Professional Documents
Culture Documents
ARL promotes CSR as part of its core values to create the foundation for a
more equitable, just, productive, competitive and
knowledge-based environment.
ANNUAL REPORT 2007 1
Contents
Honours & Achievements 02
Vision & Mission Statement 03
Board of Directors 04
Company Information 05
Company Profile 06
Management Committee 07
HSEQ Policy 08
Notice of Annual General Meeting 09
Chairman’s Review 12
Human Resource Policy 16
The Management 17
The Directors’ Report 18
Pattern of Shareholding 36
Financial Statistical Summary 38
Financial Highlights - ARL 40
Financial Highlights - AHL 42
Review Report to the Members 44
Statement of Compliance with the Code of Corporate Governance 45
Balance Sheet Composition 47
Contributions & Value Additions 48
Financial Statements of Attock Refinery Limited 49-82
Auditor’s Report to the Members 51
Balance Sheet 52
Profit and Loss Account 54
Cash Flow Statement 55
Statement of Changes in Equity 56
Notes to the Financial Statements 57
Consolidated Financial Statements 83-118
Auditor’s Report to the Members 85
Consolidated Balance Sheet 86
Consolidated Profit and Loss Account 88
Consolidated Cash Flow Statement 89
Consolidated Statement of Changes in Equity 90
Notes to the Consolidated Financial Statements 91
Preserving our environment - Ficus Religiosa planted Form of Proxy 119
on the commissioning of the Refinery in 1922.
2 AT TO C K R E F I N E RY L I M I T E D
Awards include :
1 Corporate Social Responsibilty Award (Helpline Trust)
Vision 2020
To be a world class and leading organization
continuously providing high quality and
environment-friendly energy resources.
Mission 2010
To be a model diversified energy resources and
petrochemical organization exceeding expectations
of all stakeholders. We will achieve this by utilizing
best blend of state-of-the-art technologies, high
performing people, excellent business processes
and synergetic organizational culture.
Board of Directors
01 02 03 04 05 06 07 08 09 10
Company Information
Company Secretary
Khurram Shiraz
ACA
Auditors
A.F. Ferguson & Co.
Chartered Accountants
Legal Advisor
Zafar Law Associates
Advocates & Solicitors
Ali Sibtain Fazli & Associates
Legal Advisors, Advocates & Solicitors
Registered Office
The Refinery
Morgah, Rawalpindi
Tel: (051) 5487041-5
Fax: (051) 5487254
E-mail: info@arl.com.pk
website: www.arl.com.pk
Group photograph at the 137th Board of Directors meeting held in Damascus, Syria on 10th September, 2007.
6 AT TO C K R E F I N E RY L I M I T E D
Company Profile
Attock Refinery Limited (ARL) was incorporated as a Private There were subsequent discoveries of oil at Meyal and Toot
Limited Company in November, 1978 to take over the business (1968). Reservoir studies during the period 1970-78 further
of the Attock Oil Company Limited (AOC) relating to refining indicated high potential for crude oil production of around
of crude oil and supplying of refined petroleum products. It 20,000 bpd. In 1981, the capacity of Refinery was increased by
was subsequently converted into a Public Limited Company the addition of two distillation units of 20,000 and 5,000 bpd
in June, 1979 and is listed on the three Stock Exchanges of capacity, respectively. Due to their vintage, the old units for
the country. The Company is also registered with Central lube/wax production, as well as Edeleanu, were closed down
Depository Company of Pakistan Limited (CDC). in 1986. In 1999, ARL commenced JP-1 pipeline despatches,
and in 2000, a Captive Power Plant with installed capacity of
Original paid-up capital of the Company was Rs 80 million
7.5 Megawatt was commissioned. Another expansion and
which was subscribed by the holding company i.e. AOC,
upgradation project was completed in 1999 with the installation
Government of Pakistan, investment companies and general
of a Heavy Crude Unit of 10,000 bpd and a Catalytic Reformer
public. The present paid-up capital of the Company is Rs
of 5,000 bpd. ARL’s current nameplate capacity stands at
568.62 million.
40,000 bpd and it possesses the capability to process lightest
ARL is the pioneer of crude oil refining in the country with its to heaviest (10-65 API) crudes.
operations dating back to 1922. Backed by a rich experience
of more than 85 years of successful operations, ARL’s plants
have been gradually upgraded/replaced with state-of-the-art
hardware to remain competitive and meet new challenges and
requirements.
Management Committee
Notice is hereby given that the 29th Annual Ordinary Business as fully paid bonus shares to the members of the
General Meeting of the Company will be held Company, whose names appear on the register of
1. To confirm the minutes of the Fifteenth (15th) Extra-Ordinary
at Pearl Continental Hotel, Rawalpindi on members as at close of business on
General Meeting held on 11th January, 2007.
October 17, 2007, in the proportion of one (1) new
Thursday, October 25, 2007 at 11:00 a.m. to
2. To receive, consider and approve the Audited Accounts of share for every four (4) shares held;
transact the following business: the Company together with the Directors’ and Auditor’s
b. that the Bonus Shares so allotted shall rank pari
Reports for the year ended June 30, 2007.
passu in every respect with the existing shares;
3. To appoint auditors for the year ending June 30, 2008 and
c. that the members entitled to fractions of a share shall
fix their remuneration.
be given sale proceeds of their fractional entitlement
4. To consider and, if thought fit, declare a final cash dividend for which purpose the fractions shall be consolidated
as recommended by the Board of Directors for the year into whole shares and sold in the stock market; and
ended June 30, 2007.
d. that the Secretary of the Company be authorised and
5. To transact such other business as may be placed before empowered to give effect to this resolution and to do
the meeting with the permission of the Chairman. or cause to do all acts, deeds and things that may
Special Business be necessary or required for issue, allotment and
distribution of Bonus Shares, including export of
6. To consider and, if thought fit, to pass the following bonus shares in respect of non-resident shareholders.”
Resolution as an ordinary resolution:
By Order of the Board
“Resolved:
a. that a sum of Rs 142,155,000 out of the profits of the
Company available for appropriation as at
June 30, 2007, be capitalized and applied for issue The Refinery Khurram Shiraz
of 14,215,500 ordinary shares of Rs 10 each allotted Morgah, Rawalpindi Company Secretary
October 04,2007 October 04, 2007
10 AT TO C K R E F I N E RY L I M I T E D
Notes: ii. A member entitled to vote at this meeting may appoint Statement under Section 160 (1) (b)
i. Share Transfer Books of the Company will remain closed another member as his/her proxy to attend and vote. of the Companies Ordinance, 1984
and no transfer of shares will be accepted for registration Proxies in order to be effective must be received by the
Issue of Bonus Shares:
from October 18, 2007 to October 24, 2007 (both days Registered Office of the Company, duly stamped and
inclusive). Transfers received in order at the Shares signed, not later than 48 hours before the time of the The Directors are of the view that with the existing profitability,
Department of M/s. Noble Computer Services (Pvt) Limited, meeting. the Company’s financial position justifies capitalization of
2nd Floor, Sohni Centre, BS 5&6, Main Karimabad, Rs 142,155,000 out of profits available for appropriation as at
iii. CDC account holders shall follow the under mentioned
Block-4, Federal B Area, Karachi-75950, Pakistan, by the June 30, 2007, by issuing fully paid Bonus Shares in the
guidelines as laid down in Circular No.1 dated
close of business on October 17, 2007 will be treated in proportion of one (1) Bonus Share for every four (4) ordinary
January 26, 2000 issued by the Securities & Exchange
time for the entitlement to Bonus Shares, if declared. shares held. The Directors of the Company, directly or indirectly,
Commission of Pakistan:
are not personally interested in this issue, except to the extent
a. In case of individuals, the account holder or sub- of their shareholding in the Company.
account holder and/or the person whose securities
are in group account and their registration detail is
uploaded as per the regulations, shall authenticate
identity by showing his/her original National Identity
Card (NIC), or original Passport at the time of attending
the meeting.
b. In case of corporate entity, the Board of Directors’
resolution/power of attorney with specimen signature
of the nominee shall be produced (unless provided
earlier) at the time of meeting.
iv. Members are requested to promptly notify the Company
of any change in their address.
v. Form of proxy is enclosed herewith.
vi. Statement of material facts, under Section 160 (1) (b) of
the Companies Ordinance, 1984, pertaining to the Special
Business referred above under Agenda item 6 is annexed
to this Notice of Meeting being sent to the members.
ANNUAL REPORT 2007 11
12 AT TO C K R E F I N E RY L I M I T E D
On behalf of the Board I am pleased to welcome our esteemed shareholders to the 29th Annual
General Meeting of the Company and to present annual review of the results of Company’s
Chairman's Review operations and audited financial statements for the financial year ended 30 June, 2007.
Chairman's Review
Employee Relations
A healthy and cordial relationship with its employees with
congenial atmosphere at work place remain to be the main
focus of the management in its employee relations functionalities.
Your Company’s management is actively engaged in employees
career development and progression. An environment exists
where employees understand the Company’s objectives, the
market conditions in which the Company operates and the risks
it must mitigate to ensure ideal working conditions for both,
labour and management. The labour – management relationship
continues to be cordial and is based on cooperation and trust
iii. Exports Trophy 2006 with positive and flexible attitude from both sides creating a Acknowledgement
good working environment with the common objective of serving On behalf of the Board, I would like to acknowledge the support
Based on achieving highest exports in the region the
the Company’s interests and employee welfare. received from the Ministry of Petroleum & Natural Resources
Company also won the Rawalpindi Chamber of Commerce
and Industry Export Trophy for the year 2006. Further, the and other Government organizations and express gratitude to
Company was also awarded Special Merit Exporter Award our valued customers, crude oil suppliers, banks, suppliers and
for 2006 for its exports and foreign exchange earnings of contractors for their continued cooperation.
over Rs 7 billion by the Federation of Pakistan Chambers Further, I would also like to thank my colleagues on the Board
of Commerce & Industry (FPCCI). and record my appreciation of the services and contributions of
iv. Best Corporate Report Award the Directors who are representing the Audit, Technical and
Finance Committees of the Board.
In addition, the Company ever since the inception of Best
Corporate Report Award in 2000 continues to receive Before concluding, I also wish to express my thanks for the
awards for Top positions in Fuel & Energy Sector for continued interest and support of our esteemed shareholders
presenting the best corporate annual reports. For the and on behalf of the Board would like to extend our assurance
Annual Report 2005, it has received Award for 2nd position that the Board of Directors would continue to work in the best
I would like to appreciate the efforts and dedication of the officers,
in the sector. interest of the Company and to create value addition for its
staff, workers of the Company and the CBA who enabled the
shareholders.
On behalf of the shareholders and the Board of Directors, I wish management to run the Company smoothly and efficiently during
to congratulate and compliment the Company’s management the year for profitable operations.
and staff for bringing these laurels.
Directors' Report
On behalf of the Board of Directors, I am pleased 2. Pricing Formula
The financial results for the year ended June 30, 2007 are
to present the Company’s 29th Annual Report which It would be recalled that the refineries Import Parity
summarized below:
includes the Audited Financial Statements of the Pricing Formula was modified with effect from
Rs 000’s
Company together with Auditors' Report thereon July 1, 2002 whereby the minimum rate of return of 10%
for the year ended June 30, 2007. Profit before tax from on paid-up capital, was dispensed with and net profit
refinery operations 960,883 after tax from refinery operations (if any) above 50% of
1. Financial Results
Less: Provision for taxation 456,550 the paid-up capital at that time is required to be diverted
The Company has earned net profit after tax of Rs 748.98 to a special reserve to offset any future loss or make
Profit after taxation from
million during the year. Although the international prices investment for expansion / upgradation of the Refinery.
refinery operations 504,333
for both crude oil and products increased sharply during
Income from non-refinery As the shareholders have continuously been advised in
the year 2006-07, the increase in products prices during
operations after tax 244,652 the earlier reports, the Company has contested the
the 2nd half was higher than the crude prices due to
abolition of the minimum guaranteed rate of return as a
which the refiners’ margin increased during the year. Net profit for the year after taxation 748,985
clause in the existing Agreement between the Company
Changes in products mix also favourably contributed to Unappropriated profit brought forward 267,428 and the Government of Pakistan to this effect cannot be
the margin with increase in sales of motor gasoline and
Profit available for appropriation 1,016,413 changed unilaterally by either party.
consequent decrease in the exports of naphtha at higher
prices. Appropriations: The Government has recently through the Federal Budget
2007-08 made certain modifications in the products pricing
The gross refiner’s margin (GRM) continued to decline The Directors propose that this should be utilized in providing
mechanism, whereby 5% + 1% deemed duties on
during the first two quarters and part of third quarter of for:
Kerosene Oil and LDO and additional 1% surcharge
the year 2006-07 which resulted in a loss from refinery - Transfer to reserve for expansion/ included in JP-8 pricing has been withdrawn. This has
operations of Rs 49.12 million. However, during the third modernization as per the stipulations resulted in reduced ex-refinery prices of these products
quarter the GRM started improving and during the of the pricing formula 358,533
fourth quarter the overall annual average improved to
- Final cash dividend at the rate of 40% Sales Revenue Composition
convert from negative margin to positive margin resulting (Rupees in Million)
(equivalent to Rs 4.00 per share of
in profit from refinery operations of Rs 504.33 million.
Rs 10/- each) now proposed 227,448
This change in profitability was also contributed by 20,000
increased demand for motor gasoline, with corresponding - Transfer to reserve for issue of bonus
15,000
reduction in naphtha exports, as a result of curbing of shares in the proportion of 1 share for
10,000
smuggling of this product due to domestic rationing of every 4 shares held i.e. 25% 142,155
5,000
this product in one of the neighbouring countries and 728,136
geo-political changes in the border areas. The industry - Leaving an un-appropriated profit to be 2002-03 2003-04 2004-05 2005-06 2006-07
0
had always been demanding that in order to promote the carried forward to next year 288,277 Motor gasoline Naphtha Diesel
sales of local refineries production, it was imperative to Kerosene/Jet Fuels FFO Asphalt Others
Directors' Report
ceased effective September 2006 as a result of which Cash Dividend and Bonus Shares
the 3 years average cannot be determined, a revised
0 10% 20% 30% 40% 50%
formula was to be given for motor gasoline effective
July 2007. A dialogue and a process of exchange of
information was initiated during the year with several
options being considered as an alternate method for PMG
pricing. However, after several joint meetings, despite
assurances given by the Government that refineries shall
not be put into an adverse financial position, the
Government was inclined to opt for a PMG pricing formula
proposed by the World Bank and linked to 95 RON
Arab Gulf prices that would have effectively reduced the
Product's Prices
US $ Per Ton ex-refinery prices with a negative impact of over
800 Rs 700 million. This matter was again taken-up with the 3. Dividend
Ministry of Petroleum & Natural Resources at a joint The Directors are recommending a final dividend at the
600
meeting and after deliberations it was agreed to defer rate of 40% (Rs 4 per share of Rs 10 each) and issue of
400
the matter of revision in motor gasoline pricing and to bonus shares 25% i.e. one share for every four shares
review the position with a view to determine a viable held for the year ended June 30, 2007.
200 pricing formula that would effectively safeguard refineries’
4. Share Capital
revenues and protect their profitability and keep them
0
operational. The issued, subscribed and paid up capital of the Company
PMG KERO HSD F.F.O.
as at June 30, 2007 was Rs 568.62 million.
The Company alongwith other two refineries operating
on same pricing formula continues to strongly defend the
and shall have a corresponding impact on Company’s pricing formula on the contention that the pricing formula
profitability. The Company immediately responded to this and profitability has to be seen in a long term perspective
measure and requested the Government to compensate rather than a short term approach which position has
for this loss through adjustments in products pricing been vindicated by losses suffered during the prior periods
mechanism. while operating under the same pricing mechanism.
The prices of motor gasoline (PMG) were being calculated Your Company expects that all concerned authorities
by including an element of price differential based on shall review the subject rationally without being influenced
Caltex Bahrain Naphtha and 87 RON motor gasoline by the high prices arising from international prices which
price. However, since the publication of prices of Caltex are beyond any one’s control.
Bahrain 87 RON motor gasoline in Platts Oilgram has
ANNUAL REPORT 2007 21
Directors' Report
Directors' Report
Licensor/Technology providers in the world. ARL will then PMG and future requirement to upgrade the product from
be in a position to move to the next phase, i.e. Engineering, present 87 RON to 90 RON, the installation of
Procurement and Construction. The decision for the Isomerization unit has also become necessary and
implementation of the Diesel HydroDesulfurization Unit economically justified.
Project would however be subject to certain incentives
6.5 Distributed control system (DCS)
required from the Government in the pricing of this product
for Howe-Baker (HB) Units I & II and
to cover the intensive capital cost required for its
new Heater for HB-II Unit
completion. Several joint meetings of the refineries with
the Government have already taken place on this subject. Work on the DCS project at Heavy crude unit and Reformer
plant has been completed and is nearing completion
6.4 Pre-flash Unit for capacity enhancement
at HB Units at a total cost of over Rs 75 million. Further,
The Company had originally planned to proceed with the a new Heater for HB-II Unit is being procured and installed
EPC contract for Pre-flash, Isomerization and Diesel at a total cost of Rs 76 million. This would not only prevent
HydroDesulfurization units after the Front-End Engineering unplanned shut downs but would also make the unit to
Design (FEED) package for the Isomerization unit was safely operate at a higher throughput of 6,000 bpd as
received from the Licensor M/s UOP of USA in against the nameplate capacity of 5,000 bpd.
January 2008. However, the Lummus Distillation unit
6.6 Storage capacity
which has been operating for over 65 years has outlived
its life and has now started showing signs of various The Company, as part of its on-going activity, and in order
operational problems. Since, it may not be advisable to to have more operational flexibility as well as to replace
continue operating with this plant for further extended old tanks had undertaken construction of crude oil and
time, it has become essential to expedite the installation products storage tanks of various capacities. While the
of a Pre-flash unit, for which the feed package has already construction of a 100,000 barrels crude oil storage tank
been received, that shall enhance the overall refining is in progress with a total capital outlay of Rs 69 million,
capacity to 48,400 bpd. Accordingly, the Company has two Jute Batching Oil (JBO), one tank for HSD and one
planned to proceed with the preparation of ITB documents tank for asphalt storage were completed during the year
for both the Pre-flash and Isomerization units alongwith at a total cost of Rs 55 million. Additionally, as part of
feed package for offsite facilities as well as soliciting reorganizing the storage tanks for various products
interest of international engineering contractors. The including naphtha and meeting the requirements for
projects relating to Isomerization units and Pre-flash supply of fuel oil to the Power Plant , one new furnace
are estimated to cost over US $ 85 million and are fuel storage tank of 5,000 M. tons capacity and one
economically feasible to prevent loss of production once naphtha storage tank of 4,000 M. tons capacity are being
the Lummus unit is closed down on account of operational constructed to be completed in 2008-09 at an estimated
safety. Further, with the recent growth in the demand for cost of Rs 88 million.
ANNUAL REPORT 2007 25
26 AT TO C K R E F I N E RY L I M I T E D
Directors' Report
In accordance with its vision and mission statement, all • Enterprise Resource Planning (ERP) system, an IT based
efforts are made to improve the process and administrative solution, is an effective tool for optimizing working of
efficiency throughout the Company. During the year, today’s modern and complex organisation. After
your Company continued with its practice of business successfully implementing the ERP financials the
process re-engineering and review to further improve its Company is now moving towards the implementation of
product quality and simultaneously boost production MAXIMO for its Procurement, Material management and
efficiencies. Major efforts in this direction are outlined Plant Maintenance module. MAXIMO is capable of
below: effective material control and overall control over quality
of maintenance system.
• Reformer and HCU DCS system was upgraded. New
system has increased operational reliability and the 8. Corporate Social Responsibility
upgraded software has the facility to store up to 5 years Social responsibility is one of the Core Values of the
historical data. Further, the DCS can be remotely accessed Company. Your Company has committed itself to conduct
via Local Area Network (LAN) and the Operator security the business in an honest, ethical, transparent and legal
has also been enhanced. manner. Your Company wants to be seen as a role model
• At Effluent Treatment Plant (ETP), the SRC and DAF in the Corporate World and Community by its conduct
units’ controls have been switched from manual operation and business practices.
to PLC system enabling simultaneous monitoring of all Your Company continued to carry out its responsibility
units from single location, remote access to data and with respect to protection and promotion of interest of its
storage/retrieval of historical data. customers, employees, shareholders, communities and
• Successful PIGG decoking was carried out at crude the environment in all aspects of its operations. Various
charge heaters tubes at HBU-I, HBU-II and HCU. Besides initiatives taken by the Company in this respect are given
prolonging the life of heaters, it has helped to improve below.
heaters’ performance and enabled the plants to run at 8.1 Social and Environmental Welfare Projects:
higher heater transfer temperatures, consequently
obtaining increased middle distillates. i. Attock Sahara Foundation (ASF) is a non-profit NGO
sponsored by the Company involved in the areas of
• A new cooling tower (CT-3) has been successfully women development, vocational/technical training, poverty
commissioned. Now all plants have more reliable, compact alleviation and basic health. The Company promotes all
and efficient cooling towers in place of old water showering activities organized by ASF for the purpose of raising
system. Addition of this cooling tower has given the funds by providing required administrative support.
Recently ASF has been awarded a project (the only NGO
ANNUAL REPORT 2007 27
Directors' Report
Directors' Report
world class sustainable HSE good management practices iii. Oily Sludge Bioremediation: The Company has started
for the overall benefit of all stakeholders including the disposing its oily sludge through bioremediation thus
surrounding community. contributing towards the sustainability of clean
environment.
All efforts are being made to make all processes
environment friendly, safe and efficient. Some of the iv. Drinking Water Treatment: The Company has its own
initiatives taken during the year in this respect are water treatment facility through which drinking water is
summarized below: supplied not only to the employees but also to surrounding
areas. Continuous awareness is also being created for
i. Solar Water and Space Heating System: The Company
use of solar disinfected water. Reverse Osmosis plant is
had taken initiative in the field of solar thermal energy.
also in commissioning phase, which will provide further
The measures taken thus far include use of solar energy
purified water.
Planning and Career Management Project started during for water heating within ARL’s estate, development of a
the year is one of major initiatives in this direction. This solar space heating system and solar distilled water still. v. Solid Waste Composting: Your Company has started an
enormous work has been divided in two phases. During National Institute of Silicon Technology has provided the Integrated Solid Waste Management system to control
the year, Phase-I has been completed under which technical support for this work. generation, storage, collection, transport, processing and
succession plan for sixteen critical positions has been disposal of solid wastes. Composting of solid waste
developed. consisting of biodegradable organic materials is carried
out in an environmental friendly way to produce fertilizer
iii. Climate Survey: Human Resources Department carried
that can be used to support plant growth and as a soil
out an Organizational Climate Survey. The objective of
amendment. The fertilizer produced through composting
this survey was to examine employee opinions about the
is being used in household lawns and at vegetable gardens
quality of their organization's work climate. The feedback
that supply vegetable to employees and refinery canteen.
obtained from employees is being used to identify
opportunities for improvements and make the Company vi. Hazardous Waste Incineration: Hazardous waste poses
an employer of choice. potential threat to public health and environment. Your
Company has taken the lead to manage hazardous waste
iv. Awards and Recognition: In order to recognize the valuable
by installing three stage state of the art incinerator which
services rendered by the employees, the Company
is incinerating not only the Refinery facilities’ hazardous
distributes various awards that include Long Service
ii. Zero Effluent Discharge: The objective of Zero Effluent waste but also providing services to other interested
Award, Man of the Quarter Award, Safety Award and
is to recycle and minimize the water requirement for industries and hospitals.
House Keeping Award.
refinery and to conserve the environment and save
8.3 Health, Safety and Environment (HSE) energy. The Company has successfully completed the
The Company remains committed towards achieving the recycling of cooling towers blow down, drinking water
highest standards of HSE. To realize this mission a treatment plant wastewater, car wash wastewater and
customized plan was drawn by adopting and implementing kitchen wastewater.
ANNUAL REPORT 2007 31
Directors' Report
8.4 Other CSR Activities and Annual Sports Competition were organized throughout • Meeting the petroleum products demand of both the civil
The Company continued to provide potable water to the the year in which Company’s employees, their children and defense market
surrounding villages of Morgah, Nai Abadi, Kotha Kalan, and people of surrounding areas participated. Your
• Foreign exchange savings by providing import substitution
Jhamra and welfare organizations like SOS Village, Deaf Company takes pride that the sports facilities and
of petroleum products
& Dumb School, other schools and mosques in the vicinity conducive environment provided by it has contributed in
producing national heroes like Naseer Bunda and Shoaib • Generation of Government duties and taxes in the form
thus providing lifeline to the surrounding population of
Akhtar. of excise duty, petroleum development levy, sales tax
more than 50,000 people.
and customs duties on crude oil and sale of petroleum
The company continued its quest for environment 9. Contribution to the National Economy products both local and exports
endeavors using recycled water in ARL orchards through Attock Refinery is the only refinery located in the Northern • Deployment of a large transportation fleet for crude oil
drip irrigation system and growing vegetables through Region of Pakistan and thus holding a high strategic and products movement
organic farming. ARL has also stopped the use of position. It continues to make valuable contributions to
polythene bags and introduced paper bags at Fair Price • Employment and work opportunities
the National Economy some of which are enumerated
Shop at Morgah. below: The Company’s contribution to the national exchequer in
The Company firmly believes in the promotion of sports the form of taxes and duties amounted to over
• Providing an outlet to country’s indigenous production of
for healthy development of community. In this connection Rs 14,361 million. Further, foreign exchange savings of
crude oil and more particularly from the Northern Region
a number of sports events like Annual Swimming Gala
ANNUAL REPORT 2007 33
Directors' Report
US $ 52.44 million were achieved through import • The system of internal controls are sound in design and
substitution and exports. are effectively implemented by the management and
monitored by the internal and external auditors as well
10. Credit Rating
as the Board of Directors and the Audit Committee. The
The Company successfully maintained its long-term and Board reviews the effectiveness of established internal
the short-term ratings of ‘AA-’ (Double A Minus) and ‘A1+’ controls through the Audit Committee and suggests,
(A One Plus), respectively. The credit rating was conducted wherever required, further improvement in the internal
by The Pakistan Credit Rating Agency (PACRA). control systems.
11. Corporate Governance • There are no significant doubts upon the Company’s
The Board of Directors and the Company remain ability to continue as a going concern.
committed to the principles of good corporate management • There is no reported instance of any material departure
practices with emphasis on transparency and disclosures. from the best practices of Corporate Governance.
The Board and management are cognizant of their
• Significant deviations from last years operating results,
responsibilities and monitor the refinery operations and
future plans and changes, if any, in pricing formula have
p e r f o r m a n c e t o e n h a n c e t h e a c c u r a c y,
been separately disclosed, as appropriate, in the
comprehensiveness and transparency of financial and
Chairman’s Review and this Report of the Directors.
non-financial information.
• Sales tax amounting to Rs 8.158 million for the month of
The Company is fully compliant with the Code of Corporate
June 2007 was outstanding as at June 30, 2007 which
Governance and as per the requirements of the listing
has been subsequently paid.
regulations, following specific statements are being given
hereunder: • The value of investment of employees provident and
pension funds, as at 31st December, 2006, based on
• Proper books of accounts of the Company have been
their latest audited accounts is given below:
maintained.
Rs in million
• The financial statements prepared by the management
present fairly its state of affairs, the results of its operations, Management Staff
cash flows and changes in equity. - Pension Fund 150.207
- Provident Fund 143.137
• Appropriate accounting policies have been consistently
applied in preparation of financial statements which Non-Management Staff
conform to the International Accounting Standards as - Provident Fund 112.838
applicable in Pakistan. The accounting estimates, wherever An unfunded gratuity provision of Rs 85.8 million also
required, are based on reasonable and prudent judgment. exists in the accounts of the Company under deferred
liabilities
ANNUAL REPORT 2007 35
• Key operating and financial data of last 6 years is annexed. Debt Equity Position in share capital on capitalisation of profits for issue of
(Rupees in Million)
bonus shares during the year.
A separate statement of compliance signed by the Chief
Executive Officer is separately included in this Annual 16. Holding Company
Report.
The Attock Oil Company Limited, incorporated in England,
12. Directors and Board Meetings held during is the Holding Company of Attock Refinery Limited.
the Year 17. Subsidiary
The three years term of office of seven (7) directors
The Company has a wholly owned subsidiary, Attock
shall expire on July 16, 2009. The three years term of
Hospital (Pvt) Limited (AHL).The accounts of AHL have
Chief Executive Officer, Mr. M. Adil Khattak expires on
been consolidated with the accounts of ARL and are
July 5, 2009.
annexed to these accounts.
Five meetings of Board of Directors were held between 13. Auditors
July 1, 2006 and June 30, 2007 and the attendance of
18. Investment in Associated Undertakings
The Auditors Messrs A.F. Ferguson & Co. Chartered
each director is given below: Accountants retire and offer themselves for reappointment. In addition to the investments made in prior years, the
The Audit Committee recommends the reappointment of Company enhanced its investment in Attock Petroleum
Total No. of
Messrs A.F. Ferguson & Co. Chartered Accountants as Limited from 20.91% as at June 30, 2006 to 21.70% as
Name of Directors meetings(*)
auditors for the financial year ending June 30, 2008. at June 30, 2007. Further, the Company acquired 30%
shares of Attock Gen Limited by making an investment
Mr. Tariq Iqbal Khan, Chairman 2* 14. Shareholding of Rs 540 million. The details of these investments are
Dr. Ghaith R. Pharaon *** 5 The total number of Company’s shareholders as at contained in Note 13 of the attached accounts for the
Mr. Shuaib Anwar Malik 5 June 30, 2007 was 4,098 as against 3,044 on year ended June 30, 2007.
June 30, 2006. The pattern of shareholding as at The results of these associated undertakings in so far as
Mr. Laith Ghaith Pharaon ** 4*
June 30, 2007 alongwith necessary disclosure as required they relate to the Company’s share in these entities have
Mr. Wael Ghaith Pharaon ** 5 under the Code of Corporate Governance is annexed. been incorporated in the enclosed Consolidated financial
Mr. Bashir Ahmad 4* No trading in the shares of the Company has been statements.
Mr. Abdus Sattar 5 reportedly carried out during the year by the Directors, On behalf of the Board
Chief Executive Officer, Chief Financial Officer, Company
Mr. M. Adil Khattak, CEO 5 Secretary and their spouses and minor children.
* Leave of absence was granted to the Chairman / Directors
15. Earning Per Share
who could not attend the meeting. Rawalpindi Tariq Iqbal Khan
Based on the net profit for the current year the earning September 10, 2007 Chairman
** Overseas directors attended the meetings either in person
per share was Rs 13.17 (2006 : Rs 5.34). The last year
or through alternate directors.
earning diluted from Rs 6.68 consequent to the increase
36 AT TO C K R E F I N E RY L I M I T E D
Pattern of Shareholding
as at June 30, 2007 Form 34 (Section 236)
No. of Shareholders Total
Shareholding
CDC Others Total Shares Held
659 100 759 From 1 to 100 38,850
1,103 68 1,171 From 101 to 500 386,191
721 149 870 From 501 to 1,000 717,489
911 25 936 From 1,001 to 5,000 2,215,697
146 4 150 From 5,001 to 10,000 1,143,326
63 Nil 63 From 10,001 to 15,000 793,016
25 1 26 From 15,001 to 20,000 479,249
18 Nil 18 From 20,001 to 25,000 429,318
10 Nil 10 From 25,001 to 30,000 288,948
18 Nil 18 From 30,001 to 35,000 583,115
7 Nil 7 From 35,001 to 40,000 267,400
8 Nil 8 From 40,001 to 45,000 346,510
11 Nil 11 From 45,001 to 50,000 533,437
3 Nil 3 From 50,001 to 55,000 160,500
4 Nil 4 From 55,001 to 60,000 233,700
2 Nil 2 From 60,001 to 65,000 123,750
3 Nil 3 From 65,001 to 70,000 202,325
2 Nil 2 From 70,001 to 75,000 145,750
1 Nil 1 From 75,001 to 80,000 75,032
1 Nil 1 From 80,001 to 85,000 81,250
1 Nil 1 From 85,001 to 90,000 85,200
2 Nil 2 From 95,001 to 100,000 200,000
2 Nil 2 From 105,001 to 110,000 220,000
2 Nil 2 From 110,001 to 115,000 223,525
1 Nil 1 From 115,001 to 120,000 119,000
2 Nil 2 From 125,001 to 130,000 256,650
2 Nil 2 From 140,001 to 145,000 287,600
1 Nil 1 From 145,001 to 150,000 149,175
1 Nil 1 From 165,001 to 170,000 170,000
1 Nil 1 From 175,001 to 180,000 180,000
1 Nil 1 From 180,001 to 185,000 184,700
1 Nil 1 From 185,001 to 190,000 188,020
1 Nil 1 From 200,001 to 205,000 203,210
1 Nil 1 From 215,001 to 220,000 216,037
1 Nil 1 From 220,001 to 225,000 220,100
ANNUAL REPORT 2007 37
2,500
2,000
1,500
1,000
500
0
2000 2001 2002 2003 2004 2005 2006 2007
Gross profit Operating profit Profit after tax Dividend including bonus shares
Equities & Liabilities Fixed and Current Assets Total Revenue including other Income
(Rupees) (Rupees) (Rupees in Million)
Statement of Compliance
with the Code of This statement is being presented to comply with the Code of policies along with the dates on which they were approved
Corporate Governance Corporate Governance contained in listing regulations of Karachi, or amended has been maintained.
Lahore and Islamabad Stock Exchanges for the purpose of
7. All the powers of the Board have been duly exercised
Name of Company – ATTOCK REFINERY LIMITED establishing a framework of good governance, whereby a listed
and decisions on material transactions, including
Year Ended – JUNE 30, 2007 company is managed in compliance with the best practices of
appointment and determination of remuneration and terms
corporate governance.
and conditions of employment of the CEO and other
The Company has applied the principles contained in the Code executive directors are taken by the Board.
in the following manner:
8. The meetings of the Board were presided over by the
1. The Company encourages representation of independent Chairman and the Board met at least once in every
non-executive directors and directors representing minority quarter. Written notices of the Board meetings, along with
interests on its Board of Directors. At present the Board agenda and working papers, were circulated at least
comprises of seven non-executive directors of whom seven days before the meetings. The minutes of the
three are independent directors including one director meetings were appropriately recorded and circulated.
representing institutional equity interest and minority
9. The directors were apprised of their duties and
shareholders.
responsibilities through various in-house and external
2. None of the directors is serving as a director in more than orientation courses.
ten listed companies, including this Company, unless
10. The directors’ report for this year has been prepared in
specifically exempt.
compliance with the requirements of the Code and fully
3. All the resident directors of the Company are registered describes the salient matters required to be disclosed.
as taxpayers and none of them has defaulted in payment
11. The financial statements of the Company were duly
of any loan to a banking company, a DFI or an NBFI or,
endorsed by CEO and CFO before approval of the Board.
being a member of a stock exchange, has been declared
as a defaulter by that stock exchange. 12. The directors, CEO and executives do not hold any
interest in the shares of the Company other than that
4. No casual vacancy occured on the Board during the year.
disclosed in the pattern of shareholding.
5. The Company has prepared a ’Statement of Ethics and
13. The Company has complied with all the corporate and
Business Practices’, which has been signed by all the
financial reporting requirements of the Code.
directors and employees of the Company.
14. The Board has formed an audit committee. It comprises
6. The Board has developed a vision/mission statement,
3 members, all non-executive directors including the
overall corporate strategy and significant policies of the
Chairman of the committee who is an independent
Company. A complete record of particulars of significant
non-executive director.
46 AT TO C K R E F I N E RY L I M I T E D
15. The meetings of the audit committee were held at least 18. The statutory auditors or the persons associated with
once every quarter prior to approval of interim and final them have not been appointed to provide other services
results of the Company and as required by the Code. except in accordance with the listing regulations and the
The terms of reference of the committee have been auditors have confirmed that they have observed IFAC
formed and advised to the committee for compliance. guidelines in this regard.
16. The Board has set-up an effective internal audit function 19. We confirm that all other material principles contained in
who are considered suitably qualified and experienced the Code have been duly complied with.
for the purpose and are conversant with the policies and
procedures of the Company and they are involved in the
internal audit function on a full time basis.
17. The statutory auditors of the Company have confirmed M. Adil Khattak
September 05, 2007 Chief Executive Officer
that they have been given a satisfactory rating under the
quality control review programme of the Institute of
Chartered Accountants of Pakistan, that they or any of
the partners of the firm, their spouses and minor children
do not hold shares of the Company and that the firm and
all its partners are in compliance with International
Federation of Accountants (IFAC) guidelines on code of
ethics as adopted by Institute of Chartered Accountants
of Pakistan.
ANNUAL REPORT 2007 47
3%
2%
16%
0%
79%
ANNUAL AUDITED
FINANCIAL STATEMENTS 2007
ATTOCK REFINERY LIMITED
50 AT T O C K R E F I N E RY L I M I T E D
ANNUAL REPORT 2007 51
We have audited the annexed balance sheet of Attock (b) in our opinion (d) in our opinion no Zakat was deductible at source
Refinery Limited as at June 30, 2007 and the related profit under the Zakat and Ushr Ordinance, 1980.
(i) the balance sheet and profit and loss account
and loss account, cash flow statement and statement of
together with the notes thereon have been
changes in equity together with the notes forming part
drawn up in conformity with the Companies
thereof, for the year then ended and we state that we have
Ordinance, 1984, and are in agreement with
obtained all the information and explanations which, to
the books of account and are further in
the best of our knowledge and belief, were necessary for
accordance with accounting policies
the purposes of our audit. Chartered Accountants
consistently applied;
Islamabad: September 10, 2007
It is the responsibility of the Company's management to establish
(ii) the expenditure incurred during the year was
and maintain a system of internal control, and prepare and
for the purpose of the Company's business;
present the above said statements in conformity with the
and
approved accounting standards and the requirements of the
Companies Ordinance, 1984. Our responsibility is to express (iii) the business conducted, investments made
an opinion on these statements based on our audit. and the expenditure incurred during the year
were in accordance with the objects of the
We conduct our audit in accordance with the auditing standards
Company;
as applicable in Pakistan. These standards require that we
plan and perform the audit to obtain reasonable assurance (c) in our opinion and to the best of our information and
about whether the above said statements are free of any according to the explanations given to us, the balance
material misstatement. An audit includes examining on a test sheet, profit and loss account, cash flow statement
basis, evidence supporting the amounts and disclosures in the and statement of changes in equity together with the
above said statements. An audit also includes assessing the notes forming part thereof conform with approved
accounting policies and significant estimates made by accounting standards as applicable in Pakistan, and,
management, as well as, evaluating the overall presentation give the information required by the Companies
of the above said statements. We believe that our audit provides Ordinance, 1984, in the manner so required and
a reasonable basis for our opinion and, after due verification, respectively give a true and fair view of the state of
we report that: the Company's affairs as at June 30, 2007 and of the
profit, its cash flows and changes in equity for the
(a) in our opinion, proper books of account have been kept
year then ended; and
by the Company as required by the Companies
Ordinance, 1984;
52 AT T O C K R E F I N E RY L I M I T E D
Share capital
Authorised 4 1,000,000,000 1,000,000,000
Issued, subscribed and paid-up 4 568,620,000 454,896,000
Reserves and surplus 5 3,210,044,648 2,574,783,836
3,778,664,648 3,029,679,836
32,187,952,684 29,096,285,136
ANNUAL REPORT 2007 53
Current assets
32,187,952,684 29,096,285,136
Balance at June 30, 2005 349,920,000 5,948,506 2,187,628,247 55,000 182,422,055 1,923,338,591 4,649,312,399
Balance at June 30, 2006 454,896,000 5,948,506 2,187,628,247 55,000 381,152,083 1,923,338,591 4,953,018,427
Balance at June 30, 2007 568,620,000 5,948,506 2,546,161,607 55,000 657,879,535 1,923,338,591 5,702,003,239
1. Legal status and operations 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.
Amendments to the published standards and new interpretations effective for accounting periods beginning on or after January 1, 2006:
IAS 19 (Amendment) – Employee Benefits is mandatory for the Company’s accounting periods beginning on or after January 1, 2006. This
amendment introduces the option of an alternate recognition approach for actuarial gains and losses and requires new disclosures. As the
Company does not intend to change its accounting policy adopted for the recognition of actuarial gains and losses, the adoption of this amendment
only impacts the format and extent of disclosures as given in note 28 to these financial statements.
Standards, amendments and interpretations effective for accounting periods beginning on or after January 1, 2006 but not relevant:
The other new standards, amendments and interpretations that are mandatory for accounting periods beginning on or after January 1, 2006
are not considered to be relevant or do not have any significant effect on the Company’s operations.
The following new accounting standards and amendments to existing accounting standards have been published and are not effective for the
purpose of these financial statements.
Adoption of the above accounting standards is not considered to have any significant effect on the Company's financial statements.
These financial statements have been prepared under the historical cost convention modified by revaluation of free hold land referred to in note 2.5
and certain other modifications as required by International Accounting Standards referred to in the accounting policies given below.
58 AT T O C K R E F I N E RY L I M I T E D
Dividend is recognised as a liability in the financial statements in the period in which it is declared.
2.4 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.
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 includes
borrowing cost related to the financing of major projects during construction phase.
b) Depreciation
Depreciation is charged to income on straight line method to write off the cost of an asset over its estimated useful life at the rates specified in
note 11. The carrying values of tangible fixed assets are reviewed for impairment when events or changes in circumstances indicate that carrying
value may not be recoverable. If any such indication exists and where the carrying value exceeds the estimated recoverable amount, the assets
are written down to recoverable amount.
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.
2.6 Investments
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
ANNUAL REPORT 2007 59
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.
Investment securities held by the Company which may be sold in response to needs for liquidity or changes in interest rates, exchange rates
or equity prices are classified as available for sale. These investments are initially recognised at cost and subsequently re-measured at fair
value.
Unrealised gains and losses arising from changes in the fair value in respect of exchange differences of available for sale investments are
treated as referred to in note 2.9.
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.
2.8 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.
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 rate prevailing at the balance sheet date. Exchange differences
are dealt with through the profit and loss account.
60 AT T O C K R E F I N E RY L I M I T E D
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 agreed parameters. The Government
has, effective July 1, 2007 made certain modifications in the agreed parameters which has effectively reduced the ex-refinery price of Kerosene
oil, Light Diesel Oil (LDO) and JP-8 which will correspondingly reduce the sales revenue. The Government is also reviewing the pricing formula
for Motor Gasoline and it is expected that a pricing formula for this product would be finalised with mutual consultations ensuring that the
refineries do not suffer loss on account of these changes to remain commercially viable.
Under the pricing formula the Company was entitled to a net of tax return on its paid-up capital with a guaranteed minimum of 10% and allowable
maximum of 40% in respect of its refinery operations.
Effective July 1, 2002, the Government has further modified the pricing formula applicable to the Company. Under this modified formula the
Refinery shall not claim from the Government any shortfall in profitability and net profit after tax (if any) from refinery operations above 50% of
paid-up capital as at July 1, 2002 is required to be diverted to a special reserve to offset any future loss or make investment for expansion or
upgradation of Refinery. However, the Company has contested the abolition of minimum rate of return of 10% and represented to the Government
to modify the already existing agreement for guaranteed return with mutual consent of both the parties.
iii) Dividend income is recognised when the right to receive dividend is established.
The transactions with related parties in respect of sale of petroleum products, the prices of which are regulated and notified by the Government, and
crude oil purchases, the prices of which are determined in accordance with the agreed pricing formula as approved by the Government, are recorded
at the prices so notified or determined.
In case of sale of deregulated petroleum products, the transactions are made at Company notified prices for all its customers. In certain cases,
reduced price is allowed on commercial considerations. All other transactions are carried out on commercially negotiated terms.
Borrowing cost related to the financing of major projects during construction phase is capitalised. All other borrowing costs are expensed as incurred.
The main features of the retirement benefit schemes operated by the Company for its employees are as follows:
ANNUAL REPORT 2007 61
A pension plan for its Management Staff and a gratuity plan for its Non-Management Staff. The pension plan is invested through an approved
trust fund while the gratuity plan is book reserve plan. Contributions are made in accordance with actuarial recommendation. Actuarial valuations
are conducted annually using projected unit credit method. The obligation 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.
Approved contributory provident fund for all employees to which equal monthly contribution is made both by the Company and the employee
at the rate of 10% of basic salary.
The Company also provides for compensated absences for all employees in accordance with the rules of the Company.
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:
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.
b) Provisions
Provisions are recognised when a Company has a legal or constructive obligation as a result of past event if 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.
Trade receivables and other receivables are recognised and carried at original invoice amount/cost less an allowance for any uncollectible
amounts.
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.
62 AT T O C K R E F I N E RY L I M I T E D
3. Critical accounting estimates and The preparation of financial statements in conformity with the approved accounting standards requires the use of certain critical accounting estimates. It also
judgments 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:
2007 2006
Rupees Rupees
4. Share capital Authorised
100,000,000 (2006: 100,000,000) ordinary shares of Rs 10 each 1,000,000,000 1,000,000,000
The Attock Oil Company Limited held 31,274,100 (2006: 23,882,040) ordinary shares at the year end.
ANNUAL REPORT 2007 63
2007 2006
Rupees Rupees
5. Reserves and surplus Capital reserve
Liabilities taken over from The Attock Oil
Company Limited no longer required 4,799,955 4,799,955
Capital gain on sale of building 653,906 653,906
Insurance and other claims realised relating to
pre-incorporation period 494,645 494,645
5,948,506 5,948,506
Revenue reserves
Special reserve for expansion/modernisation - note 5.1
Additional revenue under processing fee formula
related to 1990-91 and 1991-92 32,929,000 32,929,000
Surplus profits under the import parity pricing formula 2,513,232,607 2,154,699,247
2,546,161,607 2,187,628,247
General reserve 55,000 55,000
Surplus - unappropriated profit 657,879,535 381,152,083
3,204,096,142 2,568,835,330
3,210,044,648 2,574,783,836
5.1 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. Transfer to / from special reserve is recognised at each quarter end and is reviewed
for adjustment based on profit / loss on an annual basis.
6. Surplus on revaluation This represents surplus over book value resulting from revaluation of freehold land as referred to in note 11.1 and is not available for distribution to shareholders.
of freehold land
2007 2006
Rupees Rupees
7. Long term loans - secured Syndicate Financing Facility – 3,597,000,000
Morabaha Financing Facility – 950,000,000
– 4,547,000,000
Less:Current portion
Syndicate Financing Facility – 899,250,000
Morabaha Financing Facility – 237,500,000
– 1,136,750,000
– 3,410,250,000
64 AT T O C K R E F I N E RY L I M I T E D
7.1 The Company obtained a long term syndicate financing facility of Rs 3,597 million from a consortium of banks under the lead of Faysal Bank Limited
and a separate Morabaha financing facility from Faysal Bank Limited of Rs 950 million. These facilities were repayable in eight half yearly equal
installments commencing July 2006 and carried profit at base rate (six month KIBOR) plus 2.05% per annum upto January 1, 2006 and thereafter
at base rate plus 1.90% per annum for the remaining period of facilities. These facilities were secured by first pari passu charge by way of hypothecation
over all present and future current and movable fixed assets of the Company and mortgage over immovable property.
During December 2006, the Company repaid the entire outstanding balance of these loans.
8. Short term finance The Company's short term finance facility under mark-up arrangements aggregating Rs 70 million (2006: Rs 70 million) available from MCB bank expired
during the year. The Company is in the process of arranging fresh running finance facilities from various commercial banks to the extent of Rs 3.5 billion at
varying mark-up rates linked to three months and one month KIBOR.
2007 2006
Rupees Rupees
9. Trade and other payables Creditors - note 9.1 18,020,915,256 11,481,267,334
Due to The Attock Oil Company Limited – Holding Company 275,108,397 432,891,332
Due to associated companies
Pakistan Oilfields Limited 1,384,104,431 1,471,797,733
Attock Petroleum Limited 1,430,155 21,113,426
Attock Information Technology Services (Private) Ltd. 5,542,677 –
Accrued liabilities and provisions - note 9.1 737,636,316 223,933,625
Due to the Government under pricing formula - note 9.2 4,707,073,386 4,689,396,074
Advance payments from customers - note 9.3 5,532,717 10,518,689
Sales tax payable 7,197,593 127,011,850
Accrued mark-up/interest on long term loans – 124,133,100
Workers' Welfare Fund 131,988,739 103,033,871
Workers' Profit Participation Fund - note 9.4 65,840,211 36,869,261
Staff Provident Fund – 54,127
Deposits from customers adjustable against freight
and Government levies payable on their behalf 1,270,705 1,018,470
Security deposits 48,940,150 48,861,150
Unclaimed dividends 939,496 969,669
25,393,520,229 18,772,869,711
9.1 Creditors include an amount of Rs 5,434.461 million (2006 : Rs 1,615.257 million) in respect of crude oil price in excess of US$ 50 per barrel withheld
by the Company, pending finalisation of discount thereon, from payments made to suppliers for purchase of local crude oil as per the directive of
Ministry of Petroleum & Natural Resources (the Ministry).
ANNUAL REPORT 2007 65
9.2 The amount due to the Government under pricing formula is net of Rs 2,404 million (2006: Rs 1,570 million) price differential claim as referred to in
note 21.1 with a corresponding effect in creditors.
9.3 Advance payments from customers include Rs 2,855,486 (2006: nil) from Pakistan Oilfields Limited, an associated company, against sales of LPG.
2007 2006
Rupees Rupees
9.4 Workers' Profit Participation Fund
Balance at the beginning of the year 36,869,261 118,649,647
Add: Interest on funds utilised in the
Company's business - note 26 528,081 2,168,584
37,397,342 120,818,231
Less: Amount paid to the Fund 37,261,056 120,541,846
136,286 276,385
Add: Amount allocated for the year - notes 27 and 31 65,703,925 36,592,876
65,840,211 36,869,261
Commitments outstanding:
i) Capital expenditure 55,423,626 41,868,873
ii) Letters of credit other than for capital expenditure 125,775,143 33,659,700
66 AT T O C K R E F I N E RY L I M I T E D
Depreciation
As at June 30, 2006 1,927,250,000 41,717,658 917,743,462 12,071,368 27,489,823 19,436,692 2,945,709,003
As at June 30, 2007 1,927,250,000 52,184,189 700,751,629 6,759,744 24,144,304 19,172,403 2,730,262,269
11.1 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 value. Valuation was made on the basis of market value. The original cost of the land as at June 30, 2007 is Rs 3.911 million.
11.2 Effective from the current year, the Company has revised its estimate regarding useful life of computers. Accordingly, the annual depreciation rate
has been increased from 14.3% in previous years to 20% to reflect the pattern in which the assets' economic benefits will be consumed. Had the
change in accounting estimate not been made, the depreciation charge for the year would have been lower by Rs 4.470 million and the profit for
the year would have been higher to that extent. Correspondingly, the operating assets and equity as at June 30, 2007 would have been higher by
the same amount.
2007 2006
Rupees Rupees
11.3 The depreciation charge for the year has been allocated as follows:
Cost of sales 341,975,356 328,326,550
Administration expenses 13,360,853 10,875,215
Distribution cost 899,894 575,332
Desalter operating cost 632,500 632,500
356,868,603 340,409,597
12.1 Cost incurred by the Company on the Power Plant Project has been fully recovered from Attock Gen Limited, an associated company, set up for
the purpose of independently operating the Power Plant.
68 AT T O C K R E F I N E RY L I M I T E D
2007 2006
% age Rupees % age Rupees
Holdiing Holding
13. Long term investments Associated companies
Quoted
National Refinery Limited (NRL) - note 13.1 25 8,046,635,100 25 8,046,635,100
16,659,700 (2006: 16,659,700) fully paid
ordinary shares of Rs 10 each
Market value as at June 30, 2007: Rs 5,681 million
(2006: Rs 4,448 million)
Unquoted
Attock Gen Limited 30 540,000,000 – –
5,400,000 fully paid ordinary shares of Rs 100 each
Value based on net assets as at June 30, 2007: Rs 542 million
13.1 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 6.4% (2006: 6.30%), terminal growth rate of 5% (2006:
5%) and capital asset pricing model based discount rate of 14.30% (2006: 13.40%).
2007 2006
Rupees Rupees
14. Long term loans and deposits Loans to employees - considered good - note 14.1 21,079,761 20,748,226
Less: Amounts due within twelve months shown under current assets - note 19 10,990,473 9,999,521
10,089,288 10,748,705
Security deposits 865,021 865,021
10,954,309 11,613,726
14.1 Loans to employees are for purchase of car, refrigerator and for other purposes which are recoverable in 36, 24 and 60 equal monthly installments
respectively 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.
Loans to employees for refrigerator and other purposes are interest free while loans for purchase of car carry interest rates ranging from 3% to 15%
(2006: 3% to 15%) per annum. These do not include any amount outstanding for more than three years. These include an amount of Rs 3,551,595
(2006: Rs 2,232,870) 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 3,805,412 (2006: Rs 2,493,776).
2007 2006
Rupees Rupees
14.2 Reconciliation of carrying amount of loans to executives:
2007 2006
Rupees Rupees
16. Stores, spares and loose tools Stores (including items in transit
Rs 119.67 million; 2006: Rs 82.54 million) 446,578,908 410,806,882
Spares 219,661,310 208,976,739
Loose tools 595,775 708,542
666,835,993 620,492,163
Less: Provision for slow moving items 36,000,000 34,500,000
630,835,993 585,992,163
Finished products include stocks carried at net realisable value of Rs 236 million (2006: Rs 334 million). Adjustments amounting to Rs 43.8 million
(2006: Rs 72.9 million) have been made to closing inventory to write down stocks of finished products to their net realizable value.
18. Trade debts All debtors are unsecured and considered good.
Aggregate amount receivable from an associated company as at June 30, 2007 was Rs 1,010,953,152 (2006: Rs 1,062,120,659).
ANNUAL REPORT 2007 71
2007 2006
Rupees Rupees
19. Loans, advances, deposits, Loans and advances - considered good
prepayments and other
receivables Current portion of long-term loans to employees - note 14 10,990,473 9,999,521
Advances to suppliers 19,301,031 32,552,811
Advances to employees 1,728,728 1,683,662
32,020,232 44,235,994
Other receivables
Due from subsidiary company - Attock Hospital (Private) Limited 1,966,040 1,668,749
Due from associated companies
National Refinery Limited 4,677,170 2,363,777
Attock Gen Limited 2,415,270 –
Attock Information Technology Services (Private) Limited – 139,817
National Cleaner Production Centre Foundation 2,464,971 522,052
Attock Industrial Products Limited (net of provision of
Rs 3,015,145; 2006: Rs 3,015,145) – –
Attock Cement Pakistan Limited 155,340 –
Due from Staff Pension Fund 4,096,686 1,697,890
Income accrued on bank deposits 78,867,031 39,199,241
Crude oil freight recoverable through inland freight equalisation margin 39,220,600 150,716,052
Other receivables 7,560,627 8,350,204
141,423,735 204,657,782
191,255,471 263,473,099
Loans to employees include Rs 2,265,248 (2006: Rs 1,289,790) due from executives of the Company and does not include any amount receivable from
Directors or the Chief Executive.
72 AT T O C K R E F I N E RY L I M I T E D
2007 2006
Rupees Rupees
20. Cash and bank balances Cash in hand 291,366 541,946
With banks:
On current accounts 2,790,058 4,654,915
On interest/ mark-up bearing savings accounts (including
US $ 379,624; 2006: US $ 643,379) 8,877,032,292 8,026,397,219
8,880,113,716 8,031,594,080
20.1 Balances with banks include Rs 5,381.864 million (2006: 1,000.136 million) in respect of deposits placed on 90-day interest-bearing account consequent
to a directive issued by the Ministry on account of amounts withheld as referred to in note 9.1 alongwith related interest earned thereon.
20.2 A lien on the Company's savings account has been marked by a bank to the extent of guarantees issued on behalf of the Company as referred to
in note 10 (i).
20.3 Balances with banks include Rs 48.940 million (2006: Rs 48.861 million) in respect of security deposits received.
20.4 The balances in savings accounts at the year end earn weighted average interest/ mark-up of 9.73% (2006: 8.93%) per annum.
2007 2006
Rupees Rupees
21. Sales Gross sales - note 21.1 66,083,778,877 61,362,743,941
Naphtha export sales 8,232,839,936 8,512,982,645
Less:Cost of Naphtha purchased from third parties and
related handling charges recovered 1,175,285,235 1,761,308,376
7,057,554,701 6,751,674,269
Less:Duties, taxes and levies - note 21.2 13,986,554,360 12,177,586,475
59,154,779,218 55,936,831,735
21.1 Under the products import parity pricing formula, effective July 1, 2000, the Government had imposed a cap on an element of pricing of Premium
Motor Gasoline (PMG) which has not been accepted by the Company. The Company has strongly urged the Government to remove this cap. The
sales revenue to the extent of related aggregate price differential claims of Rs. 2,404 million (including Rs. 1,570 million for prior years) is not being
reflected in sales till this matter is resolved. In this context, the tax authorities have raised demands for income tax against these price differential
claims which have been contested in appeals by the Company.
2007 2006
Rupees Rupees
21.2 Duties, taxes and levies
Development surcharge 5,356,523,313 3,858,634,023
Sales tax 8,166,096,090 7,810,481,336
Custom duties and other levies 463,934,957 508,471,116
13,986,554,360 12,177,586,475
ANNUAL REPORT 2007 73
22. Reimbursement due from the This represents amount due from the Government of Pakistan on account of shortfall in ex-refinery prices of certain petroleum products under the import
government under import parity parity pricing formula.
pricing formula 2007 2006
Rupees Rupees
23. Cost of sales Opening stock of semi-finished products 278,876,166 174,528,868
Crude oil consumed - note 23.1 56,326,788,162 53,529,997,346
Transportation and handling charges 1,016,614,947 1,042,847,253
Salaries, wages and other benefits - note 23.2 250,261,568 236,931,536
Printing and stationery 1,822,173 2,208,099
Chemicals consumed 347,235,336 368,336,337
Fuel and power 279,485,676 243,640,822
Rent, rates and taxes 6,524,583 5,644,009
Telephone and telex charges 1,602,062 2,309,376
Professional charges for technical services 2,455,174 2,849,672
Insurance 46,544,043 36,578,388
Repairs and maintenance (including stores and spares consumed Rs 65,330,509;
2006: Rs 79,543,503) 118,433,291 141,527,067
Staff transport and travelling - note 23.3 9,815,175 12,187,347
Cost of receptacles 8,618,744 24,775,920
Research and development 108,000 8,550,012
Depreciation - note 11.3 341,975,356 328,326,550
59,037,160,456 56,161,238,602
Closing stock of semi-finished products (311,633,383) (278,876,166)
58,725,527,073 55,882,362,436
Opening stock of finished products 1,760,727,860 1,369,045,483
Closing stock of finished products (1,876,300,457) (1,760,727,860)
(115,572,597) (391,682,377)
58,609,954,476 55,490,680,059
23.2 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 11,552,458 (2006: Rs 10,682,306).
2007 2006
Rupees Rupees
24. Administration expenses Salaries, wages and other benefits - note 23.2 97,666,151 90,619,295
Staff transport, travelling and entertainment - note 23.3 12,064,930 13,600,784
Telephone and telex charges 1,484,554 1,893,125
Electricity, gas and water 4,430,040 4,023,580
Printing and stationery 3,028,350 2,408,355
Auditors' remuneration and expenses:
Statutory audit 350,000 300,000
Special certifications, half yearly review, audit of consolidated accounts and staff funds 553,000 483,500
Out of pocket expenses 82,995 91,540
985,995 875,040
Legal and professional charges 5,874,513 7,951,800
Repairs and maintenance 21,490,375 24,795,439
Subscription 5,271,778 5,444,940
Publicity 4,043,563 4,029,913
Scholarship scheme 2,054,950 1,398,801
Rent, rates and taxes 1,273,568 1,677,635
Insurance 866,898 794,336
Donations* 414,619 10,275,147
Training expenses 744,814 2,389,783
Other expenses 51,638 245,421
Depreciation - note 11.3 13,360,853 10,875,215
175,107,589 183,298,609
2007 2006
Rupees Rupees
25. Distribution cost Salaries, wages and other benefits - note 23.2 11,722,058 8,512,176
Staff transport, travelling and entertainment - note 23.3 568,338 661,935
Telephone and telex charges 209,812 174,908
Electricity, gas, fuel and water 1,476,680 1,341,193
Printing and stationery 81,097 70,976
Repairs and maintenance including packing and other stores consumed 1,295,190 1,911,219
Rent, rates and taxes 316,677 263,096
Legal and professional charges 144,000 216,285
Cost of samples 2,587 52,730
Depreciation - note 11.3 899,894 575,332
16,716,333 13,779,850
28. Employees' defined benefit plans The latest actuarial valuation of the employees' defined benefit plans was conducted at June 30, 2007 using the projected unit credit method. Details of the
defined benefit plans are:
Defined Benefit Pension Plan Defined Benefit Gratuity Plan
2007 2006 2007 2006
Rupees Rupees
a) The amounts recognised in the profit and loss account:
Current service cost 12,263,424 9,579,615 3,099,301 2,996,315
Interest on obligation 27,771,892 24,541,741 10,075,566 10,064,728
Expected return on plan assets (30,234,890) (26,233,559) – –
Contribution from an associated company (127,200) (160,898) – –
Net actuarial losses / (gains) recognised during the year (1,100,894) (718,769) 2,145,680 2,317,866
8,572,332 7,008,130 15,320,547 15,378,909
b) The amounts recognised in the balance sheet:
Fair value of plan assets 359,485,371 280,495,084 – –
Present value of defined benefit obligations (291,335,050) (263,054,407) (121,894,107) (96,057,559)
68,150,321 17,440,677 (121,894,107) (96,057,559)
Unrecognised actuarial gains / (losses) (64,053,635) (15,742,787) 36,094,107 20,257,559
Net liability 4,096,686 1,697,890 (85,800,000) (75,800,000)
c) Movement in the present value of defined benefit obligation:
Present value of defined benefit obligation as at July 1 263,054,407 215,382,051 96,057,559 88,577,526
Current service cost 12,263,424 9,579,615 3,099,301 2,996,315
Interest cost 27,771,892 24,541,741 10,075,566 10,064,728
Benefits paid (11,145,551) (9,714,214) (5,320,547) (4,493,785)
Actuarial (gains) / losses (609,122) 23,265,214 17,982,228 (1,087,225)
Present value of defined benefit obligation as at June 30 291,335,050 263,054,407 121,894,107 96,057,559
d) Changes in the fair value of plan assets:
Fair value of plan assets as at July 1 280,495,084 225,120,520 – –
Expected return 30,234,890 26,233,559 – –
Benefits paid (11,145,551) (9,714,214) – –
Contributions by employer 10,971,128 9,677,208 – –
Contributions by associated company 127,200 160,898 – –
Actuarial gains / (losses) 48,802,620 29,017,113 – –
Fair value of plan assets as at June 30 359,485,371 280,495,084 – –
Actual return on plan assets 79,037,510 55,250,672 – –
Expected contributions to the defined benefit pension plans for the year ending June 30, 2008 are Rs 12.6 million.
ANNUAL REPORT 2007 77
Actuarial (gains) / losses on plan liabilities (609,122) 23,265,214 9,382,000 1,303,000 (11,671,000)
Actuarial (gains) / losses on plan assets (48,802,620) 29,017,113 13,388,000 9,384,000 10,642,000
2007 2006
Rupees Rupees
Less:Operating costs
Salaries, wages and other benefits - note 23.2 1,882,227 2,287,290
Chemical consumed 7,058,352 8,577,336
Fuel and power 16,828,288 20,449,799
Repairs and maintenance 8,262,119 7,109,330
Depreciation - note 11.3 632,500 632,500
34,663,486 39,056,255
9,264,467 10,541,984
ANNUAL REPORT 2007 79
2007 2006
Rupees Rupees
30. Provision for taxation Current - for the year 476,500,000 400,000,000
Deferred - for the year (19,949,991) (45,155,916)
456,550,009 354,844,084
Numerical reconciliation between the average effective tax rate and the applicable tax rate
% %
2007 2006
Rupees Rupees
31. Income from non-refinery Less applicable charges and taxation
operations Dividend income from associated companies
National Refinery Limited 208,246,250 183,256,700
Attock Petroleum Limited 69,451,200 70,078,500
277,697,450 253,335,200
Less:Related charges
Workers' Profit Participation Fund - note 9.4 13,884,873 12,666,760
Workers' Welfare Fund 5,276,252 4,813,369
Taxation 13,884,873 12,666,760
33,045,998 30,146,889
244,651,452 223,188,311
32. Related party transaction Attock Oil Company Limited holds 55% (2006: 52.50%) 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 influence 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 33 to the financial statements.
80 AT T O C K R E F I N E RY L I M I T E D
2007 2006
Rupees Rupees
Associated companies
Sale of goods 12,941,980,204 15,315,597,351
Sale of services 76,773,297 46,784,718
13,018,753,501 15,362,382,069
Purchase of goods 7,591,741,626 9,016,821,119
Purchase of services 311,331,415 296,693,858
7,903,073,041 9,313,514,977
Holding company
Sale of services 284,675 –
ANNUAL AUDITED
CONSOLIDATED FINANCIAL STATEMENTS 2007
ATTOCK REFINERY LIMITED
84 AT T O C K R E F I N E RY L I M I T E D
ANNUAL REPORT 2007 85
We have audited the annexed consolidated financial In our opinion, the consolidated financial statements present
statements comprising consolidated balance sheet of fairly the financial position of ARL and its subsidiary company
Attock Refinery Limited (ARL) and its subsidiary company, as at June 30, 2007 and the results of their operations for
Attock Hospital (Private) Limited as at June 30, 2007 and the year then ended.
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 seperate 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. Chartered Accountants
Islamabad: September 10, 2007
Share capital
Authorised 4 1,000,000,000 1,000,000,000
Issued, subscribed and paid-up 4 568,620,000 454,896,000
Reserves and surplus 5 5,371,775,791 3,596,538,319
5,940,395,791 4,051,434,319
34,350,557,115 30,120,018,654
ANNUAL REPORT 2007 87
Current assets
34,350,557,115 30,120,018,654
Balance at June 30, 2005 349,920,000 44,948,506 2,187,628,247 55,000 276,011,707 1,923,338,591 4,781,902,051
Balance at June 30, 2006 454,896,000 44,948,506 2,517,432,193 55,000 1,034,102,620 1,923,338,591 5,974,772,910
Balance at June 30, 2007 568,620,000 44,948,506 3,000,074,045 55,000 2,326,698,240 1,923,338,591 7,863,734,382
1. Legal status and operations Attock Refinery Limited (ARL) 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. ARL 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.
value may not be recoverable. If any such indication exists and where the carrying value exceeds the estimated recoverable amount, the assets
are written down to recoverable amount.
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.
2.7 Investments
a) 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.
b) Available for sale investments
Investment securities held by the Company which may be sold in response to needs for liquidity or changes in interest rates, exchange rates
or equity prices are classified as available for sale. These investments are initially recognised at cost and subsequently re-measured at fair
value.
Unrealised gains and losses arising from changes in the fair value in respect of exchange differences of available for sale investments are
treated as referred to in note 2.10.
2.9 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.
94 AT T O C K R E F I N E RY L I M I T E D
In case of sale of deregulated petroleum products, the transactions are made at Company notified prices for all its customers. In certain cases,
reduced price is allowed on commercial considerations. All other transactions are carried out on commercially negotiated terms.
3. Critical accounting estimates and The preparation of financial statements in conformity with the approved accounting standards requires the use of certain critical accounting estimates. It also
judgments 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:
2007 2006
Rupees Rupees
The Attock Oil Company Limited held 31,274,100 (2006: 23,882,040) ordinary shares at the year end.
ANNUAL REPORT 2007 97
2007 2006
Rupees Rupees
5.1 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. Transfer to / from special reserve is recognised at each quarter end and is reviewed
for adjustment based on profit / loss on an annual basis.
6. Surplus on revaluation This represents surplus over book value resulting from revaluation of freehold land as referred to in note 11.1 and is not available for distribution to shareholders.
of freehold land
2007 2006
Rupees Rupees
7. Long term loans - secured Syndicate Financing Facility – 3,597,000,000
Morabaha Financing Facility – 950,000,000
– 4,547,000,000
Less: Current portion
Syndicate Financing Facility – 899,250,000
Morabaha Financing Facility – 237,500,000
– 1,136,750,000
– 3,410,250,000
98 AT T O C K R E F I N E RY L I M I T E D
7.1 The Company obtained a long term syndicate financing facility of Rs 3,597 million from a consortium of banks under the lead of Faysal Bank Limited
and a separate Morabaha financing facility from Faysal Bank Limited of Rs 950 million. These facilities were repayable in eight half yearly equal
installments commencing July 2006 and carried profit at base rate (six month KIBOR) plus 2.05% per annum upto January 1, 2006 and thereafter
at base rate plus 1.90% per annum for the remaining period of facilities. These facilities were secured by first pari passu charge by way of hypothecation
over all present and future current and movable fixed assets of the Company and mortgage over immovable property.
During December 2006, the Company repaid the entire outstanding balance of these loans.
8. Short term finance The Company's short term finance facility under mark-up arrangements aggregating Rs 70 million (2006: Rs 70 million) available from MCB Bank Limited
expired during the year. The Company is in the process of arranging fresh running finance facilities from various commercial banks to the extent of Rs 3.5
billion at varying mark-up rates linked to three months and one month KIBOR.
2007 2006
Rupees Rupees
9. Trade and other payables Creditors - note 9.1 18,021,733,795 11,482,332,142
Due to The Attock Oil Company Limited - Holding Company 275,089,035 432,869,001
Due to associated companies
Pakistan Oilfields Limited 1,383,270,935 1,470,961,701
Attock Petroleum Limited 1,045,633 20,868,383
Attock Cement Pakistan Limited – 39,363
Attock Information Technology Services (Private) Limited 5,542,677 –
Accrued liabilities and provisions - note 9.1 738,703,445 225,681,895
Due to the Government under pricing formula - note 9.2 4,707,073,386 4,689,396,074
Advance payments from customers - note 9.3 5,532,717 10,518,689
Sales tax payable 7,197,593 127,011,850
Accrued mark-up / interest on long term loans – 124,133,100
Workers' Welfare Fund 131,988,739 103,033,871
Workers' Profit Participation Fund - note 9.4 65,840,211 36,869,261
Staff Provident Fund – 54,127
Deposits from customers adjustable against freight
and Government levies payable on their behalf 1,270,705 1,018,470
Security deposits 49,165,150 49,091,150
Unclaimed dividends 939,496 969,669
25,394,393,517 18,774,848,746
9.1 Creditors include an amount of Rs 5,434.461 million (2006 : Rs 1,615.257 million) in respect of crude oil price in excess of US$ 50 per barrel withheld
by the Company, pending finalisation of discount thereon, from payments made to suppliers for purchase of local crude oil as per the directive of
Ministry of Petroleum & Natural Resources (the Ministry).
ANNUAL REPORT 2007 99
Further, as per directive of the Ministry dated May 31, 2006, the Company is required to make payments alongwith the mark-up generated after the
final discount rates in respect of crude oil price in excess of US$ 50 per barrel are decided between the parties and such withheld amounts are being
retained in a designated 90-day interest bearing account. Accumulated profits amounting to Rs 377.568 million (2006: Rs 32.000 million) earned
thereon are included in accrued liabilities and provisions.
9.2 The amount due to the Government under pricing formula is net of Rs 2,404 million (2006: Rs 1,570 million) price differential claim as referred to in
note 21.1 with a corresponding effect in creditors.
9.3 Advance payments from customers include Rs 2,855,486 (2006: nil) from Pakistan Oilfields Limited, an associated company, against sales of LPG.
2007 2006
Rupees Rupees
Commitments outstanding:
i) Capital expenditure 55,423,626 41,868,873
ii) Letters of credit other than for capital expenditure 125,775,143 33,659,700
100 AT T O C K R E F I N E RY L I M I T E D
As at June 30, 2007 1,927,250,000 84,730,992 3,918,671,871 56,151,525 63,394,619 70,319,334 6,120,518,341
Depreciation
As at June 30, 2007 1,927,250,000 52,184,189 703,958,642 6,780,978 24,781,077 19,172,403 2,734,127,289
11.1 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, 2007 is Rs 3.911 million.
11.2 Effective from the current year, the Company has revised its estimate regarding useful life of computers. Accordingly, the annual depreciation rate
has been increased from 14.3% in previous years to 20% to reflect the pattern in which the assets' economic benefits will be consumed. Had the
change in accounting estimate not been made, the depreciation charge for the year would have been lower by Rs 4.470 million and the profit for
the year would have been higher to that extent. Correspondingly, the operating assets and equity as at June 30, 2007 would have been higher by
the same amount.
2007 2006
Rupees Rupees
11.3 The depreciation charge for the year has been allocated as follows:
Cost of sales 341,975,356 328,326,550
Administration expenses 13,360,853 10,875,215
Distribution cost 899,894 575,332
Desalter operating cost 632,500 632,500
Depreciation of subsidiary company 1,073,699 1,108,426
357,942,302 341,518,023
12.1 Cost incurred by the Company on the Power Plant Project has been fully recovered from Attock Gen Limited, an associated company, set up for
the purpose of independently operating the Power Plant.
2007 2006
Rupees Rupees
13. Long term investments Investments in associated companies
Beginning of the year 9,637,407,375 2,534,407,873
Investment in associates during the year 638,425,126 6,213,929,559
Share of profit after tax of associated companies for the year 1,418,176,624 1,142,405,143
Less: Dividend from associated companies received during the year 277,697,450 253,335,200
11,416,311,675 9,637,407,375
102 AT T O C K R E F I N E RY L I M I T E D
2007 2006
% age Rupees % age Rupees
Holding Holding
Quoted
Unquoted
13.2 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 6.4% (2006: 6.30%), terminal growth rate of 5% (2006:
5%) and capital asset pricing model based discount rate of 14.30% (2006: 13.40%).
2007 2006
Rupees Rupees
14. Long term loans and deposits Loans to employees - considered good - note 14.1 21,079,761 20,748,226
Less: Amounts due within twelve months shown under current assets - note 19 10,990,473 9,999,521
10,089,288 10,748,705
Security deposits 865,021 865,021
10,954,309 11,613,726
14.1 Loans to employees are for purchase of car, refrigerator and for other purposes which are recoverable in 36, 24 and 60 equal monthly installments
respectively 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.
Loans to employees for refrigerator and other purposes are interest free while loans for purchase of car carry interest rates ranging from 3% to 15%
(2006: 3% to 15%) per annum. These do not include any amount outstanding for more than three years. These include an amount of Rs 3,551,595
(2006: Rs 2,232,870) 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 3,805,412 (2006: Rs 2,493,776).
2007 2006
Rupees Rupees
14.2 Reconciliation of carrying amount of loans to executives:
Opening balance as at July 1 2,232,870 283,000
Add: Disbursements during the year 3,922,053 3,044,644
6,154,923 3,327,644
Less: Repayments during the year 2,603,328 1,094,774
Closing balance as at June 30 3,551,595 2,232,870
104 AT T O C K R E F I N E RY L I M I T E D
2007 2006
Rupees Rupees
16. Stores, spares and loose tools Stores (including items in transit
Rs 119.67 million; 2006: Rs 82.54 million) 446,578,908 410,806,882
Spares 219,661,310 208,976,739
Loose tools 595,775 708,542
666,835,993 620,492,163
Less: Provision for slow moving items 36,000,000 34,500,000
630,835,993 585,992,163
Finished products include stocks carried at net realisable value of Rs 236 million (2006: Rs 334 million). Adjustments amounting to Rs 43.8 million
(2006: Rs 72.9 million) have been made to closing inventory to write down stocks of finished products to their net realizable value.
18. Trade debts All debtors are unsecured and considered good.
Aggregate amount receivable from an associated company as at June 30, 2007 was Rs 1,010,953,152 (2006: Rs 1,062,120,659).
ANNUAL REPORT 2007 105
2007 2006
Rupees Rupees
Loans to employees include Rs 2,265,248 (2006: Rs 1,289,790) due from executives of the Company and does not include any amount receivable from
Directors or the Chief Executive.
106 AT T O C K R E F I N E RY L I M I T E D
2007 2006
Rupees Rupees
20. Cash and bank balances Cash in hand 338,827 587,318
With banks:
On current accounts 2,804,509 4,659,995
On interest / mark-up bearing savings accounts (including
US $ 379,624; 2006: US $ 643,379) 8,877,909,761 8,028,480,228
8,881,053,097 8,033,727,541
20.1 Balances with banks include Rs 5,381.864 million (2006: 1,000.136 million) in respect of deposits placed on 90-day interest-bearing account consequent
to a directive issued by the Ministry on account of amounts withheld as referred to in note 9.1 alongwith related interest earned thereon.
20.2 A lien on the Company's savings account has been marked by a bank to the extent of guarantees issued on behalf of the Company as referred to
in note 10 (i).
20.3 Balances with banks include Rs 49.165 million (2006: Rs 49.091 million) in respect of security deposits received.
20.4 The balances in savings accounts at the year end earn weighted average interest/ mark-up of 9.73% (2006: 8.93%) per annum.
2007 2006
Rupees Rupees
21. Sales Gross sales - note 21.1 66,083,778,877 61,362,743,941
Naphtha export sales 8,232,839,936 8,512,982,645
Less:Cost of Naphtha purchased from third parties and
related handling charges recovered 1,175,285,235 1,761,308,376
7,057,554,701 6,751,674,269
Less:Duties, taxes and levies - note 21.2 13,986,554,360 12,177,586,475
59,154,779,218 55,936,831,735
21.1 Under the products import parity pricing formula, effective July 1, 2000, the Government had imposed a cap on an element of pricing of Premium
Motor Gasoline (PMG) which has not been accepted by the Company. The Company has strongly urged the Government to remove this cap. The
sales revenue to the extent of related aggregate price differential claims of Rs. 2,404 million (including Rs. 1,570 million for prior years) is not being
reflected in sales till this matter is resolved. In this context, the tax authorities have raised demands for income tax against these price differential
claims which have been contested in appeals by the Company.
2007 2006
Rupees Rupees
21.2 Duties, taxes and levies
Development surcharge 5,356,523,313 3,858,634,023
Sales tax 8,166,096,090 7,810,481,336
Custom duties and other levies 463,934,957 508,471,116
13,986,554,360 12,177,586,475
ANNUAL REPORT 2007 107
22. Reimbursement due from the This represents amount due from the Government of Pakistan on account of shortfall in ex-refinery prices of certain petroleum products under the import
government under import parity parity pricing formula.
pricing formula 2007 2006
Rupees Rupees
23. Cost of sales Opening stock of semi-finished products 278,876,166 174,528,868
Crude oil consumed - note 23.1 56,326,788,162 53,529,997,346
Transportation and handling charges 1,016,614,947 1,042,847,253
Salaries, wages and other benefits - note 23.2 250,261,568 236,931,536
Printing and stationery 1,822,173 2,208,099
Chemicals consumed 347,235,336 368,336,337
Fuel and power 279,485,676 243,640,822
Rent, rates and taxes 6,524,583 5,644,009
Telephone and telex charges 1,602,062 2,309,376
Professional charges for technical services 2,455,174 2,849,672
Insurance 46,544,043 36,578,388
Repairs and maintenance (including stores and spares consumed Rs 65,330,509 ;
2006: Rs 79,543,503) 118,433,291 141,527,067
Staff transport and travelling - note 23.3 9,815,175 12,187,347
Cost of receptacles 8,618,744 24,775,920
Research and development 108,000 8,550,012
Depreciation - note 11.3 341,975,356 328,326,550
59,037,160,456 56,161,238,602
Closing stock of semi-finished products (311,633,383) (278,876,166)
58,725,527,073 55,882,362,436
Opening stock of finished products 1,760,727,860 1,369,045,483
Closing stock of finished products (1,876,300,457) (1,760,727,860)
(115,572,597) (391,682,377)
58,609,954,476 55,490,680,059
23.2 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 11,552,458 (2006: Rs 10,682,306).
2007 2006
Rupees Rupees
24. Administration expenses Salaries, wages and other benefits - note 23.2 97,666,151 90,619,295
Staff transport, travelling and entertainment - note 23.3 12,064,930 13,600,784
Telephone and telex charges 1,484,554 1,893,125
Electricity, gas and water 4,430,040 4,023,580
Printing and stationery 3,028,350 2,408,355
Auditors' remuneration and expenses:
Statutory audit 350,000 300,000
Special certifications, half yearly review, audit of consolidated accounts and staff funds 553,000 483,500
Out of pocket expenses 82,995 91,540
985,995 875,040
Legal and professional charges 5,874,513 7,951,800
Repairs and maintenance 21,490,375 24,795,439
Subscription 5,271,778 5,444,940
Publicity 4,043,563 4,029,913
Scholarship scheme 2,054,950 1,398,801
Rent, rates and taxes 1,273,568 1,677,635
Insurance 866,898 794,336
Donations* 414,619 10,275,147
Training expenses 744,814 2,389,783
Other expenses 51,638 245,421
Depreciation - note 11.3 13,360,853 10,875,215
175,107,589 183,298,609
2007 2006
Rupees Rupees
25. Distribution cost Salaries, wages and other benefits - note 23.2 11,722,058 8,512,176
Staff transport, travelling and entertainment - note 23.3 568,338 661,935
Telephone and telex charges 209,812 174,908
Electricity, gas, fuel and water 1,476,680 1,341,193
Printing and stationery 81,097 70,976
Repairs and maintenance including packing and other stores consumed 1,295,190 1,911,219
Rent, rates and taxes 316,677 263,096
Legal and professional charges 144,000 216,285
Cost of samples 2,587 52,730
Depreciation - note 11.3 899,894 575,332
16,716,333 13,779,850
28. Employees' defined benefit plans The latest actuarial valuation of the employees' defined benefit plans was conducted at June 30, 2007 using the projected unit credit method. Details of the
defined benefit plans are:
Defined benefit Defined benefit
Pension plan Gratuity plan
2007 2006 2007 2006
Rupees Rupees
a) The amounts recognised in the profit and loss account:
Current service cost 12,263,424 9,579,615 3,099,301 2,996,315
Interest on obligation 27,771,892 24,541,741 10,075,566 10,064,728
Expected return on plan assets (30,234,890) (26,233,559) – –
Contribution from an associated company (127,200) (160,898) – –
Net actuarial losses / (gains) recognised during the year (1,100,894) (718,769) 2,145,680 2,317,866
8,572,332 7,008,130 15,320,547 15,378,909
b) The amounts recognised in the balance sheet:
Fair value of plan assets 359,485,371 280,495,084 – –
Present value of defined benefit obligations (291,335,050) (263,054,407) (121,894,107) (96,057,559)
68,150,321 17,440,677 (121,894,107) (96,057,559)
Unrecognised actuarial gains / (losses) (64,053,635) (15,742,787) 36,094,107 20,257,559
Net liability 4,096,686 1,697,890 (85,800,000) (75,800,000)
c) Movement in the present value of defined benefit obligation:
Present value of defined benefit obligation as at July 1 263,054,407 215,382,051 96,057,559 88,577,526
Current service cost 12,263,424 9,579,615 3,099,301 2,996,315
Interest cost 27,771,892 24,541,741 10,075,566 10,064,728
Benefits paid (11,145,551) (9,714,214) (5,320,547) (4,493,785)
Actuarial (gains) / losses (609,122) 23,265,214 17,982,228 (1,087,225)
Present value of defined benefit obligation as at June 30 291,335,050 263,054,407 121,894,107 96,057,559
d) Changes in the fair value of plan assets:
Fair value of plan assets as at July 1 280,495,084 225,120,520 – –
Expected return 30,234,890 26,233,559 – –
Benefits paid (11,145,551) (9,714,214) – –
Contributions by employer 10,971,128 9,677,208 – –
Contributions by associated company 127,200 160,898 – –
Actuarial gains / (losses) 48,802,620 29,017,113 – –
Fair value of plan assets as at June 30 359,485,371 280,495,084 – –
Actual return on plan assets 79,037,510 55,250,672 – –
Expected contributions to the defined benefit pension plans for the year ending June 30, 2008 are Rs 12.6 million.
ANNUAL REPORT 2007 111
Actuarial (gains) / losses on plan liabilities (609,122) 23,265,214 9,382,000 1,303,000 (11,671,000)
Actuarial (gains) / losses on plan assets (48,802,620) 29,017,113 13,388,000 9,384,000 10,642,000
2007 2006
Rupees Rupees
Less:Operating costs
Salaries, wages and other benefits - note 23.2 1,882,227 2,287,290
Chemical consumed 7,058,352 8,577,336
Fuel and power 16,828,288 20,449,799
Repairs and maintenance 8,262,119 7,109,330
Depreciation - note 11.3 632,500 632,500
34,663,486 39,056,255
9,264,467 10,541,984
ANNUAL REPORT 2007 113
2007 2006
Rupees Rupees
30. Provision for taxation Current - for the year 476,500,000 400,000,000
Deferred - for the year (19,949,991) (45,155,916)
456,550,009 354,844,084
Numerical reconciliation between the average effective tax rate and the applicable tax rate
% %
2007 2006
Rupees Rupees
31. Share of profit of associates Share in profit of associated companies is based on their audited financial statement
for the year ended June 30, 2007
2007 2006
Rupees Rupees
* The revenue includes inter - company billings amounting to Rs 22,702,770 (2006 : Rs 21,328,674) 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 21,044 (2006: Rs 22,394).
ANNUAL REPORT 2007 115
The assets, liabilities and equity of National Refinery Limited , Attock Petroleum Limited, Attock Information Technology Services (Private) Limited
and Attock Gen Limited as at June 30, 2007 based on their audited financial statements are as follows:
2007 2006
Rupees Rupees
Assets
National Refinery Limited 32,641,559,000 24,992,541,000
Attock Petroleum Limited 8,983,767,000 6,584,116,000
Attock Information Technology Services (Private) Limited 52,541,040 49,060,301
Attock Gen Limited 1,820,220,548 300,500
43,498,087,588 31,626,017,801
Liabilities
National Refinery Limited 19,895,170,000 15,545,821,000
Attock Petroleum Limited 5,529,470,000 4,538,425,000
Attock Information Technology Services (Private) Limited 3,378,234 2,820,320
Attock Gen Limited 13,375,281 500
25,441,393,515 20,087,066,820
Revenue
National Refinery Limited 91,326,538,000 80,894,039,000
Attock Petroleum Limited 44,130,536,000 40,839,299,000
Attock Information Technology Services (Private) Limited 13,641,500 10,366,500
Attock Gen Limited 10,531,179 –
135,481,246,679 121,743,704,500
Profit / (loss)
National Refinery Limited 4,202,654,000 3,409,821,000
Attock Petroleum Limited 1,728,606,000 1,392,606,000
Attock Information Technology Services (Private) Limited 2,922,825 1,695,684
Attock Gen Limited 6,845,267 –
5,941,028,092 4,804,122,684
32. Related party transaction The Group is controlled by Attock Oil Company Limited which holds 55% (2006: 52.50%) of ARL's shares. 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 influence 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 33 to the consolidated financial statements.
2007 2006
Rupees Rupees
Associated companies
Sale of goods 12,941,980,204 15,315,597,351
Sale of services 76,773,297 46,784,718
13,018,753,501 15,362,382,069
Purchase of goods 7,591,741,626 9,016,821,119
Purchase of services 311,331,415 296,693,858
7,903,073,041 9,313,514,977
Holding company
Sale of services 284,675 –
33. Remuneration of Chief Executive, The aggregate amounts charged in the financial statements for remuneration, including benefits and perquisites, were as follows:
Directors and Executives Chief Executive Directors Executives
2007 2006 2007 2006 2007 2006
Rupees Rupees Rupees Rupees Rupees Rupees
Managerial remuneration / honorarium 3,909,722 2,482,256 1,219,140 1,215,792 24,673,508 20,752,589
Company's contribution to provident
and pension funds 789,421 574,200 – – 5,209,292 4,422,443
Housing and utilities 1,037,149 834,960 – – 11,585,996 9,064,108
Leave passage 330,000 298,356 – – 2,323,690 2,256,860
6,066,292 4,189,772 1,219,140 1,215,792 43,792,486 36,496,000
No of person(s) 1 1 3 3 22 20
33.1 In addition, the Chief Executive and 19 (2006: 19) executives were provided with limited use of the Company's cars. The Chief Executive and all
executives were provided with medical facilities and 9 (2006: 9) executives were provided with unfurnished accommodation in Company owned
bungalows. Limited residential telephone facility was also provided to the Chief Executive and 13 (2006: 9) executives. Payments to Chief Executive
include Rs 789,156 representing arrears of salary for the period February 2005 to June 2006.
Fee paid to directors during the year was Rs nil (2006: Rs nil).
ANNUAL REPORT 2007 117
2007 2006
35. General 35.1 Earnings per share
Profit for the year after taxation Rs. 1,888,961,472 Rs. 1,192,870,859
Number of ordinary shares outstanding during the year 56,862,000 56,862,000
Earnings per share Rs. 33.22 Rs. 20.98
Basic earnings per share for the year 2006 reported in the previous year was Rs 26.22. This has been restated on account of 11,372,400 bonus
shares issued without consideration during the year ended June 30, 2007.
There is no dilutive effect on the basic earnings per share of the Company for the year ended June 30, 2007.
35.2 Capacity and production
Against the designed annual refining capacity of 14,240,000 (2006: 14,280,000) US barrels the actual throughput during the year was 14,074,644
(2006: 14,567,216) US barrels. The actual throughput was lower than the annual refining capacity on account of the plant shut down for maintenance
and reductions in throughput to minimize losses during adverse periods of refining margins.
35.3 Number of employees
Total number of employees at the end of the year was 763 (2006: 706).
35.4 Corresponding figures
Sales for the corresponding year were net of discount of Rs. 108,693,725 which has now been disclosed separately in the profit & loss account.
35.5 Non adjusting events after the balance sheet date
The Board of Directors, in its meeting held on September 10, 2007, has proposed for the approval of members at the next Annual General Meeting
(i) a 40% cash dividend of Rs. 4 per share and (ii) an issue of bonus share in the proportion of one share for every four shares held i.e. 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, 2008 as follows:
Transfer from unappropriated profit to: Rupees
Proposed dividend 227,448,000
Reserve for issue of bonus shares 142,155,000
35.6 Date of authorisation
These financial statements have been authorised for issue by the Board of Directors of the Company on September 10, 2007.
Form of Proxy I / We
Important:
1. This Proxy Form, duly completed and signed, must be received at the Shares i. Attested copies of NIC or the passport of the beneficial owners and the proxy
Department of M/s. Noble Computer Services (Pvt) Limited, 2nd Floor, Sohni shall be provided with the proxy form.
Centre, BS 5&6, Main Karimabad, Block-4, Federal B Area, Karachi-75950,
ii. The proxy shall produce his original NIC or original passport at the time of
Pakistan, not less than 48 hours before the time of holding the meeting.
the meeting.
2. If a member appoints more than one proxy and more than one instruments of
iii. In case of a corporate entity, the Board of Directors resolution / power of
proxies are deposited by a member with the Company, all such instruments of
attorney with specimen signature shall be submitted (unless it has been
proxy shall be rendered invalid.
provided earlier) alongwith proxy form to the Company.
3. For CDC Account Holders / Corporate Entities