ONGC

(Financial analysis)
Group B
About ONGC
Indian multinational oil and gas company headquartered in Dehradun,
India
Public Sector Undertaking (PSU) of the Government of India, under
the administrative control of the Ministry of Petroleum and Natural
Gas
India's largest oil and gas exploration and production company
Produces around 69% of India's crude oil and around 62% of its
natural gas
Market capitalisation was INR 2.6 trillion (as on 31
st
March 2013)
India's second largest publicly traded company
RECOGNITIONS
Worlds no. 3 E&P company, as per Platts ranking
ONGC is ranked 23 among the global oil and gas companies by
Forbes list
'2012 EU Industrial R&D Scoreboard' listed ONGC at 36 position in
the list of oil & gas companies based on Research and
Development (R&D) expenditure; the only company in this list
from India
VISION
To be the global leader in integrated energy business through
sustainable growth, knowledge excellence and exemplary
governance practices

MISSION
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.
Strive for customer delight through quality products and services
INTEGRATED 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
Shareholding
pattern
69.23
9.69
6.27
1.13
0.04
0
10.09
1.83
0.07
1.6
Shareholding pattern
President of India Banks, FI and Insurance Companies Foreign Institutional Investors
Mutual Funds & UTI NRIs Qualified Foreign Investor
Government Companies Other Corporate bodies Employees
Public
Total number of
shares: 8,555,490,120
FINANCIAL
ANALYSIS
COMPARING THE FINANCIAL STATEMENTS PREPARED FOR THE
YEAR ENDED 31
ST
MARCH, 2013 WITH THE ONES PREPARED
FOR THE YEAR ENDED 31
ST
MARCH,2012
BALANCE SHEET
In million Rupees
Particulars As on 31
st
March 2013 As on 31
st
March 2012
Long-term borrowings 88,427.49 52,085.83
Deferred tax liabilities 1,48,490.07 1,27,258.48
Other Long term liabilities 16,224.42 10,758.24
Long-term provisions 2,52,962.76 2,41,739.57
Short-term borrowings 1,16,080.84 1,00,538.21
Trade payables 1,86,188.99 1,76,035.87
Other current liabilities 1,70,970.11 2,02,916.89
Short-term provisions 10,482.14 23,924.21
Non-Current Liabilities
Current
Liabilities
Long Term
Borrowings
Long term borrowings increased by 36,342 million which may help to reduce
requirement of liquid capital for short duration.
Various subsidiaries and joint ventures, including MRPL, OMPL and PLL, increased
secured long term borrowings from banks by 34,451 million
Deferred Tax
Liabilities





Other Long
Term Liabilities
Deferred Tax Liabilities:
Liabilities:
Increased from 206,041.64 millions to 249,603 (by 21%) over 2012
Major chunk comes from Depreciation and depletion of producing properties
Assets
Increased 28 % over 2012
Due to provisions for unpaid income tax and doubtful debts
Net increased by 5,466 million out of which 4,908 million increased due to
liquidated damages
Long-term
Provisions
Long term provisions:
Increased by 11,223 million out of which 6,919 million increased in post-retirement
medical & terminal benefits and provision for abandonment increased by 3,273
million
Short-term
Borrowings
Short term borrowings:
Decreased risk by significantly increasing unsecured short term loans from banks by
around 190 % (39,700 million) over the previous year, which also signifies
creditworthiness of organization

Trade Payables
Trade payables to other than micro and small enterprises increase by 10,089 million,
contributing to increase in trade payables by 10,153 million
Other Current
Liabilities
Though superannuation benefits increased significantly, ONGC managed to reduce
other current liabilities by 31,947 million by paying back most of advances from
customers and capital goods
Short Term
Provisions
Managed to decrease short term provisions by 56 %, approx. 13,450 million, by
reducing proposed dividend, hence also saving on tax on dividend
Equity and
Liabilities

Shareholderss Fund As at 31
st
March 2013 As at 31
st
March 2012
Share Capital 42777.60 42777.60
Reserves and Surplus 1482502.45 1321613.70
In respect of subsidiary, MRPL, Capital redemption Reserve on
redemption of Preference share capital is of 91.86 Million (previous
year 45.93 Million)
The subsidiary, ONGC Videsh Limited has followed the AS 11 - Effects
of Changes in Foreign Exchange Rates financial statements of Non-
integral Foreign Operation. Accordingly, the resulting exchange gain of
12,914.34 million (Previous Year 26,573.80 million) has been accounted
as foreign currency translation reserve.
Current Assets
Particular 2012-2013 2011-2012
Current Assets 829.01 8,795.36
Inventories 127,803.87 131,680.10
Trade receivables 153,956.08 117,180.86
Cash and Cash equivalents 196,190.51 278,914.26
Short-term loans and
advances
53,322.96 52,209.53
Other current assets 26,089.99 22,249.77
Total 558,192.42 611,029.88
In million rupees
Current
Investments
Particular As on 31
st
March 2013 As on 31
st
March 2012
Non Trade
Current Maturity of Long Term Investment
Investments in Government or Trust
Securities



-



8,791.85
Other Investments
Investments in Mutual Funds (Quoted)
Other Investments (Unquoted)

421.20
407.81

3.51
-
Total Current investments Total 829.01 8,795.36

Quoted Investments 421.20 3.51

Total Unquoted Investments 407.81 8,791.8
2012 value of current assets was dominated by the amount received from
maturity of term plan
2013 value of current assets comprised only of investments
This difference was the reason for such a drastic change in total current
investment value of ONGC
In million rupees
Inventories
Particular As on 31
st
March
2013
As on 31
st
March
2012
Raw Material 4,305.19 17,969.05
Raw Material in transit 26,029.22 32,634.97
30,334.41 50,604.02
Finished Goods (note 24.2) 39,624.96 28,836.97
Less: Provision for Stock loss 5.91 5.91
39,619.05 28,831.06
Traded Goods 0.76 1.15
Stock in Process 2,351.30 1,961.45
Stores and spare parts
-on hand 57,642.41 49,045.52
-in transit 3,468.33 6,398.56
61,110.74 55,444.08
Less: Provision for non-moving 5,864.99 5,344.56
55,245.75 50,099.52
Unserviceable Items 252.6 182.9
Total 1,27,803.87 1,31,680.10
No significant change in total value of inventories
In million rupees
Trade
Receivables
Significant change in considered goods (others) which has caused a large
change in trade receivables in 2013 as compared to 2012
Crude Oil Sales Agreements (COSA) with various organizations was signed.
Since the COSA is made effective from 1 April, 2010, necessary adjustments
made in books of accounts during 2012-13, by way of issue of credit notes
Particular As on 31
st
March
2013
As on 31
st
March
2012
Secured, Considered Good
Trade Receivables - Outstanding for a period exceeding
six months
Other

108.85
-
108.85
7.48
-
7.48
Unsecured, Considered Good unless otherwise stated
Trade Receivables - Outstanding for a period exceeding
six months:
- Considered Good
- Considered Doubtful
Less:Provision for Doubtful debts


38,307.25
666.86
666.86
38,307.25
30,369.85
618.46
618.46
30,369.85
Other:
- Considered Good
- Considered Doubtful
- Less:Provision for Doubtful debts

115,539.98
220.84
220.84
115,539.98
86,803.53
17.81
17.81
86,803.53
Total 153,956.08 117,180.86
Cash and cash
equivalents
Particular As on 31
st
March 2013 As on 31
st
March 2012
Balance with Bank On Current Accounts 11,655.55 16,344.09
Cash on hand 17.30 16.54
Short Term Investment in Mutual Funds 19.75 1,092.06
Bank Deposit 183,322.00 260,599.97
Deposit towards margin money against
guarantees issued

62.63

56.13
On Deposit Accounts for more than 12
months maturity

724.80

388.60
Unclaimed Dividend Account 388.48 416.87
Total 196,190.51 278,914.26
Bank balance and bank deposits reduced owing to the spending by ONGC for the
purpose of acquisitions
Short-term
loans and
advances
Particular As on 31
st
March 2013 As on 31
st
March 2012
Total 53,322.96 52,209.53
No significant change in short term loans and advances
Cash call receivables from JV partners increased significantly from Rs. 7380.52
million to Rs. 10153.00 million
NON-
CURRENT
ASSETS
FIXED ASSETS
The company has not disposed off a substantial part of fixed
assets during the year
LONG-TERM LOANS AND ADVANCES
Granted secured loans to three parties
DEFFERED TAX
An asset that may be used to reduce any subsequent periods
income tax expense
STATEMENT OF PROFIT AND
LOSS
FOR THE YEAR
ENDED 31
ST

March, 2013
REVENUES
In terms of the decision of Government of India (GOI), the
company has shared under-recoveries of Oil Marketing Companies
(OMCs) on price sensitive products viz. Diesel, Domestic LPG and
PDS Kerosene for the year 2012-13 by extending the discount in
the prices of Crude Oil, Domestic LPG and PDS Kerosene based on
the rates of discount communicated by Petroleum Planning and
Analysis Cell (PPAC) and Ministry of Petroleum and Natural Gas
(MoP&NG)

OTHER INCOMES
Interest income from long term investments, deposits with banks,
loans and advances to associate/employees
Income from tax refund, site restoration fund deposit, delayed
payments from customers
Dividend income, excess provisions written back, liabilities no
longer required written back, profit on sale of investment,
contractual receipts
PRODUCTION, TRANSPORTATION, SELLING AND
DISTRIBUTION EXPENDITURE
Government of India has revised the Cess rate from 2500/MT to
4500/MT w.e.f.17.03.2012 resulting in the material increase in the
expenditure
During the year, company recognized additional liability of 5,077
million towards Revision in Long Service Rewards Scheme
And 18,504.79 million towards superannuation benefits to
employees
FINANCE COST
It includes foreign currency loans, short term loans, cash credit,
lease finance charges, foreign exchange fluctuations and the like
TAX
MAT Credit
Deferred tax
Fringe benefit tax
Financial
Health
Liquidity Ratios 2012-13 2011-12
Current Ratio 1.14 1.21
Debt-Equity Ratio 0.06 0.04
Debtor Turnover Days 34 28
Earning Per Share 28.31 32.90
Book Value Per Share 177 158
Net Profit to Equity 16.04 20.81
Considering the fact that Current ratio, earnings per share and net profit to
equity has decreased, the financial position of ONGC is not as strong as it was an
year back
The same can be confirmed by increased debt-equity ratio and debtor turnover
days
The only positive for the shareholders is the increase in Book value per share

OVERALL
PERFORMAN
CE

Total production during FY'13 (including overseas assets) has been
58.71 MMtoe; slightly lower than the production during FY'12
(61.18 MMtoe) mainly on account of lower production from South
Sudan and Syria; two countries badly affected by the geo-political
unrest.
Besides, the natural decline in domestic matured fields has also
contributed a little to the overall dip in production


Considering this conservative and capital-strained
macroeconomic ecosystem largely characterized by a mediocre
growth outlook, ONGC performed well, by most standards,
registering the highest-ever turnover of `833.09 billion (up 8.35%
from FY'12)
The turnover of the ONGC Group at `1,658.49 billion has also been
the highest-ever
The Net Profit stood at `209.257 billion. This was 16.7% less than
previous year primarily due to sharing the highest-ever under-
recovery burden of `494.21 billion which is 11.1% higher than the
previous year
Payment of additional Cess of `42.14 billion was also another
factor that contributed to the fall in our profit