8/7/2021 Project

Business ethics

Group Members

NAVEED MALIK 0024

QASIM MALIK 0029
 Pak-Arab Refinery Company Limited (PARCO)

Parco is a Pakistani joint venture  oil and gas company active in refining, transporting
and marketing petroleum products. was incorporated as a public limited company in 1974. Its
major business activities include Crude Oil Refining and Transportation, Storage and Marketing
of petroleum products. With a refining capacity of 120,000 Barrels Per Day, which is the largest
oil refinery in Pakistan. It is a joint-venture between governments of Pakistan and Abu Dhabi.
The Government of Pakistan holds 60% of the shareholding while 40% of the shares
are held by Emirate of Abu Dhabi.

Interview of the employees and assessment of the working condition and

justice in PARCO.

As far as our observation is concerned, working condition and justice system in Parco is
good. As there are suitable and comfortable working conditions for employees and there is no
such political involvement and dominant group etc.

 Has always been a great employer who cares about the wellbeing of its employees and their
professional growth, as well as keep them motivated all the times.
 PARCO is a well-reputed company and a great opportunity to work in the Oil and Gas
Industry in Pakistan. It has competent management and a pleasant workplace culture. I
have learned a lot since a joined the company as a Graduate Engineer. The company has
given me ample opportunity to hone my skills and grow professionally and as a person.
  In the start if you join in your early career it’s a good organization. However, if you want to
start as a management trainee i prefer don’t accept if you are not fresh graduate.in short i
would not recommended for long purpose as promotion progress is too low. Due to some
internal lobby and dead HR system. Moreover, compare to the market salary packages in
start is good.

Past and CSR activities of PARCO

PARCO was established in 1972 as joint venture between the Government of Pakistan
and Abu Dhabi for this purpose the first project was completed in 1981 by lying an 864 km 16
pipeline from Karachi to Gujarat. this pipeline is in Operational from last 21 years this pipeline
was laid as a first phase of the midcentury oil refinery. from 1982 PARCO was in the business of
transportation they receive the oil of marketing companies and give the facility of transportation
from Karachi to Mahmood Cout.

PARCO CSR programs are an ongoing initiative in which new institutions are identified
and existing ones are improved by providing basic infrastructure and other necessities that are
beneficial for the surrounding communities. From producing environment friendly products to
efficient, world class engineering facilities and infrastructure, building a highly competent
human capital, and major social initiatives,

PARCO has provided assistance in kind to several Government schools, basic health
units and rural health centers along the pipeline stations and Mid-Country Refinery. PARCO`s
assistance to these institutions has raised communities` interest to enroll their children in these
refurbished and well-maintained schools diverting them from child labor to primary education,
raising the literacy rate. Under the umbrella of Schools and Clinics Support Program, PARCO
has supported several Basic and Rural Health Centers based in small villages nearby PARCO
cross-country Pipeline and Stations and Terminals

Impact on the environment from the refining process is controlled by treating and managing
emissions. Low NOx (Nitrous Oxide) burners and Sulfur removal from fuel gases are examples.

Financial reports
 financial Summary
The Pakistan Credit Rating Agency Limited PKR min
Pak Arab Refinery Limited Sep-20 Jun-20 Jun-19 Jun-18
Refinery 3M 12M 12M 12M

A BALANCE SHEET
I Non-Current Assets 30,310
38,835 38,078 24,641
2 Investments 51,992 52,500 49,492 41,251
3 Related Party Exposure 13,910 13,910 12,272 11,794
4 Current Assets an Inventories b Trade Receivables 54,585 33,628 72,328 77,803
5 Total Assets 29,495 12,369 45,063 33,065
6 Current Liabilities a Trade Payables 15,572 11,603 15,075 19,257
7 Borrowings 159,322 138,115 164,401 155,489
8 Related Party Exposure 49,583 43,637 51,807 51,549
9 Non-Current Liabilities 22,307 18,037 32,004 33,501
10 Net Assets 25,528 14,303 8,239 607
11 Shareholders' Equity
4,585 3,769 8,920 6,856
B INCOME STATEMENT 79,625 76,406 95,436
1 Sales a Cost of Goods Sold 79,625 76,406 95,436
2 Gross Profit an Operating Expenses
3 Operating Profit, a Non-Operating Income or (Expense)
4 Profit or (Loss) before Interest and Tax a Total Finance 66,514 231,608 316,949 274,933
Cost B Taxation (62,509) (246,353) (303,843) (251,241)
6 Net Income or (Loss) 4,005 (14,745) 13,106 23,691
(935) (4,586) (3,908) (3,365)
C CASH FLOW STATEMENT a Free Cash Flows from Operations (FCFO) b 3,070 (19,332) 9,198 20,326
Net Cash from Operating Activities Before Working Capital Changes c 1,632 7,150 8,665 6,755
Changes in Working Capital
4,702 (12,181) 17,863 27,081
1 Net Cash provided by Operating Activities (422) (2,055) (169) (808)
2 Net Cash (Used in) or Available from Investing (1,061) 3,897 (5,358) (7,756)
Activities 3,219 (10,339) 12,335 18,517
3 Net Cash (Used in) or Available from Financing
Activities
4 Net Cash generated or (Used) during the period
2,235 (17,925) 20,994 18,639
1,526 (19,399) 25,375 24,188
(14,380) 30,842 (17,095) (8,343)
(12,854) 11,444 8,280 15,845
1,447 (5,935) (15,776) (2,148)
(12) (8,620) (4,761) (5,000)
(11,419) (3,112) (12,257) 8,697
D RATIO
ANALYSIS 1
Performance
a Sales Growth (for the period) 14.9% -26.9% 15.3% 21.8%
b Gross Profit Margin 6.0% 4.1% 8.6%
c Net Profit Margin 4.8% -4.5% 3.9% 6.7%
d Cash Conversion Efficiency (FCFO adjusted for Working Capital/Sales) -18.3% 5.6% 1.2% 3.7%
e Return on Equity [Net Profit Margin * Asset Turnover * (Total Assets/Sha 17.3% -12 4% 13.3% 21.4%
2 Working Capital Management
a Gross Working Capital (Average Days) 47 66 65 55
b Net Working Capital (Average Days) 20 27 27 21
c Current Ratio (Current Assets / Current Liabilities) 1.1 0.8 14 1.5
 3 Coverages
a EBITDA / Finance Cost 6.6 -7.4 139.8 28.8
b FCFO/Finance Cost+CMLTB+Excess STB 5.3 -8.8 124.0 13 2
c Debt Payback (Total Borrowings+Excess STB) / (FCFO-Finance Cost) 0.0 0.0 0.0 0.0
4 Capital Structure
a Total Borrowings / (Total Borrowings Shareholders' Equity) 24.3% 15.8% 0.6%
b Interest or Markup Payable (Days) 77.8 117.4 163.8 1
1

Is the PARCO product or service safe and healthy to use?

PARCO proactively works to ensure that its products and fuels are environment friendly.
Gasoline and High Speed Diesel complies with the Euro II standard.

PARCO was the first refinery in Pakistan to install a Diesel Hydro Desulphurization (DHDS)
plant, producing High Speed Diesel conforming EURO II standards. This product is helping
EURO II compliant automobiles to perform better by being fuel efficient with low emissions.

Criteria of ethical advertisement

PARCO carry out all the moral and ethical of promotion and advertisements. as a result

of it makes certain that everyone the product area unit publicized within the most ethical manner

potential. So that they they target their product campaigns advertisements, press promotions in a

certain way to make sure the moral and ethical advertisement of their company and product.

If company have any suppliers, Company is fulfilling their rights or not?

PARCO primary transport fleet of 37 carriers with a combined capacity of 827 metric
tons ensures that our supply chain from LPG sources is always functional, no matter what the
circumstances. Furthermore, PARCO’s dedicated fleet of 12 bulk tankers with a combined
capacity of 150 metric tons makes sure that our valued industrial clients’ LPG requirements are
delivered at their doorsteps in a timely manner. To modernize PARCO’s supply chain we
employ the latest technologies including OBI and Telemetry.

Activities of company and are they providing environmental friendly products

or not.

As mentioned above that they try to make their product as safe as possible by every
means. PARCO proactively works to make sure that its product and fuels area unit atmosphere
friendly. gasoline and High Speed Diesel complies with the monetary unit II customary. PARCO
was the primary industrial plant in Asian nation to put in a Diesel Hydro Desulphurization
(DHDS) plant, manufacturing High Speed Diesel conformist monetary unit II standards. This
product helps monetary unit II compliant cars to perform higher by being fuel economical.

Ethical or unethical practices of the organization

So far in the company there is no such practice that is unethical. They provide
comfortable and better environment for almost every one related to the company, whether they
are employees or manager’s suppliers and business dealers. PARCO ensures that all its
employees and staff of Service Providers Practice Road Safety regulations and precautions as
responsible citizens. Our HSE department conducts monthly Road Safety trainings.