pol - final report afs

8/6/2019 POL - Final Report AFS

1/24


2/24

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


3/24

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. Companys core values and

products have been listed down. Companys 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.


4/24

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 Companys 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.


5/24

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 Companys 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 Companys 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.


6/24

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 andsulphurous 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 -44C to 0C, 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 peoples 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.


7/24

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 ofShareholders

Number ofShareholders

Number ofShares Held

Percentage

Investment Corporation ofPakistan 1 97 0

National Bank of PakistanTrustee 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 8.29Investment 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.Pharaon

Non-Executive

Shuaib Anwar Malik Executive

Laith Ghaith Pharaon Non-Executive

Wael Ghaith Pharaon Non-Executive

Arif Kemal Non-Executive

Abdus Sattar Non-Executive Audit


8/24

MohammadRazziuddin

Non-Executive

Iqbal A. Khwaja Alternate / Non-Executive Audit

Babar Bashir Nawaz Alternate / Non-Executive Audit

Muhammad AbdullahYusuf

Alternate / Non-Executive

Board of Directors Mapping for Last 4 Years

Director 2007 2008 2009 2010Dr. Ghaith R.

PharaonDr. Ghaith R.




Pharaon

Laith GhaithPharaon

Laith GhaithPharaon

Laith GhaithPharaon

Laith GhaithPharaon

Laith GhaithPharaon

Wael GhaithPharaon

Wael GhaithPharaon

Wael GhaithPharaon

Wael GhaithPharaon

Wael GhaithPharaon

Bashir Ahmad Bashir Ahmad Bashir Ahmad Arif Kemal Arif Kemal

Abdus Sattar Abdus Sattar Abdus Sattar Abdus Sattar Abdus Sattar

MuhammadNajam Ali

MuhammadNajam Ali

MuhammadNajam Ali

MuhammadNajam Ali

MohammadRazziuddin

Shuaib AnwarMalik

Shuaib AnwarMalik

Shuaib AnwarMalik

ShuaibAnwar Malik

Shuaib AnwarMalik

Sajid Nawaz Sajid Nawaz Sajid Nawaz Sajid Nawaz Babar Bashir

Nawaz

Babar Bashir

Nawaz

Babar Bashir

Nawaz

Babar Bashir

Nawaz

Babar Bashir

NawazIqbal A.Khwaja

- - Iqbal A.Khwaja

Iqbal A.Khwaja

MuhammadAbdullahYusuf

- - MuhammadAbdullahYusuf

MuhammadAbdullahYusuf


9/24

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 GMJamil 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


10/24

SIGNIFICANT ACCOUNTING POLICIES

Provision for decommissioning cost

Provision for decommissioning cost is recognized in full for development wells and productionfacilities. The amount recognized is the present value of the estimated cost to abandon a well andremove production facilities. A corresponding intangible asset of an amount equivalent to theprovision is also created and is amortized on unit of production basis over the total proved developedreserves 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 preciserequirements that will have to be met when the abandonment and removal event actually occurs areuncertain. Abandonment and asset removal technologies and costs are constantly changing, as arepolitical, environmental, safety and public expectations. Consequently, the timing and amount offuture cash flows are subject to significant uncertainty.

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

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

The decommissioning cost has been discounted at a real discount rate of 5% p.a. (2009: 5%). Theincrease 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 asincurred. Exploratory drilling costs i.e. costs directly associated with drilling of an exploratory well areinitially capitalized pending determination of proven reserves. These costs are either charged toincome if no proved reserves are found or transferred to development costs if proved reserves arefound.All capitalized costs are subject to review for impairment at least once a year and any impairmentdetermined 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 capitalizedwithin development costs. Capitalized development costs are amortized on a unit of production basisover the total proved developed reserves of the field or @ 5% per annum where the life of the field ismore than 20 years.2

1Note 4.7,POL Annual Report 20102 Note 4.13,POL Annual Report 2010


11/24

MANAGEMENT ANALYSIS & DISCUSSION

Chairmans 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 Chairmans 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.

Chairmans 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


12/24

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 YOperations 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 YMaterial Risks being faced by the

company Y Y Y Y

Business Process Reengineering Y Y Y Y

Corporate Social Responsibility Y Y Y YERP 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


13/24

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 otherproducts 1% 0% 0% 0% 0%Closing Stock of crude oil and otherproducts -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 anddecommissioning 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 associatedcompanies 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)


14/24


15/24

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%

Unappropriated profit

144

%

160

%

133

%

128

% 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%


16/24

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%

94%105

% 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



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%


68% 68% 73% 58% 55%

227%

251%

202%

189%

156%


17/24

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 TotalCurrent Assets)

CURRENT ASSETS 2010 2009 2008 2007 2006



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%


100%

100%

100%

100%

100%

Common Size BalanceSheets

(Liabilities with TotalLiabilities)

2010 2009 2008 2007 2006NON CURRENT LIABILITIES

Long term loans and murabaha finance 0% 0% 0% 0% 18%

Long term deposits 6% 6% 8%10% 6%

Deferred liabilities

62%

62%

53%

56% 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%


18/24


19/24

RATIO ANALYSIS

2010 2009 2008 2007 2006

LIQUIDITY RATIOSCurrent 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

Defensive Interval

554.34

370.58

740.34

474.08

534.26

Cash Conversion Cycle

-78.9

8

-38.8

0

-94.0

9

-71.1

1

-90.9

5

ACTIVITY RATIOS

Inventory Turnover45.7

848.8

854.2

251.3

769.5

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

DSO

43.72

45.54

44.14

60.86

41.84

Payables Turnover 2.79 3.98 2.52 2.62 2.64

Number of Days Payables

130.67

91.81

144.96

139.07

138.03

Working Capital Turnover 1.46 1.22 1.35 1.66 2.08

Fixed Asset Turnover 1.13 1.13 1.81 1.93 2.51Total 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 0.63Operating 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/AFinancial Leverage 1.33 1.31 1.28 1.40 1.51


20/24

COVERAGE RATIOS

Interest Coverage

33.50

13.92

25.59

34.21

22.56

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

Price / Cash Flows 5.47 5.69 7.8611.2

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 sheetdate

215.9

145.9

364.8 317

334.8

PER SHARE QUANTITIES

Basic EPS

34.34

23.59

42.68

34.95

34.90

Diluted EPS

34.34

23.59

42.68

34.95

34.90

Cash Flow per Share

39.46

25.62

46.44

28.08

36.85

EBITDA per Share

42.92

32.18

52.50

41.73

54.73

Dividends per Share (as performula)

18.03

21.37

15.23 7.57

13.36

Actual Dividend Per ShareAnnounced

17.50

10.00

16.00

15.00 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

Analysis

2010 2009 2008 2007 2006

ROE 0.28 0.20 0.35 0.37 0.51

Leverage 1.33

1.31

1.28

1.40

1.51

ROA 0.21

0.16

0.27

0.27

0.34

Net ProfitMargin

0.44

0.38

0.49

0.47

0.44

Total

AssetsTurnover

0.4

7

0.4

1

0.5

5

0.5

6

0.7

7


21/24

TaxBurden

0.88

0.84

0.88

0.92

0.85

Interest Burden

0.76

0.79

0.70

0.75

0.69

EBITMargin 2.13 2.46 1.95 2.17 2.06

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 11.0

Prob. Of Failure Unlikely Unlikely Unlikely Unlikely Unlikely

The FCFCalculation valuesare 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/Ammortization

1,599,598 1,216,077 1,450,735 1,176,804 1,022,338

Changes in workingCapital 1,927 (2,338) 3,063 1,844 (1,219)

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 236,545,900

236,545,900

197,121,600

197,121,600

197,121,600

Market Value of Equity 51,070,259,810

34,512,046,810

71,917,844,544

62,487,547,200

65,996,311,680

Book Value of Equity 31,399,342 27,521,281 26,996,573 21,546,509 15,506,938


22/24

MVA 51,038,860,468

34,484,525,529

71,890,847,971

62,466,000,691

65,980,804,742

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%

11.470%

11.784%

9.160% 8.791%

8.448% 2.698%

Beta 0.47 0.06 1.12 1.11 1.19 0.99 1.16

Market Return 25.213

%

18.47

0%

18.78

4%

37.871% 34.08

4%

41.123% 53.798%

Risk Premium 12.773%

7.000%

7.000%

28.711% 25.293%

32.675% 51.100%

CAPM 18.402%

11.900%

19.606%

40.970% 38.989%

40.753% 62.219%

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


23/24



Reserves 1,899,193


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



Reserves 1,535,043


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 WeightedCost


Reserves 910,198


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%


24/24

Year 2006



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%

pol - final report afs

Documents