PROFITABILITY REPORT ON ONGC

ANINDYA GHOSH

ROLL NO. 521057173

BBA (4TH SEMESTER)

SIKKIM MANIPAL UNIVERSITY

LC CODE: 02737

STUDY ON PROFITABILITY REPORT

FOR O.N.G.C.

A PROJECT REPORT

Submitted By:

ANINDYA GHOSH

Roll No. 521057173

Centre Code No. 02737

BBA (4th Semester)

In the partial fulfilment for the award of the degree

of

BACHELOR OF BUSINESS ADMINISTRATION

I hereby declare that the Project Report entitled

“PROFITABILITY REPORT

ON O.N.G.C.”

Submitted in partial fulfilment of the requirement for the degree of

‘BACHELOR OF BUSINESS ADMINISTRATION’

This is my original work not submitted for the award of any other degree, Diploma, fellowship or any

other similar title of prize

Signature of the Student:

Name of the Student: ANINDYA GHOSH

Roll Number: 521057173

Centre Code: 02737

This is to certify that the Project Report entitled

“PROFITABILITY REPORT ON O.N.G.C.“ submitted

in partial fulfilment of the requirements for the

degree of Bachelor of Business Administration from

Sikkim Manipal University of Health, Medical &

technological Science. ANINDYA GHOSH has

worked under my supervision and guidance and that

no part of this report has been submitted for the

award of any other degree, diploma, fellowship or

other similar titles or prizes and that the work has

not been published in any journal or magazines.

Signature of the Guide:

Name & Qualification of the Guide:

Mr. Abhisek Jain ( MS FINANCE, MBA, CFA )

The Project Report Entitled

“PROFITABILITY REPORT ON O.N.G.C.”

Submitted By:

ANINDYA GHOSH

Roll No. 521057173

BBA (4th Semester)

Centre Code No. 02737

Is approved and acceptable in quality and form

INTERNAL EXAMINER EXTERNAL EXAMINER

Name: Name:

_______________________________ ______________________________

Signature Signature

My project has come to a successful end, all because of hard work and

the valuable contributions made by different people who were directly or

indirectly involved in completion of my project for BBA, and at this

juncture I would like to thank them all. I should start with my Director

Sir Mr. SUSHIT GHOSH and Director Madam Mrs. SUCHORITA

GHOSH and my very much respected Project Guide Mr. ABHISEK

JAIN, for giving me his precious time that was very much needed for the

project. He had put his expertise and talent to its best use and had

painstakingly cleared all the hurdles that I faced while doing my research

for the project. He acted as a true professional and always maintained the

relationship as is expected from a project guide. He gave me enough

confidence at times when it was needed for me and helped me to

complete this project in order and on schedule.

Moreover, I am also thankful to the faculty members of my college,

my friends and my parents for their guidance and crucial suggestions at

critical phases of the project work. Therefore, I am greatly indebted to all

of them for their valuable guidance and constructive suggestions,

perhaps, without which it would have not been possible to complete this

project at all.

ANINDYA GHOSH

Cover Page

Title Page………………………………………………………………..……....2

Annexure:

A…………………………………………………………………..……………….3

B……………………………………………………………………..……….........4

C……………………………………………………………………..……….........5

Acknowledgement…………………………………………….…..…………....6

Introduction……………………………………………………………................8

About O.N.G.C……………………………………………….………………... 9

Auditor’s Report…………………………………………………………………10

Financial Statements:

Profit and Loss Account………………………………………………………..14

Balance Sheet……………………………………………………………………19

Cash Flow Statement………………………………………...………………....20

Analysis of Financial Report:

Profit & Loss……………………………………………………………………..14

Balance Sheet…………………………………………………………………….19

Cash Flow………………………………………………………………………...20

Conclusion……………………………………………………………………….21

INTRODUCTION

o ONGC is now a Fortune 500 Company (with 413th rank) and is the only and the first ever Indian Company to figure in the Fortune’s list of ‘World’s Most Admired Companies” in the year 2007. Ranked as the number two E&P Company in world (Platt’s ranking of top 250 Energy Companies 2011), ONGC remains India’s Most Valuable PSU in terms of net profit and net-worth.

o ONGC has been ranked at 172nd position in the Forbes Global 2000 list for the year 2011 of the world’s biggest companies released on 21st April 2010. The ranking is based on Sales (US$ 22.6 billion), Profits (US$ 4.3 billion), Assets (US$ 44.6 billion) and Market Capitalization (US$ 53.2 billion). 57 Indian Companies find placed in the list among which ONGC has been ranked at No.3.

o ONGC has been ranked 24th among the Global publicly-listed Energy companies as per ‘PFC Energy 50” (2011)

o Financial Express in its latest listing of top 500 Companies of India for the year 2010-11 has placed ONGC, second on composite overall ranking amongst all companies in India. ONGC also maintains its position as most valuable PSU of the Country.

o Business World, in its latest survey on Most Respected Companies 2011 (published on 14th February, 2011) ranked ONGC fourth amongst all the companies in both private and public sector in India. ONGC has emerged as not only the sector leader (oil & gas sector) but also the most respected company amongst all the PSUs.

o Transparency International in a recently released report ‘Promoting Revenue Transparency: 2011 Report on Oil & Gas Companies’ has ranked ONGC at top on parameters for organisational disclosure. ONGC ranked at 26th on reporting on anti-corruption programmes and at 16th place on Country-level disclosure – International Operations.

o ONGC has been ranked 361st position as per Fortune Global 500 - 2011 list, based on revenues, profits, assets and shareholder’s equity.

ABOUT O.N.G.C.

Represents India’s Energy Security

ONGC has single-handedly scripted India’s hydrocarbon saga by:

Establishing 7.38 billion tonnes of In-place hydrocarbon reserves with more than 300 discoveries of oil and gas; in fact, 6 out of the 7 producing basins have been discovered by ONGC: out of these In-place hydrocarbons in domestic acreages, Ultimate Reserves are 2.60 Billion Metric tonnes (BMT) of Oil Plus Oil Equivalent Gas (O+OEG).

Cumulatively produced 851 Million Metric Tonnes (MMT) of crude and 532 Billion Cubic Meters (BCM) of Natural Gas, from 111 fields. ONGC has bagged 121 of the 235 Blocks (more than 50%) awarded in the 8 rounds of bidding, under the New Exploration Licensing Policy (NELP) of the Indian Government.

ONGC’s wholly-owned subsidiary ONGC Videsh Ltd. (OVL) is the biggest Indian multinational, with 33 Oil & Gas projects (9 of them producing) in 15 countries, i.e. Vietnam, Sudan, South Sudan, Russia, Iraq, Iran, Myanmar, Libya, Cuba, Colombia, Nigeria, Brazil, Syria, Venezuela and Kazakhstan.

AUDITOR’S REPORT

Dear Sir(s)

1. We have examined the attached consolidated finalcial information of ONGc Group of companies (the ‘Group Companies’) comprising consolidated Statements of Assets and Liabilities (Annexure-I). Consolidated Cash Flows Statements (Annexure III) for the years ended on March 31, 2010 and Notes on Accounts (Annexture XXXI – A and B) for the years ended in March 31, 2009, 2010 and nine months ended on December 31, 2010 as approved by the Board Of Directors of Oil and Natural Gas Corporation Limited (“ONGC Ltd.”) and in terms of our engagement agreed upon with you in accourance with our engagement letter dated February 22nd, 2011 in connection with the proposed Further Public Offering (FPO) of Equity Shares by the “Selling Shareholder”.

The preparation and presentation of this financial information is the responsibility of the Company’s Management.

2. the attached consolidated financial information have been correctly extracted by the Company’s Managenent from the Group Companies audited fimancial statements for the years ended on March 31, 2009 and 2010, unaudited financial statements with limited review for the nine months ended on Devember 31, 2010.

The consolidated financial statements of the Group Companies for the year ended on March 31, 2009 and 2010 were audited in accordance with the auditing standards genarally accepted in india , by M/s Arun K Agarwal and associates and M/s Ray and Ray, M/s S, Bhandari & Colk and M/s M Kuppuswamy P S G& Co. on the unqualified audit report issued with respect to the consolidated financial information of the Company for such period in accoudance with IGAAS.

We conducted a revew , in accourdance with Standard on Review Engagements (SRE) 2410, of the Company’s Consolidated Statement of Assets and Liabilities, Consolidated Profit & Loss Account and Consolidated Cash Flow Statement as in and for the nine months period ended on Devember 31, 2010. Based on our review, nothing has come to our attention that causes us to believe that such consolidated financial statements are not prepared, in all material respects, in accordance with statements are not prepared, in a ll material respects, in aplicable provisions of the Companies Act 1956

3. We did not audit /review the financial statements of associates, subsidiaries, jintly controlled entities and joint ventures / NELP blocks for the financial years ended Devember 31,2010. These financial statements for the relevent periods have audited and reported upon by their auditors whose reports have been furnished to us . We have placed reliance on the reports of such auditors in so far as it relates to

the amounts included in these consolidated statements of Assets and Liabilities, consolidated Profit and Loss Accounts and Consolidated Cash Flow Statements in accoudance with IGAAS.

4. We have performed such tests and procedures, wich in our opinion, were nessery for the examination of the attached consolidated financial information. These tests and procedures, mainly involved comparison of the attached financial information with the Company’s audited reviewed financial statements for the respective years.

5. Based ib above we report that in our opinion and accouding to the information and explanation given to us we have found the attached consolidated financial information to be correct and the same have been used in the sonsolidated financial information appropriately.

6. In accordance with th requirements the Secutities and Exchange Board of india and the terms of our engagement agreed with you, we have also examined the other consolidated financial information as stated in table below as on and for the years ended on March 31, 2010, prepared by the Management and approved by the Board of Directors of ONGC ltd. For the purpose of inclusion in the Red Herring Prospectus and Prospectus in connection with th propoesed FPO of Rquity Shares of the Company.

7. In this regard, for the years ended March 31, 2009 and 2010, the other consolidated financial information as listed below has been correctly extracted from the sonsolidated financial statements based on theaudit reports submited by M/s Arun K Agarwal & Associates and M/s Kalyanwalla & Mistry together with M/s P.S.D. & Associates relied upon by us .

CASH FLOW STATEMENT

CONCLUTIONSInview of the several subsidiaries and joint bentures of the company with each entity operating under different regulatory requirements in different countries and adopting policies and discloser the information requirement under Accounting Standards (AS)- 15 on Employee Benefit is not disclosed in Consolidated Financial statement due to impractibility:

Disclosure requirement is respect of subsidiaries companies have been disclosed to the extent abailable from their audited/unaudited accounts.

Figures in the accounts are stated in Rs. Million except those in parenthesis which would otherwise have become Nil on account of rounding off.