Atrl 2009

Attock Refinery Limited
Auditors' Report to the Members

A.F. FERGUSON & CO.
CHARTERED ACCOUNTANTS
KARACHI-LAHORE-ISLAMABAD
We have audited the annexed balance sheet of Attock Refinery Limited as at June 30, 2009 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 account have been kept by the Company as required by the Companies Ordinance,
1984;
(b) in our opinion
(i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in conformity
with the Companies Ordinance, 1984, and are in agreement with the books of account and are further in
accordance with accounting policies consistently applied;
(ii) the expenditure incurred during the year was for the purpose of the Company's business; and
(iii) the business conducted, investments made and the expenditure incurred during the year were in accordance
with the objects of the Company;
(c) 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 and respectively give a true and fair view of the state of the
Company's affairs as at June 30, 2009 and of the profit, its cash flows and changes in equity for the year then ended;
and
(d) in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by
the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.
Chartered Accountants
Islamabad: October 01, 2009
Name of the audit engagement partner: Sohail M. Khan
Annual Report 2009 49

Balance Sheet
as at June 30, 2009
2009 2008
Note Rs ‘000 Rs ‘000
SHARE CAPITAL AND RESERVES
Share capital
Authorised 6 1,000,000 1,000,000
Issued, subscribed and paid-up 6 852,930 710,775

Reserves and surplus 7 9,294,199 8,988,216
10,147,129 9,698,991
SURPLUS ON REVALUATION OF FREEHOLD LAND 8 1,923,339 1,923,339
12,070,468 11,622,330
DEFERRED LIABILITIES
Provision for staff gratuity 29 120,130 96,889
CURRENT LIABILITIES AND PROVISIONS
Short term finance 9 – –

Trade and other payables 10 30,311,409 36,688,922
Provision for taxation 1,985,536 1,673,042
32,296,945 38,361,964
CONTINGENCIES AND COMMITMENTS 11
44,487,543 50,081,183
50 Annual Report 2009

Balance Sheet
as at June 30, 2009
2009 2008
PROPERTY, PLANT AND EQUIPMENT
Operating assets 12 2,521,903 2,459,520

Capital work-in-progress 13 336,072 442,431
Stores and spares held for capital expenditure 58,239 27,701
2,916,214 2,929,652
LONG TERM INVESTMENTS 14 13,244,120 13,135,579
LONG TERM LOANS AND DEPOSITS 15 12,437 12,732
DEFERRED TAXATION 16 184,389 219,302
CURRENT ASSETS
Stores, spares and loose tools 17 573,204 542,500

Stock-in-trade 18 4,868,976 4,844,853
Trade debts 19 15,508,763 9,207,238
Loans, advances, deposits, prepayments
and other receivables 20 377,134 244,695
Cash and bank balances 21 6,802,306 18,944,632
28,130,383 33,783,918
44,487,543 50,081,183
The annexed notes 1 to 38 are an integral part of these financial statements.
Chief Executive Director

Profit and Loss Account

for the year ended June 30, 2009
2009 2008
Sales 22 76,546,448 91,910,703

Reimbursement due from the Government
under import parity pricing formula 23 714,052 1,743,602
77,260,500 93,654,305
Less: Cost of sales 24 75,342,096 89,646,373
GROSS PROFIT 1,918,404 4,007,932
Less: Administration expenses 25 222,822 199,336

Distribution cost 26 20,809 19,140
Finance cost 27 1,471,525 1,244,373
Other charges 28 124,319 235,711
1,839,475 1,698,560
78,929 2,309,372
Other income 30 993,700 577,851
PROFIT BEFORE TAXATION FROM REFINERY OPERATIONS 1,072,629 2,887,223

Provision for taxation 31 666,613 879,653
PROFIT AFTER TAXATION FROM REFINERY OPERATIONS 406,016 2,007,570
PROFIT AFTER TAXATION FROM NON-REFINERY OPERATIONS
Gain on sale of shares of an associated company 32 – 3,762,775

Dividend income 33 610,742 377,429
610,742 4,140,204
PROFIT FOR THE YEAR 1,016,758 6,147,774
Earnings per share - Basic (Rs)

Refinery operations 4.76 23.54
Non-refinery operations 7.16 48.54
37 11.92 72.08

Cash Flow Statement

2009 2008
Rs ‘000 Rs ‘000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from - customers 95,624,042 102,962,499

- others 137,970 109,183
95,762,012 103,071,682
Cash paid for operating costs (82,024,072) (80,364,440)

Cash paid to Government for duties, taxes and other levies (24,888,914) (11,312,753)
Income tax paid (392,790) (320,261)
Net cash flows from operating activities (11,543,764) 11,074,228
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (188,975) (361,046)

Sale of property, plant and equipment 76,571 2,743
Proceeds from sale of shares of an associated company – 4,438,944
Purchase of shares of associated companies (108,541) (4,542,444)
Long term loans and deposits 295 (1,778)
Income on bank deposits received 919,439 453,471
Dividends received 735,835 454,734
Net cash flows from investing activities 1,434,624 444,624
CASH FLOWS FROM FINANCING ACTIVITIES
Finance cost (1,471,525) (1,244,374)

Dividends paid (566,422) (226,812)
Net cash flows from financing activities (2,037,947) (1,471,186)
EFFECT OF EXCHANGE RATE CHANGES 4,761 16,852
INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (12,142,326) 10,064,518
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 18,944,632 8,880,114
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 6,802,306 18,944,632

Statement of Changes in Equity

Special reserve Surplus on
Share Capital for expansion / Investment General Un-appropriated revaluation of
capital reserve modernisation reserve reserve Profit freehold land Total
Rs ‘000
Balance at June 30, 2007 568,620 5,948 2,546,162 – 55 657,880 1,923,339 5,702,004
Bonus shares @ 25% related to the year

ended June 30, 2007 142,155 – – – – (142,155) – –
Final cash dividend @ 40% related to the

year ended June 30, 2007 – – – – – (227,448) – (227,448)
Profit for the year – – – – – 6,147,774 – 6,147,774
Transfer to special reserve for expansion/

modernisation - note 7.1 – – 1,861,770 – – (1,861,770) – –
Balance at June 30, 2008 710,775 5,948 4,407,932 – 55 4,574,281 1,923,339 11,622,330
Transfer to investment reserve – – – 3,762,775 – (3,762,775) – –
Bonus shares @ 20 % related to the year

ended June 30, 2008 142,155 – – – – (142,155) – –
Final cash dividend @ 80 % related

to the year ended June 30, 2008 – – – – – (568,620) – (568,620)
Profit for the year – – – – – 1,016,758 – 1,016,758

modernisation - note 7.1 – – 260,216 – – (260,216) – –
Balance at June 30, 2009 852,930 5,948 4,668,148 3,762,775 55 857,273 1,923,339 12,070,468

Notes to and Forming Part of the Financial Statements

1. LEGAL STATUS AND OPERATIONS
Attock Refinery Limited (the Company) was incorporated in Pakistan on November 8, 1978 as a private limited company
and was converted into a public company on June 26, 1979. The registered office of the company is situated at Morgah,
Rawalpindi. Its shares are quoted on the Karachi, Lahore and Islamabad Stock Exchanges in Pakistan. It is principally
engaged in the refining of crude oil.
The company is subsidiary of the Attock Oil Company Limited, UK and its ultimate parent is Bay View International
Group S.A.
2. STATEMENT OF COMPLIANCE
These are separate financial statements of the Company. These financial statements have been prepared in
accordance with approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of
such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are
notified under the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance,
1984. In case requirements differ, the provisions or directives of the Companies Ordinance, 1984 shall prevail.
3. ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS
Standards, amendments and interpretations effective during the year and adopted by the Company
In the current year, the Company has adopted IFRS 7 - Financial Instruments: Disclosure. Adoption of this standard only
impacts the format and extent of disclosures as presented in note 36 to the financial statements.
Standards, amendments and interpretations effective during the year but not relevant
IAS 29 Financial Reporting in Hyperinflationary Economies

IFRIC 7 Applying the Restatement Approach under IAS 29
IFRIC 11 Group and Treasury Share Transactions
IFRIC 13 Customer Loyalty Programmes
IFRIC 14 IAS 19 - The Limit on a defined benefit asset, minimum funding requirements and their interaction
Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted
early by the Company
Effective for periods

beginning on or after
IFRS 1 First time adoption of IFRS (Revised) July 1, 2009

IFRS 2 Share-based payment (Amendments) January 1, 2009
IFRS 3 Business combinations (Revised) July 1, 2009
IFRS 4 Insurance contracts (Amendments) January 1, 2009
IFRS 5 Non-current assets held-for-sale and discontinued operations
(Amendments) January 1, 2009
IFRS 7 Financial instruments: Disclosure (Amendments) January 1, 2009
IFRS 8 Operating segments January 1, 2009
IAS 1 Presentation of financial statements (Revised) January 1, 2009
IAS 7 Statement of cash flows (Amendments) January 1, 2009
IAS12 Income taxes (Amendments) January 1, 2009
IAS 16 Property, plant and equipment (Amendments) January 1, 2009
IAS 18 Revenue (Amendments) January 1, 2009
IAS 19 Employee benefits (Amendments) January 1, 2009
IAS 20 Government grants and disclosure of government assistance (Amendments) January 1, 2009
IAS 21 The effects of changes in foreign exchange rates (Amendments) January 1, 2009
IAS 23 Borrowing costs (Revised) January 1, 2009


IAS 27 Consolidated and separate financial statements (Amendments) July 1, 2009

IAS 28 Investment in associates (Amendments) January 1, 2009
IAS 31 Interests in joint ventures (Amendments) January 1, 2009
IAS 32 Financial Instruments: Presentation (Amendments) January 1, 2009
IAS 33 Earnings per share (Amendments) January 1, 2009
IAS 34 Interim financial reporting (Amendments) January 1, 2009
IAS 36 Impairment of assets (Amendments) January 1, 2009
IAS 38 Intangible assets (Amendments) January 1, 2009
IAS 39 Financial instruments: Recognition and measurement
IAS 40 Investment property (Amendments) January 1, 2009
IAS 41 Agriculture (Amendments) January 1, 2009
IFRIC 1 Changes in existing decommissioning, restoration and similar
liabilities (Amendments) January 1, 2009
IFRIC 2 Member's share in corporate entities and similar liabilities
IFRIC 4 Determining whether an Arrangement contains a Lease July 1, 2010
IFRIC 12 Service Concession Arrangements July 1, 2010
IFRIC 14 The limit on a defined benefit asset, minimum funding
requirements and their interaction (Amendments) January 1, 2009
IFRIC 15 Agreements for the construction of real estate January 1, 2009
IFRIC 16 Hedges of a net investment in a foreign operation October 1, 2008
IFRIC 17 Distributions of non-cash assets to owners July 1, 2009
The management anticipates that adoption of above standards, amendments and interpretations in future periods will
have no material impact on the Company's financial statements except for additional disclosures.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4.1 Basis of measurement
These financial statements have been prepared under the historical cost convention modified by revaluation of freehold
land referred to in note 4.7 and certain other modifications as required by approved accounting standards referred to in
the accounting policies given below.
4.2 Dividend appropriation
Dividend is recognised as a liability in the financial statements in the period in which it is declared.
4.3 Employee retirement benefits
The main features of the retirement benefit schemes operated by the Company for its employees are as follows:
(i) Defined benefits plans
The Company operates a pension plan for its management staff and a gratuity plan for its non-management staff.
Pension plan is invested through an approved trust fund while the gratuity plan is book reserve plan.
Contributions are made in accordance with actuarial recommendations. Actuarial valuations are conducted
through an independent actuary, annually using projected unit credit method. The obligation at the balance sheet
date is measured at the present value of the estimated future cash outflows.
Unrealised net gains and losses are amortised over the expected remaining service of current members.
(ii) Defined contribution plans
The company operates an approved contributory provident fund for all employees. Equal monthly contribution is
made both by the Company and the employee to the fund at the rate of 10% of basic salary.


4.4 Employee compensated absences
The company also provides for compensated absences for all employees in accordance with the rules of the Company.
4.5 Taxation
Provision for current taxation is based on taxable income at the current rates of tax.
Deferred income tax is accounted for using the balance sheet liability method in respect of all temporary differences
arising between the carrying amount of assets and liabilities in the financial statements and the corresponding tax
bases used in the computation of taxable profit. Deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is probable that future taxable profits will be
available against which the deductible temporary differences can be utilized.
Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse based on the
tax rates that have been enacted. Deferred tax is charged or credited to income except in the case of items credited or
charged to equity in which case it is included in equity.
4.6 Provisions
Provisions are recognised when the Company has a legal or constructive obligation as a result of past events, when it is
probable that an outflow of resources embodying economic benefit will be required to settle the obligation and a reliable
estimate of the amount can be made.
4.7 Property, plant and equipment
a) Cost
Operating fixed assets except freehold land are stated at cost less accumulated depreciation. Freehold land is
stated at revalued amount. Capital work-in-progress and stores held for capital expenditure are stated at cost.
Cost in relation to certain plant and machinery items include borrowing cost related to the financing of major
projects during construction phase.
b) Depreciation
Operating assets depreciation is calculated using the straight-line method to allocate their cost over their
estimated useful lives at the rates specified in note 12.
c) Repairs and maintenance
Maintenance and normal repairs, including minor alterations, are charged to income as and when incurred.
Renewals and improvements are capitalised and the assets so replaced, if any, are retired.
d) Gains and losses on deletion
Gains and losses on deletions of assets are included in income currently
4.8 Investments in associated and subsidiary companies
These investments are initially valued at cost. At subsequent reporting dates, the Company reviews the carrying amount
of the investment to assess whether there is any indication that such investments have suffered an impairment loss. If
any such indication exists, the recoverable amount is estimated in order to determine the extent of the impairment loss,
if any. Such impairment losses or reversal of impairment losses are recognised in the profit and loss account. The profits
and losses of subsidiary and associated companies are carried in the financial statements of the subsidiary and
associated company and are not dealt with for the purpose of the financial statements of the Company except to the
extent of dividend declared by the subsidiary and associated companies.


4.9 Impairment of non-financial assets
Assets that have an indefinite useful life, for example land, are not subject to amortisation or depreciation and are tested
annually for impairment. Assets that are subject to depreciation/amortisation are reviewed for impairment at each
balance sheet date or whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount. Reversals of the impairment losses are restricted to the original cost of the asset. An impairment
loss or reversal of impairment loss is recognised in the profit and loss account.
4.10 Stores, spares and loose tools
These are valued at moving average cost less allowance for obsolete and slow moving items. Items in transit are stated
at invoice value plus other charges paid thereon.
4.11 Stock - in - trade
Stock-in-trade is valued at the lower of cost and net realisable value. Crude oil in transit is valued at cost comprising
invoice value. Cost in relation to crude oil is determined on the basis of annual average cost of purchases during the year
on the principles of import parity and in relation to semi-finished and finished products it represents the cost of crude oil
and refining charges consisting of direct expenses and appropriate production overheads. Direct expenses are arrived
at on the basis of average cost for the year per barrel of throughput. Production overheads, including depreciation, are
allocated to throughput proportionately on the basis of nameplate capacity.
Net realisable value in relation to finished product represents selling prices in the ordinary course of business less costs
necessarily to be incurred for its sale, as applicable, and in relation to crude oil represents replacement cost at the
balance sheet date.
4.12 Revenue recognition
Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and the revenue
can be reliably measured. Revenue is recognised as follows:
i) Revenue from sales is recognised on delivery of products ex-refinery to the customers with the exception that
Naphtha export sales are recognised on the basis of products shipped to customers.
ii) The Company is operating under the import parity pricing formula, as modified from time to time, whereby it is
charged the cost of crude on 'import parity' basis and is allowed product prices equivalent to the 'import parity'
price, calculated under prescribed parameters.
Effective July 1, 2007, the Government made certain modifications in the prescribed parameters effectively
reducing the price of Kerosene oil, Light Diesel Oil (LDO) and JP-8 in 2007 and 2008. The Government has further
modified the refineries pricing formula in August, 2008 whereby the 10% duty included in pricing of HSD has
been cut to 7.5% and the motor gasoline pricing has been unilaterally revised by linking its price to Arab Gulf 95
RON prices and calculating the price of 87 RON motor gasoline on a unitary method basis. This revision adversely
affect the pricing of HSD and motor gasoline which are Company's two major products.
Earlier in July, 2002, the Government had modified the pricing formula that was applicable to the Company
restricting the distribution of net profits after tax (if any) from refinery operations to 50% of paid-up capital as at
July 1, 2002 and diverting the surplus profits, if any, to a special reserve to offset any future loss or make
investment for expansion or upgradation of Refinery. Further the Government had abolished the minimum rate of
return of 10% which continues to be contested by the Company as it represented to the Government that the
already existing agreement for guaranteed return could be modified only with the mutual consent of both the
parties.


iii) Dividend income is recognised when the right to receive dividend is established.
iv) Income on bank deposits is recognised using the effective yield method.
4.13 Borrowing cost
Borrowing cost related to the financing of major projects during the construction phase is capitalised. All other borrowing
costs are expensed as incurred.
4.14 Foreign currency transactions and balances
Transactions in foreign currencies are converted into rupees at the rates of exchange ruling on the date of the
transaction. All monetary assets and liabilities denominated in foreign currencies at the year end are translated at
exchange rates prevailing at the balance sheet date. Exchange differences are dealt with through the profit and loss
account.
4.15 Financial instruments
Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the
instrument and de-recognised when the Company loses control of the contractual rights that comprise the financial
assets and when the obligation specified in the contract is discharged, cancelled or expired. All financial assets and
liabilities are initially measured at cost, which is the fair value of the consideration given and received respectively.
These are subsequently measured at fair value, amortised cost or cost, as the case may be.
4.16 Financial Assets
The Company classifies its financial assets in the following categories: held-to-maturity investments, loans and
receivables, available for sale investments and investments at fair value through profit or loss. The classification
depends on the purpose for which the financial assets were acquired. Management determines the classification of its
financial assets at initial recognition. Regular purchases and sales of financial assets are recognized on the trade-date -
the date on which the company commits to purchase or sell the asset.
4.16.1 Held-to-maturity investments
Investments with fixed payments and maturity that the Company has the intent and ability to hold to maturity are
classified as held-to-maturity investments and are carried at amortised cost less impairment losses.
4.16.2 Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet
date. These are classified as non-current assets. The Company's loans and receivables comprise "Trade debts",
"Advances, deposits and other receivables" and "Cash and bank balances" in the balance sheet. Loans and receivables
are carried at amortized cost using the effective interest method.
4.16.3 Available-for-sale investments
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any
of the other categories. They are included in non-current assets unless management intends to dispose of the
investment within 12 months of the balance sheet date.
Available-for-sale investments are initially recognised at cost and carried at fair value at the balance sheet date. Fair
value of a quoted investment is determined in relation to its market value (current bid prices) at the balance sheet date.
If the market for a financial asset is not active (and for unlisted securities), the Company establishes fair value by using
valuation techniques. Adjustment arising from remeasurement of investment to fair value is recorded in equity and
taken to income on disposal of investment or when the investment is determined to be impaired.


4.16.4 Investment at fair value through profit or loss
Investments classified as investments at fair value through profit or loss are initially measured at cost being fair value of
consideration given. At subsequent dates these investments are measured at fair value with any resulting gains or
losses recognised directly in the profit and loss account. The fair value of such investments is determined on the basis of
prevailing market prices.
4.17 Trade and other payables
Liabilities for trade and other amounts payable including amounts payable to related parties are carried at cost which is
the fair value of the consideration to be paid in the future for goods and services received.
4.18 Offsetting
Financial assets and liabilities are offset and the net amount is reported in the balance sheet if the Company has a
legally enforceable right to set off the recognised amounts and the Company intends to settle on a net basis or realise
the asset and settle the liability simultaneously.
4.19 Cash and cash equivalents
For the purpose of cash flow statement, cash and cash equivalents comprise cash in hand, bank balances and highly
liquid short term investments.
4.20 Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in
which the Company operates. The financial statements are presented in Pakistani Rupees, which is the Company's
functional currency.
5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of financial statements in conformity with the approved accounting standards requires the use of
certain accounting estimates. It also requires management to exercise its judgment in the process of applying the
Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where
assumptions and estimates are significant to the financial statements, are as follows:
i) Estimate of recoverable amount of investments in associated companies - note 14
ii) Revaluation surplus on freehold land - note 12.2
iii) Estimated useful life of property, plant and equipment - note 12
iv) Provision for taxation - note 31
v) Provision for employee retirement benefits - note 29


2009 2008
Rs ‘000 Rs ‘000
6. SHARE CAPITAL
Authorised
100,000,000 (2008: 100,000,000) ordinary shares of Rs 10 each 1,000,000 1,000,000
Issued, subscribed and paid up
Shares issued for cash

8,000,000 ordinary shares of Rs 10 each 80,000 80,000
Shares issued as fully paid bonus shares

77,293,000 (2008 : 63,077,500) ordinary shares of Rs 10 each 772,930 630,775
The Attock Oil Company Limited held 48,039,224 (2008 : 40,032,687) ordinary shares and Attock Petroleum Limited
held 1,332,000 respectively (2008 : 1,000,000 ) ordinary shares at the year end.
2009 2008
Rs ‘000 Rs ‘000
7. RESERVES AND SURPLUS
Capital reserve
Liabilities taken over from The Attock Oil Company Limited

no longer required 4,800 4,800
Capital gain on sale of building 654 654
Insurance and other claims realised relating to

pre-incorporation period 494 494
5,948 5,948
Special reserve for expansion /modernisation - note 7.1
Additional revenue under processing fee formula related

to 1990-91 and 1991-92 32,929 32,929
Surplus profits under the import parity pricing formula 4,635,219 4,375,003
4,668,148 4,407,932
Revenue reserve
Investment reserve 3,762,775 –
General reserve 55 55
Surplus - unappropriated profit 857,273 4,574,281
4,620,103 4,574,336
9,294,199 8,988,216
7.1 Represents amounts retained as per stipulations of the Government under the pricing formula and is available only
for offsetting any future loss or making investment in expansion or upgradation of the refinery. Transfer to / from
special reserve is recognised at each quarter end and is reviewed for adjustment based on profit / loss on an annual
basis. The company has incurred capital expenditure of Rs 3,855 million on upgradation and expansion projects from
July 1, 1997 to June 30, 2009 (July 1, 1997 to June 30, 2008: Rs 3,770 million).


8. SURPLUS ON REVALUATION OF FREEHOLD LAND
This represents surplus over book value resulting from revaluation of freehold land as referred to in note 12.2 and is
not available for distribution to shareholders.
9. SHORT TERM FINANCE
The Company has negotiated running finance facilities with various banks and accepted facility offer letters to the extent
of Rs 3 billion, which were unutilised at the year end. As and when required, these facilities shall be secured by joint
hypothecation by way of 1st registered charges over the Company's current assets.
2009 2008
Rs ‘000 Rs ‘000
10. TRADE AND OTHER PAYABLES
Creditors - note 10.1 22,995,072 24,371,362

Due to The Attock Oil Company Limited - Holding Company 84,985 256,739
Due to associated companies
Pakistan Oilfields Limited 837,348 1,685,628
Attock Information Technology Services (Private) Limited 3,044 17,429
Accrued liabilities and provisions - note 10.1 2,830,079 1,714,975
Due to the Government under pricing formula 2,527,290 7,138,356
Advance payments from customers 30,298 2,677
Sales tax payable 441,691 1,037,929
Workers' Welfare Fund 234,750 196,966
Workers' Profit Participation Fund - note 10.2 94,754 181,441
General staff provident fund 1,357 –
Staff provident fund 1,912 –
Deposits from customers adjustable against freight
and Government levies payable on their behalf 376 376
Payable to statutory authorities in respect of petroleum
development levy and excise duty 175,813 13,099
Crude oil freight adjustable through inland freight
equalisation margin – 21,479
Security deposits 48,866 48,890
Unclaimed dividends 3,774 1,576
30,311,409 36,688,922
10.1 These balances include amounts retained from payments to crude suppliers for purchase of local crude as per the
directives of the Ministry of Petroleum and Natural Resources (the Ministry). Further, as per directive of the Ministry such
withheld amounts are to be retained in designated 90 days interest bearing accounts. The amounts withheld alongwith
accumulated profits amounted to Rs 4,368.984 million (2008: Rs 6,630.371 million).
2009 2008
Rs ‘000 Rs ‘000
10.2 Workers' Profit Participation Fund

Balance at the beginning of the year 181,441 65,840
Add: Interest on funds utilised in the Company's business 7,009 3,889
188,450 69,729
Less: Amount paid to the Fund 188,156 65,959
294 3,770
Add: Amount allocated for the year - notes 28 and 33 94,460 177,671
94,754 181,441


2009 2008
Rs ‘000 Rs ‘000
11. CONTINGENCIES AND COMMITMENTS

Contingencies:
i) Due to huge circular debt in the oil industry, certain payments due from /
to the oil marketing companies (OMCs) and crude oil suppliers
respectively have not been made on their due dates of payment. As a
result the Company has raised claims on OMCs in respect of mark-up on
delayed payments as well as received counter claims from some crude oil
suppliers which have not been recognized in the financial statements as
these have not been acknowledged as debt by either parties.
ii) Guarantees issued by banks on behalf of the Company 350 300
iii) Claims for land compensation contested by the Company 1,300 1,300
iv) Price adjustment related to crude oil purchases as referred to in
note 24.1, the amount of which can not be presently quantified
Commitments outstanding:
i) Capital expenditure 37,876 43,959
ii) Letters of credit other than for capital expenditure 243,043 172,722
12. OPERATING ASSETS

Freehold Buildings Furniture,
land on freehold Plant and Computer fixtures and
(note 12.2) land machinery equipment equipment Vehicles Total
Rs ‘000
As at July 1, 2007
Cost 1,927,250 84,731 3,909,848 55,564 61,965 70,320 6,109,678
Accumulated depreciation – (32,547) (3,209,096) (48,805) (37,821) (51,147) (3,379,416)
Net book value 1,927,250 52,184 700,752 6,759 24,144 19,173 2,730,262
Year ended June 30, 2008
Opening net book value 1,927,250 52,184 700,752 6,759 24,144 19,173 2,730,262
Additions – 16,918 98,971 2,356 6,056 4,486 128,787
Disposals
Cost – – (23,722) (10,244) (10,075) (852) (44,893)
Depreciation – – 17,578 10,215 8,225 852 36,870
– – (6,144) (29) (1,850) – (8,023)
Depreciation charge – (5,573) (368,114) (2,983) (5,789) (9,047) (391,506)
Closing net book value 1,927,250 63,529 425,465 6,103 22,561 14,612 2,459,520
As at July 1, 2008
Cost 1,927,250 101,649 3,985,097 47,676 57,946 73,954 6,193,572
Net book value 1,927,250 63,529 425,465 6,103 22,561 14,612 2,459,520

Additions 50,310 9,618 192,754 4,253 2,986 4,875 264,796
Disposals
Cost – – (75,000) (6,250) (389) (4,528) (86,167)
Depreciation – – – 6,247 243 4,107 10,597
– – (75,000) (3) (146) (421) (75,570)
As at June 30, 2009
Cost 1,977,560 111,267 4,102,851 45,679 60,543 74,301 6,372,201
Net book value 1,977,560 67,403 438,423 6,879 20,238 11,400 2,521,903
Annual rate of
Depreciation (%) – 5 10 20 10 20


12.1 Fixed assets disposed off during the year are as follows:
Original Book Sale Mode of Particulars of

cost value proceeds disposal purchaser
Rs ‘000
Assets with individual book value exceeding Rs 50,000
Plant and machinery 75,000 75,000* – Insurance claim EFU General Insurance
Company Limited (EFU)
Vehicles 1,001 350 350 Company policy Dr. Ilyas Fazil, ex-employee
Assets disposed off to executives:
Vehicles 941 – 94 Company policy Mr. S. Ahmed Abid

857 – 85 Company policy Mr. Malik Masood Sadiq
504 – 50 Company policy Mr. Zia ul Haq Mirza
561 – 56 Company policy Mr. Salman Tariq
532 – 53 Company policy Mr. Raja Nadeem Khalid
* This amount is adjustable against insurance claim lodged based on replacement cost of the asset.
12.2 Value of freehold land includes revaluation surplus of Rs 1,923.339 million arising from revaluation of freehold land in
January 2001 carried out by an independent valuer. Valuation was made on the basis of market value. The original cost
of the land as at June 30, 2009 is Rs 54.221 million.
2009 2008
Rs ‘000 Rs ‘000
12.3 The depreciation charge for the year has

been allocated as follows:
Cost of sales 114,446 378,170

Administration expenses 11,417 12,405
Distribution cost 347 298
Desalter operating cost 633 633
126,843 391,506
13. CAPITAL WORK-IN-PROGRESS

Civil works 242 2,191
Plant and machinery 307,410 411,820
Pipeline project 28,420 28,420
336,072 442,431


2009 2008
% age % age
holding Rs ‘000 holding Rs ‘000
14. LONG TERM INVESTMENTS - AT COST

Associated companies
Quoted
National Refinery Limited (NRL) - note 14.1 25 8,046,635 25 8,046,635
19,991,640 (2008: 19,991,640) fully paid ordinary
shares including 3,331,940 (2008: 3,331,940)
bonus shares of Rs 10 each
Market value as at June 30, 2009: Rs 4,399 million
(June 30, 2008: Rs 5,947 million)
Attock Petroleum Limited (APL) - note 14.2 and 14.3 21.88 4,463,485 21.70 4,438,944
shares including 2,100,016 (2008: nil) bonus
shares of Rs 10 each
(June 30, 2008: Rs 4,503 million)
Unquoted
Attock Gen Limited (AGL) - note 14.4 30 727,500 30 643,500
Attock Information Technology Services (Private) Limited 10 4,500 10 4,500
450,000 (2008: 450,000) fully paid ordinary
13,242,120 13,133,579
Subsidiary company
Unquoted
Attock Hospital (Private) Limited 100 2,000 100 2,000
13,244,120 13,135,579
All associated and subsidiary companies are incorporated in Pakistan.
14.1 Based on a valuation analysis carried out by an external investment advisor engaged by the Company, the recoverable
amount of investment in NRL exceeds its carrying amount. The recoverable amount has been estimated based on a
value in use calculation. These calculations have been made on discounted cash flow based valuation methodology
which assumes gross profit margin of 5.38% (2008: 5.34%), terminal growth rate of 3% (2008: 4%) and capital asset
pricing model based discount rate of 18.05% (2008: 18.64%).
14.2 Based on a valuation analysis carried out by the Company, the recoverable amount of investment in Attock Petroleum
Limited exceeds its carrying amount. The recoverable amount has been estimated based on a value in use calculation.
These calculations have been made on discounted cash flow based valuation methodology which assumes gross profit
margin of 5.16%, terminal growth rate of 4.5% and capital asset pricing model based discount rate of 18.05%.


Number of shares Cost
Rs ‘000
14.3 Investment in APL

As at July 1, 2008 10,417,680 4,438,944
Bonus shares received during the year 2,100,016 –
Purchase of shares during the year 82,400 24,541
As at June 30, 2009 12,600,096 4,463,485
14.4 Investment in AGL

As at July 1, 2008 6,435,000 643,500
Right shares acquired during the year 840,000 84,000
As at June 30, 2009 7,275,000 727,500
2009 2008
Rs ‘000 Rs ‘000
15. LONG TERM LOANS AND DEPOSITS

Loans to employees - considered good - note 15.1 28,546 25,879
Less: Amounts due within next twelve months shown
under current assets - note 20 (17,057) (14,095)
11,489 11,784
Security deposits 948 948
12,437 12,732
15.1 Loans to employees are for miscellaneous purposes which are recoverable in 24, 36 and 60 equal monthly installments
depending on case to case basis and are secured by a charge on the asset purchased and /or amount due to the
employee against provident fund or a third party guarantee. These are interest free loans. These include an amount of
Rs 5.218 million (2008: Rs 4.366 million) receivable from Executives of the Company and does not include any amount
receivable from Directors or Chief Executive. The maximum amount due from executives of the Company at the end of
any month during the year was Rs 6.913 million (2008: Rs 4.720 million).
2009 2008
Rs ‘000 Rs ‘000
15.2 Reconciliation of carrying amount of loans to executives:

Opening balance as at July 1 4,366 3,552
Add: Disbursements during the year 5,753 7,164
10,119 10,716
Less: Repayments during the year 4,901 6,350
Closing balance as at June 30 5,218 4,366


2009 2008
Rs ‘000 Rs ‘000
16. DEFERRED TAXATION

Debit balances arising on
Provisions for obsolete stores, doubtful debts and gratuity 66,036 54,737
Difference between accounting and tax depreciation 118,353 164,565
184,389 219,302
17. STORES, SPARES AND LOOSE TOOLS
Stores (including items in transit
Rs 57.27 million; 2008: Rs 99.03 million) 336,212 351,123
Spares 279,955 228,053
Loose tools 509 624
616,676 579,800
Less: Provision for slow moving items - note 17.1 43,472 37,300
573,204 542,500
17.1. Provision for slow moving items

Opening balance 37,300 36,000
Add: Provision for the year 10,600 1,300
47,900 37,300
Less: stores and spares written off 4,428 –
43,472 37,300
18. STOCK-IN-TRADE
Crude oil - in stock 1,222,628 902,525
- in transit 219,165 375,967
1,441,793 1,278,492
Semi-finished products 377,749 436,792
Finished products - note 18.1 3,049,434 3,129,569
4,868,976 4,844,853
18.1 Finished products include stocks carried at net realisable value of Rs 910 million (2008: Rs 2 million). Adjustments
amounting to Rs 88 million (2008: Rs 1 million) have been made to closing inventory to write down stocks of finished
products to their net realizable value.
19. TRADE DEBTS

All debtors are unsecured and considered good. These include amount receivable from associated companies
Attock Petroleum Limited Rs 3,902 million (2008: Rs 2,327 million) and Pakistan Oilfields Limited Rs 8 million
(2008: Rs 11 million).


2009 2008
Rs ‘000 Rs ‘000
20. LOANS, ADVANCES, DEPOSITS, PREPAYMENTS

AND OTHER RECEIVABLES
LOANS AND ADVANCES - CONSIDERED GOOD
Current portion of long-term loans to employees - note 15 17,057 14,095
Advances to suppliers 35,681 61,874
Advances to employees 2,619 2,236
55,357 78,205
DEPOSITS AND PREPAYMENTS
Trade deposits 286 286
Short term prepayments 33,923 14,680
34,209 14,966
OTHER RECEIVABLES
Due from subsidiary company
Attock Hospital (Private) Limited 682 1,279
Due from associated companies
National Refinery Limited 2,478 2,610
Attock Petroleum Limited 4,913 9,308
Attock Leisure and Management Associates (Pvt) Limited 594 115
Attock Gen Limited 22,304 5,394
National Cleaner Production Centre Foundation 2,053 2,992
Attock Cement Pakistan Limited 46 –
Due from Staff Pension Fund 28,820 15,404
Income accrued on bank deposits 80,494 108,888
Crude oil freight adjustable through inland freight equalisation margin 67,276 –
Amount adjustable against insurance claim - note 12.1 75,000 –

Other receivables 2,908 5,534
287,568 151,524
377,134 244,695
2009 2008
Rs ‘000 Rs ‘000
21. CASH AND BANK BALANCES

Cash in hand 412 910
With banks:
Current accounts 28,560 2,703
Deposit accounts 2,000,000 6,317,269
Savings accounts (including US $ 363,249; 2008: US $ 366,766) 4,773,334 12,623,750
6,802,306 18,944,632


21.1 Balances with banks include Rs 2,000.000 million (2008: 4,817.269 million) in respect of deposits placed in a 90-day
interest-bearing account consequent to directives of the Ministry of Petroleum & Natural Resources on account of
amounts withheld alongwith related interest earned thereon, as referred to in note 10.1.
21.2 Bank deposits of Rs. 0.350 million (2008: 0.300 million) were under lien with bank against a bank guarantee issued on
behalf of the Company.
21.3 Balances with banks include Rs 48.866 million (2008: Rs 48.890 million) in respect of security deposits received.
21.4 Balances with banks earned weighted average interest / mark-up @ 14.04% (2008: @ 9.61%) per annum.
2009 2008
Rs ‘000 Rs ‘000
22. SALES
Gross sales (excluding Naphtha export sales) 92,766,859 93,428,851
Naphtha export sales 9,131,088 12,509,719
Less: Cost of Naphtha purchased from third parties and
related handling charges recovered 1,058,823 1,684,095
8,072,265 10,825,624
Less: Duties, taxes and levies - note 22.1 24,292,676 12,343,772
76,546,448 91,910,703
22.1 Duties, taxes and levies
Sales tax 11,675,167 10,418,456
Petroleum development levy 12,600,264 1,903,321
Custom duties and other levies 17,245 21,995
24,292,676 12,343,772
23. REIMBURSEMENT DUE FROM THE GOVERNMENT
UNDER IMPORT PARITY PRICING FORMULA
This represents amount due from the Government of Pakistan on account of shortfall in ex-refinery prices of certain
petroleum products under the import parity pricing formula.


2009 2008
Rs ‘000 Rs ‘000
24. COST OF SALES

Opening stock of semi-finished products 436,792 311,633
Crude oil consumed - note 24.1 72,606,265 88,115,513
Transportation and handling charges 1,076,227 1,174,592
Salaries, wages and other benefits - note 24.2 342,936 296,102
Printing and stationery 1,965 1,922
Chemicals consumed 322,132 354,582
Fuel and power 458,308 449,483
Rent, rates and taxes 6,934 6,047
Telephone and telex charges 1,316 2,283
Professional charges for technical services 4,350 3,506
Insurance 81,463 52,935
Repairs and maintenance (including stores and spares
consumed Rs 75.980 million; 2008: Rs 64.345 million) 163,067 162,555
Staff transport and traveling 7,679 10,449
Cost of receptacles 15,665 15,912
Research and development 165 749
Depreciation 114,446 378,170
75,639,710 91,336,433
Closing stock of semi-finished products (377,749) (436,792)
75,261,961 90,899,641
Opening stock of finished products 3,129,569 1,876,301
Closing stock of finished products (3,049,434) (3,129,569)
80,135 (1,253,268)
75,342,096 89,646,373
24.1 Crude oil consumed
Stock at the beginning of the year 1,278,493 1,664,712

Purchases 72,769,565 87,729,294
74,048,058 89,394,006
Stock at the end of the year (1,441,793) (1,278,493)

72,606,265 88,115,513
Certain crude purchases have been recorded based on provisional prices notified by the Government and may require
adjustment in subsequent periods. Cost of purchases include Rs Nil (2008: 706.120 million) related to purchases in
prior years.
24.2 Salaries, wages and other benefits under cost of sales, administration expenses, distribution cost and income from
crude desalter operations include the Company's contribution to the Provident Fund amounting to Rs 14.708 million
(2008: Rs 13.245 million).


2009 2008
Rs ‘000 Rs ‘000
25. ADMINISTRATION EXPENSES

Staff transport, traveling and entertainment 9,956 12,768
Electricity, gas and water 6,060 5,570
Auditor's remuneration - note 25.1 1,639 1,074
Legal and professional charges 7,319 4,145
Repairs and maintenance 31,697 33,605
Subscription 5,218 5,214
Publicity 3,473 3,061
Scholarship scheme 1,748 1,909
Insurance 1,289 790
Donations* 2,742 324
Training expenses 501 2,582
Other expenses 99 240
222,822 199,336
* No director or his spouse had any interest in the donee institutions.
25.1 Auditor's remuneration
Annual audit 750 440
Review of half yearly accounts, audit of consolidated
accounts, staff funds and special certifications 454 520
Tax services 300 –
Out of pocket expenses 135 114
1,639 1,074
26. DISTRIBUTION COST
Staff transport, traveling and entertainment 576 652
Telephone and telex charges 161 221
Electricity, gas, fuel and water 2,020 1,857
Printing and stationery 101 137
Repairs and maintenance including packing and
other stores consumed 1,932 2,066
Rent, rates and taxes 464 339
Legal and professional charges 347 144
Depreciation 347 298
20,809 19,140


2009 2008
Rs ‘000 Rs ‘000
27. FINANCE COST

Exchange loss 1,464,423 1,240,244
Interest on Workers' Profit Participation Fund - note 10.2 7,009 3,889
Bank and other charges 93 240
1,471,525 1,244,373
28. OTHER CHARGES

Employees' retirement benefits
Staff gratuity benefits 31,120 20,764
Staff pension benefits 1,278 597
Less: Contribution to subsidiary and associated companies (2,137) (995)
(859) (398)
Contribution to employees old age benefits scheme 2,723 2,580
32,984 22,946
Fixed assets shortages /damages written off – 648

Provision for slow moving stores 10,600 1,300
Workers' Profit Participation Fund 57,668 154,934
124,319 235,711


29. EMPLOYEES' DEFINED BENEFIT PLANS
The latest actuarial valuation of the employees' defined benefit plans was conducted at June 30, 2009 using the
projected unit credit method. Details of the defined benefit plans are:
Funded defined Unfunded defined

benefit benefit
pension plan gratuity plan
2009 2008 2009 2008
Rs ‘000 Rs ‘000
a) The amounts recognised in the profit and loss account:

Current service cost 14,462 13,773 4,680 3,818
Interest on obligation 41,710 31,449 19,721 12,890
Expected return on plan assets (51,074) (39,591) – –
Contribution from an associated company – (144) – –

Net actuarial losses / (gains) recognised
during the year (3,820) (4,890) 6,719 4,056
1,278 597 31,120 20,764
b) The amounts recognised in the balance sheet:
Fair value of plan assets 340,186 385,053 – –
Present value of defined benefit obligations (387,196) (321,136) (163,030) (152,656)
(47,010) 63,917 (163,030) (152,656)
Unrecognised actuarial (gains) / losses 75,830 (48,513) 42,900 55,767
Net asset / (liability) 28,820 15,404 (120,130) (96,889)
c) Movement in the present value of defined benefit obligation:

Present value of defined benefit obligation
as at July 1 321,136 291,335 152,656 121,894
Interest cost 41,710 31,449 19,721 12,890
Benefits paid (13,105) (11,158) (7,880) (9,675)
Actuarial (gains) / losses 22,993 (4,263) (6,147) 23,729
Present value of defined benefit obligation as at June 30 387,196 321,136 163,030 152,656
d) Changes in the fair value of plan assets:

Fair value of plan assets as at July 1 385,053 359,485 – –
Expected return 51,074 39,591 – –
Benefits paid (13,105) (11,158) – –
Contributions by employer 14,693 11,904 – –
Contributions by associated company (358) 144 – –
Actuarial gains / (losses) (97,171) (14,913) – –
Fair value of plan assets as at June 30 340,186 385,053 – –
Actual return on plan assets (46,577) 24,677 – –

The Company expects to contribute Rs 17.3 million to its defined benefit pension plans during 2009 - 2010.


benefit benefit
2009 2008 2009 2008
Rs ‘000 Rs ‘000
e) The major categories of plan assets:

Investment in equities 88,231 119,841 – –
Investment in mixed funds 60,845 103,448 – –
Cash 191,110 161,764 – –
340,186 385,053 – –
f) Significant actuarial assumptions at the balance sheet date:

Discount rate 12.50% 13.25% – –
Expected return on plan assets 12.50% 13.25% – –
Future salary increases 10.36% 11.09% – –
Future pension increases 7.14% 7.86% – –
2009 2008 2007 2006 2005
Rs ‘000
g) Comparison for five years:

Defined Benefit Pension Plan
Present value of defined benefit obligation (387,196) (321,136) (291,335) (263,054) (215,382)
Fair value of plan assets 340,186 385,053 359,485 280,495 225,121
Surplus / (deficit) (47,010) 63,917 68,150 17,441 9,739
Experience adjustments on plan liabilities 22,993 (4,263) (609) 23,265 9,382

Experience adjustments on plan assets 97,171 14,913 (48,803) 29,017 13,388
Defined Benefit Gratuity Plan
Fair value of plan assets – – – – –
Deficit (163,030) (152,656) (121,894) (96,058) (88,578)
Experience adjustments on plan liabilities (6,147) 23,729 17,982 (1,087) 3,611

Experience adjustments on plan assets – – – – –


2009 2008
Rs ‘000 Rs ‘000
30. OTHER INCOME

Income from financial assets
Income on bank deposits 891,045 483,492
Exchange gain 4,761 16,852
895,806 500,344
Income from non - financial assets
Income from crude decanting 14,458 15,262
Income from crude desalter operations - note 30.1 13,168 9,715
Insurance agency commission 7,624 4,140
Rental income 19,375 6,983
Sale of scrap 15,658 12,930
Profit on disposal of fixed assets 1,001 2,637
Calibration charges 3,431 2,892
Handling and service charges 14,882 16,586
Registration charges from carriage contractors – 200
Penalties from carriage contractors 1,694 4,816
Miscellaneous 6,603 1,346
97,894 77,507
993,700 577,851
30.1 Income from crude desalter operations

Income 54,245 51,997
Less: Operating costs
Chemical consumed 8,380 8,098
41,077 42,282
13,168 9,715
31. PROVISION FOR TAXATION
Current - for the year 631,700 1,054,100
- for prior years – (112,900)
631,700 941,200
Deferred - for the year 34,913 (61,547)
666,613 879,653


2009 2008
Rs ‘000 Rs ‘000
31.1 Relationship between tax expense and accounting profit

Accounting profit 1,072,629 2,887,223
Tax @ 35% 375,420 1,010,528

Income chargeable to tax at special rate 291,193 (17,975)
Prior years – (112,900)
666,613 879,653
32. GAIN ON SALE OF SHARES OF AN ASSOCIATED COMPANY

Proceeds from sale of shares of Attock Petroleum Limited
(net of expenses incurred on disposal) – 4,430,979
Cost of investment disposed off – (668,204)
– 3,762,775
33. DIVIDEND INCOME
Dividend income from associated companies
735,835 454,734
Less: Related charges
Taxation @ 10% ( 2008: 10%) 73,584 45,473
125,093 77,305
610,742 377,429
34. RELATED PARTY TRANSACTIONS

Attock Oil Company Limited holds 56.32% (2008: 56.32%) shares of the Company at the year end. Therefore, all
subsidiaries and associated undertakings of Attock Oil Company Limited are related parties of the Company. The related
parties also comprise of directors, major shareholders, key management personnel, entities over which the directors
are able to exercise significant influence on financial and operating policy decisions and employees' funds. Amount due
from and due to these undertakings are shown under receivables and payables. The remuneration of Chief Executive,
directors and executives is disclosed in note 35 to the financial statements.


2009 2008
Rs ‘000 Rs ‘000
Sale of goods 25,803,489 24,713,370
Sale of services 74,159 92,585
25,877,648 24,805,955
Purchase of goods 6,689,896 10,154,897

Purchase of services 363,476 409,827
7,053,372 10,564,724
Holding company
Sale of services – 424
Purchase of goods 428,679 1,106,675
433,336 1,110,508
Subsidiary company
Sale of goods 217 441
26,645 22,960
Contribution to employees' pension and provident funds 29,401 25,149
35. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES

The aggregate amounts charged in the accounts for remuneration, including benefits and perquisites, were as follows:
Chief Executive Directors Executives

2009 2008 2009 2008 2009 2008
Rs ‘000
Managerial remuneration / honorarium 4,567 3,525 1,219 1,219 34,941 24,555

Company's contribution to provident
and pension funds 942 731 – – 7,396 5,503
Housing and utilities 2,696 2,208 – – 26,772 17,585
Leave passage 420 420 – – 3,155 2,963
8,625 6,884 1,219 1,219 72,264 50,606

No of person(s) 1 1 3 3 29 22
35.1 In addition, the Chief Executive and 21 (2008: 22) executives were provided with limited use of the Company's cars. The
Chief Executive and all executives were provided with medical facilities and 4 (2008: 5) executives were provided with
unfurnished accommodation in Company owned bungalows. Limited residential telephone facility was also provided to
the Chief Executive and 11 (2008: 12) executives.


36. FINANCIAL INSTRUMENTS
36.1 Financial assets and liabilities
Loans and receivables

2009 2008
Rs ‘000 Rs ‘000
Financial assets :
Maturity upto one year
Trade debts 15,508,763 9,207,238
Loans, advances, deposits and other receivables 307,530 168,141
Cash and bank balances
Foreign currency - US $ 29,684 25,642
Local currency 6,772,622 18,918,990
Maturity after one year
Long term Loans and deposits 12,437 12,732
22,631,036 28,332,743
Other financial liabilities

2009 2008
Rs ‘000 Rs ‘000
Financial liabilities :
Trade and other payables 30,281,111 36,686,245
Staff gratuity 120,130 96,889
30,401,241 36,783,134
36.2 Credit quality of financial assets
The credit quality of Company's financial assets have been assessed below by reference to external credit ratings of
counterparties determined by The Pakistan Credit Rating Agency Limited (PACRA) and JCR - VIS Credit Rating Company
Limited (JCR-VIS). The counterparties for which external credit ratings were not available have been assessed by
reference to internal credit ratings determined based on their historical information for any defaults in meeting
obligations.
2009 2008
Rating Balance Rating Balance
Rs ‘000 Rs ‘000
Trade debts
Counterparties with external credit rating A 1+ 10,153,763 A 1+ 2,605,852
Counterparties without external credit rating
Due from associated companies 3,910,073 2,337,902
Others * 1,444,927 4,263,484
15,508,763 9,207,238
Bank Balances
A1 344,855 A1 736,219
A2 44 A2 50,759
A3 11,056 A3 10,164
6,801,894 18,943,722
* These balances represent receivable from oil marketing companies and defence agencies.


36.3 Financial risk management
36.3.1 Financial risk factors
The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including
currency risk, interest rate risk and price risk). The Company's overall risk management policy focuses on the
unpredictability of financial markets and seeks to minimize potential adverse effects on the Company's financial
performance.
a) Credit risk
Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the other party by
failing to discharge an obligation.
The Company's credit risk is primarily attributable to its trade debts and placements with banks. The sales are
essentially to oil marketing companies and reputable foreign customers. The Company's placements are with banks
having satisfactory credit rating. Due to the high credit worthiness of counter parties the credit risk is considered
minimal.
At June 30, 2009, trade debts of Rs 12,163,373 thousand (2008 : Rs 2,691,404 thousand) were past due but not
imparied. The ageing analysis of these trade receivables is as follows:
2009 2008
Rs ‘000 Rs ‘000
0 to 6 months 12,074,031 2,625,671

6 to 12 months 14,481 8,796
Above 12 months 74,861 56,937
12,163,373 2,691,404
b) Liquidity risk
Liquidity risk reflects an enterprise's inability in raising funds to meet commitments. The Company follows an effective
cash management and planning policy to ensure availability of funds and to take appropriate measures for new
requirements.
c) Market risk
i) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates. Currency risk arises mainly from future commercial transactions or
receivables and payables that exist due to transactions in foreign currencies. Financial assets include Rs 36
million (2008: Rs 840 million) and financial liabilities include Rs 6,390 million (2008: Rs 18,470 million) which
were subject to currency risk.
At June 30, 2009, if the currency had weakened /strengthened by 10% against US dollar with all other variables
held constant, profit after tax for the year would have been Rs 413 million (2008: Rs 1,146 million) lower/higher.
ii) Interest rate risk
Interest rate risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates.
Financial assets and liabilities include balances of Rs 6,773 million (2008: Rs 18,941 million) and Rs 4,489
million (2008: Rs 6,727 million) respectively, which are subject to interest rate risk.
At June 30, 2009, if interest rates had been 1% higher/lower with all other variables held constant, profit after tax
for the year would have been Rs 15 million (2008: Rs 79 million) higher/lower.
iii) Price risk
Price risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices (other than those arising from interest rate risk or currency risk), whether
those changes are caused by factors specific to the individual financial instrument or its issuer, or factors
affecting all similar financial instruments traded in the market.
At the year end the Company is not exposed to price risk since there are no financial instruments, whose fair value
or future cash flows will fluctuate because of changes in market prices.


36.3.2 Capital risk management
The Company is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to
sustain future development of the business. The Board of Directors monitors the return on capital and the level of
dividend to ordinary shareholders. There was no change to the Company's approach to the capital management during
the year and the company is not subject to externally imposed capital requirement.
2009 2008
Rs ‘000 Rs ‘000
37. EARNINGS PER SHARE

Profit after taxation from refinery operations 406,016 2,007,570
Profit after taxation from non-refinery operations 610,742 4,140,204
1,016,758 6,147,774
Number of fully paid weighted average ordinary shares ('000) 85,293 85,293
11.92 72.08
Basic earnings per share for the year 2008 reported in the previous year was Rs 28.24 from refinery operations and
Rs 58.25 from non-refinery operations. This has been restated on account of 14,215,500 bonus shares issued without
consideration during the year ended June 30, 2009.
There is no dilutive effect on the basic earnings per share of the Company.
38. GENERAL
38.1 Capacity and production

Against the designed annual refining capacity of 14.784 million (2008: 14.320 million) US barrels the actual
throughput during the year was 13.126 million (2008: 14.901 million) US barrels.
38.2 Number of employees

Total number of employees at the end of the year were 699 (2008: 720).
38.3 Date of authorisation

These financial statements have been authorised for issue by the Board of Directors of the Company on
October 01, 2009.

Auditors' Report to the Members

A.F. FERGUSON & CO.
CHARTERED ACCOUNTANTS
KARACHI-LAHORE-ISLAMABAD
We have audited the annexed consolidated financial statements comprising consolidated balance sheet of Attock Refinery
Limited (ARL) and its subsidiary company, Attock Hospital (Private) Limited as at June 30, 2009 and the related consolidated
profit and loss account, consolidated cash flow statement and consolidated statement of changes in equity together with the
notes forming part thereof, for the year then ended. We have also expressed separate opinions on the financial statements of
ARL and its subsidiary company. These financial statements are the responsibility of ARL's management. Our responsibility is
to express an opinion on these financial statements based on our audit.
Our audit was conducted in accordance with the International Standards on Auditing and accordingly included such tests of
accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the consolidated financial statements present fairly the financial position of ARL and its subsidiary company as
at June 30, 2009 and the results of their operations for the year then ended.
Chartered Accountants
Islamabad: October 01, 2009
Name of the audit engagement partner: Sohail M. Khan

Consolidated Balance Sheet

as at June 30, 2009
2009 2008
SHARE CAPITAL AND RESERVES
Share capital
Authorised 6 1,000,000 1,000,000
Issued, subscribed and paid-up 6 852,930 710,775

Reserves and surplus 7 11,356,577 10,702,108
12,209,507 11,412,883
SURPLUS ON REVALUATION OF FREEHOLD LAND 8 1,923,339 1,923,339
14,132,846 13,336,222
DEFERRED LIABILITIES
Provision for staff gratuity 29 120,130 96,889
CURRENT LIABILITIES AND PROVISIONS
Short term finance 9 – –

Trade and other payables 10 30,317,091 36,691,014
Provision for taxation 1,985,536 1,673,042
32,302,627 38,364,056
CONTINGENCIES AND COMMITMENTS 11
46,555,603 51,797,167

Consolidated Balance Sheet

as at June 30, 2009
2009 2008
PROPERTY, PLANT AND EQUIPMENT
Operating assets 12 2,524,816 2,462,965

Capital work-in-progress 13 336,072 442,431
Stores and spares held for capital expenditure 58,239 27,701
2,919,127 2,933,097
LONG TERM INVESTMENTS 14 15,299,218 14,842,438
LONG TERM LOANS AND DEPOSITS 15 12,437 12,732
DEFERRED TAXATION 16 184,542 219,588
CURRENT ASSETS
Stores, spares and loose tools 17 573,204 542,500

Stock-in-trade 18 4,869,728 4,845,427
Trade debts 19 15,510,180 9,207,878
Loans, advances, deposits, prepayments
and other receivables 20 383,172 248,307
Cash and bank balances 21 6,803,995 18,945,200
28,140,279 33,789,312
46,555,603 51,797,167

Consolidated Profit and Loss Account

2009 2008
Sales 22 76,546,448 91,910,703

Reimbursement due from the Government
under import parity pricing formula 23 714,052 1,743,602
77,260,500 93,654,305
Less: Cost of sales 24 75,342,096 89,646,373
GROSS PROFIT 1,918,404 4,007,932
Less: Administration expenses 25 222,822 199,336

Distribution cost 26 20,809 19,140
Finance cost 27 1,471,525 1,244,373
Other charges 28 124,319 235,711
1,839,475 1,698,560
78,929 2,309,372
Other income 30 993,700 577,851
PROFIT BEFORE TAXATION FROM REFINERY OPERATIONS 1,072,629 2,887,223

Provision for taxation 31 666,613 879,653
PROFIT AFTER TAXATION FROM REFINERY OPERATIONS 406,016 2,007,570
PROFIT AFTER TAXATION FROM NON-REFINERY OPERATIONS
Share in profit of associated companies 32 1,102,585 1,982,679

Profit / (Loss) on investment in associated companies 33 (143,357) 1,709,687
959,228 3,692,366
PROFIT FOR THE YEAR 1,365,244 5,699,936

37 16.01 66.83

Consolidated Cash Flow Statement

2009 2008
Rs ‘000 Rs ‘000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from - customers 95,667,593 102,999,100

- others 137,970 109,183
95,805,563 103,108,283
Cash paid for operating costs (82,064,169) (80,399,323)

Cash paid to Government for duties, taxes and other levies (24,888,914) (11,312,753)
Income tax paid (394,673) (321,821)
Net cash flows from operating activities (11,542,193) 11,074,386
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (189,542) (361,997)

Sale of property, plant and equipment 76,614 3,149
Proceeds from sale of shares of an associated company – 4,438,944
Purchase of shares of associated companies (108,541) (4,542,444)
Long term loans and deposits 295 (1,778)
Income on bank deposits received 919,513 453,487
Dividends received 735,835 454,734
Net cash flows from investing activities 1,434,174 444,095
CASH FLOWS FROM FINANCING ACTIVITIES
Finance cost (1,471,525) (1,244,374)

Dividends paid (566,422) (226,812)
Net cash flows from financing activities (2,037,947) (1,471,186)
EFFECT OF EXCHANGE RATE CHANGES 4,761 16,852
INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (12,141,205) 10,064,147
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 18,945,200 8,881,053
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 6,803,995 18,945,200

Consolidated Statement of Changes in Equity

Special reserve Surplus on
Share Capital for expansion / Maintenance Investment General Un-appropriated revaluation of
capital reserve modernisation reserve reserve reserve Profit freehold land Total
Rs ‘000
Balance at June 30, 2007 568,620 44,948 3,000,073 – – 258,880 2,067,874 1,923,339 7,863,734
Bonus shares @ 25% related to the year

ended June 30, 2007 142,155 – – – – – (142,155) – –
Final cash dividend @ 40% related to the

year ended June 30, 2007 – – – – – – (227,448) – (227,448)
Profit for the year – – – – – – 5,699,936 – 5,699,936

modernisation - note 7.1 – – 1,861,770 – – – (1,861,770) – –
Transfer to special reserve by an associated

company – – 743,781 – – – (743,781) – –
Transfer to general reserve by an associated

company – – – – – 561,100 (561,100) – –
Sale of bonus shares of an associated

company – (35,000) – – – – 35,000 – –
Bonus shares issued by an associated

company – 33,320 – – – – (33,320) – –
Balance at June 30, 2008 710,775 43,268 5,605,624 – – 819,980 4,233,236 1,923,339 13,336,222
Transfer to investment reserve – – – – 1,709,687 – (1,709,687) – –
Impairment loss on investment in

associated company transferred from
unappropriated profit to investment
reserve – – – – (143,357) – 143,357 – –
Bonus shares @ 20 % related to the year

ended June 30, 2008 142,155 – – – – – (142,155) – –
Final cash dividend @ 80 % related to

the year ended June 30, 2008 – – – – – – (568,620) – (568,620)
Profit for the year – – – – – – 1,365,244 – 1,365,244

modernisation - note 7.1 – – 260,216 – – – (260,216) – –
Loss from fuel refinery operations

transferred from un-appropriated profit
to special reserve by associated
companies - note 7.1 – – (680,195) – – – 680,195 – –
Transfer to maintenance reserve by an

associated company – – – 46,680 – – (46,680) – –
Transfer to general reserve by an associated

company – – – – – 364,150 (364,150) – –
Bonus shares issued by an associated

company – 21,000 – – – – (21,000) – –
Balance at June 30, 2009 852,930 64,268 5,185,645 46,680 1,566,330 1,184,130 3,309,524 1,923,339 14,132,846

Notes to and Forming Part of the Consolidated Financial Statements

1. LEGAL STATUS AND OPERATIONS
Attock Refinery Limited (the Company) was incorporated in Pakistan on November 8, 1978 as a private limited company
and was converted into a public company on June 26, 1979. The registered office of the company is situated at Morgah,
Rawalpindi. Its shares are quoted on the Karachi, Lahore and Islamabad Stock Exchanges in Pakistan. It is principally
engaged in the refining of crude oil.
The company is subsidiary of the Attock Oil Company Limited, UK and its ultimate parent is Bay View International
Group S.A.
Attock Hospital (Private) Limited (AHL) was incorporated in Pakistan on August 24, 1998 as a private limited company
and commenced its operations from September 1, 1998. AHL is engaged in providing medical services. AHL is a wholly
owned subsidiary of Attock Refinery Limited. For the purpose of these financial statements, ARL and its above referred
wholly owned subsidiary AHL is referred to as the Company.
2. STATEMENT OF COMPLIANCE
These financial statements have been prepared in accordance with approved accounting standards as applicable in
Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued
by the International Accounting Standards Board as are notified under the Companies Ordinance, 1984, provisions of
and directives issued under the Companies Ordinance, 1984. In case requirements differ, the provisions or directives of
the Companies Ordinance, 1984 shall prevail.
3. ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS
Standards, amendments and interpretations effective during the year and adopted by the Company
In the current year, the Company has adopted IFRS 7 - Financial Instruments: Disclosure. Adoption of this standard only
impacts the format and extent of disclosures as presented in note 36 to the financial statements.
Standards, amendments and interpretations effective during the year but not relevant
IAS 29 Financial Reporting in Hyperinflationary Economies

IFRIC 7 Applying the Restatement Approach under IAS 29
IFRIC 11 Group and Treasury Share Transactions
IFRIC 13 Customer Loyalty Programmes
IFRIC 14 IAS 19 - The Limit on a defined benefit asset, minimum funding requirements and their interaction
Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted
early by the Company

IFRS 1 First time adoption of IFRS (Revised) July 1, 2009

IFRS 2 Share-based payment (Amendments) January 1, 2009
IFRS 3 Business combinations (Revised) July 1, 2009
IFRS 4 Insurance contracts (Amendments) January 1, 2009
IFRS 5 Non-current assets held-for-sale and discontinued operations (Amendments) January 1, 2009
IFRS 7 Financial instruments: Disclosure (Amendments) January 1, 2009
IFRS 8 Operating segments January 1, 2009
IAS 1 Presentation of financial statements (Revised) January 1, 2009
IAS 7 Statement of cash flows (Amendments) January 1, 2009
IAS12 Income taxes (Amendments) January 1, 2009
IAS 16 Property, plant and equipment (Amendments) January 1, 2009
IAS 18 Revenue (Amendments) January 1, 2009
IAS 19 Employee benefits (Amendments) January 1, 2009


IAS 20 Government grants and disclosure of government assistance (Amendments) January 1, 2009
IAS 21 The effects of changes in foreign exchange rates (Amendments) January 1, 2009
IAS 23 Borrowing costs (Revised) January 1, 2009
IAS 27 Consolidated and separate financial statements (Amendments) July 1, 2009
IAS 28 Investment in associates (Amendments) January 1, 2009
IAS 31 Interests in joint ventures (Amendments) January 1, 2009
IAS 32 Financial Instruments: Presentation (Amendments) January 1, 2009
IAS 33 Earnings per share (Amendments) January 1, 2009
IAS 34 Interim financial reporting (Amendments) January 1, 2009
IAS 36 Impairment of assets (Amendments) January 1, 2009
IAS 38 Intangible assets (Amendments) January 1, 2009
IAS 39 Financial instruments: Recognition and measurement (Amendments) January 1, 2009
IAS 40 Investment property (Amendments) January 1, 2009
IAS 41 Agriculture (Amendments) January 1, 2009
IFRIC 1 Changes in existing decommissioning, restoration and similar liabilities
IFRIC 2 Member's share in corporate entities and similar liabilities (Amendments) January 1, 2009
IFRIC 4 Determining whether an Arrangement contains a Lease July 1, 2010
IFRIC 12 Service Concession Arrangements July 1, 2010
IFRIC 14 The limit on a defined benefit asset, minimum funding requirements and
their interaction (Amendments) January 1, 2009
IFRIC 15 Agreements for the construction of real estate January 1, 2009
IFRIC 16 Hedges of a net investment in a foreign operation October 1, 2008
IFRIC 17 Distributions of non-cash assets to owners July 1, 2009
The management anticipates that adoption of above standards, amendments and interpretations in future periods will
have no material impact on the Company's financial statements except for additional disclosures.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4.1 Basis of measurement
These financial statements have been prepared under the historical cost convention modified by revaluation of freehold
land referred to in note 4.8 and certain other modifications as required by approved accounting standards referred to in
the accounting policies given below.
4.2 Basis of consolidation
The consolidated financial statements include the financial statements of Attock Refinery Limited and its wholly owned
subsidiary, Attock Hospital (Private) Limited.
Subsidiaries are all entities over which the Company has the power to govern the financial and operating policies
generally accompanying a shareholding of more than one half of the voting rights or otherwise has power to elect and
appoint more than one half of its directors. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group and are de-consolidated from the date that control ceases.
The assets and liabilities of subsidiary company have been consolidated on a line by line basis and the carrying value of
investments held by the parent company is eliminated against the subsidiary shareholders' equity in the consolidated
financial statements.
Material intra-company balances and transactions have been eliminated for consolidated purposes.
4.3 Dividend appropriation
Dividend is recognised as a liability in the financial statements in the period in which it is declared.


4.4 Employee retirement benefits
The main features of the retirement benefit schemes operated by the Company for its employees are as follows:
(i) Defined benefits plans

The Company operates a pension plan for its management staff and a gratuity plan for its non-management staff.
Pension plan is invested through an approved trust fund while the gratuity plan is book reserve plan. Contributions are
made in accordance with actuarial recommendations. Actuarial valuations are conducted through an independent
actuary, annually using projected unit credit method. The obligation at the balance sheet date is measured at the
present value of the estimated future cash outflows.
Unrealised net gains and losses are amortised over the expected remaining service of current members.
(ii) Defined contribution plans
The company operates an approved contributory provident fund for all employees. Equal monthly contribution is made
both by the Company and the employee to the fund at the rate of 10% of basic salary.
4.5 Employee compensated absences

The company also provides for compensated absences for all employees in accordance with the rules of the Company.
4.6 Taxation
Provision for current taxation is based on taxable income at the current rates of tax.
Deferred income tax is accounted for using the balance sheet liability method in respect of all temporary differences
arising between the carrying amount of assets and liabilities in the financial statements and the corresponding tax
bases used in the computation of taxable profit. Deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is probable that future taxable profits will be
available against which the deductible temporary differences can be utilized.
Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse based on the
tax rates that have been enacted. Deferred tax is charged or credited to income except in the case of items credited or
charged to equity in which case it is included in equity.
4.7 Provisions
Provisions are recognised when the Company has a legal or constructive obligation as a result of past events, when it is
probable that an outflow of resources embodying economic benefit will be required to settle the obligation and a reliable
estimate of the amount can be made.
4.8 Property, plant and equipment
a) Cost
Operating fixed assets except freehold land are stated at cost less accumulated depreciation. Freehold land is
stated at revalued amount. Capital work-in-progress and stores held for capital expenditure are stated at cost.
Cost in relation to certain plant and machinery items include borrowing cost related to the financing of major
projects during construction phase.
b) Depreciation
Operating assets depreciation is calculated using the straight-line method to allocate their cost over their
estimated useful lives at the rates specified in note 12.
c) Repairs and maintenance

Maintenance and normal repairs, including minor alterations, are charged to income as and when incurred.
Renewals and improvements are capitalised and the assets so replaced, if any, are retired.


d) Gains and losses on deletion
Gains and losses on deletions of assets are included in income currently.
4.9 Investments in associated companies

Investments in associated companies are accounted for using the equity method. Under this method investments are
stated at cost plus the company's equity in undistributed earnings and losses after acquisition, less any impairment in
the value of individual investments.
4.10 Impairment of non-financial assets

Assets that have an indefinite useful life, for example land, are not subject to amortisation or depreciation and are tested
annually for impairment. Assets that are subject to depreciation/amortisation are reviewed for impairment at each
balance sheet date or whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount. Reversals of the impairment losses are restricted to the original cost of the asset. An impairment
loss or reversal of impairment loss is recognised in the profit and loss account.
4.11 Stores, spares and loose tools

These are valued at moving average cost less allowance for obsolete and slow moving items. Items in transit are stated
at invoice value plus other charges paid thereon.
4.12 Stock - in - trade

Stock-in-trade is valued at the lower of cost and net realisable value. Crude oil in transit is valued at cost comprising
invoice value. Cost in relation to crude oil is determined on the basis of annual average cost of purchases during the year
on the principles of import parity and in relation to semi-finished and finished products it represents the cost of crude oil
and refining charges consisting of direct expenses and appropriate production overheads. Direct expenses are arrived
at on the basis of average cost for the year per barrel of throughput. Production overheads, including depreciation, are
allocated to throughput proportionately on the basis of nameplate capacity.
Net realisable value in relation to finished product represents selling prices in the ordinary course of business less costs
necessarily to be incurred for its sale, as applicable, and in relation to crude oil represents replacement cost at the
balance sheet date.
4.13 Revenue recognition

Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and the revenue
can be reliably measured. Revenue is recognised as follows:
i) Revenue from sales is recognised on delivery of products ex-refinery to the customers with the exception that
Naphtha export sales are recognised on the basis of products shipped to customers.
ii) The Company is operating under the import parity pricing formula, as modified from time to time, whereby it is
charged the cost of crude on 'import parity' basis and is allowed product prices equivalent to the 'import parity'
price, calculated under prescribed parameters.
Effective July 1, 2007, the Government made certain modifications in the prescribed parameters effectively
reducing the price of Kerosene oil, Light Diesel Oil (LDO) and JP-8 in 2007 and 2008. The Government has further
modified the refineries pricing formula in August, 2008 whereby the 10% duty included in pricing of HSD has
been cut to 7.5% and the motor gasoline pricing has been unilaterally revised by linking its price to Arab Gulf 95
RON prices and calculating the price of 87 RON motor gasoline on a unitary method basis. This revision adversely
affect the pricing of HSD and motor gasoline which are Company's two major products.
Earlier in July, 2002, the Government had modified the pricing formula that was applicable to the Company
restricting the distribution of net profits after tax (if any) from refinery operations to 50% of paid-up capital as at
July 1, 2002 and diverting the surplus profits, if any, to a special reserve to offset any future loss or make
investment for expansion or upgradation of Refinery. Further the Government had abolished the minimum rate of


return of 10% which continues to be contested by the Company as it represented to the Government that the
already existing agreement for guaranteed return could be modified only with the mutual consent of both the
parties.
iii) Income on investment in associated companies is recognised using the equity method. Under this method, the
company's share of post-acquisition profit or loss of the associated company is recognised in the profit and loss
account, and its share of post-acquisition movements in reserve is recognised in reserves. Dividend distribution
by the associated companies is adjusted against the carrying amount of the investment.
iv) Dividend income is recognised when the right to receive dividend is established.
v) Income on bank deposits is recognised using the effective yield method.
4.14 Borrowing cost

Borrowing cost related to the financing of major projects during the construction phase is capitalised. All other borrowing
costs are expensed as incurred.
4.15 Foreign currency transactions and balances

Transactions in foreign currencies are converted into rupees at the rates of exchange ruling on the date of the
transaction. All monetary assets and liabilities denominated in foreign currencies at the year end are translated at
exchange rates prevailing at the balance sheet date. Exchange differences are dealt with through the profit and loss
account.
4.16 Financial instruments

Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the
instrument and de-recognised when the Company loses control of the contractual rights that comprise the financial
assets and when the obligation specified in the contract is discharged, cancelled or expired. All financial assets and
liabilities are initially measured at cost, which is the fair value of the consideration given and received respectively.
These are subsequently measured at fair value, amortised cost or cost, as the case may be.
4.17 Financial Assets

The Company classifies its financial assets in the following categories: held-to-maturity investments, loans and
receivables, available for sale investments and investments at fair value through profit or loss. The classification
depends on the purpose for which the financial assets were acquired. Management determines the classification of its
financial assets at initial recognition. Regular purchases and sales of financial assets are recognized on the trade-date-
the date on which the company commits to purchase or sell the asset.
4.17.1 Held-to-maturity investments

Investments with fixed payments and maturity that the Company has the intent and ability to hold to maturity are
classified as held-to-maturity investments and are carried at amortised cost less impairment losses.
4.17.2 Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet
date. These are classified as non-current assets. The Company's loans and receivables comprise "Trade debts",
"Advances, deposits and other receivables" and "Cash and bank balances" in the balance sheet. Loans and receivables
are carried at amortized cost using the effective interest method.
4.17.3 Available-for-sale investments

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any
of the other categories. They are included in non-current assets unless management intends to dispose of the
investment within 12 months of the balance sheet date.


Available-for-sale investments are initially recognised at cost and carried at fair value at the balance sheet date. Fair
value of a quoted investment is determined in relation to its market value (current bid prices) at the balance sheet date.
If the market for a financial asset is not active (and for unlisted securities), the Company establishes fair value by using
valuation techniques. Adjustment arising from remeasurement of investment to fair value is recorded in equity and
taken to income on disposal of investment or when the investment is determined to be impaired.
4.17.4Investment at fair value through profit or loss

Investments classified as investments at fair value through profit or loss are initially measured at cost being fair value of
consideration given. At subsequent dates these investments are measured at fair value with any resulting gains or
losses recognised directly in the profit and loss account. The fair value of such investments is determined on the basis of
prevailing market prices.
4.18 Trade and other payables

Liabilities for trade and other amounts payable including amounts payable to related parties are carried at cost which is
the fair value of the consideration to be paid in the future for goods and services received.
4.19 Offsetting
Financial assets and liabilities are offset and the net amount is reported in the balance sheet if the Company has a
legally enforceable right to set off the recognised amounts and the Company intends to settle on a net basis or realise
the asset and settle the liability simultaneously.
4.20 Cash and cash equivalents

For the purpose of cash flow statement, cash and cash equivalents comprise cash in hand, bank balances and highly
liquid short term investments.
4.21 Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic environment in
which the Company operates. The financial statements are presented in Pakistani Rupees, which is the Company's
functional currency.
5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of financial statements in conformity with the approved accounting standards requires the use of
certain accounting estimates. It also requires management to exercise its judgment in the process of applying the
Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where
assumptions and estimates are significant to the financial statements, are as follows:
i) Estimate of recoverable amount of investments in associated companies - note 14
ii) Revaluation surplus on freehold land - note 12.2
iii) Estimated useful life of property, plant and equipment - note 12
iv) Provision for taxation - note 31
v) Provision for employee retirement benefits - note 29


2009 2008
Rs ‘000 Rs ‘000
6. SHARE CAPITAL
Authorised
100,000,000 (2008: 100,000,000) ordinary shares of Rs 10 each 1,000,000 1,000,000
Issued, subscribed and paid up
Shares issued for cash

8,000,000 ordinary shares of Rs 10 each 80,000 80,000
Shares issued as fully paid bonus shares

The Attock Oil Company Limited held 48,039,224 (2008 : 40,032,687) ordinary shares and Attock Petroleum Limited
held 1,332,000 respectively (2008 : 1,000,000 ) ordinary shares at the year end.
2009 2008
Rs ‘000 Rs ‘000
7. RESERVES AND SURPLUS
Capital reserve
Liabilities taken over from The Attock Oil Company Limited

no longer required 4,800 4,800
Capital gain on sale of building 654 654
Insurance and other claims realised relating to
pre-incorporation period 494 494
Donation received for purchase of hospital equipment 4,000 4,000
Bonus share issued by associated companies 54,320 33,320
64,268 43,268
Special reserve for expansion / modernisation - note 7.1
Additional revenue under processing fee formula related

to 1990-91 and 1991-92 32,929 32,929
Surplus profits under the import parity pricing formula 4,635,219 4,375,003
Surplus profits of associates under the import parity pricing formula 517,497 1,197,692
5,185,645 5,605,624
Maintenance reserve - note 7.2 46,680 –
Revenue reserve
Investment reserve 1,566,330 –

General reserve 1,184,130 819,980
Surplus - unappropriated profit 3,309,524 4,233,236
6,059,984 5,053,216
11,356,577 10,702,108


7.1 Represents amounts retained as per stipulations of the Government under the pricing formula and is available only for
offsetting any future loss or making investment in expansion or upgradation of the refinery. Transfer to / from special
reserve is recognised at each quarter end and is reviewed for adjustment based on profit / loss on an annual basis. The
company has incurred capital expenditure of Rs 3,855 million on upgradation and expansion projects from July 1, 1997
to June 30, 2009 (July 1, 1997 to June 30, 2008: Rs 3,770 million).
7.2 Represents amount retained by Attock Gen Limited to pay for major maintenance expenses in terms of the Power
Purchase Agreement.
8. SURPLUS ON REVALUATION OF FREEHOLD LAND
This represents surplus over book value resulting from revaluation of freehold land as referred to in note 12.2 and is not
available for distribution to shareholders.
9. SHORT TERM FINANCE
The Company has negotiated running finance facilities with various banks and accepted facility offer letters to the extent
of Rs 3 billion, which were unutilised at the year end. As and when required, these facilities shall be secured by joint
hypothecation by way of 1st registered charges over the Company's current assets.
2009 2008
Rs ‘000 Rs ‘000
10. TRADE AND OTHER PAYABLES
Creditors - note 10.1 22,996,573 24,371,972

Due to The Attock Oil Company Limited - Holding Company 84,968 256,723
Due to associated companies
Pakistan Oilfields Limited 836,481 1,684,783
Attock Cement Pakistan Limited 21 72
Accrued liabilities and provisions - note 10.1 2,834,903 1,717,026
Due to the Government under pricing formula 2,527,290 7,138,356
Advance payments from customers 30,298 2,677
Sales tax payable 441,691 1,037,929
General staff provident fund 1,357 –
Staff provident fund 1,912 –
Deposits from customers adjustable against freight
and Government levies payable on their behalf 376 376
Payable to statutory authorities in respect of petroleum
development levy and excise duty 175,813 13,099
Crude oil freight adjustable through inland freight equalisation margin - 21,479
Security deposits 49,086 49,110
Unclaimed dividends 3,774 1,576
30,317,091 36,691,014
10.1 These balances include amounts retained from payments to crude suppliers for purchase of local crude as per the
directives of the Ministry of Petroleum and Natural Resources (the Ministry). Further, as per directive of the Ministry
such withheld amounts are to be retained in designated 90 days interest bearing accounts. The amounts withheld
alongwith accumulated profits amounted to Rs 4,368.984 million (2008: Rs 6,630.371 million).


2009 2008
Rs ‘000 Rs ‘000
10.2 Workers' Profit Participation Fund

Balance at the beginning of the year 181,441 65,840
Add: Interest on funds utilised in the Company's business 7,009 3,889
188,450 69,729
Less: Amount paid to the Fund 188,156 65,959
294 3,770
Add: Amount allocated for the year - notes 28 and 33 94,460 177,671
94,754 181,441
2009 2008
Rs ‘000 Rs ‘000
11. CONTINGENCIES AND COMMITMENTS

Contingencies:
i) Due to huge circular debt in the oil industry, certain payments due from /
to the oil marketing companies (OMCs) and crude oil suppliers
respectively have not been made on their due dates of payment. As a
result the Company and an associated company have raised claims on
OMCs in respect of mark-up on delayed payments as well as received
counter claims from some crude oil suppliers which have not been
recognized in the financial statements as these have not been
acknowledged as debt by either parties.
ii) Guarantees issued by banks on behalf of the Company 350 300
iii) Claims for land compensation contested by the Company 1,300 1,300
iv) Price adjustment related to crude oil purchases as referred to in note
24.1, the amount of which can not be presently quantified
v) Company’s share in guarantees and indemnity bonds issued by 1,226,832 784,033
associated companies
Commitments outstanding:
i) Capital expenditure 37,876 43,959
ii) Letters of credit other than for capital expenditure 243,043 172,722


12. OPERATING ASSETS
Freehold Buildings Furniture,

land on freehold Plant and Computer fixtures and
(note 12.2) land machinery equipment equipment Vehicles Total
Rs ‘000
As at July 1, 2007
Cost 1,927,250 84,731 3,918,672 56,151 63,395 70,319 6,120,518
Net book value 1,927,250 52,184 703,959 6,781 24,781 19,172 2,734,127
Additions – 16,918 99,922 2,356 6,056 4,486 129,738
Disposals
Cost – – (24,703) (10,244) (10,084) (852) (45,883)
Depreciation – – 18,222 10,215 8,232 852 37,521
– – (6,481) (29) (1,852) – (8,362)
As at July 1, 2008
Cost 1,927,250 101,649 3,993,891 48,263 59,367 73,953 6,204,373
Net book value 1,927,250 63,529 428,407 6,114 23,054 14,611 2,462,965

Additions 50,310 9,618 192,951 4,510 3,099 4,875 265,363
Disposals
Cost – – (75,063) (6,250) (389) (4,528) (86,230)
Depreciation – – 53 6,247 243 4,107 10,650
– – (75,010) (3) (146) (421) (75,580)
As at June 30, 2009

Cost 1,977,560 111,267 4,111,779 46,523 62,077 74,300 6,383,506
Net book value 1,977,560 67,403 440,677 7,086 20,691 11,399 2,524,816
Annual rate of
Depreciation (%) – 5 10 20 10 20


12.1 Fixed assets disposed off during the year are as follows:
Original Book Sale Mode of Particulars of

cost value proceeds disposal purchaser
Rs ‘000
Assets with individual book value exceeding Rs 50,000
Plant and machinery 75,000 75,000* – Insurance claim EFU General Insurance
Company Limited (EFU)
Vehicles 1,001 350 350 Company policy Dr. Ilyas Fazil, ex-employee
Assets disposed off to executives:
Vehicles 941 – 94 Company policy Mr. S. Ahmed Abid

857 – 85 Company policy Mr. Malik Masood Sadiq
504 – 50 Company policy Mr. Zia ul Haq Mirza
561 – 56 Company policy Mr. Salman Tariq
532 – 53 Company policy Mr. Raja Nadeem Khalid
* This amount is adjustable against insurance claim lodged based on replacement cost of the asset.
12.2 Value of freehold land includes revaluation surplus of Rs 1,923.339 million arising from revaluation of freehold land in
January 2001 carried out by an independent valuer. Valuation was made on the basis of market value. The original cost
of the land as at June 30, 2009 is Rs 54.221 million.
2009 2008
Rs ‘000 Rs ‘000
12.3 The depreciation charge for the year has

been allocated as follows:
Cost of sales 114,446 378,170
Administration expenses 11,417 12,405
Distribution cost 347 298
Desalter operating cost 633 633
Depreciation of Subsidiary company 1,089 1,032
127,932 392,538
13. CAPITAL WORK-IN-PROGRESS
Civil works 242 2,191
Plant and machinery 307,410 411,820
Pipeline project 28,420 28,420
336,072 442,431
14. INVESTMENT IN ASSOCIATED COMPANIES
Balance at beginning of the year 14,842,438 11,416,312
Sale of investment in associated company – (1,550,881)
Purchase of shares of associated companies 108,541 4,542,444
Share of profit after tax of associated companies 1,227,431 2,059,708
Dividend received from associated companies (735,835) (454,734)
Impairment loss on investment (143,357) (1,170,411)
Balance at end of the year 15,299,218 14,842,438


2009 2008
% age % age
holding Rs ‘000 holding Rs ‘000
14.1 LONG TERM INVESTMENTS

Quoted
National Refinery Limited (NRL) - note 14.2 25 9,396,071 25 9,556,004
shares including 3,331,940 (2008: 3,331,940)
(June 30, 2008: Rs 5,947 million)
Attock Petroleum Limited (APL) - note 14.3 21.88 4,986,521 21.70 4,627,293
shares including 2,100,016 (2008: nil)
(June 30, 2008: Rs 4,503 million)
Unquoted
Attock Gen Limited (AGL) - note 14.4 30 910,541 30 653,754
Attock Information Technology Services
(Private) Limited (AITSL) - note 14.5 & 14.6 10 6,085 10 5,387
15,299,218 14,842,438
All associated and subsidiary companies are incorporated in Pakistan.

Number of shares Carrying value
Rs ‘000
14.2 Investment in NRL
As at July 1, 2008 19,991,640 9,556,004

Dividend received – (399,833)
Share in profit of NRL – 383,257
Impairment loss adjustment to fair value – (143,357)
As at June 30, 2009 19,991,640 9,396,071
The carrying value of investment in National Refinery Limited at June 30, 2009 is net of impairment loss of
Rs 1,313,768 thousand (2008: Rs 1,170,411 thousand). The carrying value is based on valuation analysis carried out
by an external investment advisor engaged by the Company.The recoverable amount has been estimated based on a
value in use calculation. These calculations have been made on discounted cash flow based valuation methodology
which assumes gross profit margin of 5.38% (2008: 5.34%), terminal growth rate of 3% (2008: 4%) and capital asset
pricing model based discount rate of 18.05% (2008: 18.64%).


Rs ‘000
14.3 Investment in APL
As at July 1, 2008 10,417,680 4,627,293

Bonus shares received during the year 2,100,016 –
Dividend received – (336,002)
Purchase of shares during the year 82,400 24,541
Share in profit of APL – 670,689
As at June 30, 2009 12,600,096 4,986,521
Based on a valuation analysis carried out by the Company, the recoverable amount of investment in Attock Petroleum
Limited exceeds its carrying amount. The recoverable amount has been estimated based on a value in use calculation.
These calculations have been made on discounted cash flow based valuation methodology which assumes gross profit
margin of 5.16%, terminal growth rate of 4.5% and capital asset pricing model based discount rate of 18.05%.

Rs ‘000
14.4 Investment in AGL

As at July 1, 2008 6,435,000 653,754
Right shares acquired during the year 840,000 84,000
Share in profit of AGL – 172,787
As at June 30, 2009 7,275,000 910,541
14.5 Investment in AITSL

As at July 1, 2008 450,000 5,387
Share in profit of AITSL – 698
As at June 30, 2009 450,000 6,085
14.6 Although the company has less than 20 percent shareholding in Attock Information Technology Services (Private)
Limited, this company has been treated as associates since the Company has representation on its Board of Directors.
2009 2008
Rs ‘000 Rs ‘000
15. LONG TERM LOANS AND DEPOSITS

Loans to employees - considered good - note 15.1 28,546 25,879
Less: Amounts due within next twelve months shown
under current assets - note 20 (17,057) (14,095)
11,489 11,784
Security deposits 948 948
12,437 12,732
15.1 Loans to employees are for miscellaneous purposes which are recoverable in 24, 36 and 60 equal monthly installments
depending on case to case basis and are secured by a charge on the asset purchased and /or amount due to the
employee against provident fund or a third party guarantee. These are interest free loans. These include an amount of
Rs 5.218 million (2008: Rs 4.366 million) receivable from Executives of the Company and does not include any amount
receivable from Directors or Chief Executive. The maximum amount due from executives of the Company at the end of
any month during the year was Rs 6.913 million (2008: Rs 4.720 million).


2009 2008
Rs ‘000 Rs ‘000
15.2 Reconciliation of carrying amount of loans to executives:

Opening balance as at July 1 4,366 3,552
Add: Disbursements during the year 5,753 7,164
10,119 10,716
Less: Repayments during the year 4,901 6,350
Closing balance as at June 30 5,218 4,366
16. DEFERRED TAXATION

Debit balances arising on
Provisions for obsolete stores, doubtful debts and gratuity 66,036 55,014
Difference between accounting and tax depreciation 118,506 164,574
184,542 219,588
17. STORES, SPARES AND LOOSE TOOLS
Stores (including items in transit
Rs 57.27 million; 2008: Rs 99.03 million) 336,212 351,123
Spares 279,955 228,053
Loose tools 509 624
616,676 579,800
Less: Provision for slow moving items - note 17.1 43,472 37,300
573,204 542,500
17.1 Provision for slow moving items

Opening balance 37,300 36,000
Add: Provision for the year 10,600 1,300
47,900 37,300
Less: stores and spares written off 4,428 –
43,472 37,300
18. STOCK-IN-TRADE
Crude oil - in stock 1,222,627 902,525
- in transit 219,165 375,967
1,441,792 1,278,492
Semi-finished products 377,749 436,792
Finished products - note 18.1 3,049,435 3,129,569
Medical supplies 752 574
4,869,728 4,845,427


18.1 Finished products include stocks carried at net realisable value of Rs 910 million (2008: Rs 2 million). Adjustments
amounting to Rs 88 million (2008: Rs 1 million) have been made to closing inventory to write down stocks of finished
products to their net realizable value.
19. TRADE DEBTS

All debtors are unsecured and considered good. These include amount receivable from associated companies
Attock Petroleum Limited Rs 3,902 million (2008: Rs 2,327 million) and Pakistan Oilfields Limited Rs 8 million
(2008: Rs 11 million).
2009 2008
Rs ‘000 Rs ‘000
20. LOANS, ADVANCES, DEPOSITS, PREPAYMENTS

AND OTHER RECEIVABLES
LOANS AND ADVANCES - CONSIDERED GOOD
Current portion of long-term loans to employees - note 15 17,057 14,095
Advances to suppliers 35,681 61,874
Advances to employees 2,619 2,236
55,357 78,205
DEPOSITS AND PREPAYMENTS
Trade deposits 286 286
Short term prepayments 33,950 14,705
34,236 14,991
OTHER RECEIVABLES
Due from associated companies
Attock Leisure and Management Associates (Pvt) Limited 594 115
National Cleaner Production Centre Foundation 2,053 2,992
Due from Staff Pension Fund 28,820 15,404
Income accrued on bank deposits 80,494 108,888
Crude oil freight adjustable through inland freight equalisation margin 67,276 –
Amount adjustable against insurance claim - note 12.1 75,000 –

Income tax refundable 6,621 4,738
Other receivables 2,908 5,534
293,579 155,111
383,172 248,307
21. CASH AND BANK BALANCES
Cash in hand 465 955
With banks:
Current accounts 28,626 2,731
Deposit accounts 2,000,000 6,317,269
Savings accounts (including US $ 363,249; 2008: US $ 366,766) 4,774,904 12,624,245
6,803,995 18,945,200


21.1 Balances with banks include Rs 2,000.000 million (2008: 4,817.269 million) in respect of deposits placed in a 90-day
interest-bearing account consequent to directives of the Ministry of Petroleum & Natural Resources on account of
amounts withheld alongwith related interest earned thereon, as referred to in note 10.1.
21.2 Bank deposits of Rs 0.350 million (2008: Rs 0.300 million) were under lien with bank against a bank guarantee issued
on behalf of the Company.
21.3 Balances with banks include Rs 48.866 million (2008: Rs 48.890 million) in respect of security deposits received.
21.4 Balances with banks earned weighted average interest / mark-up @ 14.04% (2008: @ 9.61%) per annum.
2009 2008
Rs ‘000 Rs ‘000
22. SALES
Gross sales (excluding Naphtha export sales) 92,766,859 93,428,851
Naphtha export sales 9,131,088 12,509,719
Less: Cost of Naphtha purchased from third parties and
related handling charges recovered 1,058,823 1,684,095
8,072,265 10,825,624
Less: Duties, taxes and levies - note 22.1 24,292,676 12,343,772
76,546,448 91,910,703
22.1 Duties, taxes and levies
Sales tax 11,675,167 10,418,456
Petroleum development levy 12,600,264 1,903,321
Custom duties and other levies 17,245 21,995
24,292,676 12,343,772
23. REIMBURSEMENT DUE FROM THE GOVERNMENT

UNDER IMPORT PARITY PRICING FORMULA
This represents amount due from the Government of Pakistan on account of shortfall in ex-refinery prices of certain
petroleum products under the import parity pricing formula.


2009 2008
Rs ‘000 Rs ‘000
24. COST OF SALES

Opening stock of semi-finished products 436,792 311,633
Crude oil consumed - note 24.1 72,606,265 88,115,513
Transportation and handling charges 1,076,227 1,174,592
Chemicals consumed 322,132 354,582
Professional charges for technical services 4,350 3,506
Insurance 81,463 52,935
Repairs and maintenance (including stores and spares
consumed Rs 75.980 million; 2008: Rs 64.345 million) 163,067 162,555
Staff transport and traveling 7,679 10,449
Cost of receptacles 15,665 15,912
Research and development 165 749
75,639,710 91,336,433
Closing stock of semi-finished products (377,749) (436,792)
75,261,961 90,899,641
Opening stock of finished products 3,129,569 1,876,301
Closing stock of finished products (3,049,434) (3,129,569)
80,135 (1,253,268)
75,342,096 89,646,373
24.1 Crude oil consumed
Stock at the beginning of the year 1,278,493 1,664,712

Purchases 72,769,565 87,729,294
74,048,058 89,394,006
Stock at the end of the year (1,441,793) (1,278,493)

72,606,265 88,115,513
Certain crude purchases have been recorded based on provisional prices notified by the Government and may require
adjustment in subsequent periods. Cost of purchases include Rs Nil (2008: 706.120 million) related to purchases in
prior years.
24.2 Salaries, wages and other benefits under cost of sales, administration expenses, distribution cost and income from
crude desalter operations include the Company's contribution to the Provident Fund amounting to Rs 14.708 million
(2008: Rs 13.245 million).


2009 2008
Rs ‘000 Rs ‘000
25. ADMINISTRATION EXPENSES

Staff transport, traveling and entertainment 9,956 12,768
Electricity, gas and water 6,060 5,570
Auditor's remuneration - note 25.1 1,639 1,074
Legal and professional charges 7,319 4,145
Subscription 5,218 5,214
Publicity 3,473 3,061
Scholarship scheme 1,748 1,909
Insurance 1,289 790
Donations* 2,742 324
Training expenses 501 2,582
Other expenses 99 240
222,822 199,336
* No director or his spouse had any interest in the donee institutions.
25.1 Auditor's remuneration
Annual audit 750 440
Review of half yearly accounts, audit of consolidated
accounts, staff funds and special certifications 454 520
Tax services 300 –
Out of pocket expenses 135 114
1,639 1,074
26. DISTRIBUTION COST
Staff transport, traveling and entertainment 576 652
Telephone and telex charges 161 221
Electricity, gas, fuel and water 2,020 1,857
Printing and stationery 101 137
Repairs and maintenance including packing and
other stores consumed 1,932 2,066
Rent, rates and taxes 464 339
Legal and professional charges 347 144
20,809 19,140


2009 2008
Rs ‘000 Rs ‘000
27. FINANCE COST

Exchange loss 1,464,423 1,240,244
Interest on Workers' Profit Participation Fund - note 10.2 7,009 3,889
Bank and other charges 93 240
1,471,525 1,244,373
28. OTHER CHARGES

Employees' retirement benefits
Staff gratuity benefits 31,120 20,764
Staff pension benefits 1,278 597
Less: Contribution to subsidiary and associated companies (2,137) (995)
(859) (398)
Contribution to employees old age benefits scheme 2,723 2,580
32,984 22,946
Fixed assets shortages /damages written off – 648

Provision for slow moving stores 10,600 1,300
124,319 235,711


29. EMPLOYEES' DEFINED BENEFIT PLANS
The latest actuarial valuation of the employees' defined benefit plans was conducted at June 30, 2009 using the
projected unit credit method. Details of the defined benefit plans are:

benefit benefit
2009 2008 2009 2008
Rs ‘000 Rs ‘000
a) The amounts recognised in the profit and loss account:

Interest on obligation 41,710 31,449 19,721 12,890
Expected return on plan assets (51,074) (39,591) – –
Contribution from an associated company – (144) – –

Net actuarial losses / (gains) recognised
during the year (3,820) (4,890) 6,719 4,056
1,278 597 31,120 20,764
b) The amounts recognised in the balance sheet:
Fair value of plan assets 340,186 385,053 – –
Present value of defined benefit obligations (387,196) (321,136) (163,030) (152,656)
(47,010) 63,917 (163,030) (152,656)
Unrecognised actuarial (gains) / losses 75,830 (48,513) 42,900 55,767
Net asset / (liability) 28,820 15,404 (120,130) (96,889)
c) Movement in the present value of defined benefit obligation:

Present value of defined benefit obligation
as at July 1 321,136 291,335 152,656 121,894
Interest cost 41,710 31,449 19,721 12,890
Benefits paid (13,105) (11,158) (7,880) (9,675)
Actuarial (gains) / losses 22,993 (4,263) (6,147) 23,729
Present value of defined benefit obligation as at June 30 387,196 321,136 163,030 152,656
d) Changes in the fair value of plan assets:

Fair value of plan assets as at July 1 385,053 359,485 – –
Expected return 51,074 39,591 – –
Benefits paid (13,105) (11,158) – –
Contributions by employer 14,693 11,904 – –
Contributions by associated company (358) 144 – –
Actuarial gains / (losses) (97,171) (14,913) – –
Fair value of plan assets as at June 30 340,186 385,053 – –
Actual return on plan assets (46,577) 24,677 – –

The Company expects to contribute Rs 17.3 million to its defined benefit pension plans during 2009 - 2010.


benefit benefit
2009 2008 2009 2008
Rs ‘000 Rs ‘000
e) The major categories of plan assets:

Investment in equities 88,231 119,841 – –
Investment in mixed funds 60,845 103,448 – –
Cash 191,110 161,764 – –
340,186 385,053 – –
f) Significant actuarial assumptions at the balance sheet date:

Discount rate 12.50% 13.25% – –
Expected return on plan assets 12.50% 13.25% – –
Future salary increases 10.36% 11.09% – –
Future pension increases 7.14% 7.86% – –
2009 2008 2007 2006 2005
Rs ‘000
g) Comparison for five years:

Defined Benefit Pension Plan
Fair value of plan assets 340,186 385,053 359,485 280,495 225,121
Surplus / (deficit) (47,010) 63,917 68,150 17,441 9,739
Experience adjustments on plan liabilities 22,993 (4,262) (609) 23,265 9,382

Experience adjustments on plan assets 97,171 14,914 (48,803) 29,017 13,388
Defined Benefit Gratuity Plan
Fair value of plan assets – – – – –
Deficit (163,030) (152,656) (121,894) (96,058) (88,578)
Experience adjustments on plan liabilities (6,147) 23,729 17,982 (1,087) 3,611

Experience adjustments on plan assets – – – – –


2009 2008
Rs ‘000 Rs ‘000
30. OTHER INCOME

Income from financial assets
Income on bank deposits 891,045 483,492
Exchange gain 4,761 16,852
895,806 500,344
Income from non - financial assets
Income from crude decanting 14,458 15,262
Income from crude desalter operations - note 30.1 13,168 9,715
Insurance agency commission 7,624 4,140
Rental income 19,375 6,983
Sale of scrap 15,658 12,930
Profit on disposal of fixed assets 1,001 2,637
Calibration charges 3,431 2,892
Handling and service charges 14,882 16,586
Registration charges from carriage contractors – 200
Penalties from carriage contractors 1,694 4,816
Miscellaneous 6,603 1,346
97,894 77,507
993,700 577,851
30.1 Income from crude desalter operations

Income 54,245 51,997
Less: Operating costs
Chemical consumed 8,380 8,098
41,077 42,282
13,168 9,715
31. PROVISION FOR TAXATION
Current - for the year 631,700 1,054,100
- for prior years – (112,900)
631,700 941,200
Deferred - for the year 34,913 (61,547)
666,613 879,653


2009 2008
Rs ‘000 Rs ‘000
31.1 Relationship between tax expense and accounting profit

Accounting profit 1,072,629 2,887,223
Tax @ 35% 375,420 1,010,528

Income chargeable to tax at special rate 291,193 (17,975)
Prior years – (112,900)
666,613 879,653
32. SHARE IN PROFIT OF ASSOCIATED COMPANIES

National Refinery Limited 383,257 1,501,358
Less: Unrealised profit from intra-group transactions
included in closing stock in trade 75 13,728
670,689 549,679
Attock Information Technology Services (Private) Limited 698 471
1,227,431 2,059,708
Less: Related charges
Taxation 73,584 45,473
125,093 77,305
1,102,338 1,982,403
Profit of Attock Hospital (Private) Limited,
a wholly owned subsidiary - note 33.1 247 276
1,102,585 1,982,679
33. PROFIT / (LOSS) ON INVESTMENT IN ASSOCIATED COMPANIES

Proceeds from sale of shares of Attock Petroleum Limited
(net of expenses incurred on disposal) – 4,430,979
Carrying value of investment – (1,550,881)
– 2,880,098
Impairment loss on investment in National Refinery Limited (143,357) (1,170,411)
(143,357) 1,709,687


2009 2008
Rs ‘000 Rs ‘000
33.1 Profit from Attock Hospital Private Limited (AHL)

Revenue * 44,339 36,532
Less: Operating expenses
Salaries, wages and other benefits (including employees'
retirement benefits of Rs 1,317 thousand ;
2008 : Rs 1,168 thousand) 28,400 22,451
Medical consultancy 4,036 3,753
Medical supplies 4,645 3,157
Dietary cost 796 617
Sanitation and general services 2,099 2,388
Utilities and other expenses 2,918 2,717
Audit fee 83 75
44,066 36,190
Operating profit 273 342
Other income 107 83
Profit before taxation 380 425
Provision for taxation - current – 183
- deferred 133 (34)

133 149
Profit after taxation 247 276
* The revenue includes amount billed by AHL to ARL amounting to Rs 27,393 thousand (2008: Rs 23,471 thousand)
and operating expenses include amount billed by ARL to AHL amounting to Rs 26,646 thousand (2008: Rs 22,960
thousand) which have not been eliminated from revenue and expenses. It is considered that this gives a fairer view of
the operating results of the Company.


33.2 SUMMARISED FINANCIAL STATEMENTS OF THE ASSOCIATED COMPANIES
The aggregate assets, liabilities, revenue and profit of associated companies based on their audited financial
statement are as follows:
2009 2008
Rs ‘000 Rs ‘000
ASSETS
National Refinery Limited 42,344,611 46,604,615
Attock Petroleum Limited 18,270,355 15,513,336
Attock Gen Limited 15,437,050 10,546,408
76,117,980 72,725,211
LIABILITIES
Attock Gen Limited 12,401,914 8,367,227
48,586,981 47,537,266
REVENUE
Attock Gen Limited 3,173,763 69,848
174,643,646 182,717,509
PROFIT
5,198,386 8,704,838
The Company's share in shareholders' equity

National Refinery Limited 25.00% 25.00%
Attock Petroleum Limited 21.88% 21.70%
Attock Information Technology Services (Private) Limited 10.00% 10.00%
Attock Gen Limited 30.00% 30.00%


34. RELATED PARTY TRANSACTIONS
Attock Oil Company Limited holds 56.32% (2008: 56.32%) shares of the Company at the year end. Therefore, all
subsidiaries and associated undertakings of Attock Oil Company Limited are related parties of the Company. The related
parties also comprise of directors, major shareholders, key management personnel, entities over which the directors
are able to exercise significant influence on financial and operating policy decisions and employees' funds. Amount due
from and due to these undertakings are shown under receivables and payables. The remuneration of Chief Executive,
directors and executives is disclosed in note 35 to the financial statements.
2009 2008
Rs ‘000 Rs ‘000
Sale of goods 25,803,489 24,713,370
25,881,680 24,809,073
Purchase of goods 6,689,896 10,154,897

7,053,372 10,564,724
Holding company
Sale of services – 424
Purchase of goods 428,679 1,106,675

433,336 1,110,508
Contribution to employees' pension and provident funds 29,401 25,149
35. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES

The aggregate amounts charged in the accounts for remuneration, including benefits and perquisites, were as follows:
Chief Executive Directors Executives

2009 2008 2009 2008 2009 2008
Rs ‘000
Managerial remuneration / honorarium 4,567 3,525 1,219 1,219 39,302 28,020

Company's contribution to provident
and pension funds 942 731 – – 8,195 6,150
Housing and utilities 2,696 2,208 – – 28,564 18,728
Leave passage 420 420 – – 3,520 3,328
8,625 6,884 1,219 1,219 79,581 56,226

No of person(s) 1 1 3 3 32 25
35.1 In addition, the Chief Executive and 22 (2008: 23) executives were provided with limited use of the Company's cars. The
Chief Executive and all executives were provided with medical facilities and 7 (2008: 8) executives were provided with
unfurnished accommodation in Company owned bungalows. Limited residential telephone facility was also provided to
the Chief Executive and 14 (2008: 15) executives.


36. FINANCIAL INSTRUMENTS
36.1 Financial assets and liabilities
Loans and receivables

2009 2008
Rs ‘000 Rs ‘000
Financial assets :
Trade debts 15,510,180 9,207,878
Loans, advances, deposits and other receivables 313,541 166,990
Cash and bank balances
Foreign currency - US $ 29,684 25,642
Local currency 6,774,311 18,919,558
Long term Loans and deposits 12,437 12,732
22,640,153 28,332,800
Other financial liabilities

2009 2008
Rs ‘000 Rs ‘000
Financial liabilities :
Trade and other payables 30,286,793 36,688,337
Staff gratuity 120,130 96,889
30,406,923 36,785,226
36.2 Credit quality of financial assets
The credit quality of Company's financial assets have been assessed below by reference to external credit ratings of
counterparties determined by The Pakistan Credit Rating Agency Limited (PACRA) and JCR - VIS Credit Rating Company
Limited (JCR-VIS). The counterparties for which external credit ratings were not available have been assessed by
reference to internal credit ratings determined based on their historical information for any defaults in meeting
obligations.
2009 2008
Rating Balance Rating Balance
Rs ‘000 Rs ‘000
Trade debts
Counterparties without external credit rating
Due from associated companies 3,910,073 2,337,902
Others * 1,446,344 4,264,124
15,510,180 9,207,878
Bank Balances
A1 344,855 A1 736,219
A2 44 A2 50,759
A3 11,056 A3 10,164
6,803,531 18,944,244
* These balances represent receivable from oil marketing companies and defence agencies.


36.3 Financial risk management
36.3.1 Financial risk factors
The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including
currency risk, interest rate risk and price risk). The Company’s overall risk management policy focuses on the
unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s financial
performance.
a) Credit risk
Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the other party by
failing to discharge an obligation.
The Company's credit risk is primarily attributable to its trade debts and placements with banks. The sales are
essentially to oil marketing companies and reputable foreign customers. The Company's placements are with banks
having satisfactory credit rating. Due to the high credit worthiness of counter parties the credit risk is considered
minimal.
At June 30, 2009, trade debts of Rs 12,165,131 thousand (2008: Rs 2,692,658 thousand) were past due but not
imparied. The ageing analysis of these trade receivables is as follows:
2009 2008
Rs ‘000 Rs ‘000
0 to 6 months 12,075,267 2,626,482

6 to 12 months 14,589 9,130
Above 12 months 75,275 57,046
12,165,131 2,692,658
b) Liquidity risk
Liquidity risk reflects an enterprise's inability in raising funds to meet commitments. The Company follows an effective
cash management and planning policy to ensure availability of funds and to take appropriate measures for new
requirements.
c) Market risk
i) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates. Currency risk arises mainly from future commercial transactions or
receivables and payables that exist due to transactions in foreign currencies. Financial assets include Rs 36
million (2008: Rs 840 million) and financial liabilities include Rs 6,390 million (2008: Rs 18,470 million) which
were subject to currency risk.
At June 30, 2009, if the currency had weakened /strengthened by 10% against US dollar with all other variables
held constant, profit after tax for the year would have been Rs 413 million (2008: Rs 1,146 million) lower/higher.
ii) Interest rate risk
Interest rate risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates.
Financial assets and liabilities include balances of Rs 8,344 million (2008: Rs 19,436 million) and Rs 4,489
million (2008: Rs 6,727 million) respectively, which are subject to interest rate risk.
At June 30, 2009, if interest rates had been 1% higher/lower with all other variables held constant, profit after tax
for the year would have been Rs 15 million (2008: Rs 79 million) higher/lower.
iii) Price risk
Price risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices (other than those arising from interest rate risk or currency risk), whether
those changes are caused by factors specific to the individual financial instrument or its issuer, or factors
affecting all similar financial instruments traded in the market.
At the year end the Company is not exposed to price risk since there are no financial instruments, whose fair value
or future cash flows will fluctuate because of changes in market prices.


36.3.2 Capital risk management
The Company is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to
sustain future development of the business. The Board of Directors monitors the return on capital and the level of
dividend to ordinary shareholders. There was no change to the Company's approach to the capital management during
the year and the company is not subject to externally imposed capital requirement.
2009 2008
Rs ‘000 Rs ‘000
37. EARNINGS PER SHARE

Profit after taxation from refinery operations 406,016 2,007,570
Profit after taxation from non-refinery operations 959,228 3,692,366
1,365,244 5,699,936
Number of fully paid weighted average ordinary shares ('000) 85,293 85,293
16.01 66.83
Basic earnings per share for the year 2008 reported in the previous year was Rs 28.24 from refinery operations and
Rs 51.95 from non-refinery operations. This has been restated on account of 14,215,500 bonus shares issued without
consideration during the year ended June 30, 2009.
There is no dilutive effect on the basic earnings per share of the Company.
38. GENERAL
38.1 Capacity and production
Against the designed annual refining capacity of 14.784 million (2008: 14.320 million) US barrels the actual
throughput during the year was 13.126 million (2008: 14.901 million) US barrels.
38.2 Number of employees

Total number of employees at the end of the year were 730 (2008: 751).
38.3 Date of authorisation

These financial statements have been authorised for issue by the Board of Directors of the Company on
October 01, 2009.

Form of Proxy
I/ W e
of
being member(s) of Attock Refinery Limited holding
ordinary shares hereby appoint Mr./ Mrs./ Miss
of another member of the Company or failing him /her
of
another member of the Company as my/our proxy in my/our absence to attend and vote for me/us and on my/our
behalf at the 31st Annual General Meeting of the Company to be held on Thursday, 29th October, 2009 at 11:30 a.m.
at Pearl Continental Hotel, Rawalpindi and at any adjournment thereof.
As witness my /our hands seal this day of 2009.
Signed by
in the presence of
CDC Account No.

Folio No. Signature on
Participant I.D. Account No.
Five Rupees
Revenue Stamp
.
The Signature should agree
with the specimen registered
with the Company
Important:
1. This Proxy Form, duly completed and signed, must be received at i. Attested copies of CNIC or the passport of the beneficial owners
the Registered Office, P.O. Refinery, Morgah, Rawalpindi - 46600, and the proxy shall be provided with the proxy form.
Pakistan, not less than 48 hours before the time of holding the
meeting. ii. The proxy shall produce his original CNIC or original passport
at the time of the meeting.
2. If a member appoints more than one proxy and more than one
instruments of proxy are deposited by a member with the Company, iii. In case of a corporate entity, the Board of Directors
all such instruments of proxy shall be rendered invalid. resolution/power of attorney with specimen signature shall be
submitted (unless it has been provided earlier) alongwith proxy
3. For CDC Account Holders / Corporate Entities form to the Company.
In addition to the above the following requirements have to be met.

AFFIX
CORRECT
POSTAGE
The Company Secretary

ATTOCK REFINERY LIMITED
P.O. Refinery, Morgah,
Rawalpindi - 46600
Pakistan.

Atrl 2009

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Attock Refinery Limited

Auditors' Report to the Members

(b) in our opinion

Annual Report 2009 49

SHARE CAPITAL AND RESERVES

Authorised 6 1,000,000 1,000,000

Issued, subscribed and paid-up 6 852,930 710,775

SURPLUS ON REVALUATION OF FREEHOLD LAND 8 1,923,339 1,923,339

Provision for staff gratuity 29 120,130 96,889

CURRENT LIABILITIES AND PROVISIONS

Short term finance 9 – –

CONTINGENCIES AND COMMITMENTS 11

50 Annual Report 2009

PROPERTY, PLANT AND EQUIPMENT

Operating assets 12 2,521,903 2,459,520

LONG TERM INVESTMENTS 14 13,244,120 13,135,579

LONG TERM LOANS AND DEPOSITS 15 12,437 12,732

DEFERRED TAXATION 16 184,389 219,302

Stores, spares and loose tools 17 573,204 542,500

The annexed notes 1 to 38 are an integral part of these financial statements.

Chief Executive Director

Annual Report 2009 51

Profit and Loss Account

Sales 22 76,546,448 91,910,703

Less: Cost of sales 24 75,342,096 89,646,373

GROSS PROFIT 1,918,404 4,007,932

Less: Administration expenses 25 222,822 199,336

PROFIT BEFORE TAXATION FROM REFINERY OPERATIONS 1,072,629 2,887,223

PROFIT AFTER TAXATION FROM REFINERY OPERATIONS 406,016 2,007,570

PROFIT AFTER TAXATION FROM NON-REFINERY OPERATIONS

Gain on sale of shares of an associated company 32 – 3,762,775

PROFIT FOR THE YEAR 1,016,758 6,147,774

Earnings per share - Basic (Rs)

The annexed notes 1 to 38 are an integral part of these financial statements.

Chief Executive Director

52 Annual Report 2009

Cash Flow Statement

CASH FLOWS FROM OPERATING ACTIVITIES

Cash receipts from - customers 95,624,042 102,962,499

Cash paid for operating costs (82,024,072) (80,364,440)

Net cash flows from operating activities (11,543,764) 11,074,228

CASH FLOWS FROM INVESTING ACTIVITIES

Additions to property, plant and equipment (188,975) (361,046)

Net cash flows from investing activities 1,434,624 444,624

CASH FLOWS FROM FINANCING ACTIVITIES

Finance cost (1,471,525) (1,244,374)

Net cash flows from financing activities (2,037,947) (1,471,186)

EFFECT OF EXCHANGE RATE CHANGES 4,761 16,852

INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (12,142,326) 10,064,518

The annexed notes 1 to 38 are an integral part of these financial statements.

Chief Executive Director

Annual Report 2009 53

Statement of Changes in Equity

Bonus shares @ 25% related to the year

Final cash dividend @ 40% related to the

Profit for the year – – – – – 6,147,774 – 6,147,774

Transfer to special reserve for expansion/

Transfer to investment reserve – – – 3,762,775 – (3,762,775) – –

Bonus shares @ 20 % related to the year

Final cash dividend @ 80 % related

Profit for the year – – – – – 1,016,758 – 1,016,758

Transfer to special reserve for expansion/