Tomorrow's Achievement: Annual Report 2013

Annual Report 2013
Vision of today is
Tomorrow's Achievement
National Refinery Limited
We believe in respecting the

community and preserving the
environment for our future
generations and keeping
National interest paramount
in all our actions
CONTENTS
COMPANY OVERVIEW
04 Vision
05 Mission
06 Core Values
08 Corporate Information
10 NRL at a Glance
12 Corporate Objectives and
Development Strategy
14 Directors Profile
16 Chairmans Review
18 Directors Report
CORPORATE GOVERNANCE
32 Code of Conduct
35 Statement of Compliance
38 Review Report to the Members
39 The Terms of Reference of
Audit Committee
40 Term of Reference of Human
Resource & Remuneration
Committee
STAKEHOLDERS INFORMATION
42 Statement of Value Added
43 Six Years at a Glance
44 Horizontal Balance Sheet
45 Vertical Balance Sheet
46 Horizontal Profit & Loss Account
47 Vertical Profit & Loss Account
48 Graphical Representation
FINANCIAL STATEMENTS
53 Auditors Report
54 Balance Sheet
55 Profit and Loss Account
56 Cash Flow Statement
57 Statement of Changes in Equity
58 Notes to the Financial Statements
PATTERN OF SHAREHOLDING,
NOTICE & FORMS
96 Pattern of Shareholding
99 Notice of Annual General Meeting
101 Form of Proxy
103 Dividend Mandate Form
COMPANY
OVERVIEW
VISION
Our passion is to attain distinctive leadership amongst
the corporate success stories of tomorrow.
We at NRL recognize that realization of this passion needs
superior professional competencies, continuous value addition
and improvising, development of human capital and complete
commitment to safety, occupational health and environment.
MISSION
To remain the premium and preferred supply source for various
petroleum products and petrochemicals.
Offer products that are not only viable in terms of desirability
and price but most importantly give true and lasting value to our
customers.
Deliver strong returns on existing and projected investments of
our stakeholders by use of specialised and high quality corporate
capabilities.
Business development by adoption of emerging technologies,
growth in professional competence, support to innovation,
enrichment of human resource and performance recognition.
Be a responsible corporate citizen by serving the community
through a variety of socio-economic acts and maintaining a high
level of safety, occupational health and environmental care.
CORE VALUES
Following concepts and ideas guide the Management and
staff of National Refinery Limited in conducting its business
practices in most ethical ways.
1. Ethical Conduct and Integrity

We value lifestyle in our organization where ethics like truth,

honesty, integrity and fair play are basic ingredients while interacting
within the organization or dealing with the outside world.
2. Teamwork and Responsibility

We share information and resources and step in to help out other

team members. Conflicts are worked out in spite of obstacles and
difficulties. We accept responsibility with can do attitude.
3. Customer Satisfaction

We endeavor to provide quality products to our customers at

competitive prices. We value their satisfaction essential for
continued growth of our business.
4. Continuous Improvement

We generate new ideas and creative approaches to upgrade and

update our refinery to best available technology and processes so
that our products are at the level of internationally accepted
standards.
5. Profitability

We believe in enhancing our profitability to the maximum so that

Employees, Shareholders and Government all benefits from it.
6. Corporate Citizenship

As a good Corporate Citizen, we are more than willing and happy to

meet our social responsibilities towards the community around
us. We are also committed to meet requirements of health, safety
and environment.
CORPORATE INFORMATION
Board of Directors
Dr. Ghaith R. Pharaon Chairman

Alternate Director: Abdus Sattar
Laith G. Pharaon
Alternate Director: Jamil A. Khan
Wael G. Pharaon
Alternate Director: Babar Bashir Nawaz
Shuaib A. Malik
Musa Bojang
Bahauddin Khan
Tariq Iqbal Khan
Chief Executive Officer

Shuaib A. Malik
Chief Financial Officer

Anwar A. Shaikh
Company Secretary
Nouman Ahmed Usmani
Audit Committee
Tariq Iqbal Khan

Abdus Sattar
Alternate to Dr. Ghaith R. Pharaon
Babar Bashir Nawaz
Alternate to Wael G. Pharaon
Bahauddin Khan
Shaikh Ather Ahmed
Chairman
Member
Member
Member
Secretary
Human Resource and Remuneration Committee

Musa Bojang
Bahauddin Khan
Babar Bashir Nawaz
Alternate to Wael G. Pharaon
Shuaib A. Malik
Nouman Ahmed Usmani
Chairman
Member
Member
Member
Secretary
Auditors
A. F. Ferguson & Co.

Chartered Accountants
Solicitors
Ali Sibtain Fazli & Associates
Bankers
Habib Bank Limited

National Bank of Pakistan
United Bank Limited
Allied Bank Limited
Bank Al-Habib Limited
Faysal Bank Limited
MCB Bank Limited
Habib Metropolitan Bank Limited
Registered Office
7-B, Korangi Industrial Area,

P.O. Box 8228, Karachi-74900
UAN No. 111-675-675
Fax: +92-21 35054663,

+92-21 35066705
Website: www.nrlpak.com
E-mail: [email protected]
Share Registrar
THK Associates (Pvt.) Ltd.,

Ground Floor,
State Life Building-3,
Dr. Ziauddin Ahmed Road,
KARACHI-75530
P.O. Box. No. 8533
Contact No.+92(21) 111-000-322
Fax: +92(21) 35655595
Email: [email protected]
Website: www.thk.com.pk
NRL AT A GLANCE
FIRST LUBE REFINERY
Design Capacity
Design Capacity
Date Commissioned
Project Cost
FUEL REFINERY
BEFORE RE-VAMP
Design Capacity
Date Commissioned
Project Cost

AFTER RE-VAMP
Design Capacity
Date Commissioned
Project Cost of Revamping

BTX UNIT
Design Capacity
Date Commissioned
Project Cost

SECOND LUBE REFINERY
BEFORE RE-VAMP
Design Capacity
Date Commissioned
Project Cost

AFTER RE-VAMP
Design Capacity
Date Commissioned
Project Cost of Revamping

SHAREHOLDERS' EQUITY
June 1966
June 2013

539,700 Tons per year of Crude processing

76,200 Tons per year of Lube Base Oils
June 1966
Rs. 103.9 million
1,500,800 Tons per year of Crude processing

April 1977
Rs. 607.5 million
2,170,800 Tons per year of Crude processing
Feburary 1990
Rs. 125.0 million
25,000 Tons per year of BTX
April 1979
Rs. 66.7 million
100,000 Tons per year of Lube Base Oils

January 1985
Rs. 2,082.4 million
115,000 Ton s per year of Lube Base Oils
June 2008
Rs. 585.0 million
Rs. 20.0 million
Rs. 26,871.4 million
CORPORATE OBJECTIVES &

DEVELOPMENT STRATEGY
National Refinery Limited is a petroleum refining and petrochemical complex
engaged in manufacturing and supplying a wide range of fuel products, lubes,
BTX, asphalts and specialty products for domestic consumption and export.
NRL objectives and development strategy are aimed at achieving sustainable
productivity and profitability and high standards of safety, occupational
health and environmental care. This entails human resource re-engineering &
development, enhancing value addition, implementing conservation measures
and continuing growth through upgradation of existing as well as addition of
new facilities. In the changing global environment, corporate objective and
development strategy have been defined to meet the challenges of 21st
Century.
Corporate Objectives
Ensure that business policies and targets are in conformity with the national
goals.
Contribute in meeting the countrys demand of petroleum and petrochemical
products.
Customers satisfaction by providing best value and quality products.
Optimization of the value of barrel of crude oil and cost reduction through
conservation measures.
Achieving and maintaining a high standard of Occupational Health, Safety
and Environmental care.
Ensure reasonable return on the shareholders existing and projected
investments.
Maintain modern management systems conforming to international
standards needed for an efficient organization.
Development Strategy
Contribute in national efforts towards attaining sustainable self-efficiency in
petroleum products.
Human resource development by upgrading training facilities and exposure
to modern technologies / management techniques.
Balancing and Modernization for energy conservation and enhanced yield

of value added products as well as revamping for environment friendly
products.
Expansion of refining capacity by debottlenecking and adding new facilities.
Acquire newer generation technologies for the efficient refinery operations
as well as for attaining highest standards of Occupational Health, Safety
and Environmental care.
Acquiring self-sufficiency in re-engineering, design and fabrication of
equipments.
DIRECTORS PROFILE
Name
Other Engagements
Dr. Ghaith R. Pharaon

Chairman and Director
(Non-Executive Director)
Chairman & Director

The Attock Oil Company Limited
Attock Petroleum Limited
Attock Cement Pakistan Limited
Director
Pakistan Oilfields Limited
Attock Gen Limited
Attock Leisure & Management Associates (Pvt.) Limited
Attock Refinery Limited
Mr. Laith G. Pharaon

Director
Attock Gen Limited
Mr. Wael G. Pharaon

Director
Attock Gen Limited
Angoori Heights Development (Pvt.) Limited
Margalla Farm Houses Development (Pvt.) Limited
Rawal Lodges Development (Pvt.) Limited
Mr. Shuaib A. Malik

Deputy Chairman &
(Executive Director)
Director, Chairman & CEO

Chairman & Director
Attock Hospital (Pvt.) Limited
Director & CEO
Attock Information Technology Services (Pvt.) Limited
Falcon Pakistan (Pvt.) Limited
Director
Attock Gen Limited
Resident Director
Pharaon Investment Group Ltd. Holding SAL
Group Regional Chief Executive
Chairman
NRL Management Staff Pension Fund
14
Name
Other Engagements
Mr. Musa Bojang

(Independent Director)
Team Leader
Budget & Performance Management DepartmentIslamic Development Bank
Mr. Tariq Iqbal Khan

Director
Gillette Pakistan Limited
International Steels Limited
Lucky Cement Limited
Packages Limited
PICIC Insurance Company
Silk Bank Limited
FFC Energy Limited - (Government Nominee)
Pakistan Electric Agency (Pvt.) Limited - (Government Nominee)
Mr. Bahauddin Khan

Chief Operating Officer

Bank Alfalah Limited
Mr. Abdus Sattar

Alternate for
Director
Mr. Babar Bashir Nawaz

Alternate for
Mr. Wael G. Pharaon
Director & Chief Executive

Director
Falcon Pakistan (Pvt.) Limited
Alternate Director
Mr. Jamil A. Khan

Deputy Managing Director
Alternate for
(Executive Director)
Chairman
NRL Executive Staff Post Retirement Medical Benefit Fund
NRL Non-MPT Staff Gratuity Fund
Trustee
NRL Management Staff Pension Fund
NRL Officers Provident Fund
NRL Workmen Provident Fund
Annual Report 2013
15
CHAIRMAN'S REVIEW
It gives me immense pleasure to welcome

you all, on behalf of the Board of Directors,
in the 50th Annual General Meeting of your
Company and to present annual review of
results and audited financial statements
for the financial year ended June 30, 2013.
I congratulate all the stakeholders of the
Company, as it is their trust and support
with which the Company has achieved a 50
years landmark since its incorporation.
The overall World economy is still struggling and has not shown much improvement
to come out of recession. Uncertain economic activities did not let the crude demand
stabilize. International crude price touched the maximum of US$ 115 per barrel.
However, during the month of June it was around US$ 102 per barrel.
Pakistans economy has not
been much different from the
rest of the world and faced many
crises like energy crises, low
foreign investment, devaluation
of currency, high imports and
budgetary deficits.
The countrys GDP growth rate
declined to 3.6 from last years
4.4 showing a slow pace of
development.
16
Arab Light FOB (Monthly average) : 2012-13
$/Bbl
120.00
115.00
110.00
105.00
100.00
95.00
90.00
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
With a newly elected Government in place it is expected that a fresh approach to

resolve the economic challenges, including the resolution of energy crisis, will result
in improved GDP through increase in economic activity in the coming fiscal years.
Despite number of challenges, your Company posted profit after tax of Rs. 2,844
million compared to Rs. 2,618 million during last year.
Fuel Segment incurred loss after tax of Rs. 212 million compared to loss after tax
of Rs. 117 million in the last year due to depressed sales of premium products and
exchange losses. Effective, April 1, 2013, the Government has also imposed price
differential on HSD, which reduce the profitability by Rs. 273 million.
Lube segment earned profit after tax of Rs. 3,056 million compared to Rs. 2,735
million in the last year. Profit increased due to improved margin in local sales of Lube
Base Oils. The sale of Asphalt continued to remain low due to lower infrastructure
development projects undertaken in the country. This has resulted in all time high
inventory of Asphalt valuing Rs. 5.9 billion. However, the Company expects that the
new Government will launch road infrastructure development in the Country, which
will result in higher demand of Asphalt, and hopefully will reduce Companys increased
Inventory of Asphalt.
The Company is planning to venture into various new projects which includes HSD
de-sulphurization unit, Isomerization unit and Uniflex. In this respect various meetings
have been held with Government to provide incentives to make way easier for future
investments. Recently, the Government has decided that deemed duty on HSD will
be increased from 7.5% to 9% effective January 1, 2016, subject to the completion
of HSD de-sulphurization project. The Company has already completed the studies
for these projects and now it is in the process of hiring Engineering, Procurement,
Construction and Commissioning (EPCC) contractors for these projects. We are
hopeful that these projects will be completed within the stipulated time resulting in
improved margins on some of the fuel products.
I would like to acknowledge and commend the efforts of the management, employees
and all other stakeholders for their efforts and continued support in improving the
performance of the Company and expect that they will not only continue the same
but will also put more focused efforts in meeting the new challenges ahead and
deliver increasingly better results.

Chairman
August 14, 2013
Islamabad
Annual Report 2013
17
DIRECTORS' REPORT
Assalam-o-Alaikum
The Board of Directors is pleased to present
the 50th Annual Report of National Refinery
Limited (NRL) together with the audited financial
statements and auditors report thereon for the
year ended June 30, 2013.
FINANCIAL RESULTS
The refining activities remained under pressure throughout the year. The profitability
continued to remain low due to slower economic activities, lesser throughput
and higher inventories. However, your company managed to earn profit after tax
of Rs. 2,844 million as compared to Rs. 2,618 million in the last year.
PROFIT AFTER TAX - (Rs in million)
Bank profit income declined due to lower availability of surplus funds, as the working
capital was stuck-up in high value product inventories.
18
Fuel Segment
Fuel Segment incurred loss after tax of Rs. 212 million as compared to loss after tax
of Rs. 117 million in the last year. Fuel Segments results declined due to decrease
in quantitative sales of premium products and lower Naphtha Exports. However, the
Company managed to reduce high inventory of Furnace Oil during the year.
Segment results were further reduced by Sales Price Differential of Rs. 273 million
effective April 2013 imposed by the Government on High Speed Diesel. The differential
is excess of PSO import prices on import parity prices of HSD.
However, above losses in Fuel Segment were reduced by reversal of liabilities, credited
to Other Income, due to acceptance of NRL claims by suppliers pertaining to product
yield of raw materials.
During the year, the Company carried out planned turnaround of Fuel Refinery, which
continued for 24 days during the second quarter. Therefore, throughput of Fuel
Refinery remained 79% of the designed capacity compared to 84% of last year.
2011-12
SALES VOLUME COMPOSITION
2012-13
Lube Segment
The Lube Segment earned profit after tax of Rs. 3,056 million compared to Rs. 2,735
million during last year which is higher by Rs. 321 million. The results improved due to
better margins as compared to last year.
The Company managed to achieve local sales of Lube Base Oils of 173,723
M. Tons compared to 176,454 M. Tons last year despite scheduled maintenance of
Lube-II Refinery for 24 days. Simultaneously, export sales of Lube Base Oil declined
to 29,354 M. Tons from 37,415 M. Tons.
Sale of Asphalt remained depressed due to very little infrastructure development
work and the inventory continued to rise at all time high level. Although, the Company
Annual Report 2013
19
is carrying inventory of Asphalt amounting to Rs. 5.9 billion, it is anticipated that new
projects for infrastructure development work in the country will be carried out during
the next financial year.
As a part of routine maintenance, Lube-II Refinerys turnaround was carried out
successfully by the Company. The turnaround continued for 24 days in the second
quarter as a result of which throughput of Lube segment was reduced to 104% of the
designed capacity compared to 107% during last year.
EARNING PER SHARE
Earnings per share was Rs. 35.57 compared to Rs. 32.74 in the last year.
APPROPRIATIONS
Description
2012-13
2011-12
(Rupees in millions)
Profit available for appropriation after transfer to

Special Reserve under the Pricing Formula as per
note 16.2
2,845
2,773
Transfer to General Reserves
1,600
1,573
Final Dividend @ 150% (2012: 150%)
1,199
1,199
DIVIDEND
The Board of Directors has recommended a final cash dividend @ Rs. 15 per share
(150%) for the year ended June 30, 2013. The dividend recommended is subject to
the approval by the shareholders in the Annual General Meeting.
20
COMPANYS BUSINESS
The Company is engaged in the business of Crude Oil Refining with three refineries
commissioned in the year 1966, 1977 and 1985. The Company was privatized in the
year 2005, whereby 51% shares of the Company are held by the Attock Group.
The Company operates its three refineries in two business segments Fuel Segment
and Lube Segment. Fuel Segment products include High Speed Diesel, Naphtha,
Motor Gasoline, Liquefied Petroleum Gas, Jet Fuels & Furnace Oil. Lube Segment
produces multiple grades of Lube Base Oils, Asphalts, Waxes and Rubber Process
Oil and some quantities of fuel products. All the products are marketed locally, except
for Naphtha and some quantity of Lube Base Oils which is exported. The designed
annual capacity of Fuel Segment is to process 2,710,500 M. Tons Crude Oil and
condensate.
FUTURE OUTLOOK
Since commissioning of the refineries, two refineries have been re-vamped to
enhance their production capacities. After the acquisition of controlling interest by the
Attock Group, the Company successfully completed the re-vamp of Lube-II Refinery.
Company is planning to further upgrade its plant to enhance its production capacity,
increase production of value added and environment friendly products and to meet
Countrys growing demand of various products.
REFINERY UPGRADATION PROJECTS
Following are the projects where Engineering Design has been completed,
Project Management Consultant has been appointed and Company is in process
of appointing Engineering, Procurement, Construction and Commissioning
(EPCC) Contractor:
o Diesel De-sulphurization Unit
In order to meet the environment standards of Euro-II, the Company is in
the process of planning the installation of Diesel De-sulphurization Unit.
The engineering design is ready and bid documents are under preparation.
The plant is expected to be commissioned by December 2015.
o Naphtha Isomerization Project
To overcome deficit production of Motor Gasoline in the Country, Company
has planned to undertake Isomerization Project to increase the production
of Motor Gasoline by 192,000 Metric Tons per year. The project is also
likely to be completed by December 2015.
o Two Stage Unit at LubeI Refinery
The project has been planned to enhance the installed crude oil processing
capacity from 12,050 Barrel per stream day (bpsd) to 17,000 bpsd and
vacuum fractionation capacity from 5,200 bpsd to 6,600 bpsd. Engineering
design is complete and the project is likely to be commissioned in 2015.
Annual Report 2013
21
o 101 Crude Distillation Unit at Fuel Refinery

The project has been envisioned, to enhance the installed crude oil
processing capacity from 50,000 bpsd to 53,000 bpsd at crude distillation
unit of Fuel Refinery. The project is likely to be completed by December
2015.
o Uniflex
The project is envisaged to add value to low cost feed components and
produce prime products to improve the profitability of the company. It is
considered to be installed along with other deep conversion units.
REVERSE OSMOSIS PLANT
250,000 gallons per day Reverse Osmosis Plant is in process of installation.
The plant shall be ready for commissioning by December 2013.
After commissioning and testing of this plant another Reverse Osmosis Plant
of similar capacity shall be initiated.
UPGRADATION OF SAP ERP SYSTEM FROM VERSION 4.6C TO SAP ECC6
The Company is in the process of up-gradation of its ERP system for improved
Management and Financial Reporting. In this context, Company has purchased
the new version of SAP with additional modules and has appointed consultants
for the implementation of the new version of SAP. The implementation is
expected to be completed by mid of next year.
PRICING FORMULA
The Companys Fuel Segment is regulated by Government under the Import Parity
Pricing Formula. Previously, under this formula prices of finished goods were notified
by OGRA. However, effective from June 1, 2011, the Government de-regulated the
prices of Motor Gasoline, Aviation Fuel and Light Diesel Oil with the capping that
the prices announced by the refineries should not exceed the import prices of the
relevant product of Pakistan State Oil average actual import prices of previous month
including partially the incidentals/wharfage. In case these prices are not available
then refineries have to fix their prices as per existing Import Parity Pricing Formula.
According to the Import Parity Pricing formula, the distribution of profits from Fuel
Segment is restricted and only 50% of the paid-up capital as of July 1, 2002 can be
distributed as dividend to shareholders and the remaining amount is to be transferred
to Special Reserves. As per the initially announced formula Special Reserves could
be utilized to offset against any future losses or to make investment for expansion or
up-gradation of Refinery. However, following are some of the highlights of a recent
directive issued by Government of Pakistan (GoP) in this regard:
o Refineries have been restricted to adjust their losses from Special Reserve
from the year June 30, 2013 and onwards.
22
o

o

o

Refineries have been allowed to utilize the Special Reserves for up-gradation
and expansion of Fuel Refinery operations, subject to GoP approvals and
verification.
Refineries have been directed to open Escrow Account for the amount held in
Special Reserves less amount utilized as above.
Government of Pakistan has agreed to increase the import duty on High
Speed Diesel from 7.5% to 9% effective January 1, 2016 subject to
compliance of Euro-II specification by December 31, 2015.
CRUDE TRANSPORTATION
The Company imports crude oil using National Flagship oil tankers. During the last
quarter of the year Company has renewed its agreement with National Flagship
Company. According to the revised terms of the agreement, Company has been
successful in negotiating discount in the transportation cost of imported crude oil.
SIGNIFICANT RESOURCES
The Company has sufficient funds in the form of cash and bank balances and shortterm investments to maintain its liquidity. The Company is managing its liquidity
without any long-term and short-term borrowings.
RELATIONSHIPS
We continue to maintain history of making timely payments for the supply of crude oil
to Saudi Aramco and other oil exploration companies operating in Pakistan.
We always endeavor to maintain good relationship with our local suppliers, customers
and other business partners.
KEY OPERATING AND FINANCIAL DATA
Key operating and financial data of last six years (2008 2013) is shown on page 43.
REFINERIES PRODUCTION AND PRODUCT-WISE SHARE PARTICIPATION 2011-12
According to throughput analysis, NRL is the second largest refinery of Pakistan
currently in operation with a production capacity of 2.71 million tons per year. NRL is
the only Lube Refinery of Pakistan producing multiple grades of Lube Base Oils to
meet the demand of the Country.
NRL SHARE IN INDUSTRY
Annual Report 2013
23
CREDIT RATINGS
The credit rating of your Company for the year is under assessment by Pakistan
Credit Rating Agency (PACRA), which has been maintained for last eight years as
"AAA" for long-term and "A 1+" for short term due to exceptionally strong capacity for
timely payment of financial obligations and commitments.
RISK & THREATS
The volatile crude oil and product prices in international market mostly result in narrow
margins. In such case the Company adjusts its throughput to minimize the losses.
The Company faces exchange losses due to devaluation of Pak Rupee in making
payments of raw material to suppliers in foreign currencies.
Your Company, being a strategic asset, focuses on security measures including
acquiring and installing latest security hardware.
High inventory level of Asphalt has resulted in blocking up a substantial portion of
your Companys working capital.
CORPORATE SOCIAL RESPONSIBILITY
The Company realizes its social responsibility towards the national economy apart
from its customers, employees and shareholders. As a responsible corporate citizen,
the Company has contributed to different social segments of the economy in various
ways for improving quality of life in the country. Recently, Company contributed
Rs.100,000 towards World Environment Day to create awareness about importance
of cleaner environment among the society in collaboration with Environment Protection
Agency.
Company is ambitious to be recognized as social partner and not only as commercial
entity. In this respect, the Company has kept six disabled persons on its manpower
strength as prescribed in Employment and Rehabilitation Ordinance, 1981 and also
made payments to National Council for the Rehabilitation of Disabled Persons in lieu
of less number of such persons in the Companys employment.
EMPLOYEES & MANAGEMENT RELATIONS
The cordial relationship between the management and union persisted unabatedly.
The productivity achieved reflects the concerted and sincere collective endeavors.
The Company lays emphasis on enhancing the Sports activities and has provided the
required facilities to achieve this objective which may go a long way in maintaining
good health of the employees, boosting up their moral and sense of belonging.
OCCUPATIONAL HEALTH, SAFETY AND ENVIRONMENT
We ensure that our manufacturing activities are in line with the Government
environmental laws and Companys standard operating procedures and safe work
practices to support towards environment protection.
24
Risk Management Survey will be conducted by foreign consultant during the second
half of 2013. Based on survey report, capital investments will be incurred to mitigate
the identified weaknesses.
Environmental performance is continuously reviewed at planned intervals to ensure
its continuing suitability, adequacy and effectiveness. Opportunities of improvement
and need for changes where required are discussed in HSE Committees and Steering
Committee meetings. Decisions are taken, where needed, strategies are developed
and implemented.
Management is committed towards acquiring excellence in overall performance
specially for the conservation of environment, which is evident from implementation
of IMS (Integrated Management System) based on ISO 9001:2008, ISO 14001:2004 &
OHSAS 18001:2007 standards.
NRL has achieved 18.47 million Safe Man Hours without Lost Time Injury (LTI) as on
June 30, 2013. Continuous efforts are being made to ensure the effective application
of operational controls for minimizing Occupational Health & Safety risks values and
environmental impacts.
ENVIRONMENT EXCELLENCE AWARDS
Company has participated in the following Environment Excellence Awards:
1.
National Forum for Environment & Health (NFEH), Excellence award 2013,
consecutively winner since last ten years.
2.
Continually participating in the ACCA-WWF Pakistan Best Environment

Reporting Awards since 2003 and was winner of the victory stand in 2003,
2009 & 2010.
Your Company is an environmental friendly enterprise in the petroleum-refining sector

of the country.
CONTRIBUTION TO NATIONAL EXCHEQUER
During the financial year, the Company contributed Rs. 37,508 million to the National
exchequer in the shape of direct and indirect taxes and earned valuable foreign
exchange of US$ 232 million through the export of Naphtha, Lube Base Oil and
Asphalt.
In addition to the above, the Company has paid to government Rs. 4,798 million as
discount and windfall levy on account of local crude oil and condensates purchased
from oil and gas exploration companies.
Annual Report 2013
25
HUMAN RESOURCE DEVELOPMENT

Human Resource of the Company is playing a very significant role in achieving the
short and long term corporate and strategic objectives of the Company. Therefore,
your Company focuses special attention on their training and development. Various
staff members were nominated for local and overseas courses and workshops in
different technical and non-technical disciplines. In addition to hands on executive
training programs, the Company has also conducted apprenticeship program where
theoretical and practical training in Refinery operations and maintenance was imparted
which will extend a great help to the Petroleum Refining industry in the availability of
trained manpower.
CORPORATE GOVERNANCE
The Company is committed to good corporate governance and has complied with the
applicable Code of Corporate Governance contained in the listing regulations of the
stock exchanges. As required by the Code, following is the statement in compliance
with the Corporate and Financial Reporting Framework of Code of Corporate
Governance.
a.
The financial statements, prepared by the management of the Company,

present its state of affairs fairly, the result of its operations, cash flows and
changes in equity.
b.
Proper books of account have been maintained in the manner required under
the Companies Ordinance, 1984.
c.
Appropriate accounting policies have been consistently applied in the

preparation of financial statements. From current year policy for recognition of
major spares parts as fixed assets has been applied as discussed in note no
2.3 of financial statements. Accounting estimates are based on reasonable and
prudent judgment. From the current year cost estimation formula for finished
and semi-finished inventory has been changed, as discussed in note no. 8.1.
d.
International Financial Reporting Standards, as applicable in Pakistan, have

been followed in the preparation of financial statements.
e.
The system of internal control is sound in design and has been effectively
implemented and monitored.
f.
There are no significant doubts upon the Companys ability to continue as a

going concern.
g.
The values of investment of various funds, based on their respective accounts

as at 30 June 2013 are as under:
26
(Rs. in million)
Un-audited
Description
Management staff
Pension Fund
3,590
Provident Fund
797
Post-Retirement Medical Fund
949
Non-Management staff
Gratuity Fund
92
Provident Fund
371
h.
During the year, Mr. Tariq Iqbal Khan attended Corporate Governance
Leadership Skills training program conducted by Pakistan Institute of
Corporate Governance.
i.
No trade in the shares of the Company was carried out by the Board of
Directors, CEO, CFO, Company Secretary, Executives and their spouses and
minor children except that mentioned in Pattern of Shareholding.
Composition and Meetings of the Board of Directors

During the financial year 2012-13 five meetings of the Board of Directors were held.
The attendance of the Directors is as under:
Total Number
of Meetings *
Meetings
Attended
Mr. Abdus Sattar
Dr. Mohamed Djarraya / Mr. Musa Bojang IDB Nominee
Mr. Bahauddin Khan NIT Nominee
Name of Directors
Alternate Director: Mr. Iqbal A. Khwaja/Mr. Abdus Sattar
Alternate Director: Mr. Babar Bashir Nawaz/Mr. Jamil A. Khan
Mr. Wael G. Pharaon
Alternate Director: Mr. Jamil A. Khan/Mr. Babar Bashir Nawaz
Mr. Shuaib A. Malik
Deputy Chairman /Chief Executive Officer
* Held during the period concerned directors were on Board.
Annual Report 2013
27
Changes in the Directors are pursuant to recent election of Directors held during
the year. In these election, Mr. Tariq Iqbal Khan was elected as an independent
Director of the Company; whereas, Mr. Abdus Sattar did not contest the election.
All other Directors were re-elected for the next term except Mr. Musa Bojang, who
was nominated by Islamic Development Bank in place of Dr. Mohamed Djarraya and
stands elected. The Board of Directors placed on record its appreciation and gratitude
to the previous Board for the valuable services they rendered for the Company.
Human Resource & Remuneration Committee
Meeting of the Committee held and attendance of the members during the period
from July 01, 2012 to June 30, 2013:
Name of Directors
Total Number of
Meetings
Meeting
Attended
Mr. Musa Bojang
Mr. Bahauddin Khan
Mr. Shuaib A. Malik
Audit Committee
The Directors have established Audit Committee. The attendance of the Directors for
Audit Committee meetings for the year ended June 30, 2013 is as follows:
Total Number of
Meetings *
Meetings
attended
Mr. Iqbal A. Khwaja
Mr. Jamil A. Khan
Mr. Abdus Sattar
Mr. Bahauddin Khan
Name of Directors
*Held during the period concerned directors were on Board
Composition of the Audit Committee has been re-constituted during the year
consequent to the election of Board of Directors.
Pattern of Shareholding
Pattern of shareholdings is shown on page 96.
28
AUDITORS
Present Auditors Messrs A. F. Ferguson & Co., Chartered Accountants retire and offer
themselves for reappointment. The Audit Committee recommends the reappointment
of Messrs A. F. Ferguson & Co., Chartered Accountants as auditors for the financial
year ending June 30, 2014.
ACKNOWLEDGEMENT
The Board places on record its appreciation and gratitude to the Companys
management and its staff for their untiring efforts. The Board also acknowledges
the efforts and contributions of customers, suppliers and other stakeholders for their
patronage and business relations.
On behalf of the Board
Shuaib A. Malik
Deputy Chairman /
August 14, 2013
Islamabad
Annual Report 2013
29
30
CORPORATE
GOVERNANCE
Annual Report 2013
31
CODE OF CONDUCT
National Refinery Limited (the Company) is engaged in the manufacturing of wide
range of petroleum products with the objective to achieve sustainable productivity,
profitability and high standards of safety, occupational health and environmental care.
This entails human resource development, enhancing value addition, implementing
conservation measures and growth by up-gradation and addition of newer generation
technologies.
The Company requires all its Board Members and Employees to act within the
authority conferred upon them and in the best interests of the Company and observe
all the Companys policies and procedures as well as relevant laws and regulations,
as are applicable in individual capacity or otherwise, including but not limited to the
corporate values, business principles and the acceptable and unacceptable behaviour
(hereinafter called the Companys Code of Conduct) embodied in this document.
The Company believes that the credibility, goodwill and repute earned over the years
can be maintained through continued conviction in our corporate values of honesty,
justice, integrity and respect for people. The Company strongly promotes trust,
openness, teamwork and professionalism in its entire business activities.

The business principles are derived from the above stated corporate
values and are applied to all facets of business through well-established
procedures. These procedures define behavior expected from each
employee in the discharge of his/her responsibility.
NRL recognizes following obligations, which need to be discharged with

best efforts, commitment and efficiency:
o
o
o
o
32
Safeguarding of shareholders interest and a suitable return on

equity.
Service customers by providing products, which offer value in terms
of price, quality, safety and environmental impact.
Respect human rights, provide congenial working environment, offer
competitive terms of employment, develop human resource and be
an equal opportunity employer.
Seek mutually beneficial business relationship with contractors,
suppliers and investment partners.
The Company believes that profit is essential for business survival. It is a

measure of efficiency and the value that the customer places on products
and services produced by the Company.
The Company requires honesty and fairness in all aspect of its business
and in its relationships with all those with whom it does business. The
direct or indirect offer, payment, soliciting and accepting of bribe in any
form is undesirable.
The Company is fully committed to reliability and accuracy of financial

statements and transparency of transactions in accordance with
established procedures and practices.
The Company does not support any political party or contributes funds to
groups having political interests. The Company will however, promote its
legitimate business interests through trade associations.
The Company, consistent with its commitments to sustainable

developments, has a systematic approach to the management of health,
safety and environment.
The Company is committed to observe laws of Pakistan and is fully aware

of its social responsibility. It would assist the community in activities such
as education, sports, environment preservation, training programs, skills
development and employment within the parameters of its commercial
objectives.
The Company supports free market system. It seeks to compete fairly

and ethically within the framework of applicable competition laws in the
country. The Company will not stop others from competing freely with it.
In view of the critical importance of its business and impact on national

economy, the Company provides all relevant information about its activities
to legitimate interested parties, subject to any overriding constraints of
confidentiality and cost.
The Company requires all its board members and employees to essentially
avoid conflict of interest between private financial and/or other activities
and their professional role in the conduct of Company business.
No board member or employee shall in any manner disclose to any

person or cause disclosure of any information or documents, official or
otherwise, relating to the Company, except those published, and unless
he/she is authorised by the management.
All papers, books, drawings, sketches, photographs, documents and

similar papers containing analysis, formulas, notes or information relating
to the Companys business affairs or operations shall always be treated as
the Company property, whether prepared by the employee or otherwise
and no employee shall be permitted to carry any of these outside business
premises unless specifically authorised to do so by the management.
The Companys property, funds, facilities and services must be used only
for authorised purposes.
The board members or employees of the Company specifically those

coming in direct contact with the vendors doing or seeking to do business
Annual Report 2013
33
with the Company shall not receive favours or incur obligations. In case
any contractor/supplier to have business relations with the Company
happen to be a relative of an official who is entrusted the responsibility
of opening/evaluation/award of supply/contract job or with execution or
certification of material/services, he/she shall immediately bring the fact
to the notice of Managing Director who may entrust the responsibility to
another.

Each employee shall devote his/her full time and energy exclusively to
the business and interests of the Company. In particular, no employee
(including those on leave) unless otherwise permitted by the Company,
shall directly or indirectly engage in any other profession or business or
enter the services of or be employed in any capacity for any purpose
whatsoever and for any part of his/her time by any other person, government
department, firm or company and/or shall not have any private financial
dealings with any other persons of firms having business relations with the
company for sale or purchase of any materials or equipments or supply
of labour or for any other purpose. Every employee shall hold himself in
readiness to perform any duties required of him by his/her superiors to
the best of his/her ability.
No board member or employee of the Company shall, directly or indirectly,

deal in the shares of the Company in any manner during the closed period,
as determined and informed by the Company.
No board member or employee of the Company shall practice insider

trading.
Without prejudice to any penal action defined in any statute, as applicable, against
any kind of non-compliances/violations, non-compliance with the Companys Code
of Conduct may expose the person involved to disciplinary action as per Companys
rules and/or as determined by the management or the Board of Directors of the
Company, as the case may be, on case to case basis.
SHUAIB A. MALIK
Deputy Chairman &
June 18, 2012
34
STATEMENT OF COMPLIANCE
WITH THE CODE OF CORPORATE
GOVERNANCE
This statement is being presented to comply with the Code of Corporate Governance
(the Code) contained in listing regulations of Stock Exchanges where the shares
of the Company are listed, for the purpose of establishing a framework of good
governance, whereby a listed Company is managed in compliance with the best
practices of corporate governance.
The Company has applied the principles contained in the Code in the following
manner:
1.
The Company encourages representation of independent non-executive

directors and directors representing minority interests on its Board of
Directors. At present the Board includes:
Category
Names
Independent Directors

Mr. Musa Bojang
Mr. Bahauddin Khan
Executive Directors
Mr. Shuaib A. Malik

Mr. Jamil A. Khan
Alternate to Mr. Laith G. Pharaon, Director
Non-Executive Directors

Alternate Director: Mr. Abdus Sattar
Mr. Wael G. Pharaon
Alternate Director: Mr. Babar Bashir Nawaz
The independent directors meet the criteria of independence under clause

(i)(b) of the Code.
2.

The Directors have confirmed that none of them is serving as a director in

more than seven listed companies, including this Company.
3.

All the resident directors of the Company are registered as taxpayers and
none of them has defaulted in payment of any loan to a banking company,
a DFI or an NBFI or, being a member of a stock exchange, has been declared
as defaulter by that stock exchange.
4.

No casual vacancy occurred in the Board of directors during the year ended
June 30, 2013.
Annual Report 2013
35
5.

The Company has prepared a Code of Conduct and has ensured that
appropriate steps have been taken to disseminate it throughout the
Company along with its supporting policies and procedures.
6.

The Board has developed vision and mission statements, overall corporate
strategy and significant policies of the Company. A complete record of
particulars of significant policies along with the dates on which they were
approved or amended has been maintained.
7.

All the powers of the Board have been duly exercised and decisions on
material transactions, including appointment and determination of
remuneration and terms and conditions of employment of the CEO, other
executive and non-executive directors, have been taken by the board.
8.

The meetings of the Board were presided over by the Chairman or

Deputy Chairman, and the Chief Financial Officer and Company Secretary
attended all the meetings. The Board meets at least once in every quarter.
Written notices of the Board meetings along with agenda and working
papers were circulated at least seven days before the meetings. The
minutes of the meetings were appropriately recorded, circulated and signed
by the Chairman of the meeting of the Board of Directors.
9.

The Directors were apprised of their duties and responsibilities from time to
time.
10.

The Board has approved terms of appointment and remunerations of

Chief Financial Officer (CFO), Company Secretary and Head of Internal
Audit.
11.

The directors' report for this year has been prepared in compliance with the
requirements of the code and fully describes the salient matters required to
be disclosed.
12.

The CEO and CFO duly endorsed the financial statements of the Company
before approval of the Board.
13.

The directors, CEO and executives do not hold any interest in the shares of
the Company other than that disclosed in the pattern of shareholding.
14.

The Company has complied with all the corporate and financial reporting
requirements of the Code.
15.

The Board has formed an Audit Committee. It comprises of four members,

of whom two are non-executive directors, one is independent director and
the Chairman of the committee is also an independent director.
16.

The meetings of the audit committee were held at least once every quarter
prior to approval of interim and final results of the Company and as required
by the Code. The terms of reference of the committee have been formed
and advised to the committee for compliance.
36
17.

The Board has formed an HR and Remuneration Committee. It comprises

of four members, of whom one is non-executive director, one is independent
director and the Chairman of the Committee is also an independent director.
18.

The Board has set-up an effective internal audit function and that is involved
in the Internal Audit on full time basis relating to the business and other
affairs of the Company.
19.

The statutory auditors of the Company have confirmed that they have
been given a satisfactory rating under the quality control review program
of the Institute of Chartered Accountants of Pakistan, that they or any of the
partners of the firm, their spouses and minor children do not hold shares
of the Company and that the firm and all its partners are in compliance with
International Federation of Accountants (IFAC) guidelines on code of ethics
as adopted by the Institute of Chartered Accountants of Pakistan.
20.

The statutory auditors or the persons associated with them have not
been appointed to provide other services except in accordance with the
listing regulations and the auditors have confirmed that they have observed
IFAC guidelines in this regard.
21.

The related party transactions have been placed before the audit
committee and approved by the Board of Directors along with pricing
methods for transactions carried out on terms equivalent to those that
prevail in the arms length transactions.
22.

The closed period, prior to the announcement of interim/final results, and

business decisions, which may materially affect the market price of
Companys securities, was determined and intimated to directors, employees
and stock exchanges.
23.

Material/price sensitive information has been disseminated among all

market participants at once through stock exchanges.
We confirm that all other material principles contained in the Code have been
complied with.
SHUAIB A. MALIK
Deputy Chairman & Chief Executive Officer
August 14, 2013
Annual Report 2013
37
38
THE TERMS OF REFERENCE OF THE

AUDIT COMMITTEE
The Board has constituted a fully functional Audit Committee. The features of the
terms of reference of the Committee in accordance with the Code of Corporate
Governance are as follows:
a.
Determination of appropriate measures to safeguard the companys assets;
b.
Review of preliminary announcements of results prior to publication;
c.
Review of quarterly, half-yearly and annual financial statements of the company,

prior to their approval by the Board of Directors, focusing on:
major judgmental areas;
significant adjustments resulting from the audit;
the going concern assumption;
any changes in accounting policies and practices;
compliance with applicable accounting standards;
compliance with listing regulations and other statutory and regulatory
requirements; and
significant related party transactions.
d.
Facilitating the external audit and discussion with external auditors of major
observations arising from interim and final audits and any matter that the auditors
may wish to highlight (in the absence of management, where necessary);
e.
Review of management letter issued by external auditors and managements

response thereto;
f.
Ensuring coordination between the internal and external auditors;
g.
Review of the scope and extent of internal audit and ensuring that the internal
audit function has adequate resources and is appropriately placed;
h.
Consideration of major findings of internal investigations of activities

characterized by fraud, corruption and abuse of power and management's
response thereto;
i.
Ascertaining that the internal control systems including financial and operational
controls, accounting systems for timely and appropriate recording of purchases
and sales, receipts and payments, assets and liabilities and reporting structure
are adequate and effective;
Annual Report 2013
39
j.
Review of companys statement on internal control systems prior to endorsement

by the Board of Directors and internal audit reports;
k.
Instituting special projects, value for money studies or other investigations on

any matter specified by the Board of Directors, in consultation with the Chief
Executive and to consider remittance of any matter to the external auditors or
to any other external body;
l.
Determination of compliance with relevant statutory requirements;
m.
Monitoring compliance with the best practices of corporate governance and

identification of significant violations thereof;
n.
Consideration of any other issue or matter as may be assigned by the Board of

Directors; and
o.
Recommend to the Board of Directors the appointment of external auditors,

their removal, audit fees, the provision by the external auditors of any service
to the company in addition to audit of its financial statements.
TERM OF REFERENCE OF HUMAN

RESOURCE & REMUNERATION
COMMITTEE (HR&R)
The Board adopted the responsibilities contained in clause (xxv) of the Code 2012
from (i) to (iv) as the Terms of Reference (TOR) of the HR&R Committee.
The Committee shall be responsible for:
i)
recommending human resource management policies to the board;
ii)
recommending to the board the selection, evaluation, compensation (including

retirement benefits) and succession planning of the CEO;
iii)
recommending to the board the selection, evaluation, compensation (including

retirement benefits) of COO, CFO, Company Secretary and Head of Internal
Audit; and
iv)
consideration and approval on recommendations of CEO on such matters for

key management positions who report directly to CEO or COO.
40
STAKEHOLDERS'
INFORMATION
Annual Report 2013
41
STATEMENT OF VALUE ADDED

For The Year Ended June 30, 2013
42
SIX YEARS AT A GLANCE
Annual Report 2013
43
44
44
45
Annual Report 2013
Annual Report 2013
45
46
46
47
Annual Report 2013
Annual Report 2013
47
48
Annual Report 2013
49
50
FINANCIAL
STATEMENTS
Annual Report 2013
51
52
Annual Report 2013
53
BALANCE SHEET
AS AT JUNE 30, 2013
Note
ASSETS
(Restated)
2013
2012
(Rupees in thousand)
NON-CURRENT ASSETS
Fixed assets
Long term investment
Long term loans
Long term deposits
3
4
5
6
4,362,936
52,242
30,189
4,445,367
3,695,731
65,413
30,189
3,791,333
7
8
9
10
11
788,078
22,563,754
10,976,992
36,276
8,221
86,120
274,711
492,524
16,004,875
51,231,551
986,568
25,359,710
13,262,184
40,127
6,666
110,686
248,126
3,230,473
10,078,554
53,323,094
55,676,918
57,114,427
CURRENT ASSETS
Stores, spares and chemicals
Stock-in-trade
Trade debts
Loans and advances
Trade deposits and short-term prepayments
Interest accrued
Other receivables
Financial asset - held to maturity investments
Cash and bank balances
12
13
14
TOTAL ASSETS
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Share capital
15
Reserves
16
799,666
26,071,688
799,666
26,871,354
24,426,729
25,226,395
17
18
285,389
80,288
365,677
223,437
172,647
396,084
19
20
26,546,460
411,401
1,482,026
28,439,887
29,748,891
398,905
1,344,152
31,491,948
28,805,564
31,888,032
55,676,918
57,114,427
LIABILITIES
NON-CURRENT LIABILITIES
Retirement benefit obligations
Deferred taxation
CURRENT LIABILITIES
Trade and other payables
Provisions
Taxation - provision less payments
TOTAL LIABILITIES
CONTINGENCIES AND COMMITMENTS
21
TOTAL EQUITY AND LIABILITIES

The annexed notes 1 to 43 form an integral part of these financial statements.
Chief Executive
54
National Renery Limited
Director
PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED JUNE 30, 2013
Note
Gross sales
22
Trade discounts, taxes, duties, levies

and price differential
23
Net sales
Cost of sales
24
Gross profit
2013
2012
216,123,042
207,588,512
(36,938,627)
(32,791,437)
179,184,415
174,797,075
(174,118,575)
(170,074,583)
5,065,840
4,722,492
Distribution and marketing expenses
25
(1,037,671)
(1,264,034)
Administrative expenses
26
(508,039)
(464,104)
Other income
27
Other operating expenses
28
2,179,743
(354,519)
5,345,354
Operating profit
Finance cost
29
Profit before taxation

Taxation
30
Profit after taxation
(870,547)
3,136,832
(336,454)
5,794,732
(1,342,860)
4,474,807
4,451,872
(1,630,350)
(1,833,488)
2,844,457
2,618,384
Other comprehensive income
Total comprehensive income
2,844,457
2,618,384
(Rupees)
Earnings per share - basic and diluted
31
35.57
32.74
Chief Executive
Director
Annual Report 2013
55
CASH FLOW STATEMENT

Note
(Restated)
2012
2013
CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from / (used in) operations
32
Income tax paid
6,283,015
(834,333)
(1,584,835)
(2,395,070)
13,171
(2,556)
Decrease / (Increase) in long term loans and advances

Increase in long term deposits
(16)
Payment made to pension fund
(69,778)
(74,285)
Payment made to gratuity fund
(7,217)
(7,927)
Post retirement medical benefits paid
Net cash flow from / (used in) operating activities
(314)
4,634,356
(3,314,501)
(977,992)
(653,944)
(2,816)
(1,797)
CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from disposal of property, plant and equipment
600
1,053
Return on treasury bills received
199,392
496,604
Return received on bank accounts
558,259
855,789
(222,557)
697,705
Net cash flow (used in) / from investing activities

CASH FLOWS FROM FINANCING ACTIVITIES
Dividend paid
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
33
(1,195,924)
(1,993,165)
3,215,875
(4,609,961)
13,278,525
17,888,486
16,494,400
13,278,525
Chief Executive
56
Director
STATEMENT OF CHANGES IN EQUITY

SHARE
CAPITAL RESERVES
CAPITAL
Issued,
Capital
Exchange
subscribed compensation equalisation
and paid-up
reserve
reserve
REVENUE RESERVES
General
Unappropriated
reserve
profit
Special
reserve
(note 16.2)
Total
3,869,068
24,607,175
(note 16.1)
Balance as at July 1, 2011
799,666
10,142
4,117
13,988,000
Profit for the year

for the year

for the year
Transfer to general reserve
Final dividend for the year

ended June 30, 2011
- Rs. 25 per share
Loss after tax from fuel refinery

operations transferred to
special reserve - note 16.2
3,900,000
5,936,182
2,618,384
-
2,618,384
(3,900,000)
(1,999,164)
117,324
2,618,384
-
2,618,384
-
(1,999,164)
(117,324)
Balance as at June 30, 2012
799,666
10,142
4,117
17,888,000
2,772,726
3,751,744
25,226,395
Balance as at July 1, 2012
799,666
10,142
4,117
17,888,000
2,772,726
3,751,744
25,226,395
Profit for the year

for the year

for the year
Transfer to general reserve
Final dividend for the year

ended June 30, 2012
- Rs. 15 per share
10,142
4,117
Balance as at June 30, 2013
799,666
1,573,000
19,461,000
2,844,457
-
2,844,457
(1,573,000)
(1,199,498)
2,844,685
2,844,457
3,751,744
2,844,457
-
(1,199,498)
26,871,354
Chief Executive
Director
Annual Report 2013
57
NOTES TO AND FORMING

PART OF THE FINANCIAL STATEMENTS
1.
LEGAL STATUS AND OPERATIONS

National Refinery Limited was incorporated in Pakistan on August 19, 1963 as a public limited company and its
shares are listed on the Karachi, Lahore and Islamabad Stock Exchanges in Pakistan. The registered office of the
Company is situated at 7-B, Korangi Industrial Area, Karachi, Pakistan.
The Company is engaged in the manufacturing, production and sale of large range of petroleum products. The
refinery complex of the Company comprises of three refineries, consisting of two lube refineries, commissioned in
1966 and 1985, and a fuel refinery added to the complex in 1977.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation

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 (IASB) 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.
2.2 Critical accounting estimates and judgments
The preparation of financial statements in conformity with approved accounting standards requires the use of
certain critical 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.
Taxation
The Company recognises provision for income tax based on best current estimates. However, where the
final tax outcome is different from the amounts that were initially recorded, such differences impact the
income tax provision in the period in which such determination is made.
ii.
Post employment benefits

Significant estimates relating to post employment benefits are disclosed in note 17.
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
Management believes that the change in outcome of estimates would not have a material impact on the amounts
disclosed in the financial statements.
No critical judgement has been used in applying the accounting policies.
58

2.3 Change in accounting policy and disclosures
During the year the Securities and Exchange Commission of Pakistan has notified certain amendments in the
Fourth Schedule to the Companies Ordinance, 1984, which specifically classifies major parts and stand-by
equipment into property, plant and equipment.
2012
2013
Reclassification from
Reclassification to
Fixed assets - note 3.2
149,193
162,118
The change in the requirement is considered to be a change in accounting policy and has been applied
retrospectively to all prior periods presented. As there is no material effect in the information in the balance
sheet at the beginning of the earliest period presented, the Company has not presented that balance sheet.
2.4 New and amended standards and interpretations that are effective in the current year
There are no new amended standards and interpretations that have been published and are mandatory for
accounting periods on or after July 1, 2012 that would have a material effect on the Company's operations
and are, therefore, not detailed in these financial statements.
2.5 Standards, interpretations and amendments to published approved accounting standards that are considered
relevant, but not yet effective
-
IAS 19 (amendment) - 'Employee Benefits', is effective for accounting periods beginning on or after
January 1, 2013. It eliminates the corridor approach and recognises all actuarial gains and losses in the
other comprehensive income as they occur, immediately recognises all past service cost and replaces
interest cost on the defined benefit obligation and the expected return on plan assets with a net interest
cost based on the net defined benefit asset or liability and the discount rate, measured at the beginning of
the year. The application of these amendments would result in the recognition of cumulative unrecognised
actuarial gains / losses as at July 1, 2013 as disclosed in note 17 in other comprehensive income in the
financial statements for the year ending June 30, 2014.
There are no other standards, amendments to existing approved accounting standards and new interpretations
that are not yet effective that would be expected to have a material impact on the financial statements of
the Company.
2.6 Overall Valuation Policy
These financial statements have been prepared under the historical cost convention except as otherwise
disclosed in the respective accounting policies notes.
Annual Report 2013
59

2.7 Property, plant and equipment

These are initially recognised at cost and are subsequently carried at cost less accumulated depreciation and
impairment, if any, except major spare parts and stand-by equipments which are stated at cost less accumulated
impairment, if any, and capital work-in-progress, which are stated at cost.
Major spare parts and stand-by equipment which qualify as property, plant and equipment when an entity expects
to use them during more than one year. Transfers are made to relevant operating assets category as and when
such items are available for use.
Capital work-in-progress consists of expenditure incurred and advances made in respect of tangible and
intangible assets in the course of their construction and installation. Transfers are made to relevant operating
assets category as and when assets are available for use.
Depreciation is charged to income using the straight-line method whereby the cost of an asset is written off over
its estimated useful life at the rates stated in note 3.1 to the financial statements. Depreciation on additions is
charged from the month in which the asset is put to use and on disposals up to the month immediately
preceding the disposal. Assets residual values and useful lives are reviewed, and adjusted if appropriate,
at each balance sheet date.
The carrying value of operating assets are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable. If any such indication exists and where the carrying
values exceed the estimated recoverable amount, the assets are written down to their recoverable amount.
Maintenance and normal repairs are charged to income as and when incurred. Major renewals and improvements
are capitalised and the assets so replaced, if any, are retired.
Gains and losses on disposal or retirement of property, plant and equipment are recognised in income currently.
2.8 Intangible assets
An intangible asset is recognised if it is probable that future economic benefits attributable to the asset will flow
to the Company and that the cost of such asset can be measured reliably. These are stated at cost less
accumulated amortisation and impairment, if any.
Costs that are directly associated with identifiable software and have probable economic benefits exceeding the
cost beyond one year, are recognised as intangible asset. Direct costs include the purchase cost of software,
implementation cost and related overhead cost.
Intangible assets are amortised using the straight-line method over a period of three years or license period,
whichever is shorter.
60

The carrying value of intangible assets are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable. If any such indication exists and where the carrying
value exceed the estimated recoverable amount, the assets are written down to their recoverable amount.
2.9 Investments
The Company determines the appropriate classification of its investment at the time of purchase.
Investment in securities which are intended to be held for an undefined period of time are classified as available
for sale. These are initially measured at fair value including the transaction costs. Subsequent measurement of
investments whose fair value can be reliably measured is stated at fair value with gains or losses taken to
other comprehensive income.
Available for sale investments in unlisted securities whose fair value can not be reliably measured are carried
at cost less impairment, if any.
Investments with fixed payments and maturity that the Company has positive intent and ability to hold till
maturity are classified as held-to-maturity investments. These are measured at amortised cost using effective
interest method.
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. In the case of investments in open ended mutual
funds, fair value is determined on the basis of period end Net Asset Value (NAV) as announced by the
Asset Management Company.
Impairment, if any is charged to profit and loss account.
2.10 Stores, spares and chemicals
Stores, spares and chemicals, except items in transit, are stated at moving average cost. Cost comprises invoice
value and other direct costs. Provision is made for slow moving and obsolete items wherever necessary.
Items in transit are valued at cost comprising invoice value plus other charges incurred thereon.
2.11 Stock-in-trade
Stock of crude oil is valued at lower of cost, determined on a First-In-First-Out (FIFO) basis and net realisable
value. Crude oil in transit is valued at cost comprising invoice value plus other charges incurred thereon.
Annual Report 2013
61

Stocks of semi-finished and finished products are valued at lower of cost, determined on a FIFO basis and net
realisable value. Cost in relation to semi-finished and finished products represents cost of crude oil and an
appropriate portion of manufacturing overheads.
Net realisable value signifies the estimated selling price in the ordinary course of business less costs
necessarily to be incurred to make the sale.
2.12 Trade debts and other receivables
Trade debts and other receivables are carried at invoice value less a provision for impairment. A provision for
impairment is established when there is objective evidence that the Company will not be able to collect all
amounts due according to the original terms of receivables. Trade debts and other receivables considered
irrecoverable are written-off.
2.13 Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at cost. For the purposes of the cash flow
statement, cash and cash equivalents comprise cash in hand, balances with banks on current, savings and
deposit accounts, short-term investments with original maturities of three months or less, running finance
under mark-up arrangements and short-term finance.
2.14 Staff retirement benefits
2.14.1 Defined contribution plan
The Company operates an approved contributory provident fund for all employees. Equal monthly contributions
are made, both by the Company and the employees, to the fund at the rate of 10% per annum of the basic
salary.
2.14.2 Defined benefit plans
The Company operates the following schemes:
i)
Funded pension scheme for permanent, regular and full time managerial and supervisory staff of the
Company who joined prior to January 01, 2012. Contributions are made to the fund on the basis of actuarial
valuation and are charged to income. The most recent valuation of the scheme was carried out as at
June 30, 2013, using the Projected Unit Credit Method.
ii)
Funded gratuity scheme for non-management permanent employees of the Company. Provision is made
annually to cover obligations under the scheme, as per actuarial valuation. The most recent valuation of the
scheme was carried out as at June 30, 2013, using the Projected Unit Credit Method.
iii) Funded medical scheme for its management employees who joined the Company prior to
1 September 2006. Provision is made annually to cover obligations under the scheme, by way of a charge
to income, calculated in accordance with the actuarial valuation. The most recent valuation of the scheme
was carried out as at June 30, 2013, using the Projected Unit Credit Method.
62

iv) A gratuity scheme for management employees of the Company joining on or after January 1, 2012.
Provision is made annually to cover obligations under the scheme, as per actuarial valuation. The most
recent valuation of the scheme was carried out as at June 30, 2013, using the Projected Unit Credit
Method. The Company is in the process of establishing the Fund for the scheme for which the approval
will be obtained from Commissioner Inland Revenue.
Cumulative net unrecognised actuarial gains and losses at the beginning of the year which exceed 10% of the
greater of the present value of the obligations and the fair value of respective fund's assets are amortised over
the average remaining working lives of employees participating in the plan.
2.15
Compensated absences
The Company accounts for compensated absences on the basis of unavailed leave balance of each employee
at the end of the year.
Provisions are made to cover the obligations under the scheme on the basis of actuarial valuation and are
charged to income. The most recent valuation was carried out as at June 30, 2013 using the 'Projected Unit
Credit Method'.
2.16

Trade and other payables are carried at fair value of the consideration to be paid for goods and services.
2.17
Provisions
Provisions are recognised when the Company has a legal or constructive obligation as a result of past events,
and it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at
each balance sheet date and adjusted to reflect the current best estimates.
2.18
Taxation
2.18.1 Current
The charge for current taxation is based on the taxable income for the year, determined in accordance with the
prevailing law for taxation on income, using prevailing tax rates after taking into account tax credits and rebates
available, if any.
2.18.2 Deferred
Deferred tax is accounted for using the liability method on all temporary differences arising between tax base
of assets and liabilities and their carrying amounts in the financial statements. Deferred tax liability is generally
recognised for all taxable temporary differences and deferred tax asset is recognised to the extent that it is
probable that future taxable profits will be available against which the deductible temporary differences,
unused tax losses and tax credits can be utilised. Deferred tax is charged or credited in the profit and loss
account. Deferred income tax is determined using tax rates and prevailing law for taxation on income that
have been enacted or substantively enacted by the balance sheet date and are expected to apply when the
related deferred income tax asset is realised or the deferred income tax liability is settled.
Annual Report 2013
63

2.19
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and
the revenue can be reliably measured. Revenue is recognised as follows:
a) Local sales of products delivered through pipelines are recorded when products passes through pipelines
flange. Sale of products loaded through gantry is recognised when products are loaded into tank lorries.
b) Export sales are recorded on the basis of products delivered to tankers.
c) Handling and storage income, pipelines charges, scrap sales, insurance commission and rental income
are recognised on accrual basis.
d) Return / Interest on bank deposits and advances to employees are recognised on accrual basis.
e) Return / Interest on treasury bills is recognised using the effective interest method.
f) Dividend income is recognised as income when the right of receipt is established.
2.20
Borrowing cost
Borrowing costs are recognised as an expense in the period in which these are incurred except where such
costs are directly attributable to the acquisition, construction or production of a qualifying asset in which case
such costs are capitalised as part of the cost of that asset.
2.21
Foreign currency transactions and translation

The financial statements are presented in Pak Rupees which is the Companys functional and presentation
currency.
Transactions in foreign currencies are converted into Pak Rupees using the exchange rates prevailing on the
dates of the transactions. All monetary assets and liabilities denominated in foreign currencies are translated
into Pakistan Rupees using the exchange rates prevailing on the balance sheet date. Exchange differences
are taken to income currently.
64

2.22
Financial assets and liabilities

All financial assets and liabilities are initially measured at cost, which is the fair value of the consideration given
and received respectively. These financial assets and liabilities are subsequently measured at fair value,
amortised cost or cost, as the case may be.
A financial asset and a financial liability is offset and the net amount is reported in the balance sheet if the
Company has a legally enforceable right to set-off the recognised amount and intends either to settle on a
net basis or to realise the asset and settle the liability simultaneously.
2.23
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources
and assessing performance of the operating segments, has been identified as Chief Executive Officer
of the Company.
2.24
Dividends and appropriation to general reserve

Dividends and appropriation to general reserves are recognised in the financial statements in the period in
which these are approved.
(Restated)
2012
2013
3.
FIXED ASSETS
Property, plant and equipment
- Operating assets - note 3.1
- Major spare parts and stand-by
equipments - note 3.2
- Capital work-in-progress - note 3.3
Intangible assets - note 3.4
2,977,683
2,939,577
149,193
162,118
1,232,954
592,552
4,359,830
3,694,247
3,106
1,484
4,362,936
3,695,731
Annual Report 2013
65

3.1 Operating assets

Leasehold
land
(note 3.1.1)
Buildings
on
leasehold
land
Oil terminal
Processing
plant and
storage tanks
Power
generation
plant
Pipelines
Water, power
and other
utilities
Vehicles
Furniture
and
fixtures
Computers
and other
related
accessories
Office and
other
equipments
Total
Year ended June 30, 2013

Opening net book value
47,225
184,835
406,267
1,165,551
96,013
190,771
441,413
13,440
5,275
8,721
380,066
2,939,577
Additions including
transfers - note 3.1.2
8,329
4,081
178,037
11,460
11,583
69,335
5,519
730
4,042
53,213
346,329
(1,765)
(68)
(1,833)
1,750
60
1,810
(8)
(23)
(3,918)
(33,554)
(308,200)
Disposals
Cost
Depreciation
(15,084)
(32,370)
(36,874)
(24,195)
(40,234)
(4,305)
46,625
178,080
377,978
1,227,299
70,599
178,159
470,514
14,639
5,228
8,845
399,717
2,977,683
60,035
412,960
667,212
5,134,103
758,753
411,964
1,331,253
79,642
12,607
55,755
664,800
9,589,084
(13,410)
(234,880)
(289,234)
(3,906,804)
(688,154)
(233,805)
(860,739)
(65,003)
(7,379)
(46,910)
(265,083)
(6,611,401)
46,625
178,080
377,978
1,227,299
70,599
178,159
470,514
14,639
5,228
8,845
399,717
2,977,683
Opening net book value
47,825
196,282
381,124
1,192,595
136,596
186,807
470,416
14,372
5,394
4,442
367,626
3,003,479
Additions including
transfers - note 3.1.2
3,521
56,550
75,422
26,563
8,161
4,344
655
7,469
41,071
223,756
Cost
(1,890)
(3,848)
(5,501)
(11,239)
Depreciation
1,618
3,842
5,485
10,945
(14,968)
(31,407)
(40,583)
(22,599)
(37,164)
(5,004)
47,225
184,835
406,267
1,165,551
96,013
190,771
441,413
13,440
60,035
404,631
663,131
4,956,066
747,293
400,381
1,261,918
(12,810)
(219,796)
(256,864)
(3,790,515)
(651,280)
(209,610)
47,225
184,835
406,267
1,165,551
96,013
190,771
Depreciation charge
Closing net book value
(600)
(116,289)
(15)
(777)
As at June 30, 2013

Cost
Accumulated depreciation
Net book value
Year ended June 30, 2012
Disposals
Depreciation charge
Closing net book value
(600)
(102,466)
(272)
(6)
(16)
(294)
(3,184)
(28,615)
(287,364)
5,275
8,721
380,066
2,939,577
75,888
11,877
51,713
611,655
9,244,588
(820,505)
(62,448)
(6,602)
(42,992)
(231,589)
(6,305,011)
441,413
13,440
5,275
8,721
380,066
2,939,577
(774)
As at June 30, 2012

Cost
Accumulated depreciation
Net book value
Annual Rate of
Depreciation %
66
5 to 8
5 & 33.33
6 & 33.33
20
7.5
33.33
5 to 15

3.1.1
Leasehold land includes land subleased / licensed to the following lessees / licensees:
Pak-Hy Oils (Private) Limited

Chevron Pakistan Limited
Pakistan State Oil Company Limited
PERAC Research & Development Foundation
Petroleum Packages (Private) Limited
Anoud Power Generation Limited
The carrying value of each of the above is immaterial.

3.1.2
During the year, the following amounts have been transferred from capital work-in-progress (note 3.3) to
operating assets (note 3.1):
2012
2013
Buildings on leasehold land
8,329
3,521
Oil terminal
2,307
56,550
Processing plant and storage tanks
187,715
75,422
Pipelines
11,583
26,563
Water power and other utilities
64,474
8,161
Office and other equipments
32,347
24,604
306,755
194,821
(Restated)
2012
2013
3.2
MAJOR SPARE PARTS AND STAND-BY

EQUIPMENTS
Gross carrying value
Balance at beginning of the year
Additions during the year
283,801
227,428
96,377
114,454
Transfers made during the year
(105,116)
(58,081)
Balance at end of the year
275,062
283,801
Provision for impairment - note - 3.2.1
(125,869)
(121,683)
Net carrying value
149,193
162,118
3.2.1 During the year net charge of Rs. 4.19 million (2012: Rs. 9.61 million) was booked.
Annual Report 2013
67

3.3
Capital work-in-progress
Opening balance
592,552
231,276
947,157
556,097
(306,755)
(194,821)
Transfers during the year - note 3.1.2

Closing balance - note 3.3.1
3.3.1
2012
2013
1,232,954
592,552
As at June 30, 2013 and 2012, capital work-in-progress represents:

2013
2012
Buildings on leasehold land
Oil terminal
Refineries upgradation projects - note 3.3.1.1 and 16.3
Processing plant and storage tanks
7,995
1,096,437
451,158
40,318
48,842
6,188
8,588
Water power and other utilities
3,388
12,792
39,233
19,355
Advances to contractors / suppliers
3.4
4,292
Pipelines
Office and other equipments
3.3.1.1
2,823
14,642
29,925
39,530
1,232,954
592,552
This relates to cost associated with front end engineering designs and process licenses in relation to the fuel
and lube refineries upgradation projects. These projects have been undertaken; (i) to comply with the
government's directives to produce High Speed Diesel with low sulphur contents and; (ii) to enhance
Company's profitability on a sustainable basis.
INTANGIBLE ASSETS Computer softwares
2013
2012
Net carrying value

Balance at beginning of the year
1,484
35
2,816
1,797
(1,194)
3,106
(348)
1,484
Amortisation for the year

Gross carrying value
Cost
Accumulated amortisation
Net book value
Amortisation is charged at the rate of 33.33% per annum.
68
55,449
52,633
(52,343)
3,106
(51,149)
1,484

4.
LONG TERM INVESTMENT
2013
2012
Available for sale
5.
Anoud Power Generation Limited

[1,080,000 (2012: 1,080,000) Ordinary shares of
Rs.10 each, Equity held 9.09 percent
(2012: 9.09 percent)]
10,800
10,800
Less: Provision for impairment
10,800
10,800
- Executives
48,703
56,001
- Employees
18,440
67,143
25,049
81,050
- Executives
13,524
13,195
- Employees
2,547
16,071
51,072
3,577
16,772
64,278
- Executives
388
649
- Employees
1,491
1,879
1,002
1,651
- Executives
207
260
- Employees
502
709
1,170
256
516
1,135
52,242
65,413
LONG TERM LOANS

Loans - considered good
Secured - note 5.2
Less: Recoverable within one year shown under

current assets - note 10
Unsecured - note 5.3
Less: Recoverable within one year shown under

current assets - note 10
Annual Report 2013
69

5.1
Reconciliation of the carrying amount of loans:

2013
Executives Employees
Balance at beginning of
the year
Effect of promotions
to Executives
Add: Disbursements
Less: Recoveries
2012
Total
Executives
Employees
Total
56,650
26,051
82,701
37,879
40,920
78,799
5,024
(5,024)
15,167
(15,167)
4,620
2,870
7,490
16,075
8,000
24,075
(17,203)
(3,966)
(21,169)
(12,471)
(7,702)
(20,173)
49,091
19,931
69,022
56,650
26,051
82,701
5.2 The secured loans to executives and employees are for the purchase of motor cars and house building. These
are granted in accordance with the terms of their employment and are recoverable in monthly instalments over
a period ranging between 5 to 10 (2012: 5 to 10) years. Certain of these loans are interest free, whereas others
carry interest ranging from 3% to 7% (2012: 3% to 7%) per annum in case of motor car loans and 5%
(2012: 5%) per annum in case of house loans. These loans are secured against original title documents of
respective assets.
5.3 The unsecured loans to executives and employees are either personal loans or given for the purchase of
furniture and motor cycles. These are granted in accordance with the terms of their employment and are
recoverable in monthly instalments over a period of 4 to 12 (2012: 4 to 12) years and are interest free.
6.
LONG TERM DEPOSITS

Utilities
Others
7.
STORES, SPARES AND CHEMICALS

In hand
- Stores - note 7.1
- Spares
- Chemicals
In transit
Provision for slow moving and obsolete stores,
spares and chemicals - note 7.2
70
2013
2012
14,216
15,973
14,216
15,973
30,189
30,189
(Restated)
2013
2012
268,358
788,730
111,281
1,168,369
491,555
781,176
102,866
1,375,597
45,920
1,214,289
56,397
1,431,994
(426,211)
(445,426)
788,078
986,568

2013
2012
7.1
Includes stores held with the following third parties:

-
20,071
- Karachi Containers & Engineering (Pvt.) Limited
6,930
17,332
- Esquire Packaging Company (Pvt.) Limited
8,731
11,252
- Continental Engineering Services (Pvt.) Limited
12,567
- Mema Packages
11,450
39,678
48,655
- Petroleum Packages (Pvt.) Limited
7.2
The Company made a reversal of provision for slow moving and obsolecence of
Rs.19.22 million (2012: Nil).
2013
2012
8.
STOCK-IN-TRADE
Crude oil and condensate [including
in transit Rs. 156.35 million
(2012: Rs. 70.68 million )]
5,796,476
6,578,110
Semi finished products - note 8.1
2,906,729
5,091,602
13,860,549
13,689,998
22,563,754
25,359,710
Finished products - notes 8.1, 8.2 and 8.3
8.1
During the year ended June 30, 2013, the Company changed its cost estimation formula for
valuation of stock-in-trade from weighted average to First-In-First-Out (FIFO) basis to be
consistent with industry and maintenance practice of inventory. Had the cost formula not
been changed, profit before tax for the year and stock-in-trade would have been lower
by Rs. 250.78 million.
8.2
As at June 30, stock of finished goods has been written

(2012: Rs. 870.96 million) to arrive at its net realisable value.
8.3
Includes stocks held with the following third parties:
down by Rs. 32.36 million

2013
2012
- Karachi Bulk Storage & Terminals (Pvt.) Limited
402,025
- Eastern Joint Hydrant Depot
107,547
83,970
50,094
- Pakistan State Oil Company Limited

- Al-Rahim Tank Terminal Services (Pvt.) Limited
344,319
544,633
593,542
939,046
Annual Report 2013
71

9.
TRADE DEBTS - unsecured
2013
2012
Considered good
- Related party - Attock Petroleum Limited - note 9.1
6,714,759
1,459,794
- Others - note 9.2
4,262,233
11,802,390
Considered doubtful
21,174
10,998,166
21,174
13,283,358
Provision for doubtful debts
(21,174)
10,976,992
9.1
There are no trade debts receivable from related party that are past due or impaired.
9.2
The age analysis of debt past due but not impaired is as follows:
(21,174)
13,262,184
2013
2012
Up to 3 months
3 to 6 months
2,456
305,638
-
10,441
8,834,985
13,524
2,547
16,071
13,195
3,577
16,772
- Executives
207
260
- Employees
502
256
709
516
715
782
1,147
1,712
15,922
18,781
36,276
1,963
1,754
18,340
22,057
40,127
More than 6 months

10.
39,514
LOANS AND ADVANCES

Loans - considered good
Current portion of long term loans - note 5
Secured
- Executives
- Employees
Unsecured
Short term loans to employees - unsecured,

interest free
Advances
- Executives
- Employees
- Suppliers
72

2013
2012
11.
TRADE DEPOSITS AND SHORT-TERM

PREPAYMENTS
Deposits
598
335
886
6,737
7,623
732
5,599
6,331
8,221
6,666
Prepayments
- Insurance
- Others
12.
OTHER RECEIVABLES considered good

Receivable from related parties:
- Attock Petroleum Limited
4,894
8,811
1,712
232,809
232,809
- Claims receivable
1,251
1,251
- Margin against letters of credit
4,283
6,306
- Attock Refinery Limited

Others:
- Government of Pakistan - note 12.1
- Insurance rebate receivable

- Others - note 12.2
4,171
22,663
1,877
274,711
248,126
12.1
This represents price differential claims receivable from Government of Pakistan. On behalf
of oil refineries, Oil Companies Advisory Committee (OCAC) has presented the claims
before the Ministry of Petroleum & Natural Resources, which are under review.
12.2
This includes deposit with Sindh High Court as per Court's Order on account of dispute with
Karachi Water and Sewerage Board amounting to Rs. 21.07 million (2012: Nil).
2013
2012
13.
FINANCIAL ASSET - INVESTMENTS

Held to maturity
3 months treasury bills - at amortised
cost - note 13.1
13.1
492,524
3,230,473
These are held by Company's banker on behalf of the Company. The yield on these bills
ranges from 9.23% to 9.37% (2012: 11.87% to 11.92%) per annum and these bills will
mature from August 2013 and September 2013.
Annual Report 2013
73

2013
2012
14.
CASH AND BANK BALANCES

In hand
500
500
99,350
6,863,890
38,662
6,248,730
9,041,135
16,004,375
3,790,662
10,078,054
16,004,875
10,078,554
With banks on:

Current accounts
Savings accounts - note 14.2
Deposit accounts
- local currency - notes 14.1 and 14.2
14.1
These will mature from July 2013 to June 2014 and includes Rs. 345.64 million
(2012: Rs. 290.66 million) under lien with banks against bank guarantees issued on behalf of the
Company.
14.2
These carry interest at the rates varying from 6% to 11.90% (2012: 6% to 12.75%) per annum.
15.
SHARE CAPITAL
2013
2012
Number of shares
Authorised
100,000,000
Ordinary shares of Rs. 10 each
1,000,000
1,000,000
Issued, subscribed and paid-up

59,450,417
Ordinary shares of
Rs. 10 each fully paid in cash
594,504
594,504
6,469,963
Ordinary shares of
Rs. 10 each issued for
consideration other than cash
64,700
64,700
140,462
140,462
799,666
799,666
14,046,180
Ordinary shares of
Rs. 10 each issued as fully
paid bonus shares
79,966,560
15.1
As at June 30, 2013 and 2012, Attock Group holds 51% equity stake in the Company through
the following companies:
2013
2012
(Number of shares)
74
- Attock Refinery Limited
19,991,640
19,991,640
- Pakistan Oilfields Limited
19,991,640
19,991,640
- Attock Petroleum Limited
799,665
799,665

16.
RESERVES
2013
2012
Capital reserves
Capital compensation reserve - note 16.1
10,142
10,142
Exchange equalisation reserve
4,117
14,259
4,117
14,259
General reserve
19,461,000
17,888,000
Unappropriated profit
2,844,685
22,305,685
2,772,726
20,660,726
3,751,744
26,071,688
3,751,744
24,426,729
Revenue reserves
Special reserve - note 16.2 and 16.3

16.1
Capital compensation reserve includes net amounts for (a) premature termination of crude
oil sales, bareboat charter-party and technical assistance agreements, (b) design
defects and terminated service agreements and (c) termination of bareboat charter-party
and affreightment agreements.
16.2
As per the Import Parity Pricing formula, effective July 1, 2002, certain refineries including
the Company have been directed to transfer from their net profit after tax for the year from
fuel refinery operations, an amount in excess of 50% of the paid-up share capital, as on
July 1, 2002 attributable to fuel segment, to offset against any future losses or to make
investment for expansion or up-gradation and is therefore not available for distribution.
During the year Government of Pakistan issued a policy framework for up-gradation and
expansion of refinery project which interalia states that:
-
refineries will not be allowed to offset losses, if any, for year ending June 30, 2013 or
subsequent years against the amount of profit above 50% accumulated or to be
accumulated in the Special Reserve Account as per current pricing formula; and
the amount of profits above 50% will be accumulated in the Special Reserve account
as per the pricing formula (including unutilised balance), which shall along with
amounts presently available with refineries be deposited on half yearly basis (with final
adjustment on annual basis) in an ESCROW Account to be operated jointly with
Finance Division and shall be available for utilisation exclusively for up-gradation of
refineries.
Based on above the Company has not offset loss for the year ended June 30, 2013 on fuel
refinery operations and is in discussions with Ministry of Petroleum about the opening of
ESCROW Account.
16.3
The Company has incurred capital expenditure of

Rs. 1,096.44 million
(2012: Rs. 451.16 million) on up-gradation and expansion projects. It includes
Rs. 912.56 million (2012: Rs. 154.36 million) for the up-gradation and expansion of fuel
refinery operations.
Annual Report 2013
75

17. RETIREMENT BENEFIT OBLIGATIONS
The details of staff retirement benefits are as follows:
Pension
Fund
17.1
Present value of defined benefit obligations
Funded status
Unrecognised net actuarial gain / (loss)
Recognised liability
Gratuity
Fund
2012
Medical
Fund
Gratuity
Un-funded
3,871,133
128,810
840,730
(3,574,309)
(90,649)
(780,502)
795
-
3,264,638
118,209
786,802
(3,252,080)
(73,844)
(712,300)
296,824
38,161
60,228
795
12,558
44,365
74,502
(190,450)
(24,335)
104,543
(377)
69,142
(37,292)
60,082
106,374
13,826
164,771
418
81,700
7,073
134,584
80
80
80
81,700
7,073
134,584
80
70,604
4,374
104,879
Charge for the year
94,452
13,970
30,187
338
85,381
10,626
30,019
(69,778)
(7,217)
(74,285)
(7,927)
106,374
13,826
164,771
418
81,700
7,073
134,584
80
87,931
5,314
14,082
288
83,020
4,325
13,578
77
406,113
16,557
105,301
394,539
13,377
104,778
(399,592)
(9,599)
(89,196)
(392,178)
(8,296)
(88,337)
1,698
1,220
94,452
13,970
30,187
338
85,381
10,626
30,019
(314)
80
-
Charge for the year

Current service cost
Interest cost
Expected return on plan assets
Net actuarial loss recognised
during the year
50
80
Movement in present value of defined

benefit obligations
3,264,638
118,209
786,802
80
2,938,458
90,789
728,221
Service cost
87,931
5,314
14,082
288
83,020
4,325
13,578
Interest cost
406,113
16,557
105,301
50
394,539
13,377
104,778
Benefits paid
(185,830)
(1,448)
(23,855)
298,281
(9,822)
(41,600)
377
20,271
Opening balance
Actuarial loss / (gain)

Present value of defined benefit
obligations at the end of the year
17.5
Gratuity
Pension
Un-funded
Fund
(note - 2.14.2)
Liability at beginning of the year
Contribution paid to the fund
17.4
Medical
Fund
Movement in liability
Liability at end of the year

17.3
2013
Reconciliations of obligations
Fair value of plan assets
17.2
Gratuity
Fund
(171,650)
(643)
77
3
(21,691)
10,361
(38,084)
3,871,133
128,810
840,730
795
3,264,638
118,209
786,802
3,252,080
73,844
712,300
2,950,214
59,039
651,744
80
Movement in fair value of plan assets

Opening balance
399,592
9,599
89,196
392,178
8,296
88,337
Contributions
69,778
7,217
74,285
7,927
314
Benefits paid
(185,830)
(1,448)
(23,855)
(171,650)
38,689
1,437
2,861
7,053
3,574,309
90,649
780,502
3,252,080
73,844
712,300
438,281
11,036
92,057
372,926
7,521
75,883
Expected return
Actuarial gain / (loss)

Fair value of plan assets at the end
of the year
Actual return on plan assets
76
(643)
(21,691)
(775)
(6,404)

17.6
2013
Historical information
2012
2011
2010
2009
PENSION FUND
As at June 30
Present value of defined benefit obligation
3,871,133
3,264,638
2,938,458
2,478,854
2,312,535
(3,574,309)
(3,252,080)
(2,950,214)
(2,659,526)
(2,396,530)
12,558
(11,756)
(180,672)
(83,995)
Deficit / (Surplus)
296,824
Experience (gain) / loss on obligation
298,281
20,271
223,123
(8,813)
(104,285)
37,485
(19,252)
104,861
67,285
(148,795)
128,810
118,209
90,789
73,659
53,946
(90,649)
(73,844)
(59,039)
(47,721)
(62,950)
(9,004)
Experience gain / (loss) on plan assets

GRATUITY FUND
As at June 30
Deficit / (Surplus)
38,161
44,365
31,750
25,938
(9,822)
10,361
12,092
11,105
2,681
1,006
(1,199)
(15,500)
1,437
(775)
MEDICAL FUND
As at June 30
Deficit
17.7
Major categories / composition of plan assets are as follows:

Pension
2013
2012
786,802
728,221
645,699
581,215
(712,300)
(651,744)
(551,351)
(534,593)
60,228
74,502
76,477
94,348
46,622
(41,600)
(38,084)
7,611
6,556
(39,626)
2,875
(12,454)
5,708
(39,896)
(41,160)
Gratuity
2013
2012
Medical fund
2013
2012
Gratuity (un-funded)
2013
2012
89.34%
90.76%
90.79%
88.66%
63.46%
47.86%
Equity
2.93%
2.75%
7.86%
6.78%
0.00%
0.00%
Mixed funds
7.73%
6.33%
0.00%
0.00%
36.50%
34.60%
Others
0.00%
0.16%
1.35%
4.56%
0.04%
17.54%
Debt Instrument
17.8
840,730
(780,502)
Principal actuarial assumptions

Rate of discount
11.00% p.a
13.50% p.a
11.00% p.a
13.50% p.a
11.00% p.a
13.50% p.a
11.00% p.a
13.50% p.a
Expected rate of increment of salary /

increase in cost
- Three succeeding year's after valuation
- Long term increase
Expected rate of increase in pension
Expected rate of return on assets
Expected retirement age
17.9
8.00% p.a
10.00% p.a
10.00% p.a
12.50% p.a
8.00% p.a
10.50% p.a
10.00% p.a
12.50% p.a
10.00% p.a
12.50% p.a
10.00% p.a
12.50% p.a
8.00% p.a
10.50% p.a
10.00% p.a
12.50% p.a
5.00% p.a
6.50% p.a
11.00% p.a
12.50% p.a
11.00% p.a
12.50% p.a
11.00% p.a
12.50% p.a
60 years
60 years
60 years
60 years
60 years
60 years
The effects of a 1% movement in the assumed medical cost trend rate are as follows:
Effect on the aggregate of current service cost and interest cost

Effect on the defined benefit obligation
60 years
60 years
Increase
Decrease
16,203
13,272
126,680
104,424
2013
2012
The average life expectancy in years of a pensioner retiring at age 60 on

the balance sheet date is as follows:
17.10
Male
16.8
16.8
Female
21.2
21.2
The expected contributions to the plans for the coming year are as follows:
Pension fund
98,350
Gratuity fund
9,876
Medical fund
20,750
Gratuity (un-funded)
17.11
Years
Information in note 17 is based on actuarial advice.
1,548
Annual Report 2013
77

2013
2012
18.
DEFERRED TAXATION
Credit / (Debit) balances arising in respect of:
- accelerated tax depreciation and amortisation
553,179
548,001
(164,430)
(171,891)
(63,803)
(64,930)
Provisions for:
- slow moving and obsolete stores,
spares and chemicals
- duties and taxes
19.
- long term investment, doubtful debts, doubtful

receivables, staff retirement benefits,
pending litigations and others
(108,687)
(59,510)
- old outstanding liabilities offered for tax
(135,971)
(79,023)
(472,891)
(375,354)
80,288
172,647
20,986,932
25,927,544
925,163
1,107,730
TRADE AND OTHER PAYABLES

Trade creditors
Due to Government of Pakistan
Due to related party - Attock Petroleum Limited
Accrued liabilities
Surplus price differential payable - note 19.1
Sales tax payable
273,297
626,493
675,351
Retention money
15,247
12,207
Deposits from contractors
30,486
27,981
309,242
470,284
Workers profits participation fund - note 19.2

Workers' welfare fund
Income tax deducted at source
Unclaimed dividend
Excise duty and petroleum levy
Others
78
709,788
1,960,272
Advances from customers
19.1
36,687
16,256
14,091
138,914
122,750
5,106
10,476
63,910
60,336
1,067,669
690,160
7,491
3,488
26,546,460
29,748,891
This represents amount to be deposited in Inland Freight Equalisation Margin pool in respect of surplus of High
Speed Diesel (HSD) price as per Pakistan State Oil Limited's (PSO) actual import price excluding ocean losses
over HSD price based on import price parity formula in accordance with the Economic Coordination
Committee's decision dated February 26, 2013.

19.2
Workers profits participation fund

Payable / (Receivable) at beginning of the year
Allocation for the year - note 28
Interest on funds utilised in the
Companys business - note 29
Amount paid to the Trustees of the Fund
(11,373)
239,091
2,041
257,388
227,718
(241,132)
(213,627)
14,091
194,220
217,181
411,401
194,220
204,685
398,905
Claim by the Government - note 20.1.1
165,214
165,214
Sales tax and central excise duty - note 20.1.2
29,006
194,220
29,006
194,220
PROVISIONS
Duties and taxes - note 20.1
Others - note 20.2
20.1
14,091
241,256
16,256
Payable at end of the year

20.
2013
2012
These represent provisions for:
20.1.1
This represents amount claimed by the Government of Pakistan (GoP), on the grounds that the Company had
been allowed excess refunds in the year 2000 - 2001, on account of Import Parity Formula. The Company has
taken up this matter with the GoP and is contesting the same.
20.1.2
This represents provision made by the Company in respect of sales tax and central excise duty aggregating to
Rs. 29.01 million (2012: Rs. 29.01 million), determined by the Collectorate of Customs, Sales Tax and Central
Excise (Adjudication) in 2004 in respect of goods sold by the Company to one of its customer without deduction
of sales tax and central excise duties.
20.2
This includes provision for interest made by the Company aggregating to Rs. 133.83 million
(2012: Rs. 121.33 million) in respect of arbitration claim from one of the suppliers of the Company on account
of cancellation of a supply contract and Rs. 55.62 million (2012: Rs. 55.62 million) in respect of sales tax and
excise duty on account of purchases of crude oil and drums.
20.3
Reconciliation of provisions
Balance at the beginning of the year
Provisions
Payment
Balance at the end of the year
2013
2012
398,905
428,676
12,496
9,177
(38,948)
411,401
398,905
Annual Report 2013
79

21.
CONTINGENCIES AND COMMITMENTS
21.1
Contingencies
21.1.1
Outstanding counter guarantees at the end of the year amounted to Rs. 345.64 million (2012: Rs. 295.60 million).
21.1.2
Claims not acknowledged by the Company as debt at the end of the year amounted to Rs. 4.57 billion
(2012: Rs. 4.35 billion). These include claims accumulating to Rs. 4.30 billion (2012: Rs. 3.57 billion) in respect
of late payment surcharge claimed by crude oil suppliers and Rs. 16.49 million (2012: Rs. 354.29 million) relating
to freight claims.
21.1.3
The Company has raised claims on certain Oil Marketing Companies (OMCs) in respect of interest on late
payments against receivables aggregating to Rs. 5.08 billion (2012: Rs. 4.98 billion). However, these have not
been recognised in the financial statements as these claims have not been acknowledged by the OMCs.
21.2
Commitments
21.2.1
Commitments outstanding for capital expenditures as at June 30, 2013 amounted to Rs. 603.56 million
(2012: Rs. 940.30 million).
21.2.2
Outstanding letters of credit at the end of the year amounted to Rs. 17.35 billion (2012: Rs. 18.06 billion).
2013
22.
23.
GROSS SALES
Local
Less: sales returns
193,716,679
193,716,679
180,678,301
(53,949)
180,624,352
Exports
22,406,363
216,123,042
26,964,160
207,588,512
1,089,998
26,807,541
518
8,767,273
273,297
1,129,333
24,810,105
1,294,810
5,557,189
-
36,938,627
32,791,437
TRADE DISCOUNTS, TAXES, DUTIES, LEVIES

AND PRICE DIFFERENTIAL
Trade discounts
Sales tax
Excise duty
Petroleum levy
Surplus price differential - note19.1
80
2012

24.
COST OF SALES
Opening stock of semi-finished products
Crude oil, condensate and drums
consumed - notes 24.1 and 24.2
Stores, spares and chemicals consumed
Salaries, wages and staff benefits - note 24.3
Staff transport and canteen
Fuel, power and water
Rent, rates and taxes
Insurance
Contract services
Repairs and maintenance
(Reversal) / Provision for slow moving and
obsolete stores, spares and chemicals
Depreciation - note 3.1
Health, safety, environment and related cost
Professional charges
Consultancy charges
Others
Closing stock of semi-finished products - note 8
Cost of products manufactured
Opening stock of finished products
Closing stock of finished products - note 8
24.1
2013
2012
5,091,602
2,579,119
167,422,607
472,150
1,053,437
98,307
2,119,510
37,309
249,233
59,206
317,392
170,374,228
431,812
968,213
87,082
2,067,650
35,212
231,011
58,047
79,633
(15,029)
272,656
5,734
1,529
5,605
4,607
172,104,253
(2,906,729)
174,289,126
22,151
253,894
3,623
2,610
11,050
4,434
174,630,650
(5,091,602)
172,118,167
13,689,998
(13,860,549)
(170,551)
11,646,414
(13,689,998)
(2,043,584)
174,118,575
170,074,583
6,578,110
166,130,365
(5,796,476)
166,911,999
510,608
167,422,607
5,121,396
171,149,407
(6,578,110)
169,692,693
681,535
170,374,228
Crude oil, condensate and

drums consumed
Crude oil and condensate
- Opening stock
- Purchases
- Closing stock - note 8
Drums
24.2
Cost of crude oil and condensate consumed in respect of non-finalised Crude Oil Sale Agreements has been
recorded provisionally in line with notifications of the Ministry of Petroleum & Natural Resources.
24.3
Includes Rs. 92.01 million (2012: Rs. 82.60 million) and Rs. 28.94 million (2012: Rs. 28.55 million) in respect
of defined benefit and defined contribution plans respectively.
Annual Report 2013
81

25.
DISTRIBUTION AND MARKETING EXPENSES

Salaries and staff benefits - note 25.1
Stores, spares and chemicals consumed
Commission on local sales
Commission on export sales
Export expenses
Storage charges
Postage and periodicals
Reversal for doubtful receivable
Selling expenses
Pipeline charges
Others
25.1
26.
2013
2012
58,800
6,058
3,433
543,639
224,634
114,806
22,481
26,120
12,703
3,048
8,313
3,152
10,484
1,037,671
55,700
5,381
3,784
711,857
270,966
155,331
21,450
7,411
11,226
2,358
(2,734)
7,478
5,794
8,032
1,264,034
Includes Rs. 7.50 million (2012: Rs. 6.91 million) and Rs. 2.16 million (2012: Rs. 2.31 million) in respect of
defined benefit and defined contribution plans respectively.
ADMINISTRATIVE EXPENSES
Salaries and staff benefits - note 26.1
Directors' fee
Rent, rates and taxes
Amortisation of intangible assets - note 3.4
Legal and professional charges
Printing and stationery
Contract services
Telecommunication
Electricity and power
Insurance
Training and seminar
Postage and periodicals
Security charges
Others - note 26.2
2013
2012
335,828
28,716
3,520
2,662
13,063
1,194
2,365
6,692
33,515
35,763
5,876
3,611
1,621
829
6,119
16,416
10,249
508,039
297,552
24,757
3,129
2,590
12,020
348
3,531
5,430
35,241
32,062
5,283
13,514
1,125
977
5,677
13,417
7,451
464,104
26.1
Includes Rs. 39.44 million (2012: Rs. 36.60 million) and Rs. 11.08 million (2012: Rs. 10.46 million) in respect
of defined benefit and defined contribution plans respectively.
26.2
This includes penalty imposed by Securities and Exchange Commission of Pakistan amounting to Rs 500
thousand.
82

27.
OTHER INCOME
2013
2012
Income from financial assets

Return / interest / mark-up on:
533,693
909,480
652
637
171,889
415,755
160,818
147,264
44,077
15,583
1,224,109
1,566,766
577
759
Sale of scrap and empties
5,015
1,924
Pipeline charges recovered
5,603
6,179
- PLS savings and deposit accounts

- Secured loans to employees and executives
- Treasury bills
Others
Handling and storage income
Hospitality income
Liabilities no longer payable written
back - note 27.1
Profit on disposal of property,
plant and equipment
Rental income
7,796
7,446
Rebate on insurance
5,327
4,627
12,287
Encashment of bank guarantee

Tender fees
Others
27.1
28.
229
299
7,671
60,113
2,179,743
3,136,832
This includes reversal of excess mark-up of Rs. 516.28 million accrued on amounts withheld pertaining to
local crude purchases consequent to finalisation of amounts by the Company and settlement of old yield
differential claims with suppliers during the year amounting to Rs. 605.31 million.
OTHER OPERATING EXPENSES
2013
2012
Workers' profits participation fund - note 19.2
241,256
239,091
Workers' welfare fund
107,019
90,855
6,144
6,508
100
354,519
336,454
Auditors remuneration - note 28.1

Corporate Social Responsibility
Annual Report 2013
83

28.1
Auditors remuneration
Audit fee
1,815
1,650
Taxation services
2,725
3,032
Fee for review of half yearly financial information,

special reports and certifications
1,177
1,439
427
387
6,144
6,508
12,452
853,776
2,041
1,330
948
9,189
1,331,814
1,425
432
870,547
1,342,860
Out-of-pocket expenses
29.
FINANCE COST
Mark-up on late payment to supplier
Exchange loss - note 29.1
Interest on workers' profits participation fund
Guarantee commission and service charges
Bank charges
29.1
30.
This is net off exchange gain on export sales amounting Rs. 68.02 million (2012: Rs. 132.51 million).
TAXATION
Current
- for the year
- for prior year
84
2013
2012
1,759,226
(36,517)
1,722,709
(92,359)
1,678,338
31,412
1,709,750
123,738
1,630,350
1,833,488
Accounting profit before taxation
4,474,807
4,451,872
Tax at the applicable tax rate of 35%

Tax effect of expenses not allowed for tax
Tax effect of Final Tax Regime
Effect of tax credits
Effect of income taxable at lower rate
Effect of prior year tax
Effect of change in tax rate
1,566,182
438
143,939
(39,341)
(1,984)
(36,517)
(2,367)
1,558,155
(20,385)
302,224
(36,021)
(1,897)
31,412
-
Tax expense for the year
1,630,350
1,833,488
Deferred
30.1
2013
2012
Relationship between tax expense and accounting profit

2013
31.
2012
EARNINGS PER SHARE - basic and diluted

Profit after taxation (Rupees in thousand)
Weighted average number of ordinary
shares in issue (in thousand)
Basic earnings per share (Rupees)
2,844,457
2,618,384
79,967
79,967
35.57
32.74
There were no dilutive potential ordinary shares in issue as at June 30, 2013 and 2012.
32.
CASH GENERATED FROM / (USED IN)
(Restated)
2013
2012
OPERATIONS
4,474,807
4,451,872
309,394
287,712
Provision for pension
94,452
85,381
Provision for gratuity
14,308
10,706
Provision for post retirement medical benefits
30,187
30,019
(15,029)
22,151
Profit before taxation

Adjustment for non cash charges
and other items:
Depreciation and amortisation
(Reversal) / Provision for slow moving and

obsolete stores, spares and chemicals
(2,734)
Return / interest on PLS savings and

deposit accounts
(533,693)
(909,480)
Return on treasury bills
(171,889)
(415,755)
(577)
(759)
2,081,055
6,283,015
(4,393,446)
(834,333)
Reversal of doubtful receivables
Profit on disposal of property,

plant and equipment
Decrease / (Increase) in working capital - note 32.1
Annual Report 2013
85

(Restated)
2013
2012
32.1
Decrease / (Increase) in working capital

Decrease / (Increase) in current assets
217,705
(214,633)
Stock-in-trade
2,795,956
(6,012,781)
Trade debts
2,285,192
Loans and advances

Deposits and prepayments
Other receivables
(Decrease) / Increase in current liabilities
Provisions
33.
(3,206,005)
(16,165)
11,780
684,359
(4,706,397)
342,722
12,496
2,081,055
(29,771)
(4,393,446)
16,004,875
10,078,554
489,525
3,199,971
16,494,400
13,278,525
350,000
350,000
36,873,379
32,203,558
UNAVAILED CREDIT FACILITIES

Short term running finance - note 34.1
Letters of credit and guarantee - note 34.2
34.1
(1,555)
(26,585)
5,274,564
841,043
CASH AND CASH EQUIVALENTS
Short term investments
34.
3,851
Short term running finance

The rates of mark-up on these finance ranges between 9.58% and 12.48% (2012: 12.25% and 14.13%)
per annum, payable quarterly.
The facilities are secured against joint pari passu charge on Companys stocks, receivables and other current
assets.
The purchase prices are repayable on various dates latest by March 31, 2014.
34.2
Letters of credit and guarantee

The facilities are secured by way of pari passu charge against hypothecation of Company's plant and machinery
and ranking charge on Company's stocks, receivables and other current assets.
86

35.
REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
Managerial remuneration
Bonus
Retirement benefits
House rent
Conveyance
Leave benefits
Number of person(s)
2012
Executive
Director
2013
Executive
Director
Executives
10,190
5,616
330,088
8,482
5,041
299,352
2,772
1,555
68,020
2,497
1,401
62,436
372
1,493
84,737
2,287
1,381
76,404
4,202
2,184
132,045
3,551
2,014
119,215
30,406
Chief
Executive
Chief
Executive
Executives
289
409
35,486
265
376
2,296
473
37,506
732
441
32,076
20,121
11,730
687,882
17,814
10,654
619,889
392
354
35.1
In addition to the above, fee to executive and non-executive directors during the year amounted to Rs. 1.16 million
(2012: Rs. 1.16 million) and Rs. 2.36 million (2012: Rs. 1.97 million) respectively.
35.2
The Chief Executive, director and some of the executives of the Company are provided with free use of Company's
cars and additionally, the Chief Executive, director and executives are also entitled to medical benefits and club
subscriptions in accordance with their terms of service.
36.
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
36.1
Financial assets and liabilities

Maturity
up to one
year
Interest/mark-up bearing
Maturity
Sub total
after one
year
Non-interest/mark-up bearing
Maturity
Maturity
Sub total
up to one
after one
year
year
Total
Financial assets
Loans and receivables
2,175
8,973
11,148
18,179
43,269
61,448
Deposits
598
30,189
30,787
30,787
Trade debts
10,976,992
10,976,992
10,976,992
Accrued interest
86,120
86,120
86,120
Other receivables
274,711
274,711
274,711
99,850
99,850
16,004,875
Loans and advances
72,596
Cash and bank

balances
15,905,025
15,905,025
492,524
492,524
Held to maturity
Investments
492,524
2013
16,399,724
8,973
16,408,697
11,456,450
73,458
11,529,908
27,938,605
2012
13,272,082
8,845
13,280,927
13,680,063
86,757
13,766,820
27,047,747
Annual Report 2013
87

Interest/mark-up bearing
Non-interest/mark-up bearing
Maturity
Maturity
Sub total
Maturity
Maturity
up to one
after one
up to one
after one
year
year
year
year
Sub total
Total
Financial liabilities
Trade and other
payables
2013
2012
586,093
26,237,218
26,237,218
26,237,218
26,237,218
26,237,218
26,237,218
27,179,686
27,179,686
27,765,779
1,701,387
586,093
On balance sheet gap

2013
16,399,724
8,973
16,408,697
(14,780,768)
73,458
(14,707,310)
2012
12,685,989
8,845
12,694,834
(13,499,623)
86,757
(13,412,866)
(718,032)
OFF BALANCE SHEET ITEMS

Commitments for
capital expenditure
Letters of credit
Letters of guarantees
603,559
17,346,621
345,636
2013
18,295,816
2012
19,299,912
36.2
Financial risk management objectives and policies
(i)
Capital Risk Management

The Company's objectives when managing capital are to safeguard the Company's ability to continue as going
concern in order to provide returns for shareholders and benefit for other stakeholders. As mentioned in
note - 16.2, the Company operates under tariff protection formula for fuel operations whereby profits after tax
attributable to fuel segment in excess of 50% of the paid up capital as of July 1, 2002 attributable to fuel
segment are transferred to special reserve.
The capital structure of the Company is equity based with no financing through long term borrowings.
(ii)
Concentration of credit risk

Credit risk represents the accounting loss that would be recognised at the reporting date if counterparties
failed to perform as contracted. The financial assets that are subject to credit risk amounted to Rs. 27.21 billion
(2012: Rs. 23.58 billion).
The Company monitors its exposure to credit risk on an ongoing basis at various levels. The Company
believes that it is not exposed to any major concentration of credit risk as it operates in an essential products
industry and has as customers only a few sound organisations.
88

The carrying values of financial assets which are neither past due nor impaired are as under:
2013
2012
72,596
Loans and advances
30,787
30,524
10,924,581
4,121,561
Deposits
Trade debts
86,120
110,686
Other receivables
274,711
248,126
Investments
492,524
3,230,473
16,004,875
10,078,554
27,886,194
17,907,124
Accrued interest
(iii)
87,200
Foreign exchange risk

Foreign currency risk arises mainly when receivables and payables exist due to transactions in foreign
currencies primarily with respect to US Dollar. Financial assets include Rs. 958.14 million (2012: Nil) and
financial liabilities include Rs. 14.31 billion (2012: Rs. 10.69 billion) which are subject to foreign currency risk.
The Company believes that it is not materially exposed to foreign exchange risk as its product prices are linked
to the currency of its imports.
As at June 30, 2013, if the Pakistan Rupee had weakened / strengthened by 10% against US Dollar with all
other variables held constant, profit after tax for the year would have been lower/higher by Rs. 1.34 billion
(2012: Rs. 1.07 billion), mainly as a result of foreign exchange losses / gains on translation of US
Dollar-denominated trade payables and trade debts.
(iv)
Liquidity risk
Liquidity risk reflects the Company's inability in raising funds to meet commitments.
The Company manages liquidity risk by maintaining sufficient cash and bank balances and the availability of
financing through banking arrangements.
(v)
Interest rate risk

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in the market
interest rates. As at June 30, 2013 the Company does not have any borrowings, hence management believes
that the Company is not exposed to interest rate changes.
(vi)
Price risk
The Company is not exposed to any price risk with respect to its investments in treasury bills.
(vii)
Fair values of financial assets and liabilities

The carrying values of all financial assets and liabilities reflected in the financial statements approximate their
fair values.
Annual Report 2013
89

37.
SEGMENT INFORMATION
37.1
The Companys operating segments are organised and managed separately according to the nature of production
process for products and services provided, with each segment representing a strategic business unit. The fuel
segment is primarily a diverse supplier of fuel products and offers gasoline, diesel oils, and furnace oil. The lube
segment mainly provides different types of lube base oils, asphalt, wax free oil and other petroleum products for
different sectors of the economy. Inter-segment transfers are made at relevant costs to each segment.
37.2
Segment results and assets include items directly attributable to a segment as well as those that can be allocated
on a reasonable basis. Unallocated assets include property, plant and equipment.
The financial information regarding operating segments is as follows:
FUEL
LUBE
2012
2013
- exports
Inter-segment transfers
Elimination of intersegment transfers
Net sales
Segment results after tax
Segment assets
Unallocated assets
2013
2012
Segment Revenue
Sales to external customers
- local, net of discounts,
taxes, duties, levies
and price differential
TOTAL
2012
2013
111,376,431
105,290,400
45,401,621
42,542,515
156,778,052
19,633,766
23,062,279
2,772,597
3,901,881
22,406,363
26,964,160
131,010,197
128,352,679
48,174,218
46,444,396
179,184,415
174,797,075
40,716,707
41,661,211
37,180
40,716,707
41,698,391
(40,716,707)
(41,698,391)
171,726,904
(211,455)
29,801,090
-
170,013,890
(117,324)
34,276,233
-
48,174,218
46,481,576
179,184,415
147,832,915
174,797,075
3,055,912
2,735,708
2,844,457
2,618,384
24,513,477
20,937,822
54,314,567
55,214,055
1,362,351
1,900,372
Total assets
29,801,090
34,276,233
24,513,477
20,937,822
55,676,918
57,114,427
Segment liabilities
25,839,610
28,673,583
1,403,642
1,697,650
27,243,252
30,371,233
1,562,312
1,516,799
Unallocated liabilities
Total liabilities
25,839,610
28,673,583
1,403,642
1,697,650
28,805,564
31,888,032
122,187
78,091
122,014
27,122
244,201
105,213
Other Segment Information:

Capital expenditure
Unallocated capital expenditure
122,187
122,014
104,946
120,340
27,122
349,147
225,553
Depreciation and amortisation
102,818
93,024
206,578
194,688
309,396
287,712
Interest income
235,411
441,957
470,823
883,915
706,234
1,325,872
1,316
351
13,177
8,838
14,493
9,189
(10,019)
14,767
(15,029)
22,151
32,358
870,955
Interest expense
90
78,091
Non-cash expenses
other than depreciation
(5,010)
Stock-in-trade written down
32,358
7,384
870,955

37.3
The Company sells its manufactured products to Oil Marketing Companies (OMCs) and other organisations /
institutions. Out of these, two (2012: three) of the Company's customers contributed towards 58.98%
(2012: 68.15%) of the net revenues during the year amounting to Rs. 105.69 billion (2012: Rs. 119.13 billion) and
each customer individually exceeds 10% of the net revenues.
38.
TRANSACTIONS WITH RELATED PARTIES
38.1
The following transactions were carried out with related parties during the year:
Nature of relationship
Nature of transactions
2013
2012
Associated companies
Sale of petroleum
products - note 38.1.1
Sales returns
Purchase of crude oil and
condensate - note 38.1.2
Rental income
Hospitality income
Handling income
Trade discounts and commission
on sales
105,533,386
92,089,091
53,949
1,417,478
4,400
4,067
43,178
13,273
127,762
114,890
1,858,271
2,098,365
Reimbursement of expenses
1,571
2,058
Purchase of petroleum products
8,743
17,490
Dividend paid
611,744
1,019,574
Purchase of stores
328,192
1,200
Sale of stores
138
174
Contributions
119,175
123,837
43,723
2,661
39,447
4,400
3,520
3,129
Post employment staff

benefit plans
Key management employees
compensation
Salaries and other employee benefits
Post retirement benefits
Directors' fees
38.1.1
Sales of petroleum products to associated companies are based on prices fixed by Oil & Gas Regulatory
Authority, import prices of Pakistan State Oil, Company announced prices and other services on contractual
basis.
38.1.2
Purchase of crude oil and condensate from associated company is based on price mechanism provided in its
respective Petroleum Concession Agreement till finalisation of Crude Oil / Condensate Sale and Purchase
Agreements.
38.2
The related party status of outstanding balances as at June 30, 2013 is included in trade debts, other receivables
and trade and other payables. These are settled in ordinary course of business.
Annual Report 2013
91

Annual
designed
throughput
capacity
39.
Actual throughput
2013
2012
(In Metric Tons)
CAPACITY
Fuel section - throughput
of crude oil - note 39.1
2,710,500
2,135,689
2,275,092
Lube section - throughput

of reduced crude oil
620,486
645,775
663,588
39.1
Reduction is due to turnaround of fuel and lube refineries during the year and day to day monitoring of throughput
based on expected product margins.
40.
PROVIDENT FUNDS RELATED DISCLOSURE

The following information is based on un-audited financial statements of the Funds as at June 30, 2013:
2013
2012
1,167,830
1,064,798
91%
Size of the fund - Total assets

Fair value of investments
Percentage of investments made
40.1
The cost of above investments amounted to Rs. 1,022.4 million (2012: Rs. 973.2 million).
40.2
The break-up of fair value of investments is as follows:
2013
2012
Percentage
National savings scheme
Bank deposits
Government securities
Debt securities
Equity securities
Unit trust schemes
40.3
92
55%
12%
10%
0%
2%
21%
41%
18%
19%
1%
2%
19%
1,019,268
924,671
91%
2013
2012
583,056
125,142
105,361
21,550
229,689
378,989
165,679
176,661
8,425
17,047
177,870
The investments out of provident fund have been made in accordance with the provision of Section 227 of the
Companies Ordinance, 1984 and the rules formulated for this purpose.
94
PATTERN OF SHARE HOLDING
NOTICE & FORMS
Annual Report 2013
95
PATTERN OF SHAREHOLDING
As At June 30, 2013
NUMBER OF SHARES
FROM
1
101
501
1,001
5,001
10,001
15,001
20,001
25,001
30,001
35,001
40,001
45,001
50,001
55,001
60,001
65,001
70,001
75,001
80,001
85,001
90,001
95,001
100,001
105,001
110,001
120,001
130,001
135,001
145,001
165,001
195,001
210,001
240,001
250,001
275,001
310,001
320,001
330,001
345,001
360,001
445,001
455,001
500,001
580,001
610,001
795,001
800,001
1,035,001
1,080,001
3,585,001
5,665,001
11,995,001
19,990,001
96
TO
100
500
1,000
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
80,000
85,000
90,000
95,000
100,000
105,000
110,000
115,000
125,000
135,000
140,000
150,000
170,000
200,000
215,000
245,000
255,000
280,000
315,000
325,000
335,000
350,000
365,000
450,000
460,000
505,000
585,000
615,000
800,000
805,000
1,040,000
1,085,000
3,590,000
5,670,000
12,000,000
19,995,000
NUMBER OF
SHAREHOLDERS
NUMBER OF
SHARES HELD
%ON
ISSUED
1,566
1,249
612
830
155
38
31
13
10
10
6
6
5
3
4
1
1
4
2
1
2
2
4
1
1
1
1
1
1
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
48,771
342,078
473,304
1,890,508
1,135,891
458,904
547,913
295,820
283,245
327,920
235,400
263,579
241,200
156,400
232,706
63,317
66,229
288,153
159,600
84,600
177,111
186,833
397,400
104,100
110,000
110,654
125,000
131,000
138,000
300,000
168,460
199,100
215,000
243,658
253,677
275,875
314,285
320,100
332,000
350,000
361,185
445,584
455,400
502,363
580,554
611,217
799,665
800,896
1,037,255
1,083,400
3,589,819
5,668,151
12,000,000
39,983,280
0.06
0.43
0.59
2.36
1.42
0.57
0.69
0.37
0.35
0.41
0.29
0.33
0.30
0.20
0.29
0.08
0.08
0.36
0.20
0.11
0.22
0.23
0.50
0.13
0.14
0.14
0.16
0.16
0.17
0.38
0.21
0.25
0.27
0.30
0.32
0.34
0.39
0.40
0.42
0.44
0.45
0.56
0.57
0.63
0.73
0.76
1.00
1.00
1.30
1.35
4.49
7.10
15.00
50.00
4,588
79,966,560
100.00
CATEGORIES OF SHAREHOLDING
As At June 30, 2013
Categories
Associated Companies
Individuals
Joint Stock Companies
NIT & ICP
Banks, Insurance and Modaraba
Mutual Funds
Foreign Investors (including IDB)
Provident / Pension Funds
Investment Companies
Charitable Trust
Others
% on
Issued
50.00
8.94
1.40
9.89
8.83
0.61
17.54
0.95
0.06
0.24
1.54
100.00
Number of
Shareholders
2
4,373
20
10
38
17
31
20
12
10
55
4,588
Number of
Shares held
39,983,280
7,147,690
1,120,820
7,910,500
7,064,292
483,765
14,027,542
756,019
49,447
188,295
1,234,910
79,966,560
INFORMATION REQUIRED UNDER CODE

OF CORPORATE GOVERNANCE
Associated Companies
Mutual Funds (as per LOBO from CDC)
NIT-Equity Market Opportunity Fund
Pakistan Stock Market Fund
MCB Dynamic Stock Fund
UBL Stock Advantage Fund
UBL Sharia Stock Fund
AKD Opportunity Fund
KSE Meezan Index Fund
Pakistan Premier Fund
First Habib Islamic Balanced Fund
First Habib Stock Fund
Pak Strategic Alloc. Fund
AKD Index Tracker Fund
Meezan Islamic Fund
Meezan Balanced Fund
Golden Arrow Selected Stocks Fund Limited
First Capital Mutual Fund Limited
JS KSE-30 Index Fund
Adamjee Life Assurance Co. Ltd. - Amaanat Fund
NBP-Trustee Department NI(U)T Fund
IDBP (ICP Unit)
National Bank of Pakistan Trustee Wing
19,991,640
19,991,640
1,037,255
80,000
54,000
51,000
50,000
45,600
44,951
32,000
27,000
19,200
9,800
5,960
2,656
900
51,400
7,500
1,298
500
5,668,151
339
9,600
Annual Report 2013
97
Categories
Number of
Shareholders
Number of
Shares held
Directors, Cheif Executive Officer,

their spouse(s) and minor children
Mr. Wael G. Pharaon
Mr. Shuaib A. Malik
Mr. Abdus Sattar
1
1
1
2
10,001
1
1
Executives
1098
Public Sector Companies and Corporations

Banks, DFIs, NBFCs, Insurance Companies,
Takaful, Modarabas and Pension Funds
Shareholders holding 5% or more
voting interest
Islamic Development Bank
NIT & ICP
5,286,871
20,653,951
25 %
25 %
15 %
10 %
19,991,640
19,991,640
12,000,000
7,910,500
Trades in the shares of the Company carried out by

directors, executives, their spouse(s) and minor children
Mr. Tariq Iqbal Khan, Director, acquired 10,001 shares during the year.
The expression "executive" means the CEO, CFO, Head of internal audit, Company Secrectary and
other employees of the Company drawing annual basic salary of Rs. 738,000 including all employees
of Finance Division.
98
NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Fiftieth (50th) Annual General Meeting of National Refinery Limited
will be held on Monday, September 30, 2013 at 1630 hours at Carlton Hotel, Karachi to transact the
following business:
ORDINARY BUSINESS
1. To receive, consider and approve the Audited Accounts of the Company for the year ended June
30, 2013 together with the Directors Report and the Auditors Report thereon.
2. To consider and, if thought fit, to approve the payment of Final Cash Dividend at the rate of
Rs. 15/- per share i.e., 150% for the year ended June 30, 2013 as recommended by the Board of
Directors.
3. To appoint Companys auditors for the year ending June 30, 2014 and to fix their remuneration.
4. Any other business with the permission of the Chair.
By Order of the Board
Karachi:
Dated: September 07, 2013
Nouman Ahmed Usmani

Company Secretary
NOTES:
1. The Register of Members of the Company will remain closed and no transfer of shares will be
accepted for registration from Friday, September 20, 2013 to Monday, September 30, 2013
(both days inclusive). Transfers received in order at the office of the Share Registrar:

THK Associates (Pvt.) Ltd., Ground Floor, State Life Building-3,

Dr. Ziauddin Ahmed Road, Karachi-75530;
at the close of business on Thursday, September 19, 2013 will be in time for the purpose of
determination of entitlement to the transferees.
2. A member entitled to attend, speak and vote at the Annual General Meeting is entitled to
appoint a proxy to attend, speak and vote instead of him/her. A proxy need not be a member.

Proxy in order to be effective must be duly signed, witnessed and deposited at the office of the
Share Registrar not less than 48 hours before the meeting.
3. The shareholder/proxy shall produce his/her original CNIC or passport at the time of the
meeting.
Annual Report 2013
99
4. Shareholders are requested to promptly notify the office of the Share Registrar of any change
in their address.
5. Members who may be seeking exemption from the deduction of income tax or are eligible
for deduction at a reduced rate are requested to submit a valid tax certificate or necessary
documentary evidence as the case may be. Members desiring non-deduction of zakat are also
requested to submit a declaration for non-deduction of zakat. Necessary advice in either case
must be submitted within not more than 15 days from the date of dividend entitlement.
6. CDC account holders will further have to follow the under mentioned guidelines as laid down
in Circular 1 dated January 26, 2000 issued by the Securities and Exchange Commission of
Pakistan.
A. For attending the meeting:
(i) In case of individuals, the account holder or sub-account holder and/or the person whose
securities are in group account, and their registration details are uploaded as per the
Regulations, shall authenticate his identity by showing his original Computerised National
Identity Card (CNIC) or original passport at the time of attending the Meeting.
(ii) In case of corporate entity, the Board of Directors' resolution/power of attorney with
specimen signature of the nominee shall be produced (unless it has been provided earlier)
at the time of the Meeting.
B. For appointing proxies:
(i) In case of individuals, the account holder or sub-account holder and/or the person whose
securities are in group account, and their registration details are uploaded as per the
Regulations, shall submit the proxy form as per the above requirement.
(ii) The proxy form shall be witnessed by two persons whose names, addresses and CNIC
numbers shall be mentioned on the form.
(iii) Attested copies of CNIC or the passport, of the beneficial owners and the proxy shall be
furnished with the proxy form.
(iv) The proxy shall produce his original CNIC or original passport at the time of the Meeting.
(v) In case of corporate entity, the Board of Directors' resolution/power of attorney with
specimen signature shall be submitted (unless it has been provided earlier) along with
proxy form to the Company.
7. Form of proxy is attached to the notice of meeting being sent to the members.
8. Members who have not yet provided their dividend mandate information and/or CNIC/NTN (as
the case may be) are requested to kindly provide the same at the earliest to the Companys
Share Registrar at the address mentioned-above in compliance with the directives issued by
the Securities and Exchange Commission of Pakistan and/or Federal Board of Revenue from
time to time.
100
FORM OF PROXY
50th Annual General Meeting
NATIONAL REFINERY LIMITED
I ____________________________________ of _____________________________ in the
district of _____________________ being a Member of NATIONAL REFINERY LIMITED
hereby appoint _____________________ of ________________________ as my proxy,
and failing him, _________________ of _______________ another Member of the
Company to vote for me and on my behalf at the 50th Annual General Meeting of
the Company to be held on the 30th day of September 2013 and at any adjournment
thereof.
Signed this _________ day of __________ 2013.
Signed by the said Member
SIGNED IN THE PRESENCE OF:

1. Signature:____________________
2. Signature: ____________________
Name:________________________
Name: ______________________
Address: _____________________
Address: _____________________
CNIC/Passport No.____________
CNIC/Passport No.____________

For Member
(Shareholder)
Information required:
For
Proxy
For alternate
Proxy (*)
(if member)
Number of shares held

Folio No.
CDC
Account No.
Participant I.D.
Affix
Revenue
Stamp of
Rs.5/-
Account No.
(*) Upon failing of appointed Proxy.
Annual Report 2013
101
Notes:
1.
A member entitled to attend and vote at Annual General Meeting is entitled to appoint a
proxy to attend and vote instead of him/her. A proxy need not be a member.
2.
This Proxy Form, duly completed and signed, together with Board Resolution / Power
of Attorney, if any, under which it is signed or a notarially certified copy thereof, should
be deposited, with our Registrar, THK Associates (Pvt.) Ltd., Ground Floor, State Life
Building-3, Dr. Ziauddin Ahmed Road, Karachi-75530, Telephone No. 021-111-000-322 ,
not later than 48 hours before the time of holding the meeting.
3.
The instrument appointing a proxy should be signed by the member or his/her attorney
duly authorized in writing. If the member is a corporate entity its common seal should be
affixed on the instrument.
4.
Any alteration made in this instrument of proxy should be initialled by the person who
signs it.
5.
Attested copies of CNIC or the passport of the beneficial owners and of the proxy shall be
provided with the proxy form.
6.
If a member appoints more than one proxy and more than one instruments of proxies are
deposited by a member with the Company, all such instruments of proxy shall be rendered
invalid.
7.
In the case of joint holders the vote of the senior who tenders a vote whether in person
or by Proxy will be accepted to the exclusion of the votes of the other joint holders, and
for this purpose seniority will be determined by the order in which the names stand in the
Register of Members.
8.
The proxy shall produce his / her original CNIC or passport at the time of the meeting.
AFFIX
CORRECT
POSTAGE
THK Associates (Pvt.) Ltd.,

Ground Floor, State Life Building-3,
Dr. Ziauddin Ahmed Road, Karachi-75530,
Telephone No. 021-111-000-322
102
DIVIDEND MANDATE FORM

Members of National Refinery Limited
Subject: Dividend Mandate Form

It is to inform you that under section 250 of the Companies Ordinance, 1984 a shareholder may, if so desire,
directs the Company to pay dividend through his / her / its bank account.

In pursuance of the directions given by the Securities and Exchange Commission of Pakistan from time to
time relating to the subject you being the registered shareholder of National Refinery Limited are hereby given
the opportunity to authorize the Company to directly credit into your bank account cash dividend ,if any,
declared by the Company in future.

PLEASE NOTE THAT THIS DIVIDEND MANDATE IS OPTIONAL AND NOT COMPULSORY, IN CASE YOU DO
NOT WISH YOUR DIVIDEND TO BE DIRECTLY CREDITED INTO YOUR BANK ACCOUNT THEN THE SAME
SHALL BE PAID TO YOU THROUGH THE DIVIDEND WARRANTS.

Do you wish the cash dividend declared by the Company, if any, is directly credited in your bank account,
instead of issue of dividend warrants. Please tick "" any of the following boxes:
YES
NO

If yes, then please provide the following information:
(i) Shareholder's Detail
Name of the shareholder
Folio No. / CDC No.
CNIC No.
Passport No. (in case of Foreign Shareholder)
Land Line Phone No.
Mobile No.
(ii) Shareholder's Bank Detail
Title of Bank Account
Bank Account Number
Bank's Name
Branch Name and Address

The Company is hereby authorized to directly credit cash dividend declared by it, if any, from time to time, in
the above-mentioned bank account.
It is stated that the above-mentioned information is correct, and that I will intimate the changes in the abovementioned information to the company and the concerned Share Registrar as soon as they occur.

Signature of the Member / Shareholder
Date:______________

Note:
The shareholders who hold shares in physical form are requested to submit this Dividend Mandate
Form duly filled-in to the Share Registrar concerned.
Shareholders maintaining their shareholdings under Central Depository System (CDS) are advised to
submit this form directly to relevant Participant/ CDC Investor Account Service.
Please attach attested photocopy of the CNIC / Passport (in case of Foreign Shareholder).
Annual Report 2013
103
AFFIX
CORRECT
POSTAGE
Company Secretary

7-B, Korangi Industrial Area,
Karachi-74900,
Pakistan.
104

7-B, Korangi Industrial Area, Karachi-74900, Pakistan.
Tel: 92-21-35064981-86 Fax: 92-21-35054663
UAN: 111-675-675 URL: www.nrlpak.com
Email: [email protected]

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Annual Report 2013

National Refinery Limited

We believe in respecting the

1. Ethical Conduct and Integrity

We value lifestyle in our organization where ethics like truth,

2. Teamwork and Responsibility

We share information and resources and step in to help out other

We endeavor to provide quality products to our customers at

We generate new ideas and creative approaches to upgrade and

We believe in enhancing our profitability to the maximum so that

As a good Corporate Citizen, we are more than willing and happy to

Dr. Ghaith R. Pharaon Chairman

Chief Executive Officer

Chief Financial Officer

Nouman Ahmed Usmani

Tariq Iqbal Khan

Human Resource and Remuneration Committee

A. F. Ferguson & Co.

Ali Sibtain Fazli & Associates

Habib Bank Limited

7-B, Korangi Industrial Area,

THK Associates (Pvt.) Ltd.,

539,700 Tons per year of Crude processing

1,500,800 Tons per year of Crude processing

100,000 Tons per year of Lube Base Oils

CORPORATE OBJECTIVES &

Balancing and Modernization for energy conservation and enhanced yield

Dr. Ghaith R. Pharaon

Chairman & Director

Mr. Laith G. Pharaon

Mr. Wael G. Pharaon

Mr. Shuaib A. Malik

Director, Chairman & CEO

National Refinery Limited

Mr. Musa Bojang

Mr. Tariq Iqbal Khan

Mr. Bahauddin Khan

Chief Operating Officer

Mr. Abdus Sattar

Mr. Babar Bashir Nawaz

Director & Chief Executive

Mr. Jamil A. Khan

Annual Report 2013

It gives me immense pleasure to welcome

National Refinery Limited

Arab Light FOB (Monthly average) : 2012-13

With a newly elected Government in place it is expected that a fresh approach to

Dr. Ghaith R. Pharaon

National Refinery Limited

SALES VOLUME COMPOSITION

Annual Report 2013

Profit available for appropriation after transfer to

Transfer to General Reserves

Final Dividend @ 150% (2012: 150%)

National Refinery Limited

o 101 Crude Distillation Unit at Fuel Refinery

National Refinery Limited