On behalf of the Board of Directors, I am pleased to

present the Company's 33rd Annual Report which

includes the Audited Financial Statements of the

Company together with Auditors' Report thereon for the

year ended June 30, 2011.

The Company's financial results have significantly

improved in comparison to the preceding year.

Favourable trend in international prices of

petroleum products and crude oil resulted in an

improved Gross Refiner's Margin (GRM). This has

enabled the Company to earn profit after tax of Rs 1,117

million from refinery operations as compared to loss of

Rs 476 million in the year 2009-10.

After accounting for non-refinery income of Rs 1,068

million the profit after tax for the year ended June 30 ,

2011 was Rs 2,185 million with an EPS of Rs 25.63 (June

30, 2010 : Rs 126 million and Rs 1.48 respectively).

1. FINANCIAL RESULTS

The financial results for the year ended June 30, 2011 are

summarized below:

Less: Provision for taxation

Profit after taxation from refinery operations

Income from non-refinery operations less applicable charges and taxation

Dividend recommended 171

Rs in million

Profit before tax from refinery operations (after including other income of Rs 1,565 million )

Profit for the year

Un-appropriated profit brought forward

Profit available for appropriation

Less: Transfer to reserve for expansion/moderni-zation as per the stipulations of the pricing formula

2,673

1,459

971

2,185

1,068

1,117

1,375

2,492

Directors’ Report

24

2. PRICING FORMULA

The Company continues to operate under the Refineries

Import Parity Pricing Formula, as modified from time to

time, whereby it is charged the cost of crude on 'import

parity basis and is allowed product prices equivalent to

the 'import parity' price, calculated under prescribed

parameters.

Effective June 1, 2011 the Government has notified

deregulation of the prices of Motor Spirit (MS), High

Octane Blending Component (HOBC), Light Diesel Oil

(LDO) and Aviation Fuels (JPs) subject to certain

conditions including setting up and commissioning of

Isomerization unit and Diesel Hydro De-Sulphurization

project by June 2014.

Ex-refinery price of the above petroleum products

cannot be more than the Pakistan State Oil (PSO) average

actual import prices of the previous month excluding

incidentals/wharfage. In case of non availability of PSO

import prices, the refineries will fix their ex-refinery price

as per existing Import Parity Pricing formula parameters

excluding incidentals & wharfage. However, in no case

the above referred import price will exceed the import

parity price. The ex-refinery prices of High Speed Diesel

(HSD) and Superior Kerosene Oil (SKO) will continue to be

determined/notified by the Oil and Gas Regulatory

Authority (OGRA) as per existing practice.

0

200

400

600

800

1,000

1,200

1,400

1,600

20102007 2008 2009 2011

PRODUCTS' PRICES $ PER TON

PMG KERO H.S.D. F.F.O.

010,00020,00030,00040,00050,00060,00070,00080,00090,000

100,000110,000120,000

2007 2008 2009 2010 2011

Motor Gasoline Export Naphtha Diesel Kerosene / Jet Fuels

FFO Asphalt Others

25

SALES REVENUE COMPOSITION (Rs in million)

The management of the Company envisages that

de-regulation of prices will have positive impact on

refineries' margin. Further, installation of Isomerization

unit will enable the Company to convert more quantities

of naphtha to PMG which is more valuable product.

The refineries have taken up few matters with the

Government relating to the pricing formula including

mechanism for pricing of few products and removal of

capping on dividend etc.

The Directors have recommended a cash dividend at the

rate of 20% (Rs 2 per share) for the year ended June 30,

2011.

The issued, subscribed and paid-up capital of the

Company as at June 30, 2011 was Rs 852.93 million.

However, under the existing pricing formula, the

maximum profits available for distribution from refinery

operations cannot exceed an amount equivalent to 50%

of paid-up capital of Rs 291.6 million existing on 1st July

2002.

During the year the Company operated under extreme

financial constraints due to the Circular Debt Issue

arising from overdue trade debts payable by OMCs,

particularly PSO. The outstanding receivables by the

Company accumulated to over Rs 41 billion. To handle

the liquidity crisis the Company had to resort to the

extreme measure of withholding payments due to its

crude suppliers and discount on crude oil payable to the

Government and at one point stopping supplies to PSO

and curtailing crude uplifting from some of the oilfields.

After lot of efforts and follow ups with the Government,

part of the circular debt was settled in May 2011. As at

June 30, 2011, the circular debt amounts to Rs 17 billion.

3. DIVIDEND

4. SHARE CAPITAL

5. REFINERY MANAGEMENT AND OPERATIONS

2007 2008 2009 2010 2011

25%

50%

75%

100%

0%

4,2479,62111,10712,14514,233

26,202 26,357 29,125 27,924 34,922

Southern Northern

CRUDE RECEIPT BPCD

Motor Gasoline Export Naphtha Diesel Kerosene / Jet Fuels

FFO / LSFO / RFO Asphalt Others

21%

10%

29%

13%

22%

4%

1%

18%

13%

31%

14%

20%

3%

1%

26

Due to the prudent methodology adopted by the

management, the Company maintained uninterrupted

supplies and still managed to successfully operate the

refinery at 97% capacity. The refinery throughput was

14.289 million barrels (2010 : 13.493 million barrels).

As in the past crude oil was received from both northern

and southern oilfields. The allocation of southern crude to

the Company is based on the national freight economics

and foreign exchange savings as a result of processing this

crude at the Refinery. It has resulted in savings of

Rs 47 million (2010 : Rs176 million) in freight and foreign

exchange savings of US $ 25 million (2010 : US $ 54 million)

during 2010-11 and accumulated savings of over Rs 2.923

billion and US $ 411 million respectively since

commencement of these supplies from November 1997.

Further the entire indigenous crude production from the

northern region including enhanced production from

certain fields continued to be processed at the Refinery.

A total of 14.296 million barrels of crude oil (2010 : 13.704

million barrels) was received from 70 different oil fields

which were successfully processed at various units. Your

refinery has the unique capability and distinction of

processing varied quality of both heavy and light crude oil

produced from fields across the whole country.

All the crude processing units operated smoothly. The

Company supplied 1.755 million Tons (2010 : 1.680 million

Tons) of various petroleum products during the year,

meeting the standard quality specifications.

6.1 Naphtha Isomerization and Pre Flash

Units

In continuation of its vision of sustainable development, the Company is in the process of

upgrading its refining facilities. In this regard

following units have been planned :

i

6. ONGOING AND FUTURE PROJECTS

) Pre-flash unit to enhance refining capacity by

10,400 BPD

ii) Naphtha Isomerization Unit to enhance

production of PMG by 20,000 Tons/month

Basic designs of Pref lash unit and

Isomerization unit were carried out by

M/s CB&I- USA and M/s UOP - USA

20102011 SALES VOLUME MIX

respectively whereas the basic design of

utilities and offsites was carried out by

M/s ENAR Petrotech Services Pakistan.

Installation of these two units will result not

only in increased refining capacity of the

Company but, will also help in attaining

improved specification and reduced

aromatic content of petrol.

Bids received from internationally reputed

EPCC contractors for these projects are

under evaluation.

6.2 Diesel Hydro Desulfurization Unit

The Company plans to install a Diesel Hydro

Desulfurization Unit (DHDS) to reduce sulfur

content in High Speed Diesel in order to meet

Euro Standards. Front End Engineering Design

(FEED) for this process has been done by

M/s UOP USA, the world's leading

Licensor and Technology provider. The

recent de-regulation of petroleum products by

the Government is also conditional subject to

setting up and commencing of DHDS project by

June 2014.

Since this is a cost intensive project with

insignificant value addition, refineries had

jointly asked the Government to provide some

incentives for installation of DHDS project.

However, the Government has only allowed

Euro-II grade HSD price in this respect.

6.3 White Oil Pipeline Project

The pipeline project is on hold due to numerous

reasons including exponential rise in capital

costs because of delays and consequential tariff

considerations. Recently, a prospective joint

venture partner has shown interest in the

project. Being a capital intensive project, the

Company plans to reactivate it after ensuring

Government support including throughput

guarantees and o t h e r i n c e n t i v e s t o

materialize this infrastructure project of

national interest.

6.4 Other Projects - Storage Capacity

New product storage tank of Jute Batching Oil

having capacity of 500 MT was completed

during the year. This will help to ensure

operational flexibility.

At ARL learning & innovation and quality being the core

values, the Company remained engaged in its efforts to

improve process and administrative efficiency

throughout the Company through various activities

of business process re-engineering and review to

further improve its product quality and slate and

simultaneously boost production efficiencies. Major

efforts in this direction are outlined below :-

7. BUSINESS PROCESS RE-ENGINEERING,

RESEARCH & DEVELOPMENT

27

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•

•

•

•

•

•

•

•

•

During the year 2010-11 Catalytic Platformer

Unit turnaround and catalyst regeneration was

carried out from 1st June 2011 to 2nd July 2011.

Reformer charge heater and inter-heater tubes

were also changed during plant turnaround.

HBU-I turnaround was successfully carried out

from 17th to 28th October 2010. While Lummus

Plant turnaround was successfully carried out

from 15th to 27th March 2011.

As a part of continuous improvement program,

Lummus plant instrumentation is being

changed from old pneumatic system to new

Programmable Logic Control (PLC) system. This

will provide better control for optimized

production and improvement in plant safety.

Record production of HSD (535,000 tons) was

achieved. This has been achieved with

optimized blending and efficient plants

operations.

Third party certification for Bowser Calibration

Facility was done by SGS-Pakistan.

State-of-the-art earthing system at product

filling gantry and dipping platforms has been

installed to eliminate the hazard of static

charge.

A new pump of higher capacity was installed on

the vacuum over head vessel-008 in order to

enhance HSD recovery.

New Additive Dispensing Unit was installed on

Jet fuel line for optimized online injection of Jet

Fuel additives.

State-of-the-art Safety Integrity Level probes

(SIL 3) were made part of boiler control system

for three Fire Tube Boilers and one Water Tube

Boiler to enhance safety.

New aeration system installed at Drinking

Water Treatment plant to improve drinking

water quality.

Corporate Social responsibility is one of the Core Values

of the Company. The Company has a long history of

carrying out its obligations as a responsible Corporate

citizen and meeting its responsibility with respect to

protection and promotion of interest of its customers,

employees, shareholders , communit ies and

environment in all aspects of its operations. Various

activities conducted in this area are enumerated below :

8. CORPORATE SOCIAL RESPONSIBILITY

8.1 Corporate Philanthropy

i) The Company has traditionally been

patronizing limited maintenance of The

Rawalpindi Golf Club which is in the near

vicinity of the Company. In this connection it

provides diesel in limited quantities for

consumption in appliances employed for the

upkeep of the Golf Course. The cost of fuel

supplied during the year amounted to

Rs 1.4 million.

ii) In order to provide assistance to a special

school for hearing impaired children and

NGO (Pak Darakhshan) for helping disabled

women, the Company is providing limited

fuel supplies to their vehicles at an annual

cost of over Rs 381,000.

8.2 Energy Conservation

The Company continues with its internal

programme to conserve energy by creating

awareness among its employees. For this

purpose, employees are encouraged to avoid

unnecessary consumption of electricity, gas and

water to save these precious national resources

when the country is facing a crisis in meeting the

demand for these utilities. Additionally, a

number of initiatives have been taken to

optimize energy consumption in the refinery by

introducing fuel efficient processes. Further

public awareness programmes are also

conducted on the subject.

8.3 Health, Safety, Environment and

Protection Measures

In view of the HSEQ policy which believes that achieving and maintaining high standard of health, safety and environment is integral to success of the business performance and objective. Your company is committed to protect the environment and to ensure the health and safety of its employees, contractors and customers and work for the continual improvement of Health, Safety, Environment and Quality (HSEQ) Management Systems.

In this direction the Company conducted following activities and programs:

i) World Biodiversity and E nvironment D ays

To commemorate the international

declaration on World Biodiversity, the

Company arranged a walk in which people

from various fields of life including NGOs and

educational institutes participated. The 28

Company also held a conference on World

Environment day which was attended by

representatives of faculty of universities and

officials of Government Environment

Protection Department.

ii) Tree plantation - 2011

Attock Refinery Limited in collaboration with

NCPC and Environment Protection

Department Punjab has planted many

species of trees in the community such as in

Gulshanabad, Roots School System and

other educational institutions. ARL has also

carr ied out p lantat ion at Morgah

Biodiversity Park in which many endangered

species of flora and fauna have been

conserved.

iii) Morgah Biodiversity Park

The Company continues to support the

Morgah Biodiversity Park which provides a

healthy environment, entertainment and

education to the visiting community. This

Park had been sponsored by the Company in

c o l l a b o ra t i o n w i t h U N E S C A P fo r

conservation of biodiversity of the Potohar

Region.

iv) National Cleaner Production Centre

National Cleaner Production Centre (NCPC),

a company limited by guarantee not having

share capital, is an associated company of

ARL. NCPC has carried out several

Environmental Impact Assessments (EIA)

and other analytical services in relation to

waste water and flue gases on behalf of

several companies and organizations. NCPC

also provided incineration of refinery waste

and bio-remediation of oil spill services in

cases where crude oil transportation

accidents occurred. It is also providing

incineration services for hospital waste to

various local hospitals. Activities of NCPC are

conducted on a self-financing basis.

8.4 Community Investment and Welfare

Schemes

ARL is providing several community services for

the welfare of the surrounding population in

the v i c in i ty o f the Ref iner y. These

include provision of electricity, water and gas

facilities to schools and mosques and limited

maintenance services for these buildings. The

company has also provided well maintained

sports grounds for hockey and cricket

alongwith other sports facilities at which the

employees and their children engage

themselves in healthy activities. The total

expenditure on such activities amounted to

over Rs 1.650 million.

8.5 Welfare Spending for Under-Privileged

Classes

i) Attock Sahara Foundation (ASF), a Company

sponsored NGO, is playing a vital role in

uplifting the economic conditions of the

surrounding communities through various

welfare activities carried out during the year.

These included vocational training, computer

classes, financial and dowry assistance,

medical assistance through Private Patient

Poor Fund, elementary education etc. Such

activities are carried out by ASF on a self

financing basis by generating funds

through fund raising activities. ASF's annual

expenditure is over Rs 8.7 million. The

Company provides organizational support in

administration, f inance and routine

operations of ASF.

ii)ARL is also providing Education allowance for

the children of the widows and free provision

of electricity, gas and water for a period of 4

years in respect of deceased employees of

the Company. Moreover, disabled children of

Company’s workers are also provided with

children disability assistance allowance. The

total annual expenditure on this account

amounted to over Rs 630,000.29

iii) Being a socially responsible organization

Attock Refinery Limited in collaboration with

Attock Hospital Private Limited and Attock

Sahara Foundation also arranged a free

medical camp, on April 23, 2011 at AHL. The

objective of setting up this free medical camp

was to assist the poor people of vicinity who

could not afford proper medical treatment.

The outcome of the medical camp was

extremely positive as over 900 patients were

examined and treated for different types of

ailments. They were also given free

medicines which were arranged by the

donations from Attock Sahara Foundation

and different Pharmaceutical Companies.

Specialist Consultation was also arranged.

Gynecologist, Surgeon, Medical Specialist

and Pediatrician offered their voluntary

services for the medical camp.

Special arrangements were made to check

blood sugar levels and specialized tests of

BMB (bone marrow density) were carried out

with the collaboration of pharmaceutical

companies. Both these tests were conducted

free of charges.

8.6 Industrial Relations

The Company believes in maintaining cordial

industrial relations with its employees and their

Collective Bargaining Agent (CBA) and is always

taking measures towards the employees'

welfare. The Company provides subsidized

food at its canteen, heavily subsidized atta on

monthly basis, sports facilities and gymnasium,

club catering refreshments at subsidized rates

and providing entertainment, TV and

newspapers, free Ramazan package, school and

college pick/drop facilities, quarterly and

annual awards for good performance, long

service awards. Hajj and Umra facility is also

provided to 8 workers annually.

The total cost incurred in this connection

amounted to over Rs 23 million.

8.7 Employment of Special Persons

In order to provide employment opportunities

to special persons and to provide them a

chance to earn respectable living thus making

them useful members of the society, the

Company has allocated a quota for such

persons and ensures that it keeps under

employment the allocated numbers. The cost

for employment of such workers amounts to

Rs 2.2 million.

8.8 Business Ethics and Anti-Corruption

Measures

Your Company voluntarily adopted the ten

principles of United Nations Global Compact

(UNGC) during 2008 and since then is fully

complying with such standards in our business

practices in letter and spirit. ARL is also

monitoring the ethical conduct of its business

and its employees and any case of violation is

referred to an Ethics Committee constituted for

this purpose.

ARL Policy of Ethics and Business Practices is a

testament to the Company's commitment to

ethical and transparent business practices.

To ensure that there is no discrimination

on account of gender and justice is ensured, the

Company not only provides equal opportunity

for employment but has also set up a special

committee on Gender Justice that ensures that

all grievances and complaints of harassment

are promptly addressed.

8.9 Rural Development

The Company's refinery and colony is located in

the areas adjoining the two Union Councils i.e.

Morgah and Kotha Kalan. The Company is

paying an annual contribution of Rs 150,000 to

the two Union Councils as contribution towards

their development expenditure which is shared

equally with another associated company.

8.10 Other CSR Activities

i) To mitigate the sufferings of the flood

affected people of Pakistan, the Company

carried out the following flood relief activities

during the massive floods that hit our country

in July 2010. Total contribution on this

account was over Rs 4 million.

a) Delivery of Free Food Items

Proper survey was carried out in the flood

affected areas and then people were given

relief goods at their door steps in a

transparent manner. ARL distributed 1,000

packets of food items in the flood affected

areas of Nowshera district. Similarly 1,000

packets of Atta (10 Kg each) were also

distributed. We distributed 100 jerry cans (15

liter each) for drinking water. Attock Sahara

Foundation (ASF), an NGO sponsored by ARL

also provided 450 steel tube cots in the flood

affected areas of Nowshera district. To

express solidarity with the people affected by

the f lood, the Company cancel led

30

its previously planned functions on Pakistan

Independence day and Annual Iftar Dinner

and diverted the savings towards the

delivery of above food items. ARL CBA Union

also set up a flood relief camp in ARL

premises. About six tons of food items were

collected through this camp. All these items

were sent to flood affected areas of

Mianwali.

ARL also supplied additional volumes of Jet

Fuel, PMG etc to assist in the relief activities

in different parts of the country.

b. Free Medical Camps

i) Attock Hospital (Pvt) Ltd, a wholly owned

subsidiary of ARL arranged two free medical

camps in flood affected areas of Jahangira

and Nowshera. Medical officers, medical

specialist, gynecologist, skin specialist were

available at these camps. About 3,000

people underwent medical checkup by the

doctors in both the camps. The patients

were also provided free medicines.

ii) Continuing the tradition of encouraging

green and beautiful environment your

Company conducted the 62nd Annual

Flower and Vegetable Show of Morgah Club,

on Friday April 8, 2011 on which prizes were

distributed among the winners by the

Chief Guest Mr. Farooq H. Naek, Chairman

Senate.

iii) Your company is not oblivious of the fact that

the talented children of our employees need

considerable support and encouragement in

these difficult times. ARL management

offers scholarships from class 1 to PhD to

employees' children. During 2010-11

scholarships were awarded to 59 students at

different levels. Similarly 20 bright students

amongst employees' children who got

excellent marks in their Secondary and

Higher Secondary Board exams were

encouraged through token gifts. This

support is enabling our employees to get

quality education for their children; as such

ARL is cultivating the seeds of hope for

better tomorrow. The Company is incurring

an annual cost of Rs 1.6 million on these

scholarships.

iv) The Company is also operating an extensive

management training programme whereby

fresh graduates from different faculties are

provided a 1 to 2 years training contract to

enable them to get practical on hand

experience to enable them to seek

employment. The Company is similarly

operating an apprenticeship programme for

the workers under its regular apprenticeship

scheme. Further, regular internships are also

offered to students f rom var ious

universities. The annual expenditure on

these training schemes amounts to over

Rs 15.758 million.

8.11 Contribution to the National Economy

Attock Refinery being the only refinery located

in the Northern Region of Pakistan continues to

hold a very strategic position. Due to its

strategic location the Refinery is playing a

pivotal role in the oil and energy sector. The

contributions made by the Company to

the National Economy are outlined below:

Providing an outlet to country's indigenous

production of crude oil and more

particularly from the Northern Region.

Crude oil is received from more than 70

oilfields spread over the country.

Meeting the petroleum products demand of

both the civil and defense market.

Increasing the production of value added

deficit product i.e. high speed diesel (HSD)

thereby further saving valuable foreign

exchange required f or it s im port.

Generation of Government duties and taxes

in the form of excise duty, petroleum

development levy, sales tax and customs

duties on crude oil and sale of petroleum

products both local and exports.

Deployment of a large transportation fleet

for crude oil and products movement.

Employment and work opportunities.

The Company's contribution to the national

exchequer in the form of taxes and duties

a m o u n t e d t o o v e r R s 2 4 . 5 6 b i l l i o n .

Further, foreign exchange savings of US $ 180

m i l l i o n w e r e a c h i e v e d t h r o u g h i m p o r t

s u b s t i t u t i o n a n d e x p o r t s . A d d i t i o n a l l y,

freight pool savings of Rs 47 mill ion were

a c h i e v e d o n a c c o u n t o f p r o c e s s i n g o f

southern crude oil.

The Company's credit rating assessment was currently

conducted by the Pakistan Credit Rating Agency (PACRA)

and has been maintained at 'AA' (Double A) for the long

term and 'A1+' (A One Plus) for the short term. These

ratings denote a very low expectation of credit risk

•

•

•

•

•

•

9. CREDIT RATING

31

emanating from a very strong capacity for timely

payments of financial commitments.

Your Company considers its human resource as the most

valuable asset and remains committed to ensuring that

all employees are treated with dignity and respect and

that the working environment is one where each

employee's contribution is recognized and valued.

Various steps taken by the Company for the development

of its human resource capital are outlined below :

10.1 Employee Development and Training

Training and development plays a vital role in

molding employees for current as well as future

organizational requirements. Since we

consider our human resource as the prime

resource, we continuously endeavor to ensure

systematic enhancement of their technical and

managerial competence through well rounded

training and development. Training plan forms

a part of our performance management

strategy and is formulated on the basis of

training need assessment, staff career

plans, succession plan and other organizational

requirements etc.

10.2 Employees Relations

Maintenance of a congenial atmosphere at

work place is one of the top priority of your

Company. The relations between workers’

Union and management are based on the

principles of mutual trust, respect, and open

communication. Workers participation is

ensured through their involvement in decision

making process with their representation in

Workers Management Council and Central HSE

Committee and various other committees. The

Company considers its workers as partners in

continued success of the Company.

10.3 Performance Awards

High performance and commitment of workers

is encouraged at ARL through a quarterly award

“Man-of-Quarter Award”. The period in focus

witnessed three such Award ceremonies. These

performance awards give a great impetus to

employees' efforts towards high performance.

10.4 Safety Awards

Workers' safety and process safety are given

prime importance at ARL as we consider our

workers and employees as our prime asset. In

order to inculcate a sense of safety

consciousness in our employees and workers,

the company holds Safety Awards ceremonies

regularly on quarterly basis. Such awards are

10. HUMAN RESOURCE DEVELOPMENT

given to those workers who set high standards

of safety consciousness in their normal

working. This process has helped a lot in

maintenance of safety culture in the Company.

To create a sense of positive competition

among departments, a Quarterly Safe-Man-

hours Trophy is awarded to a Department for

taking concrete measures to ensure safe

working environment including safe man-

hours. This has considerably boosted our

efforts to engage all levels of staff in exhibiting

even more safety consciousness. Similarly,

Safety Week was also celebrated and Safety

Walks held to strengthen safety culture in the

Company.

10.5 House Keeping Awards

Cleanliness and tidiness is promoted in the

organization through conduct of Housekeeping

competitions on quarterly basis. The company

discourages poor housekeeping and considers

it as one of the prime contributing factors that

affect productivity as well as workers' safety.

Employees show considerable enthusiasm in

such competitions. And these Housekeeping

competitions are playing a significant role in

molding the positive safety attitude

of employees.

10.6 CBA-Management Relations

ARL Management believes in achieving high

performance and success through working

relationship with workers' unions based on

mutual respect, trust, professionalism, and co-

existence. Our history depicts exemplary

relations between Collective Bargaining Agent

(CBA) and Management.

10.7 Workers Rel ig ious Obl igat ions

Performing Scheme

As a part of our endeavors of caring for workers,

we have a scheme of facilitating pilgrimage to

their respective holy places in line with their

religious beliefs. Muslim workers are sent to

perform Hajj / Umra. Similarly the Hindu and

Christian workers are facilitated to perform

pilgrimage of their sacred places.

10.8 Scholarships for Talented Students

Education of our employees' children is an area

of major interest for the Company. We are not

oblivious of the fact that the talented children

of our employees need considerable support

and encouragement in these difficult times.

ARL management offers scholarships from

class 1 to PhD to employee children. During

32

2010-11 scholarships were awarded to 59

students at different levels. Similarly 20 bright

students amongst employees' children who got

excellent marks in their Secondary and Higher

Secondary Board exams were encouraged

through token gifts.

Following efforts have been made to ensure

organizational development.

11.1 Succession Management

Continuity of management strength has been

ensured in the Company through development

and implementation of a comprehensive

succession plan. Now we have a defined second

line of defense for most critical positions in ARL.

The identified successors are being developed

through well thought out development plans,

membership in committees and relevant

project teams, qualification enhancement,

participative management, and all types of

relevant technical and managerial trainings.

11.2 Apprenticeship Seminar

ARL, in collaboration with Regional Directorate

of Apprenticeship Training, Technical Education

& Vocational Training Authority (TEVTA),

Punjab organized a seminar on Awareness,

Promotion and Expansion of Apprenticeship

Training on May 10, 2011. The participants

included representatives of local industry,

Government functionaries, and TEVTA officials.

11.3 Implementation of Up-graded HRMS

Human Resource Management System has

already been implemented in the Company. A

project to up-grade this system (Oracle

developer 6i to 10g) is under way. On

completion of the project the system will

become web based opening a world of new

options.

11.4 Customers Awareness Process

A four week training course was designed

and conducted at ARL for Army Officers in

collaboration with GHQ and Army Services

Corps (ASC) School, Nowshera.

Your Company in its endeavors to seek excellence in all

aspects of its operations has won the following awards

and recognitions:

11. ORGANIZATION DEVELOPMENT

12. CORPORATE AWARDS AND

RECOGNITIONS

12.1 ROSPA Award (Royal Society for

Prevention of Accidents)

ROSPA Awards Adjudication panel has

awarded ARL with ROSPA Silver Award for

Occupational Health & Safety. ROSPA is a UK

based society with the Queen as its

Patron. These awards are based on the

organization's individual occupational

health and safety Performance assessed

against the ROSPA judging criteria. ROSPA

Silver award winner means that organizations

have achieved a high level of performance

underp inned by good management

systems which are delivering consistent

improvement and are working towards the

level of excellence in Occupational Health &

Safety.

12.2 Talent Triangle Award 2010

ARL participated in the Human Resources

Benchmarking Survey (HRBS) 2010 carried out

by Sidat Hyder Morshed Associates (Pvt)

Limited. On the basis of information gathered

in that survey our Company was honored with

“Talent Triangle Award”.

ARL has been adjudged as winner of this

prestigious award in view of its concentrated

efforts to manage its talent based on a triangle

model termed as the talent triangle i.e.

Performance Management, Learning and

Development & Career Planning and

Succession Planning. It is pertinent to mention

here that alignment of all the above three

areas that one supports the other two, is key to

manage talent in a more objective and focused

manner.

12.3 Best Sustainability Report Award 2010

by ACCA & WWF

This award aims to recognize and reward those

organizations which report and disclose

environmental, social and sustainability

performance to encourage the best practices

in environmental, social and sustainability

reporting to raise awareness of reporting

corporate social responsibility issues and

performance. ARL being winner of the Best

Sustainability Report Award for the last three

consecutive years did not contest for the 2010

award. However, due to the outstanding

sustainability Report for the year 2010, ARL

was honoured by a special Commendation

Award.

12.4 Economic Cooperation Organization

(ECO) Green Industry/Company Award

National Cleaner Production Center (NCPC)

33

sponsored by Attock Refinery Limited (ARL)

received the “Economic Cooperat ion

Organization (ECO) Green Industry/Company

Award” on June 09, 2011 at 4th Ministerial

Meeting held at Tehran, Iran.

The Award is given to those industries /

companies of a member state that have made

o u t s t a n d i n g a c h i e v e m e n t s i n t h e

field of environment. NCPC is the first

organization in Pakistan having the distinct

honor to receive this prestigious award.

12.5 Annual Environmental Excellence

Award 2011

N C P C a l s o w o n t h e 8 t h A n n u a l

Environmental Excellence Award 2011 (AEEA)

by National Forum for Environment & Health

(NFEH). The award has been instituted to

recognize and promote the organizations which

have made substantial contributions to

sustainable development.

The Board of Directors and the Company remain

committed to the principles of good corporate

management practice with emphasis on transparency

and disclosures. The Board and management are

cognizant of their responsibilities and monitor the

refinery operations and performance to enhance the

accuracy, comprehensiveness and transparency of

financial and non-financial information.

The Company is fully compliant of the Code of Corporate

Governance and as per the requirements of the listing

regulations, following specific statements are being given

hereunder :

Proper books of accounts of the Company have

been maintained.

The financial statements prepared by the

management present fairly its state of affairs,

the results of its operations, cash flows and

changes in equity.

Appropriate accounting policies have been

consistently applied in preparation of financial

statements which conform to the Approved

Accounting Standards as applicable in Pakistan.

The accounting estimates, wherever required,

are based on reasonable and prudent

judgment.

The system of internal controls are sound in

design and are effectively implemented by

the management and monitored by the internal

auditors as well as the Board of Directors and

the Audit Committee. The Board reviews the

13. CORPORATE GOVERNANCE

•

•

•

•

effect iveness of establ ished internal

controls through the Audit Committee and

suggests, wherever required, further

improvement in the internal control systems.

There are no significant doubts upon the

Company's ability to continue as a going

concern.

There is no reported instance of any material

departure from the best practices of Corporate

Governance.

Significant deviations from last year's operating

results, future plans and changes, if any, in

pricing formula have been separately

disclosed, as appropriate, in the Chairman's

Review and this Report of the Directors.

All major Government levies in the normal

course of business, amounting to Rs 1,132

million, payable as at June 30, 2011 have been

cleared subsequent to the year end.

The value of investment of employees pension,

provident and gratuity funds, as at

31st December, 2010, based on their

un-audited accounts is given below :

An unfunded gratuity provision of Rs 158.401

million als o exist s in the accounts of the Company under deferred liabilities in respect of

its non-management staff.

Key operating and financial data of last 6

years is annexed.

A separate statement of compliance signed by

t h e C h i e f E xe c u t i v e O f f i c e r i s s e p a ra t e l y

included in this Annual Report.

During the year under review, five meetings of the Board

of Directors were held between July 1, 2010 and June 30,

2011 and the attendance of Directors was as under :-

•

•

•

•

•

•

•

14.DIRECTORS AND BOARD MEETINGS

HELD DURING THE YEAR

Rs in million

- Pension Fund

- Provident Fund

Non - Management Staff

Management Staff

Provident Fund-

195.385

144.286

142.747

34

* Leave of absence was granted to the Directors who

could not attend the meeting.

** Overseas directors attended the meetings either in

person or through alternate directors.

During the year the Board nominated Mr. Tariq Iqbal

Khan to fill the casual vacancy occurred as a result of his

resignation being nominee of National Investment Trust

(NIT). The Board also nominated Mr. M. Raziuddin to fill a

casual vacancy occurred due to resignation of Mr. Arif

Habib.

The Auditors Messrs A.F. Ferguson & Co. Chartered

Accountants retired and offered themselves for

re a p p o i nt m e nt . T h e A u d i t C o m m i tte e h a s

recommended the reappointment of Messrs A.F.

Ferguson & Co. Chartered Accountants as auditors for

the financial year ending June 30, 2012.

The total number of Company's shareholders as at

June 30, 2011 was 5,342 as against 6,455 on

15. AUDITORS

16. SHAREHOLDING

Name of Directors

Dr. Ghaith R. Pharaon **

Mr. Shuaib Anwar Malik (Chairman)

Mr. Laith Ghaith Pharaon **

Mr. Wael Ghaith Pharaon **

Mr. Tariq Iqbal Khan

Mr. Abdus Sattar

Mr. M. Raziuddin

Mr. M. Adil Khattak, CEO

No. of board

meetingsattended

Total no. of board

meetings

5

5

5

5

5

5

5

5

5

5

5

5

2*

5

4*

5

June 30, 2010. The pattern of shareholding as at June

30, 2011 along-with necessary disclosures as required

under the Code of Corporate Governance is annexed.

No trading in the shares of the Company has been

reportedly carried out by the Directors, Chief Executive

Officer, Chief Financial Officer, Company Secretary and

their spouses and minor children.

Based on the net profit for the current year the

earning per share was Rs 25.63 (2010 : Rs 1.48).

The Attock Oil Company Limited, incorporated in

England, is the Holding Company of Attock Refinery

Limited.

The Company has a wholly owned subsidiary;

Attock Hospital (Pvt) Limited (AHL). The accounts of

AHL have been consolidated with the accounts of ARL

and are annexed to these accounts.

The results of the wholly owned subsidiary AHL and

associated undertakings, namely Attock Petroleum

Limited (APL), National Refinery Limited (NRL) and

Attock Gen Limited (AGL) in so far as they relate to the

Company's share in these entities have been

incorporated in the enclosed Consolidated Financial

Statements.

17. EARNING PER SHARE

18. HOLDING COMPANY

19. SUBSIDIARY

20. CONSOLIDATED ACCOUNTS

Shuaib A. Malik

Chairman

September 11, 2011Damascus, Syria

35

- SD -