| Attock Refinery Ltd - 2010 |
|
Balance Sheet as at June 30, 2010
======================================================================================
2010 2009
======================================================================================
Note Rs '000 Rs '000
======================================================================================
SHARE CAPITAL AND RESERVES
Share capital
Authorised 6 1,500,000 1,000,000
Issued, subscribed and paid-up 6 852,930 852,930
Reserves and surplus 7 9,420,588 9,294,199
10,273,518 10,147,129
SURPLUS ON REVALUATION OF FREEHOLD LAND 8 1,923,339 1,923,339
12,196,857 12,070,468
DEFERRED LIABILITIES
Provision for staff gratuity 29 140,022 120,130
CURRENT LIABILITIES AND PROVISIONS
Short term finance 9 - -
Trade and other payables 10 44,202,697 30,311,409
Provision for taxation 2,049,256 1,985,536
46,251,953 32,296,945
CONTINGENCIES AND COMMITMENTS 11
58,588,832 44,487,543
PROPERTY, PLANT AND EQUIPMENT
Operating assets 12 2,562,880 2,521,903
Capital work-in-progress 13 260,908 336,072
Stores and spares held for capital expenditure 44,213 58,239
2,868,001 2,916,214
LONG TERM INVESTMENTS 14 13,264,915 13,244,120
LONG TERM LOANS AND DEPOSITS 15 9,925 12,437
DEFERRED TAXATION 16 161,467 184,389
CURRENT ASSETS
Stores, spares and loose tools 17 581,044 573,204
Stock-in-trade 18 7,178,852 4,868,976
Trade debts 19 30,430,263 15,508,763
Loans, advances, deposits, prepayments
and other receivables 20 125,946 377,134
Cash and bank balances 21 3,968,419 6,802,306
42,284,524 28,130,383
58,588,832 44,487,543
======================================================================================Profit and Loss Account for the year ended June 30, 2010======================================================================================
2010 2009
======================================================================================
Note Rs '000 Rs '000
======================================================================================
Sales 22 88,184,026 76,546,448
Reimbursement due from the Government
under import parity pricing formula 23 - 714,052
88,184,026 77,260,500
Less: Cost of sales 24 (88,693,686) (75,342,096)
GROSS PROFIT / (LOSS) (509,660) 1,918,404
Less: Administration expenses 25 245,291 222,822
Distribution cost 26 24,834 20,809
Finance cost 27 308,797 1,471,525
Other charges 28 76,745 124,319
(655,667) (1,839,475)
(1,165,327) 78,929
Other income 30 983,335 993,700
PROFIT/ (LOSS) BEFORE TAXATION
FROM REFINERY OPERATIONS (181,992) 1,072,629
Provision for taxation 31 (293,822) (666,613)
PROFIT/ (LOSS) AFTER TAXATION
FROM REFINERY OPERATIONS (475,814) 406,016
Income from non-refinery operations less applicable
charges and taxation 32 602,203 610,742
PROFIT FOR THE YEAR 126,389 1,016,758
Earnings / (loss) per share - Basic and diluted (Rs)
Refinery operations (5.58) 4.76
Non-refinery operations 7.06 7.16
37 1.48 11.92
======================================================================================Statement of Comprehensive Income for the year ended June 30, 2010======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Profit for the year 126,389 1,016,758
Other comprehensive income - -
Total comprehensive income for the year 126,389 1,016,758
======================================================================================Cash Flow Statement for the year ended June 30, 2010======================================================================================
2010 2009
======================================================================================
Rs '000 Rs'000
======================================================================================
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from - customers 97,334,916 95,624,042
- others 226,370 137,970
97,561,286 95,762,012
Cash paid for operating costs (79,873,828) (82,024,072)
Cash paid to Government for
duties, taxes and other levies (21,150,206) (24,888,914)
Income tax paid (278,636) (392,790)
Net cash flows from operating activities (3,741,384) (11,543,764)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (74,819) (188,975)
Sale of property, plant and equipment 4,299 76,571
Purchase of shares of associated companies (20,795) (108,541)
Long term loans and deposits 2,512 295
Income on bank deposits received 589,149 919,439
Dividends received 714,557 735,835
Net cash flows from investing activities 1,214,903 1,434,624
CASH FLOWS FROM FINANCING ACTIVITIES
Finance cost (308,797) (1,471,525)
Dividends paid (170) (566,422)
Net cash flows from financing activities (308,967) (2,037,947)
EFFECT OF EXCHANGE RATE CHANGES 1,561 4,761
(DECREASE) IN CASH AND CASH EQUIVALENTS (2,833,887) (12,142,326)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 6,802,306 18,944,632
CASH AND CASH EQUIVALENTS AT END OF THE YEAR 3,968,419 6,802,306
======================================================================================Statement of Changes in Equity for the year ended June 30, 2010========================================================================================================================================
Special reserve Un- Surplus on
Share Capital for expansion/ Investment General appropriated revaluation of
capital reserve modernisation reserve reserve Profit freehold land Total
========================================================================================================================================
Rs '000
========================================================================================================================================
Balance at June 30, 2008 710,775 5,948 4,407,932 - 55 4,574,281 1,923,339 11,622,330
Transfer to investment reserve - - - 3,762,775 - (3,762,775) - -
Bonus shares @ 20% related to the
year ended June 30, 2008 142,155 - - - - (142,155) - -
Final cash dividend @ 80% related
to the year ended June 30, 2008 - - - - - (568,620) - (568,620)
Total comprehensive income
for the year - - - - - 1,016,758 - 1,016,758
Transfer to special reserve for expansion /
modemisation - note 7.1 - - 260,216 - - (260,216) - -
Balance at June 30, 2009 852,930 5,948 4,668,148 3,762,775 55 857,273 1,923,339 12,070,468
Total comprehensive income
for the year - - - - - 126,389 - 126,389
Loss from refinery operations
transferred from unappropriated
profit to special reserve - note 7.1 - - (475,814) - - 475,814 - -
Balance at June 30, 2010 852,930 5,948 4,192,334 3,762,775 55 1,459,476 1,923,339 12,196,857
========================================================================================================================================Notes to and Forming Part of the Financial Statements for the year ended June 30, 20101. LEGAL STATUS AND OPERATIONS Attock Refinery Limited (the Company) was incorporated in Pakistan on November 8, 1978 as a private limited company and was converted into a public company on June 26, 1979. The registered office of the company is situated at Morgah, Rawalpindi. Its shares are quoted on the Karachi, Lahore and Islamabad Stock Exchanges in Pakistan. It is principally engaged in the refining of crude oil. The company is subsidiary of the Attock Oil Company Limited, UK and its ultimate parent is Bay View International Group S.A. 2. STATEMENT OF COMPLIANCE These are separate financial statements of the Company. These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984. In case requirements differ, the provisions or directives of the Companies Ordinance, 1984 shall prevail. 3. ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS 3.1. Changes in accounting policies and disclosures. (i). IAS 1 (Revised), 'Presentation of Financial Statements' - effective 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 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' - effective January 1, 2009. IFRS 8 replaces IAS 14, 'Segment Reporting'. 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 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 disclosure as given in note 33 to these financial statements. 3.2. Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early 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 (Revised) 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
============================================================================================The management anticipates that adoption of 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 modified by revaluation of freehold land referred to in note 4.7 and certain other modifications as required by approved accounting standards referred to in the accounting policies given below. 4.2. Dividend appropriation Dividend is recognised as a liability in the financial statements in the period in which it is declared. 4.3. Employee retirement benefits The main features of the retirement benefit schemes operated by the Company for its employees are as follows: (i).Defined benefits plans The Company operates a pension plan for its management staff and a gratuity plan for its non-management staff. Pension plan is invested through an approved trust fund while the gratuity plan is book reserve plan. Contributions are made in accordance with actuarial recommendations. Actuarial valuations are conducted through an independent actuary, annually using projected unit credit method. The obligation at the balance sheet date is measured at the present value of the estimated future cash outflows. Unrealised net gains and losses are amortised over the expected remaining service of current members. (ii).Defined contribution plans The company operates an approved contributory provident fund for all employees. Equal monthly contribution is made both by the Company and the employee to the fund at the rate of 10% of basic salary. 4.4. Employee compensated absences The company also provides for compensated absences for all employees in accordance with the rules of the Company. 4.5. Taxation Provision for current taxation is based on taxable income at the current rates of tax. Deferred income tax is accounted for using the balance sheet liability method in respect of all temporary differences arising between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences can be utilized. Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse based on the tax rates that have been enacted. Deferred tax is charged or credited to income except in the case of items credited or charged to equity in which case it is included in equity. 4.6. Provisions Provisions are recognised when the Company has a legal or constructive obligation as a result of past events, when it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation and a reliable estimate of the amount can be made. 4.7. Property, plant and equipment a).Cost Operating fixed assets except freehold land are stated at cost less accumulated depreciation. Freehold land is stated at revalued amount. Capital work-in-progress and stores held for capital expenditure are stated at cost. Cost in relation to certain plant and machinery items include borrowing cost related to the financing of major projects during construction phase. b).Depreciation Operating assets depreciation is calculated using the straight-line method to allocate their cost over their estimated useful lives at the rates specified in note 12. c).Repairs and maintenance Maintenance and normal repairs, including minor alterations, are charged to income as and when incurred. Renewals and improvements are capitalised and the assets so replaced, if any, are retired. d).Gains and losses on deletion Gains and losses on deletion of assets are included in income currently. 4.8. Impairment of non-financial assets Assets that have an indefinite useful life, for example land, are not subject to amortisation or depreciation and are tested annually for impairment. Assets that are subject to depreciationmortisation are reviewed for impairment at each balance sheet date or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. Reversals of the impairment losses are restricted to the original cost of the asset. An impairment loss or reversal of impairment loss is recognised in the profit and loss account. 4.9. Investments in associated and subsidiary companies These investments are initially valued at cost. At subsequent reporting dates, the Company reviews the carrying amount of the investment to assess whether there is any indication that such investments have suffered an impairment loss. If any such indication exists, the recoverable amount is estimated in order to determine the extent of the impairment loss, if any. Such impairment losses or reversal of impairment losses are recognised in the profit and loss account. The profits and losses of subsidiary and associated companies are carried in the financial statements of the subsidiary and associated company and are not dealt with for the purpose of these financial statements of the Company except to the extent of dividend declared by the subsidiary and associated companies. 4.10. Stores, spares and loose tools These are valued at moving average cost less allowance for obsolete and slow moving items. Items in transit are stated at invoice value plus other charges paid thereon. 4.11. Stock-in-trade Stock-in-trade is valued at the lower of cost and net realisable value. Crude oil in transit is valued at cost comprising invoice value. Cost in relation to crude oil is determined on the basis of annual average cost of purchases during the year on the principles of import parity and in relation to semi-finished and finished products it represents the cost of crude oil and refining charges consisting of direct expenses and appropriate production overheads. Direct expenses are arrived at on the basis of average cost for the year per barrel of throughput. Production overheads, including depreciation, are allocated to throughput proportionately on the basis of nameplate capacity. Net realisable value in relation to finished product represents selling prices in the ordinary course of business less costs necessarily to be incurred for its sale, as applicable, and in relation to crude oil represents replacement cost at the balance sheet date. 4.12. Revenue recognition Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is recognised as follows: (i). Revenue from sales is recognised on delivery of products ex-refinery to the customers with the exception that Naphtha export sales are recognised on the basis of products shipped to customers. (ii). The Company is operating under the import parity pricing formula, as modified from time to time, whereby it is charged the cost of crude on 'import parity' basis and is allowed product prices equivalent to the 'import parity' price, calculated under prescribed parameters. Effective July 1, 2007, the Government made certain modifications in the prescribed parameters effectively reducing the price of Kerosene Oil, Light Diesel Oil (LDO) and JP-8 in 2007 and 2008. The Government has further modified the refineries pricing formula in August, 2008 whereby the 10% duty included in pricing of HSD has been cut to 7.5% and the motor gasoline pricing has been unilaterally revised by linking its price to Arab Gulf 95 RON prices and calculating the price of 87 RON motor gasoline on a unitary method basis. This revision adversely affect the pricing of HSD and motor gasoline which are Company's two major products. Earlier in July, 2002, the Government had modified the pricing formula that was applicable to the Company restricting the distribution of net profits after tax (if any) from refinery operations to 50% of paid-up capital as at July 1, 2002 and diverting the surplus profits, if any, to a special reserve to offset any future loss or make investment for expansion or upgradation of Refinery. Further the Government had abolished the minimum rate of return of 10% which continues to be contested by the Company as it represented to the Government that the already existing agreement for guaranteed return could be modified only with the mutual consent of both the parties. (iii). Dividend income is recognised when the right to receive dividend is established. (iv). Income on bank deposits is recognised using the effective yield method. 4.13. Borrowing cost Borrowing cost related to the financing of major projects during the construction phase is capitalised. All other borrowing costs are expensed as incurred. 4.14. Foreign currency transactions and balances Transactions in foreign currencies are converted into rupees at the rates of exchange ruling on the date of the transaction. All monetary assets and liabilities denominated in foreign currencies at the year end are translated at exchange rates prevailing at the balance sheet date. Exchange differences are dealt with through the profit and loss account. 4.15. Financial instruments Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument and de-recognised when the Company loses control of the contractual rights that comprise the financial assets and when the obligation specified in the contract is discharged, cancelled or expired. All financial assets and liabilities are initially measured at cost, which is the fair value of the consideration given and received respectively. These are subsequently measured at fair value, amortised cost or cost, as the case may be. 4.16. Financial Assets The Company classifies its financial assets in the following categories: held-to-maturity investments, loans and receivables, available for sale investments and investments at fair value through profit or loss. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. Regular purchases and sales of financial assets are recognized on the trade-date - the date on which the company commits to purchase or sell the asset. 4.16.1. Held-to-maturity investments Investments with fixed payments and maturitythatthe Company has the intent and ability to hold to maturity are classified as held-to-maturity investments and are carried at amortised costless impairment losses. 4.16.2. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. The Company's loans and receivables comprise "Trade debts", "Advances, deposits and other receivables" and "Cash and bank balances" in the balance sheet. Loans and receivables are carried at amortized cost using the effective interest method. 4.16.3. Available-for-sale investments Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date. Available-for-sale investments are initially recognised at cost and carried at fair value at the balance sheet date. Fair value of a quoted investment is determined in relation to its market value (current bid prices) at the balance sheet date. If the market for a financial asset is not active (and for unlisted securities), the Company establishes fair value by using valuation techniques. Adjustment arising from remeasurement of investment to fair value is recorded in equity and taken to income on disposal of investment or when the investment is determined to be impaired. 4.16.4. Investment at fair value through profit or loss Investments classified as investments at fair value through profit or loss are initially measured at cost being fair value of consideration given. At subsequent dates these investments are measured at fair value with any resulting gains or losses recognised directly in the profit and loss account. The fair value of such investments is determined on the basis of prevailing market prices. 4.17. Trade and other payables Liabilities for trade and other amounts payable including amounts payable to related parties are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received. 4.18. Offsetting Financial assets and liabilities are offset and the net amount is reported in the balance sheet if the Company has a legally enforceable right to set off the recognised amounts and the Company intends to settle on a net basis or realise the asset and settle the liability simultaneously. 4.19. Cash and cash equivalents For the purpose of cash flow statement, cash and cash equivalents comprise cash in hand, bank balances and highly liquid short term investments. 4.20. Functional and presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates. The financial statements are presented in Pakistani Rupees, which is the Company's functional currency. 5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS The preparation of financial statements in conformity with the approved accounting standards requires the use of certain accounting estimates. It also requires management to exercise its judgment in the process of applying the Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements, are as follows: (i). Estimate of recoverable amount of investments in associated companies - note 14 (ii). Revaluation surplus on freehold land - note 12.2 (iii). Estimated useful life of property, plant and equipment - note 12 (iv). Provision for taxation - note 31 (v). Provision for employee retirement benefits - note 29 6. SHARE CAPITAL ======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Authorised
150,000,000 (2009: 100,000,000)
ordinary shares of Rs 10 each 1,500,000 1,000,000
Issued, subscribed and paid up
8,000,000 ordinary shares of Rs 10 each
Issued for cash 80,000 80,000
Shares issued as fully paid bonus shares
77,293,000 ordinary shares of Rs 10 each 772,930 772,930
85,293,000 ordinary shares of Rs 10 each 852,930 852,930
======================================================================================The parent Company Attock Oil Company Limited held 48,039,224 (2009: 48,039,224) ordinary shares and the associated Company Attock Petroleum Limited held 1,332,000 (2009: 1,332,000) ordinary shares at the year end.7. RESERVES AND SURPLUS ======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Capital reserve
Liabilities taken over from The Attock Oil Company Limited
no longer required 4,800 4,800
Capital gain on sale of building 654 654
Insurance and other claims realised relating to
pre-incorporation period 494 494
5,948 5,948
Special reserve for expansion / modernisation - note 7.1
Additional revenue under processing fee formula related
to 1990-91 and 1991-92 32,929 32,929
Surplus profits under the import parity pricing formula 4,159,405 4,635,219
4,192,334 4,668,148
Revenue reserve
Investment reserve - note 7.2 3,762,775 3,762,775
General reserve 55 55
Unappropriated profit 1,459,476 857,273
5,222,306 4,620,103
9,420,588 9,294,199
======================================================================================7.1. Represents amounts retained as per stipulations of the Government under the pricing formula and is available only for offsetting any future loss or making investment in expansion or upgradation of the refinery. Transfer to/from special reserve is recognised at each quarter end and is reviewed for adjustment based on profit/loss on an annual basis. The company has incurred capital expenditure of Rs 3,878 million on upgradation and expansion projects from July 1, 1997 to June 30, 2010 (July 1, 1997 to June 30, 2009: Rs 3,855 million).7.2. The Company has set aside gain on sale of investment as investment reserve to meet any future losses/impairment on investments. 8. SURPLUS ON REVALUATION OF FREEHOLD LAND This represents surplus over book value resulting from revaluation of freehold land as referred to in note 12.2 and is not available for distribution to shareholders. 9. SHORT TERM FINANCE The Company has negotiated running finance facilities with various banks and accepted facility offer letters to the extent of Rs 3 billion, which were unutilised at the year end. As and when required, these facilities shall be secured by joint hypothecation by way of 1st registered charges over the Company's current assets. 10. TRADE AND OTHER PAYABLES ======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Creditors - note 10.1 28,597,616 22,995,072
Due to The Attock Oil Company Limited - Holding Company 151,574 84,985
Due to associated companies
Pakistan Oilfields Limited 1,163,800 837,348
Attock Information Technology Services (Private) Limited 1,904 3,044
Accrued liabilities and provisions - note 10.1 3,175,095 2,830,079
Due to the Government under pricing formula 8,626,856 2,527,290
Advance payments from customers 5,723 30,298
Sales tax payable 1,274,260 441 691
Workers' welfare fund 258,933 234,750
Workers' profit participation fund - note 10.2 28,208 94,754
General staff provident fund - 1,357
Staff provident fund - 1,912
Deposits from customers adjustable against freight
and Government levies payable on their behalf 376 376
Payable to statutory authorities in respect of petroleum
development levy and excise duty 866,417 175,813
Security deposits 48,331 48,866
Unclaimed dividends 3,604 3,774
44,202,697 30,311,409
======================================================================================10.1. These balances include amounts retained from payments to crude suppliers for purchase of local crude as per the directives of the Ministry of Petroleum and Natural Resources (the Ministry). Further, as per directive of the Ministry such withheld amounts are to be retained in designated 90 days interest bearing accounts. The amounts withheld alongwith accumulated profits amounted to Rs 3,177.551 million (2009: Rs 4,368.984 million).10.2. Workers' Profit Participation Fund ======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Balance at the beginning of the year 94,754 181,441
Add: Interest on Funds utilised in the Company's business 1,344 7,009
96,098 188,450
Less: Amount paid to the Fund 95,040 188,156
1,058 294
Add: Amount allocated for the year - notes 28 and 33 27,150 94,460
28,208 94,754
======================================================================================11. CONTINGENCIES AND COMMITMENTSContingencies: (i) Due to huge circular debt in the oil industry, certain payments due from/to the oil marketing companies (OMCs) and crude oil suppliers respectively have not been made on their due dates of payment. As a result the Company has raised claims on OMCs in respect of mark-up on delayed payments as well as received counter claims from some crude oil suppliers which have not been recognized in the financial statements as these have not been acknowledged as debt by either parties. ======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
(ii) Guarantees issued by banks on behalf of the Company 394 350
(iii) Claims for land compensation contested by the Company 1,300 1,300
====================================================================================== (iv) Price adjustment related to crude oil purchases as referred to in note 24.1, the amount of which can not be presently quantifiedCommitments outstanding: ======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
(i) Capital expenditure 16,559 37,876
(ii) Letters of credit for purchase of store items 238,971 243,043
======================================================================================12. OPERATING ASSETS================================================================================================================
Freehold Buildings Furniture,
land on freehold Plant and computer fixtures and
(note 12.2) land machinery equipment equipment Vehicles Total
================================================================================================================
Rs '000
================================================================================================================
As at July 1, 2008
Cost 1,927,250 101,649 3,985,097 47,676 57,946 73,954 6,193,572
Accumulated depreciation - (38,120) (3,559,632) (41,573) (35,385) (59,342) (3,734,052)
Net book value 1,927,250 63,529 425,465 6,103 22,561 14,612 2,459,520
Year ended June 30, 2009
Opening net book value 1,927,250 63,529 425,465 6,103 22,561 14,612 2,459,520
Additions 50,310 9,618 192,754 4,253 2,986 4,875 264,796
Disposals
Cost - - (75,000) (6,250) (389) (4,528) (86,167)
Depreciation - - - 6,247 243 4,107 10,597
- - (75,000) (3) (146) (421) (75,570)
Depreciation charge - (5,744) (104,796) (3,474) (5,163) (7,666) (126,843)
Closing net book value 1,977,560 67,403 438,423 6,879 20,238 11,400 2,521,903
As at July 1, 2009
Cost 1,977,560 111,267 4,102,851 45,679 60,543 74,301 6,372,201
Accumulated depreciation - (43,864) (3,664,428) (38,800) (40,305) (62,901) (3,850,298)
Net book value 1,977,560 67,403 438,423 6,879 20,238 11,400 2,521,903
Year ended June 30, 2010
Opening net book value 1,977,560 67,403 438,423 6,879 20,238 11,400 2,521,903
Additions - 7,456 144,779 2,569 3,435 5,770 164,009
Disposals
Cost - - - - (342) (4,123) (4,465)
Depreciation - - - - 205 4,122 4,327
- - - - (137) (1) (138)
Depreciation charge - (5,503) (104,460) (3,024) (3,962) (5,945) (122,894)
Closing net book value 1,977,560 69,356 478,742 6,424 19,574 11,224 2,562,880
As at June 30, 2010
Cost 1,977,560 118,723 4,247,630 48,248 63,636 75,948 6,531,745
Accumulated depreciation - (49,367) (3,768,888) (41,824) (44,062) (64,724) (3,968,865)
Net book value 1,977,560 69,356 478,742 6,424 19,574 11,224 2,562,880
Annual rate of
Depreciation (%) - 5 10 20 10 20
================================================================================================================12.1. Fixed assets disposed off during the year are as follows:=======================================================================================
Original Book Sale Mode of Particulars of
cost value proceeds disposal purchaser
=======================================================================================
Rs '000
=======================================================================================
Assets disposed off to executives:
Vehicles 510 - 51 Company policy Mr. Haider Abbas Hamdani
562 - 56 Company policy Mr. Malik Muhammad Yousaf
532 - 53 Company policy Mr. Irshad Ramay
532 - 53 Company policy Mr. Khaleeq-uz-Zaman
=======================================================================================12.2. Value of freehold land includes revaluation surplus of Rs 1,923.339 million arising from revaluation of freehold land in January 2001 carried out by an independent valuer. Valuation was made on the basis of market value. The original cost of the land as at June 30, 2010 is Rs 54.221 million.12.3. The depreciation charge for the year has been allocated as follows: ======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Cost of sales 112,436 114,446
Administration expenses 9,523 11,417
Distribution cost 302 347
Desalter operating cost 633 633
122,894 126,843
======================================================================================13. CAPITAL WORK-IN-PROGRESS======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Opening balance as at July 1, 2009 336,072 441,326
Add: Addition during the year 60,305 90,736
396,377 532,062
Less: Capitalization during the year 135,469 195,990
Closing balance as at June 30, 2010 260,908 336,072
====================================================================================== The details are as under:======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Civil works 242 242
Plant and machinery 232,246 307,410
Pipeline project 28,420 28,420
260,908 336,072
======================================================================================14. LONG TERM INVESTMENTS � AT COST======================================================================================================
2010 2009
======================================================================================================
%age %age
holding Rs '000 holding Rs '000
======================================================================================================
Associated companies
Quoted
National Refinery Limited (NRL) - note 14.1 25 8,046,635 25 8,046,635
19,991,640 (2009: 19,991,640) fully paid ordinary
shares including 3,331 940 (2009 3,331 940) bonus
shares of Rs 10 each
Market value as at June 30, 2010 : Rs 3,655 million
(June 30, 2009 : Rs 4,399 million)
Attock Petroleum Limited (APL) - note 14.2 21.88 4,463,485 21.88 4,463,485
12,600,096 (2009: 12,600,096) fully paid ordinary shares
including 2,100,016 (2009 : 2,100,016) bonus shares of
Rs 10 each
Market value as at June 30, 2010 : Rs 3,651 million
(June 30, 2009 : Rs 4,013 million)
Unquoted
Attock Gen Limited (AGL) - note 14.3 30 748,295 30 727,500
7,482,957 (2009 : 7,275,000) fully paid ordinary shares of
Rs 100 each
Attock Information Technology Services (Private) Limited 10 4,500 10 4,500
450,000 (2009: 450,000) fully paid ordinary shares of
Rs 10 each
13,262,915 13,242,120
Subsidiary company
Unquoted
Attock Hospital (Private) Limited 100 2,000 100 2,000
200,000 (2009: 200,000) fully paid ordinary shares of
Rs 10 each
13,264,915 13,244,120
======================================================================================================All associated and subsidiary companies are incorporated in Pakistan.14.1. Based on a valuation analysis carried out by an external investment advisor engaged by the Company, the recoverable amount of investment in NRL exceeds its carrying amount. The recoverable amount has been estimated based on a value in use calculation. These calculations have been made on discounted cash flow based valuation methodology which assumes gross profit margin of 3.91% (2009: 5.38%), terminal growth rate of 3% (2009: 3%) and capital asset pricing model based discount rate of 17.90% (2009: 18.05%). 14.2. 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 gross profit margin of 4.58% (2009: 5.16%), terminal growth rate of 3% (2009 : 4.5%) and capital asset pricing model based discount rate of 17.90% (2009: 18.05%). 14.3. Investment in AGL ======================================================================================
Number Cost
of shares Rs '000
======================================================================================
As at July 1, 2009 7,275,000 727,500
Right shares acquired during the year 207,957 20,795
As at June 30, 2010 7,482,957 748,295
======================================================================================15. LONG TERM LOANS AND DEPOSITS======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Loans to employees - considered good - note 15.1 23,507 28,546
Less: Amounts due within next twelve months shown
under current assets - note 20 (14,530) (17,057)
8,977 11,489
Security deposits 948 948
9,925 12,437
======================================================================================15.1. Loans to employees are for miscellaneous purposes which are recoverable in 24, 36, and 60 equal monthly installments depending on case to case basis and are secured by a charge on the asset purchased and/or amount due to the employee against provident fund or a third party guarantee. These are interest free loans. These include an amount of Rs 3.973 million (2009: Rs 5.218 million) receivable from Executives of the Company and does not include any amount receivable from Directors or Chief Executive. The maximum amount due from executives of the Company at the end of any month during the year was Rs 5.779 million (2009 Rs 6.913 million).15.2. Reconciliation of carrying amount of loans to executives: ======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Opening balance as at July 1 5,218 4,366
Add : Disbursements during the year 4,757 5,753
9,975 10,119
Less: Repayments during the year 6,002 4,901
Closing balance as at June 30 3,973 5,218
======================================================================================16. DEFERRED TAXATION======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Debit balances arising on
Difference between accounting and tax depreciation 83,629 118,353
Provisions for obsolete stores, doubtful debts and gratuity 77,838 66,036
161,467 184,389
======================================================================================17. STORES, SPARES AND LOOSE TOOLS======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Stores (including items in transit
Rs 63.15 million; 2009: Rs 57.27 million) 344,398 336,212
Spares 290,989 279,955
Loose tools 429 509
635,816 616,676
Less: Provision for slow moving items-note 17.1 54,772 43,472
581,044 573,204
======================================================================================17.1. Provision for slow moving items======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Opening balance 43,472 37,300
Add: Provision for the year 11,300 10,600
54,772 47,900
Less: Stores and spares written off - 4,428
54,772 43,472
======================================================================================18. STOCK-IN-TRADE======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Crude oil - in stock 2,848,225 1,222,628
- in transit 173,796 219,165
3,022,021 1,441,793
Semi-finished products 483,694 377,749
Finished products - note 18.1 3,673,137 3,049,434
7,178,852 4,868,976
======================================================================================18.1. Finished products include stocks carried at net realisable value of Rs 3,184 million (2009: Rs 910 million). Adjustments amounting to Rs 357 million (2009 : Rs 88 million) have been made to closing inventory to write down stocks of finished products to their net realizable value.19. TRADE DEBTS All debtors are unsecured and considered good. These include amount receivable from associated companies Attock Petroleum Limited Rs 6,723 million (2009: Rs 3,902 million) and Pakistan Oilfields Limited Rs 5 million (2009: Rs 8 million). 20. LOANS, ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES ======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Loans and advances - considered good
Current portion of long term loans to employees-note 15 14,530 17,057
Advances to suppliers 31,970 35,681
Advances to employees 3,503 2,619
50,003 55,357
Deposits and prepayments
Trade deposits 286 286
Short term prepayments 31,680 33,923
31,966 34,209
Other receivables
Due from Subsidiary Company
Attock Hospital (Private) Limited 94 682
Due from associated companies
National Refinery Limited 24 2,478
Attock Petroleum Limited 1,122 4,913
Attock Leisure and Management Associates (Pvt) Limited 28 594
Attock Gen Limited 723 22,304
National Cleaner Production Centre Foundation 2,230 2,053
Attock Cement Pakistan Limited - 46
Due from Staff pension fund 19,935 28,820
Income accrued on bank deposits 3,989 80,494
Crude oil freight adjustable through
inland freight equalisation margin 3,615 67,276
Amount adjustable against insurance claims - 75,000
Other receivables 12,217 2,908
43,977 287,568
125,946 377,134
======================================================================================21. CASH AND BANK BALANCES======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Cash in hand 918 412
With banks:
Current accounts 5,603 28,560
Deposit accounts 2,849,671 2,000,000
Saving accounts (including US $ 379,677 2009: US $ 363,249) 1,112,227 4,773,334
3,968,419 6,802,306
======================================================================================21.1. Balances with banks include Rs 2,849.658 million (2009: Rs 2,000.000 million) in respect of deposits placed in a 90-day interest-bearing account consequent to directives of the Ministry of Petroleum & Natural Resources on account of amounts withheld along with related interest earned thereon, as referred to in note 10.1.21.2. Bank deposits of Rs 0.394 million (2009: Rs 0.350 million) were under lien with bank against a bank guarantee issued on behalf of the Company. 21.3. Balances with banks include Rs 48.331 million (2009: Rs 48.866 million) in respect of security deposits received. 21.4. Balances with banks earned weighted average interest/ mark-up @ 11.28% (2009: @ 14.04%) per annum. 22. SALES ======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Gross sales (excluding Naphtha export sales) 101,666,796 92,766,859
Naphtha export sales 10,321,605 9,131,088
Less: Sale proceeds of Naphtha
exports related to third parties 1,130,996 1,058,823
9,190,609 8,072,265
110,857,405 100,839,124
Less: Duties, taxes and levies - note 22.1 22,673,379 24,292,676
88,184,026 76,546,448
======================================================================================22.1. Duties, taxes and levies======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Sales tax 13,216,039 11,675,167
Petroleum Development Levy 9,445,993 12,600,264
Custom duties and other levies 11,347 17,245
22,673,379 24,292,676
======================================================================================23. REIMBURSEMENT DUE FROM THE GOVERNMENT UNDER IMPORT PARITY PRICING FORMULAThis represents amount due from the Government of Pakistan on account of shortfall in ex-refinery prices of certain petroleum products under the import parity pricing formula. 24. COST OF SALES ======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Opening stock of semi-finished products 377,749 436,792
Crude oil consumed - note 24.1 86,477,494 72,606,265
Transportation and handling charges 1,229,486 1,076,227
Salaries, wages and other benefits - note 24.2 380,547 342,936
Printing and stationery 1,959 1,965
Chemicals consumed 289,007 322,132
Fuel and power 579,948 458,308
Rent, rates and taxes 6,851 6,934
Telephone 1,589 1,316
Professional charges for technical services 5,562 4,350
Insurance 106,837 81,463
Repairs and maintenance (including stores and spares
consumed Rs 44.741 million ; 2009 : Rs 75.980 million) 206,896 163,067
Staff transport and travelling 8,393 7,679
Cost of receptacles 14,580 15,665
Research and development 1,749 165
Depreciation 112,436 114,446
89,801 083 75,639,710
Closing stock of semi-finished products (483,694) (377,749)
89,317,389 75,261,961
Opening stock of finished products 3,049,434 3,129,569
Closing stock of finished products (3,673,137) (3,049,434)
(623,703) 80,135
88,693,686 75,342,096
======================================================================================24.1. Crude oil consumed======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Stock at the beginning of the year 1,441,793 1,278,493
Purchases 88,057,722 72,769,565
89,499,515 74,048,058
Stock at the end of the year (3,022,021) (1,441,793)
86,477,494 72,606,265
======================================================================================Certain crude purchases have been recorded based on provisional prices notified by the Government and may require adjustment in subsequent periods.24.2. Salaries, wages and other benefits under cost of sales, administration expenses, distribution cost and income from crude desalter operations include the Company's contribution to the Provident Fund amounting to Rs 15.311 million (2009: Rs 14.708 million). 25. ADMINISTRATION EXPENSES ======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Salaries, wages and other benefits - note 24.2 146,408 132,070
Staff transport, travelling and entertainment 12,723 9,956
Telephone 1,730 2,000
Electricity, gas and water 10,652 6,060
Printing and stationery 3,573 3,437
Auditor's remuneration - note 25.1 1,746 1,639
Legal and professional charges 6,214 7,319
Repairs and maintenance 35,703 31,697
Subscription 7,028 5,218
Publicity 3,509 3,473
Scholarship scheme 1,694 1,748
Rent, rates and taxes 2,664 2,157
Insurance 987 1,289
Donations * 308 2,742
Training expenses 829 501
Other expenses - 99
Depreciation 9,523 11,417
245,291 222,822
====================================================================================== * No director or his spouse had any interest in the donee institutions.25.1. Auditor's remuneration ======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Annual audit 1,000 750
Review of half yearly accounts, audit of consolidated
accounts, staff funds and special certifications 602 454
Tax services - 300
Out of pocket expenses 144 135
1,746 1,639
======================================================================================26. DISTRIBUTION COST======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Salaries, wages and other benefits - note 24.2 16,726 14,861
Staff transport, travelling and entertainment 553 576
Telephone 193 161
Electricity, gas, fuel and water 3,550 2,020
Printing and stationery 114 101
Repairs and maintenance including
packing and other stores consumed 2,686 1,932
Rent, rates and taxes 390 464
Legal and professional charges 320 347
Depreciation 302 347
24,834 20,809
======================================================================================27. FINANCE COST======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Exchange loss 307,306 1,464,423
Interest on Workers' Profit Participation Fund-note 10.2 1,344 7,009
Bank and other charges 147 93
308,797 1,471,525
======================================================================================28. OTHER CHARGES======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Employees' retirement benefits
Staff gratuity benefits 29,952 31,120
Staff pension benefits 24,584 1,278
Less: contribution to subsidiary and associated company (2,305) (2,137)
22,279 (859)
Contribution to employees old age benefits scheme 2,780 2,723
55,011 32,984
Provision for slow moving stores 11,300 10,600
Workers' profit participation fund - 57,668
Workers' welfare fund 10,434 23,067
76,745 124,319
======================================================================================29. EMPLOYEES' DEFINED BENEFIT PLANSThe latest actuarial valuation of the employees' defined benefit plans was conducted at June 30, 2010 using the projected unit credit method. Details of the defined benefit plans are: ================================================================================================
Funded defined Unfunded defined
benefit benefit
pension plan gratuity plan
================================================================================================
2010 2009 2010 2009
================================================================================================
Rs '000 Rs '000
================================================================================================
a) The amounts recognised in the profit and loss account:
Current service cost 16,760 14,462 4,539 4,680
Interest on obligation 47,384 41,710 19,768 19,721
Expected return on plan assets (45,385) (51,074) - -
Net actuarial losses / (gains)
recognised during the year 5,825 (3,820) 5,645 6,719
24,584 1,278 29,952 31,120
b) The amounts recognised in the balance sheet:
Fair value of plan assets 391,481 340,186 - -
Present value of defined benefit obligations (476,121) (387,196) (201,210) (163,030)
(84,640) (47,010) (201,210) (163,030)
Unrecognised actuarial (gains)/losses 104,575 75,830 61,188 42,900
Net asset/ (liability) 19,935 28,820 (140,022) (120,130)
c) Movement in the present value of defined benefit obligation
Present value of defined
benefit obligation as at July 1 387,196 321,136 163,030 152,656
Current service cost 16,760 14,462 4,539 4,680
Interest cost 47,384 41,710 19,769 19,721
Benefits paid (16,751) (13,105) (10,061) (7,880)
Actuarial (gains)/ losses 41,532 22,993 23,933 (6,147)
Present value of defined
benefit obligation as at June 30 476,121 387,196 201,210 163,030
d) Changes in the fair value of plan assets:
Fair value of plan assets as at July 1 340,186 385,053 - -
Expected return 45,385 51,074 - -
Benefits paid (16,751) (13,105) - -
Contributions by employer 15,700 14,693 - -
Contributions by associated company - (358) - -
Actuarial gains/ (losses) 6,961 (97,171) - -
Fair value of plan assets as at June 30 391,481 340,186 - -
Actual return on plan assets 52,826 (46,577) - -
The company expects to contribute Rs 17.1 million to
its defined benefit pension plans during 2010-2011.
e) The major categories of plan assets:
Investment in equities 95,878 88,231 - -
Investment in mixed funds 63,444 60,845 - -
Cash 232,159 191,110 - -
391,481 340,186 - -
f) Significant actuarial assumptions at the balance sheet date:
Discount rate 13.00% 12.50% - -
Expected return on plan assets 13.00% 12.50% - -
Future salary increases 10.85% 10.36% - -
Future pension increases 7.62% 7.14% - -
================================================================================================
=====================================================================================================
2010 2009 2008 2007 2006
=====================================================================================================
Rs '000
=====================================================================================================
g) Comparison for five years:
Defined Benefit Pension Plan
Present value of defined benefit obligation (476,121) (387,196) (321,136) (291,335) (263,054)
Fair value of plan assets 391,481 340,186 385,053 359,485 280,495
Surplus / (deficit) (84,640) (47,010) 63,917 68,150 17,441
Experience adjustments on plan liabilities 41,532 22,993 (4,263) (609) 23,265
Experience adjustments on plan assets (6,961) 97,171 14,913 (48,803) 29,017
Defined Benefit Gratuity Plan
Present value of defined benefit obligation (201,210) (163,030) (152,656) (121,894) (96,058)
Fair value of plan assets - - - - -
Deficit (201,210) (163,030) (152,656) (121,894) (96,058)
Experience adjustments on plan liabilities (23,933) (6,147) 23,729 17,982 (1,087)
Experience adjustments on plan assets - - - - -
=====================================================================================================30. OTHER INCOME======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Income from financial assets
Income on bank deposits 512,644 891,045
Interest on delayed payments 292,589 -
Exchange gain 2,557 4,761
807,790 895,806
Income from non-financial assets
Income from crude decanting 15,416 14,458
Income from crude desalter operations - note 30.1 954 13,168
Insurance agency commission 4,336 7,624
Rental income 34,340 19,375
Sale of scrap 7,804 15,658
Profit on disposal of fixed assets 4,161 1,001
Insurance claim * 23,907 -
Calibration charges 2,956 3,431
Handling and service charges 70,842 14,882
Penalties from carriage contractors 3,748 1,694
Miscellaneous 7,081 6,603
175,545 97,894
983,335 993,700
====================================================================================== * Represents differential value of claim settled on replacement value basis.30.1. Income from crude desalter operations ======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Income 54,945 54,245
Less: Operating costs
Salaries, wages and other benefits - note 24.2 1,529 1,260
Chemicals consumed 8,543 8,380
Fuel and power 34,355 22,865
Repairs and maintenance 8,931 7,939
Depreciation 633 633
53,991 41,077
954 13,168
======================================================================================31. PROVISION FOR TAXATION======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Current - for the year 270,900 631,700
Deferred - for the year 22,922 34,913
293,822 666,613
======================================================================================31.1. Relationship between tax expense and accounting profit======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Accounting profit / (loss) (181,992) 1,072,629
Tax @ 35% (63,697) 375,420
Income chargeable to tax at special rate 357,519 291,193
293,822 666,613
======================================================================================32. INCOME FROM NON-REFINERY OPERATIONS LESS APPLICABLE CHARGES AND TAXATION======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Dividend income from associated companies
National Refinery Limited 315,002 399,833
Attock Petroleum Limited 249,896 336,002
Attock Gen Limited 149,659 -
714,557 735,835
Less: Related charges
Workers' profit participation fund 27,150 36,792
Workers' welfare fund 13,748 14,717
Taxation @10% (2009:10%) 71,456 73,584
112,354 125,093
602,203 610,742
======================================================================================33. OPERATING SEGMENTSThe financial statements have been prepared on the basis of a single reportable segment. Revenue from external customers for products of the Company are as follows: ======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
High Speed Diesel 36,404,230 34,711,605
Jet Petroleum 11,012,404 11,389,397
Motor Gasoline 27,599,380 24,347,475
Furnace Fuel Oil 17,972,145 15,287,409
Naphtha 9,190,609 8,072,265
Others 8,678,637 7,030,973
110,857,405 100,839,124
Less: Duties, taxes and levies 22,673,379 24,292,676
88,184,026 76,546,448
======================================================================================Revenue from four major customers of the Company constitute 90% of the total revenue during the year ended June 30, 2010 (June 30, 2009: 90%).34. RELATED PARTY TRANSACTIONS Attock Oil Company Limited holds 56.32% (2009 56.32%) shares of the Company at the year end. Therefore, all subsidiaries and associated undertakings of Attock Oil Company Limited are related parties of the Company. The related parties also comprise of directors, major shareholders, key management personnel, entities over which the directors are able to exercise significant influence on financial and operating policy decisions and employees' funds. Amount due from and due to these undertakings are shown under receivables and payables. The remuneration of Chief Executive, directors and executives is disclosed in note 35 to the financial statements. ======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Associated companies
Sale of goods 33,849,498 25,803,489
Sale of services 142,893 74,159
33,992,391 25,877,648
Purchase of goods 8,265,490 6,689,896
Purchase of services 364,673 363,476
8,630,163 7,053,372
Interest income on delayed payments 292,589 -
Holding Company
Sale of services 1,372 -
Purchase of goods 677,819 428,679
Purchase of services 5,775 4,657
683,594 433,336
Subsidiary Company
Sale of goods 212 217
Sale of services 28,305 26,428
28,517 26,645
Purchase of services 28,169 27,393
Contribution to employees' pension and provident funds 31,011 29,401
======================================================================================35. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVESThe aggregate amounts charged in the accounts for remuneration, including benefits and perquisites, were as follows: ===========================================================================================
Chief Executive Directors Executives
===========================================================================================
2010 2009 2010 2009 2010 2009
===========================================================================================
Rs '000
===========================================================================================
Managerial remuneration / honorarium 5,035 4,567 344 1,219 37,904 34,941
Company's contribution to
provident and pension funds 1,070 942 - - 8,243 7,396
Housing and utilities 3,000 2,696 - - 29,259 26,772
Leave passage 519 420 - - 4,520 3,155
9,624 8,625 344 1,219 79,926 72,264
Less: Charged to associated company 2,806 - - - - -
6,818 8,625 344 1,219 79,926 72,264
No. of persons 1 1 2 3 31 29
===========================================================================================35.1. In addition, the Chief Executive and 20 (2009: 21) executives were provided with limited use of the Company's cars. The Chief Executive and all executives were provided with medical facilities and 8 (2009: 4) executives were provided with unfurnished accommodation in Company owned bungalows. Limited residential telephone facility was also provided to the Chief Executive and 17 (2009: 11) executives.35.2. In addition,4 non-executive directors, chief executive officer and 3 alternate directors of the company were paid meeting fee aggregating Rs 3.605 million (2009 : Rs Nil) based on actual attendance: 36. FINANCIAL INSTRUMENTS 36.1. Financial assets and liabilities ======================================================================================
Loans and receivables
======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Financial assets:
Maturity upto one year
Trade debts 30,430,263 15,508,763
Loans, advances, deposits and other receivables 62,296 307,530
Cash and bank balances
Foreign currency - US $ 32,654 29,684
Local currency 3,935,765 6,772,622
Maturity after one year
Long term Loans and deposits 9,925 12,437
34,470,903 22,631,036
======================================================================================
======================================================================================
Other financial liabilities
======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
Financial liabilities:
Maturity upto one year
Trade and other payables 44,196,974 30,281,112
Maturity after one year
Staff gratuity 140,022 120,130
44,336,996 30,401,242
======================================================================================36.2. 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 (JCR-VIS). The counterparties for which external credit ratings were not available have been assessed by reference to internal credit ratings determined based on their historical information for any defaults in meeting obligations. ======================================================================================
2010 2009
======================================================================================
Rating Balance Balance
Rs '000 Rs '000
======================================================================================
Trade debts
Counterparties with external credit rating A 1+ 21,157,877 10,153,763
Counterparties without external credit rating
Due from associated companies 6,727,590 3,910,073
Others * 2,544,796 1,444,927
30,430,263 15,508,763
Loans, advances, deposits and other receivables
Counterparties without external credit rating 72,221 319,967
Bank Balances
Counterparties with external credit rating A 1 + 3,966,638 6,445,939
Al 502 344,855
A2 46 44
A3 315 11,056
3,967,501 6,801,894
====================================================================================== * These balances represent receivable from oil marketing companies and defence agencies.36.3. Financial risk management 36.3.1. Financial risk factors The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including currency risk, interest rate risk and price risk). The Company's overall risk management policy focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company's financial performance. a) Credit risk Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company's credit risk is primarily attributable to its trade debts and placements with banks. The sales are essentially to oil marketing companies and reputable foreign customers. The Company's placements are with banks having satisfactory credit rating. Due to the high creditworthiness of counter parties the credit risk is considered minimal. At June 30, 2010, trade debts of Rs 24,396,422 thousand (2009: Rs 12,163,373 thousand) were past due but not impaired. The ageing analysis of these trade receivables is as follows: ======================================================================================
2010 2009
======================================================================================
Rs '000 Rs '000
======================================================================================
0 to 6 months 13,064,184 12,074,031
6 to 12 months 7,332,114 14,481
Above 12 months 4,000,124 74,861
24,396,422 12,163,373
====================================================================================== b).Liquidity riskLiquidity risk reflects an enterprise's inability in raising funds to meet commitments. The Company follows an effective cash management and planning policy to ensure availability of funds and to take appropriate measures for new requirements. c).Market risk (i).Currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Currency risk arises mainly from future commercial transactions or receivables and payables that exist due to transactions in foreign currencies. Financial assets include Rs 845 million (2009 Rs 36 million) and financial liabilities include Rs 9,322 million (2009: Rs 6,390 million) which were subject to currency risk. At June 30, 2010, if the currency had weakened / strengthened by 10% against US dollar with all other variables held constant, profit after tax for the year would have been Rs 551 million (2009: Rs 413 million) lower/higher. (ii).Interest rate risk Interest rate risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Financial assets and liabilities include balances of Rs 3,962 million (2009: Rs 6,773 million) and Rs 3,318 million (2009: Rs 4,489 million) respectively, which are subject to interest rate risk. At June 30, 2010, if interest rates had been 1% higher/ lower with all other variables held constant, profit after tax for the year would have been Rs 4 million (2009: Rs 15 million) higher/ lower. (iii).Price risk Price risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. At the year end the Company is not exposed to price risk since there are no financial instruments, whose fair value or future cash flows will fluctuate because of changes in market prices. 36.3.2. Capital risk management The Company is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the return on capital and the level of dividend to ordinary shareholders. There was no change to the Company's approach to the capital management during the year and the company is not subject to externally imposed capital requirement. 37. EARNINGS/(LOSS) PER SHARE - BASIC AND DILUTED ======================================================================================
2010 2009
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Rs '000 Rs '000
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Profit/ (loss) after taxation from refinery operations (475,814) 406,016
Income from non-refinery operations
less applicable charges and taxation 602,203 610,742
126,389 1,016,758
Number of fully paid weighted average ordinary shares ('000) 85,293 85,293
Earnings / (Loss) per share - Basic and diluted (Rs)
Refinery operations (5.58) 4.76
Non-refinery operations 7.06 7.16
1.48 11.92
======================================================================================38. GENERAL38.1. Capacity and production Against the designed annual refining capacity of 14.700 million (2009: 14.700 million) US barrels the actual throughput during the year was 13.493 million (2009: 13.126 million) US barrels. The actual throughput was lower than the annual refining capacity on account of low product upliftments in certain periods of 2009-2010 and reductions in throughput to minimize losses during adverse periods of refinery margins. 38.2. Number of employees Total number of employees at the end of the year were 683 (2009: 699). 38.3. Date of authorisation These financial statements have been authorised for issue by the Board of Directors of the Company on September 29, 2010. |