Shell group of companies

Shell History in Pakistan

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 of changed to Pakistan Burmah Shell (PBS) Limited.

The Shell and the Burmah Groups retained the remaining 49% in equal propositions. 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%. The years 2011-12 have seen the Shell Petroleum Company successively increasing its share, with the Group now having a 76% stake in Shell Pakistan Ltd (SPL)- an expression of confidence.

Mission & vision Statement

Manager of Shell in Islamabad defined the mission statement of Shell Petroleum Pakistan as:

“Our aim is to meet the energy needs of society, in ways that are economically, socially and environmentally viable, now and in the future.”

Shell constantly achieving operational excellence, conducting their business in a safe, environmentally sustainable and economically optimum manner, employing a diverse, innovative and results-oriented team motivated to deliver excellence[i]. Obviously, an organization’s main purpose is meeting its profit requirement, so Shell wants to meet the energy needs of the society with high financial performance.

Accounting Period

The director of the company presents their annual report together with audited accounts for the accounting period started from 1st January and ended on December 31, 2011.

Balance sheet date

The balance sheet date of shell group of companies is December 31, 2011.

Date of authorization

These financial statements were authorized for issue on March 7, 2012 by the board of directors of the company.

Date of annual general meeting

Notice is hereby given that the forty-third annual general meeting of shell Pakistan limited will be held on Thursday, April 19, 2012 at 10:00 a.m. at Sheraton Karachi Hotel, Karachi to transact the business and the approval of the member for issue of bonus shares will be obtained in the annual general meeting. Non adjusting event after the balance sheet date

Proposed Dividends

Subsequent to the year end, The board of directors of shell group of company in there meeting held on march 7, 2012 have proposed 50% issue of bonus share in the ratio of one share for every four shares held by shares held by shareholders.

Interim dividends

The interim dividends of shell group of companies are Rs.528, 359. unclaimed dividend Unclaimed dividends of shell group of companies are Rs.107, 572. The financial statement for the year ended December 31, 2011 does not include the effect of these appropriations which will be accounted for in the financial statements for the year ending December 31, 2012.

Financial Performance:

Sales Analysis:

Shell Pakistan Limited reported sales of 37.93 billion Pakistan rupees for the fiscal year ending December 30, 2012. This represents an increase of 76.2%, versus 2011.When the company’s sales were 16.12 billion Pakistan rupees.

During 2012, the company’s sales increased at a faster rate than all three comparable companies. While shell Pakistan limited enjoyed a sales increase of 76.2% the other companies saw smaller increases; Chennai Petroleum Corporation Limited sales were up 29.1%, National Refinery Limited increased 15.9%, and Mangalore Refinery & Petrochemical Limited experienced a sales decline of 6.3%. Shell Pakistan Limited currently has 608 employees with sales of 63.63 billion Pakistan Rupees.

Stock Performance:

In recent years, this stock has performed terribly. In fiscal year 2012 the stock traded as high as 367.50 Pakistan rupees. During the past 13 weeks the stock has fallen 803%.

During the 12 months ending 30/06/01, earnings per share totaled 30.12 Pakistan rupees per share. Thus, the price/Earnings ratio is 5.48. Earnings per share fell 18.7%.The Company’s price to book ratio is higher than that of all three comparable companies, which are trading between 0.25 and 0.97 times book value.

Profitability Analysis:

On the 37.93 billion Pakistan rupees in sales reported by the company in 2011, the cost of goods sold totaled 24.75 billion Pakistan rupees, or 70.3% of sales. This gross profit margin is significantly better then the company achieved in 2012, when cost of goods sold totaled 91.1% of sales.