Accounting Policies of Oil India Ltd. Company

Mar 31, 2025

1.3.0 Material accounting policies

1.3.1 Statement of compliance

The Financial Statements have been prepared in
accordance with the Indian Accounting Standards (Ind
AS) issued by the Ministry of Corporate Affairs notified
under the Companies (Indian Accounting Standards)
Rules, 2015 as amended, presentation requirements of
Division II of Schedule III to the Companies Act, 2013 and
Guidance Note on Accounting for Oil and Gas Producing
Activities (Ind AS) issued by the Institute of Chartered
Accountants of India.

1.3.2 Basis of preparation

The Financial Statements are prepared on going concern
basis under the historical cost convention using accrual
basis of accounting except for assets and liabilities which
have been measured at fair value such as certain financial
assets and financial liabilities. (refer notes 43 for financial
instruments measured at fair value).

Accounting policies have been consistently applied
except where a newly issued accounting standard is
initially adopted or a revision to an existing accounting
standard requires a change in the accounting policy
hitherto in use.

As the operating cycle cannot be identified in normal
course due to the special nature of industry, the same
has been assumed to have duration of 1 year. Accordingly,
all assets and liabilities have been classified as current
or non-current as per the Company''s operating cycle and
other criteria set out in Ind AS-1 "Presentation of Financial
Statements" and 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 crore, except otherwise stated.

1.4.0 Revenue recognition

1.4.1 Revenue from contracts with customers

The Company derives revenues primarily from sale
of products such as Crude Oil, Natural Gas, Liquefied
Petroleum Gas (LPG), Condensate, Renewable Energy
and sale of services such as Pipeline Transportation
Services.

Revenue from contracts with customers is recognized
at the point in time when the Company satisfies a
performance obligation by transferring control of a
promised product or service to a customer and is
measured at the amount of transaction price allocated
to that performance obligation. Discount, taxes & duties
(other than excise duty) are excluded from revenue.

As per the Production Sharing Contracts for extracting
the Oil and Gas Reserves with Government of India, out
of the earnings from the exploitation of reserves after
recovery of eligible cost, a part of the revenue is paid to
Government of India which is called Profit Petroleum. It
is reduced from the revenue from Sale of Products as
Government of India''s Share in Profit Petroleum.

The transfer of control on sale of Crude Oil, Natural Gas,
Liquefied Petroleum Gas (LPG), Renewable energy and
Condensate occurs either at the point of delivery or the
point of receipt, where usually the title is passed and/or
the customer takes physical possession, depending upon
the contractual conditions. Any retrospective revision in
prices is accounted for in the year of such revision.

Claims on Central Government / Petroleum Planning
& Analysis Cell (PPAC) towards gas pool revenue are
accrued based on quantity delivered to the customers
at discounted price, in respect of which revenue is
recognized when collectability of the receivable is
reasonably certain.

Revenue from sale of Renewable Energy Certificates
(REC) is recognized on sale of the certificates through
the Exchange. i.e., when the receivable is reasonably
certain.

Revenue in respect of contractual short- lifted quantity
of gas is recognized when the customer''s right to such
quantity is expired and there is reasonable certainty
regarding its ultimate collection.

Sale and transportation of crude oil and natural gas are
based on mutually agreed terms between the parties/
governed by the Government directives issued from
time to time. Subsequent changes in terms, if any, are
recognized in the period of change. Such retrospective
revision in prices is not determinable at the time of sale.

1.4.2 Contract liabilities

The Company recognises contract liability for
consideration received for short lifted quantity of gas
under take or pay arrangements for which the customer
has right to take related volume in future (i.e. unsatisfied
performance obligations) and for the penalties that may
be raised by the contracting party in case of a dispute and
reports these amounts as advances from customers or
as penalties that may be payable in future, in the balance
sheet. The un-accrued amounts are not recognised
as revenue till all related performance obligations are
fulfilled or the customer''s right to such quantities is
expired.

1.4.3 Other income

(i) Dividend income from investments is recognized
when the Company''s right to receive payment is
established.

(ii) Interest income is recognized on a time proportion
basis considering the amount outstanding and the
effective interest rate applicable which is the rate
that equalizes discounted estimated future cash
receipts through expected life of the financial
asset to that asset''s net carrying amount on initial
recognition. Interest on income tax refund is
accounted for upon finalisation of assessments.

(iii) Insurance claim other than that for transit loss of
stores items are accounted for on final acceptance
by the Insurance Company.

(iv) Revenue on account of subsidies/grants and
interest on delayed realization from customers
are recognized when there is certainty of ultimate
realization.

(v) Recovery of liquidated damages is recognized
in the Statement of Profit & Loss as income at
the time of occurrence except in case of Joint
Venture Contracts (JVC) which are governed by the
respective Production Sharing/Revenue Sharing
Contracts. In case of return/refund of the liquidated
damages, the same is accounted for as other
expenses. In case of any dispute over the liquidated
damages, provision is created in the accounts.

(vi) Income from Business development services
such as technical and administrative support,
maintenance of Right of Way, cathodic protection,
facilities extended to other organisations etc. are
recognised at a point in time when the Company
satisfies its performance obligation.

(vii) Income in respect of OFC fibre leasing is recognised
periodically over the contract term.

(viii) Other claims are recognized when there is a
reasonable certainty of recovery.

1.5.0 Leases

1.5.1 The Company as lessor

The Company has classified Numaligarh Siliguri Product
Pipeline as operating lease as per the provisions of Ind
AS 116.

Rental income from operating leases is recognized on
a straight-line basis over the term of the relevant lease.
Initial direct costs incurred in negotiating and arranging
an operating lease are added to the carrying amount of
the leased asset and recognized as expense on a straight¬
line basis over the lease term on the same basis as lease
income.

1.5.2 The Company as lessee

The Company has applied Ind AS 116 "Leases" to service
contracts of equipment, land, buildings, vehicles, etc.
to evaluate whether these contracts contain lease or
not. Based on evaluation of the terms and conditions
of the arrangements, the Company assesses such
arrangements to be leases.

The Company has exercised the option not to apply Ind
AS 116 to intangible assets.

1.5.2.1 Lease term

The Company determines the lease term as the non¬
cancellable period of a lease, together with both periods
covered by an option to extend the lease if the Company
is reasonably certain to exercise that option; and periods
covered by an option to terminate the lease if the Company
is reasonably certain not to exercise that option. In
assessing whether the Company is reasonably certain to
exercise an option to extend a lease, or not to exercise an
option to terminate a lease, it considers all relevant facts
and circumstances that create an economic incentive for
the Company to exercise the option to extend the lease,
or not to exercise the option to terminate the lease.

1.5.2.2 Right of use assets

The Company recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right of use assets
are recognized at cost, less any accumulated depreciation
and impairment losses (Ind AS 36), if any.

The cost of right of use assets includes 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, any initial direct costs incurred and
restoration obligations, if any.

1.5.2.3 Depreciation

The right-of-use assets are depreciated using the
straight-line method, beginning from the commencement
date over the lease term or useful life of right-of-use
assets whichever is earlier.

1.5.2.4 Lease liabilities

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
incremental borrowing rate as applicable.

1.5.2.5 Finance cost on lease liabilities

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 on "Borrowing costs".

1.5.2.6 Non lease component

The Company''s contracts involve a number of additional
services and components including personnel cost,
maintenance, drilling related activities, consumables and
other items. In most of such contracts, the additional
services/non-lease components constitute significant
portion of the overall contract value. Where the additional
services/non-lease components are not separately
priced, the Company allocates the consideration paid
based on the relative stand-alone prices of the lease
and non-lease components. Further, these non-lease
components are not included in the measurement of
lease liability.

1.5.2.7 Reassessment of lease liabilities

The Company remeasures the carrying amount of lease
liabilities if there is a change in the lease term or a change
in the lease payments.

1.5.2.8 Short term lease and low value assets leases

Leases for which lease term ends within 12 months
is classified as short-term leases. The Company has
elected short term leases and low value asset leases
for recognition exemption in terms of Ind AS 116. The
Company recognizes the lease rental payment associated
with short term lease and low-value asset leases as
expense in the Statement of Profit & Loss over the lease
term.

1.6.0 Foreign currency transactions and
translations

The Financial Statements are presented in Indian Rupees,
which is also the Company''s functional currency.

In preparing the Financial Statements of the Company,
transactions in currencies other than Indian Rupees
are recognized 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 retranslated at the closing rates prevailing
at that date. Non-monetary items carried at fair value
that are denominated in foreign currencies are translated
at the rate prevailing at the date when the fair value was
measured. Non-monetary items that are measured
in terms of historical cost in a foreign currency are
translated using the exchange rate as on the dates of the
initial transactions. Transaction gains and losses realized
upon settlement of foreign currency transactions are
included in determining net profit / loss for the period in
which the transaction is settled.

Exchange differences on monetary items are recognized
in the statement of profit and loss in the period in which
they arise except for:

a) Exchange differences on foreign currency
borrowings relating to acquisition or construction
of qualifying assets to the extent they are regarded
as an adjustment to interest cost ;

b) In accordance with para D13AA of Ind AS 101, First¬
time Adoption of Indian Accounting Standards,
the Company continues to exercise policy adopted
under previous IGAAP and accordingly exchange
differences arising on long-term foreign currency
monetary items recognised as at 31^st March,
2016 were accumulated in a "Foreign Currency
Monetary Item Translation Difference Account"
and amortized over the balance period of such
long term foreign currency monetary item by
recognition as income or expense.

1.7.0 Borrowing costs

Borrowing cost consists of interest and other cost
incurred in connection with borrowing of funds and
includes exchange difference arising from foreign
currency borrowings to the extent that they are regarded
as an adjustment to interest cost. Borrowing cost also
includes finance cost on decommissioning and lease
liability.

Borrowing costs directly attributable to the acquisition
or construction of qualifying assets are capitalized to

the cost of those assets, until such time the assets are
substantially ready for their intended use.

Capitalisation of borrowing costs is suspended when
active development activity on the qualifying assets is
interrupted other than on temporary basis and charged
to the statement of profit and loss.

All other borrowing costs are recognized in the statement
of profit and loss in the period in which they are incurred.

1.8.0 Government grants

Government grants are recognized when there is
reasonable assurance that the Company will comply with
the conditions attached to them and that the grants will
be received.

(i) Grant related to Income (Revenue Grants)

The Company recognizes revenue grants in the
statement of profit and loss as a deduction in the
reporting related expense.

(ii) Grant relating to Assets (Capital Grants)

Government grants with the primary condition
that the Company should purchase construct
or otherwise acquire non-current assets are
recognized as deferred income in the balance sheet
and transferred to the statement of profit and loss
in the ratio of depreciation / depletion calculated on
the related assets.

1.9.0 Employee benefits

1.9.1 Retirement benefit costs and termination
benefits

Payments to defined contribution plans (such as
superannuation benefit scheme fund) are charged to
the statement of profit and loss (other than expenses to
be capitalized), when employees have rendered service
entitling them to the contributions.

The cost of providing benefits under defined benefit plans
(such as provident fund, gratuity, leave encashment,
post-retirement medical benefits, defined benefit
pension, Social security schemes etc) are determined
separately for each plan using the projected unit credit
method, with actuarial valuations being carried out
half-yearly and annually. This attributes the increase in
present value of the defined benefit obligation resulting
from employee service in the current period to determine
current service cost. The current service cost as stated
above and past service costs, resulting from a plan
amendment are recognized in the statement of profit and
loss under ''employee benefits expense''.

Net interest which is recognized in the statement of profit
and loss under ''employee benefits expense'' represents
the net change in present value of plan obligations and
the value of plan assets resulting from the passage of
time, and is determined by applying the discount rate to
the present value of the benefit obligation and to the fair
value of plan assets at the beginning of the year, taking
into account expected changes in the obligation or plan
assets during the year.

Re-measurement of the defined benefit liability and
asset, comprising actuarial gains and losses, and the
return on plan assets (excluding amounts included in net
interest described above) other than capitalised portion
are recognized in other comprehensive income in the
period in which they occur and are not subsequently
reclassified to the statement of profit and loss.

The Company presents remeasurement of defined
benefit plans as a part of retained earnings (refer
statement of changes in equity).

Surplus or deficit recognized in the Financial Statements
for each defined benefit plan is the difference between
the present value of the defined benefit obligation
and the fair value of plan assets. The deficit for each
plan managed through separate Trust fund is to be
settled directly to such Trust fund. Defined benefit plan
surpluses are only recognized to the extent they are
recoverable, naturally by way of refund or reductions in
future contributions to the plans.

Payments made under Voluntary Retirement Scheme or
any other early separation scheme are charged to the
statement of profit and loss on incurrence.

1.9.2 Short-term and other long-term employee
benefits

A liability is recognized for benefits accruing to employees
in respect of wages and salaries (including performance
related pay), annual leave, sick leave etc in the period the
related service is rendered at the undiscounted amount
of the benefits expected to be paid in exchange for that
service.

Liabilities recognized in respect of short-term employee
benefits are measured at the undiscounted amount
of the benefits expected to be paid in exchange for the
related service.

Liabilities recognized in respect of other long-term
employee benefits are measured at the present value
of the estimated future cash outflows expected to be
made by the Company in respect of services provided by
employees up to the reporting date.

1.10.0 Taxation

1.10.1 Current Tax

Income tax assets and liabilities are measured at the
amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used
to compute the amount are those that are enacted or
substantively enacted, at the reporting date.

The Company evaluates positions taken in the tax
returns with respect to situations in which applicable
tax regulations are subject to interpretation at each
reporting date and considers whether it is probable that a
taxation authority will accept an uncertain tax treatment.

In respect of disputed cases, when an appeal is decided
by appellate authority, the corresponding appeal effect is
given in the accounts only after receipt of appellate order
from the concerned Department/ Authority, if not further
contested.

1.10.2 Deferred tax

(i) Deferred tax is recognized using liability method
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.

(ii) Deferred tax liabilities are generally recognized for
all taxable temporary differences.

(iii) Deferred tax assets are generally recognized for
all deductible temporary differences to the extent
that it is probable that taxable profits will be
available against which those deductible temporary
differences can be utilized.

(iv) 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 the benefits of all or part of the deferred tax
asset to be utilized. Any such reduction shall be
reversed to the extent when it becomes probable
that sufficient taxable profit will be available.

(v) In assessing the recoverability of deferred tax
assets, the Company relies on the same forecast,
assumptions used elsewhere in the Financial
Statements and in other management reports/
estimates.

(vi) Deferred tax liabilities and assets are measured at
the tax rates that are expected to apply in the period

in which the liability is to be settled or the asset
to be realized. The tax rates and tax laws used to
compute the amount are those that are enacted or
substantively enacted, at the reporting date in the
countries where the joint operations operates and
generates taxable income.

(vii) The Company offsets deferred tax assets and
deferred tax liabilities as it has a legally enforceable
right to set off current tax assets and current tax
liabilities and the deferred tax assets and deferred
tax liabilities relate to income taxes levied by the
same taxation authority.

1.11.0 Oil and gas exploration, evaluation and
development expenditure

The Company has applied "Ind AS 106" and the "Guidance
Note on Accounting for Oil and Gas Producing Activities
(for entities to whom Ind AS is applicable)'' issued by the
Institute of Chartered Accountants of India ("ICAI"), for
the accounting of Oil and Gas Assets and Exploration and
Evaluation assets. The Company considers Exploration
and Evaluation Assets as intangible assets.

1.11.1 Pre-Acquisition, Acquisition, Exploration and
Evaluation Costs

(i) Pre-Acquisition costs: Pre-Acquisition costs
includes expenses such as data collection and
analysis cost etc. which are incurred prior to
obtaining the rights to explore, develop and produce
Oil and Gas assets. These costs are charged to
the Statement of Profit and Loss in the year of
incurrence.

(ii) Acquisition costs:

a) Acquisition costs include cost of land acquired
for drilling operations, cost of temporary
occupation of the land, crop and surface
compensation paid to occupiers, registration
fee, legal cost, signature bonus, brokers'' fees,
consideration paid for farm-in arrangements
and other costs incurred for acquiring rights to
explore, drill and produce oil and gas.

b) These costs are initially recorded under
Exploration and Evaluation Assets except cost
of land acquired for drilling operations which
are disclosed as "Acquisition cost-land" under
capital work in progress.

c) On determination of proved developed
reserves, associated acquisition costs are
transferred to Property, Plant and Equipment
as "Oil & Gas Assets".

d) Acquisition cost relating to an exploratory
well that is determined to have no proved
reserves and its status is decided as dry or
of no further use for exploration purpose, is
charged to Statement of Profit and Loss. In
such cases, against the land value forming
part of acquisition cost, a nominal amount of
'' 100 per bigha is transferred to Freehold land
under Property, Plant and Equipment and the
remaining carrying value of land is charged off
to Statement of Profit and Loss.

e) Cost for retaining the mineral interest in
properties like lease carrying cost, license fees
and other cost are charged as expense when
incurred.

(iii) Exploration & Evaluation Cost (E&E cost):

a) Geological and geophysical costs, including
seismic surveys for exploration purposes are
charged off to Statement of Profit and Loss, as
and when incurred.

b) Costs including allocated depreciation on
support equipment and facilities involved
in drilling and equipping exploratory and
appraisal wells (such as rig, mud plant, well
logging equipment, cementing unit etc.)
allocated interest on support equipment
taken on lease and cost of exploratory-type
drilling stratigraphic test wells are initially
shown as Exploration and Evaluation Assets
(E&E Assets), till the time these are either
transferred to Property, Plant and Equipment
as "Oil & Gas Assets", on establishment of
proved developed reserves or are charged off
as expense in Statement of Profit and Loss,
when determined to be dry or of no further use.

c) E&E costs related to each exploratory well are
not carried over unless it could be reasonably
demonstrated that there are indications of
sufficient quantity of reserves and activities
are firmly planned in near future for further
assessing the reserves and economic and
operating viability of the project. Costs of

written off exploratory wells are not reinstated
in the books even if they start producing
subsequently.

d) Estimated decommissioning cost is included in
the carrying value of exploration and evaluation
asset.

(iv) Development Cost:

Costs incurred on development activities such as
drilling of development wells and service wells,
setting of production and processing of plant
and facilities including allocated depreciation on
support equipment and facilities (such as rig, mud
plant, well logging equipment, cementing unit etc.)
and allocated interest on support equipment taken
on lease are initially shown under Capital Work
in Progress as "Development Cost wells" and are
capitalized as "Oil & Gas Asset" under Property, Plant
and Equipment on completion of well. Cost of dry
development well, if any, is also capitalized as Oil
and Gas Asset under Property, Plant and Equipment
upon completion of the well.

(v) Production Cost:

Production Cost consists of direct and indirect costs
incurred to operate and maintain wells and related
equipment and facilities, including depreciation and
applicable operating cost of support equipment and
facilities. These costs are charged off to Statement
of Profit and Loss, as and when incurred.

(vi) Side-Tracking Expenditure:

In case of exploratory wells, the cost of abandoned
portion of side tracked well is charged off
to Statement of Profit and Loss. In case of
development wells, the entire cost of abandoned
portion and side- tracking is capitalized. In case of
existing producing wells, the cost of side - tracking
is capitalized if it increases the proved developed
reserves, otherwise it is charged off to Statement
of Profit and Loss.

1.12.0 Research & Development Expenditure

All revenue expenditure incurred for Research &
Development Projects/Schemes, net of grants-in-aid
(other than those related to asset) if any, are charged to
the Statement of Profit and Loss.

1.13.0 Property, Plant and Equipment (PPE)
including Capital Work in Progress
(CWIP) (PPE) including Capital Work in
Progress (CWIP)

i. Property, plant and equipment including Oil and
Gas assets are stated at cost, less accumulated
depreciation, depletion and impairment losses.
Such cost includes the cost of replacing part of
the plant and equipment, if the recognition criteria
are met, the present value of the initial estimate
of any decommissioning or site abandonment or
restoration obligation, wherever applicable and
eligible borrowing costs, wherever applicable. Refer
to significant accounting judgements, estimates and
assumptions (Note 1.2.1) and provisions (Note 1.15.2)
for further information relating to decommissioning
cost and its provision.

ii. Assets which are in the course of construction are
initially kept under capital work in progress and
capitalized when the assets are available for use in
the manner as intended by the management. Such
cost includes the costs incurred during construction
period and the present value of the initial estimate
of any abandonment, decommissioning or site
restoration obligation, wherever applicable.
Capital work in progress is stated at cost, net of
accumulated impairment loss, if any.

iii. Borrowing cost consisting of interest on term
loan and unwinding of interest on lease liability in
respect of leases entered for support equipment
are capitalised in CWIP or the relevant item of
PPE (as the case may be), provided the criteria for
recognition of borrowing cost as a component of
carrying value of item of PPE has been fulfilled.

iv. If any item held under CWIP is not as per the defined
requirement or specifications and has no further
use, a provision is recognized for the write off of
such item, until such item is actually written off.

v. Items such as spare parts, stand-by equipment
and servicing equipment which meet the definition
of Property, Plant and Equipment are capitalised.
Other spare parts are carried as inventory and
recognized in the Statement of Profit and Loss on
consumption.

vi. When significant parts of plant and equipment are
required to be replaced at intervals, the Company
depreciates them separately based on their specific

useful lives not exceeding the remaining useful life
of respective plant and equipment. Where an asset
or part of an asset that was separately depreciated
is replaced and it is probable that future economic
benefits associated with the item will flow to
the Company, the expenditure is capitalized and
the carrying amount of the replaced asset is
derecognized.

vii. Major shut-down and overhaul expenditure is
capitalized as the activities undertaken to improve
the future economic benefits expected to arise from
the asset. Inspection costs associated with major
maintenance programs from which future economic
benefits are expected to flow, are capitalized and
depreciated over the period to the next inspection.

viii. Technical know-how /license fee 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.

ix. Oil and Gas assets forming part of PPE in respect of
an area / field having proved developed oil and gas
reserves, when the well in the area / field is ready
to commence commercial production. Oil and Gas
assets which comprise of producing wells, related
acquisition cost and production facilities are
depleted using a unit-of-production method. The
capitalised cost of producing wells and production
facilities including estimated decommissioning
and abandonment cost (net of salvage value,
accumulated depreciation and impairment
charge) are depleted over proved developed
reserves. Acquisition cost is depleted over proved
reserves. Rate of depletion is determined based on
production from the Oil/Gas field or a group of Oil/
Gas fields identified to the related reserves having
homogeneous geological features. Estimation of oil
and natural gas reserves are done annually at the
year end and the impact of changes in the estimated
proved reserves are dealt with prospectively by
depleting the remaining carrying value of the asset.

x. Other property, plant and equipment excluding
''Land-freehold'' and ''Right of use (ROU) assets''
are depreciated based on useful life of the asset
under "Written down value method" as specified in
Schedule II to the Companies Act., 2013. Freehold
land are not depreciated.

xi. Low value items not exceeding '' 5,000 are fully
depreciated at the time of addition. Residual value

(net of estimated cost of disposal) of property plant
and equipment other than well asset is determined
considering past experience and technical
assessment (if applicable) and is upto 5% of the
original cost. The residual value of well assets are
determined based on technical assessment of
the net sale value of scrap that may be extracted
from the wells, depending upon the location and
condition of the wells. The typical useful life of other
major property, plant and equipment are as follows:

xii. Depreciation on subsequent expenditure on
PPE (other than of Oil and Gas Assets) arising on
account of capital improvement or other factors
is provided for prospectively over the remaining
useful life. Depreciation on furbished/revamped
PPE (other than of Oil and Gas Assets) which are
capitalized separately is provided for over the
reassessed useful life.

xiii. The expected useful life of property, plant and
equipment other than Oil and gas assets are
reviewed on an annual basis. The expected
useful life of Oil and Gas assets are reviewed
by estimating the reserves for the Oil and Gas
assets annually. Further, the residual value of
PPE is also reassessed annually. Impact arising
due to changes in useful life or the change in
residual value, are accounted for prospectively.
Company considers the impact of health, safety
and environmental legislation in its assessment
of expected useful lives and estimated residual
values.

xiv. Any tangible asset other than well assets retired
from active use and future economic benefits
are expected to arise on disposal of the asset is
carried as plant & equipment at lower of '' 1000
or 5% of the original cost and the balance written
down value, is charged off.

xv. An item of property, plant and equipment other
than well assets is derecognised upon disposal or
when no future economic benefits are expected
to arise from the continued use or disposal of the
asset. Any gain or loss arising on de-recognition
of the asset is included in the statement of
Profit & Loss in the period in which the item is
derecognized. Any gain or loss arising on actual
sale of the asset is included in the Statement of
Profit and Loss in the period in which the item is
actually sold as scrap.

xvi. Producing well assets are derecognized when the
designated oil/gas field or a group of oil/gas fields
ceases to produce.

xvii. Assets provided to employees as per the Company''s
internal schemes are also classified as property,
plant and equipment and are depreciated under
written down value method based on the useful
life as defined in the internal schemes of the
Company or useful life as specified in Schedule II
of the Companies Act, whichever is lower. Such
assets are derecognised on expiry of useful life as
defined in the internal scheme or buy-back of such
assets by the employees as per aforesaid internal
schemes.

The assets provided to employees having its useful
life different than as specified in schedule II of the
Act are as follows:

Further, soft furniture given to employees as
per the aforesaid internal scheme, are fully
depreciated in the year of purchase.

viii. Physical verification of the property, plant
and equipment (other than PPE items given to
employees as per the policy of the Company) is
carried out by the Company in a phased manner
to cover all the items over a period of three years.
The discrepancies noticed, if any, are accounted
for in the year in which such differences are
found and provision is created in respect of these
discrepancies, till the time the same is written
off.

1.13.1 Intangible assets

The Company follows cost model for recognition and
measurement of intangible assets. Intangible assets
are stated at the amount initially recognized less
accumulated amortization and accumulated impairment
losses, if any.

Cost of right of way of land with indefinite useful lives are
not amortized but tested for impairment annually at the
cash-generating unit level. The assessment of indefinite
life is reviewed annually to determine whether the
indefinite life continues or not. If not, the change in useful
life from indefinite to finite is made on a prospective
basis.

Cost of computer software is amortized on straight
line basis over the useful life upto 5 years from the
date of capitalization. The amortisation period and
the amortisation method for Computer Software are
reviewed annually. Computer Software are assessed
for impairment whenever there is an indication that the
intangible asset may be impaired.

Any intangible asset when determined obsolete and no
further use, is written off.

1.13.2 Impairment of property, plant & equipment
(PPE), E&E assets and other Intangible assets

At the end of each reporting period, the Company reviews
whether there is an indication that its Property, Plant and
Equipment, Capital Work in Progress, Exploration and
Evaluation Assets and Intangible Assets may be impaired.
E&E Assets are reviewed for indicators of impairment
as per Ind AS 106. If any indication exists, the Company
estimates the asset''s recoverable amount, which is the
higher of cash-generating unit''s (CGU) fair value less
costs of disposal and its value in use. The recoverable
amount is determined for CGU as a whole. For this
purpose, Producing fields, LPG plant, Transportation
Pipeline and Renewable Energy Units (other than captive
power plants) are considered as Cash Generating Units
(CGU).

Corporate assets and common service assets are also
allocated to individual cash- generating units on a
reasonable and consistent basis. When the carrying
amount of all assets under the CGU exceeds the
recoverable amount of CGU, the asset is impaired and is
written down to its recoverable amount, by charging the
impairment loss in the Statement of Profit and Loss.

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
CGU.

An assessment is made at each reporting date to
determine whether there is an indication that previously
recognised impairment losses no longer exist or have
decreased. If such indication exists, the Company
estimates the CGU''s recoverable amount. A previously
recognised impairment loss is reversed only if there has
been a favourable change in the assumptions used to
determine the asset''s recoverable amount since the last
impairment loss was recognised.

When an impairment loss is subsequently reversed, the
carrying amount of the asset or group of assets covered
under the CGU is increased to the revised estimate of
its recoverable amount, up to the carrying amount that
would have been determined had no impairment loss
been recognized for the asset or group of assets covered
under the CGU in prior years. A reversal of an impairment
loss is recognized in the Statement of Profit and Loss.

After a reversal, the depreciation 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.

1.14.0 Inventories

Inventory of Finished goods of Crude Oil, Liquefied
Petroleum Gas (LPG), and condensate are valued at
cost determined using absorption costing method or
net realizable value, whichever is lower. Cost of finished
goods is determined based on direct cost and directly
attributable services cost including depreciation and
depletion. The value of such inventories includes excise
duty, royalty and other levies, as applicable. Excise duty
on finished stocks lying at manufacturing locations is
provided for at the assessable value applicable at each
of the locations based on end use. Net realizable value
represents the estimated selling price of inventories less
all estimated costs necessary to effect the sale.

Crude oil in unfinished condition in the flow line up to
Group Gathering Station and Natural Gas in Pipeline are
not valued, as these pipeline fills are necessary for the
operation of the facility. Crude oil lying in flowlines from
Group Gathering Station (GGS) / Oil Collecting Station
(OCS) to tank farms are not valued, as these pipeline fills
will always remain and are necessary for the operation of
the facility. Crude oil in semi-finished condition in tanks in
GGS/OCS are measured and valued at cost on absorption
costing method or net realisable value, whichever is
lower.

Inventory of stores and spares (including inventory in
transit) and other raw materials are valued using weighted
average cost or net realizable value whichever is lower.

Obsolete / unserviceable items, as and when identified,
are written off. Any item of stores and spares including
those in storage locations which have not moved for last
four years as on date of Balance Sheet are identified as
slow-moving items for which a provision of 95% of the
book value is made.

Renewable Energy Certificates (REC) received by the
Company on the basis of generation of renewable energy
and certified by the competent authority, are held for
trading and are not valued.

Physical verification of inventory including store and
spare items (excluding materials in-transit) is carried
out by the Company in a phased manner to cover all the
items. Stores and Spares items of high and medium value
are physically verified every year whereas items carrying
low value are physically verified over a period of 3 years.
The discrepancies noticed, if any, are accounted for in
the year in which such differences are found.

---

Mar 31, 2024

NOTE-1

1.1.0 Corporate Information

The Financial Statements of "Oil India Limited" ("the Company " or " OIL" ) (CIN: L11101AS1959G0I001148) are for the year ended 31^st March, 2024.

The Company is a public limited Company incorporated in India having its registered office at Duliajan, District Dibrugarh, Assam, Pin-786602. The Company''s shares are listed and traded on BSE Limited and National Stock Exchange of India Limited.

The Company is engaged in exploration, development and production of crude oil, natural gas, LPG and condensate and providing services such as pipeline transportation and generation of renewable energy.

The Financial Statements are approved for issue by the Board of Directors of the Company in its meeting held on 20^th May, 2024.

1.1.1 New Standards/ amendments and other changes effective from April 1, 2023

The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules, 2023 dated 31^st March 2023, to amend the following Ind AS which are effective for annual periods beginning on or after 1^st April 2023. The Company applied for the firsttime these amendments.

Disclosure of Accounting Policies - Amendments to Ind AS 1

The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ''Significant'' Accounting Policies with a requirement to disclose their ''Material'' Accounting Policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

The amendments have an impact on the Company''s disclosures of accounting policies, but not on the measurement, recognition or presentation of any item in the Company''s Financial Statements.

Definition of Accounting Estimates - Amendments to Ind AS 8

The amendments clarify the distinction between changes in accounting estimates, changes in accounting policies and the correction of errors. It has also been clarified how entities use measurement techniques and inputs to develop accounting estimates. The amendments had no impact on the Company''s Financial Statements.

Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to Ind AS 12

The amendments narrow the scope of the initial recognition exception under Ind AS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases.

The Company has already recognised a separate deferred tax asset in relation to its lease liabilities and a deferred tax liability in relation to its right-of-use assets, accordingly there is no impact on its Financial Statements. Also, since balances qualify for offset as per the requirements of Paragraph 74 of Ind AS 12, there is no impact in the Balance Sheet. There was also no impact on the opening retained earnings as at 1^st April, 2022.

Apart from these, consequential amendments and editorials have been made to other Ind AS like Ind AS 34, Ind AS 101, Ind AS 102, Ind AS 103, Ind AS 107, Ind AS 109 and Ind AS 115. The Company has evaluated the requirements of the amendments and there is no impact on its Financial Statements.

1.1.2 Standards notified but not yet effective

There are no standards that are notified and not yet effective as on the date.

1.2.0 Use of estimates

In preparing the Standalone Financial Statements, in conformity with the accounting policies of the Company, management is required to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of the contingent liabilities as at the date of the financial statements,

the amounts of revenue and expenditures during the reported period and notes to the financial statements. Actual results could differ from those estimates, any revision to such estimates is recognized in such period in which the same is determined and if material, their effects are disclosed in the notes to the Standalone Financial Statements.

1.2.1 Major judgements, assumptions and

accounting estimates

a. Estimation of oil and gas reserves

The estimation of oil and gas reserves is key factor in the accounting for oil and gas producing activities. Oil and gas reserves are estimated by analysis of geosciences and engineering data using Deterministic Method. Production pattern analysis, number of additional wells to be completed, application of recovery techniques, validity of mining lease agreements, agreements/MOU for sales etc. influence the estimation of reserves. Unit-of-production method of depreciation, depletion and amortization charges are principally measured based on management''s estimates of proved and proved developed oil and gas reserves. Also, exploration drilling costs are categorized as Exploration and Evaluation Assets pending the results of further exploration or appraisal activity, which may take several years to complete and before any related proved reserves can be booked.

b. Impairment of assets

As part of the determination of the recoverable value of assets of cash generating units for impairment, the estimates, assumptions and judgments mainly concern oil and gas price scenarios, operating cost, production volumes and oil and gas proved & probable reserves. The discounting rate used for estimating the value in use is reviewed annually. Changes in assumptions could affect the carrying amounts of assets, and any impairment losses and reversals will affect the revenues.

c. Employee benefits

The benefit obligations and plan assets can be subject to significant volatility due to changes in market values and actuarial assumptions. These assumptions vary between different pension plans and thus take into account market conditions. They are determined following actuarial valuation method certified by external independent actuarial valuer. The assumptions for each plan are reviewed periodically and adjusted if necessary.

d. Asset retirement obligations

Asset retirement obligations, which result from a legal or constructive obligation, are recognized based on a reasonable estimate in the period in which the obligation arises. This estimate is based on information available in terms of costs and work program. It is regularly reviewed to take into account the changes in laws and regulations, the estimated useful life of fields based on proved and probable oil and gas reserves and current production off-take, the analysis of site conditions and technologies. Decommissioning Liability provision may differ due to changes in the aforesaid factors. The risk adjusted discount rate used for estimating the present value of obligation is reviewed annually.

e. Taxation

Tax liabilities are recognized when it is considered probable that there will be a future outflow of funds to a taxing authority. In such cases, provision is made for the amount that is expected to be settled, where this can be reasonably estimated. This requires the application of judgment as to the ultimate outcome, which can change over time depending on facts and circumstances. A change in estimate of the likelihood of a future outflow and/or in the expected amount to be settled would be recognized in income in the period in which the change occurs.

Deferred tax assets are recognized only to the extent it is considered probable that those assets will be recoverable. This involves an assessment of when those assets are likely to reverse, and a judgment as to whether or not there will be sufficient taxable profits available to offset the assets when they do reverse. This requires assumptions regarding future profitability and is therefore inherently uncertain. To the extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognized in respect of deferred tax assets as well as in the amounts recognized in income in the period in which the change occurs.

1.3.0 Material accounting policies

1.3.1 Statement of compliance

The Financial Statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) issued by the Ministry of Corporate Affairs notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended, presentation requirements of

Division II of Schedule III to the Companies Act, 2013 and Guidance Note on Accounting for Oil and Gas Producing Activities (Ind AS) issued by the Institute of Chartered Accountants of India.

1.3.2 Basis of preparation

The Financial Statements are prepared on going concern basis under the historical cost convention using accrual basis of accounting except for assets and liabilities which have been measured at fair value such as certain financial assets and financial liabilities. (refer notes 43 for financial instruments measured at fair value).

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

As the operating cycle cannot be identified in normal course due to the special nature of industry, the same has been assumed to have duration of 1 year. Accordingly, all assets and liabilities have been classified as current or non-current as per the Company''s operating cycle and other criteria set out in Ind AS-1 "Presentation of Financial Statements and 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 crore, except otherwise stated.

1.4.0 Revenue recognition

1.4.1 Revenue from contracts with customers

The Company derives revenues primarily from sale of products such as Crude Oil, Natural Gas, Liquefied Petroleum Gas (LPG), Condensate, Renewable Energy and sale of services such as Pipeline Transportation Services.

Revenue from contracts with customers is recognized at the point in time when the Company satisfies a performance obligation by transferring control of a promised product or service to a customer and is measured at the amount of transaction price allocated to that performance obligation. Discount, taxes & duties (other than excise duty) are excluded from revenue.

As per the Production Sharing Contracts for extracting the Oil and Gas Reserves with Government of India, out

of the earnings from the exploitation of reserves after recovery of eligible cost, a part of the revenue is paid to Government of India which is called Profit Petroleum. It is reduced from the revenue from Sale of Products as Government of India''s Share in Profit Petroleum.

The transfer of control on sale of Crude Oil, Natural Gas, Liquefied Petroleum Gas (LPG), Renewable energy and Condensate occurs either at the point of delivery or the point of receipt, where usually the title is passed and/ or the customer takes physical possession, depending upon the contractual conditions. Any retrospective revision in prices is accounted for in the year of such revision.

Claims on Central Government / Petroleum Planning & Analysis Cell (PPAC) towards gas pool revenue are accrued based on quantity delivered to the customers at discounted price, in respect of which revenue is recognized when collectability of the receivable is reasonably certain.

Revenue from sale of Renewable Energy Certificates (REC) is recognized on sale of the certificates through the Exchange. i.e., when the receivable is reasonably certain.

Revenue in respect of contractual short- lifted quantity of gas is recognized when the customer''s right to such quantity is expired and there is reasonable certainty regarding its ultimate collection.

Sale and transportation of crude oil and natural gas are based on mutually agreed terms between the parties/ governed by the Government directives issued from time to time. Subsequent changes in terms, if any, are recognized in the period of change. Such retrospective revision in prices is not determinable at the time of sale.

1.4.2 Contract liabilities

The Company recognises contract liability for consideration received for short lifted quantity of gas under take or pay arrangements for which the customer has right to take related volume in future (i.e. unsatisfied performance obligations) and for the penalties that may be raised by the contracting party in case of a dispute and reports these amounts as advances from customers or as penalties that may be payable in future. in the balance sheet. The un-accrued amounts are not recognised as revenue till all related performance obligations are fulfilled or the customer''s right to such quantities is expired.

1.4.3 Other income

(i) Dividend income from investments is recognized when the Company''s right to receive payment is established.

(ii) Interest income is recognized on a time proportion basis considering the amount outstanding and the effective interest rate applicable which is the rate that equalizes discounted estimated future cash receipts through expected life of the financial asset to that asset''s net carrying amount on initial recognition. Interest on income tax refund is accounted for upon finalisation of assessments.

(iii) Insurance claim other than that for transit loss of stores items are accounted for on final acceptance by the Insurance Company.

(iv) Revenue on account of subsidies/grants and interest on delayed realization from customers are recognized when there is certainty of ultimate realization.

(v) Recovery of liquidated damages is recognized in the Statement of Profit & Loss as income at the time of occurrence except in case of Joint Venture Contracts (JVC) which are governed by the respective Production Sharing/Revenue Sharing Contracts. In case of return/refund of the liquidated damages, the same is accounted for as other expenses. In case of any dispute over the liquidated damages, provision is created in the accounts.

(vi) Income from Business development services such as technical and administrative support, maintenance of Right of Way, cathodic protection, facilities extended to other organisations etc. are recognised at a point in time when the Company satisfies its performance obligation.

(vii) Income in respect of OFC fibre leasing is recognised periodically over the contract term.

(viii) Other claims are recognized when there is a reasonable certainty of recovery.

1.5.0 Leases

1.5.1 The Company as lessor

The Company has classified Numaligarh Siliguri Product

Pipeline as operating lease as per the provisions of

Ind AS 116.

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized as expense on a straight-line basis over the lease term on the same basis as lease income.

1.5.2 The Company as lessee

The Company has applied Ind AS 116 "Leases" to service contracts of equipment, land, buildings, vehicles, etc. to evaluate whether these contracts contain lease or not. Based on evaluation of the terms and conditions of the arrangements, the Company assesses such arrangements to be leases.

The Company has exercised the option not to apply Ind AS 116 to intangible assets.

1.5.2.1 Lease term

The Company determines the lease term as the noncancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease.

1.5.2.2 Right of use assets:

The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right of use assets are recognized at cost, less any accumulated depreciation and impairment losses (Ind AS 36), if any.

The cost of right of use assets includes 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, any initial direct costs incurred and restoration obligations, if any.

1.5.2.3 Depreciation:

The right-of-use assets are depreciated using the straight-line method, beginning from the commencement date over the lease term or useful life of right-of-use assets whichever is earlier.

1.5.2.4 Lease liabilities:

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 incremental borrowing rate as applicable.

1.5.2.5 Finance cost on lease liabilities:

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 on "Borrowing costs".

1.5.2.6 Non lease component:

The Company''s contracts involve a number of additional services and components including personnel cost, maintenance, drilling related activities, consumables and other items. In most of such contracts, the additional services/non-lease components constitute significant portion of the overall contract value. Where the additional services/non-lease components are not separately priced, the Company allocates the consideration paid based on the relative stand-alone prices of the lease and non-lease components. Further, these non-lease components are not included in the measurement of lease liability.

1.5.2.7 Reassessment of lease liabilities:

The Company remeasures the carrying amount of lease liabilities if there is a change in the lease term or a change in the lease payments.

1.5.2.8 Short term lease and low value assets leases:

Leases for which lease term ends within 12 months is classified as short-term leases. The Company has elected short term leases and low value asset leases for recognition exemption in terms of Ind AS 116. The Company recognizes the lease rental payment associated with short term lease and low-value asset leases as expense in the Statement of Profit & Loss over the lease term.

1.6.0 Foreign currency transactions and translations

The Financial Statements are presented in Indian Rupees, which is also the Company''s functional currency.

In preparing the Financial Statements of the Company, transactions in currencies other than Indian Rupees

are recognized 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 retranslated at the closing rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rate prevailing at the date when the fair value was measured. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as on the dates of the initial transactions. Transaction gains and losses realized upon settlement of foreign currency transactions are included in determining net profit / loss for the period in which the transaction is settled.

Exchange differences on monetary items are recognized in the statement of profit and loss in the period in which they arise except for:

a) Exchange differences on foreign currency borrowings relating to acquisition or construction of qualifying assets to the extent they are regarded as an adjustment to interest cost ;

b) In accordance with para D13AA of Ind AS 101, Firsttime Adoption of Indian Accounting Standards, the Company continues to exercise policy adopted under previous IGAAP and accordingly exchange differences arising on long-term foreign currency monetary items recognised as at 31^st March, 2016 were accumulated in a "Foreign Currency Monetary Item Translation Difference Account" and amortized over the balance period of such long term foreign currency monetary item by recognition as income or expense.

1.7.0 Borrowing costs

Borrowing cost consists of interest and other cost incurred in connection with borrowing of funds and includes exchange difference arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest cost. Borrowing cost also includes finance cost on decommissioning and lease liability.

Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalized to the cost of those assets, until such time the assets are substantially ready for their intended use.

Capitalisation of borrowing costs is suspended when active development activity on the qualifying assets is

interrupted other than on temporary basis and charged to the statement of profit and loss.

All other borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.

1.8.0 Government grants

Government grants are recognized when there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants will be received.

(i) Grant related to Income (Revenue Grants)

The Company recognizes revenue grants in the statement of profit and loss as a deduction in the reporting related expense.

(ii) Grant relating to Assets (Capital Grants)

Government grants with the primary condition that the Company should purchase construct or otherwise acquire non-current assets are recognized as deferred income in the balance sheet and transferred to the statement of profit and loss in the ratio of depreciation / depletion calculated on the related assets.

1.9.0 Employee benefits

1.9.1 Retirement benefit costs and termination benefits:

Payments to defined contribution plans (such as provident fund and superannuation benefit scheme fund) are charged to the statement of profit and loss (other than expenses to be capitalized), when employees have rendered service entitling them to the contributions.

The cost of providing benefits under defined benefit plans (such as gratuity, leave encashment, postretirement medical benefits, defined benefit pension, Social security schemes etc) are determined separately for each plan using the projected unit credit method, with actuarial valuations being carried out half-yearly and annually. This attributes the increase in present value of the defined benefit obligation resulting from employee service in the current period to determine current service cost. The current service cost as stated above and past service costs, resulting from a plan amendment are recognized in the statement of profit and loss under ''employee benefits expense''.

Net interest which is recognized in the statement of profit and loss under ''employee benefits expense'' represents the net change in present value of plan obligations and the value of plan assets resulting from the passage of time, and is determined by applying the discount rate to the present value of the benefit obligation and to the fair value of plan assets at the beginning of the year, taking into account expected changes in the obligation or plan assets during the year.

Re-measurement of the defined benefit liability and asset, comprising actuarial gains and losses, and the return on plan assets (excluding amounts included in net interest described above) other than capitalised portion are recognized in other comprehensive income in the period in which they occur and are not subsequently reclassified to the statement of profit and loss.

The Company presents remeasurement of defined benefit plans as a part of retained earnings (refer statement of changes in equity).

Surplus or deficit recognized in the Financial Statements for each defined benefit plan is the difference between the present value of the defined benefit obligation and the fair value of plan assets. The deficit for each plan managed through separate Trust fund is to be settled directly to such Trust fund. Defined benefit plan surpluses are only recognized to the extent they are recoverable, naturally by way of refund or reductions in future contributions to the plans.

Payments made under Voluntary Retirement Scheme or any other early separation scheme are charged to the statement of profit and loss on incurrence.

1.9.2 Short-term and other long-term employee benefits

A liability is recognized for benefits accruing to employees in respect of wages and salaries (including performance related pay), annual leave, sick leave etc in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognized in respect of other long-term employee benefits are measured at the present value

(v) In assessing the recoverability of deferred tax assets, the Company relies on the same forecast, assumptions used elsewhere in the Financial Statements and in other management reports/ estimates.

(vi) Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is to be settled or the asset to be realized. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the joint operations operates and generates taxable income.

(vii) The Company offsets deferred tax assets and deferred tax liabilities as it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority.

1.11.0 Oil and gas exploration, evaluation and development expenditure

The Company has applied "Ind AS 106" and the "Guidance Note on Accounting for Oil and Gas Producing Activities (for entities to whom Ind AS is applicable)" issued by the Institute of Chartered Accountants of India ("ICAI"), for the accounting of Oil and Gas Assets and Exploration and Evaluation assets. The Company considers Exploration and Evaluation Assets as intangible assets.

1.11.1 Pre-Acquisition, Acquisition, Exploration and Evaluation Costs

(i) Pre-Acquisition costs: Pre-Acquisition costs includes expenses such as data collection and analysis cost etc. which are incurred prior to obtaining the rights to explore, develop and produce Oil and Gas assets. These costs are charged to the Statement of Profit and Loss in the year of incurrence.

(ii) Acquisition costs:

a) Acquisition costs include cost of land acquired for drilling operations, cost of temporary occupation of the land, crop and surface compensation paid to occupiers, registration fee, legal cost, signature bonus, brokers'' fees, consideration paid for farm-in

of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

1.10.0 Taxation

1.10.1 Current Tax

Income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

The Company evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation at each reporting date and considers whether it is probable that a taxation authority will accept an uncertain tax treatment.

In respect of disputed cases, when an appeal is decided by appellate authority, the corresponding appeal effect is given in the accounts only after receipt of appellate order from the concerned Department/ Authority, if not further contested.

1.10.2 Deferred tax

(i) Deferred tax is recognized using liability method 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.

(ii) Deferred tax liabilities are generally recognized for all taxable temporary differences.

(iii) Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

(iv) 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 the benefits of all or part of the deferred tax asset to be utilized. Any such reduction shall be reversed to the extent when it becomes probable that sufficient taxable profit will be available.

arrangements and other costs incurred for acquiring rights to explore, drill and produce oil and gas.

b) These costs are initially recorded under Exploration and Evaluation Assets except cost of land acquired for drilling operations which are disclosed as "Acquisition cost-land" under capital work in progress.

c) On determination of proved developed reserves, associated acquisition costs are transferred to Property, Plant and Equipment as "Oil & Gas Assets".

d) Acquisition cost relating to an exploratory well that is determined to have no proved reserves and its status is decided as dry or of no further use for exploration purpose, is charged to Statement of Profit and Loss. In such cases, against the land value forming part of acquisition cost, a nominal amount of '' 100 per bigha is transferred to Freehold land under Property, Plant and Equipment and the remaining carrying value of land is charged off to Statement of Profit and Loss.

e) Cost for retaining the mineral interest in properties like lease carrying cost, license fees and other cost are charged as expense when incurred.

(iii) Exploration & Evaluation Cost (E&E cost):

a) Geological and geophysical costs, including seismic surveys for exploration purposes are charged off to Statement of Profit and Loss, as and when incurred.

b) Costs including allocated depreciation on support equipment and facilities involved in drilling and equipping exploratory and appraisal wells (such as rig, mud plant, well logging equipment, cementing unit etc.) allocated interest on support equipment taken on lease and cost of exploratory-type drilling stratigraphic test wells are initially shown as Exploration and Evaluation Assets (E&E Assets), till the time these are either transferred to Property, Plant and Equipment as "Oil & Gas Assets", on establishment of proved developed reserves or are charged off as expense in Statement of

Profit and Loss, when determined to be dry or of no further use.

c) E&E costs related to each exploratory well are not carried over unless it could be reasonably demonstrated that there are indications of sufficient quantity of reserves and activities are firmly planned in near future for further assessing the reserves and economic and operating viability of the project. Costs of written off exploratory wells are not reinstated in the books even if they start producing subsequently.

d) Estimated decommissioning cost is included in the carrying value of exploration and evaluation asset.

(iv) Development Cost

Costs incurred on development activities such as drilling of development wells and service wells, setting of production and processing of plant and facilities including allocated depreciation on support equipment and facilities (such as rig, mud plant, well logging equipment, cementing unit etc.) and allocated interest on support equipment taken on lease are initially shown under Capital Work in Progress as "Development Cost wells" and are capitalized as "Oil & Gas Asset" under Property, Plant and Equipment on completion of well. Cost of dry development well, if any, is also capitalized as Oil and Gas Asset under Property, Plant and Equipment upon completion of the well.

(v) Production Cost

Production Cost consists of direct and indirect costs incurred to operate and maintain wells and related equipment and facilities, including depreciation and applicable operating cost of support equipment and facilities. These costs are charged off to Statement of Profit and Loss, as and when incurred.

(vi) Side-Tracking Expenditure:

In case of exploratory wells, the cost of abandoned portion of side tracked well is charged off to Statement of Profit and Loss. In case of development wells, the entire cost of abandoned portion and side- tracking is capitalized. In case of existing producing wells, the cost of side - tracking is capitalized if it increases the proved developed reserves, otherwise it is charged off to Statement of Profit and Loss.

1.12.0 Research & Development Expenditure

All revenue expenditure incurred for Research & Development Projects/Schemes, net of grants-in-aid (other than those related to asset) if any, are charged to the Statement of Profit and Loss.

1.13.0 Property, Plant and Equipment (PPE) including Capital Work in Progress (CWIP) (PPE) including Capital Work in Progress (CWIP)

i. Property, plant and equipment including Oil and Gas assets are stated at cost, less accumulated depreciation, depletion and impairment losses. Such cost includes the cost of replacing part of the plant and equipment, if the recognition criteria are met, the present value of the initial estimate of any decommissioning or site abandonment or restoration obligation, wherever applicable and eligible borrowing costs, wherever applicable. Refer to significant accounting judgements, estimates and assumptions (Note 1.2.1) and provisions (Note 1.15.2) for further information relating to decommissioning cost and its provision.

ii. Assets which are in the course of construction are initially kept under capital work in progress and capitalized when the assets are available for use in the manner as intended by the management. Such cost includes the costs incurred during construction period and the present value of the initial estimate of any abandonment, decommissioning or site restoration obligation, wherever applicable. Capital work in progress is stated at cost, net of accumulated impairment loss, if any.

iii. Borrowing cost consisting of interest on term loan and unwinding of interest on lease liability in respect of leases entered for support equipment are capitalised in CWIP or the relevant item of PPE (as the case may be), provided the criteria for recognition of borrowing cost as a component of carrying value of item of PPE has been fulfilled.

iv. If any item held under CWIP is not as per the defined requirement or specifications and has no further use, a provision is recognized for the write off of such item, until such item is actually written off.

v. Items such as spare parts, stand-by equipment and servicing equipment which meet the definition of Property, Plant and Equipment are capitalised. Other spare parts are carried as inventory and recognized in the Statement of Profit and Loss on consumption.

vi. When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives not exceeding the remaining useful life of respective plant and equipment. Where an asset or part of an asset that was separately depreciated is replaced and it is probable that future economic benefits associated with the item will flow to the Company, the expenditure is capitalized and the carrying amount of the replaced asset is derecognized.

vii. Major shut-down and overhaul expenditure is capitalized as the activities undertaken to improve the future economic benefits expected to arise from the asset. Inspection costs associated with major maintenance programs from which future economic benefits are expected to flow, are capitalized and depreciated over the period to the next inspection.

viii. Technical know-how /license fee 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.

ix. Oil and Gas assets forming part of PPE in respect of an area / field having proved developed oil and gas reserves, when the well in the area / field is ready to commence commercial production. Oil and Gas assets which comprise of producing wells, related acquisition cost and production facilities are depleted using a unit-of-production method. The capitalised cost of producing wells and production facilities including estimated decommissioning and abandonment cost (net of salvage value, accumulated depreciation and impairment charge) are depleted over proved developed reserves. Acquisition cost is depleted over proved reserves. Rate of depletion is determined based on production from the Oil/ Gas field or a group of Oil/Gas fields identified to the related reserves having homogeneous geological features. Estimation of oil and natural

gas reserves are done annually at the year end and the impact of changes in the estimated proved reserves are dealt with prospectively by depleting the remaining carrying value of the asset.

x. Other property, plant and equipment excluding ''Land-freehold'' and ''Right of use (ROU) assets'' are depreciated based on useful life of the asset under "Written down value method" as specified in Schedule II to the Companies Act., 2013. Freehold land are not depreciated.

xi. Low value items not exceeding '' 5,000 are fully depreciated at the time of addition. Residual value (net of estimated cost of disposal) of property plant and equipment other than well asset is determined considering past experience and technical assessment (if applicable) and is upto 5% of the original cost. The residual value of well assets are determined based on technical assessment of the net sale value of scrap that may be extracted from the wells, depending upon the location and condition of the wells. The typical useful life of other major property, plant and equipment are as follows:

Name of PPE	Useful Life
Buildings	3 to 60 years
Road & Bridges	3 to 30 years
Plant & Machinery	5 to 30 years
Furniture and fixtures	8 to 10 years
Office Equipment	3 to 6 years
Vehicles	8 to 10 years
Railway sliding''s & Rolling Stock	15 years

xii. Depreciation on subsequent expenditure on PPE (other than of Oil and Gas Assets) arising on account of capital improvement or other factors is provided for prospectively over the remaining useful life. Depreciation on furbished/revamped PPE (other than of Oil and Gas Assets) which are capitalized separately is provided for over the reassessed useful life.

xiii. The expected useful life of property, plant and equipment other than Oil and gas assets are reviewed on an annual basis. The expected useful life of Oil and Gas assets are reviewed

by estimating the reserves for the Oil and Gas assets annually. Further, the residual value of PPE is also reassessed annually. Impact arising due to changes in useful life or the change in residual value, are accounted for prospectively. Company considers the impact of health, safety and environmental legislation in its assessment of expected useful lives and estimated residual values.

xiv. Any tangible asset other than well assets retired from active use and future economic benefits are expected to arise on disposal of the asset is carried as plant & equipment at lower of '' 1000 or 5% of the original cost and the balance written down value, is charged off.

xv. An item of property, plant and equipment other than well assets is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use or disposal of the asset. Any gain or loss arising on de-recognition of the asset is included in the statement of Profit & Loss in the period in which the item is derecognized. Any gain or loss arising on actual sale of the asset is included in the Statement of Profit and Loss in the period in which the item is actually sold as scrap.

xvi. Producing well assets are derecognized when the designated oil/gas field or a group of oil/gas fields ceases to produce.

xvii. Assets provided to employees as per the Company''s internal schemes are also classified as property, plant and equipment and are depreciated under written down value method based on the useful life as defined in the internal schemes of the Company or useful life as specified in Schedule II of the Companies Act, whichever is lower. Such assets are derecognised on expiry of useful life as defined in the internal scheme or buy-back of such assets by the employees as per aforesaid internal schemes.

The assets provided to employees having its useful life different than as specified in schedule II of the Act are as follows:

Name of PPE	Useful Life
Mobile Phone	2 to 3 years
Furniture and household goods	5 to 6 years

Further, soft furniture given to employees as per the aforesaid internal scheme, are fully depreciated in the year of purchase.

xviii. Physical verification of the property, plant and equipment (other than PPE items given to employees as per the policy of the Company) is carried out by the Company in a phased manner to cover all the items over a period of three years. The discrepancies noticed, if any, are accounted for in the year in which such differences are found and provision is created in respect of these discrepancies, till the time the same is written off.

1.13.1 Intangible assets

The Company follows cost model for recognition and measurement of intangible assets. Intangible assets are stated at the amount initially recognized less accumulated amortization and accumulated impairment losses, if any.

Cost of right of way of land with indefinite useful lives are not amortized but tested for impairment annually at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues or not. If not, the change is useful life from indefinite to finite is made on a prospective basis.

Cost of computer software is amortized on straight line basis over the useful life upto 5 years from the date of capitalization. The amortisation period and the amortisation method for Computer Software are reviewed annually. Computer Software are assessed for impairment whenever there is an indication that the intangible asset may be impaired.

Any intangible asset when determined obsolete and no further use, is written off.

1.13.2 Impairment of property, plant & equipment (PPE), E&E assets and other Intangible assets

At the end of each reporting period, the Company reviews whether there is an indication that its Property, Plant and Equipment, Capital Work in Progress,

Exploration and Evaluation Assets and Intangible Assets may be impaired. E&E Assets are reviewed for indicators of impairment as per Ind AS 106. If any indication exists, the Company estimates the asset''s recoverable amount, which is the higher of cash-generating unit''s (CGU) fair value less costs of disposal and its value in use. The recoverable amount is determined for CGU as a whole. For this purpose, Producing fields, LPG plant, Transportation Pipeline and Renewable Energy Units (other than captive power plants) are considered as Cash Generating Units (CGU).

Corporate assets and common service assets are also allocated to individual cash- generating units on a reasonable and consistent basis. When the carrying amount of all assets under the CGU exceeds the recoverable amount of CGU, the asset is impaired and is written down to its recoverable amount, by charging the impairment loss in the Statement of Profit and Loss.

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 CGU.

An assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Company estimates the CGU''s recoverable amount. A previously recognised impairment loss is reversed only if there has been a favourable change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognised.

When an impairment loss is subsequently reversed, the carrying amount of the asset or group of assets covered under the CGU is increased to the revised estimate of its recoverable amount, up to the carrying amount that would have been determined had no impairment loss been recognized for the asset or group of assets covered under the CGU in prior years. A reversal of an impairment loss is recognized in the Statement of Profit and Loss.

After a reversal, the depreciation 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.

1.14.0 Inventories

Inventory of Finished goods of Crude Oil, Liquefied Petroleum Gas (LPG), and condensate are valued at cost determined using absorption costing method or net realizable value, whichever is lower. Cost of finished goods is determined based on direct cost and directly attributable services cost including depreciation and depletion. The value of such inventories includes excise duty, royalty and other levies, as applicable. Excise duty on finished stocks lying at manufacturing locations is provided for at the assessable value applicable at each of the locations based on end use. Net realizable value represents the estimated selling price of inventories less all estimated costs necessary to effect the sale.

Crude oil in unfinished condition in the flow line up to Group Gathering Station and Natural Gas in Pipeline are not valued, as these pipeline fills are necessary for the operation of the facility. Crude oil lying in flowlines from Group Gathering Station (GGS) / Oil Collecting Station (OCS) to tank farms are not valued, as these pipeline fills will always remain and are necessary for the operation of the facility. Crude oil in semi-finished condition in tanks in GGS/OCS are measured and valued at cost on absorption costing method or net realisable value, whichever is lower.

Inventory of stores and spares (including inventory in transit) and other raw materials are valued using weighted average cost or net realizable value whichever is lower.

Obsolete / unserviceable items, as and when identified, are written off. Any item of stores and spares including those in storage locations which have not moved for last four years as on date of Balance Sheet are identified as slow-moving items for which a provision of 95% of the book value is made.

Renewable Energy Certificates (REC) received by the Company on the basis of generation of renewable energy and certified by the competent authority, are held for trading and are not valued.

Physical verification of inventory including store and spare items (excluding materials in-transit) is carried out by the Company in a phased manner to cover all the items. Stores and Spares items of high and medium value are physically verified every year whereas items carrying low value are physically verified over a period of 3 years. The discrepancies noticed, if any, are accounted for in the year in which such differences are found.

1.15.0 Provisions including Decommissioning and restoration obligations

1.15.1 Provisions

Provisions are recognized when the Company has a present obligation as a result of a past event and it is probable that the Company will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognized 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 all the relevant facts, the risks and uncertainties surrounding the obligation. Provision is measured using the present value of cash flows estimated to settle the present obligation as on the reporting date.

Provisions towards cost of unfinished minimum work program (MWP) committed by the Company for all joint venture blocks are made when there is a present obligation on the basis of available facts as at the end of the reporting period.

1.15.2 Decommissioning and restoration obligations

Liabilities towards costs relating to assets retirement obligations are recognized when the Company has an obligation to plug and abandon a well, dismantle and remove a facility or an item of plant and to restore the site on which it is located, and when a reliable estimate of that liability can be made. Liabilities towards costs relating to dismantling, abandoning and restoring well sites, associated production facilities and plants are recognized at the commencement of drilling a well or when facilities and plants are installed, as the case may be. The amount recognized is the present value of the estimated future expenditure determined considering the depth and the type of wells (testing well, exploratory well, developed well etc.), facilities and plants installed in accordance with local conditions and requirements at current prices and escalated using appropriate inflation rate till the expected date of decommissioning and discounted using appropriate risk-free discount rate.

An amount equivalent to the decommissioning liability provision is recognized as part of the corresponding PPE, CWIP or Exploration & Evaluation Asset (E&E) as the case may be. The decommissioning cost in respect

of dry exploratory well is expensed off in the Statement of Profit and Loss as exploratory well cost.

Provision for decommissioning cost in respect of assets under joint operations is considered as per participating interest of the Company on the basis of estimates prepared by the operator.

Liability for decommissioning cost is updated annually at current cost based on latest available technical assessment. The unwinding of the discount is included as a finance cost. Any change in the present value of the estimated decommissioning provision other than unwinding of discount is adjusted to decommissioning provision and added to or deducted from the cost of the asset in the current period and is considered for depreciation (depletion) prospectively. In case, where the reversal of decommissioning provision exceeds the corresponding carrying value of the related assets, the excess amount is recognized in the Statement of Profit and Loss.

The Company considers the impact of health, safety and environmental legislation in estimating the decommissioning liability.

The actual cost incurred on settlement of the obligation is adjusted against the liability and the ultimate gain or loss is recognized in the Statement of Profit and Loss, when the designated oil / gas field or a group of oil/gas fields cease to produce.

1.16.0 Investments in subsidiaries, associates and joint ventures

The Company measures its investments in subsidiaries, associates and joint ventures at cost and the same are tested for impairment in case of any indication of impairment.

1.17.0 Financial instruments

1.17.1 Financial assets

1.17.1.1 Initial Recognition and Measurement

All regular purchases or sales of financial assets that require delivery of assets within a timeframe established by regulation or convention in the marketplace are recognized on a trade date basis which is the date on which the Company commits to purchase or sell the asset or investment date as the case may be.

The Company measures a financial asset at its fair value plus, in the case of a financial asset not subsequently measured at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset except for trade receivables which are initially measured at transaction price. Transaction costs of financial assets carried at fair value through profit or loss are expensed off in the Statement of Profit and Loss.

1.17.1.2 Classification of financial assets

The Company determines the classification of its financial assets based on its business model for managing the financial assets and the contractual terms of the cash flows. The Company''s financial assets are classified into the following categories:-

a. those to be measured at fair value (either through other comprehensive income or through profit or loss). These includes equity securities at fair value through other comprehensive income (FVTOCI) and investment in mutual fund and leave encashment fund at fair value through profit or loss (FVTPL).

b. those to be measured at amortized cost. These comprise debt securities at amortized cost, trade receivables, loan receivables, cash and bank balances, other financial assets and receivables.

On initial recognition, the Company has made an irrevocable election to present the subsequent changes in fair value through other comprehensive income for equity instruments (other than in subsidiaries, joint ventures and associates) that are not held for trading.

1.17.1.3 Subsequent Measurement

A gain or loss in debt securities that is subsequently measured at amortized cost is recognized as a component of other income/expense when the asset is derecognized or impaired. Interest income from these financial assets is included in other income using the effective interest method.

Gain and losses on financial assets measured at fair value are recorded either through profit or loss or other comprehensive income. Upon derecognition, the cumulative fair value changes recognised in OCI is not reclassified from the equity to profit or loss.

1.17.1.4 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand, including offsetting bank overdrafts, and short-term highly liquid investments that are readily convertible to known amounts of cash, have a maturity of three months or less from the acquisition date.

1.17.1.5 Trade receivables

Trade receivables

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Mar 31, 2023

1.1.0 Company Overview

The Financial Statements of "Oil India Limited" ("the Company" or "OIL") are for the year ended 31^st March, 2023.

The Company is engaged in exploration, development and production of crude oil & natural gas, production of LPG, transportation of crude oil & natural gas and generation of renewable energy. The Company is a public limited Company incorporated in India having its registered office at Duliajan, District Dibrugarh, Assam, Pin-786602. The Company''s shares are listed and traded in BSE Limited and National Stock Exchange of India Limited.

1.1.1 New Standards/ amendments and other changes effective from April 1, 2022

Amendments and other changes issued under section 133 of the Companies Act notified by Ministry of Corporate Affairs (MCA) under the Companies (Indian Accounting Standards) Rules, 2015 are appropriately applied in preparation of the Financial Statements.

1.1.2 New Standards/ amendments and other changes effective April 1,2023

Ministry of Corporate Affairs notifies new standard or amendments to the existing standards. During the year, vide Notification G.S.R. 242 (E) dated 31^st March 2023, minor modifications in existing standards has been notified which will be applicable from April 1, 2023. The effect of those amendments is not material.

1.2.0 Significant accounting policies

1.2.1 Statement of compliance

The financial statements have been prepared in accordance with the provisions of Companies Act, 2013 and in compliance with the Indian Accounting Standards (Ind AS) issued by the Ministry of Corporate Affairs notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended. The Ind ASs prescribed under section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 as amended from time to time.

1.2.2 Basis of preparation

The financial statements are prepared under the historical cost convention on the accrual basis except for certain financial assets and financial liabilities which are measured at fair values as per the respective para

included hereinafter.

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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date on such basis as provided under Ind AS 113.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

As the operating cycle cannot be identified in normal course due to the special nature of industry, the same has been assumed to have duration of 12 months. Accordingly, all assets and liabilities have been classified as current or non- current as per the Company''s operating cycle and other criteria set out in Ind AS 1 "Presentation of Financial Statements" and 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 crore except otherwise stated.

1.2.3 Use of estimates

In preparing the Standalone Financial Statements, in conformity with the accounting policies of the Company, management is required to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of the contingent liabilities as at the date of the financial statements, the amount of revenues and expenditures during the reported period and notes to the financial statements. Actual results could differ from those estimates, any revision to such estimates is recognized in such period in which the same is determined and if material, their effects are disclosed in the notes to the financial statements.

1.2.4 Major judgments, assumptions and accounting estimates

a. Estimation of oil and gas reserves

The estimation of oil and gas reserves is key factor in the accounting for oil and gas producing activities. Oil and gas reserves are estimated by analysis of geosciences

and engineering data using Deterministic Method. Production pattern analysis, number of additional wells to be completed, application of recovery techniques, validity of mining lease agreements, agreements/MOU for sales etc. influence the estimation of reserves. Unit-of-production depreciation, depletion and amortization charges are principally measured based on management''s estimates of proved developed oil and gas reserves. Also, exploration drilling costs are categorized as Exploration and Evaluation Assets pending the results of further exploration or appraisal activity, which may take several years to complete and before any related proved reserves can be booked.

b. Impairment of assets

As part of the determination of the recoverable value of assets of cash generating units for impairment, the estimates, assumptions and judgments mainly concern oil and gas prices scenarios, operating costs, production volumes and oil and gas proved & probable reserves. The discount rate used for estimating the value in use is reviewed annually. Changes in assumptions could affect the carrying amounts of assets, and any impairment losses and reversals will affect the revenues.

c. Employee benefits

The benefit obligations and plan assets can be subject to significant volatility due to changes in market values and actuarial assumptions. These assumptions vary between different pension plans and thus take into account market conditions. They are determined following actuarial valuation method certified by external independent actuarial valuer. The assumptions for each plan are reviewed half-yearly and annually and adjusted if necessary.

d. Asset retirement obligations

Asset retirement obligations, which result from a legal or constructive obligation, are recognized based on a reasonable estimate in the period in which the obligation arises. This estimate is based on information available in terms of costs and work program. It is regularly reviewed to take into account the changes in laws and regulations, the estimated useful life of fields based on proved and probable oil and gas reserves and current production off-take, the analysis of site conditions and technologies. Decommissioning Liability provision may differ due to changes in the aforesaid factors. The risk adjusted discount rate used for estimating the present value of obligation is reviewed annually.

e. Taxation

Tax liabilities are recognized when it is considered probable that there will be a future outflow of funds to a taxing authority. In such cases, provision is made for the amount that is expected to be settled, where this can be reasonably estimated. This requires the application of

judgment as to the ultimate outcome, which can change over time depending on facts and circumstances. A change in estimate of the likelihood of a future outflow and/or in the expected amount to be settled would be recognized in income in the period in which the change occurs. Deferred tax assets are recognized only to the extent it is considered probable that those assets will be recoverable. This involves an assessment of when those assets are likely to reverse, and a judgment as to whether or not there will be sufficient taxable profits available to offset the assets when they do reverse. This requires assumptions regarding future profitability and is therefore inherently uncertain. To the extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognized in respect of deferred tax assets as well as in the amounts recognized in income in the period in which the change occurs.

1.3.0 Revenue recognition

1.3.1 Revenue from contracts with customers

The Company derives revenues primarily from sale of products such as Crude Oil, Natural Gas, Liquefied Petroleum Gas (LPG), Condensate, Renewable Energy and sale of services such as Pipeline Transportation Services.

Revenue from contracts with customers is recognized at the point in time the Company satisfies a performance obligation by transferring control of a promised product or service to a customer and is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. Discount, taxes & duties (other than excise duty) and Company''s share of profit petroleum payable to Government of India (GOI) are excluded from revenue.

The transfer of control on sale of Crude Oil, Natural Gas and Liquefied Petroleum Gas (LPG) and Condensate occurs either at the point of delivery or the point of receipt, where usually the title is passed and the customer takes physical possession, depending upon the contractual conditions. Any retrospective revision in prices is accounted for in the year of such revision.

Revenue in respect of contractual short lifted quantity of gas is recognized when the customer''s right to such quantity is expired and there is reasonable certainty regarding its ultimate collection.

Sale and transportation of crude oil and natural gas are based on mutually agreed terms between the parties/ governed by the Government directives issued from time to time. Subsequent changes in terms, if any, are recognized in the period of change. Such retrospective

revision in prices is not determinable at the time of sale.

1.3.2 Contract liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer or in case of dispute, penalties have been raised on the entity by the contracting party. If a customer pays consideration before the Company transfers promised goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier).

The Company recognises contract liability for consideration received for short lifted quantity of gas under take or pay arrangements for which the customer has right to take related volume in future (i.e. unsatisfied performance obligations) and for the penalties that maybe raised by the contracting party in case of a dispute and reports these amounts as advances from customers or as penalties that maybe payable in future in the balance sheet. The un-accrued amounts are not recognised as revenue till all related performance obligations are fulfilled or the customer''s right to such quantities is expired.

1.3.3 Other operating revenue

(i) Claims on Central Government / Petroleum Planning & Analysis Cell (PPAC) towards gas pool revenue are accrued based on quantity delivered to the customers at discounted price, in respect of which revenue is recognized when collectability of the receivable is reasonably certain.

(ii) Revenue from sale of Renewable Energy Certificates (REC) is recognized on sale of the certificates through the Exchange i.e., when the receivable is reasonably certain.

(iii) Other claims are recognized when there is a reasonable certainty of recovery.

1.3.4 Other income

(i) Dividend income from investments is recognized when the Company''s right to receive payment is established.

(ii) Interest income is recognized on a time proportion basis taking into account the amount outstanding and at the effective interest rate applicable, which is the rate that equalises discounted estimated future cash receipts through expected life of the financial asset to that asset''s net carrying amount on initial recognition. Interest on income tax refund is accounted for upon finalisation of assessments.

(iii) Insurance claim other than that for transit loss of stores items are accounted for on final acceptance by the Insurance Company.

(iv) Revenue on account of reimbursable subsidies/ grants and interest on delayed realization from customers are recognized when there is certainty of ultimate realization.

(v) Recovery of liquidated damages is recognized in the Statement of Profit & Loss as income at the time of occurrence except in case of Joint Venture Contracts (JVC) which are governed by the respective Production Sharing/Revenue Sharing Contracts. In case of return/refund of the liquidated damages, the same is accounted for as other expenses. In case of any dispute over the liquidated damages, provision is created in the accounts.

1.4.0 Leases

1.4.1 The Company as lessor

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized as expense on a straight-line basis over the lease term on the same basis as lease income.

1.4.2 The Company as lessee

The Company has applied Ind AS 116 "Leases" to service contracts of equipments, land, buildings, vehicles, etc. to evaluate whether these contracts contains lease or not. Based on evaluation of the terms and conditions of the arrangements, the Company has evaluated such arrangements to be leases. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contact involves the use of an identified asset (ii) the Company has right to obtain substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

The Company has exercised the option not to apply Ind AS 116 to intangible assets.

Lease term

The Company determines the lease term as the noncancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease.

Recognition

Right of use asset:

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.

Lease liability:

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.

Depreciation:

The right-of-use assets is measured at cost less any accumulated depreciation. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use assets.

If ownership of the underlying asset is transferred or the purchase option is exercised by the Company, it shall depreciate over the remaining useful life of the asset.

Finance cost on lease liability:

Interest on the lease liability in each period during the lease term is the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability. 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 on "Borrowing costs".

Non lease component:

The Company''s contracts involve a number of additional services and components including personnel cost, maintenance, drilling related activities, consumables and other items. In most of such contracts, the additional services/non-lease components constitute significant portion of the overall contract value. Where the additional services/non-lease components are not separately priced, the consideration paid has been allocated based on the relative stand-alone prices of the lease and non-lease components. These non - lease components are not included in the measurement of lease liability.

Reassessment of lease liability:

The Company shall re-measure the lease liability by discounting the revised lease payments using a revised discount rate, if either:

i. There is a change in the lease term. The Company shall determine the revised lease payments on the basis of the revised lease term; or

ii. There is a change in the assessment of an option to purchase the underlying asset.

Impairment loss of the underlying asset:

The Company follows Ind AS 36 Impairment of Assets to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Short term lease and low value asset leases:

Leases for which lease term ends within 12 months is classified as short-term leases. The Company has elected short term leases and low value asset leases for recognition exemption in terms of Ind AS 116. The Company recognizes the lease rental payment associated with short term lease and low-value asset leases as expense in the Statement of Profit & Loss.

1.5.0 Foreign currency transactions and translations

The functional currency of the Company is the Indian Rupee. The financial statements are presented in Indian Rupees.

i. In preparing the financial statements of the Company, transactions in currencies other than the entity''s functional currency (foreign currencies) are recognized 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 retranslated at the closing rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign

currencies are translated at the rate prevailing at the date when the fair value was measured. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

ii. Transaction gains and losses realized upon settlement of foreign currency transactions are included in determining net profit / loss for the period in which the transaction is settled. Revenue, expense and cash-flow items denominated in foreign currencies are translated into the relevant functional currency using the exchange rate in effect on the date of the transaction.

iii. Exchange differences on monetary items are recognized in the statement of profit and loss in the period in which they arise except for:

(a) Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, cost of which are included in the cost of those assets are regarded as an adjustment to interest costs on those foreign currency borrowings;

(b) In accordance with para D13AA of Ind AS 101, first-time adoption of Indian Accounting Standards the Company continues to exercise policy adopted under previous IGAAP and accordingly exchange differences on longterm foreign currency monetary items relating to acquisition of depreciable and other assets were adjusted to the carrying cost of the assets and depreciated over the balance life of the assets and in other cases, exchange differences were accumulated in a "Foreign Currency Monetary Item Translation Difference Account" and amortized over the balance period of such long term foreign currency monetary item by recognition as income or expense in each of such periods in respect of items recognized in the financial statement for the period ending immediately before the beginning of the first Ind AS financial reporting period as per previous GAAP i,e., 31 March 2016 as reported date.

1.6.0 Borrowing costs

Borrowing cost consists of interest and other cost incurred in connection with borrowing of funds and includes exchange difference arising from Foreign Currency borrowings to the extent that they are regarded as an adjustment to interest cost. Borrowing cost also include finance cost on Lease Liability.

i. Borrowing costs directly attributable to the acquisition or construction of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, are capitalized to the cost of those assets, until such time as the assets are substantially ready for their intended use.

ii. Capitalisation of borrowing costs is suspended when active development activity on the qualifying assets is interrupted other than on temporary basis and charged to the Statement of Profit and Loss.

iii. All other borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.

1.7.0 Government grants

Government grants are recognized when there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants will be received.

(i) Grant related to Income (Revenue Grants)

Government grants are recognized in the statement of profit and loss on a systematic basis over the periods in which the Company recognizes as expenses the related costs for which the grants are intended to compensate.

(ii) Grant relating to Assets (Capital Grants)

Government grants with the primary condition that the Company should purchase construct or otherwise acquire non-current assets are recognized as deferred income in the balance sheet and transferred to the statement of profit and loss on a systematic and rational basis over the useful life of the related assets.

1.8.0 Employee benefits

1.8.1 Retirement benefit costs and termination benefits:

Payments to defined contribution retirement benefit plans are charged to the statement of profit and loss (other than expenses to be capitalised), when employees have rendered service entitling them to the contributions.

The cost of providing benefits under defined benefit plans (such as gratuity, leave encashment, postretirement medical benefits, defined benefit pension schemes) is determined separately for each plan using the projected unit credit method, with actuarial valuations being carried out half-yearly and annually. This attributes the increase in present value of the defined benefit obligation resulting from employee service in the current period to determine current service cost. The

current service cost as stated above and past service costs, resulting from a plan amendment (a reduction in future obligations as a result of a material reduction in the number of employees covered by the plan), are recognized in the statement of profit and loss under ''employee benefits expense''.

Net interest which is recognized in the statement of profit and loss under ''employee benefits expense'' represents the net change in present value of plan obligations and the value of plan assets resulting from the passage of time, and is determined by applying the discount rate to the present value of the benefit obligation at the start of the year, and to the fair value of plan assets at the beginning of the year, taking into account expected changes in the obligation or plan assets during the year.

Re-measurement of the defined benefit liability and asset, comprising actuarial gains and losses, and the return on plan assets (excluding amounts included in net interest described above) other than capitalised portion are recognized in other comprehensive income in the period in which they occur and are not subsequently reclassified to the statement of profit and loss.

The defined benefit pension plan surplus or deficit recognized in the balance sheet for each plan comprises the difference between the present value of the defined benefit obligation and the fair value of plan assets out of which the obligations are to be settled directly. Defined benefit pension plan surpluses are only recognized to the extent they are recoverable, naturally by way of refund or reductions in future contributions to the plans.

Payments made under Voluntary Retirement Scheme or any other early separation scheme are charged to the Statement of Profit and Loss on incurrence.

1.8.2 Short-term and other long-term employee benefits

A liability is recognized for benefits accruing to employees in respect of wages and salaries (including performance related pay), annual leave, sick leave and social security contribution in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

1.9.0 Taxation

Income tax expense represents the aggregate of current tax and deferred tax.

1.9.1 Current tax

Current tax is the amount of income tax payable/ paid based on taxable profit as per the provisions of The Income Tax Act,1961 and Rules thereto, for the reporting period. 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 and the tax laws that have been enacted or substantively enacted by the end of the reporting period.

After an appeal is decided by appellate authority, the corresponding appeal effect is given in the accounts only after receipt of appellate order from the concerned Department/ Authority.

1.9.2 Deferred tax

i. Deferred tax 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 recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

ii. 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 the benefits of all or part of the deferred tax asset to be utilized. Any such reduction shall be reversed to the extent when it becomes probable that sufficient taxable profit will be available.

iii. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is to be settled or the asset to be realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

1.9.3 Current and deferred tax expenses for the year

Current and deferred tax are recognized in the statement of profit and loss, except when they relate to items that

are recognized in other comprehensive income, in which case, the current and deferred tax are also recognized in other comprehensive income.

1.10.0 Oil and gas exploration, evaluation and development expenditure

The Company follows the Successful Efforts Method (SEM) of accounting in respect of its oil and gas exploration and production activities which is in accordance with Ind AS 106 and the "Guidance Note on Accounting for Oil & Gas Producing Activities (Ind AS)" issued by the Institute of Chartered Accountants of India.

1.10.1 Pre-Acquisition, Acquisition, Exploration & Evaluation Costs

(i) Pre-Acquisition costs: Pre-Acquisition costs of revenue nature incurred prior to obtaining the rights to explore, develop and produce Oil & Gas like data collection & analysis cost etc. are expensed to the Statement of Profit and Loss in the year of incurrence.

(ii) Acquisition costs:

(a) Acquisition costs include cost of land

acquired for drilling operations including cost of temporary occupation of the land, crop compensation paid to farmers, registration fee, legal cost, signature

bonus, brokers'' fees, consideration for farm-in arrangements and other costs incurred in acquiring mineral rights.

(b) These costs are initially recorded

under Exploration & Evaluation Assets

(Intangible) except cost of land acquired for drilling operations which are shown as Acquisition cost-land under capital work in progress.

(c) On determination of proved developed

reserves, associated acquisition costs are transferred to Property, Plant & Equipment as Oil & Gas assets.

(d) Acquisition cost relating to an exploratory well that is determined to have no proved reserves and its status is decided as dry or of no further use for exploration purpose, is charged as expenses. In such cases land value forming part of acquisition cost, a nominal amount of '' 100 per bigha is transferred to Freehold land under Property, Plant & Equipment.

(e) Cost for retaining the mineral interest in properties like lease carrying cost, license fees & other cost are charged as expense when incurred.

(iii) Exploration & Evaluation Cost (E&E cost):

(a) Geological and geophysical costs, including seismic surveys for exploration purposes are expensed as incurred.

(b) Costs including allocated depreciation on support equipment and facilities involved in drilling and equipping exploratory and appraisal wells and cost of exploratory-type drilling stratigraphic test wells are initially shown as Exploration& Evaluation Assets (Intangible) till the time these are either transferred to Property, Plant & Equipment as Oil & Gas assets on establishment of Proved Developed Reserves or charged as expense when determined to be dry or of no further use.

(c) E&E costs related to each exploratory well are not carried over unless it could be reasonably demonstrated that there are indications of sufficient quantity of reserves and activities are firmly planned in near future for further assessing the reserves and economic & operating viability of the project. Costs of written off exploratory wells are not reinstated in the books even if they start producing subsequently.

1.10.2 Development Cost

Costs that are attributable to development activities including production and processing plant & facilities, service wells including allocated depreciation on support equipment and facilities are initially shown under Capital Work in Progress as Development Cost till such time they are capitalized as Oil & Gas Asset under Property, Plant & Equipment on establishment of Proved Developed Reserves. Cost of dry development well, if any is also capitalized as Oil & Gas Asset under Property, Plant & Equipment upon completion of the well.

1.10.3 Production Cost

Production Cost consists of direct and indirect costs incurred to operate and maintain wells and related equipment and facilities, including depreciation and applicable operating cost of support equipment and facilities.

1.10.4 Side-Tracking Expenditure

In case of exploratory wells, the cost of abandoned portion of side tracked well is charged off to the Statement of Profit and Loss statement. In case of

development wells, the entire cost of abandoned portion and side- tracking is capitalized. In case of existing producing wells, the cost of side - tracking is capitalized if it increases the proved developed reserves, otherwise is charged off to Statement of Profit and loss.

1.11.0 Research & Development Expenditure

All revenue expenditure incurred for Research & Development Projects /Schemes, net of grants-in-aid (other than those related to asset) if any, are charged to the Statement of Profit and Loss.

1.12.0 Property, plant and equipment (PPE)

i. An item of property, plant and equipment is recognized by the Company as an asset if it is probable that future economic benefits associated with the items will flow to the entity and the cost of the items can be measured reliably.

ii. Property, plant and equipment are stated at cost, less accumulated depreciation, depletion and impairment losses. The initial cost of an asset comprises its purchase price including import duties and non-refundable purchase taxes or construction cost, any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation wherever applicable and eligible borrowing costs. The purchase price or construction cost is the aggregate amount paid / payable and the fair value of any other consideration given to acquire the asset. Assets in the course of construction are initially kept under assets under construction and capitalized when the assets are available for use in the manner as intended by the management.

iii. Items such as spare parts, stand-by equipment and servicing equipment which meet the definition of Property, Plant and Equipment are capitalised. Other spare parts are carried as inventory and recognized in the Statement of Profit and Loss on consumption. Cost of day-to-day servicing of property, plant and equipment are recognized in the Statement of Profit and Loss as incurred. Major shut-down and overhaul expenditure is capitalized as the activities undertaken to improve the future economic benefits expected to arise from the asset. Where an asset or part of an asset that was separately depreciated is replaced and it is probable that future economic benefits associated with the item will flow to the Company, the expenditure is capitalized and the carrying amount of the replaced asset is derecognized. Inspection costs associated with major maintenance programs from which future

economic benefits are expected to flow, are capitalized and amortized over the period to the next inspection.

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

v. Oil and gas assets which comprise of producing wells, related acquisition cost and production facilities are depleted using a unit-of-production method. The cost of producing wells and production facilities net of salvage value are depleted over proved developed reserves. Acquisition cost is depleted over proved reserves. Rate of depletion is determined based on production from the Oil /Gas field or a group of Oil/ Gas fields identified to the related reserves having homogeneous geological feature. Estimation of oil and natural gas reserves are done annually at the year end and the impact of changes in the estimated proved reserves are dealt with prospectively by depleting the remaining carrying value of the asset.

vi. Other property, plant and equipment excluding ''Land-freehold'' and ''Right of use (ROU) assets are depreciated based on useful life of the asset under "Written down value method" as specified in Schedule II to the Companies Act, 2013. When any part of an item of property, plant and equipment, has different useful life and cost is significant in relation to the total cost of the asset, they are accounted for and depreciated separately. Depreciation on additions / deletions during the year is provided on pro rata basis with reference to the date of additions / deletions except low value items not exceeding '' 5,000 which are fully depreciated at the time of addition. Residual value of property plant and equipments other than well asset is determined considering past experience and is upto 5% of the original cost till such asset is disposed. The residual value of well assets are determined at current cost on the basis of available technical assessment. The typical useful life of other major property, plant and equipment are as follows:

Buildings	30 to 60 years
Plant & Machinery	10 to 40 years
Furniture and fixtures	8 to 10 years
Office equipments	3 to 10 years
Vehicles	8 to 10 years
Railway siding	15 years

Depreciation on subsequent expenditure on PPE (other than of Oil and Gas Assets) arising on account of capital improvement or other factors is provided for prospectively over the remaining useful life. Depreciation on furbished / revamped PPE (other than of Oil and Gas Assets) which are capitalized separately is provided for over the reassessed useful life.

vii. The expected useful life of property, plant and equipment other than Oil and gas assets are reviewed on an annual basis and, if necessary, impact arising out the changes in useful life are accounted for prospectively.

viii. An item of property, plant and equipment other than Oil & Gas assets is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on de- recognition of the asset is included in the statement of Profit & Loss in the period in which the item is derecognized. Any Tangible asset other than Oil & Gas assets, when determined of no further use, is deleted from the Gross Block of assets. The deleted assets are carried as ''Assets awaiting disposal'' under Inventories at lower of '' 1000 or 5% of the original cost and the balance written down value, is charged off. Any gain or loss arising on actual sale of the asset is included in the income statement in the period in which the item is actually sold as scrap.

ix. Oil & gas assets other than production facilities asset is derecognized when the designated oil / gas field or a group of oil/gas fields ceases to produce. Production facilities asset is derecognized either on disposal/when no future economic benefits are expected to arise from the continued use of the asset or when the designated oil/gas field or a group of oil / gas fields ceases to produce, whichever is earlier. Any gain or loss arising on derecognition of the asset including sale of salvage is included in the statement of profit and loss.

x. Assets provided to employees as per the Company''s internal scheme are also classified as property, plant and equipment (PPE) and recognised as an asset. Such assets are depreciated based on the useful life as defined in the internal scheme of the Company under written down value method. The useful life of such assets is different than as specified in Schedule II of the Company''s Act. The assets provided to the employees and its useful life are as follows:

Mobile Phone - 3 years

Furniture and household goods - 6 years

Soft Furniture - Fully in the year of purchase

xi. Physical verification of the property, plant and equipment (other than PPE items given to employees as per the policy of the Company) is carried out by the Company in a phased manner to cover all the items over a period of three years. The discrepancies noticed, if any, are accounted for in the year in which such differences are found.

1.12.1 Capital Work in Progress (CWIP)

i. Expenses exclusively attributable to capital projects and incurred during construction period are considered as capital work in progress.

ii. Borrowing cost incurred during construction period on loans borrowed and utilised for capital projects upto the date of capitalization is considered as capital work in progress.

1.12.2 Intangible assets

Cost of intangible assets are capitalised when it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity, the cost of the asset can be measured reliably and the asset is ready for its intended use. The Company follows cost model for recognition and measurement of intangible assets

Intangible assets are stated at the amount initially recognized less accumulated amortization and accumulated impairment losses.

Cost of right of way of land with indefinite useful lives are not amortized but tested for impairment annually at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues or not. If not, the change is useful life from indefinite to finite is made on a prospective basis.

Cost of computer software is amortized over the useful life not exceeding five years from the date of capitalization.

Any intangible asset, when determined obsolete and of no further use, is written off.

1.12.3 Impairment of Property, Plant & Equipment (PPE), E&E assets, Intangible assets other than goodwill

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant & equipment (including capital work in progress) to determine whether

there is any indication that those assets have suffered an impairment loss. For this purpose, Producing fields, LPG plant, Transportation Pipeline and Renewable Energy Units (other than captive power plants) are considered as Cash Generating Units (CGU).

If any such indication exists, the recoverable amount of the CGU is estimated in order to determine the extent of the impairment loss (if any). Corporate assets and common service assets are also allocated to individual cash- generating units on a reasonable and consistent basis.

Intangible assets are tested for impairment annually. Whenever there is an indication that the asset may be impaired, the recoverable amount of the asset wherever feasible is estimated in order to determine the extent of the impairment loss (if any).

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 a CGU is estimated to be less than its carrying amount, the carrying amount of the asset or group of assets covered under the CGU is reduced to its recoverable amount. An impairment loss is recognized in the statement of profit and loss.

E&E assets are reviewed for indicators of impairment as per Ind AS 106 and if events and circumstances suggest, impairment loss is provided for and carrying amount is reduced accordingly.

When an impairment loss is subsequently reversed, the carrying amount of the asset or group of assets covered under the CGU is increased to the revised estimate of its recoverable amount, up to the carrying amount that would have been determined had no impairment loss been recognized for the asset or group of assets covered under the CGU in prior years. A reversal of an impairment loss is recognized in the Statement of Profit and Loss.

1.13.0 Inventories

Inventory of finished goods of Crude Oil, Liquefied Petroleum Gas (LPG) and LPG condensate are valued at cost determined on absorption costing method basis or net realizable value, whichever is lower, as per Ind AS 2. Cost of finished goods is determined based on direct cost and directly attributable services cost including depreciation & depletion. The value of such inventories includes excise duty and royalty (wherever applicable). Net realizable value represents the estimated selling price for inventories less all costs necessary to affect the sale.

Crude oil in unfinished condition in the flow line up to Group Gathering Station and Natural Gas in Pipeline are not valued, as these pipeline fills are necessary for the operation of the facility. Crude oil in semi-finished condition in group gathering station are not valued as the same is not measurable.

Inventory of stores and spares including capital stores are valued at weighted average cost or net realizable value whichever is lower, as per Ind AS 2. Obsolete / unserviceable items, as and when identified, are written off. Any item of stores and spares including those in Storage Locations which have not moved for last four years as on date of Balance Sheet are identified as slow-moving items for which a provision of 95% of the cost is made.

Renewable Energy Certificates (REC) received based on generation of renewable energy certified by the competent authority, held for trading are not valued.

Physical verification of inventory including store and spare items (excluding materials in-transit) is carried out by the Company in a phased manner to cover all the items. Stores and spare items of high and medium value are physically verified every year whereas items carrying low value are physically verified over a period of 3 years. The discrepancies noticed, if any, are accounted for in the year in which such differences are found.

1.14.0 Provisions

Provisions are recognized when the Company has a present obligation as a result of a past event and it is probable that the Company will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognized 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. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value as on the reporting date of those cash flows (when the effect of the time value of money is material).

Provisions towards cost of unfinished Minimum Work Program (MWP) committed by the Company for all joint venture blocks are made when there is a present obligation on the basis of available facts as at the end of the reporting period.

1.14.1 Decommissioning and restoration obligations

Full eventual liabilities towards costs relating to assets retirement obligations are recognized when the

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 is appropriate, on initial recognition.

1.16.1 Financial assets

1.16.1.1 Investment / Disinvestment in Securities

All regular purchases or sales of financial assets are recognized and de-recognized on a trade date basis or investment date as the case may be.

All recognized financial assets are subsequently measured in their entirety either at amortized cost or fair value, depending on the classification of the financial assets.

1.16.1.1.1 Classification of financial assets

i. Debt instruments that meet the following conditions are subsequently measured at amortized cost less impairment loss (except for debt investments that are designated as at Fair Value Through Profit or Loss (FVTPL) on initial recognition):

a The asset is held within a business model whose objective is to hold assets till maturity in order to collect contractual cash flows; and

b. The contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

ii. Debt instruments that meet the following conditions are subsequently measured at Fair Value Through Other Comprehensive Income (except for debt investments that are designated as at FVTPL on initial recognition):

a. the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and

b. The contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

iii. Debt instruments that do not meet the criteria of amortized cost or Fair Value through Other Comprehensive Income (FVTOCI) are measured at FVTPL.

iv. All other financial assets are subsequently measured at fair value through Profit or Loss.

Company has an obligation to plug and abandon a well, dismantle and remove a facility or an item of plant and to restore the site on which it is located, and when a reliable estimate of that liability can be made. Liabilities towards costs relating to dismantling, abandoning and restoring well sites and associated Production Facilities are recognized at the commencement of drilling a well or when facilities are installed, as the case may be. The amount recognized is the present value of the estimated future expenditure determined in accordance with local conditions and requirements at current prices and escalated using appropriate inflation rate till the expected date of decommissioning and discounted using appropriate risk-free discount rate.

An amount equivalent to the decommissioning liability provision is recognized as part of the corresponding PPE, CWIP or Exploration & Evaluation Asset (E&E) as the case may be.

Liability for decommissioning cost is updated annually based on the technical assessment available at current costs. The unwinding of the discount is included as a finance cost. Any change in the present value of the estimated decommissioning provision other than unwinding of discount is adjusted to decommissioning provision and added to or deducted from the cost of the asset in the current period and is considered for depreciation (depletion) prospectively. In case, reversal of decommissioning provision exceeds the corresponding carrying value of the related assets, the excess amount is recognized in the Statement of Profit & Loss.

The actual cost incurred on settlement of the obligation is adjusted against the liability and the ultimate gain or loss is recognized in the Statement of Profit and Loss, when the designated oil / gas field or a group of oil/gas fields ceases to produce.

1.15.0 Investments in Subsidiaries, Associates and Joint Ventures

The Company measures its investments in subsidiaries, associates and joint ventures at cost and the same are tested for impairment in case of any indication of impairment.

1.16.0 Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

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

1.16.1.1.2 Amortized cost and Effective interest method

The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that equates by discounting estimated future cash flows (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Income is recognized in the statement of profit & loss under investment income on an effective interest basis for debt instruments other than those financial assets classified as FVTPL.

1.16.1.1.3 Investments in equity instruments at Fair Value Through Other Comprehensive Income (FVTOCI)

On initial recognition, the Company can make an irrevocable election (on an instrument-by-instrument basis) to present the subsequent changes in fair value in other comprehensive income for equity instruments that are not held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity under subhead Equity instruments through other comprehensive income. The cumulative gain or loss is not reclassified to profit or loss on disposal of the investments.

Dividends on these investments in equity instruments are recognized in the Statement of Profit and Loss when the Company''s right to receive the dividends is established and it does not represent a recovery of part of cost of the investment.

1.16.1.2 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand, including offsetting bank overdrafts, and shortterm highly liquid investments that are readily convertible to known amounts of cash, are subject to an insignificant risk of changes in fair value and have a maturity of three months or less from the acquisition date.

1.16.1.3 Trade receivables

Trade receivables are recognized initially at their transaction price unless those contain a significant financing component in accordance with Ind AS 115.

1.16.1.4 Impairment of financial assets

The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since its initial recognition. If the credit risk on a financial instrument has not increased significantly since its initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12 month expected credit losses.

However, for trade receivables or contract assets that result in relation to revenue from contracts with customers, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

1.16.1.5 De-recognition of financial assets

The Company de-recognizes 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 de-recognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset.

1.16.2 Financial liabilities and equity instruments

1.16.2.1 Equity instruments

An equity instrument is any contract that evidences a residual interest in th

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Mar 31, 2022

1.1.0 Company Overview

The Financial Statements of "Oil India Limited" ("the Company "or" OIL" ) are for the year ended 31^st March, 2022.

The Company is engaged in exploration, development and production of crude oil & natural gas, production of LPG, transportation of crude oil & natural gas and generation of renewable energy. The Company is a public limited Company incorporated in India having its registered office at Duliajan, District Dibrugarh, Assam, Pin-786602. The Company''s shares are listed and traded in BSE Limited and National Stock Exchange of India Limited.

1.1.1 New Standards/ amendments and other changes effective from April 1, 2021

Amendments and other changes issued under section 133 of the Companies Act notified by Ministry of Corporate Affairs (MCA) under the Companies (Indian Accounting Standards) Rules, 2015 are appropriately applied in preparation of the Financial Statements.

1.2.0 Significant accounting policies

1.2.1 Statement of compliance

The financial statements have been prepared in accordance with the provisions of Companies Act, 2013 and in compliance with the Indian Accounting Standards (Ind AS) issued by the Ministry of Corporate Affairs notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended. The Ind ASs prescribed under section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 as amended from time to time.

1.2.2 Basis of preparation

The financial statements are prepared under the historical cost convention on the accrual basis except for certain financial assets and financial liabilities which are measured at fair values as per the respective para included hereinafter.

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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the

Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date on such basis as provided under Ind AS 113.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

As the operating cycle cannot be identified in normal course due to the special nature of industry, the same has been assumed to have duration of 12 months. Accordingly, all assets and liabilities have been classified as current or non- current as per the Company''s operating cycle and other criteria set out in Ind AS-1 "Presentation of Financial Statements" and 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 crore except otherwise stated.

1.2.3 Use of estimates

In preparing the Standalone Financial Statements, in conformity with the accounting policies of the Company, management is required to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of the contingent liabilities as at the date of the financial statements, the amount of revenues and expenditures during the reported period and notes to the financial statements. Actual results could differ from those estimates, any revision to such estimates is recognized in such period in which the same is determined and if material, their effects are disclosed in the notes to the financial statements.

1.2.4 Major judgments, assumptions and accounting estimates

a. Estimation of oil and gas reserves

The estimation of oil and gas reserves is key factor in the accounting for oil and gas producing activities. Oil and gas reserves are estimated by analysis of geosciences and engineering data using Deterministic Method. Production pattern analysis, number of additional wells to be completed, application of recovery techniques, validity of mining lease agreements, agreements/MOU for sales etc. influence the estimation of reserves. Unit-of-production depreciation, depletion and amortization charges are principally measured based on

management''s estimates of proved developed oil and gas reserves. Also, exploration drilling costs are categorized as Exploration and Evaluation Assets pending the results of further exploration or appraisal activity, which may take several years to complete and before any related proved reserves can be booked.

b. Impairment of assets

As part of the determination of the recoverable value of assets of cash generating units for impairment, the estimates, assumptions and judgments mainly concern oil and gas prices scenarios, operating costs, production volumes and oil and gas proved & probable reserves. The discount rate used for estimating the value in use is reviewed annually. Changes in assumptions could affect the carrying amounts of assets, and any impairment losses and reversals will affect the revenues.

c. Employee benefits

The benefit obligations and plan assets can be subject to significant volatility due to changes in market values and actuarial assumptions. These assumptions vary between different pension plans and thus take into account market conditions. They are determined following actuarial valuation method certified by external independent actuarial valuer. The assumptions for each plan are reviewed half-yearly and annually and adjusted if necessary.

d. Asset retirement obligations

Asset retirement obligations, which result from a legal or constructive obligation, are recognized based on a reasonable estimate in the period in which the obligation arises. This estimate is based on information available in terms of costs and work program. It is regularly reviewed to take into account the changes in laws and regulations, the estimated useful life of fields based on proved and probable oil and gas reserves and current production off-take, the analysis of site conditions and technologies. Decommissioning Liability provision may differ due to changes in the aforesaid factors. The risk adjusted discount rate used for estimating the present value of obligation is reviewed annually.

e. Taxation

Tax liabilities are recognized when it is considered probable that there will be a future outflow of funds to a taxing authority. In such cases, provision is made for the amount that is expected to be settled, where this can be reasonably estimated. This requires the application of judgment as to the ultimate outcome, which can change over time depending on facts and circumstances. A change in estimate of the likelihood of a future outflow and/or in the expected amount to be settled would be recognized in income in the period in which the change occurs.

Deferred tax assets are recognized only to the extent it is considered probable that those assets will be recoverable. This involves an assessment of when those assets are likely to reverse, and a judgment as to whether or not there will be sufficient taxable profits available to offset the assets when they do reverse. This requires assumptions regarding future profitability and is therefore inherently uncertain. To the extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognized in respect of deferred tax assets as well as in the amounts recognized in income in the period in which the change occurs.

1.3.0 Revenue recognition

1.3.1 Revenue from contracts with customers

The Company derives revenues primarily from sale of products such as Crude Oil, Natural Gas, Liquefied Petroleum Gas (LPG), Condensate, Renewable Energy and sale of services such as Pipeline Transportation Services.

Revenue from contracts with customers is recognized at the point in time the Company satisfies a performance obligation by transferring control of a promised product or service to a customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for the sale of products and service, net of discount, taxes & duties (other than excise duty) and Company''s share of profit petroleum payable to Government of India (GOI).

The transfer of control on sale of Crude Oil, Natural Gas and Liquefied Petroleum Gas (LPG) and Condensate occurs either at the point of delivery or the point of receipt, where usually the title is passed and the customer takes physical possession, depending upon the contractual conditions. Any retrospective revision in prices is accounted for in the year of such revision.

Revenue in respect of contractual short lifted quantity of gas is recognized when the customer''s right to such quantity is expired and there is reasonable certainty regarding its ultimate collection.

Sale and transportation of crude oil and natural gas are based on mutually agreed terms between the parties/ governed by the Government directives issued from time to time. Subsequent changes in terms, if any, are recognized in the period of change. Such retrospective revision in prices is not determinable at the time of sale.

1.3.2 Contract liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is

due) from the customer or in case of dispute, penalties have been raised on the entity by the contracting party. If a customer pays consideration before the Company transfers promised goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier).

The company recognises contract liability for consideration received for short lifted quantity of gas under take or pay arrangements for which the customer has right to take related volume in future (i.e. unsatisfied performance obligations) and for the penalties that maybe raised by the contracting party in case of a dispute and reports these amounts as advances from customers or as penalties that maybe payable in future in the balance sheet. The un-accrued amounts are not recognised as revenue till all related performance obligations are fulfilled or the customer''s right to such quantities is expired.

1.3.3 Other operating revenue

(i) Claims on Central Government / Petroleum Planning & Analysis Cell (PPAC) towards gas pool revenue are accrued based on quantity delivered to the customers at discounted price, in respect of which revenue is recognized when collectability of the receivable is reasonably certain

(ii) Revenue from sale of Renewable Energy Certificates (REC) is recognized on sale of the certificates through the Exchange i.e., when the receivable is reasonably certain.

(iii) Other claims are recognized when there is a reasonable certainty of recovery.

1.3.4 Other income

(i) Dividend income from investments is recognized when the Company''s right to receive payment is established.

(ii) Interest income is recognized on a time proportion basis taking into account the amount outstanding and at the effective interest rate applicable, which is the rate that equalises discounted estimated future cash receipts through expected life of the financial asset to that asset''s net carrying amount on initial recognition. Interest on income tax refund is accounted for upon finalisation of assessments.

(iii) Insurance claim other than that for transit loss of stores items are accounted for on final acceptance by the Insurance Company.

(iv) Revenue on account of reimbursable subsidies/

grants and interest on delayed realization from customers are recognized when there is certainty of ultimate realization.

(v) Recovery of liquidated damages is recognized in the Statement of Profit & Loss as income at the time of occurrence except in case of Joint Venture Contracts (JVC) which are governed by the respective Production Sharing/Revenue Sharing Contracts. In case of return/refund of the liquidated damages, the same is accounted for as other expenses. In case of any dispute over the liquidated damages, provision is created in the accounts.

1.4.0 Leases

1.4.1 The Company as lessor

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized as expense on a straight-line basis over the lease term on the same basis as lease income.

1.4.2 The Company as lessee

The company has applied Ind AS 116 "Leases" to service contracts of equipments, land, buildings, vehicles, etc. to evaluate whether these contracts contains lease or not. Based on evaluation of the terms and conditions of the arrangements, the Company has evaluated such arrangements to be leases.

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contact involves the use of an identified asset (ii) the Company has right to obtain substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

Lease term

The Company determines the lease term as the noncancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and

periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease.

Recognition

Right of use asset:

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.

Lease liability:

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.

Depreciation:

The right-of-use assets is measured at cost less any accumulated depreciation. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use assets.

If ownership of the underlying asset is transferred or the purchase option is exercised by the company, it shall depreciate over the remaining useful life of the asset.

Finance cost on lease liability:

Interest on the lease liability in each period during the lease term is the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability. 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 on "Borrowing costs".

Non lease component:

The Company''s contracts involve a number of additional services and components including personnel cost, maintenance, drilling related activities, consumables and other items. In most of such contracts, the additional services/non-lease components constitute

significant portion of the overall contract value. Where the additional services/non-lease components are not separately priced, the consideration paid has been allocated based on the relative stand-alone prices of the lease and non-lease components. These non - lease components are not included in the measurement of lease liability.

Reassessment of lease liability:

The Company shall re-measure the lease liability by discounting the revised lease payments using a revised discount rate, if either:

(i) There is a change in the lease term. The Company shall determine the revised lease payments on the basis of the revised lease term; or

(ii) There is a change in the assessment of an option to purchase the underlying asset.

Impairment loss of the underlying asset:

The Company follows Ind AS 36 Impairment of Assets to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Short term lease and low value asset leases:

Leases for which lease term ends within 12 months is classified as short-term leases. The Company has elected short term leases and low value asset leases for recognition exemption in terms of Ind AS 116. The Company recognizes the lease rental payment associated with short term lease and low-value asset leases as expense in the Statement of Profit & Loss.

1.5.0 Foreign currency transactions and translations

The functional currency of the Company is the Indian Rupee. The financial statements are presented in Indian Rupees.

(i) In preparing the financial statements of the Company, transactions in currencies other than the entity''s functional currency (foreign currencies) are recognized 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 retranslated at the closing rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rate prevailing at the date when the fair value was measured. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

(ii) Transaction gains and losses realized upon settlement of foreign currency transactions are

included in determining net profit / loss for the period in which the transaction is settled. Revenue, expense and cash-flow items denominated in foreign currencies are translated into the relevant functional currency using the exchange rate in effect on the date of the transaction.

(iii) Exchange differences on monetary items are recognized in the statement of profit and loss in the period in which they arise except for:

(a) Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, cost of which are included in the cost of those assets are regarded as an adjustment to interest costs on those foreign currency borrowings;

(b) In accordance with para D13AA of Ind AS 101, First-time Adoption of Indian Accounting Standards the Company continues to exercise policy adopted under previous IGAAP and accordingly exchange differences on long-term foreign currency monetary items relating to acquisition of depreciable and other assets were adjusted to the carrying cost of the assets and depreciated over the balance life of the assets and in other cases, exchange differences were accumulated in a "Foreign Currency Monetary Item Translation Difference Account" and amortized over the balance period of such long term foreign currency monetary item by recognition as income or expense in each of such periods in respect of items recognized in the financial statement for the period ending immediately before the beginning of the first Ind AS financial reporting period as per previous GAAP i,e., 31 March, 2016 as reported date.

1.6.0 Borrowing costs

Borrowing cost consists of interest and other cost incurred in connection with borrowing of funds and includes exchange difference arising from Foreign Currency borrowings to the extent that they are regarded as an adjustment to interest cost.

(i) Borrowing costs directly attributable to the acquisition or construction of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, are capitalized to the cost of those assets, until such time as the assets are substantially ready for their intended use.

(ii) Capitalisation of borrowing costs is suspended when active development activity on the qualifying assets is interrupted other than on temporary

basis and charged to the Statement of Profit and Loss.

(iii) All other borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.

1.7.0 Government grants

Government grants are recognized when there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants will be received.

(i) Grant related to Income (Revenue Grants)

Government grants are recognized in the statement of profit and loss on a systematic basis over the periods in which the Company recognizes as expenses the related costs for which the grants are intended to compensate.

(ii) Grant relating to Assets (Capital Grants)

Government grants with the primary condition that the Company should purchase construct or otherwise acquire non-current assets are recognized as deferred income in the balance sheet and transferred to the statement of profit and loss on a systematic and rational basis over the useful life of the related assets.

1.8.0 Employee benefits

1.8.1 Retirement benefit costs and termination benefits:

Payments to defined contribution retirement benefit plans are charged to the statement of profit and loss (other than expenses to be capitalised), when employees have rendered service entitling them to the contributions.

The cost of providing benefits under defined benefit plans (such as gratuity, leave encashment, postretirement medical benefits, defined benefit pension schemes) is determined separately for each plan using the projected unit credit method, with actuarial valuations being carried out half-yearly and annually. This attributes the increase in present value of the defined benefit obligation resulting from employee service in the current period to determine current service cost. The current service cost as stated above and past service costs, resulting from a plan amendment (a reduction in future obligations as a result of a material reduction in the number of employees covered by the plan), are recognized in the statement of profit and loss under ''employee benefits expense''.

Net interest which is recognized in the statement of profit and loss under ''employee benefits expense'' represents the net change in present value of plan obligations and the value of plan assets resulting from the passage of

time, and is determined by applying the discount rate to the present value of the benefit obligation at the start of the year, and to the fair value of plan assets at the beginning of the year, taking into account expected changes in the obligation or plan assets during the year.

Re-measurement of the defined benefit liability and asset, comprising actuarial gains and losses, and the return on plan assets (excluding amounts included in net interest described above) are recognized in other comprehensive income in the period in which they occur and are not subsequently reclassified to the statement of profit and loss.

The defined benefit pension plan surplus or deficit recognized in the balance sheet for each plan comprises the difference between the present value of the defined benefit obligation and the fair value of plan assets out of which the obligations are to be settled directly. Defined benefit pension plan surpluses are only recognized to the extent they are recoverable, naturally by way of refund or reductions in future contributions to the plans.

Payments made under Voluntary Retirement Scheme or any other early separation scheme are charged to the Statement of Profit and Loss on incurrence.

1.8.2 Short-term and other long-term employee benefits

A liability is recognized for benefits accruing to employees in respect of wages and salaries (including performance related pay), annual leave, sick leave and social security contribution in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

1.9.0 Taxation

Income tax expense represents the aggregate of current tax and deferred tax.

1.9.1 Current tax

Current tax is the amount of income tax payable/ paid based on taxable profit as per the provisions of The Income Tax Act, 1961 and Rules thereto, for the reporting period. 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 and the tax laws that have been enacted or substantively enacted by the end of the reporting period.

After an appeal is decided by appellate authority, the corresponding appeal effect is given in the accounts only after receipt of appellate order from the concerned Department/ Authority.

1.9.2 Deferred tax

(i) Deferred tax 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 recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

(ii) 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 the benefits of all or part of the deferred tax asset to be utilized. Any such reduction shall be reversed to the extent when it becomes probable that sufficient taxable profit will be available.

(iii) Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is to be settled or the asset to be realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

1.9.3 Current and deferred tax expenses for the year

Current and deferred tax are recognized in the statement of profit and loss, except when they relate to items that are recognized in other comprehensive income, in which case, the current and deferred tax are also recognized in other comprehensive income.

1.10.0 Oil and gas exploration, evaluation and development expenditure

The Company follows the Successful Efforts Method (SEM) of accounting in respect of its oil and gas exploration and production activities which is in accordance with Ind AS 106 and the "Guidance Note on Accounting for Oil & Gas Producing Activities (Ind AS)" issued by the Institute of

Chartered Accountants of India.

1.10.1 Pre-Acquisition, Acquisition, Exploration & Evaluation Costs

(i) Pre-Acquisition costs: Pre-Acquisition costs of revenue nature incurred prior to obtaining the rights to explore, develop and produce Oil & Gas like data collection & analysis cost etc. are expensed to the Statement of Profit and Loss in the year of incurrence.

(ii) Acquisition costs:

(a) Acquisition costs include cost of land acquired for drilling operations including cost of temporary occupation of the land, crop compensation paid to farmers, registration fee, legal cost, signature bonus, brokers'' fees, consideration for farm-in arrangements and other costs incurred in acquiring mineral rights.

(b) These costs are initially recorded under Exploration & Evaluation Assets (Intangible) except cost of land acquired for drilling operations which are shown as Acquisition cost-land under capital work in progress.

(c) On determination of proved developed reserves, associated acquisition costs are transferred to Property, Plant & Equipment as Oil & Gas assets.

(d) Acquisition cost relating to an exploratory well that is determined to have no proved reserves and its status is decided as dry or of no further use for exploration purpose, is charged as expenses. In such cases land value forming part of acquisition cost, a nominal amount of '' 100 per bigha is transferred to Freehold land under Property, Plant & Equipment.

(e) Cost for retaining the mineral interest in properties like lease carrying cost, license fees & other cost are charged as expense when incurred.

(iii) Exploration & Evaluation Cost (E&E cost):

(a) Geological and geophysical costs, including seismic surveys for exploration purposes are expensed as incurred.

(b) Costs including allocated depreciation on support equipment and facilities involved in drilling and equipping exploratory and appraisal wells and cost of exploratory-type

drilling stratigraphic test wells are initially shown as Exploration & Evaluation Assets (Intangible) till the time these are either transferred to Property, Plant & Equipment as Oil & Gas assets on establishment of Proved Developed Reserves or charged as expense when determined to be dry or of no further use.

(c) E&E costs related to each exploratory well are not carried over unless it could be reasonably demonstrated that there are indications of sufficient quantity of reserves and activities are firmly planned in near future for further assessing the reserves and economic & operating viability of the project. Costs of written off exploratory wells are not reinstated in the books even if they start producing subsequently.

1.10.2 Development Cost

Costs that are attributable to development activities including production and processing plant & facilities, service wells including allocated depreciation on support equipment and facilities are initially shown under Capital Work in Progress as Development Cost till such time they are capitalized as Oil & Gas Asset under Property, Plant & Equipment on establishment of Proved Developed Reserves. Cost of dry development well, if any is also capitalized as Oil & Gas Asset under Property, Plant & Equipment upon completion of the well.

1.10.3 Production Cost

Production Cost consists of direct and indirect costs incurred to operate and maintain wells and related equipment and facilities, including depreciation and applicable operating cost of support equipment and facilities.

1.10.4 Side-Tracking Expenditure

In case of exploratory wells, the cost of abandoned portion of side tracked well is charged off to the Statement of Profit and Loss statement. In case of development wells, the entire cost of abandoned portion and side- tracking is capitalized. In case of existing producing wells, the cost of side - tracking is capitalized if it increases the proved developed reserves, otherwise is charged off to Statement of Profit and loss.

1.11.0 Research & Development Expenditure

All revenue expenditure incurred for Research & Development Projects / Schemes, net of grants-in-aid

(other than those related to asset) if any, are charged to

the Statement of Profit and Loss.

1.12.0 Property, plant and equipment (PPE)

(i) An item of property, plant and equipment is recognized by the company as an asset if it is probable that future economic benefits associated with the items will flow to the entity and the cost of the items can be measured reliably.

(ii) Property, plant and equipment are stated at cost, less accumulated depreciation, depletion and impairment losses. The initial cost of an asset comprises its purchase price including import duties and non-refundable purchase taxes or construction cost, any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation wherever applicable and eligible borrowing costs. The purchase price or construction cost is the aggregate amount paid / payable and the fair value of any other consideration given to acquire the asset. Assets in the course of construction are initially kept under assets under construction and capitalized when the assets are available for use in the manner as intended by the management.

(iii) Items such as spare parts, stand-by equipment and servicing equipment which meet the definition of Property, Plant and Equipment are capitalised. Other spare parts are carried as inventory and recognized in the Statement of Profit and Loss on consumption. Cost of day-to-day servicing of property, plant and equipment are recognized in the Statement of Profit and Loss as incurred. Major shut-down and overhaul expenditure is capitalized as the activities undertaken to improve the future economic benefits expected to arise from the asset. Where an asset or part of an asset that was separately depreciated is replaced and it is probable that future economic benefits associated with the item will flow to the Company, the expenditure is capitalized and the carrying amount of the replaced asset is derecognized. Inspection costs associated with major maintenance programs from which future economic benefits are expected to flow, are capitalized and amortized over the period to the next inspection.

(iv) Technical know-how / license fee relating to plants/ facilities and specific software that are integral part of the related hardware are capitalised as part of cost of the underlying asset.

(v) Oil and gas assets which comprise of producing wells, related acquisition cost and production facilities are depleted using a unit-of-production method. The cost of producing wells andproduction facilities net of salvage value are depleted over proved developed reserves. Acquisition cost is depleted over proved reserves. Rate of depletion is determined based on production from the Oil / Gas field or a group of Oil / Gas fields identified to the related reserves having homogeneous geological feature. Estimation of oil and natural gas reserves are done annually at the yearend and the impact of changes in the estimated proved reserves are dealt with prospectively by depleting the remaining carrying value of the asset.

(vi) Other property, plant and equipment excluding ''Land-freehold'' and ''Right of use (ROU) assets are depreciated based on useful life of the asset under "Written down value method" as specified in Schedule II to the Companies Act., 2013. When any part of an item of property, plant and equipment, has different useful life and cost is significant in relation to the total cost of the asset, they are accounted for and depreciated separately. Depreciation on additions / deletions during the year is provided on pro rata basis with reference to the date of additions / deletions except low value items not exceeding '' 5,000 which are fully depreciated at the time of addition. Residual value of property plant and equipments other than well asset is determined considering past experience and is upto 5% of the original cost till such asset is disposed. The residual value of well assets are determined at current cost on the basis of available technical assessment. The typical useful life of other major property, plant and equipment are as follows:

Buildings	30 to 60 years
Plant & Machinery	10 to 40 years
Furniture and fixtures	8 to 10 years
Office equipments	3 to 10 years
Vehicles	8 to 10 years
Railway siding	15 years

Depreciation on subsequent expenditure on PPE (other than of Oil and Gas Assets) arising on account of capital improvement or other factors is provided for prospectively over the remaining useful life. Depreciation on furbished/revamped PPE (other than of Oil and Gas Assets) which are capitalized separately is provided for over the reassessed useful life.

(vii) The expected useful life of property, plant and equipment other than Oil and gas assets are reviewed on an annual basis and, if necessary, impact arising out the changes in useful life are accounted for prospectively.

(viii) An item of property, plant and equipment other than Oil & Gas assets is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on de- recognition of the asset is included in the statement of Profit & Loss in the period in which the item is derecognized. Any Tangible asset other than Oil & Gas assets, when determined of no further use, is deleted from the Gross Block of assets. The deleted assets are carried as ''Assets awaiting disposal'' under Inventories at lower of '' 1000 or 5% of the original cost and the balance written down value, is charged off. Any gain or loss arising on actual sale of the asset is included in the income statement in the period in which the item is actually sold as scrap.

Oil & gas assets other than production facilities asset is derecognized when the designated oil/gas field or a group of oil/gas fields ceases to produce. Production facilities asset is derecognized either on disposal/when no future economic benefits are expected to arise from the continued use of the asset or when the designated oil/gas field or a group of oil/gas fields ceases to produce, whichever is earlier. Any gain or loss arising on derecognition of the asset including sale of salvage is included in the statement of profit and loss.

(ix) Assets provided to employees as per the Company''s internal scheme are also classified as property, plant and equipment (PPE) and recognised as an asset. Such assets are depreciated based on the useful life as defined in the internal scheme of the Company under written down value method. The useful life of such assets is different than as specified in Schedule II of the Company''s Act. The assets provided to the employees and its useful life are as follows:

Mobile Phone - 3 years

Furniture and household goods - 6 years

Soft Furniture - Fully in the year of purchase

(x) Physical verification of the property, plant and equipment (other than PPE items given to employees as per the policy of the Company) is carried out by the Company in a phased manner to cover all the items over a period of three years.

The discrepancies noticed, if any, are accounted for in the year in which such differences are found.

1.12.1 Capital Work in Progress (CWIP)

(i) Expenses exclusively attributable to capital projects and incurred during construction period are considered as capital work in progress.

(ii) Borrowing cost incurred during construction period on loans borrowed and utilised for capital projects upto the date of capitalization is considered as capital work in progress.

1.12.2 Intangible assets

Cost of intangible assets are capitalised when it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity, the cost of the asset can be measured reliably and the asset is ready for its intended use.

Intangible assets are stated at the amount initially recognized less accumulated amortization and accumulated impairment losses.

The Company follows cost model for recognition and measurement of intangible assets. Cost of right of way of land is amortized on a straight-line basis over the lower of period of such rights or useful life of the related asset for which right of way is taken. Cost of computer software is amortized over the useful life not exceeding five years from the date of capitalization.

Any intangible asset, when determined obsolete and of no further use, is written off.

1.12.3 Impairment of property, plant & equipment (PPE), E&E assets, Intangible assets other than goodwill

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant & equipment (including capital work in progress) to determine whether there is any indication that those assets have suffered an impairment loss. For this purpose, Producing fields, LPG plant, Transportation Pipeline and Renewable Energy Units (other than captive power plants) are considered as Cash Generating Units (CGU). If any such indication exists, the recoverable amount of the CGU is estimated in order to determine the extent of the impairment loss (if any). Corporate assets and common service assets are also allocated to individual cash- generating units on a reasonable and consistent basis.

Intangible assets are tested for impairment annually. Whenever there is an indication that the asset may be impaired, the recoverable amount of the asset wherever feasible is estimated in order to determine the extent of the impairment loss (if any).

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 a CGU is estimated to be less than its carrying amount, the carrying amount of the asset or group of assets covered under the CGU is reduced to its recoverable amount. An impairment loss is recognized in the statement of profit and loss.

E&E Assets are reviewed for indicators of impairment as per Ind AS 106 and if events and circumstances suggest, impairment loss is provided for and carrying amount is reduced accordingly.

When an impairment loss is subsequently reversed, the carrying amount of the asset or group of assets covered under the CGU is increased to the revised estimate of its recoverable amount, up to the carrying amount that would have been determined had no impairment loss been recognized for the asset or group of assets covered under the CGU in prior years. A reversal of an impairment loss is recognized in the Statement of Profit and Loss.

1.13.0 Inventories

Inventory of Finished goods of Crude Oil, Liquefied Petroleum Gas (LPG) and LPG condensate are valued at cost determined on absorption costing method basis or net realizable value, whichever is lower, as per Ind AS2. Cost of finished goods is determined based on direct cost and directly attributable services cost including depreciation & depletion. The value of such inventories includes excise duty and royalty (wherever applicable). Net realizable value represents the estimated selling price for inventories less all costs necessary to affect the sale.

Crude oil in unfinished condition in the flow line up to Group Gathering Station and Natural Gas in Pipeline are not valued, as these pipeline fills are necessary for the operation of the facility. Crude oil in semi-finished condition in group gathering station are not valued as the same is not measurable.

Inventory of stores and spares including capital stores are valued at weighted average cost or net realizable value whichever is lower, as per Ind AS 2. Obsolete / unserviceable items, as and when identified, are written off. Any item of stores and spares including those in Storage Locations which have not moved for last four years as on date of Balance Sheet are identified as slow-moving items for which a provision of 95% of the cost is made.

Renewable Energy Certificates (REC) received based on generation of renewable energy certified by the competent authority, held for trading are not valued.

1.14.1 Provisions

Provisions are recognized when the Company has a present obligation as a result of a past event and it is probable that the Company will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognized 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. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value as on the reporting date of those cash flows (when the effect of the time value of money is material).

1.14.2 Decommissioning and restoration obligations

Full eventual liabilities towards costs relating to assets retirement obligations are recognized when the Company has an obligation to plug and abandon a well, dismantle and remove a facility or an item of plant and to restore the site on which it is located, and when a reliable estimate of that liability can be made. Liabilities towards costs relating to dismantling, abandoning and restoring well sites and associated Production Facilities are recognized at the commencement of drilling a well or when facilities are installed, as the case may be. The amount recognized is the present value of the estimated future expenditure determined in accordance with local conditions and requirements at current prices and escalated using appropriate inflation rate till the expected date of decommissioning and discounted using appropriate risk-free discount rate.

An amount equivalent to the decommissioning liability provision is recognized as part of the corresponding PPE, CWIP or Exploration & Evaluation Asset (E&E) as the case may be.

Liability for decommissioning cost is updated annually based on the technical assessment available at current costs. The unwinding of the discount is included as a finance cost. Any change in the present value of the estimated decommissioning provision other than unwinding of discount is adjusted to decommissioning provision and added to or deducted from the cost of the asset in the current period and is considered for depreciation (depletion) prospectively. In case, reversal of decommissioning provision exceeds the

corresponding carrying value of the related assets, the excess amount is recognized in the Statement of Profit & Loss.

The actual cost incurred on settlement of the obligation is adjusted against the liability and the ultimate gain or loss is recognized in the Statement of Profit and Loss, when the designated oil/gas field or a group of oil/gas fields ceases to produce.

1.15.0 Investments in subsidiaries, associates and joint ventures

The Company measures its investments in subsidiaries, associates and joint ventures at cost less impairment.

1.16.0 Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

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 is appropriate, on initial recognition.

1.16.1 Financial assets

1.16.1.1 Investment/Disinvestment in Securities

All regular purchases or sales of financial assets are recognized and de-recognized on a trade date basis or investment date as the case may be.

All recognized financial assets are subsequently measured in their entirety either at amortized cost or fair value, depending on the classification of the financial assets

1.16.1.1.1 Classification of financial assets

(i) Debt instruments that meet the following conditions are subsequently measured at amortized cost less impairment loss (except for debt investments that are designated as at Fair Value Through Profit or Loss (FVTPL) on initial recognition):

a) the asset is held within a business model whose objective is to hold assets till maturity in order to collect contractual cash flows; and

b) The contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(ii) Debt instruments that meet the following conditions are subsequently measured at Fair Value Through Other Comprehensive Income (except for debt investments that are designated as at FVTPL on initial recognition):

a) the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and

b) The contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(iii) Debt instruments that do not meet the criteria of amortized cost or Fair Value through Other Comprehensive Income (FVTOCI) are measured at FVTPL.

(iv) All other financial assets are subsequently measured at fair value through Profit or Loss.

1.16.1.1.2 Amortized cost and Effective interest method

The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that equates by discounting estimated future cash flows (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Income is recognized in the statement of profit & loss under investment income on an effective interest basis for debt instruments other than those financial assets classified as FVTPL.

1.16.1.1.3 Investments in equity instruments at Fair Value Through Other Comprehensive Income (FVTOCI)

On initial recognition, the Company can make an irrevocable election (on an instrument-by-instrument basis) to present the subsequent changes in fair value in other comprehensive income for equity instruments that are not held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity under subhead Equity instruments through other comprehensive income. The cumulative gain or loss is not reclassified to profit or loss on disposal of the investments.

Dividends on these investments in equity instruments are recognized in the Statement of Profit and Loss when the Company''s right to receive the dividends is established and it does not represent a recovery of part of cost of the investment.

1.16.1.2 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand, including offsetting bank overdrafts, and short-term highly liquid investments that are readily convertible to known amounts of cash, are subject to an insignificant risk of changes in fair value and have a maturity of three months or less from the acquisition date.

1.16.1.3 Trade receivables

Trade receivables are recognized initially at fair value based on transaction price and subsequently at the amortized cost less any impairment.

1.16.1.4 Impairment of financial assets

The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since its initial recognition. If the credit risk on a financial instrument has not increased significantly since its initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12- month expected credit losses.

However, for trade receivables or contract assets that result in relation to revenue from contracts with customers, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

1.16.1.5 De-recognition of financial assets

The Company de-recognizes 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 de-recognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset.

1.16.2 Financial liabilities and equity instruments

1.16.2.1 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 recognized at the proceeds received, net of direct issue costs.

1.16.2.2 Financial liabilities

All financial liabilities are subsequently measured at amortized cost using the effective interest method or at FVTPL. However, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.

1.16.2.2.1 Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL.

1.16.2.2.2 Financial liabilities subsequently measured at amortized cost

Financial liabilities that are not held-for-trading and not designated as at FVTPL are measured at amortized cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortized cost are determined based on the effective interest method. Interest expense that is not capitalized as part of costs of an asset is included in the ''finance costs'' line item.

The effective interest me

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Mar 31, 2021

NOTE-1: Significant accounting policies

1.1.0 Company Overview

Oil India Limited (''OIL'' or ''the Company'') is engaged in exploration, development and production of crude oil & natural gas, production of LPG, transportation of crude oil & natural gas and generation of renewable energy. The Company is a public limited Company incorporated in India having its registered office at Duliajan, District Dibrugarh, Assam, Pin-786602. The Company''s shares are listed and traded in BSE and National Stock Exchange of India Limited.

1.1.1 Application of new Indian Accounting Standards

New accounting standards issued under section 133 of the Companies Act notified by the Ministry of Corporate Affairs (MCA) under the Companies (Indian Accounting Standards) Rules, 2015 are appropriately applied in preparation of Financial Statements.

1.1.2 Statement of compliance

The financial statements have been prepared in accordance with the provisions of Companies Act, 2013 and in compliance with the Indian Accounting Standards (Ind AS) issued by the Ministry of Corporate Affairs notified under the Companies (Indian Accounting Standards) Rules,2015 as amended. The Ind ASs prescribed under section 133 of the Companies Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting standards)Amendment Rules, 2016.

1.1.3 Basis of preparation

The financial statements are prepared under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fairvalues.

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, regardless of whether that price is directly observable orestimated using anothervaluation technigue. In estimating the fair value of an asset or a liability, the Company takes into account the

characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date on such basis as provided under Ind AS 113.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard reguires a change in the accounting policy hitherto in use.

As the operating cycle cannot be identified in normal course due to the special nature of industry, the same has been assumed to have duration of 12 months. Accordingly, all assets and liabilities have been classified as current or non- current as per the Company''s operating cycle and other criteria set out in Ind AS-1 "Presentation of Financial Statements" and 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 crore except otherwise stated.

1.1.4 Use of estimates

In preparing the Standalone Financial Statements, in conformity with the accounting policies of the Company, management is reguired to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of the contingent liabilities as at the date of the financial statements, the amount of revenues and expenditures during the reported period and notes to the financial statements. Actual results could differ from those estimates, any revision to such estimates is recognized in such period in which the same is determined and if material, their effects are disclosed in the notes to the financial statements.

1.1.5 Major judgments, assumptions and accounting estimates

a. Estimation of oil and gas reserves

The estimation of oil and gas reserves is key factor in the in accounting for oil and gas producing activities. Oil and gas reserves are estimated by analysis of geosciences

and engineering data using Deterministic Method. Production pattern analysis, number of additional wells to be completed, application of recovery technigues, validity of mining lease agreements, agreements/MOU for sales etc. influence the estimation of reserves. Unit-of-production depreciation, depletion and amortization charges are principally measured based on management''s estimates of proved developed oil and gas reserves. Also, exploration drilling costs are categorized as Exploration and Evaluation Assets pending the results of further exploration or appraisal activity, which may take several years to complete and before any related proved reserves can be booked.

b. Impairment of assets

As part of the determination of the recoverable value of assets of cash generating units for impairment, the estimates, assumptions and judgments mainly concern oil and gas pricesscenarios, operating costs, production volumes and oil and gas proved & probable reserves. The discount rate used for estimating the value in use is reviewed annually. Changes in assumptions could affect the carrying amounts of assets, and any impairment losses and reversals will affect the revenues.

c. Employee benefits

The benefit obligations and plan assets can be subject to significant volatility due to changes in market values and actuarial assumptions. These assumptions vary between different pension plans and thus take into account market conditions. They are determined following actuarial valuation method certified by external independent actuarial valuer. The assumptions for each plan are reviewed half-yearly and annually and adjusted if necessary to reflect changes from the experience and actuarial advices.

d. Asset retirement obligations

Asset retirement obligations, which resultfromalegal or constructive obligation, are recognized based on a reasonable estimate in the period in which the obligation arises. This estimate is based on information available in terms of costs and work program. It is regularly reviewed to take into account the changes in laws and regulations, the estimated useful life of fields based on proved and probable oil and gas reserves and current production off-take, the analysis of site conditions and technologies. Decommissioning Liability provision may differ due to changes in the aforesaid factors. The risk

adjusted discount rate used for estimating the present value of obligation is reviewed annually.

e. Taxation

Tax liabilities are recognized when it is considered probable that there will be a future outflow of funds to a taxing authority. In such cases, provision is made for the amount that is expected to be settled, where this can be reasonably estimated. This reguires the application of judgment as to the ultimate outcome, which can change over time depending on facts and circumstances. A change in estimate of the likelihood of a future outflow and/or in the expected amount to be settled would be recognized in income in the period in which the change occurs.

Deferred tax assets are recognized only to the extent it is considered probable that those assets will be recoverable. This involves an assessment of when those assets are likely to reverse, and a judgment as to whether or not there will be sufficient taxable profits available to offset the assets when they do reverse. This reguires assumptions regarding future profitability and is therefore inherently uncertain. To the extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognized in respect of deferred tax assets as well as in the amounts recognized in income in the period in which thechangeoccurs.

1.2.0 Revenue recognition

1.2.1 Revenue from contracts with customers

The Company derives revenues primarily from sale of products such as Crude Oil, Natural Gas, Liguefied Petroleum Gas (LPG), Condensate, Renewable Energy and sale of services such as Pipeline Transportation Services.

Revenue from contracts with customers is recognized at the point in time the Company satisfies a performance obligation by transferring control of a promised product or service to a customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for the sale of products and service, net of discount, taxes or duties collected on behalf of government and Company''s share of profit petroleum paid to Government of India(GOI).

The transfer of control on sale of Crude Oil, Natural Gas and Liguefied Petroleum Gas (LPG) and Condensate

occurs either at the point of delivery or the point of receipt, where usually the title is passed and the customer takes physical possession, depending upon the contractual conditions. Any retrospective revision in prices is accounted for in the year of such revision.

Revenue in respect of contractual short lifted quantity of gas is recognized when there is reasonable certainty regarding its ultimate collection i.e. when the customer''s right to volumes is expired.

Sale and transportation of crude oil and natural gas are based on mutually agreed terms between the parties/governed by the Government directives issued from time to time. Subsequent changes in terms, if any, are recognized in the period of change. Such retrospective revision in prices is not determinable at thetimeof sale.

1.2.2 Contract liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer or in case of dispute, penalties have been raised on the entity by the contracting party. If a customer pays consideration before the Company transfers promised goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due(whichever is earlier).

The company recognises contract liability for consideration received for short lifted quantity of gas under take or pay arrangements for which the customer has right to take related volume in future (i.e. unsatisfied performance obligations) and for the penalties that maybe raised by the contracting party in case of a dispute and reports these amounts as advances from customers or penalties that maybe payable in future in the balance sheet. The un-accrued amounts are not recognised as revenue till all related performance obligations are fulfilled or the customer''s right to the volumes isexpired.

1.2.3 Other operating revenue

(i) Claims on Central Government / Petroleum Planning & Analysis Cell (PPAC) towards gas pool revenue are accrued based on quantity delivered to the customers at discounted price, in respect of which revenue is recognized when collectability of the receivable is reasonably certain

(ii) Revenue from sale of Renewable Energy Certificates (REC) is recognized on sale of the certificates through the Exchange i.e. when the receivable is reasonably certain.

1.2.4 Other income

(i) Dividend income from investments is recognized when the Company''s right to receive payment is established.

(ii) Interest income is recognized on a time proportion basis taking into account the amount outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through expected life of the financial asset to that asset''s net carrying amount on initial recognition. Interest on income tax refund is accounted for upon finalisation of assessments.

(iii) Insurance claim other than that for transit loss of stores items are accounted for on final acceptance bythe Insurance Company.

(iv) Revenue on account of reimbursable subsidies/ grants and interest on delayed realization from customers are recognized when there is certainty of ultimaterealization.

(v) Recovery of liquidated damages is recognized in the Statement of Profit & Loss as income at the time of occurrence except in case of Joint Venture Contracts (JVC) which are governed by the respective Production Sharing/Revenue Sharing Contracts. In case of return/refund of the liquidated damages, the same is accounted for as other expenses. In case of any dispute over the liquidated damages, provision is created in the accounts.

1.3.0 Leases

1.3.1 The Company as lessor

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized as expense on a

straight-line basis over the lease term on the same basis asleaseincome.

1.3.2 The Company as lessee

The company has applied Ind AS 116 "Leases" to service contracts of equipments, land, buildings, vehicles, etc. to evaluate whether these contracts contains lease or not. Based on evaluation of the terms and conditions of the arrangements, the Company has evaluated such arrangements to be leases.

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

(i) the contact involves the use of an identified asset

(ii) the Company has right to obtain substantially all of the economic benefits from use of the asset through the period of the lease and (iii)the Company has the right to direct the use of the asset.

Leaseterm

The Company determines the lease term as the noncancellable period of a lease, togetherwith both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease.

Recognition

Right of use asset:

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.

Lease liability:

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.

Depreciation:

The right-of-use assets is measured at cost less any accumulated depreciation. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use assets.

If ownership of the underlying asset is transferred or the purchase option is exercised by the company, it shall depreciate over the useful life of the asset.

Finance cost on lease liability:

Interest on the lease liability in each period during the lease term is the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability. 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 on "Borrowing costs".

Non lease component:

The Company''s contracts involve a number of additional services and components including personnel cost, maintenance, drilling related activities, consumables and other items. In most of such contracts, the additional services/non-lease components constitute significant portion of the overall contract value. Where the additional services/non-lease components are not separately priced, the consideration paid has been allocated based on the relative stand-alone prices of the lease and non-lease components. These non - lease components are not included in the measurement of lease liability.

Reassessment of lease liability:

The Company shall re-measure the lease liability by discounting the revised lease payments using a revised discountrate, if either:

(i) There is a change in the lease term. The Company shall determine the revised lease payments on the basis of therevised leaseterm; or

(ii) There is a change in the assessment of an option to purchase the underlying asset.

Impairment loss of the underlying asset:

The Companyfollows Ind AS 36 Impairment of Assets to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Short term lease:

Leases for which lease term ends within 12 months is classified as short-term leases. The Company recognizes the lease rental payment associated with short term lease as expense in the Statement of Profit & Loss.

1.4.0 Foreign currency transactions and translations

The functional currency of the Company is the Indian Rupee. The financial statements are presented in Indian Rupees.

(i) In preparing the financial statements of the Company, transactions in currencies other than the entity''s functional currency (foreign currencies) are recognized 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 retranslated at the closing rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rate prevailing at the date when the fair value was measured. Nonmonetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

(ii) Transaction gains and losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled. Revenue, expense and cash-how items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction.

(iii) Exchange differences on monetary items are recognized in the statement of profit and loss in the period in which they arise except for:

(a) Exchange differences on foreign currency borrowings relating to assets under construction

for future productive use, cost of which are included in the cost of those assets are regarded as an adjustment to interest costs on those foreign currency borrowings;

(b) In accordance with paraD13AAof IndASIOI, Firsttime Adoption of Indian Accounting Standards the Company continues to exercise policy adopted under previous IGAAP and accordingly exchange differences on long-term foreign currency monetary items relating to acguisition of depreciable and other assets were adjusted to the carrying cost of the assets and depreciated over the balance life of the assets and in other cases, exchange differences were accumulated in a "Foreign Currency Monetary Item Translation Difference Account" and amortized over the balance period of such long term foreign currency monetary item by recognition as income or expense in each of such periods in respect of items recognized in the financial statement for the period ending immediately before the beginning of the first Ind AS financial reporting period as per previous GAAP i,e; 31 March 2016 as reported date.

1.5.0 Borrowing costs

(i) Borrowing costs directly attributable to the acguisition or construction of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use and also includes exchange difference arising from Foreign Currency borrowings to the extent that they are regarded as an adjustment to interest cost.

(ii) All other borrowing costs are recognized in the statement of profit and loss in the period in which theyareincurred.

1.6.0 Government grants

(i) Government grants are recognized when there is reasonable assurance that the Company will comply with the conditions attached to them and that the grantswill bereceived.

(ii) Government grants are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes as expenses the related costs

for which the grants are intended to compensate. Government grants with the primary condition that the Company should purchase construct or otherwise acguire non-current assets are recognized as deferred revenue in the balance sheet and transferred to the statement of profit and loss on a systematic and rational basis over the useful life of the related assets.

1.7.0 Employee benefits

1.7.1 Retirement benefit costs and termination benefits:

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered service entitling them to the contributions.

The cost of providing benefits under defined benefit plans (such as gratuity, leave encashment, postretirement medical benefits, defined benefit pension schemes) is determined separately for each plan using the projected unit credit method, with actuarial valuations being carried out half-yearly and annually. This attributes the increase in present value of the defined benefit obligation resulting from employee service in the current period to determine current service cost. The current service cost as stated above and past service costs, resulting from either a plan amendment (a reduction in future obligations as a result of a material reduction in the number of employees covered by the plan), are recognized in the statement of profit and loss under''employee benefits expense''.

Net interest which is recognized in the statement of profit and loss under ''employee benefits expense'' represents the net change in present value of plan obligations and the value of plan assets resulting from the passage of time, and is determined by applying the discount rate to the present value of the benefit obligation at the start of the year, and to the fair value of plan assets at the beginning of the year, taking into account expected changes in the obligation or plan assets during theyear.

Re-measurement of the defined benefit liability and asset, comprising actuarial gains and losses, and the return on plan assets(excluding amounts included in net interest described above) are recognized in other comprehensive income in the period in which they occur and are not subseguently reclassified to the statement of profitand loss.

The defined benefit pension plan surplus or deficit recognized in the balance sheet for each plan comprises the difference between the present value of the defined benefit obligation and thefairvalue of plan assets out of which the obligations are to be settled directly. Defined benefit pension plan surpluses are only recognized to the extent they are recoverable, naturally by way of refund or reductions in future contributions to the plans.

1.7.2 Short-term and other long-term employee benefits

A liability is recognized for benefits accruing to employees in respect of wages and salaries (including performance related pay), annual leave, sick leave and social security contribution in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

1.8.0 Taxation

Income tax expense represents the aggregate of current taxand deferred tax.

1.8.1 Current tax

Current tax is the amount of income tax payable based on taxable profit for the period. 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 and the tax laws that have been enacted or substantively enacted by the end of the reporting period.

After an appeal is decided by appellate authority, the corresponding appeal effect is given in the accounts only after receipt of appeal effect order from the Income TaxDepartment.

1.8.2 Deferred tax

(i) Deferred tax 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 recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differencescan be utilized.

(ii) 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 the benefits of all or part of the deferred tax asset to be utilized. Any such reduction shall be reversed to the extent when it becomes probable thatsufficienttaxable profitwill beavailable.

(iii) 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 realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

(iv) Minimum Alternate Tax(''MAT'') under the provisions of the Income Tax Act, 1961 is recognized as current tax in the statement of profit and loss. The credit available under the Income Tax Act, 1961 in respect of MAT paid is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the period for which the MAT credit recognized as an asset is reviewed at each balance sheet date and written down to the extent the aforesaid convincing evidence no longer exists.

1.8.3 Current and deferred tax expenses for the year

Current and deferred tax are recognized in the statement of profit and loss, except when they relate to items that are recognized in other comprehensive income, in which case, the current and deferred tax are also recognized in other comprehensive income.

1.9.0 Oil and gas exploration, evaluation and development expenditure

The Company follows the Successful Efforts Method (SEM) of accounting in respect of its oil and gas exploration and production activities which is in accordance with Ind AS 106 and the "Guidance Note on Accounting for Oil & Gas Producing Activities (Ind AS)" issued by the Institute of Chartered Accountants of India.

1.9.1 Pre-Acquisition, Acquisition, Exploration & Evaluation Costs

(i) Pre-Acguisition costs: Pre-Acguisition costs of revenue nature incurred prior to obtaining the rights to explore, develop and produce Oil & Gas like data collection & analysis cost etc. are expensed to the Statement of Profit and Loss in the year of incidence.

(ii) Acquisition costs:

(a) Acguisition costs include cost of land acguired for drilling operations including cost of temporary occupation of the land, crop compensation paid to farmers, registration fee, legal cost, signature bonus, brokers'' fees, consideration for farm-in arrangements and other costs incurred in acguiring mineral rights.

(b) These costs are initially recorded under Exploration & Evaluation Assets (Intangible) except cost of land acguired for drilling operations which are shown as Acguisition cost-landundercapitalworkin progress.

(c) On determination of proved developed reserves, associated acguisition costs are transferred to Property, Plant & Eguipment as Oil & Gas assets.

(d) Acguisition cost relating to an exploratory well that is determined to have no proved reserves and its status is decided as dry or of no further use for exploration purpose, is charged as expenses. In such cases land value forming part of acguisition cost, a nominal amount of 100 per bigha is transferred to Freehold land under Property, Plant& Eguipment.

(e) Cost for retaining the mineral interest in properties like lease carrying cost, license fees & other cost are charged as expense when incurred.

(iii) Exploration & Evaluation Cost (E&E cost):

(a) Geological and geophysical costs, including seismic surveys for exploration purposes are expensed as incurred.

(b) Costs including allocated depreciation on support eguipment and facilities involved in drilling and eguipping exploratory and appraisal wells and cost of exploratory-type drilling stratigraphic test wells are initially shown as Exploration& Evaluation Assets (Intangible) till the time these are either transferred to Property, Plant & Eguipment as Oil & Gas assets on establishment of Proved Developed Reserves or charged as expense when determined to be dry or of nofurtheruse.

(c) E&E costs related to each exploratory well are not carried over unless it could be reasonably demonstrated that there are indications of sufficient guantity of reserves and activities are firmly planned in near future for further assessing the reserves and economic & operating viability of the project. Costs of written off exploratory wells are not reinstated in the books even if they start producing subseguently.

1.9.2 Development Cost

Costs that are attributable to development activities including production and processing plant & facilities, service wells including allocated depreciation on support eguipment and facilities are initially shown under Capital Work in Progress as Development Cost till such time they are capitalized as Oil & Gas Asset under Property, Plant &Eguipment on establishment of Proved Developed Reserves. Cost of dry development well, if any is also capitalized as Oil & Gas Asset under Property, Plant & Eguipment upon completion of the well.

1.9.3 Production Cost

Production Cost consists of direct and indirect costs incurred to operate and maintain wells and related eguipment and facilities, including depreciation and applicable operating cost of support eguipment and facilities.

1.9.4 Side-Tracking Expenditure

In case of exploratory wells, the cost of abandoned

portion of side tracked well is charged off to the Statement of Profit and Loss statement. In case of development wells, the entire cost of abandoned portion and side- tracking is capitalized. In case of existing producing wells, the cost of side-tracking is capitalized if it increases the proved developed reserves, otherwise is charged off to Statement of Profit and loss.

1.10.0 Research & Development Expenditure

All revenue expenditure incurred for Research & Development Projects/Schemes, net of grants-in-aid (other than those related to asset) if any, are charged to theStatement of Profitand Loss.

1.11.1 Property, plant and equipment (PPE)

(i) An item of property, plant and eguipment is recognized by the company as an asset if it is probable that future economic benefits associated with the items will how to the entity and the cost of the items can be measured reliably.

(ii) Property, plant and eguipment are stated at cost, less accumulated depreciation and accumulated impairment losses. The initial cost of an asset comprises its purchase price including import duties and non-refundable purchase taxes or construction cost, any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation wherever applicable and eligible borrowing costs. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acguire the asset. Assets in the course of construction are initially kept under assets under construction and capitalized when the assets are available for use in the manner as intended by the management.

(iii) Items such as spare parts, stand-by eguipment and servicing eguipment which meet the definition of Property, Plant and Eguipment are capitalised. Other spare parts are carried as inventory and recognized in the Statement of Profit and Loss on consumption. Cost of day-to-day servicing of property, plant and eguipment are recognized in the Statement of Profit and Loss as incurred. Major shut-down and overhaul expenditure is capitalized as the activities

Vehicles	8 to 10 years
Railwaysliding''s	15years

undertaken to improve the future economic benefits expected to arise from the asset. Where an asset or part of an asset that was separately depreciated is replaced and it is probable that future economic benefits associated with the item will how to the Company, the expenditure is capitalized and the carrying amount of the replaced asset is derecognized. Inspection costs associated with major maintenance programs from which future economic benefits are expected to how, are capitalized and amortized over the period to the next inspection.

(iv) Oil and gas assets which comprise of producing wells, related acguisition cost and production facilities are depleted using a unit-of-production method. The cost of producing wells and production facilities are depleted over proved developed reserves. Acguisition cost is depleted over proved reserves. Rate of depletion is determined based on production from the Oil/Gas held ora group of Oil/Gas fields identified to the related reserves having homogeneous geological feature. Estimation of oil and natural gas reserves are done annually at the yearend and the impact of changes in the estimated proved reserves are dealt with prospectively by depleting the remaining carrying value of the asset.

(v) Other property, plant and eguipment are depreciated based on useful life of the asset under "Written down value method" as specified in Schedule II to the Companies Act., 2013. When any part of an item of property, plant and eguipment, has different useful life and cost is significant in relation to the total cost of the asset, they are accounted for and depreciated separately. Depreciation on additions / deletions during the year is provided on pro rata basis with reference to the date of additions / deletions except low value items not exceeding ? 5,000 which are fully depreciated at the time of addition. The typical useful life of other major property, plant and eguipment are as follows:

Buildings	30 to 60 years
Plant& Machinery	10 to AOyears
Furniture and fixtures	8to10years
Office eguipments	3to10years

(vi) The expected useful life of property, plant and eguipment other than Oil and gas assets are reviewed on an annual basis and, if necessary, impact arising out the changes in useful life are accounted for prospectively.

(vii) An item of property, plant and eguipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on de- recognition of the asset is included in the income statement in the period in which the item is derecognized. Any Tangible asset, when determined of no further use, is deleted from the Gross Block of assets. The deleted assets are carried as Assets awaiting disposal''under Inventories at lower of ?1000 or 5% of the original cost and the balance written down value, ischarged off.

(viii) Assets provided to employees as per the Company''s internal schemearealso classified as Property, plant and eguipment (PPE) and recognised as an assets. Such assets are depreciated based on the useful life as defined in the internal scheme of the Company under written down value method. The useful life of such assets are different than as specified in Schedule II of the Company''s Act. The assets provided to the employees and its useful life are as follows:

Mobile Phone-3 years

Furniture and household goods-6 years

Soft Furniture - Fully in the year of purchase

(ix) Physical verification of the property, plant and eguipment is carried out by the Company in a phased manner to cover all the items over a period of three years. The discrepancies noticed, if any, are accounted for in the year in which such differences arefound.

1.11.2 Intangible assets

Cost of intangible assets are capitalised when it is probable that the expected future economic benefits that are attributable to the asset will how to the entity,

the cost of the asset can be measured reliably and the asset is ready for its intended use.

Intangible assets include expenditure on computer software, and right to way/right of use of land and are stated at the amount initially recognized less accumulated amortization and accumulated impairmentlosses.

The Company follows cost model for recognition and measurement of intangible assets. Cost of right of use / right of way of land is amortized on a straight line basis over the lower of period of such rights or useful life of the related asset for which right of use / right of way is taken. Cost of computer software is amortized over the useful life not exceeding five years from the date of capitalization.

Any intangible asset, when determined of no further use, iswritten off.

1.11.3 Impairment of property, plant & equipment (PPE), E&E assets, Intangible assets other than goodwill.

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant & eguipment (including capital work in progress) to determine whether there is any indication that those assets have suffered an impairment loss. For this purpose Producing fields, LPG plant, Transportation Pipeline and Renewable Energy Units (other than captive power plants) are considered as Cash Generating Units (CGU). If any such indication exists, the recoverable amount of the CGU is estimated in order to determine the extent of the impairment loss (if any). Corporate assets and common service assets are also allocated to individual cash- generating units on a reasonable and consistent basis.

Intangible assets are tested for impairment annually. Whenever there is an indication that the asset may be impaired, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

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 hows 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 hows have not been adjusted. If the recoverable amount of a CGU is estimated to be less than its carrying amount, the carrying amount of the asset or group of assets covered under the CGU is reduced to its recoverable amount. An impairment loss is recognized in the statement of profit and loss.

E&E Assets are reviewed for indicators of impairment as per Ind AS 106 and if events and circumstances suggest, impairment loss is provided for and carrying amount is reduced accordingly.

When an impairment loss is subseguently reversed, the carrying amount of the asset or group of assets covered undertheCGU is increased to the revised estimate of its recoverable amount, upto the carrying amount that would have been determined had no impairment loss been recognized for the asset or group of assets covered under the CGU in prior years. A reversal of an impairment loss is recognized in the Statement of Profit and Loss.

1.12.0 Inventories

Inventory of Finished goods of Crude Oil, Liguehed Petroleum Gas (LPG) and LPG condensate are valued at cost or net realizable value, whichever is lower, as per Ind AS 2. Cost of finished goods is determined based on direct cost and directly attributable services cost including depreciation & depletion. The value of such inventories includes excise duty and royalty (wherever applicable). Net realizable value represents the estimated selling price for inventories less all costs necessary to effect the sale.

Crude oil in unfinished condition in the how line up to Group Gathering Station and Natural Gas in Pipeline are not valued, as these pipeline fills are necessary for the operation of the facility. Crude oil in semi-finished condition in group gathering station are not valued as the same is not measurable.

Inventory of stores and spares are valued at weighted average cost or net realizable value whichever is lower, as per Ind AS 2. Obsolete / unserviceable items, as and when identified, are written off. Any item of stores and spares including those in Storage Locations which have not moved for last fouryearsas on date of Balance Sheet are identified as slow-moving items for which a provision of 95% of the value is made in the accounts.

Renewable Energy Certificates (REC) received based on generation of renewable energy certified by the competent authority, held for trading are not valued.

1.13.1 Provisions

Provisions are recognized when the Company has a present obligation as a result of a past event and it is probable that the Company will be reguired to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration reguired to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash hows estimated to settle the present obligation, its carrying amount is the present value of those cash hows (when the effect of the time value of money is material).

1.13.2 Decommissioning and restoration obligations

Full eventual liabilities towards costs relating to assets retirement obligations are recognized when the Company has an obligation to plug and abandon a well, dismantle and remove a facility or an item of plant and to restore the site on which it is located, and when a reliable estimate of that liability can be made. Liabilities towards costs relating to dismantling, abandoning and restoring well sites and associated Production Facilities are recognized at the commencement of drilling a well or when facilities are installed, as the case may be. The amount recognized is the present value of the estimated future expenditure determined in accordance with local conditions and reguirements at current prices and escalated using appropriate inflation rate till the expected date of decommissioning and discounted using appropriate riskfree discount rate.

An amount eguivalent to the decommissioning liability provision is recognized as part of the corresponding PPE, CWIP or Exploration & Evaluation Asset (E&E) as thecase maybe.

Liability for decommissioning cost is updated annually based on the technical assessment available at current costs. The unwinding of the discount is included as a finance cost. Any change in the present value of the estimated decommissioning provision other than

unwinding of discount is adjusted to decommissioning provision and added to or deducted from the cost of the asset in the current period and is considered for depreciation (depletion) prospectively. In case, reversal of decommissioning provision exceeds the corresponding carrying value of the related assets, the excess amount is recognized in the Statement of Profit & Loss.

The actual cost incurred on settlement of the obligation is adjusted against the liability and the ultimate gain or loss is recognized in the Statement of Profit and Loss, when the designated oil/gas field or a group of oil/gas fieldsceasesto produce.

1.14.0 Investments in subsidiaries, associates andjoint ventures

The Company measures its investments in subsidiaries, associates and joint ventures at cost less impairment.

1.15.0 Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acguisition 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 isappropriate, on initial recognition.

1.15.1 Financial assets

1.15.1.1 Investment in Securities

All regular purchases or sales of financial assets are recognized and de-recognized on a trade date basis.

All recognized financial assets are subseguently measured in their entirety either at amortized cost or fair value, depending on the classification of the financial assets

1.15.1.1.1 Classification of financial assets

(i) Debt instruments that meet the following conditions are subseguently measured at amortized cost less

impairment loss (except for debt investments that are designated as at Fair Value Through Profit or Loss (FVTPL)on initial recognition):

a) the asset is held within a business model whose objective is to hold assets till maturity in order to collect contractual cash flows; and

b) The contractual terms of the instrument give rise on specified dates to cash hows that are solely payments of principal and interest on the principal amount outstanding.

(ii) Debt instruments that meet the following conditions are subseguently measured at Fair Value Through Other Comprehensive Income (except for debt investments that are designated as at FVTPL on initial recognition):

a) The asset is held within a business model whose objective is achieved both by collecting contractual cash hows and selling financial assets; and

b) The contractual terms of the instrument give rise on specified dates to cash hows that are solely payments of principal and interest on the principal amount outstanding.

(iii) Debt instruments that do not meet the criteria of amortized cost or Fair Value through Other Comprehensive Income (FVTOCI) are measured at FVTPL.

(iv) AII other financial assets are subseguently measured at fair value through Profit or Loss.

1.15.1.1.2 Amortized cost and Effective interest method

The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash hows (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Income is recognized in the statement of profit & loss

under investment income on an effective interest basis for debt instruments other than those financial assets classified as FVTPL.

1.15.1.1.3 Investments in equity instruments at Fair ValueThroughotherComprehensivelncome(FVTOCI)

On initial recognition, the Company can make an irrevocable election (on an instrument-by-instrument basis) to present the subseguent changes in fair value in other comprehensive income for eguity instruments that are not held for trading. These elected investments are initially measured at fair value plus transaction costs. Subseguently, they are measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other eguity under subhead Eguity instruments through other comprehensive income. The cumulative gain or loss is not reclassified to profit or loss on disposal of the investments.

Dividends on these investments in eguity instruments are recognized in the Statement of Profit and Loss when the Company''s right to receive the dividends is established and it does not represent a recovery of part of cost of the investment.

1.15.1.2 Cash and cash equivalents

Cash and cash eguivalents comprise cash at bankand in hand, including offsetting bank overdrafts, and shortterm highly liquid investments that are readily convertible to known amounts of cash, are subject to an insignificant risk of changes in fair value and have a maturity of three months or less from the acguisition date.

1.15.1.3 Trade receivables

Trade receivables are recognized initially at fair value based on amounts exchanged and subseguently at the amortized costlessanyimpairment.

1.15.1.4 Impairment of financial assets

The Company measures the loss allowance for a financial instrument at an amount egual to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since its initial recognition. If the credit risk on a financial instrument has not increased significantly since its initial recognition, the Company measures the loss allowance

for that financial instrument at an amount equal to 12-month expected credit losses.

However, for trade receivables or contract assets that result in relation to revenue from contracts with customers, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

1.15.1.5 De-recognition of financial assets

The Company de-recognizes a financial asset when the contractual rights to the cash hows 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 de-recognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset.

1.15.2 Financial liabilitiesand equity instruments

1.15.2.1 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 recognized at the proceeds received, net of direct issuecosts.

1.15.2.2 Financial liabilities

All financial liabilities are subsequently measured at amortized cost using the effective interest method or at FVTPL. However, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.

1.15.2.2.1 Financial liabilitiesat FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated asat FVTPL.

1.15.2.2.2 Financial liabilities subsequently measured at amortized cost

Financial liabilities that are not held-for-trading and not designated as at FVTPL are measured at amortized cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortized cost are determined based on the effective interest method. Interest expense that is not capitalized as part of costs of an asset is included in the ''finance costs'' line item.

The effective interest method is a method of calculating theamortized cost of afinancial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments(including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

1.15.2.2.3 Financial guarantee contracts

Afinancial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.

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 thehigherof:

a) the amount of loss allowance determined in accordance with impairment requirements of Ind AS109;and

b) the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of Ind AS 115 or the amount initially recognised less, when

appropriate, the cumulative amount of finance income recognized which measured by amortizing the initial fair value of guarantee on a straight line basis over the guarantee period.

1.15.2.2.4 De-recognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognisedin profitorloss.

1.16.0 Interest in joint operations

The Company has joint operations in the nature of Production Sharing Contracts (PSCs) and Revenue Sharing Contracts(RSCs)executed with the Government of India / Government of Foreign Countries by the Company along with other entities to undertake exploration, development and production of Oil and/or Gas activities in various concessions/block/area are accounted asunder:

a) The financial statements reflect the share of the Company''s assets, liabilities and also the income and expenditure of the Joint Venture in proportion to the participating interest of the Company as per the terms of the PSCs and RSCs, on aline byline basis.

b) The revenue on account of petroleum produced and sol

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Mar 31, 2019

NOTES TO THE SEPARATE STANDALONE FINANCIAL STATEMETS

1. Significant accounting policies 1.1.1 Statement of compliance

The financial statements have been prepared in accordance with the Companies Act, 2013 and in compliance with the Indian Accounting Standards (Ind AS) issued by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules,2015 as amended.

1.1.2 Basis of preparation

These financial statements are prepared in accordance with Indian Accounting standards (Ind AS) and under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the provisions of the Companies Act, 2013 (''the Act'') (to the extent notified). The Ind ASs are prescribed under section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting standards) Amendment Rules, 2016.

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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date on such basis as provided under Ind AS 113.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

As the operating cycle cannot be identified in normal course due to the special nature of industry, the same has been assumed to have duration of 12 months. Accordingly, all assets and liabilities have been classified as current or non-current as per the Company''s operating cycle and other criteria set out in Ind AS-1 "Presentation of Financial Statements" and Schedule III to the Companies Act, 2013.

1.1.3 Use of estimates

The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. The application of accounting policies that requires critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed in Note 1.1.4. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the management becomes aware of the changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

1.1.4 Major judgments, assumptions and accounting estimates

a. Estimation of oil and gas reserves

The estimation of oil and gas reserves is key factor in the accounting for oil and gas producing activities. Oil and gas reserves are estimated by analysis of geosciences and engineering data using Deterministic Method. Production pattern analysis, number of additional wells to be completed, application of recovery techniques, validity of mining lease agreements, agreements/MOU for sales etc. influence the estimation of reserves. Unit-of-production depreciation, depletion and amortization charges are principally measured based on management''s estimates of proved developed oil and gas reserves. Also, exploration drilling costs are capitalized pending the results of further exploration or appraisal activity, which may take several years to complete and before any related proved reserves can be booked.

b. Impairment of assets

As part of the determination of the recoverable value of assets of cash generating units for impairment, the estimates, assumptions and judgments mainly concern oil and gas prices scenarios, operating costs, production volumes and oil and gas proved reserves. The discount rate used for estimating the value in use is reviewed annually. Changes in assumptions could affect the carrying amounts of assets, and any impairment losses and reversals will affect the revenues.

c. Employee benefits

The benefit obligations and plan assets can be subject to significant volatility due to changes in market values and actuarial assumptions. These assumptions vary between different pension plans and thus take into account market conditions. They are determined following actuarial valuation method certified by external independent actuarial valuer. The assumptions for each plan are reviewed annually and adjusted if necessary to reflect changes from the experience and actuarial advices.

d. Asset retirement obligations

Asset retirement obligations, which result from a legal or constructive obligation, are recognized based on a reasonable estimated in the period in which the obligation arises. This estimate is based on information available in terms of costs and work program. It is regularly reviewed to take into account the changes in laws and regulations, the estimates useful life of fields based on proved and probable oil and gas reserves and current production off-take, the analysis of site conditions and technologies, risk adjusted discount rate. Such estimates can differ from estimates due to changes in the aforesaid factors. The risk adjusted discount rate used for estimating the present value of obligation is reviewed annually.

e. Taxation

Tax liabilities are recognized when it is considered probable that there will be a future outflow of funds to a taxing authority. In such cases, provision is made for the amount that is expected to be settled, where this can be reasonably estimated. This requires the application of judgment as to the ultimate outcome, which can change over time depending on facts and circumstances. A change in estimate of the likelihood of a future outflow and/or in the expected amount to be settled would be recognized in income in the period in which the change occurs.

Deferred tax assets are recognized only to the extent it is considered probable that those assets will be recoverable. This involves an assessment of when those assets are likely to reverse, and a judgment as to whether or not there will be sufficient taxable profits available to offset the assets when they do reverse. This requires assumptions regarding future profitability and is therefore inherently uncertain. To the extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognized in respect of deferred tax assets as well as in the amounts recognized in income in the period in which the change occurs.

1.2 Revenue recognition

1.2.1 Revenue from contracts with customers

The Company derives revenues primarily from sale of products such as Crude Oil, Natural Gas, Liquefied Petroleum Gas (LPG), Condensate, Renewable Energy, sale of services such as Pipeline Transportation Services and Optical Fiber Cable (OFC) leasing and other income from Business Development services and Renewable Energy.

Effective from 1st April, 2018, the Company adopted Ind AS 115 "Revenue from Contracts with Customers" using the cumulative catch-up transition method, applied to contracts that were not completed as on 1^st April, 2018. In accordance with the cumulative catch-up transition method, the comparatives have not been retrospectively adjusted. The effect on adoption of Ind AS 115 does not have any significant impact on the retained earnings as at 1 stApril, 2018.

Revenue from contracts with customers is recognized at the point in time the Company satisfies a performance obligation by transferring control of a promised product or service to a customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for the sale of products and service, net of discount, taxes or duties collected on behalf of government and Company''s share of profit petroleum paid to Government of India (GOI).

The transfer of control on sale of Crude Oil, Natural Gas and Liquefied Petroleum Gas (LPG) and Condensate occurs either at the point of delivery or the point of receipt, where usually the title is passed and the customer takes physical possession, depending upon the contractual conditions. Any retrospective revision in prices is accounted for in the year of such revision.

Revenue in respect of contractual short lifted quantity of gas is recognized when there is reasonable certainty regarding its ultimate collection i.e. when the customer''s right to volumes is expired.

As per the Production Sharing Contracts for extracting the Oil and Gas Reserves with Government of India, out of the earnings from the exploitation of reserves after recovery of cost, a part of the revenue is paid to Government of India which is called Profit Petroleum. It is reduced from the revenue from Sale of Products as Government of India''s Share in Profit Petroleum.

1.2.2 Contract balances Contract liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer or in case of dispute, penalties have been raised on the entity by the contracting party. If a customer pays consideration before the Company transfers promised goods or services to the customer, a contract liability is recognized when the payment is made or the payment is due (whichever is earlier).

The company recognizes contract liability for consideration received for short lifted quantity of gas under take or pay arrangements for which the customer has right to take related volume in future (i.e. unsatisfied performance obligations) and for the penalties that maybe raised by the contracting party in case of a dispute and reports these amounts as advances from customers or penalties that maybe payable in future in the balance sheet. The un-accrued amounts are not recognized as revenue till all related performance obligations are fulfilled or the customer''s right to the volumes is expired.

1.2.3 Other operating revenue

(i) Claims on Central Government / Petroleum Planning

& Analysis Cell (PPAC) towards gas pool revenue are accrued based on quantity delivered to the customers at discounted price, in respect of which revenue is recognized when collectability of the receivable is reasonably certain

(ii) Revenue from sale of Renewable Energy Certificates (REC) is recognized on sale of the certificates through the Exchange i.e. when the receivable is reasonably certain.

(iii) Revenue on account of reimbursable subsidies/ grants and interest on delayed realization from customers are recognized when there is reasonable certainty of ultimate realization.

(iv) Recovery of liquidated damages is recognized in the Statement of Profit & Loss as income at the time of occurrence except in case of Joint Venture Contracts (JVC) which are governed by the respective Production Sharing Contracts. In case of return/refund of the liquidated damages, the same is accounted for as other expenses. In case of any dispute over the liquidated damages, provision is created in the accounts.

1.2.4 Other income

Dividend income from investments is recognized when the shareholder''s right to receive payment is established.

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the company and can be measured reliably. Interest income is recognized on a time proportion basis taking into account the amount outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through expected life of the financial asset to that asset''s net carrying amount on initial recognition.

Insurance claim other than that for transit loss of stores items are accounted for on final acceptance by the Insurance Company.

1.2.5 Critical accounting judgments, assumptions and key sources of estimation uncertainty

Retrospective revision in price for transportation service of crude oil

Sale and transportation of crude oil in some cases is made on provisional pricing basis where the pricing may be finalised subsequently with retrospective effect. The retrospective revision in pricing gives rise to variable consideration. The management determined that the expected amount of price revision at the time of sales is not determinable since the revised pricing of the product is based on the negotiation between the parties at the time of entering into revised contract which cannot be perceived in advance.

1.3. Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

1.3.1 The Company as lessor

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight-line basis over the lease term.

1.3.2 The Company as lessee

Operating lease payments are recognized as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

In the event that lease incentives are received to enter into operating leases, such incentives are recognized as a liability. The aggregate benefit of incentives is recognized as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.4 Foreign currency transactions and translations

The functional currency of the Company is the Indian Rupee. The financial statements are presented in Indian Rupees.

(i) In preparing the financial statements of the Company, transactions in currencies other than the entity''s functional currency (foreign currencies) are recognized 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 retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rate prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

(ii) Transaction gains and losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled. Revenue, expense and cash-flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction.

(iii) Exchange differences on monetary items are recognized in the statement of profit and loss in the period in which they arise except for:

(a) Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;

(b) In accordance with para D13AA of Ind AS 101, First time Adoption of Indian Accounting Standards the Company continues to exercise policy adopted under previous IGAAP and accordingly exchange differences on long-term foreign currency monetary items relating to acquisition of depreciable and other assets were adjusted to the carrying cost of the assets and depreciated over the balance life of the assets and in other cases, exchange differences were accumulated in a "Foreign Currency Monetary Item Translation Difference Account" and amortized over the balance period of such long term foreign currency monetary item by recognition as income or expense in each of such periods in respect of items recognized in the financial statement for the period ending immediately before the beginning of the first Ind AS financial reporting period as per previous GAAP i,e; 31 March 2016 as reported date.

1.5.0 Borrowing costs

(i) Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale and also includes exchange difference arising from Foreign Currency borrowings to the extent that they are regarded as an adjustment to interest cost.

(ii) All other borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.

1.6.0 Government grants

(i) Government grants are recognized when there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.

(ii) Government grants are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes as expenses the related costs for which the grants are intended to compensate. Government grants with the primary condition that the Company should purchase construct or otherwise acquire non-current assets are recognized as deferred revenue in the balance sheet and transferred to the statement of profit and loss on a systematic and rational basis over the useful lives of the related assets.

1.7.0 Employee benefits

1.7.1 Retirement benefit costs and termination benefits:

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered service entitling them to the contributions.

The cost of providing benefits under defined benefit plans (such as gratuity, leave encashment, postretirement medical benefits, defined benefit pension schemes) is determined separately for each plan using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. This attributes the increase in present value of the defined benefit obligation resulting from employee service in the current period to determine current service cost. The current service cost as stated above and past service costs, resulting from either a plan amendment (a reduction in future obligations as a result of a material reduction in the number of employees covered by the plan), are recognized in the statement of profit and loss under ''employee benefits expense''.

Net interest which is recognized in the statement of profit and loss under ''employee benefits expense'' represents the net change in present value of plan obligations and the value of plan assets resulting from the passage of time, and is determined by applying the discount rate to the present value of the benefit obligation at the start of the year, and to the fair value of plan assets at the beginning of the year, taking into account expected changes in the obligation or plan assets during the year.

Re-measurement of the defined benefit liability and asset, comprising actuarial gains and losses, and the return on plan assets (excluding amounts included in net interest described above) are recognized in other comprehensive income in the period in which they occur and are not subsequently reclassified to the statement of profit and loss.

The defined benefit pension plan surplus or deficit recognized in the balance sheet for each plan comprises the difference between the present value of the defined benefit obligation and the fair value of plan assets out of which the obligations are to be settled directly. Defined benefit pension plan surpluses are only recognized to the extent they are recoverable, naturally by way of refund or reductions in future contributions to the plans.

1.7.2 Short-term and other long-term employee benefits

A liability is recognized for benefits accruing to employees in respect of wages and salaries (including performance related pay), annual leave, sick leave and social security contribution in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

1.8.0 Taxation

Income tax expense represents the aggregate of current tax and deferred tax.

1.8.1 Current tax

Current tax is the amount of income tax payable based on taxable profit for the period. 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 and the tax laws that have been enacted or substantively enacted by the end of the reporting period.

1.8.2 Deferred tax

(i) Deferred tax 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 recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

(ii) 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 the benefits of all or part of the deferred tax asset to be utilized. Any such reduction shall be reversed to the extent that it becomes probable that sufficient taxable profit will be available.

(iii) 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 realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

(iv) Minimum Alternate Tax (''MAT'') under the provisions of the Income Tax Act, 1961 is recognized as current tax in the statement of profit and loss. The credit available under the Income Tax Act, 1961 in respect of MAT paid is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the period for which the MAT credit recognized as an asset is reviewed at each balance sheet date and written down to the extent the aforesaid convincing evidence no longer exists.

1.8.3 Current and deferred tax for the year

Current and deferred tax are recognized in the statement of profit and loss, except when they relate to items that are recognized in other comprehensive income, in which case, the current and deferred tax are also recognized in other comprehensive income.

1.9.0 Oil and gas exploration, evaluation and development expenditure

The Company follows the Successful Efforts Method (SEM) of accounting in respect of its oil and gas exploration and production activities in accordance with Ind AS 106 and the "Guidance Note on Accounting for Oil & Gas Producing Activities (Ind AS)" issued by the Institute of Chartered Accountants of India.

1.9.1 Pre-Acquisition, Acquisition, Exploration & Evaluation Costs

(i) Pre-Acquisition costs: Pre-Acquisition costs of revenue nature incurred prior to obtaining the rights to explore, develop and produce Oil & Gas like data collection & analysis cost etc. are expensed to the Statement of Profit and Loss in the year of incidence.

(ii) Acquisition costs:

(a) Acquisition costs include land acquired for drilling operations including cost of temporary occupation of the land, crop compensation paid to farmers, registration fee, legal cost, signature bonus, brokers'' fees, consideration for farm-in arrangements and other costs incurred in acquiring mineral rights.

(b) These costs are initially recorded under Exploration & Evaluation Assets (Intangible) except cost of land acquired for drilling operations which are shown as Acquisition cost-land under capital work in progress.

(c) On determination of proved developed reserves, associated acquisition costs are transferred to Property, Plant & Equipment as Oil & Gas assets.

(d) Acquisition cost relating to an exploratory well that is determined to have no proved reserves and its status is decided as dry or of no further use for exploration purpose, is charged as expenses. In such cases, for land value forming part of acquisition cost, a nominal amount of Rs,100 per bigha is transferred to Freehold land under Property, Plant & Equipment.

(e) Cost for retaining the mineral interest in properties like lease carrying cost, license fees & other cost are charged as expense when incurred.

(iii) Exploration & Evaluation Cost (E&E cost):

(a) Geological and geophysical costs, including seismic surveys for exploration purposes are expensed as incurred.

(b) Costs including allocated depreciation on support equipment and facilities involved in drilling and equipping exploratory and appraisal wells and cost of exploratory-type drilling stratigraphic test wells are initially shown as Exploration& Evaluation Assets (Intangible) till the time these are either transferred to Property, Plant & Equipment as Oil & Gas assets on establishment of Proved Developed Reserves or charged as expense when determined to be dry or of no further use.

(c) E&E costs related to each exploratory well are not carried over unless it could be reasonably demonstrated that there are indications of sufficient quantity of reserves and activities are firmly planned in near future for further assessing the reserves and economic & operating viability of the project. Costs of written off exploratory wells are not reinstated in the books even if they start producing subsequently.

1.9.2 Development Cost

Costs that are attributable to development activities including production and processing plant & facilities, service wells including allocated depreciation on support equipment and facilities are initially shown under Capital Work in Progress as Development Cost till such time they are capitalized as Oil & Gas Asset under Property, Plant &Equipment on establishment of Proved Developed Reserves. Cost of dry development well, if any is capitalized as Oil & Gas Asset under Property, Plant & Equipment upon completion of the well.

1.9.3 Production Cost

Production Cost consists of direct and indirect costs incurred to operate and maintain wells and related equipment and facilities, including depreciation and applicable operating cost of support equipment and facilities.

1.9.4 Side-Tracking Expenditure

In case of exploratory wells, the cost of abandoned portion of side tracked well is charged off to the Statement of Profit and Loss statement. In case of development wells, the entire cost of abandoned portion and side- tracking is capitalized. In case of existing producing wells, the cost of side - tracking is capitalized if it increases the proved developed reserves, otherwise is charged off to Statement of Profit and loss.

1.10.0 Research & Development Expenditure

All revenue expenditure incurred for Research & Development Projects/Schemes, net of grants-in-aid (other than those related to asset) if any, are charged to the Statement of Profit and Loss.

1.11.1 Property, plant and equipment (PPE)

(i) Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment losses. The initial cost of an asset comprises its purchase price including import duties and non-refundable purchase taxes or construction cost, any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation wherever applicable and eligible borrowing costs. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset. Assets in the course of construction are initially kept under assets under construction and capitalized when the assets are available for use in the manner as intended by the management.

(ii) Cost of day-to-day servicing of property, plant and equipment are recognized in the Statement of Profit and Loss as incurred. Major shut-down and overhaul expenditure is capitalized as the activities undertaken to improve the economic benefits expected to arise from the asset. Where an asset or part of an asset that was separately depreciated is replaced and it is probable that future economic benefits associated with the item will flow to the Company, the expenditure is capitalized and the carrying amount of the replaced asset is derecognized. Inspection costs associated with major maintenance programs from which future economic benefits are expected to flow, are capitalized and amortized over the period to the next inspection.

(iii) Oil and gas assets which comprise of producing wells, related acquisition cost and production facilities are depleted using a unit-of-production method except in cases where life of assets is lower than life of the field. The cost of producing wells and production facilities are depleted over proved developed reserves. Acquisition cost is depleted over total proved reserves. Rate of depletion is determined based on production from the Oil/Gas field or a group of Oil/Gas fields identified to the related reserves having homogeneous geological feature. Estimation of oil and natural gas reserves are done annually at the yearend and the impact of changes in the estimated proved reserves are dealt with prospectively by depleting the remaining carrying value of the asset.

(iv) Other property, plant and equipment are depreciated based on useful life of the asset under "Written down value method" as specified in Schedule II to the Companies. When any part of an item of property, plant and equipment, has different useful life and cost is significant in relation to the total cost of the asset, they are accounted for and depreciated separately. Depreciation on additions / deletions during the year is provided on pro rata basis with reference to the date of additions / deletions except low value items not exceeding Rs,,000 which are fully depreciated at the time of addition. The typical useful lives of other major property, plant and equipment are as follows:

Buildings 30 to 60 years

Plant & Machinery 10 to 40 years

Furniture and fixtures 8 to 10 years

Office equipments 3 to 10 years

Vehicles 8 to 10 years

Railway sliding''s 15 years

(v) The expected useful lives of property, plant and equipment other than Oil and gas assets are reviewed on an annual basis and, if necessary, impact arising out of the changes in useful lives are accounted for prospectively.

(vi) An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the income statement in the period in which the item is derecognized. Any Tangible asset, when determined of no further use, is deleted from the Gross Block of assets. The deleted assets are carried as ''Assets awaiting disposal'' under Inventories at lower of Rs,1000 or 5% of the original cost and the balance written down value, is charged off.

(vii) Physical verification of the property, plant and equipment is carried out by the Company in a phased manner to cover all the items over a period of three years. The discrepancies noticed, if any, are accounted for in the year in which such differences are found.

1.11.2 Intangible assets

Costs of intangible assets are capitalized when the asset is ready for its intended use.

Intangible assets include expenditure on computer software, and right to way/right of use of land and are stated at the amount initially recognized less accumulated amortization and accumulated impairment losses.

Cost of right of use / right of way of land is amortized on a straight line basis over the lower of period of such rights or useful life of the related asset for which right of use / right of way is taken. Cost of computer software is amortized over the useful life not exceeding five years from the date of capitalization.

Any intangible asset, when determined of no further use, is written off.

1.11.3 Impairment of property, plant & equipment (PPE), E&E assets, Intangible assets other than goodwill.

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant & equipment (including capital work in progress) to determine whether there is any indication that those assets have suffered an impairment loss. For this purpose Producing fields, LPG plant, Transportation Pipeline and Power Generating Units (other than captive power plants) are considered as Cash Generating Units (CGU). If any such indication exists, the recoverable amount of the CGU is estimated in order to determine the extent of the impairment loss (if any). Corporate assets and common service assets are also allocated to individual cash-generating units on a reasonable and consistent basis.

Intangible assets are tested for impairment annually. Whenever there is an indication that the asset may be impaired, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

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 a CGU is estimated to be less than its carrying amount, the carrying amount of the asset or group of assets covered under the CGU is reduced to its recoverable amount. An impairment loss is recognized immediately in the statement of profit and loss.

E&E Assets are reviewed for indicators of impairment as per Ind AS 106 and if events and circumstances suggest, impairment loss is provided for and carrying amount is reduced accordingly.

When an impairment loss is subsequently reversed, the carrying amount of the asset or group of assets covered under the CGU is increased to the revised estimate of its recoverable amount, so however that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or group of assets covered under the CGU in prior years. A reversal of an impairment loss is recognized immediately in the Statement of Profit and Loss.

1.12.0 Inventories

Finished goods of Crude Oil, Liquefied Petroleum Gas (LPG) and LPG condensate are valued at cost or net realizable value, whichever is lower. Cost of finished goods is determined based on direct cost and directly attributable services cost including depreciation & depletion. The value of such inventories includes excise duty and royalty (wherever applicable). Net realizable value represents the estimated selling price for inventories less all costs necessary to effect the sale.

Crude oil in unfinished condition in the flow line up to Group Gathering Station and Natural Gas in Pipeline are not valued, as these pipeline fills are necessary for the operation of the facility.

Stores and spares are valued at weighted average cost or net realizable value whichever is lower. Obsolete / unserviceable items, as and when identified, are written off. Any item of stores and spares including those in Storage Locations which have not moved for last four years as on date of Balance Sheet are identified as slow moving items for which a provision of 95% of the value is made in the accounts.

Renewable Energy Certificates (REC) received based on generation of renewable energy certified by the competent authority, held for trading are not valued.

1.13.1 Provisions

Provisions are recognized when the Company has a present obligation as a result of a past event and it is probable that the Company will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognized 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. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

1.13.2 Decommissioning and restoration obligations

Full eventual liabilities towards costs relating to assets retirement obligations are recognized when the Company has an obligation to plug and abandon a well, dismantle and remove a facility or an item of plant and to restore the site on which it is located, and when a reliable estimate of that liability can be made. Liabilities towards costs relating to dismantling, abandoning and restoring well sites and associated Production Facilities are recognized at the commencement of drilling a well or when facilities are installed, as the case may be. The amount recognized is the present value of the estimated future expenditure determined in accordance with local conditions and requirements. The provision for the costs of decommissioning wells, production facilities including fields'' pipelines at the end of their economic lives is estimated using existing technology, at current prices or future assumptions, depending on the expected timing of the activity, and discounted using government bonds rate.

An amount equivalent to the decommissioning liability provision is recognized as part of the corresponding PPE or Exploration & Evaluation Asset (E&E) as the case may be.

Liability for decommissioning cost is updated annually based on the technical assessment available at current costs. The unwinding of the discount is included as a finance cost. Any change in the present value of the estimated future cash flow to settle the obligation due to change in measurement or discount rate shall be added to or deducted from the cost of the asset in the current period and would be considered for depreciation (depletion) prospectively.

Except in the case of E&E assets, the actual cost incurred on settlement of the obligation is adjusted against the liability and the ultimate gain or loss is recognized in the Statement of Profit and Loss, when the designated oil/gas field or a group of oil/gas fields ceases to produce.

1.14.0 Investments in subsidiaries, associates and joint ventures

The Company measures its investments in subsidiaries, associates and joint ventures at cost less impairment. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. If any such indication of impairment exists, the Company makes an estimate of its recoverable amount. Where the carrying amount of an investment exceeds its recoverable amount, the investment is considered impaired and is written down to its recoverable amount.

1.15.0 Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

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 is appropriate, on initial recognition.

1.15.1 Financial assets

1.15.1.1 Investment in Securities

All regular purchases or sales of financial assets are recognized and de-recognized on a trade date basis.

All recognized financial assets are subsequently measured in their entirety either at amortized cost or fair value, depending on the classification of the financial assets.

1.15.1.1.1 Classification of financial assets

(i) Debt instruments that meet the following conditions

are subsequently measured at amortized cost less impairment loss (except for debt investments that are designated as at Fair Value Through Profit or Loss (FVTPL) on initial recognition):

a) the asset is held within a business model whose objective is to hold assets till maturity in order to collect contractual cash flows; and

b) The contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(ii) Debt instruments that meet the following conditions are subsequently measured at Fair Value Through Other Comprehensive Income (except for debt investments that are designated as at FVTPL on initial recognition):

a) the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and

b) The contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(iii) Debt instruments that do nutmeat the criteria of amortized cost or Fair Value through Other Comprehensive Income (FVTOCI) are measured at FVTPL.

(iv) All other financial assets are subsequently measured at fair value through Profit or Loss.

1.15.1.1.2 Amortized cost and Effective interest method

The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash flows (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Income is recognized in the statement of profit & loss under investment income on an effective interest basis for debt instruments other than those financial assets classified as FVTPL.

1.15.1.1.3 Investments in equity instruments at Fair Value Through other Comprehensive Income (FVTOCI)

On initial recognition, the Company can make an irrevocable election (on an instrument-by-instrument basis) to present the subsequent changes in fair value in other comprehensive income for equity instruments that are not held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity under subhead Equity instruments through other comprehensive income. The cumulative gain or loss is not reclassified to profit or loss on disposal of the investments.

Dividends on these investments in equity instruments are recognized in the Statement of Profit and Loss when the Company''s right to receive the dividends is established and it does not represent a recovery of part of cost of the investment.

1.15.1.2 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand, including offsetting bank overdrafts, and short-term highly liquid investments that are readily convertible to known amounts of cash, are subject to an insignificant risk of changes in fair value and have a maturity of three months or less from the acquisition date.

1.15.1.3 Trade receivables

Trade receivables are recognized initially at fair value based on amounts exchanged and subsequently at the amortized cost less any impairment.

1.15.1.4 Impairment of financial assets

The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since its initial recognition. If the credit risk on a financial instrument has not increased significantly since its initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.

However, for trade receivables or contract assets that result in relation to revenue from contracts with customers, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

1.15.1.5 De-recognition of financial assets

The Company de-recognizes 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 de-recognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset.

1.15.2 Financial liabilities and equity instruments

1.15.2.1 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 recognized at the proceeds received, net of direct issue costs.

1.15.2.2 Financial liabilities

All financial liabilities are subsequently measured at amortized cost using the effective interest method or at FVTPL. However, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.

1.15.2.2.1 Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL.

1.15.2.2.2Financial liabilities subsequently measured at amortized cost

Financial liabilities that are not held-for-trading and not designated as at FVTPL are measured at amortized cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortized cost are determined based on the effective interest method. Interest expense that is not capitalized as part of costs of an asset is included in the ''finance costs'' line item.

The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

1.15.2.2.3 Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.

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:

a) the amount of loss allowance determined in accordance with impairment requirements of Ind AS 109; and

b) the amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with the principles of Ind AS 18 or the amount initially recognized less, when appropriate, the cumulative amount of finance income recognized which measured by amortizing the initial fair value of guarantee on a straight line basis over the guarantee period.

1.15.2.2.4 De-recognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability de-recognized and the consideration paid and payable is recognized in profit or loss.

1.16.0 Interest in joint operations

Production Sharing Contracts (PSCs) executed with the Government of India / Government of Foreign Countries by the Company along with other entities to undertake exploration, development and production of Oil and/or Gas activities under a joint venture in various concessions/block/area are accounted as under:

The financial statements reflect the share of the Company''s assets, liabilities and also the income and expenditure of the Joint Venture in proportion to the participating interest of the Company as per the terms of the PSCs, on a line by line basis. Depreciation, depletion and impairment and value of Stock of Crude Oil are accounted for as per the relevant accounting policies of the Company. Proved Developed Reserve of Oil & Gas in such concessions/block/area is also considered in proportion to participating interest of the Company. Consideration recoverable from new Joint Venture Partners for the right to participate in operations is reduced from respective assets and/or expenditure to the extent of the new partner''s contribution towards past cost and balance is considered as miscellaneous receipts/expenses.

1.17.0 Segment Accounting

Considering the nature and associated risks and return of products & services, the Company has adopted its products & services (viz. Crude Oil, Natural Gas, LPG and Pipeline Transportation) as the primary reporting segments. There are no reportable geographical segments.

Segment assets, liabilities, income and expenses have been either directly identified or allocated to the segments on the basis usually followed for allocation of cost adopted for preparing and presenting the financial statements of the Company.

1.18.0 Earnings per Share

Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.19.0 Dividend

The final dividend on shares is recorded as a liability on the date of approval by shareholders, and interim dividends are recorded as a liability on the date of declaration by the Company''s board of directors.

1.20.0 Contingent Liabilities and Contingent Assets

(i) Contingent liabilities, if material, are disclosed by way of notes to the accounts.

(ii) Contingent assets are not recognized but disclosed in the financial statements along with an estimate of their financial effect where an inflow of economic benefits is probable and where practicable.

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

2.2 Carrying value of Oil and Gas assets include decommissioning liabilities amounting to Rs,108.44 crore (previous year Rs,120.85 crore).

2.3 Lands for projects and drillings operations are acquired primarily through bipartite negotiation with the occupiers/pattadars. In case, however, bipartite negotiation fails, land is acquired under relevant land laws with Government intervention. Upon successful negotiation or government order, as the case may be, consent letters are obtained from the occupiers/pattadars and surface compensation for the standing crops on the lands are settled and the same are capitalized either as Land Under Possession or as Oil & Gas assets. At the same time occupiers/pattadars are advised to submit documentary evidences in support of their

6.1 The aggregate carrying value of unquoted investments is Rs,13,181.28 crore (previous year Rs,12,943.61 crore).

6.2 The aggregate amount of quoted investments is Rs,8,568.87 crore (previous year '' 9,236.56 crore).

6.3 The aggregate market value of quoted investments is Rs,8,642.23 crore (previous year '' 9326.78 crore).

6.4 The aggregate amount of impairment in value of investment is Rs,290.72 crore (previous year Rs,202.22 crore).

* As on 31.03.2019, the Company has entered into three interest bearing Facility Agreements with Oil India International BV to extend total USD 59 million and as on balance sheet date the total amount withdrawn under the agreements is USD 58.2 million (Rs,406.07 crore).

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

10.1 The cost of inventories recognized as an expense during the period in respect of continuing operations was Rs,187.45 crores (corresponding period Rs,185.18 crores).

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

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

12.2 The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The aggregate percentage of provision against trade receivables outstanding for more than six months is 96.37% as at 31.03.2019 (as at 31.03.2018 14.04%).

12.4 Trade Receivable as on 31.03.2019 includes Rs,189.95 crore receivable from M/s Brahmaputra Cracker & Polymer Limited. Out of which Rs,17.16 crore is yet to be reconciled.

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

18.1 Security Deposits include deposit with Government entities and deposits made for office facilities.

18.2 Statutory Deposits & Advances include service tax and GST on Royalty paid under protest. Refer to Note 41.14.

19.1 Terms/rights attached to equity shares:

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

19.4 20,03,78,652 Equity shares of Rs,10 each allotted as fully paid up bonus shares in the FY 2016-17.

19.5 4,49,12,000 Equity shares of Rs,10 each bought back in the FY 2017-18.

19.6 37,83,01,304 Equity shares of Rs,10 each allotted as fully paid up bonus shares in the FY 2018-19.

19.7 As per the approval of Board of Directors in its meeting held on 19^th November, 2018, the Company has completed the buy-back of 5,04,98,717 fully paid up equity shares at the price of ''215 per equity share, on 12^th March, 2019. After the buy back, the share capital of the Company stands decreased from Rs,1,134.90 crore to Rs,1,084.41 crore.

19.8 The Board of Directors have recommended a final dividend of Rs,1.75 per share for financial year 2018-19 which is subject to the approval of the shareholders in the ensuing Annual General Meeting.

20.1 Nature and purpose of reserves:

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

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

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

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

(e) General Reserve: The General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. The Company has incurred expenses of Rs,7.33 crore during the financial year 2018-19 (previous year Rs,8.24 crore) in relation to buy back of shares which has been adjusted against General Reserve.

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

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

30.4 On application of Ind AS 115 - Revenue from contracts with customers, the sale of crude oil and natural gas includes transportation of own crude oil and natural gas to customers up to the delivery point which co-incides with the transfer of risk & rewards and transfer of custody. Income from pipeline transportation includes Rs,79.94 crore and Rs,0.87 crore for transportation of own crude oil and natural gas respectively.

30.5 Company is holding 40,387 (as on 31.03.2018 77,172) numbers of Renewable Energy Certificates (REC) as on 31.03.2019. The Floor Price of REC in the Energy Exchange on 31.03.2019 was Rs,1,000 (as on 31.03.2018 Rs,1,000) per REC.

35.1 Pursuant to directive from Government of India, the Company has raised overseas borrowings for acquiring 4% participating interest in Rovuma 1 offshore block in Mozambique. In the opinion of the Management, there is no explicit restriction by Government of India with regard to repayment & servicing of such overseas borrowings from domestic resources of the Company. Interest servicing of Rs,389.13 crore (Previous Year Rs,319.29 crore) on such overseas borrowings have been met from domestic resources. The Company has informed MoP&NG that servicing of interest on the overseas borrowings raised for financing of above transaction is being done from domestic resources. Approval of MOP&NG is awaited.

40. Financial Instruments 40.1.1 Capital Management

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

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Mar 31, 2018

1.1.1 STATEMENT OF COMPLIANCE

The financial statements have been prepared in accordance with the Companies Act 2013 and in compliance with the Indian Accounting Standards (Ind AS) issued by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules,2015 as amended.

1.1.2 BASIS OF PREPARATION

These financial statements are prepared in accordance with Indian Accounting standards (Ind AS) and under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the provisions of the Companies Act, 2013 (‘the Act’) (to the extent notified). The Ind ASs are prescribed under section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting standards) Amendment Rules, 2016.

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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date on such basis as provided under Ind AS 113.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

As the operating cycle cannot be identified in normal course due to the special nature of industry, the same has been assumed to have duration of 12 months. Accordingly, all assets and liabilities have been classified as current or non-current as per the Company’s operating cycle and other criteria set out in Ind AS-1 “Presentation of Financial Statements? and Schedule III to the Companies Act, 2013.

1.1.3 USE OF ESTIMATES

The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. The application of accounting policies that requires critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed in Note 1.1.4. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the management becomes aware of the changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

1.1.4 MAJOR JUDGMENTS, ASSUMPTIONS AND ACCOUNTING ESTIMATES

A. ESTIMATION OF OIL AND GAS RESERVES

The estimation of oil and gas reserves is key factor in the in accounting for oil and gas producing activities. Oil and gas reserves are estimated by analysis of geosciences and engineering data using Deterministic Method. Production pattern analysis, number of additional wells to be completed, application of recovery techniques, validity of mining lease agreements, agreements/MOU for sales etc. influence the estimation of reserves. Unit-of-production depreciation, depletion and amortization charges are principally measured based on management’s estimates of proved developed oil and gas reserves. Also, exploration drilling costs are capitalized pending the results of further exploration or appraisal activity, which may take several years to complete and before any related proved reserves can be booked.

B. IMPAIRMENT OF ASSETS

As part of the determination of the recoverable value of assets of cash generating units for impairment, the estimates, assumptions and judgments mainly concern oil and gas prices scenarios, operating costs, production volumes and oil and gas proved reserves. The discount rate used for estimating the value in use is reviewed annually. Changes in assumptions could affect the carrying amounts of assets, and any impairment losses and reversals will affect the revenues.

C. EMPLOYEE BENEFITS

The benefit obligations and plan assets can be subject to significant volatility due to changes in market values and actuarial assumptions. These assumptions vary between different pension plans and thus take into account market conditions. They are determined following actuarial valuation method certified by external independent actuarial valuer. The assumptions for each plan are reviewed annually and adjusted if necessary to reflect changes from the experience and actuarial advices.

D. ASSET RETIREMENT OBLIGATIONS

Asset retirement obligations, which result from a legal or constructive obligation, are recognized based on a reasonable estimated in the period in which the obligation arises. This estimate is based on information available in terms of costs and work program. It is regularly reviewed to take into account the changes in laws and regulations, the estimates useful life of fields based on proved and probable oil and gas reserves and current production off-take, the analysis of site conditions and technologies, risk adjusted discount rate. Such estimates can differ from estimates due to changes in the aforesaid factors. The risk adjusted discount rate used for estimating the present value of obligation is reviewed annually.

E. TAXATION

Tax liabilities are recognized when it is considered probable that there will be a future outflow of funds to a taxing authority. In such cases, provision is made for the amount that is expected to be settled, where this can be reasonably estimated. This requires the application of judgment as to the ultimate outcome, which can change over time depending on facts and circumstances. A change in estimate of the likelihood of a future outflow and/or in the expected amount to be settled would be recognized in income in the period in which the change occurs.

Deferred tax assets are recognized only to the extent it is considered probable that those assets will be recoverable. This involves an assessment of when those assets are likely to reverse, and a judgment as to whether or not there will be sufficient taxable profits available to offset the assets when they do reverse. This requires assumptions regarding future profitability and is therefore inherently uncertain. To the extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognized in respect of deferred tax assets as well as in the amounts recognized in income in the period in which the change occurs.

1.2. REVENUE RECOGNITION

1.2.1 SALE OF PRODUCTS

(i) Revenue from the sale of goods is recognized at the time when the following conditions are satisfied:

- the Company has transferred to the buyer the significant risks and rewards of ownership of the goods;

- the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

- the amount of revenue can be measured reliably;

- it is probable that the economic benefits associated with the transaction will flow to the Company; and

- the costs incurred or to be incurred in respect of the transaction can be measured reliably.

(ii) Revenue is measured at the fair value of the consideration received or receivable and represents amounts received or receivable for goods provided in the normal course of business which is net of all statutory levies recovered or recoverable from the customers and net of discounts &Company’s share of profit petroleum paid to Government of India (GOI).

(iii) Any retrospective revision in prices is accounted for in the year of such revision.

(iv) Claims on Central Government / Petroleum Planning & Analysis Cell (PPAC) towards gas pool revenue are accrued based on quantity delivered to the customers at discounted price, in respect of which revenue has been recognized as per note no. 1.2.1(i) above.

(v) Revenue in respect of short lifted quantity of Crude Oil & Natural Gas, if any, is recognized when there is reasonable certainty of ultimate realization of the same.

1.2.2 SALE OF SERVICES

Revenue from sale of services such as transportation of crude oil, products, natural gas, etc is recognized when service is rendered in line with the agreements.

1.2.3 OTHERS

(i) Revenue from sale of Renewable Energy Certificates (REC) is recognized on sale of the certificates through the Exchange and included under other operating revenue.

(ii) Revenue on account of reimbursable subsidies/grants and interest on delayed realization from customers are recognized when there is reasonable certainty of ultimate realization.

(iii) Dividend income is recognized when the right to receive the dividend is established.

(iv) Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the company and can be measured reliably. Interest income is recognized on a time proportion basis taking into account the amount outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through expected life of the financial asset to that asset’s net carrying amount on initial recognition.

(v) Recovery of liquidated damages is recognized in the Statement of Profit & Loss as income at the time of occurrence except in case of Joint Venture Contracts (JVC) which are governed by the respective Production Sharing Contracts. In case of return/refund of the liquidated damages, the same is accounted for as other expenses. In case of any dispute over the liquidated damages, provision is created in the accounts.

(vi) Insurance claim other than that for transit loss of stores items are accounted for on final acceptance by the Insurance Company.

1.3.LEASING

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

1.3.1 THE COMPANY AS LESSOR

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight-line basis over the lease term.

1.3.2 THE COMPANY AS LESSEE

Operating lease payments are recognized as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

In the event that lease incentives are received to enter into operating leases, such incentives are recognized as a liability. The aggregate benefit of incentives is recognized as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.4.0 FOREIGN CURRENCY TRANSACTIONS AND TRANSLATIONS

The functional currency of the Company is the Indian Rupee. The financial statements are presented in Indian Rupees.

(i) In preparing the financial statements of the Company, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized 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 retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rate prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

(ii) Transaction gains and losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled. Revenue, expense and cash-flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction.

(iii) Exchange differences on monetary items are recognized in the statement of profit and loss in the period in which they arise except for:

(a) Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;

(b) In accordance with para D13AA of Ind AS 101, First-time Adoption of Indian Accounting Standards the Company continues to exercise policy adopted under previous IGAAP and accordingly exchange differences on long-term foreign currency monetary items relating to acquisition of depreciable and other assets were adjusted to the carrying cost of the assets and depreciated over the balance life of the assets and in other cases, exchange differences were accumulated in a “Foreign Currency Monetary Item Translation Difference Account” and amortized over the balance period of such long term foreign currency monetary item by recognition as income or expense in each of such periods in respect of items recognized in the financial statement for the period ending immediately before the beginning of the first Ind AS financial reporting period as per previous GAAP i,e; 31 March 2016 as reported date.

1.5.0 BORROWING COSTS

(i) Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale and also includes exchange difference arising from Foreign Currency borrowings to the extent that they are regarded as an adjustment to interest cost.

(ii) All other borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.

1.6.0 GOVERNMENT GRANTS

(i) Government grants are recognized when there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.

(ii) Government grants are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes as expenses the related costs for which the grants are intended to compensate. Government grants with the primary condition that the Company should purchase, construct or otherwise acquire non-current assets are recognized as deferred revenue in the balance sheet and transferred to the statement of profit and loss on a systematic and rational basis over the useful lives of the related assets.

1.7.0 EMPLOYEE BENEFITS

1.7.1 RETIREMENT BENEFIT COSTS AND TERMINATION BENEFITS:

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered service entitling them to the contributions.

The cost of providing benefits under defined benefit plans (such as gratuity, leave encashment, postretirement medical benefits, defined benefit pension schemes) is determined separately for each plan using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. This attributes the increase in present value of the defined benefit obligation resulting from employee service in the current period to determine current service cost. The current service cost as stated above and past service costs, resulting from either a plan amendment (a reduction in future obligations as a result of a material reduction in the number of employees covered by the plan), are recognized in the statement of profit and loss under ‘employee benefits expense’.

Net interest which is recognized in the statement of profit and loss under ‘employee benefits expense’ represents the net change in present value of plan obligations and the value of plan assets resulting from the passage of time, and is determined by applying the discount rate to the present value of the benefit obligation at the start of the year, and to the fair value of plan assets at the beginning of the year, taking into account expected changes in the obligation or plan assets during the year.

Re-measurement of the defined benefit liability and asset, comprising actuarial gains and losses, and the return on plan assets (excluding amounts included in net interest described above) are recognized in other comprehensive income in the period in which they occur and are not subsequently reclassified to the statement of profit and loss.

The defined benefit pension plan surplus or deficit recognized in the balance sheet for each plan comprises the difference between the present value of the defined benefit obligation and the fair value of plan assets out of which the obligations are to be settled directly. Defined benefit pension plan surpluses are only recognized to the extent they are recoverable, naturally by way of refund or reductions in future contributions to the plans.

1.7.2 SHORT-TERM AND OTHER LONG-TERM EMPLOYEE BENEFITS

A liability is recognized for benefits accruing to employees in respect of wages and salaries (including performance related pay), annual leave, sick leave and social security contribution in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

1.8.0 TAXATION

Income tax expense represents the aggregate of current tax and deferred tax.

1.8.1 CURRENT TAX

Current tax is the amount of income tax payable based on taxable profit for the period. 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 and the tax laws that have been enacted or substantively enacted by the end of the reporting period.

1.8.2 DEFERRED TAX

(i) Deferred tax 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 recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

(ii) 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 the benefits of all or part of the deferred tax asset to be utilized. Any such reduction shall be reversed to the extent that it becomes probable that sufficient taxable profit will be available.

(iii) 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 realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

(iv) Minimum Alternate Tax (‘MAT’) under the provisions of the Income Tax Act, 1961 is recognized as current tax in the statement of profit and loss. The credit available under the Income Tax Act, 1961 in respect of MAT paid is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the period for which the MAT credit recognized as an asset is reviewed at each balance sheet date and written down to the extent the aforesaid convincing evidence no longer exists.

1.8.3 CURRENT AND DEFERRED TAX FOR THE YEAR

Current and deferred tax are recognized in the statement of profit and loss, except when they relate to items that are recognized in other comprehensive income, in which case, the current and deferred tax are also recognized in other comprehensive income.

1.9.0 OIL AND GAS EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITURE

The Company follows the Successful Efforts Method (SEM) of accounting in respect of its oil and gas exploration and production activities in accordance with Ind AS 106 and the “Guidance Note on Accounting for Oil & Gas Producing Activities (Ind AS)” issued by the Institute of Chartered Accountants of India.

1.9.1 PRE-ACQUISITION, ACQUISITION, EXPLORATION & EVALUATION COSTS

(i) Pre-Acquisition costs: Pre-Acquisition costs of revenue nature incurred prior to obtaining the rights to explore, develop and produce Oil & Gas like data collection & analysis cost etc. are expensed to the Statement of Profit and Loss in the year of incidence.

(ii) Acquisition costs:

(a) Acquisition costs include land acquired for drilling operations including cost of temporary occupation of the land, crop compensation paid to farmers, registration fee, legal cost, signature bonus, brokers’ fees, consideration for farm-in arrangements and other costs incurred in acquiring mineral rights.

(b) These costs are initially recorded under Exploration & Evaluation Assets (Intangible) except cost of land acquired for drilling operations which are shown as Acquisition cost-land under capital work in progress.

(c) On determination of proved developed reserves, associated acquisition costs are transferred to Property, Plant & Equipment as Oil & Gas assets.

(d) Acquisition cost relating to an exploratory well that is determined to have no proved reserves and its status is decided as dry or of no further use for exploration purpose, is charged as expenses. In such cases, for land value forming part of acquisition cost, a nominal amount of Rs.100 per bigha is transferred to Freehold land under Property, Plant & Equipment.

(e) Cost for retaining the mineral interest in properties like lease carrying cost, license fees & other cost are charged as expense when incurred.

(III) EXPLORATION & EVALUATION COST (E&E COST):

(a) Geological and geophysical costs, including seismic surveys for exploration purposes are expensed as incurred.

(b) Costs including allocated depreciation on support equipment and facilities involved in drilling and equipping exploratory and appraisal wells and cost of exploratory-type drilling stratigraphic test wells are initially shown as Exploration & Evaluation Assets (Intangible) till the time these are either transferred to Property, Plant & Equipment as Oil & Gas assets on establishment of Proved Developed Reserves or charged as expense when determined to be dry or of no further use.

(c) E&E costs related to each exploratory well are not carried over unless it could be reasonably demonstrated that there are indications of sufficient quantity of reserves and activities are firmly planned in near future for further assessing the reserves and economic & operating viability of the project. Costs of written off exploratory wells are not reinstated in the books even if they start producing subsequently.

1.9.2 DEVELOPMENT COST

Costs that are attributable to development activities including production and processing plant & facilities, service wells including allocated depreciation on support equipment and facilities are initially shown under Capital Work in Progress as Development Cost till such time they are capitalized as Oil & Gas Asset under Property, Plant & Equipment on establishment of Proved Developed Reserves. Cost of dry development well, if any is capitalized as Oil & Gas Asset under Property, Plant & Equipment upon completion of the well.

1.9.3 PRODUCTION COST

Production Cost consists of direct and indirect costs incurred to operate and maintain wells and related equipment and facilities, including depreciation and applicable operating cost of support equipment and facilities.

1.9.4 SIDE-TRACKING EXPENDITURE

In case of exploratory wells, the cost of abandoned portion of side tracked well is charged off to the Statement of Profit and Loss. In case of development wells, the entire cost of abandoned portion and side- tracking is capitalized. In case of existing producing wells, the cost of side - tracking is capitalized if it increases the proved developed reserves, otherwise is charged off to Statement of Profit and loss.

1.10.0 RESEARCH & DEVELOPMENT EXPENDITURE

All revenue expenditure incurred for Research & Development Projects/Schemes, net of grants-in-aid (other than those related to asset) if any, are charged to the Statement of Profit and Loss.

1.11.1 PROPERTY, PLANT AND EQUIPMENT (PPE)

(i) Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment losses. The initial cost of an asset comprises its purchase price including import duties and non-refundable purchase taxes or construction cost, any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation wherever applicable and eligible borrowing costs. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset. Assets in the course of construction are initially kept under assets under construction and capitalized when the assets are available for use in the manner as intended by the management.

(ii) Cost of day-to-day servicing of property, plant and equipment are recognized in the Statement of Profit and Loss as incurred. Major shut-down and overhaul expenditure is capitalized as the activities undertaken to improve the economic benefits expected to arise from the asset. Where an asset or part of an asset that was separately depreciated is replaced and it is probable that future economic benefits associated with the item will flow to the Company, the expenditure is capitalized and the carrying amount of the replaced asset is derecognized. Inspection costs associated with major maintenance programs from which future economic benefits are expected to flow, are capitalized and amortized over the period to the next inspection.

(iii) Oil and gas assets which comprise of producing wells, related acquisition cost and production facilities are depleted using a unit-of-production method except in cases where life of assets is lower than life of the field. The cost of producing wells and production facilities are depleted over proved developed reserves. Acquisition cost is depleted over total proved reserves. Rate of depletion is determined based on production from the Oil/Gas field or a group of Oil/Gas fields identified to the related reserves having homogeneous geological feature. Estimation of oil and natural gas reserves are done annually at the year end and the impact of changes in the estimated proved reserves is dealt with prospectively by depleting the remaining carrying value of the asset.

(iv) Other property, plant and equipment are depreciated based on useful life of the asset under “Written down value method” as specified in Schedule II to the Companies Act., 2013. When any part of an item of property, plant and equipment, has different useful life and cost is significant in relation to the total cost of the asset, they are accounted for and depreciated separately. Depreciation on additions / deletions during the year is provided on pro rata basis with reference to the date of additions / deletions except low value items not exceeding Rs.5,000 which are fully depreciated at the time of addition. The typical useful lives of other major property, plant and equipment are as follows:

Buildings 30 to 60 years

Plant & Machinery 10 to 40 years

Furniture and fixtures 8 to 10 years

Office equipments 3 to 10 years

Vehicles 8 to 10 years

Railway sliding’s 15 years

(v) The expected useful lives of property, plant and equipment other than Oil and gas assets are reviewed on an annual basis and, if necessary, impact arising out the changes in useful lives are accounted for prospectively.

(vi) An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the income statement in the period in which the item is derecognized. Any Tangible asset, when determined of no further use, is deleted from the Gross Block of assets. The deleted assets are carried as ‘Assets awaiting disposal’ under Inventories at lower of Rs.1000 or 5% of the original cost and the balance written down value, is charged off.

(vii)Physical verification of the property, plant and equipment is carried out by the Company in a phased manner to cover all the items over a period of five years. The discrepancies noticed, if any, are accounted for in the year in which such differences are found.

1.11.2 INTANGIBLE ASSETS

Costs of intangible assets are capitalized when the asset is ready for its intended use.

Intangible assets include expenditure on computer software, and right to way/right of use of land and are stated at the amount initially recognized less accumulated amortization and accumulated impairment losses.

Cost of right of use / right of way of land is amortized on a straight line basis over the lower of period of such rights or useful life of the related asset for which right of use / right of way is taken. Cost of computer software is amortized over the useful life not exceeding five years from the date of capitalization.;

Any intangible asset, when determined of no further use, is written off.

1.11.3 IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT (PPE), E&E ASSETS, INTANGIBLE ASSETS OTHER THAN GOODWILL.

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant & equipment (including capital work in progress) to determine whether there is any indication that those assets have suffered an impairment loss. For this purpose Producing fields, LPG plant, Transportation Pipeline and Power Generating Units (other than captive power plants) are considered as Cash Generating Units (CGU). If any such indication exists, the recoverable amount of the CGU is estimated in order to determine the extent of the impairment loss (if any). Corporate assets and common service assets are also allocated to individual cash-generating units on a reasonable and consistent basis.

Intangible assets are tested for impairment annually. Whenever there is an indication that the asset may be impaired, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

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 a CGU is estimated to be less than its carrying amount, the carrying amount of the asset or group of assets covered under the CGU is reduced to its recoverable amount. An impairment loss is recognized immediately in the statement of profit and loss.

E&E Assets are reviewed for indicators of impairment as per Ind AS 106 and if events and circumstances suggest, impairment loss is provided for and carrying amount is reduced accordingly.

When an impairment loss is subsequently reversed, the carrying amount of the asset or group of assets covered under the CGU is increased to the revised estimate of its recoverable amount, so however that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or group of assets covered under the CGU in prior years. A reversal of an impairment loss is recognized immediately in the Statement of Profit and Loss.

1.12.0 INVENTORIES

Finished goods of Crude Oil, Liquefied Petroleum Gas (LPG) and LPG condensate are valued at cost or net realizable value, whichever is lower. Cost of finished goods is determined based on direct cost and directly attributable services cost including depreciation & depletion. The value of such inventories includes excise duty and royalty (wherever applicable). Net realizable value represents the estimated selling price for inventories less all costs necessary to effect the sale.

Crude oil in unfinished condition in the flow line up to Group Gathering Station and Natural Gas in Pipeline are not valued, as these pipeline fills are necessary for the operation of the facility.

Stores and spares are valued at weighted average cost or net realizable value whichever is lower. Obsolete / unserviceable items, as and when identified, are written off. Any item of stores and spares including those in Storage Locations which have not moved for last four years as on date of Balance Sheet are identified as slow moving items for which a provision of 95% of the value is made in the accounts.

Renewable Energy Certificates (REC) received based on generation of renewable energy certified by the competent authority, held for trading are not valued.

1.13.1 PROVISIONS

Provisions are recognized when the Company has a present obligation as a result of a past event and it is probable that the Company will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognized 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. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

1.13.2 DECOMMISSIONING AND RESTORATION OBLIGATIONS

Full eventual liabilities towards costs relating to assets retirement obligations are recognized when the Company has an obligation to plug and abandon a well, dismantle and remove a facility or an item of plant and to restore the site on which it is located, and when a reliable estimate of that liability can be made. Liabilities towards costs relating to dismantling, abandoning and restoring well sites and associated Production Facilities are recognized at the commencement of drilling a well or when facilities are installed, as the case may be. The amount recognized is the present value of the estimated future expenditure determined in accordance with local conditions and requirements. The provision for the costs of decommissioning wells, production facilities including fields’ pipelines at the end of their economic lives is estimated using existing technology, at current prices or future assumptions, depending on the expected timing of the activity, and discounted using govt. bonds rate.

An amount equivalent to the decommissioning liability provision is recognized as part of the corresponding PPE or Exploration & Evaluation Asset (E&E) as the case may be.

Liability for decommissioning cost is updated annually based on the technical assessment available at current costs. The unwinding of the discount is included as a finance cost. Any change in the present value of the estimated future cash flow to settle the obligation due to change in measurement or discount rate shall be added to or deducted from the cost of the asset in the current period and would be considered for depreciation (depletion) prospectively.

Except in the case of E&E assets, the actual cost incurred on settlement of the obligation is adjusted against the liability and the ultimate gain or loss is recognized in the Statement of Profit and Loss, when the designated oil/gas field or a group of oil/gas fields ceases to produce.

1.14.0 INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The Company measures its investments in subsidiaries, associates and joint ventures at cost less impairment. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. If any such indication of impairment exists, the Company makes an estimate of its recoverable amount. Where the carrying amount of an investment exceeds its recoverable amount, the investment is considered impaired and is written down to its recoverable amount.

1.15.0 FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

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 is appropriate, on initial recognition.

1.15.1 FINANCIAL ASSETS

1.15.1.1 INVESTMENT IN SECURITIES

All regular purchases or sales of financial assets are recognized and de-recognized on a trade date basis.

All recognized financial assets are subsequently measured in their entirety either at amortized cost or fair value, depending on the classification of the financial assets

1.15.1.1.1 CLASSIFICATION OF FINANCIAL ASSETS

(i) Debt instruments that meet the following conditions are subsequently measured at amortized cost less impairment loss (except for debt investments that are designated as at Fair Value Through Profit or Loss (FVTPL) on initial recognition):

a) the asset is held within a business model whose objective is to hold assets till maturity in order to collect contractual cash flows; and

b) the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(ii) Debt instruments that meet the following conditions are subsequently measured at Fair Value Through Other Comprehensive Income (except for debt investments that are designated as at FVTPL on initial recognition):

a) the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and

b) the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(iii) Debt instruments that do not meet the criteria of amortized cost or Fair Value through Other Comprehensive Income (FVTOCI) are measured at FVTPL.

(iv) All other financial assets are subsequently measured at fair value through Profit or Loss.

1.15.1.1.2 AMORTISED COST AND EFFECTIVE INTEREST METHOD

The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash flows (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Income is recognized in the statement of profit & loss under investment income on an effective interest basis for debt instruments other than those financial assets classified as FVTPL.

1.15.1.1.3 INVESTMENTS IN EQUITY INSTRUMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (FVTOCI)

On initial recognition, the Company can make an irrevocable election (on an instrument-by-instrument basis) to present the subsequent changes in fair value in other comprehensive income for equity instruments that are not held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity under subhead Equity instruments through other comprehensive income. The cumulative gain or loss is not reclassified to profit or loss on disposal of the investments.

Dividends on these investments in equity instruments are recognized in the Statement of Profit and Loss when the Company’s right to receive the dividends is established and it does not represent a recovery of part of cost of the investment.

1.15.1.2 CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash at bank and in hand, including offsetting bank overdrafts, and short-term highly liquid investments that are readily convertible to known amounts of cash, are subject to an insignificant risk of changes in fair value and have a maturity of three months or less from the acquisition date.

1.15.1.3 TRADE RECEIVABLES

Trade receivables are recognized initially at fair value based on amounts exchanged and subsequently at the amortized cost less any impairment.

1.15.1.4 IMPAIRMENT OF FINANCIAL ASSETS

The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since its initial recognition. If the credit risk on a financial instrument has not increased significantly since its initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.

However, for trade receivables or contract assets that result in relation to revenue from contracts with customers, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

1.15.1.5 DE-RECOGNITION OF FINANCIAL ASSETS

The Company de-recognizes 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 de-recognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset.

1.15.2 FINANCIAL LIABILITIES AND EQUITY INSTRUMENTS

1.15.2.1 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 recognized at the proceeds received, net of direct issue costs.

1.15.2.2 FINANCIAL LIABILITIES

All financial liabilities are subsequently measured at amortized cost using the effective interest method or at FVTPL. However, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.

1.15.2.2.1 FINANCIAL LIABILITIES AT FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL.

1.15.2.2.2 FINANCIAL LIABILITIES SUBSEQUENTLY MEASURED AT AMORTIZED COST

Financial liabilities that are not held-for-trading and not designated as at FVTPL are measured at amortized cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortized cost are determined based on the effective interest method. Interest expense that is not capitalized as part of costs of an asset is included in the ‘finance costs’ line item.

The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

1.15.2.2.3 FINANCIAL GUARANTEE CONTRACTS

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.

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:

a) the amount of loss allowance determined in accordance with impairment requirements of Ind AS 109; and

b) the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of Ind AS 18 or the amount initially recognised less, when appropriate, the cumulative amount of finance income recognized which measured by amortizing the initial fair value of guarantee on a straight line basis over the guarantee period.

1.15.2.2.4 DE-RECOGNITION OF FINANCIAL LIABILITIES

The Company derecognises financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability de-recognised and the consideration paid and payable is recognised in profit or loss.

1.16.0 INTEREST IN JOINT OPERATIONS

Production Sharing Contracts (PSCs) executed with the Government of India / Government of Foreign Countries by the Company along with other entities to undertake exploration, development and production of Oil and/or Gas activities under a joint venture in various concessions/block/area are accounted as under:

The financial statements reflect the share of the Company’s assets, liabilities and also the income and expenditure of the Joint Venture in proportion to the participating interest of the Company as per the terms of the PSCs, on a line by line basis. Depreciation, depletion and impairment and value of Stock of Crude Oil are accounted for as per the relevant accounting policies of the Company. Proved Developed Reserve of Oil & Gas in such concessions/block/area is also considered in proportion to participating interest of the Company. Consideration recoverable from new Joint Venture Partners for the right to participate in operations is reduced from respective assets and/or expenditure to the extent of the new partner’s contribution towards past cost and balance is considered as miscellaneous receipts/expenses.

1.17.0 SEGMENT ACCOUNTING

Considering the nature and associated risks and return of products & services, the Company has adopted its products & services (viz. Crude Oil, Natural Gas, LPG and Pipeline Transportation) as the primary reporting segments. There are no reportable geographical segments.

Segment assets, liabilities, income and expenses have been either directly identified or allocated to the segments on the basis usually followed for allocation of cost adopted for preparing and presenting the financial statements of the Company.

1.18.0 EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.19.0 DIVIDEND

The final dividend on shares is recorded as a liability on the date of approval by shareholders, and interim dividends are recorded as a liability on the date of declaration by the Company’s board of directors.

1.20.0 CONTINGENT LIABILITIES AND CONTINGENT ASSETS

(i) Contingent liabilities, if material, are disclosed by way of notes to the accounts.

(ii) Contingent assets are not recognized but disclosed in the financial statements along with an estimate of their financial effect where an inflow of economic benefits is probable and where practicable.

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Mar 31, 2017

1.1.1 STATEMENT OF COMPLIANCE

The financial statements have been prepared in accordance with the Companies Act 2013 and in compliance with the Indian Accounting Standards (Ind AS) issued by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules,20l5 as amended.

1.1.2 BASIS OF PREPARATION

These financial statements are prepared in accordance with Indian Accounting standards (Ind AS) effective for the year ending 31^st March,2017 and under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the provisions of the Companies Act, 2013(''the Act'') (to the extent notified) The Ind ASs are prescribed under section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting standards) Amendment Rules, 2016.

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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date on such basis as provided under Ind AS 113.

The Company has adopted all the Ind AS and the adoption was carried out in accordance with Ind AS 101, First Time adoption of Indian accounting standards. The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under section 133 of the Act, read with Rule 7 of the Companies (accounts) Rules, 2014 (IGAAP), which was the previous GAAP. Reconciliation and descriptions of the effect of the transition has been summarized in Note 40.13.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

As the quarter and year figures are taken from the sources and rounded to the nearest two decimals, the figures already reported for all the quarters during the year might not always add up to the year figures reported in the statement.

As the operating cycle cannot be identified in normal course due to the special nature of industry, the same has been assumed to have duration of 12 months. Accordingly, all assets and liabilities have been classified as current or non-current as per the Company''s operating cycle and other criteria set out in Ind AS-l "Presentation of Financial Statements" and Schedule III to the Companies Act, 2013.

1.1.3 USE OF ESTIMATES

The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. The application of accounting policies that requires critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed in Note 1.1.4. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the management becomes aware of the changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

1.1.4 MAJOR JUDGMENTS, ASSUMPTIONS AND ACCOUNTING ESTIMATES

A. ESTIMATION OF OILAND GAS RESERVES

The estimation of oil and gas reserves is key factor in the accounting for oil and gas producing activities. Oil and gas reserves are estimated by analysis of geosciences and engineering data using Deterministic Method. Production pattern analysis, number of additional wells to be completed, application of recovery techniques, validity of mining lease agreements, agreements/MOU for sales etc. influence the estimation of reserves. Unit-of-production depreciation, depletion and amortization charges are principally measured based on management''s estimates of proved developed oil and gas reserves. Also, exploration drilling costs are capitalized pending the results of further exploration or appraisal activity, which may take several years to complete and before any related proved reserves can be booked.

B. Impairment of assets

As part of the determination of the recoverable value of assets of cash generating units for impairment, the estimates, assumptions and judgments mainly concern oil and gas prices scenarios, operating costs, production volumes and oil and gas proved reserves. The discount rate used for estimating the value in use is reviewed annually. Changes in assumptions could affect the carrying amounts of assets, and any impairment losses and reversals will affect the revenues.

C. EMPLOYEE BENEFITS

The benefit obligations and plan assets can be subject to significant volatility due to changes in market values and actuarial assumptions. These assumptions vary between different pension plans and thus take into account market conditions. They are determined following actuarial valuation method certified by external independent actuarial valuer.

The assumptions for each plan are reviewed annually and adjusted if necessary to reflect changes from the experience and actuarial advices.

D. ASSET RETIREMENT OBLIGATIONS

Asset retirement obligations, which result from a legal or constructive obligation, are recognized based on a reasonable estimate in the period in which the obligation arises. This estimate is based on information available in terms of costs and work program. It is regularly reviewed to take into account the changes in laws and regulations, the estimated useful life of fields based on proved and probable oil and gas reserves and current production off-take, the analysis of site conditions and technologies, risk adjusted discount rate. Such estimates can differ from estimates due to changes in the aforesaid factors. The risk adjusted discount rate used for estimating the present value of obligation is reviewed annually.

E. TAXATION

Tax liabilities are recognized when it is considered probable that there will be a future outflow of funds to a taxing authority. In such cases, provision is made for the amount that is expected to be settled, where this can be reasonably estimated. This requires the application of judgment as to the ultimate outcome, which can change over time depending on facts and circumstances. A change in estimate of the likelihood of a future outflow and/or in the expected amount to be settled would be recognized in income in the period in which the change occurs.

Deferred tax assets are recognized only to the extent it is considered probable that those assets will be recoverable. This involves an assessment of when those assets are likely to reverse, and a judgment as to whether or not there will be sufficient taxable profits available to offset the assets when they do reverse. This requires assumptions regarding future profitability and is therefore inherently uncertain. To the extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognized in respect of deferred tax assets as well as in the amounts recognized in income in the period in which the change occurs.

1.2. REVENUE RECOGNITION

1.2.1 SALE OF PRODUCTS

(i) Revenue from the sale of goods is recognized at the time when the following conditions are satisfied:

- the Company has transferred to the buyer the significant risks and rewards of ownership of the goods;

- the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

- the amount of revenue can be measured reliably;

- it is probable that the economic benefits associated with the transaction will flow to the Company; and

- the costs incurred or to be incurred in respect of the transaction can be measured reliably.

(ii) Revenue is measured at the fair value of the consideration received or receivable and represents amounts received or receivable for goods provided in the normal course of business which is net of all statutory levies recovered or recoverable from the customers and net of discounts & Company''s share of profit petroleum paid to Government of India (GOI).

(iii) Any retrospective revision in prices is accounted for in the year of such revision.

(iv) Claims on Central Government / Petroleum Planning & Analysis Cell (PPAC) towards gas pool revenue are accrued based on quantity delivered to the customers at discounted price, in respect of which revenue has been recognized as per note no. 1.2.10 above.

(v) Revenue in respect of short lifted quantity of Crude Oil & Natural Gas, if any, is recognized when there is reasonable certainty of ultimate realization of the same.

1.2.2 SALE OF SERVICES

Revenue from sale of services such as transportation of crude oil, products, natural gas, etc is recognized when service is rendered in line with the agreements.

1.2.3 OTHERS

(i) Revenue from sale of Renewable Energy Certificates (REC) is recognized on sale of the certificates through the Exchange and included under other operating revenue.

(ii) Revenue on account of reimbursable subsidies/grants and interest on delayed realization from customers are recognized when there is reasonable certainty of ultimate realization.

(iii) Dividend income is recognized when the right to receive the dividend is established.

(iv) Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company and can be measured reliably. Interest income is recognized on a time proportion basis taking into account the amount outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through expected life of the financial asset to that asset''s net carrying amount on initial recognition.

(v) Recovery of liquidated damages is recognized in the Statement of Profit & Loss as income at the time of occurrence except in case of Joint Venture Contracts (JVC) which are governed by the respective Production Sharing Contracts. In case of return/refund of the liquidated damages, the same is accounted for as other expenses. In case of any dispute over the liquidated damages, provision is created in the accounts.

(vi) Insurance claim other than that for transit loss of stores items are accounted for on final acceptance by the Insurance Company.

1.3.LEASING

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

1.3.1 THE COMPANY AS LESSOR

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight-line basis over the lease term.

1.3.2 THE COMPANY AS LESSEE

Operating lease payments are recognized as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

In the event that lease incentives are received to enter into operating leases, such incentives are recognized as a liability. The aggregate benefit of incentives is recognized as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.4.0 FOREIGN CURRENCY TRANSACTIONS AND TRANSLATIONS

The functional currency of the Company is the Indian Rupee. The financial statements are presented in Indian Rupees.

(i) In preparing the financial statements of the Company, transactions in currencies other than the entity''s functional currency (foreign currencies) are recognized 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 retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rate prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

(ii) Transaction gains and losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled. Revenue, expense and cash-flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction.

(iii) Exchange differences on monetary items are recognized in the statement of profit and loss in the period in which they arise except for:

(a) Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;

(b) In accordance with para D13M of Ind AS 101, First-time Adoption of Indian Accounting Standards the Company continues to exercise policy adopted under previous IGAAP and accordingly exchange differences on long-term foreign currency monetary items relating to acquisition of depreciable and other assets were adjusted to the carrying cost of the assets and depreciated over the balance life of the assets and in other cases, exchange differences were accumulated in a "Foreign Currency Monetary Item Translation Difference Account" and amortized over the balance period of such long term foreign currency monetary item by recognition as income or expense in each of such periods in respect of items recognized in the financial statement for the period ending immediately before the beginning of the first Ind AS financial reporting period as per previous GAAP i,e; 31^st March 2016 as reported date.

1.5.0 BORROWING COSTS

(i) Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale and also includes exchange difference arising from Foreign Currency borrowings to the extent that they are regarded as an adjustment to interest cost.

(ii) All other borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.

1.6.0 GOVERNMENT GRANTS

(i) Government grants are recognized when there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.

(ii) Government grants are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes as expenses the related costs for which the grants are intended to compensate. Government grants with the primary condition that the Company should purchase, construct or otherwise acquire non-current assets are recognized as deferred revenue in the balance sheet and transferred to the statement of profit and loss on a systematic and rational basis over the useful lives of the related assets.

1.7.0 EMPLOYEE BENEFITS

1.7.1 RETIREMENT BENEFIT COSTS AND TERMINATION BENEFITS:

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered service entitling them to the contributions.

The cost of providing benefits under defined benefit plans (such as gratuity, leave encashment, post retirement medical benefits, defined benefit pension schemes) is determined separately for each plan using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. This attributes the increase in present value of the defined benefit obligation resulting from employee service in the current period to determine current service cost. The current service cost as stated above and past service costs, resulting from either a plan amendment (a reduction in future obligations as a result of a material reduction in the number of employees covered by the plan), are recognized in the statement of profit and loss under ''employee benefits expense''.

Net interest which is recognized in the statement of profit and loss under ''employee benefits expense'' represents the net change in present value of plan obligations and the value of plan assets resulting from the passage of time, and is determined by applying the discount rate to the present value of the benefit obligation at the start of the year, and to the fair value of plan assets at the beginning of the year, taking into account expected changes in the obligation or plan assets during the year.

Re-measurement of the defined benefit liability and asset, comprising actuarial gains and losses, and the return on plan assets (excluding amounts included in net interest described above) are recognized in other comprehensive income in the period in which they occur and are not subsequently reclassified to the statement of profit and loss.

The defined benefit pension plan surplus or deficit recognized in the balance sheet for each plan comprises the difference between the present value of the defined benefit obligation and the fair value of plan assets out of which the obligations are to be settled directly. Defined benefit pension plan surpluses are only recognized to the extent they are recoverable, naturally by way of refund or reductions in future contributions to the plans.

1.7.2 SHORT-TERM AND OTHER LONG-TERM EMPLOYEE BENEFITS

A liability is recognized for benefits accruing to employees in respect of wages and salaries (including performance related pay), annual leave, sick leave and social security contribution in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

1.8.0 TAXATION

Income tax expense represents the aggregate of current tax and deferred tax.

1.8.1 CURRENT TAX

Current tax is the amount of income tax payable based on taxable profit for the period. 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 and the tax laws that have been enacted or substantively enacted by the end of the reporting period.

1.8.2 DEFERRED TAX

(i) Deferred tax 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 recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

(ii) 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 the benefits of all or part of the deferred tax asset to be utilized. Any such reduction shall be reversed to the extent that it becomes probable that sufficient taxable profit will be available.

(iii) 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 realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

(iv) Minimum Alternate Tax (''MAT'') under the provisions of the Income Tax Act, 1961 is recognized as current tax in the statement of profit and loss. The credit available under the Income Tax Act, 1961 in respect of MAT paid is recognized as an asset only when and to the extent there is convincing evidence that the individual Company will pay normal income tax during the period for which the MAT credit recognized as an asset is reviewed at each balance sheet date and written down to the extent the aforesaid convincing evidence no longer exists.

1.8.3 CURRENT AND DEFERRED TAX FORTHEYEAR

Current and deferred tax are recognized in the statement of profit and loss, except when they relate to items that are recognized in other comprehensive income, in which case, the current and deferred tax are also recognized in other comprehensive income.

1.9.0 OIL AND GAS EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITURE

The Company follows the Successful Efforts Method (SEM) of accounting in respect of its oil and gas exploration and production activities in accordance with Ind AS 106 and the "Guidance Note on Accounting for Oil & Gas Producing Activities (Ind AS)" issued by the Institute of Chartered Accountants of India.

1.9.1 PRE-ACQUISITION, ACQUISITION, EXPLORATION & EVALUATION COSTS

(i) Pre-Acquisition costs: Pre-Acquisition costs of revenue nature incurred prior to obtaining the rights to explore, develop and produce Oil & Gas like data collection & analysis cost etc. are expensed to the Statement of Profit and Loss in the year of incidence.

(ii) Acquisition Costs:

(a) Acquisition costs include land acquired for drilling operations including cost of temporary occupation of the land, crop compensation paid to farmers, registration fee, legal cost, signature bonus, brokers'' fees, consideration for farm-in arrangements and other costs incurred in acquiring mineral rights.

(b) These costs are initially recorded under Exploration & Evaluation Assets (Intangible) except cost of land acquired for drilling operations which are shown as Acquisition cost-land under capital work in progress.

(c) On determination of proved developed reserves, associated acquisition costs are transferred to Property, Plant & Equipment as Oil & Gas assets.

(d) Acquisition cost relating to an exploratory well that is determined to have no proved reserves and its status is decided as dry or of no further use for exploration purpose, is charged as expenses. In such cases, for land value forming part of acquisition cost, a nominal amount of Rs,lOO per bigha is transferred to Freehold land under Property, Plant & Equipment.

(e) Cost for retaining the mineral interest in properties like lease carrying cost, license fees & other cost are charged as expense when incurred.

(iii) Exploration & Evaluation Cost (E&E cost):

(a) Geological and geophysical costs, including seismic surveys for exploration purposes are expensed as incurred.

(b) Costs including allocated depreciation on support equipment and facilities involved in drilling and equipping exploratory and appraisal wells and cost of exploratory-type drilling stratigraphic test wells are initially shown as Exploration & Evaluation Assets (Intangible) till the time these are either transferred to Property, Plant & Equipment as Oil & Gas assets on establishment of Proved Developed Reserves or charged as expense when determined to be dry or of no further use.

(c) E&E costs related to each exploratory well are not carried over unless it could be reasonably demonstrated that there are indications of sufficient quantity of reserves and activities are firmly planned in near future for further assessing the reserves and economic & operating viability of the project. Costs of written off exploratory wells are not reinstated in the books even if they start producing subsequently.

1.9.2 DEVELOPMENT COST

Costs that are attributable to development activities including production and processing plant & facilities, service wells including allocated depreciation on support equipment and facilities are initially shown under Capital Work in Progress as Development Cost till such time they are capitalized as Oil & Gas Asset under Property, Plant & Equipment on establishment of

Proved Developed Reserves. Cost of dry development well, if any is capitalized as Oil & Gas Asset under Property, Plant & Equipment upon completion of the well.

1.9.3 PRODUCTION COST

Production Cost consist of direct and indirect costs incurred to operate and maintain wells and related equipment and facilities, including depreciation and applicable operating cost of support equipment and facilities.

1.9.4 SIDE-TRACKING EXPENDITURE

In case of exploratory wells, the cost of abandoned portion of side tracked well is charged off to Profit and Loss statement. In case of development wells, the entire cost of abandoned portion and side- tracking is capitalized. In case of existing producing wells, the cost of side - tracking is capitalized if it increases the proved developed reserves, otherwise is charged off to Statement of Profit and loss.

1.10.0 RESEARCH & DEVELOPMENT EXPENDITURE

All revenue expenditure incurred for Research & Development Projects/Schemes, net of grants-in-aid (other than those related to asset) if any, are charged to the Statement of Profit and Loss.

1.11.1 PROPERTY, PLANT AND EQUIPMENT (PPE)

(i) Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment losses. The initial cost of an asset comprises its purchase price including import duties and non-refundable purchase taxes or construction cost, any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation wherever applicable and eligible borrowing costs. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset. Assets in the course of construction are initially kept under assets under construction and capitalized when the assets are available for use in the manner as intended by the management.

(ii) Cost of day-to-day servicing of property, plant and equipment are recognized in the Statement of Profit and Loss as incurred. Major shut-down and overhaul expenditure is capitalized as the activities undertaken to improve the economic benefits expected to arise from the asset. Where an asset or part of an asset that was separately depreciated is replaced and it is probable that future economic benefits associated with the item will flow to the Company, the expenditure is capitalized and the carrying amount of the replaced asset is derecognized. Inspection costs associated with major maintenance programs from which future economic benefits are expected to flow, are capitalized and amortized over the period to the next inspection.

(iii) Oil and gas assets which comprise of producing wells, related acquisition cost and production facilities are depleted using a unit-of-production method except in cases where life of assets is lower than life of the field. The cost of producing wells and production facilities are depleted over proved developed reserves. Acquisition cost is depleted over total proved reserves. Rate of depletion is determined based on production from the Oil/Gas field or a group of Oil/Gas fields identified to the related reserves having homogeneous geological feature. Estimation of oil and natural gas reserves are done annually at the year end and the impact of changes in the estimated proved reserves is dealt with prospectively by depleting the remaining carrying value of the asset.

(iv) Other property, plant and equipment are depreciated based on useful life of the asset under "Written down value method" as specified in Schedule II to the Companies Act., 2013. When any part of an item of property, plant and equipment, has different useful life and cost is significant in relation to the total cost of the asset, they are accounted for and depreciated separately. Depreciation on additions / deletions during the year is provided on pro rata basis with reference to the date of additions / deletions except low value items not exceeding Rs, 5,000 which are fully depreciated at the time of addition. The typical useful lives of other major property, plant and equipment are as follows:

Buildings 30 to 60 years

Plant & Machinery 10 to 40 years

Furniture and fixtures 8 to 10 years

Office equipments 3 to 10 years

Vehicles 8 to 10 years

Railway sidings 15 years

(v) The expected useful lives of property, plant and equipment other than Oil and gas assets are reviewed on an annual basis and, if necessary, impact arising out the changes in useful lives are accounted for prospectively.

(vi)An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the income statement in the period in which the item is derecognized. Any Tangible asset, when determined of no further use, is deleted from the Gross Block of assets. The deleted assets are carried as ''Assets awaiting disposal'' under Inventories at lower of Rs,1000 or 5% of the original cost and the balance written down value, is charged off.

(vii) Physical verification of the property, plant and equipment is carried out by the Company in a phased manner to cover all the items over a period of five years. The discrepancies noticed, if any, are accounted for in the year in which such differences are found.

1.11.2 INTANGIBLE ASSETS

Costs of intangible assets are capitalized when the asset is ready for its intended use.

Intangible assets include expenditure on computer software, and right to way/right of use of land and are stated at the amount initially recognized less accumulated amortization and accumulated impairment losses.

Cost of right of use / right of way of land is amortized on a straight line basis over the lower of period of such rights or useful life of the related asset for which right of use / right of way is taken. Cost of computer software is amortized over the useful life not exceeding five years from the date of capitalization.

Any intangible asset, when determined of no further use, is written off.

1.11.3 IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT (PPE), E&E ASSETS, INTANGIBLE ASSETS OTHER THAN GOODWILL.

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant & equipment (including capital work in progress) to determine whether there is any indication that those assets have suffered an impairment loss. For this purpose Producing fields, LPG plant. Transportation Pipeline and Power Generating Units (other than captive power plants) are considered as Cash Generating Units (CGU). If any such indication exists, the recoverable amount of the CGU is estimated in order to determine the extent of the impairment loss (if any). Corporate assets and common service assets are also allocated to individual cash-generating units on a reasonable and consistent basis.

Intangible assets are tested for impairment annually. Whenever there is an indication that the asset may be impaired, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

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 a CGU is estimated to be less than its carrying amount, the carrying amount of the asset or group of assets covered under the CGU is reduced to its recoverable amount. An impairment loss is recognized immediately in the statement of profit and loss.

E&E Assets are reviewed for indicators of impairment as per Ind AS 106 and if events and circumstances suggest, impairment loss is provided for and carrying amount is reduced accordingly.

When an impairment loss is subsequently reversed, the carrying amount of the asset or group of assets covered under the CGU is increased to the revised estimate of its recoverable amount, so however that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or group of assets covered under the CGU in prior years. A reversal of an impairment loss is recognized immediately in the Statement of Profit and Loss.

1.12.0 INVENTORIES

Finished goods of Crude Oil, Liquefied Petroleum Gas (LPG) and LPG condensate are valued at cost or net realizable value, whichever is lower. Cost of finished goods is determined based on direct cost and directly attributable services cost including depreciation & depletion. The value of such inventories includes excise duty and royalty (wherever applicable). Net realizable value represents the estimated selling price for inventories less all costs necessary to effect the sale.

Crude oil in unfinished condition in the flow line up to Group Gathering Station and Natural Gas in Pipeline are not valued, as these pipeline fills are necessary to the operation of the facility.

Stores and spares are valued at weighted average cost or net realizable value whichever is lower. Obsolete / unserviceable items, as and when identified, are written off. Any item of stores and spares including those in Storage Locations which have not moved for last four years as on date of Balance Sheet are identified as slow moving items for which a provision of 95% of the value is made in the accounts.

Renewable Energy Certificates (REC) received based on generation of renewable energy certified by the competent authority, held for trading are not valued.

1.13.1 PROVISIONS

Provisions are recognized when the Company has a present obligation as a result of a past event and it is probable that the Company will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognized 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. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

1.13.2 DECOMMISSIONING AND RESTORATION OBLIGATIONS

Full eventual liabilities towards costs relating to assets retirement obligations are recognized when the Company has an obligation to plug and abandon a well, dismantle and remove a facility or an item of plant and to restore the site on which it is located, and when a reliable estimate of that liability can be made. Liabilities towards costs relating to dismantling, abandoning and restoring well sites and associated Production Facilities are recognized at the commencement of drilling a well or when facilities are installed, as the case may be. The amount recognized is the present value of the estimated future expenditure determined in accordance with local conditions and requirements. The provision for the costs of decommissioning wells, production facilities including fields'' pipelines at the end of their economic lives is estimated using existing technology, at current prices or future assumptions, depending on the expected timing of the activity, and discounted using govt, bonds rate.

An amount equivalent to the decommissioning liability provision is recognized as part of the corresponding PPE or Exploration & Evaluation Asset (E&E) as the case may be.

Liability for decommissioning cost is updated annually based on the technical assessment available at current costs. The unwinding of the discount is included as a finance cost. Any change in the present value of the estimated future cash flow to settle the obligation due to change in measurement or discount rate shall be added to or deducted from the cost of the asset in the current period and would be considered for depreciation (depletion) prospectively.

Except in the case of E&E assets, the actual cost incurred on settlement of the obligation is adjusted against the liability and the ultimate gain or loss is recognized in the Statement of Profit and Loss, when the designated oil/gas field ora group of oil/gas fields ceases to produce.

1.14.0 INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINTVENTURES

The Company measures its investments in subsidiaries, associates and joint ventures at cost less impairment. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. If any such indication of impairment exists, the Company makes an estimate of its recoverable amount. Where the carrying amount of an investment exceeds its recoverable amount, the investment is considered impaired and is written down to its recoverable amount.

1.15.0 FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

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 is appropriate, on initial recognition.

1.15.1 FINANCIAL ASSETS

1.15.1.1 INVESTMENT IN SECURITIES

All regular purchases or sales of financial assets are recognized and de-recognized on a trade date basis.

All recognized financial assets are subsequently measured in their entirety either at amortized cost or fair value, depending on the classification of the financial assets

1.15.1.1.1 CLASSIFICATION OF FINANCIAL ASSETS

(i) Debt instruments that meet the following conditions are subsequently measured at amortized cost less impairment loss (except for debt investments that are designated as at Fair Value Through Profit or Loss (FVTPL) on initial recognition):

a) the asset is held within a business model whose objective is to hold assets till maturity in order to collect contractual cash flows; and

b) the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(ii) Debt instruments that meet the following conditions are subsequently measured at Fair Value Through Other Comprehensive Income (except for debt investments that are designated as at FVTPL on initial recognition):

a) the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and

b) the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(iii) Debt instruments that do not meet the criteria of amortized cost or Fair Value through Other Comprehensive Income (FVTOCI) are measured at FVTPL.

(iv) AlI other financial assets are subsequently measured at fair value through Profit or Loss.

1.15.1.1.2 AMORTISED COST AND EFFECTIVE INTEREST METHOD

The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash flows (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Income is recognized in the statement of profit & loss under investment income on an effective interest basis for debt instruments other than those financial assets classified as FVTPL.

1.15.1.1.3 INVESTMENTS IN EQUITY INSTRUMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (FVTOCI)

On initial recognition, the Company can make an irrevocable election (on an instrument-by-instrument basis) to present the subsequent changes in fair value in other comprehensive income for equity instruments that are not held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity under subhead Equity instruments through other comprehensive income. The cumulative gain or loss is not reclassified to profit or loss on disposal of the investments.

Dividends on these investments in equity instruments are recognized in the Statement of Profit and Loss when the Company''s right to receive the dividends is established and it does not represent a recovery of part of cost of the investment.

1.15.1.2 CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash at bank and in hand, including offsetting bank overdrafts, and short-term highly liquid investments that are readily convertible to known amounts of cash, are subject to an insignificant risk of changes in fair value and have a maturity of three months or less from the acquisition date.

1.15.1.3 TRADE RECEIVABLES

Trade receivables are recognized initially at fair value based on amounts exchanged and subsequently at the amortized cost less any impairment.

1.15.1.4 IMPAIRMENT OF FINANCIAL ASSETS

The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since its initial recognition. If the credit risk on a financial instrument has not increased significantly since its initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.

However, for trade receivables or contract assets that result in relation to revenue from contracts with customers, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

1.15.1.5 DE-RECOGNITION OF FINANCIAL ASSETS

The Company de-recognizes 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 de-recognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset.

1.15.2 FINANCIAL LIABILITIES AND EQUITY INSTRUMENTS 1.15.2.1 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 a Company are recognized at the proceeds received, net of direct issue costs.

1.15.2.2 FINANCIAL LIABILITIES

All financial liabilities are subsequently measured at amortized cost using the effective interest method or at FVTPL. However, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.

1.15.2.2.1 FINANCIAL LIABILITIES AT FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL.

1.15.2.2.2 FINANCIAL LIABILITIES SUBSEQUENTLY MEASURED AT AMORTIZED COST

Financial liabilities that are not held-for-trading and not designated as at FVTPL are measured at amortized cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortized cost are determined based on the effective interest method. Interest expense that is not capitalized as part of costs of an asset is included in the ''finance costs'' line item.

The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

1.15.2.2.3 FINANCIAL GUARANTEE CONTRACTS

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.

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

a) the amount of loss allowance determined in accordance with impairment requirements of Ind AS 109; and

b) the amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with the principles of Ind AS 18 or the amount initially recognized less, when appropriate, the cumulative amount of finance income recognized which measured by amortizing the initial fair value of guarantee on a straight line basis over the guarantee period.

1.15.2.2.4 DE-RECOGNITION OF FINANCIAL LIABILITIES

The Company derecognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability de-recognized and the consideration paid and payable is recognized in profit or loss.

1.16.0 INTEREST IN JOINT OPERATIONS

Production Sharing Contracts (PSCs) executed with the Government of India/ Government of Foreign Countries by the Company along with other entities to undertake exploration, development and production of Oil and/or Gas activities under a joint venture in various concessions/block/area are accounted asunder:

The financial statements reflect the share of the Company''s assets, liabilities and also the income and expenditure of the Joint Venture in proportion to the participating interest of the Company as per the terms of the PSCs, on a line byline basis. Depreciation, depletion and impairment and value of Stock of Crude Oil are accounted for as per the relevant accounting policies of the Company. Proved Developed Reserve of Oil & Gas in such concessions/block/area is also considered in proportion to participating interest of the Company.

Consideration recoverable from new Joint Venture Partners for the right to participate in operations is reduced from respective assets and/or expenditure to the extent of the new partner''s contribution towards past cost and balance is considered as miscellaneous receipts/expenses.

1.17.0 SEGMENT ACCOUNTING

Considering the nature and associated risks and return of products & services, the Company has adopted its products & services (viz. Crude Oil, Natural Gas, LPG and Pipeline Transportation) as the primary reporting segments. There are no reportable geographical segments.

Segment assets, liabilities, income and expenses have been either directly identified or allocated to the segments on the basis usually followed for allocation of cost adopted for preparing and presenting the financial statements of the Company.

1.18.0 EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.19.0 DIVIDEND

The final dividend on shares is recorded as a liability on the date of approval by shareholders, and interim dividends are recorded as a liability on the date of declaration by the Company’s board of directors.

1.20.0 CONTINGENT LIABILITIES AND CONTINGENT ASSETS

(i) Contingent liabilities, if material, are disclosed by way of notes to the accounts.

(ii) Contingent assets are not recognized but disclosed in the financial statements along with an estimate of their financial effect where an inflow of economic benefits is probable and where practicable.

1.21.0 APPLICATION OF NEW OR REVISED IND AS

At the date of preparation of these financial statements, there were some amendments issued to the existing Ind ASs, after the initial notification issued by the Ministry of Corporate Affairs. MCA has notified Companies (Indian Accounting Standards) (Amendments) Rules, 2017, which are effective from April 1,2017. These rules bring in amendments to Ind AS 7, ''Statement of cash flows'' and Ind AS 102, ''Share-based payment''.

The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

6.1 The aggregate carrying value of unquoted investments is Rs, 10742.71 crore (as at 31.03.2016 Rs, 8659.83 crore and as at 01.04.2015 Rs,8377.3l crore).

6.2 The aggregate amount of quoted investments is Rs, 10058.42 crore (as at 31.03.2016Rs, 5439.24 crore and as at 01.04.2015Rs, 5014.42 crore).

6.3 The aggregate market value of quoted investments is Rs, 10150.44 crore (as at 31.03.2016Rs, 5497.98 crore and as at 01.04.2015Rs, 5192.14 crore).

(*) the increase in shares was due to issue of bonus shares.

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

6.8 Advance against acquisition of equity shares includes advances amounting to Rs, 0.06 crore (as at 31.03.2016 Nil and as at 01.04.2015 Rs, 0.16 crore), Rs, 590.04 crore (as at 31.03.2016 Nil and as at 01.04.2015 Rs, 69.64 crore), Rs, 51.56 crore (as at 31.03.2016 Rs, 486.25 crore and as at

6.4 The aggregate amount of impairment in value of investment is Rs, 174.00 crore (as at 31.03.2016 Rs, 174.00 crore andasat0l.04.2015 Nil).

6.5 The Fair Value of Financial Guarantee - Subsidiaries represents investment in M/s Oil India (USA) Inc. & Oil India International Pte. Ltd and Fair Value of Financial Guarantee - Associates represents investment in M/s Brahmaputra Cracker & Polymer Limited.

01.04.2015 Nil), Rs,2ll.22 crore (as at 31.03.2016 Rs, 210.53 crore and as at 01.04.2015 Rs, 210.05 crore), Rs, 0.51 crore (as at 31.03.2016 Nil and as at 01.04.2015 Nil) and Rs, 213.60 crore (as at 31.03.2016 Nil and as at

01.04.2015 Nil) paid to Oil India Cyprus Limited, Oil India (USA) Inc., Beas Rovuma Energy Mozambique Ltd, Oil India International B.V., Oil India Sweden AB and Oil India International Pte. Ltd. respectively pending allotment.

7.2 In January 2014, the Company acquired 40% shares in M/s. Beas Rovuma Energy Mozambique Limited (BREML), which holds 10% participating interest in the Rovuma Areal, Mozambique. Subsequent to the acquisition, the Company has been extending advances to BREML towards its share of expenditure in the project in Mozambique. However, at end of FY 2015-16, the Company has converted such advances paid to BREML into Advance for equity to be allotted with equity shares of BREML.

7.3Loans represent loans given to

(i) M/s Oil India International B.V.:

a) Rs, 294.44 crore (USD 45 million) {as at 31.03.2016Rs, 301.05 crore (USD 45 million) and as at 01.04.2015Rs, 176.93 crore (USD 28 million)} maturing on 7^th April, 2021, carries interest at 3 months LIBOR plus 5.65%.

b) Rs, 65.43 crore (USD 10 million) {as at 31.03.2016 Rs, 33.45 crore (USD 5 million) and as at 01.04.2015 Nil (USD Nil)} maturing on 7^th April, 2021, carries interest at 3 months LI BOR plus 8.65%.

c) Balance Rs, 44.50 crore (as at 31.03.2016 Rs, 20.74 crore and as at 01.04.2015 Rs, 3.58 crore) represents accrued interest on the loan and revaluation thereof.

(ii) M/s Suntera Nigeria 205 Ltd.:

a) Rs, 110.29 crore (USD 16.86 million) {as at 31.03.2016 Rs, 107.02 crore (USD 16 million) and as at 01.04.2015 Nil (USD Nil)}-(before impairment) maturing on 31^st January, 2022, carries interest at 8.75%.

b) Balance Rs, 62.64 crore (as at 31.03.2016 Rs, 54.53 crore and as at 01.04.2015 Nil) represents accrued interest on the loan and revaluation thereof.

c) No further allowances for doubtful loans during the year 2016-17 have been made beyond what was previously assessed as there being no indicators of further loss of future cash flows.

(iii) M/s Duliajan Numaligarh Pipeline Limited has prepaid the outstanding loan during the FY 2015-16.

(iv) M/s Brahmaputra Cracker & Polymer Limited has prepaid the outstanding loan during the FY 2016-17.

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Mar 31, 2015

1 ACCOUNTING CONVENTION:

The Financial Statements are prepared under the historical cost convention on accrual method of accounting, in accordance with the Generally Accepted Accounting Principles and complying with the mandatory Accounting Standards notified by the Government of India under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions and presentational requirement of the Companies Act, 2013.

2 CLASSIFICATION OF ASSETS & LIABILITIES:

All the Assets and Liabilities of the Company are segregated into Current & Non-current based on the principles and definitions as set out in the Schedule III to the Companies Act, 2013 as amended. The Company has adopted a period of 12 months as its Operating Cycle.

3 PRE-ACQUISITION COSTS, ACQUISITION

COSTS, EXPLORATION COSTS,

DEVELOPMENT COSTS AND ABANDONMENT COSTS :

The Company follows the "Successful Efforts Method" (SEM) of Accounting in respect of its oil and gas exploration and production activities in accordance with the "Guidance Note on Accounting for Oil & Gas Producing Activities" issued by the Institute of Chartered Accountants of India.

3.1 PRE-ACQUISITION COSTS:

Costs of revenue nature incurred prior to obtaining the rights to explore, develop and produce Oil & Gas like data collection & analysis cost etc. are expensed to the Statement of Profit and Loss in the year of incidence.

3.2 GEOLOGICAL & GEOPHYSICAL COSTS:

Geological and Geophysical expenditure are charged as expense when incurred.

.3 ACQUISITION COSTS:

i) Acquisition costs include land acquired for drilling operations including cost of temporary occupation of the land, crop compensation paid to farmers, registration fee, legal cost, signature

bonus, brokers' fees, consideration for farm-in arrangements and other costs incurred in acquiring mineral rights.

ii) Cost for retaining the mineral interest in properties like lease carrying cost, license fees & other cost are charged as expense when incurred.

iii) Acquisition costs are initially recorded under Capital work in progress-Tangible & Intangible as the case may be.

iv) On determination of proved developed reserves, associated acquisition costs are transferred to Fixed Assets- Producing Properties.

v) Acquisition cost of Producing Properties is capitalized under Fixed Asset-Producing Properties.

vi) Acquisition cost relating to an exploratory well that is determined to have no proved reserves and its status is decided as dry or of no further use for exploration purpose, is charged as expenses. In such cases, for land value forming part of acquisition cost, a nominal amount of Rs.100 per bigha is transferred to Freehold land under Fixed Assets.

3.4 EXPLORATION COSTS:

i) All exploration costs including allocated depreciation on support equipment and facilities involved in drilling and equipping exploratory and appraisal wells and cost of exploratory-type drilling stratigraphic test wells are initially shown as Intangible assets under Capital Work in Progress as exploration cost till the time these are either transferred to Fixed Assets as Producing Properties on determination of Proved Developed Reserves or charged as expense when determined to be dry or of no further use.

ii) Cost of exploratory wells are not carried over unless it could be reasonably demonstrated that there are indications

of sufficient quantity of reserves and activities are firmly planned in near future for further assessing the reserves and economic & operating viability of the project. Costs of written off exploratory wells are not reinstated in the book even if they start producing subsequently.

3.5 DEVELOPMENT COSTS:

Costs that are attributable to development activities including production and processing plant & facilities, service wells including allocated depreciation on support equipment and facilities are initially shown as Tangible Assets under Capital Work in Progress as Development Cost till such time they are capitalized as Producing Properties upon determination of Proved Developed Reserves.

3.6 PRODUCTION COSTS:

Production Cost consist of direct and indirect costs incurred to operate and maintain wells and related equipments and facilities, including depreciation and applicable operating cost of support equipment and facilities.

3.7 SIDE-TRACKING EXPENDITURE:

In case of exploratory wells, the cost of abandoned portion of side tracked well is charged off to Profit and Loss statement. In case of development wells, the entire cost of abandoned portion and side-tracking is capitalized. In case of existing producing wells the cost of side - tracking is capitalized if it increases the proved developed reserves, otherwise is charged off to Profit and loss statement.

3.8 ABANDONMENT COSTS:-

i. Estimated full eventual liability towards costs relating to dismantling, abandoning and restoring well sites and associated Production Facilities are recognized at the commencement of drilling a well or when facilities are installed, as the case may be. Liability for abandonment cost is updated annually based on the technical assessment available at current costs.

ii. The actual cost incurred on abandonment is adjusted against the liability and the ultimate gain or loss is recognized in the Statement of Profit and Loss, when the designated oil/gas field or a group of oil/ gas fields ceases to produce.

4 FIXED ASSETS, DEPRECIATION & DEPLETION

4.1 TANGIBLE ASSETS:

i) Cost of Freehold & Leasehold land which are perpetual in nature used for other than exploration and development activity are not amortized. Leasehold land other than perpetual lease is amortized over the lease period.

ii) All successful exploratory well cost, development well cost and other development cost viz. Production Facilities are capitalized when the same is ready to commence commercial production.

iii) Costs relating to acquisition/ construction of tangible assets other than producing properties are capitalized on commissioning.

iv) Land acquired on perpetual lease as well as on lease over 99 years is treated as free hold land and not amortized.

v) Land acquired on lease for 99 years or less is treated as leasehold land and amortised over the lease period.

vi) Any Tangible asset, when determined of no further use, is deleted from the Gross Block of assets. The deleted assets are carried as 'Assets awaiting disposal' under Inventories at lower of Rs.1000 or 5% of the original cost and the balance Written down Value, is charged off.

vii) Physical verification of the fixed assets is carried out by the Company in a phased manner to cover all the items over a period of five years. The discrepancies, if any, noticed are accounted for after reconciliation of the same.

4.2 INTANGIBLE ASSETS:

i) Costs of intangible assets are capitalized when the asset is ready for its intended use.

ii) Cost of right of use/right of way for laying pipelines is capitalized and amortized on a straight line basis over the period of such right of use / right of way or 99 years whichever is lower, as per industry practice.

iii) Cost incurred on computer software purchased /developed are capitalized as intangible asset and amortized over the useful life not exceeding five years from the date of capitalization.

iv) Any intangible asset, when determined of no further use, is written off.

4.3 DEPRECIATION:

i) Depreciation on Tangible Assets other than Producing Properties is provided for under the "Written down Value Method", in the manner specified in Schedule II to the Companies Act, 2013.

ii) Capital assets costing up to Rs. 5000 each are fully depreciated in the year of acquisition.

4.4 DEPLETION:

i) Acquisition Costs are depleted using the "Unit of Production Method" with reference to the ratio of production and related Proved reserves.

ii) Producing Wells and Production Facilities are depleted using the "Unit of Production Method", with reference to ratio of production and the related Proved Developed Reserves.

iii) Rate of depletion is determined based on production from the Oil/Gas field or a group of Oil/Gas fields identified with reference to the related reserves having common geological feature.

5 FOREIGN CURRENCY TRANSLATION

(i) Foreign currency transactions are initially recognised and accounted for at the exchange rates prevailing at the dates of transactions.

(a) Foreign Currency monetary assets &

liabilities outstanding at the close of the

year are translated at the rates of exchange prevailing at the date of Balance Sheet. Resultant gains or loss is accounted for during the year, except those relating to long-term foreign currency monetary items.

(b) Exchange differences on long-term foreign currency monetary items relating to acquisition of depreciable assets are adjusted to the carrying cost of the assets and depreciated over the balance life of the assets in line with para 46A of Accounting Standard-11. In other cases, exchange differences are accumulated in a "Foreign Currency Monetary Item Translation Difference Account" and amortised over the balance period of such long term foreign currency monetary item by recognition as income or expense in each of such periods.

(ii) Foreign currency transactions in relation to Joint Venture (Overseas) are treated in the following manner:

(a) Foreign currency transactions are initially recognised and accounted for at the exchange rates prevailing at the dates of transactions. However, the average exchange rate of relevant month is taken for the transactions of that month, where actual rate of transaction is not available or at the rate as agreed otherwise.

(b) Foreign Currency monetary assets & liabilities outstanding at the close of the year are translated at the rates of exchange prevailing at the date of Balance Sheet. Resultant gains or loss is accounted for during the year.

6 IMPAIRMENT OF ASSETS:

(i) Acquisition costs, pending capitalization to Producing Properties and exploration costs under Intangible Assets-Capital Work in Progress are reviewed for indicators of impairment and if events and circumstances suggest, impairment loss is provided for and carrying amount is reduced accordingly.

(ii) Producing fields, LPG Plant, Transportation Pipeline and Power Generating Units (other than Captive Power Plants) are considered as Cash Generating Units. A "Cash Generating Unit" is reviewed for impairment at each Balance Sheet date. An impairment loss is recognized, whenever the carrying amount of assets exceeds the recoverable amount by writing down such assets to their recoverable amount.

An impairment loss is reversed if there is change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective assets. Impairment testing is normally carried out at the year-end unless compelling circumstances exist for review during the course of the year.

7 JOINT VENTURES:

Production Sharing Contracts (PSCs) executed with the Government of India / Government of Foreign Countries by the company along with other entities to undertake exploration, development and production of Oil and/or Gas activities under a joint venture in various concessions/block/area are accounted as under:

(i) The financial statements reflect the share of the Company's assets, liabilities and also the income and expenditure of the Joint Venture in proportion to the participating interest of the Company as per the terms of the PSCs, on a line by line basis. Depreciation, depletion and impairment and value of Stock of Crude Oil are accounted for as per the relevant accounting policies of the Company whereas provision for abandonment is created as per terms of PSC. Proved Developed Reserve of Oil & Gas in such concessions/block/area are also considered in proportion to participating interest of the Company.

(ii) Consideration recoverable from new Joint Venture Partners for the right to participate in operations are:

a) Reduced from respective assets and/or expenditure to the extent of the new partners contribution towards past cost,

b) Balance is considered as miscellaneous receipts/expenses.

8 INCOME TAX:

i) The tax expense for the year comprises current tax and deferred tax.

ii) Provision for current tax is made using the applicable tax rates on the taxable income for the relevant period determined in accordance with the provisions of the Income Tax Act'1961. Deferred tax resulting from "timing difference" between taxable income and accounting income is accounted for using the tax rates and tax laws applicable for the relevant financial year. Deferred Tax Asset is reassessed and recognized only to the extent that there is virtual certainty that sufficient future taxable income will be available against which the deferred tax asset will be realized in future.

9 INVESTMENTS:

i) Non Current investments are valued at cost. However, provision for diminution in value is made to recognise a decline in the value, other than temporary.

ii) Current investments are valued at lower of cost or fair value.

10 INVENTORY:

(i) Finished goods of Crude Oil, Liquefied Petroleum Gas and LPG condensate are valued at cost or net realizable value, whichever is lower. Cost of finished goods is determined based on direct cost and directly attributable services cost including depreciation & depletion.

(ii) Crude oil in unfinished condition in the flow line up to Group Gathering Station and Natural Gas in Pipeline are not valued, as these pipeline fills are necessary to the operation of the facility.

(iii) Stores and spare are valued at weighted average cost or net realizable value whichever is lower. Obsolete / unserviceable items, as and when identified, are written off. Any item of stores and spares not moved for last four years as on date of Balance Sheet are identified as slow moving items for which a provision of 95% of the value is made in the accounts.

11 EMPLOYEE BENEFITS

i) All short-term employee benefits are recognised as an expense at the undiscounted amount in the accounting period in which the related service is rendered.

ii) Employee benefits under defined contribution

plan such as provident fund is recognised based on the undiscounted obligations of the company to contribute to the plan.

iii) Employee benefits under defined benefit plans such as gratuity, leave encashment, post retirement medical benefits, pension are recognised based on the present value of defined benefit obligation, which is computed on the basis of actuarial valuation using the projected unit credit method. Actuarial liability in excess of respective plan assets is recognised during the year and in case the plan assets exceed the Actuarial Liability, no further provision is considered. Actuarial gain and losses in respect of post employment and other long-term benefits are recognised during the year.

12 REVENUE RECOGNITION

(i) Revenue from sale of products is recognized on custody transfer to customers.

(ii) Sale of crude oil and gas produced from exploratory wells is deducted from expenditure on such wells.

(iii) Sales are inclusive of statutory levies but excluding Value Added Tax (VAT) & Central Sales Tax (CST) and net of discounts & companies share of profit petroleum paid to GOI. Any retrospective revision in prices is accounted for in the year of such revision.

(iv) Claims on Government / Petroleum Planning & Analysis Cell (PPAC) are booked on acceptance in principle by the authority.

(v) Dividend Income is recognized when the right to receive the dividend is established.

(vi) Revenue in respect of the following is recognized when there is reasonable certainty regarding ultimate realization:

(a) Short lifted quantity of Crude Oil & Natural Gas, if any.

(b) Interest on delayed realization from customers.

(vii) Insurance claim other than for transit loss of stores items are accounted for on final acceptance by the Insurance Company.

(viii) Recovery/Refund of Liquidated Damages are recognised in the Statement of Profit and Loss in the year of occurrence as income or expenditure as the case may be except in case of JVC which are governed by the respective PSC.

(ix) Revenue from sale of other services is recognised when service is rendered in line with contracts executed there with.

13 GRANTS

Grants are recognised when there is reasonable assurance that the same would be realized. Grants related to specific assets are deducted from the gross value of the concerned assets.

14 BORROWING COSTS

i) Borrowing costs during the construction period that are attributable to qualifying assets are capitalized and also includes exchange difference arising from Foreign Currency borrowings to the extent that they are regarded as an adjustment to interest cost.

ii) Other borrowing costs are recognised as expenses when incurred.

15 SEGMENT ACCOUNTING

i) Considering the nature and associated risks and return of products & services, the company has adopted its products & services (viz. Crude Oil, Natural Gas, LPG and Pipeline Transportation) as the primary reporting segments. There are no reportable geographical segments.

ii) Segment assets, liabilities, income and expenses have been either directly identified or allocated to the segments on the basis usually followed for allocation of cost adopted for preparing and presenting the financial statements of the Company.

16 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

i) Provisions in respect of which a reliable estimate can be made are recognised where there is a present obligation as a result of past events and it is probable that there will be an outflow of resource.

ii) Contingent liabilities, if material, are disclosed by way of notes to the accounts.

iii) Contingent assets are neither recognised nor disclosed in the financial statements.

17 EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

18 GENERAL

i) All revenue expenditure, incurred for Research & Development Projects / Schemes, net of grants- in-aid, if any, are charged to the Statement of Profit & Loss.

ii) Assets given on finance lease are accounted as per Accounting Standard 19 "Leases". Such assets are included as a receivable at an amount equal to the net investment in the lease. Initial direct costs incurred in respect of finance leases are recognized in the statement of profit and loss in the year in which such costs are incurred.

iii) Prior period items/Prepaid expenses having value in each case up to Rs. 5 lacs are booked under natural head of accounts.

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Mar 31, 2014

The Financial Statements are prepared under the historical cost convention on accrual method of accounting, in accordance with the Generally Accepted Accounting Principles and complying with the mandatory Accounting Standards notified by the Government of India under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions and presentational requirement of the Companies Act, 1956.

32.2 Classification of Assets & Liabilities

All the Assets and Liabilities of the Company are segregated into Current & Non-current based on the principles and definitions as set out in the Schedule VI to the Companies Act, 1956 as amended. The Company has adopted a period of 12 months as its Operating Cycle.

32.3 PRE-ACQUISITION COSTS, ACQUISITION COSTS, EXPLORATION COSTS, DEVELOPMENT COSTS AND ABANDONMENT COSTS :

The Company follows the "Successful Efforts Method" (SEM) of Accounting in respect of its Oil and Gas exploration and production activities in accordance with the "Guidance Note on Accounting for Oil & Gas Producing Activities" issued by the Institute of Chartered Accountants of India.

32.3.1 PRE-ACQUISITION COSTS:-

Costs of revenue nature incurred prior to obtaining the rights to explore, develop and produce Oil & Gas like data collection & analysis cost etc. are expensed to the Statement of Profit and Loss in the year of incidence.

32.3.2 GEOLOGICAL & GEOPHYSICAL COSTS:-

Geological and Geophysical expenditure are charged as expense when incurred.

32.3.3 ACQUISITION COSTS:-

i) Acquisition costs include land acquired for drilling operations including cost of temporary occupation of the land, crop compensation paid to farmers, registration fee, legal cost, signature bonus, brokers'' fees, consideration for farm-in arrangements and other costs incurred in acquiring mineral rights.

ii) Cost for retaining the mineral interest in properties like lease carrying cost, license fees & other cost are charged as expense when incurred.

iii) Acquisition costs are initially recorded under Capital work in progress-Tangible & Intangible as the case may be.

iv) On determination of proved developed reserves, associated acquisition costs are transferred to Fixed Assets-Producing Properties.

v) Acquisition cost of Producing Properties is capitalized under Fixed Asset-Producing Properties.

vi) Acquisition cost relating to exploratory well that is determined to have no proved reserves and its status is decided as dry or of no further use for exploration purpose, is charged as expenses. In such cases, for land value forming part of acquisition cost, a nominal amount of Rs.100 per bigha is transferred to Freehold land under Fixed Assets.

32.3.4 EXPLORATION COSTS:-

i) All exploration costs including allocated depreciation on support equipment and facilities involved in drilling and equipping exploratory and appraisal wells and cost of exploratory-type drilling stratigraphic test wells are initially shown as Intangible assets under Capital Work in Progress as exploration cost till the time these are either transferred to Fixed Assets as Producing Properties on determination of Proved Developed Reserves or charged as expense when determined to be dry or of no further use.

ii) Cost of exploratory wells are not carried over unless it could be reasonably demonstrated that there are indications of sufficient quantity of reserves and activities are firmly planned in near future for further assessing the reserves and economic & operating viability of the project. Costs of written off exploratory wells are not reinstated in the book even if they start producing subsequently.

32.3.5 DEVELOPMENT COSTS:-

Costs that are attributable to development activities including production and processing plant & facilities, service wells including allocated depreciation on support equipment and facilities are initially shown as Tangible Assets under Capital Work in Progress as Development Cost till such time they are capitalized as Producing Properties upon determination of Proved Developed Reserves.

32.3.6 PRODUCTION COSTS:-

Production Cost consist of direct and indirect costs incurred to operate and maintain wells and related equipments and facilities, including depreciation and applicable operating cost of support equipment and facilities.

32.3.7 SIDE-TRACKING EXPENDITURE:-

In case of exploratory wells, the cost of abandoned portion of side tracked well is charged off to Profit and loss statement. In case of development wells, the entire cost of abandoned portion and side- tracking is capitalized. In case of existing producing wells the cost of side – tracking is capitalized if it increases the proved developed reserves, otherwise is charged off to Profit and loss statement.

32.3.8 ABANDONMENT COSTS:-

i) Estimated full eventual liability towards costs relating to dismantling, abandoning and restoring well sites and associated Production Facilities are recognized at the commencement of drilling a well/when facilities are installed. Liability for abandonment cost is updated annually based on the technical assessment available at current costs.

ii) The actual cost incurred on abandonment is adjusted against the liability and the ultimate gain or loss is recognized in the Statement of Profit and Loss, when the designated oil/gas field or a group of oil/gas fields ceases to produce.

32.4 FIXED ASSETS, DEPRECIATION & DEPLETION

32.4.1 Tangible Assets:-

i) Cost of Freehold & Leasehold land which are perpetual in nature used for other than exploration and development activity are not amortized. Leasehold land other than perpetual lease is amortized over the lease period.

ii) All successful exploratory well cost, development well cost and other development cost viz. Production Facilities are capitalized when the same is ready to commence commercial production.

iii) Costs relating to acquisition/ construction of tangible assets other than producing properties are capitalized on commissioning.

iv) Land acquired on perpetual lease as well as on lease over 99 years is treated as free hold land and not amortized.

v) Land acquired on lease for 99 years or less is treated as leasehold land and amortised over the lease period.

vi) Any Tangible asset, when determined of no further use, is deleted from the Gross Block of assets. The deleted assets are carried as ''Assets awaiting disposal'' under Inventories at lower of Rs.1000 or 5% of the original cost and the balance Written down Value, is charged off.

32.4.2 Intangible Assets:-

i) Costs of intangible assets are capitalized when the asset is ready for its intended use.

ii) Cost of right of use/right of way for laying pipelines is capitalized and amortized on a straight line basis over the period of such right of use / right of way or 99 years whichever is lower, as per industry practice.

iii) Cost incurred on computer software purchased / developed are capitalized as intangible asset and amortized over the useful life not exceeding five years from the date of capitalization.

iv) Any intangible asset, when determined of no further use, is written off.

32.4.3 DEPRECIATION

i) Depreciation on Tangible Assets other than Acquisition cost & cost of producing well is provided for under the "Written down Value Method", at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

ii) Capital assets costing up to Rs 5000 each are fully depreciated in the year of acquisition.

32.4.4 DEPLETION

i) Acquisition costs are depleted using the "Unit of Production Method" with reference to the ratio of production and related Proved reserves.

ii) Producing Wells are depleted using the "Unit of Production Method", with reference to ratio of production and the related Proved Developed Reserves.

iii) Rate of depletion is determined based on production from the Oil/Gas field or a group of Oil/Gas fields identified with reference to the related reserves having common geological feature.

32.5 FOREIGN CURRENCY TRANSLATION

i) Foreign currency transactions are initially recognised and accounted for at the exchange rates prevailing at the dates of transactions.

ii) a) Foreign Currency monetary assets & liabilities outstanding at the close of the year, are translated at the rates of exchange prevailing at the date of Balance Sheet. Resultant gains or loss is accounted for during the year, except those relating to long-term foreign currency monetary items.

b) Exchange differences on long-term foreign currency monetary items relating to acquisition of depreciable assets are adjusted to the carrying cost of the assets and depreciated over the balance life of the assets in line with para 46A of Accounting Standard-11. In other cases, exchange differences are accumulated in a "Foreign Currency Monetary Item Translation Difference Account" and amortised over the balance period of such long term foreign currency monetary item by recognition as income or expense in each of such periods.

iii) Foreign currency transactions in relation to Joint Venture (Overseas) are treated in the following manner:- a) Foreign currency transactions are initially recognised and accounted for at the exchange rates prevailing at the dates of transactions. However, the average exchange rate of relevant month is taken for the transactions of that month, where actual rate of transaction is not available or at the rate as agreed otherwise.

b) Foreign Currency monetary assets & liabilities outstanding at the close of the year are translated at the rates of exchange prevailing at the date of Balance Sheet. Resultant gains or loss is accounted for during the year.

32.6 IMPAIRMENT OF ASSETS

Acquisition costs, pending capitalization to Producing Properties and exploration costs under Intangible Assets- Capital Work in Progress are reviewed for indicators of impairment and if events and circumstances suggest, impairment loss is provided for and carrying amount is reduced accordingly.

Producing fields, LPG Plant, Transportation Pipeline and Power Generating Units (other than Captive Power Plants) are considered as Cash Generating Units. A "Cash Generating Unit" is reviewed for impairment at each Balance Sheet date. An impairment loss is recognized, whenever the carrying amount of assets exceeds the recoverable amount by writing down such assets to their recoverable amount.

An impairment loss is reversed if there is change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss/ reversal thereof is adjusted to the carrying value of the respective assets. Impairment testing is normally carried out at the year-end unless compelling circumstances exist for review during the course of the year.

32.7 JOINT VENTURES

Production Sharing Contracts (PSCs) executed with the Government of India / Government of Foreign Countries by the company along with other entities to undertake exploration, development and production of Oil and / or Gas activities under a joint venture in various concessions/block/area are accounted as under:- i) The financial statements reflect the share of the Company''s assets, liabilities and also the income and expenditure of the Joint Venture in proportion to the participating interest of the Company as per the terms of the PSCs, on a line by line basis. Depreciation, depletion and impairment and value of Stock of Crude Oil are accounted for as per the relevant accounting policies of the Company whereas provision for abandonment is created as per terms of PSC. Proved Developed Reserve of Oil & Gas in such concessions/block/area are also considered in proportion to participating interest of the Company.

ii) Consideration recoverable from new Joint Venture Partners for the right to participate in operations are:

a) Reduced from respective assets and/or expenditure to the extent of the new partners contribution towards past cost,

b) Balance is considered as miscellaneous receipts/ expenses.

32.8 INCOME TAX

i) The tax expense for the year comprises current tax and deferred tax.

ii) Provision for current tax is made after taking into consideration benefits admissible on conservative basis under the provisions of the Income Tax Act, 1961 as are applicable to the company. Deferred Tax resulting from ''timing difference'' between taxable incomes and accounting income is accounted for using the tax rates and tax laws applicable for the relevant Financial Year. Deferred Tax Asset is reassessed and recognised only to the extent that there is a virtual certainty that the asset will be realized in future.

32.9 INVESTMENTS

i) Non Current investments are valued at cost. However, provision for diminution in value is made to recognise a decline in the value, other than temporary.

ii) Current investments are valued at lower of cost or fair value.

32.10 INVENTORY

i) Finished goods of Crude Oil, Liquefied Petroleum Gas and LPG condensate are valued at cost or net realizable value, whichever is lower. Cost of finished goods is determined based on direct cost and directly attributable services cost including depreciation & depletion.

ii) Crude oil in unfinished condition in the flow line up to Group Gathering Station and Natural Gas in Pipeline are not valued, as these pipeline fills are necessary to the operation of the facility.

(iii) Stores and spare are valued at weighted average cost or net realizable value whichever is lower. Obsolete / unserviceable items, as and when identified, are written off. Any item of stores and spares not moved for last four years as on date of Balance Sheet are identified as slow moving items for which a provision of 95% of the value is made in the accounts.

32.11 EMPLOYEE BENEFITS

i) All short-term employee benefits are recognised as an expense at the undiscounted amount in the accounting period in which the related service is rendered.

ii) Employee benefits under defined contribution plan such as provident fund is recognised based on the undiscounted obligations of the company to contribute to the plan.

iii) Employee benefits under defined benefit plans such as gratuity, leave encashment, post retirement medical benefits, pension are recognised based on the present value of defined benefit obligation, which is computed on the basis of actuarial valuation using the projected unit credit method. Actuarial liability in excess of respective plan assets is recognised during the year and in case the plan assets exceed the Actuarial Liability, no further provision is considered. Actuarial gain and losses in respect of post employment and other long-term benefits are recognised during the year.

32.12 REVENUE RECOGNITION

i) Revenue from sale of products is recognized on custody transfer to customers.

ii) Sale of crude oil and gas produced from exploratory wells is deducted from expenditure on such wells.

iii) Sales are inclusive of statutory levies but excluding Value Added Tax (VAT) & Central Sales Tax (CST) and net of discounts. Any retrospective revision in prices is accounted for in the year of such revision.

iv) Claims on Government / Petroleum Planning & Analysis Cell (PPAC) are booked on acceptance in principle by the authority.

v) Dividend Income is recognized when the right to receive the dividend is established.

vi) Revenue in respect of the following is recognized when there is reasonable certainty regarding ultimate realization:

a) Short lifted quantity of Crude Oil & Natural Gas, if any.

b) Interest on delayed realization from customers.

vii) Insurance claim other than for transit loss of stores items are accounted for on final acceptance by the Insurance Company.

viii) Recovery/Refund of Liquidated Damages are recognised in the Statement of Profit and Loss in the year of occurrence as income or expenditure as the case may be except in case of JVC which are governed by the respective PSC.

ix) Revenue from sale of other services is recognised when service is rendered in line with contracts executed there with.

32.13 GRANTS

Grants are recognised when there is reasonable assurance that the same would be realized. Grants related to specific assets are deducted from the gross value of the concerned assets.

32.14 BORROWING COSTS

i) Borrowing costs during the construction period that are attributable to qualifying assets are capitalized and also includes exchange difference arising from Foreign Currency borrowings to the extent that they are regarded as an adjustment to interest cost.

ii) Other borrowing costs are recognised as expenses when incurred.

32.15 SEGMENT ACCOUNTING

i) The Company has adopted its products & services (viz. Crude Oil, Natural Gas, LPG and Pipeline Transportation) as the primary reporting segments. There are no reportable geographical segments.

ii) Segment assets, liabilities, income and expenses have been either directly identified or allocated to the segments on the basis usually followed for allocation of cost adopted for preparing and presenting the financial statements of the Company.

32.16 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

i) Provisions in respect of which a reliable estimate can be made are recognised where there is a present obligation as a result of past events and it is probable that there will be an outflow of resource.

ii) Contingent liabilities, if material, are disclosed by way of notes to the accounts.

iii) Contingent assets are neither recognised nor disclosed in the financial statements.

32.17 EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

32.18 GENERAL

i) All revenue expenditure, incurred for Research & Development Projects / Schemes, net of grants-in-aid if any, are charged to the Statement of Profit & Loss.

ii) Assets given on finance lease are accounted as per Accounting Standard 19 "Leases". Such assets are included as a receivable at an amount equal to the net investment in the lease. Initial direct costs incurred in respect of finance leases are recognized in the statement of profit and loss in the year in which such costs are incurred.

iii) Prior period items/Prepaid expenses having value in each case up to Rs. 5 lacs are booked under natural head of accounts.

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Mar 31, 2013

1.1 Accounting Convention

The Financial Statements are prepared under the historical cost convention on accrual method of accounting, in accordance with the Generally Accepted Accounting Principles and complying with the mandatory Accounting Standards notified by the Central Government of India under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions and presentational requirement of the Companies Act, 1956.

1.2 Classification of Assets & Liabilities

All the Assets and Liabilities of the Company are segregated into Current & Non-current based on the principles and definitions as set out in the Schedule VI to the Companies Act, 1956 as amended. The Company has adopted a period of 12 months as its Operating Cycle.

1.3 Exploration Costs, Development Expenditure And Abandonment Costs

The Company follows the accepted "Successful Efforts Method" (SEM) of Accounting in respect of its Oil and Gas exploration and production activities in accordance with the "Guidance Note on Accounting for Oil & Gas Producing Activities" issued by the Institute of Chartered Accountants of India (ICAI).

1.3.1 Exploration Costs And Development Expenditure

a) Geological and Geophysical expenditure, including the depreciation on the cost of Tangible Assets deployed in relation thereto, charged as expense when incurred.

b) Lease carrying costs including license fees are charged as expense when incurred.

c) Cost of unsuccessful/dry exploratory wells or parts thereof including allocated depreciation on support equipment and facilities, which do not lead to discovery of/accretion to hydrocarbon reserves, are charged as expense on determination.

d) All Acquisition costs, exploration costs involved in drilling and equipping exploratory and appraisal wells and cost of exploratory-type drilling stratigraphic test wells are initially shown as pre-producing property under capital-work-in- progress till the time these are either transferred to Tangible Assets as producing properties or charged as expense in the year when determined to be dry or of no further use.

e) Cost of incomplete wells/wells under production testing/completed exploratory wells pending determination of commercial viability including allocated depreciation on support equipment and facilities, are classified as pre-producing properties.

f) Cost of exploratory wells included in pre-producing Properties are not carried over for more than two years from the date of completion of the drilling of the well and written off, unless it is reasonably determined that the well has proved reserves and development of the field in which the well is located has been planned.

g) Cost of successful exploratory wells and completed development wells including allocated depreciation on support equipment and facilities after completion of production testing are capitalized as producing properties.

1.3.2 Abandonment Costs

a) Estimated liability towards costs relating to dismantling, abandoning and restoring well sites in respect of complete wells (net of salvage value), other than those relating to Joint Ventures, are recognised as cost of Producing property/ Pre-producing property. The abandonment cost on exploratory dry well is charged as expense when incurred. Liability for abandonment cost is updated annually based on the technical assessment available at current costs.

b) The actual cost incurred on abandonment is adjusted against the liability and the ultimate gain or loss is recognised in the Statement of Profit and Loss, when the designated oil/gas field or a group of oil/gas fields ceases to produce.

c) In respect of Joint Ventures, the recognition of abandonment cost is specified in Policy No 31.8 (a).

1.4 Fixed Assets :

a) All costs relating to acquisition of tangible assets till the time of commissioning are capitalized.

b) Cost of Freehold & Leasehold land used for project including the Right of Use (ROU) which are perpetual in nature are not amortized.

c) Cost of land acquired for drilling wells are booked under pre-producing/producing properties depending on the status of the wells.

d) Any Tangible asset, when determined of no further use, is deleted from the Block. The deleted assets are carried as Inventories at lower of Rs. 1000 or 5% of the original cost and the balance Written down Value, is charged off.

1.5 Depreciation/Depletion/Amortisation/Write off

1.5.1 Depreciation

a) Depreciation on Tangible Assets other than "Producing Properties" is provided for under the "Written Down Value Method", at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

b) Depreciation on Tangible Assets deployed in exploration and development drilling activities is capitalized with the cost of well.

c) Capital assets costing up to Rs. 5000 each are fully depreciated in the year of acquisition.

1.5.2 Depletion

a) Producing Properties are depleted using the "Unit of Production Method", with reference to ratio of production and the related Proved Developed Reserves.

b) Proved Developed Reserves of oil and gas are technically assessed and reviewed in-house at the end of each year by following International practices. Rate of depletion is computed on a consistent basis with reference to designated Oil / Gas field or a group of Oil/Gas fields, which are aggregated either based on a common geological feature or for operational purpose.

c) Cost of land forming part of the Pre-producing/ producing properties are either charged off or carried forward depending on the status of the wells as per Accounting Policy No: 31.3.1(d).

d) Costs of land forming part of the producing properties are depleted on Units of Production Method (UOP).

1.5.3 Amortisation

Depreciation rate under W.D.V method as prescribed under Schedule XIV to the Companies Act, 1956 for Computer is adopted for amortization of software.

1.5.4 Write off

a) Any Intangible assets when determined of no further use, is written off.

b) The discrepancies, when noticed on physical verification are adjusted in the accounts.

1.6 Foreign Currency Translation

(a) Foreign currency transactions are initially recognised and accounted for at the exchange rates prevailing at the dates of transactions.

(b) Foreign Currency monetary assets & liabilities outstanding at the close of the year, are translated at the rates of exchange prevailing at the date of Balance Sheet. Resultant gains or loss is accounted for during the year.

(c) Foreign currency transactions in relation to Joint Venture (Overseas) are treated in the following manner:-

(i) Foreign currency transactions are initially recognised and accounted for at the exchange rates prevailing at the dates of transactions. However, the average exchange rate of relevant month is taken for the transactions of that month, where actual rate of transaction is not available or at the rate as agreed otherwise.

(ii) Foreign Currency monetary assets & liabilities outstanding at the close of the year, are translated at the rates of exchange prevailing at the date of Balance Sheet. Resultant gains or loss is accounted for during the year.

1.7 Impairment of Assets

At the end of each balance sheet date, the carrying amount of assets are assessed so as to calculate there is any indication of impairment. Tangible Assets forming part of a "Cash Generating Unit" are reviewed for impairment at each Balance Sheet date. In case events and circumstances indicate any impairment, recoverable amount of these assets is determined. An impairment loss is recognized, whenever the carrying amount of such assets exceeds the recoverable amount by writing down such assets to their recoverable amount. The recoverable amount is its ''value in use''. In assessing the value in use, the estimated future cash flows from the use of assets are discounted to their present value at appropriate rate. An impairment loss is reversed if there is change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective assets. Subsequent to Impairment, depletion/ depreciation is provided on the revised carrying value of the assets.

1.8 Joint Ventures

Production Sharing Contracts (PSCs) executed with the Government of India / Government of Foreign Countries by the company along with other entities to undertake exploration, development and production of Oil and / or Gas activities under a joint venture in various concessions are accounted as under:-

(a) The financial statements reflect the share of the Company''s assets, liabilities and also the income and expenditure of the Joint Venture in proportion to the participating interest of the Company as per the terms of the PSCs, on a line by line basis. Depreciation, depletion and impairment and value of Stock of Crude Oil are accounted for as per the relevant accounting policies of the Company whereas provision for abandonment is created as per terms of PSC. Proved Developed Reserve of Oil & Gas in such concessions are also considered in proportion to participating interest of the Company.

(b) Consideration recoverable from new Joint Venture Partners for the right to participate in operations are:

I) Reduced from respective assets and/or expenditure to the extent of the new partners contribution towards past cost,

ii) Balance is considered as miscellaneous receipts/expenses.

1.9 Income Tax

a) The tax expense for the year comprises current tax and deferred tax.

b) Provision for current tax is made after taking into consideration benefits admissible on conservative basis under the provisions of the Income Tax Act, 1961 as are applicable to the company. Deferred Tax resulting from ''timing difference'' between taxable income and accounting income is accounted for using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred Tax Asset is reassessed and recognised only to the extent that there is a virtual certainty that the asset will be realized in future.

1.10 Investments

a) Non Current investments are valued at cost. However, provision for diminution in value is made to recognise a decline in the value, other than temporary.

b) Current investments are valued at lower of cost or fair value.

1.11 Inventory

(a) Finished goods of Crude Oil, Liquefied Petroleum Gas and LPG condensate are valued at cost or net realizable value, whichever is lower. Cost of finished goods is determined on absorption costing method.

(b) Crude oil in unfinished condition in the flow line up to Group Gathering Station and Natural Gas in Pipeline are not valued, as quantity of the same is not determinable.

(c) Stores and spare are valued at weighted average cost or net realizable value whichever is lower. Obsolete / unserviceable items, as and when identified, are written off. Any item of stores and spares not moved for last four years as on date of Balance Sheet are identified as slow moving items for which a provision of 95% of the value is made in the accounts.

1.12 Employee Benefits

a) All short-term employee benefits are recognised as an expense at the undiscounted amount in the accounting period in which the related service is rendered.

b) Employee benefits under defined contribution plan such as provident fund is recognised based on the undiscounted obligations of the company to contribute to the plan.

c) Employee benefits under defined benefit plans such as gratuity, leave encashment, post retirement medical benefits, pension are recognised based on the present value of defined benefit obligation, which is computed on the basis of actuarial valuation using the projected unit credit method. Actuarial liability in excess of respective plan assets is recognised during the year and in case the plan assets exceed the Actuarial Liability, no further provision is considered. Actuarial gain and losses in respect of post employment and other long-term benefits are recognised during the year.

1.13 Revenue Recognition

(a) Revenue from sale of products is recognized on custody transfer to customers.

(b) Sale of crude oil and gas produced from exploratory wells is deducted from expenditure on such wells.

(c) Sales are inclusive of statutory levies but excluding Value Added Tax (VAT) & Central Sales Tax (CST) and net of discounts. Any retrospective revision in prices is accounted for in the year of such revision.

(d) Claims on Government / Petroleum Planning & Analysis Cell (PPAC) are booked on acceptance in principle by the authority.

(e) Dividend Income is recognized when the right to receive the dividend is established.

(f) Revenue in respect of the following is recognized when there is reasonable certainty regarding ultimate realization:

(i) Short lifted quantity of Crude Oil & Natural Gas, if any.

(ii)Interest on delayed realization from customers.

(g) Insurance claim other than for transit loss of stores items are accounted for on final acceptance by the Insurance Company.

(h) Recovery/Refund of Liquidated Damages are recognised in the Statement of Profit and Loss in the year of occurrence as income or expenditure as the case may be except in case of JVC which are governed by the respective PSC.

(i) Revenue from sale of other services is recognised when service is rendered in line with contracts executed therewith.

1.14 Grants

Grants are recognised when there is reasonable assurance that the same would be realized. Grants related to specific assets are deducted from the gross value of the concerned assets.

1.15 Borrowing Costs

a) Borrowing costs during the construction period that are attributable to qualifying assets are capitalized and also includes exchange difference arising from Foreign Currency borrowings to the extent that they are regarded as an adjustment to interest cost.

b) Other borrowing costs are recognised as expenses when incurred.

1.16 Segment Accounting

(a) The Company has adopted its products & services (viz. Crude Oil, Natural Gas, LPG and Pipeline Transportation) as the primary reporting segments. There are no reportable geographical segments.

(b) Segment assets, liabilities, income and expenses have been either directly identified or allocated to the segments on the basis usually followed for allocation of cost adopted for preparing and presenting the financial statements of the Company.

1.17 Provisions, Contingent Liabilities and Contingent Assets

(a) Provisions in respect of which a reliable estimate can be made, are recognised where there is a present obligation as a result of past events and it is probable that there will be an outflow of resource.

(b) Contingent assets are neither recognised nor disclosed in the financial statements.

1.18 Earnings Per Share

Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.19 General

a) All revenue expenditure, incurred for Research & Development Projects / Schemes, net of grants- in-aid if any, are charged to the Statement of Profit & Loss.

b) Assets given on finance lease are accounted as per Accounting Standard 19 "Leases". Such assets are included as a receivable at an amount equal to the net investment in the lease. Initial direct costs incurred in respect of finance leases are recognized in the statement of profit and loss in the year in which such costs are incurred.

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Mar 31, 2012

1.1 ACCOUNTING CONVENTION

The Financial Statements are prepared under historical cost convention, in accordance with the Generally Accepted Accounting Prin- ciples and materially complying with the mandatory Accounting Standards notified by the Central Government of India under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions and presentational requirement of the Companies Act, 1956.

1.2 Classification of Assets & Liabilities

All the Assets and Liabilities of the Company are segregated into Current & Non-current based on the principles and definitions as set out in the Schedule VI to the Companies Act, 1956 as amended. The Company has adopted a period of 12 months as its Operating Cycle.

1.3 EXPLORATION COSTS, DEVELOPMENT EXPENDITURE AND ABANDONMENT COSTS

The Company follows the internationally accepted "Successful Efforts Method" (SEM) of Accounting in respect of its Oil and Gas exploration and production activities read with the "Guidance Note on Accounting for Oil & Gas Producing Activities" issued by the Institute of Chartered Accountants of India (ICAI).

1.3.1 EXPLORATION COSTS AND DEVELOPMENT EXPENDITURE

(a) Geological and Geophysical expenditure, including the depreciation on the cost of Fixed Assets deployed in relation thereto, are expensed in the year of incidence.

(b) Lease carrying costs including license fees are expensed in the year of incidence.

(c) All Acquisition costs, exploration costs involved in drilling and equipping exploratory and appraisal wells and cost of drilling stratigraphic test wells are initially capitalized as pre-producing property till the time these are either transferred to Fixed Assets as Producing Properties or expensed in the year when determined to be dry or of no further use.

(d) Cost of successful exploratory wells and completed development wells including allocated depreciation on support equipments and facilities are capitalized as Producing Properties. Wells are treated as completed only after completion of production testing.

(e) Cost of unsuccessful/dry exploratory wells or parts thereof including allocated depreciation on support equipments and facilities, which do not lead to discovery of/accretion to hydrocarbon reserves, are expensed on determination.

(f) Cost of incomplete wells/wells under production testing/completed exploratory wells pending determination of commercial viability including allocated depreciation on support equipments and facilities, are classified as Pre-Producing Properties.

(g) Cost of exploratory wells in progress lying in Pre-Producing Properties are not carried over for more than two years from the date of completion of the drilling of the well, unless it is reasonably determined that the well has proved reserves and development of the field in which the well is located has been planned.

1.3.2 ABANDONMENT COSTS

(a) The liability towards costs relating to dismantling, abandoning and restoring well sites (net of salvage value), other than those relating to Joint Ventures, are capitalized as additional cost when the well is complete and is reasonably estimated. The abandonment cost on exploratory dry well is expensed during the year. Liability for abandonment cost is updated annually based on the technical assessment available at current costs.

(b) The actual cost incurred on abandonment is adjusted against the liability and the ultimate gain or loss is recognised in the profit/loss, when the designated oil/gas field or a group of oil/gas fields ceases to produce.

(c) In respect of Joint Ventures, the recognition of abandonment cost is specified in Policy No 32.8 (a).

1.4 FIXED ASSETS :

(a) All costs relating to acquisition of tangible assets till the time of commissioning are capitalized.

(b) Cost of Leasehold land including the Right of Use (ROU) which are perpetual in nature are not amortized.

(c) Any Tangible asset, when of no further use, is deleted from the Block. The deleted assets are carried as Current Assets at lower of Rs. 1000 or 5% of the original cost and the balance Written down Value, if any is charged off.

(d) Any Intangible assets when of no further use, is written off.

(e) The discrepancies, if any, noticed on physical verification are accounted for.

1.5 DEPRECIATION/DEPLETION/AMORTISATION

1.5.1 DEPRECIATION

(a) Depreciation on Tangible Assets other than "Producing Properties" is provided for under the "Written Down Value Method", at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

(b) Depreciation on Tangible Assets deployed in exploration and development drilling activities is capitalized with the cost of well.

(c) Assets costing up to Rs. 5000 each are fully depreciated in the year of acquisition.

1.5.2 DEPLETION

(a) Producing Properties including acquisition costs are depleted using the "Unit of Production Method", with reference to ratio of production and the related Proved Developed Reserves.

(b) Proved Developed Reserves of oil and gas are technically assessed and reviewed in-house at the end of each year by following International practices.

(c) Rate of depletion is computed on a consistent basis with reference to designated Oil / Gas field or a group of Oil/Gas fields, which are aggregated either based on a common geological feature or for operational purpose.

1.5.3 AMORTISATION

Depreciation rate under W.D.V method as prescribed under Schedule XIV to the Companies Act, 1956 for Computer is adopted for amortization of software.

1.6 FOREIGN CURRENCY TRANSLATION

(a) All non-monetary transactions in foreign currency are recorded at the rates of exchange prevailing at the dates when the relevant transactions take place.

(b) Monetary items in the form of Loan, Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year, are translated in Indian Currency at the appropriate rates of exchange prevailing at the date of Balance Sheet. Resultant gains or loss is accounted for during the year.

(c) Foreign currency transactions in relation to Joint Venture (Overseas) are treated in the following manner:-

(i) Foreign currency transactions is initially recognised and accounted for in Indian currency at the exchange rates prevailing at the date of transactions. The average exchange rate of relevant month is taken for the transactions of that month in respect of such Joint Venture, where actual rate of transaction is not available or at the rate as agreed otherwise.

(ii) Foreign currency monetary items are translated using the average of the exchange rates prevailing at the Balance Sheet date.

1.7 IMPAIRMENT OF ASSETS

Tangible Assets forming part of a "Cash Generating Unit" are reviewed for impairment at each Balance Sheet date. In case events and circumstances indicate any impairment, recoverable amount of these assets is determined. An impairment loss is recognized, when- ever the carrying amount of such assets exceeds the recoverable amount by writing down such assets to their recoverable amount. The recoverable amount is its 'value in use'. In assessing the value in use, the estimated future cash flows from the use of assets are discounted to their present value at appropriate rate. An impairment loss is reversed if there is change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective assets. Subsequent to Impairment, depletion/ depreciation is provided on the revised carrying value of the assets.

1.8 JOINT VENTURES

Production Sharing Contracts (PSCs) executed with the Government of India / Government of Foreign Countries by the company along with other entities to undertake exploration, development and production of Oil and / or Gas activities under a joint venture in various concessions are accounted as under:-

(a) The financial statements reflect the share of the Company's assets, liabilities and also the income and expenditure of the Joint Venture in proportion to the participating interest of the Company as per the terms of the PSCs, on a line by line basis. Depreciation, depletion and impairment and value of Stock of Crude Oil are accounted for as per the relevant accounting policies of the Company whereas provision for abandonment is created as per terms of PSC. Proved Developed Reserve of Oil & Gas in such concessions are also considered in proportion to participating interest of the Company.

(b) Consideration recoverable from new Joint Venture Partners for the right to participate in operations are:

i. Reduced from respective capitalized cost wherever applicable,

ii. Reduced from current expenditure (net of income, if any) to the extent it relates to current year,

iii. Balance is considered as miscellaneous receipts.

1.9 INCOME TAX

(a) The tax expense for the year comprises current tax and deferred tax.

(b) Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961 as are applicable to the company. Deferred Tax resulting from 'timing difference' between taxable income and accounting income is accounted for using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred Tax Asset is reassessed and recognised only to the extent that there is a virtual certainty that the asset will be realized in future.

1.10 INVESTMENTS

(a) Non Current investments are valued at cost. However, provision for diminution in value is made to recognise a decline in the value, other than temporary.

(b) Current investments are valued at lower of cost or fair value.

1.11 INVENTORY

(a) Finished goods of Crude Oil and Liquefied Petroleum Gas are valued at cost or net realizable value, whichever is lower. Cost of finished goods is determined on absorption costing method.

(b) Crude oil in unfinished condition in the flow line up to Group Gathering Station and Natural Gas in Pipeline are not valued, as quantity of the same is not determinable.

(c) Stores and spare are valued at weighted average cost or net realizable value whichever is lower. Obsolete / unserviceable items, as and when identified, are written off. Any item of stores and spares not moved for last four years as on date of Balance Sheet are identified as slow moving items for which a provision of 95% of the value is made in the accounts.

1.12 EMPLOYEE BENEFITS

a) All short-term employee benefits are recognised as an expense at the undiscounted amount in the accounting period in which the related service is rendered.

b) Employee benefits under defined contribution plan such as provident fund is recognised based on the undiscounted obligations of the company to contribute to the plan.

c) Employee benefits under defined benefit plans such as gratuity, leave encashment, post retirement medical benefits, pension are recognised based on the present value of defined benefit obligation, which is computed on the basis of actuarial valuation using the projected unit credit method. Actuarial liability in excess of respective plan assets is recognised during the year and in case the plan assets exceed the Actuarial Liability, no further provision is considered. Actuarial gain and losses in respect of post employment and other long-term benefits are recognised during the year.

1.13 REVENUE RECOGNITION

(a) Revenue from sale of products is recognized on custody transfer to customers.

(b) Sale of crude oil and gas produced from exploratory wells-in-progress in exploratory areas is deducted from expenditure on such wells.

(c) Sales are inclusive of statutory levies but excluding Value Added Tax (VAT) & Central Sales Tax (CST) and net of discounts. Any retrospective revision in prices is accounted for in the year of such revision.

(d) Claims on Government / Petroleum Planning & Analysis Cell (PPAC) are booked on acceptance in principle by the authority.

(e) Dividend Income is recognized when the right to receive the dividend is established.

(f) Revenue in respect of the following is recognized when there is reasonable certainty regarding ultimate realization:

(i) Short lifted quantity of Crude Oil & Natural Gas, if any.

(ii) Interest on delayed realization from customers.

(g) Insurance claim other than for transit loss of stores items are accounted for on final acceptance by the Insurance Company.

(h) Liquidated Damages for delay in execution of contracts/supplies are accounted for as per the terms of the contracts and are recognised as income in the year of deduction. In case the same is refunded due to reconsideration of the waiver request, the same is accounted for as expense in the year of acceptance.

(i) Revenue from sale of other services is recognised when service is rendered in line with contracts executed therewith.

1.14 GRANTS

Grants are recognised when there is reasonable assurance that the same would be realized. Grants related to specific assets are deducted from the gross value of the concerned assets.

1.15 BORROWING COSTS

Borrowing costs during the construction period that are attributable to qualifying assets are capitalized and also includes exchange difference arising from Foreign Currency borrowings to the extent that they are regarded as an adjustment to interest cost.

1.16 SEGMENT ACCOUNTING

(a) The Company has adopted its products & services (viz. Crude Oil, Natural Gas, LPG and Pipeline Transportation) as the primary reporting segments and the geographical segments viz. Assam & Arunachal Pradesh and Rajasthan as the secondary reporting segments.

(b) Segment assets, liabilities, income and expenses have been either directly identified or allocated to the segments on the basis usually followed for allocation of cost adopted for preparing and presenting the financial statements of the Company.

1.17 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

(a) Provisions in respect of which a reliable estimate can be made, are recognised where there is a present obligation as a result of past events and it is probable that there will be an outflow of resource.

(b) Contingent Liabilities exceeding rupees Fifty Lakhs in each case are disclosed by ways of notes.

(c) Contingent assets are neither recognised nor disclosed in the financial statements.

1.18 EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.19 GENERAL

a) All revenue expenditure, incurred for Research & Development Projects / Schemes, net of grants-in-aid if any, are charged to the Statement of Profit & Loss.

b) Assets given on finance lease are accounted as per Accounting Standard 19 "Leases". Such assets are included as a receivable at an amount equal to the net investment in the lease. Initial direct costs incurred in respect of finance leases are recognized in the statement of profit and loss in the year in which such costs are incurred.

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Mar 31, 2011

1. ACCOUNTING CONVENTION

The Financial Statements of the Company are prepared under historical cost convention, except as otherwise stated, in accordance with the Generally Accepted Accounting Principles (GAAP) in India and materially comply with the mandatory Accounting Standards notified by the Central Government of India under the Companies (Accounting Standard) Rules 2006, and with the relevant provisions of the Companies Act, 1956.

2. EXPLORATION COSTS, DEVELOPMENT EXPENDITURE AND ABANDONMENT COSTS

The Company generally follows the internationally accepted "Successful Efforts Method" (SEM) of Accounting in respect of its Oil and Gas exploration and production activities read with the guidance note on "Accounting for oil & gas producing activities" issued by the Institute of Chartered Accountants of India (ICAI) except for abandonment costs, as explained below :-

2.1 EXPLORATION COSTS AND DEVELOPMENT EXPENDITURE

(a) Geological and Geophysical expenditure, other than cost of tangible assets, equipment and facilities deployed in relation thereto on which usual depreciation allowance as admissible, are expensed in the year of incidence.

(b) Lease carrying costs including license fees are expensed in the year of incidence.

(c) All Acquisition costs, exploration costs involved in drilling and equipping exploratory and appraisal wells and cost of drilling exploratory type strategraphic test wells are initially capitalized as pre-producing property till the time these are either transferred to producing properties on completion or expensed in the year when determined to be dry or of no further use, as the case may be.

(d) Cost of successful exploratory wells and completed development wells including allocated depreciation on support equipment and facilities are capitalized as producing property. Wells are treated as completed only after completion of production testing of the same.

(e) Cost of unsuccessful / dry exploratory wells or part(s) thereof including allocated depreciation on support equipment and facilities, which do not lead to discovery of / accretion to hydrocarbon reserves, are expensed.

(f) Charges towards unfinished Minimum Work Programme (MWP) and for extension of exploration period under PSC/JVC are treated as Geological & Geophysical or Drilling expenses etc. as the case may be.

(g) Cost of incomplete wells / wells under production testing / completed exploratory wells pending determination of commercial viability including allocated depreciation on support equipment and facilities, are classified as Pre-producing Properties.

(h) Cost of exploratory wells in progress are not carried over for more than two years from the date of completion of the drilling of the well, unless it could be reasonably demonstrated that the well has proved reserves and development of the field in which the well is located has been planned.

2.2 ABANDONMENT COSTS

The full eventual estimated liability towards costs relating to dismantling, abandoning and restoring well sites (net of salvage value), other than Joint Ventures, are capitalized as additional cost when the well is complete. The abandonment cost on exploratory dry well (written off during the year) is charged to Profit and Loss account.

Liability for abandonment cost is updated annually based on the technical assessment available at current costs.

The actual cost incurred on abandonment is adjusted against the liability and the ultimate gain or loss as may be is recognised in the profit and loss account, when the area designated as oil/gas field or a group of oil/gas fields ceases to produce.

In respect of Joint Ventures, the policies in respect of above are specified in Policy No 7 (a).

3. FIXED ASSETS :

(a) Fixed assets including support equipment & facilities are stated at historical cost. All costs relating to acquisition of fixed assets till the time of commissioning of such assets are capitalized.

(b) Computer software acquired and developed to suit Company's internal use being intangible asset is capitalized along with hardware cost.

(c) Leasehold lands including the Right of Use ( ROU) which are perpetual in nature are not amortized.

(d) Any asset, when of no further use, is deleted from the Block. The Written Down Value, if any, in excess of Rs.1000/- or 5% of the original cost, whichever is less is charged to Profit and Loss Account. The deleted assets are carried as Current Assets at adjusted value awaiting disposal through normal tendering procedure. The sale proceeds in excess of adjusted value against individual asset are accounted for as miscellaneous income, when realized.

(e) Physical verification of the fixed assets is carried out by the Company in a phased manner to cover all the items over a period of five years. The discrepancies, if any, noticed are accounted for after reconciliation of the same.

4. DEPRECIATION / DEPLETION

4.1 DEPRECIATION

(a) Depreciation on Fixed Assets is provided for under the "Written Down Value Method"(WDV), at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956 and the fixed assets are stated at cost less depreciation.

(b) Depreciation as computed above on Fixed Assets deployed in exploration and development drilling activities is charged to the cost of each well.

(c) Computer software acquired and developed to suit Company's internal use, being intangible asset, is depreciated at the rate applicable to Computer (Hardware).

(d) Assets costing upto Rs. 5000 each are depreciated fully in the year of capitalization.

4.2 DEPLETION

(a) The producing properties including acquisition costs are depleted using the "Unit of Production Method", based on the related Proved Developed Reserves.

(b) Proved and Developed Reserves of oil and gas are technically assessed regularly and are finally reviewed and estimated at the end of each year in-house by following International practices.

(c) The rate of depletion is computed on a consistent basis with reference to an area designated as Oil / Gas field or a group of Oil/Gas fields, which are aggregated either based on a common geological feature or for operational purpose.

5. FOREIGN CURRENCY TRANSLATION

(a) All non-monetary transactions in foreign currency are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.

(b) Monetary items in the form of Loan, Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of Balance Sheet. Resultant gains or loss is accounted during the year.

(c) Foreign currency transactions in relation to Joint Venture Operations (Overseas) are treated in the following manner:-

(i) Foreign currency transactions on initial recognition in the reporting currency are accounted for at the exchange rates prevailing on the date of transactions. For practical reasons, the average exchange rate of relevant month is taken for the transactions of the month in respect of such Joint Venture Operations, where actual date of transaction is not available or as agreed otherwise.

(ii) At the Balance Sheet date, foreign currency items are translated using the average of the exchange rates prevailing on the Balance Sheet date.

6. IMPAIRMENT OF ASSETS

Producing Properties and Fixed Assets of a "Cash Generating Unit" (CGU) are reviewed for impairment at each Balance Sheet date. In case events and circumstances indicate any impairment, recoverable amount of these assets is determined. An impairment loss is recognized, whenever the carrying amount of such assets exceeds the recoverable amount by writing down such assets to their recoverable amount. The recoverable amount is its 'value in use' . In assessing value in use, the estimated future cash flows from the use of assets are discounted to their present value at appropriate rate. An impairment loss is reversed if there is change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective assets. Subsequent to Impairment, depletion/ depreciation is provided on the revised carrying value of the assets over the remaining useful life as per relevant policy.

7. JOINT VENTURES

In respect of Production Sharing Contracts (PSCs) executed by the Company with other companies and the Government of India to undertake exploration, development and production of Oil and / or Gas activities under a joint venture in various concessions:- (a) The financial statements reflect the share of the Company's assets, liabilities and also the income and expenditure of the Joint Venture Operations in proportion to the participating interest of the Company as per the terms of the PSCs, on a line by line basis. Depreciation, depletion and impairment and value of Stock of Crude Oil are accounted for as per the relevant accounting policies of the Company whereas provision for abandonment is created as per terms of PSC.

(b) Proved and Developed Reserve of Oil & Gas in such concessions are also considered in proportion to participating interest of the Company.

(c) The unamortized balance in the producing property accounts and / or the written down values of the fixed assets installed therein in respect of such concessions, are netted off by the consideration due/ received from other participating companies.

8. INCOME TAX

(a) Current Tax

Income tax is computed as per provisions of the Income tax Act, 1961, read with the terms of the Agreement entered into by the Company with the Government of India under Section 42 of the Income Tax Act, 1961 and accordingly in addition to other items of allowances, the following are considered: -

(i) All intangible expenditure on exploration / prospecting / drilling in Petroleum Exploration Licence areas, excluding expenditure on assets for which usual depreciation allowance is admissible, whether abortive or not, is allowed as a deduction equally over a period of three years commencing from the year in which it is incurred.

(ii) All intangible expenditure on exploration / prospecting /drilling in Mining Lease areas, excluding expenditure on assets for which usual depreciation allowance is admissible, is allowed as a deduction in the year in which it is incurred; and

(iii) Depreciation on tangible drilling expenditure and fixed assets is allowed in accordance with rates prescribed under the Income Tax Rules, 1962 under the Written Down Value (WDV) method.

(b) Deferred Tax is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and is measured using tax rates and laws that have been enacted or substantively enacted up to the Balance Sheet date. Deferred tax assets are reviewed at each Balance Sheet date to assess realization.

9. INVESTMENTS

(a) Long term investments are valued at cost unless there is a permanent diminution in value.

(b) Current investments are valued at lower of cost or fair value.

10. INVENTORY

(a) Stocks of Crude Oil and Liquefied Petroleum Gas are valued at cost (after bifurcation of joint cost on thermal equivalence basis in case of crude oil) or net realizable value, whichever is lower, including applicable excise duty.

(b) Natural Gas in pipeline and crude oil in flow line are not valued.

(c) The stock of stores and spare parts are valued at weighted average cost. Obsolete / unserviceable items, as and when identified, are written off. Any item of stores and spares not moved for last four years as on date of Balance Sheet are identified as slow moving items. Against these Slow moving items a provision of 95% of value is made in the accounts towards likely diminution in value. The stores and spare parts include goods-in-transit which represents items pending arrival and / or acceptance at stipulated destinations.

11. EMPLOYEE BENEFITS

a) Defined Contribution Plans such as Provident Fund, etc. – Contributions are charged to the Profit and Loss Account as incurred.

b) Defined Benefit Plans – The present value of the obligation under such plan, is determined based on an actuarial valuation using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognized immediately in the Profit and Loss Account. In case of funded defined benefit plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis the excess, if any, it treated as a prepayment.

c) The contribution to Provident Fund, Gratuity Fund, and Pension Funds are paid to the respective Funds administered through Trusts having exemptions under Employees' Provident Funds and Miscellaneous Provision Acts 1952 above as applicable. The interest payable by the Provident Fund Trust is notified by the Government. The Company has an obligation to make good the shortfall, if any.

d) Other Long term Employee Benefits are recognized in the same manner as Defined Benefit Plans.

e) Termination benefits are recognized as and when incurred.

12. REVENUE RECOGNITION

(a) Revenue from sale of products and transportation income are recognized on transfer of custody to customers.

(b) Sale of crude oil and gas produced from exploratory wells-in-progress in exploratory areas is deducted from expenditure on such wells.

(c) Sales are inclusive of statutory levies but net of discounts. Any retrospective revision in prices is accounted for in the year of such revision.

(d) Claims on Government / Petroleum Planning & Analysis Cell (PPAC) are booked on acceptance in principle thereof.

(e) Dividend Income is recognized when the right to receive the dividend is established.

(f) Revenue in respect of the following is recognized when there is reasonable certainty regarding ultimate realization:

(i) Short lifted quantity of crude oil, if any.

(ii) Interest on delayed realization from customers.

(g) Insurance claim other than for transit loss of stores items are accounted for on final acceptance by the Insurance Company.

(h) Liquidated Damages for delay in execution of contracts/supplies are accounted for as per the terms of the contracts and are recognized as income in the year of deduction. In case the same is refunded due to reconsideration/justification of the waiver request, the same is accounted for as expense in the year of acceptance.

13. GRANTS & SUBSIDIES

Grants and Subsidies are accounted in revenue or capital account according to their nature, when there is reasonable assurance that the same would be realized. Grants related to specific assets are deducted from the gross value of the concerned assets while arriving at their book value.

14. BORROWING COSTS

Borrowing costs during the construction period, net of Income if any, that are attributable to qualifying assets are capitalized.

15. SEGMENT ACCOUNTING

(a) In accordance with the existing management reporting system, the Company has adopted its products & services (viz. Crude Oil, Natural Gas, LPG and Pipeline Transportation) as the primary reporting segments and the geographical segments viz. Assam & Arunachal Pradesh, Rajasthan etc. as the secondary reporting segments.

(b) Segment assets, liabilities, income and expenses have been either directly identified or allocated to the segments on the basis usually followed for allocation of cost adopted for preparing and presenting the financial statements of the Company.

16. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

(a) The Company generally provides for present obligations resulting from past event, the amount of which can be estimated with reasonable accuracy.

(b) Liabilities contingent upon happening of future event are disclosed by way of a note in the accounts. Claims against the Company where a demand has been raised by any authority or disputed in arbitration exceeding Rupees Five Lakh in each case are recognized as contingent liability, if contested.

(c) Contingent assets are not recognized.

17. EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

18. GENERAL

a) Prior Period Items exceeding Rupees Five Lakh in each case are separately disclosed in the Profit and Loss Account.

b) Adjustments pertaining to earlier years but crystallized during the year, exceeding Rupees Five Lakh in each case are separately disclosed under "Other Adjustments".

c) All expenditure, other than assets, on which usual depreciation allowance is admissible, incurred for Research & Development Projects / Schemes, net of grants-in-aid if any, are charged to the Profit & Loss Account.

d) Joint cost of production relating to crude oil and natural gas is apportioned on thermal equivalence basis.

e) Refunds / Duty drawbacks and Demands from / in relation to Revenue Authorities are accounted for on the basis of acceptance considering information available upto the date of finalization of Accounts.

f) Assets given under finance leases are recognized as receivable at an amount equal to the net investment in the lease and the finance income is based on a constant rate of return on the outstanding net investment in line with AS 19 issued by the ICAI.

g) General administrative expenses including corporate overhead are charged to Profit & Loss Account.

h) Accounting of Contract works under various Projects for the Company carried out by the Company in consortium with other entities is accounted in line with AS 7 issued by ICAI after neutralizing the profit earned by the Company in it from the Project cost.

i) Costs of Intangible assets are accounted for in line with AS 26 issued by ICAI.

---

Mar 31, 2010

1. ACCOUNTING CONVENTION

The Financial Statements of the Company are prepared under historical cost convention, except as otherwise stated, in accordance with the Generally Accepted Accounting Principles (GAAP) in India and materially comply with the mandatory Accounting Standards notifi ed by the Central Government of India under the Companies (Accounting Standard) Rules 2006, and with the relevant provisions of the Companies Act, 1956.

2. EXPLORATION COSTS, DEVELOPMENT EXPENDITURE AND ABANDONMENT COSTS

The Company generally follows the internationally accepted "Successful Efforts Method" (SEM) of Accounting in respect of its Oil and Gas exploration and production activities read with the guidance note on "Accounting for oil & gas producing activities" issued by the Institute of Chartered Accountants of India (ICAI) except for abandonment costs, as explained below :-

2.1 EXPLORATION COSTS AND DEVELOPMENT EXPENDITURE

(a) Geological and Geophysical expenditure, other than cost of tangible assets, equipment and facilities deployed in relation thereto on which usual depreciation allowance as admissible, are expensed in the year of incidence.

(b) Lease carrying costs including license fees are expensed in the year of incidence.

(c) All Acquisition costs, exploration costs involved in drilling and equipping exploratory and appraisal wells and cost of drilling exploratory type strategraphic test wells are initially capitalized as pre-producing property till the time these are either transferred to producing properties on completion or expensed in the year when determined to be dry or of no further use, as the case may be.

(d) Cost of successful exploratory wells and completed development wells including allocated depreciation on support equipment and facilities are capitalized as producing property. Wells are treated as completed only after completion of production testing of the same.

(e) Cost of unsuccessful / dry exploratory wells or part(s) thereof including allocated depreciation on support equipment and facilities, which do not lead to discovery of / accretion to hydrocarbon reserves, are expensed.

(f) Charges towards unfi nished Minimum Work Programme (MWP) and for extension of exploration period under PSC/JVC are treated as Geological & Geophysical or Drilling expenses etc. as the case may be.

(g) Cost of incomplete wells / wells under production testing / completed exploratory wells pending determination of commercial viability including allocated depreciation on support equipment and facilities, are classifi ed as Pre-producing Properties.

(h) Cost of exploratory wells in progress are not carried over for more than two years from the date of completion of the drilling of the well, unless it could be reasonably demonstrated that the well has proved reserves and development of the fi eld in which the well is located has been planned.

2.2 ABANDONMENT COSTS

Abandonment costs relating to dismantling and restoration of well sites (net of salvage value), if any, are accounted for in the year in which the same are incurred instead of creating provision in line with Guidance Note issued by ICAI as the Salvage Value is expected to take care of the Abandonment Costs except in case of Joint Ventures, the policy in respect of which is specifi ed in Policy No.7 below.

3. FIXED ASSETS :

(a) Fixed assets including support equipment & facilities are stated at historical cost. All costs relating to acquisition of fi xed assets till the time of commissioning of such assets are capitalized.

(b) Computer software acquired and developed to suit Companys internal use being intangible asset is capitalized along with hardware cost.

(c) Leasehold lands including the Right of Use ( ROU) which are perpetual in nature are not amortized.

(d) Any asset, when of no further use, is deleted from the Block. The Written Down Value, if any, in excess of Rs.1000/- or 5% of the original cost, whichever is less is charged to Profi t and Loss Account. The deleted assets are carried as Current Assets at adjusted value awaiting disposal through normal tendering procedure. The sale proceeds in excess of adjusted value against individual asset are accounted for as miscellaneous income, when realized.

(e) Physical verifi cation of the fi xed assets is carried out by the Company in a phased manner to cover all the items over a period of fi ve years. The discrepancies, if any, noticed are accounted for after reconciliation of the same.

4. DEPRECIATION / DEPLETION

4.1 DEPRECIATION

(a) Depreciation on Fixed Assets is provided for under the "Written Down Value Method"(WDV), at the rates and in the manner specifi ed in Schedule XIV to the Companies Act, 1956 and the fi xed assets are stated at cost less depreciation.

(b) Depreciation as computed above on Fixed Assets deployed in exploration and development drilling activities is charged to the cost of each well.

(c) Computer software acquired and developed to suit Companys internal use, being intangible asset, is depreciated at the rate applicable to Computer (Hardware).

(d) Assets costing upto Rs. 5000 each are depreciated fully in the year of capitalization.

4.2 DEPLETION

(a) The producing properties including acquisition costs are depleted using the "Unit of Production Method", based on the related Proved Developed Reserves.

(b) Proved and Developed Reserves of oil and gas are technically assessed regularly and are fi nally reviewed and estimated at the end of each year in-house by following International practices.

(c) The rate of depletion is computed on a consistent basis with reference to an area designated as Oil / Gas fi eld or a group of Oil/Gas fi elds, which are aggregated either based on a common geological feature or for operational purpose.

5. FOREIGN CURRENCY TRANSLATION

(a) All non-monetary transactions in foreign currency are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.

(b) Monetary items in the form of Loan, Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of Balance Sheet. Resultant gains or loss is accounted during the year.

(c) Foreign currency transactions in relation to Joint Venture Operations (Overseas) are treated in the following manner:- (i) Foreign currency transactions on initial recognition in the reporting currency are accounted for at the exchange rates prevailing on the date of transactions. For practical reasons, the average exchange rate of relevant month is taken for the transactions of the month in respect of such Joint Venture Operations, where actual date of transaction is not available or as agreed otherwise.

(ii) At the Balance Sheet date, foreign currency items are translated using the average of the exchange rates prevailing on the Balance Sheet date.

6. IMPAIRMENT OF ASSETS

Producing Properties and Fixed Assets of a "Cash Generating Unit" (CGU) are reviewed for impairment at each Balance Sheet date. In case events and circumstances indicate any impairment, recoverable amount of these assets is determined. An impairment loss is recognized, whenever the carrying amount of such assets exceeds the recoverable amount by writing down such assets to their recoverable amount. The recoverable amount is its ‘value in use . In assessing value in use, the estimated future cash fl ows from the use of assets are discounted to their present value at appropriate rate. An impairment loss is reversed if there is change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss/ reversal thereof is adjusted to the carrying value of the respective assets. Subsequent to Impairment, depletion/ depreciation is provided on the revised carrying value of the assets over the remaining useful life as per relevant policy.

7. JOINT VENTURES

In respect of Production Sharing Contracts (PSCs) executed by the Company with other companies and the Government of India to undertake exploration, development and production of Oil and / or Gas activities under a joint venture in various concessions:- (a) The financial statements refl ect the share of the Companys assets, liabilities and also the income and expenditure of the Joint Venture Operations in proportion to the participating interest of the Company as per the terms of the PSCs, on a line by line basis. Depreciation, depletion and impairment and value of Stock of Crude Oil are accounted for as per the relevant accounting policies of the Company whereas provision for abandonment is created as per terms of PSC.

(b) Proved and Developed Reserve of Oil & Gas in such concessions are also considered in proportion to participating interest of the Company.

(c) The unamortized balance in the producing property accounts and / or the written down values of the fi xed assets installed therein in respect of such concessions, are netted off by the consideration due/ received from other participating companies.

8. INCOME TAX

(a) Current Tax

Income tax is computed as per provisions of the Income tax Act, 1961, read with the terms of the Agreement entered into by the Company with the Government of India under Section 42 of the Income Tax Act, 1961 and accordingly in addition to other items of allowances, the following are considered: -

(i) All intangible expenditure on exploration / prospecting / drilling in Petroleum Exploration Licence areas, excluding expenditure on assets for which usual depreciation allowance is admissible, whether abortive or not, is allowed as a deduction equally over a period of three years commencing from the year in which it is incurred.

(ii) All intangible expenditure on exploration / prospecting /drilling in Mining Lease areas, excluding expenditure on assets for which usual depreciation allowance is admissible, is allowed as a deduction in the year in which it is incurred; and

(iii) Depreciation on tangible drilling expenditure and fi xed assets is allowed in accordance with rates prescribed under the Income Tax Rules, 1962 under the Written Down Value (WDV) method.

(b) Deferred Tax is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and is measured using tax rates and laws that have been enacted or substantively enacted up to the Balance Sheet date. Deferred tax assets are reviewed at each Balance Sheet date to assess realization.

9. INVESTMENTS

(a) Long term investments are valued at cost unless there is a permanent diminution in value.

(b) Current investments are valued at lower of cost or fair value.

10. INVENTORY

(a) Stocks of Crude Oil and Liquefi ed Petroleum Gas are valued at cost (after bifurcation of joint cost on thermal equivalence basis in case of crude oil) or net realizable value, whichever is lower, including applicable excise duty.

(b) Natural Gas in pipeline and crude oil in fl ow line are not valued.

(c) The stock of stores and spare parts are valued at weighted average cost. Obsolete / unserviceable items, as and when identifi ed, are written off. Any item of stores and spares not moved for last four years as on date of Balance Sheet are identifi ed as slow moving items. Against these Slow moving items a provision of 95% of value is made in the accounts towards likely diminution in value. The stores and spare parts include goods-in-transit which represents items pending arrival and / or acceptance at stipulated destinations.

11. EMPLOYEE BENEFITS

(a) Defi ned Contribution Plans such as Provident Fund, etc. – Contributions are charged to the Profi t and Loss Account as incurred.

(b) Defi ned Benefi t Plans – The present value of the obligation under such plan, is determined based on an actuarial valuation using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognized immediately in the Profi t and Loss Account. In case of funded defi ned benefi t plans, the fair value of the plan assets is reduced from the gross obligation under the defi ned benefi t plans, to recognize the obligation on net basis the excess, if any, it treated as a prepayment.

(c) The contribution to Provident Fund, Gratuity Fund, and Pension Funds are paid to the respective Funds administered through Trusts having exemptions under Employees Provident Funds and Miscellaneous Provision Acts 1952 above as applicable. The interest payable by the Provident Fund Trust is notifi ed by the Government. The Company has an obligation to make good the shortfall, if any.

(d) Other Long term Employee Benefi ts are recognized in the same manner as Defi ned Benefi t Plans.

(e) Termination benefi ts are recognized as and when incurred.

12. REVENUE RECOGNITION

(a) Revenue from sale of products and transportation income are recognized on transfer of custody to customers.

(b) Sale of crude oil and gas produced from exploratory wells-in-progress in exploratory areas is deducted from expenditure on such wells.

(c) Sales are inclusive of statutory levies but net of discounts. Any retrospective revision in prices is accounted for in the year of such revision.

(d) Claims on Government / Petroleum Planning & Analysis Cell (PPAC) are booked on acceptance in principle thereof.

(e) Dividend Income is recognized when the right to receive the dividend is established.

(f) Revenue in respect of the following is recognized when there is reasonable certainty regarding ultimate realization:

(i) Short lifted quantity of crude oil, if any.

(ii) Interest on delayed realization from customers.

(g) Insurance claim other than for transit loss of stores items are accounted for on fi nal acceptance by the Insurance Company.

(h) Liquidated Damages for delay in execution of contracts/supplies are accounted for as per the terms of the contracts and are recognized as income in the year of deduction. In case the same is refunded due to reconsideration/justifi cation of the waiver request, the same is accounted for as expense in the year of acceptance.

13. GRANTS & SUBSIDIES

Grants and Subsidies are accounted in revenue or capital account according to their nature, when there is reasonable assurance that the same would be realized. Grants related to specifi c assets are deducted from the gross value of the concerned assets while arriving at their book value.

14. BORROWING COSTS

Borrowing costs during the construction period, net of Income if any, that are attributable to qualifying assets are capitalized.

15. SEGMENT ACCOUNTING

(a) In accordance with the existing management reporting system, the Company has adopted its products & services (viz. Crude Oil, Natural Gas, LPG and Pipeline Transportation) as the primary reporting segments and the geographical segments viz. Assam & Arunachal Pradesh, Rajasthan etc. as the secondary reporting segments.

(b) Segment assets, liabilities, income and expenses have been either directly identifi ed or allocated to the segments on the basis usually followed for allocation of cost adopted for preparing and presenting the financial statements of the Company.

16. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

(a) The Company generally provides for present obligations resulting from past event, the amount of which can be estimated with reasonable accuracy.

(b) Liabilities contingent upon happening of future event are disclosed by way of a note in the accounts. Claims against the Company where a demand has been raised by any authority or disputed in arbitration exceeding Rupees Five Lakh in each case are recognized as contingent liability, if contested.

(c) Contingent assets are not recognized.

17. EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profi t for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profi t for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

18. GENERAL

(a) Prior Period Items exceeding Rupees Five Lakh in each case are separately disclosed in the Profi t and Loss Account.

(b) Adjustments pertaining to earlier years but crystallized during the year, exceeding Rupees Five Lakh in each case are separately disclosed under "Other Adjustments".

(c) All expenditure, other than assets, on which usual depreciation allowance is admissible, incurred for Research & Development Projects / Schemes, net of grants-in-aid if any, are charged to the Profi t & Loss Account.

(d) Joint cost of production relating to crude oil and natural gas is apportioned on thermal equivalence basis.

(e) Refunds / Duty drawbacks and Demands from / in relation to Revenue Authorities are accounted for on the basis of acceptance considering information available upto the date of fi nalization of Accounts.

(f) Assets given under fi nance leases are recognized as receivable at an amount equal to the net investment in the lease and the fi nance income is based on a constant rate of return on the outstanding net investment in line with AS 19 issued by the ICAI.

(g) General administrative expenses including corporate overhead are charged to Profi t & Loss Account.

(h) Accounting of Contract works under various Projects for the Company carried out by the Company in consortium with other entities is accounted in line with AS 7 issued by ICAI after neutralizing the profi t earned by the Company in it from the Project cost.

(i) Costs of Intangible assets are accounted for in line with AS 26 issued by ICAI.

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Mar 31, 2003

1. ACCOUNTING CONVENTION

The financial statements are prepared under the historical cost concept. Generally, revenues are recognised on accrual basis with provision made for known losses and expenses.

2. EXPLORATION AND DEVELOPMENT EXPENDITURE

The Company generally follows the internationally accepted "Successful Efforts Method" (SEM) of Accounting in respect of its Oil and Gas exploration and production activities as explained below :-

(a) Geological and Geophysical expenditure, other than cost of tangible assets, equipment and facilities deployed in relation thereto on which usual depreciation allowance is admissible, are expensed in the year of incidence.

(b) Lease carrying costs including license fees are expensed in the year of incidence.

(c) Cost of successful exploratory wells, and completed development wells, including allocated depreciation on support equipment and facilities are capitalized as producing properties.

(d) Cost of unsuccessful/dry exploratory wells, including allocated depreciation on support equipment and facilities, which do not lead to discovery of/ accretion to hydrocarbon reserves, are expensed.

(e) Cost of incomplete wells / wells under production testing / completed exploratory wells pending determination of commercial viability including allocated depreciation on support equipment and facilities, are classified as Pre- producing Properties.

(f) Abandonment costs relating to dismantling and restoration of well sites (net of salvage value), if any, are accounted for in the year in which the same are incurred.

(g) Adjustments arising out of refunds/claims from or to Customs/Revenue Authorities for earlier years are considered as per Para 14(d) of Significant Accounting Policies and treated appropriately/prospectively.

3. FIXED ASSETS/DEPRECIATION ON EQUIPMENT AND FACILITIES PRODUCING PROPERTIES/DEPLETION OF WASTING ASSETS

(a) Depreciation on all Fixed Assets is computed on "Straight Line Method" (SLM), at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956 and the fixed assets are stated at cost less depreciation.

(b) Depreciation as computed above on Fixed Assets deployed in exploration and development drilling activities is charged to the cost of each well.

(c) Assets costing up to Rs. 5000.00 per unit are depreciated fully in the year of capitalisation.

(d) Any assets when certified by the User Department as of no further use are deleted from the Block and Written Down Value, if any are charged to Profit and Loss Account. The deleted assets are accumulated and disposed off through normal tendering procedure. The sale proceeds are accounted for as Miscellaneous income when realized.

(e) (i) The producing properties are depleted using the "Unit of Production Method", based on the related Proved, Developed and Producing (PDP) reserves.

(ii) Proved and Developed Reserves of oil and gas are technically assessed regularly and are finally reviewed and estimated at the end of each year by the Company.

(iii) The rate of depletion is computed with reference to an area designated as Oil/Gas field.

4. FOREIGN CURRENCY TRANSACTIONS

4.1 FOREIGN CURRENCY LOANS

The outstanding balances against foreign currency loans/credits are converted at the rates of exchange prevailing on the date of the Balance Sheet and in case of non-availability of such rates, the rates on the date nearest to the Balance Sheet date are considered. Loss/gain due to exchange rate fluctuations, in respect of foreign currency loans is dealt with in the following manner :-

(a) Exchange rate fluctuations in respect of foreign currency loans which were raised for specific projects, are charged/credited to the respective project accounts and amortised/depreciated in the manner the related project expenditure is being treated as per accounting policy.

(b) Exchange rate fluctuations in respect of other general purpose foreign currency loans not raised for any specific project or for acquisition of any specific asset, are adjusted/booked in the Profit & Loss Account.

4.2 OTHER TRANSACTIONS

Foreign currency transactions in relation to purchase of goods and services are recorded and treated in the following manner :-

(a) In respect of transactions involving purchase of equipment and facilities and procurement of services in relation thereto, in the nature of fixed assets, and for purchase of stores for eventual use in jobs, which are capitalised as per the accounting policies, are recorded on the basis of the exchange rate on the settlement date or the year end date, whichever is earlier.

(b) In respect of transactions involving purchase of stores, spares for consumption in revenue accounts and payment for related services, the transactions are recorded on the basis of the exchange rate on the transaction date, and the exchange rate difference between the transaction and the settlement date or the year end date, as the case may be, is recognised as income or as expense in the period in which they arise.

5. JOINT VENTURES

In respect of production sharing contracts (PSCs) executed by the Company with other companies and the Government of India to undertake development and production activities under a joint venture in its concessions:-

i) The financial statements reflect the share of the Companys assets and liabilities as also the income and expenditure of the joint venture operations in proportion to the participating interest of the Company as per the terms of the PSCs, on a line by line basis.

ii) The reserves of hydrocarbons in such concessions are also stated as per the terms of the PSCs.

iii) The unamortised balance in the producing property accounts and/or the written down values of the fixed assets installed therein in respect of such concessions, are netted off by the consideration due from the other participating companies.

6. INCOME TAX

(a) Current Tax

Income tax is computed as per provisions of the Income Tax Act, 1961, read with the terms of the Agreement entered into by the Company with the Government of India under Section 42 of the Income Tax Act, 1961 and accordingly in addition to other items of allowances :-

i) All intangible expenditure on exploration/prospecting/drilling in Petroleum Exploration License areas, excluding expenditure on assets for which usual depreciation allowance is admissible, whether abortive or not, is allowed as a deduction equally over a period of three years commencing from the year in which it is incurred;

ii) All intangible expenditure on exploration/prospecting/drilling in Mining Lease areas, excluding expenditure on assets for which usual depreciation allowance is admissible, is allowed as a deduction in the year in which it is incurred; and

iii) Depreciation on tangible drilling expenditures and fixed assets is allowed in accordance with rates prescribed under the Income Tax Rules,1962 under the Written Down Value (WDV) method.

(b) Deferred Tax

Deferred Tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences being the difference between taxable income and accounting income that originate in one period and are capable to reversal in one or more subsequent periods and is measured using tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are reviewed at each Balance Sheet date to reassess realisation.

7. LONG TERM INVESTMENTS

Long term investments are valued at cost unless there is a permanent diminution in value.

8. INVENTORY

(a) Stocks of Crude Oil and Liquefied Petroleum Gas are valued at cost, or realisable value, whichever is lower, excluding applicable excise duty recoverable from the customers.

(b) Natural Gas in pipeline is not valued, since not measurable.

(c) The stores and spare parts are valued at weighted average cost. Obsolete/unserviceable items, as and when identified, are written off. Slow moving items (excluding Insurance Spares, items related to deferred projects/drilling wells and accessories of plant & equipment) are valued at residual value at 5% of the aforesaid cost. The stores and spare parts also include goods-in-transit which represents items pending arrival and/or acceptance at stipulated destinations.

9. RETIREMENT AND OTHER BENEFITS

(a) Contributions to approved Gratuity and Pension Funds are based on an Actuarial valuation of the Funds carried out every three years, unless a revision in the valuation is necessitated due to a revision in emoluments or the benefits.

(b) Provision in respect of leave encashment liability is based on an annual Actuarial valuation at the year end.

(c) Compensation paid/payable to the employees under the Voluntary Retirement Scheme are expensed in the year of acceptance of the same by the Company.

10. CLAIMS

Claims on Oil Co-ordination Committee (OCC) / Petroleum Planning & Analysis Cell (PPAC) are booked on acceptance in principle thereof.

11. GRANTS & SUBSIDIES

Grants and Subsidies are accounted in revenue or capital account according to the nature, when there is reasonable assurance that the same would be realised. Grants related to specific assets are presented in the Balance Sheet by showing the grant as a deduction from the gross value of the assets concerned while arriving at their book value.

12. BORROWING COSTS

Borrowing cost during the construction period, net of Income if any, that are attributable to qualifying assets are capitalised.

13. SEGMENT ACCOUNTING

(a) In accordance with the existing management reporting system, the company has adopted its products and services (viz. Crude Oil, Natural Gas, LPG and Pipeline transportation) as the primary reporting segments and the geographical segments viz. Assam & Arunachal Pradesh, Rajasthan etc. as the secondary reporting segments.

(b) Segment assets, liabilities, income and expenses have been either directly identified or allocated to the segments on the basis usually followed for allocation of cost adopted for preparing and presenting the financial statements of the Company.

14. GENERAL

(a) Adjustments pertaining to earlier years, each transaction not exceeding 0.25 per cent of the total expenditure of the Company, are not considered material and hence not separately disclosed in the Profit & Loss Accounts.

(b) All expenditure, other than assets, on which usual depreciation allowance is admissible, incurred for Research & Development Projects/Schemes, net of grants-in-aid, is charged to the Profit & Loss Account.

(c) Joint cost of Production relating to crude oil and natural gas is apportioned on thermal equivalence basis.

(d) Refunds/Duty drawbacks, Demands from/in relation to Revenue Authorities are accounted for on the basis of acceptance considering information available up to the date of finalisation of Accounts.

(e) All the accounting standards prescribed by the Institute of Chartered Accountants of India as mandatory and as applicable to the Company have been complied with while preparing the Accounts.