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.

Total Resource Potential 27 Billion Barrels Refining Capacity 14 Million Tones Recoverable Reserves 248 Million Barrels
: : :

Consumption Production Imports

: :

19.21 Million Tones 66.032 Barrels/day 16 Million Tones

:

Pakistan with its ideal location is recognized as the regional gateway for energy. The energy sector continues to dominate the overall structural character of Pakistans 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 Pakistans 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 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 countrys 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 presents 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.

Directors 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 Directors Report

Future Plans Management drives to work towards optimum performance. To promote PSOs lubricants range in the market Strengthen the companys 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 1 2 3 4 Profitability Ratios Gross Profit ratio Net Profit ratio EBITDA margin Return on Shareholders' Equity cogs/sales net profit/sales operating income/sales net profit/total equity net profit/total asset change in EBIT/change in sale 2013 2.82 0.97 2.15 20.29 4.46 67.46 2012 2.86 0.75 2.21 18.13 2.61 -65.9 2011 3.52 1.52 3.18 35.27 5.63 65.49 2010 3.32 1.03 3.31 30.85 2009 0.42 -0.93 -0.55 -32.1

5 Return on total assets 6 Operating Leverage Ratio Turnover Ratios Inventory turnover ratio No. of days in Inventory Debtor turnover ratio No. of days in Receivables

4.47 -4.37 2,930.77 525.19

7 8 9 10

sales/inventories inventory*360/cogs

13.3 27 8.79 42 6.49

13.05 28 7 52 5.72

12.66 29 8.05 45 5.66

17.67 21 8.86 41 6.14

13.96 26 12.57 29 6.32

net account receivable/net sales T. supplier purchases/average accounts payable

11 Creditor turnover ratio

12 No. of days in Creditors accounts payable*360/cogs 13 Total asset turnover ratio 14 Fixed asset turnover ratio 15 Operating Cycle Market Ratios Earnings per share net sales/total assets sales/fixed assets DIO+DSO-DPO

56 4.12 226.77 13

64 3.93 200.39 16

65 4.19 155.68 10

59 4.93 130.27 2

58 5.13 98.38 -3

16

profit/no. of outstanding shares market price/EPS dividend/no. of outstanding shares bonus shares/no. of outstanding shares

50.84 6.3 5

52.8 4.47 5.5

86.17 3.07 10

52.76 4.93 8

-39.05 -5.47 5

17 Price earnings ratio (P/E) 18 Dividend per share

19 Bonus Share

20

20

20 Dividend Payout 21 Dividend yield 22 Dividend cover ratio Capital Structure Ratios 23 Interest Cover ratio 24 Financial Leverage ratio

DPS/EPS*100 DPS/market price EPS/DPS

13.77 2.18 7.26

14.2 3.18 7.02

11.6 3.78 8.59

15.16 3.07 6.58

-12.8 2.34 -7.79

EBIT/interest ecpense total debt/shareholder's equity

3.51 0.28 8.78

2.17 0.92 10.62

2.51 0.59 13.69

2.77 0.44 11.16

-0.89 0.89 10.36

25 Weighted Average Cost E/V*Re+D/V*Rd*(1of Debt Tc) Liquidity Ratios 26 Cash to Current Liabilities 27 Cash Flow from Operations to Sales 28 Current Ratio 29 Quick Ratio

cash+cash equivalents+invested funds/current liabilities operating cash flow/net sales current assets/current liabilities current assetsinventory/current liabilities

0.02

-0.06

-0.09

-0.05

0.09

0.06 1.04 0.55

-0.02 1.15 0.85

-0.01 1.16 0.72

0.01 1.14 0.79

-0.01 1.07 0.75

Solvency Ratio 30 Debt Ratio 31 Debt to Equity Ratio 32 Liabilities to Equity Ratio

total debt/total assets long term debt/equity total liabilities/total equity

0.78 16.29 3.5

0.84 46.91 5.95

0.82 34.67 4.37

0.79 27.71 5.5

0.8 43.04 4.5

Horizontal and Vertical Analysis - Balance Sheet

VERTICAL ANALYSIS Property. plant and equipment Long term investments Long term loans, advances and receivables Long term deposits and prepayments Deferred tax Total Non-Current Assets Other Current Assets Stores, spares and loose tools Stock-in-trade % Trade debts Loans and advances Deposits and short term prepayments Mat kup / Interest receivable Other receivables Taxation - net Cash and bank balances Total Current Assets Total Assets Equity and Liabilities Share Capital Reserves Total Shareholders Equity Long term deposits Retirement and other service benefits Total Long term Liabilities Trade and other payables Provisions Accrued interest / mark-up Short term borrowings Taxes payable Total Current Liabilities

2013
1.97% 17.15% 0.14% 0.04% 0.94% 20.25% 0.04%

2012 2011 2010 2009 stainability

1.69% 0.57% 0.11% 0.04% 0.37% 2.77% 0.04% 2.33% 3.17% 0.88% 1.00% 0.12% 0.16% 0.06% 0.06% 36% 0.00% 3.75% 4.39% 0.06% 0.07% 4.60% 1.40% 0.26% 0.05% 3.28% 9.60% 0.09% NO NO YES YES YES NO YES

37.71% 25.48% 36.31% 28.97% 26.53% NO 27.23% 62.75% 47.48% 58.10% 52.48% NO 0.17% 0.15% 0.16% 0.20% 0.27% YES 0.86% 0.73% 0.39% 0.18% 0.36% YES 0.80% 9.45% 6.08% 8.57% 7.20% 8.35% NO 1.63% 1.53% 2.40% 0.02% 0.46% NO 1.86% 0.47% 0.88% 0.88% 1.88% NO 79.75% 97.23% 6.25% 95.61% 90.40% NO 100.00% 100.00% 100.00% 100.00% 100.00% 0.88% 0.49% 0.65% 0.85% 1.12% NO 21.12% 13.89% 15.30% 13.66% 12.49% NO 22.00% 14.38% 15.95% 14.51% 13.60% NO 0.48% 0.34% 0.39% 0.47% 0.56% YES 0.85% 0.72% 0.85% 0.93% 1.09% NO 1.33% 1.06% 1.24% 1.40% 1.65% YES 70.14% 71.03% 73.04% 77.15% 71.78% YES 0.24% 0.20% 0.26% 0.34% 0.45% YES 0.15% 0.16% 0.16% 0.16% 0.36% YES 6.14% 13.17% 9.34% 6.44% 12.16% NO 0.00% 0.00% 0.00% 0.00% 0.00% YES 76.67% 84.56% 82.81% 84.09% 84.75% NO 100.00% 100.00% 100.00% 100.00% 100.00%

HORIZONTAL ANALYSIS Property, plant and equipment Total Non-Current Assets Stock-in-trade Trade debts Other receivables Cash and bank balances Total Current Assets Total Assets

2013
68% 466% 359% 563% 169% 343% 359% 376%

2012 2011 2010 2009 sustainability

72% 75% 79% 81% 299% 323% 1603% 917% 134% 143% 107% 152% 540% 404% 465% 351% 79% 73% 198% 864% 92% 117% 309% 271% 87% 121% 138% 592% 81% 189% 222% 205% NO NO NO NO NO NO NO NO

Vertical and Horizontal Analysis of Income statement

Sustainability
YES

YES

YES

YES NO

Sustainability
NO

NO YES

NO

NO NO

Cash Flow Statement

For the Year ended 30 June 2013

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

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 holders 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 companys worth