Oil & Natural Gas Corpn Ltd.
|BSE: 500312||Sector: Oil & Gas|
|NSE: ONGC||ISIN Code: INE213A01029|
|BSE 00:00 | 24 Apr 2020||Oil & Natural Gas Corpn Ltd|
|NSE 05:30 | 01 Jan 1970||Oil & Natural Gas Corpn Ltd|
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|Mkt Cap.(Rs cr)||85,043|
|Mkt Cap.(Rs cr)||85,043|
Oil & Natural Gas Corpn Ltd. (ONGC) - Director Report
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Company director report
The Board of Directors of your Company (ONGC) are pleased to share withyou the highlights developments and the progress that your Company has made during thefinancial year ended 31.03.2019 and to present the 26th Annual Reporton the business and operations of the Company and its Audited Statements of Accountstogether with the Auditors' Report and Comments on the Accounts by the Comptrollerand Auditor General (CAG) of India.
The business environment was again marked by great uncertainty inFY'19. Disruptive socio-economic and political changes continued to affect growth inmany parts of the world. In the emerging markets economic volatility worsened as growthrates slowed and currencies weakened. In the developed markets deflationary pressures andsoft consumer demand resulted in a continuous challenging trading environment. In the faceof such uncertainty it was more important than ever to stay on course and remain loyal toour strategy driving short-term performance while ensuring we made the right decisions todeliver our long-term goals.
We are pleased to share that despite the uncertainty your Companyalong with its group companies have registered yet another year of sustained performance.Exploration and production our core business set various milestones during the year.Besides that performance in the areas where ONGC has engaged substantially also witnessedsuccess with positive contributions.
During FY'19 on account of exploratory efforts 137.05 MillionMetric tonnes (MMt) of Oil and Oil Equivalent Gas (O+OEG) accretion to In-placeHydrocarbons (3P) from ONGC-operated areas in India has been realized.
95.42 MMt of O+OEG In-place volume (about 69.6 percent of TotalIn-place) have been accreted from New Discoveries and Delineation/Appraisal efforts. 41.63MMt of O+OEG In-place volume (about 30.4 percent of Total In-place) have been accreted asan outcome of data generated through other exploratory efforts.
During the year the Estimated Ultimate Recovery (EUR) accretion in 2Pcategory from ONGC operated areas in India has been 63.02 MMt of O+OEG.
Accretion from JV non-operated areas in India has been 20.25 MMt(O+OEG) in In-place Volume and 11.45 MMt (O+OEG) in EUR.
Domestic crude oil and natural gas production of ONGC along with itsshare in the domestic joint ventures (PSC-JVs) during FY'19 has been 50.04 millionmetric tonnes of oil and oil equivalent gas (MMtoe) which has been almost at the samelevel as during FY'18.
All joint ventures of your Company established for value- chainintegration i.e. ONGC Petroadditions Ltd (OPaL) ONGC Mangalore Petrochemicals Ltd.(OMPL) ONGC Tripura Power Company Ltd (OTPC) Dahej SEZ Ltd (DSEZ) Mangalore SEZ Ltd.(MSEZ) and ONGC Teri Biotech Limited (OTBL) contributed meaningfully towards sustainedendeavors of your Company for growth.
1. Major Highlights: FY'2018-19
The significant milestones achieved by your Company duringFY'2018-19:
a) ONGC's standalone O+OEG production during 2018-19 was 45.86MMtoe an increase of 0.2% w.r.t. 2017-18 (45.79 MMtoe).
b) Natural gas production during 2018-19 was 24.75 BCM which was 5.4%more than the production during 2017-18.
c) ONGC's gas production recorded an all-time high of 71 MMSCMD inNovember 2018 mainly due to ramping up of production from Daman in Western offshoreS1-Vashistha in Eastern offshore and Tripura in Onshore.
d) Production of Value Added Products (VAP) increased by 7.56% (3641KT 2018-19 against 3385 KT in 2017-18).
e) 516 wells drilled during 2018-19 as compared to 503 in the year2017-18; an increase of ~ 3 % (y-o-y basis).Drilled more than 500 wells in last threeconsecutive years.
f) Drilled 411 development wells (including side tracks); the highestin the history of the Company.
g) Total 17 discoveries monetized during 2018-19 including 5discoveries (3 pool and 2 Prospect) made during 2018-19 and remaining 12 from previousyears.
h) Two New Basins i.e. Vindhyan and Bengal Basins were upgraded toCategory II from Category III.
i) Hon'ble Prime Minister dedicated ONGC's deep waterS1-Vasishta Development Project to the nation on 10th February 2019 at Gunturin Andhra Pradesh.
j) C2-C3 Plant Dahej processed 5.095 million tonnes of LNG in 2018-19against plant capacity of 5 million and produced ~ 900 KT of total annual VAP.
k) Revenue from operations was at र 1096546 million againstर 850041 million in FY'18.
l) Net profit (PAT) was at र 267158 million against million during FY'18.
2. Global Recognitions
Your Company has been ranked number one E&P Company in the world byPlatts Top 250 Global Energy Company Rankings-2018 and 21st among global energymajors based on assets revenues profits and return on invested capital. The leadinginternational business journal Forbes in its 2019 list has ranked the Company 3rdlargest in India and 220th worldwide based on sales profit assets and marketvalue.
ONGC has been ranked 197 in the coveted Fortune Global 500 list 2018.
3. Details of new discoveries
Your Company recorded thirteen new discoveries (six New Prospects andseven New Pools) during the year. Out of six new prospect discoveries five were inon-land and one in offshore. Three on-land and four offshore pool discoveries were alsoestablished during the year.
Details of new discoveries
Total 17 discoveries have been monetized during 2018-19 including 5discoveries (3 pool and 2 Prospect) made during 2018-19 which are in nomination blocksand remaining 12 from the previous years.
During the year Reserve Replacement Ratio (RRR) of your Company fromdomestic fields were 1.41 and 1.78 with respect to 2P and 1P reserves respectively. Withthis your Company has achieved Reserve Replacement Ratio (2P) of more than one for 13thconsecutive years.
4. Acquisition of E&P Blocks
Your Company has been awarded five Blocks including operatorship in twoblocksunder Round-1 of Open Acreage License Policy (OALP).
5. Reserve Position as on 01.04.2019 and Reserve Accretion
ONGC migrated to PRMS (Petroleum Resource Management System) as on01.04.2019 from the earlier SPE (Society of Petroleum Engineers) Accretion of In-placehydrocarbons and EUR (Estimated Ultimate Recovery) by the Company in its operated areasand in Non-Operated areas (JV Share) during 2018-19 and position of In-place hydrocarbonsand EUR (Estimated Ultimate Recovery) as on 01.04.2019 are furnished as below:
In-place Hydrocarbon volumes and Ultimate Reserves of Company operatedand JV (Domestic) Fields
Note: EUR position as on 01.04.2019 (EUR=Cumulative Production +Reserves + Contingent Resources).
As per PRMS existing remaining recoverable has been classified asReserves and Contingent Resources. For better understanding of earlier and existingsystem Reserves positions as on 01.04.2019 in both the reporting system i.e. earlier SPEand newly adopted PRMS are given below. In future the Company will report its Reserves inPRMS format only.
The following table gives the details of reserve accretion (2P-Provedand Probable) for the last 5 years in domestic basins as well as from overseas assets:
Note: Reserve accretion reported in terms of 2P reserves
6. Drilling of Wells
The total number of wells drilled by your Company during 2018-19 hasbeen 516 against 503 wells drilled during 2017-18. The details are as below:
Out of these 516 wells one exploratory and nineteen development wellsin deep-water were drilled.
7. Oil Gas and VAP Production
Domestic crude oil and natural gas production of ONGC along with itsshare in the domestic joint ventures (PSC-JVs) during FY'19 has been 50.04 millionmetric tonnes of oil and oil equivalent gas (MMtoe) which has been almost at the samelevel as during FY'18.
On standalone basis ONGC's O+OEG production during 2018-19 hasbeen 45.86 MMtoe an increase of 0.2 per cent (45.79 MMtoe in FY'18). On standalonebasis crude oil production from ONGC operated fields has been
21.11 million metric tonnes (MMT) against production of 22.31 MMTduring FY'18. Natural Gas Production (on standalone basis) during FY'19 has been24.75 BCM an increase of 5.4 per cent over the production during FY'18 (23.48BCM).The Company has registered increase in its domestic natural gas output for thirdconsecutive year mainly on account of ramping up of production from Daman in Westernoffshore S1-Vashistha in Eastern offshore and Tripura Asset in onshore.
Your Company's share in domestic Joint Ventures' productionwas 3.12 MMT of crude oil (3.13 MMT in FY'18) and 1.06 BCM of natural gas (1.13 BCMduring FY'18). Combining the two total domestic production has been 24.23 MMT of oiland 25.81 BCM of gas. Production of Value Added Products (VAP) increased by 7.6%; from3.39 MMT in FY'18 to 3.64 MMT during the year with contribution from C2-C3 andHazira plants in Gujarat.
The C2-C3 plant processed 5.095 MMt of LNG in 2018-19 against plantcapacity of 5 MMt and produced ~ 900 KT of VAP.
*Others include ATF Sulphur-P Sulphur-C LSHS HSD LDO and MTO
Production from Overseas Assets by ONGC Videsh
During the year total Oil and Gas production from overseas assets hasbeen 14.833 MMtoe of O+OEG (Oil: 10.097 MMT; Gas 4.736 BCM) in comparision to 14.164 MMtoeduring FY'18; an increase of 4.7 per cent which was mainly due to incrementalproduction from Sakhalin-1 project Russia; Block-06.1 Vietnam; additional productionfrom acquisition of 4 per cent stake in the Lower Zakum Concession project in UAE fromresuming of production in GPOC South Sudan and from Exploratory success in Block CPO-5Colombia.
Oil and Gas production of ONGC Group including contribution fromPSC-JVs and Overseas assets for FY'19 was 64.88 MMtoe (against 64.21 MMtoe inFY'18) an increase of one percent.
8. Technology induction/up-gradation
Technology induction/ up-gradation in various areas of operations is acontinuous process in your Company to remain effective and competitive. The followingtechnologies were evaluated/ inducted in the year 2018-19:
a) Development of methodologies for oil to oil correlation usingcompound specific isotopic analysis of biomarkers (CSIB) and Total Scanning FluorescenceSpectrophotometry (TSF).
b) Development of methodology for estimation of thermal maturity oforganic matter through Fourier Transform Infra-Red spectroscopy (FTIR).
c) Intrepid Software for processing and interpretation of potentialfield geophysics data: ground airborne and marine surveys.
d) Nobel Gas Mass Spectrometer (NGMS): This new dating technology willbe used particularly for absolute dating of basalts which will have bearing on sub-basaltMesozoic hydrocarbon exploration particularly in the Kutch-Saurashtra Basin as well asto understand thermo-tectonic evolution of basement rocks from different sedimentarybasins of India.
e) GCM Modelling through Landmark: Technology of making GCM throughLandmark's "Earth Modelling Module" has been inducted.
f) Technology by ESSEME: Pilot Project finalised to carry out"Thin Bed Resolution" study in Linch area through M/s ESSEME.
g) Broadband Processing has been established in OMEGA System byinducting Adaptive De-ghosting (AD) Technology on marine data to broaden the spectrum andimprove the resolution by removing the source and receiver end ghosts.
h) Integration of reservoir model and 3D-MEM technology: This techniquewas used for optimization of hydro-fracturing in Redevelopment project of Gamijfield.jobs:
i) Profile modifications Carried out water shut off jobs using in housechemical formulations in different fields of ONGC.
j) Several MEOR jobs in huff-n-puff mode and PDB jobs for paraffindegradation in tubulars in Mehsana & Ankleshwar Assets were carried out. Scrappingfree period improved significantly by application of in-house developed Paraffin DegradingBacteria (PDB) microbial formulations in Mehsana and Ankleshwar Assets.
k) Chemical Tracer test: It was conducted for low salinity micro-pilotin a well of Mumbai High South. The in-house developed technology is used to estimateRemaining Oil Saturation to see the effect of Low salinity water flooding.
l) Gas Tracer: Application of in-house developed technology on GasTracer has been used for better understanding of migration of flue gases in reservoir. Thetechnology was used for monitoring and analysis on real time basis of 26 wells.
m) Immiscible gas injection in Borholla field:Gravity assistedImmiscible gas injection in depleted reservoir in KSU-5 sand of Borholla field has beenimplemented with the objective to enhance oil production and increase recovery from adepleted dipping reservoir. The plan envisages incremental oil of 0.34 MMt.
n) Miscible in Gandhar field: Simulation for CO2 GS-9 andGS-11 was studied which envisaged incremental oil gain of 3.63 MMt (GS-9 Sand: ~1.7 MMt;GS-11 Sand ~1.93 MMt) by 2042 Inj.; GS-11 with 75 (GS-9 Sand: 14 OP + 11 CO2 Inj.) newwell inputs.Sand: 23 OP + 27 CO2
o) Laboratory study of LoSalin South Heera field:The laboratory resultsare encouraging and the conceptual plan is on the anvil. Simulation results for SouthHeera indicate 0.33 MMT of incremental oil gain (over the period of 17 years) by 2035.
p) Gas Assisted Gravity Drainage (GAGD): A study on Gas AssistedGravity Drainage (GAGD) process has been carried out in Kasomarigaon field. It envisagescumulative oil of 0.86MMm3 (with 35% recovery) by drilling new horizontal oilproducers and 2 new gas injectors. The process is envisaged to give dual benefit ofmaintaining reservoir health and reducing the gas flaring.
q) Polymer flood pilot in Bechraji a heavy oil field (averageviscosity of 270 cP) of Mehsana Asset was approved. This is the first time polymer floodis planned in heavy oil and envisaged potential to improve recovery by 4%.
r) Redevelopment of Gamij: The existing model was updated incorporatingresults of 55 new wells and integration of 3D-MEM for optimization of hydro-fracturing. Aphase-wise development is suggested along with drilling of some parametric wells acrossthe field to acquire high tech logs and core data to characterize sweet spots and optimizeHF strategy.
s) "Development of Shockwave Assisted Fracking Tools: Filing ofthe second patent on "Shock tube tool for fracking of deep wells for oil and naturalgas" is in progress.
t) Collaborative project with IIT-Delhi on "Development of directhydrocarbon solid oxide fuel cell (SOFC) for utilization of low pressure gas for powergeneration at remote locations" is in progress under ONGC PAN-IIT CollaborativeResearch Program.
u) Collaborative project with IIT-Mumbai on "Flow Assurance ofWaxy Crudes in Pipelines" is in progress under ONGC PAN-IIT Collaborative ResearchProgram.
v) Collaborative project with IIT (ISM)-Dhanbad on "Development ofNano material based particle gel system for W&GSO in carbonate reservoirs" is inprogress under ONGC PAN-IIT Collaborative Research Program.
w) i-Procalv-1: In-house developed process designsoftware "i-Procalv-1" which includes sizing and rating ofvertical as well as horizontal 3 phase separators including the effect of specialinternals.
x) PLUNGLift: IOGPT developed software "PLUNGLift"which can be used to determine if the existing well parameters are sufficient to operatethe plunger. The software will also give an indicative design of plunger lift system.
y) Acquired technology for carrying out deep water riser and mooringanalysis by procuring Orcaflex software (ORCINA) and training by experts from 2H OffshoreUK.
z) Developed software "MATCAP" for analysis of bearingcapacity of offshore shallow foundations especially mud-mat foundation on which offshorejackets are supported initially till long piles are driven to permanently secure aplatform in the offshore.
9. Other Exploration Initiatives/Activities National Seismic Programme(NSP):
ONGC has been assigned by MoPNG the responsibility to carry out 2Dseismic Acquisition Processing & Interpretation (API) of 40835 LKM of data inun-appraised areas of Indian sedimentary basins. In view of revision of basin boundariesthe volume of work assigned to ONGC was also increased to 42211 LKM by DGH in June 2018.
As on 31.03.2019 ONGC has acquired 32319 LKM of seismic data (76.6 %of total revised target of 42211 LKM) and processed about 13346 LKM of complete seismiclines.
Basement Exploration: This year also ONGC took up BasementExploration as a major initiative. During the year 2018-19 25 wells were drilled for withBasement exploration. Deliberate search of hydrocarbons in the Mesozoic sequence of KutchSaurashtra block of western offshore basin has led to discovery of a new hydrocarbonbearing play in the fractured dolerite intrusives which flowed gas in substantial quantityextending the exploration frontier around the area. Encouraging results obtained throughdrilling of a number of new prospects during the year in the Padra field of Cambay Basinand the UAS block of A&AA basin has further enhanced the scope of basementexploration. Development initiatives taken up for exploitation of the fracturedPrecambrian reservoirs in the Thirunagari and Pundi fields of Cauvery basin have been metwith expected results encouraging sustenance of scope for basement exploration andexploitation. Your Company has also identified 25 prospects from G&G interpretationfor basement exploration which are being finalized.
HP-HT Exploration: HP-HT (High Pressure High Temperature)regime begins at a minimum temperature-pressure domain of 150C (300F) and 10000 Psirespectively. During the year 2018-19 in GS-OSN-2004/1 block of Western Offshore Basinexploratory HP-HT well "GSS-041-NAA#C" has been successfully drilled and testedin Jhuran formation (Mesozoic) to be gas bearing. In KG offshore HP-HT Well"YS-6-2#sub" has been successfully drilled to the target depth of 5324m withoutcomplications and hermetically tested on March 28 2019. The HP-HT well is being taken upfor testing. In Cauvery Basin HP-HT well "ABAA_KKL" has been drilled to 5500m.After testing three objects the well was abandoned. Further the HP-HT well"VNAC" in Cauvery Basin has been concluded at depth of 3760m against the targetdepth of 4900m due to high pressure. The testing of the well is being taken up. InA&AA Basin three HP wells in Khubal field had been drilled and tested with result ofgas indication. Further three HP wells in Kunjaban field have been taken up for drillingand testing for Lower Bhuban Formation.
10. Exploration and Production from Unconventional Sources a) Coal BedMethane (CBM):
Currently ONGC is operating in four CBM Blocks i.e. Jharia BokaroNorth Karanpura (Jharkand) and Raniganj (West Bengal). After completion of Phase-I and IIactivities development activities of Bokaro and North Karanpura is in progress. RevisedField Development Plans (FDP) for Jharia and Raniganj is under approval.
b) Shale Gas
During 2018-19 a total of 3 exclusive shale gas wells (NDSGAand NGSGA in Cambay basin and WGSGA in KG Basin) were drilled and one dualobjective well NGSAA in KG Basin is presently under testing. So far ONGC hascompleted drilling of 26 wells (of which 8 are exclusive wells and 18 are dual objectivewells) in 21 blocks across four basins of Cambay KG Cauvery and A&AA Basins.Attempts are continuing to establish the shale gas/oil potential in the identified blocks.However some indications of the presence of oil have been observed during the activationof the zones during hydro-fracturing in wells JMSGA and GNSGB in Cambay Basin and WGSGA inKG Basin. Presently further activation is required in well WGSGA in KG Basin whereas wellGNSGC in Cambay Basin is awaiting hydro-fracturing.
c) Underground Coal Gasification
Due to its inability to continue with UGC project Gujarat IndustriesPower Company Limited expressed to withdraw from the Vastan UCG project. ONGC has done lotof ground work in this project and invested a lot of resources on UCG. A memorandum hasbeen received from Ministry of Coal (MoC) on 31.10.2018 regarding allotment of the Vastanblock to ONGC for testing of UCG pilot. MoC has sought confirmation from ONGC under UCGPolicy terms and conditions issued by MoC vide notification dated 26.09.2016. i.e. forfull tenure 33 years of contract in 4 phases of exploration pilot assessment developmentand production. Allotment of Block from MoC is awaited.
d) Gas Hydrate Exploration Program
ONGC as a NGHP Consortium Member of National Gas Hydrate Program ofGoI has played a significant role in G&G studies for the identification of sites forNGHP-01(2006)/ NGHP R&D Expedition-02 (2015) and successfully executed with on-boardstudies of both the expeditions. The results of NGHP-02R&D Expedition are veryencouraging and producible gas hydrates have been discovered in KG deep offshore areas insand reservoirs which will be taken up for production testing during NGHP-03.
Presently Gas Hydrate Research and Technology Centre (GHRTC) isinvolved in R&D activities in exploration for gas hydrate prospects in Indian Deepwaters and potential exploitation methodologies for gas hydrates through in-house effortsand PAN IIT collaborations. About eight in-house and two collaborative projects werecompleted. Four collaborative projects are in progress. Potential exploitationmethodologies besides in-house studies like sand control well bore completions andDepressurisation techniques various production simulation studies have been carried outin collaboration with USA.
11. Oil & Gas Projects Projects completed in 2018-19
During the year 2018-19 ten major projects (3 development & 7Infrastructure) costing around र 112585.50 Million were completed.
12. Projects approved during the year for implementation
During 2018-19 the following four Offshore Projects have been approvedfor implementation-
a) Pipeline Replacement Project-V: Project was approved on26.04.2018 with an investment of र 7663.70 Million. Project envisages laying andcompletion of 10 pipeline segments of ~60 Km under Mumbai High and Neela-Heera Assets. Theproject is expected to be completed by December 2019.
b) Mumbai High South Redevelopment Phase-IV: Project was approvedon 14.02.2019 with an investment of र 36607.10 Million. The scheme envisagesinstallation of WIS-R water injection process platform pilot EOR scheme and drilling of 6development wells and 24 side-track wells. The scheme envisages incremental gain of 2.432MMt oil and 0.577 BCM gas from IOR inputs and 0.795 MMt oil from EOR pilot scheme by March2035. The project is expected to be completed by April 2021.
c) Development of cluster 8 marginal field: The project wasapproved on 14.02.2019 with an investment of र 22924.60 Million. The schemeenvisages installation of 4 wellhead platforms 3 slot clamp-on at B192-1 associatedpipelines along with drilling of 18 development wells one well tie-back and one sidetrack. The scheme envisages incremental production of 4.380 MMt oil and 0.464 BCM gas byMarch-2035. The project is expected to be completed by May 2021.
d) Construction of Transit storage Yard Kakinada EOA: The projectwas approved on 26.04.2018 with an investment of र 6380 Million. Project envisagesconstruction of storage yard and office at Kakinada. The project will be completed in 24months after award of contract.
In addition ONGC's mega offshore deep-water project in EastCoast Cluster-2 Development of KG-DWN-98/2 is in advanced stage of implementation.Contracts for some of the major packages such as SURF-SPS Onshore Terminal and CPP &LQP (Offshore Process Platform and Living Quarters) have been awarded during 2018-19.
13. ONGC Energy Strategy 2040
During the year your Company also adopted its strategic blueprint forthe future ONGC Energy Strategy 2040. While the Board approved the document in thefirst quarter of FY'20 much of the work in relation to the document was executedduring FY'19. It is an important milestone for the Company as it gears up as thecountry's foremost NOC in oil and gas for the opportunities and challenges of theemerging world and domestic energy order for the next couple of decades. Strategy 2040builds on the primary ideals and objectives of Perspective Plan 2030 while remaining aliveto the evolving dynamics of an energy world that is in transition. It envisions ONGC as"A diversified energy company with strong contribution from non E&P businesses;3x revenues and ~5-6x market capitalization".
14. Financial Highlights:
Your Company has earned Profit After Tax (PAT) of र 267158million up by 33.9% over FY'18 (र 199453 million) and registered Revenue fromOperations of र 1096546 million up by 29% over FY'18 (र 850041million).
Highlights Standalone Financial Statements
Revenue from Operations: र 1096546 million Profit After Tax(PAT):र 267158 million Contribution to Exchequer: र 518713 million Return onCapital Employed: 35.43% Debt-Equity Ratio: 0.11:1 Earnings/ Share: र 20.86 BookValue/ Share: र 161
15. Buy-back of shares
The Board of Directors of the Company meeting held on 20.12.2018 hadapproved the proposal for buy-back of equity shares upto 252955974 fully paid-up equityshares being 1.97% of the total paid-up equity shares of the Company at the price ofर 159 per equity shares payable in cash of an aggregate consideration not exceedingर 40220 million. The buy-back offer worked out to 2.50% of the net-worth of theCompany as on 31.03.2017 and 2.34% as on 31.03.2018. The Company has completed thebuy-back of 252955974 fully paid-up equity shares on 22.02.2019.
Upon completion of the buy-back the number of equity shares of theCompany reduced from 12833235180 to 12580279206 with corresponding reduction inthe paid-up share capital from र 64166.17 million to र 62901.39 million.
The Board of Directors of your Company is pleased to recommend a finaldividend of र 0.75 per equity share of the face value of र 5 each (@15%)payable to those Shareholders whose names appear in the Register of Members as on the BookClosure / Record Date.
Your Company has paid two interim of र 5.25 per share (@105%) andर 1.00 per share (@20%) of र 5 each.
The total dividend for the year र 88062 million including theproposed final dividend besides र 18101 million applicable Dividend DistributionTax (DDT) which is 39.74% of PAT (inclusive of DDT). The dividend pay-out were inaccordance with the Company's dividend distribution policy.
The Dividend Distribution policy as by the Company may be accessed atthe web link https://www.ongcindia.com/wps/wcm/connect/en/ investors/policies.
17. Management Discussion and Analysis Report
As per the terms of regulations 34(2)(e) of the SEBI ListingRegulations the Management Discussion and Analysis Report (MDAR) as appended forms partof this Annual Report.
18. Financial Accounting
The Financial Statements have been prepared in compliance withIndian Accounting Standards (Ind-AS) issued by the Institute of Chartered Accountants ofIndia (ICAI) effective from 01.04.2016 and applicable provisions of the Companies Act2013. There have been no material changes and commitments which affect the financialposition of the Company which have occurred between the end of the financial year towhich the financial statements relate and the date of this Report.
19. Loans Guarantees or Investments
Your Company is engaged in Exploration & Production (E&P)business which is covered under the exemption provided under Section 186(11) of theCompanies Act 2013. Accordingly the details of loans given investment made or guaranteeor security given by the Company to subsidiaries and associates is not reported.
20. Details relating to deposits covered under Chapter V of the Act to
21. Credit Rating of Securities: Details of the Credit Rating ofDebt Securities obtained by the Company:
22. Investor Education and Protection Fund (IEPF)
Details of transfer of unclaimed dividends and eligible shares to IEPFhave been placed in the Corporate Governance Report which forms part of the Boards'Report.
23. Related Party Transaction
Particulars of contracts or arrangements with related parties asreferred to in Section 188(1) of the Companies Act 2013 is provided in specified FormAOC-2 and placed at Annexure-A.
24. Subsidiaries Associates and Joint Ventures
The Consolidated Financial Statements for the year ended 31.03.2019 ofyour Company has been prepared in accordance with Section 134 of the Companies Act 2013Ind AS 103 "Business Combinations" as per Pooling of Interest Method Ind AS 110"Consolidated Financial Statements" and Ind AS 28 "Investments inAssociates and Joint Ventures". The audited Consolidated Financial Statements for theyear ended 31.03.2019 form part of this Annual Report.
Full Annual Reports of subsidiaries of your Company will be madeavailable to any shareholder upon request the same is also available on Company'swebsite. Further Annual Reports of ONGC Videsh MRPL HPCL and PMHBL are also availableon websites www.ongcvidesh.com; www.mrpl.co.in; www.hindustanpetroleum.com andwww.petronetmhbl.com respectively.
Financial position of subsidiaries associates and joint venturecompanies included in consolidated financial statement provided in AOC-1 prepared underthe Companies Act 2013 and Accounting Standards. In addition brief details aboutsubsidiaries/ Associates and Joint Ventures are as under
a) ONGC Videsh Limited
ONGC Videsh the wholly-owned subsidiary of your Company for E&Pactivities outside India has participation in 41 oil and gas projects in 20 countriesviz. - Azerbaijan (2 projects) Bangladesh (2 Projects) Brazil (2 projects) Colombia (7projects) Iran (1 project) Iraq (1 project) Israel (1 project) Kazakhstan (1 project)Libya (1 project) Mozambique (1 Project) Myanmar (6 projects) Namibia (1 project) NewZealand (1 Project) Russia (3 projects) South Sudan (2 projects) Sudan (2 projects)Syria (2 projects) UAE (1 project) Venezuela (2 projects) and Vietnam (2 projects).
Out of these 41 projects ONGC Videsh is the Operator in 14 projectsJoint Operator in 7 projects and in remaining 20 projects it is non-operator. ONGC Videshhas a combination of 15 producing 4 discovered/under development events in18exploration projects and 4 pipeline projects. ONGC Videsh's share in production ofoil and oil equivalent gas (O+OEG) together with its wholly-owned subsidiaries ONGC NileGanga B.V. ONGC Amazon Alaknanda LimitedImperial Energy Limited Carabobo One AB andONGC Videsh Singapore Pte. Ltd. has been 14.833 MMtoe during FY'19 as compared to14.164 MMtoe during FY'18. The overall oil production increased from 9.353 MMt duringFY'18 to 10.097 MMt during FY'19 (an increase of 8%). Gas production has been4.736 BCM during FY'19 against 4.811 BCM during FY'18(lower by 1.6%).
During FY'19 the Company has made consolidated Profit After Taxof र 16823 million attributable to owners as compared to consolidated Profit AfterTax of र 9815 million attributable to owners during FY'18. The increase inprofit is mainly on account of higher production and higher crude oil prices.
Significant financial activities during the year
ONGC Videsh has repaid bonds of USD 300 million that matured on07.05.2018 on due date by raising USD 150 million in short-term Foreign Currency NonResident/Foreign Currency Term Loan facilities from Banks and the balance USD 150 millionfrom internal resources.
Memorandum of Understanding (MoU)
A Cooperation Agreement was executed on 28.09.2018 between ONGC VideshLimited and UzbekNefteGaz to jointly explore the possibilities to assess potentialopportunities in exploration blocks under development assets and producing fields/blockslocated within the Republic of Uzbekistan and third countries pertaining to upstreamsector with an initial term of two years. A Joint Working Team with members from UNG andONGC Videsh is formed and preliminary data is under review.
area of Exploration & Significant Operation during FY'19:
A) GPOC South Sudan: - Production from Greater Pioneer OperatingCompany (GPOC) South Sudan project of ONGC Videsh has resumed after prolonged shutdownsince December 2013. On August 25 2018 officially declared the pumping of first crudeoil from Toma South field of South Sudan to Heglig in Sudan.
B) CPO-5 Colombia:- Achieved second consecutive success in anonshore well Indico-1X Colombia. The well Indico-1 was spudded on 07.11.2018 and drillingcompleted on 15.12.2018. During the test the well flowed at self-flow rate of appx.
4000 BOPD. Currently the well is under Short Term Testing with multibean study for further evaluation. Importantly first success was in the well Mariposa-1which is located 6.5 km from Indico-1 and the continuation of same play is confirmed inthe recent well.
C) Rovuma Area-1 Project Mozambique:-
The jointly owned marketing entity of ONGC Videsh and joint venturepartners of Mozambique Rovuma Offshore Area 1 project incorporated at Singapore hasentered into long-term LNG Sale and Purchase Agreement (SPA) with Tokyo Gas Co. Ltd.(Tokyo Gas) and Centrica LNG Company Ltd. a subsidiary of Centrica plc (Centrica) througha co-purchasing agreement for sale of 2.6 million tonnes per annum (MMTPA) from thestart-up of production until the early 2040s; CNOOC Gas and Power Singapore Trading &Marketing Pte. Ltd (CNOOC) for 1.5 MMTPA for a term of 13 years; Shell InternationalTrading Middle East Ltd. (Shell) for 2 MMTPA for a term of 13 years; Bharat Gas ResourcesLtd. a wholly owned subsidiary of Bharat Petroleum Corporation Ltd. for 1 MMTPA for a termof 15 years and Pertamina a state owned oil and gas company of Indonesia for 1 MMTPA fora term of 20 years.
These latest deals build upon previously executed deals for long termoff-take of LNG from Rovuma Offshore Area 1 project and take long-term sales to more than9.5 MMTPA. With the approval of the development plan in February 2018 ongoingresettlement implementation activities site preparation and execution of these SPAs theproject is poised to take FID in H1 2019.
D) Lower Zakum Concession UAE: The first equity cargo of Das Blendcrude produced from Lower Zakum Concession ADNOC Offshore UAE arrived at New Mangaloreport on 08.06.2018. This equity crude of ONGC Videsh was refined at MRPL and is anotherstep towards ensuring India's energy security needs.
E) Block 06.1Vietnam: Memorandum of Understanding (MoU) was signedon 18.04.2018 among ONGC Videsh Rosneft Vietnam BV (Operator) and PetroVietnam relatingto further exploration activities in Block 06.1 for exploration in deeper Clasticprospect.
Direct Subsidiaries and Joint Ventures of ONGC Videsh: i) ONGC NileGanga B.V. (ONGBV):
ONGBV a subsidiary of ONGC Videsh is engaged in E&P activitiesdirectly or through its subsidiaries/JVs in Sudan South Sudan Syria Venezuela Braziland Myanmar. ONGBV holds 25% Participating Interest (PI) in Greater Nile Oil Project(GNOP) Sudan with its share of oil production of about 0.257 MMT during FY'19. ONGBValso holds 25% PI in Greater Pioneer Operating Company (GPOC) South Sudan. Productionfrom GPOC South Sudan resumed on 25.08.2018 after prolonged shutdown since December 2013and produced 0.131 MMT in FY'19. ONGBV holds 16.66% to 18.75% PI in four ProductionSharing Contracts in Al Furat Project (AFPC) Syria. Due to force majeure conditions inSyria there was no production in AFPC project during FY'19. ONGBV holds 40% PI inSan Cristobal Project in Venezuela through its wholly owned subsidiary ONGC Nile Ganga(San Cristobal) BV with its share of oil & oil equivalent gas production of about0.286MMTOE during FY'19. ONGBV holds 27% PI in BC-10 Project in Brazil through itswholly owned subsidiary ONGC Campos Ltd. with its share of oil and oil equivalent gasproduction of about 0.548 MMTOE during FY'19. It also holds 25% PI in Block BM-SEAL-4located in deep-water offshore Brazil through its wholly owned subsidiary ONGC CamposLtda. ONGBV also holds 8.347% PI in South East Asia Gas Pipeline Co. Ltd. (SEAGP) foronshore Pipeline project Myanmar through its wholly owned subsidiary ONGC Caspian E&PB.V.
ii) ONGC Narmada Limited (ONL): ONL has been retained foracquisition of future E&P projects in Nigeria.
iii) ONGC Amazon Alaknanda Limited (OAAL): OAAL a wholly-ownedsubsidiary of ONGC Videsh holds stake in E&P projects in Colombia through MansarovarEnergy Colombia Limited (MECL) a 50:50 joint venture company with Sinopec of China.During FY'19 ONGC Videsh's share of oil and oil equivalent gas production inMECL was about 0.444 MMtOE.
iv) Imperial Energy Limited (IEL): IEL a wholly-owned subsidiaryof ONGC Videsh incorporated in Cyprus has its main activities in the Tomsk region ofWestern Siberia Russia. During FY'19 Imperial Energy's oil and oil equivalentgas production was about 0.242 MMtOE.
v) Carabobo One AB:
Carabobo One AB a subsidiary of ONGC Videsh incorporated in Swedenindirectly holds 11% PI in Carabobo-1 Project Venezuela. During FY'19 ONGCVidesh's share of oil and oil equivalent gas production was about 0.127 MMtOE.
vi) ONGC BTC Limited: ONGC BTC Limited holds 2.36% interest in theBaku-TbilisiCeyhan Pipeline ("BTC") which owns and operates 1768 km oilpipeline running through Azerbaijan Georgia and Turkey. The pipeline mainly carries crudefrom the ACG fields from Azerbaijan to the Mediterranean Sea.
vii) Beas Rovuma Energy Mozambique Limited (BREML): BREML wasincorporated in British Virgin Islands (BVI) and has been migrated by continuation toMauritius w.e.f. 23.01.2018. ONGC Videsh holds 60% shares in BREML and the balance 40% areheld by Oil India Ltd. BREML holds 10% PI in Rovuma Area 1 Mozambique.
viii) ONGC Videsh Atlantic Inc. (OVAI):
ONGC Videsh has setup a Geological and Geophysical (G&G) Centre atHouston USA through its wholly owned subsidiary ONGC Videsh Atlantic Inc. The Centrecaters to requirement of G&G studies for potential new acquisitions of ONGC Videshincluding G&G studies of its existing portfolio of projects.
ix) ONGC Videsh Rovuma Limited: ONGC Videsh Rovuma Limited a whollyowned subsidiary of ONGC Videsh was incorporated in Mauritius for re-structuring of 10% PIin Rovuma Area 1 Mozambique.
x) ONGC Videsh Singapore Pte. Ltd.:
The Company was incorporated on 18.04.2016 in Singapore for acquisitionof shares in Vankorneft Russia through its subsidiary ONGC Videsh Vankorneft Pte Limited(OVVL). OVVL holds 26% shares in Vankorneft Russia and its share of production duringFY'19 was 5.800 MMTOE.
xi) Indus East Mediterranean Exploration Ltd.: Indus EastMediterranean Exploration Limited a wholly owned subsidiary of ONGC Videsh wasincorporated in Israel on 27.02.2018 and engaged in E&P activities related toBlock-32 Offshore Israel.
xii) ONGC Mittal Energy Limited (OMEL):
ONGC Videsh along with Mittal Investments Sarl (MIS) promoted OMEL ajoint venture company incorporated in Cyprus. ONGC Videsh and MIS together hold 98% equityshares of OMEL in the ratio of 49.98:48.02 remaining 2% shares are held by SBI CapitalMarkets Ltd. OMEL also holds 1.20% of the issued share capital of ONGBV by way of Class-Cshares issued by ONGBV exclusively for Syrian Assets and is being financedby Class-CPreference Shares issued by ONGBV.
xiii) SUDD Petroleum Operating Company:
SUDD Petroleum Operating Company (SPOC) a Joint Operating Companyincorporated in South Sudan to operate in Block 5A South Sudan in which ONGC VideshPetronas & Nilepet of South Sudan holds 24.125% 67.875% & 8% PI respectively.Block 5A is located in the prolific Muglad basin and is spread over an area of about20917 Square Km.
xiv) Mozambique LNG1 Company Pte. Ltd.:
Mozambique LNG1 Company Pte. Ltd. has been incorporated at Singapore byRovuma Area-1 Mozambique consortium to oversee marketing and shipping activities of LNGfrom first 2 trains of Golfinho-Atum field.
xv) Falcon Oil & Gas B.V. (FOGBV): FOGBV was incorporated inNetherlands on 06.02.2018. ONGC Videsh's wholly owned subsidiary ONGBV holds 40%shares in FOGBV IOC and BPRL holds 30% shares each though their respective Dutchsubsidiaries. The transaction documents were executed with ADNOC Supreme PetroleumCouncil (SPC) and the Operating Company (OPCO) on 10.02.2018 at Abu Dhabi for acquiring10%PI in Lower Zakum Concession for a period of 40 years with effect from 09.03.2018.During FY'19 ONGC Videsh's share of oil production was about 0.757 MMT.
b) Mangalore Refinery and Petrochemicals Limited (MRPL)
Your Company continues to hold 71.63 % equity stake in MRPL a ScheduleA' Mini Ratna company and listed entity which is a single location 15 MMTPARefinery on the West coast. FurtherHPCL another subsidiary of your Company alsocontinues to hold 16.96% in MRPL. MRPL achieved the highest-ever crude oil processing of16.23 MMT and lowest ever energy consumption of 74.27 MBN for FY'19. It also recordedthe highest-ever high value Polypropylene production of 388 KT.
Even with the stressed global market conditions MRPL achieved NetProfit of र 3320 million and GRM of 4.06 USD/bbl.
ONGC Mangalore Petrochemicals Limited (OMPL) is a subsidiary of MRPL.It has set-up Aromatic Complex with an annual capacity 914 KTPA of Para-xylene and 283KTPA of Benzene in . Mangalore Special Economic Zone as value chain integration project.OMPL operated at capacity utilization of ~100% in FY'19. Total revenue in FY'19was र 83624 million and net profit wasर 229 million. This is a maiden profitfor OMPL. Presently MRPL holds 51% in the share capital of OMPL and ONGC holds 48.99% andthus OMPL is a subsidiary of MRPL. 4000 shares (.0002%) are held by 13 individuals.
c) Hindustan Petroleum Corporation Limited (HPCL)
Your Company acquired 51.11% shareholding held by the President ofIndia in HPCL on 31.01.2018 for a total cash consideration of र 369150 million.
HPCL has recorded excellent physical and financial performance duringthe financial year 2018-HPCL achieved EBITDA of र 130772 million in FY'19 ascompared to EBITDA of र 125214 million in FY 2017-18. In spite of volatile crudeprices lower cracks and depreciation of rupee HPCL was able to achieve higher EBITDA dueto increased thru'put at refinery higher marketing sales volume and betteroperational efficiency and inventory gains. During FY'19 PAT has been र 60287million on standalone basis as compared to PAT of र 63571 million duringFY'18. Gross Sales during FY'19 increased to र 2957126 million asagainst र 2432267 million during the previous financial year.
During FY'19 HPCL refineries at Mumbai and Visakhapatnam havemaximized crude processing and achieved the highest ever combined refining throughput of18.44 Million Metric Tonnes (MMT) with capacity utilization of 117% compared tothroughput of 18.28 MMT achieved during FY'18. Both refineries recorded the best everthroughput performance on individual basis as well.
Maximization of crude processing at refineries helped HPCL achieve thehighest ever production of LPG (896 TMT) Lube Oil Base Stock (474 TMT) and Bitumen (1267TMT). HPCL refineries also achieved excellent performance in the area of energy efficiencyand recorded the lowest combined specific energy consumption during the year. HPCLachieved combined Gross Refining Margin (GRM) of USD 5.01 per barrel during the year ascompared to USD 7.40 per barrel during FY'18. GRMs were lower in comparison toprevious year mainly on account of reduced cracks in all products except HSD and FOhigher fuel and loss cost due to increased crude price and exchange rate variation lossdue to rupee depreciation.
During FY'19 HPCL achieved the highest ever sales volume of 38.7MMT with a domestic sales growth of 4.7% over historical. Domestic sales of Motor Spirit(Petrol) increased by 6.8% High Speed Diesel (HSD) by 2.1% LPG by 7.1% Aviation TurbineFuel (ATF) by 20% Bitumen by 26.4% and Lubes by 8% compared to FY'18.
HPCL continues to be India's largest lube marketer for the sixthconsecutive year with overall lubricant sales volume of 650 TMT during the year. HPCLrecorded market share gain of 0.17% in Motor Fuel sales amongst PSU OMCs during 2018-19.HPCL continues to be India's second largest LPG marketer. In Industrial &Consumer (I&C) business HPCL exceeded 5 MMT sales volume for the third consecutiveyear.
HPCL reported consolidated PAT of र 66906 million during 2018-19as against र 72183 million during previous financial year. The consolidated PAT islower due to reduction in profits of HMEL and MRPL resulting in reduction of HPCL'sshare of profits. Further share of profit from MRPL for FY 2018-19 was र 588 millionas against र 3389 million during 2017-18.
For the year 2018-19 HPCL has proposed a final dividend of 審.40 per share in addition to the interim dividend of र 6.50 per share aggregatingर 15.90 per share for FY'19.
Capital Projects of HPCL
During 2018-19 a number of capital projects were completed by HPCLwith highest ever overall capital expenditure of र 116890 million. Pipeline projectfor capacity expansion of Ramanmandi-Bahadurgarh Pipeline (RBPL) from 4.71 to 7.11 MMTPAwas completed within the scheduled time and cost. POL supply network was strengthened withcommissioning of new railway tank wagon gantry at Visakh black oil terminal revamp of theexisting tank wagon facility at Jabalpur depot and commissioning of new aviation fuelstations at Amritsar Bhubaneshwar Raipur and Kolhapur airports. LPG supplyinfrastructure was augmented with commissioning of a new LPG bottling plant at Warangal(Telangana) with bottling capacity of 60 TMPTA and additional bottling capacityaugmentation of 330 TMTPA at existing LPG plants.
478 new retail outlets and 1018 new LPG distributorships werecommissioned during 2018-19 taking the number of total retail outlets to 15440 and numberof total LPG distributors to 5866 as of 31.03.2019.
HPCL has expanded its global footprints and is supplying HP Lubricantsto 11 countries.
HPCL's Visakh Refinery Modernization Project and Mumbai Refineryexpansion Project are progressing well. Major contracts have been awarded and siteconstruction activities are in progress for both the projects. Licensor selection for allthe process units has been completed for 9 MMTPA Greenfield refinery cum petrochemicalcomplex project of HPCL Rajasthan Refinery Limited (HRRL) and site construction activitiesare in progress at Pachpadra in Barmer. Financial closure is achieved for
Rajasthan Refinery project.
HPCL's major ongoing pipeline projects
Mundra Delhi Pipeline (MDPL) capacity expansion
Extension line from Palanpur to Vadodara including new greenfieldterminal at Vadodara Visakh Vijayawada Secunderabad pipeline(VVSPL) capacity expansionand
Extension of Visakh Vijayawada Secunderabad pipeline (VVSPL) fromVijayawada to Dharmapuri & construction of marketing terminal at Dharmapuri are ontrack.
In addition Uran Chakan LPG pipeline project is in advanced stage ofcompletion. HPCL has been authorized to set up CGD networks in 9 states.
With this HPCL on its own and through its JV companies hasauthorization for CGD network in 20 geographical areas in 9 states. Environmentalclearance is received for LNG regasification terminal being set up in Joint Venture atChhara Gujarat.
Subsidiaries of HPCL i) Prize Petroleum Company Limited (PPCL)
Prize Petroleum Company Ltd (PPCL) is a wholly owned subsidiary ofHPCL. PPCL is the upstream arm of HPCL and is in the business of Exploration andProduction (E&P) of Hydrocarbons as well as providing services for management ofE&P blocks.
ii) HPCL Bio Fuel Limited
HPCL Biofuels Ltd (HBL) is a wholly owned subsidiary of HPCL. Thecompany was incorporated on 16.10.2009 as a backward integration initiative to foray intomanufacture of ethanol. HPCL Biofuels Ltd. (HBL) is a wholly owned subsidiary company ofHPCL. HBL was promoted as a backward integration initiative to enable HPCL's forayinto manufacturing of Ethanol for blending in Petrol. HBL presently has two integratedSugar-Ethanol-Cogeneration plants at Sugauli and Lauriya in the state of Bihar. iii)HPCL Rajasthan Refinery Limited
HPCL Rajasthan Refinery Ltd. (HRRL) is a joint venture of HPCL andGovernment of Rajasthan with 74% equity participation by HPCL and balance 26% byGovernment of Rajasthan. HRRL is setting up a 9 MMTPA capacity Greenfield refinery cumpetrochemical complex in the state of Rajasthan. HPCL and the Government of Rajasthanentered into a revised Memorandum of Understanding on 18.04.2017 for the construction ofthe said Refinery with revised parameters. The revised Joint Venture Agreement was signedon 17.08.2017.
iv) HPCL Middle East FZCO
HPCL Middle East FZCO a 100% Subsidiary of HPCL was incorporatedon 11.02.2018 as a free zone company under Dubai Airport Free Zone and Establishment Cardwas issued on 22.03.2018 for the company. HPCL Middle East FZCO was established fortrading of lubricants & greases petrochemicals and refined petroleum products. Thecompany has also commenced its operations. HPCL has expanded its global footprints and issupplying HP Lubricants to 11 Countries. Newly formed wholly owned subsidiary "HPCLMiddle East FZCO" in Dubai has also commenced its operations.
d) Petronet MHB Limited (PMHBL)
Upon acquisition of controlling interest in the capital of HPCL on31.01.2018 PMHBL has become a direct subsidiary of your Company. Both the Company andHPCL hold 65.44% (each 32.72%) in the capital of PMHBL. Balance 34.56% of equity beingheld by banks/ Financial Institutions. PMHBL owns and operates a multiproductpipeline to transport MRPL's products to the hinterland of Karnataka.
In FY'19 PMHBL pipeline has achieved a throughput of 3.36 MMTagainst total throughput of 3.50 MMT last year.
PMHBL has recorded total Revenue of र 2030 million as comparedto र 1711 million in the previous year. Further Profit After Tax of PMHBL wasर 1118 million in FY'19 as compared to र 835 million in FY'18.
Associates and Joint Ventures e) Pawan Hans Limited (PHL)
PHL an Associate of the Company (49%) was formed with the Governmentof India (51%) acting through Ministry of Civil Aviation inter-alia for catering to thelogistic requirements of oil fields located at remote/far-flung areas. PHL is Mini Ratna-ICategory PSU having 43 helicopters including medi-chopper. The Government of India istaking action for identifying a strategic acquirer for its entire holding and hence yourCompany has also decided to exit PHL along with the Government.
f) Petronet LNG Limited (PLL)
PLL a JV of the Company which was incorporated on 02.04.1998 with12.50% equity holding along with identical stakes held by other Oil PSU co- promotersviz. IOCL GAIL and BPCL is a listed Company. PLL one of the fastest growingworld-class companies in the Indian energy sector has set up the country's first LNGreceiving and regasification terminal at Dahej Gujarat and another terminal at KochiKerala. While the Dahej terminal has a nominal capacity of 15 MMTPA the Kochi terminalhas a capacity of 5 MMTPA.
During FY'19 the Company's Dahej Terminal operated at 107%of its name plate capacity and processed highest ever LNG quantities of 820 TBTU asagainst the 816 TBTU of LNG quantities processed in FY 2017-18. The overall quantitiesprocessed by the Company in FY'19 was 844 TBTU as compared to 848 TBTU processed inFY'18.
The Company registered highest ever Profit before Tax of र 32336million in FY'19 which stood at र 30551 million in the corresponding periodwitnessing a growth of 6%. PAT for FY'19 was र 21554 million which stood atर 20779 million in FY'18 registering a growth of 4%.
The increase in profit over the corresponding FY 2017-18 is due tohigher volumes processed at the Dahej Terminal and better efficiency in operations.
The Board of Directors have recommended a dividend of र 4.50 perequity share of र 10 each (45%) for the FY 2018-19.
g) Dahej SEZ Limited (DSL)
DSL a 50:50 JV of the Company along with Gujarat IndustrialDevelopment Corporation was formed a for establishing a multi-product SEZ at Dahej. YourCompany has set up C2-C3 Extraction Plant as a valuechainintegration project which serveas feeder unit toONGC Petro- additions Limited.
Revenue from Operations of DSL during FY'19 was र 578million ProfitAfter Tax was र 328 million.
h) ONGC Tripura Power Company Limited(OTPC)
OTPC was incorporated on 27.09.2004 as a joint venture of your Company(50%) along with the Government of Tripura (0.5%) and IL&FS Energy Development Co.Ltd. (IEDCL - an IL&FS subsidiary) (26%); the balance 23.5% has been tied up withIndia Infrastructure Fund II acting through IDFC alternatives Limited.
OTPC has set up a 726.6 MW gas based Combined Cycle Power Plant atPalatana Tripura at a project costof र 40470 million. The basic objective of theprojectis to monetize idle gas assets of the Company in landlocked Tripura State and toboost exploratory efforts inthe region. Power evacuation for both the units is donethrough 663 KM long 400 KV double circuit transmission network by NorthEast TransmissionCompany Limited (NETC) a joint venture of Power Grid Corporation OTPC and Governments ofthe North-Eastern states. OTPC's both power units of 363.3 MW each are fullyoperational in two phases. Average Plant load factor (PLF) for the year FY'19 was75%.
Total Income of OTPC during FY'19 was र 14558 million andProfit After Tax (PAT) was र 2139 million. OTPC paid an interim dividend of @8% anddeclared final dividend @6% also.
i) Mangalore SEZ Limited (MSEZL)
MSEZ is a Special Economic Zone promoted by the Company with an equitystake of 26% along with KIADB (23%) IL&FS (50%) OMPL (0.96%) and KCCI (0.04%). MSEZwas set up as zone for development of necessary infrastructure to facilitate and locateindustrial establishment including OMPL. MSEZ is operational since 01.04.2015. Withinvestments exceeding USD 2 billion and exports of over USD 400 million worth of goodsfrom its units MSEZ has emerged as one of the most vibrant operational multi-product SEZsin India.
Revenue from operations for FY'19 was र 2068 million andPAT was र 24.10 million.
j) ONGC Petro additions Limited (OPaL)
OPaL is a mega petrochemical project established in Dahej SEZ forutilizing in-house production of C2-C3 and Naphtha from the nearby unit of the Company.The project cost of OPaL at completion was र 308260 million.
OPaL has started its production in 2016-17 and has been ramping up itsproduction in phases. OPaL has established itself in domestic/export market with sale ofprime grade products. OPaL operated at average 70% capacity in FY'19; and aggregatedmore than One Million Tonne of polymer sales. Total Income of OPaL during the yearFY'19 has been र 97854 million. Polymers produced by OPaL has been adjudged asthe Best Polymer Brand of 2019 by Economic Times.
k) ONGC TERI Biotech Limited (OTBL)
OTBL is a JV formed by the Company (49.98%) along with The EnergyResearch Institute (48.02%) and the balance 2% shares are held by individuals.
OTBL has developed various Biotechnical Solutions to oil and gasIndustries through collaborative researches involving the Company and TERI.
These technology include Bioremediation Paraffin Degrading Bacteria(PDB) Wax Deposition Prevention (WDP) and Microbial Enhanced Oil Recovery (MeOR) whichare being provided to oil and gas industries both in India and abroad.
Revenue from Operations of OTBL during FY'19 was र 216million and Profit After Ta x was र 67 million.
l) Rohini Heliport Limited (RHL):
Your Company has subscribed 49% equity capital in Rohini HeliportLimited a mirror company of Pawan Hans Limited incorporated on 07.01.2019 for the purposeof operating Rohini Heliport independently.
m) Indradhanush Gas Grid Limited (IGGL)
Your Company has subscribed 20% equity capital in IGGL a JV company ofONGC IOCL GAIL OIL and NRL. The company has been incorporated in Guwahati Assam forthe purpose of laying 1656 KM pipeline covering north east states with a Capex of Million. The company got incorporated on 10.08.2018 and has initiated the projectrelated activities.
25. Companies Which Have Become/ Ceased To Be Company'sSubsidiaries Joint Ventures And Associates Companies During The Year
a) Companies which has become subsidiaries during the financial year2018-19: Nil. b) Companies which has ceased to be subsidiaries during the financial year2018-19: Nil. c) Companies which has become a joint venture or associate during thefinancial year 2018-19: i) Rohini Heliport Limited. ii) Indradhanush Gas Grid Limited. d)Companies which has ceased to be a joint venture or associate during the financial year2018-19: Nil
26. ONGC's Start-up Initiative
ONGC announced र 1000 million Start-up fund on its 60thfoundation day i.e. on 14.08.2016 to foster nurture and incubate new ideas related toenergy sector. The initiative christened as ONGC Start-up Fund' is in linewith the Start-up India' initiative launched by the Hon'ble Prime Ministerof India on 16.01.2016.
The initiative is intended to promote entrepreneurship among youngIndians by creating an ecosystem that is conducive for growth of Start-ups in the energysector which has a huge potential for technology-enabled ideas. The energy sector iscontributing enormously to the growth of economy. Currently the sector faces variouscritical challenges and new ideas are required to mitigate these challenges.
On 07.12.2016 a dedicated website startup.ongc. co.in was launched byHonorable Union Minister of State (I/C) Petroleum and Natural Gas for registration ofproposals. The website also contains an application form to capture proposals for Fundingsupport for Start-Ups.
In order to provide the entire support chain including seed capitalhand-holding mentoring market linkage and follow-ups MoUs with SINE of IIT Bombay andL-Incubator of IIM-Lucknow (Incubators) were entered to support evaluation selectionmentoring monitoring and to construe an ecosystem to incubate new ideas related to energysector and nurture them to become commercial ventures.
The associated institutes assist ONGC in evaluation due-diligenceconstruction of documents and associated negotiations. The initiative has received verygood response in four rounds held so far and one O&G 20 round held during Petrotech2019. ONGC has completed evaluation of two rounds and have provided support to fivestartups from energy sector. Evaluation of 3rd round is in progress. Pitchingsession for 4th and O&G 20 round is planned.
In addition to existing ongoing process it has been decided that Oil&Gas CPSEs will create a common platform/ process through IITs/IIMs/ other educationalInstitutions for receiving and shortlisting proposals. ONGC is also a participant in theprocess which shall provide access to increased number of Start-ups.
27. ONGC's Solar Chulha Initiative
Hon'ble Prime Minister while dedicating Deendayal Urja Bhavan tothe nation had exhorted ONGC to take up a challenge of developing an energy efficientelectric cooking stove under ONGC Start-Up scheme which would enable cooking through theuse of solar energy.
ONGC launched a nationwide Solar Chulha Challenge invitingEntrepreneurs/ Scientists/ Researchers to participate in the Indigenous Development effortof Solar Chulha (Electric and Thermal) suitable for indoor cooking of Indian food(including frying baking and chapati making). A panel of eminent scientists drawn fromvarious national institutions/ bodies was constituted under Dr. Anil Kakodkar formerChairman Atomic Energy Commission for evaluation of applications. After two rounds ofevaluation by the Expert Panel and prototype demonstration held in ONGC premises on23-24.04.2018 top three teams were awarded with cash prizes of र 10 र 5 andर 3 Lakhs respectively. The other two teams were given appreciation awards ofर 1 lakh each. Teams from IIT Bombay and NIT Kurukshetra have installed 86 solarelectric chulhas and 5 solar thermal chulhas respectively in Betul MP under pilotproject. BMS College's proposal is under consideration against ONGC Start-upInitiative.
28. Health Safety and Environment (HSE)
Being a high risk industry safety of its employees is the top-mostpriority of your Company. Hydrocarbon exploration & production (E&P) operationsare being carried out in varied climate and environment areas ranging from deserts tocoastal areas hilly terrains to forests shallow to deep water and also in ultra-deepwater areas. E&P activities often interact with the ecosystems and may havephysico-chemical & bio-geochemical impact on the surrounding environment. YourCompany being a responsible Corporate makes all efforts for protection and preservationof environment.
The Company has recently revised its Environment Policy and e-WastePolicy in line with the existing rules regulations and guidelines. Your Company has adedicated Institute viz. Institute of Petroleum Safety and Health Management (IPSHEM) atGoa for research and development in the field of HealthSafety and Environment Managementapart from conducting training programs.
Your Company takes all the requisite measures to minimize the impact ofE&P activities on the environment by adoption of clean technologies for gaseousemissions liquid effluent and solid waste generated out of its operations. Your Companyhas implemented globally recognized QHSE Management System conforming to requirements ofQHSE Certifications ISO 9001 ISO 14001 and ISO 18001 (OHSAS) and certified by reputedagencies at all its operational units. Corporate guidelines on online incident reportinginvestigation and compliance of audit observations have been developed and implemented formaintaining uniformity throughout the organization in line with international practice.
HSE Highlights during 2018-19
Internal Safety Audits (ISA) and External Safety Audits (ESA)
To check the conformity of activities and processes to HSE managementsystems as well as to prevalent rules regulations guidelines and standards regularaudits are being conducted internally by multi-disciplinary teams of ONGC and externalaudits/ inspections by different agencies namely Oil Industry Safety Directorate (OISD)and Directorate General of Mines Safety (DGMS). During the year 268 internal safety auditswere conducted.
External Safety Audits
OISD conducts Safety Audits on regular basis. In the year 2018-1956 Safety Audit/Surprise Safety Audits and 2 Pre-Commissioning Audits were conducted byOISD. Compliance status as on 31.03.2019 was 91.48%. DGMS is a Regulatory Agencyunder the Ministry of Labour and Employment Government of India in matters pertaining tooccupational safety health and welfare of persons employed in mines (Coal Metalliferousand oil-mines). It carries out periodic inspections of ONGC onshore facilities. Compliancestatus as on 31.03.2019 was 97.51%.
All efforts are being made to liquidate Safety Audit Recommendationswithin the stipulated timelines. Expected Date of Completion (EDC) for compliance of auditobservation(s) is firmed up based on the criticality and volume of work involved. Suitablecompensatory safety measures are put in place till the audit observations are compliedwith.
Waste Water Management: ONGC monitors the usage of waste waterand quality of effluent discharged by meeting statutory requirements for discharge oftreated effluent at surface/ subsurface through Effluent Treatment Plants (ETPs).ONGC has 32 number of ETPs across onshore work centres to treat approx. 92710 m3/dayof waste water produced during E&P operations.
For Offshore effluent treatment Produced Water Conditioners (PWCs)have been installed at process platforms. For treatment of sewage water generated inoffshore facilities Sewage Treatment Plants (STPs) are in place.
Solid Waste Management: For environmentally safe disposal ofoily waste ONGC has a Joint Venture Company ONGC-TERI Biotech Limited (OTBL) which hasdeveloped specialized patented technology for bioremediation of oily sludge/oilcontaminated soil. The technology uses a consortium of Hydrocarbon degrading bacteriawhich reduces the TPH (Total Petroleum Hydrocarbons) levels in waste/ soil to less than1%. During 2018-19 23681 MT of oily sludge/ oil contaminated waste has beenbio-remediated.
Environmental Clearances: During the year 2018-19 7 Nos. ofenvironment clearances (ECs) comprising 24 exploratory and 354 development wells in 30fields/ML/PEL/ blocks in onshore areas
GCS at Silchar and 4 Early Production Systems (EPS) at Raniganj blockof CBM Asset were granted by MoEF&CC for carrying out exploration development andproduction activities in acreages held by ONGC.
Other Initiatives during 2018-19:
Under Ten Safety Rules Awareness Programme around 13214 personnel(both ONGC and contractual personnel) during 2018-19 and 41711 personnel since inceptionof the programme (i.e February 2017) have been apprised. It continues to be a permanentfeature of the Safety Campaign.
HSE Index introduced for benchmarking installations on variousparameters like detection and suppression system environment parameters evacuationsystems equipment integrity etc. has been implemented at all work centres.
Regular Mock drills are being conducted at installations/ rigs to checkthe efficacy of preparedness against defined emergency scenarios. During 2018-19 12132Emergency Response Plan (ERP) 5 Offsite Disaster Management Plan (DMP) 15 Onsite DMP and1 RCP (Regional Contingency Plan) drills have been conducted.
Mines Vocational Training (MVT) is being imparted to both ONGCemployees and contract personnel through 10 in house training centres.
Efficient implementation of HSE Management and no accident leading toinsurance claim resulted in appreciable decrease in Insurance premium for OffshoreInstallation (USD 16.6 million for the year 2018-19 for Asset Value of USD 40.0 billionagainst USD 18.6 million for Asset Value of USD 36.0 billion for the year 2017-18).
A unique initiative of Online Safety Pledge was launched throughin-house portal of "ONGC Reports" to further reinforce the commitment of ONGCemployees towards safety. The pledge is followed by automatic generation of Certificatewith signatures of Director- I/c HSE.
During 2018-19 Annual Preparedness Review (APR) was carried out tounderstand roles and responsibilities of ONGC (participant member) and Oil Spill ResponseLtd. (OSRL) United Kingdom to meet the exigencies during oil spill which includedWalk-through Exercise and Mock Drill onboard ONGC MSV for the first time.
India was chosen to host World Environment Day (WED) 2018 by UnitedNations Environment Program (UNEP) with theme "Beat Plastic Pollution". CMDalong-with MD-ONGC Videsh and Board of Directors led the WED celebrations on 05.06.2018and made a strong appeal to motivated ONGC employees to adopt eco-friendly lifestyles withsustainable alternatives to single use plastics. Additionally ONGC was selected byMinistry of Environment Forests and Climate Change (MoEF&CC) as Knowledge Partner inWED celebrations.
Corporate-HSE along with Corporate-CSR collaborated with InternationalUnion for Conservation of Nature (IUCN) for Plastic Waste clean-up at Okhla Bird Sanctuaryand Okhla Barrage on 07.06.2018 followed by a workshop on "Beat Plastic Pollution:From Rivers to the Oceans" on 20.06.2018 at ONGC Auditorium Vasant Kunj New Delhi.
Safety Alert is a brief guidance material that highlights anincident or unsafe practice and outlines the required action to prevent their occurrence.The information is disseminated to stakeholders for evaluation and taking appropriateaction. Corporate HSE has made it a practice to upload Safety Alerts on ONGC'sinternal portal ongcreports.net for wider circulation and awareness. Safety Advisorieswere also issued on ongcreports.net for generic audit observations and their compliancesto help in improving the performance during audits by external agencies.
For the first time comprehensive Waste Management Audits were carriedout at select installations of Ahmedabad and Ankleshwar Assets during March 2019 to checkcompliance of applicable provisions of waste management rules which include Solid WasteManagement Rules 2016; e-Waste (Management) Rules 2016; Plastic Waste Management Rules2016;
Hazardous & Other Waste (Management & Trans-boundary Movement)Rules 2016 and Construction & Demolition Waste Management Rules 2016.
ONGC has been accredited by Quality Council of India (QCI) National Accreditation Board for Education & Training (NABET) since 2013 as anEnvironment Impact Assessment (EIA) Consultant Organization which is mandatory forpreparing EIA reports required for Environmental Clearances. ONGC has completed two fullcycles of accreditation scheme. For further accreditation assessment was done by QCINABET assessors at Deendayal Urja Bhawan during 20-22.02.2019 and which recommendedcontinuance of ONGC's QCI-NABET accreditation.
29. Carbon Management and Sustainable
Sustainable Development is the overarching working template in theCompany and this finds expression in our commitment to continually enhance the triplebottom line benchmarks of economic environmental and social performance. Your Company hasa dedicated set up called Carbon Management and Sustainability Group (CM&SG) at thecorporate level to plan implement and monitor sustainable development activities inassociation with Sustainable Development Officers (SDOs) located at work centres.
The major endeavors towards this initiative are as under:
Clean Development Mechanism (CDM): Renewal of credit period of 51MW wind power project at Surajbari Gujarat. The final validation report was submitted toUNFCC for revalidation and renewal of the project on 18.02.2019. This request and relateddocuments are available on the UNFCCC CDM website.
Development of CBM Asset - Bokaro as a new CDM project.
The baseline methodology applicable to the project was proposed toUNFCCC. UNFCCC has sought clarification on the proposed methodology for which responsesare being submitted.
Verification of Five existing CDM projects
The verification of following five existing CDM projects has been takenup for the issuance of CERs:
51 MW Wind Power Project Surajbad GFR Neelam & Heera GT-1 >-2 at Hazira GFR Uran Amine Circulation Pumps Hazira For verification of 102 MW WindPower Plant CDM project at Jaisalmer RajasthanDesignated Operational Entity (DOE) hasbeen hired to carry out the verification work.
Global Methane Initiative
In 2018-19 CM&SG carried out gas leak survey to detect fugitiveemission of methane at 10 production installations of Ankleshwar Asset and C2-C3 Dahejplant. The Gas Leak Survey Reports were submitted to Ankleshwar Asset and C2 C3Plant for remedial measures.
ONGC Group Sustainability Report
The Company launched its independently assured sustainability Report inthe year 2009-10 and from then onwards the Company has incrementally enhanced the boundaryof reporting to include subsidiaries ONGC Videsh and MRPL and from FY'17 onwards theGroup Corporate Sustainability Report also includes Joint Venture companies OTPC OPaL andOMPL. The GRI based externally assured reports are now a major enabler to the Companytowards creating triple bottom line value creation and parity to all forms of capital.ONGC Group Sustainability report FY'17 was published in June 2018.
Sustainable Water Management Projects: The following projects weretaken up during the year
Water footprint study of CBM Asset Bokaro.
Feasibility study for setting up of desalination plant atRajahmundry Asset.
Feasibility study for setting up of desalination plant at MRPL.
Sea Water Desalination Plant Uran.
30. Business Responsibility Report 2018-19
Clause (f) of sub-regulation (2) of regulation 34 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 stipulates that the annualreport shall contain a Business Responsibility Report describing the initiatives taken bythe listed entity from an environmental social and governance perspective in the formatspecified.Accordingly the Business Responsibility
Report for 2018-19 has been appended to this Annual Report.
31. Internal Control System
Your Company has put in place adequate Internal
Financial Controls by laying down policies and procedures to ensure theefficient conduct of its business; safeguarding of its assets; prevention and detection offrauds and errors; accuracy and completeness of the accounting records; and timelypreparation of reliable financial information commensurate with the operations of theCompany. Effectiveness of Internal Financial Controls is ensured through managementreviews control self-assessment and independent testing by the Internal Audit Teamindicating that your Company has adequate Internal Financial Controls over FinancialReporting in compliance with the provisions of the Companies Act 2013 and such InternalFinancial Controls are operating effectively. The Audit Committee reviews the InternalFinancial Controls to ensure their effectiveness for achieving the intended purpose.Independent Auditors Report on the Internal Financial Controls of the Company in terms ofClause (i) of Sub-Section 3 of Section 143 of the Companies Act 2013 by the StatutoryAuditors is attached along with the Financial Statements.
32. Human Resource Development
ONGC's operations are in challenging terrains desertsjungles border areas remote fields and offshore. Your Company truly value our HumanResource who commit themselves towards pursuit of exploration and production ofhydrocarbons to ensure India's Energy security. To keep their morale high yourCompany extends welfare benefits to employees and their dependants by way of comprehensivemedical care education housing and social security.
There were 31065 employees on rolls as on 31.03.2019. These ONGCiansdedicated themselves for securing excellent performance of your Company during the year.The workforce intake strategy pursued by your Company caters to meeting the demands ofmaintaining a steady flow of talent in a business which is characterized by high risksand uncertainties enormous costs rapid technological advances physically challengingwork environment fluctuating product prices and growing competition. Your Company hasdrawn up a scientific manpower induction retention and succession plan aligned to thebusiness plans as well factoring the manpower profile of the Company.
During the year your Company carried out Employee Engagement &Brand Perception Survey "Anubandhan" to understand the drivers of employeeengagement and to know the attributes which are valued by the existing and prospectiveemployees. More than 13600 employees of your Company along with approx. 2100 studentsfrom top B Schools and Engineering Colleges of India responded to the survey. Surveyresults indicated 85% engagement level.
Your Company emerged as the most preferred Corporate in the Oil and GasSector amongst engineering students.
During the year 2018-19 a total of 14486 executives and 4622non-executives were imparted appropriate training spanning 174455 executive and 14889non-executive mandays'.
During 2018-19 705 Graduate Trainees (in four batches) were exposed tovarious E&P activities as part of Induction Training'. 19 trainingprogrammes were conducted through foreign faculty which were attended by 394 participants.Your Company also pursued structured initiatives for maintaining a vibrant academia industry interface through Chairs participation in various academia-industry levelforums viz workshops seminars conferences etc.
Your Company also initiated a program for identification ofcompetencies and development of leadership for its identified Mid Level executives throughonline development centres with detailed Individual Development Plans for theirdevelopment based on the assessments.
To keep the workplace lively and the workforce engaged and vibrantyour Company also conducted Business Games' to hone the business acumen of itsexecutives through business quizzes business simulations and case-study presentations.During the year 2018-19 a total of 248 teams and 961 executives participated in theevent.
Similarly Fun Team Games' (FTG) were organized for E0 andbelow level employees to inculcate MDT (Multi-disciplinary Team) concept and spirit ofcamaraderie and belongingness to the organization which was very well received by theparticipants. A total of 178 Teams and 712 employees participated in FTG during the year2018-19. The winners of Business Games and Fun Team Games were felicitated by the CMDduring Republic Day Celebrations - 2019.
Employee Welfare Trusts
Your Company has established following Trusts for welfare / socialsecurity of employees:-
Employees Contributory Provident Fund (ECPF) Trust managesProvident Fund accounts of employees of your Company.
The Post Retirement Benefit Scheme (PRBS)
Trust of your Company manages the pension fund of employees of yourcompany. The Scheme was converted into a Defined Contribution Scheme in accordance withDPE guidelines in Nov'2013. The Composite Social Security Scheme (CSSS) formulatedby your company provides an assured ex-gratia payment in the event of unfortunate death orpermanent disability of an employee while in service. In case of separation other thanDeath/Permanent total disability employee's own contribution alongwith interest isrefunded.
Gratuity Fund Trust exists for payment of gratuity as per theprovisions of the Gratuity Act.
Your Company has a Sahyog Trust for its Sahyog Yojana to provideex-gratia financial grant for sustenance medical assistance treatment rehabilitationeducation marriage of female dependent and alleviation of any hardship or distress tosecure the welfare of the workforce and their kin who do not have adequate means ofsupport. The beneficiaries under this scheme include casual contingent daily rated parttime adhoc contract appointees tenure based employees apprentices and traineesemployed by your Company besides regular and past employees. Under the scheme an amountof र 43.7 million was disbursed by the Trust during 2018-19 to 1178 beneficiaries.
Your Company has Asha Kiran Scheme to meet the emergency needsof the ex-employees retired prior to 01.01.2007. The scheme was launched as per DPEguidelines by creating a corpus of 1.5% PBT.
Implementation of Govt. Directives for Priority Section
Your Company complies with the Government directives for PrioritySection of the society. The percentage of Scheduled Castes (SC) and Scheduled Tribe (ST)employees were 15.5 percent and 10.4 percent respectively as on 31.03.2019.
Your Company is fully committed for the welfare of SC and STcommunities. The following welfare activities are carried out by your Company for theirup-liftment in and around its operational areas:-
Annual Component Plan
Under Annual Component Plan for SC/ST every year allocation of million is made. Out of this र 60 million is distributed amongst all thework-centres of ONGC for taking up activities for welfare of SC/ST Communities in andaround areas of the Company's operations. In addition र 140 million is managedcentrally and is earmarked for Special projects/proposals/schemes for the welfare ofareas/ persons belonging to SC/ST communities. The amount under component plan is utilisedfor taking up various measures for the welfare and up-liftment of the needy people ofSC/ST Communities. This fund is especially meant for providing help and support inEducation and Training Community Development and Medical and Health Care.
Scholarship to meritorious students belonging to SC/ST community
Your Company provides 1000 scholarship for meritorious SC & STstudents for pursuing higher professional courses at different Institutes and Universitiesacross the country in Graduate Engineering MBBS PG courses of MBA and Geo-Sciences. Themajor feature of the scheme is that the scholarships have been equally divided for bothBoys and Girls students and the amount of scholarship has been made @ र 4000/- permonth amounting to र 48000/- per annum per student subject to conditions of thescheme.
Women employees constituted over seven percent (as on 31.03.2019) ofyour Company's workforce. During the year programmes on women empowerment anddevelopment including programmes on gender sensitization were organized.
Your Company actively supported and nominated its lady employees forprogrammes organized by reputed agencies. All E4/E5 level women executives underwent anOnline Development Centre (ODC) program for identification assessment and development ofleadership competencies
Disclosure under the Sexual Harassment of women at workplace policy(prevention prohibition and redressal) Act 2013
Your Company has complied with the provisions under the SexualHarassment of women at workplace (Prevention Prohibition and Redressal) Act 2013including constitution of Internal Complaints Committee (ICC) for dealing with complaintson sexual harassment of women at workplace. Two complaints of sexual harassment werereceived in the year 2018-19.
Your Company believes in providing work-life balance to its employees.The townships at many work-centers have developed facilities like gymnasiums music roomsetc. Facilities for gym yoga etc. were also provided in Offshore Living Quarters.Outbound programmes with families were also organized at various work-centers. Inaddition cultural programmes involving employees and their families were also conducted.ONGC Officers' Mahila Samiti (OOMS) and Resident Welfare Associations (RWAs) wereinvolved in organizing these cultural programs. Your Company has an adventure wing namedONGC Himalayan Association which organizes adventure programmes like mountaineeringtrekking water rafting snow skiing desert safari Aero sports etc. which adds towardsemployee morale engagement team spirit camaraderie stress management and spirit toexplore the unknown. 10 members of ONGC's Team successfully scaled the third highestpeak in the world Mount Kanchenjunga on 20-21 May 2018.The Team comprised a womanemployee and a female scholarship mountaineer.
Grievance Management System
Your Company has put in place an effective online response mechanism(https://grievance.ongc.co.in) since 2015 to enable all stake-holders viz. citizens/vendors employees former employees to register and get online redressal to theirgrievances related to any operational wing of ONGC.
Your Company has also put in place a Grievance Management System forredressing employee grievance which provides for three-tier channel for grievanceredressal with an Independent Appeals Committee at Corporate Level which is chaired byan external professional to ensure transparency and justice. Each level of reporting atControlling Officer (Channel-I) Sectional Head (Channel-II) andAsset/Basin/Institute/Plant/Office Head (Channel-III) has been mapped to provide accessfor settling individual grievances. An individual employee can enhance the level to thenext Channel in case his grievance is not settled at the first second or third Channels.The Appeals Committee situated at HQ can also be accessed for settlement of grievances incase the location Channels are not effective in resolving the grievance. Furtherprovision for representation through Chief Liaison Officers of SC/ST/OBC in the AppealsCommittee is also built in to protect the interest of reserved category employees.
For external stakeholders the Company has a well laid down grievanceredressal system in place with adequate provisions to escalate the matters up to the Board(Stakeholders Relationship Committee a Board level Committee headed by anIndependent Director).
The Company voluntarily facilitates grievances through IndependentExternal Monitors (IEMs) and through Outside Expert Committee (OEC).
33. Industrial Relations
During the year your Company maintained harmonious Industrial Relationsthroughout the Corporation. Man-days loss due to internal industrial action was reportedas NIL' for the year 2018-19.
34. Implementation under the Right to Information Act 2005
Your Company has a well-defined mechanism in place to deal with the RTIapplications received under the RTI Act 2005. Your Company has a designated GeneralManager level officer as a Nodal Officer to oversee its implementation. Therequests received are processed by the 22 senior personnel designated as CentralPublic Information Officers' (CPIOs) in various workcentres across the country incompliance of Sections 5(1) and 5(2) of the Act. The particulars of all the quasi-judicialauthorities under the ambit of RTI Act 2005 have been uploaded on the company website(www.ongcindia.com) for information of the general public. Further in compliance ofGovernment directives your Company is successfully processing the applications under theAct online.
Your Company received 1963 applications (including 138 transferred byother Public Authorities to ONGC) during the period from April 2018 to March 2019 and 183RTI applications were carried forward from the year 2017-18. A total of 1843 applicationswere responded to out of a total of 2146 applications. Further 43 applications wererejected and 57 applications were transferred to other public authorities in accordancewith the provisions of the RTI Act 2005. There were 357 first appeals which weredisposed-off during the period. Additionally 66 Second Appeals which were listed forhearing at the CIC during FY 2018-19 were also processed.
35. Implementation of Official Language Policy
Your Company makes concerted efforts for promotion and implementationof Official Language. In this regard some of the steps taken during the year were:
Unicode Hindi software installed in all offices.
Hindi workshops conducted at regular intervals in all workcentres.
Hindi Technical seminars Kavi Gosthies' and Hindiplays organized at various work centres.
Various programmes for promotion of Rajbhasha' wereorganised at all work centres of ONGC during Rajbhasha Fortnight' (14-28 Sep.2018) and Vishwa Hindi Diwas' (10.01.2019).
Hindi Teaching Scheme of Govt. of India was implementedeffectively at all regional work centres of ONGC.
E-Roster of Employees regarding working knowledge of Hindi wasput in place.
Hindi e-magazines were published at various work centres.
Paperless office (DISHA) has been made bilingual for effectiveimplementation of Official Language policy in the office works. Besides this installationof Unicode in SAP platform has been taken-up to enable bilingual work in SAP also.
In recognition of the initiatives taken for promotion ofRajbhasha your Company bagged eight Town
Official Language Implementation Committee (TOLIC) awards undervarious categories during the year.
ONGC sportspersons earned laurels for the Company and the country bysecuring 15 medals including 3 Gold 7 silver and 5 Bronze at Asian Games 2018 held atJakarta & Palembang Indonesia. 38 ONGCians represented the Indian contingent whileparticipating in this mega Event.
In Commonwealth Games 2018 at Gold CoastAustralia ONGC sportspersonsbagged 13 medals including 5 Gold 3 Silver and 5 Bronze contributing to the overall tallyof 66 medals of Team India. 21 ONGCians represented India in various game disciplines inthis event.
Your Company continued its large scale support for development ofsports in the country in the form of employment to 171 sportspersons and scholarships to289 budding talents in 25 game disciplines. Your Company also sponsored various sportsassociations / federations / sports bodies for organising sports events as well as todevelop sporting infrastructure. The support has enabled many sportspersons to achieve andbring home laurels for the nation and the organisation.
Three ONGCian's were conferred the prestigious "ArjunaAward" for the year 2018 namely Ms. Hima Das (Scholarship Athlete) Shri Ankur Mittal(Shooting) and Shri G Sathiyan (Table Tennis).
Shri Pankaj Advani was conferred the third highest civilian award"Padma Bhushan" in the year 2018. He also won his 21st World title incue sports by winning two World Titles in 2018 IBSF World Billiards Championship in timeand point format at Myanmar in November 2018.
Shri Virat Kohli (Cricket) was conferred the prestigious "RajivGandhi Khel Ratna" for the year 2018. The total number of National Awardees in theorganization stand at 44 ( Padma Bhushan 1 Khel Ratna 2 Padma Shri 3 & Arjuna Award 37 and Dhyanchand Award 1).
ONGC Scholarship Athlete Shri Suraj Panwar created history by winningSilver medal in 5000 m walk at Buenos Aires in Youth Olympic Games 2018.
ONGCian Shri Sourav Kothari won WBL World Billiards' Titlein Leeds UK in October 2018.
ONGCian Shri Sourabh Verma won the Dutch Super Open 100'International Badminton Tournament at Almere Netherland in October 2018.
ONGC's Women Shooting Team comprising
ONGCian Ms. Apurvi Chandela and scholarship players Ms. SriyankaSadangi and Ms. Gayatri Pawaskar won Gold medal in the 62nd National ShootingChampionship (Rifle Pistol event) Trivandrum in November 2018.
Your Company organised the 2nd edition of the Para Games inMarch 2019 in which 148 PWDs from different work-centres of ONGC participated.
37. Corporate Social Responsibility (CSR)
A report on CSR has been placed at Annexure B to the Report.
Consistent with the trend in preceding years your Company its variousoperating units and its senior management have been recipients of various awards andrecognitions. Detail of such accolades is placed at Annexure- C'.
39. Regulators or Courts order
During the Financial year 2018-19 there is no order ordirection of anycourt or tribunal or regulator which either affects Company's status as a goingconcern or which significantly affects Company's business operations.
40. Director's Responsibility Statement
Pursuant to the requirement under Section 134(3)
(c) of the Companies Act 2013 with respect to Directors'Responsibility Statement it is hereby confirmed that: a) In the preparation of the annualaccounts the applicable accounting standards have been followed and there is no materialdepartures from the same; b) The Directors have selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable andprudent so asto give a true and fair view of the state of affairs of the Company as at31.03.2019 and of the profit of the Company for the year ended on that date; c) TheDirectors have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities; d)The Directors have prepared the annual accounts of the Company on a goingconcern' basis; e) The Directors have laid down internal financial controls which arebeing followed by the
Company and that such internal financial controls are adequate and areoperating effectively; and f) The Directors have devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems are adequateand operating.
41. Corporate Governance
A detailed report on Corporate Governance as stipulated underRegulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements)Regulations2015 is appended and forms part of the Board's Report.
42. Statutory Disclosures
Your Directors have made necessary disclosures as required undervarious enactments including the Companies Act 2013 and the SEBI (Listing Obligations& Disclosure Requirements)Regulations 2015.
43. Extract of Annual Return
As per requirement of Section 92(3) of the Companies Act 2013 theextract of the annual return in form MGT-9 is placed at Annexure-D.
44. Particulars of Employees
Your Company being a Government Company the provisions of Section197(12) of the Companies Act 2013 and relevant Rules issued thereunder do not apply inview of the Gazette notification dated 05.06.2015 issued by Government of India Ministryof Corporate Affairs.
The terms and conditions of the appointment of Functional Directors aresubject to the applicable guidelines issued by the Department of Public EnterprisesGovernment of India. The salary and terms and conditions of the appointment of CompanySecretary a Key Managerial Person (KMP) of the Company is in line with the parametersprescribed by the Government of India.
45. Energy Conservation
The information required under section 134(3)(m) of the Companies Act2013 read with the Companies (Accounts) Rules 2014 is annexed as AnnexureE'. 46. Audit Committee
In compliance with Section 177(8) of the Companies Act 2013 thedetails regarding Audit Committee is provided under Corporate Governance report whichforms part of this Annual Report. There is no instance during FY'19 where the Boardhad not accepted any recommendation of the Audit Committee.
The Statutory Auditors of your Company are appointed by the Comptroller& Auditor General of India (C&AG).There were 6 chartered accountants firms namelyM/s. PKF Sridhar & Santhanam LLP M/s. Dass Gupta & Associates M/s. K. C. Mehta& Co. M/s. MKPS & Associates M/s. G M Kapadia & Co. M/s. R Gopal &Associates who were appointed as Joint Statutory Auditors of the Company for the financialyear 2018-19.
The Statutory Auditors have been paid a total remuneration of .52 million towards audit fees certification and other services. The above fees areinclusive of applicable service tax/ GST but exclusive of re-imbursement of travelling andout of pocket expenses actually incurred.
48. Auditors' Report on the Accounts
The comments of Comptroller & Auditor General of India (C&AG)form part of this Report and is attached Annexure F'. There is noqualification in the AuditorsReport on the Financial Statements of the Company.
During the year 2018-19 there has not been any fraud reported by theStatutory Auditors of the Company.
49. Cost Audit
There were 6 cost accountants firms namely M/s. M. Krishnaswamy &Associates M/s. Musib & Co. M/s. Chandra Wadhwa & Co. M/s. BandopadhyayaBhaumik & Co. M/s. N. D. Birla & Co. M/s. Joshi Apte & Associates who wereappointed as Joint Cost Auditors of the Company for the financial year2018-19.Appointments were made by the Board of Directors. The Cost Audit Report for the year2017-18 has been filed under XBRL mode on 29.08.2018 which was well within the due date offiling.
Further the required cost records as specified under the CompaniesAct 2013 are prepared and maintained by the Company.
50. Secretarial Audit
In terms of Section 204(1) of the Companies Act 2013 the Company hasengaged M/s. Ashu Gupta & Co. Company Secretaries in whole-time practice asSecretarial Auditors for conducting Secretarial Compliance Audit for the financial yearended 31.03.2019. Their report has been annexed and forms part of the Annual Report.
The Secretarial Auditor has made observations regarding performanceevaluation of Independent Directors by the entire Board of Directors under Regulation17(10) and evaluation of non-independent directors and the Board of directors as a wholeby Independent Directors under Regulation 25(4)of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
In this regard it is mentioned that the Ministry of Corporate Affairs(MCA) vide notification dated 05.06.2015 notified exemptions to government companies fromprovisions of Section 178(2) (3) and (4) regarding appointment performance evaluationand remuneration to directors of government companies. Further the MCA vide notificationdated 05.07.2017 notified amendment to schedule IV of the Companies Act 2013 providedexemption to government companies with respect to evaluation of performance ofNon-Independent Directors Chairperson and Board. It is learnt that Department of PublicEnterprises has requested to SEBI through Department of Economic Affairs Ministry ofFinance for exemption to government companies regarding performance evaluation ofdirectors as Government of India has independent mechanism for appointment and as well forassessment of performance of whole-time directors government nominee directors andindependent directors.
In respect of observation regarding prior approval of the AuditCommittee for all Related Party Transactions (RPTs) it is mentioned that in line withprovisions of the Companies Act 2013 and SEBI Regulations a policy on RPT has beenframed which can be accessed at https://www.ongcindia.com/wps/wcm/connect/en/investors/ policies/ In terms of RPT Policy all thecontracts/ arrangements/ transactions entered by the Company during FY'19 withrelated parties were in the ordinary course of business and on an arm's length basis.Transactions with related parties have been disclosed as Annexure A' and formspart of this report. SEBI Regulations provide for prior approval of related partytransactions except with government companies and with wholly-owned subsidiaries. In thisregard necessary system is being put-in place to ensure compliances.
a) Policy for Selection and appointment of Directors' and theirremuneration.
Your Company being a Government Company the provisions of Section134(3)(e) of the Companies Act 2013 do not apply in view of the Gazette notificationdated 05.06.2015 issued by Government of India Ministry of Corporate Affairs.
b) Performance Evaluation
The provisions of Section 134(3)(p) of the Companies Act 2013 relatingto evaluation of Board/ Directors do not apply to your Company since necessary exemptionsare provided to all government companies. The Company being a Government Company theprovisions relating to Performance Evaluation of Directors stand exempted. The Departmentof Public Enterprises has taken up with SEBI through the Department of Economic AffairsMinistry of Finance to make suitable amendments in the LODR regulations in line theCompanies Act 2013.
c) Appointments/ Cessation etc.
Since the 25th Annual General Meeting held on 28.09.2018change in composition of Board is as under- i) Shri N. C. Pandey appointed as Director(Technical and Field Services) of the Company w.e.f. 29.10.2018. ii) Dr. Alka Mittalappointed as Director (Human Resources) of the Company w.e.f. 27.11.2018. iii) Dr.Sambit Patra ceased to be an Independent Director of the Company on 23.03.2019 as heresigned due to personal reasons. The Board places on record its appreciation for hiscontribution during his tenure.
The strength of the Board of Directors of the Company as on 31.03.2019was 17 comprising 7 Executive Directors (Functional Directors including CMD) and 10Non-Executive Directors including two Government nominees and 8 Independent Directors.There is vacancy for an Independent Director to meet the requirement under the provisionsof Companies Act 2013 as well as under the Listing Regulations 2015.
Your Directors are highly grateful for all the help guidance andsupport received from the Ministry of Petroleum and Natural Gas Ministry of Finance DPEMCA MEA and other agencies in Central and State Governments. Your Directors acknowledgethe constructive suggestions received from Auditors and Comptroller & Auditor Generalof India and are grateful for their continued support and cooperation.
Your Directors thank all share-owners business partners and allmembers of the ONGC Family for their faith trust and confidence reposed in the Board.
Your Directors wish to place on record their sincere appreciation forthe unstinting efforts and dedicated contributions put in by the ONGCians at all levelsto ensure that the Company continues to grow and excel.
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