For business information, annual reports, laws, ordinances, regulations and articles.

	Web Paksearch.com

NATIONAL REFINERY LIMITED
ANNUAL REPORT & ACCOUNTS '95
CONTENTS
Board of Directors		2
Company Information		3
NRL at a Glance		4
Summary of Operating Results		5
Notice of Meeting		6
Directors' Report		7
Pattern of Shareholdings		8
Chairman's Review		9
Graphic Illustrations		12
Auditors' Report		15
Balance Sheet		16
Profit and Loss Account		18
Cash Flow Statement		19
Notes to the Accounts		20
BOARD OF DIRECTORS
CHAIRMAN
Ainuddin Siddiqi
DIRECTORS
Ahmed Dawood
Dato Ahmed Hassan Bin Osman
G. A. Sabri
Javed Ashraf Hussain
Jehangir Ansari
Lt. Col. (Retd) M. Ashraf
Mahmood Ali Khan
Nisar Hussain Khan
Sultan Ahmed Samsi
MANAGING DIRECTOR
Mahmood Ali Khan
SECRETARY
Qazi Wajeehuddin
COMPANY INFORMATION
AUDITORS
TASEER HADI KHAL In & CO
SOLICITORS
QAMAR ABBAS & CO
BANKERS
ABN-AMRO BANK
ALLIED BANK OF PAKISTAN LIMITED
AMERICAN EXPRESS BANK LIMITED
ANZ GRINDLAYS BANK PLC
BANK OF AMERICA NT & SA
CITIBANK N.A.
HABIB BANK LIMITED
HABIB CREDIT & EXCHANGE BANK LTD.
MUSLIM COMMERCIAL BANK LIMITED
MASHREQ BANK PSC (Formerly Bank of Oman Ltd.)
NATIONAL BANK OF PAKISTAN
STANDARD CHARTERED BANK
UNITED BANK LIMITED
REGISTERED OFFICE
7-B, KORANGI INDUSTRIAL ZONE, KARACHI.
SHARES DEPARTMENT
3RD FLOOR, CENTRAL HOTEL BUILDING,
MEREWETHER ROAD, KARACHI.
REFINERY
7-B, KORANGI INDUSTRIAL ZONE, KARACHI
NRL AT A GLANCE
	FIRST LUBE REFINERY
Design Capacity		- 539,700 Tonnes per year of Crude proc
		- 76,200 Tonnes per year of Lube Base Oils
Date Commissioned		June 1966
Project Cost		103.9 Million Rupees
	FUEL REFINERY
BEFORE REVAMP
Design Capacity			1,500,800 tonnes per year of crude processing
Date Commissioned			April 1977
Project Cost			607.5 Million Rupees
AFTER REVAMP
Design Capacity			2, 70,800 tonnes per year of crude processing
Date Commissioning of Revamp			February 1990
Project Cost of Revamp			125.0 Million Rupees
	B.T.X. UNIT
Design Capacity			25,000 Tonnes per year of B.T.X.
Date Commissioned			April 1979
Protect Cost			66.7 Million Rupees
	SECOND LUBE REFINERY
Design Capacity			100,000 Tonnes per year of Lube Base Oils
Date Commissioned			January 1985
Project Cost			2,082.4 Million Rupees
	SHARE HOLDERS' EQUITY
June 1966			20.0 Million Rupees
June 1995			709.735 Million Rupees
SUMMARY OF OPERATING RESULTS
											RUPEES IN MILLION
YEAR ENDED 30TH JUNE			1986	1987	1988	1989	1990	1991	1992	1993	1994	1995
Sales including taxes			8166	6224	7410	7193	8617	14888	14386	15095	15159	16239
Less: Duties, taxes and
development surcharge			58	54	90	239	195	766	794	940	1176	1018
Sales after duties, etc.			8108	6170	7320	6954	8422	14122	13592	14155	13983	15221
Other income			4	6	6	30	20	14	12	9	18	15
			8112	6176	7326	6984	8442	14136	13604	14164	14001	15236
Deduct: Cost of sales and
other expenses excluding
depreciation			7766	5849	6998	6269	7843	13354	12978	13357	13132	15082
			346	327	328	715	599	782	626	807	869	154
Depreciation			226	207	208	219	225	229	220	218	236	277
Net profit(loss) after
depreciation			120	120	120	496	374	553	406	589	633	(123)
Extraordinary items			-	-	-	-	-	-	-	-	-	-
Unappropriated profit/(loss)
brought forward			1	1	1	1	-	-	-	-	-	-
Provision for current
taxation			-	-	-	217	161	234	179	298	280	132
Less: Dividend and other
appropriations			120	120	120	200	186	250	220	267	300	-
Revenue Reserve - General			-	-	-	80	26	69	7	24	53	-
Unappropriated profit/(loss)
carried to next year			1	1	1	-	1	-	-	-	-	(254)
Rate of dividend in %			18	18	18	30	28	37.50	33	40	45	-
NOTICE OF MEETING
Notice is hereby given that the Thirty-second Annual General Meeting of National Refinery Limited
will be held on Saturday, 30th March, 1996 at 11.00 a.m. at Hotel Metropole, Karachi to transact
the following business:
ORDINARY BUSINESS
1. To confirm the minutes of the Annual General Meeting held on December 31, 1994.
2. To receive and adopt the Audited Accounts of the Company for the year ended June 30,
1995 together with the Directors' Report and the Auditors' Report thereon.
3. To appoint Auditors for the year 1995-96 and to fix their remuneration.
Karachi: February 29, 1996				By Order of the Board
				QAZI WAJEEHUDDIN
				Secretary
NOTES
1. Share Transfer Books of the Company will remain closed from March 22, 1996 to
March 31, 1996 both days inclusive.
2. A member entitled to attend and vote at the meeting is entitled to appoint another member
as proxy.
3. Proxies in order to be effective must be received at the Registered Office of the Company
not less than 48 hours before the meeting and must be duly stamped, signed and witnessed.
4. Shareholders are requested to promptly notify the Company of any change in their address.
DIRECTORS' REPORT
The Directors of your Company are pleased in presenting the Annual Report together with Accounts
& Auditor's Report thereon for the year ended June 30, 1995.
Profit & Loss Account
The Directors submit the results together with un-appropriated profit brought forward from previous
year as under:
						(Rs. in Million)
Net loss after taxation for the year taking into account
the amount of Rs. 1,042.067 million taken in income
currently (Note 26) and amount of Rs. 1,666.169 million
receivable from the Government as at June 30, 1995
shown in (Note 24) amounts to						255.057
Un-appropriated profit being brought forward						0.916
						-------
Net loss carried over							254.141
							=========
The amount taken to income currently and payable to the Government under the formula is determined
after the audited accounts are submitted to the Government and the approval is received in due
course of time.
Board of Directors
Mr. Ainuddin Siddiqi replaced Dr. M. H. Chaudhary as Chairman, Mr. Mahmood Ali Khan replaced
Dr. A. A. Faruqui, M. D. NRL, retired. Mr. G. A. Sabri D. G. Oil replaced Mr. A. R. P. Memon
and Mr. Dato Ahmed Hassan Bin Osman replaced Mr. Anwar Khanani nominee of IDB Jeddah.
Mr. Nisar Hussain Khan replaced Mr. Rashid Mehmud Ansari and Mr. Javed Ashraf Hussain replaced
Mr. Nazier Ahmed Jajvi. The Board wishes to place on record appreciation for the very useful
services rendered by these directors and the outgoing Chairman & M.D.
Pattern of Shareholdings
Pattern of shareholdings is shown on page 8.
Auditors
The Auditors M/s. Taseer Hadi & Co. retire and being eligible offer themselves for reappointment.
Miscellaneous
Chairman's Review is endorsed by the Directors of the Company.
			On behalf of the Board
			AINUDDIN SIDDIQI
			Chairman
PATTERN OF SHAREHOLDINGS
AS AT JUNE 30, 1995
NO. OF			SHAREHOLDING			TOTAL
SHARE HOLDERS		FROM		TO		SHARES HELD
1323		1		100		63,024
1412		101		500		441,992
737		501		1000		605,330
988		1001		5000		2,261,396
97		5001		10000		677,325
20		10001		15000		247,530
13		15001		20000		223,015
4		20001		25000		89,176
1		25001		30000		28,800
4		30001		35000		134,097
1		35001		40000		35,050
2		40001		45000		85,885
2		45001		50000		95,965
3		50001		55000		154,332
1		55001		60000		60,000
2		60001		75000		143,604
1		75001		90000		86,000
2		90001		95000		185,200
1		95001		100000		100,000
1		100001		105000		102,100
1		105001		120000		117,200
1		120001		170000		167,600
1		170001		310000		306,600
1		310001		315000		312,717
1		315001		340000		339,320
1		340001		575000		571,600
1		575001		660000		655,240
1		660001		1305000		1,300,182
1		1305001		2840000		2,838,447
1		2840001		4015000		4,010,060
1		4015001		10000000		10,000,000
1		10000001		10125000		10,121,343
1		10125001		10760000		10,757,382
1		10760001		19325000		19,321,288
4629						66,638,800
CATEGORIES OF SHAREHOLDERS			NUMBER	SHARES HELD		PERCENTAGE
Individuals			4,587,276	6.88
Investment Companies			18	30,685,465		46.05
Joint Stock Companies			16	58,315		0.09
FinanciaI Institutions *			11	24,615,315		21.93
Modaraba Companies			5	244,400		0.37
Insurance Companies			12	5,268,669		7.91
Others			10	10,925,760		16.39
PERAC			1	10,757,382		16.14
1. Administrator Abandoned Properties			1	46,630		0.07
2. Charitable Organizations			6	107,447		0.16
Corporate Law Authority			1	1		_
Employees old age benefits			1	14,300		0.02
Non Residants			2	253,600		0.38
-------------	-------------	-------------	-------------	-------------	-------------	----------
	TOTAL"-		4629	66,638,800		100.00
-------------	-------------	-------------	-------------	-------------	-------------	----------
*Including Islamic Development Bank Jeddah Holding 15% Shares.
CHAIRMAN'S REVIEW
I welcome you to the 32nd Annual General					iii) due to anomalies of higher duties & taxes
Meeting of the Company and present the Audited					on the locally produced Base Oils compared
Accounts and the Audit Report of the Company					to the duties levied on the Imported Base
for the year ended on 30th June 1995. The					Oils and Finished Lubricants it was not
AG M has been delayed because the Management					possible to increase the prices of Locally
was making efforts with the Government to					Produced Base Oil to fully recover the
redress and remove genuine anomalies of duties					enhanced cost of feed stock. Some quantity
and taxes suffered during the year for which					of Lube Base Oil was exported at a rebate
summaries were to be examined by the					of Rs. 1,000/- per ton as it could not
Economic Committee of the Cabinet (ECC)					be sold in the local market.
and the decision which was not in our favour					iv) Asphalt which is produced in the Lube
came with considerable delay.					Refinery, is equally important product, also
You are aware that the Refinery has been					faced anomalous situation of duties &
operating under the Import Parity Formula in					taxes due to which unchecked imports
which the Fuel Refinery after tax profits have					as well as smuggling of Asphalt continued
been restricted between a minimum of 10%					from a neighbouring country. The local
and a maximum of 40% of paid up capital.					Asphalt price is still regulated and fixed
Fuel Refinery suffered losses during the year					by the Ministry of Petroleum and has
as the crude oil prices registered an average					not been revised since 1990. On the
increase of 18% while the CIF product prices					contrary, the duties and taxes on local
increased by 6-10% only. Government was					Asphalt price were continuously revised
therefore, obliged to make up for the losses					upwards with the results that load of duties
to arrive a minimum of 10% after tax profit					and taxes is 174% of the naked Asphalt
only.					price. On the contrary the imported Asphalt
The Lube Base Oils have been free from controls					was assessed for import duty @ 25%
and the Company fixes the prices competitive					only. Consequently the upliftment of our
with the Imported Base Oils and Finished					Asphalt in the local market was adversely
Lubricants which are freely importable. Lube					affected and 97,224 M. Tons surplus had
Refinery suffered immense losses for the					to be exported compared to 26,654
reasons that:					M tons exported last year at very low
i) anomaly of development surcharge on					price and even the full prime cost could
feedstock consumed in the Lube Refinery					not be recovered. The exports had to
continued unabated despite regular follow					be made to redeem inventory build up
up by the Management during the year					and to save total loss.
to remove the anomaly.					Management has been vigorously making
ii) additional 10% import duty was levied					efforts with the Government to remove
on the CIF price of the feedstock which					anomalies in the taxes, duties and
further increased the cost of production					development surcharge and to deregulate
of Lube Base Oils. Other consumers were					the price of Asphalt.
subsequently exempted from the import					CRUDE OIL
duty but the Refinery was denied exemption.					The supplies of Arabian Light Crude are
A summary was moved for review by					continued from ARAMCO Saudi Arabia under
the ECC. The ECC decided to remove					the annual contract. The crude oil was shared
the anomaly from the current year but					and exchanged with Pakistan Refinery Limited
Rs.150 million paid as Import Duty on					for Iranian Light and Murban Crudes to give
the price of the feedstock during the year					a blend mutually advantageous to both the
1994-95 was not allowed refund.					Refineries as well as the Country. The prices
of crude oil in the international market registered					Financial expenses were Rs. 144 million
increase of approximately 18%.					compared to Rs. 109 million of last year. The
The Refinery processed 2,728,743 M. Tons of					increase was due to increased borrowing to
imported crude. The utilization of the indigenous					meet liquidity shortfall for blockage of funds
crude oil was at an average of 15000 barrels per					in the inventories of Asphalt and Lube Base
day, thus partially reducing foreign exchange					Oils and losses suffered during the year.
requirements for the import of crude oil.					Besides, the mark up rates were also increased
PRODUCTION					by the Banks under State Bank of Pakistan
Fuel product mix was achieved in accordance					regulations.
with the market demand maximizing production
of the deficit items as required by the					PROJECTS
Government. Lube Base Oils production was					Execution of Energy Conservation Projects
185,191 M. Tons compared to 199,790 M. Tons					(Phase-lI) financed through the World Bank
of the previous year. The reduction in the					continued during the year. The status of progress
production was due to plant shut down for repair/					is as under:-
maintenance and frequent power breakdowns.					a) Capacity enhancement of Platforming Unit
SALES					to process additional 33,000 Tons per
The total sales during the year amounted to					year of Naphata was completed during
Rs. 15,221 million compared to Rs. 13,983					the year in May 1995.
million of the previous year. The increase in					b) Process Modification of Oil Lube Refinery
sales was due to higher CIF prices of products.					to improve efficiency on energy utilization
Sales included export sales of Lube Base					was completed during the year in December 1994.
Oil, Naphtha and Asphalt amounting to
Rs. 978 million compared to Rs. 325 million					c) Self Power Generation of 7.5 MW electricity
last year.					by utilizing high pressure steam internally
COST OF GOODS SOLD, SELLING,					available, is expected to be completed
ADMINISTRATION AND FINANCIAL					by mid of 1996.
EXPENSES					After completion of power project NRL will
The Company operated on a throughput of					be ensured stable power supply for one of
2,728,743 M. Tons of crude oil; and 667,708					its units.
M. Tons of Reduced Crude. The cost of goods					OUTLOOK
sold was higher i.e. Rs.15,065 million compared					The Company is actively engaged in plans
to Rs. 13,090 million in the previous year due					for putting up an Isomerisation Unit to produce
to higher prices of crude oil & reduced crude					environmental friendly Motor Gasoline. It will
and inventory adjustments.					upgrade Naphtha to high value Motor Gasoline
The selling, administration and general expenses					and reduce the overall lead content in it. The
were Rs. 1 49 million compared to					delay in the project is due to extra cost of
Rs. 117 million last year. The increase was					processing with no increase in the price of
due to revision of the salaries as announced					Motor Gasoline. The matter is taker) up with
by the Government and general escalation for					the Government to review product prices.
inflation.
The Company also chalked out plans as joint					and expect favourable decision. I therefore,
venture with Private Sector Company to lay					hope that the results in the next financial year
a new JP-1 Pipeline to the Quaid-e-Azam					would be positive.
International Airport Karachi, as the old pipeline					STAFF
of PRL used so far is too old and vulnerable					On the job training to technicians and engineers
to leakages.					to meet the shortage of trained personnel
The Company has also planned to install					continued during the year.
additional Power Plant of 22 MW at Refinery					I would like to record my appreciation for the
site in collaboration with private sector so as					efforts and dedication of all the executives,
to be independent of the National Power Grid					staff and workers during the year in keeping
and to ensure uninterrupted power supply to					the Refinery operating despite strikes and law
all its operating units.					& order situation in Karachi.
As mentioned earlier, Management is making
efforts with the Government to remove anomalies
of duties & taxes levied on the products of
Lube Refinery as well as on its feedstock					AINUDDIN SIDDIQI
					CHAIRMAN
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed Balance Sheet of National Refinery Limited as at June 30, 1995,
and the related Profit and Loss Account and Cash Flow Statement, together with the notes forming
part thereof, for the year then ended and we state that 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 and after due verification thereof, we report that:
(a) in our opinion, proper books of account have been kept by the Company as required
by the Companies Ordinance, 1984;
(b) in our opinion:
(i) the balance sheet and profit and loss account together with the notes thereon have
been drawn up 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 were in accordance with the objects of the Company;
(c) the amount of Rs. 1,042.067 million taken to income currently (note 26) and the amount
of Rs. 1,666.169 million receivable from the Government as at June 30, 1995 are subject
to agreement of the Government;
(d) in our opinion and to the best of our information and according to the explanations given
to us, the balance sheet, profit and loss account and cash flow statement, together with
the notes forming part thereof, give the information required by the Companies Ordinance,
1984 in the manner so required and except for the effect, if any, of matter referred to
in paragraph (c) above, respectively give a true and fair view of the state of the Company's
affairs as at June 30, 1995 and of the loss and the cash flows for the year then ended;
and
(e) in our opinion, no Zakat was deductible at source under the Zakat and Ushr Ordinance,
1980
TASEER HADI KHALID & CO.
Chartered Accountants
Karachi: February 29, 1996
		BALANCE SHEET
As at June 30, 1995