Internship project:

National Refinery ltd

Supervisor
Dr: Rabia Luqman
Lecturer (Management sciences)

Submitted by:
Anas Ali

CIIT/FA17-BAF-013/VHR
BS (AF) (2017-2021)

Department Management Sciences

Comsats University Islamabad (Vehari campus)

Page | 1
 Dedicated
To
My Teachers, lovely Parents
And
To my respected supervisor

LETTER OF UNDERTAKING

Page | 2
I………………………...……Student ID……………….………………. hereby confirm that the

Internship project I have provided is solely my own effort. I did not copy my project partially or
completely from any other student or from any other source either against payment or free and I
did not provide any plagiarized material in any section of my project. I further confirm that the
documents (internship completion certificate & evaluation form) that I have provided are genuine
(i.e. not forge/fake) and have been issued by the authorized person in the organization. If I am
found guilty of misstating, misleading or concealing the facts about my activities (either
academic or non-academic but relevant to this course) at any stage, the university is authorized to
take disciplinary action against me according to university policies and regulations.

I hereby also confirm that I have carefully read and understood all the guidelines, rules and
regulations provided by the course instructor or supervisor. I assure that I will follow the
instructions regarding presentation & viva voce and will appear on the scheduled date for
presentation & viva voce which will be intimated to me by the Course Instructor or supervisor. In
case of any negligence, I shall be held responsible.

Name………………………………..
Signature……………………………
Date…………………………………

Certificate

It is certified that Sana Shabbir, Registration No. CIIT/FALL 17-BSAF- 015/VHR has carried out
all the work related to this internship project under my supervision at the Department of

Page | 3
Management Sciences COMSATS Institute of Information Technology, Vehari Campus and the
work fulfills the requirement for award of BSAF degree.

Date: 20th November, 2020.

Supervisor:

……………………………………

Dr. Rabia Luqman

Acknowledgement

First I would like to thanks the Almighty Allah whose blessing helped me to finalize the project. I
would pay special regards to my supervisor for guide me to prepare the project. I wish to show

Page | 4
my gratitude to my supervisor Dr Rabia Luqman. I am highly thankful to my
supervisor, who supported me and guided me throughout the project.

I wish to thanks my friends and class fellows for helping me to finalize the
project. I wish to thank all the people whose assistance was a milestone in the completion of this
project. I am also thankful to all those people who provided their valuable ideas through their
participation.

National Refinery ltd

Executive summary:

Page | 5
  National refinery ltd. was established and incorporated in Pakistan onAug19, 1963 as
public ltd company. The company is engaged in manufacturing, production and selling of
petroleum products. The registrar office of the company is located at CDC house 99-B
block- ‘b’ S.M.C.H.S., main Sharah-e-Faisal Kaachi-7400.
 The shares of the company are registered in Pakistan stock Exchange. National refinery
ltd having the 117400 trading shares volume. National Refinery ltd are in good books of
Pakistan stock Exchange
 National Refinery ltd engaged in manufacturing and supplying of wide range of fuel
products, lubes, BTX, asphalts and specialty products for domestic production and
exports. National refinery ltd are strive to achieve sustainable productivity and
profitability and high standards of safety. National Refinery ltd are also very concerned
about occupational health and environmental care In this challenging global environment
corporate objective and development strategy have been defined to meet challenges.

National Refinery ltd provides the quality products to our customers at competitive price.
National Refinery ltd generates the new ideas and creative approach to upgrade and update the
refinery process. National refinery ltd believes in enhancing the profitability to the maximum
therefor the all shareholders and employees could gain benefits from all it.

National refinery ltd management are more willing to meet their social responsibilities towards
the community around us. Company are also committed to meet health, safety and other
environmental requirements.

The company’s manufacturing activities are in line of Government environmental laws and
company procedure and safe work practices to support environment protection.

National refiner ltd are also contribute to in national efforts to attaining sustainable self-efficiency
in petroleum products. National refinery ltd are also working on career development by training
facilities and technological exposure to modern technologies. Company prepare the emergency
response plain (ERP), implemented, and conducted drills in order to train the manpower. It also
focusing on balancing and modernization of energy conversion and enhancing of yield of value

Page | 6
added products. It also ensure to reasonable return of shareholder by existing and future projects.
National refinery ltd are maintaining to modern management system confirming to international
standards.

National refinery ltd continuously expanding its diversifying oil refining business, which ranges
from crude oil refining, lube base oil production and some exports. As a market leader the NRL
carries out its environmental care activities to become environmental friendly energy enterprise
country.

National refinery ltd also ensure to the implementation of (IMS) integrated management system
based on ISO and auditing standards. National refinery ltd prepare the financial statements in
more realistic and reliable way. The reports are prepared and assured by external ANM through
NQA certification ltd.

Page | 7
 Table of Contents
a. Tittle page 1
b. Dedication 2
c. Letter of undertaking 3
d. Certificate 4
e. Acknowledgment 5

Executive summary 7
1. Introduction 09
2. Background 09
3. Business operation 10-11

3.1. Mission and Vision 10

3.2. Business structure 11
3.3 Marketing strategy 11
3.4. Business segments and capacity 12
3.4.1. Ongoing business projects 12
3.4.2 Completed projects 12
3.5 Reports objectives 13

3.6 Financial report analysis 13-23

3.6.1) Liquidity ratios 14
3.6.2) Turn over ratios 16
3.6.3) Profitability ratios 18
3.6.4) Marketability ratio 21
3.7.5) Leverage ratios 23

4) Learning 24
4.1) Accomplishments 25
4.2) New knowledge acquired 25
4.3) Problems faces 25
4.4) Experience 26

5) Conclusion 26
5.1) Economic events and effects: 27
5.2) Risk and uncertainties 28
5.3) Credit ratings 29

6) Suggestions and recommendations 30

7) References 31

8) Evaluation form 32

Page | 8
1) Introduction:

National refinery ltd was incorporated in Pakistan on Aug 19, 1963 as a public limited
company and its shares are listed on Pakistan stock exchange.
Company’s line of business is manufacturing, production and sale of large range of petroleum
products

National refinery ltd going ahead with the 1171 employees across of all its locations. Refinery
complex and its registrar office is situated at 7-B Korangi industrial area Karachi. The company
comprises three refineries, consisting of two lube refineries.

Stock in trade as at June 30, 2019 comprises of crude oil and condensate amounting to Rs 8750
million, Rs 4965 million, Rs 11952 million respectively. For determination of stock volume in
trade as at June 30, 2019 the company conduct 100% count

2) Background:
National refinery ltd is the largest petroleum refining complex of Pakistan and
comprise of three refineries and BTX plant located in industrial zone of Karachi Metropolitan
Area South East of Karachi.
The company was incorporated on Aug 1963 as a public company ltd. It was nationalized under
economic reform order in January 1972.In 1998 the corporate control of NRL was transferred to
the ministry of petroleum and natural resources and in June 2005 the NRL was privatized through
privatized commission of Pakistan.

Management control was transferred to Attock oil group of companies through sales of 51%
equity stake of the company. The management commenced its production in 1966 having design
capacity of 76200 tons of lube base oils and 110000 asphalt per year

In 1974 a turnkey agreement was signed between National refinery ltd and Industrial export
import (IEI). In 1990 the processing capacity was further increased to 2.2 million tons per year.
Overs the year the demand of lube based oil increased and need was to enhance the production of
LBO.

At present the NRL is the sole producer of LBO with a combined achieved production capacity of
190000 tons/year of its two lube refineries.

Page | 9
 3) Business operations:

NRL carries out their business operations by valuing to lifestyle, customer

satisfaction with honesty and integrity. NRL dealings at fair bases within the organization and
outside the world.

NRL having the major core values comprises on teamwork and responsibility, customer
satisfaction, continuous improvement, focusing on profitability enhancing.

 3.1) Mission and Vision of National refinery ltd:

“NRL’s passion is to attaining the distinctive leadership amongst the

corporate success stories of tomorrow”

Mission:

o To remain the premium and preferred supply of source of petroleum products.

 Delivering strong return on present and projected investments.
 Being a responsible citizen serving the community through variety of socio economic
acts.
 Business development by emerging technologies, growth in professional competence.

 3.2) Business structure

National refinery ltd has run under Chief executive officer by Executive committee. The board of
director has a chairman. All functional departments report to Chief executive officer.

The management of the company taken by the Attock group of companies in 2005. The National
refinery ltd also associate with the following companies.

Page | 10
The group emerged with the following component Companies:

1. Pakistan Oilfields Limited www.pakoil.com.pk

2. Attock Petroleum Limited   www.apl.com.pk

3. Attock Refinery Limited  www.arl.com.pk

4. Attock Cement Pakistan Limited  www.attockcement.com

5. National Refinery Limited  www.nrlpak.com

CEO and Board of directors

Mr. Jamil A Khan is the (CEO) Chief Executive Officer of the National refinery ltd .The
company’s board of director consists of seven director out of which two independent, two
Executive directors and three non-executive directors. There is any female director of the
company.

Audit committee

The audited committee consists of three members. Audit committee includes the:

 Mr-Tariq Iqbal khan (Chairman)

 Mr-Babr Bashir Nawaz (Alternate)
 Mr-Abdus Sitter

 3.3) Marketing strategy:

National refinery ltd is bound to sell its fuel refinery products to PSO, at price determined
by federal Government. Recently NRL lunched the marketing firm with the name of national
oil marketing which 100 percent owned subsidiary of NRL. But after change of ministry the
marketing company stopped to help PSO. NRL faces tough competition by imported lube oil
products that are available in country at low prices.

Page | 11
  3.4) Business segments and capacity:

NRL comprises two segments lube and refinery which have different capacity.

Fuel segment which include the motor gasoline, high speed diesel, light diesel, jet fuels and
kerosene oil, furnace oil etc. In February 1990 the NRL fuel refinery having the 16500000 barrel
per year capacity of crude oil processing. After second RE-Vamp design capacity enhance to
17490000 barrel per year crude oil processing in March 2017.

There are two lube refineries by which one having 533400barel per year capacity of lube base oil
processing and second lube based oil refinery 700000 barrel per year capacity in January 1996.
But after the second RE-Vamp the capacity further increased and reached at 805,000 barrel per
year of lube based oil.

Promotion is not directly or clearly linked to performance and usually follows traditional
practices of public sector organizations. Consequently there is no motivation to participate more
than what is necessary.

 3.4.1) Ongoing projects:

NRL planned to enhance the installed crude oil processing capacity of

lube base oil refinery processing from 12050Barrel per stream day to 17000 (bpsd) and vacuum
capacity from 5200 to 6600 (bpsd). The contract has been awarded to Chania National
Engineering No-6 Company of China. Its completion is expected to be in January 2020. There are
also further projects that under progress like replacement of fuel refinery and it also completed by
January.

 3.4.2) Completed projects:

NRL also complete the works at installation of Air-preheater that is an

energy saving and environment friendly the project has been completed in 2018 at a cost of Rs
425, million.

Page | 12
 3.5) Reports Objective:

The reports having the objective to make analysis of financial statements of

National refinery ltd. We also further compare the financial performance and figures with current
and previous years. We also incorporated the factors of performance. We studying about the
companies risk and opportunities, economic and international factors that effecting to
performance of company.

3.6) Financial report analysis:

According the auditors opinion the financial statements of National refinery ltd are making
according the best practices that mentioned in the code of conduct of company. Financial
statements for year ended 30, June 2019 are also compliance with companies Act 2017
regulations for listed companies.

According the auditor the all financial statements are made according to the IAS international
accounting standards as applicable in Pakistan. The financial statements gives the true and fair
view of company’s state of affairs.

For assessment and differencing the current and previous performance performing the following
analysis and determine the different ratios.

Ratios analysis:
 Liquidity ratios
 Profitability ratios
 Market ratios
 Turnover ratios

3.6.1) Liquidity Ratios:

Page | 13
The liquidity ratios measure the ability of how company use its quick cash to pay off their current
liabilities immediately.

 Current ratio:

= Current assets / current liabilities

2019 2018
37489001 / 42000571 127547962 / 22,206011

0.89 times 1.24 times

Interpretation:

Current ratio benchmark is that current ratio would be better between 1 and 1.5. so if the
current ratio greater than 1.5.its means that the company do not sue the extra assets
efficiently. In contrast if lower than 1.5 means company don’t having ability to meet
liabilities

The company have not ability to paying the current liabilities by the current assets. In 2018 NRL
having the enough current assets to paying the current liabilities. The company in 2018 could
paying his obligation 1.24 times than now 2019.

The jumping of current ratio from 1.24 to 0.89 indicates that there major risk and uncertainties
faces by company. There are large gap between account receivable and payables. There are
operational risks that cause of decreeing the current ratio.

Page | 14
  Working capital:

=current assets - current liabilities

2019 2018
37489001-42000571 127547962-22206011
(4511570) 105341951

Interpretation:

So the working capital in lower in 2019 than 2018 because the current assets
are not sufficient to meet the current liabilities. Reason behind is that may be the company
make the large borrowings and loose the assets. So we assess the working capital ratio is
lower or not by current ratio. If the current ratio is lower than 1 that its means that company
do not having the assets to meet the current liabilities.

 Quick ratio:

=Current assets-Inventor/Current labilities

2019 2018
37489001 - 25668594 / 42000571 27547962 - 12627661 / 22206011

0.28 times 0.67 times

Interpretation:

It measure the company’s ability to meet the current debts by most liquid assets. Quick
ratio means the company could meet the current liabilities 0.67 time instantly in 2018 without

Page | 15
selling the anything and .28 time times in 2019, which indicated the loose the ability to meet the
current liabilities in 2019 by 2018.

Quick ratio mostly depends on the account receivable and account payable. Because if companies
can receive the account receivable fastly than company meet the current liabilities.

For making the healthier quick ratio company needs to improve the credit terms. They neet to set
90 days of payments for receivables rather than the 120 days.

There are major contribution of economic events devaluation of Rs make the cause of increasing
gap between payments volume and receivable volume

 Cash ratio:

= cash in hand - short term investments / current liabilities

2019 2018
978680+34610 / 42000571 541837+16915 / 22206011
0.02 times 0.02 times

Interpretation:

Cash ration indicates that how much time takes company make the repayments of loans or debts.
Cash ratio is important for creditor who gives the loans to company. They need to know what
percentage of company current liabilities could cover theses near cash. NRL faces major
challenge of foreign payments due to price declining. Companies hits very badly. Due to huge
difference b/w prices of products foreign and internal country prices. Companies’ can’t make

Page | 16
repayments to creditors. Economic condition and further Covid-19 cause the shirking of demands
of products that cause in decline of sells.

Due to same economic condition and next serious condition and effect Covid-19 there are not
improvement in cash ratio.

3.6.2) Turnover ratios:

 Account receivable turnover ratio:

=Gross receivable / net sales/365

Gross receivable= Net receivable + allowance

2019 2018
7499049+7832 / 160906/365 7986214+7832 / 136984240/365

Ans: 17.32 days An: 21.300 days

Interpretation:

It indicate that how much the company efficient to collect their account receivable.
Account receivable should be high. High account receivable turnover ratio meant how many
times the company collect their receivables.

If we calculate in days, days should be minimum means that the company ca be collect their
receivables in minimum days. So in calculation the company collect their payments by customer
in minimum time in 2019 year than 2018.

It indicates that company makes the credit sells term strong and improve in assessing the market
and economic conditions. So NRL in account receivable turn ratio are efficient than previous.
Now the company collect their payments in 17 days than 21- days.

 Total assets turnover:

=Net sales / total assets

2019 2018

Page | 17
 160906197 / 76167350 136984940 / 65814271

Ans: 2.11 times Ans: 2.08 times

Interpretation:

Total assets turnover ratio indicate that company how much earn against the total assets.
How much time greater earned against the total assets. Total assets turnover ratio denotes the
efficiency of utilization of total asset.

So the national refinery ltd also use their available assets efficiently in 2019 than 2018. There are
both assets and sells greater in 2019 than 2018. There are 2.11 times generate the sells by total assets
in 2019 which is greater than 2.08 times in 2018.

 Fixed assets turnover:

=Net sales / fixed assets

2019 2018
160906197 / 35695334 136984940 / 37718722

Ans: 4.51 times Ans: 3.63 times

Interpretation:

Fixed assets turnover ratio indicate that the fixed assets contribution in generating sells.
Higher turnover ratio indicates the efficiency in usage of existing fixed assets. That’s mean that
the management make the significant investments in fixed assets and makes best utilization. So
National refinery ltd also efficient in usage of fixed assets and wise investment of like these fixed
assets. National refinery ltd 4.51 times efficient in 2019 than 3.63 times in 2018. Although the
fixed assets are lessor in 2019 than 2018.

3.6.3) Profitability ratios:

Page | 18
  Net profit margin:

=Net profit / net sales

2019 ( billion) 2018 ( billion)

(8692) / 160906 1771 / 136985

Ans: (5.40)% Ans: 1.29%

Interpretation:

Net profit margin indicates the percentage of profits to revenue. It tell us what percentage
of profits earned by the revenue. National refiner ltd having the huge loss in 2019.The fuel
segment are suffered the losses of 9.59 Rs billion in current year as compared to loss of Rs 2.21
billion in last 2018 year. It is due to prices difference in international markets and international
crude oil prices are remained very slim. Monthly crude oil prices are decline from $ 80.9 per
barrel in October 2018 to $ 58.9 per barrel being the lowest in month December 2018. The
difference of US dollar exchange rate cause the net profit margin in negative

 Return of equity:

=net income / shareholder equity

2019 2018
(8692) / 33874 1771 / 43252

Ans: (25.66)% Ans: 4.09%

Interpretation:

Return to equity indicates the contribution of equity portion of capital in generating the income.
The percentage of earnings that we gained by equity capital

National refinery ltd suffering the loss and having the net income in negative income.

Return to equity ratio is alarming ratio for the existing investors. They also suffer the loss.
Therefor the investors should be better forecast not only company performance but also the

Page | 19
economic condition. The ratio tell to potential investors that whether they should be invest or not.
It would be very helpful fir decision making about investments. The lube segment earned the
profits 0.90 billion as compared to Rs. 3.9 billion for previous year .The margin in lube segment
due to increase in feed cost and asymmetrically increase of product prices.

Sells in 2019 oil products are no highly increases as compared to 2018. Due to highly oil prices
the gap is captured by selling price of products. In 2019 the sales of refinery sectors decreased by
25% according to Dawn news of 11 June 2019. (https://www.dawn.com/news/1487472)

 Gross profit margin:

=Gross profit / net sales

2019 2018

(4449) / 160906 3812 / 136985

Ans: (2.76)% Ans: 2.78%

Interpretation:

Gross profit margin indicates that the companies earning against the cost of goods sold. Cost of
goods sold includes the labor, material and production resources. Gross profit margin indicates
the efficiency in usage of cost of labor, material. As we seeing that gross profit margin of national
refinery ltd in 2019 could work efficiently. There are deficiency of expertise in material purchase
and management and in production process. The gross profit margin increase and decrease is
depend on the cost of goods sold.

 There are major change in gross profit margin that goes negative 2.76% from positive
2.78%. There major contribution of increasing the international prices in all this scenario.
According to survey the quantity of crude oil imported remained 6.6 million tones valuing
$ 3.4 billion as compared to the quantity of 7.8 million tones valuing $ 2.9 billion during
the same period last year. The decline was due to the increasing international prices.
 Operating profit margin:

Page | 20
=operating profit / net sales

2019 2018
(5743262) / 160906 2672943 / 136985

Ans: (3.56)% Ans: 1.95%

Interpretation:

Operating profit margin indicated what percentage of gross profit earned against the
operating expenses. Initially the gross are in negative value but the operating expenses are very
less valuing Rs.17590 thousand as compared to Rs.77453 thousand for last previous year and
other administrative expenses are also decline. Its means that the company is successful to control
their administrative expenses in challenging era. NRL incurred the high distribution in 2019
valuing Rs. 814479 thousand as compare to previous year valuing Rs. 756506 thousand. In 2019
giving the more commission to boost up the local sales.

3.6.4) Marketability ratios:

 Earnings per share:

=Earnings / outstanding shares or weighted average no of shares

2019 2018
8692427 / 79967 1770684 / 79967

Ans: (108.70) Rs Ans: 22.14 Rs

Interpretation:

Earnings per share indicate that investors how much against one shares investment. The company
incurred the loss of 8.69 billion after tax deduction. That why the share value could not increase
because the overall performance of company is very bad due to economic conditions. Economic
condition in 2019 not remains beneficial for all industrial sectors. The devaluation of Pakistan
Rupees currency against Dollar. The uneven margins of price vs products crude oil paly adverse
role in profitability of NRL.

If the company having highest profits than investors willing to mare against one share and
company got the more finance by equity financing. Now the companies’ profits are in negative so

Page | 21
the investor not willing to pay but they sell their stocks if they having potential to grow than they
hold.

 Price earnings ratio:

= Market value of share / earning per share

2019 2018
113.048 / 108.70 448.24 / 22.14

Ans: 1.04 times Ans: 20.01 times

Interpretation:

Price earnings ratio indicates the whether the stock over valued or undervalued and expectations
of investors. If high PE ration men that investors expecting the higher growth rate as compared to
lower PE ratio. Higher PE values indicates that stock price is high against the earnings in other
word the stock price is overvalued

So NRL PE price are in negative and lower as compared to previous year its mean that stock is
undervalued and there are chances to grow in future. In investment point of view the investors
wants to invest in National refinery ltd.

 Dividend per share:

=Total dividend / no of shares

2019 2018
Dividend not paid 10 Rs dividend per share

Page | 22
Interpretation:

Dividend per share indicate wheatear the company issued the dividend or not. Dividend
per share is the earning that seeks from excess earnings of company. If the company performing
well and gain profits than issued the dividend to their investors.

Investor before investing also seeing the dividend announcements news in news and analyses. So
in 2019 NRL suffered the huge loss therefor the company do not issued dividends as compared to
2018 valuing Rs.10 per share

3.6.5) Leverage ratios:

 Debt ratio:

=long term debt / total assets

2019 2018
Debts= 0 Debts= 12870
0 / 76167350 12870 / 65814271
Ans: 0 % Ans: 0.019 %

Interpretation:

The debt ratio indicates the leverage of the company. It tells us about what percentage of assets
that finance by the debt. Debt ratio vary with the industry. Those companies that have the volatile
cash flows, for them higher debt ratio would be alarming. But the National refinery ltd do not lies
in those type of companies. During the higher volatility in return nowadays the debt ratio must be
low. So National refinery ltd limited having the 0 % debt in 2019 as compared to 2018 0.019 %
because company payoff all their debts.

The decline of debt ratio as much is also not beneficial for the company. Because debts also came
with opportunities and cause of decline in financing risk.

 Equity ratio:

= shareholder equity / total assets

2019 2018
33873469 / 76167350 43251537 / 65814271
Ans: 44.47 % Ans: 65.72 %

Page | 23
Interpretation:

Equity ratio indicates that how much company’s assets are generated by equity financing. The
ratio represent the assets for which the shareholder have residual claim. National refinery ltd
having the equity ratio in 2019 44.47% and 65.72% in 201

 Debt to Equity ratio:

=debt / shareholder equity

2019 2018
0 / 33873469 12870/ 4325153
Ans: 0% Ans: 0.019%

Interpretation:

Debt to equity ratio indicate the proportion of debt and equity financing. It is ratio for the lender
or creditors who lend the money to companies. A higher debt to equity ratio is alarming for
lenders because they feel insecure and lower ratio is beneficial for them.

So the national refinery ltd having the lower debt to equity ratio both years. In 2019 there are debt
financing therefor the debt to equity ratio is 0 as compared to .019 % in 2018.

Page | 24
 Vertical and horizontal analysis

Vertical statement of financial position

Vertical statement of profits loss
Horizontal statement of financial position
Horizontal statement of profits loss

Page | 25
Vertical and horizontal analysis:

Vertical statement of financial position:

2019 2019 2018 2018

Rupees (million) Rupees (million) Rupees (million) Rupees (million)

Assets

Non-current assets
Fixed assets 35695.33 46.95% 37718.72 100%

Long term investments 13.35 - -

Long term loans 49.72 0.1% 54.21 100%
Long term deposits 30.27 0.00% 30.27 100%
Deferred taxation 2874.07 3.8% 456.85 100%
Retirement and benefits 15.61 0.0% 6.27 100%
Total 38678.35 50.8% 38266.32 100%

Current assets

Store spares and chemicals 1572.57 2.1% 1501.86 2.3%

Stock 25668.59 33.7% 12627.66 19.2
Receivables 7499.05 9.8% 7986.21 12.1%
Loans 31.40 0.0% 58.25 0.1%
Trade deposits 34.61 0.1% 16.92 0.0%
Interest 14.22 0.0% 7.39
0.0%
Other receivables 1662.81 2.2% 3569.87 5.4
Taxation 27.07 0.0% 1237.95 1.9%
Short term investments - - - -
Cash 978.68 1.3% 541.84 0.8%
Total current assets 37489.00 49.2% 27547.95 41.8%
Total assets 76167.38 100% 65814.27 100%

Owner equity and Liabilities

Share capital 799.67 1.1% 799.67 1.2%

Reserve 33073.80 43.4% 42451.87 64.5%
Total 33873.47 44.5% 43251.54 65.7%
Non-current liabilities

Long term borrowing - - 12.87 -

Benefits 293.31 0.4% 343.85 0.5%
Current liabilities
Payables 16418.26 21.6% 20550.99 313%
Dividend payable 97.01 0.1% 92.00 0.1%
Markup 365.04 0.4% 33.78 0.1%
Provisions 112.36 0.2% 112.36 0.2%
Borrowing 25007.90 32.8% 1340.27 2.0%
Current of long term borrowing - - 76.61 0.1%
Total 42000.57 55.1% 22206.01 33.8%

Page | 26
Total equity and liabilities 76167.35 100% 65814.27 100%

Vertical statement of profit and loss

2019 2019 2018 2018

(Rupees in million) (Rupees in million) (Rupees in million) (Rupees in million)

Revenue 160906.20 100% 136984.94 100%

Cost of sale (165355.34) -102.0% (133172.93) -97.2%

Gross profit/loss (4449.14) -2.8% 3812.01 2.8%

Distribution cost (814.48) -0.5% (756.51) -0.5%

Administrative expenses (831.56) -0.5% (863.19) -0.6%

Other income 369.51 0.2% 558.08 0.4%

Other operating expenses (17.59) 0.0% (77.45) -0.1%

Operating profit/ loss (5743.26) -3.6% 22672.94 2.0%

Finance cost (5285.75) -3.3% (1765.61) -1.3%

EBIT (11029.01) -6.9% 907.33 0.7%

Taxation 2336.58 1.5% 863.35 0.6%

Profit/loss after tax (8692.43) -5.4% 1770.68 1.3%

Page | 27
 Horizontal statement of financial position

2019 2019 2018 2018

Rupees (million) Rupees (million) Rupees (million) Rupees (million)

Assets

Non-current assets
Fixed assets 35695.33 94% 37718.72 100%

Long term investments 13.35 - -

Long term loans 49.72 91% 54.21 100%
Long term deposits 30.27 0.00% 30.27 100%
Deferred taxation 2874.07 629% 456.85 100%
Retirement and benefits 15.61 248% 6.27 100%
Total 38678.35 101.8% 38266.32 100%

Current assets

Store spares and chemicals 1572.57 104% 1501.86 100%

Stock 25668.59 203% 12627.66 100%
Receivables 7499.05 938% 7986.21 100%
Loans 31.40 539% 58.25 100%
Trade deposits 34.61 204% 16.92 100%
Interest 14.22 192% 7.39
100%
Other receivables 1662.81 46.57% 3569.87 100%
Taxation 27.07 2.18% 1237.95 100%
Short term investments - - - -
Cash 978.68 180% 541.84 100%
Total current assets 37489.00 136% 27547.95 100%
Total assets 76167.38 115% 65814.27 100%

Owner equity and Liabilities

Share capital 799.67 0.00% 799.67 100%

Reserve 33073.80 77% 42451.87 100%
Total 33873.47 78.3% 43251.54 100%
Non-current liabilities

Long term borrowing - - 12.87 -

Benefits 293.31 85.3% 343.85 100%
Current liabilities
Payables 16418.26 79.8% 20550.99 100%
Dividend payable 97.01 105% 92.00 100%
Markup 365.04 10.8% 33.78 100%
Provisions 112.36 1% 112.36 100%
Borrowing 25007.90 1865% 1340.27 100%
Current of long term borrowing - - 76.61 100%
Total 42000.57 189% 22206.01 100%

Page | 28
Total equity and liabilities 76167.35 115% 65814.27 100%

Horizontal Statement of profit and loss

2019 2019 2018 2018

(Rupees in million) (Rupees in million)

Revenue 160906.20 100% 136984.94 100%

Cost of sale (165355.34) 124% (133172.93) 100%

Gross profit/loss (4449.14) -116% 3812.01 100%

Distribution cost (814.48) 107% (756.51) 100%

Administrative expenses (831.56) 96.35% (863.19) 100%

Other income 369.51 66.19% 558.08 100%

Other operating expenses (17.59) 22.71% (77.45) 100%

Operating profit/ loss (5743.26) 25.33% 22672.94 100%

Finance cost (5285.75) 29.9% (1765.61) 100%

EBIT (11029.01) -121% 907.33 100%

Taxation 2336.58 270% 863.35 100%

Profit/loss after tax (8692.43) -490.9% 1770.68 10

Page | 29
 SWOT analysis of National refinery Limited

Strengths:
Core values and sustainable culture:
The National Refinery ltd having the strong values and sustainable corporate culture. The
company is fully committed to reliability and efficient production.
Ethical conducting
Teamwork and responsibility
Customer satisfactions

Continuous improvement:
Company generating the new ideas to upgrade and update the to refinery to beast available
technology

Acquiring the new technology:

NRL acquired the new generation of technology for efficient production and refinery
operation for attaining the highest standards of occupational health

 Weaknesses:
Lower Capacity and imports:
Company do not having the capacity to fulfilling the demands
and low production efficiency resultantly the company engage in imports of oil and
petroleum products. The highly imports took the burden on the country’s economy. There are
other four refineries that work in Pakistan which are not able to fulfill the demand
requirements and
Gov inefficiency effects:
Gov inefficiencies to bossing the oil sector also effects badly to performance
of the companies. Economic condition are highly weak and volatile

Page | 30
  Opportunities:

Depends on Pandemic severity:

Due to decline in severity of pandemics there are possibility to betterment and coming
days would be fruitful for refinery sectors that effect in good. It depends on the pandemic
severity. According the World banks the recovery from the Covid-19 offering the
opportunities of growth and funds towards green energy and infrastructure.
https://openknowledge.worldbank.org/handle/10986/34621

Growth opportunities Due to Gov protection:

 Threats:

Financial threats:
Financial threats is that foreign competitors provides the petroleum products
because the international prices of oils markets deeply goes down and that why the domestic
production of oil effects badly and internally the operating cost and demand bases the prices
goes up.

Price rise because our economy faces the many challenges like as devaluation of currency
and current accounts deficit. So the companies having a threat prospect

Customer threats:
Customer remain always possible threat for every business. If the customers shift the
interest to alternative another products. Like now mostly countries launched the electric
vehicles that are not required oils products.
So it is log term threat for company

Oil crisis:
Initial at the start of Covid-19 effects badly to petroleum and oil markets all over the world.
So due to Covid-19 peak in whole world it is the major risk for the individual company also.

Page | 31
Instantly the prices falling in the international markets cause the high volatility of cash flows
of the company.
According to the Dawn news
Pakistanis recently witnessed a repeat of the 2015 petroleum shortage. The reason was, once
again, the falling global prices and the attempt by the oil industry to avoid inventory losses.

Page | 32
4) Learnings

4.1 Accomplishments

I doing company analysis in a calm situation. I am searching and readout the full
reports annual published by National refinery ltd and also submitted to Pakistan stock exchange. I
am studying the whole report firstly. and I am learned a lot of things.

I am learn How to read,

Comprehend, extract the information from reports

And how to compare the different financial ratios

I also visit the National refinery ltd website.

I am learn calculate the proper ration and how verifying.

So by all these learning I am become able to guess the information directly by the fianacial ratios

4.2) Knowledge acquire.

I got the knowledge about how the company’s management work practically, what are the real
issued faced by the companies in refinery sector. We got the knowledge about the history of
National refinery ltd , their corporate structure, managing actions etc

4.3) Problems faced:

I have faced the problems about searching past fully ratios that are not showing in financial
reports that are not compulsory of PSX.

Page | 33
4.4) Experience impact:

Company analysis process is a good experience for me. It is also an fatigue job to do. But my
experience to doing this job is interesting. I am performing first time like as project .So
conclusion is that I am learn very well during completing project. It shall be very helpful to me
practical life. It shall be impact my carrier fruitfully. I am facing the problems for doing the
project and learn by it.

5) Conclusion:

The overall company performance is very bad as compared to the 2018. The company suffered
the huge loss Rs.8.29 billion which have very alarming situation for the company. The company
can grow only 3.29 percent against the target growth 6.2 percent. The company performance
decline due to major management flaws and economic conditions

Profitability of company was effected by huge exchange losses due to devaluation of Pak rupees.
The oil prices are also remains inconsistent and overall segment sells also remained in under
pressure due to high inflation and Covid-19.

The national refinery perform well to generate significant net revenue but there are key factor in
decline of net revenue is cost of sale. Higher cost of sale is due to higher crude oil prices resulting
negative gross margin. The higher operating cost due to higher depreciation on recently
commissioned HSD High Speed Diesel and currency depreciation.

The financial report analysis tells us about the company performance by which we compare the
performance of current and past years.

National refinery ltd established in 1963 as public ltd company. Its 50% shareholding is held by
associated company Attock Refinery ltd and Pakistan oilfield ltd.

NRL is engaged in production, manufacturing and selling of various petroleum products. The key
fuel products are include motor gasoline, kerosene oil, and high speed diesel and furnace oil.

The financial reports are prepared according the code of conduct and international financial
reporting standards. There are performing ratios analysis.

Page | 34
Where the all profitability ratios are in negative due to net profit margin in negatives and higher
cost of sales. Further the marketability ratio are also an view of companies and financial
performance in which the company’s EPS are gone to bottom line in negatives and divided per
share also in zero Rs.

Liquidity ratios are also effected, the ability of company’s generating revenue through the near
are also decreased. But the except the account receivable all turn over ratios increase as compared
to previous years. The account receivable turn over efficiency decreased due higher prices of
crude oil.

In final year of 2018 the company makes the loss due depreciation of currency, lower return on
bank deposits, custom duty on crude oil, higher operating cost according the financial report
analysis of 2018.

We lose the profitability due to currency crash. But on positive side the some benefits gained the
price difference on high speed diesel and higher revenue occurred by increased in production and
sales. But it is not enough to cover the damages

The losses are increased in 22019 by 20 times than 2018.

So further performance of in the lube segments remained same but the demand of 11 lube base oil
segment decline in the country.

5.1) Economic events and effects:

National refinery ltd performances mostly effected by macroeconomics

instability. Government is unable to achieve the sustainability and rapid growth due to
improvement requirements of economy and it requires the effective monetary and fiscal policy.

Due to Government steps of declining the current account deficit that cause the devaluation of
Pak-rupees resultantly the inflation goes up. Due inflation rate high and lock-down the demand of
petroleum products are also decreased. So the company makes various settlements with the
Government including consistent upliftment of crude oil price mechanism that why companies
can earn reasonable returns. But the National refinery ltd are still in loss.

5.2) Risk and uncertainties:

Page | 35
The volatile of crude oils and product prices in international markets mostly results in narrow
margin. In such cases the company needs to be careful and review its production and sales
schedule to minimize the loss.

Covid-19 is the major risk that effecting to petroleum products demand and prices worldwide,
resumption of economic activity and stability of oil sector is totally depend upon the Covid-19
vaccinia innovation and brought into the market.

The company faces the exchange losses due to economic devaluation of Pak-Rs in making
payments of raw material to supplier. The Government also announced the import of Euro-V
fuels effective 2020-2021Introduction of Euro-V grade HSD will create the further opportunities
for the company.

Company also face the liquidity risks. Therefore company makes the arrangements with banks to
maintaining the sufficient cash and bank balances.

5.3) Credit ratings:

NRL in credit rating are also good means that company paid his credit payment timely and fully.
The company having the credit rating or the last six years (Long term credit rating) AA+ and
(short term) A1+ maintained according the PACRA credit rating agency. AA+ and A1+ mean
that company having the strong ability to make payments timely.

The financial report analysis tells us about the company performance by which we compare the
performance of current and past years.

National refinery ltd established in 1963 as public ltd company. Its 50% shareholding is held by
associated company Attock Refinery ltd and Pakistan oilfield ltd.

NRL is engaged in production, manufacturing and selling of various petroleum products. The key
fuel products are include motor gasoline, kerosene oil, and high speed diesel and furnace oil.

The financial reports are prepared according the code of conduct and international financial
reporting standards. There are performing ratios analysis.

Where the all profitability ratios are in negative due to net profit margin in negatives and higher
cost of sales. Further the marketability ratio are also an view of companies and financial

Page | 36
performance in which the company’s EPS are gone to bottom line in negatives and divided per
share also in zero Rs.

Liquidity ratios are also effected, the ability of company’s generating revenue through the near
are also decreased. But the except the account receivable all turn over ratios increase as compared
to previous years. The account receivable turn over efficiency decreased due higher prices of
crude oil.

In final year of 2018 the company makes the loss due depreciation of currency, lower return on
bank deposits, custom duty on crude oil, higher operating cost according the financial report
analysis of 2018.

We lose the profitability due to currency crash. But on positive side the some benefits gained the
price difference on high speed diesel and higher revenue occurred by increased in production and
sales. But it is not enough to cover the damages

The losses are increased in 22019 by 20 times than 2018.

So further performance of in the lube segments remained same but the demand of 11 lube base oil
segment decline in the country.

6) Recommendations:

The company’s should got the expertise to manage the financial risk and tackling with
environmental changes. The company should be ready for every scenario. The company should
got the expertise in managing the exchange rate effect. The company should improve the
collaboration and communication with Government stakeholder. Company also improve the
account receieveabe turnover.

Due to high prices and higher operating cost the companies should be planned the medium term
that should be export the furnace oil until Government would give the incentives in first six year
month

The company should plain the activities and makes import by taking onboard to Government
stake holder. The company should improve the relation with supplier of raw materials and makes
the cheap arrangements.

Page | 37
7) References:

https://dps.psx.com.pk/company/NRL

https://www.dawn.com/news/1487472

https://www.wsj.com/market-data/quotes/PK/NRL/advanced-chart

http://www.nrlpak.com/NewsLetter.aspx

https://www.wsj.com/market-data/quotes/PK/NRL/financials

http://www.nrlpak.com/NewsLetter.aspx

http://www.nrlpak.com/pdf/environment/NRL_Sustainability_Report_2017.pdf

https://www.marketresearch.com/GlobalData-v3648/National-Refinery-Limited-NRL-
Financial-11264650

http://www.nrlpak.com/FinancialReports.aspx

https://www.investing.com/equities/national-refin-historical-data

https://www.investing.com/equities/national-refin-ratios

Page | 38
 INTERNSHIP PERFORMANCE EVALUATION FORM

Intern’s Details

Name: ____________________________________

Evaluation Period: ____________________________________

Phone: ____________________________________

E-mail: ____________________________________

University Registration #: ____________________________________

On-site Supervisor’s Details

Name: ____________________________________

Organization Name: ____________________________________

Designation: ____________________________________

Phone/ Fax: ____________________________________

E-mail: ____________________________________

1. Quality of Work

1. Gets to internship on time and has regular attendance

Excellent Very Good Good Adequate Marginal

2. Has a positive attitude towards work

Excellent Very Good Good Adequate Marginal

3. Dresses appropriately for the work setting

Excellent Very Good Good Adequate Marginal

4. Stays with tasks until completed

Excellent Very Good Good Adequate Marginal

5. Completes tasks and assignments accurately

Excellent Very Good Good Adequate Marginal

Page | 39
6. Takes responsibility for and is committed to work

Excellent Very Good Good Adequate Marginal

2. Communication Skills & Interpersonal Effectiveness

1. Communicates clearly and concisely

Excellent Very Good Good Adequate Marginal

2. Listens effectively to and understands what other is saying

Excellent Very Good Good Adequate Marginal

3. Interacts well with organization’s staff

Excellent Very Good Good Adequate Marginal

4. Deals effectively with uncooperative or difficult people

Excellent Very Good Good Adequate Marginal

3. Problem- Solving and Decision-Marking

1. Thinks in a disciplined, logical manner

Excellent Very Good Good Adequate Marginal

2. Analyzes problems effectively

Excellent Very Good Good Adequate Marginal

3. Is able to solve problems

Excellent Very Good Good Adequate Marginal

4. Thinks of creative ideas and innovative actions

Excellent Very Good Good Adequate Marginal

5. Takes initiative, where appropriate, as problems arise

Excellent Very Good Good Adequate Marginal

4. Planning and Organization

1. Sets realistic work goals for assigned tasks

Page | 40
 Excellent Very Good Good Adequate Marginal

2. Manages time and tasks effectively

Excellent Very Good Good Adequate Marginal

3. Meets deadlines

Excellent Very Good Good Adequate Marginal

4. Follows directions

Excellent Very Good Good Adequate Marginal

5. Learning & Potential Growth

1. Takes initiative to seek out new learning experiences

Excellent Very Good Good Adequate Marginal

2. Seeks out answers to questions, when reasonable to do so

Excellent Very Good Good Adequate Marginal

3. Seeks feedback for self-improvement

Excellent Very Good Good Adequate Marginal

4. Accepts constructive criticism non-defensively

Excellent Very Good Good Adequate Marginal

5. Work to strengthen identified weakness

Excellent Very Good Good Adequate Marginal

Page | 41
 6. Suggestion/ Any other comment:

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

______________________________________________________

Date of Evaluation: ____________________ Official Stamp & Signature

Page | 42
-

Page | 43