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NCBA&E

National College of Business Administration & Economics


WCC

A Project on
RATIO ANALYSIS OF
OIL & GAS DEVELOPMENT COMPANY
LIMITED, PAKISTAN

Project Advisor
Prof. FAHAD BASHIR
Department of Business Administration Session 2013-2017
FINANCIAL ACCOUNTING

This write-up has been prepared and submitted to fulfill the partial
requirement for the degree of Business Administration.

Submitted by:

Student Id. Student Name Signature

BS-FA02-10 FARIA ANWAAR

BS-FA02-06 ZEESHAN SHAHZAD

Approved by:
Prof. FAHAD BASHIR
Department of Business administration
NCBA&E JANUARY 06, 2016
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Undertaking:

The project title RATIO ANALYSIS OF OIL & GAS DEVELOPMENT


COMPANY LIMITED, PAKISTAN has been done by Faria Anwaar
and Zeeshan Shahzad as a partial fulfillment of the
requirements for the degree of business administration from
National College of Business Administration and Economics.

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Acknowledgments:

First of all, we are grateful to ALMIGHTY ALLAH for grant


of the endurance and patience required in carrying out the
Project. We are also thankful to our respected and capable
teachers for their timely advice and cooperation. We are also
grateful to our loving parents, for the prayers and
encouragement that helped us at every stage of the Project.

The assignment was carried out under the able guidance of


Prof. FAHAD BASHIR, a true professional who has
excellent command over the subject. He helped us to conceive
the project to start with and later-on sorted out our numerous
queries and enabled to complete the project. We are extremely
thankful to him for his precious time and dedication.

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Dedications:

We dedicate this project to our loving parents, whose prayers are


always with us. We confer this project to all the teachers in our whole
educational career. Along with all, we bestow our project to some
special personalities, whose help led us towards the completion of this
project.

Faria Anwaar
Zeeshan Shahzad

Declaration:

This project is the result of indigenous efforts and this will not be
presented in any other University/Institute for any other degree or
qualification.

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TABLE OF CONTENT
Sr. Pg.
Description
No No
1. Company Profile 6
i. Historical Overview 6
ii. Geographical Presence 9
iii. Product Portfolio 10
iv. Vision 10
v. Mission 11
2. Corporate Information 12
i. Board Of Directors & Their Profiles 12
ii. Future Projects 16
3. Corporate Social Responsibility 17
4. Balance Sheet 18
5. Profit & Loss Account 20
6. Ratio Analysis 21
i. Liquidity Ratios 21
i. Efficiency Ratios 21
ii. Profitability 21
iii. Solvency Ratios (Short And Long Term) 22
iv. Return On Investment Ratios 22
7. Ratio Analysis Solutions With Interpretations 23
8. Conclusions And Recommendations 24
9. Notes To Accounts 25

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1. COMPANY PROFILE
INTRODUCTION
Oil and Gas Development I. HISTORICAL OVERVIEW
Company Islamabad (OGDCL) is Oil and Gas Development Company Limited
the countrys leading provider in commonly known as OGDCL is a Pakistani multinational
Energy and Petrol Sector. This
company came into existence under oil and gas company. It has primary listing on Karachi
an Ordinance on 20th September Stock Exchange, and secondary listings on London,
1961 to ensure the promotion of
Lahore and Islamabad stock exchanges. Established in
Pakistans Oil and Gas products.
In its early days OGDCL has 1961 by the Government of Pakistan, it was turned into a
received loans and grants from
public listed company on 23 October 1997.
various donor agencies like Asian
Development Banks, Canadian
Today it is involved in exploring, drilling, refining
International Development Agency
and the World Bank. and selling oil and gas in Pakistan. It is the market leader
However, the company has in terms of reserves, production and land. It is based on
achieved its place in the developing
companies as between 1968 to 1982 Jinnah Avenue, Blue Area in Islamabad, with the
it discovered May oil fields. The Government of Pakistan holding 74% stake in the
OGDCL is responsible for research
company. Rests are held by private investors.
and development of Oil, Gas and
Energy products in the Country.
It strives to meet the future In 2013, it has revenue of PRs. 223.365 billion and
needs and make explorations profit before tax soaring at PRs. 90.777 billion. It has
throughout the country. The
repeatedly ranked among the Forbes Global 2000. Guided
company is listed in all stock
markets of the Country and also in by its vision and mission, OGDCL is "Exploring to serve
London Stock Market since the Country" by carrying out intensified exploratory
December 2006.
efforts which culminated in a record 2D and 3D seismic

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data acquisition during the fiscal year 2014-15.

Moreover, fast track seismic data processing/ interpretation and active drilling campaigns
alongside working diligently for completion of ongoing development projects were limelight of the year.
Going on, the Company is committed to carry on the aggressive exploratory endeavors and accept new
challenges to continue playing a pivotal role in enhancing
Pakistan's energy security and ensure sustainable growth
2015
while safeguarding the business image as a socially Oil and Gas
responsible corporate citizen and safe operator. Development Company Limited
(OGDCL) is the national oil and
On May 4, 2009, the government of Pakistan gas Company of Pakistan and
flagship of the Country's Energy
appointed a Citigroup-led consortium to advise the state-run & Petroleum sector. The
Privatization Commission on the sale of 10 to 15 per cent Company is the local market
leader in terms of reserves,
(or 430 to 645 million shares) of the company. production and acreage.
It was established in 1961
OGDCL is the second Pakistani company to have as a Public Sector Corporation
been listed at the London Stock Exchange. The company is & later converted to a Public
Limited Company in October
also listed in Pakistan at all the three exchanges of the 1997.
country namely Karachi Stock Exchange (KSE), Lahore The Company was listed
on all three stock exchanges of
Stock Exchange (LSE) and Islamabad Stock Exchange Pakistan in October 2003 and its
(ISE). Global Depository Shares
started trading on the London
Stock
OGDCL is exposed to the following operational and Exchange in December
non-operational risks that can unfavorably affect its 2006. Government of Pakistan is
the majority shareholder and
operations and financial performance. owns 74.97% shares of the
Company as at 30 June 2015.
Crude oil price

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Environmental risks
2014
Exploration and drilling risks OGDCL was initially
Exchange rate created under an Ordinance in
1961 as a Public Sector
Law and order Corporation.
Legislation This subsequently in
pursuance of the Petroleum
Reserve Depletion Policy 1994 was converted
from a statutory Corporation
Under performance of oil and gas field
into a Public Limited
Company with effect of 23
The company managed to drill more than one third
October 1997.
of the total wells drilled in the country during 2010. The The Government of
Pakistan owns 74.97% of the
company managed to drill more than one third of the total
shares of the Company as at
wells drilled in the country during 2010. In addition to that, 30 June 2014
OGDCL was also joint venture partner in sixteen wells
drilled by other operators.

During the fiscal year ended June 30, 2006 the Company made several oil and gas discoveries,
including at Nim-1, Dars Deep-1, Tando Allah Yar North-1, Kunnar Deep-1 and Bahu-1. OGDCL's daily
production, including share from joint ventures averaged 39,659 barrels (6,305.3 m3) of oil; 937 million
cubic feet (26,500,000 m3) of gas, and 358 metric tons of liquefied petroleum gas.

The Company holds exploration acreage comprising 40 exploration licenses covering an area of
75,905 square kilometers, including 16 exploration licenses covering an area of 28,066 square kilometers
granted to OGDCL during fiscal 2006. During 2009-2010, the company acquired four new exploration
blocks (Channi Pull, Jandran west, Lakhi Rud and Mari east), covering area of around 4,795 Square
kilometers. Three exploration licenses namely Khiranwala, Thatta and Thatta east were surrendered and
operatorship of offshore Indus-S was transferred to BP Alpha.

OGDCL is the local market leader in terms of


acreage, reserves and oil & gas production. Guided by
its vision and mission and equipped with its strategic
objectives, robust debt-free balance sheet and a
dedicated professional workforce, the Company is
well positioned to deliver upstream growth and
improved profit margins maximizing shareholders
wealth while contributing to the wellbeing of the
communities where it operates.

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OGDCL holds the largest exploration acreage in


2013
Pakistan covering 21% o1 the total exploration acreage Oil & Gas Development
Company limited (OGDCL) is the
awarded as of 30 June 2013. The Company also enjoys the
largest oil &gas exploration and
largest recoverable hydrocarbon reserves in rho Country production company of Pakistan.
It was established in 1931 as
holding 37% of all and 30% of natural gas reserves as at
a public sector corporation and later
31 December 2012. During fiscal year 2012-13, The converted to a public limited
company in October 1997.
Company contributed 54% of Pakistan's total oil
The Company was listed on
production and 28% of its total natural gas production. all three, stock exchanges of the
country in October 2003 and Its
In line with the Company's strategic vision for Global Depository Shares started
enhancing its reserves and production base, OGOCL trading on the London Stock
Exchange in December 2006.
acquired 29 more Exploration Licenses in March 2013, Government of Pakistan is
potentially augmenting its hydrocarbon asset portfolio. the majority shareholder and owns
74.97% shares of the Company as at
Furthermore, while moving forward on a Well thought out 30 June 2013.
plan. The Company is committed towards last track
completion of its major development projects leading to significant boost to in its existing production
volumes.

II. GEOGRAPHICAL PRESENCE


OGDCL exploratory assets currently constitute sixty three (63) owned and operated joint venture
exploration licenses along with holding working interest in six (6) blocks operated by other exploration
and production companies. Having spread across all four (4) provinces namely Punjab, Sindh, KPK and
Baluchistan, the Companys exploratory licenses cover an area of 115,037 sq. km which is 32% of the
Countrys total exploration acreage awarded as of 30 June 2015.

Lease Map

Summary of Leases
Province Operated Non-
Operated
Punjab 13 5
Sindh 48 24
Balochistan 5 -
KPK 3 5

Total 69 34

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Exploration Licenses
Summary of Exploration Licenses
Province/Area Operated Non-Operated
Punjab 15
Sindh 12
Balochistan 24 1
KPK 10 2
Offshore 2 3
Total 63 6

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This represents the largest exploration acreage held by any Energy & Petroleum Company in
Pakistan. Province/area wise breakdown of the Companys exploration licenses is as follows:

Punjab Sindh Baluchistan KPK Offshore Total


Operated 15 12 24 10 2 63
Non-Operated - - 1 2 3 6

OGDCL Development and Production Leases (D&PLs) portfolio comprises sixty nine (69) owned
and operated joint venture D&PLs along with holding working interest in thirty four (34) leases operated

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by other exploration and production companies. These D&PLs are present in the aforesaid four (4)
provinces of the Country. Province wise breakdown of the Companys D&PLs is as follows:

Punjab Sindh Baluchistan KPK Total


Operated 13 48 5 3 69
Non-Operated 5 24 - 5 34
III. PRODUCT PORTFOLIO
Being the market leader in E&P sector of Pakistan in terms of acreage, reserves and oil and gas
production, OGDCL is making efforts to enhance reserves and production base with the aim to boost
nations energy supply and contribute in economic growth of the Country. The Companys main
hydrocarbon products along with their respective average daily net production during the fiscal year
2014-15 are as follows:

Products Unit of Measurement Average Net Production


Crude Oil Barrels per day 40,818
Gas MMcf per day 1,143

IV.

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V.

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2. CORPORATE INFORMATION

1. BOARD OF DIRECTORS & THEIR PROFILES

MR. ZAHID MUZAFFAR


Has over 36 years of diversified experience.
Holds a Bachelor of Economics from the University of CHAIRMAN

the Punjab.
Has attended various management courses.

MR. ARSHAD MIRZA


Is a career civil servant.
M.Sc. (Public Administration) from Quaid-e-Azam
University, Islamabad in 1981
DIRECTOR
joined Ministry of Petroleum and Natural Resources on
22 July 2013
assumed the charge of the Federal Secretary on 23
January 2015
MR. SAIF ULLAH CHATTHA
The Chief Secretary of Baluchistan.
Bachelor of Arts degree from Government College,
Lahore and Bachelor of Law degree from Punjab DIRECTOR

University, Law College


has served as Assistant Commissioner, Sui (Dera Bugti),
Sibi and Usta Mohammad

MR. ISKANDER MOHAMMED KHAN


Director of the Premier Group of Companies
Chairman of the Pakistan Polypropylene Woven Sack
DIRECTOR
Manufacturers Association,
Mr. Khan holds a degree in Law and Chartered
Accountancy.

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MR. MUHAMMAD ALI TABBA


Chief Executive of Lucky Cement Ltd,
also heads Yunus Textile Mills, a home textiles unit with DIRECTOR
subsidiaries in the U.S.A
also runs the Aziz Tabba Foundation

MR. ZAFAR MASUD


Director and Co-Founder of Burj Capital
Mr. Zafar Masud obtained his MBA in Banking from the
DIRECTOR
Institute of Business Administration,
Bachelor of Commerce from the Hailey College of
Commerce, University of the Punjab, Lahore.

PRINCE AHMED OMAR AHMEDZAI


Belongs to the khan of the Kalat Family of Baluchistan.
Executive Director of Agha Techy Construction DIRECTOR

graduated from the University of Baluchistan in Political


Science

SAYED SHAFQAT ALI SHAH


Managing Director of Matiari Sugar Mills Ltd
CEO of Matol (Pvt) Limited.
has taught International Relations at the University of DIRECTOR

Sindh and the University of Virginia


holds a Ph.D. in Foreign Affairs from the University of
Virginia

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MR. RAHMAT SALAM KHATTAK


holds a Bachelor of Arts degree from the University of Peshawar
was elected District Nazim of Karak DIRECTOR
has also been associated with education and founder of first
modern management sciences institute in Peshawar

MR. MUHAMMAD YAWAR IRFAN KHAN


serves as Chairman of the Asifa Irfan Foundation Trust
Muhammad Yawar Irfan Khan holds a Masters in Business DIRECTOR
Administration
served as a Director of the Lahore Transport Company

MR. HAMID FAROOQ


Managing Director at Pakistan Telecommunication
Employees Trust
28 years of senior general management experience
DIRECTOR
including 15 years of financial management in leading
complex commercial and technical environments
Mr. Farooq is a certified financial consultant and holds a
Diploma in Financial Consulting and an M.B.A.

MR. ZAHIR MIR


a Petroleum Engineer
has done his B.Sc. in Petroleum Engineering in 1986
MD & CEO
from University of Engineering and Technology Lahore
Masters in Business Administration (MBA) from
Preston University, Islamabad

CHIEF FINANCIAL OFFICER


MR. IRTEZA ALI QURESHI

COMPANY SECRETARY
MR. AHMED HAYAT LAK

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AUDITORS
M/s KPMG Taseer Hadi & Co., Chartered Accountants

M/s A.F. Ferguson & Co., Chartered Accountants

Legal Advisor

M/s Khokhar Law Chambers

TAX ADVISOR
M/s A.F. Ferguson & Co., Chartered Accountants

BANKERS
Allied Bank Limited

Askari Bank Limited

Bank Alfalah Limited

Bank Al Habib Limited

Barclays Bank PLC

Citibank

Deutsche Bank

Faysal Bank Limited

Habib Bank Limited

Habib Metropolitan Bank Limited

HSBC Bank of Middle East

MCB Bank Limited

Meezan Bank Limited

National Bank of Pakistan

NIB Bank Limited

Soneri Bank Limited

Standard Chartered Bank

United Bank Limited

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2. FUTURE PROJECTS
Financial
Build strategic reserves for future growth/expansion
Growth and superior returns to all stakeholders
Double the value of the Company in the next five (5) years
Make investment decisions by ranking projects on the basis of best economic indicators
Maximize profits by investing surplus funds in profitable avenues
Reduce cost and time overruns to improve performance results
Learning and Growth
Motivate our workforce and enhance their technical, managerial and business skills through
modern HR practices
Acquire, learn and apply state-of-the-art technology
Emphasize organizational learning and research through effective use of knowledge
management systems
Fill the competency gap within the organization by attracting and retaining best professionals
Attain full autonomy in financial and decision making matters
Customers
Continuously improve quality of service and responsiveness to maintain a satisfied customer
base
Improve reliability and efficiency of supply to the customer
Be a responsible corporate citizen
Internal Process
Evolve consensus through consultative process interlinking activities of all departments
Excel in exploration, development and commercialization
Be transparent in all business transactions
Synergize through effective business practices and teamwork
Have well-defined SOPs with specific ownerships and accountabilities
Improve internal controls
Improve internal business decision making and strategic planning through state-of-the-art
Management Information System
Periodic business process reengineering

3. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE


Prince Ahmed Omar Ahmedzai Chairman
Mr. Zahid Muzaffar Member

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Mr. Zafar Masud Member


Mr. Hamid Farooq Member
Mr. Rahmat Salam Khattak Member
Company Secretary Secretary

TERMS OF REFERENCE
To meet all obligatory requirements as prescribed under the Petroleum Concession Agreement
(PCA);
To meet non-obligatory projects under OGDCLs CSR Policy viz., education, health, water supply
and sanitation, supply of gas, infrastructure, sports etc., as prescribed under the Companys CSR
policy;
The CSR committee will recommend the annual budget (along with a detailed list of all CSR
related initiatives), at the beginning of each financial year, to the Board of Directors. Any
deviation from this budget can only be made after approval from the Board of Directors;
In the event of an emergency/natural calamity, such as earthquakes, floods etc., the CSR Council
may recommend to the MD & CEO to approve a donation up to PRs 1,000,000/- (Rupees one
million). However, this must be in line with the approved CSR policy of the Company. The Board
of Directors shall be informed of this by circular, to be ratified at its next meeting;
The CSR Committee will review and monitor the progress of ongoing CSR projects on a quarterly
basis. A detailed report will be provided by Manager CSR to CSR Committee and Board of
Directors; and
All activities carried out under the head CSR will be audited by an external auditor (each financial
year) and the audit report will be circulated to the Board of Directors
SHARE PRICE
OGDCLS ORDINARY SHARES ARE LISTED IN PAKISTAN ON THE KARACHI, LAHORE AND THE ISLAMABAD STOCK
EXCHANGES UNDER THE TICKER CODE OGDC. OGDCL ALSO HAS GLOBAL DEPOSITARY SHARES LISTED ON THE
LONDON STOCK EXCHANGE UNDER THE TICKER CODE OGDC.
OIL & GAS DEVELOPMENT COMPANY LIMITED
Jan 1 to Jan 31 2016

Line Charts: Rates | Turnover | Trading Value | Trades | Market Capitalisation


Bar Charts: Turnover | Trading Value | Trades | Market Capitalisation
Rate Turnover Trading Market Paid-up
Date Calls Trades
Opening Closing Diff High Low Average Total Cross Value Capitalisation Capital
Jan 05 114.50 115.14 -0.59 115.55 110.25 114.43 1,104,400 -- -- -- -- 495,208,895,976 43,009,284,000
Jan 04 118.60 115.73 -2.13 119.00 115.25 116.85 1,863,700 -- -- -- -- 497,746,443,732 43,009,284,000
Jan 01 118.00 117.86 0.52 118.49 116.75 117.84 1,005,900 -- -- -- -- 506,907,421,224 43,009,284,000

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4. BALANCE SHEET

OIL & GAS DEVELOPMENT COMPANY LIMITED


BALANCE SHEET
as at June 30th , 2015, 2014 & 2013
Equity and liabilities Notes Rupees in thousands
2015 2014 2013
SHARE CAPITAL AND RESERVES
Authorized share capital (Ordinary shares of PRs 10 each)
50,000,000 50,000,000 50,000,000
Share Capital 4
43,009,284 43,009,284 43,009,284
Capital Reserves 5
7,456,000 6,606,000 5,756,000
Unappropriated profit
392,055,684 346,055,921 263,500,737

442,520,968 395,671,205 312,266,021


NON - CURRENT LIABILITIES
Deferred taxation 6
16,606,840 22,270,517 13,727,898
Deferred employee benefits 7
12,457,915 9,827,561 9,564,797
Provision for decommissioning cost 8
20,303,619 20,417,830 19,993,556

49,368,374 52,515,908 43,286,251


CURRENT LIABILITIES
Trade and other payables 9
61,901,977 48,045,567 56,138,527
Provision for taxation
2,238,065

61,901,977 48,045,567 58,376,592


TOTAL LIABILITIES
553,791,319 496,232,680 413,928,864

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OIL & GAS DEVELOPMENT COMPANY LIMITED


BALANCE SHEET
as at June 30th , 2015, 2014 & 2013
Assets Notes Rupees in thousands
2015 2014 2013
NON - CURRENT ASSETS
FIXED ASSETS
Property, plant and equipment 11 52,605,226
109,983,739 71,803,994
Development and production assets - intangible 12 74,651,460
78,260,687 74,329,473
Exploration and evaluation assets 13 7,275,329
8,139,436 9,637,788
134,532,015
196,383,862 155,771,255
Long term investments 14 140,416,803
131,193,328 140,393,508
Long term loans and receivable 15 5,932,606 4,152,258
5,170,798
Long term prepayments 580,432
502,972 736,992
279,681,508
334,012,768 302,072,553
CURRENT ASSETS
Stores, spare parts and loose tools 16 16,628,579
16,847,032 18,502,922
Stock in trade 263,204
317,476 420,626
Trade debts 17 55,874,924
121,411,485 100,510,995
Loans and advances 18 6,408,762
8,043,768 7,909,281
Deposits and short term prepayments 19 1,158,516
1,414,433 1,336,238
Interest accrued 10,125,851
14,433,563 10,110,450
Other receivables 20 1,180,494
183,825 661,017
Income tax - advance 21 -
24,059,740 14,319,141
Current maturity of term finance certificates 14.2 - -
10,250,000
Other financial assets 22 39,897,151
9,814,481 37,537,297
Cash and bank balances 23 2,709,875
13,002,748 2,852,160
134,247,356
219,778,551 194,160,127
TOTAL ASSETS 17 553,791,319 496,232,680 413,928,864

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5. PROFIT & LOSS ACCOUNT

OIL & GAS DEVELOPMENT COMPANY LIMITED


PROFIT & LOSS ACCOUNT
as at June 30th , 2015, 2014 & 2013
Notes Rupees'000
2015 2014 2013
Sales - net 24 210,624,908 257,014,254 223,365,490

Royalty
(23,736,702) (29,720,093) (25,899,469)
Operating expenses 25
(52,935,481) (48,833,114) (36,783,454)
Transportation charges
(1,985,814) (2,388,243) (2,250,087)

(78,657,997) (80,941,450) (64,933,010)


Gross profit
131,966,911 176,072,804 158,432,480

Other income 26
19,186,191 19,126,253 15,694,460
Exploration and prospecting expenditure 27
(11,627,518) (8,722,796) (14,979,612)
General and administration expenses 28
(4,308,255) (2,964,932) (2,401,627)
Finance cost 29
(2,550,067) (2,204,287) (2,315,324)
Workers profit participation fund
(6,685,550) (9,071,048) (7,726,763)
Share of profit in associate - net of taxation 14.1
1,043,741 113,911 104,892
Profit before taxation
127,025,453 172,349,905 146,808,506
Taxation 30
(39,776,421) (48,435,355) (55,535,887)
Profit for the year
87,249,032 123,914,550 91,272,619

Earnings per share - basic and diluted 31 20.29 28.81 21.22

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6. RATIO ANALYSIS
OIL & GAS DEVELOPMENT COMPANY LIMITED
AS AT JUNE 30TH, 2015, 2014 & 2013
2015 2014 2013

LIQUIDITY RATIOS

Current 219778551 194160127 134247356


Ratio 61901977 48045567 58376592

Quick 219778551 (317476 + 1393408) 194160 (420626 + 1315244) 134247356 (263204 + 1143595)
Ratio/Acid 61901977 48045567 58376592
Test Ratios

EFFICIENCY/ACTIVITY RATIOS

Fixed Asset
210624908 257014254 223365490
Turnover
Ratio 334012768 302072553 279681508

Working 210624908 257014254 223365490


Capital (219778551 61901977) (194160127 48045567)(134247356 58376592)
Turnover
Ratio

Inventory 210624908 257014254 223365490



Turnover

(317476 + 420626) (420626 + 263204) (263204 + 210523)
Ratio
/2 /2 /2

Receivables 210624908 257014254 223365490



Turnover (121411485 + 183825) (100510995 + 661017) (55874924 + 1180494)
Ratio

Receivables
Collection
number of days in the year 365 365 365
receivable turnover ratio
Period 1.73 2.54 3.9

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Creditors
Turnover Not Workable Not Workable Not Workable
Ratios

Average
Credit Period Not Workable Not Workable Not Workable

PROFITABILITY RATIOS

Gross Profit 131966911 176072804 158432480


Ratio
100 210624908100 257014254100 223365490100

Operating
Not Workable Not Workable Not Workable
Profit Ratio 100

Net Profit 87249032 91272619


123914550
210624908100 257014254100 223365490100
Ratio 100


100

23736702 29720093 25899469


210624908100 257014254100 223365490100
100

Expense Ratio
23736702 48833114 36783454
210624908100 257014254100 223365490100
100

23736702 2388243 225087
210624908100 257014254100 223365490100
100

SOLVENCY RATIOS

Debt To Net Not Workable Not Workable Not Workable



Worth/Equity
Ratio

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Debt Service
Not Workable Not Workable Not Workable
or Interest
Coverage
Ratio

Not Workable Not Workable Not Workable


Fixed Assets
Ratios

Debt To Total 553791319 496232680 413928864


Funds or 553791319 496232680 413928864
Solvency
Ratio

7456000 6606000 5756000


Reserves To 43009284 43009284 43009284
Capital Ratio

Not Workable Not Workable Not Workable


Capital
Gearing Ratio

43009284 + 7456000 43009284 + 606000 43009284 + 5756000


Proprietary 553791319 496232680 413928864
Ratio

RETURN ON INVESTMENT RATIOS

Return On 127025453 172349905 146808506


Capital &

43009284100 43009284100 43009284100
Employed
(ROI)

87249032 123914550 91272619


Earnings Per 43009284 43009284 43009284
Share

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7. RATIO ANALYSIS SOLUTIONS WITH INTERPRETATIONS


OIL & GAS DEVELOPMENT COMPANY LIMITED
AS AT JUNE 30TH, 2015, 2014 & 2013
2015 2014 2013
EFFICIENCY/ACTIVITY RATIOS
Fixed Asset Turnover
0.6 times 0.8 times 0.7 times
Ratio
INTERPRETATION
It means they have generated a fixed asset turnover ratio of 0.6 times in 2015, which means PRS. 0.63 of
revenue per PRs. 1 of investment in fixed assets. In ODGCL scenario we can see that in 2013 it was 0.7
times and in 2014 it was 0.8 times and in 2015 it was 0.6 times. They were going good in 2014. The
decrease in 2015 is due to decrease in sales.
RECOMMENDATION
They should increase their sales in order to cover the gap.
Working Capital Turnover
1.33 times 1.75 times 2.94 times
Ratio
INTERPRETATION
Decreasing of the ratio indicates that the working capial is not much active; and it is not supporting
senerio, the level of production & sales is not higher; it is not being used more intensively. In ODGCL
scenario we can see that in 2013 it was 2.49 times and in 2014 it was 1.75 times and in 2015 it was 1.33
times. They were going good in 2013. The decrease in 2015 & 2014 is due to decrease in sales and
production.
RECOMMENDATION
They should increase their sales and production in order to cover the gap.
goods
Inventory Turnover Ratio Not workable Not workable Not workable

Receivables Turnover
1.73 times 2.54 times 3.9 times
Ratio
Receivables Collection number of days in the year
Period receivable turnover ratio 210 days 143 days 93 days
INTERPRETATION
In ODGCL scenario we can see that in 2013 it was 3.9 times & the collection was made in 93 days which
is favorable condition and in 2014 it was 2.54 times & the collection was made in 143 days and in 2015 it
was 1.79 times & the collection was made in 210 days. The situation in 2015 is alarming for the company
They were going good in 2013. The decrease in 2015 & 2014 is due to inefficient collection which leads to
the doubts that receivables might contain significant doubtful debts.
RECOMMENDATION
They should improve their collection procedure and increase their sales and production.


Creditors Turnover Ratios
Not Workable Not Workable Not Workable

Average Credit Period
Not Workable Not Workable Not Workable

NCBA&E Page 26
FINANCIAL ACCOUNTING

PROFITABILITY RATIOS

Gross Profit Ratio 100 62.65% 68.50% 70.92%

INTERPRETATION
Decreasing of the ratio indicates that there is a decrease in sales. In ODGCL scenario we can see that in
2013 it was 70.92% and in 2014 it was 68.50% and in 2015 it was 62.65%.. They were going good in
2013. The decrease in 2015 & 2014 is due to decrease in sales and production.
RECOMMENDATION
They should increase their sales and production in order to cover the gap.

Operating Profit Ratio 100 Not Workable Not Workable Not Workable


Net Profit Ratio 100 41.42% 48.21% 40.86%

INTERPRETATION
Decreasing of the ratio indicates that there is a decrease in sales an increase in taxes. In ODGCL scenario
we can see that in 2013 it was 40.86%and in 2014 it was 48.21%and in 2015 it was 41.42%. They were
going good in 2014. The decrease in 2015 & 2013 is due to decrease in sales and Increase in taxes.
RECOMMENDATION
They should increase their sales and ask government to give rebates on taxes..

100


100 11.26% 11.56% 11.59%

Expense Ratio
100 25.13% 19.00% 16.46%


100 0.94% 0.92% 1.00%

INTERPRETATION
It indicates the portion of sales consumed by various expenses. In ODGCL scenario we can see that in
2013 it the highest portion sales was consumed by operating expenses which is 16.46% and in 2014 it was
again operating expenses 19.00% and in 2015 it was again operating expenses which consumed 25.13% of
sales portion.. They were going good in 2013 though in that transportation and royalty cost was bit high
but it was negligible.
RECOMMENDATION
They should decrease their operating expenses..
SOLVENCY RATIOS
SHORT TERM SOLVENCY

Current Ratio 3:1 4:1 2:1

NCBA&E Page 27
FINANCIAL ACCOUNTING

INTERPRETATION
As a convention 2 : 1 is considered as satisfactory. It means the assets must be double then liabilities. In
ODGCL scenario we can see that in 2013 it was 2 : 1 and in 2014 it was 4 : 1 and in 2015 it was 3 : 1.
They were going good in 2014. The decrease in 2015 is due to increase in trade & other paybills.
RECOMMENDATION
They should reduce taking money on credit. There is a huge increase in all three year.
Quick Ratio/Acid Test
3.5 : 1 4:1 2.2 : 1
Ratios
INTERPRETATION
As a convention 2 : 1 is considered as satisfactory. It means the quick assets must be double then liabilities.
In ODGCL scenario we can see that in 2013 it was 2.2 : 1 and in 2014 it was 4 : 1 and in 2015 it was 3.5 :
1. They were going good in 2014. The decrease in 2015 is due to increase in current liabilities.
RECOMMENDATION
They should reduce taking money on credit. There is a huge increase in trade & bills in all three year due
to creditors.
LONG TERM SOLVENCY
Debt To Net Worth/Equity
Not Workable Not Workable Not Workable
Ratio
Debt Service or Interest
Not Workable Not Workable Not Workable
Coverage Ratio

Fixed Assets Ratios Not Workable Not Workable Not Workable

Debt To Total Funds or
1:1 1:1 1:1
Solvency Ratio
INTERPRETATION
It indicates the financial position of a company either they can meet their outside obligations in full out of
its own assets or not. In ODGCL scenario we can see that in 2013, 2014 & 2015 the companys financial
position is good and it shows they can fill their outside obligation on their own.
RECOMMENDATION
They should maintain the record in future years and try to improve it more.

Reserves To Capital Ratio 0.17 times 0.15 times 0.13 times

INTERPRETATION
It indicates the financial soundness of the company, that the unit is able to meet future loses when suffered
or the unit can grow, expand & diversify as if they desire. In ODGCL scenario we can see that in 2013,
2014 & 2015 the companys financial soundness in continuously improving which is a good sign.
RECOMMENDATION
They should maintain the reserves and keep up the good work.

Capital Gearing Ratio Not Workable Not Workable Not Workable


Proprietary Ratio 0.09 times 0.08% 0.11%

NCBA&E Page 28
FINANCIAL ACCOUNTING

INTERPRETATION
It indicates the company is reducing the portion of proprietors and outsiders in financing the business. The
index shows that in 2015 only 9% amount is of proprietors and rest 91% has been supplied by outside
creditors. in 2014 only 8% amount is of proprietors and rest 92% has been supplied by outside creditors.
And in 2013 11% amount is of proprietors and rest 89% has been supplied by outside creditors.
RECOMMENDATION
They should maintain the reserves and keep up the good work.
RETURN ON INVESTMENT RATIOS
Return On Capital &

15% 24% 22%
Employed (ROI)
INTERPRETATION
It indicates the company is reducing the portion of proprietors and outsiders in financing the business. The
index shows that in 2015 only 9% amount is of proprietors and rest 91% has been supplied by outside
creditors. in 2014 only 8% amount is of proprietors and rest 92% has been supplied by outside creditors.
And in 2013 11% amount is of proprietors and rest 89% has been supplied by outside creditors.
RECOMMENDATION
They should maintain the reserves and keep up the good work.

Earnings Per Share 2029 28.81 21.22

8. NOTES TO ACCOUNTS

NOTE: 4
SHARE CAPITAL
Rupees'000
2015 2014 2013
Authorized share capital
fully paid for consideration other than cash 10,752,321 10,752,321 10,752,321
fully paid bonus shares 32,256,963 32,256,963 32,256,963
43,009,284 43,009,284 43,009,284

NOTE: 5
Reserves
Rupees'000
General reserve 2015 2014 2013
Capital reserve 836,000 836,000 836,000
Self-insurance reserve 6,620,000 5,770,000 4,920,000
7,456,000 6,606,000 5,756,000

NOTE: 6
DEFERRED TAXATION
Rupees'000

NCBA&E Page 29
FINANCIAL ACCOUNTING

2015 2014 2013

Accelerated depreciation on property, plant and equipment 7,548,441 6,524,059 5,473,879


Expenditure of exploration and evaluation, development and
production assets 12,887,530 19,895,341 23,253,486
Provision for decommissioning cost (3,042,951) (3,286,920) (2,894,689)
Long term investment in associate 132,767 30,231 25,793
Provision for doubtful debts, claims and advances (97,265) (102,756) (91,344)
Provision for slow moving and obsolete stores (821,682) (789,438) (637,431)
16,606,840 22,270,517 13,727,898

NOTE: 7
Deferred employee benefits
Rupees'000
2015 2014 2013
Postretirement medical benefits 8,083,396 6,770,977 3,418,293
Accumulating compensated absences 4,374,519 3,056,584 3,069,806
12,457,915 9,827,561 9,564,797

NOTE: 8
PROVISION FOR DECOMMISSIONING COST
Rupees'000
2015 2014 2013

Balance at beginning of the year 20,417,830 19,993,556 17,193,813

Provision for the year 781,004 635,378 494,497

21,198,834 20,628,934 17,688,310

Revision due to change in estimates (3,432,053) (1,934,137) -

Adjustment during the year - (466,364) -


Unwinding of discount on provision for decommissioning cost 2,536,838 2,189,397 2,305,246

Balance at end of the year 20,303,619 20,417,830 19,993,556

The above provision for decommissioning cost is analyzed


as follows:

Development and production wells 5,518,058 7,863,805 8,990,485

Production facilities 1,339,771 1,645,073 2,283,516


Unwinding of discount on provision for decommissioning cost

Development and production wells 11,989,714 9,776,200 7,565,035

NCBA&E Page 30
FINANCIAL ACCOUNTING

Production facilities 1,456,076 1,132,752 1,154,520

13,445,790 10,908,952 8,719,555

20,303,619 20,417,830 19,993,556


Significant assumptions used were as follows:
Discount rate per annum 9.14% 12.88% 13.36%
Inflation rate per annum 6.99% 11.39% 12.46%

NOTE: 9
Trade and other payables
Rupees'000
2015 2014 2013

Creditors 1,159,807 1,534 53,440


Payable to Government of Pakistan - on account of Kunnar
discount 2,085,112 2,085,112 -

Accrued liabilities 7,792,656 5,461,545 4,890,813

Payable to joint venture partners 5,747,349 4,554,969 9,040,238

Retention money payable 6,208,634 1,617,016 710,260

Royalty payable 3,759,267 5,030,253 5,241,023

Excise duty payable 243,798 263,989 301,799

General sales tax payable 1,636,792 1,843,507 1,659,507

Gas Infrastructure Development (GIDC) Payable 6,143,565 - -

Provincial sales tax payable - 7,528 -

Trade deposits 102,210 73,478 76,910


Workers profit participation fund - net 6,685,550 -

Employees pension trust 3,116,025 11,791,096 1,174,212

Un-paid dividend 16,000,346 13,936,304 2,468,708

Un-claimed dividend 184,955 416,219 397,785


Advances from customers 861,045 873,443 10,450,172
Payable to benevolent fund - 15 706
Other payables 174,866 89,559 37,353
61,901,977 48,045,567 36,502,926

NCBA&E Page 31
FINANCIAL ACCOUNTING

NOTE: 11
Property,
plant and
equipment
Rupees'000
Bui Bui
ldi ldi
ngs ngs Off
, , ice
Off Fu Stor
offi offi and Ca
Pla ice rni Dec es
Le ces ces tec pita
Fre nt and tur om- held
ase an an hni l
eho and Pip do e Ve mis for
hol d d Ri cal wor Tot
Description ld ma elin mes an hic sio capi
d roa roa gs dat k in al
lan chi es tic d les nin tal
lan ds ds a pro
d ner equ fixt g exp
d on on co gre
y ipm ure cost endi
fre lea mp ss
ent s ture
eho seh ute
ld old rs
lan lan
d d
COST
59, 2,0 10, 4,6
Balance as 244 2,1 3,6 1,4 679 564 2,2 4,34 1,82 93,7
419 02, 440 96, 60,
at 1 July ,61 22, 12, 93, ,61 ,98 60, 6,72 8,64 74,5
,87 43 ,90 726 32
2012 5 580 971 534 6 7 628 3 4 59
1 8 2 4
Additions 318 166 388 6,1 11 279 300 49 13,6 22,4
3,9 52, 13, 22, 472,
during the ,60 ,27 ,61 56, 6,9 ,14 ,70 7,2 31,9 20,8
95 437 060 888 157
year 0 9 5 815 09 2 5 43 98 43
Disposals/tr - - - - -
- - - -
ansfers 110 14 4,07 1,25 5,64
- - - - 41, 44 4,7 19, -42 -
during the ,37 0,9 0,69 1,30 2,48
500 0 88 359
year 0 80 6 5 0
-
654
655 79
Adjustments - - - - - - 179 ,43 - - - - -
,41 7
5
1
64, 2,1 10, 5,0
Balance as 248 2,4 3,7 1,8 727 1,5 109 2,2 13,9 1,04 110,
879 15, 609 17,
at 30 June ,61 41, 79, 82, ,44 00, ,74 83, 08,0 9,49 552,
,77 90 ,67 38
2013 0 180 250 149 4 768 4 516 25 6 922
5 7 4 4
64, 2,1 10, 5,0
Balance as 248 2,4 3,7 1,8 727 1,5 109 2,2 13,9 1,04 110,
879 15, 609 17,
at 1 July ,61 41, 79, 82, ,44 00, ,74 83, 08,0 9,49 552,
,77 90 ,67 38
2013 0 180 250 149 4 768 4 516 25 6 922
5 7 4 4
11, 2,9
Additions 527 973 1,4 195 35 18,6 1,30 37,7
190 50, 61, 12, 69,
during the 364 - ,42 ,44 25, ,84 2,6 84,0 8,57 52,6
,95 40 249 490 339
year 4 0 869 8 82 28 2 62
6 1
Revision - -
- - - - - - - - - - - - -
due to 241 241,

NCBA&E Page 32
FINANCIAL ACCOUNTING

change in ,41 418


estimate 8
Disposals/tr - - - -
- - - - -
ansfers 18, 10 11,9 12,4
- - - - 30, 35, 4,2 15, - - 244,
during the 94 8,1 55,1 13,3
913 727 08 506 709
year 2 66 96 67
- -
- 2,3 - -
2,3 32, 466
Adjustments - 31, 87, - - 77 71 - 1,1 - - 466,
87, 831 ,36
807 141 72 364
141 4
76, 5,0 11, 5,2
Balance as 248 4,2 5,2 784 1,6 122 1,6 20,6 2,11 135,
54, 072 47, 999 60,
at 30 June ,97 74, 42, ,56 81, ,23 45, 36,8 3,35 184,
039 ,64 36 ,81 72
2014 4 867 730 2 181 4 073 57 9 435
9 6 6 8
76, 5,0 11, 5,2
Balance as 248 4,2 5,2 784 1,6 122 1,6 20,6 2,11 135,
54, 072 47, 999 60,
at 1 July ,97 74, 42, ,56 81, ,23 45, 36,8 3,35 184,
039 ,64 36 ,81 72
2014 4 867 730 2 181 4 073 57 9 435
9 6 6 8
16,
Additions 141 15, 3,3 152 121 27 35,8 2,85 58,8
5,6 63, 027 13, 88,
during the - ,87 87 22, ,72 ,12 4,4 11,2 8,06 95,3
06 070 ,13 570 603
year 0 2 040 7 3 26 46 2 45
0
Revision -
-
due to 393
- - - - - - - - - - - - - 393,
change in ,90
905
estimate 5
Disposals/tr - - - - -
- - - -
ansfers 18, 14 12,4 1,05 13,6
- - - - 45, 2,3 3,1 20, -88 -
during the 17 2,1 06,9 4,99 94,0
762 85 10 373
year 5 86 34 3 06
-
321
- 40 84, 3,8
Adjustments - - - ,85 - - -55 - - - -
955 9,4 756 74
1
71
92, 4,6 15, 5,3
Balance as 254 4,3 5,3 1,0 1,7 135 1,3 44,0 3,91 179,
54, 375 35, 319 92,
at 30 June ,58 36, 84, 18, 85, ,71 39, 41,1 6,42 991,
039 ,86 59 ,47 91
2015 0 982 600 935 805 6 771 69 8 869
8 2 1 3
DEPREC
IATION
35, 1,0 3,7
Balance as 271 1,2 766 8,5 539 502 835 52,8
110 12, 69, 44, 193,
at 1 July - ,68 39, ,37 24, ,07 ,12 ,12 - 08,1
,32 21 682 08 620
2012 6 301 0 513 4 2 5 18
2 9 4
201 3,6 15 339 44 322 - 5,44
Charge for 59, 98, 49, 82, 8,7
- ,22 83, 8,1 ,62 1,1 ,80 - 3,33 2,34
the year 898 722 676 109 63
6 600 30 2 30 5 5 6
- -
- - - - -
110 12
On disposals - - - - 41, 3,4 4,6 18, -39 - - - 302,
,32 4,7
190 08 10 489 768
7 05

NCBA&E Page 33
FINANCIAL ACCOUNTING

-
630
630 11
Adjustments - - - - - - 189 ,52 - - - - -
,82 1
2
2
38, 1,1 4,0
Balance as 331 1,4 865 8,7 584 1,1 1,1 57,9
121 66, 78, 60, 190,
at 30 June - ,58 40, ,09 53, ,32 96, 57, - 47,6
,91 94 406 62 285
2013 4 527 2 808 9 264 930 96
0 1 0
41, 1,4 4,4
Balance as 1,6 1,3 9,1 632 1,3 1,2 63,2
48, 730 08, 88, 16, 172,
at 1 July - 69, 57, 47, ,64 46, 26, - 44,7
694 ,75 26 677 09 084
2014 085 479 748 4 977 261 73
7 9 8
Charge/(rev -
266 239 4,9 32 608 217 31 - 6,62
ersal) of 2,1 78, 8,9 302
- ,31 ,90 29, 3,3 ,46 ,69 9,5 - 69,1 2,26
charge for 45 107 37 ,38
2 4 190 94 8 9 94 01 8
the year 1
- -
- - - - -
18, 10
On disposals - - - - 45, 2,3 2,9 19, -81 - - - 193,
15 5,0
726 84 91 534 957
6 85
Adjustments - - -45 - - - - 52 45 - -52 - - - -
46, 1,7 4,6
Balance as 1,9 1,5 9,7 707 1,5 923 69,6
50, 614 13, 97, 30, 102,
at 30 June - 35, 97, 53, ,81 45, ,88 - 73,0
839 ,22 50 533 55 983
2015 352 383 832 2 187 0 84
1 7 5
IMPAIR
MENT
Balance as
at 1 July - - - - - - - - - - - - - - -
2013
135
Charge for 135,
- - - - ,00 - 333 - - - - 327 - -
the year 668
8
Balance as 135
135,
at 30 June - - - - ,00 - 333 - - - - 327 - -
668
2014 8
Balance as 135
135,
at 1 July - - - - ,00 - 333 - - - - 327 - -
668
2014 8
128
Charge for 61, 8,7 1,0 199,
- - ,38 - - - - - - - -
the year 204 09 79 378
6
Balance as 128 143
61, 1,0 335,
at 30 June - - ,38 ,71 - 333 - - - 327 - -
204 79 046
2015 6 7
26,
Carrying 248 2,1 2,3 1,0 94 1,8 143 304 95 1,1 13,9 52,6
757 31, 859,
amount - 30 ,61 09, 38, 17, 8,9 55, ,11 ,50 6,7 25, 08,0 05,2
,86 338 211
June 2013 0 596 723 057 66 866 5 4 64 586 25 26
5
Carrying 248 5,3 2,6 3,8 34, 3,6 2,8 151 334 33, 84 418 20,6 1,94 71,8

NCBA&E Page 34
FINANCIAL ACCOUNTING

amount - 30 ,97 45 05, 85, 206 39, 51, ,91 ,20 557 4,6 ,48 36,8 1,27 03,9
June 2014 4 782 251 ,88 09 735 8 4 30 5 57 5 94
4 7
45, 2,9
Carrying 254 2,3 3,6 5,5 311 240 76 415 44,0 3,81 109,
3,2 617 22, 38,
amount - 30 ,58 40, 58, 65, ,12 ,61 1,2 ,56 41,1 3,44 983,
00 ,93 08 183
June 2015 0 426 831 306 3 8 79 4 69 5 739
0 5
Rates of 421
3.3- 2.5- 2.5- 33. 2.5-
depreciatio - 14. 10 10 15 10 20 - - 0.00
4 8 8 33 10
n (%) 00

NOTE: 12
DEVELOPMENT AND PRODUCTION
ASSETS - intangible
Rupees'000

Producing fields Shut-in fields Decom


Wells
-
Joint Wholl Joint in Sub
Description Wholly missio Total
ventur y ventur progre total
owned ning
es owned es ss
cost
COST
46,943, 51,749 6,833, 12,071 4,683,0 122,281 8,518,8 130,800
Balance as at 1 July 2012
796 ,147 901 ,761 99 ,704 75 ,579
- -
1,140,0 1,265,
Adjustment 1,424, 981,22 - - - -
76 517
364 9
15,179, 15,179, 471,61 15,650,
Additions during the year - - - -
008 008 0 618
Transfer from
exploration and 485,10 1,383, 1,696, 3,577,4 3,577,4
12,242 - -
evaluation assets during 1 470 681 94 94
the year
-
Transfers in/(out) during 1,074,6 8,680, 1,080, 1,062,
11,897, - - -
the year 06 649 019 648
922
Balance as at 30 June 49,643, 63,078 6,501, 13,849 7,964,1 141,038 8,990,4 150,028
2013 579 ,783 798 ,861 85 ,206 85 ,691
49,643, 63,078 6,501, 13,849 7,964,1 141,038 8,990,4 150,028
Balance as at 1 July 2013
579 ,783 798 ,861 85 ,206 85 ,691
- -
1,441,2 966,14
Adjustment 1,441, 966,14 - - - -
79 9
279 9
17,623, 17,623, 566,03 18,189,
Additions during the year - - - -
212 212 9 251
- -
Revision due to change
- - - - - - 1,692,7 1,692,7
in estimate
19 19
Transfer from 263,45 972,23 1,244,2 1,244,2
1,192 7,336 - -
exploration and 1 2 11 11
NCBA&E Page 35
FINANCIAL ACCOUNTING

evaluation assets during


the year
-
Transfers in/(out) during 5,576,2 12,851 560,36 1,704,
20,692, - - -
the year 49 ,415 2 690
716
Balance as at 30 June 56,662, 77,159 5,628, 15,560 4,894,6 159,905 7,863,8 167,769
2014 299 ,798 217 ,634 81 ,629 05 ,434
56,662, 77,159 5,628, 15,560 4,894,6 159,905 7,863,8 167,769
Balance as at 1 July 2014
299 ,798 217 ,634 81 ,629 05 ,434
- -
138,08 2,826,
Adjustment 138,08 2,826, - - - -
2 198
2 198
15,497, 15,497, 692,40 16,190,
Additions during the year - - - -
846 846 1 247
- -
Revision due to change
- - - - - - 3,038,1 3,038,1
in estimate
48 48
Transfer from
exploration and 3,142,0 905,24 2,486, 2,938, 9,472,1 9,472,1
- -
evaluation assets during 89 7 770 012 18 18
the year
-
Transfers in/(out) during 2,804,6 9,548, 2,972,
- 15,325, - - -
the year 40 048 975
663
Balance as at 30 June 62,747, 90,439 7,976, 18,645 5,066,8 184,875 5,518,0 190,393
2015 110 ,291 905 ,423 64 ,593 58 ,651
AMORTIZATION
30,578, 28,221 400,51 141,99 59,343, 5,985,2 65,328,
Balance as at 1 July 2012 -
929 ,712 9 4 154 52 406
- -
- 638,01
Adjustment 184,01 376,11 - - - -
77,888 5
5 2
3,074,5 5,781, 8,855,6 237,65 9,093,3
Charge for the year - - -
21 135 56 4 10
Balance as at 30 June 33,469, 33,626 322,63 780,00 68,198, 6,222,9 74,421,
-
2013 435 ,735 1 9 810 06 716
33,469, 33,626 322,63 780,00 68,198, 6,222,9 74,421,
Balance as at 1 July 2013 -
435 ,735 1 9 810 06 716
-
318,00
Adjustment - - 318,00 - - - -
6
6
-
Charge/(reversal) of 4,117,3 14,217 18,334, 18,061,
- - - 273,58
charge for the year 03 ,574 877 296
1
Balance as at 30 June 37,586, 48,162 322,63 462,00 86,533, 5,949,3 92,483,
-
2014 738 ,315 1 3 687 25 012
37,586, 48,162 322,63 462,00 86,533, 5,949,3 92,483,
Balance as at 1 July 2014 -
738 ,315 1 3 687 25 012
-
Adjustment -91,493 29,329 91,493 - - - -
29,329
Charge/(reversal) of 4,642,2 12,856 - - - 17,498, - 16,281,
NCBA&E Page 36
FINANCIAL ACCOUNTING

charge for the year 07 ,284 491 1,217,1 337


54
Balance as at 30 June 42,137, 61,047 414,12 432,67 104,032 4,732,1 108,764
-
2015 452 ,928 4 4 ,178 71 ,349
IMPAIRMENT
703,58
Balance as at 1 July 2012 - - - - 703,589 97,079 800,668
9
154,84
Charge for the year - - - - 154,847 - 154,847
7
Balance as at 30 June 858,43
- - - - 858,436 97,079 955,515
2013 6
858,43
Balance as at 1 July 2013 - - - - 858,436 97,079 955,515
6
545,08
Charge for the year - - - - 545,089 40,103 585,192
9
-
- - -
Reversal during the year - - 526,42 - -
526,423 57,335 583,758
3
Balance as at 30 June 545,08 332,01
- - - 877,102 79,847 956,949
2014 9 3
545,08 332,01
Balance as at 1 July 2014 - - - 877,102 79,847 956,949
9 3
-
154,84
Adjustment - - 154,84 - - - -
7
7
1,004, 1,391, 2,395,9 2,411,6
Charge for the year - - - 15,667
360 639 99 66
Balance as at 30 June 545,08 1,004, 177,16 1,546, 3,273,1 3,368,6
- 95,514
2015 9 360 6 486 01 15
Carrying amounts - 30 16,174, 29,452 5,320, 13,069 7,964,1 71,980, 2,670,5 74,651,
June 2013 144 ,048 731 ,852 85 960 00 460
Carrying amounts - 30 18,530, 28,997 4,973, 15,098 4,894,6 72,494, 1,834,6 74,329,
June 2014 472 ,483 573 ,631 81 840 33 473
Carrying amounts - 30 20,064, 28,387 7,385, 16,666 5,066,8 77,570, 690,37 78,260,
June 2015 569 ,003 615 ,263 64 314 3 687

NOTE: 13
EXPLORATION AND EVALUATION ASSETS
Rupees'000
2015 2014 2013
Balance at beginning of the year 7,913,076 4,811,334 7,530,825
Additions during the year 12,512,724 8,784,888 8,860,761
20,425,800 13,596,222 16,391,586
Cost of dry and abandoned wells during the year -4,850,138 -4,438,935 -8,002,758
Cost of wells transferred to development and production
-9,472,118 -1,244,211 -3,577,494
assets during the year
-14,322,256 -5,683,146 -11,580,252
6,103,544 7,913,076 4,811,334

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FINANCIAL ACCOUNTING

Stores held for exploration and evaluation activities 2,035,892 1,724,712 2,463,995
Balance at end of the year 8,139,436 9,637,788 7,275,329

NOTE: 14
LONG TERM INVESTMENTS
Rupees'000
2015 2014 2013
Investment in related party 1,401,173 375,807 331,427
Investments held to maturity 129,792,155 140,017,701 140,085,376
131,193,328 140,393,508 140,416,803

NOTE: 14.1
Share of profit in associate - net of taxation
Rupees'000
2015 2014 2013
Mari Petroleum Company Limited (MPCL)
Cost of investment (22,050,000 (2014: 18,375,000) fully paid
ordinary shares of PRs 10 each including 14,700,000 (2014: 73,500 73,500 73,500
11,025,000) bonus shares)
Post-acquisition profits brought forward 302,307 257,927 221,133
375,807 331,427 294,633
Share of profit for the year - net of taxation 1,043,741 113,911 104,892
Dividend received -18,375 -69,531 -68,098
1,025,366 44,380 36,794
1,401,173 375,807 331,427

NOTE: 14.2
Investments held to maturity
Rupees'000
2015 2014 2013
Term Deposit Receipts (TDRs) 5,862,129 5,345,000 4,920,000
Investment in Pakistan Investment Bonds 52,180,026 52,672,701 53,165,376
Investment in Term Finance Certificates 82,000,000 82,000,000 82,000,000
140,042,155 140,017,701 140,085,376
Less: Current maturity of Term Finance Certificates - 0
129,792,155 140,017,701 140,085,376

NOTE: 15
LONG TERM LOANS AND RECEIVABLE
Rupees'000
2015 2014 2013
Long term loans:
Secured 5,692,868 4,931,060 3,979,115
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FINANCIAL ACCOUNTING

Unsecured 239,738 239,738 173,143


5,932,606 5,170,798 4,152,258

NOTE: 16
STORES, SPARE PARTS AND LOOSE TOOLS
Rupees'000
2015 2014 2013
Stores, spare parts and loose tools 19,251,264 18,903,577 17,229,896
Stores and spare parts in transit 216,764 1,982,914 1,563,751
19,468,028 20,886,491 18,793,647
Provision for slow moving, obsolete and in transit stores -2,620,996 -2,383,569 -2,165,068
16,847,032 18,502,922 16,628,579

NOTE: 17
Trade debts
Rupees'000
2015 2014 2013
Un-secured, considered good 121,411,485 100,510,995 55,874,924
Un-secured, considered doubtful 112,782 112,782 112,782
121,524,267 100,623,777 55,987,706
Provision for doubtful debts (112,782) (112,782) (112,782)
121,411,485 100,510,995 55,874,924

NOTE: 18
Loans and advances
Rupees'000
2015 2014 2013
Advances considered good:
Suppliers and contractors 1,070,013 3,102,805 1,806,067
Joint venture partners 2,463,683 731,317 670,653
Others 3,553,688 3,283,840 3,255,981
7,087,384 7,117,962 5,732,701

Current portion of long term loans - secured 791,319 676,061


956,384
8,043,768 7,909,281 6,408,762
Advances considered doubtful 187,033 187,033 187,033
8,230,801 8,096,314 6,595,795
Provision for doubtful advances -187,033 -187,033 -187,033
8,043,768 7,909,281 6,408,762

NOTE: 19
DEPOSITS AND SHORT TERM PREPAYMENTS
Rupees'000

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FINANCIAL ACCOUNTING

2015 2014 2013


Security deposits 21,025 20,994 14,921
Short term prepayments 1,393,408 1,315,244 1,143,595
1,414,433 1,336,238 1,158,516

NOTE: 20
OTHER RECEIVABLES
Rupees'000
2015 2014 2013
Development surcharge 80,391 80,391 80,357
Claims receivable 31,504 16,089 606,937
Current portion of long term receivable - unsecured - 150,609 20,266
Workers profit participation fund - net - 346,775 443,282
Others 71,930 67,153 29,652
183,825 661,017 1,180,494
Claims considered doubtful 10,439 10,439 10,439
194,264 671,456 1,190,933
Provision for doubtful claims -10,439 -10,439 -10,439
183,825 661,017 1,180,494

NOTE: 21
INCOME TAX - ADVANCE
Rupees'000
2015 2014 2013
Income tax - advance/(provision for taxation) at beginning of
14,319,141 -2,238,065 -2,421,831
the year
Income tax paid during the year 50,613,873 53,272,836 53,639,424
Income tax recovered by tax authorities during the year 3,942,695 1,374,654 0
Provision for current taxation for the year - Profit and loss - -
-37,279,117
account 52,258,517 42,567,340
Tax credit related to premeasurement loss on employee
retirement
Tax credit related to premeasurement loss on employee
retirement benefit plans for the year - Other Comprehensive 624,129 13,204,249 0
Income
-
Provision for taxation - prior years -8,160,981 963,984
10,888,318
Income tax - advance at end of the year 24,059,740 14,319,141 -2,238,065

NOTE: 22
Other financial assets
Rupees'000
2015 2014 2013
NCBA&E Page 40
FINANCIAL ACCOUNTING

Investment in Term Deposits 9,525,037 37,261,746 39,704,597


Investment at fair value through profit or loss - NIT units 289,444 275,551 192,554
9,814,481 37,537,297 39,897,151

NOTE: 23
CASH AND BANK BALANCES
Rupees'000
2015 2014 2013
Cash at bank:
Deposit accounts 12,849,120 2,698,137 2,474,378
Current accounts 110,855 88,952 190,944
12,959,975 2,787,089 2,665,322
Cash in hand 42,773 65,071 44,553
13,002,748 2,852,160 2,709,875

NOTE: 24
SALES - net
Rupees'000
2015 2014 2013
Gross sales
Crude oil 94,317,109 133,629,099 119,046,724
Gas 139,478,446 141,898,570 124,906,242
Liquefied petroleum gas 6,751,228 5,807,851 4,372,696
Sulphur 377,987 577,336 387,761
Other operating revenue 61,771 186,280 93,115
240,986,541 282,099,136 248,806,538

Effect of price discount on crude oil - net of


0 0
government levies -3,862,297

Government levies
General sales tax -21,310,910 -21,557,429 -18,279,304
Gas Infrastructure Development Cass (GIDC) -5,734,982 -
Excise duty -3,315,692 -3,511,180 -3,298,740
Discount on crude oil price 0 0 -707
Development surcharge -49 -
Provincial sales tax - -16,273 0
-30,361,633 -25,084,882 -21,578,751
210,624,908 257,014,254 223,365,490

NOTE: 25
OPERATING EXPENSES
Rupees'000
2015 2014 2013

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FINANCIAL ACCOUNTING

Salaries, wages and benefits 14,065,027 11,923,960 10,211,540


Stores and supplies consumed 1,913,121 2,051,789 1,855,494
Contract services 1,709,615 2,406,876 2,042,068
Joint venture expenses 2,089,230 1,642,082 884,465
Workover charges 1,091,708 1,043,665 1,055,381
Traveling and transportation 651,539 1,240,273 1,015,299
Repairs and maintenance 1,239,635 661,057 1,577,687
Rent, fee and taxes 685,642 558,081 516,146
Insurance 309,134 480,092 493,545
Communication 42,757 41,799 39,795
Utilities 245,186 93,148 61,918
Land and crops compensation 553,803 353,808 336,727
Desalting, decanting and naphtha storage
68,780 75,036 96,514
charges
Training and welfare 959,743 896,450 678,862
Provision for slow moving, obsolete and in
237,427 218,501 -
transit stores
Stores inventory written off 9,031 12,262 7,219
Depreciation 5,525,660 4,490,439 4,538,258
Amortization of development and
16,281,337 18,061,296 9,093,310
production assets
Impairment on development and production
2,411,666 585,192 154,847
assets
Impairment on property, plant and
199,378 135,668 -
equipment
Reversal of impairment on development and
- -583,758 -
production assets
Transfer from general and administration
2,533,226 2,594,330 2,169,911
expenses
Miscellaneous 9,686 8,490 7,149
52,832,331 48,990,536 36,836,135
Stock of crude oil and other products:
Balance at beginning of the year 420,626 263,204 210,523
Balance at end of the year -317,476 -420,626 -263,204
52,935,481 48,833,114 36,783,454

NOTE: 26
Other income
Rupees'000
2015 2014 2013
Income from financial assets
Interest income on:
Investments and bank deposits 16,921,497 18,594,933 11,190,876
Delayed payments from customers 2,493 13,839 965,869
Delayed payments from joint venture partners 0 0 39,105
16,923,990 18,608,772 12,195,850

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FINANCIAL ACCOUNTING

Dividend income from NIT units 18,615 17,026 15,891


Un-realized gain on investments at fair value through profit
13,893 82,997 55,165
or loss
Exchange (loss)/gain - net 1,043,079 -459,865 2,195,021
17,999,577 18,248,930 14,461,927
Income from non-financial assets
Gain on disposal of property, plant and equipment 18,320 16,368 46,639
Gain on disposal of stores, spare parts and loose tools 40,396 70,768 43,504
Others 1,127,898 790,187 1,142,390
1,186,614 877,323 1,232,533
19,186,191 19,126,253 15,694,460

NOTE: 27
EXPLORATION AND PROSPECTING EXPENDITURE
Rupees'000
2015 2014 2013
Cost of dry and abandoned wells 4,850,138 4,438,935 8,002,758
Prospecting expenditure 6,777,380 4,283,861 6,976,854
11,627,518 8,722,796 14,979,612

NOTE: 28
GENERAL AND ADMINISTRATION EXPENSES
Rupees'000
2015 2014 2013
Salaries, wages and benefits 4,710,471 4,088,287 3,739,241
Joint venture expenses 1,013,500 891,573 580,075
Unallocated expenses of technical services 1,323,643 725,013 356,224
Traveling and transportation 327,882 404,166 356,892
Repairs and maintenance 140,200 136,590 136,011
Stores and supplies consumed 123,062 136,192 60,842
Rent, fee and taxes 157,969 107,583 90,314
Communication 47,794 53,094 49,035
Utilities 64,177 65,408 60,316
Training and scholarships 30,359 29,003 22,584
Legal and professional services 44,354 32,152 31,663
Contract services 146,307 124,338 149,061
Auditors remuneration 18,016 19,838 12,468
Advertising 128,898 95,468 129,975
Insurance 3,759 3,315 2,262
Donations 330,000 50,200 -
Depreciation 197,940 199,409 219,246
Miscellaneous 48,818 17,077 21,229
8,857,149 7,178,706 6,017,438
Allocation of expenses to:

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FINANCIAL ACCOUNTING

Operations -2,533,226 -2,594,330 -2,169,911


Technical services -2,015,668 -1,619,444 -1,445,900
-4,548,894 -4,213,774 -3,615,811
4,308,255 2,964,932 2,401,627

NOTE: 29
FINANCE COST
Rupees'000
2015 2014 2013
Unwinding of discount on provision for decommissioning cost 2,536,838 2,189,397 2,305,246
Others 13,229 14,890 10,078
2,550,067 2,204,287 2,315,324

NOTE: 30
TAXATION
Rupees'000
2015 2014 2013
Current - charge/(credit)
- for the year 37,279,117 52,258,517 42,567,340
- for prior year 8,160,981 -963,984 10,888,318
45,440,098 51,294,533 53,455,658
Deferred - charge/(credit)
- for the year 706,322 303,381 2,080,229
- for prior year -6,369,999 -3,162,559 0
-5,663,677 -2,859,178 2,080,229
-39,776,421 -48,435,355 -55,535,887

NOTE: 31
EARNINGS PER SHARE - BASIC AND DILUTED
Rupees'000
2015 2014 2013
Profit for the year (Rupees 000) 87,249,032 123,914,550 91,272,619
Average number of shares outstanding during the year
4,300,928 4,300,928
(000) 4,300,928
Earnings per share - basic (Rupees) 20.29 28.81 21.22

There is no dilutive effect on the earnings per share of the Company.

NCBA&E Page 44