| Pakistan Oilfields Ltd - 2010 |
|
BALANCE SHEET As at June 30, 2010
====================================================================================
2010 2009
====================================================================================
Note Rupees ('000)
====================================================================================
SHARE CAPITAL AND RESERVES
Authorised capital 6 5,000,000 5,000,000
Issued, subscribed and paid up capital 6 2,365,459 2,365,459
REVENUE RESERVES 7 26,738,220 23,559,280
Fair value gain on available-for-sale investments 21,067 9,703
29,124,746 25,934,442
NON CURRENT LIABILITIES
Long term deposits 8 466,963 456,653
Deferred liabilities 9 6,398,264 5,564,589
6,865,227 6,021,242
CURRENT LIABILITIES AND PROVISIONS
Trade and other payables 10 2,287,213 2,292,210
Provision for income tax 1,045,053 476,704
3,332,266 2,768,914
CONTINGENCIES AND COMMITMENTS 11
39,322,239 34,724,598
FIXED ASSETS
Property, plant and equipment 12 4,095,007 4,012,534
Development and decommissioning costs 13 10,475,686 7,664,320
Exploration and evaluation assets 14 2,705,298 3,494,244
17,275,991 15,171,098
LONG TERM INVESTMENTS IN SUBSIDIARY
AND ASSOCIATED COMPANIES 15 9,615,603 9,615,603
OTHER LONG TERM INVESTMENTS 16 138,565 128,208
LONG TERM LOANS AND ADVANCES 17 12,939 10,379
CURRENT ASSETS
Stores and spares 18 2,641,060 2,793,760
Stock in trade 19 87,533 89,371
Trade debts 20 2,583,641 1,826,472
Advances, deposits,
prepayments and other receivables 21 649,686 1,144,027
Short term investments 22 2,276,865 -
Cash and bank balances 23 4,040,356 3,945,680
12,279,141 9,799,310
39,322,239 34,724,598
====================================================================================PROFIT AND LOSS ACCOUNT for the year ended June 30, 2010====================================================================================
2010 2009
====================================================================================
Note Rupees ('000)
====================================================================================
SALES 19,305,844 15,082,346
Sales tax (1,461,237) (1,035,526)
NET SALES 24 17,844,607 14,046,820
Operating costs 25 (4,082,487) (3,512,244)
Excise duty and development surcharge (172,174) (134,517)
Royalty (1,595,972) (1,206,106)
Amortisation of development
and decommissioning costs (1,107,538) (901,628)
(6,958,171) (5,754,495)
GROSS PROFIT 10,886,436 8,292,325
Exploration costs 26 (1,606,385) (2,057,509)
9,280,051 6,234,816
Administration expenses 27 (73,326) (46,852)
Finance cost 28 (283,746) (512,412)
Other charges 29 (709,163) (532,603)
(1,066,235) (1,091,867)
8,213,816 5,142,949
Other operating income 30 1,376,950 2,041,869
PROFIT BEFORE TAXATION 9,590,766 7,184,818
Provision for taxation 31 (2,154,000) (1,566,531)
PROFIT FOR THE YEAR 7,436,766 5,618,287
Earnings per share - Basic and diluted (Rupees) 36 31.44 23.75
====================================================================================STATEMENT OF COMPREHENSIVE INCOME for the year ended June 30, 2010====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Profit for the year 7,436,766 5,618,287
Other comprehensive income
Fair value gain/(loss) on available-for-sale
investments - net of tax 11,364 -
TOTAL COMPREHENSIVE INCOME 7,448,130 5,618,287
====================================================================================CASH FLOW STATEMENT for the year ended June 30, 2010====================================================================================
2010 2009
====================================================================================
Note Rupees ('000)
====================================================================================
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers 17,604,531 14,372,698
Operating and exploration costs paid (5,654,772) (6,830,571)
Royalty paid (1,503,566) (1,294,322)
Taxes paid (1,149,651) (758,309)
Cash provided by operating activities 9,296,542 5,489,496
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed assets additions (3,626,428) (6,138,686)
Proceeds from disposal of property, plant and equipment 21,936 30,701
Other investments - 443,423
Income on bank deposits and held-to-maturity investments 463,483 797,093
Dividend income received 371,037 534,874
Cash used in investing activities (2,769,972) (4,332,595)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend paid (4,247,951) (5,033,749)
Cash used in financing activities (4,247,951) (5,033,749)
EFFECT OF EXCHANGE RATE CHANGES 92,922 397,803
INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 2,371,541 (3,479,045)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 3,945,680 7,424,725
CASH AND CASH EQUIVALENTS AT END OF THE YEAR 38 6,317,221 3,945,680
====================================================================================STATEMENT OF CHANGES IN EQUITY for the year ended June 30, 2010=======================================================================================================================================
Revenue reserves Fair value
Share Insurance Investment Unappropriated gain/ (loss) Total
capital reserve reserve profit on available-
for-sale
investments
=======================================================================================================================================
Rupees ('000)
=======================================================================================================================================
Balance at June 30, 2008 1,971,216 200,000 - 23,181,549 17,151 25,369,916
Total comprehensive income for the year:
Profit for the year after taxation - - - 5,618,287 - 5,618,287
Other comprehensive income - - - - (7,448) (7,448)
- - - 5,618,287 (7,448) 5,610,839
Transfer to investment reserve - - 1,557,794 (1,557,794) - -
Transactions with owners:
Final dividend @ Rs 16 per share relating to the
year ended June 30, 2008 - - - (3,153,946) - (3,153,946)
Issue of Bonus Shares 394,243 - - (394,243) - -
Interim dividend @ Rs 8 per share relating to the
year ended June 30, 2009 - - - (1,892,367) - (1,892,367)
Total transactions with owners 394,243 - - (5,440,556) - (5,046,313)
Balance at June 30, 2009 2,365,459 200,000 1,557,794 21,801,486 9,703 25,934,442
Total comprehensive income for the year:
Profit for the year after taxation - - - 7,436,766 - 7,436,766
Other comprehensive income - - - - 11,364 11,364
- - - 7,436,766 11,364 7,448,130
Transactions with owners:
Final dividend @ Rs 10 per share relating to the
year ended June 30, 2009 - - - (2,365,459) - (2,365,459)
Interim dividend @ Rs 8 per share relating to the
year ended June 30, 2010 - - - (1,892,367) - (1,892,367)
Total transactions with owners - - - (4,257,826) - (4,257,826)
Balance at June 30, 2010 2,365,459 200,000 1,557,794 24,980,426 21,067 29,124,746
=======================================================================================================================================NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS for the year ended June 30, 20101. LEGAL STATUS AND OPERATIONS The Company is incorporated in Pakistan as a public limited company and its shares are quoted on Stock Exchanges in Pakistan. The registered office of the Company is situated at Morgah, Rawalpindi. The Company is principally engaged in exploration, drilling and production of crude oil and gas. Its activities also include marketing of liquefied petroleum gas under the brand name POLGAS and transmission of petroleum. The Company is a subsidiary of The Attock Oil Company Limited, UK and its ultimate parent is Bay View International Group S.A. 2. STATEMENT OF COMPLIANCE These are separate financial statements of the Company. These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984. In case requirements differ, the provisions or directives of the Companies Ordinance, 1984 shall prevail. 3. ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS 3.1. Changes in accounting policies and disclosures: (i). International Accounting Standard - 1 (Revised) (IAS 1 (Revised)), 'Presentation of Financial Statements' (effective for annual periods beginning on or after January 1, 2009). All 'non-owner changes in equity' are required to be presented separately in a performance statement. Companies can choose either to present one performance statement (statement of comprehensive income) or two statements (profit and loss account and statement of comprehensive income). The Company has adopted the two statements approach to reflect these changes. The adoption of IAS 1 (Revised) does not materially affect the computations of the results except some changes in presentation and disclosures. (ii). IFRS - 8, 'Operating Segments' IFRS - 8 replaces IAS - 14, 'Segment Reporting' (effective for annual periods beginning on or after January 1, 2009). The new standard requires a 'management approach', under which segment information is presented on the same basis as that used for internal reporting purposes. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions. The management has determined that the Company has a single reportable segment as the Board of Directors views the Company's operations as one reportable segment. The adoption of this standard has therefore only resulted in some additional entity-wide disclosures as given in note 32 to these financial statements. 3.2. Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Company: =====================================================================================================
Effective for periods
beginning on or after
=====================================================================================================
IFRS 2 Share-based Payment (Amendments) January 1, 2010
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations (Amendments) January 1, 2010
IFRS 8 Operating Segments (Amendments) January 1, 2010
IAS 1 Presentation of Financial Statements (Amendments) January 1, 2010
IAS 7 Statement of Cash Flows (Amendments) January 1, 2010
IAS 17 Leases (Amendments) January 1, 2010
IAS 24 Related Party Disclosures (Revised) January 1, 2011
IAS 32 Financial Instruments: Presentation (Amendments) February 1, 2010
IAS 36 Impairment of Assets (Amendments) January 1, 2010
IAS 39 Financial Instruments: Recognition and Measurement (Amendments) January 1, 2010
IFRIC 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements
and their Interaction (Amendments) January 1, 2011
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments July 1, 2010
=====================================================================================================Management anticipates that adoption of the above standards, amendments and interpretations in future periods will have no material impact on the Company's financial statements except for changes in presentation and disclosures.4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 4.1. Basis of measurement These financial statements have been prepared under the historical cost convention except as otherwise disclosed in the respective accounting policies notes. 4.2. Operating segments Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions. The management has determined that the Company has a single reportable segment as the Board of Directors views the Company's operations as one reportable segment. 4.3. 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 Pakistan Rupees, which is the Company's functional currency. 4.4. Foreign currency transactions and translation Transactions in foreign currencies are recorded at the rates of exchange ruling on the date of transaction. All assets and liabilities in foreign currencies are translated into rupees at the rates of exchange ruling on the date of the balance sheet. Exchange differences are dealt with through the profit and loss account. 4.5. Taxation Provision for current taxation is based on taxable income at applicable tax rates, adjusted for royalty payments to the Government. Deferred tax is accounted for on all temporary differences using the liability method. Deferred tax liability has been calculated at the estimated effective rate of 30% after taking into account availability of future depletion allowance and set off available in respect of royalty payments to the Government. 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 will be required to settle the obligation and a reliable estimate of the amount can be made. 4.7. Provision for decommissioning cost Provision for decommissioning cost is recognised in full for development wells and production facilities. The amount recognised is the present value of the estimated cost to abandon a well and remove production facilities. A corresponding intangible asset of an amount equivalent to the provision is also created and is amortized on unit of production basis over the total proved developed reserves of the field or @ 5% where the life of a field is more than 20 years. Most of these abandonment and removal events are many years in the future and the precise requirements that will have to be met when the abandonment and removal event actually occurs are uncertain. Abandonment and asset removal technologies and costs are constantly changing, as are political, environmental, safety and public expectations. Consequently, the timing and amount of future cash flows are subject to significant uncertainty. The timing and amount of future expenditures are reviewed annually, together with the interest rate to be used in discounting the cash flows. The effect of changes resulting from revisions to the estimate of the liability are incorporated on a prospective basis. The decommissioning cost has been discounted at a real discount rate of 5% p.a. (2009: 5%). The increase in provision due to unwinding of discount is recorded as finance cost. 4.8. Employee compensated absences The Company provides for compensated absences for all eligible employees in accordance with the rules of the Company. 4.9. Staff retirement benefits The Company operates the following staff retirement benefits plans: (i). A pension plan for its management staff and a gratuity plan for its management and non-management staff. The pension and gratuity plans are invested through approved trust funds. Both are defined benefit final salary plans. The pension and gratuity plans are complementary plans for management staff. Pension payable to management staff is reduced by an amount determined by the actuary equivalent to amount paid by the gratuity fund. Actuarial valuations are conducted annually using the "Projected Unit Credit Method" and the latest valuation was conducted as at June 30, 2010. Since both are complementary plans, combined details and valuation for pension plan and gratuity plan are given in note 35. Actuarial gains and losses are amortized over the expected remaining service of employees. (ii). Approved contributory provident funds for all employees for which contributions of Rs 18,114 thousand (2009:Rs 18,834 thousand) are charged to income for the year. 4.10. Trade and other payables Liabilities for trade and other payables are carried at cost which is the fair value of the consideration to be paid in future for goods and services received. 4.11. Contingent liabilities A contingent liability is disclosed when the Company has a possible obligation as a result of past events, whose existence will be confirmed only by the occurrence or non-occurrence, of one or more uncertain future events not wholly within the control of the Company; or the Company has a present legal or constructive obligation that arises from past events, but it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or the amount of the obligation cannot be measured with sufficient reliability. 4.12. Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses except for freehold land and capital work in progress, which are stated at cost. Depreciation is provided on straight line method at rates specified in note 12 to the financial statements. Depreciation is charged on additions from the month the asset become available for the intended use upto the month in which these are derecognized. 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 derecognition of assets are included in income currently. 4.13. Exploration assets/costs and development costs 4.13.1. Exploration and development costs are accounted for using the "Successful Efforts Method" of accounting. 4.13.2. Exploration costs All exploration costs, other than those relating to exploratory drilling, are charged to income as incurred. Exploratory drilling costs i.e. costs directly associated with drilling of an exploratory well, are initially capitalized pending determination of proven reserves. These costs are either charged to income if no proved reserves are found or transferred to development costs if proved reserves are found. All capitalized costs are subject to review for impairment at least once a year and any impairment determined is immediately charged to income. 4.13.3. Development costs Development costs are stated at cost less accumulated amortization and impairment losses. Expenditure on drilling of development wells, including unsuccessful development wells, is capitalized within development costs. Capitalized development costs are amortized on a unit of production basis over the total proved developed reserves of the field or @ 5% per annum where the life of the field is more than 20 years. 4.14. Investments in subsidiary and associated companies These investments are carried at cost less impairment losses. The profits and losses of the subsidiary and associated companies are carried forward in the financial statements of the subsidiary and associated companies and not dealt within or for the purpose of these financial statements except to the extent of dividend declared by the subsidiary and associated companies. Gain and loss on disposal of investment is included in income currently. 4.15. Stores and spares Stores and spares are valued at cost determined on moving average formula less allowance for obsolete items. Stores in transit are stated at invoice value plus other charges paid thereon. 4.16. Stock in trade Stocks are valued at the lower of average annual cost (including appropriate production overheads) and net realisable value. Net realisable value is determined on the basis of estimated selling price of the product in the ordinary course of business less costs necessary to be incurred for its sale. 4.17. Impairment of non-financial assets Assets that have an indefinite useful life, for example land, are not subject to depreciation and are tested annually for impairment. Assets that are subject to depreciation are reviewed for impairment at each balance sheet date, or wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount for which the asset's carrying amount exceeds its recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows. Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at each balance sheet date. Reversals of the impairment loss are restricted to the original cost of the asset. An impairment loss or reversal of impairment loss is recognised in income for the year. 4.18. 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 in case of financial liabilities when the obligation specified in the contract is discharged, cancelled or expired. All financial assets and liabilities other than at fair value through profit or loss assets and liabilities are initially recognised at fair value plus transaction costs. Financial assets and liabilities carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are charged to income for the year. These are subsequently measured at fair value, amortised cost or cost, as the case may be. Any gain or loss on derecognition of financial assets and financial liabilities is included in income for the year. 4.19. Financial assets The Company classifies its financial assets in the following categories: investments at fair value through profit or loss, held-to-maturity investments, loans and receivables, and available for sale investments. 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. (i).Investments 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 charged directly to income. The fair value of such investments is determined on the basis of prevailing market prices. (ii).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. (iii).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 'Long term loans and advances', 'Trade debts', 'Advances, deposits, prepayments 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 less allowance for any uncollectible amounts. An allowance for uncollectible amounts is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms. Significant financial difficulties of the counter party, probability that the counter party will enter bankruptcy or financial reorganization, and default or delinquency in payments (more than the credit period specified in sales agreements) are considered indicators that the amount is uncollectible. When the amount is uncollectible, it is written off against the allowance. (iv).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/ Net Asset Values (NAVs) quoted by the respective Asset Management Company. Adjustment arising from remeasurement of investment to fair value is recorded in the statement of comprehensive income and taken to income on disposal of the investment or when the investment is determined to be impaired. 4.20. Impairment of financial assets The Company assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a 'loss event') and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. 4.21. 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 setoff the recognised amounts and the Company intends to settle on a net basis, or realise the asset and settle the liability simultaneously. 4.22. Revenue recognition Revenue from sales is recognised on despatch of products to customers. Revenue from services is recognised when the related services are rendered. Effect of adjustment, if any, arising from revision in sale price is reflected as and when the prices are finalized with the customers and/or approved by the Government. Income on held-to-maturity investments and bank deposits is recognised on time proportion basis using the effective yield method. Dividend income is recognised when the right to receive dividend is established. 4.23. Joint ventures The Company's share in transactions and balances related to joint venture operations in which the Company has a working interest is accounted for on the basis of latest available audited accounts of the joint venture and where applicable, the cost statements received from the operator of the joint venture, for the intervening period up to the balance sheet date. 4.24. Cash and cash equivalents For the purpose of the cash flow statement, cash and cash equivalents comprise cash in hand, demand deposits and other short term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value, and finances under mark up arrangements. 4.25. Dividend distribution Dividend distribution to the shareholders is accounted for in the period in which dividend is declared. 5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS The preparation of financial statements in conformity with approved accounting standards requires the use of certain accounting estimates. It also requires management to exercise judgment in the process of applying the Company's accounting policies. Estimates and judgments are continually evaluated and are based on historical experience, including expectation of future events that are believed to be reasonable under the circumstances. The areas where various assumptions and estimates are significant to the Company's financial statements or where judgment was exercised in application of accounting policies are as follows: i).Estimate of recoverable amount of investment in associated companies - note 15 ii) Estimated crude oil/gas reserves used for amortisation of development and decommissioning costs - note 13 iii) Estimated useful life of property, plant and equipment - note 12 iv) Estimated costs and discount rate used for provision for decommissioning cost - note 9 v) Price adjustment related to crude oil sales - note 4.22 vi) Staff retirement benefits - note 35 vii) Provision for taxation - note 31 6. SHARE CAPITAL ====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Authorised capital
500,000,000 (2009: 500,000,000)
ordinary shares of Rs 10 each 5,000,000 5,000,000
Issued, subscribed and paid up capital
Shares issued for cash
20,200,000 (2009: 20,200,000) ordinary shares 202,000 202,000
Shares issued as fully paid bonus shares
At beginning of the year 2,163,459 1,769,216
Shares issued during the year - 394,243
216,345,920 (2009: 216,345,920) ordinary shares 2,163,459 2,163,459
236,545,920 (2009: 236,545,920)
ordinary shares of Rs 10 each 2,365,459 2,365,459
====================================================================================The Company is a subsidiary of The Attock Oil Company Limited which held 127,143,424 (2009: 127,143,424) ordinary shares at the year end.7. REVENUE RESERVES ====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Insurance reserve - note 7.1 200,000 200,000
Investment reserve - note 7.2 1,557,794 1,557,794
Unappropriated profit 24,980,426 21,801,486
26,738,220 23,559,280
====================================================================================7.1. The Company has set aside an insurance reserve for self insurance of assets which have not been insured and for deductibles against insurance claims.7.2. The Company has set aside gain on sale of investments as investment reserve to meet any future losses/impairment on investments. 8. LONG TERM DEPOSITS ====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Security deposits from
distributors against POLGAS equipment 429,150 419,759
Security deposits from distributors
against POLGAS distributorship and others 37,813 36,894
466,963 456,653
====================================================================================9. DEFERRED LIABILITIES====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Provision for deferred income tax - note 9.1 3,633,350 3,197,350
Provision for decommissioning cost - note 9.2 2,755,741 2,358,481
Provision for staff compensated absences 9,173 8,758
6,398,264 5,564,589
====================================================================================9.1. Provision for deferred income tax====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
The provision for deferred income tax represents:
Temporary differences between accounting and
tax depreciationmortisation 3,665,515 3,221,743
Provision for stores and spares (32,072) (24,300)
Provision for doubtful receivable (93) (93)
3,633,350 3,197,350
====================================================================================9.2. Provision for decommissioning cost====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Balance brought forward 2,358,481 1,920,312
Revision due to change in estimates (89,802) (124,765)
Provision during the year 205,182 56,979
Unwinding of discount - note 28 158,511 141,726
Exchange loss - note 28 123,369 364,229
2,755,741 2,358,481
====================================================================================10. TRADE AND OTHER PAYABLES====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Creditors 153,532 145,215
Due to related parties
Attock Hospital (Pvt) Limited 214 82
Attock Information Technology Services (Pvt) Limited 9,328 13,740
Capgas (Pvt) Limited 1,187 425
Staff Provident Fund - 639
Gratuity Fund - note 35.1 127,569 183,208
General Staff Provident Fund - 3,916
Workers' Profit Participation Fund - note 10.1 511,172 509,236
Joint venture partners
The Attock Oil Company Limited 25,815 20,075
Others 98,164 539,781
Accrued liabilities 543,178 394,797
Advance payment from customers 22,863 29,039
Royalty 216,984 124,578
Sales tax 100,591 29,053
Excise duty 7,837 7,251
Workers' Welfare Fund 414,778 247,501
Liability for staff compensated absences 8,821 8,369
Unclaimed dividends 45,180 35,305
2,287,213 2,292,210
====================================================================================10.1. Workers' Profit Participation Fund====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Balance at beginning of the year 509,236 534,890
Add: Amount allocated for the year 513,886 385,944
Less: Amount paid to the Fund's trustees 511,950 411,598
511,172 509,236
====================================================================================11. CONTINGENCIES AND COMMITMENTS(i) Tax demands raised in respect of tax years 2004, 2005 and 2006 consequent to difference in interpretation by tax authorities related to calculation of tax liability and depletion allowance, which has not been accepted by the Company and presently contested at the Income Tax Appellate Tribunal (ITAT) forum. ====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
446,857 446,857
==================================================================================== (ii) Capital expenditure commitments outstanding====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Share in Joint Ventures 7,167,820 4,278,912
Own fields 894,124 662,060
====================================================================================
====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
(iii) Guarantee's issued by banks
on behalf of the Company to third parties 40,175 40,175
====================================================================================12. PROPERTY, PLANT AND EQUIPMENT====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Operating assets - note 12.1 3,989,650 1,860,913
Capital work in progress - note 12.5 105,357 2,151,621
4,095,007 4,012,534
====================================================================================12.1. Operating assets=========================================================================================================================================================
Freehold Buildings Pipelines Plant and Gas Motor Chattels Computer and Total
land and pumps machinery Rigs cylinders vehicles software
Field plants development
=========================================================================================================================================================
Rupees ('000)
=========================================================================================================================================================
As at July 1, 2008
Cost 12,486 190,542 456,514 3,059,796 318,428 449,469 198,169 68,548 108,743 4,862,695
Accumulated depreciation - (89,290) (313,891) (1,675,376) (229,262) (317,627) (95,814) (47,534) (85,876) (2,854,670)
Net book value 12,486 101,252 142,623 1,384,420 89,166 131,842 102,355 21,014 22,867 2,008,025
Year ended June 30, 2009
Opening net book value 12,486 101,252 142,623 1,384,420 89,166 131,842 102,355 21,014 22,867 2,008,025
Additions 1,302 3,128 29,900 119,374 36,065 27,927 27,979 5,847 36,370 287,892 *
Disposals
Cost - (1,058) (734) (49,399) (31,642) (48,923) (7,885) (14,249) (8,871) (162,761) *
Depreciation - 934 704 45,333 20,814 37,514 6,851 13,043 8,703 133,896 *
- (124) (30) (4,066) (10,828) (11,409) (1,034) (1,206) (168) (28,865) *
Depreciation charge - (9,950) (26,368) (235,616) (22,667) (56,759) (32,976) (4,901) (16,902) (406,139)
Closing net book value 13,788 94,306 146,125 1,264,112 91,736 91,601 96,324 20,754 42,167 1,860,913
As at July 1, 2009
Cost 13,788 192,612 485,680 3,129,771 322,851 428,473 218,263 60,146 136,242 4,987,826
Accumulated depreciation - (98,306) (339,555) (1,865,659) (231,115) (336,872) (121,939) (39,392) (94,075) (3,126,913)
Net book value 13,788 94,306 146,125 1,264,112 91,736 91,601 96,324 20,754 42,167 1,860,913
Year ended June 30, 2010
Opening net book value 13,788 94,306 146,125 1,264,112 91,736 91,601 96,324 20,754 42,167 1,860,913
Additions 4,611 6,697 353,110 2,279,049 66,917 12,717 9,439 21,704 37,682 2,791,926 *
Disposals
Cost - - (590) (133,569) (2,441) (4,276) (4,933) - - (145,809) *
Depreciation - - 541 78,050 2,362 3,925 4,933 - - 89,811 *
- - (49) (55,519) (79) (351) - - - (55,998) *
Depreciation charge - (9,071) (101,705) (365,859) (28,491) (35,327) (33,195) (6,570) (26,973) (607,191)
Closing net book value 18,399 91,932 397,481 3,121,783 130,083 68,640 72,568 35,888 52,876 3,989,650
As at June 30, 2010
Cost 18,399 199,309 838,200 5,275,251 387,327 436,914 222,769 81,850 173,924 7,633,943
Accumulated depreciation - (107,377) (440,719) (2,153,468) (257,244) (368,274) (150,201) (45,962) (121,048) (3,644,293)
Net book value 18,399 91,932 397,481 3,121,783 130,083 68,640 72,568 35,888 52,876 3,989,650
Annual rate of Depreciation (%) - 5 10 10 10 10 20 12.5 25
========================================================================================================================================================= * Additions and disposals include inter-transfers of assets having book value of Rs 55,568 thousand; cost of Rs 133,812 thousand and depreciation of Rs 78,244 thousand (2009: book value of Rs 15,938 thousand; cost of Rs 77,614 thousand and depreciation of Rs 61,676 thousand).12.2. Cost and accumulated depreciation include: =====================================================================================================
Cost Accumulated depreciation
=====================================================================================================
2010 2009 2010 2009
=====================================================================================================
Rupees ('000) Rupees ('000)
=====================================================================================================
Share in Joint Ventures operated by the Company 1,190,378 1,182,325 721,342 651,507
Share in Joint Ventures operated by others
(assets not in possession of the Company) 3,394,642 931,559 636,862 373,957
4,585,020 2,113,884 1,358,204 1,025,464
=====================================================================================================12.3. The depreciation charge has been allocated as follows:====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Operating cost - note 25 479,082 303,630
Other income - Rig rental 31,418 26,151
- Crude transportation income 18,447 14,682
49,865 40,833
78,244 61,676
Inter-transfers 607,191 406,139
====================================================================================12.4. Property, plant and equipment disposals:The detail of property, plant and equipment disposals, having net book value in excess of Rs 50,000 is as follows: ========================================================================================================
Original Book Sale Mode of Particulars of
cost value proceeds disposal purchaser
========================================================================================================
Rupees ('000)
========================================================================================================
Plant and machinery - Rigs
Drill collars 1,184 79 5,561 Replacement cost Pindori Joint Venture
========================================================================================================12.5. Capital work in progress=====================================================================================
Buildings Plant and Computers Total
machinery/ and software
Pipelines development
and pumps
=====================================================================================
Rupees ('000)
=====================================================================================
Balance as at July 1, 2008 1,515 626,248 6,078 633,841
Additions during the year - 1,520,007 10,974 1,530,981
Transfers during the year - (13,201) - (13,201)
Balance as at June 30, 2009 1,515 2,133,054 17,052 2,151,621
Balance as at July 1, 2009 1,515 2,133,054 17,052 2,151,621
Additions during the year 1,125 225,034 3,687 229,846
Transfers during the year - (2,257,349) (18,761) (2,276,110)
Balance as at June 30, 2010 2,640 100,739 1,978 105,357
=====================================================================================12.6. Break up of capital work in progress at June 30 is as follows:====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Own fields 37,107 35,511
Share in Joint Ventures operated by the Company-Ikhlas 64,786 -
Share in Joint Ventures operated by others
MOL Pakistan Oil and Gas Company B.V.-TAL Block 143 2,114,086
Pakistan Petroleum Limited - Adhi 2,619 2,024
Oil and Gas Development Company Limited-Chak Naurang 702 -
105,357 2,151,621
====================================================================================13. DEVELOPMENT AND DECOMMISSIONING COSTS====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Development cost
Balance brought forward 7,436,988 6,105,966
Additions during the year 857,764 1,906,905
Successful wells cost transferred from
exploration and evaluation assets - note 14 2,945,760 291,273
11,240,512 8,304,144
Amortisation for the year (1,064,418) (867,156)
10,176,094 7,436,988
Decommissioning cost
Balance brought forward 227,332 329,590
Revision due to change in estimates (89,802) (124,765)
Additions during the year 205,182 56,979
342,712 261,804
Amortisation for the year (43,120) (34,472)
299,592 227,332
10,475,686 7,664,320
====================================================================================14. EXPLORATION AND EVALUATION ASSETS====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Balance brought forward 3,494,244 1,281,794
Additions during the year 3,004,169 3,373,607
6,498,413 4,655,401
Successful wells cost transferred to
development cost - note 13 (2,945,760) (291,273)
Dry and abandoned wells cost charged to the
profit and loss account - note 26 (847,355) (869,884)
2,705,298 3,494,244
====================================================================================14.1. Break up of exploration and evaluation assets at June 30 is as follows:===========================================================================================
2010 2009
===========================================================================================
Rupees ('000)
===========================================================================================
Own fields - Meyal Uchri - 1,929,430
Share in Joint Ventures operated by the Company - Kirthar Sout - 24,921
- Ikhlas 1,893,493 702,025
Share in Joint Ventures operated by others
MOL Pakistan Oil and - TAL Block 787,649 588,478
Gas Company B.V. - Margala 8,308 -
Oil and Gas Development - Gurgalot - 249,390
Company Limited - Chak Naurang 15,848 -
2,705,298 3,494,244
===========================================================================================15. LONG TERM INVESTMENTS IN SUBSIDIARY AND ASSOCIATED COMPANIES - AT COST==================================================================================================================
2010 2009
==================================================================================================================
Percentage Amount Percentage Amount
holding Rs ('000) holding Rs ('000)
==================================================================================================================
Subsidiary company
Unquoted
Capgas (Private) Limited
344,250 (2009: 344,250) fully paid ordinary shares including
191,250 (2009: 191,250) bonus shares of Rs 10 each 51 1,530 51 1,530
Associated companies
Quoted
National Refinery Limited - note 15.1
19,991,640 (2009: 19,991,640) fully paid ordinary shares including
3,331,940 (2009: 3,331,940) bonus shares of Rs 10 each
Quoted market value as at June 30, 2010:
Rs 3,655,471 thousand (2009: Rs 4,398,561 thousand) 25 8,046,635 25 8,046,635
Attock Petroleum Limited (APL) - 15.2
4,042,080 (2009: 4,042,080) fully paid ordinary shares including
673,680 (2009: 673,680) bonus shares of Rs 10 each
Quoted market value as at June 30, 2010:
Rs 1,171,193 thousand; (2009: Rs 1,287,443 thousand) 7 1,562,938 7 1,562,938
Unquoted
Attock Information Technology Services (Pvt)
Limited (AITSL)
450,000 (2009: 450,000) fully paid
ordinary shares of Rs 10 each 10 4,500 10 4,500
9,615,603 9,615,603
==================================================================================================================All associated and subsidiary companies are incorporated in Pakistan. Although the Company has less than 20 percent shareholding in APL and AITSL, these have been treated as associates since the Company has representation on their Board of Directors.15.1. Based on a valuation analysis carried out by an external investment advisor engaged by the Company, the recoverable amount of investment in National Refinery Limited 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 a gross profit margin of 3.91% (2009: 5.38%), a terminal growth rate of 3% (2009: 3%) and a capital asset pricing model based discount rate of 17.90% (2009:18.05%). 15.2. Based on a valuation analysis carried out by the Company, the recoverable amount of investment in Attock Petroleum Limited 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 a gross profit margin of 4.58% (2009: 5.16%), a terminal growth rate of 3% (2009: 4.5%) and a capital asset pricing model based discount rate of 17.90% (2009: 18.05%). 16. OTHER LONG TERM INVESTMENTS ====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Held-to-maturity investments - at cost
Pakistan Investment Bonds - note 16.1 53,022 54,029
Available-for-sale investments - at fair value - note 16.1 85,543 74,179
138,565 128,208
====================================================================================16.1.================================================================================
Final Mark up
================================================================================
Maturity date %
================================================================================
Pakistan Investment Bonds 30-06-2013 9.00 53,022 54,029
================================================================================The fair value of held-to-maturity investments at June 30, 2010 was Rs 48,494 thousand (2009: 49,312 thousand).16.2. Available-for-sale investments - at fair value ====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Balance at the beginning of the year 74,179 438,997
Additions during the year 100,000 -
Deletions during the year (100,000) (323,120)
Impairment loss recognized during the year - (34,250)
Fair value gain/(loss) transferred
to statement of comprehensive income 11,364 (7,448)
Balance at the end of the year 85,543 74,179
====================================================================================16.2.1. Available-for-sale investments at June 30 include the following:=======================================================================================================
2010 2009
=======================================================================================================
Number of Cost less Adjustment Fair Fair
shares/units impairment arising from value value
loss remeasurement
to fair value
=======================================================================================================
Rupees ('000)
=======================================================================================================
Listed securities:
Atlas Fund of Funds 5,250,000 15,750 5,250 21,000 15,750
Pakistan Telecommunication Company Limited 250,000 9,462 (5,012) 4,450 4,310
Hub Power Company Limited 250,000 9,263 (1,273) 7,990 6,773
Oil and Gas Development Company Limited 29 1 3 4 2
Unlisted securities:
Atlas Asset Management Company 92,251 30,000 22,099 52,099 47,344
64,476 21,067 85,543 74,179
=======================================================================================================16.2.2. The fair value of listed securities is based on quoted market prices at the balance sheet date. The quoted market price used is the current bid price. The fair values of unlisted securities are the Net Asset Values (NAV) as at June 30, 2010 as quoted by the respective Asset Management Company.17. LONG TERM LOANS AND ADVANCES, CONSIDERED GOOD ====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Executives - note 17.1 10,767 7,339
Other employees 22,897 20,161
33,664 27,500
Less: Amount due within twelve months, shown
under current loans and advances - note 21 20,725 17,121
12,939 10,379
====================================================================================17.1. Movement in loans to Executives===========================================================================
Balance as at Disbursements Repayments Balance as at
June 30, 2009 June 30, 2010
===========================================================================
Rupees ('000)
===========================================================================
Executives 7,339 15,349 11,921 10,767
===========================================================================17.2. Loans and advances to employees are for general purpose and for house rent advance which are recoverable in upto 60 and 36 equal monthly installments respectively and are secured by an amount due to the employee against provident fund. These loans and advances are interest free.These do not include any amount receivable from the Chief Executive and Directors. The aggregate maximum amount due from the Chief Executive and Executives at the end of any month during the year was Rs Nil and Rs 11,662 thousand (2009: Rs 762 and Rs 8,884 thousand) respectively.18. STORES AND SPARES ====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Stores and spares - note 18.1 2,747,966 2,874,760
Less: Provision for slow moving items - note 18.2 106,906 81,000
2,641,060 2,793,760
====================================================================================18.1. Stores and spares include:====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Share in Joint Ventures operated by the Company 125,719 133,622
Share in Joint Ventures operated by others
(assets not in possession of the Company) 706,581 479,880
832,300 613,502
====================================================================================18.2. Provision for slow moving items====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Balance brought forward 81,000 81,000
Provision for the year 26,000 -
Stores written off during the year (94) -
106,906 81,000
====================================================================================19. STOCK IN TRADE====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Crude oil and other products 87,533 89,371
====================================================================================These include Rs 18,699 thousand (2009: Rs 15,192 thousand) being the Company's share in Joint Ventures operated by the Company.20. TRADE DEBTS - CONSIDERED GOOD ====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Due from related parties - note 20.1 1,192,422 1,245,754
Others 1,391,219 580,718
2,583,641 1,826,472
====================================================================================20.1. Due from related parties====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Associated companies
Attock Refinery Limited 1,179,743 1,233,559
Attock Petroleum Limited 12,679 12,195
1,192,422 1,245,754
====================================================================================21. ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Loans and advances - considered good
Employees - note 17 20,725 17,121
Suppliers 36,807 5,058
57,532 22,179
Trade deposits and short term prepayments
Deposits 55,548 25,991
Short-term prepayments 136,659 199,439
192,207 225,430
Interest income accrued 12,861 46,946
Other receivables
Joint venture partners 145,244 326,555
Due from related parties
Parent company
The Attock Oil Company Limited 77,223 317,720
Associated company
National Refinery Limited 12,566 14,893
Staff Provident Fund 2,708 -
General Staff Provident Fund 386 -
Management Staff Pension Fund - note 35.1 84,155 154,619
Other receivables (net of provision for doubtful
receivable Rs 310 thousand (2009: Rs 310 thousand)) 64,804 35,685
387,086 849,472
649,686 1,144,027
====================================================================================22. SHORT TERM INVESTMENTS====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Held to maturity Investments:
Treasury bills maturing within
next three months - note 22.1 2,276,865 -
====================================================================================22.1. The effective interest on Treasury bills ranges between 12.01% to 12.10% per annum.23. CASH AND BANK BALANCES ====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Bank balance on
Short term deposits 1,790,214 3,265,250
Interest/mark-up bearing saving accounts 2,210,724 594,940
Current accounts 36,021 82,545
4,036,959 3,942,735
Cash in hand 3,397 2,945
4,040,356 3,945,680
====================================================================================Balance with banks include foreign currency balances of US $ 21,114 thousand (2009: US $ 10,828 thousand). The balances in saving accounts and short term deposits earned interest/mark-up ranging from 0.7% to 12.5% (2009: 4.89% to 19%).24. NET SALES ====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Crude oil 8,237,631 7,052,369
Gas 5,587,224 3,733,645
POLGAS - Refill of cylinders 3,783,745 2,984,285
Solvent oil 223,672 227,500
Sulphur 11,568 45,278
Liquefied petroleum gas 767 3,743
17,844,607 14,046,820
====================================================================================25. OPERATING COSTS====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Operating cost - Own fields 311,338 249,434
- Share in Joint Ventures 1,054,973 1,105,709
Well work over 210,880 514,602
POLGAS -Cost of gas/LPG, carriage etc 1,953,602 1,316,394
Head office and insurance charges 54,704 34,875
Pumping and transportation cost 16,070 19,360
Depreciation - note 12.3 479,082 303,630
4,080,649 3,544,004
Opening stock of crude oil and other products 89,371 57,611
Closing stock of crude oil and other products (87,533) (89,371)
4,082,487 3,512,244
====================================================================================26. EXPLORATION COSTS=========================================================================================
2010 2009
=========================================================================================
Rupees ('000)
=========================================================================================
Geological and geophysical cost
Own fields (51) 107,637
Share in Joint Ventures operated by the Company - Kirthar South 33,732 48,316
- Hyderabad - 67
- Ikhlas 82,045 272,559
- Pindori 6,757 282
- DG Khan 12,412 -
- Rajanpur 12,647 -
Share in Joint Ventures operated by the others
Pakistan Petroleum Limited - Adhi - 34,761
Orient Petroleum International Inc. - Dhurnal 255 7,488
MOL Pakistan Oil and - TAL Block 541,958 85,329
Gas Company B.V. - Margala Block 28,641 292,590
- Margala North Block 20,452 294,361
Oil and Gas Development - Kotra 6,832 20,470
Company Limited - Gurgalot 10,023 12,228
- Chak Naurang 3,327 11,516
ENI Pakistan Limited - Manchar Block - 21
759,030 1,187,625
Dry and abandoned wells cost - note 14
Share in Joint Ventures operated by the Company - Kirthar South 25,164 854,354
- Ikhlas - 15,530
Share in Joint Ventures operated by others
MOL Pakistan Oil and Gas Company B.V. - TAL Block 331,462 -
Oil and Gas Development Company Limited - Gurgalot 490,729 -
847,355 869,884
1,606,385 2,057,509
=========================================================================================27. ADMINISTRATION EXPENSES====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Establishment charges 116,805 67,996
Telephone and telex 1,035 907
Medical expenses 5,110 3,900
Printing, stationery and publications 8,047 5,747
Insurance 3,174 2,538
Travelling expenses 4,813 3,343
Motor vehicle running expenses 6,533 5,929
Rent, repairs and maintenance 8,146 6,654
Auditor's remuneration - note 27.1 4,079 3,574
Legal and professional charges 2,015 1,591
Stock exchange and CDC fee 1,572 1,681
Computer support and maintenance charges 11,206 6,561
Donations * 300 3,020
Other expenses 1,145 -
173,980 113,441
Less: Amount allocated to field expenses 100,654 66,589
73,326 46,852
==================================================================================== * No director or his spouse had any interest in the donee institutions.27.1. Auditor's remuneration: ====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Statutory audit 1,000 750
Review of half yearly accounts, audit of consolidated
accounts, staff funds, special certifications 799 699
Tax services 2,100 2,000
Out of pocket expenses 180 125
4,079 3,574
====================================================================================28. FINANCE COST====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Provision for decommissioning cost - note 9.2
- Unwinding of discount 158,511 141,726
- Exchange loss 123,369 364,229
Banks' commission and charges 1,866 6,457
283,746 512,412
====================================================================================29. OTHER CHARGES====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Workers' profit participation fund 513,886 385,944
Workers' welfare fund 195,277 146,659
709,163 532,603
====================================================================================30. OTHER OPERATING INCOME====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Income from financial assets
Income on bank deposits 358,533 770,492
Income on held-to-maturity investments 69,858 6,978
Exchange gain on financial assets 92,922 397,803
Dividend on available-for-sale investments 1,500 4,188
Profit on disposal of available-for-sale investments 694 15,014
Impairment loss on available-for-sale investments - (34,250)
Income from investments in subsidiary and associated companies
Dividend from subsidiary and
associated companies-note 30.1 369,537 530,686
Other income
Rental income (net of related expenses
Rs 21,637 thousand; 2009: Rs 8,684 thousand) 154,245 104,371
Rig rental (net of related expenses Rs 152,219
thousand; 2009: Rs 137,177 thousand) 137,893 95,750
Crude oil/gas transportation income
(net of related expenses Rs 40,429 thousand;
2009: Rs 36,293 thousand) 119,550 100,972
Gas processing fee 39,665 20,812
Profit on sale of property, plant and equipment 21,506 17,774
Sale of stores and scrap 6,595 1,640
Other 4,452 9,639
1,376,950 2,041,869
====================================================================================30.1. Dividend from subsidiary and associated companies====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Subsidiary company
Capgas (Pvt) Limited 18,590 23,064
Associated companies
National Refinery Limited 249,895 399,833
Attock Petroleum Limited 101,052 107,789
369,537 530,686
====================================================================================31. PROVISION FOR TAXATION====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Current
- for the year 1,460,000 531,531
- for prior period 258,000 -
1,718,000 531,531
Deferred
- for the year 773,000 1,035,000
- for prior period (337,000) -
436,000 1,035,000
2,154,000 1,566,531
====================================================================================31.1. Reconciliation of tax charge for the year====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Accounting profit 9,590,766 7,184,818
* Tax at applicable tax rate of 50.54% (2009: 50.20%) 4,847,173 3,606,779
Tax effect of income that is not
taxable or taxable at reduced rates (198,729) (684,986)
Tax effect of depletion allowance and royalty payments (2,415,444) (1,355,262)
Tax effect of prior year (79,000) -
Tax charge for the year 2,154,000 1,566,531
==================================================================================== * The applicable tax rate is the weighted average of tax rates applicable to income from oil and gas concessions and income from other activities.32. OPERATING SEGMENTS The financial statements have been prepared on the basis of a single reportable segment. Revenue from external customers for products of the Company is disclosed in note 24. Revenue from two major customers of the Company constitutes 74% of the total revenue during the year ended June 30, 2010 (June 30, 2009: 73%). 33. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES The aggregate amounts charged in these financial statement in respect of remuneration, including benefits and perquisites to the chief executive, directors and executives of the company are given below: ========================================================================================
Chief Chief Executive Executives
========================================================================================
2010 2009 2010 2009
========================================================================================
Rupees ('000) Rupees ('000)
========================================================================================
Managerial remuneration 4,640 4,184 55,155 49,883
Bonus 2,091 1,741 19,243 16,132
Housing, utility and conveyance 3,428 3,194 51,039 48,711
Company's contribution to
pension, gratuity and provident fund 1,816 1,263 22,861 16,478
Leave passage 728 532 7,870 6,036
Other benefits 1,540 1,477 17,022 13,297
14,243 12,391 173,190 150,537
No. of persons, including
those who worked part of the year 1 1 59 53
========================================================================================In addition to remuneration, the Chairman, the Chief Executive and certain executives were provided with use of the Company's cars and residential telephone facilities. The Company also provides medical facilities to its staff.An honorarium of Rs 319 thousand (2009: Rs 919 thousand) was paid to one non-executive director (2009: two non-executive directors). In addition seven directors and the Chief Executive of the Company were paid meeting fee aggregating Rs 3,560 thousand (2009: Rs Nil) based on actual attendance. Remuneration of executives are net of charge to subsidiary and associated companies amounting to Rs 10,424 thousand (2009: Rs 8,310 thousand). 34. FINANCIAL INSTRUMENTS 34.1. Financial assets and liabilities =========================================================================================================
Held to maturity Loans and Available-for-sale
investments receivables investments Total
=========================================================================================================
Rupees ('000)
=========================================================================================================
June 30, 2010
Financial Assets
Maturity up to one year
Trade debts - 2,583,641 - 2,583,641
Advances , deposits and other receivables - 476,220 - 476,220
Short term investments 2,276,865 - - 2,276,865
Cash and bank balances - 4,040,356 - 4,040,356
Maturity after one year
Other long term investments 53,022 - 85,543 138,565
Long term loans and advances - 12,939 - 12,939
2,329,887 7,113,156 85,543 9,528,586
=========================================================================================================
Financial Liabilities Other financial Total
liabilities
=========================================================================================================
Rupees ('000)
=========================================================================================================
Maturity up to one year
Trade and other payables 2,264,350 2,264,350
Maturity after one year
Long term deposits 466,963 466,963
Provision for decommissioning cost 2,755,741 2,755,741
Provision for staff compensated absences 9,173 9,173
5,496,227 5,496,227
=========================================================================================================
Held to maturity Loans and Available-for-sale
investments receivables investments Total
=========================================================================================================
Rupees ('000)
=========================================================================================================
June 30, 2009
Financial Assets
Maturity up to one year
Trade debts - 1,826,472 - 1,826,472
Advances , deposits and other receivables - 939,530 - 939,530
Cash and bank balances - 3,945,680 - 3,945,680
Maturity after one year
Other long term investments 54,029 - 74,179 128,208
Long term loans and advances 10,379 - 10,379 -
54,029 6,722,061 74,179 6,850,269
=========================================================================================================
Financial Liabilities Other financial Total
liabilities
=========================================================================================================
Rupees ('000)
=========================================================================================================
Maturity up to one year
Trade and other payables 2,263,171 2,263,171
Maturity after one year
Long term deposits 456,653 456,653
Provision for decommissioning cost 2,358,481 2,358,481
Provision for staff compensated absences 8,758 8,758
5,087,063 5,087,063
=========================================================================================================34.2. Credit quality of financial assetsThe credit quality of Company's financial assets have been assessed below by reference to external credit ratings of counterparties determined by The Pakistan Credit Rating Agency Limited (PACRA) and JCR VIS Credit Rating Company Limited. 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. =============================================================================================================
2010 2009
Rating Balance Balance
=============================================================================================================
Held-to-maturity investments Rs ('000) Rs ('000)
=============================================================================================================
Counterparties without external credit rating
Securities issued/supported by Government of Pakistan 2,329,887 54,029
Available for sale investments
Counterparties with external credit rating 5-Star 21,000 15,750
A M 3 + 52,099 47,344
A A A 4 2
A A + 7,990 -
Counterparties without external credit rating
Equity securities with no defaults in the past 4,450 11,083
85,543 74,179
Trade debts
Counterparties with external credit rating A 1 + 2,521,254 1,789,489
A 1 11,973 -
Counterparties without external credit rating
Existing customers/joint venture partners with no default in the past 50,414 36,983
2,583,641 1,826,472
=============================================================================================================
2010 2009
Rating Balance Balance
=============================================================================================================
Rs ('000) Rs ('000)
=============================================================================================================
Advances, deposits and other receivables
Counterparties with external credit rating A 1 + 73,852 164,021
A 1 6,375 4,953
Counterparties without external credit rating
Existing customers/joint venture partners with no default in the past 147,378 253,930
Receivable from employees/employee benefit plans 107,974 171,740
Receivable from parent company 77,223 317,720
Others 63,418 27,166
476,220 939,530
Bank balances
Counterparties with external credit rating A 1 + 4,034,289 3,939,077
A 1 213 2,219
A 2 2,457 -
A 2 (RW) - 124
A 3 - 1,315
4,036,959 3,942,735
Long term loans and advances
Counterparties without external credit rating
Receivable from employees 12,939 10,379
=============================================================================================================34.3. FINANCIAL RISK MANAGEMENT34.3.1. Financial risk factors The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including currency risk, interest rates 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. As of June 30, 2010, trade debts of Rs 250,747 thousand (2009: Rs 436,169 thousand) were past due but not impaired. The ageing analysis of these trade receivables is as follows: ====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Up to 3 months 16,520 100,882
3 to 6 months 4,478 2,475
6 to 12 months 8,361 70,226
Above 12 months 221,388 262,586
250,747 436,169
==================================================================================== (b) Liquidity riskLiquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Company manages liquidity risk by maintaining sufficient cash and marketable securities. At June 30, 2010, the Company had financial assets of Rs 9,528,586 thousand (2009: Rs 6,850,269 thousand). The table below analyses the Company's financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet to the maturity date. The amounts disclosed in the table are undiscounted cash flows which have been inflated using appropriate inflation rate, where applicable . =================================================================================
Less than 1 Between 1
year to 5 years Over 5 years
=================================================================================
Rupees' 000
=================================================================================
At June 30, 2010
Long term deposits - 466,963 -
Provision for decommissioning cost - 2,130,436 6,231,054
Provision for staff compensated absences - 9,173 -
Trade and other payables 2,264,350 - -
At June 30, 2009
Long term deposits - 456,653 -
Provision for decommissioning cost - 2,238,732 3,160,209
Provision for staff compensated absences - 8,758 -
Trade and other payables 2,263,171 - -
================================================================================= (c).Market risk(i).Currency risk Foreign exchange 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. Foreign exchange risk arises mainly from future commercial transactions or receivables and payables that exist due to transactions in foreign currencies. The Company is exposed to currency risk arising from currency exposure with respect to the US dollar. Currently foreign exchange risk is restricted to trade debts, bank balances, receivable from/payable to joint venture partners, payable to suppliers and provision for decommissioning cost. Financial assets include Rs 2,990,639 thousand (2009: Rs 2,759,979 thousand) and financial liabilities include Rs 3,078,642 thousand (2009: Rs 3,085,203 thousand) which were subject to currency risk. If exchange rate had been 10% higher/lower with all other variables held constant, profit after tax for the year would have been Rs 5,720 thousand (2009: Rs 21,139 thousand) 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. The Company has no significant long term interest bearing financial assets and liabilities whose fair value or future cash flows will fluctuate because of changes in market interest rates. Financial assets include balances of Rs 6,330,825 thousand (2009: Rs 3,914,219 thousand) which are subject to interest rate risk. Applicable interest rates for financial assets have been indicated in respective notes. If interest rates had been 1% higher/lower with all other variables held constant, profit after tax for the year would have been Rs 40,697 thousand (2009: Rs 36,901 thousand) higher/lower, mainly as a result of higher/lower interest income from these financial assets. (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. The Company is exposed to equity securities price risk because of investments held by the Company and classified on the balance sheet as available for sale. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the investment policy of the Company. Available for sale investments include Rs 85,543 thousand (2009: Rs 74,179 thousand) which were subject to price risk. 34.3.2. Capital risk management The Company's objectives when managing capital are to ensure the Company's ability not only to continue as a going concern but also to meet its requirements for expansion and enhancement of its business, maximize return of shareholders and optimize benefits for other stakeholders to maintain an optimal capital structure and to reduce the cost of capital. In order to achieve the above objectives, the Company may adjust the amount of dividends paid to shareholders, issue new shares through bonus or right issue or sell assets to reduce debts or raise debts, if required. Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. The gearing ratio of the Company has always been low since its inception and the Company has mostly financed its projects and business expansions through equity financing. Further, the Company is not subject to externally imposed capital requirements. 34.3.3. Fair value of financial assets and liabilities Financial assets and liabilities are stated at fair value except for investment in held-to-maturity investments which are stated at amortised cost. 35. STAFF RETIREMENT BENEFITS The details of actuarial valuation of defined benefit funded plans carried out as at year end are as follows: 35.1. The amounts recognized in the balance sheet are as follows: ====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Present value of defined benefit obligations 887,722 760,087
Fair value of plan assets (667,011) (590,119)
220,711 169,968
Unrecognized actuarial gains (losses) (177,297) (141,379)
Net liability 43,414 28,589
Amounts in the balance sheet:
Liability - Gratuity Fund - note 10 127,569 183,208
Asset - Management Staff Pension Fund - note 21 (84,155) (154,619)
Net liability 43,414 28,589
====================================================================================35.2. The amounts recognized in the profit and loss account are as follows:====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Current service cost 32,474 27,572
Interest cost 91,830 81,479
Expected return on plan assets (69,259) (73,264)
Past service cost - 4,010
Net actuarial losses recognized during the year 10,929 2,175
65,974 41,972
====================================================================================35.3.====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Actual return on plan assets 78,175 13,663
====================================================================================The expected return on plan assets is based on the market expectations and depends upon the asset portfolio of the funds at the beginning of the year. Expected yield on fixed interest investments is based on gross redemption yields as at the balance sheet date.35.4. Changes in the present value of defined benefit obligation are as follows: ====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Opening defined benefit obligation 760,087 640,154
Current service cost 32,474 27,572
Interest cost 91,830 81,479
Past service cost - 4,010
Actuarial losses 55,763 58,936
Benefits paid (52,432) (52,064)
Closing defined benefit obligation 887,722 760,087
====================================================================================35.5. Changes in fair value of plan assets are as follows:====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Opening fair value of plan assets 590,119 537,513
Expected return 69,259 73,264
Actuarial gain/(losses) 8,916 (59,601)
Contribution by employer 51,149 91,007
Benefits paid (52,432) (52,064)
Closing fair value of plan assets 667,011 590,119
====================================================================================The Company expects to contribute Rs 54 million to its defined benefit plans during the year ending June 30, 2011.35.6. The major categories of plan assets as a percentage of total plan assets of defined pension plan are as follows: ==============================================================================
2010 2009
==============================================================================
Rupees ('000) %age Rupees ('000) %age
==============================================================================
Treasury bills 449,460 67 - -
Government bonds 105,607 16 104,583 18
Regular income certificates 20,125 3 - -
Unit trusts 101,161 15 87,385 15
Shares 11,437 2 16,771 3
Term deposits - - 393,084 66
Other assets 307 - 10,464 2
Allocated to holding company (21,086) (3) (22,168) (4)
667,011 100 590,119 100
==============================================================================35.7. Principal actuarial assumptionsThe principal assumptions used in the actuarial valuation are as follows: ====================================================================================
2010 2009
====================================================================================
% %
====================================================================================
Discount rate 13.0 12.5
Expected rate of salary increase 10.9 10.4
Expected rate of pension increase 7.6 7.1
Expected rate of return on investments 13.0 12.5
====================================================================================35.8. Amounts for current and previous four annual periods are as follows:=======================================================================================================
2010 2009 2008 2007 2006
=======================================================================================================
Rupees ('000)
=======================================================================================================
Defined benefit obligation 887,722 760,087 640,154 592,705 552,713
Plan assets (667,011) (590,119) (537,513) (508,042) (425,053)
Deficit / (surplus) 220,711 169,968 102,641 84,663 127,660
Experience adjustments on plan liabilities 55,763 58,936 19,278 (16,063) 16,143
Experience adjustments on plan assets 8,916 (59,601) (21,390) 38,253 2,715
=======================================================================================================36. EARNINGS PER SHARE - BASIC AND DILUTED====================================================================================
2010 2009
====================================================================================
Profit for the year (in thousand rupees) 7,436,766 5,618,287
Weighted average number of ordinary shares
in issue during the year (in thousand shares) 236,546 236,546
Basic and diluted earnings per share (Rupees) 31.44 23.75
====================================================================================37. TRANSACTIONS WITH RELATED PARTIESAggregate transactions with related parties, other than remuneration to the chief executive, directors and executive of the Company under their terms of employment, were as follows: ====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Parent company - The Attock Oil Company Limited
Purchase of petroleum products 86,903 21,085
Sale of services 785 444
Purchase of services 402 -
Subsidiary company - Capgas (Private) Limited
Sale of services 10,321 8,989
Purchase of services 5,890 4,273
Associated companies
Attock Refinery Limited
Sale of crude oil and gas 8,252,344 6,585,561
Crude oil and gas transmission charges 99,336 88,610
Sale of services 5,086 5,195
Purchase of fuel 6,994 6,000
Purchase of services 12,569 10,726
Purchase of LPG 460,778 288,940
Attock Petroleum Limited
Purchase of fuel and lubricants 502,901 787,894
Purchase of services 173 430
Sale of solvent oil 263,267 266,532
Sale of services 5,919 5,008
National Refinery Limited
Purchase of services 1,161 1,056
Purchase of LPG 369,501 311,507
Attock Information Technology (Private) Limited
Purchase of services 19,233 12,075
Attock Cement Pakistan Limited
Purchase of services 550 -
Attock Hospital (Private) Limited
Purchase of medical services 3,976 3,107
Other related parties
Contribution to staff retirement benefits plans
Management Staff Pension Fund and Gratuity Fund 51,149 91,007
Approved Contributory Provident Funds 18,114 18,834
Contribution to Workers' profit participation fund 513,886 385,944
====================================================================================38. CASH AND CASH EQUIVALENTS====================================================================================
2010 2009
====================================================================================
Rupees ('000)
====================================================================================
Cash and cash equivalents comprise
Cash and bank balances 4,040,356 3,945,680
Short term investments-maturing within next three months 2,276,865 -
6,317,221 3,945,680
====================================================================================39. NON-ADJUSTING EVENT AFTER THE BALANCE SHEET DATEThe Board of Directors in its meeting held on September 30, 2010 has proposed a final dividend for the year ended June 30, 2010 @ Rs 17.50 per share, amounting to Rs 4,139,554 thousand for approval of the members in the Annual General Meeting to be held on October 28, 2010. 40. GENERAL 40.1. Capacity Considering the nature of the Company's business, information regarding capacity has no relevance. 40.2. Date of authorization These financial statements were authorized for issue by the Board of Directors of the Company on September 30, 2010. |