Manual-formatted

INDEX PAGE NO CHAPTER NAME AND HEADINGS 1. Main Accounts 2. Fixed Assets 2A. Property, Plant and Equipment 2B. Physical Verification of Assets 2C. Intangible Assets 2D. Impairment of Assets 3. Leases 4. Financial Concurrence 5. Works Accounting 6. Accounting of Purchases 7. Inventories 8. Accounting of Employee Benefits 9. Accounting of Employee Related Transactions 9A. Payroll 9B. Other Employee Related Transactions 9C. Valuation of Employee/Advances as per IND AS 10. Borrowings 11. Banking Operations 12. Investments 13. Purchase of Crude Oil & Products 13A. Import of Crude Oil 13B. Indigenous Crude 13C. Functions of Finance in Shipping Department 13D. Purchase of Products 14. Insurance Operations 15. Crude Oil / Product Accounting 15A. Oil Accounting at Refineries 15B. Product Accounting Inc. Raw Material for Lubes at Marketing 16. Excise, VAT & GST 17. Cost Audit 18. Trade Receivables 19. Financial Instruments 20. Equity 21. Revenue 22. Notes to Accounts 22A. Provisions, Contingent Liabilities and Contingent Assets 22B. Segment Reporting 22C. Fair Value Disclosures 22D. Financial Risk Disclosures 22E. Related Party Transactions 22F. Exploration & Production 23. Income Taxes 24. Consolidated Financial Statements 25. PACE 25A. Preparation of Standalone/ Consolidated Financial Statements, Disclosures, Financial Review and Other Mis Through Pace 25B. Preparation of Financial Statements 25C. Revenue Budget 25D. FINANCIAL REVIEW/ APPRAISAL 26. Appendix 26A. Significant Accounting Policies 26B. Guidelines for Use of Discount Rates 26C. Hurdle Rates 26D. Chapter Owners and Major Contributors

TABLE OF CONTENTS PAGE NO 1. MAIN ACCOUNTS 1.1 System of Accounting 1.2 Capital and Revenue Expenditure 1.3 Accounting of Financial Transactions 1.4 Issue of Debit/ Credit Notes 1.5 Quarterly/ Annual Accounts 1.6 Government Grants 1.7 Financial Statements as Per Schedule III 1.8 IND-AS-21- New Appendix for Date of Transaction in Case of FC Transaction 1.9 Government Audit Coordination 1.10 Internal Audit Coordination Annexure – 1.1 List of document types, CCA, Accounts types, Vendor types and special G/L indicators Annexure – 1.2 List of debit/credit notes Annexure – 1.3 Materiality Thresholds Annexure – 1.4 Guidance on Specific Topic and Disclosures 2. FIXED ASSETS 2A PROPERTY, PLANT AND EQUIPMENT 2.1 Background 2B 2.2 References to Authoritative Literature 2C 2.3 Recognition and Measurement of Property, Plant and Equipment 2D 2.4 Depreciation Provisions (Measurement After Recognition) 2.5 De-Recognition of Assets 2.6 Asset Retirement Obligation 2.7 Non-Current Assets Held for Sale 2.8 Jointly Owned Fixed Assets 2.9 Disclosures PHYSICAL VERIFICATION OF ASSETS 2.10 Physical Verification INTANGIBLE ASSETS 2.11 Background 2.12 Definition and Recognition 2.13 Specific Guidelines 2.14 Disclosures IMPAIRMENT OF ASSETS 2.15 Provision of Ind-As 36 (Impairment of Assets) in Brief 2.16 Testing of Impairment In IOCL 2.17 Identification of Cash Generating Unit (CGU) and Procedure to be Followed 2.18 Modalities to be Followed 2.19 Special Points to be Considered While Testing the Assets for Impairment Annexure – 2.1 lOCL Practices and Procedures Annexure – 2.2 Useful Lives Annexure – 2.3 Componentization Guidelines 3. LEASES 3.1 Background 3.2 Scope 3.3 Important Definitions 3.4 IND-AS 116- Important Provisions 3.5 Classification of Leases 3.6 Accounting in the Books of Lessee 3.7 Accounting in the Books of Lessor 3.8 Lease Modification – Lessee

3.9 Guidance Provided on Issues Raised by Divisions 3.10 Presentation and Disclosures 3.11 Transition and Closing Instructions Annexure – 3.1 List of T-Code and SAP Procedures Script Code 4. FINANCIAL CONCURRENCE 4.1 Introduction 4.2 Guidelines on Financial Concurrence 4.3 CVC Guidelines 4.4 Circulars Issued by Divisional Finance 5. WORKS ACCOUNTING 5.1 General Outline Of Project & Work Function 5.2 Functions 5.3 Receipt and Release of EMD 5.4 Advance Payment to Contractor 5.5 Payment to Contractor 5.6 Cost of Borrowed Fund/ FE Variation for Project 5.7 Bank Guarantees 5.8 Project Expenditure Report 5.9 Delays in Contractual Completion/ Mechanical Completion 5.10 Post Award Concurrence 5.11 SAP Accounting Annexure – 5.1 List of T-code and SAP Procedures Script Code 6. ACCOUNTING OF PURCHASES 6.1 General Outline of Purchase Function 6.2 Functions 6.3 Deposits and Advance Payments to Suppliers 6.4 Passing of Bills for Supplies Received 6.5 Delay in Delivery 6.6 Arrangement for Insurance of Transit Risk 6.7 Bank Guarantees 6.8 Centralised Procurement Cell (CPC) 6.9 Closure of Open Purchase Order 6.10 SAP Accounting 7. INVENTORIES 7.1 Provision of Ind-AS 2 (Inventories) in Brief 7.2 Types of Inventories 7.3 Accounting Policy on Valuation of Inventories 7.4 Valuation of Inventories 7.5 Stock In Process Annexure – 7.1 Classification and Valuation of Inventories Annexure – 7.2 Applicable Principles for Consideration of Expenditure/ Income for the Purpose of Inventory Valuation 8. ACCOUNTING OF EMPLOYEE BENEFITS 8.1 Introduction 8.2 Recognition and Measurement of Employee Benefits 8.3 Disclosures 8.4 Requirement Related to Disclosures to Annual Accounts in Note–35 8.5 Other Welfare Schemes Annexure 8.1 Accounting Procedures – SABF, PF, PRMB, Leave Encashment 9. ACCOUNTING OF EMPLOYEE RELATED TRANSACTIONS 9A PAYROLL

9.1 General Outline for Pay Roll Function 9.2 Employee Self Service Portal (ESS Portal) 9.3 Info Type/ Wage Type/ GL Codes 9.4 Role of HR & Administration Department 9.5 Monthly Processing of Salary 9.6 Off-Cycle Payments 9.7 Bonus Payment 9.8 Arrear Payment 9.9 Deputation In/ Out Employees 9.10 Final Settlement of Separated Employees 9.11 Payment of Statutory & Other Liabilities 9.12 Closing Related Activities - Quarterly & Annual 9.13 Preparation of MIS 9.14 Other Payments 9.15 Control Checks 9B OTHER EMPLOYEE RELATED TRANSACTIONS 9.16 Reimbursement of Medical Expenses 9.17 Post-Retirement Medical Benefit Facility (PRMS) 9.18 Travelling Claims and Payments 9C VALUATION OF EMPLOYEE/ADVANCES AS PER IND AS 9.19 Overview 9.20 Applicability 9.21 Definitions 9.22 Accounting Treatment under Ind-AS 9.23 Initial Measurement 9.24 Subsequent Measurement 9.25 Accounting Entries 9.26 Ind AS Fair Valuation Program 10. BORROWINGS 10.1 Introduction 10.2 Definitions 10.3 Classification of Borrowings 10.4 Refineries Practices- Cash Budget – Preparation & Management 11. BANKING OPERATIONS 11.1 Opening of a New Bank Account 11.2 E-Payments 11.3 Receipts and Payments Through Cheques and Bank Drafts 11.4 Stale Cheques 11.5 Instruments Other Than E-Banking/ Cheques Like LOA Etc. 11.6 Bank Reconciliation 11.7 Safe Custody of Valuables, Documents and Vouchers 11.8 Transactions Pertaining to Alternate Bank (HDFC Bank) 11.9 EMD Account 11.10 Payments to Foreign Vendors Under Service Contracts 11.11 Investments 11.12 Getting Bank Guarantee Issued for Submission in Various IOCL Bids. 11.13 Cash & Bank Balances Annexure – 11.1 Procedure for Centralised E –Payments 12. INVESTMENTS 12.1 Applicable Guidance 12.2 Presentation and Disclosures 12.3 Pace Reports and Inputs 13. PURCHASE OF CRUDE OIL & PRODUCTS

13A IMPORT OF CRUDE OIL 13.1 Introduction 13.2 Crude Oil Procurement 13.3 Letter of Credit for Crude Imports 13.4 Crude Oil (FOB / CIF) Payment Cycle 13.5 Flow of Documents 13.6 Payments Thru Loan Availments (Buyers’ Credit) & IDPMS System 13.7 Payments Thru Currency Purchases 13.8 Accounting Entries for FOB/CIF Payments 13.9 Accounting Entries for High Sea Sales 13.10 Accounting Entries for High Sea Purchase 13.11 Accounting for Forward Currency Purchase on Crude 13.12 Demurrage Payment Cycle 13.13 Flow of Documents for Demurrage Payments 13.14 Accounting Entries for Demurrage 13.15 Freight 13.16 Chartering 13.17 Voyage Chartering 13.19 Port Charges 13.20 Port Disbursement Advance (PDA) 13.21 Survey Fees 13.22 Settlement With CPCL 13.23 Bank Reconciliation 13.24 Bill of Entries (B/E) 13.25 TDS (Deposit) 13.26 GST 13.27 Commodity Hedging 13B INDIGENOUS CRUDE 13.28 Indigenous Crude 13C FUNCTIONS OF FINANCE IN SHIPPING DEPARTMENT 13.29 Introduction 13.30 Objective of Shipping Department 13.31 Functions of Shipping Department 13.32 Finance Function 13.33 Chartering Function 13D PURCHASE OF PRODUCTS 13.34 Interstate Purchase Process 14. INSURANCE OPERATIONS 14.1 General Outlines of Insurance 14.2 Insurance Covers 14.3 Marine, Storage Cum Erection All Risk (EAR) Cover For Projects 14.4 Package Insurance Policy 14.5 Terrorism Insurance Policy 14.6 Marine Insurance 14.7 Insurance for Vehicles 14.8 Public Liability Insurance 14.9 Miscellaneous Assets Policy 14.10 Directors & Officers Liability Insurance 14.11 Workmen Compensation Policy 14.12 Cyber and Crime Insurance Policy 14.13 CFA Fidelity Policy 14.14 Employees Fidelity Policy 14.15 Charterer’s Liability Insurance Policy 14.16 Role of Divisions / Units in Insurance Management 14.17 Role of Refineries Head Office in Insurance Management 14.18 Accounting of Expenditure Pending Finalization of Insurance Claims

Annexure – 14.1 Summarised Details Of Various Insurance Policies 15. CRUDE OIL / PRODUCT ACCOUNTING 15A OIL ACCOUNTING AT REFINERIES 15.1 Introduction 15B 15.2 Introduction to Crude Oil Accounting in SAP 15.3 Creation of Purchase Order & Loading in High Seas (SIT) 15.4 Pipeline Movement, Refinery Receipt & Consumption by the Unit 15.5 Payment and Related Activities for Imported and Indigenous Crude Oil 15.6 Scheme of Entries 15.7 Annual/ Quarterly Closing Activities 15.8 Accounting of Finished Products 15.9 Excise / GST Procedure and Accounting 15.10 Business Vertical PRODUCT ACCOUNTING INC. RAW MATERIAL FOR LUBES AT MARKETING 15.11 Loss/Gain and Rebranding of Products 15.12 Claims 15.13 Company's Use of Own Oil 15.14 Raw Materials 15.15 Valuation 16. EXCISE, VAT & GST 16.1 Central Excise Duty 16.2 CENVAT Credit Rules, 2017 16.3 Custom Duty 16.4 VAT / CST 16.5 Goods & Service Tax (GST) 16.6 Customs –Authorized Economic Operator (AEO) 17. COST AUDIT 17.1 Costing 17.2 Legal Framework 17.3 Cost Auditor Appointment 17.4 Cost Audit Report 17.5 Guidelines for Preparation of Cost Sheets Annexure – 17.1 Non Cost Items 18. TRADE RECEIVABLES 18.1 Disclosure Requirements 18.2 Secured 18.3 Doubtful 18.4 Impairment Loss on Trade Receivables 18.5 Classification 18.6 Confirmation of Balances / Joint Reconciliation With Customers 18.7 Refund of Customer Balances 18.8 Companies (Acceptance of Deposit) Rules 2014 18.9 Knocking Off of Customer Balances 18.10 Pooling of Customer Balances 18.11 Credit Balances in Trade Receivables 18.12 Ageing of Customer Balances 18.13 Other Guidelines 19. FINANCIAL INSTRUMENTS 19.1 Background 19.2 References to Authoritative Literature 19.3 Accounting for Financial Instruments Under Ind AS 19.4 Presentation and Disclosures

19.5 Hedge Accounting of Derivatives Annexure 19.1 Security Deposits Annexure 19.2A, 2B & 2C Hedging of Margin, Short Term Foreign Currency Loan and Foreign Currency Crude Liability Annexure 19.3A & 3B Cash Flow Hedge Accounting 20. EQUITY 20.1 Background 20.2 Treasury Shares 20.3 Transaction With Owners- Treatment of Transaction Cost 20.4 Share Capital 20.5 Other Equity 21. REVENUE 21.1 Sale of Goods 21.2 Discounts and Incentives 21.3 Barter Transactions 21.4 Customer’s Right to Return (Goods Sold) 21.5 High Sea Sales 21.6 Service Concession Arrangements 21.7 Construction Contracts 21.8 Rendering of Services 21.9 Other Operating Revenues / Other Income 21.10 Excise Duty 22. NOTES TO ACCOUNTS 22A PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS 22.1 Provision of Ind-AS 37 in Brief 22B 22.2 Compliance in IOCL 22.3 Contingent Assets 22C 22.4 Provision for Contingencies – Change in Accounting Manner 22D 22.5 Disclosure Requirement 22E SEGMENT REPORTING 22.6 Provision of Ind-AS 108 in Brief 22F 22.7 Reportable Segments in IOCL 22.8 Reporting of Segment Information to Corporate Finance 22.9 Special Points 22.10 Divisional Submission to CF – Signed Copy and in PACE FAIR VALUE DISCLOSURES 22.11 Scope 22.12 Summarized Provisions and Requirements 22.13 Fair Value Hierarchy and Calculation Methodology 22.14 Accounting Policy on Fair Value Measurement FINANCIAL RISK DISCLOSURES 22.15 Ind-AS Provisions RELATED PARTY TRANSACTIONS 22.16 Background 22.17 Identification of Related Parties 22.18 Identification of Related Party Transactions 22.19 Approval of the Transactions 22.20 Disclosures EXPLORATION & PRODUCTION 22.21 Background 22.22 Process of Acquisition of E&P Blocks 22.23 Mode of Acquisition 22.24 Agreements Related to Acquisition and Operation of E&P Blocks 22.25 Involvement of Finance

22.26 Accounting Treatment of Cost Incurred in Different Phases 22.27 Note-37: “Related Party Disclosures” in Compliance With Ind-As 24 22.28 SAP Process Used for Exploration & Production Accounting 23. INCOME TAXES 23.1 Provision of Ind-AS 12 (Income Taxes) In Brief 23.2 Provision of Ind-AS 34 (Interim Financial Reporting) Related to Accounting of Income Tax 23.3 Procedures Adopted 23.4 Disclosures 24. CONSOLIDATED FINANCIAL STATEMENTS 24.1 Consolidation Procedure: Consolidation of Subsidiaries 24.2 Consolidation Procedure: Consolidation of Associates and Joint Ventures 24.3 Consolidation Procedure: Consolidation of Joint Operations 24.4 GAAP Adjustments 25. PACE 25A PREPARATION OF STANDALONE/ CONSOLIDATED FINANCIAL STATEMENTS, DISCLOSURES, FINANCIAL REVIEW AND OTHER MIS THROUGH PACE 25B PREPARATION OF FINANCIAL STATEMENTS 25.1 Balance Sheet, Statement of Profit & Loss and Note No. 2 to 30 25C 25.2 Disclosures (Note No. 31 Onwards) 25D REVENUE BUDGET FINANCIAL REVIEW/ APPRAISAL 26. APPENDIX 26A SIGNIFICANT ACCOUNTING POLICIES 26B GUIDELINES FOR USE OF DISCOUNT RATES 26C HURDLE RATES 26D CHAPTER OWNERS AND MAJOR CONTRIBUTORS

CHAPTER 1 : MAIN ACCOUNTS 1.1 SYSTEM OF ACCOUNTING 1.1.1 1.1.2 The company is a public company domiciled in India and is incorporated under the 1.1.3 provisions of the Companies Act applicable in India. The books of account in the company 1.1.4 shall be maintained on the double entry system of accounting. All items of income and expenditure shall be brought into books on accrual basis 1.1.5 The books of accounts are kept in accordance with Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013 (“Act”) read with the Companies (Indian Accounting Standards) Rules and other relevant provisions of the Act and Rules thereunder, as amended from time to time. Company has implemented SAP R3 as ERP Solutions, which enables real time accounting whereby the trial balances can be drawn at any given point of time. SAP R3 based integrated system of accounting classifies each item with a numerical code. Company has also implemented SAP BPC software for consolidation and reporting. It is a customised software with the name of PACE (Planning Analysis and Consolidation Thru ERP). Masters are maintained in PACE and the reporting formats are developed to draw the financial statements thru PACE. Inputs for reporting in PACE can be SAP data as well as direct input saved in PACE platform. A separate chapter is drafted in manual for PACE (refer Chapter-25). Utility has been developed for preparing accounts using the trial balance available thru PACE and the same is available to divisions in the common folder at PACE server. However, the transactions and accounting shall continue to be in SAP and Divisions shall confirm closure of Accounting Period in SAP once all entries are completed. With a view to have uniformity across corporation, a uniform chart of accounts is prepared in SAP. The chart of accounts operates on a ‘10’ digit codification scheme. A chart of account “IOCL” defined for the Corporation. The classifications of account code are as under: GL Account codes beginning with: • “1-2” represent Liability Accounts • “3” represent Asset Accounts • “4” represent Income Accounts • “5” represent Expenditure Accounts • “6-7” represent Bank Accounts 1.2 CAPITAL AND REVENUE EXPENDITURE Any expenditure shall be recognised as an asset in the balance sheet when it is probable that the future economic benefits will flow to the entity and the asset has a cost or value that can be measured reliably. All the transactions where it is improbable that the economic benefits will flow to the entity beyond the current accounting period shall be recorded in statement of profit and loss and shall be regarded as revenue transaction. Main Accounts INDEX Page 1

For a newly purchased item of property, plant and equipment, before the asset is depreciated, an assessment must be made of the appropriate useful life, residual value and depreciation method to use. As part of this assessment, it will be expected that there will be certain future cost associated with the asset in order to keep the asset in a good enough condition to perform at expected levels over the expected useful life, such as routine maintenance and repairs. Such costs will not meet the recognition criteria for property plant and equipment, instead they are recognised in profit or loss as incurred except cases where such cost is componentised as per the applicable guidelines. On the other hand if company has acquired an asset that reflects the company's obligation/intention to incur expenditure in the future that is necessary to bring the asset to the location and condition necessary for it to be capable of operating in the manner that management intends, such subsequent costs should be capitalised. For example a plant constructed/acquired at one stage may require substantial repairs, renovation, revamps due to improvement in technology or energy efficiency or capacity improvement or Safety or Environmental Reasons or enhancement in the productive life of the asset shall be meeting the asset recognition criteria and shall be capitalised. Considering Ind AS 16 and Componentisation guidelines following expenditures needs to be capitalised: • MOR (Meeting the threshold levels) • Catalyst (Meeting the threshold levels) • Spares (Meeting the threshold levels) • Replacement of Components identified as per componentisation guidelines For detailed guidance in the matter of recognising the fixed assets in books of accounts, chapter on Fixed Assets may be referred. 1.3 ACCOUNTING OF FINANCIAL TRANSACTIONS 1.3.1 In SAP financial transactions are mainly classified as under: 1.3.2 1.3.3 • General Ledger • Accounts receivable • Accounts payable • Cost Centre/Profit Centre/Business Area wise accounting • Fund Management • Asset accounting • Internal order & Investment management (WBS Settlement) • Consolidation. For detail about transaction in SAP, please refer SAP FICO manual. A list of commonly used list of document types, CCA, accounts types, Vendor types and List of special G/L indicators is attached in Annexure – 1.1. The details of ledgers/ trial balance can be obtained from T-Code F.01. In SAP based accounting system, the entries are passed at subsidiary ledger level with a simultaneous update of general ledger. For example, for an entry of purchase passed in MM module the FICO module automatically gets updated. Hence, in general, the subsidiary ledgers are integrated with the main ledger. Main Accounts INDEX Page 2

1.4 ISSUE OF DEBIT/ CREDIT NOTES 1.4.1 General 1.4.1.1 All debit/ credit note within Refineries, Marketing, Pipelines, R&D and Business Development will pass through a cross-company entry directly in each other’s books. The procedure to followed is as follows: 1.4.1.2 Debit/ Credit notes should be exchanged in respect of transactions incurred by one division/ units/divisional offices/ state offices for other unit for financial assets, liabilities/ purchase, sale of products/crude. Further, in respect of employee cost debit / credit need not be exchanged. Exchange of debit credit notes through books of accounts should be avoided unless any recovery is to be made. Indicative list of debit/credit notes which can/cannot be exchanged is enclosed as Annexure – 1.2. In case of debit/credit notes for which only MIS is to be shared should be given to Corporate Finance for posting the same as Dummy entries in PACE to ascertain actual profitability of Divisions. 1.4.1.3 All debit/ credits relating to Refinery units, Marketing, Pipelines, R & D and Business Development passed directly to the concerned location by passing cross-company entries in the respective Company-codes. 1.4.1.4 All units/ offices have been given authorisation to pass Cross-co entries in other division based on the nature of transaction; unit will be passing the cross-company entry in the sectional/ suspense GL codes of the concerned Company. 1.4.1.5 In case any inter-divisional transaction is to be rejected it will be done only through passing a fresh cross-co. entry and all supporting to be returned to the originating unit. The T-code for reversal of cross-co. entries should not be used as it may lead to reversal of entire transaction of originating unit including entries pertaining to other co-codes. 1.4.1.6 Originating Section to pass/ attach on the supporting/documents of the cross-company entry immediately to the responding unit. 1.4.1.7 The balances appearing in the Sectional GL codes on account of cross-divisional entries will be continuously monitored and cleared by the concerned section on receipt of supporting/ documents from the originator. 1.4.1.8 In case there is any ambiguity in the transaction, Unit will sort out the matter by addressing the issue directly with the Main Accounts section of the other location. In case the issue is not settled at local level it should be addressed to HO instead of creating chain of reversal entries. 1.4.1.9 Reconciliation of balances with other division should be done on quarterly basis before finalisation of accounts. 1.4.2 Principles to be applied in respect of inter-unit/ inter-divisional transactions 1.4.2.1 Work done relating to capital expenditure on behalf of the other unit/ Division is to be capitalised in respective Division only under the relevant asset classification. Main Accounts INDEX Page 3

1.4.2.2 Transfer of assets and stores shall be made on actual cost appearing in the books of the originating unit. For assets, the cumulative provision of depreciation shall also be transferred. 1.4.2.3 Supply of petrol, HSD, Oil and lubricants and power for pipeline operations etc. shall be done at the rates applicable from time to time. The valuation of stock of petrol, HSD, lubricant, etc. is to be done at cost. 1.5 QUARTERLY/ ANNUAL ACCOUNTS 1.5.1 The Divisional Balance Sheet and Statement of Profit & Loss along with all notes to accounts are to be prepared and audited by the statutory/ branch auditors. Along with the Financial statements, following statements/ information are to be prepared as per requirement – S. Activity Frequency No 1 Appraisal of Accounts (Financial Review) Quarterly 2 CEO-CFO certificate Quarterly 3 Compliance Certificate Quarterly 4 Internal Financial Control (IFC) certificate Quarterly 5 Business Area wise/ Profit Centre wise Trial Matching Quarterly 6 Director’s Responsibility Statement U/s 134(5) Annually 7 Segmental Information in compliance with Ind AS 108 Quarterly through PACE 8 Balances with Subsidiaries and JV duly signed. Quarterly 9 Details of Major Additions to Fixed assets and details of Quarterly Work in progress. 10 Reconciliation of Profit and loss on sale of assets Quarterly 11 Reconciliation of Forex and interest. Quarterly 12 Details of Valuation of Spent Catalyst Quarterly 13 Reconciliation statement of Contingent liabilities Quarterly 14 Signed MOM with Unit Internal Audit on accounts Quarterly 15 Ind-AS-19 details in respect of SABF, Gratuity, PRMS, LSA, Quarterly - Accounting RSA, Exgratia and Leave Encashment Annually - Disclosure 16 Capitalisation Note in case of capitalisation more than Rs.25 Quarterly crore along with requisite supporting documents 17 Statements required as per Tax Audit guidelines issued Quarterly separately for making provision of Income Tax in the Corporate Accounts. 18 Working for Impairment of Assets Annually 19 Details and the statements required in connection with Annually submission of information to the Board of Directors and BPE 20 Summarised Financial Requirement (SFR) Annually 21 Data for energy conservation Annually 22 Township Accounts Annually 23 Other Information for Descriptive Notes Annually Main Accounts INDEX Page 4

1.5.2 The following information is to be given as per the requirement of Bureau of Public 1.5.3 Enterprises: 1.5.4 a. The cost of township and other facilities like school, hospital, etc. should be shown 1.5.5 separately in the annual accounts of the company. b. The schedule of income and expenditure on provision of township, educational, medical, transport and other social overheads should also be separately attached to the Statement of Profit & Loss Account. Closing of Annual/ Quarterly Accounts shall be done in accordance with the corporate accounts manual. Specific guidelines, if any required, shall be issued by Corporate Office/ Divisional HO to all units/ offices. These provisions in the manual and guidelines issued should be strictly adhered to for preparation of Accounts. Principally, the target dates for completing the closing activities at Divisional level are 15 days in case of quarterly closing and 30 days in case of annual closing. However, the date of divisional closing shall be communicated by Corporate Office for each quarter. Before the close of each quarter/year, a time schedule shall be drawn by Divisional Head Office in consultation with the units for preparation, finalisation and audit of quarterly/ annual accounts by all the units. The last date for raising of debits/ credits for inter-unit/ inter- divisional transactions shall be prescribed in the time schedule and all units/branches shall strictly adhere to that date. Within the time schedule prescribed in guidelines by Divisional Head Office, a detailed program shall be worked out at the units by the Main Accounts Section prescribing target dates for the following: a. Last date for passing of journal entries by various accounting sections and submission of schedule in support of control accounts. b. Last date for preparation of final Trial Balance and Balance Sheet. c. Time schedule for checking of final accounts by the Auditors. 1.5.6 At the time of preparation of final trial balance, it will be ensured that the following requirements are complied with: - a. All personal ledgers are completed and reconciled with the control accounts and no adjustment relating to them is pending. b. All income and expenditure relating to the financial year, known up to the last date of passing entries have been accounted for on an accrual basis. c. Inter-divisional balances are reconciled, tallied and confirmed. d. Contra entries with other units/ divisions are confirmed with the Divisional Head Office. 1.5.7 The Balance Sheet and the Statement of Profit & Loss along with the supporting Notes shall 1.5.8 be prepared in the form prescribed by the Corporate Office/ Divisional Head Office. Balance Sheet, Statement of Profit & Loss and Notes to the Balance Sheet shall be rounded off to rupee crore with two decimal places at divisional and corporate level. However, for Main Accounts INDEX Page 5

preparing accounts below division level, divisional HO shall advices the units on denomination of accounts. 1.5.9 Accounting guidelines/ instructions issued by Divisional HO/ Corporate office are to be followed/ observed at the time of finalisation of accounts. 1.5.10 All the items of expenses/ incomes relating to prior years (except the contra items of expenses/ incomes) which could not be accounted for in accounts of earlier years due to errors or omissions shall be booked in the accounts as of item of current year in natural heads/ GL’s. However, in case of income/expense of more than Rs 1 crore, a replicate entry shall be posted in GLs opened for tracking these items. Later, on overall basis, corporate level threshold will be tested The estimation of a provision or contingency which are by their nature approximation that may need correction as additional information becomes known in the subsequent periods shall not constitute correction of an error and as such shall not be treated as prior period item. The prior period items shall be determined based on the time when the decision is taken rather than to the period in which they relate. The GLs to be used for posting the replicating entries are: GL Description 4109060240 PPI-Income 5540500870 PPI-Expense 5540500420 Ind AS-Prior Period Items 1.6 GOVERNMENT GRANTS 1.6.1 1.6.2 As per Ind AS 20, (Accounting for Government Grants), grants are assistance by government in the form of transfers of resources to an entity in return for past or future compliance with 1.6.3 certain conditions relating to the operating activities of the entity. They exclude those forms of government assistance which cannot reasonably have a value placed upon them and transactions with government which cannot be distinguished from the normal trading transactions of the entity. Government assistance is action by government designed to provide an economic benefit specific to an entity or range of entities qualifying under certain criteria. According to the Ind AS, Government grants shall not be recognised until there is reasonable assurance that: a. The company will comply with the conditions attaching to them; and b. the grants will be received However, receipt of a grant does not of itself provide conclusive evidence that the conditions attaching to the grant have been or will be fulfilled. Government grants shall be recognised in profit or loss on a systematic basis over the periods in which the company recognises as expenses the related costs for which the grants are intended to compensate. However a government grant that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs shall be recognised in statement of profit or loss of the period in which it becomes receivable. Government grants related to assets, including non-monetary grants at fair value, shall be presented in the balance sheet by setting up the grant as ”Government Grants under Other Main Accounts INDEX Page 6

1.6.4 Liabilities” and shall be taken to the statement of profit and loss on systematic basis (in the ratio of depreciation of corresponding asset) except EPCG grant amount in the ratio of 1.6.5 fulfillment of export obligation shall be taken to statement of profit & loss. 1.6.6 A government grant that becomes repayable shall be accounted for as a change in accounting estimate. Repayment of a grant related to income shall be applied first against any unamortised deferred credit recognised in respect of the grant. To the extent that the repayment exceeds any such deferred credit, or when no deferred credit exists, the repayment shall be recognised immediately in profit or loss. Repayment of a grant related to an asset shall be recognised by reducing the deferred income balance by the amount repayable. Detailed disclosure shall be given for all grants recognised in the financial statements in the note explaining Government Grants under descriptive notes to accounts. For detailed guidance on accounting of grants, chapter on Revenue including Government and Construction Contracts accounting may be referred. 1.7 FINANCIAL STATEMENTS AS PER SCHEDULE III 1.7.1 Financial Statements shall contain the following: a. Balance Sheet b. Statement of Profit and Loss c. Statement of Changes in Equity (SOCIE) d. Cash Flow Statement e. Notes to accounts 1.7.2 Financial Statements shall be prepared as per Schedule III (Ind-AS Schedule III). Sample 1.7.3 format of Balance Sheet, Statements of Profit and Loss and Statement of Changes in Equity is attached as Annexure – 1.5. Following principles for classification of assets and liabilities into current and non-current needs to be followed for presentation of assets and liabilities in accounts: An asset shall be classified as current when it satisfies any of the following criteria: a. it is expected to be realised in, or is intended for sale or consumption in, the company’s normal operating cycle; b. it is held primarily for the purpose of being traded; c. it is expected to be realised within twelve months after the reporting date; or d. it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date. e. All other assets shall be classified as non-current. A liability shall be classified as current when it satisfies any of the following criteria: - a. it is expected to be settled in the company’s normal operating cycle; b. it is held primarily for the purpose of being traded; c. it is due to be settled within twelve months after the reporting date; or Main Accounts INDEX Page 7

d. the company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. e. All other liabilities shall be classified as non-current. 1.7.4 Ind-AS requires assets and liabilities to be classified as financial and non-financial asset and liabilities also in addition to current and non-current classification. For detailed guidance on classification of asset and liabilities as financial and non-financial, kindly refer to the chapter on Financial Instruments. 1.7.5 Balance Sheet and Statement of Profit and Loss shall contain the notes explaining all the items that are clubbed together as well as capturing the additional disclosure requirements in accordance with Ind-AS. The brief contents of notes to accounts to financial statements are explained in paragraphs below. Kindly refer to the latest corporate Balance Sheet (Annual Report) for the details, guidance on disclosure requirements and structure of disclosures. 1.7.6 Divisions are to maintain the order of notes as per the latest corporate Balance Sheet (Annual Report) or any changes specifically advised by CO. In case a particular note is not applicable to a Division, the same will be shown as “Applicable on Corporate Basis”. In case Division is required to disclose any other additional information by way of descriptive note, the same shall be disclosed at the end of the last note i.e. “Other Disclosures”. 1.7.7 Templates shall be available in PACE for quarterly as well as annual closing of accounts wherein all the latest disclosures and disclosure formats shall be updated. Divisions/ units shall be required to follow the latest formats available in PACE for quarterly/ annual closing. 1.7.8 Significant Accounting Policies and Judgements Significant accounting policies and judgements should be followed uniformly across the Corporation. Draft accounting policies shall be circulated by corporate finance every year before closing of accounts. Various Judgements exercised by the management and Materiality thresholds fixed are listed in Annexure – 1.3. 1.7.9 Property Plant & Equipment/ Intangible Assets Assets shall be classified into specified classes and a reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations and other adjustments and the related depreciation and impairment losses/reversals shall be given for tangible as well as intangible assets. For detailed guidance kindly refer to chapter on Accounting of Fixed Assets 1.7.10 Capital work in progress/ Intangible assets under development Following disclosures shall be made as per Ind AS 16 Property Plant and Equipment and Ind AS 38 Intangible Assets: a. CWIP – Tangible Assets including unallocated capital expenditure, capital goods in transit and capital stores at site. This note depicts the movement of CWIP, Capital Stores Main Accounts Page 8

& CPE during the year. There is sub note which contains details of all CPE expenses incurred during the financial year. b. Till the time asset comes into existence, all capital expenditure pertaining to such asset should be kept separately under this note. c. Intangible Assets under Development should be shown separately, including its movement during the year. d. Capital Work in progress note should contain following footnotes: • The rate used to determine the amount borrowing costs eligible for capitalisation need to be provided as a footnote. In case of multiple rates of loans, the range of rates may be specified. • Capital stores include stock lying with contractors. • Includes Capital expenditure relating to ongoing Oil & Gas exploration activities 1.7.11 Loans Loans are to be classified into Current & Non-Current The following classification of Loans & Advances is proposed to be carried out: Particulars: Current/ Non-Current Loans (including employee loans) Current/ Non-Current Sundry Deposits Current/ Non-Current Deposits of Permanent Nature like Non-Current deposit with Electricity Board Corpus Fund to SC/ST dealers/ Current/ Non-Current distributors Disclosures for amount due from Directors, amount due from Other Officers and loans which are valued at FVTPL needs to be given separately as footnotes. T-Code YF205 should be used to bifurcate Secured/ Unsecured/ Current/ Non-Current in SAP. 1.7.12 Other Financial Assets All financial assets which are not covered by other notes are shown in this note. Few important heads shown under head includes: a. Derivative at FVTPL b. Advance to Employee Benefit trust c. Receivables on agency sales d. Claims Recoverable e. Bank deposits with remaining maturity of more than 12 months maturity shall be disclosed as Non-current. 1.7.13 Other Assets This is an inclusive heading, which incorporates assets that are not financial assets and do not fit into any other asset category. Following are the instances. a. advance for Capital Expenditure b. Advances Recoverable c. Claims Recoverable Main Accounts Page 9

d. Balances with Customs, Port Trust and Excise Authorities e. Gold /Other Precious Metals f. Deferred Expenses g. Prepaid Rentals Current Non-Current classification of other assets shall be done as per general principles. Transactions in respect of related parties under the above heads need to be separately disclosed. 1.7.14 Inventories a. Inventories shall be classified as Inventories in Hand/ Transit separately into: • Raw Material • Finished Goods • Stock in trade • Stock in Progress • Barrels and Tins • Stores, Spares etc. b. Stock-in-trade includes goods acquired for trading. c. Stock of GAS & Crude Oil to be shown separately d. Separate details of stock lying with contractors needs to be given for all categories above as footnotes. e. Expense/ Income recognised for inventories carried at net realisable value shall also be separately given as footnotes. f. General provision @ percentage prescribed in Annexure – 1.4 shall be made on Stores and Spares. 1.7.15 Trade Receivables a. Trade Receivables are all Short term i.e. current in nature. b. Receivable from related parties needs to be separately disclosed. c. General provision @ percentage prescribed in Annexure – 1.4 shall be made with equivalent amount being disclosed as doubtful. 1.7.16 Cash and Cash Equivalents Cash and cash equivalents shall be classified as: a. Bank Balances with scheduled banks should be classified under • Current account • FD maturing within three months b. Bank balances with non-schedule banks c. Cheques, Drafts in hand d. Cash Balance including imprest. 1.7.17 Bank Balances other than Cash Equivalents It should include items such as Balances with banks held as margin money or security against borrowings, guarantees, etc. and bank deposits with original maturity of more than three months but upto 12 months. Other bank Balances shall be classified as: Main Accounts Page 10

• Fixed Deposit Account • Earmarked Balances • Blocked Account • Other Bank Balances Further following disclosures shall be provided by way of foot note • Earmarked balances with banks (for e.g., for unpaid dividend) shall be separately stated • Balances with banks to the extent held as margin money or security against the borrowings, guarantees, other commitments shall be disclosed separately • Repatriation restrictions, if any, in respect of cash and bank balances shall be separately stated Bank deposits with remaining maturity of more than 12 months maturity shall be disclosed as Non-current under Other Financial Assets. 1.7.18 Non-Current Assets Held for Sale: As per Ind AS 105 Non-Current Assets Held for Sale and Discontinued Operations, items of fixed assets which are no longer in use and intention of the management is to dispose off the same within one year, are to be classified as Non-current Assets held for sale. Category wise disclosure to be given alongwith reason for classifying the same under held for sale category. Further the loss/gain recognised shall also be disclosed. 1.7.19 Classification of Borrowings into Long-term borrowings and Short-term borrowings Borrowings shall be classified as Long Term and Short-Term borrowings on the basis of its nature. Some of the examples for classification of borrowings are as follows: Type of Borrowings: Long Term/ Short Term Non-convertible Redeemable Bonds of different series. Long Term Working Capital Demand Loan Short Term Loan through CBLO Short Term OIDB Loan Long Term Foreign Currency Loans Long Term/ Short Term Rupee Loans Long Term/ Short Term Commercial Papers Short Term Inter-corporate Deposits Short Term Foreign Currency Bonds Long Term Lease Obligations Long Term/ Short Term a. Loan section shall work out the current maturities of Long-term borrowings and advice main accounts for reclassify them to “Other Current Liabilities”. The bifurcation needs to be done on the basis of maturity of borrowings. In case maturity is upto 12 months it is to be categorised as current maturity otherwise it will continue to be part of long- term borrowings. Main Accounts Page 11

b. Specific GLs opened at the time of Schedule VI implementation shall be used and reversible JVs are passed for reclassifying the current maturities at the end of reporting period. c. Period of continuing default (if any) to be given by way of notes. d. A note disclosing security details for secured loans, loan repayment schedule should be given. The nature of security shall be specified separately in each case. However, where one security is given for multiple loans, the same may be clubbed together for disclosure purposes with adequate details or cross referencing. e. Interest accrued but not due on loans hitherto being presented separately, will now be clubbed along with respective loan. f. Bonds/debentures (along with the rate of interest and particulars of redemption or conversion, as the case may be) shall be stated in descending order of maturity or conversion i.e. farthest redemption bond shall be disclosed first and so on. For this purpose, in case of bonds/ debentures repayable in instalments, the first instalment date shall be considered as repayment date. 1.7.20 Other Financial Liabilities Following major heads shall be shown Particulars Current/ Non-Current Current maturities of long-term borrowings Current Interest accrued but not due on non-financial Current liabilities Interest accrued and due on non-financial liabilities Current Liability to Trusts and Other Funds Current Liability for Capital Expenditure Current/ Non-Current Employee Liabilities Current Liability for purchase on Agency Sales Basis Current Derivative instruments at fair value through P&L Current Security Deposits Current/ Non-Current In case of all other Financial liabilities which have been classified as Non-Current, same shall be recorded in books at discounted value and appropriate deferred expenses shall be recognised. 1.7.21 Provisions a. Provision for employee benefits Current/ Non-Current Particulars As per actuary Leave Encashment As per actuary Resettlement Allowance As per actuary Long Service Award As per actuary Exgratia b. Decommissioning Liability – Current/ Non-Current c. Contingencies for Probable Obligations (gross as well as net of Deposits) – Current Main Accounts Page 12

Further addition and deletion, to concerned heads, of decommissioning liability and provisions for probable contingencies during the year shall be disclosed by the way of footnotes. 1.7.22 Other Liabilities All non-financial liabilities shall be presented under this note. Major classification to be carried out as follows: Particulars Current/ Non-Current Deferred Income Current/ Non-Current Government Grants Current/ Non-Current Statutory Liabilities Current Advance from customers Current 1.7.23 Trade Payables All trade payable shall be disclosed under this note and shall be further bifurcated as • Dues to Micro and Small Enterprises • Dues to Related party • Other Dues 1.7.24 Revenue from operations Note on revenue from operations shall disclose separately revenue generated from • Sale of products (Net of Discounts); • Sale of services; • Other operating revenues (details in sub note); • Net claim/ (Surrender) of SSC; • Subsidy from Central/ State Govt; • Grant from Govt of India Revenue from operations does not include Goods and Services tax, VAT, Sales Tax. 1.7.25 Other Income Following items shall be classified as Other income - • Interest Income • Dividend Income • Profit on Sale and Disposal of Assets (Net gain) • Profit on Sale of Investments (Net) • Fair value Gain on Diminution in value of Investment Written Back (Net) • Gain on Derivatives • Fair value Gain on Financial instruments classified as FVTPL • Exchange Fluctuations (Net gain) • Amortisation of FC Monetary Item Translation Main Accounts Page 13

• Revenue Grants • Other Non-Operating Income Following disclosures shall be required as footnotes: a. TDS included in interest income. b. Bifurcation of interest income on investments c. Total interest income (calculated using the effective interest method) for financial assets that are not at fair value through profit or loss d. Bifurcation of dividend income on investments e. Dividend income from subsidiaries 1.7.26 Cost of Material Consumed Following items to be covered under this Note: • Raw Material • Other Material and components which are consumed in the manufacturing activities. • Raw Material/ Semi Finished Goods procured with the intention to further process then it should be included under cost of Material consumed instead of Purchase of Stock in Trade. 1.7.27 Changes in inventories of finished goods work-in-progress and Stock-in-Trade Change in Inventory shall be shown separately in respect of the following categories of Inventories • Finished Goods • Stock in trade • Stock in Progress 1.7.28 Employee Benefit Expenses Aggregate amount paid/ payable by the corporation to the employees shall be categorised under following head: • Salaries, Wages, Bonus etc. • Contribution to Provident & Other Funds • Voluntary Retirement Compensation • Staff Welfare Expenses Disclosure in respect of the amount excluded on account of Capital Work in progress and CSR employees cost to be mentioned as footnotes. Detailed disclosure in compliance with Ind AS-19 is to be given separately in Descriptive note for Employee Benefits. Main Accounts Page 14

1.7.29 Finance costs Finance costs shall be classified as: • Interest expenses on Financial items • On working capital loans (Further classification required for Bank borrowings (fixed period and short term), Bonds/Debentures, Others are to be given) • On other loans (Further classification required for Bank borrowings (fixed period and short term), Bonds/Debentures, Lease Obligations, Others are to be given) * • Unwinding of Discount# • Interest on lease obligations • Dividend on Preference Shares • Others • Interest expenses on Non-Financial items • Unwinding of Discount$ • Others • Other borrowing costs (e.g. commitment charges, loan processing charges not in the nature of interest, guarantee charges, loan facilitating charges and other ancillary charges) • Applicable net gain/loss on foreign currency transactions and translation • Allocation of Finance Cost to Divisions/ Units (Contra GL which shall be zero at corporate level) * Finance charges on Lease obligations charged during the period needs to be booked under Interest on other loans – others. # unwinding of discount on financial items like security deposits received etc. needs to be booked under this head. $ unwinding of discount on non - financial items like decommissioning liability needs to be booked under this head. 1.7.30 Guidelines on Renewable Purchase Obligation (RPO): a. Divisions should estimate the current RPO liability and REC available with them and intimate the same to CF. All divisions generating REC should transfer the information of the same along with copy of certificate to RHQ. b. Refinery division shall do the consolidated accounting/ disclosure of all RPO and REC on net basis and following may be the scenario: • Surplus of REC (after netting with RPO’s) at IOCL level in RHQ books – This shall be shown as inventory and disclosure shall be given. Valuation should be done at cost or NRV whichever is lower. • Net Liability of RPO at IOCL level in RHQ books – This shall be shown as liability in RHQ books at Prevailing market price as on reporting date. c. In case the REC’s are sold in market to external parties, revenue to be considered as Other Miscellaneous Income under Other Operating Revenues at transaction value. Main Accounts Page 15

1.7.31 Other Expenses All expenses not classified under other heads are to be classified under this head. For example • Consumptions of Stores and Spares parts /Packages & Drum Sheets • Power & Fuel • Throughput, Processing & Blending fees, Royalty and other charges • Octroi, Other Levies and Irrecoverable taxes • Repairs and Maintenance • Freight, Transportation Charges and Demurrage • Office Administration, Selling and other Expenses (item wise details to be given as sub notes) 1.7.32 Other Comprehensive Income ‘Other comprehensive income’ (OCI) is defined under Ind AS 1 as ‘comprising items of income and expense (including reclassification adjustments) that are not recognised in profit or loss as required or permitted by other Ind ASs. General Instructions for Preparation of Statement of Profit and Loss under Schedule-III state that ‘Other Comprehensive Income’ shall be classified into: Items that will not be reclassified to profit or loss and its related income tax effects: a. Changes in revaluation surplus; b. Re-measurements of the defined benefit plans; c. Fair Value changes on equity Instruments through other comprehensive income; d. Fair value changes relating to own credit risk of financial liabilities designated at fair value through profit or loss; e. Share of Other Comprehensive Income in Associates and Joint Ventures, to the extent not to be classified into profit or loss; and f. Others (specify nature); Items that will be reclassified to profit or loss and its related income tax effects: a. Exchange differences in translating the financial statements of a foreign operation; b. Fair value changes in Debt Instruments through other comprehensive income; c. The effective portion of gain and loss on hedging instruments in a cash flow hedge; d. Share of Other Comprehensive Income in Associates and Joint Ventures, to the extent to be classified into profit or loss; and e. Others (specify nature). As a part of the definition of OCI given in Ind AS 1, the components of OCI, which are in addition to above, are stated to include: a. Gains and losses on financial assets measured through Other Comprehensive Income; b. Gains and losses on hedging instruments that hedge investments in equity instruments measured through Other Comprehensive Income; Main Accounts Page 16

c. Changes in time value of options when separating the intrinsic value and time value of an option contract and designating only intrinsic value changes as the hedging instrument; d. Changes in the value of the forward elements of forward contracts when separating the forward element and spot element of a forward contract and designating only spot element changes as hedging instrument; e. Changes in the value of the foreign currency basis spread of a financial instrument when excluding it from the designation of that financial instrument as the hedging instrument. Ind AS 1, para 91 gives a choice of presentation for tax effects of items presented in other Comprehensive income. An entity may present items of OCI either: a. Net of related tax effects, or b. Before related tax effects with one amount shown for the aggregate amount of income tax relating to those items. If an entity elects alternative (b), it shall allocate the tax between the items that might be reclassified subsequently to the profit or loss section and those that will not be reclassified subsequently to the profit or loss section. Accordingly, certain items shall form part of OCI in IOCL also namely: a. Remeasurement of Defined Benefit Plans – annually based on actuarial valuation b. Fair value of Equity Instruments – investments in equity shares other than in group companies (Subsidiaries, JV’s and Associates) is classified as fair value thru OCI (FVOCI). Changes in fair value of these investments shall be booked under OCI. c. Fair value of Equity Instruments – investment in GOI bonds are classified as FVTOCI since these are held for the purpose of trading and well as holding till maturity. d. Tax effect of each item shall be shown separately. Sample Disclosure for IOCL shall be as follows: Main Accounts Page 17

For detailed guidance on classification of financial assets and their accounting, kindly refer to the chapter on Financial Instruments. 1.7.33 Distributions made & Proposed Details related to Proposed, Interim & Final Dividend are disclosed under this Note. This note shall be prepared by registered office at Corporate Level. 1.7.34 Earnings Per Share (EPS) Details & Workings of Basic Earnings Per Share and Diluted Earnings Per Share (EPS) are disclosed under this Note. Basic earnings per share shall be calculated by dividing profit or loss attributable to ordinary equity holders of the parent entity (the numerator) by the weighted average number of ordinary shares outstanding (the denominator) during the period. Dilution is a reduction in earnings per share or an increase in loss per share resulting from the assumption that convertible instruments are converted, that options or warrants are exercised, or that ordinary shares are issued upon the satisfaction of specified conditions. Therefore, for the purpose of calculating diluted earnings per share, an entity shall adjust profit or loss attributable to ordinary equity holders of the parent entity, and the weighted average number of shares outstanding, for the effects of all dilutive potential ordinary shares. Retrospective adjustment in EPS - If the number of ordinary or potential ordinary shares outstanding increases as a result of a capitalisation, bonus issue or share split, or decreases as a result of a reverse share split, the calculation of basic and diluted earnings per share for all periods presented shall be adjusted retrospectively. If these changes occur after the reporting period but before the financial statements are approved for issue, the per share calculations for those and any prior period financial statements presented shall be based on the new number of shares. The fact that per share calculations reflect such changes in the number of shares shall be disclosed. In addition, basic and diluted earnings per share of all periods presented shall be adjusted for the effects of errors and adjustments resulting from changes in accounting policies accounted for retrospectively. This note shall be prepared at Corporate Level. 1.7.35 Interest in Subsidiaries, Associates and Joint Ventures Interest in Subsidiaries, Associates and Joint Ventures is disclosed in percentage terms under this Note. This note shall be prepared by registered office at Corporate Level. 1.7.36 Disclosure relating to activities associated with exploration for and evaluation of mineral resources (crude oil, natural gas etc.) Disclosure related to E&P Activities as per Ind AS – 106 (Exploration and evaluation of mineral resources) and Guidance note on E&P issued by ICAI are shown under this Note. This note shall be prepared by Business Development at Corporate Level. 1.7.37 Capital Management This note includes information on how the company manages its capital structure and makes adjustments in the light of changes in economic conditions and requirements. This Main Accounts Page 18

1.7.38 note contains information of Company’s Debt Equity Ratio along with details of Borrowings and Equity. This note shall be prepared at Corporate Level. Disclosures as required by regulation 34(3) of SEBI (LODR) Regulations 2015-Following details are disclosed under the above Note I. Loans and Advances in the nature of loans: A) To Subsidiary Companies B) To Associates /Joint Venture C) To Firms/Companies in which directors are interested II. Investment by the loanee (as detailed above) in the shares of IOC and its subsidiaries 1.7.39 Dues to Micro and Small Enterprises The outstanding dues to micro enterprises and small enterprises along with the interest are to be disclosed separately in notes to accounts. Divisions to ensure correct mapping of vendors. Divisions to compile the list of parties under the category as per the existing and ensure complete disclosure on this account as per Micro, Small and Medium Enterprises Act 2006 in descriptive notes to accounts at the year-end. Divisions are advised to comply with the requirements communicated vide IOM no. CO/PAG/19 dated 11th May, 2012 as pertaining to MSME disclosure of information in accounts. In this regard, Divisions to provide the following information to CF separately along with the accounts: a. Goals set with respect to procurement to be met from Micro & Small enterprises b. Achievement made 1.7.40 Research and Development expenditure Breakup of Capital and Revenue expenditure incurred on Research and Development during the year is to be given under this note. 1.7.41 Disclosure Related to Certified Emission Reductions With the value of Certified Emission Reductions falling to insignificant levels, the accounting of the same, in accordance with Guidance Note on Accounting for Self- generated Certified Emission Reductions, is suspended. The accounting for the same will be resumed when its values gain significance in future and the same meets the recognition criteria as per Ind AS 1.7.42 Disclosure relating to Corporate Social Responsibility Expense Details of expense incurred by the company on account of fulfilment of its Social Corporate Responsibility shall be presented under major programs. The amount of expense shall be bifurcated into the amount which has been paid in cash and the amount yet to be paid in cash. Main Accounts Page 19

1.7.43 Accounting of Corporate Environment responsibility (CER) a. CER to be booked on actual incurrence basis in the CWIP b. Any remaining unspent CER amount is to be disclosed under capital commitments as per EC clearance / subsequent communication c. At the time of capitalisation of the asset, provisional liability is to be created with corresponding capitalisation for the proportionate unspent amount. However, Environmental Clearance Certificate for the project approved prior to 01.05.2018 i.e. expenditure with respect to ESC/ESR (Environmental Social Responsibility), to be booked on incurrence basis 1.7.44 Revenue from Contracts with Customers Information in respect of Revenue from Contracts with Customers undertaken by the company needs to be disclosed under this Note. Refer to Chapter 21 for more details regarding disclosures. 1.7.45 Other Disclosures Information not disclosed anywhere in the Balance Sheet, Statement of Profit & Loss and notes to accounts can be disclosed here if the same is relevant and material enough for it to be disclosed in accounts. Guidance on certain specific subjects and issues are listed out as Annexure – 1.4 for reference. 1.8 IND-AS-21- NEW APPENDIX FOR DATE OF TRANSACTION IN CASE OF FC TRANSACTION A new appendix-B to Ind-AS 21 is notified by MCA in March’2018 which is effective from 01.04.2018. This appendix clarifies the date of the transaction for the purpose of determining the exchange rate to be used on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. Accordingly, following treatment needs to be made for advances received/paid in foreign currency: a. Foreign currency advances are non-monetary items for which quarter on quarter restatement due to change in exchange rates at each reporting date is not required. b. The date of transaction will be the date when the company initially recognises the non- monetary assets or non-monetary liability arising from payment or receipt of advance consideration. 1.9 GOVERNMENT AUDIT COORDINATION The Comptroller and Auditor General of India (CAG) conduct generally two types of audit: a. Transaction Audit/ Propriety Audit b. Accounts Audit conducted u/s 143 of the Companies Act, 2013. Main Accounts INDEX Page 20

Stages of Government Audit a. Transaction Audit/ Propriety Audit/ Accounts Audit • Commencement of audit activity by Government Audit Team • Issuance of Requisition • Issuance of Half Margin • Finalisation of Half Margin and issuance of Inspection Report for Propriety Audit and issuance of Audit Paras for Accounts Audit • Inspection Report (Propriety Audit) contains - Part 1A – Brief Introduction of the unit - Part 1B – Significant points - Part II – Other points b. Based on the Half Margins or points covered under Inspection Report, CAG may issue SOF (Statement of Facts). Further, based on management replies, CAG may issue draft paras where they are not satisfied with the replies. c. Draft Para replies have to be routed through Internal Audit- CO for submission to MOP&NG for onward communication to CAG. d. Next Stage is issuance of Para, once the Para has been approved then further comments, if any, are to be given to MOP&NG. Based on the comments, CAG may raise vetting remarks by way of the ATN (Action taken note) which again needs to be responded. Not more than 3 ATN are issued by CAG. Thereafter, the Para is either settled or referred to COPU (Parliament Committee on Public Sector Undertaking). Only CMD is authorised to appear before the COPU. In case of Para issued on accounts audit, the Para is discussed by the Principal Director with the Management before finalisation. Depending on the response/ management assurance, the para may be dropped. If the Para is approved by CAG to be published in the Audit Report (Commercial) for discussion in Parliament, the same is communicated to the Company and accordingly gets published in the Annual Report for that financial year. Period and the Authority for approval of replies are as follows: Sr. Observation Period in which Authority for Remarks No. Description reply are to be Approval of submitted Replies 1 Half Margin During Functional No replies to HM shall be (HM) Transaction Department Head entertained once the IR has been Audit issued. 2 Statement of 30 days from Unit Head or If an SOF has been issued, there is Facts (SOF) the date of Functional Head maximum probability that the point issuance not below the may be escalated to a Draft Para. rank of GM 3 Inspection 6 weeks from Unit Head or Prompt response to the paras is Report (IR) the date of Functional Head important. Main focus should be on issuance not below the the points covered in Part IB. rank of GM Main Accounts Page 21

Sr. Observation Period in which Authority for Remarks No. 4 Description reply are to be Approval of Note: submitted Replies Draft Para/ 4 weeks from Functional Para the date of Director for issuance onward submission to IACO All approved replies to be forwarded to audit coordinator at Divisional HO along with soft copy for onward submission to CAG Office. Periodic reporting of outstanding replies to Para's/ MIS format Sr. No. Unit Govt. Audit Para No Para particulars Reply Status Reference In addition, a report on contracts valuing above Rs.1 crore need to be furnished to Government Audit on a monthly basis, as per their format. All unsettled Govt. Audit paras should be communicated to Corporate Finance for information. In case of assurances given to Govt. Audit, the same along with the detailed query, replies and assurance given should be commutated Corporate Finance. 1.10 INTERNAL AUDIT COORDINATION Accounts Audit Internal Audit conducts audit during quarterly/ annual closings. Steps should be taken to resolve the issues to the satisfaction of the auditors. In case the issues are policy related and/ or unsettled, at Unit level, the matter is to be referred to divisional head office for getting further advice for resolution of the audit issue. Units/ Divisions shall ensure that all Internal Audit queries are replied well in time so that the MOM on quarterly/ annual accounts are jointly signed by Internal Audit and respective unit/ division at least one day before the target date of accounts for respective unit/ division. The MOM of the Internal Audit is to be sent along with the accounts to Corporate Finance. Propriety Audit Following is the sequence of various stages where Internal Audit raises proprietary issues before putting up to the Top Management: • Preliminary Observation Memo (POM) • Internal Audit Report (IAR) • Quarterly Report on Important points (QRIP) • Pre-MAC • MAC/ SAF (these points may also be referred to Audit Committee) Main Accounts INDEX Page 22

Annexure – 1.1 LIST OF DOCUMENT TYPES, CCA, ACCOUNTS TYPES, VENDOR TYPES AND SPECIAL G/L INDICATORS 1. List of document type and their description DOC Description Purpose Type AA Asset posting Asset posting AF Depreciation Postings Depreciation posting CZ Payment to customers Payment to customers DA Customer document Customer clearing DD Inter-customer clearing Customer clearing -diff CCA or transfer from one CCA to another DG Customer credit memo DI Reversal of Cr Customer credit note DR Customer invoice Reversal of Cr DX Customer E-collection Customer debit note DZ Customer payment E-collection ED Excise document Customer Cr GZ General payments Excise document JV Journal vouch entry Non oil Cr Transfer between one customer to another or KA Vendor document customer to vendor KR Vendor invoice Vendor clearing KZ Vendor payment Vendor invoice where PO is not involved LA Letter of authority Vendor payment by cheque LZ Internet payment Vendor LA OB Opening balances E-payments PP Payroll posting OB upload PR Price change Salary JV RE Invoice receipt Price change- thru MM posting RV Billing doc. Transfer Invoice verification- MIRO SA G/L account document Billing document SD Multiple customer/ vendor Journal entries involving only GL codes SL Salary JV Fleet/ DGS&D using YFU134 For employee payment other than salary SV Inter-customer clearing documents involving multiple employee vendors and GLs SZ Petty cash payments SV/TV balance upload (only SV/TV customers TZ Fund transfer with offsetting GL 2141050000 allowed) WA Goods issue Cash disbursement WE Goods receipt Imprest recoupment WI Inventory document Goods issue Goods receipt Mm posting- MIGO Main Accounts INDEX Page 23

DOC Description Purpose Type WL Goods issue/ delivery COGS entry WS Goods receipt COGS entry ZD Dishonoured/rev Dishonour of instruments instruments ZR Bank reconciliation Bank reconciliation documents ZX Billing doc. Transfer Vatable billing documents ZY Billing doc credit note SD route credit note 2. List of account types Account type Description A Assets D Customers K Vendors M Material S GL accounts 3. List of special GL indicators and their description Special GL indicator Description ) Price adjustment: delay in completion * Security deposit others 0 Secured capital advance-AF 1 Secured capital advance (projects) 2 Secured revenue advance 3 Secured sundry advance 4 Secured mobilisation advance 6 Unsecured capital advance-AF 7 Unsecured capital advance (project)/investment 8 Unsecured revenue advance 9 Four-wheeler loan- employee unsecured A Unsecured mobilisation advance B Unsecured sundry advance C Bank guarantee (vendors) D Security deposit - purchases E Security deposit works G Foreign tour advance H EMD - purchase I Transfer TA M Medical advance N Tour advance Main Accounts Page 24

Special GL indicator Description O LTC advance P Payment notice Q LC - noted item R Imprest to employees S Festival/ flood/ draught etc. V Office purchase advance W Letter of credit X EMD - works Y Recoverable expenses ~ Amount withheld from parties 4. List of Credit Control Area (CCA) and their description CCAR Description 1 Credit control area 0001 AOIL Credit control area AOIL BR01 Credit control area RPC- BRPL BR02 Credit control area CPC - BRPL BR03 Credit control area for IOC - BRPL BR04 Credit control area for P&S - BRPL BR05 Credit control area for MISC-BRPL C001 Credit control area for LUBES C002 Credit control area for LPG C003 Credit control area for A-LPG/CNG C004 Credit control area for MS & HSD C005 Credit control area for SKO C006 Credit control area for AVIATION C007 Credit control area for LDO C008 Credit control area for FO & LSHS C009 Credit control area for BITUMEN C010 Credit control area for NAPHTHA C011 Credit control area for RPC C012 Credit control area for CPC C013 Credit control area for LABFS C014 Credit control area for BENZENE C015 Credit control area for TOULENE C016 Credit control area for PROPYLENE C017 Credit control area for SULPHUR C018 Credit control area PARAFFIN WAX C019 Credit control area P&S - OTHER C020 Credit control area COMBINED PROD C021 Credit control area for MISC C022 Credit control area for RLNG C023 Credit control area for LUBES - CFA Main Accounts Page 25

CCAR Description C024 Credit control area for CRUDE C025 Credit control area LAB/ PTA C026 Credit control area - POLYMER C027 Credit control area - MEG/DEG/TEG C028 Credit Control Area for LNG C029 Credit Control Area PXPTA C030 Credit Control Area - Glycols C031 Credit Control Area for CNG C032 Credit Control Area for Misc PL Div C033 Credit Control Area Misc BD-E&P C034 Credit Control Area Misc BD-AE&SD C035 Credit Control Area for CBG C036 Credit Control Area - CGD Business DGSD Credit control area for MS & HSD EXPO Credit control area for EXPORTS GOIL Credit control area GOIL IBP1 CCA for IBP LUBES IBP2 CCA for IBP – SKO IBP3 CCA for IBP - MS & HSD IBPC CCA for IBP – CRYO IBPE CCA for IBP - Explosives Div. IPPL Credit control area for IPPL OMCC Credit control area for OMC T001 Credit Control Area for Trusts TRSP Credit Control Area -Transshipment 5. List of vendor type and their description Vendor type Description EMPL Employee NSIS ONET Service vendor GOVC One-time vendor GOVS Government bodies – Central Government bodies – State Main Accounts Page 26

Annexure – 1.2 LIST OF DEBIT/CREDIT NOTES Sr. Particulars Issue Action No. relates to 1 Debit to Units for Project All Div. Specific employees may be allocated/ tagged to cell expenses specific projects and accordingly their costs may be directly booked in the project itself. 2 Debit to Divisions for In case of same state or same registration, the Service Charges (Power, All Div. advices may continue to be exchanged. However, in Steam and Township etc.) interstate cases, only major items may be exchanged. 3 Debit to Mktg for Sampling REF/MKT No exchange of advice as not significant. charges 4 Employee Related Debit No need to transfer the advices. COIS will be asked notes (Hotel, Medical, All Div. to activate the employee number field while booking Transfer TA etc.) the expenditure so that incurring location can directly post into the employee no. 5 Transfer of Assets in All Div. Advices to be exchanged as it is likely that there will relation to employees be no GST implications since company has decided not to avail the GST credit on these assets. 6 Transfer of Employee loan All Div. Advices to be exchanged. As it is a money balances transaction, there is no GST implications. 7 Transfer of HO expenses to All Div. Not to be done. MIS to be exchanged for stock Units valuation impact, if any. 8 Transfer of CO expenses to All Div. Not to be done. MIS to be exchanged with RO and Registered office exclusion from stock valuation, if any. Working Capital Interest/ Advices to be exchanged. As it is a money transaction, there is no GST implications. 9 Exchange Fluctuation Cost All Div. Advices to be exchanged. As it is a money including ASI10 impact. transaction, there is no GST implications. Specific Loan Interest cost/ 10 Exchange Fluctuation All Div. debit notes to units / Divisions 11 Transfer of Derivative Cost All Div. Advices to be exchanged. As it is a money to Registered Office transaction, there is no GST implications. 12 Insurance cost transferred REF No exchange of advices. MIS to be exchanged, if by RD to Division/ units material. 13 Pipeline Insurance Cost for PL No exchange of advices. MIS to be exchanged, if crude Pipeline by RD to PL material. 14 R&D cost transferred by R&D No exchange of advices. MIS to be exchanged, if R&D centre to Divisions material. 15 Transfer of Product (TOP) MKT/BD Advices to be exchanged to Divisions - Mktg & BD Main Accounts INDEX Page 27

16 Debit for Terminalling REF/MKT No exchange of advices. MIS to be exchanged, if charges by RD to Mktg material. Debit from Pipeline for No exchange of advices. MIS to be exchanged, if 17 COT - Crude (75 % NRF), PL material. Product & Gas. 18 Inter Unit transfer of REF/MKT Advices to be exchanged but railway freight not to Product including freight be included 19 Inter Division transfer - REF/MKT Advices to be exchanged but railway freight not to Product and Freight be included Debit for Under recoveries/ Export loss 20 from Marketing to RD and REF/MKT No exchange of advices. MIS to be exchanged, if discounts / customer material. specific pricing for disposal of products Imported crude debit 21 notes to Refinery Units by REF Advices to be exchanged RHQ 22 Consumable (lubes, HSD MKT Advices to be exchanged etc) debit from MKTG. Expenses of cc 7200 Advices to be exchanged. No GST implication - within 23 transfer to MKTG. (AOD MKT state. Restructuring) Trust Income, expenses, Advices to be exchanged. As it is a money 24 claim etc debit/ credit REF transaction, there is no GST implications. note by RD Various debit note transferred to RHQ based No exchange of advices. Budget to be transferred to 25 on approval from All Div. incurring location by RHQ/Mkt HO directly. Corporate office including MOPNG expenses Foreign Payment and related expenditure Where SES/ Bill of Entry is separately made - to be 26 (transport, port clearing, REF exchanged. etc.) carried out at liaison Small expenses - not to be exchanged. offices/ RHQ 27 Debit for Bunker Charges MKT No exchange of advices. MIS to be exchanged, if from Mktg material. 28 Debit to PL for Self- REF/PL Advices to be exchanged as crude is outside GST. consumption of Crude 29 Debit to RD by BD for BD BD No exchange of advices. MIS to be exchanged, if Margin on RLNG material. 30 DR / CR to Mktg for day REF/MKT Advices to be exchanged. As it is a money end sweep of funds transaction, there is no GST implications. Main Accounts Page 28

Information in r/o actual 31 Cost of Crude Pipeline as is PL Information to be exchanged. No GST issues. being regularly Sent by PL- HO to RHQ/DIVISIONS 32 Transfer of Secretarial MKT No exchange of advices. MIS to be exchanged, if expenses from MD to RO material. 33 Sharing of IBP expenses MKT No exchange of advices. MIS to be exchanged, if with other divisions material. 34 Debit to other divisions by Cost - to be exchanged. IBP for margin on work MKT-IBP Margin - not to be exchanged. done for others Intra division transfer of No exchange of advices. MIS to be exchanged, if 35 margin/discount based on MKT material. customer control area Sharing of margin with No exchange of advices. MIS to be exchanged, if 36 refinery viz. PAF on MKT material. Bitumen etc 37 Upstream Discount for REF/MKT Advices to be exchanged purchase of crude 38 Payment of Coastal REF/MKT No exchange of advices. Existing practice of ITC to Movement is allocated to continue. units by Head Office 39 Transfer of rail freight/ REF/MKT No exchange of advices. Existing practice of ITC to port charges/ road freight continue. incurred by MD for RD Cost transfer towards 40 unabsorbed cross-country REF/MKT As of now, no exchange of advices. Refinery and 41 Pipeline interface REF/MKT Marketing Division to discuss the matter and take Transfer of cost towards final decision. contaminated product return. Invoicing for transfer of 42 mid-stream/ reformate REF/MKT Advices to be exchanged but freight not to be movement from one included refinery to another through MD 43 Audit fee All Div. No exchange of advices. 44 Debit for CISF & Territorial All Div. No exchange of advices. army expenses by RD to PL 45 Debit for Lease line by All Div. No exchange of advices. COIS Debit for retirement Advices to be exchanged. 46 Employees cost based on All Div. actuarial valuation Main Accounts Page 29

Information in r/o actual Information to be exchanged. No GST issue. Cost for all transactions Advices to be exchanged. which are proposed to be 47 dispensed with should be made available to respected PL Units by all Divisions. Debit to GR/DR/NRL by 48 BGR for Assam crude RD sharing Main Accounts Page 30

Annexure – 1.3 MATERIALITY THRESHOLDS S. Items Existing Materiality Limits Application No. threshold Principles 1. New 1% excluding Provision of 0.10% to be considered for Impairment certain all classes of trade receivables (without model for categories exception of any category) based on trade where no expected credit loss model. This is receivables provisions based on past history of last 3 years (Ind-AS-109) were made duly adjusted for expected eventualities. In addition, specific provision is also made based on actual events. 2. Prior period - (i) Prior period items exceeding Rs. 1 Based on overall items crore for each item shall be reported to materiality limits CO for further action (unit level). To The limit of Rs. 1 facilitate the capturing of these items, crore needs to be 3 GLs (Income, expenses and contra applied per item) have been created. transaction for refinery unit and (ii) Materiality limit for review of items state offices for restatement at overall level as well (company code as for Balance Sheet items having no level) P&L impact for is kept at Rs. 1000 Crore Entry needs to be and the same for individual item of P&L passed (for items is kept at Rs. 500 Crore. Beyond the above sub limit) threshold, items may further be Auditors to certify evaluated qualitatively for con code wise total determination/ applicability of amount and net restatement. impact on profit/ assets / liabilities and This limit shall be applied to company details to be sent to as a whole. CO along with annual accounts. (iii)Post examination overall prior Period items reported, the divisions shall be advised for the required changes, if any. 3. SD - (i) For SDs up to Rs. 10 lakh (except R2 received/Paid- cases) in each case, no requirement of fair valuation fair valuation and income deferment and related (ii) In R2 cases, all cases needs to be deferment discounted Main Accounts INDEX Page 31

4. Spares (items - Spares having cost of Rs. 10 lakh and - more to be considered for of spares capitalisation having useful life of more than one year and to be capitalised as per Ind-AS) 5. Provisioning 5% 5% to be continued No change to be All spares-NIL on stores made Straight lining to be done for cases 6. Spares- Insurance exceeding 10% P.a. The change is residual value spares-0% Leases except land and/or building effective from lease where the annual lease payment is upto Rs 1 lakh. For this purpose, 01.04.2015. original lease payment at the inception 7. Straight lining - of the contract i.e. without escalation The change is of lease rentals during the term of the contract is to be considered. effective from Rs. 5 lakh to be followed 01.04.2015. The Revised- Rs. 50 Lakh in each case same limit is Rs. 5 Lakh in each case continued after implementation of Ind-AS-116 considering materiality. 8. Leases- Low - - value items 9. Prepaid Rs. 5 lakh No change to be expenses made. . 10. Contingent Rs. 5 lakh This threshold is liability and effective from commitments 01.04.2015 11. Liability for Rs. 1 Lakh This threshold is unmeasured effective from revenue 01.04.2015 expenses There would be no adjustment of LSC advances upto Rs,.5 lac The same limits may be applied to Main Accounts Page 32

12. Floor stock for Rs. 5 lakh Rs. 5 lakh Material in transit as chemicals/cata well. lysts and other No change to be items made. Main Accounts Page 33

Annexure – 1.4 GUIDANCE ON SPECIFIC TOPIC AND DISCLOSURES {A} ACCOUNTING STANDARD (IND-AS) AND ACCOUNTING RELATED 1. ONE TIME/ NEW ITEMS OF MORE THAN ` 100 CRORE In case of any one time/ new item of more than ` 100 crore proposed to be accounted in any quarterly/ annual closing (e.g. reversal of any past liability, providing of any liability on account of losing any court case, etc.), the details along with the latest developments of the transaction shall be intimated to Corporate Finance beforehand. 2. ACCOUNTING FOR GST Goods and Services Tax (GST) has been implemented w.e.f 01.07.2017 and is also applicable on certain petroleum products. In view of this, Divisions should ensure that the provisions of GST are properly complied along with proper and complete accounting for the same including input tax credit. Various circulars/ instructions have been issued by CO-Taxation and CO-HR on GST implications which needs to be complied while finalising accounts for the current period. 3. SALE OF CRUDE THRU JOINTLY CONTROLLED OPERATIONS IOCL has interest in many upstream blocks in the form of jointly controlled operations. As per accounting standard own share of the sale made by jointly controlled operations needs to be accounted as sales in the IOCL books and purchase is also in the IOCL books, these transactions needs to be routed thru Interdivisional TOP route for proper depiction and netting off the purchase/sales transactions at corporate level. For this purpose, new interdivisional TOP GL’s has been opened separately. Further, since this is also an Inter-segmental transaction, appropriate disclosure also needs to be given in segment reporting for this transaction. 4. LIABILITY TOWARDS ‘UNAVAILED LTC/LFA’ FOR EMPLOYEES Actual Liability for the LTC / LFA due for completed blocks shall be provided by divisions based on latest actual salary / entitlements. As the LFA is credited in advance to the employee’s account and the service period completion is 2 years (i.e. 8 quarters), the balance un-encashed liability based on the current salary shall be prorated into eight quarter and liability is booked for the completed quarters. The old provisions recognised in the earlier quarters of the current block shall be reversed. In other cases where additional LTC is allowed e.g. NE LTC or any other block is followed, same methodology is to be followed for liability/ expenses bookings for the quarter/ period. Main Accounts INDEX Page 34

5. ACCOUNTING TREATMENT OF DISCOUNTS RECEIVABLE FROM ONGC/GAIL/OIL/CPCL TOWARDS UNDER-RECOVERIES: Accounting of discount shall be done based on the latest GOI directives. Currently, no upstream discount is to be considered and under recovery on PDS kerosene is to be accounted on accrual basis as claim from GOI. 6. PROVISION FOR STAMP DUTY IN RESPECT OF LAND & BUILDINGS FOR WHICH TITLE / LEASE DEEDS ARE PENDING FOR EXECUTION / RENEWAL. Provision in respect of stamp duty on land and buildings for which title deeds / lease deeds are pending for execution / renewal should be made initially at the time of entering into the contracts or due date of renewal on the basis of best estimate available. In other words, provision for stamp duty should be made at the rates prevailing at the time of entering into the contract or due date of renewal. Subsequent updation of the provision of stamp duty should be made when the liability is frozen either through the demand letter from the authority with whom the title / lease deeds is to be executed or payment made whichever is earlier. 7. INCLUSION OF STATUTORY TAXES & DUTIES UNDER \"CAPITAL COMMITMENT\". All the applicable taxed and duties should be included while disclosing the capital commitments in the financial statements. 8. TREATMENT OF EXCHANGE DIFFERENCES ON FOREIGN CURRENCY BORROWINGS (APPLICABILITY OF PARA 46A OF ACCOUNTING STANDARD – 11): Divisions are requested to account for the foreign exchange variation on long term monetary items in accordance with Para 46A of AS 11 and clarification issued thereon by MCA as per existing practice on long term monetary items only in respect of loans taken upto 31.03.2016. Refineries Division should ensure that the debit notes raised on Marketing Division towards exchange loss should clearly indicate the category under which such exchange loss should be accounted in line with the above guidelines 9. RECONCILIATION OF SALE OF FIXED ASSETS Divisions are requested to prepare a reconciliation of sale of Fixed Assets during the year in line with the existing guidelines in this regard. 10. RECONCILIATION OF PROVISION ON CAPITAL ADVANCES, STORES, TRADE RECEIVABLES, LOANS AND ADVANCES, INVESTMENTS ETC. In respect of provisions made for capital advances, stores, trade receivables, loans and advances, investments etc. Divisions are requested to ensure that the amount of provision made during the year (net of amount written back) tallies with the opening and closing figures Main Accounts Page 35

of the relevant provisions appearing in the balance sheet. Divisions are requested to ensure that provision in respect of each item is separately depicted in Other Operating Income, Other Income and Other expenses. 11. WRITING OFF OF DOUBTFUL DEBTS, ADVANCES AND CLAIMS INCLUDING ON CAPITAL ACCOUNT AND OBTAINING APPROVAL FOR FRESH PROVISIONS. Divisions to expedite collection of the doubtful receivables/advances or alternatively process write-off note for approval of the competent authority. As advised earlier, Divisions to obtain the approval of the Competent Authority at the stage of making doubtful provision itself in respect of receivables considered doubtful of recovery. 12. ACCOUNTING TREATMENT OF SPENT CATALYST Treatment of spent catalyst would depend on its initial capitalisation which can be one of the following: a. As a separate component as per the componentisation guidelines or b. Not as a separate component. Where the spent catalyst was separately componentised, it should be shown under Non- current assets held for sale provided it meets the prescribed criteria under Ind-AS-105. In such cases, if the carrying value of the catalyst is less than fair value less cost to sale, such spent catalyst shall be brought down to the fair value less cost to sale, by providing adequate provision in books. Where spent catalyst was not separately componentised, it should be shown under Note -8 in Gold/ Other precious metal by crediting the chemicals and consumables at the estimated cost at the time of procurement. In such cases, the above cost should be compared with the NRV for working out the provision for diminution, if any. For calculating Fair value or NRV as above, processing cost should be reduced from the Nobel Metal value which should be taken from latest PO placed for processing/extraction of spent catalyst. In both the cases, if noble metal is extracted it should always be shown under Note 8 Other Assets as Gold/ Other precious metal. 13. VALUATION OF INVENTORY - CALCULATION OF NET REALISABLE VALUE (NRV) Average of subsequent 7 days sales/prices are to be considered, for the purpose of determining NRV for valuation of inventory. 14. CAPITALISATION OF GENERAL BORROWINGS No Interest on general borrowings is to be capitalised except when specifically instructed by CO. Main Accounts Page 36

15. ACCOUNTING AND DISCLOSURE OF E&P COSTS Business Development group is required to account for the E&P expenses in line with the latest Guidance Note on Accounting for Oil and Gas Producing Activities (Ind AS) issued by ICAI in 2016. 16. ACCOUNTING OF HIGH SEA SALES AND PURCHASE TRANSACTIONS In line with the opinion of Expert Advisory Committee of ICAI in respect of accounting of High Sea sale and purchase transactions made with OMC’s, these sale/purchases are to be recorded at the exchange rate prevailing on the date of endorsement of Bill of Lading. Any subsequent foreign exchange fluctuations are to be treated as Exchange Gain/Loss. 17. ACCOUNTING OF FIXED ASSETS RETIRED FROM ACTIVE USE As per existing guidelines, assets retired from active use and held for disposal shall be transferred to “Assets held for Sale” and such assets shall be valued at lower of WDV or NRV. 18. RECLASSIFICATION OF RUNNING PAYMENTS UNDER LSTK CONTRACTS FROM ADVANCES FOR CAPITAL EXPENDITURE TO CAPITAL WORKS-IN-PROGRESS Consequent to the opinion dated 16.04.2014 obtained by Refinery Division from Koura & Co. on \"Ownership of goods in LSTK Contracts\", all running payments under LSTK contracts (i.e. Lump sum EPC Contracts) should be treated as CWIP instead of their erstwhile treatment as Capital Advances. However, it may be noted that all advances in nature of Mobilisation advance/Financial Assistance or given against placement of Purchase orders for critical tagged items which are recoverable from the contractor/vendor, shall continue to be treated as Capital Advance. 19. ALLOCATION OF FINANCE COST ON LOANS TAKEN TO FINANCE WORKING CAPITAL The ratio to be considered by Registered Office for allocation of finance cost on all working capital loans (including long term specific loan) is as under: Ratio Total Refinery Pipeline Marketing R & D B D Ratio 100.00% 41.00% - 56.00% - 3.00% Divisions to ensure that the above ratio is used for allocation of finance cost for all the quarters unless the same is revised. Also, Refinery Division should also give cost of specific long-term working capital loans taken by refinery to registered office for allocation. Accordingly, the FCMITD pertaining to the above long-term specific working capital loan shall also be transferred by Refinery Division to Registered office thru natural heads and the same shall be booked in Registered office books and shall not be allocated to divisions. This accounting of creation and amortisation of FCMITDA on long term loans for working capital Main Accounts Page 37

shall be done only for the loans taken upto 31.03.2016 as per the option exercised by the company under Ind-AS. Further to the above, the cost of hedging of borrowings should also be booked/ allocated in line with the borrowing cost on the relevant loans. In other words, hedging cost on specific loans shall be booked by the division for which the loan has been taken and for all working capital loans (including long term specific loan), hedging cost is to be pooled in registered office in natural head and it shall be in-turn allocated back to all division in the above ratio by registered office thru natural heads. 20. NEW GL IMPLEMENTATION New GL is implemented in SAP where some additional dimensions are available namely Business Area, Profit Centre and Segments w.e.f 01.04.2018. Divisions to ensure that the financial statements for these new dimensions are also correct and matching before finalising and submitting the accounts for current period. Divisions should also ensure that the segment information coming from SAP/ PACE (with combination of profit center) should also correct and matching with the segmental information compiled and submitted to CF. Further, as decided, divisions should ensure regular clearing of open items so as to ensure that outstanding open items are minimum at any reporting date. 21. SEBI (LODR) Amendment – SEBI had inserted a new section 33(3)(i) in SEBI (LODR) Regulations: “The listed entity shall disclose, in the results for the last quarter in the financial year, by way of a note, the aggregate effect of material adjustments made in the results of that quarter which pertain to earlier periods.” It means that listed entity shall disclose the aggregate effect of material adjustments made in current quarter which pertains to earlier periods (up to 9M of FY 2019-20) by way of a note. This notification will be applicable from annual closing FY 2019-20 onwards. Accordingly, all divisions Page 3 of 10 are advised to comply with the requirement and provide to CF the impact of material adjustment above Rs. 5 Lakh made in current quarter in the following format: Node Head Balance before Adjustment Adjusted Reason adjustment Balance 22. HEDGE ACCOUNTING Company has adopted hedge accounting for qualifying hedge transactions entered on or after 01.04.2018. In this context Hedge Accounting (with necessary documentation) are to be carried out in respect of related currency and commodity forwards hedging contracts undertaken by Treasury and International trade Groups following the guidelines/ instructions already provided in this regard. Main Accounts Page 38

{B} DISCLOSURE RELATED 23. DISCLOSURE ON EXPORT OBLIGATION UNDER EXPORT PROMOTION CAPITAL GOODS (EPCG) LICENSE Refineries Division is requested to ensure that the export obligation under the EPCG Scheme together with its financial impact should be suitably disclosed under Commitments as on the reporting date. The accounting of the same needs to be done in line with the Ind-AS requirements and clarification given in this respect. Further, divisions shall review the export obligation at each reporting date from the perspective of its fulfillment. In case the non-fulfillment of export obligation is probable, then the liability for the same shall be provided with corresponding impact in Fixed Assets, Govt. grant recognised or provisions as the case may be. 24. DISCLOSURE FOR CLAIMS BOOKED BUT NOT PHYSICALLY LODGED WITH THE DEPARTMENT Refineries Division should ensure that statutory claims upto the reporting date are physically lodged and in case, any claims upto the reporting date have not been physically lodged, the same shall be suitably disclosed in Other Assets. {C} COMPLIANCE RELATED 25. COMPLIANCE IN RESPECT OF ASSURANCES GIVEN TO STATUTORY AUDITORS / INTERNAL AUDIT / GOVERNMENT AUDIT ON THE FINANCIAL STATEMENTS Divisions should ensure that wherever assurances were given to Statutory/ Internal Auditors/ CAG on the financial statements, necessary action has been taken for all the issues particularly for the issues where corrective action was assured up to the reporting period. Assurances given to Statutory/Internal auditors on quarterly accounts during previous year should also be complied with. Divisions are advised to specifically reply to Govt. Audit on compliance of assurances given along with key supporting documents (SAP documents or otherwise) and provide a copy of the same to corporate finance as well as to local Govt. Audit team when they come for Phase-II audit of divisions/ units. 26. COMPLIANCE IN RESPECT OF OBSERVATIONS MADE BY STATUTORY AUDITORS AT THE TIME OF LIMITED REVIEW OF THE FINANCIAL RESULTS AND ACTION POINTS ARISING OUT OF IDFM MINUTES RELATING TO CLOSING OF ACCOUNTS. Divisions should ensure compliance of observations made by the Auditors at the time of Limited Review of the quarterly financial results and action points arising out of IDFM minutes / Statutory Auditors Meet relating to closing of accounts. 27. COMPLIANCE OF COMPANIES (AUDITOR’S REPORT) ORDER, 2016 Divisions to ensure that necessary action is taken for compliance of CARO in all respects for the financial year. Divisions are required to prepare status of statutory dues including the cases which have been classified as ‘Remote’. Main Accounts Page 39

28. CEO/CFO CERTIFICATION AS PER REGULATION 33 OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 As per regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, before the Financial Results are placed before Board, the Chief Executive Officer and Chief Financial Officer of the company has to certify that the financial results do not contain any false or misleading statements / figures and do not omit any material fact, which may make the statements or figures contained therein misleading. Similar certificate is to be sent by respective Divisions duly signed by Concerned Director and Finance head of the Division addressed to Chairman and Director (Finance). Divisions may please ensure that this certificate, along with the checklist as finalised for current financial year, is sent along with the Accounts to Corporate Finance. 29. DIRECTORS' RESPONSIBILITY STATEMENT UNDER SECTION 134 OF COMPANIES ACT Divisions are required to provide a certificate signed by Concerned Director and Finance head of the Division addressed to Chairman and Director (Finance) covering all the aspects to be covered in Directors' Responsibility Statement as specified section 134(3)(c) of Companies Act, 2013. Divisions may please ensure that this certificate for each financial year, is sent along with the Accounts to Corporate Finance. Following two points are additionally added in section 134 (5) of Companies Act, 2013: (e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Divisions should ensure that the above two points are also covered in the certificate. 30. INTERNAL FINANCIAL CONTROL Section 143(3)(i) of the Companies Act 2013 requires statutory auditors to report on the internal control over financial reporting (ICOFR) as on the reporting date. To establish the operating effectiveness of internal financial control, various Risk Control Matrix (RCM) / Checklist has been finalised which has also been roll out in SAP effective third quarter of current year. Divisions should ensure that all processes are adequately approved in SAP thru T-Code “YFIFC” in SAP. The Annual Certificate for Compliance of IFC signed by divisional finance heads to be submitted to Divisional Internal Audit for their independent evaluation and verification. The Internal Audit may submit their report to comment upon the IFC compliance for the company which needs to be appraised to Audit Committee / Statutory Auditors as may be required. Divisions to ensure that above certification is supported by documentary evidence wherever applicable. Main Accounts Page 40

{D} OTHER GUIDELINES 31. CAPITALISATION OF PROJECTS Divisions to ensure that all capitalisation of projects etc. during the quarter is given effect in the accounts in line with the existing guidelines. Wherever capitalisation involved is more than ` 50 crores for a project, the same should be put-up to the Inter-Divisional Committee for review. Details in the required format should be sent to capitalisation committee members and CO within 15 days of the end of the quarter. Further, for review of proposals between ` 25 crore to ` 50 crore, an Intra Divisional committee of members in grade “F” and above shall be constituted in Refinery, Marketing and Pipelines Division having one member from finance of respective divisional head quarter, one from Internal Audit department and one from respective region/ unit to which the asset pertains. 32. PROVISION FOR TAXATION Marketing Division should work out the Provision for Taxation (including Deferred Tax) for the current year after considering all allowances/ disallowances (e.g. 80IA/32AC etc.) and forward the same along with the accounts of Registered Office. The impacts arising out of Income Computation and Disclosure Standards and Ind-AS adjustment as of 01.04.2015 should also be considered while computing the tax liability. It is advised to send the computations to CF beforehand. For this purpose, any data required from division may be sought and taken from them in a timely manner. 33. PROVISION OF SECTION 40 (a)(i)(a) OF THE INCOME TAX ACT RELATING TO TDS PROVISION ON OUTSTANDING LIABILITY Divisions should ensure the compliance of guidelines issued by the Taxation Cell of Marketing H.O. vide IOM ref AC/IT/TDS dated 23rd March 2007 in this regard. Further, divisions should ensure that every effort should be made to receive the bills for the work done upto the reporting date within the time frame so that provisional liabilities can be identified to vendors and TDS can be deducted and deposited with Income Tax in time. 34. REGROUPING SCHEDULE Divisions are required to provide details of all previous year figures regrouped along with the accounts in the following manner: Node Head Balance as per Regrouping Regrouped Reason for Audited Accounts Balance regrouping 35. GUIDELINES RELATED TO TREASURY, CO Information relating to Treasury Group, shall be circulated by CO at every quarter end. 36. EXCHANGE RATES Exchange rates to be considered for closing of accounts shall be circulated by CO at every quarter end. Main Accounts Page 41