| Pakistan Refinery Limited |
|
|
|
|
|
|
|
|
|
|
(Annual Report 1996) |
|
|
| Contents |
|
|
| Company
Information |
|
2 |
|
| Notice |
|
3 |
|
| Chairman's
Review |
|
5 |
|
| Directors'
Report |
|
7 |
|
| Ten
Years at a Glance |
|
9 |
|
| Auditors'
Report |
|
10 |
|
| Balance Sheet |
|
12 |
|
| Profit
and Loss Account |
|
14 |
|
| Cash
Flow Statement |
|
15 |
|
| Notes
to the Accounts |
|
16 |
|
| Pattern
of holdings of shares |
29 |
|
| Form of Proxy |
|
|
|
Company Information |
|
| Chairman |
|
| Salahuddin
Qureshi |
|
|
| Directors |
|
| M.B. Abbasi |
|
| Jahangir
N.W. Ansari |
|
| Ardcshir
R. Cowasjee |
|
| Ahmed Dawood |
|
| T.V. Higgins |
|
| G.L. Mahan |
|
| A.R.P. Memon |
|
| S.N.A. Razvi |
|
| A. Shahbaz |
|
|
| General
Manager & |
|
| Chief
Executive |
|
| J.J. Smith |
|
|
| Secretary |
|
| Feroze
J. Cawasji |
|
|
| Auditors |
|
| A.F.
Ferguson & Co. |
|
|
| Registered
Office |
|
| Korangi
Creek Road, Karachi. |
|
|
| Registrar
and Share Registration Office |
|
| Ferguson
Associates (Pvt) Ltd. |
|
| P.O. Box 4716 |
|
| State
Life Building 1-A |
|
| Off.
I.I. Chundrigar Road |
|
| Karachi 74000 |
|
|
|
|
Notice |
|
|
| Notice
is hereby given that the Thirty Sixth Annual General Meeting of the Company
will be held on Tuesday, |
|
| November
19, 1996 at 10.30 a.m. at Sheraton Hotel, Club Road, Karachi to transact the
following business: |
|
|
| 1.
To receive and consider the Balance Sheet and Profit and Loss Account
together with the Directors' Report |
|
| for
the year ended June 30, 1996. |
|
|
| 2.
To declare the final dividend for the year. |
|
|
| 3.
To appoint Auditors for the next accounting period and to fix their
remuneration. |
|
| SPECIAL BUSINESS |
|
| 4.
To approve the issue of bonus shares in the ratio of 1: 3 (one share for
every three held). |
|
|
| 5.
To increase the Authorized Capital of the Company from Rs 200 million to Rs
1000 million. |
|
|
| A
statement under Section 160 of the Companies Ordinance, 1984 pertaining to
the Special Business is being sent |
|
| to
the Shareholders along with this Notice. |
|
|
| The
Share Transfer Books of the Company will remain closed from November 6, 1996
to November 19, 1996 (both |
|
| days
inclusive) when no transfer of shares will be accepted for registration. |
|
|
|
By Order of the Board |
|
|
|
FEROZE J. CAWASJI |
|
| Karachi:
October 3, 1996 |
|
Secretary |
|
|
| Notes: |
|
| (i)
Statement under Section 160 of the Companies Ordinance, 1984. |
|
|
| Item 4 |
|
| The
Directors are of the view that the Company's position justifies the
capitalization of Rs 50 million from |
|
| the
reserves and profits of the Company and to approve the issue of bonus shares
in the ratio of 1: 3 i.e. one |
|
| bonus
share for every three 'A' and 'B' Ordinary issued shares. None of the
Directors are interested in this |
|
| business
except to the extent of their entitlement to bonus shares as shareholder. The
Directors recommend |
|
| to
consider and, if thought fit, pass the following resolution: |
|
|
| RESOLVED
THAT A sum of Rs 50 million from the free reserves of the Company, be
capitalized and |
|
| applied
towards the issue of 2,000,000 'A' ordinary shares of Rs 10 each and
3,000,000 'B' ordinary shares |
|
| of
Rs 10 each as bonus shares in the ratio of 1:3 i.e. one bonus share for every
three 'A' and 'B' ordinary |
|
| shares
held by the members whose names appear on the Members' Register on November
19, 1996. These |
|
| bonus
shares shall rank pari passu in all respects with the existing shares but
shall not be eligible for the |
|
| dividend
declared for the year ended June 30, 1996. |
|
|
| The
members entitled to fraction of shares as a result of their holding either
being less than three ordinary |
|
| shares
or in excess of an exact multiple of three ordinary shares shall be given the
proceeds of their fractional |
|
| entitlements
for which purpose the fractions shall be consolidated into whole shares and
sold on the Karachi |
|
| Stock
Exchange. |
|
|
| For
the purpose of giving effect to the foregoing, the Directors be and are
hereby authorized to give such |
|
| directions
as they deem fit to settle any question or any difficulties that may arise in
the distribution of the |
|
| said
bonus shares or in the payment of the sale proceeds of the fractions. |
|
|
| Item 5 |
|
|
| It
is proposed to increase the Authorized Capital of the Company from Rs 200
million divided into 8,000,(X)0 |
|
| 'A'
ordinary shares of Rs 10 each and 12,000,000 'B' ordinary shares of Rs 10
each to Rs 1,000 million |
|
| divided
into 40 million 'A' ordinary shares of Rs 10 each and 60 million 'B' ordinary
shares of Rs 10 each |
|
| to
facilitate further issue of capital from time to time according to the
requirements of the Company. For this |
|
| purpose,
it is intended to propose that the following resolution be passed as a
Special Resolution, namely: |
|
|
| "RESOLVED
THAT the authorized share capital of the Company be and is hereby increased
from Rupees |
|
| two
hundred million dividend into twenty million shares of Rs 10 each of which
eight million shares are |
|
| designated
as "A" shares and twelve million shares are designated as
"B" shares to Rupees one thousand |
|
| million
divided into one hundred million shares of Rs 10 each of which forty million
shares shall be |
|
| designated
as "A" shares and sixty million shares shall be designated as
"B" shares. |
|
|
| FURTHER
RESOLVED THAT the additional shares so created shall rank pari passu with the
existing "A" |
|
| shares
or the existing "B" shares, as the case may be, and shall be
subject to the provisions of Article 5 of the |
|
| Articles
of Association of the Company. |
|
|
| FURTHER
RESOLVED THAT clause 5 of the Memorandum of' Association and Article 4 of the
Articles |
|
| of
Association be and arc hereby substituted by the following: |
|
|
| "The
share capital of the Company is Rupees one thousand million (Rs 1,000
million) divided into one |
|
| hundred
million shares of Rupees ten (Rs. 10) each of which forty million shares
shall be designated |
|
| as
"A" shares and sixty million shares shall be designated as
"B" shares." |
|
|
| (ii)
A member entitled to be present and vote at the meeting may appoint a proxy
to attend, speak and vote instead |
|
| of him. A proxy need not also be a member
of the Company. Proxies duly stamped and signed, and the power |
|
| of attorney or other authority (if any)
under which they are signed or a notarially certified copy of that power |
|
| or authority must be deposited at the
Registered Office of the Company not less than 48 hours before the time |
|
| of the meeting. An approved form of proxy
is enclosed. |
|
|
| (iii)
The minutes of the previous meeting are available at the Registered Office of
the Company. |
|
|
|
|
Chairman's Review |
|
|
|
|
| On
behalf of the Board of Directors, it gives me great pleasure in welcoming you
to the 36th Annual General |
|
| Meeting
of the Company. |
|
|
| CRUDE
OIL CONTRACTS AND PRICES |
|
| The
Company continued to import its crude oil requirements from National Iranian
Oil Company and Abu Dhabi |
|
| National
Oil Company. The crude oil imported was shared with National Refinery Limited
from whom Arabian |
|
| Light
crude was purchased in return. Besides the imported crude oil, indigenous
crude and condensate were also |
|
| purchased
at international prices and processed. |
|
|
| The
crude oil prices during the year under review continued its upward trend and
averaged $ 16.67 per barrel |
|
| compared
to $16.58 per barrel in the previous year. The present level of international
crude oil prices is around |
|
| $
20 per barrel. |
|
|
| PRODUCTION |
|
| The
throughput achieved during the year was 2.467 million tons compared to 2.354
million tons in the previous year. |
|
| The
increase in throughput was as a result of there being no planned maintenance
shutdown during the year. The |
|
| throughput
during the year include(l 0.595 million tons of indigenous crude oil and
condensate. I am glad to report, |
|
| that
the throughput achieved during the year is the highest in the last 20 years. |
|
|
| PROFITABILITY |
|
| The
Company continued to operate under the Import Parity Pricing Formula under
which the rate of return from |
|
| refining
operations is limited between 10-40% of the paid-up capital. During the year,
the Company managed to |
|
| achieve
the maximum limit of profit. These results were achieved as the import parity
prices increased much more |
|
| favourably
as compared to the crude oil prices as mentioned earlier. |
|
|
| PERSONNEL |
|
| The
relations of the Management with the workers and their union continued to
remain cordial. Negotiations with |
|
| the
employees union on their Charter of Demands was successfully completed during
the year and a two year |
|
| agreement
effective July 1995 was signed. |
|
|
| During
the year, your Company continued its emphasis on high standards of safety
consciousness amongst its |
|
| employees
and all those associated with its activities. I am glad to report that
employees at all levels and contractors |
|
| have
cooperated and we did not have any lost time injury during the year. |
|
|
| Efforts
also continue in providing training to staff and workers at all levels within
and outside the Company. |
|
|
| OUTLOOK |
|
| As
reported last year, your Company had proposed to the Government its intention
to expand the refinery capacity |
|
| by
30%, subject to the de-capping of the profits and revision of the existing
import parity pricing formula. To date, |
|
| our
efforts with the Government have not been successful, however discussions
continue. The economic realities of |
|
| refining
are that the industry cannot be sustained and expanded without some form of
support. The Government has |
|
| to
decide whether it needs a vibrant refining industry for strategic reasons or
not. |
|
|
| Your
Company is also looking at the possibility of setting up an import facility
for crude oil, white oils and LPG, |
|
| as
existing facilities would become inadequate in view of the growth in demand
in the years to come. Discussions |
|
| on
this proposal have 'already been started with the Government. |
|
|
| ACKNOWLEDGMENT |
|
| Finally,
I would like to congratulate the Chief Executive, the Management and all of
the Company staff for their |
|
| dedication
and hard work in maintaining and running the refinery efficiently and
achieving the high level of |
|
| throughput. |
|
|
SALAHUDDIN QURESHI |
|
| October
3, 1996. |
|
CHAIRMAN |
|
|
|
|
Directors' Report |
|
|
|
|
| The
Directors of your Company are pleased to present their Report together with
the Accounts and Auditor's |
|
| Report
for the year ended June 30, 1996. |
|
|
|
1996 |
1996 |
|
|
Rupees |
Rupees |
|
|
('000) |
('000) |
|
|
| 1.
FINANCIAL RESULTS |
|
| These
are summarized below: |
|
|
| Profit
after tax from refinery operations |
60,000 |
15,000 |
|
| Income
net of tax from non-refinery operations |
21,806 |
30,035 |
|
| Unappropriated
profit brought forward |
|
15,782 |
747 |
|
| Transferred
from revenue reserves |
|
12,450 |
- |
|
|
---------- |
---------- |
|
|
110,038 |
45,782 |
|
|
========== |
========== |
|
| APPROPRIATIONS |
|
| Interim
dividend of 20% |
|
| (equivalent
to Rs. 2 per share) |
|
- |
30,000 |
|
| Proposed
final dividend of 40% |
|
| (equivalent
to Rs. 4 per share) |
|
60,000 |
- |
|
| Transfer
to reserve for issue of bonus shares |
50,000 |
- |
|
|
---------- |
---------- |
|
|
110,000 |
30,000 |
|
|
========== |
========== |
|
| Leaving
for carry over to next year an |
|
| unappropriated
profit of |
|
38 |
15,782 |
|
|
========== |
========== |
|
|
|
|
| The
earnings per share for the year amounted to Rs.5.45 (1995: Rs.3.00) |
|
|
| Profit
from refining operations is based on the maximum limit of 40% on paid-up
capital that is allowed under |
|
| the
import parity formula. |
|
|
| 2.
RECEIVABLE FROM GOVERNMENT |
|
| The
receivable from Government at year end stood at Rs.904 million thus showing a
decrease of Rs.446 |
|
| million
compared to the previous year. The impact of this large receivable has been
offset, as we owe a similar |
|
| amount
to the Government in respect of Government share/Royalty on local crude oil
purchases. Efforts |
|
| continue
with the Government for having the two amounts adjusted. |
|
|
| 3. DIRECTORS |
|
| The
present Directors were elected in June 1996 after the expiry of the 3 year
term of the previous Board. |
|
| Mr.
N.M. Uquaili did not contest the election for health reasons. The Directors
appreciate the services |
|
| rendered
by Mr. Uquaili as Chairman of the Board and pray for his health. |
|
|
| 4. AUDITORS |
|
| The
present auditors, Messrs. A.F. Ferguson & Co., retire and being eligible
offer themselves for re- |
|
| appointment. |
|
|
| 5.
PATTERN OF SHARE-HOLDINGS |
|
| The
pattern of share-holding in the Company as at June 30, 1996 is included in
the Annual Report Booklet. |
|
|
|
By Order of the Board of
Directors |
|
| Karachi:
October 3, 1996. |
|
SALAHUDDIN QURESHI |
|
|
Chairman |
|
|
|
| Ten
years at a Glance |
|
|
|
|
1996 |
1995 |
1994 |
1993 |
1992 |
1991 |
1990 |
1989 |
1988 |
1987 |
| Share
capital |
|
Rs/mm |
150.00 |
150.00 |
150.00 |
150.00 |
150.00 |
120.00 |
90.00 |
60.00 |
60.00 |
60.00 |
|
| Reserves |
|
Rs/mm |
108.48 |
86.68 |
71.64 |
76.58 |
84.08 |
112.40 |
107.37 |
99.27 |
24.06 |
23.52 |
|
| Shareholders' |
|
| equity |
|
Rs/mm |
258.48 |
236.68 |
221.64 |
226.58 |
234.08 |
232.40 |
197.37 |
159.27 |
84.06 |
83.52 |
|
| Break-up |
|
| value |
|
Rs |
17.23 |
15.78 |
14.78 |
15.11 |
15.61 |
19.37 |
21.93 |
26.55 |
14.01 |
13.92 |
|
|
|
| Dividend per |
|
|
|
| share |
|
Rs |
4.00 |
2.00 |
4.00 |
4.50 |
3.50 |
3.00 |
3.00 |
3.00 |
2.00 |
2.00 |
|
| Bonus shares |
|
1:3 |
- |
- |
- |
- |
1:4 |
1:3.33 |
1:2 |
- |
- |
|
| Earnings per |
|
| share |
|
Rs |
5.45 |
3.01 |
3.67 |
4.00 |
3.61 |
5.92 |
7.23 |
15.54 |
2.09 |
2.09 |
|
| Sales |
|
Rs/mm |
12,276.98 |
12,233.61 |
10,733.15 |
10,488.67 |
9,558.53 |
111,856.32 |
7,773.25 |
6,369.10 |
6,826.17 |
5,972.83 |
|
|
| Cost of sales |
|
Rs/mm |
12,041.20 |
11,086.84 |
10,532.51 |
111,322.87 |
9,329.96 |
111,673.71 |
7,625.46 |
6,163.86 |
6,811.92 |
5,982.74 |
| Profit
after tax |
|
| and
extraordinary |
|
| items |
|
Rs/mm |
81.81 |
45.03 |
55.06 |
60.00 |
54.19 |
71.02 |
65.10 |
93.21 |
12.54 |
12.53 |
|
| Cost of sales |
|
| as % of sales |
|
98.12 |
97.98 |
98.13 |
98.42 |
97.61 |
98.32 |
98.10 |
96.78 |
99.79 |
100.17 |
|
| Profit
after tax |
|
| as % of sales |
|
0.67 |
0.37 |
0.51 |
0.57 |
0.57 |
0.65 |
0.84 |
1.46 |
0.18 |
0.21 |
|
| Profit
after tax |
|
| as
% of average |
|
| shareholders |
|
| equity |
|
33.04 |
19.65 |
24.57 |
26.05 |
23.23 |
33.05 |
36.51 |
76.61 |
14.97 |
15.05 |
|
|
|
AUDITORS' REPORT TO THE
MEMBERS |
|
|
| A.
F. FERGUSON & CO. |
STATE LIFE BUILDING 1-C |
Telephone: (021) 242 6682
- 6 |
|
| CHARTERED
ACCOUNTANTS |
OFF I.I. CHUNDRIGAR ROAD |
(021) 242 6711 - 5 |
|
| OTHER
OFFICES AT: |
P.O. BOX 4716 |
Fax : (021) 241 5007
Audit |
|
| LAHORE - RAWALPINDI |
KARACHI 74000 |
(021) 242 7938 Tax |
|
| - ISLAMABAD |
|
PAKISTAN |
|
Telex : 21155 AFFCO |
|
|
|
| We
have audited the annexed balance sheet of Pakistan Refinery Limited as at |
|
| June
30, 1996 and the related profit and loss account and cash flow statement, |
|
| together
with the notes forming part thereof, for the year then ended and we |
|
| state
that we have obtained all the information and explanations which to the |
|
| best
of our knowledge and belief were necessary for the purposes of our audit |
|
| and,
after due verification thereof, we report that: |
|
|
| (a)
in our opinion, proper books of account have been kept by the Company as |
|
| required
by the Companies Ordinance, 1984; |
|
|
| (b)
in our opinion: |
|
|
| (i)
the balance sheet and profit and loss account together with the |
|
| notes
thereon have been drawn up in conformity with the |
|
| Companies
Ordinance, 1984 and are in agreement with the books of |
|
| account
and are further in accordance with accounting policies |
|
| consistently
applied; |
|
|
| (ii)
the expenditure incurred during the year was for the purpose of |
|
| the
Company' s business; and |
|
|
| (iii)
the business conducted, investments made and the expenditure |
|
| incurred
during the year were in accordance with the objects of |
|
| the Company; |
|
|
| (c)
in our opinion and to the best of our information and according to the |
|
| explanations given to us, the balance
sheet, profit and loss account and |
|
| the cash flow statement together with the
notes forming part thereof, give |
|
| the information required by the Companies
Ordinance, 1984 in the manner so |
|
| required and respectively give a true and
fair view of the state of the |
|
| Company's affairs as at June 30, 1996 and
of the profit and cash flows |
|
| for the year then ended; and |
|
|
| (d)
no Zakat was deductible at source under the Zakat and Ushr Ordinance, |
|
| 1980. |
|
|
| October 3, 1996 |
Chartered Accountants |
|
|
|
|
|
ACCOUNTS |
|
|
for the year ended June
30, 1996 |
|
|
|
Balance Sheet as at June
30, 1996 |
|
|
|
|
|
1995 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
('ooo) |
('ooo) |
|
|
| SHARE
CAPITAL AND RESERVES |
|
| Share Capital |
|
| Authorised |
|
2 |
200,000 |
200,000 |
|
|
|
======== |
======== |
|
| Issued,
subscribed and paid-up |
|
2 |
150,000 |
150,000 |
|
| Reserves |
|
3 |
108,447 |
70,897 |
|
| Unappropriated
profit |
|
|
38 |
15,782 |
|
|
|
-------- |
-------- |
|
|
|
258,485 |
236,679 |
|
| DEFERRED
LIABILITIES |
|
|
|
| Staff
retirement benefits |
|
|
1,839 |
1,839 |
|
| CURRENT
LIABILITIES |
|
|
|
| Running
finance under mark-up arrangements |
4 |
610,752 |
365,051 |
|
| Creditors,
accrued and other liabilities |
5 |
2,246,135 |
2,305,196 |
|
| Workers'
profits participation fund |
|
6 |
10,091 |
8,075 |
|
| Workers'
welfare fund |
|
|
3,128 |
2,431 |
|
| Provision
for taxation |
|
|
2,574 |
- |
|
| Proposed
dividend |
|
|
60,000 |
- |
|
|
|
-------- |
-------- |
|
|
|
2,932,680 |
2,680,753 |
|
| COMMITMENTS |
|
7 |
|
|
|
-------- |
-------- |
|
|
3,193,004 |
2,919,271 |
|
|
======== |
======== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| FIXED
ASSETS-TANGIBLE |
|
|
| Operating
assets |
|
8 |
71,210 |
53,925 |
|
| Capital
work-in-progress - at cost |
|
9 |
9,423 |
19,850 |
|
|
|
-------- |
-------- |
|
|
80,633 |
73,775 |
|
| LONG-TERM
INVESTMENT-AT COST |
|
10 |
865 |
865 |
|
| LONG-TERM
LOANS AND ADVANCES |
|
11 |
1,790 |
2,023 |
|
| LONG-TERM
DEPOSITS |
|
1,949 |
1,596 |
|
|
|
|
| CURRENT ASSETS |
|
| Stores,
spares and chemicals |
|
12 |
165,017 |
191,069 |
|
| Stock-in-trade |
|
13 |
759,175 |
560,395 |
|
| Trade debts |
|
14 |
1,252,244 |
588,055 |
|
| Loans
and advances |
|
15 |
12,622 |
5,674 |
|
| Trade
deposits and short-term prepayments |
16 |
4,676 |
40,752 |
|
| Other
receivables |
|
17 |
909,053 |
1,452,176 |
|
| Taxation
- provision less payments |
|
|
- |
27 |
|
| Cash
and bank balances |
|
18 |
4,980 |
2,864 |
|
|
-------- |
-------- |
|
|
3,107,767 |
2,841,012 |
|
|
|
|
|
-------- |
-------- |
|
|
3,193,004 |
2,919,271 |
|
|
======== |
======== |
|
|
|
Profit and Loss Account
for the year |
|
|
ended June 30, 1996 |
|
|
Note |
1996 |
1995 |
|
|
|
Rupees |
Rupees |
|
|
|
('ooo) |
('ooo) |
|
|
| Sales |
|
19 |
12,276,985 |
12,233,613 |
|
| Cost of sales |
|
20 |
12,041,202 |
11,986,843 |
|
|
-------- |
-------- |
|
| Gross profit |
|
235,783 |
246,770 |
|
| Administration
and selling expenses |
|
21 |
49,994 |
50,576 |
|
|
-------- |
-------- |
|
| Operating
profit |
|
185,789 |
196,194 |
|
| Other income |
|
22 |
7,728 |
3,668 |
|
|
|
-------- |
-------- |
|
|
|
193,517 |
199,862 |
|
|
|
|
|
| Financial
charges |
|
23 |
61,144 |
109,624 |
|
| Workers'
profits participation fund |
|
6,631 |
4,547 |
|
| Workers'
welfare fund |
|
2,677 |
2,107 |
|
|
-------- |
-------- |
|
|
70,452 |
116,278 |
|
|
| Profit
before taxation from refinery operations |
|
123,065 |
83,584 |
|
| Taxation |
|
24 |
63,065 |
68,584 |
|
|
-------- |
-------- |
|
| Profit
after taxation from refinery operations |
|
60,000 |
15,000 |
|
|
| Income
from non-refinery operations less |
|
| applicable
charges and taxation |
|
25 |
21,806 |
30,035 |
|
|
-------- |
-------- |
|
| Profit
for the year after taxation |
|
81,806 |
45,035 |
|
| Unappropriated
profit brought forward |
|
15,782 |
747 |
|
| Transfer
from revenue reserve |
|
12,450 |
- |
|
|
-------- |
-------- |
|
| Available
for appropriations |
|
110,038 |
45,782 |
|
| Appropriations |
|
| Transferred
to reserve for issue of |
|
| bonus shares |
|
50,000 |
- |
|
| Dividend
- Interim - (1995: 20%) |
|
- |
30,000 |
|
| Dividend
- Final @ 40% (1995: Nil) |
|
60,000 |
- |
|
|
-------- |
-------- |
|
|
110,000 |
30,000 |
|
|
-------- |
-------- |
|
| Unappropriated
profit carried forward |
|
38 |
15,782 |
|
|
======== |
======== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
Cash flow statement for
the year |
|
|
ended June 30, 1996 |
|
|
