Attock Refinery Limited (Annual Report 2008)

Annual Audited Financial Statements
2008
Attock Refinery Limited

Auditors' Report to the Members
We have audited the annexed balance sheet of Attock Refinery Limited as at June 30, 2008 and the related profit
and loss account, cash flow statement and statement of changes in equity together with the notes forming part
thereof, for the year then ended and we state that we have obtained all the information and explanations which, to
the best of our knowledge and belief, were necessary for the purposes of our audit.
It is the responsibility of the Company's management to establish and maintain a system of internal control, and
prepare and present the above said statements in conformity with the approved accounting standards and the
requirements of the Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements
based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require
that we plan and per form the audit to obtain reasonable assurance about whether the above said statements are
free of any material misstatement. An audit includes examining on a test basis, evidence supporting the amounts
and disclosures in the above said statements. An audit also includes assessing the accounting policies and significant
estimates made by management, as well as, evaluating the overall presentation of the above said statements. We
believe that our audit provides a reasonable basis for our opinion and, after due verification, we report that:
(a) in our opinion, proper books of account have been kept by the Company as required by the Companies Ordinance,
1984;
(b) in our opinion
(i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in
conformity with the Companies Ordinance, 1984, and are in agreement with the books of account and
are further in accordance with accounting policies consistently applied;
(ii) the expenditure incurred during the year was for the purpose of the Company's business; and
(iii) the business conducted, investments made and the expenditure incurred during the year were in
accordance with the objects of the Company;
(c) in our opinion and to the best of our information and according to the explanations given to us, the balance
sheet, profit and loss account, cash flow statement and statement of changes in equity together with the
notes forming part thereof conform with approved accounting standards as applicable in Pakistan, and, give
the information required by the Companies Ordinance, 1984, in the manner so required and respectively give
a true and fair view of the state of the Company's affairs as at June 30, 2008 and of the profit, its cash flows
and changes in equity for the year then ended; and
(d) in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was
deducted by the Company and deposited in the Central Zakat Fund established under section 7 of that
Ordinance.
47
Annual Report 2008
Chartered Accountants
Islamabad: October 08, 2008
Balance Sheet
as at June 30, 2008
2008 2007
Note Rs ‘000 Rs ‘000
SHARE CAPITAL AND RESERVES
Share capital
Authorised 6 1,000,000 1,000,000
Issued, subscribed and paid-up 6 710,775 568,620

Reserves and surplus 7 8,988,216 3,210,045
9,698,991 3,778,665
SURPLUS ON REVALUATION OF FREEHOLD LAND 8 1,923,339 1,923,339

11,622,330 5,702,004
DEFERRED LIABILITIES
Provision for staff gratuity 96,889 85,800
CURRENT LIABILITIES AND PROVISIONS
Short term finance 9 – –

Trade and other payables 10 36,688,922 25,393,520
Provision for taxation 1,673,042 1,006,629
38,361,964 26,400,149
CONTINGENCIES AND COMMITMENTS 11
50,081,183 32,187,953
48
Balance Sheet
as at June 30, 2008
2008 2007
PROPERTY, PLANT AND EQUIPMENT
Operating assets 12 2,459,520 2,730,262

Capital work-in-progress 13 442,431 217,683
Stores and spares held for capital expenditure 27,701 20,190
2,929,652 2,968,135
LONG TERM INVESTMENTS 14 13,135,579 9,261,339
LONG TERM LOANS AND DEPOSITS 15 12,732 10,954
DEFERRED TAXATION 16 219,302 157,756
CURRENT ASSETS
Stores, spares and loose tools 17 542,500 630,836

Stock-in-trade 18 4,844,853 3,852,646
Trade debts 19 9,207,238 6,234,918
Loans, advances, deposits, prepayments
and other receivables 20 244,695 191,255
Cash and bank balances 21 18,944,632 8,880,114
33,783,918 19,789,769
50,081,183 32,187,953
49
The annexed notes 1 to 38 form an integral part of these financial statements.
Annual Report 2008
Chief Executive Director

Profit & Loss Account
for the year ended June 30, 2008
2008 2007
Sales 22 91,910,703 59,154,780

Less: Discount – 46,248
91,910,703 59,108,532
Reimbursement due from the Government
under import parity pricing formula 23 1,743,602 355,393
93,654,305 59,463,925
Less: Cost of sales 24 89,646,373 58,597,688
Gross profit 4,007,932 866,237
Less: Administration expenses 25 199,336 175,108

Distribution cost 26 19,140 16,716
Finance cost 27 1,244,373 246,545
Other charges 28 235,711 102,151
1,698,560 540,520
2,309,372 325,717
Other income 30 577,851 635,166
Profit before taxation from refinery operations 2,887,223 960,883
Provision for taxation 31 879,653 456,550
Profit after taxation from refinery operations 2,007,570 504,333
Profit after taxation from non-refinery operations

Gain on sale of shares of an associated company 32 3,762,775 –
Dividend income 33 377,429 244,652
4,140,204 244,652
Profit for the year 6,147,774 748,985
Earnings per share – Basic (Rs)

Refinery operations 28.24 7.10
Non-refinery operations 58.25 3.44
37 86.49 10.54
50

Cash Flow Statement
2008 2007
Rs ‘000 Rs ‘000
CASH FLOWS FROM OPERATING ACTIVITIES

Cash receipts from – customers 102,962,499 72,705,853
– others 109,183 98,996
103,071,682 72,804,849
Cash paid for operating costs (80,364,440) (52,789,988)
Cash paid to Government for duties, taxes and other levies (11,312,753) (14,106,632)
Income tax paid (320,261) (231,353)
Net cash flows from operating activities 11,074,228 5,676,876
CASH FLOWS FROM INVESTING ACTIVITIES

Additions to property, plant and equipment (361,046) (81,160)
Proceeds from sale of property, plant and equipment 2,743 954
Proceeds from sale of shares of an associated company 4,438,944 –
Purchase of shares of associated companies (4,542,444) (638,425)
Long term loans and deposits (1,778) 659
Income on bank deposits received 453,471 529,357
Dividends received 454,734 277,697
Net cash flows from investing activities 444,624 89,082
CASH FLOWS FROM FINANCING ACTIVITIES

Long term loans – (4,547,000)
Financial charges paid (1,244,374) (370,678)
Dividends paid (226,812) (30)
Net cash flows from financing activities (1,471,186) (4,917,708)
EFFECT OF EXCHANGE RATE CHANGES 16,852 270
INCREASE IN CASH AND CASH EQUIVALENTS 10,064,518 848,520
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 8,880,114 8,031,594
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 18,944,632 8,880,114
51
Annual Report 2008

Statement of Changes in Equity
Special reserve Surplus on

Share Capital for expansion / General Un-appropriated revaluation of
capital reserve modernisation reserve Profit freehold land Total
Rs ‘000
Balance at June 30, 2006 454,896 5,948 2,187,629 55 381,152 1,923,339 4,953,019
Bonus shares @ 25% related to the year

ended June 30, 2006 113,724 – – – (113,724) – –
Profit for the year ended June 30, 2007 – – – – 748,985 – 748,985
Transfer to reserve for expansion /

modernisation – – 358,533 – (358,533) – –
Balance at June 30, 2007 568,620 5,948 2,546,162 55 657,880 1,923,339 5,702,004

ended June 30, 2007 142,155 – – – (142,155) – –
Final cash dividend @ 40% related to the

year ended June 30, 2007 – – – – (227,448) – (227,448)
Profit for the year ended June 30, 2008 – – – – 6,147,774 – 6,147,774
Transfer to reserve for expansion /

modernisation – – 1,861,770 – (1,861,770) – –
Balance at June 30, 2008 710,775 5,948 4,407,932 55 4,574,281 1,923,339 11,622,330
52

Notes to the Financial Statements
1. LEGAL STATUS AND OPERATIONS
Attock Refinery Limited (the Company) was incorporated in Pakistan on November 8, 1978 as a private limited
company and was converted into a public limited company on June 26, 1979. The registered office of the
company is situated at Morgah, Rawalpindi. Its shares are quoted on the Karachi, Lahore and Islamabad Stock
Exchanges in Pakistan. It is principally engaged in the refining of crude oil.
The Company is a subsidiary of The Attock Oil Company Limited, UK and its ultimate parent is Bay View
International Group S.A.
2. STATEMENT OF COMPLIANCE
These are separate financial statements of the Company. These financial statements have been prepared in
accordance with approved accounting standards as applicable in Pakistan. Approved accounting standards
comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting
Standards Board as are notified under the Companies Ordinance, 1984, provisions of and directives issued
under the Companies Ordinance, 1984. In case requirements differ, the provisions or directives of the Companies
Ordinance, 1984 shall prevail.
3. ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS
In the current year, the Company has adopted IAS 1 (Amendment) - 'Presentation of Financial Statements -
Capital Disclosures'. Adoption of this amendment only impacts the format and extent of disclosures as presented
in note 36.6 to the financial statements.
The following standards and interpretations which have not been applied in these financial statements were
issued by the International Accountancy Standards Board (IASB) but not yet effective:
Effective for periods

beginning on or after
IFRS 7 Financial Instruments: Disclosure April 28,2008

IFRS 8 Operating Segments April 28,2008
IAS 1 Presentation of Financial Statements (Revised 2008) January 1,2009
IAS 23 Borrowing costs (Revised 2008) January 1,2009
IAS 27 Consolidated and separate financial statements (Revised 2008) January 1,2009
IAS 29 Financial Reporting in Hyperinflationary Economies April 28,2008
IAS 32 Financial Instruments: Presentation (Revised 2008) January 1,2009
IFRIC 7 Applying the Restatement Approach under IAS 29 April 28,2008
IFRIC 12 Service Concession Arrangement January 1,2008
IFRIC 13 Customer Loyalty Programmes July 1,2008
IFRIC 14 IAS 19 - The Limit on a defined benefit asset, minimum funding
requirements and their interaction January 1,2008
IFRIC 15 Agreements for the construction of Real Estate January 1,2009
IFRIC 16 Hedges of a Net Investment in a Foreign Operation October 1,2008
53
The management anticipates that adoption of these standards and interpretations in future periods will have
no material impact on the Company's financial statements except for additional disclosures when IFRS 7,
IAS 1 and IFRIC 14 come into effect.
Annual Report 2008
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4.1 Basis of measurement
These financial statements have been prepared under the historical cost convention modified by revaluation
of freehold land referred to in note 4.4 and certain other modifications as required by approved accounting
standards referred to in the accounting policies given below.
4.2 Dividend Appropriation
Dividend is recognised as a liability in the financial statements in the period in which it is declared.
4.3 Taxation
Provision for current taxation is based on taxable income at the current rates of taxation or half percent of
turnover, whichever is higher.
Deferred income tax is accounted for using the balance sheet liability method in respect of all temporary
differences arising between the carrying amount of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are recognised for
all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that
future taxable profits will be available against which the deductible temporary differences can be utilised.
Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse
based on the tax rates that have been enacted. Deferred tax is charged or credited to income except in the
case of items credited or charged to equity in which case it is included in equity.
4.4 Property, plant and equipment
a) Cost
Operating fixed assets except freehold land are stated at cost less accumulated depreciation. Freehold
land is stated at revalued amount. Capital work-in-progress and stores held for capital expenditure are
stated at cost. Cost in relation to certain plant and machinery items include borrowing cost related to
the financing of major projects during construction phase.
b) Depreciation
Operating assets depreciation is calculated using the straight-line method to allocate their cost over
their estimated useful lives at the rates specified in note 12.
c) Repairs and maintenance
Maintenance and normal repairs, including minor alterations, are charged to income as and when incurred.
Renewals and improvements are capitalised and the assets so replaced, if any, are retired.
d) Gains and losses on deletion

54
Gains and losses on deletion of assets are included in income currently.
4.5 Impairment of non-financial assets
Assets that have an indefinite useful life, for example land, are not subject to amortisation or depreciation and
are tested annually for impairment. Assets that are subject to depreciation / amortisation are reviewed for
impairment at each balance sheet date or whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's
carrying amount exceeds its recoverable amount. Reversals of the impairment losses are restricted to the
original cost of the asset. An impairment loss or reversal of impairment loss is recognised in the profit and loss
account.
4.6 Investments in associated and subsidiary companies
These investments are initially valued at cost. At subsequent reporting dates, the Company reviews the carrying
amount of the investment to assess whether there is any indication that such investments have suffered an
impairment loss. If any such indication exists, the recoverable amount is estimated in order to determine the
extent of the impairment loss, if any. Such impairment losses or reversal of impairment losses are recognised
in the profit and loss account. The profits and losses of subsidiary and associated companies are carried in
the financial statements of the subsidiary and associated company and are not dealt with for the purpose of
the financial statements of the Company except to the extent of dividend declared by the subsidiary and
associated companies.
4.7 Stores, spares and loose tools
These are valued at moving average cost less allowance for obsolete items. Items in transit are stated at
invoice value plus other charges paid thereon.
4.8 Stock-in-trade
Stock-in-trade is valued at the lower of cost and net realisable value. Crude oil in transit is valued at cost
comprising invoice value. Cost in relation to crude oil is determined on the basis of annual average cost of
purchases during the year on the principles of import parity and in relation to semi-finished and finished products
it represents the cost of crude oil and refining charges consisting of direct expenses and appropriate production
overheads. Direct expenses are arrived at on the basis of average cost for the year per barrel of throughput.
Production overheads, including depreciation, are allocated to throughput proportionately on the basis of
nameplate capacity.
Net realisable value in relation to finished product represents selling prices in the ordinary course of business
less costs necessarily to be incurred for its sale, as applicable, and in relation to crude oil represents replacement
cost at the balance sheet date.
4.9 Foreign currency translation
Transactions in foreign currencies are converted into rupees at the rates of exchange ruling on the date of the
transaction. All monetary assets and liabilities denominated in foreign currencies at the year end are translated
at exchange rates prevailing at the balance sheet date. Exchange differences are dealt with through the profit 55
and loss account.
Annual Report 2008
4.10 Revenue recognition
Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and
the revenue can be reliably measured. Revenue is recognised as follows:
i) Revenue from sales is recognised on delivery of products ex-refinery to the customers with the exception
that Naphtha export sales are recognised on the basis of products shipped to customers.
ii) The Company is operating under the import parity pricing formula, as modified from time to time, whereby
it is charged the cost of crude on 'import parity' basis and is allowed product prices equivalent to the
'import parity' price, calculated under prescribed parameters.
Effective July 1, 2007, the Government made certain modifications in the prescribed parameters effectively
reducing the price of Kerosene oil, Light Diesel Oil (LDO) and JP-8 in 2007 and 2008. The Government
has further modified the refineries pricing formula in August, 2008 whereby the 10% duty included in
pricing of HSD has been cut to 7.5% and the motor gasoline pricing has been unilaterally revised by
linking its price to Arab Gulf 95 RON prices and calculating the price of 87 RON motor gasoline on a
unitary method basis. This revision will adversely affect the pricing of HSD and motor gasoline which
are Company's two major products.
Earlier in July, 2002, the Government had modified the pricing formula that was applicable to the Company
restricting the distribution of net profits after tax (if any) from refinery operations to 50% of paid-up
capital as at July 1, 2002 and diverting the surplus profits, if any, to a special reserve to offset any
future loss or make investment for expansion or upgradation of Refinery. Further the Government had
abolished the minimum rate of return of 10% which continues to be contested by the Company as it
represented to the Government that the already existing agreement for guaranteed return could be
modified only with the mutual consent of both the parties.
iii) Dividend income is recognised when the right to receive dividend is established.
iv) Other income is recognised on accrual basis.
4.11 Borrowing cost
Borrowing cost related to the financing of major projects during construction phase is capitalised. All other
borrowing costs are expensed as incurred.
4.12 Employee retirement benefits
The main features of the retirement benefit schemes operated by the Company for its employees are as follows:
i) Defined benefits plans
The Company operates a pension plan for its management staff and a gratuity plan for its non-management
staff. Pension plan is invested through an approved trust fund while the gratuity plan is book reserve
plan. Contributions are made in accordance with actuarial recommendations. Actuarial valuations are
conducted through an independent actuary, annually using projected unit credit method. The obligation
at the balance sheet date is measured at the present value of the estimated future cash outflows.
Unrealised net gains and losses are amortised over the expected remaining service of current members.
ii) Defined contribution plans
56 The company operates an approved contributory provident fund for all employees. Equal monthly
contribution is made both by the Company and the employee to the fund at the rate of 10% of basic
salary.
4.13 Employees compensated absences
The Company also provides for compensated absences for all employees in accordance with the rules of the
Company.
4.14 Financial Instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the instrument and de-recognised when the Company loses control of the contractual rights that
comprise the financial asset and in case of financial liability when the obligation specified in the contract is
discharged, cancelled or expired. The particular measurement methods adopted are disclosed in the individual
policy statements associated with each item as shown below:
a) Investment in associated and subsidiary companies
The measurement methods adopted for investment in associated and subsidiary companies are disclosed
in note 4.6.
b) Trade and other payables
Liabilities for trade and other amounts payable including amounts payable to related parties are carried
at cost which is the fair value of the consideration to be paid in the future for goods and services received.
c) Provisions
Provisions are recognised when a Company has a legal or constructive obligation as a result of past
event and it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate of the amount can be made.
d) Trade debts and other receivables
Trade debts and other receivables are recognised and carried at original invoice amount / cost less an
allowance for any uncollectible amounts.
e) Cash and cash equivalents
Cash in hand and at banks are carried at fair value. For the purpose of cash flow statement, cash and
cash equivalents consist of cash in hand, balances in banks and highly liquid short term investments.
5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of financial statements in conformity with the approved accounting standards requires the use
of certain critical accounting estimates. It also requires management to exercise its judgment in the process
of applying the Company's accounting policies. Estimates and judgments are continually evaluated and are
based on historical experience, including expectation of future events that are believed to be reasonable under
the circumstances. The areas where various assumptions and estimates are significant to the Company's
financial statements or where judgment was exercised in application of accounting policies are as follows:
i) Estimate of recoverable amount of investment in National Refinery Limited - note 14.1
ii) Revaluation surplus on freehold land - note 12.1
iii) Provision for taxation

57
iv) Provision for retirement benefits - note 29
Annual Report 2008
2008 2007
Rs ‘000 Rs ‘000
6. SHARE CAPITAL
Authorised
100,000,000 (2007: 100,000,000) ordinary shares of Rs 10 each 1,000,000 1,000,000
Issued, subscribed and paid up
Shares issued for cash
8,000,000 ordinary shares of Rs 10 each 80,000 80,000
Shares issued as fully paid bonus shares
63,077,500 (2007: 48,862,000) ordinary shares of Rs 10 each 630,775 488,620
The Attock Oil Company Limited held 40,032,687 (2007: 31,274,150) ordinary shares and Attock Petroleum
Limited held 1,000,000 (2007: nil) ordinary shares at the year end.
2008 2007
Rs ‘000 Rs ‘000
7. RESERVES AND SURPLUS
Capital reserve
Liabilities taken over from The Attock Oil Company Limited
no longer required 4,800 4,800
Capital gain on sale of building 654 654
Insurance and other claims realised relating to
pre-incorporation period 494 494
5,948 5,948
Special reserve for expansion / modernisation - note 7.1

Additional revenue under processing fee formula related
to 1990-91 and 1991-92 32,929 32,929
Surplus profits under the import parity pricing formula 4,375,003 2,513,233
4,407,932 2,546,162
Revenue reserve
General reserve 55 55
Surplus - unappropriated profit 4,574,281 657,880
4,574,336 657,935
8,988,216 3,210,045
7.1 Represents amounts retained as per stipulations of the Government under the pricing formula and is available
58 only for offsetting any future loss or making investment in expansion or upgradation of the refinery. Transfer
to / from special reserve is recognised at each quarter end and is reviewed for adjustment based on profit /
loss on an annual basis. The company has incurred capital expenditure of Rs 3,770 million on upgradation
and expansion projects from July 1, 1997 to June 30, 2008 (July 1, 1997 to June 30, 2007: Rs 3,496 million).
8. SURPLUS ON REVALUATION OF FREEHOLD LAND

This represents surplus over book value resulting from revaluation of freehold land as referred to in note 12.1
and is not available for distribution to shareholders.
9. SHORT TERM FINANCE

During the year, the Company has negotiated running finance facilities with various banks and accepted facility
offer letters to the extent of Rs 3.5 billion, which were unutilised at the year end. As and when required, these
facilities shall be secured by joint hypothecation by way of 1st registered charges over the Company's current
assets.
2008 2007
Rs ‘000 Rs ‘000
10. TRADE AND OTHER PAYABLES

Creditors – note 10.1 24,371,362 18,020,915
Due to The Attock Oil Company Limited – Holding Company 256,739 275,108
Due to associated companies
Pakistan Oilfields Limited 1,685,628 1,384,104
Attock Petroleum Limited – 1,430
Attock Information Technology Services (Private) Limited 17,429 5,543
Accrued liabilities and provisions – note 10.1 1,714,975 737,635
Due to the Government under pricing formula 7,138,356 4,707,073
Advance payments from customers 2,677 5,533
Sales tax payable 1,037,929 7,199
Workers' Welfare Fund 196,966 131,989
Workers' Profit Participation Fund – note 10.2 181,441 65,840
Deposits from customers adjustable against freight
and Government levies payable on their behalf 376 1,271
Payable to statutory authorities in respect of petroleum
development levy and excise duty 13,099 –
Excess crude oil freight recovered through inland freight
equalisation margin 21,479 –
Security deposits 48,890 48,940
Unclaimed dividends 1,576 940
36,688,922 25,393,520
10.1 These balances include amounts retained from payments to crude suppliers for purchase of local crude as per
the directives of the Ministry of Petroleum and Natural Resources (the Ministry). Further, as per directive of
the Ministry such withheld amounts are being retained in designated 90 days interest bearing accounts. The
amounts retained alongwith accumulated profits amounted to Rs 6,630.371 million (2007: Rs 10,173.029
million).
2008 2007
Rs ‘000 Rs ‘000
10.2 Workers' Profit Participation Fund

Balance at the beginning of the year 65,840 36,869
Add: Interest on funds utilised in the Company's business 3,889 528 59
69,729 37,397
Less: Amount paid to the Fund 65,959 37,261
Annual Report 2008
3,770 136
Add: Amount allocated for the year - notes 28 and 33 177,671 65,704
181,441 65,840
2008 2007
Rs ‘000 Rs ‘000
11. CONTINGENCIES AND COMMITMENTS

Contingencies:
i) Performance and commitment guarantees arranged by the
Company on behalf of Attock Gen Limited (AGL),
an associated company, as main sponsors – 214,255
ii) Guarantees issued by banks on behalf of the Company 300 300
iii) Claims for land compensation contested by the Company 1,300 1,300
iv) Price adjustment related to crude oil purchases as referred to in
note 24.1, the amount of which can not be presently quantified – –
Commitments outstanding:
i) Capital expenditure 43,959 55,424
ii) Letters of credit other than for capital expenditure 172,722 125,775
12. OPERATING ASSETS

Freehold Buildings Furniture,
land on freehold Plant & Computer fixtures
(note 12.1) land machinery equipment and equipment Vehicles Total
Rs ‘000
COST
As at July 1, 2006 1,927,250 70,356 3,795,901 51,877 60,607 62,635 5,968,626
Additions during the year – 14,375 113,947 3,687 1,546 7,975 141,530
Disposals during the year – – – – (188) (290) (478)
As at June 30, 2007 1,927,250 84,731 3,909,848 55,564 61,965 70,320 6,109,678
Disposals during the year – – (23,722) (10,244) (10,075) (852) (44,893)
As at June 30, 2008 1,927,250 101,649 3,985,097 47,676 57,946 73,954 6,193,572
DEPRECIATION
As at July 1, 2006 – 28,639 2,878,157 39,806 33,117 43,198 3,022,917
Charge for the year – 3,908 330,939 8,999 4,784 8,239 356,869
On disposals – – – – (80) (290) (370)
As at June 30, 2007 – 32,547 3,209,096 48,805 37,821 51,147 3,379,416
On disposals – – (17,578) (10,215) (8,225) (852) (36,870)
As at June 30, 2008 – 38,120 3,559,632 41,573 35,385 59,342 3,734,052
WRITTEN DOWN VALUE
As at June 30, 2007 1,927,250 52,184 700,752 6,759 24,144 19,173 2,730,262
As at June 30, 2008 1,927,250 63,529 425,465 6,103 22,561 14,612 2,459,520
Annual rate of depreciation (%) – 5 10 20 10 20
60 12.1 Value of freehold land includes revaluation surplus of Rs 1,923.339 million arising from revaluation of freehold
land in January 2001 carried out by an independent valuer. Valuation was made on the basis of market value.
The original cost of the land as at June 30, 2008 is Rs 3.911 million.
2008 2007
Rs ‘000 Rs ‘000
12.2 The depreciation charge for the year has been allocated as follows:
Cost of sales 378,170 341,975
Administration expenses 12,405 13,361
Distribution cost 298 900
Desalter operating cost 633 633
391,506 356,869
13. CAPITAL WORK-IN-PROGRESS

Civil works 2,191 2,487
Plant and machinery 411,820 186,977
Pipeline project 28,420 28,219
442,431 217,683
14. LONG TERM INVESTMENTS – AT COST

2008 2007
% age % age
holding Rs ‘000 holding Rs ‘000
Associated companies
Quoted
National Refinery Limited (NRL) – note 14.1 25 8,046,635 25 8,046,635
19,991,640 (2007: 16,659,700 ) fully paid ordinary
shares including 3,331,940 (2007 : Nil) bonus shares
of Rs 10 each
Market value as at June 30, 2008: Rs 5,947 million
(June 30, 2007 : Rs 5,681 million)
Attock Petroleum Limited (APL) – note 14.2 21.70 4,438,944 21.70 668,204
10,417,680 (2007 : 8,681,400 ) fully paid ordinary
shares of Rs 10 each
Market value as at June 30, 2008 : Rs 4,503 million
(June 30, 2007 : Rs 4,352 million)
Unquoted
Attock Gen Limited (AGL) – note 14.3 30 643,500 30 540,000
6,435,000 (2007 : 5,400,000) fully paid ordinary
Attock Information Technology Services (Private) Limited 10 4,500 10 4,500

450,000 (2007 : 450,000) fully paid ordinary shares
of Rs 10 each 13,133,579 9,259,339
61
Subsidiary company
Unquoted
Annual Report 2008
Attock Hospital (Private) Limited 100 2,000 100 2,000

200,000 (2007: 200,000) fully paid ordinary shares
of Rs 10 each
13,135,579 9,261,339
All associated and subsidiary companies are incorporated in Pakistan.

14.1 Based on a valuation analysis carried out by an external investment advisor engaged by the Company, the
recoverable amount of investment in NRL exceeds its carrying amount. The recoverable amount has been
estimated based on a value in use calculation. These calculations have been made on discounted cash flow
based valuation methodology which assumes gross profit margin of 5.4% (2007: 6.4%), terminal growth rate
of 4% (2007: 5%) and capital asset pricing model based discount rate of 18.64% (2007: 14.30%).
Cost
Number of shares Rs ‘000
14.2 Investment in APL

As at July 1, 2007 (including 3,500,000 bonus shares) 8,681,400 668,204
Bonus shares received during the year 1,736,280 –
Disposal of shares during the year (10,417,680) (668,204)
Purchase of shares during the year 10,417,680 4,438,944
As at June 30, 2008 10,417,680 4,438,944
14.3 Investment in AGL

As at July 1, 2007 5,400,000 540,000
Right shares acquired during the year 1,035,000 103,500
As at June 30, 2008 6,435,000 643,500
2008 2007
Rs ‘000 Rs ‘000
15. LONG TERM LOANS AND DEPOSITS

Loans to employees – considered good – note 15.1 25,879 21,079
Less: Amounts due within next twelve months shown under
current assets – note 20 (14,095) (10,990)
11,784 10,089
Security deposits 948 865
12,732 10,954
15.1 Loans to employees are for miscellaneous purposes which are recoverable in 24, 36, and 60 equal monthly
installments depending on case to case basis and are secured by a charge on the asset purchased and / or
amount due to the employee against provident fund or a third party guarantee. These are interest free loans.
These include an amount of Rs 4.366 million (2007: Rs 3.552 million) receivable from Executives of the
Company and does not include any amount receivable from Directors or Chief Executive. The maximum amount
due from executives of the Company at the end of any month during the year was Rs 4.720 million (2007:
Rs 3.805 million).
2008 2007
Rs ‘000 Rs ‘000
15.2 Reconciliation of carrying amount of loans to executives:

62
Opening balance as at July 1 3,552 2,233
Add: Disbursements during the year 7,164 3,922
10,716 6,155
Less: Repayments during the year 6,350 2,603
Closing balance as at June 30 4,366 3,552
2008 2007
Rs ‘000 Rs ‘000
16. DEFERRED TAXATION

Debit balances arising on
Provisions for obsolete stores, doubtful debts and gratuity 54,737 48,980
Difference between accounting and tax depreciation 164,565 124,673
Finance lease arrangements – (15,897)
219,302 157,756
17. STORES, SPARES AND LOOSE TOOLS

Stores (including items in transit
Rs 99.03 million; 2007: Rs 119.67 million) 351,123 446,579
Spares 228,053 219,661
Loose tools 624 596
579,800 666,836
Less: Provision for slow moving items – note 17.1 37,300 36,000
542,500 630,836
17.1. Provision for slow moving items

Opening balance 36,000 34,500
Add: Provision for the year 1,300 1,500
37,300 36,000
18. STOCK-IN-TRADE
Crude oil – in stock 902,525 1,488,648
Crude oil – in transit 375,967 176,064
1,278,492 1,664,712
Semi-finished products 436,792 311,633
Finished products – note 18.1 3,129,569 1,876,301
4,844,853 3,852,646
18.1 Finished products include stocks carried at net realisable value of Rs 2 million (2007: Rs 236 million).
Adjustments amounting to Rs 1 million (2007: Rs 43.8 million) have been made to closing inventory to write
down stocks of finished products to their net realizable value.
19. TRADE DEBTS

All debtors are unsecured and considered good. These include amount receivable from associated companies
Attock Petroleum Limited Rs 2,327 million (2007: Rs 1,011 million) and Pakistan Oilfields Limited Rs 11 million
63
(2007: Rs nil).
Annual Report 2008
2008 2007
Rs ‘000 Rs ‘000
20. LOANS, ADVANCES, DEPOSITS, PREPAYMENTS

AND OTHER RECEIVABLES
Loans and advances – considered good
Current portion of long-term loans to employees – note 15 14,095 10,990
Advances to suppliers 61,874 19,301
Advances to employees 2,236 1,729
78,205 32,020
Deposits, prepayments and current account

balances with statutory authorities
Trade deposits 286 286
Short term prepayments 14,680 17,238
Current account balances with statutory authorities in respect
of petroleum development levy and excise duty – 287
14,966 17,811
Other receivables
Due from subsidiary company
Attock Hospital (Private) Limited 1,279 1,966
Due from associated companies
National Refinery Limited 2,610 4,677
Attock Petroleum Limited 9,308 –
Attock Leisure and Management Associates (Pvt) Limited 115 –
Attock Gen Limited 5,394 2,415
National Cleaner Production Centre Foundation 2,992 2,465
Attock Cement Pakistan Limited – 155
Due from Staff Pension Fund 15,404 4,097
Income accrued on bank deposits 108,888 78,867
Crude oil freight recoverable through inland freight equalisation margin – 39,221
Other receivables 5,534 7,561
151,524 141,424
244,695 191,255
Loans to employees include Rs 2.852 million (2007: Rs 2.265 million ) due from executives of the Company
and does not include any amount receivable from Directors or the Chief Executive.
2008 2007
Rs ‘000 Rs ‘000
21. CASH AND BANK BALANCES

64
Cash in hand 910 292
With banks:
Current accounts 2,703 2,790

Deposit accounts 6,317,269 6,081,864
Savings accounts (including US $ 366,766; 2007: US $ 379,624) 12,623,750 2,795,168
18,944,632 8,880,114
21.1 Balances with banks include Rs 4,817.269 million (2007: 5,381.864 million) in respect of deposits placed
in a 90-day interest-bearing account consequent to directives of the Ministry of Petroleum & Natural
Resources on account of amounts withheld alongwith related interest earned thereon, as referred to in
note 10.1.
21.2 Bank deposits of Rs. 0.300 million (2007: 0.300 million) were under lien with bank against a bank guarantee
issued on behalf of the Company.
21.3 Balances with banks include Rs 48.890 million (2007: Rs 48.940 million) in respect of security deposits
received.
21.4 Balances with banks earned weighted average interest / mark-up @ 9.61% (2007: @ 9.73%) per annum.
2008 2007
Rs ‘000 Rs ‘000
22. SALES
Gross sales (excluding Naphtha export sales) 93,428,851 66,083,779
Naphtha export sales 12,509,719 8,232,840

Less: Cost of Naphtha purchased from third parties and
related handling charges recovered 1,684,095 1,175,285
10,825,624 7,057,555
Less: Duties, taxes and levies - note 22.1 12,343,772 13,986,554
91,910,703 59,154,780
22.1 Duties, taxes and levies

Sales tax 10,418,456 8,166,096
Development surcharge 1,903,321 5,356,523
Custom duties and other levies 21,995 463,935
12,343,772 13,986,554
23. REIMBURSEMENT DUE FROM THE GOVERNMENT

UNDER IMPORT PARITY PRICING FORMULA
This represents amount due from the Government of Pakistan on account of shortfall in ex-refinery prices of
certain petroleum products under the import parity pricing formula.
65
Annual Report 2008
2008 2007
Rs ‘000 Rs ‘000
24. COST OF SALES

Opening stock of semi-finished products 311,633 278,876
Crude oil consumed - note 24.1 88,115,513 56,314,521
Transportation and handling charges 1,174,592 1,016,615
Salaries, wages and other benefits - note 24.2 296,102 250,262
Printing and stationery 1,922 1,822
Chemicals consumed 354,582 347,235
Fuel and power 449,483 279,486
Rent, rates and taxes 6,047 6,525
Telephone and telex charges 2,283 1,602
Professional charges for technical services 3,506 2,455
Insurance 52,935 46,544
Repairs and maintenance (including stores
and spares consumed Rs 64.345 million; 2007: Rs 65.330 million) 162,555 * 118,433
Staff transport and traveling 10,449 9,815
Cost of receptacles 15,912 8,619
Research and development 749 109
Depreciation 378,170 341,975
91,336,433 59,024,894
Closing stock of semi-finished products (436,792) (311,633)
90,899,641 58,713,261
Opening stock of finished products 1,876,301 1,760,728

Closing stock of finished products (3,129,569) (1,876,301)
(1,253,268) (115,573)
89,646,373 58,597,688
* includes consumables wrongly classified as fixed assets written off during the year having book value of
Rs 7,269 thousand.
2008 2007
Rs ‘000 Rs ‘000
24.1 Crude oil consumed

Stock at the beginning of the year 1,664,712 1,484,204
Purchases - note 38.3(i) 87,729,294 56,495,029
89,394,006 57,979,233
Stock at the end of the year (1,278,493) (1,664,712)
66 88,115,513 56,314,521
Certain crude purchases have been recorded based on provisional prices notified by the Government and may
require adjustment in subsequent periods. Cost of purchases include Rs 706.120 million (2007: Nil) related
to purchases in prior years.
24.2 Salaries, wages and other benefits under cost of sales, administration expenses, distribution cost and income
from crude desalter operations include the Company's contribution to the Provident Fund amounting to
Rs 13.245 million (2007: Rs 11.552 million).
2008 2007
Rs ‘000 Rs ‘000
25. ADMINISTRATION EXPENSES

Staff transport, traveling and entertainment 12,768 12,065
Electricity, gas and water 5,570 4,430
Auditor's remuneration - note 25.1 1,074 986
Legal and professional charges 4,145 5,874
Repairs and maintenance 33,605 21,490
Subscription 5,214 5,272
Publicity 3,061 4,044
Scholarship scheme 1,909 2,055
Insurance 790 867
Donations* 324 415
Training expenses 2,582 745
Other expenses 240 52
199,336 175,108
* No director or his spouse had any interest in the donee institutions.
25.1 Auditor's remuneration

Statutory audit 440 350
Review of half yearly accounts, audit of consolidated
accounts, staff funds and special certifications 520 553
Out of pocket expenses 114 83
1,074 986
26. DISTRIBUTION COST

Staff transport, traveling and entertainment 652 568
Telephone and telex charges 221 210
Electricity, gas, fuel and water 1,857 1,476
Printing and stationery 137 81
Repairs and maintenance including packing and other stores consumed 2,066 1,295
Rent, rates and taxes 339 317
Legal and professional charges 144 144
Cost of samples – 3 67
Depreciation 298 900
19,140 16,716
Annual Report 2008
2008 2007
Rs ‘000 Rs ‘000
27. FINANCE COST

Interest / mark-up on
Long term loans – 233,361
Workers' Profit Participation Fund - note 10.2 3,888 528
Bank and other charges 241 389
Exchange loss 1,240,244 12,267
1,244,373 246,545
28. OTHER CHARGES
Employees' retirement benefits
Staff gratuity benefits 20,764 15,321
Staff pension benefits 597 8,572

Less: Contribution to subsidiary company (995) (955)
(398) 7,617
Contribution to employees old age benefits scheme 2,580 2,202
22,946 25,140
Fixed assets shortages / damages written off 648 –

Provision for slow moving stores 1,300 1,500
Stores written off – 13
Workers' Profit Participation Fund 154,934 51,819
235,711 102,151
68
29. EMPLOYEES' DEFINED BENEFIT PLANS

The latest actuarial valuation of the employees' defined benefit plans was conducted at June 30, 2008 using
the projected unit credit method. Details of the defined benefit plans are:
Defined benefit Defined benefit

Pension plan Gratuity plan
2008 2007 2008 2007
Rs ‘000 Rs ‘000
a) The amounts recognised in the profit and loss account:
Current service cost 13,773 12,263 3,818 3,099

Interest on obligation 31,449 27,772 12,890 10,076
Expected return on plan assets (39,591) (30,235) – –
Contribution from an associated company (144) (127) – –
Net actuarial losses / (gains) recognised during the year (4,890) (1,101) 4,056 2,146
597 8,572 20,764 15,321
b) The amounts recognised in the balance sheet:
Fair value of plan assets 385,053 359,485 – –

Present value of defined benefit obligations (321,136) (291,335) (152,656) (121,894)
63,917 68,150 (152,656) (121,894)
Unrecognised actuarial gains / (losses) (48,513) (64,053) 55,767 36,094
Net liability 15,404 4,097 (96,889) (85,800)
c) Movement in the present value of defined benefit obligation:
Present value of defined benefit obligation as at July 1 291,335 263,054 121,894 96,058
Interest cost 31,449 27,772 12,890 10,076
Benefits paid (11,158) (11,146) (9,675) (5,321)
Actuarial (gains) / losses (4,263) (608) 23,729 17,982
Present value of defined benefit obligation as at June 30 321,136 291,335 152,656 121,894
d) Changes in the fair value of plan assets:
Fair value of plan assets as at July 1 359,485 280,495 – –

Expected return 39,591 30,235 – –
Benefits paid (11,158) (11,146) – –
Contributions by employer 11,904 10,971 – –
Contributions by associated company 144 127 – –
Actuarial gains / (losses) (14,913) 48,803 – –
Fair value of plan assets as at June 30 385,053 359,485 – – 69
Actual return on plan assets 24,677 79,038 – –

Annual Report 2008
Expected contributions to the defined benefit pension plans for the year ending June 30, 2008 are Rs 12.6
million.

2008 2007 2008 2007
Rs ‘000 Rs ‘000
e) The major categories of plan assets:
Investment in equities 119,841 109,498 – –

Investment in mixed funds 103,448 136,837 – –
Cash 161,764 113,150 – –
385,053 359,485 – –
f) Significant actuarial assumptions at the

balance sheet date:
Discount rate 13.25% 11.00% – –

Expected return on plan assets 13.25% 11.00% – –
Future salary increases 11.09% 8.89% – –
Future pension increases 7.86% 5.71% – –
2008 2007 2006 2005 2004

Rs ‘000
g) Comparison for five years:
Defined Benefit Pension Plan

Present value of defined benefit obligation (321,136) (291,335) (263,054) (215,382) (190,998)
Fair value of plan assets 385,053 359,485 280,495 225,121 196,918
Surplus / (deficit) 63,917 68,150 17,441 9,739 5,920
Actuarial (gains) / losses on plan liabilities (4,262) (609) 23,265 9,382 1,303
Actuarial (gains) / losses on plan assets 14,914 (48,803) 29,017 13,388 9,384
Defined Benefit Gratuity Plan

Fair value of plan assets – – – – –
Deficit (152,656) (121,894) (96,058) (88,578) (80,832)
Actuarial (gains) / losses on plan liabilities 23,729 17,982 (1,087) 3,611 16,991
Actuarial (gains) / losses on plan assets – – – – –
70
2008 2007
Rs ‘000 Rs ‘000
30. OTHER INCOME

Income from financial assets
Income on bank deposits 483,492 569,024
Exchange gain 16,852 270
500,344 569,294
Income from non – financial assets

Income from crude decanting 15,262 11,205
Income from crude desalter operations – note 30.1 9,715 9,265
Insurance agency commission 4,140 4,719
Rental income 6,983 3,057
Sale of scrap 12,930 10,613
Profit on disposal of fixed assets 2,637 846
Calibration charges 2,892 3,742
Handling and service charges 16,586 15,901
Registration charges from carriage contractors 200 –
Penalties from carriage contractors 4,816 3,888
Old liabilities written back – 694
Miscellaneous 1,346 1,942
77,507 65,872
577,851 635,166
30.1 Income from crude desalter operations
Income 51,997 43,928

Less: Operating costs
Salaries, wages and other benefits – note 24.2 1,080 1,882
Chemical consumed 8,098 7,058
42,282 34,663
9,715 9,265
31. PROVISION FOR TAXATION

Current – for the year 1,054,100 476,500
– for prior years (112,900) – 71
941,200 476,500
Deferred – for the year (61,547) (19,950)
Annual Report 2008
879,653 456,550
2008 2007
% %
31.1 Reconciliation between the average effective tax rate and

the applicable tax rate.
Applicable tax rate 35.00 35.00

Tax effect of:
Income chargeable to tax at special rate and other differences (0.62) 12.51
Prior years (3.91) –
Average effective tax rate charged to profit and loss account 30.47 47.51
2008 2007
Rs ‘000 Rs ‘000
32. GAIN ON SALE OF SHARES OF AN ASSOCIATED COMPANY
Proceeds from sale of shares of Attock Petroleum Limited

(net of expenses incurred on disposal) 4,430,979 –
Cost of investment disposed off (668,204) –
3,762,775 –
33. DIVIDEND INCOME
Dividend income from associated companies

Attock Petroleum Limited 121,540 69,451
454,734 277,698
Less: Related charges

Taxation @ 10% ( 2007: 5%) 45,473 13,885
77,305 33,046
377,429 244,652
72
34. RELATED PARTY TRANSACTIONS
Attock Oil Company Limited holds 56.32% (2007: 55.00%) shares of the Company at the year end. Therefore,
all subsidiaries and associated undertakings of Attock Oil Company Limited are related parties of the Company.
The related parties also comprise of directors, major shareholders, key management personnel, entities over
which the directors are able to exercise significant influence on financial and operating policy decisions and
employees' funds. Amount due from and due to these undertakings are shown under receivables and payables.
The remuneration of Chief Executive, directors and executives is disclosed in note 35 to the financial statements.
2008 2007
Rs ‘000 Rs ‘000
Sale of goods 24,713,370 12,941,980
Sale of services 92,585 76,773
24,805,955 13,018,753
Purchase of goods 10,154,897 7,591,742

Purchase of services 409,827 311,331
10,564,724 7,903,073
Holding company
Sale of services 424 285

1,110,508 1,302,831
Subsidiary company
Sale of goods 441 614
22,960 19,448
Contribution to employees' pension and provident funds 25,149 22,523
73
Annual Report 2008
35. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES

The aggregate amounts charged in the accounts for remuneration, including benefits and perquisites, were
as follows:
Chief Executive Directors Executives
2008 2007 2008 2007 2008 2007
Rs ‘000
Managerial remuneration / honorarium 3,525 3,910 * 1,219 1,219 24,555 22,188

Company's contribution to provident
and pension funds 731 789 – – 5,503 4,739
Housing and utilities 2,208 1,037 – – 17,585 11,262
Leave passage 420 330 – – 2,963 2,101
6,884 6,066 1,219 1,219 50,606 40,290
No of person(s) 1 1 3 3 22 20
Housing and utilities of executives include cash allowance for fuel and maintenance in respect of limited use
of Company's cars provided to 12 executives for the period January 1, 2008 to June 30, 2008.
* This includes payments to Chief Executive of Rs 789 thousand representing arrears of salary for the period
February 2005 to June 30, 2006.
35.1 In addition, the Chief Executive and 22 (2007: 18) executives were provided with limited use of the Company's
cars. The Chief Executive and all executives were provided with medical facilities and 5 (2007: 7) executives
were provided with unfurnished accommodation in Company owned bungalows. Limited residential telephone
facility was also provided to the Chief Executive and 12 (2007: 11) executives.
Fee paid to directors during the year was Rs nil (2007: Rs nil).
36. FINANCIAL INSTRUMENTS

36.1 Financial assets and liabilities
2008 2007
Interest / Non-interest / Interest / Non-interest /
mark-up bearing mark-up bearing Total mark-up bearing mark-up bearing Total
Rs ‘000
Financial assets:
Maturity upto one year
Trade debts – 9,207,238 9,207,238 – 6,234,918 6,234,918
Loans, advances, deposits and
other receivables – 168,141 168,141 – 154,428 154,428
Cash and bank balances
Foreign currency – US $ 24,940 702 25,642 22,815 202 23,017
Local currency 18,916,079 2,911 18,918,990 8,854,217 2,880 8,857,097
Maturity after one year
Long term investments – 13,135,579 13,135,579 – 9,261,339 9,261,339
Long term loans and deposits – 12,732 12,732 – 10,954 10,954
18,941,019 22,527,303 41,468,322 8,877,032 15,664,721 24,541,753
Financial liabilities:
Trade and other payables 6,630,615 30,055,630 36,686,245 9,471,565 15,916,422 25,387,987
74 Staff gratuity 96,889 – 96,889 85,800 – 85,800
6,727,504 30,055,630 36,783,134 9,557,365 15,916,422 25,473,787
Off balance sheet items:

Commitments (other than letters of credit) – 43,959 43,959 – 55,424 55,424
Letters of credit – 172,722 172,722 – 125,775 125,775
Bank guarantees – 300 300 – 214,555 214,555
– 216,981 216,981 – 395,754 395,754
The carrying value of financial assets and liabilities approximates their fair value except for long term investments,
which are stated at cost.
36.2 Credit risk

The Company's credit risk is primarily attributable to its trade debts and placements with banks. The sales
are essentially to six oil marketing companies and reputable foreign customers. The Company's placements
are with banks having satisfactory credit rating. Due to the high credit worthiness of corresponding parties
the credit risk is considered minimal.
36.3 Currency risk

Foreign exchange risk arises mainly from future commercial transactions or receivables and payables that exist
due to transactions denominated in foreign currencies. Financial assets include Rs 840.260 million (2007:
Rs 726.019 million) and financial liabilities include Rs 18,469.791 million (2007: Rs 10,714.731 million) which
were subject to foreign exchange risk.
36.4 Interest / Mark-up risk

Financial assets include Rs 18,941 million (2007: Rs 8,877 million) and financial liabilities include Rs 6,727
million (2007: Rs 9,557 million) which were subject to interest rate risk.
36.5 Liquidity risk

Liquidity risk reflects an enterprise's inability in raising funds to meet commitments. The Company follows an
effective cash management and planning policy to ensure availability of funds and to take appropriate measures
for new requirements.
36.6 Capital risk management

The Company is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. The Board of Directors monitors the return on capital and
the level of dividend to ordinary shareholders. There was no change to the Company's approach to the capital
management during the year and the company is not subject to externally imposed capital requirement.
2008 2007
Rs ‘000 Rs ‘000
37. EARNINGS PER SHARE

Profit after taxation from non-refinery operations 4,140,204 244,652
6,147,774 748,985
Number of fully paid weighted average ordinary shares (‘000) 71,078 71,078
Earnings per share - Basic (Rs)

86.49 10.54
75
Basic earnings per share for the year 2007 reported in the previous year was Rs 13.17. This has been restated
on account of 14,215,500 bonus shares issued without consideration during the year ended June 30, 2008.
Annual Report 2008
There is no dilutive effect on the basic earnings per share of the Company.
38. GENERAL
38.1 Capacity and production
Against the designed annual refining capacity of 14,320 million (2007: 14,240 million) US barrels the actual
throughput during the year was 14,901 million (2007: 14,075 million) US barrels.
38.2 Number of employees
Total number of employees at the end of the year was 720 (2007: 731).
38.3 Non adjusting events after the balance sheet date
i) Subsequent to the year end, further exchange loss of Rs 622 million has been realised on payments
against crude purchases relating to year ended June 30, 2008.
ii) Subsequent to the year end, the Government has changed the pricing formula of cer tain products
including reduction in deemed duty adversely impacting future selling prices of the products.
iii) The Board of Directors in its meeting held on October 8, 2008 has approved the transfer of Rs. 3,762.775
million (2007: Rs nil) to Investment Reser ve representing gain on sale of shares of an associated
company. The Board of Directors, in its meeting held on October 8, 2008 has also proposed for the
approval of members at the next Annual General Meeting (i) a 80% (2007: 40%) cash dividend of Rs 8
(2007: Rs 4) per share and (ii) an issue of bonus share in the proportion of one (2007: one) share for
every five (2007: four) shares held i.e. 20% (2007: 25%) out of unappropriated profits. These financial
statements do not include the effect of these appropriations which will be accounted for in the financial
statements for the year ending June 30, 2009 as follows:
Transfer from unappropriated profit to: Rs ‘000
Proposed dividend 568,620

Reserve for issue of bonus shares 142,155
38.4 Date of authorisation
These financial statements have been authorised for issue by the Board of Directors of the Company on
October 08, 2008.
76

Annual Audited
Consolidated Financial Statements
2008

Auditors' Report to the Members
We have audited the annexed consolidated financial statements comprising consolidated balance sheet of Attock
Refinery Limited (ARL) and its subsidiary company, Attock Hospital (Private) Limited as at June 30, 2008 and the
related consolidated profit and loss account, consolidated cash flow statement and consolidated statement of changes
in equity together with the notes forming part thereof, for the year then ended. We have also expressed separate
opinions on the financial statements of ARL and its subsidiary company. These financial statements are the responsibility
of ARL's management. Our responsibility is to express an opinion on these financial statements based on our audit.
Our audit was conducted in accordance with the International Standards on Auditing and accordingly included such
tests of accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the consolidated financial statements present fairly the financial position of ARL and its subsidiary
company as at June 30, 2008 and the results of their operations for the year then ended.
Islamabad: October 08, 2008
79
Annual Report 2008
Consolidated Balance Sheet
as at June 30, 2008
2008 2007
SHARE CAPITAL AND RESERVES
Share capital
Authorised 6 1,000,000 1,000,000
Issued, subscribed and paid-up 6 710,775 568,620

Reserves and surplus 7 10,702,108 5,371,775
11,412,883 5,940,395
SURPLUS ON REVALUATION OF FREEHOLD LAND 8 1,923,339 1,923,339

13,336,222 7,863,734
DEFERRED LIABILITIES
Provision for staff gratuity 96,889 85,800
CURRENT LIABILITIES AND PROVISIONS
Short term finance 9 – –

Trade and other payables 10 36,691,014 25,394,393
Provision for taxation 1,673,042 1,006,629
38,364,056 26,401,022
CONTINGENCIES AND COMMITMENTS 11
51,797,167 34,350,556
80
Consolidated Balance Sheet
as at June 30, 2008
2008 2007
PROPERTY, PLANT AND EQUIPMENT
Operating assets 12 2,462,965 2,734,127

Capital work-in-progress 13 442,431 217,683
Stores and spares held for capital expenditure 27,701 20,190
2,933,097 2,972,000
LONG TERM INVESTMENTS 14 14,842,438 11,416,312
LONG TERM LOANS AND DEPOSITS 15 12,732 10,954
DEFERRED TAXATION 16 219,588 158,008
CURRENT ASSETS
Stores, spares and loose tools 17 542,500 630,836

Stock-in-trade 18 4,845,427 3,853,388
Trade debts 19 9,207,878 6,235,378
Loans, advances, deposits, prepayments
and other receivables 20 248,307 192,627
Cash and bank balances 21 18,945,200 8,881,053
33,789,312 19,793,282
51,797,167 34,350,556
81
Annual Report 2008

Consolidated Profit & Loss Account
2008 2007
Sales 22 91,910,703 59,154,780

Less: Discount – 46,248
91,910,703 59,108,532
Reimbursement due from the Government
under import parity pricing formula 23 1,743,602 355,393
93,654,305 59,463,925
Less: Cost of sales 24 89,646,373 58,597,688
Gross profit 4,007,932 866,237
Less: Administration expenses 25 199,336 175,108

Distribution cost 26 19,140 16,716
Finance cost 27 1,244,373 246,545
Other charges 28 235,711 102,151
1,698,560 540,520
2,309,372 325,717
Other income 30 577,851 635,166
Profit before taxation from refinery operations 2,887,223 960,883
Provision for taxation 31 879,653 456,550
Profit after taxation from non-refinery operations

Share in profit of associated companies 32 1,982,679 1,384,628
Profit / (loss) on investment in associated companies 33 1,709,687 –
3,692,366 1,384,628
Profit for the year 5,699,936 1,888,961
Earnings per share – Basic (Rs)
37 80.19 26.58
82

Consolidated Cash Flow Statement
2008 2007
Rs ‘000 Rs ‘000
CASH FLOWS FROM OPERATING ACTIVITIES

Cash receipts from – customers 102,999,100 72,736,844
– others 109,183 98,996
103,108,283 72,835,840
Cash paid for operating costs (80,399,323) (52,833,884)
Cash paid to Government for duties, taxes and other levies (11,312,753) (14,106,632)
Income tax paid (321,821) (231,932)
Net cash flows from operating activities 11,074,386 5,663,392
CASH FLOWS FROM INVESTING ACTIVITIES

Additions to property, plant and equipment (361,997) (81,167)
Proceeds from sale of property, plant and equipment 3,149 954
Proceeds from sale of shares of an associated company 4,438,944 –
Long term investments (4,542,444) (638,425)
Long term loans and deposits (1,778) 659
Income on bank deposits received 453,487 529,386
Dividends received 454,734 277,697
Net cash flows from investing activities 444,095 89,104
CASH FLOWS FROM FINANCING ACTIVITIES

Long term loans – (4,547,000)
Financial charges paid (1,244,374) (358,411)
Dividends paid (226,812) (30)
Net cash flows from financing activities (1,471,186) (4,905,441)
EFFECT OF EXCHANGE RATE CHANGES 16,852 270
INCREASE IN CASH AND CASH EQUIVALENTS 10,064,147 847,325
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 8,881,053 8,033,728
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 18,945,200 8,881,053
83
Annual Report 2008

Consolidated Statement of Changes in Equity
Special reserve Surplus on

Share Capital for expansion / General Un-appropriated revaluation of
capital reserve modernisation reserve Profit freehold land Total
Rs ‘000
Balance at June 30, 2006 454,896 44,948 2,517,432 55 1,034,103 1,923,339 5,974,773

ended June 30, 2006 113,724 – – – (113,724) – –
Transfer to special reserve – – 358,533 – (358,533) – –
Transfer to special reserve by

an associated company – – 124,108 – (124,108) – –
Balance at June 30, 2007, as previously reported 568,620 44,948 3,000,073 55 2,326,699 1,923,339 7,863,734
Transfer to general reserve by an associated company – – – 258,825 (258,825) – –
Balance at June 30, 2007, as restated 568,620 44,948 3,000,073 258,880 2,067,874 1,923,339 7,863,734

ended June 30, 2007 142,155 – – – (142,155) – –
Final cash dividend @ 40% related to the

year ended June 30, 2007 – – – – (227,448) – (227,448)
Transfer to special reserve – – 1,861,770 – (1,861,770) – –
Transfer to special reserve by

an associated company – – 743,781 – (743,781) – –
Transfer to general reserve by an associated company – – – 561,100 (561,100) – –
Sale of bonus shares of an associated company – (35,000) – – 35,000 – –
Bonus shares issued by an associated company – 33,320 – – (33,320) – –
Balance at June 30, 2008 710,775 43,268 5,605,624 819,980 4,233,236 1,923,339 13,336,222
84

Notes to the Consolidated Financial Statements
1. LEGAL STATUS AND OPERATIONS
Attock Refinery Limited (the Company) was incorporated in Pakistan on November 8, 1978 as a private limited
company and was converted into a public limited company on June 26, 1979. The registered office of the
company is situated at Morgah, Rawalpindi. Its shares are quoted on the Karachi, Lahore and Islamabad Stock
Exchanges in Pakistan. It is principally engaged in the refining of crude oil.
The Company is a subsidiary of The Attock Oil Company Limited, UK and its ultimate parent is Bay View
International Group S.A.
Attock Hospital (Private) Limited (AHL) was incorporated in Pakistan on August 24, 1998 as a private limited
company and commenced its operations from September 1, 1998. AHL is engaged in providing medical services.
The Company is a wholly owned subsidiary of Attock Refinery Limited. For the purpose of these financial
statements, ARL and its above referred wholly owned subsidiary AHL is referred to as the Company.
2. STATEMENT OF COMPLIANCE
These financial statements have been prepared in accordance with approved accounting standards as applicable
in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards
(IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance,
1984, provisions of and directives issued under the Companies Ordinance, 1984. In case requirements differ,
the provisions or directives of the Companies Ordinance, 1984 shall prevail.
3. ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS
In the current year, the Company has adopted IAS 1 (Amendment) - 'Presentation of Financial Statements -
Capital Disclosures'. Adoption of this amendment only impacts the format and extent of disclosures as presented
in note 36.6 to the financial statements.
The following standards and interpretations which have not been applied in these financial statements were
issued by the International Accountancy Standards Board (IASB) but not yet effective:
Effective for periods

beginning on or after
IFRS 7 Financial Instruments: Disclosure April 28,2008

IFRS 8 Operating Segments April 28,2008
IAS 1 Presentation of Financial Statements (Revised 2008) January 1,2009
IAS 23 Borrowing costs (Revised 2008) January 1,2009
IAS 27 Consolidated and separate financial statements (Revised 2008) January 1,2009
IAS 29 Financial Reporting in Hyperinflationary Economies April 28,2008
IAS 32 Financial Instruments: Presentation (Revised 2008) January 1,2009
IFRIC 7 Applying the Restatement Approach under IAS 29 April 28,2008
IFRIC 12 Service Concession Arrangement January 1,2008
IFRIC 13 Customer Loyalty Programmes July 1,2008
IFRIC 14 IAS 19 - The Limit on a defined benefit asset, minimum funding 85
requirements and their interaction January 1,2008
IFRIC 15 Agreements for the construction of Real Estate January 1,2009
Annual Report 2008
IFRIC 16 Hedges of a Net Investment in a Foreign Operation October 1,2008
The management anticipates that adoption of these standards and interpretations in future periods will have
no material impact on the Company's financial statements except for additional disclosures when IFRS 7,
IAS 1 and IFRIC 14 come into effect.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4.1 Basis of measurement
These financial statements have been prepared under the historical cost convention modified by revaluation
of freehold land referred to in note 4.4 and certain other modifications as required by approved accounting
standards referred to in the accounting policies given below.
4.2 Basis of Consolidation
The consolidated financial statements include the financial statements of Attock Refinery Limited and its
wholly owned subsidiary, Attock Hospital (Private) Limited.
Subsidiaries are all entities over which the Company has the power to govern the financial and operating
policies generally accompanying a shareholding of more than one half of the voting rights or otherwise has
power to elect and appoint more than one half of its directors. Subsidiaries are fully consolidated from the
date on which control is transferred to the Group and are de-consolidated from the date that control ceases.
The assets and liabilities of subsidiary company have been consolidated on a line by line basis and the carrying
value of investments held by the parent company is eliminated against the subsidiary shareholders' equity in
the consolidated financial statements.
Material intra-company balances and transactions have been eliminated for consolidation purposes.
4.3 Dividend Appropriation
Dividend is recognised as a liability in the financial statements in the period in which it is declared.
4.4 Taxation
Provision for current taxation is based on taxable income at the current rates of taxation or half percent of
turnover, whichever is higher.
Deferred income tax is accounted for using the balance sheet liability method in respect of all temporary
differences arising between the carrying amount of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are recognised for
all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that
future taxable profits will be available against which the deductible temporary differences can be utilised.
Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse
based on the tax rates that have been enacted. Deferred tax is charged or credited to income except in the
case of items credited or charged to equity in which case it is included in equity.
4.5 Property, plant and equipment
a) Cost
Operating fixed assets except freehold land are stated at cost less accumulated depreciation. Freehold
land is stated at revalued amount. Capital work-in-progress and stores held for capital expenditure are
86
stated at cost. Cost in relation to certain plant and machinery items include borrowing cost related to
the financing of major projects during construction phase.
b) Depreciation
Operating assets depreciation is calculated using the straight-line method to allocate their cost over
their estimated useful lives at the rates specified in note 12.
c) Repairs and maintenance
Maintenance and normal repairs, including minor alterations, are charged to income as and when incurred.
Renewals and improvements are capitalised and the assets so replaced, if any, are retired.
d) Gains and losses on deletion
Gains and losses on deletion of assets are included in income currently.
4.6 Impairment of non-financial assets
Assets that have an indefinite useful life, for example land, are not subject to amortisation or depreciation
and are tested annually for impairment. Assets that are subject to depreciation / amortisation are reviewed
for impairment at each balance sheet date or whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's
carrying amount exceeds its recoverable amount. Reversals of the impairment losses are restricted to the
original cost of the asset. An impairment loss or reversal of impairment loss is recognised in the profit and
loss account.
4.7 Investments in associated companies
Investments in associated companies are accounted for using the equity method. Under this method investments
are stated at cost plus the Company's equity in undistributed earnings and losses after acquisition, less any
impairment in the value of individual investments.
4.8 Stores, spares and loose tools
These are valued at moving average cost less allowance for obsolete items. Items in transit are stated at
invoice value plus other charges paid thereon.
4.9 Stock-in-trade
Stock-in-trade is valued at the lower of cost and net realisable value. Crude oil in transit is valued at cost
comprising invoice value. Cost in relation to crude oil is determined on the basis of annual average cost of
purchases during the year on the principles of import parity and in relation to semi-finished and finished products
it represents the cost of crude oil and refining charges consisting of direct expenses and appropriate production
overheads. Direct expenses are arrived at on the basis of average cost for the year per barrel of throughput.
Production overheads, including depreciation, are allocated to throughput proportionately on the basis of
nameplate capacity.
Net realisable value in relation to finished product represents selling prices in the ordinary course of business
less costs necessarily to be incurred for its sale, as applicable, and in relation to crude oil represents replacement
cost at the balance sheet date.
4.10 Foreign currency translation
Transactions in foreign currencies are converted into rupees at the rates of exchange ruling on the date of
the transaction. All monetary assets and liabilities denominated in foreign currencies at the year end are
87
translated at exchange rates prevailing at the balance sheet date. Exchange differences are dealt with through
the profit and loss account.
Annual Report 2008
4.11 Revenue recognition
Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and
the revenue can be reliably measured. Revenue is recognised as follows:
i) Revenue from sales is recognised on delivery of products ex-refinery to the customers with the exception
that Naphtha export sales are recognised on the basis of products shipped to customers.
ii) The Company is operating under the import parity pricing formula, as modified from time to time, whereby
it is charged the cost of crude on 'import parity' basis and is allowed product prices equivalent to the
'import parity' price, calculated under prescribed parameters.
Effective July 1, 2007, the Government made certain modifications in the prescribed parameters effectively
reducing the price of Kerosene oil, Light Diesel Oil (LDO) and JP-8 in 2007 and 2008. The Government
has further modified the refineries pricing formula in August, 2008 whereby the 10% duty included in
pricing of HSD has been cut to 7.5% and the motor gasoline pricing has been unilaterally revised by
linking its price to Arab Gulf 95 RON prices and calculating the price of 87 RON motor gasoline on a
unitary method basis. This revision will adversely affect the pricing of HSD and motor gasoline which
are Company's two major products.
Earlier in July, 2002, the Government had modified the pricing formula that was applicable to the Company
restricting the distribution of net profits after tax (if any) from refinery operations to 50% of paid-up
capital as at July 1, 2002 and diverting the surplus profits, if any, to a special reserve to offset any future
loss or make investment for expansion or upgradation of Refinery. Further the Government had abolished
the minimum rate of return of 10% which continues to be contested by the Company as it represented
to the Government that the already existing agreement for guaranteed return could be modified only
with the mutual consent of both the parties.
iii) Income on investment in associated companies is recognised using the equity method. Under this
method, the company's share of post-acquisition profit or loss of the associated company is recognised
in the profit and loss account, and its share of post-acquisition movements in reserve is recognised in
reserves. Dividend distribution by the associated companies is adjusted against the carrying amount
of the investment.
iv) Dividend income is recognised when the right to receive dividend is established.
v) Other income is recognised on accrual basis.
4.12 Borrowing cost
Borrowing cost related to the financing of major projects during construction phase is capitalised. All other
borrowing costs are expensed as incurred.
4.13 Employee retirement benefits
The main features of the retirement benefit schemes operated by the Company for its employees are as follows:
i) Defined benefits plans
The Company operates a pension plan for its management staff and a gratuity plan for its non-management
staff. Pension plan is invested through an approved trust fund while the gratuity plan is book reserve
plan. Contributions are made in accordance with actuarial recommendations. Actuarial valuations are
88 conducted through an independent actuary, annually using projected unit credit method. The obligation
at the balance sheet date is measured at the present value of the estimated future cash outflows.
Unrealised net gains and losses are amortised over the expected remaining service of current members.
ii) Defined contribution plans
The company operates an approved contributory provident fund for all employees. Equal monthly
contribution is made both by the Company and the employee to the fund at the rate of 10% of basic
salary.
4.14 Employees compensated absences
The Company also provides for compensated absences for all employees in accordance with the rules of the
Company.
4.15 Financial Instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the instrument and de-recognised when the Company loses control of the contractual rights that
comprise the financial asset and in case of financial liability when the obligation specified in the contract is
discharged, cancelled or expired. The particular measurement methods adopted are disclosed in the individual
policy statements associated with each item as shown below:
a) Investment in associated companies
The measurement methods adopted for investment in associated and subsidiary companies are disclosed
in note 4.6.
b) Trade and other payables
Liabilities for trade and other amounts payable including amounts payable to related parties are carried
at cost which is the fair value of the consideration to be paid in the future for goods and services
received.
c) Provisions
Provisions are recognised when a Company has a legal or constructive obligation as a result of past
event and it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate of the amount can be made.
d) Trade debts and other receivables
Trade debts and other receivables are recognised and carried at original invoice amount / cost less an
allowance for any uncollectable amounts.
e) Cash and cash equivalents
Cash in hand and at banks are carried at fair value. For the purpose of cash flow statement, cash and
cash equivalents consist of cash in hand, balances in banks and highly liquid short term investments.
5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of financial statements in conformity with the approved accounting standards requires the
use of certain critical accounting estimates. It also requires management to exercise its judgment in the
process of applying the Company's accounting policies. Estimates and judgments are continually evaluated
and are based on historical experience, including expectation of future events that are believed to be reasonable
under the circumstances. The areas where various assumptions and estimates are significant to the Company's
financial statements or where judgment was exercised in application of accounting policies are as follows:
89
i) Estimate of recoverable amount of investment in National Refinery Limited - note 14.1
ii) Revaluation surplus on freehold land - note 12.1

Annual Report 2008
iii) Provision for taxation
iv) Provision for retirement benefits - note 29

2008 2007
Rs ‘000 Rs ‘000
6. SHARE CAPITAL
Authorised
100,000,000 (2007: 100,000,000) ordinary shares of Rs 10 each 1,000,000 1,000,000
Issued, subscribed and paid up
Shares issued for cash
Shares issued as fully paid bonus shares
The Attock Oil Company Limited held 40,032,687 (2007: 31,274,150) ordinary shares and Attock Petroleum
Limited held 1,000,000 (2007: nil) ordinary shares at the year end.
2008 2007
Rs ‘000 Rs ‘000
7. RESERVES AND SURPLUS

Capital reserve
Liabilities taken over from The Attock Oil Company Limited
no longer required 4,800 4,800
Capital gain on sale of building 654 654
Insurance and other claims realised relating to
pre-incorporation period 494 494
Donations received for purchase of hospital equipment 4,000 4,000
Bonus shares issued by associated company 33,320 35,000
43,268 44,948
Special reserve for expansion / modernisation
Additional revenue under processing fee formula related
to 1990-91 and 1991-92 – note 7.1 32,929 32,929
Surplus profits under the import parity pricing formula -note 7.1 4,375,003 2,513,232
Surplus profits of associate under the import parity pricing formula 1,197,692 453,912
5,605,624 3,000,073
Revenue reserve
General reserve 819,980 258,880
Surplus – unappropriated profit 4,233,236 2,067,874
5,053,216 2,326,754
10,702,108 5,371,775
7.1 Represents amounts retained as per stipulations of the Government under the pricing formula and is
available only for offsetting any future loss or making investment in expansion or upgradation of the refinery.
90
Transfer to / from special reserve is recognised at each quarter end and is reviewed for adjustment based
on profit / loss on an annual basis. The company has incurred capital expenditure of Rs 3,770 million
on upgradation and expansion projects from July 1, 1997 to June 30, 2008 (July 1, 1997 to June 30, 2007:
Rs 3,496 million).
8. SURPLUS ON REVALUATION OF FREEHOLD LAND

This represents surplus over book value resulting from revaluation of freehold land as referred to in note 12.1
and is not available for distribution to shareholders.
9. SHORT TERM FINANCE

During the year, the Company has negotiated running finance facilities with various banks and accepted facility
offer letters to the extent of Rs 3.5 Billion, which were unutilised at the year end. As and when required, these
facilities shall be secured by joint hypothecation by way of 1st registered charges over the Company's current
assets.
2008 2007
Rs ‘000 Rs ‘000
10. TRADE AND OTHER PAYABLES

Creditors – note 10.1 24,371,972 18,021,734
Due to The Attock Oil Company Limited – Holding Company 256,723 275,089
Due to associated companies
Pakistan Oilfields Limited 1,684,783 1,383,271
Attock Petroleum Limited – 1,046
Attock Cement Pakistan Limited 72 –
Accrued liabilities and provisions – note 10.1 1,717,026 738,703
Due to the Government under pricing formula 7,138,356 4,707,073
Advance payments from customers 2,677 5,533
Sales tax payable 1,037,929 7,197
Deposits from customers adjustable against freight
and Government levies payable on their behalf 376 1,271
Payable to statutory authorities in respect of petroleum
development levy and excise duty 13,099 –
Excess crude oil freight recovered through inland freight
equalisation margin 21,479 –
Security deposits 49,110 49,165
Unclaimed dividends 1,576 939
36,691,014 25,394,393
10.1 These balances include amounts retained from payments to crude suppliers for purchase of local crude as per
the directives of the Ministry of Petroleum and Natural Resources (the Ministry). Further, as per directive of
the Ministry such withheld amounts are being retained in designated 90 days interest bearing accounts. The
amounts retained alongwith accumulated profits amounted to Rs 6,630.371 million (2007: Rs 10,173.029
million).
2008 2007
Rs ‘000 Rs ‘000
10.2 Workers' Profit Participation Fund

Balance at the beginning of the year 65,840 36,869 91
Add: Interest on funds utilised in the Company's business 3,889 528
69,729 37,397
Annual Report 2008
Less: Amount paid to the Fund 65,959 37,261

3,770 136
Add: Amount allocated for the year – notes 28 and 33 177,671 65,704
181,441 65,840
2008 2007
Rs ‘000 Rs ‘000
11. CONTINGENCIES AND COMMITMENTS

Contingencies:
i) Performance and commitment guarantees arranged by the
Company on behalf of Attock Gen Limited (AGL),
an associated company, as main sponsors – 214,255
ii) Guarantees issued by banks on behalf of the Company 300 300
iii) Claims for land compensation contested by the Company 1,300 1,300
iv) Price adjustment related to crude oil purchases as referred to in
note 24.1, the amount of which can not be presently quantified – –
v) Corporate guarantees and indemnity bonds issued by an associated
company to the collector sales tax and Federal Excise, Islamabad 667,950 242,192
Commitments outstanding:
i) Capital expenditure 43,959 55,424
ii) Letters of credit other than for capital expenditure 172,722 125,775
12. OPERATING ASSETS

Freehold Buildings Furniture,
land on freehold Plant & Computer fixtures
(note 12.1) land machinery equipment and equipment Vehicles Total
Rs ‘000
COST
As at July 1, 2006 1,927,250 70,356 3,804,719 52,464 62,036 62,635 5,979,460
Disposals during the year – – – – (188) (290) (478)
As at June 30, 2007 1,927,250 84,731 3,918,672 56,151 63,395 70,319 6,120,518
Disposals during the year – – (24,703) (10,244) (10,084) (852) (45,883)
As at June 30, 2008 1,927,250 101,649 3,993,891 48,263 59,367 73,953 6,204,373
DEPRECIATION
As at July 1, 2006 – 28,639 2,882,892 40,323 33,767 43,198 3,028,819
On disposals – – – – (80) (290) (370)
As at June 30, 2007 – 32,547 3,214,713 49,370 38,614 51,147 3,386,391
On disposals – – (18,222) (10,215) (8,232) (852) (37,521)
As at June 30, 2008 – 38,120 3,565,484 42,149 36,313 59,342 3,741,408
WRITTEN DOWN VALUE

92
As at June 30, 2007 1,927,250 52,184 703,959 6,781 24,781 19,172 2,734,127
As at June 30, 2008 1,927,250 63,529 428,407 6,114 23,054 14,611 2,462,965
Annual rate of depreciation (%) – 5 10 20 10 20
12.1 Value of freehold land includes revaluation surplus of Rs 1,923.339 million arising from revaluation of freehold
land in January 2001 carried out by an independent valuer. Valuation was made on the basis of market value.
The original cost of the land as at June 30, 2008 is Rs 3.911 million.
2008 2007
Rs ‘000 Rs ‘000
12.2 The depreciation charge for the year has been allocated as follows:
Cost of sales 378,170 341,975
Administration expenses 12,405 13,361
Distribution cost 298 900
Desalter operating cost 633 633
Depreciation of subsidiary company 1,032 1,073
392,538 357,942
13. CAPITAL WORK-IN-PROGRESS

Civil works 2,191 2,487
Plant and machinery 411,820 186,977
Pipeline project 28,420 28,219
442,431 217,683
14. LONG TERM INVESTMENTS

Investment in associated companies
Beginning of the year 11,416,312 9,637,407
Sale of investment in associated company (1,550,881) –
Purchase of shares of associated companies 4,542,444 638,425
Share of profit of associated companies 2,059,708 1,418,177
Impairment loss against investment in NRL (1,170,411) –
Dividend from associated companies received (454,734) (277,697)
14,842,438 11,416,312
93
Annual Report 2008
2008 2007
% age % age
holding Rs ‘000 holding Rs ‘000
14.1 Long term investments

Quoted
National Refinery Limited (NRL) – note 14.2 25 9,556,004 25 9,558,251
19,991,640 (2007: 16,659,700 ) fully paid ordinary
shares including 3,331,940 (2007 : Nil) bonus shares
of Rs 10 each
Market value as at June 30, 2008: Rs 5,947 million
(June 30, 2007 : Rs 5,681 million)
Attock Petroleum Limited (APL) – note 14.3 21.70 4,627,293 21.70 1,311,091
10,417,680 (2007 : 8,681,400 ) fully paid ordinary
Market value as at June 30, 2008 : Rs 4,503 million
(June 30, 2007 : Rs 4,352 million)
Unquoted
Attock Gen Limited (AGL) – note 14.4 30 653,754 30 542,054
6,435,000 (2007 : 5,400,000) fully paid ordinary
Attock Information Technology Services

(Private) Limited – note 14.5 10 5,387 10 4,916
450,000 (2007 : 450,000) fully paid ordinary shares
of Rs 10 each
14,842,438 11,416,312
All associated and subsidiary companies are incorporated in Pakistan.
14.2 The carrying value of investment in National Refinery Limited at June 30, 2008 is net of impairment loss of
Rs 1,170,411 thousand (2007: Nil). The carrying value is based on a valuation analysis carried out by an
external investment advisor engaged by the Company. The recoverable amount has been estimated based on
a value in use calculation. These calculations have been made on discounted cash flow based valuation
methodology which assumes gross profit margin of 5.4% (2007: 6.4%), terminal growth rate of 4% (2007: 5%)
and capital asset pricing model based discount rate of 18.64% (2007: 14.30%).
94
Carrying value
Number of shares Rs ‘000
14.3 Investment in APL

As at July 1, 2007 (including 3,500,000 bonus shares) 8,681,400 1,311,091
Bonus shares received during the year 1,736,280 –
Share in pre-disposal profit of APL – 361,330
Dividend received – (121,540)
Disposal of shares during the year (10,417,680) (1,550,881)
Purchase of shares during the year 10,417,680 4,438,944
Share in post acquisition profit of APL – 188,349
As at June 30, 2008 10,417,680 4,627,293
14.4 Investment in AGL

As at July 1, 2007 5,400,000 542,054
Right shares acquired during the year 1,035,000 103,500
Share in profit of Attock Gen Limited (AGL) – 8,200
As at June 30, 2008 6,435,000 653,754
14.5 Although the Company has less than 20 percent shareholding in Attock Information Technology Services
(Private) Limited, this company has been treated as associates since the Company has representation on its
Board of Directors.
2008 2007
Rs ‘000 Rs ‘000
15. LONG TERM LOANS AND DEPOSITS

Loans to employees – considered good – note 15.1 25,879 21,079
Less: Amounts due within next twelve months shown under
current assets – note 20 (14,095) (10,990)
11,784 10,089
Security deposits 948 865
12,732 10,954
15.1 Loans to employees are for miscellaneous purposes which are recoverable in 24, 36, and 60 equal monthly
installments depending on case to case basis and are secured by a charge on the asset purchased and/or
amount due to the employee against provident fund or a third party guarantee. These are interest free loans.
These include an amount of Rs 4.366 million (2007: Rs 3.552 million) receivable from Executives of the
Company and does not include any amount receivable from Directors or Chief Executive. The maximum amount
due from executives of the Company at the end of any month during the year was Rs 4.720 million (2007:
Rs 3.805 million).
2008 2007
Rs ‘000 Rs ‘000 95
15.2 Reconciliation of carrying amount of loans to executives:
Opening balance as at July 1 3,552 2,233
Annual Report 2008
Add: Disbursements during the year 7,164 3,922

10,716 6,155
Less: Repayments during the year 6,350 2,603
Closing balance as at June 30 4,366 3,552
2008 2007
Rs ‘000 Rs ‘000
16. DEFERRED TAXATION

Debit balances arising on
Provisions for obsolete stores, doubtful debts, gratuity and others 55,014 48,980
Difference between accounting and tax depreciation 164,574 124,925
Finance lease arrangements – (15,897)
219,588 158,008
17. STORES, SPARES AND LOOSE TOOLS

Stores (including items in transit
Rs 99.03 million; 2007: Rs 119.67 million) 351,123 446,579
Spares 228,053 219,661
Loose tools 624 596
579,800 666,836
Less: Provision for slow moving items – note 17.1 37,300 36,000
542,500 630,836
17.1. Provision for slow moving items

Opening balance 36,000 34,500
Add: Provision for the year 1,300 1,500
37,300 36,000
18. STOCK-IN-TRADE
Crude oil – in stock 902,525 1,488,648
Crude oil – in transit 375,967 176,064
1,278,492 1,664,712
Semi-finished products 436,792 311,633
Finished products – note 18.1 3,129,569 1,876,301
Medical supplies 574 742
4,845,427 3,853,388
18.1 Finished products include stocks carried at net realisable value of Rs 2 million (2007: Rs 236 million).
Adjustments amounting to Rs 1 million (2007: Rs 43.8 million) have been made to closing inventory to write
down stocks of finished products to their net realizable value.
19. TRADE DEBTS

All debtors are unsecured and considered good. These include amount receivable from associated companies
96
Attock Petroleum Limited Rs 2,327 million (2007: Rs 1,011 million) and Pakistan Oilfields Limited Rs 11 million
(2007: Rs nil).
2008 2007
Rs ‘000 Rs ‘000
20. LOANS, ADVANCES, DEPOSITS, PREPAYMENTS

AND OTHER RECEIVABLES
Loans and advances – considered good
Current portion of long-term loans to employees – note 15 14,095 10,990
Advances to suppliers 61,874 19,301
Advances to employees 2,236 1,729
78,205 32,020
Deposits, prepayments and current account

balances with statutory authorities
Trade deposits 286 286
Short term prepayments 14,705 17,266
Current account balances with statutory authorities in respect
of petroleum development levy and excise duty – 287
14,991 17,839
Other receivables
Due from associated companies
Attock Petroleum Limited 9,436 –
Attock Leisure and Management Associates (Pvt) Limited 115 –
National Cleaner Production Centre Foundation 2,992 2,465
Attock Cement Pakistan Limited – 103
Due from Staff Pension Fund 15,404 4,097
Income accrued on bank deposits 108,888 78,867
Income tax refundable 4,738 3,362
Crude oil freight recoverable through inland freight equalisation margin – 39,221
Other receivables 5,534 7,561
155,111 142,768
248,307 192,627
Loans to employees include Rs 2.852 million (2007: Rs 2.265 million ) due from executives of the Company
and does not include any amount receivable from Directors or the Chief Executive.
2008 2007
Rs ‘000 Rs ‘000
21. CASH AND BANK BALANCES

Cash in hand 955 339
97
With banks:
Current accounts 2,731 2,805
Deposit accounts 6,317,269 6,081,864
Annual Report 2008
Savings accounts (including US $ 366,766; 2007: US $ 379,624) 12,624,245 2,796,045

18,945,200 8,881,053
21.1 Balances with banks include Rs 4,817.269 million (2007: 5,381.864 million) in respect of deposits placed
in a 90-day interest-bearing account consequent to directives of the Ministry of Petroleum & Natural
Resources on account of amounts withheld alongwith related interest earned thereon, as referred to in
note 10.1.
21.2 Bank deposits of Rs. 0.300 million (2007: 0.300 million) were under lien with bank against a bank guarantee
issued on behalf of the Company.
21.3 Balances with banks include Rs 48.890 million (2007: Rs 49.165 million) in respect of security deposits
received.
21.4 Balances with banks earned weighted average interest / mark-up @ 9.61% (2007: @ 9.73%) per annum.
2008 2007
Rs ‘000 Rs ‘000
22. SALES
Gross sales (excluding Naphtha export sales) 93,428,851 66,083,779
Naphtha export sales 12,509,719 8,232,840

Less: Cost of Naphtha purchased from third parties and
related handling charges recovered 1,684,095 1,175,285
10,825,624 7,057,555
Less: Duties, taxes and levies – note 22.1 12,343,772 13,986,554

91,910,703 59,154,780
22.1 Duties, taxes and levies

Sales tax 10,418,456 8,166,096
Development surcharge 1,903,321 5,356,523
Custom duties and other levies 21,995 463,935
12,343,772 13,986,554
23. REIMBURSEMENT DUE FROM THE GOVERNMENT

UNDER IMPORT PARITY PRICING FORMULA
This represents amount due from the Government of Pakistan on account of shortfall in ex-refinery prices of
certain petroleum products under the import parity pricing formula.
98
2008 2007
Rs ‘000 Rs ‘000
24. COST OF SALES

Opening stock of semi-finished products 311,633 278,876
Crude oil consumed – note 24.1 88,115,513 56,314,521
Transportation and handling charges 1,174,592 1,016,615
Chemicals consumed 354,582 347,235
Professional charges for technical services 3,506 2,455
Insurance 52,935 46,544
Repairs and maintenance (including stores
and spares consumed Rs 64.345 million; 2007: Rs 65.330 million) 162,555 * 118,433
Staff transport and traveling 10,449 9,815
Cost of receptacles 15,912 8,619
Research and development 749 109
91,336,433 59,024,894
Closing stock of semi-finished products (436,792) (311,633)
90,899,641 58,713,261
Opening stock of finished products 1,876,301 1,760,728

Closing stock of finished products (3,129,569) (1,876,301)
(1,253,268) (115,573)
89,646,373 58,597,688
* includes consumables wrongly classified as fixed assets written off during the year having book value of
Rs 7,269 thousand.
2008 2007
Rs ‘000 Rs ‘000
24.1 Crude oil consumed

Stock at the beginning of the year 1,664,712 1,484,204
Purchases – note 38.3(i) 87,729,294 56,495,029
89,394,006 57,979,233
Stock at the end of the year (1,278,493) (1,664,712)
88,115,513 56,314,521
99
Certain crude purchases have been recorded based on provisional prices notified by the Government and may
require adjustment in subsequent periods. Cost of purchases include Rs 706.120 million (2007: Nil) related
Annual Report 2008
to purchases in prior years.
24.2 Salaries, wages and other benefits under cost of sales, administration expenses, distribution cost and income
from crude desalter operations include the Company's contribution to the Provident Fund amounting to
Rs 13.245 million (2007: Rs 11.552 million).
2008 2007
Rs ‘000 Rs ‘000
25. ADMINISTRATION EXPENSES

Staff transport, traveling and entertainment 12,768 12,065
Electricity, gas and water 5,570 4,430
Auditor's remuneration – note 25.1 1,074 986
Legal and professional charges 4,145 5,874
Subscription 5,214 5,272
Publicity 3,061 4,044
Scholarship scheme 1,909 2,055
Insurance 790 867
Donations* 324 415
Training expenses 2,582 745
Other expenses 240 52
199,336 175,108
* No director or his spouse had any interest in the donee institutions.
25.1 Auditor's remuneration

Statutory audit 440 350
Review of half yearly accounts, audit of consolidated
accounts, staff funds and special certifications 520 553
Out of pocket expenses 114 83
1,074 986
26. DISTRIBUTION COST

Staff transport, traveling and entertainment 652 568
Telephone and telex charges 221 210
Electricity, gas, fuel and water 1,857 1,476
Printing and stationery 137 81
Repairs and maintenance including packing and other stores consumed 2,066 1,295
Rent, rates and taxes 339 317
Legal and professional charges 144 144
100 Cost of samples – 3
19,140 16,716
2008 2007
Rs ‘000 Rs ‘000
27. FINANCE COST

Interest / mark-up on
Long term loans – 233,361
Workers' Profit Participation Fund – note 10.2 3,888 528
Bank and other charges 241 389
Exchange loss 1,240,244 12,267
1,244,373 246,545
28. OTHER CHARGES
Employees' retirement benefits
Staff gratuity benefits 20,764 15,321
Staff pension benefits 597 8,572

Less: Contribution to subsidiary company (995) (955)
(398) 7,617
Contribution to employees old age benefits scheme 2,580 2,202
22,946 25,140
Fixed assets shortages / damages written off 648 –

Provision for slow moving stores 1,300 1,500
Stores written off – 13
235,711 102,151
101
Annual Report 2008
29. EMPLOYEES' DEFINED BENEFIT PLANS

The latest actuarial valuation of the employees' defined benefit plans was conducted at June 30, 2008 using
the projected unit credit method. Details of the defined benefit plans are:

2008 2007 2008 2007
Rs ‘000 Rs ‘000
a) The amounts recognised in the profit and loss account:

Interest on obligation 31,449 27,772 12,890 10,076
Expected return on plan assets (39,591) (30,235) – –
Contribution from an associated company (144) (127) – –
Net actuarial losses / (gains) recognised during the year (4,890) (1,101) 4,056 2,146
597 8,572 20,764 15,321
b) The amounts recognised in the balance sheet:
Fair value of plan assets 385,053 359,485 – –

Present value of defined benefit obligations (321,136) (291,335) (152,656) (121,894)
63,917 68,150 (152,656) (121,894)
Unrecognised actuarial gains / (losses) (48,513) (64,053) 55,767 36,094
Net liability 15,404 4,097 (96,889) (85,800)
c) Movement in the present value of defined benefit obligation:
Present value of defined benefit obligation as at July 1 291,335 263,054 121,894 96,058
Interest cost 31,449 27,772 12,890 10,076
Benefits paid (11,158) (11,146) (9,675) (5,321)
Actuarial (gains) / losses (4,263) (608) 23,729 17,982
Present value of defined benefit obligation as at June 30 321,136 291,335 152,656 121,894
d) Changes in the fair value of plan assets:
Fair value of plan assets as at July 1 359,485 280,495 – –

Expected return 39,591 30,235 – –
Benefits paid (11,158) (11,146) – –
Contributions by employer 11,904 10,971 – –
Contributions by associated company 144 127 – –
Actuarial gains / (losses) (14,913) 48,803 – –
102 Fair value of plan assets as at June 30 385,053 359,485 – –
Actual return on plan assets 24,677 79,038 – –

Expected contributions to the defined benefit pension plans for the year ending June 30, 2008 are Rs 12.6
million.

2008 2007 2008 2007
Rs ‘000 Rs ‘000
e) The major categories of plan assets:
Investment in equities 119,841 109,498 – –

Investment in mixed funds 103,448 136,837 – –
Cash 161,764 113,150 – –
385,053 359,485 – –
f) Significant actuarial assumptions at the

balance sheet date:
Discount rate 13.25% 11.00% – –

Expected return on plan assets 13.25% 11.00% – –
Future salary increases 11.09% 8.89% – –
Future pension increases 7.86% 5.71% – –
2008 2007 2006 2005 2004

Rs ‘000
g) Comparison for five years:
Defined Benefit Pension Plan

Fair value of plan assets 385,053 359,485 280,495 225,121 196,918
Surplus /(deficit) 63,917 68,150 17,441 9,739 5,920
Actuarial (gains) /losses on plan liabilities (4,262) (609) 23,265 9,382 1,303
Actuarial (gains) / losses on plan assets 14,914 (48,803) 29,017 13,388 9,384
Defined Benefit Gratuity Plan

Fair value of plan assets – – – – –
Deficit (152,656) (121,894) (96,058) (88,578) (80,832)
Actuarial (gains) / losses on plan liabilities 23,729 17,982 (1,087) 3,611 16,991
Actuarial (gains) / losses on plan assets – – – – –
103
Annual Report 2008
2008 2007
Rs ‘000 Rs ‘000
30. OTHER INCOME

Income from financial assets
Income on bank deposits 483,492 569,024
Exchange gain 16,852 270
500,344 569,294
Income from non – financial assets

Income from crude decanting 15,262 11,205
Income from crude desalter operations – note 30.1 9,715 9,265
Insurance agency commission 4,140 4,719
Rental income 6,983 3,057
Sale of scrap 12,930 10,613
Profit on disposal of fixed assets 2,637 846
Calibration charges 2,892 3,742
Handling and service charges 16,586 15,901
Registration charges from carriage contractors 200 –
Penalties from carriage contractors 4,816 3,888
Old liabilities written back – 694
Miscellaneous 1,346 1,942
77,507 65,872
577,851 635,166
30.1 Income from crude desalter operations
Income 51,997 43,928

Less: Operating costs
Chemical consumed 8,098 7,058
42,282 34,663
9,715 9,265
31. PROVISION FOR TAXATION

Current – for the year 1,054,100 476,500
104 – for prior years (112,900) –
941,200 476,500
Deferred – for the year (61,547) (19,950)

879,653 456,550
2008 2007
% %
31.1 Reconciliation between the average effective tax rate and

the applicable tax rate.
Applicable tax rate 35.00 35.00

Tax effect of:
Income chargeable to tax at special rate and other differences (0.62) 12.51
Prior years (3.91) –
Average effective tax rate charged to profit and loss account 30.47 47.51
2008 2007
Rs ‘000 Rs ‘000
32. SHARE IN PROFIT OF ASSOCIATED COMPANIES
National Refinery Limited 1,501,358 1,050,664

Attock Petroleum Limited 563,407 375,107
Less: Unrealised profit from intra-group transactions
included in closing stock in trade 13,728 9,940
549,679 365,167
Attock Gen Limited 8,200* 2,054
Attock Information Technology Services (Private) Limited 471 292
2,059,708 1,418,177
Less: Related charges
Taxation @ 10% (2007: 5%) 45,473 13,885
77,305 33,046
1,982,403 1,385,131
Profit/(loss) of Attock Hospital (Private) Limited,
a wholly owned subsidiary – note 33.1 276 (503)
1,982,679 1,384,628
* net of restatement of 2007 profit by Rs 7,744 thousands
33. PROFIT / (LOSS) ON INVESTMENT IN ASSOCIATED COMPANIES
Gain on sale of shares of Attock Petroleum Limited

Proceeds from sale of shares (net of expenses
incurred on disposal) 4,430,979 –
Carrying value of investment (1,550,881) – 105
2,880,098 –
Impairment loss on investment in National Refinery Limited (1,170,411) –
Annual Report 2008
1,709,687 –
2008 2007
Rs ‘000 Rs ‘000
33.1 Profit/(loss) from Attock Hospital (Private) Limited

Revenue* 36,615 31,329
Less: Operating expenses
Salaries, wages and other benefits (including employees'
retirement benefits of Rs 1,168 thousands
(2007: Rs 1,064 thousands) 22,451 17,499
Medical supplies 3,157 2,953
Dietary cost 617 571
Sanitation and general services 2,388 3,433
Utilities and other office expenses 6,470 6,332
Audit fee 75 65
36,190 31,927
Profit/(Loss) before taxation 425 (598)
Provision for taxation – Current 183 157
– Deferred (34) (252)
149 (95)
Profit/(Loss) after taxation 276 (503)
* The revenue includes inter – company billings amounting to Rs 26,588 thousands (2007 : Rs 22,703
thousands) which have not been eliminated from revenue and costs. It is considered that this gives a fairer
view of the operating results of the Group. The revenue also includes income on bank deposits Rs 83 thousands
(2007: Rs 21 thousands).
106
33.2 Summarised financial information of associated companies:

The aggregate assets, liabilities, revenue and profit / (loss) of associated companies based on their audited
financial statements are as follows:
2008 2007
Rs ‘000 Rs ‘000
Assets
Attock Petroleum Limited 15,513,336 8,983,767
Attock Gen Limited 10,658,986 1,820,220
Liabilities
Attock Gen Limited 8,479,805 13,375
Revenue
Profit/(loss)
The Company's share in shareholders' equity
National Refinery Limited 25.00% 25.00%
Attock Petroleum Limited 21.70% 21.70%
Attock Gen Limited 30.00% 30.00%
Attock Information Technology Services (Private) Limited 10.00% 10.00%
34. RELATED PARTY TRANSACTIONS

Attock Oil Company Limited holds 56.32% (2007: 55.00%) shares of the Company at the year end. Therefore,
all subsidiaries and associated undertakings of Attock Oil Company Limited are related parties of the Company.
The related parties also comprise of directors, major shareholders, key management personnel, entities over
which the directors are able to exercise significant influence on financial and operating policy decisions and
employees' funds. Amount due from and due to these undertakings are shown under receivables and payables.
The remuneration of Chief Executive, directors and executives is disclosed in note 35 to the financial statements.
107
Annual Report 2008
2008 2007
Rs ‘000 Rs ‘000
Sale of goods 24,713,370 12,941,980
24,809,073 13,018,753

10,564,724 7,903,073
Holding company
Sale of services 424 285

1,110,508 1,302,831
Contribution to employees' pension and provident funds 25,149 22,523
35. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES

The aggregate amounts charged in the accounts for remuneration, including benefits and perquisites, were
as follows:
Chief Executive Directors Executives
2008 2007 2008 2007 2008 2007
Rs ‘000
Managerial remuneration / honorarium 3,525 3,910 * 1,219 1,219 28,020 24,673

Company's contribution to provident
and pension funds 731 789 – – 6,150 5,209
Housing and utilities 2,208 1,037 – – 18,728 11,586
Leave passage 420 330 – – 3,328 2,324
6,884 6,066 1,219 1,219 56,226 43,792
No of person(s) 1 1 3 3 25 22
Housing and utilities of executives include cash allowance for fuel and maintenance in respect of limited use
of Company's cars provided to 12 executives for the period January 1, 2008 to June 30, 2008.
* This includes payments to Chief Executive of Rs 789 thousand representing arrears of salary for the period
February 2005 to June 30, 2006.
35.1 In addition, the Chief Executive and 23 (2007: 19) executives were provided with limited use of the Company's
cars. The Chief Executive and all executives were provided with medical facilities and 8 (2007: 9) executives
108 were provided with unfurnished accommodation in Company owned bungalows. Limited residential telephone
facility was also provided to the Chief Executive and 15 (2007: 13) executives.
Fee paid to directors during the year was Rs nil (2007: Rs nil).
36. FINANCIAL INSTRUMENTS

36.1 Financial assets and liabilities
2008 2007
Interest / Non-interest / Interest / Non-interest /
mark-up bearing mark-up bearing Total mark-up bearing mark-up bearing Total
Rs ‘000
Financial assets:
Trade debts – 9,208,809 9,208,809 – 6,235,379 6,235,379
Loans, advances, deposits and
other receivables – 166,990 166,990 155,773 155,773
Cash and bank balances
Foreign currency – US $ 24,940 702 25,642 22,816 201 23,017
Local currency 18,916,574 2,984 18,919,558 8,855,093 2,942 8,858,035
Long term investments – 14,842,438 14,842,438 – 11,416,312 11,416,312
Long term loans and deposits – 12,732 12,732 – 10,954 10,954
18,941,514 24,234,655 43,176,169 8,877,909 17,821,561 26,699,470
Financial liabilities:
Trade and other payables 6,630,615 30,059,862 36,688,337 9,471,565 15,917,291 25,388,856
Staff gratuity 96,889 – 96,889 85,800 – 85,800
6,727,504 30,059,862 36,785,226 9,557,365 15,917,219 25,474,656
Off balance sheet items:
Commitments (other than letters of credit) – 43,959 43,959 – 55,424 55,424
Letters of credit – 172,722 172,722 – 125,775 125,775
Bank guarantees – 300 300 – 214,555 214,555
– 216,981 216,981 – 395,754 395,754
The carrying value of financial assets and liabilities approximates their fair value except for long term investments
which are stated at cost.
36.2 Concentration of credit risk

The Company's credit risk is primarily attributable to its trade debts and placements with banks. The sales
are essentially to six oil marketing companies and reputable foreign customers. The Company's placements
are with banks having satisfactory credit rating. Due to the high credit worthiness of corresponding parties
the credit risk is considered minimal.
36.3 Currency risk
Foreign exchange risk arises mainly from future commercial transactions or receivables and payables that exist
due to transactions denominated in foreign currencies. Financial assets include Rs 840.260 million (2007:
Rs 726.019 million) and financial liabilities include Rs 18,469.791 million (2007: Rs 10,714.731 million) which
were subject to foreign exchange risk.
36.4 Interest / Mark-up risk
Financial assets include Rs 18,941 million (2007: Rs 8,877 million) and financial liabilities include Rs 6,727
million (2007: Rs 9,557 million) which were subject to interest rate risk.
36.5 Liquidity risk 109
Liquidity risk reflects an enterprise's inability in raising funds to meet commitments. The Company follows an
effective cash management and planning policy to ensure availability of funds and to take appropriate measures
Annual Report 2008
for new requirements.

36.6 Capital risk management
The Company is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. The Board of Directors monitors the return on capital and
the level of dividend to ordinary shareholders. There was no change to the Company's approach to the capital
management during the year and the company is not subject to externally imposed capital requirement.
2008 2007
Rs ‘000 Rs ‘000
37. EARNINGS PER SHARE

Profit after taxation from non-refinery operations 3,692,366 1,384,628
5,699,936 1,888,961
Number of fully paid weighted average ordinary shares ('000) 71,078 71,078
Earnings per share - Basic (Rs)
80.19 26.58
Basic earnings per share for the year 2007 reported in the previous year was Rs 33.22. This has been restated
on account of 14,215,500 bonus shares issued without consideration during the year ended June 30, 2008.
There is no dilutive effect on the basic earnings per share of the Company.
38. GENERAL
38.1 Capacity and production
Against the designed annual refining capacity of 14.320 million (2007: 14.240 million) US barrels the actual
throughput during the year was 14.901 million (2007: 14.075 million) US barrels.
38.2 Number of employees
Total number of employees at the end of the year was 751 (2007: 763).
38.3 Non adjusting events after the balance sheet date
i) Subsequent to the year end, further exchange loss of Rs 622 million has been realised on payments
against crude purchases relating to year ended June 30, 2008.
ii) Subsequent to the year end, the Government has changed the pricing formula of certain products including
reduction in deemed duty adversely impacting future selling prices of the products.
iii) The Board of Directors in its meeting held on October 8, 2008 has approved the transfer of Rs. 3,762.775
million (2007: Rs nil) to Investment Reser ve representing gain on sale of shares of an associated
company. The Board of Directors, in its meeting held on October 8, 2008 has also proposed for the
approval of members at the next Annual General Meeting (i) a 80% (2007: 40%) cash dividend of Rs 8
(2007: Rs 4) per share and (ii) an issue of bonus share in the proportion of one (2007: one) share for
every five (2007: four) shares held i.e. 20% (2007: 25%) out of unappropriated profits. These financial
statements do not include the effect of these appropriations which will be accounted for in the financial
statements for the year ending June 30, 2009 as follows:
Transfer from unappropriated profit to: Rs ‘000
Proposed dividend 568,620

Reserve for issue of bonus shares 142,155
38.4 Corresponding figures

Comparative figures of general reserve and unappropriated profit for the year ended June 30, 2007 have been
restated for transfer to general reserve by an associated company, as shown in the statement of changes in
equity.
110
38.5 Date of authorisation
These financial statements have been authorised for issue by the Board of Directors of the Company on
October 08, 2008.

Form of Proxy
I/ We
of
being member(s) of Attock Refinery Limited holding
ordinary shares hereby appoint Mr. / Mrs./ Miss
of another member of the Company or failing him / her
of
another member of the Company as my / our proxy in my / our absence to attend and vote for me / us and on
my / our behalf at the 30th Annual General Meeting of the Company to be held on Friday, 31st October, 2008 at
11:00 a.m. at Pearl Continental Hotel, Rawalpindi and at any adjournment thereof.
As witness my / our hands seal this day of 2008.
Signed by
in the presence of
CDC Account No.

Folio No. Signature on
Participant I.D. Account No.
Five Rupees
Revenue Stamp
.
The Signature should agree
with the specimen registered
with the Company
Important:
1. This Proxy Form, duly completed and signed, must be received at i. Attested copies of CNIC or the passport of the beneficial owners
the Shares Depar tment of M/s. Noble Computer Ser vices (Pvt) and the proxy shall be provided with the proxy form.
Limited, 2nd Floor, Sohni Centre, BS 5&6, Main Karimabad,
ii. The proxy shall produce his original CNIC or original passport
Block-4, Federal B Area, Karachi-75950, Pakistan, not less than
at the time of the meeting.
48 hours before the time of holding the meeting.
iii. In case of a corporate entity, the Board of Directors 111
2. If a member appoints more than one proxy and more than one
resolution / power of attorney with specimen signature shall be
instruments of proxy are deposited by a member with the Company,
submitted (unless it has been provided earlier) alongwith proxy
all such instruments of proxy shall be rendered invalid.
form to the Company.
Annual Report 2008
3. For CDC Account Holders / Corporate Entities
In addition to the above the following requirements have to be met.

AFFIX
CORRECT
POSTAGE
The Company Secretary

ATTOCK REFINERY LIMITED
P.O. Refinery, Morgah,
Rawalpindi - 46600.

Attock Refinery Limited (Annual Report 2008)

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Annual Audited Financial Statements

Attock Refinery Limited

(b) in our opinion

SHARE CAPITAL AND RESERVES

Authorised 6 1,000,000 1,000,000

Issued, subscribed and paid-up 6 710,775 568,620

SURPLUS ON REVALUATION OF FREEHOLD LAND 8 1,923,339 1,923,339

Provision for staff gratuity 96,889 85,800

CURRENT LIABILITIES AND PROVISIONS

Short term finance 9 – –

CONTINGENCIES AND COMMITMENTS 11

PROPERTY, PLANT AND EQUIPMENT

Operating assets 12 2,459,520 2,730,262

LONG TERM INVESTMENTS 14 13,135,579 9,261,339

LONG TERM LOANS AND DEPOSITS 15 12,732 10,954

DEFERRED TAXATION 16 219,302 157,756

Stores, spares and loose tools 17 542,500 630,836

Chief Executive Director

Sales 22 91,910,703 59,154,780

Less: Administration expenses 25 199,336 175,108

Profit after taxation from non-refinery operations

Earnings per share – Basic (Rs)

The annexed notes 1 to 38 form an integral part of these financial statements.

Chief Executive Director

CASH FLOWS FROM OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

The annexed notes 1 to 38 form an integral part of these financial statements.

Chief Executive Director

Special reserve Surplus on

Bonus shares @ 25% related to the year

Transfer to reserve for expansion /

Bonus shares @ 25% related to the year

Final cash dividend @ 40% related to the

Transfer to reserve for expansion /

The annexed notes 1 to 38 form an integral part of these financial statements.

Chief Executive Director

1. LEGAL STATUS AND OPERATIONS

3. ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS

Effective for periods

IFRS 7 Financial Instruments: Disclosure April 28,2008

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

4.1 Basis of measurement

4.2 Dividend Appropriation

4.4 Property, plant and equipment

c) Repairs and maintenance

d) Gains and losses on deletion

4.5 Impairment of non-financial assets

4.6 Investments in associated and subsidiary companies

4.7 Stores, spares and loose tools

4.9 Foreign currency translation

4.10 Revenue recognition

iv) Other income is recognised on accrual basis.

4.11 Borrowing cost

4.12 Employee retirement benefits

i) Defined benefits plans

ii) Defined contribution plans

4.13 Employees compensated absences

4.14 Financial Instruments

a) Investment in associated and subsidiary companies

b) Trade and other payables

d) Trade debts and other receivables

e) Cash and cash equivalents