Hascol Petroleum Limited- Yearly Report as on 30-Jun-15... · 2018. 1. 5. · I am delighted to report that during the 1st half of this year Hascol has maintained its growth momentum,

Contents

02 Corporate Information

04 Directors’ Review Report

06 Auditor Review Report

08 Condensed Interim Unconsolidated Financial Information

22 Condensed Interim Consolidated Financial Information

AuditorsGrant Thornton Anjum RahmanChartered Accountants Share RegistrarCentral Depository Company of Pakistan Limited BankersAllied Bank LimitedAskari Commercial Bank LimitedBank Al Habib LimitedBurj Bank LimitedHabib Bank LimitedHabib Metropolitian Bank LimitedIndustrial and Commercial Bank of ChinaFirst Women Bank LimitedMeezan Bank LimitedNational Bank of Pakistan Sindh Bank LimitedSoneri Bank LimitedSummit Bank LimitedUnited Bank Limited

Legal AdvisorMohsin Tayebaly & Co.Advocates & Legal Consultants Registered OfficeThe Forum, Suite No. 105 -106, First FloorKhayaban - e - Jami, Clifton, Block - 9, Karachi Phone: +92 - 21 - 35301343 - 50Fax: +92 - 21 - 35301351UAN: 111- 757 - 757Email: [email protected]

Chairman & C.E.OMr. Mumtaz Hasan Khan

Directors

Dr. Akhtar Hasan KhanMr. Farooq Rahmatullah Khan

Mr. Liaquat AliMr. Najmus Saquib Hameed

Mr. Saleem ButtMr. Sohail Hasan

Company Secretary

Mr. Zeeshan Ul Haq

Audit CommitteeMr. Sohail Hasan (Chairman)

Mr. Liaquat Ali (Member)Mr. Najmus Saquib Hameed (Member)

Strategy CommitteeMr. Farooq Rahmatullah Khan (Chairman)

Mr. Mumtaz Hasan Khan (Member)Mr. Liaquat Ali (Member)

Mr. Saleem Butt (Member)

Human Resources CommitteeMr. Najmus Saquib Hameed (Chairman)

Mr. Mumtaz Hasan Khan (Member)Mr. Liaquat Ali (Member)

Websitewww.hascol.com

CORPORATE INFORMATION

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I am delighted to report that during the 1st half of this year Hascol has maintained its growth momentum, especially in white oil products like Motor Gasoline and Diesel. Our growth in total volume during first six months over the corresponding period of last year has been 74.24%. This has had a positive impact on our earnings per share, which have also registered a growth of 30.8 % over the corresponding period for the last year.

During the first half, one of our major developments was the award of all the Motorway Outlets on the Islamabad and Lahore Motorway (M2). These outlets were previously managed by a competitor. Hascol is now in the process of upgrading the facilities at the outlets and in the meantime, Hascol brand has got a substantial boost in Punjab. It has also resulted in significant increase in sales volume and has had a positive impact on the Company’s profitability.

Director’s Rep

ort

The Directors of yourCompany presenttheir Half Yearly Report together with the reivewfinancial information for thesix months period ended 30th

June 2015.

SolidGrowthAt AllLevels!

As part of our aggressive storage development plan and improve supply chain management, I am also pleased to report that the Daulatpur Depot has been completed and all the regulatory approvals are in hand for us to commission the depot. After the completion of Daulat Pur we will start work on Mahmood Kot. We have also acquired additional land in Machike to build large Motor Gasoline storage. This will be our second storage facility in the same supply envelope, as the previous storage is fully utilized.

We are also in the process of acquiring suitable land for development of storage facility in the Islamabad/Rawalpindi region to streamline our supply chain operations in the north of Pakistan.

I would like to take this opportunity to thank all my Board Members for giving guidance and aggressive targets to the management and I am pleased to say that the management and all employees have responded to the challenge by hard work and meeting the targets.

Your company is now amongst the top five oil marketing companies in Pakistan and we hope to maintain our growth and profit momentum.

On behalf of the Board

Mumtaz Hasan KhanChairman & Chief Executive Officer

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IndependentAuditors’ ReportTo The MembersOn Review ofCondensedInterim FinancialInformation

IntroductionWe have reviewed the accompanying condensed interim balance sheet of Hascol Petroleum Limited (the Company) as at June 30, 2015, and the related condensed interim profit and loss account, condensed interim statement of comprehensive income, condensed interim statement of cash flow, condensed interim statement of changes in equity together with selected explanatory notes forming part thereof for the six - months

period ended (here-in-after referred to as the “condensed interim financial information”). Management of the Company is responsible for the preparation and fair presentation of this condensed interim financial information in accordance with approved accounting standards as applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusion on this condensed interim financial information based on our review.

Scope of ReviewWe conducted our review in accordance with the International Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of condensed interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

ConclusionBased on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim financial information as of and for the six-months period ended June 30,

2015 is not prepared, in all material respects, in accordance with approved accounting standards, as applicable in Pakistan for interim financial reporting.

Other matterThe figures for the condensed interim profit and loss account and condensed interim statement of comprehensive income for the quarters ended June 30, 2015 and June 30, 2014 have not been reviewed, as we are required to review only cumulative figures for the six-months period ended June 30, 2015.

KarachiDate: August 27, 2015

Grant Thornton Anjum RahmanChartered Accountants

Khaliq-ur-RahmanEngagement Partner

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CondensedInterimUnconsolidatedFinancial Informationfor the six monthsperiod endedJune 30, 2015

ASSETS Non-current assets Property, plant and equipment 5 5,073,320 3,290,784 Intangible 3,458 4,288 Long-term investments 6 2,635,192 781,542 Long-term deposits 108,614 56,489 Deferred taxation - net 7 - 509,075 Total non-current assets 7,820,584 4,642,178

Current assets Stock-in-trade 4,451,488 3,473,704 Trade debts 8 2,642,754 4,548,823 Advances 220,196 166,566 Deposits, prepayments and other receivables 9 1,374,019 1,024,954 Cash and bank balances 1,781,399 1,760,933 Total current assets 10,469,856 10,974,980 TOTAL ASSETS 18,290,440 15,617,158

EQUITY AND LIABILITIES EQUITY Authorized share capital 1,500,000 1,500,000

Share capital 1,005,660 906,000 Reserves 3,593,397 1,872,813 Total shareholders' equity 4,599,057 2,778,813 Surplus on revaluation of fixed assets - net of tax 1,302,469 320,550

LIABILITIES Non-current liabilities Long term finances - secured 405,706 278,571 Liabilities against assets subject to finance lease 45,166 48,704 Long term deposits 65,087 60,787 Deferred taxation - net 7 162,069 - Deferred liability - gratuity 78,958 71,057 Total non-current liabilities 756,986 459,119 Current liabilities Trade and other payables 10 9,282,840 8,103,145 Mark-up accrued 58,688 59,877 Short term running finances - secured 1,173,060 1,271,707 Current portion of long term finances - secured 255,532 289,309 Current maturity of liabilities against assets subject to finance lease 25,597 27,535 Taxation 836,211 2,307,103 Total current liabilities 11,631,928 12,058,676 Total liabilities 12,388,914 12,517,795 TOTAL EQUITY AND LIABILITIES 18,290,440 15,617,158 Contingencies and commitments 11

The annexed notes 1 to 19 form an integral part of these condensed interim unconsolidated financial information.

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CONDENSED INTERIM UNCONSOLIDATED BALANCE SHEETAS AT JUNE 30, 2015

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

Note

Mr. Najmus Saquib HameedDirector

Mumtaz Hasan KhanChairman & Chief Executive

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Sales - net 44,099,675 41,332,084 20,610,233 19,075,098

Sales tax (7,709,086) (5,798,549) (3,574,975) (2,703,967)Net sales 36,390,589 35,533,535 17,035,258 16,371,131

Other revenue 36,115 26,387 21,837 15,328 Net revenue 36,426,704 35,559,922 17,057,095 16,386,459

Cost of products sold (35,034,029) (34,553,942) (16,280,626) (15,881,432)Gross profit 1,392,675 1,005,980 776,469 505,027

Operating expenses

Distribution and marketing (438,406) (378,078) (269,198) (190,735)Administrative (178,827) (123,978) (119,334) (70,332) 775,442 503,924 387,937 243,960

Other operating income 106,293 59,245 34,371 51,579 Operating profit 881,735 563,169 422,308 295,539

Finance cost (162,033) (95,268) (66,097) (55,304)Other charges (31,669) (13,075) 12,786 (13,075)

Profit before taxation 688,033 454,826 368,997 227,160

Taxation 12 (172,261) (138,975) (126,908) (98,401)Profit for the period 515,772 315,851 242,089 128,759

Earnings per share - basic and diluted (Rupees per share) 5.13 3.92 2.41 1.59

The annexed notes 1 to 19 form an integral part of these condensed interim unconsolidated financial information.

(Rupees in '000)

CONDENSED INTERIM UNCONSOLIDATED PROFIT AND LOSS ACCOUNTFOR THE SIX-MONTHS PERIOD ENDED JUNE 30, 2015

June 30, 2015

Un-audited

June 30, 2014

Un-audited

June 30, 2015

Un-audited

Six months period ended Quarter ended June 30,

2014 Un-auditedNote



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Profit for the period 515,772 315,851 242,089 128,759 Other comprehensive income Items that may be reclassified to profit and loss account Unrealized gain due to change in fair value of long term investment classified as 'Available for sale'- net of tax 1,285,559 - 1,315,098 - Items that will never be reclassified to profit and loss account - - - - 1,285,559 - 1,315,098 - Total comprehensive income for the period 1,801,331 315,851 1,557,187 128,759 The annexed notes 1 to 19 form an integral part of these condensed interim unconsolidated financial information.

(Rupees in '000)

CONDENSED INTERIM UNCONSOLIDATED STATEMENT OFCOMPREHENSIVE INCOMEFOR THE SIX-MONTHS PERIOD ENDED JUNE 30, 2015

June 30, 2015

Un-audited

June 30, 2014

Un-audited

June 30, 2015

Un-audited


2014 Un-audited



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CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations 13 2,639,493 1,112,461 Finance cost paid (163,222) (90,278)Gratuity paid (2,307) - Dividend paid - (90,600)Taxes paid (1,636,440) 34,527 Net cash generated from operating activities 837,525 966,110 CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditure incurred (366,650) (712,863)Proceeds from disposal of property, plant and equipment 896 16,536 Long term investments made during the period (384,440) - Long term deposits (52,125) (5,433)Net cash used in investing activities (802,318) (701,760) CASH FLOWS FROM FINANCING ACTIVITIES

Lease liability paid (5,476) (8,078)Proceeds from issuance of shares - net of issuance cost - 1,315,680 Long term finance obtained and repaid - net 93,358 196,973 Long term deposits 4,300 5,179 Net cash generated from financing activities 92,182 1,509,754 Net increase in cash and cash equivalents 127,389 1,774,104 Cash and cash equivalents as at the beginning of the period 480,950 185,068

Cash and cash equivalents as at the end of the period 14 608,339 1,959,172 The annexed notes 1 to 19 form an integral part of these condensed interim unconsolidated financial information.

CONDENSED INTERIM UNCONSOLIDATED CASH FLOW STATEMENTFOR THE SIX-MONTHS PERIOD ENDED JUNE 30, 2015

June 30, 2015

Un-audited

June 30, 2014

Un-audited

(Rupees in '000)

Six months period ended

Note



Balance as at January 01, 2014 656,000 3,300 - 426,162 1,085,462

Total comprehensive income for the six months period ended June 30, 2014 -un-audited

Profit for the six months period ended June 30, 2015 -un-audited - - - 315,851 315,851

Other comprehensive income Transferred from surplus on revaluation of fixed assets on account of incremental depreciation - net of tax - - - 18,913 18,913 - - - 334,764 334,764

Transaction with owners Share issued during the period 250,000 1,162,500 - - 1,412,500 Share issuance cost - (96,820) - - (96,820)Interim cash dividend paid for the 1st quarter ended March 31, 2014 @ Rs.1per share. - - - (90,600) (90,600) 250,000 1,065,680 - (90,600) 1,225,080 Balance as at June 30, 2014 906,000 1,068,980 - 670,326 2,645,306

Balance as at January 01, 2015 906,000 1,070,828 (5,941) 807,926 2,778,813

Total comprehensive income for the six months period ended June 30, 2015-un-audited Profit for the six months period ended June 30, 2015 -un-audited - - - 515,772 515,772

Other comprehensive income Unrealized gain due to change in fairvalue of long term investment classifiedas 'Available for sale' - net of tax - - 1,285,559 - 1,285,559

Transferred from surplus on revaluationof fixed assets on account of incrementaldepreciation - net of tax - - - 18,913 18,913 - - 1,285,559 534,685 1,820,244 Transaction with owners Bonus shares @ 11% 99,660 - - (99,660) - Balance as at June 30, 2015 1,005,660 1,070,828 1,279,618 1,242,951 4,599,057 The annexed notes 1 to 19 form an integral part of these condensed interim unconsolidated financial information.

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(Rupees in '000)

CONDENSED INTERIM UNCONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE SIX-MONTHS PERIOD ENDED JUNE 30, 2015

ShareCapital

SharePremium

Fair valuereserve

Unappropri-ated Profit Total

Capital reserveRevenuereserve



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. The registered office of the Company is situated at Suite No.105-106, The Forum, Khayaban-e-Jami, Clifton, Karachi. On May 12, 2014, the Karachi, Lahore and Islamabad Stock Exchanges approved the Company's application for formal listing and quotation of shares. The principal activity of the Company are 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.

Subsidiary Hascombe Lubricants (Private) Limited is wholly owned subsidiary of the Company which is incorporated in Pakistan.

2. BASIS OF PREPARATION

These condensed interim financial information of the Company have been prepared in accordance with the requirements of International Accounting Standard 34 - 'Interim Financial Reporting' and provisions of and directives issued under the Companies Ordinance, 1984 (the Ordinance). In case where requirements differ, the provisions of or directives issued under the Ordinance have been followed. These condensed interim information have, however, been subjected to limited scope review by the auditors, as required by the Code of Corporate Governance.

These un-audited condensed interim financial information are being presented and submitted to the shareholders as required by Listing Regulations of Karachi, Lahore and Islamabad Stock Exchanges and under Section 245 of the Companies Ordinance, 1984. These condensed interim financial information not include all information and disclosures required in the annual financial statements and should be read in conjunction with the financial statements of the Company for the year ended December 31, 2014.

3. ACCOUNTING POLICIES

The accounting policies and the methods of computation adopted in the preparation of these condensed interim financial information are the same as those applied in the preparation of audited annual financial statements of the Company for the year ended December 31, 2014.

4. ACCOUNTING ESTIMATES AND JUDGEMENTS4.1 The preparation of these condensed interim financial information in conformity with the approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company's accounting policies. 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. However, actual results may differ from these estimates.

4.2 During the preparation of these condensed interim financial information, the significant judgements made by management in applying the Company's accounting policies and the key sources of estimation uncertainly were the same as those that were applied to the audited annual financial statements for the year ended December 31, 2014.

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NOTES TO THE CONDENSED INTERIM UNCONSOLIDATED FINANCIALINFORMATIONFOR THE SIX-MONTHS PERIOD ENDED JUNE 30, 2015

Owned assetsOffice building 491,890 270,080 Pump building 4,322 29,488 Plant and machinery 11,265 11,608 Tanks and pipelines 270,340 161,021 Dispensing pumps 2,249 27,570 Vehicles - 1,031 Computer auxiliaries 2,377 5,969 Furniture, office equipment and other assets 3,227 14,137 Electrical, mechanical and fire fighting equipment 217,677 105,988 1,003,347 626,892

Leased assetsPlant and machinery - 4,508 Electrical, mechanical and fire fighting equipment - 18,104 Vehicles 10,247 7,343 Dispensing pumps - 15,630 10,247 45,585 1,013,594 672,477

Owned assets Vehicles 1,376 1,376 -

December 31, 2014 - audited 5.2.1 28,282 14,568 13,714

5.2.1 For details of these assets disposed/ written off during the year ended December 31, 2014, please refer to the annual unconsolidated financial statements of the same.

5.2 The followning assets were disposed off during the period/ year:

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5. PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets 5.1 & 5.2 4,151,877 1,732,642 Capital work-in-progress 5.3 921,443 1,558,142 5,073,320 3,290,784

5.1 Additions to operating assets, including transfer from capital work-in-progress, during the period/ year were as follows:

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

Note

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

(Rupees in '000)

June 30, 2015 - un-audited

Note CostAccumulatedDeprectation

Net BookValue

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9. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

Receivable from oil marketing companies 9.1 232,073 437,596 Receivable against regulatory duty 25,312 - Inland Freight Equalization Margin (IFEM) receivable 835,186 373,335 Prepaid rent 132,567 89,051 Franchise income receivable 72,299 65,503 Prepaid insurance and others 18,445 18,565 Current portion of lease deposits 8,004 8,004 Price Differential Claims 9.2 5,083 5,083 Others 9.3 45,050 27,817 1,374,019 1,024,954

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

Note

10. TRADE AND OTHER PAYABLES

Trade creditors 7,416,609 6,442,108 Payable to cartage contractors 1,137,235 739,439 Advance from customers 316,438 269,577 Accrued liabilities 133,246 51,382 Other liabilities 279,312 600,639 9,282,840 8,103,145

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

9.1 This represents amount receivable from various oil marketing companies(OMCs) on account of share of motor gasoline imported by the company on behalf of various OMCs

9.2 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.

9.3 This includes Rs. 20.75 million (December 31, 2014: 18.2 million) receivable from related parties.

11. CONTINGENCIES AND COMMITMENTS11.1 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 (2014: Rs. 65.97 million)to the GoP/ OCAC, the management had not accounted for its impact in these interim financial information as the inflow of economic benefits,

though probable, is not virtually certain.

The facility for opening letters of credit (LCs) acceptances as at June 30, 2015 amounted to Rs. 12,300 million (December 31, 2014 : Rs. 9,322 million) of which the amount remaining unutilized as at that date was Rs. 4,755 million (December 31, 2014 : Rs. 2,243 million)

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11.2 Commitments

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

Property, plant and equipment 622,114 346,760

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

Not later than one year 131,184 91,060

Later than one year and not later than five years 503,306 346,442

Later than five years 1,281,287 798,729

1,915,776 1,236,231

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

12. TAXATION

Current 162,728 171,798

Deferred 9,533 (32,823)

172,261 138,975

June 30, 2015

Un-audited

June 30, 2014

Un-audited

(Rupees in '000)

13. CASH GENERATED FROM OPERATIONS

Profit before taxation 688,033 454,826

Adjustment for non-cash charges and other items:

Depreciation/ amortisation expense 74,830 61,593

Gain on sale of fixed assets (896) (2,865)

Provision for gratuity 10,208 9,473

Mark-up on short-term running finances and loans 162,033 95,268

Working capital changes 13.1 1,705,285 494,166

2,639,493 1,112,461

June 30, 2015

Un-audited

June 30, 2014

Un-audited

(Rupees in '000)

Note

Commitments for rental of assets under operating lease agreements as at June 30, 2015 amounted to Rs. 1,917.775 million (December 31, 2014: Rs. 1,236.231 million) payable as follows:

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13.1 Working capital changes

(Increase) / decrease in current assets Stock-in-trade (977,784) (3,015,406)

Trade debts 1,906,069 (52,881)

Short-term deposits and prepayments (349,065) (25,960)

Loans and advances - considered good (53,630) (76,292)

525,590 (3,170,539)

Increase in current liabilities Trade and other payables 1,179,695 3,664,706

1,705,285 494,167

June 30, 2015

Un-audited

June 30, 2014

Un-audited

(Rupees in '000)

14. CASH AND CASH EQUIVALENTS

Cash and bank balances 1,781,399 2,670,433 Finances utilised under mark-up arrangements - secured (1,173,060) (711,261) 608,339 1,959,172

June 30, 2015

Un-audited

June 30, 2014

Un-audited

(Rupees in '000)

Transactions

Associated Companies Sigma Motors Sale of fuels 839 2,837 Rental income 3,074 2,795 Hascombe Business Solutions (Private) Limited IT services supports 3,917 -

Staff retirement benefits / contribution funds

Provident fund Contribution 5,183 3,645 Gratuity fund Contribution 10,208 9,472

Key management personnel Salaries and other short term employee benefits 30,104 21,508

Director fee Fee for attending meetings 1,075 810

Other related parties balances Commission - 6,034

15. RELATED PARTY TRANSACTIONS

Transactions entered during the period by the Company with related parties are as follows:

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

Nature of transactionNature of relationship

All transactions with related parties have been carried out on commercial terms and conditions.

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

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.

16. FINANCIAL RISK MANAGEMENTThe financial risk management objectives and policies are consistent with those disclosed in the annual audited unconsolidated financial statements of the company as at and for the year ended December 31, 2014

17. CORRESPONDING FIGURES

In order to comply with the requirements of International Accounting Standard 34 - 'Interim Financial Reporting', corresponding figures in the condensed interim balance sheet comprise of balances as per the audited financial statements of the Company for the year ended December 31, 2014 and the corresponding figures in the condensed interim profit and loss account, condensed interim statement of comprehensive income, condensed interim statement of changes in equity and condensed interim statement of cash flows comprise of balances of comparable period as per the condensed interim financial information of the Company for the half year ended June 30, 2014.

18. DATE OF AUTHORISATION

These condensed interim financial information have been authorised for issue on August 27, 2015 by the board of directors of the Company.

18.1 The Board of Directors has declared an interim cash dividend of Rs. 1.50 per share amounting to Rs. 150.84 million and bonus shares in the proportion of 2 ordinary shares per 10 ordinary shares held amounting to Rs. 201.13 million at its meeting held on August 27, 2015. These financial statements do not reflect this appropriation.

19. GENERALAll amounts have been rounded to the nearest thousand, rupees.

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Balance

Associated Companies Sigma Motors Limited Trade debtor - 134 Sigma Motors Limited Other receivable 20,715 18,211

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

Nature of transactionNature of relationship



CondensedInterimConsolidatedFinancial Informationfor the six monthsperiod endedJune 30, 2015

ASSETS Non-current assets Property, plant and equipment 6 5,073,320 3,290,784 Intangible asset 3,458 4,288 Long-term investments 7 2,635,192 781,542 Long-term deposits 108,614 56,489 Deferred taxation - net 8 - 509,075 7,820,584 4,642,178 Current assets Stock-in-trade 4,451,488 3,473,704 Trade debts 2,642,754 4,548,823 Advances 220,196 166,566 Deposits, prepayments and other receivables 9 1,374,019 1,024,954 Cash and bank balances 1,781,855 1,761,389 10,470,312 10,975,436 TOTAL ASSETS 18,290,896 15,617,614

EQUITY AND LIABILITIES SHAREHOLDERS' EQUITY Share capital 1,005,660 906,000 Reserves 3,592,641 1,872,057 Total shareholders' equity 4,598,301 2,778,057

Surplus on revaluation of fixed assets - net of tax 1,302,469 320,550

LIABILITIES Non-current liabilities Long term finances - secured 405,706 278,571 Liabilities against assets subject to finance lease 45,166 48,704 Long term deposits 65,087 60,787 Deferred taxation - net 8 162,069 - Deferred liability - gratuity 78,958 71,057 756,986 459,119 Current liabilities Trade and other payables 10 9,284,052 8,104,357 Mark-up accrued 58,688 59,877 Short term running finances - secured 1,173,060 1,271,707 Current portion of long term finances - secured 255,532 289,309 Current maturity of liabilities against assets subject to finance lease 25,597 27,535 Taxation 836,211 2,307,103 11,633,140 12,059,888 12,390,126 12,519,007

Total Equity and Liabilities 18,290,896 15,617,614

Contingencies and commitments 11

The annexed notes 1 to 17 form an integral part of these condensed interim consolidated financial information.

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CONDENSED INTERIM CONSOLIDATED BALANCE SHEETAS AT JUNE 30, 2015

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

Note



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Sales - net 44,099,675 41,332,084 20,610,233 19,075,098

Sales tax (7,709,086) (5,798,549) (3,574,975) (2,703,967)

Net sales 36,390,589 35,533,535 17,035,258 16,371,131

Other revenue 36,115 26,387 21,837 15,328

Net revenue 36,426,704 35,559,922 17,057,095 16,386,459

Cost of products sold (35,034,029) (34,553,942) (16,280,626) (15,881,432)

Gross profit 1,392,675 1,005,980 776,469 505,027

Operating expenses

Distribution and marketing (438,406) (378,078) (269,198) (190,735)Administrative (178,827) (123,978) (119,334) (70,332) 775,442 503,924 387,937 243,960

Other operating income 106,293 59,245 34,371 51,579

Operating profit 881,735 563,169 422,308 295,539

Finance cost (162,033) (95,268) (66,097) (55,304)Other charges (31,669) (13,075) 12,786 (13,075)

Profit before taxation 688,033 454,826 368,997 227,160

Taxation 12 (172,261) (138,975) (126,908) (98,401)

Profit for the period 515,772 315,851 242,089 128,759

Earnings per share - basic and diluted (Rupees per share) 5.13 3.92 2.41 1.59 The annexed notes 1 to 17 form an integral part of these condensed interim consolidated financial information.

(Rupees in '000)

CONDENSED INTERIM CONSOLIDATED PROFIT AND LOSS ACCOUNT- UnauditedFOR THE SIX-MONTHS PERIOD ENDED JUNE 30, 2015

June 30, 2015

June 30, 2014

June 30, 2015


2014 Note



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Profit for the period 515,772 315,851 242,089 128,759 Other comprehensive income Items that may be reclassified to profit and loss account Unrealized gain due to changein fair value of long term investmentclassified as 'Available for sale'- net of tax 1,285,559 - 1,315,098 - Items that will never be reclassified to profit and loss account - - - - 1,285,559 - 1,315,098 -

Total comprehensive income for the period 1,801,331 315,851 1,557,187 128,759


(Rupees in '000)

CONDENSED INTERIM CONSOLIDATED STATEMENT OFCOMPREHENSIVE INCOME - UnauditedFOR THE SIX-MONTHS PERIOD ENDED JUNE 30, 2015

June 30, 2015

Un-audited

June 30, 2014

Un-audited

June 30, 2015

Un-audited


2014 Un-audited



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CASH FLOWS FROM OPERATING ACTIVITIES Cash generated from operations 13 2,639,493 1,112,461 Finance cost paid (163,222) (90,278)Dividend paid - - Gratuity paid (2,307) - Dividend paid - (90,600)Taxes paid (1,636,440) 34,527 Net cash generated from operating activities 837,525 966,110

CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditure incurred (366,650) (712,863)Proceeds from disposal of property, plant and equipment 896 16,536 Long term investments made during the period (384,440) - Long term deposits (52,125) (5,433)Net cash used in investing activities (802,318) (701,760)

CASH FLOWS FROM FINANCING ACTIVITIES Lease liability paid (5,476) (8,078)Proceeds from issuance of shares - net of issuance cost - 1,315,680 Long term finance obtained and repaid - net 93,358 196,973 Long term deposits 4,300 5,179 Net cash generated from financing activities 92,182 1,509,754

Net increase in cash and cash equivalents 127,388 1,774,104

Cash and cash equivalents as at the beginning of the period 481,406 185,830

Cash and cash equivalents as at the end of the period 13.1 608,795 1,959,934 The annexed notes 1 to 17 form an integral part of these condensed interim consolidated financial information.

CONDENSED INTERIM CONSOLIDATED STATEMENT OFCASH FLOWS - UnauditedFOR THE SIX-MONTHS PERIOD ENDED JUNE 30, 2015

March 31, 2015

March 31, 2014

(Rupees in '000)

Six months period ended

Note



Balance as at January 01, 2014 656,000 3,300 - 425,862 Total comprehensive income for the six months period ended June 30, 2014 -un-auditedProfit for the six months period ended June 30, 2014 -un-audited - - - 315,851 315,851

Other comprehensive income Transferred from surplus on revaluation of fixed assets on account of incrementaldepreciation - net of tax - - - 18,913 18,913 - - - 334,764 334,764 Transaction with owners Share issued during the period 250,000 1,162,500 - - 1,412,500 Share issuance cost - (96,820) - - (96,820)Interim cash dividend paid for the 1st quarter ended March 31, 2014 @ Rs.1 per share. - - - (90,600) (90,600) 250,000 1,065,680 - (90,600) 1,225,080

Balance as at June 30, 2014 906,000 1,068,980 - 670,026 2,645,006

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

Total comprehensive income for thesix months period ended June 30, 2015-un-audited Profit for the six months period endedJune 30, 2015 -un-audited - - - 515,772 515,772

Other comprehensive income

Unrealized gain due to change in fair value of long term investment classifiedas 'Available for sale' - net of tax - - 1,285,559 - 1,285,559

Transferred from surplus on revaluation of fixed assets on account of incrementaldepreciation - net of tax - - - 18,913 18,913 - - 1,285,559 534,685 1,820,244 Transaction with owners

Bonus shares @ 11% 99,660 - - (99,660) - 99,660 - - (99,660) -

Balance as at June 30, 2015 1,005,660 1,070,828 1,279,618 1,242,195 4,598,301


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(Rupees in '000)

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGESIN EQUITY - UnauditedFOR THE SIX-MONTHS PERIOD ENDED JUNE 30, 2015

ShareCapital

SharePremium

Fair valuereserve

Unappri-ated profit Total

Capital reserveRevenuereserve



1. STATUS AND NATURE OF BUSINESS1.1 Hascol Petroleum Limited (the Company), the Parent 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. During last year the Company was formally listed on Karachi, Lahore and Islamabad Stock Exchanges. The registered office of the Company is situated at Suite No.105-106, The Forum, Khayaban-e-Jami, Clifton, Karachi. The Company markets petroleum products and compressed natural gas. It also get blends and markets various kinds of lubricating products. The Company obtained oil marketing license from Ministry of Petroleum and Natural Resources in the year 2005. Commercial Operations were started in the month of September 2005.

1.2 The Group comprises of the Parent Company and the following subsidiary company that have been consolidated in these financial statements on line by line basis. All material inter company balances, and transaction have been eliminated.

Hascombe Lubricants (Private) Limited was incorporated on 27 December 2001 as a private limited company under the Companies Ordinance 1984. The registered office of the Subsidiary at suite no. 105 - 106, The Forum, Khayaban-e-Jami, Clifton, Karachi. Principal activity of the Subsidiary includes marketing and selling imported and locally produced automobile and industrial lubricants. Hascombe Lubricants (Private) Limited is a wholly owned subsidiary of Hascol Petroleum Limited.

2. BASIS OF PREPARATION The condensed interim consolidated financial information of the Company for the six month period ended June 30, 2015 are unaudited and have been prepared in accordance with the requirements of the International Accounting Standard 34 - 'Interim Financial Reporting' and provisions of and directives issued under the Companies Ordinance, 1984 (the Ordinance). In case where requirements differ, the provisions of or directives issued under the Ordinance have been followed. This condensed interim consolidated financial information is being submitted to the shareholders in accordance with section 245 of the Ordinance and should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2014.

3. ACCOUNTING POLICIESThe accounting policies and 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 audited annual consolidated financial statements of the Company for the year ended December 31, 2014.

4. ACCOUNTING ESTIMATES AND JUDGEMENTS4.1 The preparation of this condensed interim consolidated financial information in conformity with the approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. Estimates and judgements 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. However, actual results may differ from these estimates.

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NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATIONFOR THE SIX-MONTHS PERIOD ENDED JUNE 30, 2015

Subsidiary CompanyHascombe Lubricants(Private) Limited

Nature of BusinessLubricant Marketing

Holding100%

Owned assetsOffice Building 491,890 270,080 Pump Building 4,322 29,488 Tanks And Pipelines 11,265 161,021 Plant & Machinery 270,340 11,608 Dispensing Pumps 2,249 27,570 Vehicles - 1,031 Computer auxiliaries 2,377 5,969 Furniture, office equipment and other assets 3,227 14,137 Electrical, mechanical and fire fighting equipments 217,677 105,988 1,003,347 626,892 Leased assets Dispensing Pumps - 15,630 Plant & Machinery - 4,508 Electrical, mechanical and fire fighting equipments 10,247 18,104 Vehicles - 7,343 10,247 45,585 1,013,594 672,477

4.2 During the preparation of this condensed interim consolidated financial information, the significant judgements made by management in applying the Company's accounting policies and the ker sources of estimation uncertainly were the same as those that were applied to the audited annual financial statements for the year ended December 31, 2014.

5.FINANCIAL RISK MANAGEMENT The financial risk management objectives and policies are consistent with those disclosed in the annual audited consolidated financial statements of the Company as at and for the year ended December 31, 2014.

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6.2 The following assets were disposed / written off during the period/ year:

6. FIXED ASSETS

Property, plant and equipment Operating fixed assets 4,151,878 1,732,642 Capital work-in-progress 6.3 921,442 1,558,142 5,073,320 3,290,784

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

Note

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

Owned assets Vehicles 1,376 1,376 -

December 31, 2014 - audited 6.2.1 28,282 14,568 13,714

(Rupees in '000)

June 30, 2015 - un-audited

Note CostAccumulatedDeprectation

Net BookValue

6.1 Additions to operating assets during the period/ year were as follows:

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6.3 Capital work-in-progress

Office building 415,558 559,278 Petrol pump building 196,386 142,467 Plant and machinery 12,935 3,942 Tanks and pipelines 44,389 302,354 Furniture, office equipment and other assets 11,601 98,852 Dispensing pumps 122,762 85,649 Computer auxiliaries 3,539 1,819 Electrical, mechanical and fire fighting equipment 26,162 243,144 Borrowing cost capitalized 9,916 35,717 Advances to contractors 78,194 84,920 921,442 1,558,142

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

7. LONG-TERM INVESTMENTS

Associate - at fair value 7.1 2,635,192 781,542

7.1 Investment in associate - at fair value

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

Note

(Rupees in '000)

June 30, 2015

Un-audited

Carrying value December 31,

2014 Audited

UnrealizedCostNote

7.1.1 1,172,772 1,462,420 2,635,192 781,542

7.1.1 Investment in Pakistan Refinery Limited (PRL) amounts to Rs. 1,172.77 million (December 2014: Rs. 788.332 million) representing 13.72% (December 2014: 13.72% ) paid up share capital as at June 30, 2015. During the period Company subscribed right shares 38.444 million at the Rs. 10 each, resulting at the period end Company has 43.249 million shares (December 2014 : 4.802 million shares) and market value per share as at June 30, 2015 is Rs. 60.93 ( December 31, 2014 : Rs. 162.75 per share).

6.2.1 For details of the assets disposed/ written off during the year ended December 31, 2014, please refer to the annual audited consolidated financial statements for the same year.

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10. TRADE AND OTHER PAYABLES

Trade creditors 7,417,821 6,443,320 Payable to cartage contractors 1,137,235 739,439 Advance from customers 316,438 269,577 Accrued liabilities 133,246 51,382 Other liabilities 279,312 600,639 9,284,052 8,104,357

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

Property, plant and equipment 622,114 346,760

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

11. CONTINGENCIES AND COMMITMENTS

11.1 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 (PDC) 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 (December 31, 2014: 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.

The facility for opening letters of credit (LCs) acceptances as at June 30, 2015 amounted to Rs. 12,300 million (December 31, 2014 : Rs. 9,322 million) of which the amount remaining unutilized as at that date was Rs. 4,755 million (December 31, 2014 : Rs. 2,243 million).

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

Commitments for rental of assets under operating lease agreements as at June 30, 2015 amounted to Rs. 1,917.775 million (December 31, 2014: Rs. 1,236.231 million) payable as follows:

Not later than one year 131,184 91,060

Later than one year and not later than five years 503,306 346,442

Later than five years 1,281,287 798,729

1,915,776 1,236,231

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

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12. TAXATION

Current 162,728 171,798 Deferred 9,533 (32,823) 172,261 138,975

June 30, 2015

Un-audited

June 30, 2014

Un-audited

(Rupees in '000)

13.1 CASH AND CASH EQUIVALENTS

Cash and bank balances 1,781,855 2,671,195 Finances utilised under mark-up arrangements - secured (1,173,060) (711,261) 608,795 1,959,934

June 30, 2015

Un-audited

June 30, 2014

Un-audited

(Rupees in '000)

13. CASH GENERATED FROM OPERATIONS Profit before taxation 688,033 454,826

Adjustment for non-cash charges and other items: Depreciation/ amortisation expense 74,830 61,593 Gain on sale of fixed assets (896) (2,865)Provision for gratuity 10,208 9,473 Mark-up on short-term running finances and loans 162,033 95,268 Working capital changes 1,705,285 494,167 2,639,493 1,112,461 Working capital changes

(Increase) / decrease in current assets Stock-in-trade (977,784) (3,015,406)Trade debts 1,906,069 (52,881)Short-term deposits and prepayments (349,065) (25,960)Loans and advances - considered good (53,630) (76,292) 525,590 (3,170,539)Increase in current liabilities Trade and other payables 1,179,695 3,664,706 1,705,285 494,167

June 30, 2015

Un-audited

June 30, 2014

Un-audited

(Rupees in '000)

14. RELATED PARTY TRANSACTIONS

All transactions with related parties have been carried out on arm's length basis.

Expenses recovered from / charged by related parties are based on actual. 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 Executive Director and Executives to be key management personnel.

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Sigma Motors (Private) Limited Sale of fuels 839 2,837 Office rent 3,074 2,795

Hascombe Business Solution (Private) Limited IT services support 3,917 -

Staff retirement benefits /contribution funds Provident fund Contribution 5,183 3,645 Gratuity fund Contribution 10,208 9,472

Key management personnel Salaries and benefits 30,104 21,508

Other related parties Professional fees 4,200 6,034

Director fee Fee for attending meetings 1,075 810

June 30, 2015

Un-audited

June 30, 2014

Un-audited

(Rupees in '000)

Nature of transactionNature of relationshipAssociated Companies

Balance

Sigma Motors (Private) Limited Trade creditors - 134 Sigma Motors (Private) Limited Other receivable 20,715 18,345

June 30, 2015

Un-audited

December 31, 2014

Audited

(Rupees in '000)

Nature of transactionNature of relationshipAssociated companies

15. CORRESPONDING FIGURES In order to comply with the requirements of International Accounting Standard 34 - 'Interim Financial Reporting', corresponding figures in the condensed interim consolidated balance sheet comprise of balances as per the audited consolidated financial statements of the group for the year ended December 31, 2014 and the corresponding figures in the condensed interim consolidated statement of comprehensive income, condensed interim consolidated statement of changes in equity and condensed interim consolidated statement of cash flows comprise of balances of comparable period as per the condensed interim consolidated financial information of the Company for the six

months ended.

16. DATE OF AUTHORISATION

These condensed interim consolidated financial information have been authorised for issue on

August 27, 2015 by the board of directors of the Company.

16.1 The Board of Directors has declared an interim cash dividend of Rs. 1.50 per share amounting to Rs. 150.84 million and bonus shares in the proportion of 2 ordinary shares per 10 ordinary shares held amounting to Rs. 201.13 million at its meeting held on August 27, 2015. These financial statements do not reflect this appropriation.

17. GENERALAll amounts have been rounded to the nearest thousand.

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Documents

Hascol Petroleum Limited- Yearly Report as on 30-Jun-15... · 2018. 1. 5. · I am delighted to report that during the 1st half of this year Hascol has maintained its growth momentum,