Notes to Accounts of Oil And Natural Gas Corporation Ltd.

Mar 31, 2025

3.21. Provisions, Contingent Liabilities and Contingent Assets

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

The amount recognised as a provision is the best estimate
of the consideration required to settle the present obligation
at the end of the reporting period, taking into account the
risks and uncertainties surrounding the obligation. When
a provision is measured using the cash flows estimated
to settle the present obligation, its carrying amount is the
present value of those cash flows (when the effect of the
time value of money is material).

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

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

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

3.22. Financial instruments

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

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

received relating to financial instruments carried at FVTPL
are recorded in the Statement of Profit and Loss.

3.23. Equity instruments

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

3.24. Financial assets

(i) Initial recognition and measurement

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

(ii) Classification and subsequent measurement

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

- Financial Assets at amortized cost

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

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

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

Fair value movements are recognized in Other
Comprehensive Income (OCI). However, the Company
recognizes interest income, impairment losses & reversals
and foreign exchange gain or loss in the statement of profit
and loss. On de-recognition of the asset, cumulative gain or
loss previously recognized in OCI is recycled from OCI to the
statement of profit and loss.

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

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

- Investment in Equity instruments

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

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

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

(iii) Impairment of financial assets

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

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

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

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

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

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

on the Company''s historical experience and informed credit
assessment, that includes forward-looking information.

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

(iv) De-recognition

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

On derecognition of a financial asset in its entirety (except
for equity instruments designated as FVTOCI), the difference
between the asset''s carrying amount and the sum of the
consideration received and receivable is recognised in the
Statement of Profit and Loss.

3.25. Financial liabilities

(i) Initial recognition and measurement

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

(ii) Subsequent measurement

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

(iii) Derecognition

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

(iv) Financial Guarantee Contracts

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

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

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

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

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

Financial assets and financial liabilities are offset, and the
net amount is presented in the balance sheet if there is a
currently enforceable legal right to offset the recognized
amounts and there is an intention to settle on a net basis, to
realize the assets and settle the liabilities simultaneously.

3.26. Cash and cash equivalents

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

3.27. Earnings per share

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

3.28. Statement of Cash Flow

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

3.29. Segment reporting

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

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

3.30. Events after Reporting Date

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

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

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

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

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

4.1. Critical judgments in applying accounting policies

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

(a) Determination of functional currency

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

(b) Classification of investment

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

(c) Identifying whether a contract includes a lease

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

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

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

(e) Identifying lease payments for computation of lease
liability

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

(f) Low value leases

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

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

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

(h) Oil & Gas Accounting

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

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

4.2. Assumptions and key sources of estimation uncertainty

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

(a) Estimation of provision for decommissioning

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

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

The long term average General Consumer Price Index (CPI)
for inflation has been used for escalation of the current cost

estimates and pre-tax discounting rate used to determine
the balance sheet obligation as at the end of the year is long
term average risk free government bond rate with 10 year
yield.

(b) Determining discount rate for computation of lease liability

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

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

(c) Determination of cash generating unit (CGU)

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

(d) Impairment of assets

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

The present values of cash flows are determined by applying
pre tax-discount rates which are based upon the cost of
capital from an estabilished model. Future cash inflows
from sale of crude oil, natural gas and value added products
are estimated using Management''s best estimate of future
prices and its co-relations with benchmark crudes and other
petroleum products.

The value in use of the producing/developing CGUs is
determined under a multi-stage approach, wherein future

cash flows are initially estimated based on Proved Developed
Reserves. Under circumstances where the further
development of the fields in the CGUs is under progress
and where the carrying value of the CGUs is not likely to be
recovered through exploitation of proved developed reserves
alone, the Proved and probable reserves (2P) of the CGUs are
also taken for the purpose of estimating future cash flows. In
such cases, full estimate of the expected cost of evaluation/
development is also considered while determining the value
in use.

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

(e) Estimation of reserves

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

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

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

Volumetric estimation is the main procedure in estimation
which uses reservoir rock and fluid properties to calculate
hydrocarbons in-place and then estimate that portion
which will be recovered from it. As the field gets matured
and reasonably good production history is available, then
performance methods such as material balance, simulation,
decline curve analysis are applied to get more accurate
assessments.

The annual revision of estimates is based on the yearly
exploratory and development activities and results thereof.
New In-place Volume and Estimated Ultimate Recovery (EUR)
are estimated for new discoveries. Revision of estimates

are also due to Field growth which includes delineation/
appraisal activities and field reassessment. Delineation/
appraisal activities lead to revision in estimates due to new
sub-surface data. Similarly, reassessment is also carried
out for existing fields due to necessity of revision in petro¬
physical parameters, new seismic input, updating of static
and dynamic models and performance analysis leading to
change in Reserves. Intervention of new technology, change
in classifications and contractual provisions also necessitate
revision in estimation of Reserves.

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

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

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

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

(f) Defined benefit obligation (DBO)

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

(g) Litigations

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

In accordance with Ind AS 109 - Financial Instruments,
the Company applies ECL model for measurement and
recognition of impairment loss on the trade receivables and
other financial assets. For trade receivables, the Company
follows rating-based approach to compute default rates
based on Credit ratings of the borrowers and forward-looking
estimates are incorporated using relevant macroeconomic

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

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

5.2. During the year 2016-17, Tapti A series facilities which
were part of the assets of PMT Joint Operation (JO) and
surrendered by the JO to the Government of India (Gol) as
per the terms of JO agreement were transferred by GoI to
the Company free of cost as its nominee and recorded as a
non-monetary grant. During the year 2019-20, the Company
opted to recognize the non-monetary government grant at
nominal value and recorded the said facilities at nominal
value, in line with amendment in Ind AS 20 ''Accounting
for Government Grants and Disclosure of Government
Assistance'' vide Companies (Indian Accounting Standards)
Second Amendment Rules, 2018 (the ''Rules''). These assets
were decapitalised / retired to the extent of the Company''s
share in the Joint Operation.

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

Subsequent to assignment of Panna-Mukta field to the
Company GoI has directed JV partners of the PMT (Panna
Mukta & Tapti) field to transfer the existing SRF fund
maintained for decommissioning obligation for Tapti Part
A facility and Panna Mukta fields to the Company along
with full financial and physical liability of site restoration
and decommissioning of Panna Mukta fields and Tapti Part
A facilities. Accordingly, in the year 2019-20 the Company
received SRF fund of USD 33.81 million ('' 2,402.18 million)
for Tapti Part-A facilities and USD 598.24 million ('' 42,506.87
million) for Panna Mukta fields from JV partners (including
the Company share of 40% in the fields) and acquired
the corresponding decommissioning obligation with the
conditions that Company will maintain separate dedicated
SRF accounts under Site Restoration Fund scheme, 1999
and extent guidelines of SRF, the Company will not utilise
the fund of dedicated SRF fund of Panna- Mukta Fields
and Tapti Part-A facilities for any other purpose, other
than one defined under SRF scheme/guidelines. Company
shall periodically carry out the re-estimation of cost of
decommissioning of Panna- Mukta Fields and Tapti Part-A
facilities as per existing Company policy and contribute to
SRF account as per Company policy in nomination fields.

In case, final actual cost of decommissioning of facilities of
Panna-Mukta fields at the time of physical decommissioning
is higher than approved decommissioning cost plus
the accumulated amount, Company will contribute the
additional amount required for decommissioning. However,
in case the actual cost at the time of decommissioning is
less than the accumulated amount, the balance amount will
be transferred to the Government of India. The Company is
mandated to pay Rupee one per annum as rental charges
to Government of India for use of Tapti A facilities till its
abandonment.

5.3. In line with the Union Cabinet''s directive dated February 19,
2019, to enhance domestic oil and gas production through
reforms in the Exploration and Licensing Policy, 64 marginal
nomination fields operated by National Oil Companies were
identified for bidding under the oversight of the Directorate
General of Hydrocarbons (DGH). These were grouped into 17
Contract Areas.

Under this initiative, 25 fields were awarded under PEC Bid
Rounds I (2021-22) and II (2022-23) and are currently being
operated under Production Enhancement Contracts (PECs).
In PEC Bid Round III, 24 fields across 5 Contract Areas were
awarded on September 6, 2024, and are currently in the
process of being handed over. Operations on these fields
have not yet commenced. The impact of same on the financial
statements for the year ended March 31, 2025 is immaterial.

5.4. Cyclone Tauktae hit Arabian Sea off the coast of Mumbai
in the early hours of May 17, 2021 where the company''s
major production installations and drilling rigs are located/
operating. The cyclone has caused damage to offshore
facilities/platforms. The occurrence of incident was
intimated to the Insurance Company under Offshore Energy
Package Insurance Policy and surveyors / Loss adjustors
were appointed by them for the incident. Pre-Engineering
and post engineering surveys had been done by the loss
adjuster on various occasions and they had recommended
the estimated claim amount of '' 9,080.50 million (USD 110
million) in their 4^th Interim survey report in February 2023
towards the expenditure incurred / likely to be incurred on
restoration of damages caused by the cyclone. Based on the
report the Company had received 1^st on account payment
of '' 1,314.54 million (USD 16 million; Gross USD 36 million
less policy deductible of USD 20 million) on 27.03.2023.
Further additional documents were submitted and various
meetings were held with loss adjustor, based on which 5^th
Interim Report was submitted in January 2024. The same
was confirmed by the Insurance Company for 2^nd on account
payment of '' 1,660.00 million (USD 20 million) in March
2024. The same was accounted as miscellaneous receipts
in year 2023-24. Thereafter, based on additional documents
submitted and various meetings, Insurance Company
has confirmed that loss adjuster has recommended 3^rd on
account payment of '' 1,283.72 million (USD 15 Million ) and
the same has been accounted as miscellaneous receipt
during the year, (refer Note no 31 and Note no 6.2).

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

10.4. During the year 2004-05, the Company had acquired,
90% Participating Interest in Exploration Block KG-
DWN-98/2 from Cairn Energy India Limited for a lump sum
consideration of '' 3,711.22 million which, together with
subsequent exploratory drilling costs of wells had been
capitalized under exploratory wells in progress. During
2012-13, the Company had acquired the remaining 10%
participating interest in the block from Cairn Energy India
Limited on actual past cost basis for a consideration of
'' 2,124.44 million. Initial in-place reserves were established
in this block and adhering to original PSC time lines, a

declaration of commercially (DOC) with a conceptual cluster
development plan was submitted on December 21, 2009 for
Southern Discovery Area and on July 15, 2010 for Northern
Discovery Area. Thereafter, revised DOC was submitted in
December, 2013, Cluster-wise development of the Block had
been envisaged by division of entire development area into
three clusters.

The DOC in respect of Cluster II had been reviewed by the
Management Committee (MC) of the block on September
25, 2014. Field Development Plan (FDP) for CLuster-II was
submitted on September 8, 2015, which included cost of
aLL expLoratory weLLs driLLed in the Contract Area and the
same had been approved by the Company Board on March
28, 2016 and by MC on March 31,2016. Investment decision
has been approved by the Company. Contracts for Subsea
umbilical risers, flow lines, Subsea production system,

Central processing platform - living quarter utility platform
and Onshore Terminal have been awarded during 2018-19.
Sixteen (16) Oil wells, seven (7) Gas wells and Six (6) Water
injector wells were drilled up to March 31, 2021. Towards
early monetization, it was planned to produce Gas from
U-field utilizing Vasishta and S1 Project facilities. One Gas
well-U3B was completed in the month of March 2020 and
test production commenced on March 5, 2020. In line with
the Accounting Policy of the Company, Oil and Gas assets
were created for the well U3B on establishment of proved
developed reserves during the year 2019-20. Commercial
production from the well commenced on May 25, 2020.
Well, U1B and Well U1_A_Shft were completed and put to
production on August 26, 2021 and April 28, 2022 respectively.
On 07^th January 2024, Oil production commenced from M
field of Cluster II. All the remaining oil system facilities were
completed and production of Oil along with Associated Gas
commenced from A field & P Field on 30^th October 2024 and
16^th December 2024 respectively. The cost of development
wells in progress, Capital work in progress and Oil & gas
assets as of March 31, 2025 is '' 9,227.33 million (Previous
year '' 45,563.32 million), '' 137,451.85 million (Previous year
'' 169,552.16 million) and '' 183,092.08 million (Previous
year '' 80,614 .38 million) respectively under Cluster II.
Considering the changes with respect to approved FDP,
preparation the Revised FDP is under progress for Cluster-
II development.

All the subsea installation works and pipe laying works
related to Gas System except dependency on CPP topsides
has been completed. The CPP topsides were installed using
float over method on March 24, 2024. The LQUP Topside
modules could not be installed after jacket installation due
to unfavorable offshore weather conditions. Installation
of balance topside structures of LQUP is expected to be
completed during FY 25-26. Subsequently the remaining gas
wells of R & A fields will be hooked up to start production.

Further, MC has approved the 4C-3D OBN seismic data
acquisition, processing & interpretation in Cluster-II (for
500SKM) in Mining Lease area after expiry of Exploration
period. The acquisition of data has been completed, and data
processing is under progress.

FDP in respect of Cluster-I was approved for development
of Gas discoveries in E1 and integrated development of Oil
discoveries in F1 field along with nominated fields of GS-
29 area by the Management Committee in FY 2019-20.
Considering the proximity of E-1 well with F-1, there will be
cost saving for marine surveys, mobilization of vessels, hiring
of consultancy services and optimization in subsea facilities
by combining both the projects i.e. (i) GS-29, DWN-F1 and (ii)
DWN-E1. In view of above, it was decided to integrate both
the projects to have time and cost advantage. The same was
appraised to MC vide letter dated 06^th May 2022. Drilling of an
Appraisal cum Development Well GS29_8_A was completed
on April 30, 2021. Integrated development of DWN-E1
and DWN-F1 & GS-29 was appraised to ONGC Executive
committee (EC). EC accorded in principle approval in its
meeting held on 13.04.2022 for hiring of pre-project activities
like Integrated Consultancy Services (i.e. Pre-FEED, FEED
& PMC) ,Marine Surveys (Geophysical, Geotechnical and
Met-ocean surveys),Consultancy services & TPI for Marine
Surveys and EIARA Study .Hiring of Met Ocean Survey, Geo
technical Survey and Integrated Consultancy services have
been awarded and work is under progress. The cost of
development wells in progress and Capital work in progress
as of March 31, 2025 is '' 890.92 million (Previous year ''
885.56 million), and '' 554.91 million (Previous year Nil)
respectively under Cluster I.

In respect of Cluster III, the Company has submitted the
FDP for UD-1 discovery of Cluster-III on August 1, 2022.
The FDP, after examination, has been returned by DGH
for re-submitting a robust FDP. The Company proposes
to formulate a robust FDP by incorporating the results of
the proposed 4C-3D OBN seismic study (for 150SKM) for
which approval from MC has been received and the data
acquisition has been completed during current FY. Further,
the Company has requested the Ministry of Petroleum
& Natural Gas to extend the PEL timelines by 41 months,
i.e. up to January 1, 2026, in order to carry out 4C-3D OBN
seismic data acquisition, processing & interpretation in the
UD-1 discovery area. The extension has been approved vide
letter dated 26.12.2023.

In view of the definite plan for development of all the clusters,
the cost of exploratory wells in the block i.e. '' 25,769.43
million (Previous year '' 25,969.21 million) has been carried
over.

10.5. During the year, certain fields of the Company under its
Contract Areas were identified by the Directorate General
of Hydrocarbon (DGH), Ministry of Petroleum & Natural
Gas, Government of India, for bidding under the Discovered
Small Field (DSF) Round IV. The Company will be required
to transfer these fields to the successful bidders upon
completion of the bidding process.

Pending finalization of the recovery mechanism for the
accumulated carrying costs, the Company has recorded
an additional impairment provision of '' 5,786.67 million
during the year. This is in addition to the earlier impairment
provision of '' 8,017.86 million (already accounted for in prior
years) related to the exploratory wells in these fields.

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

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

11.1.3. During the year, the Company has purchased additional
NIL (Previous year 19,960 nos.) equity shares of Petronet
MHB Ltd. (PMHBL), a subsidiary company having face
value of ''10 per share.Total investment in PMHBL as
at March 31, 2025 is '' 3,693.31 million (Previous year
'' 3,693.31 million).

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

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

11.1.5. During the year, the Company has subscribed additional
8,200,000 nos. (Previous year 24,360,000 nos.) equity
shares of Indradhanush Gas Grid Limited (IGGL), a Joint
Venture Company having face value of '' 10 per share at
par value. Total investment in IGGL as at March 31,2025
is '' 2,305.60 million (Previous year '' 2,223.60 million).

11.1.6. On 27.02.2024, a wholly owned subsidiary ONGC Green
Limited (OGL) was incorporated with authorized capital
of '' 1,000 million divided into 100 million equity shares of
'' 10 each. OGL shall engage in the value chains of energy
business including Renewable Energy (Solar, Wind,
Hybrid, Hydel, Tidal and Geothermal etc.), Bio-fuels,
Bio-Gas business, Green Hydrogen and its derivatives
like Green Ammonia, Green Methanol, Carbon Capture
Utilisation and Storage and LNG business.

During the year, the authorized capital of OGL was
increased to '' 50,000 million divided into 5,000 million
equity shares of '' 10 each and the company has
subscribed to 4,600 million nos. (Previous year NIL nos.)
equity shares of ONGC Green Limited (OGL), a wholly
owned subsidiary company having face value of '' 10
per share.Accordingly, the total investment in OGL as at
March 31, 2025 is '' 46,000.00 million (Previous year NIL).

11.1.7. During the FY 2024-25, the Company has received
389,422,687 nos. of equity shares from Hindustan
Petroleum Corporation Limited as bonus shares in the
ratio of 1:2.

11.1.8. Pursuant to the approval granted by the Ministry of
Petroleum and Natural Gas (MoP&NG) vide its letter dated
August 9, 2024, the Company, on September 12, 2024,
increased its equity shareholding in ONGC Petro additions
Limited ("OPaL") by 41.80%, via conversion of a portion
of Compulsorily Convertible Debentures amounting to
'' 61,070 million into equity shares of face value '' 10
each and conversion of share warrants upon payment of
the balance amount of '' 862.81 million. Consequently,
the Company''s shareholding in OPaL increased from
49.36% to 91.16%, and thereby Company gaining control
over OPaL.

There has been further increase in Company''s equity
shareholding in OPaL by 4.53% through the settlement
and conversion of the remaining portion of the
Compulsorily Convertible Debentures amounting to
'' 16,710.00 million into equity shares and allotment of
'' 105,010.00 million fully paid-up equity shares of face
value '' 10 each through subscription to right issue
offered by OPaL. Pursuant to the aforementioned
transactions, the Company''s shareholding in OPaL
has further increased from 91.16% to 95.69% as on
March 31,2025.

As at March 31, 2024, OPaL was considered as a Joint
Venture. However, by virtue of the aforesaid investment,
OPaL has become a subsidiary of the Company as ONGC
has attained the power to direct the relevant activities
of OPaL by virtue of being party to the Shareholder''s
Agreement and holding majority equity shareholding
in OPaL.

11.6.1. The amount of '' 76.76 mittion (Previous year

'' 63.75 million) denotes the fair value of fees towards
financial guarantee given for Mangalore Refinery and
Petrochemicats Limited without any consideration.

11.6.2. The amount of '' 6,373.12 million (Previous year '' 6,038.48
million) includes, (i) '' 4,768.81 million (Previous year
'' 4,434.17 million) towards the fair value of guarantee fee
on financial guarantee given without any consideration for
ONGC Videsh Limited and (ii) '' 1,604.31 million (Previous
year '' 1,604.31 million) towards fair value of interest free
loan to ONGC Videsh Limited till January 31,2018.

11.6.3. The amount of '' 16.59 million (Previous year '' 16.59
million) is towards the fair value of guarantee fee on
financial guarantee given without any consideration
for the Company''s stepdown subsidiary ONGC Videsh
Rovuma Limited.

11.6.4. The Company had subscribed 3,451,240,000 nos. Share
Warrants of ONGC Petro additions Limited 9.75 per
share warrant, entitling the Company to exchange each
warrant with a Equity Share of Face Value of '' 10 after a
balance payment of '' 0.25 for each share warrant. The
Company on August 23, 2024 has by made the balance
payment of '' 862.81 million and completed the conversion
of the 3,451,240,000 share warrants into equity shares at
par.

11.6.5. The Company had entered into an agreement for
backstopping support towards repayment of principal and
coupon of Compulsory Convertible Debentures (CCDs)
amounting to '' 77,780 million (Previous year balance
'' 77,780.00 million) issued by the subsidiary ONGC Petro
additions Limited (OPaL) (erstwhile joint venture) in three
tranches.

The Company, pursuant to approval from Ministry of
Petroleum & Natural Gas (MoP&NG) vide its letter dated
August 9, 2024, has made the principal repayment of
CCDs amounting to '' 77,780.00 million (Previous year
balance '' 77,780.00 million). Consequently, the Company
has converted first and third tranche of CCD amounting
to '' 56,150 million and '' 4,920 million into equity shares
on September 12, 2024, and second tranche of CCD
amounting to '' 16,710 million on October 25, 2024.

Accordingly, the commitment for back stopping support
has settled and the outstanding interest accrued as at
March 31,2025 is '' nil (Previous year '' 2,212.45 million).

Upon settlement and conversion of CCDs into equity
shares of OPaL, the carrying amount of the deemed equity
investment (As at March 31, 2024''62,308.05 million) in
OPaL in relation to the said CCDs have been derecognized
and adjusted with recognition of corresponding equity
investment in OPaL.

The Deemed Investment amount of '' 97.06 million [as
at March 31,2024''94.61 million included in above Note
no. 11.6.(ii)(a)] is recognized towards the fair value of
guarantee fee on financial guarantee given without any
consideration for OPaL.

11.6.6. Company''s Joint Venture Indradhanush Gas Grid Limited
(IGGL) had taken a loan sanction of '' 25,940 million from
Oil Industry Development Board (OIDB) on August, 25
2021 for the purpose of implementation of North East
Gas Grid Project guaranteed by the promoters of IGGL in
proportion of these shareholdings. During the year loan
of '' 4,600 million (previous year '' 5,600 million) has been
taken by IGGL out of the sanctioned amount '' 25,940
million. As at March 31,2025 IGGL has availed total loan
of '' 11,200 million (As at March 31, 2024''6,600 million).
The Company has recognized a financial guarantee
obligation in respect of its shareholding in IGGL with a
corresponding recognition of Deemed Investment in IGGL
of '' 85.31 million (As at March 31, 2024 '' 50.50 million)
for the above financial guarantee.

11.6.7. The amount of '' 410.71 million (Previous year NIL) is
towards the fair value of guarantee fee on financial
guarantee given without any consideration for the
Company''s stepdown subsidiary OVL Overses IFSC Ltd.

11.6.8. The Board of Directors has accorded its approval,
subject to concurrence of the Govt. of India, if any, for
acquisition of 1,15,20,000 Equity Shares of Mangalore
SEZ Limited (MSEZ), a joint venture of the Company,
from Infrastructure Leasing & Financial Services Limited
(IL&FS) at '' 561.14 million under its right of first refusal.
Subsequent to the acquisition of shares the holding of
ONGC will be increased from 26% to 49%.

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

Out of the gross trade receivables as at March 31, 2025
an amount of '' 92,479.02 million (as at March 31, 2024
'' 107,771.68 million) is due from Public sector Oil and Gas
Marketing companies, the Company''s largest customers.
There are no other customers who represent more than 5%
of total balance of trade receivables.

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

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

The revised pipeline transportation tariff were to be
ultimately borne by the end consumers of GAIL. Mahanagar
Gas Limited (MGL), one of the customers of GAIL, filed a
complaint with PNGRB on February 12, 2015 regarding
applicability of tariff on supply of gas to GAIL. After hearing all
parties, PNGRB vide order dated October 15, 2015 dismissed
the complaint and gave a verdict in favour of the Company.
Pursuant to appeal by MGL to the Appellate Tribunal for
Electricity (APTEL),

---

Mar 31, 2024

3.21. Provisions, Contingent Liabilities and Contingent Assets

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

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

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

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

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

3.22. Financial instruments

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

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

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

3.23. Equity instruments

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

3.24. Financial assets

(i) Initial recognition and measurement

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

(ii) Classification and subsequent measurement

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

- Financial Assets at amortized cost

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

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

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

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

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

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

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

- Investment in Equity instruments

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

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

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

(iii) Impairment of financial assets

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

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

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

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

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

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

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

(iv) De-recognition

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

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

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

3.25. Financial liabilities

(i) Initial recognition and measurement

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

(ii) Subsequent measurement

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

(iii) Derecognition

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

(iv) Financial Guarantee Contracts

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

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

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

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

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

(v) Offsetting of financial assets and financial liabilities

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

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

3.26. Cash and cash equivalents

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

3.27. Earnings per share

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

3.28. Statement of Cash Flow

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

3.29. Segment reporting

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

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

3.30. Events after Reporting Date

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

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

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

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

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

4.1. Critical judgments in applying accounting policies

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

(a) Determination of functional currency

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

(b) Classification of investment

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

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

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

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

(c) Identifying whether a contract includes a lease

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

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

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

(e) Identifying lease payments for computation of lease liability

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

(f) Low value leases

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

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

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

(h) Oil & Gas Accounting

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

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

4.2. Assumptions and key sources of estimation uncertainty

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

(a) Estimation of provision for decommissioning

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

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

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

(b) Determining discount rate for computation of lease liability

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

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

(c) Determination of cash generating unit (CGU)

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

(d) Impairment of assets

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

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

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

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

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

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

(e) Estimation of reserves

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

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

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

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

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

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

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

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

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

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

(f) Defined benefit obligation (DBO)

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

(g) Litigations

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

(h) Impairment of Financial Assets:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Deemed Investment in OPaL.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

21.3. The Company has elected to recognise changes in the fair value of certain investments in equity securities through other comprehensive income. This reserve represents the cumulative gains and losses arising on revaluation of equity instruments measured at fair value through other compreh

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Mar 31, 2023

6.1    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 ‘First -time Adoption of Indian Accounting Standards’.

6.2    During the year 2016-17, Tapti A facilities which were part of the assets of PMT Joint Operation (JO) and surrendered by the JO to the Government of India (GoI) as per the terms of JO agreement were transferred by GoI to the Company free of cost as its nominee. During the year 2019-20, the Company opted to recognize the non-monetary government grant at nominal value and recorded the said facilities at nominal value, in line with amendment in Ind AS 20 ‘Accounting for Government Grants and Disclosure of Government Assistance’ vide Companies (Indian

Accounting Standards) Second Amendment Rules, 2018 (the ‘Rules’). These assets were decapitalised / retired to the extent of the Company’s share in the Joint Operation.

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

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

survey of facilities/platforms have been undertaken by the surveyors / Loss adjustors and the Company has submitted the estimated claim amount of '8,255.00 Million (USD 103 Million) for the expenditure incurred / likely to be incurred on restoration of damages caused by the cyclone. Since various activities under the claim viz. the actual completion of all repairs, incurrence of expenditure, completion of review of documentation by the surveyors and submission

of full findings to the insurers, is likely to take some more time, the company has requested for release of ‘On Account’ payment against the claim, During the year Company has received ‘On Account’ payment of '1,314.54 Million (USD 16 Million; Gross uSd 36 Million less policy deductible of USD 20 Million) and same has been accounted for as miscellaneous receipts (refer Note no 31 and Note no 5.4).

8.1    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 ‘First -time Adoption of Indian Accounting Standards’.

8.2    Certain discovered small fields (DSF) of the Company falling under various Contract Areas were identified by Directorate General of Hydrocarbon, Ministry of Petroleum & Natural Gas, and Government

of India for bidding under Discovered Small Field Round III - 2021, in terms of the said bid documents the value of such fields were considered as Nil. The identified contract areas have been awarded to the winning bidders (awardees) in the month of August 2022 and the PML/PELs of these contract areas have been transferred to the said awardees. Accordingly, during the year, the Company has charged off development wells in progress and other capital work in progress amounting to '124.74 Million and '308.08 Million respectively pertaining to the fields falling under contract areas offered under DSF - III and reversed the accumulated impairment of '432.82 Million on the said development in progress and other capital work in progress (refer Note no. 10.3).

 

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

10.2 During the year 2004-05, the Company had acquired, 90% Participating Interest in Exploration Block KG-DWN-98/2 from Cairn Energy India Limited for a lump sum consideration of '3,711.22 Million which, together with subsequent exploratory drilling costs of wells had been capitalized under exploratory wells in progress. During 2012-13, the Company had acquired the remaining 10% participating interest in the block from Cairn Energy India Limited on actual past cost basis for a consideration of '2,124.44 Million. Initial in-place reserves were established in this block and adhering to original PSC time lines, a declaration of commerciality (DOC) with a conceptual cluster development plan was submitted on December 21,

2009    for Southern Discovery Area and on July 15,

2010    for Northern Discovery Area. Thereafter, 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 which included cost of all exploratory wells drilled in the Contract Area and the same had been approved by the Company Board on March 28, 2016 and by MC on March 31, 2016. Investment decision has been approved by the Company. Contracts for Subsea umbilical risers, flow lines, Subsea production system, Central processing platform - living quarter utility platform and Onshore Terminal have been awarded during 2018-19. Sixteen (16) Oil wells, Seven (7) Gas wells and Six (6) Water injector wells were drilled upto March 31, 2021. Towards early monetization, it was planned to produce Gas from U-field utilizing Vashishta and S1 Project facilities. One Gas well-U3B was completed in the month of March 2020 and test production commenced on March 5, 2020. In line with the Accounting Policy of the Company, Oil and Gas assets were created for the well U3B on establishment of proved developed reserves during the year 2019-20. Commercial production from the well commenced on May 25, 2020. Well U1B and Well U1_A_Shft were completed and put to production on August 26, 2021 and April 28, 2022 respectively. The cost of development wells in progress, Capital work in progress and Oil & gas assets as at March 31, 2023 is '56,147.21 Million (Previous year '37,488.80 Million), '142,392.36 Million (Previous year '110,903.50 Million) and '27,392.38 Million

(Previous year '24,995.63 Million) respectively under Cluster II. Considering the changes with respect to approved FDP the Company submitted the RFDP for Cluster-II development to DGH (Directorate General of hydrocarbons) on August 19, 2022 which is under review at DGH.

Further, MC has approved the 4C-3D OBN seismic data acquisition, processing & interpretation in Cluster-II (for 500SKM) under ‘Exploration in Mining Lease area after expiry of Exploration period’. The tendering process for the 500 SKM 4C-3D OBN acquisition is underway.

FDP in respect of Cluster-I was approved for development of Gas discoveries in E1 and integrated development of Oil discoveries in F1 field along with nominated field GS-29 by the Management Committee in FY 2019-20. E1 is now proposed to be developed along with integrated development of Oil discoveries in F1 field along with nominated field GS-29. Drilling of an Appraisal cum Development Well GS29_8_A was completed on April 30, 2021 under F1. The cost of development wells in progress as at March 31, 2023 is '885.56 Million (Previous year '885.56 Million).

In respect of Cluster III, the Company has submitted the FDP for UD-1 discovery of Cluster-III on August 8, 2022. The FDP after examination, has been returned by DGH for re-submitting a robust FDP The Company

proposes to formulate a robust FDP by incorporating the results of the proposed 4C-3D OBN seismic study. Further, the Company has requested Ministry of Petroleum & Natural Gas to extend the PEL timelines by 41 months i.e. upto January 1,2026 in order to carry out 4C-3D OBN seismic data acquisition, processing & interpretation in the UD-1 discovery area.

In view of the definite plan for development of all the clusters, the cost of exploratory wells in the block i.e. '32,678.81 Million (Previous year '46,483.78 Million) has been carried over.

10.3 Certain discovered small fields (DSF) of the Company falling under various Contract Areas were identified by Directorate General of Hydrocarbon, Ministry of Petroleum & Natural Gas, and Government of India for bidding under Discovered Small Field Round III - 2021, in terms of the said bid documents the value of such fields were considered as Nil. The identified contract areas have been awarded to the winning bidders (awardees) in the month of August 2022 and the PML/PELs of these contract areas have been transferred to the said awardees. Accordingly, during the year, the Company has charged off exploratory wells in progress amounting to '21,404.94 Million lying in the fields falling under contract areas offered under DSF - III and reversed the accumulated impairment of '21,285.95 Million on the said exploratory wells (refer Note no. 8.2).

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

11.1.2    Petronet MHB Limited is classified as a subsidiary of the Company as it holds 49.99% (Previous year 49.99%) ownership interest and its subsidiary Hindustan Petroleum Corporation Limited holds 49.99% (Previous year 49.99%) ownership interest.

11.1.3    The Company is restrained from diluting the investment in the respective companies as per the covenants in the respective loan agreements of the companies till the sponsored loans are fully repaid.

11.1.4    During the year 2018-19, the Company has exercised option to exit Pawan Hans Limited by offloading entire 49% stake holdings of the Company as a preferred option, along with the strategic sale proposal being pursued by the Government of India. As at March 31, 2023, the proposed strategic sale transaction is yet to be consummated. In view of the uncertainty in the completion of the transaction,

the investment in Pawan Hans Limited has not been classified as Non-current Asset Held for Sale and accordingly the Company continues to classify Pawan Hans Limited as an Associate Company and carry the investment at Cost.

11.1.5    During the year, the Company has subscribed additional 113,000,000 nos (Previous year 24,000,000 nos.) equity share of Indradhanush Gas Grid Limited (IGGL), a Joint Venture Company having face value of '10 per share at par value. Total investment in IGGL as at March 31,2023 is '1980 Million (Previous year '850 Million). The Company has paid share application money amounting to '830 Million in the previous year 2021-22 to subscribe 83,000,000 nos. equity share having face value of '10 per share at par value for which the allotment of shares have been made in the current year.

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

11.1.7    During the year, the Company has received 108,905,462 nos of equity shares from GAIL (India) Limited as bonus shares in the ratio of 1:2.

 

11.6.1    The amount of '51.99 Million (Previous year '42.17 Million) denotes the fair value of fees towards financial guarantee given for Mangalore Refinery and Petrochemicals Limited without any consideration.

11.6.2    The amount of '5,614.38 Million (Previous year '5,614.38 Million) includes, (i) '4,010.07 Million (Previous year '4,010.07 Million) towards the fair value of guarantee fee on financial guarantee given without any consideration for ONGC Videsh Limited and (ii) '1,604.31 Million (Previous year '1,604.31 Million) towards fair value of interest free loan to ONGC Videsh Limited till January 31,2018.

 

11.6.3    The amount of '36.05 Million (Previous year '36.05 Million) is towards the fair value of guarantee fee on financial guarantee given without any consideration for the Company’s stepdown subsidiary ONGC Videsh Rovuma Limited.

11.6.4    The Company has subscribed 3,451,240,000 nos. Share Warrants of ONGC Petro additions Limited @ '9.75 per share warrant, entitling the Company to exchange each warrant with a Equity Share of Face Value of '10 after a balance payment of '0.25 for each share warrant. The position of share warrants subscribed by the Company in share warrants issued by OPaL is as under:

11.6.5 The Company entered into an arrangement for backstopping support towards repayment of principal and coupon of Compulsory Convertible Debentures (CCDs) amounting to '77,780.00 Million (Previous year '77,780.00 Million) issued by the Joint Venture ONGC Petro additions Limited (OPaL) in three tranches. The Company is continuing the same back stopping support. The outstanding interest accrued as at March 31, 2023 is '1,766.85 Million (Previous year '1,699.28 Million). The first and third tranche of CCDs amounting to '56,150 Million and '4,920 Million has been further extended for a period of 18 months and are due for maturity in December 2023 and February 2024 respectively. The second tranche of CCD amounting to '16,710 Million will be due for maturity in May, 2023. The same has been further extended by 18 months and put option exercise date will be October 18, 2024 and conversion date will be November 18, 2024.

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

The Deemed Investment amount of '62,393.68

Million (As at March 31, 2022 '62,381.35 Million) includes, '62,308.05 Million (As at March 31, 2022 '62,308.05 Million) towards the fair value of Financial Liability against these CCDs and '85.63 Million (As at March 31,2022 '73.30 Million) towards the fair value of guarantee fee on financial guarantee given without any consideration for OPaL.

11.6.6    Company’s Joint Venture Indradhanush Gas Grid Limited (IGGL) had taken a loan sanction of '25,940 Million from Oil Industry Development Board (OIDB) on August, 25 2021 for the purpose of implementation of North East Gas Grid Project guaranteed by the promoters of IGGL in proportion of these shareholdings. During the year loan of '1,000 Million has been taken by IGGL out of the sanctioned amount '25,940 Million. The Company has recognized a financial guarantee obligation in respect of its shareholding in IGGL with a corresponding recognition of Deemed Investment in IGGL of '7.68 Million (As at March 31, 2022 'nil) for the above financial guarantee.

11.6.7    During the year, the Company has subscribed an additional 15,000,000 no’s (previous year 44,420,792 no’s) units of ONGC Startup Fund Trust (registered with SEBI as an Alternative Investment Fund category I) for the total consideration of '150 Million (previous year '444.21 Million).

12.2    Generally, the Company enters into crude oil and gas sales arrangement with its customers. The normal credit period on sales of crude, gas and value added products is 7 - 30 days. No interest is charged during this credit period. Thereafter, interest on delayed payments is charged at SBI Base rate / SBI MCLR plus 4% - 6% per annum compounded each quarter on the outstanding balance.

Out of the gross trade receivables as at March 31, 2023, an amount of '91,745.82 Million (as at March 31,2022 '101,672.40 Million) is due from Public sector Oil and Gas Marketing companies, the Company’s largest customers. There are no other customers who represent more than 5% of total balance of trade receivables.

Accordingly, the Company assesses impairment loss on dues from Public sector 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 Public sector Oil and Gas Marketing Companies (refer Note No. 44.2.2, 44.3.2 & 45.4). However, these companies are reputed and creditworthy public sector undertakings (PSUs).

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

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

Mahanagar Gas Limited (MGL), one of the customers of GAIL, had filed a complaint with PNGRB on February 12, 2015 regarding applicability of tariff on supply of gas to GAIL. After hearing all parties, PNGRB vide order dated October 15, 2015 dismissed the complaint and gave a verdict in favour of the Company. Pursuant to appeal by MGL to the Appellate Tribunal for Electricity (APTEL), the case was remanded back to PNGRB. Once again, PNGRB

vide order dated March 18, 2020 had dismissed the complaint, authorized the pipeline as a Common Carrier Pipeline and directed both GAIL and MGL to pay the transportation tariff fixed by PNGRB from time to time for UTNGPL. MGL again filed an appeal with APTEL on April 04, 2020 against the order of PNGRB. APTEL vide order dated July 16, 2021 remanded the matter to PNGRB for fresh adjudication and passing final order within 3 months from the date of appointment of Member (Legal). PNGRB vide order dated September 30, 2022, directed MGL to pay the transportation charges as per the transportation tariff fixed by PNGRB for UTNGPL vide Tariff Order dated 30 December 2013 for the period from January 1,2014 onwards within a period of 2 months of passing the order. However PNGRB rejected the transportation charges from November 20, 2008 to December 31, 2013. MGL filed a writ petition before the Hon’ble High Court of Delhi challenging the PNGRB’s order dated September 30, 2022. The Hon’ble High Court of Delhi, vide order dated December 13, 2022 stayed the recovery against the PNGRB order and directed MGL to deposit a sum of '500 Million with GAIL. Although the Company has filed appeal against the order of PNGRB before APTEL, the same has been granted stay by APTEL due to the order of Hon’ble Supreme Court wherein stay has been granted for all cases / proceedings relating to GAIL (India) Limited before APTEL. The Company is in process of filing an appeal before Hon’ble High Court of Delhi in this matter. Pending final decision in the matter the Company has made a provision of '745.50 Million during the year towards the transportation charges receivable for the period from November 20, 2008 to December 31,2013

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

of Pipeline Transportation Charges in respect of RCF for the period prior to December 30, 2013.

The Company has been raising invoices on GAIL towards Pipeline Transportation Charges during the period from November 2008 to March 2023 amounting to '8,717.60 Million (Previous year '7,371.26 Million), out of this an amount of '4,954.55 Million (Previous year '3,606.83 Million) has since been received.

In view of the above, the balance receivable (excluding provision) of '2,572.51 Million as at March 31, 2023 (Previous year '3,318.00 Million) is considered good.

12.4 Includes an amount of '1,790.04 Million receivable from Public sector Oil Marketing Companies (OMC’s) towards sale of crude oil from western offshore region during the month of March’23. Sale of crude oil from Western offshore to Public sector Oil Marketing Companies (OMC’s) has been effected on provisional basis pending finalisation of Crude Oil Sales Agreements (CoSA) with the OMCs. The Company has raised invoices for sale of crude oil at benchmark prices as applicable for the period from October 2022 to February 2023. Pending finalisation of COSA’s, OMCs have released payments for

the month of March 2023 as per pricing formula benchmark applicable till September 2022 resulting into an amount of '1,790.04 Million receivable from OMCs as on March 31, 2023. The discussions with OMCs for finalization of pricing terms for supply of crude oil from western offshore applicable for March 2023 are in process and it is expected to be finalized soon. In view of this, the aforesaid amount of '1,790.04 Million receivable towards sale of crude oil from western offshore region for the month of March 2023 is considered good. (Refer note no. 30.1)

 

14.1 The above amount has been deposited with State Bank of India 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 and installations in a manner agreed with Central Government pursuant to an abandonment plan. This amount is considered as

restricted cash and hence not considered as ‘Cash and cash equivalents’.

14.2 Includes '2,834.05 Million (Previous year '2,650.56 Million) towards Tapti A Facilities and '51,097.38 Million (Previous year '47,765.55 Million) towards Panna Mukta Fields (refer Note No. 5.2, 6.2 and 24.3).

15.1    During the year 2010-11, the Oil Marketing Companies, nominees of the Government of India (GoI) recovered USD 80.18 Million (Share of the Company USD 32.07 Million (equivalent to '2,634.55 Million) as per directives of GoI in respect of Joint Operation - Panna Mukta and Tapti Production Sharing Contracts (PSCs). Pending finality by Arbitration Tribunal, the Company’s share of USD 32.07 Million equivalent to '2,634.55 Million (March 31, 2022: '2,429.30 Million) has been disclosed under the head ‘Advance Recoverable in Cash’ (refer Note No. 48.1.1 (d)).

15.2    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 Vedanta Limited (erstwhile 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 is carrying an amount of USD 167.84 Million (equivalent to '13,788.44 Million) after adjustments for interest and exchange rate fluctuations which has been recovered by GoI,

this includes interest amounting to USD 54.88 Million (equivalent to '4,437.83 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 Ministry of Petroleum and Natural Gas (MoP&NG), GoI. However, according to a communication dated January 13, 2012, MoP&NG expressed the view that the Company’s proposal would be examined when the issue of carry in 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 against the amount recoverable. (Figures in ' are restated).

17.1    The value of 3,30,484 nos. Carbon Credits (CER) (Previous year 3,30,484 nos.) has been treated as nil (as at March 31, 2022 '5.59 Million) as the same do not have any quoted price and seems to be insignificant with respect to net realisable value. There are no CERs under certification. During the year '297.37 Million ('386.62 Million for 2021-22) and '275.58 Million C335.45 Million for 2021-22) have been expensed towards Operating & maintenance cost and depreciation respectively for emission reduction equipment.

17.2    Inventory amounting to '238.97 Million (as at March 31, 2022 '217.04 Million) has been valued at net realisable value of '150.54 Million (as at March 31, 2022 '168.45 Million). Consequently, an amount of '88.43 Million (as at March 31,2022 '48.59 Million) has been recognised as an expense in the Statement of Profit and Loss under note 33.

19.2 Matter of Dispute on Delivery Point of Panna-Mukta gas between Government of India (GoI) and BG Exploration and Production India Limited (BGEPIL) along with Reliance Industries Limited (RIL) and the Company (PMT JO Partners) arose due to differing interpretation of relevant PSC clauses. According to the PMT JO Partners, Delivery Point for Panna-Mukta gas is at Offshore, however, Ministry of Petroleum and Natural Gas (MoP&NG), GoI and GAIL (India) Limited (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 the Company 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. Accordingly the Hon’ble Gujarat High Court has determined that the Delivery Point for Panna-Mukta gas is at Offshore. 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, an amount of USD 49.72 Million (Previous year USD 51.90 Million) equivalent to '4,046.39 Million (Previous year '3,871.25 Million) for the PMT JV including Company’s Share USD 19.67 Million (Previous year

USD 21.18 Million) equivalent to '1,600.79 Million (Previous year '1,556.87 Million) is maintained in the Escrow account by the PMT JV Partners.

The Company has entered into settlement agreement with the PMT JO Partners on the issue in the month of April 2023, accordingly '432.97 Million over and above the net receivables have been accounted as miscellaneous receipts in financial year 2022-23. The proceeds towards the settlement from the escrow account has been received by the Company in the month of May 2023.

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 Board of Directors of the Company, at the 312th meeting held on December 20, 2018 approved the proposal for buy-back of equity shares of the Company upto 252,955,974 fully paid-up equity shares at the price of '159/- per equity share payable in cash for an aggregate consideration not exceeding '40,220 Million. The buy-back offer worked out to 2.50% of the net-worth of the Company as on March 31, 2017 and 2.34% as on March 31, 2018. The Company has completed the buy-back of 252,955,974 fully paid-up equity shares on February 22, 2019.

Upon completion of the buy-back in 2018-19, the number of paid-up equity share capital of the Company stands reduced from 12,833,235,180 C64,166.17 Million) to 12,580,279,206 ^62,901.39 Million).

20.5.1 During the previous year 2021-22 President of India acting through and represented by Ministry of Petroleum and Natural Gas, Government of India had offloaded 188,704,188 equity shares of the Company representing 1.50 % of the total equity share capital of the Company through offer for sale(OFS).

 

20.5.2 During the financial year 2022-23, subsequent to the completion of transaction under OFS, the Government of India made an offer to eligible employees and sold 20,37,177 equity shares of the Company representing 0.02% of the total equity share capital of the Company.

21.1    Represent assessed value of assets received as gift.

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

21.3    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 November 14, 2022 and February 14, 2023, the Company had declared an interim dividend of '6.75 per share (135%) and '4.00 per share (80%) respectively which has since been paid.

In respect of the year ended March 31, 2023, the Board of Directors has proposed a final dividend of '0.50 per share (10 %) be paid on fully paid-up equity shares. This final dividend shall be subject to approval by shareholders at the ensuing Annual General Meeting and has not been included as a liability in these financial statements. The proposed equity dividend is payable to all holders of fully paid equity shares. The total estimated equity dividend to be paid is '6,290.14 Million.

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

24.2    The Company estimates provision for decommissioning as per the principles of Ind AS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’ for the future decommissioning of Oil and Gas assets, wells in progress etc. 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.

24.3    Includes '33,810.40 Million (Previous year '35,284.92 Million) accounted as provision for contingency to the extent of excess of accumulated balance in the SRF fund after estimating the decommissioning provision of Panna-Mukta fields and Tapti Part A facilities as per the Company’s accounting policy (refer Note No. 5.2, 6.2 & 14.2).

24.4    The Company had received demand orders from Service Tax Department at various work centres on account of Service Tax on Royalty in respect of Crude oil and Natural gas. Appeals against such orders have been filed before the Tribunals. The Ahmedabad Tribunal adjourned the matter sine-die vide order dated June 25, 2019, against which the Company has filed writ petition before Hon. Gujarat High Court. In this matter, Hon. Gujarat High Court in the hearing held on January 4, 2021 directed the

revenue authorities to file counter affidavit by January 21, 2021. The Central Government has filed counter affidavit on January 30, 2021. The next date of hearing before Hon. Gujarat High court is not scheduled as yet. The Company had also obtained legal opinion as per which the Service Tax/GST on Royalty in respect of Crude oil and Natural gas 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 petition (4919/2019) before Hon. High Court of Rajasthan. The Hon. 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. The final hearing has not yet taken place. The Company also filed writ of mandamus (9961/2019) before Hon. High Court of Madras seeking stay on the levy of GST on royalty. The Hon. High Court of Madras heard the matter on April 3, 2019 and issued notice to Central Government and State Government. The Central Government filed their counter affidavit on August 26, 2019. The Company filed additional grounds to the writ petition and filed rejoinder to the counter of the Central Government on January 24, 2020. The Hon. High Court of Madras closed the writ petition in hearing held on July 6, 2022 based on the department’s rejection of Company’s GST refund applications without further examination on merit. However liberty was granted to challenge the refund rejection order of department in accordance with law, accordingly, an appeal has been filed before the appellate authority challenging the department’s refund rejection order dated June 24, 2022. Disputes are also pending at various forums for various work centres in respect to GST on Royalty.

As an abundant caution, the Company has deposited the disputed Service Tax and GST on royalty along-with interest under-protest amounting to '115,581.52 Million up to March 31,2023 (?87,567.87 Million up to March 31,2022).

The Company shall continue to contest such disputed matters before various forums based on the legal opinion as per which the Service Tax/GST on Royalty in respect of Crude oil and Natural gas is not applicable. However, considering the pending final decision in a similar matter by the Nine Judges’ Bench of Hon’ble Supreme Court, which is yet to be constituted and keeping in view the considerable time elapsed, during the year, the company has reviewed the entire issue of disputed Service tax and GST on royalty and has decided to make a provision towards these disputed taxes as a prudent and conservative practice in respect of the nominated fields, as per agreed terms in JV blocks where there are no disputes amongst the JV partners and to the extent of company’s participating interest in the JV blocks where there are disputes amongst the JV partners. Accordingly, during the year the Company has provided '92,351.14 Million towards disputed taxes for the period from April 1, 2016 to March 31, 2022 together with interest thereon up to March 31, 2023 towards the ST/GST on Royalty and being material has been disclosed as an exceptional item. Further, a similar provision of '28,723.32 Million has also been made during the year for disputed taxes for the financial year 2022-23.

The Company has also obtained a legal opinion from the Additional Solicitor General, Supreme Court of India and other legal expert, with respect to JV blocks where there are disputes with JV partners, as per which the Service Tax/GST, if applicable on royalty, will required to be discharged by the JV partners in their respective share of participating interest in the

JV blocks, and pending resolution of the disputes, other partners’ share of disputed ST/GST on Royalty in such JV blocks together with interest up to March 31, 2023 amounting to '43,318.13 Million has not been considered for provision and the same has been disclosed as contingent liability.

The remaining disputed demand received by the Company towards penalty and other differences i.e. '18,624.60 Million has also been disclosed as contingent liability.

Considering the Income tax experts’ opinion on the subject, the aforesaid amount deposited under protest has been claimed in the Income Tax return / in the ongoing assessment & appellate proceedings, as an allowable expenditure under section 37 read with section 43B of the Income Tax Act, 1961 for the relevant earlier assessment years and has also been considered as an allowable expenditure while calculating the current tax for the earlier years and also towards the current tax for the year ended March 31,2023. The Company has also created deferred tax asset amounting to '879.86 Million in respect of the amounts yet to be deposited against the provision made for disputed taxes for the above periods. (refer Note no. 48.1.1.b)

24.5 A suspected fraud was noticed by the Company, wherein some of its regular / contractual employees in collusion with some vendors have made certain fictitious medical payments involving misappropriation of funds, the matter is being investigated by internal and external agencies and the final amount of the alleged fraud shall be known after the outcome of the investigation. Pending investigations an interim amount of '2.41 Million has been affirmed as a fraud on the Company and accordingly provision for the said amount has been made towards doubtful claims receivable from vendors.

26.1 During the year 2016-17, assets, facilities and inventory which were a part of the Tapti A series 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 and these assets, facilities and inventory were transferred by Government of India to the Company free of cost as its nominee. In line with

amendment in Ind AS 20 ‘Accounting for Government Grants and Disclosure of Government Assistance’ vide Companies (Indian Accounting Standards) Second Amendment Rules, 2018 (the ‘Rules’), during the year 2019-20 the Company had opted to recognize the non-monetary government grant at nominal value. (refer Note No. 5.2 & 6.2).

Registration of charges or satisfaction with Registrar of Companies

During the year, the Company had availed the above working capital loans on a rolling basis against lien on Term Deposits from the nationalized banks. The banks have confirmed that no charge is required

by them to be registered for the loans against term deposits as the original Term Deposit receipts are kept with the Banks under Lien. As a result no charge was registered with the Registrar of Companies, Delhi for the above loans against the term deposits, within 30 days from the loan sanction date as required by section 77 of the Companies Act, 2013.

 

30.1 Sales revenue in respect of Crude Oil produced from nomination blocks is based on pricing formula provided in Crude Oil Sales Agreements (COSAs) signed with buyer refineries. COSAs with Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Corporation Limited (BPCL), Chennai Petroleum Corporation Limited (CPCL) which were valid till March 31,2018 and were extended provisionally from time to time till September 30, 2022.

Government of India (GoI) deregulated sale of domestically produced crude oil with effect from October 1, 2022. Subsequent to deregulation, crude oil from Western offshore region has been auctioned from time to time till Feburary’23 and separate COSAs were entered into with each buyer to whom crude oil from Western offshore region has been allocated through e-auctions. All the terms of COSAs entered into with Buyers for sale of crude oil for the month of February’23 are valid for a period of 1 year (except terms for determining pricing and allocation of quantity of crude oil). Revenue in respect of Sale of crude oil from western offshore region for the month of March 2023 is invoiced on the benchmark prices as applicable for the period from October 2022 to February 2023. The discussion with the buyer refineries (Public sector Oil Marketing Companies) for finalization of pricing terms for supply of crude oil from western offshore applicable for March 2023

 

are in process and it is expected to be finalized soon. (Refer note no. 12.4)

For Crude Oil produced in North East Region, Sales revenue in respect of Crude oil supplied to IOCL is based on the pricing formula provided in COSA signed with IOCL effective from April 01,2018, is valid for 5 years till March 31,2023 (approved for extension by 1 more year till March 31,2024) and to Numaligarh Refinery Limited (NRL) is based on pricing formula provided by Ministry of Petroleum and Natural Gas (MoP&NG).

The process of finalizing and signing of COSAs for crude oil sale from other regions is under process as at March 31,2023. Crude oil of these regions is being supplied to Public sector Oil Marketing Companies on the basis of provisional prices.

30.2 Majority of Sales revenue in respect of Natural Gas is based on domestic gas price of USD 6.10/ mmbtu and USD 8.57/mmbtu (on GCV basis) notified by GoI for the period April 01, 2022 to September 30, 2022 and October 01, 2022 to March 31, 2023 respectively in terms of “New Domestic Natural Gas Pricing Guidelines, 2014”. For consumers in NorthEast (upto Govt. allocation), 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 ‘North-East Gas Subsidy’.

30.3 LPG produced by the Company is presently being sold as per guideline issued by MoP&NG to PSU Oil Marketing Companies (OMCs), as per provision of Memorandum of Understanding (MOU) dated March 31, 2002 signed by the Company with OMCs which was valid for a period of 2 years or till

the same is replaced by a bilateral agreement or on its termination.

Value Added Products other than LPG are sold to different customers at prices agreed in respective Term sheets / Agreements entered into between the parties.

38.1 Pursuant to the introduction of Section 115BAA of the Income Tax Act, 1961 vide Taxation Laws (Amendment) Act, 2019 the Company had an option to pay corporate income tax at the rate of 22% plus applicable surcharge and cess (lower rate) as against the earlier rate of 30% plus applicable surcharge and cess, subject to certain conditions. Considering all the provisions under said section 115BAA of the Income Tax Act, 1961, during the year ended March 31,2022 the Company had decided to avail the option of lower rate with effect from the financial year 2020-21. Accordingly, the Company had recognized provision for tax expenses during the previous year and re-measured its net Deferred Tax liabilities on the basis of the provision prescribed in the said section.

The net impact in the previous year due to availing the above option had resulted in decrease in deferred tax by '90,905.15 Million (of which '(-)1,382.25 Million was accounted in Other Comprehensive Income) and decrease in current tax by '28,019.77 Million (including '1,639.72 Million relating to earlier years).

During the year, the Company has considered the benefit of deduction on dividend income during the year, as per section 80M of the Income Tax Act, 1961, having a tax impact amounting to '6,293.64 Million (previous year '4,245.04 Million) on current tax expense.

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

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

42.1    Defined Contribution plans:42.1.1    Post Retirement Benefit Scheme (PRBS)

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

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

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

(ii)    Fixation of rate of contribution and interest thereon.

(iii)    Purchase of annuities for the members.

42.1.2    National Pension Scheme (NPS)

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

The obligation of the Company is to contribute to NPS at the option of employee to the extent of amount not exceeding 30% of basic pay and dearness allowance as reduced by the employer’s contribution towards provident fund, gratuity, postretirement medical Benefit (PRMB), post-retirement

benefit scheme or any other retirement benefits. An employee can opt for a maximum of up to 10% of its Basic Salary and DA as employer’s contribution towards NPS. All other standard provisions of NPS applies to the scheme.

42.2    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.

During the year, the Company has made an additional contribution of '991.91 Million to CSSS Trust on account of increment in financial support over and above the existing financial support for cases of death/permanent total disability of the regular employee due to accident while on duty.

42.5.1 Brief Description: A general description of the type of Employee Benefits Plans is as follows:

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

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

(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.

 

42.5.3    Gratuity

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

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

42.5.4    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. During the year, Company has given an option to retired employees to include their dependent parents in Company’s PRMB scheme. The liability for the same is recognized annually on the b

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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 ‘Cash 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 ("Claimants”) 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 ‘Advance 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 ‘Provisions, Contingent Liabilities and Contingent Assets' for the future decommissioning of Oil and Gas assets at the end of their economic lives. Most of these decommissioning activities would be in the future 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, 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 GoI Budget and classified as ‘North-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 ‘Leases' 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 ‘low 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 Company’s 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 -Company’s 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 ‘excusable 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 ‘Platt'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 Case” 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 “Agreement Case” and issue a fresh award within three months of that date. The “Agreement Case” 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 ‘Production Sharing Contracts' with Government of India / Nominated Blocks: a) In respect of NELP blocks in which the Company has 100% participating interest: Rs,2,750.40 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 (‘ONGC’ or ‘the Company’) 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 Company’s 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 ‘Statement of Cash flows’ and Ind AS 102, ‘Share - Based Payment’, which are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS -7, ‘Statement of Cash flows’ and IFRS - 2, ‘Share - Based Payment’ 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 Company’s accounting policies and that have the significant effect on the amounts recognized in the Financial Statements. (a) Determination of functional currency Currency of the primary economic environment in which the Company operates (“the functional currency”) is Indian Rupee (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, lessee’s option to purchase and estimated certainty of exercise of such option, proportion of lease term to the asset’s 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 asset’s value, significant changes in the technological, market, economic or legal environment, market interest rates etc.) and internal factors (obsolescence or physical damage of an asset, poor economic performance of the asset etc.) which could result in significant change in recoverable amount of the Oil and Gas Assets. (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 ‘Provisions, Contingent Liabilities and Contingent Assets’ for the future decommissioning of Oil and Gas assets at the end of their economic lives. Most of these decommissioning activities would be in the future, the exact requirements that may have to be met when the removal events occur are uncertain. Technologies and costs for decommissioning are constantly changing. The timing and amounts of future cash flows are subject to significant uncertainty. The timing and amount of future expenditures are reviewed 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 Management’s best estimate of future crude oil and natural gas prices, production and reserves volumes. The present values of cash flows are determined by applying pre tax-discount rates of 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 ‘Platt’s Crude Oil Market wire’ 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 “estimated 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.” 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) Management’s estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of inflation, medical cost trends, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses. 4.1 Includes assets pertaining to production and allied facilities as on April 1, 2015 classified as “Oil and Gas Assets”under 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 ‘First -time Adoption of Indian Accounting Standards’ (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 “Oil and Gas Assets” 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 ‘First -time Adoption of Indian Accounting Standards’ (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 ‘First -time Adoption of Indian Accounting Standards’ (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 ‘First -time Adoption of Indian Accounting Standards’ Standards’ (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 ‘First -time Adoption of Indian Accounting Standards’. 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 “Joint Arrangements”, 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 Company’s 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 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 ‘Cash and cash equivalents’. 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) ONGC’s 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 (“Claimants”) 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 ‘Advance Recoverable in Cash under financial assets -others. (Figures in ‘are 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 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 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 ‘are 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 Hon’ble 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 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. 16.1 On transition date, the Company reclassified Two Helicopters (“the Helicopters”) as “Assets classified as held for sale’. 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 ‘Other Income”. (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 of’.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 ‘Provisions, Contingent Liabilities and Contingent Assets’ for the future decommissioning of Oil and Gas assets at the end of their economic lives. Most of these decommissioning activities would be in the future 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 “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 GoI Budget and classified as ‘North-East Gas Subsidy’. 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 ‘Surplus from Gas Pool Account’. 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 ‘Earnings per Share’, 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 ‘Leases’ 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 members’ 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 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. 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 employer’s 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 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. 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 Company’s 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 Company’s 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 Company’s 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 Company’s 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 OVL’s 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 Company’s objective when managing capital is to: - Safeguard its ability to continue as going concern so that the Company is able to provide maximum return to stakeholders and benefits for other stakeholders; and - Maintain an optimal capital structure to reduce the cost of capital. The Company maintains its financial framework to support the pursuit of value growth for shareholders, while ensuring a secure financial base. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The capital structure of the Company consists of total equity (Refer Note 21 & 22). 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. 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 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. 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 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. 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 Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows. 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. 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 management’s 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 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 ‘low risk’ 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 “Oil 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 ‘conveyance 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 (“Claimants’) 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 Received’ 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 Subsidy’, 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 Benefits’’ 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 Enterprise’s 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: ‘Includes 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 centre’s. 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 Disclosures”: 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 ’Leases'' 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 delay’/ 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 ‘‘Impairment of Assets" and Guidance note on Accounting for Oil and Gas producing Activities (Revised 2013) issued by ICAI on impairment of Assets” 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 ''Platt’s 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 “Provisions, Contingent Liabilities and Contingent Assets”: 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 Hon’ble 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 Hon’ble 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 ‘Production Sharing Contracts’ 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 “estimated 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 year’s figures have been regrouped/ reclassified, wherever necessary, to conform to current year’s 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 1. Corporate information Oil and Natural Gas Corporation Limited ('ONGC' or 'the Company') is a public limited company domiciled and incorporated in India. The Company's shares are listed and traded on Stock Exchanges in India. The Company is engaged in exploration, development and production of crude oil and natural gas. 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 the number of equity shares held by the shareholders. 3. Pursuant to the approval of the members dated 28.01.2011, during the financial year 2010-11, one equity share having face value of Rs. 10/- each had been sub-divided into two equity shares of Rs. 5/- each and bonus shares in proportion of one new equity bonus share of Rs. 5/- each for every one fully paid up equity share of '5/- each held on 09.02.2011 (record date) had been allotted. The company has issued total 4,277.75 million equity shares of face value of '5 each issued as fully paid up by way of bonus shares during the period of five years immediately preceding the reporting date. 4. Shares reserved for issue under option: Nil (previous year nil) 5. During the previous year 2013-14, PMT JV had downgraded reserves for the Mid and South Tapti fields due to geological surprises. As a result, the production profile is envisaged only up to 2015-16 and the sale realization (net of operating expenses and statutory levies) is being transferred to Site Restoration Fund pursuant to the Production Sharing Contract. Under these circumstances, the field has been fully depleted and depletion aggregating to Rs. 184.69 million (Previous year Rs. 9,090.44 million) has been charged to the Statement of Profit and Loss. Similarly, as at March 31, 2015, the provision for impairment of Rs. 263.62 million (Previous year Rs. 441.87 million) representing the net asset value and Capital Work in Progress in Tapti field has been carried in the financial statements. 6. In respect of Ratna R series field, a producing field of the company, MOPNG had during 1995-96, issued an award of the contract for development of the field to a consortium of Essar Oil Limited and Premier Oil limited consequent to which the company stopped production. Pending the execution of the Production Sharing Contract, the company continues to include Rs. 2,313.96 million in gross producing property (including provision for abandonment of '891.74 million.) The said field has been fully impaired and the net carrying amount as at March 31,2015 is Nil. 7. Other adjustment includes an amount of Rs. 4,196.00 million which Government of India (GoI) vide letter dated 1st January, 2015, has reimbursed as compensation for past costs incurred by ONGC in certain discovered fields awarded to Joint Ventures/ Private Companies. Accordingly an amount of Rs. 257.17 million has been adjusted against the Net Carrying Amount of assets of Panna, Mukta, Tapti and Ravva fields and balance amount of Rs. 3,938.83 million has been accounted for as other income during the year. 8. Plant and Equipment includes an amount of Rs. 8,448.52 million (Previous Year Rs. 8,436.64 million) in respect of Capital Works in Progress (CWIP) for C2-C3 plant (including C3-C4 blending and recycling facilities) which is mechanically complete and will be capitalized on completion of test run. 9. During the Financial year 2004-05, the company had acquired 90% Participating Interest in Exploration Block KG-DN-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 the financial year 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. 2,124.44 million. Initial in-place reserves have been established in this block and adhering to original PSC time lines, a Declaration of Commercially (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 has been reviewed by the Management Committee (MC) of the block on 25.09.2014 and preparation of Field Development Plan (FDP) in progress. The review of DOC in respect of Cluster I and Cluster III by the MC is pending as on 31st March, 2015. 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 25.1.2014. Under the New Policy guidelines in this regard, the Government has permitted the contractor to undertake appraisal drilling, seismic API and related activities till submission of FDP which is currently underway and drilling of two appraisal wells is in progress. Pending approval of FDP by the MC in respect of Cluster II and review of DoC by the MC in respect of Cluster I and III, as a matter of abundant caution, the company has retained the provision of Rs.17,216.18 million (Previous Year Rs. 17,210.82 million) towards acquisition costs and cost of exploratory wells. 10. With effect from 28th February, 2015, ONGC Mangalore Petrochemicals Limited has become subsidiary (previous year Joint venture) of ONGC on account of direct holding of 48.99% (previous year 46%) and indirect holding of 51.00% (previous year 3%) stake through subsidiary company MRPL. 11. 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 loan agreements. 12. Shares of Oil Spill response limited valued at GBP one each at the time of issuance. Total value in INR at the time of issuance of shares was Rs. 6,885/-. 13. Loan to ONGC Videsh limited (wholly owned subsidiary) amounting to Nil (previous year Rs. 50,000 million) has been converted into nil (previous year 500 million) fully paid Equity Shares of Rs. 100 each. 14. Loans and advances to employees include an amount of Rs. 0.24 million (Previous Year Rs. 0.37 million) outstanding from Key Managerial Personnel. 15. In Ravva Joint Venture, 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 favour of operator, was disputed by the operator 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 had made a provision towards the claim made by the GoI in earlier years and the amount of provision outstanding as on 31th Mar, 2015 is Rs. 10,513.79 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. 3437.68 million)] from the company in earlier years which has been carried as recoverable under Long Term Loans and advances in the Balance Sheet as at 31st March, 2015. In subsequent legal proceedings, the Appellate Authority of the Honourable 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 11th October, 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 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 31st Mar 2015. (Figures in INR are reinstated). 16. During the financial year 2010-11, the Oil Marketing Companies, nominees of the GoI recovered USD 32.07 million (Rs. 2,009.02 million) ONGC's share as per directives of GoI 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 GoI. BGEPIL along with RIL ("Claimants") have served a notice of arbitration on the GoI in respect of dispute, differences and claims arisen in connection with the term 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 Advance Recoverable in Cash or Kind or Value to be Received' under Long Term Loans and Advances. (Figures in INR are reinstated). 17. Deposit under Site Restoration Fund Scheme: A sum of Rs. 125,443.80 million till 31.03.2015 (previous year '113,101.59 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 cash equivalents'. 18. 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. Amount deposited in unclaimed dividend account is earmarked for payment of dividend and cannot be used for any other purpose. 20. Includes Rs. 21,067.60 million (Previous year Rs. 2,092.23 million) towards differential royalty being deposited from 1st February, 2014 as per the interim order of the Hon'ble Supreme Court of India. (also refer Note no. 44.1.1.b) 21. Includes an amount of Rs. 0.13 million (Previous Year Rs. 0.13 million) outstanding from Key Managerial Personnel. 22. In terms of the decision of Government of India (GOI), the company has shared Rs. 362,996.20 million (Previous Year Rs. 563,842.85 million) towards under-recoveries of Oil Marketing Companies (OMCs) on price sensitive products viz. Diesel (till 18th October'14), Domestic LPG and PDS Kerosene for the year 2014-15 (Nil in 4th quarter of FY 2014-15 as per GoI directives) by extending the discount in the prices of Crude Oil, Domestic lPg and PDS Kerosene based on the rates of discount communicated by Petroleum Planning and Analysis Cell (PPAC) and Ministry of Petroleum and Natural Gas (MoP&NG). The impact of discount is as under: 23. 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. 24. During the previous year, based on the directives issued by MoP&NG and Petroleum Planning and Analysis Cell (PPAC) vide letters dated 31st May, 2012 and 1st June, 2012 respectively, w.e.f. 1st April, 2012, refineries started making deductions from ONGC payments towards Octroi/ VAT/ CST on discounts allowed by ONGC to refineries on supplies of crude oil. Total deduction made by refineries on this account from 1st April, 2012 to 30th September, 2013 amounting to Rs. 25,032.60 million (includes Rs. 15,846.70 million for the year 2012-13) was provided for. The company had revised the sales revenue and corresponding statutory levies w.e.f. 1st April 2012 onwards, considering deductions made by refineries based on MoP&NG directives. Aforesaid provision made by the Company till 30th September, 2013 had also been written back. 25. Recognition of revenue on account of Short Lifted Gas amounting to Rs. 1,774.13 million (Previous Year Rs. 1,253.74 million) has been postponed. This will be recognized when there is reasonable certainty regarding ultimate collection as per the policy of the company. 26. Sales revenue of Natural Gas is based on gas price fixed by GoI from time to time. Till October'14, sales revenue is based on MoP&NG order dated 31st May'10 wherein effective from 1st June'10, the price of APM gas produced by NOCs was fixed at US$ 4.2/mmbtu less royalty (on NCV basis). On 25th October'14, GoI notified "New Domestic Natural Gas Pricing Guidelines, 2014" applicable from 1st November'14. Under said guidelines, price of domestic gas produced in India during 1st November'14 to 31st March'15 has been fixed as US$ 5.05/mmbtu (on GCV basis). For gas consumers in North-East, consumer price is 60% of the producer price and the difference between producer price and consumer price is paid to the company through GoI Budget and shown as 'North-East Gas Subsidy'. 27. 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 APM and non-APM consumers. 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 contribution. Based on the details received from GAIL, an amount of Rs. 2,292.30 million (Previous year Rs. 3,508.10 million) for Gas Pool Receipts for the current year and Rs. 974.74 million (Previous year Rs. 212.37 million) on account of interest on Gas Pool Account has been considered as 'Surplus from Gas Pool Account'. 28. Excise duty on sale of 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. 29. During the year, Government has directed the company to make following payments/adjustments towards differential royalty at uniform rate of discount for the period 2008-09 to 2013-14 to the State and Central Government: 30. Disclosure under the Revised Accounting Standard -15 on "Employee Benefits" 31. Brief Description: A general description of the type of Employee Benefits Plans is as follows: 32.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. 33. 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 34. 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. 35. Gratuity 15 days salary for each completed year of service. Vesting period is 5 years and the payment is restricted to Rs. 1.00 million. 36. 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. 37. Terminal Benefits a. At the time of superannuation, employees are entitled to settle at a place of their choice and they are eligible for Transfer Travelling Allowance. b. Employees are gifted gold coins on retirement up to 31.01.2015, depending upon their level and years of service. This scheme has been discontinued w.e.f. 27.02.2015. Accordingly Rs. 5,854.33 million provided in earlier years has been written back (Note 7 & 11). Re-measured figures are restated accordingly in note no. 37.3 and 37.5. 38. The amounts included in the fair value of plan assets of gratuity fund in respect of Reporting Enterprise's own financial instruments and any property occupied by, or other assets used by the reporting enterprise are Nil (Previous Year Nil) 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. 39. 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. 40. Disclosure under Accounting Standard -18 on "Related Party Disclosure": 40.1 Name of related parties and description of relationship: Jointly Controlled Entity i. Petronet LNG Limited ii. ONGC Teri Biotech Limited iii. Mangalore SEZ Limited iv. ONGC Petro-additions Limited v. ONGC Tripura Power Co. Limited vi. Dahej SEZ Limited vii. ONGC Mangalore Petrochemicals Limited (up to 28.02.2015) 40.2 Key Managerial Personnel: i) Shri D K Sarraf, Chairman and Managing Director ii) Shri A K Banerjee, Director (Finance) up to 30.04.2015 iii) Shri T K Sengupta, Director (Offshore) iv) Shri Ashok Verma, Director (Onshore) from 19.06.2014 v) Shri D D Misra, Director (Hr) from 01.08.2014 vi) Shri A K Dwivedi, Director (Exploration) from 16.03.2015 vii) Shri Shashi Shanker, Director (T&FS) viii) Shri N K Verma, Director (Exploration) up to 26.08.2014 ix) Shri K.S Jamestin, Director (HR) up to 31.07.2014 x) Shri N K Sinha, Company Secretary 41. Disclosure under Accounting Standard - 19 on 'Leases' 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. 977.22 million (Previous year Rs. 934.64 million) had been paid towards cancellable Operating Lease. 42. The financial statements of 117 (previous year 124) out of 134 (previous year 135) JVs/NELP 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 17 (previous year 11) JVs/NELP blocks, 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. As per the Production Sharing Contracts signed by the Company with the Gol, the Company is required to complete Minimum Work Programme (MP) 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 surrenders the block without completing the MP, the estimated cost of completing balance work programme is required to be paid to the Gol. During the year LD amounting to (net of reversal) Rs. 24.08 million (Previous year Rs. 245.65 million) and cost of unfinished MWP (net of reversal) Rs. 1,420.64 million (Previous year (net of reversal) Rs. (-) 59.14 million), paid/payable to the Gol is included in survey and wells written off expenditure respectively. 44. In respect of 3 NELP blocks (previous year 12) which have expired as on 31st March, 2015, the Company's share of Unfinished Minimum Work Programme (MWP) amounting to '820.40 million (previous year to Rs. 18,014.12 million) has not been provided for since the company has already applied for further extension of period in these blocks as 'excusable 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 '820.40 million (previous year Rs. 18,014.12 million) is included in MWP commitment under note no. 44.1.6. 45. 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 Ltd (Operator), on condition that Focus Energy Ltd (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. 46. Disclosure under Accounting Standard - 28 and Guidance note on Accounting for Oil and gas producing Activities (Revised) on "Impairment of Assets" 47. 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 are 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. 48. 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. 49. 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 19.71% (previous year 19.10 %) for Rupee transactions and 13.89% (previous year 13.00 %) 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 'Platt's 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 GoI. (refer note no.26.5) 50. During the year Rs. 2,136.53 million (Previous Year Rs. 1,025.48 million) is provided as impairment loss. Out of this, an amount of Rs. 380.89 million (Previous Year Rs. 355.97 million) has been provided as additional impairment in respect of onshore CGUs - Jodhpur and Silchar. Rs. 146.40 million (Previous Year Rs. 69.05 million) has been provided for already impaired offshore CGU- Ratna. For B 121 an amount of '49.73 million (Previous Year '20.09 million) has been provided as additional impairment. In addition, Rs. 367.91 million (Previous Year Rs. 30.42 million) pertaining to block CY-OS- 90/1 (PY-3) has been provided as presently the field does not have any potential to produce. An amount of Rs. 1,025.81 million (Previous Year Rs. 79.40 million) mainly represents additional impairment charge in respect of certain onshore Pre- NELP joint venture blocks (RJ ON 6, CB ON 2 and CB ON 3) due to adjustment of cost recovery from revenue and sharing of 100% royalty. Balance amount of Rs. 73.38 million, Rs. 91.14 million (previous year Rs. 15.90 million) and Rs. 1.27 million has been provided for Ankleswar, Hazira Plant and Retail Trading respectively. 51. Further, Rs. 201.88 million (Previous Year Rs. 806.08 million) impairment losses has been reversed because of decrease in Abandonment cost estimation in respect Offshore CGU D-18 and Tapti. 52. Impairment testing of assets under exploratory phase (Exploratory Wells in Progress) has been carried out as on 31.03.2015, and an amount of Rs. 1,172.15 million (Previous year Rs. 2,546.46 million) has been provided during the year 2014-15 as impairment loss. Further, Rs. 1,203.23 million (Previous Year Nil) impairment loss has been reversed in the Statement of Profit and Loss as exploratory phase assets have been transferred to producing properties. 53. Other Disclosures under Schedule III to the Companies Act, 2013: 54. Contingent liabilities and commitments (to the extent not provided for) 55. Contingent Liabilities: Claims against the Company/ disputed demands not acknowledged as debt:- (Rs. in million) Particulars As at As at 31st March, 31st March, 2015 2014 I In respect of Company i. Income Tax 80,032.68 55,087.45 ii. Excise Duty 8,572.86 9,406.06 iii. Custom Duty 190.61 1,599.77 iv. Royalty (Note - 44.1.1.b) 117,738.83 117,301.90 v. Cess 6.57 6.57 vi. AP Mineral Bearing Lands (Infrastructure) Cess 2,371.76 2,211.27 vii. Sales Tax 24,776.47 46,086.36 viii. Service Tax 1,374.57 4225.07 ix. Octroi 205.52 68.54 x. Specified Land Tax (Assam) 3,863.05 3,528.89 xi. Claims of contractors (Incl. LAQ) in Arbitration/Court 72,750.49 50,783.08 xii. Employees Provident Fund 66.35 66.35 xiii. Others 53,578.89 53,911.41 Sub Total (A) 365,528.65 344,282.72 II In respect of Joint Ventures i. Income Tax 8.91 8.91 ii. Excise Duty 4.17 4.17 iii. Custom Duty 1,473.86 3,798.73 iv. Sales Tax and Service Tax 2,880.48 2,879.82 v Claims of contractors in Arbitration / Court 5,356.90 5,095.94 vi. Others 867.31 854.74 Sub Total (B) 10,591.63 12,642.31 TOTAL (A B) 376,120.28 356,925.03 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 Central Government (GoI) and State Governments, on production of Crude Oil and Natural Gas from offshore fields 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 GoI 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 Rs. 117,242.00 million (reduced to the extent Rs. 16,440.00 million which is paid to Gujarat Govt.- refer Note No. 31.2) on this account for the period from April, 2008 to March, 2015 C116,326.96 million as on 31.03.2014) has been considered as Contingent Liability. Pending the final outcome of the SLP filed before the Hon'ble Supreme Court, differential royalty (royalty on pre-discount price minus royalty on post-discount price) amounting to Rs. 21,067.60 million deposited w.e.f. February, 2014 C2,092.23 million as on 31.03.2014) in terms of Hon'ble Supreme Court order has been shown as deposit. 56. Corporate Guarantees executed by the Company on behalf of its wholly owned subsidiary, ONGC Videsh Limited (OVL): 57. Guarantees executed for financial obligations: i) Amount of Guarantee Rs. 304,152.81 million (Previous year Rs. 321,657.40 million) ii) Amount outstanding Rs. 301,671.35 million (Previous year Rs. 314,417.66 million) 44.1.4 Corporate Guarantees executed by the Company on behalf of its subsidiary, MRPL: i) Amount of Guarantee Rs. 29,754.00 million (Previous year Rs. 13,513.50 million) ii) Amount outstanding Rs. 3,290.04 million (Previous year Rs. 7,370.56 million) 58. Capital Commitments: Estimated amount of contracts remaining to be executed on capital account:- i) In respect of Company: Rs. 134,081.19 million (Previous year Rs. 83,351.44 million). ii) In respect of Joint Ventures: Rs. 3,842.99 million (Previous year Rs. 4,367.54 million). 59. Other Commitments Estimated amount of Minimum Work Programme (MWP) committed under various 'Production Sharing Contracts' with Government of India/ Nominated Blocks: i) In respect Nominated Blocks Nil (Previous year '441.59 million). ii) In respect of NELP blocks in which the Company has 100% participating interest: Rs. 3,000.14 million (Previous year Rs. 9,600.47 million). iii) In respect of NELP blocks in Joint Ventures, company's share: Rs. 32,705.26 million (Previous year '62,247.39 million). 60. The Company has given an undertaking to The State Bank of India, for a Rupee term loan agreement amounting to Rs. 30,350 million (previous year Rs. 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 extent of 10% of the estimated project cost of Rs. 40,470 million. 61. 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 "estimated 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." 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 is available then performance method such as material balance, simulation, decline curve analysis are applied to get more accurate assessments of reserves. The Company uses the services of third party agencies for due diligence and it gets the reserves of its assets audited by third party periodically by internationally reputed consultants who adopt latest industry practices for their evaluation. 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 subsurface 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 necessitates revision in estimation of reserves. 62. 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 differences, if any, is carried out on completion of reconciliation. 63. Discrepancies of crude oil of 96,496 MT (valued at Rs. 395.47 million as on March 31,2014) between physical and book records at Ankleshwar Asset have been ascertained by the management during the year and accordingly these have been written off/adjusted in inventories. Further, 70,746 MT of pit oil lying in book of Ahmedabad Asset (valued at nil as on March 31,2014) has also been written off during the year. These write offs and consequential adjustments thereto have been made on account of over reporting of crude oil production in earlier financial years. The discrepancies as mentioned above are under investigation by the appropriate authorities. 64. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses. 65. 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. 66. Previous year's figures have been regrouped/reclassified, wherever necessary, to conform to current year's classification. 67. Figures in parenthesis as given in these Notes to Financial Statement relate to previous year. Mar 31, 2013 1. Corporate information Oil and Natural Gas Corporation Limited (''ONGC'' or ''the Company'') is a public limited company domiciled in India and incorporated under the provisions of Companies Act, 1956. Its Shares are listed and traded on Stock exchanges in India. The Company is engaged in exploration, development and production of crude oil and natural gas. 2.1 Subsequent to the date of balance sheet, ONGC Petro-addition Limited has allotted equity shares against the advance for equity of Rs. 3,328.69 million. 2.2 Loans and advances to employees include an amount ofRs.0.50 million (Previous YearRs.0.11 million) outstanding from whole time directors. 2.3 In Rawa Joint Venture, the demand towards additional profit petroleum raised by the 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 favour of operator, was disputed by the operator M/s Cairn Energy India Pty Ltd. 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 earlieryears and the amount of provision outstanding as on 31st March, 2013 isRs.9,129.07 million (equivalenttoUSD 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. 2,984.92 million)] from the company in earlier years which has been carried as recoverable under Long Term Loans and advances in the Balance Sheet as at 31 st March, 2013. In subsequent legal proceedings, the Appel late 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 had preferred an appeal before the Federal Court of Malaysia. The Federal Court of Malaysia, vide its order dated 11 th October, 2011, had dismissed the said appeal of the Gol. The company has taken up the matter regarding refund of the recoveries made in view of the favourable 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 issues of ONGC carry under Rawa 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 ended 31 st March, 2013. 3. Deposit under Site Restoration Fund Scheme: Asum ofRs. 101,331.21 million till 31.03.2013 (previous yearRs. 91,825.72 million) has been deposited with banks under section 33ABAof the Income TaxAct, 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 cash equivalents''. 4.1 This includes an amount of Rs. 0.56 million (previous yearRs. 0.56 million) in respect of Carbon Credits. 5.1 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. Fixed deposits ofRs. Nil (Previous yearRs.52,380.00 million) has been pledged to Banksagainst Short term loan taken from Banks. 5.2 Amount deposited in unclaimed dividend account is earmarked for payment of dividend and cannot be used for any other purpose. 6.1 Loans and advances to employees include an amount ofRs. 0.39 million (Previous YearRs. 0.24 million) outstanding from whole time directors. 6.2 During the financial year 2010-11, the Oil Marketing Companies, nominees of the Gol recovered USD 32.07 million (Rs. 1,744.29 million), ONGC''s share as per directives of Gol in respect of Jointly Controlled Assets - Panna, Mukta & 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 ("Claimants") have served a notice of arbitration on the Gol in respect of dispute, differences and claims arisen in connection with the term of Panna, Mukta & Tapti PSC''s. 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 PSC''s. Subsequently, vide letter dated July 4,2011 MoP&NG has advised ONGC not to participate in the arbitration initiated by RIL & BGEPIL under Panna, Mukta & Tapti PSC''s. 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 PSC''s. Pending final arbitral award, the same has been shown as Receivable from Gol under ''Advance Recoverable in Cash or in kind orfor value to be received''. 7.1 Crude Oil Sales Agreements (COSA) with Indian Oil Corporation Limited (IOC) has been signed on 20th September, 2012. Since the COSAis made effective from 1st April, 2010, necessary adjustments amounting to Rs. 7,289.50 million (inclusive of VAT Rs.306.54 million) for 2010-11 and 2011-12 considering revised crude prices for supplies made to IOC for the period from IstApril, 2010 to 31 st March, 2012 have been made in books of accounts during 2012-13, by way of issue of credit notes. 7.2 COSA with Chennai Petroleum Corporation Limited (CPCL) has been signed on 15th May, 2013. Since the COSA is made effective from IstApril, 2010, necessary adjustments amounting toRs. 171.03 million (inclusive of VATRs. 11.97 million) for 2010-11 and 2011 -12 considering revised crude prices for supplies made to CPCLfor the period from 1 st April, 2010 to 31 st March, 2012 have been made in books of accounts during 2012-13, by way of issue of credit notes. 7.3 COSA with Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited HPCL was signed and implemented during 2011-12. Sales revenue in respect of crude Oil supplied to Mangalore Refinery and Petrochemicals Limited (MRPL) is based on the pricing formula agreed with the refinery in terms of erstwhile Moll. For Crude Oil produced in Assam, sales revenue is based on the pricing formula provided by MoP&NG. 7.4 Based on the directives issued by MoP&NG and Petroleum Planning and Analysis Cell (PPAC) vide letters dated 31st May, 2012 and 1st June, 2012 respectively, w.e.f. 1 April, 2012, refineries started making deductions from ONGC payments towards Octroi/VAT/CST on discounts allowed by ONGC to refineries on supplies of crude oil. Total deduction made by refineries on this account for the period from IstApril, 2012 to 31st March, 2013 works out toRs. 15,846.70 million. The same amount has been provided for in the accounts. 7.5 Recognition of revenue on account of Short Lifted Gas amounting toRs. 571.42 million (Previous YearRs. 55.45 million) has been postponed. This will be recognized when there is reasonable certainty regarding ultimate collection as per the policy of the company. 7.6 Sales revenue of Natural Gas is based on producer price fixed by Gol vide letter dated 31.05.2010 in respect of APM gas produced by National Oil Companies (NOCs) at US$ 4.2/mmbtu inclusive of royalty effective from 01.06.2010. For APM consumers, except for consumers in North Eastern states, the consumer price is same as producer price, i.e. US$ 4.2/mmbtu inclusive of royalty. For APM consumers in North-East, consumer price is 60% of the producer price, i.e., US$ 2.52/ mmbtu inclusive of royalty and the difference between producer price and consumer price is paid to the company through Gol Budget up to allocated quantity and shown as ''North-East Gas Subsidy''. 7.7 The company is supplying majority of Natural gas to GAIL (India) Limited (GAIL) which also purchases gas from other sources and sells to APM and non-APM consumers. Based on the Government directives, excess in Gas Pool Account at the end of financial year is transferred to ONGC I OIL in accordance with their contribution. Based on the details received from GAIL, an amount ofRs. 3700.00 million for Gas Pool Receipts for the current year,Rs. 339.23 million on account of interest on Gas Pool Account and reversal ofRs. 441.50 million w.r.t. previous year''s balance in Gas Pool Account, has been considered as ''Surplus from Gas Pool Account'' as on 31 st March, 2013. 8.1 As per the Farm Out agreement dated 5th November, 2012 entered into by the company with INPEX Offshore East India Ltd (INPEX), the company has agreed to transfer 26% Participating Interest (PI) in Block KG-DWN-2004/6 to INPEX for a consideration of USD 9.10 million (Rs. 494.95 million), with effect from IstApril, 2012. The approval of the Government of India for the assignment of PI, which is a condition precedent to the above agreement, has been received on 15th April, 2013 and accordingly, the consideration ofRs. 494.95 million has been accounted under the head miscellaneous receipts. 9.1 The Government has revised the rate of Cess from Rs.2,500/MT to Rs.4,500/MT w.e.f. 17.03.2012, resulting in the material increase in the expenditure. 9.2 Excise duty on sale of 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. 9.3.1 During the year, the Company has recognised additional liability ofRs. 5,079.53 million towards revision in Long Service Rewards Scheme. Further, in terms of DPE guidelines, the company has recognized liability of Rs.18,504.79 million towards superannuation benefits to employees. These have been allocated to activities as per the policy of the company. 10. Disclosure under the Revised Accounting Standard -15 on "Employee Benefits" 10.1 Brief Description: A general description of the type of Defined Benefit Plans is as follows: 10.1.1 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 10.1.2 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. 10.1.3 Gratuity:- 15 days salary for each completed year of service. Vesting period is 5 years and the payment is restricted toRs. 1.00 million. 10.1.4 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. 10.1.5 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. Employees are gifted gold coins also, depending upon their level and years of service. 10.4 The amounts included in the fair value of plan assets of gratuity fund in respect of Reporting Enterprise''s own financial instruments and any property occupied by, or other assets used by the reporting enterprise areRs. Nil (Previous YearRs. Nil) 11 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. 12 Disclosure under Accounting Standard -18 on "Related Party Disclosure": 12.1 Key Management Personnel: Whole-time Functional Directors: i) Shri Sudhir Vasudeva, Chairman and Managing Director ii) Shri K.S. Jamestin iii) Shri A. K. Banerjeefrom22.05.2012 iv) Shri P. K. Borthakurfrom 30.10.2012 v) Shri Shashi Shankerfrom 01.12.2012 vi) ShriN.K.VermafromOI.04.2013 vii) ShriS.V. Raoupto31.03.2013 viii) ShriU. N. Boseupto30.11.2012 ix) Shri A. K. Hazarikaupto30.09.2012 13 Disclosure under Accounting Standard -19 on ''Leases'' 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.914.03 million (Previous year Rs.799.74 million) had been paid towards cancellable Operating Lease. 14 Disclosure under Accounting Standard - 27 on Financial Reporting of Interest in Joint Ventures: 14.1.1 In respect of 16 NELP blocks (previous year 16) which have expired as on 31 st March, 2013, the Company''s share of Unfinished Minimum Work Programme (MWP) amounting to Rs. 19,560.95 million (previous year to Rs.23,949.27 million) has not been provided for since the company has already applied for further extension of period in these blocks as ''excusable delay''/ 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 Rs. 19,560.95 million (previous yearRs. 23,949.27 million) is included in MWP commitment under note no. 43.2.1. 14.1.2 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 toRs. 293.30 million (Previous yearRs. 870.42 million) and cost of unfinished MWP Rs.217.14 million (Previous yearRs. 146.57 million) paid/payable to the Gol is included in survey and wells written off expenditure. 15 Disclosure under Accounting Standard - 28 on "Impairment of Assets" 15.1 The Company is engaged mainly in the business of oil and gas exploration and production where each cost centre used for depreciation (depletion) purposes is identified as independent Cash Generating Unit (CGU) for assessing the impairment in Producing Properties and fixed assets etc. on the basis of ''value in use''. The Company has tested all its CGUs for impairment as on 31.03.2013 by applying discount rates of 20.10% (previous year 20.40%) for Rupee transactions and 14.00% (previous year 13.67 %) for crude oil and value added products revenue measured in USD as on 31.03.2013. 15.2 During the yearRs. 3,014.50 million (Previous YearRs. 932.83 million) is provided as impairment loss. Out of this an amount of Rs. 2,363.50 million (Previous Year nil) has been provided in respect of Eastern Offshore Asset, Rajahmundry.Rs. 45.36 million (Previous YearRs. 83.30 million) has been provided as additional impairment in respect of onshore CGUs - Jodhpur and Silchar and for offshore CGU- Ratna,Rs. 31.02 million (Previous YearRs. 75.83 million) and D18Rs. 6.98 million (Previous Year nil) has been provided on account of increase in the estimate of abandonment liability. In addition,Rs. 23.40 million (Previous YearRs. 154.99 million) pertaining to block CY-OS-90/1 (PY-3) has been provided as presently the field does not have any potential to produce. An amount ofRs. 453.11 million (Previous YearRs. 540.14 million) mainly represents additional impairment charge in respect of certain onshore Pre-NELP Joint Ventures (RJ ON 6 and CB ON 2) due to adjustment of cost recovery from revenue and sharing of 100% royalty. Balance amount ofRs. 91.12 million has been provided in Rajahmundry onshore CGU for CWIP Further,Rs. 756.47 million (Previous YearRs. 827.73 million) has been reversed as impairment loss for Onshore CGU - Silchar and Jodhpur during the year. 16 Other Disclosures under Schedule VI to the Companies Act, 1956: 16.1 Capital Commitments: Estimated amount of contracts remaining to be executed on capital account: - i) In respect of Company-Rs.87,601.57 million (Previous yearRs. 114,069.33 million). ii) In respect of Joint Ventures - Rs.5,611.71 million (Previous yearRs.3,561.76 million). 16.2 Other Commitments 16.2.1 Estimated amount of Minimum Work Programme (MWP) committed under various ''Production Sharing Contracts'' with Government of India/ Nominated Blocks: i) In respect of Nominated Blocks Rs.958.54 million (Previous year Rs.282.68 million). ii) In respect of NELP blocks in which the Company has 100% participating interest -Rs. 12,305.38 million (Previous year Rs.15,052.01 million). iii) In respect of NELP blocks in Joint Ventures, company''s share- Rs.62,127.36 million (PreviousyearRs. 71,183.60 million). 16.2.2 The Board of directors has approved loan uptoRs. 50,000.00 million (Previous yearRs. 50,000.00 million) to Mangalore Refinery & Petrochemicals Limited (MRPL), a subsidiary of the Company. Out of whichRs. 33,000.00 million (previousyearRs. 26,000.00 million) has been disbursed and Rs. 17,000.00 million (previous year Rs.24,000.00 million) can be availed by MRPL on or before 30th September, 2013. 16.2.3 The Company has given an undertaking to Power Finance Corporation Limited (PFC), for an additional funding up toRs. 2,223.80 million (previousyearRs. 2,234.00 million) in respectof ONGC Tripura Power Co. Limited (OTPC) for cost overrun, if any. 16.3.1 The above claims I demands are at various stages of appeal. In the opinion of the management, these claims I demands are not tenable. 16.3.2 This includes an amount ofRs. 16,240.00 million towards infusion of one time grant to Post Retirement Benefit Scheme for conversion of defined benefitscheme to defined contribution scheme, pending approval from MoP&NG. 16.4 Corporate Guarantees executed by the Company on behalf of its wholly owned subsidiary, ONGC Videsh Limited (OVL) and ONGC Nile GangaBV (wholly owned subsidiary of OVL): 16.4.1 Guarantees executed forfinancial obligations: i) Amount of GuaranteeRs. 91,285.50 million (Previous yearRs. 42,372.48 million) ii) Amount outstandingRs. 73,774.85 million (Previous yearRs. 30,845.81 million) 16.4.2 Performance Guarantees executed underthe contracts: Guarantee in respect of Sakhalin Project in favour of Exxonneftgas Ltd., M/s. Roseneft-S, SMNG-S and RN-Astra towards performance of OVL''s obligation under Joint Operating Agreementwithout any financial ceiling. 16.4.3 Corporate Guarantees executed by the Company on behalf of its subsidiary, MRPL: i) Amount of Guarantee Rs. 12,237.75 million (Previous yearRs. 8,179.20 million) ii) Amount outstandingRs. 11,262.75 million (Previous yearRs. 4,071.20 million) 17 Disclosure on Foreign currency exposures at year end that have not been hedged by derivative instrument or otherwise: The Company has receivables and payables in foreign currency as at the balance sheet date. These foreign currency exposures are not hedged by any derivative instruments or otherwise. 18 The Company has a system of physical verification of Inventory, FixedAssets and Capital Stores in a phased manner to coverall items over a period of three years. Adjustment of differences, if any, is carried out on completion of reconciliation. 19 Some balances of Trade/Other Receivables, Trade/Other Payables and Loans & 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. 20 Previous year''s figures have been regrouped/ reclassified, wherever necessary, to confirm to current year''s classification. 21 Figures in parenthesis as given in these Notes to Financial Statement relate to previous year. Mar 31, 2012 1. Corporate Information Oil and Natural Gas Corporation Limited ('ONGC' or 'the Company') is a public limited company domiciled in India and incorporated under the provisions of Companies Act, 1956. Its Shares are listed and traded on Stock exchanges in India. The Company is engaged in exploration, development and production of Crude oil and natural gas. Notes 1.1 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 company declares and pays dividends in Indian rupees. 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. 1.2 Pursuant to the approval of the members dated 28.01.2011, during the financial year 2010-11, one Equity share having face value of Rs.10/- each had been sub-divided into two Equity Shares of Rs.5/- each and bonus shares in proportion of one new Equity bonus Share of Rs.5/- each held on 09.02.2011 (record date) had been allotted. Company has issued total 4,277.75 million (Previous Year 4,277.75 million) Equity shares of face value of Rs. 5 each issued as fully paid up by way of bonus shares during the period of five years immediately preceding the reporting date. 2.1 Represents assessed value of assets received as gift. 2.2 The Board of Directors has recommended a final dividend of Rs.2.00 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. 7.75 (Rs. 6.25 and Rs. 1.50) per share paid in two phases. 3.1 No amount is due for payment to investor education and protection fund. 4.1 Plant & Machinery includes an amount of Rs. 8,159.95 million (Previous Year Rs. 7,841.69 million) in respect of Capital Works in Progress (CWIP) for C2-C3 plant which is mechanically complete and will be capitalized on completion of test run which is pending due to non receipt of approval for allocation of gas from Ministry of Petroleum and Natural Gas (MoP & NG) for swap arrangement through GAIL. 5.1 During the financial year 2004-05, the company had acquired 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 capitalized under Exploratory Wells in Progress. Initial-in-Place- Reserves have been established in this block and a conceptual development plan as part of the proposal for Declaration of Commerciality had been submitted on 21.12.2009 for Southern Discovery Area and on 15.07.2010 for Northern Discovery Area to Management Committee (MC) for review. There is no significant change in the status of this block during the current year. Pending final decision on the DOC by the MC, as a matter of abundant caution, the Company has made a provision of Rs. 9,412.09 million (including provisions created in earlier years Rs. 9,401.34) towards exploratory wells which are more than two years old from the date of completion of drilling. 5.2 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 Rs. 870.42 million (previous Year Rs. 113.72 million) and cost of unfinished MWP Rs. 146.57 million (Previous Year Rs. 919.81 million) paid / payable to the Gol is included in survey and wells written off expenditure. 6.1 GBP one each, total value Rs. 6,885/- 6.2 Since the Bond is maturing in September 2012, the same has been shown under Current Investment. 7.1 Loans and advances to employees include an amount of Rs.0.11 million (Previous Year Rs. 0.15 million) outstanding from whole time directors. 7.2 In Ravva Joint Venture, the demand towards additional profit petroleum raised by the Government of India (Gol), due to differences in interpretation of the provisions of the production sharing contract 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 favour of operator, was disputed by the operator M/s Cairn Energy India Pvt. Ltd. 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 earler years and the amount of provision outstanding as on 31st March, 2012 is Rs. 8,580.22 million (equivalent to USD 167.84 million) after adjustments for interst and exchange rate fluctuations. The Gol had recovered the above amount [including interest there on USD 54.88 million (Rs. 2,829.86 million)] from the company in earlier years which has been carried as recoverable under Long Term Loans and advances in the Balance Sheet as at 31st March, 2012. In subsequent legal proceedings, The Appellate Authority of the Honourable Malaysian High Court of Kualal 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. During the year, 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 favourable 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 carried under Ravva PSC is decided in its entirety by the Government along with other partners. In view of the perceived uncertainites 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 ended 31st March, 2012. 7.3 The Finance (No.2) Act, 2009, has specified the definition of "undertaking" for the purpose of claiming tax holiday under section 80-IB(9) of Income Tax Act, 1961 to be 'all blocks licensed under a single contract' retrospectively whereas the company had earlier considered each "Well" as an undertaking. Since the Amendment still requires clairty on various issues and also considering the advice of legal experts, the company continued to make provision for tax withour considering the benefit under section 80-IB(9). 8. Deposit under Site Restoration Fund Scheme: A sum of Rs. 91,825.72 million till 31.03.2012 (previous year Rs. 81,155.06 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 cash equivalents'. 9.1 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. Fixed deposits of Rs. 52,380.00 million (previous year Nil) have been pledged to Banks against short term loan taken from Banks. 9.2 Amount deposited in unclaimed divided account is earmarked for payment of dividend and cannot be used for any other purpose. 10.1 Loans and advances to employees include an amount of Rs. 0.24 million (previous Year Rs. 0.11 million) outstanding from whole time directors. 10.2 During the financial year 2010-11, the Oil Marketing Companies, nominees of the Gol recovered USD 32.07 million (Rs. 1,639.55 million), ONGC's share as per directives of the Gol in respect of Jointly Controlled Assets-Panna Mukta & 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 ("Claimants") have served a notice of arbitration on the Gol in respect of dispute, differences and claims arisen in connection with the term of panna, Mukla and Tapti PSC's. Since the company is not a party to the arbitration proceedings, it had request 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&BGEPIL under Panna, Mukta & 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 the Gol under 'Advance Recoverable in Cash or in Kind'. 11.1 New Crude Oil Sales Agreements (COSAs), with Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL), have been signed on 5th January, 2012 and 12th April, 2012 respectively. Since, the new COSA is made effective from 1st April, 2010, necessary adjustments amounting to Rs. 173.40 million considering revised crude prices for supplies made to BPCL and HPCL Refineries w.e.f 1st April, 2010 have been made in the accounts of 2011-12. 11.2 Sales revenue in respect of Crude Oil supplied to other refineries (other than BPCL and HPCL) is eased on (he pricing formula agreed with the refineries in items of eratwhile MoU. For crude oil produced in Assam, sales revenue is based on the pricing formula provided by MoP&NG. COSA with Indian Oil Corporation limited (IOCL) is under finalizalion stage, with proposed effective dates of 11,April. 2010. As IOC is making the payment as per initialed COSA, firs their provision amount n g to Rs. 2,010.70 million (Previous Year Rs. 1,075.10 million) has been made during the year Provision made till 31st March, 2012 is Rs.3.065.BD million (Previous Year Rs. 1,075.10 million). 11.3 Sales revenue of Natural Gas is based on producer price feed by the Col vide letter dated 31.05.2010 in re sped of ARM gas produced by National Oil Companies (NOCs) at USS 4.2/mm Mu inclusive of royally effective from 01.06.2010. For APM consumer, except for consumers in North Eastern states, the consumer price is same as producer price, i.e. US$ 4,21 mm be the Inside of royalty, For APM consumers in North-East, consumer price is 60% of the producer price, i ,e,, US$ 2,521 mmbtu inclusive of royalty and the difference between producer price and consumer price is paid lo the company through UneGol Budget and shown as'North-East Gas Subsidy'. 11.4 The company Is supplying majority of Natural gas to GAIL (India) Limited which also purchases gas from other sources and sells to APM and non-APM consumers. Based on the Government directives, excess in Gas Pool Account at the end of financial year is transferred to ONGC/Oil India Limited (OIL) In accordance with their contribution. Based on the details received from GAIL, an amount off 1,946.33 million (Previous Year Rs. 21,914.90 million) has been considered as 'Surplus from Gas Pool Account. 11.5 In terms of the decision of Government of India (Gol), the company has stared under-recoveries of Oil Marketing Companies (OMCs) on price sensitive products viz Diesel, Domestic LPG and PDS Kerosene for the year 2011-12 by extending the discount in the prices of Crude Oil, Domestic LPG and POS Kerosene based on the rates of discount communicated by Petroleum Planning and Analysis Cell (PPAC). Ministry of Petroleum and Natural Gas (MoP&NG). The impact of discount is as under: 12.1 Excise duty on sale of product has been deducted from Sales revenue and Excise duty shown above represents the difference between excise duty on opening and dosing stock of finished goods. 13. Disclosure under the Revised Accounting Standard -16 on "Employee Benefits" 14.1 Brief Description: A general description of It type Of Defined Benefit Plans is as follows: 15.1 A Earned Leave (EL) Benefit:- Accrual - 30 day s 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 300days 16.1.2 Good Health Reward (Half pay leave) Accrual - 20 days per year Encashment white in service - Nil Encashment in retirement - 50% of Half Pay Leave balance. 16.1.3 Gratuity:- 15 days salary for every completed year of service. Vesting period is 5 years and Die payment is resented toRs.1.DO million. 16.1.4 Post Retirement Medical Benefits:- Upon payment of one time prescribed contribution by the employees, lull medical benefits on superannuation and on voluntary retirement subject to the completion of minimum 20 yea re of service and 5G years of age. 16.1.5 terminal Benefits:- At the time of superannuation, employees are entitled to settle at a place of their choice and they am eligible for Transfer Travelling Allowance, Employees are gifted a sliver plaque also, depending upon their level. The discount rate is based upon the market yield available on Government bonds at the Accounting dale with a term that matches. The salary growth rate takes account of inflation, seniority, promotional other relevant factor on long term basis. Expected rate of return on plan assets is based on market expectations, at the beginning of the year, for return over the entire life of the related obligation. 17. Disclosure under Accounting Standard-16 on "Borrowing Costs" The Company did not incur arty borrowing cost for any qtialifying asset, No borrowing cost is capitalized during the year (previous year Nil), 18. Disclosure under Accounting Standard -17 on " Segment Reporting"' The segment information is presented under the Notes to the Consolidated financial Statement as required under the standard. 19. Disclosure under Accounting Standard-18 on "Related Party Disclosure" 19.2 Key Management Personnel: Whole-time Functional Directs i) Shri Sudhir Vasudeva, Chairman and Managing Director from 03.10.2011 ii) Shri A. K. Hazarika, holding additional Charge of Chairman and Managing Director up to 03.10.3011 iii) ShriU.N. Bose iv) Shri D K.Sarrf up to 15.09.2011 v) Shri S V Rao vi) Shri K.S. Jamestin from 25.05.2D11 20. Disclosure under Accounting Standard -19 on "Leases" 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. 799.74 million (Previous year Rs.749.63 million) had been paid towards cancellable Operating Lease. 21. Disclosure under Accounting Standard - 27 on Financial Reporting of Interest in Joint Ventures; 21.1. Jointly Controlled Assets In respect of certain blocks., the Company's Joint Ventures (JV) with certain corporate bodies have entered into Production Sharing Contacts (PSCs) with the Gol, Details of these blocks and JVs as on 31.03-2012 are as under: 21.2.1 The financial statement of 128 (Previous Year 128) out of 139 (Previous Year 135) JV&NELP as per note no. 41.3 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 contact and the same has been adjusted for changes as per Note No. 2.1.1. 21.2.2 In respect of balance 11 (Previous Year 7) JVs/NELP assets, liabilities, income and expenditure amounting to Rs. 1,026.31 Million (Previous year Rs.47.51 Million), Rs.1,933.61 million (Previous Year Rs. 782.66 million), Rs. 370,31 million (Previous Year Rs. 55.28 million) and Rs.2,053.41 million (Previous Year Rs. 943.31 million) respectively have been incorporated on the basis of uncertified statements prepared under the production sharing controls and the same has been adjusted for changes as per Note No. 2.1.1. 21.2.3 The company has acquired 10% Participating interest (PI) of Caim Energy India Limited (CEIL) in the Block KG DWN 98/2 on actual past cost basis. Accordingly a Heads of Agreement (HOA) was signed between ONGC & CEIL on 11.1.2012 for a provisional sum of Rs. 2,387.82 Million (USD 46.71 Million) as consideration. The effective date of transfer of PI shall be the date of Government approval, which is pending. Hence, no adjustment is made in the accounts towards the same. 21.2.4 The company has acquired the Participating Interest (PI) of British Gas Exploration & Production India Ltd (BGEPIL) In the following blocks, effective from the following dates as approved by the board of directors. British Gas has agreed to pay a lump sum amount of USD 50 Million, towards full and final settlement of carry costs/cash calls due in all the above blocks, subject to government approval, which is pending. Hence, no adjustment for this sum is made in the accounts towards the lump sum amount due as above. 22 Disclosure under Accounting Standard -28 on ''Impairment of Assets" 22.1 The Company is engaged mainly in the business of oil and gas exploration and production where each cost centre used for depreciation (depletion) purposes is identified as independent Cash Generating Unit (CGU) for assessing the impairment in Producing Properties and fixed assets etc. on the basis of 'value in use'. The Company has rested all its CGUs for Impairment as on 31.03.2012 by applying discount rates of 20.40% (Previous Year 17.16 for Rupee transactions and Rs.13.67 % (Previous Year 12.80 %) for crude oil and value added product's revenue measured in USD as on 31.03.2012. 22.2 During the year Rs.932.83 million (Previous Year Rs.1534,73 million) is provided as impairment loss. Out of this Rs.83.30 million (Previous Year Rs.600.07 million) has been provided as additional impertinent in respect of onshore CGUs - Jodhpur and Silchar for offshore CGU- Ratna, Rs. 76.93 million (Previous Year nil) has been provided on account of increase in the estimate of abandonment liability. In addition, Rs. 154.99 million (Previous Year nil) pertaining to block CY-OS-90/1 (PY-3) has been provided as presently the field has potential only to produce for next two years and an amount of Rs. 76.57 million (Previous Year nil) has been provided in respect of Tatipaka mini Refinery, Rajahmundry. Balance amount of Rs. 540.14 million (Previous Year Rs. 934.66 million) mainly represents additional impairment charge in respect of certain onshore NELP blocks due to adjustment of cost recovery from revenue and sharing of 100% royalty. Further, Rs. 827.73 million (Previous Year Rs. 192.53 million) has been reversed as impairment loss during the year. Out of this, an amount of Rs.791.25 million (Previous Year nil) has been reversed for offshore- Krishna Godavari CGU, Rajahmundry due to better economic performance of the asset based on the future production profile. Balance amount reversed is attributable to Jodhpur and Silchar onshore due to transfer of assets to another CGU and change in estimation of abandonment liability in respect of offshore. 23 Other Disclosures under Schedule VI to the Companies Act, 1956: 23.1 Capital Commitments: Estimated amount of contacts regaining to be executed on capital account;- i) In respect of Company- Rs. 114,069.33 million (Previous Year Rs.164,076.06 million). ii) In respect of Joint Ventures- Rs. 3.581.76 million (Previous Year Rs. 145.45 million). 23.2 Other Commitments 44.2.1 Estimated amount of Minimum Work Programme (MWP) committed under various 'Production Sharing Contracts' with Government of India/ Nominated Blocks: i) In respect or NELP blocks in which the Company has 100% participating interest - Rs. 15,052.01 million (Previous Year S2.5S&W million). ii) In respect to Nominated Stocks million (Previous Yea rRs.374.D4 million). iii) In respect or NELP blocks in Joint Ventures - Rs. 71,103,60 million {Previous YearRs. 92,560.05 million). 23.2.2 Board has approved the loan up to Rs. 50,000,00 million (Previous Year Nil) lo MRPL, a subsidiary of the Company, Out of whichRs. 26,000.00 million has been disbursed and Rs. 24,000.00 million ca n be availed by MRPL up to 31st December, 2012. 23.2.3 The Company has given an undertaking to Power Finance Corporation (PFC), for an additional funding up to Rs.2,234.00 million (Previous Year Rs.2.234.00 million) m respect of ONGC Tripura Power Co. Limited (OTPC) For cost overrun, if any. The above claims I demands are at various stages of appeal and in the opinion of the Company, the same are not tenable. 23.4 Corporate Guarantees executed by the Company on behalf of its wholly owned subsidiary, ONGC Videsh United (OVLJ and ONGC Nile Ganga BV (wholly owned subsidiary of OVL): 23.4.1 Guarantees executed for financial obligations: i) Amount of GuaranteeRs. 42,372.45 million (Previous year Rs.38,371.66 million). ii) Amount Outstanding Rs. 30.845.81 million (Previous yearRs. 33,934.69 million). 23.4.2 Performance Guarantees executed under the contracts: Guarantee in respect of Sakhalin Project in favour of Exxonnafigas Lid., M/s, Rosenefit-S, SMNG-S and RN-Astra towards performance of Company's obligation under Joint Operating Agreement without any financial ceiling. 23.5 Corporate Guarantees, executed by the Company on behalf of its subsidiary, HRPL: i) Amount of Guarantee T 8,179.20 million (Previous year Rs.7,155.20 million}. ii) Amount Outstanding Rs.4,071,20 million (Previous year Rs. 3,443.93 million), 23.6 Uncalled liability On parity paid shares is Rs.1,337.19 million (Previous Year Rs. 1,337.19 million) against Which advance paid Rs.1,233.87 million (Previous Year Rs. 1,233.87 million]. Notes; 1. Production includes internal consumption and intermediary losses. 2. Production of 1,013 MT (Previous year 203,799 MT) Crude Oil and 15,175 TM1 (Previous year 17,059 TM1) of Natural Gas is induced which is the difference between participating interest and entitlement interest in respect of CB-ON/3, CB-QN/2 and RJ-0N/6JVs. 3. Crude oil production includes condensate of 1.952 MMT (Previous Year 2.042 MMT). Notes: 1. Loan to QVL is repayable within a notice period of minimum one year and carries no interest during the year 2010-11 and 2011-12. 2. Loan to MRPL comprises two loans: First loan carries interest @ 7% per annum and is repayable at quarterly intervals. Second loan carries interest @ SBI Prime Lending Rate (SBAR) with a spread of minus 385 basis points. Repayment of the loan will start in 2& equal installments starting from 31.03.3014. QNGC can call these loans on notice of 90 days, MRPL can also prepay whole or part of the loan to ON GC 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. 24. Pursuant to the finalization of the agreement between ONGC, Claims Energy Pic, Vedanta Resources Pic and their associates during the year, the royalty paid by ONGC in respect of RJ-QN-9Q/1 Block has been treated as contact cost eligible for cost recovery. As a result, an income of Rs.31,405 47 million received from M-s Claim India Ltd. towards Royalty paid for the period August 200$ to September 2011 has been disclosed as an exceptional item. 25. 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 differences, if any. is earned out on completion of reconciliation. 26. Some balances of Trade/Other Receivables, Trade/Other Payables and Loans A 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. 27. Previous year's figures have been regrouped/ reclassified, as required under Revised Schedule-Vi to the Companies Act, 1956 wherever necessary, to confirm to current year's classification. 28. figures in parenthesis as given in these Notes to Financial Statement relate to previous year. Mar 31, 2010 1. In terms of the decision of Government of India (Gol), the Company has shared under-recoveries of Oil Marketing Companies (OMCs) for the year 2009-10 by allowing discount in the prices of Crude Oil, PDS Kerosene and domestic LPG based on provisional rates of discount communicated by Petroleum Planning and Analysis Cell, Ministry of Petroleum & Natural Gas (MoP&NG). The Company does not foresee any material impact on finalization of discount rates. 2.1 Sales revenue in respect of Crude Oil is based on the pricing formula agreed with the customers for the period from 01.04.2002 to 31.03.2004. Pending finalization of fresh Memorandum of Understanding (MOU)/Crude Oil Sale Agreement (COSA) with the customers, the same pricing formula has been provisionally adopted from 01.04.2004 onwards. However, for Crude Oil produced in Assam, benchmark price revised by MoP&NG w.e.f. 01.04.2008 has been adopted. 2.2 Sales revenue in respect of Natural Gas under Administered Price Mechanism (APM) is based on the gas prices fixed on provisional basis as per directives dated 20.06.2005 and 05.06.2006 of the Gol, MoP&NG. 2.3 Adjustments, if any, on account of Para 2.1 and 2.2 above shall be carried out on finalization of agreements/ receipt of government directives. However, the Company does not foresee any material impact on current years results. 3. MoP&NG vide letters dated 15.03.10 and 09.04.10 have directed GAIL (India) Limited (GAIL) that difference between consumer price and producer price revised vide MoP&NG letter dated 5th June, 2006 for APM gas being supplied to City Gas Distribution Projects and small consumers having allocations up to 0.05 MMSCMD should be transferred by GAIL from surplus in Gas Pool Account to the producers. Accordingly, an amount ofRs. 4,415.79 million on account of above for the period from 06.06.06 to 31.03.10 has been recognised during the current year. 4. The MOU for trading in products of Mangalore Refinery and Petrochemicals Limited (MRPL), a subsidiary of the Company, expired on 31st March, 2009, and accordingly no trading activity of their products was carried out during the year. Sales revenue and Purchases on account of trading of such products in the previous year was Rs. 85,098.15 million and Rs. 85,073.62 million respectively. 5.1 During the year, the Company has changed its accounting policy on abandonment cost and started providing the full eventual estimated liability towards costs relating to dismantling, abandoning and restoring of onshore well sites. Such cost of onshore well site has been capitalized to Producing Property/Development Wells in Progress /Exploratory Wells in Progress when completed and in case of dry wells it is charged to Profit & Loss account. This has resulted in increase in Producing Property by Rs. 8,353.36 million, Exploratory Wells in Progress by Rs. 166.64 million and Development Wells in Progress by Rs. 102.57 million with corresponding increase in abandonment liability by Rs. 8,622.57 million. This has also resulted in increase in Depletion cost by Rs. 403.72 million and cost of dry wells by Rs. 88.50 million with corresponding decrease in profit before tax by Rs. 492.22 million. 5.2 Further, in case of offshore wells, upto the previous year the Company was providing full eventual estimated liability towards costs relating to dismantling, abandoning and restoring of offshore wells/facilities that were forming part of producing properties. However, during the current year, the Company started providing such liability in respect of wells completed and facilities capitalized also whether they are transferred to Producing Property or not. This has resulted in increase in Development Wells in Progress by Rs. 305.52 million and corresponding increase in abandonment liability by a similar amount. This has no impact on profit before tax. 6. During the year, the Company changed its accounting policy of amortising intangible assets from Written Down Value Method @ 40% to Straight Line Method over the useful life not exceeding a period of 5 years in order to systematically amortize its intangible assets. This has resulted in decrease in Depreciation, Depletion, Amortisation and Impairment by Rs. 424.55 million, consequently activity cost decreased by Rs. 3.22 million and Profit before tax increased by Rs. 421.33 million. 7. In Ravva Joint Venture, the demand towards additional profit petroleum raised by Gol, based on the decision of the Malaysian High Court, was disputed by the Operator M/s. Cairn Energy India Limited, due to difference in interpretation of provision of Production Sharing Contract (PSC) in respect of computation of Post Tax Rate of Return (PTRR). The Company is not a party to the dispute but agreed to abide by the decision applicable to the Operator. As the dispute between the Operator and Gol was not resolved, the Company made a provision in Financial Year 2008-09 amounting to Rs. 5,771.14 million (USD 113.82 million) on account of additional profit petroleum and Rs. 2,829.86 million (USD 54.88 million) towards interest thereon totaling to Rs. 8,601.00 million (USD 168.70 million) as an abundant precaution. Gol has recovered such amount subsequently. The appellate authority of Honorable Malaysian High Court of Kuala Lumpur, Malaysia has set aside the decision of the Malaysian High Court and the decision of arbitral tribunal in favour of Operator was restored on 15th September 2009, Gol has filed an appeal in the Federal Court of Malaysia against such restoration. An additional interest of Rs. 65.41 million (USD 1.45 million) has been provided during the year. Pending final outcome of this appeal, the provision is retained at Rs. 7,679.21 million (USD 170.15 million) net of reversal of Rs. 987.20 million towards exchange gain during the year. 8. The Company acquired 90% Participating Interest in Exploration Block KG-DWN-98/2 from M/s Cairn Energy India Ltd. in 2004-05 for a lump sum consideration ofRs. 3,711.22 million which was capitalized under Exploratory Wells in Progress as per Accounting Policy No. 6.3. Subsequent exploratory drilling costs of wells in this block were capitalized as Exploratory Wells in Progress. Initial-in-Place-Reserves have been established in this block and a conceptual development plan is also under preparation. This being deep water block, needs more time for completion of appraisal programme. However, the Company as an abundant precaution made a provision ofRs. 6,104.80 million and Rs. 2,360.39 million in respect of above costs in 2007-08 and 2008-09 respectively. Since there is no significant change in status of this block during the current year, the expenditure amounting to Rs. 918.48 million on the wells completed upto 31 st March 2008, being more than two years old is provided for in the current year. 9. As perthe 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 Rs. (-)78.41 million net of reversal (Previous year Rs. 563.28 million) and cost of unfinished MWP Rs. 3,148.58 million (Previous year Rs. 1,439.51 million) paid/payable to the Gol is included in survey and wells written off expenditure in Schedule 21. 10. In respect of 16 (Previous year 16) Deepwater NELP Blocks, companys share in LD and MWP amounting to Rs. 12,037.37 million (Previous year Rs. 6,229.03 million) and Rs. 33,024.85 million (Previous year Rs. 13,075.42 million) respectively has not been provided for, since the rig moratorium proposal is under consideration of Gol as per the letter dated 18.08.2008 from Director General of Hydrocarbons (DGH). Out of the above, MWP amounting to Rs. 1,770.62 million (Previous year Nil) has already been completed during the year and balance amounting to Rs. 31,254.23 million (Previous yearRs. 13,075.42 million) is included in Capital Commitment (Note No 27.1.2). 11. The Finance (No. 2) Act, 2009 has specified the definition of "undertaking" for the purpose of claiming tax holiday under section 80-IB(9) of Income Tax Act, 1961 to be all blocks licensed under a single contract retrospectively whereas the company had earlier considered each well as an "undertaking".Since the amendment still requires clarity on various issues and also considering the advice of legal experts, the company continued to make provision for tax without considering the benefit u/s80-IB(9). 12. The Jharia CBM Block was awarded by Gol to ONGC-CIL consortium on nomination basis for exploration and exploitation of Coal Bed Methane (CBM) gas. Ministry of Coal (MoC) later awarded a coal mining block to the private company which overlapped with a part of the Companys CBM Block. It was decided by the MoC and MoP&NG that such area of exploratory wells drilled by the Company are excluded from the mining area to the private company. These well sites are permanently acquired by the Company and the titles are in the name of the Company. Pending resolution and receipt of equitable land for future exploration activities in consideration of the overlapped area, amounting toRs. 1.54 million incurred on exploratory wells is shown under Exploratory Wells in Progress. 13. In case of Jointly Controlled Assets - Panna Mukta & Tapti (ONGC Share - 40%), where Blocks auditors have opined regarding non ascertainment and adjustment of certain observations raised by auditors appointed by Director General Hydrocarbon (DGH) under Production Sharing Contract for the period 1994 to 2007 in respect of cost and profit petroleum share. Pending resolution of such issues, no adjustment has been made in the accounts of the operator. The amount of liability arising out of such observations has not been quantified and impact of the same on Companys accounts is unascertainable. 14. Pending finalization, the Company provided liability for pay revision in respect of unionized category of employees amounting to Rs. 1,910.00 million during the year (till 31.03.2010 Rs. 4,100.00 million) and is allocated to activities as per the policy of the company. 15. The Company changed the rate of depreciation on all Trunk Pipelines and Onshore Flow Lines (assets below ground) from 27.82% to 100% based on technical assessment by the management during 2005-06. The Company made a reference to the Ministry of Corporate Affairs (MCA) during 2006-07 for confirmation of the rate of depreciation. Pending confirmation by the MCA, Company continues to charge depreciation at 100% on such assets. 16. The Company has a system of physical verification of Inventory, Fixed Assets and Capital Stores in a phased manner at regular intervals. Adjustment of differences, if any, will be accounted for after examination of these differences. 17. Some balances of Debtors, Creditors and Loans & Advances are subject to confirmation/ reconciliation. Adjustments, if any, will be accounted for on receipt/confirmation of the same after examination. 18. Disclosure under the Revised Accounting Standard -15 on "Employee Benefits" 19.1 Brief Description: Ageneral description of the type of Defined Benefit Plans is as follows: 19.1.1 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 calendaryear Encashment on retirement - maximum 300 days 19.1.2 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. 19.1.3 Gratuity 15 days salary for every completed year of service. Vesting period is 5 years and the payment is restricted to Rs. 1.00 million. 19.1.4 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. 19.1.5 Terminal Benefits At the time of superannuation, employees are entitled to settle at a place of their choice and they are eligible for Transfer Traveling Allowance. Employees are gifted a silver plaque also, depending upon their level. 20. Disclosure under Accounting Standard -16 on "Borrowing Costs" The Company did not incur any borrowing cost for any qualifying asset. No borrowing cost is capitalised during the year (previous year Nil). 21. Disclosure under Accounting Standard -17 on "Segment Reporting" The segment information is presented under the notes to accounts of the Consolidated Financial Statements as required under the standard. 22. Disclosure under Accounting Standard -18 on "Related Party Disclosure" 22.1 Name of related parties and description of relationship: 22.1.1 Joint Ventures/Jointly Controlled Entities Sl. No Name Relationship i) Ravva Joint Venture ii) CY-OS-90/1(PY3) Joint Venture iii) Panna.Mukta&Tapti Joint Venture iv) CB-OS-1 Joint Venture v) CB-OS-2 Joint Venture vi) GK-OSJ-3 Joint Venture vii) RJ-ON-90/1 Joint Venture viii) RJ-ONN-2003/1 JointVenture ix) KK-DWN-2004/1 JointVenture x) ONGCMangalore Petrochemicals Limited Joint Controlled Entity xi) Petronet LNG Limited Joint Controlled Entity xii) ONGC Teri Biotech Limited Joint Controlled Entity xiii) Mangalore SEZ Limited Joint Controlled Entity xiv) ONGC Petro Additions Limited Joint Controlled Entity xv) ONGC Tripura Power Co. Limited Joint Controlled Entity xvi)Dahej SEZ Limited Joint Controlled Entity 22.1.2 Key Management Personnel: Whole-time Functional Directors: i) Shri R.S. Sharma, Chairman and Managing Director ii) Dr.A.K.Balyan iii) ShriA.K. Hazarika iv) Shri U. N. Bose v) Shri D.K. Pande vi) Shri D.K.Sarraf vii) Shri SudhirVasudeva . 23.1.1 The financial statements of 117 (Previous year 93) out of 124 (Previous year 112) JVs/NELP as per para no. 24.3 have been incorporated in the accounts to the extent of Companys 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 the same has been adjusted for changes as per accounting policy No. 9.1 in Schedule-26. 23.1.2 In respect of balance 7 (Previous year 19) JVs/NELP assets, liabilities, income and expenditure amounting to Rs. 69.80 million (Previous yearRs. 32.93 million), Rs. 143.98 million (Previous yearRs. 921.25 million), Rs. 152.55 million (Previous yearRs. 0.06 million) and Rs. 812.85 million (Previous year Rs. 478.69 million) respectively have been incorporated on the basis of uncertified statements prepared under the production sharing contracts and the same has been adjusted for changes as per accounting policy No. 9.1 in Schedule-26. 24. In respect of Farm Out agreements, where necessary approval from Central Government has been obtained during the year, a sum ofRs. 1,196.19 million (Previous year Rs. 4,979.55 million) has been considered recoverable from the farmers towards the share of expenditure incurred from the effective date of the farm out agreement and has been credited to Miscellaneous Receipts amounting to Rs. 1,049.66 million (Previous year Rs. 4,976.82 million) in respect of earlier years and the balance current year expenditure has been credited to respective natural heads. 24.1. The Company has given an undertaking to Power Finance Corporation (PFC), for an additional funding up to Rs. 2,234.00 million in respect of ONGCTripura Power Co. Limited (OTPC)for cost overrun, if any. 25 Disclosure under Accounting Standard - 28 on "Impairment of Assets" 25.1 The Company is engaged mainly in the business of oil and gas exploration and production where each cost centre used for depreciation (depletion) purposes is identified as independent Cash Generating Unit (CGU) for assessing the impairment in Producing Properties and fixed assets etc. on the basis ofvalue in use. The Company has tested all its CGUs for impairment as on 31.03.2010 by applying discount rates of 17.31% (Previous year 16.61 %) for Rupee transactions and 13.07 % (Previous year 13.40 %) for crude oil and value added products revenue measured in USD as on 31.03.2010. 25.2 During the year X 553.45 million (Previous year Rs. 1,240.59 million) was provided as an additional impairment loss in respect of certain CGUs. Further, impairment loss to the extent of Rs. 986.17 million (Previous year Rs. 4,350.91 million) has been reversed in respect of DVP Jorhat and Ratna CGUs due to increased sale price and accretion in reserves. 26 Disclosures under Schedule VI to the Companies Act, 1956: 26.1 Capital Commitment not provided for: 26.1.1 Estimated amount of contracts remaining to be executed on capital account:- i) In respect of Company-Rs. 184,507.29 million (Previous yearRs. 112,871.64 million). ii) In respect of Joint Ventures - Rs. 194.47 million (Previous yearRs. 3,026.16 million). 27. Estimated amount of Minimum Work Programme (MWP) committed under various Production Sharing Contracts with Government of India/ Nominated Blocks: i) In respect of NELP blocks in which the Company has 100% participating interest - Rs. 33,419.14 million (Previous year Rs. 21,016.72 million). ii) In respect of Nominated Blocks Rs. 1,128.13 million (Previous year Nil). iii) In respect of NELP blocks in Joint Ventures-Rs. 87,076.90 million (Previous yearRs. 51,675.97 million). 27.1 Contingent Liabilities: Claims against the Company/ disputed demands not acknowledged as debt:- (Rs. in million) As at As at 31.03.2010 31.03.2009 I In respect of Company i. IncomeTax 15,721.36 20,723.73 ii. Excise Duty 2,372.44 1,648.95 iii. Custom Duty 1,447.47 1,447.47 iv. Royalty 18,849.79 360.39 v. Cess 12.76 4.92 vi AP Mineral Bearing Lands (Infrastructure) Cess 1,171.84 922.92 vii. Sales Tax 20,135.52 7,271.46 viii. Octroi 66.89 66.89 ix. Specified Land Tax (Assam) 2,274.50 1,646.06 x. Claims of contractors in Arbitration / Court 21,262.90 62,796.57 xi. Others 17,317.84 5,038.78 Sub Total (A) 100,633.31 101,928.14 II In respect of Joint Ventures i. IncomeTax 8.91 8.91 ii. Excise Duty 322.42 iii. Custom Duty 3,457.89 3,262.74 iv. Royalty - 12.39 v. Cess 10.64 10.64 vi. Sales Tax 2,959.13 2,941.15 vii. Claims of contractors in Arbitration/ Court 740.73 471.74 viii. Others 4,898.72 550.41 Sub Total (B) 12,398.44 7257.98 TOTAL(A+B) 113,031.75 109,186.12 The above claims / demands are at various stages of appeal and in the opinion of the Company are not tenable. 27.2 Bank Guarantees given by the Company: i) Rs. 3,426.38 million (Previous year Rs. 1,542.65 million) including ^ 1,142.37 million (Previous year Rs. 1,495.11 million) for NELP Blocks where the Company has 100% participating interest. ii) In respect of Joint Ventures - Rs. 7,082.46 million (Previous yearRs. 4,947.94 million). iii) Out of total Bank Guarantees of ONGC an amount of Rs. 7,044.00 million (Previous year Rs. 4,544.32 million) has been provided in respect of MWP committed under various Production Sharing Contracts with Government of India and Nominated Blocks which is also included in Capital Commitments under para 27.1.2. 27.3 Corporate Guarantees executed by the Company on behalf of its wholly owned subsidiary, ONGC Videsh Limited (OVL) and ONGC Nile Ganga BV (wholly owned subsidiary of OVL): 27.4. Guarantees executed for financial obligations: i) Amount of GuaranteeRs. 38,043.51 million (Previous yearRs. 57,062.28 million). ii) Amount Outstanding Rs. 34,932.70 million (Previous yearRs. 56,447.65 million). 27.4.1 Performance Guarantees executed underthe contracts: Guarantee in respect of Sakhalin Project in favour of Exxonneftgas Ltd., M/s. Roseneft-S, SMNG-S and RN-Astra towards performance of Companys obligation under Joint Operating Agreement without any financial ceiling. 28. Corporate Guarantees executed by the Company on behalf of its subsidiary, MRPL: i) Amount of GuaranteeRs. 16,246.80 million (Previous yearRs. 18,356.40 million). ii) Amount Outstanding Rs. 4,828.91 million (Previous yearRs. 3,295.49 million). 28.1 Uncalled liability on partly paid shares is Rs. 1,337.19 million (Previous Year Rs. 1,337.19 million) against which advance paid Rs. 1,233.87 million (Previous YearRs. 1,233.87 million). 29 Previous years figures have been regrouped/ reclassified, wherever necessary, to conform to current years classification. 30 Figures in parenthesis as given in these Notes to Accounts relate to previous year. 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