| Attock Petroleum Limited - 2006 |
=============================================================================================== BALANCE SHEET AS AT JUNE 30, 2006 =============================================================================================== 2006 2005 Notes (Rupees in '000) =============================================================================================== SHARE CAPITAL AND RESERVES: Authorised capital 5 750,000 750,000 Issued, subscribed and paid up capital 5 400,000 400,000 RESERVES: Special reserve 5.1 13,082 - REVENUE RESERVE: Unappropriated profit 1,632,609 613,085 2,045,691 1,013,085 NON CURRENT LIABILITIES: Long term deposits 6 100,638 84,099 Deferred tax liability 7 29,000 14,000 129,638 98,099 CURRENT LIABILITIES: Trade and other payables 8 4,039,396 1,336,685 Provision for taxation 369,391 - 4,408,787 1,336,685 Contingencies and commitments 9 6,584,116 2,447,869 Property, plant and equipment 10 490,225 302,973 Capital work in progress 11 30,723 32,230 520,948 335,203 Long term investment in associated companies 12 353,257 90,803 CURRENT ASSETS: Stores and spares 1,839 601 Stock in trade 13 74,220 110,076 Trade debts 14 2,502,476 277,119 Advances, deposits, prepayments and other receivables 15 850,472 291,402 Income tax refundable - 75,591 Cash and bank balances 16 2,280,904 1,267,074 5,709,911 2,021,863 6,584,116 2,447,869 =============================================================================================== =============================================================================================== PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2006 =============================================================================================== 2006 2005 Notes (Rupees in '000) =============================================================================================== Sales 17 46,202,072 11,196,458 Sales tax (5,362,773) (1,286,776) Net sales 40,839,299 9,909,682 Cost of products sold 18 (39,027,444) (9,478,639) Gross profit 1,811,855 431,043 Other operating income 19 323,461 264,213 Operating expenses 20 (241,185) (135,378) Operating profit 1,894,131 559,878 Income on bank deposits and investments 21 118,190 29,461 Share of profit/(loss) of associated companies 22 34,268 (41) Workers' profit participation fund (100,983) (29,467) Profit before taxation 1,945,606 559,831 Income tax expense 23 (553,000) (99,423) Profit for the year 1,392,606 460,408 Basic earnings per share (Rupees) 24 34.82 11.51 =============================================================================================== ===============================================================================================
CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2006
===============================================================================================
2006 2005
Rupees ('000)
===============================================================================================
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit before taxation 1,945,606 559,831
ADJUSTMENT FOR:
Depreciation 55,785 32,118
Gain on sale of property, plant and equipment (364) (824)
Fixed assets written off 2,204 --
Income on bank deposits and investments (118,190) (29,460)
Share in profit/loss of associated companies (34,268) 41
1,850,773 561,706
CHANGES IN WORKING CAPITAL:
(Increase) in stores and spares (1,238) (367)
Decrease/(Increase) in stock in trade 35,856 (88,619)
(Increase) in trade debts (2,225,357) (44,013)
(Increase) in advances, deposits, prepayments
and other receivables (542,986) (208,154)
Increase in trade and other payables 2,700,768 749,332
(32,957) 408,179
Taxes paid (93,018) (99,302)
Net cash from operating activities 1,724,798 870,583
CASH FLOWS FROM INVESTING ACTIVITIES:
Fixed capital expenditure (244,037) (79,092)
Proceeds from sale of property, plant and equipment 667 1,172
Held to maturity investments - 34,980
Long term Investment in associated companies (235,516) (88,599)
Income received on bank deposits and investments 102,106 28,257
Dividend received from associated companies 7,330 --
Net cash used in investing activities (369,450) (103,282)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (358,057) (120,000)
Long term deposits received 16,539 24,449
Net cash used in financing activities (341,518) (95,551)
Increase in cash and cash equivalents 1,013,830 671,750
Cash and cash equivalents at beginning of the year 1,267,074 595,324
Cash and cash equivalents at end of the year 2,280,904 1,267,074
===============================================================================================
================================================================================================================= STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30, 2006 ================================================================================================================================ Share capital Special Unappropriated reserve profit Total Notes (Rupees in '000) ================================================================================================================================ Balance as at June 30, 2004 - as previously reported 300,000 - 372,682 672,682 Change in accounting policy for investment in associates 4.6 - - (5) (5) Balance as at June 30, 2004 - restated 300,000 - 372,677 672,677 Profit for the year - - 460,408 460,408 Final dividend @ 40% relating to 2003-2004 - - (120,000) (120,000) Issue of bonus shares 100,000 - (100,000) - Balance as at June 30, 2005 400,000 - 613,085 1,013,085 Balance as at June 30, 2005 - as previously reported 400,000 - 613,131 1,013,131 Change in accounting policy for investment in associates 4.6 - - (46) (46) Balance as at June 30, 2005 - restated 400,000 - 613,085 1,013,085 Profit for the year - - 1,392,606 1,392,606 Transfer to special reserve by an associated company - 13,082 (13,082) - Final dividend @ 50% relating to 2004-2005 - - (200,000) (200,000) Interim dividend @ 40% relating to 2005-2006 - - (160,000) (160,000) Balance as at June 30, 2006 400,000 13,082 1,632,609 2,045,691 ================================================================================================================================NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2006 1. LEGAL STATUS AND OPERATIONS Attock Petroleum Limited (the Company) was incorporated in Pakistan as a public limited company on December 3, 1995, commenced its operations in 1998 and listed on Karachi Stock Exchange on March 7, 2005. The registered office of the Company is situated at 6, Faisal Avenue, F-7/1, Islamabad, Pakistan. The Company is domiciled in Islamabad. The principal activity of the company is procurement, storage and marketing of petroleum and related products. Pharaon Commercial Investment Group Limited has a controlling interest in the company. 2. STATEMENT OF COMPLIANCE These financial statements have been prepared in accordance with the approved accounting standards as applicable in Pakistan and the requirements of the Companies Ordinance, 1984. Approved accounting standards comprise of such International Accounting Standards (IAS) as notified under the provisions of the Companies Ordinance, 1984 (the Ordinance). Wherever, The requirements of the Ordinance or directives issued by the Securities and Exchange Commission of Pakistan (SECP) differ with the requirements of these standards, the requirements of the Ordinance or the requirements of the said directives take precedence. 3. BASIS OF MEASUREMENT These financial statements have been prepared under the historical cost convention. The preparation of financial statements in conformity with the approved accounting standards requires the use of certain accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 30 to these financial statements. 4. SIGNIFICANT ACCOUNTING POLICIES 4.1. STAFF RETIREMENT BENEFITS The company operates: (i) approved defined benefit funded pension plan for all eligible employees. Actuarial valuation is conducted periodically using the Projected Unit Credit Method and the latest valuation was carried out as at June 30, 2005. The details of the valuation are given in note 26. Net actuarial gains and losses are recognised over the expected remaining service life of the employees. (ii) approved contributory provident fund for all employees for which contributions of Rs 1,374 thousand (2005: Rs 934 thousand) are charged to income for the year. 4.2. TAXATION Provision for current taxation is based on taxable income at the current rate of tax. Deferred income tax is accounted for using liability method in respect of all temporary differences arising between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences can be utilised. Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse based on the tax rates that have been enacted. Deferred tax is charged or credited to income except in the case of items credited or charged to equity in which case it is included in equity. 4.3. PROVISIONS Provisions are recognised when the Company has a legal or constructive obligation as a result of past events, when it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. 4.4. TRADE AND OTHER PAYABLES Liabilities for trade and other amounts payable are carried at cost which is the fair value of the consideration to be paid in future for goods and services received. 4.5. PROPERTY, PLANT, EQUIPMENT AND CAPITAL WORK IN PROGRESS Property, plant and equipment are stated at cost less accumulated depreciation and impairment loss, if any, except for freehold land and capital work in progress which is stated at cost. Depreciation is charged to income on the straight line method to write off the cost of an asset over its estimated useful life at the rates specified in note 10. Full year's depreciation is charged on additions during the year, while no depreciation is charged on assets deleted during the year. Maintenance and normal repairs are charged to income as and when incurred. Major renewals and improvements are capitalised and the assets so replaced, if any, are retired. Gains and losses on disposal of assets are included in income. 4.6. INVESTMENT IN ASSOCIATED COMPANIES Investment in associated companies is accounted for using the equity method. Under this method the 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. Previously, investment in associated companies were accounted for under cost method. Due to changes made in IAS 28 (Investment in associates) applicable from the current year, the company changed its accounting policy for valuation of investment in associated companies from cost method to equity method. The change in accounting policy has been applied retrospectively and previous period's figures have been restated. Had there been no change in the accounting policy, investment in associated companies would have been lower by Rs 26,892 thousand, profit for the year lower by Rs 26,938 thousand and profit for prior periods higher by Rs 46 thousand. 4.7. IMPAIRMENT Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less cost to sell and value in use. 4.8. STORES AND SPARES These are stated at moving average cost less any provision for obsolete and slow moving items. 4.9. STOCK IN TRADE Stock in trade is valued at the lower of cost, calculated on a first-in first-out basis, and net realisable value. Charges such as excise duty and similar levies incurred on unsold stock of products are added to the value of the stock and carried forward. Net realisable value signifies the sale price in the ordinary course of business less costs necessary to make the sale. 4.10. TRADE DEBTS AND OTHER RECEIVABLES Trade debts and other receivables are carried at original invoice amount less provision for any uncollectible amounts. 4.11. REVENUE RECOGNITION Sales are recorded on despatch of goods to customers. Commission and handling income is recognised on shipment of products. Income on bank deposits is recognised on time proportion basis using the effective yield method. Income on investment in associated company is recognised using the equity method. Under this method, the Company's share of post-acquisition profit or loss of the associated company is recognised in the profit and loss account, and its share of post-acquisition movements in reserves is recognised in reserves. Dividend distribution by the associated company is adjusted against the carrying amount of the investment. 4.12. DIVIDEND DISTRIBUTION Dividend distribution to the shareholders is accounted for in the period in which dividend is declared. 4.13. FOREIGN CURRENCY TRANSACTIONS Transactions in foreign currencies are converted into Rupees at the rates of exchange ruling on the date of the transaction. All assets and liabilities in foreign currencies are translated at exchange rate prevailing at the balance sheet date. Exchange gains and losses are taken to income. 4.14. FINANCIAL ASSETS AND LIABILITIES Financial assets and 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 assets and when the obligation specified in the contract is discharged, cancelled or expired. All financial assets and liabilities are initially measured at cost, which is the fair value of the consideration given and received respectively. These are subsequently measured at fair value, amortised cost or cost, as the case may be. 4.15. OFFSETTING Financial assets and liabilities are offset and the net amount is reported in the balance sheet if the company has a legally enforceable right to set off the recognised amounts and the Company intends to settle on a net basis, or realise the asset and settle the liability simultaneously. 4.16. CASH AND CASH EQUIVALENTS For the purpose of cash flow statement, cash and cash equivalents comprise cash in hand, bank balances and highly liquid short term investments. 4.17. FUNCTIONAL AND PRESENTATION CURRENCY Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates. The financial statements are presented in Pakistani Rupees, which is the Company's functional currency. 5. SHARE CAPITAL ===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
AUTHORISED CAPITAL:
75,000,000 ordinary shares of Rs 10 each
(2005: 75,000,000 ordinary shares of Rs 10 each) 750,000 750,000
ISSUED, SUBSCRIBED AND PAID UP CAPITAL:
Shares issued for cash
5,000,000 ordinary shares of Rs 10 each
(2005: 5,000,000 ordinary shares of Rs 10 each) 50,000 50,000
Shares issued as fully paid bonus shares
at beginning of the year 350,000 250,000
Shares issued during the year - 100,000
35,000,000 (2005: 35,000,000) ordinary shares 350,000 350,000
40,000,000 (2005: 40,000,000) ordinary shares of Rs 10 each 400,000 400,000
===============================================================================================5.1. SPECIAL RESERVEThis represents the Company's share of amount set aside as a special reserve by National Refinery Limited, as a result of the directive of the Government to divert net profit after tax above 50 percent of paid-up capital to off set against any future loss or to make investment for expansion or up gradation of refineries. The amount transferred to special reserve is not available for distribution to the shareholders. 6. LONG TERM DEPOSITS These represent interest free security deposits received from distributors, retailers and contractors and are refundable on cancellation of respective contracts or termination of related services. 7. DEFERRED TAX LIABILITY ===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
Deferred tax liability arising due to accelerated tax depreciation 41,600 14,000
Deferred tax asset arising in respect of certain provisions (12,600) -
29,000 14,000
===============================================================================================8. TRADE AND OTHER PAYABLES===============================================================================================
2006 2005
Note (Rupees in '000)
===============================================================================================
Creditors 42,163 340,087
Due to related parties - unsecured 8.1 3,255,656 604,686
Accrued liabilities 362,556 107,691
Advance from customers 379,107 252,080
Retention money 16,988 2,674
Workers' profit participation fund - payable/(receivable) 8.2 (19,017) 29,467
Unclaimed dividend 1,943 -
4,039,396 1,336,685
===============================================================================================8.1. DUE TO RELATED PARTIES===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
National Refinery Limited 2,082,095 -
Attock Refinery Limited 1,168,588 588,084
Pakistan Oilfields Limited 3,741 14,014
The Attock Oil Company 1,019 2,320
Attock Cement Pakistan Limited 192 268
Attock Sahara Foundation 21 -
3,255,656 604,686
===============================================================================================8.2. WORKERS' PROFIT PARTICIPATION FUND===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
Balance at beginning of the year 29,467 27,729
Amount allocated for the year 100,983 29,467
Amount paid to fund's trustees (149,467) (27,729)
Balance at the end of the year (19,017) 29,467
===============================================================================================9. CONTINGENCIES AND COMMITMENTS===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
(i) Claims of Government levies not accepted by
the company and currently under appeal 25,874 47,391
(ii) Capital expenditure commitments 35,647 57,543
(iii) Commitments for long term investment in
shares of National Refinery Limited - 235,516
===============================================================================================10. PROPERTY, PLANT AND EQUIPMENT====================================================================================================================================
Rupees ('000)
Cost Depreciation Written down Annual
At July 1, Additions/ At June 30, At July 1, Charge At June 30, value at rate of
2005 (deletions) 2006 2005 for the year/ 2006 June 30 depreciation
(on deletions) 2006 %
====================================================================================================================================
Freehold land 172,667 19,377 192,044 - - - 192,044 -
Buildings on
leasehold land 17,996 32,430 50,426 3,958 2,521 6,479 43,947 5
Pipelines, pumps,
tanks and meters 79,938 123,101 202,890 35,268 20,289 55,542 147,348 10
(149) (15)
Equipment - signage 84,323 37,480 119,742 35,969 22,291 57,319 62,423 20
(2,061) (941)
Electrical and fire
fighting equipment 11,382 13,651 24,690 5,205 2,469 7,463 17,227 10
(343) (211)
Furniture, fixture and
equipment 4,911 4,225 7,969 1,802 797 2,201 5,768 10
(1,167) (398)
Computer and auxiliary
equipment 5,420 2,249 7,309 3,738 987 4,616 2,693 20
(360) (109)
Motor vehicles 24,718 13,031 37,244 12,442 6,431 18,469 18,775 20
(505) (404)
Total Rupees 401,355 245,544 642,314 98,382 55,785 152,089 490,225
(4,585) (2,078)
2005 Rupees 347,075 55,773 401,355 67,410 32,118 98,382 302,973
(1,493) (1,146)
====================================================================================================================================10.1. COST OF ASSETS HELD BY A LARGE NUMBER OF DEALERS OF RETAIL OUTLETS OF THE COMPANY ARE AS FOLLOWS===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
Equipment - Signage 109,747 82,951
Pipelines, pumps, tanks and meters 19,199 16,942
===============================================================================================Due to large number of dealers it is impracticable to disclose the name of each person having possession of these assets, as required under para 5 of Part 1 of the 4th Schedule to the Companies Ordinance 1984.11. CAPITAL WORK IN PROGRESS ===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
Pumps, tanks and equipment 28,325 29,378
Advances to contractors 2,398 2,852
30,723 32,230
===============================================================================================12. LONG TERM INVESTMENT IN ASSOCIATED COMPANIES===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
National Refinery Limited (NRL) - Quoted
(666,388 fully paid ordinary shares of Rs 10 each
Quoted market value at June 30, 2006 Rs 177,926 thousand)
Cost 321,865 -
Share of post-acquisition profit 34,098 -
Dividend received (7,330) -
348,633 --
Attock Information Technology Services
(Private) Limited (AITSL) - Unquoted
(450,000 fully paid ordinary shares of Rs 10 each)
Cost 4,500 4,500
Share of post-acquisition profit/(loss) 124 (46)
4,624 4,454
Advance against purchase of shares of National Refinery Limited - 86,349
353,257 90,803
===============================================================================================12.1. THE COMPANY'S SHARE IN ASSOCIATED COMPANIES ARE AS FOLLOWS (Rs '000)======================================================================================================
Assets Liabilities Revenues Profit/(loss) %holding
======================================================================================================
2005
Attock Information Technology Services
(Private) Limited 4,586 132 701 (41) 10
2006
National Refinery Limited 249,225 155,458 808,940 34,098 1
Attock Information Technology Services
(Private) Limited 4,906 282 1,037 170 10
254,131 155,740 809,977 34,268
======================================================================================================12.2. Although the Company has less than 20 percent shareholding in NRL and AITSL, these have been treated as associates since the Company has representation on their board of directors.12.3. 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 6.30%, terminal growth rate of 5% and capital asset pricing model based discount rate of 13.40%. 13. STOCK IN TRADE ===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
Petroleum products 72,371 107,792
Packing material 1,849 2,284
74,220 110,076
===============================================================================================14. TRADE DEBTS===============================================================================================
2006 2005
Note (Rupees in '000)
===============================================================================================
CONSIDERED GOOD:
Secured 1,818,351 157,487
Unsecured 663,335 87,200
Due from related parties - (unsecured) 14.1 20,790 32,432
2,502,476 277,119
Unsecured - considered doubtful 16,000 -
Provision for doubtful debts (16,000) -
- -
2,502,476 277,119
===============================================================================================14.1. DUE FROM RELATED PARTIES===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
Pakistan Oilfields Limited 18,694 26,638
Attock Cement Pakistan Limited 1,685 5,373
Attock Refinery Limited 411 421
20,790 32,432
===============================================================================================15. ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
ADVANCES - CONSIDERED GOOD:
Suppliers 34,794 17,596
Employees against expenses 248 68
35,042 17,664
TRADE DEPOSITS AND SHORT-TERM PREPAYMENTS:
Trade deposits 1,052 420
Short-term prepayments 2,492 1,978
3,544 2,398
CURRENT ACCOUNT BALANCES WITH
STATUTORY AUTHORITIES IN RESPECT OF:
Sales tax 413,757 157,380
Federal excise duty 15,442 -
429,199 157,380
ACCRUED INCOME:
Income on bank deposits 17,829 1,745
OTHER RECEIVABLES:
Price differential claim receivable from the Government 334,247 100,694
Receivable from OMC's under freight pool 17,064 -
Claims receivable 12,167 10,401
DUE FROM RELATED PARTIES - UNSECURED:
Attock Information Technology Services (Private) Limited 1,273 476
Staff provident fund - 325
Staff pension fund - 126
Others 107 193
364,858 112,215
850,472 291,402
===============================================================================================16. CASH AND BANK BALANCES===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
Cash in hand 1,120 227
BANK BALANCES:
On short term deposits 1,806,668 -
On interest/markup bearing saving account
(includes US $ 106,016; 2005: US $ 108,011) 473,112 1,266,843
On current account 4 4
2,279,784 1,266,847
2,280,904 1,267,074
===============================================================================================16.1. Deposits of Rs 29,524 thousand (2005: Rs 33,658 thousand) were under lien with banks against letters of guarantees.16.2. Balances in short term deposits and saving accounts earned interest/mark-up at weighted average rate of 8.8% per annum (2005: 4.7% per annum). 17. SALES ===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
Gross Sales 46,223,802 11,217,026
Rebates/Discount (21,730) (20,568)
46,202,072 11,196,458
===============================================================================================18. COST OF PRODUCTS SOLD===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
Opening stock 110,076 21,457
Purchase of petroleum products and packing material 36,906,751 9,249,379
Excise duty 1,716,094 242,472
Development surcharge 368,743 75,407
38,991,588 9,567,258
Closing stock (74,220) (110,076)
39,027,444 9,478,639
===============================================================================================19. OTHER OPERATING INCOME===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
Commission and handling income 305,202 260,022
Tender and joining fee 5,761 1,549
Exchange gain 2,462 -
Gain on sale of property, plant and equipment 364 824
Other income 9,672 1,818
323,461 264,213
===============================================================================================20. OPERATING EXPENSES===============================================================================================
2006 2005
Notes (Rupees in '000)
===============================================================================================
Salaries and benefits 68,443 48,889
Rent, taxes and other fees 15,250 7,637
Travelling and staff transport expenses 14,795 8,190
Repairs and maintenance 9,092 5,640
Donation 20.1 5,000 -
Advertising and publicity 4,759 9,659
Printing and stationery expenses 4,478 2,462
Electricity, gas and water 3,430 2,772
Insurance 3,388 1,485
Communication expenses 3,112 2,657
Legal and professional charges 2,703 3,667
Fixed assets written off 2,204 -
Subscription and fees 1,742 1,306
Transportation expenses 1,005 1,188
Auditors' remuneration 20.2 786 443
Bank charges 21,625 3,554
Exchange loss - 684
Depreciation 55,785 32,118
Provision for doubtful debts 16,000 -
Other expenses 7,588 3,027
241,185 135,378
===============================================================================================20.1. No director or his spouse had any interest in the donation made by the company.20.2. AUDITOR'S REMUNERATION ===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
Statutory audit 293 225
Review of half yearly accounts, audit of staff funds
and special certifications 400 189
Out of pocket expenses 93 29
786 443
===============================================================================================21. INCOME ON BANK DEPOSITS AND INVESTMENTS===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
Income on bank deposits 118,190 22,263
Income on Term Finance Certificates - 1,446
Income on Carry Over Transactions - 5,752
118,190 29,461
===============================================================================================22. SHARE OF PROFIT/(LOSS) OF ASSOCIATED COMPANIESShare of profit/(loss) of associated companies is based on the audited financial statements of the associated companies for the year ended June 30, 2006. 23. INCOME TAX EXPENSE ===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
Current - for the year 538,000 167,000
- for prior year - (67,527)
Deferred - for the year 15,000 (50)
553,000 99,423
===============================================================================================23.1. RECONCILIATION OF TAX CHARGE FOR THE YEAR===============================================================================================
2006 2005
% %
===============================================================================================
Applicable tax rate 35.00 35.00
Tax effect of export sales which are taxable @ 1% of sales (6.02) (5.09)
Tax effect of amounts that are not deductible for tax purposes 0.01 0.13
Tax effect of prior year tax - (12.06)
Tax effect of profit of associated companies taxed on
the basis of dividend income (0.60) -
others 0.03 (0.22)
Average effective tax rate charged to income 28.42 17.76
===============================================================================================24. BASIC EARNINGS PER SHARE===============================================================================================
2006 2005
===============================================================================================
Profit after tax (Rupees in thousand) 1,392,606 460,408
Number of ordinary shares outstanding during the year (In thousands) 40,000 40,000
Basic earnings per share (Rupees) 34.82 11.51
===============================================================================================25. FINANCIAL INSTRUMENTS25.1. FINANCIAL ASSETS AND LIABILITIES ================================================================================================================================
Rupees ('000)
2006 2005
Interest/ Non-interest/ Interest/ Non-interest/
mark-up mark-up mark-up mark-up
Notes bearing bearing Total bearing bearing Total
================================================================================================================================
FINANCIAL ASSETS
Maturity upto one year
Trade debts - 2,502,476 2,502,476 - 277,119 277,119
Advances, deposits and
other receivables - 812,938 812,938 - 271,760 271,760
Cash and bank balances 16
Foreign currency - US $ 6,375 - 6,375 6,439 - 6,439
Local currency 2,273,405 1,124 2,274,529 1,260,404 231 1,260,635
Maturity after one year
Investment in associated companies - 353,257 353,257 - 90,803 90,803
2,279,780 3,669,795 5,949,575 1,266,843 639,913 1,906,756
FINANCIAL LIABILITIES
Maturity upto one year
Trade and other payables - 3,660,289 3,660,289 - 1,084,605 1,084,605
Maturity after one year
Long term deposits - 100,638 100,638 - 84,099 84,099
- 3,760,927 3,760,927 - 1,168,704 1,168,704
OFF BALANCE SHEET ITEMS
Commitments 9 - 35,647 35,647 - 293,059 293,059
================================================================================================================================25.2. CREDIT RISKCredit risk represents the accounting loss that would be recognised at the reporting date if counter parties failed completely to perform as contracted. The company's credit risk is primarily attributable to its trade debts, investments and balances at banks. Credit sales are against letters of credit/bank draftsgreements and to other Oil Marketing Companies or reputable organisations. The credit risk on investments and bank balances is limited because the counter parties are companies/banks with reasonably high credit ratings. 25.3. FOREIGN CURRENCY RISK Financial assets of Rs 460,970 thousand (2005: Rs 27,300 thousand) and financial liabilities of Rs 70,790 thousand (2005: Rs 60,780 thousand) were in foreign currency and subject to foreign exchange risk. 25.4. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES The carrying value of financial assets and liabilities approximate their fair value except for investments in associated companies which are stated under equity method. 26. STAFF RETIREMENT BENEFITS (i) The details of actuarial valuation of defined benefit funded pension plan carried out as at June 30, 2005 were as follows: ============================================================================
Rupees ('000)
============================================================================
RECONCILIATION OF RECEIVABLE FROM DEFINED BENEFIT PLAN:
Present value of defined benefit obligation 5,714
Fair value of plan assets (6,110)
Net actuarial losses not recognised 270
Balance at June 30, 2005 (126)
MOVEMENT IN NET (ASSET)/LIABILITY RECOGNISED:
Balance at July 1, 2004 99
Expense for the year 1,750
Benefits paid during the year (1,975)
Balance at June 30, 2005 (126)
EXPENSE:
Service cost 1,744
Interest cost 265
Expected return on plan assets (259)
Expense for 2005 1,750
============================================================================The Projected Unit Credit Method using the following significant assumptions was used for the valuation of the scheme:Valuation discount rate: 10% p.a. Salary increase: 10% p.a. Expected return on plan assets: 6.10% p.a. Pension indexation: 0% p.a. (ii) The movement in net (asset)/liability for the year ended June 30, 2006 is as follows: =========================================================================
(Rupees in '000)
=========================================================================
Balance at July 1, 2005 (126)
Expense for the year 2,686
Benefits paid during the year (2,560)
Balance at June 30, 2006 -
=========================================================================27. TRANSACTIONS WITH RELATED PARTIESAggregate transactions with related parties, other than remuneration to the chief executive, directors and executives of the company under their terms of employment, were as follows: ===============================================================================================
2006 2005
(Rupees in '000)
===============================================================================================
ASSOCIATED COMPANIES
ATTOCK REFINERY LIMITED:
Purchase of petroleum products 15,244,796 8,184,135
Purchase of services 6,857 8,550
Sale of petroleum products 1,024 2,771
Handling income 177,006 246,030
Sale of services 509 1,537
NATIONAL REFINERY LIMITED:
Purchase of petroleum products 19,357,587 -
Purchase of services 19,270 -
Sale of petroleum products 910 -
Handling income 128,196 -
Sale of services 259 -
PAKISTAN OILFIELDS LIMITED:
Purchase of petroleum products 93,435 32,445
Purchase of services 3,908 3,209
Sale of petroleum products 402,752 214,213
Sale of services 2,213 1,309
THE ATTOCK OIL COMPANY LIMITED:
Purchase of petroleum products 35,775 13,015
Purchase of services 20,847 10,746
ATTOCK CEMENT PAKISTAN LIMITED:
Purchase of services 3,159 2,671
Sale of petroleum products 60,633 28,055
ATTOCK INFORMATION TECHNOLOGY SERVICES (PRIVATE) LIMITED:
Sale of services 1,364 476
Investment in associated company - 2,250
AFTOCK SAHARA FOUNDATION:
Purchase of goods 58 -
===============================================================================================The prices for purchase and sale of regulated products are based on prices notified by the Government.The prices for purchase of other products are based on market prices or at discounted prices determined in relation to the quantity purchased and the distribution margin for the regulated products. Commission and handling income is based on commercially negotiated terms. Purchase and sale of services are based on allocated cost. 28. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES ==============================================================================================
Rs ('000)
Chief Executive Directors Executives
2006 2005 2006 2005 2006 2005
==============================================================================================
Managerial remuneration 7,267 4,569 1,343 2,261 4,213 1,449
Commission / bonus 3,909 2,705 1,034 887 961 158
Company's contribution to
provident and pension funds 893 686 194 371 914 344
Housing and utilities 1,992 1,485 432 486 1,842 750
Leave passage 420 381 92 422 377 150
14,481 9,826 3,095 4,427 8,307 2,851
No of person(s) 1 1 2 2 5 2
==============================================================================================28.1. The above includes amounts charged by an associated company for share of chief executive's and one director's remuneration as approved by the Board of Directors of the company.Executives were also provided with use of Company maintained cars and medical facilities as per Company policy. 29. NUMBER OF EMPLOYEES Total number of employees at the end of the year were 98 (2005: 84). 30. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The preparation of financial statements in conformity with the approved accounting standards requires the use of certain critical accounting estimates. It also requires the management to exercise its judgement in the process of applying the company's accounting policies. Estimates and judgement are continually evaluated and are based on historical experience, including expectations of future events that are believed to be reasonable under the circumstances. The area where assumptions and estimates are significant to the company's financial statements is the estimate of recoverable amount of investment in associated companies - note 12. 31. NON-ADJUSTING EVENT AFTER THE BALANCE SHEET DATE The Board of Directors in their meeting held on August 22, 2006 have proposed a final dividend for the year ended June 30, 2006 @ Rs 8/- per share, amounting to Rs 320,000 thousand for approval of the members in the Annual General Meeting to be held on October 9, 2006. 32. DATE OF AUTHORISATION FOR ISSUE These financial statements were authorised for issue by the Board of Directors of the Company on August 22, 2006. |