Oil and Gas Industry Overview

Pakistan's location being at the crossroads of Central Asia and the Arabian Sea has drawn

attention to its significance as an attractive market and a regional transit route for energy. Oil and

gas are two of the key components of the energy mix contributing 80% share to the 64 million

TOE of energy requirement in the country. The government is putting together investor-friendly

policies to increase the share of local resources in the country.

Pakistan with its ideal location is recognized as the regional gateway for energy. The energy

sector continues to dominate the overall structural character of Pakistan’s economy. The

Government has declared the Power Sector as one of the top priorities for investment and is

taking all necessary measures to build a more conducive environment by simplifying procedures

to facilitate potential investors. These policies have resulted in US$ 605 million of foreign direct

investment in the Oil & Gas sector for the year 2009-10. Oil & Gas Sector Pakistan’s burgeoning

demand for oil and gas has stimulated the need for large-scale exploration and expansion projects

and investments to help boost oil and gas production. Pakistan mainly depends on Oil & Gas for

its energy generation. These two components of energy contribute 77.40% to the energy

requirement of Pakistan. Pakistan has estimated oil reserves of 303.63 million barrels while its

current production is 65,531 barrels per day. The gas reserves of Pakistan are estimated to be

28.32 TCF while its current production is 4 billion cubic feet per day. Currently, seven refineries

are operating in the country, having the capacity to refine 248,506 bpd. Three more oil refining

Total Resource Potential : 27 Billion Barrels Refining Capacity : 14 Mi l l ion Tones Recoverable Reserves : 248 Million BarrelsConsumption : 19.21 Million TonesProduction : 66.032 Barrels/dayImports : 16 Million Tones

companies would be established with their total capacity of refining crude of 465,000 barrels per

day (bpd) to enhance the existing quantity produced by seven companies. After the establishment

of these companies the country’s refining capacity would reach up to 713,506 bpd. Gas is the

major source of energy in Pakistan. Pakistan has a well developed gas transmission

infrastructure. The gas distribution companies plan to invest US$ 285 million over the next five

years in gas sector. Pakistan has also signed a US$ 7.6 billion gas pipeline project which would

be providing 750 million cubic feet of gas to Pakistan daily from Iran by mid-2015. The shift to

CNG has proved immensely popular which is clearly evidenced by the fact that the number of

CNG vehicles has reached two million, giving Pakistan the distinction of having the highest

number of natural gas vehicles in the world. In the previous year, a total investment of US$ 833

million has been made in the CNG sector. In order to promote LPG as a potential energy fuel, the

Government of Pakistan deregulated the sector in 2000 to attract investment and give the LPG

market a much needed boost. As a result, an investment of US$ 200 million has been made to

develop LPG infrastructure

Current Condition of Oil and Gas Sector

Energy outages hampered economic growth of Pakistan. Further since early 2000s, the energy

sector (Especially its sub sector electricity) received greater attention because of the faster rate of

growth in its demand.

Circular debt, weak financial position of energy companies, falling gas production, high

dependence on Oil/gas (over 80%), low exploitation of indigenous coal and hydel

resources and unutilized power Generation capacity are some of the significant

constraints leading to severe energy shortages.

In Pakistan oil and gas are two key components of energy mix contributing almost 65

percent (oil

15% and gas 50%) share to the 64.7 million TOEs of energy supplies during 2012 while

share of coal and nuclear is almost 7 percent and 2 percent, respectively

During calendar year 2012, net primary energy supply remained 64, 727 thousand TOEs

posting a moderate growth of 0.32 percent compared to last year.

The final energy use during current year remained 40, 026 thousand TOEs showing a

growth of 3.0 percent compared to last year.

Oil (Petroleum Product)

The total oil resource potential is 27 million barrels with production of 66,032

barrels per day.

24, 573 thousand barrels (67,140 barrels per day) of crude oil is extracted or

produced locally while almost double of it that is 47, 104 thousand barrels was

imported during 2012.

8,395 thousand tones of petroleum was produced domestically while 11, 507

thousand tones was imported.

In 2012 the import bills increased to US $ 10,292 million while High Sulphur

Furnace Oil (HSFO), High Speed Diesel (HSD) and Motor Spirit has the highest

share of 48, 32 and 16 percent, respectively.

The main users in the consumption of petroleum products are transport and power

which jointly have almost ninety percent share in total consumption.

Almost 65 percent electricity is generated by thermal in which contribution from

furnace oil and diesel is 52 percent.

Natural Gas

During 2012 total production remained 1,559 billion cubic feet that is equivalent

to 32 million TOEs which shows a growth of 6 percent when compared to last

year in billion cubic feet while in TOEs it shows a growth of 4.5 percent. `

During July-March FY 13, gas supplies remained 1,139,253 million cubic feet as

compared to 1,164,915 million cubic feet last year indicating a negative 2.2 per

cent.

During July-March 2012-13, power sector (27.5 %)has the highest share in

consumption of gas,

While industry sector has a share of 22.6 % while negative growth of 16 percent

has been witnessed in transport sector. However transport sectors had posted a

positive growth of 5.3 percent in gas consumption last year.

During July 2012 to February, 2013, the two Gas utility companies (SNGL &

SSGCL) have laid 14 Kms Gas Transmission Network, 4326 kms Distribution

and 831 Kms Services lines and connected 261 villages/towns to gas network.

During this period, the gas utility companies have invested Rs. 1513 million on

Transmission Projects, Rs. 11,925 million on Distribution Projects and Rs.1,898

million on other projects bringing total investment to about Rs. 15,336 million.

During this period, 237588 additional gas connections including 236997

Domestic, 221 Commercial and 370 Industrial were provided across the country

Expected Future Growth and Contribution in GDP

The Oil and Gas sector in Pakistan has seen phenomenal growth since the independence in 1947

when oil quantities produced were scarce. These limited quantities were being produced from a

few small fields located in the Potohar region. At that time was no gas production.

Over the past half century the petroleum industry has played a significant role in national

development by making large indigenous gas discoveries. Pakistan meets about 18% of its oil

demand from local sources. The Government realizing fully well that while a fiscal package with

competitive incentives plays a vital role in attracting fresh investment an adequate protection of

the companies' investment, is an essential prerequisite for the promotion of petroleum

exploration in the country. This led to the enactment of the Foreign Investment Protection law of

1976 by the Parliament, under which the Government guaranteed full safeguard to foreign

investments in Pakistan.

Pakistan's present’s economy growth rate shows that our energy needs will increase from 64.5

Million Tonnes of Oil Equivalent (TOE), in 2010-11 to over 361.31 Million TOE in 2030. To

overcome the projected needs of energy, major dependence will remain on the Oil & Gas sector.

A total of 808 exploratory wells have been drilled so far in the sedimentary basins of Pakistan

covering 827,267 Sq. Kms. Till 31st July 2012, 250 oil and gas fields (58 oil and 192 gas and

gas/condensate) have been discovered in various basins of Pakistan with a success rate of 1:3.22.

The remaining recoverable reserves of natural gas and oil are estimated at 26.6 Trillion Cubic

Feet (TCF) and 341.9 Million US Barrels respectively.

Large areas of Pakistan's petroliferous basins e.g. Offshore Indus Basin, Makran Basin &

Balochistan Basin still remain as a geological frontier and hold promise for the future in view of

the multiple havitats for petroleum generation and accumulation which may act as a game

changer in energy self-sufficiency. Independent international studies indicate an oil and gas

potential that is many times more than these proven reserves. This area is totally under-explored

& exports believe that it has huge prospectus for oil & gas. Following steps are being taken to

enhance the exploration of oil & gas in the country: -

New Petroleum (Exploration & Production) Policy, 2012 will accelerate E & P activities

and promote foreign direct investment in the oil & gas sector of Pakistan.

Basin study has been completed to co-relate entire data of different basins. It would help

to identify new play types and help in new discoveries & simultaneously increase in

indigenous energy.

Have state-of-the-art data repository centre-digitized data is available to existing and new

companies to participate in exploration.

For exploration of non-conventional hydrocarbons separate policies on Tight Gas, Low

BTU, and Low Pressure Flared (LPF) gas have been prepared.

Completion of pending development projects-can and 400-500 MMCFD gas. At the

current oil and gas production/consumption rate, the oil reserves can last for 11 years and

gas for the 18 years. The government is thereof, besides making efforts to increase local

supply has signed an agreement for import of gas from Iran. Additionally government is

also considering different options of import of gas from Turkmenistan & Qatar and

import of LNG to cope with the increase in demand

Company Profile

Pakistan State Oil (PSO) is the biggest Oil Marketing Company (OMC) in Pakistan with a

generally created framework, a pervasive retail system and a prevailing position in larger part of

the item markets with an in general piece of the pie of 64%.

currently, PSO is included in the space, dissemination and advertising of Petroleum, Oil

and Lubricant (POL) items incorporating Motor Gasoline (Mogas), High Speed Diesel

(HSD), Furnace Oil (FO), Jet Fuel (JP-1), Kerosene, CNG, LPG, Petrochemicals and

Lubricants.

PSO has the biggest space limit around Omcs in Pakistan. With 9 establishments and 23

terminals, PSO can store roughly 1 million metric tons which speaks to 74% of the

country's sum space limit.

PSO has been driving the wheels of the economy by fuelling the force, horticulture,

flight, marine, rail, auto and mechanical parts. Being the biggest fuel supplier for the

force part, PSO supplies fuel to 11 Independent Power Producers (Ipps) and 3 Gencos

crosswise over Pakistan.

PSO likewise gives fuel to 9 landing strips across the nation and the 2 significant ocean

ports in Pakistan.

The organization has the most far reaching retail system in the nation with over 3500

retail outlets out of which 1900 outlets are according to New Vision Retail Outlet

(NVRO) models, 300 outlets pander to mass customers and 29 outlets are leader stations

titled Company-possessed and Company-worked (Co-Co) locales. These outlets convey

the largest amounts of client administration and forethought.

Being the first OMC to requisition a Compressed Natural Gas (CNG) office in January

1996, PSO now has 257 CNG stations operational in more than 34 urban areas and towns

crosswise over Pakistan.

The organization has won the "Karachi Stock Exchange Top Companies Award" for ten

sequential years and is likewise the main Pakistani organization that is a part of the

World Economic Forum.

PSO is a blue chip organization in both name and soul and additionally the first open

organization to pass the 0l trillion rupee income imprints.

PSO has set new guidelines for Omcs crosswise over Pakistan by starting chip-based

Smart Cards with secure chip innovation. PSO shrewd cards pander to distinct clients,

corporate elements and in addition armada managers and furnish them with

advantageous, secure and bug free transactions in addition to a complete fuel

administration result.

as some piece of the Non-Fuel Retail (NFR) activity, PSO has more than 50 Automated

Teller Machines (Atms) and 150 Shop Stops at its retail outlets crosswise over Pakistan

which furnish clients with round the clock administration and accommodation.

PSO has 24 Mobile Quality Testing Units (Mqtus) rightfully furnished with modernized

and state-of-the-workmanship petroleum testing gear to guarantee the vicinity of

predominant quality items at retail outlets, mechanical buyer destinations, establish

Strategic Objectives

Retain authority position in oil market and make PSO as a brand of decision for

clients

Rationalize item portfolio with a keep tabs on high edge items

Optimize item obtainment from nearby and global sources and seek after guaranteed

access to long haul and savvy supply sources

Pursue operational effectiveness and quality while guaranteeing wellbeing of

individuals, supplies nature's turf

Ensure lawful and administrative agreeability in all circles of operations and new

business improvement

Pursue constant change, development and innovative headway

Enhance corporate competencies and inspiration through expertise upgrade,

administration improvement and prize projects

Maximize come back to shareholders and satisfy obligations as a mindful corporate national towards a more extensive aggregation of stakeholders incorporating the social order and neighborhood in quest

Company Values

The PSO core values are based on excellence, Cohesiveness, Integrity,

Innovation, Respect, Innovation, and Corporate Responsibility

Credit Rating

Long Term Credit Rating AA+

Short Term Credit Rating A1+

Rating By : The Pakistan Credit Rating Agency Limited (PACRA)

Rating Last Updated : March 2012

The Pakistan Credit Rating Agency (PACRA) has relegated long haul and fleeting

substance appraisals of "AAA" (Triple An) and "A1+" (An One Plus) individually

to Pakistan State Oil – the biggest oil showcasing organization of Pakistan. These

appraisals signify the least desire of credit hazard radiating from an incredibly

solid limit for convenient installment of monetary duties. These are the most

noteworthy FICO scores in PACRA's appraising scale

Financial Analysis

After analyzing Balance sheet remarks on Analysis As of June 30, 2013,

Huge variety is investigated as takes after: Shareholders value climbed by 24% as contrasted with FY 2012 because of net held salary created throughout the year.

Total non present stakes expanded by 491% as contrasted with FY 2012 because of speculations made in PLBS adding up to Rs. 46bn. –

Current Assets diminished by 34% as contrasted with FY 2012 fundamentally because of fall in exchange obligation adjusts by 65% by virtue of infusion of trusts by Gop to intention the issue of round obligation. –

Total liabilities declined by 26% as contrasted with FY 2012 basically because of lessening In commitments to nearby refineries by 83%. Their duties were settled out of stores gained from Gop throughout the present year under the roundabout obligation settlement plan.

Director’s Report

Mr. Amjad Pervez Janjua

PSO is the oil market leader and one of the largest and most visible companies of Pakistan. It is

the linchpin of Pakistan's energy sector and the lifeblood of national economy. Our company has

been the oil market leader with a dominant or leading position in major product markets. At the

close of FY 2012-13, PSO had a market share of 64%, comprising 75.5% share in Black Oil and

557% share in White Oil. PSO's substantial strengths include a talented pool of committed

workforce, a well-established operational infrastructure and an extensive retail network.

However, the company faces significant challenges posed by intensifying competition, reliance

on external supply sources, and default on payment by large customers. The strength of the

competition in our major markets means that PSO is unable to stand still. We have to provide an

effective response to present and potential business challenges through high-quality professional

teamwork in line with our corporate vision, mission and values.

We realize that our competitive advantage lies in provision of the highest quality petroleum

products and services to our customers. Accordingly, we strive to ensure excellence in customer

service through safe, reliable, environment friendly and cost-effective operations. We have

undertaken market development, market penetration, product development, product portfolio

rationalization, strategic partnerships and business diversification initiatives.

Total quality management is the cornerstone of our operational activities. It covers equipment,

people and environment. Timely maintenance, refurbishment and upgrading of facilities is

carried out to ensure consistent conformance to prescribed standards and specifications across

the whole range of activities from product receipt, storage, transportation and delivery. The

overarching theme of our operations is to ensure that the products and services satisfy the

customers' needs.

As a responsible corporate citizen, we are committed to fulfillment of our responsibilities

towards internal and external stakeholders. Ensuring health and safety of PSO employees and all

those likely to be affected by the company's operations, observing the highest standards of

security, and supporting deprived segments of society are high on our corporate agenda. The

company realizes that in addition to being directly accountable to its shareholders, it Is

responsible to a wider group of stakeholders for supporting sustainable development and

expanding economic opportunity. In order to sustain and enhance effectiveness of our role iri the

times ahead, we plan to gain access to long term and cost effective supply sources and undertake

business enhancement and diversification initiatives. In addition, we shall undertake strategic

initiatives in all spheres of operations while remaining within our corporate mandate and the

normal business protocol, and while ensuring legal and regulatory compliance and following

high ethical values. A comprehensive human resource development program to enhance

corporate capabilities to meet today's needs and tomorrow's challenges will support our strategic

initiatives.

We shall gauge our operational performance In terms of highly ethical, safe, efficient and

responsible business practices; and in terms of market share and financial results. An even more

important measure of operational performance is the level of innovation and commitment to

continuous Improvement. This is particularly true for a company that aspires to 'get to the future

first!', as our vision proclaims. I would take this opportunity to acknowledge the wise counsel

and guidance of our Board of Management, the unwavering support of the government, the

dedication and hard work of PSO employees; and the continued trust of our customers and

business partners which we deeply appreciate and will seek to uphold.

Highlights of Director’s Report

Future Plans

Management drives to work towards optimum performance. To promote PSO’s lubricants range in the market Strengthen the company’s balance sheet.

Plan of Acquisition

According to Director their plans include a host of different approaches which includes backward integration acquisition of refinery along with aggressive marketing strategies and focus on customer delight

Auditors' Report

For the year ended June 30, 2013

We have audited the annexed balance sheet of Pakistan State Oil Company Limited ("the Company') as at June 30, 2013 and the related profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof, for the year then ended and we state that 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.

It is the responsibility of the Company's management to establish and maintain a system of internal control, and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit.

We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures In the above said statements. An audit also includes assessing the accounting policies and significant estimates made by management, as well as, evaluating the overall presentation of the above said statements. We believe that our audit provides a reasonable basis for our opinion and, after due verification, we report that:

a) in our opinion, proper books of account have been kept by the Company as required by the Companies Ordinance, 1984;

b) in our opinion:

I) the balance sheet and profit and loss account together with the notes thereon has been drawn up In conformity with the Companies Ordinance. 1984, and are In agreement with the books of account and are further in accordance with accounting policies consistently applied;

II) The expenditure incurred during the year was for the purpose of the Company's business; and

III) The business conducted, investments made and the expenditure incurred during the year were in accordance with the objects of the Company;

c) in our opinion and to the best of our information and according to the explanations given to us, the balance sheet, profit and loss account, statement of comprehensive income, cash flow

statement and statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable In Pakistan and give the information required by the Companies Ordinance, 1984, in the manner so required and respectively give a true and fair view of the state of the Company's affairs as at June 30. 2013 and of the profit, cash flows and changes in equity for the year then ended; and

d) in our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980) was deducted by the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.

We draw attention to the following matters:

• Notes 15.1 to 15.4 to the financial statements. The company considers the aggregate amount of Rs. 9456.66 million due from the Government of Pakistan respectively as good debts for reasons given In the notes;

• Note 2511 to the financial statements regarding non-accrual of mark-up on delayed payments for reasons given in the aforementioned note: and

• Note 251.2 to the financial statements regarding tax implication of Rs. 958 million on the Company

Financial Ratios

  Formulae 2013 2012 2011 2010 2009Profitability Ratios

1 Gross Profit ratio cogs/sales 2.82 2.86 3.52 3.32 0.422 Net Profit ratio net profit/sales 0.97 0.75 1.52 1.03 -0.933 EBITDA margin operating income/sales 2.15 2.21 3.18 3.31 -0.554 Return on Shareholders'

Equitynet profit/total equity 20.29 18.13 35.27 30.85 -32.1

5 Return on total assets net profit/total asset 4.46 2.61 5.63 4.47 -4.376 Operating Leverage

Ratiochange in EBIT/change in sale

67.46 -65.9 65.49 -2,930.77

-525.19

Turnover Ratios7 Inventory turnover ratio sales/inventories 13.3 13.05 12.66 17.67 13.968 No. of days in

Inventoryinventory*360/cogs 27 28 29 21 26

9 Debtor turnover ratio 8.79 7 8.05 8.86 12.5710 No. of days in

Receivablesnet account receivable/net sales

42 52 45 41 29

11 Creditor turnover ratio T. supplier purchases/average accounts payable

6.49 5.72 5.66 6.14 6.32

12 No. of days in Creditors accounts payable*360/cogs

56 64 65 59 58

13 Total asset turnover ratio

net sales/total assets 4.12 3.93 4.19 4.93 5.13

14 Fixed asset turnover ratio

sales/fixed assets 226.77 200.39 155.68

130.27 98.38

15 Operating Cycle DIO+DSO-DPO 13 16 10 2 -3

Market Ratios 16 Earnings per share profit/no. of outstanding

shares50.84 52.8 86.17 52.76 -39.05

17 Price earnings ratio (P/E)

market price/EPS 6.3 4.47 3.07 4.93 -5.47

18 Dividend per share dividend/no. of outstanding shares

5 5.5 10 8 5

19 Bonus Share bonus shares/no. of outstanding shares

20 20 - - -

20 Dividend Payout DPS/EPS*100 13.77 14.2 11.6 15.16 -12.8

21 Dividend yield DPS/market price 2.18 3.18 3.78 3.07 2.3422 Dividend cover ratio EPS/DPS 7.26 7.02 8.59 6.58 -7.79

Capital Structure Ratios

23 Interest Cover ratio EBIT/interest ecpense 3.51 2.17 2.51 2.77 -0.8924 Financial Leverage

ratiototal debt/shareholder's equity

0.28 0.92 0.59 0.44 0.89

25 Weighted Average Cost of Debt

E/V*Re+D/V*Rd*(1-Tc)

8.78 10.62 13.69 11.16 10.36

Liquidity Ratios26 Cash to Current

Liabilitiescash+cash equivalents+invested funds/current liabilities

0.02 -0.06 -0.09 -0.05 0.09

27 Cash Flow from Operations to Sales

operating cash flow/net sales

0.06 -0.02 -0.01 0.01 -0.01

28 Current Ratio current assets/current liabilities

1.04 1.15 1.16 1.14 1.07

29 Quick Ratio current assets-inventory/current liabilities

0.55 0.85 0.72 0.79 0.75

Solvency Ratio30 Debt Ratio total debt/total assets 0.78 0.84 0.82 0.79 0.831 Debt to Equity Ratio long term debt/equity 16.29 46.91 34.67 27.71 43.0432 Liabilities to Equity

Ratiototal liabilities/total equity

3.5 5.95 4.37 5.5 4.5

Horizontal and Vertical Analysis - Balance Sheet

VERTICAL ANALYSIS 2013 2012 2011 2010 2009 stainability Property. plant and equipment 1.97% 1.69% 2.33% 3.17% 4.60% NO Long term investments 17.15% 0.57% 0.88% 1.00% 1.40% NO Long term loans, advances and receivables 0.14% 0.11% 0.12% 0.16% 0.26% YESLong term deposits and prepayments 0.04% 0.04% 0.06% 0.06% 0.05% YESDeferred tax 0.94% 0.37% 36% 0.00% 3.28% YESTotal Non-Current Assets 20.25% 2.77% 3.75% 4.39% 9.60% NOOther Current Assets Stores, 0.04% 0.04% 0.06% 0.07% 0.09% YES spares and loose tools Stock-in-trade 37.71% 25.48% 36.31% 28.97% 26.53% NO % Trade debts 27.23% 62.75% 47.48% 58.10% 52.48% NOLoans and advances 0.17% 0.15% 0.16% 0.20% 0.27% YESDeposits and short term prepayments 0.86% 0.73% 0.39% 0.18% 0.36% YES Mat kup / Interest receivable 0.80% Other receivables 9.45% 6.08% 8.57% 7.20% 8.35% NOTaxation - net 1.63% 1.53% 2.40% 0.02% 0.46% NOCash and bank balances 1.86% 0.47% 0.88% 0.88% 1.88% NOTotal Current Assets 79.75% 97.23% 6.25% 95.61% 90.40% NOTotal Assets 100.00% 100.00% 100.00% 100.00% 100.00% Equity and Liabilities Share Capital 0.88% 0.49% 0.65% 0.85% 1.12% NO Reserves 21.12% 13.89% 15.30% 13.66% 12.49% NOTotal Shareholders Equity 22.00% 14.38% 15.95% 14.51% 13.60% NOLong term deposits 0.48% 0.34% 0.39% 0.47% 0.56% YESRetirement and other service benefits 0.85% 0.72% 0.85% 0.93% 1.09% NO Total Long term Liabilities 1.33% 1.06% 1.24% 1.40% 1.65% YESTrade and other payables 70.14% 71.03% 73.04% 77.15% 71.78% YESProvisions 0.24% 0.20% 0.26% 0.34% 0.45% YESAccrued interest / mark-up 0.15% 0.16% 0.16% 0.16% 0.36% YESShort term borrowings 6.14% 13.17% 9.34% 6.44% 12.16% NOTaxes payable 0.00% 0.00% 0.00% 0.00% 0.00% YESTotal Current Liabilities 76.67% 84.56% 82.81% 84.09% 84.75% NO

100.00% 100.00% 100.00% 100.00% 100.00%

HORIZONTAL ANALYSIS 2013 2012 2011 2010 2009 sustainability Property, plant and equipment 68% 72% 75% 79% 87% NOTotal Non-Current Assets 466% 79% 81% 73% 121% NOStock-in-trade 359% 299% 323% 198% 138% NOTrade debts 563% 1603% 917% 864% 592% NOOther receivables 169% 134% 143% 92% 81% NOCash and bank balances 343% 107% 152% 117% 189% NOTotal Current Assets 359% 540% 404% 309% 222% NOTotal Assets 376% 465% 351% 271% 205% NO

Vertical and Horizontal Analysis of Income statement

Cash Flow Statement

For the Year ended 30 June 2013

Sustainability

YES

YES

YES

YES NO

Sustainability

NO

NO

YES

NO

NO NO

Statement of Changes in Equity

For the Year ended 30 June 2013

Pricing Chart

Sources: http://www.reuters.com/finance/stocks/chart?symbol=PSO.KA https://pkfinance.info/kse/stock/pso

Conclusion

It can conclude by observation that Future of Oil and gas industry in Pakistan is looking brighter

side as it has seen in current situation its growth rate is increasing time to time

Oil and gas are two of the key components of the energy mix contributing 80% share to

the 64 million

These two segments of vigor help 77.40% to the vigor necessity of Pakistan. Pakistan has

assessed oil stores of 303.63 million barrels while its current preparation is 65,531 barrels

for every day

Over the past half century the petroleum business has assumed a critical part in national

advancement by making extensive indigenous gas revelations

While, PSO is playing a vital role to increase the significant growth of oil and gas sector

Pakistan State Oil (PSO) is the greatest Oil Marketing Company (OMC) in Pakistan with

a by and large made system, a pervasive retail framework and a common position in

bigger a piece of the thing markets with an all in all bit of the pie of 64%.

The balance sheet shows significant growing rate with little variation while, the critical

variety is broke down as accompanies: Shareholders value climbed by 24% as contrasted

with FY 2012 because of net held salary produced throughout the year. - Total non

present stakes expanded by 491% as contrasted with FY 2012 because of speculations

made in Plbs adding up to Rs. 46bn. - Current Assets diminished by 34% as contrasted

with FY 2012 fundamentally because of fall in exchange obligation adjusts by 65% by

virtue of infusion of stores by Gop to determination the issue of roundabout obligation. -

Total liabilities declined by 26% as contrasted with FY 2012 principally because of

lessening in commitments to neighborhood refineries by 83%. Their duties were settled

out of trusts appropriated from Gop throughout the present year under the roundabout

obligation settlement plan.

Therefore, cash flow statement show

A significant improvement is registered in cash flows from operating activities as compared

to previous years mainly due to significant reduction in receivables from the power sector

entities owing to injection of funds by GoP close to financial year end, which ultimately

resulted in positive cash flows from operations of Rs. 79 bn

Cash flows from investing activities depicts a major outflow of Rs. 46 bn in comparison

to previous years due to investment made in PlBs amounting to Rs. 46bn in accordance

with the circular debt settlement plan duly approved by the ECC, GoP on June 28, 2013

Cash flows from financing activities depicts an outflow position as compared to previous

years due to repayment of short term finances owing to improvements in overall liquidity

position as a result of funds injection by GoP

However, the ratios analysis shows

In Profitability ratios The Gross Profit and EBITDA ratios have shown a

stable trend. While NP ratio has increased by 29% as compared to FY 2012

for reasons mentioned in the Profit 8, Loss segment. The return on

shareholders' equity has increased mainly due to an increase in bottom line by

39% as compared to re 2012 Which was partly offset by the impact of bonus

issues in equity. The return on total assets has increased due to the impact of

an increase In profit after tax and decline in total assets by 19% as compared

to FY 2012 duo to settlement of circular debt related receivables. The return

on capital employed has decreased as compared to FY 2012 mainly because

of Increase in capital employed due to the Impact of bonus Issue

Market ratios show As of June 30, 2013, Price earnings ratio has increased

due to improvement in investors' confidence in PSO on account of improved

profitability and settlement of circular debt issue. The dividend payout and

yield percentages are showing a declining trend as compared to FY 2012 due

to less dividend declared of Rs7 per share (including bonus) as compared to

Rs. 7.5 per share (including bonus) in FY 2012 despite increase in PAT

Organize yourdigital photos

Liquidity ratio show Cash to Current liabilities and Cash flow from

operations to Sales have Improved as compared to FY 2012 due to

improvement in cash flow position close to year end on account of fund

injections by GoP on June 28, 2013 to settle circular debt. In comparison to

FY 2012, the Current ratio has remained flat whereas Quick ratio has

declined due to increase in stock balances.

Vertical and horizontal analysis of balance sheet shows that

Share holder’s equity increased due to retention of profits in business to overcome

debt crises during 2009 to 2013

Trade and other payables have shown unusual increased as compared to 2007 while

the stock in trade has increased by 259% as compared to 2007

Whereas, the vertical and horizontal analysis of profit and loss accounts shows

Gross sales revenue increased from 411bn in 2007 to rs.13trillion in 2013

Gross profit has also increased in line with revenues and registered an increase of

198%

Finance cost has shown an unusual increase over the years as compare to 2007 while

total operating cost grown over the years of 172%

Profit after tax has shown increased of 168% in comparison with 2007 due to reason

mentioned above

Hence PSO have a strong grip on market which can lead to retain goodwill and increase

company’s worth