analysis of different sectors of economy

Subject: Analysis of Financial Statement

ASSIGNMENT NO 1

GROUP MEMBERS:

SANA QAZI 081-51311024

TAHREEM JAMIL 081-51311022

SIDDIQA AJMAL 081-51311001

MBA – II (2 YEARS)

INSTRUCTOR: Sir Burhan Shah

Quaid-i-Azam UniversityQuaid-i-Azam School of Management Sciences

Table of Contents

Industrty Oil And Gas

Company: Mari Petroleum Company Limited 5

Year 2013................................................................................................................................................5

Year 2012................................................................................................................................................5

Year 2011................................................................................................................................................6

Year 2010................................................................................................................................................6

Year 2009................................................................................................................................................7

Company: PSO (Pakistan State Oil) 7

Year 2013................................................................................................................................................7

Year 2012................................................................................................................................................8

Year 2011................................................................................................................................................9

Year 2010................................................................................................................................................9

Year 2009..............................................................................................................................................10

Company: OGDCL (Oil and Gas Development Company Limited) 11

Year 2013..............................................................................................................................................11

Year 2012..............................................................................................................................................12

Year 2011..............................................................................................................................................12

Year 2010..............................................................................................................................................13

Year 2009..............................................................................................................................................13

Company: Attock Petroleum Limited 14

Year 2013..............................................................................................................................................14

Year 2012..............................................................................................................................................14

Year 2011..............................................................................................................................................14

Year 2010..............................................................................................................................................14

Year 2009..............................................................................................................................................15

Company:SHELL PAKISTAN 16

Year 2013..............................................................................................................................................16

Year 2012..............................................................................................................................................16

Year 2010..............................................................................................................................................17

Year 2009..............................................................................................................................................17

Year 2008..............................................................................................................................................18

Mari gasyear Audit firm Qualification2013 qualified2012 unqualified2011 unqualified2010 unqualified2009 unqualified

Pso 2013 M. Yousuf Adil Saleem & Co. &

KPMG Taseer Hadi & Co.unqualified

2012 M. Yousuf Adil Saleem & Co. & KPMG Taseer Hadi & Co.

unqualified


unqualified


unqualified

2009 A F. Ferguson & Co. & KPMG Taseer Hadi & Co.

unqualified

Ogdcl 2013 KPMG Taseer Hadi & Co. &

Yousuf Adil Saleem & Co.unqualified

2012 KPMG Taseer Hadi & Co. & Yousuf Adil Saleem & Co.

unqualified


unqualified


unqualified


unqualified

Attock petroleoum2013 A.F. Ferguson & Co.&

M. Imtiaz Aslam & Co.unqualified

2012 A.F. Ferguson & Co.& M. Imtiaz Aslam & Co

unqualified


unqualified


unqualified


unqualified

Shell 2013 A.F. Ferguson & Co.&

M. Imtiaz Aslam & Coqualified


qualified

2010 A.F. Ferguson & Co.& qualified

M. Imtiaz Aslam & Co2009 A.F. Ferguson & Co.&

M. Imtiaz Aslam & Coqualified


Analysis of Auditor’s Report

Industry: Oil and Gas

Company: Mari Petroleum Company Limited

Year 2013Auditor: Chartered AccountantsEngagement Partner Sohail M. KhanIslamabadDate: September 10, 2013

Analysis:

In the opinion of auditor the balance sheet, profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan and give the information required by the Companies Ordinance, 1984. Furthermore these financials also give a true and fair view of the state of the Company’s affairs as at 30 June 2010 and of the profit. In our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the Company.This is a qualified auditor report having an “except for” statement that “as explained in note 11.3 to the financial statements, the Oil and Gas Regulatory Authority (Price Determining Authority) has not yet confirmed the adjustment required under the Mari Gas Well Head Price Agreement in the revenue generated through the gas price fixed for the year ended June 30, 2013. According to the report regardless of the effect of above “except for” statement, the balance sheet, profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof conform with the approved accounting standards as applicable in Pakistan.

Year 2012Auditor: Chartered AccountantsEngagement Partner Sohail M. KhanIslamabadDate: September 27, 2012

Analysis:

The first paragraph of this report tells us about the areas of the financial statements that were considered for auditing. It tells that balance sheet of Mari Gas Company Limited as at June 30, 2012 and the related profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes were audited in this report.The second paragraph indicates that all the financial statements are prepared according to the approved accounting standards and the requirements of the Companies Ordinance, 1984.

The third paragraph gives the auditor's opinion on the financial statements of the company being audited. This is simply an opinion, not a guarantee of accuracy. Based on the auditor’s opinion we can analyze that it is an unqualified auditor report. The financial statements of Mari Gas Company Limited for the year ended June 30, 2011 were audited by another auditor who expressed an unmodified opinion on those statements on September 26, 2011.

Year 2011Auditor: Chartered AccountantsEngagement Partner Mohammad SaleemIslamabadDate: September 26, 2011

Analysis:

This is an unqualified audit report which states that in our opinion, the balance sheet, profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof conform to the Companies Ordinance, 1984. In Our opinion, the expenditure incurred during the year was for the purpose of the Company’s business. In Our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.

Year 2010Auditor: Chartered AccountantsAudit Engagement Partner Mohammad Saleem

IslamabadDate: September 23, 2010

Analysis:

It is analyzed that it is an unqualified audit report. According to the auditor’s opinion, the balance sheet, profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof conform to the Companies Ordinance, 1984. It also give a true and fair view of the state of the Company’s affair as at of June 30, 2010.According to the auditor’s opinion the expenditure incurred during the year was for the purpose of the Company’s business and Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.

Year 2009Auditor: Chartered AccountantsAudit Engagement Partner Mohammad SaleemIslamabadDate: September 28, 2009

Analysis:

This is an unqualified audit report which states that in our opinion, the balance sheet, profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof conform to the Companies Ordinance, 1984, in the manner so required and respectively give a true and fair view of the state of the Company’s affairs as at June 30, 2009 and of the profit, its cash flows and changes in equity for the year then ended. In Our opinion, the expenditure incurred during the year was for the purpose of the Company’s business. In Our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.

Company: PSO (Pakistan State Oil)

Year 2013Auditors:M. Yousuf Adil Saleem & Co. Chartered AccountantsNadeem Yousuf Adil

KPMG Taseer Hadi & Co.Chartered AccountantsAmyn PiraniKarachi: August 28, 2013

Analysis:

In the opinion of the auditors company’s Profit and Loss A/C, Balance Sheet and Notes forming part thereof give a true and fair view of the state of the company’s affairs for the FY ended June 2013 and furthermore these documents are in accordance with the laws and regulations laid down by the Companies Ordinance 1984 and other accounting laws and regulations applicable in Pakistan.By analyzing the auditor report we can say that it is an unqualified auditor report. There are few points highlighted in the report but on the basis of those points this report is not become qualified. Those points are:

Notes 15.1 to 15.4 to the financial statements. The company considers the aggregate amount of Rs. 9,456.66 million due from Govt. of Pakistan respectively as good debts for reasons given in the notes.

Note 25.1.1 to the financial statements regarding non- accrual of mark-up on delayed payments for reasons given in the aforementioned note.

Note 25.1.2 to the financial statements regarding tax implication of Rs. 958 million on the company for the assessments years 1996-97 and 1997-98 for which the case is pending in the Supreme Court of Pakistan.

Year 2012Auditors: M. Yousuf Adil Saleem & Co. Chartered AccountantsMushtaq Ali Hirani


Analysis:

By analyzing the auditor report it can be concluded that it is an unqualified auditor report.In auditors opinion the balance sheet, profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan and give the information required by the Companies Ordinance, 1984. There are few points highlighted in the report but on the basis of those points this report is not become qualified. Those points are:

Notes 12.2, 12.3 15.1 to 15.4 to the financial statements. The company considers the aggregate amount of Rs. 56,277 million and Rs. 9,669 million due from certain power generation companies and the Government of Pakistan respectively as good debts for reasons given in the notes.

Note 25.1.1 to the financial statements regarding non- accrual of mark-up on delayed payments for reasons given in the aforementioned note.

Note 25.1.2 to the financial statements regarding tax implication of Rs. 958 million on the company for the assessments years 1996-97 and 1997-98 for which the case is pending in the Supreme Court of Pakistan.



Analysis:

This is an unqualified audit report. In their opinion, proper books of account, the balance sheet and profit and loss account, cash flow statement and statement of changes in equity together with the notes forming part thereon have been drawn up in conformity with the Companies Ordinance, 1984 and also conform with approved accounting standards as applicable in Pakistan. Furthermore these financial statements give a true and fair view of the state of the Company's affairs as at 30 June 2011 and of the profit, total comprehensive income, cash flows and changes in equity for the year then ended.However the auditors have drawn attention on few notes but due to these points the auditor’s opinion is not become qualified.

Notes 15.1 to 15.4 to the financial statements. The Company considers the aggregate amount of Rs. 14,553 million due from the Government of Pakistan as good debts for the reasons given in the aforementioned notes. The ultimate outcome of the matters cannot presently be determined

Note 25.1.1 to the financial statements. The Company has not accrued mark-up on delayed payments for reasons given in the aforementioned note. The ultimate outcome of the matter cannot presently be determined

Note 25.1.2 to the financial statements regarding tax implication of Rs. 958 million on the Company for the assessment years 1996-97 and 1997-98. The ultimate outcome of the matter cannot presently be determined


KPMG Taseer Hadi & Co.Chartered AccountantsMohammad Mahmood HussainKarachi: August 6, 2010

Analysis:

This is an unqualified audit report which states that in our opinion, the balance sheet, profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan and give the information required by the Companies Ordinance, 1984. Furthermore these financials also give a true and fair view of the state of the Company’s affairs as at 30 June 2010 and of the profit. In our opinion, no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980).Few points on which the auditors draw attention are:

Note 12.2 to the financial statements. The Company considers the overdue balance of Rs. 22,676 million from certain power generation companies as good debts for the reasons given in the aforementioned note. Accordingly, no provision for impairment has been made there against in the financial statements. The ultimate outcome of the matter cannot presently be determined.

Notes 15.1, 15.2 and 15.5 to the financial statements. The Company considers the aggregate amount of Rs. 7,419 million due from the Government of Pakistan as good debts for the reasons given in the aforementioned notes. The ultimate outcome of the matters cannot presently be determined.

Note 25.1.2 to the financial statements. The High Court of Sindh decided the pending appeals of the Income Tax Department for assessment years 1996-97 and 1997-98 against the Company, resulting in a tax liability of Rs. 958 million on the Company. The Company filed a petition for leave to appeal with the Supreme Court of Pakistan against the aforementioned decision, which was granted by the Supreme Court of Pakistan and suspended the operation of the impugned judgment of the High Court of Sindh. The ultimate outcome of the matter cannot presently be determined and no provision for the liability has been made in the financial statements.

Year 2009Auditor: A F. Ferguson & Co.

Chartered AccountantsEngagement Partner: Imtiaz A. H. Laliwala

KPMG Taseer Hadi & Co.Chartered AccountantsEngagement Partner: Mohammad Mahmood HussainKarachi: August 12, 2009

Analysis:

This is an unqualified audit report. In the opinion of auditors, company’s Profit and Loss A/C, Balance Sheet and Notes forming part thereof give a true and fair view of the state of the company’s affairs for the FY ended June 2009 and furthermore these documents are in accordance with the laws and regulations laid down by the Companies Ordinance 1984 and other accounting laws and regulations applicable in Pakistan. Furthermore in the auditor’s opinion, Zakat was deducted at source under the Zakat and Usher Ordinance, 1980 (XVIII of 1980). However the auditors have drawn attention on the following notes without qualifying report.

Note 12.2 to the financial statements. The Company considers the overdue balance of Rs. 8,766 million from a generation company as good debts for the reasons given in the aforementioned note. Accordingly, no provision for impairment has been made there against in the financial statements. The ultimate outcome of the matter cannot presently be determined.

Notes 14.1, 14.2 and 14.4 to the financial statements. The company considers the aggregate amount of Rs. 5,415 million due from Government of Pakistan as good debts for reasons given in the notes.

Note 24.1.2 to the financial statements. The High Court of Sindh decided the pending appeals of the Income Tax Department for assessment years 1996-97 and 1997-98 against the Company, resulting in a tax liability of Rs. 958 million on the Company. The Company filed a petition for leave to appeal with the Supreme Court of Pakistan against the aforementioned decision, which was granted by the Supreme Court of Pakistan through its order dated March 7, 2007. Through this order the Supreme Court of Pakistan also suspended the operation of the impugned judgment of the High Court of Sindh. The ultimate outcome of the matter cannot presently be determined and no provision for the liability has been made in the financial statements.

Company: OGDCL (Oil and Gas Development Company Limited)

Year 2013Auditor: KPMG Taseer Hadi &Co. Chartered Accountants

Yousuf Adil Saleem & Co.Chartered Accountants

Analysis:

In their opinion company’s Profit and Loss A/C, Balance Sheet and Notes forming part thereof give a true and fair view of the state of the company’s affairs for the FY ended June 2013 and furthermore these documents are in accordance with the laws and regulations laid down by the Companies Ordinance 1984 and other accounting laws and regulations applicable in Pakistan.

However the auditors have drawn attention to Note 19.1 to the Financial statements wherein it is stated that company has paid Rs.3180 million to FBR under protest on account of sales tax demand raised in respect of capacity invoices from Uch Gas Field for the period from July 2004 to March 2011. The Supreme Court of Pakistan has finally decided the issue against the company on 15 April 2013. The FBR has granted time relaxation to the company for issuance of Debit note amounting to Rs.750 million which has been challenged by the consumer of gas. The company based on its legal counsel advice, believes that relaxation for issuance of debit note for the remainder amount shall also be granted and the matter will be decided in favor of the company and the burden of sales tax will be passed on to the consumer.

Year 2012

Auditor: KPMG Taseer Hadi &Co. Chartered Accountants


Analysis:

In their opinion company’s Profit and Loss A/C, Balance Sheet and Notes forming part thereof give a true and fair view of the state of the company’s affairs for the FY ended June 2013 and furthermore these documents are in accordance with the laws and regulations laid down by the Companies Ordinance 1984 and other accounting laws and regulations applicable in Pakistan.However the auditors have drawn attention to Note 18.1 to the Financial statements wherein it is stated that trade debts include an amount of Rs.92, 878 million receivable from oil refineries and gas companies and they have also drawn attention to Note 16.3 to the Financial statements wherein it is stated that long term receivable amounting to Rs.606.937 million has not been paid by KESC Limited in accordance with settlement plan though recovery of these debts have been slow due to circular debt issue the company considers the amount as fully recoverable.


Yousuf Adil Saleem & Co.

Chartered Accountants

Analysis:

In their opinion company’s Profit and Loss A/C, Balance Sheet and Notes forming part thereof give a true and fair view of the state of the company’s affairs for the FY ended June 2013 and furthermore these documents are in accordance with the laws and regulations laid down by the Companies Ordinance 1984 and other accounting laws and regulations applicable in Pakistan.

However the auditors have drawn attention to Note 18.1 to the Financial statements wherein it is stated that trade debts include an amount of Rs.45, 072 million receivable from oil refineries and gas companies and they have also drawn attention to Note 16.2 to the Financial statements wherein it is stated that long term receivable has not been paid by KESC Limited in accordance with settlement plan though recovery of these debts have been slow due to circular debt issue the company considers the amount as fully recoverable.

Year 2010

Auditor: KPMG Taseer Hadi &Co. Chartered Accountants


Analysis:

In their opinion company’s Profit and Loss A/C, Balance Sheet and Notes forming part thereof give a true and fair view of the state of the company’s affairs for the FY ended June 2013 and furthermore these documents are in accordance with the laws and regulations laid down by the Companies Ordinance 1984 and other accounting laws and regulations applicable in Pakistan.However the auditors have drawn attention to Note 18.1 to the Financial statements wherein it is stated that trade debts include an amount of Rs.58, 159 million receivable from oil refineries and gas companies though recovery of these debts have been slow due to circular debt issue the company considers the amount as fully recoverable.



Analysis:

In their opinion company’s Profit and Loss A/C, Balance Sheet and Notes forming part thereof give a true and fair view of the state of the company’s affairs for the FY ended June 2013 and

furthermore these documents are in accordance with the laws and regulations laid down by the Companies Ordinance 1984 and other accounting laws and regulations applicable in Pakistan.The comparative figures in the financial statements include balances of Pirkoh Gas Company (Pvt) Ltd formerly wholly owned subsidiary of the company which were audited by M/s KPMG Taseer Hadi and Co. Chartered Accountants as sole auditors whose report dated 19 Aug 2008 expresses an unqualified opinion.

Company: Attock Petroleum Limited

Year 2013Auditor: A.F. Ferguson & Co.Chartered Accountants

M. Imtiaz Aslam & Co.Chartered Accountants

Analysis:In this report company’s Profit and Loss A/C, Balance Sheet and Notes forming part thereof give a true and fair view of the state of the company’s affairs and furthermore these documents are in accordance with the laws and regulations laid down by the Companies Ordinance 1984 and other accounting laws and regulations applicable in Pakistan



Analysis:In this report company’s Profit and Loss A/C, Balance Sheet and Notes forming part thereof give a true and fair view of the state of the company’s affairs and furthermore these documents are in accordance with the laws and regulations laid down by the Companies Ordinance 1984 and other accounting laws and regulations applicable in Pakistan



Analysis:

In their opinion company’s Profit and Loss A/C, Balance Sheet and Notes forming part thereof give a true and fair view of the state of the company’s affairs for the FY ended June 2011 and furthermore these documents are in accordance with the laws and regulations laid down by the Companies Ordinance 1984 and other accounting laws and regulations applicable in Pakistan.This is an unqualified report.


M. Imtiaz Aslam & Co.Chartered AccountantsAnalysis:

In their opinion company’s Profit and Loss A/C, Balance Sheet and Notes forming part thereof give a true and fair view of the state of the company’s affairs for the FY ended June 2010 and furthermore these documents are in accordance with the laws and regulations laid down by the Companies Ordinance 1984 and other accounting laws and regulations applicable in Pakistan.This is a qualified report with statement expect for the changes as stated in note 3.1 with which they concur.



Analysis:

In their opinion company’s Profit and Loss A/C, Balance Sheet and Notes forming part thereof give a true and fair view of the state of the company’s affairs for the FY ended June 2009 and furthermore these documents are in accordance with the laws and regulations laid down by the Companies Ordinance 1984 and other accounting laws and regulations applicable in Pakistan.This is an unqualified report.

.

SHELL PAKISTAN

ANALYSIS OF AUDITORS' REPORT TO THE MEMBERS 2012



Companies Ordinance 1984 and other accounting laws and regulations applicable in Pakistan.This is a qualified report with statement expect for the changes as stated in note 3.1 with which they concur. The balance sheet and statement of comprehensive income together with the notes thereon have been drawn up in conformity with the Companies Ordinance, 1984, and are in agreement with the books of accounts and are further in accordance with accounting policies consistently applied except for changes as stated in note 2.1.4 (a) to the financial statements with which we concur



Analysis:My analysis on these statements based on our audit report by A. F. Ferguson & Co. Chartered Accountants belong to Karachi, Date: March 19, 2013 with engagement Partner: Imtiaz A. H. Laliwala is that audit report belongs to balance sheet, statement of income, statement of changes in equity and statement of cash flows together with the of Shell Pakistan Limited as at December 31, 2012. This audit includes assessing the accounting policies and significant estimates made by management and they report that:

• proper books of accounts have been kept by the Company as required and the expenditure incurred during the year was for the purpose of the Company's business; and the business conducted, investments made and the expenditure incurred during the year were in accordance with the objects of the Company

• all the financial statement give a true and fair view of the state of the Company's affairs as at December 31, 2012 and of the total comprehensive loss, changes in equity and its cash flows for the year

The Company has recognized deferred tax asset on unutilized tax losses. The reliability of this asset is dependent on the underlying assumptions and business drivers materializing as projected. The Company considers the amount due from the Government of Pakistan in respect of petroleum development levy and price differential on imported purchases and high speed diesel, respectively, as current assets. The Company considers this aggregate amount receivable from the Government of Pakistan in respect of price differential on imported motor gasoline as a good debt for reasons given in the note hence the ultimate outcome of the matter cannot presently be determined.



In this report the auditor said that, proper books of account have been kept by the Company as required by the Companies Ordinance, 1984, and all financial statement are in agreement with the books of account in accordance with accounting policies consistently appliedThe expected timing of the recoverability of these receivables and its consequential impact on their classification in the balance sheet cannot presently be determined. The reliability of this asset is dependent on the underlying assumptions and business drivers materializing as projected.


Sohail Hasan.Chartered Accountants

Analysis:

My analysis is based on audit report by A. F. Ferguson & Co. Chartered Accountants belong to Karachi, Date: March 16, 201 with engagement Partner: Sohail Hasan. The report is about balance sheet of Shell Pakistan Limited as at December 31, 2010 and the related profit and loss account, statement of changes in equity and statement of cash flows together with the notes necessary for the purposes of our audit.In this report the auditor said that, proper books of account have been kept by the Company as required by the Companies Ordinance, 1984, and all financial statement are in agreement with the books of account in accordance with accounting policies consistently applied

Without qualifying the Note 16.4, 16.1 and 16.2 to the financial statements says that the Company considers the aggregate amount, receivable from the Government of Pakistan. The expected timing of the recoverability of these receivables and its consequential impact on their classification in the balance sheet cannot presently be determined. The reliability of this asset is dependent on the underlying assumptions and business drivers materializing as projected.

Year 2008Auditor: A.F. Ferguson & Co.Chartered AccountantsM. Imtiaz Aslam & Co.

AnalysisIn this report the auditor said that, proper books of account have been kept by the Company as required by the Companies Ordinance, 1984, and all financial statement are in agreement with the books of account in accordance with accounting policies consistently appliedThe expected timing of the recoverability of these receivables and its consequential impact on their classification in the balance sheet cannot presently be determined. The reliability of this asset is dependent on the underlying assumptions and business drivers materializing as projected.

Documents

analysis of different sectors of economy