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)
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).
15 days salary for each completed year of service. Vesting period is 5 years and the payment is restricted to
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
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
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