Analysis of Pakistan Petroleum Limited [PDF]

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Analysis of Financial Statements

PAKISTAN PETROLEUM LIMITED INTRODUCTION Pakistan Petroleum Ltd is Pakistan's Premier E&P company, the oldest and largest Exploration and Production Company in the country was incorporated on 5th June 1950 subsequent to the promulgation of the Pakistan Petroleum Production Rules, 1949 with the main objective of conducting exploration, development and production of Pakistan's oil and natural gas resources. PPL inherited all the assets and liabilities of the Burmah Oil Company (Pakistan Concessions) Limited and commenced business on 1st July 1952. PPL and its ex-parent Burmah Oil Company have been active in the subcontinent since the early part of the 20th century. A total of 239 wells including 65 exploratory and 174 appraisal / development wells have so far been drilled which resulted in the discovery of about 19.90 Tcf gas (both operated and non-operated leases). A gas condensate/oil field at Adhi with original recoverable reserves of 1,253 MT liquefied Petroleum Gas and 39.4 MMbbl of oil/condensate was also discovered by PPL. The Company also operates a Baryte mine in Balochistan province. It produces oil well drilling grade Baryte powder from the mine, which has proven reserves of 1.25 million tones. For the year 2004-05, PPL's share of average production from its operated and non-operated fields was 953 MMcfd of gas, 1,372 bpd of oil/NGL and 26 tones per day of LPG. Production of gas from these fields meets about 25.1% of the country's indigenous production. The gas, LPG and NGL production from PPL operated and nonoperated fields for the year 2004-05 in terms of oil equivalent, was about 171,205 barrels of crude oil per day. The Company has a staff of about 2520 as at 31 May, 2006 employees with about 431 qualified technical staff in the fields of engineering, computer and earth sciences. PPL has well established IT department and all staff in the Head Office has access to computers and are interconnected through Local Area Network (LAN). The Wide Area Network (WAN) has also been established connecting PPL's three major producing fields and Regional Office in Islamabad with the Head Office at Karachi. The Company has implemented SAP in 2004 integrating core business processes using Costing, Finance, Human Resources, Materails Managemnet, Plant maintenance and Project Systems modules. The Government of Pakistan (GoP) in September 1997 purchased the entire equity interest of Burmah Castrol PLC, formerly Burmah Oil Company, in the Company (comprising 21 million ordinary shares of Rs.10 each) representing 63.91 percent of the Share Capital thereby increasing its holding in the Company to 93.35 percent. Subsequent to June 2004, the GoP has disinvested a portion of its equity in the Company equivalent to 15% of the paid up share capital of (i.e. 102.873 million shares of Rs.10 each) through an Initial Public Offering (IPO). The GoP has made a policy decision to privatize PPL and IPO is a significant step towards this direction. -1-

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Analysis of Financial Statements A consortium led by Merrill Lynch International and KASB securities (Pvt) Limited have been appointed by the Privatization Commission (PC) as the Financial Advisor (FA) for the strategic sale of GoP's 51 % interest in the company. Five (5) parties were prequalified as potential bidders for the transaction. The Government of Pakistan continues to pursue the privatization process through sale of its majority interest in the Company to a strategic investor and remains committed to proceed with the transaction with a view to concluding the process at an early date.

PPL CAPITAL STRUCTURE The current shareholding structure of the Company is as follows:

S.No

Shareholders

(i)

Government of Pakistan

(ii)

International Finance Corporation

Percentage 78.40% 4.26%

(iii) Private shareholders

17.34% 100.0%

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Analysis of Financial Statements

SCHLUMBERGER LIMITED INTRODUCTION Schlumberger is the world’s leading oilfield services company supplying technology, information solutions and integrated project management that optimize reservoir performance for customers working in the oil and gas industry. The company employs more than 70,000 people of over 140 nationalities working in approximately 80 countries. Schlumberger supplies a wide range of products and services from seismic acquisition and processing; formation evaluation; well testing and directional drilling to well cementing and stimulation; artificial lift and well completions; and consulting, software, and information management. Schlumberger also provide similar products and services for the groundwater industry.

HISTORY Schlumberger Limited began life as the Société de Prospection Électrique (Electric Prospecting Company) founded in 1926 by Conrad and Marcel Schlumberger. Prior to founding their company, the brothers had worked conducting geophysical surveys in countries such as Romania, Canada, Serbia, South Africa, the Democratic Republic of the Congo, and the United States. The newly founded SPE (not to be confused with the Society of Petroleum Engineers) sold electrical-measurement mapping services, and quickly began expanding. The company recorded the first electrical resistivity well log in Merkwiller-Pechelbronn, France in 1927, and logged their first well in the US (in Kern County, California) in 1929. In 1934, the Schlumberger Well Surveying Corporation was founded. This was later to become Schlumberger Well Services (and later Schlumberger Wire line & Testing). 1940 saw the company move its headquarters to the US oil capital, Houston, Texas. The next few decades brought numerous breakthroughs in Schlumberger's logging technology offerings, including the Microlog tool, Laterolog system, and Microlaterolog tool; the latter designed to measure resistivity near the borehole. The Ridgefield, Connecticut Research Center (Schlumberger-Doll Research or SDR) was inaugurated in 1948. In 1956, the company known as Schlumberger Limited was officially set up in Curacao as a holding company for all Schlumberger businesses. The American testing and -3-

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Analysis of Financial Statements production company Johnston Testers was acquired this year as well. 1960 marked the formation of the well-known Dowell Schlumberger (50% Schlumberger, 50% Dow Chemical), which specialized in pumping services for the oil industry. Two years later, Schlumberger Limited became listed on the New York Stock Exchange. Schlumberger purchased 50% of Forex in 1964 and merged it with 50% of Languedocienne to create the Neptune Drilling Company. The first computerized reservoir analysis, SARABAND, was introduced in 1970. The remaining 50% of Forex was acquired the following year; Neptune was renamed Forex Neptune Drilling Company. In 1979, Fairchild Camera and Instrument (including Fairchild Semiconductor), became a subsidiary of Schlumberger Limited. The Schlumberger Cambridge Research Centre, designed by Michael Hopkins and Partners was opened in 1985.Continuing the trend of supporting high-technology solutions, Schlumberger quickly integrated e-mail into their business model, establishing the first international data links with e-mail in 1981. In 1983, Schlumberger opened their Cambridge Research Center in Cambridge, England. The SEDCO drilling company and half of Dowell of North America were acquired in 1984, resulting in the creation of another well-known Schlumberger trademark, the Anadrill drilling segment, a combination of Dowell and The Analysts' drilling segments. Forex Neptune was merged with SEDCO to create the Sedco Forex Drilling Company the following year, when Schlumberger purchased Merlin and 50% of GECO. Schlumberger's Information Network, or SINet, launched in 1985, is the world's second largest internal corporate network and the first commercial ARPANet-based intranet. In 1987, Schlumberger completed their purchases of Neptune (North America), Bosco and Cori (Italy), and Allmess (Germany). That same year, National Semiconductor acquired Fairchild Semiconductor from Schlumberger for $122 million, and the domain name www.slb.com was registered by the company. In 1991, Schlumberger acquired PRAKLA-SEISMOS, and pioneered the use of geosteering to plan the drill path in horizontal wells. Schlumberger acquired the software company GeoQuest Systems, Inc. in 1992. With the purchase came the conversion of SINet to TCP/IP and www capability. The remainder of the decade saw Schlumberger buy out the petroleum division, AEG meter, and ECLIPSE reservoir study team Intera Technologies Corp. A joint venture between Schlumberger and Cable & Wireless plc saw the creation of Omnes, which today handles all of Schlumberger's internal IT business. Oilphase and Camco International were also purchased. In 1999, Schlumberger and Smith International created a joint venture, M-I L.L.C., the world's largest drilling fluids (or mud) company. The company consists of 60% Smith International, and 40% Schlumberger. Since the joint venture was prohibited by a 1994 antitrust consent decree barring Smith from selling or combining their fluids business with certain other companies, including Schlumberger, the U.S. District Court in Washington, D.C. found Smith International Inc. and Schlumberger Ltd. guilty of criminal contempt and fined each company $750,000 and placed each company on five years probation. Both companies also agreed to pay a total of $13.1 million, representing

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Analysis of Financial Statements a full disgorgement of all of the joint venture's profits during the time the companies were in contempt. At the turn of the 21st century, the Geco-Prakla division was merged with Western Geophysical to create the seismic contracting company WesternGeco, of which Schlumberger held a 70% stake, the remaining 30% belonging to competitor Baker Hughes. Under new business policy, the company got rid of its famous brand names in the oilfield service industry viz, Anadrill, Dowell, GeoQuest, Geco-Prakla, Wireline & Testing in order to promote and sell its oil & gas services under the single trading name of Schlumberger Oilfield Services (OFS). Also that year, Sedco Forex was spun off, and merged with Transocean Drilling Company. The following year, Schlumberger acquired the IT consultancy company Sema plc for $5.2 billion. The company was an Athens 2004 Summer Olympics partner, but Schlumberger's venture into IT consultancy did not pay off, and divestiture of Sema to Atos Origin was completed that year for $1.5 billion. That same year, the Cards division was divested through an IPO to form Axalto, which later merged with its competitor Gemplus to form Gemalto. In 2003 the Automated Test Equipment group, part of the 1979 Fairchild Semiconductor acquisition, was spun off to NPTest Holding, which later sold it to Credence. On January 10, 2005 Schlumberger purchased Waterloo Hydrogeologic, which was followed by several other groundwater industry related companies, such as Westbay Instruments, and Van Essen Instruments. In late 2006, the corporate head office moved from its previous location in New York back to Houston, Texas. In 2006, a 2 for 1 stock split was announced, effective as of March 1, 2006. On April 21, 2006, Schlumberger purchased of the remaining 30% stake in WesternGeco from Baker Hughes for US$2.4 billion. In 2006, Schlumberger built a new research facility in Cambridge, Massachusetts to replace the Ridgefield, Connecticut research center. The move was completed at the end of 2006. The new facility joins the other research centers operated by the company in Cambridge, England; Moscow, Russia; Stavanger, Norway; and Dhahran, Saudi Arabia.

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Analysis of Financial Statements

COMPARISON OF PAKISTAN PETROLEUM LIMITED AND SCHLUMBERGER RATIOS  ACTIVITY ANALYSIS RECEIVABLE TURNOVER

Pakistan Petroleum limited

35.78

Schlumberger

5.0435

40 35 30 25

Pakistan Petroleum limited

20 15 10 5 0

Schlumberger

1

Receivable turnover means how quickly company’s receivable are converted into cash it must be higher. The comparison shows that PPL ratio is 35.78 and Schlumberger ratio is 5.04 which shows that PPL receivable turnover ratio is more as compare to Schlumberger. This shows that PPL is in better position as compare to Schlumberger because more ratio shows the effectiveness of firm credit policy and economic operating performance.

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Analysis of Financial Statements

AVERAGE NO. OF DAYS RECEIVABLES OUTSTANDING

Pakistan Petroleum limited

10.20 days

Schlumberger

72.4 days

It is the debt collection period. This ratio describes that how quickly a company collect its outstanding receivable. PPL debt collection period is 10 days and Schlumberger debt collection period is 75 days. This shows that PPL is better as compare to Schlumberger because PPL collect cash from receivables in 10 days but Schlumberger collect in 72 days. Less the collection period better the company’s performance and this comparison shows that PPL is in better position as compare to Schlumberger.

WORKING CAPITAL RATIO

Pakistan Petroleum limited

2.149

Schlumberger

6.572

7 6 5 4

Pakistan Petroleum limited

3

Schlumberger

2 1 0 1

Working capital ratio shoes that how company utilize its capital for generating sales and higher the ratio better the company’s performance. Working capital ratio of PPL is 2.14 and Schlumberger ratio is 6.57 its mean PPL by investing Rs.1 in capital get the sales of Rs.2.14 and the Schlumberger by investing Rs.1 in capital generate a sales of Rs.6.57. And this comparison shows that Schlumberger is in better position as compare to PPL.

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Analysis of Financial Statements

FIXED ASSETS TURNOVER Pakistan Petroleum limited

2.63

Schlumberger

4

4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

Pakistan Petroleum limited Schlumberger

1

This ratio shows that how company is utilizing its fixed assets efficiently for generating sales and higher the ratio better the company performance. PPL fixed assets turnover ratio is 2.63I and Schlumberger ratio is 4 which show the efficiency of the company in utilizing their fixed assets. And this comparison shows that Schlumberger company is in better position as compare to PPL. Because by utilizing fixed assets of Rs.1 Schlumberger company generate a sale of Rs.4 and PPL by utilizing fixed assets of Rs.1 generate a sales of Rs.2.63 and it clearly shows that Schlumberger is better.

TOTAL ASSETS TURNOVER Pakistan Petroleum limited

0.871

Schlumberger

0.94

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Analysis of Financial Statements

0.94 0.92 Pakistan Petroleum limited

0.9 0.88

Schlumberger

0.86 0.84 0.82 1

This ratio shows that how company is utilizing its total assets efficiently for generating sales and more the ratio better the company’s performance. Total assets turnover ratio of PPL is 0.871 and Schlumberger is 0.94 which shows that Schlumberger company is better as compare to PPL.

 LIQUIDITY ANALYSIS CURRENT RATIO Pakistan Petroleum limited

3.246

Schlumberger

1.423

4 3

Pakistan Petroleum limited

2

Schlumberger

1 0 1

This ratio shows that how much current assets a company has against current liabilities. And how efficiently company uses its current assets to generate more profit and higher ratio shows better performance. Current ratio of PPL is 3.246 which show that PPL has current assets of rs.3.246 against liabilities of Rs.1 and Schlumberger ratio is 1.423 which shows that Schlumberger has current assets of Rs.1.423 against liabilities of Rs.1 and -9-

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Analysis of Financial Statements PPL has more current assets to fulfill its current liabilities. This comparison shows that PPL is in better position as compare to Schlumberger because PPL has more current assets as compare to Schlumberger.

QUICK RATIO Pakistan Petroleum limited

2.099

Schlumberger

1.12178

2.5 2 Pakistan Petroleum limited

1.5 1

Schlumberger

0.5 0 1

Quick ratio or liquid ratio measures the ability of a company to use its near cash or quick assets to immediately extinguish its current liabilities. Quick assets include those current assets that presumably can be quickly converted to cash at close to their book values. Such items are cash, marketable securities, and some accounts receivable. This ratio indicates a firm's capacity to maintain operations as usual with current cash or near cash reserves in bad periods. As such, this ratio implies a liquidation approach and does not recognize the revolving nature of current assets and liabilities. The ratio compares a company's cash and short-term investments to the financial liabilities the company is expected to incur within a year's time. Quick ratio of PPL is 2.099 and Schlumberger ratio is 1.122. PPL is better as compare to Schlumberger.

CASH RATIO

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Analysis of Financial Statements Pakistan Petroleum limited

2.079

Schlumberger

0.46596

2.5 2 Pakistan Petroleum limited

1.5

Schlumberger

1 0.5 0 1

The cash ratio measures the extent to which a corporation or other entity can quickly liquidate assets and cover short-term liabilities, and therefore is of interest to short-term creditors. The cash ratio of PPL is 2.079 and Schlumberger ratio is 0.469. This comparison shows that PPL performance is better as compare to Schlumberger because PPL has more cash to pay its current liabilities.

 LONG TERM DEBT AND SOLVENCY ANALYSIS DEBT TO TOTAL CAPITAL Pakistan Petroleum limited

0.264

Schlumberger

0.142

0.3 0.25 Pakistan Petroleum limited

0.2 0.15

Schlumberger

0.1 0.05 0 1

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Analysis of Financial Statements

The Debt to Capital Ratio (D/C ratio) shows the proportion of a company's debt to its total capital, which consists of the sum of its debt and equity combined. The D/C ratio is regularly used to measure a company's capital structure and its financial solvency. The debt to total capital ratio of PPL is 0.264 and it shows that PPL has Rs.0.246 against capital of Rs.1 which means PPL debt is less as compare to its capital. And Schlumberger ratio is 0.142 its mean Schlumberger debt is also les as compare to its capital. And this comparison shows that Schlumberger is better as compare to PPL because Schlumberger debts are less as compare to PPL.

DEBT TO EQUITY Pakistan Petroleum limited

0.36

Schlumberger

0.3

0.36 Pakistan Petroleum limited

0.34 0.32 0.3

Schlumberger

0.28 0.26 1

The debt to equity ratio (D/E) is a financial ratio indicating the relative proportion of equity and debt used to finance a company's assets. This ratio is also known as Risk, Gearing or Leverage. PPL D/E ratio is 0.36 which means company has a debt of RS.0.36 against equity of Rs.1 it shows that company has more equity to fulfill the debts. And D/E ratio of Schlumberger 0.3 which also shows that company has more equity to fulfill it debts. This comparison shows that Schlumberger company is better because its debts are less as compare to PPL. CAPITAL EXPENDITURE RATIO

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Analysis of Financial Statements Pakistan Petroleum limited

3.94

Schlumberger

0.33

4 Pakistan Petroleum limited

3 2

Schlumberger

1 0 1

This ratio shows a company's ability to maintain plant and equipment from cash provided by operations, rather than by borrowing or issuing new stock. The ratio equals cash flow from operations less dividends divided by expenditures for plant and equipment. The capital expenditure ratio of PPL is 3.94 which shows that company has more cash from operation to maintain its plants and equipment. And the capital expenditure ratio of Schlumberger is 0.33 which shows that company has less cash from operation to maintain its plants and equipment and in this case Schlumberger company borrows or issue new stock to maintain its equipment.

 PROFITABILITY ANALYSIS OPERATING PROFIT MARGIN Pakistan Petroleum limited

62%

Schlumberger

27%

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Analysis of Financial Statements

80% 60%

Pakistan Petroleum limited

40%

Schlumberger

20% 0% 1

Operating margin is a measurement of what proportion of a company's revenue is left over after paying for variable costs of production such as wages, raw materials, etc. A healthy operating margin is required for a company to be able to pay for its fixed costs, such as interest on debt. Operating margin gives analysts an idea of how much a company makes (before interest and taxes) on each dollar of sales. The operating margin of PPL is 62% which shows that company has more revenue that it easily fulfill its variable cost of production and pay interest on debts. The Schlumberger ratio is 27% which shows that company has enough revenues to fulfill its variable cost and pay interest on debts. And the comparison shows that PPL performance is better and it generate more revenues as compare to Schlumberger Company.

NET INCOME PROFIT MARGIN Pakistan Petroleum limited

42%

Schlumberger

19.3 %

50%

30%

Pakistan Petroleum limited

20%

Schlumberger

40%

10% 0% 1

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Analysis of Financial Statements

Net Profit Ratio refers to a measure of profitability and shows that a company earns how much profit after deducting all expenses. The profit margin of PPL is 42% which shows company’s net profit is 42% after deducting all expenses and interest and Schlumberger ratio is 19.3%. And this comparison shows that PPL profit margin is more as to Schlumberger which shows PPL performance is better as compare to Schlumberger.

 RETURN ON INVESTMENT RETURN ON ASSETS Pakistan Petroleum limited

36%

Schlumberger

18 %

40% Pakistan Petroleum limited

30% 20%

Schlumberger

10% 0% 1

This ratio shows that how much return a company gets from its assets. This is an important ratio for companies deciding whether or not to initiate a new project. The basis of this ratio is that if a company is going to start a project they expect to earn a return on it, ROA is the return they would receive. Simply put, if ROA is above the rate that the company borrows at then the project should be accepted, if not then it is rejected. ROA of PPL is 36% which shows company return on its assets and Schlumberger ratio is 18%. The comparison shows that PPL performance is better as compare to Schlumberger because PPL return on assets is more as compare to Schlumberger.

RETURN ON EQUITY

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Analysis of Financial Statements Pakistan Petroleum limited

48.8%

Schlumberger

39%

50.00% Pakistan Petroleum limited

40.00% 30.00% 20.00%

Schlumberger

10.00% 0.00% 1

Return on equity (ROE in financial shorthand) measures how much a company earns on each dollar that investors in its common stock have put into the company. It’s calculated by dividing shareholders’ equity into net income for the period (after deducting preferred stock dividends from income but without deducting common stock dividends). The number tells shareholders how effectively a company and its management are using their money. It is a more global measure of management efficiency than return on assets, and one which works across a broader selection of industries. This ratio shows how much return a company gets on its equity. ROE of PPL is 48.8% which shows company get 48.8% return on equity and Schlumberger ratio is 39%. And this comparison shows that PPL is better as compare to Schlumberger because PPL return on equity is more as compare to Schlumberger.

RETURN ON TOTAL CAPITAL Pakistan Petroleum limited

36.8%

Schlumberger

24.1%

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Analysis of Financial Statements

40.00% Pakistan Petroleum limited

30.00% 20.00%

Schlumberger

10.00% 0.00% 1

Return on capital how much return a company is realizing from its capital. Calculated as profit before interest and tax divided by the difference between total assets and current liabilities. The resulting ratio represents the efficiency with which capital is being utilized to generate revenue. ROTC ratio of PPL is 36.8% which shows company return on capital and Schlumberger ratio is 24.1%. the comparison shows that PPL is better as compare to Schlumberger because PPL return on capital is more as compare to Schlumberger and it clearly shows that PPL performance is better.

COMPARISION OF COMMON SIZE STATEMENTS TREND ANALYSIS Trend analysis is an aspect of technical analysis that tries to predict the future movement of a stock based on past data. Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future. Trend analysis tries to predict a trend like a bull market run and ride that trend until data suggests a trend reversal (e.g. bull to bear market). Trend analysis is helpful because moving with trends, and not against them, will lead to profit for an investor. FIXED ASSETS Fixed assets include property, plants and equipment and intangible assets and fixed ratio of PPL in 2003 is 41.7%, and in 2004 the percentage is decrease to 39.01, and it is also

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Analysis of Financial Statements decreased in 2005to 35.46% and in 2006 it is decreased to 31.33%. The trend shows that company decreased its investment in fixed assets each year. Fixed assets of Schlumberger in 2003 is 18.96% and it is decreased in 2004 to 23.91%, and in 2005 it is decreased to 23.24% which shows a very small change as compare to previous year and in 2006 it is increased to 24.42%. This trend shows that company increases its investment in fixed assets. The comparison of trend analysis shows that PPL investment in fixed assets is more as compare to Schlumberger Company. But PPL decreased its investment in current assets while Schlumberger increase its investment in fixed assets.

50 40 30

PPL

20

Schlumberger

10 0

2003

2004

2005

2006

LONG TERM ASSETS Long term assets include long term investment, receivables, staff loans and deferred taxation. PPL investment in long term assets in 2002 is14.6% and in next year it is decreased to 11.1%, and in 2004 it is again decreased to 7.79% and in 2006 it is also decreased to 2.78%. This shows a decreasing trend and its mean company decreased its investment in long term assets. Long term assets ratio of Schlumberger in 2003 is 27.98%, and next year it is increasing to 30.66% but in 2005 it is decreased to 28.5% and in 2006 it was again increasing to 34.66%.This trend shows that company decreased its investment in long term assets in 2005 but in next company increased its investment. The trend shows that PPL invest less in long term assets as compare to Schlumberger. And PPL investment is also decreasing in long term assets while Schlumberger increased - 18 -

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Analysis of Financial Statements its investment. This shows Schlumberger company is better as compare to PPL because it invest more in long term assets.

35 30 25 20

PPL

15

Schlumberger

10 5 0

2003

2004

2005

2006

CURRENT ASSETS Current assets include stores and spares, trade debts, cash etc. the current assets of PPL in 2003 is 43.48%, and in next year it is increased to 49.84% which shows a little higher increase as compare to previous year, and in 2005 it is 56.74% which shows a greater change as compare to previous year and in 2006 it is again increased to 65.87%. This shows an increasing trend because company invests more in current assets. Schlumberger current assets in 2003 is 51.74%, and in next year it is decreased to 44.12% which shows a greater decreased in current assets, and in 2005 it is increased to 47.32% and in 2006 it is again decreased to 40.23% which also shows a greater decline in current assets. The trend shows that PPL is better as compare to Schlumberger because PPL investment in current assets is more as compare to Schlumberger. And PPL increased its investment in current assets over last four years while Schlumberger decreased its investment, in next year increased the investment but again decreased in next year.

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Analysis of Financial Statements

70 60 50 40

PPL

30

Schlumberger

20 10 0

2003

2004

2005

2006

NON CURRENT LIABILITIES Non current liabilities includes decommissioning cost, deferred taxation, long term liabilities, minority interest etc. the non current liabilities of PPL in 2003 is 13.10%, and in next year it is increased to 14.70% which shows a little increased as compare to previous year, and in 2005 it is decreased to 10.47% and in 2006 it is again decreased to 6.19% which shows a greater decline. The Schlumberger non current liabilities in 2003 is 36.78%, and in next year it is decreased to 32.45%, and in 2005 it is again decreased to 28.19% and in 2006 it is again decreased to 26.06%. This shows a decreasing trend its mean company’s non current liabilities decreased. The comparison trend shows that PPL non current liabilities are less as compare to Schlumberger company. And this trend shows that PPL is better as compare to Schlumberger because its non current liabilities are less. The trend also shows that non current liabilities of both companies are decreasing. 40 35 30 25 20 15 10 5 0

PPL Schlumberger

2003

2004

2005

2006

CURRENT LIABILITIES

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Analysis of Financial Statements

Current liabilities includes trade debts, proposed dividend, taxation and other liabilities. The current liabilities of PPL in 2003 is 34.05%, and in next year it is decreased to 21.95% which shows a greater decreased in current liabilities, and in 2005 it is increased to 22.70% which shows a little increased as compare to previous year, and in 2006 it is again decreased to 20.28%. The Schlumberger current liabilities in 2003 is 33.9%, and in next year it is decreased to 29.38%, and in 2005 it is increased to 30.05% and in 2006 it is again decreased to 28.97%. The trend shows that in 2003 current liabilities of both companies are equal and in next years it is declining. This trend also shows that PPL is better because its current liabilities are less as compare to Schlumberger.

35 30 25 20

PPL

15

Schlumberger

10 5 0

2003

2004

2005

2006

STAKEHOLDERS EQUITY The stakeholder’s equity of PPL in 2003 is 52.83%, and in next year it is increased to 63.34%, and in 2005 it is also increased to 66.82% and in 2006 it is again increased to 73.51%. This shows an increasing trend in stakeholder’s equity. The stakeholders equity of Schlumberger in 2003 is 29.34%, and in next year it is increased to 38.227%, and in 2005 it is also increased to 42%,a and in 2006 it is again increased to 45.64% which shows an increasing trend. The trend shows that both companies stakeholders equity increasing in last four years but the PPL is better because its equity is more as compare to Schlumberger. And it is good

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Analysis of Financial Statements for a company to have more equity and less debts because PPL more equity and borrowing is less.

80 70 60 50 40 30 20 10 0

PPL Schlumberger

2003

2004

2005

2006

COMPARISON OF COMMON SIZE INCOME STATEMENTS

SALES For common size of income statement we take 2003 as a base year. In 2004 the sales of PPL is 145, and in 2005 it is 191.2 which shows the sales is decreasing in this year and in 2006 the sales are 260.7 which shows higher increase as compare to previous year. The sales of Schlumberger company in 2004 is 118.9, and in next year it is 148.17 which shows sales are increasing in this year, and in 2006 it is 199.12 which also shows a

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Analysis of Financial Statements higher increase in sales. This increasing trend shows that company increase its sales in each year. The trend shows that both companies sales are increasing in each coming year but the PPL is in better position as compare to Schlumberger because sales of PPL is more than Schlumberger.

300 250 200 PPL

150

Schlumberger

100 50 0

2004

2005

2006

OPERATING PROFIT Operating profit of PPL in 2004 is 191.4, and in next year it is 276.8 which shows a higher increase, and in 2006 the it is 401.8 which also shows a higher increase as compare to previous years. The trend shows that PPL operating profit is increasing and it reflect the better performance of company. The operating profit of Schlumberger in 2004 is 202.7, and in next year it is increased to 453.7,and in 2006 it is again increasing. The trend shows that company’s operating profit is increasing. The trend shows that companies earn almost equal operating profit in 2004 and it is increasing in next two years. But the Schlumberger is in better position because its operating profit is more as compare to PPL.

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Analysis of Financial Statements

800 700 600 500 400 300 200 100 0

PPL Schlumberger

2004

2005

2006

NET INCOME Net income of PPL in 2004 is 157.9, and it is increased in next year to 205.7, and in 2006 it is again increased to 319.7. This shows an increasing trend and company’s net income is increasing in last three years. Net income of Schlumberger in 2004 is 52.7, and in next year it is increased to 95.12, and in 2006 it is again increased to 159.9 which show a higher increase as compare to previous years. The trend shows that both companies net income is increasing but the PPL ratio of net income is more as compare to Schlumberger. And this also shows that PPL performance is better as compare to Schlumberger.

350 300 250 200

PPL

150

Schlumberger

100 50 0

2004

2005

2006

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Analysis of Financial Statements

COMPARISION OF REFORMULATED BALANCE SHEET AND INCOME STATEMENT Return on assets (ROA) PPL

0.768

Schlumberger

4.091

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Analysis of Financial Statements PPL return on assets is 0.768 and Schlumberger return on assets is 4.091. This comparison shows that Schlumberger is better because its return on assets is more as compare to PPL.

5 4 3

PPL

2

Schlumberger

1 0

1

Return on common equity (ROCE) PPL

63.92%

Schlumberger

22.44%

80.00% 60.00% PPL

40.00%

Schlumberger

20.00% 0.00%

1

PPL return on common equity is 63.92% and Schlumberger return on common equity is 22.44% which shows that PPL is better because its return on equity is more as compare to Schlumberger. The spread of PPL is 17% and it is negative. Negative spread decreased the equity and company has less potential to grow. And the spread of Schlumberger is 22% which is also negative. In this case PPL is better because its spread is less negative as compare to Schlumberger.

- 26 -

AINI

Analysis of Financial Statements

FREE CASH FLOW PPL

174674796

Schlumberger

2529176

Free cash flow is cash from operation and investment. PPL generate more cash from operation as compare to Schlumberger.

DIVIDEND PPL

174699552

Schlumberger

5583744

PPL pay more dividend to its shareholders as compare to Schlumberger because PPL has more cash to distribute.

GROWTH IN OPERATING ASSETS

PPL

49.6%

Schlumberger

18%

50.00% 40.00% 30.00%

PPL

20.00%

Schlumberger

10.00% 0.00%

1

- 27 -

AINI

Analysis of Financial Statements PPL operating assets growth rate is 49.6% and Schlumberger growth rate in operating assets is 18% which shows that PPL is better because its growth rate is more as compare to Schlumberger. GROWTH IN CSE PPL

42%

Schlumberger

10.97%

50% 40% 30%

PPL

20%

Schlumberger

10% 0%

1

PPL growth rate in CSE is 42% and Schlumberger growth rate is 10.97% which shows that PPL is better because its rate is more as compare to Schlumberger.

PAKISTAN PETROLEUM LIMITED ACTIVITY ANALYSIS  Receivable Turnover = Sales/ Average Receivables = 31756712 / 887546 = 35.78 Average Receivables= (Opening receivable + Closing Receivables) / 2

- 28 -

AINI

Analysis of Financial Statements = (381065 + 1394028) / 2 = 1775093 / 2 = 887546  Average No. of days receivables outstanding = 365 / Receivable Turnover = 365 / 35.78 = 10.20 days

 Working Capital Ratio = Sales / Average working capital = 31756712 / 147717605 = 2.149

Average working capital = (Opening working capital + Closing Working Capital) / 2 = [ (Current assets – Current Liabilities) + ( C.A –C.L)] /2 = [(18039558 – 7217129) + (27053297- 8332205)] / 2 = 18721092 + 10822429 / 2 = 29543521 / 2 = 147717605  Fixed assets turnover = Sales / Average fixed assets = 31756712 / 12072173 = 2.63  Average fixed assets = (Opening fixed assets + Closing fixed assets) / 2 = (11274763 + 12869583) / 2 = 24144346 / 2 = 12072173  Total assets turnover = Sales / Average total assets - 29 -

AINI

Analysis of Financial Statements = 31756712 /36428949 = 0.871 Average total assets = (Opening total assets + Closing Total Assets) / 2 = ( 31791802 + 41066097) / 2 = 72857899 / 2 = 36428949

LIQUIDITY ANALYSIS  Current ratio = Current assets / Current liabilities = 27053297 / 8332205 = 3.246  Quick ratio = (Cash + Marketable securities +A/c Receivables) / Current Liabilities = [17326903 + (2395 + 156890 + 9922)] / 8332205 = 17496110 / 8332205 = 2.099  Cash ratio = Cash + Marketable securities / Current liabilities = 17326903 + 0 / 8332205 = 2.079

LONG TERM DEBT AND SOLVENCY ANALYSIS  Debt to total capital = Total debt / Total capital = 10877550 / 41066097 = 0.264

- 30 -

AINI

Analysis of Financial Statements

 Debt to equity = Total debt / Total equity = 10877550 / 30188547 = 0.36  Capital expenditure ratio = Cash from operation / Capital expenditure = 13119599 / 3324595 = 3.94

PROFITABILITY ANALYSIS  Operating profit margin = Operating income / Sales = 19840830 / 31756712 = 0.62 = 62%  Margin before interest and tax = Earning before interest and tax / Sales = 20219629 / 31756712 = 0.63 = 63%  Pretax margin = Earning before tax / Sales = 20189533 / 31756712 = 0.64 = 64%  Net income profit margin = Net income / Sales = 13401001 / 31756712 = 0.421

- 31 -

AINI

Analysis of Financial Statements = 42%

RETURN ON INVESTMENT i.

Return on assets

ii.

Return on equity

iii.

Return on total capital

ROA a. Return on assets (ROA) = earning before interest and tax / Average total assets = 20219629 / 36428949 = 0.55 = 55% b. Return on assets = (Net income + After tax interest expense) / Avg. total assets = (13401001 + 195624) / 36428949 = 13420563 / 36428949 = 0.36 = 36% After tax interest expense = Interest expense * (1-t) = 30096 * (1- 0.35) = 30096 * 0.65 = 19562 ROE c. Return on equity = ROA + debt/equity (ROA – cost of debt) = 0.36 + 10877550/30188547 (0.36 – 0.002)

- 32 -

AINI

Analysis of Financial Statements = 0.36 + 0.36*0.358 = 0.36 + 0.12888 = 0.4888 = 48.8% Spread = ROA – Cost of debt = 0.36 – 0.002 = 0.358 = 35.8% ROTC d. Return on total capital = EBIT / Avg. Total capital = 20219629 / 36428949 = 0.555 = 55.5% Avg. Total capital = (Opening total liabilities + Closing total liabilities) / 2 = (31791802 + 41066097) / 2 = 72857899 / 2 = 36428949 e. Return on total capital = (Net income + After tax interest expense) / Avg. Total liabilities = (13401001 + 19562) / 36428949 = 13420563 / 36428949 = 0.368 = 36.8%

- 33 -

AINI

Analysis of Financial Statements

2006 Inventory Turnover

11.71

Avg. No. of days inventory in Stock

31 days

Receivable Turnover

5.0435

Avg. No. of days Receivable Outstanding Payable Turnover

72.4days 5.188

Avg. No. of days Payable outstanding Working Capital Turnover

70.4days 6.572

Fixed Asset Turnover

4

Total Asset Turnover

0.94

LIQUIDITY ANALYSIS 2006 Current Ratio

1.423

Quick Ratio

1.12178

Cash Ratio

0.46596

CFO Ratio

0.740

Defensive Interval

181.4 days

- 34 -

AINI

Analysis of Financial Statements

LONG TERM AND SOLVENCY ANALYSIS 2006 Debt to Total Capital

0.142

Debt to Equity

0.3

Times Interest earned

22.1

Times Interest earned (cash basis)

20.45

Capital Expenditure Ratio

0.33

CFO to Debt

1.5

PROFITABILITY ANALYSIS 2006 Gross Profit Margin Operating Margin Profit Margin

31.29% 27% 19.3 %

Return on Assets

18 %

Return on Equity

39%

ROE=ROA + D/E (ROA-COST OF DEBT) =0.18+12412255/10419883 (0.18-0.003) =0.18+1.192 (0.18-0.003) =0.18+1.192 (0.177) =0.18+0.211 =0.391

- 35 -

AINI

Analysis of Financial Statements =39

Pakistan Petroleum Limited Common size Balance Sheet At 30 June 2003

2004

2005

2006

30.6

38.6512 5

35.2264 2

31.07

11.14

0.36

0.23

0.25

41.7

39.01

35.46

31.33

ASSETS FIXED ASSETS Property, Plant and Equipment Intengible assets Long Term Investment

-

0.53

2.05

0.75

Long term receivable

10.7

5.95

2.57

0.51

Long term loans staff

0.04

0.04

0.035

0.03

Deferred taxation

3.80

4.59

3.12

1.48

Stores and spares

4.85

4.45

4.06

3.10

Trade debts

12.9

15.16

14.4

16.91

Current maturity of long term receivable

2.31

1.98

2.22

1.71

Current maturity of long term investment

-

-

0.00006

0.83

Loans, advances, deposits, prepayments and other receivables

1.53

2.03

2.49

1.129

21.84

26.19

33.54

42.19

43.48

49.84

56.74

65.87

100

100

100

100

Share capital

33.53

27.06

21.57

16.70

Reserves

19.30

36.27

45.25

56.81

52.83

63.34

66.82

73.51

CURRENT ASSETS

Cash and bank balances TOTAL ASSETS

LIABILITIES SHARE CAPITAL AND RESERVES

- 36 -

AINI

Analysis of Financial Statements NON CURRENT LIABILITIES Decommissioning cost

10.79

6.59

5.97

3.91

Long term liability for gas development surcharge

0.17

5.95

2.57

0.51

Liabilities against assets subject to finance lease

2.12

0.25

0.19

0.19

1.89

1.72

1.57

13.10

14.70

10.47

6.19

0.051

1.98

2.22

1.719

6.11

0.10

0.11

0.10

18.74

17.67

12.13

11.94

Taxation

0.13

2.18

8.229

6.52

Proposed dividend

6.70

-

-

-

34.05

21.95

22.70

20.28

100

100

100

100

Deferred taxation CURRENT LIABILITIES Current maturity of liability for gas development surcharge Current maturity of liabilities against assets Trade debts

TOTAL LIABILITIES

- 37 -

AINI

Analysis of Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEET At 31 December

- 38 -

AINI

2003 ASSETS Current Assets

2004

2005

2006

Analysis of Financial Statements

Cash

1.2

1.4

1.1

0.73

Short term Investment

14.3

17.34

18.28

12.4

Receivables less allowance for doubtful a/c

12.82

16.7

18.7

18.58

Inventories

3.97

5.1

5.6

5.46

Deferred Taxes

1.57

1.49

1.29

0.713

Other Current Assets

1.71

1.72

2.38

2.34

Assets held for sale

6.16

0.41

-

-

51.74

44.12

47.32

40.23

1.11

1.27

2

0.670

Investment in Affiliated Companies

3.88

5.5

5.47

5.29

Multi cliental Seismic Data

2.5

2.17

1.23

1

Goodwill

16.9

17.4

16.17

21.9

Intangible Assets

2.01

2.17

1.8

4

Deferred Taxes

1.58

2.15

1.83

1.8

27.98

30.66

28.5

34.66

Fixed Asset less acc. Depreciation

18.96

23.51

23.24

24.42

Other Assets

1.34

1.7

1

0.76

TOTAL ASSET

100

100

100

100

Account payable and accrued liabilities

16.2

18.63

19.72

16.85

Estimated liability for taxes on income

4.03

5.4

5.3

4.98

Dividend payable

0.55

0.69

0.69

0.65

Long term debt-current portion

4.44

0.896

1.5

2.6

Bank & short term loans

2.6

3.6

3

3.15

Liabilities held for Sale

6.07

0.216

-

-

33.9

29.38

30.05

28.97

-

-

8

6.24

Other Long term Debt

30.42

24.7

12

14.19

Postretirement Benefits

3.1

4.2

4

4.5

Other Liabilities

1.27

0.95

1.4

1.13

1.99

2.6

2.79

36.78

32.45

28.19

Total Current Assets Fixed Income Investments, held to maturity

LIABILTIES&STOCKHOLDER’ EQUITY Current Liabilities

Total Current Liabilities Convertible Debentures

Minority Interest

- 39 -

AINI 26.06

Analysis of Financial Statements

SCHLUMBERGER LIMITED AND SUBSIDIARY COMPANIES

Common size Income statement - 40 -

AINI

Analysis of Financial Statements

Year ended December 31, 2003

2004

2005

2006

Operating Revenue

100

118.9

148.17

199.126

Interest and other income

100

92.54

293.215

206.17

Cost of goods sold

100

114.13

134.1

166.5

Research and engineering

100

103.5

112

149.044

Marketing

100

62

76.1

106.75

General and administration

100

103.2

110.8

134.817

Interest

100

74.01

53.6

63.84

100

202.7

453.7

755.42

100

110.06

271

472.74

100

260.4

567.6

931.76

100

42.63

106.24

57.02

Income from continuing operations

100

207.4

450

758.9

Income from discontinued operations

100

7.46

0.28

-

Net income

100

52.7

95.12

159.9

2004

2005

2006

Expenses

Income from continuing operations before taxes and minority interest Taxes on income Income from continuing operations Minority interest

Pakistan Petroleum limited Common size Income Statement Year ended 30 June, 2003 Base Year Sales - net

100

145

191.2

260.7

Field expenditure

100

105.3

116.9

130.5

Royalties

100

150.5

205.9

288.5

- 41 -

AINI

Analysis of Financial Statements Amortization of past prospecting expenditure

100

Operating profit

100

191.4

276.8

401.8

Share of profit in Bolan Mining Enterprise

100

89.9

95.3

68.5

Other operating income

100

55.8

180.1

489.1

Other operating expenses

100

159.4

211.3

317.1

Profit before interest and tax

100

184.7

274.5

411.3

Interest expense

100

23.9

25.2

39.5

Profit before tax

100

187.2

278.4

417.2

Taxation

100

376.9

747.6

1046.1

Net Income

100

157.9

205.7

319.7

-

-

-

Pakistan Petroleum Limited Reformulated Balance sheet As on 30 June, 2006 OPERATING ASSETS Property plant and equipment Intangible assets Deferred taxation Stores and spares Trade debts Currency maturity of long term receivable

- 42 -

12763021 106562 610272 1273261 6941736 706309

AINI

Analysis of Financial Statements Cash and balances Receivables from SNGPL for sui field services Receivables from joint venture partners Advances to suppliers and others Trade deposits and prepayments Sales tax refundable Other receivables FINANCIAL ASSETS Long term investment Long term receivable Long term loans staff Current maturity of long term investments Loans and advances to staff Current maturity of ling term staff Accrued financial income TOTAL ASSETS OPERATING LIABILITIES Decommissioning cost Long term liability for gas development surcharge Deferred liabilities Current maturity of long term liability Trade and others payables Taxation FINANCIAL LIABILITIES Liabilities against assets subject to finance leases Current maturity of liabilities against assets COMMON STAKEHOLDERS EQUITY Share capital Reserves TOTAL LIABILITIES

17326903 2395 156890 38843 137799 6700 9922 40080613 308396 211858 12691 341131 16795 5086 89527 985484 41066097

1608707 211858 645431 706309 4903960 2677700 10753965 79349 44236 123585 6858376 23330171 30188547 41066097

NOA = Operating assets – Operating Liabilities = 40080613 - 10753965 = 29326648

- 43 -

AINI

Analysis of Financial Statements NFA = Financial assets – Financial liabilities = 985484 - 123585 = 861899 RNOA 1. Return on net operating assets(ROA) = Operating income / Avg. NOA = 188404401 / 24461845 = 0.768 Avg. NOA= (NOAt - NOAt-1) /2 = (29326648 - 19597043) / 2 = 24461845 ROCE 2. ROCE = PM x ATO – [FLEV x (RNOA – RNFA)] = 0.592 x 1.0828 – [0.0285 x (0.768 - 0.706)] = 0.64101 – [0.0285 x 0.62] = 0.64101 – 0.1767 = 0.6392 = 63.92% PM = Operating income / Sales = 184404401 / 31756712 = 0.592 ATO = Sales / NOA = 31756712 / 29326648 = 1.0828 FLEV = NFA /CSE = 861899 / 30188547 = 0.0285

- 44 -

AINI

Analysis of Financial Statements RNFA = NFI / Avg. Financial assets = 886655 / 1255150 = 0.706

Avg. Financial assets = (NFA t – NFA t-1) / 2 = (861899 – 1648401) / 2 = 1255150 ROCE = Operating income / Avg. CSE = 184404401 / 25716995 = 0.717 Free cash flow ( C-I ) = Operating income – Change in net operating assets = 184404401

– (29326648 – 19597043)

= 184404401 – 9729605 = 174674796 Dividend d = (C-I) – Change in net financial assets + NFI = 174674796 – (985484 – 123585) + 886655 = 174674796 – 861899 + 886655 =174699552

Growth in net operating assets Growth in net operating assets = Change in net operating assets / Beginning NOA = (29326648 – 19597043) / 19597043 = 9729605 / 19597043 = 0.496 = 49.6%

- 45 -

AINI

Analysis of Financial Statements

Growth in CSE Growth in CSE = Change in CSE / Beginning CSE = (30188547 – 21245444) / 21245444 = 8943103 / 21245444 = 0.420 = 42%

Schlumberger Limited Reformulated Balance Sheet As on December 2006 Assets Operating Assets Cash Receivables Inventories Deferred Taxes Current Assets (other)

(000’s) 18461078 165817 4242000 1246887 162884 585018 - 46 -

AINI

Analysis of Financial Statements Fixed Assets less Depreciation Goodwill Intangible Assets Deferred Taxes (other) Other Assets Financial Assets Short Term Investments Fixed Income Investments Investments Affiliated Companies Total Assets

5576041 4988558 907874 412802 173197 4244879 2883056 153000 1208823 22882138

Liabilities Operating Liabilities Estimated Liabilities for Tax on Income Dividend Payable Long Term debt Dividend Payable Bank and Short term Loans Financing Liabilities Convertible Debentures Other Long Term Debt Post Retirement Benefits Other liabilities Stock Holders Equity Common Stock Income Retained Treasury Stock At Cost Comprehensive Loss Total Liabilities

(000’s) 2805498 1186529 148720 602919 148720 718610 11007960 1424990 8288952 1036169 257849 15919883 8881946 11118479 (2911793) (1168749) 22882138

NOA = Operating assets – Operating Liabilities = 18461078 - 2805498 = 15655580 NFO = Financial assets – Financial liabilities = 4244879-11007960 = 6763081

- 47 -

AINI

Analysis of Financial Statements

RNOA Return on net operating assets(ROA) = Operating income / Avg. NOA =4948158 / 1209491 = 4.091 Avg. NOA= (NOAt - NOAt-1) /2 = (15655580 -13236598) / 2 = 1209491 ROCE ROCE = PM x ATO – [FLEV x (RNOA – RNFA)] = 0.3744x0.8440– [0.2667x (0.4091- 0.254)] =22.44% PM = Operating income / Sales = 4948158 / 13214048 = 0.3744 ATO = Sales / NOA = 13214048 / 15655580 = 0.8440 FLEV = NFA /CSE = 4244879/ 15919883 = 0.2667

Avg. Financial assets = (NFA t – NFA t-1) / 2 = (4244879 – 3589646) / 2 = 327616

- 48 -

AINI

Analysis of Financial Statements

ROCE = Operating income / Avg. CSE = 4948158 / 15397776 = 0.3213

Free cash flow (C-I) = Operating income – Change in net operating assets = 4948158 – 2418982 = 2529176

Dividend d = (C-I) – Change in net financial assets + NFI = 2529176 – 655233+ 3709801 = 5583744

Growth in net operating assets Growth in net operating assets = Change in net operating assets / Beginning NOA =2418982 / 13236598 =0.182 = 18%

Growth in CSE Growth in CSE = Change in CSE / Beginning CSE = (15919883-7591585)/7591585 =10.97%

- 49 -

AINI

Analysis of Financial Statements

Pakistan Petroleum Limited Reformulate Income Statement for year ended 30 June, 2006 Sales Field expenditure Royalties

31756712 8171060 3744822 19840830

Other operating income(expenses) Other operating income

90766 - 50 -

AINI

Analysis of Financial Statements Other operating expenses Operating income less: Taxes

1127195 18804401 678853 2 477429

Tax as reported Tax on financial income Operating income after tax plus: Financial income(expenses) Interest income Interest expense Tax on financial income Operating income after tax plus: Share of profit in Bolan Mining Enterprises Comprehensive income

139418 0 30096 136408 4 477429

6311103 12493298

886655 13379953 21048 13401001

PROFIT MARGIN RATIOS Financial income contribution ratio = Net financial income / Sales = 886655 / 31756712 = 0.0279 = 2.79% Net income profit margin ratio = Comprehensive income / Sales = 13401001 / 31756712 = 0.421 = 42%

Schlumberger Limited Reformulated Income Statement For the year ended 2006 Particulars

(000’s)

- 51 -

AINI

Analysis of Financial Statements Sales (cost of goods sold) Operating Income Interest and other Income Expenses: Maturity Research & Engineering General & Administration Interests Income Before Taxes & Interest Tax on Income Income After Tax Before Interest Interest Comprehensive Income

13214048 19230478 286716 75704 619316 4275057 234916 4948158 1189568 3758590 (48789) 3709851

PROFIT MARGIN RATIOS Financial income contribution ratio = Net financial income / Sales =375859 / 13214048 = 0.30 = 30% Net income profit margin ratio = Comprehensive income / Sales = 3709851 / 13214048 = 0.280 = 28%

- 52 -

AINI