APL Annual Report 2012

7/28/2019 APL Annual Report 2012

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1 Attock Petroleum Limited

Annual Report 2012

Financial Highlights 2

Our Vision 4

Our Mission 5

Business Review

Core Values 6

Corporate Strategy 7

Quality Policy Statement 9

Code of Conduct 10

Environment, Health & Safety Policy 15

Chairman’s Review 18

Governance

Board of Directors 20

Board Committees and Corporate

Information 21

Board & Management Committees and

their Terms of Reference 22

Awards and Achievements 24

Calendar of Major Events 25

Directors’ Report 26

Pattern of Shareholding 42

Review Report on Statement of

Compliance with the Code of Corporate

Governance 46

Statement of Compliance with the Code of

Corporate Governance 47

Financial Analysis

Six Years at a Glance 50

Vertical Analysis 54

Horizontal Analysis 56

Statement of Value Added 58

Financial Statements

Auditor’s Report to the Members 59

Balance Sheet 60

Prot and Loss Account 62

Statement of Comprehensive Income 63

Cash Flow Statement 64

Statement of Changes in Equity 65

Notes to and forming part of the Financial

Statements 66

Annual General Meeting

Notice of Annual General Meeting 96

Glossary 99

Proxy Form

Contents




Annual Report 2012

Gross ProtNet Sales Revenue

Financial Highlights

Operating Prot




Annual Report 2012

Prot Afer Tax Earnings Per Share Cash Dividend



To become a world class, professionally managed, fully

integrated, customer focused, Oil Marketing Company,offering Value added quality and environment friendly

products and services to its customers in Pakistan and

beyond.

Our Vision

Liberty Filling Station, Lahore



To continuously provide quality and environment friendly

petroleum products and related services to industrial,commercial and retail consumers, and exceeding their

expectations through reliability, economy and quality of

products and services. We are committed to beneting

the community and ensuring the creation of a safe,

responsible and innovative environment geared to

client satisfaction, end user gratication, employees’

motivation and shareholders value.

Our Mission




Annual Report 2012

Core Values

Ethical Principles and Moral Values

We promote a commitment to the highest moral values and ethical principles, demanding bothpersonal and professional dedication towardsthe realization of these values and principles.

Commitment and Cooperation

Two core fundamentals for the successof any business are complete employeecommitment and cooperation. At APL wefoster an environment of solid teamwork andprofessionalism to ensure that our employeesengage in both personal and professionaldevelopment.

Environment Consciousness

We believe that it is our responsibilityto safeguard our natural resources for

future generations and actively engage inenvironment friendly practices, policies andmanagement techniques.

Corporate Social Citizenship

We strongly believe in the promotion of societal well-being and awareness within onescommunity, actively engaging in activities andinitiatives to meet this objective.

Maximum Stakeholder Return

Through our streamlined business processesand commitment to total quality managementwe seek to ensure maximum companyperformance and rewards for shareholdersand stakeholders alike.




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CorporateStrategy

To enable APL to attain new heights of success through investment in humancapital, implementation of lean productionmethods and a commitment to Total Qualityand Environment Management, we plan, withthe help of Almighty Allah, to further expandour existing retail network and penetrateuntapped markets with pro-active measuresand effective planning, implementation and

execution.

Our objective is to successfully deliverpremium quality products and services,which will translate into maximum customersatisfaction. Beyond the technical excellenceof our products, we intend to set an examplein all dimensions of our entrepreneurialactivities. We see ourselves committed to theself-dened models of economic, social andecological responsibility, which means notonly economic success but also conscientiousinteraction with our employees, people and

the environment.




Annual Report 2012

Quality Van at Rawalpindi Bulk Oil Terminal (RBT)Quality Assurance Unit to ensure delivery of premium quality products to customers




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Quality PolicyStatement

To further enhance its commitment towards

Quality, APL management has set the following

quality objectives:

1 The primary objective of the Quality Management

System is to ensure conformance to product

specications of all goods shipped to customers.

2 Clearly identify and understand our internal

and external customers stated and hidden

needs, to develop a way of working to meet

and exceed the expectations of customers.

3 Provide condence to management, our

employees, clients, and stakeholders that therequirements for quality are being fullled

and maintained and that quality improvementis continuously taking place.

4 To develop measurement techniques to gaugeperformance for improving effectiveness of ourservices, operations and quality management

system.

5 Fulll all quality system requirements stated in

our Quality Manual, including the requirements

of ISO 9001:2000.

6 To be a trustworthy and leading oil marketingorganization for providing consistent high

quality products and services in the market.

With this vision we want to create a culture of

continuous quality improvement at APL.




Annual Report 2012

Attock Petroleum Limited has committed itself

to conduct its business in an honest, ethical

and legal manner. The Company wants to be

seen as a role model in the community by its

conduct and business practices. All this dependson the Company’s personnel, as they are the

ones who are at the forefront of Company’s

affairs with the outside world. Every member

of the Company has to be familiar with his / her

obligations in this regard and has to conducthim / her accordingly.

This statement in general is in accordance withCompany goals and principles that must be

interpreted and applied within the framework

of laws and customs in which the Company

operates. This code will be obligatory for each

director and employee to adhere to.

1. Respect, Honesty andIntegrity

Directors and employees are expected

to exercise honesty, objectivity and due

diligence in the performance of their

duties and responsibilities. They are also

directed to perform their work with due

professionalism.

2. Compliance with Laws,Rules and Regulations

The Company is committed to comply, and

take all reasonable actions for compliance,with all applicable laws, rules and regulations

of state or local jurisdiction in which the

Company conducts business. Every director

and employee, no matter what position heor she holds, is responsible for ensuring

compliance with applicable laws.

3. Full and Fair Disclosure

Directors and employees are expected to help

the Company in making full, fair, accurate,timely, and understandable disclosure, incompliance with all applicable laws and

regulations, in all reports and documentsthat the Company les with, furnishes to

or otherwise submits to, any governmentalauthorities in the applicable jurisdiction,

and in all other public communications

made by the Company. Employees or

directors who have complaints or concernsregarding accounting, nancial reporting,internal accounting control or auditing

matters are expected to report such

complaints or concerns in accordance

with the procedures established by theCompany’s Board of Directors.

4. Prevent Conflict of Interest

Directors and employees, irrespective of

their function, grade or standing, must

avoid conict of interest situations between

their direct or indirect (including membersof immediate family) personal interests

and the interest of the Company.

Employees must notify their directsupervisor of any actual or potential conict

of interest situation and obtain a written

ruling as to their individual case. In case

of directors, such ruling can only be givenby the Board, and will be disclosed to the

shareholders.

5. Trading in Company Shares

Trading by directors and employees in

the Company shares is possible only

in accordance with the more detailed

guidelines issued from time to time by

corporate management in accordance

with applicable laws.

6. Inside Information

Directors and employees may become

aware of information about Company thathas not been made public. The use of suchnon-public or “inside” information about

the Company other than in the normal

performance of one’s work, profession

or position is unethical and may also bea violation of law.

Directors and employees becoming aware

Code of Conduct




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of information which might be price sensitivewith respect to the Company’s shares have

to make sure that such information is treatedstrictly condentially and not disclosed to

any colleagues or to third parties other

than on a strict need-to-know basis.

Potentially price sensitive information

pertaining to shares must be brought promptly

to the attention of the management, who willdeliberate on the need for public disclosure.Only the Management will decide on such

disclosure. In case of doubt, seek contact

with the CFO.

7. Media Relations andDisclosures

To protect commercially sensitive information,

nancial details released to the media shouldnever exceed the level of detail provided

in quarterly and annual reports or ofcialstatements issued at the presentation of thesegures. As regards topics such as nancial

performance, acquisitions, divestments,

joint ventures and major investments,no information should be released to the

press without prior consultation with the

Management. Employees should not make

statements that might make third parties

capable of “insider trading” on the stock

market.

8. Corporate OpportunitiesDirectors and Employees are expected not to:

a) take personal use of opportunities

that are discovered through the use

of Company property, information or

position.

b) use Company property, information,

or position for personal gains.

Directors and employees are expected toput aside their personal interests in favor

of the Company interests.




Annual Report 2012

9. Competition and FairDealing

The Company seeks to outperform its

competition fairly and honestly. Stealingproprietary information, possessing tradesecret information that was obtained withoutthe owner’s consent, or inducing such

disclosures by past or present employees

of other companies is prohibited. Eachdirector and employee is expected to dealfairly with Company’s customers, suppliers,competitors, and other employees. No

one is to take unfair advantage of anyone

through manipulation, abuse of privilegedinformation, or any other unfair practice.

The Company is committed to selling itsproducts and services honestly and will

not pursue any activity that requires to

act unlawfully or in violation of this Code.

Bribes, kickbacks, and other improper

payments shall not be made on behalf of the Company in connection with any of

its businesses. However, tip, gratuity orhospitality may be offered if such act is

customary and is not illegal under applicablelaw. Any commission payment should be justied by a clear and traceable service

rendered to the Company. The remunerationof agents, distributors and commissionerscannot exceed normal business rates andpractices. All such expenses should be

reported and recorded in the Company’sbooks of account.

10. Equal EmploymentOpportunity

The Company believes in providing equal

opportunity to everyone around. The

Company laws in this regard have to

be complied with and no discrimination

upon race, religion, age, national origin,

gender, or disability is acceptable. No

harassment or discrimination of any kindwill be tolerated; directors and employeesneed to adhere standards with regard to

child labor and forced labor.

11. Work Environment

All employees are to be treated with

respect. The Company is highly committedto providing its employees and directors

with a safe, healthy and open work environment, free from harassment,

intimidation, or personal behavior not

conducive to a productive work climate. In

response the Company expects consummateemployee allegiance to the Company and

due diligence in his job.

The Company also encourages constructivereasonable criticism by the employees of

the management and its policies. Such anatmosphere can only be encouraged in anenvironment free from any prospects of

retaliation due to the expression of honestopinion.

12. Protect Health, Safety andSecurity

The Company intends to provide each

director and employee with a safe work

environment and comply with all applicable

health and safety laws. Employees and

directors should avoid violence andthreatening behavior and report to work

in fair condition to perform their duties.

13. Record Keeping

The Company is committed to compliance

with all applicable laws and regulations thatrequire the Company to maintain proper

records and accounts which accurately andfairly reect the Company’s transactions.

It is essential that all transactions be

recorded and described truthfully, timely

and accurately on the Company’s books. Nofalse, articial or misleading transactions

or entries shall be reected or made in the

books or records of the Company for any

reason.Records must always be retained or

destroyed according to the Company’s

record retention policies.

Code of Conduct




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14. Protection of Privacy andConfidentiality

All directors and employees, both during

and after their employment, must respect

the exclusivity and trade secrets of the

Company, its customers, suppliers and othercolleagues and may not disclose any such

information unless the individual or rm

owning the information properly authorizesthe release or disclosure.

All the Company’s assets (processes, data,

designs, etc) are considered as certied

information of the Company. Any disclosurewill be considered as grounds, not only for

termination of services/employment, but

also for criminal prosecution, legal action

or other legal remedies available during

or after employment with the Company to

recover the damages and losses sustained.

15. Protection and Proper use of Company Assets / Data

Each director and employee is expected to

be the guardian of the Company’s assets

and should ensure its efcient use. Theft,

carelessness and waste have a direct and

negative impact on the Company’s protability.

All the Company assets should be used for

legitimate business purposes only.

The use, directly or indirectly, of Companyfunds for political contributions to any

organization or to any candidate for public

ofce is strictly prohibited.

Corporate funds and assets will be utilized

solely for lawful and proper purposes in

line with the Company’s objectives.

16. Gift Receiving

Directors and employees will not accept

gifts or favors from existing or potential

customers, vendors or anyone doing orseeking to do business with the Company.

However, this does not preclude giving or




Annual Report 2012

receiving gifts or entertainment which arecustomary and proper in the circumstances,

provided that no obligation could be, or beperceived to be, expected in connection

with the gifts or entertainment.

17. Communication

All communications, whether internal or

external, should be accurate, forthrightand where ever required, condential.

The Company is committed to conduct

business in an open and honest manner

and provide open communication channelsthat encourage candid dialogue relative toemployee concerns. The Company stronglybelieves in a clean desk policy, and expectsits employees to adhere to it not only for

neatness but also security purposes.

18. Employee Retention

High quality employee’s attraction and

retention is very important. The Company willoffer competitive packages to the deservingcandidates. The Company strongly believesin personnel development and employee-

training programs are arranged regularly.

19. Internet use / InformationTechnology

As a general rule, all Information Technology

related resources and facilities are provided

only for internal use and/or business-relatedmatters. Information Technology facilitieswhich have been provided to employees

should never be used for personal gain

or prot, should not be misused during

work time, and remain the property of theCompany. Disclosure or dissemination of

condential or proprietary information

regarding the Company, its products, or itscustomers outside the ofcial communication

structures is strictly prohibited.

20. Compliance with BusinessTravel Policies

The safety of employees while on a businesstrip is of vital importance to the Company.The Company encourages the traveler

and his/her supervisor to exercise good

judgment when determining whether travel

to a high-risk area is necessary and is for

the Company’s business purposes.

It is not permitted to combine business

trips with a vacation or to take along

spouse, relative or friend without the priorwritten authorization from Management.

21. Compliance

It is the responsibility of each director and

employee to comply with this code. Failure todo so will result in appropriate disciplinary

action, including possible warning issuance,suspension, and termination of employment,legal action and reimbursement to the

Company for any losses or damages resultingfrom such violation. Compliance also includes

the responsibility to promptly report any

apparent violation of the provisions of this

code.

Any person meeting with difculties in

the application of this code should refer

to the management.

Code of Conduct




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Environment, Health &Safety Policy

Attock Petroleum Limited’s overriding objectiveis to ensure that none of our activities harm

our employees, the public or the environment.

In order to achieve this objective…

We embrace a comprehensive policy on the

Environment, Safety and Health that includes:-

1. We consider that none of our activities are

more important than health and safety of any individual or protection of environment.

2. As a minimum we will comply with all relevantlegislation and any other requirements to

which we subscribe.

3. We will encourage a pro-active safety cultureand ensure that each employee is trained,

experienced and competent to perform his

or her duties.

4. We will strive to remove all causes of accidents and events and to minimize the

consequences of such if they occur.

5. We will ensure that all our operations are

performed, and seen to be performed safely.

6. We will strive to continually improve

performances in all areas of EHS performance

and priorities on the basis of risk.

7. We will apply our EHS policy, standards,

objectives and targets to our Retail Outlets,

Distributors, Dealers and Contractors.




Annual Report 2012

Model Filling Station, F-11, Islamabad




Annual Report 2012

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Annual Report 2012

It gives me immense pleasure to welcome you

to the 17th Annual General Meeting of the

Company and to present Company’s annual

report and audited nancial statements for the year ended June 30, 2012.

I welcome the newly elected Board and recentlyappointed various Board Committees and hopethat with their in-depth knowledge and vast

relevant experience, Company will not only

continue its momentum and pace of growth

but will also lead to the new horizons. I would

also like to place on record my appreciation of

the contributions made by the outgoing Board

and Board Committees.

Our management and key decision makers starting

with our CEO under the guidance of the Board

maintained the focus, the commitment and the

determination. Your Company performed well

against tough scal challenges and unstable

economy of the Country, which continued to suffer

from the consequences of a number of factors

like increased prices of petroleum products,

un-resolved problem of mounting circular debt,power and gas shortages and unstable law and

order situation. These economic conditions

forced annual oil industry trade for petroleumproducts to decline by 4% from 20.334 million

M. Tons to 19.437 million M. Tons during the

year under review. Ban on export of petroleum

products during the year not only adversely

impacted the protability of the Company and

the industry as a whole but also deprived the

Country of the valuable foreign exchange.

Despite all the challenges, your Company managed

to increase its overall market share to 9.1%

from 7.9% of last year due to its targeted and

pro-active marketing strategy. This is reectionof our commitment and focus on operational

excellence, nancial discipline, risk management

and principles of good corporate governance.

Based on the foregoing analysis, your Companyrecorded sales revenue of Rs. 152,843 million

(2010-11: Rs. 109,395 million) and prot aftertax of Rs. 4,120 million (2010-11: Rs. 4,257

million) translated into earnings per share of

Rs. 59.61 (2010-11: Rs. 61.58). The Company’sfundamentals remained strong. We increased our

cash ows from operations, provided attractivereturn to the shareholders and maintained a

strong balance sheet.

We believe corporate social responsibility and

sustainability are integrated business platformsthat build long-term shareholders value. These

platforms foster innovation, drive operationalefciency, improve environmental performanceand strengthen our employees’ relationships

with our customers, suppliers and communities.

Chairman’s Review




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From a strategic standpoint, in the years to

come, we will be critically focused on consumer-driven innovation in services and products

as the primary driver of organic growth. We

believe that directions of the Board with strong vision will position your Company to deliver

consistent above-average returns over the longterm, driven by sustainable protable growth.

As we move forward, you will see us creating aCompany with a broader and stronger agenda

for growth. We will be better positioned to

compete based on our strengths and better

equipped to respond to the evolving needs of

our consumers.

I wish to place on record my appreciation and

gratitude for the support received from Ministryof Petroleum & Natural Resources, Oil and Gas

Regulatory Authority and other Government

organizations and business partners.

In conclusion, I want to assure you that we arecommitted to making our investors’ interests

our foremost priority. I rmly believe that APL ison the right track to translate its achievements

into equally outstanding performance for its

stakeholders.

Dr. Ghaith R. PharaonChairman

Dubai, UAE.

September 15, 2012




Annual Report 2012

Board of Directors

Dr. Ghaith R. PharaonChairmanNon Executive Director

Mr. Shuaib A. Malik Chief Executive Ofcer &

Alternate Director toDr. Ghaith R. PharaonExecutive Director

Mr. M. Adil Khattak Non Executive Director

Mr. Abdus SattarIndependent Non ExecutiveDirector

Mr. Iqbal A. Khwaja Alternate Director toMr. Laith G. PharaonNon Executive Director

Mr. Babar Bashir NawazNon Executive Director

Mr. Rehmat Ullah BardaieCompany Secretary &

Alternate Director toMr. Wael G. PharaonExecutive Director

Mr. Laith G. PharaonNon Executive Director

Mr. Wael G. PharaonNon Executive Director




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Board Committees andCorporate Information

Audit Committee

Mr. Abdus Sattar

Chairman

Mr. Babar Bashir Nawaz

Mr. Iqbal A. Khwaja

Human Resource andRemuneration Committee

Mr. Babar Bashir Nawaz

Chairman

Mr. M. Adil Khattak

Mr. Shuaib A. Malik

Auditors

A. F. Ferguson & Co.

Chartered Accountants

Registered Office

Attock House, Morgah

Rawalpindi, Pakistan.

Legal Advisor

Ali Sibtain Fazli Associates

Mall Mansion, 30-The Mall, Lahore.

Share Registrar

THK Associates (Pvt.) Limited

Ground Floor, State Life Building-3

Dr. Ziauddin Ahmed Road, Karachi.

Tel: +92-21-111-000-322

Fax: +92-21-35655595

Bankers

Allied Bank Limited

Faysal Bank Limited

Habib Bank Limited

JS Bank Limited

National Bank of Pakistan

Standard Chartered Bank

The Bank of Khyber

The Bank of Punjab

The Bank of Tokyo Mitsubishi

United Bank Limited

Correspondence Address



Tel: +92-51-5127250-55

Fax: +92-51-5127272

Email: [email protected]

Website: www.apl.com.pk




Annual Report 2012

The management is committed to follow the

principles of good Corporate Governance and

being a responsible corporate entity it believes intransparency of system for effective monitoringand to enhance governance process. Keeping in

view the requirements of new Code of Corporate

Governance issued on 10th

April, 2012 the Boardhas revised the terms of reference of Audit

Committee and established Human Resource

and Remuneration Committee. The following

Board Committees have been formed to assist

the Board in fullling its responsibilities.

Audit Committee

The Audit Committee reviews the nancial and

internal reporting processes, the system of

internal control, management of risk and the

internal and external audit processes. The AuditCommittee ensures that the Company has a

sound system of internal nancial and operational

controls. It assists the Board in discharge of its

duciary responsibilities. The Audit Committeereviews the periodical statement of the Companybefore their respective presentation to the

Board and ensures implementation of relevant

controls for the integrity of the information.

The Committee recommends to the Board of

Directors the appointment of external auditorsand discusses major observations with the

external auditors arising from interim review

and nal audit. In doing so, Committee also

reviews the management letter issued by the

external auditors and management’s response

thereto. The Committee also goes through the

legal matters which may signicantly impact the

nancial statements and ensure compliance withrelevant statutory requirements. Besides this,

monitoring compliance with the best practices

of corporate governance, investigating any

violations thereof and ensuring coordinationbetween internal and external auditors are alsothe main responsibilities of the Audit Committee.

Board & ManagementCommittees and their

Terms of Reference

Board Committees




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Human Resource and RemunerationCommittee

The Board has established Human Resource

and Remuneration Committee which is

responsible for recommending human resourcemanagement policies. The Committee is also

responsible for recommending the selection,

evaluation, compensation (including retirement

benets) of key management personnel and forconsideration and approval on recommendationsof Chief Executive Ofcer on such matters for

key management positions who report directly

to Chief Executive Ofcer.

Budget Committee

The Committee comprises of three directors

and their responsibility is to assist the Board in

formulating the annual budget and forecasts andreviewing analysis of actual performance with

those budgeted/forecasted. The Committee alsokeeps an eye on the developments and trends

in the industry to assist the Board in planning

for future capital intensive investments and

growth of the Company.

Share Transfer Committee

The Committee consists of three directors and

is responsible for dealing with matters relating

to the shares of the Company like transfers,

issuance of new shares and related legal and

regulatory requirements.

Management Committees

Executive Committee

Consist of all departmental heads and chaired

by the CEO, they meet regularly to coordinate

the activities, accomplishments and otherpertinent issues.

Information Technology

CommitteeResponsible for automation of process and system

in line with latest technology and developments.

Budget Committee

Reviews and recommends the annual budget

proposals and discusses deviations with the

departmental heads.

Retail Outlet DevelopmentCommittee

Responsible for recommending proposals for

setting up retail outlets and reviewing progress.

Pricing Committee

Reviews and recommends the pricing of deregulated products on regular intervals.

Safety And Technical Committee

Reviews and monitors, the safety, health and

environment matters for safe operations and

better environment and matters relating to

technological problems and operational risks

affecting the business.




Annual Report 2012

Awards and Achievements

Best Corporate Report Award-20092nd Position in Fuel and Energy Sector

Jointly organised by the Institute of Chartered Accountants of Pakistan and the

Institute of Cost and Management Accountants of Pakistan.

Top Companies Award- 2009 Amongst Top Twenty Five Companies

Organised by Karachi Stock Exchange.




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Calendar of Major Events

July 25, 2011: Applied Cathodic Protection system for pigable pipeline from PARCOto APL Terminal at Machike

January 04, 2012: Entered into Agreement with vendor for Construction of CalibrationGantries at Machike & Karachi Bulk Oil Terminals

January 25, 2012: Commissioned two tanks at Machike Bulk Oil

Terminal enhancing storage capacity by 10,000

M. Tons

February 28, 2012: Secured HSD and PMG supplies contract of Pakistan Air Force for the nancial year 2012-13

March 15, 2012: Installed oating screen in PMG tank at MachikeBulk Oil Terminal to minimize the product losses and to save environment

March 30, 2012: APL’s market share in the bunker segment for Furnace Fuel Oil reachedmore than 61%, making it number one (01)

March 31, 2012: Lahore Flagship outlet commissioned – Liberty

Filling Station

April 06, 2012: Commenced HSD supplies to the sheries segment

April 14, 2012: Commissioning of First Multi-Fuel retail outlet in Joint Venture with Askari Welfare Trust

April 26, 2012: Commissioned 350th retail outlet of the Company

April 30, 2012: Secured Jet Fuel (JP-1) supplies contract of Pakistan Army for nancial year 2012-13

May 15, 2012: Commissioned three tanks of total 11,000 M. Tons storage capacity

at Rawalpindi Bulk Oil Terminal

May 15, 2012: Entered into agreement with vendor for installation of Smart Signage(LED Lit) at retail outlets thereby decreasing the electricity consumption

May 30, 2012: Upgraded ow metering system thereby increasing operationalefciency at Rawalpindi Bulk Oil Terminal

June 16, 2012: Entered into blending agreement with a new,better blending plant for production of higherquality lubricants

June 30, 2012: Highest number of outlets commissioned since1999; a total of 44 outlets were commissioned




Annual Report 2012

Directors’ ReportThe Board of Directors of Attock Petroleum

Limited (APL) is pleased to present the annual

report on the performance and progress of the

Company together with the audited nancial

statements of the Company for the year ended

June 30, 2012.

NATURE OF BUSINESS

APL commenced its operations in 1998 as an

Oil Marketing Company (OMC) and is engaged

in the downstream petroleum sector’s businesswith main objective to distribute petroleum

products in the market. Major products marketedare Furnace Oil (FO), High Speed Diesel (HSD),Premier Motor Gasoline (PMG), Asphalt, Kerosene

Oil, Light Diesel Oil and Lubricants. The Oil

industry operates under the regulations framed

by the Government of Pakistan (GoP) throughMinistry of Petroleum and Natural Resources

(MP&NR) and Oil and Gas Regulatory Authority(OGRA). OGRA regulates prices of some of the

petroleum products whereas prices of other

products are deregulated and announced by theCompany as per its own internal mechanism.

MARKET AND INDUSTRY REVIEW

Global

Economy around the world has been underpressure during the year under review. Recession

has only compounded problems and made

the situation unstable for investors around

the world. Industries have also been facing

quite turbulence in the context of ever rising

macro-economic risks. The recovery is gaining

strength but unfortunately several geo-politicaland macro-economic risks continue to strike theemerging market economies. Policymakers arestruggling to nd ways to manage the present

economic challenges while preparing their

economies to perform well in an increasingly

complex global landscape.

DomesticThe year under review was quite challenging

for the Country too and it has also been not

far from the predicament and therefore faced

high unemployment rate, high security risks,

serious energy constraints, low investment andsevere economic conditions. Gross Domestic

Product (GDP) growth has been stuck at alevel, which is half of the level of Pakistan’s

long-term trend potential and is lower than

what would be required for sustained increasesin employment and income and a reduction

in poverty. Notwithstanding above Pakistan

has been able to withstand the pressures and

improve its performance in some key areas andthe economy is now showing signs of modest

recovery.

Industry OverviewTotal industry trade of oil products was 19.4million M. Tons which is 4% less than last year.

The decrease was due to restriction on export

of petroleum products to Afghanistan and less




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consumption of fuel by Power sector due to its

inability to settle the dues on time. On the otherhand, sale of PMG has shown sharp increase

due to excessive Compressed Natural Gas (CNG)load shedding and use in generators.

MANAGEMENTS OBJECTIVES AND STRATEGIES

The ultimate objectives of the Company’smanagement are to come upto the expectations

of all the stakeholders and adopt a balanced

approach in this regard, which is also reected

precisely in the corporate strategy and the

core values. The priorities for action are set

and reviewed at regular intervals to grab the

available opportunities and minimise the risks andthreats arising due to change in the internal andexternal environment. Consequently, decisions

are taken to implement the change managementkeeping in view long term perspective.

FINANCIAL PERFORMANCE

For the year 2011-12, the Company reported

net sales revenue of Rs. 152,843 million,representing 40% increase over last year

(2010-11: Rs. 109,395 million). This was result

of higher international oil prices in rst three

quarters of the year and increase in volume

sold. However, price decrease in last quarter of the year, stiff competition and ban on export of

petroleum products to Afghanistan during the

year led to the decrease in the protability of

the Company. Accordingly, the Company earnedprot after tax of Rs. 4,120 million (2010-11:

Rs. 4,257 million) and earnings per share of

Rs. 59.61 (2010-11: Rs. 61.58).

Rs. in MillionProt before taxation 5,647

Less: Provision for taxation 1,527Prot after taxation 4,120 Add: un-appropriated prot as at July 1, 2011 10,828Prot available for appropriation 14,948 Appropriations during the year: Transfer to special reserve by associated companies 27Final cash dividend for the year 2010-11 @ 300% (Rs. 30/-per share of Rs. 10/- each) 2,074Interim cash dividend for the year 2011-12 @ 175% (Rs. 17.50per share of Rs. 10/- each) 1,210

3,311Balance as at June 30, 2012 11,637

Subsequent Effects:Final cash dividend for the year 2011-12 @ 325% (Rs. 32.50per share of Rs. 10/- each) 2,246

9,391

Financial results and appropriations for the year ended June 30, 2012 have been summarized below:

Price Trend Analysis




Annual Report 2012

DividendThe directors have recommended a nal cash

dividend @ 325% (Rs. 32.50 per share of Rs.

10/- each). This is in addition to interim cash

dividend @ 175% (Rs. 17.50 per share of Rs.

10/- each) already declared and paid to the

shareholders thereby making a total of 500%

for the year 2011-12.

Contribution towards the EconomyThe Company contributed Rs. 31,899 million

towards national ex-chequer in the form of

taxes and levies and earned precious foreign

exchange of US$ 58 million through export of

products. The Company is providing premier

quality petroleum products even in remote areasparticularly the northern areas and interior

Sindh through its network of retail outlets and

distributors contributing to the development of

the local labour force thus promoting employment,

technical know-how and improving the earningcapacities of the residents.

Significant changes in financialpositionTotal assets increased by Rs. 6,051 million

compared with June 30, 2011, to Rs. 30,531

million and total liabilities increased by Rs. 5,214million, to Rs. 18,148 million. Non current assets

increased by 235 million to Rs. 2,468 million,

representing expenditure on enhancement of

storage capacities and construction of retail

outlets. Net current assets increased by Rs. 694

million, to Rs. 10,328 million due to cash inowfrom the operations. Trade debts increased

by Rs. 6,054 million representing increase in

receivable balance from Power Producers owingto circular debts issue and also contributed

corresponding increase in trade payables.

Cash flowThe Company generated cash from operating

activities amounting to Rs. 4,214 millionand used Rs. 3,435 million in investing and

nancing activities. At the end of the year, the

Company had cash and cash equivalents of Rs.

6,814 million and is well positioned to meet its

future commitments and development plans.

The management does not envisage any future

nancial problem in a year ahead.

MARKETING AND OPERATIONSREVIEW

For a successful business, it is important that

the sales and marketing play a pivotal role. Themain objectives revolve around understanding

the customers and their needs, the future trends,

competitor activities, legislation amendments

and a multitude of other uncertain variables.

The aggressive approach of the sales and

marketing department enabled your Company toincrease its aggregate market share from 7.9%

to 9.1%. This has only been possible by criticallyanalyzing the risks, sharing inter-departmentalknowledge-base and taking strategic decisions.

APL due to its aggressive and exceptional

marketing strategies entailing expansion of

network has successfully managed to increase itssales volume for PMG and HSD which increasedby 34% and 36% respectively. Consequently,

APL’s market share also increased from 6.0%

to 6.6% for PMG and from 7.6% to 10.5% for

HSD. In FO, APL sales decreased by 3.2% as

total industry sales declined by 7.7% due to

circular debt issue.

Directors’ Report




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Efcient supply planning, access to better

infrastructure and larger storages; enabled your

Company to take on some of the largest client

organizations within Pakistan this year. After a

successful rst year and winning the contract for

Pakistan Army supplies for the second consecutive year, APL, based on its reputation of reliability and

premium quality products was able to convince

two diesel-based power plants to rely on us for

all their petroleum needs for power generation.Subsequently, we were also able to win a contractfor HSD and PMG supplies to Pakistan Air Force.

Moreover, your Company also penetrated its

HSD supplies in the industrial sector. The well

coordinated utilization of resources, careful

analysis of market behaviours, competitive

pricing and seamless product supplies; all acted

as catalyst which has resulted in your Company’s

ever growing market share.

The Company recognizes the importance of

improving and expanding infrastructure for

sustaining economic development and gaining

the competitive edge. So despite stiff investment

conditions in the Country, your Company has

managed to endure several projects and invest

in this sector signicantly. By virtue of terminal-

revamping project, APL has further enhanced

its storage capacity by 1.5 times totalling upto

approx 36,000 M. Tons and also has hospitality

arrangements for storage upto the extent of 16,000M. Tons. This is mainly to cater the ever rising

needs originated as a result of the expansion of our retail network, being the preferred suppliers

in the defence and industrial sectors due to our

reliability, the future fuels requirements and the

over-all growth in your Company’s market share.

During this year, your Company witnessed the

highest number of retail outlet development in a

year; a staggering 44 outlets were commissioned as

a result of the untiring efforts of the management.By the end of the year under review, APL was

successfully managing a network of 362 retail

outlets across the country.

The development of infrastructure, enhancementin storage capacities and increase in retail network Source: Oil Companies Advisory Committee (OCAC)




Annual Report 2012

has ultimately augmented operations throughputsignicantly over last year. Calibration facilitywas also established and made operative at

Machike Bulk Oil Terminal. Furthermore, it isthe Company’s goal to ensure quality of the

product delivered to its customers and in thisregard, the quality assurance laboratory at

Machike Bulk Oil Terminal is being upgradedand is expected to be fully operational by rsthalf of 2012-13. Conducting all activities in

light of the Health, Safety and EnvironmentStandards and adoption of Best-BusinessPractices have also been emphasized over theperiod under review.

RISK MANAGEMENT

Volatility in International Oil Prices and

regulatory risk: Oil prices are directly affectedby its global supply and demand. Factors thatinuence demand and supply include economicconditions, operational issues, natural disasters,weather, political instability and conicts or

actions by major oil-exporting countries. In

addition to this, GoP also controls oil prices

through implementation and adjustment of levies, duties and subsidies. Prices are thekey drivers of an OMC’s protability. Higher

prices translate into increased revenues and

vice versa. Further, imposition / enhancementof duties, taxes, other levies and revision in

pricing formula of products remain a possibility.

The Company continues to focus on efcientmix of products maintaining sustainability andgenerating growth. GoP has demonstrated a

strong commitment and taken a number of stepsto deregulate the Oil and Gas sector in linewith the overall vision of a liberalized economy.

Geo-political and Security Risk: Developmentin politics, laws and regulations can affect ouroperations. Potential developments include importand export restrictions, international conicts,wars, civil unrest, unfavourable law and ordersituation that threaten the safe operations of

the Company. The operations of the Companyare dependent on timely availability of thepetroleum products provided by the reneries.Reneries, in turn, are dependent upon the

availability of crude oil from the gulf region,except for Attock Renery Limited, which usesindigenous crude oil. Political instability in the

region is a risk that may cause a disruptionin the supply of petroleum products thereby

affecting Company operations negatively.

In order to mitigate this risk and ensuresmooth supplies of petroleum products, theCompany enjoys the support of reneriesunder proper agreements.

Intense Competition: The Company operates ina very challenging business environment andfaces competition to access market, services and

human resources. The domestic oil market isbecoming more competitive by each passing daydue to new entrants and changing operationaldynamics. Lately, the oil sector has been thefocus of deregulatory reforms that have beenundertaken by the GoP which inturn paved theway for erce competition compelling OMCs

to adopt better marketing practices in order

to retain market share.

The Company is a member of the only fullyintegrated group in Pakistan with upstream and

downstream operations. With aggressive retailoutlets rollout plan and increased marketingefforts, the Company’s management is wellplaced to compete effectively in this increasinglycompetitive industry.

Directors’ Report




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Human Resource: The Company’s key human

resources are essential for the smooth functioning

of its operations. Loss of personnel or our

inability to attract quality human resources

could affect our operational performance and

growth strategy.

The Company offers a variety of compensation

packages in line with the market and enabling

environment ensuring retention of quality manpower.

Health, Safety and Environment: The Company issubject to various local, national and international

laws and regulations relating to health, safety

and the environment. Compromising on these

laws and regulations could result in increased

costs of compliance as well as penalties for

non-compliance.

The Company has an effective and comprehensive

Health, Safety and Environment policy andrelated practices ensuring full commitment fromall employees and contractual workers towards

the preservation of environment and propagationof health and safety procedures to mitigate this

risk and support safe and secure execution of

all critical operating activities.

Information technology failures: The Company

maintains a central database environment whereonline transactions are entered in real time. An

automated procedure generates a daily data

backup at midnight. Further, incremental andmonthly backups are generated and maintainedon hard drives and data tapes. An offsite backupmechanism is also in place as an additional

measure to safeguard data integrity.

CORPORATE GOVERNANCE

The Company is fully compliant with the Code of Corporate Governance as per the requirements

of the Listing Regulations. Specic statements

are being given hereunder:

1) The nancial statements, prepared by the

management, present its state of affairs




Annual Report 2012

Quality Filling Station, H-8, Islamabad




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Annual Report 2012

fairly, the result of its operations, cash

ows and changes in equity.

2) Proper books of account have been maintained.

3) Appropriate accounting policies have been

consistently applied in preparation of nancialstatements and accounting estimates are

based on reasonable and prudent judgment.

4) International Financial Reporting Standards,

as applicable in Pakistan, have been followed

in preparation of nancial statements.

5) The system of internal control is sound in

design and has been effectively implemented

and monitored.

6) There are no signicant doubts upon theCompany’s ability to continue as a going

concern.

7) Signicant deviations from the last year’s

operating results have been disclosed in

this Report.

8) Key operating and nancial data of last six

years in summarized form is annexed with

the Report.

9) All major Government levies in the normalcourse of business, payable as at June 30,

2012, have been cleared subsequent to the year-end.

10) The Company does not envisage corporate

restructuring or discontinuation of its

operations in the foreseeable future.

11) The value of investments in employeeretirement funds based on the latest audited

accounts as of June 30, 2012 are as follows:Employees’ Gratuity fund Rs. 10.748 millionEmployees’ Provident fund Rs. 8.220 million

12) The total number of Company’s shareholdersas at June 30, 2012 was 2,360. The patternof shareholding as at June 30, 2012 alongwith necessary disclosures as requiredunder the Code of Corporate Governanceis annexed.

A separate statement of compliance signed bythe Chief Executive Ofcer is included in this Annual Report.

Board of Directors structure, itsCommittees and meetings

On completion of statutory terms of three years,the election of directors was held on March5, 2012 and new directors assumed ofceseffective March 10, 2012. The new Boardcomprises of the Chairman, Chief ExecutiveOfcer and ve non-executive directors of whomone is independent director. The newly elected

Board possesses necessary skills, competence,knowledge and experience to deal with variousbusiness issues. The Chairman of the Board isa non-executive director.

Directors’ Report




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During the year, the Board of Directors met vetimes for review and consideration of signicantand routine matters including those referred toit by Board committees. The number of meetingsattended by each director during the year is

shown below:

Overseas directors attended the meetings eitherin person or through alternate directors

1 Dr. Ghaith R. Pharaon, Mr. Laith G. Pharaon,Mr. Wael G. Pharaon, Mr. Shuaib A. Malik,

Mr. M. Adil Khattak and Mr. Babar Bashir

Nawaz were re-elected.

2 Mr. Abdus Sattar was elected in place of

Mr. Munaf Ibrahim.

Audit Committee

The Audit Committee was re-constituted by thenewly elected Board of Directors. The Committee

consists of three members comprising of non-executive directors including the Chairman

having relevant expertise and experience. The

Chairman of the committee is an independent

director. The Audit Committee met four times

during the year and these meetings were held

prior to the Board meetings. Attendance by

each member is as follows.

Sr. Name Number of Number of No. meetings meetings

attended eligible

to attend1 Dr. Ghaith R. Pharaon 5 52 Mr. Laith G. Pharaon 5 53 Mr. Wael G. Pharaon 5 54 Mr. Shuaib A. Malik 5 55 Mr. M. Adil Khattak 5 56 Mr. Babar Bashir Nawaz 5 57 Mr. Munaf Ibrahim 3 38 Mr. Abdus Sattar 2 2

Sr. Name Number of Number of No. meetings meetings

attended eligibleto attend

1 Mr. Abdus Sattar 1 12 Mr. Babar Bashir Nawaz 4 43 Mr. M. Adil Khattak 3 34 Mr. Iqbal A. Khwaja 4 4




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Annual Report 2012

Human Resource and RemunerationCommittee

The Board has established Human Resource

and Remuneration Committee comprising of

two non-executive directors and Chief ExecutiveOfcer in June 2012.

CORPORATE SUSTAINABILITY

Training, Human Resource and Organizational

Development: Continuous human resource

development on both technical and behaviouralskills result in highly trained work force which

ultimately is a promise of not only higherproductivity levels but also helps in keeping

the staff turn over to lowest possible stages.

The Company continuously strives to create

systems and for developing a conducive

environment through training and development,which promote professional capabilities

enabling employees to deliver optimum

results. Moreover Company comes across at

human assets/ employees with honesty and

equality and by offering good pay and benets,

continuous training and development. This

will ensure and effectively achieve not only a

number of performance related gains, but also

increase Company’s productivity, protability

and competitive advantage, thus achieving a

stronger economic performance.

Corporate Social Responsibility: The Company

remains steadfast in its role to promote corporate

social activities and has always desired to play a

proactive role for social welfare and development

of human capital.

Through the APL Employees Welfare Trust

(Trust), the Company awards educational

scholarships to employees’ children based on

nancial need and academic excellence. The

Trust also provides health and other welfare

assistance to the needy staff members. Further,in order to pass on the benet of success we

have set up number of outlets in the rural and

deprived areas to provide employment and

improving quality of life of the local populace.

Health, Safety and Environment Consciousnessand protection measure: Our goal is an accidentand injury free workplace, with awless safe

work practices and conditions throughout our

operations. APL considers safety, security,

health and environmental compliance issues

extremely important. Company management

systems provide a framework for setting targets,measuring performance and reporting results,

thus employing these systems to achieve continual

improvement in our overall health and safety

performance.

The Company makes appropriate training

instruction and supervision for personnel to

enable them to attain the knowledge and skill

levels necessary to perform their work incidentfree and maintaining appropriate contingency

arrangements and continually monitoring,

reviewing and improving HSE performanceso that our activities can continue without

interruption.

Directors’ Report




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Energy Conservation: The Company has taken

number of steps to optimise energy consumption

at its various locations across the country by

introducing energy efcient processes like installing

LEDs (Light Emitting Diodes) in signages at retail

outlets. Before taking this step, a single pylon usedto consume 1978W (2KW) of electricity which is

now reduced to 700W (0.7KW) only. Similarly, one

spreader consumed 440W of electricity which has

now been reduced to 36W only.

In addition, Variable Speed Drive System has beenintroduced and functioning properly at Machike

Bulk Oil Terminal which is saving around 40%-

60% of energy.

Furthermore, employees are encouraged throughon-going awareness programmes to conserve

the use of electricity, gas and water. Emphasis is

also made on minimum use of paper (for printing

purposes) unless really needed, sharing of resources

and other similar green-activities.

AUDITORS

The present auditors Messrs A. F. Ferguson and Co.,Chartered Accountants, retire and offer themselvesfor reappointment. The Board has recommended

for the re-appointment of the retiring auditors for

the year ending June 30, 2013, as suggested by

the audit committee.

FUTURE PLANS AND PROJECTSConsidering the exponential growth of your Company,

the team is consistently generating breakthrough

ideas and emphasizes on out-of-the-box proactive

thinking which is the only probable direction

towards a stable and successful business growth

and thus, ensure compatibility with the future.

Your Company is currently undergoing a number

of daunting tasks and up-gradations, in order to

be one-step ahead of the unforeseen. Our historic

growth patterns necessitate continuous improvementsin all facets of the business operations. Some of

the major projects currently under progress are

as follows:




Annual Report 2012

• Finalization of land procurement plans forerecting state-of-the-art Bulk Oil Terminals

at strategic locations of Mehmood Kot -Multan, Gatti - Faisalabad and Shikarpur.

• To ensure quality of products; a quality

laboratory at Rawalpindi Bulk Oil Terminal

shall be established to guarantee theright-product and also enhance customer’s

satisfaction.

• Commissioning of the calibration facility

at our Karachi Bulk Oil Terminal to ensurecorrectness of measurements and quantity.

• Enter into the high-street distributionchannel for its lubricants division in order

to penetrate further into new businesssegments.

• Further upgradation of our vehicle and eet

management systems; resulting in bettercontrols and optimum performance of all

carriages and higher safety and healthstandards.

• Further upgradation of our ERP system toincorporate better controls and real-time

reports for management’s review anddecision-making.

• Upgradation of all retail outlets (over the

next few years) towards the Green Signage

Program (the smart and energy efcientL.E.D based lighting systems) to ensure itscontribution towards a better and greenerenvironment for the community. The new

Green Signage Systems will result in energy-savings upto almost 70% as compared to

conventional lighting systems.

• Striving for continuous improvements in

everything that we do, the Company also

intends to upgrade its terminals even further.In this regard, Automated Tank Gauges (ATG)on all its storage tanks will be undertaken;resulting in real-time accurate measurements/data for all products. Enhancement of storagefacilities in-line with the forecasted demandin the future shall enable smooth supplies

to our valuable clientele. Introduction of

the Variable Speed Drive Systems to furtherreduce electricity consumption are all littlesteps towards achieving higher efciencies

in all operational activities.

ACKNOWLEDGEMENT

We would like to take this opportunity to

express our deep appreciation and gratitudeto our esteemed shareholders, Government

of Pakistan and regulatory bodies for their

continuing cordial relationship and candid

support towards the Company’s progress.

The Board also appreciates the dedication,

commitment and contributions of employees,

customers and other stakeholders. The results

of your Company are a reection of the trust

and condence placed by all stakeholders in

the Company.

On behalf of the Board

Shuaib A. Malik

Chief Executive

Dubai, UAE.

September 15, 2012

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Annual Report 2012

Sr. Number of Having Shares Shares Held PercentageNumber Shareholders From To

1 374 1 100 13,750 0.022 435 101 500 112,323 0.163 1,116 501 1,000 937,973 1.364 264 1,001 5,000 614,190 0.895 53 5,001 10,000 389,497 0.566 20 10,001 15,000 240,481 0.357 13 15,001 20,000 234,528 0.34

8 11 20,001 25,000 239,120 0.359 4 25,001 30,000 111,587 0.16

10 7 30,001 35,000 232,474 0.3411 5 35,001 40,000 183,624 0.2712 2 40,001 45,000 86,399 0.1213 8 45,001 50,000 378,801 0.5514 3 50,001 55,000 159,529 0.2315 3 55,001 60,000 172,501 0.2516 2 60,001 65,000 124,109 0.1817 2 65,001 70,000 136,956 0.2018 1 75,001 80,000 75,456 0.1119 2 90,001 95,000 182,513 0.2620 1 95,001 100,000 99,000 0.14

21 2 110,001 115,000 228,016 0.3322 1 115,001 120,000 118,542 0.1723 2 125,001 130,000 251,840 0.3624 2 130,001 135,000 264,994 0.3825 1 140,001 145,000 145,000 0.2126 2 145,001 150,000 297,875 0.4327 3 170,001 175,000 524,246 0.7628 1 195,001 200,000 197,117 0.2929 1 210,001 215,000 215,000 0.3130 1 220,001 225,000 224,031 0.3231 1 230,001 235,000 231,958 0.3432 1 245,001 250,000 248,400 0.3633 1 265,001 270,000 268,779 0.3934 1 305,001 310,000 308,500 0.45

35 1 530,001 535,000 532,000 0.7736 1 545,001 550,000 547,551 0.7937 1 570,001 575,000 575,000 0.8338 1 645,001 650,000 648,662 0.9439 1 740,001 745,000 741,050 1.0740 1 810,001 815,000 810,179 1.1741 1 925,001 930,000 926,917 1.3442 1 1,355,001 1,360,000 1,359,126 1.9743 1 1,520,001 1,525,000 1,520,640 2.2044 1 4,610,001 4,615,000 4,612,351 6.6745 1 4,850,001 4,855,000 4,850,496 7.0246 1 4,860,001 4,865,000 4,863,348 7.0447 1 15,120,001 15,125,000 15,120,115 21.88

48 1 23,760,001 23,765,000 23,763,456 34.38

2,360 69,120,000 100.00

Pattern of Shareholding As on June 30, 2012

Corporate Universal Identification Number: 0035831




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Categories of Shareholders As on June 30, 2012

Sr. Categories Number of Shares Percentage

No. Shareholders Held

1 DIRECTORS, CHIEF EXECUTIVE OFFICER, 9 4,688,736 6.78THEIR SPOUSES & MINOR CHILDREN

2 ASSOCIATED COMPANIES, UNDERTAKINGS 5 50,118,055 72.51 AND RELATED PARTIES

3 NATIONAL INVESTMENT TRUST & INDUSTRIAL 1 114,616 0.17CORPORATION OF PAKISTAN

4 BANKS, DEVELOPMENT FINANCE INSTITUTIONS, 11 3,122,779 4.52NON-BANKING FINANCIAL INSTITUTIONS

5 INSURANCE COMPANIES 7 2,177,399 3.15

6 MODARABAS & MUTUAL FUNDS 31 2,061,848 2.98

7 FOREIGN COMPANIES 8 1,197,882 1.73

8 TRUSTS AND FUNDS 53 1,052,690 1.52

9 JOINT STOCK COMPANIES 63 875,132 1.27

10 GENERAL PUBLIC (LOCAL) 2,143 3,674,367 5.32

11 GENERAL PUBLIC (FOREIGN) 29 36,496 0.05

12 SHAREHOLDERS HOLDING 10% OR MORE SHARES 2 38,883,571 56.26




Annual Report 2012

Categories Number of Shares

Shareholders Held

ASSOCIATED COMPANIES, UNDERTAKINGS

AND RELATED PARTIES

Pharaon Investment Group Limited Holding s.a.l. 1 23,763,456

Attock Renery Limited 1 15,120,115

Attock Petroleum Limited Employees Welfare Trust 1 4,863,348

Pakistan Oilelds Limited 1 4,850,496The Attock Oil Company Limited 1 1,520,640

5 50,118,055

MUTUAL FUNDS

CDC - Trustee PICIC Growth Fund 1 547,551

CDC - Trustee PICIC Investment Fund 1 268,779

CDC - Trustee HBL Stock Fund 1 231,958

CDC - Trustee PICIC Energy Fund 1 174,740

CDC - Trustee Pakistan Stock Market Fund 1 174,506

CDC - Trustee MCB Dynamic Stock Fund 1 118,542

CDC - Trustee Pakistan Premier Fund 1 92,293CDC - Trustee Meezan Islamic Fund 1 69,366

CDC - Trustee Pak Strategic Alloc. Fund 1 56,384

CDC - Trustee Pakistan Capital Market Fund 1 56,117

CDC - Trustee IGI Stock Fund 1 50,800

CDC - Trustee HBL Islamic Stock Fund 1 43,599

CDC - Trustee Al Meezan Mutual Fund 1 23,500

CDC - Trustee HBL Multi - Asset Fund 1 20,000

CDC - Trustee NIT-Equity Market Opportunity Fund 1 19,950

CDC - Trustee Meezan Tahaffuz Pension Fund 1 19,000

CDC - Trustee ABL Stock Fund 1 17,897

CDC - Trustee Meezan Capital Protected Fund 1 14,000

CDC - Trustee Lakson Equity Fund 1 13,292

CDC - Trustee Nafa Stock Fund 1 13,242

CDC - Trustee KSE Meezan Index Fund 1 11,900

Trustee - Pakistan Pension Fund - Equity Sub Fund 1 6,096

CDC - Trustee HBL IPF Equity Sub Fund 1 4,700

CDC - Trustee AKD Index Tracker Fund 1 4,050

CDC - Trustee HBL PF Equity Sub Fund 1 3,085

CDC - Trustee JS Islamic Pension Savings Fund-Equity Account 1 2,000

CDC - Trustee Askari Equity Fund 1 1,221

MC FSL - Trustee JS KSE-30 Index Fund 1 1,163

CDC - Trustee Nafa Multi Asset Fund 1 808

CDC - Trustee Nafa Islamic Multi Asset Fund 1 50

30 2,060,589

Pattern of Shareholding

Information Required UnderCode of Corporate Governance




Annual Report 2012

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Categories Number of Shares

Shareholders Held

DIRECTORS, THEIR SPOUSES AND MINOR CHILDREN

Dr. Ghaith R. Pharaon 1 1

Mr. Laith G. Pharaon 1 1

Mr. Wael G. Pharaon 1 1

Mr. Shuaib A. Malik 1 4,612,351

Mr. Abdus Sattar 1 500

Mr. Babar Bashir Nawaz 1 1

Mr. M. Adil Khattak 1 29,377

Mr. Iqbal A. Khwaja 1 11,080

Mr. Rehmat Ullah Bardaie 1 35,424

9 4,688,736

EXECUTIVES 5 54,832

PUBLIC SECTOR COMPANIES AND CORPORATIONS 2 363,016

BANKS, DEVELOPMENT FINANCE INSTITUTIONS,

NON-BANKING FINANCIAL INSTITUTIONS, INSURANCE COMPANIES, TAKAFUL, MODARABAS

AND PENSION FUNDS 33 5,632,284

SHAREHOLDERS HOLDING 5% OR MORE

VOTING RIGHTS

Pharaon Investment Group Limited Holding s.a.l. 1 23,763,456

Attock Renery Limited 1 15,120,115

Attock Petroleum Limited Employees Welfare Trust 1 4,863,348

Pakistan Oilelds Limited 1 4,850,496

Mr. Shuaib A. Malik 1 4,612,351

5 53,209,766

Trade in shares by Directors, Executives* and their spouses and minor children during 2011-12.

Name Number of Shares Number of Shares

Purchased Sold

Mr. Shuaib A. Malik NIL 36,001

Mr. Iqbal A. Khwaja 1,000 NIL

*“EXECUTIVE means Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,Head of Internal Audit, Company Secretary and other employees of the Company who are drawingan annual basic salary of Rupees 500,000 or more.”




Annual Report 2012

We have reviewed the Statement of Compliance with the best practices contained in the Code of

Corporate Governance prepared by the Board of Directors of Attock Petroleum Limited, to complywith the Listing Regulations of the Karachi Stock Exchange Limited where the Company is listed.

The responsibility for compliance with the Code of Corporate Governance (the Code) is that of

the Board of Directors of the Company. Our responsibility is to review, to the extent where such

compliance can be objectively veried, whether the Statement of Compliance reects the status

of the Company’s compliance with the provisions of the Code and report if it does not. A review

is limited primarily to inquiries of the Company personnel and review of various documents

prepared by the Company to comply with the Code.

As part of our audit of nancial statements we are required to obtain an understanding of the

accounting and internal control systems sufcient to plan the audit and develop an effective

audit approach. We are not required to consider whether the Board’s statement on internal

control covers all risks and controls, or to form an opinion on the effectiveness of such internal

controls, the Company’s corporate governance procedures and risks.

Further, the Code requires the company to place before the audit committee, and upon

recommendation of the audit committee, before the board of directors for their review and

approval related party transactions distinguishing between transactions carried out on terms

equivalent to those that prevail in arm’s length transactions and transactions which are not

executed at arm’s length price recording proper justication for using such alternate pricing

mechanism. We are only required and have ensured compliance of requirement to the extent

of approval of related party transactions by the board of directors upon recommendation of the

audit committee. We have not carried out any procedures to determine whether the related party

transactions were undertaken at arm’s length price or not.

Based on our review, nothing has come to our attention which causes us to believe that the

Statement of Compliance does not appropriately reect the Company’s compliance, in all materialrespects, with the best practices contained in the Code of Corporate Governance as applicable

to the Company for the year ended June 30, 2012.

Chartered AccountantslslamabadSeptember 15, 2012

Engagement partner: M. lmtiaz Aslam

A. F. FERGUSON & CO., Chartered Accountants, a member rm of the PwC network PIA Building, 3rd Floor, 49 Blue Area, Fazl-ul-Haq Road, P.O. Box 3021, Islamabad-44000, Pakistan

Tel: +92 (51) 2273457-6o/ 2870045-8; Fax: +92 (51) 2277924; < www.pwc.com/pk>

Karachi: State Life Building No. 1-C, I.I. Chundrigar Road, P.O. Box 4716, Karachi-74000, Pakistan; Tel: +92 (21) 32426682-5/32426711-5; Fax: +92 (21) 32415007

Lahore: 23-C, Aziz Avenue, Canal Bank, Gulberg V, P.O. Box 39, Lahore-54660, Pakistan; Tel: +92 (42) 35715864-71; Fax: +92 (42) 35715872

Kabul: House No. 1, Street No. 3, Darulaman Road, Ayoub Khan Meina, Opposite Ayoub Khan Mosque, Kabul, Afghanistan; Tel: +93 (779) 315320, +93 (799) 315320

A. F. FERGUSON & CO.

Review Report to the Members on Statement of Compliance with bestpractices of Code of Corporate Governance




Annual Report 2012

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Statement of Compliancewith the Code of Corporate Governance for the Year Ended

June 30, 2012

This statement is being presented to comply with the Code of Corporate Governance (the Code)contained in regulation No. 35 xl of the Listing Regulations of the Karachi Stock Exchange

for the purpose of establishing a framework of good governance, whereby a listed company ismanaged in compliance with the best practices of corporate governance.

The Company has applied the principles contained in the Code in the following manner:

1. The Company encourages representation of independent non-executive directors and directorsrepresenting minority interests on its Board of Directors. At present the Board includes:

Category Names

• Independent Director* Mr. Abdus Sattar

• Non Executive Directors Dr. Ghaith R. PharaonMr. Laith G. PharaonMr. Wael G. PharaonMr. Babar Bashir NawazMr. M. Adil Khattak Mr. Iqbal A. Khwaja (Alternate Director)

• Executive Directors Mr. Shuaib A. Malik

Mr. Rehmat Ullah Bardaie (Alternate Director)

*The independent director meets the criteria of independence under clause i (b) of the Code 2002 since the present

Board was elected in March 2012, prior to issuance of the revised Code in April 2012. The Code 2012 requires

atleast one independent director as per the denition of independent director, which would be applicable from

next election of directors.

2. The directors have conrmed that none of them is serving as a director on more than sevenlisted companies.

3. All the resident directors of the Company are registered as taxpayers and none of them hasdefaulted in payment of any loan to a banking company, a Development Finance Institutionor a Non-Banking Financial Institution, or being a member of a stock exchange, has beendeclared as a defaulter by that stock exchange.

4. No casual vacancy occurred in the Board during the year.

5. The Company has prepared a ‘Code of Conduct’ and has ensured that appropriate stepshave been taken to disseminate it throughout the Company along with its supporting policiesand procedures.

6. The Board has developed vision and mission statements, overall corporate strategy andsignicant policies of the Company. A complete record of particulars of signicant policiesalong with the dates on which they were approved or amended has been maintained.

7. All the powers of the Board have been duly exercised and decisions on material transactions,including appointment and determination of remuneration and terms and conditions of employment of the Chief Executive Ofcer, other executive and non-executive directors,have been taken by the Board.

8. The meetings of the Board were presided over by the Chairman and in his absence, by adirector elected by the Board for this purpose and the Board met at least once in everyquarter. Written notices of Board meetings, along with agenda and working papers, werecirculated at least seven days before the meetings. The minutes of the meetings wereappropriately recorded and circulated.




Annual Report 2012

9. Most of the Directors meet the exemption requirements of the Directors’ training programand one of the Directors completed this program during the year 2010-11. No such programwas arranged during 2011-12.

10. The Board has approved appointment of Chief Financial Ofcer, Company Secretary and Headof Internal Audit, including their remuneration and terms and conditions of employment.

11. The Directors’ Report for the year has been prepared in compliance with the requirementsof the Code and fully describes the salient matters required to be disclosed.

12. The nancial statements of the Company were duly endorsed by Chief Executive Ofcerand Chief Financial Ofcer before approval of the Board.

13. The directors, Chief Executive Ofcer and executives do not hold any interest in the sharesof the Company other than that disclosed in the pattern of shareholding.

14. The Company has complied with all the corporate and nancial reporting requirements of the Code.

15. The Board has formed an Audit Committee. It comprises three members of whom all arenon-executive directors and the chairman of the committee is an independent director.

16. The meetings of the Audit Committee were held at least once every quarter prior to approvalof the interim and nal results of the Company as required by the Code. The terms of reference of the Committee have been formed and advised to the Committee for compliance.

17. The Board has formed a Human Resource and Remuneration Committee. It comprises of three members, of whom two members including the Chairman are non-executive directors.

18. The Board has set up an effective internal audit function.

19. The statutory auditors of the Company have conrmed that they have been given a satisfactoryrating under the quality control review program of the Institute of Chartered Accountantsof Pakistan, that they or any of the partners of the rm, their spouses and minor childrendo not hold shares of the Company and that the rm and all its partners are in compliancewith International Federation of Accountants (IFAC) guidelines on code of ethics as adoptedby the Institute of Chartered Accountants of Pakistan.

20. The statutory auditors or the persons associated with them have not been appointed toprovide other services except in accordance with the Listing Regulations and the auditorshave conrmed that they have observed IFAC guidelines in this regard.

21. The ‘closed period’, prior to the announcement of interim/nal results, and business decisions,which may materially affect the market price of Company’s securities, was determined and

intimated to directors, employees and stock exchange.

22. Material/price sensitive information has been disseminated among all market participantsat once through stock exchange.

23. We conrm that all other material principles enshrined in the Code have been complied with.

Shuaib A. Malik

Chief Executive

Dubai, UAE.

September 15, 2012

Statement of Compliance




Annual Report 2012

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Annual Report 2012

Six Years at a Glance

2012 2011 2010 2009 2008 2007

Prot & Loss Summary

Net sales Rs thousand 152,843,437 109,394,725 82,791,918 61,863,152 53,242,330 44,130,536

Gross prot Rs thousand 4,587,853 4,714,218 3,759,884 3,292,350 2,748,401 2,044,971

Operating prot Rs thousand 6,357,819 6,081,834 4,587,928 3,659,248 3,358,954 2,181,509

Prot before tax Rs thousand 5,646,740 6,017,511 4,846,309 4,280,419 3,529,552 2,435,606

Prot after tax Rs thousand 4,120,315 4,256,511 3,594,309 3,082,419 2,641,552 1,728,606

Prot before interest, taxes, depreciation Rs thousand 5,822,179 6,162,575 4,973,607 4,363,053 3,606,739 2,499,034

and amortization (EBITDA)

2012 2011 2010 2009 2008 2007

Balance Sheet Summary

Share capital Rs thousand 691,200 691,200 576,000 576,000 480,000 400,000Reserves Rs thousand 11,692,123 10,855,008 8,660,577 6,506,268 5,055,849 3,054,297Shareholders’ equity Rs thousand 12,383,323 11,546,208 9,236,577 7,082,268 5,535,849 3 ,454,297Non- current liabilities Rs thousand 412,729 320,316 288,908 251,538 135,137 126,821Current assets Rs thousand 28,062,795 22,247,396 19,429,233 16,408,160 13,881,634 7,995,195Current liabilities Rs thousand 17,735,089 12,613,827 11,917,167 10,938,626 9,842,350 5,402,649Net current assets Rs thousand 10,327,706 9,633,569 7,512,066 5,469,534 4,039,284 2,592,546Property, plant and equipment Rs thousand 1,601,576 1,374,767 1,217,217 1,130,875 922,621 601,326Other non-current assets Rs thousand 866,770 858,188 796,202 733,397 709,081 387,246

Capital expenditure during the year Rs thousand 402,248 308,200 215,396 293,032 399,198 144,324Total assets Rs thousand 30,531,141 24,480,351 21,442,652 18,272,432 15,513,336 8,983,767Total liabilities Rs thousand 18,147,818 12,934,143 12,206,075 11,190,164 9 ,977,487 5,529,470

Equity in 2012 increased by 7% over 2011 represented by prot retained in the business. Net current assets increased by 7% due to cash inows from operations. Non-currentassets increased by 17% representing expenditure on enhancement of storage capacities and construction of retail outlets. Current assets increased by 26% representingincrease in receivable balance from Power Producers owing to circular debts issue and also contributed corresponding increase in current liabilities.

Net sales revenue in 2012 increased by 40% from 2011 due to increase in average prices of products and volume sold. Protability decreased by 3% as compared to 2011due to price decrease in last quarter, stiff competition and ban on export of petroleum products to Afghanistan during 2011-12.




Annual Report 2012

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Cash Flow Summary

Cash ows of operating activities Rs thousand 4,213,709 (2,668,549) 3,358,779 1,999,307 2,995,311 2,110,251

Cash ows of investing activities Rs thousand (155,887) 966,107 318,114 849,611 (386,025) (5,165)

Cash ows of nancing activities Rs thousand (3,278,768) (1,944,108) (1,437,573) (1,533,404) (559,115) (319,305)

Effect of exchange rate changes Rs thousand 4,470 1,903 623 1,505 911 124

Net change in cash and cash equivalents Rs thousand 783,524 (3,644,647) 2,239,943 1,317,019 2,051,082 1,785,905

Cash & cash equivalents at end of the year Rs thousand 6,813,730 6,030,206 9,674,853 7,434,910 6,117,891 4,066,809

In 2012, these ratios are less as compared to last year due to decrease in protability despite increase in sales revenue.

In 2012, the Company generated net cash and cash equivalents of Rs. 783 million due to increase in cash collection from the customers. At the end of the year, the Companyhad cash and cash equivalents of Rs. 6,814 million.

2012 2011 2010 2009 2008 2007

Protability and Operating Ratios

Gross prot % 3.00 4.31 4.54 5.32 5.16 4.63Net prot to sales % 2.70 3.89 4.34 4.98 4.96 3.92EBITDA margin to sales % 3.81 5.63 6.01 7.05 6.77 5.66Operating leverage % (15.51) 75.21 39.08 131.39 217.53 312.51Return on equity % 34.44 40.96 44.05 48.86 58.77 62.86Return on capital employed % 34.44 40.96 44.05 48.86 58.77 62.86




Annual Report 2012

In 2012, these ratios are low compared to last year due to increase in current assets and current liabilities resulting from increasing circular debt issue. However these arestill on higher side as compared to industry average and represent Company’s strong ability to meet its short term obligations. Cash ow from operations to sales is positivein 2012 due to cash generation from operations.

Six Years at a Glance




Annual Report 2012

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Investment / Market Ratios

Basic and diluted EPS Rs 59.61 61.58 62.40 53.51 55.03 43.22Basic and diluted EPS (restated) Rs 59.61 61.58 52.00 44.60 38.22 25.01Price earning Times 7.96 6.08 4.63 5.94 7.86 11.60Dividend yield % 11.98 12.08 8.61 9.16 3.85 3.51Dividend payout % 83.88 67.39 48.08 46.72 36.34 32.40Dividend cover Times 1.19 1.48 2.08 2.14 2.75 3.09Cash dividends Rs thousand 3,456,000 2,868,480 1,728,000 1,440,000 960,000 560,000Cash dividend per share Rs 50.00 41.50 30.00 25.00 20.00 14.00Bonus shares issued Rs thousand - - 115,200 - 96,000 80,000Bonus per share % - - 20.00 - 20.00 20.00Break-up value per share Rs 179.16 167.05 160.36 122.96 115.33 86.36Market value per share

Year end Rs 474 374 289 318 432 501Highest (during the year) Rs 478 401 405 432 634 501Lowest (during the year) Rs 316 281 275 130 404 295

2012 2011 2010 2009 2008 2007

Capital Structure Ratios

Financial leverage - - - - - -Weighted average cost of debt - - - - - -Debt to equity 0:100 0:100 0:100 0:100 0:100 0:100Interest cover - - - - - -

Market Share % 9.10 7.90 7.00 6.60 6.50 7.00(Source: OCAC)

Represent enhanced return rate to shareholders through dividend and appreciation in shares value.




Annual Report 2012

2012 2011

Rs. (‘000) % Rs. (‘000) %

Balance Sheet Items

Property, Plant and Equipment 1,601,576 5.3 1,374,767 5.6

Other Non-Current Assets 866,770 2.8 858,188 3.5

Current Assets 28,062,795 91.9 22,247,396 90.9

Total Assets 30,531,141 100.0 24,480,351 100.0

Shareholders’ Equity 12,383,323 40.6 11,546,208 47.2

Non- Current Liabilities 412,729 1.4 320,316 1.3

Current Liabilities 17,735,089 58.0 12,613,827 51.5

Total Shareholders’ Equity & Liabilities 30,531,141 100.0 24,480,351 100.0

Prot & Loss Items

Net Sales 152,843,437 100.0 109,394,725 100.0

Cost of Products Sold 148,255,584 97.0 104,680,507 95.7

Gross Prot 4,587,853 3.0 4,714,218 4.3

Operating Prot 6,357,819 4.2 6,081,834 5.6

Prot Before Taxation 5,646,740 3.7 6,017,511 5.5

Prot for the Year 4,120,315 2.7 4,256,511 3.9

Vertical Analysis




Annual Report 2012

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2010 2009 2008 2007

Rs. (‘000) % Rs. (‘000) % Rs. (‘000) % Rs. (‘000) %

1,217,217 5.7 1,130,875 6.2 922,621 5.9 601,326 6.7

796,202 3.7 733,397 4.0 709,081 4.6 387,246 4.3

19,429,233 90.6 16,408,160 89.8 13,881,634 89.5 7,995,195 89.0

21,442,652 100.0 18,272,432 100.0 15,513,336 100.0 8,983,767 100.0

9,236,577 43.1 7,082,268 38.8 5,535,849 35.7 3,454,297 38.5

288,908 1.3 251,538 1.4 135,137 0.9 126,821 1.4

11,917,167 55.6 10,938,626 59.9 9,842,350 63.4 5,402,649 60.1

21,442,652 100.0 18,272,432 100.0 15,513,336 100.0 8,983,767 100.0

82,791,918 100.0 61,863,152 100.0 53,242,330 100.0 44,130,536 100.0

79,032,034 95.5 58,570,802 94.7 50,493,929 94.8 42,085,565 95.4

3,759,884 4.5 3,292,350 5.3 2,748,104 5.2 2,044,971 4.6

4,587,928 5.5 3,659,248 5.9 3,358,954 6.3 2,181,509 4.9

4,846,309 5.9 4,280,419 6.9 3,529,552 6.6 2,435,606 5.5

3,594,309 4.3 3,082,419 5.0 2,641,552 5.0 1,728,606 3.9




Annual Report 2012

Horizontal Analysis

2012 2011

Rs. (‘000) % Rs. (‘000) %

Balance Sheet Items

Property, Plant and Equipment 1,601,576 16.5 1,374,767 12.9

Other Non-Current Assets 866,770 1.0 858,188 7.8

Current Assets 28,062,795 26.1 22,247,396 14.5

Total Assets 30,531,141 24.7 24,480,351 14.2

Shareholders’ Equity 12,383,323 7.3 11,546,208 25.0

Non-Current Liabilities 412,729 28.9 320,316 10.9

Current Liabilities 17,735,089 40.6 12,613,827 5.8

Total Shareholders’ Equity & Liabilities 30,531,141 24.7 24,480,351 14.2

Prot & Loss Items

Net Sales 152,843,437 39.7 109,394,725 32.1

Cost of Products Sold 148,255,584 41.6 104,680,507 32.5

Gross Prot 4,587,853 (2.7) 4,714,218 25.4

Operating Prot 6,357,819 4.5 6,081,834 32.6

Prot Before Taxation 5,646,740 (6.2) 6,017,511 24.2

Prot for the Year 4,120,315 (3.2) 4,256,511 18.4

In 2012, Property, plant and equipment increased by 17% representing expenditure on enhancementof bulk oil storage capacities and construction of retail outlets. Current assets increased by 26%

due to increase in receivable resulting from increasing circular debts. This also contributed to

corresponding increase in current liabilities. Shareholder’s equity increased by 7% represented

by prot retained in the business.

Net sales revenue in 2012 increased by 40% from 2011 due to increase in average prices of

products and volume sold. Protability decreased by 3% as compared to 2011 due to price

decrease in last quarter, stiff competition and ban on export of petroleum products to Afghanistan

during 2011-12.




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2010 2009 2008 2007

Rs. (‘000) % Rs. (‘000) % Rs. (‘000) % Rs. (‘000) %

1,217,217 7.6 1,130,875 22.6 922,621 53.4 601,326 15.4

796,202 8.6 733,397 3.4 709,081 83.1 387,246 9.6

19,429,233 18.4 16,408,160 18.2 13,881,634 73.6 7,995,195 39.6

21,442,652 17.3 18,272,432 17.8 15,513,336 72.7 8,983,767 36.1

9,236,577 30.4 7,082,268 27.9 5,535,849 60.3 3,454,297 68.9

288,908 14.9 251,538 86.1 135,137 6.6 126,821 (2.2)

11,917,167 8.9 10,938,626 11.1 9,842,350 82.2 5,402,649 22.0

21,442,652 17.3 18,272,432 17.8 15,513,336 72.7 8,983,767 36.1

82,791,918 33.8 61,863,152 16.2 53,242,330 20.6 44,130,536 8.1

79,032,034 34.9 58,570,802 16.0 50,493,929 20.0 42,085,565 7.8

3,759,884 14.2 3,292,350 19.8 2,748,104 34.4 2,044,971 12.9

4,587,928 25.4 3,659,248 8.9 3,358,954 54.0 2,181,509 13.9

4,846,309 13.2 4,280,419 21.3 3,529,552 44.9 2,435,606 25.2

3,594,309 16.6 3,082,419 16.7 2,641,552 52.8 1,728,606 24.1




Annual Report 2012

2012 2011Rs. (‘000) % Rs. (‘000) %

Gross revenue and other income 180,387,692 130,071,946

Cost of sales and operating expenses (143,900,491) (101,763,526)

Total value added 36,487,201 28,308,420

DISTRIBUTION

Employee remuneration: 292,670 0.80 210,134 0.74

Government as:

Company taxation 1,526,425 4.18 1,761,000 6.22

Sales tax and levies 29,956,387 82.10 21,497,450 75.94

WPPF & WWF 415,965 1.14 437,706 1.55

Shareholders as:

Dividends 3,456,000 9.47 2,868,480 10.13

Society as:Donation - - 555 0.00

Providers of nance as:

Financial charges - - - -

Retained in business:

Depreciation 175,439 0.48 145,064 0.51

Net earnings 664,315 1.82 1,388,031 4.90

36,487,201 100.00 28,308,420 100.00

Statement of Value Added




Annual Report 2012

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We have audited the annexed balance sheet of Attock Petroleum Limited as at June 30, 2012 and therelated prot and loss account, statement of comprehensive income, cash ow statement and statementof changes in equity together with the notes forming part thereof, for the year then ended and we statethat we have obtained all the information and explanations which, to the best of our knowledge and belief,were necessary for the purposes of our audit.

lt is the responsibility of the Company’s management to establish and maintain a system of internal control,and prepare and present the above said statements in conformity with the approved accounting standardsand the requirements of the Companies Ordinance, 1984. Our responsibility is to express an opinion onthese statements based on our audit.

We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the above saidstatements are free of any material misstatement. An audit includes examining on a test basis, evidencesupporting the amounts and disclosures in the above said statements. An audit also includes assessingthe accounting policies and signicant estimates made by management, as well as, evaluating the overallpresentation of the above said statements. We believe that our audit provides a reasonable basis for ouropinion and, after due verication, we report that:

(a) in our opinion, proper books of account have been kept by the Company as required by the CompaniesOrdinance, 1984;

(b) in our opinion

(i) the balance sheet and prot and loss account together with the notes thereon have been drawnup in conformity with the Companies Ordinance, 1984, and are in agreement with the books of account and are further in accordance with accounting policies consistently applied;

(ii) the expenditure incurred during the year was for the purpose of the Company’s business; and

(iii) the business conducted, investments made and the expenditure incurred during the year werein accordance with the objects of the Company;

(c) in our opinion and to the best of our information and according to the explanations given to us, thebalance sheet, prot and loss account, statement of comprehensive income, cash ow statement andstatement of changes in equity together with the notes forming part thereof conform with approvedaccounting standards as applicable in Pakistan, and, give the information required by the CompaniesOrdinance, 1984, in the manner so required and respectively give a true and fair view of the stateof the Company’s affairs as at June 30, 2012 and of the prot, total comprehensive income, its cashows and changes in equity for the year then ended; and

(d) in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980),was deducted by the Company and deposited in the Central Zakat Fund established under section 7of that Ordinance.

Chartered AccountantslslamabadSeptember 15, 2012

Engagement partner: M. lmtiaz Aslam

A. F. FERGUSON & CO.

Auditor’s Report to the Members

A. F. FERGUSON & CO., Chartered Accountants, a member rm of the PwC network

PIA Building, 3rd Floor, 49 Blue Area, Fazl-ul-Haq Road, P.O. Box 3021, Islamabad-44000, PakistanTel: +92 (51) 2273457-6o/ 2870045-8; Fax: +92 (51) 2277924; < www.pwc.com/pk>

Karachi: State Life Building No. 1-C, I.I. Chundrigar Road, P.O. Box 4716, Karachi-74000, Pakistan; Tel: +92 (21) 32426682-5/32426711-5; Fax: +92 (21) 32415007

Lahore: 23-C, Aziz Avenue, Canal Bank, Gulberg V, P.O. Box 39, Lahore-54660, Pakistan; Tel: +92 (42) 35715864-71; Fax: +92 (42) 35715872

Kabul: House No. 1, Street No. 3, Darulaman Road, Ayoub Khan Meina, Opposite Ayoub Khan Mosque, Kabul, Afghanistan; Tel: +93 (779) 315320, +93 (799) 315320




Annual Report 2012

Note 2012 2011

Rupees (‘000)

SHARE CAPITAL AND RESERVES

Authorised capital 6 1,500,000 1,500,000

Issued, subscribed and paid up capital 6 691,200 691,200

Reserves

Special reserves 7 54,864 27,407

Revenue reserve

Unappropriated profit 11,637,259 10,827,601

12,383,323 11,546,208

NON CURRENT LIABILITIES

Long term deposits 8 245,729 209,316

Deferred income tax liability 9 167,000 111,000

412,729 320,316

CURRENT LIABILITIES

Trade and other payables 10 17,666,747 12,073,287

Provision for income tax 68,342 540,540

17,735,089 12,613,827

CONTINGENCIES AND COMMITMENTS 11

30,531,141 24,480,351

Balance Sheet As at June 30, 2012




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Note 2012 2011

Rupees (‘000)

NON CURRENT ASSETS

Property, plant and equipment 12 1,601,576 1,374,767

Long term investments in associated companies 13 856,037 842,957

Long term prepayments 14 10,733 15,231

CURRENT ASSETS

Stores and spares 15,620 9,729

Stock in trade 15 4,165,895 5,246,705

Trade debts 16 15,351,310 9,297,292

Advances, deposits, prepayments

and other receivables 17 843,072 1,459,703

Short term investments 18 873,168 1,015,930

Cash and bank balances 19 6,813,730 5,218,037

28,062,795 22,247,396

30,531,141 24,480,351

The annexed notes 1 to 37 form an integral part of these financial statements.

Shuaib A. Malik Chief Executive

Abdus SattarDirector




Annual Report 2012

Note 2012 2011

Rupees (‘000)

Sales 20 176,812,437 127,036,966

Sales tax (23,969,000) (17,642,241)

NET SALES 152,843,437 109,394,725

Cost of products sold 21 (148,255,584) (104,680,507)

GROSS PROFIT 4,587,853 4,714,218

Other operating income 22 2,659,322 1,978,931

Operating expenses 23 (889,356) (611,315)

OPERATING PROFIT 6,357,819 6,081,834

Finance cost 24 (1,211,047) (682,666)

Income on bank deposits and short term investments 25 889,427 962,838

Share of prot of associated companies 13 26,506 93,211

Other charges 26 (415,965) (437,706)

PROFIT BEFORE TAXATION 5,646,740 6,017,511

Provision for taxation 27 (1,526,425) (1,761,000)

PROFIT FOR THE YEAR 4,120,315 4,256,511

Earnings per share - Basic and diluted (Rupees) 28 59.61 61.58

The annexed notes 1 to 37 form an integral part of these nancial statements.

Profit and Loss AccountFor the year ended June 30, 2012






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2012 2011

Rupees (‘000)

PROFIT FOR THE YEAR 4,120,315 4,256,511

Other comprehensive income - -

TOTAL COMPREHENSIVE INCOME FOR THE YEAR 4,120,315 4,256,511

The annexed notes 1 to 37 form an integral part of these nancial statements.

Statement of Comprehensive IncomeFor the year ended June 30, 2012






Annual Report 2012

Note 2012 2011

Rupees (‘000)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from customers 149,782,129 109,434,933

Price differential claims received from Government 19,110 -

Payments for purchase of products and operating expenses (143,332,420) (110,141,454)

Other charges paid (348,900) (409,866)

Long term deposits received 36,413 30,408Income tax paid (1,942,623) (1,582,570)

Cash flow from operating activities 4,213,709 (2,668,549)

CASH FLOW FROM INVESTING ACTIVITIES

Addition to property, plant and equipment (402,248) (308,200)

Proceeds from sale of property, plant and equipment 477 6,786

Long term investments in associated companies (11,578) -

Short term investments (296,331) 317,588

Income received on bank deposits and short term investments 528,789 933,940

Dividend received from associated companies 25,004 15,993

Cash flow from investing activities (155,887) 966,107

CASH FLOW FROM FINANCING ACTIVITIES

Dividends paid (3,278,768) (1,944,108)

Cash used in financing activities (3,278,768) (1,944,108)

Effect of exchange rate changes 4,470 1,903

INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 783,524 (3,644,647)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 6,030,206 9,674,853

CASH AND CASH EQUIVALENTS AT END OF THE YEAR 29 6,813,730 6,030,206


Cash Flow StatementFor the year ended June 30, 2012






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Share capital Special Unappropriated Total reserves profit

Rupees (‘000)

BALANCE AS AT JUNE 30, 2010 576,000 17,043 8,643,534 9,236,577

Total comprehensive income for the year - - 4,256,511 4,256,511

Transferred to special reserves by

associated companies - 10,364 (10,364) -

Transaction with owners:

Bonus shares @ 20% relating to

the year ended June 30, 2010 115,200 - (115,200) -

Final dividend @ 200% relating

to year ended June 30, 2010 - - (1,152,000) (1,152,000)

Interim dividend @ 115% relating

to year ended June 30, 2011 - - (794,880) (794,880)

Total transactions with owners 115,200 - (2,062,080) (1,946,880)


Total comprehensive income for the year - - 4,120,315 4,120,315

Transferred to special reserves by

associated companies - 27,457 (27,457) -

Transaction with owners:

Final dividend @ 300% relating


Interim dividend @ 175% relating


Total transactions with owners - - (3,283,200) (3,283,200)



Statement of Changesin EquityFor the year ended June 30, 2012






Annual Report 2012

Notes to and forming part of the Financial StatementsFor the year ended June 30, 2012

1. LEGAL STATUS AND OPERATIONS

Attock Petroleum Limited (the Company) was incorporated in Pakistan as a public limited

company on December 3, 1995 and it commenced its operations in 1998. The Company

was listed on Karachi Stock Exchange on March 7, 2005. The registered office of the

Company is situated at Attock House, Morgah, Rawalpindi, Pakistan. The Company is

domiciled in Rawalpindi. The principal activity of the Company is procurement, storage

and marketing of petroleum and related products. Pharaon Investment Group Limited

Holding s.a.l holds 34.38% (2011: 34.38%) shares of the Company.

2. STATEMENT OF COMPLIANCE

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

Standards, amendments and interpretations to existing standards that are not yet

effective and have not been early adopted by the Company:

Effective date (annual

reporting periods beginning

on or after)

IFRS 7 Financial instruments: Disclosures (Amendments) January 1, 2013

IAS 1 Presentation of financial statements (Amendments) July 1, 2012

& January 1, 2013

IAS 12 Income Taxes (Amendments) January 1, 2012

IAS 16 Property, Plant and Equipment (Amendments) January 1, 2013

IAS 19 Employee benefits (Amendments) January 1, 2013

IAS 27 Separate Financial Statements (Revised) January 1, 2013

IAS 28 Investments in Associates and Joint Venture (Revised) January 1, 2013

IAS 32 Financial instruments: Presentation (Amendments) January 1, 2013

& 2014

IAS 34 Interim Financial Reporting (Amendments) January 1, 2013

IFRIC 20Stripping costs in the production phase of a surface mine January 1, 2013

The management anticipate that, except for the effects on the financial statementsof amendments to IAS 19 “Employee Benefits”, the adoption of the above standards,




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amendments and interpretations in future periods, will have no material impact on

the financial statements other than in presentation / disclosures. The application of

the amendments to IAS 19 would result in the recognition of cumulative unrecognized

actuarial gains / losses in other comprehensive income in the period of initial application,

which cannot be presently quantified on the date of the statement of financial position.

Further, the following new standards have been issued by the International Accounting

Standards Board (IASB), which are yet to be notified by the Securities and Exchange

Commission of Pakistan, for the purpose of their applicability in Pakistan:

Effective date (annual

periods beginning on or after)

IFRS 1 First-time adoption of International

Financial Reporting Standards July 1, 2009

IFRS 9 Financial instruments January 1, 2015

IFRS 10 Consolidated financial statements January 1, 2013

IFRS 11 Joint arrangements January 1, 2013

IFRS 12 Disclosure of interests in other entities January 1, 2013

IFRS 13 Fair value measurement January 1, 2013

The following interpretations issued by the IASB have been waived of by SECP effective January 16, 2012:

IFRIC 4 Determining whether an arrangement contains lease

IFRIC 12 Service concession arrangements

4. 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 Staff retirement benefits

Effective July 01, 2011, the Company operates following staff retirement benefit funds:

i) Approved defined benefit funded gratuity plan for all eligible employees. Actuarial

valuation is conducted periodically using the “Projected Unit Credit Method” and the

latest valuation was carried out as at June 30, 2012. The details of the valuation are given

in note 31. Past service cost in respect of vested benefits is recognised immediately as an

expense whereas past service cost related to non-vested benefits is recognised as expense

on a straight-line basis over the average period until such benefits become vested. Netactuarial gains and losses are recognised over the expected remaining service life of the

employees.




Annual Report 2012


ii) Approved contributory provident fund for all employees for which contributions of

Rs 4,185 thousand (2011: Rs Nil) are charged to income for the year.

4.3 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 decision.

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.

4.4 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.

4.5 Foreign currency transactions and translations

Transactions in foreign currencies are converted into Rupees at the rates of exchangeruling on the date of the transaction. All assets and liabilities denominated in foreign

currencies are translated into functional currency at exchange rate prevailing at the

balance sheet date. Foreign exchange gains and losses resulting from the settlement of

such transactions and from the translation of monetary items at year-end exchange rates,

are charged to income for the year.

4.6 Trade and other payables

Liabilities for creditors and other amounts payable are carried at cost which is the fair

value of the consideration to be paid in the future for the goods and/or services received

whether or not billed to the Company.

4.7 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.

4.8 Dividend distribution

Final dividend distributions to the Company’s shareholders are recognised as a liability in

the financial statements in the period in which the dividends are approved by the Company’sshareholders at the Annual General Meeting, while interim dividend distributions are

recognised in the period in which the dividends are declared by the Board of Directors.




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4.9 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and

impairment loss, if any, except for freehold land and capital work in progress which are

stated at cost.

Depreciation is charged to income on the straight line method to write off the cost of

an asset over its estimated useful life at the rates specified in note 12.1. Depreciation

on additions is charged from the month in which the asset is available for use and on

disposals upto the preceding month of disposal.

Maintenance and normal repairs are charged to income as and when incurred. Major

renewals and improvements are capitalised and the assets so replaced, if any, are retired.

Gains and losses on disposal of assets are included in income.

4.10 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 impairmentloss is recognised for the amount for which the assets’ 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 extent that asset’s carrying amount does not exceed the carrying amount that

would have been determined, net of depreciation or amortisation, if no impairment loss

has been recognised. An impairment loss or reversal of impairment loss is recognised in

income for the year.

4.11 Investments in associated companies

Investments in associated companies are accounted for using the equity method. Under

this method the investments are stated at cost plus the Company’s equity in undistributed

earnings and losses after acquisition, less any impairment in the value of individual

investment.

Unrealised gains on transactions between the Company and its associate are eliminated

to the extent of the Company’s interest in the associate.

4.12 Stores and spares

These are stated at moving average cost less any provision for obsolete and slow moving

items.




Annual Report 2012


4.13 Stock in trade

Stock in trade is valued at the lower of cost, calculated on a first-in first-out basis, and net

realisable value. Charges such as excise duty and similar levies incurred on unsold stock

of products are added to the value of the stock and carried forward.

Net realisable value signifies the sale price in the ordinary course of business less costs

necessary to make the sale.

4.14 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 are initially recognised at fair value plus

transaction costs for all financial assets and liabilities not carried at fair value through

profit or loss. 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 isincluded in income for the year.

4.15 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 financial assets. 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

recognised on the trade date - the date on which the Company commits to purchase or

sell the asset.

4.15.1 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 charged directly

to income. The fair value of such investments is determined on the basis of prevailing

market prices. The Company’s investments at fair value through profit or loss comprise

“Short term investment in mutual funds”.

4.15.2 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




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at amortised cost less impairment losses. The Company’s held to maturity investments

comprise “Short term deposits” and “Short term investments”.

4.15.3 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.

4.15.4 Available-for-sale financial assets

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 atthe 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 other comprehensive income and taken to income on disposal of

investment or when the investment is determined to be impaired.

4.16 Impairment

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 assetor 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.

4.17 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 theliability simultaneously.




Annual Report 2012


4.18 Trade debts

Trade debts are recognised initially at fair value and subsequently measured at cost less

provision for doubtful debts. A provision for doubtful debts is established when there is

objective evidence that Company will not be able to collect all amounts due according

to the original terms of the trade debts. Significant financial difficulties of the debtor,

probability that the debtor will enter bankruptcy or financial reorganisation, and default

of delinquency in payments are considered indicators that the trade debt is doubtful. The

provision for doubtful debts is charged to income for the year. When the trade debt is

uncollectible, it is written off against the provision. Subsequent recoveries of amountspreviously written off are credited to the income.

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 with original maturities of three

months or less, that are readily convertible to known amounts of cash and which are

subject to an insignificant risk of change in value.

4.20 Revenue recognition

Sales are recorded on dispatch of goods to customers.

Commission and handling income is recognised on shipment of products.

Income on bank deposits and short term investments is recognised on time proportion

basis using the effective yield method.

Income on investments in associated companies is recognised using the equity method.

Under this method, the Company’s share of post-acquisition profit or loss of the associated

companies is charged to income, and its share of post-acquisition movements in reserves

is recognised in reserves. Dividend distribution by the associated companies is adjusted

against the carrying amount of the investment.

Gains or losses resulting from re-measurement of investments at fair value through profit

or loss are charged to income.

4.21 Operating lease

Lease in which significant portion of risk and reward of ownership are retained by the

lessor are classified as operating leases. Payment made under operating leases are

charged to income on straight line basis over the period of lease.




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4.22 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 beutilized. 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 to the extent that it relates to items recognised

in other comprehensive income or directly in the equity. In this case, the tax is also

recognised in other comprehensive income or directly in equity, respectively.

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. Theareas 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 13;

ii) Provision for taxation - note 27

iii) Estimated useful life of property, plant and equipment - note 12.1; and

iv) Staff retirement benefits - note 31




Annual Report 2012


2012 2011

Rupees (‘000)

6. SHARE CAPITAL

AUTHORISED CAPITAL

150,000,000 ordinary shares of Rs 10 each

(2011: 150,000,000 ordinary shares of Rs 10 each) 1,500,000 1,500,000

ISSUED, SUBSCRIBED AND PAID UP CAPITAL

Shares issued for cash

5,000,000 ordinary shares of Rs 10 each

(2011: 5,000,000 ordinary shares of Rs 10 each) 50,000 50,000

Shares issued as fully paid bonus shares

64,120,000 (2011: 64,120,000) ordinary shares 641,200 641,200

69,120,000 (2011: 69,120,000)

ordinary shares of Rs 10 each 691,200 691,200

The associated company Attock Refinery Limited held 15,120,115 (2011: 15,120,115)

ordinary shares at the year end.




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7. SPECIAL RESERVES

Special reserves includes Rs 52,608 thousand (2011: Rs 25,340 thousand) for expansion

and modernisation and Rs 2,256 thousand (2011: Rs 2,067 thousand) on account of

maintenance reserve. Reserve for expansion and modernisation represents the Company’s

share of amount set aside as a special reserve by National Refinery Limited and Attock

Refinery Limited, as a result of the directive of the Government to divert net profit after

tax (if any) from refinery operations above 50 percent of paid-up capital as at July 1, 2002

to offset against any future loss or to make investment for expansion or up gradation of

refineries. Maintenance reserve represents amount retained by Attock Gen Limited (anassociate of Attock Refinery Limited) to pay for major maintenance expenses in terms

of the Power Purchase Agreement. The amount transferred to special reserve is not

available for distribution to the shareholders.

8. LONG TERM DEPOSITS

These represent interest free security deposits received from distributors, retailers and

contractors and are refundable on cancellation of respective contracts or termination of

related services.

2012 2011

Rupees (‘000)

9. DEFERRED INCOME TAX LIABILITY

Deferred tax liability arising due to

accelerated tax depreciation 198,000 143,000

Deferred tax asset arising in respect

of certain provisions (31,000) (32,000)

167,000 111,000

10. TRADE AND OTHER PAYABLES

Creditors 9,855 90,051

Due to related parties (unsecured) - note 10.1 14,800,352 9,594,695

Accrued liabilities 1,050,290 1,053,416

Advance from customers 1,504,526 1,170,019

Retention money 54,910 35,629

Worker’s welfare fund 231,064 118,159

Unclaimed dividend 15,750 11,31817,666,747 12,073,287




Annual Report 2012


2012 2011

Rupees (‘000)

10.1 Due to related parties:

National Refinery Limited 1,459,779 2,356,045

Attock Refinery Limited 13,306,444 7,221,552

Pakistan Oilfields Limited 15,561 15,946

The Attock Oil Company Limited 15,796 1,010

Attock Cement Pakistan Limited - 142

APL Employees provident fund 2,772 -14,800,352 9,594,695

11. CONTINGENCIES AND COMMITMENTS

11.1 CONTINGENCIES

(i) Tax contingency related to proration of expenses

against local and export sales for prior years,

as per show cause notices of tax department.

The Company has filed its response against

the show cause notice and no further actionhas yet been taken by the department. 850,348 883,709

(ii) Corporate guarantees and indemnity bonds issued

by the Company to the Commissioner Inland

Revenue, Islamabad. 2,013,101 2,433,157

(iii) Guarantees issued by bank on behalf of the Company 78,304 40,745

11.2 COMMITMENTS

(i) Capital expenditure commitments 323,371 286,471

(ii) Commitments for rentals of assets under operating

lease agreements as at June 30, 2012 amounting to

Rs 1,381,421 thousand (2011: Rs 859,732 thousand)

payable as follows:

Not later than one year 65,572 35,028

Later than one year and not later than five years 311,458 186,616

Later than five years 1,004,391 638,088




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Rupees (‘000)

12. PROPERTY, PLANT AND EQUIPMENT

Operating assets - note 12.1 1,342,228 1,038,290

Capital work in progress - note 12.2 259,348 336,477

1,601,576 1,374,767

12.1 Operating assets

Freehold land Buildings on Pipelines, Equipment - Electrical and Furniture, Computer and Motor Total

Freehold Lease hold pumps, tanks signage fire fighting fixture and auxiliary vehicles

land land and meters equipment equipment equipment

Rupees (‘000)

As at July 1, 2010

Cost 192,444 136,887 111,669 528,109 330,199 64,220 13,718 23,155 72,526 1,472,927

Accumulated depreciation - (8,706) (21,223) (179,246) (155,768) (21,451) (6,447) (12,671) (47,673) (453,185)

Net book value 192,444 128,181 90,446 348,863 174,431 42,769 7,271 10,484 24,853 1,019,742

Year ended June 30, 2011

Opening net book value 192,444 128,181 90,446 348,863 174,431 42,769 7,271 10,484 24,853 1,019,742

Additions - - 1,511 59,836 75,939 10,298 4,231 5,873 11,510 169,198

Disposals

Cost - - - (5,935) (4,456) (52) (503) (2,908) (1,935) (15,789)

Depreciation - - - 1,938 3,739 - 503 2,853 1,170 10,203

- - - (3,997) (717) (52) - (55) (765) (5,586)

Depreciation charge - (6,844) (5,647) (51,099) (58,039) (6,269) (1,345) (4,426) (11,395) (145,064)

Closing net book value 192,444 121,337 86,310 353,603 191,614 46,746 10,157 11,876 24,203 1,038,290

As at July 1, 2011

Cost 192,444 136,887 113,180 582,010 401,682 74,466 17,446 26,120 82,101 1,626,336


Net book value 192,444 121,337 86,310 353,603 191,614 46,746 10,157 11,876 24,203 1,038,290

Year ended June 30, 2012

Opening net book value 192,444 121,337 86,310 353,603 191,614 46,746 10,157 11,876 24,203 1,038,290

Additions - - 50,283 293,865 104,889 13,812 1,190 2,914 12,424 479,377

Disposals

Cost - - - - (454) - - - (1,481) (1,935)

Depreciation - - - - 454 - - - 1,481 1,935

- - - - - - - - - -

Depreciation charge - (8,208) (5,659) (66,000) (71,245) (7,332) (1,643) (4,223) (11,129) (175,439)

Closing net book value 192,444 113,129 130,934 581,468 225,258 53,226 9,704 10,567 25,498 1,342,228

As at June 30, 2012

Cost 192,444 136,887 163,463 875,875 506,117 88,278 18,636 29,034 93,044 2,103,778


Net book value 192,444 113,129 130,934 581,468 225,258 53,226 9,704 10,567 25,498 1,342,228

Annual rate of

Depreciation (%) - 5 5 10 20 10 10 20 20




Annual Report 2012

12.2 Capital work in progress

Civil works Pipelines, Advances to Total

pumps, tanks contractors

and equipment

Rupees (‘000)

As at July 1, 2010 4,447 149,998 43,030 197,475

Additions during the year 36,420 206,501 53,349 296,270

Transfers during the year (3,172) (139,715) (14,381) (157,268)

Balance as at June 30, 2011 37,695 216,784 81,998 336,477

As at July 1, 2011 37,695 216,784 81,998 336,477 Additions during the year 31,161 384,666 46,571 462,398

Transfers during the year (50,283) (415,810) (73,434) (539,527)

Balance as at June 30, 2012 18,573 185,640 55,135 259,348

12.3 Cost of Property, plant and equipment held by dealers of retail outlets of the Company

are as follows:

2012 2011

Rupees (‘000)

Pipelines, pumps, tanks and meters 269,091 199,777

Equipment - signage 495,547 391,586

Buildings 120,248 88,671Electric and fire fighting equipment 12,699 2,002

Due to large number of dealers it is impracticable to disclose the name of each person

having possession of these assets, as required under Paragraph 5 of Part 1 of the 4th

Schedule to the Companies Ordinance, 1984.

12.4 Property, plant and equipment disposals:

All the items of property, plant and equipment disposed during the year had net book

value below Rs 50,000.

2012 2011

Rupees (‘000)

13. LONG TERM INVESTMENTS IN ASSOCIATED COMPANIES

Balance at beginning of the year 842,957 765,739

Investment in associated company 11,578 -

Share of profit of associated companies 76,966 110,260

Impairment loss related to investment in

National Refinery Limited (50,460) (17,049)

26,506 93,211Dividend from associated companies (25,004) (15,993)

Balance at end of the year 856,037 842,957





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13.1 Share of profit of associated companies is based on the unaudited financial statements

for the nine months ended March 31, 2012 (2011: unaudited financial statements for the

nine months ended March 31, 2011) since the audited financial statements for the year

ended June 30, 2012 are not presently available.

13.2 The Company’s interest in associated companies is as follows:

2012 2011

Rupees (‘000)

National Refinery Limited - Quoted

799,666 (2011:799,666) fully paid ordinary shares

including 133,278 (2011: 133,278) bonus shares of

Rs 10 each; Cost Rs 321,865 thousand

(2011: Rs 321,865 thousand);

Quoted market value as at June 30, 2012:

Rs 185,035 thousand

(2011: Rs 281,690 thousand) - note 13.5 502,577 483,712

Attock Refinery Limited - Quoted

1,432,000 (2011: 1,332,000) fully paid ordinary shares

of Rs 10 each including 222,000 (2011: 222,000)

bonus shares of Rs 10 each;

Cost Rs 310,502 thousand (2011: Rs 298,924 thousand);

Quoted market value as at June 30, 2012:

Rs 175,950 thousand (2011: Rs 163,476 thousand)

- note 13.6 452,798 409,127

Attock Information Technology Services

(Private) Limited - Unquoted

450,000 (2011: 450,000) fully paid ordinary

shares of Rs 10 each; Cost Rs 4,500 thousand

(2011: Rs 4,500 thousand);

Value based on net assets as at March 31, 2012 Rs 9,004 thousand (2011: Rs 8,000 thousand) 9,004 8,000

Carrying value on equity method 964,379 900,839

Less: Impairment loss - National Refinery Limited (108,342) (57,882)

856,037 842,957

All associated companies are incorporated in Pakistan.




Annual Report 2012


13.3 The Company’s share in assets, liabilities, revenues and profit of associated companies

based on the most recent available financial statements is as follows:

Assets Liabilities Revenues Profit Holding

after tax

Rupees (‘000) %

March 31, 2012

National Refinery Limited 632,911 385,199 1,681,995 38,857 1.00

Attock Refinery Limited 1,584,987 1,102,694 2,404,893 37,105 1.68

Attock Information TechnologyServices (Private) Limited 9,444 440 4,022 1,004 10.00

2,227,342 1,488,333 4,090,910 76,966

March 31, 2011

National Refinery Limited 582,883 354,037 1,418,474 61,638 1.00

Attock Refinery Limited 1,335,189 1,040,103 1,673,235 47,514 1.56

Attock Information Technology

Services (Private) Limited 8,334 334 3,839 1,108 10.00

1,926,406 1,394,474 3,095,548 110,260

13.4 Although the Company has less than 20 percent shareholding in National Refinery Limited,

Attock Refinery Limited and Attock Information Technology Services (Private) Limited,these companies have been treated as associates since the Company has representation

on their Board of Directors.

13.5 The value of investment in National Refinery Limited as at June 30, 2012 is based on a

valuation analysis carried out by an external investment advisor engaged by the Company.

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 an average gross profit margin of 5.15% (2011: 6.5%), terminal growth rate of

3.5% (2011: 4%) and capital asset pricing model based discount rate of 20.13% (2011: 20%).

13.6 Based on a valuation analysis carried out by the Company, the recoverable amount of investment in Attock 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 gross

profit margin of 1.79% (2011: 2.16%), terminal growth rate of 3.5% (2011: 4%) and

capital asset pricing model based discount rate of 20.13% (2011: 20%).

2012 2011

Rupees (‘000)

14 LONG TERM PREPAYMENTS

Prepaid rent 16,099 30,463

Less: Shown under current assets - note 17 (5,366) (15,232)

10,733 15,231




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15. STOCK IN TRADE

Petroleum products - note 15.1 and 15.2 4,164,559 5,243,724

Packing material 1,336 2,981

4,165,895 5,246,705

15.1 It includes the Company’s share of pipeline stock amounting to Rs 2,196,602 thousand

(2011: Rs 2,225,212 thousand) and Rs 1,039,752 thousand (2011: Rs 1,208,695 thousand)held by Pak-Arab Pipeline Company Limited and Pak Arab Refinery Limited respectively.

15.2 This includes items costing Rs 4,255,358 thousand (2011: Nil) which have been valued

at net realisable value amounting to Rs 3,973,151 thousand (2011: Nil) as a result

of decline in the selling prices of certain petroleum products with effect from July

01, 2012.

2012 2011

Rupees (‘000)

16. TRADE DEBTS Considered good

Secured 1,226,681 1,076,616

Unsecured

Due from related parties - note 16.1 13,191,027 6,377,899

Others 933,602 1,842,777

14,124,629 8,220,676

15,351,310 9,297,292

Considered doubtful - unsecured 31,000 31,000

Provision for doubtful debts (31,000) (31,000)

- -

15,351,310 9,297,292

16.1 Due from related parties

Attock Gen Limited 13,148,890 6,352,555

Pakistan Oilfields Limited 29,264 10,501

Attock Cement Pakistan Limited 12,082 14,141

Attock Refinery Limited 791 702

13,191,027 6,377,899




Annual Report 2012


2012 2011

Rupees (‘000)

17. ADVANCES, DEPOSITS, PREPAYMENTS AND

OTHER RECEIVABLES

Advances - considered good

Suppliers 303,522 532,970

Employees against expenses

Executives 101 279

Other employees 1,072 1,119

1,173 1,398

304,695 534,368

Trade deposits and short-term prepayments

Trade deposits 8,530 5,868

Short-term prepayments 32,551 27,247

41,081 33,115

Current account balances with statutory authorities

in respect of:

Sales tax 40,155 54,727

Federal excise duty and petroleum levy 17,749 17,788

57,904 72,515

Accrued income on bank deposits 20,184 32,622

Other receivables

Price differential claim receivable from the Government 28,528 47,638

Receivable from oil marketing companies under freight pool 339,918 736,788

Claims receivable - 332

Due from related parties - unsecured

APL Gratuity fund 2,690 -

Attock Information Technology Services (Pvt.) Ltd. 936 1,044

Attock Cement Pakistan Limited 196 -Workers’ profit participation fund - note 17.1 46,940 1,100

Others - 181

419,208 787,083

843,072 1,459,703

17.1 Workers’ profit participation fund

Balance at beginning of the year 1,100 7,060

Amount allocated for the year - note 26 (303,060) (318,900)

Amount paid to Fund’s trustees 348,900 312,940

Balance at end of the year 46,940 1,100




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2012 2011

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18. SHORT TERM INVESTMENTS

Held to maturity investment in treasury bills -

at amortized cost - Note 18.1

Upto three months - 812,169

Later than three months but not later than six months - 203,761

Later than six months but not later than one year 545,503 -

545,503 1,015,930

Investment in mutual funds at fair value

through profit or loss - Note 18.2 327,665 -

873,168 1,015,930

18.1 Balance of short term investment in treasury bills earned interest at weighted average

rate of 12.31% per annum (2011: Rs 12.74% per annum).

2012 2011

Rupees (‘000)

18.2 Units of opened ended mutual funds

NAFA Government Securities Liquid Fund10,859,607 (2011: Nil) units 109,164 -

Askari Sovereign Cash Fund

540,564 (2011: Nil) units 54,633 -

UBL Liquidity plus Fund

1,089,360 (2011: Nil) units 109,320 -

Meezan Sovereign Fund

1,060,017 (2011: Nil) units 54,548 -

327,665 -

19. CASH AND BANK BALANCES

Cash in hand 1,947 1,570

Bank balances

On short term deposits 5,500,000 3,717,000

On interest/mark-up bearing saving accounts

(includes US $ 103 thousand; 2011: US $ 103 thousand) 958,719 826,999

On current accounts

(includes US $ 189 thousand; 2011: US $ 2,274 thousand) 353,064 672,468

6,811,783 5,216,467

6,813,730 5,218,037

19.1 Short term deposits of Rs 81,014 thousand (2011: Rs 68,515 thousand) were under lien

with banks against letters of guarantees and letters of credits.

19.2 Balances in short term deposits and saving accounts earned interest/mark-up at weighted

average rate of 11.05% per annum (2011: 11.07% per annum).




Annual Report 2012

2012 2011

Rupees (‘000)20. SALES

Local sales 172,144,825 120,724,804Export sales 5,181,795 6,597,087Gross sales 177,326,620 127,321,891Rebates/discount (514,183) (284,925)

176,812,437 127,036,966

21. COST OF PRODUCTS SOLD

Opening stock 5,246,705 993,282Purchase of petroleum products and packing material 141,187,387 105,078,721Excise duty 30,579 90,762Petroleum levy 5,956,808 3,764,447

147,174,774 108,933,930Closing stock (4,165,895) (5,246,705)

148,255,584 104,680,507

22. OTHER OPERATING INCOME

Commission and handling income 1,315,211 1,160,868

Mark-up on late payments 1,307,359 707,536Exchange gain - 82,098Tender and joining fee 9,458 6,956Gain on sale of property, plant and equipment 477 1,200Hospitality income 8,011 3,805Other income 18,806 16,468

2,659,322 1,978,931

23. OPERATING EXPENSES

Salaries and benefits 292,670 210,134Rent, taxes and other fees - note 23.1 171,746 78,474

Travelling and staff transport 24,405 20,713Repairs and maintenance 59,558 42,961Donations - note 23.2 - 555 Advertising and publicity 8,008 6,337Printing and stationery 12,214 11,416Electricity, gas and water 16,262 11,766Insurance 27,442 23,292Communication 7,815 7,333Legal and professional charges 7,935 13,949Subscription and fees 1,176 1,459Transportation 8,405 6,860 Auditor’s remuneration - note 23.3 2,774 3,001Exchange loss 21,168 -Depreciation - note 12.1 175,439 145,064Trade debts written-off during the year 642 -

Others 51,697 28,001

889,356 611,315





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23.1 Rent, taxes and other fees include Rs 79,364 thousand (2011: Rs 51,706 thousand) paid

under operating lease agreements.

23.2 No director or his spouse had any interest in the donations made by the Company.

2012 2011

Rupees (‘000)

23.3 Auditor’s remuneration

Annual audit 1,100 1,000

Review of half yearly financial statements,

audit of staff funds and special certifications 422 358

Tax services 1,002 1,460

Out of pocket expenses 250 183

2,774 3,001

24. FINANCE COST

Bank charges 15,798 20,822

Late payment charges 1,195,249 661,844

1,211,047 682,666

25. INCOME ON BANK DEPOSITS AND

SHORT TERM INVESTMENTS

Income on bank deposits 781,468 873,993

Income from short term investments measured at

amortised cost 80,294 88,845

Gain on re-measurement of fair value of open ended

mutual fund units 27,665 -

889,427 962,838

26. OTHER CHARGES

Workers’ profit participation fund 303,060 318,900

Workers’ welfare fund 112,905 118,806

415,965 437,706

27. PROVISION FOR TAXATION

Current tax - For the year 1,574,000 1,760,000

- For prior years (103,575) -

1,470,425 1,760,000

Deferred 56,000 1,000

1,526,425 1,761,000




Annual Report 2012

2012 2011

% %

27.1 Reconciliation of tax charge for the year

Applicable tax rate 35.00 35.00

Effect of surcharge - 2.11

Tax effect of income taxed under final tax regime (6.55) (7.33)

Tax effect of income exempt from tax (0.17) -

Tax effect of share of profit of associated companies

taxed on the basis of dividend income (0.12) (0.52)

Others (1.13) -

Average effective tax rate charged to income 27.03 29.26

28. EARNINGS PER SHARE

Profit for the year (Rupees in thousand) 4,120,315 4,256,511

Weighted average number of ordinary shares

in issue during the year (in thousand) 69,120 69,120

Basic and diluted earnings per share (Rupees) 59.61 61.58

2012 2011

Rupees (‘000)

29. CASH AND CASH EQUIVALENTS

Cash and bank balances 6,813,730 5,218,037

Short term investments - 812,169

6,813,730 6,030,206





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30. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

30.1 Financial assets and liabilities

Loans and Held to Fair value TotalReceivables maturity through profit

June 30, 2012 investments or lossRupees (‘000)

Financial Assets

Maturity up to one year

Trade debts 15,351,310 - - 15,351,310 Advance, deposits andother receivables 419,394 - - 419,394Short term investments - 545,503 327,665 873,168Cash and bank balances 1,313,730 5,500,000 - 6,813,730

17,084,434 6,045,503 327,665 23,457,602

Other financialliabilities Total

Rupees (‘000) Financial Liabilities


Trade and other payables 16,162,221 16,162,221Maturity after one yearLong term deposits 245,729 245,729

16,407,950 16,407,950

Loans and Held to Fair value TotalReceivables maturity through profit

June 30, 2011 investments or lossRupees (‘000)

Financial Assets

Maturity up to one yearTrade debts 9,297,292 - - 9,297,292

Advance, deposits andother receivables 777,935 - - 777,935Short term investments - 1,015,930 - 1,015,930Cash and bank balances 1,501,037 3,717,000 - 5,218,037

11,576,264 4,732,930 - 16,309,194

Other financialliabilities Total

Rupees (‘000)Financial Liabilities


Trade and other payables 10,903,268 10,903,268

Maturity after one yearLong term deposits 209,316 209,316

11,112,584 11,112,584




Annual Report 2012

30.2 Credit quality of financial assets

The credit quality of the 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 rating determined based on their historical information for

any defaults in meeting obligations.

2012 2011

Balance Balance

Rating Rupees (‘000)

Trade debts

Counterparties with external credit rating A1+ 791 702

Counterparties without external credit rating

Secured against bank guarantee 1,226,681 1,076,616

Due from related parties 13,190,236 6,377,197

Others 933,602 1,842,77715,351,310 9,297,292

Advances, deposits and other receivables

Counterparties without external credit rating 419,394 777,935

Short term investments

Counterparties with external credit rating AA+ 273,117 -

AA 54,548 -

Counterparties without external credit rating 545,503 1,015,930

873,168 1,015,930Bank balances

A1+ 6,202,453 5,098,629

A1 500,015 -

A2 109,315 117,838

6,811,783 5,216,467

30.3 FINANCIAL RISK MANAGEMENT

30.3.1 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.





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(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 balances at

banks. Credit sales are primarily to related parties. The credit risk on liquid funds is

limited because counter parties are banks with reasonably high credit ratings.

As of June 30, 2012, trade debts of Rs 11,412,635 thousand (2011: Rs 6,679,135 thousand)

were past due but not impaired. The ageing analysis of these trade receivables is as

follows:

2012 2011

Rupees (‘000)

Up to 3 months 4,213,108 4,669,825

3 to 6 months 4,575,912 1,938,455

6 to 9 months 2,551,980 18,488

Above 9 months 71,635 52,367

11,412,635 6,679,135

(b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations

associated with financial liabilities.

The Company manages liquidity risk by maintaining sufficient cash and cash equivalents.

The table below analyses the Company’s financial liabilities into relevant maturity

groupings based on the remaining period at the balance sheet date to the maturity date.

The amounts disclosed in the table are undiscounted cash flows.

Less than Above

1 year 1 year

Rupees (‘000)

At June 30, 2012

Long term deposits - 245,729

Trade and other payables 16,162,221 -

At June 30, 2011

Long term deposits - 209,316

Trade and other payables 10,903,268 -




Annual Report 2012

(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 27,218 thousand (2011: Rs 201,142 thousand) which were

subject to currency risk.

A 10% strengthening of the functional currency against USD at June 30 would have decreased

profit and loss by Rs 2,722 thousand (2011: Rs 20,114 thousand). A 10% weakening of the

functional currency against USD at June 30 would have had the equal but opposite effect

of these amounts. The analysis assumes that all other variables remain constant.

(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 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 20,480,777 thousand (2011: Rs 11,794,623

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 157,026 thousand (2011: Rs 94,773 thousand) higher/

lower, mainly as a result of higher/lower interest income from these financial assets.

(iii) Other 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 inmarket prices.





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30.3.2 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, return capital to shareholders, issue new shares through bonus or

right issue or sell assets to reduce debts or raise debts, if required.

Since inception the gearing ratio of the Company is nil and the Company has financed all

its projects and business expansions through only equity financing and never resorted to

debt financing.

30.4 Fair value of financial assets and liabilities

The carrying value of financial assets and liabilities approximate their fair value.

31. STAFF RETIREMENT BENEFITS

The latest acturial valuation of the defined benefit plan was conducted as at June 30,

2012 using the projected unit credit method. Details of the defined benefit plan are:

2012

Rupees (‘000)

31.1 The amounts recognised in the balance sheet:

Present value of defined benefit obligations 13,552

Fair value of plan assets (10,748)

Net liability 2,804

Unrecognised actuarial gains 826Unrecognised past service cost (6,320)

Asset recognised in the balance sheet (2,690)

31.2 The amounts recognised in the balance sheet are as follows:

Balance as at July 01, -

Expense recognised in profit and loss account (8,058)

Contributions made during the year 10,748

Balance as at June 30, 2,690




Annual Report 2012

2012

Rupees (‘000)

31.3 The amounts recognised in profit and loss account are as follows:

Current service cost 2,125

Interest cost 1,505

Past service cost 4,428

Expense recognised in profit and loss account 8,058

31.4 Changes in the present value of defined benefit obligation are as follows:

Present value of defined obligation as at July 01, -

Interest cost 1,505

Current service cost 2,125

Past service cost 10,748

Acturial gain on obligation (826)

Present value of defined obligation as at June 30, 13,552

31.5 Changes in fair value of plan assets are as follows:

Fair value of plan assets as at July 01, -

Contributions during the year 10,748

Fair value of plan assets as at June 30, 10,748

During the year 2012-13 the Company expects to contribute Rs 3,482 thousand to its

defined benefit gratuity plan.

31.6 Plan assets consist of balance held with bank on interest/mark-up bearing saving account.

31.7 Significant acturial assumptions at the balance sheet date are as follows:

Discount rate 13.25%

Expected rate of return on plan assets 13.25%

Expected rate of increase in salaries 11%

2012

Rupees (‘000)

31.8 Deficit as at the year end is as follows:

Present value of defined benefit obligation 13,552

Fair value of plan assets (10,748)

Deficit 2,804

31.9 Salaries, wages and benefits as appearing in note 23 include

amounts in respect of the following:

Provident fund 4,185

Gratuity fund 8,058

12,243





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32. TRANSACTIONS WITH RELATED PARTIES

Aggregate transactions with related parties, other than remuneration to the chief

executive, directors and executives of the Company under their terms of employment

disclosed in note-33, were as follows:

2012 2011

Rupees (‘000)

Associated companies

Attock Refinery Limited

Purchase of petroleum products 41,517,038 34,360,461Purchase of services 77,791 63,487

Late payment charges 1,195,249 661,841

Sale of petroleum products 9,781 9,038

Commission and handling income 330,485 290,812

National Refinery Limited

Purchase of petroleum products 75,131,368 48,834,829

Purchase of services 16,743 2,513


Handling income 984,727 870,057

Attock Gen Limited

Purchase of services - 184

Sale of petroleum products 18,048,609 13,589,943Mark-up earned on late payments 1,294,629 689,174

Pakistan Oilfields Limited

Purchase of petroleum products 220,469 174,169



Sale of services 254 181

The Attock Oil Company Limited


Sale of services 2,704 -

Attock Cement Pakistan Limited

Purchase of services 4,123 3,510Sale of petroleum products 253,972 217,737

Sale of services 949 -

Attock Information Technology Services

(Private) Limited

Sale of services 4,558 3,708

Attock Hospital (Private) Limited

Purchase of medical services 2,035 1,173

Other related parties

Contribution to staff retirement benefits plans

APL Employees provident fund 4,185 - APL Gratuity fund 8,058 -

Contribution to Workers’ profit participation fund 303,060 318,900




Annual Report 2012

33. SEGMENT REPORTING

33.1 As described in note 1 to these financial statements the Company markets petroleum

products. Revenue from external customers for products of the Company are as follows:

2012 2011

Rupees (‘000)

Product

High Speed Diesel 83,295,518 51,747,347

Furnace Fuel Oil 48,301,129 38,391,772

Premier Motor Gasoline 22,384,651 13,793,937

Bitumen 13,428,862 12,428,392

Others 9,402,277 10,675,518

176,812,437 127,036,966

33.2 Revenues of Rs 18,048,609 thousand (2011: Rs 13,589,943 thousand) are derived from a

single external customer.

34. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES

Chief Executive Director Executives 2012 2011 2012 2011 2012 2011

Rupees (‘000)

Managerial remuneration 8,158 5,865 2,596 2,006 27,154 16,201

Bonus 13,344 8,934 4,010 2,656 15,298 9,419

Company’s contribution

to provident, pension

and gratuity funds 2,139 1,533 1,526 - 3,286 1,131

Housing and utilities 3,574 2,638 1,042 876 11,595 6,668

Other perquisites and

benefits 1,347 1,089 1,667 1,498 7,499 4,231Leave passage 716 650 223 193 450 338

29,278 20,709 11,064 7,229 65,282 37,988

No. of person(s) 1 1 1 1 23 15





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34.1 The above includes amounts charged by an associated company for share of chief

executive’s and one director’s remuneration as approved by the Board of Directors of

the Company. Executives were also provided with use of Company maintained cars and

medical facilities as per Company policy.

34.2 In addition, four non-executive directors of the Company were paid meeting fee

aggregating Rs 2,012 thousand (2011: Rs 1,929 thousand).

35. CAPACITY AND PRODUCTION

Considering the nature of the Company’s business, the information regarding capacity

has no relevance.

36. NON-ADJUSTING EVENT AFTER THE BALANCE SHEET DATE

The Board of Directors in its meeting held on September 15, 2012 have proposed a

final dividend for the year ended June 30, 2012 @ Rs. 32.50 per share, amounting to

Rs. 2,246,400 thousand for approval of the members in the Annual General Meeting to

be held on October 17, 2012.

37. DATE OF AUTHORISATION

These financial statements were authorised for issue by the Board of Directors of the

Company on September 15, 2012.






Annual Report 2012

Notice of the Annual GeneralMeeting

Notice is hereby given that the 17th Annual

General Meeting (being 28th General Meeting)

of the Company will be held at Morgah Club,

Morgah, Rawalpindi, on October 17, 2012 at

10:00 a.m. to transact the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt the audited

nancial statements of the Company together

with Directors’ and Auditor’s Reports for

the year ended June 30, 2012.

2. To approve a nal cash dividend of 325%

i.e. Rs. 32.50 per share of Rs. 10/- each, as

recommended by the Board of Directors

in addition to the interim dividend of Rs.

17.50 per share i.e. 175% already paid to

the shareholders, thus making a total of Rs.

50/- per share i.e. 500% for the year ended June 30, 2012.

3. To appoint auditors for the year ending June

30, 2013 and to x their remuneration.

BY ORDER OF THE BOARD

Rehmat Ullah Bardaie

Company Secretary

Registered Ofce:


Rawalpindi

September 26, 2012

NOTES:

PARTICIPATION IN THE ANNUALMEETING:

A member entitled to attend and vote at the

meeting is entitled to appoint any other person/

representative as his/her proxy to attend and

vote. Proxies in order to be effective must be

received at the Registered Ofce of the Company

duly stamped and signed not less than 48 hours

before the meeting.

CDC Account Holders will further have to follow

the under mentioned guidelines as laid down in

Circular 1 dated January 26, 2000 issued by the

Securities & Exchange Commission of Pakistan.

A. FOR ATTENDING THE MEETING:

i. In case of individuals, the account holders

or sub-account holders and/or the persons

whose securities are in group account and

their registration details are uploaded as

per the regulations, shall authenticate

their identity by showing their original

Computerized National Identity Card (CNIC)

or original passport at the time of attending

the meeting.

ii. In case of corporate entities, the Board of

Directors’ resolution/power of attorney with

specimen signature of the nominees shall

be produced (unless it has been provided

earlier) at the time of the meeting.

B. FOR APPOINTING PROXIES:

i. In case of individuals, the account holders

or sub-account holders and/or the persons

whose securities are in group account and

their registration details are uploaded as

per the regulations, shall submit the proxy

form as per the above requirements.




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ii. The proxy form shall be witnessed by two

persons whose names, addresses and CNIC

numbers shall be mentioned on the form.

iii. Attested copies of CNIC or the passport of

the benecial owners and the proxy shall

be furnished with the proxy form.

iv. The proxies shall produce their original

CNIC or original passport at the time of

meeting.

v. In case of corporate entities, the Board

of Directors resolution/power of attorney

with specimen signature of the person

nominated to represent and vote on behalf

of the corporate entity, shall be submitted

(unless it has been provided earlier) along

with proxy form to the Company.

Members who may be seeking exemption

from deduction of income-tax or are eligible

for deduction at a reduce rate are requested

to submit a valid tax certicate or necessary

documentary evidence as the case may be.

Members desiring non-deduction of zakat are

also requested to submit a declaration for non-

deduction of zakat. Necessary advice in either

case must be submitted within not more than

15 days from the date of dividend entitlement.

CLOSURE OF SHARE TRANSFER BOOKS:

The Share Transfer Books of the Company will

remain closed and no transfer of shares will

be accepted for registration from October 10,

2012 to October 17, 2012 (both days inclusive).

Transfers received in order at the ofce of the

Company’s Share Registrar, THK Associates

(Private) Limited, Ground Floor, State LifeBuilding-3, Dr. Ziauddin Ahmed Road, Karachi

at the close of business on October 09, 2012

will be treated in time for the purpose of

payment of nal cash dividend if approved by

the Shareholders.

CHANGE IN ADDRESS:

Members are requested to promptly notify any

change of address to the Company’s Share

Registrar.

STATEMENT UNDER SECTION160(1)(b) OF THE COMPANIESORDINANCE, 1984

STATEMENT UNDER SRO 865 (1)/2000 DATED

DECEMBER 6, 2000.

In the AGM held on September 27, 2007

shareholders approved investment in following

Associated Companies:

National Renery Limited (NRL)

Attock Renery Limited (ARL)

Pakistan Oilelds Limited (POL)

Attock Cement Pakistan Limited (ACPL)

Except for ARL, no investment has been made

in any other associated concern.

1. Reasons for not having investment

madeDue to change in the Government policies,

mounting circular debt and less than

satisfactory growth and improvement in GDP

and macro economic indicators respectively.

2. Major change in financial positionof investee companies since thedate of last resolution

Changes in nancial position are as follows:




Annual Report 2012

i. Earnings per share (restated):

Name of the

Company

Year ended

June 30, 2007

Year ended

June 30, 2011

Nine Months ended

March 31, 2012*

Rs. Per Share

NRL 52.56 82.14 27.05

ARL 8.78 25.63 30.62

POL 25.11 45.72 39.44

ACPL 9.18 7.90 10.14

ii. Break-up value per share:

Name of the

Company

March 31, 2007

June 30, 2011 March 31, 2012*

Rs. Per Share

NRL 164.21 308.00 309.77

ARL 90.62 146.07 173.19

POL 92.30 141.30 138.37

ACPL 44.52 66.96 70.10

* The above gures are based on latest available nancial statements.




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ACPL Attock Cement Pakistan Limited

AGM Annual General Meeting

APL Attock Petroleum Limited

ARL Attock Renery Limited

ATG Automated Tank Gauge

BPPL(MKTG) Byco Petroleum Pakistan Limited (Marketing)

BTCPL Bakri Trading Company Pakistan Limited

CDC Central Depository Company of Pakistan

CEO Chief Executive OfcerCFO Chief Financial Ofcer

CNIC Computerized National Identity Card

CNG Compressed Natural Gas

CPL Chevron Pakistan Limited

EBITDA Earnings before Interest, Taxes, Depreciation and Amortization

EHS Environment, Health & Safety

EPS Earnings Per Share

ERP Enterprise Resource Planning

FO Furnace Oil

GDP Gross Domestic Product

GoP Government of PakistanHSD High Speed Diesel

HSE Health, Safety and Environment

IFAC International Federation of Accountants

KPK Khyber Pakhtunkhwa

KW Kilo Watt

LED Light Emitting Diode

M.TON Metric Ton

MP & NR Ministry of Petroleum & Natural Resources

NRL National Renery Limited

OCAC Oil Companies Advisory Committee

OGRA Oil and Gas Regulatory Authority

OMC Oil Marketing Company

OOTCL Overseas Oil Trading Company Pakistan

PARCO Pak-Arab Renery Company

PMG Premier Motor Gasoline

POL Pakistan Oilelds Limited

PSOCL Pakistan State Oil Company Limited

Pvt. Private

Rs. Rupees

SPL Shell Pakistan Limited

TPPL Total-Parco Pakistan Limited

UAE United Arab Emirates

US$ United States DollarWPPF Workers’ Prot Participation Fund

WWF Workers Welfare Fund

Glossary



FORM OF PROXY17th Annual General MeetingAOCK PEROLEUM LIMIED

I/We M/s o being

a member(s) o Attock Petroleum Limited and holding ordinary shares as per

Share Register Folio No. CDC Participant I.D. No.

CNIC No./Passport No. hereby appoint

o or ailing him/her o

as my/our proxy to vote and act or me/our behal at the 17th Annual General Meeting o the

Company to be held on October 17, 2012 at 10:00 a.m. at Morgah Club, Morgah, Rawalpindi

and at any adjournment thereo.

Dated this day o 2012 Signature o Proxy

Witnesses:

1. Signature 2. Signature

Name Name

Address Address

CNIC/Passport No. CNIC/Passport No.

Important:

1. Tis Proxy Form, duly completed and signed, must be received at the Registered Ofce o the

Company at Attock House, Morgah, Rawalpindi not less than 48 hours beore the time o holding

the meeting.

2. For CDC Account Holders / Corporate Entities

In addition to the above the ollowing requirements have to be met.

I. Attested copies o CNIC or the passport o the shareholders and the proxy shall be provided

with the proxy orm.

II. Te proxy shall produce his/her original CNIC or original passport at the time o the meeting.

III. In case o a corporate entity, the Board o Directors resolution / power o attorney with specimen

signature shall be submitted along with proxy orm to the Company.

Five Rupees

Revenue StampSignature o Shareholder(Te signature should agree with thespecimen registered with the Company)



The Secretary,

Attock Petroleum Limited Attock House, Morgah


APL Annual Report 2012

Documents

Transcript of APL Annual Report 2012