MIRA INFORM REPORT

Report Date :

13.12.2013

IDENTIFICATION DETAILS

Name :	PETROLEUM EXPLORATION PVT LTD (PEL)
Registered Office :	House No. 15, Post Box 1440, Main Nazi mud Din Road, F-10/4, Islamabad
Country :	Pakistan
Financials (as on) :	30.06.2012
Date of Incorporation :	12.06.1994
Legal Form :	Private Limited Company
Line of Business :	exploration & extraction of natural resources including Oil & Natural Gas
No. of Employees :	330

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	No Complaints
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – September 30th, 2013

Country Name	Previous Rating (30.06.2013)	Current Rating (30.09.2013)
Pakistan	B2	B2

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

pakistan ECONOMIC OVERVIEW

Decades of internal political disputes and low levels of foreign investment have led to slow growth and underdevelopment in Pakistan. Agriculture accounts for more than one-fifth of output and two-fifths of employment. Textiles account for most of Pakistan's export earnings, and Pakistan's failure to expand a viable export base for other manufactures has left the country vulnerable to shifts in world demand. Official unemployment is under 6%, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Over the past few years, low growth and high inflation, led by a spurt in food prices, have increased the amount of poverty - the UN Human Development Report estimated poverty in 2011 at almost 50% of the population. Inflation has worsened the situation, climbing from 7.7% in 2007 to almost 12% for 2011, before declining to 10% in 2012. As a result of political and economic instability, the Pakistani rupee has depreciated more than 40% since 2007. The government agreed to an International Monetary Fund Standby Arrangement in November 2008 in response to a balance of payments crisis. Although the economy has stabilized since the crisis, it has failed to recover. Foreign investment has not returned, due to investor concerns related to governance, energy, security, and a slow-down in the global economy. Remittances from overseas workers, averaging about $1 billion a month since March 2011, remain a bright spot for Pakistan. However, after a small current account surplus in fiscal year 2011 (July 2010/June 2011), Pakistan's current account turned to deficit in fiscal year 2012, spurred by higher prices for imported oil and lower prices for exported cotton. Pakistan remains stuck in a low-income, low-growth trap, with growth averaging about 3% per year from 2008 to 2012. Pakistan must address long standing issues related to government revenues and energy production in order to spur the amount of economic growth that will be necessary to employ its growing and rapidly urbanizing population, more than half of which is under 22. Other long term challenges include expanding investment in education and healthcare, adapting to the effects of climate change and natural disasters, and reducing dependence on foreign donors.

Source : CIA

GENERAL INFORMATION

Business Name	Petroleum Exploration Pvt. Ltd (PEL)
Corporate & Registered Office	Registered Address: House No. 15, Post Box 1440, Main Nazi mud Din Road, F-10/4, Islamabad Head Office House No. 20, Main Margalla Road, F-8/3, Islamabad Marketing & Finance Office House No.66, Street No. 25, Nazi mud Din Road, F-10/1 Islamabad.
Telephone	Registered Office 92-51-2299031-36, Head Office 92-51-2287170-75 (6 Lines), Marketing & Finance Office 92-51-2103247-49 (3 Lines)
Fax	Registered Office 92-51-2299028 Head Office 92-51-2287154 & 55 (2 Lines) Marketing & Finance Office 92-51-2104572 - 73 (2 Lines
Email	pel@pepl.com.pk , peplshzd@isb.comsats.net.pk & shahzadintl@nayatel.pk
Website	www.shahzadintl.com.pk
Business activities	Oil & Gas Exploration

Registry Details

CRO Registration Number	0032730
Date of Registration	June 12, 1994

Other registry & certification details:

Current Legal Form	Private Limited Company
National Tax Registration Number	0657118-2
Date of Registration	January 09, 1996
GST Registration Number	0701270000928
Date of Registration	January 03, 2001
Chamber of Commerce & Industry	Undetermined
ISO Certification	None
Other certifications	N/A

Capital

Type	No. of Shares	Par Value	Total Value
Authorize Capital	2,500,000	Rs. 100/-	Rs 250,000,000
Paid Up Capital	14,000	Rs. 100/-	Rs.1,400,000

History

Who started	Mr. Zaheer ud Din
When started	1994
Change in management	Not Disclosed
Year of change	N/A
Change in legal status	None
Year of change	N/A
Change in business name	None
Year of change	N/A

PRINCIPALS

(SPONSORS)

Name	Number of Shares	Nationality	Appointment Date (Last)
Mr. Zafar Iqbal	11,200	Pakistani	2012
Mr. Zaheer uddin	1,400	Pakistani	2012
Mr. Moeen uddin	700	Pakistani	2012
Mr. Shahzad Zaheer	700	Pakistani	2012
Total	14,000

KEY MANAGEMENT

Name	Position in organization	Qualification	Years in employment
Mr. Zaheer ud Din	CEO/ Director	Highly qualifies & experienced people
Dr. Gulfaraz Ahmed	Chief Operating Office
Mr. Zafar Iqbal	Director
Mr. Moeenuddin	Director
Mr. Shahzad Zafeer	Director
Mr. Dr. Mahmood ul Hassan	SGM Exploration
Mr. Edwin G Bowles	SGM
Mr. Khalid Rahim	GM Production & Planning

Statutory offices	Name of service provider
Statutory Auditors	M/s BDO Ebrahim & Co Chartered Accountants
Legal Advisory Services	Danish Afzal

BANKERS

Bank name	Approved financing limits
First Women Bank Limited	Rs. 400M
Other Financial or Govt Institution
Ministry of Petroleum and Natural Resources Government of Pakistan	US $ 3.19 Million

DETAILS OF BUSINESS ACTIVITIES

PEL, a 100% Pakistani Company has emerged as an important player among the gas producing companies in Pakistan. The company looks to the future and takes pride in being the pioneer local gas producing company in the private sector. PEL has been established with the aim of developing a strong indigenous base in exploration and production sector. The Company is totally committed to exploit the oil & gas resources of Pakistan and establish its reputation in competition with major oil companies. PEL has already fostered close working relationship with the Government and major multinational oil & gas companies operating in Pakistan.

PEL has concluded an agreement with D&S International Consulting Limited, Calgary, Alberta, Canada, for the provision of technical services which has given considerable advantage in pursuit of its objectives.

It is presently operating 5 oil & gas Development & Production Leases, one Mining Lease, 9 Onshore Exploration Licenses and 3 Offshore Exploration Licenses. Besides, PEL also holds 41% working interest in Sukkur Block which is operated by Mari Gas Company Ltd.

Purchases (Incl. Imports)

Imports from	Not Disclosed
Importing terms	N/A
Local	Undermined
Local buying terms	Undermined

Sales (Incl. Exports)

Exports to	Not Disclosed
Exporting terms	N/A.
Local (%)	100%
Local selling terms	Undermined

NUMBER OF EMPLOYEES

Nature of employment	Current Year	Previous Year
All Staff	330	330
Total	330	330

BUSINESS FACILITIES

Corporate & Registered Office Owned / Rented Area (approx)	House No. 15, Post Box 1440, Main Nazi mud Din Road, F-10/4, Islamabad Owned Owned Not Disclosed
Corporate Head Office Owned / Rented Area (approx	House No. 20, Main Margalla Road, F-8/3, Islamabad Owned Not Disclosed
Marketing & Finance Office Owned / Rented Area (approx	House No.66, Street No. 25, Nazi mud Din Road, F-10/1 Islamabad. Rented Not Disclosed

MARKET REPUTATION

During the market check of PEL we got to know that the concern is doing well in the market, the company has been in the market for many years now and has a good reputation and standing in the market. The customers contacted told us that the concern is doing fair business with market competitive rates and excellent services. We did not come across any complaint or issues regarding the quality and services of its product.

DETAILS OF RELATED BUSINESSES

Business Name	ADDRESS/ City	LINE OF BUSINESS	Percentile of Shareholding
Shahzad Travels (Private) Limited	Islamabad	Travelling Agency	1). Mr. Zaheer ud din 2). Mr. Zafar Iqbal 3). Mr. Moeen Uddin	27.5%. 45% 27.5%
Flash Securities Services (Private) Limited		Security Services provider	1). Mr. Zaheer ud din 2). Mr. Zafar Iqbal 3). Mr. Moeen Uddin	50%. 25% 25%
Global Mining Company (Private) Limited		Exploration & Mining	1). Mr. Zaheer ud din 2). Mr. Zafar Iqbal 3). Mr. Moeen Uddin 4). Shahzad Zaheer	25%. 25% 25% 25%
Kandra Power Company (Private) Limited		Independent power Provider	1). Mr. Zaheer ud din 2). Shahzad Zaheer	50%. 50%
Shahzad CGG Veritas (Private) Limited		Not Disclosed	1). Shahzad Zaheer 2). Mr. Moeen Uddin 3). Zaheer Uddin 4). Mr. Daniel Van Hulle 5). Mr. Thiery Le Roux	20% 20% 20% 20% 20%
Shahzad International		Petroleum Explorations	1). Mr. Zaheer ud din 2). Mr. Moeen Uddin 3). Mr. Bashiruddin-	33.33%. 33.33%. 33.33%.

BUSINESS PERFORMANCE

Particulars	30-Jun-12	30-Jun-11	% Change
Current assets	683,837,949	648,120,410	5.51
Current liabilities	(408,120,657)	(1,401,472,458)	(70.88)
Working capital	275,717,292	(753,352,048)	(136.60)
Non-current assets	2,038,446,518	1,521,011,206	34.02
Long term liabilities	(2,385,798,990)	(783,302,686)	204.58
Net worth	(71,635,180)	(15,643,528)	357.92
Turnover	361,719,303	315,492,806	14.65
Gross Profit	187,374,751	203,460,289	(7.91)
EBIT	110,862,381	158,575,858	(30.09)
Profit / (Loss) before tax	64,220,041	33,818,752	89.89
Provision for taxation	-	-
Profit / (Loss) after tax	64,220,041	33,818,752	89.89
Creditors	65,417,692	625,018,582	(89.53)
Debtors	77,764,702	64,323,628	20.90
Cash & bank balances	158,943,524	147,614,977	7.67
Growth trend
Sales growth (%)	14.65%
Gross profit growth (%)	-7.91%
Solvency
Current ratio	(1.68)	(0.46)
Quick ratio	(1.66)	(0.46)
Total liabilities to net worth ratio (%)	3,900.21	13,966.00
Profitability
Return on sales (%)	17.75	10.72
Return on net worth (%)	(89.65)	(216.18)

INTERVIEW & REPORTER COMMENTS

Contact person	Mr. Jawad Ahmed
Position	Personal Staff to Director
Contact Person Comments	COMMENTS: 1- Subject was established in 1994 by Mr. Zaheer Uddin (CEO of the Subject). 2- Subject is a Group Company of M/s. Shahzad group. 3- Subject has been involved in the exploration & extraction of natural resources (Oil & Natural Gas). 4- The Contacted person claimed that the subject started the discovery of Natural Gas in 1994 and in Year 2000 a resource of Natural resource was discovered in Sindh Province. 5- The Contacted person claimed that Ministry of Petroleum & Natural Resources has leased out ten sites in Province Sindh. He claimed that the nine of ten sites are on shore sites and one site amongst them is off shore site, for exploration of Natural Gas. 6- The Contacted person claimed that his Company has been extracting Natural Gas in Block No. 22, near Sukkur in Sindh Province. 7- The Company Profile shows that the subject’s recent production has commenced from Koonj gas discovery in Sukkur Block operated by Mari Gas Company. The subject has 41.2% working interest in this Block. 8- The Company Profile shows that the subject has 0.67% share in Gas exploration in Year 2011-12 amongst all exploration companies (Govt. & Private Company & Departments) in Pakistan. 9- The Company profile shows that the subject has been explored 35.05% share of Gas exploration & production amongst the private sector in Year 2011-12.
Analyst’s Observations/ comments	Mentioned As above

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.62
UK Pound	1	Rs.100.84
Euro	1	Rs.84.98

INFORMATION DETAILS

Report Prepared by :

MNL

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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