MIRA INFORM REPORT

Report Date :

06.07.2013

IDENTIFICATION DETAILS

Name :	NATIONAL REFINERY LIMITED
Registered Office :	7-B, Korangi Industrial Area, Karachi
Country :	Pakistan
Year of Establishments:	1963
Com. Reg. No.:	0001747
Legal Form :	Listed Public Limited Company
Line of Business :	manufacturing, Production and sale of large range of petroleum products
No. of Employees :	More than 600

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	No Complaints
Litigation :	Clear

NOTES:

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ECGC Country Risk Classification List – March 31^st 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
Pakistan	B2	B2

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Pakistan ECONOMIC OVERVIEW

Decades of internal political disputes and low levels of foreign investment have led to slow growth and underdevelopment in Pakistan. Agriculture accounts for more than one-fifth of output and two-fifths of employment. Textiles account for most of Pakistan's export earnings, and Pakistan's failure to expand a viable export base for other manufactures has left the country vulnerable to shifts in world demand. Official unemployment is under 6%, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Over the past few years, low growth and high inflation, led by a spurt in food prices, have increased the amount of poverty - the UN Human Development Report estimated poverty in 2011 at almost 50% of the population. Inflation has worsened the situation, climbing from 7.7% in 2007 to almost 12% for 2011, before declining to 10% in 2012. As a result of political and economic instability, the Pakistani rupee has depreciated more than 40% since 2007. The government agreed to an International Monetary Fund Standby Arrangement in November 2008 in response to a balance of payments crisis. Although the economy has stabilized since the crisis, it has failed to recover. Foreign investment has not returned, due to investor concerns related to governance, energy, security, and a slow-down in the global economy. Remittances from overseas workers, averaging about $1 billion a month since March 2011, remain a bright spot for Pakistan. However, after a small current account surplus in fiscal year 2011 (July 2010/June 2011), Pakistan's current account turned to deficit in fiscal year 2012, spurred by higher prices for imported oil and lower prices for exported cotton. Pakistan remains stuck in a low-income, low-growth trap, with growth averaging about 3% per year from 2008 to 2012. Pakistan must address long standing issues related to government revenues and energy production in order to spur the amount of economic growth that will be necessary to employ its growing and rapidly urbanizing population, more than half of which is under 22. Other long term challenges include expanding investment in education and healthcare, adapting to the effects of climate change and natural disasters, and reducing dependence on foreign donors.

Source : CIA

Business Name

NATIONAL REFINERY LIMITED

Full Address

Registered Address

7-B, Korangi Industrial Area, Karachi, Pakistan

Tel #	92 (21) 111-675-675
Fax #	92 (21) 35054663, 35066705
Email	www.nrlpak.com

Short Description Of Business

a.	Nature of Business	Engaged in the manufacturing, Production and sale of large range of petroleum products
b.	Year Established	1963
c.	Registration No.	0001747

Branches

In Lahore, Islamabad & Faisalabad

Auditors

A.F. Ferguson & Co.

(Chartered Accountants)

Legal Status

Subject Company was incorporated as a Listed Public Limited Company in 1963

Details of Directors

Names	Designation
Dr. Ghaith R. Pharaon Mr. Shuaib A. Malik Mr. Laith G. Pharaon Mr. Wael G. Pharaon Dr. Mohamed Habib Djarraya Mr. Bahauddin Khan Mr. Abdus Sattar	Chairman Chief Executive Director Director Director Director Director

Shareholders

Categories	Shareholding (%)
Associated Companies Individuals Investment Companies Joint Stock Companies NIT & ICP Mutual Funds Bank, Insurance, Modaraba Provident / Pension Funds Foreign Investors (including IDB) Charitable Trust Others	50.00 7.67 0.06 1.62 9.77 1.88 8.70 0.61 18.05 0.33 1.31

Associates

A. Subsidiary

None

B. Associated Companies

(1) Attock Petroleum Limited, Pakistan.

(2) Attock Refinery Limited, Pakistan.

(3) Pakistan Oilfields Limited, Pakistan.

(4) Attock Cement Limited, Pakistan.

(5) Attock Oil, U.K.

(6) Attock Information Technologies Services (Pvt.) Limited, Pakistan.

Business Activities

Manufacturing, Production & Sale of large range of Petroleum Products. The refinery complex of the Company comprises of three refineries consisting of two lube refineries, commissioned in 1966 and 1985 and a fuel refinery added to the complex in 1977

Number of Employees

More than 600

Capacity

Annual

Designed

Throughput Actual throughput

2012 2011

(In Metric Tons)

Fuel section – throughput

Of crude oil 2,710,500 2,275,092 2,421,092

Lube section - throughput

Of reduced crude oil 620,486 663,588 713,481

Reduction is due to day to day monitoring of throughput based on expected product margins.

Annual Sales Volume

Years	In Pak Rupees
2012	207,588,512,000/-

Bankers

(1) Habib Bank Limited, Pakistan.

(2) Faysal Bank Limited, Pakistan.

(3) United Bank Limited, Pakistan.

(4) Bank Al-Habib Limited, Pakistan.

(5) National Bank of Pakistan.

(6) Habib Metropolitan Bank Limited, Pakistan.

Financial Results

The year was a test of perseverance, as we had to contend with reduction in throughput and narrow margins. On the other hand was the task of meeting the growing energy needs of the nation and to keep moving the wheels of the economy. Profitability remained under pressure, however your company managed to earn profit after tax of Rs. 2,618 million compared to Rs. 6,569 million in the last year.

Company Profile

National Refinery Limited ( NRL ) was incorporated on August 19, 1963 as a public limited company. Government of Pakistan took over the management of NRL under the Economic Reforms Order, 1972 under the Ministry of Production, which was exercising control through its shareholding in State Petroleum Refining and Petrochemical Corporation (PERAC). The Government of Pakistan had decided to place the National Refinery Limited under the administrative control of Ministry of Petroleum & Natural Resources in November 1998. In June 2003 the Government of Pakistan decided to include NRL in its privatisation programme. The selling of 51% equity and transfer of management control to a strategic investor had been proposed accordingly, the due diligence process for the privatisation was initiated. After competitive bidding NRL was acquired by Attock Oil Group in July 2005. The Company has been privatised and the management handed over to the new owner (Attock Oil Group) on July 7, 2005.

Memberships

· Federation Pakistan Chamber of Commerce & Industry.(FPCCI)

· Karachi Chamber of Commerce & Industry.(KCCI)

Foreign Exchange Rates

Currency	Unit	Pakistani Rupee
US Dollar	1	Rs. 100.30
UK Pound	1	Rs. 153.50
Euro	1	Rs. 130.50

Comments

Subject Company is well known and directors are resourceful and experienced businessmen. Payments to creditors etc are reported as normal. Company can be considered for normal business dealings at usual trade terms and conditions.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.34
UK Pound	1	Rs.90.79
Euro	1	Rs.77.81

INFORMATION DETAILS

Report Prepared by :

MNL

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
----	NB	New Business	----

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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