NUST BUSINESS SCHOOL

Financial Statement Analysis of

Pakistan Oilfields Limited

DATE OF SUBMISSION: 23rd January, 2011

 TABLE OF CONTENTS
Table of contents...................................................................................................................................2

Executive Summary...............................................................................................................................3

Introduction............................................................................................................................................4

Ownership Structure..............................................................................................................................7

Management..........................................................................................................................................9

Auditors..................................................................................................................................................9

Significant accounting policies.............................................................................................................10

Management Analysis & Discussion....................................................................................................11

Common size statements....................................................................................................................12

Ratio analysis......................................................................................................................................19
 EXECUTIVE SUMMARY

The project aimed at carrying out a comprehensive financial statement analysis of Pakistan Oilfields
Limited. The project focused on the analysis of financial performance of the company over the past
five years and their comparison.

This report contains the Company History, Vision, Mission and Strategy. Company’s core values and
products have been listed down. Company’s ownership structure, Board of Directors and
Management have been listed along with changes in past 5 years.

Financial accounts have been presented in common size pattern for easy understanding and bench
marking. Ratio analysis provides the health of the company against different business indicators and
other companies in same industry.
 INTRODUCTION

Company History
Pakistan Oilfields Limited is a leading oil and gas exploration and production company listed on all the
three stock exchanges of Pakistan. The Company’s prime focus is to deliver performance through
excellence in the field of exploration, drilling and production of crude oil and gas..

Pakistan Oilfields Limited (POL), a subsidiary of The Attock Oil Company Limited (AOC), was
incorporated on November 25, 1950. AOC was founded in 1913 and made its first oil discovery in
1915 at Khaur, District Attock. AOC has, therefore, pioneered exploration and production of oil and
gas in this region nearly a century ago. In 1978, POL took over the exploration and production
business of AOC. Since then, POL has been investing independently and in joint venture with various
exploration and production companies for the search of oil and gas in the country. In addition to
exploration and production of oil and gas, POL plants also manufacture LPG, solvent oil and sulphur.
POL markets LPG under its own brand named POLGAS as well as through its subsidiary CAPGAS
(Private) Limited. POL also operates a network of pipelines for transportation of its own as well as
other companies’ crude oil to Attock Refinery Limited. In 2005, the Company acquired a 25% share in
National Refinery Limited, which is the only refining complex in the country producing fuel products as
well as lube base oils.

Business Philosophy

Vision 2010

To be the leading oil and gas exploration and production Company of Pakistan with the highest
proven hydrocarbon reserves and production, and which provides optimum value to all
stakeholders.

Mission 2010
We aim to discover and develop new hydrocarbon reserves and enhance production from existing
reserves through the application of the best available technologies and expertise. In achieving our
aim, we will maximize the return to our shareholders, fully protect the environment, enhance the well-
being of our employees and contribute to the national economy.

Strategy

Pakistan Oilfields Limited is a growth oriented leading exploration and Production Company of
Pakistan. Our prime focus is to deliver performance through excellence in the field of exploration and
exploitation. We plan to increase our current level of oil and gas production through the application of
innovative technology to obtain maximum productivity. Our long term goal is to sustain production by
regularly adding new reserves. Our ultimate goal is to maximize returns to our shareholders and
provide optimum value to all stakeholders.
Core Values
Leadership

We value leadership qualities with the necessary managerial and professional competence coupled
with integrity, energy and the drive to challenge the status quo.

Continuous quality improvement

We strongly believe that quality and an unyielding commitment to continuous improvement are
indispensable ingredients to achieving success. At POL, we encourage and promote an environment
conducive to the development of breakthrough ideas leading to innovative solutions.

Ethics and integrity

Honesty, ethical behaviour and integrity combined with the highest professional and personal
standards form the cornerstone of all our activities.

Profitability

We believe in maximizing the return to our shareholders and enhancing the long term profitability of
the Company through the application of the best available technology and expertise.

Employees, growth and development

We believe in the creation of an environment focused on encouraging and empowering employees to

contribute to the Company’s success through personal growth and development.

Community involvement

We strongly believe actively involving the communities in which we operate for the advancement of
their cultural and social life.

Safety, health and environment

We care about the health and safety of our employees and of the communities in which we conduct
our business. We remain deeply committed to respect and protect the environment.

Code of Conduct
It is the Company’s policy to conduct its operations in accordance with the highest business ethical
considerations, to comply with all statutory regulations and to conform to the best accepted standards
of good corporate citizenship. This policy applies to all directors and employees of the Company
regardless of function, grade or standing.
 Products
• Crude Oil

It is an oily, flammable liquid that occurs naturally in deposits, usually beneath the surface of
the earth. It consists principally of a mixture of hydrocarbons, with traces of various nitrogenous and
sulphurous compounds. During the past 600 million years, incompletely decayed plant and animal
remains have become buried under thick layers of rock. It is believed that petroleum consists of the
remains of these organisms but it is the small microscopic plankton organism remains that are largely
responsible for the relatively high organic carbon content of fine-grained sediments which are the
principle source rocks for petroleum. The world is heavily dependent on petroleum for motive power,
lubrication, fuel, dyes, drugs and many synthetics.

• Natural Gas

Natural mixture of gaseous hydrocarbons found issuing from the ground or obtained from
specially driven wells. The composition of natural gas varies in different localities. Its chief component,
methane, usually makes up from 70% to 95% and the balance is composed of varying amounts of
ethane, propane, butane and other hydrocarbon compounds. Although commonly associated with
deposits, it also occurs separately in sand, sandstone and limestone deposits. Some geologists
theorize that natural gas is a byproduct of decaying vegetable matter in underground strata, while
others think it may be primordial gases that rise up from the mantle. Because of its flammability and
high calorific value, natural gas is used extensively as an illuminant and a fuel.

• Liquefied Petroleum Gas (LPG)

LPG is a mixture of gases, mainly propane and butane, produced commercially from petroleum
and stored under pressure to keep it in a liquid state. The boiling point of liquefied petroleum gas
varies from about -44°C to 0°C, so that the pressure required to liquefy it is considerable and the
containers for it must be of heavy steel. Common uses are for cooking and heating and lighting. It is
also used for powering automotive vehicles. LPG is an attractive fuel for internal combustion engines
because it burns with little air pollution and little solid residue.

• Solvent Oil (SO)

Solvent oil is one of the five major oil products closely related to people’s daily life. Its application
sectors also have a constant expansion. There are also extensive uses in rubber, leather and
adhesive sectors.

• Sulphur

Solid Sulphur occurs principally in three forms, all of which are brittle, yellow in color, odorless,
tasteless, and insoluble in water. It is a chemically active element and forms many compounds, both
by itself (sulfides) and in combination with other elements. It is part of many organic compounds.
Sulphur is used in black gunpowder, matches and fireworks; in the vulcanization of rubber; as a
fungicide and insecticide; and in the treatment of certain skin diseases. The principal use of Sulphur is
in the preparation of its compounds. The most important Sulphur compound is Sulphuric acid.

OWNERSHIP STRUCTURE

Major Shareholding Groups

Categories of Number of Number of Percent
Shareholders Shareholders Shares Held age

Investment Corporation of
Pakistan 1 97 0
National Bank of Pakistan
Trustee Department (NIT) 2 2,681,651 1.13
Banks & Financial Institutions 42 19,484,578 8.24
Associated Companies 2 127,407,808 53.86
Public Sectors Companies 178 5,705,971 2.41
Leasing Companies 4 74,103 0.03
Modaraba Companies 9 45,488 0.02
Mutual Funds 66 19,595,875 8.29
Investment Companies 14 1,442,517 0.61
Insurance Companies 23 17,413,485 7.36
Individuals 5,083 25,152,392 10.63
Others:
Employees 1 10,648,860 4.5
Deputy 1 13,900 0.01
Employees 44 3,889,621 1.65
Charitable 38 2,989,574 1.26

TOTAL 5,508 236,545,920 100

Current Composition of Board

Director Category Committee
Membership
Dr. Ghaith R. Non-Executive
Pharaon
Shuaib Anwar Malik Executive
Laith Ghaith Pharaon Non-Executive
Wael Ghaith Pharaon Non-Executive
Arif Kemal Non-Executive
Abdus Sattar Non-Executive Audit
Mohammad Non-Executive
Razziuddin
Iqbal A. Khwaja Alternate / Non-Executive Audit
Babar Bashir Nawaz Alternate / Non-Executive Audit
Muhammad Abdullah Alternate / Non-Executive
Yusuf

Board of Directors Mapping for Last 4 Years

Director 2007 2008 2009 2010
Dr. Ghaith R. Dr. Ghaith R. Dr. Ghaith R. Dr. Ghaith R. Dr. Ghaith R.
Pharaon Pharaon Pharaon Pharaon Pharaon
Laith Ghaith Laith Ghaith Laith Ghaith Laith Ghaith Laith Ghaith
Pharaon Pharaon Pharaon Pharaon Pharaon
Wael Ghaith Wael Ghaith Wael Ghaith Wael Ghaith Wael Ghaith
Pharaon Pharaon Pharaon Pharaon Pharaon
Bashir Ahmad Bashir Ahmad Bashir Ahmad Arif Kemal Arif Kemal
Abdus Sattar Abdus Sattar Abdus Sattar Abdus Sattar Abdus Sattar
Muhammad Muhammad Muhammad Muhammad Mohammad
Najam Ali Najam Ali Najam Ali Najam Ali Razziuddin
Shuaib Anwar Shuaib Anwar Shuaib Anwar Shuaib Shuaib Anwar
Malik Malik Malik Anwar Malik Malik
Sajid Nawaz Sajid Nawaz Sajid Nawaz Sajid Nawaz
Babar Bashir Babar Bashir Babar Bashir Babar Bashir Babar Bashir
Nawaz Nawaz Nawaz Nawaz Nawaz
Iqbal A. - - Iqbal A. Iqbal A.
Khwaja Khwaja Khwaja
Muhammad - - Muhammad Muhammad
Abdullah Abdullah Abdullah
Yusuf Yusuf Yusuf
 MANAGEMENT

Current Senior Management Structure

Name Designation

Shuaib A Malik Chairman & Chief Executive

Badar -e-Alam General Manager
Syed Tahir Sher Mohammad GM (Exploration)
Syed Khalid Hussain GM (Operations)
Bilal Ahmad Khan GM
Saadat Anis GM
Jamil Asghar Asst GM (Engineering)
Naeem Ehsan Asst GM (Drilling & Workover)
Naveed Akram Asst GM (Reservoir)
Syed Khalid Nafees Zaidi Chief Financial Officer
Saqib Iqbal Senior Manager (Geophysics)
Zaheer Alam Senior Manager (Process & HSE)
Naveed Y. Rao Senior Manager Sales & Marketing
Ahmed Hayat Lak Manager (Legal & Corporate Affairs)
Dr. Shoaib Chief Medical Officer
Syed Asad Abbas Manager (Internal Audit)
Zafar Munir Manager (Admin)- Fields
Riazuddin Ahmed Manager (Production)
Ali Sher Khan Manager (Engineering)
Athar Sibghatullah Manager (Finance)

AUDITORS

Auditors Remuneration Audit

2006 A.F. Ferguson & Co. 2,700,000
2007 A.F. Ferguson & Co. 2,004,000
2008 A.F. Ferguson & Co. 1,978,000
2009 A.F. Ferguson & Co. 3,574,000
2010 A.F. Ferguson & Co. 4,079,000
 SIGNIFICANT ACCOUNTING POLICIES
Provision for decommissioning cost

Provision for decommissioning cost is recognized in full for development wells and production
facilities. The amount recognized is the present value of the estimated cost to abandon a well and
remove production facilities. A corresponding intangible asset of an amount equivalent to the
provision is also created and is amortized on unit of production basis over the total proved developed
reserves of the field or @ 5% where the life of a field is more than 20 years.

Most of these abandonment and removal events are many years in the future and the precise
requirements that will have to be met when the abandonment and removal event actually occurs are
uncertain. Abandonment and asset removal technologies and costs are constantly changing, as are
political, environmental, safety and public expectations. Consequently, the timing and amount of
future cash flows are subject to significant uncertainty.

The timing and amount of future expenditures are reviewed annually, together with the interest rate to
be used in discounting the cash flows.

The effects of changes resulting from revisions to the estimate of the liability are incorporated on a
prospective basis.

The decommissioning cost has been discounted at a real discount rate of 5% p.a. (2009: 5%). The
increase in provision due to unwinding of discount is recorded as finance cost.1

Exploration assets/costs and development costs

Exploration and development costs are accounted for using the “Successful Efforts Method” of
accounting.

Exploration costs

All exploration costs, other than those relating to exploratory drilling, are charged to income as
incurred. Exploratory drilling costs i.e. costs directly associated with drilling of an exploratory well are
initially capitalized pending determination of proven reserves. These costs are either charged to
income if no proved reserves are found or transferred to development costs if proved reserves are
found.
All capitalized costs are subject to review for impairment at least once a year and any impairment
determined is immediately charged to income.

Development costs

Development costs are stated at cost less accumulated amortization and impairment losses.
Expenditure on drilling of development wells, including unsuccessful development wells, is capitalized
within development costs. Capitalized development costs are amortized on a unit of production basis
over the total proved developed reserves of the field or @ 5% per annum where the life of the field is
more than 20 years.2

1
Note 4.7, POL Annual Report 2010
2
Note 4.13, POL Annual Report 2010
 MANAGEMENT ANALYSIS & DISCUSSION

Chairman’s Review
Topics 2007 2008 2009 2010
Results/Profitability Y Y Y Y
International oil prices Y Y Y Y
Production Y Y Y Y
R&D Y Y Y Y
Acknowledgement Y Y Y Y
Outlook Y Y Y Y

The Chairman’s review starts with business results, analyzing the profits of this year to the previous
years. It goes on to highlight the reason for increased/decreased profitability which include oil prices
and increased/decreased production. Net Sales are highlighted and are analyzed with respect to
successful commissioning of digging wells or gas production units.

The profit margins and the profitability of the company have increased gradually as a result of the
improving economy and infrastructural development consequently increasing demand for petroleum
products.

Chairman’s review goes on to declare the dividend. Final and interim dividends are mentioned
separately.

Furthermore, successful explorations are mentioned and expectations on wells under development
are highlighted.

Directors’ Report
Topics 2007 2008 2009 2020
 Financial results' summary Y Y Y Y
Contribution to the national economy Y Y Y Y
Cash Flows Y Y Y Y
Dividend Y Y Y Y
Production results Y Y Y Y
Operations Review Y Y Y Y
Producing Fields Y Y Y Y
Explorations Y Y Y Y
Subsidiary Y Y Y Y
Risk Management Y Y Y Y
Material Risks being faced by the
company Y Y Y Y
Business Process Reengineering Y Y Y Y
Corporate Social Responsibility Y Y Y Y
ERP Software Y Y Y Y
Corporate governance Y Y Y Y
BOD meetings Y Y Y Y
Auditors' Y Y Y Y
Shareholding Y Y Y Y
Holding Company Y Y Y Y

The directors’ report starts with financial results summary giving a brief analysis of the financial
figures. The national economic situation as well as the changing oil prices has also been given.

Producing Fields are explained in details and Development activities are provided. Successful as well
as unsuccessful explorations have been highlighted. Materials risks faced by the company are listed
in details.

Compliance with the code of governance was ensured and as a result pattern of shareholding was
disclosed. The company has been laying great stress on making its systems efficient and for this it
has been continuously upgrading its machines. To further promote effective running of the systems,
ERP software was installed.

The Company has also established several foundations to work towards a socially responsible
organization.

COMMON SIZE STATEMENTS

Common size income statement

 Common Size Profit & Loss
(as %age of Sales)
2010 2009 2008 2007 2006
NET SALES 100% 100% 100% 100% 100%
OPERATING COSTS
Operating costs- Own Fields -2% -2% -1% -1% -2%
Operating costs- Share in Joint Ventures -6% -8% -5% -6% -7%
Well work over -1% -4% -1% -3% -1%
POLGAS/CAPGAS- Cost of gas/LPG,
carriage etc -13% -11% -12% -13% -10%
Head Office and Insurance Charges 0% 0% 0% 0% 0%
Pumping and transportation cost 0% 0% 0% 0% 0%
Depreciation -3% -2% -2% -2% -1%
-25% -27% -22% -24% -21%
Opening Stock of crude oil and other
products 1% 0% 0% 0% 0%
Closing Stock of crude oil and other
products -1% -1% 0% -1% 0%
Operating costs -25% -27% -22% -24% -21%
Excise duty and development surcharge -1% -1% -1% -1% -1%
Royalty -9% -8% -9% -9% -9%
Amortisation of development and
decommissioning costs -6% -6% -7% -6% -5%
-40% -42% -38% -41% -37%
GROSS PROFIT 60% 58% 62% 59% 63%
Exploration costs -9% -14% -6% -6% -8%
51% 44% 56% 53% 55%
Administration expenses 0% 0% 0% 0% 0%
Finance cost -2% -4% -2% -2% -2%
Other charges -4% -4% -4% -4% -4%
-6% -8% -6% -6% -6%
45% 36% 50% 47% 49%
Other operating income 6% 10% 6% 5% 3%
50% 47% 55% 52% 52%
Profit/ (loss) on investment in associated
companies 0% -1% 0% 0% 0%
PROFIT BEFORE TAXATION 50% 46% 56% 52% 52%
Provision for taxation -12% -11% -17% -12% -14%
PROFIT AFTER TAXATION 38% 34% 39% 40% 38%

Share in profits of associated companies 6% 4% 10% 8% 6%

44% 39% 49% 48% 44%
Minority interests in profit of consolidated
subsidiary company 0% 0% 0% 0% 0%
PROFIT FOR THE YEAR 44% 38% 49% 47% 44%

Earning Per Share (Rupees) 34.34 23.59 42.68 34.95 34.90

Common size balance sheet

Common Size Balance Sheets (as

% of total assets)
 2010 2009 2008 2007 2006
SHARE CAPITAL AND RESERVES
Authorised capital 12% 14% 14% 18% 8%
Issued, subscribed and paid-up capital 6% 6% 6% 7% 8%
Capital reserve
Bonus shares issued by 0% 0% 0% 0% 0%
subsidiary/associated companies 0% 0% 0% 0% 0%
Special reserves 1% 1% 3% 2% 1%
1% 2% 4% 2% 1%
Revenue reserves
Insurance reserve 0% 1% 1% 1% 1%
General reserve 5% 3% 2% 1% 0%
Unappropriated profit 63% 64% 66% 68% 53%
68% 67% 69% 70% 54%
Fair value gain on available-for-sale investments 0% 0% 0% 0% 0%
75% 75% 78% 79% 64%
MINORITY INTEREST IN EQUITY OF
CONSOLIDATED SUBSIDIARY COMPANY 0% 0% 0% 0% 0%
NON CURRENT LIABILITIES
Long term loans and murabaha finance 0% 0% 0% 0% 7%
Long term deposits 1% 2% 2% 2% 2%
Deferred liabilities 15% 15% 12% 12% 11%
17% 17% 14% 14% 20%
CURRENT LIABILITIES AND PROVISIONS
Current por tion of murabaha finance 0% 0% 0% 0% 4%
Interest accrued on murabaha finance 0% 0% 0% 0% 0%
Short term finance 0% 0% 0% 0% 0%
Trade and other payables 6% 6% 7% 6% 9%
Provision for income tax 2% 1% 2% 1% 3%
8% 8% 9% 7% 16%
CONTINGENCIES AND COMMITMENTS
100 100 100 100 100
% % % % %
FIXED ASSETS
Property, plant and equipment 10% 11% 8% 8% 7%
Development and decommissioning costs 25% 21% 19% 22% 0%
Exploration and evaluation assets 6% 10% 4% 1% 20%
41% 42% 30% 31% 27%
LONG TERM INVESTMENTS IN
ASSOCIATED COMPANIES 28% 30% 32% 36% 36%
OTHER LONG TERM INVESTMENTS 0% 1% 2% 3% 1%
LONG TERM LOANS AND ADVANCES 0% 0% 0% 0% 0%
CURRENT ASSETS
Stores and spares 6% 8% 7% 8% 6%
Stock in trade 0% 0% 0% 0% 0%
Trade debts 6% 5% 5% 9% 10%
Advances, deposits, prepayments and 0% 0% 0% 0% 0%
other receivables 2% 3% 2% 1% 1%
Income tax refundable 0% 0% 0% 0% 0%
Short term investments 5% 0% 0% 0% 1%
Cash and bank balances 10% 11% 22% 12% 17%
30% 27% 36% 31% 35%
100 100 100 100 100
% % % % %

Common Size Balance Sheets

(as % of sales)
2010 2009 2008 2007 2006

SHARE CAPITAL AND RESERVES

Authorised capital 27% 34% 29% 34% 13%

Issued, subscribed and paid-up capital 13% 16% 11% 14% 13%
Capital reserve

Bonus shares issued by 0% 0% 0% 0% 0%

subsidiary/associated companies 0% 0% 0% 0% 0%
Special reserves 2% 4% 7% 3% 2%
2% 4% 7% 3% 2%
Revenue reserves

Insurance reserve 1% 1% 1% 1% 1%
General reserve 11% 8% 5% 2% 0%
144 160 133 128
Unappropriated profit % % % % 83%
155 169 139 131
% % % % 85%
Fair value gain on available-for-sale investments 0% 0% 0% 0% 0%
170 189 157 149 100
% % % % %
MINORITY INTEREST IN EQUITY OF
CONSOLIDATED SUBSIDIARY COMPANY 0% 0% 0% 1% 0%
NON CURRENT LIABILITIES

Long term loans and murabaha finance 0% 0% 0% 0% 10%

Long term deposits 3% 4% 3% 4% 4%
Deferred liabilities 35% 38% 24% 23% 17%
38% 42% 27% 27% 31%
CURRENT LIABILITIES AND PROVISIONS

Current por tion of murabaha finance 0% 0% 0% 0% 7%

Interest accrued on murabaha finance 0% 0% 0% 0% 0%
Short term finance 0% 0% 0% 0% 0%
Trade and other payables 13% 16% 13% 11% 14%
Provision for income tax 6% 3% 4% 2% 4%
18% 19% 17% 13% 26%
CONTINGENCIES AND COMMITMENTS
227 251 202 189 156
% % % % %
FIXED ASSETS
Property, plant and equipment 23% 28% 16% 15% 11%
Development and decommissioning costs 57% 53% 38% 41% 0%
Exploration and evaluation assets 15% 24% 7% 3% 31%
105
94% % 61% 59% 42%
LONG TERM INVESTMENTS IN

ASSOCIATED COMPANIES 64% 77% 65% 68% 57%

OTHER LONG TERM INVESTMENTS 1% 1% 4% 5% 2%
LONG TERM LOANS AND ADVANCES 0% 0% 0% 0% 0%
CURRENT ASSETS

Stores and spares 14% 19% 13% 16% 10%

Stock in trade 1% 1% 0% 1% 0%
Trade debts 14% 13% 11% 16% 16%
Advances, deposits, prepayments and 0% 0% 0% 0% 0%
other receivables 4% 8% 4% 2% 2%
Income tax refundable 0% 0% 0% 0% 0%
Short term investments 12% 0% 0% 1% 1%
Cash and bank balances 23% 28% 44% 23% 26%
68% 68% 73% 58% 55%
227 251 202 189 156
% % % % %
 Common Size Balance Sheets
(Current Liabilities with Total
Current Liabilities)
CURRENT LIABILITIES AND PROVISIONS 2010 2009 2008 2007 2006
Current por tion of murabaha finance 0% 0% 0% 0% 27%
Interest accrued on murabaha finance 0% 0% 0% 0% 2%
Short term finance 0% 0% 0% 0% 0%
Trade and other payables 69% 83% 76% 84% 55%
Provision for income tax 31% 17% 24% 16% 17%
100 100 100 100 100
% % % % %

Common Size Balance Sheets

(Current Assets with Total
Current Assets)
CURRENT ASSETS 2010 2009 2008 2007 2006
Stores and spares 21% 28% 18% 27% 18%
Stock in trade 1% 1% 1% 1% 1%
Trade debts 21% 18% 14% 28% 29%
Advances, deposits, prepayments and 0% 0% 0% 0% 0%
other receivables 5% 12% 6% 3% 3%
Income tax refundable 0% 0% 0% 0% 0%
Short term investments 18% 0% 1% 1% 1%
Cash and bank balances 34% 41% 60% 40% 48%
100 100 100 100 100
% % % % %

Common Size Balance

Sheets
(Liabilities with Total
Liabilities)
2010 2009 2008 2007 2006
NON CURRENT LIABILITIES
Long term loans and murabaha finance 0% 0% 0% 0% 18%
10
Long term deposits 6% 6% 8% % 6%
62 62 53 56
Deferred liabilities % % % % 30%
67 69 61 66
% % % % 54%
CURRENT LIABILITIES AND PROVISIONS
Current por tion of murabaha finance 0% 0% 0% 0% 12%
Interest accrued on murabaha finance 0% 0% 0% 0% 1%
Short term finance 0% 0% 0% 0% 0%
Trade and other payables 23 26 30 28 25%
 % % % %
10
Provision for income tax % 5% 9% 5% 8%
33 31 39 34
% % % % 46%
 RATIO ANALYSIS
2010 2009 2008 2007 2006
LIQUIDITY RATIOS
Current Ratio 3.68 3.55 4.19 4.30 2.15
Quick Ratio 2.67 2.11 3.16 2.95 1.68
Cash Ratio 1.91 1.46 2.55 1.75 1.06
554. 370. 740. 474. 534.
Defensive Interval 34 58 34 08 26
- - - - -
78.9 38.8 94.0 71.1 90.9
Cash Conversion Cycle 8 0 9 1 5

ACTIVITY RATIOS
45.7 48.8 54.2 51.3 69.5
Inventory Turnover 8 8 2 7 7
Days inventory on Hand 7.97 7.47 6.73 7.10 5.25
Receivables Turnover 8.35 8.02 8.27 6.00 8.72
43.7 45.5 44.1 60.8 41.8
DSO 2 4 4 6 4
Payables Turnover 2.79 3.98 2.52 2.62 2.64
130. 91.8 144. 139. 138.
Number of Days Payables 67 1 96 07 03
Working Capital Turnover 1.46 1.22 1.35 1.66 2.08
Fixed Asset Turnover 1.13 1.13 1.81 1.93 2.51
Total Asset Turnover 0.47 0.41 0.55 0.56 0.77

PROFITABILITY RATIOS
Gross Profit Margin 0.60 0.58 0.62 0.59 0.63
Operating Profit Margin (using
EBITDA) 0.55 0.48 0.60 0.57 0.58
Pretax Margin 0.50 0.46 0.56 0.52 0.52
Net Profit Margin 0.44 0.38 0.49 0.47 0.44
Operating ROA 0.26 0.20 0.33 0.32 0.44
Return on Total Capital 0.29 0.22 0.36 0.36 0.51
Return on Equity 0.28 0.20 0.35 0.37 0.51

BUSINESS RISK
Variation of Operating Income 0.17 0.17 0.15 0.16 0.20
Variation of Net Income 0.17 0.16 0.15 0.16 0.21

SOLVENCY
Debt-to-Equity Ratio N/A N/A N/A N/A 0.10
Debt-to-Assets Ratio N/A N/A N/A N/A 0.07
Debt-to-Capital Ratio N/A N/A N/A N/A N/A
Financial Leverage 1.33 1.31 1.28 1.40 1.51
COVERAGE RATIOS
33.5 13.9 25.5 34.2 22.5
Interest Coverage 0 2 9 1 6
Fixed Charge Coverage N/A N/A N/A N/A N/A

VALUATION RATIOS
Price / Earnings 6.29 6.18 8.55 9.07 9.59
11.2
Price / Cash Flows 5.47 5.69 7.86 9 9.08
Price / Sale 2.77 2.37 4.19 4.31 4.24
Price / Book Value 1.63 1.25 2.66 2.90 4.26
Market Price on Balance sheet 215. 145. 364. 334.
date 9 9 8 317 8

PER SHARE QUANTITIES

34.3 23.5 42.6 34.9 34.9
Basic EPS 4 9 8 5 0
34.3 23.5 42.6 34.9 34.9
Diluted EPS 4 9 8 5 0
39.4 25.6 46.4 28.0 36.8
Cash Flow per Share 6 2 4 8 5
42.9 32.1 52.5 41.7 54.7
EBITDA per Share 2 8 0 3 3
Dividends per Share (as per 18.0 21.3 15.2 13.3
formula) 3 7 3 7.57 6
Actual Dividend Per Share 17.5 10.0 16.0 15.0
Announced 0 0 0 0 7.50
DIVIDEND RELATED QUANTITIES
Dividend Payout Ratio 0.53 0.91 0.36 0.22 0.38
Retention Rate (b) 0.47 0.09 0.64 0.78 0.62
Sustainable Growth Rate (g) 0.13 0.02 0.22 0.29 0.32

Du Pont 2010 2009 2008 2007 2006

Analysis
ROE 0.28 0.20 0.35 0.37 0.5
1

Leverage 1.3 1.3 1.2 1.4 1.5

3 1 8 0 1
ROA 0.2 0.1 0.2 0.2 0.3
1 6 7 7 4

Net Profit 0.4 0.3 0.4 0.4 0.4

Margin 4 8 9 7 4
Total 0.4 0.4 0.5 0.5 0.7
Assets 7 1 5 6 7
Turnover
 Tax 0.8 0.8 0.8 0.9 0.8
Burden 8 4 8 2 5
Inter 0.7 0.7 0.7 0.7 0.6
est Burden 6 9 0 5 9
EBIT 2.1 2.4 1.9 2.1 2.0
Margin 3 6 5 7 6

Altman Z-Scores

Ratio Weight 2010 2009 2008 2007 2006

WC/TA x 1.2 0.26 0.23 0.33 0.28 0.23
RE/TA x 1.4 0.89 0.89 0.92 0.95 0.75
EBIT/TA x 3.3 0.74 0.57 0.91 0.92 1.16
MVE/BVD x 0.6 4.38 3.37 9.20 9.74 8.30
Sales/TA x 0.999 0.44 0.40 0.49 0.53 0.64
Total 6.71 5.46 11.85 12.43 11.07
Prob. Of Failure Unlikely Unlikely Unlikely Unlikely Unlikely

The FCF
Calculation values
are in ('000)
FCF Calculations 2010 2009 2008 2007 2006
NOPAT 4,817,984 3,560,191 4,943,953 3,991,414 4,347,215
Depreciation/Ammortiz 1,599,598 1,216,077 1,450,735 1,176,804 1,022,338
ation
Changes in working 1,927 (2,338) 3,063 1,844 (1,219)
Capital
Capital Expenditure 3,642,949 6,149,411 3,176,318 2,319,288 1,922,567
FCF 2,772,706 (1,370,804 3,215,307 2,847,085 3,448,205
)

MVA Calculations
Market Price Per Share 216 146 365 317 335
Number of Shares 236,545,90 236,545,90 197,121,60 197,121,60 197,121,60
0 0 0 0 0
Market Value of Equity 51,070,259 34,512,046 71,917,844 62,487,547 65,996,311
,810 ,810 ,544 ,200 ,680
Book Value of Equity 31,399,342 27,521,281 26,996,573 21,546,509 15,506,938
MVA 51,038,860 34,484,525 71,890,847 62,466,000 65,980,804
,468 ,529 ,971 ,691 ,742
EVA Calculations
EBIT 9,529,241 7,140,376 9,965,638 7,738,297 8,505,606
Tax Rate 0.4944 0.5014 0.5039 0.4842 0.4889
NOPAT 4,817,984 3,560,191 4,943,953 3,991,414 4,347,215
Total Operating Capital 26,422,194 22,387,064 19,913,762 14,951,701 11,121,476
WACC 13.82% 8.97% 30.18% 32.37% 28.91%
Capital Cost 3,652,574 2,009,152 6,010,466 4,839,866 3,215,219
EVA 1,165,410 1,551,040 (1,066,513 (848,452) 1,131,997
)

CAPM

2010 2009 2008 2007 2006 2005 2004

Risk Free Rate 12.440 11.47 11.78 9.160% 8.791 8.448% 2.698%
% 0% 4% %
Beta 0.47 0.06 1.12 1.11 1.19 0.99 1.16
Market Return 25.213 18.47 18.78 37.871% 34.08 41.123% 53.798%
% 0% 4% 4%
Risk Premium 12.773 7.000 7.000 28.711% 25.29 32.675% 51.100%
% % % 3%
CAPM 18.402 11.90 19.60 40.970% 38.98 40.753% 62.219%
% 0% 6% 9%

Year 2010

2010 Book Value Weight Cost Weighted Cost

Paid-up Capital 2,365,459
Reserves 2,521,102
Unappropriated 26,447,172
Total Equity 31,333,733 75% 18.402% 13.82%
Debt 10,377,377 25% 0% 0.00%

Total 41,711,110 100% WACC 13.82%

Year 2009
 2009 Book Value Weight Cost Weighted Cost
Paid-up Capital 2,365,459
Reserves 1,899,193
Unappropriated 23,203,872
Total Equity 27,468,524 75% 11.90% 8.97%
Debt 8,952,656 25% 0% 0.00%

Total 36,421,180 100% WACC 8.97%

Year 2008

2008 Book Value Weight Cost Weighted Cost

Paid-up Capital 1,971,216
Reserves 1,535,043
Unappropriated 22,757,907
Total Equity 26,264,166 77% 38.99% 30.18%
Debt 7,663,519 23% 0.00% 0.00%

Total 33,927,685 100% WACC 30.18%

Year 2007

2007 Book Value Weight Cost Weighted

Cost
Paid-up Capital 1,971,216
Reserves 910,198
Unappropriated 18,611,567
Total Equity 21,492,981 79% 40.97% 32.27%
Debt 5,796,154 21% 0% 0.00%

Total 27,289,135 100% WACC 32.27%

Year 2006

2006 Book Value Weight Cost Weighted Cost

Paid-up Capital 1,971,216
Reserves 527,987
Unappropriated 12,971,716
Total Equity 15,470,919 64% 38.99% 24.89%
Debt 8,760,717 36% 11.11% 4.02%

Total 24,231,636 100% WACC 28.91%