| PAKISTAN STATE OIL COMPANY LIMITED |
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| (Annual
Report 1996-97) |
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| CONTENTS |
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| Notice of the Meeting |
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| PSO at a Glance |
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| Managing Director's Review |
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| Auditors' Report |
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| Balance Sheet |
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| Profit and Loss Account |
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| Statement
of Changes in Financial |
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| Position (Cash Flow Statement) |
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| Notes to the Accounts |
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| Statement
Pursuant to Section 237 |
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| of the Companies Ordinance, 1984 |
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| Pattern of Holding of the Shares |
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| Accounts of Subsidiary Companies |
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| Managing
Director |
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| M.M. Farid |
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| Secretary |
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| A.R. Mithani |
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| Auditors |
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| Sidat
Hyder Qamar Maqbool & Co. |
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| Taseer
Hadi Khalid & Co. |
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| Solicitors |
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| Orr
Dignam & Co. |
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| Bankers |
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| ABN
Amro Bank |
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| Allied
Bank of Pakistan Limited |
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| American
Express Bank Limited |
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| ANZ
Grindlays Bank |
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| Bank
of America |
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| Banque
lndosuez |
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| Citibank
N.A. |
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| Deutsche
Bank |
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| Emirates
Bank International Limited |
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| Habib
Bank A. G. Zurich |
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| Habib
Bank Limited |
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| Muslim
Commercial Bank Limited |
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| Mashreq Bank |
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| National
Bank of Pakistan |
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| Standard
Chartered Bank |
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| Societe
Generale |
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| Union
Bank Limited |
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| United
Bank Limited |
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| Registered
Office: |
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| P.S.O.
House, Khayaban-e-Iqbal, Clifton, Karachi. |
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| BOARD
OF MANAGEMENT (01L) |
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| CHAIRMAN |
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| CHAUDHRY
NISAR ALl KHAN |
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| Minister
for Petroleum & Natural Resources |
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| Government
of Pakistan |
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| MEMBERS |
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| MR.
G. A. SABRI |
|
MR. ABDUS SATTAR |
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| Director
General (Oil) |
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Financial Advisor |
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| Ministry
of Petroleum & Natural |
Ministry of Petroleum
& Natural |
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| Resources,
Government of Pakistan |
Resources, Government of
Pakistan |
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|
| DR.
SHAHID K. HAK |
|
MR. ASADULLAH KHAWAJA |
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| Managing
Director |
|
Managing Director |
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| Pak
Arab Refinery Limited |
|
Investment Corporation of
Pakistan |
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| MIAN
MOHAMMAD FARID |
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| Managing
Director |
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| Pakistan
State Oil Company Limited |
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| NOTICE
OF THE MEETING |
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| Notice
is hereby given that the 21st Annual General Meeting of the Company will be
held at Beach |
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| Luxury
Hotel, Moulvi Tamizuddin Khan Road, Karachi on Wednesday, 31st December,
1997, at |
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| 11:00
A.M. under the Chairmanship of the Managing Director to transact the
following business: |
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| 1. Ordinary Business |
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| 1.
To confirm the minutes of the 20th Annual General Meeting held on 29th
December 1996. |
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| 2.
To receive and adopt the audited accounts for the year ended 30th June, 1997
together |
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| with
Auditors' report and the Managing Director's review thereon. |
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| 3.
To lay information before the members of the Company of the appointment of
Messrs Sidat |
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| Hyder
Qamar Maqbool & Company and Taseer Hadi Khalid & Company, Chartered
Accountants, |
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| as
Auditors of the Company, for the year ending 30th June, 1998. |
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| 4.
To declare a final dividend of 50°/0 in addition to the interim dividend of
30% already paid, |
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| thereby
making a total dividend of 80% for the year ended 30th June, 1997. |
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| II.
Special Business |
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| 5.
To consider and, if thought fit, pass the following Ordinary Resolution for
the capitalisation |
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| of
profits amounting to Rs. 165,431,038/-. |
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| Resolved
that |
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| (i)
"a sum of Rs. 165,431,038/- from the Company's profit in the year ended
30th June, |
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| 1997
be capitalised for issuing 16,543,104 fully paid-up Ordinary Shares of
Rs.10/- |
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| each
as Bonus Shares to be allotted to those members whose names appear in the |
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| Register
of Members on Tuesday, 23rd December, 1997, in the proportion of two shares |
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| for
every ten shares held and that the Bonus Shares when issued shall rank pari
passu |
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| in
all respects with the existing Ordinary Shares of the Company except that the
said |
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| Bonus
Shares shall not be eligible for the dividend declared for the year ended
30th |
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| June, 1997. |
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| (ii)
the members entitled to fractions of shares as a result of their holdings
either being |
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| less
or in excess of an exact multiple of proportion (referred in 5(i) above)
shall be |
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| given
the sale proceeds of their fractional entitlements for which purpose the
fractions |
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| shall
be consolidated into whole shares and sold on the Karachi Stock Exchange; and |
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| (iii)
for the purpose of giving effect to the above, the Managing Director be and
is hereby |
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| authorised
to take all necessary actions and to settle any question or difficulty that
may |
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| arise
in regard to the distribution of the said Bonus Shares or in the payment of
the |
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| sale
proceeds of the fractional entitlements (referred above), as he deems
fit." |
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| AND |
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| 6.
To transact any other Ordinary Business of the Company with the permission of
the Chairman. |
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| NOTES: |
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| 1.
A member entitled to attend and vote at this meeting may appoint any other
member as his/ |
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| her
proxy to attend and vote. A proxy form is enclosed. |
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| 2.
The Share Transfer Books of the Company will remain closed from Wednesday,
24th |
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| December,
1997 to Wednesday, 31st December, 1997 (both days inclusive). Transfers |
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| received
in order at the Registered Office of the Company upto the close of business
on |
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| Tuesday,
23rd December, 1997 will be considered in time to be eligible for payment of
Final |
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| Dividend
and issue of Bonus Shares to the transferees. |
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|
| 3.
The instrument appointing a proxy and the power of attorney or other
authority under which |
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| it
is signed or a notarially attested copy of the power of attorney must be
deposited at the |
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| registered
office of the Company at least 48 hours before the time of the meeting. |
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| STATEMENT
UNDER SECTION 160 (1) (B) |
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| OF
THE COMPANIES ORDINANCE, 1984 |
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| The
Reserves of the Company as on 30th June, 1997 represent accretion on its
existing |
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| share
capital, it has been thought expedient to capitalise a part of the said
reserves by way |
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| of
issue of Bonus Shares to the members. The Company has no direct interest in
the event |
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| the
capital is increased as proposed. Upon issuance of the Bonus Shares, the
paid-up capital |
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| of
the Company shall stand increased to Rs. 992,586,230/-. |
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| PSO
AT A GLANCE |
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|
1997 |
1996 |
1995 |
1994 |
1993 |
1992 |
1991 |
1990 |
1989 |
1998 |
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| Earning and |
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| Dividend |
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|
Rs. Per Share of Rs. 10 |
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| Earning |
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24.73 |
23.54 |
21.27 |
18.49 |
13.63 |
12.19 |
10.20 |
9.64 |
10.57 |
11.42 |
|
| Break-up
value |
66.89 |
65.21 |
62.35 |
59.91 |
55.70 |
56.49 |
56.41 |
55.78 |
55.16 |
53.45 |
|
| Dividend |
|
8.00 |
6.00 |
5.00 |
5.00 |
5.00 |
4.75 |
4.50 |
4.00 |
4.00 |
4.00 |
|
| Bonus |
|
2:10 |
3:10 |
3:10 |
3:10 |
2:10 |
2:10 |
3:20 |
1:10 |
1:10 |
1:10 |
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|
| Statistical
Summary |
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|
Rs. in Millions |
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|
| Shareholders'equity |
5,533.20 |
4,149.20 |
3,051.80 |
2,255.40 |
1,747.70 |
1,476.90 |
1,281}.5 |
1,153.00 |
1,036.50 |
913.00 |
|
| New
capital exp. |
820.50 |
920.70 |
461.90 |
321.80 |
364.90 |
207.40 |
138.90 |
216.40 |
374.30 |
424.70 |
|
| Profit
before tax |
3,745.80 |
2,563.20 |
1,681.10 |
1,175.60 |
771.50 |
526.90 |
450.70 |
367.20 |
330.70 |
344.00 |
|
| Profit
after tax |
2,045.80 |
1,498.20 |
1,041.1 |
696.00 |
427.60 |
318.70 |
231.80 |
199.20 |
198.70 |
195.10 |
|
| Dividends |
|
661.70 |
381.80 |
244.70 |
188.20 |
156.90 |
124.20 |
102.30 |
82.70 |
75.20 |
68.30 |
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|
| Financial
Ratio |
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|
|
Ratios |
|
| Current
assets: |
|
| Current
liabilities |
1.1:1 |
1.1:1 |
1.1:1 |
1.1:1 |
1.1:1 |
1.2:1 |
1.1:1 |
1.4:1 |
1.4:1 |
1.3:1 |
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|
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| Long term debt: equity |
5:95 |
5:95 |
7:93 |
8:92 |
12:88 |
17:83 |
24:76 |
28:72 |
33:67 |
29:71 |
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|
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| Total
Debt: equity |
28:72 |
29:71 |
29:71 |
23:77 |
33:67 |
24:76 |
51:49 |
49:51 |
51:49 |
49:51 |
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| MANAGING
DIRECTOR'S REVIEW |
|
| I
welcome you all to the 21 st Annual General
Meeting |
SALES STATISTICS |
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| of
your Company and present the Annual Report |
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| and
Financial Statements for the year ended 30th |
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| June 1997. |
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| Your
Company has set itself very high standards |
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| of
performance and despite heavy odds has managed |
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| to
maintain these standards. The Company has |
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| maintained
the tempo of achievements. We have |
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| not
only exceeded the sales volumes but have also |
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| surpassed
our profitability after tax as compared to |
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| last
year. Your accounts therefore, show Rs. 3,745.8 |
|
| Million
Profit Before Tax and Rs. 2,045:8 Million |
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| Profit
After Tax. This gives an earning per share |
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| of
Rs. 24.73. This achievement has been made |
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| possible
with the dedication, cooperation, hardwork |
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| and
devotion of the staff members, dealers, distribu- |
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| tors
and our valued customers. |
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|
| I
am pleased to inform you that we have shifted |
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| all
our offices to PSO House which has further |
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| improved
the working conditions and efficiency of |
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| the
Company. To mark this achievement the cover |
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| of
your Annual Report portrays photograph of this |
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| elegant
building. |
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| The
Paid Up Capital of the Company was increased |
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| by
30% last year and I am pleased to inform you |
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| that
return to the shareholders for the year under |
|
| review
has been maintained on increased capital |
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| by
giving 80°/0 Cash Dividend and 20% Bonus Shares. |
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| The
capitalization by issue of 20% Bonus Shares |
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| will
further strengthen your company and will enable |
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| to
meet the fund requirements for the development |
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| of
on-going projects. As highlighted in Note 20.1, |
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| an
amount of Rs. 4.13 Billion is receivable from |
|
| WAPDA
and Rs. 3.91 Billion is receivable from |
|
| KESC.
All efforts are being made to recover this |
|
| amount. |
|
|
| Now,
a word about your Company's on-going and |
|
| completed
projects:- |
|
|
| An
82 Km long underground Pipeline from |
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| Zulfiqarabad
Oil Terminal (ZOT) to HUBCO was |
|
| successfully
commissioned during the year which has |
|
| initial
capacity to supply 2.5 million metric tonnes/ |
|
| annum.
To feed this Pipeline, additional Furnace |
|
| Oil
Storage Tankage of 1,60,000 metric tonnes has |
|
| also
been developed and commissioned. PSO's Equity |
|
| in
this project is 49%. |
|
|
|
|
|
| AES
Power Complex at Lalpir is nearing completion |
|
| and
PSO will supply the fuel requirement of one |
|
| million
metric tonnes/annum to this project through |
|
| pipeline
which has already been laid and completed |
|
| from
our Lalpir Depot. Additional 24,000 tonnes |
|
| Furnace
Oil storage is being constructed at our Lalpir |
|
| Depot
which will be completed by June 1998. |
|
|
| 58,300
tonnes Machike Depot has been completed |
|
| during
the year, linked with PARCO System and |
|
| has
been commissioned. |
|
|
| As
reported last year, Agreement with M/s. Bakri |
|
| Gas
Inc., Saudi Arabia was signed to develop an |
|
| LPG
Storage Terminal at Port Qasim. This project |
|
| is
environment friendly and the fuel is also |
|
| economical
as compared to other petroleum prod- |
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| ucts.
Initially, it was decided to have 20% Equity |
|
| in
this project which now has been increased to |
|
| 30%.
A Feasibility Study is under preparation and |
|
| speedy
progress on this project is expected during |
|
| the
year 1997-98. |
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|
|
| At
present PARCO is having 864 KM long under- |
|
| ground
Pipeline from Keamari to Mahmood Kot |
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| for
transporting HSD and SKO. More than 75% |
|
| of
the product transported through this Pipeline is |
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| on
behalf of PSO. Another parallel pipeline is to |
|
| be
laid and the Feasibility Study is under progress |
|
| which
is being carried out by M/s. Bechtel Inter- |
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| national.
This Pipeline is expected to be, completed |
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| before
the end of year 2000 with an initial capacity |
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| of
7 million tonnes/annum. There are six partners |
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| in
this project, PSO having the highest equity |
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| participation
of 30%. Previously equity participation |
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| by
PSO was agreed for 10°/0 only which after |
|
| negotiations
with the other partners has now been |
|
| revised
upward to 30°/0. |
|
|
| Various
new Private Power Projects have come on |
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| line
and Fuel Supply Agreements have been signed |
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| with
these new power projects. Fuel Oil will be |
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| supplied
to these power projects by rail and con- |
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| struction
work has started at Pipri Marshalling Yard |
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| from
where Fuel Oil will be despatched through rail |
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| up-north
which shall greatly reduce the heavy traffic |
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| congestion
in the city of Karachi as the present |
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| road
despatches are being made Ex-Keamari |
|
| Installations. |
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|
|
|
| It
will be pertinent to emphasize that the above |
|
| significant
achievements have been possible because |
|
| of
your Company's constant endeavours to improve |
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| the
quality of its Human Resources through training |
|
| and
various other measures. |
|
|
| My
sincere thanks to the Staff and Workers of |
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| Pakistan
State Oil who have contributed to the |
|
| profitability
and growth of the Company. |
|
|
|
| Acknowledgments
are particularly due to the Chair- |
|
|
| man,
Board of Management (Oil) for his active |
|
| participation
and guidance in the affairs of the |
|
|
|
|
| Company
and to the members of the Board for |
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| their
invaluable contributions. Acknowledgments |
|
| are also in
order for continued support of the Ministry |
|
| of
Petroleum and Natural Resources. |
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| Lastly,
I wish to record my sincere appreciation for |
|
|
| the
support and confidence of our esteemed share- |
|
| holders. |
|
|
| PERFORMANCE
OF PSO'S SHARE OF RS 10/- |
|
| AT
KARACHI STOCK EXCHANGE |
|
|
| YEAR |
HIGHEST |
LOWEST |
30TH JUNE |
|
|
| 1997 |
445 |
261 |
395 |
|
| 1996 |
424 |
258 |
345 |
|
| 1995 |
470 |
250 |
355 |
|
| 1994 |
450 |
315 |
144 |
|
| 1993 |
392 |
132 |
184 |
|
|
|
MIAN MOHAMMAD FAIRD |
|
| 9th
December 1997 |
Managing Director |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| We
have audited the annexed balance sheet of PAKISTAN STATE OIL COMPANY LIMITED
as at |
|
| 30
June 1997 and the related profit and loss account and statement of changes in
financial position, 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 and, after due verification thereof, 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, have 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 and statement of changes in
financial position, |
|
| together
with the notes forming part thereof, 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 30 June 1997 and of the profit
and changes |
|
| in
financial position for the year then ended; and |
|
|
| d)
in our opinion, zakat deductible at source under the Zakat and Ushr
Ordinance, 1980, was |
|
| deducted
by the Company and deposited in the Central Zakat Fund established under
Section |
|
| 7
of that Ordinance. |
|
|
| Taseer
Hadi Khalid & Co. |
|
Sidat Hyder Qamar Maqbool
& Co. |
|
| Chartered
Accountants |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 30 JUNE 1997 |
|
|
|
|
|
Notes |
1997 |
1996 |
|
|
Rupees |
Rupees |
|
| CAPITAL
AND RESERVES |
|
| Authorised
capital |
|
| 100,000,000
(1996: 100,000,000) ordinary |
|
| shares
of Rs. 10/- each |
|
1,000,000 |
1,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
3 |
827,156 |
636,274 |
|
| Reserves |
|
4 |
4,704,772 |
3,511,223 |
|
| Unappropriated
profit |
|
|
1,270 |
1,665 |
|
|
|
---------- |
---------- |
|
|
|
5,533,198 |
4,149,162 |
|
| LONG-TERM
LOANS |
|
5 |
54,753 |
102,504 |
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
|
|
| TO
FINANCE LEASE |
|
6 |
1,274 |
13,152 |
|
| LONG-TERM
DEPOSITS |
|
7 |
255,278 |
239,821 |
|
| DEFERRED
LIABILITY FOR STAFF GRATUITY |
|
8 |
441,372 |
378,983 |
|
| CURRENT
LIABILITIES |
|
|
---------- |
---------- |
|
| Bank
finance under mark-up arrangements |
|
9 |
1,879,675 |
1,448,700 |
|
| Current
portion of long-term loans and |
|
|
|
| liabilities
under finance lease |
|
5 & 6 |
57,564 |
87,255 |
|
| Creditors,
accrued expenses and other liabilities |
10 |
14,998,087 |
7,941,684 |
|
| Taxation
- net |
|
|
1,055,268 |
634,130 |
|
| Dividends |
|
11 |
447,717 |
233,662 |
|
|
|
---------- |
---------- |
|
|
|
18,438,311 |
10,345,431 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
12 |
---------- |
---------- |
|
|
24,724,186 |
15,229,053 |
|
|
========== |
========== |
|
| FIXED
ASSETS - TANGIBLE |
|
| Operating
fixed assets |
|
13 |
1,863,495 |
1,163,068 |
|
| Assets
subject to finance lease |
|
14 |
24,667 |
39,345 |
|
| Capital
work-in-progress |
|
15 |
1,057,715 |
1,265,198 |
|
| Inventory
held for capital expenditure |
|
|
391,690 |
354,302 |
|
|
|
---------- |
---------- |
|
|
|
3,337,567 |
2,821,913 |
|
| LONG-TERM
INVESTMENTS |
|
16 |
483,660 |
577,526 |
|
|
|
| LONG-TERM
DEPOSITS, LOANS, ADVANCES |
|
| AND
PREPAYMENTS |
|
17 |
125,052 |
109,902 |
|
|
|
|
| CURRENT
ASSETS |
|
|
---------- |
---------- |
|
| Stores
and spares |
|
18 |
108,425 |
70,945 |
|
| Stock-in-trade |
|
19 |
5,017,672 |
3,519,104 |
|
| Trade debts |
|
20 |
10,853,332 |
3,076,705 |
|
| Loans,
advances, deposits, prepayments |
|
|
|
|
and other receivables |
21 |
3,595,020 |
3,729,599 |
|
| Cash
and bank balances |
|
22 |
1,203,458 |
1,323,359 |
|
|
|
---------- |
---------- |
|
|
|
20,777,907 |
11,719,712 |
|
| NET
ASSETS IN BANGLADESH |
|
23 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
24,724,186 |
15,229,053 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
| PROFIT
& LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE 1997 |
|
|
|
|
Notes |
Rs. 000 |
|
|
| REVENUES |
|
|
1997 |
1996 |
|
|
|
|
|
| Sales |
|
109,508,018 |
80,562,712 |
|
| Less:
Government levies |
|
24 |
30,056,339 |
27,630,386 |
|
|
|
---------- |
---------- |
|
|
|
79,451,679 |
52,932,326 |
|
| Cost
of products sold |
|
25 |
73,906,214 |
48,854,513 |
|
|
|
---------- |
---------- |
|
|
|
5,545,465 |
4,077,813 |
|
| Other income |
|
26 |
172,788 |
145,488 |
|
|
|
---------- |
---------- |
|
|
|
5,718,253 |
4,223,301 |
|
| EXPENDITURE
AND CHARGES |
|
|
---------- |
---------- |
|
| Transportation |
|
27 |
140,613 |
178,305 |
|
| Administrative
and marketing |
|
28 |
1,436,321 |
1,208,792 |
|
| Financial |
|
29 |
198,413 |
138,128 |
|
| Workers'
profit participation fund |
|
|
197,145 |
134,904 |
|
|
|
---------- |
---------- |
|
|
|
1,972,492 |
1,660,129 |
|
|
|
---------- |
---------- |
|
| PROFIT
BEFORE TAXATION |
|
|
3,745,761 |
2,563,172 |
|
| PROVISION
FOR TAXATION |
|
30 |
1,700,000 |
1,065,000 |
|
|
|
|
---------- |
---------- |
|
| PROFIT
AFTER TAXATION |
|
2,045,761 |
1,498,172 |
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
|
1,665 |
1,227 |
|
|
|
---------- |
---------- |
|
| PROFIT
AVAILABLE FOR APPROPRIATION |
|
2,047,426 |
1,499,399 |
|
| APPROPRIATIONS: |
|
---------- |
---------- |
|
