fUnd administered through a separate trust.

Defined Benefit Plans:

Defined employee benefit plans comprising of gratuity, post-retirement medical benefits and other terminal benefits, are recognized based on the present value of defined benefit obligation which is computed using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. These are accounted either as current employee cost or included in cost of assets as permitted.

Net interest on the net defined liability is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset and is recognised in the Statement of Profit and Loss except those included in cost of assets as permitted.

Remeasurement of defined retirement benefit plans except for leave encashment towards un-availed leave and compensated absences, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest as defined above), are recognized in other comprehensive income except those included in cost of assets as permitted in the period in which they occur and are not subsequently reclassified to profit or loss.

The Company contributes all ascertained liabilities with respect to gratuity to the MRPL Gratuity Fund Trust (MGFT). Liability towards post-retirement medical benefits and other terminal benefits etc. are unfunded.

The retirement benefit obligation recognised in the Financial Statements represents the actual deficit or surplus in the Company''s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of reductions in future contributions to the plans.

3.9.3. Other Long-term Employee Benefits :

Other long term employee benefit comprises of leave encashment towards un-availed leave. These are recognized based on the present value of defined obligation which is computed using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. These are accounted either as current employee cost or included in cost of assets as permitted.

Re-measurements of leave encashment towards un-availed leave are recognized in the Statement of profit and loss except those included in cost of assets as permitted in the period in which they occur.

3.9.4. Termination Benefits :

Expenditure on account of schemes like premature retirement on medical grounds, post-retirement benefit and benefit on separation and Benefits of separation under SABF etc. are charged to Statement of Profit and Loss as and when incurred.

3.10. Income Taxes

Income Tax Expense represents the sum of the Current Tax and Deferred Tax.

(i) Current Tax

The tax currently payable is based on Taxable Profit for the year together with any adjustment to tax payable in respect of previous years. Taxable profit differs from ''Profit Before Tax'' as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s Current Tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Current Income Tax Assets and Liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities.

(ii) Deferred Tax

Deferred Tax is provided using the Balance Sheet method and is recognized on temporary differences between the carrying amounts of Assets and Liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit. Deferred Tax Liabilities are generally recognised for all taxable temporary differences. Deferred Tax Assets are generally recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses to the extent that it is probable that taxable profits will be available against which those deductible temporary differences, the carry forward of unused tax credits and any unused tax losses can be utilized.

Deferred Taxes are recognised in respect of temporary differences which originate during the tax holiday period but reverse after the tax holiday period. For this purpose, reversal of temporary difference is determined using first in first out method.

The carrying amount of Deferred Tax Assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred Tax Liabilities and Assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.

The measurement of Deferred Tax Liabilities and Assets reflects the tax consequences that would follow fRom the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its Assets and Liabilities.

Deferred Tax Assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognised as Deferred Tax Asset in the Balance Sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with asset will be realised.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Current and Deferred Tax for the year

Current and Deferred Tax are recognised in Statement of Profit and Loss, except when they relate to items that are recognised in Other Comprehensive Income or directly in equity, in which case, the Current and Deferred Tax are also recognised in Other Comprehensive Income or directly in Equity respectively.

3.11. Property, Plant and Equipment (PPE) and Right of Use Assets (ROU)3.11.1. Recognition

Property, Plant and Equipment including Capital Work in Progress (CWIP) are stated in the Balance Sheet at cost, less accumulated depreciation and accumulated impairment losses if any.

The Company has elected to use the exemption available under Ind AS 101 to continue the carrying value for all of its Property, Plant and Equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (April 1, 2015).

3.11.2. Cost of Property, Plant and Equipment

Parts of an item of PPE having different useful lives and material value as assessed by management and subsequent capital expenditure on Property, Plant and Equipment are accounted for as separate components.

Catalyst whose useful life is more than one year is capitalised as Property, Plant and Equipment.

Stores and Spares which qualifies as Property, Plant and Equipment are capitalised based on materiality threshold (if any). [Refer para 4.3].

Item of PPE having basic value not exceeding ''1,000/- (other than company employee''s asset purchase scheme) are fully charged to statement of Profit and Loss in the year of purchase.

Item of PPE purchased under employee''s asset purchase scheme are capitalized based on Company''s policy for the applicable scheme.

Directly identifiable expenditure on overhaul and repairs on account of planned shutdown (other than replacement spare) which are of significant value i.e. 5% of the gross value of particular asset / unit or ''10 million or more for a particular asset /unit whichever is lower is capitalized as component of relevant items of PPE and will be depreciated over the period till next planned shutdown on straight line basis. All replacement spares procured and consumed during overhaul and repairs on account of planned shutdown are capitalised.

In respect of the capital goods common for both GST and non-GST products, the GST input tax credit is taken on the eligible portion based on GST and non-GST product ratio in the month of accounting and the ineligible portion is capitalized. Subsequently, this ratio is reviewed every month as per the GST provisions and the differential GST amount (if any) arising due to changes in the ratio is capitalized when it is beyond the materiality threshold. [Refer para 4.3].

3.11.3. Useful Life

The useful life of PPE (other than employee''s asset purchase scheme) and their components are either based on useful life as stated in Schedule II to the Companies Act, 2013 or based on technical assessment by the Company.

The useful life of assets purchased under employee''s asset purchase scheme are based on Company''s policy for the applicable scheme.

In respect of immovable assets constructed on leasehold land, useful life as per Schedule II or lease period of land (including renewable/likely renewable period) whichever is earlier is considered.

Estimated useful life of the Assets are as follows:
Sl.	Particulars	Useful life
No.		( in years)
1.	Buildings	3-60
2.	Plant and Equipment -Refinery and Petrochemical Plant â¢ Civil and Structural works. â¢ Piping Items. â¢ Offshore Components. â¢ SPM and related components. â¢ Storage tanks. â¢ Pipelines. â¢ Boiler, Electrical items, Exchanger, Air Coolers, Fire protection and Safety, Heater, Packages, Reactors, Rotary Equipment, Spares, Static Equipment and Miscellaneous items. â¢ DCS, EOT crane, Instrumentation items. â¢ Catalyst. â¢ Continuous Process Plant not covered under Specific Industries (Triple shift).	2-42
3.	Plant and Equipment -Power Plant â¢ Power producing equipment. â¢ Civil and Structural works. â¢ Instrumentation items.	15-40
4.	Plant and Equipment -Desalination Plant â¢ Offshore Components. â¢ Civil and Structural works. â¢ Piping items. â¢ Electrical items, Exchange Air cooler, Fire protection and Safety items, Packages, Rotary equipment, Static Equipment and Miscellaneous Items. â¢ DCS, EOT crane and Instrumentation items	15-30
5.	Furniture and fittings	3-15
6.	Motor vehicles	4-15
7.	Railway Siding	15
8.	Office Equipment	3-15
9.	Computers and data processing units	3-10
10.	Laboratory Equipment	5-15
11.	Retail outlets
	â¢ Dispensing Units	7-15
	â¢ Tankages	7-15
	â¢ Electrical installation & Equipmentâs	10
	â¢ Automation	5

3.11.4. Residual Value

The Company has assessed the estimated residual value of its Property, Plant and Equipment and has adopted the same as prescribed in Schedule II i.e. up to 5% except for the assets purchased under employee''s asset purchase scheme are based on Company''s policy (10% to 20%).

3.11.5. Depreciation

Depreciation is provided on the cost of PPE (other than Freehold Land and Properties under construction) less their residual values over their useful lives, using Straight Line Method.

Catalysts are depreciated over the guaranteed useful life as specified by the supplier /technical evaluation (whichever is earlier) when the catalyst is put to use.

Planned shutdown cost which are recognized as PPE are depreciated over the period till next planned shutdown on straight line basis.

Depreciation on stores and spares which are capitalised as Property, Plant and Equipment are depreciated over the period starting when it is available for use i.e. from date of acceptance of material and continuing over the shorter of its useful life or the remaining expected useful life of the asset to which it relates.

The depreciation for assets purchased under employee''s asset purchase scheme are based on Company''s policy for the applicable scheme.

Depreciation on additions to PPE during the year is provided for on a pro-rata basis with reference to the date of additions except low value items not exceeding basic value of '' 5,000/- per unit (other than company asset purchase scheme for employee''s) which are fully depreciated at the time of addition.

Depreciation on subsequent expenditure on PPE arising on account of capital improvement or other factors is provided for prospectively over the remaining useful life. The Company depreciates significant components of the main asset (which have different useful lives as compared to the main asset) based on the individual useful life of those components.

Right-of-Use Assets are depreciated on a straight line basis over the lease term or useful life of the underlying asset, whichever is lower, except leasehold lands where the ownership will be transferred to the Company.

3.1.6. De-recognition

An item of Property, Plant and Equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising on de-recognition of an item of Property, Plant and Equipment is determined as the difference between the net disposal proceeds (if any) and the carrying amount of the item.

In the event of replace of spare, the written down value of the old spare is charged to the Statement of Profit and Loss as and when replaced.

3.12 Intangible Assets3.12.1. Intangible Assets other than Goodwill

Intangible Assets with finite useful lives that are acquired separately are carried at cost less Accumulated amortisation and Accumulated impairment losses, if any. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are not subject to amortization and are carried at cost less Accumulated impairment losses if any.

measured as per the previous GAAP and use that as its deemed cost as at the date of transition (1^st April 2015).

3.12.2. Useful lives of Intangible Assets

Estimated useful life of the Intangible Assets are as follows:
SL. No.	Particulars	Useful life ( in years)
1.	Computer Software	2-10
2.	Licence and Franchise	3-5

3.13 Impairment of Non-financial Assets

The Company reviews the carrying amounts of its Non-financial assets other than inventories, deferred tax assets and non-current assets classified as held for sale at the end of each reporting period to determine whether there is any significant indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the Cash Generating Unit (CGU) to which the asset belongs.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or Cash Generating Unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or Cash Generating Unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the Statement of Profit and Loss.

An assessment is made at the end of each reporting period as to see if there are any indications that impairment losses recognized earlier may no longer exist or may have come down. The impairment loss is reversed, if there has been a change in the estimates used to determine the Asset''s recoverable amount since the previous impairment loss was recognized. If it is so, the carrying amount of the asset is increased to the lower of its recoverable amount and the carrying amount that have been determined, net of depreciation / amortization, had no impairment loss been recognized for the asset in prior years. After a reversal, the depreciation / amortization charge is adjusted in future periods to allocate the asset''s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. Reversals of Impairment loss are recognized in the Statement of Profit and Loss.

3.14. Statement of Cash Flows

Statement of Cash Flows are reported using the indirect method, whereby Profit After Tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with Investing or Financing activities. The Cash Flows are segregated into Operating, Investing and Financing activities.

3.15. Inventories

Inventories are valued at lower of cost and net realizable value. Cost of inventories comprises of purchase cost and other costs incurred in bringing inventories to their present location and condition. The cost has been determined as under:

Raw Materials (Crude)	On First in First Out (FIFO) basis.
Other Raw Materials	On Weighted Average Cost basis.
Finished Goods	On First In First Out (FIFO) basis.
Stock-in-Trade	On Weighted Average Cost basis.
Stock-in-Process	At Raw Material and Proportionate Conversion Cost.
Stores and Spares including packing materials	On Weighted Average Cost basis.

Raw Materials are not written down below cost except in case where their prices have declined subsequently and it is estimated that the cost of the finished goods will exceed their net realizable value.

Excise duty on Finished Goods lying at manufacturing location is provided for at the assessable value based on applicable duty.

Customs duty on Raw Materials lying in bonded warehouse is provided for at the applicable rates.

Obsolete, Slow Moving, Surplus and Defective Stocks are identified at the time of physical verification of stocks and where necessary, provision is made for such stocks.

3.16 Provisions, Contingent Liabilities, Contingent Assets and Commitments

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

Contingent assets are disclosed in the Financial Statements by way of Notes to Accounts when an inflow of economic benefits is probable.

Contingent liabilities are possible obligations whose existence will only be confirmed by future events not wholly within the control of the Company, or present obligations where it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured with sufficient reliability. Contingent liabilities are disclosed on the basis of judgement of the management / independent experts in the Financial Statements by way of Notes to Accounts, unless possibility of an outflow of resources embodying economic benefit is remote. [Refer para 4.3].

Contingent assets and contingent liabilities are reviewed at each balance sheet date to reflect the current management estimate.

Capital and Other Commitments disclosed are in respect of items which in each case are above the threshold limit. [Refer para 4.3].

3.17 Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments. A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another entity or a contract that will or may be settled in the entity''s own equity instruments and is a non-derivative for which the entity is or may be obliged to deliver a variable number of the entity''s own equity instruments.

Initial recognition and measurement

Financial Assets and Financial Liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of Financial Assets and Financial Liabilities (other than Financial Assets and Financial Liabilities at fair value through profit or loss) are added to or deducted from the fair value of the Financial Assets or Financial Liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of Financial Assets or Financial Liabilities at fair

value through profit or loss are recognised immediately in Statement of Profit and Loss. [Refer para 4.3].

3.18. Financial Assets

Subsequent Measurement

All recognised Financial Assets are subsequently measured in their entirety at either amortised cost or fair value, based on the business model for managing the financial assets and the contractual cash flow characteristics.

(i) Financial Assets at Amortised Cost

Financial Assets are subsequently measured at amortised cost using the effective interest method if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the Financial Asset give rise on specified dates to Cash Flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

(ii) Financial Assets at Fair value through Other Comprehensive Income (FVOCI)

Financial Assets are measured at fair value through Other Comprehensive Income if these Financial Assets are held within a business whose objective is achieved by both selling Financial Assets and collecting contractual Cash Flows, the contractual terms of the Financial Asset give rise on specified dates to Cash Flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

(iii) Financial Assets at Fair value through Profit or Loss (FVTPL)

Financial Assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through Other Comprehensive Income.

After initial measurement, any fair value changes including any interest income, impairment loss and other net gains and losses are recognized in the Statement of Profit and Loss.

(iv) Cash and Cash Equivalents

The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be Cash Equivalents. Cash and Cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.

(v) Equity Investments:

Equity Investments (Other than Subsidiaries, Joint Ventures (JV) and Associates):

All Equity Investments in the scope of Ind AS 109 are measured at Fair value. Equity Instruments which are held for trading are classified as at FVTPL. For all other such equity investments, the Company decides to classify the same either as FVOCI or FVTPL. The Company makes such election on an instrument-byinstrument basis. The classification is made on initial recognition and is irrevocable.

Equity Investments (In subsidiaries, Joint Ventures (JV) and Associates):

Investment in Subsidiaries, Joint Ventures (JV) and Associates are accounted for at cost in Standalone Financial Statements.

(vi) Impairment of Financial Assets

The Company assesses at each Balance Sheet date whether a Financial Asset or a group of Financial Assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognises lifetime expected losses for trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to 12 month expected credit losses or at an amount equal to lifetime expected losses, if the credit risk on the financial asset has increased significantly since initial recognition.

(vii) Derecognition of Financial Assets

The Company derecognises a Financial Asset when the contractual rights to the cash flows from the asset expire, or when it transfers the Financial Asset and substantially all the risks and rewards of ownership of the

asset to another party.

On derecognition of a Financial Asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable is recognised in the Statement of Profit and Loss.

3.19. Financial Liabilities and Equity Instruments3.19.1 Financial Liabilities Subsequent measurement

(i) Financial liabilities at amortised cost:

Financial Liabilities are measured at Amortised Cost at the end of subsequent accounting periods. The carrying amounts of Financial Liabilities that are subsequently measured at amortised cost are determined based on the Effective Interest method. Interest expense that is not capitalised as part of costs of an asset is included in the ''Finance Costs'' line item.

(ii) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include derivatives. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss.

(iii) Embedded derivatives

Derivatives embedded in all other host contract except for an asset are separated only if the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host and are measured at fair value through profit or loss. Embedded derivatives closely related to the host contracts are not separated.

Derecognition of Financial Liabilities

The Company derecognises Financial Liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the Financial Liability derecognised and the consideration paid and payable is recognised in the Statement of Profit and Loss.

3.19.2 Equity Instruments

An Equity Instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received. Incremental costs directly attributable to the issuance of new ordinary equity shares are recognized as a deduction from equity, net of tax effects.

3.20. Financial Guarantee

Financial guarantee contracts issued by the Company are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of

i. The amount of loss allowance determined in accordance with impairment requirements of Ind AS 109; and

ii. The amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of Ind AS 115.

When the Company receives Financial Guarantee from its holding company, initially it measures guarantee fees at the fair value. The Company records the difference between the fair value of Corporate Guarantee received and the consideration paid by the company as âDeemed Equityâ from Holding Company with a corresponding asset recorded as prepaid guarantee charges or by debiting to statement of Profit and Loss as the case may be. Such deemed equity is presented under the head ''Other Equity'' in the Balance Sheet. Prepaid guarantee charges are recognized in the Statement of Profit and Loss over the period of Financial Guarantee received.

4 Critical Accounting Judgements, Assumptions and Key Sources of Estimation Uncertainty

Inherent in the application of many of the Accounting Policies used in preparing the Financial Statements is

the need for management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual outcomes could differ from the estimates and assumptions used.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods are affected.

Key source of judgements, assumptions and estimation uncertainty in the preparation of the Financial Statements which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are in respect of useful lives of Property, Plant and Equipment, Employee Benefit Obligations, Provision for Income Tax and measurement of Deferred Tax Assets.

4.1 Critical judgements in applying accounting policies

The following are the critical judgements, apart from those involving estimations (Refer note 4.2 below), that the Management have made in the process of applying the Company''s accounting policies and that have the significant effect on the amounts recognized in the Financial Statements.

Determination of Functional Currency

Currency of the primary economic environment in which the Company operates (âthe Functional Currencyâ) is Indian Rupee (?) in which the company primarily generates and expends cash. Accordingly, the management has assessed its Functional Currency to be Indian Rupee ('').

4.2 Assumptions and key sources of estimation uncertainty

Information about estimates and assumptions that have the significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may differ from these estimates.

a) Useful life of Property, Plant and Equipment and Intangible Assets

Management reviews its estimate of the useful lives of PPE and Intangible Assets at each reporting date, based on the future economic benefits expected to be consumed from the Assets.

b) Defined Benefit Obligation (DBO)

Management''s estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of inflation, medical cost trends, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

c) Provision for Income Tax

Significant judgements are involved in determining the provision for Income Taxes, including amount expected to be paid/recovered for uncertain tax positions.

d) Recognition of Deferred Tax Assets

The extent to which Deferred Tax Assets can be recognized is based on an assessment of the probability of the Company''s future taxable income against which the Deferred Tax Assets can be utilized. In addition, significant judgement is required in assessing the impact of any legal or economic limits or uncertainties.

e) Leases

Identifying whether a Contract includes a Lease

The Company enters into hiring/service arrangements for various assets/services. The Company evaluates whether a contract contains a lease or not, in accordance with the principles of Ind AS 116. This requires significant judgements including but not limited to, whether asset is implicitly identified and substantive substitution rights available with the supplier, decision making rights with respect to how the underlying asset will be used, economic substance of the arrangement, etc.

Determining Lease Term (Including Extension and Termination Options)

The Company considers the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. Assessment of

extension/termination options is made on lease by lease basis, on the basis of relevant facts and circumstances. The lease term is reassessed if an option is actually exercised. In case of contracts, where the Company has the option to hire and de-hire the underlying asset on some circumstances (such as operational requirements), the lease term is considered to be initial contract period.

Identifying Lease Payments for Computation of Lease Liability

To identify fixed (including in-substance fixed) lease payments, the Company consider the non-operating day rate/standby as minimum fixed lease payments for the purpose of computation of Lease Liability and corresponding Right of Use Assets.

Low Value Leases

Ind AS 116 requires assessment of whether an underlying asset is of low value, if lessee opts for the option of not to apply the recognition and measurement requirements of Ind AS 116 to leases where the underlying asset is of low value. For the purpose of determining low value, the Company has considered nature of assets and concept of materiality as defined in Ind AS 1 and the conceptual framework of Ind AS which involve significant judgement.

Determining Discount Rate for Computation of Lease Liability

For computation of Lease Liability, Ind AS 116 requires lessee to use their incremental borrowing rate as discount rate if the rate implicit in the lease contract cannot be readily determined.

For leases denominated in Company''s Functional Currency, the Company considers the incremental borrowing rate to be Corporate Bond Rates for similar rated Organizations.

Mar 31, 2024

3. Material Accounting Policy Information :

3.1. Statement of compliance

These Financial Statements have been prepared in accordance with the Indian Accounting Standards (referred to as âInd ASâ) as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules as amended from time to time and the presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III), as applicable to the financial statements.

3.2. Basis of preparation

All Assets and Liabilities have been classified as current or non-current as per the Company''s normal operating cycle (same has been assumed to have duration of 12 months) and other criteria set out in Ind AS - 1 âPresentation of Financial Statementsâ and the Schedule III to the Companies Act, 2013.

The Financial Statements are presented in Indian Rupees (?) which is also company''s functional currency. All values are rounded off to the nearest two decimal million except otherwise stated.

3.3. Goodwill

3.3.1 Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

3.3.2 Goodwill arising on amalgamation of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

3.3.3 The Company has elected to use the exemption available under Ind AS 101 to continue the carrying value for goodwill as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (April 1, 2015).

3.4. Revenue Recognition

3.5. Leases

To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

(i) The contract involves use of an identified assets.

(ii) The company has substantially all the economic benefits from the use of the asset through the period of the lease, and

(iii) The company has the right to direct the use of the asset.

Company as a Lessee:

At the date of commencement of the lease, the Company recognizes a Right-of-Use Asset (ROU Asset) and a corresponding Lease Liability for all lease contracts / arrangements in which it is a lessee, except for lease with a term of twelve months or less (i.e. short term leases) and lease of low value assets. For these short-term and low value leases, the Company recognizes the lease payments on straight-line basis over the term of the lease.

asset. The Company applies Ind AS 36 to determine whether a Right-of-Use Asset are impaired and accounts for any identified impairment loss as described in the accounting policy below on "Impairment of Non-Financial Assets".

Right-of-Use Assets are derecognized upon completion or cancellation of the lease contract.

Lease Liability and Right-of-Use Assets have been separately presented in the Balance Sheet and lease payments have been classified as financing activity in the Statement of Cash Flows.

Lease modification impact is on prospective basis.

3.6. Foreign Currency Transactions

3.7. Borrowing or Finance Costs

3.8. Government Grants

3.9. Employee Benefits

3.9.1. Short Term Employee Benefits

All short term employee benefits are recognized at their undiscounted amount in the accounting period in which they are incurred.

3.9.2. Post-Employment benefits Defined Contribution Plans:

Employee Benefit under defined contribution plans comprising Contributory provident fund, superannuation benefit, Employee pension scheme-1995, etc. is recognized based on the undiscounted amount of obligations of the Company to contribute to the plan. The superannuation benefit is paid to a fund administered through a separate trust.

Defined Benefit Plans:

3.9.3. Other Long-term Employee Benefits :

Re-measurements of leave encashment towards un-availed leave are recognized in the Statement of profit and loss except those included in cost of assets as permitted in the period in which they occur.

3.9.4. Termination Benefits :

Loss as and when incurred.

3.10. Income Taxes

Income Tax Expense represents the sum of the Current Tax and Deferred Tax.

(i) Current Tax

Current Income Tax Assets and Liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities.

(ii) Deferred Tax

The measurement of Deferred Tax Liabilities and Assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its Assets and Liabilities.

Current and Deferred Tax for the year

3.11. Property, Plant and Equipment (PPE) and Right of Use Assets (ROU)

3.11.1. Recognition

Property, Plant and Equipment including Capital Work in Progress (CWIP) are stated in the Balance Sheet at cost, less accumulated depreciation and accumulated impairment losses if any.

3.11.2. Cost of Property, Plant and Equipment

Catalyst whose useful life is more than one year is capitalised as Property, Plant and Equipment.

Stores and Spares which qualifies as Property, Plant and Equipment are capitalised based on materiality threshold (if any). [Refer para 4.3].

Item of PPE having basic value not exceeding '' 1,000/- (other than company employee''s asset purchase scheme) are fully charged to statement of Profit and Loss in the year of purchase.

Item of PPE purchased under employee''s asset purchase scheme are capitalized based on Company''s policy for the applicable scheme.

Directly identifiable expenditure on overhaul and repairs on account of planned shutdown (other than replacement spare) which are of significant value i.e. 5% of the gross value of particular asset / unit or '' 10 million or more for a particular asset /unit whichever is lower is capitalized as component of relevant items of PPE and will be depreciated over the period till next planned shutdown on straight line basis. All replacement spares procured and consumed during overhaul and repairs on account of planned shutdown are capitalised.

3.11.3. Useful Life

The useful life of assets purchased under employee''s asset purchase scheme are based on Company''s policy for the applicable scheme.

In respect of immovable assets constructed on leasehold land, useful life as per Schedule II or lease period of land (including renewable/likely renewable period) whichever is earlier is considered.

3.11.4. Residual Value

3.11.5. Depreciation

Depreciation is provided on the cost of PPE (other than Freehold Land and Properties under construction) less their residual values over their useful lives, using Straight Line Method.

Catalysts are depreciated over the guaranteed useful life as specified by the supplier /technical evaluation (whichever is earlier) when the catalyst is put to use.

Planned shutdown cost which are recognized as PPE are depreciated over the period till next planned shutdown on straight line basis.

The depreciation for assets purchased under employee''s asset purchase scheme are based on Company''s policy for the applicable scheme.

Depreciation on additions/deletions to PPE during the year is provided for on a pro-rata basis with reference to the date of additions/deletions except low value items not exceeding '' 5,000/- (other than company asset purchase scheme for employee''s) which are fully depreciated at the time of addition.

3.11.6. De-recognition

In the event of replace of spare, the written down value of the old spare is charged to the Statement of Profit and Loss as and when replaced.

3.12 Intangible Assets

3.12.1. Intangible Assets other than Goodwill

The Company has elected to use the exemption available under Ind AS 101 to continue the carrying value

for all of its intangible assets as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (1st April 2015).

3.13 Impairment of Non-financial Assets

3.14 Statement of Cash Flows

3.15 Inventories

Excise duty on Finished Goods lying at manufacturing location is provided for at the assessable value based on applicable duty.

Customs duty on Raw Materials lying in bonded warehouse is provided for at the applicable rates.

Obsolete, Slow Moving, Surplus and Defective Stocks are identified at the time of physical verification of stocks and where necessary, provision is made for such stocks.

Mar 31, 2023

1. Corporate information

Mangalore Refinery and Petrochemicals Limited (âMRPLâ or âthe Companyâ) is a Central Public Sector Enterprise domiciled and incorporated in India having its registered office at Mudapadav, Kuthethoor P.O. via Katipalla, Mangaluru, Karnataka - 575030. The Companyâs equity shares are listed and traded on BSE Limited and National Stock Exchange of India Limited. The Company is engaged in the business of refining of crude oil. The Company is a subsidiary of Oil and Natural Gas Corporation Limited which holds 71.63% equity shares.

The erstwhile wholly owned subsidiary company, ONGC Mangalore Petrochemicals Limited (OMPL) has been amalgamated with the Company, vide Order No. 24/3/2021-CL-III of Ministry of Corporate Affairs (MCA) dated April 14, 2022 from the appointed date i.e. April 1, 2021 to create greater synergies between the business operations of both the companies.

2. Application of new and revised Indian Accounting Standards

All the Indian Accounting Standards issued and notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) till the financial statements are authorized have been considered in preparing these Financial Statements.

As on the reporting date, there were no new Indian Accounting Standards (Ind AS) issued by the Ministry of Corporate Affairs (MCA) which would have been applicable from April 1,2023. MCA has amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023 applicable from April 1, 2023. The company is in the process of evaluating its impact on the financial statement of the company. However, the company expects no major impact on the financial statements due to the above mentioned amendments. The Company does not expect this amendment to have any significant impact in its financial statements.

3. Significant Accounting Policies3.1. Statement of compliance

3.2. Basis of preparation

The Company has adopted all the Ind AS and the adoption was carried out during Financial Year 2016-17 in accordance with Ind AS 101 (First time adoption of Indian Accounting Standards). The transition was carried out from Generally Accepted Accounting Principles in India (Indian GAAP) as prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014, which was the âPrevious GAAPâ.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

All Assets and Liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in Ind AS - 1 âPresentation of Financial Statementsâ and the Schedule III to the Companies Act, 2013.

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

Fair Value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions.

The Company categorizes assets and liabilities measured at fair value into one of three levels depending on the ability to observe inputs employed in their measurement which are described as follows:

(a) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

(b) Level 2 inputs are inputs that are observable, either directly or indirectly, other than quoted prices included within level 1 for the assets or liabilities.

(c) Level 3 inputs are unobservable inputs for the assets or liabilities reflecting significant modifications to observable related market data or Companyâs assumptions about pricing by market participants.

3.3. Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

Goodwill arising on amalgamation of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

For the purposes of impairment testing, goodwill is allocated to Companyâs cash-generating units that is expected to benefit from the synergies of the combination.

A Cash Generating Unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the Cash Generating Unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in Statement of Profit and Loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

On disposal of the relevant Cash Generating Unit, the attributable amount of goodwill is included in the determination of the profit or loss.

The Company has elected to use the exemption available under Ind AS 101 to continue the carrying value for goodwill as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (1st April 2015).

3.4. Investments in Subsidiaries, Joint Ventures and Associates

3.4.1 The Company records the Investments in Subsidiaries, Joint Venture and Associates at cost and reviews for impairment at each reporting date, if any. Cost includes deemed cost of investment arising from certain contractual provisions entered into by the Company.

3.4.2 The Company records the initial fair value of financial guarantee given to subsidiary company as deemed investment with a corresponding liability recorded as deferred revenue under financial guarantee obligation. Such deemed investment is added to the carrying amount of investment in subsidiaries. Deferred revenue is recognized in the Statement of Profit and Loss over the remaining period of financial guarantee issued as other income.

3.4.3 After initial recognition, the Company determines whether there is any objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the net investment in Subsidiaries, Joint Ventures and Associates and that event (or events) has an impact on the estimated future cash flows from the net investment that can be reliably estimated. If there exists such an objective evidence of impairment, then company recognizes impairment loss with respect to the Companyâs investment in Subsidiaries, Joint Ventures and Associates.

3.4.4 When necessary, the cost ofthe Investment is tested for impairment in accordance with Ind AS 36 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount. Any reversal of impairment loss is recognised in accordance with Ind AS 36 to the extent that the recoverable amount of the investment subsequently increases.

3.4.5 Upon disposal of Investment in Subsidiaries, Joint Ventures and Associates, a gain or loss is recognised in the Statement of Profit and Loss and is calculated as the difference between

(a) The aggregate of the fair value of consideration received and

(b) The previous carrying amount of the Investment in Subsidiary or Joint Venture.

3.5. Business CombinationsBusiness Combination under Common control

A business combination involving entities or businesses under common control is a business combination in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination and the control is not transitory. The transactions between entities under common control are specifically covered by Appendix C to Ind AS 103 and are accounted for using the pooling-of-interest method as follows:

â¢ The assets and liabilities of the combining entities are reflected at the carrying amounts.

â¢ No adjustments are made to reflect fair values, or recognize new assets or liabilities. Adjustments are made to harmonize significant accounting policies.

â¢ The financial information in the financial statements in respect of prior periods is restated as if the business combination has occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination.

The balance of the retained earnings appearing in the financial statements of the transferor is aggregated with the corresponding balance appearing in the financial statements of the transferee. The identity of the reserves are preserved and the reserves of the transferor become the reserves of the transferee.

The difference, if any, between the amounts recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor is transferred to capital reserve and is presented separately from other capital reserves.

3.6. Non-Current Assets held for sale

Non-Current Assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.

Non-Current Assets are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification as held for sale, and actions required to complete the plan of sale should indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Property, Plant and Equipment and Intangible Assets are not depreciated or amortized once classified as held for sale.

3.7. Revenue Recognition

3.7.1 Revenue from sales of goods and services are recognized upon the satisfaction of a performance obligation, which occurs when control transfers to the customer. Control of the goods is determined to be transferred to the customer when the title of goods passes to the customer, which typically takes place when product is physically transferred into a vessel, pipeline (other than Company owned pipeline) or other delivery mechanism. In respect of revenue contracts for goods which provide for provisional pricing (wherever applicable) at the time of shipment, the final price adjustment if any will be given effect in the period in which it is finalised/ settled.

3.7.2 Revenue is measured at the transaction price of the consideration received or receivable and represents amounts receivable for goods and services including excise duty provided in the normal course of business, net of discounts or rebates, GST and sales tax. Any retrospective revision in prices is accounted for in the year of such revision.

3.7.3 Price Reduction Schedule (PRS) for delay in execution of contracts/supplies are accounted for as per the terms of the contracts/ agreement. The PRS amount would be recognised as income except on account of capital projects wherein the adjustments are carried out to the cost of the asset. The adjustments are carried out prospectively upon finalization.

3.7.4 The Company has entered into take or pay contracts with a customer. In this transaction, revenue is recognised as per the formula laid out in the contract with the customers.

3.7.5 Revenue from sale of scrap is recognised at the point in time when control (transfer of custody of goods) is passed to customers.

3.7.6 Interest income from Financial Assets is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable (which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assetâs net carrying amount on initial recognition).

3.7.7 For Non -Financial Assets, interest income is recognised on a time proportion basis. Interest income on refundable taxes/ duties is recognised on receipt basis.

3.7.8 Dividend Income is recognised when the right to receive the dividend is established.

3.7.9 Excise duty is presented as expense in the Statement of Profit and Loss. Excise duty in respect of difference between closing and opening stock of excisable goods is included under âOther Expensesâ.

3.7.10 Revenue from Export Incentives as applicable are recognised as revenue as per para 3.11 on Government Grants. The incentive values are recognized initially for expected realizable value and subsequently adjusted for actual realized value in the period when it is actually sold.

3.8. Leases

To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

(i) The contract involves use of an identified assets

(ii) The company has substantially all the economic benefits from the use of the asset through the period of the lease and

(iii) The company has the right to direct the use of the asset.

Company as a Lessee:

Right-of-Use Assets are derecognized upon completion or cancellation of the lease contract.

Lease Liability and Right-of-Use Assets have been separately presented in the Balance Sheet and lease payments have been classified as financing activity in the Statement of Cash Flows.

Lease modification impact is on prospective basis.

3.9. Foreign Currency Transactions

The Companyâs Financial Statements are presented in Indian Rupee (A), which is also its Functional Currency.

Transactions in currencies other than the Companyâs Functional Currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated using closing exchange rate prevailing on the last day of the reporting period.

Exchange difference arising in respect of foreign currency monetary items is recognised in the Statement of Profit and Loss either as âExchange Rate Fluctuation loss/ (gains) (Net)â or as âFinance Costsâ except for the exchange difference related to long term foreign currency monetary items outstanding as at March 31, 2016, in so far as, they relate to the acquisition of depreciable assets, are adjusted against the cost of such assets and depreciate the said adjustment, over the balance life of asset.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

3.10. Borrowing or Finance Costs

Borrowing or Finance costs consists of interest and other costs incurred in connection with the borrowing of funds and interest on lease liability.

Borrowing costs also include exchange differences arising from foreign currency borrowings to the extent regarded as an adjustment to interest cost i.e. equivalent to the extent to which the exchange loss does not exceed the difference between the cost of borrowing in functional currency (A) when compared to the cost of borrowing in a foreign currency. When there is an unrealized exchange loss which is treated as an adjustment to interest and subsequently there is a realized or unrealized gain in respect of the settlement or translations of the same borrowing, the gain to the extent of the loss previously recognized as an adjustment is also recognized as an adjustment to interest.

Discounts or premiums and expenses on the issue of debt securities are amortised over the term of the related securities and included within borrowing costs.

Investment Income earned on the temporary investment of funds of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing cost eligible for capitalization.

3.11. Government Grants

3.12. Employee Benefits

3.12.1 Short Term Employee Benefits

All short term employee benefits are recognized at their undiscounted amount in the accounting period in which they are incurred.

3.12.2 Post-Employment benefits Defined Contribution Plans

Defined Benefit Plans

The retirement benefit obligation recognised in the Financial Statements represents the actual deficit or surplus in the Companyâs defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of reductions in future contributions to the plans.

3.12.3 Other Long-term Employee Benefits

Re-measurements of leave encashment towards un-availed leave are recognized in the Statement of profit and loss except those included in cost of assets as permitted in the period in which they occur.

3.12.4 Termination Benefits

3.13. Income Taxes

Income Tax Expense represents the sum of the Current Tax and Deferred Tax.

(i) Current Tax

The tax currently payable is based on Taxable Profit for the year together with any adjustment to tax payable in respect of previous years. Taxable profit differs from âProfit Before Taxâ as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Companyâs Current Tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Current Income Tax Assets and Liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities.

(ii) Deferred Tax

Deferred Taxes are recognised in respect of temporary differences which originate during the tax holiday period but reverse after the tax holiday period. For this purpose, reversal oftemporary difference is determined using first in first out method.

Current and Deferred Tax for the year

3.14. Property, Plant and Equipment (PPE) and Right of Use Assets (ROU)

Property, Plant and Equipment held for use in the production or supply of goods or services, or for administrative purposes, are stated in the Balance Sheet at cost less accumulated depreciation and accumulated impairment losses if any. Freehold Land is not depreciated.

Property, Plant and Equipment in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. The cost of an asset comprises its purchase price or its construction cost (net of applicable tax credits) and any cost directly attributable to bring the asset into the location and condition necessary for it to be capable of operating in the manner intended by the management and the initial estimated present value of any contractual decommissioning obligation, if any. It includes professional fees and borrowing costs for qualifying assets capitalised in accordance with the Companyâs accounting policy. Such properties are classified to the appropriate categories of PPE when completed and ready for intended use. Parts of an item of PPE having different useful lives and material value as assessed by management and subsequent capital expenditure on Property, Plant and Equipment are accounted for as separate components. Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

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

Depreciation of PPE commences when the assets are ready for their intended use.

The useful life of PPE (other than employeeâs vehicle, computer and furniture scheme etc.) and their components are either based on useful life as stated in Schedule II to the Companies Act, 2013 or based on technical assessment by the Company.

The useful life of assets purchased under employeeâs vehicle, computer and furniture scheme etc. are based on Companyâs policy for the applicable scheme.

The estimated useful life, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

Catalyst whose useful life is more than one year is capitalised as Property, Plant and Equipment and depreciated over the guaranteed useful life as specified by the supplier /technical evaluation (whichever is earlier) when the catalyst is put to use.

Stores and Spares which qualifies as Property, Plant and Equipment for specific machinery are capitalised. Major capital spares are capitalised as Property, Plant and Equipment.

Depreciation on addition on account of expenditure on overhaul and repairs, Catalyst, stores and spares and major capital spares which are capitalised as Property, Plant and Equipment are depreciated over the period starting when it is brought into service and continuing over the shorter of its useful life and the remaining expected useful life of the asset to which it relates and written down value of the old spare is charged to the Statement of Profit and Loss as and when replaced.

Depreciation on additions/deletions to PPE during the year is provided for on a pro-rata basis with reference to the date of additions/deletions except low value items not exceeding A 5,000/- (other than company purchase scheme for employees) which are fully depreciated at the time of addition.

Estimated useful life of the Assets are as follows:
SI.	Particulars	Useful life
No.		( in years)
1.	Buildings	3-60
2.	Plant and Equipment -Refinery and Petrochemical Plant â¢ Civil and Structural works. â¢ Piping Items. â¢ Offshore Components. â¢ SPM and related components. â¢ Storage tanks. â¢ Pipelines. â¢ Boiler, Electrical items, Exchanger, Air Coolers, Fire protection and Safety, Heater, Packages, Reactors, Rotary Equipment, Spares, Static Equipment and Miscellaneous items. â¢ DCS, EOT crane, Instrumentation items. â¢ Catalyst.
	â¢ Continuous Process Plant not covered under Specific Industries (Triple shift).	2-42
3.	Plant and Equipment -Power Plant â¢ Power producing equipment. â¢ Civil and Structural works.
	â¢ Instrumentation items.	15-40
4.	Plant and Equipment -Desalination Plant â¢ Offshore Components. â¢ Civil and Structural works. â¢ Piping items. â¢ Electrical items, Exchange Air cooler, Fire protection and Safety items, Packages, Rotary equipment, Static Equipment and Miscellaneous Items.
	â¢ DCS, EOT crane and Instrumentation items.	15-30
5.	Furniture and Fixtures	3-15
6.	Motor vehicles	4-15
7.	Railway Siding	15
8.	Office Equipment	3-15
9.	Computers and data processing units	3-10
10.	Laboratory Equipment	10-15

An item of Property, Plant and Equipment is derecognised upon disposal, replacement, deduction, reclassification or when no future economic benefits are expected to arise from the continued use of the asset. The loss arising on retirement of an item of Property, Plant and Equipment is determined with regard to the WDV value and the net value after set off of the accumulated depreciation as on date is recognized in Statement of Profit and Loss.

In respect of immovable assets constructed on leasehold land, useful life as per Schedule II or lease period of land (including renewable/likely renewable period) whichever is earlier is considered.

3.15. Intangible Assets3.15.1. Intangible Assets other than Goodwill

Technical know-how / license fee relating to production process and process design are recognized as intangible asset and amortized on a straight line basis over the life of the underlying plant / facility.

Expenditure on internally generated intangibles, excluding development costs, is not capitalized and is reflected in Statement of Profit and Loss in the period in which such expenditure is incurred.

An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognized if, and only if, all of the following have been demonstrated:

â¢ The technical feasibility of completing the intangible asset so that it will be available for use or sale

â¢ The intention to complete the intangible asset and use or sell it;

â¢ The ability to use or sell the intangible asset;

â¢ How the intangible asset will generate probable future economic benefits;

â¢ The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

â¢ The ability to measure reliably the expenditure attributable to the intangible asset during its development.

The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Recognition of costs as an asset is ceased when the project is complete and available for its intended use, or if these criteria are no longer applicable. Where development activities do not meet the conditions for recognition as an asset, any associated expenditure is treated as an expense in the period in which it is incurred.

Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

Cost incurred on computer software/licenses purchased/developed resulting in future economic benefits, other than specific software that are integral part of the related hardware, are capitalized as Intangible Asset and amortised based on technical evaluation or 10 year whichever is lower from the date when such software/ licenses are capitalised. However, where such computer software/ license is under development or is not yet ready for use, accumulated cost incurred on such items are accounted as âIntangible Assets Under Developmentâ.

The Company has elected to use the exemption available under Ind AS 101 to continue the carrying value for all of its intangible assets as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (1st April 2015).

3.15.2. Derecognition of Intangible Assets

An Intangible Asset is derecognised on disposal, or when no future economic benefits are expected from use. Gains or losses arising from derecognition of an Intangible Asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognised in Statement of Profit and Loss when the asset is derecognised.

3.15.3. Useful lives of Intangible Assets

Estimated useful life of the Intangible Assets are as follows:

SI. No.	Particulars	Useful lives ( in years)
1.	Computer Software	3-10
2.	Licence and Franchise	3

3.16. Impairment of Non-financial Assets

The Company reviews the carrying amounts of its Non-financial assets other than inventories, deferred tax assets, non-current assets classified as held for sale and goodwill at the end of each reporting period to determine whether there is any significant indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the Cash Generating Unit (CGU) to which the asset belongs.

since the previous impairment loss was recognized. If it is so, the carrying amount of the asset is increased to the lower of its recoverable amount and the carrying amount that have been determined, net of depreciation / amortization, had no impairment loss been recognized for the asset in prior years. After a reversal, the depreciation / amortization charge is adjusted in future periods to allocate the assetâs revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. Reversals of Impairment loss are recognized in the Statement of Profit and Loss.

3.17. Statement of Cash Flows

3.18. Earnings Per Share (EPS)

Basic Earnings per Share are calculated by dividing the Net Profit or Loss for the period attributable to Equity Shareholders (after deducting preference dividends, if any, and attributable taxes) by the weighted average number of Equity Shares outstanding during the period.

For the purposes of calculating Diluted Earnings per Share, the Net Profit or Loss for the period attributable to Equity Shareholders and the weighted average number of Shares outstanding during the period are adjusted for the effect of all dilutive potential Equity Shares.

3.19. Inventories

Raw Materials (Crude)	On First In First Out (FIFO) basis.
Other Raw Materials	On Weighted Average Cost basis
Finished Goods	At Raw material and Conversion cost
Stock-in-Trade	On Weighted Average Cost basis
Stock-in-Process	At Raw Material and Proportionate Conversion Cost
Stores and Spares including packing materials	On Weighted Average Cost basis

Excise duty on Finished Goods lying at manufacturing location is provided for at the assessable value based on applicable duty.

Customs duty on Raw Materials lying in bonded warehouse is provided for at the applicable rates.

Obsolete, Slow Moving, Surplus and Defective Stocks are identified at the time of physical verification of stocks and where necessary, provision is made for such stocks.

Scrap items, when determined, are valued at estimated net realizable value.

3.20. Provisions, Contingent Liabilities, Contingent Assets and Commitments

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. If the effect of time value of money is material, provisions are discounted using an appropriate pre-tax discount rate. When discounting is used, the increase in provision due to the passage of time is recognized as a Finance Costs.

The expenses relating to a provision is presented in the Statement of Profit and Loss net of reimbursements, if any.

Contingent assets are disclosed in the Financial Statements by way of Notes to Accounts when an inflow of economic benefits is probable.

Contingent liabilities are possible obligations whose existence will only be confirmed by future events not wholly within the control of the Company, or present obligations where it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured with sufficient reliability. Contingent liabilities are disclosed on the basis of judgment of the management / independent experts in the Financial Statements by way of Notes to Accounts, unless possibility of an outflow of resources embodying economic benefit is remote.

Contingent assets and contingent liabilities are reviewed at each balance sheet date to reflect the current management estimate.

Capital and Other Commitments disclosed are in respect of items which in each case are above the threshold limit.

3.21. Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments. A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another entity or a contract that will or may be settled in the entityâs own equity instruments and is a non-derivative for which the entity is or may be obliged to deliver a variable number of the entityâs own equity instruments.

Initial recognition and measurement

3.22. Financial Assets Subsequent Measurement

(i) Financial Assets at Amortised Cost

(ii) Financial Assets at Fair value through Other Comprehensive Income (FVOCI)

(iii) Financial Assets at Fair value through Profit or Loss (FVTPL)

Financial Assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through Other Comprehensive Income.

After initial measurement, any fair value changes including any interest income, impairment loss and other net gains and losses are recognized in the Statement of Profit and Loss.

(iv) Cash and Cash Equivalents

(v) Equity Investments:

Equity Investments (Other than Subsidiaries, Joint Ventures (JV) and Associates):

All Equity Investments in the scope of Ind AS 109 are measured at Fair value. Equity Instruments which are held for trading are classified as at FVTPL. For all other such equity investments, the Company decides to classify the same either as FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

Equity Investments (In subsidiaries, Joint Ventures (JV) and Associates):

Investment in Subsidiaries, Joint Ventures (JV) and Associates are accounted for at cost in Standalone Financial Statements.

(vi) Impairment of Financial Assets

(vii) Derecognition of Financial Assets

On derecognition of a Financial Asset in its entirety, the difference between the assetâs carrying amount and the sum of the consideration received and receivable is recognised in the Statement of Profit and Loss.

3.23. Financial Liabilities and Equity Instruments3.23.1 Financial Liabilities Subsequent measurement

(i) Financial liabilities at amortised cost:

(ii) Financial liabilities at fair value through profit or loss

(iii) Embedded derivatives

Derecognition of Financial Liabilities

The Company derecognises Financial Liabilities when, and only when, the Companyâs obligations are discharged, cancelled or have expired. The difference between the carrying amount ofthe Financial Liability derecognised and the consideration paid and payable is recognised in the Statement of Prof

Mar 31, 2022

1. Corporate information

Mangalore Refinery and Petrochemicals Limited (''MRPL'' or ''the Company'') is a Central Public Sector Enterprise domiciled and incorporated in India having its registered office at Mudapadav, Kuthethoor P.O. via Katipalla, Mangaluru, Karnataka - 575030. The Company''s equity shares are listed and traded on BSE Limited and National Stock Exchange Limited. The Company is engaged in the business of refining of crude oil. The Company is a subsidiary of Oil and Natural Gas Corporation Limited which holds 71.63% equity shares.

The wholly owned subsidiary company, ONGC Mangalore Petrochemicals Limited (OMPL) has been amalgamated with the Company, vide Order No. 24/3/2021-CL-III of Ministry of Corporate Affairs (MCA) dated April 14, 2022 from the appointed date i.e. April 1, 2021 to create greater synergies between the business operations of both the companies.

2. Application of new and revised Indian Accounting Standards

The Ministry of Corporate Affairs (MCA) through a notification (âCompanies (Indian Accounting Standards) amendment Rules, 2022â) dated March 23, 2022, amended Indian Accounting Standards (Ind AS) 101, Indian Accounting Standards (Ind AS) 103, Indian Accounting Standards (Ind AS) 109, Indian Accounting Standards (Ind AS) 16, Indian Accounting Standards (Ind AS) 37 which shall be effective from April 1,2022. The company is in the process of evaluating its impact on the financial statement of the company. However, the company expects no major impact on the financial statements due to the above mentioned amendments.

3. Significant Accounting Policies3.1. Statement of compliance

3.2. Basis of preparation

The figures for the previous year ended March 31, 2021 included in the Standalone Financial Statements for the year ended March 31, 2022, have been restated to give effects of the scheme of amalgamation of ONGC Mangalore Petrochemicals Limited (OMPL) (a wholly owned subsidiary) with the Company, vide Order No. 24/3/2021-CL-III of Ministry of Corporate Affairs (MCA) dated April 14, 2022 from the appointed date i.e. April 1, 2021, in line with Ind AS 103 (Appendix C) Business Combinations of entities under common control Hence the restated financial statements for previous year ended March 31,2021 are not comparable with the previously published standalone financial statements.

The Financial Statements have been prepared on the historical cost convention basis except for certain financial instruments that are measured at fair values / amortized cost / net present value at the end of each reporting period, as explained in the accounting policies below.

Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014, which was the âPrevious GAAPâ.

Historical cost is generally based on the fair value ofthe consideration given in exchange for goods and services.

All Assets and Liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in Ind AS - 1 âPresentation of Financial Statementsâ and the Schedule III to the Companies Act, 2013.

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

Fair Value measurement

The Company categorizes assets and liabilities measured at fair value into one of three levels depending on the ability to observe inputs employed in their measurement which are described as follows:

(a) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

(b) Level 2 inputs are inputs that are observable, either directly or indirectly, other than quoted prices included within level 1 for the assets or liabilities.

(c) Level 3 inputs are unobservable inputs for the assets or liabilities reflecting significant modifications to observable related market data or Company''s assumptions about pricing by market participants.

3.3. Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

Goodwill arising on amalgamation of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

For the purposes of impairment testing, goodwill is allocated to Company''s cash-generating units that is expected to benefit from the synergies ofthe combination.

On disposal of the relevant Cash Generating Unit, the attributable amount of goodwill is included in the determination of the profit or loss.

3.4. Investments in Subsidiaries, Joint Ventures and Associates

3.4.3 After initial recognition, the Company determines whether there is any objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the net investment in Subsidiaries, Joint Ventures and Associates and that event (or events) has an impact on the estimated future cash flows from the net investment that can be reliably estimated. If there exists such an objective evidence of impairment, then it is necessary to recognise impairment loss with respect to the Company''s investment in Subsidiaries, Joint Ventures and Associates.

3.4.4 When necessary, the cost of the Investment is tested for impairment in accordance with Ind AS 36 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount. Any reversal of impairment loss is recognised in accordance with Ind AS 36 to the extent that the recoverable amount of the investment subsequently increases.

3.4.5 Upon disposal of Investment in Subsidiaries, Joint Ventures and Associates, a gain or loss is recognised in the Statement of Profit and Loss and is calculated as the difference between

(a) The aggregate of the fair value of consideration received and

(b) The previous carrying amount of the Investment in Subsidiary or Joint Venture.

3.5. Business CombinationsBusiness Combination under Common control

â¢ The assets and liabilities of the combining entities are reflected at the carrying amounts.

â¢ No adjustments are made to reflect fair values, or recognize new assets or liabilities. Adjustments are made to harmonize significant accounting policies.

The balance of the retained earnings appearing in the financial statements of the transferor is aggregated with the corresponding balance appearing in the financial statements of the transferee. The identity of the reserves are preserved and the reserves ofthe transferor become the reserves ofthe transferee.

3.6. Non-Current Assets held for sale

Non-Current Assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.

Non-Current Assets are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject to terms that are usual and customary for sales of such assets. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification as held for sale, and actions required to complete the plan of sale should indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Property, Plant and Equipment and Intangible Assets are not depreciated or amortized once classified as held for sale.

3.7. Revenue Recognition

3.7.4 The Company has entered into take or pay contracts with a customer. In this transaction, revenue is recognised as per the formula laid out in the contract with the customers.

3.7.5 Revenue from sale of scrap is recognised at the point in time when control (transfer of custody of goods) is passed to customers.

3.7.7 For Non -Financial Assets, interest income is recognised on a time proportion basis. Interest income on refundable taxes/ duties is recognised on receipt basis.

3.7.8 Dividend Income is recognised when the right to receive the dividend is established.

3.8. Leases

To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

(i) The contract involves use of an identified assets

(ii) The company has substantially all the economic benefits from the use of the asset through the period of the lease and

(iii) The company has the right to direct the use of the asset.

Company as a Lessee:

At the date of commencement of the lease, the Company recognizes a Right-of-Use Assets (ROU Assets) and a corresponding Lease Liability for all lease contracts / arrangements in which it is a lessee, except for lease with a term of twelve months or less (i.e. short term leases) and lease of low value assets. For these short-term and low value leases, the Company recognizes the lease payments on straight-line basis over the term ofthe lease.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. Right-of-Use Assets and Lease Liabilities includes these options when it is reasonably certain that they will be exercised.

The Right-of-Use Assets are initially recognized at cost, which comprises the amount ofthe initial measurement of the lease liability adjusted for any lease payments made at or before the inception date of the lease along with any initial direct costs, restoration obligations and lease incentives received.

Subsequently, the Right-of-Use Assets are measured at cost less any accumulated depreciation and accumulated impairment losses, if any. The Right-of-Use Assets are depreciated using the straight-line method, except in case of leasehold lands where the ownership will be transferred to the Company, from the commencement date over the shorter of lease term or useful life of Right-of-Use Assets, however, in case of ownership of such right-of-use asset transfers to the lessee at the end of the lease term, such assets are depreciated over the useful life of the underlying asset. The Company applies Ind AS 36 to determine whether a Right-of-Use Assets are impaired and accounts for any identified impairment loss as described in the accounting policy below on "Impairment of Non-Financial Assets".

Right-of-Use Assets are derecognized upon completion or cancellation ofthe lease contract.

Lease Liability and Right-of-Use Assets have been separately presented in the Balance Sheet and lease payments have been classified as financing activity in the Statement of Cash Flows.

Lease modification impact is on prospective basis.

3.9. Foreign Currency Transactions

The Company''s Financial Statements are presented in Indian Rupee (''), which is also its Functional Currency.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

3.10. Borrowing Costs

Borrowing costs consists of interest and other costs incurred in connection with the borrowing of funds and interest on lease liability.

Borrowing costs also include exchange differences arising from foreign currency borrowings to the extent regarded as an adjustment to interest cost i.e. equivalent to the extent to which the exchange loss does not exceed the difference between the cost of borrowing in functional currency (?) when compared to the cost of borrowing in a foreign currency. When there is an unrealized exchange loss which is treated as an adjustment to interest and subsequently there is a realized or unrealized gain in respect of the settlement or translations of the same borrowing, the gain to the extent of the loss previously recognized as an adjustment is also recognized as an adjustment to interest.

Borrowing costs specifically identified to the acquisition or construction of qualifying assets is capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. Capitalization of borrowing costs is suspended when active development on the qualifying assets is interrupted other than on temporary basis and charged to the statement of Profit and Loss during such extended periods. All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred.

Discounts or premiums and expenses on the issue of debt securities are amortised over the term of the related securities and included within borrowing costs.

Investment Income earned on the temporary investment of funds of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing cost eligible for capitalization.

3.11. Government Grants

3.12. Employee Benefits

Employee benefits include salaries, wages, provident fund, superannuation fund, gratuity, leave encashment, post-employment medical benefits, resettlement allowances and termination benefits.

3.12.1 Short Term Employee Benefits

All short-term employee benefits are recognized at their undiscounted amount in the accounting period in which they are incurred.

3.12.2 Post-Employment benefits Defined Contribution Plans

Defined Contribution Plans comprising of contribution towards superannuation fund and is recognized based on the undiscounted amount of obligation of the Company to contribute to the plan. The same is paid to a fund administered through a separate trust.

Defined Benefit Plans

Defined Benefit Plans comprising of gratuity, post-retirement medical benefits and other long-term retirement benefits, which are recognized based on the present value of Defined Benefit Obligations and is computed using the Projected Unit Credit Method, which is being carried out at the end of each annual reporting period by independent actuaries. These are accounted as current Employee Costs or included in cost of Assets as permitted.

Net interest on the net defined liability is calculated by applying the discount rate at the beginning of the period to the net Defined Benefit Liability or Asset and is recognized in the Statement of Profit and Loss except those included in cost of Assets as permitted.

Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest as defined above), are recognized in Other Comprehensive Income except those included in cost of assets as permitted in the period in which they occur and are not subsequently reclassified to profit or loss.

The Company contributes all ascertained liabilities with respect to Gratuity to the MRPL Gratuity Fund Trust (MGFT) other than erstwhile subsidiary company ONGC Mangalore Petrochemicals Limited (OMPL) whose Gratuity plan is unfunded. Other Defined Benefit schemes are un-funded.

The Retirement Benefit Obligation recognised in the Balance Sheet represents the actual deficit or surplus in the Company''s Defined Benefit Plans. Any surplus resulting from the actuarial calculation is limited to the present value of any economic benefits available in the form of reductions in future contributions to the plans.

3.12.3 Other Long-term Employee Benefits

Other long term employee benefits (leave encashment and Provident Fund contribution to trust) are determined on actuarial valuation by independent actuaries using Projected Unit Credit method, which is being carried at the end of each annual reporting period.

established for this purpose based on a fixed percentage of the eligible employee''s salary and charged to the Statement of Profit and Loss or include in the cost of Assets as permitted. Shortfall, if any, in the fund assets, based on the Government specified minimum rate of return, is made good by the Company and charged to the Statement of Profit and Loss, other than the erstwhile subsidiary company ONGC Mangalore Petrochemicals Limited (OMPL), whose provident fund is paid to the Provident Fund Authorities and is expensed during the year.

Leave encashment which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised.

Liability towards the above plans are recognized at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled.

Re-measurements gains and losses are recognized in the statement of profit and loss in the period in which they arise.

3.12.4 Termination Benefits for the company

Other than the erstwhile subsidiary company ONGC Mangalore Petrochemicals Limited (OMPL)

Premature Retirement on Medical Grounds

The Company has an approved scheme of Premature Retirement on Medical Grounds. Ex-gratia payment equivalent to 60 days emolument for each completed year of service or the monthly emoluments at the time of retirement multiplied by the balance months of service left before normal date of retirement, whichever is less is payable apart from Superannuation Benefits.

Scheme for Self Insurance for providing lump-sum monetary compensation

Under the scheme of ''Post Retirement Benefit and Benefit on Separation'', in case of employee suffering death or permanent total disablement due to an accident arising out of and in the course of employment, a compensation equivalent to 100 months Basic Pay plus Dearness Allowance (DA) without laying down any minimum amount is payable.

Benefits of Separation under SABF (re-nomenclatured now as MDCPS)

In case of death / permanent disablement of an employee while in service in the Company, the beneficiary has to exercise desired options available within 6 months from the date of death / permanent total disablement.

Termination Benefits are charged to Statement of Profit and Loss as and when incurred.

3.13. Income Taxes

Income Tax Expense represents the sum of the Current Tax and Deferred Tax.

(i) Current Tax

Current Income Tax Assets and Liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities.

(ii) Deferred Tax

Current and Deferred Tax for the year

3.14. Property, Plant and Equipment (PPE) and Right of Use Assets (ROU)

Property, Plant and Equipment in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. The cost of an asset comprises its purchase price or its construction cost (net of applicable tax credits) and any cost directly attributable to bring the asset into the location and condition necessary for it to be capable of operating in the manner intended by the management and the initial estimated present value of any contractual decommissioning obligation, if any. It includes professional fees and borrowing costs for qualifying assets capitalised in accordance with the Company''s accounting policy. Such properties are classified to the appropriate categories of PPE when completed and ready for intended use. Parts of an item of PPE having different useful lives and material value as assessed by management and subsequent capital expenditure on Property, Plant and Equipment are accounted for as separate components. Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

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

Depreciation of PPE commences when the assets are ready for their intended use.

Depreciation is provided on the cost of PPE (other than Freehold Land and Properties under construction) less their residual values (after retaining the estimated residual value ofupto 5%) over their useful lives, using Straight Line Method, over the useful life of component of various assets as specified in Schedule II to the Companies Act, 2013, except in case of certain components of the Plant and Equipment/ other assets whose useful lives are determined based on technical evaluation and the useful life considered under Company''s policy for the employee''s vehicle, computer and furniture scheme.

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

In respect ofthe capital goods common for both GST and non-GST products, the GST input tax credit is taken on the eligible portion based on GST and non-GST product ratio in the month of accounting and the ineligible portion is capitalized. Subsequently, this ratio is reviewed every month as per the GST provisions and the differential GST amount arising due to changes in the ratio is capitalized when beyond the materiality threshold.

Expenditure on overhaul and repairs on account of planned shutdown which are of significant value (5% of the gross value of particular asset) is capitalized as component of relevant items of PPE and is depreciated over the period till next shutdown on straight line basis. Catalyst whose life is more than one year is capitalised as Property, Plant and Equipment and depreciated over the guaranteed useful life as specified by the supplier when the catalyst is put to use.

Stores and Spares which qualifies as Property, Plant and Equipment for specific machinery are capitalised.

Major capital spares are capitalised as Property, Plant and Equipment.

Depreciation on additions/deletions to PPE during the year is provided for on a pro-rata basis with reference to the date of additions/deletions except low value items not exceeding ''5,000/- (other than company purchase scheme for employees) which are fully depreciated at the time of addition.

Estimated useful lives ofthe Assets are as follows:

Sl. No.	Particulars	Useful lives ( in years)
1.	Buildings	1-60
2.	Plant and Equipment - Catalysts	2-10
3.	Plant and Equipment - Computers	3-7
4.	Plant and Equipment - Continuous Process Plant not covered under Specific Industries (Triple shift)	7.5
5	Plant and Equipment - Electrical/ Lab/ Canteen/ School	10
6.	Plant and Equipment - Instrumentation items/ DCS/ Hospital/ Others	1 5 -4 2

7.	Plant and Equipment - Refinery Assets	15-42
8.	Plant and Equipment - Process Plant	25-30
9.	Plant and Equipment - Pipelines/ SPM/ Offshore Component/ Civil Structure	1 5 -4 2
10.	Plant and Equipment - Power Plant	25-40
11.	Railway Siding	15
12.	Plant and Equipment - Others	3-15
13.	Office Equipment	3-15
14.	Furniture and Fixtures	3-10
15.	Vehicles	4-15

An item of Property, Plant and Equipment is derecognised upon disposal, replacement, deduction, reclassification or when no future economic benefits are expected to arise from the continued use of the asset. The loss arising on retirement of an item of Property, Plant and Equipment is determined with regard to the WDV value and the net value of after set off of the accumulated depreciation as on date is recognized in Statement of Profit and Loss.

In respect of immovable assets constructed on leasehold land, useful life as per Schedule II or lease period of land (including renewable/likely renewable period) whichever is earlier is considered.

3.15. Intangible Assets3.15.1. Intangible Assets other than Goodwill

Expenditure on internally generated intangibles, excluding development costs, is not capitalized and is reflected in Statement of Profit and Loss in the period in which such expenditure is incurred.

An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognized if, and only if, all of the following have been demonstrated:

â¢ The technical feasibility of completing the intangible asset so that it will be available for use or sale

â¢ The intention to complete the intangible asset and use or sell it;

â¢ The ability to use or sell the intangible asset;

â¢ How the intangible asset will generate probable future economic benefits;

â¢ The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

â¢ The ability to measure reliably the expenditure attributable to the intangible asset during its development.

3.15.2. Derecognition of Intangible Assets

3.15.3. Useful lives of Intangible Assets

SI. No.	Particulars	Useful lives ( in years)
1.	Computer Software	3-10
2.	Licence and Franchise	3

3.16. Impairment of Non-financial Assets

3.17. Statement of Cash Flows

3.18. Earnings Per Share (EPS)

3.19. Inventories

Raw Materials (Crude)	On First In First Out (FIFO) basis.
Other Raw Materials	On Weighted Average Cost basis
Finished Goods	At Raw material and Conversion cost
Stock-in-Trade	On Weighted Average Cost basis
Stock-in-Process	At Raw Material and Proportionate Conversion Cost
Stores and Spares including packing materials materials	On Weighted Average Cost basis