IndianOil

Business
and
Beyond

Integrated Annual Report 2023-24

This is IndianOil’s

for the Financial Year 2023-24

It provides detailed information about IndianOil’s progress For more
information visit
and highlights for the year ended March 31, 2024. This
is the primary report to our stakeholders in which we
aim to provide a balanced and accurate reflection of our www.iocl.com
value creation methodology, risks and opportunities,
materiality assessment, stakeholder engagement and our
performance scorecard through the deployment of each
capital as well as our future roadmap. or Scan QR code

Integrated and Sustainable Thinking Reporting Framework Reporting Period

At IndianOil, we believe that meaningful value The report follows the International Integrated This integrated report primarily covers the 12-month
creation is a strategic and integrated process. Reporting Council (IIRC) framework, which allows period from April 01, 2023 to March 31, 2024. However,
By understanding the interconnectedness of our us to tell our members and other stakeholders how certain sections of this report represent facts and
resources, we make informed strategic choices we create value for them. A consolidated assessment figures of the previous years as well. The details
that drive sustainable growth. This holistic of the six capitals provides both our strategy as and information in the Integrated Report pertain to
approach ensures we deliver consistent value to our well as the internal materiality process we have Indian Oil Corporation Limited on standalone basis,
stakeholders over the short, medium, and long term. used to determine the content and structure of this unless otherwise specified. Both the financial and
report. The financial and statutory data presented in non-financial aspects are in accordance with the
Our contribution to UNSDGs this report are in line with the requirements of the applicable laws, regulations and standards of the
Companies Act, 2013 and rules notified thereunder, Republic of India.
Our activities also contribute to the United Nations the Indian Accounting Standards, the Securities and
Sustainable Development Goals (SDGs) covering Exchange Board of India (Listing Obligations and
a range of multi-stakeholder goals that we Disclosure Requirements) Regulations, 2015, and Forward-looking Statements
aspire to achieve. the Secretarial Standards.
We have exercised utmost care in the preparation
of this report. It might include forecasts
Our 6 Capitals
and/or information relating to forecasts.
• Manufactured Capital Facts, expectations, and past data are typically
the basis of forecasts. As with all forward-looking
• Intellectual Capital
statements, the actual result may deviate from the
• Financial Capital forecast. As a result, we can provide no assurance
• Human Capital on the correctness, completeness, and up-to-date
• Social & Relationship Capital nature of the information for our forward-looking
statements, as well as for those declared as taken
• Natural Capital from third parties. Therefore, appropriate discretion
on the part of readers is advised. We undertake no
obligation to publicly update any forward-looking
statements, whether as a result of new information,
future events, or otherwise.
Pos i t ive E n e rgy, B u si n ess an d B eyo n d IndianO il Integ rated Annual Rep ort 2 0 2 3 - 2 4

004

Operational Highlights

97.551 MMT
Sales volume of products
19,500+ Km
Pipeline network
94th Rank
In the Fortune Global 500 list for 2023

73.308 MMT
Refining throughput
~J 2.5 Lakh Crore One Trillion
Investments in capex planned Dollar Company by 2047
for Net-Zero targets

Ongoing Refinery Expansions

70.25 to 87.9 World’s First

MMTPA 3G Ethanol plant commissioned at
Panipat in 2023-24

Indane LPG Bottling Plant in Leh

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Financial Highlights Environmental Social Highlights

Highlights

J 8,66,345 Crore 19.62 Trillion BTU J 457.71 Crore

Revenue from Operations Energy consumed CSR Expenditure

J
PAT
39,619 Crore J 409.5 Crore
Investment in renewable
~600 nos.
CSR projects undertaken
energy and greening efforts

J 74,182 Crore
EBITDA
Net-Zero 117.66 Lakh
Beneficiaries of CSR initiatives
Operational emissions by 2046

20.17 %
ROCE
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006

Introducing IndianOil

Propelled by Positive Energy

IndianOil is India’s premier energy major, committed to playing a catalytic role in

securing India’s energy future. Acknowledging ‘Nation-First’ as the DNA of our
core values, alongside Care, Innovation, Passion and Trust, IndianOil continues
its strides in bolstering India’s energy security, advancing the country’s self-
reliance and accomplishing historic firsts in specialised fuels, demonstrating
our technological prowess.
Fuelled by a rich legacy dating back to 1959, IndianOil has built a diversified portfolio, encompassing the entire hydrocarbon value
chain. With cutting-edge R&D expertise, extensive distribution network and robust corporate citizenship initiatives, IndianOil continues
to fuel India’s socio-economic growth story, while creating value for all stakeholders.

Vision
Ethics
Setting high
standards for
ethics and values

Customers People
Fostering Leading with
relationships passion to
for a lifetime excel

The Energy of India

A Globally Admired Company

Technology Innovation
Harnessing Pioneering the
frontier spirit of creativity
technology and research

Environment
Caring for the
environment and
community
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007

IndianOil Values

The North Star Guiding Our Thoughts and Actions

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Diverse Portfolio

Fuelled by Positive Energy

To fortify our leadership position in India’s energy landscape, we are currently

overseeing various ongoing projects. With a combined capital investment of
about H 2.5 Lakh Crore across these projects, we aim to further strengthen our
core business.

Refining, Pipelines and Marketing

As one of India's leading downstream oil and gas
Companies, we continue to broaden our range of
offerings and introduce innovative energy solutions.
Our Pipelines Division reached a major milestone
in 2023-24, with the completion of the largest-ever
pipeline expansion, showcasing our dedication
to strengthening our infrastructure and extending
our coverage. Concurrently, we are enhancing our
petroleum marketing and distribution network to fortify
our leadership and gain market share.

Natural Gas
Foraying into the natural gas domain since 2004, we
have emerged as a major player, investing in LNG
sourcing, import terminals, cross-country pipelines and
City Gas Distribution (CGD) networks. With a sharper
focus on reliability and sustainability, we are committed
to expanding our reach and ensuring a steady supply
of clean energy nationwide.
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009

Petrochemicals
Driven by our ambition to lead the petrochemical
market in India, we are intensifying our downstream
operations and expanding globally. With significant
investments planned, we aim to leverage existing
refinery streams for petrochemical production,
positioning ourselves among Southeast Asia’s
front- runner in the long run.

Exploration and Production

We are strengthening our presence in Exploration and
Production (E&P) through our strategic investments,
leading to significant production growth in 2023-24.

Alternative energy and other businesses

Committed to India’s Net-Zero aspirations, we are
vigorously exploring opportunities in various segments
like renewable energy, waste-to-energy, bioenergy,
sustainable aviation fuel, green hydrogen and more.
Pos i t ive E n e rgy, B u si n ess an d B eyo n d IndianO il Integ rated Annual Rep ort 2 0 2 3 - 2 4

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STANDALONE FINANCIAL STATEMENTS

BALANCE SHEET AS AT MARCH 31, 2024
(J in crore)
Particulars Note No. March 31, 2024 March 31, 2023

ASSETS
Non-current Assets
a) Property, Plant and Equipment 2 1,77,618.95 1,62,646.70
b) Capital Work-in-Progress 2.1 57,024.23 47,201.13
c) Intangible Assets 3 3,247.80 2,838.72
d) Intangible Assets Under Development 3.1 2,041.41 1,789.56
e) Financial Assets
i) Investments 4 61,557.28 47,357.57
ii) Loans 5 2,464.72 2,174.83
iii) Other Financial Assets 6 499.99 251.98
f) Income Tax Assets (Net) 7 1,799.10 1,846.96
g) Other Non-Current Assets 8 4,889.23 4,044.98
3,11,142.71 2,70,152.43
Current Assets
a) Inventories 9 1,12,507.49 1,13,853.41
b) Financial Assets
i) Investments 4 9,530.90 10,161.70
ii) Trade Receivables 10 12,779.41 15,667.38
iii) Cash and Cash Equivalents 11 464.28 363.32
iv) Bank Balances other than above 12 367.92 409.69
v) Loans 5 470.68 381.87
vi) Other Financial Assets 6 5,501.64 4,494.66
c) Current Tax Assets (Net) 7 - 10.61
d) Other Current Assets 8 4,346.92 4,290.72
1,45,969.24 1,49,633.36
Assets Held for Sale 13 128.67 115.54
1,46,097.91 1,49,748.90
Total Assets 4,57,240.62 4,19,901.33

EQUITY AND LIABILITIES

Equity
a) Equity Share Capital 14 13,771.56 13,771.56
b) Other Equity 15 1,62,943.42 1,20,985.98
1,76,714.98 1,34,757.54
Liabilities
Non-Current Liabilities
a) Financial Liabilities
i) Borrowings 16 41,367.53 58,157.63
ii) Lease Liabilities 6,528.11 6,667.44
iii) Other Financial Liabilities 17 233.11 160.78
b) Provisions 18 917.63 910.43
c) Deferred Tax Liabilities (Net) 19 16,637.10 14,613.00
d) Other Non-Current Liabilities 20 4,048.95 3,694.66
69,732.43 84,203.94
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STANDALONE FINANCIAL STATEMENTS

BALANCE SHEET AS AT MARCH 31, 2024
(J in crore)
Particulars Note No. March 31, 2024 March 31, 2023

Current Liabilities
a) Financial Liabilities
i) Borrowings 21 75,128.21 74,337.82
ii) Lease Liabilities 2,842.83 2,387.15
iii) Trade Payables 22
A. Total outstanding dues of Micro and Small Enterprises 1,410.52 1,019.67
B. Total outstanding dues of creditors other than Micro and Small 50,090.44 47,656.76
Enterprises
iv) Other Financial Liabilities 17 55,640.06 49,289.16
b) Other Current Liabilities 20 14,684.39 16,619.42
c) Provisions 18 10,090.13 9,629.87
d) Current Tax Liabilities (Net) 7 906.63 -
2,10,793.21 2,00,939.85
Total Equity and Liabilities 4,57,240.62 4,19,901.33

Material Accounting Policies, Estimates & Judgements 1A & 1B

Accompanying Notes to Financial Statements 2 - 49

For and on Behalf of Board of Directors

Sd/- Sd/- Sd/-

S. M. Vaidya Anuj Jain Kamal Kumar Gwalani
Chairman Director (Finance) Company Secretary
DIN- 06995642 DIN-10310088 ACS-13737

As per our attached Report of even date

For KHANDELWAL JAIN & CO. For K G SOMANI & CO LLP For S R B & ASSOCIATES For KOMANDOOR & CO LLP
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
Firm Regn. No. 105049W Firm Regn. No. 006591N/ Firm Regn. No. 310009E Firm Regn. No. 001420S/
N500377 S200034

Sd/- Sd/- Sd/- Sd/-

Naveen Jain Amber Jaiswal Rajib Sekhar Sahoo Komandoor Mohan Acharya
Partner Partner Partner Partner
M. No. 511596 M. No. 550715 M. No. 053960 M. No. 029082

Place: New Delhi

Dated: 30th April 2024
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STANDALONE FINANCIAL STATEMENTS

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2024
(J in crore)
Particulars Note No. 2023-2024 2022-2023

I. Revenue From Operations 23 8,66,345.38 9,34,952.66

II. Other Income 24 4,780.82 6,235.22
III. Total Income (I+II) 8,71,126.20 9,41,187.88
IV. Expenses:
Cost of Materials Consumed 25 3,90,292.58 4,40,693.11
Excise Duty 91,996.79 95,480.46
Purchases of Stock-in-Trade 2,54,929.35 3,24,606.14
Changes in Inventories of Finished Goods, Stock in trade and 26 1,845.65 (7,064.61)
Work-in-progress
Employee Benefits Expense 27 11,079.56 8,769.85
Finance Costs 28 7,327.79 6,930.27
Depreciation, Amortisation and Impairment on:
a) Property, Plant and Equipment 14,343.55 11,692.25
b) Intangible Assets 166.05 167.19
14,509.60 11,859.44
Impairment Loss (including reversal of impairment loss) on Financial Assets 268.19 303.33
Net Loss on de-recognition of Financial Assets at Amortised Cost 3.90 307.84
Other Expenses 29 46,528.58 49,603.91
Total Expenses (IV) 8,18,781.99 9,31,489.74

V. Profit / (Loss) before Tax (III-IV) 52,344.21 9,698.14

VI. Tax Expense :
Current Tax 11,615.24 442.81
[includes H44.84 crore (2023: H 13.75 crore) relating to prior years]
Deferred Tax 1,110.13 1,013.51
[includes NIL (2023: NIL) relating to prior years]
VII. Profit / (Loss) for the Year (V-VI) 39,618.84 8,241.82
VIII. Other Comprehensive Income: 30
A (i) Items that will not be reclassified to profit or loss 14,456.17 (1,199.71)
A (ii) Income Tax relating to items that will not be reclassified to profit (970.48) (19.21)
or loss
B (i) Items that will be reclassified to profit or loss (197.59) (315.32)
B (ii) Income Tax relating to items that will be reclassified to profit or 68.12 70.51
loss
IX. Total Comprehensive Income for the Year (VII+VIII) (Comprising Profit/ 52,975.06 6,778.09
(Loss) and Other Comprehensive Income for the Year)
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STANDALONE FINANCIAL STATEMENTS

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2024
(J in crore)
Particulars Note No. 2023-2024 2022-2023

X. Earnings per Equity Share (J): 32

(1) Basic 28.77 5.98
(2) Diluted 28.77 5.98
Face Value Per Equity Share (H) 10 10
Material Accounting Policies, Estimates & Judgements 1A & 1B
Accompanying Notes to Financial Statements 2 - 49

For and on Behalf of Board of Directors

Sd/- Sd/- Sd/-

S. M. Vaidya Anuj Jain Kamal Kumar Gwalani
Chairman Director (Finance) Company Secretary
DIN- 06995642 DIN-10310088 ACS-13737

As per our attached Report of even date

For KHANDELWAL JAIN & CO. For K G SOMANI & CO LLP For S R B & ASSOCIATES For KOMANDOOR & CO LLP
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
Firm Regn. No. 105049W Firm Regn. No. 006591N/ Firm Regn. No. 310009E Firm Regn. No. 001420S/
N500377 S200034

Sd/- Sd/- Sd/- Sd/-

Naveen Jain Amber Jaiswal Rajib Sekhar Sahoo Komandoor Mohan Acharya
Partner Partner Partner Partner
M. No. 511596 M. No. 550715 M. No. 053960 M. No. 029082

Place: New Delhi

Dated: 30th April 2024
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STANDALONE FINANCIAL STATEMENTS

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2024
(J in crore)
Particulars 2023-2024 2022-2023

A Cash Flow from Operating Activities:

1 Profit / (Loss) before Tax 52,344.21 9,698.14
2 Adjustments for:
Depreciation, Amortisation and Impairment on Property, Plant & Equipment and 14,509.60 11,859.44
Intangible Assets
Loss/(Profit) on Assets sold or written off (Net) (38.26) 56.47
Amortisation of Capital Grants (31.23) (27.03)
Provision for Probable Contingencies (net) (48.13) (50.80)
Fair Value loss/(gain) on financial instruments classified as fair value through profit (128.41) 340.59
and loss
Unclaimed / Unspent liabilities written back (328.11) (82.34)
Derecognition of Financial Assets and Advances & Claims written off 5.25 319.03
Provision for Doubtful Advances, Claims and Stores (net) 146.31 46.47
Impairment Loss on Financial Assets (Net) 268.19 303.33
Loss/(gain) on Derivatives (84.09) 357.76
Remeasurement of Defined Benefit Plans through OCI (46.14) (93.11)
Exchange Loss/ (Gain) on Borrowings and Lease Liabilities 1,141.59 4,896.59
Interest Income (1,828.29) (2,435.56)
Dividend Income (2,277.42) (3,730.71)
Finance costs 7,327.79 6,930.27
Amortisation and Remeasurement (Net) of PMUY Assets (306.35) 69.04
18,282.30 18,759.44
3 Operating Profit before Working Capital Changes (1+2) 70,626.51 28,457.58
4 Change in Working Capital (excluding Cash & Cash Equivalents):
Trade Receivables & Other Assets 1,216.48 28.28
Inventories 1,302.27 (10,665.96)
Trade Payables & Other Liabilities 5,589.87 3,305.21
Change in Working Capital 8,108.62 (7,332.47)
5 Cash Generated From Operations (3+4) 78,735.13 21,125.11
6 Less : Taxes paid 10,638.53 139.76
7 Net Cash Flow generated from / (used in) Operating Activities (5-6) 68,096.60 20,985.35

B Cash Flow from Investing Activities:

Proceeds from Sale of Property, Plant & Equipment 610.75 804.15
Purchase of Property, Plant & Equipment and Intangible Assets (4,284.68) (4,137.40)
Expenditure on Construction Work in Progress (30,924.39) (27,113.06)
Proceeds from Sale of Investments 5,118.51 12.91
Investment in subsidiaries (110.56) -
Purchase of Other Investments (4,266.31) (821.81)
Receipt of government grants (Capital Grant) 1.72 258.19
Interest Income received 1,875.92 1,980.68
Dividend Income on Investments 2,277.42 3,730.71
Net Cash Flow generated from / (used in) Investing Activities (29,701.62) (25,285.63)

C Cash Flow From Financing Activities:

Proceeds from Long-Term Borrowings 343.61 16,601.51
Repayments of Long-Term Borrowings (17,286.37) (10,086.67)
Payments of Lease Liabilities (Principal + Interest) (2,803.78) (2,244.29)
Proceeds from/(Repayments of) Short-Term Borrowings (137.09) 9,310.42
Interest paid (7,388.58) (6,315.79)
Dividend paid (11,021.81) (3,309.42)
Expenses towards Issue of Bonus Shares - (2.07)
Net Cash Flow generated from / (used in) Financing Activities (38,294.02) 3,953.69
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211

STANDALONE FINANCIAL STATEMENTS

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2024
(J in crore)
Particulars 2023-2024 2022-2023

D Net Change in Cash & Cash Equivalents (A+B+C) 100.96 (346.59)

E1 Cash & Cash Equivalents as at end of the year 464.28 363.32

In Current Account 449.10 354.15
In Fixed Deposit - Maturity within 3 months - 0.47
Bank Balances with Non-Scheduled Banks 12.91 2.74
Cheques, Drafts in hand 1.31 5.41
Cash in Hand, Including Imprest 0.96 0.55

E2 Less: Cash & Cash Equivalents as at the beginning of year 363.32 709.91
In Current Account 354.15 693.09
In Fixed Deposit - Maturity within 3 months 0.47 0.80
Bank Balances with Non-Scheduled Banks 2.74 4.07
Cheques, Drafts in hand 5.41 11.46
Cash in Hand, Including Imprest 0.55 0.49
Net Change in Cash & Cash Equivalents (E1 - E2) 100.96 (346.59)

Notes:

1. Significant non-cash movements in investing and financing activities during the year include:

(a) acquisition of assets by way of lease (net of upfront premium) 3,303.66 2,747.27
(b) issue of bonus shares - 4,707.08
(c) unrealised exchange loss/ (gain) on borrowings and lease liabilities 883.55 4,045.13
2. Statement of Cash Flows is prepared using Indirect Method as per Indian Accounting Standard-7: Statement of Cash Flows.

For and on Behalf of Board of Directors

Sd/- Sd/- Sd/-

S. M. Vaidya Anuj Jain Kamal Kumar Gwalani
Chairman Director (Finance) Company Secretary
DIN- 06995642 DIN-10310088 ACS-13737

As per our attached Report of even date

For KHANDELWAL JAIN & CO. For K G SOMANI & CO LLP For S R B & ASSOCIATES For KOMANDOOR & CO LLP
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
Firm Regn. No. 105049W Firm Regn. No. 006591N/ Firm Regn. No. 310009E Firm Regn. No. 001420S/
N500377 S200034

Sd/- Sd/- Sd/- Sd/-

Naveen Jain Amber Jaiswal Rajib Sekhar Sahoo Komandoor Mohan Acharya
Partner Partner Partner Partner
M. No. 511596 M. No. 550715 M. No. 053960 M. No. 029082

Place: New Delhi

Dated: 30th April 2024
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214

STANDALONE FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS

NOTE-1A: MATERIAL ACCOUNTING POLICIES 2.1.2 Technical know-how / licence fee relating to plants/
facilities and specific software that are integral part of
I. CORPORATE INFORMATION
the related hardware are capitalised as part of cost of the
The financial statements of "Indian Oil Corporation Limited” (“the underlying asset.
Company” or “IOCL”) are for the year ended March 31, 2024.
2.1.3 Spare Parts are capitalized when they meet the definition
The Company is a public limited company incorporated and of PPE, i.e., when the Company intends to use these for a
domiciled in India. Its shares are listed on Bombay Stock period exceeding 12 months.
Exchange and National Stock Exchange in India. The registered
office of the Company is located at Indian Oil Bhavan, G-9, Ali 2.1.4 Environment responsibility related obligations directly
Yavar Jung Marg, Bandra (East), Mumbai. attributable to projects is recognized as project cost on
the basis of progress of project or on actual incurrence,
Indian Oil is India's flagship Maharatna national oil company whichever is higher.
with business interests straddling the entire hydrocarbon value
chain - from refining, pipeline transportation & marketing, to 2.1.5 On transition to Ind AS, the Company has elected to continue
exploration & production of crude oil & gas, petrochemicals, with the carrying value of all of its PPE recognized as at April
gas marketing, alternative energy sources and globalisation of 1, 2015 measured as per the previous GAAP and use that
downstream operations. carrying value as the deemed cost of the PPE.

The financial statements have been approved for issue in 2.2 Capital Work in Progress (CWIP)
accordance with a resolution of the Board of Directors passed in 2.2.1 Expenditure incurred on assets under construction
its meeting held on April 30, 2024. (including a project) is carried at cost under CWIP.

II. MATERIAL ACCOUNTING POLICIES 2.2.2 Construction Period Expenses

1. Basis of preparation and statement of compliance Revenue expenses exclusively attributable to projects
1.1 The financial statements have been prepared on accrual incurred during construction period are capitalized.
basis and in accordance with the applicable Indian
Borrowing cost incurred during construction period on loans
Accounting Standards (Ind AS) prescribed under Section
specifically borrowed and utilized for projects is capitalized
133 of the Companies Act, 2013 (“the Act”) read with the
on quarterly basis up to the date of capitalization.
Companies (Indian Accounting Standards) Rules and other
relevant provisions of the Act and Rules thereunder, as Borrowing cost, if any, incurred on General Borrowings used
amended from time to time. for projects is capitalized at the weighted average cost of all
borrowings other than those mentioned above. The amount
1.2 The financial statements have been prepared on a historical
of such borrowings is determined on quarterly basis after
cost basis, except for the following assets and liabilities
setting off the amount of internal accruals.
which have been measured at fair value:
2.2.3 Capital Stores
- Derivative financial instruments,
Capital Stores are valued at weighted average cost.
- Certain financial assets and liabilities measured at
Specific provision is made for likely diminution in value,
fair value (refer serial no. 16 of accounting policies
wherever required.
regarding financial instruments) and

- Plan assets related to employee benefits (refer 2.3 Intangible Assets & Amortisation
serial no. 12 of accounting policies regarding 2.3.1 Technical know-how / licence fee relating to production
employee benefits) process and process design are recognized as Intangible
Assets and amortised on a straight-line basis over the life of
1.3 The financial statements are presented in Indian Rupees (H)
the underlying plant/ facility.
which is Company’s presentation and functional currency
and all values are rounded to the nearest crore (up to two 2.3.2 Expenditure incurred in research phase is charged to
decimals) except when otherwise indicated. revenue and that in development phase, unless it is of
capital nature, is also charged to revenue.
2. Property, Plant and Equipment (PPE) and Intangible Assets
2.1 Property, Plant and Equipment (PPE) 2.3.3 Cost incurred on computer software/licences purchased/
developed resulting in future economic benefits, other
2.1.1 Property, Plant and Equipment (PPE) are stated in the
than specific software that are integral part of the
Balance Sheet at cost, less any accumulated depreciation
related hardware, are capitalized as Intangible Asset and
and accumulated impairment losses (if any), except freehold
amortised over a period of three years beginning from the
land which are carried at historical cost.
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215
NOTES TO STANDALONE FINANCIAL STATEMENTS
NOTE-1A: MATERIAL ACCOUNTING POLICIES (Contd..)

month in which such software/ licences are capitalized. 10 years for Dispensing Unit
However, where such computer software/ licence is
25 years for solar power plant
under development or is not yet ready for its intended use,
accumulated cost incurred on such items are accounted as 13 years for Optical Fiber Cable
“Intangible Assets Under Development”.
Certain assets of R&D Centre (15-25 years)
2.3.4 Right of ways with indefinite useful lives are not amortised Certain assets of CGD business, (Compressor /
but tested for impairment annually at the cash-generating Booster Compressor and Dispenser - 10 years,
unit level. The assessment of indefinite life is reviewed Cascade – 20 years)
annually to determine whether the indefinite life continues
to be supportable. If not, the change in useful life from Moulds used for the manufacturing of the
indefinite to finite is made on a prospective basis. packaging material for Lubricants- 5 years

In other cases, like Spare Parts etc. (2-30 years)

2.3.5 Intangible Assets acquired are measured on initial
recognition at cost. The cost of Intangible Assets acquired b. In case of specific agreements e.g., enabling assets
in a business combination is based on its fair value at the etc., useful life as per agreement or Schedule II to the
date of acquisition. Following initial recognition, Intangible Act, whichever is lower.
Assets are carried at cost less any accumulated amortisation
and accumulated impairment losses. In case of internally c. In case of immovable assets constructed on leasehold
generated intangibles, development cost is recognized as land, useful life as per Schedule-II to the Act or lease
an asset when all the recognition criteria are met. period of land (considering renewable / likely renewable
period over and above the contractual lease period
2.3.6 Intangible Assets are amortised over the useful life on considered for the leases), whichever is lower, and
straight line basis and assessed for impairment whenever
there is an indication that the Intangible Asset may be d. In case where useful life is mandated as per the other
impaired. The amortisation period and the amortisation relevant statute or any of the regulation.
method for an Intangible Asset are reviewed at the end of
The Company depreciates components of the main asset
each reporting period. Changes in the expected useful life
that are significant in value and have different useful lives
or the expected pattern of consumption of future economic
as compared to the main asset separately. The Company
benefits embodied in the asset are considered to modify
depreciates spares over the life of the spare from the date it
the amortisation period or method, as appropriate, and
is available for use.
are treated as changes in accounting estimates. The
amortisation expense on intangible assets is recognized in 2.4.2 Depreciation is charged pro-rata on monthly basis on
the Statement of Profit and Loss unless such expenditure assets, from/up to the month of capitalization/ sale,
forms part of carrying value of another asset. disposal or classified to Asset held for disposal.

2.3.7 On transition to Ind AS, the Company has elected to 2.4.3 Residual value is determined considering past experience
continue with the carrying value of all of its Intangible and generally the same is between 0 to 5% of cost
Assets recognized as at April 1, 2015 measured as per the of assets except:
previous GAAP and use that carrying value as the deemed
cost of the Intangible Assets. a. In case of Steel LPG cylinder and pressure regulator,
residual value is considered at 25% and in case of fibre
2.3.8 Amortisation is charged pro-rata on monthly basis on composite LPG cylinder, residual value is considered
assets, from/upto the month of capitalization/ sale, disposal at 10% based on estimated realisable value
or classified to Asset held for disposal.
b. in case of catalyst with noble metal content,
2.4 Depreciation residual value is considered based on the cost of
2.4.1 Cost of PPE (net of residual value) excluding freehold land metal content and
is depreciated on straight-line method as per the useful life
c. In few cases residual value is considered based on
prescribed in Schedule II to the Act except in case of the
transfer value agreed in respective agreement.
following assets:
2.4.4 PPE, other than LPG Cylinders and Pressure Regulators,
a. Useful life based on technical assessment
costing upto H 5,000/- per item are depreciated fully in
15 years for Plant and Equipment relating the year of capitalization. Further, spares, components
to Retail Outlets (other than storage tanks like catalyst excluding noble metal content and major
and related equipment), LPG cylinders and overhaul/ inspection are also depreciated fully over their
pressure regulators respective useful life.
Pos i t ive E n e rgy, B u si n ess an d B eyo n d IndianO il Integ rated Annual Rep ort 2 0 2 3 - 2 4

216
NOTES TO STANDALONE FINANCIAL STATEMENTS
NOTE-1A: MATERIAL ACCOUNTING POLICIES (Contd..)
2.4.5 The residual values, useful lives and methods of depreciation is recognized on a straight-line basis over the term of the
of PPE are reviewed at each financial year end and adjusted relevant lease except where another systematic basis
prospectively, if appropriate. is more representative of the time pattern of the benefit
derived from the asset given on lease.
3. Leases
The Company assesses at contract inception whether All assets given on finance lease are shown as receivables
a contract is, or contains, a lease. That is, if the contract at an amount equal to net investment in the lease. Principal
conveys the right to control the use of an identified asset for component of the lease receipts is adjusted against
a period of time in exchange for consideration. outstanding receivables and interest income is accounted
by applying the interest rate implicit in the lease to the
3.1 Leases as Lessee (Assets taken on lease) net investment.
The Company applies a single recognition and measurement 3.2.2 When the Company is an intermediate lessor it accounts for
approach for all leases, except for short-term leases and its interests in the head lease and the sub-lease separately.
leases of low-value assets. The Company recognizes lease It assesses the lease classification of a sub-lease with
liabilities to make lease payments and right-of-use assets reference to the ROU asset arising from the head lease, not
representing the right to use the underlying assets. with reference to the underlying asset. If a head lease is a
short-term lease to which the Company applies the short-
3.1.1 Lease Liabilities
term lease exemption described above, then it classifies the
At the commencement date of the lease, the Company sub-lease as an operating lease.
recognizes lease liabilities measured at the present value
of lease payments to be made over the contractual lease 4. Impairment Of Non-Financial Assets (Also Refer Para 14
term, for which enforceable rights is available. In calculating For Impairment Of E&P Assets)
the present value of lease payments, the Company uses the The Company assesses, at each reporting date, whether
incremental borrowing rate at the lease commencement there is an indication that an asset may be impaired. If any
date, if the interest rate implicit in the lease is not readily indication exists, or when annual impairment testing for
determinable. After the commencement date, the amount an asset is required, the Company estimates the asset’s
of lease liabilities is increased to reflect the accretion of recoverable amount. An asset’s recoverable amount is the
interest and reduced for the lease payments made. higher of an asset’s or cash-generating unit’s (CGU) fair
value less cost of disposal and its value in use. Impairment
3.1.2 Right-of-use Assets
loss is recognized when the carrying amount of an asset
The Company recognizes right-of-use (ROU) assets exceeds recoverable amount.
at the commencement date of the lease (i.e., the date
the underlying asset is available for use). Right-of-use In assessing value in use, the estimated future cash flows
assets are measured at cost, less any accumulated are discounted to their present value using a pre-tax
depreciation and impairment losses, and adjusted for any discount rate that reflects current market assessments of
remeasurement of lease liabilities. Perpetual Right of use the time value of money and the risks specific to the asset.
(ROU) assets related to land are not depreciated but tested In determining fair value less cost of disposal, recent market
for Impairment loss, if any. transactions are taken into account. If no such transactions
can be identified, an appropriate valuation model is used.
3.1.3 Short-term leases and leases of low-value assets These calculations are corroborated by valuation multiples,
The Company applies the short-term lease recognition quoted share prices for publicly traded companies or other
exemption to its short-term leases of Property, Plant and available fair value indicators.
Equipment (i.e., those leases that have a lease term of 12
The Company bases its impairment calculation on detailed
months or less from the commencement date and do
budgets and forecast calculations, which are prepared
not contain a purchase option). It also applies the lease of
separately for each of the Company's CGUs to which the
low-value assets recognition exemption to leases that are
individual assets are allocated. These budgets and forecast
considered of low value and is not intended for sublease.
calculations generally cover a period of 15 years. For longer
Lease payments on short-term leases and leases of low-value
periods, a long-term growth rate is calculated and applied to
assets are recognized as expense on a straight-line basis over
project future cash flows after the fifteenth year. To estimate
the lease term or another systematic basis if that basis is more
cash flow projections beyond periods covered by the most
representative of the pattern of the lessee’s benefit.
recent budgets/forecasts, the Company extrapolates cash
3.2 Leases as Lessor (assets given on lease) flow projections in the budget using a steady or declining
growth rate for subsequent years, unless an increasing rate
3.2.1 When the company acts as lessor, it determines at the
can be justified.
commencement of the lease whether it is a finance lease
or an operating lease. Rental income from operating lease