CORPORATE FINANCE

PAKISTAN PROJECT
INTERNATIONAL
SUBMITTED BY :
BULK TERMINAL SYED ALI HUSSAIN SHERAZI

LIMITED ROLL NO: F2016314022

SUBMITTED TO :
REPORT DR ZAHEER ANWAR
Contents
THE COMPANY AND ITS OPERATIONS..............................................................................3
Auditor’s Report..........................................................................................................................3
Corporate Social Responsibility..................................................................................................3
Environment Conservation......................................................................................................4
Education.................................................................................................................................4
Healthcare................................................................................................................................4
Governance Mechanism..............................................................................................................5
Who controls the company?....................................................................................................5
Chairman..................................................................................................................................5
Chief Executive Officer...........................................................................................................5
Incentives to the management.....................................................................................................6
New assets and their useful life...................................................................................................6
Depreciation.................................................................................................................................6
Beta for PIBT...............................................................................................................................7
Deferred tax account....................................................................................................................7
FINANCIAL RATIOS................................................................................................................7
LIQUIDITY RATIO....................................................................................................................7
Cash ratio.................................................................................................................................7
Quick ratio...............................................................................................................................7
Current ratio.............................................................................................................................8
Working capital.......................................................................................................................8
EFFICIENCY RATIOS...............................................................................................................8
Account receivable turnover....................................................................................................8
Days sale outstanding..............................................................................................................8
Days sale in inventory.............................................................................................................8
Accounts payable turnover......................................................................................................9
PROFITABILITY RATOS.........................................................................................................9
Gross margin............................................................................................................................9
Net profit margin.....................................................................................................................9
Return on assets.......................................................................................................................9
Return on capital employed...................................................................................................10
 Return on equity....................................................................................................................10
SOLVENCY RATIOS...............................................................................................................10
Debt ratio...............................................................................................................................10
Debt/equity ratio....................................................................................................................10
INVESTOR RATIOS................................................................................................................10
Earnings per share..................................................................................................................10
Price/earning ratio..................................................................................................................11
Dividend payout ratio............................................................................................................11
Dividend yield.......................................................................................................................11
Conclusion.....................................................................................................................................11
THE COMPANY AND ITS OPERATIONS

Pakistan international bulk terminal limited is the company incorporated in 2010 according to the
Companies Ordinance, 1984. It was started as a private limited company but converted to an
unquoted public limited company in 2013 and got registered with PSX. The company aims to
implement the best environmental standards to apply the latest technology and innovations. Their
objective is to maintain the efficiency and industry standards at the international level to make
the handling of cargo easy. Across Pakistan, Pakistan International Bulk Terminal Limited, has
become the most important and prominent part of the coal industry.
The major operations of the company include various contracts that the company is managing.
The company is in contract with the Port Qasim Authority for the Build Operate Transfer.
According to the contract conditions, the company is responsible for the development,
construction, management, and innovation of the Port Muhammad Bin Qasim for 13 years. The
company will transfer all of the concession assets to the Port Qasim after the expiry date of the
contract. PIBT deals with the industries of coal, minerals, oil, and provides them with the bulk
cargo service.
The company takes the guidelines from the World Bank Group about the environmental
standards for coal handling. The terminal wants to be the leader in the market of bulk cargo
handling in overall Pakistan. The company employs the unskilled workers for its businesses
related to the power plants of coal and cement factories. It is one of the operations of the
company to reduce the costs for commodities that are imported to help its business operations in
making the cargo an effective transport. PIBT is Pakistan's first coal, clinker and cement terminal
with million dollars of cost.

Auditor’s Report

According to the audit conducted for the Pakistan International bulk terminal Limited in the year
of 2019, statement of profit and loss and other comprehensive incomes, statement of financial
position statement of cash flows, and other statements regarding the changes in equity were
audited. If we consider the opinion on the auditor we can easily evaluate that the audit report of
the company is qualified. Because the auditor examines the financial position of the company by
the Companies Act 2017, which collaborates the true and fair view of the state of the company's
affairs. The auditor implemented the international standards on Auditing to study about company
ethics and its financial stability.

Corporate Social Responsibility

The development of an organization is linked with the welfare and well being of the society
around the organization. Organization has to maintain a balance by taking part in the corporate
social responsibility. by Implementing on the CSR strategy, the companies can gain a lot more
number of loyal and satisfied customers. Pakistan International bulk terminal Limited also
focuses on the activities running in its environmental social responsibility. The company takes
care of society as well as the environment, employee communities, and all the other external
parties involved in the business operations. Pakistan International bulk thermal Limited takes
initiatives for Corporate Social responsibilities in the following activities:
 Environmental conservation
 Education
 Healthcare
Environment Conservation
according to the corporate social responsibility program of the company, PIBT aims to protect
the coastal ecosystems of mangroves that is the northern creeks of the Indus delta, by restoring
the devastated forest in the Indus delta for providing it the long-term viability. As part of the
responsibility of the Pakistan International burg terminal Limited, the company has to provide
maintenance for 500 hectares in the broadcasting for conservation and of the plantation by hiring
the local community skilled laborers. The company has started the dust emission control plan
maintenance of mangroves by the process of plantation that will assist in sustaining the
ecosystem of an area. According to the recent news the company has become the Founder
member of Karachi conservation which is a national initiative run by the International Union for
the conservation of nature working with the port Qasim authority and other private institutions.
The objective is to promote the conservation and Biodiversity in the city of Karachi and Port
Qasim area. The company is involved in various initiatives for Corporate Social Responsibility
that is adding value to the organization structure.
Education 
booting in the educational sectors is always the priority of Pakistan International bulk Limited,
the company believes that investing in education will increase the overall productivity of our
country. because Skilled and trained student can serve the society better in the future. The
company is starting the campaign of establishing the primary schools in the low privileged areas
near the terminal premises. The company is providing the school accessories like books,
uniforms, stationery, and school bags for the student of those schools as well. Also, the company
is involved in training the teaching department of those schools and providing them with clean
water as well.
Healthcare 
Pakistan International bulk terminal Limited is collaborated with the in the area of Rerhi Goth to
provide the free medicines treatment and consultations to almost 500 patients monthly.
Moreover, the company is creating awareness about human rights and their health facilities.
Governance Mechanism

Number of No. of Shares Percentage

Categories of Shareholders
Shareholders Held %
Associated Companies, Undertaking And
2 926,742,544 52.
Related Parties
Directors, Chief Executive Officer and
9 104,573,476 6.
their Spouse and Minor Children
Public Sector Companies and
1 11,500,000 0.64
Corporations
Banks, Development Financial
Institutions, Non-Banking Financial
9 6,439,289 0.36
Institutions, Insurance Companies,
Takaful and Pension Funds
Mutual Funds and Modarabas 9 3,972,435 0.22
Foreign Entities 9 187,436,838 10.
General Public / Individuals - Local 21,969 482,207,815 27.00
General Public / Individuals - Foreign 19 1,204,807 0.07
Others 323 62,015,568 3.
  22,350 1786,092,772 100.00

Who controls the company?

The chief executive officer and the chairman of the Pakistan International bulk terminal Limited
on the company.

Chairman
Captain Salim Ahmed Siddiqui is the chairman of the company and holds the following
responsibilities:
 managing and providing the leadership to the board of directors of the company
 ensuring the board is working on the development and determination of the strategies of
the company
 ensuring that the chief executive and the management of the company is implementing
on the Strategies and policies of the company
 promoting the corporate governance with higher standards
 managing the conflicts among the members of the board
 promoting the good ethical values and highest moral

Chief Executive Officer

Mr. Sharique Azeem Siddiqui is the CEO of the company and responsible for the following
duties:
 ensuring the measurement is practicing on the strategies
 making the communication effective with the chairman
 managing the strategic and operational risks 
  communicating with the shareholder's government authority is employees and other
stakeholders on behalf of the company.

Incentives to the management

  Chief Executive
Directors
Executive
Remuneration 18,211 18,211 29,028
Bonus 12,520 12,520 16,112
Housing rent 5,463 5,463 8,713
Retirement benefits 1,517 1,517 1,894
Medical 1,821 1,821 2,905
Utilities 1,821 1,821 3.
  41,353 41,353 61,557
Number of persons 1 6 12

The Company maintained car is also provided to The Chief Executive Officer, Executive
Director, Chief Financial Officer and Company Secretary of the Company as well as the other
benefits following terms of service.

New assets and their useful life

  Cost Useful life

Additions/
 
Disposals Years
Owned    
Port infrastructure 16,846 30
Leasehold improvements 7,677 30
Buildings 13,308 20
Cargo handling equipment 179,005 20
Port power generation 235 20
Terminal equipment 21,219 10
Vehicles 19,426 3-5
  (1,065)  
Office equipment 5,151 3
Furniture and fixtures 6,974 3
  269,841  

Depreciation
The company calculates the depreciation using the straight-line method. Depreciation is charged
by the straight-line method to income statement but to the cost of an asset by writing off the
residual values. For the new assets, depreciation is charged when the assets are available to use.

Beta for PIBT

Pakistan International bike terminal Limited is more riskier than the market because its beta is
1.51.

Deferred tax account

Deferred tax account  

Arising on taxable temporary difference  
accelerated depreciation -2,233,061
Arising on deductible temporary difference  
tax losses 3,086,728
pre-commencement expenses 49,173
amortization 4,052
  906,892

FINANCIAL RATIOS

LIQUIDITY RATIO

Cash ratio
The cash ratio shows how well a company can pay off its current liabilities with only cash and
cash equivalents. This ratio shows cash and equivalents as a percentage of current liabilities.
Formula:
Cash ratio = (Cash + Marketable Securities)/Current Liabilities = 0.13%
A ratio of 1 means that the company has the same amount of cash and equivalents as it has
current debt. In other words, to pay off its current debt, the company would have to use all of its
cash and equivalents. A ratio above 1 means that all the current liabilities can be paid with cash
and equivalents. A ratio below 1 means that the company needs more than just its cash reserves
to pay off its current debt.
Quick ratio
The quick ratio or acid test ratio is a liquidity ratio that measures the ability of a company to pay
its current liabilities when they come due with only quick assets. Quick assets are current assets
that can be converted to cash within 90 days or in the short-term.
Formula:
Quick ratio = (Cash + Marketable Securities + Receivables)/Current liabilities = 0.41%
Higher quick ratios are more favorable for companies because it shows there are more quick
assets than current liabilities. A company with a quick ratio of 1 indicates that quick assets equal
current assets. This also shows that the company could pay off its current liabilities without
selling any long-term assets.
Current ratio
The current ratio is a liquidity ratio that measures a company's ability to pay short-term
obligations or those due within one year.
Formula:
Current Ratio = Current assets / Current liabilities = 0.79%
A current ratio of less than one may seem alarming, although different situations can affect the
current ratio in a solid company.
Working capital
Working capital is a financial metric which represents operating liquidity available to a business,
organization, or other entity, including governmental entities.
Formula:
Working capital = current assets - current liabilities= (1012116)
A ratio above 1 means current assets exceed liabilities, and generally, the higher the ratio, the
better.

EFFICIENCY RATIOS

Account receivable turnover

The accounts receivable turnover ratio is an accounting measure used to quantify a company's
effectiveness in collecting its receivables or money owed by clients.
Formula:
Accounts Receivable Turnover= Net Credit Sale/ Average Accounts Receivable= 1.2
A high receivables turnover ratio might indicate that a company operates on a cash basis.
Days sale outstanding
Days sales outstanding (DSO) is a measure of the average number of days that it takes a
company to collect payment after a sale has been made.
Formula:
DSO = Accounts Receivable / Total Credit Sales × Days = 64days
A high DSO number shows that a company is selling its product to customers on credit and
taking longer to collect money. 
Days sale in inventory
The days sales of inventory (DSI) is a financial ratio that indicates the average time in days that a
company takes to turn its inventory, including goods that are a work in progress, into sales.
Formula:
DSI=Average inventory/ COGS×365 days = 58 days
DSI is an inverse of inventory turnover over a given period. Higher DSI means lower turnover
and vice versa.
Accounts payable turnover
Accounts payable turnover shows how many times a company pays off its accounts payable
during a period.
Formula:
A/C Payable Turnover= Total Purchases/ Avg. A/C Payable = 1.2%
A higher ratio shows suppliers and creditors that the company pays its bills frequently and
regularly. It also implies that new vendors will get paid back quickly.

PROFITABILITY RATOS

Gross margin
Gross margin is a company's net sales revenue minus its cost of goods sold (COGS).
Formula:
Gross Margin=Net Sales−COGS= 29.73%
If a company's gross margin is falling, it may strive to slash labor costs or source cheaper
suppliers of materials.
Net profit margin
The net profit margin is equal to how much net income or profit is generated as a percentage of
revenue.
Formula:
Net profit margin= net income/sales*100= -7.81%
a company can have growing revenue, but if its operating costs are increasing at a faster rate than
revenue, its net profit margin will shrink.
Return on assets
Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets. 
Formula:
Return on assets=net income/total assets= 26.7 %
Return on capital employed
Return on capital employed (ROCE) is a financial ratio that measures a company's profitability
and the efficiency with which its capital is used. 
Formula:
ROCE= EBIT/ Capital Employed= 0.07
The ratio measures how well a company is generating profits from its capital. 

Return on equity
Return on equity (ROE) is a measure of financial performance calculated by dividing net
income by shareholders' equity.
Formula:
Return on Equity = Equity Net Income / Average Shareholders’ Equity = 17.5%

SOLVENCY RATIOS

Debt ratio
The debt ratio is a solvency ratio that measures a firm's total liabilities as a percentage of its total
assets. In a sense, the debt ratio shows a company's ability to pay off its liabilities with its assets.
Formula:
Debt ratio= total liabilities/total assets= 0.6%

A debt ratio of .5 is often considered to be less risky. This means that the company has twice as
many assets as liabilities
Debt/equity ratio
The debt to equity ratio is a financial, liquidity ratio that compares a company’s total debt to total
equity.
Formula:
Debt/equity ratio= total liabilities/ total equity= 1.17%
A debt to equity ratio of 1 would mean that investors and creditors have an equal stake in the
business assets.

INVESTOR RATIOS
Earnings per share
Earnings per share (EPS), also called net income per share, is a market prospect ratio that
measures the amount of net income earned per share of stock outstanding.
Formula:
EPS= earnings available/ no. of common stock= (0.39)%
Higher earnings per share is always better than a lower ratio because this means the company is
more profitable and the company has more profits to distribute to its shareholders.
Price/earnings ratio
the price-earnings ratio shows what the market is willing to pay for a stock based on its current
earnings.
Formula:
P/E ratio= market value / EPS= (6.16)
Dividend payout ratio
The dividend payout ratio measures the percentage of net income that is distributed to
shareholders in the form of dividends during the year.
Formula:
Dividend payout ratio= total dividends/ net income= (0.5)
Dividend yield
The dividend yield is a financial ratio that measures the amount of cash dividends distributed to
common shareholders relative to the market value per share.
Formula:
Dividend yield= cash dividend per share/ market value per share= (0.7)

Conclusion
After conducting the financial and market analysis of Pakistan International Bulk Terminal
Limited, it is concluded that the financial position of the company is not stable as in 2019 the
company faced a huge loss that it can recover by working on its existing strategies. By following
the guidelines of the auditors the company can increase its productivity and profitability.