Welcome to PakSearch.com Pakistan's Premier Business Information
Service


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




Google
 
Web Paksearch.com
National Refinery Limited
Annual Report 2001
CONTENTS
Company Information
Board of Directors
NRL at a Glance
Financial Highlights
Pattern of Shareholdings
Notice of Meeting
Directors' Report
Chairman's Review
Performance at a Glance
Auditors' Report
Balance Sheet
Profit & Loss Account
Statement of Changes in Financial Position (Cash Flow)
Statement of Changes in Equity
Notes to the Accounts
Report and Accounts of National Oil Marketing (Pvt) Ltd. (NOM)
Company Information ~
: ~E~
MANAGING DIRECTOR I ::~::~
M.M. Husain .~ :~~
COMPANY SECRETARY ~
Asad A. Siddiqui i~:~~
AUDITORS
Ford, Rhodes, Robson, Morrow, Chartered Accountants
SOUCITO.S
ORR Dignam & Co. and Qamar Abbas & Co.
BANKERS
ABN-AMRO Bank
Allied Bank of Pakistan Limited
American Express Bank Limited
Bank Alfalah
Citibank N.A.
Deutsche Bank A.G.
Habib Bank Limited
Muslim Commercial Bank Limited
National Bank of Pakistan
Standard Chartered Bank
Union Bank Limited
United Bank Limited
REGISTERED OFFICE
7-B, Korangi Industrial Zone, Karachi-74900, Pakistan
SHARES DEPARTMENT
7-B, Korangi Industrial Zone, Karachi-74900, Pakistan
PHONES (PABX)
5064135-37, 5064977-79,5064981-86,5064988
FAX
92-21-5054663
TELEX
29141- ENAR - PK
20789 - ENAR - PK
CABLE
Enarlube
WEBSITE
WWW.NRLPAK.COM
Board of Directors
CHAIRMAN
ZAFAR IQBAL
Chairman
Social Marketing Pakistan Ltd.
MUHAMMAD IQBAL AWAN
Financial Advisor
Ministry of Petroleum & N.R.
M. MANSOOR ZUBAIR
Joint Secretary
Ministry of Petroleum & N.R.
TARIK KIVANC
Executive Director
Islamic Development Bank, Jeddah
SAQUIB H. SHIRAZI
Chief Executive
Atlas Honda Ltd.
TOWFIQ H. CHINOY
Managing Director
International Industries Ltd.
M. YOUNAS KHAN
Chairman
Inter Asia Leasing Company
ISTAQBAL MEHDI
Chairman/Chief Executive
National Investment Trust Ltd.
SAYED MUZAFAR ALI SHAH
Former V.C., Mehran University
Ex-Chairman, SLIC
SULTAN AHMED SHAMSI
Chief Executive
Imperial Glass & Tile Co.
M.M. HUSAIN
Chief Executive/MD
National Refinery Ltd.
NRL at a Glance
FIRST LUBE REFINERY
Design Capacity 539,700 Tons per year of Crude processing
Design Capacity 76,200 Tons 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 Tons per year of Crude processing
Date Commissioned April 1977
Project Cost 607.5 Million Rupees
AFTER REVAMP
Design Capacity 2,170,800 Tons 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 Tons per year of B.T.X.
Date Commissioned April 1979
Project Cost 66.7 Million Rupees
SECOND LUBE REFINERY
Design Capacity 100,000 Tons 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 2001 2,829.3 Million Rupees
Financial Highlights
1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01
RETURN ON INVESTMENT
Rs. Per Share of Rs. 10
EARNING 3.41 4.36 5.30 (3.83) 4.19 6.84 7.38 9.65 10.61 11.64
BREAK-UP VALUE   13.32 13.68 14.48 10.65 14.84 19.18 24.06 29.71 35.82 42.46
DIVIDEND 3.30 4.00 4.50 0.00 0.00 2.50 2.50 4.00 4.50 5.00
MARKET VALUE OF SHARE 96.00 83.75 103.00 53.50 39.25 28.50 17.50 30.54 42.70 39.00
FINANCIAL GLIMSES
Rs. In 000's
ISSUED & PAID-UP CAPITAL 666,388 666,388 666,388 666,388 666,388 666,388 666,388 666,388 666,388 666,388
SHARE HOLDERS' EQUITY 887,567 911,777 964,792 709,735 988,780 1,278,009 1,603,234 1,979,987 2,386,819 2,829,292
CAPITAL EXPENDITURE 45,791 65,441 134,355 627,244 65,451 82,370 246,516 46,622 175,521 509,624
PROFIT BEFORE TAX 406,295 589,196 633,395 (123,285) 466,284 774,311 738,928 1,230,307 1,093,059 1,116,122
PROFIT AFTER TAX 227,295 290,765 352,889 (255,057) 279,045 455,826 491,822 643,308 706,707 775,667
TAXATION 179,000 298,431 280,506 131,772 187,239 318,485 247,106 586,999 386,352 340,465
FINANCIAL RATIOS
CURRENT RATIO 1: 0.98 1: 0.96 1: 0.95 1: 0.95 1: 1.00 1 : 1.00 1: 1.02 1: 1.06 1 : 1.08 1: 1.18
LONG TERM DEBT: EQUITY 40:60 33:67 34:66 47:53 53:47 32:68 18:82 11 89 04:96 0.22:99.78
TOTAL DEBT: EQUITY 84:16 86:14 85:15 90:10 90:10 90:10 89:11 85 15 84:16 82:18
Pattern of Shareholdings
Number of Shareholding Total number of
shareholders From To shares Held Percentage
1,264 1 100 58,414 0.09
1,223 101 500 385,704 0.56
641 501 1,000 526,060 0.79
889 1,001 5,000 2,087,659 3.13
127 5,001 10,000 923,642 1.39
20 10,001 15,000 241,099 0.36
22 15,001 20,000 383,852 0.58
6 20,001 25,000 139,610 0.21
2 25,001 30,000 58,100 0.09
6 30,001 35,000 193,918 0.29
2 35,001 40,000 80,000 0.12
2 40,001 45,000 90,000 0.14
5 45,001 50,000 243,165 0.36
4 55,001 60,000 239,600 0.36
3 60,001 65,000 185,504 0.28
2 65,001 70,000 140,000 0.21
1 70,001 75,000 75,000 0.11
2 75,001 80,000 154,162 0.23
1 80,001 85,000 83,000 0.12
1 85,001 90,000 89,700 0.13
4 95,001 100,000 400,000 0.60
1 100,001 105,000 100,400 0.15
2 110,001 115,000 228,648 0.34
1 125,001 130,000 129,500 0.19
1 130,001 135,000 131,400 0.20
1 155,001 160,000 160,000 0.24
1 160,001 165,000 163,667 0.25
1 270,001 275,000 274,500 0.41
1 310,001 315,000 312,717 0.47
1 335,001 340,000 339,320 0.51
1 425,001 430,000 425,150 0.64
1 655,001 660,000 658,040 0.99
1 695,001 700,000 696,600 1.05
1 700,001 705,000 701,000 1.05
1 795,001 800,000 800,000 1.20
1 1,300,001 1,305,000 1,300,182 1.95
1 1,640,001 1,645,000 1,644,000 2.47
1 2,810,001 2,815,000 2,810,960 4.22
1 2,835,001 2,840,000 2,837,947 4.26
1 5,475,001 5,480,000 5,480,000 8.22
1 19,905,001 19,910,000 19,909,198 29.88
1 9,995,001 10,000,000 10,000,000 15.01
1 10,755,001 10,760,000 10,757,382 16.14
------------------ ------------------ ------------------
4,270 66,638,800 100.00
========== ========== ==========
CATEGORIES OF SHAREHOLDERS NUMBERS SHARES HELD PERCENTAGE
Individuals 4,190 4,860,981 7.29
Investment Companies 18 10,674,263 16.02
Joint Stock Companies 22 211,270 0.32
Financial Institutions * 11 35,020,000 52.55
Modaraba Companies 5 116,750 0.18
Insurance Companies 11 4,778,069 7.17
Others 9 10,866,367 16.30
------------------ ------------------ ------------------
1. PERAC 1 10,757,382 16.14
2. Administrator Abandoned Properties 1 46,630 0.07
3. Charitable Organizations 5 33,354 0.05
4. Corporate Law Authority 1 1 0.00
5. Employees old age benefits 1 29,000 0.04
------------------ ------------------ ------------------
Non Residents 4 111,100 0.17
========== ========== ==========
TOTAL 4,270 66,638,800 100.00
========== ========== ==========
* Including Islamic Development Bank Jeddah, Holding 15% Shares
Notice of Meeting
Notice is hereby given that the Thirty Eight (38th) Annual General Meeting of National Refinery Limited
will be held on Wednesday 31st October 2001 at 10:30 A.M. at Hotel Regent Plaza, Karachi to transact
the following business:
ORDINARY BUSINESS
1. To confirm the minutes of 37th Annual General Meeting held on November 28, 2000.
2. To receive and adopt the Audited Accounts of the Company for the year ended June 30, 2001
together with the Directors' Report and the Auditors' Report thereon.
3. To declare the final dividend.
4. To appoint Company's Auditors for the year 2001-02 and to fix their remuneration.
By order of the Board
Asad A. Siddiqui
Karachi: September 06, 2001 Company Secretary
NOTES:
1. The Register of Members of the Company will remain closed and no transfer of shares will be
accepted for registration from 23rd October 2001 to 1st November 2001 (both days inclusive).
Transfers received in order at the Registered Office, National Refinery Limited, 7-B Korangi
Industrial Zone, Korangi, Karachi-74900 by the close of business on 22nd October 2001 will be in
time for the purpose of payment of the Final Dividend to the transferees.
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. CDC shareholders are requested to bring their National Identity Card, Account and Participant's ID
Number, while attending the Meeting for identification.
5. Shareholders are requested to promptly notify the Company of any change in their address.
Directors' Report
The Directors of the Company have pleasure in presenting Annual Report and the Audited Financial Statements
of the Company for the year ended dune 30, 2001.
(Rupees in '000)
The profit of the company for the year ended dune 30, 2001
after taking into account the Sales Tax, etc., aggregating to
Rs. 549.409 million (note 25.1) and the amount of
Rs. 2,912.492 million, under import parity pricing formula
and after providing for administrative, selling and financial
charges amount to: -- 1,197,819
Less: Provision for
- Workers' Profit Participation Fund 59,891 --
- Workers' Welfare Fund 21,806 81,697
------------------ ------------------
-- 1,116,122
Less: Taxation
- For the year 369,847 --
- For prior years
- Deferred Tax (29,392) 340,455
------------------ ------------------
Profit after taxation -- 775,667
Amount of un-appropriated profit
brought forward from previous year -- 172
------------------ ------------------
Profit available for appropriation -- 775,839
APPROPRIATIONS
- Interim Dividend @ 10% 66,639 --
- The Directors proposed that this should be utilized in
providing for final dividend at the rate of 40%
equivalent to Rs. 4/= per share of Rs. 10 each 266,555 --
- Transfer to General Reserve 442,000 775,194
------------------ ------------------
Un appropriated profit carried forward to next year -- 645
========== ==========
The amount of receivable from the Government under the formula shall be determined after the audited accounts
are submitted to the Government and the approval is received in due course of time.
DIVIDEND
The Company has already paid an interim dividend of 10% in March 2001 and Directors are now recommending
final dividend at the rate of 40% (Rs. 4/= per share of Rs. 10 each) making a total dividend of 50% for the year
ended June 2001.
Directors' Report
BOARD OF DIRECTORS
Sayed Muzafar Ali Shah, Former V.C., Mehran University & Ex-Chairman, SLIC, was appointed in place of
Ms. Aalia K. Dossa of National Investment Trust Limited, who submitted her resignation on dune 08, 2001,
Mr. Tarik Kivanc of Islamic Development Bank was re-elected and Mr. Sultan Ahmed Shamsi was elected in place
of Mr. Ahmed Dawood as Directors in the last Annual General Meeting held on November 28, 2000 for a period
of 3 years.
Messers. Zafar Iqbal, Chairman, Social Marketing Pakistan Limited is Chairman on NRL Board and M.M. Husain
is Managing Director of National Refinery Limited, Muhammad Mansoor Zubair, Joint Secretary, Ministry of
Petroleum & Natural Resources, Muhammad Iqbal Awan, Financial Advisor, Ministry of Petroleum & Natural
Resources, Towfiq H. Chinoy, Managing Director, International Industries Ltd., Saquib H. Shirazi, Chief Executive,
Atlas Honda Ltd., Istaqbal Mehdi, Chief Executive, National Investment Trust Ltd., M. Younas Khan, Chairman,
Inter Asia Leasing Company, Sayed Muzafar All Shah, Former V.O., Mehran University & Ex-Chairman, SLIC,
Tarik Kivanc, Executive Director of Islamic Development Bank, Jaddah and Sultan Ahmed Shamsi, Chief
Executive Imperial Glass & Tile Company are Directors on NRL Board.
PATTERN OF SHAREHOLDING
Pattern of shareholding is shown on page 6
AUDITORS
M/s Ford, Rhodes, Robson, Morrow, Chartered Accountants, retire and being eligible, offer themselves for
reappointment.
CHAIRMAN S REVIEW
The Chairman's Review is endorsed by the Board of Directors of the Company.
On behalf of the Board
ZAFAR IQBAL
Chairman
Chairman's Review
Dear Shareholders
On behalf of the Board of Directors and myself I welcome
you to the 38th Annual General Meeting of the Company
and present a review of the operations and Financial
results of your Company for the year ended June 30, 2001.
I am pleased to report that your Company has performed
well over the past years despite the fact that there was a
severe competition and low margins on sale of Products.
Fuel Refinery operated under the Import Parity Formula,
therefore, a minimum of 10% and maximum of 40%
return, net of tax, on the paid-up capital was allowed. Due
to shrinkage in margin of Fuel products in the
International market the margin on sale of Fuel products
was not adequate to absorb the entire operating cost and
financial charges. Consequently the Fuel Refinery Profit
was restricted to Rs. 22.91 million being minimum, net of
tax, return of 10% on paid-up capital.
Although upward revision in Ex-Refinery Prices was
allowed by the Government during the year to cover the
differential in petroleum product prices, yet revision in ex-
refinery prices was not corresponding to the change in
product entitled prices which resulted in price differential
claims from the Government amounting to Rs. 1,847
million beside unclaimed input of sales tax amounting to
Rs. 530 million on account of sales of JP-I, being exempt
from sales tax.
The present Government is gradually deregulating the
petroleum sector. The price of Furnace Oil was
deregulated last year. The Government has now
authorized the petroleum industry to fix the prices of other
Fuel products as well on fortnightly basis with effect from
July 1, 2001. This decision of the Government shall
improve the liquidity position of the Refinery. The
company has been pursuing with the Government to
review the Import Parity Formula to make it more realistic.
Recently the Government has allowed ocean losses and
actual premium on Fuel product which would reduce the
shortfall in the make-up-margin of the Fuel Refinery.
The Company's emphasis remained on its drive to
generate profit from production and marketing of Lube
Base Oil which is not subject to price control by the
government and operates in an open Market
environment. Resultantly the highest ever after tax profit
of Rs. 752.76 million has been earned during the year
from Lube Refinery. The supply of 190,416 tons of Lube
Base Oil to the market in a year from NRL it a record and
a major factor in earning the record profit of the year.
NRL has grown and developed the high quality Lube
Base Oil and today enjoys the special position of being
the sole producer as well as exporter of high quality Oils.
CRUDE OIL:
The supply of Arabian Light was arranged by the
Government from Saudi Aramco and shared with
Pakistan Refinery Ltd (PRL) and Pak Arab Refinery
(PARCO). On the other hand PRL imported Iranian Light
from Iran & shared with NRL. The crude oil throughput for
the year was 2.625 million tons (including 0.325 million
tons received from indigenous sources and Dhodak
Naphtha 0.014 million tons reprocessed during the year)
as against 2.856 million tons of the previous year.
Keeping in view the low margin on Fuel products the
throughput was kept at lower than designed capacity, and
was enough to produce the required feedstock for the
Lube Section.
PRODUCTION:
The aggregate production of finished products was 2.504
million tons. The product mix was maintained according
to the market demand maximizing production of deficit
items as required by the Government. The production of
Lube Base Oils was slightly lower at 176,422 tons
compared to 176,596 tons last year due to frequent
power shutdown by Karachi Electric Supply Corporation (KESC).
SALES:
Sales value for the year was Rs. 34.331 billion including
the record sale of Lube base Oil Rs. 4.489 billion
compared to Rs. 25.683 billion including Lube Base Oil
sale of Rs. 3.416 billion for the year 1999-2000. The
Export sales for the year consisting of Naphtha and
Lube Base Oils amounted to Rs. 3.208 billion compared
to last year's sale of Naphtha amounting to Rs. 1.428 billion.
MANUFACTURING, SELLING, ADMIN. & FINANCIAL EXPENSES:
The total manufacturing expenses for the year were Rs.
1,653 million (excluding depreciation) compared to Rs.
1,590 million (excluding depreciation) last year. There
was an increase of only 4% despite the impact of inflation
and devaluation of Pak Rupee.
The Selling and Administration Expense were Rs. 235
million (excluding depreciation) this year against Rs. 224
million (excluding depreciation) last year.
Despite long outstanding receivable of Rs. 4.4 billion from
PSO and Rs. 3.4 billion from the Government on account
of pricing Formula. The financial expenses were Rs. 68
million compared to Rs. 114 million of last year.
PROJECTS:
The Company is undertaking increase in the production
capacity of Lube Refinery through Revamping. After
successful completion and commissioning of the Lube
expansion project at a total cost of around 962 million
including foreign exchange component of Rs. 430 million,
the production of Lube Base Oil would be increased by
14,800 tons. This project besides being economically
viable would result in reducing the cost of production. The
project also entails substantial foreign exchange saving.
The payback period of the project is around 4 years. The
PC-I of the project has formally been submitted to the
Government for approval.
NRL was facing production losses due to frequent
power failure by KESC. To decrease the dependency on
KESC, a standby 4.0 MW Diesel Generator unit and 7.5
MW Steam Power Generator have been commissioned.
Moreover a contract was signed with Annoud Power
Generation Company (APGL) to provide balance
electricity requirement of the company in replacement of
KESC supply. APGL has recently started producing the
electricity and presently supplying 4.0 MW electricity to
NRL. The un-interrupted supply from self power
generation and APGL would reduce the production
losses.
Water sources are being developed to recover subsoil
water. In this respect Reverse Osmosis plant of 200,000
gallons per day capacity will be installed.
At present NRL has only one tank of 11,000 tons capacity
which is catering current Naphtha exports of 110,000 tons
per annum. Therefore, the construction of two Naphtha
tanks at Keamari Terminal has been started for additional
tankage of 20,000 tons which would facilitate the export
of bigger parcel at better price. This project is estimated
to be completed by December 2001.
TRAINING AND DEVELOPMENT:
The training and development of Human Resources of
the Company continues in the priority areas. Executives
availed training in Japan. They were also nominated to
various Technical / Management courses. Special
emphasis was laid on in house training programs for the
Management, staff and workers.
QUALITY AND STANDARDS:
Quality standards are enforced at each stage of
production for Lube Base Oil products, Fuel products,
Asphalt and Specialty products. NRL Laboratory has
achieved ISİ 9002 certificate on Quality. The use of
NRL's Lube Base Oil by all the major National and
International companies to produce finished Lubricants
and the export of NRL's Lube Base Oils testifies to the
high quality of NRL's products.
STAFF:
I wish to share with you my deep appreciation for
achieving the top 25 Companies award of the Karachi
Stock Exchange and appreciate the untiring efforts and
dedication of all the executives, staff and workers during
the year in keeping the Refinery operating which has
enabled the company to achieve a record profit.
I would also like to pay tribute to the members of the
Board for their keen participation and guidance in the
affairs of the company. I am also thankful to all financial
institution, bankers, leasing companies, World Bank and
suppliers who extended their support and co-operation to
the management in carrying out the operation of the
company.
I conclude with a word about you, our esteemed
shareholders. It is heartening to know that we continue to
receive your support and confidence and trust that this
will continue in the future as well.
ZAFAR IQBAL
Chairman
Highlights
*Record sales of Lube Base Oil
* Highest ever Profit after tax
* Highest ever dividend declared
* Ranked among Top 25 Companies
of Karachi Stock Exchange
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed balance sheet of NATIONAL REFINERY LIMITED as at
June 30, 2001 and the related profit and loss account, cash flow statement and statement of changes
in equity 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.
It 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 standards and the requirements of the Companies Ordinance, 1984. Our responsibility is
to express an opinion on these statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These
standards require that we plan and perform the audit to obtain reasonable assurance about whether
the above said statements are free of any material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the above said statements. An audit
also includes assessing the accounting policies and significant estimates made by management, as
well as, evaluating the overall presentation of the above said statements. We believe that our audit
provides a reasonable basis for our opinion and, after due verification, we report that:
(a) in our opinion, proper books of accounts 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, except for the
charge for sales tax, etc., aggregating to Rs.549.409 million, included in the
accounts in note 25.1 under sales tax, which should be shown under "Other charges"
as required by the Fourth Schedule to the Companies Ordinance, 1984, resulting in
reduction of gross profit and other charges for the year by the above-referred
amount, without any impact on the profit before taxation, 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) 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, cash flow statement and statement of
changes in equity together with the notes forming part thereof. conform with approved
accounting standards as applicable in Pakistan, and, give the information required by the
Companies Ordinance, 1984, in the manner so required, except for the matter stated in b (i)
above, and respectively give a true and fair view of the state of the company's affairs as at
June 30, 2001 and of the profit, its cash flows and changes in equity for the year then ended;
(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 7 of that Ordinance; and
(e) without qualifying our opinion, we draw attention to the contents of notes 6.5, 9.1 and 23.7
relating to loans and advance, trade debts and contingencies, respectively.
Karachi
September 7, 2001 Chartered Accountants.
Balance Sheet as at June 30, 2001
Note 2001 2000
(Rupees in '000)
ASSETS
NON-CURRENT ASSETS
Tangible fixed assets
Operating fixed assets at cost less accumulated depreciation 3 1,358,271 1,004,698
Capital work-in-progress 4 121,638 509,225
------------------ ------------------
1,479,909 1,513,923
Long term investments 5 9 9
Long term loans, advance and deposits 6 144,141 145,280
CURRENT ASSETS
Stores, spares and chemicals 7 425,946 494,658
Stock-in-trade 8 3,051,980 2,686,016
Trade debts 9 5,395,064 4,903,691
Loans and advances 10 686,058 39,234
Deposits and prepayments 11 65,047 80,375
Other receivables 12 4,676,433 4,599,173
Cash and bank balances 13 88,291 142,580
------------------ ------------------
14,388,819 12,945,727
------------------ ------------------
TOTAL ASSETS 16,012,878 14,604,939
========== ==========
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Share Capital
Authorised
100,000,000 Ordinary shares of Rs. 10 each 1,000,000 1,000,000
========== ==========
Issued, subscribed and paid-up 14 666,388 666,388
Reserves 15 2,162,904 1,720,431
------------------ ------------------
2,829,292 2,386,819
NON-CURRENT LIABILITIES
Long term loans 16 6,264 96,956
Obligations under finance leases 17 1,596 4,313
Deferred liabilities 18 94,300 119,474
CURRENT LIABILITIES
Current maturities of long term loans
and obligations under finance leases 19 106,115 93,743
Short term running finances 20 1,375,720 630,584
Creditors, accrued and other liabilities 21 11,321,842 11,011,125
Provision for taxation - net -- 19,030
Dividends 22 277,749 242,895
------------------ ------------------
13,081,426 11,997,377
CONTINGENCIES AND COMMITMENTS 23 ------------------ ------------------
TOTAL EQUITY AND LIABILITIES 16,012,878 14,604,939
========== ==========
The annexed notes form an integral part of these accounts.
ZAFAR IQBAL M.M. HUSAIN MUHAMMAD IQBAL AWAN
Chairman Chief Executive Director
Profit and Loss Account
for the year ended June 30, 2001
Note 2001 2000
(Rupees in '000)
GROSS SALES 24 36,124,192 28,980,298
REFUNDS UNDER THE IMPORT PARITY FORMULA 2,912,492 3,945,364
------------------ ------------------
39,036,684 32,925,662
Duties, taxes and levies 25 4,705,763 3,297,253
------------------ ------------------
NET SALES 34,330,921 29,628,409
Cost of sales 26 33,057,819 28,375,324
------------------ ------------------
GROSS PROFIT 1,273,102 1,253,085
OTHER INCOME 27 238,751 256,246
------------------ ------------------
1,511,853 1,509,331
------------------ ------------------
Administrative, selling and general expenses 28 246,100 232,492
Other charges 29 81,697 70,236
------------------ ------------------
327,797 302,728
------------------ ------------------
OPERATING PROFIT 1,184,056 1,206,603
Financial charges 30 67,934 113,544
------------------ ------------------
PROFIT BEFORE TAXATION 1,116,122 1,093,059
Taxation 31 340,455 386,352
------------------ ------------------
NET PROFIT FOR THE YEAR 775,667 706,707
Unappropriated profit brought forward 172 340
------------------ ------------------
PROFIT AVAILABLE FOR APPROPRIATION 775,839 707,047
APPROPRIATIONS
Interim dividend @ Re.1 (2000: Re.1) per Ordinary
share of Rs.10 each 66,639 66,639
Proposed final dividend @ Rs.4 (2000: Rs.3.5) per
Ordinary share of Rs. 10 each 266,555 233,236
Transfer to General reserve 442,000 407,000
------------------ ------------------
775,194 706,875
------------------ ------------------
UNAPPROPRIATED PROFIT CARRIED FORWARD 645 172
========== ==========
BASIC EARNINGS PER SHARE 32 11.64 10.61
========== ==========
The annexed notes form an integral part of these accounts.
ZAFAR IQBAL M.M. HUSAIN MUHAMMAD IQBAL AWAN
Chairman Chief Executive Director
Statement of Changes in Financial Position (Cash Flow)
for the year ended June 30, 2001
Note 2001 2000
(Rupees in '000)
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations 864 348 1,042,920
Financial charges paid (183,644) (164,183)
Income tax paid (1,029,854) (761,499)
Gratuity paid (716) (687)
Return / Interest received on bank deposits and
secured loans to employees 52,623 89,737
------------------ ------------------
Net cash (used in) / from operating activities (297,243) 206,288
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed capital expenditure (124,861) (74,135)
Proceeds on disposal of fixed assets 917 209
Long term loans, advance and deposits 1,139 2,120
------------------ ------------------
Net cash used in investing activities (122,805) (71,806)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid (298,340) (330,165)
Lease finances (2,343) 1,481
Long term loans (78,694) (204,781)
------------------ ------------------
Net cash used in financing activities (379,377) (533,465)
------------------ ------------------
Net decrease in cash and cash equivalents (799,425) (398,983)
Cash and cash equivalents at the beginning of the year (488,004) (89,021)
------------------ ------------------
Cash and cash equivalents at the end of the year 35 (1,287,429) (488,004)
========== ==========
ZAFAR IQBAL M.M. HUSAIN MUHAMMAD IQBAL AWAN
Chairman Chief Executive Director
Statement of Changes in Equity
for the year ended June 30, 2001
Share Capital Capital Reserves Revenue Reserves
Issued, Capital Exchange
subscribed compensation equalisation General Unappropriated Total
and paid-up reserves reserve reserve profit
(Rupees in '000)
Balance as at June 30, 1999 666,388 10,142 4,117 1,299,000 340 1,979,987
Net profit for the year -- -- -- -- 706,707 706,707
Interim dividend @ 10% -- -- -- -- (66,639) (66,639)
Final dividend @ 35% -- -- -- -- (233,236) (233,236)
Transfer to general reserve -- -- -- 407,000 (407,000) --
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Balance as at June 30, 2000 666,388 10,142 4,117 1,706,000 172 2,386,819
Net profit for the year -- -- -- -- 775,667 775,667
Interim dividend @ 10% -- -- -- -- (66,639) (66,639)
Final dividend @ 40% -- -- -- -- (266,555) (266,555)
Transfer to general reserve -- -- -- 442,000 (442,000) --
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Balance as at June 30, 2001 666,388 10,142 4,117 2,148,000 645 2,829,292
========== ========== ========== ========== ========== ==========
ZAFAR IQBAL M.M. HUSAIN MUHAMMAD IQBAL AWAN
Chairman Chief Executive Director
Notes to the Accounts
for the year ended June 30, 2001
1. THE COMPANY AND ITS OPERATIONS
National Refinery Limited was incorporated in Pakistan on August 19, 1963 as a public limited company. The               ~
shares of the company are listed on the Karachi, Lahore and Islamabad Stock Exchanges. It is engaged in
the production and sale of petroleum products.
The refinery complex of the company comprises of three refineries, consisting of two lube refineries,
commissioned in 1966 and 1985, and a fuel refinery added to the complex in 1977.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Accounting convention
These accounts have been prepared under the historical cost convention except that certain
exchange differences and borrowing costs referred to in notes 2.3, 2.8 and 2.11 have been
incorporated in the cost of relevant assets.
2.2 Consolidated financial statements
The company has not prepared the consolidated financial statements comprising the financial
statements of the company and its wholly owned subsidiary, National Oil Marketing (Private) Limited,
as at June 30, 2001 in view of the current dormant status of the wholly owned subsidiary coupled
with the company's plan to subsequently restructure the operations thereof in the near future.
2.3 Tangible fixed assets
(a) Owned
These are stated at cost less accumulated depreciation. Exchange gains and losses in
respect of long term foreign currency loans acquired and utilised for the acquisition of assets
are included in the cost of the respective assets.
Depreciation is charged to income applying the straight line method whereby the cost of the
asset is written off over its estimated useful life. The rates used are stated in note 3 to the
accounts. Full year's depreciation is charged in the year of addition while no depreciation is
charged in the year 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 currently.
(b) Leased
Assets held under finance leases are stated at cost less accumulated depreciation. The
outstanding obligations under finance leases less financial charges allocated to future periods
are shown as a liability. The financial charge to-date is calculated at the interest rates implicit
in the leases and is charged to profit and loss account.
Depreciation is charged at the same rates as charged on company's owned assets or over the
lease period as appropriate.
2.4 Capital work-in-progress
Capital work-in-progress is stated at cost. It consists of expenditure incurred in respect of fixed
assets in the course of their construction and installation.
2.5 Long term investments
Investments in quoted shares are stated at lower of cost and market value, determined on an
individual portfolio basis.
Investments in unquoted shares are valued at cost. However, where in the opinion of the
management there is a decline which is other than temporary, the carrying amount of the investment
is reduced to recognize the decline.
2.6 Stores, spares and chemicals
Stores, spares and chemicals, excluding drum sheets, empty drums and items in transit are valued
at moving average cost. Drum sheets and empty drums are valued at cost using first-in-first out
(FIFO) basis whereas items in transit are valued at cost comprising invoice values plus other
charges incurred thereon accumulated to the balance sheet date
2.7 Stock-in-trade
Stock of crude oil is valued at cost determined on first-in-first out basis. Crude oil in transit is valued
at cost comprising invoice values plus other charges incurred thereon accumulated to the balance
sheet date. Stock of semi-finished and finished products are valued at lower of cost and net
realisable value. Cost in relation to semi-finished and finished products represents cost of crude oil
and an appropriate allocation of manufacturing overheads. Cost in respect of semi-finished items is
adjusted to appropriate stage of processing.
Net realisable value represents import parity prices as published in the Platt's Pilgrim.
2.8 Foreign currency translation
Assets and liabilities in foreign currencies are translated into rupees at exchange rates
approximating those prevailing at the balance sheet date. Exchange differences on loans obtained
for acquisition of fixed assets are capitalised. All other exchange differences are routed through the
profit and loss account.
2.9 Taxation
The Company accounts for current taxation on the basis of taxable income at the current rates of
taxation after taking into account tax credits and rebates available, if any.
The Company accounts for deferred taxation on all timing differences using the liability method.
However, deferred tax is not provided if it can be established with reasonable probability that these
timing differences will not reverse in the foreseeable future.
2.10 Revenue recognition
Local sales are recorded on the basis of products delivered to the tanks of marketing companies and
customers.
Export sales are recorded on the basis of products delivered to tankers and shipped to customers.
Rebate on exports, if any, is accounted for on receipt basis.
Return / Interest on bank deposits and advances to employees are recognized on accrual basis.
Interest income resulting from overdue balances, if any, included in trade debts and markup on long
term loan to PERAG are accounted for on a receipt basis.
Scrap sales is recognised on receipt basis.
2.11 Borrowing costs
Borrowing costs incurred in respect of loans obtained for specific projects are capitalised during their
construction and are written off after their completion. Any income earned on unutilised loans is
netted off against capitalised borrowing costs.
2.12 Staff retirement benefits
The company participates in the funded pension scheme, established for the management staff of
companies, administered by the company. This scheme is managed by the company through a fund
established out of contributions from the participating companies and are based on actuarial
valuation. The projected unit credit actuarial cost method has been adopted for valuation of the
schemes. The latest valuation in this regard was carried out as on January 01, 2000. The company's
share in the fair value of assets and liabilities of the scheme for the past services of employees at
the valuation date was Rs. 527.746 million and Rs. 546.651 million, respectively.
The future contribution rate is 20 percent per annum of basic salary. Significant assumptions used
for valuation of the scheme are:
- Discount rate 10 percent per annum.
- Expected rate of increase in salaries level 11 percent per annum.
- Expected rate of interest on investment 12 percent per annum.
In addition to the above, the company operates:
(a) an unfunded gratuity scheme covering all workers and clerical staff whose period of service
with the company is five years or more. Based on graduated rates fixed under the scheme and
calculated with reference to the last drawn salary and length of service of the employee,
amounts are provided annually by way of a charge to profit and loss account to cover
obligations under the scheme.
(b) an approved contributory provident fund for all employees. Equal monthly contributions are
made, both by the company and the employees, to the fund at the rate of 10% of basic salary.
Accrual is made for employees compensated absences on the basis of accumulated leaves
and the last drawn pay.
2.13 Research and development costs
Contributions made to the Research and Development Fund are charged against current income
together with other related expenses incurred by the company.
2.14 Import parity entitled prices
Effective July 01, 1992 the Government introduced an Import Parity Formula under which product
prices had been fixed at CIF level, restricting the profitability of the Fuel Refinery in the range of 10%
to 40% (including "other income") on the paid-up capital with no such restriction in respect of the
Lube Refinery. Effective July 1, 1994, the company has retained the non-refining income in addition
to the above restricted return on capital, in accordance with the 1994 petroleum policy.
3. OPERATING FIXED ASSETS
(Rupees in '000)
WRITTEN
DOWN
COST ACCUMULATED DEPRECIATION VALUE
As at Additions/ As at Rate As at For the (on Disposals)/ AS at As at
July Transfers* (Disposals) June % July Year Transfers* June June
01, 2000 30, 2001 01, 2000 30, 2001 30, 2001
OWNED
Leasehold land
(note 3.1) 59,216 -- -- 59,216 1 5,613 594 -- 6,207 53,009
Building on leasehold
land         62,004 3,778 -- 65,782 5 41,317 2,382 -- 43,699 22,083
Oil Terminal 114,421 2,326 -- 116,747 6 97,593 1,555 -- 99,148 17,599
Processing plant and
storage tanks 3,593,089 8,557 -- 3,601,646 5 to 7 3,068,558 50,372 -- 3,118,930 482,716
Power Generation
Plants  223,653 477,157 -- 700,810 7 46,968 49,057 -- 96,025 604,785
Pipelines 111,693 -- -- 111,693 8 106,262 677 -- 106,939 4,754
Water power and
other utilities 714,762 1,874 -- 716,636 6 560,652 38,589 -- 599,241 117,395
Vehicles 22,837 5,299 (2,674) 25,462 20 19,957 2,528 (2,527) 19,958 5,504
Furniture and fixtures 10,373 488 -- 10,861 7.5 7,143 505 -- 7,648 3,213
Computers and related
accessories (note 3.2) -- 4,927 -- 20,554 33.33 -- 4,896 9,821 * 14,717 5,837
15,627 *
Office and other
equipment 127,825 8,042 (150) 120,090 5 to 15 87,612 5,595 (119) 83,267 36,823
(15,627) * (9,821) *
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
5,039,873 512,448 (2,824) 5,549,497 4,041,675 156,750 (2,646) 4,195,779 1,353,718
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
LEASED
Vehicles 9,734 -- -- 9,734 20 3,234 1,947 -- 5,181 4,553
9,734 -- -- 9,734 3,234 1,947 -- 5,181 4,553
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
June 30, 2001 5,049,607 512,448 (2,824) 5,559,231 4,044,909 158,697 (2,646) 4,200,960 1,358,271
========== ========== ========== ========== ========== ========== ========== ========== ==========
June 30, 2000 4,874,086 176,067 (546) 5,049,607 3,923,772 121,548 (411) 4,044,909 1,004,698
========== ========== ========== ========== ========== ========== ========== ========== ==========
3.1 Leasehold land includes a piece of land measuring 13,200 square yards, sub-leased to Anoud Power Generation Limited (APGL)
for the purposes of setting up a power plant to provide power to the refinery.
3.2 With effect from the current year, the company changed the rate of depreciation for computers and related accessories from 15%
per annum to 33.33% per annum, after reconsidering their useful lives and reclassification, as shown above.
Had the company not made this change, depreciation charge for the year would have been lower by Rs.1.584 million whereas
net profit for the year would have been higher by the same amount.
Note 2001 2000
(Rupees in '000)
3.3 Depreciation for the year has been allocated as follows:
Cost of Sales 26 147,161 112,929
Administrative, selling and general expenses 28 11,536 8,619
------------------ ------------------
158,697 121,548
========== ==========
3.4 During the year, the following amounts have been transferred from Capital Work-in-progress to fixed
assets:
2001 2000
(Rupees in '000)
Building on leasehold land 2,120 1,224
Oil terminal 2,326 12,071
Processing plant and storage tanks 2,766 136,825
Power generation plants 477,157 --
Pipelines -- 698
Water power and other utilities 716 5,454
Office and other equipment 4,317 2,286
------------------ ------------------
489,402 158,558
========== ==========
3.5 The following fixed assets were disposed of during the year:
Accumulated Written Sale Mode of Particulars of
Description Cost depreciation down value proceeds disposal buyers
(Rupees in '000)
Vehicle 734 587 147 380 Company policy Mr. Altaf
Hussain
(Ex-Employee)
Vehicles with Written
Down Value of
below Rs.5,000 1,940 1,940 -- 506 Company policy/ Various
------------------ ------------------ ------------------ ------------------ Negotiation
2,674 2,527 147 886
Equipment 11 5 6 6 Company policy Mr. Altaf
Hussain
(Ex-Employee)
Equipment with Written
Down Value of
below Rs.5,000 139 114 25 25 Company policy Various
------------------ ------------------ ------------------ ------------------
2,824 2,646 178 917
========== ========== ========== ==========
Additions/
2001 (Transfers) 2000
(Rupees in '000)
4. CAPITAL WORK-IN-PROGRESS
Power Generation Plant (7.5 M.W.)
Fees and technical studies -- (54,964) 54,964
Material, equipment & cost of related services -- 1,189 352,084
(353,273)
Borrowing costs -- (68,274) 68,274
Other expenditure -- (646) 646
------------------ ------------------ ------------------
-- 1,189 475,968
(477,157)
Processing Plant and Storage Tanks
Fees and technical studies 175 6 169
Material, equipment and cost of related services 89,084 73,342 15,742
Advances to contractors 4,363 4,363 --
------------------ ------------------ ------------------
93,622 77,711 15,911
Other Projects 28,016 22,915 17,346
Building on leasehold land -- (2,120) --
Oil terminal -- (2,326) --
Processing plant and storage tanks -- (2,766) --
Water power and other utilities -- (716) --
Office and other equipment -- (4,317) --
------------------ ------------------ ------------------
28,016 22,915 17,346
(12,245)
------------------ ------------------ ------------------
121,638 (387,587) 509,225
========== ========== ==========
Note 2001 2000
(Rupees in '000)
5. LONG TERM INVESTMENTS
Wholly owned subsidiary
National Oil Marketing (Private) Limited
100 (2000: 100) Ordinary shares of Rs.10 each 2.2 1 1
[Break-up value, Rs. Nil (2000: Rs. Nil) per Ordinary
share on the basis of audited financial statements
for the year ended June 30, 2001]
Listed
Pakistan PVC Limited 8 8
3,125 Ordinary shares of Rs.10 each
[Market value Rs.8,125 (2000: Rs.8,125)]
Unlisted
Anoud Power Generation Limited 10,800 10,800
1,080,000 Ordinary shares of Rs.10 each.
[Chief Executive: Tasveer A. Jumani.
Break-up value of each Ordinary share of Rs.10: Rs.10
(2000: Rs.10) per Ordinary share based on the latest audited
accounts available for the year ended June 30, 2000]
Fuel Pipelines Limited 50 50
5,000 Ordinary shares of Rs.10 each. [Equity held 10%
(2000: 10%), Chief Executive: Syed Amjad Hussain
Break-up value of each Ordinary share of Rs.10: Rs.4.87
(2000: Rs.4.89) per Ordinary share based on the latest audited
accounts available for the year ended June 30, 2000] ------------------ ------------------
10,850 10,850
Provision for diminution in value of investments in
unlisted securities (10,850) (10,850)
------------------ ------------------
9 9
========== ==========
6. LONG TERM LOANS, ADVANCE AND DEPOSITS
Considered good
Loans
Secured
Executives 19,246 24,650
Employees 3,146 2,188
------------------ ------------------
6.1 22,392 26,838
Less: Recoverable within one year shown
under current assets
Executives 5,873 7,240
Employees 1,062 497
------------------ ------------------
10 6,935 7,737
------------------ ------------------
15,457 19,101
Unsecured ------------------ ------------------
Executives 9,565 12,968
Employees 1,060 917
------------------ ------------------
6.2 10,625 13,885
Less: Recoverable within one year shown
under current assets
Executives 1,459 3,019
Employees 537 345
------------------ ------------------
10 1,996 3,364
------------------ ------------------
8,629 10,521
State Petroleum Refining and Petrochemical
Corporation (Private) Limited (PERAC) 6.3 & 6.5 60,000 60,000
------------------ ------------------
84,086 89,622
Advance
Unsecured
State Petroleum Refining and Petrochemical
Corporation (Private) Limited (PERAC) 6.4 & 6.5 50,000 50,000
Deposits 10,055 5,658
------------------ ------------------
144,141 145,280
========== ==========
Loans & advance outstanding for periods
exceeding three years 124,158 126,560
Others 9,928 13,062
------------------ ------------------
134,086 139,622
========== ==========
6.1 The secured loans to executives and employees are for the purchase of motor cars and house
building. These are granted in accordance with the terms of their employment and are recoverable
in monthly installments over a period ranging between 7 and 10 (2000: 7 and 10) years. Motor car
loans carry interest ranging between 3% and 7% (2000: 3% and 7%) per annum and are secured
against respective vehicles purchased by them as opposed to house building loans which are
interest free and secured against title documents of the property purchased by the employees.
The maximum aggregate amount due from executives in respect of secured loans at the end of any
month during the year was Rs.23.366 (2000: Rs.26.772) million.
6.2 The unsecured loans to executives and employees are personal loans and are for the purchase of
furniture and motor cycles. These are granted in accordance with the terms of their employment and
are recoverable in monthly installments over a period ranging between 2 and 12 (2000: 2 and 12)
years and are interest free.
The maximum aggregate amount due from executives in respect of unsecured roans at the end of
any month during the year was Rs.11.891 (2000: Rs.14.103) million.
6.3 The company has extended a sum of Rs.60.00 million as a loan to the State Petroleum Refining and
Petrochemical Corporation (Private) Limited (PERAC) for the purposes of setting up the Iran-Pak
Refinery Project, under the directives of the Government of Pakistan. Although the loan carries
markup @ 14% (2000: 14%) per annum, the company has decided not to accrue the same with
effect from July 1, 1998 in view of uncertainty regarding the realization thereof due to the poor
financial position of PERAC. The company has the option to convert the loan into equity in the
above-referred project.
6.4 This represents an interest free advance given to PERAC for acquiring shares in the National
Crescent Petroleum Limited. The shares have not yet been allotted to the company.
6.5 The company is confident that as a result of its efforts which it is currently making, it will succeed in
recovering these amounts (notes 6.3 & 6.4). Hence, it does not consider it appropriate to provide
against these balances.
2001 2000
(Rupees in '000)
7. STORES, SPARES AND CHEMICALS
In hand
Stores 233,471 216,900
Spares 528,393 495,583
Chemicals 132,399 127,220
In transit 27,157 26,854
------------------ ------------------
921,420 866,557
Provision for slow moving stores, spares and chemicals (495,474) (371,899)
------------------ ------------------
425,946 494,658
========== ==========
7.1 Due to the nature of the inventory of the company, stores and spares held for capital expenditure
purposes cannot be separately identified.
8. STOCK-IN-TRADE
Crude oil
in tanks 1,130,653 846,720
in transit 493,663 406,067
------------------ ------------------
1,624,316 1,252,787
Semi finished products 531,325 373,880
Finished products 896,339 1,059,349
------------------ ------------------
3,051,980 2,686,016
========== ==========
9. TRADE DEBTS
Unsecured
Considered good 9.1 5,395,064 4,903,691
Considered doubtful 22,735 22,735
------------------ ------------------
5,417,799 4,926,426
Provision against debts considered doubtful (22,735) (22,735)
------------------ ------------------
5,395,064 4,903,691
========== ==========
9.1 Included herein is a sum of Rs.4,414 (2000: Rs. 4,414) million due from the Pakistan State Oil Company
Limited (PSO) at the end of the year. The same was due from the Karachi Electric Supply Corporation
(KESC) untill February 10, 2001 pursuant to the mandate given by the Federal Government for a period
of twenty four months. After the expiry of the said period, the company is making necessary efforts to
recover the same from PSO and, hence, pending the outcome of these efforts, no provision has been
made thereagainst.
10. LOANS AND ADVANCES
Considered good
Loans
Current portions of long term loans
Secured
Executives 5,873 7,240
Employees 1,062 497
------------------ ------------------
6 6,935 7,737
Unsecured
Executives 1,459 3,019
Employees 537 345
------------------ ------------------
6 1,996 3,364
Short term loans to employees 2,241 2,228
Advances
Executives 1,142 515
Employees 54 5
Suppliers 32,713 25,385
Income tax - net 10.1 640,977 --
------------------ ------------------
674,886 25,905
------------------ ------------------
686,058 39,234
========== ==========
10.1 This represents excess of advances paid in respect of income tax for the assessment years 2000-2001
and 2001-2002 over provisions.
10.2 The maximum aggregate amount due from executives in respect of advances at the end of any month
during the year was Rs.1.142 (2000: Rs.0.602) million.
Note 2001 2000
(Rupees in '000)
11. DEPOSITS AND PREPAYMENTS
Deposits
Development surcharge 1,838 6,026
Excise duty 25,769 31,005
Margin against letters of credit and guarantee 782 2,400
Lease deposits 883 883
Others 718 1,905
------------------ ------------------
29,990 42,219
Prepayments
Rent 80 --
Insurance 27,746 29,758
Miscellaneous 7,231 8,398
------------------ ------------------
35,057 38,156
------------------ ------------------
65,047 80,375
========== ==========
12. OTHER RECEIVABLES
Considered good
Due from
National Oil Marketing (Private) Limited -
a wholly owned subsidiary 1,577 1,456
Government of Pakistan 12.1 4,254,323 4,000,304
Pakistan State Oil Company Limited (PSO) 641 10,452
Pakistan Refinery Limited (PRL) 12.2 31,165 45,659
Pak Arab Refinery Limited (PARCO) 12.3 54,612 --
Interest accrued on unsecured
long term loan to PERAC 6.3 7,531 7,531
Return on bank deposits 3,402 951
Claims receivable 12.4 2,950 2,073
Sales tax - net 314,553 528,021
Income tax refundable 2,726 2,726
Miscellaneous 2,953 --
------------------ ------------------
4,676,433 4,599,173
========== ==========
12.1 This represents the net balance of:
(a) refund of Rs.3,747.745 (2000: Rs.3,945.364) million, including Rs.835.253 million in respect of the
year ended June 30, 2000, due from the Government of Pakistan under the Import Parity Formula,
discussed in note 2.14 to these accounts.
(b) development surcharge of Rs. Nil (2000: Rs.78.328) million due from the Government of Pakistan on
furnace oil used as feedstock in the lube refinery in respect of the period commencing 1995-96 to
1998-99.
(c) sales tax (input) of Rs. 529.966 million (2000: Rs. Nil) due from the Government of Pakistan on crude
oil purchased for the production of "JP-I" which is exempt under the Sales Tax Act, 1990.
(d) Rs.23.388 (2000: Rs.23.388) million due to the Government of Pakistan in respect of net debt
servicing costs whereby excess of interest earned on funds, previously set aside for the purposes of
repayment of short term loan obtained by the company from the Islamic Development Bank in the
past, over interest paid thereon and resulting exchange rate fluctuations is payable to the
Government and, hence, the balance of Rs.23.388 million, as referred to above, is due in this regard.
12.2 This represents the excess of (a) amount due from PRL on account of custom duties and other
related charges paid by the company on behalf of PRL over (b) amount due thereto in respect of
purchase of crude oil.
12.3 This represents amount due from PARCO on account of import of crude oil, custom duties and other
related charges paid by the company on behalf of PARCO under an agreement signed during the
year.
12.4 Included herein are claims in respect of insurance and sales tax amounting to Rs.0.175
(2000: Rs.0.262) million and Rs.2.737 (2000: Rs.1.811) million, respectively.
2001 2000
(Rupees in '000)
13. CASH AND BANK BALANCES
In hand 582 568
At banks in
current accounts 46,746 105,236
saving accounts 28,387 27,136
foreign currency deposit account 12,576 9,640
------------------ ------------------
87,709 142,012
------------------ ------------------
88,291 142,580
========== ==========
14. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
2001 2000
59,450,417 59,450,417 Ordinary shares of Rs.10 each fully 594,504 594,504
paid in cash
6,469,963 6,469,963 Ordinary shares of Rs.10 each fully paid 64,700 64,700
for consideration other than cash
718,420 718,420 Ordinary shares issued as fully paid 7,184 7,184
bonus shares
------------------ ------------------ ------------------ ------------------
66,638,800 66,638,800 666,388 666,388
========== ========== ========== ==========
Note 2001 2000
(Rupees in '000)
15. RESERVES
Capital reserves
Capital compensation reserves 15.1 10,142 10,142
Exchange equalisation reserve 4,117 4,117
------------------ ------------------
14,259 14,259
Revenue reserves
General reserve 15.2 2,148,000 1,706,000
Unappropriated profit carried forward 645 172
------------------ ------------------
2,148,645 1,706,172
------------------ ------------------
2,162,904 1,720,431
========== ==========
15.1 Capital compensation reserves
(a) For premature termination of crude oil sales,
bareboat charter-party and technical
assistance agreements 17,396 17,396
(b) For design defects and terminated service
agreements 613 613
(c) For termination of bareboat charter-party and
affreightment agreements 395 395
------------------ ------------------
18,404 18,404
Less: Capitalised by issue of bonus shares of
Rs. 7.184 (2000: Rs.7.184) million,
including tax thereon 8,262 8,262
------------------ ------------------
10,142 10,142
========== ==========
15.2 General reserve
Balance at the beginning of the year 1,706,000 1,299,000
Appropriation during the year 442,000 407,000
------------------ ------------------
2,148,000 1,706,000
========== ==========
16. LONG TERM LOANS
Unsecured
State Petroleum Refining and Petrochemical
Corporation (Private) Limited (PERAC) 16.1 109,683 188,377
Less: Current maturities shown under
current liabilities 19 103,419 91,421
------------------ ------------------
6,264 96,956
========== ==========
16.1 The balance outstanding at the end of the current year in respect of unsecured loans from PERAC is
repayable thereto in Pak Rupees, equivalent to approximately U.S. Dollars 1.703 (2000: U.S. Dollars
3.602) million. These loans, originally consisting of two separate loans of U.S. Dollars 19.625 million
and U.S. Dollars 1.087 million, aggregating to U.S. Dollars 20.712 million, were arranged by PERAC
from the International Bank for Reconstruction and Development (IBRD) for the purposes of improving
the efficiency and operations of the company and, hence, PERAC relent the above referred U.S. Dollars
Rs.20.712 million equivalent to the company under two separate subsidiary loan agreements.
These loans carry interest at the rate of one half of one percent and three fourth of one percent per
annum, respectively, above the rate of qualified borrowings for the last semester ending prior to the
commencement of such interest period. Accordingly, the effective rate of interest for the year worked
out @ 5.06% (2000: 5.40%) per annum.
The repayments in respect of the loan of U.S. Dollar 19.625 million are to be made in two equal half
yearly installments of U.S. Dollar 0.925 million. equivalent whereas repayments in respect of U.S. Dollar
1.087 million are to be made in four equal half yearly installments of U.S. Dollar 0.036 million equivalent.
17. OBLIGATIONS UNDER FINANCE LEASES
The company has entered into finance lease agreements with the leasing companies in respect of vehicles.
The rates of interest used as the discounting factor ranges between 14.95% and 18.06% (2000: 14.95%
and 18.06%) per annum. There are no financial restrictions in the lease agreements.
The amount of future minimum lease payments together with the present value of the minimum lease
payments and the periods during which they fall due are as follows:
2001 2000
Present value Present value
Minimum of minimum Minimum of minimum
Note lease payments lease payments lease payments lease payments
(Rupees in '000)
Year ending
June 30, 2001 -- -- 3,284 2,343
June 30, 2002 3,229 2,696 3,229 2,696
June 30, 2003 1,407 1,252 1,407 1,252
June 30, 2004 358 344 358 344
------------------ ------------------ ------------------ ------------------
Total minimum lease
payments 4,994 4,292 8,278 6,635
Less: Financial charges
allocated to future periods 702 -- 1,643 --
------------------ ------------------ ------------------ ------------------
Present value of minimum
lease payments 4,292 4,292 6,635 6,635
Less: Current maturity shown
under current liabilities 19 2,696 -- 2,322 --
------------------ ------------------ ------------------ ------------------
1,596 4,292 4,313 6,635
========== ========== ========== ==========
Note 2001 2000
(Rupees in '000)
18. DEFERRED LIABILITIES
Gratuity 62,086 59,233
Compensated absences 25,010 23,645
Deferred taxation 18.1 7,204 36,596
------------------ ------------------
94,300 119,474
========== ==========
18.1 Deferred taxation
Deferred tax credits arising from timing differences
relating to fixed assets 258,544 209,651
Deferred tax debits arising from various provisions (251,340) (173,055)
------------------ ------------------
7,204 36,596
========== ==========
19. CURRENT MATURITIES OF LONG TERM LOANS AND
OBLICATIONS UNDER FINANCE LEASES
Long term loans - unsecured 16 103,419 91,421
Obligations under finance leases 17 2,696 2,322
------------------ ------------------
106,115 93,743
========== ==========
20. SHORT TERM RUNNING FINANCES
Under mark-up arrangements - secured 1,375,720 630,584
========== ==========
The facilities for short term running finances available from various banks amounted to Rs.1,700.00 2000:
Rs.1,536.00) million.
The rates of markup ranges from 13% to 14% (2000: 11% to 13.75%) per annum, payable quarterly.
The facilities are secured against pari passu charge on stock of crude oil, hypothecation of stock of crude
oil and petroleum products, first and second charge on stock-in-trade, additional charge on current assets
and mortgage charge over land, building and machinery of the company.
The purchase prices are repayable on various dates, latest by December 31, 2001.
21 .CREDITORS, ACCRUED AND OTHER LIABILITIES
Creditors 10,186,004 9,737,915
Accrued liabilities
Mark-up on:
secured short term running finances 8,227 21
unsecured customs duty 310,264 432,059
------------------ ------------------
318,491 432,080
Interest on:
unsecured long term loans 501 396
secured short term loans -- 1,016
------------------ ------------------
501 1,412
Accrued expenses 539,214 520,450
------------------ ------------------
858,206 953,942
Other liabilities
Retention money 16,449 14,455
Deposits from contractors 27,174 34,615
Advances from customers 172,231 184,904
Workers' Profits Participation Fund 21.1 9,891 8,165
Workers' Welfare Fund 44,183 22,377
Customs duty -- 21,890
Income tax deducted at source 5,356 5,403
Miscellaneous 2,348 27,459
------------------ ------------------
277,632 319,268
------------------ ------------------
11,321,842 11,011,125
========== ==========
21.1 Workers Profits Participation Fund
Balance at the beginning of the year 8,165 16,443
Allocation for the year 29 59,891 58,165
------------------ ------------------
68,056 74,608
Interest on funds utilised in the company's business 30 763 1,973
------------------ ------------------
68,819 76,581
Less: Amount paid to the Trustees of the Fund 58,928 68,416
------------------ ------------------
Balance at the end of the year 9,891 8,165
========== ==========
22. DIVIDENDS
Unclaimed 11,194 9,659
Proposed 266,555 233,236
------------------ ------------------
277,749 242,895
========== ==========
23. CONTINGENCIES AND COMMITMENTS
Contingencies
23.1 The ANZ Grindlays Bank has confirmed a loan given to the company amounting to U.S. Dollars
30.00 million, equivalent to approximately Rs.1,569 million, which has not been recorded by the
company in its books as the same was not received by the company and the proceeds thereof were
credited to the account of the Federal Government. The Federal Government vide their letter number
F-3(25) EF (B-III)/97-113, dated February 7, 2000 has acknowledged deposit of the above-referred
loan in the Federal Government Account and has assumed responsibility for the repayment of
principal and interest thereon through the State Bank of Pakistan. However, as per the instructions
of the Federal Government, contained in the abovementioned letter, the loan in question is shown
as a contingency in these accounts.
The aforementioned loan carries interest @ 5.68% (LIBOR + 1.50%) [2000: 8.19% (LIBOR +
1.25%)] per annum and is guaranteed by the State Bank of Pakistan through the Pakistan Trade
Maintenance Agreement. This was originally payable on September 30, 1998, however, the same
has been rescheduled and will be repaid in 3 years with 60% of principal amount to be paid in year
2 and 40% in year 3. Interest on the same is payable on a quarterly basis. The accumulated amount
of the principal and interest at the end of the current year is U.S. Dollars 32.370 (2000: U.S. Dollars
32.370) million, equivalent to approximately Rs. 2,084.628 (2000: Rs.1,692.937)'million.
23.2 During the current year, the Collectorate of Sales Tax and Excise (East) vide two separate notices
dated November 15, 2000 and June 9, 2001 demanded a sum of Rs.434.497 million and Rs.52.553
million on account of central excise duty and sales tax respectively, together with additional sales tax
and penalties thereon. These demands were made by the above-referred authority on account of
shortage of a product "Naphtha" during the year 1993-94 and 1995-96. The Collectorate maintained
that the company had cleared the short quantity without payment of excise duty and sales tax
thereon as against the submission of the company that the shortage in the quantity of "Naphtha" was
due to evaporation and manufacturing temperature. The company has, therefore, rejected the
above-referred view of the Collectorate and has filed appeals with the Customs, Excise and Sales
Tax Appellate Tribunal against the above-referred demands.
The company is confident that the demands raised by the Collectorate would be set aside and
decision will be rendered in its favour. Accordingly, pending a final decision in this regard, no
provision has been made for the above-referred demands, aggregating to Rs.487.050 million, in the
accounts of the current year.
23.3 A contractor has filed a claim of Rs.9.572 (2000: Rs.9.572) million against the company for (a)
alleged delay in the completion of certain storage tanks, causing the contractor a loss on that
account and (b) in respect of extra work performed by the contractor. Although the matter is currently
under arbitration, the company is, none-the-less, confident that the case will be decided against the
contractor and, hence, pending a final decision by the arbitrator, no provision has been made by the
company against the above referred claim.
23.4 A customer of the company invoked arbitration proceedings against the company on account of a
dispute resulting from the alleged contamination of certain cargo sold by the company. The customer
and the company have appointed their respective arbitrators with no statement of claim filed todate
by the customer. Accordingly, the amount of claim cannot be determined at present.
23.5 Outstanding counter guarantees at the end of the year amounted to Rs. 94.374 (2000: Rs. 51.821)
million.
23.6 Claims not acknowledged as debt amounted to Rs.89.749 (2000: Rs. 92.378) million at the end of
the year.
23.7 The company is confident that no liability will arise due to the above contingencies, hence, no
provision in respect thereof has been made.
Commitments
23.8 Contracts signed in respect of capital expenditure but not executed until the end of the year,
amounted to Rs.59.380 (2000: Rs.3.308) million.
23.9 Outstanding letters of credit at the end of the year amounted to Rs. 63.480 (2000: Rs. 76.223)
million.
Note 2001 2000
(Rupees in '000)
24. GROSS SALES
Local 32,887,097 27,530,316
Export 3,237,095 1,449,982
------------------ ------------------
36,124,192 28,980,298
========== ==========
25. DUTIES, TAXES AND LEVIES
Development surcharge 198,780 229,346
Sales tax 25.1 4,477,428 3,046,199
Custom duty, wharfage and other levies 29,555 21,708
------------------ ------------------
4,705,763 3,297,253
========== ==========
25.1 Included herein is a sum of Rs.549.409 million. out of the total amount of Rs.621.135 million.
demanded during the year by the Collectorate of Sales Tax and Excise (East) Karachi for sales tax,
additional sales tax and penalties (without breaking-down the same) in respect of the year 1995-96,
by serving a notice of recovery to the company under Section 48 of the Sales Tax Act, 1990 claiming
that the company had failed to pay output tax on the total cost of drums, including the cost of metal
sheets, supplied to a fabricator during the above-referred year. A sum of Rs.71.726 million was
charged in the past upon the receipt of a show cause notice. The company while rejecting the claim
of the sales tax authorities has obtained a stay order from the Honourable High Court of Sindh
against the above-referred amounts and is currently contesting the same before the above-referred
authority. As the charge relates to sales tax etc., the company considers it appropriate to include the
same under the above heading.
26. COST OF SALES
Opening stock of semi-finished and finished products 1,433,229 627,311
Crude oil and drums consumed 26.1 31,252,519 27,478,540
Stores, spares and chemicals consumed 195,199 214,483
Provision for slow moving stores, spares and chemicals 123,575 68,023
Salaries, wages and staff benefits 26.2 438,139 388,247
Fuel and power 613,269 577,987
Rent, rates and taxes 19,575 21,941
Insurance 31,996 33,056
Repairs and maintenance 164,942 222,559
Depreciation 3.3 147,161 112,929
Staff transport 30,094 28,762
Research and development outlay 12,000 11,000
Consultancy 360 636
Miscellaneous 23,425 23,079
------------------ ------------------
33,052,254 29,181,242
------------------ ------------------
34,485,483 29,808,553
Closing Stock of semi-finished and finished products (1,427,664) (1,433,229)
------------------ ------------------
33,057,819 28,375,324
========== ==========
26.1 Crude Oil and Drums Consumed
Crude oil
- Opening stock 846,720 875,964
- Purchases 31,408,161 27,282,024
- Closing Stock (1,130,653) (846,720)
------------------ ------------------
31,124,228 27,311,268
Drums consumed 128,291 167,272
------------------ ------------------
31,252,519 27,478,540
========== ==========
26.2 Included herein is a sum of Rs.38.416 (2000: Rs.32.049) million in respect of staff retirement benefits.
26.3 Segment information has been provided in note 38 to the accounts.
27. OTHER INCOME
Return / Interest on:
bank deposits 55,945 89,592
secured loans to employees 80 145
Liabilities written back 152,700 82,954
Development surcharge written back -- 78,328
Gain on sale of fixed assets 739 74
Proceed from sale of scrap and empties 15,692 --
Lube based oil pipeline charges 741 549
Ground rent 435 469
Tender fees 671 614
Store handling charges 10,179 40
Training and seminar 65 3,110
Miscellaneous 1,504 371
------------------ ------------------
238,751 256,246
========== ==========
28. ADMINISTRATIVE, SELLING AND GENERAL EXPENSES
Salaries and staff benefits 28.1 147,154 140,082
Rent, rates and taxes 1,228 1,764
Selling expenses 3,430 5,082
Depreciation 3.3 11,536 8,619
Legal and professional charges 3,818 4,118
Auditors' remuneration 28.2 683 652
Printing and stationery 4,728 4,674
Staff transport 19,653 16,427
Repairs and maintenance 19,149 16,568
Telephone 6,405 6,678
Electricity and water charges 6,072 5,086
Postage, telegrams and periodicals 1,684 1,182
Subscriptions 4,058 1,389
Sanitation and gardening 3,801 3,458
Donations. -- 25
Miscellaneous 12,701 16,688
------------------ ------------------
246,100 232,492
========== ==========
28.1 Included herein is a sum of Rs.16.054 (2000: Rs. 12.251) million in respect of staff retirement benefits.
28.2 Auditors remuneration
Audit fee 200 150
Special reports and certifications, audit of
Workers' Profit Participation Fund, sundry
accounting and advisory services 443 467
Out-of-pocket expenses 40 35
------------------ ------------------
683 652
========== ==========
29. OTHER CHARGES
Workers' Welfare Fund 21,806 12,071
Workers' Profit Participation Fund 21.1 59,891 58,165
------------------ ------------------
81,697 70,236
========== ==========
30. FINANCIAL CHARGES
Mark-up on:
secured long term loans -- 11,482
secured short term running finances 31,084 8,409
unsecured custom duty -- 63,142
------------------ ------------------
31,084 83,033
Interest on:
unsecured long term loans 31,588 23,382
secured short term loans -- 384
Workers' Profit Participation Fund 21.1 763 1,973
------------------ ------------------
32,351 25,739
Finance charges in respect of finance leases 941 1,081
Guarantee commission and service charges 1,737 2,912
Bank charges 1,821 779
------------------ ------------------
67,934 113,544
========== ==========
31. TAXATION
Current 369,847 376,552
Prior -- 24,526
Deferred (29,392) (14,726)
------------------ ------------------
340,455 386,352
========== ==========
The income tax assessments of the company have been finalized upto and including the assessment year
1999-2000, corresponding to the income year ended dune 30, 1999. However, as a result of various
appeals filed by the company against the assessment orders finalized by the department in respect of prior
years, the Income Tax Appellate Tribunal decided the same in favour of the company. The Income Tax
Department preferred to file appeals thereagainst in the High 0ourt of Sindh, which have been dismissed
except for appeals in respect of the assessment years 1996-97 and 1997-98 which are currently pending
for heading.
The assessment in respect of assessment year 1999-2000 has been revised by the 0ommissioner of
Income Tax (Appeals), (GIT 'A') allowing certain add backs made by the Deputy Commissioner of Income
Tax (DCIT) while finalizing the assessment of above year. As a result, a sum of Rs.143.145 million has
been determined as refundable to the company. However, the Income Tax department has filed an appeal
with the Income Tax Appellate Tribunal against the relief's allowed by the (GIT 'A') while revising the above-
referred assessment. Accordingly, pending a final decision in this regard, the above-referred refund of
Rs.143.145 million has not been accounted for by the company in the accounts of the current year.
32. BASIC EARNINGS PER SHARE
Basic earnings per share has been computed by dividing the net profit for the year after taxation with the
number of Ordinary shares issued by the company.
33. UNAVAILED CREDIT FACILITIES
Short term running finances 324,280 905,416
Letters of credit 1,576,520 1,570,566
Letters of guarantee 94,374 23,179
========== ==========
34. CASH GENERATED FROIV1 OPERATIONS
Profit before taxation 1,116,122 1,093,059
Adjustment for non cash charges and other items:
Depreciation 158,697 121,548
Financial charges 67,934 113,544
Gratuity 3,569 8,945
Compensated absences 1,365 3,910
Return / Interest on bank deposits and secured
loans to employees (56,025) (89,737)
Gain on sale of fixed assets (739) (74)
Liabilities written back (152,700) (82,954)
Provision for slow moving stores, spares
and chemicals 123,575 68,023
------------------ ------------------
Profit before working capital changes 1,261,798 1,236,264
Working capital changes
(Increase) / Decrease in current assets
Store, spares and chemicals (54,863) (16,455)
Stock-in-trade (365,964) (974,042)
Trade debts (491,373) 476,732
Loans and advances (5,847) (13,921)
Deposits and short term prepayments 15,328 (20,180)
Other receivables (73,858) (823,917)
Increase in current liabilities
Creditors, accrued and other liabilities 579,127 1,178,439
------------------ ------------------
Cash generated from operations 864,348 1,042,920
========== ==========
35. CASH AND CASH EQUIVALENTS
Cash and bank balances 88,291 142,580
Short term running finances (1,375,720) (630,584)
------------------ ------------------
(1,287,429) (488,004)
========== ==========
36. REMUNERATION OF THE OHIEF EXEOUTIVE AND EXECUTIVES
Chief  TOTAL 
Executive Executives 2001 2000
(Rupees in '000)
Managerial remuneration 1,736 218,943 220,679 226,793
0ompany's contribution to
provident and pension
funds -- 25,640 25,640 15,716
------------------ ------------------ ------------------ ------------------
1,736 244,583 246,319 242,509
Other perquisites & benefits
Rent and housing 501 50,064 50,565 53,206
0onveyance 124 49,237 49,361 43,262
Leave benefits 194 13,321 13,515 22,211
------------------ ------------------ ------------------ ------------------
819 112,622 113,441 118,679
------------------ ------------------ ------------------ ------------------
June 30, 2001 2,555 357,205 359,760 361,188
========== ========== ========== ==========
June 30, 2000 1,413 359,775 -- --
========== ========== ========== ==========
Number of persons
June 30, 2001 1 591 592 --
June 30, 2000 1 612 -- 613
36.1 The Chief Executive and some of the executives of the company are also provided with free use of
company's cars and residential equipment in accordance with their terms of service.
36.2 Fees paid to non-executive directors was Rs.0.023 (2000: Rs.0.028) million.
37. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
37.1 Financial assets and liabilities
Interest/Markup bearing Non/Interest/Markup bearing Total
Maturity upto Maturity after Maturity upto Maturity after
one year one year Sub-total one year one year Sub-total 2001 2000
FINANCIAL ASSETS
Long term investments -- -- -- -- 9 9 9 9
Long term loans &
advances -- 60,000 60,000 -- 50,000 50,000 110,000 110,000
Deposits -- -- -- 29,990 10,055 40,045 40,045 47,877
Trade debts    4,828,824 -- 4,828,824 566,240 -- 566,240 5,395,064 4,903,691
Other receivables -- -- -- 4,356,417 -- 4,356,417 4,356,417 4,066,615
Cash and bank
balances 40,963 -- 40,963 47,328 -- 47,328 88,291 142,580
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
June 30, 2001 4,869,787 60,000 4,929,787 4,999,975 60,064 5,060,039 9,989,826 9,270,772
========== ========== ========== ========== ========== ========== ========== ==========
June 30, 2000 4,500,602 60,000 4,560,602 4,654,503 55,667 4,710,170 9,270,772 --
========== ========== ========== ========== ========== ========== ========== ==========
FINANCIAL LIABILITIES
Long term loans 103,419 6,264 109,683 -- -- -- 109,683 188,377
Obligations under
finance leases 2,696 1,596 4,292 -- -- -- 4,292 6,635
Shod term running
finances 1,375,720 -- 1,375,720 -- -- -- 1,375,720 630,584
Creditors, accrued
and other
liabilities -- -- -- 10,779,917 -- 10,779,917 10,779,917 10,336,327
Dividends -- -- -- 277,749 -- 277,749 277,749 242,895
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
June 30, 2001 1,481,835 7,860 1,489,695 11,057,666 -- 11,057,666 12,547,361 11,404,818
========== ========== ========== ========== ========== ========== ========== ==========
June 30, 2000 724,327 101,269 825,596 10,579,222 -- 10,579,222 11,404,818 --
========== ========== ========== ========== ========== ========== ========== ==========
37.2 Credit risk exposure
Credit risk represents the accounting loss that would be recognised at the reporting date if counter
parties failed completely to perform as contracted. Out of the total financial assets of Rs. 9.989.826
(2000: Rs.9,270.772) million, the financial assets which are subject to credit risk amounted to
Rs.9,901.535 (2000: Rs.9,128.192) million. The company believes that it is not exposed to major
concentration of credit risk. Further, it manages credit risk in trade receivables by executing formal
agreements with the debtors.
37.3 Interest / markup rate risk exposure
The company is exposed to interest / markup rate risk on some of the financial obligations.
Significant financial assets / liabilities which are exposed to various rates of interest are mentioned
in the respective notes to the accounts.
37.4 Foreign exchange risk management
Foreign currency risk arises mainly where payables exist due to the transactions with foreign
undertakings. However, the company is not exposed to any significant foreign currency risk.
37.5 Fair values of financial assets and liabilities
The carrying values of all financial assets and liabilities reflected in the financial statements
approximate their fair values.
38. SEGMENT INFORMATION
The company's operating businesses are organized and managed separately according to the nature of
products and services provided, with each segment representing a strategic business unit that offers
different products and serves different markets. The fuel segment is a diverse supplier of fuel products and
offers gasoline, diesel oils, kerosene and furnace oil. The lube segment provides different types of lube
base oils, asphalt and wax free oil for different sectors of the economy. The company accounts for
intersegment sales and transfers on the basis of cost.
The following tables present revenue and profit information regarding business segments for the year
ended dune 30, 2001 and dune 30, 2000 and certain asset and liability information regarding business
segments at dune 30, 2001 and dune 30, 2000.
Fuel Lube Total
2001 2000 2001 2000 2001 2000
(Rupees in '000)
Segment Revenue
Sales to external customers 23,004,122 19,161,246 8,414,307 6,521,799 31,418,429 25,683,045
Inter segment safes 6,155,863 5,070,526 (6,155,863) (5,070,526) -- --
Refunds from Government 2,657,689 3,563,225 254,803 382,139 2,912,492 3,945,364
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Total Revenue 31,817,674 27,794,997 2,513,247 1,833,412 34,330,921 29,628,409
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Segment result after tax 22,917 22,917 677,957 519,511 700,874 542,428
Unallocated Revenue 74,793 164,279
------------------ ------------------
Net Profit 775,667 706,707
========== ==========
Segment Assets 11,612,464 11,419,164 3,196,767 1,974,277 14,809,231 13,393,441
Unallocated Assets 1,203,646 1,211,497
Investment in Subsidiary 1 1
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Total Assets 11,612,464 11,419,164 3,196,767 1,974,277 16,012,878 14,604,939
========== ========== ========== ========== ========== ==========
Segment Liabilities 11,738,442 10,808,004 1,409,975 1,330,845 13,148,417 12,138,849
Unallocated Liabilities 35,169 79,271
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Total Liabilities 11,738,442 10,808,004 1,409,975 1,330,845 13,183,586 12,218,120
========== ========== ========== ========== ========== ==========
Other Segment Information:
Capital expenditure 1,135 1,132 6,286 9,442 7,421 10,574
Unallocated Capital expenditure 505,027 165,493
------------------ ------------------
512,448 176,067
Depreciation 26,406 26,327 9,542 9,102 35,948 35,429
Unallocated depreciation 122,749 86,119
------------------ ------------------
158,697 121,548
Non-cash expenses
other than depreciation 76,510 41,440 50,634 35,528 127,144 76,968
39. STATEMENT PURSUANT TO SECTION 237 (1) (e) OF THE COMPANIES ORDINANCE, 1984
The audited accounts of the company's wholly owned subsidiary, National Oil Marketing (Private) Limited,
for the year ended June 30, 2001 are annexed to these accounts. The (accumulated loss) / unappropriated
profit which has been carried forward in the accounts of the subsidiary company has not been dealt with in
or for the purpose of the accounts of National Refinery Limited.
The other information required by Section 237 (1) (e) of the Companies Ordinance, 1984 is given hereunder:
2001 2000
(a) Extent of the interest of National Refinery Limited (the holding
company) in the equity of National Oil Marketing (Private) Limited 100% 100%
(the subsidiary company) at the end of the financial
year of the subsidiary;
(Rupees in '000)
(b) The net aggregate amount of the (losses) / profits of the subsidiary
company so far as these concern members of the holding company
and have not been dealt with in the accounts of the holding company
for the year ended June 30, 2001 are:
(i) for the financial year of the subsidiary; (81) (2,184)
(ii) for the previous years of the subsidiary since it became the
holding company's subsidiary; (1,667) 517
(c) The net aggregate amount of the (losses) / profits of the subsidiary company so far as these have been
dealt with or provision made for losses in the accounts of the holding company for the year ended June
30, 2001 are:
(i) for the financial year of the subsidiary; -- --
(ii) for the previous years of the subsidiary since it became the
holding company's subsidiary. -- --
40. CAPACITY AND ACTUAL PERFORMANCE
Annual designed Actual throughput for
throughput the year ended June 30,
capacity 2001 2000
(In Metric Tons)
Fuel section-throughput of crude oil 2,710,500 2,624,807 2,855,733
========== ========== ==========
Lube section-throughput of reduced crude oil 620,486 707,415 692,010
========== ========== ==========
Pursuant to the Government's decision communicated to the company by the Oil Companies Advisory
Committee (OCAC), the crude throughput of the company has been reduced with effect from
October 1, 2000.
41. NUMBER OF EMPLOYEES 1,032 1,042
========== ==========
42. GENERAL
42.1 Figures have been rounded-off to the nearest thousand of rupees.
42.2 Previous year's figures have been rearranged, wherever necessary, for the purpose of comparison.
ZAFAR IQBAL M.M. HUSAIN MUHAMMAD IQBAL AWAN
Chairman Chief Executive Director
REPORT AND ACCOUNTS
OF
NATIONAL OIL MARKETING
(A wholly owned subsidiary company of National Refinery Limited)
Directors' Report
The Directors have pleasure in presenting their Report and the Audited Financial Statements for the year ended
June 30, 2001.
Rupees
Loss for the year ended June 30, 2001 80,683
Add: Accumulated loss carried forward 2,166,799
------------------
2,247,482
==========
Commercial Activities
Government is in the process of deregularization of fuel products. In the changing scenario the Board is
studying the economies of reactivating the commercial activities of the company.
Board of Directors
Presently Mr. M.M. Husain is Chairman and Chief Executive and Messrs Shaikh Zahiruddin, Asad A. Siddiqui.
Khawaja Shahid Waheed and Mohammad Wasi Khan are Directors on the Board.
Pattern of Shareholdings
National Refinery Limited owns 100 shares of Rs. 10 each.
Auditors
The auditors Messrs Ford, Rhodes, Robson, Morrow, Chartered Accountants, retires and being eligible, offers
themselves for reappointment.
On behalf of the Board
M.M. Husain
Chairman and Chief Executive
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed balance sheet of NATIONAL OIL MARKETING (PRIVATE) LIMITED as at June 30,
2001 and the related profit and loss account 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.
It is the responsibility of the company's management to establish and maintain a system of Internal control, and
prepare & present the above said statements in conformity with the approved accounting standards and the
requirements of the Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements
based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards
require that we plan and perform the audit to obtain reasonable assurance about whether the above said
statements are free of any material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the above said statements. An audit also includes assessing the
accounting policies and significant estimates made by management, as well as, evaluating the overall
presentation of the above said statements. We believe that our audit provides a reasonable basis for our opinion
and, after due verification, we report that:
(a) in our opinion, proper books of accounts 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) 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 together with the notes forming part thereof conform with approved
accounting standards as applicable in Pakistan, and, give the information required by the Companies
Ordinance, 1984, in the manner so required and respectively give a true and fair view of the state of the
company's affairs as at June 30, 2001 and of the loss for the year then ended;
(d) in our opinion, no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of
1980); and
(e) without qualifying our opinion we draw attention to the contents of note 10 in the financial statements.
The company incurred a net loss of Rs. 0.081 million during the year ended June 30, 2001 and, as of that
date, the company's total liabilities exceeded its total assets by Rs. 1.746 million. Accordingly, the ability
of the company to continue as a going concern depends upon its success in improving liquidity and
achieving other plans as disclosed by the management of the company in the above referred note to
these accounts.
Karachi: FORD, RHODES, ROBSON, MORROW
October 05, 2001 Chartered Accountants
Balance Sheet as at June 30, 2001
Note 2001 2000
(Rupees)
ASSETS
CURRENT ASSETS
Advance income tax - net 32,265 9,807
Accrued interest -- 53,155
Cash and bank balances 3 36,074 84,660
------------------ ------------------
68,339 147,622
========== ==========
EQUITY AND LIABILITIES
Share Capital and Reserves
Share Capital
Authorised
10,000,000 (2000: 10,000,000) Ordinary
shares of Rs. 10 each 100,000,000 100,000,000
========== ==========
Issued, subscribed and paid-up 4 1,000 1,000
Deficit 5 (1,747,482) (1,666,799)
------------------ ------------------
(1,746,482) (1,665,799)
CURRENT LIABILITIES
Current account with National Refinery Limited
the Parent company 1,576,747 1,456,050
Accrued and other liabilities 6 238,074 357,371
------------------ ------------------
1,814,821 1,813,421
------------------ ------------------
68,339 147,622
========== ==========
The annexed notes form an integral part of these accounts.
M.M. HUSAIN ASAD A. SIDDIQUI
Chief Executive Director
Profit and Loss Account
for the year ended June 30, 2001
Note 2001 2000
(Rupees)
OTHER INCOME 7 113 151,228
Administrative expenses 8 21,384 171,586
------------------ ------------------
LOSS BEFORE TAXATION (21,271) (20,358)
TAXATION
Current 9 -- --
Prior (59,412) (2,163,629)
------------------ ------------------
(59,412) (2,163,629)
------------------ ------------------
NET LOSS FOR THE YEAR (80,683) (2,183,987)
(Accumulated losses) / unappropriated profit brought forward (2,166,799) 17,188
------------------ ------------------
ACCUMULATED LOSSES CARRIED FORWARD (2,247,482) (2,166,799)
========== ==========
The annexed notes form an integral part of these accounts.
M.M. HUSAIN ASAD A. SIDDIQUI
Chief Executive Director
Notes to the Accounts
for the year ended June 30, 2001
1. THE COMPANY AND ITS OPERATIONS
National Oil Marketing (Private) Limited was incorporated in Pakistan on April 18, 1998 as a private limited
company to market the products of National Refinery Limited, the Parent company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Accounting convention
These accounts have been prepared under the historical cost convention.
2.2 Taxation
The Company accounts for current taxation on the basis of taxable income at the current rates of
taxation after taking into account tax credits and rebates available, if any.
2.3 Revenue recognition
Commission on sale of products is recognised on despatch of goods to customers.
Return on bank deposits is recognised on an accrual basis.
2001 2000
(Rupees)
3. CASH AND BANK BALANCES
In hand 203 203
At banks in
current account 3,598 4,582 !
deposit account 32,273 79,875 :
------------------ ------------------ i
36,074 84,660
========== ==========
4. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
100 (2000: 100) Ordinary shares of Rs. 10 each issued
as fully paid for consideration other than cash 1,000 1,000
========== ==========
National Refinery Limited, the Parent company, held 100 Ordinary shares of Rs. 10 each of the company at
the end of the year
5. RESERVE
Revenue reserve
General reserve 500,000 500,000
Accumulated losses (2,247,482) (2,166,799)
------------------ ------------------
(1,747,482) (1,666,799)
========== ==========
6. ACCRUED AND OTHER LIABILITY
Accrued liabilities
Accrued expenses 15,000 134,297
Other liability
Advances from customers 223,074 223,074
------------------ ------------------
238,074 357,371
========== ==========
7, OTHER INCOME
Return on bank deposits 113 151,228
========== ==========
8. ADMINISTRATIVE EXPENSES
Salaries -- 14,547
Legal and professional fees 6,384 125,938
Travelling expense -- 16,101
Audit Fee 15,000 15,000
------------------ ------------------
21,384 171,586
========== ==========
9. TAXATION
The income tax assessments of the company have been finalized upto and including the assessment year
2000-2001, corresponding to the year ended June 30, 2000. However, as a result of an appeal filed by the
company against the assessment order finalized by the department in the past, the Commissioner of
Income Tax (Appeals) (CIT'A') has decided the same in favour of the company. The income tax department
has preferred to file appeal thereagainst in the Income-Tax Appellate Tribunal (ITAT) which is currently
pending for hearing.
10. Although the commercial activities of the company were discontinued in December 1998, the Parent
company, National Refinery Limited, is currently contemplating necessary plans to restructure the
operations of the subsidiary in view of the deregularization of fuel products. Accordingly, the Board of
Directors of the company is presently studying the economies of reactivating the commercial activities of
the subsidiary with a view to (a) enable the subsidiary to undertake necessary marketing efforts to promote
products of the Parent company and (b) assist the subsidiary to generate income from its own resources
to meet expenditure in order to make the same into a profitable and viable entity.
11. GENERAL
11.1 Figures have been rounded-off to the nearest rupee.
11.2 Previous year's figures have been rearranged, wherever necessary, for the purpose of comparison.
M.M. HUSAIN ASAD A. SIDDIQUI
Chief Executive Director
Google
 
Web Paksearch.com




Home | About Us | Contact | Information Resources