Indian Oil Corporation Limited 3rd Integrated Annual Report 61st Annual Report 2019-20

About the Report

NOTES TO FINANCIAL STATEMENTS NOTES TO FINANCIAL STATEMENTS
Note - 40 : FAIR VALUES (Contd...) Note - 40 : FAIR VALUES (Contd...)
The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value Reconciliation of fair value measurement of Assets and Liabilities under Level 3 hierarchy of Fair Value measurement:
hierarchy together with a quantitative sensitivity analysis as at 31 March 2020 and 31 March 2019 are shown below: (₹ in Crore)

Chairman’s Desk
From the
FVTOCI Assets
Significant Range Description
Valuation Sensitivity of the Unquoted Equity
Description unobservable (weighted
technique input to fair value Shares
inputs average)
1% increase would result in decrease in fair Balance as at March 31, 2019 1,402.05
March 31, 2020:
Income Equity value by ₹ 0.94 Crore Addition 92.24
25.00% - 28.00%

About IndianOil
approach of Volatility 1% decrease would result in increase in fair
Unquoted Equity (26.40%)
valuation based value by ₹ 0.96 Crore Redemption/ Sales -
I Instrument in Lanzatech
on Option Increase by 1 year decreases the fair value Fair Value Changes (283.74)
New Zealand Ltd. Expected March 31, 2020:
pricing by ₹ 7.43 Crore and Decrease by 1 year
model (OPM) time to 2 Years- 4 Years Exchange Difference 35.48
increases the fair value by
liquidity event (3 Years)
₹ 10.51 Crore. Transfer in 151.90

Description of Capitals
March 31, 2020: Transfer out -
0.01x increase/ (decrease) in Revenue
0.49x - 0.53x
Multiple would result in increase/ Balance as at March 31, 2020 1,397.93
Revenue (0.51x)
(decrease) in fair value by:
Haldia Petrochemical Market Multiple March 31, 2019:
March 31, 2020: ₹4.20 crore/ ₹(4.10) crore
Limited (included under Approach with 0.80x - 0.84x II. Disclosures relating to recognition of differences between the fair value at initial recognition and the
March 31, 2019: ₹4.50 crore/ ₹(4.40) crore
II FVTOCI assets in unquoted equal weights (0.82x) transaction price
equity instruments- Refer to Revenue and 0.1x increase/ (decrease) in EBITDA Multiple
Note-4 for Carrying Value) EBITDA Multiple March 31, 2020: In the following cases, the Company has not recognized gains/losses in profit or loss on initial recognition of financial assets/

Board of Directors, etc.

would result in increase/ (decrease) in fair
EBITDA 5.6x - 6.0x (5.8x) financial liability, instead, such gains/losses are deferred and recognized as per the accounting policy mentioned below.
value by:
multiple March 31, 2019:
March 31, 2020: ₹4.30 crore/ ₹(4.20) crore Financial Assets
5.5x - 5.9x (5.7x)
March 31, 2019: ₹7.50 crore/ ₹(7.40) crore
1. Loan to Employees
0.1x increase (decrease) in Revenue Multiple
March 31, 2020:
Revenue 1.2x - 1.6x (1.4x)
would result in increase (decrease) in fair As per the terms of service, the Group has given long term loan to its employees at concessional interest rate. Transaction
value by: price is not fair value because loans are not extended at market rates applicable to employees. Since implied benefit is
Ceylon Petroleum Storage Multiple March 31, 2019:
March 31, 2020: ₹10.77 crore/ ₹(10.73) crore on the basis of the services rendered by the employee, it is deferred and recognized as employee benefit expense over
Terminals Limited 0.9x - 1.3x (1.1x)

Directors’ Report
Market March 31, 2019: ₹11.10 crore/ ₹(11.00) crore the loan period.
III (included under FVTOCI
Approach 0.5x increase (decrease) in EBITDA Multiple
assets in unquoted equity March 31, 2020: 2. PMUY loan
instruments) would result in increase (decrease) in fair
EBITDA 4.3x - 6.3x (5.3x)
value by: The PMUY loan is the interest free loan given to PMUY beneficiaries towards cost of burner and 1st refill. The loan is
multiple March 31, 2019:
March 31, 2020: ₹13.37 crore/ ₹(13.33) crore interest free and therefore transaction price is not fair value. The difference between fair value and transaction price is
4.5x - 6.5x (5.5x)
March 31, 2019: ₹13.40 crore/ ₹(13.50) crore
accumulated in Deferred expenses and amortized over the loan period on straight line basis in the statement of Profit

Discussion & Analysis

Petrocarababo S.A. and March 31, 2020: and loss.
1% increase /(decrease) in the Discount

Management’s
Carabobo Ingenieria 28.0%.-32.0%
Rate would result in (decrease) /increase in 3. Security Deposits
Y Construcciones S.A. (30.0%)
IV DCF method Discount Rate fair value by:
(included under FVTOCI March 31, 2019: The security deposit is paid to landlord in relation to lease of land. The security deposit is interest free and therefore
March 31, 2020: ₹(12.11) crore/ ₹14.38 crore
assets in unquoted equity 33.0% -37.0%
March 31, 2019: ₹(8.70) crore/ ₹8.70 crore transaction price is not fair value.The difference between fair value and transaction price is accumulated in Deferred
instruments) (35.0%)
expenses and amortized over the loan period on straight line basis in the statement of Profit and loss till March 31, 2019
Phinergy Ltd (included 1% increase/ (decrease) in the Discount prior to introduction of IND AS 116.
March 31, 2020:
under FVTOCI assets Rate would result in (decrease) increase in

Responsibility Report
V DCF method Discount Rate 27.0%-31.0% Financial Liabilities
in unquoted equity fair value by:
(29.0%)

Business
instruments) March 31, 2020: ₹(7.48) crore/ ₹8.73 crore
1. Security Deposits
In case certain deposits payable to deceased employees under R2 option and security deposits received in relation to
Unquoted Equity Instruments carried at FVOCI includes following investments for which Carrying Value (₹ in Crore) some revenue expenses contracts, transaction price is not considered as fair value because deposits are interest free.
sensitivity disclosure are not disclosed: The difference between fair value and transaction price is accumulated in Deferred income and amortized over the
March 31, 2020 March 31, 2019
tenure of security deposit on straight line basis to statement of Profit and Loss.

Corporate Governance
Mer Rouge Oil Storage Terminal Company Limited 6.07 6.27

Report on
BioTech Consortium India Limited 0.10 0.10
MRL Industrial Cooperative Service Society 0.01 0.01
Woodlands Multispeciality Hospital Limited 0.10 0.10
International Cooperative Petroleum Association, New York 0.02 0.02

Financial Statements
Consolidated
396 Financial Statements Financial Statements 397