How to Read a PSX Annual Report

A listed company's annual report runs to 200-400 pages, and most investors never open it. You do not need to read all of it. About ten pages tell you most of what matters, if you know where they are. This guide walks through two real reports, so you can follow along with the PDFs open:

• HBL (Habib Bank Limited, a bank, year ended 31 December 2025): Annual Report 2025.
• OGDC (Oil and Gas Development Company, year ended 30 June 2026): Annual Report 2026 on the PSX Data Portal.

They are good companions because they look very different: a bank earns from mark-up on loans and securities, while OGDC sells oil and gas. If you can read both, you can read most companies. Page numbers below are the printed page numbers in each report. New to the basics? Read Financial Statements and Ratio Analysis first.

Where to find an annual report

1. PSX Data Portal: open the company's page at dps.psx.com.pk (for example dps.psx.com.pk/company/OGDC). The announcements list shows "Transmission of Annual Report" with the PDF, and the page links to PSX's financial reports section.
2. The company's own website, under Investor Relations (for example HBL's "Annual Accounts" page).

OGDC's report for the year ended 30 June 2026 was sent to PSX on 25 September 2026, about three months after year end. Quarterly and half-yearly reports are posted the same way and are shorter, a good way to follow a company between annual reports.

The map of a report

HBL's report also includes a second set of statements for the whole group (the "consolidated" accounts, which add subsidiaries) alongside the bank alone. The numbers below are HBL's consolidated figures.

Step 1: Start with the multi-year summary

Before any detail, look at six years of earnings per share (EPS) and dividends. Both reports put this on one or two pages:

Both companies grew earnings and raised dividends. But OGDC's EPS fell for two years (52.23, 48.59, 39.50) before jumping to 56.35, and that last jump is worth a closer look, which is what the next steps do.

Step 2: Read the auditor's report

Read two things: the opinion and the key audit matters.

• The opinion. A clean opinion says the statements give a "true and fair view". Both HBL and OGDC received one. Be alarmed by a "qualified" or "adverse" opinion, a refusal to give an opinion, or a paragraph about a "material uncertainty related to going concern".
• Key audit matters (KAMs) are the areas where the auditor spent the most effort because they involve big numbers and judgment. They are a free list of what could go wrong.

HBL's key audit matter is the valuation of advances (loans): the bank's allowance for expected credit losses on advances and off-balance-sheet obligations was Rs. 111,866 million and Rs. 5,163 million respectively, an estimate that depends on management's models and assumptions.

OGDC's four key audit matters are: overdue trade debts and lease receivables; recognition of revenue and income; impairment of development and production assets; and reversal of a provision for taxation. The first is the big one. Overdue trade debts and lease receivables amounted to Rs. 508,170 million and Rs. 7,208 million, caused by inter-corporate circular debt: gas and power companies owe OGDC money that they have not paid, including Rs. 251,435 million overdue from Sui Northern Gas Pipelines and Rs. 241,469 million from Sui Southern Gas Company. OGDC treats these as fully recoverable because the Government is working to settle the issue, and the auditor still flags that progress is slower than expected.

Step 3: The profit and loss, read from top to bottom

OGDC (Rs. billion, years ended 30 June):

Read the tax line. OGDC's profit jumped 43%, from Rs. 169.9 billion to Rs. 242.4 billion, yet its profit before tax actually fell 7%. The difference is tax: it paid Rs. 16.8 billion (6.5% of pre-tax profit) against Rs. 109.4 billion (39.2%) a year earlier. That is the "reversal of provision for taxation" the auditor flagged, and OGDC's own quarterly analysis ties the sharp jump in its fourth quarter to the reversal of its super tax provision. In that quarter its profit after tax (Rs. 127.1 billion) was bigger than its profit before tax (Rs. 83.4 billion). A one-off tax reversal is not a permanent improvement, so do not extrapolate the 56.35 EPS.

HBL (Rs. billion, consolidated, years ended 31 December):

For a bank the key line is net mark-up income, the difference between what it earns on loans and securities and what it pays on deposits and borrowings. Notice that HBL's mark-up earned fell by about Rs. 132 billion, but its mark-up expense fell by more (about Rs. 162 billion), so net income rose 12%. HBL's tax charge is a little over half its pre-tax profit (54.9%), far higher than a normal company's; note 34 to the accounts explains the tax. Another number to check is the credit loss allowance, which fell from Rs. 26.6 billion to Rs. 9.1 billion. Lower provisions boosted profit, which only lasts if the loans stay healthy.

Step 4: The balance sheet

Ask what the company owns, what it owes, and whether either has changed sharply.

OGDC had total assets of Rs. 1,852.8 billion and total liabilities of only Rs. 333.3 billion against equity of Rs. 1,519.6 billion, and no borrowings. The standout asset is trade debts of Rs. 594.8 billion, about 32% of all assets, which is the circular-debt problem from the auditor's report showing up on the balance sheet. The profit is real on paper, but the cash has to be collected.

HBL shows a bank's shape: deposits of Rs. 5,546 billion fund assets of Rs. 7,708 billion. Compare 2025 with 2024: advances fell 14.7% (Rs. 2,435 billion to Rs. 2,077 billion) while investments rose 65.6% (Rs. 2,528 billion to Rs. 4,186 billion) and deposits rose 26.9%. The bank moved its growth from lending to securities. The summary on page 12 shows advances were only 37.4% of deposits, down from 55.7% in 2024, so the Directors' report is where to look for the explanation.

Step 5: Check profit against cash

Profit is an accounting number; cash is what pays dividends. The cash flow statement and the six-year summary show cash generated by operations. OGDC's profit for 2025-26 was Rs. 242.4 billion, but its net cash from operating activities was Rs. 160.6 billion, about two-thirds of profit. Part of that gap is the non-cash tax reversal and part is receivables not yet collected. When profit rises but operating cash does not, ask why.

Step 6: Notes, Directors' report and the chairman's message

• Notes. The auditor's report tells you which notes matter. OGDC's key audit matter on trade debts points to notes 19.2 and 21.1; HBL's on advances points to notes 9 and 20. This is where you find ageing tables, related-party balances, contingencies and accounting policies.
• Directors' report. Look for the outlook, the dividend decision and the risks. OGDC also has a quarter-by-quarter analysis of results (page 82) that explains the swings.
• Chairman's message. Useful for tone and strategy, but the least reliable part: it is written to be positive. Trust the numbers over the adjectives.

Ratios you can calculate yourself

Reports print their own ratios, but calculate them yourself from the statements and price so you know exactly what is included:

HBL's own summary table shows a P/E of 4.8x; dividing its year-end price by its EPS gives 7.1x. Companies can use different prices or earnings in the ratios they publish, which is why it pays to compute them yourself. OGDC's 54% net margin is inflated by other income and the tax reversal; its operating profit margin was 42%.

Once you have EPS and a dividend, you can estimate a fair value with the Fair Value Calculator or the Dividend Discount Model, and test the discount rate with the CAPM Calculator.

Red flags checklist

• A qualified or adverse audit opinion, or any going-concern paragraph.
• Profit rising while cash from operations does not.
• Receivables growing faster than revenue, or a large overdue balance (OGDC's circular debt is the textbook case).
• A sharp change in the tax rate, one-off gains, or large "other income" lifting profit.
• Falling provisions at a bank that is growing its risky loans.
• A new auditor, restated figures, or a change in accounting policy.
• Big contingent liabilities or related-party dealings in the notes.
• A dividend that is more than the year's profit or operating cash.

Sources: HBL Annual Report 2025 and OGDC Annual Report 2026 (figures, audit matters and page numbers); share prices from the Pak Stock Exchange. Figures are rounded. This guide is for education only, not investment advice; it does not say HBL or OGDC is a good or bad investment.

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