Khwaja Fareed University of Engineering and Information

Technology Rahim yar khan

Report of shell petroleum company (Pakistan)

Submitted By

M.Muneeb

Registration No.INFT221101034

Jahanzeeb Ali

Registration No.INFT221101044

Shayan Jahangir

Registration No.INFT221101045

Submitted To

Mr. Aqeel Ahmad

Date Submission

14-12-2023

Department of Information and Technology

KFUEIT
Shell plc is a British multinational oil and gas company headquartered in London,
England. Shell is a public limited company with a primary listing on the London Stock Exchange
(LSE) and secondary listings on Euronext Amsterdam and the New York Stock Exchange. A core
component of Big Oil, Shell is the second largest investor-owned oil and gas company in the
world by revenue (after ExxonMobil), and among the world's largest companies out of any
industry.

History

The Shell brand name enjoys a 120-year history in this part of the world, dating back to 1899
when Asiatic Petroleum, the far eastern marketing arm of two companies: Shell Transport
Company and Royal Dutch Petroleum Company, began importing kerosene oil from Azerbaijan
into the subcontinent. Even today, the legacy of the past is visible in a storage tank carrying the
date - 1898. The documented history of Royal Dutch Shell plc in Indo-Pakistan subcontinent
dates back to 1903 when partnership was struck between The Shell Transport & Trading
Company and the Royal Dutch Petroleum Company to supply petroleum to Asia.

In 1928, to enhance their distribution capabilities, the marketing interest of Royal Dutch Shell plc
and the Burmah Oil Company Limited in India were merged and Burmah Shell Oil Storage &
Distribution Company of India was born. After the independence of Pakistan in 1947, the name
was changed to the Burmah Shell Oil Distribution Company of Pakistan. In 1970, when 51% of
the shareholding was transferred to Pakistani investors, the name changed to Pakistan Burmah
Shell (PBS) Limited.

The Shell and the Burmah Groups, retained the remaining 49% in equal proportions. In February
of 1993, as economic liberalization began to take root and the Burmah divested from PBS, Shell
Petroleum stepped into raise its stake to 51%. Shell Petroleum Company successively increased
its share, with the Group now having a 77% stake in Shell Pakistan Ltd (SPL).
With a legacy of 120 years in the region, developing and distributing energy by
land, air and sea, Shell has endeavoured to support Pakistan’s developmental priorities. From
providing petroleum products for the construction of mega projects like the Mangla Dam and
Kotri Barrage, to expanding the country’s growing road infrastructure, powering PIA’s first
flights or supporting the next generation of innovative entrepreneurs in Pakistan, Shell has been
part of the nation’s progress.

WHAT WE DO?

Shell is an integrated energy company that aims to meet the world’s growing demand for energy
in ways that are economically, environmentally and socially responsible

About:

Shell Pakistan Limited (SPL) has more than 850 retail stations in more than 330 cities, having
20% market share and is the largest foreign investor in Pakistan's oil marketing sector. We
employ around 400+ employees in Pakistan.

Status of Company

In 1993 Pakistan Burmah Shell became Shell Pakistan Limited that is a listed Company on
Pakistan Stock Exchange Limited. The Company Registration Number is KAR - 2687 and Tax
Registration Number is 0804143-1. The Company Incorporation Number or CUIN is 0002914.

Our Registered Office

Shell Pakistan Limited - Head office
Shell House, 6 Ch. Khaliquzzaman Road, Karachi-75530.

Shell Corporate Office Islamabad

Shell Regional Office Lahore

Shell Regional Office Multan

Shell Regional Office Faisalabad

Shell Regional Office Peshawar

Shell Shipping Office

Faisalabad, Punjab - Central

Board of Directors

Board of Directors
Name/Title Current Board Membership
Zain K. Hak
Chairman, Global VP-Agriculture & Forestry
Shell Pakistan Ltd.
Waqar I. Siddiqui
CEO, Managing Director & Executive Director
Shell Pakistan Ltd.
Zarrar Mahmud
CFO, Finance Director & Executive Director
Shell Pakistan Ltd
Vision

Be a trusted and innovative partner, collaboratively building a sustainable energy future for the
people of Pakistan.

Mission

Shell's purpose is to power progress together by providing more and cleaner energy solutions.
We believe that rising standards of living for a growing global population are likely to
continue to drive demand for energy, including oil and gas, for years to come

Values

At Shell, we share a set of core values – honesty, integrity and respect for people – which
underpin all the work we do. The Shell General Business Principles, Code of Conduct and Ethics
and Compliance Manual help everyone at Shell act in line with these values and comply with
relevant laws and regulations.

Departments
National foods is the food processing company in Pakistan. They typically have departments such
as production, marketing, sales, quality control, and administration.

1-Exploration and Production (E&P): This department is involved in finding new oil and gas
reserves and extracting them from the ground.

2-Downstream: This sector covers refining, distribution, and marketing of petroleum products. It
may include refining operations, distribution networks, and retail services.

3-Finance and Administration: This department handles financial matters, budgeting, and
administrative functions.
4-Health, Safety, and Environment (HSE): Ensures compliance with safety and
environmental regulations and establishes protocols for employee health and environmental
protection.

5-Corporate Affairs/Communications: Responsible for managing the company's public image,

handling communications, and dealing with government relations.

6-Human Resources (HR): Manages employee relations, recruitment, training, and overall
human resource functions.

7-Technology and Innovation: Focuses on research and development, technological

advancements, and innovation in the oil and gas sector

Products:
1-Gasoline
2-Diesel
3-Heating oil
4-Aviation fuel
5-Marine fuel
6-Lubricants
7- Bitumen.

Financial Data:

Financial data is information about the money-related activities and performance of an individual
or business. It includes details such as income, expenses, assets, and liabilities. This data is
essential for tracking financial health, making informed decisions, and creating budgets. Common
examples include bank statements and financial statements that offer insights into one's monetary
transactions and overall financial well-being.
Balance Sheet:

A balance sheet is a financial statement that provides a snapshot of a company's assets, liabilities,
and equity at a specific point in time. It shows what a company owns (assets), what it owes
(liabilities), and the residual interest of the owners (equity). The balance sheet follows the
accounting equation: Assets = Liabilities + Equity. It is a crucial tool for assessing a company's
financial position and its ability to meet its obligations

Balance sheet

ASSETS 2022 2021

Non-current assets

Property, plant and equipment 20,579,301 17,841,942

Right-of-use assets 6,453,393 5,896,843

Intangible assets 2,101 5,253

Long-term investments 5,198,192 4,970,295

Long-term deposits 220,100 265,766

Deferred assets 780,010 753,734

Total Non-current assets 33,284,260 29,771,273

Current assets

Stock-in-trade 42,921,597 36,628,824

Trade debts 5,910,061 4,667,468

Loan and Advances 62,784 92,160

Short term Deposits and prepayments 535,584 527,247

Other receivables 8,216,986 8,189,480

bank balances 10,801,097 4,973,417

Total Current assets 68,448,109 55,078,596

TOTAL ASSETS 101,732,369 84,849,869

EQUITY AND LIABILITIES 2022 2021

Equity

Share capital 2,140,246 2,140,246

Share premium 11,991,012 11,991,012

General reserves 207,002 207,002

Unappropriated profit 807,101 1,587,146

actuarial loss 543,266 598,930

Unrealized loss on re-measurement of equity investment

classified as fair value through other comprehensive income 5,000 5,000

Total equity 14,597,095 15,321,476

Non-current liabilities

Asset retirement obligation 321,113 173,550

Long-term provisions 2,923,281 432,768

Long-term lease liabilities 5,945,991 5,365,192

Provision for post-retirement medical benefits 178,788 170,543

Total Non-current liabilities 9,369,173 6,142,053

Current liabilities

Trade and other payables 73,703,492 60,825,752

Advances received from customers (contract liabilities) 1,442,366 1,105,953

Unclaimed dividend 278,892 293,906

Unpaid dividend 508,954 -

Accrued Markup 2,848 1,187

Taxation - net 882,792 477,857

Current portion of long-term provisions 236,964 -

Current portion of long-term lease liabilities 709,793 681,685

Total Non-current liabilities 77,766,101 63,386,340

Total Equity and Liabilities 101,732,369 84,849,869

Income Statement
An income statement or profit and loss account is one of the financial statements of a
company and shows the company's revenues and expenses during a particular period. It
indicates how the revenues are transformed into the net income or net profit.

Profit or Loss and Other Comprehensive Income

Profit and Loss Statement 2022 2021

Sales 418,592,346 282,353,611

Other revenue 750,914 811,123

Sales tax 6,644,201 33,954,750

Net revenue 249,209,984

412,699,059

Cost of products sold 379,106,173 225,543,999

Gross profit 33,592,886 23,665,985

Distribution and marketing expenses (10,281,744) (7,517,836)

Administrative expenses (7,390,232) (6,259,820)

Other expenses (14,386,220) (3,879,331)

Other income 1,739,760 575,881

Operating profit 3,274,450 6,584,879

Finance costs 1,358,252 834,770

Profit before taxation 2,915,103 6,608,506

Taxation-net 2,987,416 2,141,651

Net (loss) / profit for the year 72,313 4,466,855

Other Comprehensive Income

Items not reclassified to Profit/loss

(loss) on post-employment benefit 83,081 1,445

(loss) on post-employment benefits 27,417 419

Share of other comprehensive (loss) 65,658 7,784

total comprehensive income for the year 82,307 4,473,613

(Loss) / earnings per share – basic and diluted 0.34 21.88

Cash Flow
In financial accounting, a cash flow statement, also known as statement of cash flows, is a
financial statement that shows how changes in balance sheet accounts and income affect cash
and cash equivalents, and breaks the analysis down to operating, investing and financing
activities.

Cash flow
CASH FLOWS FROM OPERATING ACTIVITIES 2022 2021

Cash generated from operations 14,097,249 7,363,882

Finance costs paid (419,953) (121,038)

Interest portion of lease liabilities paid (647,402) (546,047)

Income tax paid (2,636,175) (546,047)

Long-term loans (13,723) (8,309)

Long-term deposits and prepayments 45,666 (106,967)

Post-retirement medical benefits paid during the year (11,164) (11,163)

Net cash generated from operating activities 10,414,498 4,651,219

Cash Flows From Investing Activities

Fixed capital expenditure 4,810,967 4,243,869

Proceeds from disposal of operating assets 60,341 18,482

Interest on saving accounts 115,471 29,681

Interest on term deposit receipts 195,788 156,107

Net cash used in investing activities 3,734,017 3,207,291

Cash Flows From Financing Activities

Proceeds from issuance of shares - 11,557,332

Share issuance cost - 58,308

Principal portion of lease liabilities paid 704,667 338,863

Dividends paid 148,134 23,038

Net cash (used in) / generated from financing activities 852,801 7,137,123

Net increase in cash and cash equivalents 5,827,680 8,581,051

Cash and cash equivalents at the beginning of the year 4,973,417 3,607,634

Cash and cash equivalents at the end of the year 10,801,097 4,973,417
Budgeting and Forecasting:

Sales Revenue: In 2021, the sales revenue was 282,353,611 rupees. In 2022, it increased
to 418,592,346 rupees, which is a growth of approximately 45%. If the company
continues to grow at this rate, we can forecast the sales revenue for 2023 to be around
606,958,901 rupees.

Cost of Sales: The cost of sales in 2021 was 225,543,999 rupees and in 2022 it was
379,106,173 rupees. This is an increase of approximately 60%. If the cost continues to
increase at this rate, we can forecast the cost of sales for 2023 to be around 606569876
rupees.

Gross Profit: The gross profit in 2021 was 23,665,985 rupees and in 2022 it was
33,592,886 rupees. This is an increase of approximately 40%. If the gross profit continues
to increase at this rate, we can forecast the gross profit for 2023 to be around 47030040
rupees.

Conclusion:

The financial report of Shell Pakistan for the year 2021-2022 reflects notable growth and
positive performance:

Increased Revenue: shell Pakistan experienced a significant increase in revenue compared

to the previous years. In 2022, their sales amounted to 33,592,886 PKR, showing a steady
upward trend from 2018.

Improved Profitability: The Company showcased improved profitability, likely attributed

to effective strategies and market positioning, though specific profit figures for the
mentioned period were not explicitly outlined in the available information.

Strategic Measures: The Annual Report 2022 highlights the company's strategy and its
commitment to becoming faster and simpler, focusing on sustainable growth and
operational efficiency.
Positive Market Response: The stock price and financials indicated stability
and possibly investor confidence in the company's performance.

Recommendations:

Strong competitive position but a little bit week in growing much shares in brands.

Shell should pursue an aggressive promotional strategy to be successful.

It should else extend further into products.

Being the largest energy company, it needs to maintain its position

Identify potential areas for growth and assess the demand for specific products.

Maintain a strong focus on quality assurance to ensure that products meet or exceed
industry standards.

(THE END)