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As on: Nov 22, 2018 01:27 AM
Oil & Natural Gas Corpn Ltd
Industry: Oil Drilling / Allied Services
BSE Code ISIN Demat Book Value(Rs) NSE Symbol Mar.Cap(Rs Cr.) P/E(TTM) EPS(TTM) Face Value(Rs)
500312 INE213A01029 158.7089964 ONGC 194744.34 7.69 19.74 5

Dear Members,

It gives me immense pleasure to present, on behalf of the Board of Directors of your Company, the 25th Annual Report on the business and operations of Oil And Natural Gas Corporation Ltd. (ONGC) and its Audited Financial Statements for the year ended March 31, 2018, together with the Auditors' Report and Comments (on the Accounts) of Comptroller and Auditor General (CAG) of India, thereon.

Your Company has steadfastly focussed on organic growth through its exploratory endeavours and built a healthy hydrocarbon reserve profile to sustain growth in future. During FY'18, the Company registered Reserve Replacement Ratio (RRR) of 1.48 (with 2P reserves) and thereby maintaining RRR of more than one in the twelfth consecutive year. Twelve oil and gas discoveries were made in various basins of the country. With these discoveries, your Company accreted reserves (2P) of 67.83 million metric tonnes of oil and oil equivalent gas (MMtoe). This has been possible because of extensive exploration in known basins as well as frontier plays. Two out of 12 discoveries i.e., Mattur West-1/ (Cauvery onland) and Matar-1 (Cambay onland) have already been monetized and these prospects are producing since May 31, 2017 and January 30, 2018 respectively.

Domestic crude oil and natural gas production of your Company along with the share in domestic joint ventures (PSC-JVs) during FY'18 has been 50.04 MMtoe which is about 2.5% higher than FY'17 production (48.80 MMtoe). On standalone basis crude oil production from the Company operated fields has been 22.31 Million Metric Tonnes (MMT) against production of 22.25 MMT during FY'17. Considering the largely mature producing field portfolio, it highlights the Company's prudent reservoir management and effective technological interventions in improving the production. Natural gas production during FY'18 has been 23.48 Billion Cubic Metre (BCM) against 22.09 BCM during FY'17; an increase of 6.3 %. This is a significant achievement as it marks the second consecutive year that the Company has registered an increase in its domestic natural gas output. Your Company's share in domestic Joint Ventures' production was 3.13 MMT of crude oil (3.29 MMT in FY'17) and 1.13 BCM of natural gas (1.18 BCM during FY'17). Combining the two total domestic production has been 25.43 MMT of oil and 24.61 BCM of gas, Production of value added products increased by 4.7%; from 3.24 MMT in FY'17 to 3.39 MMT during the year, with contribution from C2-C3 and Hazira plants in Gujarat and Uran in Maharashtra. All ventures of your Company established for value-chain integration i.e., ONGC Petro additions Ltd (OPaL), ONGC Mangalore Petrochemicals Ltd (OMPL), ONGC Tripura Power Company Ltd (OTPC), Dahej SEZ Ltd (DSEZ) and Mangalore SEZ Ltd (MSEZ) are now operational and started generating revenue.

Major Highlights:

Salient highlights with respect to performance of your Company during FY'18 are as below:

• Your Company made 12 Oil and Gas discoveries; 6 in Onshore and 6 in Offshore. One discovery is in New Exploration and Licencing Policy (NELP) block. Two of these discoveries have already been put to production.

• With these 12 discoveries, your Company accreted 67.83 MMtoe of 2P reserves in the domestic fields.

• RRR (2P) for FY'18 was 1.48; more than One for 12 consecutive years.

• Standalone Oil and Oil equivalent gas (O+OEG) output is 45.79 MMtoe; 3.3% higher than FY'17.

• Onshore crude oil and natural gas production increased by 1.7% and 8.3% respectively.

• Offshore gas production registered an increase of 5.7%.

• Production of Value Added Products increased by 4.7%.

• Revenue from Operations was at Rs 850,041 million against Rs 779,078 million in FY'17.

• Profit After Tax (PAT) was at Rs 199,453 million against Rs 179,000 million during FY'17.

• Acquisition of 51.11% stake in Hindustan Petroleum Corporation Limited (HPCL). With this acquisition, Company's refining capacity increased to 42.198 MMTPA; accounting 18% of country's total refining capacity.

• The highest ever deployment of 37 rigs for offshore operations.

• The highest in last 27 years drilling of 503 wells (119 exploratory and 384 development).

• The overall Cycle Speed and Commercial Speed of exploratory and development drilling achieved during 2017-18 is the highest ever since inception and stood at 997 meter/ rig month and 1616 meter/ rig month respectively. An increase of more than 9% achieved in commercial speed compared to previous year.

• 4 projects worth Rs 68,300 million (approx.) were completed.

Significant development of KG-DWN-98/2 block in Krishna-Godavari (KG) Basin with investment of about USD 5,076 million (approximately Rs 340,000 million) leading to Peak oil production from the field to the extent of 78,000 bpd and natural gas @16 Million Metric Standard Cubic Meter per Day (MMSCMD).

Gas sales increased from 17.06 BCM in FY'17 to 18.58 BCM an increase of 8.9%.

Gas flaring during the year reduced from 2.4% to 1.9%.

Farm-in/ Farm-out (FIFO) agreement signed with GSPC on March 10, 2017 to acquire 80% PI with operatorship in block KG-OSN-2001/3. Acquisition completed on August 04, 2017 with an investment of USD 1,195 million.

Commencement of Coal Bed Methane (CBM) field development operations in Bokaro and North Karanpura blocks in Jharkhand. Operations resumed in Jharia block. Techno-economic analysis was carried out in Raniganj block.

Revenue from Operations of the ONGC Group was Rs 3,622,462 million and Profit After Tax was Rs 221,059 million (attributable to owners) during FY'18.

ONGC Videsh Limited (OVL), a wholly owned subsidiary of your Company, registered highest-ever production of 14.16 MMtoe of O+OEG during the year. It recorded consolidated Revenue from Operations of Rs 104,176 million and consolidated Profit After Tax of Rs 9,815 million, attributable to owners(Rs 7,573 million in FY'17).

Mangalore Refinery and Petrochemicals Limited (MRPL), a subsidiary of your Company, recorded highest-ever throughput of 16.31 MMT during FY'18.

MRPL recorded 6.1% increase in Revenue from Operations to Rs 630,836 million (Rs 594,305 million in FY'17) and Profit After Tax of Rs 22,241 million (Rs 36,437 million in FY'17).

HPCL improved its Gross Refining Margin (GRM) to USD 7.40 per barrel during 2017-18 as compared to GRM of USD 6.20 per barrel in 2016-17._

Global Recognitions

Your Company has been ranked number one E&P Company in the world by Platts Top 250 Global Energy Company Rankings - 2017 and 11th among global energy majors based on assets, revenues, profits and return on invested capital. The leading international business journal Forbes has ranked the Company 3rd largest in India and 246th worldwide based on sales, profit, assets and market value.

Details of new discoveries and new resources:

During the year 2017-18, your Company made 12 discoveries (5 new prospects and 7 new pools) of which 1 was in NELP acreage while other 11 were in Nomination acreages. The major success during the year was an Oil discovery from well WO-24-3 (WO-24-C) which has indicated potential of about 29.74 MMtoe of In-Place Hydrocarbon Volume in the discovery area and the discovery is under further assessment through appraisal exploratory efforts.

Details of these discoveries are as below:

Sl. No. Basin Well No. PEL/PML/ NELP HC Type Prospect / Pool
1 AAFB- Tripura Kunjaban-8 Kunjaban PML Gas Pool
2 AAFB- Cachar Bhubandar-6 Bhubandar PML Gas Pool
3 Cambay Onland West Matar-1 Matar PML Oil Prospect
4 Cambay Onland ANOR-1* CB-ONN-2005/10 Oil Prospect
5 Cauvery Onland Mattur West-1 L-II PML Oil Prospect
6 KG Onland Vedireswaram-1 Godavari Onland PML Gas Pool
7 KG Offshore (SW) GS-29-11 GS-29 EXT PML Oil Pool
8 KG Offshore (SW) G-1-15 Godavari Onland PML Gas Pool
9 KG Offshore (SW) GS-71-2 GS-15/23 PML Oil Pool
10 KG Offshore (DW) GD-10-1 KG-OS-DW-III PEL Gas Prospect
11 KG Offshore (DW) GS-29-8 SUB GS-29 EXT PML Oil Pool
12 Mumbai Offshore (SW) SW-WO-24/ WO-24-3 Mumbai High-S PML Gas Prospect

*NELP

Hydrocarbon Resource Re-assessment:

During the year, your Company was associated with Hydrocarbon Resource Re-assessment studies for all 26 sedimentary basins including Deep-waters. The assessment has since been completed and the reports were submitted to Director General of Hydrocarbons (DGH) on October 31, 2017. Results are encouraging and study points toward enhancement of prognosticated hydrocarbon resources.

National Seismic Program:

Your Company is committed to broaden its exploratory efforts by enhancing the basinal footprint in India. It is the major stakeholder in National Seismic Program (NSP) with 40,835 Line Kilometer (LKM) target out of the total target of 48,243 LKM. The Company has made concerted efforts for fast-track of data acquisition and interpretation. The 2D seismic data acquisition work has already commenced in 10 sectors i.e., Saurashtra, Rajasthan, Mahanadi, Deccan Synclise, Bhima, Kaladgi, Vindhyan and Himalayan Foreland areas in October 2016; Ganga, Cuddapah-Krishna Godavari in June, 2017; and South Rewa Damodar-Chhattisgarh in October 2017. 14,621.16 LKM of 2D data was acquired (besides ONGC's routine 2D/ 3D survey) during FY'18. In total, the Company has acquired 19,655 LKM of data. Processing and interpretation of data is under progress and expected to be completed by 2019-20.

Details of discoveries in NELP blocks

Your Company, as on April 01, 2018, had a total of 74 discoveries to its credit out of which 59 discoveries (18 in deep water, 21 in shallow water and 20 in onland areas) in 26 NELP blocks were made by the Company while remaining 15 discoveries were made by other operators in blocks that were later acquired by the Company. Out of the total 74 discoveries, 12 discoveries made by the Company have been relinquished.

Monetization Status as on April 01, 2018:

Your Company has monetized 6 onshore NELP discoveries in four onshore blocks viz. CB-ONN-2001/1(Nadiad-1), CB-ONN-2002/1 (West Patan-3), CB-ONN-2004/1 (Karannagar-1), CB-ONN-2004/2 (Vadatal-1, Vadatal-3, Vadatal-5) in Cambay Basin in the State of Gujarat.

Three Offshore discoveries viz. KG-08, KG-15, KG-17 in NELP block KG-OSN-2001/3 (recently acquired by ONGC) in KG Offshore have also been monetized.

Other discoveries are under various stages of exploration / assessment / appraisal / development for monetization.

Reserve accretion and Reserve Replacement Ratio (RRR)

Accretion of In-Place hydrocarbons and Ultimate Reserves by the Company in its operated areas and in Non-operated (JV Share) during 2017-18 along with position (as on April 01, 2018) of In-Place hydrocarbons and Ultimate reserves established is as below:

In-Place Hydrocarbon Volumes and Ultimate Reserves of Company operated and JV (Domestic) Fields

Accretion During the year 2017-18 Position as on 01.04.2018
JV-Domestic
Reserve Type Domestic (Operated) (ONGC Share) Total Domestic (Operated) JV-Domestic (ONGC Share) Total
3P 185.84 59.65 245.49 8840.30 1005.03 9845.33
In-Place Hydrocarbon
MMt (O+OEG) 2P 163.78 59.65 223.43 7659.86 925.12 8584.98
3P 57.61 1.02 58.63 3094.17 107.04 3201.21
Ultimate Reserves
MMt (O+OEG) 2P 67.83 1.02 68.85 2827.98 106.49 2934.47

Reserve Replacement Ratio (RRR) on 2P basis during the year has been 1.48.

The following table gives the details of Ultimate Reserve Accretion (2P - Proved and Probable) for the last five years in domestic basins as well as from the overseas assets:

Ultimate Reserves(2P) Accretion (O+OEG)
Year Domestic Asset ONGC Share in domestic JVs Total Domestic (1+2) ONGC Videsh Share in Foreign Assets Total ONGC Group (3+4)
(1) (2) (3) (4) (5)
2013-14 56.26 4.29 60.55 213.24 273.79
2014-15 61.06 -1.03 60.03 20.03 80.06
2015-16 65.58 0.80 66.38 -7.22 59.16
2016-17 64.32 0.22 64.54 120.28 184.82
2017-18 67.83 1.02 68.85 21.56 90.41

Oil and Gas production

On standalone basis, in FY'18 the Company's domestic crude oil production level registered at 22.31 MMt against 22.25 MMt in FY'17. Oil production from onshore assets increased by 1.7% while offshore registered a decline of 0.3%. Increase in onshore oil production was mainly due to various initiatives and early monetization of discoveries in Ankleshwar, Cauvery (Madnam) and Rajahmundry (Keshnapalli West), etc. Onshore Crude Oil production has registered an increase of 4.1% in last 2 years since 2015-16.

This turnaround in production has been achieved through revival of production from old and matured fields, production from new fields including NELP blocks, increase in drilling of development wells, execution of more number of work-over & well stimulation jobs and induction of new technologies.

Natural gas production (from domestic operated fields) during FY'18 has been 6.3% higher than the previous year (23.48 BCM against 22.09 BCM during FY'17). The Company's onshore gas production increased by healthy 8.3% whereas offshore production increased by 5.7%. Onshore gas production increased with all assets recording incremental gas production; substantial gains were in Ankaleshwar, Assam, Rajahmundry and Karaikal.

Incremental gas production in offshore during 2017-18 was from Daman/C-26, Vasishta & S1 Development. Your Company's share in oil and gas production from PSC JVs were 3.13 MMT and 1.13 BCM respectively.

Direct Unit Production Qty Sales Qty Value (Rs in million)
FY'18 FY'17 FY'18 FY'17 FY'18 FY'17
Crude Oil (MMT) 25.43 25.53 23.67 23.86 603,899 548,036
Natural Gas (BCM) 24.61 23.27 19.49 17.94 137,372 139,398
Liquified Petroleum 000 MT 1,187 1,355 1,186 1,352 40,352 37,276
Gas
Naphtha 000 MT 1,176 1,101 1,180 1,087 38,084 30,455
Ethane-Propane 000 MT 356 421 356 420 7,502 8,557
Ethane 000 MT 264 137 264 135 7,050 5,354
Propane 000 MT 194 91 191 87 6,250 2,223
Butane 000 MT 103 31 103 30 3,423 1,131
Superior Kerosene Oil 000 MT 46 36 34 43 1,178 1,321
Others 692 1,112
Sub Total 845,802 774,863
Trading
HSD 000 KL - 0.43 - 20
Motor Spirit 000 KL - 0.21 - 11
Sub Total - 31
Total 845,802 774,894

Production from Overseas Assets by OVL:

During the year, total Oil and Gas production from overseas assets was 14.16 MMtoe of O+OEG (oil: 9.35 MMT; Gas 4.81 BCM) in comparision to 12.80 MMtoe during FY'17 an increase of 10.6% which was mainly due to incremental production from Vankorneft and Sakhalin-1 projects, Russia; BC-10 project, Brazil; additional production from acquisition of 4% stake in the Lower Zakum Concession project in UAE and from exploratory success in Block CPO-5, Colombia. Oil and Gas production of ONGC Group, including PSC-JVs and from overseas assets for FY'18 was 64.21 MMtoe (against 61.62 MMtoe during FY'17) an increase of 4.2%.

Technology Induction/Upgradation

Your Company gives utmost importance for induction, up-gradation and application of technology in various areas of its operations to remain competitive. During the year the following technology were applied/ upgraded/ inducted:

Gas Chromatograph and Resistivity meter with the upgraded version have been installed at KDMIPE, Dehradun. Gas chromatograph will facilitate in exploration by carrying out studies pertaining to metabolites of microbial origin whereas Resistivity Meter will be helpful in determining the realistic formation evaluation of the reservoir.

• Switching over to Techlog Petrophysical Analysis Tools.

• Hardware Virtualization Technology has been inducted using Red Hat Enterprise Linux as well as VMware systems.

• Lustre File System Technology has been adopted in the Seismic Processing domain for the first time.

• Infiniband based Networking Technology has been inducted on the recently installed HPCC in the Seismic Processing domain for the first time.

• Production enhancement through stimulation of tight carbonate reservoirs in wells of western offshore field (implemented by IOGPT), in total 14 wells.

• Innovative techniques for Gas Production enhancement in low gas production wells of Assam/ Tripura/ Mehsana (implemented by IOGPT), in one well of Tripura (RO#8).

• Development of chemical formulation for water shut off in gas wells of ONGC fields and its field execution (executed by IRS, Ahmedabad), in 3 wells during 2017-18.

Exploration in different plays (a) Basement Exploration:

Concerted efforts for Basement Exploration, a frontier exploration play, have been taken up by the Company as a major initiative. During the year, your Company was pursuing Basement exploration across most of the operational areas as a frontier exploration play and drilled 24 wells including 11 wells with primary objective as Basement. Encouraging results have been obtained in wells GK-28-11, N-24-4, N-24-5, HY-11X in Western Offshore, wells Padra-114, 116, 117, 119, 120 in Cambay basin, Khoraghat-42 and BJAB in A&AA basin. Wells BH-76 and SMH-1 drilled in Western Offshore Basin flowed oil from Basement. Cauvery basin is coming up as an important area for Basement Play with encouraging results in Mattur West-I and Pundi-8. For the development of discoveries in Basement play, Field Development Plan (FDP) of Pandanallur field has been approved and FDP implementation will begin in FY'19.

(b) Exploration in HP-HT and Tight Reservoir:

The Company has prioritized HP-HT/ Tight/ Deeper plays in KG, Cauvery, Western Offshore Basin and Assam and Arakan Fold belt. These plays are deep, difficult to drill, test and produce from. During the year 2017-18, onland well PD-3 in Periyakudi field, Cauvery Basin became the first HP-HT well to be put on production. Another well BTS-3 in KG onland Basin has been successfully drilled and tested for gas in commercial quantities. The development drilling will be taken up in 2018-19. In addition, the Company after acquiring the operatorship of NELP block KG-ONN-2003/1 has submitted the FDP of two discoveries made in the block. Further, the Company acquired 80% stake and operatorship from Gujarat State Petroleum Corporation Limited (GSPCL) in the block KG-OSN-2001/3. The field is already on production and FDP is under preparation for six more monetized discoveries in the Block.

Unconventional and Alternate sources of energy

Your Company is well focused on exploration and development of unconventional like - Shale (CBM), High Pressure/ High Temperature (HP/HT), Fractured

Basement plays, etc. and alternate sources of energy. Structured actions have been initiated to increase the share of unconventional/ alternate energy in the production portfolio.

(a) Shale Gas/ Oil Exploration:

The Company has firmed up a programme to explore for shale gas/ oil in 50 Nominated ML blocks (28 in Cambay, 10 in KG, 9 in Cauvery and 3 in A&AA basins). 23 Assessment wells have been drilled so far and prospects have been established in Cambay and KG basin. Drilling of more wells (both exclusive and dual objective) are planned in North Cambay and KG Basins in future, for better understanding and assessment. The areas planned to be covered include Nawagam, Kalol, Linch in north Cambay Basin; Mandapeta and Mahadevapatnam etc. in Krishna Godavari Basin.

(b) Coal Bed Methane (CBM):

Your Company is operating in four CBM Blocks i.e. Jharia, Bokaro and North Karanpura in Jharkhand and Raniganj in West Bengal. FDP for Bokaro and North Karanpura Blocks have been approved. Details regarding various activities undertaken in these blocks are as under:

1. Bokaro Block: Drilling of 141 development wells has been considered in the FDP of Bokaro Block. Five wells have been drilled successfully and drilling of sixth well is in progress. 10 more well sites are earmarked and total 30 wells are planned to be drilled during 2018-19.

2. North Karanpura Block: Total 68 development wells have been considered in the FDP of North Karanpura Block. 30 wells are planned to be drilled during 2018-19.

3. Jharia Block: After receiving permission from DGMS, operations have been resumed Since March'18 by hydro-fracturing and testing of already drilled well JH#14. Around 10,000 - 15,000 SCMD of incidental Gas is being sold and the sales is planned to be ramped up with production in this Block. Revised Feasibility Report has been prepared after discounting 12 wells in line with co-development plan which is under vetting by independent Financial Institution and consent of JV partner Coal India Limited is being obtained on the Feasibility report. Agreement has been entered into with gas off-taker at a price of 6.12 USD/MMBTU on GCV basis for 10,000 SCMD.

4. Raniganj Block: Techno-economic analysis for monetization of the block has been carried out and efforts are underway for economizing production cost.

(c) Gas Hydrates

Your Company has been an active participant in gas hydrates exploratory research in the country under National Gas Hydrate Program (NGHP) of the Government of India (GoI) since 1997. The results of NGHP-02 are very encouraging and two gas hydrate reservoirs have been discovered in KG deep offshore. For a deep focus, your Company has established a Gas Hydrate Research & Technology Centre (GHRTC) at Panvel, Maharashtra for production and exploitation of gas hydrates. Further, the Company is looking forward to NGHP Expedition-03 to test the technology and assess the production technology for Gas Hydrates exploitation in Indian offshore.

(d) Alternate Sources of Energy

Hazira Plant has installed 10 MWp Solar Power Plant in line with its commitment towards generation of Renewable Energy and is in operation. Dahej Plant has also taken initiatives for implementing 500 KW roof top solar power project.

Earlier, as a step towards green energy by harnessing natural resources with latest technologies, Hazira Plant has commissioned a 40 KWp Solar Power Plant in Kendriya Vidyalaya in ONGC township and Uran Plant had installed a 125 KWp Solar Power Plant at roof top of reservoir.

Oil & Gas Projects

(a) Project Competed during FY'18

During the year 2017-18, following 04 major projects (2 development and 2 Infrastructure) have been completed:

Sl. No Project Name Completion date Approved cost (Rs in million) Envisaged Oil Gain (MMT) Envisaged Gas Gain (BCM)
1 Construction of 3 ETP at Rajahmundry 28.06.2017 1,480.00 - -
2 Sonamura GGS and Pipeline Project, Tripura 31.01.2018 2,153.80 - -
3 Development of Western Periphery of MHS 23.02.2018 7409.90 0.933 0.149
4 Integrated Development of Vasistha & S-1 Fields 31.03.2018 57,255.00 - 14.611
Total 68,298.70 0.933 14.76

(b) Fast track monetization of Marginal Fields

Your Company is developing new and marginal fields on fast track to augment the oil and gas production. It is pertinent to mention that many marginal fields in western offshore which were not techno-economically viable for exploitation earlier on standalone basis are now being developed with cluster concept. Some of the marginal fields were put on production in the last few years include NBP (D-1) with its additional development, Vasai West, Vasai East with its additional development, North Tapti, BHE, SB-14, WO-16, Cluster-7 fields, B-46 Cluster fields, C-24 & C-26 Cluster fields, B-22 Cluster fields and B-193 Cluster fields etc. Production from Integrated Development of Mukta, Bassein and Panna Formations in Bassein field and Daman Development projects has commenced and would contribute further with drilling of more wells under these projects. Also, production has commenced from B127 cluster from May 2018.

Further, development of NW B-173A field, 4th Phase Development of NBP field, Development of R-Series fields including revival of R-12 (Ratna), Development of B-147 field & Development of BSE-11 Block are under various stages of implementation.

(c) Development of fields in Eastern Offshore

Major thrust is being given to develop discoveries made in the Krishna Godavari basin which is a promising basin with various discoveries like G1/GS-15, Vasishtha, S1, GS-29 and KG-DWN-98/2, etc.

Your Company has been vigorously pursuing to develop these fields as early as possible. The production from shallow water field GS-15 and deep water field G-1 has already commenced. Project "Integrated Development of Vasistha & S-1 Fields" has been completed in March 2018 and is aimed to contribute 14.61 BCM of gas by year 2026-27. Further, to boost up oil and gas production from Eastern Offshore, one mega project for development of cluster 2 fields of NELP Block KG-DWN-98/2" is under implementation and envisages production of 25.87 MMT of oil and 45.49 BCM of gas by 2034-35.

Development of other discoveries in KG offshore such as KG-DWN-98/2 (Cluster-I and III fields), GS-49 and GS-29, G-4-6 fields, shallow water NELP block KG-OSN-2004/1, etc. are under various stages of appraisal/ approval for development.

1. Financial Highlights:

Your Company has earned Profit After Tax (PAT) of Rs 199,453 million, up by 11.4% over FY'17 (Rs 179,000 million) and registered Revenue from Operations of Rs 850,041 million, up by 9.10% over FY'17 (Rs 779,078 million).

Highlights – Standalone Financial Statements

Revenue from Operations : Rs 850,041 million
Profit After Tax (PAT) : Rs 199,453 million
Contribution to Exchequer : Rs 376,088 million
Return on Capital Employed : 27.04%
Debt-Equity Ratio : 0.13:1
Earnings/ Share : Rs 15.54
Book Value/ Share : Rs 151

 

Rs in million
Particulars 2017-18 2016-17
Revenue from operations 850,041 779,078
Other Income 78,836 76,763
Total Revenue 928,877 855,841
Profit Before Interest
448,712 386,267
Depreciation & Tax (PBIDT)
Profit Before Tax (PBT) 288,925 252,155
Profit After Tax (PAT) 199,453 179,000
Transfer to General Reserves 110,290 64,466

2. Dividend

Your Company has paid interim dividend of Rs 5.25 per share of Rs 5 each (105%) in two times (Rs 3.00 and Rs 2.25).

The Board of Directors has recommended a final dividend of Rs 1.35 per share (27%), making the aggregate dividend at Rs 6.60 per share (132%) for FY'18. The total dividend for the year aggregates to Rs 84,699 million, besides Rs 17,277 million applicable Dividend Distribution Tax (DDT) which is 51.13 % of PAT (inclusive of DDT). The Dividend Distribution policy as formulated by the Company, may be accessed at the web link https://www.ongcindia.com/wps/wcm/connect/en/investors/ policies

3. Management Discussion and Analysis Report

As per the terms of regulations 34(2)(e) of the SEBI Listing Regulations, the Management Discussion and Analysis Report (MDAR) as appended, forms part of this Annual Report.

4. Financial Accounting

The Financial Statements have been prepared in compliance with Indian Accounting Standards (Ind-AS) issued by the Institute of Chartered Accountants of India (ICAI) effective from April 01, 2016 and applicable provisions of the Companies Act, 2013.

5. 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 the Companies Act, 2013. Accordingly, the details of loans given, investment made or guarantee or security given by the Company to subsidiaries and associates is not reported.

6. Detail relating to deposits covered under Chapter V of the Act:

Particulars Amount (in Rs )
Deposits accepted during the years Nil
Deposits remaining unpaid or unclaimed as at the end of the year Nil
Default in repayment of deposit or payment of interest thereon during the year Nil

7. Related Party Transaction

Particulars of contracts or arrangements with related parties as referred to in Section 188(1) of the Companies Act, 2013, is provided in specified Form AOC-2, and placed at Annexure-A.

8. Subsidiaries

Your Company has acquired 51.11% shares held by the President of India (778,845,375 equity shares of face value

Rs 10 each) in Hindustan Petroleum Corporation Limited (HPCL) on January 31, 2018, for a total cash consideration of Rs 369,150 million. Upon the acquisition, HPCL has become a subsidiary of your Company. Upon the acquisition of HPCL, Petronet MHB Limited has been reclassified from joint venture company to a subsidiary company as total shareholding of your Company increased to 65.44% i.e. 32.72% shares each by the Company and HPCL.

Further, the subsidiaries of HPCL, viz. Prize Petroleum Company Limited, HPCL Bio Fuel Limited, HPCL Rajasthan Refinery Limited and HPCL Middle East FZCO have become indirect subsidiaries of your Company.

The details of Subsidiaries are as under:

(I) ONGC Videsh Limited (OVL)

OVL, the wholly-owned subsidiary of your Company for E&P activities outside India, has participation in 41 oil and gas projects in 20 Countries, viz. Azerbaijan (2 projects), Bangladesh (2 Projects), Brazil (2 projects), Colombia (7 projects), Iran (1 project), Iraq (1 project), Israel (1 project), Kazakhstan (1 project), Libya (1 project), Mozambique (1 Project), Myanmar (6 projects), Namibia (1 project), New Zealand (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 41 projects, OVL is Operator in 14 projects; Joint Operator in 7 projects and remaining 20 are non-operated projects. During the year, OVL set its foot-prints in Israel, Namibia and UAE. OVL adopts a balanced portfolio approach and has a combination of 15 producing, 4 discovered/ under development, 18 exploration projects and 4 pipeline projects.

During FY'18, OVL has made the consolidated Profit After Tax of Rs 9,815 million attributable to owners as compared to the consolidated Profit After Tax of Rs 7,573 million attributable to owners during FY'17. Increase in profit is mainly on account of higher production, higher crude oil prices and lower impairment provisions. a. Significant Acquisitions and Alliances of OVL during FY'18:

ONGC Videsh Vankorneft Pte. Ltd (OVVL), a wholly-owned indirect subsidiary of OVL, has completed acquisition of 30% Participating Interest (PI) in Namibia Petroleum Exploration License 0037 for Blocks 2112A, 2012B and 2113B on October 3, 2017 from Tullow Namibia Limited (Tullow), a wholly owned subsidiary of Tullow Oil plc. Tullow with its remaining 35% PI shall continue to be the operator of the License.

OVL led Indian Consortium including Indian Oil Corporation Limited (IOCL) and Bharat Petro Resources Limited (BPRL) acquired 10% PI in Lower Zakum Concession, Offshore Abu Dhabi. The production from the field was around 419,000 bopd and the share of production to Indian Consortium was around 42,000 bopd and OVL share was around 16,800 bopd.

An Exploration Block with License 412/"32" in Israel has been awarded by Petroleum Commissioner to Indian Consortium on March 27, 2018 with exploration duration of 3 years. OVL is the operator and each Partner of the Indian Consortium, i.e. OVL, BPRL, IOCL and OIL hold 25% Participating Interest (PI) each in the License.

b. During FY'18, OVL has signed the following Memorandum of Understanding (MoUs):

i. MoU with TPAO, Turkey:

OVL has signed an MoU with TPAO on July 12, 2017 to evaluate Oil and Gas opportunities in upstream as well as any other mutually identified and agreed area.

ii. MOU with PEMEX, Mexico: Earlier a MoU was signed between PEMEX Exploration and Production and OVL on September 25, 2014. Term of this MoU has been extended till September 24, 2019, by an amendment to the original MoU. The MoU aims at cooperation in the upstream sector in Mexico, India and third countries, and Cooperation in fields of technology, human resource, research and development.

iii. MoU with GeoPark, Latin America:

OVL_and_GeoPark Ltd., a Latin America focused E&P Company, entered into an MoU on 16th February, 2018 for Cooperation in upstream sector in Latin America. The MoU envisages a long term strategic partnership between the companies to jointly acquire, invest in, and create value from upstream oil and gas projects with the objective of building a large-scale, economically-profitable and risk-balanced portfolio of assets and operations across Latin America.

c. During FY'18, the following significant events occurred in the area of Exploration & Operations:

i. CPO-5, Colombia: -

The well Mariposa-1 was drilled to a total depth of 11,556 feet (MD) and log analysis indicated the presence of approximately 121 feet of oil saturated net pay in the Lower Sands Unit. The well is currently under testing and activated on self. The discovery has opened up new play in CPO-5 block and more wells are likely to be drilled for the play.

ii. Sakhalin-1, Russia: - 30 years extension to the Production Sharing Agreement (PSA) of Sakhalin-1 block has been granted from 2021 to 2051. Sakhalin-1 completed World's Longest Extended Reach Drilling (ERD) well #O5RD with measured depth of 15,000 metre on June 30, 2017.

iii. ACG, Azerbaijan: - Consortium partners of the giant ACG Fields in Azerbaijan have entered into an agreement with Azerbaijan Government and State Oil Company of the Azerbaijan Republic (SOCAR) for extension of the Production Sharing Agreement (PSA) extension for Azeri-Chirag-Deep water portion of Guneshli (ACG) oil fields until December 31, 2049.

iv. Rovuma Area-1 Project, Mozambique: -

Government of Mozambique has accorded approval for the Development Plan for Golfinho-Atum natural gas field in the Area 1 block located in the Rovuma Offshore Basin of Mozambique. The plan outlines the integrated development of the Golfinho-Atum field through an initial two-train onshore liquefaction plant with a total processing capacity of 12.88 MMTPA.

Direct Subsidiaries and Joint Ventures of OVL:

1. ONGC Nile Ganga B.V. (ONGBV): ONGBV is engaged in E&P activities directly or through its subsidiaries/ JVs in Sudan, South Sudan, Syria, Venezuela, Brazil and Myanmar. ONGBV holds 25% PI in Greater Nile Oil Project (GNOP), Sudan with its share of oil production of about 0.282 MMT during FY'18. ONGBV also holds 25% PI in Greater Pioneer Operating Company (GPOC), South

Sudan. Due to adverse geo-political conditions, ONGC Videsh could not produce in GPOC, South Sudan during FY'18. ONGBV holds 16.66% to 18.75% PI in four Production Sharing Contracts in Al Furat Project (AFPC), Syria. Due to force majeure conditions in Syria, there was no production in AFPC project during FY'18. ONGBV holds 40% PI in San Cristobal Project in Venezuela through its wholly owned subsidiary ONGC Nile Ganga (San Cristobal) BV with its share of O+OEG production of about 0.389 MMtoe during FY'18. ONGBV holds 27% PI in BC-10 Project in Brazil through its wholly owned subsidiary ONGC Campos Ltd. with its share of oil and oil equivalent gas production of about 0.704 MMtoe during FY'18. _ It also holds 25% PI in Block BM-SEAL-4 located in deep-water offshore, Brazil through its wholly owned subsidiary ONGC Campos Ltda. ONGBV also holds 8.347% PI in South East Asia Gas Pipeline Co. Ltd., (SEAGP) for onshore Pipeline project, Myanmar through its wholly owned subsidiary ONGC Caspian E&P B.V.

San Cristobal Project: Consequent to the signing of Agreements on Pending Payments and Financing of San Cristobal project for remediation plan between PdVSA and ONGC Nile Ganga (San Cristobal) BV on November 04, 2016, PdVSA has paid USD 88.42 million till March 2018 to liquidate partly the outstanding dividend due from the JV Petrolera IndoVenezolana S.A.(PIVSA).

2. ONGC Narmada Limited (ONL): ONL has been retained for acquisition of future E&P projects in Nigeria.

3. ONGC Amazon Alaknanda Limited (OAAL):

OAAL, a wholly-owned subsidiary of OVL, holds stake in E&P projects in Colombia, through Mansarovar Energy Colombia Limited (MECL), a 50:50 joint venture company with Sinopec of China. During FY' 18, ONGC Videsh's share of oil and oil equivalent gas production in MECL was about 0.487 MMtoe.

4. Imperial Energy Limited (IEL): IEL, a wholly-owned subsidiary of OVL incorporated in Cyprus, has its main activities in the Tomsk region of Western Siberia, Russia. _ During FY'18, Imperial Energy's oil and oil equivalent gas production was about 0.294 MMtoe.

5. Carabobo One AB: Carabobo One AB, is incorporated in Sweden, indirectly holds 11% PI in Carabobo-1 Project, Venezuela. During FY'18, ONGC Videsh's share of oil and oil equivalent gas production was about 0.169 MMtoe.

6. ONGC BTC Limited: ONGC BTC Limited holds 2.36% interest in the Baku-TbilisiCeyhan Pipeline ("BTC") which owns and operates 1,768 km oil pipeline running through Azerbaijan, Georgia and Turkey. The pipeline mainly carry crude from the ACG fields from Azerbaijan to the Mediterranean Sea.

7. Beas Rovuma Energy Mozambique Limited (BREML): BREML was incorporated in British Virgin Islands (BVI) and has been migrated by continuation to Mauritius w.e.f. January 23, 2018. OVL holds 60% shares in BREML and the balance 40% are held by OIL, BREML holds 10% PI in Rovuma Area 1, Mozambique.

8. ONGC Videsh Atlantic Inc. (OVAI): OVL has setup a Geological and Geophysical (G&G) Centre at Houston, USA through its wholly owned subsidiary OVAI. The Centre caters to requirement of G&G studies for potential new acquisitions of ONGC Videsh including G&G studies of its existing portfolio of projects.

9. ONGC Videsh Rovuma Limited (OVRL): OVRL a wholly owned subsidiary of OVL was incorporated in Mauritius for re-structuring of 10% PI in Rovuma Area 1, Mozambique.

10. ONGC Videsh Singapore Pte. Ltd. (OVSL): OVSL was incorporated in Singapore for acquisition of 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 during FY'18 was 6.191 MMtoe.

11. Indus East Mediterranean Exploration Ltd. (IEMEL): IEMEL, a wholly owned subsidiary of OVL was incorporated in Israel on February 27, 2018 and engaged in E&P activities related to Block-32, Offshore Israel.

12. ONGC Mittal Energy Limited (OMEL): OVL along with Mittal Investments Sarl (MIS) promoted OMEL, a joint venture company incorporated in Cyprus. OVL and MIS together hold 98% equity shares of OMEL in the ratio of 49.98:48.02 remaining 2% shares are held by SBI Capital Markets Ltd.

13. SUDD Petroleum Operating Company (SPOC): SPOC, a Joint Operating Company incorporated in South Sudan to operate in Block 5A, South Sudan in which OVL, Petronas & Nilepet of South Sudan holds 24.125%, 67.875% & 8% PI respectively. Block 5A is located in the prolific Muglad basin and spread over an area of about 20,917 Square Km.

14. Mozambique LNG1 Company Pte. Ltd.:

Mozambique LNG1 Company Pte. Ltd. has been incorporated at Singapore by Rovuma Area-1 Mozambique consortium to oversee marketing and shipping activities of LNG from first 2 trains of Golfinho-Atum field. OVL holds 16% interest in the Company which is in proportion to its interest in Rovuma Area-1 Project, Mozambique.

15. Falcon Oil & Gas B.V. (FOGBV): FOGBV was incorporated in Netherlands on February 06, 2018. OVL's wholly owned subsidiary ONGBV holds 40% shares in FOGBV and IOC and BPRL holds 30% shares each though their respective subsidiaries. The transaction documents were executed with ADNOC, Supreme Petroleum Council (SPC) and the Operating Company (OPCO) on February 10, 2018 at Abu Dhabi for acquiring 10% PI in Lower Zakum Concession for a period of 40 years with effect from March 09, 2018.

(II) M angalore Refinery and Petrochemicals

Limited (MRPL)

MRPL was incorporated on March 07, 1988. Your Company continues to hold 71.63 % equity stake in MRPL, a Schedule ‘A' Mini Ratna and listed entity, which is a single location 15 MMTPA Refinery on the West coast. Further, HPCL, another subsidiary of your Company, also continues to hold 16.96% in MRPL.

Performance Highlights FY' 18

MRPL achieved the highest-ever thru'put of 16.31 MMT in FY'18 against 16.27 MMT in FY'17 and recorded the Revenue from Operations of Rs 630,836 million and Profit After Tax of Rs 22,241 million. The Board of MRPL has recommended a dividend of Rs 3/- per share (30% of the paid up capital) for the approval of shareholders in the general meeting.

Marketing & Retail Operations

MRPL continues to maintain major share of the direct sales segment of petroleum products market in Karnataka and adjoining states and maintained leadership position in the marketing zone for direct sales of products such as Bitumen, Fuel Oil, Diesel, Sulphur, Petcoke, Xylol (Xylenes) etc. MRPL has commenced diesel supplies directly to new Railway Consumer Depots during the period and has also expanded its retail network. The total domestic sales volume of all products during the FY'18 has been 1786 TMT. MRPL continues to enhance its market share for Polypropylene with introduction of new and niche grades and also has made in–roads in new geographical areas.

Future Projects

MRPL has taken up the enhancement of the Refinery capacity to 18/25 MMTPA with low cost revamping. The Government of Karnataka has allotted 1050 acres of land for this purpose. Necessary steps are being taken to ensure compliance with BS- VI fuel quality standards by the year 2020.

ONGC Mangalore Petrochemicals Limited (OMPL)

OMPL has been promoted by the Company for setting up Aromatic Complex with an annual capacity 914 KTPA of Para-xylene and 283 KTPA of Benzene in Mangalore Special Economic Zone as value chain integration project. The project, established at the total outlay of Rs 69,110 million, commenced commercial operations on October 01, 2014. OMPL is consistently increasing its capacity utilization with average capacity utilization of around 88% in FY'18.

OMPL is a subsidiary of your Company as it holds 48.998% shares directly and remaining 51.002% shares are held by MRPL.

(III) Hindustan Petroleum Corporation Limited (HPCL)

Your Company acquired 51.11% equity shares of HPCL from GoI on January 31, 2018 and thereby HPCL became a subsidiary.

HPCL owns and operates 2 major refineries producing a wide variety of petroleum fuels and specialties, one in_ Mumbai_ (West Coast) of_ 7.5_ Million Metric Tonnes Per Annum (MMTPA) capacity and the other in_ Visakhapatnam, (East Coast) with a capacity of_8.3_MMTPA. HPCL also owns and operates the largest Lube Refinery in the country producing Lube Base Oils of international standards, with a capacity of 428 TMT.

This Lube Refinery accounts for over 40% of the India's total Lube Base Oil production. HPCL in collaboration with Mittal Energy Investments Pte. Ltd. is operating a 9 MMTPA capacity Refinery at Bathinda with 49% equity and also holds an equity of 16.96% in the MRPL having refining capacity of 15 MMTPA.

HPCL has the second largest share of product pipelines in India with a pipeline network of more than 3370 kms for transportation of petroleum products and a vast marketing network consisting of 21 Zonal offices in major cities and 128 Regional Offices facilitated by a Supply and Distribution infrastructure comprising Terminals, Pipeline networks, Aviation Service Stations, LPG Bottling Plants, Inland Relay Depots & Retail Outlets, Lube and LPG Distributorships.

HPCL has recorded Sales Revenue of Rs 2,432,267 million and the Profit After Tax is Rs 63,571 million for the year 2017-18.

Subsidiaries of HPCL i) Prize Petroleum Company Limited (PPCL)

PPCL is a wholly owned subsidiary of HPCL. PPCL is the upstream arm of HPCL and is in the business of Exploration and Production (E&P) of Hydrocarbons as well as providing services for management of E&P blocks. During 2017-18, PPCL achieved total production of 33,752 barrels of crude oil from domestic oil field at Hirapur (Gujarat). PPCL has a wholly owned subsidiary namely Prize Petroleum International Pte Ltd. (PPIPL), incorporated in Singapore. PPIPL holds 11.25% PI and 9.75% PI in two E&P blocks - T/L1 and T/18P respectively in Australia. PPIPL has achieved its share of production of 459,269 BOE (Barrels of Oil Equivalent) from Yolla producing field (T/L1). During 2017-18, PPCL has achieved total revenue of Rs 1,063 million on consolidated basis as compared to Rs 865 million achieved during previous year.

ii) HPCL Bio Fuel Limited

HPCL Biofuels Ltd (HBL) is a wholly owned subsidiary of HPCL as a backward integration initiative to foray into manufacturing of ethanol for blending in petrol. HBL presently has two integrated Sugar-Ethanol-Cogeneration plants at Sugauli and Lauriya in the state of Bihar. During 2017-18, HBL has recorded total revenue of Rs 1,365 million and cane crushing of 699 TMT with average sugar recovery of 9.04%. HBL also achieved sugar production of 63,870 MT, Ethanol production of 7,025 KL and power production of 79,085 MWh during 2017-18.

iii) HPCL Rajasthan Refinery Limited (HRRL)

HRRL is a joint venture of the HPCL and the Government of Rajasthan with equity participation of 74% and 26% respectively. HRRL is setting up a 9 MMTPA capacity Greenfield refinery cum petrochemical complex in the state of Rajasthan. HPCL and the Government of Rajasthan entered into a revised Memorandum of Understanding on April 18, 2017 for the construction of the said Refinery with revised parameters. The revised Joint Venture Agreement was signed on August 17, 2017. The work commencement ceremony of the 9 MMTPA Rajasthan Refinery was carried out by the Honourable Prime Minister of India on January 16, 2018. The pre-project activities for the project are in advanced stage. The cost of project is estimated to be Rs 431,290 million.

(iv) HPCL Middle East FZCO

HPCL Middle East FZCO, a 100% Subsidiary of HPCL was incorporated on February 11, 2018 as a free zone company under Dubai Airport Free Zone and Establishment Card was issued on March 22, 2018 for the company. HPCL Middle East FZCO was established for trading of lubricants and greases, petrochemicals and refined petroleum products. The subsidiary will serve the select markets of Middle East and Africa.

(IV) Petronet MHB Limited (PMHBL)

Upon acquisition of controlling interest in the capital of HPCL on January 31, 2018, PMHBL has become a subsidiary of your Company. Both the Company and HPCL hold 65.44% (each 32.72%) in the capital of PMHBL. Balance 34.56 % of equity being held by banks/ Financial Institutions.

PMHBL owns and operates a multi–product pipeline to transport MRPL's products to the hinterland of Karnataka. In FY'18 PMHBL pipeline has achieved a throughput of 3.5 MMT against total throughput of 3.43 MMT last year and declaring a maiden interim dividend of 9% in 2017-18. PMHBL has recorded total Revenue of Rs 1,711 million as compared to Rs 1,702 million in the previous year. Further, the Profit After Tax of PMHBL was Rs 835 million in financial year 2017-18 as compared to Rs 810 million in the previous financial year.

9. Annual Report of Subsidiaries and Consolidated Financial Statement

The Consolidated Financial Statements for the year ended 31st March, 2018 of your Company has been prepared in accordance with Section 134 of the Companies Act, 2013, Ind AS 103 "Business Combinations" as per Pooling of Interest Method, Ind AS 110 "Consolidated Financial Statements" and Ind AS 28 "Investments in Associates and Joint Ventures". The audited Consolidated Financial Statements for the year ended 31st March, 2018 form part of this Annual Report.

Full Annual Reports of subsidiaries of your Company will be made available to any shareholder upon request, which is also available on Company's website. Further, Annual Reports of OVL, MRPL, HPCL and PMHBL are also available on websites www.ongcvidesh.com; www.mrpl.co.in; www.hindustanpetroleum.com and www.petronetmhbl.com respectively.

10. Associates including Joint Ventures a) Pawan Hans Limited (PHL)

PHL, an Associates of the Company (49%) was formed with the Government. of India (51%), acting through Ministry of Civil Aviation inter –alia for catering to the logistic requirements of oil fields located at remote/ far-flung areas. PHL is a Mini Ratna - I Category PSU and having 43 helicopters including medi- chopper.

The Government of India is taking action for identifying a strategic acquirer for its entire holding and hence, your Company has also decided to exit PHL along with the Government.

b) Petronet LNG Limited (PLL)

PLL, a JV of the Company was incorporated on April 02, 1998 with 12.5% equity holding along with identical stakes held by other Oil PSU co-promoters viz., IOCL, GAIL and BPCL, is a listed Company. PLL, one of the fastest growing world-class companies in the Indian energy sector, has set up the country's first LNG receiving and regasification terminal at Dahej, Gujarat, and another terminal at Kochi, Kerala. While the Dahej terminal has a nominal capacity of 15 MMTPA, the Kochi terminal has a capacity of 5 MMTPA.

Revenue from Operations of PLL during FY'18 was Rs 305,986 million and Profit After Tax was Rs 20,778 million.

c) Dahej SEZ Limited (DSL)

DSL a 50:50 JV of the Company along with Gujarat Industrial Development Corporation was formed for establishing a multi-product SEZ at Dahej. Your Company has set up C2-C3 Extraction Plant as a value-chain integration project, which serve as feeder unit to ONGC Petro- additions Limited.

Revenue from Operations of DSL during FY'18 was Rs 541 million, Profit After Tax was Rs 369 million.

d) ONGC Tripura Power Company Limited (OTPC)

OTPC was incorporated on September 27, 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 with India Infrastructure Fund – II acting through IDFC alternatives Limited. OTPC has set up a 726.6 MW gas based Combined Cycle Power Plant at Palatana, Tripura at a project cost of Rs 40,470 million. The basic objective of the project is to monetize idle gas assets of the Company in landlocked Tripura State and to boost exploratory efforts in the region.

Power evacuation for both the units is done through 663 KM long 400 KV double circuit transmission network by North-East Transmission Company Limited (NETC), a joint venture of Power Grid Corporation, OTPC and Governments of the North-Eastern states.

OTPC's both power units of 363.3 MW each are fully operational in two phases.

Revenue from Operations of OTPC during FY'18 was Rs 12,516 million and Profit After Tax was Rs 1,251 million.

e) Mangalore SEZ Limited (MSEZL)

MSEZ, a Special Economic Zone promoted by the Company with an equity stake of 26% along with KIADB (23%), IL&FS (50%), OMPL (0.96%) and KCCI (0.04%). MSEZ, was set up as zone for development of necessary infrastructure to facilitate and locate industrial establishment including OMPL. MSEZ is operational since April 01, 2015. With investments exceeding USD 2 billion and exports of over USD 400 million worth of goods from its units, MSEZ has emerged as one of the most vibrant operational multi-product SEZs in India.

f) ONGC Petro additions Limited (OPaL)

OPaL, a JV formed by the Company (26%) along with GAIL (8.85%) and with a nominal investment by GSPC was incorporated on November 15, 2006. The balance equity is to be tied up with Strategic Partners/ FIs or allotted through IPO. Presently the equity gap is bridged through quasi equity instruments – Compulsorily Convertible Debentures and Short Term Loan. OPaL is a mega petrochemical project established in Dahej SEZ for utilizing in-house production of C2-C3 and Naphtha from the nearby unit of the Company. The project cost of OPaL at completion was Rs 308,260 million. OPaL has started its production in 2016-17 and has been ramping up its production in phases. OPaL has established itself in domestic/ export market with sale of prime grade products.

g) ONGC TERI Biotech Limited (OTBL)

OTBL, a JV formed by the Company (49.98%) along with The Energy Research Institute (48.02%) and the balance 2% shares are held by individuals.

OTBL has developed various Biotechnical Solutions to oil and gas Industries 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) which are being provided to oil and Gas industries both in India and abroad. Revenue from Operations of OTBL during FY'18 was Rs 178 million and Profit After Tax was Rs 81 million.

11. Other Business Initiatives, Important MoUs/ Agreements

a. Re-assessment of Hydrocarbon Resources, KDMIPE, Dehradun

Your Company has completed the prestigious project on "Re-assessment of hydrocarbon resources of sedimentary basins and deep water areas of India" in association with Oil India Ltd. (OIL) and DGH before scheduled time. The feasibility reports were reviewed by International Experts, representatives of DGH and OIL and were submitted to DGH on January 31, 2017. The prognosticated hydrocarbon resources estimation of the country for 26 sedimentary basins and offshore areas has shown a significant increase on this reassessment.

b. Gas Supply at Ceiling price from Deep water fields: Under the second tender for S1-Vashishta gas, for the first time, 45,000 SCMD of deep water gas to one consumer was tied up at ceiling Price.

c. Modified Evacuation Plan for KG DWN 98/2 Gas: A changed methodology has been finalized to bring part of the upcoming KG DWN 98/2 gas to another landfall point i.e. Mallawaram in view of connectivity to EWPL (East west pipeline) to enable this gas to reach PAN India customers and also utilization of Onshore Gas Terminal at Mallawaram, acquired from GSPC.

d. FIFO Agreement with GSPC: Gas Sale &

Purchase Agreement (GSPA) was executed on June 01, 2017 between GSPC (as the gas producer) and GSPC (as the buyer) in line with the Farm in Farm out agreement (FIFO) with respect to contract area identified as block KG-OSN-2001/3. Subsequently, the GSA was novated to the Company by signing of the Novation Agreement on August 04, 2017.

e. HFHSD & LSHS

At Hazira, a NGL fractionation unit has been commissioned which will produce new products such as HFHSD (High Flash High Speed Diesel) and LSHS (Low Sulphur Heavy Stock). At Tatipaka mini refinery also HFHSD production has started and sample has been tested at HPCL, Vizag. Sale arrangement for HFHSD ex-Hazira and Tatipaka and LSHS ex-Hazira has been finalized with HPCL. HPCL was awarded LSHS ex – Tatipaka supply extension on September 05, 2017. f. C2-C3

NegotiationsonC2-C3pricingmechanismforproduct supply from Uran with RIL resulted in product price improvement. New pricing methodology for C2-C3 ex – Uran supply to RIL was signed on November 28, 2017, effective from April 01, 2017 till the validity of contract i.e. March 31, 2020.

g. Joint Industry Project (JIP): A contract had been entered between the Company and NGI (Norwegian_ Geotechnical Institute) Norway on August 07, 2015 for participation in the Joint Industry Project (JIP) for "Reliability of API & CPT-based axial pile capacity design methods". Five Internationally reputed companies (Petrobras, Statoil, Dong Energy, DNV GL and Lundin) participated along with the Company. The project has been successfully completed on December 31, 2017. This Project will benefit in optimization of offshore pile foundation and life extension of old platforms.

h. ONGC-PAN IIT Collaborative Research Program:

Your Company has entered into a Memorandum of Collaboration (MoC) with Pan IIT in January 19, 2015 to work towards a collective R&D Programme for developing indigenous technologies to enhance exploration and exploitation of hydrocarbons and alternate sources of energy. Pan IIT is a consortium of seven premier Indian Institutes of Technology namely, Kharagpur, Kanpur, Madras, Mumbai, Delhi, Guwahati and Roorkee. This is a long-term initiative for sustained research, development and capacity building. Under this program, R&D projects (32 Nos.) have been taken up in different phases (Phase-I: 15 projects, Phase-II: 12 projects, Phase-III: 5 projects) distributed with different timelines up to 2020.

i. An agreement was signed with M/s Belgrave Oil and Gas Corporation, Calgary, Canada for ‘Cyclic Steam Stimulation Pilot in Lanwa field' on June 25, 2015 and was valid up to December 31, 2017. The Contract has been further extended up to December, 2019.

j. Your Company signed MoU with IFP Energies nouvelles, France on December 20, 2017 for Long term collaborative working relationship in areas of Geoscience & Reservoir Management and is valid for 5 years.

k. Your Company has signed an agreement with IIT (ISM), Dhanbad on December 03, 2017 for execution of project entitled "Development of polymer nano-composite hydrogel systems for water control in oil/ gas wells completed in harsh environment".

l. Your Company has signed a MoU on December 23, 2015 with Oil India Ltd (OIL) for providing consultancy and sharing technology for five years in the field of EOR and Water shut-off (WSO) jobs. The MoU is valid for five years for setting up of EOR lab, EOR projects, Heavy oil, Chemical Water shut off (WSO) jobs and Oil field water management etc. During the year 2016-17 and 2017-18, about 6

WSO Jobs were carried out and currently two jobs are lined up. As a follow-up, a new request to provide consultancy service for WSO Jobs in 15 wells of OIL has been received which is under finalization.

m. M OU with Mumbai Port Trust,

Nehru Port Trust and Participating Oil Companies

Y our Company has an MoU with Mumbai Port

(MbPT), Jawaharlal Nehru Port Trust (JNPT) and Participating Oil Companies viz. Bharat Petroleum Corporation Limited, Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited, Reliance Industries Ltd., Chemical Terminal Trombay Ltd., Aegis Logistics Ltd. and Tata Power Company Ltd., whose oil is being handled at these ports for providing Tier-1 oil spill response services and facilities at MbPT and JNPT covering the Company's Uran Plant and Nhava Supply Base. The Participating Oil Companies are funding the Tier-1 oil spill response services and facilities, the contract for which has been awarded to Sadhav Shipping Ltd., Mumbai by MbPT for a period of five years, valid up to October 21, 2019 with Company's share of 41.5%. Under the MoU, MbPT is conducting quarterly oil spill response mock drill in the port area with the Participating Oil Companies.

n. M oU with CSIR-National Institute Oceanography (NIO) covering areas like

• Environmental monitoring;

• Analysis and R&D studies of heavy metals concentration in environmental samples;

• Bioremediation studies of waste generated during oil exploration and production activities;

• Toxicological studies of the wastes;

• Environmental tests of drilling fluids, drilling mud and drill cuttings;

• Study of sediment characteristics;

• EIA studies for offshore activities;

• Impact prediction and modelling for oil spill, air pollution and water pollution for risk assessment studies in petroleum sector etc.

o. Agreement with Oil Spill Response Ltd. (OSRL), UK

Y our Company has an agreement with Oil

Response Limited (OSRL), UK for combating major oil spill of Tier-3 level. OSRL has one of the world's largest technical resources for responding to oil spill. It operates as a non-profit cooperative of the major international oil and energy companies like Chevron, British Petroleum, STATOIL, British Gas International etc. Company is a participant member on OSRL since 1999. A s a part of service contract OSRL has to undertake

Trust preparedness review of Company's offshore and coastal facilities every year. In view of development activities, the Annual Preparedness Review was conducted at Eastern Offshore Asset (EOA) Kakinada on July 24, 2017.

p. A greement with Reliance Industries Ltd.,

Cairn India Ltd., Gujarat State Petroleum Corporation and Oil India Ltd. at East Coast

Y our Company has signed agreement with Reliance

Industries Ltd., Cairn India Ltd., Gujarat State Petroleum Corporation and Oil India Ltd. on June 01, 2017 for pooling of resources and cooperation during oil spill incidents on East Coast. The agreement is valid for 5 years.

12. I nformation Technology

i) Paperless Project under DISHA – Digitisation, of Integration and Standardisation by Harnessing Automation

Y our Company has taken giant step in digitisation by rolling out Paperless Office system at Mumbai region on July 12, 2017 followed by Delhi on July 31, 2017. Subsequently, it has been rolled out in Western Region on September 25, 2017 by the Hon'ble Prime Minister Shri Narendra Modi. Presently, all the work-centres of the Company are on Paperless office system.

ii) Project Management Office

I n today's competitive world, the focus is on timely completion of Projects. Towards this objective, a Project Management software has been implemented. The tool has been configured and presently strategic Projects are being monitored. In due course, all Projects would also be monitored using this tool.

iii) B WA for Onshore Rigs in Western Onshore

Spill F or Onshore Drillings, high bandwidth connectivity based on Wi-Max technology has been extended.

This would enable them to have Office like network experience at the rigs.

iv) Wi-Fi

T he Company has implemented Wi-Fi with enterprise security features in SCOPE Minar as a pilot to enable mobiles and Bring your Own Devices (BYOD) of employees to be connected to Company network. Critical Conference Halls of work-centres of the Company have been connected to this WiFi allowing seamless roaming for users at all work-centres.

v) L AN and WAN

S tate-of-the-art technology-based Network have been inducted in the Company which has been used to upgrade the LAN and WAN Infrastructure. This provides for secure and efficient network connectivity across the organisation resulting in smooth IT experience and increased employee productivity.

vi) I nformation Security Management System

(ISMS):

IS MS Group is making all efforts in information security measures across the Company and for enhancing employee awareness on issues in the domain of Information Security and Cyber Security. In order to streamline and smoothen up the process of ISMS sustenance, two different phases of ISMS Audit cycles for 30 Data Centers and implementation of ISMS at 18 new Data Centers have been consolidated into a single audit cycle. This process ensures implementation of ISMS in a total 48 Data Centers of the Company. As part of efforts for enhancing employee awareness on issues and current trends in the domain of Information Security and Cyber Security, a Quarterly IS-e-Newsletter is being published regularly on ONGC Reports portal. So far, Five (5) issues have been published. Certification Audit for 48 Data Centers as per ISO 27001:2013 standard has also been completed by March, 2018. Advisories and Alerts received from CERT-In and NCIIPC were shared with Corporate IT Team for implementation and for keeping constant vigil. An Advisory by CISO on various Ransom wares was uploaded on "reports. ongc.co.in". Advisory received from CERT-In was mailed to IS-FORUM members and In-charges of Infocom Data Centers.

vii) En terprise wide Access Control and Surveillance (EACS) Project:

A s tate of the art Enterprise wide Access Control and Surveillance (EACS) system project has been proper conceptualized to mitigate any threat perception to the security of the oil installations as well as offices of your Company. M/s BEL is the LSTK contractor to implement the project at 330 sites covering all the work centres of the Company. Project is likely to be fully operational by December 2018.

13. INDE G-Make in India Campaign

Y our Company is leading the upstream sector for successful implementation of the Make in India devices campaign in the oil and gas sector. This major national program is designed to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best in class manufacturing/services infrastructure to make India a manufacturing hub and bringing economic transformation in India. Y our Company carries its legacy of the pioneer corporate in initiative on Import Substitution and indigenization. In the last few decades, the ensuring Company has developed many Indian vendors and some of them are now international players in their areas. Company's initiatives has helped Public Sector Units to expand their capabilities, and the Company has helped creation of some of the large Indian Companies in services and projects areas of oil and gas. With the new thrust through the "Make in India" campaign, the Company has revived its multi-pronged approach to enhance the capabilities of Indian equipment, goods, services and projects market, through promotion of Indian vendors for development in India and through tie-ups with global players.

A. M ake in India and Localisation Drive

Your Company's drive for localisation of procurement and promoting Make in India is gaining momentum. The indigenous share of annual expenditure of the Company stood at 33.36% as compared to 32.7% in the previous financial year.

B. I n-house Refurbishment Capabilities

Catering to the humungous demand of BOP Repair/

Refurbishment in all work centres of the Company, Central Workshop (CWS) Vadodara has developed

BOP Repair Shop, the single in-house facility across the Company for repair/ refurbishment of Cameron, NL Shaffer and Hydril make BOPs of different sizes and pressure ratings as per OEM Standards. Being a critical safety equipment procured from overseas, BOP has always been important in the core activities of the Company.

The average repair cost of each BOP has been reduced from Rs 5.85 million in 2014-15 to Rs 3.2 million in 2016-17.

C. Indigenization Initiatives

Your Company has conducted interactions with vendors and manufacturers including MSMEs / MSME (SC-ST) for promoting make in India at national and international forums. Spares for White Star Mud Pump, Spares for UPET workover rigs, Piston rod, extension rod, studs, wear plate for Pumps, Seal kits for NOV make TDS, were indigenized through domestic industry.:

D. Initiatives to Develop Alternate Indigenous Source against Import:

Sl. No. Name of Firm Item Description
1 M/s Dhariyal Polymer, Ahmedabad XC Polymer (a special mud chemical required for E&P operations)
2 M/s Madhu Hydrocolloids, Ahmedabad XC Polymer (a special mud chemical required for E&P operations)

E. R & D Initiatives under Make in India Campaign:

An R&D collaborative project titled "Development of Shock Wave assisted fracking" is being taken up with a company promoted by professors of IISc Bangalore. The MoU was signed in the presence of Hon'ble Prime Minister. The cost of the project is Rs 680 million.

14. ‘Start-up' Initiative

The Company has launched Rs 1,000 million Startup fund on its 60th foundation day, i.e. on August 14, 2016 to foster, nurture and incubate new ideas related to energy sector. The initiative, christened as ‘the Start-up', is in line with the Govt. of India's initiative ‘Start-up India'. The initiative is intended to promote entrepreneurship among the younger Indians by creating an ecosystem that is conducive for growth of Start-ups in the energy sector, which has a huge potential for technology-enabled ideas. The energy sector is contributing enormously to the growth of economy. Currently, the sector faces various critical challenges and new ideas are required to mitigate those challenges.

A dedicated website startup.ongc.co.in for ‘ONGC Start-up' initiative was created for registration of proposals, and the Company entered into a MoU with IIT Bombay (IITB) and Society of Innovation and Entrepreneurship (SINE). Another MoU has been entered with L-Incubator of IIM Lucknow for evaluation and incubation of Start-Ups selected by the Company.

As of now, two rounds of Start-Up selection have been completed. In the first round around 30 applicants were shortlisted in first lot of applications and invited for the pitching session at Mumbai. Steering Committee selected six startups for providing incubation support subject to further due diligence and acceptance of terms and conditions. MoU were exchanged with five selected Startups on 25.10.2017 in the presence of Honorable Union Minister Petroleum and Natural Gas.

In the second round, 20 applications were taken up for detailed evaluation by L-Incubator out of which 12 were identified for invitation to the Pitching Session before the Steering Committee. Pitching session for final selection was held on 06.06.2018. Five startups have been selected for funding and incubation support.

i. Innovation Challenge

Your Company launched Innovation Challenge on 18.05.2017 on innovate.mygov.in website hosting following five problem areas related to their area of operations viz. Artificial lifting Equipment for Horizontal Wells (including ESP Pump for horizontal wells), Flow Improvement in Crude oil pipelines, Data Computation and Analytics, Sand Influx Control during production of Oil & Gas, Mud loss in wells in Western Offshore.

The prize money for two best proposals in each challenge area was kept at Rs 1 million and Rs 0.5 million respectively.

Mr. Nirmal Ghotekar of Pune won prize of Rs 0.5 million in Data Computation and analytics area for which award given on 26.01.2018, at Republic Day function in Dehradun.

ii. Solar Chulha Initiative

Hon'ble Prime Minister while dedicating the Corporate Office of the Company on September 25, 2017 exhorted the Company to take up a challenge of developing an energy efficient electric cooking stove, which would enable cooking through the use of solar energy. Accordingly, your Company launched a nationwide Solar Chulha Challenge inviting Entrepreneurs/ Scientists/ Researchers with interest in innovation, to participate in the Indigenous Development effort on Design, Development and Demonstration of Solar Chulha (Electric and Thermal), suitable for indoor cooking of Indian food (including frying, baking and chapatti making).

A panel of eminent scientists drawn from various national institutions/ bodies was constituted under the leadership of former Chairman, Atomic Energy Commission, Dr. Anil Kakodkar for evaluation of applications.

Two round of evaluation by the expert panel was conducted on the 1550 applications that were received by closing date. For the demonstration of the proposed concepts, five participants were called during April 23-24, 2018. Top three entries were awarded Rs 1 million, Rs 0.5 million and Rs 0.3 million respectively.

Your Company will be procuring 1,000 units for demonstration in different regions.

15. Health, Safety and Environment (HSE) Accreditations and Other achievements-

Being a high risk industry, safety of its employees is the top-most priority of your Company. Hydrocarbon exploration & production (E&P) operations are being carried out in varied climate and environment areas ranging from deserts to coastal areas, hilly terrains to forest areas, shallow water to deep waters and also in ultra-deep water areas. E&P activities often interact with the ecosystems and may have physico-chemical & bio-geochemical impact on the surrounding environment. Your Company, being a responsible Corporate makes all efforts for protection and preservation of environment. The Company has recently revised its Environment Policy and e-Waste Policy in line with the existing rules, regulations and guidelines. Your Company has a dedicated Institute, viz. Institute of Petroleum Safety and Health Management (IPSHEM) at Goa for Research and development in the field of Health, Safety and Environment Management apart from conducting training Programmes.

Your Company takes all the requisite measures to minimize the impact of E&P activities on the environment by adoption of clean technologies for gaseous emissions, liquid effluent and solid waste generated out of its operations.

Your Company has implemented globally recognized QHSE Management System conforming to requirements of QHSE Certifications ISO 9001, ISO 14001 and ISO 18001 (OHSAS) and certified by reputed certification agencies at all its operational units. Corporate guidelines on online incident reporting, investigation and compliance of audit observations have been developed and implemented for maintaining uniformity throughout the organization in line with international practice.

Highlights of HSE during 2017-18:

a. Internal and External Safety Audits: To check the conformity of activities and processes to HSE management systems as well as to prevalent rules, regulations, guidelines and standards, regular audits are being conducted by external agencies, namely Oil Industry Safety Directorate (OISD) & Directorate General of Mines Safety (DGMS) and Internal Safety Audits (ISA) by multi-disciplinary teams of the Company.

OISD is a technical directorate under Ministry of Petroleum & Natural Gas. It carried out audits of 34 Onshore installations, 13 Offshore Installations and 2 Gas Processing. Also pre-Commissioning Safety Audit of Navagam-Koyali pipeline and two units of Hazira Gas processing Plant was carried out during 2017-18. The Operational area-wise compliance during 2017-18 is 95.86 for Onshore operations, 76.65% for Offshore operations, 71.40% for Process plants, 82.53% for Pipelines.

DGMS is a Regulatory Agency under the Ministry of Labour and Employment, Government of India, in matters pertaining to occupational safety, health and welfare of persons employed in mines (Coal, Metalliferous and oil-mines). It carried out inspection of 176 Onshore Installations in 2017-18. Your Company gives highest priority to the implementation of the observations raised during External Safety Audits (ESA) and Internal Safety Audits (ISA). Compliance status to the observations is summarised as under:

Internal Safety Audits(ISA) External Safety Audits(ESA)
OISD DGMS
91.3% 92.42% 93.26%

b. Waste Water Management: To monitor the discharge of pollutants into environment and to meet statutory requirements, Your Company has setup 26 number of Effluent Treatment Plants (ETPs), across onshore work centres to treat approx. 78110 m3/day of waste water produced during E&P operations. Produced Water Conditioners (PWCs) have been installed at process platforms for Offshore effluent treatment. For treatment of sewage water being generated in offshore facilities, Sewage Treatment Plants (STPs) are provided on board to treat the sewage before discharge.

c. Solid Waste Management: For environmentally safe disposal of oily waste, your Company has a Joint Venture company ONGC-TERI Biotech Limited (OTBL) which has developed specialized patented technology for bioremediation of oily sludge/oil contaminated soil. The technology uses a consortium of Hydrocarbon degrading bacteria which reduces the TPH (Total Petroleum Hydrocarbons) levels in waste/ soil to less than 1% during 2017-18, 54012 MT of oily sludge / oil contaminated waste has been bio-remediated.

d. Environmental Clearances: Ministry of Environment Forest and Climate Change (MoEFCC) has granted 21 Environment Clearances for Exploration, Development and Production activities. These include clearance for 441 wells in onshore and offshore; Combined Cycle Power Plant at Hazira; Desalination Plant and LPG Storage Bullets at Uran; and Shale Gas exploration in Cambay and KG-PG Basin.

e. Other initiatives during the year 2017-18:

(i) Ten Safety Rules Awareness Program: Under Ten Safety Rules Awareness Programs, a total of 28,497 personnel (including contract personnel) have been covered since inception (February, 2017). Almost all the field employees have been covered. Now, it is a permanent feature of safety aspects.

(ii) Mines Vocational Training (MVT, 1966): A total of 2,034 personnel (523 employees and 1511 contract personnel) were imparted MVT during FY'18.

(iii) Viniyaman Sangam: A national level awareness program "Viniyaman Sangam" on Oil Mines Regulations-2017 (OISD standard based) was organised on September 15-16, 2017. The program was attended by more than 110 participants including officials from DGMS, OISD, Key Executives and officers from different work centres.

(iv) Review of Oil Mines Regulations: To facilitate working in the fields and improve safety standards, DGMS had formed a committee to review OMR-1984. The Company was represented by Corporate HSE and contributed significantly. Suggestions given by Corporate HSE were incorporated in updated Oil Mines Regulations-2017 which was notified by the Ministry of Labour & Employment on August 19, 2017.

(v) Compendium of Generic observation: A compendium was prepared and uploaded in your Company's internal portal for uploading the status by self-auditing by OIMs (Offshore Installation Mangers)/ IMs (Installation Managers) /DICs (Drillsite Incharges) / REs (Resident Engineers)/ RPS (Resident Production Superintendent. The status is continuously monitored by CHSE.

(vi) Training to students and initiative for Skill development: To provide training and firsthand knowledge about the actual Oil field conditions to students, an E&P Park has been constructed at Ankleshwar-ONGC Colony in which various geological Models, oil Samples, core samples and model of artificial lift have been displayed along with actual field equipment/ machineries like work-over rig (CW-100-Vl), sucker rod pump, mud pump, CMT (Crisis Management Team) module, group separator, test separator, gas flaring facility, heater-treater, x-mas tree, knock out facility and flexible water tank. For training and demonstration logging units, cementing units and fire tenders are made available whenever required. The facility can also be used to give training to local ITI students and on job and MVT trainings. Two batches of apprentice trainee have also been trained.

(vii) Hazard Alert Card (HAC) was launched to capture unsafe acts and unsafe conditions. Any employee can report unsafe act and unsafe conditions and place the card in the drop box. Safety Officer and Installation Managers shall take action on the same. Monitoring mechanism has also been formulated and put in place.

(viii) HSE Index for benchmarking installations on various parameters like detection and suppression system, environment parameters, evacuation systems, equipment integrity etc., is being followed regularly on monthly basis by Offshore Process Complexes. In the second phase, Offshore Drilling Services and thereafter Process Plants and Onshore installations/ rigs are scheduled in third phase. Reporting on HSE Index is scheduled to be completed across the Company by August 2018.

(ix) Mock Drills and Exercises on Oil Spill Response: Exercise "Prasthan" was conducted by Regional Contingency Committee (West) comprising of 12 agencies viz. Navy, ICG, Air Force, ONGC, JV, Cairn, DG Shipping, MbPT, JNPT, Govt. of Maharashtra, Gujarat and SIB on November 21 - 22, 2017 by activating Regional Contingency Plan to practice the emergency handling by co-ordinated joint action.

(x) Oil Spill Exercise by Indian Coast Guard: An Oil spill Response exercise was conducted by Indian Coast Guard on March 13 - 14, 2018 off Kakinada Coast in Eastern Offshore. Further, mock drills are being regularly conducted at Offshore Process Complexes, Offshore Drilling Rigs, FPSO (Floating production storage and Offloading) and MSVs (Multi Support Vessels) to check the level of preparedness, identify grey areas and take corrective actions.

(xi) Guidelines regarding disposal of chemical and other laboratory waste: Your Company for the first time issued a uniform guidelines for disposal of laboratory chemical waste/ samples/ gases and other waste for oil field chemical testing laboratories and R&D institutes of the Company.

f. Initiatives for Environment Protection and Conservation: Apart from the various steps taken for Environment Protection and Conservation provided above, Afforestation is emphasized through Mangrove and Ringal Plantation to contribute towards reduction of pollution.

Mangrove Plantation: Project Mangrove was initiated with the aim to stabilize shoreline close to Company's Assets and to protect the wells from soil erosion in Gandhar field on the river Dhadar shoreline. During Phase-I of project, plantation of a total of 17,85,250 mangrove saplings, seedlings and propagules in 100 hectare area of Gandhar field, Ankleshwar in Gujarat; and in Phase-II, plantation of a total of 2.16 million mangrove saplings, seedlings and propagules in Gandhar field, Ankleshwar and near Hazira Plant, Hazira in Gujarat was undertaken by your Company.

Ringal Plantation: To sustain fragile ecosystem of Himalayas, ringal plantation in Upper Himalayan Region is being carried out as an initiative under National Action Plan on Climate Change launched by the Prime Minister. Your Company, being a responsible organization towards protection of environment, has always given high importance to plantation and their survival, not only at its operational work areas but also in areas outside its work-centre. A total of 1.075 million Ringal plantation in 430 ha of Upper Himalayan region has been done, fixation resulting in 1.97 million tonnes of CO2 per annum.

Accreditations:

QCI-NABET Accreditation: Your Company is the 1st PSU to be accredited by National Accreditation Board for Education & Training (NABET)-Quality Council of India (QCI) as the Consultant Organization for the purpose of carrying out Environment Impact Assessment (EIA) studies and preparing EIA reports for offshore and onshore Oil and Gas Exploration, Production and Development. The accreditation has contributed to improve Company's image apart from significant financial and time savings.

16. Carbon Management & Sustainable Development

Sustainable Development is the overarching working template in the Company and this finds expression in our commitment to continually enhance the triple bottom line benchmarks of economic, environmental and social performance. The Company has a dedicated set up called Carbon Management and Sustainability Group (CM&SG) at the corporate level, with adequate resources and empowerment. CM&SG is a group of professionals from various disciplines to plan, implement and monitor sustainable development activities in association with Sustainable Development Officers (SDOs) located at work centres.

Sustainable Water Management (SWM)

As an E&P Company, the Company's business depends on sustainability of water resources which are presently under pressure. Globally, per capita availability of freshwater is steadily decreasing and trend will inevitably continue with the increasing consumption levels and, as climate change unfolds. In this situation, it is imperative for the Company to develop new strategies for water management in order to achieve sustainable growth and development.

Rainwater Harvesting (RWH) projects: Rain water harvesting_ is the collection and storage of rainwater for beneficial uses like washing, irrigation, gardening, etc. as well as for recharging of ground water aquifers, rather than allowing it to run off into drains. The Rainwater harvesting policy of the Company provides the necessary framework and guideline for pan India implementation of the rainwater harvesting projects.

Also the existing Rainwater harvesting policy is being modified with the perspective of extending the scope of carrying out rainwater harvesting outside the operational boundaries of the Company and provide climate resilience to the nearby areas from draught and flood.

Sea Water Desalination: With fresh water scarcity looming large across the world and especially in India, desalination of seawater has become one of the most important tools to address the increasing demand of fresh water. Your Company is setting up a 10 MLD Sea Water Desalination Plant within Uran Processing Plant. The Plant can be upgraded to an increased capacity of 20 MLD if there is an increase in fresh water requirement. Uran process plant, situated in Maharashtra near Mumbai is one of the most important plants of the Company, responsible to process the crude coming from Mumbai High Assets and producing value added products from it. The desalination plant will mitigate the fresh water risks of the processing plant and contribute towards environmental sustainability of the area.

Your Company is also in the process of setting up seawater desalination plants in other coastal work centres to ensure freshwater availability and sustainable growth. Feasibility study is being conducted at MRPL and Rajahmundry Asset to set up desalination projects of appropriate capacity.

Sewage Treatment Plants: Three numbers of Sewage Treatment Plants each with 199 Kilo Litres/ day (KLD) capacity are under construction at ONGC colony, Mehsana Asset.

Water Footprint Study: To understand the pattern of freshwater consumption, its sources and possibilities of reduction in consumption, water foot print studies are carried out across the work centres by utilising our in-house expertise. This year a table top analysis of Assam Asset data had been carried out.

Clean Development Mechanism Projects

Emission reduction through CDM projects: The Company commenced its Clean Development Mechanism (CDM) journey in 2006. Currently, there are has 15 registered CDM projects with United Nations Framework Convention on Climate Change (UNFCCC)thatyield(potential)CertifiedEmissisons Reductions (CER) approx. 2.1 million yearly. The list of registered CDM projects along with CER is given at Point No. 6.10 of Business Responsibility Report. Your Company has taken an initiative to extend the credit period permissible under CDM regulation, subject to the merit of the project, for another 7 years for 51 MW Wind Power Project Surajbari, Gujarat. The project was registered with UNFCCC as a CDM project in the year 2010 with a credit period of 7 years. Besides, Your Company is also in the process of validation and registration of new CDM projects with UNFCCC. These are Coal Bed Methane (CBM) Asset, Bokaro, C2-C3 Plant Dahej, Gujarat, Waste Heat Recovery Unit, MH Asset, 10 MW Solar Power project Hazira, Gujarat.

Sustainability Reporting

T he Company has first launched its assured sustainability Report in the year 2009-10 and from there onwards the Company has incrementally enhanced the boundary of reporting to include our subsidiaries OVL and MRPL and from FY'17 onwards the Group Corporate Sustainability Report is launched by including the Venture companies OTPC, OPaL and OMPL. The GRI based externally assured reports are now a major enabler to the Company towards creating triple bottom line value creation and parity to all forms of capital.

Setting up of Pilot "Waste to Fuel" project in Puri city under Swachh Bharat Abhiyan of the GoI.

Your Company has set up a pilot "Waste to Fuel" project in the holy city of Puri, Odisha as a CSR project under the Swachh Bharat Abhiyan of the GoI. Waste to fuel projects are an emerging area in the field of municipal solid waste management where in the collected wastes are segregated and processed for generating solid/ liquid/ gaseous fuel from it. For setting up the proposed pilot plant, Puri municipality has agreed to provide necessary land and also supply of MSW to the plant regularly during the entire life cycle of the plant. The Company will infuse necessary capital expenditure in the form of CSR grant. The plant will segregate the mixed wastes generated daily and process them through latest and cost efficient technologies for generating fuel from them.

A Study on Climate Change Risks: Preparedness for Oil and Gas sector

Your Company in association with other oil and gas sector PSUs conducted a Scientific "Study on Climate Change Risks: Preparedness for Oil and Gas sector" by The Energy Resource Institute (TERI) and Federation of Indian Petroleum Industry (formerly Petroleum Federation of India). The aim of the study was to understand and assess climate change risks to the upstream, midstream and downstream infrastructure of Oil & Gas sector in India along with challenges due to emerging climate policies and to develop a framework to facilitate integrate climate change risks in to strategic decision making.

17. B usiness Responsibility Report 2017-

C lause (f) of sub-regulation (2) of 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, stipulates that the annual report shall contain a Business Responsibility Report describing the initiatives taken by the listed entity from an environmental, social and governance perspective in the format specified. Accordingly, the

Business Responsibility Report for 2017-18 has been appended to this Annual Report.

18. Internal Control System

Your Company has put in place adequate Internal

Financial Controls by laying down policies and procedures to ensure the efficient conduct of its business; the safeguarding of its assets; the prevention and detection of frauds and errors; the accuracy and completeness of the accounting records; and the timely preparation of reliable financial information, commensurate with the operations of the Company.

Ef fectiveness of Internal Financial Controls is ensured through management reviews, control self-assessment and independent testing by the Internal Audit Team indicating that your Company has adequate Internal Financial Controls over Financial Reporting in compliance with the provisions of the Companies Act, 2013 and such Internal Financial Controls were operating effectively. The Audit & Ethics Committee reviews the Internal Financial Controls to ensure their effectiveness for achieving the intended purpose.

Independent Auditors Report on the Internal

Financial Controls of the Company in terms of Clause (i) of Sub-Section 3 of Section 143 of the Companies Act, 2013 by the Statutory Auditors is attached along with the Financial Statements.

19. R&D efforts through ONGC Energy Centre Trust (OECT)

I. Patents-granted International Patents:

During FY'18, against three International PCT patents on Cu-Cl cycle, filed earlier, jointly by OECT and ICT-Mumbai in six countries (USA, Canada, Japan, UK, Korea and China) the following two applications were granted:

1. ‘Effect of Operating Parameters on the Performance of Electrochemical Cell in Copper-Chlorine Cycle' - granted in UK. (Patent already been granted in Japan, Canada and USA).

2. ‘Electrochemical Cell Used in Production of Hydrogen Using Cu-Cl Thermochemical Cycle' - granted in China (Patent already been granted in Canada, Japan, UK and USA).

National Patents:

During FY'18, the following two National Patents were granted:

1. "Hydrogen Production Method by Multi-Step Copper-Chlorine Thermochemical Cycle", jointly filed by OECT with ICT, Mumbai vide Patent No. 294447.

2. "Effect of Operating Parameters on The Performance of Electrochemical Cell in Copper-Chlorine Cycle" jointly filed by OECT with ICT, Mumbai vide Patent No. 294960.

Patents filed National Patents:

During FY'18, two National Patent were filed in India:

1. National Patent for title of invention "A molten salt composition for high temperature thermal energy storage" (India: 201721016058) has been filed jointly by OECT with ICT, Mumbai.

2. National Patent for title of invention "Acid and oxidative resistant cation exchange membrane for electro dialysis, electrolysis and other electrochemical processes" (INDIA: 0016NF2018) has been jointly filed by OECT with CSIR-CSMCRI.

International Patent:

Against National patent filed earlier, three PCT applications were filed during 2017-18:

1. PCT application No. PCT/IN2017/050151 titled ‘Catalyst composition for conversion of Sulphur Trioxide and Hydrogen Production Process' was filed jointly by OECT with IIT Delhi on April 28, 2017.

2. PCT application No. PCT/IN2017/050150 titled ‘Process for conversion of Sulphur Tri-oxide and Hydrogen Production' was filed jointly by OECT with IIT Delhi on April 28, 2017.

3. PCT application PCT/IN2017/050461 titled "Methane Production From Underground Coalbed Methane Wells" was filed jointly by OECT with TERI Delhi on October 10, 2017.

II. New Projects

During FY'18, OECT has taken up twelve (12) new in-house/ collaborative projects, besides new initiatives. The details are given below:

A. Uranium Exploration:

1. Drilling, coring and logging of 8800 meters (16 parametric boreholes) in Kaikalur Lingala area, KG Basin Andhra Pradesh - In house project.

2. Drilling, coring and logging of 20,150 meters (43 parametric boreholes) in SON Valley and Sagar area, M.P and Karjan - Padra area, Gujarat - In house project.

3. Development of ISL Process for extraction of Uranium from Subsurface deposits"- In house project with KDMIPE: to develop leachant formulations of prospective exploration areas.

B. Hydrogen Program:

4. Further Investigations on ICT-OEC Cu-Cl Cycle: Studies on Separations, Material Screening and Integration of Molten Salt Media with Cu-Cl cycle - In collaboration with ICT Mumbai.

5. Hydrogen storage using Colloidal Gas Aphrons (CGAs) and CGAs-loaded with metal hydrides – In collaboration with IIT Delhi.

C. Biotechnology Program

6. Demonstration of in-situ stimulation and bio-augmentation for methane generation/ enhancement from producing CBM wells of Jharia - In collaboration with TERI, Delhi.

7. Development and Demonstration of Bioconversion process for generation of methane from subsurface lignite deposits - In collaboration with TERI and ARI.

8. Design, Development and demonstration of microbial methane generation process suitable for Poor to marginally producing CBM wells - In collaboration with TERI- DST.

D. Others

9. Proof of concept Design of Photo-catalytic Reactor and Demonstration of Recycling of Carbon Dioxide into Hydrocarbons using Solar Energy - In collaboration with IIT Madras.

10. Laboratory scale investigation on chemical treatment of subsurface lignite deposits to enhance the conversion of lignite to methane - In collaboration with CSIR - IICT, Hyderabad. 11. Development of sludge free clean technology for treatment of Industrial effluent-with TERI. 12. Utilization of waste heat from produced water for heating well fluid at North Kadi, GGS IV, Mehsana –North Gujarat with EIL.

13. Refurbishment / Revival of Helium extraction pilot plant at GCS, Kuthalam. 14. Selection of Materials for Construction in Cu-Cl cycle and related activities. 15. Development of Sensors for H2S and SO2 detection with BARC: In view of indigenous development H2S & SO2 sensors by BARC.

16. Solar Thermal Energy for well fluid processing at Company installations to reduce fuel gas consumption: A Feasibility report has been prepared through UNIDO.

20. H uman Resources

Your Company values its Human Resources to the most. To keep their morale high, your Company extends several welfare benefits to its employees and their families by way of comprehensive medical care, education, housing and social security.

21. Human Resource Development

32,265 ONGCians dedicated themselves for securing excellent performance of your Company during the year. The workforce intake strategy pursued by your Company caters to meeting the demands of maintaining a steady flow of talent, in a business which is characterized by high risks and uncertainties, enormous costs, fast changing level of technology, physically challenging work environment, fluctuating product prices and growing competition. Your Company has drawn-up a scientific manpower induction plan aligned to the business plans as well factoring the manpower profile of the Company. The following specific initiatives were taken to strengthen HR processes:

Online submission of ACR/APAR in respect of all executives (E0 and above) was taken up successfully along with compliance of prescribed timelines with regard to writing of ACR/ APAR (% of number of executives) which have been 99.75%.

100% achievement has been in respect to Online Quarterly vigilance clearance updation for Senior Executives (E5 and above level officers).

Preparation of succession plan was approved by the Board of Directors on September 28, 2017.

Your Company believes that continuous development of its human resources fosters engagement and drives competitive advantage. Towards that end, during the year, your Company conducted Business Games to hone the business acumen of its executives in a competitive scenario under simulated business constraints. Business Games has proved to be very popular initiative and tests the ability of the executives through business quizzes, business simulations and case-study presentations. During the year 2017-18, a total of 159 teams and 636 executives participated in the event. Fun Team Games (FTG) were organized for E0 and below level employees to inculcate MDT (Multi-disciplinary Team) concept and spirit of camaraderie and belongingness to the organization, which was very well received by the participants. A total of 119 Teams and 476 employees participated in FTG during the year 2017-18. The winners of Business Games and Fun Team Games were felicitated by the CMD on Republic Day Celebrations. Your Company has branded the spectrum of its training activities as ‘EXPONENT', a comprehensive programme which is nurturing the energy leaders of tomorrow. The growth of an ONGCian to an Exponent of energy business is facilitated by ONGC Academy, Skill Development Centers (SDCs), other in-house Institutes; in association with globally recognized trainers. Training Institutes of ONGC organize training in all dimensions - Technical as well as non-technical and Managerial.

During the year, a total of 17,947 Executives and 5,319 non-executives were imparted appropriate training, spanning 167,369 executive and 17,817 non-executive mandays across work centres.

With an aim to give an impetus to talent management and carrier progression practices, your Company exposed 11.9% of its Executives of E-5 level and above to at least one week training through Centres of Excellence viz. IITs, IIMs, NITs, ICAI etc. Further, in order to assimilate new and emerging technological advancements pertaining to oil and gas exploration and production, 14 training programmes were conducted through foreign faculty during the year through which 302 participants got the requisite exposure.

22. Employee Welfare

Your Company continues to extend welfare benefits to the employees and their dependents by way of comprehensive medical care, education, housing, and social security. Your Company continues to align its policies with changing economy and business environment.

Employee Welfare Trusts –

Your Company has established the following major Trusts for welfare of employees:-

Employees Contributory Provident Fund (ECPF) Trust, manages Provident Fund accounts of employees of your Company.

The Post Retirement Benefit Scheme (PRBS) Trust of your Company manages the pension fund of employees of your Company. The Scheme was converted into a Defined Contribution Scheme as per DPE Guidelines in November, 2013.

The Composite Social Security Scheme (CSSS) formulated by your Company provides an assured ex-gratia payment in the event of unfortunate death or permanent disability of an employee in service. In case of Separation other than Death/ Permanent total disability, employees own contribution alongwith interest is refunded.

Gratuity Fund Trust exists for payment of gratuity as per the provisions of the Payment of Gratuity Act.

Sahayog Trust Your Company has a Sahayog Trust for its Sahayog Yojana to provide ex-gratia financial grant for sustenance, medical assistance, treatment, rehabilitation, education, marriage of female dependent and alleviation of any hardship or distress to secure the welfare of the workforce and their kin, who do not have adequate means of support. The beneficiaries under this scheme include casual, contingent, daily rated, part time, adhoc, contract appointees, tenure based employees, apprentices and trainees employed by your Company besides regular and past employees. Under the scheme an amount of Rs 48 million was disbursed by the Trust during 2017-18 to 1200 beneficiaries.

Asha Kiran Scheme Your Company has Asha Kiran Scheme to meet the emergency needs of the ex-employees retired prior to January 01, 2007. The scheme was launched as per DPE Guidelines by creating a corpus of 1.5% PBT.

Implementation of Government Directives for Priority Section

Your Company complies with the Government directives for Priority Section of the society. The percentage of Scheduled Casts (SC) and Scheduled Tribe (ST) employees were 15.3% and 10.10% respectively as on March 31, 2018.

Your Company is fully committed for the welfare of SC and ST communities. The following welfare activities are carried out by your Company for their upliftment in and around its operational areas.

Annual Component Plan:

Under Annual Component Plan for SC/ST, every year an allocation of Rs 200 million is made since FY'12. Out of this, Rs 60 million is distributed amongst all the Work centres of the Company for taking up activities for welfare of SC/ST Communities in and around the areas of our operations. In addition, Rs 140 million is managed centrally, and is earmarked for Special projects/ proposals/ schemes for the welfare of areas/ persons belonging to SC/ST communities. This fund is especially meant for providing help and support in Education and Training, Community Development and Medical and Health Care.

Scholarship to SC/ST meritorious students

Your Company provides 500 scholarships for meritorious SC and ST students for pursuing higher professional courses at different Institutes and Universities across the country in Graduate Engineering, MBBS, PG courses of MBA and Geo-Sciences. The major feature of the scheme is that the scholarships have been equally divided for both Boys and Girl students and the amount of scholarship has been made at Rs 4,000/- per month amounting to Rs 48,000/- per annum per student as per terms and conditions of the scheme.

23. Industrial Relations

During the year your Company maintained harmonious Industrial Relations throughout the year. Mandays loss due to internal industrial action was reported as ‘NIL' for the year 2017-18.

24. Grievance Management System

Your Company has put in place an effective online response mechanism (https://grievance.ongc.co.in) since

2015 to enable all stakeholders viz. citizens / vendors / employees / former - employees, to register and get online redressal to their grievances related to any operational wing.

Your Company has also put in place a Grievance Management System for redressing employee grievance, which provides for three-tier channel for grievance redressal with an Independent Appeals Committee, at Corporate Level, which is chaired by an external professional to ensure transparency and justice. The Appeals Committee situated at Corporate Office can also be accessed for settlement of grievances in case the location Channels are not effective in resolving the grievance. Further, provision for representation through Chief Liaison Officers of SC/ST/OBC in the Appeals Committee has also been in-built to protect the interest of reserved category employees. For external stakeholders, the Company has a well laid down grievance redressal system in place with adequate provisions to escalate the matters up the hierarchy up to the Board (stakeholders Relationship Committee – a Board level Committee headed by an independent Director).

The Company voluntarily facilitates resolving grievances through Independent External Monitors (IEMs) and through Outside Expert Committee (OEC).

25. Implementation under the Right to Information Act (RTI Act), - 2005

An elaborate mechanism has been set up throughout your Company to deal with requests received under the RTI Act, 2005. An Officer of General Manager level, based at the Registered Office at Delhi, has been designated as ‘Nodal Officer' for the purpose. Besides this, 22 officers have been designated as ‘Central Public Information Officers' (CPIOs) at different work centers across the country, in compliance of provisions of the Act. The particulars of all the quasi-judicial authorities under the ambit of RTI Act, 2005 have been uploaded on the Company website (www.ongcindia.com) for wider information of the general public. In compliance of Government directives, your Company has successfully introduced online processing of applications under the Act from August, 2016 onwards. 111 applications were carried forward from the year 2016-17. Further, 1719 applications were received during the period from April 2017 to March 2018. A total of 1647 of the 1830 applications received were responded to during the period in accordance with the provisions of the RTI Act 2005. There were 273 first appeals which were disposed off during the period. Additionally, the Department of Public Information/ RTI Cell also processed 109 Second Appeals which were listed for hearing at the Central Information Commission (CIC) during FY' 18.

26. Implementation of Official Language Policy

Your Company makes concerted efforts for promotion and implementation of Official Language. In this regard, some of the steps taken during the year were: -

Unicode Hindi software installed in our all offices.

Hindi workshops conducted at regular intervals in all work centres.

Hindi Technical seminars, ‘Kavi Gosthies' and Hindi plays organized at various work centres.

Various programmes for promotion of ‘Rajbhasha' were organised at all work centres of the Company during ‘Rajbhasha Fortnight' (September 14 - 28, 2017) and ‘Vishwa Hindi Diwas' (January 10, 2018).

Hindi Teaching Scheme of Government of India was effectively implemented at all regional work centres of the Company.

E-Roster of Employees regarding working knowledge of Hindi was put in place.

Hindie-magazines were published at various work centres.

Rajbhasha implementation Help Book was uploaded in the local intranet and internal portal of ONGC.

Paperless office (DISHA) has been made bi-lingual for effective implementation of Official Language policy in the office works.

In recognition of the initiatives taken for promotion of Rajbhasha, your Company was awarded with the ‘Petroleum Rajbhasha Shield' of Ministry of Petroleum & Natural Gas as well as "Rajbhasha Gaurav Award" by the Ministry of Home Affairs during the year.

27. Women Empowerment

Women employees constituted over 6.7% (March 31, 2018) of your Company's workforce. During the year, programmes on women empowerment and development, including programmes on gender sensitization were organized. Your Company actively supported and nominated its lady employees for programmes organized by reputed agencies. Over 2000 employees successfully underwent online gender sensitisation module.

Disclosure under the sexual Harassment of women at workplace policy (prevention, prohibition & redressal) Act, 2013:

Your Company has complied with the provisions under the Sexual Harassment of women at workplace (Prevention, Prohibition & Redressal) Act, 2013 including constituted on Internal Complaint Committee (ICC) for dealing with the complaints on sexual harassment of women at workplace. Four complaints of sexual harassments were received in the year 2017-18. Reports of ICC have been submitted in all the cases.

28. W ork-Life Balance:-

Your Company continued in its endeavors to ensure work-life balance of its employees. The townships at many work-centers were provided facilities like gymnasiums, music rooms, etc. Facilities for gym, yoga, etc. were also provided in Offshore Living Quarters. Outbound programmes with families were also organized at various work-centers. Plays on the importance of ‘Work-Life Balance' were staged to create awareness amongst the employees. In addition, cultural programmes involving employees and their families were also conducted. Mahila Samitis and Resident Welfare Associations (RWAs) were involved in the organization of these cultural programs. Your Company has a adventure wing named ONGC Himalayan Association which organizes adventure programmes like mountaineering, trekking, white water rafting, snow skiing, desert Safari, Aero sports etc. which adds towards morale, engagement, team spirit, camaraderie, stress management and spirit to explore unknown traits among the employees.

29. Sports

Your Company continues to extend sustained support for development of sports in the country through employment to 173 players and scholarships to 289 upcoming sportspersons in 23 game disciplines. Financial assistance to various Sports Associations / Federations/ Sports Bodies to organise sports events as well as to develop infrastructure was also extended.

Some of the key achievements of our sportspersons during the year were:

Mr. Pankaj Advani was conferred with prestigious

Padma Bhushan Award in April 2018.

3 ONGCians were conferred with the prestigious "Arjuna Award" for the year 2017, namely Ms. Vennom Jyothi Surekha (Archery), Mr. Jasbir Sngh (Kabaddi) and Mr. Amal Raj (Table Tennis).

Mr. Bhupender Singh (Athletics) was conferred with the "Dhyanchand Award".

The total number of National Sports Awardees in your Company now stands at 40 (Padma Bhushan - 1, Khel Ratna – 1, Padma Shri – 3, Arjuna Award – 34 and Dhyanchand Award – 1).

In the Common Wealth Games 2018 at Gold Coast, Australia, Company's sportspersons bagged 13 medals including 5 Gold, 3 Silver and 5 Bronze, contributing to the overall Medal tally of 66 Medals of Team India. The strength of your Company players in the Indian contingent was 21. ONGCian Mr. Yadwinder Singh led the Sr. India Basketball Men's team.

ONGCians contributed five Medals including 2 Gold, 1 silver and 2 Bronze Medals in Indian Tally in Asian Athletics Championship 2017. ONGC athletes Ms. M. R. Poovamma won Gold Medal in 4X400 mtrs relay race, Ms. Swapna Barman won Gold in Heptathlon, Ms. Anu Raghwan won Silver Medal in 400 mtr hurdle race, Ms. Sanjeevani Jadhav won Bronze Medal in 5000 mtrs and Ms. Seena N. V. won Bronze Medal in Triple Jump.

ONGC trio of Mr. Pankaj Advani, Mr. Sourave Kothari and Mr. Rupesh Shah secured Gold, Silver and Bronze Medal respectively in 2017 ONGC-Asian Billiards Championship held in April 2017. This was Mr. Pankaj Advani's 7th Asian Billiards Title. Mr, Pankaj Advani also won his 19th World titles in cue sports Doha, Qatar in March 2018.

Ms. Yuki Bhambri won the ATP Challenger World Ranking Tennis tournament held at Pune in November, 2017.

Mr. Siddhanth Thingalaya participated in World Indoor Athletics Championship March 2018 at Birmingham. He was the only Athlete representing India for this event.

ONGCian Mr. Virat Kohli is currently leading the Indian Cricket team as Captain in all Match formats i.e. Tests, One Days & T-20s.

ONGCian Mr. Sai Praneeth won his maiden Singapore Super Series Title in April 2017.

ONGCian Mr. H S Prannoy won US Open badminton 2017 title in July 2017.

Ms. Heena Sidhu won Gold Medal in Commonwealth Shooting Championship 2017 in Gold coast, Australia in November 2017.

Three Kabaddi players Mr. Pradeep Narwal, Mr. Sandeep Narwal and Mr. Sachin were the part of Indian Kabaddi team that won Asian Championship held at Iran from November 22 – 26, 2017.

Mr. G Sathiyan, Table Tennis player won God Medal in ITTF Challenges Series Spanish Open in Nov. 2017.

10 ONGCians duly trained through rigorous winter training programme successfully summited Mt. Kanchenjunga (8,586 m) in May 2018. Earlier in May 2017, 6 ONGCians scaled Mt. Everest (8,848 m)

30. Corporate Social Responsibility (CSR) NGC CSR - Partnering for Inclusive Growth

In the financial year 2017-18, your Company ensured more than 100% utilization of CSR budget amounting to Rs 5,034 million against the budget of Rs 4,870 million. As stipulated in the Section 135 of the Companies Act 2013, your Company has a Board Level Committee on CSR namely CSR and SD Committee, who has approved 19 major CSR projects amounting to Rs 2,600 million in FY'18. Besides, a detailed standard operating procedure on CSR has been rolled out to bring in standardization and transparency in the process of implementing CSR projects. Expenditure of Rs 5,034 million has been made possible by implementing and executing more than 2400 CSR projects / programs in the areas of Swachhta, Health, Education, Environment, Skill Development and Vocational training by Corporate CSR and 24 work centres of the Company. Your Company has undertaken number of flagship initiatives under Swachh Bharat Abhiyan, with an expenditure of Rs 1,844.6 million. An amount of Rs 1,320.3 million was spent towards implementing projects on promoting education, livelihood and skill development. Another, Rs 1,307.9 million was spent towards creating health Infrastructure and on preventive health care programs/projects. Rest of the expenditure was towards implementing projects related to environment sustainability, women empowerment, sports, rural development, capacity building, etc. CSR footprints of the Company can be traced from J&K through the project implemented by joining hands with Indian Army to seashore of Rameswaram by executing an impactful solid waste management program. This year had also seen the Company implementing projects worth Rs 776.3 million among the states of North-East India. A Separate report on Corporate Social Responsibility (CSR) activities undertaken by your Company during the year FY'18 is enclosed as Annexure ‘B'.

Major Swachh Bharat Initiatives: At a glance :

• Rs 1,844.6 million worth of CSR projects/ Program implemented across the country.

• 21085 nos. of Individual Household latrines(IHHL) constructed across India.

• 53 community toilets projects.

• 234 school toilets.

• 181 Water Ro Plant/ Water ATM projects.

• 358 Tube Wells installed.

• 11 Solid Waste Management projects.

• 14 projects on Smoke Free Village.

• 3 project on development and beautification of parks.

Restoration of Kunds in Varanasi:

Your Company took the responsibility of cleaning and beatification of four famous Kunds of Varanasi namely Durga Kund, Lakshmi Kund, Lat Bhairav Kund, Karim Kund at a cost of Rs 114.6 million under Swachh Bharat Mission programme driven by Government of India. Hon'ble Prime Minister inaugurated the Durga Kund and Lakshmi Kund at Varanasi. The project is being implemented in partnership with National Buildings Construction Corporation Ltd and Nagar Nigam Varanasi.

Swachh Iconic place: Clean and green initiative at Tirumala Tirupati Devastanam

As part of Government of India Initiative for Swachh iconic places, Your Company has taken up clean and green initiative at Tirumala Tirupati Devastanam, where 7 km long separate water pipelines is being laid for pumping treated waste water from tertiary treatment plants to gardens along the ghat road. Also 130 cleaning machines and solid waste management plant of capacity 30 MT per day has been installed. Apart from this, energy saving measures like installation of SCADA system and battery operated vehicles for pilgrims is also being introduced. Lakhs of devotees visiting this shrine will be benefited through this project. An amount of Rs 130 million is sanctioned towards implementing this project.

Deep Water Drilling Project along the Paleo Channels of river Saraswati

The ancient and mythological river Saraswati has been known since the Indus valley civilization. There are several places in Haryana, Punjab and Rajasthan where evidence is found of its existence, as the water from this river is known to surface at several places. To tap the water of river Saraswati which is flowing several hundred meters below the surface, Haryana Saraswati Heritage Development Board (HSHDB) approached the Company. A survey was conducted by a team of experts from the Company to locate the paleo-channels existing underground in the northern part of indo-gangetic plains. Accordingly, it was agreed by the Company for drilling of 10 wells, where there is a high possibility of tapping water. An agreement was signed with Water and Power Consultancy Services Limited (WAPCOS) for drilling these wells. Nine out of ten wells have been successfully drilled and producing water in good quantity.

Bio-CNG Plant at Haridwar:

Your Company has undertaken an unique initiative in Haridwar to convert cow dung to useful fuel and value added products by setting up Bio-CNG cum Fertilizer and Bottling Plant at Haridwar at a cost of Rs 16 million. The plant will be run by the largest Gaushala in Uttarakhand and will help maintaining clean hygienic waste management in the Gaushala premises. It will facilitate availability of clean environment to the local population of Haridwar and also help in protecting the fauna i.e. 2200 non-milching cows at Gaushala by way of making the Gaushala self-sustaining from the revenue generated from the project. The plant will also produce organic solid and liquid fertilizers which will be distributed among the local farmers thereby promoting organic farming.

Open Defecation Free Initiative:

As part of Hon'ble Prime Minister's dream to make our country Open Defecation Free, your Company has taken the initiative for construction of Individual Household Latrine across the country in partnership with district administration and other NGOs. More than 21085 IHHL has been constructed in the ONGC operational areas of Gujarat, Tamil Nadu, Jharkhand, Assam and other states of the country at a cost of Rs 846.6 million in the last one year.

Solid Waste Management Project at Rameswaram

With a vision to make the city of Rameswaram clean and Green, "Green Rameswaram" initiative was launched by the Former President of India, Late Dr. A P J Abdul Kalam. Vivekananda Kendra Vidyalaya, Nardep committed itself to turn the vision of the former President into a reality, and started cleaning initiative along with not-for profit organization like Hand In Hand. A Solid Waste Management project was planned by Hand In Hand in four municipal wards of Rameswaram, located around 25 km from Ramnad GCS. The project deliverables include setting up of robust infrastructure for solid waste management, providing vehicles for door to door waste collection, developing and putting in place systems and human resources for ensuring cleaning of roads, drains, collection of garbage and waste, segregation of waste into recyclable and biodegradable categories and processing of the waste in both the categories in a sustainable manner. Based on the success and the impact of the first phase of the project, the second phase of the project was extended to four wards of Thangachimadam village, which is located around 23 km from Ramnad GCS. An amount of Rs 9.5 million has been sanctioned towards implementing the second phase of the project at Thangachimadam Village Panchayat, along with IEC intervention, in Rameswaram Municipality.

Clean Himalaya Initiative

Your Company is the first Company to have taken the Swachh Bharat Initiative to the Himalayas. The Company partnered with Indian Mountaineering Foundation (IMF) to reach the upper Himalayas where every year tons of harmful garbage was left behind by the visiting tourists. From the mountain peaks of Himachal Pradesh to Uttarakhand, more than 13 cleaning expeditions have been undertaken as part of "Clean Himalaya Initiative" in the last three years. Tons of garbage has been brought down and disposed in an eco-friendly manner. An amount of Rs 8.76 million has been spent towards this initiative.

Initiatives to promote Education, Livelihood and Skill Development At a glance:

• Project worth Rs 1,320.3 million implemented towards education, livelihood and skill development.

• Imparted skill development training to 6058 youth and women.

• Created employment opportunity for 4821 youth & women.

• Spent more than Rs 192 million towards creating the infrastructure like class rooms, hostels and smart class rooms.

• Funded for 420 Ekal Vidyalayas in the remote areas of the country.

• Assistance in the form of Scholarships amounting to Rs 4000/- p.m. to more than 1500 students belonging to SC/ST and BPL families across the country .

Skill Development Institute at Ahmedabad

Skill India is the vision of Hon'ble Prime Minister of India. In line with the Skill India Mission, Ministry of Petroleum and Natural Gas has taken the initiative to set up 6 Skill Development Institutes (SDI) across the country with funding from Oil sector PSEs. Your Company was directed to set up a SDI at Gujarat. The first batch of 90 students has successfully completed their training in 3 different courses in March 2018. All the 90 students were successfully placed in different companies located near Ahmedabad. Considering the success of the first batch, the number of trades will be increased from three to nine from next year onwards benefiting 780 youth. Your Company contributed an amount of Rs 136 million towards setting up these 6 SDIs across India.

Revival of Sanskrit Language

Sanskrit is an ancient Indian language with its origin from Old Indo-Aryan age, having rich literature and text related to science and mathematics unknown to mankind. In order to promote Sanskrit through Training, and to conduct Research on the ancient storehouse of knowledge related to science, mathematics and astrology, Sanskrit Promotion Foundation approached your Company for financial assistance to carry out work for the development of this ancient and rich language, which has been undertaken by the Company as its CSR initiative. The total cost of the project was Rs 57 million in the Phase I, After successful completion of the Phase–I of the project, in September 2017, the Phase- II of the project has been launched from November 2017, for which an amount of Rs 59 million has been sanctioned.

Smart Gram at Daula village of Haryana

Under Smart Gram Initiative of Hon'ble President of India, various villages have been adopted across the country. The model village development at Daula village is one such initiative of Hon'ble President of India. As part of this initiative the Company was given the responsibility of constructing a senior secondary school at Daula village. The 18223 sq ft school building which is currently under construction with funding from the Company will have 12 class rooms, 2 staff rooms, Principal's chamber, three laboratories/Multi-Purpose activity room, library, craft room and a computer room. The total financial implication towards implementing this project is Rs 30 million.

Ekal Vidyalaya

Your Company has partnered with Bharat Lok Shiksha Parishad for reaching remote villages across the country in its operational area for providing free education to children through ‘Ekal Vidyalaya'. This project covers 420 Ekal Vidyalayas, in as many villages of rural, tribal and backward areas in 10 states. With average enrolment of 30 students per school, it is targeted to impart free basic informal education to 24,000 students, with a financial implication of Rs 19 million, for a period of two years.

Skill Development through CIPET:

Two separate projects were undertaken with CIPET for training economically underprivileged youth in plastic technology at Bhubaneswar and Jaipur respectively. A total of 217 youth have been trained in two different courses in tool room mechanic operator and injection moulding machine operator. The total cost for both projects is Rs 15 million. After completing 6 months residential training, all 217 youth have been placed at different companies related to plastic engineering thus ensuring 100% placement.

Ekalavya Centre for Organic Agricultural Research and Training:

To realise the Hon'ble Prime Minister's goal of doubling farmers' income by 2022 and reduce the carbon footprint, Ekalavya Foundation (Ekalavya Centre for Organic Agricultural Research and Training) formulated a project to promote organic farming through training and capacity building at Tandur and Vikarabad Mandal of Telengana. In order to implement this project for setting up the training institute, Ekalavya Foundation approached the Company for financial support. The project will be immensely beneficial for increasing the scope of organic farming in the entire Telangana and other neighboring region. This project will help the farmers and local youth to enhance their livelihood by imparting them employment with enhancing vocation skills. The project is being implemented in one of the most backward mandal in the region inhabited by SCs and STs. It will benefit about 3500 farmers, 200 students and Consumers in general by way of promoting organic farming. Your Company has sanctioned an amount of Rs 47 million for undertaking this project.

Vivekananda Centre for Yoga, Naturopathy and Research: Your Company has extended financial support for setting up a state of the art Yoga, Naturopathy and Research Centre at Jor Bagh, Delhi. The project has been implemented by Vivekananda Yoga Anusandhana Samsthana (VYASA) for which the Company has sanctioned an amount of Rs 60 million. The centre shall render services in preventive health care, disease management, rehabilitation, evaluation, monitoring and research. People can also avail of clinical specialty services in stress and lifestyle, pain, women health, children health, mental health, hair and skin care, etc.

Yoga Theme Garden, Mumbai:

Your Company has provided financial support for development of India's first Yoga theme Park, at Bandra Reclamation, Mumbai. This project is being implemented in partnership with Ravindra Joshi Medical Foundation (RJMF) at a cost of Rs 8 million. The park has been featured as India's first Yoga theme park. It has attractive lawn and vertical gardens. Seven yoga postures have been depicted in the park with visual lighting on vertical green wall. 15 feet tall statue of Yoga Guru Patanjali in Padmasana posture has been installed in the park to motivate people. Besides all these, park has several advance features like rain water harvesting system, irrigation system, LED lighting 20 indigenous native plants have been used to withstand coastal weather. Around 5,00,000 residents residing in the vicinity of the park will directly be benefited from this theme park.

S-VYASA Boys Hostel

Your Company has supported ‘Vivekananda Yoga Anusandhana Samsthana' (VYASA) with financial support of Rs 120 million towards construction of a 350 bed boy's hostel at S-VYASA University campus located at Gidden Halli, Jigani Hobli, Bangalore. The hostel will have all the latest facilities including solar lights, solar heating systems, CCTV, lifts, interior furniture, electrical, etc. Free accommodation will be provided to ST/SC and Tribal students of S-VYASA University whereas deserving poor students will be given 50% concession.

Major Health Care Initiative: At a Glance:

• Rs 1,308 million worth of projects implemented towards Health Care Initiative.

• Rs 3,130 million Multi- Speciality Hospital project launched at Sivasagar, Assam.

• 541208 Nos. door step medical treatment provided through Mobile Medical Unit in FY'18.

• Rs 1,000 million sanctioned towards setting up of National Cancer Institute at Nagpur.

Varisthajana Swasthya Sewa Abhiyan: Doorstep medical treatment for elderly, women and children

This flagship CSR project implemented in partnership with HelpAge India has succeeded in providing door step medical treatments to more than one lakh elderly citizen, women and children through Medical Mobile Unit in remote villages in the operational areas of the Company. The project was initially launched from 2010 to 2016 with 20 MMU's through which more than 1.58 million treatments were provided to the needy population. Based on the impact assessment report of the first phase, Your Company accorded approval for extension of the project till 2019 along with engaging 11 new MMUs. As a result, today 31 MMUs are providing door step medical consultation, treatments and medicines to lakhs of senior citizen, women and children residing in remote corners of our country. The total amount sanctioned towards implementing this project from 2010 to 2019 is Rs 364 million. This project has been successful in providing more than 2.5 million treatments.

National Cancer Institute, Nagpur

The National Cancer Institute at Nagpur, will be 455 bed quaternary care oncology centre. The centre will provide comprehensive cancer treatment, patient care and research through sustainable charity. In addition to providing general cancer care, the institute will also create specialty groups of highly skilled professionals. The institute also plans to start a University recognized training courses for nurses, paramedical staff and medical fraternity including super specialty training in Oncology and PhD programs.

Your Company has extended support of Rs 1,000 million for construction of first, second floor and procurement of medical equipment for radio diagnostic facilities (like MRI, Citi scan, ultrasound, mammography, x-ray and bone marrow density meter, etc.) for the hospital. The equipments have already been commissioned on the ground floor of the hospital and are already being used for investigations of patients. Primary beneficiaries of the project will be patients referred by NGOs, local physicians in and around 500 km radius of Nagpur. It is expected to benefit people from Vidharbha region of Maharashtra, parts of Chhattisgarh, Madhya Pradesh and Andhra Pradesh.

ONGC – MRPL Lady Goschen Hospital, Mangalore

The Lady Goschen Hospital established in 1849, at the heart of Mangalore City is the only hospital in entire Konkon region which provides exclusive pre-natal and post natal care. On an average 500 women are admitted and treated for pre/ post natal care every month. The 167 year old hospital building was in a dilapidated condition and due to increase inflow of patient there was an urgent need for additional facilities. District administration of Mangalore approached the Company for financial support to start a new wing in the hospital campus. Your Company extended financial support of Rs 128 million towards construction of new ‘ONGC-MRPL Wing' for Government Lady Goschen Hospital, Mangalore. The new hospital building is scheduled to be commissioned in 2018.

Rural Development Projects At a glance:

• Rs 223 million worth of rural development projects undertaken.

• Undertaken infrastructure development work for two Model Village project Under Sansad Adarsh Gram Yojna at Yigi Kaum village in Arunachal Pradesh and Natun Jelom village, in Assam.

• Undertaken 67 different projects for strengthening rural roads near ONGC operational areas.

• 8853 Solar street lights sanctioned in 2017-18 for lighting the roads of remote villages across the country.

Model Village Development for Revival of Kor-bong Community at Tripura:

With only 120 surviving population, the Korbong community of Tripura was on the verge of extinction. To save this fast disappearing community, Your Company partnered with Tribal Engineer's Society to develop this village into self-sustained model. As part of this project, permanent infrastructure was developed for community centre, market shed, toilet blocks and irrigation facilities. Also, livelihood opportunities was created for piggery, goatery, fishery, duck rearing, etc. It was a holistic intervention for revival of the Korbong community at a financial implication of Rs 6.5 million.

ONGC Solar Street Lights project:

Your Company has sanctioned 8853 solar street lights worth Rs 177 million for lighting remote villages of the country in the last one year. MNRE recognized partner are empaneled by the Company for installing the solar street lights as per the predefined specifications. These agencies also ensure maintenance of these street lights through AMC .

Development of Mangalajodi, Odisa.

Chilika lake, the largest brackish water lake and a unique bio-diversity of our country attracts millions of migratory birds from across the globe. Mangalajodi, a tiny village located at the backwater of Chilika lake has been the host to these birds. Your Company is in the process of taking up a project with UNESCO to help declare Chilika lake as a World Heritage site. But, prior to taking up the project with UNESCO, the Company has taken up a 360 degree approach to develop Mangalajodi village. Based on need assessment, multiple CSR interventions have been taken up which include open defecation free Initiative by constructing 1300 Individual Household Latrine, lightning the dark alleys of the village by installing 200 Solar lights, creating drinking and portable water facilities, providing 12 nos. of boats to the villagers for creating sustainable livelihood, construction of 40 nos. of school toilets and several livelihood generation and infrastructure development project in the last one year. An amount of Rs 63 million has been sanctioned towards undertaking these projects.

Northeast Vision 2030

In line with Hon'ble Prime Minister's vision for Northeast, Ministry of Petroleum and Natural Gas has released the

Hydrocarbon Vision 2030 document for Northeast India in Feb' 2016. The vision document inter alia focuses on the development of the region through CSR initiatives. Your Company having operational presence in the northeast has rolled out major CSR projects in the region. Since, the release of the Vision 2030 document, your Company has incurred an expenditure of Rs 1,522 million towards implementing CSR projects across northeast in different focus areas like Skill Development, Health Care, Education, Swachh Bharat, Environment, Bio-Diversity, etc. Due importance is given by your Company towards creating Open Defecation Free Village under which more than 11,165 IHHLs have been constructed across 4 district of Assam at a cost of 134 million. In Arunachal Pradesh, your Company has undertaken many rural Infrastructure development and Health Care projects in the last two years amounting to Rs 78 million. As part of the holistic approach towards skill development, Multi-Purpose Skill Development and Community centres are being set up at Natun Jelom and Halflong at a cost of Rs 13.7 million, besides undertaking skill development training in computer education, welding, gas cutting, video documentation, fruit processing, etc. A documentation centre to preserve the local art, culture and heritage is being set up at Roing in Arunachal Pradesh in partnership with RIWATCH at a cost of Rs 8 million. Hostels and school buildings worth more than Rs 50 million are being constructed for both boys and girls across different remote location of Assam, Arunachal Pradesh and Tripura. The "Yoganilayam" project being undertaken with Seva Bharti Purbanchal will be a hub for promotion of Yoga in northeast. This centre is being set up at Abhoypur in North Guwahati at a cost of Rs 26 million.

One of the major flagship Health Care initiative launched for the benefit of entire population of Upper Assam is the Multi Speciality Hospital project at Sivasagar. This is biggest ever CSR project being undertaken by the Company. After thoroughly analysing the alarming health care scenario of Assam, the Company accorded approval for setting up a 362 bed Multi-Specialty Hospital at Sivasagar to be implemented in three phases, at an estimated cost of Rs 3161 million. The prime objective of the hospital is to provide quality health care services to the people of Northeast at an affordable cost. The charges for treatment will be, as low, as 70% of the market price and further discount of 50% will be provided to economically disadvantaged people. The project will be implemented in three phases, of which an amount of Rs 991 million has already been sanctioned for the first phase, which is scheduled to be completed by July 2019. Some of the other projects being implemented by your Company in Northeast are:

B. Ed. College, Nirjuli:

Your Company is supporting Vivekananda Kendra Vidyalayas Arunachal Pradesh Trust for setting up a B Ed College at Nirjuli for training of teachers. The construction work is in progress and classes have already started in a temporary building. An amount of Rs 59 million has been sanctioned towards implementing this project. The construction of the B Ed College is scheduled to be completed by end of 2018.

Green Hub Project: This is an unique initiative to train 20 youth of North East every year, in wild life videography and documentation. The main objective of the project is to create a team of environment enthusiasts having expertise in conservation. In the last three years 60 youth and women have been trained. The Centre was recently been conferred with Manthan Awards in the category of Environment & Green Energy for leveraging the power of youth to conserve biodiversity through a digital platform. An amount of Rs 6 million has been sanctioned towards implementing this project in the last three years.

Water Hyacinth project for rural women of Sivasagar:

Through this CSR initiative of ONGC, 50 women of Sivasagar district have been trained by NEDFi to develop product from water Hycainth. 20 of these women were further trained by experts from National Institite of Design to make superior products, as per the demand of the market. A facilitation centre has been set up at Nimajan in Sivasagar and a retail outlet has been opened for selling the finished products. The women trained under this program are currently imparting training to others. An amount of Rs 3.3 million has been sanactioned towards implementing this project.

ONGC Super 30:

Your Company has set up a ONGC Super 30 centre at Sivasagar to train 30 aspiring students every year to get admission in IITs and other premier engineering institutes of our country. Total 85 students in three batches have already completed the training since 2014 out of which 18 secured admission in institutes like IIT's and NIT's, 54 got admission in other premier institutes and the remaining 13 students opted for other courses. The fourth batch of 30 students are currently undergoing training at Sivasagar, "ONGC Super 30 centre". The project is being undertaken in partnership with an NGO Centre for Social Leadership. An amount of Rs 28 million has been sanctioned towards this project since the last four years.

An unique initiative of addressing a grassroot level issue at Baramulla

Indian Army, besides securing the international boarders and ensuring security for the common people of Jammu & Kashmir has been consistently working towards channelizing the energy of the youth towards nation building. In order to support their initiative for empowering the local women and youth of Baramulla, the Company funded skill development programs of Chinar 9 Jawan Club, of Indian Army.

As part of this initiative 120 Kashmiri women from Baramulla and neighbouring areas have been trained in Fashion Designing, Cutting & Sewing at a cost of Rs 3.4 million. Further, through another Skill development program, 150 youth in 'Hospitality' and 150 women in ‘Retail Sales' have been imparted training at a cost of Rs 1.7 million. Out of the total 300 students, trained in Hospitality and Retail Sales, 201 (boys & girls) have already got placement in different industries. Some of them are placed in premier hotels like Taj and Maurya sheraton. These skill development trainings have been imparted through a NGO named REACHA. Prior to these initiatives in Jammu & Kashmir, the Company took the initiative to construct 100 IHHLs in the international border villages of Bobiya, Ladwal and Karol Bidho falling under Mahreen block of Kathua District in Jammu & Kashmir.

At Kalgai Village, near Uri three houses of local residents were devastated while neutralizing four terrorists by the Indian Army. As a result, these families belonging to economically weaker section of the society became homeless overnight. Considering the tough situation under which these villagers were exposed to after devastation of their house, your Company extended financial support for rebuilding of these three houses through the Indian Army. The reconstruction of the three houses was completed in record time of five months. An amount of Rs 1.6 million was sanctioned towards implementing this project.

31. Accolades

Consistent with the trend in preceding years, your Company, its various operating units and its senior management have been recipients of various awards and recognitions. Details of such accolades is placed at Annexure- ‘C'.

32. Regulators or Courts order

During the Financial year 2017-18, there is no order or direction of any court or tribunal or regulator which either affects Company's status as a going concern or which significantly affects Company's business operations.

33. Directors' 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: (i) In the preparation of the annual accounts, the applicable accounting standards have been followed and there is no material departures from the same; (ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date; (iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) The Directors have prepared the annual accounts of the Company on a ‘going concern' basis; (v) The Directors have laid down internal financial controls which are being followed by the Company and that such internal financial controls are adequate and are operating effectively; and (vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating.

34. Corporate Governance

Your Company has taken structured initiatives towards Corporate Governance and its practices are valued by various stakeholders. The practices emanate from the need to position multi-layered checks and balances at various levels to ensure transparency of its operations in the decision making process.

In terms of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a report on Corporate Governance for the year ended March 31, 2018 along with a certificate from the Company's Statutory Auditors confirming compliance of conditions, forms part of this report. Your Company has implemented the mandatory Guidelines of Department of Public Enterprises (DPE), Government of India, on Corporate Governance to the maximum extent possible.

Your Company has formulated and uploaded the following policies/codes on its website in line with the Companies Act, 2013 and the Listing Regulations: i. Code of Conduct for Board Members and Senior Management Personnel; ii. Related Party Transactions (revised w.e.f. 09.02.2018); iii. Material Subsidiary Policy; iv. The Code of Internal Procedures and Conduct for prohibition of insider trading in dealing with the securities of ONGC; v. Policy on Materiality for Disclosure of events; vi. Corporate Policy on Preservation of Documents and their archiving; vii. Policy for Training of Directors; viii. Dividend Distribution Policy; ix. Fraud Prevention Policy; x. CSR and Sustainability Policy; and xi. Risk Management Policy. In line with global practices, your Company has made available all information, required by investors, on the Company's corporate website www.ongcindia.com In line with the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, your Company has also implemented other measures of Corporate Governance (mandatory/ voluntary) which have been brought out in the Corporate Governance Report and are as follows:

i. Whistle Blower Policy/ Vigil Mechanism: A total of 41 Protected Disclosures till March 31, 2018 have been processed through the Whistle Blower mechanism of your Company which was implemented from December 01, 2009. The Policy ensures that a genuine Whistle Blower is granted due protection from any victimization. The Policy is applicable to all employees of the Company and has been uploaded on the intranet of the Company. In addition, the Company has a full-fledged Vigilance Department, which is headed by Chief Vigilance Officer (CVO) who holds the rank of a Functional Director of the Company. With a view to maintain independence, the CVO reports to the Chief Vigilance Commissioner of the Government of India.

ii. Enterprise-wide Risk Management (ERM) framework: In line with the requirements of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, your Company has developed and rolled out a comprehensive Enterprise-wide Risk Management (ERM) Policy throughout the organization. The Audit & Ethics Committee periodically reviews the risk assessment and minimization process .

The Risk Management policy of your Company is as follows:

"ONGC shall identify the possible risks associated with its business and commits itself to put in place a Risk Management Framework to address the risk involved on an ongoing basis to ensure achievement of the business objective without any interruptions. ONGC shall optimize the risks involved by managing their exposure and bringing them in line with the acceptable risk appetite of the Company"

The Board of Directors have constituted a Board Level Risk Management Committee in terms of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. Till date four meetings of the Committee have been held.

iii. Board and Committee Meetings: - Details of Board and Board Level Committee Meetings are placed under Corporate Governance Report, which form part of this report.

iv. Meeting of Independent Directors: Three Meetings of Independent Directors were held during FY'18.

v. Certificate of Independence by Independent Directors: The Independent Directors have submitted declaration that they meet the criteria of Independence as per Section 149(6) of the Companies Act, 2013.

35. St atutory Disclosures

Your Directors have made necessary disclosures, as required under various provisions of the Act and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

Extract of Annual Return

As per requirement of section 92(3) of the Companies Act, 2013, the extract of the annual return in form MGT-9 is placed at Annexure-D.

Particulars of Employees

Your Company being a Government Company, the provisions of Section 197(12) of the Companies Act, 2013 and relevant Rules issued thereunder do not apply in view of the Gazette notification dated 05.06.2015 issued by Government of India, Ministry of Corporate Affairs. The terms and conditions of the appointment of Functional Directors are subject to the applicable guidelines issued by the Department of Public Enterprises, Government of India. The salary and terms and conditions of the appointment of Company Secretary, a KMP of the Company, is in line with the parameters prescribed by the Government of India.

36. En ergy Conservation

The information required under section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, is annexed as Annexure – ‘E'.

37. A udit and Ethics Committee

In compliance with Section 177(8) of the Companies Act, 2013, the details regarding Audit & Ethics Committee is provided under Corporate Governance report which forms part of this Annual Report. There has been no instance where the recommendations of the Audit & Ethics Committee have not been accepted by the Board of Directors.

38. Auditors

The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India (C&AG). M/s. Dass Gupta & Associates, New Delhi, M/s. MKPS & Associates, Mumbai, M/s. Lodha & Co., Kolkata, M/s. PKF Sridhar & Santhanam LLP, Chennai, M/s. Khandelwal Jain & Co., Mumbai and M/s. K.C. Mehta & Co., Vadodara, Chartered Accountants were appointed as Joint Statutory Auditors for the financial year 2017-18. The Statutory Auditors have been paid a total remuneration of Rs 36.55 million (previous year Rs 43.41 million) towards audit fees, certification and other services. The above fees are inclusive of applicable service tax / GST but exclusive of re-imbursement of travelling and out of pocket expenses actually incurred.

39. 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 no qualification in the Auditors Report on the Financial Statements of the Company.

40. Secretarial Audit

In terms of Section 204(1) of the Companies Act, 2013, the Company has engaged M/s P P Agarwal & Co., Company Secretaries in whole-time practice, as Secretarial Auditors for conducting Secretarial Compliance Audit for the financial year ended March 31, 2018. Their report has been annexed to the Corporate Governance Report.

41. Cost Audit

Six firms of Cost Accountants were appointed as Cost Auditors for auditing the cost records of your Company for the year ended March 31, 2018 by the Board of Directors. The Cost Audit Report for the year 2016-17 has been filed under XBRL mode on September 11, 2017 which was well within the due date of filing.

Further, the required cost records as specified under the Companies Act, 2013 are prepared and maintained by the Company.

42. Directors

Policy for Selection and appointment of Directors' and their remuneration.

Your Company being a Government Company, the provisions of Section 134(3) (e) of the Companies Act, 2013 do not apply in view of the Gazette notification dated June 05, 2015 issued by Government of India, Ministry of Corporate Affairs.

Performance Evaluation

The provisions of Section 134(3) (p) of the Companies Act, 2013 relating to evaluation of Board/ Directors do not apply to your Company since necessary exemptions are provided to all government companies. The Company being a Government Company, the provisions relating to Performance Evaluation of Directors stand exempted. The proposal for similar exemption under the Listing Regulations is under the consideration of the SEBI.

Appointments / Cessation etc.

Since the 24th Annual General Meeting held on September 27, 2017, Smt. Ganga Murthy and Shri Sambit Patra were inducted as Independent Director(s) of the Company with effect from September 23, 2017 and October 28, 2017 respectively.

Shri Dinesh Kumar Sarraf, Chairman & Managing Director, superannuated from the services of the Company on September 30, 2017. The Board places on record its appreciation for his contribution during his tenure. Shri Shashi Shanker, has been appointed as the Chairman & Managing Director of the Company w.e.f. October 01, 2017, who was earlier appointed as Director (Technical & Field Services). Shri Adapa Krishnarao Srinivasan, has ceased to be the Director (Finance) and CFO of the Company due to superannuation on October 31, 2017. The Board places on record its appreciation for his contribution during his tenure. Shri Subhash Kumar, has been appointed as Director (Finance) and CFO of the Company w.e.f January 31, 2018.

Shri Tapas Kumar Sengupta, Director (Offshore) has ceased to be the Director (Offshore) of the Company due to superannuation on December 31, 2017. The Board places on record its appreciation for his contribution during his tenure. Shri Rajesh Kakkar, has been appointed as the Director (Offshore) of the Company w.e.f. February 19, 2018. Shri Ved Prakash Mahawar, has ceased to be the Director (Onshore) of the Company due to superannuation on February 28, 2018. The Board places on record its appreciation for his contribution during his tenure. Sanjay Kumar Moitra, has been appointed as the Director (Onshore) of the Company w.e.f. April 18, 2018. Shri Desh Deepak Misra has ceased to be Director (HR) of the Company due to superannuation on June 30. 2018. The Board places on record its appreciation for his contribution during his tenure.

The strength of the Board of Directors of the Company as on March 31, 2018 was 16 comprising 5 Executive Directors (Functional Directors including CMD) and 11 Non-Executive Directors including two Government nominees and Nine Independent Directors. Though there were two vacancies for two Executive Directors, the composition of the Board complied with the requirements under the provisions of Companies Act, 2013 as well as of Listing Regulations, 2015.

43. Acknowledgement

Your Directors are highly grateful for all the help, guidance and support received from the Ministry of Petroleum and Natural Gas, Ministry of Finance, DPE, MCA, MEA, and other agencies in Central and State Governments. Your Directors acknowledge the constructive suggestions received from Statutory Auditors, Cost Auditors and Comptroller & Auditor General of India and are grateful for their continued support and cooperation. Your Directors thank all share-owners, business partners and all members of the ONGC Family for their faith, trust and confidence reposed in the Board. Your Directors wish to place on record their sincere appreciation for the unstinting efforts and dedicated contributions put in by the ONGCians at all levels, to ensure that the Company continues to grow and excel.

On behalf of the Board of Directors
Sd/-
New Delhi (Shashi Shanker)
02.08.2018 Chairman and Managing Director

   

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