Hascol Annual Report 2016

Contents
03 Vision
04 Mission
05 Corporate Information
07 Zero Harm Charter
09 Corporate Objectives & Business Strategy
15 Chairman’s Review
17 Directors’ Report
21 Pattern of Shareholding
23 Financial Achievements at a glance
24 Key Operational & Financial Data
25 Notice of Annual General Meeting
33 Statement of Compliance with the Code
of Corporate Governance
35 Review Report to the Members on
Statement of Compliance with the Code of
Corporate Governance
37 Statement of Compliance with the Issue of
Sukuk Regulations, 2015
38 Independent Reasonable Assurance Report to
the Board of Directors on the Statement of
Compliance with the Issue
of Sukuk Regulations, 2015
43 Auditors’ Report to the Members on
Unconsolidated Financial Statements
45 Unconsolidated Financial Statements
50 Notes to the Unconsolidated Financial Statements
86 Auditors’ Report to the Members on
Consolidated Financial Statements
87 Consolidated Financial Statements
92 Notes to the Consolidated Financial Statements
124 Form of Proxy
125 Form of Proxy in Urdu language
130 Directors’ Report in Urdu language
132 Chairman’s Review in Urdu language
In 2005, Hascol Petroleum Limited was since getting listed in line with company’s
granted the Oil Marketing License by the growth having received a credit rating of
Government of Pakistan and ever since, the ‘A+/A-1’ (Single A Plus /A-One) from
company has aggressively invested in JCR-VIS Credit Company Limited.
establishing a countrywide network of over
400 retail fuel stations in four provinces of Hascol has a strategic License agreement
Pakistan and Azad Jammu and Kashmir with FUCHS Middle East (FOMEL), an
under the Hascol brand with further sites associate of FUCHS Petrolub based in
planned during the coming year. Germany, to represent the brand in
Pakistan. The German brand has emerged
The company is all set to jump up a as a tough competitor in the oil lubricants
number on the competitive ladder, sector depicting doubling sales volumes
strategizing its position ahead in terms of year after year. With an estimated cost of
market share. The acquisition of 10 retail USD 20 Million, the company owned Lube
outlets on the Lahore-Islamabad Motorway Oil Blending Plant is expected to start
has strengthened the company’s backbone operations by December 2017. Hascol has
to broaden its network and has given the emerged as a strong competitor for its
Hascol brand a remarkable boost in counterparts in the industry and continues
Central Punjab and has encouraged the to strengthen its footprints.
company’s sales volume and profitability.
Hascol Petroleum Limited is the first OMC
Over the years, Hascol has constructed to market LPG through its Retail Network
storage facilities at Keamari, Daulatpur, for the automotive sector. The company
Shikarpur, MehmoodKot, Machike and has plans to market LPG for domestic
Amangarh with further storages planned at consumers and to develop several Auto gas
Sahiwal, Kotlajam and Thalian. LPG stations across the country in the
coming year to accommodate the ever
Hascol obtained listing on the Pakistan growing demand for energy.
Stock Exchange in August 2014 and its
share price has appreciated significantly
Annual Report 2016 QUALITY PERSONIFIED Page 03
Vision
To become the leading energy marketing company in
Pakistan through operational exellence, talent management,
business diversification and substainable expansion.
Annual Report 2016 Page 04
Mission
To gain recognition and leadership in the hydrocarbon and
energy sectors, by maximizing customer satisfaction and
shareholder value through continuous improvement, high
quality human capital, appropriate technology, and by
adhering to the Company’s Core Values.
Chairman & C.E.O

Mr. Mumtaz Hasan Khan
Directors
Mr. Abdul Aziz Khalid (Nominee of Vitol Dubai Limited)
Mr. Farooq Rahmatullah Khan
Mr. Liaquat Ali
Mr. Najmus Saquib Hameed
Mr. Saleem Butt
Mr. Sohail Hasan
Company Secretary
Mr. Zeeshan Ul Haq
Audit Committee
Mr. Sohail Hasan (Chairman)
Mr. Liaquat Ali (Member)
Mr. Najmus Saquib Hameed (Member)
Strategy Committee
Mr. Farooq Rahmatullah Khan (Chairman)
Mr. Mumtaz Hasan Khan (Member)
Mr. Saleem Butt (Member)
Human Resource Committee

Mr. Najmus Saquib Hameed (Chairman)
Mr. Mumtaz Hasan Khan (Member)
Auditors
Grant Thornton Anjum Rahman
Chartered Accountants
Bankers
Allied Bank Limited
Al Baraka Bank (Pakistan) Limited
Askari Bank Limited
Bank Al Falah Limited
Bank Al Habib Limited
Bank Islami Pakistan Limited
Faysal Bank Limited
First Women Bank Limited
Habib Metropolitan Bank Limited
Habib Bank Limited
Industrial and Commercial Bank of China Limited
MCB Bank Limited
National Bank of Pakistan
Samba Bank Limited
Sindh Bank Limited
Soneri Bank Limited
Summit Bank Limited
United Bank Limited
Share Registrar
Central Depository Company of Pakistan Limited
Legal Advisor
Mohsin Tayebaly & Co.
Corporate Legal Consultants - Barristers & Advocates
Registered Office
The Forum, Suite No. 105-106 First Floor,
Khayaban-e-Jami Clifton, Block - 9, Karachi Pakistan
Phone: +92-21-35301343-50
Fax: +92-21-35301351
UAN: 111-757-757
E-mail: info@hascol.com
Website: www.hascol.com
Hascol Petroleum Limited has initiated a Zero Harm approach in

compliance with its health, safety, environmental sustainability
commitments within the scope of our legal and regulatory
obligations. The spirit of our initiative is to ensure that employees,
contractors, and other stakeholders share a common attitude and
emphasis towards health and safety — whether at work and even
home.
To achieve our commitment Hascol Petroleum Limited has set up the following
guiding principles throughout the business to demonstrate our Zero Harm charter.
Hascol supports health Ongoing risk Benchmark our HSEQ
01 and safety by
proactively
communicating with its
02 assessment of our
operations where
management actively
03 policy with our
strategic partners and
competitors to add
people and implement seeks feedback from value in our standards
programs that employees as our and continually review
addresses specific operational growth them to achieve or
hazards faced in our occurs. even exceed industry
industry. standards.
Our actions have Our initiative has A progressive attitude which
04 a direct consequential
affect to the
environment; so we aim
05 obliged us to prepare
contingency plans to
counter any adverse
06 acknowledges that all
workplace injuries or disease
are preventable; employees
to monitor our carbon event/threat that can are encouraged to report an
foot-print and other potentially disrupt our incident and any near misses;
contaminations/pollutant operations. where a near miss is defined
that occurs in the span of as a situation which could
our operations and have adverse consequences if
mitigate them. circumstances prevailed.
Respect local and Employees have a In conclusion, our belief is
07 international law so that

we set a prime example
in the industry; and
08 responsibility to
identify and isolate any
hazards during tasks,
09 based on a moral obligation
that any contribution we
make today sets the tone for
formulate our operation be it in the office or our future; so we strive to be
in order to avoid any out in operations; and accountable for achieving the
potential breaches; thus our on the job best.
setting an image of a continuous training
responsible organization. program are pivotal for
achieving this mission.
Corporate Objectives and

Business Strategy
At HASCOL, our focus on sustainability
healthy ethics plan is driven by our
long-standing commitment to doing
what is right.
The objective of Hascol Petroleum Limited is to create a retail network

catering the fuel needs of its customer base throughout the country;
reaching remote areas for domestic consumption and to cater the
energy needs of all the industrial clients in an efficient and profitable
manner.
Hascol Petroleum Limited recognizes oil and gas as an energy resource integral to future needs
for economic development in this era of world globalization.
Our business strategy is devised in a manner that ensures fulfilling energy needs in an
environmentally viable and socially responsible conduct. At Hascol Petroleum Limited, our
aspiration is to attain a high standard of performance with robust profitability as well as
strengthening market position in the competitive environment. We closely liaise with our
customers, partners and policy-makers to fulfill everyone's needs.
A reputation is not
built overnight. But
when core values
are in place,
customers give it
recognition for
international
standards, good
governance and fair
play.
they are facing that is affecting their performance. If any

counseling is required, the general management is duly
Hascol Petroleum Limited transacts its notified. Hascol Petroleum Limited prioritises these matters
business based on the following Business as critical business activities, sets standards and targets for
Principles; for which the objectives are improvement, and measures, appraises and reports
performance externally.
stated below:
Economics
Hascol Values It is universally recognized that profitability is essential for
Hascol Petroleum Limited’s employees share a set of beliefs achieving business goals, prosperity and sustainability for
as prescribed by our founding father - Unity, Faith and future growth. It is a measure, both in terms of effciency and
Discipline. We strongly value the importance of trust, brand value that customers will eventually place on Hascol
openness, teamwork and professionalism, and take great pride Petroleum Limited; showing confidence in our products and
in how we do business. HPL also places constant emphasis on services. The business foot-print is conducted in an
employees to demonstrate a high level of discipline in their economical manner; whereby developing the necessary
role and establish a culture of ingenuity; where people are corporate resources for recouping our investment and
welcome to provide feedback/suggestion to the Management guaranteeing profits to develop and produce future energy
and Human Resource. supplies for our customer base. We invest and reallocate our
resources keeping in view all the relevant factors ranging from
Competitive Environment economic, social and environmental on a micro and macro
Hascol Petroleum Limited supports the practical level; so as to justify our decisions making process and their
implementation of free and fair competition amongst the outcome.
industry members. We seek to compete ethically abiding by
the local and international legislation and within the Meetings and Engagements
framework of applicable competition laws in the relevant Hascol Petroleum Limited recognizes that regular dialogue
jurisdiction. Our motto is that honest business practice reaps and engagement with our stakeholders is essential. We are
rewards in the long run for business sustainability. committed to reporting our performance by providing
relevant and reliable information to legitimately interested
Integrity and Honesty parties; subject to any overriding considerations of business
Hascol Petroleum Limited undertakes its operations based on confidentiality in our interactions with employees, business
honesty, integrity and fairness in all aspects of the business, be partners and local communities. We endeavour to listen and
its customers, suppliers, contractors and external respond to their concerns and provide feedback honestly and
partnerships, and expects the same in our interactions. The responsibly. Our employees also follow a stringent rule of
direct or indirect offer, facilitation payments, soliciting or having formal work relations and not to compromise on
acceptance of bribes in any form is unacceptable. Employees principles.
are expected to avoid conflicts of interest between their
private activities and their part in the conduct of company Compliance
business. Insider trading and passing on sensitive company We comply with all applicable laws and regulations of the
information is strictly forbidden. All business transactions on Islamic Republic of Pakistan where we operate. Any breach is
behalf of Hascol Petroleum Limited must be reflected a matter of prompt scrutiny and immediate action against the
accurately and fairly in the financial statements of the perpetrators. Within our organization, we have also internal
company in accordance with established procedures and are procedures which are just as important for our daily tasks.
subject to audit by the external statutory auditors. General Management ensures that employees adhere to our
code of conduct and work procedures and no short-cuts are
Safeguarding the Human Capital taken. Our retail sites ensure the safe disposal of hazardous
Hascol Petroleum Limited has a positive approach to health, material and other elements that cause environmental
safety, security and environmental management in order to pollution.
achieve continuous performance improvement. Our “Zero
Harm Charter” revolves around the contribution and
importance our workforce provides in our growth.
Employees are encouraged to address any personal concerns
to the Human Resource on a confidential basis for any issues
Business based on our Principles as a rule of thumb does not make payments to political
Hascol's core values of unity, faith and discipline coupled with parties or organization, or to their affliates /representatives
honesty, integrity and respect for people are the basis for all whatsoever. The Company does not take part in any
the work we do and are the foundation of our Business external/internal affairs with regulatory bodies unless
Principles. These rules apply to all transactions, and are the compliance issue arises or authorized instruction permits us
basis of the behavior expected of every employee in Hascol to do so. However, with such dealings, Hascol Petroleum
Petroleum Limited at all times. Our reputation is based on Limited has the right to make our position known on any
our actions and it will be upheld if we act in accordance with matters which affect us, our employees, our customers, our
the law and the Business Principles. We encourage our shareholders or the local communities in which we operate,
business partners to follow these principles. We persuade our in a manner which is in accordance with our ethical values
employees to demonstrate leadership, accountability and and the best practices of our company.
teamwork, and through these behaviors, to contribute to the
overall success of Hascol Petroleum Limited. It is the b. Of Employees
responsibility of the management to lead by example, to Hascol Petroleum Limited has encouraged the need of a
ensure that all employees are aware of these principles, and friendly work environment and identified the deal conduct for
behave in accordance with the spirit of this statement. The a decent workplace culture and interaction with all
application of these principles is underpinned by a stakeholders. Harassment has been explicitly stated and what
comprehensive set of assurance procedures which are is unacceptable includes: jokes, insults, threats, and other
designed to make sure that our employees understand the unwelcome actions about a person’s race, gender, age, religion,
principles and confirm that they act in accordance with them. ancestry, social or economic status or educational
background is strictly forbidden. Nor is any employee eligible
As part of the assurance system, it is also the responsibility of to verbally or physically conduct himself/herself that upsets
management to provide employees with safe and confidential another’s work performance creating a fearful or hostile work
channels to raise concerns and report instances of environment. Hascol Petroleum Limited has ensured to
non-compliance. In return, it is the responsibility of the provide safe working environment based on our statements
employees to report suspected breaches of the Business in the “Zero Harm Charter”. Also, we discourage intoxication
Principles to the management. The Business Principles have or use of illegal substance at work premises and employees
been fundamental to how we conduct our business and living violating shall be subjected to disciplinary action. Where
by them is crucial to our continued success. individuals wish to engage in political activities in the
community, including standing for election to public office,
COUNTRY POLITICS they will be given the opportunity to do so where this is
appropriate keeping in view the specific circumstances of that
a. Of Companies particular scenario.
Hascol Petroleum Limited pursues its activities within the
laws and statutes of the Islamic Republic of Pakistan whereby
our aim is to legitimately accomplish our commercial
objectives. The initiatives of Triple Bottom Reporting are
gradually evolving among the corporate circles of Pakistan,
where the pillars of focus are People, Profit and Planet and
Corporate Social Responsibility. Throughout our general
principle statement, there will be extracts of practical
implementation of the TBR charter. Hascol Petroleum Limited
Business Compliance, & Entertainment & Gifts

Gifts, favor or entertainment should not be accepted or
Ethics Guideline provided if it will obligate or appear to obligate the
person who receives it. Employees may accept or give
gifts, favors and entertainment subject to the following
criteria:
We have a Business Ethics Charter by the
• Not against the laws and policies of other parties’
name of BUSINESS, COMPLIANCE & company.
ETHICS GUIDELINE that dictates our • Not intended to serve as a bribe, payoff or to get
commitment to fair dealing and highlighting improper influence.
ourselves as a professional entity in the oil • Should not have been requested or asked to be provided.
• Should not affect business relationship in any negative
marketing sector. Our initiative is to avoid any
manner.
consequential events due to
non-conformance of local and foreign Information Sharing
legislation and be subjected to penal scrutiny. Unless sharing information with external suppliers and
Apart from General Business Principles; customers is against the law or our standard business
practise, Hascol Petroleum Limited shall encourage sharing
Hascol Petroleum Limited has placed this
information when it may improve the quality or use of our
additional guideline for its operational products. Passing on internal memos and confidential
engagement with the relevant stakeholders. documentation / paperwork is strictly forbidden; if Hascol
proprietary information is given outside the company, it has
to be ensured that a written confidentiality and
Customer Relation
non-disclosure agreement is prepared, and that proper
Hascol Petroleum Limited will compete for business
controls are established to manage the flow of information.
aggressively and honestly in the competitive oil marketing
Otherwise, the concerned employee is in serious breach of
industry, and shall constrict itself in the following ways:
the business ethics and subject to prosecution.
• Will not misrepresent any products, services and prices.
• Will not make false claims about our competitors.
General Public Relation
• Product alteration / blending or change in specifications is
Hascol Petroleum Limited considers the general public as its
only allowed if requested by the customer, or permitted
brand ambassador; our brilliance in products and services
by regulation or commercial practice.
must outshine that of competitors; thus allow for our market
• Only supply safe products and services that meet all
share to rise at our desired optimal level. Dispelling rumors
applicable government standards and regulations.
and misinforming about competitors products and services to
the public is highly prohibited and any competitor that
Supplier Relation
indulges in such activities must be dealt with the guidelines
Hascol Petroleum Limited shall ensure all procurement
prescribed by OGRA and other regulations and legislation.
decisions are based on best value received by us and a
Our business ethics guide us to avoid unnecessary
supplier analysis needs to be conducted. Base the purchase of
comparisons and benchmarking of retrospective performance
goods and services only on the merits of price, quality,
of competitors.
performance and suitability.
• Avoid reciprocal agreements or exchange of favors.
Society and Local Communities
• The fee or price paid for goods and services by Hascol
Hascol Petroleum Limited aims to be society’s best friend and
Petroleum Limited shall represent the value of the goods
foster healthy relationships within our communities. Our aim
or services provided. Hascol Petroleum Limited shall
is to monitor possible impacts of the actions we pursue and
ensure its maximum ability to refrain from using suppliers
ensure that we create recreational facilities adjacent to our
who participate in the following activities:
retail outlets with provision of fast food franchise chains. This
• Supply unsafe products or services.
was an idea provisioned by our marketing team to provide a
• Break laws or regulations.
means of light entertainment to the local residents. In
• Hidden deals and unscrupulous commitments.
addition, Hascol Petroleum Limited takes a constructive General Principles, Business, Compliance and Ethics and
interest in societal matters directly or indirectly related to Zero Harm Charter is subject to constant review and
our business and donation payments for social causes are updated as per our business requirements. We seek
made on a regular basis. Two well-renowned charities are continuous feedback from a variety of stakeholders and
regular recipients of our donations. Employees can in some vested interest group as the dynamic and unpredictable
instances given time of for appropriate volunteer work and nature of the oil marketing business demands us to be
can also refer to legitimate registered. proactive.
Responsibilities
Hascol Petroleum Limited recognizes its responsibilities
towards all the stakeholders. The management is responsible I welcome the sincere initiatives of
to continuously assess these priorities and discharge them on any respective reader of our General
the basis of its assessment. These responsibilities pertain to: Principles and overall this report to
• Protect shareholders' investment, and provide competitive present Hascol Petroleum Limited
long-term return; benchmarking other leading companies
in the oil marketing industry as well as to create a brand
with any clarification and
name; and supplement growth of its affliate brand FUCHS. constructive feedback they deem
• Developing and maintaining a staunch customer base by has to be brought to our attention.
providing products and services which offer value in terms
of price, quality, safety and positive environmental and
commercial expertise thereby create a brand loyalty of
Hascol in customers by offering the best possible
products and services.
• Employees are our most important assets and they
receive utmost respect, rights, good and safe working Mumtaz Hasan Khan
conditions and to commensurate them with competitive Chairman & Chief Executive
terms and conditions of employment. We appreciate
innovation and hard work and regular appraisals based on
performance are some of the few means which we use to
promote the development and best use of the talents of
our employees. We recognize that commercial success
depends on the full commitment of all employees.
• The external stakeholders are the contractors, dealers
and suppliers with whom we seek to transact business
which is mutually beneficial. The ability to promote these
principles effectively will be an important factor in the
decision to enter into or remain in such relationship.
• Overall, Hascol Petroleum Limited believes in conducting
our business as responsible corporate members of the
society, to comply with applicable laws and regulations, to
support fundamental human rights in line with the
legitimate role of business, and to give proper regard to
health, safety, security and the environment.
Chairman’s
Review
I am happy to report that 2016 has
been another tremendous year for the
company. Our sales volumes increased
by almost 46% and our profit before
tax was in excess of rupees 2 billion.
As such, we have exceeded the
challenging targets, which the Board
had set for the management. We
ended the year, as the third largest Oil
Marketing Company in the country in
terms of volumes.
The credit for this outstanding

performance goes to senior management
and all the employees who have executed
the Business Plan in a diligent and efficient
manner.
As a result of our performance the share

price of the company has been steadily
increasing and continues to reflect the
superb performance of the company. In
2016, we commissioned ZY terminal at
Keamari, which has enabled us to import
larger volumes of Motor Gasoline and this
has resulted a huge growth in our Motor
Gasoline sales.
Additionally, we completed storage facility

at Mehmood Kot and recently the pipeline
has also been connected with the Papco
Pipeline. We are now in a position to
receive diesel directly via pipeline from
Karachi. This will boost our sales in
Southern Punjab.
As I mentioned in my nine months report, the company has set up a new

joint venture company with Vitol in the name of Hascol Terminals Limited,
which will build 200,000 Tons storage facility at Port Qasim. Construction
work is proceeding at a fast pace and we hope to commission a major
part of the facility by the end of 2017.
Hascol has also acquired a land for Lube Oil Blending and Grease Plant at
Port Qasim. The design work has been completed and recently the
Ground Breaking Ceremony was held to formally inaugurate the
construction phase of the project. We hope to have the plant fully
operational in 2018.
Your company is also entering the LPG business and has applied to
OGRA for LPG Marketing License. We will be setting up a storage facility
at Port Qasim to import LPG and sell bulk LPG to third parties and
through cylinders.
Hascol/Vitol have also started joint venture company for marketing of

LNG in Pakistan. In the joint venture company Vitol will be a 70%
shareholder and Hascol will be a 30% shareholder.Vitol is in the process
of acquiring an equity stake in one of the LNG terminals being set up.
The company will continue with its aggressive plan to develop the Retail
Outlets and new depots to open new sales envelop. By the end of 2017,
our retail network will cross 500 Retails Outlets and two new storage
facilities at Sahiwal and Amangarh will be operational. Necessary land has
also been acquired at Kotla Jam to develop a storage facility to meet the
growing demand, resulting from CPEC.
I would also like to inform the shareholders, that Vitol has exercised the
option to take 10% more equity in the company. Once, all the formalities
will be completed,Vitol will be largest shareholder with 25% equity.Vitol
decision to increase its equity reflects their confidence in the
management of the company and its future prospects.
Moreover, with Vitol as our shareholder, our imports of petroleum

products to meet our growing requirements have been streamlined and
we are able to maintain sufficient stocks at all times due to swift
execution of our import needs by Vitol at competitive prices.
Finally, I would like to thank the Board for their guidance in pursuing an
aggressive business strategy and in making recommendations in our
corporate governance. I would also like to place on record the efforts of
the management team and all employees for efficiently executing the
Business Plan of the company and exceeding the ambitious targets.
I am confident that the future of the company is

now assured and the Board and Senior Management
will continue to reward the shareholders with
attractive dividends.
Mumtaz Hasan Khan

Chairman & Chief Executive
The Directors of 1. FINANCIAL RESULTS

your Company
are pleased to The profit for the year ended 31st December 2016 after providing for administrative, marketing
present the and distribution expenses, financial and other charges amounts to:
Annual Report of
the Company (Rupees in ‘000)
along with
audited Profit before taxation 2,153,975
standalone and Taxation (938,349)
consolidated Profit for the year 1,215,626
financial
(Rupees)
statements and
auditors’ report Earnings per share 10.07
thereon for the
year ended 31st Appropriations and movement in reserves have been disclosed in the Statement of Changes in
December 2016. Equity on page no. 48 of the Annual Report.
During the year the Company has achieved a growth of 46% as compared to last year, with sales volume at 1,862,649 MT. The
Gross Profits have also improved by 65.83%, thereby generating a Profit after Tax of Rs. 1.215 billion in comparison to Rs. 1.133
billion of previous year, showing an increase of 7.27%.
The standalone EPS for the year is Rs. 10.07 which is 7.24% higher than the last year EPS of Rs. 9.39.
2. DIVIDENDS
The Board is pleased to recommend a final cash dividend of Rs. 3.50 per share i.e. 35% for the year ended 31st December 2016,
in addition to the earlier interim cash dividend of Rs. 3.50 per share i.e. 35%. The total dividends for the year stood at Rs. 7.00
per share i.e. 70%. The approval of the members for the dividend will be obtained at the Annual General Meeting of the
Company to be held on 28th April 2017. This approach remains in line with our commitment to provide consistent returns to
our shareholders.
3. COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE
The management of Hascol Petroleum Limited is committed to good corporate governance and complying with the best
practices. As required under the Code of Corporate Governance, the directors are pleased to state as follows:
(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 of the Company have been maintained.
(c) Appropriate accounting policies have been consistently applied in preparation of financial statements and any changes in
accounting policies have been disclosed in the financial statements. The accounting estimates are based on reasonable and
prudent judgment.
(d) International Financial Reporting Standards as applicable in Pakistan have been followed in the preparation of financial
statements and any departure therefrom has been adequately disclosed and explained.
(e) The Company maintains a sound system of internal control which has been effectively implemented and regularly reviewed
and monitored.
(f) There are no significant doubts upon the Company’s ability to continue as a going concern.
(g) There has been no material departure from the best practices of Code of Corporate Governance, as detailed in the listing
regulations.
(h) The key operating and financial data of last six years has been given on page no. 24 of the Annual Report. The significant
deviations in operating results of the Company from last year have been discussed in the Chairman’s Review on page no. 15.
4. BOARD OF DIRECTORS AND MEETINGS OF THE BOARD HELD DURING THE YEAR 2016
During the year, six (6) meetings of the Board of Directors were held and the attendance of each Director is given below:
S. No. Director’s Name Meetings Attended
1 Mr. Mumtaz Hasan Khan (Chairman) 5

2 Mr. Abdul Aziz Khalid 4
3 Mr. Farooq Rahmatullah Khan 6
4 Mr. Najmus Saquib Hameed 5
5 Mr. Sohail Hasan 6
6 Mr. Liaquat Ali 5
7 Mr. Saleem Butt 5
5. BOARD COMMITTEE MEETINGS HELD DURING THE YEAR
During the year, the Audit Committee held four (4) meetings. The attendance record of the Directors is as follows:
1 Mr. Sohail Hasan (Chairman) 4

2 Mr. Najmus Saquib Hameed 4
3 Mr. Liaquat Ali 3
During the year, the Strategy Committee held one (1) meeting. The attendance record of the Directors is as follows:
1 Mr. Farooq Rahmatullah Khan (Chairman) 1

2 Mr. Mumtaz Hasan Khan 1
3 Mr. Liaquat Ali 1
4 Mr. Saleem Butt 1
During the year, the Human Resources Committee held two (2) meetings. The attendance record of the Directors is as follows:
1 Mr. Najmus Saquib Hameed (Chairman) 2

2 Mr. Mumtaz Hasan Khan 2
3 Mr. Liaquat Ali 2
6. CREDIT RATINGS
JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Hascol Petroleum Limited (HPL) at
‘A+/A-1’ (Single A Plus/A-One). Rating of HPL’s secured Sukuk issue of Rs. 2 billion has also been reaffirmed at AA- (Double
A Minus). Outlook on the assigned ratings is ‘Stable’.
7. PERFORMANCE EVALUATION OF THE BOARD
The performance of the Board of your Company was evaluated during the year. The Board members effectively bring
diversity to the Board and constitute a mix of independent and non-executive directors. The overall performance of the
Board is good and the board members are aligned with the results of the evaluation.
8. DIRECTORS TRAINING PROGRAMME
Details have been provided in the Statement of Compliance with the Code.
9. VALUE OF INVESTMENT OF PROVIDENT AND GRATUITY FUNDS
The Company maintains retirement benefit plans for its employees. Contribution to provident and gratuity funds on the
basis of audited financial statements as at 31st December 2016 are as follows:
Rs. (000)
Provident Fund 15,492

Gratuity 27,508
10. CORPORATE SOCIAL RESPONSIBILITY
Your Company has a roadmap with respect to Corporate Social Responsibility to support in the areas of education, health
and environment through various philanthropic efforts. During the current year the Company paid donations amounting to
Rs. 17.52 million to various educational institutions, hospitals and charitable organizations.
11. CONTRIBUTION TO THE NATIONAL EXCHEQUER AND ECONOMY
During the year your Company has made a total contribution of Rs. 47.78 billion to the national exchequer on account of
import duties, general sales tax, income tax and other government levies.
12. EXTERNAL AUDITORS
The auditors Messrs Grant Thornton Anjum Rahman, Chartered Accountants will retire at the conclusion of the
forthcoming annual general meeting and being eligible offered themselves for the re-appointment.
The Board has recommended the appointment of Messrs Grant Thornton Anjum Rahman as Auditors of the Company for
the year 2017, subject to Shareholders’ approval at the next AGM to be held on 28th April 2017.
13. PATTERN OF SHAREHOLDING
The statement of Pattern of Shareholding as at 31st December 2016 is given on page no. 21 of the Annual Report.
14. ACKNOWLEDGEMENT
Our people are the key drivers behind the sustained growth of the Company. The directors acknowledge the contribution
of each and every employee of the Company. We would also like to express our thanks to our customers for the trust
shown in our products. We are also grateful to our shareholders for their support and confidence in our management.
15. FUTURE OUTLOOK
A reasonable indication of future prospects is discussed in the Chairman’s Review on page no. 15.
Thanking you all.

On behalf of the Board
Mumtaz Hasan Khan

Chairman
Pattern of Shareholding
As of December 31, 2016
No. of Shareholder Shareholdings' Slab Total Shares Held
1616 1 to 100 67,658

1329 101 to 500 404,712
2636 501 to 1000 1,833,900
1272 1001 to 5000 2,653,257
167 5001 to 10000 1,210,570
78 10001 to 15000 976,633
40 15001 to 20000 725,712
27 20001 to 25000 615,073
19 25001 to 30000 526,298
7 30001 to 35000 221,004
12 35001 to 40000 447,655
7 40001 to 45000 302,986
6 45001 to 50000 287,546
7 50001 to 55000 368,777
5 55001 to 60000 294,030
4 60001 to 65000 251,015
6 65001 to 70000 400,514
5 70001 to 75000 365,030
2 75001 to 80000 156,578
3 80001 to 85000 248,759
1 85001 to 90000 90,000
1 90001 to 95000 93,816
5 95001 to 100000 500,000
4 100001 to 105000 405,179
1 105001 to 110000 110,000
2 110001 to 115000 220,563
1 115001 to 120000 120,000
2 120001 to 125000 246,000
1 125001 to 130000 127,878
3 130001 to 135000 396,635
2 145001 to 150000 300,000
2 160001 to 165000 321,872
1 165001 to 170000 167,166
1 185001 to 190000 189,156
1 225001 to 230000 226,452
3 235001 to 240000 714,700
1 245001 to 250000 250,000
2 250001 to 255000 504,997
3 265001 to 270000 799,206
1 270001 to 275000 274,426
1 275001 to 280000 279,680
1 295001 to 300000 300,000
3 305001 to 310000 927,100
1 385001 to 390000 390,000
1 455001 to 460000 458,001
1 605001 to 610000 609,146
1 885001 to 890000 886,945
1 1025001 to 1030000 1,026,458
1 1060001 to 1065000 1,064,422
1 1115001 to 1120000 1,116,874
1 1570001 to 1575000 1,572,800
1 1625001 to 1630000 1,625,199
1 1755001 to 1760000 1,759,800
1 2645001 to 2650000 2,649,424
1 2740001 to 2745000 2,740,640
1 3090001 to 3095000 3,091,984
1 3695001 to 3700000 3,700,000
1 4415001 to 4420000 4,415,845
1 8820001 to 8825000 8,822,526
1 11995001 to 12000000 12,000,000
1 18100001 to 18105000 18,101,880
1 34720001 to 34725000 34,724,723
7310 120,679,200
Pattern of Shareholding
As of December 31, 2016
Categories of Shareholders Shareholders Shares Held Percentage
Directors and their spouse(s) and minor children

NAJMUS SAQIB HAMEED 1 5 0.00
SOHAIL HASAN 1 5 0.00
LIAQUAT ALI 1 2,649,424 2.20
SALEEM BUTT 1 266,406 0.22
FAROOQ RAHMATULLAH KHAN 1 274,426 0.23
NAZIA MALIK 1 1,116,874 0.93
MUMTAZ HASAN KHAN 1 34,724,723 28.77
NAJMUS SAQUIB HAMEED 1 53,280 0.04
Associated Companies, undertakings and related parties

MARSHAL GAS (PVT) LIMITED 1 8,822,526 7.31
FOSSIL ENERGY (PRIVATE) LIMITED 2 12,609,146 10.45
Executives 4 76,908 0.06
Public Sector Companies and Corporations 3 352,200 0.29
Banks, development finance institutions, non-banking finance companies,

insurance companies, takaful, modarabas and pension funds 15 6,248,838 5.18
Mutual Funds
CDC - TRUSTEE MCB PAKISTAN STOCK MARKET FUND 1 310,000 0.26
CDC - TRUSTEE PAKISTAN CAPITAL MARKET FUND 1 20,000 0.02
CDC - TRUSTEE JS LARGE CAP. FUND 1 95 0.00
CDC - TRUSTEE MCB PAKISTAN ISLAMIC STOCK FUND 1 85,000 0.07
CDC - TRUSTEE MEEZAN BALANCED FUND 1 90 0.00
CDC - TRUSTEE FAYSAL BALANCED GROWTH FUND 1 30,000 0.02
CDC - TRUSTEE ALFALAH GHP VALUE FUND 1 2,042 0.00
CDC - TRUSTEE AKD INDEX TRACKER FUND 1 13,100 0.01
CDC-TRUSTEE PAK. INT. ELEMENT ISLAMIC ASSET ALLOCATION FUND 1 65,000 0.05
CDC - TRUSTEE AL MEEZAN MUTUAL FUND 1 3,682 0.00
CDC - TRUSTEE MEEZAN ISLAMIC FUND 1 7,545 0.01
CDC - TRUSTEE FAYSAL ASSET ALLOCATION FUND 1 25,000 0.02
CDC - TRUSTEE NAFA STOCK FUND 1 80 0.00
CDC - TRUSTEE MCB DCF INCOME FUND 1 43,500 0.04
TRUSTEE-BMA CHUNDRIGAR ROAD SAVINGS FUND 1 1,500 0.00
CDC - TRUSTEE ALFALAH GHP ISLAMIC STOCK FUND 1 4,337 0.00
CDC - TRUSTEE NAFA ISLAMIC ASSET ALLOCATION FUND 1 114 0.00
CDC - TRUSTEE ALFALAH GHP STOCK FUND 1 3 0.00
CDC - TRUSTEE ALFALAH GHP ALPHA FUND 1 70 0.00
CDC - TRUSTEE ABL INCOME FUND 1 236,500 0.20
CDC - TRUSTEE ABL STOCK FUND 1 3,444 0.00
CDC - TRUSTEE MCB DYNAMIC CASH FUND - MT 1 8,100 0.01
CDC-TRUSTEE HBL ISLAMIC STOCK FUND 1 26,700 0.02
CDC - TRUSTEE ASKARI EQUITY FUND 1 285 0.00
CDC - TRUSTEE KSE MEEZAN INDEX FUND 1 46,998 0.04
MCBFSL - TRUSTEE PAK OMAN ADVANTAGE ASSET ALLOCATION FUND 1 26,500 0.02
MCBFSL - TRUSTEE PAK OMAN ISLAMIC ASSET ALLOCATION FUND 1 36,500 0.03
CDC-TRUSTEE FIRST HABIB ISLAMIC BALANCED FUND 1 1,500 0.00
MCBFSL - TRUSTEE ABL ISLAMIC STOCK FUND 1 995 0.00
CDC - TRUSTEE FIRST CAPITAL MUTUAL FUND 1 93 0.00
CDC - TRUSTEE NIT INCOME FUND - MT 1 48,300 0.04
CDC - TRUSTEE FAYSAL SAVINGS GROWTH FUND - MT 1 3,100 0.00
CDC - TRUSTEE NAFA ISLAMIC PRINCIPAL PROTECTED FUND - II 1 63 0.00
CDC - TRUSTEE NAFA ISLAMIC STOCK FUND 1 36,498 0.03
CDC - TRUSTEE FAYSAL ISLAMIC ASSET ALLOCATION FUND 1 10,000 0.01
ABA ALI HABIB SECURITIES (PVT) LIMITED - MF 1 200 0.00
CDC - TRUSTEE HBL ISLAMIC ASSET ALLOCATION FUND 1 8,400 0.01
CDC - TRUSTEE FAYSAL MTS FUND - MT 1 29,100 0.02
General Public
a. Local 7152 17,514,905 14.51
b. Foreign 3 927,708 0.77
Foreign Companies 18 32,173,498 26.66
OTHERS 66 1,733,894 1.44
Totals 7310 120,679,200 100.00
Share holders holding 5% or more Shares Held Percentage
MUMTAZ HASAN KHAN 34,724,723 28.77

VITOL DUBAI LIMITED 18,101,880 15.00
FOSSIL ENERGY (PRIVATE) LIMITED 12,609,146 10.45
MARSHAL GAS (PVT) LIMITED 8,822,526 7.31
Key Operational and Financial Data

Six Years Summary
2016 2015 2014 2013 2012 2011
Profit and Loss Account Rs/mn
Revenue (Gross) 128,759 94,065 99,061 57,469 29,775 19,584

Revenue (net) 99,508 76,774 84,856 49,820 25,992 17,094
Cost of good sold 95,000 74,018 82,877 48,506 24,996 16,394
Gross profit 4,708 2,839 2,037 1,360 996 699
Operating profit 2,627 1,630 1,237 579 393 257
Profit before tax 2,154 1,197 865 425 292 43
Profit after tax 1,216 1,133 640 392 218 82
Earnings before interest, taxes, depreciation and amortisation 2,987 1,788 1,264 633 464 300
Balance Sheet
Share Capital 1,207 1,207 906 656 656 656

Property, plant and equipment 8,689 6,278 3,291 2,436 1,724 877
Inventory 16,478 8,470 3,474 3,154 617 311
Current assets 33,710 17,916 10,975 6,557 2,595 1,136
Current liabilities 35,035 20,171 12,059 7,630 3,067 1,686
Non current assets 10,940 8,703 4,642 2,798 1,913 1,214
Non current liabilities 3,510 662 459 281 376 205
Surplus on revaluation of fixed assets 1,143 1,257 321 358 396 19
Summary of cash flow statements
Cash flows from operating activities 2,421 4,364 722 948 307 253
Cash flows from investing activities (2,933) (2,290) (1,793) (642) (322) (117)
Cash flows from financing activities 1,785 104 1,367 (214) 311 145
Net cash flows during the year 1,273 2,178 296 93 296 281
Investor Information %
Profitability Ratios
Gross profit ratio 4.73 3.70 2.40 2.73 3.83 4.09
Net profit ratio 1.22 1.48 0.75 0.79 0.84 0.48
EBITDA margin 3.00 1.90 1.28 1.10 1.56 1.53
Cost / Income ratio 0.79 0.74 0.65 1.35 1.53 1.72

Return on equity 0.24 0.25 0.23 0.36 0.33 0.19
Liquidity Ratios Ratio
Current ratio 0.96:1 0.88:1 0.91:1 0.88:1 0.85:1 0.67:1

Quick ratio 0.49:1 0.47:1 0.62:1 0.47:1 0.65:1 0.49:1
Cash flows from operations to sales 2.43 5.68 0.85 1.90 1.18 1.48
Cash to current liabilities 0.22 0.20 0.15 0.11 0.15 0.06
Investment / Market Ratios Rs
Earning / (loss) per share 10.07 9.39 5.89 5.97 3.33 1.94
Breakup value per share without surplus on revaluation of fixed assets 41.12 37.53 30.67 16.54 10.07 6.71
Breakup value per share with surplus on revaluation of fixed assets 50.59 47.94 34.21 22.01 16.11 7.01
Notice of Fifteenth (15th)

Annual General Meeting
Notice is hereby given that the Fifteenth (15th) Annual General Meeting of Hascol Petroleum Limited will be held on Friday,
28th April 2017 at 9:00 a.m. at the ICAP Auditorium, Chartered Accountants Avenue, Clifton Karachi, to transact the following
business:
Ordinary Business
1. To confirm the minutes of the Extraordinary General Meeting of the Company held on 29th June 2016.
2. To receive, consider and adopt the audited accounts of the Company for the year ended 31st December 2016, together
with the Directors’ and Auditors’ reports thereon.
3. To consider and approve payment of final cash dividend of Rs.3.50 per share i.e. 35%, as recommended by the Board of
Directors. This is in addition to the interim dividend already paid at Rs.3.50 per share i.e. 35%.
4. To appoint auditors and to fix their remuneration for the financial year 2017.
5. To transact any other ordinary business with the permission of the Chair.
Special Business
6. To consider and, if deemed appropriate, pass with or without modification, the following resolutions as Special Resolution
for amending the Articles of Association of the Company for the purpose of: (i) compliance with the requirements
prescribed in the Companies (E-Voting) Regulations, 2016 as allowed by Securites and Exchange Commission of Pakistan
(“SECP”) vide SRO 43(1)/2016 dated 22nd January 2016; (ii) transmission of annual financial statements, auditors' report
and directors' report etc. ("Annual Audited Accounts") through CD/DVD/USB instead of transmitting the accounts in hard
copies, pursuant to SRO 470(1)/2016 dated 31st May 2016:
RESOLVED THAT, the Articles of Association of the Company be and hereby are amended as follows:
After Article 42 the following new Articles 42-A and 42-B be inserted:
(i) “(42-A) A member may opt for E-voting in a general meeting of the Company E-voting
under the provisions of the Companies (E-Voting) Regulations, 2016, as amended
or re-enacted from time to time. In the case of E-voting, both members and
non-members can be appointed as proxy. The instruction to appoint execution
officer and option to e-vote through intermediary shall be required to be
deposited with the Company, at least ten (10) days before holding of the general
meeting, at the Company’s registered office address or through email. The
Company will arrange E-voting if the Company receives demand for poll from at
least five (5) members or by any member or members having not less than one
tenth (1/10) of the voting power”.
(42-B) An instrument of proxy in relation to E-voting shall be in the following form:
I/We, ______________ of ______________ being a member of Hascol Petroleum

Limited, holder of ____________ share(s) as per registered Folio No. / CDC
Account No._____________ hereby opt for E-voting through Intermediary and
hereby consent to the appointment of Execution Officer ________________ as
proxy and will exercise E-voting as per The Companies (E-voting) Regulations, 2016
and hereby demand for poll for resolutions.
My secured email address is ________________, please send login details, password and electronic signature through email.
_______________________
Signature of Member
CNIC No._______________
Signed in the presence of:
______________________ _____________________
Signature of Witness Signature of Witness
(ii) Article 103 shall be amended to read as under:

A copy of the Balance Sheet and Profit and Loss Account together with a Copies of Balance Sheet
copy of the Auditors’ report and Directors’ report shall be sent to all and Auditors’ Report to
members in the manner hereinafter provided in Article 103A hereof, along be sent to members
with the notice convening the General Meeting before which the same are
required to be laid at least twenty-one days preceding the Meeting.
After Article 103, as amended above, the following new Article 103-A shall be inserted:
The Annual Balance Sheet and profit and loss accounts, auditors’ report Copies of Annual
and directors’ report etc. ("Annual Audited Accounts") shall be circulated Audited Accounts to be
to the members electronically in the following manner: electronically sent to
the members instead of
hard copies
(i) pursuant to the consent accorded by the members of the Company in

General Meeting held on 28th April 2017, henceforth the Annual
Audited Accounts shall be transmitted to the members through CD /
DVD / USB instead of transmitting the said Accounts in hard copies;
Provided that the requirement of filing the prescribed number of hard

copies of Annual Audited Accounts with the Commission and Stock
Exchange by post shall be fulfilled;
Provided further that the hard copies of the Annual Audited Accounts
shall be supplied to the shareholders on demand, at their registered
address, free of cost, within one (1) week of such demand. For
convenience of the members the Standard Request Form to
communicate their need of hard copies of Annual Audited Accounts
instead of sending the same through CD/DVD/USB along with postal
and email address of Company Secretary / Share Registrar to whom
such requests shall be sent, is given on Company's website
www.hascol.com.
(ii) If a member prefers to receive hard copies for all the future Annual
Audited Accounts, then such preference of the member shall be given
to the Company in writing and the Company provide hard copies of
all the future Annual Audited Accounts to such member.
7. To consider and, if deemed appropriate, pass, with or without modification, the following resolutions, under Section 208 of
the Companies Ordinance, 1984, as a Special Resolution for the purpose of approving investment by the Company in its
associated company, VAS LNG (Private) Limited:
RESOLVED THAT the Company be and is hereby authorized to make an equity investment up to an amount of PKR
300,000,000 (Pak Rupees Three Hundred Million) by way of subscription of 30,000,000 (Thirty Million) new ordinary
shares of the face value of Rs.10 each representing 30% of the total proposed share capital of the VAS LNG (Private)
Limited, a newly incorporated associated company.
8. To consider and, if deemed appropriate, pass, with or without modification, the following resolutions, under Section 208 of
the Companies Ordinance, 1984, as a Special Resolution for the purpose of approving additional equity investment by the
Company in its associated company, Hascol Terminals Limited:
RESOLVED THAT the Company be and is hereby authorized to make additional equity investment up to an amount of
PKR 125,000,000 (Pak Rupees One Hundred and Twenty Five Million only) by way of subscription of 12,500,000 (Twelve
Million Five Hundred Thousand only) new ordinary shares of the face value of Rs.10 each representing 15% of the total
proposed increase in share capital of Hascol Terminals Limited, an associated company.
By Order of the Board
7th April 2017 Zeeshan Ul Haq

Karachi Company Secretary
NOTES:
Closure of Share Transfer Books
The Share Transfer Books of the Company shall remain closed from 22nd April 2017 to 28th April 2017 (both days inclusive).
Transfers in the form of physical transfers / CDS Transaction IDs received in order at the Company’s Share Registrar,
Messrs Central Depository Company of Pakistan Limited, CDC House, 99-B, Block-B, S.M.C.H.S., Shahra-e-Faisal, Karachi,
by close of business on 21st April 2017 will be treated in time to attend and vote at the meeting and for the purpose of the
above entitlement to the transferees.
Participation in the Meeting
Only those persons, whose names appear in the register of members of the Company as on 21st April 2017, are entitled to
attend, participate in, and vote at the Annual General Meeting.
A member of the Company entitled to attend and vote at the Annual General Meeting may appoint another person as his /
her proxy to attend and vote instead of him / her. Proxies in order to be effective must be received at the registered office
of the Company not less than 48 hours before the time of the Meeting and must be duly stamped, signed and witnessed. A
form of proxy is attached herewith in the Annual Report.
Transmission of Annual Financial Statements through Email:
The Securities and Exchange Commission of Pakistan (SECP) through its Notification S.R.O. 787(1)/2014 dated 8th
September 2014 has permitted companies to circulate Audited Financial Statements along with Notice of Annual General
Meeting to its members through e-mail. Accordingly, members are hereby requested to convey their consent and e-mail
address for receiving Audited Financial Statements and Notice through e-mail. In order to avail this facility a Standard
Request Form is available at the Company’s website www.hascol.com, to be sent along with copy of his / her / its CNIC /
Passport to the Company’s Share Registrar.
Please note that giving email address for receiving of Annual Financial Statements instead of receiving the same by post is
optional, in case you do not wish to avail this facility please ignore this notice. Annual Financial Statements will be sent at
your registered address, as per normal practice.
Notice to Members Who Have Not Provided CNIC
SECP vide Notification S.R.O. 19(1)/2014 dated 10th January 2014 read with Notification S.R.O 831(1)/2012 dated 5th July
2012 require that the dividend warrant(s) should bear CNIC number of the registered member or the authorized person,
except in case of minor(s) and corporate members. Accordingly, Members who have not yet submitted copy of their valid
CNIC or NTN in case of corporate entities are requested to submit the same to the Company’s Share Registrar. In case
of non-compliance, the Company may withhold dispatch of dividend warrants under intimation to regulator till such time
they provide the valid copy of their CNIC as per law.
Change of Address
Members are requested to immediately notify the Company’s Share Registrar, Messrs Central Depository Company of
Pakistan Limited of any change in their registered address.
Guidelines for CDC Account Holders
CDC account holders are required to comply with the following guidelines as laid down in Circular No.1 of 2000 dated
26th January 2000 issued by SECP:
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 CDC regulations, shall authenticate his / her identity by showing his / her
original Computerized National Identity Card (CNIC) or original passport at the time of attending the meeting; and
(ii) In case of corporate entities, 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
their registration details are uploaded as per the CDC regulations, shall submit the proxy form as per the above
requirement;
(ii) The proxy form shall be witnessed by two (2) persons whose names, addresses, and CNIC numbers shall be mentioned on
the form;
(iii) Attested copies of CNIC or the passport of beneficial owners and the proxy shall be furnished with the proxy form;
(iv) The proxy shall produce his / her original CNIC or original passport at the time of the meeting; and
(v) In case of corporate entities, the board of directors’ resolution / power of attorney with specimen signature of the person
nominated to represent and vote on behalf of the corporate entity shall be submitted (unless it has been provided earlier)
along with the proxy form to the Company.
Revision of Withholding Tax on Dividend Income under Section 150 of Income Tax Ordinance,
2001:
Pursuant to Section 150 of the Income Tax Ordinance, 2001 and the provisions of the Finance Act 2016 effective 1st July
2016, withholding tax on dividend income will be deducted for ‘Filer’ and ‘Non-Filer’ shareholders @ 12.5% and 20%
respectively. According to clarification received from Federal Board of Revenue (FBR) withholding tax will be determined
separately on ‘Filer / Non-Filer’ status of principal shareholder as well as joint holder(s) based on their shareholding
proportions, in case of joint accounts.
In this regard, all shareholders who hold shares with joint shareholders, are requested to provide shareholding proportions
of principal shareholder and joint holder(s) in respect of shares held by them to our Share Registrar, in writing. In case the
required information is not provided to our Share Registrar it will be assumed that the shares are held in equal proportion
by the principal shareholder and joint holder(s).
Dividend Mandate
Pursuant to SECP Circular No. 18 of 2012, a shareholder may, if so desire, direct the Company to pay dividend through
his/her/its bank account. In this regard, shareholders are advised to submit application to the Company’s Share Registrar
giving particulars relating to their name, folio number, title of account, bank account number, the bank’s name and complete
mailing address of the bank. Please note that this dividend mandate is optional and not compulsory.
STATEMENT UNDER SECTION 160 (1) (b) OF THE COMPANIES ORDINANCE, 1984
This statement sets out the material facts concerning the Special Business listed at Agenda item nos.6, 7 and 8 to be
transacted at the Annual General Meeting to be held on 28th April 2017.
Agenda Item No.6
Amendments in the Articles of Association
(i) Compliance with the requirements prescribed in the Companies (E-Voting) Regulations, 2016
The amendments in the Articles of Association of the Company are being carried out in order to give effect to the
requirements of Companies (E-Voting) Regulations, 2016 (the “Regulations”) issued by the Securities and Exchange
Commission of Pakistan. The Regulations enable the members of listed companies to exercise their voting rights through
electronic means (E-Voting) managed by authorized intermediaries, subject to terms and conditions mentioned in the
Regulations.
(ii) Circulations of Annual Reports through CD/DVD/USB
Securities and Exchange Commission of Pakistan vide S.R.O 470(I)/2016 dated 31st May 2016 has allowed the companies
to circulate annual balance sheet and profit and loss account, auditors’ report and directors’ report (annual audited
accounts), notices of annual general meetings and other information contained therein to its members through
CD/DVD/USB subject to consent of the shareholders in the general meeting. This will save time and expenses incurred on
printing of the annual report.
The Company shall supply the hard copies of the annual audited accounts to the shareholders on demand, free of cost,
within one week of such demand. After approval of the shareholders, the Company will place a Standard Request Form on
its website to communicate their need of hard copies of the annual audited accounts instead of sending the same through
CD/DVD/USB along with postal and email address of the Company Secretary/Share Registrar to whom such requests shall
be made.
The directors, sponsors, majority shareholders of the Company and their relatives have no vested interest, directly or
indirectly in the above business except to the extent of their/spouses’ shareholdings and directorship in the Company.
Agenda Item No.7
Details required under Clause 3(1)(a) of the Companies (Investment in Associated Companies or Associated
Undertakings) Regulations, 2012 are given below:
Name of the associated company or associated VAS LNG (Private) Limited (“VLPL”) an associated
undertaking along with criteria based on which company of Hascol Petroleum Limited (the
the associated relationship is established: “Company”).VLPL has been set up initially as a
subsidiary of the Company to eventually operate as a
joint venture company.
Purpose, benefits and period of investment: Purpose: To undertake the business of marketing
Liquefied Natural Gas (LNG).
Period of Investment: Investment will be made from

time to time in a period of 2 years.
Benefit: To increase revenue and in turn shareholder’s

value.
Maximum amount of investment: Up to PKR 300,000,000
Maximum price at which securities will be acquired: Rs.10/- per share (par value).
Maximum number of securities to be acquired: 30,000,000 shares.
Number of securities and percentage thereof held Nil (except undertaking to subscribe 97 shares out of
before and after the proposed investment: total 100 shares as per the Memorandum and Articles
of Association of VLPL). The total securities that will be
held after the proposed investment will be a maximum
total of 30,000,000.
Average market price of the shares intended to be Not applicable (newly established company)
purchased during preceding twelve weeks in case of
listed companies
In case of investment in unlisted securities, fair Newly Incorporated (fresh equity at face value)
market value of such securities determined in terms
of regulation 6(1):
Breakup value of shares intended to be purchased Not Applicable (newly incorporated)

on the basis of last published financial statements
Earning per share of the associated company or

associated undertaking for the last three years:
For the year 2016:

For the year 2015: Not Applicable (newly incorporated)
For the year 2014:
Sources of funds from which securities will be Self generated funds.

acquired:
Where the securities are intended to be acquired

using borrowed funds:
(a) Justification for investment through borrowings: Not applicable.
(b) Detail of guarantees and assets pledged for
obtaining such funds: Not applicable.
Salient features of the agreement(s), if any, entered No agreement existing at present. The Company
into with its associated company or associated proposes to enter into a Joint Venture Agreement to
undertaking with regards to the proposed jointly own and operate the Company in the following
investment: proportion i.e. (a) Vitol Dubai Limited / or its affiliate
70% and (b) Hascol Petroleum Limited 30%.
Direct or indirect interest of directors, sponsors, The Directors / sponsors / majority shareholders of the
majority shareholders and their relatives, if any, in Company have no interest directly or indirectly in the
the associated company or associated undertaking investment in VLPL, except that Mr. Mumtaz Hasan Khan
or the transaction under consideration: is also a director in the Company as well.
Agenda Item No.8
Details required under Clause 3(1)(a) of the Companies (Investment in Associated Companies or Associated
Undertakings) Regulations, 2012 are given below:
Name of the associated company or associated Hascol Terminals Limited (“HTL”) an associated
undertaking along with criteria based on which the company of Hascol Petroleum Limited (“Company”).
associated relationship is established: HTL was initially set up as a subsidiary of the Company
to eventually operate as a joint venture company along
with co-sponsors / investors listed below. The Company
will own 15% of the issued shares of HTL. The
Company currently has approval of an equity
investment of PKR 375 million after seeking
shareholders approval under a special resolution for
complying with Section 208 of the Companies
Ordinance 1984 in an EOGM held on 29th June 2016
(“First Special Resolution Notice”).
Purpose, benefits and period of investment: Purpose: Due to increase in steel prices the project
cost of HTL has over run and additional cost has to be
incurred for the construction of tanks and piping. The
shareholders of HTL have agreed to fund the additional
costs in proportion to their respective shareholding.
Approval is being sought from the shareholders for the
Company to make pro-rata equity investment to meet
such cost over-runs up to a maximum of PKR
125,000,000 (Pak Rupees One Hundred and Twenty
Five Million only).
Benefit: The benefits of the project have already been

disclosed to the shareholders in the First Special
Resolution Notice.
Maximum amount of investment: Up to PKR125,000,000
Maximum price at which securities will be acquired: Rs.10/- per share (par value).
Maximum number of securities to be acquired: 12,500,000 shares

Number of securities and percentage thereof held Presently 7,500,000 shares (62.50%) are held and the
before and after the proposed investment: balance amount invested is advance against equity. Upon
full subscription, the shares will be issued to the amount
of investment made. After the proposed investment the
holding will increase up to 50,000,000 shares (15%).
Average market price of the shares intended to be Not Applicable (newly established company)
purchased during preceding twelve weeks in case of
listed companies
In case of investment in unlisted securities, fair Newly Incorporated (fresh equity at face value)
market value of such securities determined in terms
of regulation 6(1):
Breakup value of shares intended to be purchased Not Applicable (newly incorporated)

on the basis of last published financial statements
Earning per share of the associated company or

associated undertaking for the last three years:
For the year 2016:

For the year 2015: Not Applicable (newly incorporated)
For the year 2014:
Sources of funds from which securities will be Self generated funds

acquired:
Where the securities are intended to be acquired

using borrowed funds:
(a) Justification for investment through Not applicable
borrowings:
(b) Detail of guarantees and assets pledged for Not applicable
obtaining such funds:
Salient features of the agreement(s), if any, entered The Company has entered into a joint venture /
into with its associated company or associated shareholders’ agreement dated 3rd January 2017 to
undertaking with regards to the proposed jointly own and operate the Company in the following
investment: proportion i.e. (a) VTTI 51% (b) Hascol Petroleum
Limited 15% (c) Fossil Energy (Private) Limited 24%, and
(d) ST Logistics (Private) Limited 10%, with
proportionate representation of the Board of Directors
and expected standard rights of first refusal and tag
along rights usual for such type of joint venture
companies.
Direct or indirect interest of directors, sponsors, The Directors / sponsors / majority shareholders of the
majority shareholders and their relatives, if any, in Company have no interest directly or indirectly in the
the associated company or associated undertaking investment in HTL, except that they are
or the transaction under consideration: shareholders/directors in HTL. Mr. Saleem Butt is
interested as a majority shareholder in Fossil Energy
(Private) Limited a co-sponsor of HTL.
Statements of Compliance with the Code of

Corporate Governance
This statement is being presented to comply with the Code of Corporate Governance (the “CCG”) contained in Regulation
No. 5.19 of listing regulations of the Pakistan Stock Exchange Limited 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 CCG 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 Director Mr. Sohail Hasan
Executive Directors Mr. Mumtaz Hasan Khan

Mr. Saleem Butt
Non-Executive Directors Mr. Farooq Rahmatullah Khan

Mr. Najmus Saquib Hameed
Mr. Liaquat Ali
Mr. Abdul Aziz Khalid
The independent director meets the criteria of independence under clause 5.19.1(b) of the CCG.
2. The directors have confirmed that none of them is serving as a director on 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 Development Financial Institution or a Non-Banking Financial Institution, or, being a member
of a stock exchange, has been declared as a defaulter by that stock exchange.
4. A casual vacancy occurring on the board on 30th March 2016 was filled up by the directors on the same day.
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 supporting policies and procedures.
6. The Board has developed a Vision / Mission statement, 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 Chief Executive Officer, other executive
and non-executive directors, have been taken by the Board / shareholders.
8. The meetings of the Board were presided over by the Chairman and, in his absence, by a director elected by the Board for
this purpose and the Board met 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 and circulated.
9. In accordance with the criteria specified on clause 5.19.7 of PSX Rules, majority of Directors of the Company have
completed the Directors’ training program.
10. There has been no new appointment for the positions of CFO, Company Secretary or Head of Internal Audit during the
year.
11. The Directors’ Report has been prepared in compliance with the requirements of CCG and fully describes the salient
matters required to be disclosed.
12. The financial statements of the Company were duly endorsed by Chief Executive Officer and Chief Financial Officer before
approval of the Board.
13. The Directors, Chief Executive Officer 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 CCG.
15. The Board has formed an Audit Committee. It comprises of three members, of whom two are non-executive directors and
one is an independent director. The chairman of the audit committee is 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 CCG. The terms of reference of the committee have been formed and advised to the
committee for compliance.
17. The Board has formed a Human Resource Committee. It comprises of three members, of whom two are non-executive
directors and one is an executive director. The chairman of the committee is a non-executive director.
18. The Board has set up an effective internal audit function for the Company which was fully operational during the year.
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 (ICAP), 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 ICAP.
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 ‘closed period’, prior to the announcement of interim / final results, and business decisions, which may materially affect
the market price of company’s securities, was determined and intimated to directors, employees and stock exchange.
22. Material / price sensitive information has been disseminated among all market participants at once through the stock
exchange.
23. The Company has complied with the requirements relating to maintenance of register of persons having access to inside
information by designated senior management officer in a timely manner and maintained proper record including basis for
inclusion or exclusion of names of persons from the said list.
24. As stated above, we confirm that all other material principles enshrined in the CCG have been complied with.
Mumtaz Hasan Khan

Karachi: 31st March 2017 Chairman & Chief Executive
Statement of Compliance with the Issue of

Sukuk Regulations, 2015
This statement is being presented to comply with the requirements under “Issue of Sukuk Regulations, 2015” issued by the
Securities and Exchange Commission of Pakistan. This Statement of Compliance is for the year ended December 31, 2016.
Hascol Petroleum Limited (the Company) entered into an arrangement for issue of Sukuk amounting to Rs. 2,000 Million
inclusive of Green Shoe Option of Rs. 500 Million, on December 31st, 2015 for a period of 6 years including a grace period of 1
year. We state that the Company is in compliance with the Sukuk features and Shari’ah requirements in accordance with the
Issue of Sukuk Regulations, 2015.
We specifically confirm that:

- The Company has established policies and procedures for all Sukuk related transactions to comply with Sukuk features and
Shari’ah requirements.
- The Company has implemented and maintained such internal control and risk management systems that are necessary to
mitigate the risk of non-compliances of the Sukuk features and Shari’ah requirements, whether due to fraud or error;
- The Company has a process to ensure that the management and where appropriate those charged with governance, and
personnel responsible to ensure the Company’s compliance with the Sukuk related features and Shari’ah requirements are
properly trained and systems are properly updated.
The Sukuk features and Shari’ah requirements in accordance with Issue of Sukuk Regulations, 2015 comprises of the following:
a. Requirements of Shariah Structure and Transaction Documents as stated in the Information Memorandum, with respect to
issuance of Sukuk:
i. Trust Deed
ii. Musharka Agreements
iii. Payment Agreements
iv. Purchase Undertaking
v. Asset Purchase Agreement
vi. Investment Agency Agreement
vii. Security Documents
b. Guidelines of the relevant Shariah Standards, issued by the Accounting and Auditing Organization of the Islamic Financial
Institutions (AAOIFI), as notified by the Securities and Exchange Commission of Pakistan (the SECP);
c. Requirements of the relevant Islamic Financial Accounting Standard as notified by the SECP; and
d. Other compliances specified in the issue of Sukuk Regulations 2015 issued by the Securities and Exchange Commission of
Pakistan.
The above Statement has been duly endorsed by the Board of Directors of the Company.
Mumtaz Hasan Khan Najmus Saquib Hameed

Chairman & Chief Executive Director
for the year ended December 31, 2016

UNCONSOLIDATED BALANCE SHEET

AS AT DECEMBER 31, 2016 (Rupees in thousand)
Note 2016 2015

ASSETS

Non-current assets
Property, plant and equipment 5 8,688,947 6,277,928
Intangible asset 6 - 1,522
Long-term investments 7 1,961,977 1,955,310
Long-term deposits 8 288,882 228,631
Deferred taxation 9 - 240,096
Total non-current assets 10,939,806 8,703,487
Current assets
Stock-in-trade 10 16,477,668 8,470,018
Trade debts 11 7,871,281 4,263,595
Advances 12 253,413 150,606
Deposits, prepayments and other receivables 13 1,286,748 959,829
Cash and bank balances 14 7,821,070 4,071,547
Total current assets 33,710,180 17,915,595
TOTAL ASSETS 44,649,986 26,619,082
EQUITY AND LIABILITIES

Share capital and reserves
Share capital 15 1,206,792 1,206,792
Reserves 16 3,755,346 3,322,311
Total shareholders’ equity 4,962,138 4,529,103
Surplus on revaluation of fixed assets - net of tax 17 1,142,880 1,256,529
LIABILITIES

Non-current liabilities
Long-term finances 18 2,307,749 176,151
Liabilities against assets subject to finance lease 19 471,731 322,930
Deferred taxation - net 9 594,790 -
Deferred liability - gratuity 20 135,791 99,090
Total non-current liabilities 3,510,061 598,171
Current liabilities
Trade and other payables 21 29,822,758 17,419,728
Mark-up accrued 22 91,185 54,311
Short-term borrowings 23 3,889,629 1,413,055
Current portion of long term finances 18 599,079 285,636
Current maturity of liabilities against assets subject to finance lease 19 148,387 102,597
Taxation 24 483,869 959,952
Total current liabilities 35,034,907 20,235,279
TOTAL LIABILITIES 38,544,968 20,833,450
TOTAL EQUITY AND LIABILITIES 44,649,986 26,619,082
CONTINGENCIES AND COMMITMENTS 25
The annexed notes 1 to 48 form an integral part of these unconsolidated financial statements.


UNCONSOLIDATED PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED DECEMBER 31, 2016 (Rupees in thousand)
Note 2016 2015

Sales - net 26 128,759,275 94,065,297

Less: sales tax (29,251,081) (17,291,360)
Net sales 99,508,194 76,773,937
Other revenue 27 199,280 82,831

Net revenue 99,707,474 76,856,768
Cost of products sold 28 (94,999,669) (74,017,815)

Gross profit 4,707,805 2,838,953
Operating expenses
Distribution and marketing 29 (1,763,478) (1,053,474)
Administrative 30 (528,636) (366,238)
(2,292,114) (1,419,712)
Other income 31 211,496 210,541
Operating profit 2,627,187 1,629,782
Finance cost 32 (432,618) (349,652)

Other charges 33 (40,594) (83,409)
(473,212) (433,061)
Profit before taxation 2,153,975 1,196,721
Taxation 34 (938,349) (63,484)

Profit for the year
1,215,626 1,133,237
Earnings per share - basic and diluted (Rupees) 35 10.07 9.39


UNCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Note 2016 2015

Profit for the year

1,215,626 1,133,237
Other comprehensive income

Items that will not be reclassified
to profit and loss account

Remeasurement of net defined benefit
liability - net of deferred tax 20.3 (9,795) (7,464)
Items that may be reclassified subsequently


Unrealized (loss)/gain due to change in fair value
of long-term investment classified as
‘available-for-sale’ - net of deferred tax (59,791) 690,662
(69,586) 683,198
Total comprehensive income 1,146,040 1,816,435


UNCONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Capital Revenue
reserves reserve Total
Share Share Fair Unappropri shareholders’
Capital premium value -ated profit equity
reserve

Balance as at January 01, 2015 906,000 1,070,828 (5,941) 807,926 2,778,813
Total comprehensive income for the year

Profit for the year - - - 1,133,237 1,133,237

liability - net of tax - - - (7,464) (7,464)
Unrealized loss due to change in fair value of long-term
investment classified as ‘available-for-sale’ - net of tax - - 690,662 - 690,662
Total comprehensive income - - 690,662 1,125,773 1,816,435
Transferred from surplus on revaluation of fixed assets

on account of incremental depreciation - net of tax - - - 84,704 84,704
- - 690,662 1,210,477 1,901,139
Transaction with owners
Annual bonus @ 11% - December 2014 99,660 - - (99,660) -
Interim bonus @ 20% - June 2015 201,132 - - (201,132) -
First interim dividend at Rs. 1.5 per share - - - (150,849) (150,849)
Total transaction with owners 300,792 - - (451,641) (150,849)
Balance as at December 31, 2015 1,206,792 1,070,828 684,721 1,566,762 4,529,103
Balance as at January 01, 2016 1,206,792 1,070,828 684,721 1,566,762 4,529,103

Profit for the year - - - 1,215,626 1,215,626

Remeasurement of net defined benefit liability
- net of tax - - - (9,795) (9,795)
Unrealized gain due to change in fair value of long-term
investment classified as ‘available-for-sale’ - net of tax - - (59,791) - (59,791)
Total comprehensive income - - (59,791) 1,205,831 1,146,040

on account of incremental depreciation - net of tax - - - 131,749 131,749
- - (59,791) 1,337,580 1,277,789
Final dividend at Rs. 3.50 per share - December 2015 - - - (422,377) (422,377)
Interim dividend at Rs. 3.50 per share - June 2016 - - - (422,377) (422,377)
Total transaction with owners - - - (844,754) (844,754)
Balance as at December 31, 2016 1,206,792 1,070,828 624,930 2,059,588 4,962,138


UNCONSOLIDATED CASH FLOW STATEMENT

Note 2016 2015

CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations 38 3,256,191 4,792,265
Finance cost paid (395,744) (355,218)
Profit on bank deposits 165,033 139,662
Taxes paid (599,442) (197,891)
Gratuity paid (5,003) (3,359)
Net cash generated from operating activities 2,421,035 4,375,459
CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditure incurred (2,863,872) (1,735,953)
Proceeds from disposal of property, plant and equipment 65,711 2,272
Long-term investment made during the year (75,000) (384,440)
Long-term deposits (60,251) (172,142)
Net cash used in investing activities (2,933,412) (2,290,263)
CASH FLOWS FROM FINANCING ACTIVITIES

Lease liability obtained - net 194,591 349,288
Dividend paid (844,754) (150,849)
Long-term finance obtained/(repaid) - net 2,435,489 (106,093)
Net cash generated from financing activities
1,785,326 92,346
Net increase in cash and cash equivalents 1,272,949 2,177,542
Cash and cash equivalents at beginning of the year 2,658,492 480,950
Cash and cash equivalents at end of the year 39

3,931,441 2,658,492


NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2016
1 STATUS AND NATURE OF BUSINESS

Hascol Petroleum Limited (the Company) was incorporated in Pakistan as a private limited company on March 28, 2001. On
September 12, 2007 the Company was converted into a public unlisted company and on May 12, 2014 the Company was listed on
the Pakistan Stock Exchange. The registered office of the Company is situated at Suite No. 105-106, The Forum, Khayaban-e-Jami,
Clifton, Karachi.
The Company is engaged in the business of procurement, storage and marketing of petroleum and related products, for which the
Company obtained oil marketing license from Ministry of Petroleum and Natural Resources in the year 2005.
1.1 These financial statements are separate financial statements of the Company in which investments in subsidiaries are accounted for
on the basis of direct interest rather than on the basis of reported results. Consolidated financial statements are prepared separately.
Subsidiaries

Hascombe Lubricants (Private) Limited
Hascombe Lubricants (Private) Limited is a wholly owned subsidiary of the Company which is incorporated in Pakistan.
Hascol Terminals Limited
Hascol Terminals Limited is a subsidiary of the Company which is incorporated in Pakistan. The subsidary provides storage facilities
for imported and locally produced petroleum and related products.
2 BASIS OF PREPARATION

2.1 Statement of compliance

These unconsolidated financial statements have been prepared in accordance with the 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) and Islamic Financial Accounting Standards (IFAS) issued by the Institute of
Chartered Accountants of Pakistan (ICAP) as are notified under the provisions of the Companies Ordinance, 1984, the requirements
of the Companies Ordinance, 1984 and the directives issued by the Securities and Exchange Commission of Pakistan (SECP). Where
the requirements of the Companies Ordinance, 1984 or directives issued by the SECP differ with the requirements of IFRS, the
requirements of and directives issued under the Companies Ordinance, 1984 shall prevail.
2.2 Basis of measurement

These unconsolidated financial statements have been prepared under the historical cost convention, except for certain assets and
liabilities which are stated at revalued amount.
In these unconsolidated financial statements, except for the unconsolidated statement of cash flows, all the transactions have been
accounted for on an accrual basis.
2.3 Functional and presentation currency
These unconsolidated financial statements are presented in Pakistani Rupees which is also the Company’s functional currency.
2.4 Standards, Amendments and Interpretations to Approved Accounting Standards
2.4.1 Standards, amendments and interpretations to the published standards that are relevant to the company and
adopted in the current year
The Company has adopted the following new standards, amendments to published standards and interpretations of IFRSs which
became effective during the current year.


Amendments Effective Date

IAS 1 - Disclosure Initiative (Amendments to IAS 1 Presentation of Financial Statements) January 1, 2016

IFRS 10, IFRS 12 and IAS 28 - Investment Entities : Applying the Consolidation Exception
(Amendments to IFRS 10, IFRS 12 and IAS 28) January 1, 2016

Annual Improvements to IFRSs 2012 - 2014 Cycle January 1, 2016

(i) IFRS 5 — Adds specific guidance in IFRS 5 for cases in which an entity reclassifies an asset from held for sale to held for
distribution or vice versa and cases in which held-for-distribution accounting is discontinued.
(ii) IFRS 7 — Additional guidance to clarify whether a servicing contract is continuing involvement in a transferred asset, and
clarification on offsetting disclosures in condensed interim financial statements.
(iii) IAS 19 — Clarify that the high quality corporate bonds used in estimating the discount rate for post-employment benefits
should be denominated in the same currency as the benefits to be paid.
(iv) IAS 34 — Clarify the meaning of ‘elsewhere in the interim report’ and require a cross-reference.
IAS 27 - Equity method in Separate Financial Statatements (Amendments to IAS 27) January 1, 2016

IAS 16 and IAS 38 - Clarification of Acceptable Methods of Depreciation and Amortisation
(Amendments to IAS 16 and IAS 38) January 1, 2016

Adoption of the above revisions, amendments and interpretations of the standards have no significant effect on the amounts for the
year ended December 31, 2015 and 2016.
2.4.2 Standards, amendments to published standards and interpretations that are effective but not relevant
The other new standards, amendments to published standards and interpretations that are mandatory for the financial year beginning
on January 01, 2016 are considered not to be relevant or to have any significant effect on the Company’s financial reporting and
operations and are therefore not presented here.
2.4.3 Standards, amendments and interpretations to the published standards that are relevant but not yet effective and
not early adopted by the Company
There are number of other standards, amendments and interpretations to the published standards that are relevant to the Company
and not yet effective and therefore, have not been presented here.
2.4.4 Standards, amendments and interpretations to the published standards that are not yet notified by the Securities
and Exchange Commission of Pakistan (SECP)
Following new standards have been issued by the International Accounting Standards Board (IASB) which are yet to be notified by
the SECP for the purpose of applicability in Pakistan.
Standard IASB effective date

(Annual periods beginning on or after)

IFRS 9 - Financial Instruments January 1, 2018
IFRS 14 - Regulatory Deferral Accounts January 1, 2016
IFRS 15 - Revenue from Contracts with Customers January 1, 2018
IFRS 16 - Leases January 1, 2019

3 CRITICAL ASSUMPTIONS, ESTIMATES AND MEASUREMENT UNCERTAINITY
The preparation of unconsolidated financial statements in conformity with approved accounting standards, as applicable in Pakistan,
requires management to make estimates, assumptions and use judgment that affect the application of accounting policies and reported
amounts of assets and liabilities, income and expenses.
The estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the
period in which the estimates are revised, if the revision affects only that period, or in the period of the revision and future periods
if the revision affects both current and future periods.
Accounting policies in respect of judgments made by management in the application of approved accounting standards, as applicable
in Pakistan, that have significant effect on the Company’s financial statements and estimates and assumptions with significant risk of
material adjustment in the future period are included in the following notes:
Note
a) Useful life of depreciable and amortisable assets 4.1 & 4.2
b) Net realizable value of stock-in-trade 4.8
c) Provisions and contingent liabilities 4.11
d) Taxation 4.14
e) Retirement and other service benefits 4.16

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectation of
future events that are believed to be reasonable under the circumstances.
4 SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies applied in the preparation of these unconsolidated financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
4.1
Property, plant and equipment

Initial recognition

(a) Operating fixed assets
An item of property, plant and equipment is initially recognized at cost.
Cost includes expenditure that is directly attributable to the acquisition of the asset. Property, plant and equipment under construction
are disclosed as capital work-in-progress. The cost of self constructed assets includes the cost of materials and fixed labour, any other
cost directly attributable to bringing the asset into service for its intended use including, where applicable, the cost of dismantling and
removing the items and restoring the site on which they are located, and borrowing costs on qualifying assets.
The assets which are available for intended use are capitalized as operating fixed assets. While assets under construction are
capitalized to capital work in progress.
The Company accounts for property, plant and equipment acquired under finance leases by recording the assets and the related
liability. These amounts are determined at the inception of lease, on the basis of the lower of the fair value of the leased properties
and the present value of minimum lease payments. Financial charges are allocated to the accounting period in a manner so as to
provide a constant rate of charge on the outstanding liability.
(b) Capital work-in-progress (CWIP)

CWIP is stated at cost less accumulated impairment losses, if any. All expenditure in connection with specific assets incurred during
construction / installation period are carried to CWIP. These expenditures are transferred to operating fixed assets as and when
these are available for intended use.
Measurement subsequent to initial recognition

(a) Carried using revaluation model

Following operating assets both owned and leased are subsequently measured under revaluation model (i.e. fair value at the date of
revaluation less any subsequent accumulated depreciation and any subsequent accumulated impairment losses).

- Building on lease hold land
- Tanks and pipelines
- Dispensing pumps
- Plant and machinery
- Electrical, mechanical and fire fighting equipment.

Fair value is determined by external professional valuers with sufficient regularity such that the carrying amount does not differ
materially from that which would be determined using fair value at the balance sheet date.
(b) Carried using cost model

Fixed assets other than those mentioned above are stated at cost less accumulated depreciation and accumulated impairment
losses.

Depreciation

Depreciation on operating fixed assets is charged to profit and loss account applying the straight-line method whereby the cost/
revalued amount of operating fixed assets is written off over its remaining useful life. Same basis and estimates for depreciation are
applied to owned assets and assets acquired under finance lease.
Depreciation is charged on straight line method from the month in which an asset is available for intended use, while no depreciation
is charged from the month in which the asset is disposed off. Depreciation is provided at the rates as disclosed in note 5.1.
Depreciation method, useful lives, and residual values are reviewed at each reporting period and adjusted, if applicable. Capital work-
in-progress is not depreciated.
Maintenance and normal repairs are charged to the unconsolidated profit and loss account as and when incurred. Major renewals and
improvements are capitalized and the assets so replaced, if any, are retired.
Gain and loss on disposal of property, plant and equipment is included in the unconsolidated profit and loss account in the period of
disposal.
Surplus on revaluation of fixed assets

The surplus arising on revaluation of fixed assets is credited to the “Surplus on revaluation of fixed assets” shown below equity in the
unconsolidated balance sheet. Accordingly the Company has adopted the following accounting treatment of depreciation on revalued
assets, keeping in view the requirement of Securities and Exchange Commission of Pakistan’s (SECP) SRO 45(1)/2003 dated January
13, 2003:
- depreciation on assets which are revalued is determined with reference to the value assigned to such assets on revaluation
and depreciation charge for the period is taken to the unconsolidated profit and loss account; and
- an amount equal to incremental depreciation for the period net of deferred taxation is transferred from “Surplus on
revaluation of fixed assets account” to unappropriated profits through unconsolidated statement of changes in equity to
record realization of surplus to the extent of the incremental depreciation charge for the period.
4.2
Intangible assets

These are recorded initially at cost and subsequently carried at cost less accumulated amortization and accumulated impairment
losses, if any.
Intangible assets having finite useful lives are stated at cost less accumulated amortization and accumulated impairment losses, if any.
Such intangibles are amortized over their estimated useful lives using the straight line method.
Amortization on addition and deletion of intangible assets during the year is charged in proportion to the period of use. The useful
life and amortization method are reviewed and adjusted, if appropriate, at the balance sheet date.

Intangible assets having indefinite useful life are not amortized and stated at cost less impairment losses, if any.
4.3 Financial instruments

Recognition, initial measurement and derecognition

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the
financial instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at fair value through
profit or loss which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities is described
below.

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial
asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged,
cancelled or expires.
Regular purchases and sales of financial assets are recognised on the trade date - the date on which the Company commits to
purchase or sell the asset.
Classification and subsequent measurement of financial assets

For the purpose of subsequent measurement financial assets, other than those designated and effective as hedging instruments, are
classified into the following categories upon initial recognition:

• loans and receivables;
• at fair value through profit or loss - held for trading;
• held to maturity; and
• available for sale.

All financial assets except for those at fair value through profit and loss are reviewed for impairment at least at each reporting date
to identify whether there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to
determine impairment are applied for each category of financial assets, which are described below. All income and expenses relating
to financial assets that are recognised in profit or loss are presented within finance costs, finance income or other financial items,
except for impairment of trade receivables which is presented within other expenses.
Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
After initial recognition, these are measured at amortised cost using the effective interest method, less provision for impairment.
Discounting is omitted where the effect of discounting is immaterial. The Company`s cash and bank balances fall into this category of
financial instruments.
Receivables are considered for impairment when they are past due or when other objective evidence is received that a specific
counterparty will default.
At fair value through profit or loss - held for trading

Financial assets at ‘fair value through profit or loss’ - held for trading include financial assets that are either classified as held-for-trading
or that meet certain conditions and are designated at fair value through profit or loss - held for trading upon initial recognition.
Assets in this category are measured at fair value with gains or losses recognised in profit or loss. The fair values of financial assets
in this category are determined by reference to active market transactions or using a valuation technique where no active market
exists. The Company does not currently have any asset in this category.
Held to maturity

Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed
maturity other than loans and receivables. Investments are classified as ‘held to maturity’ if the Company has the
intention and ability to hold them until maturity. The Company does not currently have any asset in this category.
Held to maturity investments are measured subsequently at amortised cost using the effective interest method. If there is objective
evidence that the investment is impaired, determined by reference to external credit ratings, the financial asset is measured at the
present value of estimated future cash flows. Any changes in the carrying amount of the investment, including impairment losses, are
recognised in profit or loss.
Available for sale

Available for sale (AFS) are non-derivative financial assets that are either designated to this category or do not qualify for inclusion in
any of the other categories of financial assets. These are primarily investments that are intended to be held for an undefined period
of time or may be sold in response to the need for liquidity.

The equity investment is measured at cost less any impairment charges, as its fair value cannot currently be estimated reliably.
Impairment charges are recognised in profit or loss. All other AFS financial assets are measured at fair value. Gains and losses are
recognized in other comprehensive income and reported within the Available for sale reserve within equity, except for interest and
dividend income, impairment losses and foreign exchange differences on monetary assets, which are recognised in the unconsolidated
profit and loss account. When the asset is disposed off or is determined to be impaired, the cumulative gain or loss recognised in
other comprehensive income is reclassified from the equity reserve to profit or loss. Interest calculated using the effective interest
method and dividends are recognised in profit or loss within finance income.
Reversals of impairment losses for Available for sale equity investments are not recognised in profit or loss and any subsequent
increase in fair value is recognised in other comprehensive income. The Company does not currently have any other asset other than
as provided in this category.
Classification and subsequent measurement of financial liabilities

Financial liabilities that are measured subsequently at amortised cost using the effective interest method. All interest-related charges,
if applicable, changes in an instrument’s fair value that are reported in profit or loss account are included within finance costs or
finance income.
4.4
Off setting

Financial assets and liabilities are off set and the net amount is reported in the unconsolidated balance sheet if the Company has a
legally enforceable right to off-set the transactions and also intends either to settle on a net basis or to realize the asset and settle
the liability simultaneously.
4.5 Investments

(a) Investment in subsidiary

Subsidiaries are entities in which the parent company has control and / or ownership of more than half or fifty percent, of the voting
power. Control exists when the Parent Company has the power to govern the financial and operating policies of an entity so as to
obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable are taken into account.
Investment in subsidiary company is stated at cost and the carrying amount is adjusted for impairment, if any, to the recoverable
amounts of such investments.
(b) Other investments

The Company classifies its investment as ‘available-for-sale’, that do not fall under the held-for-trading or held-to-maturity. Unrealized
surplus/deficit arising on revaluation of investment classified as ‘available-for-sale’ is disclosed in the unconsolidated statement of
other comprehensive income.
In case of impairment of available-for-sale securities, the cumulative loss that has been recognised directly in fair value reserve on the
unconsolidated balance sheet below equity is removed there from and recognized in profit and loss.
4.6 Trade and other payables

Trade and other payables are recognised initially at fair value and subsequently measured at amortized cost, using the effective
interest method. Exchange gains and losses arising on translation in respect of liabilities in foreign currency are added to the carrying
amount of the respective liabilities.
4.7 Trade debts and other receivables

Trade debts and other receivables are recognised initially at invoice value, which approximates fair value, and subsequently measured
at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade debts and
other receivables is established when there is objective evidence that the Company will not be able to collect all the amounts due
according to the original terms of the receivable. Significant financial difficulties of the debtors, probability that the debtor will enter
bankruptcy and default or delinquency in payments are considered indicators that the trade debt is impaired. The amount of provision
is charged to profit or loss. Trade debts and other receivables considered irrecoverable are written-off.
Exchange gains and losses arising on translation in respect of trade debts and other receivables in foreign currency are added to the
carrying amount of the respective receivables.

4.8 Stock-in-trade

Stock-in-trade is valued at the lower of cost and net realizable value.

Stock-in-transit is valued at cost comprising invoice value plus other charges incurred thereon. Provision is made for obsolete and
slow moving stock-in-trade based on management’s best estimate and is recognized in the unconsolidated profit and loss account.

The cost of stock-in-trade is determined on moving weighted average basis.
Provision is made for obsolete/slow moving stocks where necessary and recognized in the unconsolidated profit and loss account.
Net realizable value is the estimated selling value price in the ordinary course of business less estimated costs necessary to be
incurred in order to make a sale.
4.9 Impairment of non financial assets

The carrying amounts of non financial assets, other than deferred tax assets, are assessed at each reporting date to ascertain whether
there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. An impairment
loss is recognized, as an expense in the unconsolidated profit and loss account, for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less cost to sell and value in use.

Value in use is ascertained through discounting of the estimated future cash flows using a discount rate that reflects current market
assessments of the time value of money and the risk specific to the assets. For the purpose of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would
have been determined if no impairment loss had been recognized.

4.10 Cash and cash equivalents

Cash and cash equivalents are carried in the unconsolidated balance sheet at cost. For the purposes of the unconsolidated statement
of cash flows, cash and cash equivalents include cash and bank balances and other items of current assets and current liabilities which
qualify as cash equivalent.

4.11 Provisions and contingent liabilities

Provisions are recognized when the Company has a present, legal or constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Provisions
are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurence
or non-occurence of one or more uncertain future events not wholly within the control of the Company, or a present obligation that
arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits
will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability. Contingent
liabilities are only disclosed and not recognized as liability in the unconsolidated balance sheet.

4.12 Leases
.
Finance leases

Leases in terms of which the Company has substantially all the risks and rewards of ownership are classified as
finance leases. Assets obtained under finance lease are accounted for in accordance with policy stated in note 4.1.
The related rental obligations, net of finance costs are classified as current and long term depending upon the timing of the
payment.
Each lease payment is allocated between the liability and finance cost so as to achieve a constant rate on the balance outstanding. The
interest element of the rental is charged to income over the lease term.

Operating leases

Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.
Payments made under operating leases (net of any incentives received from the lessor) are charged to the unconsolidated profit and
loss account on a straight-line basis over the period of lease.
Ijarah

Leased assets which are obtained under Ijarah agreement are not recognised in the Company’s unconsolidated balance sheet and are
treated as operating lease based on Islamic Financial Accounting Standard (IFAS) 2 issued by the Institute of Chartered Accountants
of Pakistan and notified by Securities and Exchange Commission of Pakistan vide S.R.O. 43(1) / 2007 dated 22 May 2007. Payments
made under operating lease are charged to the unconsolidated profit and loss account on a straight line basis over the lease term.

4.13
Foreign currency translations

Monetary assets and liabilities in foreign currencies are translated into Pakistani Rupees at the rates of exchange prevailing at the
balance sheet date. Transactions denominated in foreign currencies are converted into Pakistani Rupees at the rates of exchange
prevailing at the transaction date. Exchange gains or losses are taken to the unconsolidated profit and loss account.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as
at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined.

4.14 Taxation

Taxation for the year comprises current and deferred tax. Taxation is recognized in the unconsolidated profit and loss account
except to the extent that it relates to items recognized outside profit and loss account (whether in other comprehensive income or
directly in equity), if any, in which case the tax amounts are recognized outside profit or loss.
Current
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the
balance sheet date, and any adjustments to tax payable in respect of prior years.

Deferred

Deferred tax is provided for using the balance sheet method providing the temporary differences between the carrying amount of
assets and liabilities for financial reporting purposes and the amount used for taxation purposes. The amount of deferred tax provided
is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities using tax rates enacted
at the balance sheet date. Deferred tax asset is recognized only to the extent that it is probable that the future taxable profits will be
available and credits can be utilized.
Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse, based on the tax
rates that have been enacted. The Company takes into account the current income tax laws and decisions taken by the taxation
authorities.
Deferred tax is charged or credited in the unconsolidated profit and loss account, except in the case of items credited or charged
to equity or unconsolidated statement of other comprehensive income, in which case it is included in equity or unconsolidated
statement of other comprehensive income as the case may be.

4.15
Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be
measured reliably. Revenue is measured at the fair value of consideration received or receivable on the following basis:

Operating revenue

- Sales are recorded when significant risks and rewards of ownership of the goods have passed to the customers which
coincides with dispatch of goods to customers.
- Non-fuel retail income and other revenue (including license fee) is recognized on an accrual basis.
Other income
- Dividend income is recognized when the Company’s right to receive the dividend is established.
- Return on deposits and other services income is recognized on accrual basis.
4.16 Retirement and other service benefits

Unfunded gratuity scheme

Actuarial gains and losses are recognized in the unconsolidated statement of other comprehensive income in the periods in which
they occur. Amounts recorded in the unconsolidated profit and loss account are limited to current service and past service costs,
gains or losses on settlements, and net interest income (expense). All other changes in the net defined benefit obligation are
recognized directly in other comprehensive income with no subsequent recycling through the unconsolidated profit and loss account.
Contributory provident fund

The Company operates an approved contributory provident fund for all its permanent employees. The contribution to the fund is
made by the Company as well as the employee at the rate of 5.72% percent of the basic salary.
4.17 Borrowings and borrowing cost

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized
cost, any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the unconsolidated
profit and loss account over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at
least twelve months after the balance sheet date.
Borrowing costs are capitalized up to the point in time when substantially all the activities necessary to prepare the qualifying assets
for its intended use or sale are complete. All other borrowing costs are charged to the unconsolidated profit and loss account as and
when incurred.
4.18 Dividend distribution

Final dividend distribution to the Company’s shareholders is recognised as a liability in the unconsolidated balance sheet in the period
in which the dividend is approved by the Company’s shareholders at the Annual General Meeting, while interim dividend distributions
are recognised in the period in which the dividends are declared by the Board of Directors.
4.19 Operating segments

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 management that makes strategic decisions. The management has determined that the Company has a single
reportable segment as the Board of Directors view the Company’s operations as one reportable segment.
4.20 Earning per share

The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding
during the year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted
average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.
Note 2016 2015
5 PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets 5.1 5,214,536 4,220,584
Capital work-in-progress 5.5 3,474,411 2,057,344
8,688,947 6,277,928
5.1 Operating fixed assets
Annual Report 2016

Owned assets Leased assets
Building on Electrical, Furniture, Electrical,
lease hold land mechanical office mechanical Total
*Office Pump Tanks and Dispensing Plant and and fire equipment Vehicles Computer Building on Tanks and Dispensing Plant and and fire Vehicles operating
Land building building pipelines pumps machinery fighting and other auxiliaries leasehold pipelines pumps machinery fighting fixed
equipment assets land equipment assets

At January 1, 2016
Cost / revalued amount - 969,929 1,020,617 579,307 303,771 52,311 426,135 73,320 10,448 34,463 277,873 208,596 600,076 168,002 39,592 23,969 4,788,409
Accumulated depreciation - (70,312) (76,143) (30,113) (27,125) (3,444) (37,316) (50,884) (6,778) (24,360) (55,040) (33,766) (100,748) (24,318) (6,464) (21,014) (567,825)
Net book value - 899,617 944,474 549,194 276,646 48,867 388,819 22,436 3,670 10,103 222,833 174,830 499,328 143,684 33,128 2,955 4,220,584
Year ended
December 31, 2016
Opening net book value - 899,617 944,474 549,194 276,646 48,867 388,819 22,436 3,670 10,103 222,833 174,830 499,328 143,684 33,128 2,955 4,220,584
Addition/ transfer from CWIP 31,557 80,341 340,335 185,597 22,117 28,920 167,866 69,623 66,877 18,408 7,526 - 35,040 37,320 5,185 350,032 1,446,744
Revaluation - - - - - - - - - - - - - - - - -

Disposals
Cost - - - - - - - - (3,207) (60) - - - - - (56,929) (60,196)
Accumulated depreciation - - - - - - - - 2,533 50 - - - - - 3,963 6,546
- - - - - - - - (674) (10) - - - - - (52,966) (53,650)
Depreciation charge - (59,569) (68,414) (30,349) (23,103) (5,032) (58,141) (11,274) (7,639) (9,425) (19,587) (13,779) (64,409) (11,008) (1,303) (16,110) (399,142)
Closing net book value 31,557 920,389 1,216,395 704,442 275,660 72,755 498,544 80,785 62,234 19,076 210,772 161,051 469,959 169,996 37,010 283,911 5,214,536
At December 31, 2016

Cost / revalued amount 31,557 1,050,270 1,360,952 764,904 325,888 81,231 594,001 142,943 74,118 52,811 285,399 208,596 635,116 205,322 44,777 317,072 6,174,957
Net book value 31,557 920,389 1,216,395 704,442 275,660 72,755 498,544 80,785 62,234 19,076 210,772 161,051 469,959 169,996 37,010 283,911 5,214,536
Depreciation rate - % - 5 5 5 6.67 5 10 20 20 33.33 5 5 6.67 5 10 20
At January 1, 2015
Cost / revalued amount - 338,643 358,558 193,621 98,481 25,095 105,298 65,997 14,474 28,908 209,477 154,281 311,550 115,379 22,065 23,969 2,065,796
Net book value - 303,162 320,514 183,637 83,422 23,526 96,321 23,208 4,789 12,834 169,230 132,217 256,099 99,867 19,067 4,749 1,732,642
Year ended
December 31, 2015
Addition/ transfer from CWIP - 491,890 142,853 299,643 51,119 15,436 222,932 7,323 - 5,555 - - - - 10,247 - 1,246,998
Revaluation - 139,396 519,206 86,043 154,171 11,780 97,905 - - - 68,396 54,315 288,526 52,623 7,280 - 1,479,641
Disposals/ transfers
Cost - - - - - - - - (4,026) - - - - - - - (4,026)
Accumulated depreciation - - - - - - - - 4,026 - - - - - - - 4,026
- - - - - - - - - - - - - - - - -
QUALITY PERSONIFIED
Depreciation charge for the year - (34,831) (38,099) (20,129) (12,066) (1,875) (28,339) (8,095) (1,119) (8,286) (14,793) (11,702) (45,297) (8,806) (3,466) (1,794) (238,697)
Closing net book value - 899,617 944,474 549,194 276,646 48,867 388,819 22,436 3,670 10,103 222,833 174,830 499,328 143,684 33,128 2,955 4,220,584

Cost - 969,929 1,020,617 579,307 303,771 52,311 426,135 73,320 10,448 34,463 277,873 208,596 600,076 168,002 39,592 23,969 4,788,409
Page 59
Net book value - 899,617 944,474 549,194 276,646 48,867 388,819 22,436 3,670 10,103 222,833 174,830 499,328 143,684 33,128 2,955 4,220,584

*Running finance facility from Summit Bank Limited is secured on office building for the value of Rs. 500 million (2015: Rs. 500 million).

(Rupees in thousand)


5.2 Had there been no revaluation, the written down value of the following assets in the unconsolidated balance sheet would have been
as follows:

Cost Accumulated Written down value
depreciation
2016 2015
Owned Assets

Building on lease hold land 880,921 153,631 727,290 771,336
Pump building
Dispensing units 61,613 11,165 50,448 54,558
Plant and machinery 19,767 4,357 15,410 16,398
Tanks and pipelines 312,423 34,398 278,025 293,646
Electrical, mechanical and
fire fighting equipment 224,202 45,279 178,923 201,343

Leased Assets

1,974,205 480,066 1,494,139 1,608,101

Note 2016 2015
5.3 The depreciation charged for the year has been allocated as follows:

Distribution and marketing expenses 29 373,786 226,599
Administrative expenses 30 25,356 12,098
399,142 238,697

5.4 During the year written down value of property, plant and equipment that have been disposed-off amount to Rs. 53.65 million (2015:
Rs. Nil). Details of assets disposed off with WDV above Rs. 50,000 is given below:

Accumulated Net book Sale Particulars of Mode of
Type Cost depreciation value proceeds Gain buyers disposal

Vehicle - 622 498 124 253 129 Awais Shaikh As per company policy
owned 982 752 230 508 278 Khurram Shehzad As per company policy
982 785 197 508 311 Asif Raza As per company policy
622 498 124 253 129 Moosa Rind As per company policy
10,773 180 10,593 12,568 1,975 Meezan Bank Sale and operating leaseback
57,073 3,433 53,640 64,362 10,722

2016 2015
5.5 Capital work in progress

Office building 1,601,993 815,572
Pump building 250,137 348,220
Plant and machinery 22,319 40,561
Tanks and pipe lines 649,540 261,069
Dispensing pumps 96,357 143,903
Computer auxiliaries 7,045 7,740
Electrical, mechanical and fire fighting equipment 475,424 117,658
Furniture, office equipment and other assets 107,768 187,141
Borrowing cost capitalized 123,214 34,000
Advances to contractors 140,614 101,480
3,474,411 2,057,344

5.5.1 During the year additions amounting to Rs. 2,875.10 million (2015: 1,746.68 million) have been made in capital work-in-progress. This
also includes borrowing cost capitalized during the year at rates ranging from 7.36% - 9.59% (2015: 9.58% - 13.18%).
Note 2016 2015

6 INTANGIBLE ASSET

Net book value at beginning of the year 1,522 4,288
Amortization charge for the year 30 (1,522) (2,766)
Net book value at the end of the year 6.1 - 1,522
6.1 Net book value

Cost 8,299 8,299
Accumulated amortization (8,299) (6,777)
Net book value - 1,522
Rate of amortization - % 33.33 33.33
7 LONG-TERM INVESTMENTS

- Subsidiary - at cost 7.1 75,000 -
- Pakistan Refinery Limited - available-for-sale 7.2 & 7.3 1,886,977 1,955,310
1,961,977 1,955,310

Note Cost Provision for Carrying value
impairment 2016 2015
7.1 Subsidiary - at cost

Hascombe Lubricants
(Private) Limited 7.1.1 & 7.1.2 30,604 (30,604) - -
Hascol Terminals Limited 7.1.3 75,000 - 75,000 -
105,604 (30,604) 75,000 -

7.1.1 Hascombe Lubricants (Private) Limited is wholly owned subsidiary of the Company, incorporated in Pakistan under the Companies
Ordinance, 1984. Its shares are not quoted in an active market. The Company holds 9.78 million ordinary shares (2015: 9.78 million)
of Rs. 10 per share.

2016 2015
7.1.2 Movement in provision for impairment

Opening balance 30,604 30,604
Provision made during the year - -
Closing balance 30,604 30,604

7.1.3 During the year the Company subscribed 7.5 million shares of Hascol Terminals Limited (HTL) at a subscription price of Rs. 10 each,
which represent 62.5% of the share capital of HTL. These shares are not quoted on an active market and have been carried at cost.
7.2 Investment in Pakistan Refinery Limited

Cost Unrealised gain Carrying value

December 31, 2016 1,172,772 714,205 1,886,977

December 31, 2015 1,172,772 782,538 1,955,310
7.3 Investment in Pakistan Refinery Limited (quoted) amounts to Rs. 1,172.77 million (2015: Rs. 1,172.77 million) representing 13.72%
(2015: 13.72%) shares in PRL as at December 31, 2016. The Company has 43.24 million shares (2015: 43.24 million shares) as at
December 31, 2016.
Note 2016 2015

8 LONG-TERM DEPOSITS

Lease deposits 133,462 52,819
Less: current portion of lease deposits 13 (5,740) -
127,722 52,819
Other deposits 8.1 161,160 175,812
288,882 228,631

8.1 Other deposits include amount of Rs. 39.72 million (2015: Rs. 39.72 million) with Motorway Operations & Rehabilitation Engineering
(Private) Limited (MORE) for 10 petrol stations on M-2 Motorway and Rs. 8.28 million (2015: Rs. 8.28 million) with PAF Base Faisal
for 1 petrol station on Shara-e-Faisal, Karachi.
2016 2015
9 DEFERRED TAXATION - NET

This comprises the following:

Taxable temporary difference arising in respect of:
Accelerated depreciation (354,233) (286,347)
Assets under finance lease (129,683) (55,612)
Revaluation of fixed assets (513,467) (590,758)
Exchange gain (1,797) (3,379)
Surplus on remeasurement on investment (89,276) (97,817)

Deductible temporary difference arising in respect of:
Liabilities against assets subject to finance lease 182,677 132,751
Provision for:
- retirement benefit 40,718 31,001
- doubtful debts 2,358 2,463
- franchise income 8,168 -
Investments in subsidiary 9,140 9,547
Turnover tax 250,605 1,098,247
(594,790) 240,096
9.1 Movement in deferred tax

Opening deferred tax 240,096 509,075
Deferred tax income/(expense)
- through profit and loss (208,870) 287,302
- through other comprehensive income 9,805 (94,305)
Adjusted against tax liability (635,821) (461,976)
Closing deferred tax (594,790) 240,096

Note 2016 2015

10 STOCK-IN-TRADE

Raw and packing materials 79,694 63,757
Finished goods
- fuels 10.1 14,972,545 5,836,553
- lubricants 315,292 240,713
15,287,837 6,077,266
Stock of fuel in transit 1,110,137 2,328,995
16,477,668 8,470,018

10.1 Fuels include Rs. 4,799.01 million (2015: 239.88 million) of High Speed Diesel which has been maintained as line fill necessary for the
pipeline to operate.
Note 2016 2015

11 TRADE DEBTS - UNSECURED

Due from related party
- Considered doubtful 11.1 & 11.2 7,124 7,124
Due from others
- Considered good 7,871,281 4,263,595
- Considered doubtful 849 849
7,872,130 4,264,444
7,879,254 4,271,568
Less: Provision for impairment 11.3 (7,973) (7,973)
7,871,281 4,263,595

11.1 The aging of related party balances at the balance sheet date is as follows:

Past due 1-30 days - -
More than 365 days 7,124 7,124
11.2 This represents receivable from Hascombe Lubricants (Private) Limited (subsidiary company) amounting to Rs. 7.12 million (2015:
Rs. 7.12 million).
Note 2016 2015

11.3 Movement of provision for impairment

12
ADVANCES - CONSIDERED GOOD

To employees
- against expenses 1,716 70,138
- against salary 13,348 15,006
Leasing companies 2,203 2,606
Advance against purchase of shares 12.1 208,808 -
Suppliers 27,338 62,856
253,413 150,606
12.1 This represents amount paid to Hascol Terminals Limited (HTL) for further issue of shares.

Note 2016 2015

13 DEPOSITS, PREPAYMENTS AND
OTHER RECEIVABLES

Current portion of lease deposits 8 5,740 -
Prepaid rent 66,616 45,779
Prepaid insurance and others 14,001 36,147
Receivable from oil marketing companies 13.1 11,328 38,470
Receivable against regulatory duty 25,533 25,533
Inland freight equalization margin receivable 1,024,234 667,776
Franchise income receivable 13.2 73,304 81,946
Price differential claims 13.3 5,083 5,083
Others 13.4 60,909 59,095
1,286,748 959,829
13.1 This represents amount receivable from various oil marketing companies on account of share of motor gasoline imported on their
behalf.
2016 2015

13.2 Franchise income receivable 100,653 81,946

Movement of provision
Opening balance - -
Charge during the year (27,349) -
(27,349) -

13.3 This represents amount receivable from the Government of Pakistan (GoP) net of recovery as per fortnightly rates declared by
the Ministry of Petroleum and Natural Resources (MPNR). The Company together with other oil marketing companies is actively
pursuing the matter with the concerned authorities for the early settlement of above claim. The Company considers that the balance
amount will be reimbursed by GoP in due course of time.
13.4
This includes Rs. 4.45 million (2015: Rs. 24.64 million) receivable from Sigma Motors (Private) Limited, an associated company.

Note 2016 2015
14 CASH AND BANK BALANCES

Balances with banks:
- in current accounts 1,410,192 382,458
- in deposit accounts 14.1 6,409,149 3,684,616
7,819,341 4,067,074
Cash in hand 1,729 4,473
7,821,070 4,071,547
14.1 These carry mark-up ranging from 3.75% to 6% per annum (2015: 5.50% to 6.50% per annum).

15 SHARE CAPITAL

Authorized share capital
2016 2015 2016 2015
Number of shares Rupees in ‘000

150,000,000 150,000,000 Ordinary shares of Rs. 10 each 1,500,000 1,500,000

Issued, subscribed and paid-up share capital
2016 2015 Note 2016 2015
Number of shares Rupees in ‘000

89,540,000 89,540,000 Ordinary shares of Rs. 10 each fully paid in cash 895,400 895,400

1,060,000 1,060,000 Ordinary shares of Rs. 10 each for
consideration other than cash 15.1 10,600 10,600
9,966,000 9,966,000 Annual bonus @ 11% - December 2014 99,660 99,660
20,113,200 20,113,200 Interim bonus @ 20% - June 2015 201,132 201,132
120,679,200 120,679,200 1,206,792 1,206,792

15.1 These were issued on December 8, 2004 for consultancy, feasibility study, travel and other expenses.
16 RESERVES 2016 2015

Capital reserves
Share premium reserve 1,070,828 1,070,828
Fair value reserve 624,930 684,721
1,695,758 1,755,549
Revenue reserve
Unappropriated profit 2,059,588 1,566,762
3,755,346 3,322,311

17 SURPLUS ON REVALUATION OF
FIXED ASSETS - NET OF TAX
Opening balance 1,847,286 492,209

Gain on revaluation - 1,479,641
Transfer in respect of incremental depreciation
charged during the year (190,939) (124,564)
1,656,347 1,847,286
Related deferred tax
Related deferred tax of gain on revaluation - 473,112
Effective rate adjustment (18,101) (14,153)
Reversal of deferred tax liability on account of incremental
depreciation charged during the year (59,190) (39,860)
(513,467) (590,758)
1,142,880 1,256,529

17.1 In 2012, the Company carried out revaluation of petrol pumps through an independent valuer. Revalued amount of assets was Rs.
1,172 million, resulting in surplus (net of deferred tax) amount to Rs. 387 million. Further, during 2015 the Company carried out
revaluation of depots and petrol pumps through an independent valuer. Revalued amount of assets was Rs. 4,154 million, resulting in
surplus (net of deferred tax) amounting to Rs. 1,006 million.

Note 2016 2015

18 LONG TERM FINANCES - SECURED
PAIR Investment Company Limited 18.1 - 96,429

First Women Bank Limited 18.2 225,000 -
Burj Bank Limited 18.3 - 187,922
Pak Oman Investment Company Limited 18.4 220,007 177,436
Sukuk certificates 18.5 1,961,821 -
National Bank of Pakistan 18.6 500,000 -
2,906,828 461,787
Current portion of long term finances
PAIR Investment Company Limited - 42,857
First Women Bank Limited 100,000 -
Burj Bank Limited - 187,922
Pak Oman Investment Company Limited 136,579 54,857
Sukuk certificates 300,000 -
National Bank of Pakistan 62,500 -
(599,079) (285,636)
2,307,749 176,151

18.1 This represents term finance facility from PAIR Investment Company Limited to finance the development of Machike storage facility.
The sanctioned limit is Rs. 150 million and is secured against first pari passu charge on all present and future current and fixed assets
of the Company with 25% margin, personal guarantee of Mr. Mumtaz Hasan Khan (CEO) as sponsor and post dated cheque covering
the purchase price of facility. Mark-up rate is 3 months KIBOR plus a spread of 3%. The loan has been repaid during the current
year.
18.2 This represents term finance facility from First Women Bank Limited for construction of retail outlets. The sanctioned limit was Rs.
300 million and was secured against pledge of TDR of Rs. 60 million, pledge of PRL shares at 40% margin and personal guarantee of
Mr. Mumtaz Hasan Khan (CEO) as sponsor. Mark-up rate is 6 months KIBOR plus a spread of 1.3%. The loan is repayable in 36 equal
monthly instalments in arrears, from first draw down with last repayment due in March 07, 2019.
18.3 This represents working facility of Diminishing Musharika arrangement from Burj Bank Limited to refinance capital expenditure
incurred by the Company. The sanction limit is 300 million and is secured against movable fixed assets of the Company with 25%
margin and pledge of shares of Pakistan Refinery Limited (PRL) with 40% margin to be maintained at all times. The loan has been
repaid during the current year.
18.4 This represents term finance facility from Pak Oman Investment Company Limited to refinance the new storage facility at Daulatpur.
The sanction limit is Rs. 300 million and is secured against first pari passu charge on Company’s land, building and machinery located
at Daulatpur along with 25% margin and personal guarantee of Mr. Mumtaz Hasan Khan (CEO) as sponsor. It carries mark-up rate
of 6 months KIBOR plus a spread rate from 2.5% to 3%. The loan is repayable in 42 equal monthly instalments in arrears, from first
draw down with last repayment due in July 19, 2020.
Note 2016 2015

18.5 Sukuk certificates 18.5.1 2,000,000 -

Issuance cost
Opening - -
Addition (47,731) -
Charged to profit and loss 9,552 -
(38,179) -
1,961,821 -

18.5.1 This represent privately placed long term islamic certificate (Sukuk) amounting to Rs. 2,000 million, issued by the Company during
the year to meet the working capital requirement and expansion plans of the Company. Summit Bank Limited is the trustee while
Meezan Bank Limited is acting as shariah structuring advisor for this Sukuk. The Company is in the process of listing of Sukuk over
the counter (OTC) on Pakistan Stock Exchange. This facility carries profit at 3 month KIBOR plus 1.5% per annum, payable quarterly.
This arrangement is secured against first pari-passu charge over specific depots and retail outlets of the Company inclusive of a 25%
margin. The certificates will be redeemed in 20 equal quarterly installments, in arrears, starting from April 2017.

18.6 This represents term loan facility obtained from National Bank of Pakistan to finance capital expenditure for construction of a storage
facility at Mehmood Kot. The sanction limit is Rs. 500 million and is secured against exclusive charge of Rs. 666.67 million over
the entire land and building, installation and machinery of the facility and personal guarantee of Mr. Mumtaz Hasan Khan (CEO) as
sponsor and post dated cheque covering facaility amount and corporate guarantee of Fossil Energy (Private) Limited and Marshall Gas
(Private) Limited. It carries mark-up rate of 3 months KIBOR plus a spread rate of 2.5%. The loan is repayable in 16 equal quarterly
instalments in arrears, with grace period of 12 months, from first draw down with last repayment due in Feburary 24, 2021.
19 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE
The Company has entered into lease agreements with various leasing companies for lease of items of plant and machinery and other
assets. Minimum lease payments, which are payable by the year 2020, have been discounted by using financing rates ranging from
7.90% to 9.85% (2015 : 8.43% to 14.03% per annum). Title to the assets acquired under the leasing arrangements are transferable to
the Company upon payment of entire lease obligations.
The minimum lease payments for which the Company has committed to pay in future under the lease agreements are as follows:
2016 2015
Minimum Financial Present Minimum Financial Present
lease charges value of lease charges value of
payments allocated minimum payments allocated to minimum
to future lease future lease
periods payments periods payments

Not later than one year 185,485 37,098 148,387 137,086 34,489 102,597
Later than one year but
not later than five years 524,896 53,165 471,731 365,040 42,110 322,930
710,381 90,263 620,118 502,126 76,599 425,527

20 DEFERRED LIABILITY - GRATUITY
The Company operates an unfunded gratuity scheme for employees who have completed the employment period of 5 years. Provision
is created for the benefit of the scheme on the basis of actuarial valuations. The actuarial valuations are carried out by an independent
valuer using the projected unit credit method.
Note 2016 2015

Deferred liability - gratuity 20.1 & 20.2 135,791 99,090

The information provided in notes 20.1 to 20.5 has been obtained from the actuarial valuations.

20.1 Movement in liability recognized in balance sheet Note 2016 2015

Present value of defined benefit obligation as
at the end of the year 20.3 135,791 99,090
Fair value of plan assets - -
Balance sheet liability 135,791 99,090
20.2 Movement in liability recognized in balance sheet

Balance at the beginning of the year 99,090 71,057
Add: charge for the year 20.4 27,508 20,416
Less: payments to outgoing employees (5,003) (3,359)
Remeasurements charged to other comprehensive income 14,196 10,976
Balance at the end of the year 135,791 99,090

2016 2015
20.3 Movement in present value of the defined benefit obligation

Current service cost 17,963 12,454
Interest cost 9,545 7,962
Benefits paid during the year (5,003) (3,359)
121,595 88,114
Remeasurement: actuarial losses - net of tax 9,795 7,464
Impact of deferred tax 4,401 3,512
14,196 10,976
Present value of defined benefit obligation at the end of the year 135,791 99,090

20.4 Amounts recognized in the profit or loss

Net interest cost 9,545 7,962
Expense for the year 27,508 20,416
20.5 Actuarial assumptions
The following significant assumptions were used in the valuation carried out at the balance sheet date using the projected unit credit
method:
Note 2016 2015
% per annum
- Expected long-term rate of increase in salary level 7.50% 9.00%

- Discount rate 7.50% 9.00%

21 TRADE AND OTHER PAYABLES

Trade creditors 22,258,817 12,069,319
Payable to cartage contractors 2,445,673 1,938,342
Advance from customers 4,253,932 2,553,327
Dealers’ and customers’ security deposits 21.1 170,000 64,132
Accrued liabilities 6,153 46,018
Other liabilities 688,183 748,590
29,822,758 17,419,728

21.1 The security deposits are non-interest bearing and are refundable on termination of contracts.
22 MARK-UP ACCRUED Note 2016 2015

Mark-up accrued 91,185 54,311

23 SHORT-TERM BORROWINGS - SECURED

Running finances utilised against mark-up arrangements 23.1 1,329,629 538,055
Loans 23.2 2,560,000 875,000
3,889,629 1,413,055

23.1 The facilities for short term running finances are available from various commercial banks aggregating to Rs. 1,600 million (2015:
Rs. 900 million). The rates of mark-up ranges from 3 month KIBOR plus 1.5% to 3 month KIBOR plus 3% (2015: 3 month KIBOR plus
2.5% to 3 month KIBOR plus 3%). These arrangements are secured against hypothecation charge over the Company’s present and
future current assets with minimum 25% margin, pledge of PRL shares, with minimum 40% margin, personal guarantee of Mr. Mumtaz
Hasan Khan (CEO) as sponsor, along with equitable registered mortgage charge over the property situated at The Forum, Suite No.
105-106, 1st Floor, Khayaban-e-Jami, Clifton, Karachi.

23.2 The loans have been obtained from various financial institutions aggregating to Rs. 2,600 million (2015: Rs. 875 million). The rates of
mark-up ranges from 6 month KIBOR plus 2.25% to 6 month KIBOR plus 2.5% (2015: 1 year KIBOR plus 2.25% to 1 year KIBOR
plus 2.5%). These are secured against hypothecation charge over the Company’s present and future current assets.
2016 2015
24 TAXATION

Sales tax payable 169,112 92,988
Income tax payable 314,757 866,964
483,869 959,952

25 CONTINGENCIES AND COMMITMENTS

Contingencies

As per the deliberations of the main committee of the Oil Companies Advisory Committee (OCAC) held in their meeting number
MCM-168 dated September 20, 2007, the financial costs on outstanding Price Differential Claims (PDCs) should be worked and billed
to the Government of Pakistan (GoP) through OCAC by the Oil Marketing Companies (OMCs) on a regular basis. Although the
Company had billed Rs. 65.97 million to the GOP/ OCAC, the management had not accounted for its impact in these unconsolidated
financial statements as the inflow of economic benefits, though probable, is not virtually certain.
Commitments

The facility for opening letters of credit (LCs) acceptances as at December 31, 2016 amounted to Rs. 30,550 million (2015: Rs. 17,100
million) of which the amount remaining unutilized as at that date was Rs. 3,631 million (2015: Rs. 1,797 million).
Commitments in respect of capital expenditure contracted for but not yet incurred are as follows:
2016 2015

Property, plant and equipment 758,237 427,701

Commitments for rental under operating lease agreements / ijarah contracts as at December 31, 2016 amounted to Rs. 1,984 million
(2015: Rs.1,944 million) as follows:
2016 2015

Not later than one year 173,461 136,245
Later than one year but not later than five years 642,427 538,869
Later than five years 1,167,834 1,269,461
1,983,722 1,944,575

26 SALES - NET

Gross sales, inclusive of sales tax 129,296,958 94,274,786
Less: sales discount (537,683) (209,489)
128,759,275 94,065,297

Note 2016 2015

27 OTHER REVENUE

Joining fee for petrol pump operators 55,349 9,600
Franchise fee 96,971 73,231
Owned tank lorries 46,960 -
199,280 82,831

28 COST OF PRODUCTS SOLD

Opening stock of lubricants, raw and packing materials 304,470 256,461
Raw and packing materials purchased 780,242 784,019
Less: closing stock of lubricants, raw and packing materials 10 (394,986) (304,470)
Lubricants, raw and packing materials consumed 689,726 736,010

Opening stock - fuel 8,165,548 3,217,243
Fuel purchased 81,431,713 63,370,263
Storage and handling charges 538,393 328,558
Duties and levies 28.1 20,256,971 14,403,074
Less: closing stock - fuel 10 (16,082,682) (8,165,548)
Net realisable value - adjustment - 128,215
94,309,943 73,281,805
94,999,669 74,017,815
28.1
Duties and levies

Inland freight equalization margin 3,624,258 2,399,895
Petroleum development levy 14,566,162 9,185,877
Freight 2,066,551 2,817,302
20,256,971 14,403,074

29 DISTRIBUTION AND MARKETING EXPENSES

Salaries, wages and other benefits 30.1 443,932 258,579
Traveling and conveyance 169,832 58,398
Rent, rates and taxes 201,788 174,723
Insurance 113,947 75,026
Depreciation 5.3 373,786 226,599
Printing, communication and stationery 9,374 17,232
Repairs and maintenance 54,658 22,405
Utilities 66,305 27,718
Fees and subscription 11,072 4,847
Legal and professional charges 3,236 1,111
Commission 194,043 111,767
Royalty 17,653 43,603
Advertising and publicity 75,237 30,756
Provision against franchise income 27,349 -
Miscellaneous 1,266 710
1,763,478 1,053,474

Note 2016 2015

30 ADMINISTRATIVE EXPENSES

Salaries, allowances and other benefits 30.1 229,341 149,545
Insurance 21,711 20,093
Depreciation 5.3 25,356 12,098
Amortization 6 1,522 2,766
Utilities 10,353 8,335
Fee and subscription 22,932 21,020
Auditors’ remuneration 30.2 2,746 2,545
Donation 30.3 17,520 6,345
Ujrah payments 10,108 6,642
528,636 366,238
30.1 Salaries and other benefits relating to distribution and administrative expense include:
- Gratuity 20.4 27,508 20,416

- Contribution to provident fund 15,492 10,713
30.2 Auditors’ remuneration

Statutory audit 1,265 1,100
Half yearly review 420 366
Certifications 500 673
Consolidation 230 200
Out of pocket expenses 331 206
2,746 2,545

30.3 Donation includes an amount of Rs. 0.5 million (2015: Rs. 0.2 million) paid to Layton Rahmatulla Benevolent Trust (LRBT), Mr.
Najmus Saquib Hameed, a director of the Company, is also Chairman of LRBT.
2016 2015
31 OTHER INCOME

Income from financial assets
Dividend income 13,407 -
178,440 139,662
Income from non-financial assets
Promotional marketing fee 2,641 1,006
Scrap sales 1,055 569
Gain on disposal of operating fixed assets 12,061 2,272
Rent income 6,764 6,431
Sundries 10,535 9,799
Storage and handling income - 50,802
33,056 70,879
211,496 210,541

2016 2015
32 FINANCE COST

Mark-up on borrowings 220,712 166,041
Letter of credit charges 163,812 148,243
Lease finance charges 35,193 23,720
Bank charges 12,901 11,648
432,618 349,652
33 OTHER CHARGES

Workers’ welfare fund 46,423 24,420
Exchange (gain) / loss - net (5,829) 58,989
40,594 83,409
34 TAXATION
Current 700,869 330,862

Prior 28,610 19,924
Deferred 208,870 (287,302)
938,349 63,484
34.1 Relationship between tax expense
and accounting profit

Accounting profit before taxation 2,153,975 1,196,721
Tax at the applicable tax rate of 31% (2015: 32%) 667,732 382,951
Tax effect on income under final tax regime (3,297) 12,317
Reversal of deferred tax asset - net 208,870 (287,302)
Prior year tax 28,610 19,924
Other adjustments 36,434 (64,406)
Tax expense for the year 938,349 63,484

35 EARNINGS PER SHARE - BASIC AND DILLUTED
Profit for the year 1,215,626 1,133,237

Weighted average number of ordinary shares in thousand 120,679 120,679

Basic earning per share - Rupees 10.07 9.39

There is no dilutive effect on basic earning per share as the Company has no potential ordinary shares outstanding at year end.

36 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
2016 2015
Chief Directors Executives Chief Directors Executives
Executive Executive
Director’s fee - 6,775 - - 2,975 -

Managerial remuneration 21,844 36,450 328,761 19,080 30,751 151,722
Cost of living allowance 4,241 4,050 56,555 3,603 3,913 33,950
Reimbursement of
medical expenses 3,737 1,100 17,365 2,322 778 12,450
Bonus 6,521 13,500 25,449 3,780 8,100 16,544
Retirement benefits 1,249 2,085 12,158 1,087 1,616 8,010
37,592 63,960 440,288 29,872 48,133 222,676

Number of persons 1 6 202 1 6 126

36.1 The Chief Executive Officer and certain executives are also provided with free use of Company maintained cars and cellular
connections. In addition, the Chief Executive Officer and a director are provided with free security services in accordance with the
terms of employment.
37 RELATED PARTY TRANSACTIONS AND BALANCES
Amount due to/ from and other significant transactions with related parties, other than those disclosed elsewhere in these financial
statements, are as follows:
Nature of relationship Nature of transaction 2016 2015

Associated companies
Sigma Motors (Private) Limited Sale of fuels - 1,693
Office rent 6,764 6,432

Staff retirement benefits/ contribution funds
Provident fund Contribution 15,492 10,713
Gratuity scheme Expense charged 27,508 20,416

Key management personnel Salaries and benefits 69,920 63,150

Director Fee Fee for attending meetings 6,775 2,975

Other related parties Consultancy services 18,550 10,180

Balances

Sigma Motors (Private) Limited Other receivable 4,458 24,643

Expenses recovered from/ charged by related parties are based on actual expense.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities
of the Company directly or indirectly. The Company considers its Chief Executive and Executive Director to be key management
personnel.
Note 2016 2015

38 CASH GENERATED FROM OPERATIONS


Adjustment for:
Depreciation and amortization 29 & 30 400,664 241,463
Provision for gratuity 20.4 27,508 20,416
Profit on bank deposits 31 (165,033) (139,662)
Exchange gain (15,572) -
Gain on disposal of operating fixed assets 31 (12,061) (2,272)
Finance cost 32 432,618 349,652
Changes in working capital 38.1 434,092 3,125,947
3,256,191 4,792,265

Note 2016 2015

38.1 Changes in working capital

(Increase) / decrease in current assets
Stock-in-trade (8,007,650) (4,996,314)
Trade debts (3,607,686) 285,228
Advances (102,807) 15,960
Deposits, prepayments and other receivables (326,919) 65,125
(12,045,062) (4,630,001)
Increase in current liabilities
Trade and other payables 12,479,154 7,755,948

Changes in working capital 434,092 3,125,947

39 CASH AND CASH EQUIVALENTS

Short-term borrowings 23 (3,889,629) (1,413,055)
3,931,441 2,658,492
40 OPERATING SEGMENTS
- These financial statements have been prepared on the basis of a single reportable segment.
- Sales from petroleum products represents 99.7 % (2015: 99.7%) of total revenues of the Company.
- Out of total sales of the Company, 100 % (2015: 100 %) related to customers in Pakistan.
- All non-current assets of the Company as at December 31, 2016 are located in Pakistan.
- The Company sells its product to dealers, governments agencies and autonomous bodies, independent power project and other
corporate customers. However, none of the customers exceeds 10% threshold.
Note 2016 2015

41 FINANCIAL INSTRUMENTS BY CATEGORY

Financial assets

Available for sale

At amortised cost
Trade debts 11 7,871,281 4,263,595
Advances 12 222,156 15,006
Other receivables 13 1,200,391 877,903
Cash and bank balance 14 7,821,070 4,071,547
17,403,780 9,456,682
19,365,757 11,411,992
Financial liabilities

At amortised cost
33,076,586 17,221,081
41.1 Fair values of financial instruments
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arm’s
length transaction. The fair value of financial instruments approximates their carrying value.

a) Fair values versus carrying amounts
The fair values of financial assets and liabilities, together with the carrying amounts shown in the unconsolidated balance sheet, are
as follows:
2016 2015
Carrying Fair Carrying Fair
amount Value amount Value
Financial Assets
Long term investments 1,961,977 1,961,977 1,955,310 1,955,310

Long term deposits 288,882 288,882 228,631 228,631
Trade debts 7,871,281 7,871,281 4,263,595 4,263,595
Advances 222,156 222,156 15,006 15,006
Other receivables 1,200,391 1,200,391 877,903 877,903
Cash and bank balances 7,821,070 7,821,070 4,071,547 4,071,547
19,365,757 19,365,757 11,411,992 11,411,992
2016 2015
Financial Liability
Long-term finances - secured 2,906,828 2,906,828 461,787 461,787

Liabilities against assets subject to
finance lease 620,118 620,118 425,527 425,527
Mark-up accrued 91,185 91,185 54,311 54,311
Trade and other payables 25,568,826 25,568,826 14,866,401 14,866,401
Short-term running finances - secured 3,889,629 3,889,629 1,413,055 1,413,055
33,076,586 33,076,586 17,221,081 17,221,081

b) Valuation of financial instruments

The Company measures fair value using the following fair value hierarchy that reflects the significance of the inputs used in making
the measurements:
Level 1: Quoted market price (unadjusted) in an active market.

Level 2: Valuation techniques based on observable inputs.
Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation
technique includes inputs not based on observable data.
Fair values of financial assets that are traded in active markets are based on quoted market prices. For all other financial instruments
the Company determines fair values using valuation techniques unless the instruments do not have a market/ quoted price in an active
market and whose fair value cannot be reliably measured.
Valuation techniques used by the Company include discounted cash flow model. Assumptions and inputs used in valuation techniques
includes risk-free rates, bond and equity prices, foreign currency exchange rates, equity and equity index prices. The objective of
valuation techniques is to arrive at a fair value determination that reflects the price of the financial instrument at the balance sheet
date that would have been determined by market participants acting at arm’s length.

Valuation models for valuing securities for which there is no active market requires significant unobservable inputs and a higher
degree of management judgement and estimation in the determination of fair value. Management judgement and estimation are
usually required for selection of the appropriate valuation model to be used, determination of expected future cash flows on the
financial instrument being valued and selection of appropriate discount rates, etc.

The table below analyses equity instruments measured at fair value at the end of the reporting period by the level in the fair value
hierarchy into which the fair value measurement is categorised:

2016 Level 1 Level 2 Level 3 Total

Available-for-sale financial assets
- Equity securities 1,886,977 75,000 - 1,961,977


- Equity securities 1,955,310 - - 1,955,310

42 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

The Company is exposed to the following risks from its use of financial instruments:
- Market risk (42.1.1)
- Credit risk and concentration of credit risk (42.1.2)
- Liquidity risk (42.1.3)
This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and
processes for measuring any increase in risk, and the Company’s management of capital.
42.1 Financial risk management
The Board of Directors (the Board) has overall responsibility for the establishment and oversight of the Company’s risk management
framework. The Board is responsible for developing and monitoring the Company’s risk management policies.
The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate
risk limits and controls, and to monitor risk and adherence to limits. Risk management policies and systems are reviewed regularly to
reflect changes in the market conditions and the Company’s activities. The Company through its training and management standards
and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles
and obligations.
The Board oversee how management monitors compliance with the Company’s risk management policies and procedures, and
review the adequacy of risk management framework in relation to the risks faced by the Company.
42.1.1 Market risk

The Company is exposed to market risk through its use of financial instruments and specifically to currency risk, interest rate risk
and certain other price risks, which result from both its operating and investing activities. The objective of market risk management
is to manage and control market risk exposures within an acceptable range. The market risk includes:
(a) Currency risk

Currency risk is the risk that the value of financial asset or a liability will fluctuate due to a change in foreign exchange rates. It arises
mainly where receivables and payables exist due to transactions entered into foreign currencies. The Company imports petroleum
product and is thus exposed to currency risk in respect to foreign creditors, which at the year end amount to USD 94.62 million
(2015: USD 50.38 million) having PKR equivalent amount of Rs. 9,916.65 million (2015: Rs. 5,287.17 million). The average rates
applied during the year is Rs. 104.92 per USD (2015: Rs. 102.69 per USD) and the spot rate as at December 31, 2016 is Rs. 104.80
per USD (2015: Rs. 104.95 per USD).
The Company manages its currency risk by close monitoring of currency markets. Under regulatory requirements, the Company
cannot hedge its currency risk exposure. Consequently, the Company recorded exchange gain amounting to Rs. 5.83 million (2015:
exchange loss amounting to Rs. 58.9 million) during the year.

Sensitivity analysis

As at December 31, 2016, if the Pakistani Rupee had weakened/ strengthened by 10% against USD with all other variables held
constant, profit for the year would have been lower/ higher by Rs. 992.01 million (2015: Rs. 529.8 million).
(b) Interest rate risk

Interest rate risk is the risk that the fair value of the future cash flows of a financial instrument will fluctuate because of changes
in market interest rates. Interest rate exposure arises due to long-term finances, liabilities against assets subject to finance lease
and short term running finances. At the balance sheet date the interest rate profile of the Company’s mark-up bearing financial
instruments is summarized as follows:
Cash flow sensitivity for variable rate instruments
A change of 100 basis points (bps) in interest rates at the reporting date would have increased/ (decreased) profit or loss before tax
as shown below. This analysis assumes that all other variables, in particular foreign currency rates remain constant.
Profit and loss Equity

Cash flow sensitivity of 100 bps 100 bps 100 bps 100 bps
variable rate instruments increase decrease increase decrease

(Expense) / income

As at December 31, 2016 (37,912) 37,912 (26,159) 26,159

As at December 31, 2015 (22,376) 22,376 (15,216) 15,216

Effective Exposed to yield/interest risk Non-interest bearing
yield/ interest Maturity Maturity Sub- Maturity Maturity Sub-
rate % up to one after one Total up to one after one Total 2016
year year year year Total

Financial assets
Long-term investments - - - - 1,961,977 1,961,977 1,961,977
Long-term deposits - - - - 288,882 288,882 288,882
Trade debts - - - 7,871,281 - 7,871,281 7,871,281
Advances - - - 222,156 - 222,156 222,156
Other receivables - - - 1,200,391 - 1,200,391 1,200,391
Cash and bank balances 3.75-6.0 p.a. 6,409,149 - 6,409,149 1,411,921 - 1,411,921 7,821,070
(a) 6,409,149 - 6,409,149 10,705,749 2,250,859 12,956,608 19,365,757
Liabilities against assets
subject to finance lease 8.55-10.4p.a. 148,387 471,731 620,118 - - - 620,118
Long term finances - secured 7.95-10.15 p.a. 599,079 2,307,749 2,906,828 - - - 2,906,828
Trade and other payables - - - 25,568,826 - 25,568,826 25,568,826
Mark-up accrued - - - 91,185 - 91,185 91,185
Short-term borrowings 8.15-9.65 p.a. 3,889,629 - 3,889,629 - - - 3,889,629
(b) 4,637,095 2,779,480 7,416,575 25,660,011 - 25,660,011 33,076,586

On balance sheet gap (a)-(b) 1,772,054 (2,779,480) (1,007,426) (14,954,262) 2,250,859 (12,703,403) (13,710,829)




Financial assets
Trade debts - - - 4,263,595 - 4,263,595 4,263,595
Advances - - - 15,006 - 15,006 15,006
Other receivables - - - 852,370 - 852,370 852,370
Cash and bank balances 5.5-6.5 p.a. 3,684,616 - 3,684,616 386,931 - 386,931 4,071,547
(a) 3,684,616 - 3,684,616 5,517,902 2,183,941 7,701,843 11,386,459

Liabilities against assets subject
to finance lease (gross) 8.43-13.26 p.a. 102,597 322,930 425,527 - - - 425,527
Long term finances - secured 9.41-13.19 p.a. 285,636 176,151 461,787 - - - 461,787
Mark-up accrued - - - 54,311 - 54,311 54,311
(b) 1,801,288 499,081 2,300,369 14,920,712 - 14,920,712 17,221,081
On balance sheet gap (a)-(b) 1,883,328 (499,081) 1,384,247 (9,402,810) 2,183,941 (7,218,869) (5,834,622)
(c) Price Risk

Price risk represents the risk that the fair value of a financial instrument will fluctuate because of changes in the market prices
(other than those arising from interest/mark-up rate risk or currency risk), whether those changes are caused by factors specific to
the individual financial instruments or its issuers, or factors affecting all or similar financial instruments traded in the market. The
Company is exposed to equity price risk since it has investments in quoted equity securities amounting to Rs. 1,887 million (2015:
Rs. 1,955 million) at the balance sheet date.
The Company manages price risk by monitoring exposure in quoted equity securities and implementing strict discipline in internal
risk management and investment policies.
The value of investment subject to equity price risk are, in almost all instance, based on quoted market price as of the reporting date
except for unquoted investments which are carried at cost. Market prices are subject to fluctuation and consequently the amount
realized as a result of subsequent sale of an investment may differ from the reported market value. Fluctuation in the market price of a
security may result from perceived changes in the underlying economic characteristics of the investee, the relative price of alternative
investment and general market condition. Furthermore, the amount realized in the sale of a particular security may be affected by the
relative quantity of the security being sold.

The table below summarizes the Company’s equity price risk as of December 31, 2016 and 2015 and shows the effects of a
hypothetical 30% increase and a 30% decrease in market prices as at the year end. The selected hypothetical change does not reflect
what could be considered to be the best or worst case scenarios. Accordingly, the sensitivity analysis prepared is not necessarily
indication of the effect on Company’s net assets of future movement in the level of PSX 100 index.

Hypothetical Estimated fair Hypothetical Hypothetical
Fair price change value increase / increase /
value at 30% hypothetical (decrease) in (decrease) in
after change shareholders profit / (loss)
in price equity
December 31, 2016 1,886,977 Increase 2,453,070 566,093 -

Decrease (2,453,070) (566,093) -

Decrease (2,541,903) (586,593) -

(d) Other price risk

Other price risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in
market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific
to the individual financial instrument or its issuer. The Company is not exposed to such price risk as there is no such type of financial
instruments available to the Company.
42.1.2 Credit risk and concentration of credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a
financial loss. Out of the total financial assets of Rs. 17,404 million (2015: Rs. 9,457 million), the financial assets which are subject to
credit risk amounting to Rs. 9,583 million (2015: Rs. 5,385 million).
The credit quality of receivables can be assessed with reference to the historical performance with no or some defaults in recent
history. The Company manages credit risk of receivables through the monitoring of credit exposures, limiting transactions with
specific customers and continuous assessment of credit worthiness of its customers.
The carrying values of financial assets which are neither past due nor impaired are as under:
2016 2015

Long-term deposits 288,882 228,631
Trade debts 7,871,281 4,263,595
Advances 222,156 15,006
Other receivables 1,200,391 877,903
Cash and bank balance 7,821,070 4,071,547
17,403,780 9,456,682

The credit risk for cash and cash equivalents is considered to be negligible, since the counterparties are reputable banks and institutes
with high quality external credit ratings. The credit quality of bank balances that are neither past due nor impaired can be assessed
with reference to external credit ratings as follows:
Banks Rating Short Long Banks Rating Short Long

Agency term term Agency term term
Allied Bank Limited PACRA A1+ AA+ Samba Bank Limited JCR- VIS A1 AA
Askari Bank Limited PACRA A1+ AA+ Silkbank Limited JCR- VIS A-2 A-
Bank Al Falah Limited PACRA A1+ AA Sindh Bank Limited JCR- VIS A1+ AA
Bank Al Habib Limited PACRA A1+ AA+ Soneri Bank Limited PACRA A1+ AA-
Bank Islami Pakistan Limited PACRA A1 A+ Summit Bank Limited JCR- VIS A1 A-
Habib Metropolitan Bank Limited PACRA A1+ AA+ United Bank Limited JCR- VIS A1+ AAA
Habib Bank Limited JCR- VIS A1+ AAA First Women Bank Limited PACRA A2 A-
MCB Bank Limited PACRA A1+ AAA Burj Bank Limited PACRA A1 A
Meezan Bank Limited JCR- VIS A1+ AA Industrial and Commercial
National Bank of Pakistan PACRA A1+ AAA Bank of China Limited S&P - A
NIB Bank Limited PACRA A1+ AA- PAIR Investments Limited PACRA A1+ AA
42.1.3 Liquidity risk

Liquidity risk reflects the Company’s inability of raising funds to meet commitments. Management closely monitors the Company’s
liquidity and cash flow position. This includes maintenance of balance sheet liquidity ratios, debtors and creditors concentration both
in terms of overall funding mix and avoidance of undue reliance on large individual customers.

As at December 31, 2016 the Company’s financial liabilities have contractual maturities as summarised below:
Within one Over one

year year Total

Long-term finances - secured 599,079 2,307,749 2,906,828
Liabilities against assets subject to finance lease 148,387 471,731 620,118
Trade and other payable 25,568,826 - 25,568,826
Mark-up accrued 91,185 - 91,185
Short-term running finances - secured 3,889,629 - 3,889,629
30,297,106 2,779,480 33,076,586

As at December 31, 2015 the Company’s liabilities had contractual maturities as summarised below:
Within one Over

year one year Total

Long-term finances - secured 285,636 176,151 461,787
16,722,000 499,081 17,221,081

43 CAPITAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Board’s policy is to maintain a strong capital base so as to maintain investors’, creditors’ and market’s confidence and to sustain
future development of the business, safeguard the Company’s ability to continue as going concern in order to provide returns for
shareholders and benefit for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The Board
monitor the return on capital, which the Company defines as net profit/ (loss) after tax divided by total shareholders’ equity. The
Board also monitor the level of dividend to ordinary shareholders subject to the availability of funds.
The Company finances its operations through equity, borrowings and management of working capital with a view to maintain an
appropriate mix between various sources of finance to minimize risk.
2016 2015

Total borrowings 7,416,575 2,300,369
Cash and bank balance (7,821,070) (4,071,547)
Excess of net cash over debt/ net debt (404,495) (1,771,178)
Total Equity 4,962,138 4,529,103
Total Capital 4,557,643 2,757,925
Gearing ratio 0.00% 0.00%
44 EMPLOYEES PROVIDENT FUND

The Company operates approved provident fund for its employees. Details of assets and investments of the fund is as follows:
Note 2016 2015

Size of fund - total assets 72,797 54,856

Cost of investments made 69,931 52,662

Percentage of investments made 100% 100%

Fair value of investments 44.1 72,797 54,856

44.1 The break-up of fair value of investments is as follows:
2016 2015
Investments Percentage of Investments Percentage of
investment investment
% %

Regular income certificates 15,675 21.53 16,219 29.57
Saving bank accounts 57,122 78.47 38,637 70.43
72,797 54,856

The management, based on the un-audited financial statements of the fund, is of the view that the investments out of the provident
fund have been made in accordance with the provision of section 227 of the Companies Ordinance, 1984 and the rules formulated
for the purpose.
45 NUMBER OF EMPLOYEES

Total number of employees at year-end 519 394

Average number of employees during the year 457 359

46 EVENTS AFTER THE BALANCE SHEET DATE

The Board of Directors in its meeting held on March 31, 2017 has proposed a cash dividend of Rs. 3.50 per share for the
year ended December 31, 2016 for approval of the members at the Annual General Meeting to be held on April 28, 2017.
These unconsolidated financial statements do not include the effect of the proposed cash dividend which will be accounted for in the
unconsolidated financial statements for the year ending December 31, 2017.

47 GENERAL

All amounts have been rounded to the nearest thousand.

The corresponding figures have been reclassified/re-arranged where considered necessary for the purpose of better presentation.
However, no material reclassification/re-arrangement have been made in these unconsolidated financial statements.

48 DATE OF AUTHORISATION FOR ISSUE

These unconsolidated financial statements have been authorized for issue on March 31, 2017 by the Board of Directors of the
Company.


for the year ended December 31, 2016

Annual Report 2016 QUALITY PERSONIFIED page 87
CONSOLIDATED BALANCE SHEET

AS AT DECEMBER 31, 2016 (Rupees in thousand)
Note 2016 2015

ASSETS
Non-current assets
Property, plant and equipment 5 9,424,264 6,277,928
Intangible asset 6 - 1,522
Deferred taxation 9 - 240,096
Total non-current assets 11,601,603 8,703,487
Current assets
Stock-in-trade 10 16,477,668 8,470,018
Trade debts 11 7,871,281 4,263,595
Advances 12 44,605 150,606
Deposits, prepayments and other receivables 13 1,297,628 959,829
Total current assets 33,523,466 17,916,051
TOTAL ASSETS 45,125,069 26,619,538
EQUITY AND LIABILITIES

Share capital and reserves
Share capital 15 1,206,792 1,206,792
Reserves 16 3,746,665 3,321,405
Equity attributable to owners of the holding company 4,953,457 4,528,197
Non-controlling interest 17 469,714 -
5,423,171 4,528,197
Surplus on revaluation of fixed assets - net of tax 18 1,142,880 1,256,529
LIABILITIES

Non-current liabilities
Deferred taxation - net 9 594,790 -
Deferred liability - gratuity 21 135,791 99,090
Total non-current liabilities 3,510,061 598,171
Current liabilities
Current portion of long term finances 19 599,079 285,636
Current maturity of liabilities against assets subject to finance lease 20 148,387 102,597
Taxation 25 483,869 959,952
Total current liabilities 35,048,957 20,236,641
TOTAL LIABILITIES 38,559,018 20,834,812
TOTAL EQUITY AND LIABILITIES 45,125,069 26,619,538
CONTINGENCIES AND COMMITMENTS 26
The annexed notes 1 to 49 form an integral part of these consolidated financial statements.


Annual Report 2016 page 88
CONSOLIDATED PROFIT AND LOSS ACCOUNT

Note 2016 2015

Sales - net 27 128,759,275 94,065,297

Less: sales tax (29,251,081) (17,291,360)
Net sales 99,508,194 76,773,937
Other revenue 28 199,280 82,831

Net revenue 99,707,474 76,856,768
Cost of products sold 29 (94,999,669) (74,017,815)

Gross profit 4,707,805 2,838,953
Operating expenses
Distribution and marketing 30 (1,763,478) (1,053,474)
Administrative 31 (540,986) (366,388)
(2,304,464) (1,419,862)
Other income 32 211,496 210,541
Operating profit 2,614,837 1,629,632
Finance cost 33 (432,618) (349,652)

Other charges 34 (40,594) (83,409)
(473,212) (433,061)
Taxation 35 (938,349) (63,484)

Profit / (loss) attributable to:

Equity holders of the holding company 1,207,851 1,133,087
Non-controlling interests 17 (4,575) -
1,203,276 1,133,087
Earnings per share - basic and diluted (Rupees) 36 10.01 9.39


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Note 2016 2015

Profit for the year

1,203,276 1,133,087

Items that will not be reclassified

liability - net of deferred tax 21.3 (9,795) (7,464)
Items that may be reclassified subsequently


Unrealized (loss)/gain due to change in fair value of
long-term investment classified as ‘available-for-sale’
- net of deferred tax
(59,791) 690,662
(69,586) 683,198
Total comprehensive income 1,133,690 1,816,285
Total comprehensive income / (loss) attributable to:

Equity holders of the holding company 1,138,265 1,816,285
Non-controlling interests 17 (4,575) -
1,133,690 1,816,285


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Capital Revenue
reserves reserve Non - Total
Share Share Fair Unappropri Total controlling shareholers’
Capital premium value -ated profit intrest equity
reserve

Balance as at January 01, 2015 906,000 1,070,828 (5,941) 807,170 2,778,057 - 2,778,057

Profit for the year - - - 1,133,087 1,133,087 - 1,133,087

liability - net of tax - - - (7,464) (7,464) - (7,464)
Unrealized loss due to change in fair value of long-term
investment classified as ‘available-for-sale’ - net of tax - - 690,662 - 690,662 - 690,662
Total comprehensive income - - 690,662 1,125,623 1,816,285 - 1,816,285

on account of incremental depreciation - net of tax - - - 84,704 84,704 - 84,704
- - 690,662 1,210,327 1,900,989 - 1,900,989
Annual bonus @ 11% - December 2014 99,660 - - (99,660) - - -
Interim bonus @ 20% - June 2015 201,132 - - (201,132) - - -
First interim dividend at Rs. 1.5 per share - - - (150,849) (150,849) - (150,849)
Total transaction with owners 300,792 - - (451,641) (150,849) - (150,849)
Balance as at December 31, 2015 1,206,792 1,070,828 684,721 1,565,856 4,528,197 - 4,528,197
Balance as at January 01, 2016 1,206,792 1,070,828 684,721 1,565,856 4,528,197 - 4,528,197

Profit for the year - - - 1,207,851 1,207,851 (4,575) 1,203,276

liability - net of tax - - - (9,795) (9,795) - (9,795)
Unrealized gain due to change in fair value of long-term
investment classified as ‘available-for-sale’ - net of tax - - (59,791) - (59,791) - (59,791)
Total comprehensive income - - (59,791) 1,198,056 1,138,265 (4,575) 1,133,690

on account of incremental depreciation - net of tax - - - 131,749 131,749 - 131,749
- - (59,791) 1,329,805 1,270,014 (4,575) 1,265,439
Final dividend at Rs. 3.50 per share - December 2015 - - - (422,377) (422,377) - (422,377)
Interim dividend at Rs. 3.50 per share - June 2016 - - - (422,377) (422,377) - (422,377)
Consideration for acquisition of subsidary - - - - - 474,289 474,289
Total transaction with owners - - - (844,754) (844,754) 474,289 (370,465)
Balance as at December 31, 2016 1,206,792 1,070,828 624,930 2,050,907 4,953,457 469,714 5,423,171


CONSOLIDATED CASH FLOW STATEMENT

Note 2016 2015

CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations 39 3,454,457 4,792,265
Finance cost paid (395,744) (355,218)
Taxes paid (599,442) (197,891)
Gratuity paid (5,003) (3,359)
Net cash generated from operating activities 2,619,301 4,375,459
CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditure incurred (3,599,189) (1,735,953)
Proceeds from disposal of property, plant and equipment 65,711 2,272
Long-term investment made during the year - (384,440)
Long-term deposits (61,731) (172,142)
Net cash used in investing activities (3,595,209) (2,290,263)
CASH FLOWS FROM FINANCING ACTIVITIES

Lease liability obtained - net 194,591 349,288
Contribution of NCI in subsidary company 474,289 -
Dividend paid (844,754) (150,849)
Long-term finance obtained/(repaid) - net 2,435,489 (106,093)
Net cash generated from financing activities 2,259,615 92,346
Net increase in cash and cash equivalents 1,283,707 2,177,542
Cash and cash equivalents at beginning of the year 2,658,948 481,406
Cash and cash equivalents at end of the year 40

3,942,655 2,658,948


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 STATUS AND NATURE OF BUSINESS

The Group consists of:
Status in the Percentage of
Name of company Group holding

Hascol Petroleum Limited Holding company -
Hascombe Lubricants (Private) Limited Subsidiary company 100%
Hascol Terminals Limited Subsidiary company 62.50%
Hascol Petroleum Limited (the Holding Company) was incorporated in Pakistan as a private limited company on March 28, 2001. On
September 12, 2007 the Holding Company was converted into a public unlisted company and on May 12, 2014 the Holding Company
was listed on the Pakistan Stock Exchange. The registered office of the Holding Company is situated at Suite No. 105-106, The Forum,
Khayaban-e-Jami, Clifton, Karachi.
The Holding Company is engaged in the business of procurement, storage and marketing of petroleum and related products, for
which the Holding Company obtained oil marketing license from Ministry of Petroleum and Natural Resources in the year 2005.
Subsidiaries
Hascombe Lubricants (Private) Limited
Hascombe Lubricants (Private) Limited is a wholly owned subsidiary of the Holding Company which is incorporated in Pakistan. The
subsidiary company has ceased to be a going concern. The financial statements of the subsidiary company have not been prepared on
a going concern assumption.
Hascol Terminals Limited

Hascol Terminals Limited is a subsidiary of the Holding Company which is incorporated in Pakistan. The subsidary provides storage
facilities for imported and locally produced petroleum and related products.
2 BASIS OF PREPARATION

2.1 Statement of compliance

These consolidated financial statements have been prepared in accordance with the 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) and Islamic Financial Accounting Standards (IFAS) issued by the Institute of
Chartered Accountants of Pakistan (ICAP) as are notified under the provisions of the Companies Ordinance, 1984, the requirements
of the Companies Ordinance, 1984 and the directives issued by the Securities and Exchange Commission of Pakistan (SECP). Where
the requirements of the Companies Ordinance, 1984 or directives issued by the SECP differ with the requirements of IFRS, the
requirements of and directives issued under the Companies Ordinance, 1984 shall prevail.
2.2 Basis of consolidation

The consolidated financial statements includes the financial statement of Holding Company and its subsidiaries comprising together
‘the Group’.
Subsidiary company

The Holding Company can directly exercise control over subsidiaries as they are owned more than 50% by the Holding
Company.
The assets and liabilities of subsidiaries have been consolidated on a line by line basis and the carrying value of investments held by
the Holding Company is eliminated against the subsidiaries’ shareholders’ equity in these consolidated financial statements.
Inter-company transactions, balances and unrealised gains on transactions between the group companies are eliminated. Unrealised
losses are also eliminated but considered an impairment indicator of the asset transferred.

The financial statements of the subsidiaries are prepared for the same reporting year as the Holding Company, using consistent
accounting policies.

2.3
Basis of measurement

These consolidated financial statements have been prepared under the historical cost convention, except for certain assets and
liabilities which are stated at revalued amount.
In these consolidated financial statements, except for the consolidated statement of cash flows, all the transactions have been
accounted for on an accrual basis.

2.4
Functional and presentation currency

These consolidated financial statements are presented in Pakistani Rupees which is also the Group functional currency.
2.5 Standards, Amendments and Interpretations to Approved Accounting Standards
2.5.1 Standards, amendments and interpretations to the published standards that are relevant to the group and adopted
in the current year
The Group has adopted the following new standards, amendments to published standards and interpretations of IFRSs which became
effective during the current year.
Amendments Effective Date

IAS 1 - Disclosure Initiative (Amendments to IAS 1 Presentation of Financial Statements) January 1, 2016

IFRS 10, IFRS 12 and IAS 28 - Investment Entities : Applying the Consolidation Exception
(Amendments to IFRS 10, IFRS 12 and IAS 28) January 1, 2016

Annual Improvements to IFRSs 2012 - 2014 Cycle January 1, 2016

(i) IFRS 5 — Adds specific guidance in IFRS 5 for cases in which an entity reclassifies an asset from held for sale to held for
distribution or vice versa and cases in which held-for-distribution accounting is discontinued.
(ii) IFRS 7 — Additional guidance to clarify whether a servicing contract is continuing involvement in a transferred asset, and
clarification on offsetting disclosures in condensed interim financial statements.
(iii) IAS 19 — Clarify that the high quality corporate bonds used in estimating the discount rate for post-employment benefits
should be denominated in the same currency as the benefits to be paid.
(iv) IAS 34 — Clarify the meaning of ‘elsewhere in the interim report’ and require a cross-reference.

IAS 27 - Equity method in Separate Financial Statatements (Amendments to IAS 27) January 1, 2016

IAS 16 and IAS 38 - Clarification of Acceptable Methods of Depreciation and Amortisation
(Amendments to IAS 16 and IAS 38) January 1, 2016

Adoption of the above revisions, amendments and interpretations of the standards have no significant effect on the amounts for the
year ended December 31, 2015 and 2016.
2.5.2 Standards, amendments to published standards and interpretations that are effective but not relevant
The other new standards, amendments to published standards and interpretations that are mandatory for the financial year beginning
on January 01, 2016 are considered not to be relevant or to have any significant effect on the Group’s financial reporting and
operations and are therefore not presented here.
2.5.3 Standards, amendments and interpretations to the published standards that are relevant but not yet effective and
not early adopted by the Group
There are number of other standards, amendments and interpretations to the published standards that are relevant to the Group
and not yet effective and therefore, have not been presented here.

2.5.4 Standards, amendments and interpretations to the published standards that are not yet notified by the Securities
and Exchange Commission of Pakistan (SECP)

Following new standards have been issued by the International Accounting Standards Board (IASB) which are yet to be notified by
the SECP for the purpose of applicability in Pakistan.

Standard IASB effective date
(Annual periods beginning on or after)”

IFRS 9 - Financial Instruments January 1, 2018
IFRS 14 - Regulatory Deferral Accounts January 1, 2016
IFRS 15 - Revenue from Contracts with Customers January 1, 2018
IFRS 16 - Leases January 1, 2019

3 CRITICAL ASSUMPTIONS, ESTIMATES AND MEASUREMENT UNCERTAINITY
The preparation of consolidated financial statements in conformity with approved accounting standards, as applicable in Pakistan,
requires management to make estimates, assumptions and use judgment that affect the application of accounting policies and reported
amounts of assets and liabilities, income and expenses.
The estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the
period in which the estimates are revised, if the revision affects only that period, or in the period of the revision and future periods
if the revision affects both current and future periods.
Accounting policies in respect of judgments made by management in the application of approved accounting standards, as applicable in
Pakistan, that have significant effect on the Group financial statements and estimates and assumptions with significant risk of material
adjustment in the future period are included in the following notes:
Note
a) Useful life of depreciable and amortisable assets 4.1 & 4.2
b) Net realizable value of stock-in-trade 4.8
c) Provisions and contingent liabilities 4.11
d) Taxation 4.14
e) Retirement and other service benefits 4.16

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectation of
future events that are believed to be reasonable under the circumstances.
4 SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies applied in the preparation of these consolidated financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.

4.1
Property, plant and equipment

Initial recognition

(a) Operating fixed assets

An item of property, plant and equipment is initially recognized at cost.
Cost includes expenditure that is directly attributable to the acquisition of the asset. Property, plant and equipment under construction
are disclosed as capital work-in-progress. The cost of self constructed assets includes the cost of materials and fixed labour, any other
cost directly attributable to bringing the asset into service for its intended use including, where applicable, the cost of dismantling and
removing the items and restoring the site on which they are located, and borrowing costs on qualifying assets.

The assets which are available for intended use are capitalized as operating fixed assets. While assets under construction are
capitalized to capital work in progress.

The Group accounts for property, plant and equipment acquired under finance leases by recording the assets and the related liability.
These amounts are determined at the inception of lease, on the basis of the lower of the fair value of the leased properties and the
present value of minimum lease payments. Financial charges are allocated to the accounting period in a manner so as to provide a
constant rate of charge on the outstanding liability.
(b) Capital work-in-progress (CWIP)

CWIP is stated at cost less accumulated impairment losses, if any. All expenditure in connection with specific assets incurred during
construction / installation period are carried to CWIP. These expenditures are transferred to operating fixed assets as and when
these are available for intended use.

Measurement subsequent to initial recognition

(a) Carried using revaluation model

Following operating assets both owned and leased are subsequently measured under revaluation model (i.e. fair value at the date of
revaluation less any subsequent accumulated depreciation and any subsequent accumulated impairment losses).

- Building on lease hold land
- Tanks and pipelines
- Dispensing pumps
- Plant and machinery
- Electrical, mechanical and fire fighting equipment.

Fair value is determined by external professional valuers with sufficient regularity such that the carrying amount does not differ
materially from that which would be determined using fair value at the balance sheet date.

(b) Carried using cost model

Fixed assets other than those mentioned above are stated at cost less accumulated depreciation and accumulated impairment
losses.

Depreciation

Depreciation on operating fixed assets is charged to profit and loss account applying the straight-line method whereby the cost/
revalued amount of operating fixed assets is written off over its remaining useful life. Same basis and estimates for depreciation are
applied to owned assets and assets acquired under finance lease.

Depreciation is charged on straight line method from the month in which an asset is available for intended use, while no depreciation
is charged from the month in which the asset is disposed off. Depreciation is provided at the rates as disclosed in note 5.1.

Depreciation method, useful lives, and residual values are reviewed at each reporting period and adjusted, if applicable. Capital work-
in-progress is not depreciated.

Maintenance and normal repairs are charged to the consolidated profit and loss account as and when incurred. Major renewals and
improvements are capitalized and the assets so replaced, if any, are retired.

Gain and loss on disposal of property, plant and equipment is included in the consolidated profit and loss account in the period of
disposal.

Surplus on revaluation of fixed assets

The surplus arising on revaluation of fixed assets is credited to the “Surplus on revaluation of fixed assets” shown below equity in
the consolidated balance sheet. Accordingly the Group has adopted the following accounting treatment of depreciation on revalued
assets, keeping in view the requirement of Securities and Exchange Commission of Pakistan’s (SECP) SRO 45(1)/2003 dated January
13, 2003:

- depreciation on assets which are revalued is determined with reference to the value assigned to such assets on revaluation
and depreciation charge for the period is taken to the consolidated profit and loss account; and
- an amount equal to incremental depreciation for the period net of deferred taxation is transferred from “Surplus on
revaluation of fixed assets account” to unappropriated profits through consolidated statement of changes in equity to record
realization of surplus to the extent of the incremental depreciation charge for the period.

4.2 Intangible assets

These are recorded initially at cost and subsequently carried at cost less accumulated amortization and accumulated impairment
losses, if any.

Intangible assets having finite useful lives are stated at cost less accumulated amortization and accumulated impairment losses, if any.
Such intangibles are amortized over their estimated useful lives using the straight line method.

Amortization on addition and deletion of intangible assets during the year is charged in proportion to the period of use. The useful
life and amortization method are reviewed and adjusted, if appropriate, at the balance sheet date.

Intangible assets having indefinite useful life are not amortized and stated at cost less impairment losses, if any.

4.3 Financial instruments

Recognition, initial measurement and derecognition

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial
instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at fair value through profit
or loss which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities is described
below.

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial
asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged,
cancelled or expires.

Regular purchases and sales of financial assets are recognised on the trade date - the date on which the Group commits to purchase
or sell the asset.

Classification and subsequent measurement of financial assets

For the purpose of subsequent measurement financial assets, other than those designated and effective as hedging instruments, are
classified into the following categories upon initial recognition:

• loans and receivables;
• at fair value through profit or loss - held for trading;
• held to maturity; and
• available for sale.

All financial assets except for those at fair value through profit and loss are reviewed for impairment at least at each reporting date
to identify whether there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to
determine impairment are applied for each category of financial assets, which are described below. All income and expenses relating
to financial assets that are recognised in profit or loss are presented within finance costs, finance income or other financial items,
except for impairment of trade receivables which is presented within other expenses.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
After initial recognition, these are measured at amortised cost using the effective interest method, less provision for impairment.
Discounting is omitted where the effect of discounting is immaterial. The Group`s cash and bank balances fall into this category of
financial instruments.

Receivables are considered for impairment when they are past due or when other objective evidence is received that a specific
counterparty will default.

At fair value through profit or loss - held for trading

Financial assets at ‘fair value through profit or loss’ - held for trading include financial assets that are either classified as held-for-trading
or that meet certain conditions and are designated at fair value through profit or loss - held for trading upon initial recognition.

Assets in this category are measured at fair value with gains or losses recognised in profit or loss. The fair values of financial assets
in this category are determined by reference to active market transactions or using a valuation technique where no active market
exists. The Group does not currently have any asset in this category.

Held to maturity

Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity other than
loans and receivables. Investments are classified as ‘held to maturity’ if the Group has the intention and ability to hold them until
maturity. The Group does not currently have any asset in this category.

Held to maturity investments are measured subsequently at amortised cost using the effective interest method. If there is objective
evidence that the investment is impaired, determined by reference to external credit ratings, the financial asset is measured at the
present value of estimated future cash flows. Any changes in the carrying amount of the investment, including impairment losses,
are recognised in profit or loss.

Available for sale

Available for sale (AFS) are non-derivative financial assets that are either designated to this category or do not qualify for inclusion in
any of the other categories of financial assets. These are primarily investments that are intended to be held for an undefined period
of time or may be sold in response to the need for liquidity.

The equity investment is measured at cost less any impairment charges, as its fair value cannot currently be estimated reliably.
Impairment charges are recognised in profit or loss. All other AFS financial assets are measured at fair value. Gains and losses are
recognized in other comprehensive income and reported within the Available for sale reserve within equity, except for interest and
dividend income, impairment losses and foreign exchange differences on monetary assets, which are recognised in the consolidated
profit and loss account. When the asset is disposed off or is determined to be impaired, the cumulative gain or loss recognised in
consolidated statement of other comprehensive income is reclassified from the equity reserve to profit or loss. Interest calculated
using the effective interest method and dividends are recognised in profit or loss within finance income.

Reversals of impairment losses for Available for sale equity investments are not recognised in profit loss and any subsequent increase
in fair value is recognised in other comprehensive income. The Group does not currently have any other asset other than as provided
in this category.

Classification and subsequent measurement of financial liabilities

Financial liabilities that are measured subsequently at amortised cost using the effective interest method. All interest-related charges,
if applicable, changes in an instrument’s fair value that are reported in profit or loss account are included within finance costs or
finance income.

4.4
Off setting

Financial assets and liabilities are off set and the net amount is reported in the consolidated balance sheet if the Group has a legally
enforceable right to off-set the transactions and also intends either to settle on a net basis or to realize the asset and settle the liability
simultaneously.
4.5 Investments

The Group classifies its investment as ‘available-for-sale’, that do not fall under the held-for-trading or held-to-maturity. Unrealized
surplus/deficit arising on revaluation of investment classified as ‘available-for-sale’ is disclosed in the consolidated statement of other
comprehensive income.

In case of impairment of available-for-sale securities, the cumulative loss that has been recognised directly in fair value reserve on the
consolidated balance sheet below equity is removed there from and recognized in profit and loss.
4.6 Trade and other payables

Trade and other payables are recognised initially at fair value and subsequently measured at amortized cost, using the effective
interest method. Exchange gains and losses arising on translation in respect of liabilities in foreign currency are added to the carrying
amount of the respective liabilities.

4.7 Trade debts and other receivables

Trade debts and other receivables are recognised initially at invoice value, which approximates fair value, and subsequently measured
at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade debts and
other receivables is established when there is objective evidence that the Group will not be able to collect all the amounts due
according to the original terms of the receivable. Significant financial difficulties of the debtors, probability that the debtor will enter
bankruptcy and default or delinquency in payments are considered indicators that the trade debt is impaired. The amount of provision
is charged to profit or loss. Trade debts and other receivables considered irrecoverable are written-off.

Exchange gains and losses arising on translation in respect of trade debts and other receivables in foreign currency are added to the
carrying amount of the respective receivables.

4.8 Stock-in-trade

Stock-in-trade is valued at the lower of cost and net realizable value.

Stock-in-transit is valued at cost comprising invoice value plus other charges incurred thereon. Provision is made for obsolete and
slow moving stock-in-trade based on management’s best estimate and is recognized in the consolidated profit and loss account.

The cost of stock in trade is determined on moving weighted average basis.

Provision is made for obsolete/slow moving stocks where necessary and recognized in the consolidated profit and loss account. Net
realizable value is the estimated selling value price in the ordinary course of business less estimated costs necessary to be incurred in
order to make a sale.

4.9 Impairment of non financial assets

The carrying amounts of non financial assets, other than deferred tax assets, are assessed at each reporting date to ascertain whether
there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. An impairment
loss is recognized, as an expense in the consolidated profit and loss account, for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less cost to sell and value in use.

Value in use is ascertained through discounting of the estimated future cash flows using a discount rate that reflects current market
assessments of the time value of money and the risk specific to the assets. For the purpose of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).

An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment
loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined if no impairment loss had been recognized.

4.10 Cash and cash equivalents

Cash and cash equivalents are carried in the consolidated balance sheet at cost. For the purposes of the consolidated statement of
cash flows, cash and cash equivalents include cash and bank balances and other items of current assets and current liabilities which
qualify as cash equivalent.

4.11 Provisions and contingent liabilities

Provisions are recognized when the Group has a present, legal or constructive obligation as a result of past events, it is probable that
an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Provisions are
reviewed at each balance sheet date and adjusted to reflect the current best estimate.

A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurence
or non-occurence of one or more uncertain future events not wholly within the control of the Group, or a present obligation that
arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits
will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability. Contingent
liabilities are only disclosed and not recognized as liability in the consolidated balance sheet.

4.12 Leases
.
Finance leases

Leases in terms of which the Group has substantially all the risks and rewards of ownership are classified as
finance leases. Assets obtained under finance lease are accounted for in accordance with policy stated in note 4.1.

The related rental obligations, net of finance costs are classified as current and long term depending upon the timing of the
payment.

Each lease payment is allocated between the liability and finance cost so as to achieve a constant rate on the balance outstanding. The
interest element of the rental is charged to income over the lease term.

Operating leases

Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.
Payments made under operating leases (net of any incentives received from the lessor) are charged to the consolidated profit and
loss account on a straight-line basis over the period of lease.

Ijarah

Leased assets which are obtained under Ijarah agreement are not recognised in the Group’s consolidated balance sheet and are
treated as operating lease based on Islamic Financial Accounting Standard (IFAS) 2 issued by the Institute of Chartered Accountants
of Pakistan and notified by Securities and Exchange Commission of Pakistan vide S.R.O. 43(1) / 2007 dated 22 May 2007. Payments
made under operating lease are charged to the consolidated profit and loss account on a straight line basis over the lease term.

4.13 Foreign currency translations

Monetary assets and liabilities in foreign currencies are translated into Pakistani Rupees at the rates of exchange prevailing at the
balance sheet date. Transactions denominated in foreign currencies are converted into Pakistani Rupees at the rates of exchange
prevailing at the transaction date. Exchange gains or losses are taken to the consolidated profit and loss account.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at
the dates of the initial transactions. Non monetary items measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined.

4.14 Taxation

Taxation for the year comprises current and deferred tax. Taxation is recognized in the consolidated profit and loss account except
to the extent that it relates to items recognized outside profit and loss account (whether in other comprehensive income or directly
in equity), if any, in which case the tax amounts are recognized outside profit or loss.

Current

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the
balance sheet date, and any adjustments to tax payable in respect of prior years.
Deferred

Deferred tax is provided for using the balance sheet method providing the temporary differences between the carrying amount of
assets and liabilities for financial reporting purposes and the amount used for taxation purposes. The amount of deferred tax provided
is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities using tax rates enacted
at the balance sheet date. Deferred tax asset is recognized only to the extent that it is probable that the future taxable profits will be
available and credits can be utilized.

Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse, based on the tax rates
that have been enacted. The Group takes into account the current income tax laws and decisions taken by the taxation authorities.

Deferred tax is charged or credited in the consolidated profit and loss account, except in the case of items credited or charged to
equity or consolidated statement of other comprehensive income, in which case it is included in equity or consolidated statement of
other comprehensive income as the case may be.

4.15 Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be
measured reliably. Revenue is measured at the fair value of consideration received or receivable on the following basis:

Operating revenue

- Sales are recorded when significant risks and rewards of ownership of the goods have passed to the customers which
coincides with dispatch of goods to customers.
- Non-fuel retail income and other revenue (including license fee) is recognized on an accrual basis.

Other income

- Dividend income is recognized when the Group’s right to receive the dividend is established.
- Return on deposits and other services income is recognized on accrual basis.

4.16 Retirement and other service benefits

Unfunded gratuity scheme

Actuarial gains and losses are recognized in the consolidated statement of other comprehensive income in the periods in which they
occur. Amounts recorded in the consolidated profit and loss account are limited to current service and past service costs, gains
or losses on settlements, and net interest income (expense). All other changes in the net defined benefit obligation are recognized
directly in other comprehensive income with no subsequent recycling through the consolidated profit and loss account.

Contributory provident fund

The Holding Company operates an approved contributory provident fund for all its permanent employees. The contribution to the
fund is made by the Holding Company as well as the employee at the rate of 5.72% percent of the basic salary.

4.17 Borrowings and borrowing cost

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized
cost, any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the consolidated profit
and loss account over the period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at
least twelve months after the balance sheet date.

Borrowing costs are capitalized up to the point in time when substantially all the activities necessary to prepare the qualifying assets
for its intended use or sale are complete. All other borrowing costs are charged to the consolidated profit and loss account as and
when incurred.

4.18 Dividend distribution

Final dividend distribution to the Group’s shareholders is recognised as a liability in the consolidated balance sheet in the period in
which the dividend is approved by the Group’s shareholders at the Annual General Meeting, while interim dividend distributions are
recognised in the period in which the dividends are declared by the Board of Directors.

4.19 Operating segments

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 management that makes strategic decisions. The management has determined that the Group has a single
reportable segment as the Board of Directors view the Group’s operations as one reportable segment.
4.20
Earning per share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding
during the year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted
average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.
Note 2016 2015
5 PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets 5.1 5,878,664 4,220,584
Capital work-in-progress 5.5 3,545,600 2,057,344
9,424,264 6,277,928
Annual Report 2016
5.1 Operating fixed assets

Owned assets Leased assets
Building on Electrical, Furniture, Electrical,
lease hold land mechanical office mechanical Total
*Office Pump Tanks and Dispensing Plant and and fire equipment Vehicles Computer Building on Tanks and Dispensing Plant and and fire Vehicles operating
Land building building pipelines pumps machinery fighting and other auxiliaries leasehold pipelines pumps machinery fighting fixed
equipment assets land equipment assets

At January 1, 2016
Cost / revalued amount - 969,929 1,020,617 579,307 303,771 52,311 426,135 73,320 10,448 34,463 277,873 208,596 600,076 168,002 39,592 23,969 4,788,409
Net book value - 899,617 944,474 549,194 276,646 48,867 388,819 22,436 3,670 10,103 222,833 174,830 499,328 143,684 33,128 2,955 4,220,584
Year ended December 31, 2016

Addition/ transfer from CWIP 695,685 80,341 340,335 185,597 22,117 28,920 167,866 69,623 66,877 18,408 7,526 - 35,040 37,320 5,185 350,032 2,110,872
Revaluation - - - - - - - - - - - - - - - - -
Disposals
Cost - - - - - - - - (3,207) (60) - - - - - (56,929) (60,196)
Accumulated depreciation - - - - - - - - 2,533 50 - - - - - 3,963 6,546
- - - - - (674) (10) - - - - - (52,966) (53,650)
Depreciation charge - (59,569) (68,414) (30,349) (23,103) (5,032) (58,141) (11,274) (7,639) (9,425) (19,587) (13,779) (64,409) (11,008) (1,303) (16,110) (399,142
Closing net book value 695,685 920,389 1,216,395 704,442 275,660 72,755 498,544 80,785 62,234 19,076 210,772 161,051 469,959 169,996 37,010 283,911 5,878,664

Cost / revalued amount 695,685 1,050,270 1,360,952 764,904 325,888 81,231 594,001 142,943 74,118 52,811 285,399 208,596 635,116 205,322 44,777 317,072 6,839,085
Net book value 695,685 920,389 1,216,395 704,442 275,660 72,755 498,544 80,785 62,234 19,076 210,772 161,051 469,959 169,996 37,010 283,911 5,878,664

At January 1, 2015
Cost / revalued amount - 338,643 358,558 193,621 98,481 25,095 105,298 65,997 14,474 28,908 209,477 154,281 311,550 115,379 22,065 23,969 2,065,796
Net book value - 303,162 320,514 183,637 83,422 23,526 96,321 23,208 4,789 12,834 169,230 132,217 256,099 99,867 19,067 4,749 1,732,642
Year ended December 31, 2015

Addition/ transfer from CWIP - 491,890 142,853 299,643 51,119 15,436 222,932 7,323 - 5,555 - - - - 10,247 - 1,246,998
Revaluation - 139,396 519,206 86,043 154,171 11,780 97,905 - - - 68,396 54,315 288,526 52,623 7,280 - 1,479,641
Disposals / transfers
Cost - - - - - - - - (4,026) - - - - - - - (4,026)
Accumulated depreciation - - - - - - - - 4,026 - - - - - - - 4,026
Depreciation charge for the year - (34,831) (38,099) (20,129) (12,066) (1,875) (28,339) (8,095) (1,119) (8,286) (14,793) (11,702) (45,297) (8,806) (3,466) (1,794) (238,697)
Closing net book value - 899,617 944,474 549,194 276,646 48,867 388,819 22,436 3,670 10,103 222,833 174,830 499,328 143,684 33,128 2,955 4,220,584
QUALITY PERSONIFIED

Cost - 969,929 1,020,617 579,307 303,771 52,311 426,135 73,320 10,448 34,463 277,873 208,596 600,076 168,002 39,592 23,969 4,788,409
Net book value - 899,617 944,474 549,194 276,646 48,867 388,819 22,436 3,670 10,103 222,833 174,830 499,328 143,684 33,128 2,955 4,220,584
page 101
Running finance facility from Summit Bank Limited is secured on office building for the value of Rs. 500 million (2015: Rs. 500 million).

(Rupees in thousand)


5.2 Had there been no revaluation, the written down value of the following assets in the consolidated balance sheet would have been as
follows:

Cost Accumulated Written down value
depreciation
2016 2015
Owned Assets

Electrical mechanical and

Leased Assets

1,974,205 480,066 1,494,139 1,608,101

Note 2016 2015
5.3 The depreciation charged for the year has been allocated as follows:
Distribution and marketing expenses 30 373,786 226,599

Administrative expenses 31 25,356 12,098
399,142 238,697

5.4 During the year written down value of property, plant and equipment that have been disposed-off amount to Rs. 53.65 million (2015:
Rs. Nil). Details of assets disposed off with WDV above Rs. 50,000 is given below:

Accumulated Net book Sale Particulars of Mode of
Type Cost depreciation value proceeds Gain buyers disposal
Vehicle - 622 498 124 253 129 Awais Shaikh As per company policy
owned 982 752 230 508 278 Khurram Shehzad As per company policy
982 785 197 508 311 Asif Raza As per company policy
622 498 124 253 129 Moosa Rind As per company policy
57,073 3,433 53,640 64,362 10,722

2016 2015
5.5 Capital work in progress

Office building 1,608,287 815,572
Petrol Pump building 250,137 348,220
Plant and machinery 22,319 40,561
Tanks and pipe lines 649,540 261,069
Dispensing pumps 96,357 143,903
Computer auxiliaries 7,045 7,740
Electrical, mechanical and fire fighting equipment 475,424 117,658
Furniture, office equipment and other assets 110,014 187,141
Borrowing cost capitalized 123,214 34,000
Advances to contractors 203,263 101,480
3,545,600 2,057,344

5.5.1 During the year additions amounting to Rs. 2,946.29 million (2015: 1,746.68 million) have been made in capital work-in-progress. This
also includes borrowing cost capitalized during the year at rates ranging from 7.36% - 9.59% (2015: 9.58% - 13.18%).
6 INTANGIBLE ASSET Note 2016 2015

Net book value at beginning of the year 1,522 4,288
Amortization charge for the year 31 (1,522) (2,766)
Net book value at the end of the year 6.1 - 1,522
6.1
Net book value

Cost 8,299 8,299
Accumulated amortization (8,299) (6,777)
Net book value - 1,522
Rate of amortization - % 33.33 33.33
7 LONG-TERM INVESTMENTS

- Pakistan Refinery Limited - available-for-sale 7.1 & 7.2 1,886,977 1,955,310
7.1 Investment in Pakistan Refinery Limited

Cost Unrealised Carrying
gain value
December 31, 2016 1,172,772 714,205 1,886,977

December 31, 2015 1,172,772 782,538 1,955,310

7.2 Investment in Pakistan Refinery Limited (quoted) amounts to Rs. 1,172.77 million (2015: Rs. 1,172.77 million) representing 13.72%
(2015: 13.72%) shares in PRL as at December 31, 2016. The Group has 43.24 million shares (2015: 43.24 million shares) as at
December 31, 2016.

Note 2016 2015
8 LONG-TERM DEPOSITS

Lease deposits 133,462 52,819
Less: current portion of lease deposits 13 (5,740) -
127,722 52,819
Other deposits 8.1 162,640 175,812
290,362 228,631

8.1 Other deposits include amount of Rs. 39.72 million (2015: Rs. 39.72 million) with Motorway Operations & Rehabilitation Engineering
(Private) Limited (MORE) for 10 petrol stations on M-2 Motorway and Rs. 8.28 million (2015: Rs. 8.28 million) with PAF Base Faisal
for 1 petrol station on Shara-e-Faisal, Karachi.

Note 2016 2015
9 DEFERRED TAXATION - NET

This comprises the following:

Taxable temporary difference arising in respect of :
Accelerated depreciation (354,233) (286,347)
Assets under finance lease (129,683) (55,612)
Revaluation of fixed assets (513,467) (590,758)
Exchange gain (1,797) (3,379)
Surplus on remeasurement on investment (89,276) (97,817)

Deductible temporary difference arising in respect of :
Liabilities against assets subject to finance lease 182,677 132,751
Provision for:
- retirement benefit 40,718 31,001
- doubtful debts 2,358 2,463
- franchise income 8,168 -
Turnover tax 259,745 1,107,794
(594,790) 240,096
9.1 Movement in deferred tax

Opening deferred tax 240,096 509,075
Deferred tax income/(expense)
- through profit and loss (208,870) 287,302
- through other comprehensive income 9,805 (94,305)
Adjusted against tax liability (635,821) (461,976)
Closing deferred tax (594,790) 240,096

10 STOCK-IN-TRADE

Raw and packing materials 79,694 63,757
Finished goods
- fuels 10.1 14,972,545 5,836,553
- lubricants 315,292 240,713
15,287,837 6,077,266
Stock of fuel in transit 1,110,137 2,328,995
16,477,668 8,470,018

10.1 Fuels include Rs. 4,799.01 million (2015: 239.88 million) of High Speed Diesel which has been maintained as line fill necessary for the
pipeline to operate.

Note 2016 2015
11 TRADE DEBTS - UNSECURED

Due from related party
- Considered doubtful 11.1 & 11.2 - -
Due from others
- Considered good 7,871,281 4,263,595
- Considered doubtful 849 849
7,872,130 4,264,444
7,872,130 4,264,444
Less: Provision for impairment 11.2 (849) (849)
7,871,281 4,263,595

Note 2016 2015

11.1 The aging of related party balances at the balance sheet date is as follows:

Past due 1-30 days - -
More than 365 days - -
11.2 Movement of provision for impairment

Opening balance (849) (849)
Closing balance (849) (849)

12 ADVANCES - CONSIDERED GOOD

To employees
- against expenses 1,716 70,138
- against salary 13,348 15,006
Leasing companies 2,203 2,606
Suppliers 27,338 62,856
44,605 150,606
13 DEPOSITS, PREPAYMENTS AND

OTHER RECEIVABLES

Current portion of lease deposits 8 5,740 -
Prepaid rent 69,462 45,779
Prepaid insurance and others 14,001 36,147
Receivable from oil marketing companies 13.1 11,328 38,470
Receivable against regulatory duty 25,533 25,533
Inland freight equalization margin receivable 1,024,234 667,776
Franchise income receivable 13.2 73,304 81,946
Price differential claims 13.3 5,083 5,083
Others 13.4 68,943 59,095
1,297,628 959,829

13.1 This represents amount receivable from various oil marketing companies on account of share of motor gasoline imported on their
behalf.

2016 2015

13.2 Franchise income receivable 100,653 81,946

Movement of provision
Opening balance - -
Charge during the year (27,349) -
(27,349) -

13.3 This represents amount receivable from the Government of Pakistan (GoP) net of recovery as per fortnightly rates declared by
the Ministry of Petroleum and Natural Resources (MPNR). The Holding Company, together with other oil marketing companies is
actively pursuing the matter with the concerned authorities for the early settlement of above claim. The Group considers that the
balance amount will be reimbursed by GoP in due course of time.

13.4 This includes Rs. 4.45 million (2015: Rs. 24.64 million) receivable from Sigma Motors (Private) Limited, an associated company.
Note 2016 2015

14 CASH AND BANK BALANCES

Balances with banks:
- in current accounts 1,415,269 382,914
- in deposit accounts 14.1 6,415,286 3,684,616
7,830,555 4,067,530
Cash in hand 1,729 4,473
7,832,284 4,072,003
14.1 These carry mark-up ranging from 3.75% to 6% per annum (2015: 5.50% to 6.50% per annum).
15 SHARE CAPITAL
Authorized share capital

2016 2015 2016 2015
Number of shares

150,000,000 150,000,000 Ordinary shares of Rs. 10 each 1,500,000 1,500,000

Issued, subscribed and paid-up share capital

2016 2015 Note 2016 2015
Number of shares

89,540,000 89,540,000 Ordinary shares of Rs. 10 each fully paid in cash 895,400 895,400
1,060,000 1,060,000 Ordinary shares of Rs. 10 each
for consideration other than cash 15.1 10,600 10,600
9,966,000 9,966,000 Annual bonus @ 11% - December 2014 99,660 99,660
20,113,200 20,113,200 Interim bonus @ 20% - June 2015 201,132 201,132
120,679,200 120,679,200 1,206,792 1,206,792
15.1
These were issued on December 8, 2004 for consultancy, feasibility study, travel and other expenses.

16 RESERVES Note 2016 2015

Capital reserves
Share premium reserve 1,070,828 1,070,828
Fair value reserve 624,930 684,721
1,695,758 1,755,549
Revenue reserve
Unappropriated profit 2,050,907 1,565,856
3,746,665 3,321,405

17 NON-CONTROLLING INTEREST (NCI)

NCI contribution in share capital of subsidary company 45,000 -
(Loss) allocated to NCI 17.2 (4,575) -
Net assets attributable to NCI 17.1 40,425 -
NCI contribution in advance against equity of subsidary company 429,289 -
Non-controlling interest 469,714 -
NCI Percentage 37.50% 0.00%

Note 2016 2015

17.1 Net assets attributable to NCI

Non-current assets 736,797 -
Current assets 21,594 -
Advance against equity (638,054) -
Current liabilities (12,536) -
Net assets 107,801 -
Net assets attributable to (NCI) 40,425 -
17.2 Total comprehensive loss of subsidiary company (12,199) -

Total comprehensive loss allocated to NCI (4,575) -

Cash (used in) / generated from
- operating activities (10,499) -
- investing activities (736,797) -
- financing activities 758,054 -
18 SURPLUS ON REVALUATION OF
FIXED ASSETS - NET OF TAX

Opening balance 1,847,286 492,209
Gain on revaluation - 1,479,641
Transfer in respect of incremental depreciation
charged during the year (190,939) (124,564)
1,656,347 1,847,286
Related deferred tax
Related deferred tax of gain on revaluation - 473,112
Effective rate adjustment (18,101) (14,153)
Reversal of deferred tax liability on account of incremental
depreciation charged during the year (59,190) (39,860)
(513,467) (590,758)
1,142,880 1,256,529

18.1 In 2012, the Holding Company carried out revaluation of petrol pumps through an independent valuer. Revalued amount of assets
was Rs. 1,172 million, resulting in surplus (net of deferred tax) amount to Rs. 387 million. Further, during 2015 the Holding Company
carried out revaluation of depots and petrol pumps through an independent valuer. Revalued amount of assets was Rs. 4,154 million,
resulting in surplus (net of deferred tax) amounting to Rs. 1,006 million.

Note 2016 2015

19 LONG TERM FINANCES - SECURED

PAIR Investment Company Limited 19.1 - 96,429
First Women Bank Limited 19.2 225,000 -
Burj Bank Limited 19.3 - 187,922
Pak Oman Investment Company Limited 19.4 220,007 177,436
Sukuk certificates 19.5 1,961,821 -
National Bank of Pakistan 19.6 500,000 -
2,906,828 461,787
Current portion of long term finances
PAIR Investment Company Limited - 42,857
First Women Bank Limited 100,000 -
Burj Bank Limited - 187,922
Pak Oman Investment Company Limited 136,579 54,857
Sukuk certificates 300,000 -
National Bank of Pakistan 62,500 -
(599,079) (285,636)
2,307,749 176,151

19.1 This represents term finance facility from PAIR Investment Company Limited to finance the development of Machike storage facility.
The sanctioned limit is Rs. 150 million and is secured against first pari passu charge on all present and future current and fixed assets
of the Holding Company with 25% margin, personal guarantee of Mr. Mumtaz Hasan Khan (CEO) as sponsor and post dated cheque
covering the purchase price of facility. Mark-up rate is 3 months KIBOR plus a spread of 3%. The loan has been repaid during the
current year.
19.2 This represents term finance facility from First Women Bank Limited for construction of retail outlets. The sanctioned limit was Rs.
300 million and was secured against pledge of TDR of Rs. 60 million, Pledge of PRL shares at 40% margin and personal guarantee of
Mr. Mumtaz Hasan Khan (CEO) as sponsor. Mark-up rate is 6 months KIBOR plus a spread of 1.3%. The loan is repayable in 36 equal
monthly instalments in arrears, from first draw down with last repayment due in March 07, 2019.
19.3 This represents working facility of Diminishing Musharika arrangement from Burj Bank Limited to refinance capital expenditure
incurred by the Holding Company. The sanction limit is 300 million and is secured against movable fixed assets of the Holding
Company with 25% margin and pledge of shares of Pakistan Refinery Limited (PRL) with 40% margin to be maintained at all times.
The loan has been repaid during the current year.
19.4 This represents term finance facility from Pak Oman Investment Company Limited to refinance the new storage facility at Daulatpur.
The sanction limit is Rs. 300 million and is secured against first pari passu charge on Company’s land, building and machinery located
at Daulatpur along with 25% margin and personal guarantee of Mr. Mumtaz Hasan Khan (CEO) as sponsor. It carries mark-up rate
of 6 months KIBOR plus a spread rate from 2.5% to 3%. The loan is repayable in 42 equal monthly instalments in arrears, from first
draw down with last repayment due in July 19, 2020.

Note 2016 2015

19.5 Sukuk certificates 19.5.1 2,000,000 -

Issuance cost
Opening - -
Addition (47,731) -
Charged to profit and loss 9,552 -
(38,179) -
1,961,821 -

19.5.1 This represent privately placed long term islamic certificate (Sukuk) amounting to Rs. 2,000 million, issued by the Holding Company
during the year to meet the working capital requirement and expansion plans of the Holding Company. Summit Bank Limited is the
trustee while Meezan Bank Limited is acting as shariah structuring advisor for this Sukuk. The Holding Company is in the process
of listing of Sukuk over the counter (OTC) on Pakistan Stock Exchange. This facility carries profit at 3 month KIBOR plus 1.5% per
annum, payable quarterly. This arrangement is secured against first pari-passu charge over specific depots and retail outlets of the
Holding Company inclusive of a 25% margin. The certificates will be redeemed in 20 equal quarterly installments, in arrears, starting
from April 2017.
19.6 This represents term loan facility obtained from National Bank of Pakistan to finance capital expenditure for construction of a storage
facility at Mehmood Kot. The sanction limit is Rs. 500 million and is secured against exclusive charge of Rs. 666.67 million over
the entire land and building, installation and machinery of the facility and personal guarantee of Mr. Mumtaz Hasan Khan (CEO) as
sponsor and post dated cheque covering facaility amount and corporate guarantee of Fossil Energy (Private) Limited and Marshall Gas
(Private) Limited. It carries mark-up rate of 3 months KIBOR plus a spread rate of 2.5%. The loan is repayable in 16 equal quarterly
instalments in arrears, with grace period of 12 months, from first draw down with last repayment due in Feburary 24, 2021.

20 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE
The Group has entered into lease agreements with various leasing companies for lease of items of plant and machinery and other
assets. Minimum lease payments, which are payable by the year 2020, have been discounted by using financing rates ranging from
7.90% to 9.85% (2015 : 8.43% to 14.03% per annum). Title to the assets acquired under the leasing arrangements are transferable to
the Group upon payment of entire lease obligations.

The minimum lease payments for which the Group has committed to pay in future under the lease agreements are as follows:

2016 2015
Minimum Financial Present Minimum Financial Present
lease charges value of lease charges value of
payments allocated minimum payments allocated to minimum
to future lease future lease
periods payments periods payments

Not later than one year 185,485 37,098 148,387 137,086 34,489 102,597
Later than one year but
not later than five years 524,896 53,165 471,731 365,040 42,110 322,930
710,381 90,263 620,118 502,126 76,599 425,527

21 DEFERRED LIABILITY - GRATUITY
The Holding Company operates an unfunded gratuity scheme for employees who have completed the employment period of 5 years.
Provision is created for the benefit of the scheme on the basis of actuarial valuations. The actuarial valuations are carried out by an
independent valuer using the projected unit credit method.
Note 2016 2015

Deferred liability - gratuity 21.1 & 21.2 135,791 99,090

The information provided in notes 21.1 to 21.5 has been obtained from the actuarial valuations.

Note 2016 2015

Present value of defined benefit obligation as
at the end of the year 21.3 135,791 99,090
Fair value of plan assets - -
Balance sheet liability 135,791 99,090


Balance at the beginning of the year 99,090 71,057
Add: charge for the year 21.4 27,508 20,416
Less: payments to outgoing employees (5,003) (3,359)
Remeasurements charged to other comprehensive income 14,196 10,976
Balance at the end of the year 135,791 99,090

21.3 Movement in present value of the defined benefit obligation

Interest cost 9,545 7,962
Benefits paid during the year (5,003) (3,359)
121,595 88,114
Remeasurement: actuarial losses - net of tax 9,795 7,464
Impact of deferred tax 4,401 3,512
14,196 10,976
Present value of defined benefit obligation at the end of the year 135,791 99,090

2016 2015

21.4 Amounts recognized in the profit or loss

Net interest cost 9,545 7,962
Expense for the year 27,508 20,416

21.5 Actuarial assumptions
The following significant assumptions were used in the valuation carried out at the balance sheet date using the projected unit credit
method:
2016 2015
% per annum

- Expected long-term rate of increase in salary level 7.50% 9.00%

- Discount rate 7.50% 9.00%

Note 2016 2015
22 TRADE AND OTHER PAYABLES

Trade creditors 22,260,329 12,070,681
Payable to cartage contractors 2,445,673 1,938,342
Advance from customers 4,253,932 2,553,327
Dealers’ and customers’ security deposits 22.1 170,000 64,132
Accrued liabilities 16,144 46,018
Other liabilities 690,730 748,590
29,836,808 17,421,090
22.1 The security deposits are non-interest bearing and are refundable on termination of contracts.

Note 2016 2015

23 MARK-UP ACCRUED

Mark-up accrued 91,185 54,311

24 SHORT-TERM BORROWINGS - SECURED

Running finances utilised against mark-up arrangements 24.1 1,329,629 538,055
Loans 24.2 2,560,000 875,000
3,889,629 1,413,055

24.1 The facilities for short term running finances are available from various commercial banks aggregating to Rs. 1,600 million (2015:
Rs. 900 million). The rates of mark-up ranges from 3 month KIBOR plus 1.5% to 3 month KIBOR plus 3% (2015: 3 month KIBOR
plus 2.5% to 3 month KIBOR plus 3%). These arrangements are secured against hypothecation charge over the Group’s present and
future current assets with minimum 25% margin, pledge of PRL shares, with minimum 40% margin, personal guarantee of Mr. Mumtaz
Hasan Khan (CEO) as sponsor, along with equitable registered mortgage charge over the property situated at The Forum, Suite No.
105-106, 1st Floor, Khayaban-e-Jami, Clifton, Karachi.

24.2 The loans have been obtained from various financial institutions aggregating to Rs. 2,600 million (2015: Rs. 875 million). The rates of
mark-up ranges from 6 month KIBOR plus 2.25% to 6 month KIBOR plus 2.5% (2015: 1 year KIBOR plus 2.25% to 1 year KIBOR
plus 2.5%). These are secured against hypothecation charge over the Group’s present and future current assets.

2016 2015

25 TAXATION

Sales tax payable 169,112 92,988
Income tax payable 314,757 866,964
483,869 959,952
26 CONTINGENCIES AND COMMITMENTS

Contingencies
As per the deliberations of the main committee of the Oil Companies Advisory Committee (OCAC) held in their meeting number
MCM-168 dated September 20, 2007, the financial costs on outstanding Price Differential Claims (PDCs) should be worked and
billed to the Government of Pakistan (GoP) through OCAC by the Oil Marketing Companies (OMCs) on a regular basis. Although
the Holding Company had billed Rs. 65.97 million to the GOP/ OCAC, the management had not accounted for its impact in these
financial statements as the inflow of economic benefits, though probable, is not virtually certain.

Commitments

The facility for opening letters of credit (LCs) acceptances as at December 31, 2016 amounted to Rs. 30,550 million (2015: Rs. 17,100
million) of which the amount remaining unutilized as at that date was Rs. 3,631 million (2015: Rs. 1,797 million).

Commitments in respect of capital expenditure contracted for but not yet incurred are as follows:

2016 2015

Property, plant and equipment 758,237 427,701

Commitments for rental under operating lease agreements/ijarah contracts as at December 31, 2016 amounted to Rs. 1,984 million
(2015: Rs.1,945 million) as follows:
2016 2015

Not later than one year 173,461 136,245
Later than one year but not later than five years 642,427 538,869
Later than five years 1,167,834 1,269,461
1,983,722 1,944,575
27 SALES - NET

Gross sales, inclusive of sales tax 129,296,958 94,274,786
Less: sales discount (537,683) (209,489)
128,759,275 94,065,297
28 OTHER REVENUE

Joining fee for petrol pump operators 55,349 9,600
Franchise fee 96,971 73,231
Owned tank lorries 46,960 -
199,280 82,831

Note 2016 2015

29 COST OF PRODUCTS SOLD

Opening stock of lubricants, raw and packing materials 304,470 256,461
Raw and packing materials purchased 780,242 784,019
Less: closing stock of lubricants, raw and packing materials 10 (394,986) (304,470)
Lubricants, raw and packing materials consumed 689,726 736,010

Opening stock - fuel 8,165,548 3,217,243
Fuel purchased 81,431,713 63,370,263
Storage and handling charges 538,393 328,558
Duties and levies 29.1 20,256,971 14,403,074
Less: closing stock - fuel 10 (16,082,682) (8,165,548)
Net realisable value - adjustment - 128,215
94,309,943 73,281,805
94,999,669 74,017,815
29.1 Duties and levies

Inland freight equalization margin 3,624,258 2,399,895
Petroleum development levy 14,566,162 9,185,877
Freight 2,066,551 2,817,302
20,256,971 14,403,074
30 DISTRIBUTION AND MARKETING EXPENSES

Salaries, wages and other benefits 31.1 443,932 258,579
Insurance 113,947 75,026
Depreciation 5.3 373,786 226,599
Utilities 66,305 27,718
Fees and subscription 11,072 4,847
Commission 194,043 111,767
Royalty 17,653 43,603
Provision against franchise income 27,349 -
Miscellaneous 1,266 710
1,763,478 1,053,474
31 ADMINISTRATIVE EXPENSES

Salaries, allowances and other benefits 31.1 230,484 149,545
Preliminary expenditure 7,579 -
Insurance 21,711 20,093
Depreciation 5.3 25,356 12,098
Amortization 6 1,522 2,766
Utilities 10,368 8,335
Fee and subscription 23,044 21,020
Auditors’ remuneration 31.2 3,226 2,695
Donation 31.3 17,520 6,345
Ujrah payments 10,108 6,642
540,986 366,388

Note 2016 2015

31.1 Salaries and other benefits relating to distribution and
administrative expense include:

- Gratuity 21.4 27,508 20,416

- Contribution to provident fund 15,492 10,713

31.2 Auditors’ remuneration

Remuneration to the auditors of the Holding Company
Statutory audit 1,265 1,100
Half yearly review 420 366
Certifications 500 673
Consolidation 230 200
2,746 2,545
Remuneration to the auditors of the Subsidaries Company
Statutory audit 425 125
Certifications - -
480 150
3,226 2,695

31.3 Donation includes an amount of Rs. 0.5 million (2015: Rs. 0.2 million) paid to Layton Rahmatulla Benevolent Trust (LRBT), Mr.
Najmus Saquib Hameed, a director of the Holding Company, is also Chairman of LRBT.

2016 2015

32 OTHER INCOME

Income from financial assets
Dividend income 13,407 -
178,440 139,662
Income from non-financial assets
Promotional marketing fee 2,641 1,006
Scrap sales 1,055 569
Gain on disposal of operating fixed assets 12,061 2,272
Rent income 6,764 6,431
Sundries 10,535 9,799
Storage and handling income - 50,802
33,056 70,879
211,496 210,541
33 FINANCE COST

Mark-up on borrowings 220,712 166,041
Letter of credit charges 163,812 148,243
Lease finance charges 35,193 23,720
Bank charges 12,901 11,648
432,618 349,652

2016 2015

34 OTHER CHARGES

Workers’ welfare fund 46,423 24,420
Exchange (gain)/loss - net (5,829) 58,989
40,594 83,409

35 TAXATION

Current 700,869 330,862
Prior 28,610 19,924
Deferred 208,870 (287,302)
938,349 63,484
35.1 Relationship between tax expense

and accounting profit

Accounting profit before taxation 2,141,625 1,196,721
Tax at the applicable tax rate of 31% (2015: 32%) 663,904 382,951
Tax effect on income under final tax regime (3,297) 12,317
Reversal of deferred tax asset - net 208,870 (287,302)
Prior year tax 28,610 19,924
Other adjustments 40,262 (64,406)
Tax expense for the year 938,349 63,484
36 EARNINGS PER SHARE - BASIC AND DILLUTED


Weighted average number of ordinary shares in thousand 120,679 120,679

Basic earning per share - Rupees 10.01 9.39

There is no dilutive effect on basic earning per share as the Group has no potential ordinary shares outstanding at year end.
37 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES

2016 2015
Chief Directors Executives Chief Directors Executives
Executive Executive
Director’s fee - 6,775 - - 2,975 -

Managerial remuneration 21,844 36,450 328,761 19,080 30,751 151,722
Cost of living allowance 4,241 4,050 56,555 3,603 3,913 33,950
Reimbursement of
medical expenses 3,737 1,100 17,365 2,322 778 12,450
Bonus 6,521 13,500 25,449 3,780 8,100 16,544
Retirement benefits 1,249 2,085 12,158 1,087 1,616 8,010
37,592 63,960 440,288 29,872 48,133 222,676

Number of persons 1 6 202 1 6 126

37.1 The Chief Executive Officer and certain executives are also provided with free use of Group maintained cars and cellular connections.
In addition, the Chief Executive Officer and a director are provided with free security services in accordance with the terms of
employment.
38 RELATED PARTY TRANSACTIONS AND BALANCES

Amount due to/ from and other significant transactions with related parties, other than those disclosed elsewhere in these financial
statements, are as follows:

Nature of relationship Nature of transaction 2016 2015

Sigma Motors (Private) Limited Sale of fuels - 1,693
Office rent 6,764 6,432

Staff retirement benefits/ contribution funds
Provident fund Contribution 15,492 10,713
Gratuity scheme Expense charged 27,508 20,416

Key management personnel Salaries and benefits 69,920 63,150

Director Fee Fee for attending meetings 6,775 2,975

Other related parties Consultancy services 18,550 10,180

Balances

Sigma Motors (Private) Limited Other receivable 4,458 24,643

Expenses recovered from/ charged by related parties are based on actual expense.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities
of the Group directly or indirectly. The Group considers its Chief Executive and Executive Director to be key management personnel.
Note 2016 2015

39 CASH GENERATED FROM OPERATIONS


Adjustment for:
Depreciation and amortization 30 & 31 400,664 241,463
Provision for gratuity 21.4 27,508 20,416
Profit on bank deposits 32 (165,033) (139,662)
Exchange gain (15,572) -
Gain on disposal of operating fixed assets 32 (12,061) (2,272)
Finance cost 33 432,618 349,652
Changes in working capital 39.1 644,708 3,126,097
3,454,457 4,792,265
39.1 Changes in working capital

(Increase) / decrease in current assets
Stock-in-trade (8,007,650) (4,996,314)
Trade debts (3,607,686) 285,228
Advances 106,001 15,960
Deposits, prepayments and other receivables (337,799) 65,125
(11,847,134) (4,630,001)
Increase in current liabilities
Trade and other payables 12,491,842 7,756,098

Changes in working capital 644,708 3,126,097

Note 2016 2015

40 CASH AND CASH EQUIVALENTS

Short-term borrowings 24 (3,889,629) (1,413,055)
3,942,655 2,658,948
41 OPERATING SEGMENTS

- These financial statements have been prepared on the basis of a single reportable segment.
- Sales from petroleum products represents 99.7 % (2015: 99.7%) of total revenues of the Group.
- Out of total sales of the Group, 100 % (2015: 100 %) related to customers in Pakistan.
- All non-current assets of the Group as at December 31, 2016 are located in Pakistan.
- The Group sells its product to dealers, governments agencies and autonomous bodies, independent power project and other
corporate customers. However, none of the customers exceeds 10% threshold.
Note 2016 2015

42 FINANCIAL INSTRUMENTS BY CATEGORY
Financial assets

Available for sale

At amortised cost
Trade debts 11 7,871,281 4,263,595
Advances 12 15,551 17,612
Other receivables 13 1,208,425 877,903
Cash and bank balance 14 7,832,284 4,072,003
17,217,903 9,459,744
19,104,880 11,415,054

At amortised cost
33,090,636 17,222,443

42.1 Fair values of financial instruments

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arm’s
length transaction. The fair value of financial instruments approximates their carrying value.

a) Fair values versus carrying amounts

The fair values of financial assets and liabilities, together with the carrying amounts shown in the consolidated balance sheet, are as
follows:

2016 2015
Financial Asset

Long term investments 1,886,977 1,886,977 1,955,310 1,955,310
Long term deposits 290,362 290,362 228,631 228,631
Trade debts 7,871,281 7,871,281 4,263,595 4,263,595
Advances 15,551 15,551 17,612 17,612
Other receivables 1,208,425 1,208,425 877,903 877,903
Cash and bank balances 7,832,284 7,832,284 4,072,003 4,072,003
19,104,880 19,104,880 11,415,054 11,415,054

2016 2015
Finacial Liability

Long-term finances - secured 2,906,828 2,906,828 461,787 461,787
Liabilities against assets subject to
finance lease 620,118 620,118 425,527 425,527
Mark-up accrued 91,185 91,185 54,311 54,311
Trade and other payables 25,582,876 25,582,876 14,867,763 14,867,763
Short-term running finances - secured 3,889,629 3,889,629 1,413,055 1,413,055
33,090,636 33,090,636 17,222,443 17,222,443

b) Valuation of financial instruments

The Group measures fair value using the following fair value hierarchy that reflects the significance of the inputs used in making the
measurements:

Level 1: Quoted market price (unadjusted) in an active market.
Level 2: Valuation techniques based on observable inputs.
Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation
technique includes inputs not based on observable data.

Fair values of financial assets that are traded in active markets are based on quoted market prices. For all other financial instruments
the Group determines fair values using valuation techniques unless the instruments do not have a market/ quoted price in an active
market and whose fair value cannot be reliably measured.

Valuation techniques used by the Group include discounted cash flow model. Assumptions and inputs used in valuation techniques
includes risk-free rates, bond and equity prices, foreign currency exchange rates, equity and equity index prices. The objective of
valuation techniques is to arrive at a fair value determination that reflects the price of the financial instrument at the balance sheet
date that would have been determined by market participants acting at arm’s length.

Valuation models for valuing securities for which there is no active market requires significant unobservable inputs and a higher
degree of management judgement and estimation in the determination of fair value. Management judgement and estimation are
usually required for selection of the appropriate valuation model to be used, determination of expected future cash flows on the
financial instrument being valued and selection of appropriate discount rates, etc.

The table below analyses equity instruments measured at fair value at the end of the reporting period by the level in the fair value
hierarchy into which the fair value measurement is categorised:





43 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS
The Group is exposed to the following risks from its use of financial instruments:
- Market risk (43.1.1)
- Credit risk and concentration of credit risk (43.1.2)
- Liquidity risk (43.1.3)
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes
for measuring any increase in risk, and the Group’s management of capital.
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes
for measuring any increase in risk, and the Group’s management of capital.
43.1 Financial risk management

The Board of Directors (the Board) has overall responsibility for the establishment and oversight of the Group’s risk management
framework. The Board is responsible for developing and monitoring the Group’s risk management policies.

The Group’s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk
limits and controls, and to monitor risk and adherence to limits. Risk management policies and systems are reviewed regularly to
reflect changes in the market conditions and the Group’s activities. The Group through its training and management standards and
procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and
obligations.

The Board oversee how management monitors compliance with the Group’s risk management policies and procedures, and review
the adequacy of risk management framework in relation to the risks faced by the Group.

43.1.1 Market risk

The Group is exposed to market risk through its use of financial instruments and specifically to currency risk, interest rate risk and
certain other price risks, which result from both its operating and investing activities. The objective of market risk management is
to manage and control market risk exposures within an acceptable range. The market risk includes:
(a) Currency risk

Currency risk is the risk that the value of financial asset or a liability will fluctuate due to a change in foreign exchange rates. It arises
mainly where receivables and payables exist due to transactions entered into foreign currencies. The Group imports petroleum
product and is thus exposed to currency risk in respect to foreign creditors, which at the year end amount to USD 94.62 million
(2015: USD 50.38 million) having PKR equivalent amount of Rs. 9,916.65 million (2015: Rs. 5,287.17 million). The average rates
applied during the year is Rs. 104.92 per USD (2015: Rs. 102.69 per USD) and the spot rate as at December 31, 2016 is Rs. 104.80
per USD (2015: Rs. 104.95 per USD).

The Group manages its currency risk by close monitoring of currency markets. Under regulatory requirements, the Group cannot
hedge its currency risk exposure. Consequently, the Group recorded exchange gain amounting to Rs. 5.83 million (2015: exchange
loss amounting to Rs. 58.9 million) during the year.


As at December 31, 2016, if the Pakistani Rupee had weakened/strengthened by 10% against USD with all other variables held
constant, profit for the year would have been lower/higher by Rs. 992.01 million (2015: Rs. 529.8 million).

(b) Interest rate risk

Interest rate risk is the risk that the fair value of the future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. Interest rate exposure arises due to long-term finances, liabilities against assets subject to finance lease and
short term running finances. At the balance sheet date the interest rate profile of the Group’s mark-up bearing financial instruments
is summarized as follows:

Cash flow sensitivity for variable rate instruments

A change of 100 basis points (bps) in interest rates at the reporting date would have increased/ (decreased) profit or loss before tax
as shown below. This analysis assumes that all other variables, in particular foreign currency rates remain constant.

Profit and loss Equity
Cash flow sensitivity of 100 bps 100 bps 100 bps 100 bps
variable rate instruments increase decrease increase decrease

Expense) / income

As at December 31, 2016 (37,912) 37,912 (26,159) 26,159

As at December 31, 2015 (22,376) 22,376 (15,216) 15,216


Financial assets
Trade debts - - - 7,871,281 - 7,871,281 7,871,281
Advances - - - 15,551 - 15,551 15,551
Other receivables - - - 1,208,425 - 1,208,425 1,208,425
Cash and bank balances 3.75-6.0 p.a. 6,415,286 - 6,415,286 1,416,998 - 1,416,998 7,832,284
(a) 6,415,286 - 6,415,286 10,512,255 2,177,339 12,689,594 19,104,880
to finance lease 8.55-10.4p.a. 148,387 471,731 620,118 - - - 620,118
Long term finances - secured 7.95-10.15 p.a. 599,079 2,307,749 2,906,828 - - - 2,906,828
Mark-up accrued - - - 91,185 - 91,185 91,185

(b) 4,637,095 2,779,480 7,416,575 25,674,061 - 25,674,061 33,090,636

On balance sheet gap (a)-(b) 1,778,191 (2,779,480) (1,001,289) (15,161,806) 2,177,339 (12,984,467) (13,985,756)

Financial assets
Long-term investments - - - - 1,955,310 1,955,310
1,955,310
Trade debts - - - 4,263,595 - 4,263,595 4,263,595
Advances - - - 15,006 - 15,006 15,006
Other receivables - - - 852,370 - 852,370 852,370
Cash and bank balances 5.5-6.5 p.a. 3,684,616 - 3,684,616 386,931 - 386,931 4,071,547
(a) 3,684,616 - 3,684,616 5,517,902 2,183,941 7,701,843 11,386,459

to finance lease (gross) 8.43-13.26 p.a. 102,597 322,930 425,527 - - - 425,527
Long term finances - secured 9.41-13.19 p.a. 285,636 176,151 461,787 - - - 461,787
Mark-up accrued - - - 54,311 - 54,311 54,311
(b) 1,801,288 499,081 2,300,369 14,922,074 - 14,922,074 17,222,443

On balance sheet gap (a)-(b) 1,883,328 (499,081) 1,384,247 (9,404,172) 2,183,941 (7,220,231) (5,835,984)

(c) Price Risk
Price risk represents the risk that the fair value of a financial instrument will fluctuate because of changes in the market prices (other
than those arising from interest/mark-up rate risk or currency risk), whether those changes are caused by factors specific to the
individual financial instruments or its issuers, or factors affecting all or similar financial instruments traded in the market. The Group
is exposed to equity price risk since it has investments in quoted equity securities amounting to Rs. 1,887 million (2015: Rs. 1,955
million) at the balance sheet date.

The Group manages price risk by monitoring exposure in quoted equity securities and implementing strict discipline in internal risk
management and investment policies.

The value of investment subject to equity price risk are, in almost all instance, based on quoted market price as of the reporting date
except for unquoted investments which are carried at cost. Market prices are subject to fluctuation and consequently the amount
realized as a result of subsequent sale of an investment may differ from the reported market value. Fluctuation in the market price of a
security may result from perceived changes in the underlying economic characteristics of the investee, the relative price of alternative
investment and general market condition. Furthermore, the amount realized in the sale of a particular security may be affected by the
relative quantity of the security being sold.
The table below summarizes the Group’s equity price risk as of December 31, 2016 and 2015 and shows the effects of a hypothetical
30% increase and a 30% decrease in market prices as at the year end. The selected hypothetical change does not reflect what could
be considered to be the best or worst case scenarios. Accordingly, the sensitivity analysis prepared is not necessarily indication of
the effect on Group’s net assets of future movement in the level of PSX 100 index.

Hypothetical Estimated fair Hypothetical Hypothetical
Fair price change value increase / increase /
value at 30% hypothetical (decrease) in (decrease) in
after change shareholders profit / (loss)
in price equity

Decrease (2,453,070) (566,093) -

Decrease (2,541,903) (586,593) -
(d) Other price risk
Other price risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in
market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific
to the individual financial instrument or its issuer. The Group is not exposed to such price risk as there is no such type of financial
instruments available to the Group.
43.1.2 Credit risk and concentration of credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a
financial loss. Out of the total financial assets of Rs. 17,217 million (2015: Rs. 9,459 million), the financial assets which are subject to
credit risk amounting to Rs. 9,385 million (2015: Rs. 5,387 million).

The credit quality of receivables can be assessed with reference to the historical performance with no or some defaults in recent
history. The Group manages credit risk of receivables through the monitoring of credit exposures, limiting transactions with specific
customers and continuous assessment of credit worthiness of its customers.

The carrying values of financial assets which are neither past due nor impaired are as under:

2016 2015

Long-term deposits 290,362 228,631
Trade debts 7,871,281 4,263,595
Advances 15,551 17,612
Other receivables 1,208,425 877,903
Cash and bank balance 7,832,284 4,072,003
17,217,903 9,459,744

The credit risk for cash and cash equivalents is considered to be negligible, since the counterparties are reputable banks and institutes
with high quality external credit ratings. The credit quality of bank balances that are neither past due nor impaired can be assessed
with reference to external credit ratings as follows:

Banks Rating Short Long Banks Rating Short Long
Agency term term Agency term term
Allied Bank Limited PACRA A1+ AA+ Samba Bank Limited JCR- VIS A1 AA
Askari Bank Limited PACRA A1+ AA+ Silkbank Limited. JCR- VIS A-2 A-
Bank Al Falah Limited PACRA A1+ AA Sindh Bank Limited JCR- VIS A1+ AA
Bank Al Habib Limited PACRA A1+ AA+ Soneri Bank Limited PACRA A1+ AA-
Bank Islami Pakistan Limited PACRA A1 A+ Summit Bank Limited JCR- VIS A1 A-
Habib Metropolitan Bank Limited PACRA A1+ AA+ United Bank Limited JCR- VIS A1+ AAA
Habib Bank Limited JCR- VIS A1+ AAA First Women Bank Limited PACRA A2 A-
MCB Bank Limited PACRA A1+ AAA Burj Bank Limited PACRA A1 A
Meezan Bank Limited JCR- VIS A1+ AA Industrial and Commercial
National Bank of Pakistan PACRA A1+ AAA Bank of China Limited S&P - A
NIB Bank Limited PACRA A1+ AA- PAIR Investments Limited PACRA A1+ AA

43.1.3 Liquidity risk

Liquidity risk reflects the Group’s inability of raising funds to meet commitments. Management closely monitors the Group’s liquidity
and cash flow position. This includes maintenance of balance sheet liquidity ratios, debtors and creditors concentration both in terms
of overall funding mix and avoidance of undue reliance on large individual customers.

As at December 31, 2016 the Group’s financial liabilities have contractual maturities as summarised below:

Within one Over one
year year Total

Long-term finances - secured 599,079 2,307,749 2,906,828
30,311,156 2,779,480 33,090,636

As at December 31, 2015 the Group’s liabilities had contractual maturities as summarised below:

Within one Over one
year year Total

Long-term finances - secured 285,636 176,151 461,787

16,723,362 499,081 17,222,443
44 CAPITAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Board’s policy is to maintain a strong capital base so as to maintain investors’, creditors’ and market’s confidence and to sustain
future development of the business, safeguard the Group’s ability to continue as going concern in order to provide returns for
shareholders and benefit for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The Board
monitor the return on capital, which the Group defines as net profit/(loss) after tax divided by total shareholders’ equity. The Board
also monitor the level of dividend to ordinary shareholders subject to the availability of funds.

The Group finances its operations through equity, borrowings and management of working capital with a view to maintain an
appropriate mix between various sources of finance to minimize risk.

2016 2015

Total borrowings 7,416,575 2,300,369
Cash and bank balance (7,832,284) (4,072,003)
Net funds (415,709) (1,771,634)
Total Equity 4,953,457 4,528,197
Total Capital 4,537,748 2,756,563
Gearing ratio 0.00% 0.00%
45
EMPLOYEES PROVIDENT FUND

The Group operates approved provident fund for its employees. Details of assets and investments of the fund is as follows:

Note 2016 2015

Size of fund - total assets 72,797 54,856

Cost of investments made 69,931 52,662

Percentage of investments made 100% 100%

Fair value of investments 44.1 72,797 54,856
45.1
The break-up of fair value of investments is as follows:

2016 2015
Investments Percentage of Investments Percentage of
investment investment
% %
Regular income certificates 15,675 21.53 16,219 29.57

Saving bank accounts 57,122 78.47 38,637 70.43
72,797 54,856

The management, based on the un-audited financial statements of the fund, is of the view that the investments out of the provident
fund have been made in accordance with the provision of section 227 of the Companies Ordinance, 1984 and the rules formulated
for the purpose.

46 NUMBER OF EMPLOYEES

Total number of employees at year-end 519 394

Average number of employees during the year 457 359
47 EVENTS AFTER THE BALANCE SHEET DATE

The Board of Directors in its meeting held on March 31, 2017 has proposed a cash dividend of Rs. 3.50 per share for the
year ended December 31, 2016 for approval of the members at the Annual General Meeting to be held on April 28, 2017.

These consolidated financial statements do not include the effect of the proposed cash dividend which will be accounted for in the
consolidated financial statements for the year ending December 31, 2017.

48 GENERAL

All amounts have been rounded to the nearest thousand.

The corresponding figures have been reclassified/re-arranged where considered necessary for the purpose of better presentation.
However, no material reclassification/re-arrangement have been made in these consolidated financial statements.

49 DATE OF AUTHORISATION FOR ISSUE

These consolidated financial statements have been authorized for issue on March 31, 2017 by the Board of Directors of the Group.

Form of Proxy
15thAnnual General Meeting
The Company Secretary
Hascol Petroleum Limited
The Forum, Suite No. 105-106, 1st Floor
Khayaban-e-Jami, Clifton
Karachi
I / We ______________________________________________________________________________ of
__________________________________________________________________________________ being
member(s) of Hascol Petroleum Limited and holder of ______________________________ ordinary shares as per
Share Register Folio No. __________________ and/or CDC Participant I.D. No. and Sub Account
No._____________________________________________, hereby appoint
_____________________________________________________________________________________ of
________________________________ or failing him / her __________________________________ of
______________________________ as my / our proxy in my / our absence to attend and vote for me / us and on my
/ our behalf at the 15th Annual General Meeting of the Company to be held on Friday, 28th April 2017, and at any
adjournment thereof.
As witness my / our hands / seal this ____________________ day of April 2017.
Rs. 5/-
Witness No.1
Revenue
Stamp
Name ________________________
Address ________________________
________________________
CNIC ________________________ __________________________
Signature
(Signature should agree with the
specimen signature required with
the Company)
Witness No.2
Name ________________________
Address ________________________
________________________
CNIC ________________________
Important
1. This proxy form, duly completed and signed, must be received at the registered office of the Company at The Forum, Suite No. 105-106, 1st
Floor Khayaban-e-Jami, Clifton, Karachi, not less than 48 hours before the time of holding the Meeting.
2. Members are requested:
(a) To affix Revenue Stamp of Rs. 5/- at the place indicated above; and
(b) To sign across the Revenue Stamp in the same style of signature as is registered with the Company.
For CDC account holder(s) / corporate entities

In addition to the above the following requirements have to be met:
i) the proxy form shall be witnessed by two persons whose names, addresses and CNIC numbers shall be stated on the form;
ii) attested copies of CNIC or the passport of the beneficial owners and the proxy shall be furnished with the proxy form;
iii) the proxy shall produce his / her original CNIC or original passport at the time of the meeting; and
iv) corporate entities should produce a certified copy of the resolution pertinent of its board of directors’ meeting or a power of attorney bearing
signature of the nominee at the time of the Meeting, unless it has been provided earlier.
7
Design by: crayons
Hascol Petroleum Limited

The Forum, Suite No. 105-106, 1st Floor,
Khayaban-e-Jami, Clifton, Block-9 Karachi
Phone: +92-21-35301343-50 Fax: +92-21-35301351
UAN: 111-757-757 Email: info@hascol.com
www.hascol.com

Hascol Annual Report 2016

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Hascol Annual Report 2016

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Contents

Chairman & C.E.O

Human Resource Committee

Hascol Petroleum Limited has initiated a Zero Harm approach in

Hascol supports health Ongoing risk Benchmark our HSEQ

Our actions have Our initiative has A progressive attitude which

Respect local and Employees have a In conclusion, our belief is

07 international law so that

Corporate Objectives and

The objective of Hascol Petroleum Limited is to create a retail network

they are facing that is affecting their performance. If any

Business Compliance, & Entertainment & Gifts

The credit for this outstanding

As a result of our performance the share

Additionally, we completed storage facility

As I mentioned in my nine months report, the company has set up a new

Hascol/Vitol have also started joint venture company for marketing of

Moreover, with Vitol as our shareholder, our imports of petroleum

I am confident that the future of the company is

Mumtaz Hasan Khan

The Directors of 1. FINANCIAL RESULTS

3. COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE

S. No. Director’s Name Meetings Attended

1 Mr. Mumtaz Hasan Khan (Chairman) 5

5. BOARD COMMITTEE MEETINGS HELD DURING THE YEAR

S. No. Director’s Name Meetings Attended

1 Mr. Sohail Hasan (Chairman) 4

S. No. Director’s Name Meetings Attended

1 Mr. Farooq Rahmatullah Khan (Chairman) 1

S. No. Director’s Name Meetings Attended

1 Mr. Najmus Saquib Hameed (Chairman) 2

7. PERFORMANCE EVALUATION OF THE BOARD

8. DIRECTORS TRAINING PROGRAMME

9. VALUE OF INVESTMENT OF PROVIDENT AND GRATUITY FUNDS

Provident Fund 15,492

10. CORPORATE SOCIAL RESPONSIBILITY

11. CONTRIBUTION TO THE NATIONAL EXCHEQUER AND ECONOMY

12. EXTERNAL AUDITORS

13. PATTERN OF SHAREHOLDING

15. FUTURE OUTLOOK

Thanking you all.

Mumtaz Hasan Khan

No. of Shareholder Shareholdings' Slab Total Shares Held

1616 1 to 100 67,658

Categories of Shareholders Shareholders Shares Held Percentage

Directors and their spouse(s) and minor children

Associated Companies, undertakings and related parties

Executives 4 76,908 0.06

Public Sector Companies and Corporations 3 352,200 0.29

Banks, development finance institutions, non-banking finance companies,

Totals 7310 120,679,200 100.00

Share holders holding 5% or more Shares Held Percentage

MUMTAZ HASAN KHAN 34,724,723 28.77

Key Operational and Financial Data

2016 2015 2014 2013 2012 2011

Profit and Loss Account Rs/mn

Revenue (Gross) 128,759 94,065 99,061 57,469 29,775 19,584

Share Capital 1,207 1,207 906 656 656 656

Summary of cash flow statements

Cost / Income ratio 0.79 0.74 0.65 1.35 1.53 1.72

Liquidity Ratios Ratio

Current ratio 0.96:1 0.88:1 0.91:1 0.88:1 0.85:1 0.67:1

Investment / Market Ratios Rs

Notice of Fifteenth (15th)

I/We, of being a member of Hascol Petroleum