Paints&ch.gdr Regulatory News (PCLD)

18 May 2009 07:00



Paints and Chemical Industries Company "Pachin"

S.A.E.

The Consolidated Financial Statements

Together with the

Limited Review Report

For the Period from July 1, 2008 until

March 31, 2009

LIMITED REVIEW REPORT

To: The Board of Directors of Paints and Chemical Industries Company "Pachin"

Introduction

We have reviewed the accompanying consolidated balance sheet of Paints and Chemical Industries Company as of March 31, 2009, and the related statements of consolidated income, cash flows and changes in equity for the period from July 1, until March 31, 2009 and the summary of significant accounting polices and the disclosure thereto. These financial statements are the responsibility of the company's management. Our responsibility is to issue a report on these financial statements based on our review.

Scope of Limited Review 

We conducted our review in accordance with the Egyptian Standard No. (2410) applicable to review engagements. This standard requires that we plan and perform the review to obtain moderate assurance that the financial statements are free of material misstatement. A review is limited primarily to inquiries of the company's personal and an analytical procedure applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements as of March 31, 2009 do not give a true and fair view of the company's financial position and the results of its operations and cash flows for the nine month period then ended according to the Egyptian Accounting Standards.

Cairo, May 11, 2009

Kamel M. Saleh ACA 

F.E.S.A.A (RAA 8510)

PAINTS AND CHEMICAL INDUSTRIES COMPANY "PACHIN" S.A.E.
Consolidated Balance Sheet
As of March 31, 2008
			Consolidated				Pachin
	Notes		31/3/2009		30/6/2008		31/3/2009		30/6/2008
			EGP		EGP		EGP		EGP
Non-Current Assets
Property, plant and equipment (Net)	(2b, 4)		244 282 856		215 924 576		16 426 447		17 853 224
Projects under construction	(2c, 5)		38 087 146		48 658 552		3 872 909		1 888 146
Investment in subsidiary companies	(2f, 6)		--		--		249 880 000		232 387 000
Available for sales investments	(2f, 7)		774 906		774 906		774 906		774 906
Other non-current assets	(2d, 8)		16 016 000		16 016 000		16 016 000		16 016 000
Total Non-Current Assets			299 160 908		281 374 034		286 970 262		268 919 276
Current Assets
Inventories (Net)	(2g, 9, 16b)		230 278 529		165 409 576		90 455 529		78 739 794
Letters of Credit			2 008 078		7 363 465		459 459		2 034 087
Accounts receivable (Net)	(2h, 10, 16b)		42 223 854		36 603 351		29 410 858		30 990 136
Notes receivable (Net)	(11, 16b)		9 717 613		10 558 224		2 197 238		5 766 840
Due from subsidiary companies	(12)		--		--		4 450 100		5 820 758
Other debit balances	(13)		57 649 592		51 202 108		46 492 098		139 070 065
Investments for trading	(2i, 14)		1 590 886		75 772 987		222 112		317 727
Cash and cash equivalents	(2j, 15)		51 729 009		61 850 705		10 021 533		18 824 940
Total Current Assets			395 197 561		408 760 416		183 708 927		281 564 347
Current Liabilities
Provisions	(16 a)		38 928 731		38 928 731		35 836 819		35 836 819
Banks - overdraft	(17)		18 458 831		41 609 365		1 331 601		1 249 091
Short-term Loans	(24)		8 000 000		--		--		--
Accounts and notes payable	(2l, 18)		49 500 313		44 198 257		11 000 810		10 836 767
Due to El-Obour for Paint	(19)		--		--		16 199 324		10 957 576
Other credit balances	(20)		46 714 955		40 469 301		17 370 584		17 939 534
Total Current Liabilities			161 602 830		165 205 654		81 739 138		76 819 787
Working Capital			233 594 731		243 554 762		101 969 789		204 744 560
Total Investment finianced by :			532 755 639		524 928 796		388 940 051		473 663 836
Share Capital
Share capital	(21)		200 000 000		200 000 000		200 000 000		200 000 000
Reserves	(22)		201 754 501		191 420 791		175 558 975		170 627 297
Retained earnings			31 262 525		16 838 942		19 190 549		3 951 441
Profit for the period / year			59 055 335		107 917 721		(6 261 007)		98 633 564
Total Share Capital			492 072 361		516 177 454		388 488 517		473 212 302
Minority Interest			172 573		182 398		--		--
Total Sharholders Equity and Minority Interest			492 244 934		516 359 852		388 488 517		473 212 302
Long-term liabilities	(23)		8 510 705		8 568 944		451 534		451 534
Long-term loans	(24)		32 000 000		--		--		--
Total Financing of Working Capital and Non-Current Assets			532 755 639		524 928 796		388 940 051		473 663 836

PAINTS AND CHEMICAL INDUSTRIES COMPANY "PACHIN" S.A.E.
Consolidated Income Statement
From July 1, 2008 until March 31, 2009
			Consolidated								Pachin
	Notes		Period from 1/1/2009 to 31/3/2009		Period fom 1/7/2008 to 31/3/2009		Period from 1/1/2008 to 31/3/2008		Period from 1/7/2007 to 31/3/2008		Period fom 1/1/2009 to 31/3/2009		Period fom 1/7/2008 to 31/3/2009		Period fom 1/1/2008 to 31/3/2008		Period fom 1/7/2007 to 31/3/2008
			EGP		EGP		EGP		EGP		EGP		EGP		EGP		EGP
Net sales	(3)		120 653 910		445 740 270		135 629 375		434 921 801		30 960 019		104 347 286		42 799 092		127 435 501
Cost of sales			(106 889 961)		(376 015 318)		(111 998 143)		(341 474 331)		(32 513 807)		(105 708 665)		(40 434 864)		(119 665 611)
Gross Profit			13 763 949		69 724 952		23 631 232		93 447 470		(1 553 788)		(1 361 379)		2 364 228		7 769 890
General and administrative expenses			(4 082 251)		(11 500 100)		(3 783 991)		(10 028 159)		(1 869 137)		(5 686 492)		(2 856 172)		(7 423 166)
Allowance for attending the Board of Directors			( 176 000)		( 342 500)		( 63 500)		( 200 000)		( 52 500)		( 125 000)		( 42 500)		( 96 000)
Profit from Operations			9 505 698		57 882 352		19 783 741		83 219 311		(3 475 425)		(7 172 871)		( 534 444)		250 724
Interest expenses			(1 848 108)		(6 071 544)		( 735 013)		(1 497 599)		( 333 202)		( 927 909)		( 251 493)		( 624 465)
Profit on sale of investments			101 829		2 194 655		( 44 553)		1 254 943		6 407		466 753		( 44 553)		814 302
Gain on revaluation of trading investment			47 381		2 097 519		161 200		1 139 748		6 781		13 651		1 940		178 086
Investment income			--		17 276		6 780		20 341		3 716		17 276		6 780		20 341
Interest income			335 646		778 924		715 349		2 610 012		64 591		224 839		228 730		822 124
Capital gain			--		--		26 750		26 750		--		--		26 750		26 750
Other income			593 639		1 110 334		447 967		1 262 485		714 269		1 423 974		356 426		1 007 656
Gain/(losses) from foreign currency translation exchange			445 846		1 078 844		( 100 028)		(2 240 124)		69 912		( 306 720)		81 675		( 530 863)
Profit before taxes			9 181 931		59 088 360		20 262 193		85 795 867		(2 942 951)		(6 261 007)		( 128 189)		1 964 655
Minority interest			( 6 194)		( 33 025)		( 10 276)		( 42 040)		--		--		--		--
Profit after tax and minority interest			9 175 737		59 055 335		20 251 917		85 753 827		(2 942 951)		(6 261 007)		( 128 189)		1 964 655

PAINTS AND CHEMICAL INDUSTRIES COMPANY "PACHIN" S.A.E.
Consolidated Cash Flows Statement
From July 1, 2008 until March 31, 2009
		Consolidated				Pachin
		31/03/2009		31/03/2008		31/03/2009		31/03/2008
	Notes	EGP		EGP		EGP		EGP
Cash Flows from Operating Activities
Net Profit before Tax and Minority Interest		59 088 360		85 795 867		(6 261 007)		1 964 655
Adjustments to Reconcile Net Profit to Net  Cash Provided from Operating Activities
Depreciation		8 876 261		7 133 428		1 482 031		1 574 644
Capital gain		--		( 26 750)		--		( 26 750)
Gain on revaluation of trading investment		(2 097 519)		(1 139 748)		( 13 651)		( 178 086)
Profit on the sale of investments		(2 194 655)		(1 254 943)		( 466 753)		( 814 302)
Provision used		--		(2 006 550)		--		(1 317 855)
Operating Profit before Working Capital Changes		63 672 447		88 501 304		(5 259 380)		1 202 306
(Increase) decrease in receivables and other debit balances		(11 227 376)		(5 775 565)		99 097 505		74 360 353
(Increase) in inventories and letter of credit		(59 513 566)		(15 925 718)		(10 141 107)		(7 073 270)
Increase in creditors and other credit balances		11 489 471		13 418 929		4 836 841		1 998 776
Net Cash Provided from Operating Activities		4 420 976		80 218 950		88 533 859		70 488 165
Cash Flows from Investing Activities
Purchase of investments for trading		(124 341 450)		(145 950 867)		(72 650 166)		(79 470 490)
Proceeds from the sale of investments for trading		202 815 725		154 142 443		73 226 185		80 408 095
Purchase of fixed assets and other long-term assets		(27 162 776)		(53 190 773)		(2 539 658)		(1 647 342)
Purchase of investments in subsidiary (Pachin for Inks)		--		--		(17 493 000)		(9 996 000)
Proceeds from the sale of fixed assets		499 641		140 025		499 641		103 479
Net Cash (used in) Provided from Investing Activities		51 811 140		(44 859 172)		(18 956 998)		(10 602 258)
Cash Flows from Financing Activities
Proceeds from banks overdraft		16 849 466		33 602 648		82 510		12 270 773
Dividends paid		(83 203 278)		(81 797 778)		(78 462 778)		(78 374 967)
Net Cash (used in) Financing Activities		(66 353 812)		(48 195 130)		(78 380 268)		(66 104 194)
Net changes in cash and cash equivalents during the period		(10 121 696)		(12 835 352)		(8 803 407)		(6 218 287)
Net cash and cash equivalents at beginning of the period	(15)	61 850 705		85 611 100		18 824 940		30 065 484
Net cash and cash equivalents at end of the period	(15)	51 729 009		72 775 748		10 021 533		23 847 197

PAINTS AND CHEMICAL INDUSTRIES COMPANY "PACHIN" S.A.E.
Cosolidated Changes in Shareholders' Equity Statement
From July 1, 2008 till March 31, 2009
	Share		Reserves		Retained		Profit for the		Minority Interest		Total
	Capital				Earnings		Year
	EGP		EGP		EGP		EGP		EGP		EGP
Balance as of June 30, 2007	200 000 000		182 311 140		6 824 029		100 884 170		168 045		490 187 384
Transferred to reserves	--		9 109 651		--		(9 109 651)		--		--
Transferred to retained earnings	--		--		10 014 913		(10 014 913)		--		--
Dividends	--		--		--		(81 759 606)		( 38 172)		(81 797 778)
Net profit as of June 30, 2008	--		--		--		107 917 721		52 525		107 970 246
Balance as of June 30, 2008	200 000 000		191 420 791		16 838 942		107 917 721		182 398		516 359 852
Transferred to reserves	--		10 333 710		--		(10 333 710)		--		--
Transferred to retained earnings	--		--		14 423 583		(14 423 583)		--		--
Dividends	--		--		--		(83 160 428)		( 42 850)		(83 203 278)
Net profit as of March 31, 2009	--		--		--		59 055 335		33 025		59 088 360
Balance as of March 31, 2009	200 000 000		201 754 501		31 262 525		59 055 335		172 573		492 244 934

Paints and Chemical Industries Company "Pachin"

(S.A.E.)

Notes to the Consolidated Financial Statements

As of December 31, 2008

1. Background

Paints and Chemical Industries Company "Pachin" (SAE) 

The company was established according to the Ministerial Decree No. 751 for 1958. On October 3, 1997, the Extraordinary General Assembly agreed to circulate 27% of its share via GDR offer in the Stock Markets of London and New York. Accordingly, the Holding Company's share was reduced to less than 50 %, and the company became subject to the Companies Law No. 159 for 1981 and its executive regulation. The Commercial Register was issued after this modification on October 15, 1997. On October 31, 2000, the Extraordinary General Assembly agreed to amend some articles in the Articles of Incorporation.

The company's objective is to manufacture various kinds of paints, varnishes, printing inks, animal extract products and related products, in addition to purchasing and dividing land for the purpose of using or reselling, and performing specialized construction works.

El-Obour for Paints and Chemicals Industries Company (SAE)

The company was established according to the General Authority for Investment and Free Zones Decree No. 78 for 1999 and Law No. 8 for 1997 and its executive regulation. The Company was registered at the Commercial Register on January 14, 1999. On September 19, 2006, the Extraordinary General Assembly agreed to amend Article No. (2) of the company's Articles of Incorporation by adding the trademark of "Pachin" to the Company's name. Therefore, the company's name became El Abour for Paints and Chemical Industries Company "Pachin"

The company's objective is to manufacture various kinds of paints, varnishes, printing inks, animal extract products and related products and also, to manufacture other chemical products and special packages for the company's products.

Pachin for Inks

The company was established according to the General Authority for Investment and Free Zones Decree No. 13623 for 2005, and Law No. 8 for 1997 and its executive regulation. The company was registered at the Commercial Register on April 27, 2005.

The company's objective is to manufacture and pack printing inks and related products and to manufacture other chemical products and special packages for the company's products.

2. Significant Accounting Policies

The consolidated financial statements have been prepared according to the Egyptian Accounting Standards and applicable laws and regulations. The Egyptian Accounting Standards require referral to the International Financial Reporting Standards "IFRS", when no Egyptian Accounting Standard or legal requirement exist to address certain types of transactions and their treatment. 

The principal accounting policies adopted in the preparation of the financial statements are set out below:

a. Basis for Preparing the Consolidated Financial Statements

The consolidated financial statements incorporate the financial statements of the subsidiary companies under the control of the Holding Company (Paints and Chemical Industries Company "Pachin"(SAE). The subsidiaries are represented in El-Obour for Paints and Chemical Industries Company where the Holding Company's share is 99.95%, and Pachin for Inks where the Holding Company's share is 99.96%.

The consolidated financial statements are prepared on the following basis:

All inter-company transactions and balances are eliminated.

The unrealized profits resulting from the inter-company transactions are eliminated.

The cost method is used to account for the ownership in subsidiaries.

The consolidated income statement includes the results of operation for all subsidiary companies starting from the date of ownership, and the minority interest is eliminated.

b. Property, Plant and Equipment

Property, plant and equipment are recorded at historical cost and are depreciated over their estimated useful life on a straight-line basis at the rates stated below:

Type of Asset	Depreciation Rate
Buildings and constructions	2 - 5 %
Machinery and equipments	4.9 - 7.5 %
Vehicles	10 - 20 %
Tools	7.5 %
Furniture and office equipments	10 %

c. Projects under Construction

Projects under construction are carried at cost, less any recognized impairment loss. Costs include all costs associated with acquiring the asset and bringing it to ready for use condition. The depreciation of these assets follows the same basis of similar fixed assets. The projects under construction are charged with the costs of new projects, and the purchased equipments that are not used yet.

The amounts paid as advances for purchasing property, plant and equipment are recorded as projects under construction. When the asset is received and is ready for use, it is transferred to fixed asset and is depreciated on the same basis as similar fixed assets.

d. Long-Term Assets 

The other long term assets (Patent) are recognized according to acquisition cost. On the balance sheet date, the book value of assets is reviewed and in the case that there are indications that the recoverable amounts of these assets is lower than their book value, then the carrying value of assets will be reduced to its recoverable amount, and the impairment loss is recognized immediately and charged to the income statement. 

e. Impairment of Assets

On the balance sheet date, the book value of assets owned by the company is reviewed (except for inventory), and in the case that there are indications that the recoverable amounts of these assets is lower than their book value, then the carrying value of assets will be reduced to its recoverable amount, and an impairment loss is recognized immediately and charged to the income statement. 

On the balance sheet date, the company's management (periodically) revaluates, the existence of indications of impairment in the losses value, which were previously recognized resulting from the impairment of the assets' book value in the previous periods. In case of existence of these indications, this impairment is revaluated and reflected so that the book value of these assets does not exceed the original net book value before recording the impairment loss.

f. Investments in Subsidiaries and Available for Sale Investments

- Investments in subsidiary companies and long-term investments are stated at cost. The company assesses whether there is any indication that the value of each investment is impaired. If such indication exists, the value of the related investment is reduced by the impairment loss and this loss is charged to the income statement, for each investment separately.

- The available for sale financial investments, with no reliable fair value, are recognized according to all its related costs, less the impairment losses of its value. These losses are charged to the income statement.

g. Inventories

Inventories are stated at the lower of cost or net realizable value as follows: 

Raw Materials, Packaging, Spare Parts and Fuel

Cost is calculated using the weighted average method. 

Work in-Progress

The cost includes direct and indirect manufacturing costs of partially completed stages in addition to the material, direct wages costs of the completed production stage.

Goods Available for Sale 

Goods available for sale are stated at cost.

Consignment Goods

Consignment goods from finished product are stated at manufacturing cost. 

Finished Goods 

Finished goods are stated at manufacturing cost.

h. Accounts Receivable

Accounts receivable are carried at nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. Allowances for accounts receivable are formed when there is evidence that the company will not be able to recover the amounts due according to the original terms of receivables. The provision represents the difference between the book value and the recoverable as stated in the expected cash flows.

i. Investments for Trading:

Investments for trading which are issued by banks are stated at fair value, representing its recoverable value as of evaluation date. The resulting differences are stated in the income statement, while the investment certificates are evaluated at their nominal value. 

j. Cash and Cash Equivalents

Cash and cash equivalents are stated at their nominal value. 

k. Provisions

Provisions are recognized when the company has a present obligation (legal or constructive) as a result of past events and that it is probable that an outflow of economic resources will be required to settle the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date. When the effect of the time value of money is material, the amount of a provision shall be the present value of expected expenditures, required to settle the obligation.

l. Accounts Payable 

Accounts payable are recorded at their fair value.

m. Foreign Currencies Transactions

The company maintains its accounts in Egyptian pound. Transactions denominated in foreign currencies are recorded using the exchange rates prevailing at the transaction date. On the financial statements date, balances of monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate prevailing on that date. Differences arising from revaluation are stated in the income statement.

n. Revenue Recognition

Revenue is recognized on an accrual basis upon delivery of goods to customers and the issuance of the sales invoice.

Interest income is recognized on an accrual basis.

o. Borrowing Cost

Borrowing cost is recorded in the income statement as financing expenses in the period it was incurred. 

p. Cash Flows Statement 

The cash flows statement is prepared using the indirect method. For the purpose of preparing the cash flows statement, cash and cash equivalents are comprised of cash on hand and at banks and checks under collection. 

q. Taxation

The company's tax is calculated based on the prevailing tax laws and regulations in Egypt.  A provision is formed for tax liabilities after performing sufficient studies in the light of the tax assessments. 

Deferred tax is recognized on the temporary differences between the assets and liabilities tax bases set by the new Egyptian tax law, and their reported amounts per the accounting principles used in the preparation of the financial statements. Accordingly, the income statement for the reporting period is to be charged by the tax burden represented by the current tax (calculated on taxable profit based on local tax laws, regulations, instructions and tax rates ruling at the date of the financial statements), as well as the deferred tax.

Generally, the recognized deferred tax liabilities on taxable temporary differences are reported as long-term liabilities, whereas deferred tax assets reported as long-term assets shall not be recognized for deductible temporary differences except to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized or there is convincing evidence that sufficient taxable profit will be available in the future.

r. Financial Instruments 

A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise. Financial assets and liabilities are recognized on the company's balance sheet when the company becomes a party to the contractual rights and obligations of the financial instrument.

Financial Assets: are represented in cash on hand and at banks, accounts and notes receivable, and certain other debit balances.

Financial Liabilities: are represented in short-term loans, accounts and notes payable and certain other credit balances.

 

s.Use of Estimates

The preparation of financial statements in conformity with the Egyptian Accounting Standards requires the company's management to make estimates and assumptions about the carrying amounts of assets and liabilities at the balance sheet date, and the reported amounts of revenues and expenses during the reporting period. 

The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from those estimates used in the preparation of the financial statements. The estimates and underlying assumptions are reviewed on an ongoing basis. 

3. Sales Analysis

	Consolidated		Pachin
	Quantity (Ton)	Amount'000	Quantity (Ton)	Amount'000
Paints	48 942	404 486	6 867	78 280
Inks	610 1	37 365	968	22 178
Animal Extract Product	725	3 889	725	3 889
		445 740		104 347

4. Property, Plant and Equipment
	Lands		Buildings		Machinery		Vehicles		Tools		Furniture		Total
					and						and Office
					Equipments						Equipments
	EGP		EGP		EGP		EGP		EGP		EGP		EGP
Cost
As of July 1, 2008	40 149 216		98 480 339		129 222 306		15 168 517		14 695 141		13 577 732		311 293 251
Additions	--		37 119 405		137 236		149 390		240 507		87 644		37 734 182
Disposals	--		--		( 714 535)		( 3 190)		( 7 679)		( 1 969)		( 727 373)
Cost as of March 31, 2009	40 149 216		135 599 744		128 645 007		15 314 717		14 927 969		13 663 407		348 300 060
Accumulated Depreciation
As of July 1, 2008	--		(20 264 140)		(48 398 223)		(10 714 158)		(7 266 145)		(8 726 009)		(95 368 675)
Depreciation charge	--		(2 042 038)		(4 292 677)		(1 149 097)		( 683 485)		( 708 964)		(8 876 261)
Disposals	--		--		216 813		1 271		7 679		1 969		227 732
As of March 31, 2009	--		(22 306 178)		(52 474 087)		(11 861 984)		(7 941 951)		(9 433 004)		(104 017 204)
NBV @ March 31, 2009	40 149 216		113 293 566		76 170 920		3 452 733		6 986 018		4 230 403		244 282 856
NBV @ June 30, 2008	40 149 216		78 216 199		80 824 083		4 454 359		7 428 996		4 851 723		215 924 576
Pachin Company:
	Land		Buildings		Machinery		Vehicles		Tools		Furniture		Total
					and						and Office
					Equipments						Equipments
	EGP		EGP		EGP		EGP		EGP		EGP		EGP
Cost
As of July 1, 2008	173 143		19 788 333		29 484 774		6 096 592		5 496 852		6 813 420		67 853 114
Additions	--		--		132 399		132 340		239 327		50 829		554 895
Disposals	--		--		( 714 535)		( 3 190)		( 7 679)		( 1 969)		( 727 373)
Cost as of March 31, 2009	173 143		19 788 333		28 902 638		6 225 742		5 728 500		6 862 280		67 680 636
Accumulated Depreciation
As of July 1, 2008	--		(10 024 059)		(25 579 775)		(5 308 927)		(3 694 959)		(5 392 170)		(49 999 890)
Depreciation charge	--		( 359 112)		( 552 567)		( 202 607)		( 166 082)		( 201 663)		(1 482 031)
Disposals	--		--		216 813		1 271		7 679		1 969		227 732
As of March 31, 2009	--		(10 383 171)		(25 915 529)		(5 510 263)		(3 853 362)		(5 591 864)		(51 254 189)
NBV @ March 31, 2009	173 143		9 405 162		2 987 109		715 479		1 875 138		1 270 416		16 426 447
NBV @ June 30, 2008	173 143		9 764 274		3 904 999		787 665		1 801 893		1 421 250		17 853 224

5. Projects under Construction

	Consolidated			Pachin
	31/3/2009		30/6/2008		31/3/2009		30/6/2008
	EGP		EGP		EGP		EGP
Machinery and equipments	10 254 451		3 503 813		2 708 995		767 335
Buildings	8 744 839		35 171 400		--		--
Tools and equipments	1 396 846		109 259		93 190		--
Furniture	1 269 416		--		207 859		--
Vehicles	2 428 734		--		281 736		--
Software and programs	7 802 495		7 162 513		44 500		44 500
	31 896 781		45 946 985		3 336 280		811 835
Letter of credit (Fixed Assets)	--		717 749		536 629		717 749
Capital expenditure	6 190 365		1 993 818		--		358 562
Balance	38 087 146		48 658 552		3 872 909		1 888 146

6. Investment in Subsidiaries

Company Name	Issued Capital EGP	Ownership %	Ownership Amount EGP	Paid %	31/3/2009 Paid Amount EGP	30/6/2008 Paid Amount EGP
Obour for Paints and Chemical Industries	200 000 000	99. 95%	199 900 000	100%	199 900 000	199 900 000
Pachin for Inks	50 000 000	99. 96%	49 980 000	100%	49 980 000	32 487 000
					249 880 000	232 387 000

These companies are not listed in the stock market.

7. Available for Sale Investments

	Consolidated		Pachin
	31/3/2009 EGP	30/6/2008 EGP	31/3/2009 EGP	30/6/2008 EGP
Governmental bonds at the National Investment Bank	774 906	774 906	774 906	774 906

8. Other Long-Term Assets

Other long -term assets as of March 31, 2009 amounting to EGP 16 016 000 , equivalent to Euro 2 200 000 represent the amount paid to the Danish Company Deroup A/S for the final cession of the trademarks according to the contract dated December 4, 2006.

9. Inventories

	Consolidated				Pachin
	31/3/2009		30/6/2008		31/3/2009		30/6/2008
	EGP		EGP		EGP		EGP
Raw materials and packaging	180 348 028		125 802 830		71 849 361		60 996 178
Less: Provision for scrap materials	(500 396)		(500 396)		(500 396)		(500 396)
	179 847 632		125 302 434		71 348 965		60 495 782
Finished products	35 422 386		25 448 613		11 024 581		11 039 635
Less: Provision for finished goods	(798 649)		(798 649)		(798 649)		(798 649)
	34 623 737		24 649 964		10 225 932		10 240 986
Fuel and spare parts	7 598 318		7 774 437		4 347 504		4 234 626
Less: Provision for spare parts	(481 533)		(481 533)		(481 533)		(481 533)
	7 116 785		7 292 904		3 865 971		3 753 093
Work in-progress	6 797 203		6 016 178		3 121 489		2 340 464
Consignment goods with others	798 342		1 301 893		798 342		1 301 893
Inventories for sale purpose	919 807		299 548		919 807		299 548
Scrap	175 023		546 655		175 023		308 028
	230 278 529		165 409 576		90 455 529		78 739 794

10. Accounts Receivable (net)

	Consolidated			Pachin
	31/3/2009	30/6/2008		31/3/2009	30/6/2008
	EGP	EGP		EGP	EGP
Accounts receivable	53 106 615	47 486 112		37 161 758	38 741 036
Less:
Impairment for accounts receivable	(10 882 761)	(10 882 761)		(7 750 900)	(7 750 900)
	42 223 854	36 603 351		29 410 858	30 990 136

11. Notes Receivable (Net)

	Consolidated			Pachin
	31/3/2009	30/6/2008		31/3/2009	30/6/2008
	EGP	EGP		EGP	EGP
Notes receivable	11 155 613	11 996 224		2 635 238	6 204 840
Less:
Impairment for notes receivable	(1 438 000)	(1 438 000 )		(438 000)	(438 000)
	9 717 613	10 558 224		2 197 238	5 766 480

12. Due from Subsidiary (Pachin for Inks)

The balance of this account amounting to EGP 4 450 100, stated in the standalone balance sheet of Paints and Chemical Company "Pachin" , represents the amounts paid by the Holding Company on behalf of the mentioned company. 

13. Other Debit Balances

	Consolidated			Pachin
	31/3/2009	30/6/2008		31/3/2009	30/6/2008
	EGP	EGP		EGP	EGP
Accrued income	224 999	299 370		96 883	95 100 698
Advanced to purchase investments *	1 147 650	1 147 650		1 147 650	1 147 650
Advanced to suppliers	4 500 229	2 930 357		2 022 296	1 567 929
Employees loans	759 526	804 711		759 526	804 711
Deposits with others	2 959 455	1 806 099		1 841 122	958 997
Corporate tax**	28 882 618	28 882 618		28 882 618	28 882 618
Withholding tax	8 438 812	7 409 913		7 765 723	7 232 623
Sales tax	2 668 719	--		--	--
Other debit balances	8 067 584	7 921 490		3 976 280	3 374 839
	57 649 592	51 202 108		46 492 098	139 070 065

*  This balance represents the advance payments to purchase investments in Pachin - Libya for Paints and Chemical Industries (under construction) with a percentage of 25% of the contribution value amounting to a million Libyan Dinar (50%), paid during June 2008.

** This balance represents: 

14. Trading Investments 

	Consolidated			Pachin
	31/3/2009	30/6/2008		31/3/2009	30/6/2008
	EGP	EGP		EGP	EGP
Investment Certificates	1 590 886	75 772 987		222 112	317 727
	1 590 886	75 772 987		222 112	317 727

15. Cash and Cash Equivalents

	Consolidated			Pachin
	31/3/2009	30/6/2008		31/3/2009	30/6/2008
	EGP	EGP		EGP	EGP
Cash on hand	2 091 279	--		1 072 227	--
Banks current accounts	17 851 418	13 083 020		4 123 457	3 596 031
Banks time deposits	29 849 977	42 046 799		3 631 250	12 676 673
Checks under collection*	1 936 335	6 720 886		1 194 599	2 552 236
	51 729 009	61 850 705		10 021 533	18 824 940

* Represents outstanding checks with due dates before 31/3/2009, which were collected after this date.

16. Provisions 

	Balance  as of  1/7/2008	Provision  Established  during  the Period	Provision  No Longer Required during  the Period	Provision Utilized during the Period	Balance  as of  31/3/2009
	EGP	EGP	EGP	EGP	EGP
A- Provisions-Current Liabilities
Provision for tax disputes	32 149 283	--	--	--	32 149 283
Provision for claims	6 196 743	--	--	--	6 196 743
Other provisions	582 705	--	--	--	582 705
Total provisions (current liabilities)	38 928 731	--	--	--	38 928 731
B- Provisions Deducted from Current Assets
Accounts receivable provision	10 882 761	--	--	--	88 276 110
Notes receivable provision	1 438 000	--	--	--	1 438 000
Raw material provision	500 396	--	--	--	500 396
Finished goods provision	798 649	--	--	--	798 649
Spare parts provision	481 533	--	--	--	481 533
	53 030 070	--	--	--	53 030 070

17. Banks Overdraft

Banks overdraft represent credit facilities that the group has obtained from various banks as of  March 31, 2009 amounting to EGP 18 .459 million These facilities are secured by time deposits.

18. Accounts and Notes Payable

	Consolidated			Pachin
	31/3/2009	30/6/2008		31/3/2009	30/6/2008
	EGP	EGP		EGP	EGP
Accounts payable	46 099 212	42 549 461		10 188 189	10 534 572
Notes payable	3 401 101	1 648 796		812 621	302 195
	49 500 313	44 198 257		11 000 810	10 836 767

19. Due to El-Obour for Paints and Chemicals Industries Company

The balance of this account amounting to EGP 16 199 324, stated in the standalone balance sheet of Paints and Chemical Company "Pachin" , represents the amounts paid by the Holding Company on behalf of the mentioned company. 

20. Other Credit Balances

	Consolidated		Pachin
	31/3/2009	30/6/2008	31/3/2009	30/6/2008
	EGP	EGP	EGP	EGP
Accrued expenses	6 957 706	9 125 517	6 271 109	7 785 155
Accounts receivable - credit balances	17 352 027	10 056 260	2 955 944	2 454 789
Sales tax	3 864 746	2 862 528	844 344	1 057 193
Fixed assets - creditors	1 791 667	3 295 574	148 444	31 594
Deposit to others	6 635 340	5 366 855	1 451 390	915 840
Employees share in profit	43 104	1 523 624	43 104	42 242
Withholding tax	363 863	404 159	132 493	147 399
Current portion of sales taxes *	84 879	352 172	--	--
Salary tax	--	130 984	--	130 984
Other employees benefits	4 082 370	4 082 371	4 082 370	4 082 371
Income tax	1 060 898	1 060 898	653 906	653 906
Other creditors	4 478 355	2 208 959	787 480	638 061
	46 714 955	40 469 301	17 370 584	17 939 534

* Refer to Note No. "23-A"

21. Paid-up Capital

The company's authorized capital amounted to EGP 200 million, and the issued and paid-up capital amounted to EGP 200 million, distributed among 20 million shares with par value of  EGP 10 each. 

22. Reserves

	Consolidated		Pachin
	31/3/2009	30/6/2008	31/3/2009	30/6/2008
	EGP	EGP	EGP	EGP
Legal reserve	123 145 688	112 811 978	96 950 162	92 018 484
Reserve invested in treasury bonds	774 905	774 905	774 905	774 905
Fixed assets reserve	6 290 899	6 290 899	6 290 899	6 290 899
Other reserves	71 543 009	71 543 009	71 543 009	71 543 009
	201 754 501	191 420 791	175 558 975	170 627 297

23. Long-Term Liabilities 

The long-term liabilities are represented as follows: 

The sales tax installment on the imported assets which amounted to EGP 122 813 (after deducting the current portion and recording it in other credit balances).

The deferred revenue related to the company's granted assets which will be recorded revenue over the estimated useful lives of those assets amounting to EGP 420 365.

The deferred tax liability amounting to EGP 7 967 527, resulting from the difference between the books depreciations rates and the tax depreciations rates (Refer to Note No. "2Q").

24. Long-Term Loans 

The company obtained a loan amounting to EGP 40 million during January 2009 from the Industry Developing Bank guaranteed by Pachin for Chemical Industry Co. and El Obour for Chemical Industry Co. in addition, Pachin for Link is obligated not to mortgage any buildings or machines to any banks.

The loan installment amounting to EGP 8 million, is to be paid over five semi-annual installments. The first installment in the amount of EGP 9.444 million, is due on December 31, 2009 (after a 6 month grace period), and after adding interest and commissions (Cloredor at the rate of 1.5%, interest 13% yearly, and commission at .05% monthly ). The last installment is due on December 31, 2011. 000 000 8

31/3/2009
EGP
8 000 000	Short term loans
32 000 000	Long term loans
40 000 000

25. Contingent Liabilities

The uncovered portion of the Letters of Credit amounted to EGP 943 423 as of March 31, 2009.

26. Capital Commitments 

The capital commitments at March 31, 2009 are represented in :

The unexecuted portion of the factory building for Pachin for Inks amounting to EGP 1.7 million.

The unpaid portion of the Letters of Credit amounting to EGP 421 391  as of March 31, 2009.

The unpaid portion of the company's share in Pachin - Libya for Paints and Chemical Industries amounting to 750 000 Libyan Dinar.

27. Managing the Risks Related to Financial Instruments 

Foreign Exchange Risk 

Foreign currency risk represents the change in currency rates, which affects the receipts, disbursements and the translation of assets, and liabilities in foreign currencies. The company exerts all efforts to avoid having a net foreign currency open position.

Credit Risk 

This risk represents some customers' failure to pay their debts on due dates. The company forms a provision for doubtful debts to meet this risk.

.Interest Rate Risk

This risk represents the change in interest rates which affects the operations results. The company's management exerts all efforts to obtain the best conditions in the market for banking facilities and performs periodic review on the interest rates.

Fair Value

The fair value of financial instrument does not differ from the book value as of the balance sheet date.

28. Tax Position

Paints and Chemicals Industries Company

The company is subject to corporate tax according to Law No. 91 for 2005. The company submits its tax returns on due time and pays the due taxes. The Tax Authority inspected the company's books and the taxes were settled and paid until June 30, 1993.

The Tax Authority inspected and assessed the company's books for years 1993/1994  until 1996/1997, and the disputed points were transferred to court.

The Tax Authority inspected the company's books for year 1997/1998 until 2000/2001. The company objected the claim resulting from the inspection and the disputed points were transferred to the Internal Committee. The tax claims amounted to EGP 26.5 million. The disputed points were transferred to the Appeal Committee and the final resolution has not been determined yet.

The Tax Authority inspected and assessed the company's books for years 2001/2002  until 2004/2005, and the company received a tax claim amounting to EGP 89 568 684 which the company objected, and the disputed points were transferred to the Internal Committee. The management believes that these claims will be greatly reduced. 

The Tax Authority inspected the company's books for sales tax until June 30, 2006. 

The Tax Authority inspected and assessed the company's books for salary tax until 2004.

El-Obour for Paints and Chemicals Industries Company

The company is enjoying a tax exemption starting from the first year of operation according to Law No. 8 for 1997. This exemption will end on June 30, 2011.

The Tax Authority inspected the company's books for sales tax until June 30, 2006 and the due tax was paid.

The company's books where not inspected for salary tax yet.

Pachin for Inks

The company is subject to the provisions of Law No. 8 for 1997 and its executive regulations. The company started its operation on May 8, 2008.

Financial Controller

Chairman of the Board and Managing Director

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