DOL Quarterly report 2017-18 final - Descon · Lahore - 53000 Pakistan. Tel: +92 42 35923721-9...

VisionOur vision is to be the leading Pakistan supplier of oxidative solutions based on hydrogen peroxide, complemented by related technologies to the textile, food safety, environmental and other industrial markets. At Descon Oxychem, we are committed to conducting our business honestly and ethically, complying with all applicable laws – this is our commitment to integrity. Our values exemplify our dedication to high standards of corporate responsibility towards all our stakeholders.

MissionThe mission is underpinned by four principles including safety, innovation, sustainability and customer focus.Our world class safety record is a deep part of our company’s heritage, and an incident-free workplace is our �rst priority and foremost goal. We pride ourselves on quality products and innovative applications that are developed as a result of ingenuity and technical expertise. Industry demands constantly evolve, and we keep pace with this evolution.As an industry leader with an international footprint, we know that progress happens with hard work, a commitment to success and most of all, sustainable practices. The strength and value of our business lies in our people and their commitment to working with customers to provide solutions, technology expertise and unwavering commitment towards all customers’ needs.

Our Values Continuous Improvement Leadership Accountability & Ownership Teamwork Open Communication Safety

Contents

Company Information

Directors Report- English

Directors Report- Urdu

Condensed Interim Balance Sheet

Condensed Interim Pro�t and Loss Account

Condensed Interim Statement of Changes in Equity

Condensed Interim Cash Flow Statement

Notes to and Forming Part of the Condensed Interim Financial Information

2

3

4

5

6

7

8

9

Company Information

Board of Directors

Abdul Razak Dawood ChairmanAamir Niazi Chief Executive OfficerAsif Qadir Taimur DawoodFarooq NazirMehreen DawoodFaisal DawoodAli Asrar Hossain Aga

Muhammad Saqib AbbasChief Financial Officer

Abdul SohailCompany Secretary

AuditorsM/s A.F. Ferguson & Co.Chartered Accountants

Internal AuditorsM/s KPMG Taseer Hadi & Co.Chartered Accountants

Legal AdvisorsM/s Hassan & Hassan Advocates

BankersAllied Bank LimitedBank Al Habib LimitedHabib Metropolitan Bank LimitedSoneri Bank LimitedAskari Bank LimitedMCB Bank Limited

Share RegistrarM/s Corplink (Pvt.) LimitedWings Arcade, 1-K Commercial Area,Model Town, Lahore - 53000Tel: +92 42 35887262, 35839182Fax: +92 42 35869037

Registered OfficeDescon Headquarters18-KM Ferozepur RoadLahore - 53000 Pakistan.Tel: +92 42 35923721-9

Plant Site18-KM Lahore - Sheikhupura Road,Lahore, Pakistan.Tel: +92 42 3797 1822-243Fax: +92 42 3797 1831

Web PresenceUpdated Company’s Informationtogether with the latest Annual Reportcan be accessed at Descon’s website,www.desconoxychem.com

Descon Oxychem Limited 21 Descon Oxychem Limited


Condensed Interim Pro�t and Loss Accountfor the Quarter Ended September 30, 2017 (Unaudited)

September 30,2017

September 30,2016

Quarter ended

------------ Rupees '000' ------------Note

Sales Cost of sales Gross pro�t Administrative expenses

Distribution and selling cost

Other operating income

Other expenses Pro�t from operations Finance cost Pro�t before taxation Taxation Pro�t for the period Other comprehensive income

Total comprehensive income for the period Earnings per share - Basic - Rupees - Diluted - Rupees

448,557

(329,508)

119,049

(20,422)

(16,776)

975

(4,062)

78,764

(1,583)

77,181

(29,168)

48,013

-

48,013

0.47 0.23

11 12

13.113.2

477,801

(333,111)

144,690

(19,020)

(17,818)

3,385

(5,078)

106,159

(6,747)

99,412

(43,121)

56,291

-

56,291

0.55 0.27

The annexed notes 1 to 18 form an integral part of this condensed interim �nancial information.

_______________________CHIEF EXECUTIVE

_______________________DIRECTOR

Condensed Interim Balanced Sheetas at September 30, 2017

_______________________CHIEF EXECUTIVE

_______________________DIRECTOR

EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Authorized capital 110,000,000 (June 2017: 110,000,000) ordinary shares of Rs 10 each 110,000,000 (June 2017 : 110,000,000) preference shares of Rs 10 each Issued, subscribed and paid up capital 102,000,000 (June 2017: 102,000,000) ordinary shares of Rs 10 each 110,000,000 (June 2017 : 110,000,000) preference shares of Rs 10 each Accumulated loss CURRENT LIABILITIES Finances under markup arrangement- secured Trade and other payables Accrued �nance cost Current income tax payable CONTINGENCIES AND COMMITMENTS

ASSETS

NON-CURRENT ASSETS

Property, plant and equipmentIntangible assetsLong term depositsDeferred taxation

CURRENT ASSETS

Stores and sparesStock-in-tradeTrade debts - unsecuredAdvances, deposits, prepayments and other receivablesCurrent income tax recoverableCash and bank balances

1,100,000

1,100,000

1,020,000

1,100,000 (354,538) 1,765,462

30,352 124,016 192,069

8,675 355,112

2,120,574

1,482,294 1,247

17,654 70,681

1,571,876

213,314 62,935 57,417

208,737 -

6,295 548,698

2,120,574

5

6

7

8

9

10

16

1,100,000

1,100,000

1,020,000

1,100,000 (402,551) 1,717,449

42,231 209,488 191,203

- 442,922

2,160,371

1,518,988 1,813

17,654 86,434

1,624,889

203,073 47,803 67,322

194,518 1,006

21,760 535,482

2,160,371

September 30,2017

UnauditedNote

June 30,2017

Audited------------ Rupees '000' ------------


Bal

ance

as

on

Ju

ly 1

, 201

6

Pro

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Bal

ance

as

on

Sep

tem

ber

30,

201

6

Bal

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as

on

Ju

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7

Tota

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by a

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dis

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Pro

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Bal

ance

as

on

Sep

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30,

201

7

___

____

____

____

____

____

CH

IEF

EXEC

UTI

VE

___

____

____

____

____

____

DIR

ECTO

R

1,

020,

000 - -

1,02

0,00

0

1,0

20,0

00 -

-

1,02

0,00

0

1,10

0,00

0 -

-

1,10

0,00

0

1,1

00,0

00

-

-

1,10

0,00

0

-

-

-

-

-

-

-

-

(607

,476

)

56,

291

56,

291

(551

,185

)

(40

2,55

1)

48,

013

48,

013

(35

4,53

8)

1,51

2,52

4

56,

291

56,

291

1,56

8,81

5

1,7

17,4

49

48,

013

48,

013

1,7

65,4

62

The

ann

exed

not

es 1

to 1

8 fo

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f thi

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nden

sed

inte

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Sh

are

Acc

um

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To

tal

cap

ital

loss

Fai

r V

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e

Res

erve

----

----

----

----

----

----

----

----

----

----

-Rup

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s ‘0

00’-

----

----

----

----

----

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--

Sh

are

cap

ital

Co

nd

ense

d In

teri

m S

tate

men

t O

f C

han

ges

In E

qu

ity

for

the

Qua

rter

End

ed S

epte

mbe

r 30

, 201

7 (U

naud

ited)

Pre

fere

nce

Sh

are

Cap

ital

Ord

inar

y


Cash �ows from operating activities Cash generated from operations Finance cost paidPro�t on deposits receivedIncome tax paid Net cash generated from operating activities Cash �ows from investing activities

Fixed capital expenditure Net cash used in from investing activities`

Cash �ows from �nancing activities

Repayment of loan

Net cash used in �nancing activities

Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at the end of the period

7,417 (717)

146 (3,340)

3,506

(7,092)

(7,092)

-

-

(3,586) (20,471)

(24,057)

15

16

143,849 (13,055)

1,749 (1,781)

130,762

(3,107)

(3,107)

(224,742)

(224,742)

(97,087) 171,560

74,473

September 30,2017

Quarter ended

Note

September 30,2016

------------ Rupees '000' ------------

Condensed Interim Cash Flow Statement for the Quarter Ended September 30, 2017 (Unaudited)


_______________________CHIEF EXECUTIVE

_______________________DIRECTOR

Notes To And Forming Part Of the Condensed Interim Financial Information for the Quarter Ended September 30, 2017 (Unaudited)

The Company and its operations

The Company was incorporated in Pakistan as a private limited company on November 12, 2004 under the Companies Ordinance, 1984 and was converted into a public limited company with effect from February 28, 2008. Subsequently, on September 15, 2008, it was listed on Karachi Stock Exchange (now Pakistan Stock Exchange) . The registered office of the company is situated at 18-KM Ferozepur Road, Lahore and the factory is situated at 18-KM Lahore-Sheikhupura Road, Lahore. It is principally engaged in the manufacture, procurement and sale of hydrogen peroxide and allied products. The Company commenced its commercial production on March 1, 2009. Basis of preparation This condensed interim �nancial information is un-audited and is being submitted to the members in accordance with section 245 of the Companies Ordinance, 1984. It has been prepared in accordance with the requirements of the International Accounting Standard (IAS) 34 - 'Interim Financial Reporting' and provisions of and directives issued under the Companies Ordinance, 1984. In case where requirements differ, the provisions of or directives issued under the Companies Ordinance, 1984 have been followed. This condensed interim �nancial information does not include all the information required for annual �nancial statements and therefore, should be read in conjunction with the annual �nancial statements for the year ended June 30, 2017. Signi�cant accounting policies The accounting policies adopted for the preparation of this condensed interim �nancial information are the same as those applied in the preparation of preceding annual �nancial statements of the Company for the year ended June 30, 2017. Initial application of standards, amendments or an interpretation to existing standards

The following amendments to existing standards have been published that are applicable to the Company's �nancial statements covering annual periods, beginning on or after the following dates: Amendments to published standards effective and relevant in current period

Following amendment to existing standard and interpretation has been published and is mandatory for accounting periods beginning on or after January 1, 2016 and is considered to be relevant to the Company's operations:

Annual Improvements 2014. The application of these amendments have no material impact on the Company's �nancial statements.

Amendments to IAS 1, 'Presentation of �nancial statements' on disclosure initiative. The application of these amendments have no material impact on the Company's �nancial statements.

Amendments to IAS 16 ‘Property, plant and equipment’ in relation to use of revenue based methods to calculate the depreciation. The application of these amendments have no material impact on the Company's �nancial statements.

Amendments to IAS 38 ‘Intangible assets’ in relation to use of revenue based methods to calculate the depreciation. The application of these amendments have no material impact on the Company's �nancial statements.

Standards, interpretations and amendments to published approved accounting standards that are effective but not relevant

The new standards, amendments and interpretations that are mandatory for accounting periods beginning on or after January 1, 2017 are considered not to be relevant for Company's �nancial statements and hence have not been detailed here.

1.

2.

3.

3.1

3.2

3.2.1

3.2.2


Standards, amendments and interpretations to existing standards that are not yet effective and not applicable to Company's operations. Standards or Interpretations

Taxation

The provision for taxation for the quarter ended September 30, 2017 has been made using the tax rate that would be applicable to expected total annual earnings.

Preference shares

Key Terms of the preference shares Preference shares issued are non-voting, cumulative, convertible, redeemable preference shares (referred to as Preference Shares) with no speci�ed maturity date. The key terms of the preference shares are as follows:

- The preference shares shall be cumulative, and shall carry entitlement of a �xed annual cumulative dividend of 12% to be paid out of the normal pro�ts of the company in each �nancial year. Any dividend not paid in a �nancial year shall cumulate towards entitlement of dividend in future years. - The preference shares shall not carry any entitlement of ordinary dividend, right shares or bonus shares, or have any right to participate in the pro�ts of the company. - The preference shares shall be redeemable at par value solely at the option of the company, only through a sinking fund created out of the pro�ts of the company. - The preference shares shall be convertible into ordinary shares at the ratio of one preference share to one ordinary share at the option of either of the company or the preference share holder, any time and from time to time after expiry of �ve years from the date of allotment of the relevant preference shares. The outstanding dividend on the preference shares will not be converted into ordinary shares.

3.2.3

4.

5.

5.1

IFRS 9, 'Financial instruments' IFRS 15, 'Revenue from contracts' Amendments to IFRS 15, ‘Revenue from contracts with customers’ on gross versus net revenue presentation' IFRS 16, 'Leases' IFRS 2 (Amendments), 'Shared-based payment' classi�cation and measurement IFRS 4 (Amendments), 'Insurance contracts' Annual improvements 2016; IFRS 1, ‘First time adoption of International Financial Reporting Standards’. IAS 28, 'Investments in Associates and Joint Ventures'. IAS 40, (Amendments), 'Investment Property' IFRIC 22, 'Foreign Currency Transactions and Advance Considerations' IFRS 17 (Amendments), 'Insurance contracts'

January 1, 2018 January 1, 2018

January 1, 2018

January 1, 2019 January 1, 2018

January 1, 2018January 1, 2018 January 1, 2018 January 1, 2018 January 1, 2021

Effective date (accounting periods beginning on or after)


Under the International Financial Reporting Standards (IFRS), the preference shares represent a compound �nancial instrument with a liability component representing the contractual stream of preference dividend required to be paid by the company. However, in these �nancial statements, the preference shares have been treated as part of equity on the following basis: - The preference shares were issued under the provisions of section 86 of the Companies Ordinance, 1984 (the Ordinance) read with section 90 of the Ordinance and the Companies Share Capital (Variation in Rights and Privileges) Rules, 2000; - The issue of the shares was duly approved by the members of the Company at the Annual General Meeting held on October 30, 2014; and - The requirements of the Ordinance takes precedence over the requirements of International Financial Reporting Standards.

Pursuant to settlement of the loans towards preference shares , the entire amount of the accrued �nance cost is now payable on demand.

Contingencies and commitments

Contingencies

Guarantee issued to Sui Northern Gas Pipeline Limited against the performance of a contract amounting to Rs. 48.64 million (June 2017: Rs. 48.64 million). Commitments

i) The company has commitments in respect of letters of credit other than capital expenditure amounting to Rs. 27.223 million (June 2017: Rs. 85 million). ii) Cumulative dividend on preference shares of Rs. 297 million ( June 2017 : Rs. 264 million)

5.2

6.

6.1

7.

7.1

7.2

8.

6.1 6.1

81,149 109,818

1,102 192,069

81,149 109,818

236 191,203

Spetember 30,2017

UnauditedNote

June 30,2017

Audited------------ Rupees '000' ------------

Operating assets - at net book value Opening book value Add: Additions during the period

Less: Disposals during the period Less: Depreciation charged during the period Less: Impairment loss Closing book value

Additions during the period Buildings on freehold land Plant, machinery and equipment Laboratory equipment Tools and equipment Computer equipment Electrical equipment Office equipment Furniture and �xture Vehicles Disposals during the period Plant, machinery and equipment Tools and equipment Office equipment

8.1

8.1.1

8.1.2

8.1.1

8.1.2

1,452,260 1,814

1,454,074

- 43,786

1,410,288

1,216 - -

72 -

462 64

- -

1,814

- - -

-

1,626,442 14,126

1,640,568

2,189 181,592

4,527 1,452,260

2,045 8,869

221 1,362

695 319 296 252 67

14,126

1,638 537

14 2,189

September 30,2017

UnauditedNote

June 30,2017

Audited------------ Rupees '000' ------------

Accrued Finance Cost

Long term �nances - secured - Associated companies Long Term Loans - unsecured Finances under markup arrangements - secured

8.1 1,410,288 400

71,606 1,482,294

1,452,260 400

66,328 1,518,988

Spetember 30,2017

UnauditedNote

June 30,2017

Audited------------ Rupees '000' ------------

Property, plant and equipment

Operating assets Capital work-in-progress Major spare parts, catalysts and standby equipment


Stock in trade Raw material including in transit of Rs 22.938 million(June 2017: Rs 10.380 million)] Work-in-process Finished goods

Work-in-process include unused packing material of Rs. 1.552 million (June 2017: Rs 2.374 million). These include sales tax receivable of Rs 186.710 million (June 2017: Rs 187.520 million).

Sales Gross sales: - Local - Export Less: Commission and discount on sales Less: Sales Tax Net Sales Cost of goods sold Raw material consumed Salaries, wages and other bene�ts Repair and maintenance Fuel and power Services through contractors Rent & rates Depreciation on property, plant and equipment Insurance Miscellaneous

Add: Opening work in process Less: Closing work in process Cost of goods produced Add: Opening �nished goods Less: Closing �nished goods Cost of goods sold - own manufactured Cost of goods sold - purchase for resale Cost of goods sold

9.

9.1

10.

11.

12.

September 30,2017

Unaudited

June 30,2017

Audited------------ Rupees '000' ------------

32,351

1,552 29,032 62,935

475,259 2,458

477,717

(10,230) (18,930) 448,557

141,505 21,541

8,548 62,727

6,488 4,930

43,532 2,090 1,012

292,373

305 (1,552) (1,247)

291,126 31,474

(29,032) 2,442

293,568 35,940

329,508

16,024

2,680 29,099 47,803

499,402 10,496

509,898

(14,689) (17,408) 477,801

147,681 18,766 11,161 67,148 8,303 5,276

43,583 1,992 1,292

305,202

291 (352)

(61) 305,141

4,191 (5,787) (1,596)

303,545 29,566

333,111

9.1

Note

September 30,2017

September 30,2016

Quarter ended

--------- Rupees '000' ---------

48,013

102,000

0.47

48,013

102,000

110,000

212,000

0.23

2,612 -

11,230

297 -

566

13,538

11,980

53 15,027

190,967

56,291

102,000

0.55

56,291

102,000

110,000

212,000

0.27

2,355 8

5,624

801 356

501

11,467

13,31858 -

190,967

September 30,2017

September 30,2016

Quarter ended

------------ Rupees '000' ----------

September 30,2017

September 30,2016

Quarter ended

------------ Rupees '000' ------------

Earnings per share Basic earnings per share Pro�t for the period Weighted average number of ordinary shares Earnings per share Diluted earnings per share Pro�t for the period Weighted average number of ordinary shares Add: Weighted average number of preference shares Weighted average number of outstanding shares Diluted earning per share

Transactions with related parties

Relationship with the company i. Associated undertakings ii. Post employment bene�t plansiii. Key management personnel Relationship with the company

Period-end balances

Associated undertakings

13.

13.1

13.2

14.

Rupees in thousand

Number in thousand

Rupees

Rupees in thousand

Number in thousand

Number in thousand

Number in thousand

Rupees

Nature of transaction

Purchase of goods and services Sale of goods Share of common expenses charged from associated companies Share of common expenses charged to associated companies Mark-up expense Expense charged in respect of retirement bene�t plans Salaries and other employee bene�ts Nature of transaction

Payable to related parties Receivable from related parties Advances to related parties Accrued �nance cost

September 30,2017

Unaudited

June 30,2017

Audited------------ Rupees '000' ------------

15 Descon Oxychem Limited

Cash generated from operations Pro�t before taxation Adjustments for: - Depreciation on property, plant and equipment - Finance cost - Interest on bank deposits - Provision for stock and receivables - Exchange gain Pro�t before working capital changes Effect on cash �ow due to working capital changes - (Increase)/decrease in stores and spares - (Increase)/decrease in stock-in-trade - Decrease/(increase) in trade debts - Increase in advances, deposits, prepayments and other receivables - (Decrease)/increase in trade and other payables Cash generated from operations Cash and cash equivalents Cash and bank balances Finances under markup arrangement - secured

Date of authorization for issue This condensed interim �nancial information was authorized for issue on October 25, 2017 by the Board of Directors of the Company. Corresponding �gures Corresponding �gures have been re-arranged and reclassi�ed, wherever necessary, for the purposes of comparison and better presentation as per reporting framework.

In order to comply with the requirements of International Accounting Standard 34 - 'Interim Financial Reporting', the condensed interim balance sheet have been compared with the balances of annual audited �nancial statements of preceding �nancial year, whereas, the condensed interim pro�t and loss account, condensed interim statement of comprehensive income, condensed interim statement of changes in equity and condensed interim cash �ow statement have been compared with the balances of comparable period of immediately preceding �nancial year.

15.

16.

17.

18.

_______________________CHIEF EXECUTIVE

_______________________DIRECTOR

77,181

43,786 1,583 (146) 1,500

172

124,076

(10,991) (15,132)

9,155

(14,219) (85,472)

(116,659) 7,417

99,412

43,616 6,747

(1,749) 1,500

11

149,537

909 10,556

(15,005)

(9,798) 7,650

(5,688) 143,849

6,295 (30,352) (24,057)

21,760 (42,231) (20,471)

September 30,2017

September 30,2016

Quarter ended

------------ Rupees '000' ------------

September 30,2017

Unaudited

June 30,2017

Audited------------ Rupees '000' ------------

DOL Quarterly report 2017-18 final - Descon · Lahore - 53000 Pakistan. Tel: +92 42 35923721-9...

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Transcript of DOL Quarterly report 2017-18 final - Descon · Lahore - 53000 Pakistan. Tel: +92 42 35923721-9...