3.21. Provisions, Contingent Liabilities and Contingent Assets

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

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. 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).

The Company discloses the part of the obligation as a contingent liability that is expected to be met by other parties, where it is jointly and severally liable for an obligation.

Contingent liabilities are disclosed in the Financial Statements by way of notes to accounts, unless possibility of an outflow of resources embodying economic benefit is remote. Contingent liabilities are disclosed on the basis of judgment of the management/independent experts. These are reviewed at each balance sheet date and are adjusted to reflect the current management estimate.

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company. These assets are disclosed in the Financial Statements when an inflow of economic benefits is probable.

3.22. Financial instruments

Financial instruments are recognised when Company becomes a party to the contractual provisions of the instruments.

A financial instrument is initially recognised at fair value and is adjusted (in the case of instruments not classified at FVTPL) for transaction costs that are incremental and directly attributable to the acquisition or issuance of the financial instrument, and fees that are an integral part

of the effective interest rate. Transaction costs and fees paid or received relating to financial instruments carried at FVTPL are recorded in the Statement of Profit and Loss.

3.23. Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

3.24. Financial assets

(i) Initial recognition and measurement

All financial assets are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets (other than financial assets at fair value through profit or loss) are added to the fair value measured on initial recognition of financial asset.

(ii) Classification and subsequent measurement

Financial assets are classified based on the business model within which the asset is held and on the basis of the financial asset’s contractual cash flow characteristics.

- Financial Assets at amortized cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Such financial assets are measured at amortized cost using the Effective Interest Rate (EIR) method.

- Financial Assets at Fair value through other comprehensive income (FVTOCI)

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets.

Fair value movements are recognized in Other Comprehensive Income (OCI). However, the Company

recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the statement of profit and loss. On de-recognition of the asset, cumulative gain or loss previously recognized in OCI is recycled from OCI to the statement of profit and loss.

- Financial Assets at Fair value through profit or loss (FVTPL)

Financial assets are measured at fair value through profit or loss unless they are measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets at fair value through profit or loss are immediately recognised in statement of profit and loss.

- Investment in Equity instruments

All equity investments in entities other than subsidiaries, associates and joint venture companies are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other such equity instruments, the Company decides to classify the same either as at FVTOCI or FVTPL. The election made on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.

For equity instrument classified as FVTOCI, all fair value changes on the instrument, excluding dividends, are recognized in the OCI. Dividends on such equity instruments are recognized in the Statement of Profit and Loss. There is no recycling of the amounts from OCI to Statement of Profit and Loss, even on sale/ disposal of such investments. However, the Company may transfer the cumulative gain or loss within equity on sale / disposal of the investments.

(iii) Impairment of financial assets

In accordance with Ind AS 109 Financial Instruments, the Company applies the expected credit loss (ECL) model for measurement and recognition of impairment loss on financial assets measured at amortised costs or debt instruments measured at FVTOCI, and trade receivables/ amounts receivable from contract with customers.

Loss allowance for trade receivables/ amounts receivable from contract with customers are always measured at an amount equal to lifetime ECL’s (simplified approach).

Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.

12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

For recognition of impairment loss on other financial assets including Cash Call receivables from JO partners, the Company follows general approach wherein it is required to determine whether there has been a significant increase in the credit risk (SICR) since initial recognition. If credit risk has not increased significantly, 12-months ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment, that includes forward-looking information.

If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the company reverts to recognizing impairment loss allowance based on 12-months ECL.

(iv) De-recognition

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109.

On derecognition of a financial asset in its entirety (except for equity instruments designated as FVTOCI), the difference between the asset’s carrying amount and

the sum of the consideration received and receivable is recognised in the Statement of Profit and Loss.

3.25. Financial liabilities

(i) Initial recognition and measurement

All financial liabilities are recognized initially at fair value and, in case where such financial liabilities are subsequently measured at amortized cost, directly attributable transaction cost are netted from its fair value.

(ii) Subsequent measurement

Financial liabilities are measured at amortized cost using the effective interest method.

(iii) Derecognition

A financial liability is derecognized when the obligation specified in the contract is discharged or cancelled or expires.

(iv) Financial Guarantee Contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument.

Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of:-

(a) the amount of loss allowance determined as per impairment requirements of Ind AS 109 ‘Financial Instruments’ and

(b) the amount recognized less the cumulative amount of income recognized in accordance with the principles of Ind AS 115 ‘Revenue from Contracts with Customers’.

[refer Note no. 3.1 for Financial guarantee issued to subsidiaries, associates and joint venture]

(v) Offsetting of financial assets and financial liabilities

Financial assets and financial liabilities are offset, and the net amount is presented in the balance sheet if there is a currently enforceable legal right to offset the recognized

amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

3.26. Cash and cash equivalents

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

3.27. Earnings per share

Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

3.28. Statement of Cash Flow

Cash flows are reported using the indirect method, whereby profit after tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of future or past operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows.

3.29. Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). The Board of Directors has been considered as CODM of the company.

Segment results that are reported to the CODM include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate expenses, finance costs, income tax expenses and corporate income that are not directly attributable to segments. Revenue directly attributable to the segments is considered as segment revenue. Expenses directly attributable to the segments and common expenses allocated on a reasonable basis are considered as segment expenses.

3.30. Events after Reporting Date

The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements.

4. Critical Accounting Judgments, Assumptions and Key Sources of Estimation Uncertainty

Inherent in the application of many of the accounting policies used in preparing the Financial Statements is the need for Management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual outcomes could differ from the estimates and assumptions used.

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

Key source of judgments, assumptions and estimation uncertainty in the preparation of the Financial Statements which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are in respect of Oil and Gas reserves, long term production profile, impairment, useful lives of Property, Plant and Equipment, depletion of oil and gas assets, decommissioning provision, employee benefit obligations, impairment, provision for income tax, measurement of deferred tax assets, litigation and contingent assets and liabilities.

4.1. Critical judgments in applying accounting policies

The following are the critical judgements, apart from those involving estimations (refer Note no. 4.2), that the Management have made in the process of applying the Company’s accounting policies and that have the significant effect on the amounts recognized in the Financial Statements.

(a) Determination of functional currency

Currency of the primary economic environment in which the Company operates (“the functional currency”) is Indian Rupee (?) in which the Company primarily generates and expends cash. Accordingly, the Management has assessed its functional currency to be Indian Rupee (?).

(b) Classification of investment

Judgement is required in assessing the level of control obtained in a transaction to acquire an interest in another entity; depending upon the facts and circumstances in each case, the Company may obtain control, joint control or significant influence over the entity or arrangement. Transactions which give the Company control of a business are business combinations. If the Company obtains joint control of an arrangement, judgement is also required to assess whether the arrangement is a joint operation or a joint venture. If the Company has neither control nor joint control, it may be in a position to exercise significant influence over the entity, which is then classified as an associate.

The Company has 49.36% equity interest in ONGC Petro additions Limited (OPaL). The Company has subscribed for 3,451.24 million (Previous year 3,451.24 million) share warrants as at March 31, 2023, entitling the Company to exchange each warrant with an equity share of face value of ' 10 each against which ' 9.75 each has been paid.

Further the Company has entered into an arrangement for backstopping support towards repayment of principal and coupon of Compulsory Convertible Debentures (CCDs) amounting to ' 77,780.00 million (Previous year ' 77,780.00 million) issued by ONGC Petro additions Limited in three tranches. The outstanding interest accrued as at March 31, 2024 is ' 2,212.45 million (Previous year ' 1,766.85 million).

The Company has evaluated the interest in OPaL to be in the nature of joint venture as the shareholder agreement between OPaL and the joint Venture partners, Gas Authority of India Limited (GAIL) and the Company provides for sharing of control on the decisions relating to specific activities of OPaL by both the Joint Venture partners.

(c) Identifying whether a contract includes a lease

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

(d) Determining lease term (including extension and termination options)

The Company considers the lease term as the noncancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. Assessment of extension/termination options is made on lease by lease basis, on the basis of relevant facts and circumstances. The lease term is reassessed if an option is actually exercised. In case of contracts, where the Company has the option to hire and de-hire the underlying asset on some circumstances (such as operational requirements), the lease term is considered to be initial contract period.

(e) Identifying lease payments for computation of lease liability

To identify fixed (including in-substance fixed) lease payments, the Company consider the non-operating day rate/standby as minimum fixed lease payments for the purpose of computation of lease liability and corresponding right of use asset.

(f) Low value leases

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

(g) Evaluation of indicators for impairment of Oil and Gas Assets

The evaluation of applicability of indicators of impairment of assets requires assessment of external factors (significant decline in asset’s value, significant changes in the technological, market, economic or legal environment, market interest rates etc.) and internal factors (obsolescence or physical damage of an asset, poor economic performance of the asset etc.) which could result in significant change in recoverable amount of the Oil and Gas Assets.

(h) Oil & Gas Accounting

The determination of whether potentially economic oil and natural gas reserves have been discovered by an exploration well is usually made within one year of well completion, but can take longer, depending on the complexity of the geological structure. Exploration wells that discover potentially economic quantities of oil and natural gas and are in areas where major capital expenditure (e.g. an offshore platform or a pipeline) would be required before production could begin, and where the economic viability of that major capital expenditure depends on the successful completion of further exploration work in the area, remain capitalized on the balance sheet as long as additional exploration or appraisal work is under way or firmly planned.

It is not unusual to have exploration wells and exploratory-type stratigraphic test wells remaining suspended on the balance sheet for several years while additional appraisal drilling and seismic work on the potential oil and natural gas field is performed or while the optimum development plans and timing are established. All such carried costs are subject to regular technical, commercial and management review on at least an annual basis to confirm the continued intent to develop, or otherwise extract value from the discovery. Where this is no longer the case, the costs are immediately expensed.

4.2. Assumptions and key sources of estimation uncertainty

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

(a) Estimation of provision for decommissioning

The Company estimates provision for decommissioning as per the principles of Ind AS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’ for the future decommissioning of Oil and Gas assets at the end of their economic lives. Most of these decommissioning activities would be in the future, the exact requirements that may have to be met when the removal events occur are uncertain. Technologies and costs for decommissioning are constantly changing. The timing and amounts of future cash flows are subject to significant uncertainty.

The timing and amount of future expenditures are reviewed annually or when there is a material change, together with rate of inflation for escalation of current cost estimates and the interest rate used in discounting the cash flows. The economic life of the Oil and Gas assets is estimated on the basis of long term production profile of the relevant Oil and Gas asset and the management expects that the Mining Lease(s) expired will be extended before the end of the economic life of the related assets.

The long term average General Consumer Price Index (CPI) for inflation i.e. 5.29% (Previous year 4.67%) has been used for escalation of the current cost estimates and pre-tax discounting rate used to determine the balance sheet obligation as at the end of the year is long term average risk free government bond rate with 10 year yield i.e. 6.98% (Previous year 6.92%).

(b) Determining discount rate for computation of lease liability

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

For leases denominated in Company’s functional currency, the Company considers the incremental borrowing rate to be risk free rate of government bond as adjusted with applicable credit risk spread and other lease specific adjustments like relevant lease term. For leases denominated in foreign currency, the Company considers the incremental borrowing rate as risk free rate based on US treasury bills as adjusted with applicable credit risk spread and other lease specific adjustments like relevant lease term and currency of the obligation.

(c) Determination of cash generating unit (CGU)

The Company is engaged mainly in the business of oil and gas exploration and production in Onshore and Offshore. In case of onshore assets, the fields are using common production/transportation facilities and are sufficiently economically interdependent to constitute a single cash generating unit (CGU). Accordingly, impairment test of all onshore fields is performed in aggregate of all those fields at the Asset Level. In case of Offshore Assets, a field is generally considered as CGU except for fields which are developed as a Cluster or group of Clusters, for which common facilities are used, in which case the impairment testing is performed in aggregate for all the fields included in the Cluster or group of Clusters.

(d) Impairment of assets

Determination as to whether, and by how much, a CGU is impaired involves Management estimates on uncertain matters such as future crude oil, natural gas and value added product (VAP) prices, the effects of inflation on operating expenses, discount rates, production profiles for crude oil, natural gas and value added products. For Oil and Gas assets, the expected future cash flows are estimated using Management’s best estimate of future crude oil and natural gas prices, production and reserves volumes.

The present values of cash flows are determined by applying pre tax-discount rates of 16.10% (Previous year 14.74%) for Rupee transactions and 12.16% (Previous year 10.10%) for crude oil, natural gas and value added products revenue, which are measured in USD. Future cash inflows from sale of crude oil, natural gas and value added products are estimated using Management’s best estimate of future prices and its co-relations with benchmark crudes and other petroleum products.

The discount rate used is based upon the cost of capital from an established model.

The value in use of the producing/developing CGUs is determined under a multi-stage approach, wherein future cash flows are initially estimated based on Proved Developed Reserves. Under circumstances where the further development of the fields in the CGUs is under progress and where the carrying value of the CGUs is

not likely to be recovered through exploitation of proved developed reserves alone, the Proved and probable reserves (2P) of the CGUs are also taken for the purpose of estimating future cash flows. In such cases, full estimate of the expected cost of evaluation/development is also considered while determining the value in use.

The discount rates applied in the assessment of impairment calculation are re-assessed each year.

(e) Estimation of reserves

Management estimates reserves in relation to all the Oil and Gas Assets based on the policies and procedures determined by the Reserves Estimation Committee (REC) of the Company. The estimates so determined are used for the computation of depletion and impairment testing.

The year-end reserves of the Company are estimated by the REC which follows international reservoir engineering procedures consistently. For reporting its petroleum resources, company follows universally accepted Petroleum Resources Management System-PRMS (2018) sponsored by Society of Petroleum Engineers (SPE), World Petroleum Council (WPC), American Association of Petroleum Geologists (AAPG), Society of Petroleum Evaluation Engineers (SPEE), Society of Exploration Geophysicists (SEG), Society of Petrophysicists and Well Log Analysts (SPWLA) and European Association of Geoscientists and Engineers (EAGE).

PRMS (2018) defines Proved Reserves under Reserves category as those quantities of petroleum that, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable from a given date forward from known reservoirs and under defined economic conditions, operating methods, and government regulations. Further it defines Developed Reserves as expected quantities to be recovered from existing wells and facilities and Undeveloped Reserves as the Quantities expected to be recovered through future significant investments.

Volumetric estimation is the main procedure in estimation which uses reservoir rock and fluid properties to calculate hydrocarbons in-place and then estimate that portion which will be recovered from it. As the field gets matured and reasonably good production history is available,

then performance methods such as material balance, simulation, decline curve analysis are applied to get more accurate assessments.

The annual revision of estimates is based on the yearly exploratory and development activities and results thereof. New In-place Volume and Estimated Ultimate Recovery (EUR) are estimated for new discoveries. Revision of estimates are also due to Field growth which includes delineation/appraisal activities and field reassessment. Delineation/appraisal activities lead to revision in estimates due to new sub-surface data. Similarly, reassessment is also carried out for existing fields due to necessity of revision in petro-physical parameters, new seismic input, updating of static and dynamic models and performance analysis leading to change in Reserves. Intervention of new technology, change in classifications and contractual provisions also necessitate revision in estimation of Reserves.

As per Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information (revised June 2019), approved by the SPE Board on 25 June 2019

“The reliability of Reserves information is considerably affected by several factors. Initially, it should be noted that Reserves information is imprecise as a result of the inherent uncertainties in, and the limited nature of, the accumulation and interpretation of data upon which the estimating and auditing of Reserves information is predicated. Moreover, the methods and data used in estimating Reserves information are often necessarily indirect or analogical in character rather than direct or deductive...”

“The estimation of Reserves and other Reserves information is an imprecise science because of the many unknown geological and reservoir factors that can only be estimated through sampling techniques. Reserves are therefore only estimates, and they cannot be audited for the purpose of verifying exactness...”

The Company uses the services of third-party agencies for due diligence and it gets the reserves of its major fields audited periodically by internationally reputed consultants who adopt latest industry practices for their evaluation.

(f) Defined benefit obligation (DBO)

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

(g) Litigations

From time to time, the Company is subject to legal proceedings and the ultimate outcome of each being always subject to many uncertainties inherent in litigation. A provision for litigation is made when it is considered probable that a payment will be made and the amount of the loss can be reasonably estimated. Significant judgment is made when evaluating, among other factors, the probability of unfavourable outcome and the liability to make a reasonable estimate of the amount of potential loss. Provision for litigations are reviewed at the end of each accounting period and revisions made for the changes in facts and circumstances.

(h) Impairment of Financial Assets:

In accordance with Ind AS 109 - Financial Instruments, the Company applies ECL model for measurement and recognition of impairment loss on the trade receivables and other financial assets. For trade receivables, the Company follows rating-based approach to compute default rates based on Credit ratings of the borrowers and forward-looking estimates are incorporated using relevant macroeconomic indicators. These include GDP growth rate and Crude oil and NGL production forecast is to ensure that the overall economy outlook as well as the E&P industry outlook is considered while estimating the forecasted probability of default values.

For other financial assets, the Company applies general approach for recognition of impairment losses wherein the Company uses judgment in considering the probability of default upon initial recognition and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period.

5.1. The Company had elected to continue with the carrying value of its Property Plant & Equipment (including Oil & Gas Asset), Capital Work-in-Progress and Intangible Assets recognised as of April 1, 2015 (transition date) measured as per the Previous GAAP and used that carrying value as its deemed cost as on the transition date as per Para D7AA of Ind AS 101 except for decommissioning and restoration provision included in the cost of Property Plant & Equipment (including Oil & Gas Asset) and Capital Work-in-Progress which have been adjusted in terms of para D21 of Ind AS 101 ‘First -time Adoption of Indian Accounting Standards’.

5.2. During the year 2016-17, Tapti A series facilities which were part of the assets of PMT Joint Operation (JO) and surrendered by the JO to the Government of India (Gol) as per the terms of JO agreement were transferred by GoI to the Company free of cost as its nominee and recorded as a non-monetary grant. During the year 201920, the Company opted to recognize the non-monetary government grant at nominal value and recorded the said facilities at nominal value, in line with amendment in Ind AS 20 ‘Accounting for Government Grants and Disclosure of Government Assistance’ vide Companies (Indian Accounting Standards) Second Amendment Rules, 2018 (the ‘Rules’). These assets were decapitalised / retired to the extent of the Company’s share in the Joint Operation.

Ministry of Petroleum and Natural Gas, Government of India (GoI) vide letter dated May 31,2019 assigned the Panna-Mukta fields w.e.f. December 22, 2019 on nomination basis to the Company on expiry of present PSC without any cost to ensure continuity of operation. Being a nonmonetary grant, the Company has recorded these assets and grant at a nominal value.

Subsequent to assignment of Panna-Mukta field to the Company GoI has directed JV partners of the PMT (Panna Mukta & Tapti) field to transfer the existing SRF fund maintained for decommissioning obligation for Tapti Part A facility and Panna Mukta fields to the Company along with full financial and physical liability of site restoration and decommissioning of Panna Mukta fields and Tapti Part A facilities. Accordingly, in the year 2019-20 the Company received SRF fund of USD 33.81 million (?

2,402.18 million) for Tapti Part-A facilities and USD 598.24 million (? 42,506.87 million) for Panna Mukta fields from JV partners (including the Company share of 40% in the fields) and acquired the corresponding decommissioning obligation with the conditions that Company will maintain separate dedicated SRF accounts under Site Restoration Fund scheme, 1999 and extent guidelines of SRF, the Company will not utilise the fund of dedicated SRF fund of Panna- Mukta Fields and Tapti Part-A facilities for any other purpose, other than one defined under SRF scheme/ guidelines. Company shall periodically carry out the reestimation of cost of decommissioning of Panna- Mukta Fields and Tapti Part-A facilities as per existing Company policy and contribute to SRF account as per Company policy in nomination fields. In case, final actual cost of decommissioning of facilities of Panna-Mukta fields at the time of physical decommissioning is higher than approved decommissioning cost plus the accumulated amount, Company will contribute the additional amount required for decommissioning. However, in case the actual cost at the time of decommissioning is less than the accumulated amount, the balance amount will be transferred to the Government of India. The Company is mandated to pay Rupee one per annum as rental charges to Government of India for use of Tapti A facilities till its abandonment.

5.3. Union Cabinet, Government of India in its meeting held on February 19, 2019, on reforms in Exploration and Licensing Policy for enhancing domestic exploration and production of oil and gas, directed to bid out identified marginal nomination fields operated by National Oil Companies. In pursuance to decision of Union Cabinet, the Company offered 64 such marginal fields which are clustered geographically in 17 Contract Areas(CA) for bidding under the supervision of Directorate General of Hydrocarbons. Currently 25 Fields awarded under PEC Bid Round-I in 2021-22 and PEC Bid Round-II in 202223, are being operated under PEC contracts. For PEC Bid Round-III , NIO has been issued on 26.11.2023 in which 46 Fields under 13 CAs are on offer. These 46 Fields include 39 Fields which were balance after Bid round I & II and additional 7 producing Fields. The impact of same on the financial statements for the year ended March 31,2024 is immaterial.

5.4. Cyclone Tauktae hit Arabian Sea off the coast of Mumbai in the early hours of May 17, 2021 where the company’s major production installations and drilling rigs are situated/operating. The cyclone has caused damages to offshore facilities/platforms. The occurrence of incident was intimated to the Insurance Company, under offshore insurance package policy and surveyors / Loss adjustors were appointed by them for the incident. PreEngineering and post engineering survey has been done by the loss adjuster on various occasion and the they have recommended the estimated claim amount of ' 8,255.00 million (USD 103 million) in their 4th Interim survey report

submitted on November 2022 for the expenditure incurred / likely to be incurred on restoration of damages caused by the cyclone. Based on the report the Company has received first on account payment of ' 1,314.54 million (USD 16 million; Gross USD 36 million less policy deductible of USD 20 million) on 27.03.2023. Based on the documents submitted and meeting with loss adjustor and insurance company, the Company has received a second on account payment of ' 1,660.00 million (USD 20 million) and same has been accouted for as miscellaneous receipts during the year (refer Note no 31 and Note no 6.2).

6.1. Ministry of Petroleum and Natural Gas, Government of India vide letter dated May 31, 2019 has assigned the Panna-Mukta fields w.e.f. December 22, 2019 on nomination basis to the Company on expiry of present PSC without any cost to ensure continuity of operation. Being a nonmonetary grant, the Company has recorded these assets and grant at a nominal value (refer Note No. 5.2).

6.2. Cyclone Tauktae hit Arabian Sea off the coast of Mumbai in the early hours of May 17, 2021 where the company’s major production installations and drilling rigs are situated/operating. The cyclone has caused damages to offshore facilities/platforms. The occurrence of incident was intimated to the Insurance Company, under offshore insurance package policy and surveyors / Loss adjustors were appointed by them for the incident. Pre-

Engineering and post engineering survey has been done by the loss adjuster on various occasion and the they have recommended the estimated claim amount of ' 8,255.00 million (USD 103 million) in their 4th Interim survey report submitted on November 2022 for the expenditure incurred / likely to be incurred on restoration of damages caused by the cyclone. Based on the report the Company has received first on account payment of ' 1,314.54 million (USD 16 million; Gross USD 36 million less policy deductible of USD 20 million) on 27.03.2023. Based on the documents submitted and meeting with loss adjustor and insurance company, the Company has received a second on account payment of ' 1,660.00 million (USD 20 million) and same has been accouted for as miscellaneous receipts during the year (refer Note no 31 and Note no 5.4)

10.3. The identification of suspended projects and the projects with cost overrun/time overrun with the estimated period of completion is done on the basis of estimates made by technical executives of the Company involved in the implementation of the projects.

10.4. During the year 2004-05, the Company had acquired, 90% Participating Interest in Exploration Block KG-DWN-98/2 from Cairn Energy India Limited for a lump sum consideration of ' 3,711.22 million which, together with subsequent exploratory drilling costs of wells had been capitalized under exploratory wells in progress. During 2012-13, the Company had acquired the remaining 10% participating interest in the block from Cairn Energy India Limited on actual past cost basis for a consideration of ' 2,124.44 million. Initial in-place reserves were established in this block and adhering to original PSC time lines, a declaration of commerciality (DOC) with a conceptual cluster development plan was submitted on December 21,2009 for Southern Discovery Area and on July 15, 2010 for Northern Discovery Area. Thereafter, revised DOC was submitted in December, 2013, Cluster-wise development of the Block had been envisaged by division of entire development area into three clusters.

The DOC in respect of Cluster II had been reviewed by the Management Committee (MC) of the block on September 25, 2014. Field Development Plan (FDP) for Cluster-II was submitted on September 8, 2015 which included cost of all exploratory wells drilled in the Contract Area and the same had been approved by the Company Board on March 28, 2016 and by MC on March 31,2016. Investment decision has been approved by the Company. Contracts for Subsea umbilical risers, flow lines, Subsea production system, Central processing platform - living quarter utility platform and Onshore Terminal have been awarded during 2018-19. Sixteen (16) Oil wells, Seven (7) Gas wells and Six (6) Water injector wells were drilled upto March 31, 2021. Towards early monetization, it was planned to produce Gas from U-field utilizing Vasishta and S1 Project facilities. One Gas well-U3B was completed in the month of March 2020 and test production commenced on March 5, 2020. In line with the Accounting Policy of the Company, Oil and Gas assets were created for the

well U3B on establishment of proved developed reserves during the year 2019-20. Commercial production from the well commenced on May 25, 2020. Well U1B and Well U1_A_Shft were completed and put to production on August 26, 2021 and April 28, 2022 respectively. On 07th January 2024, Oil production commenced from 4 oil wells namely PDMA, PDMB , PDMC and PDMG of M field of Cluster II . The cost of development wells in progress, Capital work in progress and Oil & gas assets as at March 31,2024 is ' 45,563.32 million (Previous year ' 56,147.21 million), '169,552.16 million (Previous year ' 142,392.36 million) and ' 80,614.38 million (Previous year ' 27,392.38 million) respectively under Cluster II. Considering the changes with respect to approved FDP the Company submitted the RFDP for Cluster-II development to DGH (Directorate General of hydrocarbons) on August 19, 2022 which is under review at DGH.

All the subsea installation works and pipe laying works related to Gas System except dependency on CPP topsides has been completed. The CPP topsides were installed using float over method on March 24, 2024. Preparations are in progress for installation of LQUP topsides and associated structures. Subsequently remaining gas wells of R & A fields will be hooked-up to start the production. Works are in progress to complete the remaining oil system facilities and is expected to be completed during FY2024-25.

Further, MC has approved the 4C-3D OBN seismic data acquisition, processing & interpretation in Cluster-II (for 500SKM) in Mining Lease area after expiry of Exploration period which started from 13.03.2024.

FDP in respect of Cluster-I was approved for development of Gas discoveries in E1 and integrated development of Oil discoveries in F1 field along with nominated fields of GS-29 area by the Management Committee in FY 201920. Considering the proximity of E-1 well with F-1, there will be cost saving for marine surveys, mobilisation of vessels, hiring of consultancy services and optimisation in subsea facilities by combining both the projects i.e.

(i) GS-29, DWN-F1 and (ii) DWN-E1. In view of above, it was decided to integrate both the projects to have time and cost advantage. The same was appraised to MC vide

letter dated 06th May 2022. Drilling of an Appraisal cum Development Well GS29_8_A was completed on April 30, 2021. Integrated development of DWN-E1 and DWN-F1 & GS-29 was appraised to ONGC Executive committee (EC). EC accorded in principle approval in its meeting held on 13.04.2022 for hiring of pre-project activities like Integrated Consultancy Services (i.e. Pre-FEED, FEED & PMC) ,Marine Surveys (Geophysical, Geotechnical and Met-ocean surveys),Consultancy services & TPI for Marine Surveys and EIARA Study. Hiring of Met Ocean Survey and Integrated Consultancy services have been awarded and work is under progress. Hiring of Geo technical Survey is expected to be completed by May 2024. The cost of development wells in progress as on March 31, 2024 is ' 885.56 million (Previous year ' 885.56 million).

In respect of Cluster III, the Company has submitted the FDP for UD-1 discovery of Cluster-III on August 1, 2022.

The FDP after examination, has been returned by DGH for re-submitting a robust FDP The Company proposes to formulate a robust FDP by incorporating the results of the proposed 4C-3D OBN seismic study (for 150SKM) for which approval from MC has been received and the data will be acquired in the upcoming field season. Further, the Company has requested Ministry of Petroleum & Natural Gas to extend the PEL timelines by 41 months i.e. upto January 1, 2026 in order to carry out 4C-3D OBN seismic data acquisition, processing & interpretation in the UD-1 discovery area. The extension has been approved vide letter dated 26.12.2023.

In view of the definite plan for development of all the clusters, the cost of exploratory wells in the block i.e. ' 25,969.21 million (Previous year ' 32,678.81 million) has been carried over.

11.1.1. The Company has elected to continue with the carrying value of its investments in subsidiaries, joint ventures and associates, measured as per the Previous GAAP and used that carrying value on the transition date April 1, 2015 in terms of Para D15 (b) (ii) of Ind AS 101 ‘First -time Adoption of Indian Accounting Standards’.

11.1.2. The Company is restrained from diluting the investment as per the covenants in loan agreement till the sponsored loan is fully repaid.

11.1.3. During the year, the Company has purchased additional 19,960 nos. (Previous year NIL) equity shares of Petronet MHB Ltd. (PMHBL), a subsidiary company having face value of ' 10 per share at ' 10.48 per share from IL&FS Financial Services Limited. Total investment in PMHBL as at March 31,2024 is ' 3,693.31 million (Previous year ' 3,693.10 million).

11.1.4. On ONGC Start-up Fund Trust (controlled entity) had been categorized as other investments fair valued through profit and loss (FVTPL) till the FY 2022-23. The same has been classified as investments in subsidiary as per Ind AS 110 from FY 2023-24 considering significant increase in the fair value of the underlying investments in start-up companies.

During the year, the Company has subscribed an additional 10,000,000 nos. (previous year 15,000,000 nos.) units of ONGC Start-up Fund Trust (registered with SEBI as an Alternative Investment Fund category I) for the total consideration of ' 100 million (previous year ' 150 million).

11.1.5. During the year, the Company has subscribed additional 24,360,000 nos. (Previous year 113,000,000 nos.) equity shares of Indradhanush Gas Grid Limited (IGGL), a Joint

Venture Company having face value of ' 10 per share at par value. Total investment in IGGL as at March 31,2024 is ' 2,223.60 million (Previous year ' 1,980.00 million).

On 27.02.2024, a wholly owned subsidiary ONGC Green Limited (OGL) was incorporated with authorised capital of ' 1,000 million divided into 100 million equity shares of ' 10 each and initial subscribed/ paid-up equity share capital of ' 10 million divided into 1 million equity shares of ' 10 each. OGL shall engage in the value chains of energy business including Renewable Energy (Solar, Wind, Hybrid, Hydel, Tidal and Geothermal etc.), Bio-fuels, Bio-Gas business, Green Hydrogen and

its derivatives like Green Ammonia, Green Methanol, Carbon Capture Utilisation and Storage and LNG business. On 12.04.2024, the Company has made the capital contribution of ' 10 million to OGL against 1 million equity shares of ' 10/- each.

11.1.7. During the FY 2022-23, the Company has received 668,607,628 nos of equity shares from Indian Oil Corporation Limited (IOCL) as bonus shares in the ratio of 1:2.

11.1.8. During the FY 2022-23, the Company has received 108,905,462 nos of equity shares from GAIL (India) Limited as bonus shares in the ratio of 1:2.

11.6.5. The Company entered into an arrangement for backstopping support towards repayment of principal and coupon of Compulsory Convertible Debentures (CCDs) amounting to ' 77,780.00 million (Previous year ' 77,780.00 million) issued by the Joint Venture ONGC Petro additions Limited (OPaL) in three tranches. The Company is continuing the same back stopping support. The outstanding interest accrued as at March 31,2024 is ' 2,212.45 million (Previous year ' 1,766.85 million). The first and third tranche of CCDs amounting to ' 56,150 million and ' 4,920 million has been further extended for a period of 6 months and are due for maturity in May 2024 and August 2024 respectively. The second tranche of CCD amounting to ' 16,710 million was due for put option in April, 2023. The same has been further extended by 18 months and put option exercise date will be October 18, 2024 and conversion date will be November 18, 2024.

Based on opinion of Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India, the Company has recognized a financial liability at fair value for backstopping support towards repayment of principal and a financial guarantee obligation towards coupon amount with a corresponding recognition of

Deemed Investment in OPaL.

The Deemed Investment amount of ' 62,402.66 million (As at March 31, 2023'62,393.68 million) includes, ' 62,308.05 million (As at March 31, 2023 ' 62,308.05 million) towards the fair value of Financial Liability against these CCDs and ' 94.61 million (As at March 31,2023 ' 85.63 million) towards the fair value of guarantee fee on financial guarantee given without any consideration for OPaL.

11.6.6. Company’s Joint Venture Indradhanush Gas Grid Limited (IGGL) had taken a loan sanction of ' 25,940 million from Oil Industry Development Board (OIDB) on August, 25 2021 for the purpose of implementation of North East Gas Grid Project guaranteed by the promoters of IGGL in proportion of these shareholdings. During the year loan of ' 5,600 million (previous year ' 1,000 million) has been taken by IGGL out of the sanctioned amount ' 25,940 million. As at March 31, 2024 IGGL has availed total loan of ' 6,600 million (As at March 31, 2023 ' 1,000 million). The Company has recognized a financial guarantee obligation in respect of its shareholding in IGGL with a corresponding recognition of Deemed Investment in IGGL of ' 50.50 million (As at March 31, 2023'7.68 million) for the above financial guarantee.

12.2 Generally, the Company enters into crude oil and gas sales arrangement with its customers. The normal credit period on sales of crude, gas and value added products is 7 -30 days. No interest is charged during this credit period. Thereafter, interest on delayed payments is charged at SBI Base rate / SBI MCLR plus 4% - 6.50% per annum compounded each quarter on the outstanding balance.

Out of the gross trade receivables as at March 31, 2024, an amount of ' 107,771.68 million (as at March 31, 2023 ' 91745.87 million) is due from Public sector Oil and Gas Marketing companies, the Company’s largest customers. There are no other customers who represent more than 5% of total balance of trade receivables.

12.3 Includes an amount of ' 3,764.43 million (Previous year ' 3,764.43 million) due towards Pipeline Transportation Charges for the period from November 20, 2008 to July 6, 2021 from GAIL India Limited (GAIL) on account of revised pipeline transportation tariff charges.

In terms of Gas Sales Agreement (GSA) signed between GAIL and the Company, GAIL is to pay transportation charges in addition to the price of gas in case of Uran Trombay Natural Gas Pipe Line (UTNGPL) and were being paid by GAIL. Subsequent to the replacement of pipeline in 2008, the revised pipeline transportation tariff in respect of UTNGPL was approved by Petroleum and Natural Gas Regulatory Board (PNGRB) for which debit notes /invoices was raised to GAIL with effect from November 20, 2008.

Mahanagar Gas Limited (MGL), one of the customers of GAIL, had filed a complaint with PNGRB on February 12, 2015 regarding applicability of tariff on supply of gas to GAIL. After hearing all parties, PNGRB vide order dated October 15, 2015 dismissed the complaint and gave a verdict in favour of the Company. Pursuant to appeal by MGL to the Appellate Tribunal for Electricity (APTEL), the case was remanded back to PNGRB. Once again, PNGRB vide order dated March 18, 2020 had dismissed the complaint, authorized the pipeline as a Common Carrier Pipeline and directed both GAIL and MGL to pay the transportation tariff fixed by PNGRB from time to time for UTNGPL. MGL again filed an appeal with APTEL on April 04, 2020 against the order of PNGRB. APTEL vide order dated July 16, 2021 remanded the matter to PNGRB for fresh adjudication and passing final order within 3 months

from the date of appointment of Member (Legal). PNGRB vide order dated September 30, 2022, directed MGL to pay the transportation charges as per the transportation tariff fixed by PNGRB for UTNGPL vide Tariff Order dated December 30, 2013 for the period from January 1, 2014 onwards within a period of 2 months of passing the order. However PNGRB rejected the transportation charges from November 20, 2008 to December 31, 2013. MGL filed a writ petition before the Hon’ble High Court of Delhi challenging the PNGRB’s order dated September 30, 2022. The Hon'ble High Court of Delhi, vide order dated December 13, 2022 stayed the recovery against the PNGRB order and directed MGL to deposit a sum of ' 500 million with GAIL. Although the Company has filed appeal against the order of PNGRB before APTEL, the same has been granted stay by APTEL due to the order of Hon’ble Supreme Court wherein stay has been granted for all cases / proceedings relating to GAIL (India) Limited before APTEL. Pending final decision in the matter the Company has made a provision of ' 745.50 million during FY 202223 towards the transportation charges receivable for the period from November 20, 2008 to December 31,2013.

Rashtriya Chemicals and Fertilisers Ltd (RCF), another customer of GAIL, was paying revised tariff since February 2016 and the tariff from November 20, 2008 till January 31, 2016 was under dispute. The matter was referred to Committee of Secretaries under Administrative Mechanism for Resolution of CPSEs Disputes (AMRCD) that met on June 17, 2021 and concluded that RCF would pay the transportation charges with effect from the date of order (i.e. December 30, 2013) of revised tariff rates of PNGRB. Accordingly during the year 2021-22 an amount of ' 196.52 million was received pertaining to the period December 30, 2013 to January 31, 2016. The Company has requested clarification from the MoP&NG regarding the impact of AMRCD order on its receivable from GAIL. However, in view of the conclusion of AMRCD, a provision of ' 446.43 million has been created against dues from GAIL on account of Pipeline Transportation Charges in respect of RCF for the period prior to December 30, 2013.

The Company has been raising invoices on GAIL towards Pipeline Transportation Charges during the period from November 2008 to March 2024 amounting to ' 9,357.19 million (Previous year ' 8,717.60 million), out

of this an amount of ' 5,569.21 million (Previous year ' 4,893.35 million) has since been received.

In view of the above, the balance receivable (excluding provision) of ' 2,596.05 million as at March 31, 2024 (Previous year ' 2,632.32 million) is considered good.

12.4 Includes an amount of ' 1,364.61 million receivable from IOCL towards sale of crude oil from western offshore region during the month of March’2023 to Oct’2023. Sale of crude oil from Western offshore to IOCL has been effected on provisional basis pending finalisation of Crude Oil Sales Agreements (COSA) with the IOCL. The Company has raised invoices for sale of crude oil at benchmark

prices as applicable for the period from October’2022 to February’2023. Pending finalisation of COSA’s, IOCL have released payments for the month of March’2023 to Oct’2023 as per pricing formula benchmark applicable till September’2022 resulting into an amount of ' 1,364.61 million receivable from IOCL as on March 31, 2024. The discussions with IOCL for finalization of pricing terms for supply of crude oil from western offshore applicable for March’2023 to Oct’2023 are in process and it is expected to be finalized soon. In view of this, the aforesaid amount of ' 1,364.61 million receivable towards sale of crude oil from western offshore region for the month of March’2023 to Oct’2023 is considered good. (Refer note no. 30.1)

21.1. Includes forfeited shares of ' 0.15 million and assessed value of assets received as gift.

21.2. Capital Redemption Reserve created as per Companies Act’ 2013 against buy back of its own shares during FY 2018-19.

21.3. The Company has elected to recognise changes in the fair value of certain investments in equity securities through other comprehensive income. This reserve represents the cumulative gains and losses arising on revaluation of equity instruments measured at fair value through other comprehensive income. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are disposed off.

21.4. General Reserve is used from time to time to transfer profits from retained earnings for appropriation purposes, as the same is created by transfer from one component of equity to another.

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

and the dividend distribution policy of the Company.

On November 10, 2023 and February 10, 2024, the Company had declared an interim dividend of ' 5.75 per share (115%) and ' 4.00 per share (80%) respectively which has since been paid.

In respect of the year ended March 31, 2024, the Board of Directors has proposed a final dividend of ' 2.50 per share (50%) be paid on fully paid-up equity shares. This final dividend shall be subject to approval by shareholders at the ensuing Annual General Meeting and has not been included as a liability in these financial statements. The proposed equity dividend is payable to all holders of fully paid equity shares. The total estimated equity dividend to be paid is ' 31,450.70 million.

21.6. During the 2020-21, 18,972 equity shares of ' 10 each (equivalent to 37,944 equity shares of ' 5 each) which were forfeited in the year 2006-07 were cancelled w.e.f. November 13, 2020 and accordingly the partly paid up amount of ' 0.15 million against these shares were transferred to the Capital Reserve in 2020-21.

42. Employee benefit plans

All the employee benefit plans of the Company are run as Group administration plans (Single Employer Scheme) including employees of the Company seconded to ONGC Videsh Limited (OVL) 100% subsidiary, as well as employees directly appointed by OVL.

Further, the Company accounts for the employee benefit liability of all Defined Benefit plans pertaining to OVL employees in its books of account and expenditure for the period is transferred to OVL’s books of account. This is done in compliance with the requirement for group administrative plan stated in para 38 of Ind AS 19 ‘Employee Benefits’.

42.1 Defined Contribution plans:

42.1.1 Post Retirement Benefit Scheme (PRBS)

The defined contribution pension scheme of the Company for its employees is administered through a separate trust. The obligation of the Company is to contribute to the trust to the extent of amount not exceeding 30% of basic pay and dearness allowance as reduced by the employer’s contribution towards provident fund, gratuity, post-retirement medical Benefit (PRMB) or any other retirement benefits.

The Board of Trustees of the Trust functions in accordance with any applicable guidelines or directions that may be issued in this behalf from time to time by the Central Government. The Board of trustees have the following responsibilities:

(i) Investments of the surplus as per the pattern notified by the Government in this regard so as to meet the requirements of the fund from time to time.

(ii) Fixation of rate of contribution and interest thereon

(iii) Purchase of annuities for the members.

42.1.2 National Pension Scheme (NPS)

The Company had introduced NPS for its employees during the financial year 2020-21 within the overall limit of Post Retirement Benefit Scheme. An employee has the option to determine the contribution to be made in PRBS and NPS.

The obligation of the Company is to contribute to NPS at the option of employee to the extent of amount not exceeding 30% of basic pay and dearness allowance as reduced by the employer’s contribution towards provident fund, gratuity, post-retirement medical Benefit (PRMB or any other retirement benefits. An employee can opt for a maximum of up to 10% of its Basic Salary

and DA as employer’s contribution towards NPS. All other standard provisions of NPS applies to the scheme.

42.1.3 Employee Pension Scheme 1995

The Employee Pension Scheme -1995 is administered by Employees Provident Fund Organization of India, wherein the Company has to contribute 8.33% of salary (subject to maximum of ' 15,000 per month) out of the employer’s contribution to Provident Fund.

42.1.4 Composite Social Security Scheme (CSSS)

The Composite Social Security Scheme is formulated by the Company for the welfare of its regular employees and it is administered through a separate Trust, named as Composite Social Security Scheme Trust. The obligation of the Company is to provide matching contribution to the Trust to the extent of contribution of the regular employees of the Company. The Trust provides an assured lump sum support amount in the event of death or permanent total disablement of an employee

while in service. In case of Separation other than Death/ Permanent total disability, employees own contribution along with interest is refunded.

The Board of Trustees of the Trust functions in accordance with Trust deed, Rule, Scheme and applicable guidelines or directions that may be issued by Management from time to time.

The Board of Trustees has the following responsibilities:

(i) Investments of the surplus as per the pattern notified by the Government in this regard so as to meet the requirements of the fund from time to time.

(ii) Fixation of rate of interest to be credited to members’ accounts.

(iii) To provide cash benefits to the nominees in the event of death of an employee or Permanent Total Disablement leading to the cessation from service and refund of own contribution along with interest in case of separation other than death.

42.2.2 Provident Fund

The Company pays fixed contribution to provident fund at predetermined rates to a separate trust, which invests the funds in permitted securities. The obligation of the Company is to make such fixed contribution and to ensure a minimum rate of return to the members as specified by Government of India (Gol). As per report of the consulting actuary, overall interest earnings and cumulative surplus is more than the statutory interest payment requirement. Hence, no further provision is considered necessary. The details of fair value of plan assets and obligations are as under:

Provident Fund is governed through a separate trust. The Board of Trustees of the Trust functions in accordance with any applicable guidelines or directions that may be issued in this behalf from time to time by the Central Government or the Central Provident Fund Commissioner. The board of trustees have the following responsibilities:

(i) Investments of the surplus as per the pattern notified by the Government in this regard so as to meet the requirements of the fund from time to time.

(ii) Raising of moneys as may be required for the purposes of the fund by sale, hypothecation or pledge of the investment wholly or partially.

(iii) Fixation of rate of interest to be credited to members’ accounts.

42.2.3 Gratuity

Gratuity is payable for 15 days salary for each completed year of service. Vesting period is 5 years and the payment is restricted to ' 2 million on superannuation, resignation, termination, disablement or on death.

Scheme is funded through own Gratuity Trust. The liability for gratuity is recognized on the basis of actuarial valuation.

42.2.4 Post-Retirement Medical Benefits

The Company has Post-Retirement Medical benefit (PRMB), under which the retired employees, their spouses and dependent parents are provided medical

facilities in the Company hospitals / empaneled hospitals. They can also avail treatment as out-patient. During the year, Company has given an option to retired employees to include their dependent parents in Company’s PRMB scheme. The liability for the same is recognized annually on the basis of actuarial valuation. Full medical benefits on voluntary retirement are available subject to the completion of minimum 20 years of service and 50 years of age.

An employee should have put in a minimum of 15 years of service rendered in continuity in the Company at the time of superannuation to be eligible for availing post-retirement medical facilities. However, as per DPE guidelines dated August 03, 2017, the Post-Retirement Medical Benefits is allowed to Board Level executives (without any linkage to 15 years of service) upon completion of their tenure or upon attaining the age of retirement, whichever is earlier.

Scheme is funded through own PRMB Trust. The liability for PRMB is recognized on the basis of actuarial valuation.

42.2.5 Terminal Benefits

At the time of superannuation, employees are entitled to settle at a place of their choice and they are eligible for Settlement Allowance.

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

42.2.7 No other post - retirement benefits are provided to these employees.

In respect of the above plans, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at March 31,2024 by a member firm of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

42.2.8 Other long term employee benefits

(i) Earned Leave (EL) Benefit

Accrual - 30 days per year

Encashment while in service - 75% of Earned Leave balance subject to a maximum of 90 days per calendar year

Encashment on retirement - Maximum 300 days

Scheme is funded through Life Insurance Corporation of India (LIC).

Each employee is entitled to get 15 earned leaves for each completed half year of service. All regular employees of the Company while in service are allowed encashment of Earned Leave once in a calendar year, to the extent of 75% of the Earned Leave at their credit, subject to maximum of 90 days.

In addition, each employee is entitled to get 10 HPL(Half Pay Leave) at the end of every six months. The entire accumulation is permitted for encashment only at the time of retirement. Department of Public Enterprise had clarified earlier that sick leave cannot be encashed, though Earned Leave (EL) and Half Pay Leave (HPL) could be considered for encashment on retirement subject to the overall limit of 300 days. Consequently, Ministry of Petroleum and Natural Gas (MoP&NG), GOI had advised the Company to comply with the DPE Guidelines. Subsequently, the matter has been dealt in 3rd Pay Revision Committee recommendations, which is effective January 1, 2017 and Central Public Sector Enterprises have been allowed to frame their own leave rules considering operational necessities and subject to conditions set therein. Therefore, the requisite conditions are met by the Company.

(ii) Good Health Reward (HPL)

Accrual - 20 days per year

Encashment while in service - Nil

Encashment on retirement - 50% of Half Pay Leave balance.

Scheme is funded through Life Insurance Corporation of India (LIC).

The liability for the same is recognized annually on the basis of actuarial valuation.

45. Financial instruments Disclosure

45.1. Capital Management

The Company’s objective when managing capital is to:

• Safeguard its ability to continue as going concern

so that the Company is able to provide maximum return to stakeholders and benefits for other stakeholders; and

• Maintain an optimal capital structure to reduce the

cost of capital.

The Company maintains its financial framework to support the pursuit of value growth for shareholders, while ensuring a secure financial base. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends to shareholders,

return capital to shareholders, issue new shares or sell assets to reduce debt.

The capital structure of the Company consists of total equity (refer Note No. 20 & 21). The Company is not subject to any externally imposed capital requirements.

The management of the Company reviews the capital structure on a regular basis. As part of this review, the committee considers the cost of capital, risks associated with each class of capital requirements and maintenance of adequate liquidity.

45.1.1. Gearing Ratio

The Company has outstanding current and non-current borrowings / debt. Accordingly, the gearing ratio is worked out as followed:

ONGC Start up fund trust (controlled entity) has been categorized as other investments fair valued through profit and loss (FVTPL) till the FY 2022-23. The same has been classified as investments in subsidiary as per Ind AS 110 from FY 2023-24 considering significant increase in the fair value of the underlying investments in start-up companies.

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity (ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.”

45.3. Financial risk management objectives

While ensuring liquidity is sufficient to meet Company’s operational requirements, the Company also monitors and manages key financial risks relating to the operations of the Company by analyzing exposures by degree and magnitude of risks. These risks include credit risk, liquidity risk and market risk (including currency risk and price risk).

During the year, the liquidity position of the Company was comfortable. The lines of Credit/short term loan available with various banks for meeting the short term working capital/ deficit requirements were sufficient for meeting the fund requirements. The Company has also an overall limit of ' 100,000 million for raising funds through Commercial Paper. Cash flow/ liquidity position is reviewed on continuous basis.

45.4. Credit risk management

Credit risk arises from cash and cash equivalents, investments carried at amortized cost and deposits with banks as well as customers including receivables.

Credit risk management considers available reasonable and supportive forward-looking information including indicators like external credit rating (as far as available), macro-economic information (such as regulatory changes, government directives, market interest rate).

Major customers, being public sector oil marketing companies (OMCs) and gas companies having highest credit ratings, carry negligible credit risk. Concentration of credit risk to any other counterparty did not exceed 2.35% (Previous year 5.00%) of total monetary assets at any time during the year.

Credit exposure is managed by counterparty limits for investment of surplus funds which is reviewed by the Management. Investments in liquid plan/schemes are with public sector Asset Management Companies having highest rating. For banks, only high rated banks are considered for placement of deposits. Bank balances are held with reputed and creditworthy banking institutions.

The Company is exposed to default risk in relation to financial guarantees given to banks / vendors on behalf

of subsidiaries / joint venture companies for the estimated amount that would be payable to the third party for assuming the obligation. The Company’s maximum exposure in this regard on as at March 31, 2024 is ' 426,266.10 million (As at March 31, 2023 ' 401,168.34 million).

In accordance with Ind AS 109- Financial Instruments, the Company uses the expected credit loss (“ECL") model for measurement and recognition of impairment loss on its trade receivables and other financial assets.

For the purpose of computing expected credit loss, the Company follows rating-based approach to compute default rates based on Credit ratings of the borrowers and forward-looking estimates are incorporated using relevant macroeconomic indicators. A default occurs when in the view of management there is no significant possibility of recovery of receivables after considering all available options for recovery.

The movement in the loss allowance for impairment of financial assets at amortized cost during the year was as follows:

45.5. Liquidity risk management

The Company manages liquidity risk by maintaining sufficient cash and cash equivalents including bank deposits and availability of funding through an adequate amount of committed credit facilities to meet the obligations when due. Management monitors rolling forecasts of liquidity position and cash and cash equivalents on the basis of expected cash flows. In addition, liquidity management also involves projecting cash flows considering level of liquid assets necessary to meet obligations by matching the maturity profiles of financial assets & liabilities and monitoring balance sheet liquidity ratios.

b) Forward foreign exchange contracts

During the year, the Company has not entered into any forward foreign exchange contracts.

45.6.1.2. Interest rate risk management

The Company is exposed to interest rate risk because the Company has borrowed funds benchmarked to overnight MCLR, Treasury Bills, debt (capital) market, RBI Repo. The Company’s exposure to interest rates are detailed in Note No. 27.

The Company invests the surplus fund generated from operations in term deposits with banks and mutual funds. Bank deposits are generally made for a period of upto 12 months and carry interest rate as per prevailing market interest rate. Considering these bank deposits are short term in nature, there is no significant interest rate risk. Average interest earned on term deposit and a mutual fund for the year ended March 31, 2024 was 7.67% p.a. (Previous year 5.98% p.a.).

The Company’s fixed rate instruments are carried at amortized cost. They are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Cash flow sensitivity analysis for variable-rate instruments

The Sensitivity of finance cost to change in ( /-) 50 basis point in average interest rate is presented as under:

45.6.1.3. Price risks

The Company’s price risk arises from investments in equity shares (other than investment in group companies) held and classified in the balance sheet either at fair value through other comprehensive income (FVTOCI) or at fair value through profit or loss (FVTPL).

Investment of short-term surplus funds of the Company in liquid schemes of mutual funds provides high level of liquidity from a portfolio of money market securities and high quality debt and categorized as ‘low risk’ product from liquidity and interest rate risk perspectives.

The revenue from operations of the Company are also subject to price risk on account of change in prices of Crude Oil, Natural Gas & Value Added Products.

a. Price sensitivity analysis

The sensitivity of profit or loss in respect of investments in equity shares at the end of the reporting period for /-5% change in price and net asset value is presented below:

Other comprehensive income for the year ended March 31, 2024 would increase / decrease by ' 19,783.29 million (for the year ended March 31, 2023 would increase / decrease by ' 9,532.24 million) as a result of 5% changes in fair value of equity investments measured at FVTOCI.

The Sensitivity of Revenue from operation (net of levies) to change in ( /-) 1 USD in prices of Crude Oil, Natural Gas & Value Added Products (VAP)

48.2 Commitments

48.2.1 Capital Commitments:

Estimated amount of contracts remaining to be

executed on capital account:-

i) In respect of Company: ' 199,970.49 million (Previous year ' 115,409.12 million).

ii) In respect of Joint Operations: ' 60,159.64 million (Previous year ' 39,542.56 million).

48.2.2 Other Commitments

(i) Estimated amount of Minimum Work Programme

(MWP) committed under various ‘Production Sharing Contracts’ and ‘Revenue Sharing Contracts’ with Government of India/Nominated Blocks:

a) In respect of NELP/OALP/DSF blocks in which the Company has 100% participating interest: ' 130,942.19 million (Previous year ' 116,310.45 million).

b) In respect of NELP/OALP/DSF blocks in Joint Operations, Company’s share: ' 2,453.93 million (Previous year ' 11,049.98 million).

(ii) In respect of ONGC Petro additions Limited, (OPaL) a Joint Venture Company ' 862.81 million (Previous year ' 862.81 million) on account of subscription of Share Warrants with a condition to convert it to shares after a balance payment of ' 0.25 per share.

(iii) The Company entered into an arrangement for backstopping support towards repayment of principal and coupon of Compulsory Convertible Debentures (CCDs) amounting to ' 77,780.00 million (Previous year ' 77,780.00 million) issued by ONGC Petro additions Limited in three tranches. The Company is continuing the back stopping support and the outstanding interest accrued as at March 31, 2024 is ' 2,212.45 million (Previous year ' 1,766.85 million).

(iv) As per the directions of the Ministry of Environment, Forest and Climate Change, Government of India, the Company is required to carry out certain activities under the Corporate Environment Responsibility, which include infrastructure creation for drinking water supply, sanitation, health, education, skill development, roads, cross drains, electrification, including solar power, solid waste management facilities, scientific support and awareness to local farmers to increase yield of crop and fodder, rain water harvesting, soil moisture conservation works, avenue plantation, plantation in community areas etc. The commitments towards these activities are worked out on the public hearing conducted, social need assessment etc. for grant of environment clearance for development or commissioning of Green Field and Brown field project of the Company. The Company has outstanding commitments towards the aforesaid activities amounting to ' 2,359.48 million as on March 31,2024 (? 2,075.97 million as on March 31,2023), the Company is required to spend the committed amount towards the aforesaid activities during a period of ten years from the date of grant of Environment Clearances as Validity of EC is for ten years and further extendable by one year.

Formula used for computation of:

a. Current Ratio = Current assets / Current liabilities.

b. Debt Equity Ratio = Total borrowings / Total equity.

c. Debt Service Coverage Ratio = Earnings before interest, tax and exceptional item / [Interest on borrowings (net of transfer to expenditure during construction) Principal repayments of Long Term borrowings].

d. Return on Equity ratio = Profit for the year / Average Total equity.

e. Inventory turnover = Revenue from operations / Average inventories.

f. Trade receivable turnover = Revenue from operations / Average trade receivables.

g. Trade payable turnover = Revenue from operations / Average trade payables.

h. Net capital turnover ratio = Revenue from operations / Working Capital.

i. Net Profit Margin (%) = Profit for the period / Revenue from operations.

j. Return on Capital employed = Profit Before Interest, Dividend Income & Tax (PBIT excluding Dividend income) / Capital Employed.

k. Return on investment = (Closing balance Interest Dividend - Opening balance /- cash flow during the period)/Average investment.

53.1 Additional Regulatory Information/disclosures as required by General Instructions to Division II of Schedule III to the Companies Act, 2013 are furnished to the extent applicable to the Company.

53.2 Certain improvements / changes have been made in the wordings of some of the Significant Accounting Policies for improved disclosures, understandability and clarity. However, such changes have no impact on the Standalone Ind AS financial statements.

54. Disclosure as per Ind AS 8 - ‘Accounting Policies, Change in Accounting Estimates and Errors’ and Ind AS 1 ‘Presentation of Financial Statements’.

54.1 In accordance with Ind AS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’ and Ind AS 1 ‘Presentation of Financial Statements’, the Company has retrospectively restated its Balance Sheet as at March 31, 2023 and April 1,2022 (beginning of the preceding period) and Statement of Profit and Loss for the year ended March 31,2023 for the reasons as stated below:

The company has been undertaking Ocean Bottom Node (OBN) Seismic Survey in some of the development / developed areas in the offshore fields with the objective of increasing production. The cost incurred during the period from April 01, 2018 to December 31, 2023 in respect of the same was charged off to revenue in the respective periods. As the OBN survey activity is carried out in the development / developed areas in the offshore with the objective of increasing production and better reservoir management, the expenditure is not in the nature of exploration and evaluation. Accordingly, the Company during the quarter and year ended March 31, 2024 has made the necessary corrections and capitalised these costs under Intangible Oil and Gas assets in progress. On conclusion of survey (API) activities wherever applicable, the said expenditure has been transferred to Intangible Oil and Gas Assets and has been depleted based on unit of production method.

The aforesaid adjustments related to Ocean Bottom Node (OBN) Seismic Survey have been accounted retrospectively as per the requirements of Ind AS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’.

55. During the current financial year, on the basis of EAC opinion issued by the Institute of Chartered Accountants of India, the company has changed its accounting policy on inventorization of scrap material generated out of stores & spares and discarded PPE. Considering the impact being immaterial in applying the change in accounting policy prior to financial year 2023-24, the company has considered the said changes from the beginning of the current financial year. Consequent to this opening stock of scrap material amounting to ' 266.47 million has now been adjusted against Other Income. The above changes resulted in reduction in profit before tax for FY 2023-24 by ' 266.47 million.The Company has a system of physical verification of Inventory, Property, Plant & Equipment and Capital Stores in a phased manner to cover all items over

a period of three year adjustment differences, if any, are carried out on completion of reconciliation.

56. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

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

58. Previous year’s figures have been regrouped, wherever necessary, to confirm to current year’s grouping.

59. Approval of financial statements

The Standalone Financial Statements were approved by the Board of Directors on May 20, 2024.

FOR AND ON BEHALF OF THE BOARD

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

(Rajni Kant) (K C Ramesh) (Manish Patil) (Arun Kumar Singh)

Company Secretary Chief Financial Officer Director (HR) Chairman & CEO

(DIN: 10139350) (DIN: 06646894)

In terms of our report of even date attached

For J Gupta & Co. LLP For Manubhai & Shah LLP For V Sankar Aiyar & Co.

Chartered Accountants Chartered Accountants Chartered Accountants

Firm Reg. No. 314010E/E300029 Firm Reg. No: 106041W/W100136 Firm Reg. No.109208W

Sd- Sd- Sd-

(CA Nancy Gupta) (CA K. B. Solanki) (CA G Sankar)

Partner (M. No. 067953) Partner (M. No. 110299) Partner (M. No. 046050)

For Laxmi Tripti & Associates For Talati & Talati LLP

Chartered Accountants Chartered Accountants

Firm Reg. No. 009189C Firm Reg. No. 110758W/W100377

Sd- Sd-

(CA (Dr.) Vivek Mehta) (CA Amit Shah)

Partner (M. No. 415118) Partner (M. No. 122131)

Place: New Delhi Date : 20 May 2024