Mar 31, 2019
48. Contingent liabilities, Contingent Assets and commitments (to the extent not provided for)
48.1 Contingent Liabilities & Contingent Assets:
48.1.1 Claims against the Company/ disputed demands not acknowledged as debt:-
(Rs. in million)
Particulars |
As at March 31, 2019 |
As at March 31, 2018 |
|
A |
In respect of Company |
||
I. |
Income Tax |
120,023.40 |
94,638.09 |
II. |
Excise Duty |
2,784.65 |
10,262.65 |
Ill |
Custom Duty |
800.25 |
311.45 |
IV |
Royalty (Note no. 48.1. b) |
496.82 |
496.82 |
V |
Cess |
6.57 |
6.57 |
VI |
AP Mineral Bearing Lands (Infrastructure) Cess |
3,117.08 |
2,909.76 |
VII |
Sales Tax |
22,486.44 |
18,782.20 |
VIII |
Service Tax (Note no 48.1.b) |
29,936.46 |
16,194.20 |
IX |
GST (Note no 48. l.b) |
25,575.53 |
10,141.96 |
X |
Octroi and other Municipal Taxes |
66.89 |
66.89 |
XI |
Specified Land Tax (Assam) |
5,199.72 |
4,865.55 |
XII |
Claims of contractors (Incl. LAQ) in Arbitration / Court |
180,698.83 |
134,773.58 |
XIII |
Employees Provident Fund |
66.35 |
66.35 |
XIV |
Others |
26,226.58 |
45,243.31 |
Sub Total (A) |
417,485.57 |
338,759.38 |
|
B |
In respect of Joint Operations |
||
I. |
Income Tax |
8.91 |
8.91 |
II. |
Excise Duty |
- |
4.17 |
III |
Custom Duty |
232.42 |
77.54 |
IV |
Royalty |
116.06 |
- |
V |
Sales Tax |
2,621.66 |
2,621.66 |
VI |
Service Tax and GST (Note no 48.1.b) |
30,941.66 |
17,229.54 |
VII |
Claims of contractors in Arbitration / Court |
7,977.04 |
6,880.09 |
VIII |
Others (Note no. 48.1. c) |
144,985.70 |
113,064.90 |
Sub Total (B) |
186,883.45 |
139,886.81 |
|
Total (A B) |
604,369.02 |
478,646.19 |
a. The Company''s pending litigations comprise claims against the Company and proceedings pending with Tax / Statutory/ Government Authorities. After review of all its pending litigations and proceedings, the Company has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material impact on its financial position. Future cash outflows in respect of the above are determinable only on receipt of judgments/ decisions pending with various forums/ authorities.
b. The Company had received demand orders from Service Tax Department at various work centres on account of Service Tax on Royalty, appeals against such orders have been filed before Tribunal. The Company had also obtained legal opinion as per which the Service Tax/GST on Royalty is not applicable. Meanwhile, the Company also received demand order dated January 1, 2019 on account of GST on Royalty in the State of Rajasthan against which the Company filed writ (4919/2019) before Hon''ble High Court of Rajasthan. The Hon''ble High Court of Rajasthan heard the matter on April 3, 2019 and issued notice to Department with a direction that no coercive action shall be taken against the Company for recovery till next date of hearing on April 16, 2019 deferred to May 9, 2019 and further deferred to July 16, 2019. The Company also filed writ of mandamus before Hon''ble High Court of Madras seeking stay on the levy of GST on royalty. The Hon''ble High Court of Madras heard the matter on April 3, 2019 and the Department has been allowed to file counter submission and to finalize the representation (under-protest letter) given by Company to the Department. The total estimated amount (including penalty and interest up to March 31, 2019) works out towards Service Tax is Rs.38,616.33 million and GST is Rs.37,956.77 million. Since the Company is contesting the demand, it has been considered as contingent liability. Further, as an abundant caution, the Company has deposited Service Tax and GST along-with interest under-protest amounting to Rs.13,725.72 million and Rs.28,065.77 million respectively.
c. The Company, with 40% Participating Interest (PI), is a Joint Operator in Panna-Mukta and Mid and South Tapti Fields alongwith Reliance Industries Limited (RIL) and BG Exploration and Production India Limited (BGEPIL) each having 30% PI, (all three together referred to as "Contractors") signed two Production sharing Contracts (PSCs) with Government of India (Union of India) on December 22, 1994 for a period of 25 years. In December 2010, RIL & BGEPIL (JV Partners) invoked an international arbitration proceeding against the Union of India in respect of certain disputes, differences and claims arising out of and in connection with both the PSCs pursuant to the provisions of Article 33 of the PSCs and UNCITRAL Rules, 1976. The Ministry of Petroleum and Natural Gas (MoP&NG), vide their letter dated July 4, 2011, had directed the Company not to participate in the arbitration initiated by the JV Partners. MoP&NG has also stated that in case of an arbitral award, the same will be applicable to the Company also as a constituent of the contractor for both the PSCs .
Directorate General of Hydrocarbons (DGH), vide letters dated May 25, 2017 had informed the Company that on October 12, 2016, a Final Partial Award (FPA) was pronounced by the Tribunal in the said arbitrations. However, details of proceedings of the FPA are not available with the Company. DGH, vide their letter dated May 25, 2017 and June 04, 2018, marked to the Contractors, had directed the payment of differential Government of India share of Profit Petroleum and Royalty alleged to be payable by Contractors pursuant to Governments interpretation of the FPA (40% share of the Company amounting to US$ 1,624.05 million, including interest upto November 30, 2016) equivalent to Rs.112,400.50 million @ Rs.69.21 (closing rate as on March 31, 2019). In response to the letters of DGH, the JV partners (with a copy marked to all Joint Venture Partners) had stated that demand of DGH was premature as the FPA did not make any money award in favour of Government of India, since quantification of liabilities were to be determined during the final proceedings of the arbitration. Further the award had also been challenged before the English Commercial Court (London High Court). Based on the above facts, the Company had also responded to the letters of DGH stating that pending the finality of the order, the amount due and payable by the Company was not quantifiable. In the view of the Company, any changes approved, if any, for increase in the Cost Recovery Limit (CRL) by the Management Committee (MC) as per the term of the PSCs the liability to DGH would potentially reduce.
The English Court has delivered its final verdict on May 2, 2018 following which the Arbitral Tribunal reconsidered some of its earlier findings from the 2016 FPA (Revised Award). The Government of India, BGEPIL and RIL have challenged parts of the Revised Award.
In January 2018, the Company along with the JV partners has filed an application with MC for increase in CRL in terms of the PSCs. The application has been rejected by MC. Pursuant to the rejection, the JV partners have filed a claim with Arbitral Tribunal.
DGH vide letter dated January 14, 2019 has advised to the contractors to re-cast the accounts for Panna-Mukta and Mid and South Tapti Fields for the year 2017-18. Pending finalization of the decision of the Arbitral Tribunal, the JV partners and the Company have indicated in their letters to DGH that the final recasting of the accounts is premature and the issues raised by DGH may be kept in abeyance.
Pending finality by Arbitration Tribunal on various issues raised above, re-casting of the financial statements and final quantification of liabilities, no provision has been accounted in the financial statements. The demand raised by DGH, amounting to US$ 1,624.05 million equivalent to Rs.112,400.50 million has been considered as contingent liability.
48.1.2 A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. During the normal course of business, several unresolved claims are currently outstanding. The inflow of economic benefits, in respect of such claims cannot be measured due to uncertainties that surround the related events and circumstances.
48.2 Commitments
48.2.1 Capital Commitments:
Estimated amount of contracts remaining to be executed on capital account:-i) In respect of Company: Rs.64,398.91 million (Previous year Rs.82,223.61 million).
ii) In respect of Joint Operations: Rs.179,574.32 million (Previous year Rs.2,753.09 million).
48.2.2 Other Commitments
(i) Estimated amount of Minimum Work Programme (MWP) committed under various ''Production Sharing Contracts'' with Government of India / Nominated Blocks:
a) In respect of NELP blocks in which the Company has 100% participating interest: Rs.2,941.23 million (Previous year Rs.2,750.40 million).
b) In respect of NELP blocks in Joint Operations, Company''s share: Rs.1,018.94 (Previous year Rs.2,581.97 million).
(ii) In respect of ONGC Petro additions Limited, a Joint Venture Company Rs.639.50 million (Previous year Rs.480.50 million) on account of subscription of Share Warrants with a condition to convert it to shares after a balance payment of Rs.0.25 per share.
(iii) The Company has entered into an arrangement for backstopping support towards repayment of principal and cumulative coupon amount for three years compulsorily convertible debentures amounting to Rs.77,780.00 million (previous year Rs.77,780.00 million) issued by ONGC Petro additions Limited and outstanding interest for the year ended March 31, 2019 amounting to Rs.5,117.73 million (Previous year Rs.4,670.19 million)
(iv) During the year 2017-18, the Company had acquired the entire 80% Participating Interest (PI) of Gujarat State Petroleum Corporation Limited (GSPC) along with operatorship rights, at a purchase consideration of US$ 995.26 million (Rs.62,950.20 million) for Deen Dayal West (DDW) Field in the Block KG-OSN-2001/3.The Company had also paid part consideration of US$ 200 million (Rs.12,650.00 million) for six discoveries other than DDW Field in the Block KG-OSN-2001/3 to GSPC towards acquisition rights for these discoveries in the Block KG-OSN-2001/3 to be adjusted against the valuation of such fields based on valuation parameters agreed between GSPC and the Company (Note no.46.1.9).
49. Quantitative Details
49.1 Production Quantities (Certified by the Management):
Products |
Unit |
Year ended |
Year ended |
March 31, 2019 |
March 31, 2018 |
||
Crude Oil |
MT |
24,231,087 |
25,434,914 |
Natural Gas |
000 M3 |
25,810,339 |
24,609,502 |
Liquified Petroleum Gas |
MT |
1,107,465 |
1,186,654 |
Ethane-Propane |
MT |
413,957 |
355,723 |
Ethane |
MT |
454,622 |
263,639 |
Propane |
MT |
209,984 |
194,017 |
Butane |
MT |
114,366 |
102,846 |
Naphtha |
MT |
1,174,938 |
1,176,294 |
SKO |
MT |
66,424 |
45,984 |
ATF |
MT |
17,521 |
5,924 |
LSHS |
MT |
22,013 |
21,779 |
HSD |
MT |
49,724 |
26,873 |
MTO |
MT |
4,438 |
5,593 |
Notes:
a) Production includes internal consumption and intermediary losses.
b) Crude oil production includes condensate of 1.485 MMT (Previous year 1.454 MMT). 49.2 Raw Material Consumed:
For production of Liquefied Petroleum Gas, Ethane / Propane, Naphtha, Superior Kerosene Oil, Low Sulphur High Stock, Aviation Turbine Fuel and High Speed Diesel.
(Rs. in million) |
|||||
Particulars |
Year ended March 31, 2019 |
Year ended March 31, 2018 |
|||
Unit |
Quantity |
Value at cost |
Quantity |
Value at cost |
|
Out of own production: |
|||||
Crude Oil |
MT |
66,156 |
1,200.94 |
81,789 |
1,106.95 |
Natural Gas |
000M3 |
9,02,239 |
5,840.22 |
881,154 |
6,121.51 |
Gas Equivalent Condensate |
000M3 |
4,13,220 |
1,906.67 |
421,647 |
2,302.51 |
Purchases |
|||||
Liquefied Natural Gas |
MT |
8,52,267 |
15,482.10 |
645,312 |
6,730.51 |
49.3 Consumption of Stores and Spare Parts:
(Rs. in million) |
||||
Particulars |
Year ended March 31, 2019 |
Year ended March 31, 2018 |
||
Amount |
% |
Amount |
% |
|
Imported |
10,379.19 |
17.88 |
13,935.68 |
28.31 |
Indigenous |
47,681.35 |
82.12 |
35,284.36 |
71.69 |
Total |
58,060.54 |
100.00 |
49,220.04 |
100.00 |
49.4 Value of Imports on CIF Basis:
(Rs. in million) |
||
Particulars |
Year ended March 31, 2019 |
Year ended March 31, 2018 |
Capital items * |
3,748.17 |
3,482.74 |
Stores and Spare Parts |
17,859.21 |
15,969.80 |
Total |
21,607.38 |
19,452.54 |
*Includes stage payments made against capital works. |
49.5 Expenditure in Foreign Currency:
(Rs. in million) |
||
Particulars |
Year ended March 31, 2019 |
Year ended March 31, 2018 |
Services |
188,364.91 |
167,992.28 |
Others |
3,617.95 |
1,254.58 |
Total |
191,982.86 |
169,246.86 |
49.6 Earnings in Foreign Currency:
(Rs. in million) |
||
Particulars |
Year ended March 31, 2019 |
Year ended March 31, 2018 |
Services |
2,867.94 |
826.40 |
FOB value of Sales |
29,408.53 |
33,644.25 |
Others |
1,947.73 |
1,053.86 |
Total |
34,224.20 |
35,524.51 |
50. Disclosure under Guidance Note on Accounting for "Oil and Gas Producing Activities" (Ind AS) 50.1 Company''s share of Proved Reserves on the geographical basis is as under
Particulars |
Details |
Crude Oil (MMT) |
Gas (Billion Cubic Meter) |
Total Oil Equivalent (MMTOE)# |
|||
As at March 31, 2019 |
As at March 31, 2018 |
As at March 31, 2019 |
As at March 31, 2018 |
As at March 31, 2019 |
As at March 31, 2018 |
||
Offshore |
Opening |
187.73 |
198.98 |
182.371 |
186.075 |
370.10 |
385.06 |
Addition |
19.64 |
4.94 |
46.843 |
14.903 |
66.48 |
19.84 |
|
Production |
15.01 |
16.19 |
19.738 |
18.607 |
34.75 |
34.80 |
|
Changes* |
(9.35) |
- |
(10.567) |
- |
(19.92) |
- |
|
Closing |
183.01 |
187.73 |
198.909 |
182.371 |
381.91 |
370.10 |
|
Onshore |
Opening |
179.21 |
183.30 |
145.562 |
142.583 |
324.77 |
325.88 |
Addition |
17.05 |
4.32 |
8.942 |
8.867 |
25.99 |
13.19 |
|
Production |
8.43 |
8.41 |
5.873 |
5.888 |
14.30 |
14.30 |
|
Changes* |
(47.22) |
- |
(25.554) |
- |
(72.77) |
- |
|
Closing |
140.61 |
179.21 |
123.077 |
145.562 |
263.69 |
324.77 |
|
Total |
Opening |
366.94 |
382.28 |
327.933 |
328.658 |
694.88 |
710.93 |
Addition |
36.69 |
9.26 |
55.785 |
23.770 |
92.48 |
33.03 |
|
Production |
23.44 |
24.60 |
25.612 |
24.495 |
49.05 |
49.08 |
|
Changes* |
(56.58) |
- |
(36.121) |
- |
(92.70) |
- |
|
Closing |
323.61 |
366.94 |
321.985 |
327.933 |
645.60 |
694.88 |
|
Refer note no. 4.2 (d) for procedure of estimation of reserves. |
50.2 Company''s share of Proved Developed Reserves on the geographical basis is as under:
Particulars |
Details |
Crude Oil (MMT) |
Gas (Billion Cubic Meter) |
Total Oil Equivalent (MMTOE)# |
|||
As at March 31, 2019 |
As at March 31, 2018 |
As at March 31, 2019 |
As at March 31,2018 |
As at March 31,2019 |
As at March 31,2018 |
||
Offshore |
Opening |
127.23 |
134.08 |
112.305 |
112.541 |
239.54 |
246.62 |
Addition |
20.76 |
9.35 |
55.613 |
18.371 |
76.37 |
27.72 |
|
Production |
15.01 |
16.20 |
19.738 |
18.607 |
34.75 |
34.80 |
|
Changes* |
(2.69) |
- |
(3.184) |
- |
(5.87) |
- |
|
Closing |
130.29 |
127.23 |
144.996 |
112.305 |
275.29 |
239.54 |
|
Onshore |
Opening |
133.03 |
137.85 |
89.556 |
94.438 |
222.59 |
232.29 |
Addition |
3.72 |
3.58 |
5.781 |
1.110 |
9.50 |
4.69 |
|
Production |
8.43 |
8.40 |
5.837 |
5.991 |
14.30 |
14.39 |
|
Changes* |
(24.83) |
- |
(14.963) |
- |
(39.79) |
- |
|
Closing |
103.49 |
133.03 |
74.500 |
89.557 |
177.99 |
222.59 |
|
Total |
Opening |
260.26 |
271.93 |
201.862 |
206.979 |
462.12 |
478.91 |
Addition |
24.48 |
12.93 |
61.395 |
19.481 |
85.88 |
32.41 |
|
Production |
23.44 |
24.60 |
25.612 |
24.598 |
49.05 |
49.20 |
|
Changes* |
(27.52) |
- |
(18.148) |
- |
(45.67) |
- |
|
Closing |
233.78 |
260.26 |
219.497 |
201.862 |
453.28 |
462.12 |
# MMTOE denotes "Million Metric Tonne Oil Equivalent" and for calculating Oil equivalent of Gas, 1000 M3 of Gas has been taken to be equal to 1 MT of Crude Oil.
* The changes shown above are due to migration from classification of Reserves under SPE-1997 guidelines to Petroleum Resource Management System (PRMS) during the financial year. As a result of the change, there is increase in depletion and impairment expenditure by Rs.5,909.70 million and Rs.1,781.43 million respectively during the year. The amount of the effect in the future years is not disclosed because estimating it is impracticable.
Variations in totals, if any, are due to internal summations and rounding off.
50.3 In Discovered Small Field (DSF) Bid Round - II (2018), 12 out of 17 contract areas falling in the Company''s acreages were awarded to other parties and 5 contract areas were awarded to the Company. Handing over process is currently underway. After completion of handing over, Reserves estimates pertaining to 12 contract areas are to be removed from the Company''s reserves. Out of these twelve contract areas awarded to third parties, entire reserve estimates of eight contract blocks having 0.19 MMT of contingent Resources (0.007 MMT in Proved Developed Reserves & 0.18 MM in Proved Reserves category) are likely to be removed from the Company''s reserves. For the remaining four contract areas there will be partial deletion / deletion from extension of pay sands of adjoining fields which is being worked out.
51. Disclosure pursuant to SEBI (Listing obligation and disclosure requirements) regulations 2015:
(Rs. in million) |
||||
Particulars |
Outstanding as at March 31, 2019 |
Maximum Amount Outstanding during the year 2018-19 |
Outstanding as at March 31, 2018 |
Maximum Amount Outstanding during the year 2017-18 |
Loans to Subsidiaries: * |
||||
i) ONGC Videsh Limited (OVL) * (Note no. 51.1) |
1,860.00 |
2,190.00 |
||
ii) Mangalore Refinery and Petrochemicals Limited (MRPL) (Note no. 51.2) |
18,856.90 |
18,856.90 |
25,714.10 |
|
Loan to Associate: |
Nil |
Nil |
Nil |
Nil |
In the nature of loans to Firms\ companies in which directors are interested: |
Nil |
Nil |
Nil |
Nil |
* Excludes Current account transactions. |
51.1 Loan to OVL is unsecured repayable within a notice period of minimum one year and carries no interest during the year 2017-18 till January 31, 2018. Thereafter, interest was charged @ 7.65% p.a. till March 31, 2018. During FY 2018-19, loan of Rs.1,860 million was drawn by OVL which carried interest @ 7.80% p.a. (based on SBIMCLR) and was fully repaid during the year.
51.2 Loan to MRPL carried interest @ G-Sec yield for 5-year tenor as on March 31, 2018 (as per FIMMDA) plus a spread of 40 (forty) basis points which amounts to 7.90% (previous year 7.17%) for financial year 2018-19. Interest rate shall be reset on 1st April every year by applying G-Sec yield for 5-year tenor, as per FIMMDA as on 31st March of the preceding financial year. Spread of 40 (forty) basis points over and above G-Sec yield for 5-year tenor shall continue to remain applicable for the entire tenure of the loan. The Loan was repayable quarterly in 28 equal installments. The repayment of loan had started from the last quarter of FY 2013-14. The Company can call these loans on notice of 90 days. MRPL can prepay whole or part of the loan to the Company as per its requirement. Based on Company requirement, the entire loan outstanding from MRPL as on March 31,2018 (Rs.18,856.90 million) has been repaid in FY 2018-19.
51.3 The Company has not advanced any money to its employees for the purposes of investment in the securities of the Company.
51.4 Investments by the ONGC Videsh Limited (OVL), loanee:
(Rs. in million)
Name of Subsidiary |
Year ended March 31, 2019 |
Year ended March 31, 2018 |
||
No of Shares |
Rs. in million |
No of Shares |
Rs. in million |
|
(a) ONGC Nile Ganga B.V. |
||||
Equity Shares |
||||
-Class A |
40 |
13,121.66 |
40 |
12,308.31 |
- Class B |
100 |
30,245.09 |
100 |
28,370.34 |
- Class C |
880 |
1,268.66 |
880 |
1,190.02 |
(b) ONGC Narmada Limited |
||||
Equity Shares |
20,000,000 |
10.75 |
20,000,000 |
10.08 |
(c) ONGC Amazon Alaknanda Limited |
||||
Equity Shares |
12,000 |
0.83 |
12,000 |
0.78 |
Preference Shares |
125,001,131 |
8,651.33 |
125,001,131 |
8,115.07 |
(d) Imperial Energy Limited (formerly Jarpeno Limited) |
||||
Equity Shares |
1,450 |
21,732.03 |
1,450 |
20,384.97 |
Preference Shares |
192,210 |
133,028.54 |
192,210 |
124,782.73 |
(e) Carabobo One AB |
||||
Equity Shares |
377,678 |
3,941.00 |
377,678 |
3,696.71 |
(f) ONGC (BTC) Limited |
||||
Equity Shares |
973,791 |
391.63 |
973,791 |
367.35 |
(g) Beas Rovuma Energy Mozambique Limited |
||||
Equity Shares |
7,680 |
112,836.29 |
7,680 |
105,842.10 |
(h) ONGC Videsh Rovuma Limited |
||||
Equity Shares |
50,000 |
3.46 |
42,000 |
2.73 |
(i) ONGC Videsh Atlantic Limited |
||||
Equity Shares |
2,040,000 |
141.19 |
2,040,000 |
132.44 |
(j) ONGC Videsh Singapore Pte. Ltd. |
||||
Equity Shares |
500,000 |
34.61 |
500,000 |
32.46 |
(k) Indus East Mediterranean Exploration Limited |
||||
Equity Shares |
15,035,000 |
3.12 |
- |
- |
51.5 Investments by the Mangalore Refinery and Petrochemicals Limited (MRPL), loanee:
(Rs. in million) |
||||
Name of Subsidiary |
As at March 31, 2019 |
As at March 31, 2018 |
||
No of Shares |
Rs. in million |
No of Shares |
Rs. in million |
|
(a) ONGC Mangalore Petrochemicals Limited |
||||
Equity Shares |
1085.13 |
14,876.28 |
957.62 |
13,346.23 |
52. Disclosure on Foreign currency exposures at the year-end that have not been hedged by derivative instrument or otherwise are given below
(Rs. in million) |
||||
As at March 31, 2019 |
As at March 31, 2018 |
|||
Particulars |
Foreign Currency |
Equivalent Rs. |
Foreign Currency |
Equivalent Rs. |
Import Creditors |
||||
United Arab Emirates Dirham (AED) |
0.61 |
11.54 |
- |
- |
Australia Dollar (AUD) |
0.13 |
6.52 |
0.05 |
2.42 |
Switzerland Franc (CHF) |
0.08 |
5.47 |
- |
- |
Euro (EUR) |
10.96 |
851.64 |
17.89 |
1,442.77 |
Great Britain Pound (GBP) |
9.86 |
892.56 |
20.65 |
1,899.94 |
Japan Yen (JPY) |
52.07 |
32.61 |
188.07 |
115.72 |
Norway Kroner (NOK) |
0.02 |
0.18 |
66.89 |
563.25 |
Sweden Krona (SEK) |
- |
- |
0.03 |
0.22 |
Singapore Dollar (SGD) |
0.01 |
0.26 |
0.01 |
0.27 |
USA Dollar (US$) |
1,001.44 |
69,308.15 |
1,248.38 |
81,044.75 |
Total |
71,108.93 |
85,069.36 |
||
Short Term Borrowings |
||||
USA Dollar (US$) |
1,126.03 |
77,930.46 |
1,300.00 |
84,395.71 |
MWP |
||||
USA Dollar (US$) |
192.93 |
13,351.99 |
178.52 |
11,589.52 |
Cash Call Payable |
||||
USA Dollar (US$) |
0.01 |
1.00 |
2.81 |
182.43 |
Receivables |
||||
USA Dollar (US$) |
132.80 |
9,191.07 |
380.63 |
24,710.79 |
Euro (EUR) |
- |
- |
0.01 |
0.84 |
132.80 |
9,191.07 |
380.64 |
24,711.63 |
|
Cash Call Receivable |
||||
USA Dollar (US$) |
24.70 |
1,709.27 |
34.28 |
2,225.44 |
53. The Company has a system of physical verification of Inventory, Fixed assets and Capital Stores in a phased manner to cover all items over a period of three years. Adjustment differences, if any, are carried out on completion of reconciliation.
54. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.
55. Further, some balances of Trade and other receivables, Trade and other payables and Loans are subject to confirmation/reconciliation. Adjustments, if any, will be accounted for on confirmation/reconciliation of the same, which will not have a material impact.
56. Previous year''s figures have been regrouped, wherever necessary, to confirm to current year''s grouping.
57. Approval of financial statements
The Standalone Financial Statements were approved by the Board of Directors on May 30, 2019.
Signed and dated by the Chairman and Managing Director, the Director (Finance), the Company Secretary and the
Auditors of the Company at New Delhi as at Page No. 185.
OIL AND NATURAL GAS CORPORATION LTD
CIN -L74899DL1993GOI054155
Form-AOC-1
Statement containing salient features of the financial statement of subsidiaries or associate companies or joint ventures as on 31.03.2019 (Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
Part "A": Subsidiaries
(Rs. in million)
As at 31. 03.2019 |
For the year 2018- 19 |
||||||||||||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
14 |
16 |
17 |
SI. No. |
Name of the subsidiary |
Date since when subsidiary was acquired |
Reporting period for the subsidiary |
Reporting currency and Exchange rate (note 3) |
Share capital |
Reserves & surplus |
Total assets |
Total Liabilities |
Investments |
Turnover |
Profit before taxation |
Provision for taxation |
Profit after taxation |
Proposed Dividend |
Extent of shareholding (percentage) |
1 |
ONGC Videsh Limited |
05.03.1965 |
31.03.2019 |
INR |
150,000.00 |
186,072.75 |
856,157.66 |
520,084.91 |
298,932.63 |
115,858.61 |
50,888.22 |
37,620.47 |
13,267.75 |
5,100.00 |
100.00% |
2 |
Mangalore Refinery & Petrochemicals Limited |
30.03.2003 |
31.03.2019 |
INR |
17,526.64 |
89,743.65 |
271,912.59 |
164,642.30 |
15,026.47 |
723,151.10 |
5,807.65 |
2,488.09 |
3,319.56 |
1,752.60 |
80.29% |
3 |
Hindustan Petroleum Corporation Limited |
31.01.2018 |
31.03.2019 |
INR |
15,242.10 |
266,506.10 |
1 03750850 |
755 760 30 |
113,206.30 |
2969290.6 |
93,386.60 |
33,100.00 |
60,286.60 |
14,323.90 |
51.11% |
4 |
ONGC Mangalore Petrochemicals Limited (note 4) |
28.02.2015 |
31.03.2019 |
INR |
21,276.25 |
(14,944.54) |
77,612.43 |
71,280.72 |
4.80 |
83,624.34 |
741.86 |
512.92 |
228.94 |
89.95% |
|
5 |
ONGC Nile Ganga B.V. |
12.03.2003 |
31.03.2019 |
USD |
5.06 |
153,947.65 |
112,560.89 |
1,286.14 |
52,284.47 |
29,962.32 |
(4,618.22) |
(519.37) |
4.47 |
100% for A&B and 77. 491% for Class C |
|
6 |
ONGC Campos Ltda. |
16.03.2007 |
31.03.2019 |
USD |
42,670.96 |
(22,170.57) |
45,941.16 |
25,440.77 |
16,728.36 |
(5,039.38) |
(1,682.44) |
(3,356.94) |
100.00% |
||
ONGC Nile Ganga (San Cristobal) B.V. |
29.02.2008 |
31.03.2019 |
USD |
4.20 |
60,863.93 |
61,686.56 |
818.43 |
28,749.77 |
56.95 |
(1,098.75) |
(679.39) |
2,543.75 |
100.00% |
||
8 |
ONGC Caspian E&P B.V. |
07.06.2010 |
31.03.2019 |
USD |
2.80 |
6,852.79 |
7,053.25 |
197.65 |
1,140.17 |
- |
370.55 |
88.81 |
594.29 |
1,949.60 |
100.00% |
9 |
ONGC Amazon Alaknanda Limited |
08.08.2006 |
31.03.2019 |
USD |
0.83 |
27,308.27 |
36,053.28 |
8,744.18 |
35,948.66 |
- |
945.43 |
945.43 |
100.00% |
||
10 |
ONGC Narmada Limited |
07.12.2005 |
31.03.2019 |
USD |
10.77 |
(2,175.21) |
63.19 |
2,227.62 |
- |
- |
(65.23) |
- |
(65.23) |
- |
100.00% |
11 |
ONGC (ETC) Limited |
28.03.2013 |
31.03.2019 |
USD |
67.40 |
(43.32) |
86.15 |
62.07 |
0.00 |
297.80 |
296.04 |
62.72 |
233.32 |
- |
100.00% |
12 |
Carabobo One AB |
05.02.2010 |
31.03.2019 |
USD |
328.75 |
3,385.13 |
3,934.31 |
220.43 |
3,934.03 |
- |
(3.08) |
- |
(3.08) |
- |
100.00% |
13 |
Petro Carabobo Ganga B.V. |
26.02.2010 |
31.03.2019 |
USD |
1.56 |
12,531.74 |
12,801.46 |
268.16 |
138.81 |
20.84 |
(51.84) |
0.29 |
(52.13) |
- |
100.00% |
14 |
Imperial Energy Limited |
12.08.2008 |
31.03.2019 |
USD |
14.99 |
173,804.34 |
186,438.38 |
12,619.03 |
444.12 |
48.17 |
48.17 |
100.00% |
|||
15 |
Imperial Energy Tomsk Limited |
13.01.2009 |
31.03.2019 |
USD |
0.17 |
671.38 |
692.76 |
21.24 |
0.55 |
(1.12) |
(1.12) |
100.00% |
|||
16 |
Imperial Energy (Cyprus) Limited |
13.01.2009 |
31.03.2019 |
USD |
1.78 |
17,001.62 |
17,022.09 |
18.70 |
0.49 |
(1.12) |
(1.12) |
100.00% |
As at 31.03.2019 |
For the year 2018-19 |
||||||||||||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12
Mar 31, 2018
12.1 Loans to employees include an amount of Rs,0.70 million (As at March 31, 2017 '0.72 million) outstanding from Key Managerial Personnel. The above amount has been deposited with banks under section 33ABA of the Income Tax Act, 1961 and can be withdrawn only for the purposes specified in the Scheme i.e. towards removal of equipment's and installations in a manner agreed with Central Government pursuant to an abandonment plan to prevent hazards to life, property, environment etc. This amount is considered as restricted cash and hence not considered as âCash and cash equivalents'. 14.1    During the financial year 2010-11, the Oil Marketing Companies, nominees ofthe GoI recovered USD 32.07 million (equivalent to '2,081.98 million) ONGC's share as per directives of GoI in respect of Joint Operation - Panna Mukta and Tapti. The recovery is towards certain observations raised by auditors appointed by the Director General of Hydrocarbons (DGH) under Production Sharing Contract (PSC) for the period 2002-03 to 2005-06 in respect of cost and profit petroleum share payable to GoI. BGEPIL along with RIL ("Claimantsâ) have served a notice of arbitration on the GoI in respect of dispute, differences and claims arisen in connection with the terms of Panna, Mukta and Tapti PSCs. Since the Company is not a party to the arbitration proceedings, it had requested MoP&NG that in case of an arbitral award the same be made applicable to ONGC also, as a constituent of contractor for both the PSCs. Subsequently, vide letter dated July 4, 2011 MoP&NG has advised ONGC not to participate in the arbitration initiated by RIL and BGEPIL under Panna Mukta and Tapti PSCs. MoP&NG has also stated that in case of an arbitral award, the same will be applicable to ONGC also as a constituent of the contractor for both the PSCs. A Final Partial Award (FPA) was pronounced by the Tribunal in the arbitration matter between RIL, BGEPIL and Union of India. RIL and BGEPIL the JO partners have challenged the FPA before the English Commercial Court. Pending final quantification of liabilities by the Arbitration Tribunal and decision of English Commercial Court, the same has been shown as Receivable from GoI under âAdvance Recoverable in Cash. (Figures in ' are restated). 14.2    In Ravva Joint Operation, the demand towards additional profit petroleum raised by Government of India (GoI), due to differences in interpretation of the provisions of the Production Sharing Contract (PSC) in respect of computation of Post Tax Rate of Return (PTRR), based on the decision of the Malaysian High Court setting aside an earlier arbitral tribunal award in favor of operator, was disputed by the operator M/s Vedanta Ltd (erstwhile M/s Cairn India Ltd). The Company is not a party to the dispute but has agreed to abide by the decision applicable to the operator. The Company is carrying an amount of Rs,10,896.48 million (equivalent to USD 167.84 million) after adjustments for interest and exchange rate fluctuations which has been recovered by GoI, this includes interest amounting to USD 54.88 million (Rs,3,562.81 million). The Company has made impairment provision towards this recovery made by the GoI. In subsequent legal proceedings, the Appellate Authority of the Honorable Malaysian High Court of Kuala Lumpur had set aside the decision of the Malaysian High Court and the earlier decision of arbitral tribunal in favour of operator was restored, against which the GoI has preferred an appeal before the Federal Court of Malaysia. The Federal Court of Malaysia, vide its order dated October 11, 2011, has dismissed the said appeal of the GoI. The Company has taken up the matter regarding refund of the recoveries made in view of the favorable judgment of the Federal Court of Malaysia with MoP&NG. However, according to a communication dated January 13, 2012, MoP&NG expressed the view that ONGC's proposal would be examined when the issue of ONGC carry under Ravva PSC is decided in its entirety by the Government along with other partners. 19.1    The deposits maintained by the Company with banks comprise time deposit, which can be withdrawn by the Company at any point without prior notice or penalty on the principal. 19.2    Amount deposited in unclaimed dividend account is earmarked for payment of dividend and cannot be used for any other purpose. No amount is due for deposit in Investor Education and Protection Fund. 19.3    Matter of Dispute on Delivery Point of Panna-Mukta gas between Government of India and PMT JO Partners arose due to differing interpretation of relevant PSC clauses. According to the JO Partners, Delivery Point for Panna-Mukta gas is at Offshore, however, MoP&NG and GAIL maintained that the delivery point is onshore at Hazira. The gas produced from Panna-Mukta fields was transported through Company's pipelines. Owing to the delivery point dispute neither the seller (PMT JO) nor the buyer of gas (GAIL) was paying any compensation to ONGC for usage of its pipeline for gas transportation. Hon'ble Gujarat High Court decided that the Panna Mukta oil fields from where the movement of goods is occasioned fall within the customs frontiers of India. Consequently, the sale of goods cannot be said to have taken place in the course of import of goods into the territory of India. The state Government of Gujarat has filed a petition with the Hon'ble Supreme Court of India against the decision of Hon'ble Gujarat High Court. Since the said matter of determination of delivery point is pending with the Hon'ble Supreme Court of India, the amount is maintained in the escrow accounts by the JO Partners. 20.2    Terms / rights attached to equity shares The Company has only one class of equity shares having a par value of '5 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. 20.3    The Company had allotted 4,277,745,060 number of fully paid Bonus shares on December 18, 2016 in the ratio of one equity share of Rs,5 each fully paid up for every two existing equity shares of Rs,5 each fully paid up. 20.5 18,972 equity shares of Rs,10 each (equivalent to 37,944 equity shares of Rs,5 each) were forfeited in the year 2006-07 against which amount originally paid up was Rs,0.15 million. 21.1    Represent assessed value of assets received as gift. 21.2    The Company has elected to recognize changes in the fair value of certain investments in equity securities in other comprehensive income. This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are disposed. 21.3    The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes, as the same is created by transfer from one component of equity to another. 21.4 The amount that can be distributed by the Company as dividends to its equity shareholders is determined considering the requirements of the Companies Act, 2013 and the dividend distribution policy of the Company. On September 29, 2017, a final dividend of Rs,0.80 per share (16%) for 2016-17 was paid to holders of fully paid equity shares. On October 28, 2017 and on March 1, 2018 the Company had declared interim dividend of Rs,3.00 per share (60%) and Rs,2.25 per share (45%) respectively which has since been paid. In respect of the year ended March 31, 2018, the Board of Directors has proposed a final dividend of Rs,1.35 per share (27 %) be paid on fully paid equity shares. This equity dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The proposed equity dividend is payable to all holders of fully paid equity shares. The total estimated equity dividend to be paid is Rs,17,324.87 million and the dividend distribution tax thereon amounts to Rs,3,561.18 million. 23.1    This represents the fair value of fee towards financial guarantee issued on behalf of subsidiaries, recognized as financial guarantee obligation with corresponding debit to investment in subsidiaries. 23.2    No amount is due for deposit in Investor Education and Protection Fund. 24.2 The Company estimates provision for decommissioning as per the principles of Ind AS 37 âProvisions, Contingent Liabilities and Contingent Assets' for the future decommissioning of Oil and Gas assets at the end of their economic lives. Most of these decommissioning activities would be in the future for which the exact requirements that may have to be met when the removal events occur are uncertain. Technologies and costs for decommissioning are constantly changing. The timing and amounts of future cash flows are subject to significant uncertainty. The economic life of the Oil and Gas assets is estimated on the basis of long term production profile of the relevant Oil and Gas asset. The timing and amount of future expenditures are reviewed annually, together with rate of inflation for escalation of current cost estimates and the interest rate used in discounting the cash flows. 26.1    Includes Rs,7,615.73 million in respect of Tapti A series assets, facilities and inventory which were a part of the assets of PMT Joint Operation and surrendered by the JO to the Government of India as per the terms and conditions of the JO Agreement. These assets, facilities and inventory have been transferred by Government of India to the Company free of cost as its nominee. The Company has assessed the fair value of the said assets & facilities at Rs,7,156.89 million based on the valuation report by a third party agency, which has been accounted as Capital work in progress with a corresponding liability as Deferred Government Grant. Inventory valuing Rs,458.84 million has been accounted with a corresponding liability as Deferred Government Grant. 26.2    Includes Rs,8.31 million (previous year Rs,8.57 million) is on account of reimbursement of capital expenditure of research & development. 27.1 The Foreign currency and Rupee term loans have been taken from banks to part finance the strategic acquisition of 51.11% shareholding in HPCL from Government of India. 27.3.1 Loan of Rs,30,000.00 million drawn on January, 31, 2018 benchmarked to 1- month MIBOR was refinanced on 31st March, 2018 by loan benchmarked to overnight MCLR. 27.4 Working Capital Loan: Line of Credit was obtained from consortium of banks to meet the working capital requirement. The interest is benchmarked to overnight MCLR. 28.2 Payment towards trade payables is made as per the terms and conditions of the contract / purchase orders. The average credit period on purchases is 21 days. 30.1    No subsidy discount was extended by the company to the Oil Marketing Companies during the year. 30.2    Revenue from nominated crude (except North East crude) is accounted for in terms of Crude Oil Sales Agreements (COSAs) signed and made effective from April 1, 2010. For Crude Oil produced in Assam, sales revenue is based on the pricing formula provided by Ministry of Petroleum and Natural Gas, Government of India. 30.3    Sales revenue of Natural Gas is based on domestic gas price of US$ 2.48 /mmbtu and US$ 2.89 /mmbtu (on GCV basis) notified by GoI for the period April 1, 2017 to September 30, 2017 and October 1, 2017 to March 31, 2018 respectively in terms of "New Domestic Natural Gas Pricing Guidelines, 2014â. For gas consumers in North-East, consumer price is 60% of the domestic gas price and the difference between domestic gas price and consumer price is paid to the Company through GoI Budget and classified as âNorth-East Gas Subsidy'. *Under the lease agreement, the Company is required to pay annual lease rental of Rs,35.03 million till perpetuity. The finance lease obligation represents the perpetuity value of annualized lease payment, which is Rs,417.96 million and will remain same till perpetuity. The finance charge will be Rs,35.03 million on annual basis till perpetuity. 41.2 Operating lease arrangements 41.2.1 Leasing arrangements The Company has applied Appendix C to Ind AS 17 âLeases' to hiring / service contracts of rigs, vessels, helicopters, etc. to evaluate whether these contracts contains a lease or not. Based on evaluation of the terms and conditions of the arrangements, the Company has evaluated such arrangements to be operating leases. Operating leases relate to leases of rigs, vessels, helicopters etc. with lease terms up to 10 years. The Company does not have an option to purchase the leased rigs, vessels, helicopters etc. at the expiry of the lease periods. 42. Employee benefit plans 42.1    Defined Contribution plans: 42.1.1    Provident Fund The Company pays fixed contribution to provident fund at predetermined rates to a separate trust, which invests the funds in permitted securities. The obligation of the Company is to make such fixed contribution and to ensure a minimum rate of return to the members as specified by GoI. As per report of the actuary, overall interest earnings and cumulative surplus is more than the statutory interest payment requirement. Hence, no further provision is considered necessary. The details of fair value of plan assets and obligations are as under: Provident Fund is governed through a separate trust. The board of trustees of the Trust functions in accordance with any applicable guidelines or directions that may be issued in this behalf from time to time by the Central Government or the Central Provident Fund Commissioner, the board of trustees have the following responsibilities: (i)    Investments of the surplus as per the pattern notified by the Government in this regard so as to meet the requirements of the fund from time to time. (ii)    Raising of moneys as may be required for the purposes of the fund by sale, hypothecation or pledge of the investment wholly or partially. (iii)    Fixation of rate of interest to be credited to members' accounts. 42.1.2 Post Retirement Benefit Scheme The defined contribution pension scheme of the Company for its employees is administered through a separate trust. The obligation of the Company is to contribute to the trust to the extent of amount not exceeding 30% of basic pay and dearness allowance as reduced by the employer's contribution towards provident fund, gratuity, post-retirement medical Benefit (PRMB) or any other retirement benefits. The board of trustees of the Trust functions in accordance with any applicable guidelines or directions that may be issued in this behalf from time to time by the Central Government, the board of trustees have the following responsibilities: (i)    Investments of the surplus as per the pattern notified by the Government in this regard so as to meet the requirements of the fund from time to time. (ii)    Fixation of rate of contribution and interest thereon. (iii)    Purchase of annuities for the members. 42.2    Employee Pension Scheme 1995 The Employee Pension Scheme -1995 is administered by Employees Provident Fund Organization of India, wherein the Company has to contribute 8.33% of salary (subject to maximum of '15,000 per month) out of the employer's contribution to Provident Fund. 42.3    Composite Social Security Scheme (CSSS) The Composite Social Security Scheme is formulated by the Company for the welfare of its regular employees and it is administered through a separate Trust, named as Composite Social Security Scheme Trust. The obligation of the Company is to provide matching contribution to the Trust to the extent of contribution of the regular employees of the company. The Trust provides an assured lump sum support amount in the event of death or permanent total disablement of an employee while in service. In case of Separation other than Death/Permanent total disability, employees own contribution along with interest is refunded. The Board of trustees of the Trust functions in accordance with Trust deed, Rule, Scheme and applicable guidelines or directions that may be issued by Management from time to time. The Board of trustees has the following responsibilities: (i) Investments of the surplus as per the pattern notified by the Government in this regard so as to meet the requirements of the fund from time to time. (ii)    Fixation of rate of interest to be credited to members' accounts. (iii)    To provide cash benefits to the nominees in the event of death of an employee or Permanent Total Disablement leading to the cessation from service and refund of own contribution along with interest in case of separation other than death. 42.5 Defined benefit plans 42.5.1    Brief Description: A general description of the type of Employee Benefits Plans is as follows: 42.5.2    All the employee benefit plans of the Company are run as Group administration plans (Single Employer Scheme) including employees seconded to ONGC Videsh Limited (OVL), 100% subsidiary. 42.5.3    Gratuity 15 days salary for each completed year of service. Vesting period is 5 years and the payment is restricted to Rs,2 million on superannuation, resignation, termination, disablement or on death. Scheme is funded through own Gratuity Trust. The liability for gratuity as above is recognized on the basis of actuarial valuation. 42.5.4    Post-Retirement Medical Benefits The Company has Post-Retirement Medical benefit (PRMB), under which the retired employees and their spouses are provided medical facilities in the Company hospitals/empanelled hospitals. They can also avail treatment as out-patient. The liability for the same is recognized annually on the basis of actuarial valuation. Full medical benefits on superannuation and on voluntary retirement are available subject to the completion of minimum 20 years of service and 50 years of age. An employee should have put in a minimum of15 years of service rendered in continuity in ONGC at the time of superannuation to be eligible for availing post-retirement medical facilities. 42.5.5    Terminal Benefits At the time of superannuation, employees are entitled to settle at a place of their choice and they are eligible for Settlement Allowance. 42.5.6    These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk. No other post - retirement benefits are provided to these employees. In respect of the above plans, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at March 31, 2018 by a member firm of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method. 42.6 Other long term employee benefits 42.5.1    Brief Description: A general description of the type of Other long term employee benefits is as follows: 42.5.2    All the employee benefit plans of the Company are run as Group administration plans (Single Employer Scheme) including employees seconded to ONGC Videsh Limited (OVL), 100% subsidiary. 42.5.3    Earned Leave (EL) Benefit Accrual - 30 days per year Encashment while in service - 75% of Earned Leave balance subject to a maximum of 90 days per calendar year Encashment on retirement - maximum 300 days Scheme is funded through Life Insurance Corporation of India (LIC). 42.5.4    Good Health Reward (Halfpay leave) Accrual - 20 days per year Encashment while in service - Nil Encashment on retirement - 50% of Half Pay Leave balance. Scheme is funded through Life Insurance Corporation of India. (LIC). The liability for the same is recognized annually on the basis of actuarial valuation. 42.12.2    Cost of Investment is taken as fair value of Investment in Unit Linked Plan of Insurance Company (ULIPs) and Bank TDR. 42.12.3    All Investments in PSU Bonds, G Sec and T Bill are quoted in active market. 42.12.4    Fair value of Investment in Group Gratuity Cash Accumulation Scheme (Traditional Fund) of Insurance Company is taken as book value on reporting date. 42.12.5    Net Current Assets represent Accrued Interest on Investments minus outstanding gratuity reimbursements as on reporting date. 42.12.6    The actual return on plan assets of gratuity during FY 2017-18 was Rs,1,807.69 million (during FY 2016-17 Rs,1,888.26 million) and for Leave Rs,1,986.70 million (during FY 2016-17 Rs,1,739.55 million) 42.13 Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected salary increase. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Sensitivity due to mortality & withdrawals are not material & hence impact of change not calculated. Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognized in the balance sheet. 43. Segment Reporting 43.1    The Company has identified and reported segments taking into account the different risks and returns, the organization structure and the internal reporting systems. Accordingly, the Company has identified following geographical segments as reportable segments A.    Offshore B.    Onshore 43.2    Segment revenue and results The following is an analysis of the Company's revenue and results from continuing operations by reportable segment. 43.2.1    Segment revenue reported above represents revenue generated from external customers. There were no intersegment sale in the current year (year ended March 31, 2017: Nil) 43.2.2    The accounting policies of the reportable segments are the same as the Company's accounting policies described in Note no. 3. Segment profit represents the profit before tax earned by each segment excluding finance cost and other income like interest/dividend income. This is the measure reported to the Chief Operating Decision maker for the purposes of resource allocation and assessment of segment performance. 43.3.1    All assets are allocated to reportable segments other than investments in subsidiaries, associates and joint ventures, other investments, loans and current and deferred tax assets. 43.3.2    All liabilities are allocated to reportable segment other than borrowing, current and deferred tax liabilities. 43.3.3    Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segments and amount allocated on reasonable basis. Unallocated expenditure includes common expenditure incurred for all the segments and expenses incurred at the corporate level. Finance cost includes unwinding of discount on decommissioning provisions not allocated to segment. 44. Related Party Disclosures 44.1    Name of related parties and description of relationship: A. Subsidiaries 1.    ONGC Videsh Limited (OVL) 1.1.    ONGC Nile Ganga B.V. (ONGBV) 1.1.1.ONGC Campos Ltda. 1.1.2.ONGC Nile Ganga (Cyprus) Ltd. 1.1.3.ONGC Nile Ganga (San Cristobal) B.V 1.1.4.ONGC Caspian E&P B.V 1.2.    ONGC Narmada Limited (ONL) 1.3.    ONGC Amazon Alaknanda Limited (OAAL) 1.4.    Imperial Energy Limited 1.4.1.Imperial Energy Tomsk Limited 1.4.2.Imperial Energy (Cyprus) Limited 1.4.3.Imperial Energy Nord Limited 1.4.4.Biancus    Holdings Limited 1.4.5.Redcliffe    Holdings Limited 1.4.6.Imperial Frac Services (Cyprus) Limited 1.4.7.San Agio Investments Limited 1.4.8.LLC    Sibinterneft (Note 44.1.1) 1.4.9.LLC    Allianceneftegaz 1.4.10.LLC    Nord Imperial 1.4.11LLC Rus Imperial Group 1.4.12.LLC Imperial Frac Services (Note 44.1.2) 1.5.    Carabobo One AB 1.5.1. Petro Carabobo Ganga B.V. 1.6.    ONGC (BTC) Limited 1.7.    Beas Rovuma Energy Mozambique Ltd. 1.8.    ONGC Videsh Rovuma Ltd. (OVRL) 1.9.    ONGC Videsh Atlantic Inc. (OVAI) 1.10.    ONGC Videsh Singapore Pte. Ltd. 1.10.1    ONGC Videsh Vankorneft Pte. Ltd. 1.11 Indus East Mediterranean Exploration Ltd., Israel 2.    Mangalore Refinery and Petrochemicals Ltd. (MRPL) 3.    ONGC Mangalore Petrochemicals Ltd. (OMPL) 4.    Hindustan Petroleum Corporation Ltd.(HPCL) (w.e.f. January 31,2018, Note no 10.1.3) 4.1    Prize Petroleum Company Ltd. 4.2    HPCL Bio Fuels Ltd. 4.3    Prize Petroleum International pte Ltd. 4.4    HPCL Middle East FZCO 5.    Petronet MHB Ltd (PMHBL) (w.e.f. January 31.2018,    Note no 10.1.4) B. Joint Ventures 1.    Petronet MHB Ltd (PMHBL) (up to January 30.2018,    Note no 10.1.4) 2.    Mangalore SEZ Ltd (MSEZ) 3.    ONGC Petro additions Ltd. (OPaL) 4.    ONGC Tripura Power Company Ltd. (OTPC) 5.    ONGC Teri Biotech Ltd. (OTBL) 6.    Dahej SEZ Limited (DSEZ) 7.    ONGC Mittal Energy Limited (OMEL) (through OVL) 8.    SUDD Petroleum Operating Company(through OVL) 9.    Mansarovar Energy Colombia Limited, Colombia (through OVL) 10.    Himalaya Energy Syria BV, Netherlands (through OVL) 11.    Shell MRPL Aviation Fuels & Services Limited (SMASL) (through MRPL) 12.    Mangalam Retail Services Ltd (through MRPL) upto January 16,2017 13.    HPCL Rajasthan refinery Ltd. 14.    CREDA HPCL Biofuels Ltd. 15.    HPCL Mittal Energy Ltd. 16.    Hindustan Coals Pvt. Ltd. 17.    South Asia LPF Co. Private Ltd. 18.    Bhagyanagar Gas Ltd. 19.    Godavari Gas Pvt Ltd 20.    Petronet India Ltd. 21.    HPCL Shapoorji Energy Pvt. Ltd. 22.    Mumbai Aviation Fuel Farm Facility Pvt Ltd. 23.    North East Transmission Company Ltd. (NETC) (through OTPC) 24.    Mangalore STP Limited (through MSEZ) 25.    MSEZ Power Ltd (through MSEZ) 26.    Adani Petronet Dahej Port Pvt Ltd (APPPL) (through PLL)) 27.    Aavantika Gas Ltd. (through HPCL) 28.    Ratnagiri Refinery & Petrochemical Ltd. (through HPCL) C.    Associates 1.    Pawan Hans Ltd. (PHL) 2.    Petronet LNG Limited (PLL) 3.    Mozambique LNG 1 Company Pte. Ltd. (through OVL) 4.    Petro Carabobo S.A., Venezuela (through OVL) 5.    Carabobo Ingenieria Y Construcciones, S.A, Venezuela (through OVL) 6.    Petrolera Indovenezolana SA, Venezuela (through OVL) 7.    South East Asia Gas Pipeline Ltd, Hongkong (through OVL) 8.    Tamba BV, Netherlands (through OVL) 9.    JSC Vankorneft, Russia (through OVL) 10.    Falcon Oil & Gas BV, Netherlands (through OVL) 11.    GSPL India Gasnet Ltd.(through HPCL) 12.    GSPL India Transco Ltd. (through HPCL) D.    Trusts (including post retirement employee benefit trust) wherein ONGC having control 1.    ONG C Contributory Provident Fund Trust 2.    ONGC CSSS Trust 3.    ONGC Sahyog Trust 4.    ONGC PRBS Trust 5.    ONG C Gratuity Fund 6.    ONG C Energy Center 7.    ONGC Foundation 8.    Ujjawala plus foundation E.    Key Management Personnel E.1. Whole time directors 1.    Shri Shashi Shanker, Chairman and Managing Director (w.e.f. October 01,2017) 2.    Shri D K Sarraf, Chairman and Managing Director (up to September 30, 2017) 3.    Shri D D Misra, Director (HR) 4.    Shri A K Dwivedi, Director (Exploration) 5.    Shri Rajesh Kakkar, Director (Offshore) (w.e.f. February 19, 2018) 6.    Shri Subhash Kumar, Director (Finance) (w.e.f. January 31, 2018) 7.    Shri Sanjay Kumar Moitra, Director (Onshore) (w.e.f. April 18, 2018) 8.    Shri V P Mahawar, Director (Onshore) (up to February 28, 2018) 9.    Shri Shashi Shanker, Director (T&FS) (up to September 30, 2017) 10.    Shri A K Srinivasan, Director (Finance) (up to October 31, 2017) 11.    Shri T K Sengupta Director (Offshore) (up to December 31, 2017) E.2. Company Secretary 1.    Shri M E V Selvamm, Company Secretary (w.e.f. June 01, 2017) 2.    Shri V N Murthy, Company Secretary (up to May 31, 2017) E.3. Independent Directors 1.    Shri Ajai Malhotra 2.    Shri K. M. Padmanabhan 3.    Prof. S. B. Kedare 4.    Shri Vivek Mallya 5.    Shri Sumit Bose 6.    Shri Deepak Sethi 7.    Dr. Santrupt Misra 8.    Smt. Ganga Murthy w.e.f September 23, 2017 9.    Shri Sambit Patra w.e.f. October 28, 2017 E.3. Government nominee - Directors 1.    Shri Amar Nath 2.    Shri Rajiv Bansal (w.e.f. August 10, 2017) 3.    Shri A P Shawhney (up to June 23, 2017) 4.    Shri U. P. Singh (up to June 28, 2016) Notes 44.1.1 Subsidiary Company OVL has 47.52% effective ownership interest, but it has 55.90% of voting rights in LLC Sibinterneft. The above transactions with the government related entities cover transactions that are significant individually and collectively. The Company has also entered into other transactions such as telephone expenses, air travel, fuel purchase and deposits etc. with above mentioned and other various government related entities. These transactions are insignificant individually and collectively and hence not disclosed. 45. Financial instruments Disclosure 45.1    Capital Management The Company's objective when managing capital is to: -    Safeguard its ability to continue as going concern so that the Company is able to provide maximum return to stakeholders and benefits for other stakeholders; and -    Maintain an optimal capital structure to reduce the cost of capital. The Company maintains its financial framework to support the pursuit of value growth for shareholders, while ensuring a secure financial base. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The capital structure of the Company consists of total equity (Note no. 20 & 21). The Company is not subject to any externally imposed capital requirements. The Company's financial management committee reviews the capital structure on a regular basis. As part of this review, the committee considers the cost of capital, risks associated with each class of capital requirements and maintenance of adequate liquidity. 45.1.1    Gearing Ratio The Company has outstanding short term debt of Rs,255,922.08 million as at the end of reporting period (previous year nil). Accordingly, the gearing ratio is worked out as followed: 45.3    Financial risk management objectives While ensuring liquidity is sufficient to meet Company's operational requirements, the Company's financial management committee also monitors and manages key financial risks relating to the operations of the Company by analyzing exposures by degree and magnitude of risks. These risks include market risk (including currency risk and price risk), credit risk and liquidity risk. 45.4    Market Risk Market risk is the risk or uncertainty arising from possible market price movements and their impact on the future performance of a business. The major components of market risk are commodity price risk, foreign currency risk and interest rate risk. The primary commodity price risks that the Company is exposed to include international crude oil prices that could adversely affect the value of the Company's financial assets or expected future cash flows. Substantial or extended decline in international prices of crude oil and natural gas may have an adverse effect on the Company's reported results. 45.5    Foreign currency risk management Sale price of crude oil is denominated in United States dollar(USD) though billed and received in Indian Rupees (INR). The Company is, therefore, exposed to foreign currency risk principally out of INR appreciating against USD. Foreign currency risks on account of receipts / revenue and payments / expenses are managed by netting off naturally-occurring opposite exposures through export earnings, wherever possible and carry unheeded exposures for the residual considering the natural hedge available to it from domestic sales. 45.5.1 Foreign currency sensitivity analysis The Company is principally exposed to foreign currency risk against USD. Sensitivity of profit or loss arises mainly from USD denominated receivables and payables. In management's opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year. 45.5.2 Forward foreign exchange contracts The Company has not entered into any forward foreign exchange contracts during the reporting period. 45.6 Interest rate risk management The Company is exposed to interest rate risk because the Company has borrowed funds benchmarked to overnight MCLR, Treasury Bills and USD LIBOR. The Company's exposure to interest rates on financial assets and financial liabilities are detailed in note no. 27.2. 45.7 Price risks The Company's equity securities price risk arises from investments held and classified in the balance sheet either at fair value through OCI or at fair value through profit or loss. The Company's equity investments in IOC and GAIL are publicly traded. Investment of short-term surplus funds of the Company in liquid schemes of mutual funds provides high level of liquidity from a portfolio of money market securities and high quality debt and categorized as âlow risk' product from liquidity and interest rate risk perspectives. 45.7.1 Price sensitivity analysis The sensitivity of profit or loss in respect of investments in equity shares and mutual funds at the end of the reporting period for +/-5% change in price and net asset value is presented below: -    Other comprehensive income for the year ended March 31, 2018 would increase/ decrease by Rs,13,596.66 million (for the year ended March 31, 2017 would increase/ decrease by Rs,14,478.68 million) as a result of 5% changes in fair value of equity investments measured at FVTOCI; and -    As there was no investment in mutual funds as on 31st March, 2018, changes in net asset value of investment are not applicable for the year ended March 31, 2018 (For the year ended March 31, 2017 would increase/decrease by Rs,1,817.16 million as a result of 5% changes in net asset value of investment in mutual funds). The Sensitivity of Revenue from operation to change in +/- 1 USD in prices of crude oil, natural gas & value added products (VAP) 45.8    Interest rate risk management The Company invests the surplus fund generated from operations in term deposits with banks and mutual funds. Bank deposits are made for a period of upto 12 months carry interest rate as per prevailing market interest rate. Considering these bank deposits are short term in nature, there is no significant interest rate risk. Average interest earned on term deposit and a mutual fund for the year ended March 31, 2018 was 6.16%. 45.9    Credit risk management Credit risk arises from cash and cash equivalents, investments carried at amortized cost and deposits with banks as well as customers including receivables. Credit risk management considers available reasonable and supportive forward-looking information including indicators like external credit rating (as far as available), macro-economic information (such as regulatory changes, government directives, market interest rate). Major customers, being public sector oil marketing companies (OMCs) and gas companies having highest credit ratings, carry negligible credit risk. Concentration of credit risk to any other counterparty did not exceed 4.17% (previous year 3.19%) of total monetary assets at any time during the year. Credit exposure is managed by counterparty limits for investment of surplus funds which is reviewed by the Management. Investments in liquid plan/schemes are with public sector Asset Management Companies having highest rating. For banks, only high rated banks are considered for placement of deposits. Bank balances are held with reputed and creditworthy banking institutions. The Company is exposed to default risk in relation to financial guarantees given to banks / vendors on behalf of subsidiaries / joint venture companies for the estimated amount that would be payable to the third party for assuming the obligation. The Company's maximum exposure in this regard on as at March 31, 2018 is Rs,441,956.86 million (As at March 31, 2017 is Rs,443,308.48 million). 45.10 Liquidity risk management The Company manages liquidity risk by maintaining sufficient cash and cash equivalents including bank deposits and availability of funding through an adequate amount of committed credit facilities to meet the obligations when due. Management monitors rolling forecasts of liquidity position and cash and cash equivalents on the basis of expected cash flows. In addition, liquidity management also involves projecting cash flows considering level of liquid assets necessary to meet obligations by matching the maturity profiles of financial assets & liabilities and monitoring balance sheet liquidity ratios. The following tables detail the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The information included in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. The contractual maturity is based on the earliest date on which the Company may be required to pay. *Represents Company's maximum exposure in respect of financial guarantee obligation given to banks / vendors on behalf of subsidiaries / joint venture companies for the estimated amount that would be payable to the third party for assuming the obligation. The Company has access to committed credit facilities as described below, all of which remain unused at the end of the reporting period (as at March 31, 2017 Nil). The Company expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets. 45.11 Fair value measurement This note provides information about how the Company determines fair values of various financial assets and financial liabilities. 45.12 Fair value of the Companyâs Financial Assets/ Financial Liabilities that are measured at fair value on a recurring basis Some of the Company's financial assets/ financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets/ financial liabilities are determined. 45.13 Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required) Management considers that the carrying amounts of financial assets and financial liabilities recognized in the financial statements except as per note no. 45.12 approximate their fair values. 46. Disclosure of Interests in Joint Arrangements and Associates: 46.1 Joint Operations In respect of certain unincorporated PSC/NELP/CBM blocks, the Company's Joint Operation (JO) with certain body corporate have entered into Production Sharing Contracts (PSCs) with GoI for operations in India. As per signed PSC & JOA, Company's has direct right on Assets, liabilities, income & expense of blocks. Details of these Joint Operation Blocks are as under: 46.1.1 Approval towards assignment of PI is awaited from GoI Abbreviations:- APGIC- AP Gas Infrastructure Corporation Limited, AWEL- Adani Welspun Exploration Limited, BGEPIL- British Gas Exploration & Production India Limited, BPRL- Bharat Petro Resources Limited, Cairn India-Cairn India Limited, CEHL- Cairn Energy Hydrocarbons Limited, CIL- Coal India Limited, EEPL- Essar Exploration & production Limited, ENI- Ente Nazionale Idrocarburi, EOL-Essar Oil Limited, GAIL- Gas Authority of India Limited, GSPC- Gujarat State Petroleum Corporation Limited, HEPI- Hardy Exploration & Production India Limited, HOEC-Hindustan Oil Exploration Company Limited, IOC- Indian Oil Corporation Limited, NTPC- National Thermal Power Corporation Limited, OIL- Oil India Limited, PEPL-Prabha Energy Pvt Limited, RIL- Reliance Industries Limited, ROPL- Ravva Oil (Singapore) Private Limited, TPL- Tata Petrodyne Limited, VIL- Videocon Industries Limited, JODPL- Jubilant Offshore Drilling Private Limited, EWP- East West Petroleum 46.1.3    The financial statements of 125 (125 in FY 2016-17 ) out of 136 (135 in FY 2016-17) Joint operation (PSC/ NELP/CBM blocks) have been incorporated in the accounts to the extent of Company's participating interest in assets, liabilities, income, expenditure and profit / (loss) before tax on the basis of statements certified in accordance with production sharing contract and in respect of balance 11 (10 in FY 2016-17) Joint operation (PSC/NELP/CBM blocks), the figures have been incorporated on the basis of uncertified statements prepared under the production sharing contracts. Financial statements of Joint operated blocks have been adjusted for changes as per Note no. 3.4. The financial positions of Company share of Joint operation (PSC/NELP/CBM blocks) are disclosed in note 46.1.4 46.1.4    Financial position of the Joint Operation -Companyâs share are as under: The financial statements of 125 nos. (125 in FY 2016-17), out of 136 nos. (135 in FY 16-17) Joint operation block (JOs/NELP), have been incorporated in the accounts to the extent of Company's participating interest in assets, liabilities, income, expenditure and profit / (loss) before tax on the basis of statements certified in accordance with production sharing contract and in respect of balance 11 (10 in FY 2016-17) Joint operation blocks (JOs/NELP), the figures have been incorporated on the basis of uncertified statements prepared under the production sharing contracts. Both the figures have been adjusted for changes as per Note no. 3.4. The financial positions of JO/NELP are as under:- 46.1.6 In respect of 4 NELP blocks (previous year 6) which have expired as at March 31, 2018, the Company's share of Unfinished Minimum Work Programme (MWP) amounting to Rs,753.13 million (previous year to Rs,1,167.54 million) has not been provided for since the Company has already applied for further extension of period in these blocks as âexcusable delay'/ special dispensations citing technical complexities, within the extension policy of NELP Blocks, which are under active consideration of GoI. The delays have occurred generally on account of pending statutory clearances from various Govt. authorities like Ministry of Defense, Ministry of Commerce, environmental clearances, State Govt. permissions etc. The above MWP amount of '753.13 million (previous year '1,167.54 million) is included in MWP commitment under Note no. 48.2.2 (i). As per the Production Sharing Contracts signed by the Company with the GoI, the Company is required to complete Minimum Work Programme (MWP) within stipulated time. In case of delay in completion of the MWP, Liquidated Damages (LD) are payable for extension of time to complete MWP. Further, in case the Company does not complete MWP or surrender the block without completing the MWP, the estimated cost of completing balance work programme is required to be paid to the GoI. LD (net of reversal) amounting to Rs,688.06 million (Previous year (-) Rs,14.90 million) and cost of unfinished MWP (net of reversal) Rs,160.71 million (Previous year Rs,965.69 million), paid/payable to the GoI is included in survey and wells written off expenditure respectively. 46.1.7    Govt. of India has approved the relinquishment of 30% Participating Interest (PI) of ONGC in SGL Field with future interest in block RJ-ON/6 in Jaisalmer Basin Rajasthan to Focus Energy Limited (Operator), on the condition that Focus Energy Limited (Operator) will pay towards 100 % past royalty obligation, PEL/ ML fees, other statutory levies (total amount Rs,1557.81 million as on March 31, 2018) and waive off development/production cost payable by ONGC in SGL Field of the block as well as take all future 100% royalty obligation ofONGC as licensee. Pending the execution of Farm-out Agreement and amendment in Production Sharing Contract (PSC), no adjustment is made in the accounts in respect of relinquishment of RJ-ON/6. 46.1.8    The Company is having 30% Participating interest in Block RJ-ON-90/1 with Vedanta Ltd (erstwhile Cairn India Ltd) (Operator) and Cairn Energy Hydrocarbons Ltd. There are certain unresolved issues relating to cost recovery in respect of exploration, development and production cost amounting to US$ 1071.51 million (Rs,69,562.43 million). The issues are under discussions between the JV partners for settlement. Pending settlement of issues, the amount of US$ 824.30 (Rs,53,513.56 million) million pertaining to development and production cost have been accounted for as per the participating interest of the company 46.1.9    In respect of Jharia CBM block, there are certain overlapping issues with Steel Authority of India Limited (SAIL). Due to overlap issue, Developmental activities (except incidental gas production), was suspended since June 2014. Recently, Directorate General of Mines Safety (DGMS) has accorded permission to ONGC to resume operation in the overlap area with SAIL abiding by in-principle approval of CoDevelopment Agreement (by DGMS/DGH). However, the execution of the Co-Development Agreement with SAIL is pending. Similarly, in Raniganj CBM Block, Airport City Project of Bengal Aerotropolis Projects Limited (BAPL) overlaps part of the FDP area of Raniganj CBM Block. The issue is being discussed with BAPL and Government of West Bengal. However, the Public Hearing for obtaining Environmental Clearance (EC) has been conducted and EC application submitted to Ministry of Environment and Forest, Government of India. Techno-economics of the Block is being reworked with cost optimization. Pending final decision on the block, an impairment provision of Rs,611.95 million has been provided in the books. 46.1.10 During the year the Company has acquired the entire 80% Participating Interest (PI) of Gujarat State Petroleum Corporation Limited (GSPC) along with operatorship rights, at a purchase consideration of US$ 995.26 million (Rs,62,950.20 million) for Deen Dayal West (DDW) Field in the Block KG-OSN-2001/3. A Farm-in - Farm- out Agreement (FIFO) was signed with GSPC on 10th March, 2017 with an economic date of 31st March, 2017 (23:59 Hrs - IST) and the said consideration has been paid on 4th August, 2017 being the closing date. As per FIFO, the company is required to pay / receive sums as adjustments to the consideration already paid based on the actual gas production and the differential in agreed gas price. Pending executing mother wells and estimating future production, the contingent adjustment to consideration remains to be quantified. Accounting for the closing adjustment (i.e. working capital and other adjustments) to sale consideration viz. transactions from the economic date up to the closing date has been carried out on provisional basis and a sum of Rs,198.31 million is net receivable from GSPC which is subject to final settlement as per mutual agreement between GSPC and the company. The company has also paid part consideration of US$ 200 million (Rs,12,650.00 million) for six discoveries other than DDW Field in the Block KG-OSN-2001/3 to GSPC towards acquisition rights for these discoveries in the Block KG-OSN-2001/3 to be adjusted against the valuation of such fields based on valuation parameters agreed between GSPC and the Company. 47. Disclosure under Indian Accounting Standard 36 - Impairment ofAssets 47.1    The Company is engaged mainly in the business of oil and gas exploration and production in On-shore and Offshore. In case of onshore assets, the fields are using common production/ transportation facilities and are sufficiently economically interdependent to constitute a single cash generating unit (CGU). Accordingly, impairment test of all onshore fields is performed in aggregate of all those fields at the Asset Level. In case of Offshore Assets, a field is generally considered as CGU except for fields which are developed as a Cluster, for which common facilities are used, in which case the impairment testing is performed in aggregate for all the fields included in the cluster. 47.2    The Value in Use of producing/developing CGUs is determined under a multi-stage approach, wherein future cash flows are initially estimated based on Proved Developed Reserves. Under the circumstances where further development of the fields in the CGUs is under progress and where the carrying value of the CGUs is not likely to be recovered through exploitation of proved developed reserves alone, the Proved and probable reserves (2P) of the CGUs are also taken for the purpose of estimating future cash flows. In such cases, full estimate of the expected cost of evaluation/development is also considered while determining the value in use. 47.3    In assessing value in use, the estimated future cash flows from the continuing use of assets and from its disposal at the end of its useful life are discounted to their present value. The present value of cash flows has been determined by applying discount rates of 14.48% (as at March 31, 2017 - 14.88 %) for Rupee transactions and 9.68% (as at March 31, 2017- 10.57 %) for crude oil and value added products revenue, which are measured in USD. Future cash inflows from sale of crude oil and value added products have been computed using the future prices, on the basis of market-based average prices of dated Brent crude oil as per âPlatt's Crude oil market wire' and its Co-relations with benchmark crude and other petroleum products. Future cash flows from sale of natural gas are also computed based on the expected future prices on the basis of notification issued by the Government of India and discounted applying the rate applicable to the cash flows measured in USD in view of the new pricing guidelines issued by GOI. (Note no. 30.3) 47.4    The company has assessed the impairment as at March 31, 2018 for its CGUs. There has been an improvement in prices of Crude Oil and Natural Gas in the current financial year. As a result of the change in prices and other variables, there has been a reversal of an amount of Rs,6,985.33 million (As on 31 March, 2017 Rs,13,979.63 million) mainly consisting of Rs,6,954.96 million (As on 31 March, 2017 Rs,12,203.54 million) for onshore CGU Sibsagar and balance reversal of impairment pertains to other CGUs. 47.5    During the year Rs,1,342.92 million (Previous year Rs,715.62 million) has been provided for impairment loss mainly consisting of onshore 48. Contingent liabilities, Contingent Assets and commitments (to the extent not provided for) 48.1    Contingent Liabilities & Contingent Assets: 48.1.1    Claims against the Company/ disputed demands not acknowledged as debt:- CGU Silchar and Jodhpur amounting to Rs,241.96 million (Previous year Rs,235.11 million). Balance impairment loss amounting to Rs,1,100.96 million (Previous year Rs,480.51 million) pertains to Tapti field, CB-OS-1and other CGUs. 47.6 The following 2P reserves for respective CGU were considered as a basis for the impairment testing as at March 31, 2018 Impairment testing of assets under exploratory phase (Exploratory wells in progress) has been carried out as on March 31, 2018 and an amount of Rs,1,820.94 million (For the year ended March 31, 2017 Rs,4,539.44 million) has been provided during the year 2017-18 as impairment loss. Further, Rs,1,065.43 million (For the year ended March 31, 2017 Rs,966.05 million) impairment losses has been reversed in the Standalone statement of Profit and Loss as exploratory phase assets have been transferred to dry well expenditure. a.    The Company's pending litigations comprise claims against the Company and proceedings pending with Tax / Statutory/ Government Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material impact on its financial position. Future cash outflows in respect of the above are determinable only on receipt of judgments/ decisions pending with various forums/ authorities. b.    During the year, the Company has received show cause notices at various work centers on account of service tax along with interest and penalty, on royalty on Crude oil and Natural gas levied under Oil Field (Regulation & Development) Act, 1948. The Company has worked out service tax (including interest) of Rs,19,834.29 million for the period from April 1, 2016 to June 30, 2017. Further, the Company has worked out GST (including interest) of Rs,14,315.98 million for the period from July 1, 2017 to March 31, 2018. Penalty in respect of the same is not quantifiable. Based on legal opinion obtained by the Company, service tax / GST on royalty are not applicable. The Company is contesting the same at appropriate authorities and accordingly the same has been shown as contingent liability. However, as an abundant caution, the company has deposited Service tax, GST and interest under protest in May, 2018 amounting to Rs,25,153.29 million. c. The Company, with 40% Participating Interest (PI), is a Joint Operator in Panna-Mukta and Mid and South Tapti Fields along with Reliance Industries Limited (RIL) and BG Exploration and Production India Limited (BGEPIL), each having 30% PI. The Production Sharing Contracts (PSCs) with respect to Panna-Mukta and Mid and South Tapti contract areas were signed between the Contractors and Government of India on December 22, 1994 for a period of 25 years. In December 2010, RIL & BGEPIL invoked an arbitration proceeding against the Union of India in respect of certain disputes, differences and claims arising out of or in connection with both the PSCs in respect to Panna-Mukta and Mid and South Tapti contract areas pursuant to the provisions of Article 33 of the PSCs and UNCITRAL Rules, 1976. The Ministry of Petroleum and Natural Gas (MoP&NG), vide letter dated July 4, 2011, had advised the Company not to participate in the arbitration initiated by RIL and BGEPIL under Panna-Mukta & Tapti PSCs. However, in case of an arbitral award, the same will be applicable to the Company also as a constituent of the contractor for both the PSCs. On October 12, 2016, a Final Partial Award (FPA) was pronounced by the Tribunal in the arbitration matter between RIL, BGEPIL and Union of India. However, details of proceedings in this regard are not known to the Company since the Company is not a party to this arbitration. Directorate General of Hydrocarbons (DGH), vide letter dated May 25, 2017 marked to all Joint Venture Partners (RIL, BGEPIL & ONGC) has asked for payment of differential GOI share of Profit Petroleum and Royalty alleged to be payable by contractor pursuant to Governments interpretation of the FPA (40% share of the Company amounting to US$ 1,574.76 million equivalent to Rs,102,233.41 million including interest up to November 30, 2016 ). However, in response to letter dated May 25, 2017 of DGH, RIL and BGEPIL the JV partners (with a copy marked to all the Joint Venture partners) have stated that demand of DGH is premature as the FPA does not make any money award in favour of GOI as quantification of liabilities are to be determined during the final proceedings of the arbitration and the same has been challenged before the English Commercial Court. Further, subsequent to London High Court Orders dated April 16, 2018 and May 2, 2018, DGH vide letter dated May 4, 2018 and May 15, 2018 has asked for re-casting of accounts of the JV and for remitting respective PI share of balance dues including interest till the date of remittance. Details of proceedings thereof and the London High Court orders are not known to the Company since the Company is not a party to the arbitration. In response to the letter of DGH RIL & BGEPIL have responded (with a copy marked to all the Joint Venture partners) that FPA of October 2016 does not make any money award in favour of the Government. Further it has also been stated by RIL & BGEPIL that the English Court has upheld challenge 4 of the claimants (RIL & BGEPIL) in relation to "Agreement Caseâ and held that there had been a serious irregularity in the Award of the Tribunal. Further in the court order of May 2, 2018, the English Court has directed the Tribunal to re-consider the âAgreement Caseâ and issue a fresh award within three months of that date. The âAgreement Caseâ is closely linked with the Cost recovery limit (CRL) increase application filed by the contractor with the Management Committee and Tribunals re-consideration of this issue necessarily impacts the re-computation of accounts. Re-computation of accounts and consequential determination of any amount due and payable by the contractor (Constituents of the JV including the Company) are to be determined during the final stage of the arbitration proceedings after determination of all substantive issues by the Tribunal (including any application for an increase in the Tapti and Panna Mukta CRL and an award on the Agreement Case). The Company has also responded to DGH that as of now, neither the Arbitral Tribunal nor the Court has passed any order or quantified any amount due and payable by the Company. In the circumstances, the demand of DGH from the Company for any sum or interest thereon is premature and not justified. The company has requested DGH to keep the issue in abeyance till finality in the award is achieved. Pending the final quantification of liabilities by the Arbitration Tribunal, no provision for the same has been considered necessary. However, the same has been considered as contingent liability 48.1.2    A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. During the normal course of business, several unresolved claims are currently outstanding. The inflow of economic benefits, in respect of such claims cannot be measured due to uncertainties that surround the related events and circumstances. 48.2    Commitments 48.2.1    Capital Commitments: Estimated amount of contracts remaining to be executed on capital account:- i)    In respect of Company: Rs,82,223.61 million (Previous year Rs,110,082.89 million). ii)    In respect of Joint Operations: Rs,2,753.09 million (Previous year Rs,2,596.09 million). 48.2.2    Other Commitments (i) Estimated amount of Minimum Work Programme (MWP) committed under various âProduction Sharing Contracts' with Government of India / Nominated Blocks: a) In respect of NELP blocks in which the Company has 100% participating interest: Rs,2,750.40 million (Previous year Rs,3,325.69 million). b) In respect of NELP blocks in Joint Operations, Company's share: Rs,2,581.97 million (Previous year Rs,7,576.08 million). (ii)    In respect of ONGC Petro additions Limited, AJoint Venture Company Rs,480.50 million on account of subscription o
Mar 31, 2017
1. Corporate information Oil and Natural Gas Corporation Limited (âONGCâ or âthe Companyâ) is a public limited company domiciled and incorporated in India having its registered office at Pandit Deendayal Upadhyaya Urja Bhawan, 5, Nelson Mandela Marg, Vasant Kunj, New Delhi - 110070. The Companyâs shares are listed and traded on Stock Exchanges in India. The Company is engaged in exploration, development and production of crude oil, natural gas and value added products. 2. Application of new IndianAccounting Standards 2.1 All the Indian Accounting Standards issued and notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) till the financial statements are authorized have been considered in preparing these financial statements. 2.2 In March 2017, Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to the Ind AS 7 âStatement of Cash flowsâ and Ind AS 102, âShare - Based Paymentâ, which are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS -7, âStatement of Cash flowsâ and IFRS - 2, âShare - Based Paymentâ respectively. These amendments are applicable w.e.f. 1stApril, 2017 Amendment to Ind AS 7: The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement. As the Company has no liabilities arising from financing activities presently, hence this amendment has no effect on the financial statements of the Company. Amendment to Ind AS 102: The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes. As the Company has not issued any stock options planspresently, hence this amendment has no effect on the financial statements of the Company. 3. Critical Accounting Judgments, Assumptions and Key Sources of Estimation Uncertainty Inherent in the application of many of the accounting policies used in preparing the Financial Statements is the need for Management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual outcomes could differ from the estimates and assumptions used. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods are affected. Key source of judgments, assumptions and estimation uncertainty in the preparation of the Financial Statements which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are in respect of Oil and Gas reserves, impairment, useful lives of Property, Plant and Equipment, depletion of oil and gas assets, decommissioning provision, employee benefit obligations, impairment, provision for income tax, measurement of deferred tax assets and contingent assets and liabilities. 3.1. Critical judgments in applying accounting policies The following are the critical judgements, apart from those involving estimations (Note 4.2), that the Management have made in the process of applying the Companyâs accounting policies and that have the significant effect on the amounts recognized in the Financial Statements. (a) Determination of functional currency Currency of the primary economic environment in which the Company operates (âthe functional currencyâ) is Indian Rupee (Rs.) in which the Company primarily generates and expends cash. Accordingly, the Management has assessed its functional currency to be Indian Rupee ( Rs.). (b) Classification of investment Judgement is required in assessing the level of control obtained in a transaction to acquire an interest in another entity; depending upon the facts and circumstances in each case, the Company may obtain control, joint control or significant influence over the entity or arrangement. Transactions which give the Company control of a business are business combinations. If the Company obtains joint control of an arrangement, judgement is also required to assess whether the arrangement is a joint operation or a joint venture. If the Company has neither control nor joint control, it may be in a position to exercise significant influence over the entity, which is then classified as an associate. The Company has 49.36% equity interest in ONGC Petro Additions Limited (OPAL). The Company has also subscribed for 1,922 million share warrants on August 25, 2015 entitling the Company to exchange each warrant with an equity share of face value of Rs.10 each against which Rs.9.75 has been paid. Further the Company has also entered into an arrangement on July 2, 2016 for backstopping support towards repayment of principal and cumulative coupon amount for compulsory convertible debentures amounting to Rs.56,150 Million and cumulative interest thereon amounting to Rs.16,570.00 Million issued by OPAL. The Management has however evaluated the interest in OPAL to be in the nature of joint venture as the shareholder agreement between all the shareholders provides for sharing of control of the decisions of relevant activities that require the unanimous consent of all the parties sharing control. (c) Determining whether an arrangement contain leases and classification of leases The Company enters into service/hiring arrangements for various assets/services. The determination of lease and classification of the service/hiring arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lesseeâs option to purchase and estimated certainty of exercise of such option, proportion of lease term to the assetâs economic life, proportion of present value of minimum lease payments to fair value of leased asset and extent of specialized nature of the leased asset. (d) Evaluation of indicators for impairment of Oil and Gas Assets The evaluation of applicability of indicators of impairment of assets requires assessment of external factors (significant decline in assetâs value, significant changes in the technological, market, economic or legal environment, market interest rates etc.) and internal factors (obsolescence or physical damage of an asset, poor economic performance of the asset etc.) which could result in significant change in recoverable amount of the Oil and Gas Assets. (e) Oil & Gas Accounting The determination of whether potentially economic oil and natural gas reserves have been discovered by an exploration well is usually made within one year of well completion, but can take longer, depending on the complexity of the geological structure. Exploration wells that discover potentially economic quantities of oil and natural gas and are in areas where major capital expenditure (e.g. an offshore platform or a pipeline) would be required before production could begin, and where the economic viability of that major capital expenditure depends on the successful completion of further exploration work in the area, remain capitalized on the balance sheet as long as additional exploration or appraisal work is under way or firmly planned. It is not unusual to have exploration wells and exploratory-type stratigraphic test wells remaining suspended on the balance sheet for several years while additional appraisal drilling and seismic work on the potential oil and natural gas field is performed or while the optimum development plans and timing are established. All such carried costs are subject to regular technical, commercial and management review on at least an annual basis to confirm the continued intent to develop, or otherwise extract value from the discovery. Where this is no longer the case, the costs are immediately expensed. 3.2. Assumptions and key sources of estimation uncertainty Information about estimates and assumptions that have the significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may differ from these estimates. (a) Estimation ofprovision for decommissioning The Company estimates provision for decommissioning as per the principles of Ind AS 37 âProvisions, Contingent Liabilities and Contingent Assetsâ for the future decommissioning of Oil and Gas assets at the end of their economic lives. Most of these decommissioning activities would be in the future, the exact requirements that may have to be met when the removal events occur are uncertain. Technologies and costs for decommissioning are constantly changing. The timing and amounts of future cash flows are subject to significant uncertainty. The timing and amount of future expenditures are reviewed at the end of each reporting period, together with rate of inflation for escalation of current cost estimates and the interest rate used in discounting the cash flows. The economic life of the Oil and Gas assets is estimated on the basis of long term production profile of the relevant Oil and Gas asset. The General Consumer Price Index (CPI) for inflation i.e. 3.81% (Previous year 4.83%) has been used for escalation of the current cost estimates and discounting rate used to determine the balance sheet obligation as at the end of the year is 7.12% (Previous year 7.56%), which is the risk free government bond rate with 10 year yield. (b) Determination of cash generating unit (CGU) The Company is engaged mainly in the business of oil and gas exploration and production in Onshore and Offshore. In case of onshore assets, the fields are using common production/ transportation facilities and are sufficiently economically interdependent to constitute a single cash generating unit (CGU). Accordingly, impairment test ofall onshore fields is performed in aggregate of all those fields at the Asset Level. In case of Offshore Assets, a field is generally considered as CGU except for fields which are developed as a Cluster, for which common facilities are used, in which case the impairment testing is performed in aggregate for all the fields included in the cluster. (c) Impairment of assets Determination as to whether, and by how much, a CGU is impaired involves Management estimates on uncertain matters such as future prices, the effects of inflation on operating expenses, discount rates, production profiles for crude oil, natural gas and value added products. For Oil and Gas assets, the expected future cash flows are estimated using Managementâs best estimate of future crude oil and natural gas prices, production and reserves volumes. The present values of cash flows are determined by applying pre tax-discount rates of 14.88% (previous year 19.06 %) for Rupee transactions and 10.57% (previous year 13.37 %) for crude oil and value added products revenue, which are measured in USD. Future cash inflows from sale of crude oil and value added products are computed using the future prices, on the basis of market-based average prices of the Dated Brent crude oil as per assessment by âPlattâs Crude Oil Market wireâ and its co-relations with benchmark crudes and other petroleum products. Future cash flows from sale of natural gas are also computed based on the expected future prices on the basis of the notification issued by the Government of India and discounted applying the rate applicable to the cash flows measured in USD in view of the new pricing guidelines issued by GoI. The discount rate used is based upon the cost of capital from an established model. The Value in use of the producing/developing CGUs is determined under a multi-stage approach, wherein future cash flows are initially estimated based on Proved Developed Reserves. Under circumstances where the further development of the fields in the CGUs is under progress and where the carrying value of the CGUs is not likely to be recovered through exploitation of proved developed reserves alone, the Proved and probable reserves (2P) of the CGUs are also taken for the purpose of estimating future cash flows. In such cases, full estimate of the expected cost of evaluation/ development is also considered while determining the value in use. The discount rates applied in the assessment of impairment calculation are re-assessed each year. (d) Estimation of reserves Management estimates production profile (proved and developed reserves) in relation to all the Oil and Gas Assets based on the policies and procedures determined by the Reserves Estimation Committee of the Company (REC). The estimates so determined are used for the computation of depletion and impairment testing. The year-end reserves of the Company have been estimated by the REC which follows international reservoir engineering procedures consistently. The Company has adopted deterministic approach for reserves estimation and is following Society of Petroleum Engineers (SPE) - 1997 guidelines which defines reserves as âestimated volumes of crude oils, condensate, natural gas, natural gas liquids and associated substances anticipated to be commercially recoverable from known accumulations from a given date forward, under existing economic conditions, by established operating practices, and under current Government regulations.â Volumetric estimation is the main procedure in estimation, which uses reservoir rock and fluid properties to calculate hydrocarbons in-place and then estimate that portion which will be recovered from it. As the field gets matured with reasonably good production history available then performance methods such as material balance, simulation, decline curve analysis are applied to get more accurate assessments of reserves. The annual revision of estimates is based on the yearly exploratory and development activities and results thereof. New in- place Volume and Ultimate Reserves are estimated for new field discoveries or new pool discoveries in already discovered fields. Also, appraisal activities lead to revision in estimates due to new sub-surface data. Similarly, reinterpretation exercise is also carried out for old fields due to necessity of revision in petro-physical parameters, updating of static and dynamic models and performance analysis leading to change in reserves. Intervention of new technology, change in classifications and contractual provisions also necessitate revision in estimation of reserves. The Company uses the services of third party agencies for due diligence and it gets the reserves ofits assets audited by third party periodically by internationally reputed consultants who adopt latest industry practices for their evaluation. (e) Defined benefit obligation (DBO) Managementâs estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of inflation, medical cost trends, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses. 4.1 Includes assets pertaining to production and allied facilities as on April 1, 2015 classified as âOil and Gas Assetsâunder Property, Plant and Equipment in terms of EAC opinion issued by the Institute of Chartered Accountants of India (iCAI) (Note 56.1). 4.2 The Company has elected to continue with the carrying value of its Oil and Gas Assets recognised as ofApril 1, 2015 (transition date) measured as per the Previous GAAP and used that carrying value as its deemed cost as on the transition date as per Para D7AA of Ind AS 101 except for decommissioning and restoration provision included in the cost of Oil and Gas Assets which have been adjusted in terms of para D21 of Ind AS 101 âFirst -time Adoption of Indian Accounting Standardsâ (Note 3.34 (v)) a. Land includes 36 numbers (Previous year 158) of lands in respect of certain units amounting to Rs.88.89 million (Previous year Rs.184.61 million) for which execution of conveyance deeds is in process. b. Registration of title deeds in respect of 12 numbers (Previous year 12) buildings is pending execution having carrying amount of Rs.61.10million(Previous year Rs.64.94 million). c. Building includes cost of undivided interest in land. 5.1. Carrying value of Assets pertaining to production and allied facilities as on April 1, 2015 has been reclassified from other Property, Plant and Equipment (PPE) to âOil and Gas Assetsâ to reflect the aggregate amount of Oil and Gas Assets. 5.2. The Company has elected to continue with the carrying value of its other Property Plant & Equipment (PPE) recognised as of April 1, 2015 (transition date) measured as per the Previous GAAP and used that carrying value as its deemed cost as on the transition date as per Para D7AA of Ind AS 101 except for decommissioning provision included in the cost of other Property, Plant and Equipment (PPE) which has been adjusted in terms of para D21 of Ind AS 101 âFirst -time Adoption of Indian Accounting Standardsâ (Note 3.34 (v)). 6.1 The Company has elected to continue with the carrying value of its Capital Works-in-Progress recognised as of April 1, 2015 (transition date) measured as per the Previous GAAP and used that carrying value as its deemed cost as on the transition date as per Para D7AA of Ind AS 101 except for decommissioning and restoration provision included in the cost of Capital Works-in-Progress which have been adjusted in terms of para D21 of Ind AS 101 âFirst -time Adoption of Indian Accounting Standardsâ (Note 3.34 (v)). 6.2 Includes Rs.7,156.89 million (Previous year Nil) in respect of Tapti A series assets and facilities which were a part of the assets of PMT Joint Operation ( JO) and surrendered by the JO to the Government of India as per the terms and conditions of the JO Agreement. During the year these assets and facilities have been transferred by Government of India to the Company free of cost as its nominee. The Company has assessed the fair value of the said assets & facilities at Rs.7,156.89 million based on the valuation report by a third party agency, which has been accounted as Capital work-in-progress with a corresponding liability as Deferred Government Grant (Note 27.1). While transferring these assets to the Company, the decommissioning obligation has been delinked by Government of India. The same will be considered as decided by the Government of India. However decommissioning provision towards 40% share being partner in the JO is being carried in the financial statements. 7.1 The Company has elected to continue with the carrying value of its Intangible Assets, recognised as of April 1, 2015 (transition date) measured as per the Previous GAAP and used that carrying value as its deemed cost as on the transition date as per Para D7AA of Ind AS 101 âFirst -time Adoption of Indian Accounting Standardsâ Standardsâ (Note 3.34 (v)). 8.1. The Company had acquired during 2004-05, 90% Participating Interest in Exploration Block KG-DWN-98/2 from M/s Cairn Energy India Ltd for a lump sum consideration of Rs.3,711.22 million which, together with subsequent exploratory drilling costs of wells had been capitalised under exploratory wells in progress. During 2012-13, the Company had acquired the remaining 10% participating interest in the block from M/s Cairn Energy India Ltd on actual past cost basis for a consideration of Rs.2124.44 million. Initial in-place reserves were established in this block and adhering to original PSC time lines, a Declaration of commerciality (DOC) with a conceptual cluster development plan was submitted on December 21, 2009 for Southern Discovery Area and on July 15, 2010 for Northern Discovery Area. Thereafter, in the revised DOC submitted in December, 2013, Cluster-wise development of the Block had been envisaged by division of entire development area into three clusters. The DOC in respect of Cluster II had been reviewed by the Management Committee (MC) of the block on September 25, 2014. Field Development Plan (FDP) for Cluster-II was submitted on September 8, 2015 and the same had been approved by MC on March 31, 2016. Investment decision has been approved by the Company. Work on the block has started and is in progress. The exploration period of this block was restructured byGovernment upto December 29, 2013 in accordance with the Rig Holiday Policy and further extended to January 25, 2014. Under the new policy framework for relaxation, extensions and clarifications at the development and production stage under the PSC regime notified by MoP&NG vide GO dated November 11, 2014; drilling and testing of appraisal wells were completed. Revised DOC for Clusters I and III were submitted to MC for review on April 27, 2016. The DOC for Cluster-I has been reviewed by MC on December 14, 2016. FDP for Cluster-I is under preparation. Revised DOC of Cluster-III is under review by MC and on completion of review, FDP will be prepared. In view of the definite plans for development of discoveries in the block, in FY 2015-16, the Company had reversed provision of Rs.15,482.32 million recognised in the past. 9.1.1 The Company has elected to continue with the carrying value of its investments in subsidiaries, joint ventures and associates, measured as per the Previous GAAP and used that carrying value on the transition date April 1, 2015 in terms of Para D15 (b) (ii) of Ind AS 101 âFirst -time Adoption of Indian Accounting Standardsâ. 9.1.2 ONGC Mangalore Petrochemicals Limited has been classified as subsidiary as the Company holds 48.99% ownership interest and its subsidiary Mangalore Refinery and Petrochemicals Limited holds 51.01%. 9.1.3 Petronet LNG Limited (PLL) was classified as Joint Venture in Previous GAAP, however, in terms of Para 7 of Ind AS 111 âJoint Arrangementsâ, unanimous consent of all promoters is not required in relevant activities in PLL and therefore PLL is not classified as Joint Venture. Since the Company has significant influence on PLL, the same has been assessed and classified as an Associate. 9.1.4 The Company is restrained from diluting the investment in the respective companies till the sponsored loans are fully repaid as per the covenants in the respective loan agreements of the companies. 9.2.1 The amount of Rs.30.53 million (Previous year Rs.26.05 million) shown as deemed equity investments denotes the fair value of fees towards financial guarantee given for Mangalore Refinery and Petrochemicals Limited without any consideration. 9.2.2 The amount ofRs.5,259.47 million ( Previous year Rs.54,807.29 million) shown as deemed equity investments in respect of ONGC Videsh Limited includes (i) Loan Rs.Nil (Previous year Rs.50,000.00million) which has been converted into equity shares in 2016-17, (ii) Rs.3,674.35 million (Previous year Rs.2,753.34 million) towards the fair value of guarantee fee on financial guarantee given without any consideration and (iii) Rs.1,585.11 million (Previous year Rs.2,053.94 million) towards fair value of interest free loan. 9.2.3 During 2015-16, the Company had subscrib ed Share Warrants of ONGC Petro Additions Limited, entitling the Company to exchange each warrant with Equity Share of Face Value of Rs.10/- each after a balance payment of Rs.0.25/- per equity share within forty eight months of subscription of the Share warrants issued on August 25, 2015. 9.2.4 The Company had entered into an arrangement on July 2, 2016 for backstopping support towards repayment of principal and cumulative coupon amount for compulsory convertible debentures amounting to Rs.56,150.00 million issued by ONGC Petro Additions Limited and interest for the year ending March 31, 2017 amounting to Rs.3,612.06 million 9.2.5 The aggregate investments in each subsidiary, associates and joint ventures is as follows: 10.1 Generally, the Company enters into long-term crude oil and gas sales arrangement with its customers. The average credit period on sales of crude, gas and value added products is 7 - 30 days. No interest is charged during this credit period. Thereafter,interest on delayed payments is charged at SBI Base rate plus 4%-6% per annum compounded each quarter on the outstanding balance. Of the trade receivables balance as at March 31, 2017 of Rs.54,071.42 million (as at March 31, 2016 of Rs.47,815.95 million; as at April 1, 2015 of Rs.128,226.21 million) is due from Oil Marketing Companies, the Companyâs largest customers. There are no other customers who represent more than 5% of the total balance of trade receivables. Accordingly, the Company assesses impairment loss on dues from Oil Marketing Companies on facts and circumstances relevant to each transaction. The Company has concentration of credit risk due to the fact that the Company has significant receivables from Oil Marketing Companies. However, these companies are reputed and creditworthy public sector undertakings (PSUs). 10.2 Includes Rs.126.39 million and Rs.91.71 million due from Indian Oil Corporation Limited (IOC) and Numaligarh Refinery Limited (NRL) respectively towards Value Added Tax on discount that could not be adjusted in credit notes in view of Assam VAT amendment Act, 2014. The matter is being pursued with IOC, NRL and Government of Assam. 11.1 Loans to employees include an amount of Rs.0.72 million (As at March 31, 2016 Rs.1.66 million; As at April 1, 2015 Rs.1.04 million) outstanding from Key Managerial Personnel. The above amount has been deposited with banks under section 33ABA of the Income Tax Act, 1961 and can be withdrawn only for the purposes specified in the Scheme i.e. towards removal of equipmentâs and installations in a manner agreed with Central Government pursuant to an abandonment plan to prevent hazards to life, property, environment etc. This amount is considered as restricted cash and hence not considered as âCash and cash equivalentsâ. 12.1 During the financial year 2010-11, the Oil Marketing Companies, nominees of the GoI recovered USD 32.07 million (equivalent to Rs.2,079.90 million) ONGCâs share as per directives of GoI in respect of Joint Operation - PannaMukta and Tapti. The recovery is towards certain observations raised by auditors appointed by the Director General of Hydrocarbons (DGH) under Production Sharing Contract (PSC) for the period 200203 to 2005-06 in respect of cost and profit petroleum share payable to GoI. BGEPIL along with RIL (âClaimantsâ) have served a notice of arbitration on the GoI in respect of dispute, differences and claims arisen in connection with the terms of Panna, Mukta and Tapti PSCs. Since the Company is not a party to the arbitration proceedings, it had requested MoP&NG that in case of an arbitral award the same be made applicable to ONGC also, as a constituent of contractor for both the PSCs. Subsequently, vide letter dated July 4, 2011 MoP&NG has advised ONGC not to participate in the arbitration initiated by RIL and BGEPIL under Panna Mukta and Tapti PSCs. MoP&NG has also stated that in case of an arbitral award, the same will be applicable to ONGC also as a constituent of the contractor for both the PSCs. Pending final arbitral award, the same has been shown as Receivable from GoI under âAdvance Recoverable in Cash under financial assets -others. (Figures in âare restated). 12.2 In Ravva Joint Operation, the demand towards additional profit petroleum raised by Government of India (GoI), due to differences in interpretation of the provisions of the Production Sharing Contract (PSC) in respect of computation of Post Tax Rate of Return (PTRR), based on the decision of the Malaysian High Court setting aside an earlier arbitral tribunal award in favor of operator, was disputed by the operator M/s Cairn India Limited. The Company is not a party to the dispute but has agreed to abide by the decision applicable to the operator. The Company had made an impairment towards the claim made by the GoI in earlier years and the amount of impairment outstanding as at March 31, 2017 is Rs.10,884.73 million (equivalent to USD 167.84 million) after adjustments for interest and exchange rate fluctuations. The GoI had recovered the above amount including interest thereon USD 54.88 million ( Rs.3,558.97 million) from the Company in earlier years which has been carried under Non-Current Financial Assets in the Balance Sheet as at March 31,2017. In subsequent legal proceedings, the Appellate Authority of the Honorable Malaysian High Court of Kuala Lumpur had set aside the decision of the Malaysian High Court and the earlier decision of arbitral tribunal in favour of operator was restored, against which the GoI has preferred an appeal before the Federal Court of Malaysia. The Federal Court of Malaysia, vide its order dated October 11, 2011, has dismissed the said appeal of the GoI. The Company has taken up the matter regarding refund of the recoveries made in view of the favorable judgment of the Federal Court of Malaysia with MoP&NG. However, according to a communication dated January 13, 2012 received, MoP&NG expressed the view that ONGCâs proposal would be examined when the issue of ONGC carry under Ravva PSC is decided in its entirety by the Government along with other partners. In view of the perceived uncertainties in obtaining the refund at this stage, the impairment made in the books as above has been retained and netted off against the amount recoverable as above in the Financial Statements for the year ending March 31, 2017. (Figures in âare restated). 13.1 Includes Nil under current assets (As at March 31, 2016 Rs.21,690.24 million; As at April 1, 2015 Rs.21,067.60 million) towards differential royalty being deposited from February 1, 2014 as per the interim order of the Honâble Supreme Court of India. (Note. 49.1.b) 14.1 This includes an amount of Rs.2.15 million (as at March 31, 2016 Rs.3.37 million; as at April 1, 2015 Rs.7.68 million) in respect of Carbon Credits. 14.2 Inventory amounting to Rs.81.58 million (as at March 31, 2016 Rs.105.26 million) has been valued at net realisable value. Write down amounting to Rs.24.40 million (as at March 31, 2016 Rs.149.45 million) has been recognised as expense in the Statement of Profit and Loss under note 35. 15.1 The deposits maintained by the Company with banks comprise time deposit, which can be withdrawn by the Company at any point without prior notice or penalty on the principal (Note 28.1). 15.2 Amount deposited in unclaimed dividend account is earmarked for payment of dividend and cannot be used for any other purpose. No amount is due for deposit in Investor Education and Protection Fund. 15.3 Matter of Dispute on Delivery Point of Panna-Mukta gas between Government of India and PMT JO Partners arose due to differing interpretation of relevant PSC clauses. According to the JO Partners, Delivery Point for Panna-Mukta gas is at Offshore, however, MoP&NG and GAIL maintained that the delivery point is onshore at Hazira. The gas produced from Panna-Mukta fields was transported through Companyâs pipelines. Owing to the delivery point dispute neither the seller (PMT JO) nor the buyer of gas (GAIL) was paying any compensation to ONGC for usage of its pipeline for gas transportation. Honâble Gujarat High Court decided that the Panna Mukta oil fields from where the movement of goods is occasioned fall within the customs frontiers of India Consequently, the sale of goods cannot be said to have taken place in the course of import of goods into the territory of India. The state Government of Gujarat has filed a petition with the Honâble Supreme Court of India against the decision of Honâble Gujarat High Court. Since the said matter of determination of delivery point is pending with the Honâble Supreme Court of India, the amount is maintained in the escrow accounts by the JO Partners. 16.1 On transition date, the Company reclassified Two Helicopters (âthe Helicoptersâ) as âAssets classified as held for saleâ. During the current year, the Helicopters have been sold for total consideration of Rs.147.81 million resulting in profit on sale of non-current asset ofRs.124.07 million recorded under âOther Incomeâ. (Note 32). 16.2 Terms/rights attached to equity shares The Company has only one class of equity shares having a par value of Rs.5 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to 16.3 Pursuant to the approval of the shareholders accorded by postal ballot on December 12, 2016 record date for ascertaining the eligibility of the shareholders for receiving the bonus shares was fixed on December 16, 2016. Accordingly, the Company has allotted 4,277,745,060 number of fully paid Bonus shares on December 18, 2016 in the ratio of one equity share of Rs.5 each fully paid up for every two existing equity shares of Rs.5 each fully paid up. 16.4 18,972 equity shares of Rs.10 each (equivalent to 37,944 equity shares of Rs.5 each) were forfeited in the year 2006-07 against which amount originally paid up was Rs.0.15 million. 17.1 Represent assessed value of assets received as gift. 17.2 The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are disposed. 17.3 The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another. 17.4 The amount that can be distributed by the Company as dividends to its equity shareholders is determined considering the requirements of the Companies Act, 2013 and the dividend distribution policy of the Company. Thus, the amount reported in General Reserve is not entirely distributable. 18.1 As per the lease agreement, the Company is required to pay annual lease rental of Rs.35.03 million till perpetuity. The finance lease obligation represents the perpetuity value of annualized lease payment, which is Rs.417.96 million. On August 23, 2016, a final dividend of Rs.3.25 per share for 2015-16 was paid to holders of fully paid equity shares. On October 27, 2016 and on January 31, 2017 the Company had declared interim dividend ofRs.4.50 per share (90%) and Rs.2.25 per share (45%) respectively which has since been paid. In respect of the year ended March 31, 2017, the Board of Directors has proposed a final dividend ofâ.0.80 per share be paid on fully paid equity shares. This equity dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The proposed equity dividend is payable to all holders of fully paid equity shares. The total estimated equity dividend to be paid is Rs.10,266.61 million and the dividend distribution tax thereon amounts to Rs.2,090.04 million. 18.2 The Company estimates provision for decommissioning as per the principles of Ind AS 37 âProvisions, Contingent Liabilities and Contingent Assetsâ for the future decommissioning of Oil and Gas assets at the end of their economic lives. Most of these decommissioning activities would be in the future for which the exact requirements that may have to be met when the removal events occur are uncertain. Technologies and costs for decommissioning are constantly changing. The timing and amounts of future cash flows are subject to significant uncertainty. The economic life of the Oil and Gas assets is estimated on the basis of long term production profile of the relevant Oil and Gas asset. The timing and amount of future expenditures are reviewed annually, together with rate of inflation for escalation of current cost estimates and the interest rate used in discounting the cash flows. 19.1 This represents the fair value of fee towards financial guarantee issued on behalf of subsidiaries, recognised as financial guarantee obligation with corresponding debit to investment in subsidiaries. 19.2 No amount is due for deposit in Investor Education and Protection Fund. 19.3 Decommissioning provision in respect to PMT Joint Operation was provided based on the technical estimates of the Company till previous year. During the year, the said provision has been provided based on the technical estimates provided by the operator of the Joint Operation. As a result decommissioning provision is higher by Rs.11,143. 47 million and depletion for the year is higher by Rs.4,080.36 million in respect of PMT Joint Operation. 20.1 Includes Rs.7,615.73 million in respect of Tapti A series assets, facilities and inventory which were a part of the assets of PMT Joint Operation and surrendered by the JO to the Government of India as per the terms and conditions of the JO Agreement. During the year these assets, facilities and inventory have been transferred by Government of India to the Company free of cost as its nominee. The Company has assessed the fair value of the said assets & facilities at Rs.7,156.89 million based on the valuation report by a third party agency, which has been accounted as Capital work in progress with a corresponding liability as Deferred Government Grant. Inventory valuing Rs.458.84 million has been accounted with a corresponding liability as Deferred Government Grant. 20.2 Includes Rs.8.57 million is on account of reimbursement of capital expenditure of research & development. 21.1 Secured against NIL (as at March 31, 2016 NIL; As at April 1, 2015 Rs.17,340 million) of principal amount of Term deposit receipt. 22.1 No discount was given by the Company to the Oil Marketing Companies during the year (Previous year Rs.10,961.20 Million). 22.2 Revenue from nominated crude (except North East crude) is accounted for in terms of Crude Oil Sales Agreements (COSAs) signed and made effective from April 1, 2010. For Crude Oil produced in Assam, sales revenue is based on the pricing formula provided by Ministry of Petroleum and Natural Gas, Government of India. 22.3 Sales revenue of Natural Gas is based on domestic gas price of US$ 3.06/mmbtu and US$ 2.50/mmbtu (on GCV basis) notified by GoI for the period April 1, 2016 to September 30, 2016 and October 1, 2016 to March 31, 2017 respectively in terms of âNew Domestic Natural Gas Pricing Guidelines, 2014â. For gas consumers in North-East, consumer price is 60% of the domestic gas price and the difference between domestic gas price and consumer price is paid to the Company through GoI Budget and classified as âNorth-East Gas Subsidyâ. 22.4 The Company is supplying majority of Natural gas to GAIL (India) Limited which also purchases gas from other sources and sells to different consumers at different prices. Based on the Government directives, excess in Gas Pool Account at the end of financial year is transferred to ONGC/Oil India Limited in accordance with their contribution. Based on the details received from GAIL (India) Limited, the said amount has been classified as âSurplus from Gas Pool Accountâ. 23.1 Pay revision of officers and unionized category is due w.e.f. 01.01.2017. Pending finalization of the same, the Company has provided for a sum of Rs.19,440.72 million as estimated by the management including long term benefit obligation viz. leave, gratuity (at max limit of Rs.2.00 million) etc. The same has been allocated to activities as per the policy of the Company. 23.2 The CSR expenditure comprises the following: (a) Gross amount required to be spent by the Company during the year: Rs.5,356.66 million (Previous year Rs.5,936.96 million) (b) Amount spent during the year on: 24.1 The Company has allotted 4,277,745,060 number of fully paid Bonus shares on December 18, 2016 in the ratio of one equity share of Rs.5 each fully paid up for every two existing equity shares of Rs.5 each fully paid up. In accordance with Ind AS 33 âEarnings per Shareâ, basic and diluted earnings per equity share have been adjusted for bonus issue for previous year. 25. Leases 25.1 Finance leases Leasing arrangements Leasehold land where lease term is till perpetuity has been classified under finance lease. 25.2 Operating lease arrangements 25.2.1 Leasing arrangements The Company has applied Appendix C to Ind AS 17 âLeasesâ to hiring/service contracts of rigs, vessels, helicopters, etc. to evaluate whether these contracts contains a lease or not. Based on evaluation of the terms and conditions of the arrangements, the Company has of the Company is to make such fixed contribution and to ensure a minimum rate of return to the members as specified by Government of India. As per report of the actuary, overall interest earnings and cumulative surplus is more than the statutory interest payment requirement. Hence, no further provision is considered necessary. The details of fair value of plan assets and obligations are as under: 26. Employee benefit plans 26.1 Defined Contribution plans: 26.1.1 Provident Fund The Company pays fixed contribution to provident fund at predetermined rates to a separate trust, which invests the funds in permitted securities. The obligation evaluated such arrangements to be operating leases. Operating leases relate to leases of rigs, vessels, helicopters etc. with lease terms upto 10 years. The Company does not have an option to purchase the leased rigs, vessels, helicopters etc. at the expiry of the lease periods. Provident Fund is governed through a separate trust. The board of trustees of the Trust functions in accordance with any applicable guidelines or directions that may be issued in this behalf from time to time by the Central Government or the Central Provident Fund Commissioner, the board of trustees have the following responsibilities: (i) Investments of the surplus as per the pattern notified by the Government in this regard so as to meet the requirements of the fund from time to time. (ii) Raising of moneys as may be required for the purposes of the fund by sale, hypothecation or pledge of the investment wholly or partially. (iii) Fixation of rate of interest to be credited to membersâ accounts. 26.1.2 Post Retirement Benefit Scheme The defined contribution pension scheme of the Company for its employees is administered through a separate trust. The obligation of the Company is to contribute to the trust to the extent of amount not exceeding 30% of basic pay and dearness allowance less employerâs contribution towards provident fund, gratuity, post-retirement medical Benefit (PRMB) or any other retirement benefits. The board of trustees of the Trust functions in accordance with any applicable guidelines or directions that may be issued in this behalf from time to time by the Central Government, the board of trustees have the following responsibilities: (i) Investments of the surplus as per the pattern notified by the Government in this regard so as to meet the requirements of the fund from time to time. (ii) Fixation of rate of contribution and interest thereon. (iii) Purchase of annuities for the members. 26.2 Employee Pension Scheme 1995 The Employee Pension Scheme -1995 is administered by Employees Provident Fund Organization of India, wherein the Company has to contribute 8.33% of salary (subject to maximum of Rs.15,000 per month) out of the employerâs contribution to Provident Fund. 26.3 Composite Social Security Scheme (CSSS) The Composite Social Security Scheme is formulated by the Company for the welfare of its regular employees and it is administered through a separate Trust, named as Composite Social Security Scheme Trust. The obligation of the Company is to provide matching contribution to the Trust to the extent of contribution of the regular employees of the Company. The Trust provides an assured lump sum support amount in the event of death or permanent total disablement of an employee while in service. In case of Separation other than Death/Permanent total disability, employees own contribution along with interest is refunded. The Board of trustees of the Trust functions in accordance with Trust deed, Rule, Scheme and applicable guidelines or directions that may be issued by Management from time to time. The Board of trustees has the following responsibilities (i) Investments of the surplus as per the pattern notified by the Government in this regard so as to meet the requirements of the fund from time to time. (ii) Fixation of rate of interest to be credited to membersâ accounts. (iii) To provide cash benefits to the nominees in the event of death of an employee or Permanent Total Disablement leading to the cessation from service and refund of own contribution along with interest in case of separation other than death. 26.4 The amounts recognized in the financial statements before allocation for the defined contribution plans are as under: 26.5 Defined benefit plans 26.5.1 Brief Description: A general description of the type of Employee Benefits Plans is as follows: 26.5.2 All the employee benefit plans of the Company are run as Group administration plans (Single Employer Scheme) including employees seconded to ONGC Videsh Limited (OVL), 100% subsidiary. 26.5.3 Gratuity 15 days salary for each completed year of service. Vesting period is 5 years and the payment is restricted to Rs.1 million on superannuation, resignation, termination, disablement or on death. Scheme is funded through own Gratuity Trust. The liability for gratuity as above is recognized on the basis of actuarial valuation. For the purpose of actuarial valuation and provision there of the maximum limit of gratuity payable w.e.f January 1, 2017 has been considered at Rs.2 million in line with the 3rd Pay Revision Committee report submitted to Government of India. 26.5.4 Post-Retirement Medical Benefits The Company has Post-Retirement Medical benefit (PRMB), under which the retired employees, dependent parents and their spouses are provided medical facilities in the Company hospitals/empanelled hospitals up on payment of one time prescribed contribution by the employees. They can also avail treatment as outpatient. The liability for the same is recognized annually on the basis of actuarial valuation. Full medical benefits on superannuation and on voluntary retirement are available subject to the completion of minimum 20 years of service and 50 years of age. An employee should have put in a minimum of 15 years of service rendered in continuity in ONGC at the time of superannuation to be eligible for availing post-retirement medical facilities. 26.5.5 Terminal Benefits At the time of superannuation, employees are entitled to settle at a place of their choice and they are eligible for Settlement Allowance. 26.5.6 These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk. 26.6.4 Good Health Reward (Half pay leave) Accrual - 20 days per year Encashment while in service - Nil Encashment on retirement - 50% of Half Pay Leave balance. Scheme is funded through Life Insurance Corporation of India. (LIC). The liability for the same is recognized annually on the basis of actuarial valuation. 26.7 The principal assumptions used for the purposes of the actuarial valuations were as follows. No other post-retirement benefits are provided to these employees. In respect of the above plans, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at March 31, 2017 by a member firm of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method. 26.6 Other long term employee benefits 26.6.1 Brief Description: A general description of the type of Other long term employee benefits is as follows: 26.6.2 All the employee benefit plans of the Company are run as Group administration plans (Single Employer Scheme) including employees seconded to ONGC Videsh Limited (OVL), 100% subsidiary. 26.6.3 Earned Leave (EL) Benefit Accrual - 30 days per year Encashment while in service - 75% of Earned Leave balance subject to a maximum of 90 days per calendar year Encashment on retirement - maximum 300 days Scheme is funded through Life Insurance Corporation of India (LIC). The discount rate is based upon the market yield available on Government bonds at the Accounting date with a term that matches. The salary growth takes account inflation, seniority, promotion and other relevant factors on long term basis. Expected rate of return on plan assets is based on market expectation, at the beginning of the year, for return over the entire life of the related obligation. Expected Contribution in respect of Gratuity for next year will be Rs.1904.73 million (For the year ended March 31, 2016 Rs.739.45 million) The Company has recognized a gratuity liability of Rs.78.78 as on March 31, 2017 (As at March 31, 2016 Rs.82.30 million; As at April 1, 2015 Rs.78.72 million) as per actuarial valuation for 228 (415 As at March 31, 2016; 558 as at April 1, 2015) contingent Employees engaged in different work centres. 26.7.1 The fair values of the above equity and debt instruments are determined based on quoted market prices in active markets. 26.7.2 Cost of Investment is taken as fair value of Investment in Unit Linked Plan of Insurance Company (ULIPs) and Bank TDR. 26.7.3 All Investments in PSU Bonds, G Sec and T Bill are quoted in active market. 26.7.4 Fair value of Investment in Group Gratuity Cash Accumulation Scheme (Traditional Fund) of Insurance Company is taken as book value on reporting date. 26.7.5 Net Current Assets represent Accrued Interest on Investments minus outstanding gratuity reimbursements as on reporting date. 26.7.6 The actual return on plan assets of gratuity during FY 2016-17 was Rs.1,888.26 million(during FY 2015-16 Rs.1,689.33 million) and for Leave Rs.1,739.55 million (during FY 2015-16 Rs.1,691.87 million).
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Sensitivity due to mortality & withdrawals are not material & hence impact of change not calculated. 26.8 Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected salary increase. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet. 27. Segment Reporting 27.1 The Company has identified and reported segments taking into account the different risks and returns, the organization structure and the internal reporting systems. Accordingly, the Company has identified following geographical segments as reportable segments A. Offshore B. Onshore 27.2 Segment revenue and results 27.2.1 The following is an analysis of the Companyâs revenue and results from continuing operations by reportable segment. 27.2.2 Segment revenue reported above represents revenue generated from external customers. There were no inter-segment sale in the current year (year ended March 31st, 2016: Nil) 27.2.3 The accounting policies of the reportable segments are the same as the Companyâs accounting policies described in Note 3. Segment profit represents the profit before tax earned by each segment excluding finance cost and other income like interest/dividend income. This is the measure reported to the Chief Operating Decision maker for the purposes of resource allocation and assessment of segment performance. For the purpose of monitoring segment performance and allocating resources between segments: 27.3.1 All assets are allocated to reportable segments other than investments in subsidiaries, associates and joint ventures, other investments, loans and current and deferred tax assets. 27.3.2 All liabilities are allocated to reportable segment other than borrowing, current and deferred tax liabilities. 27.3.3 Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segments and amount allocated on reasonable basis. Unallocated expenditure includes common expenditure incurred for all the segments and expenses incurred at the corporate level. Finance cost includes unwinding of discount on decommissioning provisions not allocated to segment. 27.4 Information about major customers Companyâs significant revenues (more than 85%) are derived from sales to Public Sector Undertakings. The total sales to such companies amounted to Rs.682,865.03 million in 2016-17 and Rs.694,590.86 million in 2015-16. No other single customer contributed 10% or more to the Companyâs revenue for 2016-17 and 2015-16. 27.5 Information about geographical areas: The Company is domiciled in India. The amount of its revenue from external customers broken down by location of customers is tabulated below: The total of non-current assets other than financial instruments, deferred tax assets, post-employment benefit assets, broken down by location of assets are shown below: 27.6 Information about products and services: The Company derives revenue from sale of crude oil, natural gas and value added products. The information about revenues from external customers about each product is disclosed in Note no. 31.5 of the financial statements. 28. Related Party Disclosures 28.1 Name of related parties and description of relationship: Notes: 28.1.1 Subsidiary Company OVL has 47.52% effective ownership interest, but it has 55.90% of voting rights in LLC Sibinterneft. 28.1.2 LLC Imperial Frac Services is under liquidation. 28.2 Details of Transactions: 28.2.3 The loan is unsecured carrying interest rate of 8.12% based on G-sec yield for 5 years tenor as per FIMMDA of 7.72 % plus spread of 0.40 bps (previous year 10.6% based on SBAR minus 3.85%) and is recoverable in half-yearly installments by financial year 2020-21. 28.2.4 The loan is Interest free and unsecured. The loan has been granted to fund the OVLâs overseas projects and is recoverable out of the surplus cash flows arising from the projects. However, Company has the right to demand loan by serving a notice period of 15 months. Pending the final approval of Government for conversion of loan into equity, loan to the extent of Rs.50,000.00 million has been re-classified as deemed equity as on April 1, 2015 & March 3, 2016 respectively based on approval of board. During the year, the Company has received Government approval for such conversion and accordingly the same has been converted into equity. The remaining loan has been fair valued based on effective interest rate (EIR) method as per Ind AS-32 and the same has been presented in balance sheet. The fair value of remaining OVL loan Rs.163.45 million (previous year Rs.6687.64 million) base on effective interest rate 8.12% (previous year 10.60% ) is included in note 12. 28.2.9 The loan in previous year was secured by hypothecation of 7 new Helicopters and carries interest rate of 10.80% based on SBI base rate plus 1.5% and is recoverable in sixty equal monthly installments starting from loan granted which has been recovered in full by 2016-17. The above transactions with the government related entities cover transactions that are significant individually and collectively. The Company has also entered into other transactions such as telephone expenses, air travel, fuel purchase and deposits etc. with above mentioned and other various government related entities. These transactions are insignificant individually and collectively and hence not disclosed. 29. Financial instruments Disclosure 29.1 Capital Management The Companyâs objective when managing capital is to: - Safeguard its ability to continue as going concern so that the Company is able to provide maximum return to stakeholders and benefits for other stakeholders; and - Maintain an optimal capital structure to reduce the cost of capital. The Company maintains its financial framework to support the pursuit of value growth for shareholders, while ensuring a secure financial base. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The capital structure of the Company consists of total equity (Refer Note 21 & 22). The Company is not subject to any externally imposed capital requirements. The Companyâs financial management committee reviews the capital structure on a regular basis. As part of this review, the committee considers the cost of capital, risks associated with each class of capital requirements and maintenance of adequate liquidity. 29.1.1 Gearing Ratio The Company has no outstanding debt as at the end of reporting period. Accordingly, the Company has zero gearing ratio as at March 31, 2017 and March 31, 2016. Gearing ratio was 0.0096 as at April 1, 2015. 29.3 Financial risk management objectives While ensuring liquidity is sufficient to meet Companyâs operational requirements, the Companyâs financial management committee also monitors and manages key financial risks relating to the operations of the Company by analyzing exposures by degree and magnitude of risks. These risks include market risk (including currency risk and price risk), credit risk and liquidity risk. 29.4 Market Risk Market risk is the risk or uncertainty arising from possible market price movements and their impact on the future performance of a business. The major components of market risk are commodity price risk, foreign currency risk and interest rate risk. The primary commodity price risks that the Company is exposed to include international crude oil prices that could adversely affect the value of the Companyâs financial assets or expected future cash flows. Substantial or extended decline in international prices of crude oil and natural gas may have an adverse effect on the Companyâs reported results. 29.5 Foreign currency risk management Sale price of crude oil is denominated in United States dollar (USD) though billed and received in Indian Rupees (INR). The Company is, therefore, exposed to foreign currency risk principally out ofINR appreciating against USD. Foreign currency risks on account of receipts/revenue and payments/expenses are managed by netting off naturally-occurring opposite exposures through export earnings, wherever possible and carry unhedged exposures for the residual considering the natural hedge available to it from domestic sales. The Company undertakes transactions denominated in different foreign currencies and consequently exposed to exchange rate fluctuations. Exchange rate exposures are managed within approved policy parameters. The carrying amounts of the Companyâs foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows. In managementâs opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year. Sensitivity of profit or loss before tax to change in /- 1 USD in prices of crude oil, natural gas & value added products (VAP) and /- Re. 1 in exchange rate between INR-USD currency pair is presented as under: 29.5.1 Foreign currency sensitivity analysis The Company is principally exposed to foreign currency risk against USD. Sensitivity of profit or loss arises mainly from USD denominated receivables and payables. As per managementâs assessment of reasonable possible changes in the exchange rate of /- 5% between USD-INR currency pair, sensitivity of profit or loss only on outstanding foreign currency denominated monetary items at the period end is presented below: 29.5.2 Forward foreign exchange contracts The Company has not entered into any forward foreign exchange contracts during the reporting period. 29.6 Interest rate risk The Company has not availed borrowings, hence is not exposed to interest rate risk. 29.7 Price risks The Companyâs equity securities price risk arises from investments held and classified in the balance sheet either at fair value through OCI or at fair value through profit or loss. The Companyâs equity investments in IOC and GAIL are publicly traded. Investment of short-term surplus funds of the Company in liquid schemes of mutual funds provides high level of liquidity from a portfolio of money market securities and high quality debt and categorized as âlow riskâ product from liquidity and interest rate risk perspectives. 29.7.1 Price sensitivity analysis The sensitivity of profit or loss in respect of investments in equity shares and mutual funds at the end of the reporting period for /-5% change in price and net asset value is presented below: - Profit before tax for the year ended March 31, 2017 would increase/decrease by Rs.1,817.16 million (For the year ended March 31, 2016 would increase/decrease by Rs.1,501.62 million) as a result of 5% changes in net asset value of investment in mutual funds; and - Other comprehensive income for the year ended March 31, 2017 would increase/decrease by Rs.14,478.68 million (for the year en
Mar 31, 2016
1. Terms/rights attached to equity shares The company has only one class of equity shares having a par value of Rs, 5 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. * Represents the amount equivalent to depreciation transferred to the Statement of Profit and Loss. 2. Represents assessed value of assets received as gif t. 3. The Board of Directors has recommended a final dividend of Rs, 3.25 per share (previous year Rs, 0.50 per share) which is subject to the approval of the shareholders in the ensuing Annual General Meeting over and above the interim dividend of Rs, 5.25 per share (Previous year Rs, 9.00 per share). 12.1 In terms of guidance note on accounting for Oil & Gas Producing Activities (Revised 2013) and EAC opinion Issued by the Institute of Chartered Accountants of India (ICAI), the Company has transferred Producing Properties as "Oil and Gas Assets" under Tangible Assets. Net book value of Assets pertaining to production & allied facilities has been transferred from other tangible assets to reflect the aggregate amount of âOil and Gas Assets". Accordingly, the company has w.e.f. 01.04.2015, made changes in accounting estimates by changing the useful life of certain production & allied facilities shown as Oil and Gas Assets by linking it with the respective Oil & Gas reserves for the purpose of charging depletion on such Oil & Gas Assets. Such change in accounting estimates has been accounted for prospectively as per Accounting Standard (AS)-5. Consequent to such change, the "Depreciation and amortization expenses" for the year ended 31st March 2016 is lower by Rs, 848.89 million and the profit before tax for the year ended 31 st March 2016 is higher by Rs, 848.89 million. 4. During the year, the company has reviewed and changed the accounting treatment of charging off the water injector side track wells which are service wells drilled for the purpose of supporting production from the existing offshore fields, in line with Guidance note on accounting for Oil 8 Gas Producing Activities (Revised 2013) issued by ICAI. Accordingly, an amount of Rs, 4,212.57 million in respect of such wells has been capitalized under Oil & Gas Assets and consequently profit before tax for the year ended 31st March'' 2016 is higher by Rs, 3,656.47 million. Vehicles includes Survey Ships. Crew Boats and Helicopters. (Refer note no.32.2) Notes 5. Land includes 173 (no''s) of lands in respect of certain projects amounting to Rs,1,863.63 million (Net Block) for which execution of lease âconveyance deeds is in process. 6. Registration of title deeds in respect of 12 (no''s) Buildings is pending execution amounting to Rs, 64.94 million (Net Block) 7. Depreciation for the year includes Rs, 410.45 million pertaining to prior period (Previous Year Rs, -0.04 million). 8. Building includes cost of undivided interest in land. 9. Ministry of Corporate Affairs (MCA) vide notification dated August 29.2014 had amended Schedule 11 to the Companies Act. 2013 recuing mandatory component to Don of fixed assets for financial statements in respect of financial years commencing on or after 1st April 2015. During me year the company has under taken me coinponentization ol fixed assets w.e.f. 01.04.2015 on me basis of technical evaluation and useful life thereof. Consequently, the'' Depreciation, Depletion and amortization expenses'' is higher by 7 97.20 million for the year ended 31 st March 2016 and the profit before tax x for the year ended 31 st March 2016 is tower by Rs, 97 20 million. 10. Deletion Adjustment Veterans for dung me year includes assets transferred to Oil & Gas Assets. (Refer note 12.1) 11. The company had acquired in FY 2004-05. 90% Participating Interest in Exploration Block KG-DWN-98/2 tom M/s Cairn Energy India Limited to a lump sum consideration of Rs, 3.711.22 million which, together with subsequent exploratory drilling costs of wells had been capitalized under exploratory wells in progress. In FY 2012-13, the company had acquired the remaining 10% participating interest in the block from M/s Cairn Energy India Limited. On actual past cost basis for a consideration of Rs, 2124.44 million. Initial in-place reserves were established in this block and adhering to the original PSC time lines, a Declaration of commerciality (DOC) with a conceptual cluster development plan was submitted on 21.12.2009 for Southern Discovery Area and on 15.07.2010 for Northern Discovery Area. Thereafter, in the revised DOC submitted in December. 2013, Cluster-wise development of the Block had been envisaged by division of entire development area into three clusters. The DOC in respect of Cluster II had been reviewed by the Management Committee (MC) of the block on 25.09.2014. Field Development Plan (FDP) for Cluster-ll was submitted on 08.09.2015 and the same had been approved by MC on 31.3.2016. The exploration period of this block had been restructured by Government up to 29.12.2013 in accordance with the Rig Holiday Policy and further extended to 25.01.2014. Under the new policy framework for relaxation, extensions and clarifications at the development and production stage under the PSC regime notified by MoP&NG vide GO dated 10.11.2014; drilling and testing of appraisal wells were completed. Revised DOC for Clusters I and III has been submitted to MC for review on 27.04.2016. In view of the definite plans for development of discoveries in the block, the company has reversed a provision of 7 15,482.32 million created in the past. 12. Loans and advances to employees include an amount of 7 0.13 million (Previous Year Rs, 0.24 million) outstanding from Key Managerial Personnel. 13. In Ravva Joint Venture, the demand towards additional profit petroleum raised by Government of India (Gol), due to differences in interpretation of the provisions of the Production Sharing Contract (PSC) in respect of computation of Post Tax Rate of Return (PTRR), based on the decision of the Malaysian High Court setting aside an earlier arbitral tribunal award in favor of operator, was disputed by the operator M/s Cairn India Limited. The company is not a party to the dispute but has agreed to abide by the decision applicable to the operator. The company had made a provision towards the claim made by the Gol in earlier years and the amount of provision outstanding as on 31 st March, 2016 is Rs, 11,136.49 million (equivalent to USD 167.84 million) after adjustments for interest and exchange rate fluctuations. The Gol had recovered the above amount (including interest thereon USD 54.88 million (Rs, 3,641.29 million )] from the company in earlier years which has been carried under Long Term Loans and advances in the Balance Sheet as at 31st March 2016. In subsequent legal proceedings, the Appellate Authority of the Honorable Malaysian High Court of Kuala Lumpur had set aside the decision of the Malaysian High Court and the earlier decision of arbitral tribunal in favour of operator was restored, against which the Gol has preferred an appeal before the Federal Court of Malaysia. The Federal Court of Malaysia, vide its order dated 11th October. 2011, has dismissed the said appeal of the Gol. The company has taken up the matter regarding refund of the recoveries made in view of the favorable judgment of the Federal Court of Malaysia with MoP&NG. However, according to a communication dated 13th January 2012 received, MoP&NG expressed the view that ONGC''s proposal would be examined when the issue of ONGC carry under Ravva PSC is decided in its entirety by the Government along with other partners. In view of the perceived uncertainties in obtaining the refund at this stage, the provision made in the books as above has been retained and netted off against the amount recoverable as above in the financial statements for the year ending 31 st March 2016. (Figures inlNRare restated). 14. During the financial year 2010-11, the Oil Marketing Companies, nominees of the Gol recovered USD 32.07 million (Rs, 2,128.01 million) ONGC''s share as per directives of Gol in respect of Jointly Controlled Assets-Panna Mukta and Tapti. The recovery is towards certain observations raised by auditors appointed by the Director General of Hydrocarbons (DGH) under Production Sharing Contract (PSC) for the period 2002-03 to 2005 06 in respect of cost and profit petroleum share payable to Gol. BGEPIL along with RIL (âClaimantsâ) have served a notice of arbitration on the Gol in respect of dispute, differences and claims arisen in connection with the terms of Panna, Mukta and Tapti PSCs. Since the company is not a party to the arbitration proceedings, it had requested MoP&NG that in case of an arbitral award the same be made applicable to ONGC also, as a constituent of contractor for both the PSCs. Subsequently, vide letter dated July 4,2011 MoP&NG has advised ONGC not to participate in the arbitration initiated by RIL and BGEPIL under Panna Mukta and Tapti PSCs. MoP&NG has also stated that in case of an arbitral award, the same will be applicable to ONGC also as a constituent of the contractor for both the PSCs. Pending final arbitral award, the same has been shown as Receivable from Gol under Advance Recoverable in Cash or Kind or Value to be Receivedâ under Long Term Loans and Advances. (Figures in INR are restated). 15. Deposit under Site Restoration Fund Scheme: A sum of Rs, 135,591.83 million till 31.03.2016 (previous year 7 125,443.80 million) has been deposited with banks under section 33ABA of the Income Tax Act, 1961 and can be withdrawn only for the purposes specified in the Scheme i.e. towards removal of equipments and installations in a manner agreed with Central Government pursuant to an abandonment plan to prevent hazards to life, property, environment etc. This amount is considered as restricted cash and hence not considered as ''Cash and Bank Balances''. -valued as per accounting policy no. 2.i 16. This includes an amount of Rs, 3.37 million (previous year Rs, 7.68 million) in respect of Carbon Credits. 15. The deposits maintained by the company with banks comprise time deposit, which can be withdrawn by the company at any point without prior notice or penalty y on the principal. 16. Amount deposited in unclaimed dividend account is earmarked for payment of dividend and cannot be used for any other purpose. 17. Includes 7 21,690.24 million (Previous year Rs, 21067.60 million) towards differential royalty being deposited from 1 st February 2014 as per the interim order of the Hon''ble Supreme Court of India, (also refer Note no. 45.1.1 ,b) 18 Includes an amount of Rs, 0.73 million (Previous Year Rs, 0.13 million) outstanding from Key Managerial Personnel. -Includes receivable of 7 1.351.73 million (Previous Year Rs, 532.02 million) from Gratuity Trust as funded status is more than obligation. 19. In terms of the decision of Government of India (GOI). the company has shared Rs, 10,961.20 million (Previous Year 7 362.996.20 million) towards under-recoveries of Oil Marketing Companies (OMCs) for the year 2015-16 (as per Gol directives) by extending the discount in the price of Crude Oil based on the rates of discount communicated by Petroleum Planning and Analysis Cell (PPAC) and Ministry of Petroleum and Natural Gas (MoP&NG). 20. For Crude Oil produced in Assam, sales revenue is based on the pricing formula provided by MoP&NG. Revenue from rest of nominated crude is accounted in terms of Crude Oil Sales Agreements (COSAs) already signed and made effective from 1st April. 2010. 21. Sales revenue of Natural Gas is based on domestic gas price of USS 4.66/mmbtu and USS 3.82/mmbtu (on GCV basis) notified by Gol for the period 1 st April 2015 to 30th September 2015 and 1 st October 2015 to 31st March 2016 respectively in terms of "New Domestic Natural Gas Pricing Guidelines, 2014". For gas consumers in North-East, consumer price is 60% of the domestic gas price and the difference between domestic gas price and consumer price is paid to the company through Gol Budget and shown as ''North-East Gas Subsidyâ, 22. The company is supplying majority of Natural gas to Gas Authority of India Limited (GAIL) which also purchases gas from other sources and sells to different consumers at different prices. Based on the Government directives, excess in Gas Pool Account at the end of financial year is transferred to ONGC/ OIL in accordance with their continuation. Based on the details received from GAIL, an amount of 7 509.14 million (Previous year 7 3,267.04 million) has been considered as Surplus from Gas Pool Account'' for the year 2015-16. 23. Excise duty on sale to product has been deducted from Sales revenue and Excise duty shown above represents the difference between Excise duty on opening and closing stock of finished goods. 24. Other expenditure includes Rs, 2,950.47 million, pertaining to cost of 23 immediate support vessels (ISVs) handed over to Indian Navy for security of offshore installations, charged of f consequent to review carried out during the year. -Represents expenditure in respect of Wind Power Project at Jaywalker-Rajasthan. During the year, the Company has decided to treat the said project as a ''business project'', above expenditure along with further amount spent during the year aggregating to Rs, 5640.86 million has been capitalized as Fixed Assets of the company. Further, revenue generated from sale ol electricity amounting to Rs, 800.98 million has been accounted lore as Other Operating Income. Hence, the above amount disclosed on CSR in the previous year remains unspent to this ex tent. 25. Disclosure under the Accounting Standard -15 on "Employee Benefitsââ 26. Brief Description: A general description of the type of Employee Benefits Plans is as follows: 27. All the employee benefit plans of the Company are run as Group administration plans (Single Employer Scheme) including employees seconded to ONGC Videsh Limited (OVL), 100% subsidiary. 28. Earned Leave (EL) Benefit Accrual - 30 days per year Encashment while in service - 75% of Earned Leave balance subject to a maximum of 90 days per calendar year Encashment on retirement - maximum 300 days Scheme is funded through Life Insurance Corporation of India. (LIC). 29. Good Health Reward (Half pay leave) Accrual - 20 days per year Encashment while in service - Nil Encashment on retirement - 50% of Half Pay Leave balance. Scheme is funded through Life Insurance Corporation of India. (LIC). 30. Gratuity 15 days salary for each completed year of service. Vesting period is 5 years and the payment is restricted to 71.00 million. Scheme is funded through own Gratuity Trust 31. Post-Retirement Medical Benefits Upon payment of one time prescribed contribution by the employees, full medical benefits on superannuation and on voluntary retirement subject to the completion of minimum 20 years of service and 50 years of age. An employee should have put in a minimum of 15 years of service rendered in continuity in ONGC at the time of superannuation to be eligible for availing post-retirement medical facilities 32. Terminal Benefits At the time of superannuation, employees are entitled to settle at a place of their choice and they are eligible for Transfer Travelling Allowance. 33. In terms of DPE Guidelines, The Company has formulated a Post-Retirement Benefit Scheme (PRBS) as a defined contribution scheme w.e.f. 01.01.2007 34 The amounts included in the fair value of plan assets of gratuity fund in respect of Reporting Enterpriseâs own financial instruments and any property occupied by, or other assets used by the reporting enterprise are Nil (Previous Year Nil) 35 Reconciliation showing the movements during the period in the net liability recognized in the balance Sheet: âIncludes Joint Venture allocation in respect of Post-retirement Medical benefits of Rs, 3.54 million (Previous year 7 6.35 million) Expected Contribution in respect of Gratuity for next t year will be Rs, 286.82 million (Previous Year Rs, 185.53 million) The company has recognized a gratuity liability of Rs, 82.30 million as on 31.03.2016 (Previous year Rs, 78.72 million) as per actuarial valuation for 415 (Previous year 558) Contingent Employees engaged in different work centreâs. The discount rate is based upon the market yield available on Government bonds at the Accounting date with a term that matches. The salary growth rate takes account of inflation, seniority, promotion and other relevant factor on long term basis. Expected rate of return on plan assets is based on market expectation, at the beginning of the year, for return over the entire life of the related obligation. 36 Disclosure under Accounting Standard -17 on "Segment Reporting" The segment information is presented under the Notes to the Consolidated Financial Statements as required under the standard. 37 Disclosure under Accounting Standard -18 on "Related Party Disclosuresâ: 38. Name of related parties and description of relationship: Jointly Controlled Entity i. Petro net LNG Limited ii. ONGC Teri Biotech Limited iii. Mangalore SEZ Limited iv. ONGC Tripura Power Co. Limited v. (ONGC Mangalore Petrochemicals limited up to 28.02.2015) 39. Key Managerial Personnel: i) Shri D K Sarraf. Chairman and Managing Director ii) Shri Shashi Shanker, Director( T&FS) iii) Shri T K Sengupta, Director (Offshore) iv) Shri D D Misra, Director} HR) v) Shri A K Dwivedi. Director (Exploration) vi) Shri Ashok Verma, Director(Onshore) up to 31.07.2015 vii) Shri V. P Mahawar, Director (Onshore) w.e.f 01.08.2015 viii) Shri A. K Banerjee, Director(Finance) up to 30.04.2015 ix) Shri A K Srinivasan, Director (Finance) w.e.f 23.09.2015 x) Shri N K Sinha. Company Secretary up to 30.06.2015 xi) Shri V N Murthy, Company Secretary w.e.f 01.07.2015 xii) Shri NK Verma, Director (Exploration) up to 26.08.2014 xiii) Shri K.S Jamestin, Director (HR) up to 31.07.2014 41 Disclosure under Accounting Standard -19 on âLeases'' The company has certain office/residential premises on Operating Lease which are cancellable by giving appropriate notice as per the respective agreements. During the year Rs, 818.58 million (Previous year 7 977.22 million) had been paid towards cancellable Operating Lease. 40. Disclosure under Accounting Standard - 27 on Financial Reporting of Interests in Joint Ventures: 41 Jointly Controlled Assets Abbreviations:- APGIC- AP Gas Infrastructure Corporation Limited, AWEL- Adani Welspun Exploration Limited, BGEPIL- British Gas Exploration & Production India Limited, BPRL- Bharat Petro Resources Limited, Cairn India-Cairn India Limited, CEHL- Cairn Energy Hydrocarbons Limited, CIL- Coal India Limited, EEPL- Essar Exploration & production Limited. ENI- Ente Nazionale Idrocarburi, EOL-EssarOil Limited, GAIL- Gas Authority of India Limited, GSPC- Gujarat State Petroleum Corporation Limited, HEPI- Hardy Exploration & Production India Limited, HOEC-Hindustan Oil Exploration Company Limited, IOC- Indian Oil Corporation Limited, NTPC- National Thermal Power Corporation Limited, OIL- Oil India Limited, PEPL-Prabha Energy Pvt Limited, RIL- Reliance Industries Limited, ROPL- Ravva Oil (Singapore) Private Limited, TPL- Tata Petrodyne Limited. VIL- Videocon Industries Limited 42. The financial statements of 124 (previous year 117) out of 135 (previous year 134) JVs/NELP have been incorporated in the accounts to the extent of Company''s participating interest in assets, liabilities, income, expenditure and profit / (loss) before tax on the basis of statements certified in accordance with production sharing contract and in respect of balance 11 (previous year 17) JVs/NELP, the figures have been incorporated on the basis of uncertified statements prepared under the production sharing contracts. Both the figures have been adjusted for changes as per Note No. 2.j.1 The financial positions of JV/NELP are as under: 43. In respect of 10 NELP blocks (previous year 3) which have expired as on 31st March, 2016, the Company''s share of Unfinished Minimum Work Programme (MWP) amounting to 7 2,966.53 million (previous year to Rs, 820.40 million) has not been provided for since the company has already applied for further extension of period in these blocks as ''excusable delayâ/ special dispensations citing technical complexities, within the extension policy of NELP Blocks, which are under active consideration of Gol. The delays have occurred generally on account of pending statutory clearances from various Govt, authorities like Ministry of Defense, Ministry of Commerce, environmental clearances, State Govt, permissions etc. The above MWP amount of 7 2,966.53 (previous year Rs, 820.40 million) is included in MWP commitment under note no. 45.1.6. 44. As per the Production Sharing Contracts signed by the Company with the Gol, the Company is required to complete Minimum Work Programme (MWP) within stipulated time. In case of delay in completion of the MWP, Liquidated Damages (LD) is payable for extension of time to complete MWP Further, in case the Company does not complete MWP or surrender the block without completing the MWP. the estimated cost of completing balance work programme is required to be paid to the Gol. LD amounting to 7 nil (Previous year 7 24.08 million) and cost of unfinished MWP (net of reversal) 7 45 million (Previous year 7 1,420.64 million), paid/payable to the Gol is included in survey and wells written of f expenditure. 46. The company had acquired Participating Interest (PI) of British Gas Exploration & Production India Limited (BGEPIL) in the following blocks, effective from the following dates as approved by the board of directors. 47. Disclosure under Accounting Standard - 28 ââImpairment of Assets" and Guidance note on Accounting for Oil and Gas producing Activities (Revised 2013) issued by ICAI on impairment of Assetsâ 48. The company has relinquished 30% Participating Interest (PI) in SGL Field with future interest in block RJ-ON/6 Jaisalmer Basin Rajasthan to Focus Energy Limited (Operator), on condition that Focus Energy Limited (Operator) to pay towards 100% past royalty obligation. PEL/ML fees, other statutory levies and waive off development/ Production costs payable by ONGC in SGL Field of the block as well as take all future 100% royalty obligation of ONGC as licensee and also not exercise its option of acquiring 30% PI in two gas discoveries namely SSG-1 and SSF-2 in Block. Pending farm out agreement/ government approval, no adjustment is made in the accounts in respect of relinquishment of RJ-ON/6. 49. Jointly Controlled Entities: 50. Company has ownership interest in following Jointly Controlled Entities: 51. The Company is engaged mainly in the business of oil and gas exploration and production in Onshore and Offshore. In case of onshore assets, the fields are using common production/transportation facilities and are sufficiently economically interdependent to constitute a single cash generating unit (CGU). Accordingly, impairment test of all onshore fields is performed in aggregate of all those fields at the Asset Level. In case of Offshore Assets, a field is generally considered as CGU except for fields which are developed as a Cluster, for which common facilities are used, in which case the impairment testing is performed in aggregate for all the fields included in the cluster. 52 The Value in Use of producing/developing CGUs is determined under a multi-stage approach, wherein future cash flows are initially estimated based on Proved Developed Reserves. Under circumstances where the further development of the fields in the CGUs is under progress and where the carrying value of the CGUs is not likely to be recovered through exploitation of proved developed reserves alone, the Proved and probable reserves (2P) of the CGUs are also taken for the purpose of estimating future cash flows. In such cases, full estimate of the expected cost of evaluation/development is also considered while determining the value in use. 53 In assessing value in use, the estimated future cash flows from the continuing use of the assets and from its disposal at the end of its useful life are discounted to their present value. The present values of cash flows are determined by applying discount rates of 19.06% (previous year 19.71 %) for Rupee transactions and 13.37% (previous year 13.89 %) for crude oil and value added products revenue, which are measured in USD. Future cash inflows from sale of crude oil and value added products are computed using the future prices, on the basis of market-based average prices of the Dated Brent crude oil as per assessment by ''Plattâs Crude Oil Market wire and its co-relations with benchmark crudes and other petroleum products. Future cash flows from sale of natural gas is also computed based on the expected future prices on the basis of the notification issued by the Government of India and discounted applying the rate applicable to the cash flows measured in USD in view of the new pricing guidelines issued by Gol. (refer note no.27.3) 54 The company had assessed the impairment as at 31 st March'' 2016 for its cash generating units. As a result, an amount of 7 33,107.27 million (Previous Year 7 2,136.53 million) has been provided. Out of this, an amount of 7 29,865.91 million pertains to Onshore CGU Sibsagar and Rs, 2,257.50 million in respect of Pre NELP JV Block RJ-ON-90/1. Further. 7 821.81 million has been provided in respect of Offshore CGUs. Balance impairment loss of Rs, 162.05 million relates to other CGUs namely Silchar, Jodhpur etc. During the year, Rs, 1,685.14 million (Previous Year Rs, 201.88 million) impairment losses has been reversed. Out of this, an amount of 7 1,645.10 million relates to already partially impaired Rajahmundry Offshore CGU. Balance Rs, 40.04 million reversal pertains to Offshore CGU B-121, CY-OS-90/1 (PY-3). Tapti etc. Considering the fall in crude oil prices in the international market and resultant net impairment being significant during the year, the same has been considered as Exceptional item and disclosed appropriately in the "statement of Profit and Loss''. 55 Impairment testing of assets under exploratory phase (Exploratory Wells in Progress) has been carried out as on 31.03.2016, and an amount of 7 626.36 million (Previous year 7 1,172.15 million) has been provided during the year 2015-16 as impairment loss. Further, Rs, 3,466.20 million (Previous Year Rs, 1,203.23 million) impairment losses has been reversed in the Statement of Profit and Loss as exploratory phase assets have been transferred to Oil & Gas Assets. 56 Disclosure under Accounting Standard - 29 on âProvisions, Contingent Liabilities and Contingent Assetsâ: Movement in Provisions for Abandonment and others: 57 Other Disclosures under Schedule III to the Companies Act, 2013: 58 Contingent liabilities and commitments (to the extent not provided for) 59 Contingent Liabilities: Claims against the Company/ disputed demands not acknowledged as debt:- a. The Company''s pending litigations comprise of claims against the Company and proceedings pending with Tax / Statutory/ Government Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material impact on its financial position. Future cash outflows in respect of the above are determinable only on receipt of judgments/ decisions pending with various forums/authorities. b. In terms of the statutory provisions of Oilfields (Regulation and Development) Act, 1948 (ORDA), Petroleum & Natural Gas (PNG) Rules 1959 and Notifications issued thereunder; the Company is liable to pay royalty to the Central Government (Gol) and State Governments, on production of Crude Oil and Natural Gas from offshore and onshore fields, respectively. Since 2008-09, the Company has been paying royalty on crude oil at realized price which is net of under-recovery of the OMCs shared by the Company as per Gol directives. On an application filed by the State of Gujarat, the Hon''ble High Court of Gujarat in its order dated 30.11.2013 has directed the Company to pay the shortfall of royalty on crude oil produced from the onshore fields in the State of Gujarat on pre-discount prices from 01.04.2008 onwards. Based on the Special Leave Petition filed by the Company against the said order of the Hon''ble High Court of Gujarat, pending further orders, Hon''ble Supreme Court vide order dated 13.02.2014 stayed the operation of the impugned judgment subject to the condition that the company pays royalty to the State of Gujarat on pre-discounted price of crude oil w.e.f. 01.02.2014 onwards. Accordingly, differential amount of 7 117,864.64 million on this account for the period from April, 2008 to March, 2016 (7 117,242.00 million as on 31.03.2015) has been considered as Contingent Liability. Pending the final outcome of the SLP filed before the Honâble Supreme Court, differential royalty (royalty on pre-discount price minus royalty on post-discount price) amounting to 7 21,690.24 million deposited w.e.f. February. 2014 (7 21,067.60 million as on 31.03.2015) in terms of Honâble Supreme Court order has been shown as deposit. c. Government of Assam has filed a writ petition in the Hon''ble High Court of Guwahati for payment of differential royalty of 7 23,367.30 million on post and pre discount sale price of crude oil for the period 2008-09 to 2013-14 which is pending adjudication. The amount of demand as above together with amount of differential royalty up to 31.03.2016 including interest thereon estimated to be 7 30,857.82 million has accordingly been included and shown as contingent liability. 60 Corporate Guarantees executed by the Company on behalf of its wholly owned subsidiary, ONGC Videsh Limited (OVL): 61 Guarantees executed for financial obligations: i) Amount of Guarantee 7 323,516.26 million (Previous yearRs, 304.152.81 million) ii) Amount outstanding 7 320,902.11 million (Previous year 7 301,671.35 million) 62 Corporate Guarantees executed by the Company on behalf of its subsidiary, MRPL: i) Amount of Guarantee 7 31,516.25 million (Previous year 7 29.754.00 million) ii) Amount outstanding 7 10,269.62 million (Previous year 7 3,290.04 million) 63 Capital Commitments: Estimated amount of contracts remaining to be executed on capital account:- i) In respect of Company: 7 122,679.23 million (Previous year 7134,081.19 million). ii) In respect of Joint Ventures: 7 20.52 million (Previous year 7 3,842.99 million). 64 Other Commitments a) Estimated amount of Minimum Work Programme (MWP) committed under various âProduction Sharing Contractsâ with Government of India/ Nominated Blocks: ) In respect of NELP blocks in which the Company has 100% participating interest: 7 2,394.45 million (Previous year 7 3,000.14million). ii) In respect of NELP blocks in Joint Ventures, company''s share: 7 24,680.51 million (Previous year 7 32.705.26 million). b) In respect of ONGC Petro Additions Limited, A Joint Venture Company 7 480.50 million on account of subscription of Share Warrants with a condition to convert it to shares after a balance payment of 7 0.25/* per share. 65 The Company has given an undertaking to The State Bank of India, for a Rupee term loan agreement amounting to 7 30,350 million (previous year 7 30.350 million) in respect of ONGC Tripura Power Co. Limited (OTPC) for not to dilute the shareholding till two years after Commercial Operation Date (COD) of the project and to bear any cost overrun to the ex tent of 10% of the estimated project cost of 740,470 million. -MMTOE denotes "Million metric Tonne Oil Equivalent" and for calculating Oil equivalent of Gas. 1000 M3 of Gas has been taken to be equal to 1 MT of Crude Oil. Variations in totals, if any. are due to internal summations and rounding off. 66. The year-end reserves of the company have been estimated by the Reserves Estimation Committee (REC) which follows international reservoir engineering procedures consistently. The company has adopted deterministic approach for reserves estimation and is following Society of Petroleum Engineers (SPE) 1997 guidelines which defines reserves as âestimated volumes of crude Notes: 1. Loan to OVL is repayable within a notice period of fifteen months and carries no interest during the years 2015-16 and 2014-15. 2. Loan to MRPL carries interest @State Bank Advance Rate (SBAR) with a spread of minus 385 basis points. The Loan is repayable quarterly in 28 equal installments. The repayment of loan had started from the last quarter of FY 2013-14. ONGC can call these loans on notice of 90 days. MRPL can prepay whole or part of the loan to ONGC as per its requirement. 3. The Company has not advanced any money to its employees for the purposes of investment in the securities of the Company. 67 The Company has a system of physical verification of Inventory, Fixed Assets and Capital Stores in a phased manner to cover all items over a period of three years. Adjustment of dif fervencies, if any, is carried out on completion of reconciliation. 68 The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses, 69 Some balances of Trade/Other Receivables, Trade/Other Payables and Loans and Advances are subject to confirmation/ reconciliation. Adjustments, if any, will be accounted for on confirmation/ reconciliation of the same, which will not have a material impact. 70 Previous yearâs figures have been regrouped/ reclassified, wherever necessary, to conform to current yearâs classification. 71 Figures in parenthesis as given in these Notes to Financial Statement relate to previous year. In view of the Notification no. S.O 447(E) dated 28.02.2011, issued by Ministry of Corporate Allans, the Balance sheet of the Company is mandatonly required to be prepared in Revised Schedule VI w e.f 1 April. 2011 onwards (Schedule III after implementation of Companies Act, 2013 w e.f. 1st April, 2014). Accordingly, the ligules of FY 2015-16 and FY 2014-15 are given as per requirement of Schedule-Ill. Figures for FY 2010-11 to FY 2013-14 are given as per the requirement of Revised Schedule VI and for earlier years figures are as per Old Schedule VI * Exploration Costs written oil towards Survey & Dry Wells have been regrouped from Depreciation, Depletion and Amortization same these represents cash expenditure and shown as a separate item
Mar 31, 2015
Mar 31, 2013
Mar 31, 2012
Mar 31, 2010
More Information on Oil And Natural Gas Corporation Ltd.
Enable
X
|