Financial Analysis of ONGC

Financial Analysis of ONGC
CHAPTER-1
INTRODUCTION
1.1 COMPANY PROFILE
During the pre-independence period, the Assam Oil

Company in the northeastern and attock Oil company in
northwestern part of the undivided India were the only oil
companies producing oil in the country, with minimal exploration
input.
After independence, the national Government realized the

importance oil and gas for rapid industrial development and its
strategic role in defense. Consequently, while framing the Industrial
Policy Statement of 1948, the development of petroleum industry in
the country was considered to be of utmost necessity.
Until 1955, private oil companies mainly carried out

exploration of hydrocarbon resources of India. In Assam, the Assam
Oil Company was producing oil at Digboi (discovered in 1889) and
the Oil India Ltd. (a 50% joint venture between Government of India
and Burmah Oil Company) was engaged in developing two newly
discovered large fields Naharkatiya and Moran in Assam. In West
Bengal, the Indo-Stanvac Petroleum project (a joint venture between
Government of India and Standard Vacuum Oil Company of USA)
was engaged in exploration work. The vast sedimentary tract in
other parts of India and adjoining offshore remained largely
unexplored.
In 1955, Government of India decided to develop the oil

and natural gas resources in the various regions of the country as
part of the Public Sector development.
With this objective, an Oil and Natural Gas Directorate was

set up towards the end of 1955, as a subordinate office under the
then Ministry of Natural Resources and Scientific Research.
S.V. Institute of Management (SVIM) 1

KADI [Batch 2008-10]
1.2 Company History
In April 1956, the Government of India adopted the Industrial

Policy Resolution, which placed mineral oil industry among the
schedule 'A' industries, the future development of which was to be
the sole and exclusive responsibility of the state.
Oil and Natural Gas Corporation (ONGC) was set up in 1956

with significant contribution in industrial and economic growth of the
country. In October, 1959 the Commission was converted into a
statutory body by the Oil and Natural Gas Commission Act, 1959.
The main objectives of the Commission were to plan, promote,
organize and implement program for the development of oil and
natural gas resources and the production and sale of oil and natural
gas products.
ONGC functions as the primary arm of the Government as

regards exploration for and exploitation of India's petroleum
resources. The Company's revenues are derived primarily from the
sale of its production of crude oil, natural gas, liquefied petroleum
gas (LPG), C2-C3 (ethane-propane) and natural gasoline (NGL).
To strengthen reserves accretion portfolio and open up areas

of future exploration ONGC has undertaken an Accelerated Program
of Exploration with an outlay of Rs.3958 crores. – The main
objectives of APEX were Enhancement in seismic surveys,
enhancement in exploratory drilling, national seismic program,
exploration in frontier areas and acquisition of foreign acreage.
ONGC has assimilated various technologies in the field of
hydrocarbons explorations and exploitation.
The Company owns Dornier-228 aircraft, chetak helicopter,

offshore supply vessels and geo-technical survey vessel. It has 2
central work shops located at Baroda & Sibsagar, 7 project
workshops and 11 auto workshops located at various project sites
employing multifarious equipments and machinery. It has also state-
of-the- art communication systems both terrestrial and satellite
based for meeting operational & MIS requirements of onshore &
offshore.

1.3 General Information

1. Name of Unit : Oil and Natural Gas Corporation
2. Registered office : Jeevan Bharti Bldg., Tower II, 124, Indira
Chowk,
New Delhi, Delhi – 110001.
3. Tel No : 23301000, 23310156, 23721756.
4. Fax : 23316413
5. E-mail : secretariat@ongc.co.in
6. Website : www.ongcindia.com
7. Corporate Office : Tel Bhavan
Dehradun , Uttar Pradesh-248003, India.
8. Tel No : 755298
9. Registrar & Share : Karvy Computer share Pvt Ltd
Transfer Agent Plot No. 17-24, Vittal Rao Nagar,
Madhapur,
Hyderabad–500086.
Andhra Pradesh.
10. Tel No : 1-800-3454001
11. Factory/Plant : Uran Plant Dronagiri Bhavan, Uran,
Maharashtra-400702. India.
12. Tel No : 27222802.
13. Factory/Plant Hariza Plant PO ONGC, Bhatpore,
Surat District, Gujarat-394518. India
14. Tel No 28328129
15. Business Group : Public Sector
16. Listings : BSE, NSE
17. ISIN No. : INE213A01011
18. Incorporation : 23/06/1993
19. Bankers : State Bank of India
20. Auditors : Singhi & Co., K K Soni & Co.,
S C Ajmera & Co.,
PSD & Associates
Padmanabhan Ramani & Ramanujam
1.4 Corporate Information

Sr No. Name Designation
1. Mr. R S Sharma Chairman and Managing Director
2. Dr. Bakul H Dholakia Director
3. Mr. N K Mitra Director
4. Mr. U N Bose Director
5. Mrs. Sindhushree Khullar Director
6. Mr. D K Pande Director
7. Mr. S Sundareshan Director
8. Mr. P K Choudhury Director
9. Mr. A K Hazarika Director
10. Dr. R K Pachauri Director
11. Mr. V P Singh Director
12. Dr. A K Balyan Director
13. Mr. D K Sarraf Director
14. Mr.S P Garg Co Secretary & Compl Officer

1.5 DIFFERENT STRUCTURES
ONGC Has Different Types Structures like ASSETS/ BASINS/ PLANTS/

REGIONS/ INSTITUTES/ SERVICES
A. Assets:
1) Mumbai High Asset, Mumbai

2) Neelam & Heera Asset, Mumbai
3) Bassein & Satellite Asset, Mumbai
4) Rajamundry Asset, Rajamundry
5) Ankleshwar Asset, Mehsana
6) Ahmedabad Asset, Ahmedabad
7) Mehsana Asset, Mehsana
8) Cauvery Asset, Karaikal
9) Assam Asset, Nazira
10) Tripura Asset, Agartala
B. Basins:
1) Western Offshore Basin, Mumbai

2) Western Onshare Basin, Baroda
3) K. G. Basin, Rajamundry
4) Cauvery Basin, Chennai
5) Assam & Assam-Arkan Basin, Jorhat
6) CBM- BPM Basin, Kolkata
7) Frontier Basin, Dehradun
C. Plants:
1) Uran Plant, Uran

2) Hazira Plant, Hazira
D. Region:
1) Mumbai Region, Mumbai

2) Western Region, Baroda
3) Eastern Region, Nazira
4) Southern Region, Chennai
5) Central Region, Kolkata

E. Institutes:
1) Keshava Deva Malaviya Insti. of Petroleum Exploration (KDMIPE),

Dehradun
2) Institute of Drilling Tech., (IDT), Dehradun
3) Institute of Reservoir Studies, Ahmedabad
4) Institute of Oil & Gas Production Tech., Navi Mumbai
5) Institute of Engineering & Ocean Tech.,, Navi Mumbai
6) Geo-data Processing & Interpretation Center (GEOPIC), Dehradun
7) ONGC Academy, Dehradun
8) Institute of Petroleum Safety, Health & Envi. Management, Goa
9) Institute of Biotechnology & Geotectonic Studies, Jorha
10) School of Maintenance Practices, Baroda
11)Regional Training Insti., Navi Mumbai, Chennai, Sivasagar & Baroda
F. Services:
1) Chief Drilling Services, Mumbai
2) Chief Well Services , New Delhi
3) Chief Geo-Physical Services, Dehradun
4) Chief Logging Services, Mumbai
5) Chief Engineering Services, Mumbai
6) Chief Offshore Logistics, Mumbai
7) Chief Technical Services, Dehradun
8) Chief Info-com Services, New Delhi
9) Chief Corporate Planning, New Delhi
10) Chief Human Resource Development, Dehradun
11) Chief Employee Relations, Dehradun
12) Chief Security, New Delhi
13) Company Secretary, New Delhi
14) Chief Marketing, New Delhi
15) Head Corporate Affairs & Co-ordination, New Delhi
16) Head Corporate Communication, New Delhi
17) Chief Material Management, Dehradun
18) Chief Health, Safety & Environment, Mumbai
19) Head Legal, New Delhi
20) Chief Medical, Dehradun
21) Chief Internal audit, New Delhi
22) Head Commercial, New Delhi
23) Chief Exploration & Development, Dehradun

1.6 VISON STATEMENT
To be a world-class Oil And Gas Company integrated in energy

business with dominant Indian and global presence.
World Class
Dedicated to excellence by leveraging competitive
advantages in R&D and technology with involved people.
Imbibe high standards of business ethics and organizational

values.
Abiding commitment to safety, health and environment to

enrich quality of community life.
Foster a culture of trust, openness and mutual concern to

make working a stimulating and challenging experience for our
people.
Stive for customer delight through quality products and

services.
Integrated In Energy Business

Focus on domestic and international Oil And Gas exploration
and production business opportunities.
Provide value linkages in other sectors of Energy business.
Create growth opportunities and maximize shareholder value.
Dominant Indian Leadership

Retain dominant position in Indian petroleum sector and
enhance India’s Energy availability.

1.7 Products’ Detail:
Product Name Year Month Sales UOM Sales

Quantity Value
Oil Crude 2008 12 2407624 Metric Tones (Corers)
38,680.27
Gas Natural 2008 12 1 Thousands Cu
2042771 7,178.00
0 Meters
HSD 2008 12 1539370 Kilolitres 4,860.83
Aromatic Rich 2008 12 1442019 Metric Tones 4,384.86
Naphtha
Liquefied Petroleum 2008 12 1036773 Metric Tones 2,016.86
Gas
C2/C3 2008 12 519957 Metric Tones 929.07
(Ethane/Propane)
Motor Spirit 2008 12 231758 Kilolitres 915.90
Superior Kerosene Oil 2008 12 308164 Kilolitres 740.08
Superior Kerosene Oil 2008 12 168454 Metric Tones 337.38
LSHS 2008 12 17544 Metric Tones 41.83
Kerosene/ATF 2008 12 10093 Metric Tones 39.36
Others 2008 12 0 11.29

HSD 2008 12 379 Metric Tones 1.28
1.8 Capital Structure:
EQS: Equity Shares

From To Class Authorize Issued Paid Up Paid Paid Up
Year Year Of d Capital Capital Shares Up Capital
Share (Crores) (Crores) (Nos) Face (Crores)
Value
2007 2008 EQS 15000.00 2138.89 2138872530 10 2138.87
2006 2007 EQS 15000.00 2138.89 2138872530 10 2138.87
2005 2006 EQS 15000.00 1425.93 1425933992 10 1425.93
2004 2005 EQS 15000.00 1425.93 1425933992 10 1425.93
2003 2004 EQS 15000.00 1425.93 1425933992 10 1425.93
2002 2003 EQS 15000.00 1425.93 1425933992 10 1425.93
2001 2002 EQS 15000.00 1425.93 1425933992 10 1425.93
2000 2001 EQS 15000.00 1425.93 1425933992 10 1425.93
1999 2000 EQS 15000.00 1425.93 1425933992 10 1425.93

1.9 Achievements / Awards

(1)Prime Minister hands over ‘Public Sector Company of the Year’
Award to ONGC
March 24, 2005,ONGCNews
ONGC has bagged the Business Standard Star Public Sector

Company Award for 2004, in the Public Sector category.
(2)ONGC enters retail – launches OVaL - completes integration

March 19, 2005, ONGCNews
March 19, 2005 will remain a red letter day for ONGC. The cycle –
Drilling to Dispensing – was completed on this day by ONGC.
(3)Super CEO- Subir Raha - Business India

March 19, 2005
Courtesy: Business India
(4)ONGC secures Award for its Safety Initiatives

February 14, 2005, ONGCNews
ONGC’s high standards in Safety, both in its Offshore and Onshore

petroleum operations, have got it the Safety Initiatives Award,
constituted by the Institution of Engineers (India).
(5)ONGC receives Biggest Wealth Creator Award

January 21, 2005, ONGCNews
ONGC received Biggest Wealth Creator Award amongst all the

companies listed on Indian Stock exchanges. C&MD Mr. Subir Raha
accepted the award on behalf of 38004 ONGCians, colleagues from
OVL, MRPL & ONGC Nile-Ganga BV, at an exclusive function
organized in Mumbai on January 19, 2005. The Award was presented
by Mr. Ajay Primal, Chairman, Nicholas Piramal India Limited.
(6)Mr. Subir Raha bags SCOPE Individual Excellence Award for his
outstanding contribution to Public Sector Management
ONGC News, 13th January, 2004
Mr. Subir Raha, ONGC’s C&MD, has won the ‘SCOPE Award for
Excellence and Outstanding Contribution to the Public Sector
Management – Individual Category’, for the year 2002-03. The award
carries a gold plaque and a purse of 1 Lakh rupees.

(7)ONGC Bags NPMP Awards In Creativity And Finance

ONGC News, 4th July 2003
ONGC’s production engineers dominated the stage in the “Creativity

and Innovation” category of NPMP awards for 2001-02, which were
distributed by the Petroleum Minister Mr. Ram Naik on July 3, 2003.
(8)ONGC Bags Three Greentech Foundation Awards

ONGC News, 2nd July 2003
ONGC has bagged three Greentech Excellence awards for

maintaining the highest standards of safety at its installations and
operational areas.
(9)Dr J V S S Narayana Murthy Wins National Mineral Award 2001

ONGC News, 22nd January 2003
Harvesting the fruits of information technology needs two

professionals – one from software development, and another from
the specialist knowledge domain. It is indeed rare to find someone
who excels in both.
(10)Partha P Mitra Awarded National Mineral Award-2001

ONGC News, 22nd January 2003
The National Mineral Award for 2001 was conferred on ONGC's SG

(S), Mumbai High Asset, Mr Partha P Mitra in recognition of his
contribution to the area of application of innovative technique for
mineral exploration.
(11)Four ONGC Scientists Bag National Mineral Award-2001

ONGC News, 24th December 2002
Four ONGC geoscientists, Dr Anil Bhandari, DGM (Geology), Mr

Narendra Kumar Verma, Chief Geologist, Dr J V S S Narayana
Murthy, Suptdg Geophysicist (S) and Mr Partha Pratim Mitra, Suptdg
Geophysicist (S) have bagged the National Mineral Awards 2001 for
their outstanding contribution in the field of Fundamental/Applied
Geosciences.
(12)AG Pramanik Elected Member Of European Academy Of Science

ONGC News, 26th November 2002
(13) Mr. Y B Sinha Elected Director Of International Body On Open
Software

ONGC's Director (Exploration), Mr. Y B Sinha has been elected
Director of Petrotechnical Open Software Corporation (POSC), an
international body on software integration, standardization and
benchmarking of oil industry.
(14) Scaling The Summit

ONGC's C&MD, Mr Subir Raha, was awarded the CEO

Business Leader of the Year Award at the India Leadership
Summit in Mumbai on Nov 21, 2002. A brief report follows.
(15)Energy Packed Performance

The ET500, September 2002
Of the top 20 companies on the ET500 list, an incredible six

are from the oil and gas industry. With the disinvestments process
picking up pace, this sector will be something to watch out for.
Also: ONGC: A Record Performance
(16)ONGC: India's First National Integrated Oil & Gas Corporate

Drilling & Exploration World, Vol 11, No. 10, August 2002
With the acquisition of the equity held by the Aditya Birla

Group in Mangalore Refineries and Petrochemicals Limited (MRPL),
ONGC has become the first Indian integrated oil and gas corporate.
(17)ONGC's Most Momentous Year

16th August 2002, Raj Kanwar
In its eventful 46 years of existence, the Oil & Natural Gas

Corporation (ONGC) Ltd. has achieved many a landmark. On the
occasion of 46th ONGC Day, Mr. Raj Kanwar, a veteran journalist and
a freelance writer, summarizes the highlights.
ED, Chief, Geophysics Services, Mr. Anand Gopal Pramanik,
ONGC has been elected as Member to the prestigious European
Academy of Sciences, Brussels, Belgium, for his distinguished
services to the Geosciences community.
Also: Interview with Mr. Pramanik

CHAPTER-2
BALANCESHEET ANALYSIS
2.1 INTRODUCTION TO BALANCESHEET
A balance sheet is a list of assets and liabilities and claims of

a business at some specific point of time and is prepared from an
adjusted Trial Balance. It shows the financial position of a business
by detailing the source of funds and utilization of these funds. A
Balance Sheet shows the assets and liabilities grouped, properly
classified and arranged in a specific manner.
USES OF BALANCE SHEET

 It enables us to ascertain the proprietary interest of a person
or business organization.
 It enables us to calculate the actual capital employed in the
business.
 The lender can ascertain the financial position of the business.
 It may serve as the basis for determining purchase
consideration of the business.
 Different ratio can be calculated from the Balance Sheet and
these ratios can be utilized for better management of the
business.
LIMITATION OF BALANCE SHEET

 Fixed assets are shown in the Balance Sheet as historical cost
less depreciation up-to-date. A conventional Balance Sheet
can not reflect the true value of these assets. Again intangible
assets are shown in the Balance Sheet at book values which
may bear no relationship to the market values.
 Sometimes, balance sheet contains some assets which
command no market value such as expense, debenture
discount etc. the inclusion of these assets unduly inflate the
total value of assets.
 The balance sheet can not reflect the value of certain factors
such as skill and loyalty of staff.
 A conventional balance sheet may mislead untrained readers
in inflationary situations.
 The value of major number of current assets depends upon
some estimates, so it cannot reflect the true financial position
of business.

2.2 BALANCE SHEET
BALANCE SHEET OF ONGC

AS ON 31ST MARCH
(Rs. In Crore)
Oil & Natural Gas Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07 Mar ' 08
SOURCESCorporation
OF FUNDS:
Owner's Fund:
Equity Share Capital 1,425.93 1,425.93 1,425.93 2,138.89 2,138.89
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves & Surplus 39,117.17 45,419.49 52,533.74 59,785.0 68,478.5
Loan Funds:
Secured Loans 0.00 0.00 0.00 0.00 0.00
Unsecured Loans 11,407.79 9,916.22 12,722.61 15,109.0 12,482.7
Current Liabilities & 59,601.1 24,979.0
14,517.73 37,821.16 47,638.17
Provisions 8 7
Total 66,468.6 94,582.8 1,14,320 1,36,634 1,08,07
USES OF FUNDS:
Fixed Assets:
Gross Block 41,007.62 42,983.85 47,882.35 52,038.0 57,463.7
Less : (1)Revaluation 0.00 0.00 0.00 0.00 0.00
43,198.9 46,945.7
(2)Depreciation 35,339.16 37,147.32 40,040.15
5 7
Net Block 5,668.46 5,836.53 7,842.20 8,839.11 10,518.0
Inventories 25,184.99 28,838.35 33,373.92 37,794.1 41,154.6
Investments 4,421.67 4,036.67 4,888.57 5,702.05 5,899.50
Current Assets, Loans & 30,652.83 55,340.09 67,849.42 83,784.7 49,833.1

Advances 8 4
Miscellaneous expenses
540.68 531.16 366.34 514.06 673.90
not written
Total 66,468.6 94,582.8 1,14,320 1,36,634 1,08,07
2 0 .45 .18 9.18

Interpretation:-
 The balance sheet is the statement showing the increase or

decrease in the assets and liabilities. This indicates the
change in capital structure as well as increase or decrease in
assets.
 Owner’s fund increases by 712.96 Crore in 2007-08 as

compared to base year 2003-04. The reserves & surplus is
also get increase in last four years very rapidly. It increases by
29361.34 Crore in 2007-08 as compared to base year 2003-
04.
 Now, here the strongest point of the company that company’s

debt is decrease in 2007-08 by 34622.11 Crore as compared
to previous year 2006-07 and
 Proportion of the debt in capital structure is decrease that is in

2006-07 borrowing debt is 15,109.07 Crore and in 2007-08
debt is 12,482.71 Crore. So, it is decrease by 96.43.
 The balance sheet also shows the balance of assets and other
investment made by the company. The gross fixed assets are
increased in 2007-08 by 1678.90 Crore as compared to
previous year 2006-07.
 The investment is also increase in 2006-07 by 197.45 Crore as

compared to previous year. The overall inventory turnover
ratio shows the good position of the company is good.
 We also conclude that the liquid position of the company is

good because Current Assets are increase year by year.

2.3 COMPARATIVE ANALYSIS OF BALANCE SHEET
(Rs. In Crore)
Oil & Natural Gas Mar-
Corporation Mar- ‘04 ‘05 Mar- ‘06 Mar- ‘07 Mar- ‘08
SOURCE OF FUNDS:
1425.9
Net Worth 1425.93 3 1425.93 2138.89 2138.89
Change 0.00 0.00 712.96 0.00
39117.1 45419. 52533.7 59785.0 68478.5
Reserve & surplus 7 49 4 4 1
Change 6302.32 7114.25 7251.3 8693.47
11407.7 9916.2 12722.6 15109.0 12482.7
Borrowings 9 2 1 7 1
-1491.5
Change 7 2806.39 2386.46 -2626.36
Current Liabilities & 14517.7 37821. 47638.1 59601.1 24979.0
Provision 3 16 7 8 7
23303.4 -34622.4
Change 3 9817.01 11963.01 1
66468.6 94582. 114320. 136634. 108079.
Total Liabilities 2 80 45 18 18
APPLICATION OF
FUNDS:
5836.5 10518.0
Gross Fixed Assets 5668.46 3 7842.20 8839.11 1
Change 168.07 2005.67 996.91 1678.9
4036.6
Investment 4421.67 7 4888.57 5702.05 5899.50
change -385.00 851.90 813.48 197.45
25184.9 28838. 33373.9 37794.1 41154.6
Inventories 9 35 2 6 3
Change 3653.36 4535.57 4420.24 3360.47
30652.8 55340. 67849.4 83784.7 49833.1
Current Assets 3 09 2 8 4
24687.2 -33951.6
Change 6 12509.33 15935.36 4
Miscellaneous expenses 540.68 531.16 366.34 514.06 673.90
Change -9.52 -164.82 147.72 159.84
66468.6 94582. 114320. 136634. 108079.
Total Assets 2 80 45 18 18

CHAPTER 3:
PROFIT AND LOSS ACCOUNT

ANALYSIS
3.1 INTRODUCTION TO PROFIT AND LOSS
ACCOUNT
The Profit & Loss account is also known as the income
statement. It can be defined as a report that summaries the
revenues and expenses of an accounting period to reflect the
changes in various critical areas of firm’s operation. It is of greatest
interest and import and importance to end-users of accounting
statements because it enables them to ascertain whether the
business operations have been profitable or not during that
particular period.
The important destination between the balance sheet and

income statement is for a period of one year. The two broad
categories of item shown in the income statement are revenue and
expenses. Revenues derived from a companies operation say
manufacturing and selling products. During transaction business has
also incurred revenues other than main business operation.
Expenses are occurred in day-to-day transactions.
Here, expenses regarding manufacturing activities, office and

administrative expenses are considered. By deducting total
expenses from total revenue we get profit and by deducting total
revenue from total expenses we get total loss. Income tax amount is
also decided by profit that incurred in business with help of this
statement.

3.2 PROFIT & LOSS ACCOUNT

(Rs. In Cr.)
IncomeCorporation
: ‘ ' 04
Operating Income 31,649.62 46,159.40 47,989.75 56,913.43 59,848.28
Expenses :
Material Consumed 1,493.23 6,782.47 5,450.92 8,196.95 7,079.11
Manufacturing Expenses 8,696.41 10,504.06 11,500.55 15,937.04 187.43
Personnel Expenses 2,561.88 2,746.48 3,014.71 3,974.79 0.00
Selling Expenses 5,762.50 6,707.69 5,206.03 6,661.41 0.00
Administrative Expenses (3,652.56 (4,104.17 ) (4,129.09 ) (6,015.52 ) 22,466.13
Expenses Capitalized 0.00 0.00 0.00 0.00 0.00
Cost Of Sales 14,861.46 22,636.52 21,043.12 28,754.66 29,732.67
Operating Profit 16,788.17 23,522.88 26,946.62 28,158.77 30,115.61
Other Recurring Income 1,293.04 1,462.35 1,890.94 3,730.50 4,997.67
PBDIT 18,081.21 24,985.22 28,837.56 31,889.27 35,113.28
Financial Expenses 2,753.03 3,548.39 3,718.44 3,724.81 58.96

Depreciation 1,768.02 1,824.22 3,852.76 3,292.80 9,819.62
Other Write offs 0.00 0.00 0.00 0.00 0.00
PBT 13,560.16 19,612.61 21,266.36 24,871.67 25,234.70
Tax Charges 4,958.77 6,685.95 7,321.43 8,041.02 8,920.06
PAT 8,601.39 12,926.66 13,944.93 16,830.64 16,314.65
Non Recurring Items (39.53 ) (89.69 ) 608.73 (623.45 ) 0.00

Other Non Cash 102.57 146.08 (122.87) (564.27) 387.00
Net Profit 8,664.45 12,983.05 14,430.78 15,642.92 16,701.65
Earnings Before 8,664.45 12,983.08 14,430.79 15,642.96 16,701.69
Equity Dividend 3,422.24 5,703.74 6,416.70 6,630.51 6,844.39

Preference Dividend 0.00 0.00 0.00 0.00 0.00
Dividend Tax 438.48 776.33 899.94 1,012.51 1,163.20
Retained Earnings 4,803.73 6,503.01 7,114.14 7,999.95 8,694.10

INTERPRETATION:-
The profit and loss account of the company shows the overall
income and expenditure, made by the company in a particular time
period. The difference between the debit and credit side of the P&L
account, shows the net profit or net loss.
Here, the profit and loss account of the company shows

the satisfactory level but as compared to previous year the
expenses of the company is increases. Here the sales turnover is
increase year by year. The operating income in 2006-07 is 56913.43
and now it is increase by 2934.85 Crore Rs. in 2007-08. So, by this
way the net profit of the company is increase by 1058.73 in 2007-08
as compared to previous year.
While on the other side the expenditure shows the

expenses meet by the company in a particular period. The
expenditure met by the company is highest in 2007-08, while in
other year the expenditure of the company are increases. The
overall analysis of the expenditure side of the company shows the
average increase in expenses of the company.
After analyzing the income and expenditure side of the

company, there is difference between both sides which is known as
the net profit / loss. The net profit of the company shows an overall
increase year by year. In 2003-04 it is 8664.45 Crore Rs. and now it
is increasing and in 2007-08 it is 16701.65 Crore Rs.

3.3 COMPARATIVE ANALYSIS OF PROFIT & LOSS

ACCOUNT
(Rs. In Cr.)
Oil & Natural Gas
Corporation Mar-04 Mar-05 Mar-06 Mar-07 Mar-08
31,649.6 46,159. 47,989. 56,913. 59,848.

Income 2 40 75 43 28
Change 14509.78 1830.35 8923.68 2934.60
14,861.4 22,636. 21,043. 28,754. 29,732
Expenditure 6 52 12 66 .67
Change 7775.06 -1593.4 7711.54 978.01
18,081.2 24,985. 28,837. 31,889. 35,113
PBDIT 1 22 56 27 .28
Change 6904.01 3852.34 3051.71 3224.01
13,560. 19,612. 21,266. 24,871. 25,234
PBT 16 61 36 67 .70
Change 6052.45 1653.75 3605.31 363.03
12,926. 13,944. 16,830. 16,314.
PAT 8,601.39 66 93 64 65
Change 4325.27 1018.27 2885.71 -515.99

CHAPTER: 4
COMMON SIZE STATEMENTS
4.1 COMMON SIZE STATEMENT OF PROFIT AND LOSS

ACCOUNT
Oil & Natural Gas Mar ' Mar ' Mar ' Mar ' Mar '
Corporation 04 05 06 07 08
Income:
Operating Income 96.07% 96.94% 96.21% 93.85% 92.29%
Other Income 3.93% 3.06% 3.79% 6.15% 7.71%
Total Revenue 100.00 100.00 100.00 100.00 100.00%
% % % %
Expenses:
Material Consumed 4.53% 14.24% 10.93% 13.52% 10.92%
Manufacturing Expenses 26.40% 22.06% 23.06% 26.28% 0.29%
Personnel Expenses 7.78% 5.77% 6.04% 6.56% 0.00%
Selling Expenses 17.49% 14.08% 10.44% 10.98% 0.00%
Administrative Expenses -11.09% -8.62% -8.28% -9.92% 34.66%
Expenses Capitalized 0.00% 0.00% 0.00% 0.00% 0.00%
Total Expenses 45.11% 47.53% 42.19% 47.42% 45.85%
PBDIT 54.89% 52.47% 57.81% 52.58% 54.15%

- (1)Financial charges 8.36% 7.45% 7.45% 6.14% 0.09%
(2)Depreciation 5.37% 3.83% 7.72% 5.42% 15.14%
PBT 41.16% 41.19% 42.64% 41.02% 38.92%
Tax Provision 15.05% 14.04% 14.68% 13.26% 13.76%
PAT 26.11% 27.15% 27.96% 27.76% 25.16%
Appropriation of profit
Equity Dividend 10.33% 11.92% 12.36% 11.93% 10.05%
Dividend Tax 1.30% 1.63% 1.40% 1.64% 1.70%
Retained Earnings 14.48% 13.60% 14.20% 14.19% 13.41%

INTERPRETATION OF COMMON SIZE

STATEMENT OF PROFIT AND LOSS ACCOUNT
 For the analysis of Profit & Loss account we have taken the
operating income and other income as base.
 From the analysis of common size statement, we can interpret

that the income of the company increases year by year
excluding 2008.
 The expenditure also increases year by year. It recorded in %.

In current year expenditure is higher than previous year.
 As we see in the table Material Consumed & Manufacturing

Expenses increases very large proportion. It shows that
production of the company increases year by year.
 The PBDIT of the company is also increase in current year. In

previous year it is 52.58% and in current year it is 54.15%.
 The PBT of the company is decrease in current year. In

previous year it is 41.02% and in current year it is 38.92%. In
the current year depreciation is so much because of new
machinery.
 The PAT of the company is also decrease in current year. In

previous year it is 27.76% and in current year it is 25.16%.

4.2 COMMON SIZE STATEMENTOF BALANCE SHEET
(Rs. In Crore)
ONGC March- March- March- March- March-
‘04 ‘05 ‘06 ‘07 ‘08
SOURCE OF FUNDS:
Owner's Fund:
Equity Share Capital 2.14% 1.51% 1.25% 1.57% 1.98%
Reserve & Surplus 58.85% 48.02% 45.95% 43.76% 63.36%
Loan Funds:
Unsecured Loans 17.16% 10.48% 11.13% 11.06% 11.55%
Current Liabilities & 21.85% 39.99% 41.67% 43.61% 23.11%
provisions
Total Liabilities 100% 100% 100% 100% 100%
APPLICATION OF FUNDS:
Gross fixed assets 61.69% 45.45% 41.88% 38.09% 53.16%
Less: Depreciation 53.17% 39.27% 35.02% 31.62% 43.44%
Net fixed assets 8.52% 6.18% 6.86% 6.47% 9.72%
Investment 37.89% 30.49% 29.19% 27.66% 38.08%
Inventories 6.65% 4.27% 4.28% 4.17% 5.46%
Current Assets 46.12% 58.51% 59.35% 61.32% 46.11%
Miscellaneous expenses 0.82% 0.55% 0.32% 0.38% 0.63%
Total Assets 100% 100% 100% 100% 100%

INTERPRETATION OF COMMON SIZE STATEMENT OF

BALANCE SHEET
 Source of Funds :-
 For the source of Funds we have taken the total

Liabilities as 100.
 As we see in the table that in first year borrowing

constitutes a largest part of the source of funds and
after that reserves and surplus constitutes largest part
of the source of funds.
 The Current Liabilities are decrease in 2007-08 by

20.65% as compared to previous year.
For the Year 2003-04

Equity Share Capital 2.14%
Share Application Money 0.00%
Preference Share Capital 0.00%
Reserve & Surplus 58.85%
Loan Funds:
Secured Loans 0.00%
Unsecured Loans 17.16%
Current Liabilities & 21.85%
provisions
2003-04
2.14%
0.00%
21.85% 0.00%
17.16% 58.85%
0.00%
S.V.Equity
Institute
Share Capitalof Management (SVIM)
Share Application Money
22
KADI
Preference [Batch Reserve
Share Capital 2008-10]
& Surplus
Loan Funds: Secured Loans
Unsecured Loans Current Liabilities & provisions


Loan Funds:
Secured Loans 0.00%
provisions
2004-05 1.51%
0.00%
0.00%
39.99%
48.02%
10.48%
0.00%
Equity Share Capital Share Application Money

Preference Share Capital Reserve & Surplus


Loan Funds:
Secured Loans 0.00%
provisions
2005-06 1.25%
0.00%
0.00%
41.67%
45.95%
11.13%
0.00%



Loan Funds:
Secured Loans 0.00%
provisions
2006-07 1.57%
0.00%
0.00%
43.61% 43.76%
11.06%
0.00%



Loan Funds:
Secured Loans 0.00%
provisions
2007-08 1.98%
0.00%
23.11% 0.00%
11.55%
63.36%
0.00%


Application of Funds:-
 For the analysis of application of funds we have taken the

Total Assets as 100.
 From the table we can interpret that the investment in the
company increase in last year compared to previous year. So
it is good for company.
 The Current Assets of the Company in last year is decreasing.
It’s not good for the company.
 We see in the table that net fixed assets increase in last year.
In 2007-08 net fixed assets is 9.72% which is higher than
previous year by 3.25%.
For the year 2003-04
Net fixed assets 8.52%

Investment 37.89%
Inventories 6.65%
Current Assets 46.12%
Miscellaneous expenses 0.82%
2003-04
0.82% 8.52%
46.12%
37.89%
6.65%
Net fixed assets Investment

Inventories Current Assets


Investment 30.49%
Inventories 4.27%
2004-05
6.18%
0.55%
30.49%
58.51%
4.27%



Investment 29.19%
Inventories 4.28%
2006-07
6.86%
0.32%
29.19%
59.35%
4.28%



Investment 38.08%
Inventories 5.46%
2007-08
0.63% 9.72%
46.11%
38.08%
5.46%
Net fixed as sets Investment

Inventories Current As sets
Mis cellaneous expenses

CHAPTER-5:
TREND ANALYSIS
5.1 TREND ANALYSIS OF PROFIT AND LOSS ACCOUNT
(Rs. In Crore)
Oil & Natural Gas Mar ' Mar ' Mar ' Mar ' Mar '
Corporation 04 05 06 07 08
Income:
Operating Income 100.00 145.85 151.63 179,82 189.10
Other income 100.00 113.0 146.2 288.51 386.5
9 4 1
Expenses:
Material Consumed 100.00 454.21 365.04 548.94 474.08
Manufacturing Expenses 100.00 120.79 132.24 183.25 02.16
Personnel Expenses 100.00 117.68 107.21 155.15 00.00
Selling Expenses 100.00 116.40 90.34 115.60 00.00
Administrative Expenses -100.00 -112.24 -113.05 -164.69 715.07
PBDIT 100.00 138.03 159.49 176.37 194.20

Financial charges 100.00 128.89 135.07 135.30 02.14
Depreciation 100.00 103.18 217.91 186.24 555.40
PBT 100.00 114.63 156.83 183.42 186.09
Tax provision 100.00 134.83 147.65 162.16 179.88
PAT 100.00 150.29 162.12 195.67 189.67
Appropriation of profit:
Dividends 100.00 166.67 187.50 193.75 199.99
100.00 177.0 205.24 230.91 265.28
Dividend Tax
5
Retained Earnings 100.00 135.37 148.10 166.54 180.99

TREND ANALYSIS OF OPERATING INCOME
 The above graph of operating income shows continuously

increase in the income compared to the base year 2003-04.
 In the year 2003-04 it was 100% it has been continuously
increase to 189.1% in the year 2007-08. It means it has been
increased 89.1% in this period.
 So it is favorable for the company & increases the reputation of
the company.
TREND ANALYSIS OF PBDIT
 The above graph shows the continuously increasing in the PBDIT

compared to the base year 2003-04.
 In the year 2003-04 it was 100%. And now in 2007-08 it is
194.20. So, it is increase by 94.20%. It is favorable for the
company.
 It has increased due to increase in operating income over the
years.

TREND ANALYSIS OF PBT
 The above graph shows the continuously increasing in the PBT

company.
years.
TREND ANALYSIS OF PAT
 The above graph shows increasing-decreasing in the PAT

company.
years.

5.2 TREND ANALYSIS OF BALANCE SHEET

(Rs. In Crore)
Corporation
SOURCES OF FUNDS:
Owner's Fund:
Equity Share Capital 100.00 100.00 100.00 150.00 150.00
Reserves & Surplus 100.00 116.11 134.30 152.84 175.06
Loan Funds:
Unsecured Loans 100.00 86.92 111.53 132.45 109.42
100.00 .
Current Liabilities &
260.52 328.14 410.54 172.06
Provisions
Total 66,468.6 94,582.8 1,14,320 1,36,634. 1,08,079
Total (%) 2
100.00 0
142.30 .45
171.99 18
205.56 .18
162.60
USES OF FUNDS:
Fixed Assets:
Gross Block 100.00 104.82 116.76 126.90 126.90
Less : Depreciation (100.00) (105.12) (113.30) (122.24) (132.84)
Net Block 100.00 102.97 138.35 155.93 185.55
Inventories 100.00 114.51 132.51 150.07 163.41
Investments 100.00 91.29 110.56 128.96 133.42
Current Assets, Loans & 100.00 180.54 221.35 273.33 162.57
Advances
Miscellaneous expenses 100.00 98.24 67.76 95.08 124.64
not written
Total 66,468.6 94,582.8 1,14,320 1,36,634. 1,08,079
Total (%) 2
100.00 0
142.30 .45
171.99 18
205.56 .18
162.60

SOURCE OF FUNDS:-
TREND ANALYSIS OF NET WORTH
Networth
200%
150% 150% 150%
100% 100% 100% 100%
50%
0%
March-'04 March-'05 March-'06 March-'07 March-'08
Series1
 Here the net worth of the company is not increasing till 2006-07.
 It was 100% in the base year 2003-04 and in 2007-08 it is 150%
in the year 2006-07. so it is increase by 150%
 The reason behind that reserve and surplus increase very rapidly,
but share capital remains same.
TREND ANALYSIS OF BORROWINGS
Borrowings
140
132.45
120
111.53 109.42
100 100
86.92
80
60
40
20
0
M-04 M-05 M-06 M-07 M-08
Series1
 Borrowings of the company are decreasing in 2004-05 .But, then

after it are increasing till 2006-2007. In 2007-08 it is also
decreasing.
 In the year 2003-04 it is 100% but in the year 2007-08 it is
109.42% so it is increase by only 9.42%.

TREND ALYSIS OF CURRENT LIABILITIES AND

PROVISIONS
Current Liabilities & Provisions
500%
400% 410.54%
300% 328.14%
260.52%
200% 172.06%
100% 100%
0%
Series1
 The above graph of trend of current liabilities & provisions

shows continuously increase compared to the base year 2003-
04 till 2007-08
 In the year 2003-04 it was 100% it has been continuously
increase to 410.54% in the year 2006-07. It means it has been
increased 310.54% in this period. Then, after in 2007-08 it is
decreasing by 238.48.
 Current liabilities & provisions constitutes of liabilities &
provisions.
 The reason behind those sundry creditors and other current
liabilities are increasing.

APPLICATION OF FUNDS:-
TREND ANALYSIS OF NET FIXED ASSETS
Net Fixed Assets
200% 185.55%
150% 155.93%
138.35%
100% 100% 102.97%
50%
0%
Series1
 The above graph of net fixed assets shows continuous

increasing as compared to base year 2003-04
 In the year 2003-04 it was 100% it increased by 85.55 in the
year 2007-08.
 In real it was 5,668.46 in the year 2003-04 and increased to
10518.01 in the year 2007-08.
TREND ANALYSIS OF INVESTMENTS
Investments
128.96% 133.42%
150% 110.56%
100% 91.29%
100%
50%
0%
March- March- March- March- March-
'04 '05 '06 '07 '08
Series1

 The above graph of trend of investments shows fluctuation but

investments have been decreased compared to the base year
2003-04 in 2004-05. Then, after it is continuously increasing.
 In the year 2003-04 it was 100% but in the year 2004-05 it has
been reduced to 91.29% but then it has been increased to
110.56% in the year 2005-06. After that in the year 2006-07 it
has increased to 18.4% and also after that in the last year it is
increased to 133.42%.
 It has reduced in the year 2004-05 because of sales of
investments in this year.
TREND ANALYSIS OF INVENTORIES
Inventories
200% 150.07% 163.41%

132.51%
150% 100% 114.51%
100%
50%
0%
March- March- March- March- March-
'04 '05 '06 '07 '08
Series1
 The above graph of trend of inventories shows continuously

increase till the last year.
 2003-04 year is based year.
 In the year 2003-04 it was 100%. In the 2007-08 year it is
163.41%. So, it is increase by 63.41%

CHAPTER-6
CASH FLOW STATEMENT

ANALYSIS
6.1 INTRODUCTION TO CASH FLOW STATEMENT
Cash is the nerve center around which business activity flow.

The profit figure is shown in the profit & loss statement in the book
profit. It does not represent cash profit. For knowing the cash profit
we prepare cash flow statement in the business. This statement
provides information about the cash flows of an enterprise. This
statement is also useful in taking economic decisions that are taken
by users require an evaluation of the ability of an enterprise to
generate cash and cash equivalents. The cash flow statement deals
with the provision of information about the historical changes in
cash. Cash flow statement which classifies cash flows during the
period among (i) Operating (ii) investing (iii) financing activities.

6.2 CASH FLOW STATEMENT
(Rs. In Crore)
ONGC March-‘0 March-‘0 March-‘0 March-‘0 March-‘0
4 5 6 7 8
EBIT 196477 213924 275323 275,720 276,678
Depreciation 61874 83,347 95,353 109,011 125,272
Other non- (32,708) (34,283) 1,850 1,801 464
operating
items
(Inc) / Dec. in (4,182) (10,610) (24,082) (21,441) (23,716)
working
capital
Cash flow 221,461 273,597 348,444 365,090 378,697
from
operations
Taxes paid (65,531) (75,102) (83,148) (83,267) (83,557)
(net of
refund)
Net cash flow 155,930 198,495 265,297 281,823 295,141
from ope act
Exceptional 180 7,747 - - -
items
Net cash flow 156110 206242 265297 281823 295141
after excp act
Dividend paid (48282) (73170) (32518) (93501) (93636)
(incl dividend
tax)
Net capex (84506) (122003) (182830) (183113) (183425)
and strategic
inv
Net cash after 23322 11070 49948 5208 18080
capex
Inc / (Dec) in (24650) (218) - - -
short term bor
Inc / (Dec) in (601) (202) 133 160 192
long term bor
(Inc) / Dec in - - - - -
investments
-Equity issue / 0 0 - - -
(Buyback)
Cash flow (25251) (419) 133 160 192
from fin act
Others 9181 (17191) (200) (151) (100)
Opening Cash 87416 94669 88128 138009 143226
Add: - - - - -
Amalgamatio
n and other
adj
Change in 7252 (6540) 49881 5217 18171
Cash
Closing Cash 94669 88128 138009 143226 161398

ANALYSIS OF CASH FLOW STATEMENT

 Cash Flow From Operating Activities :
• From the table of cash flow statement of the company

we can interpret that in 2008 cash from operating
activities is increase as compared to previous year. But
in 2008 PAT is decrease more compared to previous
years.
• The other reason is that current assets of the company

is increasing every year excluding 2008 and also
current liabilities are increasing with minor changes
but in last year it decreases.
 Cash Flow From Investing Activities :
• From the cash flow statement we can interpret that

cash from investing activities is performed very good
in last three years.
• The reason behind it is that the purchase of the fixed

assets by the company is increase. So we can say that
the company expands its business.
 Cash Flow From Financing Activities :
• From the cash flow statement we can say that the cash
from financing activities is increase year by year.
• From the cash flow statement we can say that

company repaid the borrowing and loan. And also paid
to the dividend to the shareholders.

CHAPTER - 7
RATIO ANALYSIS
Ratio analysis is a widely used tool for financial analysis. It is

defined as the systematic use of ratio to interpret the financial
statement, so that the strength and weakness of a firm as well as its
historical performance and current financial condition can be
determined. The term ration refers to the numerical and
quantitative relationship between two items/variables. The
relationship can be expressed as:-
1. Percentage
2. Fraction
3. Proportion of numbers
The rational of ratio analysis lies in the fact that it makes

related information comparable. A single figure by itself has no
meaning but when expressed in terms of a related figure, it yields
significant inferences.
Ratio analysis thus, a quantitative tool enables analysis to

draw quantitative answers such as:-
 Is the net profit adequate?

 Are the assets being used efficiently?
 Is the firm solvent?
 Can the firm meet its current obligations and so on?

7.1 UTILITY OF RATIO ANALYSIS

The use of ratio was started by banks for ascertaining the liquidity
and profitability of the company’s business for the purpose of advancing
loan to them. It gradually become popular and other creditors began to
use them profitably. Now even the investor calculates ratio from the
published account of the company before investing their savings. The ratio
analysis provides useful information to management, which would help
them in taking important policy decision. Diverse group of people make
use of ratios, to determine the particular aspect of the financial position of
the company, in which they are interested.
1) Profitability
Useful information about the trend of profitability is available
from the profitability ratios. The gross profit ratio, net profit ratio
and ratio of return on investment give a good idea of profitability of
business.
2) Liquidity
In fact, the use of this ratio is to ascertain the liquidity of the
business. The current ratio and liquid ratio will tell whether the
business will be able to meet its current liabilities as and when they
mature.
3) Efficiency
The turnover ratio are excellent guides to measures the
efficiency of managers. For e.g. the stock turnover will indicate how
efficiency the sales are being made, the debtors turnover shows the
efficiency of collection department and assets are used in business.
4) Inter- firm comparison

The absolute ratio of the firm are not of much use, unless they
are compared with similar ratio of other firm belongs to the same
industries.
5) Indicate Trend
The ratio of the last three to five years will indicate the trend
in the respective fields.
6) Useful for budgetary Control

Regular budgetary reports are prepared in business where the
system of budgetary control in use. If various ratios are prepared in
these reports, it will give a fairly good idea about various aspect of
financial position.
7) Useful for decision making

Ratios guide the management in making some of the
important decision.

7.2 CLASSIFICATION OF RATIO
Ratios can be classified into four broad group :-
1. Liquidity Ratio
2. Leverage / Capital structure Ratio
3. Profitability Ratio
4. Activity / Efficiency Ratio
A)LIQUIDITY RATIOS
Liquidity is the most important factor in successful financial
management. A firm should have enough money to meets its short
term liabilities, as and when they become due for payment. If affirm
fails to meet its short term liabilities frequently, its prestige and
creditworthiness would be adversely affected. A very high degree of
liquidity is also bad; idle assets earn nothing. Therefore it is
necessary to strike a proper balance between high liquidity and lack
of liquidity.
A.1) Current Ratio:

This most widely used ratio shows the proportion of current
assets to current liabilities. It is also known as ‘ Working Capital
Ratio’. It is a measure of short term financial strength of business
and shows whether the business will able to meet its current
liabilities. Generally, it is believed that ratio of 2:1 is good and
shows a comfortable working capital position. But this ratio is
differing company by company. The formula for calculating this ratio
is as under:-
Current Ratio = Current Assets

Current Liabilities
Rs. In Crore
Year Mar-‘04 Mar-‘05 Mar-‘06 Mar-‘07 Mar-‘08
Current Assets 30652.83 55340.09 67849.42 83784.78 49833.14

Current 14517.73 37821.16 47638.17 59601.18 24979.07
liabilities &
Provision
Current 2.11 1.46 1.42 1.41 1.99
Ratio(times)

Interpretation:-
This calculation implies that the fluctuation in
the current ratio. As compared to previous year the current year’s
ratio shows the better liquidity position. In the previous year this
ratio is 1.41:1 and in the current year it is 1.99:1 which shows
increase in liquidity. The reason behind that cash balance and
receivable is increasing.

A-2) Acid Test / Quick Ratio:
The Acid test ratio is the ratio between quick current assets
and current liabilities and is calculated by dividing the quick assets
by the liquid liabilities.
Most people believe that liquid ratio is acid test ratio, but
sometimes business is able to repay its liquid quick assets. The
reason behind that is emergency requirement cash and business
cannot get it from debtors, so quick assets include cash balance +
investment certificate that can be immediately transferable into
cash. The satisfactory ratio is 1:1 but lower limit is 0.5:1. Here quick
assets do not include stock.
= Quick Assets (Current assets-Inventories)

Current Liabilities
Rs. In Crore
Quick Assets 5467.84 26501.74 34475.5 24183.6 8678.51
Current
14,517.73 37,821.16 47,638.17 59,601.18 24,979.07
liabilities
Quick 0.37 0.70 0.72 0.40 0.35
Ratio(times)
Interpretation:-
So, as per the current year ratio of the company
is up to some extent satisfactory. This ratio shows the repay ability
of the company which is satisfactory as per lower level all over the
year. As compared to previous year in current year it is not good. In
2006-07 it is 0.40:1 and in current year it is 0.35:1.

B) CAPITAL STRUCTURE/LEVERAGE RATIO
The second category of financial ratios is leverage or capital
structure ratios. The long term creditors would judge the soundness
of a firm on the basis of the long term financial strength measured
in terms of its ability to pay the interest regularly as well as repay
the installment of the principal of due dates or in one lump sum at
the time of maturity.
B.1) Long Term Funds to Fixed Assets Ratio:
This ratio is obtained by dividing the long term funds with

fixed assets. Here long term fund include owner’s fund plus long
term debt. This ratio must be 1:1 or more. If fixed capital is less than
fixed assets, it would mean that short term funds have been used in
purchasing fixed assets the business would be put to trouble.
= Owner’s fund + Long term debt
Fixed Assets
Rs. In Crore
Long term funds 12833.12 11342.15 14148.51 17247.96 14567.60
Fixed assets 5,668.46 5,836.53 7,842.20 8,839.11 10,518.01
Long term fund to 2.26 1.94 1.80 1.95 1.38
fixed assets ratio
(times)
Interpretation:-
This ratio is decreasing year by year till 2005-06, In
the year 2003-04 it is 2.26:1 and now it is 1.38:1 in 2007-08. It is
decrease by 0.88.Because of increase in fixed assets after 2006.

B.2) Total Debt Equity Ratio:
This ratio can be called as a proprietary ratio and it is another

form of it. It establishes relationship between the outside long term
& short term liabilities and owner’s funds. This ratio is obtained by
dividing the total debt by net worth.
= Total Debt
Net Worth
Rs. In Crore
Debt 11,407.79 9,916.22 12,722.61 15,109.07 12,482.71
Net Worth 40543.1 46845.42 53959.67 61923.93 70617.4
Debt Equity 0.28 0.21 0.24 0.24 0.18
Ratio (times)
Interpretation:-
This ratio shows the 0.18 Rs. of liabilities against
the 1Rs. of owner’s capital. This ratio is high in 2004 and then it is
decrease. It is good for company as the interest burden is low.
Because of Net worth is increase year by year.

C)PROFITABILITY RATIO
Profit is the main objective of any business enterprise.
Besides, profitability is the measure of efficiency. The owners invest
their funds in expectation of receiving reasonable return. Hence
profitability ratios are very important from the view point of various
shareholders.
C.1) Gross Profit Ratio:
Gross profit margin ratio reflects the efficiency with which

management produces each unit of product. It expressing the
relationship between Gross Profit earned to Net Sales. This ratio
usually expressed as percentage.
= Gross Profit X 100

Sales
Rs.
In Crore
Year Mar- ‘04 Mar- ‘05 Mar- ‘06 Mar- ‘07 Mar- ‘08
Gross 19,180. 25,867.1 29,653. 32,694.5 35,032.5
Profit 90 6 87 9 1
Sales 32,511. 46,712.1 48,200. 56,903.7 60,137.2
92 4 87 0 6
Gross 59.00 55.38 61.52 57.38 58.25
Profit
Ratio (%)
Interpretation:-
Gross profit ratio shows the relation between gross
profit and sales. That means how much proportion of gross profit in
sales. This ratio is increase in last year compared to previous year.

C.2) Operating Profit Ratio:
It is a ratio showing relationship between Operating Profit

and Net Sales. It shows the efficiency of management.
= EBIT X 100
Net Sales
Rs
. In Crore
EBIT 25293 66 28596.47 24984.8 23161 16313.19
Sales 32,511.92 46,712.14 48,200.87 56,903.70 60,137.26
Operating 77.80 61.22 51.83 40.70 27.13
Profit Ratio
(%)
Interpretation:-
Operating profit ratio shows the proportion of profit
before interest and tax in sales revenue. This ratio is in 2004, it is
77.80%, in 2005t is 61.22%, in 2006it is 51.83%, in 2007 it is
40.70%, in 2008 it is 27.13% which means operating profit is
decreasing. Because of depreciation is increasing year by year. It’s
not good for the company.

C.3) Net Profit Ratio:
Net Profit is obtained when operating expense, interest and

taxes are subtracted from the gross profit. The net profit ratios
measured by dividing PAT (Profit After tax) by sales. This ratio
indicates the firm’s capacity to withstand adverse economic
conditions.
= PAT X 100
Sales
Rs. In Crore
PAT 8,664.45 12,983.05 14,430.78 15,642.92 16,701.65
Sales 32,511.92 46,712.14 48,200.87 56,903.70 60,137.26
Net Profit 26.65 27.79 29.94 27.49 27.77
Ratio (%)
Interpretation:-
Net profit ratio shows the relationship of PAT with the
sales. This ratio is in 2004, it is 26.65%, in 2005 it is 27.79%, in
2006 it is 29.93%, in 2007 it is 27.49%, in 2008 it is 27.77% which
means PAT is always near to 26% to 30%. Because of Tax charges is
increasing year by year.

C.4) Cost of Goods Sold Ratio:
This ratio indicate percentage share of sales in consumed

cost of goods sold and conversely what proportion is available for
meeting expenses such as selling and general distribution expense
as well as financial expenses consisting of taxes, interest and
dividend.
= COGS X 100
Sales
Rs. In Crore
Cost of Sales 14,861.46 22,636.52 21,043.12 28,754.66 29,732.67
Sales 32,511.92 46,712.14 48,200.87 56,903.70 60,137.26
COGS Ratio 45.71 48.46 43.66 50.53 49.44
(%)
Interpretation:-
This ratio indicates proportion of cost of good sold in
the sales revenue. The cost of good sold ratio is always near about
45% to 50%. This ratio shows fluctuating decreasing. Because of
Sales is increasing year by year more than compared to Cost of
Sales.

C.5) Return on Total Investment:
Profitability ratio can also be computed by relating the profit

of a company to its total assets. The ROA may also be called profit –
to –asset ratio. This ratio can be computed by dividing the PAT by
total assets.
= PAT X 100
Total Assets
Rs. In Crore
PAT 8,601.39 12,926.66 13,944.93
16,830.6 16,314.6
4 5
Total Assets 66,468.6
94,582.80
1,14,320. 1,36,634. 1,08,079.
2 45 18 18
Ratio of 12.94 13.67 12.20 12.32 15.10
return on
investment
(%)
Interpretation:-
This ratio shows company’s profit earned on the total

investment made in the company. This ratio is increase in current
year. In 2004 it is 12.94% and now it is 15.10% in 2008. So it is
increasing by 2.16%. Because of total assets is decreased compared
to previous year. It is good for the company.

C.6) Earning Per Share:
Financial analyst regards the earning per share as an

important measure of profitability. EPS measures the profit available
to the equity shareholders on a per share basis, that is the amount
that they can get on every share held. It is computed by dividing the
PAT to the No. of equity share.
= Profit After Tax

No. of equity share
Rs. In Crore
PAT 8,601.39 12,926.66 13,944.93 16,830.64 16,314.65
No. of equity
1,425.93 1,425.93 1,425.93 2,138.89 2,138.89
share
EPS Ratio 6.03 9.07 9.78 7.87 7.63
Interpretation:-
The earning per share is increases. But in 2007 &
2008 EPS is decreases because PAT is decrease in 2008. EPS is as
6.03, 9.07, 9.78, 7.87, 7.63. It is good for shareholders. They get
good return.

C.7) Selling Expense Ratio:
This ratio shows the relationship between the selling

expenses and sales obtained by the company. This ratio is obtains
dividing the selling expenses by the sales as follows:-
= Selling Expenses X 100

Sales
Rs. In Crore
Selling expenses
1786.29 1941.77 -40.27 -560.70 206.73
Sales 32,511.92 46,712.14 48,200.87 56,903.70 60,137.26
Selling 5.49 4.16 -0.08 -0.98 0.34
expenses
ratio(%)
Interpretation:-
The average of all year’s ratio shows the reduction in
selling expenses of the company. The ratios are 5.49, 4.16, -0.08,
-0.98, 0.34. Because the advertising and marketing expenses
decrease year by year and sales are increases year by year. But in
2008 the advertising expenses increases.

D) ACTIVITY RATIO
The activity ratio measures the efficiency with which assets
are being used in business. They are also known as Turnover Ratio.
The efficiency with which the assets are used would be reflected in
the speed and rapidly with which assets are converted into sales.
The greater the rate of turnover or conversation, the more efficient
is the utilization / management, other things being equal.
D.1) Inventory Turnover Ratio:
This ratio indicates how fast inventory is sold. A low ratio

would signify that inventory does not sale fast stays on the self or in
the warehouse for long time.
= COGS
Inventory
Rs. In Crore
COGS 14,861.4 22,636.5 28,754.6
21,043.12 29,732.67
6 2 6
Inventory 25,184.9 28,838.3 37,794.1
33,373.92 41,154.63
9 5 6
Inventory 0.59 0.78 0.63 0.76 0.72
turnover
Ratio
(times)
Interpretation:-
Here, we have taken total inventory as base. The
overall result of this ratio shows year by year fluctuating decreasing
of inventory turnover. The result of 2004 to 2005 it is increasing rate
but after 2005 it is decreasing in 2006. Because of COGS is
decreasing. And then it is increasing. Because of COGS is increasing.

D.2) Total Assets Turnover Ratio:
The amounts invested in business are invested in all assets

jointly and sales are affected through them to earn profits. So in
order to find out relation between total assets to sales. Total assets
include net fixed assets and current assets.
= Sales
Total Assets
Rs. In Crore
Sales 32,511.92 46,712.14 48,200.87 56,903.70 60,137.26
Total 1,14,320.4 1,36,634.1
66,468.62 94,582.80 1,08,079.18
Assets 5 8
Total Assets 0.49 0.49 0.42 0.42 0.56
Turnover
Ratio
(times)
Interpretation:-
Here, we have taken as total assets as base. The total
assets are increasing year by year till 2008. The investment in
assets in 2003-04 it is 66468.62 and in 2007-08 it is 108079.18
which was approximately 1.6 times more. The company is using the
assets efficiently that’s why the ratio is increasing trend.

D.3) Fixed Assets Turnover Ratio:
Here we have also taken fixed assets as base. To ascertain

the efficiency and profitability of business of business, the total fixed
assets are compared to sales. This ratio can be finding out by
dividing sales with the total fixed assets. The more the sales in
relation to amount invested in fixed assets, the more efficient is the
use of fixed assets.
= Net Sales
Fixed Assets
Rs. In Crore
Sales 32,511.92 46,712.14 48,200.87 56,903.70 60,137.26
Fixed Assets 5,668.46 5,836.53 7,842.20 8,839.11 10,518.01
Fixed Assets 5.74 8.00 6.15 6.44 5.72
Turnover
Ratio
Interpretation:-
This ratio shows an efficiently and profitability of the
business. The overall result of this ratio shows year by year
fluctuating decreasing. This show the fixed assets are being used
effectively to earn profits in the business.

CHAPTER – 8
RECOMMENDATIONS AND
SUGGESTION
By analyzing the annual report of the company, we would
have to recommend and suggest that:-
 From the analysis of the liquidity ratio we are able to recommend

that the liquidity position of the company is good, and also it is
able to meet it current obligation.
 The capital structure ratio shows the performance of the company

is increasing, because the company repaid the long term
borrowing.
 The balance sheet figures are showing the declining trend since
last years. It should be the reason for higher inventory level which
unnecessary blocked the money. For higher the profitability ratio of
the firm, it is required to increase the sales along with.
 To increase the work efficiency of the workers as well as of the

staff members, arrangement of different training programs like
meetings, seminars, conferences, coaching classes etc. is required.
 For the innovation of new market, select capable market

representatives who are more efficient to recover the more market
share.
 Try to maintain the quality level as per the market demand which
satisfies the customers more.
 In order to increase the profit the firm should keep proper control
over the expenses retaliating to the purchase of goods,
manufacturing and labours for that, proper supervision and timely
comparison of actual with budgeted overheads should be taken.
This will help the management to know the causes and taking
competitive actions to reduce the expenses.
 Try to reduce the debt collection period which should be main

sources for working capital.

 Use more credit facility which is given by the creditors.
 Firm should also use more short term loans to recover the working
capital requirement because the interest rate for short term loans
is less and it should be flexible to use.
 In order to maximize wealth under uncertainty, the firm must pay

enough dividends to satisfy investors. It should help to increase
the moral of the investors and side by side also helps in long term
financial strength of the firm. So, by increasing profits, the firm
should pay dividends regularly.

CHAPTER-9
ANNEXURE-A
BALANCE SHEET
Rs. In Croore
Oil & Natural Gas
Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07 Mar ' 08
Corporation
SOURCES OF FUNDS:
Total Share Capital 1,425.93 1,425.93 1,425.93 2,138.89 2,138.89
Equity Share Capital 1,425.93 1,425.93 1,425.93 2,138.89 2,138.89
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 39,117.17 45,419.49 52,533.74 59,785.04 68,478.51
Revaluation Reserves 0.00 0.00 0.00 0.00 0.00
Net worth 40,543.10 46,845.42 53,959.67 61,923.93 70,617.40
Secured Loans 0.00 0.00 0.00 0.00 0.00
Unsecured Loans 11,407.79 9,916.22 12,722.61 15,109.07 12,482.71
Total Debt 11,407.79 9,916.22 12,722.61 15,109.07 12,482.71
Total Liabilities 51,950.89 56,761.64 66,682.28 77,033.00 83,100.11
Application Of Funds:
Gross Block 41,007.62 42,983.85 47,882.35 52,038.07 57,463.78
Less: Accum.
35,339.16 37,147.32 40,040.15 43,198.95 46,945.77
Depreciation
Net Block 5,668.46 5,836.53 7,842.20 8,839.12 10,518.01
Capital Work in Progress 25,184.99 28,838.35 33,373.92 37,794.16 41,154.63
Investments 4,421.67 4,036.67 4,888.57 5,702.05 5,899.50
Inventories 2,405.69 2,569.19 3,038.49 3,033.76 3,480.64
Sundry Debtors 2,317.80 3,729.31 3,704.28 2,759.44 4,360.37
Cash and Bank Balance 15.34 20.88 699.80 27.42 22,417.66
Total Current Assets 4,738.83 6,319.38 7,442.57 5,820.62 30,258.67

ANNEXURE-B
ANNUAL RESULT
Oil & Natural Gas
Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07 Mar ' 08
Corporation
56,903.7 48,200.8 46,712.1 32,511.9
Sales 60,137.26
0 7 4 2
Other Income 5,010.66 4,243.10 2,354.99 1,729.79 1,547.08
Stock Adjustment -114.11 19.73 -211.58 -29.86 11.15
Raw Material 681.69 392.75 373.17 184.09 135.07
Power And Fuel 0.00 0.00 0.00 0.00 0.00
Employee Expenses 1,145.37 2,981.78 1,272.66 1,002.92 955.25
Excise 288.74 270.89 278.00 349.20 447.99
Admin And Selling
0.00 0.00 0.00 0.00 0.00
Expenses
Research And
0.00 0.00 0.00 0.00 0.00
Development Expenses
Expenses Capitalized 0.00 0.00 0.00 0.00 0.00
24,765.5 19,142.7 21,030.7 13,281.8
Other Expenses 28,054.74
6 7 1 9
Provisions Made 0.00 0.00 0.00 0.00 0.00
28,472.9 27,345.8 24,175.0 17,680.5
Operating Profit 30,080.83
9 5 8 7
Interest 58.98 21.50 46.97 37.71 46.75
32,694.5 29,653.8 25,867.1 19,180.9
Gross Profit 35,032.51
9 7 6 0
Depreciation 9,797.92 9,499.44 8,457.28 6,201.61 5,571.86
Taxation 8,920.05 8,027.29 7,313.74 6,685.12 4,958.77
15,642.9 14,523.3 12,980.4
Net Profit / Loss 16,314.54 8,650.27
2 9 3
Extra Ordinary Item 0.00 475.06 640.54 0.00 0.00
Prior Year Adjustments 387.11 0.00 -92.61 -2.62 14.16
Equity Capital 2,138.87 2,138.87 1,425.93 1,425.93 1,425.93
Equity Dividend Rate 0.00 180.00 250.00 200.00 240.00
Agg. Of Non-Prom.
553.13 5,531.32 3,687.74 3,687.74 3,685.60
Shares (in Lacs)

ANNEXURE-C
9.1 AUDITOR’S REPORT
1. We have audited the attached Balance Sheet of OIL AND

NATURAL GAS CORPORATION LIMITED (the Company) as at 31 March,
2008, the Profit and Loss Account and also the Cash Flow Statement
for the year ended on that date, annexed thereto in which are
incorporated the Companys share in the total value of assets,
liabilities, expenditure, income and net profit of 103 blocks under
New Exploration Licensing Policy (NELPs) / Joint Venture (JVs)
accounts for exploration and production out of which 91 NELPs /JVs
accounts have been certified by other firms of Chartered
Accountants and remaining 12 NELPs/JVs as certified by the
management (Refer Note 21.1.1 to 21.1.4 of Schedule 28 of the
financial statements). These financial statements are the
responsibility of the Companys management. Our responsibility is to
express an opinion on these financial statements based on our
audit.
2. We conducted our audit in accordance with auditing

standards generally accepted in India. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting
the amount and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by the management, as well as
evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
3. We have placed reliance on technical/commercial

evaluation by the management in respect of categorization of wells
as exploratory, development and producing, allocation of cost
incurred on them, depletion of producing properties on the basis of
the proved developed hydrocarbons reserves, liability for
abandonment costs, liabilities under NELP for under performance
against agreed Minimum Work Programme and allocation of
depreciation on process platforms to transportation and facilities.
4. As required by the Statement on the Companies (Auditors

Report) Order, 2003 (as amended) issued by the Central
Government of India in terms of Section 227(4A) of the Companies
Act, 1956, we enclose in the Annexure (read with paragraph 1
above) a statement on the matters specified in paragraph 4 and 5 of
the said Order.

5. Further to our comments referred to in paragraph 4 above
we report as follows:
5.1. We have obtained all the information and explanations

which to the best of our knowledge and belief were necessary for
the purposes of our audit;
5.2. In our opinion, proper books of account as required by law

have been kept by the Company so far as it appears from our
examination of those books;
5.3. The Balance Sheet, Profit and Loss Account and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
5.4. In our opinion, the Profit and Loss Account, the Balance
Sheet and the Cash Flow Statement comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956.
5.5. Disclosure in terms of clause (g) of sub-section (1) of

section 274 of the Companies Act, 1956 is not required as per
notification number GSR 829(E) dated 21st October, 2003 issued by
the Department of Company Affairs.
5.6. In our opinion and to the best of our information and

according to the explanations given to us, the said accounts read
with notes to accounts and in particular Note 2 of Schedule 28 in
respect of recognition of Sales Revenue in respect of crude oil and
natural gas, give the information required by the Companies Act,
1956 in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in
India:
a) in the case of the Balance Sheet, of the state of affairs of

the Company as at 31st March, 2008;
b) in the case of the Profit & Loss Account, of the profit of the
Company for the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows of

the Company for the year ended on that date.
Annexure to the auditors report
(Referred to in paragraph A of our report of even date)

1. a) The Company has generally maintained proper records
showing full particulars including quantitative details and situation
of fixed assets.
b) We are informed that the fixed assets other than those

which are underground/ submerged/ under joint venture, having
substantial value have been physically verified by the management
in phased manner. The reconciliation of physically verified assets
with the book records is in progress. Discrepancies noticed on
physical verification and consequential adjustments with regard to
discrepancies are carried out on completion of reconciliation.
According to the information and explanations given by the
management, in our opinion, the same is not material.
c) The Company has not disposed off substantial parts of

fixed assets during the year.
2. a) The inventory has been physically verified (excluding

inventory lying with third parties, at some of the site- locations,
inventory with joint ventures and material in transit) during the year
by the management. In our opinion, the frequency of verification is
reasonable.
b) The procedures of physical verification of inventory

followed by the management to the extent verified were generally
reasonable and adequate in relation to the size of the Company and
nature of its business.
c) The Company has generally maintained proper records

of inventory except for recording of consumption at a few of its site-
locations. The discrepancies noticed on verification between the
physical stock and book records were not material having regard to
the size of the operations of the Company. In case where
discrepancies noticed on physical verification have been identified
with inventory records, necessary adjustments have been carried
out in the books. In respect of those cases where the reconciliation
is not complete, the management has stated that the same would
be adjusted in due course.
3. The Company has not taken nor granted any loans, secured
or unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Accordingly clauses 4 (iii)(a), (b) (c) and (d) of the Companies
(Auditors Report) Order, 2003 are not applicable to the Company.
4. In our opinion, and according to the information and

explanations given to us, the internal control procedures are
generally adequate and commensurate with the size of the
Company and the nature of its business with regard to purchases of
inventory, fixed assets and sale of goods. During the course of our
audit we have not observed any continuing failure to correct major
weakness in internal controls.
5. a) According to the information and explanations given to

us, there is no contract or arrangement referred to in section 301 of
the Companies Act, which are required to be entered in the register
maintained under the section.
b) Accordingly, the provisions of clause 4 v (b) of the

Companies (Auditors Report) Order, 2003 is not applicable to the
Company.
6. The Company has not accepted any deposits from the

public.
7. In our opinion, the Company has an internal audit system

commensurate with the size and nature of its business.
8. We have broadly reviewed the books of account relating to

materials, labour and other items of cost maintained by the
Company pursuant to the Rule made by the Central Government for
the maintenance of cost records under section 209 (1 )(d) of the
Companies Act, 1956 and we are of the opinion that prima facie the
prescribed accounts and records have been made and maintained.
9. The Company is generally regular in depositing with

appropriate authorities undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees
State Insurance, Income Tax, Sales Tax, Service Tax, Wealth Tax,
Customs Duty, Excise Duty, Cess and other material statutory dues
applicable to it. There are no such material outstanding statutory
dues accrued in accounts as of the last date of the financial year
concerned for a period of more than six months from the date they
became payable.
10. The Company has no accumulated losses at the end of the

current financial year and has not incurred cash losses either during
the year or during the immediately preceding financial year.
11. The Company has not issued any debentures and not
defaulted in repayment of dues to financial institutions or banks.
12. In our opinion and as per the information and explanation

given by the management, the Company has not granted loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi
mutual benefit fund/ society. Accordingly, the provision of clause
(xiii) of the Companies (Auditors Report) Order, 2003 are not
applicable to the Company.

given by the management, the Company is not dealing in or trading
in shares, securities, debentures and other investments.

given by the management, the terms and conditions on which the
Company has given guarantees for loans taken by others from
banks or financial institutions are not prejudicial to the interest of
the Company, since these guarantees are given for the subsidiary/
company promoted by the Company.
16. In our opinion, the term loans have been applied for the
purpose for which they were raised.
17. On an overall examination of the balance sheet of the

Company, we report that no funds raised on short terms basis have
been used for long term investment.
18. The Company has not issued any preferential allotment of

shares during the year.
19. The Company has not issued any debentures during the
year.
20. The Company has not raised any money by way of public
issue during the year.
21. According to the information and explanations given to us,

no fraud on or by the company which is material in amount and
nature has been noticed or reported during the course of our audit.
For K. K. Soni & Co. For S. C. Ajmera & Co. For Singhi &
Co.
K.K. Soni Arun Sarupria Pradeep Kr.

Singhi
Partner(Mem.No.07737) Partner (Mem.No.78398) Partner
(Mem.No.50773)
For P. S. D. & Associates For

Padmanabhan Ramani
&
Ramanujam Chartered Accountants
D.D. Dadhich Padmanabhan R.

Partner (Mem. No. 71909) Partner (Mem. No. 13216)
New Delhi 25th June, 2008

CHAPTER – 10
BIBLIOGRAPHY
For the preparing the report we uses the following:-
1. Annual Report of the company of 2007-08.
2. Websites :- www.ongc.com
www.google.com
www.kotaksecurities.com
www.moneycontrol.com
3. Book:- Financial Accounting, 3rd Edition, PHI Learning

Pvt. Ltd., Author- R. Narayanswamy, Part III, Chapter
11, Financial Statement Analysis.


Financial Analysis of ONGC

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Financial Analysis of ONGC

1.1 COMPANY PROFILE

During the pre-independence period, the Assam Oil

After independence, the national Government realized the

Until 1955, private oil companies mainly carried out

In 1955, Government of India decided to develop the oil

With this objective, an Oil and Natural Gas Directorate was

S.V. Institute of Management (SVIM) 1

1.2 Company History

In April 1956, the Government of India adopted the Industrial

Oil and Natural Gas Corporation (ONGC) was set up in 1956

ONGC functions as the primary arm of the Government as

To strengthen reserves accretion portfolio and open up areas

The Company owns Dornier-228 aircraft, chetak helicopter,

S.V. Institute of Management (SVIM) 2

1.3 General Information

1.4 Corporate Information

S.V. Institute of Management (SVIM) 3

1.5 DIFFERENT STRUCTURES

ONGC Has Different Types Structures like ASSETS/ BASINS/ PLANTS/

1) Mumbai High Asset, Mumbai

1) Western Offshore Basin, Mumbai

1) Uran Plant, Uran

1) Mumbai Region, Mumbai

S.V. Institute of Management (SVIM) 4

1) Keshava Deva Malaviya Insti. of Petroleum Exploration (KDMIPE),

S.V. Institute of Management (SVIM) 5

1.6 VISON STATEMENT

To be a world-class Oil And Gas Company integrated in energy

Imbibe high standards of business ethics and organizational

Abiding commitment to safety, health and environment to

Foster a culture of trust, openness and mutual concern to

Stive for customer delight through quality products and

Integrated In Energy Business

Provide value linkages in other sectors of Energy business.

Create growth opportunities and maximize shareholder value.

Dominant Indian Leadership

S.V. Institute of Management (SVIM) 6

1.7 Products’ Detail:

Product Name Year Month Sales UOM Sales

Kerosene/ATF 2008 12 10093 Metric Tones 39.36

Others 2008 12 0 11.29

1.8 Capital Structure:

EQS: Equity Shares

S.V. Institute of Management (SVIM) 7

1.9 Achievements / Awards

ONGC has bagged the Business Standard Star Public Sector

(2)ONGC enters retail – launches OVaL - completes integration

(3)Super CEO- Subir Raha - Business India

(4)ONGC secures Award for its Safety Initiatives

ONGC’s high standards in Safety, both in its Offshore and Onshore

(5)ONGC receives Biggest Wealth Creator Award

ONGC received Biggest Wealth Creator Award amongst all the

S.V. Institute of Management (SVIM) 8

(7)ONGC Bags NPMP Awards In Creativity And Finance

ONGC’s production engineers dominated the stage in the “Creativity

(8)ONGC Bags Three Greentech Foundation Awards

ONGC has bagged three Greentech Excellence awards for

(9)Dr J V S S Narayana Murthy Wins National Mineral Award 2001

Harvesting the fruits of information technology needs two

(10)Partha P Mitra Awarded National Mineral Award-2001

The National Mineral Award for 2001 was conferred on ONGC's SG

(11)Four ONGC Scientists Bag National Mineral Award-2001