Selected Notes To and Forming Part of the Condensed Interim Consolidated Financial Information (Unaudited)For The First Quarter Ended September 30, 2017

1. LEGAL STATUS AND OPERATIONS

Attock Refinery Limited (the Company) was incorporated in Pakistan on November 8, 1978 as a private limited company and was converted into a public limited company on June 26, 1979. The registered office of the Company is situated at Morgah, Rawalpindi. Its shares are quoted on Pakistan Stock Exchange Limited. It is principally engaged in the refining of crude oil.

ARL is a subsidiary of The Attock Oil Company Limited, UK and its ultimate parent is Bay View International Group S.A.

Attock Hospital (Private) Limited (AHL) was incorporated in Pakistan on August 24, 1998 as a private limited company and commenced its operations from September 1, 1998. AHL is engaged in providing medical services. AHL is a wholly owned subsidiary of Attock Refinery Limited.

For the purpose of these condensed interim consolidated financial information, ARL and its above referred wholly owned subsidiary AHL is referred to as the Company.

2. BASIS OF PREPARATION

2.1 This condensed interim consolidated financial information of the Company for the three months period ended September 30, 2017 have been prepared in accordance with approved accounting standards as applicable in Pakistan. As per the requirements of circular No. CLD/CCD/PR(11)/2017 dated October 04, 2017 issued by the Securities and Exchange Commission of Pakistan (SECP) companies whose financial year closes on or before December 31, 2017 shall prepare their financial statements in accordance with provisions of the repealed Companies Ordinance, 1984. Accordingly, approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984. In case requirements differ, the provisions of or directives under the Companies Ordinance, 1984 shall prevail.

2.2 The condensed interim consolidated financial information include the accounts of Attock Refinery Limited and its wholly owned subsidiary Attock Hospital (Private) Limited.

3. ACCOUNTING POLICIES, CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The accounting policies, significant judgments made in the application of accounting policies, key sources of estimations, the methods of computation adopted in the preparation of this condensed interim consolidated financial information are the same as those applied in the preparation of the consolidated financial statements for the year ended June 30, 2017.

4. FINANCIAL RISK MANAGEMENT

The Company's financial risk management objective and policies are consistent with those disclosed in the consolidated financial statements for the year ended June 30, 2017.

5. SHARE CAPITAL

The parent company Attock Oil Company Limited held 52,039,224 (June 30, 2017: 52,039,224) ordinary shares and the associated company Attock Petroleum Limited held 1,432,000 (June 30, 2017: 1,432,000) ordinary shares as at September 30, 2017.

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6. RESERVES

Capital reservesSpecial reserve for expansion/ modernisation - note 6.1 2,767,409 2,045,813 Special reserve for expansion/ modernisation by an associated company 188,879 -

2,956,288 2,045,813

Utilised special reserve - note 6.2 10,962,934 10,962,934 Utilised special reserve by an associated company 1,946,032 1,946,032

12,908,966 12,908,966

Others 119,708 119,708

Revenue reservesGeneral reserve 6,852,380 6,102,380 Unappropriated profit 14,190,639 14,628,728

21,043,019 20,731,108 Maintenance reserve - note 6.3 196,679 196,679

37,224,660 36,002,274

6.1 Special reserve for expansion/ modernisation

Represents amounts retained as per stipulations of the Government under the pricing formula and is available only for making investment in expansion or upgradation or offsetting any loss of the refinery.Transfer to/ from special reserve is recognised at each quarter end and is reviewed for adjustment based on profit/ loss on an annual basis.

Under the Policy Framework for Up-gradation and Expansion of Refineries, 2013 issued by the Ministry of Petroleum & Natural Resources (MP&NR) as amended from time to time, the refineries are required to

transfer the amount of profit above 50% of paid-up capital as at July 1, 2002 to a Special Reserve Account.

Following is the status of special reserve for expansion/ modernization utilisation on up-gradation and expansion projects from July 1, 1997 to September 30, 2017:

Balance as at July 1 2,045,813 9,455,212 Transfer for the period/ year 721,596 3,553,535 Transfer to utlised special reserve for expansion/

modernisation - note 6.2 - (10,962,934)

Balance as at period/ year 2,767,409 2,045,813

The amount of capital expenditure incurred over and above the available balance in the Special Reserve has been incurred from Company's own resources and shall be adjusted against future built-up of the Special Reserve.

6.2 Represents amounts utilised out of the Special Reserve for expansion/ modernization of the refinery. The total amount of capital expenditure incurred on Refinery expansion/ mordernisation till September 30, 2017 is

Rs 28,196 million including Rs 17,233 million spent over and above the available balance in the Special Reserve which have been incurred by the Company from its own resources.

September 30,2017

June 30,2017

Rs’ 000 Rs’ 000

September 30,2017

June 30,2017

Rs’ 000 Rs’ 000

6.3 Represents amount retained by Attock Gen Limited to pay for major maintenance expenses in terms of the Power Purchase Agreement.

7. LONG TERM FINANCING - secured

From banking companies

Syndicated Term Finance - note 7.1 14,958,300 15,380,448 Musharka Finance - note 7.2 4,895,810 5,034,006

19,854,110 20,414,454 Less: Unamortized transaction cost on financing:

Balance at the beginning of the year 204,062 243,300 Addition during the period/ year 500 6,076 Amortization for the period/ year (11,002) (45,314)

Balance at the end of the period/ year (193,560) (204,062)

19,660,550 20,210,392

Current portion of long term financing (2,200,000) (2,200,000)

17,460,550 18,010,392 Mark-up payable shown as current liability (332,979) (338,226)

17,127,571 17,672,166

7.1 The Company has entered into a syndicated finance agreement with a consortium of banks which includes Bank AL-Habib Limited as the Agent Bank for a term finance facility of Rs 16,575 million for ARL Up-gradation Projects. The facility carries a mark-up of 3 months KIBOR plus 1.70% which will be payable on quarterly basis. The tenure of this facility is 13 years including the grace period of 3 years.

7.2 The Company has obtained musharaka finance facility of Rs 5,425 million from Bank AL-Habib Limited (the Bank) as the Investment Agent for ARL Up-gradation Projects. The total Musharaka investment amounts to Rs 8,029 million and Investment Agent’s (the Bank) share in Musharaka Assets A is 42.33% (June 30, 2017: 47.64%) while its share in Musharaka Assets B is 69.90% (June 30, 2017: 69.90%) respectively. While the Managing Co-owner’s (the Company) share in Musharaka Assets A is 57.67% (June 30, 2017: 52.36%) while its share in Musharaka Assets B is 30.10% (June 30, 2017: 30.10%) respectively. The tenure of this facility is 13 years including the grace period of 3 years. The rental payments under this facility are calculated on the basis of 3 months KIBOR plus 1.70% on value of unit purchased on each Musharaka Assets purchase date under Musharaka agreement.

7.3 The facilities referred to in notes 7.1 and 7.2 are secured by first pari passu charge by way of hypothecation over all present and future current assets to the extent of Rs 15,000 million. Further, the facility is also secured by first pari passu charge by way of hypothecation over all present and future movable fixed assets of the Company and mortgage over identified immovable property. Until the payment of all the outstanding amounts due by the Company have been paid in full, the Company cannot, except with the prior written consent of the Agent Bank/Investment Agent, permit the collective shareholding of Attock Oil Company Limited in the Company to fall below 51%.

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September 30,2017

June 30,2017

Rs’ 000 Rs’ 000

8. TRADE AND OTHER PAYABLES

Creditors - note 8.1 15,924,961 16,160,601 Due to the Attock Oil Company Limited - Holding Company 19,102 24,001 Due to an associated company

Pakistan Oilfields Limited 1,498,593 1,218,186 Accrued liabilities and provisions - note 8.1 4,004,557 3,890,947 Due to the Government under the pricing formula 2,501,889 2,247,775 Custom duty payable to Government 4,065,002 3,318,978 Advance payments from customers 73,934 101,336 Sales tax payable 1,819,914 - Workers' profit participation fund 63,465 83,663 General Staff Provident Fund 2,226 -Staff Provident Fund 3,634 -ARL Gratuity Fund 69,930 67,879 Staff Pension Fund 24,509 23,194 Crude oil freight adjustable through inland freight equalisation margin 10,535 20,010 Payable to statutory authorities in respect of petroleum

development levy and excise duty 1,187,451 1,053,049 Deposits from customers adjustable against freight

and Government levies payable on their behalf 376 376 Security deposits 2,637 2,637 Unclaimed dividends 8,898 8,898

31,281,613 28,221,530

8.1 These balances include amounts retained from payments to crude suppliers for purchase of local crude as per the directives of the Ministry of Petroleum and Natural Resources (the Ministry). Further, as per directives of the Ministry such withheld amounts are to be retained in designated 90 days interest bearing accounts. The amounts withheld along with accumulated profits amounted to Rs 2,986.59 million (June 30, 2017: Rs 2,944.91 million).

9. CONTINGENCIES AND COMMITMENTS

Contingencies:

i) Consequent to amendment through the Finance Act, 2014, SRO 1,326,706 1,326,706 575(I)/2006 was withdrawn. As a result all imports relating to the ARL Up-gradation Project were subjected to higher rate of customs duties, sales tax and income tax. Aggrieved by the withdrawal of the said SRO, the Company filed a writ petition in the Lahore High Court, Rawalpindi Bench (the Court). The Court granted interim relief by allowing release of the imports against submission of bank guarantees and restrained customs authorities from charging increased amount of customs duty/sales tax. Bank guarantees were issued in favour of Collector of Customs, as per the directives of the

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September 30,2017

June 30,2017

Rs’ 000 Rs’ 000

September 30,2017

June 30,2017

Rs’ 000 Rs’ 000

34

Court. These guarantees include amounts aggregating to

Rs 731 million on account of adjustable/ claimable government levies.

Based on advice from legal advisor the Company is confident that there are reasonable grounds for a favourable decision and accordingly this liability has not been recognized in the financial statements. Several hearings of the case have been held but the matter is still under adjudication.

ii) Due to circular debt in the oil industry, certain amounts due from the oil marketing companies (OMCs) and due to crude oil suppliers have not been paid/ received on their due dates of payment. As a result the Company has raised claims on OMCs in respect of mark-up on delayed payments as well as received counter claims from some crude oil suppliers which have not been recognized in the financial statements as these have not been acknowledged as debt by either parties.

iii) Guarantees issued by banks on behalf of the Company (other than 493 493 (i) above)

iv) Claims for land compensation contested by ARL 1,300 1,300

v) Price adjustment related to crude oil purchases as referred to in note 19.1, the amount of which cannot be presently quantified.

vi) Claim by the Company from Government on account of additional 595,094 464,638 deemed duty on High Speed Diesel (HSD). In the Policy Framework of 2013 for upgradation of Refineries, the Government had committed to enhance deemed duty on HSD from 7.5% to 9% subject to setting up of Diesel Hydrodesulphurisation (DHDS) unit. However, this incentive has been withdrawn on April 25, 2016.

The Company has strongly taken up with the Government the matter of withdrawal of additional deemed duty as this incentive was primarily given to recover the cost of investment on DHDS unit which the Company has successfully installed and commissioned.

vii) The Company's share in tax contingency of associated companies. 1,214,648 1,523,411

Commitments:

i) Capital expenditure 308,243 77,194

ii) Letters of credit for purchase of store items 213,040 143,871

iii) The Company's share of commitments of associated companies.

Capital expenditure commitments 1,256,867 1,339,985 Outstanding letters of credit 3,306,630 3,782,297 Others 502,973 503,985

September 30,2017

June 30,2017

Rs’ 000 Rs’ 000

10. OPERATING ASSETS

Opening written down value 35,140,631 12,156,008 Additions during the period/ year 11,761 23,812,853 Revaluation surplus - 1,240,628 Written down value of disposals (46) (489)Depreciation during the period/ year (640,861) (2,068,369)

Closing written down value 34,511,485 35,140,631

11. CAPITAL WORK-IN-PROGRESS

Balance at the beginning 142,057 22,733,687 Addition during the period/ year 15,380 1,170,751 Transfer to operating assets

-Buildings on freehold land - 6,981 -Plant and machinery - 23,746,756 -Furniture and fixtures - 8,644

- (23,762,381)

Balance at the end 157,437 142,057

Breakup of the closing balance of capital work-in-progress

Civil works 14,222 15,830 Plant and machinery 142,215 125,227 Pipeline project 1,000 1,000

157,437 142,057

12. LONG TERM INVESTMENTS

Investment in associated companiesBalance as at July 1 23,939,539 20,787,112 Share of profit after tax of associated companies 915,768 3,903,552 Share in other comprehensive income 74 17,593 Dividend received from associated companies - (2,023,553)Impairment (loss)/ reversal on investment (425,079) 1,254,835

24,430,302 23,939,539

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September 30,2017

June 30,2017

Three months ended Year ended

Rs’ 000 Rs’ 000

September 30,2017

June 30,2017

Three months ended Year ended

Rs’ 000 Rs’ 000

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12.1 The Company's interest in associates are as follows:

Quoted

National Refinery Limited 25 14,637,479 25 14,637,479

Attock Petroleum Limited 21.88 7,164,874 21.88 6,897,179

Unquoted

Attock Gen Limited - note 12.2 30 2,606,524 30 2,384,395

Attock Information Technology Services (Private) Limited 10 21,425 10 20,486

24,430,302 23,939,539

12.2 Subsequent to the balance sheet date the Board of directors of the Company approved to offer 3.95% out of its 30% shareholding of Attock Gen Limited’s (AGL) paid up capital (i.e. 13.167% of 30%) to the general public including to employees/ officers of the Company a minimum 5% of Company’s portion of public offering (i.e. 3.95%) for the listing of the shares of AGL on the Pakistan Stock Exchange Limited.

13. STOCK-IN-TRADE

As at September 30, 2017, stock-in-trade includes stocks carried at net realisable value of Rs 2,764.77 million (June 30, 2017: Rs 3,118.46 million). Adjustments amounting to Rs 283.23 million (June 30, 2017: Rs 553.63 million) have been made to closing inventory to write down stocks-in-trade to net realizable value.

14. TRADE DEBTS

All trade debts are unsecured and considered good.

Trade debts include amount receivable from an associated company Attock Petroleum Limited Rs 8,051 million (June 30, 2017: Rs 7,290 million).

15. LOANS, ADVANCES, DEPOSITS, PREPAYMENTSAND OTHER RECEIVABLES

Due from associated companiesAttock Petroleum Limited 1,215,466 1,420,271 Attock Information Technology Services (Private) Limited 502 481 Attock Leisure and Management Associates (Private) Limited 10 12 Attock Gen Limited 1,024 445 Attock Cement Pakistan Limited 1 4 National Cleaner Production Centre Foundation 4,942 3,547 Capgas (Private) Limited 133 27 National Refinery Limited 93 3,726 Attock Sahara Foundation 1,204 994

Income accrued on bank deposits 34,393 30,236 Sales tax receivable - 145,620 Loans, deposits, prepayments and other receivables 203,582 253,538

1,461,350 1,858,901

June 30, 2017September 30, 2017

Rs’ 000% ageHolding

% ageHolding

Rs’ 000

September 30,2017

June 30,2017

Rs’ 000 Rs’ 000

37

16. CASH AND BANK BALANCES

16.1 Balances with banks include Rs 2,924.96 million (June 30, 2017: Rs 2,883.11 million) in respect of deposits placed on 90-days interest-bearing account consequent to directives of the Ministry of Petroleum and Natural Resources on account of amounts withheld along with related interest earned thereon net of withholding tax, as referred to in note 8.1.

16.2 Balances with banks include Rs 6,000 million (June 30, 2017: Rs 6,000 million) in respect of deposits placed on 90-days interest-bearing account.

16.3 A lien on the Company's savings account has been marked by banks to the extent of guarantees issued on behalf of the Company amounting to Rs 1,327.20 million.

17. GROSS SALES

Local sales (excluding Naphtha export sales) 38,278,223 24,723,775 Naphtha export sales 1,313,600 3,146,623

39,591,823 27,870,398 Reimbursement due from the Government under import

parity pricing formula - note 17.1 6,696 -

39,598,519 27,870,398

17.1 This represents amount due from the Government of Pakistan on account of shortfall in ex-refinery prices of certain petroleum products under the import parity pricing formula.

18. TAXES, DUTIES, LEVIES AND PRICE DIFFERENTIAL

Sales tax 7,273,793 4,460,457 Petroleum development levy 3,909,646 2,171,552 Custom duties and other levies - note 18.1 746,051 387,889 HSD price differential payable to Government - note 18.2 - 4,849 PMG RON differential payable to Government - note 18.3 268,856 -

12,198,346 7,024,747

18.1 This includes Rs 746.02 million (September 30, 2017: Rs 387.81 million) recovered from customers and payable to the Government of Pakistan (GoP) on account of custom duty on PMG and HSD. GoP is yet to devise a mechanism through which the refineries are expected to operate on no gain/ loss basis on this account.

18.2 This represents amount payable to GoP on account of differential between import parity price of HSD and import price of Pakistan State Oil Company Limited (PSO) relating to the period July 1 to July 3, 2016. After commencement of production of Euro II compliant diesel by the Company with effect from July 4, 2016, this price differential has ceased to arise.

Three months ended

September 30,2017

September 30,2016

Rs’ 000Rs’ 000

Three months ended

September 30,2017

September 30,2016

Rs’ 000Rs’ 000

38

18.3 This represents amount payable to GoP on account of differential between price of PSO’s imported 92 RON PMG and 87/90 RON PMG sold by the Company during the period.

19. COST OF SALES

Crude oil consumed - note 19.1 23,489,774 18,624,071 Transportation and handling charges 186,539 491,024 Salaries, wages and other benefits 279,690 242,088 Chemicals consumed 631,699 64,123 Fuel and power 638,364 464,889 Repairs and maintenance 74,594 67,274 Staff transport and travelling 4,672 3,843 Insurance 46,649 25,915 Cost of receptacles 10,160 4,768 Other operating costs 17,808 16,724 Depreciation 633,974 263,970

Cost of goods manufactured 26,013,923 20,268,689 Changes in stock 104,241 421,970

26,118,164 20,690,659

19.1 Certain crude purchases have been recorded based on provisional prices notified by the Government and may require adjustment in subsequent periods.

20. OTHER CHARGES

This includes Rs 57.79 million and Rs 21.54 million (three months ended September 30, 2016: Rs 5.90 million and Rs 2.24 million) payable to Workers' Profit Participation Fund and Workers' Welfare Fund respectively related to refinery income.

21. OTHER INCOME

Income on bank deposits 309,217 136,567 Interest on delayed payments 114,878 54,412 Handling and service charges 30,380 24,109 Rental income 25,003 19,453 Exchange gain - (net) - 7,532 Others 4,137 3,641

483,615 245,714

Three months ended

September 30,2017

September 30,2016

Rs’ 000Rs’ 000

Three months ended

September 30,2017

September 30,2016

Rs’ 000Rs’ 000

22. FINANCE COST

Exchange loss - (net) 39,782 - Interest on long term financing 399,960 126,628 Interest on Worker Profit participation Fund 5,673 - Bank and other charges 27 15

445,442 126,643 23. PROVISION FOR TAXATION

Current - 120,001 Deferred 318,463 (37,886)

318,463 82,115 24. NON-REFINERY INCOME

Share of profit of associated companies(net of impairment loss/ reversal of impairment loss) 490,689 918,210

Related chargesWorkers' Profit Participation fund - 72,604 Workers' Welfare fund - 27,589 Taxation 28,623 151,577

(28,623) (251,770)

462,066 666,440 Profit/ (loss) after taxation from Attock Hospital (Private) Limited

(wholly owned subsidiary) 2,200 3,475

464,266 669,915 25. OPERATING SEGMENT

The financial information has been prepared on the basis of a single reportable segment. Revenue from external customers for products of the Company are as follows:

High Speed Diesel 15,026,172 9,971,480 Premier Motor Gasoline 2,609,849 5,881,228 Jet Petroleum 13,467,737 2,120,094 Furnace Fuel Oil 4,859,789 5,284,207 Naphtha 1,503,109 3,294,796 Others 2,131,863 1,318,593

39,598,519 27,870,398 Duties, taxes, levies and price differential (12,198,346) (7,024,747)

27,400,173 20,845,651

Revenue from four major customers of the Company constitute 84% of total revenue during the three months period ended September 30, 2017 (September 30, 2016: 86%).

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Three months ended

September 30,2017

September 30,2016

Rs’ 000Rs’ 000

Three months ended

September 30,2017

September 30,2016

Rs’ 000Rs’ 000

40

26. RELATED PARTY TRANSACTIONS

Aggregate transactions with holding company and associated companies during the period were as follows:

Sale of goods and services to:

Associated companies 9,315,345 5,869,109

Holding company 7,818 8,318

Interest income on delayed payments from an associated company 114,878 54,412

Purchase of goods and services from:

Associated companies 2,820,711 1,769,973

Holding company 29,479 27,559

Dividend paid to:

Associated companies - 7,160

Holding company - 260,196

Key management personnel - 1,312

Dividend received from:

Associated companies - 1,452,073

Other related parties:

Remuneration of Chief Executive and key managementpersonnel including benefits and perquisites 216,629 168,643

Directors Fees 1,880 1,864

Contribution to Workers' Profit Participation Fund 57,792 78,501

Contribution to employees' pension, gratuity and provident funds 19,433 15,957

Three months ended

September 30,2017

September 30,2016

Rs’ 000Rs’ 000

41

27. NON-ADJUSTING EVENT AFTER THE BALANCE SHEET DATE

The Finance Act, 2017 has introduced tax on every public company at the rate of 7.5% of its accounting profit before tax for the year. However, this tax shall not apply in case of a public company which distributes at least 40% of its after tax profits within six months of the end of the tax year through cash or bonus shares. In accordance with the guidance issued by the Institute of Chartered Accountants of Pakistan, liability if any, in respect of income tax due to non-distribution of dividend is recognised when the prescribed time period for distribution of dividend expires.

Aggrieved by this amendment, the Company has filed a petition in Sindh High Court (Court), Karachi. The Court has granted stay to the Company. No provision has been made in this respect as at September 30, 2017.

28. DATE OF AUTHORISATION

This condensed interim consolidated financial information was authorised for circulation to the shareholders by the Board of Directors of the Company on October 19, 2017.

Abdus SattarDirector

M. Adil KhattakChief Executive

Syed Asad AbbasChief Financial Officer

-Sd- -Sd- -Sd-