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Attock Refinery Limited
Annual Report 2000
In the name of Allah, Most Gracious, Most Merciful
OUR RECENT ACHIEVEMENTS
Upgradation, expansion and modernisation of
Refinery Processing plants and facilities
First to produce 100% single grade 87 octane low
lead gasoline direct from the Refinery
First to get ISO 9002 certification for the quality
control laboratory
First to produce polymer modified road asphalt
Introduction of various grades of road asphalt to the market
Shifting of crude decanting facility 95 km from Refinery
to maximize use of existing pipeline and ensure safety
CONTENTS
Attock Refinery Limited
Notice of Annual General Meeting
Chairman's Review
Financial Statistical Summary
Directors' Report
Pattern of Shareholding
Auditors' Report to the Members
Balance Sheet
Profit and Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts
Statement under Section 237
Attock Hospital (Pvt) Limited
Company Information
Directors' Report
Auditors' Report
Balance Sheet
Profit and Loss Account
Notes to the Accounts
Consolidated Financial Statements
Auditors' Report
Balance Sheet
Profit and Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts
COMPANY INFORMATION
Board of Directors
Bashir Ahmad
Chairman
Dr. Ghaith R. Pharaon
Istaqbal Mehdi
Mohammad Iqbal Awan
Mohammad Mansoor Zubair
Shuaib Anwer Malik
Laith Ghaith Pharaon
Mofarreh Said AI Ghamdi
Arif Kemal
Babar Bashir Nawaz
Mohammad Raziuddin
Chief Executive Officer
Company Secretary
S. Ahmed Abid
FCA
Auditors
A. F. Ferguson & Co.
Chartered Accountants
Legal Advisor
Zafar Law Associates
Advocates & Solicitors
Registered Office
The Refinery,
Morgah, Rawalpindi.
Tel: (051) 5487041-5 Fax: (051) 5487254
E-Mail: arl@comsats.net.pk
Board of Directors
Bashir Ahmad
Chairman
Dr. Ghaith R. Pharaon
Istaqbal Mehdi
Mohammad Iqbal Awan
Mohammad Mansoor Zubair
Shuaib Anwer Malik
Laith Ghaith Pharaon
Mofarreh Said Al Ghamdi
Arif Kemal
Babar Bashir Nawaz
Mohammad Raziuddin
Chief Executive Officer
COMPANY PROFILE
Attock Refinery Limited is the pioneer of crude oil
refining in the country. With its operations dating back to
1922 and its plants gradually upgraded/replaced with
state-of-the-art hardware, the Company's Morgah Refinery
possesses the capability to process the lightest or the
heaviest crude (presently processing 12 API to 65 API crudes)
found in the country. Its range of petroleum products
includes Premium Motor Gasoline, Solvents, Jet Fuels,
Kerosene, Mineral Turpentine (MTT), High Speed Diesel
(HSD), Light Diesel Oil, Jute Batching Oil (JBO), Furnace Oil,
Cutback Asphalts, Paving Grade Asphalts and LPG. All of its
products are presently consumed locally, meeting 50% of
the requirement of petroleum products of the northern areas
of Pakistan.
Attock Refinery Limited (ARL) was incorporated as a Private
Limited Company in November, 1978 to take over the
business of the Attock Oil Company (AOC) relating to
refining of crude oil and supplying of refined petroleum
products. It was subsequently converted into a Public
Limited Company in June, 1979 and is listed on the three
Stock Exchanges of the country. The Company is also
registered with Central Depository Company (CDC).
Original paid-up capital of the Company was Rs 80 million
which was subscribed by the holding company i.e. AOC,
Government of Pakistan, investment companies and
general public. The present paid-up capital of the Company
is Rs 291.6 million.
The current nameplate capacity of ARL is 35,000 barrels
per day (bpd). Two Distillation Units having capacity of
20,000 bpd and 5,000 bpd were installed in t981to replace
the old aging plants. ARL completed another expansion and
up-gradation project in 1999 installing a Heavy Crude Unit
of 10,000 bpd and a Catalytic Reformer of 5,000 bpd. After
installation of the Catalytic Reformer, 87 RON premium
gasoline is being directly produced from the refinery, without
blending with HOBC or MTBE thus making ARL the first
refinery in the country to achieve this landmark.
The Company's refinery is located at Morgah, Rawalpindi
and comprises of Refinery plants/installations and fully
equipped maintenance workshops, ISO certified Quality
Control Laboratory, crude decanting and tankers calibration
facilities and water supply system. Additionally, the
Company maintains its own township with residential colony
for staff and workers with sports and recreation facilities.
SENIOR MANAGEMENT
Mr. Mohammad Raziuddin
Chief Executive Officer
Mr. M. Adil Khattak
Assistant General Manager
(Maintenance, Engineering &
Human Resources)
Mr. S. Ahmed Abid
Assistant General Manager
(Finance, Procurement & Materials
Management)/Company Secretary
Dr. M. Ilyas Fazil
Senior Manager
(Technical Services,
Planning & Development)
Mr. Anwar Masud Zaidi
Manager (Sales & Commercial)
Mr. Mansoor Shafique
Manager (Operations)
Mr. Zahid Iqbal Qureshi
Manager
Rana M. Akram
Manager (Human Resources)
Dr. A. K. Niazi
Chief Medical Officer (AHL)
Mr. Ejaz H. Randhawa
Manager (Technical Services)
Mr. Yawar Ikram
Manager (Maintenance)
Mr. Haroon-ur-Rashid
Asstt. Manager (Engineering)
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 22nd Annual General Meeting of the Company will be held at
Pearl Continental Hotel, Rawalpindi on Thursday, 21st December 2000 at 9.30 a.m. to transact the
following business:
ORDINARY BUSINESS
1. To confirm the minutes of 10th Extra-Ordinary General Meeting of the Company held on
26th June, 2000.
2. To receive, consider and approve the Audited Accounts of the Company together with the
Directors' and Auditors' Reports for the year ended 30 June, 2000.
3. To consider and, if thought fit, declare a final cash dividend as recommended by the Board
of Directors for the year ended 30th June, 2000.
4. To appoint Auditors for the next year and fix their remuneration.
5. To transact such other business as may be placed before the meeting with the permission of
the Chairman.
SPECIAL BUSINESS
6. To consider and, if thought fit, to pass the following resolution as an ordinary resolution
pursuant to Section 200 of the Companies Ordinance and Article 104 of the Articles of
Association of the Company:
"Resolved that the Board of Directors be and are hereby authorised to approve the terms
and conditions of appointment and also to determine and approve, from time to time,
the remuneration of Chief Executive Officer appointed for a three year term commencing
from July 7, 2000".
					By Order of the Board
The Refinery
Morgah, Rawalpindi					(S. AHMED ABID)
November 30, 2000.					Company Secretary
Notes:
i. A member entitled to vote at this meeting may appoint another member as his/her proxy
to attend and vote. Proxies in order to be effective must be received by the Company
48 hours before the meeting.
ii. Share Transfer Books of the Company will remain closed and no transfer of shares will be
accepted for registration from December 14, 2000 to December 20, 2000 (both days
inclusive). Transfers received in order at the registered office of the Company by the
close of business on December 13, 2000 will be treated in time for the purposes of
eligibility of dividend, if declared.
iii. Shareholders through CDC are requested to bring with them their National Identity Card
alongwith the participant's ID number and their account number at the time of attending
the Annual General Meeting in order to facilitate identification of the respective
shareholders.
iv. Members are requested to promptly notify the Company of any change in their address.
v. Statements of material facts under Section 160 (1) (b) of the Companies Ordinance, 1984
pertaining to the Special Business referred above under agenda item 6 are annexed to this
Notice of Meeting being sent to members.
STATEMENT UNDER SECTION 160 (1) (b) OF THE COMPANIES ORDINANCE, 1984
REMUNERATION OF CHIEF EXECUTIVE OFFICER
Directors had re-appointed Mr. M. Raziuddin as the Chief Executive Officer of the Company for
a further period of 3 years from 7th July, 2000 to 6th July, 2003. As per the Articles of Association
of the Company, remuneration of the Chief Executive is determined by the Board of Directors
if so authorised by the Company in General Meeting.
EXCERPTS FROM THE INAUGURAL SPEECH BY CHIEF GUEST
"Attock Refinery Limited has completed its upgradation and expansion project not only
within the prescribed time frame and envisaged budget but also with a high level of
professionalism and dedication"
"The Attock Oil Company can proudly call itself the pioneers in petroleum exploration,
production and refining in this part of Asia. This Refinery at Morgah, furthermore, has a
significant strategical role in the national security of Pakistan"
"ARL has kept the wheels of economy running and assure supply to the Armed Forces in
northern one-third region of Pakistan during peace and war. I commend the sense of
responsibility. During the 65 and 71 wars the Refinery was attacked by enemy jets
several times but the employees kept on working day and night to support the country.
My full praise for these unsung heroes"
"1 am happy to know that Attock Refinery Limited is successfully processing 17,000
barrels per day of crude oil from the southern fields of Pakistan which otherwise has to
be exported due to technical constraints. This is resulting in considerable savings to the
country both in terms of foreign exchange and affreightment pool. The allocation from
the southern fields must continue till Potohar can fully feed ARL"
CHAIRMAN'S REVIEW
I am pleased to welcome you to the 22nd Annual General Meeting and to present a review
of the operations, audited accounts and annual report of the Company for the financial year ended
30 June, 2000.
REFINERY UPGRADATION AND EXPANSION PROJECT INAUGURATION BY
CHIEF EXECUTIVE OF PAKISTAN
After the successful commissioning of the Naphtha Hydrotreating/Reforming Plant and Heavy Crude
Unit under the Refinery Upgradation and Expansion Project, a formal inaugural function of these
plants was held on 20th May, 2000 at which the Chief Executive, Islamic Republic of Pakistan,
General Pervez Musharraf was the Chief Guest. This function was a big success and was well attended
by a large number of guests including several Federal and Provincial Ministers, Government officials
and foreign ambassadors. The event was given a wide coverage by the electronic and newspaper
media. The success of this function was due to the dedicated efforts of the Company's management,
staff and workers for which they deserve a compliment. Further, the Company also acknowledges its
appreciation of the support received from the Ministry of Petroleum & Natural Resources and other
Government and private institutions in organising this function and make it successful.
PROFITABILITY
Your company continued with its operations smoothly and efficiently and there was no interruption
during the year. The financial results of the Company's operations for the year ended 30 June, 2000 are
given in the annexed Directors' Report and financial statements. These results do not give a very
happy position as the profitability of the Company continued to be affected by the depressed refiner's
margin due to unfavourable movements in the international prices of crude oil and petroleum
products. As the prices rose in the international market, the margin available for the refineries
remained under pressure. Accordingly, the annexed financial results reflect a profit of 10%, net of
tax, on the paid-up capital from the refinery operations.
Your Company strongly feels that there are certain anomalies in the Import Parity Pricing Formula
which require a rationalisation on certain parameters to bring the refinery entitled prices at par
with the true import parity price. In this connection, a joint representation has been submitted
by the Company alongwith two other refineries at Karachi in which it has been emphasised upon the
Government that the rationalisation of the pricing formula needs to be urgently addressed to give a
fair return to the investors as well as create sufficient reserves for future projects relating to the
refineries upgradation and expansion. The matter is under active consideration of the Government.
FUTURE OUTLOOK
Your Company is confident that the coming years hold good prospects for the growth of the Company
which will improve the profitability of the Company with better returns for the shareholders and better
emoluments and working conditions for its employees. Despite difficult economic environment, the
Company is taking new initiatives on its own for the future growth of the Company in particular and
the country in general.
After successful completion and commissioning of two new plants at a total cost of about
Rs 2.4 billion, your Company has formulated another project of laying a product transmission pipeline
for white petroleum products from Rawalpindi to Taru Jabba near Peshawar at a preliminary cost
estimate of Rs 1.8 billion. This project besides being economically viable would result. in eliminating
environmental pollution, decongestion of national highways and prevent adulteration. The project
also entails substantial foreign exchange and rupee savings for the national exchequer. The Company
has formally submitted a proposal to the Government.
CHAIRMAN'S REVIEW
In order to operate the refinery at full capacity, your Company's management has successfully
endeavoured to secure increased supplies of crude oil from the southern region and has also
established a reliable logistics arrangement. The Company believes that the continued availability
of crude oil from the southern region is essential for the uninterrupted operations of the refinery
which is simultaneously yielding substantial foreign exchange and freight pool savings to the country.
As per the recommendations of the Oil Companies Advisory Committee (OCAC) which were
considered at a meeting held under the chairmanship of Federal Minister for Petroleum & Natural
Resources, it has been decided that based on overall national economics, the Company's refinery is
operated at 100% capacity.
The Company has also well defined plans for the future expansion of the refinery, initially by setting-up
a 12,400 bpd Pre-Flash Unit then to ultimately increase its capacity to 100, 000 barrels per day during
next 5 to 10 years period. Future plans also include projects for production of value added products, a
Naphtha Cracker, a Visbreaker and lube oil facilities.
The present Government is gradually deregulating the petroleum sector and as a first step has
deregulated the imports of furnace fuel oil and .allowed the petroleum marketing companies and
refineries to fix the prices on a competitive basis. The Government is also contemplating to
shortly deregulate the import of High Speed Diesel and LPG. Your Company is of the view that the
deregulation process should result in healthy competition without affecting the interests and future
growth of the local refineries and create conducive environment for investment in this sector. The bold
steps being taken by the Government augurs well for the liberalisation of the economy.
TRAINING AND DEVELOPMENT
The training and development of Human Resource of the Company continues to fall in the major
priority area. During the year 1999-2000, 26 in-house courses/seminars were held. 19 technical staff
members were sent on various overseas training programmes during the year. Staff were also
nominated to various technical/management courses and seminars held at training institutions across
the country. Special emphasis was laid on on-the-job training programmes for the management
staff and workers specifically directed towards information technology, safety, quality and
maintenance of equipments. In all, 310 management staff and workers benefitted from these courses.
QUALITY AND KNOWLEDGE MANAGEMENT
After becoming the first oil refinery in Pakistan to receive ISO 9002 Certification for its Quality
Control Laboratory, the Company is now targeting the ISO certification for the whole refinery. In this
direction a detailed review of entire operations and work procedures is being carried out.
Development of Quality management with special emphasis on productivity performance,
rationalisation of activities towards cost savings/profit optimisation and efficient operations is the
immediate goal of the Company. Special incentive awards are offered to the employees to encourage
employees' commitment to Total Quality Management.
The Company is also actively engaged in the process of developing a knowledge base through
assessment of information needs, developing knowledge seeking modes and promoting knowledge
information use. Necessary computer hardware/software facilities are being acquired to provide an
immediate access to the knowledge data base for effective and timely decision making.
EMPLOYEE RELATIONS AND ORGANISATION DEVELOPMENT
I would like to record my appreciation for the efforts and dedication of the Human Resource of the
Company which includes its officers, staff and workers that has enabled the management to run the
Company smoothly and efficiently during the year under difficult circumstances. There has been an
exodus of trained technical staff who left Company's service for better prospects. The Company has
taken cognisance of this issue and is taking measures to remedy the situation.
I am pleased to report that the management continued to have cordial relations with the workers and
the Collective Bargaining Agent (CBA). The previous Labour Settlement expired in June, 1999 and a
fresh 2 years agreement was amicably concluded effective July, 1999. In addition, the workers were
further allowed an increase of Rs 300 per month in their basic pay at the time of inauguration of new
plants in May, 2000.
All the workers of the Company were recently involved in an interactive workshop to develop a vision
and mission statement.' The workers enthusiastically participated in these discussions and appreciated
the gesture of providing them the opportunity to contribute to the Company's long term vision and
mission statement.
The Company has also designed a new Performance Appraisal System for its management staff to
assess and evaluate the individual performances.
SOCIAL RESPONSIBILITY AND COMMUNITY WORK
The Company fully realises its social responsibility and continues to serve the community in the
vicinity of the refinery by providing support for the upliftment of various community services in the
area as under:
a. The medical facilities have been upgraded at the Hospital operated by the Company's
subsidiary where diagnostic facilities like X-Ray and Ultrasound machines, donated by Pharaon
Commercial Investment Group Limited, have been installed and these facilities are now open
at the door steps of the local population.
b. The Fair Price Shop has also been refurbished and in addition to the goods available to the
workers under the Factories Act, a large number of consumer and household goods have been
provided for the benefit of the Company's workers with no additional cost to the Company.
c. Sports activities are being promoted and facilities are being provided to the Company's
employees and their children which serves as a healthy outlet and develops the talent.
d. Continued maintenance of roads and other community services.
ACKNOWLEDGEMENT
Finally, I take this opportunity to express my thanks to all my colleagues on the Board, the
Government, crude oil suppliers, customers, banks and financial institutions and contractors for their
continuing cooperation. The Company firmly believes that as partners for progress, the Company will
continue to enjoy full confidence, cooperation and support from all concerned for the development
and progress of the Company to achieve even better results and to meet the future challenges in the
years ahead.
Before concluding, I also wish to express my thanks for the continued interest and support of our
esteemed shareholders.
					Bashir Ahmad
					Chairman
November 24, 2000
FINANCIAL STATISTICAL SUMMARY
						30 June (Rupees in Million)
		2000	1999	1998	1997	1996	1995	1994	1993	1992	1991
PROFIT & LOSS SUMMARY
Sales (Net of Govt. Levies)		13,129.4	6,422.7	6,582.6	6,528.6	5,112.5	3,834.4	4,746.2	5,165.8	5,179.9	4,750.7
Reimbursement from/(to)
Government		1,656.7</