| Attock Refinery Ltd - 2011 |
|
Balance Sheet as at June 30, 2011
==========================================================================================
2011 2010
==========================================================================================
Note Rs'000 Rs'000
==========================================================================================
SHARE CAPITAL AND RESERVES
Share capital
Authorised 6 1,500,000 1,500,000
Issued, subscribed and paid-up 6 852,930 852,930
Reserves and surplus 7 11,606,134 9,420,588
12,459,064 10,273,518
SURPLUS ON REVALUATION
OF FREEHOLD LAND 8 8,745,217 1,923,339
21,204,281 12,196,857
DEFERRED LIABILITIES
Provision for staff gratuity 29 158,401 140,022
CURRENT LIABILITIES AND PROVISIONS
Short term finance 9 - -
Trade and other payables 10 38,885,535 44,202,697
Provision for taxation 3,446,220 2,049,256
42,331,755 46,251,953
CONTINGENCIES AND COMMITMENTS 11
63,694,437 58,588,832
PROPERTY, PLANT AND EQUIPMENT
Operating assets 12 9,334,260 2,562,880
Capital work-in-progress 13 279,099 260,908
Stores and spares held for capital expenditure 57,607 44,213
9,670,966 2,868,001
LONG TERM INVESTMENTS 14 13,264,915 13,264,915
LONG TERM LOANS AND DEPOSITS 15 14,653 9,925
DEFERRED TAXATION 16 155,244 161,467
CURRENT ASSETS
Stores, spares and loose tools 17 619,923 581,044
Stock-in-trade 18 10,872,576 7,178,852
Trade debts 19 25,053,677 30,430,263
Loans, advances, deposits, prepayments
and other receivables 20 178,207 125,946
Cash and bank balances 21 3,864,276 3,968,419
40,588,659 42,284,524
63,694,437 58,588,832
==========================================================================================Profit and Loss Account for the year ended June 30, 2011==========================================================================================
2011 2010
==========================================================================================
Note Rs'000 Rs'000
==========================================================================================
Sales 22 116,388,370 88,184,026
Reimbursement due from the Government
under import parity pricing formula 23 9,004 -
116,397,374 88,184,026
Less: Cost of sales 24 (114,839,853) (88,693,686)
GROSS PROFIT / (LOSS) 1,557,521 (509,660)
Less: Administration expenses 25 262,630 245,291
Distribution cost 26 28,337 24,834
Finance cost 27 45,408 308,797
Other charges 28 294,457 76,745
(630,832) (655,667)
926,689 (1,165,327)
Other income 30 1,565,590 983,335
PROFIT / (LOSS) BEFORE TAXATION FROM REFINERY OPERATIONS 2,492,279 (181,992)
Provision for taxation 31 (1,375,123) (293,822)
PROFIT / (LOSS) AFTER TAXATION FROM REFINERY OPERATIONS 1,117,156 (475,814)
Income from non-refinery operations less applicable
charges and taxation 32 1,068,390 602,203
PROFIT FOR THE YEAR 2,185,546 126,389
Earnings / (loss) per share - Basic and diluted (Rs)
Refinery operations 13.10 (5.58)
Non-refinery operations 12.53 7.06
37 25.63 1.48
==========================================================================================Statement of Comprehensive Income for the year ended June 30, 2011==========================================================================================
2011 2010
==========================================================================================
Note Rs'000 Rs'000
==========================================================================================
Profit for the year 2,185,546 126,389
Other comprehensive income:
Surplus on revaluation of freehold land 12.1 6,821,878 -
Total comprehensive income for the year 9,007,424 126,389
==========================================================================================Cash Flow Statement for the year ended June 30, 2011==========================================================================================
2011 2010
==========================================================================================
Rs'000 Rs'000
==========================================================================================
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from - customers 148,098,253 97,334,916
- others 218,883 226,370
148,317,136 97,561,286
Cash paid for operating costs (125,750,010) (79,873,828)
Cash paid to Government for
duties, taxes and other levies (24,449,418) (21,150,206)
Income tax paid (90,285) (278,636)
Net cash flows from operating activities (1,972,577) (3,741,384)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (91,328) (74,819)
Sale of property, plant and equipment 4,953 4,299
Purchase of shares of associated companies - (20,795)
Long term loans and deposits (4,728) 2,512
Income on bank deposits received 730,107 589,149
Dividends received 1,274,693 714,557
Net cash flows from investing activities 1,913,697 1,214,903
CASH FLOWS FROM FINANCING ACTIVITIES
Finance cost (45,408) (308,797)
Dividends paid (26) (170)
Net cash flows from financing activities (45,434) (308,967)
EFFECT OF EXCHANGE RATE CHANGES 171 1,561
(DECREASE) IN CASH AND CASH EQUIVALENTS (104,143) (2,833,887)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 3,968,419 6,802,306
CASH AND CASH EQUIVALENTS AT END OF THE YEAR 3,864,276 3,968,419
==========================================================================================Statement of Changes in Equity for the year ended June 30, 2011==========================================================================================================================================================
Special reserve Surplus on
Share Capital for expansion / Investment General Un-appropriated revaluation of
capital reserve modernisation reserve reserve Profit freehold land Total
==========================================================================================================================================================
Rs'000
==========================================================================================================================================================
Balance at June 30, 2009 852,930 5,948 4,668,148 3,762,775 55 857,273 1,923,339 12,070,468
Total comprehensive income for the year
Profit for the year - - - - - 126,389 - 126,389
Other comprehensive income for the year - - - - - - - -
- - - - - 126,389 - 126,389
Loss from refinery operations
transferred from unappropriated
profit to special reserve - note 7.1 - - (475,814) - - 475,814 - -
Balance at June 30, 2010 852,930 5,948 4,192,334 3,762,775 55 1,459,476 1,923,339 12,196,857
Total comprehensive income for the year
Profit for the year - - - - - 2,185,546 - 2,185,546
Other comprehensive income for the year - - - - - - 6,821,878 6,821,878
- - - - - 2,185,546 6,821,878 9,007,424
Transfer to special reserve for expansion /
modernisation - note 7.1 - - 971,356 - - (971,356) - -
Balance at June 30, 2011 852,930 5,948 5,163,690 3,762,775 55 2,673,666 8,745,217 21,204,281
==========================================================================================================================================================Notes to and Forming Part of the Financial Statements for the year ended June 30, 20111. LEGAL STATUS AND OPERATIONS Attock Refinery Limited (the Company) was incorporated in Pakistan on November 8, 1978 as a private limited company and was converted into a public 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 subsidiary of the Attock Oil Company Limited, UK and its ultimate parent is Bay View International Group S.A. 2. STATEMENT OF COMPLIANCE These are separate financial statements of the Company. These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984. In case requirements differ, the provisions or directives of the Companies Ordinance, 1984 shall prevail. 3. ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS The following amendments, revisions and interpretations to published accounting standards were not effective during the year and have not been early adopted by the Company: ==========================================================================================
Effective date
(annual periods beginning
on or after)
==========================================================================================
IFRS 7 Financial instruments: Disclosures (Amendments) January 1, 2011
& July 1, 2011
IAS 1 Presentation of financial statements (Amendments) January 1, 2011
& July 1, 2012
IAS 12 Income taxes (Amendments) January 1, 2012
IAS 19 Employee benefits (Amendments) January 1, 2013
IAS 24 Related party disclosures (Revised) January 1, 2011
IAS 27 Separate Financial Statements (Revised) January 1, 2013
IAS 28 Investments in Associates and Joint Venture (Revised) January 1, 2013
IAS 34 Interim Financial Reporting (Amendments) January 1, 2011
IFRIC 13 Customer Loyalty Programmes (Amendments) January 1, 2011
IFRIC 14 The limit on a defined benefit asset, minimum funding
requirements and their interaction (Amendments) January 1, 2011
==========================================================================================The management anticipate that, except for the effects on the financial statements of amendments to IAS 19 "Employee Benefits", the adoption of the above standards, amendments and interpretations in future periods, will have no material impact on the Company's financial statements other than in presentation / disclosures. The application of the amendments to IAS 19 (effective date January 1, 2013) would result in the recognition of cumulative unrecognized actuarial gains / losses in other comprehensive income in the period of initial application, which cannot be presently quantified at the statement of financial position date.Further, the following new standards have been issued by the International Accounting Standards Board (IASB), which are yet to be notified by the Securities and Exchange Commission of Pakistan, for the purpose of their applicability in Pakistan : ==========================================================================================
Effective date
(annual periods beginning
on or after)
==========================================================================================
IFRS 9 Financial instruments January 1, 2013
IFRS 10 Consolidated financial statements January 1, 2013
IFRS 11 Joint arrangements January 1, 2013
IFRS 12 Disclosure of interests in other entities January 1, 2013
IFRS 13 Fair value measurement January 1, 2013
========================================================================================== 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES4.1. Basis of measurement These financial statements have been prepared under the historical cost convention modified by revaluation of freehold land referred to in note 4.7 and certain other modifications as required by approved accounting standards referred to in the accounting policies given below. 4.2. Dividend appropriation Dividend is recognised as a liability in the financial statements in the period in which it is declared. 4.3. Employee retirement benefits The main features of the retirement benefit schemes operated by the Company for its employees are as follows : (i) Defined benefits plans The Company operates a pension and gratuity plan (established in July 1, 2010) for its management staff and a gratuity plan for its non-management staff. Gratuity is deductible from pension. Pension and gratuity plan for management staff is invested through approved trust fund while the gratuity plan for the non-management staff is book reserve plan. Contributions are made in accordance with actuarial recommendations. Actuarial valuations are conducted through an independent actuary, annually using projected unit credit method. The obligation at the balance sheet date is measured at the present value of the estimated future cash outflows. Unrealised net gains and losses are amortised over the expected remaining service of current members. (ii) Defined contribution plans The company operates an approved contributory provident fund for all employees. Equal monthly contribution is made both by the Company and the employee to the fund at the rate of 10% of basic salary. 4.4. Employee compensated absences The company also provides for compensated absences for all employees in accordance with the rules of the Company. 4.5. Taxation Provision for current taxation is based on taxable income at the current rates of tax. 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 utilized. 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. 4.6. 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 embodying economic benefit will be required to settle the obligation and a reliable estimate of the amount can be made. 4.7. Property, plant and equipment a) Cost Operating fixed assets except freehold land are stated at cost less accumulated depreciation. Freehold land is stated at revalued amount. Capital work-in-progress and stores held for capital expenditure are stated at cost. Cost in relation to certain plant and machinery items include borrowing cost related to the financing of major projects during construction phase. b) Depreciation Operating assets depreciation is calculated using the straight-line method to allocate their cost over their estimated useful lives at the rates specified in note 12. c) Repairs and maintenance Maintenance and normal repairs, including minor alterations, are charged to income as and when incurred. Renewals and improvements are capitalised and the assets so replaced, if any, are retired. d) Gains and losses on deletion Gains and losses on deletion of assets are included in income currently. 4.8. Impairment of non-financial assets Assets that have an indefinite useful life, for example land, are not subject to amortisation or depreciation and are tested annually for impairment. Assets that are subject to depreciation / amortisation are reviewed for impairment at each balance sheet date or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. Reversals of the impairment losses are restricted to the original cost of the asset. An impairment loss or reversal of impairment loss is recognised in the profit and loss account. 4.9. Investments in associated and subsidiary companies These investments are initially valued at cost. At subsequent reporting dates, the Company reviews the carrying amount of the investment to assess whether there is any indication that such investments have suffered an impairment loss. If any such indication exists, the recoverable amount is estimated in order to determine the extent of the impairment loss, if any. Such impairment losses or reversal of impairment losses are recognised in the profit and loss account. The profits and losses of subsidiary and associated companies are carried in the financial statements of the subsidiary and associated company and are not dealt with for the purpose of these financial statements of the Company except to the extent of dividend declared by the subsidiary and associated companies. 4.10. Stores, spares and loose tools These are valued at moving average cost less allowance for obsolete and slow moving items. Items in transit are stated at invoice value plus other charges paid thereon. 4.11. Stock-in-trade Stock-in-trade is valued at the lower of cost and net realisable value. Crude oil in transit is valued at cost comprising invoice value. Cost in relation to crude oil is determined on the basis of annual average cost of purchases during the year on the principles of import parity and in relation to semi-finished and finished products it represents the cost of crude oil and refining charges consisting of direct expenses and appropriate production overheads. Direct expenses are arrived at on the basis of average cost for the year per barrel of throughput. Production overheads, including depreciation, are allocated to throughput proportionately on the basis of nameplate capacity. Net realisable value in relation to finished product represents selling prices in the ordinary course of business less costs necessarily to be incurred for its sale, as applicable, and in relation to crude oil represents replacement cost at the balance sheet date. 4.12. Revenue recognition Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is recognised as follows: i) Revenue from sales is recognised on delivery of products ex-refinery to the customers with the exception that Naphtha export sales are recognised on the basis of products shipped to customers. ii) The Company is operating under the import parity pricing formula, as modified from time to time, whereby it is charged the cost of crude on 'import parity' basis and is allowed product prices equivalent to the "import parity' price, calculated under prescribed parameters. Effective June 1, 2011, the Government has notified deregulation of the prices of Motor Spirit (MS), High Octane Blending Component (HOBC), Light Diesel Oil (LDO) and Aviation Fuels (JPs) subject to certain conditions, including setting up and commissioning of Isomerization unit and Diesel Hydro De-sulphurization project by June 2014. Ex-refinery price of the above petroleum products can not be more than the Pakistan State Oil (PSO) average actual import prices of the previous month excluding incidentals / wharfage. In case of non availability of PSO import prices, the refineries will fix their ex-refinery price as per existing Import Parity Pricing formula parameters excluding incidentals & wharfage. However, in no case the above referred import price will exceed the import parity price. The ex-refinery prices of High Speed Diesel (HSD) and Superior Kerosene Oil (SKO) will continue to be determined / notified by the Oil and Gas Regulatory Authority (OGRA) as per existing practice. Effective July 1, 2007, the Government made certain modifications in the prescribed parameters effectively reducing the price of Kerosene oil, Light Diesel Oil (LDO) and JP-8 in 2007 and 2008. The Government has further modified the refineries pricing formula in August, 2008 whereby the 10% duty included in pricing of HSD has been cut to 7.5% and the motor gasoline pricing has been unilaterally revised by linking its price to Arab Gulf 95 RON prices and calculating the price of 87 RON motor gasoline on a unitary method basis. This revision adversely affect the pricing of HSD and motor gasoline which are company's two motor products. In July, 2002, the Government had modified the pricing formula that was applicable to the Company restricting the distribution of net profits after tax (if any) from refinery operations to 50% of paid-up capital as at July 1, 2002 and diverting the surplus profits, if any, to a special reserve to offset any future loss or make investment for expansion or upgradation of Refinery. Further the Government had abolished the minimum rate of return of 10% which continues to be contested by the Company as it represented to the Government that the already existing agreement for guaranteed return could be modified only with the mutual consent of both the parties. iii) Dividend income is recognised when the right to receive dividend is established. iv) Income on bank deposits is recognised using the effective yield method. 4.13. Borrowing cost Borrowing cost related to the financing of major projects during the construction phase is capitalised. All other borrowing costs are expensed as incurred. 4.14. Foreign currency transactions and balances Transactions in foreign currencies are converted into rupees at the rates of exchange ruling on the date of the transaction. All monetary assets and liabilities denominated in foreign currencies at the year end are translated at exchange rates prevailing at the balance sheet date. Exchange differences are dealt with through the profit and loss account. 4.15. Financial instruments 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. 4.16. Financial Assets The Company classifies its financial assets in the following categories: held-to-maturity investments, loans and receivables, available for sale investments and investments at fair value through profit or loss. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. Regular purchases and sales of financial assets are recognized on the trade-date - the date on which the company commits to purchase or sell the asset. 4.16.1. Held-to-maturity investments Investments with fixed payments and maturity that the Company has the intent and ability to hold to maturity are classified as held-to-maturity investments and are carried at amortised cost less impairment losses. 4.16.2. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. The Company's loans and receivables comprise "Trade debts", "Advances, deposits and other receivables" and "Cash and bank balances" in the balance sheet. Loans and receivables are carried at amortized cost using the effective interest method. 4.16.3. Available-for-sale investments Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date. Available-for-sale investments are initially recognised at cost and carried at fair value at the balance sheet date. Fair value of a quoted investment is determined in relation to its market value (current bid prices) at the balance sheet date. If the market for a financial asset is not active (and for unlisted securities), the Company establishes fair value by using valuation techniques. Adjustment arising from remeasurement of investment to fair value is recorded in equity and taken to income on disposal of investment or when the investment is determined to be impaired. 4.16.4. Investment at fair value through profit or loss Investments classified as investments at fair value through profit or loss are initially measured at cost being fair value of consideration given. At subsequent dates these investments are measured at fair value with any resulting gains or losses recognised directly in the profit and loss account. The fair value of such investments is determined on the basis of prevailing market prices. 4.17. Trade and other payables Liabilities for trade and other amounts payable including amounts payable to related parties are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received. 4.18. 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. 4.19. 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. 4.20. 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. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS 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 judgment in the process of applying the Company's accounting policies. The areas assumptions and estimates are significant to the financial statements, are as follows : i) Estimate of recoverable amount of investment in an associated company - note 14 ii) ii) Revaluation surplus on freehold land - note 12.1 iii) iii) Estimated useful life of property, plant and equipment - note 12 iv) iv) Provision for taxation - note 31 v) v) Provision for employee retirement benefits - note 29 6. SHARE CAPITAL ==========================================================================================
2011 2010
==========================================================================================
Rs Rs
==========================================================================================
Authorised
150,000,000 ordinary shares of Rs 10 each 1,500,000 1,500,000
Issued, subscribed and paid up
8,000,000 ordinary shares of Rs 10 each
issued for cash 80,000 80,000
Shares issued as fully paid bonus shares
77,293,000 ordinary shares of Rs 10 each 772,930 772,930
85,293,000 ordinary shares of Rs 10 each 852,930 852,930
==========================================================================================The parent company Attock Oil Company Limited held 48,039,224 (2010: 48,039,224) ordinary shares and the associated company Attock Petroleum Limited held 1,332,000 (2010: 1,332,000) ordinary shares at the year end.7. RESERVES AND SURPLUS ==========================================================================================
2011 2010
==========================================================================================
Rs Rs
==========================================================================================
Capital reserve
Liabilities taken over from The Attock Oil Co. Ltd
no longer required 4,800 4,800
Capital gain on sale of building 654 654
Insurance and other claims realised
relating to pre-incorporation period 494 494
5,948 5,948
Special reserve for expansion / modernisation - note 7.1
Additional revenue under processing fee
formula related to 1990-91 and 1991-92 32,929 32,929
Surplus profits under the import parity pricing formula 5,130,761 4,159,405
5,163,690 4,192,334
Revenue reserve
Investment reserve - note 7.2 3,762,775 3,762,775
General reserve 55 55
Unappropriated profit 2,673,666 1,459,476
6,436,496 5,222,306
11,606,134 9,420,588
========================================================================================== 7.1. Represents amounts retained as per stipulations of the Government under the pricing formula and is available only for offsetting any future loss or making investment in expansion or upgradation of the refinery. Transfer to / from special reserve is recognised at each quarter end and is reviewed for adjustment based on profit / loss on an annual basis. The company has incurred capital expenditure of Rs 3,882 million on upgradation and expansion projects from July 1, 1997 to June 30, 2011 (July 1, 1997 to June 30, 2010: Rs 3,878 million).During the year, The Ministry of Petroleum & Natural Resources issued a directive to the refineries not to adjust losses against special reserve till the decision of Supreme Court of Pakistan in this regard. However, the company, based on legal advice, is of the view that since the matter is subjudice, therefore, no change in the treatment of special reserve can be enforced upon the Company till the announcement of verdict by the Supreme Court in the case pending before it on Refineries Pricing formula. 7.2. The Company has set aside gain on sale of investment as investment reserve to meet any future losses / impairment on investments. 8. SURPLUS ON REVALUATION OF FREEHOLD LAND This represents surplus over book value resulting from revaluation of freehold land as referred to in note 12.1. Except and to the extent actually realized on disposal of the assets which are revalued, the surplus on revaluation of fixed assets shall not be applied to set off or reduce any deficit or loss, whether past, current or future, or in any manner applied, adjusted or treated so as to add to the income, profit or surplus of the company, or utilized directly or indirectly by way of dividend or bonus, provided that the surplus on revaluation of fixed assets may be applied by the company in setting off or in diminution of any deficit arising from the revaluation of any other fixed asset of the company. 9. SHORT TERM FINANCE The Company has negotiated running finance facilities with banks and accepted facility offer letters to the extent of Rs 1 billion (June 30, 2010 : Rs 3 billion), which were unutilised at the year end. As and when required, these facilities shall be secured by registered charge over the Company's current assets. 10. TRADE AND OTHER PAYABLES ==========================================================================================
2011 2010
==========================================================================================
Rs'000 Rs'000
==========================================================================================
Creditors - note 10.1 29,044,250 28,597,616
Due to The Attock Oil Company Limited - Holding Company 128,589 151,574
Due to associated companies
Pakistan Oilfields Limited 2,565,885 1,163,800
Attock Information Technology Services (Private) Limited 1,324 1,904
National Refinery Limited 7,316 -
Attock Petroleum Limited 11,633 -
Accrued liabilities and provisions - note 10.1 2,073,753 3,175,095
Due to the Government under pricing formula 3,190,959 8,626,856
Advance payments from customers 9,399 5,723
Sales tax payable 1,084,572 1,274,260
Workers' Welfare Fund 349,553 258,933
Workers' Profit Participation Fund - note 10.2 199,714 28,208
General staff provident fund 1,468 -
Staff provident fund 1,560 -
Management staff gratuity fund 78,796 -
Crude oil freight adjustable through inland
freight equalisation margin 40,580 -
Deposits from customers adjustable against freight
and Government levies payable on their behalf 376 376
Payable to statutory authorities in respect of petroleum
development levy and excise duty 47,236 866,417
Security deposits 44,994 48,331
Unclaimed dividends 3,578 3,604
38,885,535 44,202,697
========================================================================================== 10.1. These balances include amounts retained from payments to crude suppliers for purchase of local crude as per the directives of the Ministry of Petroleum and Natural Resources (the Ministry). Further, as per directive of the Ministry such withheld amounts are to be retained in designated 90 days interest bearing accounts. The amounts withheld alongwith accumulated profits amounted to Rs 2,023.297 million (2010: Rs 3,177.551 million).10.2. Workers' Profit Participation Fund ==========================================================================================
2011 2010
==========================================================================================
Rs'000 Rs'000
==========================================================================================
Balance at the beginning of the year 28,208 94,754
Add: Interest on funds utilised in the Company's business 690 1,344
28,898 96,098
Less: Amount paid to the Fund 27,586 95,040
1,312 1,058
Add: Amount allocated for the year - notes 28 and 32 198,402 27,150
199,714 28,208
========================================================================================== 11. CONTINGENCIES AND COMMITMENTS========================================================================================== Contingencies: i) Due to huge circular debt in the oil industry, certain payments due from / to the oil marketing companies (OMCs) and crude oil suppliers respectively have not been made on their due dates of payment. As a result the Company has raised claims on OMCs in respect of mark-up on delayed payments as well as received counter claims from some crude oil suppliers which have not been recognized in the financial statements as these have not been acknowledged as debt by either parties. ii) SECP has raised a demand on the Company to surrender gain on purchase and sale of shares of Attock Petroleum Limited by the Company during the period May, 2008 to August, 2008. Based on legal advice, the Company has contested this demand in Appeal against the SECP order. The Company is confident that there are reasonable grounds for a favourable decision and accordingly this liability has not been recognized in the financial statements. 52,204 - iii) Guarantees issued by banks on behalf of the Company 394 394 iv) Claims for land compensation contested by the Company 1,300 1,300 v) Price adjustment related to crude oil purchases as referred to in note 24.1, the amount of which can not be presently quantified Commitments outstanding: i) Capital expenditure 94,358 16,559 ii) Letters of credit for purchase of store items 29,754 238,971 ==========================================================================================12. OPERATING ASSETS ===========================================================================================================================
Freehold Buildings Furniture,
land on freehold Plant and Computer fixtures and
(note 12.1) land machinery equipment equipment Vehicles Total
===========================================================================================================================
Rupees ('000)
===========================================================================================================================
As at July 1, 2009
Cost 1,977,560 111,267 4,102,851 45,679 60,543 74,301 6,372,201
Accumulated depreciation - (43,864) (3,664,428) (38,800) (40,305) (62,901) (3,850,298)
Net book value 1,977,560 67,403 438,423 6,879 20,238 11,400 2,521,903
Year ended June 30, 2010
Opening net book value 1,977,560 67,403 438,423 6,879 20,238 11,400 2,521,903
Additions - 7,456 144,779 2,569 3,435 5,770 164,009
Disposals
Cost - - - - (342) (4,123) (4,465)
Depreciation - - - - 205 4,122 4,327
- - - - (137) (1) (138)
Depreciation charge - (5,503) (104,460) (3,024) (3,962) (5,945) (122,894)
Closing net book value 1,977,560 69,356 478,742 6,424 19,574 11,224 2,562,880
As at June 30, 2010
Cost 1,977,560 118,723 4,247,630 48,248 63,636 75,948 6,531,745
Accumulated depreciation - (49,367) (3,768,888) (41,824) (44,062) (64,724) (3,968,865)
Net book value 1,977,560 69,356 478,742 6,424 19,574 11,224 2,562,880
Year ended June 30, 2011
Opening net book value 1,977,560 69,356 478,742 6,424 19,574 11,224 2,562,880
Additions - 5,162 41,404 922 4,137 8,118 59,743
Revaluation surplus 6,821,878 - - - - - 6,821,878
Disposals
Cost - - (1,201) (3,121) (565) (5,705) (10,592)
Depreciation - - - 3,114 353 4,415 7,882
- - (1,201) (7) (212) (1,290) (2,710)
Depreciation charge - (5,435) (89,259) (2,615) (4,731) (5,491) (107,531)
Closing net book value 8,799,438 69,083 429,686 4,724 18,768 12,561 9,334,260
As at June 30, 2011
Cost 8,799,438 123,885 4,287,833 46,049 67,208 78,361 13,402,774
Accumulated depreciation - (54,802) (3,858,147) (41,325) (48,440) (65,800) (4,068,514)
Net book value 8,799,438 69,083 429,686 4,724 18,768 12,561 9,334,260
Annual rate of Depreciation (%) - 5 10 20 10 20
=========================================================================================================================== 12.1. Freehold land was revalued and the revaluation surplus of Rs 6,821,877,500 (2010: Rs 1,923,338,591) has been added to the value of freehold land and corresponding amount has been transferred to surplus on revaluation of fixed assets.========================================================================================
Original cost of freehold land Rs 54,221,409
Book value at the date of valuation Rs 1,977,560,000
Revalued amount Rs 8,799,437,500
Dates of valuation June 9 & 10, 2011
Basis of revaluation Estimated current market value
Name and qualification of independent valuer Iqbal A. Nanjee & Co.
Valuation Consultants and Surveyors
======================================================================================== 12.2. Fixed assets disposed off during the year are as follows:==========================================================================================================================
Original Book Sale
cost value proceeds Mode of disposal Particulars of purchaser
==========================================================================================================================
Rs '000
==========================================================================================================================
Vehicles
1,289 1,289 1,279 Insurance claim EFU General Insurance Company
554 - 542 Open bidding Mr. Muhammad Yaseen, employee
511 - 516 Open bidding Mr. Tariq Nadeem,
Assets disposed off to executives:
Vehicles 887 - 89 Company policy Mr. Yawar Ikram
887 - 89 Company policy Dr. A. K. Niazi
533 - 53 Company policy Mr. Sohail Gulzar
========================================================================================================================== 12.3. The depreciation charge for the year has been allocated as follows:==========================================================================================
2011 2010
==========================================================================================
Rs'000 Rs'000
==========================================================================================
Cost of sales 97,280 112,436
Administration expenses 9,990 9,523
Distribution cost 261 302
Desalter operating cost - 633
107,531 122,894
========================================================================================== 13. CAPITAL WORK-IN-PROGRESS==========================================================================================
Opening balance as at July 1, 2010 260,908 336,072
Add: Additions during the year 31,364 60,305
292,272 396,377
Less: Capitalization during the year 13,173 135,469
Closing balance as at June 30, 2011 279,099 260,908
The details are as under:
Civil works 2,240 242
Plant and machinery 248,439 232,246
Pipeline project 28,420 28,420
279,099 260,908
========================================================================================== 14. LONG TERM INVESTMENTS - AT COST================================================================================================
2011 2010
================================================================================================
% age % age
holding Rs '000 holding Rs '000
================================================================================================
Associated companies
Quoted
National Refinery Limited (NRL) - note 14.1 25 8,046,635 25 8,046,635
19,991,640 (2010: 19,991,640) fully paid ordinary
shares including 3,331,940 (2010 : 3,331,940)
bonus shares of Rs 10 each
Market value as at June 30, 2011: Rs 7,042 million
(June 30, 2010: Rs 3,655 million)
Attock Petroleum Limited (APL) - note 14.2 21.88 4,463,485 21.88 4,463,485
15,120,115 (2010: 12,600,096) fully paid ordinary
shares including 4,620,035 (2010 : 2,100,016)
bonus shares of Rs 10 each
Market value as at June 30, 2011: Rs 5,659 million
(June 30, 2010: Rs 3,651 million)
Unquoted
Attock Gen Limited (AGL) 30 748,295 30 748,295
7,482,957 (2010: 7,482,957) fully paid ordinary
shares of Rs 100 each
Attock Information Technology Services (Private) 10 4,500 10 4,500
450,000 (2010: 450,000) fully paid ordinary
shares of Rs 10 each
13,262,915 13,262,915
Subsidiary company
Unquoted
Attock Hospital (Private) Limited 100 2,000 100 2,000
200,000 (2010: 200,000) fully paid ordinary
shares of Rs 10 each
13,264,915 13,264,915
================================================================================================All associated and subsidiary companies are incorporated in Pakistan.14.1. Based on a valuation analysis carried out by an external investment advisor engaged by the Company, the recoverable amount of investment in NRL exceeds its carrying amount. The recoverable amount has been estimated based on a value in use calculation. These calculations have been made on discounted cash flow based valuation methodology which assumes gross profit margin of 6.50% (2010: 3.91%), terminal growth rate of 4% (2010: 3%) and capital asset pricing model based discount rate of 20.00% (2010: 17.90%). 14.2. Investment in APL ==========================================================================================
Number Cost
of shares Rs '000
==========================================================================================
As at July 1, 2010 12,600,096 4,463,485
Bonus shares 2,520,019 -
As at June 30, 2011 15,120,115 4,463,485
========================================================================================== 15. LONG TERM LOANS AND DEPOSITS==========================================================================================
2011 2010
==========================================================================================
Rs '000 Rs '000
==========================================================================================
Loans to employees - considered good - note 15.1 29,843 23,507
Less: Amounts due within next twelve months
shown under current assets - note 20 (16,138) (14,530)
13,705 8,977
Security deposits 948 948
14,653 9,925
========================================================================================== 15.1. Loans to employees are for miscellaneous purposes which are recoverable in 24, 36, and 60 equal monthly installments depending on case to case basis and are secured by a charge on the asset purchased and / or amount due to the employee against provident fund or a third party guarantee. These are interest free loans. These include an amount of Rs 2.951 million (2010: Rs 3.973 million) receivable from Executives of the Company and does not include any amount receivable from Directors or Chief Executive. The maximum amount due from executives of the Company at the end of any month during the year was Rs 5.022 million (2010: Rs 5.779 million).15.2. Reconciliation of carrying amount of loans to executives: ==========================================================================================
2011 2010
==========================================================================================
Rs '000 Rs '000
==========================================================================================
Opening balance as at July 1 3,973 5,218
Add: Disbursements during the year 5,290 4,757
9,263 9,975
Less: Repayments during the year 6,312 6,002
Closing balance as at June 30 2,951 3,973
========================================================================================== 16. DEFERRED TAXATION==========================================================================================
2011 2010
==========================================================================================
Rs '000 Rs '000
==========================================================================================
Debit balances arising on
Difference between accounting and tax depreciation 68,847 83,629
Provisions for obsolete stores, doubtful debts and gratuity 86,397 77,838
155,244 161,467
========================================================================================== 17. STORES, SPARES AND LOOSE TOOLS==========================================================================================
2011 2010
==========================================================================================
Rs '000 Rs '000
==========================================================================================
Stores (including items in transit
Rs 60.91 million; 2010: Rs 63.15 million) 376,331 344,398
Spares 304,704 290,989
Loose tools 260 429
681,295 635,816
Less: Provision for slow moving items - note 17.1 61,372 54,772
619,923 581,044
========================================================================================== 17.1. Provision for slow moving items==========================================================================================
2011 2010
==========================================================================================
Rs '000 Rs '000
==========================================================================================
Opening balance 54,772 43,472
Add: Provision for the year 6,600 11,300
61,372 54,772
========================================================================================== 18. STOCK-IN-TRADE==========================================================================================
2011 2010
==========================================================================================
Rs '000 Rs '000
==========================================================================================
Crude oil - in stock 3,666,635 2,848,225
- in transit 31,014 173,796
3,697,649 3,022,021
Semi-finished products 899,348 483,694
Finished products - note 18.1 6,275,579 3,673,137
10,872,576 7,178,852
========================================================================================== 18.1. Finished products include stocks carried at net realisable value of Rs 2 million (2010: Rs 3,184 million). Adjustments amounting to Rs 1 million (2010: Rs 357 million) have been made to closing inventory to write down stocks of finished products to their net realisable value.19. TRADE DEBTS All debtors are unsecured and considered good. These are net of provision for doubtful debts of Rs 1 million (2010: Nil). Trade debts include amount receivable from associated companies Attock Petroleum Limited Rs 7,246 million (2010: Rs 6,723 million) and Pakistan Oilfields Limited Rs 7 million (2010: Rs 5 million). 20. LOANS, ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES ==========================================================================================
2011 2010
==========================================================================================
Rs '000 Rs '000
==========================================================================================
Loans and advances - considered good
Current portion of long term loans to employees - note 15 16,138 14,530
Advances to suppliers 34,559 31,970
Advances to employees 2,876 3,503
53,573 50,003
Deposits and prepayments
Trade deposits 286 286
Short term prepayments 37,978 31,680
38,264 31,966
Other receivables
Due from subsidiary company
Attock Hospital (Private) Limited 148 94
Due from associated companies
National Refinery Limited - 24
Attock Petroleum Limited - 1,122
Attock Leisure and Management
Associates (Pvt) Limited 186 28
Attock Gen Limited 371 723
National Cleaner Production Centre Foundation 322 2,230
Due from Staff Pension Fund 69,242 19,935
Income accrued on bank deposits 9,069 3,989
Crude oil freight adjustable through
inland freight equalisation margin - 3,615
Other receivables 7,032 12,217
86,370 43,977
178,207 125,946
========================================================================================== 21. CASH AND BANK BALANCES==========================================================================================
Cash in hand 1,117 918
With banks:
Current accounts 3,366 5,603
Deposit accounts 1,967,678 2,849,671
Savings accounts (including US $ 378,864; 2010: US $ 379,677) 1,892,115 1,112,227
3,864,276 3,968,419
========================================================================================== 21.1. Balances with banks include Rs 1,967.678 million (2010 : Rs 2,849.658 million) in respect of deposits placed in a 90-day interest-bearing account consequent to directives of the Ministry of Petroleum & Natural Resources on account of amounts withheld alongwith related interest earned thereon net of withholding tax, as referred to in note 10.1.21.2. Bank deposits of Rs. 0.394 million (2010: Rs 0.394 million) were under lien with bank against a bank guarantee issued on behalf of the Company. 21.3. Balances with banks include Rs 44.994 million (2010: Rs 48.331 million) in respect of security deposits received. 21.4. Balances with banks earned weighted average interest / mark-up @ 11.80% (2010: @ 11.28%) per annum. 22. SALES ==========================================================================================
2011 2010
==========================================================================================
Rs'000 Rs'000
==========================================================================================
Gross sales (excluding Naphtha export sales) 122,823,995 101,666,796
Naphtha export sales 19,231,839 10,321,605
Less: Sale proceeds of Naphtha exports related to third parties 2,226,915 1,130,996
17,004,924 9,190,609
139,828,919 110,857,405
Less: Duties, taxes and levies - note 22.1 23,440,549 22,673,379
116,388,370 88,184,026
========================================================================================== 22.1. Duties, taxes and levies==========================================================================================
2011 2010
==========================================================================================
Rs '000 Rs '000
==========================================================================================
Sales tax 17,359,325 13,216,039
Petroleum development levy 6,068,308 9,445,993
Custom duties and other levies 12,916 11,347
23,440,549 22,673,379
========================================================================================== 23. REIMBURSEMENT DUE FROM THE GOVERNMENT UNDER IMPORT PARITY PRICING FORMULAThis represents amount due from the Government of Pakistan on account of shortfall in ex-refinery prices of certain petroleum products under the import parity pricing formula. 24. COST OF SALES ==========================================================================================
2011 2010
==========================================================================================
Rs '000 Rs '000
==========================================================================================
Opening stock of semi-finished products 483,694 377,749
Crude oil consumed - note 24.1 114,444,741 86,477,494
Transportation and handling charges 1,611,479 1,229,486
Salaries, wages and other benefits 405,286 380,547
Printing and stationery 2,315 1,959
Chemicals consumed 274,115 289,007
Fuel and power 619,999 579,948
Rent, rates and taxes 31,244 6,851
Telephone 2,498 1,589
Professional charges for technical services (6,311) 5,562
Insurance 120,575 106,837
Repairs and maintenance (including stores
and spares consumed Rs 72.131 million; 2010 : Rs 44.741 million) 222,646 206,896
Staff transport and travelling 11,073 8,393
Cost of receptacles 20,272 14,580
Research and development 737 1,749
Depreciation 97,280 112,436
118,341,643 89,801,083
Closing stock of semi-finished products (899,348) (483,694)
117,442,295 89,317,389
Opening stock of finished products 3,673,137 3,049,434
Closing stock of finished products (6,275,579) (3,673,137)
(2,602,442) (623,703)
114,839,853 88,693,686
========================================================================================== 24.1. Crude oil consumed==========================================================================================
Stock at the beginning of the year 3,022,021 1,441,793
Purchases 115,120,369 88,057,722
118,142,390 89,499,515
Stock at the end of the year (3,697,649) (3,022,021)
114,444,741 86,477,494
==========================================================================================Certain crude purchases have been recorded based on provisional prices notified by the Government and may require adjustment in subsequent periods.25. ADMINISTRATION EXPENSES ==========================================================================================
2011 2010
==========================================================================================
Rs '000 Rs '000
==========================================================================================
Salaries, wages and other benefits 146,445 142,803
Board meeting fee 3,301 3,605
Staff transport, travelling
and entertainment 12,259 12,723
Telephone 1,937 1,730
Electricity, gas and water 11,145 10,652
Printing and stationery 4,277 3,573
Auditor's remuneration - note 25.1 1,669 1,746
Legal and professional charges 5,835 6,214
Repairs and maintenance 42,164 35,703
Subscription 7,641 7,028
Publicity 4,748 3,509
Scholarship scheme 1,650 1,694
Rent, rates and taxes 6,794 2,664
Insurance 473 987
Donations* 1,283 308
Training expenses 1,019 829
Depreciation 9,990 9,523
262,630 245,291
==========================================================================================* No director or his spouse had any interest in the donee institutions.25.1. Auditor's remuneration ==========================================================================================
2011 2010
==========================================================================================
Rs '000 Rs '000
==========================================================================================
Annual audit 1,000 1,000
Review of half yearly accounts, audit of consolidated
accounts, staff funds and special certifications 534 602
Out of pocket expenses 135 144
1,669 1,746
========================================================================================== 26. DISTRIBUTION COST==========================================================================================
Salaries, wages and other benefits 17,994 16,726
Staff transport, travelling and entertainment 732 553
Telephone 185 193
Electricity, gas, fuel and water 3,715 3,550
Printing and stationery 109 114
Repairs and maintenance including
packing and other stores consumed 3,426 2,686
Rent, rates and taxes 1,806 390
Legal and professional charges 109 320
Depreciation 261 302
28,337 24,834
========================================================================================== 27. FINANCE COST========================================================================================== Exchange loss 44,245 307,306 Interest on Workers' Profit Participation Fund - note 10.2 690 1,344 Bank and other charges 204 147 Interest on delayed payments 269 - 45,408 308,797 ==========================================================================================28. OTHER CHARGES ==========================================================================================
2011 2010
==========================================================================================
Rs '000 Rs '000
==========================================================================================
Employees' retirement benefits
Staff gratuity benefits 136,616 29,952
Staff pension benefits (53,919) 24,584
Less: Contribution to subsidiary
and associated companies (227) (2,305)
(54,146) 22,279
Contribution to employees old age benefits scheme 3,275 2,780
85,745 55,011
Provision for slow moving stores 6,600 11,300
Provision for doubtful debts 1,044 -
Workers' Profit Participation Fund 134,667 -
Workers' Welfare Fund 66,401 10,434
294,457 76,745
========================================================================================== 29. EMPLOYEES' DEFINED BENEFIT PLANSThe latest actuarial valuation of the employees' defined benefit plans was conducted at June 30' 2011 using the projected unit credit method. Details of the defined benefit plans are: ============================================================================================================================
Funded defined Funded defined Unfunded defined
benefit benefit benefit
pension plan gratuity plan gratuity plan
============================================================================================================================
2011 2010 2011 2010 2011 2010
============================================================================================================================
Rs '000 Rs '000 Rs '000
============================================================================================================================
a) The amounts recognised in the profit and loss account:
Current service cost 11,244 16,760 5,627 - 4,295 4,539
Interest cost 49,170 47,384 11,734 - 24,924 19,768
Expected return on plan assets (51,731) (45,385) (334) - - -
Past service cost (74,905) - 81,629 - - -
Recognition of loss / (gain) 12,303 5,825 - - 8,741 5,645
Net expense (write back) (53,919) 24,584 98,656 - 37,960 29,952
b) The amounts recognised in the balance sheet:
Fair value of plan assets 470,136 391,481 6,080 - - -
Present value of defined
benefit obligations (421,810) (476,121) (93,979) - (205,292) (201,210)
Surplus (unfunded) 48,326 (84,640) (87,899) - (205,292) (201,210)
Unrecognised past service cost (13,238) - 8,640 - - -
Unrecognised net loss / (gain) 34,154 104,575 463 - 46,891 61,188
Net asset / (liability) 69,242 19,935 (78,796) - (158,401) (140,022)
c) Movement in the present value of defined benefit obligation:
Present value of defined benefit
obligation as at July 1 476,121 387,196 - - 201,210 163,030
Plan amendment (88,142) - 90,269 - - -
Current service cost 11,244 16,760 5,627 - 4,295 4,539
Interest cost 49,170 47,384 11,734 - 24,924 19,769
Benefits paid (20,112) (16,751) (14,710) - (19,581) (10,061)
Transfer from POL 1,038 - 380 - - -
Actuarial loss / (gain) (7,509) 41,532 679 - (5,556) 23,933
Present value of defined benefit
obligation as at June 30 421,810 476,121 93,979 - 205,292 201,210
============================================================================================================================During FY11, the Company established the Attock Refinery Limited Gratuity Fund. Gratuity is deductible from pansion. Therefore, a new gratuity obligation has emerged while the pension obligation has been reduced. Recognition of past service cost depends on vesting. The change in the vested obligation is recognized immediately. The remainder is amortized over its remaining vesting period.============================================================================================================================
Funded defined Funded defined Unfunded defined
benefit benefit benefit
pension plan gratuity plan gratuity plan
============================================================================================================================
2011 2010 2011 2010 2011 2010
============================================================================================================================
Rs '000 Rs '000 Rs '000
============================================================================================================================
d) Changes in the fair value of plan assets:
Fair value of plan assets as at July 1 391,481 340,186 - - - -
Expected return 51,731 45,385 334 - - -
Contributions by employer 10,098 15,700 5,151 - - -
Benefits paid 20,112) (16,751) (14,710) - - -
Transfer of surplus 14,710) - 14,710 - - -
Transfer from POL 1,038 - 380 - - -
Actuarial gains / (loss) 50,610 6,961 215 - - -
Fair value of plan assets as at June 30 470,136 391,481 6,080 - - -
Actual return on plan assets 102,341 52,826 549 - - -
The Company expects to contribute Rs 20 million to its defined benefit
pension and gratuity plans during 2011 - 2012.
e) The major categories of plan assets:
Investment in equities 138,910 95,878 - - - -
Investment in mixed funds 72,584 63,444 - - - -
Cash 272,576 232,159 5,201 - - -
Due from POL 1,038 - 380 - - -
Transfers due (14,972) - 14,972 - - -
Benefits due - - (14,473) - - -
470,136 391,481 6,080 - - -
f) Significant actuarial assumptions at the balance sheet date:
Discount rate 14.00% 13.00% 14.00% - - -
Expected return on plan assets 14.00% 13.00% 14.00% - - -
Future salary increases 11.75% 10.85% 11.75% - - -
Future pension increases 8.50% 7.62% - - - -
============================================================================================================================
===========================================================================================================================
2011 2010 2009 2008 2007
===========================================================================================================================
Rs '000
===========================================================================================================================
g) Comparison for five years:
Funded Defined Benefit Pension Plan
Present value of defined benefit obligation (421,810) (476,121) (387,196) (321,136) (291,335)
Fair value of plan assets 470,136 391,481 340,186 385,053 359,485
Surplus / (deficit) 48,326 (84,640) (47,010) 63,917 68,150
Experience adjustments on plan liabilities - loss / (gain) (7,509) 41,532 22,993 (4,263) (609)
Experience adjustments on plan assets - gain / (loss) 50,610 6,961 (97,171) (14,913) 48,803
Funded Defined Benefit Gratuity Plan
(Established on July 1, 2010)
Present value of defined benefit obligation (93,979) - - - -
Fair value of plan assets 6,080 - - - -
Deficit (87,899) - - - -
Experience adjustments on plan liabilities - loss / (gain) 679 - - - -
Experience adjustments on plan assets - gain / (loss) 215 - - - -
Unfunded Defined Benefit Gratuity Plan
Present value of defined benefit obligation (205,293) (201,210) (163,030) (152,656) (121,894)
Fair value of plan assets - - - - -
Deficit (205,293) (201,210) (163,030) (152,656) (121,894)
Experience adjustments on plan liabilities - loss / (gain) (5,556) 23,933 (6,147) 23,729 17,982
=========================================================================================================================== 30. OTHER INCOME==========================================================================================
2011 2010
==========================================================================================
Rs Rs
==========================================================================================
Income from financial assets
Income on bank deposits 735,187 512,644
Interest on delayed payments 662,158 292,589
Exchange gain 9,731 2,557
1,407,076 807,790
Income from non - financial assets
Income from crude decanting 21,494 15,416
Income from crude desalter operations - note 30.1 4,761 954
Insurance agency commission 4,076 4,336
Rental income 38,230 34,340
Sale of scrap 8,510 7,804
Profit on disposal of fixed assets 2,243 4,161
Insurance claim - 23,907
Calibration charges 2,987 2,956
Handling and service charges 63,903 70,842
Penalties from carriage contractors 7,968 3,748
Miscellaneous 4,342 7,081
158,514 175,545
1,565,590 983,335
========================================================================================== 30.1. Income from crude desalter operations==========================================================================================
2011 2010
==========================================================================================
Rs '000 Rs '000
==========================================================================================
Income 57,813 54,945
Less: Operating costs
Salaries, wages and other benefits 1,616 1,529
Chemical consumed 9,028 8,543
Fuel and power 32,969 34,355
Repairs and maintenance 9,439 8,931
Depreciation - 633
53,052 53,991
4,761 954
========================================================================================== 31. PROVISION FOR TAXATION==========================================================================================
Current 1,368,900 270,900
Deferred 6,223 22,922
1,375,123 293,822
========================================================================================== 31.1. Relationship between tax expense and accounting profit==========================================================================================
Accounting profit / (loss) 2,492,279 (181,992)
Tax at normal rate 910,460 (63,697)
Income chargeable to tax at special rate 464,663 357,519
1,375,123 293,822
========================================================================================== 32. INCOME FROM NON-REFINERY OPERATIONS LESS APPLICABLE CHARGES AND TAXATION==========================================================================================
Dividend income from associated companies
National Refinery Limited 399,833 315,002
Attock Petroleum Limited 425,883 249,896
Attock Gen Limited 448,977 149,659
1,274,693 714,557
Less: Related charges
Workers' Profit Participation Fund 63,735 27,150
Workers' Welfare Fund 24,219 13,748
Taxation 118,349 71,456
206,303 112,354
1,068,390 602,203
========================================================================================== 33. OPERATING SEGMENTSThe financial statements have been prepared on the basis of a single reportable segment. Revenue from external customers for products of the Company are as follows: ==========================================================================================
2011 2010
==========================================================================================
Rs '000 Rs '000
==========================================================================================
High Speed Diesel 48,073,960 36,404,230
Jet Petroleum 16,682,923 11,012,404
Motor Gasoline 27,042,201 27,599,380
Furnace Fuel Oil 14,174,648 17,972,145
Naphtha 17,004,924 9,190,609
Others 16,859,267 8,678,637
139,837,923 110,857,405
Less: Duties, taxes and levies 23,440,549 22,673,379
116,397,374 88,184,026
==========================================================================================Revenue from four major customers of the Company constitute 88% (2010: 90%) of total revenue during the year.34. RELATED PARTY TRANSACTIONS Attock Oil Company Limited holds 56.32% (2010: 56.32%) shares of the Company at the year end. Therefore, all subsidiaries and associated undertakings of Attock Oil Company Limited are related parties of the Company. The related parties also comprise of directors, major shareholders, key management personnel, entities over which the directors are able to exercise significant influence on financial and operating policy decisions and employees' finds. Amount due from and due to these undertakings are shown under receivables and payables. The remuneration of Chief Executive, directors and executives is disclosed in note 35 to the financial statements. ==========================================================================================
2011 2010
==========================================================================================
Rs '000 Rs '000
==========================================================================================
Associated companies
Pakistan Oilfields Limited
Purchase of crude oil 11,810,143 8,236,393
Purchase of gas 46,589 25,520
Purchases of services 126,969 100,457
Sales of petroleum products 637,588 401,491
Sales of services 11,910 10,362
Attock Petroleum Limited
Sales of petroleum products 34,360,872 33,447,475
Sales of services 60,835 71,693
Purchase of petroleum products 3,203 3,577
Purchases of services 294,731 171,101
Interest income on delayed payments 661,844 292,589
National Refinery Limited
Purchases of services 104,512 74,765
Sales of services - 404
Attock Cement Pakistan Limited
Purchases of services 389 686
Attock Gen Limited
Sales of petroleum products 740 532
Sales of services 33,640 53,908
National Cleaner Production Centre
Purchases of services 1,853 257
Sales of services 4,777 4,691
Attock Information Technology Services (Private) Limited
Purchases of services 19,110 17,407
Sales of services 2,632 1,835
Holding Company
Attock Oil Company Limited
Purchase of crude oil 652,600 677,819
Purchases of services 25,450 5,775
Sales of services 382 1,372
Subsidiary company
Attock Hospital (Private) Limited
Purchases of services 34,039 28,169
Sales of services 7,983 28,305
Sales of petroleum products 260 212
Other related parties
Contribution to staff retirement benefits plans
Staff pension fund 10,098 15,700
Staff gratuity fund 5,151 -
Staff provident fund 17,580 15,311
Contribution to Workers' profit participation fund 198,402 27,150
========================================================================================== 35. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVESThe aggregate amounts charged in the accounts for remuneration, including benefits and perquisites, were as follows: =============================================================================================
Chief Executive Directors Executives
=============================================================================================
2011 2010 2011 2010 2011 2010
=============================================================================================
Rs '000
=============================================================================================
Managerial remuneration / honorarium 4,190 3,893 320 344 32,586 30,126
Bonus 941 1,142 - - 6,382 7,778
Company's contribution to provident,
pension and gratuity funds 1,091 1,070 - - 8,934 8,243
Housing and utilities 3,339 3,000 - - 33,743 29,259
Leave passage 519 519 - - 4,400 4,520
10,080 9,624 320 344 86,045 79,926
Less : charged to associated company 2,935 2,806 - - - -
7,145 6,818 320 344 86,045 79,926
No of person(s) 1 1 1 2 31 31
============================================================================================= 35.1. In addition, the Chief Executive and 18 (2010: 20) executives were provided with limited use of the company's cars. The Chief Executive and all executives were provided with medical facilities and 7 (2010: 8) executives were provided with unfurnished accommodation in Company owned bungalows. Limited residential telephone facility was also provided to the Chief Executive and 16 (2010: 17) executives.35.2. In addition, 4 non-executive directors, chief executive officer and 3 alternate directors of the Company were paid meeting fee aggregating Rs 3.301 million (2010 : Rs 3.605) based on actual attendance. 36. FINANCIAL INSTRUMENTS 36.1. Financial assets and liabilities ==========================================================================================
Loans and receivables
==========================================================================================
2011 2010
==========================================================================================
Rs '000 Rs '000
==========================================================================================
Financial assets :
Maturity upto one year
Trade debts 25,053,677 30,430,263
Loans, advances, deposits and other receivables 105,670 62,296
Cash and bank balances
Foreign currency - US $ 32,673 32,654
Local currency 3,831,603 3,935,765
Maturity after one year
Long term loans and deposits 14,653 9,925
29,038,276 34,470,903
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Other financial liabilities
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2011 2010
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Rs'000 Rs'000
==========================================================================================
Financial liabilities :
Maturity upto one year
Trade and other payables 38,876,136 44,196,974
Maturity after one year
Staff gratuity 158,401 140,022
39,034,537 44,336,996
==========================================================================================36.2 Credit quality of financial assetsThe credit quality of Company's financial assets of counterparties determined by The Pakistan Credit Rating Agency Limited (PACRA) and JCR - VIS Credit Rating Company Limited (JCR-VIS). The counterparties for which external credit ratings were not available have been assessed by reference to internal credit ratings determined based on their historical information for any defaults in meeting obligations. ==========================================================================================
2011 2010
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Rating Balance Balance
Rs '000 Rs '000
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Trade debts
Counterparties with external credit rating A 1+ 14,421,533 21,157,877
Counterparties without external credit rating
Due from associated companies 7,253,567 6,727,590
Others * 3,378,577 2,544,796
25,053,677 30,430,263
Loans, advances, deposits and other receivables
Counterparties without external credit rating 120,323 72,221
Bank Balances
Counterparties with external credit rating
A 1+ 3,562,691 3,966,638
A 1 7 502
A 2 300,461 46
A 3 - 315
3,863,159 3,967,501
==========================================================================================* These balances represent receivable from oil marketing companies and defence agencies.36.3. FINANCIAL RISK MANAGEMENT 36.3.1. Financial risk factors The Company's activities expose it to a variety of financial currency risk, credit risk, liquidity risk and market risk (including currency risk, interest rate risk and price risk). The Company's overall risk management policy focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company's financial performance. a) Credit risk Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company's credit risk is primarily attributable to its trade debts and placements with banks. The sales are essentially to oil marketing companies and reputable foreign customers. The Company's placements are with banks having satisfactory credit rating. Due to the high credit worthiness of counter parties the credit risk is considered minimal. At June 30, 2011, trade debts of Rs 17,384,820 thousand (2010: Rs 24,396,422 thousand) were past due but not impaired. The ageing analysis of these trade receivables is as follows: ==========================================================================================
2011 2010
==========================================================================================
Rs'000 Rs'000
==========================================================================================
0 to 6 months 11,385,323 13,064,184
6 to 12 months 5,954,553 7,332,114
Above 12 months 44,944 4,000,124
17,384,820 24,396,422
==========================================================================================b) Liquidity riskLiquidity risk reflects an enterprise's inability in raising funds to meet commitments. The Company follows an effective cash management and planning policy to ensure availability of funds and to take appropriate measures for new requirements. c) Market risk i) Currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Currency risk arises mainly from future commercial transactions or receivables and payables that exist due to transactions in foreign currencies. Financial assets include Rs 1,356 million (2010: Rs 845 million) and financial liabilities include Rs 12,640 million (2010: Rs 9,322 million) which were subject to currency risk. At June 30, 2011, if the currency had weakened / strengthened by 10% against US dollar with all other variables held constant, profit after tax for the year would have been Rs 733 million (2010 : Rs 551 million) lower/higher. ii) Interest rate risk Interest rate risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Financial assets and liabilities include balances of Rs 3,860 million (2010: Rs 3,962 million) and Rs 2,322 million (2010 : Rs 3,318 million) respectively, which are subject to interest rate risk. At June 30, 2011, if interest rates had been 1% higher / lower with all other variables held constant, profit after tax for the year would have been Rs 10 million (2010 : Rs 4 million) higher / lower. iii) Price risk Price risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. At the year end the Company is not exposed to price risk since there are no financial instruments, whose fair value or future cash flows will fluctuate because of changes in market prices. 36.3.2. Capital risk management The Company is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the return on capital and the level of dividend to ordinary shareholders. There was no change to the Company's approach to the capital management during the year and the company is not subject to externally imposed capital requirement. 37. EARNINGS / (LOSS) PER SHARE - BASIC AND DILUTED ==========================================================================================
2011 2010
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Rs'000 Rs'000
==========================================================================================
Profit / (loss) after taxation from refinery operations 1,117,156 (475,814)
Income from non-refinery operations less
applicable charges and taxation 1,068,390 602,203
2,185,546 126,389
Number of fully paid weighted average ordinary shares ('000) 85,293 85,293
Earnings / (loss) per share - Basic and diluted (Rs)
Refinery operations 13.10 (5.58)
Non-refinery operations 12.53 7.06
25.63 1.48
========================================================================================== 38. GENERAL38.1. Capacity and production Against the designed annual refining capacity of 14.700 million (2010: 14.700 million) US barrels the actual throughput during the year was 14.289 million (2010 : 13.493 million) US barrels. The actual throughput was lower than the annual refining capacity on account of shutdown of reformer during the month of June 2011. 38.2. Number of employees Total number of employees at the end of the year were 685 (2010: 683). 38.3. Non-adjusting event after the balance sheet date The Board of Directors in its meeting held on September 11, 2011 has purposed a cash dividend for the year ended June 30, 2011 @ Rs 2 per share (2010 @ Rs nil per share), amounting to Rs. 170,586 thousand held for approval of the members in the Annual General Meeting to be held on October 18, 2011. 38.4. Date of authorisation These financial statements have been authorised for issue by the Board of Directors of the Company on September 11, 2011. |